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Summarised Legal Opinion

Factual and Procedural Background

This appeal arises from a partition suit in which the trial Court decreed partition in favour of the plaintiffs. There were two plaintiffs, of whom plaintiff No. 2 is admitted to be the benamidar (nominee) of plaintiff No. 1. Plaintiff No. 1 claimed to be the purchaser of a 1/6th share in the suit properties from defendants Nos. 25 to 28. The defendants are members of a single family whose common ancestor was Nanku Lal Rastogi. A registered partition document dated 15 November 1936 (marked Ext. 6) recorded a partition among family members: some properties were allotted, while certain properties (mainly shops in Biharsharif town and a garden) were retained as joint and let out on rent, with Maruan Lal charged with collecting and distributing income. Defendants Nos. 25 to 28 left Bihar and settled in Varanasi; in 1962 they executed a sale deed in favour of plaintiff No. 1 (in the name of plaintiff No. 2). Their transferred share amounted to 1/6th of the joint properties. Defendants Nos. 25 to 28 did not appear or file a written statement in the suit. The other defendants contested the suit, alleging an oral agreement incorporated in the 1936 partition transaction that any co-sharer proposing to transfer his share must first offer it to other co‑sharers; if the other co‑sharers declined, the co‑sharer could sell to a stranger. The trial Court rejected this defence and granted the partition as pleaded. Some of the defendants (appellants) appealed against that decree.

Legal Issues Presented

  1. Whether the appellants (defendants) proved the existence of an oral agreement/term, said to be a condition of the 1936 partition, requiring a co‑sharer wishing to transfer his share to first offer it to other co‑sharers (i.e. asserted right of first offer / pre‑emption).
  2. Whether Section 22 of the Hindu Succession Act (the pre‑emption / preferential right provision among Class I heirs) applied so as to confer a right of pre‑emption on defendant No. 1 (or his sons) against defendants Nos. 25 to 28 and their vendees.
  3. Procedural/standing question whether the appellants had taken the steps required by Section 22(2) (i.e., making an application to Court for determination of consideration) before seeking enforcement of any such preferential right.

Arguments of the Parties

Appellants' (Defendants') Arguments

  • The defendants contended that, as a term of the 1936 family partition, there was an oral agreement that any co‑sharer intending to transfer his share in the joint properties had first to offer it to the other co‑sharers; if they did not agree to purchase, the transferor could sell to a stranger. The defence alleged this offer‑right had not been given before the 1962 sale by defendants Nos. 25 to 28.
  • Alternatively, counsel for the appellants argued that a right of pre‑emption existed under Section 22 of the Hindu Succession Act in favour of defendant No. 1 (or his sons) because Dhanu Lal (their father) died after the commencement of the Act, such that the interest devolved on his heirs specified in Class I and Section 22 should therefore apply.
  • In connection with the Section 22 argument, counsel assumed (for argument's sake) that after Dhanu Lal's death there was a separation between defendants Nos. 1–5 on the one hand and defendants Nos. 25–28 on the other, as pleaded in paragraph 3 of the plaint and not denied in the written statement.

Plaintiffs' / Respondents' Position (as reflected in the opinion)

  • The plaintiffs pleaded that plaintiff No. 1 purchased a 1/6th share from defendants Nos. 25–28 and sought a decree for partition accordingly. The trial Court granted the decree as prayed in the plaint.
  • There is no detailed record of the plaintiffs' fuller legal argumentation in the opinion beyond the prayer for partition and the fact that the trial Court accepted the plaintiffs' case over the defence raised by the other defendants.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court conducted a fact‑based and statute‑based analysis, summarized in the following steps:

