RAMESH CHAND v. KANWAR SEN — 1985 DIGILAW 125 (DEL)

( 1 ) ORDER :- Plaintiffs 1 to 4 are the sons of defendant 1, Shri Kanwar Sen. They formed an HUF which owned large properties mentioned in the plaint. Subsequently these properties were divided amongst the parties and they became separate. On 30-3-1976 a partition deed was executed between them, which was subsequently registered on 27-7-1976. By virtue of the said partition deed properties No. 437 and 438, Kucha Brij Nath, Chandni Chowk, Delhi and property Nos. 252 and 253, Ward No. II, outside Kucha Ghasi Ram, Chandni Chowk, Delhi came to the share of the plaintiff and property No. 439, Kucha Baij Nath fell to the share of their father, the first defendant. Since the said properties were adjoining each other it was agreed between the parties that, if either of the party to the partition deed wishes to transfer or sell any part of the property allotted to it, then it would first offer the same for sale to the other party and on refusal of the other party, the party offering will have right to sell the same in the open market. Thus a preferential right of purchase was given by the parties mutually, to each other. ( 2 ) THE plaintiffs have now filed the present suit to enforce their right of pre-emption as per the partition deed and the cancellation of sale deed dt. 10-10-1981 executed between the defendants and for possession of the property bearing No. 439, Kucha Baij Nath, Chandni Chowk, Delhi. The allegations are that the defendant 1 illegally and without notice to the plaintiffs, transferred by sale his portion i. e. property No. 439, Kucha Baij Nath, Chandni Chowk, Delhi, to the second defendant namely - Shri Din Dayal Bhargava. On 3-10-1984 the plaintiffs came to know of this fact and on enquiry it was revealed that by virtue of the sale deed dt. 10-10-1981, registered on 12-10-1981, the sale was effected between the defendants for a consideration of Rs. 3,00,000/ -. It is also alleged that the second defendant now wishes to construct a new structure and has, therefore, commenced demolition proceedings of the existing structure. The plaintiff now alleges that the sale deed dt. 10-10-1981 is entirely illegal, void, and of no effect in law and the same deserves to be cancelled because it is in violation of their right of pre emption. The plaintiff now alleges that the sale deed dt. 10-10-1981 is entirely illegal, void, and of no effect in law and the same deserves to be cancelled because it is in violation of their right of pre emption. Hence the present suit praying for a decree for possession in respect of the property No. 439, Kucha Baij Nath, Chandni Chowk, Delhi and a declaration to the effect that the sale deed dt. 10-10-1981 executed between the defendants is null and void and has no effect in law. ( 3 ) ALONG with the suit the plaintiff also preferred to move an application LA. No. 7208/1984 under O. 39 Rr. 1 and 2 C. P. C. praying for the grant of an ad interim injunction restraining the defendants from alienating, transferring or parting with possession of the suit property or making any other alteration in the existing structure at site. After hearing the learned counsel for the plaintiff on this application, the ad interim injunction as prayed for was granted by this Court on 14-12-1984. ( 4 ) AFTER the service of the notice of the suit as well as the application the defendant 1 filed the written statement. In nutshell his plea is that before the sale of the property in dispute to defendant 2 the plaintiffs were informed and were also told about the consideration price. The plaintiffs refused to purchase the property on the ground that they cannot afford to purchase the same being in a dilapidated condition and numerous tenants at old rates residing therein. It is also alleged that the plaintiffs came to know of the sale of this house on 10-10-1981 when the sale deed was presented for registration. ( 5 ) DEFENDANT 2 on the other raised number of preliminary objections in his written statement, the foremost being that the present suit is barred by time, inasmuch as, it has been filed much after three years of the execution of the sale deed of the property in dispute. It is also stated that the plaintiffs had full knowledge of the execution of the sale deed since all the negotiations for sale were conducted in their presence by defendant 1, in the month of May, 1981. It is also stated that the plaintiffs had full knowledge of the execution of the sale deed since all the negotiations for sale were conducted in their presence by defendant 1, in the month of May, 1981. In Oct, 1981 the defendant 1 also handed over the vacant possession of one room to the answering defendant and thereafter he moved the Slum Department for permission to re-construct the property. Subsequently the Municipal Corporation of Delhi sanctioned the building plan on 18-10-1984, in consequence of which the answering defendant demolished the entire structure. The tenants who had been occupying the premises since 1982 onwards vacated the premises and handed over the vacant possession to the answering defendant, to the knowledge of the plaintiff. The Income-Tax department also issued a notice dt. 25-5-1982 requiring the defendants to show cause why the property should not be acquired under S. 269 of the I. T. Act for undervaluation for which there was a beat of drum outside the premises, inviting public objections. The plaintiffs and defendant No. 1 had also filed the affidavit before the I. T. O. informing him of the partition deed. The plaintiffs now in collusion wih the defendant 1 have filed the present suit with a view to extract more money from the answering defendant. The answering defendant also denied the various pleas raised by the plaintiffs, which at this stage is not relevant for the purpose of deciding the point in issue. ( 6 ) DURING the course of hearing arguments on the application (IA No. 7208/1984) learned counsel for the defendants contended that the plaintiff s suit is hopelessly barred by time and the ad