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IN THE HIGH COURT OF ALLAHABAD
Mustaq Ahmad and Desai, JJ.
SAHADEO SINGH - Appellant
Versus
KUBER NATH LAL - Respondents
Second Appeal 921 Of 1947
Decided On : 05/01/1950
PRE-EMPTION - SALE - TRANSACTION - SALE DEED - OWNERSHIP TRANSFER - PRICE - LABOUR AND EXPENSES OF LITIGATION - PRE-EMPTIBLE SALE - LIMITATION - ARTICLE 10, LIMITATION ACT.
Fact of the Case:
Plaintiff sued to pre-empt a sale of 9 gandas out of 23 gandas mortgaged by his father and uncle in 1907. The mortgagees were in possession. In 1939, the plaintiff negotiated with the vendees to file a suit against the mortgagees for recovery of the entire 23 gandas share, keep 9 gandas to themselves and hand over the remaining 14 gandas to the plaintiff and his brothers. The vendees agreed and a sale deed was executed in their favour in respect of 9 gandas. The vendees filed a suit against the mortgagees and obtained a decree for redemption of the mortgage. The plaintiff then filed the present suit for pre-emption of the sale of 9 gandas.
Finding of the Court:
The transaction in question is not a sale, at any rate, in the words of Sulaiman J. a pre-emptible sale.
Issues: Whether the transaction in question is a sale.
Ratio Decidendi: 1. The transaction is a sale as defined in Section 54, T. P. Act, as it is a transfer of ownership in exchange for a price paid or promised or part-paid and part promised. 2. The fact that the consideration had not been paid, nor the fact that the vendors were not in actual possession, could prevent the transaction from operating as a sale. 3. The ownership over the 9 ganda share was transferred immediately on execution of the deed. 4. The labour and expenses of the litigation cannot be said to be the price within the meaning of section 54, T. P. Act. 5. The transaction is not a pre-emptible sale as the liability of the vendees was to file a suit for redemption against the mortgagor at their own expense and fight it out to the bitter end. It is impossible for the pre-emptor now to be placed in the shoes of the vendees and to undertake that liability.
Final Decision: Appeal dismissed.
Certainly. Based on the provided legal document, here are the key points summarized:
A transaction can be considered a sale even if the consideration has not yet been paid and the vendors are not in actual possession (!) .
The transfer of ownership in a sale occurs immediately upon execution of the sale deed, regardless of possession or payment of consideration (!) (!) .
The definition of sale under the relevant property law includes transfers of ownership in exchange for a price that may be promised or partly paid at the time of the transaction (!) .
Consideration for a sale does not necessarily have to be monetary; it can include expenses such as litigation costs or labor involved in legal proceedings, provided these are part of the agreed consideration (!) (!) .
A sale can be valid even if the consideration is not paid immediately or if possession is not transferred at the time of execution, as ownership can transfer independently of possession (!) (!) .
Certain transactions, despite resembling sales, may not qualify as pre-emptible sales if they involve liabilities or obligations that the pre-emptor cannot assume, such as ongoing litigation or expenses that are not ascertainable or are personal in nature (!) .
The right of pre-emption is to step into the shoes of the vendee, including liabilities and rights, which means that if the vendee's obligations are personal or involve ongoing litigation, the transaction may not be pre-emptible (!) .
Limitation periods for pre-emption suits are generally calculated from the date of registration of the sale deed or the date the vendee takes actual possession, whichever is applicable, but not from subsequent events such as deposit of money or decree dates (!) (!) .
For transactions involving property not capable of physical possession, the period of limitation starts from the date of registration of the sale deed, and the suit must be filed within the prescribed time frame; otherwise, it is barred (!) (!) .
Conditions in the sale deed that specify the sale's effectiveness is immediate and not contingent upon the performance of certain obligations by the vendee support the conclusion that ownership transfers immediately upon execution (!) (!) .
The distinction between a sale and a contract to sell is determined by whether ownership passes immediately through a deed of sale, which requires a registered instrument for immovable property, regardless of possession or consideration (!) (!) .
The expenses or labor involved in legal proceedings, even if agreed upon as consideration, do not necessarily qualify as the monetary price for a sale unless explicitly stated and capable of valuation in monetary terms (!) (!) .
