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Case Number

Second Appeal No. 83 of 1960, against order of Addl. Dist. J., Poonch

Advocates

Ishwar Singh
for Appellant
L.N.Sharma
for Respondents.

Judges

Hon'ble Sh. Justice K.V. Gopala Krishnan Nair

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Smart Summary

Structured Summary of the Court's Opinion

Factual and Procedural Background

This second appeal concerns a suit for pre-emption initiated by Bhagwan Das (the original plaintiff) challenging a sale. Two brothers, Chand Lal and Bhimsen, executed a single sale deed dated 26 March 1958. Chand Lal purported to sell his separate plot of 6 kanals and 5 marlas to Mir Mohd. (the first respondent), and Bhimsen purported to sell his separate plot of 4 kanals and 4 marlas to Abdul Karim. Although different parcels were sold by different vendors to different vendees, the transactions were recorded in one sale deed and the total sale price was stated as a consolidated sum of Rs. 2,500.

Bhagwan Das brought a suit to pre-empt the sale of Chand Lal's 6 kanals and 5 marlas to Mir Mohd. Mir Mohd. (the vendee) pleaded, among other things, that the suit was not maintainable because it amounted to partial pre-emption. The trial court held the suit incompetent as one for partial pre-emption and dismissed it. On appeal, the Additional District Judge at Poonch reversed the trial court, finding the suit was not for partial pre-emption. Mir Mohd. (the vendee) brought the present second appeal challenging that reversal.

Legal Issues Presented

Whether the suit is barred by the rule against partial pre-emption — i.e., whether the right of pre-emption can be exercised in respect of a part of a sale where multiple sales (or portions) are recorded in a single deed and the purchase money is expressed as a consolidated sum.

Arguments of the Parties

Appellant / Vendee (Mir Mohd.)

The vendee pleaded that the plaintiff's suit was not maintainable because it was a suit for partial pre-emption.
Appellant's learned counsel argued that because the sale price for both parcels was stated as a consolidated sum (a lump sum of Rs. 2,500), the bargain embodied by the single sale deed was indivisible and therefore the rule against partial pre-emption should apply.

Plaintiff (Bhagwan Das)

The plaintiff instituted the suit to pre-empt the sale of the 6 kanals and 5 marlas (the part sold by Chand Lal to Mir Mohd.).

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Ram Nath v. Badri Narain, ILR 19 All 148 (Full Bench, Allahabad)	Held that when the shares of each vendee in the property sold are specified, it is immaterial whether the proportion of the purchase money payable by each vendee is specified; the right of pre-emption attaches to the specifically earmarked property.	The court cited this as the contrasting view (Allahabad Full Bench) that supports divisibility where shares of property are specified even if purchase-money proportions are not specified.
Kesar Singh v. Panjab Singh, 66 Pun Re 1896	Proposition that the solution depends on the intention of the parties at the time of sale, which must be gathered from the contents of the deed.	The court relied on this principle to frame the inquiry: whether the deed evinces an intention to effect distinct and separate sales.
Mohd. Shafi v. Allah Din, AIR 1934 Lah 429	Expresses the Punjab view: where the purchase money is paid in one lump without specification of amounts by different vendees, the transaction is to be regarded as a single, indivisible bargain for purposes of pre-emption even if shares of land are specified.	The court summarized this precedent as articulating the strict Punjab line of authority and considered its underlying reasons when comparing them to the facts of the present case.
Ghulam Qadir v. Ditta, AIR 1945 Lah 184 (Full Bench, Lahore High Court)	Held that specification of shares of property does not render a sale divisible if the sale is for a consolidated price and the vendor can recover the whole price from any vendee; such a sale remains indivisible.	The court used this authority to explain the Punjab reasoning that a consolidated price and the vendor's ability to call the whole price from any vendee support treating the transaction as one indivisible sale.

Court's Reasoning and Analysis

The Court began by restating the nature of the right of pre-emption: it is a right of substitution for the vendee, not a right of re-purchase, and the pre-emptor must "step into the shoes" of the original vendee — taking the bargain in its entirety or not at all. The court explained the policy behind the rule against partial pre-emption: preventing a pre-emptor from taking the best portion of a property and leaving an inferior remainder with the vendee.

The Court qualified the rule: it applies only where the transactions, although contained in one deed, cannot reasonably be broken up or separated. Conversely, where two distinct and separate sales are embodied in a single deed, each independent sale may be pre-empted separately without offending the rule.

The opinion then outlined two established lines of authority. The Allahabad Full Bench (Ram Nath) treats specified shares of property as sufficient to render the sale divisible even if purchase money proportions are unspecified. The Punjab/Lahore line (Mohd. Shafi and Ghulam Qadir) takes a stricter approach: where a consolidated price is stated and the vendor can call the entire price from any vendee, the transaction is one indivisible bargain despite specification of shares.

