Nathusingh Ganpatsingh v. Narayansingh

1. Hanumansingh, the father of the respondents, Narayansingh and Bhagwansingh, brought a suit for pre-emption of field survey No. 124/2 of mouza Nandgaonpeth. He obtained a decree for pre-emption on payment of Rs. 200. On an appeal preferred by the defendants the claim for pre-emption was upheld by the second Additional District Judge, Amraoti, though the price of pre-emption was enhanced from Rs. 200 to 325. One of the defendants, Nathusingh, only has appealed, the other defendant being on the record as a pro forma respondent. Hanumansingh died before an appeal was made to this Court, and his sons Narayansingh and Bhagwansingh have been shown as respondents. They have preferred cross-objections with regard to the price, contending that the price of Rs. 200 fixed by the trial Court should be restored. Two questions are agitated in the appeal one is the right of Hanumansingh to claim pre-emption on the ground that he was a co-occupant, and the other, the price that should be fixed for preemption. The first question raises the questions of palki numbers and the new Berar Land Revenue Code of 1928. It has been found by the Courts below that originally the fields survey Nos. 124/1 and 124/2 were palki numbers, and according to the decisions in 9 NLR 16 (1913) 9 NLR 16 , 11 IC 862 and 14 NLR 51 1918 Nag 205 , 12 IC 447 , 14 NLR 51 there was no right of pre-emption in such cases, paiki numbers being recognised divisions in the same survey number within the meaning of S. 4(5), of the old Berar Land Revenue Code. These decisions however were made at the time when the old Code of 1896 was in force. S. 205 of that Code was as follows:

When the interest, or any part of the interest, of a co-occupant in any survey-number is transferred by sale, foreclosure of mortgage or relinquishment in favour of a specified person for valuable consideration, every other co-occupant in the same survey-number shall have a right of pre-emption.

2. The definition of survey number was given in S. 4(4) and the definition of a recognised division of a survey number in S. 4(5) of that Code.

3. It has been held in the two decisions cited above that holders of recognised divisions of a survey number are not co-occupants in that survey number within the meaning of S. 205 of the Code. In the present Code however of 1928 a preliminary S. 173 has been added to Ch. 14 relating to pre-emption. That section is as follows:

For the purposes of this chapter an ‘occupant in a survey-number’ means a person having the right of an occupant, whether in his sole right or jointly with others, in that survey number or in any portion of it.

4. It is particularly to be noted that according to the definition “occupant” means a person having the right of an occupant not only in a survey number, but in any portion of it. Similarly in S. 17???((1) it is laid down that, when an ??? in a survey number proposes to ??? the whole or any portion of his interest he may give notice of his intention to all other occupants in the survey number Again in S. 2, which is the section containing definitions, there is no definition of a recognised division of a survey number as in the former Code; but there is a definition of a sub-division of a survey number in S. 2(12). Again in S. 2 there is no definition of an occupant or co-occupant, but the definition of an occupant is given in S. 173, referred to above, and is different from the definition of an occupant under S. 4(14) of the Code of 1896. The definition of a holding in S. 2(5) of the present Code also differs from the definition of a holding in S. 4(10) of the former Code, and, what is still more important, S. 88 of the present Code empowers a Settlement Officer to sub-divide survey numbers and to apportion assessment among such sub-divisions of survey numbers; but it is nowhere laid down, as in S. 86 of the former Code, that such sub-divisions should be recognised as holdings or as recognised sub-divisions of survey numbers. The argument, therefore, at pp. 17 and 18 of 9 N.L.R 16 (1913) 9 NLR 16 , 11 IC 862 deduced from the definitions of holding, occupant and co-occupant, read with S. 86, has no force under the present Code. I therefore hold that the Legislature, when enacting the present Code of 1928, has not accepted the view laid down in that decision and has therefore added the words “any portion of a survey number,” referred to above, in S. 173 of the Code and has substituted a definition of a sub-division of a survey number in place of the former definition of a recognised division of a survey number. It seems clear that occupants of sub-divisions of is survey number must be co-occupants in the same survey number, and as such they have a right of pre-emption. I would therefore agree with the lower Courts and with the view expressed by Rao Bahadur Brahma in his Commentary on the Berar Land Revenue Code at p. 205, and hold that occupants of subdivisions of a survey number in Berar, even though such sub-divisions were formerly paiki numbers or recognised divisions of a survey number, have a right of pre-emption under S. 176 of the present Code of 1928.

5. As regards the second question, the appellant admittedly purchased the field below its market value, but he contends that he did so because there was some dispute as regards the title and he had to bring a suit. He claimed therefore that he should be allowed his costs of the suit and the expenses incurred in the litigation. This question has been considered in para. 7 of the judgment of the trial Court and again in para. 7 of the judgment of the lower appellate Court. It seems clear that the costs of the suit can certainly not be added to the price fixed. The appellant was free to purchase the field or not, and, if he purchased it knowing that he might have to incur litigation, he did so at his own risk and cannot saddle such costs on anyone who has a right of pre-emption. It was his duty under the Code to give notice of his intention to purchase, or it was the duty of the occupant to give notice of his intention to sell; and, had such a notice been given, the person entitled to claim pre-emption might not have exercised that right, knowing that it would involve him in litigation; but, where notice was not given and a sale was held, the purchaser, even though he had to incur costs in defending the title to the land, could not claim such costs from anyone who subsequently exercised his right of pre-emption.

