RAGHUNATH (D) BY LRS. versus RADHA MOHAN (D) THR. LRS & ORS.

[2020] 14 S.C.R.

RAGHUNATH (D) BY LRS.

RADHA MOHAN (D) THR. LRS & ORS.

(Civil Appeal No. 1442 of 2016)

BOCTOBER 13, 2020

[SANJAY KISHAN KAUL, ANIRUDDHA BOSE ANDKRISHNA MURARI, JJ.]

Rajasthan Pre-Emption Act, 1966 – ss.3, 6, 8 , 9 and 21 –Exercise of right of Pre-emption – Limitation for – Plaintiff’s suitCfor pre-emption over transaction effected on 21.01.1974 – Threesale transactions involving the subject property had earlier takenplace in 1945, 1946 and 1966 – Right in property was predicatedon account of having common portion therein – Trial Courteventually held the suit to be barred by limitation in absence ofDchallenge to sale deed of 1966 – Upheld by first appellate court –High Court inter alia held the suit to be filed within time – On appeal,held: Right of pre-emption is weak right – It is only exercisablefor the first time when the cause of such right arises, in situationwhere the plaintiff-pre-emptor chooses to waive such right after the1966 Act becoming operational – s.9 operates as bar on hisEexercising such right on subsequent transaction relating to thesame immovable property – Impugned order set aside – Order oftrial court dtd. 01.02.1988 and the first appellate court dated30.03.1989 upheld – As the original plaintiff has not challengedthe sale effected on 05.11.1966, the suit is thus barred by limitationF– Limitation Act, 1963 – Article 97 – Pre-emption.

Allowing the appeal, the Court

1.1 The Rajasthan Pre-Emption Act, 1966 was brought intoforce on 1.2.1966. In view of the rights conferred under the Act,a suit was filed by the predecessor-in-interest of respondent No.1Gseeking decree of pre-emption against the predecessor-in-interest of the appellant herein and respondent Nos. 4 to 6 herein,on 10.1.1974, which was numbered as Civil Suit No. 40/1975.The property in question is situated in building bearing AMCNo. XV/290 situated in Kayasth Mohalla, Ajmer and is predicated

on account of having common portion in the said property. Theplaint stated that respondents 5 and 6 herein (original defendants3 and 4) were owners and in possession of the part of the propertywhich was sold to respondent No. 4 herein (the original defendantNo. 2), vide sale deed dated 10.01.1974 for consideration of Rs.4000/-. Respondent No. 4 further sold this property to theappellant herein (original defendant No.1 being the predecessor-in-interest) on 21.01.1974 once again for the same consideration.The other facts stated in the plaint are not required to be goneinto nor pleaded, except that there is an allegation that the twoportions were part and parcel of the same house having mainentrance, lavatory and staircase in common and that no notice,as provided for under Section 8 of the Act, had been served,which mandates notice to pre-emptors (forming part of theprocedure as set out in Chapter III of the Act). The historicalperspective of the right of pre-emption shows that it owes itsoriginination to the advent of the Mohammedan rule, based oncustoms, which came to be accepted in various courts largelylocated in the north of India. The pre-emptor has been held bythe judicial pronouncements to have two rights. Firstly, theinherent or primary right, which is the right to the offer of thingabout to be sold and the secondary or remedial right to follow thething sold. It is secondary right, which is simply right ofsubstitution in place of the original vendee. The pre-emptor isbound to show that he not only has right as good as that of thevendee, but it is superior to that of the vendee; And that too atthe time when the pre-emptor exercises his right. The right ofpre-emption is “very weak right” and is, thus, capable of beingdefeated by all legitimate methods including the claim of superioror equal right. Right to pre-emption is defined in Section 3 of theRajasthan Pre-Emption Act, 1966. Section 6 sets out the right ofpersons to whom the right pre-emption accrues and it wouldsuffice to reproduce sub-section (1) as the other sub-sectionsdeal with different classes of persons having such right. ChapterIII sets out the procedure for the exercise of the right of pre-emption. Section 8 under the said Chapter mandates issuance ofnotice. The limitation for exercise of the aforesaid right isstipulated in Section 21. Section 21 in turn refers to Article 97 of

