# '960 RADHAKISAN LAXMINARAYAN TOSHNIWAL August 23 v. SHRIDHAR RAMCHANDRA ALSHI AND OTHEI~S

- **Citation:** [1961] 1 S.C.R. 248
- **Court:** Supreme Court of India
- **Decided:** 1961
- **Bench:** B. P. Sinha, J. L. Kapur, P. B. Gajendragadkar, K. SunBA HAo, K. N. Wanchoo
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/960-radhakisan-laxminarayan-toshniwal-august-23-v-shridhar-ramchandra-alshi-and-2164
- **Pages:** 11

## Headnote

Pre-emption-Equity if in favour of pre-emptor-Whether
M ohamedon Law or personal law can override provision of statute law
-To defeat a claim of pre-emption, whether it is a frattd, Berar
Land Revenue Code, I928.
The vendors executed an agreement for sale in respect of a
certain survey number which according to the agreement was to
be diverted to non-agricultural purposes and thereafter a sale
deed was to be executed. In pursuance to the said agreement
the vendors ~pplied for diversion which was sanctioned subject
to the payment of premium and other conditions. Before the
sale deed was executed respondent No. r Sridhar brought a suit
for pre-emption against the appellant on the ground that he had
a co-occupancy in the survey number in dispute being the owner
of the adjoining survey number. The suit was decreed and on
appeal the High Court inter alia held that the transaction ·was a
sale which was subject to pre-emption and that the failure to
execute and register a sale deed was a subterfuge to defeat the
right of pre-emption.
The question for decision was (r) whether a right of preemption had accrued to respondent Sridhar under the provisions
of the Berar Land Revenue Code, r928, and (2) whether the
appellant was guilty of fraud in that in order to defeat the right
of pre-emption the deed of sale was not executed, but for all
intents and purposes the appellant had become the owner of the
property.
Held, that the right of pre-emption in Berar did not arise
from Mohamedon Law and did not exist till it was brought from
Land laws of the Punjab or North West Provinces. The right of
pre-emption under the Berar Land Revenue Code extended to
transactions of sale, usufructuary mortgages and leases for r5
years or more and right under Mohamedon Law applies only to
sales. The word sale has no wider connotation under s. r76 of
the Berar Land Revenue Code than it has in the Transfer of
Property Act. After the application of Transfer of Property Act
to Berar a transaction of sale could not be effective except
through a registered instrument.
The contract of sale in the instant case created no interest in
favour of the appellant and the proprietary title did not validly
pass from the vendors to the appellant and until that was completed no right to enforce pre-emption arose. The transfer of
--\
'
l S.C.R. SUPREME COURT REPORTS
249
property, where the Transfer of Property Act applied, had to
i960
be under the provisions of the Transfer of Property Act only
and neither the Mohamedon Law nor any other personal'law of
Radhakisan
transfer of property could override the statute law. There are
Laxminara:yan
no equities in favour of a pre-emptor, whose sole object is to
Toshni~al
disturb a valid transaction by virtue of the right created by
v.
statute.
Shridhar
Held, further that it is neither illegal nor frauaulent for Ramchandra Alshi
the parties to a transfer, to avoid and defeat a claim for pre-
& Othm.
emption by ali legitimate means and a person is entitled to steer
clear of the laws of pre-emption by all lawful means.
CIVIL ArPELLATE JURISDICTION:
Civil Appeal
No. 167 of 1955.
Appeal by special leave from the judgment and
decree dated November 22, 1951, of the former Nagpur High Court in Second Appeal No. 720 of 1945.
S. N. Kherdekar, N. K. Kherdekar and A.G. Ratnaparkhi, for the appellant.
N. C. Chatterjee, S. A. Sohni and Ganpat Rai, for
respondent No. I.
1960.
August 23.
The Judgment of the Court
was delivered by
KAPUR J.-This is an appeal by special leave
Kapur J.
against the jmlgment and decree of the High Court at
Nagpur passed in second appeal No. 1720 of 1945 confirming the decree of the District Judge. In the suit
out of which this appeal has arisen the appellant was
defendant No. 1 and the respondents were the plaintiff anq defendant Nos. 2 and 3 and the dispute
relates to pre-emption on the ground of co-occupancy
which falls under Ch. XIV of the Berar Land Revenue
Code, 1928, hereinafter called the Code.
