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Ram Saran And Others v. Kanwal Singh And Others

Punjab & Haryana High Court
May 29, 1964
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Judgment Summary — P.C. Pandit, J.

Factual and Procedural Background

On 10 June 1960, Sarup Singh and his brother Rattan Singh executed a registered sale deed transferring 34 kanals and 12 marlas of agricultural land in village Sihi, District Gurgaon, to Ram Saran and his three brothers for Rs. 15,000/-. Kanwal Singh, a minor and son of vendor Sarup Singh, filed a preemption suit through his grandmother as next friend, claiming a superior right of preemption as the son of one vendor and nephew of the other, and alleging that the vendees were strangers and that the sale price of Rs. 15,000/- had not been actually paid nor fixed in good faith; it was also alleged that the market value was considerably less.

The vendees denied Kanwal Singh's parentage (i.e., that he was Sarup Singh's son) and alternatively contended that he was a coparcener with his father and thus not entitled to maintain the preemption suit in respect of his father's sale; they also alleged collusion and claimed the sale price and additional expenses (Rs. 400/- for stamp duty and registration) had been paid by them and should be recoverable if preemption were decreed.

The trial Court found for the plaintiff: it held that the plaintiff was the son of Sarup Singh, had a superior right of preemption, that Rs. 15,000/- was the market value and was fixed in good faith and actually paid, and that there was no evidence of benami sale, collusion, or coparcenary; the trial Court decreed the preemption subject to payment of Rs. 15,000/- to the vendees and left parties to bear their own costs. The vendees appealed; the Senior Sub-ordinate Judge (first appellate Court) upheld the trial Court's findings and dismissed the appeal with costs. The vendees then filed the present second appeal.

Legal Issues Presented

  1. Whether the plaintiff (Kanwal Singh) had a valid and superior right of preemption as the son of one vendor and nephew of the other and thus could succeed in the preemption suit.
  2. Whether the preemption suit was collusive or benami (i.e., instituted at the instance of the vendors or with the plaintiff as a mere figurehead), which would defeat the plaintiff's claim.
  3. Whether the trial Court and appellate Court erred in finding that the sale price of Rs. 15,000/- was fixed in good faith and actually paid and that this reflected the market value.
  4. Whether the vendees were entitled to recover Rs. 400/- expended on stamp duty and registration from the preemptor if preemption were decreed.
  5. Whether acquisition of the land by the Government during the pendency of the appeal prevents the grant of a decree of preemption to the plaintiff.

Arguments of the Parties

Appellants (Vendees) — Main Arguments

  • The plaintiff's suit was collusive and instituted at the instance of the vendors; the plaintiff was merely a figurehead because he was a minor (aged 14) and lacked knowledge of the transaction.
  • The plaintiff was a coparcener with his father and therefore could not maintain a preemption suit in respect of a sale effected by his father.
  • The sale price of Rs. 15,000/- had been actually paid by the vendees and they had incurred Rs. 400/- on stamp duty and registration, which should be reimbursed to them if the preemption succeeds.
  • During the pendency of the appeal, the land was acquired by the Government; relying on a Privy Council decision (Deo Nandan Prashad Singh v. Ram Behari Chowdhri), they argued that no decree for preemption should be granted because the title would only accrue on compliance with a decree.
  • Relied on a Bench decision (Smt. Kunti Devi v. Kharaiti Ram) to support the proposition that where a plaintiff shows no knowledge of the suit or the property, that indicates that the plaintiff is only a nominal claimant.

