ORDER OF REFERENCE TO A FULL BENCH.
Phillips, J. — In this case the plaintiff is an ottidar of the plaint property. The jenmi granted a second mortgage, and in execution of a decree upon that mortgage 1st defendent's brother purchased the property subject to plaintiff's otti right. 1st defendant then sued for redemption of the otti and obtained a decree. Plaintiff now sues to enforce his right of pre-emption. The question for consideration is the nature of the rights of an ottidar, when the property, over which he holds the otti, is sold in Court auction.
In Cheria Krishnan v. Vishnu it was held that an otti mortgagee was entitled “to be fully informed what price he is to pay before he makes up his mind to buy” and that although he has notice of the sale by auction but fails to bid, he is not precluded from subsequently exercising his right of pre-emption. In Ammotti Hajee v. Kunhayen Kutti, a somewhat different view was taken and it was held that an ottidar in Malabar loses his right of pre-emption if he fails to bid at a Court sale of the land after having been specially invited to attend and exercise his right, and makes no offer to take the property for a long time after the Court sale. The only distinction between the two cases is that in the former the ottidar had only public notice of the sale, whereas in the latter he had had special notice. In Kanaran Nair v. Raman Nambia(3) this Court followed the ruling in Cheria Krishnan v. Vishnu although the ottidar had had special notice of the sale and distinguished Ammotti Haji v. Kunhayen Kutti on the ground that there may have been evidence in that case on which it could be held that the ottidar had been placed in a position to elect.
It is very difficult to reconcile these three decisions and I think it advisable that the question should be finally determined by a Full Bench, and I am further inclined to the opinion that the decision in Cheria Krishnan v. Vishnu goes too far. An ottidar is a mortgagee with a right of pre-emption. It is contended for respondent that pre-emption right of an otti mortgagee in Malabar is something higher than the right of pre-emption as ordinarily understood, it being a right based on custom. The right of an ottidar has been considered by Courts in Madras from 1854 onwards but the question of whether his right of pre-emption in was greater then the ordinarily recognized rights of pre-emption in other places does not appear to have been discussed. In Cheria Krishnan v. Vishnu however the learned Judges say that “the right of pre-emption is well understood. The otti mortgagee must pay for pre-emption whatever sum is bona fide offered to the jenmi for the purchase, if he has the offer made to him by the jenmi and is rightly informed of the circumstances in reference to the offer. If he does not pay such sum then his right of pre-emption is gone.”
In Mamali v. Kunhipakki Haji(4) the previous cases on the subject of otti were reviewed and it was held that the right of an ottidar consists in a right to elect when there has been an attempt on the part of the owner of the property to sell it to a third person, whether he will buy it for the same price as that offered by the third person or not. There would seem to be no difference between the right defined as above, and the ordinary right of preemption (as understood in Muhammadan and other law.)
When therefore the owner intends to sell the land by private treaty, the ottidar is entitled to come in and buy it at the same price, and according to Cheria Krishnan v. Vishnu and Vasudevan v. Keshavan, he is further entitled to have an offer to that effect from the owner of the property, although this further right is doubted in Mammali v. Kunhipakki Haji. When the property is to be sold by Court, it is an involuntary sale and presumably one contrary to the wishes of the owner. In such a case he cannot predict the price at which the property will be sold and consequently he cannot offer the property to the ottidar for a certain fixed price. If he is to offer it after the sale is completed, he will making an offer which may have the effect of upsetting a sale by Court even after it is confirmed. It is questionable whether it is desirable that the right of pre-emption should be allowed to that extent, unless it is clearly established that the right does go so far in Baji Nath v. Sital Singh, Mahmood, J., held that the right of pre-emption, whether claimed under Muhammadan Law, the compact of the Wajib-ul-ars or local usage and custom does not arise in respect of compulsory sales, and in this view followed Abdul Jabel v. Khelatchandra Ghose(5), Shaikh Ferasut Ali v. Ashootosh Roy Singh(6) and Sheikh Nuzmoodeen v. Kanye Jha(7). This aspect of the question does not appear to have been considered in relation to the pre-emptive rights of an ottidar in Malabar, but the arguments of Mahmood, J., in support of his view would equally apply to such rights. In equity the ottidar would be entitled to notice of the sale of property in which he has so large an interest, but I can see no ground for showing him any greater consideration. His right of pre-emption arises out of a contract between him and the owner, and when by order of Court the owner is prevented from intimating the exact amount of the sale price, he should in equity be deemed to have completed his part of the contract when he has informed the ottidar that a sale is to take place and has thus afforded him an opportunity of buying at the price which the property would properly fetch, assuming that the right of pre-emption arises in such cases. There is no question of his being driven to give a fancy auction price, as remarked in I.L.R, 5 Mad., 198, for he is not compelled to buy—can cease bidding whenever the bidding has reached the amount which he is willing to pay for the land.
