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Gobardhan Bar v. Guna Dhar Bar

Calcutta High Court
May 3, 1940
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Case Summary — Mukherjea, J.

Factual and Procedural Background

The opinion concerns a Rule directed against an appellate judgment of the Subordinate Judge, Second Court, Midnapur dated 30 May 1939, which reversed an order of the Munsif, First Court, Tamluk made under s. 26F of the Bengal Tenancy Act, 1885, as amended by the Bengal Tenancy (Amendment) Act, 1938.

Material facts (as stated in the opinion): An occupancy holding recorded in interest No. 79 of the finally published record-of-rights of mouzâ Nilkanthea belonged jointly to Indra Mull and Barada Dei. One plot in that holding (C.S. plot No. 1050) was sold by these tenants to two persons, Gobordhan Bar (the petitioner) and his brother Nakul Bar. On 9 August 1938 Nakul Bar executed a kabâlâ in respect of his one-half share of plot No. 1050 in favour of the opposite party; the document was registered on 24 August 1938.

The Bengal Tenancy (Amendment) Act, 1938 came into force on 18 August 1938. The petitioner (a co-sharer of the vendor) presented an application within four months of the date of sale to exercise rights of purchase under s. 26F as amended by the 1938 Act. The opposite party resisted the application on two grounds: (1) because the kabâlâ was executed before the amending Act came into force the old Act should apply and the immediate landlord (not co-sharer tenants) had the right of pre-emption; and (2) the application was not maintainable because the other co-sharer tenants were not joined as parties.

The trial Court overruled both objections and allowed the petitioner's application. The Subordinate Judge on appeal reversed that decision, giving effect to both points taken by the opposite party. The petitioner challenged the appellate decision by obtaining the present Rule.

Legal Issues Presented

  1. Whether the relevant date for determining which statutory regime (the pre-amendment Bengal Tenancy Act or the Bengal Tenancy (Amendment) Act, 1938) applies is the date of execution of the transfer document (kabâlâ) or the date of registration of that document, and consequently whether the immediate landlord or the co-sharer tenants have the right of pre-emption.
  2. Whether a co-sharer tenant who seeks to exercise the right of re-purchase under s. 26F (as amended in 1938) is required to make the other co-sharers parties to the proceeding (i.e., whether non-joinder of other co-sharers renders the proceeding defective).

Arguments of the Parties

Opposite Party's Arguments

  • The kabâlâ was executed on 9 August 1938 when the old Bengal Tenancy Act was still in force; therefore the pre-amendment s. 26F applied and the immediate landlord—not the co-sharer tenants—had the right of pre-emption.
  • The petitioner's application was not maintainable because the other co-sharer tenants had not been made parties to the proceeding.

Petitioner's Arguments

  • The petitioner (a co-sharer) applied within four months after the sale seeking to exercise rights under s. 26F as amended by the 1938 Act; the trial Court allowed the petition, rejecting the opposite party's contentions.
  • Through counsel (Mr. Das) the petitioner challenged the appellate Court's reversal on both grounds described above.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Budhai Sardar v. Sonaullah Mridha Used to illustrate that the right created by s. 26F (re-purchase/right of purchase) attaches an obligation on the purchaser to hand over the property on receiving the price, comparing it with the Mahomedan right of shâfâ. The Court invoked the authority to explain the nature of the re-purchase/right-of-purchase under s. 26F and to show that the obligation arises when the property passes to the purchaser.
Begam v. Muhammad Yakub Cited as an authority holding that, under some decisions of Mahomedan law, a sale may be deemed complete for pre-emption purposes when the price is paid and possession delivered. The Court noted these authorities in a comparative discussion of when a sale is complete under Mahomedan law, but considered the discussion immaterial because under s. 26C (Bengal Tenancy Act) transfer requires registration.
Abdulla Avjal Momin v. Ismail Mugal Foda Another authority cited for the proposition that under Mahomedan law a sale may be treated as complete once the price is paid and possession delivered. Similarly, the Court recorded the existence of conflicting judicial opinion on Mahomedan law but rejected its relevance for the present case because statutory registration rules govern transfers of occupancy holdings.
Nareshchandra Datta v. Gireeshchandra Das Cited for the proposition that although a registered document takes effect (as between transferor and transferee) from the date of execution, as regards third parties the deed is effective only from the date of registration. The Court relied on this principle to support its conclusion that the date of registration is the material date for determining which statutory provisions apply and for when pre-emption rights arise vis-à-vis third parties.