DEF

Athe First Schedule of the Limitation Act, 1963. The question hasto be, thus, analysed in the context of conjoint reading of Section21 of the said Act and Article 97 of the First Schedule to theLimitation Act, 1963. The stipulation in Section 21 is that theright of pre-emption has to be exercised, in case of sale, withinone year from the date of sale and if the sale is not by registeredBdeed, on the purchaser taking the physical possession of any partof the property sold. Since the period has to be as per Article 97,the wordings of the Article show that it is one year from the datewhen the sale is registered (in case such registration takes placeas is in the present case). It is this expression, which is soughtCto be construed by the respondent No. 1 as well as by the HighCourt to mean that it is recurring right for every sale. The lossof right of pre-emption on transfer has been defined under Section9 of the said Act. reading of the Section shows that the loss isonly occasioned, when, within two months from the date of serviceof the notice, the price is not tendered. However, that is the lossDof the right, vis-à-vis the transaction in question. The moot pointis whether such right of pre-emption is recurring right, i.e.every time the property is sold, the right would rearise, in casethe pre-empting plaintiff himself has chosen not to exercise suchright over the subject immovable property when sold to anotherEpurchaser earlier. [Paras 3, 12, 14, 16 and 17][468-G-H; 469-A-E; 473-D-H; 474-A-H; 476-A-H; 47-A-D]

1.2 It would not be appropriate or permissible to adopt legalreasoning making such weak right, some kind of right inperpetuity arising to plaintiff every time there is subsequentFtransaction or sale once the plaintiff has waived his right or pre-emption over the subject immovable property. The loss of rightmandated under Section 9 of the Act is absolute. plain readingof the said provision does not reveal that such right can re-ariseto the person who waives his right of pre-emption in an earliertransaction. To do so would mean that person, whether notGhaving the means or for any other reason, does not exercise theright of pre-emption and yet he, even after decades, can exercisesuch right. This would create, if one may say, some sort of acloud on title and uncertainty as subsequent purchaser wouldnot know, when he wants to sell the property, whether he canH

complete the transaction or not or whether co-sharer will jumpinto the scene. This is not contemplated in the 1966 Act. This isbound to have an effect on the price offered by purchaser atthat time because he would have an impression of uncertaintyabout the proposed transaction. This Court is in agreement withthe consistent view taken in the judgments earlier of theRajasthan High Court. So far as the case of Kutina Bibi isconcerned, the factual basis of that decision does not fit with thelegal controversy involved in this proceeding. [Paras 18, 19][477-D-H; 478-A-C]

Indira Bai v. Nand Kishore (1990) 4 SCC 668 : [1990]1 Suppl. SCR 349 – referred to.

1.3 The right of pre-emption is only exercisable for the firsttime when the cause of such right arises, in situation wherethe plaintiff-pre-emptor chooses to waive such right after the 1966Act becoming operational. Section 9 of the said Act operates as abar on his exercising such right on subsequent transactionrelating to the same immovable property. The result is theimpugned order is set aside and the order of the trial court dated01.02.1988 and the first appellate court dated 30.03.1989 areupheld. As the original plaintiff has not challenged the sale effectedby him on 5[th] November, 1966, the suit of respondent No. 1(original plaintiff, now represented by his legal representatives)is thus barred by limitation. [Paras 22, 23][479-A-D]

Kutina Bibi and another v. Vaiukuntha Chandra Duttaand others AIR 1961 Assam 1 – distinguished.

Barasat Eye Hospital & Ors. v. Kaustabh Mondal 2019SCC Online SC 1351; Bishan Singh v. Khazan SinghAIR 1958 SC 838:[1959] SCR 878 – referred to.

Gobind Dayal v. Inayatullah (1885) ILR 7 All 775, 809;Prahlad Kumar v. Kishan Chand & Ors. 2009 (3) RLW2441; Mangti Ram v. Onkar Sahai (1994) 1 RLW 55;Ghulam Jilani v. Hassan Khan & Ors. PLR 1905(Vol.VI) 338; Ghanshyam v. Chand Bihari & Ors.(2008) 2 RLW (Rev) 1011; Rukmani Devi (Smt.) v.Prabhu Marayan & Ors. (2007) 4 RLW 2882 –referred to.

Case Law Reference

[1959] SCR 878referred toPara 10[1990] 1 Suppl. SCR 349referred toPara 21CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1442

Bof 2016

From the Judgment and Order dated 29.06.2009 of the High Courtof Judicature for Rajasthan at Jaipur Bench, Jaipur in S.B. Civil SecondAppeal No. 65/1989.

