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1996 Supreme(SC) 1085

1996(5) Supreme 756
SUPREME COURT OF INDIA
B.P. Jeevan Reddy & Suhas C. Sen, JJ.
Krishna Dass Agarwal -Appellant
versus
Kanhaiyalal -Respondent
Civil Appeal No. 9383 of 1996
Decided on 19-7-1996
Counsel for the Parties :
For the Appellant : Satish Chandra, Sr. Advocate, A.P. Dhamija and Sushil Kumar Jain, Advocates.
For the Respondent : K. Parasaran, Sr. Advocate, Vivek Gambhir and S.K. Gambhir, Advocates.

Headnote:PRE-EMPTION-Gwalior Pre-emption Act-Section 23-Suit seeking to enforce right of pre-emption-Decreed-Appeal-Allowed-Act repealed during the pendency of appeal-Second Appeal dismissed on ground that right of pre-emption must subsist on date of appellate decree/second appellate decree-Since Act was repealed, High Court held, right was not subsisting on date of appellate decree-High Court has taken one possible view on a local law which has been repealed-Not a case to interfere.

       Held : It is possible to construe the words "at the time of the decree" as referring to the decree in favour of the plaintiff against which the appeal is pending; it is equally possible of being construed as referring to the final decree, i.e., the appellate (first appellate or the second appellate or for that matter any other appellate) decree. Having regard to the fact that the right of pre-emption is a weak right and is generally looked upon with distaste and because the High Court has taken a particular view of the matter on the interpretation of a local enactment (which is no longer in force) we are not inclined to take a different view. Our disinclination also arises from the fact that the said Pre-emption Act was repealed as far back as 1968. (Para 6)

       We are not inclined to take a different view even if one is possible having regard the fact that High Court has taken one possible view on a local law which has been repealed as far back as 1968. Indeed, it was not even a law made by Madhya Pradesh Legislature but a hang-over from the erstwhile princely state of Gwalior. (Para 8)

       

JUDGMENT

B.P. Jeevan Reddy, J.-Leave granted. Heard the counsel for the parties.

2. This appeal is preferred against the judgment of the learned Single Judge of the Madhya Pradesh High Court dismissing the second appeal preferred by the appellant-plaintiff herein.

3. On December 5, 1960, the respondent, Kanhaiyalal, purchased the suit-house from Ram Chander and others under a sale deed, which was registered on December 10, 1960, for a consideration of Rupees eight thousand. On December 5, 1961, the appellant-plaintiff instituted a suit seeking to enforce his right of pre-emption on two grounds, viz., (1) an agreement said to have been executed by Nath Mal, father of Ram Chander agreeing to give the plaintiff the right of first purchase in the event of sale of the said house and (2) the Gwalior Pre-emption Act which created a right of pre-emption in favour of dominant-heritage holder vis-a-vis servient-heritage holder. The plaintiff also relied upon an alleged customary right of pre-emption. The defendant disputed the plaintiff s claim inter alia on the ground that the Gwalior Pre-emption Act is unconstitutional and is unenforceable with effect from the date of the commencement of the Constitution of India. The Trial Judge decreed the suit on July 31, 1967. The respondent, Kanhaiyalal, preferred an appeal which was allowed by the learned District Judge. The grounds on which the learned District Judge allowed the appeal are : (i) inasmuch as the Gwalior Pre-emption Act has been repealed pending the said appeal (i.e., on June 28, 1968), the right of pre-emption claimed by the plaintiff can no longer be enforced. The plaintiff cannot also fall back upon customary right of pre-emption inasmuch as the said right came to an end with the enactment of the Gwalior Pre-emption Act in Samvat 1992. The said custom does not and cannot revive on the repeal of the said enactment.  (ii) The alleged agreement of pre-emption offended the rule of perpetuity and because the respondent, Kanhaiyalal, was a bonafide purchaser of value without notice of the said agreement, the agreement cannot be enforced against him. The learned District Judge, however, declined to record any finding on the plaintiff s assertion that he is a dominant-heritage holder. The High Court dismissed the second appeal agreeing with the learned District Judge on the effect of repeal of the Gwalior Act pending the appeal. It relied mainly on the language employed in Section 23 of the Gwalior Pre-emption Act for arriving at the said conclusion. The High Court also took the view that Section 10 of the Madhya Pradesh General Clauses Act does not come to the rescue of the plaintiff. The correctness of the view taken by the High Court is challenged in this appeal.

4. In Bishan Singh v. Khazan Singh1, Subba Rao, J., speaking for a three Judge Bench, observed that "the right (of pre-emption) being a very weak right, it can be defeated by all legitimate methods, such as the vendee allowing the claimant of a superior or equal right being substituted in his place" (See Para 11)". Apart from being a weak right, it is a claim which is generally looked upon by courts with certain amount of distaste. That is because it interferes with the freedom of the owner to sell his property to the person of his choice.

5. The Gwalior Pre-emption Act, which provided for pre-emption on several grounds, also provided as follows in Section 23 :

"23. Effect of loss of right of pre-emptor prior to decree.-

No decree for pre-emption shall be passed in favour of any person unless he has a subsisting right of pre-emption at the time of the decree but where a decree for pre-emption has been passed in favour of a plaintiff, whether by a court of first instance or of appeal, the right of such plaintiff shall not be affected by any such transfer or loss of his interest accruing after the date of such decree."

The Act was repealed, as stated above, by the Madhya Pradesh Agra-Kraya-Vidhi Nirsan Adhiniyam, 1968, during the pe







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