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2000 DIGILAW 271 (MAD)

P. Srinivasamurthy v. P. Leelavathy and Others

2000-03-07

R.JAYASIMHA BABU, T.MEENA KUMARI

body2000
Judgment :- T. MEENAKUMARI, J. These appeals have been field against the orders of the learned single Judge in C.S. No. 799 of 1996 and Application No. 2458 of 1998. The appellant is the plaintiff in C.S. No. 799 of 1996. The suit was filed seeking a declaration that the plaintiff is entitled to the preferential right to purchase and acquire the interest of the defendants 1 to 6 and also for declaration that the sale deed dated 29-1-1996 executed by the defendants 1 to 6 in favour of the seventh defendant is not valid and not binding upon the plaintiff, and also for a direction to the defendants to execute the sale deed in respect of the suit property in favour of the plaintiff and put the plaintiff in possession of the shares of defendants 1 to 7 in the suit property. 2. The main allegations in the plaint are the suit property consisting of ground and premises bearing door No. 20, Ravanier Street, Park Town Chennai, originally belonged to one Subramania Achari. The said Subramani Achari died intestate on 24-4-1972 leaving behind him, his wife,a son born through his first wife and children born to him and the second wife. The first defendant is the second wife of Subramania Achari and the defendants 3 to 6 and the plaintiff are all children born to said Subramamia Achari and the first defendant. The second defendant is the son born to the first wife. The suit property has devolved upon the plaintiff and the defendants 1 and 6 and each of them is entitled to 1/7 share. While so, the second defendant field the suit G.S. No. 1933 of 1989 on the file of the City Civil Court, Madras, for partition and separate possession of his share, and a preliminary decree was passed in the suit on 9-3-1993 holding that the second defendant is entitled to 1/7 share, and other legal heirs are entitled to the balance of 6/7 share. The second defendant has filed an application for final decree in pursuance of the preliminary decree and he is taking steps to have division of his share effected. The plaintiff is entitled to 1/7 share which has been upheld by the preliminary decree in the partition suit. The second defendant has filed an application for final decree in pursuance of the preliminary decree and he is taking steps to have division of his share effected. The plaintiff is entitled to 1/7 share which has been upheld by the preliminary decree in the partition suit. The defendants 1 to 6 have joined together to deprive the plaintiff of the suit property and sold their shares in the suit property to the seventh defendant, who is an utter stranger to the family by a sale deed dated 29-1-1996. The sale deed is contrary to the provisions of Section 22 of the Hindu Succession Act. The plaintiff has got preferential right to acquire the interest of the defendants 1 to 6 and 7th defendant cannot get title to the property disregarding the rights of the plaintiff. The plaintiff is ready and willing to purchase the share of the defendants 1 to 6 for the consideration to be fixed by this Court. Hence the suit. 3. The second defendant has filed an application No. 2458 of 1998 praying for dismissal of the suit, contending that the plaintiff has got 1/7th share in the suit property , the defendants have got remaining 6/7 share in the suit property which have been declared in O.S. No. 1933 of 1989, that the defendants 1 to 6 found it difficult to reside in the property on account of large number of members of the family and therefore, the defendants 1 to 6 decided to sell the property and requested the plaintiff to join and sell the property in its entirety to the seventh defendant, that the plaintiff was unwilling to vacate the portion in his occupation, that the plaintiff wanted to retain that portion of the property and suggested that the other portion may be sold and proceeds divided among the defendants 1 to 6. The plaintiff was put on notice of the proposed sale of the shares of these defendants before effecting sale in favour of the seventh defendant, that the plaintiff sent a letter dated 4-1-1995 expressing his inability to purchase and retain the entire property and suggested the sale of back portion of the property, that the proposed sale was informed to the plaintiff on 5-9-1994 by registered post, that the proposal was notified to the plaintiff after preliminary decree for partition was granted on 9-3-1993, that the sale of 6/7 shares by the defendants 1 to 6 in favour of the seven defendant was effected as early as 29-1-1996, that the present suit has been filed claiming preferential right under Section 22 of the Hindu Succession Act, after a long delay that the plaintiff has also filed O.S. No. 1053 of 1996 in the City Civil Court, Madras, for injunction, that the plaintiff ought to have exercised right of preferential purchase before the contemplated transfer, that once the sale has been effected the plaintiff is not entitled to challenge the same and the suit itself is not maintainable. 4. The plaintiff opposed the application by filing a counter stating that the suit is maintainable, that there was no suggestion or discussion by the plaintiff with the defendants, that the sale in favour of the seventh defendant was made behind the back of the plaintiff, that he has not stated anything in the letter dated 4-1-1995 and that he has not received any notice from the defendants. 