Irshad Ahmad, Ms. Christi Jain, Puneet Jain, Harsh Jain, HarshitCKhanduja, Akshat Maheshwari For Ms. Pratibha Jain, Advs. for theappearing parties.

The Judgment of the Court was delivered by

SANJAY KISHAN KAUL, J.D

1. The singular question this Court had framed for considerationin this appeal was whether the limitation shall commence from the firstsale deed after coming into force of the Rajasthan Pre-Emption Act,1966 or from any other subsequent sale on the basis of Article 97 of theLimitation Act, 1963. This question arises in this proceeding in situationEwhere the original plaintiff sought to enforce such right after three saletransactions had taken place in the past involving the subject immovableproperty in the years 1945, 1946 and 1966. The last transaction waseffected on 5[th] November that year, after the 1966 Act had becomeoperational. The factum of the plaintiff’s entitlement otherwise claimright of pre-emption in terms of Section 6 of the 1966 Act is not inFdispute in this proceeding. In the suit out of which this appeal arises, theplaintiff’s suit for pre-emption over transaction effected on 21st January1974 was resisted on the ground of being barred by limitation.

2. In order to determine the aforesaid question of law framed bythis Court in terms of the order dated 05.01.2016, it is necessary toGdiscuss the nature of the right of pre-emption. In this behalf, we haddiscussed the right of pre-emption in recent judgment in Barasat EyeHospital & Ors. v. Kaustabh Mondal[1]. The said judgment, authoredby one of us (Sanjay Kishan Kaul, J.), in its initial paragraph itself discussesthis aspect and it would suffice to quote the same.

H1 (2019) SCC Online SC 1351

“1. The right of pre-emption holds its origination to the advent ofthe Mohammedan rule, based on customs which came to beaccepted in various courts largely located in the north of India.This law is stated to be largely absent in the south of India onaccount of the fact that it never formed part of Hindu law inrespect of property. However, this law came to be incorporatedin various statutes, both, prior to the Constitution of India (forshort ‘the Constitution’) coming into force, and even post that.[2] Theconstitutional validity of such laws of pre-emption came to bedebated before the Constitution Bench of this Court, in BhauRam,[3]. There are different views expressed by the members ofthe Constitution Bench of five Judges, and also dependent on thevarious State legislations in this regard. Even though there wereviews expressed that this right of pre-emption is opposed to theprinciples of justice, equity and good conscience, it was felt thatthe reasonableness of these statutes has to be appreciated in thecontext of society where there were certain privileged classesholding land and, thus, there may have been utility in allowingpersons to prevent stranger from acquiring property in an areawhich has been populated by particular fraternity or class ofpeople. This aspect was sought to be balanced with theconstitutional scheme, prohibiting discrimination against citizenson the grounds of only religion, race, caste, sex, place of birth orany of them, under Article 15 of the Constitution, and the guaranteesgiven to every citizen to acquire, hold and dispose of property,subject only to the test of reasonable restriction and the interestof general public.”

The judicial approach adopted towards this right of pre-emptionwas thereafter discussed in the said judgment in the following terms:

“10. In order to appreciate the aforesaid provisions relating tothe right of pre-emption, it would be appropriate to refer to anextremely lucid judgment of this Court by Justice K. Subbarao(as he then was), setting forth the contours of the right of pre-emption in Bishan Singh v. Khazan Singh[4], in four JudgeBench judgement. The Bench proceeded to discuss the view of

2 Bhau Ram v. Baij Nath Singh , AIR 1962 SC 1476

3 supra

4 AIR 1958 SC 838

ABC

Adifferent Courts on this right of preemption, as found in thefollowing:

a. Plowden, J. in Dhani Nath v. Budhu,[5]

b. Mahmood, J. in Gobind Dayal v. Inayatullah,[6].

c. Mool Chand v. Ganga Jal,[7].