Respondent (Plaintiff / Preemptor) — Main Points as Found by Courts

  • The plaintiff asserted a superior right of preemption by virtue of his relationship to one vendor (son) and the other vendor (nephew), and claimed the vendees were strangers.
  • The plaintiff alleged the Rs. 15,000/- in the sale deed was not fixed in good faith and was not actually paid, and that the market value was much less (this was pleaded but the courts found otherwise).
  • Evidence was given that the plaintiff's next friend financed the litigation from her own funds; the plaintiff and his witnesses supported his parentage and entitlement to preemptive rights.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Smt. Kunti Devi v. Kharaiti Ram, Letters Patent Appeal No. 31 of 1950 (Khosla and Falshaw, JJ., 25 Nov 1952) Illustration of a case where a nominal plaintiff (an unmarried girl living with vendor grandfather) showed no knowledge of the suit or property, supporting a finding of collusion/nominal plaintiff. The appellants relied on this authority to argue collusion here. The Court distinguished it on the facts: in Kunti Devi the plaintiff's complete lack of knowledge was clear from testimony, whereas in the present case the plaintiff and his next friend gave credible evidence; thus the authority did not apply.
Ganga Dass v. Kanwal Singh (Regular Second Appeal No. 107 of 1962 / R.S.A. 107 of 1962) Referenced in connection with the question of recovery of registration expenses; the connected appeal mentioned the point and the learned Judge negatived it for want of cited authority. Mentioned as a connected appeal disposed on the same day; the Court noted that in that connected appeal the point about registration expenses had been negatived by the learned Judge because no authority was cited; nevertheless, in the present appeal the Court found merit to allow recovery of bona fide registration/stamp expenses as part of the bargain taken over by the preemptor.
Deo Nandan Prashad Singh v. Ram Behari Chowdhri, I.L.R. 44 Cal. 675 (Privy Council) Authority relied upon to argue that acquisition of land during appeal prevents decree of preemption because title accrues only on compliance with the decree. The Court rejected the applicability of this Privy Council decision: it held that under Order 20, Rule 14, Civil Procedure Code, 1908, title of the preemptor accrues from the date of payment of purchase money, and since the preemptor had paid within time, title had vested before acquisition; also noted differences in statutory language (Section 24 CPC 1882) on which the Privy Council decision was based.

Court's Reasoning and Analysis

The Court proceeded by addressing the factual findings of the two lower Courts and the legal contentions raised on appeal, applying standard principles of burden and evaluation of evidence.

  1. Findings of Fact and Onus of Proof:

    The Courts below had found as facts that the plaintiff was the son of Sarup Singh and thus had a superior right of preemption; that the sale price of Rs. 15,000/- was fixed in good faith, actually paid and reflected market value; and that there was no evidence of benami sale, collusion, or that the plaintiff was a coparcener. The appellate Court emphasized the heavy onus on the vendees to prove collusion or that the plaintiff was merely a figurehead. The present Court observed that those findings of fact had not been shown to be vitiated by any error of law and are binding in second appeal.

  2. Collusion / Nominal Plaintiff Issue:

    The appellants relied on circumstances they said supported collusion: plaintiff's minority and educational status, the short interval between sale and suit, alleged vendors' lack of funds, and subsequent vendor transactions to raise money. The Court examined the evidence: the plaintiff's next friend testified she financed the litigation from funds of her deceased husband (P.W.4); the vendees' attempt to introduce documents to show vendors furnished money was rejected by the lower appellate Court under Order 41, Rule 27 CPC because no ground was shown for additional evidence. The Court distinguished the Kunti Devi authority on the facts, noting that in that case the plaintiff's complete ignorance manifested collusion, whereas here the evidence did not support such a conclusion. Thus the vendees failed to discharge the heavy onus to prove collusion.

  3. Parentage / Identity Issue:

    The vendees pointed to two documents with inconsistent dates of birth (Exhibit P.2 birth register entry showing a date of birth for Jit Singh as 3 Sept 1945, and Exhibit D.W.4/1 school register entry showing the plaintiff's date of birth as 1 June 1951). The trial Court considered both; the Senior Sub-ordinate Judge considered the school entry and oral evidence. The Courts believed the plaintiff's evidence and rejected the defendants' evidence. The present Court treated this as a factual finding and declined to disturb it absent error.