Court's Reasoning and Analysis

The Court proceeded in stages and applied statutory and comparative legal principles to the narrow facts before it:

  1. The Court acknowledged the general rule that the amending Act of 1938 was not retrospective and could not take away or impair vested rights under the old section; the rights created by the amending Act could only arise in respect of transfers taking place after it came into force.
  2. The decisive question was whether rights of pre-emption/re-purchase arise at the date of execution of the sale instrument or only upon registration of that instrument. If execution controlled, the pre-amendment rights would prevail; if registration controlled, the amending Act could apply to a transfer registered after 18 August 1938.
  3. The Court held that the date of registration is the material date. The reasoning was:
    • A transfer of an occupancy holding under the Bengal Tenancy Act can be effected only by a registered document; title does not pass to the transferee until registration is effected (statutory requirement under s. 26C was emphasized).
    • Under the old s. 26C the registering officer would not register a deed unless landlord's fees and process fees for service of notice on the landlord were paid; under the old s. 26F the immediate landlord had two months after service of notice to present an application for pre-emption. Therefore, no completed transfer (and no landlord's right to apply) would exist until registration.
    • Consequently, if the document was registered after the amending Act came into force, the new provisions (including the new s. 26F and a referred s. 25C in the opinion) would apply, attracting the procedure that required notice upon co-sharer tenants and provided them a period (four months) to apply for re-purchase.
  4. The Court observed the Bengal Government had passed an Ordinance (the Bengal Tenancy Ordinance) effective 31 May 1938 which extended the time for registration of transfers relating to occupancy holdings and made the benefits of the amending Act available in certain cases where presentation deadlines fell between 31 May and 8 September 1938. The Court used this to show legislative intent that the amending Act should apply to transfers registered after it came into force in specified circumstances.
  5. The Court discussed comparative Mahomedan-law authorities about when a sale is complete for pre-emption but considered them immaterial because, under s. 26C, transfers of occupancy holdings are statutorily effective only upon registration.
  6. The Court relied on s. 47 of the Indian Registration Act, 1908 (as discussed in the cited case Nareshchandra Datta v. Gireeshchandra Das) to affirm that, although between the transferor and transferee a registered deed may relate back to its execution date, as regards third parties its effectiveness is the date of registration. This supported the conclusion that the appellate Court's view on the first point could not be sustained.
  7. On the second point (non-joinder), the Court held there is no provision in the Bengal Tenancy Act requiring a co-sharer tenant who seeks to exercise re-purchase under amended s. 26F to make other co-sharers parties. The requirement for joint application found in s. 188 related to co-sharer landlords under the old regime and could not be applied to the amended s. 26F. Hence non-joinder of other co-sharers did not render the proceeding defective.

Holding and Implications

Core Ruling: The Rule is made absolute; the judgment of the lower appellate Court is set aside and the trial Court's decision is restored.

Consequences for the parties (direct effect):

  • The petitioner's application (to exercise rights under s. 26F as amended by the 1938 Act) is vindicated by restoring the trial Court's order.
  • The petitioner was awarded costs in the Rule; the hearing-fee was specifically assessed at one gold mohur.

The opinion focuses on statutory interpretation and application to the facts at hand and does not announce any explicit broader rule purporting to create a new precedent beyond its application to the present facts. It explains the legal principles the Court applied in reaching its decision.

Show all summary ...

