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1931 Supreme(SC) 91
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
VISCOUNT DUNEDIN, SIR LANCELOT SANDERSON, AND SIR GEORGE LOWNDES.
HANS NATH - Appellant
Versus
RAGHO PRASAD SINGH - Respondents
On appeal from the High Court at Allahabad.
Decided On : Dec. 14. 1931.
Solicitor for appellants: H. S. L. Polak.
Solicitors for respondent: Hardcastle, Sanders & Co.
In customary pre-emption, the right is determined by the status of the parties on the date of the decree. If a stranger-purchaser becomes a co-sharer before the decree is passed, the right of pre-emption is defeated.
Headnote:(A) Transfer of Property Act, 1882 - Section 52 - Pre-emption Act - Customary right of pre-emption - Object of custom is to prevent strangers from becoming co-sharers in a village - Right of pre-emption is judged on the facts existing on the date when a decree is passed - If a stranger-purchaser becomes a co-sharer before the decree, the right of pre-emption is defeated.
(B) Lis Pendens - Principle that nothing occurring after the suit could affect the lis - Section 52 of the Transfer of Property Act applies to dealings with the property in suit - Does not extend to a change in the status of the parties, such as the purchaser acquiring a separate share in the village.
Facts of the case:
Shares in two villages were sold by a co-sharer to a stranger. Other co-sharers filed suits for pre-emption based on village custom. During the pendency of these suits, the purchaser acquired a small independent fractional share in the villages by gift from another co-sharer. The trial court granted the decree for pre-emption, but the High Court reversed this, holding that the purchaser's acquisition of a share before the decree defeated the claim.
Findings of Court:
The court found that the purchaser had acquired an indefeasible right as a co-sharer before the decree was passed. Since the object of the custom is to prevent strangers from becoming co-sharers, a decree for pre-emption cannot be granted if the purchaser is already a co-sharer at the time of adjudication.
Issues: Whether a right of pre-emption is defeated if the stranger vendee, after the institution of the suit but before the decree, acquires a share in the property subject to pre-emption independent of the share purchased.
Ratio Decidendi: The court ruled that the decisive date for determining the right of pre-emption is the date of the decree. The doctrine of lis pendens under Section 52 of the Transfer of Property Act applies to the property in litigation but does not prevent a change in the status of the parties from affecting the right. If the purchaser becomes a co-sharer before the decree, the purpose of the custom is served, and the pre-emption claim fails.
Result: Consolidated appeals fail and the decrees passed by the High Court are affirmed.
Legal Category Hierarchy
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property law
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pre-emption
- customary pre-emption
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transfer of property act
- lis pendens
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pre-emption
Judgement
Consolidated Appeal (No. 133 of 1929) by special leave from two decrees of the High Court (January 7, 1927), which affirmed a decree of the District Judge of Gorakhpur (October 22, 1923), and reversed two decrees of the Subordinate Judge of Gorakhpur (April 18, 1923).
The appeal raised a question with regard to pre-emption under a recorded custom, the rights of the parties depending upon the law as it stood before the enactment of the Agra Pre-emption Act, 1922.
That question was whether a right of pre-emption is defeated where the stranger vendee after the institution of the suit, but before its hearing, acquires by gift a share in the property subject to the pre-emption independent of the share purchased.
The facts appear from the judgment of the Judicial Committee.
The High Court (Lindsay and Sulaiman JJ.) held, following Baldeo Misir v. Bam Lagan Shukul (1), that it was necessary for the plaintiffs seeking to pre-empt to prove that they had a subsisting right of preference not only when the sale took place or when the suit was brought, but also when the decree was passed. In the present case the purchaser had acquired by a gift an indefeasible right as a co-sharer before the hearing of the suit, and that defeated the right of pre-emption.
1931. Nov. 9. Dube K.C. for the appellants. There are two distinct lines of decisions by the Allahabad High Court, holding that a decree for pre-emption should not be made (1.) if before the hearing the pre-emptor has ceased to be a co-sharer by reason of a partition or otherwise; (2.) if before the institution of the suit the vendee has sold to a co-sharer who has an equal pre-emptive right. [Reference was made to cases cited in the judgment of their Lordships.] The present decision confuses the two lines of authorities. Baldeo Misir v. Bam Lagan Shukul (( 1923) I. L. R. 45 A. 709.), which was followed, was a case of the first kind and does not apply. In Bhagwan Das v. Mohan Lal (( 1903) I. L. R, 25 A. 421) it was emphasized that a purchase by the stranger vendee of a share does not defeat the right unless it was before the suit. In Rohan Singh v. Bhau Lal (( 1909) I. L. R. 31 A. 530,532.) it was stated that the decisions all seemed to show that the institution of the suit was the critical date. Bihari Lal v. Mohan Singh (( 1920) I. L. R. 42 A. 268.) is against the appellant, but it is submitted that it was wrongly decided. Upon the principle of lis pendens nothing occurring after the suit could affect the lis. One aspect of that principle is embodied in s. 52 of the Transfer of Property Act, 1882, but the principle is of wider application Kassim Shaw v. Unnopershad Chatterjee (( 1863) 1 Hyde, 160.); Gulabchand Manickchand v. Dandi .(( 1873) 11 Bom. H. C. 64.) The principle was held to prevent the defeat of a right of pre-emption in Ghasitey v. Gobind Das (( 1908) I. L. R. 30 A. 467.) and Kehar Singh v. Jehangir Singh .(( 1925) I. L. R. 47 A. 625.) The appellant is supported by the majority of the Full Court of the Chief Court of the Punjab in Sanwal Das
v. Gur Parshad (( 1909) P. R. No. 90.), and by the Full Bench of the Lucknow High Court in Rai Gaya Prasad v. S. Faiyaz Husain .(( 1929) I. L. R. 5 Luck . 12.) As the present case arose before the Agra Pre-emption Act, 1922, operated the decision in Ram Saran Das v. Bhagwat Prasad (( 1928) I.
L. R. 51 A. 411.) does not apply.
E. B. Raikes K.C. and Abdul Majid for the respondent. The object of a custom of pre-emption is to prevent strangers from becoming co-sharers in the village Digambar Singh v. Ahmad Said Khan (( 1914) L. R. 42 I. A. 10,18.), affirming Dalganjan Singh v. Kalka Singh (( 1899) I. L. R. 22 A. 1 (F. B.).) ; the custom therefore does not warrant a decree for pre-emption in this case. The authority of the High Court is clearly against the view that any interest vests in the plaintiff upon the suit for pre-emption being brought Janki Prasad v. Ishar Das .(( 1899) I. L. R. 21 A. 374.) The principle of lis penden