On April 10, 1943, D. B.

## Text

248
SUPREME COURT REPORTS
[1961]
'960
RADHAKISAN LAXMINARAYAN TOSHNIWAL
August 23.
V.
SHRIDHAR RAMCHANDRA ALSHI
AND OTHEI~S.
(B. P. SINHA, c. J., J. L. KAPUR,
P. B. GAJENDRAGADKAR, K. SunBA HAo and
K. N. WANCHOO, JJ.)
Pre-emption-Equity if in favour of pre-emptor-Whether
M ohamedon Law or personal law can override provision of statute law
-To defeat a claim of pre-emption, whether it is a frattd, Berar
Land Revenue Code, I928.
The vendors executed an agreement for sale in respect of a
certain survey number which according to the agreement was to
be diverted to non-agricultural purposes and thereafter a sale
deed was to be executed. In pursuance to the said agreement
the vendors ~pplied for diversion which was sanctioned subject
to the payment of premium and other conditions. Before the
sale deed was executed respondent No. r Sridhar brought a suit
for pre-emption against the appellant on the ground that he had
a co-occupancy in the survey number in dispute being the owner
of the adjoining survey number. The suit was decreed and on
appeal the High Court inter alia held that the transaction ·was a
sale which was subject to pre-emption and that the failure to
execute and register a sale deed was a subterfuge to defeat the
right of pre-emption.
The question for decision was (r) whether a right of preemption had accrued to respondent Sridhar under the provisions
of the Berar Land Revenue Code, r928, and (2) whether the
appellant was guilty of fraud in that in order to defeat the right
of pre-emption the deed of sale was not executed, but for all
intents and purposes the appellant had become the owner of the
property.
Held, that the right of pre-emption in Berar did not arise
from Mohamedon Law and did not exist till it was brought from
Land laws of the Punjab or North West Provinces. The right of
pre-emption under the Berar Land Revenue Code extended to
transactions of sale, usufructuary mortgages and leases for r5
years or more and right under Mohamedon Law applies only to
sales. The word sale has no wider connotation under s. r76 of
the Berar Land Revenue Code than it has in the Transfer of
Property Act. After the application of Transfer of Property Act
to Berar a transaction of sale could not be effective except
through a registered instrument.
The contract of sale in the instant case created no interest in
favour of the appellant and the proprietary title did not validly
pass from the vendors to the appellant and until that was completed no right to enforce pre-emption arose. The transfer of
--\
'
l S.C.R. SUPREME COURT REPORTS
249
property, where the Transfer of Property Act applied, had to
i960
be under the provisions of the Transfer of Property Act only
and neither the Mohamedon Law nor any other personal'law of
Radhakisan
transfer of property could override the statute law. There are
Laxminara:yan
no equities in favour of a pre-emptor, whose sole object is to
Toshni~al
disturb a valid transaction by virtue of the right created by
v.
statute.
Shridhar
Held, further that it is neither illegal nor frauaulent for Ramchandra Alshi
the parties to a transfer, to avoid and defeat a claim for pre-
& Othm.
emption by ali legitimate means and a person is entitled to steer
clear of the laws of pre-emption by all lawful means.
CIVIL ArPELLATE JURISDICTION:
Civil Appeal
No. 167 of 1955.
Appeal by special leave from the judgment and
decree dated November 22, 1951, of the former Nagpur High Court in Second Appeal No. 720 of 1945.
S. N. Kherdekar, N. K. Kherdekar and A.G. Ratnaparkhi, for the appellant.
N. C. Chatterjee, S. A. Sohni and Ganpat Rai, for
respondent No. I.
1960.
August 23.
The Judgment of the Court
was delivered by
KAPUR J.-This is an appeal by special leave
Kapur J.
against the jmlgment and decree of the High Court at
Nagpur passed in second appeal No. 1720 of 1945 confirming the decree of the District Judge. In the suit
out of which this appeal has arisen the appellant was
defendant No. 1 and the respondents were the plaintiff anq defendant Nos. 2 and 3 and the dispute
relates to pre-emption on the ground of co-occupancy
which falls under Ch. XIV of the Berar Land Revenue
Code, 1928, hereinafter called the Code.