11. In view of the aforesaid elucidation, it was opined that thepreemptor has two rights: first, the inherent or primary right, i.e.,right for the offer of thing about to be sold; and second, thesecondary or remedial right to follow the thing sold. The secondaryright of preemption is simply right of substitution, in place of anoriginal vendee and the pre-emptor is bound to show not only thathis right is as good as that of that vendee, but that it is superior tothat of the vendee. Such superior right has to subsist at the timewhen the pre-emptor exercises his right. The position is thereaftersummarized in the following terms:

D“11. …..(1) The right of pre-emption is not right to the thingsold but right to the offer of thing about to be sold. Thisright is called the primary or inherent right. (2) The pre-emptorhas secondary right or remedial right to follow the thingsold. (3) It is right of substitution but not of re-purchase i. e.,the pre-emptor takes the entire bargain and steps into the shoesEof the original vendee. (4) It is right to acquire the whole ofthe property sold and not share of the property sold. (5)Preference being the essence of the right, the plaintiff musthave superior right to that of the vendee or the personsubstituted in his place. (6) The right being very weak right,Fit can be defeated by all legitimate methods, such as the vendeeallowing the claimant of superior or equal right beingsubstituted in his place.”

On having set down the contours of the aforesaid right, we turn tothe facts of the present case.

GFacts:

3. The Rajasthan Pre-Emption Act, 1966 (hereinafter referred toas ‘the Act’) was brought into force on 1.2.1966. In view of the rights

5 136 P.R. 18946 (1885) ILR 7 All 775, 809H7 (1930) ILR 11 Lahore (F.B.) 258, 273

conferred under the Act, suit was filed by the predecessor-in-interestof respondent No.1 seeking decree of pre-emption against thepredecessor-in-interest of the appellant herein and respondent Nos. 4 to6 herein, on 10.1.1974, which was numbered as Civil Suit No. 40/1975.The property in question is situated in building bearing AMC No. XV/290 situated in Kayasth Mohalla, Ajmer (‘suit schedule property’) and ispredicated on account of having common portion in the said property.The plaint stated that respondents 5 and 6 herein (original defendants 3and 4) were owners and in possession of the part of the property whichwas sold to respondent No. 4 herein (the original defendant No. 2), videsale deed dated 10.01.1974 for consideration of Rs. 4000/-. respondentNo. 4 further sold this property to the appellant herein (original defendantNo.1 being the predecessor-in-interest) on 21.01.1974 once again forthe same consideration. The other facts stated in the plaint are not requiredto be gone into nor pleaded, except that there is an allegation that thetwo portions were part and parcel of the same house having mainentrance, lavatory and staircase in common and that no notice, asprovided for under Section 8 of the Act, had been served, which mandatesa notice to pre-emptors (forming part of the procedure as set out inChapter III of the Act). The suit was resisted. The sale of the propertyas per the two sale deeds was not disputed. The plea was, however,raised that there were two separate lockable premises and as such noright of pre-emption accrued in favour of the original plaintiff. Onceagain, it is not necessary to go into other defences for adjudication of thepresent matter. It may, however, be noted that the written statementstated that yet another sale agreement was entered into on 25.10.1974and the purchaser had not been made party to the suit.

4. The Trial Court framed as many as eight issues including theplea of bar of limitation. The suit was decreed in terms of the judgmentdated 30.6.1977, inter alia finding that the suit had been filed within theperiod of limitation of one year. An appeal was preferred against thisorder and during the pendency of the appeal an application was filed toamend the written statement inter alia raising the plea that there wereeven earlier sale deeds of 1945, 1946 and 1966 where the respondents 5and 6 herein had purchased the property vide sale deed dated 5.11.1966.The earlier sale deeds not having been challenged, the right of pre-emptioncould not be exercised and was barred by time. This resulted in fouradditional issues being framed arising from the plea of limitation and thematter was remitted to the Trial Court in terms of the judgment dated22.5.1987 of the first appellate Court.

ABC

A5. The Trial Court gave its consideration on the additional issuesand took note of the fact that the earlier two sale deeds were even priorto the coming into force of the said Act. The court, however, noticedthat even prior to the coming into force of the said Act, laws of pre-emption did exist in Ajmer. The sale deed dated 5.11.1966 came intoexistence after the said Act came into force. It was opined by judgmentBdated 1.2.1988 that without challenging that sale deed, the suit would notbe maintainable and would be barred by limitation relying upon thejudgment of the Assam High Court in Kutina Bibi and another vs.Baikuntha Chandra Dutta and others[8].6. The first appellate Court once again considered this judgmentCof the Trial Court in Civil Appeal No.129/1985 on the additional issuesdecided in terms of that judgment. The appellate court, in terms of thejudgment dated 30.03.1989, agreed with the finding of the Trial Court onthe ratio of Kutina Bibi (supra).