  1. Evaluation of Defence Evidence on Oral Agreement:
    • The Court examined the testimony of the defence witnesses relied upon to prove the alleged oral condition to the 1936 partition: D.W.1 Lala Mathura Prasad, D.W.3 Bhola Nath and D.W.4 Gobardhan Lal.
    • D.W.1 (Lala Mathura Prasad) was found to be a chance witness with weak connections to the family and no satisfactory explanation why he would have been privy to intimate family terms; his ignorance of basic facts about the family properties and admission that he had never worked for them undermined his credibility.
    • D.Ws.3 and 4 (Bhola Nath and Gobardhan Lal) were family members and thus interested witnesses; their evidence was considered unsatisfactory, especially on cross‑examination. The Court emphasised that the defence asserted that the alleged restriction was a term of the original partition transaction itself, a transaction which was recorded in a registered document (Ext. 6). If such a restriction were truly a condition of the partition, it was reasonable to expect it to be included in the registered document; no explanation was given why it had not been included. On these bases the Court held the defence had not discharged the onus of proving the additional oral term.
    • The Court further held that because the partition transaction was evidenced by a registered document, parties could not be permitted to modify, add to, or subtract from the terms included in that document by pleading an oral arrangement.
  2. Analysis of Section 22 (Right of Pre‑emption) under the Hindu Succession Act:
    • The Court set out Section 22 in full (including sub‑sections and the Explanation) and proceeded to determine whether it applied to the facts of the case.
    • The Court explained that Section 22 is limited to interests that devolve upon two or more heirs specified in Class I of the Schedule by inheritance; it does not apply where a property interest devolves by the rule of survivorship on coparceners in a Mitakshara family.
    • The Court also quoted Section 6 of the Hindu Succession Act, which preserves the rule of survivorship for a male Hindu dying with an interest in Mitakshara coparcenary property: "his interest in the property shall devolve by survivorship upon the surviving members of the coparcenary and not in accordance with this Act." The Court noted the proviso to Section 6 applies only in limited circumstances (e.g., where a female relative in Class I or a male claiming through such a female survives), and that the appellants did not suggest Dhanu Lal left any heir other than his two sons.
    • On these grounds the Court concluded that when Dhanu Lal died his two sons took the interest by survivorship; consequently Section 22 could not be invoked by defendant No. 1 (or his sons) in the circumstances of this case.
    • The opinion records that counsel for the appellants asserted Dhanu Lal died after the commencement of the Act (the opinion refers to counsel's statements in two places: once that Dhanu Lal died in 1958 and elsewhere that counsel urged Dhanu Lal died in 1966). The Court treated the central legal consequence (devolution by survivorship rather than by inheritance under the Act) as decisive against application of Section 22 in this factual context.
  3. Procedural Requirement under Section 22(2):
    • The Court noted that subsection (2) of Section 22 contemplates that a party seeking to enforce the preferential right must apply to a Court (as defined in the Explanation) for determination of the consideration for the intended transfer; the Court then determines the consideration and the co‑sharer is given the option to acquire on that consideration.
    • In the present case, no such application under Section 22(2) had ever been filed in any Court. The point was not taken below and was raised for the first time on appeal. No application had been filed even in this Court seeking enforcement of the Section 22 right.
    • Because the procedural step provided by the statute had not been taken, the Court held the appellants' Section 22 plea was also unacceptable on procedural grounds.
  4. Conclusion of Analysis:
    • For the factual reasons (failure of proof and unreliability of witnesses) and the legal/statutory reasons (inapplicability of Section 22 because of survivorship under Section 6, and absence of any application under Section 22(2)), the Court found against the appellants' grounds of defence and dismissed the appeal.

Holding and Implications

Holding: APPEAL DISMISSED WITH COSTS.

Implications and consequences:

  • The decree of the trial Court in the partition suit (granting the partition as prayed by the plaintiffs) is affirmed by this Court; the appeal by some of the defendants fails.
  • The Court held that the defendants failed to prove an oral term that purportedly restricted transfers; because the partition transaction was recorded in a registered document (Ext. 6), parties could not modify or add terms by oral evidence in the absence of proof acceptable to the Court.
  • The Court ruled Section 22 of the Hindu Succession Act does not assist the appellants where the interest devolved by survivorship upon coparceners under Mitakshara rules (Section 6 preserves survivorship). Furthermore, even assuming arguendo some claim under Section 22, the statutory procedural mechanism in Section 22(2) (an application to Court to determine consideration) had not been invoked; the appellants did not pursue that remedy below and raised it first on appeal, so the plea was rejected.
  • No new legal precedent beyond the application of the statutes and the established evidentiary principles in this case is announced in the opinion; the decision has the direct effect of upholding the trial Court's decree and dismissing the appeal with costs.