  4. Payment of Registration / Stamp Expenses (Rs. 400/-):

    The trial Judge stated there was no evidence on record that the vendees paid the registration/stamp expenses; the Senior Sub-ordinate Judge did not discuss it. The present Court found merit in the vendees' contention because witness Mela Ram (P.W.2) deposed that the vendees incurred those expenses. The Court accepted that where a preemptor takes over the entire bargain, bona fide registration and stamp expenses incurred by the vendees should form part of that bargain and be borne by the preemptor. Consequently, the Court allowed recovery of Rs. 400/-, directing the preemptor to deposit that amount in the trial Court within four months.

  5. Acquisition by Government during Pendency:

    The appellants argued acquisition defeated preemption because the preemptor's title would accrue only on compliance with the final decree (citing Privy Council authority). The Court analyzed Order 20, Rule 14, Civil Procedure Code (1908) and held that the preemptor's title accrues from the date of payment of the purchase money. Since the preemptor complied with the decree by depositing the purchase price within time, title had vested in him prior to acquisition; hence acquisition did not prevent the decree. The Court further found the Privy Council authority inapplicable because it rested on different statutory language (Section 24 CPC 1882) and therefore did not control the present case.

Holding and Implications

Core Ruling: The appeal is partly accepted.

Direct consequences and specific directives:

  • The Court affirmed the findings that the plaintiff (Kanwal Singh) was the son of vendor Sarup Singh, had a superior right of preemption, that the sale price of Rs. 15,000/- was fixed in good faith and actually paid, and that there was no proof of benami sale, collusion, or coparcenary sufficient to defeat the plaintiff's claim.
  • The Court directed the preemptor to deposit an additional sum of Rs. 400/- (registration/stamp expenses) in the trial Court within four months from the date of the judgment. Failure to deposit the Rs. 400/- within the time directed will result in the suit being deemed dismissed.
  • If the preemptor deposits any additional amount subsequently found due within the prescribed time, the property would remain with him; but non-payment will lead to dismissal as above.
  • The Court left the parties to bear their own costs throughout.

The Court emphasized that no new legal precedent altering principles of preemption was laid down; rather, the decision rested on evaluation of the facts, application of the settled principle that the onus of proving collusion lies heavily on the party alleging it, and statutory interpretation of Order 20, Rule 14, C.P.C. (1908) as to when title accrues to a preemptor.

Appeal partly accepted.
Show all summary ...

P.C Pandit, J.:— On 10th June, 1960 by a registered deed Sarup Singh and his brother, Rattan Singh, sold agricultural land measuring 34 kanals and 12 marlas situate in village Sihi, District Gurgaon, to Ram Saran and his three brothers for Rs. 15,000/-. This sale led to a preemption suit filed by Kanwal Singh, minor son of Sarup Singh, one of the vendors, through his grand mother as his next friend. It was stated by the plaintiff that he had a superior right of preemption, being the son of one of the vendors and nephew of the other and the vendees being strangers. It was also alleged that the sale price of Rs. 15,000/- mentioned in the sale deed was neither actually paid to the vendors nor was it fixed in good faith and that the market value of the land was also considerably less.

2. The suit was resisted by the vendees, who denied that the plaintiff was the son of Sarup Singh. In the alternative, it was claimed by them that he was a coparcener along with his father and on that ground he could not maintain the suit for preemption regarding the sale made by his father. It was also pleaded that the suit was a collusive one and had been filed at the instance of the vendors themselves. It was further pleaded that the amount mentioned in the sale deed was actually paid by them to the vendors and besides that they had spent a sum of Rs. 400/- on stamp duty and registration expenses regarding this sale and to this amount also they were entitled in case the plaintiff's suit was to be decreed.

