Supreme Court of India
RAGHUNATH (D) BY LRS.versusRADHA MOHAN (D) THR. LRS & ORS.
- Citation
- 2020 INSC 590
- Decided
- 13 October 2020
- Disposal
- Appeal(s) allowed
- Bench
- SANJAY KISHAN KAUL
Holding
The right of pre‑emption under the Rajasthan Pre‑Emption Act, 1966 is exercisable only once at the first occasion it arises; a waiver under Section 9 extinguishes the right for all subsequent transactions, rendering the 1974 suit barred by limitation.
Summary
The Supreme Court considered a suit filed in 1974 by a co‑sharer seeking to enforce his pre‑emptive right over a sale of a property in Ajmer. The property had previously been transferred in 1945, 1946 and on 5 Nov 1966, the latter after the Rajasthan Pre‑Emption Act, 1966 came into force. The issue was whether the one‑year limitation under Section 21 of the Act, read with Article 97 of the Limitation Act, starts afresh with each subsequent sale or only with the first sale after the Act, and whether a pre‑emptor who waives his right under Section 9 can revive it later. The Court held that the right of pre‑emption is a “very weak” right that can be exercised only once, at the first occasion it arises, and that waiver under Section 9 extinguishes it for all later transactions. Consequently, because the plaintiff did not challenge the 1966 sale, the 1974 suit was barred by limitation. The Supreme Court set aside the High Court’s order and restored the trial‑court and first‑appellate‑court decisions, allowing the appeal.
Issues considered
- The commencement of the one‑year limitation period for a pre‑emptive right under the Rajasthan Pre‑Emption Act, 1966 – whether it starts with the first sale after the Act or with each subsequent sale
- Whether the right of pre‑emption is a recurring right that can be exercised after a prior waiver
- Whether Section 9 of the Rajasthan Pre‑Emption Act, 1966 bars a pre‑emptor from exercising the right in later transactions after waiver
- Whether the 1974 suit is barred by limitation because the 1966 sale was not challenged
- Whether estoppel can be invoked to defeat a claim of pre‑emption after prior non‑exercise
Legislation cited
- Limitation Act, 1963s. Article 97
- Rajasthan Pre-emption Act, 1966s. 21, s. 3, s. 6, s. 8, s. 9
Subjects
pre‑emptionlimitationwaiverestoppelRajasthan Pre‑Emption ActSection 9Article 97right of substitutionproperty law
Judgment
462 [2020]REPORTS
SUPREME COURT 14 S.C.R. 462 [2020] 14 S.C.R.
A RAGHUNATH (D) BY LRS.
v.
RADHA MOHAN (D) THR. LRS & ORS.
(Civil Appeal No. 1442 of 2016)
B OCTOBER 13, 2020
[SANJAY KISHAN KAUL, ANIRUDDHA BOSE AND
KRISHNA MURARI, JJ.]
Rajasthan Pre-Emption Act, 1966 – ss.3, 6, 8 , 9 and 21 –
Exercise of right of Pre-emption – Limitation for – Plaintiff ’s suit
C
for pre-emption over a transaction effected on 21.01.1974 – Three
sale transactions involving the subject property had earlier taken
place in 1945, 1946 and 1966 – Right in property was predicated
on account of having a common portion therein – Trial Court
eventually held the suit to be barred by limitation in absence of
D challenge to sale deed of 1966 – Upheld by first appellate court –
High Court inter alia held the suit to be filed within time – On appeal,
held: Right of pre-emption is a weak right – It is only exercisable
for the first time when the cause of such a right arises, in a situation
where the plaintiff-pre-emptor chooses to waive such right after the
1966 Act becoming operational – s.9 operates as a bar on his
E
exercising such right on a subsequent transaction relating to the
same immovable property – Impugned order set aside – Order of
trial court dtd. 01.02.1988 and the first appellate court dated
30.03.1989 upheld – As the original plaintiff has not challenged
the sale effected on 05.11.1966, the suit is thus barred by limitation
F – Limitation Act, 1963 – Article 97 – Pre-emption.
Allowing the appeal, the Court
1.1 The Rajasthan Pre-Emption Act, 1966 was brought into
force on 1.2.1966. In view of the rights conferred under the Act,
a suit was filed by the predecessor-in-interest of respondent No.1
G seeking a decree of pre-emption against the predecessor-in-
interest of the appellant herein and respondent Nos. 4 to 6 herein,
on 10.1.1974, which was numbered as Civil Suit No. 40/1975.
The property in question is situated in a building bearing AMC
No. XV/290 situated in Kayasth Mohalla, Ajmer and is predicated
H
462
RAGHUNATH (D) BY LRS. v. RADHA MOHAN (D) THR. LRS 463
on account of having a common portion in the said property. The A
plaint stated that respondents 5 and 6 herein (original defendants
3 and 4) were owners and in possession of the part of the property
which was sold to respondent No. 4 herein (the original defendant
No. 2), vide sale deed dated 10.01.1974 for a consideration of Rs.
