HIGH COURT OF CALCUTTA
P. N. MUKHERJEE, SEN GUPTA
HEIRS OF MIHILAL KOLLEY - Appellant
Versus
SITAL CHANDRA KOLLEY - Respondent
A. F. A. D. 246 Of 1947
Decided On : JUNE 29, 1954
PRE-EMPTION - AGREEMENT FOR RECONVEYANCE - ENFORCEABILITY AGAINST PRE-EMPTOR - SECTION 26F (7), BENGAL TENANCY ACT - SECTIONS 18 (A) AND 27 (B), SPECIFIC RELIEF ACT - SECTIONS 40 AND 54, TRANSFER OF PROPERTY ACT - SECTION 91, TRUSTS ACT.
Fact of the Case:
Plaintiffs filed a suit for specific performance of a contract of reconveyance. The trial court dismissed the suit, but the appellate court decreed it. The defendants appealed to the High Court.
Finding of the Court:
The High Court held that the agreement for reconveyance was genuine and that it was simultaneous with the sale and made in pursuance of the arrangement for sale and resale, and that the appellants had notice of the same before the relevant pre-emption proceedings, and, on that footing, the appellants' second contention, namely, the question of the rights and obligations of the parties under the said agreement (Ex. 2) vis-a-vis the pre-emption proceedings will have to be determined.
Issues: 1. Whether the agreement for reconveyance was genuine? 2. Whether the agreement for reconveyance could in law affect the appellants' title to the property, obtained under the order of pre-emption? 3. Whether the appellants were in the position of bona fide transferees for value without notice in relation to the disputed property, acquired by them in the pre-emption proceedings?
Ratio Decidendi: 1. The question of whether the agreement for reconveyance was genuine or not is a pure question of fact. The High Court found that the agreement was genuine and that finding must stand. 2. An agreement for resale or repurchase constitutes an 'incumbrance' and, if so, is it an incumbrance "created after the date of the transfer"? 3. The simultaneous agreement for re-sale -no matter that, strictly speaking, it is prior to the actual sale - may well be enforced against a subsequent transferee of the property except a bona fide transferee for value without notice. 4. The obligation under the agreement for re-sale is, as I have shown above, enforceable against all subsequent transferees - voluntary or involuntary, statutory or otherwise - except (bona fide) transferees for consideration (value) without notice. 5. It is thus enforceable against a pre-emptor with notice of the agreement for resale and the pre-emptor's right under Section 26f, Bengal Tenancy Act, will be subject to the obligation under the said agreement and must be viewed in that light. 6. The agreement for re-sale undoubtedly gives rise to an obligation, annexed to the ownership, which, whether as such obligation or otherwise, is enforceable against all subsequent transferees with notice.
Final Decision: The High Court dismissed the appeal and upheld the decision of the learned Subordinate Judge decreeing the plaintiffs' suit for specific performance.
( 1 ) THIS appeal raises an interesting question.
( 2 ) ON 4/7/1945 respondents 1-4 filed a suit against the appellants and one Mohanta Patra for specific performance of a contract of reconveyance. That suit was dismissed by the trial court but, on appeal, it was decreed by the learned Subordinate Judge, First Court, Howrah. From this appellate decision the present second appeal has been preferred by defendants 2 and 3.
( 3 ) BRIEFLY stated, the plaintiffs-respondents' case was as follows: the disputed property which comprises an undivided share of an occupancy rayati holding originally belonged to them (respondents 1-4 ). On 15-3-45, in pursuance of an arrangement between the parties for sale and resale, they (the plaintiffs) sold the suit property to Mohanta Patra (who was defendant 1 in the trial court) by the Kobala (Ex. 1) and simultaneously obtained from him the agreement for reconveyance (Ex. 2) which is the foundation of the present suit. The appellants before us (who were defendants 2 and 3 in the trial Court), alleging to be cosharers of the disputed occupancy rayati holding, applied for pre-emption under Section 26f, Bengal Tenancy Act, against the transferee defendant 1 alone and succeeded in getting an order in their favour. The respondents duly tendered to the appellants the consideration, payable under the agreement for reconveyance (Ex, 2), but the latter refused to accept the same and reconvey the suit property.
( 4 ) THE appellants' defence was that the alleged agreement for reconveyance (Ex. 2) was not genuine and that, in any event, it was not enforceable against them and could not affect or prevail over their right" in respect of the disputed property. They claimed to have become absolutely entitled to the suit property as a result of the preemption proceedings and they also set up inter alia the defence of bona fide transferees for value without notice.
( 5 ) THE learned Munsif came to the conclusion (tat the agreement (Ex. 2) was not genuine and, in that view of the matter, he dismissed, the respondents' suit, consideration of all other questions being rendered unnecessary by reason of his above finding. On appeal, the learned Subordinate Judge reversed the learned Munsifs decision, holding inter aha that the agreement (Ex. 2) was genuine and that the appellants' pre-emption must be subject to, the said agreement. The learned Judge further found that the appellants had actual, in any event, constructive notice of the said agreement before the pre-emption proceedings and were thus not bona fide transferees without notice. The respondents' suit was, accordingly, decreed by the lower appellate Court and the unsuccessful defendants 2 and 3 have now come up in second appeal to this Court.
( 6 ) THREE questions were raised in support of this appeal. In the first place, the learned Subordinate Judge's finding that the agreement (Ex. 2) was genuine was challenged. It was next contended that, even assuming that the said finding. was correct, that agreement could not in law affect the appellants' title to the property, obtained under the order of pre-emption, and the said title could not be held to be subject to the said agreement (Ex. 2 ). Thirdly, it was urged that, in any event, the appellants were in the position of bona fide transferees for value without notice in relation to the disputed property, acquired by them in the pre-emption proceedings, and the learned Subordinate Judge's finding to the contrary was wrong. It was, accordingly, claimed that, on this ground at least the agreement (Ex. 2) should be held not to be binding or enforceable against them (the appellants) and the plaintiffs' suit should be dismissed,
( 7 ) OF the above three contentions the first and the third may be shortly disposed of.
( 8 ) THE question whether the agreement (Ex. 2) was genuine or not is a pure question of fact. True, the judgment of the learned Subordinate Judge is, on this point, a judgment of
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