Punjab-Haryana High Court
(O&M) Abhey Singh vs Prem Singh And Others on 24 June, 2024
Author: Anil Kshetarpal
Bench: Anil Kshetarpal
Neutral Citation No:=2024:PHHC:020000
RSA No.515 of 1994 (O&M) -1-
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
RSA No.515 of 1994 (O&M)
Reserved on:19.04.2024
Date of Order:24.06.2024
Abhey Singh (since deceased) through LRs
.Appellant
Versus
Prem Singh and others ..Respondents
CORAM: HON'BLE MR. JUSTICE ANIL KSHETARPAL Present: Mr. Amit Jain, Sr. Advocate with Mr. Varun Parkash, Advocate for the appellant.
Mr. Vijay Kumar Jindal, Sr. Advocate with Mr. Akshay Jindal, Advocate Mr. Pankaj Gautam, Advocate Mr. Samar P.S.Ahluwalia, Advocate for the respondents.
ANIL KSHETARPAL, J
1. BRIEF FACTS OF THE CASE 1.1 In this regular second appeal, defendant no.3 assails the correctness of the concurrent findings of fact arrived at by the courts below while decreeing the plaintiff's suit for possession by way of preemption. 1.2 In order to comprehend the issues involved in the present case, relevant facts, in brief, are required to be noticed. 1.3 Sh. Mangtu Ram was a co-owner to the extent of 1/4th share (18 kanals and 4 marlas) in the joint land measuring 72 kanals and 02 marlas. He sold the aforesaid land to defendant no.2 (Sh. Parmanand) for Rs.60,000/- vide registered sale deed dated 08.12.1988. Defendant no.2 (Sh. Parmanand) subsequently sold the same property in favour of defendant 1 of 12 ::: Downloaded on - 20-07-2024 02:00:12 ::: Neutral Citation No:=2024:PHHC:020000 RSA No.515 of 1994 (O&M) -2- nos.3 and 4, namely, Abhey Singh and Virender Singh, for Rs.75,000/- vide registered sale deed 23.02.1989. On 03.03.1989, Prem Singh, the plaintiff (respondent no.1 herein) filed a suit for possession by way of pre-emption in order to pre-empt the sale deed dated 08.12.1988. However, he amended the plaint in order to implead defendant no.3 and 4, the subsequent purchasers and pre-empt the sale deed dated 23.02.1989. The plaintiff being a co-sharer in the joint khewat claims the rights of pre-emption. Defendant no. 1 did not contest the case, whereas the defendant no.2 filed a written statement asserting that as the sale deed was executed in the presence of the plaintiff, consequently he is estopped. Defendant no.4 filed separate written statement contesting the case. When the plaintiff appeared in evidence, he admitted that he was present when the sale deed dated 08.12.1988, was executed. He stated that in his presence an amount of Rs.40,000/- was paid and received in the office of the Registrar and he was present in the Registrar's office. DW1-Abhey Singh (defendant no.3) testified that the plaintiff Prem Singh was instrumental in getting the deal of the sale of the property finalized and he was present at the time when the sale deed was executed. The learned counsel representing the plaintiff failed to challenge the correctness of the aforesaid statement of fact while cross examining Abhey Singh.
1.4 Both the courts below decreed the suit. On 09.03.1994, the regular second appeal was admitted for regular hearing and now it has come up for final disposal.
2. ARGUMENTS PUT FORTH BY THE LEARNED COUNSEL REPRESENTING THE PARTIES:-
2 of 12 ::: Downloaded on - 20-07-2024 02:00:13 ::: Neutral Citation No:=2024:PHHC:020000 RSA No.515 of 1994 (O&M) -3- 2.1 Heard the learned counsel representing the parties at length and with their able assistance perused the paper book and their written arguments along with the requisitioned record.
2.2 A written note of his submissions by the appellant's counsel reads as under:-
"1. The appellant took a specific plea in the written statement that plaintiff had knowledge of the execution of the sale deed as he was present at the time of the execution of the sale deed. However the plaintiff failed to controvert the said plea by filing any replication.
PW-1 Prem Singh in his cross examination has admitted his presence at the tehsil at the time of execution of sale deed and admitted the payment of sale consideration in his presence. The very fact that time Prem Singh did not assert his right to pre-empt would amount to abandonment of the right to pre-emption.
His silence at the time of execution of sale deed and his presence at place of execution would impliedly amount to waiving of his right to pre-empt. Supreme Court in Jagad Bandhu Chaterjee Vs Nilima Rani 1969(3)SCC445 held that acquiescence in sale by any positive act amounts to relinquishment of pre- emptive right and amounts to waiver. No consideration or agreement as such is necessary to constitute waiver.