4000/-. Respondent No. 4 further sold this property to the
B
appellant herein (original defendant No.1 being the predecessor-
in-interest) on 21.01.1974 once again for the same consideration.
The other facts stated in the plaint are not required to be gone
into nor pleaded, except that there is an allegation that the two
portions were part and parcel of the same house having main
entrance, lavatory and staircase in common and that no notice, C
as provided for under Section 8 of the Act, had been served,
which mandates a notice to pre-emptors (forming part of the
procedure as set out in Chapter III of the Act). The historical
perspective of the right of pre-emption shows that it owes its
originination to the advent of the Mohammedan rule, based on
D
customs, which came to be accepted in various courts largely
located in the north of India. The pre-emptor has been held by
the judicial pronouncements to have two rights. Firstly, the
inherent or primary right, which is the right to the offer of a thing
about to be sold and the secondary or remedial right to follow the
thing sold. It is a secondary right, which is simply a right of E
substitution in place of the original vendee. The pre-emptor is
bound to show that he not only has a right as good as that of the
vendee, but it is superior to that of the vendee; And that too at
the time when the pre-emptor exercises his right. The right of
pre-emption is a “very weak right” and is, thus, capable of being
F
defeated by all legitimate methods including the claim of superior
or equal right. Right to pre-emption is defined in Section 3 of the
Rajasthan Pre-Emption Act, 1966. Section 6 sets out the right of
persons to whom the right pre-emption accrues and it would
suffice to reproduce sub-section (1) as the other sub-sections
deal with different classes of persons having such right. Chapter G
III sets out the procedure for the exercise of the right of pre-
emption. Section 8 under the said Chapter mandates issuance of
notice. The limitation for exercise of the aforesaid right is
stipulated in Section 21. Section 21 in turn refers to Article 97 of
H
464 SUPREME COURT REPORTS [2020] 14 S.C.R.
A the First Schedule of the Limitation Act, 1963. The question has
to be, thus, analysed in the context of a conjoint reading of Section
21 of the said Act and Article 97 of the First Schedule to the
Limitation Act, 1963. The stipulation in Section 21 is that the
right of pre-emption has to be exercised, in case of a sale, within
one year from the date of sale and if the sale is not by a registered
B
deed, on the purchaser taking the physical possession of any part
of the property sold. Since the period has to be as per Article 97,
the wordings of the Article show that it is one year from the date
when the sale is registered (in case such registration takes place
as is in the present case). It is this expression, which is sought
C to be construed by the respondent No. 1 as well as by the High
Court to mean that it is a recurring right for every sale. The loss
of right of pre-emption on transfer has been defined under Section
9 of the said Act. A reading of the Section shows that the loss is
only occasioned, when, within two months from the date of service
of the notice, the price is not tendered. However, that is the loss
D
of the right, vis-à-vis the transaction in question. The moot point
is whether such a right of pre-emption is a recurring right, i.e.
every time the property is sold, the right would rearise, in a case
the pre-empting plaintiff himself has chosen not to exercise such
right over the subject immovable property when sold to another
E purchaser earlier. [Paras 3, 12, 14, 16 and 17][468-G-H; 469-A-
E; 473-D-H; 474-A-H; 476-A-H; 47-A-D]
1.2 It would not be appropriate or permissible to adopt legal
reasoning making such a weak right, some kind of a right in
perpetuity arising to a plaintiff every time there is a subsequent
F transaction or sale once the plaintiff has waived his right or pre-
emption over the subject immovable property. The loss of right
mandated under Section 9 of the Act is absolute. A plain reading
of the said provision does not reveal that such right can re-arise
to the person who waives his right of pre-emption in an earlier
transaction. To do so would mean that a person, whether not
G having the means or for any other reason, does not exercise the
right of pre-emption and yet he, even after decades, can exercise
such a right. This would create, if one may say, some sort of a
cloud on a title and uncertainty as a subsequent purchaser would
not know, when he wants to sell the property, whether he can
H
RAGHUNATH (D) BY LRS. v. RADHA MOHAN (D) THR. LRS 465
complete the transaction or not or whether a co-sharer will jump A
into the scene. This is not contemplated in the 1966 Act. This is
bound to have an effect on the price offered by a purchaser at
that time because he would have an impression of uncertainty
about the proposed transaction. This Court is in agreement with
the consistent view taken in the judgments earlier of the
B
Rajasthan High Court. So far as the case of Kutina Bibi is
concerned, the factual basis of that decision does not fit with the
legal controversy involved in this proceeding. [Paras 18, 19]
[477-D-H; 478-A-C]
Indira Bai v. Nand Kishore (1990) 4 SCC 668 : [1990]
1 Suppl. SCR 349 – referred to. C
1.3 The right of pre-emption is only exercisable for the first
time when the cause of such a right arises, in a situation where
the plaintiff-pre-emptor chooses to waive such right after the 1966
Act becoming operational. Section 9 of the said Act operates as a
bar on his exercising such right on a subsequent transaction D
relating to the same immovable property. The result is the
impugned order is set aside and the order of the trial court dated
01.02.1988 and the first appellate court dated 30.03.1989 are
upheld. As the original plaintiff has not challenged the sale effected
by him on 5 th November, 1966, the suit of respondent No. 1 E
(original plaintiff, now represented by his legal representatives)
is thus barred by limitation. [Paras 22, 23][479-A-D]
Kutina Bibi and another v. Vaiukuntha Chandra Dutta
and others AIR 1961 Assam 1 – distinguished.
