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Mohanlal v. Rasula
Judgment Summary — Nawal Kishore, J.
Factual and Procedural Background
This is a first appeal by the plaintiff Mohanlal of Ladnu arising from a suit for pre-emption dismissed by the District Judge, Nagaur. On 16 March 1943 Ganpatia and others executed a mortgage by conditional sale of the disputed house at Ladnun in favour of Rasula and his son Hasan for Rs. 1,000, with a redemption period of two years and an interest stipulation. The two-year period expired on 16 March 1945, but no overt act converting the mortgage into a sale appears to have occurred until the mortgagees obtained a Patta for the property on 6 June 1947. Mohanlal filed a suit for possession by pre-emption on 12 August 1947, alleging the disputed house touched his house to the north. The defendants (Rasula for himself and as guardian of Hasan) resisted, claiming a superior right of pre-emption on the ground that they had purchased another house from Chhagna, Malia and Sadasukh on 27 January 1944 which adjoined the disputed house on the west and south, and also pleaded limitation. The District Judge found the suit within limitation but held the defendants had a superior right of pre-emption and dismissed the suit. The present appeal challenges that outcome.
Legal Issues Presented
- Whether the vendees (Rasula and son) could improve their position after the date of the sale of the pre-empted property and thereby acquire a superior right of pre-emption (i.e., is the crucial date the date of sale or the date of suit).
- Whether the sale-deed Ex. D-1 executed by Chhagna, Malia and Sadasukh in favour of Rasula and his son had been proved on the record.
- Whether, if Ex. D-1 were proved, the house purchased by Rasula adjoined (touched) the disputed house.
- Whether the plaintiff's suit for pre-emption was barred by limitation (i.e., when did the limitation period begin to run for converting the mortgage into a sale and for instituting the pre-emption suit).
Arguments of the Parties
Appellant's (Plaintiff Mohanlal) Arguments
- The appellant contended that Rasula's purchase from Chhagna on 27 January 1944 occurred after the date of the mortgage/conditional sale of the disputed property (16 March 1943) and therefore Rasula could not be deemed to have a superior right of pre-emption.
- The appellant challenged the proof of execution of Ex. D-1, arguing that the Registrar's endorsement alone was legally insufficient proof of execution (citing 1942 Nag. 84).
- The appellant disputed the finding that the house purchased by Rasula adjoined the disputed house.
- The appellant implicitly relied on authorities supporting the proposition that the date of sale is the crucial date for determining pre-emption rights (the opinion notes reliance, by the appellant's counsel, on 1942 Pesh. 45).
Respondent's (Defendant Rasula) Arguments
- The respondents maintained they had a superior right of pre-emption because they purchased a house from Chhagna, Malia and Sadasukh on 27 January 1944 which the court below found to adjoin the disputed house on the west and south.
- The respondents relied on the registration of Ex. D-1 as proof of its execution and argued that, in any event, co-ownership of Chhagna and Sadasukh meant the admission of execution by Chhagna would suffice as to the relevant ownership interest.
- The respondents also argued the plaintiff's suit was time-barred, asserting that the condition in the mortgage became absolute on 16 March 1945 and that the plaintiff should have sued within the limitation period (the respondent urged application of Article 10 of the Limitation Act as was argued below).
