Madras High Court
N.Manickam vs Kanagaraj on 29 March, 2012
Author: R.S.Ramanathan
Bench: R.S.Ramanathan
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE: 29.3.2012. CORAM THE HON'BLE MR.JUSTICE R.S.RAMANATHAN C.R.P.(NPD)Nos.4081 and 4082 of 2009 and M.P.Nos.1 and 2 of 2009 N.Manickam Petitioner vs. 1. Kanagaraj 2. P.Siva 3. P.Murugan Respondents Civil Revision Petitions against the order dated 30.9.2009 in I.A.Nos.332 and 442 of 2008 in I.A.No.932 of 2007 in O.S.No.1128 of 1997 on the file of the I Additional Subordinate Judge, Coimbatore. For petitioner : Mr.S.Subbiah For respondents: Mr.P.Saravana Sowmiyan COMMON ORDER
The plaintiff in O.S.No.1128 of 1997 on the file of the I Additional Sub Court, Coimbatore is the revision petitioner.
2. The plaintiff/revision petitioner filed the above suit for partition against his brother the first respondent for dividing the property and to allot half share. The suit was decreed on 11.4.2000. Thereafter, the first respondent herein filed I.A.No.932 of 2007 on the file of the I Additional Sub Court, Coimbatore for passing final decree in terms of the preliminary decree and during the pendency of the said application, the first respondent herein sold his undivided half share to respondents 2 and 3 by a registered sale deed dated 27.5.2008 for valuable consideration and filed I.A.No.333 of 2008 in I.A.No.932 of 2007 to implead the subsequent purchasers as respondents 2 and 3 and that was ordered as prayed for. Thereafter, the revision petitioner filed I.A.No.332 of 2008 under section 5 of the Partition Act seeking permission of the court to exercise the right of pre-emption to purchase the undivided share of the first respondent herein stating that the first respondent had sold his undivided share to respondents 2 and 3 and therefore, he is entitled to exercise the right of pre-emption. The revision petitioner also filed I.A.No.442 of 2008 in I.A.No.932 of 2007 under sections 2 and 3 of the Partition Act seeking permission of the court to purchase the property that was allotted to the first respondent by depositing the value in court as mentioned in the sale deed executed by the first respondent in favour of respondents 2 and 3.
3. The learned I Additional Sub Judge, Coimbatore dismissed both the applications holding that only after appointment of advocate commissioner and after verifying whether the suit property is a residential house or non-residential premises and whether the property can be divided into two halves, the right of preemption can be decided and as the first respondent had already sold his undivided share to respondents 2 and 3, the right of pre-emption claimed by the revision petitioner cannot be granted. Aggrieved by the same, these two revisions are filed.
4. Mr.Subbiah, learned counsel for the revision petitioner submitted that under section 22 of the Hindu Succession Act, when a property is devolved upon two or more heirs specified in class I to schedule and if one of such heirs proposed to transfer his or her interest in the property or properties, the other heirs shall have a preferential right to acquire the rights proposed to be transferred and for exercising the right, it is not necessary that the application must be filed before the sale by other sharers and the application can be filed even after the sale executed by the other sharers in favour of a stranger and in this case, the suit property devolved on the revision petitioner and the first respondent and each of them are entitled to undivided half share in the suit property and as such, the revision petitioner has got a right to purchase the interest of the other co-sharer who has sold the property to a stranger and for that purpose only, the application in I.A.No.332 of 2008 was filed and as per the provisions of sections 2 and 3 of the Partition Act, 1893, one of the co-sharers is entitled to apply for sale and without properly appreciating the provisions of sections 22 and 2 and 3 of the Partition Act, the court below dismissed the application. He also relied upon the judgment in NAGAMMAL v. NANJAMMAL (1970 (1) MLJ 358) and SRINIVASAMURTHY,P v. LEELAVATHY,P (2002 (II) CTC 325).