5. The learned single Judge after going through the averments made in the plaint and the application filed by the second defendant, has framed the issue as to the maintainability of the suit. The learned single Judge has come to the conclusion that a reading of Section 22 of the Hindu Succession Act makes it clear that if any person dies intestate leaving behind more than one heir specified in Class I of the Schedule and if one such heir wants to transfer or proposes to transfer his or her interest in the property, the other heirs shall have a preferential right to acquire the interest which is proposed to be transferred. It is not in dispute that the wife and children are specified in class I of the Schedule and they are entitled to the property in equal shares. It is not in dispute that the wife and children are specified in class I of the Schedule and they are entitled to the property in equal shares. According to Section 22 (1) of the Act, if any one heir proposes to sell his or her share, the other shares have got preferential right to purchase the same. The right given to the class I legal heir mentioned in the Schedule to the Hindu Succession Act is a right of pre emption or preferential right to claim sale proposed to be made by other heir or heirs. The right is to be exercised at the time when one of the heir or more than a one heir propose to deal with his/their share. As per Section 22(2) one can file an application and ask the Court to adjudicate upon the consideration to be paid to the sharer by the other sharer who wants to purchase the shares of others by exercising his preferential claim. 6. After discussing the provisions of law, learned single Judge has come to the conclusion that the sale deed has already been effected and the defendants 1 to 6 have executed a sale deed in respect of their 6/7 share in the suit property in favour of the seventh defendant. Learned single Judge has agreed with the contentions of the defendants that the plaintiff failed to exercise his right when they proposed to effect transfer in spite of his knowledge about the proposed transfer, and therefore, the suit for setting aside the sale deed or for declaration of his rights under Section 22 is misconceived. According to the defendant, the plaintiff ought to have exercised his rights under Section 22 prior to the proposed sale deed by the defendants 1 to 6 in favour of the seventh defendant. As the plaintiff has filed to do so, no purpose would be served in the plaintiff filing a suit for declaration of his rights under Section 22(1) of the Hindu Succession Act, when the sale has been completed in favour of the seventh defendant. 7. As the plaintiff has filed to do so, no purpose would be served in the plaintiff filing a suit for declaration of his rights under Section 22(1) of the Hindu Succession Act, when the sale has been completed in favour of the seventh defendant. 7. Before the learned single Judge, as also before us the argument of the defendants was that the plaintiff having failed to exercise his right for preferential purchase granted under Section 22(1) of the Hindu Succession Act, he cannot file a suit for setting aside the alienation already made in favour of the seventh defendant. Learned counsel for the defendants relied upon the following decisions : 1. Valliyail Sreedevi Amma v. Subhadra Devi, 1976 AIR(Ker) 19. 2. Tarak Das Ghosh v. Sunil Kumar Ghosh, 1980 AIR(Cal) 53. 3. Ghewarwala Jain v. Hanuman Prasad , 1981 AIR(MP) 250; 4. Muralidhar Das v. Bansidhar Das, 1986 AIR(Orissa) 119. 8. Learned single Judge agreed with the contention of the defendants that they have sent a notice on 5-9-1994 to the plaintiff wherein it has been clearly stated that the defendants were intending to sell their 6/7 undivided share and asked the plaintiff as to whether he is interested in purchasing their undivided share and the plaintiff has been asked to inform his willingness about the same and the price which he would be agreeable to pay within seven days of the notice. Learned Judge has given a finding that the plaintiff had purposely avoided the notice which was sent by registered post acknowledgement due and it has been returned by the postal authorities. The learned Judge has also discussed about the letter addressed by the plaintiff to the defendants on 4-1-1995 in Telugu which has been translated in English. Learned Judge has come to the conclusion that in the beginning itself the plaintiff has admitted that he has come to know that the defendants including his mother were contemplating to sell the house and after expressing his anguish that the family house where they lived from their childhood may go to a outsider, stated that he was not able to purchase the shares of other co-owners. The relevant sentence of the said letter is as follows : "I am not in a position or having money to give all of you. So I think of an idea. The relevant sentence of the said letter is as follows : "I am not in a position or having money to give all of you. So I think of an idea. That is our house may be divided into two portions lengthwise, then back portion may be sold to the Marvadi temple authorities then I will take front portion. From the sale proceeds of back portion, all of you six partners share that amount. This is my idea." The plaintiff has requested the other shares to drop the idea of selling the house and consider his idea. On going through the said letter, learned Judge was of the view that the plaintiff was not willing to purchase the entire share