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2024 Supreme(P&H) 1366

IN THE HIGH COURT OF PUNJAB AND HARYANA
VINOD S. BHARDWAJ, J.
Kaniyha Singh (Since Deceased) Through LRs. - Appellant
Versus
Binnu Singh Alias Beer Singh & Ors. - Respondents
R.S.A.No. 1846 of 1991
Decided On : 29-11-2024

The right of pre-emption is a weak right and can be defeated by legitimate means, including proving a transaction as a sham intended to defraud the opposing party.

Headnote:(A) Punjab Pre-emption Act, 1913 - Sale Deed - Whether sale deed executed in favor of respondent-plaintiff is genuine or a sham transaction to defeat pre-emption rights of appellant-defendant - Respondent-plaintiff claimed superior right of pre-emption based on a sale deed dated 10.05.1988 - Appellant-defendant contested validity, alleging sham intent to defraud - Court examined sufficiency of consideration and the nature of relationships between parties - Court found transaction to be sham, concluding pre-emption rights of the appellant-defendant were violated. (Paras 25, 24, 23).

(B) Pre-emption rights - Definition and implications - Considered the nature of co-sharer rights and the legitimate defenses against pre-emption claims, emphasizing that such rights can be defeated by lawful means and scrutinizing the genuineness of transactions in light of surrounding circumstances. (Paras 21, 20, 18).

(C) Locus Standi and Maintenance of Suit - Suit should be maintainable by those having superior rights to pre-emption, and issues surrounding validity and existence of earlier declarations of co-sharership were critical in determining the outcome. (Paras 8, 7).

(D) Result : Appeal allowed, earlier judgments set aside.

Table of Content
1. factual background of the case. (Para 1 , 2)
2. arguments against the plaintiff's qualification. (Para 3 , 4 , 5)
3. findings from trial court on pre-emption. (Para 6 , 7 , 9 , 10)
4. consideration of pre-emption rights and validity of transactions. (Para 8 , 11 , 12 , 18)
5. judgment on sham transactions and pre-emption. (Para 19 , 22 , 23 , 24)
6. conclusion and order dismissing the appeal. (Para 25 , 26)

JUDGMENT :

Mr. Vinod S. Bhardwaj, J.

Appellant-defendant has preferred the present Regular Second Appeal against the judgment and decree dated 31.07.1990 passed in Civil Suit No.272 of 1988 by the Court of Sub Judge IInd Class, Jhajjar whereby the suit of the respondent-plaintiff praying for a decree of possession by pre-emption of the suit land was decreed as well as the judgment and decree dated 07.08.1991 passed by the Additional District Judge, Rohtak, in Civil Appeal No.10/13 of 1990, decided on 07.08.1991, whereby the appeal preferred by the appellant-defendant was dismissed.

2. Briefly summarized, the facts of the present case are that one Bhuria son of Shalu Singh had two sons namely Jai Narain Singh and Prithi Singh. Jai Narain Singh was owner of land measuring 04 kanals comprised in Khewat No.351 min Khata No.414 min, Killa No.97/11 (8-0) to the extent of ½ share situated in the revenue estate of village Luhari, Tehsil Jhajjar, District Rohtak, as per Jamabandi for the year 1985-86. The said Jai Narain Singh executed a registered sale deed dated 11.05.1988 with respect to the aforesaid land measuring 04 kanals for a total sale consideration of Rs.20,000/- (Rs.5000/- per kanal). The respondent-plaintiff who claimed to be co-sharer in the joint Khewat, thus instituted a suit for possession by way of pre-emption.

3. The appellant-defendant filed the written statement refuting the claims made by the respondent-plaintiff stating that the respondent-plaintiff was neither a co-sharer in the suit land before execution of the sale deed nor at the time of filing of the suit. It was also stated that Prithi Singh – brother of the appellant-defendant was reflected as a co-sharer in the revenue records and that said Prithi Singh had chosen not to seek pre-emption. It was averred that Prithi Singh got executed a sale deed in favour of his son’s brother-in-law (respondent-plaintiff herein) Binnu Singh for an area measuring 2 kanals on 10.05.1988, i.e. one day before the execution of the sale deed in favour of the appellant-defendant @ Rs.1,000/- per kanal i.e. for a total sale consideration of Rs.2,000/- in collusion with his brother Jai Narain Singh so as to defraud the appellant-defendant. It was averred that the transaction was a sham and Benami transaction intended to prejudice the rights of the appellant-defendant and that no sale consideration had ever been paid. It was further averred that the suit for pre-emption is collusive and has been filed at the behest of Prithi Singh. It was further averred that the respondent-plaintiff was a resident of Hassan Pur, Tehsil Khurja, District Bulland Seher and was working in Delhi. He has no other property or residence in village Lohari other than the 02 kanals of land purchased on 10.05.1988. There was thus no reason or occasion for the respondent-plaintiff to acquire the land holding. It was averred that the sale deed thus ought to be disregarded and should not be read against the appellant-defendant. It was also pleaded that the sale deed executed in favour of the appellant-defendant was for a price of Rs.5,000/- per kanal whereas the sale deed in favour of the respondent-plaintiff executed on 10.05.1988 was for a price of Rs.1,000/- per kanal which is nearly 20% price of the actual price prevailing at the time of transaction. It is highly unlikely that any sane person would be alienating his land at such a meagre sum especially when the land of his brother has been sold @ Rs.5,000/- per kanal. He further contends that since the vendor of the appellant-defendant as well as

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