interim injunction already granted in their favour is liable to be vacated. Learned counsel also contends that this legal proposition can be decided on the basis of the averments made in the pleadings and the documents filed by the parties. It is not disputed that Article 97 of the Limitation Act is applicable to the facts of the present case. It reads as under: - article 97: description of Suit period of Limitation time from which period begins to turn to enforce a right of pre-emption whether the right is founded on law or general usage or on special contract. It is not disputed that Article 97 of the Limitation Act is applicable to the facts of the present case. It reads as under: - article 97: description of Suit period of Limitation time from which period begins to turn to enforce a right of pre-emption whether the right is founded on law or general usage or on special contract. One year when the purchaser takes under the sale sought to be impeached, physical possession of the whole or part of the property sold, or where the subject-matter of the whole or part of the property, when the instrument of sale is registered. The submission of the learned counsel for the defendant is that the present case is covered by the second part inasmuch as he was not given the possession of the whole or part of this property at the time of the registration of the sale deed. It was in occupation of the tenants. The limitation of one year will begin to run from the date when the instrument of sale was registered. The contention of the learned counsel for the plaintiff on the other hand is that his case is covered by the first part of this Article. According to him defendant 2 came in occupation of the property on 3-10-1984 when he started demolition action. ( 7 ) THERE is no dispute about the fact that the defendants entered into an agreement of sale of the property No. 439, Kucha Baij Nath, Chandni Chowk, Delhi on 10-10-1981. This deed of sale was registered on 12-10-1981. The present suit was instituted on 13-12-1984. The plaintiffs are enforcing their right of preemption on the basis of the deed of partition dt. 30-3-1976, under which the plaintiffs and their father separated from each other and divided the properties. Clause (e) of thepartition deed is relevant for the purpose of the present suit. It reads as under :- if any one or more parties want to transfer the whole or part of the portion of the property allotted to him or them, he or they will first offer the same to the remaining party or parties at the market value prevailing at the time and only on the refusal of such party or parties, such property shall be transferable to a stranger. in compliance of this clause, according to the learned counsel for the plaintiffs, defendant 1 never informed the plaintiffs of his intention to enter into a sale agreement with defendant No. 2, nor obtained their refusal. It was only when the defendant 2 started demolition action of the suit property, the plaintiffs came to know of the execution of the sale deed. It is also urged that at the time of the entering into of agreement of sale, defendant 2 was supplied with the copy of the partition deed dt. 30-3-1976, inasmuch as, he came to know of the restriction which had been placed on defendant No. 1 in entering into a sale transaction. Even after coming to know of this hurdle no action was taken by any of the defendants. If these facts are taken on their face value then the plaintiffs, came to know of the transaction only on the 3rd Oct, 1984, and as such their suit filed in the month of Dec. 1984 must be held to be within limitation. ( 8 ) AFTER having considered these arguments in depth, I am of the opinion that there is much substance in the contention of the learned counsel for the defendants. At the outset it may be mentioned that the property at the time of its sale was under the occupation of as many as 12 tenants. A bare reading of Art. 97 of the Limitation Act of 1963 which corresponds to Art. 10 of the old Act of 1913, would show that two types of cases are covered by it. Firstly - if it is proved that the purchaser has taken, under the sale sought to be impeached, physical possession of the whole or part of the property sold, then the limitation of one year would start from the date when such physical possession was obtained. The words physical possession in this article mean present and immediate possession, regard being had to the form in which the property may exist at the time of the sale. Secondly - if the subject matter of sale did not admit of physical possession of the whole or part of the property, in that case the limitation of one year would start from the date when the sale deed was registered. Secondly - if the subject matter of sale did not admit of physical possession of the whole or part of the property, in that case the limitation of one year would start from the date when the sale deed was registered. In order to apply the first part of the third column of the Article, one has to see whether the subject matter of sale does admit of physical possession of the whole or part of the property and whether the purchaser has taken, under the sale sought to be impeached, such physical possession. ( 9 ) A house in occupation of a tenant when sold does not admit of immediate physical possession. The words does not admit of physical possession in this Article mean does not for the time being, admit of physical possesion , and in such cases time will begin to run from the date of the registration of the sale deed. The terminus a quo for a suit for pre-emption, whether the right is founded on law or general usage or of special contract prescribed under the first part of Art. 97 is the date when the purchaser takes, under the sale, physical possession of the whole or a part of the property . It is thus obvious that if the physical possession is not taken under the sale it would not apply. In such a case, the second part of Art. 97 would apply, if the sale is effected by a registered deed. The property, as in the present