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Showing contexts for: preferential right in Smt. Ammajamma vs Smt. Mahadevamma And Anr. on 19 January, 1996Matching Fragments
2. The plaintiff - appellant filed the suit for decree for declaration declaring that the plaintiff 4s entitled to exercise the right of preemption, i.e., right of preferential acquisition of suit property under Section 22 of Hindu Succession Act, i.e., Act No. 30 of 56, in respect of one half share in the suit schedule properties and for further direction to defendant No. 2, that is, Respondent No. 2, to deliver the possession of items Nos. 1 and 2 of Schedule property to the plaintiff. The plaintiff further claimed a direction to be given to make enquiries as to future mere profits from the date of the suit under Order 20, Rule 12 of the Code of Civil Procedure Code, for short, 'Code' in respect of item Nos. 1 to 3, of the suit schedule properties with reference to the 1/2 share of the plaintiff appellant. The plaintiff further claimed a decree for permanent injunction restraining the 2nd defendant from interfering with the plaintiff's peaceful possession and enjoyment of the suit property bearing item Nos. 4 and 5 against the defendants. The properties involved in the suit have been mentioned in detail in the plaint schedule with the boundaries given therein. According to the case of the plaintiff, Udase Gowda, the father of the plaintiff had no male issue and the 1st defendant has been the widow of Udase Gowda and was plaintiff's step mother. According to plaintiff's case, after the death of plaintiff's mother, Udase Gowda married the second time. According to plaintiff's case, after her marriage, plaintiff and her husband Gujarappa lived with plaintiff's father, who had no male issues. The plaintiff's father, according to the plaintiff died on June 17th, 1961. That after the death of Udase Gowda, the 1st defendant succeeded him as her daughter and at that time, all were living in house item No. 4 of the Schedule. The plaintiff further alleged that on the death of Udase Gowda, plaintiff and defendant No. 1, became entitled to equal shares in the suit schedule property left by Udase Gowda. Plaintiff claimed herself to be managing the affairs of the property. Plaintiff further alleged that Section 145 of the Criminal Procedure Code, for short, 'Cr.P.C.' proceedings were initiated by the defendants, but, those proceedings were not necessary to be taken, as the plaintiff was in possession of the land through the tenants. Plaintiff's case is that during the proceedings under Section 145 Cr.P.C., the 1st defendant created a deed in favour of the 2nd defendant styled as a Gift Deed. According to plaintiff's case, a suit was also filed by 1st defendant, namely, O.S.No. 499/1964, on the file of Munsiff, Madhugiri, for declaration of her title and for consequential relief of injunction in respect of suit item No. 4 (the house property). The suit was it appears, later oh, withdrawn by the 1st defendant. That plaintiff's case is that defendant. No. 2 had taken the possession of the suit land item Nos. 1 and 3 illegally and unlawfully sometimes in Jan 1965. That according to the plaintiff's case, first defendant had no right to convey or transfer any of the suit properties to the 2nd defendant and the deed styled as Gift Deed was really a deed of transfer for consideration to a stranger to the family, and as such, the said transaction, plaintiff claimed was in contravention and in violation of provisions of Section 22 of Hindu Succession Act. That as such, plaintiff claimed that as said Gift Deed was really a transfer for consideration it was invalid being in breach of Section 22 of Hindu Succession Act and so 2nd defendant, did not derive any right, title, interest in the suit schedule properties under the said so called Gift Deed. Plaintiff claimed himself to be entitled to exercise the preferential right to acquire the property under Section 22 of Act No. 30 of 1956 and preferred the claim to have the recovery of the possession of the suit property item Nos. 1 to 3 and to be also entitled to retain possession of item Nos. 4 and 5 of the suit schedule. The plaintiff further alleged that plaintiff is ready and willing to deposit the consideration for which half share of 1st defendant was transferred to 2nd defendant. The plaintiff asserted the value of the suit property, subject-matter of the Gift Deed to be Rs. 3000/- and the value of the half share of the plaintiff therein to be 1,500/- rupees.
Explanation:- In this Section, "Court" means the Court within the limits of whose jurisdiction the immovable property is situate or the business is carried on, and includes any other Court which the State Government may, by notification in the Official Gazette, specify in this behalf."