The preemptor had full knowledge regarding sale to a third party by Mangtu Ram and thus there was no need to serve notice upon the pre-emptor. This view is supported by Indira Bai Vs Nand Kishore AIR 1991 SC 1055 where it has been laid down that failure to serve notice does not render
3 of 12 ::: Downloaded on - 20-07-2024 02:00:13 ::: Neutral Citation No:=2024:PHHC:020000 RSA No.515 of 1994 (O&M) -4- sale by vendor in favour of vendee ultravires when the right of pre-emption is lost by estoppel and acquiescence. Section 115 of Evidence Act reads as under: "When one person has, by his declaration, act or omission, intentionally caused or permitted another person to believe a thing to be true and to act upon such belief, neither he nor his representative shall be allowed, in any suit or proceeding between himself and such person or his representative, to deny the truth of that thing."
The right of pre-emption is not a right to the thing sold but a right to the offer of a thing about to be sold, since it is proved that the preemptor had participated in the transaction and waived his right of pre-emption, he cannot be allowed to claim that he was not issued any notice under section 19 of the Act.
Law of Pre-emption has been characterised as feudal, archaic, outmoded and a piratical right which can be defeated by all legal means. (Bachan Singh through LRs Vs Chuhar Singh @ Ajmer Singh 2022 (3) RCR (Civil) 584) Since the pre-emptor intentionally remained silent at time of execution of sale deed, he would be deemed to have waived off his right of pre-emption."
2.3 Per contra, the learned counsel representing the respondent while drawing the attention of the court to Section 19 and 20 of the Punjab Preemption Act, 1913 (hereinafter referred to as 'the 1913 Act') submits that a notice specifying the price at which the property is proposed to be sold is a sine-qua-non for debarring the plaintiff for claiming superior right of preemption. While elaborating, he submits that once a particular procedure has been prescribed in the 1913 Act, the same is required to be followed in 4 of 12 ::: Downloaded on - 20-07-2024 02:00:13 ::: Neutral Citation No:=2024:PHHC:020000 RSA No.515 of 1994 (O&M) -5- letter and spirit before the plaintiff is estopped from filing the suit.
3. DISCUSSION BY THIS COURT:-
3.1 This court has considered the submissions of the learned counsel representing the parties.
3.2 Section 19 and 20 of the 1913 Act are extracted as under:-
"Section 19. Notice to pre-emptors.
- When any person proposes to sell any agricultural land or village immovable property or urban immovable property or to foreclose the right to redeem any village immovable property or urban immovable property in respect of which any persons have a right of pre-emption, he may give notice to all such persons of the price at which he is willing to sell such land or property or of the amount due in respect of the mortgage as the case may be.Such notice shall be given through any Court within the local limits of whose jurisdiction such land or property or any part thereof is situate, and shall be deemed sufficiently given if it be stuck up on the chaupal or other public place of the village, town or place in which the land or property is situate.
Section 20. Notice by pre-emptor to vendor.
- The right of pre-emption of any person shall be extinguished unless such person shall within the period of three months from the date on which the notice under Section 19 is duly given or within such further period, not exceeding one year from such date, as the Court may allow, present to the Court a notice for service on the vendor or mortgagee of his intention to enforce his right of pre-emption. Such notice shall state whether the pre- emptor accepts the price or amount due on the footing of 5 of 12 ::: Downloaded on - 20-07-2024 02:00:13 ::: Neutral Citation No:=2024:PHHC:020000 RSA No.515 of 1994 (O&M) -6- the mortgage as correct or not and if not, what sum he is willing to pay.When the Court is satisfied that the said notice has been duly served on the vendor or mortgagee, the proceedings shall be filed."
3.3 On the other hand, the appellant's counsel has relied upon paras 3, 4 and 5 of the judgment passed by the Supreme Court in Indira Bai vs. Nand Kishore, 1990 (4) SCC 668 which, read as under:-
3. Estoppel is a rule of equity flowing out of fairness striking on behaviour deficient in good faith. It operates as a check on spurious conduct by preventing the inducer from taking advantage and assailing forfeiture already accomplished. It is invoked and applied to aid the law in administration of justice. But for it great many injustice may have been perpetrated. Present case is a glaring example of it. True no notice was given by the seller-but the trial court and appellate court concurred that the pre-
emptor not only came to know of the sale immediately but he assisted the purchaser-appellant in raising construction which went on for five months. Having thus persuaded, rather misled, the purchaser by his own conduct that he acquiesced in his ownership he somersaulted to grab the property with con- structions by staking his own claim and attempting to unset- tle the legal effect of his own conduct by taking recourse to law. To curb and control such unwarranted conduct the courts have extended the broad and paramount considerations of equity, to transactions and assurances, express or im- plied to avoid injustice.