belonging to the defendant. He has expressed his inability to purchase the share of the other co sharers for want of funds. On the basis of the above points, learned Judge has held that there was no merit in the contention of the plaintiff that he was not given option to purchase the shares of other co-owners and that the defendants have executed the sale deed to a stranger ignoring his right of preferential purchase conferred under Section 22(1) of the Hindu Succession Act. Learned Judge has also observed that that plaintiff not only had the notice but also has expressed his inability to exercise the right of pre-emption or preferential right to purchase and therefore, the suit file by the plaintiff seeking to exercise his right has no substance and the suit has been filed only for the purpose of harassing his co-sharers and also third party purchaser, namely the seventh defendant who has already taken the sale deed. The co-shares of the plaintiff namely the defendants 1 to 6 have referred to sell their share to the plaintiff which he has declined to accept and therefore, he cannot claim preferential right conferred under Section 22(1) of the Hindu Succession Act. The learned Judge has dismissed the suit. 9. The findings of the learned single Judge has been assailed by the plaintiff/appellant on the ground that the suit should not have been dismissed when there is no documentary evidence to show that the appellant had purposely avoided the notice sent by the respondents 1 to 6 regarding their intention to sell 6/7 undivided share in the suit property. 9. The findings of the learned single Judge has been assailed by the plaintiff/appellant on the ground that the suit should not have been dismissed when there is no documentary evidence to show that the appellant had purposely avoided the notice sent by the respondents 1 to 6 regarding their intention to sell 6/7 undivided share in the suit property. Learned counsel for the appellant has argued that the learned Judge ought not to have relied on the letter addressed by the plaintiff on 4-1-1995. He has also argued that the appellant has only suggested the mode of division and it would not bar the appellant from exercising his right under Section12 of the Hindu Succession Act. He has further argued that there is no basis for the finding of the learned Judge that the appellant has expressed his inability to exercise the right of pre emption in accordance with the provisions of the Hindu Succession Act. According to the learned counsel for the appellant the appellant has preferential right to acquire the interests of the other shares as they have not given notice of their intention of selling their shares after the passing of preliminary decree in O.S. No. 1933 of 1989. He has further argued that the learned Judge has committed an error in dismissing the suit as not maintainable and failed to see that the suit is only for a declaration that the appellant is entitled to the preferential right to acquire the interests of the other shares as well as for the consequential declaration that the sale by other shares to the seventh defendant is not valid as no final decree has been passed in the suit O.S. No. 1933 of 1989. Learned counsel has also argued that the learned Judge has ignored the provisions of Section 22(1) of the Hindu Succession Act. He has further argued that the dismissal of the suit as not maintainable is misconceived and the suit is maintainable in all aspects. 10. Learned counsel has also argued that the learned Judge has ignored the provisions of Section 22(1) of the Hindu Succession Act. He has further argued that the dismissal of the suit as not maintainable is misconceived and the suit is maintainable in all aspects. 10. Learned counsel for the respondents has supported the findings of the learned Judge on the ground that as the appellant has expressed his inability to exercise his right to pre-emption as per Section 22 of the Hindu Succession Act and as the transaction has already been materialised into the sale deed , the appellant is not entitled to have a preferential right to acquire the interests of the other shares. Learned counsel has further argued that the respondents have expressed their intention to sell the property and in the letter dated 4-1-1995 as the plaintiff appellant has expressed his inability to exercise the right of pre-emption, learned Judge relying upon the above letter, has rightly come to the conclusion that the suit filed by the appellant is not maintainable. 11. It is necessary to extract Section 22 of the Hindu Succession Act, which reads thus : 22. (1). Where, after the commencement of this Act , an interest in any immovable property of an intestate, or in any business carried on by him or her, whether solely or in conjunction with others, devolves upon two or more heirs specified in class I of the Schedule, and any one of such heir proposes to transfer his or her interest in the property or business, the other heirs shall have a preferential right to acquire the interest proposed to be transferred. (2) The consideration for which any interest in the property of the deceased may be transferred under this Section shall, in the absence of any agreement between the parties, be determined by the Court on application being made to it is in this behalf, and if any person proposing to acquire the interest is not willing to acquire it for the consideration so determined, such person shall be liable to pay all costs of or incidental to the application. (3) If