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1958 Supreme(P&H) 166

PUNJAB & HARYANA HIGH COURT
D.Falshaw and I.D.Dua JJ.
Rati Ram
Versus
Mam Chand
Second Appeal No. 13 of 1953,
Decided On : NOVEMBER 14, 1958

The burden of proof lies on the plaintiff in a pre-emption suit to establish affirmatively that the transaction in question is a sale and that he has a preferential right over the vendees. In case of doubt, the plaintiff must fail.

Headnote:

PRE-EMPTION - SALE - GIFT - BURDEN OF PROOF - TRANSACTION DESCRIBED AS GIFT - CIRCUMSTANCES TO DETERMINE WHETHER IT IS A SALE - RIGHT OF PRE-EMPTION - STRICT CONSTRUCTION - TRANSACTION CAPABLE OF TWO INTERPRETATIONS - INTERPRETATION IN FAVOUR OF OWNER - PRE-EMPTION SUIT - PLAINTIFF TO PROVE TRANSACTION AS SALE - MERE FAILURE OF DEFENDANT TO ESTABLISH TRANSACTION AS GENUINE GIFT NOT SUFFICIENT.

Fact of the Case:

Plaintiffs filed a suit for pre-emption on the ground that the transaction in suit, though described as a gift, was a sale and that they had a preferential right to pre-empt the said sale. The defendants contested the suit and controverted the plea relating to the transaction being a sale. They, on the contrary, pleaded that the transaction was an out and out gift in favour of the defendants donees on account of natural affection for them as they were relatives.

Finding of the Court:

The courts below erred in holding the transaction in dispute to be a sale based on circumstantial evidence without any direct evidence of price paid or promised. The burden lies heavily on the plaintiff to establish affirmatively that the transaction which he wants to pre-empt is a sale and nothing else. Merely because the defendants have not succeeded in affirmatively establishing the transaction in question to be a bona fide and genuine gift, it does not necessarily lead to the conclusion that it is a sale.

Issues: 1. Whether the transaction in suit was a sale or a gift? 2. Whether the plaintiffs had a preferential right of pre-emption?

Ratio Decidendi: 1. Sale is defined in S. 54 of the Transfer of Property Act as a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. In the present case, there is no evidence showing that ownership of the land in dispute was transferred to the defendants-appellants in exchange for a price paid or promised or part-paid and part-promised. 2. Right of pre-emption is a piratical right and it imposes restriction on the right of the owner to transfer his property to whomsoever he likes. This right operates as a clog on the right of the owner to alienate his property to a person of his own choice; it has therefore to be strictly construed. The plaintiff in a preemption suit, who is an aggressor, must in my opinion, prove affirmatively that the transaction which he wants to pre-empt is a sale and that be has a preferential right over the vendees; in case there exists a doubt about the transaction in question being a sale the plaintiff must fail.

Final Decision: Appeal allowed. Judgment and decree of the courts below set aside. Plaintiffs' suit dismissed with costs throughout.

Judgment

I.D.Dua, J.

1. This is a defendants appeal against the judgment and decree of the Additional District Judge, Rohtak, granting to the plaintiffs a decree for possession of the land in suit on the ground that the transaction in suit though described as a gift was a sale and that the plaintiffs had a preferential right to pre-empt the said sale. The plaintiffs alleged that the land mentioned in the plaint belonged to Suraj Bhan defendant No. 1 who transferred 5/6th share of the same measuring 101 bi-ghas and 9 biswas with shamilat rights to defendants Nos. 2 to 6 for a sum of Rs. 8,000/- on the 19th of December, 1946, besides the mortgage charge on this land. The mutation was accordingly sanctioned on, the 26th of December, 1918. This mutation, the plaintiffs pleaded, though described as a gift, was in fact a sale. The plaintiffs who claim to be the collaterals of defendant No. 1 and also Biswedars filed a suit for pre-emption on the ground of having a preferential right of purchase than defendants Nos. 2 to 6. A part of the land in dispute was already under a mortgage with a charge of Rs. 12,000/-. Therefore the plaintiffs sued for possession by pre-emption on payment of Rs. 8,000/- only.

2. The defendants contested the suit and controverted the plea relating to the transaction being a sale. They, on the contrary, pleaded that the transaction was an out and out gift in favour of the defendants donees on account of natural affection for them as they were relatives. The preferential right of pre-emption claimed by the plaintiffs was also denied and the defendants also asserted that they were Biswedars in the village. It was in the end asserted that the market value of the land in dispute was Rs. 75,000/-. On the pleadings of the parties the following issues were framed : --

1. Whether the suit land was sold by defendant No. 1 in favour of defendants Nos. 2 to 6?

2. What was the sale price paid or fixed in good faith?

3. What is the market value?

4. If issue No. 1 be held in favour of the plaintiffs, have plaintiffs preferential pre-emption right as against defendants Nos. 2 to 6?

5. Relief.

While dealing with issue No. 1 the trial Court considered the statements of plaintiffs witnesses Nos. 1 to 4 not worthy of any reliance. The evidence of these witnesses was sought by the plain tiffs to be brought on the record as direct evidence of the transaction in dispute being a sale. Having disbelieved this direct evidence the trial Court, however, proceeded; to consider some circumstantial evidence and came to the conclusion that the transaction in dispute was a sale. The trial Court considered the following circumstances for the purposes of arriving at the above conclusion :-

-

(i) Suraj Bhan defendant was 21 years old.

(ii) The area of land owned by him at the time of alienation measured 121 bighas and 15 biswas.

(iii) The land in dispute is subject to a charge of Rs. 12,000//.

(iv). The explanation given by the defendant in support of his motive for the gift in dispute did not appeal to the trial Court.

The trial Court observed after considering the above circumstances that a person who could not clear off the encumbrance of Rs. 12,000/- could not possibly be in such a financial position as to afford to alienate 101 bighas and 9 biswas to defendants Nos. 2 to 6 by way of gift simply on sentimental grounds. On this basis the trial Court came to the conclusion that this transaction must be held to be a sale.

3. On appeal the learned District Judge also on almost identical grounds dismissed the appeal. The Courts below have determined the market value of the property at Rs. 37,370/-; out of this the mortgage charge to the extent of Rs. 12,000/-has been deducted and the plaintiffs have been ordered to deposit a sum of Rs. 25,370/- representing the sale price of the land in dispute.

4. On second appeal on behalf of the vendees Mr. D. K. Mahajan has submitted that there is absolutely no evidence on the record to suggest that the tran



















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