5. On the other hand, learned counsel for the respondents Mr.P.Saravana Sowmiyan submitted that section 22 of the Hindu Succession Act will not apply to the facts of the case and section 22 of the Hindu Succession Act applies only when a co-sharer proposes to sell his undivided share to a stranger and that right cannot be exercised after the sale was executed by the co-sharers and in this case, admittedly, the first respondent sold his undivided share to respondents 2 and 3 on 27.5.2008 and I.A.No.332 of 2008 was filed only thereafter and therefore, section 22 will not be applicable to the facts of the case. He further submitted that sections 2 and 3 of the Partition Act will also not apply to the facts of the case. Having regard to the specific provisions in that Act and as per sections 2 and 3 of the Partition Act, when a division of the property cannot be reasonably or conveniently made, the property can be sold and any of the sharer is entitled to purchase the property for a price fixed by the court and in this case, it cannot be stated that the property cannot be divided into two shares and the property is capable of division into two portions and each one can be independently enjoyed and therefore, sections 2 and 3 of the Partition Act will not apply to the facts of this case. He further submitted that without filing a separate suit for exercising the right of pre-emption under section 22 of the Hindu Succession Act, the application is not maintainable. He further submitted that the revision petitioner also filed a suit for declaration that the sale executed by the first respondent in favour of respondents 2 and 3 is null and void and for injunction restraining respondents 2 and 3 from encumbering the property and in that suit, he has not prayed for his pre-emption right and therefore, the present application is also not maintainable. He further submitted that without appointing the commissioner and without ascertaining whether the property is capable of division into two shares, the present petitions filed by the revision petitioner are not maintainable and therefore, the court below rightly held that the petitions are not maintainable in the absence of any report of the commissioner stating that the property is incapable of division. He also submitted that the right of pre-emption can be exercised within a period of one year from the date of transfer as per Article 97 of the Limitation Act and therefore, the application is barred by limitation. He also relied upon the judgment reported in ASHUTOSH CHATURVEDI v. PRANO DEVI @ PARAM DEVI & OTHERS (AIR 2008 SC 2171) and V.GOVINDASWAMY v. MANGAMMAL & OTHERS (2010 (5) CTC 70).
6. Heard both sides. It is seen from the description of the suit property in the schedule to the application filed in I.A.No.932 of 2007 by the respondents that the suit property is having 7 door numbers from 50 to 56 situate in Shastri Street, Ram Nagar, Coimbatore Town. It is the specific case of the revision petitioner that the suit property cannot be divided into two and the properties having a width of 20 feet with common passage of 6 feet and therefore, it cannot be divided into two for convenient enjoyment of two sharers. Further, according to the revision petitioner, as a co-sharer, he is entitled to the right of pre-emption as the first respondent has already sold his undivided interest in favour of a stranger. The case of the respondents is that the property can be divided into two half shares and each half share can be enjoyed separately without interfering with the possession and enjoyment of the other half share and therefore, the petitions are not maintainable. Therefore, we will have to see whether the revision petitioner is entitled to the reliefs prayed for.
7. Admittedly, I.A.No.332 of 2008 was filed under section 5 of the Partition Act. Section 5 of the Partition Act will not apply to the facts of this case and it is seen from the judgment of the court below that parties have proceeded on the basis that section 22 of the Hindu Succession Act applies and the right was claimed under section 22 of the Hindu Succession Act and therefore, we will have to see whether the revision petitioner is entitled to exercise the right of pre-emption as per section 22 of the Hindu Succession Act. Section 22 of the Hindu Succession Act reads as follows:-
"Preferential right to acquire property in certain cases-- (1) Where, after the commencement of this Act, an interest in any immovable property of an intestate, or in any business carried on by him or her, whether solely or in conjunction with others, devolves upon two or more heirs specified in class I of the Schedule, and any one of such heirs proposes to transfer his or her interest in the property or business, the other heirs shall have a preferential right to acquire the interest proposed to be transferred.
(2) The consideration for which any interest in the property of the deceased may be transferred under this section shall, in the absence of any agreement between the parties, be determined by the Court on application being made to it in this behalf, and if any person proposing to acquire the interest is not willing to acquire it for the consideration so determined, such person shall be liable to pay all costs of or incident to the application.