Barasat Eye Hospital & Ors. v. Kaustabh Mondal 2019 F
SCC Online SC 1351; Bishan Singh v. Khazan Singh
AIR 1958 SC 838:[1959] SCR 878 – referred to.
Gobind Dayal v. Inayatullah (1885) ILR 7 All 775, 809;
Prahlad Kumar v. Kishan Chand & Ors. 2009 (3) RLW
2441; Mangti Ram v. Onkar Sahai (1994) 1 RLW 55; G
Ghulam Jilani v. Hassan Khan & Ors. PLR 1905
(Vol.VI) 338; Ghanshyam v. Chand Bihari & Ors.
(2008) 2 RLW (Rev) 1011; Rukmani Devi (Smt.) v.
Prabhu Marayan & Ors. (2007) 4 RLW 2882 –
referred to.
H
466 SUPREME COURT REPORTS [2020] 14 S.C.R.
A Case Law Reference
[1959] SCR 878 referred to Para 10
[1990] 1 Suppl. SCR 349 referred to Para 21
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1442
B of 2016
From the Judgment and Order dated 29.06.2009 of the High Court
of Judicature for Rajasthan at Jaipur Bench, Jaipur in S.B. Civil Second
Appeal No. 65/1989.
Irshad Ahmad, Ms. Christi Jain, Puneet Jain, Harsh Jain, Harshit
C Khanduja, Akshat Maheshwari For Ms. Pratibha Jain, Advs. for the
appearing parties.
The Judgment of the Court was delivered by
SANJAY KISHAN KAUL, J.
D 1. The singular question this Court had framed for consideration
in this appeal was whether the limitation shall commence from the first
sale deed after coming into force of the Rajasthan Pre-Emption Act,
1966 or from any other subsequent sale on the basis of Article 97 of the
Limitation Act, 1963. This question arises in this proceeding in a situation
E where the original plaintiff sought to enforce such right after three sale
transactions had taken place in the past involving the subject immovable
property in the years 1945, 1946 and 1966. The last transaction was
effected on 5th November that year, after the 1966 Act had become
operational. The factum of the plaintiff’s entitlement otherwise claim
right of pre-emption in terms of Section 6 of the 1966 Act is not in
F dispute in this proceeding. In the suit out of which this appeal arises, the
plaintiff’s suit for pre-emption over a transaction effected on 21st January
1974 was resisted on the ground of being barred by limitation.
2. In order to determine the aforesaid question of law framed by
this Court in terms of the order dated 05.01.2016, it is necessary to
G discuss the nature of the right of pre-emption. In this behalf, we had
discussed the right of pre-emption in a recent judgment in Barasat Eye
Hospital & Ors. v. Kaustabh Mondal1. The said judgment, authored
by one of us (Sanjay Kishan Kaul, J.), in its initial paragraph itself discusses
this aspect and it would suffice to quote the same.
H 1
(2019) SCC Online SC 1351
RAGHUNATH (D) BY LRS. v. RADHA MOHAN (D) THR. LRS 467
[SANJAY KISHAN KAUL, J.]
“1. The right of pre-emption holds its origination to the advent of A
the Mohammedan rule, based on customs which came to be
accepted in various courts largely located in the north of India.
This law is stated to be largely absent in the south of India on
account of the fact that it never formed a part of Hindu law in
respect of property. However, this law came to be incorporated
B
in various statutes, both, prior to the Constitution of India (for
short ‘the Constitution’) coming into force, and even post that.2 The
constitutional validity of such laws of pre-emption came to be
debated before the Constitution Bench of this Court, in Bhau
Ram,3. There are different views expressed by the members of
the Constitution Bench of five Judges, and also dependent on the C
various State legislations in this regard. Even though there were
views expressed that this right of pre-emption is opposed to the
principles of justice, equity and good conscience, it was felt that
the reasonableness of these statutes has to be appreciated in the
context of a society where there were certain privileged classes
D
holding land and, thus, there may have been utility in allowing
persons to prevent a stranger from acquiring property in an area
which has been populated by a particular fraternity or class of
people. This aspect was sought to be balanced with the
constitutional scheme, prohibiting discrimination against citizens
on the grounds of only religion, race, caste, sex, place of birth or E
any of them, under Article 15 of the Constitution, and the guarantees
given to every citizen to acquire, hold and dispose of property,
subject only to the test of reasonable restriction and the interest
of general public.”