On April 10, 1943, D. B. Ghaisas and his mother
Ramabai entered into two contracts of sale with the
appellant, one in regard to Survey Nos. 5, 14 and 16
for a sum of Rs. 10,000 out of which Rs. 2,000 was
paid as earnest money and the other in regard to
Survey No. 15/l for Hs. 8,500 out of which Rs. 500
was paid as earnest money. On April 16, 1943, the
vendors executed a registered sale deed in regard to
Survey Nos. 5, 14 and 16 and the balance of the price
J•
250
SUPREME COURT REPORTS
(1961)
r96o
was paid before the RegiRtrar. On April 22, 1943, the
vendors executed a. lease of Survey Ko. 15/l for 14
Radhnkfsa,1
r.,,,,,., 0 ,.,,0 ., y<>ars in fa.,·our of Kisa.nlal and Sita.ram who were
Toshuiwal
defendant Nos. 2 and 3 in the suit and are respondv.
ents Nos. 2 and 3 in this appeal. On April 24, 1943,
Shndlw
the vendors executed a. fresh agreement of sale in resRam<ha .. dra Alshr pect of the same field which according to the agree-
.;. Othm
b d ·
d
· I
I
ment was to e 1verte to non-agncu tura purposes
Kapur ;.
and thereafter a 8ale deed was to be executed wht>n it
was sa°diverted. The appellant was to pay the costs
of the diversion as well as the premium. In pursuance
of this agreement the vendors applied to the Deputy
CommiBBioner, Akola, on August 12, 1943, for diversion under s. 58 af the Code and sanction was accorrled
on .January 22, 1944, subject to payment of premium
of Rs. 9,222 and other conditions. The appellant's
case is that as agreed the vendors were paid this
money for deposit and it was <lflposited in the Treasury under Chall1rn Ko. 68 but there is no finding in
favour of the appellant although the trial court and
the District Judge 8eem to have proc~eded on the premises that this amount was deposited but in the circumstances of this case it i~ not necessary to go into
this matter. On February I, I 944, the sale deed was
executed by the vendors in favour of the appellant
1md the consideration in the sale deed was l~s. 17,722.
On Sepoombor I 1, 1943, i.e., before the sale dned
was• executed the respondent, Sridhar, brought a suit
for pre-emption against the appellant on the allegation
that he had a co-occupancy in the Survey number in
dispute-being the owner of Survey Xo. 15/2.
In the
plaint it was alleged tJtat the transaction of contract
under the documents of April IO, 1943, and April 24,
1943, constituted a sale and the efore it was subject to
respondent. SridhM'A prior right of pre-emption. It
was also alleged that tho price waA not fixed in good
faith.
These allegations were denied.
Both the trial
court and the District Judge held that respondent
Sridhar was entitled to pre-empt and determined the
fair consideration to be Rs. 3,306. The suit was therefore decreed by the trial court and on appeal by the
District Judge. The appellant took an appeal to the
1 S.C.R. SUPREME COURT REPORTS
251
High Court which also confirmed the decree of the
'960
subordinate courts.
Radhakisan
The High Court has held tha.t the transaction was Laxminarayan
a sa.le which was subject to pre-emption and that the
Toslmiwal
failure to execute and register a sale deed was, a subv.
terfuge to defeat the right of pre-emption. It also
Shridhar
h Id
h
d.
k
£
•
f
. Ramchandra Als/1i
e
_that t e procee mgs ~a en 1or conversion o agr1-
.,, Othm
cultural land into non-agrwultural land were pendente
lite and as the right of pre-emption had already aceKap1tr J.
rued by subsequent acts of the vendors and the vendee
it could not be defeated. The High Court further
held that as the order of the Sub-Divisional Officer
allowing conversion was a conditional one the land
could not be said to have been irrevocably diverted to
non-agricultural purposes. The decree of the subordinate courts was confirmed and against that judgment
the appellant has come to this court in appeal by
special lea. ve.
The first question for decision is whether a right of
pre-emption had accrued to respondent Sridhar under
the provisions of the Code.