(3) If there are two or more heirs specified in class I of the schedule proposing to acquire any interest under this section, that heir who offers the highest consideration for the transfer shall be preferred."
8. A reading of section 22 makes it clear that it applies to both residential and non residential properties. The conditions necessary for invoking section 22 of the Hindu Succession Act are as follows:-
1) An interest in any immovable property of an intestate or in any business devolves upon two or more heirs specified in clause I of the schedule.
2) Any one of such heirs proposes to transfer his or her interest in the property or business.
3) In that case, the other heirs shall have a preferential right to acquire the interest proposed to be transferred.
9. In this case, it is admitted that the property belonged to common ancestor, who died intestate, and it devolved upon the revision petitioner and the first respondent, who are legal heirs as per class I of the schedule and therefore, the first condition is satisfied. The court below dismissed the applications filed by the revision petitioner on the ground that the the party invoking the preferential right must have applied before the sale takes place as it has been stated that when one of such heirs proposed to transfer his interest, the other heirs shall have a preferential right and in this case, the first respondent had already sold his undivided share in favour of respondents 2 and 3 and therefore, the right under section 22 cannot be claimed by the revision petitioner.
10. According to me, the finding of the learned I Additional Sub Judge that after the sale of the undivided share by one co-sharer, the other co-sharer cannot exercise the right of pre-emption is not correct and it is against the provisions of the Act as well as the decisions reported in NAGAMMAL v. NANJAMMAL (1970(1) MLJ 358) and SRINIVASAMURTHY,P. v. LEELAVATHY,P. (2000(II) CTC 325).
11. In the decision reported in 1970(1) MLJ 358, section 22 has been analysed as follows:-
"The right conferred under section 22(1) of the Hindu Succession Act cannot be enforced and a transfer secured if the alienating co-heir only intends to make a transfer. He or she could, at any time, abandon the proposal for transfer. It will be perfectly open to a person who is negotiating for a sale to a stranger, to withdraw from the negotiations and abandon the proposal for sale or his co-heir intervening to enforce his preferential right purely out of feelings of animosity towards the co-heir. Such conduct is not unknown. A proposal to transfer may become manifest only on an irrevocable act of transfer. It is the sale against the right of the co-heirs that would constitute an infringement of the right conferred under section 22(1). To repeat the cause of action is a sale to a third party, without reference to the other co-heirs who might have purchased the property for the proper price, if it had been offered. Shall we say that a firm proposal comes into existence vis-a-vis the other co-heirs, when execution of the deed of transfer in favour of the stranger is taken up, and eo instanti the statutory right of purchase by the other co-heirs attaches itself to the property. Being a statutory incident of property inherited by Class I heirs it could be said that it runs with the land and binds the stranger purchaser. As I read section 22, Parliament must have had in mid the two fold aspect of the right in the pre-emption laws current in the country: (I) the primary or substantive right to have an offer made and (2) the secondary or remedial right of the co-heirs if the property is sold without being first offered to them to take it from the purchaser. In my opinion, Parliament has emphasised upon the primary right of pre-emption and left the remedial right to the common law for the Courts to mould it according to the circumstances."
12. In the above decision, the learned Judge, after referring to the decision in AUDH v. GAJADHAR JAIPURA (AIR 1954 SC 417) and the decision in BISHAN SINGH v. KHAZAN SINGH (AIR 1958 SC 838), wherein the right of pre-emption was discussed by the Honourable Supreme Court, held as follows:-
"The primary or principal right, the right to offer of the thing about to be sold while it is not an interest or right in the property itself, as an inherent right attaches itself to the property. The other rights can follow therefrom as remedial and in enforcement of this primary right, since the preferential right conferred by law has to be respected and enforced by Courts in accordance with the Legislative intent. There are certain fundamental juridical principles which are necessarily pre-supposed by every statute and which determines when properly applied what legal rights and duties have been violated, and what ought to be done, in order to place those whose rights have been violated as near as may be in same situation in which they would have stood if the laws have been observed and the duties carried out."