The judicial approach adopted towards this right of pre-emption F
was thereafter discussed in the said judgment in the following terms:
“10. In order to appreciate the aforesaid provisions relating to
the right of pre-emption, it would be appropriate to refer to an
extremely lucid judgment of this Court by Justice K. Subbarao
(as he then was), setting forth the contours of the right of pre- G
emption in Bishan Singh v. Khazan Singh 4, in a four Judge
Bench judgement. The Bench proceeded to discuss the view of
2
Bhau Ram v. Baij Nath Singh , AIR 1962 SC 1476
3
supra
4
AIR 1958 SC 838 H
468 SUPREME COURT REPORTS [2020] 14 S.C.R.
A different Courts on this right of preemption, as found in the
following:
a. Plowden, J. in Dhani Nath v. Budhu,5
b. Mahmood, J. in Gobind Dayal v. Inayatullah,6.
c. Mool Chand v. Ganga Jal,7.
B
11. In view of the aforesaid elucidation, it was opined that the
preemptor has two rights: first, the inherent or primary right, i.e.,
right for the offer of a thing about to be sold; and second, the
secondary or remedial right to follow the thing sold. The secondary
right of preemption is simply a right of substitution, in place of an
C original vendee and the pre-emptor is bound to show not only that
his right is as good as that of that vendee, but that it is superior to
that of the vendee. Such superior right has to subsist at the time
when the pre-emptor exercises his right. The position is thereafter
summarized in the following terms:
D “11. …..(1) The right of pre-emption is not a right to the thing
sold but a right to the offer of a thing about to be sold. This
right is called the primary or inherent right. (2) The pre-emptor
has a secondary right or a remedial right to follow the thing
sold. (3) It is a right of substitution but not of re-purchase i. e.,
the pre-emptor takes the entire bargain and steps into the shoes
E
of the original vendee. (4) It is a right to acquire the whole of
the property sold and not a share of the property sold. (5)
Preference being the essence of the right, the plaintiff must
have a superior right to that of the vendee or the person
substituted in his place. (6) The right being a very weak right,
F it can be defeated by all legitimate methods, such as the vendee
allowing the claimant of a superior or equal right being
substituted in his place.”
On having set down the contours of the aforesaid right, we turn to
the facts of the present case.
G Facts:
3. The Rajasthan Pre-Emption Act, 1966 (hereinafter referred to
as ‘the Act’) was brought into force on 1.2.1966. In view of the rights
5
136 P.R. 1894
6
(1885) ILR 7 All 775, 809
H 7
(1930) ILR 11 Lahore (F.B.) 258, 273
RAGHUNATH (D) BY LRS. v. RADHA MOHAN (D) THR. LRS 469
[SANJAY KISHAN KAUL, J.]
conferred under the Act, a suit was filed by the predecessor-in-interest A
of respondent No.1 seeking a decree of pre-emption against the
predecessor-in-interest of the appellant herein and respondent Nos. 4 to
6 herein, on 10.1.1974, which was numbered as Civil Suit No. 40/1975.
The property in question is situated in a building bearing AMC No. XV/
290 situated in Kayasth Mohalla, Ajmer (‘suit schedule property’) and is
predicated on account of having a common portion in the said property. B
The plaint stated that respondents 5 and 6 herein (original defendants 3
and 4) were owners and in possession of the part of the property which
was sold to respondent No. 4 herein (the original defendant No. 2), vide
sale deed dated 10.01.1974 for a consideration of Rs. 4000/-. respondent
No. 4 further sold this property to the appellant herein (original defendant C
No.1 being the predecessor-in-interest) on 21.01.1974 once again for
the same consideration. The other facts stated in the plaint are not required
to be gone into nor pleaded, except that there is an allegation that the
two portions were part and parcel of the same house having main
entrance, lavatory and staircase in common and that no notice, as
provided for under Section 8 of the Act, had been served, which mandates D
a notice to pre-emptors (forming part of the procedure as set out in
Chapter III of the Act). The suit was resisted. The sale of the property
as per the two sale deeds was not disputed. The plea was, however,
raised that there were two separate lockable premises and as such no
right of pre-emption accrued in favour of the original plaintiff. Once E
again, it is not necessary to go into other defences for adjudication of the
present matter. It may, however, be noted that the written statement
stated that yet another sale agreement was entered into on 25.10.1974
and the purchaser had not been made a party to the suit.
4. The Trial Court framed as many as eight issues including the
F
plea of bar of limitation. The suit was decreed in terms of the judgment
dated 30.6.1977, inter alia finding that the suit had been filed within the
period of limitation of one year. An appeal was preferred against this
order and during the pendency of the appeal an application was filed to
amend the written statement inter alia raising the plea that there were
even earlier sale deeds of 1945, 1946 and 1966 where the respondents 5 G
and 6 herein had purchased the property vide sale deed dated 5.11.1966.
