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SUPREME COURT OF INDIA
7th March 1962.
P.B. GAJENDRAGADKAR, A.K.SARKAR, K.N. WANCHOO, K.C. DAS GUPTA AND N. RAJAGOPALA AYYANGAR, JJ.
Civil Appeal No. 270 of 1955.
Bhau Ram, Appellant
Versus
Baij Nath Singh and others, Respondent;
Advocate General for State of Rajasthan, Intervener.
With
Civil Appeal No. 430 of 1958
Sukhdeo Narayan Patil & another, Appellants
Versus
Moti Ram and another, Respondents.
and
Civil Appeal No. 595 of 1960.
Kesar Devi, Appellant
Versus
Nanak Singh, Respondent.
Civil Appeal No. 270 of 1955 with Civil Appeal No. 430 of 1958 and Civil Appeal No. 595 of 1960.
Advocates appeared
Mr. L. K. Jha, Senior Advocate (M/s. A. D. Mathur and R. Patnaik, Advocates, with him), for Appellant; Mr. D. N. Mukherjee Advocate, for Respondent No. 1; M/s. S. K. Kapur and P. D. Menon, Advocates, for Intervener.
Civil Appeal No, 430 of 58
Mr. A. V. Vishwanatha Sastri, Senior Advocate(Mr.A.G. Ratnaparkhi, Advocate, with him), for Appellants; M/s. S. A. Sohoni And Ganpat Rai, Advocates, for Respondents.
Civil Appeal No. 595 of 60
R. S. Narula, Advocate for Appellant; M/s, S. K. Kapoor and Ganpat Rai, Advocates, for Respondent.
The Supreme Court of India held that the right of pre-emption based on vicinage (proximity) is an unreasonable restriction on the right to acquire, hold, and dispose of property guaranteed under Article 19(1)(f) of the Constitution of India. The Court found that the advantages of pre-emption, such as preventing strangers from acquiring property in a particular area and consolidating agricultural holdings, were outweighed by the disadvantages, such as the restriction on the vendor's right to sell the property at a fair market price and the purchaser's right to acquire the property. The Court also held that the right of pre-emption based on co-ownership or common ownership of property is a reasonable restriction on the right to acquire, hold, and dispose of property, as it promotes the efficient management and use of the property.
Fact of the Case:
Three appeals were filed challenging the constitutionality of certain provisions of the pre-emption laws prevailing in the States of Madhya Pradesh (Rewa-State area), Delhi, and Maharashtra (Berar-area). The pre-emption laws granted a right of pre-emption to certain classes of persons, including co-sharers and owners of adjoining property, to purchase property that was being sold. The appellants argued that these laws violated Article 19(1)(f) of the Constitution, which guarantees the right to acquire, hold, and dispose of property.
Finding of the Court:
The Supreme Court held that the right of pre-emption based on vicinage is an unreasonable restriction on the right to acquire, hold, and dispose of property guaranteed under Article 19(1)(f) of the Constitution. The Court found that the advantages of pre-emption were outweighed by the disadvantages. The Court also held that the right of pre-emption based on co-ownership or common ownership of property is a reasonable restriction on the right to acquire, hold, and dispose of property, as it promotes the efficient management and use of the property.
Issues: 1. Whether the right of pre-emption based on vicinage is an unreasonable restriction on the right to acquire, hold, and dispose of property guaranteed under Article 19(1)(f) of the Constitution? 2. Whether the right of pre-emption based on co-ownership or common ownership of property is a reasonable restriction on the right to acquire, hold, and dispose of property?
Ratio Decidendi: 1. The right of pre-emption based on vicinage is an unreasonable restriction on the right to acquire, hold, and dispose of property guaranteed under Article 19(1)(f) of the Constitution because the advantages of pre-emption are outweighed by the disadvantages. 2. The right of pre-emption based on co-ownership or common ownership of property is a reasonable restriction on the right to acquire, hold, and dispose of property because it promotes the efficient management and use of the property.
Final Decision: The Supreme Court allowed the appeal challenging the constitutionality of the right of pre-emption based on vicinage and dismissed the appeals challenging the constitutionality of the right of pre-emption based on co-ownership or common ownership of property.
Judgment
WANCHOO, J, : (For himself and Gajendragadkar and N. Rajagopala Ayyangar JJ.) These three appeals which have been heard together raise the constitutionality of certain provisions of the pre-emption laws prevailing in the States of Madhya Pradesh (Rewa-State aeara), Delhi and Maharashtra (Berar-area). Three suits for pre-emptioin were brought by pre-emptors which were decreed, and the present appeals are by purchasers. Though the appeals were heard together as some of the points involved were common, it would be convenient to deal with each appeal separately because the law involved in each case is different.
2. We shall begin with C. A. 270 of 1955. This is concerned with the Rewa State Pre-emption Act, 1946 (hereinafter called the Rewa Act), and particularly with S. 10 thereof, which is in these terms :-
Classes of pre-emptions :-Persons of the following classes shall have a right of pre-emption :
(1) Any person who is a co-sharer or partner in the property sold and foreclosed
(2) Any person who owns any immovable property adjoining the property sold or foreclosed or in case of transfer of tenancy rights, the land which is the subject of such rights.
Provided that among the above mentioned classes the first in order will exclude the second and among persons of the same class, the nearer in relationship to the person whose property is sold or foreclosed will exclude the more remote.
" We are in the present case concerned with the second clause by which a person owing immovable property adjoining the property sold or foreclosed is entitled to pre-empt subject to the order provided in the provision. In this case, both the purchaser and the pre-emptors hold property adjoining the property sold, but as the pre-emptors were related to the vendor, while the purchaser was not, the suit was decreed in favour of the pre-emptors in view of the proviso.
3. The question therefore that arises is whether a right of pre-emption by vicinage offends Art, 19(1)(f). There has been divergence of opinion between various High Courts on this question. The High Courts of Rajasthan, Madhya Bharat an Hyderabad and the Judicial Commissioner, Vindhya Pradesh have taken the view that such a right of pre-emption offends Art, 19(1)(f) while the High Court of Punjab has, held otherwise. Before, however, we deal with the main points urged in this case we may notice the argument based on the decision of this Court in Audh Behari Singh v. Gajadhar Jaipuria (1955) 1 SCR 70 : where it was held that the law of pre-emption creates a right which attaches to the property and on that footing only it can be enforced against the purchaser . The argument is that since the right of pre-emption attaches to the property sold it is an incident of property, and therefore cannot be held to be a restriction on the right to acquire, hold and dispose of property. On the other hand it is urged that if the law of pre-emption creates a right which is an incident of property, even so it would be a restriction created by law on the fundamental right guaranteed under Art 19(1)(f) of the Constitution. We are of opinion that even if the law of pre-emption creates a right which attaches to property it would be creating a restriction so far as the acquiring, holding or disposing of property is concerned which was not there before the law of pre-emption was enacted. Therefore, even if the liability attaches to the property, it will still amount to a restriction on the right, guaranteed by Art, 19 (1) (f)when it attaches to the property by the law of pre-emption.
4. Article 19(1)(f) gives a fundamental right to a citizen to acquire, hold and dispose of property and cl. (5) of that Article permits reasonab1e restrictions to be imposed by law on this right in the interests of the general public. There can be no doubt that a law of pre-emption does impose restriction on the fundamental right guaranteed under Art, 19 (1)(f) and the question is whether the restriction imposed in the Rewa case is
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