3. On the pleadings of the parties, a number of issues were framed.

4. The trial Judge came to the conclusion that the plaintiff was the son of Sarup Singh vendor, and had, therefore, a preferential right of preemption. It was also found that the sale price of Rs. 15,000/- was fixed in good faith and actually paid to the vendors. The market value of the land was also found to be Rs. 15,000/-. The learned Judge came to the conclusion that there was no evidence on the record to show that the plaintiff's claim was benami or his suit was collusive or that the plaintiff was a co-owner or a coparcener with his father, as alleged by the vendees. It was also found that there was no evidence to prove that the amounts of the stamp duty and registration fee were paid by the vendees. On these findings, the plaintiff's suit was decreed on payment of Rs. 15,000/- to the vendees. The parties were, however, left to bear their own costs.

5. Aggrieved by this decision, the vendees went in appeal before the learned Senior sub-ordinate Judge, Gurgaon. He also came to the conclusion that the plaintiff was the son of Sarup Singh and his right of preemption was, consequently, superior to that of the vendees. He further found that there was no evidence whatsoever on the record to come to the conclusion that the plaintiff brought this suit in collusion with the vendors or that he was a co-owner of coparcener with them. As a result, he dismissed the appeal with costs throughout. This led to the filing of the present second appeal by the vendees.

6. The first contention raised by the learned counsel for the appellants was that both the Courts below were in error in holding that the present suit was not instituted by the plaintiff at the instance of the vendors. He submitted that the circumstances of this case clearly-proved that Kanwal Singh was merely a figure head and the real plaintiffs were the vendors themselves. In this connection, he argued that the plaintiff was a minor aged 14 years and was reading in the 5th class. The pre-emption suit had been brought within about four months after the execution of the sale deed, since, the price of the land in dispute had greatly increased. The sale had been effected by both the brothers to redeem the previous mortgage with possession, which clearly showed that the vendors had no money with them. The decree was passed by the trial Court on 31st July, 1961 and the plaintiff had been given lour months' time to deposit the purchase money. The plaintiff had no funds with him and it were the vendors who raised the money for this purpose by mortgaging some property of theirs on 26th July, 1961 for Rs. 8,000/- and by selling, a part of it on 26th December, 1961 for Rs. 8,540/-. In view of all these circumstances, learned counsel argued that it should have been held that the plaintiff's suit was a collusive one and the plaintiff was merely a figurehead. For this sub-mission, he also relied on a Bench decision of this Court in Smt. Kunti Devi v. Kharaiti Ram etc., Letters Patent Appeal No. 31 of 1950, decided by Khosla and Falshaw, JJ. on 25th November, 1952.

7. Both the Courts below have found as a fact that the plaintiff's suit was neither benami nor collusive as alleged by the vendees. It is undisputed that unless the contrary is clearly established, it is to be presumed that the plaintiff is suing for his own benefit. The onus lies very heavily on the vendees to establish that the Suit had been instituted for the vendors' benefit, which, according to the Courts below, they have failed to prove in the present case. The mere fact that the plaintiff is a minor and the son of one of the vendors, does not show that the suit was for the benefit of the vendors. The plaintiff's next friend has appeared in the witness-box as P.W 4 and has sworn that she was financing the litigation with the money which she had got from her deceased husband. It is not proved on the record that the vendors had raised the money by mortgaging and selling a part of their property, because only an application under Order 41, Rule 27, Civil Procedure Code, had been made before the lower appellate Court to prove this fact by bringing on the record certain documents, but this application had been rejected by the learned Senior sub-ordinate Judge for the reason that no ground had been made out for producing additional evidence. The authority relied upon by the learned counsel has no application to the facts of the present case. There the learned Judges found that the plaintiff-preemptor was an unmarried girl living with the vendor, who was her grand father, and in the witness-box she stated that she did not know what was the area of the land in suit, what village was it situate in, who were the vendees and what was the price. From these facts, the learned Judges concluded that there could be no plainer indications of the fact that she knew nothing about the suit at all and her name had merely been borrowed by other persons for purposes of their own, or in other words she was not a plaintiff at all. Under these circumstances, the Courts below were right in holding that the vendees had failed to establish that the plaintiff's suit was a collusive one. This finding of fact has not been shown to be vitiated by any error of law and is, consequently, binding in second appeal.

