Indian Kanoon - Search engine for Indian Law

(Explanation omitted.)

4. The preferential right to acquire the share of a co-heir who proposes to transfer his interest in the property or business of the propositus is limited to cases of simultaneous succession and devolution of property upon two or more heirs belonging to Class I. Obviously, the section has been aimed at reducing to some extent at least the inconvenient effects of simultaneous succession by several persons at one and the same time as members of Class I leading to fragmentation and percelling up, of even small holdings of property. To a degree the section enables a co-heir to retain the property in the family and avoid the introduction of a stranger in the enjoyment of family property if he so desired. While Clause (1) of Section 22 gives the preferential right for the acquisition of interest proposed to be transferred by a co-heir, Clause (2) provides for the ascertainment of the amount of consideration or value payable by the co-heirs who. intend to exercise the preferential right, if the co-heirs are unable to agree about the price. If any co-hsir who intended to exercise the preferential right, is found not willing to acquire the interest for the consideration determined by Court on application, he cannot be compelled to, go through the purchase, but can be made liable to all costs of the application. Clause 3 of section. 22 provides that, if there is competition between two or more co-heirs specified in Class I for acquiring the interest proposed to be transferred, that heir who offers the highest price shall be preferred. Having said so much, Parliament could have laid down how and when the right of preference is to be exercised. It is the absence of provisions in this regard, that is pressed by the alienee. The first hurdle in the exercise of the right conferred by the section arises, when a co-heir without reference to the other co-heirs alienates his or her share. Other problems can be envisaged. To mention one, granting that the preferential right can be enforced against the purchaser, the ostensible price at which it has been sold to the purchaser may not be the real price. The deed of sale may show an exaggerated figure or reduced figure for various reasons. Such problems do not trouble us here.

5. The right conferred is in substance a pre-emptive right. Justice Mahmood in Gobind Deval v. Inayathullah (1885) I.L.R. 7 All. 775 at 806, while examining the Muslim law of pre-emption quotes Muslim texts to the effect:

It is not lawful for any one to sell till he has informed his coparceners who may take or leave it as he wishes ; and if he has sold without such information, the coparcener has a preferential right to the share.

The incidents of Muslim law of pre-emption have become crystallized. Statutes relating to pre-emption (See the Agra Pre-emption) Act (XI of 1922) generally provide for the issue of prior notice to the pre-emptors. Provisions are found for ascertainment of the actual price by the Court, when the Court finds that the plaintiff has the right of pre-emption, but that the ostensible price is not the real price. The occasion for the assertion of the right of pre-emption strictly so called, or the cause of action for enforcing the preferential right of purchase as prevalent in several parts of the country, arises only on sale by a co-heir. It has necessarily to be so, as the right is not to compel a sale, but a right to elect to be the purchaser when a sale is proposed. Can the absence of any provision in the Act for the co-heir to pursue the matter, if a person should sell his or her interest without reference to the other heir, conclude the matter against him? If the absence of provision is decisive, then the conferment of. the preferential right is futile and absolutely valueless. The very object of enacting Section 22 would be defeated. To use the words of Lord Simonds in Cutler v. Wandsworth Stadium Ltd. L.R. (1949) App. Cas. 398 at 407, ' the statute would be but a pious aspiration.' Let us, therefore, examine the jurisprudential aspect of the matter. The right conferred by Section 22 on co-heirs is undoubtedly a valuable right. The section provides that other heirs' shall have preferential right to acquire the interest. While one co-heir cannot compel another co-heir to sell his or her interest, if he or she intends to sell his or her interest, the other co-heirs have the statutory right to' purchase the interest; if they are prepared to pay the proper consideration. This statutory right necessarily imposes a corresponding duty on the co-heir who intends to sell his or her interest. It is a fundamental principle of our jurisprudence that, where there is a legal right, there is a corresponding duty enforceable by an action in* a Court of law. Also Ubi jus ibi remediam where there is a right there is a remedy. The expression 'Jus' in the maxim is understood as signifying the legal authority to do or demand something. A legal right is defined by Professor Holland as " a capacity residing in one man of controlling, with the assent and assistance of the State, the actions of another." Unless the section is looked upon as a pious exhortation of Parliament and not a legally enforceable right, the aggrieved co-heir can seek the Court's assistance for the recognition of his right and relief necessary to secure to him that right. A Legislature does not intend its enactment to be a brutum fulmen. If a statute creates a duty--here the duty to offer the share to the co-heirs in the first instance is necessarily involved when it is said by the statute that the preferential right arises when a co-heir proposes to transfer his interest--and the statute does not provide or enact a remedy, an action at common law is clearly competent.. The duty is not one of imperfect obligation ceasing with its breach. If the right can be extinguished by the wrongful act of the obligor, it cannot be regarded as a. right in law.

While Courts do not legislate, a statute can be carried into execution by known rules of law and equity if applicable. 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 immoveable property. A co-heir can sell his interest to a person of his 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 immovaeble property or any easement therein. A co-heir who shares land along with another co-heir 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 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 along 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.

11. There is no question here that the price shown to have been paid for the sale in favour of the and defendant is not the proper price. There has been no discussion, before me questioning the reality of the consideration paid for the sale. The passing observation of the Court below that there was a waiver of the right of pre-emption is wholly untenable. It is the case of the plaintiffs that the 1st defendant's husband died 20 years previous to the suit, and that she had left the village and gone to Nilgris. where she was living as the mistress of a certain person and had two children by him. The 2nd plaintiff as P.W. 1 deposed that her sister the 1st defendant attended her father's funeral and claimed a share in the properties, and that P.W. 1 told her that she had gone out of the caste. It is said that the plaintiffs then asked her to given the land free, but that she refused. P.W. 2 has deposed that the 1st defendant stated that she was not prepared to sell the property for any" price. One thing is, clear that, at the time of the funeral when there was some claim by the plaintiffs, there was no proposal by the 1st defendant to transfer her interest in the property to any one. The question of exercise of preferential right can arise only when there is a proposal to sell the property. There is no evidence that, at any time, to the knowledge of the plaintiffs, there was a proposal for sale. For the first time, the plaintiffs came to know of her intention to sell when she sold the property to the 2nd defendant. To infer waiver of the right, there must be knowledge and an opportunity to exercise the option. There can be no claim of bona fides and want of notice by the purchaser in the case, as the right conferred here is statutory and the purchase is of the share of the co-heir shortly after the inheritance opened. The thing' speaks for itself. The existence of the right is patent and the burden is upon the purchaser to establish that the other co-heirs declared or waived their preferential right when occasion arose. It is not pretended that the purchaser made any reference to the non-alienating co-heirs before his purchase. It follows that the plaintiffs have not lost their preferential right of purchase by the sale and are entitled to have the property conveyed to them.