The earlier sale deeds not having been challenged, the right of pre-emption
could not be exercised and was barred by time. This resulted in four
additional issues being framed arising from the plea of limitation and the
matter was remitted to the Trial Court in terms of the judgment dated
22.5.1987 of the first appellate Court. H
470 SUPREME COURT REPORTS [2020] 14 S.C.R.
A 5. The Trial Court gave its consideration on the additional issues
and took note of the fact that the earlier two sale deeds were even prior
to the coming into force of the said Act. The court, however, noticed
that even prior to the coming into force of the said Act, laws of pre-
emption did exist in Ajmer. The sale deed dated 5.11.1966 came into
existence after the said Act came into force. It was opined by judgment
B
dated 1.2.1988 that without challenging that sale deed, the suit would not
be maintainable and would be barred by limitation relying upon the
judgment of the Assam High Court in Kutina Bibi and another vs.
Baikuntha Chandra Dutta and others8.
6. The first appellate Court once again considered this judgment
C of the Trial Court in Civil Appeal No.129/1985 on the additional issues
decided in terms of that judgment. The appellate court, in terms of the
judgment dated 30.03.1989, agreed with the finding of the Trial Court on
the ratio of Kutina Bibi (supra).
7. The matter was thereafter taken upto the Rajasthan High Court
D vide S.B.C.S. Appeal No. 65/1989. The High Court noticed that the
only question before it was on the point of limitation as per the provisions
of Article 97 of the Limitation Act. 1963. The High Court in terms of the
impugned judgment dated 29.06.2009 opined that the one year limitation
period is to run from the date of registration of the sale deed or the date
when physical possession of the property was given; and the sale deed
E would be the sale deed in question. The High Court negated the plea
that the earlier sale deeds would have to be assailed and concluded that
each sale of such property gives a fresh cause of action. The suit was
found to have been filed within time and the matter was remitted back
on merits to be decided by the first appellate Court. In the Special
F Leave Petition filed, notice was issued on 9.10.2009 and interim stay of
the impugned order was directed. Leave was granted on 12.2.2016 and
the question of law was framed on 05.01.2016.
Rival Contentions:
8. The arguments advanced by Mr. Irshad Ahmad, learned counsel
G for the appellant is on dual contours. The first argument was based on
the policy behind the right of pre-emption, i.e. that no stranger should be
allowed to thrust himself upon the co-sharer in a property against their
will and to prevent apprehended inconvenience to the co-sharer. In that
context, it was urged that the admitted position was that the predecessor-
8
H AIR 1961 Assam 1
RAGHUNATH (D) BY LRS. v. RADHA MOHAN (D) THR. LRS 471
[SANJAY KISHAN KAUL, J.]
in-interest of the appellant herein was a distant relative of the predecessor- A
in-interest of respondent No.1 herein and this fact had been admitted by
the original plaintiff as also by the son of Manna Lal (the executor of the
sale deed of 1946) in their depositions. The second plea advanced was
that if a plaintiff waived his right of pre-emption by conduct, no such
right is available on a subsequent sale of the same property and the
B
plaintiff is estopped from claiming any right of pre-emption of subsequent
sale.
9. In support of their contention, learned counsel referred to the
following judgments:
(a) Prahlad Kumar vs. Kishan Chand & Ors.9 C
This judgment of the Rajasthan High Court, while rejecting the
right of pre-emption, based it on two aspects. The first was a factual
one that it was not a case of sharing a common property. The relevant
portion is the second aspect where it was held even if the right is presumed
to have been established, though not established in that case, the plaintiff D
was estopped from claiming his right of pre-emption as he had waived
his right when the property was sold at an earlier date and pre-emption
was not claimed then.
(b) Mangti Ram vs. Onkar Sahai10
In this case, the right of pre-emption was held to have been given E
up on account of an earlier compromise deed to which the plaintiff had
been a party.
(c) Kutina Bibi & Anr. vs. Baikuntha Chandra Dutta & Ors.11
This judgment once again dealt with the plea of pre-emption against
a subsequent sale, where vide an earlier sale deed of 1950, the plaintiff- F
cosharer’s share had been sold by her son and thus, it was held that not
having assailed the earlier sale deed, the right of pre-emption could not
be claimed against the subsequent sale.
(d) Ghulam Jilani vs. Hassan Khan & Ors.12
G
There was an earlier sale deed and a subsequent sale deed. At
the stage of the initial sale deed, the cosharer did not object. At the stage
9
2009 (3) RLW 2441
10
(1994) 1 RLW 55
11
Supra
12
PLR 1905 (Vol.VI) 338 H
472 SUPREME COURT REPORTS [2020] 14 S.C.R.
A of the second sale deed, the cosharer sought to object. The court debated
the issue of competing rights of the cosharer and the subsequent buyer
in pursuance to the first sale deed. It was opined, while agreeing with
the lower court, that the plaintiff’s suit was barred by time, having been
instituted more than a year after the earlier sale which alone he was
entitled to impugn.
