Lindsay, J.:— We have heard a great deal of argument in the case and a number of cases have been cited before us, all of them cases from Oudh. One decision of the Privy Council has also been cited before us, namely, the case of Abdul Wahid Khan v. Saluka Bibi.
After due consideration we have both come to the conclusion that the plaintiff was not entitled to preemption in these cases. We have not come to this conclusion on precisely identical grounds and, therefore, separate judgements are being delivered.
These cases are governed by the Agra Preemption Act, and according to that Act, a right of pre-emption means the right of a person on a transfer of immovable property to be substituted in the place of the transferee by reason of that right.
The only transfers which give occasion for the exercise of the right of pre-emption are transfers by sale and foreclosure. Sale, for purposes of the Preemption Act, means a sale as defined in the Transfer of Property Act, 1882.
In these cases the plaintiff claims her right to pre-empt by reason of the execution and registration of the two documents of the 13th of September, 1923, and in order to ascertain whether these are sales which are pre-emptible under the Act we have to look at what was the substance of these transactions.
At the time these deeds were executed the property was in the possession of third parties to whom it had been conveyed by a Hindu widow. The transferee, that, is to say Kalyan, was to provide the funds required for the prosecution of the suit necessary to recover the property. As we have pointed out, he joined as a plaintiff in the suit and was to get possession, through the court, of the property mentioned in the deed if and when a decree for possession was made in favour of himself and his transferor Paras Ram. But this decree for possession might never have been passed, in which case the transferee, that is, Kalyan, would have lost his money and got nothing for it. To quote the Words of the Privy Council in Saluka Bib's case—
“If the defendant succeeded and the suit was dismissed there would have been no property to be sold.”
To me, therefore, the correct view seems to be that the transfers made by the deeds of the 13th of September, 1923, were merely transfers of a share of the chance of success in a suit which was subsequently to be brought. The purchaser, that is, Kalyan, knew that the title of his vendor was uncertain, dependent upon the result of a suit which itself was uncertain. He new that Paras Ram was not in a position to pass a proprietary interest in the property unless and until he had successfully vindicated his title as reversioner after the widows by avoiding the sale which had been made by them. The proprietary interest in these properties was at that time in the alienees from the widows. It is true that the sales by the widows were voidable and that these alienees had not an indefeasible title? but all the same, unless and until their title was set aside in favour of a superior title in Paras Ram, the ownership of these properties was vested in the alienees.
Kalyan knew all these facts and he took the risk of the suit not being decreed, and consequently the sum which he undertook to pay was not the price of immovable property sold to him but the price he was prepared to give for the chance of the success of Paras Ram and himself in the subsequent suit.
In a sale under section 54 of the Transfer of Property Act the proprietary interest is transferred on execution and registration of the sale-deed where the property is of the value of Rs. 100 and upwards. Here the proprietary interest in these lands could not have passed on execution and registration of the deeds of the 13th of September, 1923, and in fact no proprietary interest in these properties passed to Kalyan until the court gave a decree in favour of himself and Paras Ram on the 17th of April, 1924.
For these reasons I am of opinion that under the deeds of the 13th of September, 1923, there was no transfer of proprietary interest and, therefore, no case for the exercise of a right of pre-emption under the Agra Pre-emption Act, I hold, therefore, that these appeals ought to be allowed and that the decrees of the courts below should be set aside and it should be ordered that both suits brought by Musammat Desrani be dismissed with costs in all courts.
Sulaiman, J.:— I concur in the order proposed. It cannot be said that in all cases where the vendor is not in possession of the property which he purports to sell, the sale is not capable of pre-emption. If a registered document is executed and the transfer is for a price paid or promised, or part paid and part promised, and comes within the meaning of section 54 of the Transfer of Property Act, a sale is duly effected and the proprietary interest in the property passes, no matter whether the vendor is or is not in actual possession. A transfer of the property which has become vested in a reversioner on the death of a Hindu widow parses the proprietary title in it even though a suit may have to be instituted to recover actual possession. The vesting of such title is not postponed till the passing of a decree on which delivery of possession would be dependent. On the other hand, there may be cases where the cash price paid or promised is not the sole consideration for the transfer, but in addition thereto there is an undertaking by the vendee to fight out a litigation and to incur all its costs as wall as to run the risk of losing his money. In such cases that part of the consideration which is other than the cash price is not capable of exact valuation. It is, therefore, difficult to see how a pre-emptor can be given a decree for pre-emption of the property sold in such a way. In the present case the sale was effected in lieu of the costs of the litigation. If, taking the surrounding circumstances into consideration, one were to infer that part of the consideration was an undertaking by the vendee that he would fight out the case against third parties, then it is obvious that it was not a sale strictly for a cash price. Even though there was no such undertaking the transfer was in lieu of the costs of litigation, which were unknown and unascertainable in advance, and there was a risk involved. Under such circumstances it would be too much to suppose that the amount of the costs contemplated by the parties would be anything like the market value of the property if freed from all risk. It would be grossly unjust to give the plaintiff a decree for pre-emption after the suit has successfully terminated and the property has been recovered and all risks have disappeared. In my opinion a sale which is not in lieu exclusively of a cash price, or such price as can be definitely ascertained, is not capable of pre-emption.
By the Court.—Second Appeals Nos. 1197 and 1198 of 1925 are allowed, the decrees of the courts below are discharged and it is ordered that the plaintiff's claim in each suit be dismissed with costs in all courts.
Appeal allowed.