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| 91 P.R. 1909 | Held (Full Bench) that the date of sale is the only crucial date for determining pre-emption rights (view later overruled). | The court notes this earlier Full Bench view and that Rattigan, J. dissented; but treats it as overruled by later authority (1941 Lah. 433). |
| 124 P.R. 1907 | Held that a vendee may better his position by other acquisitions between the date of the sale and the institution of the suit, thereby defeating a pre-emptor. | Referenced as part of the contrary line of authorities supporting the proposition that a vendee can improve his position post-sale. |
| 1941 Lah. 433 (Full Bench) | Authoritative pronouncement expressly overruling 91 P.R. 1909; held that the date of sale is not the only crucial date and a vendee may defeat a pre-emptor by acquiring rights before the suit. | The court relies on this Full Bench decision as authoritative for the proposition that right of pre-emption must subsist at the date of suit and that a vendee can improve his status up to the date of adjudication. |
| 47 All. 424 and 48 All. 616 (Allahabad) | Consistent with the Full Bench of the Lahore High Court: a pre-emptor must have a subsisting right at the date of the suit and a vendee may, by acquisition, defeat that right. | Used as corroborative authority showing consistency of view across High Courts supporting the court's conclusion. |
| 1934 Oudh 803 | Supports view that a right of pre-emption can be defeated by legitimate acquisitions by the vendee before suit. | Listed among authorities aligned with the conclusion adopted by the court. |
| 1947 M.L.R. 45 | Similarly supports the proposition that a vendee's post-sale acquisitions can defeat a pre-emptor. | Relied upon as part of the body of supportive authorities. |
| 1932 P.C. 57 (Privy Council) | Approved the view that acquisition of a share by a vendee before institution of suit could defeat pre-emption; also indicated the reasoning applies where acquisition occurs any time before adjudication. | The court treats this Privy Council approval as affirming that a vendee may improve his status before suit or adjudication so as to defeat a pre-emptor, and uses it to reject the appellant's contrary contention. |
| 1942 Pesh. 45 | Authority supporting the proposition that the crucial date is the date of sale (contrary to the mass of other authorities). | The court notes this is the only authority cited by the appellant for that proposition but observes it is contrary to the majority of High Court authorities and does not accept it as controlling. |
| 33 Cal. 537 (P.C.) | Privy Council held that evidence of due registration may itself be evidence of the execution of a document. | The court cites this authority to support the view that registration of Ex. D-1 may be sufficient proof of execution, countering the appellant's reliance on 1942 Nag. 84. |
| 1942 Nag. 84 | Held that the Registrar's endorsement is legally insufficient proof of execution (view cited by appellant). | The court acknowledges this authority but prefers the Privy Council view in 33 Cal. 537 and treats registration as evidence of execution for present purposes. |
Court's Reasoning and Analysis
The court structured its analysis by first addressing the legal question whether a vendee could improve his position after the date of the sale of the pre-empted property.
On that point the court surveyed competing authorities. It explained that earlier jurisprudence (91 P.R. 1909) had held the date of sale to be decisive, but that this view had been expressly overruled by the Lahore Full Bench in 1941 Lah. 433, which held that a vendee may acquire rights after the sale (and before adjudication) that put him on an equal footing with the pre-emptor and thereby defeat the claim. The court noted similar consistent holdings in the Allahabad decisions and other High Court authorities and observed that the Privy Council in 1932 P.C. 57 approved the reasoning that post-sale acquisitions by the vendee may defeat a pre-emptor, including acquisitions made before adjudication. The court treated the contrary Peshawar authority (1942 Pesh. 45) as inconsistent with the mass of authorities and not persuasive.
The court also interpreted section 7 of the Marwar Pre-emption Act, observing that the section's language ("Any person entitled to a right of pre-emption may bring a suit to enforce such right") indicates the right must be in existence when the suit is instituted. From this the court concluded the plaintiff can lose his right if the vendee's rights have improved and the plaintiff's own right has deteriorated before the suit was filed.
On the question of proof of execution of Ex. D-1, the court reviewed evidentiary facts: the sale deed purported to be executed by Chhagna, his son Maliya and Sadasukh, but the defendants and vendors were not called to testify and only D.W.4 Sonia stated he was present when Chhagna executed the sale-deed. The District Judge had taken registration as sufficient proof of execution. The appellant challenged that approach relying on 1942 Nag. 84, but the court referenced Privy Council authority (33 Cal. 537) holding that due registration may be evidence of execution. The court further reasoned that Chhagna and Sadasukh were co-owners; accordingly, even if the registration proved execution only as to Chhagna, it would suffice in the circumstances because co-ownership without partition meant their ownership extended to every portion of the house.