Applying the foregoing legal principles to the sale deed in question, the Court examined the deed's contents to determine the parties' intention. The Court found the following pertinent facts in the deed:

Two different vendors (Chand Lal and Bhimsen) sold two separate parcels of land; each vendor had no interest in the other's parcel.
Each vendor sold his own separate property to a different vendee (Chand Lal to Mir Mohd.; Bhimsen to Abdul Karim).
The two vendees were unrelated and not responsible for each other's purchase money; neither vendee could be called upon to pay the price for the other's parcel by the respective vendor.
The sole complicating feature was that the sale price for both parcels was expressed as a single consolidated sum (Rs. 2,500), without breakdown per parcel in the deed.

The Court held that none of the Punjab/Lahore rationales operated to render the sales indivisible in this case. The vendor–vendee relationships were separate and independent: a vendor could only look to his own vendee for the price of his own property; vendees were strangers to one another; and the vendors did not have a joint interest such that the transaction could be treated as a single sale as far as the vendors were concerned.

Therefore, even though the price was stated in a lump sum, the rest of the deed's content pointed strongly to two distinct bargains. The Court observed that the absence of an explicit apportionment of the consolidated price in the deed might have been a deliberate omission (possibly to defeat a prospective pre-emptor), but that such a manipulation did not override the clear intention to effect two separate sales. The court emphasized that the governing inquiry is the real intention of the parties as gleaned from the deed.

Having concluded that the parties intended two separate bargains, the Court held that the rule against partial pre-emption did not apply to the present suit. The Court thus agreed with the Additional District Judge's conclusion that the suit was not one for partial pre-emption, although the Court reached that conclusion for reasons different from the lower appellate court.

Holding and Implications

APPEAL DISMISSED.

Implications:

The dismissal upholds the Additional District Judge's finding that the plaintiff's suit is not barred as a case of partial pre-emption; the trial court's contrary conclusion is overturned.
On the facts of this case, where different vendors sold separate parcels to different vendees (who were strangers inter se) and each vendor could only look to his own vendee for the price, a consolidated or lump-sum recital of price in a single deed did not render the sales indivisible for pre-emption purposes.
The Court made no order as to costs, stating that the state of the law was somewhat uncertain when the appeal was preferred.
The decision is narrowly grounded on the deed's contents and the intention of the parties as found by the Court. The opinion compares and distinguishes competing lines of authority (Allahabad Full Bench vs. Punjab/Lahore cases) rather than purporting to overrule them; thus, no sweeping new precedent was declared beyond the application of established principles to the specific facts before the Court.

Judge(s): K.V. Gopalakrishnan, J. (authoring); S. Murtaza Fazl Ali, J. concurred. Result noted: "Appeal dismissed."

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Mir Mohd. v. Mehta Bhagwan Das And Another

K.V Gopalakrishnan Nair, J.:— This second appeal arises out of a suit for preemption instituted by the appellant against the respondents in the Court of Subordinate Judge at Poonch.

2. Two brothers, Chand Lal and Bhimsen executed a sale deed dated 26th March, 1958 in favour of Mir Mohd. (first respondent) and one Abdul Karim. Each of the vendors purported to sell his own separate property: land of an extent of 6 kanals and 5 marks which belonged to Chand Lal was sold by him to Mir Mohd., and a parcel of land measuring 4 kanals and 4 marlas which was owned by Bhimsen was sold to Abdul Karim. Although different parcels of land were sold by two different vendors to two different vendees, the transactions were embodied in a single sale deed and the sale price was stated to be a consolidated sum of Rs. 2,500/-. The plaintiff, Bhagwan Das who is a brother of the vendors brought) a suit to pre-empt the sale of 6 kanals and 5 marlas of land by Chand Lal to Mir Mohd. The defendant, Mir Mohd., pleaded, inter alia, that the suit was not maintainable, being one for partial pre-emption.

3. The trial Court tried this as a preliminary issue and came to the conclusion that the suit was incompetent as it was one for partial preemption. It, therefore, dismissed the suit. On appeal to the Addl. District Judge at Poonch, the decision of the trial Court was reversed on the finding that the suit was not for partial pre-emption. Mir Mohd., the vendee-defendant, has now come up in second appeal challenging the correctness and validity of the decision of the Addl. District Judge.

4. The only question that falls for determination in this appeal is whether the suit is hit by the rule against partial pre-emption. A right of pre-emption is not a right of re-purchase either from the vendor or the vendee but is one of substitution for the vendee in the original sale. The pre-emptor-plaintiff can only seek to step into the shoes of the original vendee: he has, therefore, to take the bargain in its entirety or not at all.