The legal interpretation emphasizes that the transfer of ownership is effective upon the execution of the sale deed, and subsequent events such as possession or payment do not alter the moment ownership passes (!) .
The right of pre-emption is limited by the nature of the transaction; if the transaction involves liabilities or obligations that the pre-emptor cannot undertake, the sale is not pre-emptible under the law (!) .
The law prescribes specific limitation periods for pre-emption suits, which are to be calculated from relevant dates such as registration or physical possession, and not from subsequent legal or financial events (!) (!) .
Please let me know if you need further elaboration or assistance regarding this case.
( 1 ) THIS is an appeal by a plaintiff whose suit for pre-emption of an alleged sale has been dismissed by the Courts below. In 1907, Fazal Ali Khan and Jahandar Khan usnfructuarily mortgaged with Bhoja Kuer their 23 ganda share in the village for Rs. 636/ -. Bhoja Kuer entered into possession and received the profits of the mortgaged share, It is said that the mortgage debt was discharged completely from the profits before 1939, but that she would not surrender possession to Asfandyar Khan, Nawab Khan and Rahrnatullah Khan, the sons of Pazal Ali and jahandar Khan who had died, as Asfandyar Khan, etc. thought of filing a suit against Bhoja kuer for recovery of possession of the mortgaged share, but had no money. Consequently he negotiated with Kuber Nath and Sudeehra Kuer the sale of 9 gandas out of the 23 gandas mortgaged. The negotiations were successful, and Kuber Nath and Sudeshra Kuer agreed to file a suit against Bhoja Kuer for recovery of the entire 23 ganda share, keep 9 gandas to themselves and band over the remaining U gandas to Asfandyar Khan, etc and to defray all the expenses of the litigation upto the Judicial! Committee. Accordingly on , 6th April 1939, Asfandyar Khan, etc. executed a deed purporting to be one of sale in favour of Kuber Nath and Sudeshra Kuer in respect of 9 gandas. It was registered the same day. The conditions on which the sale was made are mentioned in the deed and one of them is that Kuber Nath and Sudeshra Kuer (who will hereafter be known as the vendees) were to file a suit within a month to recover possession over the 23 gandas share from Sahdeo Singh, the son and heir of Bhoja Kuer who had died. Accordingly, on 24th April 1939, the vendees instituted a suit for redemption of the usufructuary mortgage under Section 12, Agri. Culturists Relief Act against Shahdeo Singh, impleading asfandyar Khan, etc. (to be known as vendors) as pro forma defendants. The suit was resisted by the mortgagee on the ground that Rs. 17,851/- were still due to him. On 8th December 1942, the parties compromised the matter ; the vendees agreed to pay Rs. 400/- within two months to the mortgagee who in turn agreed to deliver possession over 9 gandas to them. There was one more suit pending between the vendors and the mortgagee and other persons and that also was compromised on the same day. That compromise deals with the remaining 14 gandas share, I do not say anything about it because we are not concerned with it. On 8th February 1943 the vendees deposited Rs. 400/- in Court for payment to the mortgagee. On 8th February 1944, the mortgages himself sued to pre-empt the sale of 6th April 1939. He pleaded that he had a preferential claim to purchase the 9 gandas share, that it had been sold by the vendors to the vendees for Rs. 400/- only, and that he was entitled to purchase the property for Rs. 400/ -. The suit was contested by the vendees on the grounds that the transaction carried out on 6th April 1939 was not a pre-emption sale, and that the suit was barred by time. They admitted that the plaintiff had a preferential right to purchase the property. In reply the plaintiff contended that as the vendors were out of possession and the vendees deposited the sum of Rs. 400/- in Court on 8th February 1943, the sale must be deemed to have been completed on 8th February 1943 and that, computing the period of limitation from that date, his suit was within time. The trial Court held that the transaction of 6th April 1939 was not a sale and that the suit was barred by time. The lower appellate Court accepted the trial Courts finding that the transaction was not a pre-emptible sale, but curiously enough, while discussing the question of limitation, accepted that it was a sale. Taking it to be a sale completed on 6th April 1939, it also held the suit to be barred by time.
( 2 ) THE case is governed by the Agra Preemption Act which gives a right of pre-emption only against sale, as defined in the Transfer of Property
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