Regarding whether the purchased house adjoined the disputed house, the court accepted the finding of the court below that the Rasula purchase touched the disputed house to the west and south. The respondent produced a plan showing the situation of the house; that plan's correctness was admitted by the appellant's counsel during the appeal proceedings. A comparison of measurements in the plan with those in the sale deed supported the lower court's finding.
On the limitation point, the court rejected the submission that the condition in the mortgage automatically became absolute upon expiry of the two-year term on 16 March 1945 so as to start the limitation running from that date. The court held that an overt act is required by the mortgagee to convert the mortgage into a sale (for example, obtaining a Patta or filing suit), and until such overt act occurs the mortgage cannot be said definitely to have terminated and the limitation period will not begin. In this case the court identified the obtaining of the Patta on 6 June 1947 as that overt act; counting limitation from that date the suit filed on 12 August 1947 was within time. The court held Article 120 of the Limitation Act applied (not Article 10, as had been held below).
Holding and Implications
Final Holding: The appeal is dismissed. The court concluded that the vendees (Rasula and his son) had acquired a superior right of pre-emption before the institution of the suit, and accordingly the plaintiff's suit for pre-emption could not succeed. The dismissal was with costs.
Implications:
- The direct effect is that the plaintiff's suit for possession by pre-emption is unsuccessful and the decree in favour of the defendants (Rasula and son) is affirmed.
- The court applied and relied upon existing authorities (including the Full Bench of the Lahore High Court and the Privy Council) to hold that a right of pre-emption must subsist at the date of suit and may be defeated by lawful acquisitions by a vendee before the suit or adjudication. The opinion did not pronounce a novel legal doctrine beyond applying these authorities to the facts of the case.
Nawal Kishore, J.:— This is a first appeal by the plaintiff Mohanlal of Ladnu and arises out of a suit for pre-emption which was dismissed by the learned District Judge, Nagaur.
2. On 16th of March, 1943 Ganpatia and others mortgaged by conditional sale the house in dispute situated at Ladnun in favour of Rasula and his son Hasan for Rs. 1000/- at Rs. 1/9/- per cent per mensem on account of interest. It was stipulated in the mortgage deed that in case the mortgagors failed to redeem the mortgage by repaying the mortgage money within two years, the house will be deemed as having been sold to the mortgagees. This period of two years expired on 16th of March 1945 but nothing seems to have transpired on that day or thereafter till 6th of June 1947 when the mortgagees obtained a Patta for the house in dispute. On 12th of August 1947, Mohan Lal sued for possession of this house by pre-emption on the ground that it touched his house towards the north. The defendant Rasula for himself and as the guardian of his son Hasan resisted the suit and pleaded that he had a superior right of pre-emption as while the plaintiff's house touched the house in dispute on the back, his house touched it both on the west and the south. He also pleaded that the suit was barred by limitation. The two important issues arising out of these pleadings were issues Nos. 1 and 2. The learned District Judge found that though the suit was within limitation, the defendants had a superior right of pre-emption. He accordingly dismissed the suit.
3. The defendants' plea as regards their having a superior right of preemption was based on the allegation that they had purchased a house from Chhagana, Malia and Sadasukh on 27th of January 1944 and that this house touched the house in dispute towards the west and the south. Three important questions were agitated in connection with this allegation in the Court below:—
(1) That execution of the sale-deed Ex. D-1 by Chhagana and others in favour of Rasula and his son had not been proved on the record.
(2) That even if the execution of the aforementioned sale-deed was held to have been proved, the house purchased by the defendants did not adjoin the house in dispute.
(3) That in any case, the vendees were not competent in law to improve their position after the date of the sale of the house in dispute.