5. If he does not ask for the same property purchased by the vendee for the same price paid by the vendee, he cannot succeed in his action to pre-empt the sale. The principle of denying the right of pre-emption, except as to the whole of the property sold, is that by breaking up the bargain the pre-emptor would be at liberty to take the best portion of the property and leave the worst part of it with the vendee.

6. The rule therefore applies only to those transactions which, while contained in one deed, cannot be broken up or separated; it cannot be applied to a case where two distinct and separate transactions of sale are embodied in one sale deed. When each of the transactions is an independent sale by itself, a pre-emptor must be able to preempt each, such sale or one of them only as he may choose. This will not involve any attempt on the part of the pre-emptor to seek to take the best portion of the property sold and leave the worst part of it with the vendee.

7. The reason of the rule would not therefore exist in a case where a single deed contains two distinct and separate bargains of sale. To illustrate: if A sells half of his land to B and the other half to C and it is stipulated that each of them is to pay a thousand rupees as sale price of his share, there will be two different sales to two different persons by A, and a pre-emptor will be entitled to preempt the sale in favour of either B or O and take half of the land on payment of the sum of Rs. 1000/- specified as the price therefor.

8. There can be no doubt or difficulty in such a case. But difficulty arises when A sells specified shares of his land to B and C but does not stipulate the price to be paid by each of them and is content to stipulate that the sale price of the entire property sold to both of them is Rs. 2000/-. Here, the shares of the land sold are specified but the purchase money payable by each of the vendees remains unspecified. Could a pre-emptor in this case seek to pre-empt the share sold to B alone? Would he be offending against the doctrine of partial pre-emption if he seeks to do so? A full Bench of the Allahabad High Court) in Ram Nath v. Badri Narain, ILR 19 All 148, has held that it is immaterial whether the proportion of the purchase money found or to be found by each of the vendees is or is not specified in the sale deed and that when the share of each vendee in the property sold is specified, the actual property to which the right of pre-emption is attached is earmarked and specified in the sale deed.

9. But the Punjab Chief Court and later the Lahore High Court have consistently held for several decades that unless there is specification of shares qua land as well as qua purchase money the sale cannot be counted as divisible and that a pre-emptor is obliged to take the bargain in its entirety.

10. It is necessary to ascertain the reason on which the strict view has been founded. In Kesar Singh v. Panjab Singh, 66 Pun Re 1896, it is pointed out that:

“the solution of the question depends upon the intention of the parties at the time of sale, and this can only be gathered by a careful consideration of the contents of the deed.”

11. If it can be gathered that the intention of the vendor was to effect two or more distinct and separate sales, any one of those sales can well be pre-empted without coming within the mischief of the rule against partial pre-emption. But the Punjab view has been that distinct and separate sales cannot reasonably be predicated when the sale deed specifies only the share of each vendee in the property sold but not the share of the purchase money payable by him. The argument in support of this view has been well put in Mohd. Shafi v. Allah Din, AIR 1934 Lah 429, as follows:

“It is no doubt true that it is mentioned in the sale deed that the two vendees were to take the property in equal shares, but this does not make any difference, for there was no specification of the amount contributed by each vendee, and a perusal of the deed shows, that so far as the vendor was concerned it was a single and indivisible bargain, and not two distinct and divisible transactions which for the sake of convenience had been written on one piece of paper. It has been held in a long series of cases, decided by the Punjab Chief Court and this Court during the last 50 years, that for purposes of pre-emption a sale transaction is regarded as indivisible in those cases, where the purchase money is paid in one lump sum without any specification of the amount paid by the various vendees, and the mere fact that the shares to be taken by the vendees respectively are specified in the sale deed does not alter the nature of the transaction, it being at most an arrangement among the purchasers inter se, which does not affect the vendor.”

12. The same position has been further emphasised by a Full Bench of the Lahore High Court in Ghulam Qadir v. Ditta, AIR 1945 Lah 184, thus:

“It would make no difference if the shares of the various vendees, if they happened to be more than one, were specified as long as the sale was for a consolidated price and it was open to the vendor to call upon all the intending purchasers to perform their contract jointly and to recover the whole of the price from any one of them. Specification of shares in such a case could not make such a contract of sale to be divisible or to consist of a number of transactions embodied in a single document. The position might be materially different if the price of all the specified shares is also separately fixed and the vendor is bound to recover the price mentioned for each share from each vendee separately.”

13. It will be seen that one of the reasons given in support of the Punjab view is that so far as the vendor is concerned, the transaction of sale is one and indivisible, the specification of shares in the property purchased by the vendees being merely a matter of arrangement among the vendees inter se with which the vendor is in no way materially concerned.

14. The other reason given is that it is open to the vendor to recover the whole of the consolidated price from any one of the vendees, it being a matter of indifference to him as to which vendee or which combination of vendees actually pays the price stipulated in a lump in the sale deed. The same reasons would seem to avail if there are more than one vendor, provided the interest of the vendors in the property sold is joint.