7. The matter was thereafter taken upto the Rajasthan High CourtDvide S.B.C.S. Appeal No. 65/1989. The High Court noticed that theonly question before it was on the point of limitation as per the provisionsof Article 97 of the Limitation Act. 1963. The High Court in terms of theimpugned judgment dated 29.06.2009 opined that the one year limitationperiod is to run from the date of registration of the sale deed or the datewhen physical possession of the property was given; and the sale deedEwould be the sale deed in question. The High Court negated the pleathat the earlier sale deeds would have to be assailed and concluded thateach sale of such property gives fresh cause of action. The suit wasfound to have been filed within time and the matter was remitted backon merits to be decided by the first appellate Court. In the SpecialFLeave Petition filed, notice was issued on 9.10.2009 and interim stay ofthe impugned order was directed. Leave was granted on 12.2.2016 andthe question of law was framed on 05.01.2016.

Rival Contentions:

8. The arguments advanced by Mr. Irshad Ahmad, learned counselGfor the appellant is on dual contours. The first argument was based onthe policy behind the right of pre-emption, i.e. that no stranger should beallowed to thrust himself upon the co-sharer in property against theirwill and to prevent apprehended inconvenience to the co-sharer. In thatcontext, it was urged that the admitted position was that the predecessor-

H8 AIR 1961 Assam 1

in-interest of the appellant herein was distant relative of the predecessor-in-interest of respondent No.1 herein and this fact had been admitted bythe original plaintiff as also by the son of Manna Lal (the executor of thesale deed of 1946) in their depositions. The second plea advanced wasthat if plaintiff waived his right of pre-emption by conduct, no suchright is available on subsequent sale of the same property and theplaintiff is estopped from claiming any right of pre-emption of subsequentsale.

9. In support of their contention, learned counsel referred to thefollowing judgments:

(a) Prahlad Kumar vs. Kishan Chand & Ors.[9]

This judgment of the Rajasthan High Court, while rejecting theright of pre-emption, based it on two aspects. The first was factualone that it was not case of sharing common property. The relevantportion is the second aspect where it was held even if the right is presumedto have been established, though not established in that case, the plaintiffwas estopped from claiming his right of pre-emption as he had waivedhis right when the property was sold at an earlier date and pre-emptionwas not claimed then.

(b) Mangti Ram vs. Onkar Sahai[10]

In this case, the right of pre-emption was held to have been givenup on account of an earlier compromise deed to which the plaintiff hadbeen party.

(c) Kutina Bibi & Anr. vs. Baikuntha Chandra Dutta & Ors.[11]

This judgment once again dealt with the plea of pre-emption againsta subsequent sale, where vide an earlier sale deed of 1950, the plaintiff-cosharer’s share had been sold by her son and thus, it was held that nothaving assailed the earlier sale deed, the right of pre-emption could notbe claimed against the subsequent sale.

(d) Ghulam Jilani vs. Hassan Khan & Ors.[12]

There was an earlier sale deed and subsequent sale deed. Atthe stage of the initial sale deed, the cosharer did not object. At the stage

9 2009 (3) RLW 244110 (1994) 1 RLW 5511 Supra12 PLR 1905 (Vol.VI) 338

Aof the second sale deed, the cosharer sought to object. The court debatedthe issue of competing rights of the cosharer and the subsequent buyerin pursuance to the first sale deed. It was opined, while agreeing withthe lower court, that the plaintiff’s suit was barred by time, having beeninstituted more than year after the earlier sale which alone he wasentitled to impugn.B

(e) Ghanshyam vs. Chand Bihari & Ors.[13]

The factual matrix shows there were many cosharers. Two ofthe cosharers transferred their rights to third party. One by sale andone by gift. Third party, in turn, sought to transfer to another party. It isCat that stage, one of the cosharers claimed right of pre-emption. Itwas found on facts that when the said third party sought to transfer hisright, plaintiff never showed willingness to purchase the same, as theywere not having sufficient means. It was opined that the plaintiff’s fathernever tried to assert his right in the matter of purchasing that portionearlier and subsequently also, during his lifetime, he never tried to enforceDhis right of pre-emption. As such, right of pre-emption was said to havebeen waived by conduct.