Mukherjea, J.:— This Rule is directed against an appellate judgment of the Subordinate Judge, Second Court, Midnapur, dated May 30, 1939, reversing an order of the Munsif, First Court, Tamluk, made in a proceeding under s. 26F of the Bengal Tenancy Act, 1885, as amended by the Bengal Tenancy (Amendment) Act, 1938. There is no dispute about the material facts which lie within a narrow compass. There was an occupancy holding recorded in interest No. 79 of the finally published record-of-rights of mouzâ Nilkanthea, which belonged jointly to Indra Mull and Barada Dei. One of the plots comprised in the said holding, which is C.S plot No. 1050, was sold by these tenants to two persons, namely, Gobordhan Bar, the petitioner, and Nakul Bar, his brother. On August 9, 1938, a kabâlâ was executed by Nakul Bar in respect of his one-half share of plot No. 1050 in favour of the opposite party, and the document was registered on August 24, following. On August 18, 1938, the Bengal Tenancy (Amendment) Act, 1938, came into force, and the petitioner, who was a co-sharer of the vendor, presented an application within four months of the date of sale, claiming to exercise his rights of purchase under s. 26F of the Bengal. Tenancy Act, 1885, as amended by the Act of 1938. The application was resisted by the opposite party purchaser on two grounds. It was contended in the first place that the kabâlâ being executed before the amending Act came into force, even though it was registered after that, the provisions of the old Act would apply and the rights of preemption could be exercised by the immediate landlord and not by the co-sharer tenants. The second point taken was that the application was not maintainable in the absence of the other co-sharer tenants as parties to the proceeding.

The trial Court overruled both these contentions and allowed the petitioner's, prayer. On appeal, the decision was reversed, and the lower appellate Court gave effect to both the contentions urged by the opposite party and rejected the petitioner's application.

It is against this order that the present Rule has been obtained. Mr. Das, who has appeared in support of the Rule, has challenged the propriety of the decision of the lower appellate Court on both the points.

On the first point the Subordinate Judge was of opinion that, as in this case the kabâlâ was executed on August 9, 1938, when the old Act was still in force, a right of pre-emption vested in the immediate landlord under s. 26F of the Act as it stood before the amendment in 1938, and this right could not be taken away by the amending Act of 1938, which came into force only on August 18, 1938; the co-sharer tenants likewise could not claim any right of pre-emption under the amending Act as the transfer took place before and not after the amending Act became operative.

It is perfectly true that the amending Act of 1938 is not retrospective in its operation. It does not take away or impair any vested right that accrued under the old section and the rights which it creates could arise only in respect of transfers taking place after it came into force. The question, however, for our consideration is whether the rights of pre-emption would accrue in favour of the immediate landlord under the old section or, in favour of the co-sharer tenants under the new, as soon as the conveyance is executed, or would they come into existence only when the document is registered. If the date of execution is the material date, the decision of the Subordinate Judge is right and neither the landlord would lose any rights which he acquired on the date of the execution of the deed, nor would the co-share tenants gain any advantage which was created by an Act not then in existence. If, on the other hand, the rights could not arise unless there was a completed transfer by registration of the sale deed, it is the co-sharer tenants who would be entitled to exercise the right of pre-emption and not the immediate landlord.

I am inclined to hold that the date of registration is the material date and both under the old section as well as under the new, no right could possibly accrue in favour of the landlord or the co-sharer tenants as the case may be, until the document of transfer was registered.

A transfer of an occupancy holding can be made only by a registered document, and no title would pass to the transferee unless registration is effected. Under the old s. 26C of the Act, the registering officer would not register a deed unless the landlord's fees and the process fees for service of notice on the landlord were paid by the vendee, and under the old s. 26F the immediate landlord had two months' time after the service of the notice under s. 26C, within which to present his application for pre-emption. Not only was there no valid or completed transfer till the document was registered, but, so long as it was not registered, the landlord's right to apply for pre-emption did not arise. If, therefore, the document was not presented for registration till after the replacement of the old section, there was no accrued right in favour of the landlord which could be said to have been saved by amending Act of 1938. Then again, as in the present case, if the document is registered after the new s. 26F came into force, the provision of the new s. 25C would certainly be attracted to it. The purchaser would not have to pay landlord's fees even though the kabâlâ was executed when the old s. 26C was still in force, and notice would have to be served upon the co-sharer tenants within four months from, the date of service of which they would have the right to come up and apply for re-purchase of the share. It is fairly clear from these sections that the intention of the legislature was that the provisions of the amending Act would be applicable in respect of transfers which were registered after the amending Act came into force, whereas the old Act would apply to cases where the document of transfer was registered at a time when the old Act was still, in operation.