Note: This summary is confined to the content and reasoning contained in the provided opinion and does not introduce material not present therein.

    Bhola Nath Rastogi And Others v. Santosh Prakash Arya And Others

    Lalit Mohan Sharma, J.:— This appeal by some of the defendants is directed against the decree passed by the trial Court in a suit for partition. There were two plaintiffs in the case, out of whom plaintiff No. 2 admittedly is the Benamidar for plaintiff No. 1. Plaintiff No. 1 claims to be the purchaser of 1/6th share in the suit properties from defendants Nos. 25 to 28. These defendants and the other defendants are the members of a family, their common ancestor being one Nanku Lal Rastogi. Nanku Lal had three sons, namely, Pana Lal Rastogi, Maruan Lal Rastogi and Dhanu Lal Rastogi. Dhanu Lal had two sons, namely, Bhola Nath who is defendant No. 1 and Kedar Nath (defendant No. 25). Defendants Nos. 2, 3 and 4 are the sons of defendant No. 1. Defendants Nos. 26 to 28 are the sons and grand-sons of defendant No. 25. Admittely, in 1936 there was a partition amongst the defendants by a registered document dated the 15th November, 1936, which has been marked as Ext. 6 in the case. Some of the properties were partitioned and some were left joint which were mainly shops in Biharsharif town, besides a garden. These properties were let out to the strangers on rent and under arrangement mentioned in the partition deed, they were left joint. It was further arranged that Maruan Lal would be looking after them, collecting income therefrom and distributing the same amongst the parties. It is further mentioned in the document that the parties were entitled to get their names mutated in respect of the joint properties, if they so liked. The defendants Nos. 25 to 28 left Bihar and settled in Varanashi and in 1962 they executed a sale deed in favour of plaintiff No. 1 in Farzi name of plaintiff No. 2. The share of these vendors admittedly came to 1/6th in the joint properties which they transferred and the plaintiffs have prayed for a partition decree accordingly.

    2. Defendants Nos. 25 to 28 did not appear in the suit nor did they file any written statement. The other defendants defended the suit on the ground that there was an agreement between the parties at the time of the execution of partition in the year 1936 whereby any co-sharer intending to transfer his share in the joint properties, had to make an offer to the other co-sharers for purchase and if other co-sharers did not agree to purchase, the co-sharer proposing to effect a transfer could sell to a stranger. The defence is that no such opportunity was given to the defendants before defendants Nos. 25 to 28 executed their sale deed in 1962. The sale deed was executed on the 10th August, 1962 and the suit was filed on the 1st December in the same year. The Court below rejected the defence case and decreed the suit as prayed for in the plaint. The appellants have thereafter filed the present appeal.

    3. Mr. J.C Sinha, learned Counsel for the appellants has contended that on the evidence led by the parties, it must be held that the defendants had established their case of oral arrangement as stated above. He has relied upon the evidence of defence witnesses Nos. 1, 3 and 4.

    4. Lala Mathura Prasad (D.W 1) is not connected with the family of the defendants intimately and has not given any acceptable reason as to why he should have been taken in confidence by the parties to be told about the intimate term between them. In his cross-examination he has stated that he had gone to the place of the defendants in connection with some other work and he heard the talks between the parties at that stage. He has betrayed ignorance about the boundaries of the house of the parties and has admitted that he had never worked for them. He is clearly a chance witness and does not inspire confidence. The other two witnesses, namely, D. Ws. 3 and 4 are respectively Bhola Nath and Gobardhan Lal. Gobardhan Lal is son of Maruan Lal and Bhola Nath is son of Dhannu Lal. They were interested in defeating the suit and have come to depose that actually there was an oral agreement between the parties that if any of them wanted to effect a transfer of his share the other co-sharers would be given an option to purchase the same before it could be given to a stranger. It is significant to note that this term according to the case of the defence, was not a term agreed upon by the parties subsequent to the partition. It was a condition to the partition itself. It is, therefore, expected that if the defence case were true, this term would have been incorporated in the registered document itself. No explanation has been given at all by either of these two witnesses as to why the parties considered not to include this term in the registered document. The evidence of these two witnesses, especially their statements in cross-examination, appear to be wholly unsatisfactory. No other evidence has been relied upon by Mr. Sinha in support of the defence case on this point, it has been fairly conceded by him that the onus heavily lies upon the defence to prove such fact and I have no doubt that the defendants have failed to discharge the same.