4. Legal approach of the High Court, thus, that no estoppel could arise unless notice under Section 8 of the Rajasthan Pre-emption Act (In brevity 'the Act') was given by the seller and pre-emptor should have had 6 of 12 ::: Downloaded on - 20-07-2024 02:00:13 ::: Neutral Citation No:=2024:PHHC:020000 RSA No.515 of 1994 (O&M) -7- occasion to pay or tender price ignores the fallacy that Estoppel need not be specifically provided as it can always be used as a weapon of defence. In the Privy Council decision, referred earlier, the court was concerned with Oudh Laws Act (18 of 1876) which too had an identical provision for giving notice by seller. No notice was given but since pre-emptor knew that the property was for sale and he had even obtained details of lots he was precluded from basing his claim on pre- emption.
5. Exception, to this universal rule or its non- availability, is not due to absence of any provision in the Act excluding its operation but welfare of society or social and general well-being. Protection was, consequently, sought not on the rationale adopted by the High Court that in absence of notice under Section 8 of the Act estoppel could not arise but under cover of public policy. Reliance was placed on Shalimar Tar Products v. H.C. Sharma, AIR 1988 SC 145, a decision on waiver, and Equitable Life Assurance Society of the United States v. Reed, 14 Appeal Cases 587, which laid down that there could be no estoppel against statute. Equity, usually, follows law. Therefore that which is statutori- ly illegal and void cannot be enforced by resorting to the rule of estoppel. Such extension of rule may be against public policy. What then is the nature of right conferred by Section 9 of the Act? In Bishen Singh v. Khazan Singh, AIR 1958 SC 838 this Court while approving the classic judgment of Mahmood, J. in Gobind Dayal v. Inayatullah, ILR 7 All 775 (FB). 'that the right of pre- emption was simply a right of substitution' observed that, 'courts have not looked upon this right with great favour, presumably, for the reason that it operated as a 7 of 12 ::: Downloaded on - 20-07-2024 02:00:13 ::: Neutral Citation No:=2024:PHHC:020000 RSA No.515 of 1994 (O&M) -8- clog on the right of the owner to alienate his property. In Radha Kishan v. Shridhar, AIR 1960 SC 1369 this Court again while repelling the claim that the vendor and vendee by accepting price and transferring pos- session without registration of sale deed adopted subterfuge to defeat the right of pre-emption observed that, 'there were no equities in favour of a pre-emptor, whose sole object is to disturb a valid transaction by virtue of the rights created in him by statute. To defeat the law of pre- emption by any legitimate means is not fraud on the part of either the vendor or the vendee and a person is entitled to steer clear of the law of pre- emption by all lawful means'. Such being the nature of right it is harsh to claim that its extinction by conduct would amount to statutory illegality or would be opposed to public policy. The distinction be- tween validity and illegality or the transaction being void is clear and well known. The former can be waived by express or implied agreement or conduct. But not the latter. The provision in the Act requiring a vendor to serve the notice on persons having right of pre-emption is condition of validity of transfer, and therefore a pre- emptor could waive it. Failure to serve notice as required under the Act does not render the sale made by vendor in favour of vendee ultra vires. The test to deter- mine the nature of interest, namely, private or public is whether the right which is renunciated is the right of party alone or of the public also in the sense that the general welfare of the society is involved. If the answer is latter then it may be difficult to put estoppel as a defence. But if it is right of party alone then it is capable of being abnegated either in writing or by conduct. The Act does not provide that in case no notice is given the transaction shall be void. The objective is to 8 of 12 ::: Downloaded on - 20-07-2024 02:00:13 ::: Neutral Citation No:=2024:PHHC:020000 RSA No.515 of 1994 (O&M) -9- intimate the pre-emptor who may be interested in getting himself substituted. The Act does not debar the pre-emptor from giving up this right. Rather in case of its non-exercise within two months, may be for the financial reasons. the right stands extinguished. It does not pass on to anyone. No social disturbance is caused. It settles in purchaser. Giving up such right. expressly or impliedly cannot therefore be said to involve any interest of community or public welfare so as to be in mischief of public policy."
3.4 In Indra's Bai case (supra), the Supreme Court has analyzed and interpreted the similar right of pre-emption available under the Rajasthan Preemption Act, 1966 (hereinafter referred to as 'the 1966 Act'). Section 8 and 9 of the aforesaid Act is extracted as under:-
"Section 8 - Notice to pre-emptors (1) When any person proposes to sell, or to foreclose the right to redeem, any immovable property, in respect of which any persons have a right of pre-emption, he shall give notice to all such persona as to the price at which he is proposing so to sell or as to the amount due in respect of the mortgage proposed to be foreclosed, as the case may be.
(2) Such notice shall be given through the civil court, within the local limits of whose jurisdiction the property concerned is situated shall clearly describe such property, shall state the name and other particulars of the purchaser or the mortgagee and shall be served in the manner prescribed for service of summons in civil suits.