13. Thereafter, the learned Judge further held that "To avoid a sale in violation of the preferential right of the co-heirs the Court, without doing violence to the language of the sections, can rely upon the principle of either section 38 or preferably of the 1st part of section 40 of the Transfer of Property Act. The principle of section 38 has been applied to cases where a person is authorised only under certain circumstances to dispose of immoveable property. It has been applied to alienation by a Hindu widow and other limited heirs, alienation by the father in derogation of the rights of his son under the Mithakshara Law and alienation by Mahants and Shebaits. It could be said that a co-heir cannot transfer his interest in the property which he inherited along with the other co-heirs, without reference to the preferential right of the co-heirs. The law which provides for inheritance by co-heirs under Class I limits the freedom of disposal of immovable property. A co-heir can sell his interest to a person of is own choice, only if the preferential right of his co-heirs to make the purchase is not availed of by them. The 2nd paragraph of section 40 has generally been invoked as providing substantive law and the foundation for specific relief under section 27(b) of the Specific Relief Act, 1877, where there is a covenant for pre-emption, which does not give any interest in his co-heirs' share in the immovable property or any easement therein. A co-heir who shares land along with another co-heirs gets an advantage or benefit to acquire the latter's interest in common property manifestly for the beneficial enjoyment of his own interest therein, when the latter co-heir seeks to dispose of his interest. A co-heir is thus saddled with a burden and his right seeks to dispose of his interest. A co-heir is thus saddled with a burden and his right of enjoyment as absolute owner free to dispose of his interest to whomsoever he pleases is restrained. Under the first part of section 40 the dominant right of the non-alienating co-heir may be enforced against a transferee for consideration with notice thereof, as the statutory obligation of a co-heir gets annexed to the ownership of the land by reason of his inheritance of the land as co-heir. In the light of the foregoing discussion it follows that the right of a person to transfer his interest in property inherited alongwith with other Class I heirs is subject to the preferential right of his co-heirs to take the transfer, and that any transfer in derogation of that right would be voidable at the instance of the co-heirs who are denied their preferential right."
14. Therefore, as per the above judgment, it has been held that the right of pre-emption can be exercised even after the sale by the co-sharer and the sale is only voidable at the instance of the other co-sharer who has denied the preferential right. In the judgment reported in 2000(II) CTC 325, the same principle was reiterated by the Honourable Division Bench of this court as follows:-
"The object of sub-section (1) of Section 22 is that in case where by virtue of intestate succession under the Act any interest in immovable property has devolved upon two or more heirs specified in Class I of the Schedule and any one of such heirs proposes to transfer his interest in the property, the other heirs should have a preferential right to acquire the interest which is so proposed to be transferred. It has to be construed that Section 22(1) confers an incidental right on the heirs other than the one who proposed to transfer his interest. It is no doubt true that sub-section (1) of Section 22 confers on such co-heirs a preferential right to acquire the interest which is proposed to be transferred by the other co-heir. When the transfer is in violation of the provisions of Section 22(1) of the Act, it goes without saying that the other co-sharer cannot certainly be without a remedy because every legal right must necessarily carry with it a remedy for enforcing the same. The remedy of the non-alienating co-heirs, in such circumstances, will be to seek the intervention of the court to enable them to acquire the right which has been transferred away by the other co-heir in violation of sub-section (1) of Section 22. As the section does not provide for any special procedure for seeking the said remedy, a co-sharer has to seek enforcement of such right under Section 22(1) by way of a regular civil suit before the competent court. Where the property has been alienated in favour of strangers, there is all the more reason why there should be full and fair adjudication of the entire matter in a suit tried before a competent Civil Court because various factual questions are bound to arise for determination in such a suit wherein the principal issue would be whether the transfer complained of was effected in violation of sub-section (1) of section 22. The main purpose of such a suit instituted by the co-heir will necessarily be the enforcement of the rights conferred by section 22(1) of the Act. The question of invalidity of the transfer effected by the other co-heir in favour of strangers becomes relevant in such an action as an incidental matter which has necessarily to be gone into for the purpose of determining whether the plaintiff is entitled to the relief sought by him against his co-heirs in enforcement of the right conferred by Section 22(1) of the Act."