there are two or more heirs specified in Class I of the Schedule proposing to acquire any interest under this Section, that heir who offers the highest consideration for the transfer shall be preferred." A reading of S. 22 makes it clear that if any person dies intestate leaving behind more than one heir specified in class I of the schedule and if one such heir wants to transfer or proposes to transfer his or her interest in the property, the other heirs shall have a preferential right to acquire the interest which is proposed to be transferred. It is not in dispute that the said Subramania Achari died intestate leaving behind his wife, a son born through his first wife and children born to him and the second wife. It is also not in dispute that the second defendant filed O.S. No. 1933 of 1989 on the file of city Civil Court, Madras, for partition and separate possession and a preliminary decree was passed on 9-3-1993 holding that the plaintiff and the defendants 1 to 6 were each entitled to 1/7th share in the suit property. The second defendant filed an application for final decree for partition by actual division of shares in accordance with the adjudication made as per the preliminary decree. While the final decree application was pending, defendants 1 to 6 have executed a sale deed in respect of their 6/7 shares in favour of the seventh defendant who is a stranger to the family by a sale deed dated 29-1-1996. In the letter dated 4-1-1995 addressed to his brother, the appellant herein has stated that he had completed 25 years of service and only 8 years of service is left. He has further stated that he never anticipated the sale of the house. The appellant seems to have proposed that the house can be divided into two portions, the back portion can be sold to the marvadi who is residing back to their house. He has expressed his desire to have the front portion. He has further suggested that the amount received out of the sale of the back portion of the house can be divided among six. He has further expressed that by this way, they will be able to retain half portion of the house. He has expressed his desire to have the front portion. He has further suggested that the amount received out of the sale of the back portion of the house can be divided among six. He has further expressed that by this way, they will be able to retain half portion of the house. He has further suggested that before, selling the house, his suggestion has to be taken into consideration. There is no material to show that the respondents have acted upon the suggestions made by the appellant. In turn, they seem to have addressed a letter to the known address of the appellant about their intention to sell 6/7 undivided share and the plaintiff was asked whether he was interested in purchasing his undivided share and he was further asked to express his willingness. But the letter seems to have not been delivered on the ground that the addressee was not found. However it is also not denied that the appellant has also addressed a letter on 4-1-1995 to the defendants informing his willingness to have the front portion of the house. 12. Learned counsel for the appellant relied on the following decisions : (1). Sachindra Nath Banerjee v. Hari Bhushan Banerjee, (1963) 67 Cal WN 792. (2) Nagammal v. Nanjammal (1970) 1 Mad LJ 358. (3) Valliyil Sreedevi Amma v. Subhadra Devi, 1976 AIR(Kerala) 19. (4) Muralidhar Das v. Bansidhar Das, 1986 AIR(Orissa) 119. In Sachindra Nath's case (1963) 67 Cal WN 792, a learned Judge of the Calcutta High Court has held that the law of pre-emption refers to sale already effected under S. 4 of the Partition Act or under any other law. Before the transfer actually takes place, there is no right to make any application for pre-emption. Section 22 of the Hindu Succession Act provides that there will be a right to pre-empt as soon as there is a proposal for transfer and even before any transfer is effected. The right of pre-emption will not however be extinguished because the proposal has merged into a transaction. If by a proposal there is a right of pre-emption, by transaction it is proved. Any other construction would defeat the purpose of the Act. In the above case, the order of the trial Court was set aside and the matter was sent back to the trial Court to consider the petition on merits. If by a proposal there is a right of pre-emption, by transaction it is proved. Any other construction would defeat the purpose of the Act. In the above case, the order of the trial Court was set aside and the matter was sent back to the trial Court to consider the petition on merits. In Nagammal's case (1970) 1 Mad LJ 358, a learned Judge of this Court has held that the existence of the right is patent and the burden is upon the purchaser to establish that the other co-heirs declared or waived their preferential right when occasion arose. It is not pretended that the purchaser made any reference to the non-alienating co-heirs before his purchase. It follows that the plaintiffs have not lost their preferential right of purchase by the sale. In V. Sreedevi Amma's case 1976 AIR(Kerala) 19, a Division Bench of the Kerala High Court has held that where one of the co-heirs transfers his interest in immovable property in violation of S. 22(1) the remedy of the other co-heirs to enforce their preferential right under Section 22(1) to acquire the transferred interest, is by way of a regular civil suit before a competent civil Court and not by way of an application under S. 