Section 9 - Loss of right of pre-emption on transfer Any person having a right of pre-emption in respect of any immovable property proposed to besold shall lose 9 of 12 ::: Downloaded on - 20-07-2024 02:00:13 ::: Neutral Citation No:=2024:PHHC:020000 RSA No.515 of 1994 (O&M) -10- such, right unless within two months from the date of the service of such notice, he or his agent pays or tenders the price specified in the notice given under section 8 to the person so proposing to sell:"
3.5 On comparative analysis, it is evident that the language employed in Section 8 of the 1966 Act is stricter than the words used in Section 19 of the 1913 Act. When the vendor is required to give notice to all such persons as to the price at which he is proposing to sell, the 1966 Act uses the word 'shall", whereas, the expression used in Section 19 of the 1913 Act is "may". Though, the language employed in both the statutes is not identical but intent and object is same. This court is of the considered opinion that the presence of the plaintiff at the time when the sale deed was executed is sufficient for the vendees to estop the plaintiff from getting a decree.
3.6 With reference to the contention of the respondent's counsel, it may be noticed that the purpose and object behind notice under Section 19 of the 1913 Act is to inform the person who has right of preemption about the intended sale at a particular price. The Act does not provide that in absence of notice, the sale of property shall be void ab-initio. When it is clear that the purpose of notice is to inform the person having pre-emptory rights and there is no provision in the Act that prohibits giving up or surrendering the pre-emptory right, in that case the conduct of the pre- emptor plays an important role. Once it is established that the pre-emptor had sufficient information including the price and the intention of the vendor to sell the property he was required to take steps forthwith. It is not the case of the plaintiff that he made an offer but it was not accepted by the vendor.
10 of 12 ::: Downloaded on - 20-07-2024 02:00:13 ::: Neutral Citation No:=2024:PHHC:020000 RSA No.515 of 1994 (O&M) -11- The Hon'ble Supreme Court in above noted judgment while interpreting a similar right of pre-emption has in para 5 laid down that the Act does not debar the pre-emptor from giving up this right. In that context, the Supreme Court held that the pre-emptor could waive the right. Now 35 years have elapsed from the date the sale deed was executed, hence the equity is also not in favour of a plaintiff. If the appeal is dismissed, it would create chaos for the purchaser who is in possession of the property for the last 35 years. The Supreme Court in more than one judgments have laid down that the right of pre-emption is a weak, outmoded and piratical. Reliance in this regard can be placed on five Judges Benches in Atam Parkash vs. State of Haryana, AIR 1986 Supreme Court 859: 1987 RRR 116 as well as in Shyam Sunder and another vs. Ram Kumar and another, (2001) 8 SCC
24. In view of the aforesaid, discussion, this court expresses inability to accept the submissions of the learned senior counsel representing the respondents 3.7 In this case, the First Appellate Court has recorded a finding of fact that the plaintiff was present at the time when the first sale deed i.e. 08.12.1988 was executed. However, the objection was overruled on the ground that it would not amount to waiver of right of pre-emption. The Supreme Court while interpreting a similar but not identical provision has categorically held that once the preemptor has acquiesced then he is estopped from claiming the right of pre-emption. It is a well settled legal principle that if the correctness of the statement of a witness with regard to the facts is required to be disputed, then during the cross-examination of the witness, the correctness of the aforesaid statement of fact shall be 11 of 12 ::: Downloaded on - 20-07-2024 02:00:13 ::: Neutral Citation No:=2024:PHHC:020000 RSA No.515 of 1994 (O&M) -12- challenged. In absence thereof, the statement of fact will be deemed to have been admitted. In this case, while appearing as DW1, defendant no.3 has stated that the plaintiff was instrumental in getting the deal of the sale of the property finalized and he was present at the time of execution of the sale deed. In his cross-examination, the correctness of the aforesaid statement was not challenged. Thus, the First Appellate Court has erred in observing that plaintiff has never acquiesced.
3.8 As far as submission of the learned senior counsel representing the respondent (plaintiff) that the procedure as prescribed under Section 19 of the 1913 Act is mandatory, has no substance, in view of the ratio decidendi laid down by the Supreme Court in Indra Bai's judgment (supra) which has been followed in P.K.Rahim vs. P.K.Ravindran alias Ravichandran, (2005) 13 SCC 176 and affirmed by three judge Bench in Raghunath (D) by LRs vs. Radha Mohan (D) through LRs and others, (2021) 1 SCC 501.
4. DECISION 4.1 Keeping in view the aforesaid facts and discussion, the judgments passed by the courts below are set aside. Resultantly, the appeal is allowed.
4.2 All the pending miscellaneous applications, if any, are also disposed of.
24th June, 2024 (ANIL KSHETARPAL)
nt JUDGE
Whether speaking/reasoned :YES/NO
Whether reportable :YES/NO
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