15. Further, in the decision reported in 2010 (5) CTC 70, the learned Judge has held that the right of pre-emption is only by way of filing separate suit and that right can be exercised only when a third party purchaser files the suit for partition and separate possession and if the third party purchaser did not file suit for partition and separate possession, the other sharer cannot exercise the right of pre-emption.
16. The Honourable Supreme Court held in the judgment reported in AIR 2008 SC 2171 that the only remedy available to the co-sharer is to file a suit and that right must be exercised within the Act and as per Article 97 of the Limitation Act. Therefore, it was contended by the learned counsel for the respondents that in the suit for partition, the revision petitioner is not entitled to exercise the right of pre-emption and he has to file a separate suit and though he filed separate suit in O.S.No.1227 of 2008, he has not exercised the right of pre-emption and therefore, he failed to exercise the right of pre-emption within a period of one year from the date of transfer and therefore, he lost his right and the right is also barred by limitation.
17. I am unable to accept the contention of the learned counsel for the respondents. In the judgment reported in 2010 (5) CTC 70, the learned Judge has referred to the Honourable Supreme Court judgment in GAUTAM PAUL v. DEBI RANI PAUL (2000 (8) SCC 330 = 2000 (4) CTC 503 (SC)) and the decision in BABULAL v. HABIBNOOR KHAN (2000(5) SCC 662 = AIR 2000 SC 2684), and held as follows:-
"There is no law which provides that co-sharer must only sell his/her share to another co-sharer. Thus strangers/outsiders can purchase shares even in a dwelling house. Section 44 of the Transfer of Property Act provides that the transferee of a share of a dwelling house, if he/she is not a member of that family, gets no right to joint possession or common enjoyment of the house. Section 44 adequately protects the family members against intrusion by an outsider into the dwelling house. The only manner in which an outsider can get possession is to sue for possession and claim separation of his share. In that case, Section 4 of the Partition Act comes into play. Except for Section 4 of the Partition Act there is no other law which provides a right to a co-sharer to purchase the share sold to an outsider. Thus before the right of pre-emption under Section 4 is exercised, the conditions laid down therein have to be complied with. As seen above, one of the conditions is that the outsider must sue for partition. Section 4 does not provide the co-sharer a right to pre-empt where the stranger/outsider does nothing after purchasing the share. In other words, Section 4 is not giving a right to a co-sharer to pre-empt and purchase the share sold to an outsider anytime he/she wants. Thus even though a liberal interpretation may be given, the interpretation cannot be one which gives a right which the legislatures clearly did not intend to confer. The legislature was aware that a partition Suit would result in a "decree for partition". The legislature only provided for such right when the "transferee sues for partition". The intention of the legislature only provided for such right when the "transferee sues for partition". The intention of the legislature is clear. There had to be initiation of proceedings or the making of a claim to partition by the stranger/outsider. This could be by way of initiating a proceeding for partition or even claiming partition in execution. However, a mere assertion of a claim to a share without demanding separation and possession (by the outsider) is not enough to give to the other co-sharers a right of pre-emption. There is a difference between a mere assertion that he has a share and a claiming for possession of that share. So long as the stranger-purchaser does not seek actual division and possession, either in the suit or in execution proceedings, it cannot be said that he has sued for partition."
18. In the judgment reported in 2000 (5) SCC 662 cited supra, it was held that the application by the members of family to purchase stranger's share under section 4 of the Partition Act is maintainable only if the stranger moves for getting partition and separate possession of his share. Our High Court has also held in the judgment reported in RAMASWAMI v. SUBRAMANIA (AIR 1967 MADRAS 156), that a stranger-transferee though defendant in a suit for partition, can be considered as one who sues for partition if he claims his share in the suit and prays for allotment thereof.