(f) Rukmani Devi (Smt.) vs. Prabhu Narayan & Ors.[14]

The pre-emption right under Section 6 of the Act was discussedwith an explanation that the right of pre-emption is weak right and thusEif plaintiff pre-emptor waives or gives up his right without raising anyobjection to the sale in favour of the third party, the court should notallow substitution in the sale deed at the instance of such plaintiff pre-emptor, who has already given up his right.

10. On the other hand, Ms. Christi Jain, learned counsel for theFrespondent sought to support the impugned judgment on the plea that thelimitation to enforce right of pre-emption under the Act is governed byArticle 97 of the Limitation Act, 1963 read with Section 21 of theAct.Thus, each sale deed is separate cause of action. On reading ofSection 8 of the said Act, it was contended that the seller is required toinform all persons as to the price he is proposing to sell at and thus theGlanguage of the provision is clear that it applies to all such incidents ofsale. Thus, it was pleaded that it cannot be said that if such right is notexercised, it would allow foreclosure for any subsequent sale, since thereis no provision in the said Act, prohibiting the right of pre-emption if the

13 (2008) 2 RLW (Rev) 1011H14 (2007) 4 RLW 2882

14 (2007) 4 RLW 2882

right is not exercised. It was also contended that the question of waiveris set out in Section 9 of the said Act, which does not provide for aneventuality that the right of pre-emption would not be applicable for asubsequent sale. The last aspect argued was that this right is based onsubstitution in place of the vendee on payment of the price and it doesnot challenge the sale but seeks substitution of the plaintiff in place ofthe vendee. There was, thus, no need to challenge the earlier sales andnot challenging the earlier sales would not amount to waiver.

11. reference was made to the following judgments:

(i) Bishan Singh & Ors. vs. Khazan Singh & Anr.[15]

The reference to the aforesaid judgment has been made in thecontext of the observations of Mahmood, J. in Gobind Dayal case(supra) referred to above that it is in relation to the right of substitution.

(ii) Barasat Eye Hospital & Ors. vs. Kaustabh Mondal[16]

This judgment has been relied upon again on the same aforesaidprinciple of right of substitution.

The view we adopt:

12. We have given our thoughtful consideration to the aforesaidissue and in order to determine the same, we had, at the inception itself,set out the judgment in Barasat Eye Hospital case (supra). We have,thus, referred to the earlier judicial view in para 10 of the judgmentextracted aforesaid. The historical perspective of the right of pre-emptionshows that it owes its originination to the advent of the Mohammedanrule, based on customs, which came to be accepted in various courtslargely located in the north of India. The pre-emptor has been held bythe judicial pronouncements to have two rights. Firstly, the inherent orprimary right, which is the right to the offer of thing about to be soldand the secondary or remedial right to follow the thing sold. It is asecondary right, which is simply right of substitution in place of theoriginal vendee. The pre-emptor is bound to show that he not only has aright as good as that of the vendee, but it is superior to that of the vendee;And that too at the time when the pre-emptor exercises his right. In ourview, it is relevant to note this observation and we once again emphasisethat the right is “very weak right” and is, thus, capable of being defeatedby all legitimate methods including the claim of superior or equal right.

15 AIR 1958 SC 838

16 supra

A13. We have to examine the legal question before us in terms ofthe aforesaid principles. We may notice the observation in the Ghanshyamcase (supra) which deals with the scenario where at the first instancethe right was not exercised apparently on account of lack of financialmeans and that was held to be no ground to permit exercise of that rightat the second stage. The consistent view taken by the Rajasthan HighBCourt, as reflected in not only Ghanshyam case (supra) but also inRukmani Devi (supra) and Prahlad Kumar (supra) has been that theright of substitution is capable of being invoked only at the first instanceand does not continue to substitution is capable of being invoked only atthe first instance and does not continue to permeate for an indefiniteCperiod of time for each sale transaction. In the case of Ghanshyam(supra), finding of the High Court was that the plaintiffs claiming pre-emption had waived their rights. In the case of Rukmani Devi (supra),where the plaintiff raised the plea of pre-emption on second saletransaction, evidence was led by the defendant that the same plaintiffhad earlier refused to purchase the subject property and had on theDother hand participated in the sale process. In the case of Prahlad Kumar(supra), it was found that the plaintiff himself had waived his right ofpre-emption in respect of an earlier sale transaction involving the sameproperty. Thus, to this extent, the view taken in the impugned orderseems to charter new course. The view of the Assam High Court inEKutina Bibi (supra) was consistently followed by the Rajasthan HighCourt.