Previous to the cession of
Berar by the Nizam of Hyderabad to the British
Government in 1853, the Mohammedan rule of preempt ion wa·s, according to one .view, in force in the
province of Berar and it continued to be so till the
Bera.r Land Revenue Code of 1896 came into operation as from January 1, 1897. ·On the other hand,
according to the view of two writers on the Berar
Land Revenue Code of 1896, the Mohammedan law
origin of the right of pre-emption does not seem to be
well-founded. In the annotation of the Berar Land
Revenue Code of 1896 Mr. E. S. Reynolds wrote in
1896 that although the right of pre-emption in regard
to agricultural land on occupancy. tenures bad been
recognised in Berar the right was not based on
Mohammedan law nor did it appear to be ancient and
immemorial custom. It seems to have been evolved
from a ruling of the Resident acting as the High Court
based on r. 10 of the Sub-tenancy Rules.
According
to Hirurkar (Land Revenue Code, pp. 126-127) also
the right of pre-emption was not based on the Mohammedan law and did not originally exist in Berar. It
252
SUPRE~IE COURT REPORTS
(1961]
''6°
seems to have beon brought from the land laws of the
Puui'ab or tho North 'Vest Provinces. In the Berar
Hadl11ikt.<an
Settlement Rules and Rerar Sub-tenancv Rules of
l.axtni t1ttray1111
..
rrsh>1u•·.11
1866 the right of pre-emption attaohed to relinquishv.
ment of shares in the case of ryot~ of joint holdings
Shndha•
and applied to co-sharers and this is different from
Ramc>.and•• Aisin the rule of Mohammedan law.
& Othm
By s. 205 of the Berar Land Revonue Code of 1896
Kap•<> 1.
the right of pre-emption arose when a co-occupant in
any Survey number was transferred by sale, forec)o.
sure of mortgage or relinquishment in favour of a.
specified person for valuable consideration and it vested in every other co occupant of the Survey number.
It will thus be seen that tho right of pre-emption,
which under Mohammedan law attaches to sales only,
was also applicable to foreclosure of mortgages and
relinquishment for value.hie consideration. In the
year 1907 the Transfer of Property Act (IV of 1882)
was extended to tho province of Berar. In 1928, the
Code was re-enacted and it further extended the pro·
visions in regard t-0 pre-emption in Ch. XIV. Under
s. 174 pre-empti've rights arise in respect of transfers of
una.lienated land held for agricultural purposes and
before an occupant could transfer the whole or any
portion of his interest he had to give notice of his
intention to all other occupants.
Under ss. 176 to
178, the right of pre-emption arises in the case of
transfers by way of sale, usufructuary mortgages, by
lease for a. period exceeding fifteen yea.rs or in the case
of final decrees for foreclosure in a. case of mortgage by
conditional sale. Under s. · 183 every occupant in
Survey number shall have the right to pre-empt the
interest transferred by civil suit. Unc!er s. 184 the
right also a.rises in the case of an oxcha.nge. Thus it
will be seon that tbc right of pre-emption has been by
statute extended far beyond what was contemplated
under Moha.mmecla.n law and also beyond what was
recogniserl in the Berar Settlement Rules, Berar Subtenancy I{ ules and in the Code of 1896.
The High Court held that the word sale in s. 176 of
the Code had a. wider connotation than what it had
under s. 54 of the Transfer of Property Act. That
•
1 S.C.R. SUPREME COURT REPORTS
253
was based on the judgment of Vivian Bose, J. (as he
I960
then was), in Jainarayan Ramgopal Marwadi v. Bal.
want Maroti Shingore (1) which had been appro
.. vedJn · Radhakisan
La.oninarayan
later judgments of that court. It was also,._ of the
Toshniwal
opinion that the transaction in dispute gave vis~. to the
v.
exercise of the right of pre-emption_ .under, the rule
Shridhar
laid down in Begum v. Mohammad fakub.('J and as in Ramchand~a Alshi
the instant case there was in reality a sa,le although a
& Others
registered sale deed had not been exe,cu_ted'.the right
-
Ifapur ].
of pre.emption could not be defeated by.! tb'e .. dev~e
that the vendors and the appellant adopted;.
