1963 Supreme(SC) 312

SUPREME COURT OF INDIA
RAGHUBAR DAYAL, P. B. GAJENDRAGADKAR, K. SUBBA RAO, K. N. WANCHOO, J. C. SHAH, JJ.
BHAGWATI PRASAD SAH AND OTHERS - Appellant
Versus
BHAGWATI PRASAD SAH AND ANOTHER - Respondent
Civil Appeal No. 672 of 1962
Decided on : 10-10-1963

The right of pre-emption is annexed to full ownership of property of co-sharers. It is not attached to property held on subordinate tenure, such as leases etc.

Headnote:

PRE-EMPTION - MOHAMEDAN LAW - RIGHT OF PRE-EMPTION - SCOPE - LEASEHOLD INTEREST - SUPER-STRUCTURE - RIGHT OF PRE-EMPTION IN RESPECT OF LEASEHOLD INTEREST AND SUPER-STRUCTURE - DOCTRINE OF RECIPROCITY - FULL OWNERSHIP OF PROPERTY - ENTIRE BARGAIN - MOHAMEDAN LAW OF PRE-EMPTION AS CUSTOM IN BIHAR - RIGHT OF PRE-EMPTION IN RESPECT OF HOUSE STANDING ON LEASEHOLD LAND - WHETHER EXISTS.

Fact of the Case:

Plaintiff-respondent 1 filed a suit for a declaration that he has a right to pre-empt the property purchased by appellants 1 and 2 and for directing them to transfer the said property to him. The defendants contested the suit, inter alia, on the ground that the ceremonies of pre-emption were not performed and that under the Mohamedan law the plaintiff was not entitled to pre-emption, as the land on which the said house and golas stood was "rent-paying" land.

Finding of the Court:

The right of pre-emption is simply a right of substitution, but not of re-purchase i.e., the preemptor takes the entire bargain and steps into the shoes of the original vendee; it is a right of acquire the whole of the property sold and not a share of it; and the right 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.

Issues: 1. Whether the right of pre-emption infringes the fundamental right of a citizen under Art. 19(1)(f) of the Constitution? 2. Whether the first respondent failed to establish his title and, therefore, his suit should have been dismissed on that ground? 3. Whether the ceremonies of pre-emption were performed only on October 11, 1949 whereas the sale deed in favour of the appellants was executed and registered on October 20, 1949 and, as the said performance of the ceremonies was premature, they having been performed before the sale was completed, the right of pre-emption could not be enforced? 4. Whether there is no right of pre-emption in respect of leasehold interest and, therefore, there cannot be a right of pre-emption in respect of a house standing on such land, as Mohamedan law does not recognize a right of pre-emption in mere super-structure.

Ratio Decidendi: 1. The right of pre-emption vis-a-vis co-sharers does not infringe the fundamental right conferred under Art. 19(1)(f) of the Constitution. 2. The right of pre-emption is annexed to full ownership of property of co-sharers. It is not attached to property held on subordinate tenure, such as leases etc. It is an incident of the co-sharer's property operating both as a right and as a burden in different situations. It is a right of substitution taking in the entire bargain. It must take the whole or nothing. It does not matter if the inability to take the whole arises out of a voluntary act or out of a legal limitation inherent in the nature of the property transferred. It is reciprocal in operation, that is, if the situation was reversed and the vendor became the preemptor, he should be in a position to pre-empt the co-sharer's whole bargain. The two doctrines which may, for convenience, be referred to as "entire bargain" and "reciprocity" cannot operate unless both the co-sharers are full owners of their respective properties. Akar or a house standing on a freehold land is subject to the right of pre-emption, but a house on a leasehold land stands on a different footing. As there is no right of pre-emption in respect of a land held on a subordinate tenure, the right of pre-emption cannot be enforced against the house either, as the preemptor cannot be substituted for the entire bargain. The right must fall also on the ground that the super-structure disannexed from the land would be movable property and it is well settled that the right of pre-emption cannot be enforced in respect of movables.

Final Decision: Appeal allowed, decrees of the Subordinate Judge's Court and the High Court are set aside and that of the trial Court is restored. The appellants will have their costs throughout.