B
(e) Ghanshyam vs. Chand Bihari & Ors.13
The factual matrix shows there were many cosharers. Two of
the cosharers transferred their rights to a third party. One by sale and
one by gift. Third party, in turn, sought to transfer to another party. It is
C at that stage, one of the cosharers claimed a right of pre-emption. It
was found on facts that when the said third party sought to transfer his
right, plaintiff never showed willingness to purchase the same, as they
were not having sufficient means. It was opined that the plaintiff’s father
never tried to assert his right in the matter of purchasing that portion
earlier and subsequently also, during his lifetime, he never tried to enforce
D his right of pre-emption. As such, right of pre-emption was said to have
been waived by conduct.
(f) Rukmani Devi (Smt.) vs. Prabhu Narayan & Ors.14
The pre-emption right under Section 6 of the Act was discussed
with an explanation that the right of pre-emption is a weak right and thus
E if a plaintiff pre-emptor waives or gives up his right without raising any
objection to the sale in favour of the third party, the court should not
allow substitution in the sale deed at the instance of such plaintiff pre-
emptor, who has already given up his right.
10. On the other hand, Ms. Christi Jain, learned counsel for the
F respondent sought to support the impugned judgment on the plea that the
limitation to enforce a right of pre-emption under the Act is governed by
Article 97 of the Limitation Act, 1963 read with Section 21 of theAct.
Thus, each sale deed is a separate cause of action. On a reading of
Section 8 of the said Act, it was contended that the seller is required to
inform all persons as to the price he is proposing to sell at and thus the
G
language of the provision is clear that it applies to all such incidents of
sale. Thus, it was pleaded that it cannot be said that if such a right is not
exercised, it would allow foreclosure for any subsequent sale, since there
is no provision in the said Act, prohibiting the right of pre-emption if the
13
(2008) 2 RLW (Rev) 1011
H 14
(2007) 4 RLW 2882
RAGHUNATH (D) BY LRS. v. RADHA MOHAN (D) THR. LRS 473
[SANJAY KISHAN KAUL, J.]
right is not exercised. It was also contended that the question of waiver A
is set out in Section 9 of the said Act, which does not provide for an
eventuality that the right of pre-emption would not be applicable for a
subsequent sale. The last aspect argued was that this right is based on
substitution in place of the vendee on payment of the price and it does
not challenge the sale but seeks substitution of the plaintiff in place of
B
the vendee. There was, thus, no need to challenge the earlier sales and
not challenging the earlier sales would not amount to waiver.
11. A reference was made to the following judgments:
(i) Bishan Singh & Ors. vs. Khazan Singh & Anr.15
The reference to the aforesaid judgment has been made in the C
context of the observations of Mahmood, J. in Gobind Dayal case
(supra) referred to above that it is in relation to the right of substitution.
(ii) Barasat Eye Hospital & Ors. vs. Kaustabh Mondal16
This judgment has been relied upon again on the same aforesaid
principle of right of substitution.
D
The view we adopt:
12. We have given our thoughtful consideration to the aforesaid
issue and in order to determine the same, we had, at the inception itself,
set out the judgment in Barasat Eye Hospital case (supra). We have,
thus, referred to the earlier judicial view in para 10 of the judgment E
extracted aforesaid. The historical perspective of the right of pre-emption
shows that it owes its originination to the advent of the Mohammedan
rule, based on customs, which came to be accepted in various courts
largely located in the north of India. The pre-emptor has been held by
the judicial pronouncements to have two rights. Firstly, the inherent or
primary right, which is the right to the offer of a thing about to be sold F
and the secondary or remedial right to follow the thing sold. It is a
secondary right, which is simply a right of substitution in place of the
original vendee. The pre-emptor is bound to show that he not only has a
right as good as that of the vendee, but it is superior to that of the vendee;
And that too at the time when the pre-emptor exercises his right. In our G
view, it is relevant to note this observation and we once again emphasise
that the right is a “very weak right” and is, thus, capable of being defeated
by all legitimate methods including the claim of superior or equal right.
15
AIR 1958 SC 838
16
supra H
474 SUPREME COURT REPORTS [2020] 14 S.C.R.
A 13. We have to examine the legal question before us in terms of
the aforesaid principles. We may notice the observation in the Ghanshyam
case (supra) which deals with the scenario where at the first instance
the right was not exercised apparently on account of lack of financial
means and that was held to be no ground to permit exercise of that right
at the second stage. The consistent view taken by the Rajasthan High
B
Court, as reflected in not only Ghanshyam case (supra) but also in
Rukmani Devi (supra) and Prahlad Kumar (supra) has been that the
right of substitution is capable of being invoked only at the first instance
and does not continue to substitution is capable of being invoked only at
the first instance and does not continue to permeate for an indefinite
C period of time for each sale transaction. In the case of Ghanshyam
(supra), finding of the High Court was that the plaintiffs claiming pre-
emption had waived their rights. In the case of Rukmani Devi (supra),
where the plaintiff raised the plea of pre-emption on second sale
transaction, evidence was led by the defendant that the same plaintiff
had earlier refused to purchase the subject property and had on the
D
other hand participated in the sale process. In the case of Prahlad Kumar
(supra), it was found that the plaintiff himself had waived his right of
pre-emption in respect of an earlier sale transaction involving the same
property. Thus, to this extent, the view taken in the impugned order
seems to charter a new course. The view of the Assam High Court in
E Kutina Bibi (supra) was consistently followed by the Rajasthan High
Court.