·
According to s. 2 of the Transfer of Prop11rty Act.'
which at the relevant time was in operation in Berar
s. 54 is not one of the sections within ch.· 2 of that Act
and therefore it overrides Mohammedan law and the
provisions of that section, being exhaustive as to
modes of transfer, govern all sales in that province
and no title passes on a sale except as provided in that
secti9n. Sale is there defined as transfer of ownership
for a price paid or promised or part paid or part promised and in the case of sale of tangible immoveable
property of Rs. 100/· or more sale can only be made
by a registered instrument. That is clear from the
language of the section.itself where it is stated:-
Section 54 Sale how made :-"Such transfer, in
the case of tangible immoveable property of the value
of one hundred rupees and upwards, or in the case of
a reversion or other intangible thing, can be made
only by a registered instrument".
It was held by the Privy Council in Immudipattam
Thirugnana. S. 0. Kondema Naik v. Peria Dorasami (')
which wa.s a case of a zamindari estate that it could
not be transferred except by a registered instrument.
But it was submitted that sale when used in connection with the general law of pre-emption is not to be
construed in the narrow sense in which it is used in
the Transfer of Property Act and that that had been
accepted by the Judicial Committee in Sitaram Bhaurao Deshmukh v. Jiaul Hasan Sirajul Khan(') where
(I) A.LR. 1939 Nag. 35·
(3) (1900) zB LA. 46.
· (z) (1894) LL.R. 16 AIL 344.
(4) (1921) 48 I.A. 475.
254
SUPREME COCRT REPORTS
(1961]
the observations of Sir .John Edge, C. J., in RP.gum v.
Mohammad Yakub (')had been approved.
Radh"ki.'""
In 8itaram D1!.'!hmukh's case(') one of the two
J.axm111ataya •1
r,,1rn,,,,,1
Moha.mmeda.n co-sharers in Bombay by a.n agreement
v.
dated October 14, 1908, a.greed to sell his share to a.
Shtidha•
Hindu. The agreement wa.s expressly subject to a. right
Ram,hand>a Ai'.ln in the co-sharer to pre.empt. The vendor informed
& 011"'·'
his co-sharer that he ha.d sold his share and the httcr
/(apur J.
thereupon, after Urn customary formalities on October
15, 1908, claimed to recover the sha.rc from the purcha8n. The sale deed was executed on X ovember 9,
l!lOS, and then a. snit wa.s filed by the pre-emptor. It
was hrld tha.t the co.sharer ha.d tho right to pre-empt
in accordance with the intention expressed by the pa.rtiC'S to the sale 1Lnd that intn1tion wa.s to be looked at
to determiuo what system of la.w wa.s to apply a.nd
wha.t wa.s to be ta.ken to bo the date of the sale with
reference to which tho formalities wore performed.
The question there really wa.s as to what wa.s to be
ta.ken as a sale sufficient to justify the pre-emptor in
proceeding at once to the ceremonies a.nd it wa.s in
that connection that the following observation of Sir
John Edge in Begum v. Mohammad Yakub (1) were
quoted:-
"The Chief ,Justice, Sir John Edge, there observes, in connection wit.h the question whether the
Transfer of Property Act, which roguired registrat.ion,
ha.d altered the prineiple of the Mohammedan La.w,
which determiner! what wa.s a. sa.le for the purpoHoH of
the date in reference to which the ceremonies should be
performed; " I cannot think tha.t it was the intention
of tho Legislature in passing Act Ko. IV of 1882"
(the Transfer of Property Act) "to alter directly or
indirectly the Mohammedan law of pre-emption as it
existed and wa.s understood for centuries prior to the
passing of Act IY of 1882".
That a.t all events is in ha.rmonv with the conclusion come to by the High Court at 'Bomb11.y.
The
conclusion is, that you a.re to look at the intention of
the parties in determinin~ what system of la.w was to
be ta.ken a.s applying a.nd wha.t wa.s to be ta.ken to be
(1) (1894) l.L.R. 16 All. 344.
(2) (1921) 48 !.A. 475·
1 S.C.R. SUPREME COURT REPORTS
255
the date of the sale with reference to which the cerez96o
monies were performed".
Radhakisan
But it was argued for the respondents that the Privy
La:oninarayan
Council had not only approved the observation of
Toshniwal
Sir John Edge, C. J., in Begum v. Mohammad
v.
