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1981 DIGILAW 30 (CAL)

Shib Chandra Biswas v. Satish Chandra Sardar

1981-01-27

PRODYOT KUMAR BANERJEE

body1981
JUDGEMENT This appeal at the instance of the defendant No. 2 arises out of a suit for enforcement of an agreement. 2. The plaint case is that the suit property is the southern half of the c.s. plot No. 979. Satish Sarkar executed a kobala in respect of the property in favour of the defendant No. 1 (Ex. 1) who is the brother's son of the plaintiff on 17.5.56 On the same date the defendant No. 1 executed an ekrarnama in favour of the plaintiff. The suit property originally belonged to Nadia Raj appertaining to a Jama of Rs. 15-3 pies. The stipulation in the agreement was that on repayment of the consideration money the defendant No. 1 should recovery the suit property to the plaintiff or his successors. Ekrarnama is Ext. 2 where the consideration is mentioned as Rs. 100.00. The terms were that in case the defendant No. 1 or his successors at any time should sell the suit properly they shall sell only to the plaintiff or his suceessors and to none else at the consideration money mentioned. The further case of the plaintiff is that in violation of the terms of the covenant the defendant No. 1 sold the suit property to the defendant No. 2 by Ext. A dated 12.2.65. The sale is mala fide and collusive and the plaintiff prays for a decree for a decree for specific performance of the contract. Defence case is that the defendant No. 2 who is contesting is a bona fide purchaser for value without notice of the contract if there be any. That at the time of his purchase defendant No. 1 his brother was in possession and after due enquiry, from the landlord's sherista as to the title, he purchased. 3. The question which arose for consideration in both the courts below is whether the agreement between the defendant No. 1 and the plaintiff comes within the mischief of S. 10 of Transfer of Property Act. Secondly it was further held by the courts below that the defendant No. 2 purchased the property in question with constructive notice. However, in my opinion, if the first question is answered in favour of the defendant it is not necessary at all to answer the second question at all. 4. Secondly it was further held by the courts below that the defendant No. 2 purchased the property in question with constructive notice. However, in my opinion, if the first question is answered in favour of the defendant it is not necessary at all to answer the second question at all. 4. In so far as I am concerned, the only question for my consideration is whether S. 10 of the said Transfer of Property Act stands in the way and makes the agreement void ad initio. Section 10 of the Transfer of Property Act is in the following terms :- "Where property is transferred subject to a condition or limitation absolutely restraining the transferee or any person claiming under him from parting with or disposing of his interest in the property, the condition or limitation is void, except in the case of a lease where the condition is for the benefit of the lessor or those claiming under him. Provided that property may be transferred to or for the benefit of a woman (not being a Hindu, Muhammadan or Buddhist) so that she shall not have power during her marriage to transfer or charge the same or her beneficial interest therein." 5. It appears to me that the agreement which was executed as on the date of the sale from the plaintiff to the defendant No. 1 makes it clear that the defendant or his successors must have to sell the property to the plaintiff or his successors in interest at the rate of Rs. 10000 which was the price on which the defendant purchased. Section 10 of the Act makes it clear that where a property is transferred subject to a condition or limitation absolutely restraining the transferee or any person claiming under him from parting with or disposing of his interest in the property the condition or limitation is void. In the present case in my opinion, the condition in the agreement in terms violates S 10 of the said Act. The principle underlying this section is that a right of a transfer is incidental to right of ownership and an absolute restraint inasmuch as the defendant No. 1 cannot sell the property to anybody else excepting the plaintiff or the plaintiff's successors in interest on price which is fixed at Rs. 10000. 6. Mr. The principle underlying this section is that a right of a transfer is incidental to right of ownership and an absolute restraint inasmuch as the defendant No. 1 cannot sell the property to anybody else excepting the plaintiff or the plaintiff's successors in interest on price which is fixed at Rs. 10000. 6. Mr. Kundu, appearing on behalf of the appellant, contended in view of the judgment reported in 1921 (LXIV) Indian Cases 408(All) where it has been held that a vendee of certain properties executed a separate document in favour of his vendor on the same date on which he got the sale deed in which he promised that when he or his heirs would want to transfer the properties purchased then he or they would sell them to the vendor for the same price which he had paid for it and would not sell them to any one else and that any transfer to any other person would be illegal. It was held that inasmuch as practically the two documents read together constituted a transfer or property subject to a limitation absolutely restraining the transferee from parting with of disposing of his interest in the contract, the agreement in substance amounted to an absolute restraint on alienation and was unenforceable. 7. In the case reported in AIR 1935 All 493 it was also held that a clause in a sale deed that the vendee should not transfer the property by mortgage, gift or sell to any one excepting vendor or his heirs is contrary to S. 10 of the Act and therefore void. In the said judgment of the Allahabad High Court Sulaiman, C.J. and Bennet, J. considered the ruling reported in 1932 PC 158 on which Mr. Banerjee, appearing for the respondent, relied, and came to a finding that "Their Lordships came to the conclusion that S. 10 T.P. Act did not make any change in the law prior to its enactment in 1882 and that the arrangement before their Lordships was an arrangement which would not be contrary to the provisions of S. 10. But I consider that the present case is very different from the family arrangement which was before the Privy Council." 8. But I consider that the present case is very different from the family arrangement which was before the Privy Council." 8. Sulaiman, C.J. concurring with the judgment of Bannet J. held that “In order to see whether there is absolute restraints or not one has to examine the effect of all the conditions and find whether for all practical purposes alienation is prohibited "It has been held that, "I agree with my learned brother that the Full Bench case cannot be treated as an authority for the proposition that S. 10 does not apply to such cases because the point was never argued by counsel before the learned Judges and there is nothing in the judgment to indicate that their attention was drawn to the contention. Looking at the conditions entered in the document prohibiting transfer by mortgage, gift of sale to anyone except the promises and his heirs and entitling the latter to recover it for Rs. 175/- only no matter for how much more it may be sold and even prohibiting an auction sale for more than Rs. 175/- and all this for all generations to come there is no doubt that for all practical purposes there is an absolute restraint on alienation and the conditions are void." 9. In my opinion this opinion expressed by Sulaiman, C.J. in terms applies to the facts and circumstances of this case. The agreement which was admittedly on the same date after the deed of purchase was executed and provided that the defendant's heir will have to sell the property, if he wants to, to the plaintiff for the same price of Rs. 100,00 on which he has purchased. This agreement to me is an absolute restraint on alienation as has been stated by Sulaiman C.J. all this for all generations to come there is no doubt that for all practical purposes there is an absolute restraint on alienation and the condition on the restraint is void under S. 10 of the Act, In my opinion, therefore, the appeal must succeed. The judgments and decrees of both the courts below are set aside and the plaintiff's suit is dismissed. There will be no order as to costs throughout. Appeal allowed.