7. The expression 'proposes to transfer' and the expression 'proposed to be transferred' have got their material importance and significance in the context of preferential right to acquire the property by a co-heir, as Sub-section (1) of Section 22 indicates that it is prospective in its operation, confers a preferential right to a co-owner and provides that if any immovable property or interest in immovable property of an intestate or any interest in the business carried on by an intestate either solely or in conjunction with others, devolves upon two or more heirs as specified in Class I of the Schedule of the intestate and then, any one of such heirs proposes to transfer his or her interest in the property or business, then, in those cases, the, other heirs will have a preferential right to acquire the interest proposed to be transferred. The use of expression 'proposes to transfer' or 'interest proposed to be transferred' indicate that the intention of the legislature is that the preferential right to acquire such interest would arise or would accrue to other heirs in case of transfers, where, the transfer is in the nature of a contract in the form of proposal and acceptance and at the stage when there is a proposal to transfer. The use of these expressions indicate that there should be concept of proposal to transfer from one of the vendors. Proposal as per provisions of the Contract Act means, when one person signifies to another his willingness to do or to abstain from doing anything with the view of obtaining the assent of that another to such act or abstinence, he may be said to make the proposal and when a person to whom the proposal is made, signifies and assents thereto, the proposal is said to be accepted and on acceptance, the proposal becomes a promise, the promise means an accepted proposal and in case of promise or proposal, at the desire of the promissor, a promisee or any other person has done or abstains or abstained from doing or promises to do something, Such act or abstinence or promise is called consideration for the promise and every promise or set of promises which form consideration for each other is called to be an agreement and an agreement enforceable by law is termed to be a contract and all agreements which are made by free consent of the parties competent to contract for a lawful consideration with a lawful object and which are not declared under the provisions of the Contract 'Act to be void, it means, all agreements in which there are two parties, who enter into the contract with free consent provided those competent to contract and they have to contract for lawful consideration and object; they are said to enter into a contract. A contract is an agreement between the promissor and the promisee. A contract without consideration is said to be void and is not enforceable under Section 25 of the Contract Act, except, the cases mentioned under Clauses 1, 2 and 3 of the Contract Act.
8. A perusal of Sub-section 2 of Section 22, further indicates that the consideration, for which the interest in property may be transferred under this Section in the absence of any agreement between the parties, is be determined by the Court on the 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. Clause (3) further indicates that if there are two or more heirs signifying their intention to acquire any such interest in such property, the heir, who offers highest consideration for transfer shall be preferred. The entire tenor of Section 22 further indicates the concept of consideration, where one of the heirs makes proposal to transfer his interest to someone, then, the other heir will acquire preferential right to acquire the interest which was proposed to be transferred, that is, in respect of which there was offer or proposal to transfer the same. A reading of Section 22, per se reveals that it covers the cases of transfers, where, there are proposal to transfer in the sense of leading to an agreement for consideration in money or consideration can be of determined or assessed in terms of money, that is, in cases, where there is an offer to transfer the property awaiting an acceptance from the other person resulting in an agreement to transfer for consideration, the preferential right to claim or to acquire the property or interest in property accrues to the other co-heir or co-heirs and then, other co-heirs may claim or express their intention or desire to acquire the interest of the Vendor to transfer. This appears to flow from the scheme of the provisions of Section 22, A gift deed as per Section 122 of the Transfer of Property Act, is defined not as a proposal to transfer, but, it is really, a transfer of certain existing movable or immovable property which is made voluntarily by the donor without any consideration to an another person, who is called donee. There is no period prescribed for acceptance by the donee, it may be made during the lifetime of the donor and while, he is still capable of giving. Gift is not defined as a proposal to transfer, but, it is stated to be a transfer by itself. In Smt. SHAKUNTALA v. STATE OF HARYANA, AIR 1979 SC 843, their Lordships of the Supreme Court's observations as under:
10. The scheme of the Transfer of Property Act reveals that it is in case of sale of immovable property, there can also be stage for contract for sale as distinct from sale itself. The sale may be said a contract of sale, where, the person transfers and conveys to the other the ownership in exchange for the price paid or promised or partly paid or partly promised, but, prior to that stage, there is and can be stage of a contract for sale or agreement to sell, whereunder, the parties agree and enter into a contract for sale of property that sale of such property shall take place at a future time on terms settled between the parties. When an agreement to sell is entered into, one offers to transfer or, proposes to transfer his property subject to the terms agreed including as to consideration and the like, and when that proposal or offer is accepted and entered into, then, comes into existence an agreement to sell, that is, till that stage, there is an offer to execute the sale deed and other party accepts the offer for execution of the sale deed, the transfer does not takes place till the contract of sale is executed. But, as regards the transaction of transfer of other nature, the scheme of Transfer of Property Act does not per se show any such stage, as the stage of agreement to mortgage or agreement to lease. The provisions relating to gift contained under Section 122 of the Transfer of Property Act, do not contain any such provision or the provisions in the nature of a contract or agreement for gift or agreement to gift. In case of a gift, Section 126 provides that gift may be revocable or suspendable in the circumstances narrated in Section 126. But, for want or failure of consideration, the Gift Deed is not liable to