6. The other contention raised by the learned counsel for the appellant in this regard was that at any rate under S. 183(2) of the present Code a fair consideration for the interest of pre-emption should be fixed. It was argued that in cases where no notice was given, as in the present case, the market value should be ascertained so as to fix the fair consideration. I am of opinion however that S. 183 cannot be taken by itself, but must be read with reference to the preceding sections; and I fail to see why a purchaser, who takes from an occupant in a survey number without notice, should in this respect be in a more favourable position than a purchaser taking from an occupant, who has given notice under the Code to the other occupants in the survey number. I would also refer to S. 182 of the Code, which lays down that the right of preemption includes the right to pre-empt for a fair consideration, and that an occupant may sue to enforce such a right on several grounds, one being, as stated in Cl. (a), in the case of a proposed sale under S. 176 that the price stated in the notice was not fixed in good faith. It is clearly contemplated in this section that an enhanced or fictitious price may be stated in the notice so as to defeat the claim of pre-emption. A case, such as the present where a price lower than the real value has been fixed, is not contemplated in the Code, presumably because such a price would not usually be fixed. Even however if a price lower than the real market value was fixed for some reason, namely because the purchaser was related to the occupant or was on very friendly terms, or, as in the present case, because there was a dispute with regard to the title and a possibility of litigation, there would be no ground for holding that the price was not fixed in good faith within the meaning of S. 182(1)(a).

7. It is to be remembered that pre-emption is primarily a right of substitution, and, if an agreement of sale has really taken place and a price has been fixed, the person entitled to pre-emption can claim the benefit of that agreement and can enjoy all conditions of the agreement including the price. It is only where the price has not been fixed in good faith that the Courts should go into the matter and determine the market value or fair consideration, the reason being that, as stated above, the price is usually not fixed in good faith so as to defeat the right of pre-emption. Obviously a price lower than the market value would not be fixed for this purpose and as stated above, such price if actually fixed would not be fixed in bad faith, but for some other reason. Also, as indicated above, I fail to see why the position, either of the occupant or his intending purchaser, should be in any way improved by the fact that the occupant has failed to give notice to co-occupants, as required by the Code. I cannot therefore accept the argument that in cases contemplated by S. 183(2) of the Code a price higher than that actually fixed between the intending vendor and purchaser can be fixed when the right of pre-emption is enforced by a co-occupant.

8. A reference was made to 30 All. 130 (1908) 30 All 130 , 5 ALJ 112 , 1908 AWN 42, but that, I think, is quite a different case. It is no doubt true that a person claiming a right of pre-emption must take the property pre-empted subject to encumbrances, whether he had notice of such encumbrances or not, but that is a very different thing from holding either that such a pre-emptor must compensate a person who purchased the property without notice for any costs which he incurred for litigation, or from holding that the pre-emptor must be made to pay any higher price than that actually fixed between the occupant and his purchaser. The appeal therefore fails on both grounds and must be dismissed: With regard to the cross-objections it may be noted that the difficulty in this case is that no price has been actually fixed for the field in suit, because it was included with other property, namely, a house, in the sale-deed, and one price was fixed for the whole property. The price fixed for the whole property was Rs. 600, and admittedly in another suit the appellant Nathusingh valued the house at Rs. 400. It follows therefore that the value of the field must be Rs. 200, as held by the trial Court in para. 7 of the judgment. The lower appellate Court however has found in para. 6 of the judgment that this valuation of the house for the purposes of the suit should not be taken as determining the real value of the house and that therefore the property should now be revalued in the present suit. The Judge has then held on the unsupported written statement of the defendants that the value of the house is only Rs. 200 and has valued the field at Rs. 325. I do not think there is any justification for this procedure on the part of the Additional District Judge and there is no reason to hold that the valuation of the house at Rs. 400 Was wrongly given by the appellant in the former suit. He valued it at Rs. 400 in the suit when the value of the field was not in question, and now, as noted by the Judge of the trial Court, he is naturally trying to enhance the value of the field and therefore trying to diminish the value of the house.

9. There is however no evidence to support the present valuation beyond his written statement and his own deposition as D.W 1, and such valuation cannot now be accepted. As noted above, I do not think that in a case like the present the market value of the field should be gone into, and, even though the price of the field was not separately fixed in the sale-deed, it must be held to have been fixed at Rs. 200 on the appellant's own valuation of the house in the former suit. I therefore allow the cross-objections and set aside the decree of the lower appellate Court in this respect and restore the decree of the trial Court. The appeal is therefore dismissed, and on the cross-objections the price to be paid by the plaintiff-respondents is again fixed at Rs. 200 as fixed by the trial Court. A period of two months from the date of this decree is allowed to the respondents to pay the price of pre-emption, failing which their claim will be dismissed. Costs of the appeal and of the cross-objections in this Court will be borne by the appellant. Costs of the appeal in the lower appellate Court will be borne by the appellants. Costs of the suit as ordered by the trial Court.

R.M/V.V

10. Order accordingly.