case, which is in possession of tenants is not capable of immediate and personal possession on the date of sale. In cases where a part of the property sold is tenanted, the entire property which is the subject matter of sale will not admit of physical possession. Even symbolic possession will not tantamount to physical possession. Under these circumstances the second part of Art. 97 will apply to this case, and the present suit must be held barred by time. ( 10 ) LET us now examine the contention of the plaintiffs. According to the learned counsel, the plaintiffs came to know of the execution/registration of the sale deed only when defendant 2 started demolition action of the property. This argument is also devoid of any substance. ( 10 ) LET us now examine the contention of the plaintiffs. According to the learned counsel, the plaintiffs came to know of the execution/registration of the sale deed only when defendant 2 started demolition action of the property. This argument is also devoid of any substance. To begin with it must be kept in mind that the knowledge of the party does not figure anywhere in this Article. It is either the property is capable of possession or does not admit of physical possession. ( 11 ) IN this case I am further of the opinion that the plaintiffs were fully aware of and had the full knowledge of the execution/registration of the sale deed by their father in favour of Shri Deen Dayal Bhargava, for the following amongst other reasons :- (A) Firstly learned counsel for defendant No. 2 refers to the affidavits of the plaintiffs and defendant 1, alleged to have been filed before the Income Tax Officer, informing him of the execution of the partition deed, and the parties having put in their respective shares. According to the learned counsel these affidavits were prepared by the same counsel and at the same time and were got attested from the same Oath Commissioner on 11-8-1983. In the affidavit of the defendant 1 a mention was also made that property No. 439 was sold by the deponent in his personal capacity to Shri Deen Dayal Bhargava vide sale deed registered on 12-10-1981 as document No. 4191. additional book No. 1. Vol. No. 4034, at pages 21 to 28. It is also mentioned that none of the other erstwhile members of the disrupted HUF had raised any objection to the sale. Prima facie I am not going to disbelieve the contents of the affidavits of the plaintiffs and defendant 1. When these affidavits were got typed, and verified by the same counsel and attested by the same Oath Commissioner and on the same date there is every reason to presume that the plaintiffs were fully aware of the transaction of this sale: (B) Secondly the plaintiffs are residing in the adjoining property to the property in dispute. When these affidavits were got typed, and verified by the same counsel and attested by the same Oath Commissioner and on the same date there is every reason to presume that the plaintiffs were fully aware of the transaction of this sale: (B) Secondly the plaintiffs are residing in the adjoining property to the property in dispute. As and when the tenants, who were in occupation of the premises since 1982, started vacating the portion under their occupation and handed over the vacant possession to defendant 2, the plaintiffs must have come to know of their father having sold the property to a third person. Now they cannot be allowed to turn round and allege that they were not aware of the circumstances under which the tenants started leaving the premises: (C) Thirdly the publication of the notice dt. 25-5-1982 by the I. T. Department, requiring the defendants to show cause why the property should not be acquired under S. 269 of the I. T. Act for under-valuation. There was also the beat of drum outside the premises inviting public objection. This circumstance must have aroused suspicion in the mind of the plaintiffs as to why such a notice is being circulated; Fourthly, in para No. 3. (d) Fourthly, in para No. 5 of the written statement, defendant 1 stated as under :- "defendant 1 had before the sale to defendant 2 in the presence of defendant 2, informed the plaintiffs that defendant 1 was selling the property in question for 3 lac Rupees to defendant 2 and if they wanted to have the property they could have it on payment of Rs. 3 lacs to defendant 1. The plaintiffs refused to purchase the property and said they did not have 3 lacs with them and could not afford to purchase and would not purchase the said property from him as the property was dilapidated and had numerous tenants at old rates from whom it would not be possible to get the property vacated. " ( 12 ) THE averments prima facie appear to be valid and worth reliance. All these facts taken together leave no doubt in my mind that the plaintiffs had full knowledge of the execution and registration of the deed of sale on 12-10-1981 i. e. much prior to the filing of the present suit. " ( 12 ) THE averments prima facie appear to be valid and worth reliance. All these facts taken together leave no doubt in my mind that the plaintiffs had full knowledge of the execution and registration of the deed of sale on 12-10-1981 i. e. much prior to the filing of the present suit. These circumstances put together will negative the contention of the learned counsel that the plaintiffs came to know of the registration of the deed of sale only on 3rd Oct. 1984. Even these facts will attract the first part of Art. 97 of the Limitation Act. Looking from any angle, the suit of the plaintiffs must be held to have been filed after the period of limitation. No explanation is forthcoming as to why the plaintiffs preferred to file the present suit after the period of limitation prescribed under Art. 97. No other point has been urged nor requires consideration. ( 13 ) AS a result of the above discussion the defendants have succeeded in establishing on record that the suit of the plaintiffs is barred by limitation. The plaint is hereby rejected under O. 7 R. 11 of the Civil P. C. No costs. Order accordingly.