4. Lengthy arguments have been addressed at the Bar in connection with the above mentioned questions and a large number of authorities cited on the last mentioned point. While the first two questions are questions of fact, we propose to deal with the third question first. It raises an interesting point of law but the correct position does not appear to be in doubt at this time of the day. At one time the view was that where a case for pre-emption is well-founded with reference to the state of things which existed at the time of sale, that cause of action viewed as a valid ground of claim cannot be lost or affected by reason of a new circumstance coming into existence after the sale. There was a Full Bench judgment incorporating the above view reported as 91 P.R 1909 1.. Rattigan, J. however wrote a dissenting judgment. This view was contrary to the view which prevailed in 124 P.R 1907 2., where it was held that a vendee can better his position, as for instance, by other acquisitions which give him an equal right with the pre-emptor between the date of the sale in dispute and the institution of the pre-emption suit. So far as the Lahore High Court is concerned, there is no point in pursuing the history of this matter as an authoritative pronouncement is contained in a Full Bench judgment of that Court reported as 1941 Lah. 433 3.. In this judgment, 91, P.R 1909 was expressly over-ruled and it was held that it cannot be said that the date of sale is the only crucial date for the purpose of determining the right of the pre-emptor to oust the vendee or that it prohibits a vendee from defeating the right of a pre-emptor in any legal manner that may be available to him at any later period. The Allahabad view as reported in 47 All. 424 and 48 4. All. 616 5. has consistently been on the same lines as that taken in the Full Bench judgment of the Lahore High Court. The principle of law on which it is based is that the plaintiff must have a subsisting right of pre-emption not only on the date of the sale but also on the date of the suit and if before institution of the suit, the vendee acquires an interest which puts him on an equal footing with the plaintiff, he can defeat the plaintiff's right and the suit cannot be decreed. It was recognized that a right of pre-emption could be defeated by legitimate methods known to law and one of these methods was to obtain a preferential or equal right by acquisition of some interest in the property in dispute or of some other property. To the same effect are also 1934 Oudh 803 and 1947 6. M.L.R 45 7.. This view was approved by their Lordships of Privy Council in 1932 P.C 57 8.. In the case before them, it was contested that the vendee was at the time of the suit a co-sharer in the village and that the acquisition of the share after the pre-emption sale but before the institution of the suit was effective to defeat the claim for pre-emption. Their Lordships went on to hold further that the same reasoning should be applicable in the case of a share-acquired at any time before the ad judication of the suit. The only authority cited by the learned counsel for the appellant in favour of the proposition that the crucial date in such matters is the date of the sale, is reported as 1942 Pesh. 45 9. and it was sought to be supported on the ground inter alia that if any other date than the date of the sale were to be taken, the whole law of pre-emption could be made a nullity. While this view is contrary to the mass of authorities of all the High Courts, it may be pointed out with respect that it is open to the vendee in law to take advantage of every weapon available to him to defeat a person whole sole object is, in the words of 1941 Lah, 433 (1) to unsettle a transaction legally entered into. The further observation in this judgment is that their Lordships of the Privy Council did not declare in 1932 P.G 57 (6) that there was anything fundamentally wrong in a vendee improving his status subsequent to the sale in order to ward off a pre-emptor. In view of the above, there seems to be no escape from the conclusion that the plaintiff-pre-emptor can lose his rights by the deterioration of his own right and the appreciation of the vendee's rights before the suit is brought. Under the Marwar preemption Act, there can hardly be any doubt or difficulty inasmuch as according to section 7, the plaintiff can enforce his right of pre-emption only if it is in existence at the date of the suit as is clear from the following words with which the section begins:—
“Any person entitled to a right of pre-emption may bring a suit to enforce such right.”
This clearly signifies that the right must exist when the suit is instituted. In the circumstances, the contention of the learned counsel for the appellant that since Rasula purchased his house from Chhagna on 27th of January 1944 which is after the date of the sale of the pre-empted property, he should not be deemed to have a superior right of pre-emption must be rejected as without any force.