Y akub (1) but has also approved the . view of the
Shridhar
Calcutta High Court in Jadu Lal Sahu v. Janki Ramclrnndra Alshi
Koer ('). That was a case from Bihar where the right
& Others
of pre-emption under Mohammedan Law was judicialKapur J.
ly recognised in regard to Hindus also. The question
whether the sale which was to be pre-empted was the
one under s. 54 of the Transfer of Property Act or the
one under the principles of Mohmmedan Law does not
seem to have been the point raised in that case. It
may be pointed out that both in the caM which went
to the Privy Council (Sitaram Bhaurao Deshmukh v.
Jaiul Hasan Sirajul Khan(') aud the Calcutta case
Jadulal Sahu v. Janki Koer ('))sale deeds were executed and registered before the suits to enforce pre-emption were filed.
In the latter case the kabala was on
July 28, 1904 and the ceremonies were performed
after that date.
In the Allahabad case, Begum v. Mohammad
Yakub ('), there was a verbal sale of a house which
was followed by possession but there was no registered document. No doubt there the learned Chief
Justice in the majority judgment did say that to
import into the Mohammedan Law of pre-emption
the definition of the word " sale " with restrictions
contained in s. 54 of the Transfer of Property Act
would materially alter Mohammedan Law of preemption and afford fraudulent persons to avoid the
law of pre-emption ; with this view Bannerji, J., did
not agree. But in our opinion the transfer of property where the Transfer of Property Act applies has,
as was held by the Privy Council also, to be under
the provisions of the '.l.'ransfer of Property Act only
and Mohammedan Law of Transfer of Property cannot
override the statute law. Mahmood, J., in Janki v.
Girjadat (') though in a minority (four judges took a
different view) was of the opinion that a valid and
(1) (1894) l.L.R. 16 All .. 344·
.
(2) (1908) I.L.R. 35 Cal. 575.
(3) (1921) 48 I.A. 475.
(4) (1885) IL.R. 7 All. 482,
256
SUPRE!\!E COURT REPORTS
(1961]
perfected sale wa.s a condition precedent to the exercise of the right of pre-emption a.nd until such sale ha.d
Ji'adh~his(l11
b
Cl"
d h
' h
f
'
Jd
'
een euecte
t e rig t o pre-emptmn cou
not arise.
/.~, n11ir.a~ayr.Jt:
T°''"""'"'
Section 17 read with s. 49 of the Registration Act
v.
shows that a transfer of immovea.lile property where
.<h"d''"'
it is worth Rs. 100 or more requires registration and
Ra""'""'d•a °'''"'unless so registered the document does not affect the
.s. Othas
property and cannot be received in e\·idence.
The
following observations of Mahmood, J., from Janki
v. Girjadat (')a.re very apposite:-
" If a valid and perfected sale were not a condition precedent to the exercise of tho pre-emptive right,
consequences would follow which the law of pre-emption does not contemplate or provide for. In this very
case, supposing the so-called vendor, notwithstanding
the application of tho.15th August, 1882 (which cannot
a.mount to an estoppel under the circumstances) continues or re-enters into possession of the property, it is
clear that the so.called vendoo would have no title
under the so-called sale, to enable him to reC'over
possession-the transaction being, by reason of s. 54 of
tho Transfer of Property Act., ineffectual as transfer of
ownership. The right of pre-emption being only a right
of substitution, the successful pre-emptor's title is necessarily the same a.s that of the vendee and if the
vendee took nothing under tho sale the pre-emptor
ca.n ta.ko nothing either ; and it follows that if the
vendee could not oust the vendor, the pre-emptor
could not do so either, because in both cases the question would necessarily arise whether the sale wa.s
valid in the sonse of tr&nsfering ownership.
Again,
if notwithst,anding a pre-emptive suit such as this,
the so-ca.lied vendor, who ha.s executed &n invalid
sale which does not in la.w divest him of the proprietory right, suh8oquently executes a valid and registorll<l sale-deed in favour of a co-Bha.rer other than the
pre-emptor or in favour of a purchaser for value
without notico of the so-co.lied contra.ct for sale it is
difficult to conceive how the pre-emptor, who ha.s
succeeded in a suit like the present, could resist the
claim of such purchaser for possession of the property ".