14. In order to now appreciate the controversy, as there appears
to be no other view of this Court on this aspect, we would first turn to
the said Act itself. Right to pre-emption is defined in Section 3 of the
F Act as under:
“Section 3: “Right of pre-emption” defined
The “right of pre-emption” is the right accruing under section 4 of
this Act, upon a transfer of any immovable property, to acquire
such property and to be substituted as the transferee thereof in
G place of and in preference to the original transferee and “pre-
emptor” means a person having a right of pre-emption.”
Section 6 sets out the right of persons to whom the right pre-
emption accrues and it would suffice to reproduce sub-section (1) as the
other sub-sections deal with different classes of persons having such
H right.
RAGHUNATH (D) BY LRS. v. RADHA MOHAN (D) THR. LRS 475
[SANJAY KISHAN KAUL, J.]
“Section 6: Persons to whom right of pre-emption accrues A
(1) Subject to the other provisions of this Act, the right of pre-
emption in respect of any immovable property transferred shall
accrue to, and vest in, the following classes of persons, namely:—
(i) co-sharers of or partners in the property transferred,
B
(ii) owners of other immovable property with a stair-case or an
entrance or other right or amenity common to such other property
and the property transferred, and
(iii) owners of property servient or dominant to the property
transferred.” C
Chapter III sets out the procedure for the exercise of the right of
pre-emption. Section 8 under the said Chapter mandates issuance of
notice.
“Section 8: Notice to pre-emptors
D
(1) When any person proposes to sell, or to foreclose the right to
redeem, any immovable property, in respect of which any persons
have a right of pre-emption, he shall give notice to all such persona
as to the price at which he is proposing so to sell or as to the
amount due in respect of the mortgage proposed to be foreclosed,
as the case may be. E
(2) Such notice shall be given through the civil court, within the
local limits of whose jurisdiction the property concerned is situated
shall clearly describe such property, shall state the name and other
particulars of the purchaser or the mortgagee and shall be served
in the manner prescribed for service of summons in civil suits.” F
The limitation for exercise of the aforesaid right is stipulated in
Section 21, which reads as under:
“Section 21: Special provision for limitation
(1) Subject to the provisions contained in the proviso to sub-section G
(1) of section 5, the period of limitation, in any case not provided
for by article 97 of the First Schedule to the Limitation Act, 1963
(Central Act 36 of 1963), for a suit to enforce the right of pre-
emption under this Act shall, notwithstanding anything contained
in article 113 of the said schedule of the said Act, be one year
from the date on which,— H
476 SUPREME COURT REPORTS [2020] 14 S.C.R.
A (a) in the case of a sale made without a registered sale-deed, the
purchaser takes under the sale physical possession of any part of
the property sold, and
(b) in the case of a foreclosure, the final decree for foreclosure is
passed.
B (2) The period of limitation for a suit to enforce a right of pre-
emption which has accrued before the commencement of this
Act shall, notwithstanding anything contained in the said Limitation
Act, in no case exceed one year from the commencement of this
Act.”
C 15. In view of the fact that since Section 21 in turn refers to
Article 97 of the First Schedule of the Limitation Act, 1963 it would be
appropriate to set forth the same as under.
97. To enforce a right of One When the purchaser takes under the sale
pre-emption whether the year. sought to be impeached, physical
D right is founded on law possession of the whole or part of the
or general usage or on property sold, or, where the subject-
special contract. matter of the sale does not admit of
physical possession of the whole or part
of the property, when the instrument of
sale is registered.
E
16. The question has to be, thus, analysed in the context of a
conjoint reading of Section 21 of the said Act and Article 97 of the First
Schedule to the Limitation Act, 1963. The stipulation in Section 21 is
that the right of pre-emption has to be exercised, in case of a sale, within
one year from the date of sale and if the sale is not by a registered deed,
F on the purchaser taking the physical possession of any part of the property
sold. Since the period has to be as per Article 97, the wordings of the
Article show that it is one year from the date when the sale is registered
(in case such registration takes place as is in the present case). It is this
expression, which is sought to be construed by the respondent No. 1 as
G well as by the High Court to mean that it is a recurring right for every
sale. The loss of right of pre-emption on transfer has been defined
under Section 9 of the said Act as under:
“Section 9: Loss of right of pre-emption on transfer
Any person having a right of pre-emption in respect of any
H immovable property proposed to be sold shall lose such, right unless
RAGHUNATH (D) BY LRS. v. RADHA MOHAN (D) THR. LRS 477
[SANJAY KISHAN KAUL, J.]
within two months from the date of the service of such notice, he A
or his agent pays or tenders the price specified in the notice given
under section 8 to the person so proposing to sell:
Provided that the right of pre-emption shall not be so lost if the
immovable property in question is actually sold for an amount
smaller than that mentioned in the notice or to a person not B
mentioned in the notice as purchaser.”