14. In order to now appreciate the controversy, as there appearsto be no other view of this Court on this aspect, we would first turn tothe said Act itself. Right to pre-emption is defined in Section 3 of theFAct as under:

“Section 3: “Right of pre-emption” defined

The “right of pre-emption” is the right accruing under section 4 ofthis Act, upon transfer of any immovable property, to acquiresuch property and to be substituted as the transferee thereof inGplace of and in preference to the original transferee and “pre-emptor” means person having right of pre-emption.”

Section 6 sets out the right of persons to whom the right pre-emption accrues and it would suffice to reproduce sub-section (1) as theother sub-sections deal with different classes of persons having suchHright.

“Section 6: Persons to whom right of pre-emption accrues

(1) Subject to the other provisions of this Act, the right of pre-emption in respect of any immovable property transferred shallaccrue to, and vest in, the following classes of persons, namely:—

(i) co-sharers of or partners in the property transferred,

(ii) owners of other immovable property with stair-case or anentrance or other right or amenity common to such other propertyand the property transferred, and

(iii) owners of property servient or dominant to the propertytransferred.”

Chapter III sets out the procedure for the exercise of the right ofpre-emption. Section 8 under the said Chapter mandates issuance ofnotice.

“Section 8: Notice to pre-emptors

(1) When any person proposes to sell, or to foreclose the right toredeem, any immovable property, in respect of which any personshave right of pre-emption, he shall give notice to all such personaas to the price at which he is proposing so to sell or as to theamount due in respect of the mortgage proposed to be foreclosed,as the case may be.

(2) Such notice shall be given through the civil court, within thelocal limits of whose jurisdiction the property concerned is situatedshall clearly describe such property, shall state the name and otherparticulars of the purchaser or the mortgagee and shall be servedin the manner prescribed for service of summons in civil suits.”

The limitation for exercise of the aforesaid right is stipulated inSection 21, which reads as under:

“Section 21: Special provision for limitation

(1) Subject to the provisions contained in the proviso to sub-section(1) of section 5, the period of limitation, in any case not providedfor by article 97 of the First Schedule to the Limitation Act, 1963(Central Act 36 of 1963), for suit to enforce the right of pre-emption under this Act shall, notwithstanding anything containedin article 113 of the said schedule of the said Act, be one yearfrom the date on which,—

A(a) in the case of sale made without registered sale-deed, thepurchaser takes under the sale physical possession of any part ofthe property sold, and

(b) in the case of foreclosure, the final decree for foreclosure ispassed.

B(2) The period of limitation for suit to enforce right of pre-emption which has accrued before the commencement of thisAct shall, notwithstanding anything contained in the said LimitationAct, in no case exceed one year from the commencement of thisAct.”

C15. In view of the fact that since Section 21 in turn refers toArticle 97 of the First Schedule of the Limitation Act, 1963 it would beappropriate to set forth the same as under.

16. The question has to be, thus, analysed in the context of aconjoint reading of Section 21 of the said Act and Article 97 of the FirstSchedule to the Limitation Act, 1963. The stipulation in Section 21 isthat the right of pre-emption has to be exercised, in case of sale, withinone year from the date of sale and if the sale is not by registered deed,Fon the purchaser taking the physical possession of any part of the propertysold. Since the period has to be as per Article 97, the wordings of theArticle show that it is one year from the date when the sale is registered(in case such registration takes place as is in the present case). It is thisexpression, which is sought to be construed by the respondent No. 1 asGwell as by the High Court to mean that it is recurring right for everysale. The loss of right of pre-emption on transfer has been definedunder Section 9 of the said Act as under:

“Section 9: Loss of right of pre-emption on transfer

Any person having right of pre-emption in respect of anyHimmovable property proposed to be sold shall lose such, right unless

within two months from the date of the service of such notice, heor his agent pays or tenders the price specified in the notice givenunder section 8 to the person so proposing to sell:

Provided that the right of pre-emption shall not be so lost if theimmovable property in question is actually sold for an amountsmaller than that mentioned in the notice or to person notmentioned in the notice as purchaser.”

17. reading of the Section shows that the loss is only occasioned,when, within two months from the date of service of the notice, theprice is not tendered. However, that is the loss of the right, vis-à-vis thetransaction in question. The moot point is whether such right of pre-emption is recurring right, i.e. every time the property is sold, the rightwould rearise, in case the pre-empting plaintiff himself has chosen notto exercise such right over the subject immovable property when sold toanother purchaser earlier.