It may be noted here that the Government of Bengal passed, an Ordinance known as the Bengal Tenancy Ordinance which came into force on May 31, 1938. By this Ordinance, the time for registration of documents of transfer relating to occupancy holdings was extended and the provisions of the amending Act were made available in cases where the last date for presentation of the document for registration expired any time between May 31, and September 8, 1938. These were documents executed admittedly when the old Act was in force, but the parties were given the privilege to wait till the amending Act became operative so that they might have the advantages of the provisions of the amending Act.

The view I am taking does not militate, in any way, with the general principles relating to the law of pre-emption. Under the Mahomedan law also, no right of pre-emption can arise unless the sale is complete and there is a total cessation of the vendor's right to the property. It may be pointed out here that the right of shâfâ as recognised by the Mahomedan law as well as the right of re-purchase created by s. 26F of the Bengal Tenancy Act are not rights of pre-emption in the sense in which they were used by the Roman lawyers. Pre-emption, according to Roman law, connoted an obligation on the part of the intending vendor to sell preferentially to the pre-emptor if he offered, as good conditions as any intending vendee. The right of purchase that is created by s. 26F of the Bengal Tenancy Act, like the right of preemption under the Mahomedan law, attaches an obligation to a particular status which binds the purchaser from the person obliged to hand over the property purchased to the obligee on receiving the price paid by him for it with or without additional compensation: Budhai Sardar v. Sonaullah Mridha* (1). The obligation can only arise when the property passes from the original owner to the purchaser. There is undoubtedly some conflict of judicial opinion as to when a sale under Mahomedan law becomes complete, and it has been held by some authorities that, for purposes of giving effect to the right of pre-emption, a sale would be deemed to be complete under Mahomedan law as soon as the price is paid and possession of the property delivered to the purchaser: Begam v. Muhammad Yakub (2); Abdulla Avjal Momin v. Ismail Mugal Foda (3). But this discussion is immaterial for our present purpose, as, under s. 26C of the Bengal Tenancy Act, the transfer can only be made by registered document and title cannot possibly pass to the transferee till registration is effected.

Much stress has been laid by the opposite party on s. 47 of the Indian Registration Act, 1908. It is undoubtedly true that as between the transferor and the transferee the registered document takes effect from the date of execution; and if there is a competition between two documents relating to the same property, both of which are registered, the one executed earlier in point of time will have priority, but as regards third parties the point of time at which the deed is to be effective is when it is registered: Nareshchdndra Datta v. Gireeshchandra Das (4). I hold, therefore, that the view taken by the lower appellate Court on the first point cannot be sustained.

On the second point also, I am of the opinion that the decision of the Subordinate Judge is wrong. There is no provision in the Bengal Tenancy Act which makes it necessary that the co-sharer tenant who seeks to exercise his right of re-purchase under s. 26F of the Act as amended in 1938 should make the other co-sharers parties to the proceeding. It was necessary in the case of the immediate landlord under the old s. 26F by reason of the provision of s. 188, which laid down that such applications must be made by all the co-sharer landlords jointly. The provision of s. 188 cannot be attracted to the present s. 26F and, as such, I hold that the non-joinder of the other co-sharer tenants would not in any way make the proceeding defective.

The result is that the Rule is made absolute, and the judgment of the lower appellate Court is set aside and that of the trial Court restored.

The petitioner will have his costs in this Rule—the hearing-fee being assessed at one gold mohur.

Akram, J.:— I agree.

Rule absolute.
P.K.D