We therefore refer the following questions for decision by a Full Bench:—
(1) Does the right of pre-emption of an otti mortgagee arise in the case of an involuntary sale?
(2) If so, is he entitled to be informed of the sale price before he can be called upon to exercise or forego his right, or is mere notice of the auction sale sufficient?
Ayling, J.—I agree to the proposed reference: and am inclined to share my learned brother's view as to the applicability of the right of pre-emption in relation to enforced sales.
[This Second Appeal came on for hearing on the 4th day of March 1918, in pursuance of the above Order of Reference, before the Full Bench as constituted above.]
Messrs. C.V Ananthakrishna Aiyar and K.P Ramakrishna Aiyar for the Appellant.
Mr. C. Madhavan Nair for the Respondent.
OPINION
The Chief Justice.—It is strange that in none of the cases in this Court dealing with the ottidar's right of pre-emption in Malabar, Cheria Krishnan v. Vishnu, Vasudevan v. Keshavan, Kanharankutti v. Uthotti, Ammotti Haji v. Kunhayen Kutti, Kanaran Nair v. Raman Nambiar or Mammali v. Kunhipakki Haji has the question been considered how far such a right can be exercised in the case of Court and Revenue sales consistently with the provisions of the statute law regulating such sales. Both in Bengal and in Northern India, where cases of pre-emption are much more numerous than they are here, it appears to be well settled that it cannot, in the absence of statutory provision being made for its exercise, as in the case of some revenue sales in the United Provinces. In Baij Nath…(Defendant); v. Sital Singh…(Plaintiff).*, Mahmood, J., after reviewing the authorities, states: “It may therefore be taken as a rule of law settled by a long and uniform course of decisions that a compulsory sale such as a sale in execution of decree or a sale under an authoritative order of the revenue authorities for arrears of Government revenue, does not render pre-emption enforcible, whether such right is claimed under Muhammadan Law, the terms of Wajib-ul-arz or on the ground of local custom or private contract; but that such compulsory sales being the creation of statute law do furnish occasion for the exercise of the pre-emptive right where such right is provided, subject to the rules and restrictions prescribed by those Legislative enactments themselves.” And he goes on to refer to the provisions of Sect. 310 of the Code of 1882 and other local statutory provisions. The other learned Judges did not differ from Mahmood, J., on this point, but on the question whether such special statutory provisions had been made in the particular case, and the law as laid down by him was accepted as settled in Kanhai Lal v. Kalka Prasad.
On a careful consideration of the question, I agree with the law as laid down by Mahmood, J. I find it quite impossible to reconcile the statutory provisions of the Civil Procedure Code as to sale in execution of decrees with the ottidar's right of pre-emption as now claimed. Sect. 60 of the Code makes immoveable property belonging to the judgment-debtor liable to attachment and sale in execution of a decree, and Sect. 65 provides that where property has been sold in execution of a decree and the sale has become absolute it is to vest in the purchaser. Under O. 21, R. 92, it becomes absolute where no application is made under Rr. 89, 90 or 91 of the Code of Civil Procedure, 1908, or where such application is made and disallowed. The rules in question do not provide for the exercise of a right of pre-emption.
There is a very limited recognition of the right of preemption in R. 88, and if any further recognition had been intended, it would have been expressly provided.
Having regard to the course of the decisions and the importance of the right of pre-emption in Northern India, I can only infer that the omission to make such provision was deliberate. In Manchester Ship Canal Company v. Manchester Racecourse Company, it was contended on the one side and not denied on the other that a right of pre-emption was quite incompatible with a sale by auction.
In these circumstances, we are bound, in my opinion, even at this late stage to uphold the objection taken and to answer the questions in the negative.
Sadasiva Aiyar, J.—I entirely agree and have nothing to add.
Spencer, J.—I also agree.
S. S.Questions answered in the negative.