Judgment

KAPUR, J. : This is an appeal by special leave against the judgment and decree of the High Court at Nagpur passed in Second Appeal No. 720 of 1945 confirming the decree of the District Judge. In the suit out of which this appeal has arisen the appellant was defendant No. 1 and the respondents were the plaintiff and defendant Nos.2 and 3 and the dispute relates to pre-emption on the ground of co-occupancy which falls under Chapter XIV of the Berar Land Revenue Code 1928, hereinafter called the Code.

2. On April 10, 1943, D. B. Ghaisas and his mother Ramabai entered into two contracts of sale with the appellant, one in regard to Survey Nos. 5, 14 and 16 for a sum of Rs. 10,000/ out of which Rs. 2,000/ was paid as earnest money and the other in regard to Survey No. 15/1 for Rs. 8,500/- out of which Rs. 500 was paid as earnest money. On April 16, 1943 the vendors executed a registered sale deed in regard to Survey Nos. 5, 14 and 16 and the balance of the price was paid before the Registrar. On April 22, 1943, the vendors executed a lease of Survey No. 15/1 for 14 years in favour of Kisanlal and Sitaram who were defendants No. 2 and 3 in the suit and are respondents Nos. 2 and 3 in this appeal. On April 24, 1943, the vendors executed a fresh agreement of sale in respect of the same field which according to the agreement was to be diverted to non-agricultural purposes and thereafter a sale deed was to be executed when it was so diverted. The appellant was to pay the costs of the diversion as well as the premium. In pursuance of this agreement the vendors applied to the Deputy Commissioner, Akola, on August 12, 1943 for diversion under S. 58 of the Code and sanction was accorded on January 22, 1944, subject to payment of premium of Rs. 9, 222/ -and other conditions. The appellant s case is that as agreed the vendors were paid this money for deposit and it was deposited in the Treasury under Challan No. 68 but there is no finding in favour of the appellant although the trial court and the District Judge seem to have proceeded on the premises that this amount was deposited but in the circumstances of this case it is not necessary to go into this matter. On February 1, 1944 the sale deed was executed by the vendors in favour of the appellant and the consideration in the sale deed was Rs. 17, 722/-

3. On September 11, 1943, i. e. before the sale deed was executed the respondent, Sridhar, brought a suit for pre-emption against the appellant on the allegation that he had a co-occupancy in the survey number in dispute - being the owner of Survey Number 15/2 . In the plaint it was alleged that the transaction of contract under the documents of April 10, 1943 and April 24, 1943 constituted a sale and therefore it was subject to respondent Sridhar s prior right of pre-emption. It was also alleged that the price was not fixed in good faith. Theses allegations were denied. Both the trial court and the District Judge held that respondent Sridhar was entitled to pre-empt and determined the fair consideration to be Rs. 3, 306/- The suit was therefore decreed by the trial court and on appeal by the District Judge. The appellant took an appeal to the High Court which also confirmed the decree of the subordinate courts.

4. The High Court has held that the transaction was a sale which was subject to pre-emption and that the failure to executed and register a sale deed was a subterfuge to defeat the right of pre-emption. It also held that the proceedings taken for conversion of agricultural land into non-agricultural land were pendente lite and as the right of pre-emption had already accrued by subsequent acts of the vendors and the vendee it could not be defeated. The High Court further held that as the other of the Sub-Divisional Officer allowing conversion was a conditional one the land could not be said to have been irrevocably diverted to non-agricultural purposes. The decree of the subordinate courts was confirmed and against the judgment the