8. The next contention raised was that the finding given by the Courts below that the plaintiff was the son of Sarup Singh was also wrong and reference in this connection was made to two documents, Exhibit P. 2, a copy of the entry in the birth register in which the date of birth of one Jit Singh son of Rim Sarup Singh was shown to be 3rd September, 1945 and Exhibit D.W 4/1, a copy of the entry in the register of the school from where the plaintiff got his education, and in which his date of birth was entered as 1st June, 1951.

9. It appears from the judgment of the learned Senior sub-ordinate Judge that no reference was made before him to Exhibit P. 2. He, however, did consider Exhibit D.W 4/1, apart from the other oral evidence produced by both the parties. The trial Judge on the other hand, considered both these documents. The Courts below have believed the evidence produced by the plaintiff and rejected the evidence of the defendants. The finding is clearly one of fact and no ground has been made for disturbing the same in second appeal.

10. It was then contended that the Courts below had erred in law in not awarding Rs. 400/- to the appellants, which they had spent towards the stamp duty, registration etc.

11. There is merit in this submission. The trial Judge, while disposing of this matter, as already mentioned above, stated that there was no evidence on the record to prove that these expenses were paid by the vendees. The learned Senior sub-ordinate Judge, however, has not discussed this question at all and has merely stated that no other point was pressed before him. There is the evidence of Mela Ram, P.W 2, who deposed that the expenses on the sale deed were incurred by the vendees. No ground has been shown as to why the statement of this witness should not be believed. The vendees had taken this point in the grounds of appeal before the learned Senior sub-ordinate Judge and it does not seem to be probable that they did not urge the same before him, because in the connected appeal (Regular Second Appeal No. 107 of 1962, Ganga Dass v. Kanwal Singh . R.S.A 107 of 1962., which was also disposed of on the same day), this point has been mentioned by the learned Judge but it was negatived on the ground that the learned counsel for the appellant had not cited any authority to the effect that the appellants were entitled to recover the expenses of registration. Since the preemptor is taking over the entire bargain from the vendees, I see no reason as to why he should not pay the expenses bona fide incurred by them on registration, stamp, duty etc., as a part of that bargain.

12. Lastly, it was contended that during the pendency of the appeal in this Court, the land in dispute had, admittedly, been acquired by the Government and, therefore, the plaintiff should not be granted a decree for preemption, since his right to the property would accrue only on the day of the compliance of the decree passed by this Court. The argument proceeded that since there was no land in existence now, no decree for preemption could be given. Reliance for this sub-mission was also placed on the Privy Council decision in Deo Nandan Prashad Singh v. Ram Behari Chowdhri . I.L.R 44 Cal. 675..

13. There is no merit in this contention. According to the provisions of Order 20, Rule 14, Civil Procedure Code, the title of the preemptor in the property accrues from the date of the payment of the purchase money. Admittedly, the decree passed by the Courts below had been complied with by the preemptor by making payment of the purchase price, within time. As a result, the title to the property in dispute vested in him and on the date of acquisition of this land, he was the owner thereof. If this Court finds that some more money has to be paid by him to the vendees, he shall have to deposit the same within the time prescribed, otherwise his suit will be dismissed. But in case he pays the additional amount within time, then the property would remain with him and it cannot be said that the title will accrue to him only from the date when he deposits the additional amount. The title vested in him much earlier, that is from the date, when he deposited the purchase money. The Privy Council authority relied upon by the appellants has no application to the facts of the present case. Moreover, it is based on the provisions of section 24 of the Civil Procedure Code 1882, the language of which is somewhat different from the provisions of Order 20, Rule 14, Civil Procedure Code, 1908.

14. In view of what I have said above, this appeal is partly accepted and the preemptor is directed to deposit the additional amount of Rs. 400/- in the trial Court within four months from today, failing which his suit will be deemed to have been dismissed. This amount will then be paid to the vendee-appellants. In the circumstances of this case, however, I will leave the parties to bear their own costs throughout.

Appeal partly accepted.