18. In our view, it would not be appropriate or permissible to adoptlegal reasoning making such weak right, some kind of right inperpetuity arising to plaintiff every time there is subsequent transactionor sale once the plaintiff has waived his right or pre-emption over thesubject immovable property. The loss of right mandated under Section 9of the Act is absolute. plain reading of the said provision does notreveal that such right can re-arise to the person who waives his right ofpre-emption in an earlier transaction. To do so would mean that person,whether not having the means or for any other reason, does not exercisethe right of pre-emption and yet he, even after decades, can exercisesuch right. This would create, if one may say, some sort of cloud ona title and uncertainty as subsequent purchaser would not know, whenhe wants to sell the property, whether he can complete the transactionor not or whether co-sharer will jump into the scene. This is notcontemplated in the 1966 Act. This is bound to have an effect on theprice offered by purchaser at that time because he would have animpression of uncertainty about the proposed transaction.

19. We are in agreement with the consistent view taken in thejudgments earlier of the Rajasthan High Court. So far as the case ofKutina Bibi (supra) is concerned, the factual basis of that decision doesnot fit with the legal controversy involved in this proceeding. In thatcase, by previous transaction the entire land had been sold. It was held

Ain that perspective, that the plaintiff’s right as co-sharer had becomedisputed in absence of challenge to the previous transaction. We are ofopinion that such right is available once - whether to take it or leave itto person having right of pre-emption. If such person finds it is notworth once, it is not an open right available for all times to come to thatperson. The aforesaid being the position, this would itself be anBimpediment in exercise of the right of pre-emption in subsequenttransaction. This is so since, we find the right of waiver under section 9of the said Act is relatable to the transaction and also the person. Theseprovisions may not impede the right of pre-emption in that particulartransaction by particular pre-emptor and the factum of not havingCexercised such right to an earlier transaction would amount to thesurrender of the right of substitution to such intended pre-emptor.

20. The judgments referred to by the respondent of Bishan Singh(supra) and Barasat Eye Hospital (supra) are only for the propositionthat the right of pre-emption is right of substitution – no doubt existsDover this proposition. The question is whether this right of substitutioncan be exercised recurringly or only once. Our answer to the query is‘only once’.

21. We may also notice another judgment of this Court in IndiraBai vs. Nand Kishore[17]. Once again in relation to the said Act (itEappears that there is frequent exercise of this right in Rajasthan apartfrom West Bengal & Bihar!) The question which was framed for decisionin the case was:

“Is estoppel good defence to ‘archaic’ right of pre-emption whichis ‘weak right’ and can be defeated by any ‘legitimate’ method?”

In the aforesaid context, in para 5, it has been observed that theAct does not debar the pre-emptor from giving up his right. Rather incase of its non-exercise within two months, may be for the financialreasons, the right stands extinguished. “It does not pass on to anyone”.It was further observed, “No social disturbance is caused. It settles inGpurchaser. Giving up such right, expressly or impliedly cannot thereforebe said to involve any interest of community or public welfare so as tobe in mischief of public policy.” These observations, once again, in ourview, are based on the right being weak.

Conclusion:

22. We suppose that the aforesaid answers the dilemma, i.e.whether the right of pre-emption can be enforced for an indefinite numberof transactions or it is exercisable only the first time. We opine that it isonly exercisable for the first time when the cause of such right arises,in situation where the plaintiff-pre-emptor chooses to waive such rightafter the 1966 Act becoming operational. Section 9 of the said Actoperates as bar on his exercising such right on subsequent transactionrelating to the same immovable property. We also wonder what reallyremains of this right of pre-emption after so many years in the facts ofthis case when the purchaser has been enjoying it for more than fourdecades!

23. The result is the impugned order is set aside and the order ofthe trial court dated 01.02.1988 and the first appellate court dated30.03.1989 are upheld. As the original plaintiff has not challenged thesale effected by him on 5[th] November, 1966, the suit of respondent No.1 (original plaintiff, now represented by his legal representatives) is thusbarred by limitation. This puts an end to the legal battle which began 45years ago!

24. The appeal, is accordingly, allowed leaving the parties to beartheir own costs.

Divya Pandey

Appeal allowed.