(1) (1885) l.L.R. 1 All. 482.
..
•
1 S.C.R. SUPREME COURT REPORTS
257
Under s. 54 of the Transfer of Property Act a conr960
tract for sale does not of itself create any interest in
h
Radhakis5n
or c arge on immoveable property and consequently
Lazminarayan
the contract in the instant case created no interest in
Toshniwaz
favour of the vendee and the proprietary title did not
v.
validly pass from the vendors to the vendee and until
ShddhDY
that was completed no right to enforce pre-emption Ranzchand'° Alshi
arose. As we have said earlier wherever the Transfer
'°' Othm
of Property Act is in force Mohammedan Law or any
Kapur J.
other personal law is inapplicable to transfers and no
title passes except in accordance with that Act ..
Therefore when the suit was brought there was no
transfer by way of sale which could be subject to preemption.
'
It was next contended that the appellant was guilty
of fraud in that in order to defeat the right of the preem ptors a deed of sale was not executed although as a
matter of fact price had been paid, possession had
passed and for all intents and purposes the appellant
had become the owner of the property and that conduct such as this would defeat the very law of preemption,Jrhe right. to pre-empt the sale is not exercisable till a pre-emptible transfer has been effected and
the right of pre-emption is not one which is looked
upon with great favour by the courts presumably for
the reason that it is in derogation of the right of the
owner to alienate his property. It is neither illegal
nor fraudulent for parties to a transfer to avoid and
defeat a claim for pre-emption by all legitimate means.
In the Punjab where the right of pre-emption .is also
statutory the courts have not looked with disfavour
at the attempts of the vendor and the vendee to avoid
the accrual of right of pre-emption by any lawful
means and this view has been accepted by this court
in Bishan Singh v. Khazan Singh(') where Subba
Rao, J., observed:-
" The right being a very weak right, it can be
defeated by all legitimate methods, such as the vendee
allowing the claimant of a superior or equal right
being substituted in his place".
In. the present case the transaction of sale had not
(7) [1959) S.C.R. 878, 884.
33
258
SUPREME COURT REPORTS
[1961]
i96o
been completed until February l, 1944, when the sale
deed was executed. Anythiug done previous to it
RadhaAisan
Lax•••••ray•• coulci not ordinarily i>e said to be & fraud to deprive &
Toshiwal
pre-emptor, from the exercise of his right of pre-empv.
tion. There &re no equities in favour of a pre-emptor,
Sloridioar
. whose sole object is to disturb a valid transaction by
Ramchandra Alsh• virtue of the rights created in him by statute. To
.s- 0'""'
defeat the law of prn-emption by a.ny legitimate means
Kapur J.
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 la.wful means.
It wa.s then submitted that the sale· deed had as a
matter of fa.ct, been executed on February l, 1944;
but respondent Sridhar brought the suit not on the
ca.use of action arising on the sale dated February l,
1944, but on the transaction of April 10, 1943, coupled
with that of April 24, 1943, which .being mere contracts of sale created no interest in the vt'lndee and
there wa.s no right of pre-emption in respondent No. l
which could be enforced under the (',ode. l\lr. Chatterji
urged that it did not matter if the sale took place later
a.nd the suit wa.s brought earlier but the suit as laid
down wa.s one to pre-empt a sale of April 1943 when,
as a matter of fa.ct, no sale had taken place. If respondent Sridhar had ba.sed his right of pre-emption on t.he
basis of the sale of February 1, 1944, tho appellant
would have ta.ken such defence as the law a.II owed
him. The defence in regs.rd to the con version of tho
land from a.gricultura.l into non-agriculture.I site which
negatives the right of pre-emption would then have
become a very important iBBue in the case a.nd the
appellant would have adduced proper proof in regard
to it. The right of pre.emption is a. wea.k right a.nd is
not looked upon with favour by courts and therefore
the courts could not go out of their way to help the
pre-emptor.
In our opinion the judgment of the High Court wa.s
erroneous a.nd we would therefore allow this appeal,
set a.side the judgment and decree of the High Oourt
and dismiBB the suit with costs throughout.
Appeal allowed.