5. The next question which has been argued is that the sale-deed, Ex. D. 1, had not been proved to have been executed, and accordingly the question whether the vendee had come to acquire a superior right of pre-emption to that of the plaintiff was of academic importance. It may be pointed out that Ex. D-1, the sale-deed in favour of Rasula and his son purports to have been executed by Chhagna, his son Maliya and one Sadasukh. The defendant Rasula has not gone in the witness-box nor have the vendors or the attesting witnesses been produced. D.W 4 Sonia is the only witness who refers to this matter & all he stated is that he was present when Chhagna executed the sale-deed in favour of Rasula. The learned District Judge was under the impression that D.W 3 Ganpat had also identified Chhagna's signature on the sale-deed but that is incorrect. Even the statement of D.W Sonia does not carry matters very far. The learned District Judge held the execution of this document proved principally on the ground that it had been duly registered and that the registration of a document was sufficient proof of its execution. The learned counsel for the appellant has questioned the correctness of this view and urged that the endorsement by the Registrar of a document is legally insufficient proof of the execution of that document and cited 1942 Nag. 84 10. in support of this view. As is clear from a note in Monir's Commentary on the Evidence Act (3rd Ed. page 552) several other courts have also taken the same view, but the Privy Council has definitely held that the evidence of due registration may itself be evidence of the execution of a document. See in this connection 33 Cal. 537 11. (P.C). The learned counsel for the appellant when faced with this view urged that before the Registrar only Chhagna appeared and admitted execution of the document but not Sadasukh. We do not know who this Sadasukh is but it is clear that Chhagna and Sadasukh were co-owners in this property and in the absence of partition, their ownership extended to every portion of the house. Accordingly, even if the registration of the document may be held to be proof of its execution only qua Chhagna, so far as this case is concerned it will not make any difference and Rasula will still be held to have acquired a superior right of pre-emption provided, of course, this house adjoined the house in dispute.
6. The last question which has been argued in this appeal is that the house purchased by Rasula did not adjoin the house in dispute.
7. It has been found by the court below that the house purchased from Chhagna and others touched the house in dispute towards the west and the south. The learned counsel for the respondent has placed on the record a plan showing the situation of the house purchased by Rasula after the sale of the house in dispute and its correctness has been admitted by the learned counsel for the appellants in the petition preferred by him during the pendency of this appeal. A comparison of the measurements mentioned in the plan with those stated in the sale deed shows that the finding of the court below that the house purchased by Rasula touched the house in dispute towards the west and the south is correct. In the circumstances the contention of the learned counsel for the appellant to the contrary has not been substantiated.
8. The learned counsel for the respondent wanted to support the decree passed in his favour by arguing that the plaintiff's suit was barred by time. It was a case of a mortgage by conditional sale which came into existence on 16th of March 1943. According to a stipulation in the mortgage-deed, the property was to be deemed to have been sold to the mortgagees if it was not redeemed within two years. The period of two years expired on 16th of March 1945. It was accordingly urged that since the suit had not been filed within One year from this date according to Article 10 and was actually filed on 12th of August 1947 it was barred by time. The learned counsel contended that the condition should be deemed to have become absolute automatically on 16th of March 1945 when the period of two years stipulated in the mortgage deed expired. This, however, is not a correct view inasmuch as in order to convert the mortgage into a sale, it is incumbent on the mortgagee to resort to some overt acts in the nature of a suit etc. and until this is done, the mortgage cannot definitely be said to have terminated and until that happens, the period of limitation for the institution of a suit for pre-emption will not start running. In this case, the overt act on the part of the mortgagee to which the mortgagors seem to have submitted was the obtaining of a Patta on 6th of June 1947 and counting the period of limitation from the date, the suit is within time. To such a case it is Article 120 of the Limitation Act which will supply and not Article 10 as held by the learned District Judge. Accordingly, in our opinion, the suit has rightly been held to be within time.
9. As a result of the view taken by us, since the vendees had acquired a superior right of pre-emption before the institution of the suit, this appeal fails and is hereby dismissed with costs.
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