17. A reading of the Section shows that the loss is only occasioned,
when, within two months from the date of service of the notice, the
price is not tendered. However, that is the loss of the right, vis-à-vis the
transaction in question. The moot point is whether such a right of pre- C
emption is a recurring right, i.e. every time the property is sold, the right
would rearise, in a case the pre-empting plaintiff himself has chosen not
to exercise such right over the subject immovable property when sold to
another purchaser earlier.
18. In our view, it would not be appropriate or permissible to adopt D
legal reasoning making such a weak right, some kind of a right in
perpetuity arising to a plaintiff every time there is a subsequent transaction
or sale once the plaintiff has waived his right or pre-emption over the
subject immovable property. The loss of right mandated under Section 9
of the Act is absolute. A plain reading of the said provision does not
reveal that such right can re-arise to the person who waives his right of E
pre-emption in an earlier transaction. To do so would mean that a person,
whether not having the means or for any other reason, does not exercise
the right of pre-emption and yet he, even after decades, can exercise
such a right. This would create, if one may say, some sort of a cloud on
a title and uncertainty as a subsequent purchaser would not know, when F
he wants to sell the property, whether he can complete the transaction
or not or whether a co-sharer will jump into the scene. This is not
contemplated in the 1966 Act. This is bound to have an effect on the
price offered by a purchaser at that time because he would have an
impression of uncertainty about the proposed transaction.
G
19. We are in agreement with the consistent view taken in the
judgments earlier of the Rajasthan High Court. So far as the case of
Kutina Bibi (supra) is concerned, the factual basis of that decision does
not fit with the legal controversy involved in this proceeding. In that
case, by a previous transaction the entire land had been sold. It was held
H
478 SUPREME COURT REPORTS [2020] 14 S.C.R.
A in that perspective, that the plaintiff’s right as a co-sharer had become
disputed in absence of challenge to the previous transaction. We are of
opinion that such a right is available once - whether to take it or leave it
to a person having a right of pre-emption. If such person finds it is not
worth once, it is not an open right available for all times to come to that
person. The aforesaid being the position, this would itself be an
B
impediment in exercise of the right of pre-emption in a subsequent
transaction. This is so since, we find the right of waiver under section 9
of the said Act is relatable to the transaction and also the person. These
provisions may not impede the right of pre-emption in that particular
transaction by a particular pre-emptor and the factum of not having
C exercised such a right to an earlier transaction would amount to the
surrender of the right of substitution to such intended pre-emptor.
20. The judgments referred to by the respondent of Bishan Singh
(supra) and Barasat Eye Hospital (supra) are only for the proposition
that the right of pre-emption is a right of substitution – no doubt exists
D over this proposition. The question is whether this right of substitution
can be exercised recurringly or only once. Our answer to the query is
‘only once’.
21. We may also notice another judgment of this Court in Indira
Bai vs. Nand Kishore17. Once again in relation to the said Act (it
E appears that there is a frequent exercise of this right in Rajasthan apart
from West Bengal & Bihar!) The question which was framed for decision
in the case was:
“Is estoppel a good defence to ‘archaic’ right of pre-emption which
is a ‘weak right’ and can be defeated by any ‘legitimate’ method?”
F In the aforesaid context, in para 5, it has been observed that the
Act does not debar the pre-emptor from giving up his right. Rather in
case of its non-exercise within two months, may be for the financial
reasons, the right stands extinguished. “It does not pass on to anyone”.
It was further observed, “No social disturbance is caused. It settles in
G purchaser. Giving up such right, expressly or impliedly cannot therefore
be said to involve any interest of community or public welfare so as to
be in mischief of public policy.” These observations, once again, in our
view, are based on the right being weak.
17
H (1990) 4 SCC 668
RAGHUNATH (D) BY LRS. v. RADHA MOHAN (D) THR. LRS 479
[SANJAY KISHAN KAUL, J.]
Conclusion: A
22. We suppose that the aforesaid answers the dilemma, i.e.
whether the right of pre-emption can be enforced for an indefinite number
of transactions or it is exercisable only the first time. We opine that it is
only exercisable for the first time when the cause of such a right arises,
in a situation where the plaintiff-pre-emptor chooses to waive such right B
after the 1966 Act becoming operational. Section 9 of the said Act
operates as a bar on his exercising such right on a subsequent transaction
relating to the same immovable property. We also wonder what really
remains of this right of pre-emption after so many years in the facts of
this case when the purchaser has been enjoying it for more than four
decades! C
23. The result is the impugned order is set aside and the order of
the trial court dated 01.02.1988 and the first appellate court dated
30.03.1989 are upheld. As the original plaintiff has not challenged the
sale effected by him on 5th November, 1966, the suit of respondent No.
1 (original plaintiff, now represented by his legal representatives) is thus D
barred by limitation. This puts an end to the legal battle which began 45
years ago!
24. The appeal, is accordingly, allowed leaving the parties to bear
their own costs.
E
Divya Pandey Appeal allowed.
F
G
H
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