be revoked nor can it be said held to be void for want or failure of any consideration. The section reveals that this right of preferential acquition is available at the stage of the transfer being proposed and is exercisable at the time when one proposes to make transfer thereof and if it is exercised by proposing to acquire that interest by the other co-heirs, then, that property may be transferred for consideration agreed for that property or interest in property, if Consideration is agreed upon and in case in the absence of agreement about consideration, and if the person proposing to acquire interest, is not willing to acquire it for consideration so determined, then, such person, as per Sub-section 2, it has been provided, shall be liable to pay all costs and incident as to the application. Clause (3) again indicates that if amongst the two or more such heirs proposing to acquire interest, then, the one who offers the highest consideration for transfer shall be preferred. A complete reading of the scheme of Section 22, of the Act really, reveals that the concept of consideration runs all through, that is, in a case, where, there is a proposal to transfer for consideration by one of such heirs of his or her interest in the property or business, at those stages also the other heirs can acquire such interest. That being so in my opinion, it comes out that, where, transfer of interest by one co-owner is not for any consideration, the provisions of Section 22 of Hindu Succession Act conferring preferential right to other co-owner to acquire that interest for consideration, will not arise. In other words, in a case of the gift of his interest or share made by an heir in property or any interest in property, the preferential right to acquire that property will not accrue to other heirs. The natural love and affection for the person or satisfaction and service rendered by a person with all sense, love and affection towards donor of making gift or providential virtue or blessing after death may constitute the motive for transfer, but, the same cannot be termed to be consideration as per law of contract nor can such thing, namely love and affection or providential benefits for gift be evaluated in terms of monetary consideration for property. When this is how the consideration of property or interest of a person (a co-heir) be determined under Section 22(2) of the Act taking into consideration the motive, i.e., love and affection or providential benefit which plays important role in the matter of gift being done as such feeling constituting motive or intent of gift make object of gift coupled with feeling sentiment, incapable of being evaluated and it cannot be estimated or evaluated in terms of money. Thus considered in my opinion, the rights under Section 22 of Hindu Succession Act will apply to those cases, where, transfer of title or interest in property is proposed to be made or is made for considerations within the meaning of Section 2(d) of the Contract Act. It proceeds and operates on the proposal to transfer or the transactions which provide for the agreement or proposals to transfer, may be contract to sell, but, they pass on from the stage of contract to the stage of conveyance when entered into a completed transaction of conveyances or transfer it ceases to apply as per language of Section 22 of the Act. Section 22, in my opinion, applies at the stage when the transaction has not reached the stage of conveyance itself. It is at the stage of taking the shape of a contract may be in the form of an agreement to sell and if at that stage, the other co-owner offers to acquire, it may be said that cause of action had accrued to him for seeking relief of acquisition of the property in preference to the other transferee for consideration. But in my considered opinion, the gift being a completed transaction or conveyance by itself, not being something as proposal to transfer for consideration and nor there being any such thing as stage of proposal or contract to transfer Section 22 of Hindu Succession Act does not apply to such cases. This appears to be the legislature's intent as indicated by use of expression "propose to transfer" or proposed to be transfered in Section 22 of the Act. Had it been the intent of legislature the preferential right will apply to transfers made as to completed transaction of conveyance by itself, legislature could well have used the expression "proposes to transfer or transfer" in place of simple expression "proposes to transfer" used in Sub-section 1" and it would have used expression "interest proposed to be transferred or transferred" in the last part of Sub-section 1' of Section 22 of the Act Thus considered in my opinion, Section 22(1) of the Act does not apply to transaction such as gift where there is no stage of any proposal and as it can a conveyance without consideration. Thus having considered in my opinion, no right or preferential right to acquire the property or interest in property of the co-sharer and the co-heir can be said to have accrued in favour of the plaintiff/appellant. When such a right has not accrued, the plaintiff has not been entitled to any declaration and the Trial Court or Courts below having taken the view to the contrary, does not appear to be justified. Apart from that in the present case, the Lower Appellate Court has rightly allowed the appeal and dismissed the suit as not being properly framed holding that plaintiff was not entitled to declaration sought or for injunction. In my opinion, the Court below did not commit any error of law, in taking the view that even in cases where such a right accrues and person exercises that right by communicating his proposal to acquire that property, but where transfer has been made much before by the owner in favour of the 3rd person, in those cases, the proper course for the plaintiff was to obtain decree for enforcement of that right, that is, decree of mandatory injunction directing the vendor as well as subsequent purchasers to execute the Sale 'Deed, because in that case, the purchasers may be said to have purchased the property subject to the preferential right of acquisition of the co-sharer. Thus considered in my opinion, the Lower Appellate Court rightly allowed defendant's appeal and dismissed the suit and that First Appellate Court rightly held that the plaintiff/appellant's suit was misconceived in the form it was filed and he was not entitled to the relief as claimed as well. But apart from that in my opinion really, no right had accrued to the plaintiff-appellant under Section 22 of the Act and the plaintiff-appellant has not been entitled to the decree claimed. The second Appeal is as such, without any merits and as such, liable to be dismissed and is being herewith dismissed, affirming the judgment and decree of Lower Appellate Court allowing the defendants 1st appeal and dismissing the plaintiff appellant's suit. No order as to cost.