15. In that case, the vendors will be taken to be a single entity even as the several vendees would be taken to constitute a single entity when, from the point of view of the vendor, it could be said that there has been only a single transaction of sale. The position would seem to be the same if instead of merely specifying the shares the area of the land sold to each of the vendees by a vendor is specified in the sale deed which however does not specify the proportionate share of the purchase money to be borne by each of the vendees.

16. But none of the reasons which have been advanced in support of the Punjab view can apply to a case where it cannot reasonably be said by the vendor that the bargain is a single transaction of sale and that the specification of the share or extent of the property purchased by each of the vendees is a matter of mere arrangement among the vendees inter se, or where the vendor cannot upon any of the vendees to pay up the price of the entire property sold under the sale deed. These reasons have been put forward in the process of ascertaining the intention of the parties at the time of the sale and to show that the intention could not have been to make distinct and separate bargains of sale although they are all incorporated in one sale deed.

17. But if from a careful consideration of the contents of the sale deed it can be predicated that the intention of the parties at the time of the sale was to make as many bargains of sale as there are vendees, none of the Punjab rulings can come in the way. When the intention of the parties at the time of the sale can be clearly gathered in a given case it may not be necessary for deciding that case to choose between the Allahabad view and the Punjab view. We may, therefore, turn to the contents of the sale deed in question.

18. The sale is of two different plots of land by two persons, Chand Lal and Bhimsen. Chand Lal has no interest in the property sold by Bhimsain, nor has the latter any interest in the property sold by the former. Thus, each of the vendors has sold his own separate property. Except their junction in a single sale deed, there is no other community relevant for the purposes of this case between them. The same is the case with the vendees.

19. The property of Chand Lal is sold to Mir Mohd, first respondent and the property of Bhimsain is sold to Abdul Karim. The two vendees are absolute strangers. One of them is certainly not interested in paying the price of the land purchased by the other, nor can any one of the two vendors call upon any of the vendees to pay the price of the entire property sold under the sale deed. In tact, Chand Lal can only look for payment to Mir Mohd., to whom his property was sold. Likewise, Bhimsain, the other vendor, can call upon only Abdul Karim to pay him the price of his property.

20. There is no vendor-vendee relationship between Chand Lal and Abdul Karim, nor is there any such relationship between Bhimsain and Mir Mohd. Each vendor in this case has his separate property and his own separate vendee. All this goes to establish that there have been two sales embodied in a single sale deed: one sale at 6 kanals and 5 marlas of land by Chand Lal to Mir Mohd and another sale of 4 kanals and 4 marlas of land by Bhimsain to Abdul Karim. But the only complicating circumstance is that one consolidated price of Rs. 2500/- has been fixed for the sale of the parcels of land of both the vendors.

21. Though the subject-matter of the sale to each vendee is distinct and separate, the price payable by each vendee has not been separately specified. This circumstance has been seized upon by the appellant's learned counsel to urge that the bargain contained in the sale deed is not divisible. We are not satisfied that this contention ought to prevail. Every other circumstance and recital in the sale deed point to the existence of two separate and distinct sales in favour of two different vendees by two separate vendors.

22. Merely because the price of the property sold to both the vendees is mentioned in a lump, the transaction does not seem to become single and indivisible. It might well have been that there was an understanding between the vendors and the vendees as to what portion of the consolidated price each one of them should receive and pay. The omission to embody that arrangement in the sale deed might have been actuated by an attempt to over-reach or forestall a prospective pre-emptor.

23. As we already stated, the crux of the matter we have to get at is what really was the intention of the parties at the time of the sale and once we are clear in our mind that the intention was to effect two distinct and separate sales, the manipulation contrived by the parties in the form of a consolidated sale price cannot dissuade us from holding that there have been two different bargains of sale.

24. The facts of the Punjab cases cited before us on behalf of the appellant are far removed from the facts of the case before us. The reasons given in the Punjab cases do not apply to the facts of the instant case. We are of the opinion that in a case like the present it is not only open but also necessary in the interests of justice for a Court to ascertain the price payable in respect of the separate sale sought to be pre-empted by the plaintiff. Our conclusion, therefore, is that the suit is not one for partial pre-emption and we agree with the conclusion arrived at by the Addl. District Judge, Poonch, though for reasons different from his.

25. In the result, the appeal is dismissed, but without any order as to costs in view of the somewhat uncertain state of the law when this appeal was preferred.

26. S. Murtaza Fazl Ali, J.:— I agree.

AE/H.G.P

27. Appeal dismissed.

Mir Mohd. v. Mehta Bhagwan Das And Another

Structured Summary of the Court's Opinion

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant / Vendee (Mir Mohd.)

Plaintiff (Bhagwan Das)

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Mir Mohd. v. Mehta Bhagwan Das And Another

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