19. As stated supra, the Honourable Supreme Court in the judgment reported in 2000 (8) SCC 330 made it clear that, There is a difference between a mere assertion that he has a share and a claiming for possession of that share. So long as the stranger-purchaser does not seek actual division and possession, either in the suit or in execution proceedings, it cannot be said that he has sued for partition.
20. In this case, admittedly, respondents 2 and 3 were impleaded in I.A.No.932 of 2007 filed by the first respondent for passing final decree and allotment of his half share of property in I.A.No.932 of 2007. Therefore, when the stranger purchaser also joined in the final decree application and prayed for partition of their half share, it can be stated that he prayed for actual division and therefore, the revision petitioner is entitled to exercise his right of pre-emption as per the judgment in 2000 (8) SCC 330. The position would be different if the first respondent alone had applied for passing of final decree and separate possession of his share and in that context, the revision petitioner will not have right to exercise his right of pre-emption. But, in this case, the purchasers viz., respondents 2 and 3 herein also joined the first respondent in the final decree application in I.A.No.932 of 2007 and prayed for division of their half share and therefore, as stated supra by the Honourable Supreme Court, the revision petitioner gets a right to exercise the right of pre-emption in their application and therefore, the application under section 22 of the Hindu Succession Act is maintainable.
21. As stated supra, the revision petitioner did not file the application in I.A.No.332 of 2008 under section 22 of the Hindu Succession Act and filed petition under section 5 of the Partition Act. Nevertheless the parties understood that the petition was filed under section 22 of the Hindu Succession Act and arguments were advanced and the court below also rendered judgment on that basis. Therefore, the filing of the application under section 5 of the Partition Act and not under section 22 of the Hindu Succession Act will not make any difference and the petition filed in I.A.No.332 of 2008 can be considered only as a petition filed under section 22 of the Hindu Succession Act and having regard to the discussion stated above, the revision petitioner is entitled to exercise the right of pre-emption when respondents 2 and 3 purchasers also joined in the final decree application and sought for partition of their half share in the property.
22. The arguments of the learned counsel for the respondent that the right of pre-emption can be exercised within a period of one year from the date of transfer and therefore, the right is lost cannot be accepted. Admittedly, the first respondent sold his undivided share in favour of the respondents 2 and 3 under a registered sale deed dated 27.5.2008 and the revision petitioner filed I.A.No.332 of 2008 in June 2008 seeking permission of the court to exercise the right of pre-emption and therefore, it is well within time. Further, the right conferred under section 22 of the Hindu Succession Act does not depend upon the divisibility of the property into two even assuming that the property is capable of division when a co-sharer is entitled to exercise that right and approached the court for purchase of that share.
23. Further, the right under section 22 can be exercised even after the sale by one of the co-sharers to a stranger and therefore, the findings of the court below that after the sale of undivided share by the co-sharer, the other co-sharer cannot exercise the right is not correct and the right conferred under section 22 is not depending upon the divisibility of the property and even if the property is capable of division, the co-sharer, who has not sold his share, can exercise his right of pre-emption.
24. Under section 22 (2) of the Hindu Succession Act, in the case of such transfer, the consideration shall be determined by the court on an application made before it in that behalf and therefore, the court has to fix the value of the undivided share sold by respondents 2 and 3 and even as per sections 2 and 3 of the Partition Act, the value of the property shall be determined by the court and the revision petitioner is not entitled to insist that he shall pay the consideration received by the first respondent under the sale dated 27.5.2008 in favour of respondents 2 and 3. Hence, the findings of the court below are set aside and the matter is remanded to the court below for the purpose of ascertaining the value of the undivided half share of the property and the revision petitioner is bound to pay the value fixed by the court.
In the result, the civil revision petitions are allowed. No costs. The connected miscellaneous petitions are closed.
29.3.2012.
Index: Yes.
Internet: Yes.
ssk.
To
1. I Additional Subordinate Judge, Coimbatore.
2. The Record Keeper, V.R. Section, High Court, Chennai.
R.S.RAMANATHAN, J.
Ssk.
P.D. ORDER IN C.R.P.(NPD) Nos.4081 & 4082 of 2009 Delivered on 29.3.2012.