22(2). It has been further held that the alienation of his interest by a co-heir in violation of S.22(1) is not void but is voidable at the instance of the other non-alienating co-heirs. The learned Judges of the Division Bench have made it clear that the remedy lies only to file a suit for enforcement of the limited right of purchase conferred by sub-section (1) of S. 22 and in such a suit, the question of invalidity of the sale already effected by the co-sharer will be incidentally investigated and decided. In Muralidhar's case, 1986 AIR(Orissa) 119, while interpreting S. 22(2) of the Hindu Succession Act, the learned Judge has observed that S. 22(2) does not lay down the procedure for the enforcement of the right of pre-emption conferred under S. 22(1). Section 22(1) embraces only the situation where the co-heir proposing to transfer his interest is agreeable to transfer the same in favour of the other co-heir exercising his right of pre-emption but the parties cannot reach on agreement as to the consideration for the transfer. Section 22(1) embraces only the situation where the co-heir proposing to transfer his interest is agreeable to transfer the same in favour of the other co-heir exercising his right of pre-emption but the parties cannot reach on agreement as to the consideration for the transfer. In such case, the consideration can be determined by the Court on an application being made to it in this behalf. Section 22(2) does not apply to a situation where one co-heir has transferred his interest to a stranger or is not agreeable to transfer his interest to the other co-heirs exercising his right of pre-emption. Therefore, an application by the aggrieved co-heir seeking to enforce his right of pre-emption conferred by S. 22(1) is not maintainable under S. 22. His remedy to enforce his right lies in the civil Court of competent jurisdiction. The learned Judge has further held that if the party is not without a remedy, he may move the Court for realisation of his preferential right in cases where the other co-sharers are proposing to transfer of where transfer has already been made in favour of strangers. 13. Learned counsel for the respondents 1 to 6 has relied on the decision of the Madhya Pradesh in Ghewarwala Jain v. Hanuman Prasad, 1981 AIR(MP) 250 to substantiate his contention that once the transfer has been concluded the co-sharer cannot exercise preferential right under S.22(1) and therefore, application by him under S. 22(2) for determining price of property would not be maintainable. 14. A reading of the letter dated 4-1-1995 shows the appellant, who happened to be the co-heir of the property expressing his desire to purchase a portion of the building. No evidence is placed before this Court that the co-heirs before finalising the sale, have taken into consideration the option exercised by the appellant herein. The object of sub-sec. (1) of S. 22 is that in cases where by virtue of intestate succession under the Act any interest in immovable property has devolved upon two or more heirs specified in class I of the Schedule and any one of such heirs proposes to transfer his interest in the property, the other heirs should have a preferential right to acquire the interest which is so proposed to be transferred. It has to be construed that S. 22(1) confers an incidental right on the heirs other than the one who proposed to transfer his interest. It is no doubt true that sub-section (1) of S. 22 confers on such co-heirs a preferential right to acquire the interest which is proposed to be transferred by the other co-heir. When the transfer is in violation of the provisions of S. 22(1) of the Act, it goes without saying that the other co-sharer cannot certainly be without a remedy because every legal right must necessarily carry with it a remedy for enforcing the same. The remedy of the non-alienating co-heirs, in such circumstances, will be to seek the intervention of the Court to enable them to acquire the right which has been transferred away by the other co-heir in violation of sub-sec. (1) of S. 22. As the Section does not provide, for any special procedure for seeking the said remedy, a co-sharer has to seek enforcement of such right under S. 22(1) by way of a regular civil suit before the competent Court. Where the property has been alienated in favour of strangers, there is all the more reason why there should be a full and fair adjudication of the entire matter in a suit tried before a competent civil Court because various factual questions are bound to arise for determination in such a suit wherein the principal issue would be whether the transfer complained of was effected in violation of sub-section (1) of S. 22. The main purpose of such a suit instituted by the co-heir will necessarily be the enforcement of the right conferred by S.22(1) of the Act. The question of invalidity of the transfer effected by the other co-heir in favour of strangers becomes relevant in such an action as an incidental matter which has necessarily to be gone into for the purpose of determining whether the plaintiff is entitled to the relief sought by him against his co-heirs in enforcement of the right conferred by S. 22(1) of the Act. The judgment of the learned single Judge dismissing the suit as not maintainable is set aside. The matter is remanded back to the learned single Judge for considering all the issues arising in the suit on merits. The appeals are allowed. No costs. Consequently, C.M.P. No.4302 of 1999 is closed. Appeal allowed.