    5. Besides, the aforesaid additional term of agreement between the parties was one of the several conditions of the one transaction entered into by the family members for partitioning some of the properties and keeping some properties joint. As that transaction was effected by a registered document, I think that none of the parties thereto would be permitted to modify, add to or subtract from the terms included in the document by pleading an oral arrangement. For all these reasons, I hold that the defendants have not proved the additional term which they rely upon for defeating the present suit.

    6. Mr. Sinha has alternatively argued that the appellants had got the right of pre-emption under Section 22 of the Hindu Succession Act. He argued that Dhanu Lal father of defendants Nos. 1 and 25 died in 1958, that is, after passing of the Hindu Succession Act and as such defendant No. 1 can enforce the right of pre-emption mentioned in Section 22 of the Act, against defendants Nos. 25 to 28 and their vendees. Mr. Sinha has assumed, for the purpose of his argument, that after the death of Dhanu Lal, there was a separation between the defendants Nos. 1 to 5 on the one hand and defendants Nos. 25 to 28 on the other hand as mentioned in paragraph 3 of the plaint which has been not denied in the written statement. A question arises as to whether the provisions of Section 22 of the Act have any application to the present case.

    7. Section 22 of the Hindu Succession Act reads as follows:—

    “22. (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 of 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.

    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.”

    8. By use of the words “heirs specified in Class I of the Schedule” in Section 22(1) of the Act, it is clearly intended that this section should have no application to a case where the property devolves by rule of survivorship on surviving coparceners. Unless a case of inheritance is made out, it must be held that Section 22 will have no application. Mr. Sinha urged that as Dhanu Lal, father of defendants Nos. 1 and 25 died in 1966, it must be held that his interest devolved on defendants Nos. 1 and 25 by rule of inheritance as the sons are included in class I of the Schedule attached to the Act. In this regard Section 6 of the Act is relevant and is quoted below:—

    “When a male Hindu dies after the commencement of this Act, having at the time of his death an interest in a Mitakshara coparcenary property, his interest in the property shall devolve by survivorship upon the surviving members of the coparcenary and not in accordance with this Act.”

    9. The general rule of survivorship applying to Hindu Mitakshara families still holds good subject of course to cases which are covered by the provisions of Section 6 of the Act. The provision of proviso to Section 6 will be applicable only to such cases where the deceased left behind him surviving a female relative specified in class I of the Schedule or a male relative specified in that class who claims through such female relatives. It is not suggested by the appellants in the present case that Dhanu Lal died leaving behind any heir other than his two sons. I am, therefore, of the opinion that the proviso to Section 6 does not apply to the present case so as to defeat the rule of survivorship being applied to the parties. When Dhanu Lal died, his two sons took the entire interest by survivorship and as is admittedly the case now there has been separation between the two sons before the sale deed by defendants 25 to 28 was executed. Defendant No. 1 or his sons, therefore, cannot be permitted to invoke the benefit of Section 22 of the Act.

    10. There appears to be another difficulty in the way of the appellants in raising this question. Sub-section (2) of Section 22 of the Hindu Succession Act indicates that a party can enforce a right of pre-emption by making an application to that effect in a Court which has been explained in the Explanation to this Section. If a party intending to take the benefit of the right given under S. 22(1), files an application, the Court has to determine the amount of consideration for the intended transfer and the party is again given an option to get such a transfer from the co-sharer on such consideration or to refuse the same.

    11. If the party declines to purchase the property for the same amount, he has to bear the cost of the proceeding. No such application has ever been filed by any of the parties any where. This plea was not even raised in the Court below. It was for the first time in this appeal that the appellants have raised this point. Even in this Court no application has been filed for enforcement of such a right. In these circumstances, the plea has to be rejected.

    12. No other point has been raised in support of the appeal. In the result, therefore, the appeal fails and is dismissed with costs.

    13. S. Ali Ahmad, J.:— I agree.

    14. Appeal dismissed.

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    Bhola Nath Rastogi And Others v. Santosh Prakash Arya And Others
    (Apr 18, 1975)