Supreme Court of India
TILAK RAJ BAKSHIversusAVINASH CHAND SHARMA (DEAD) THROUGH LRS. & OTHERS
- Citation
- 2019 INSC 923
- Decided
- 20 August 2019
- Disposal
- Dismissed
- Bench
- ASHOK BHUSHAN
Holding
The family settlement’s clause requiring written concurrence and offering a preferential right was clear and enforceable, the first defendant had made a reasonable offer which the plaintiff failed to accept, rendering the plaintiff estopped from invoking a pre‑emptive right, and the sale to the second defendant stands; consequently, the appeals were dismissed.
Summary
The plaintiff, Tilak Raj Bakshi, claimed that his brother (the first defendant) violated a family settlement by selling his one‑third share of a Chandigarh house to a stranger (the second defendant) without obtaining the written concurrence of the other brothers and without offering the share to the plaintiff as required by Clause 5 of the settlement. The trial court decreed specific performance in favour of the plaintiff; the appellate court reversed that decision and ordered possession to the second defendant; the High Court dismissed the suit. On appeal, the Supreme Court examined whether the settlement existed, whether Clause 5 was vague, whether a valid offer was made, whether a right of pre‑emption arose, and whether the sale contravened the Capital of Punjab (Development and Regulation) Act, 1952. It held that the settlement was genuine, Clause 5 was clear, the first defendant had made a reasonable offer which the plaintiff failed to accept, and thus the plaintiff was estopped from invoking pre‑emption. The sale to the second defendant was not void on the ground of fragmentation, and the courts could not grant specific performance under Section 20 of the Specific Relief Act. The appeals were dismissed.
Issues considered
- When a family settlement exists between co‑owners of a property.
- Whether Clause 5 of the settlement is vague, uncertain, or void under the Indian Contract Act.
- Whether the first defendant made a valid offer to the plaintiff as required by the settlement.
- Whether the plaintiff is entitled to specific performance of the sale of the first defendant’s share.
- Whether a right of pre‑emption arises from the family settlement and can be enforced.
- Whether the courts may exercise discretion under Section 20 of the Specific Relief Act, 1963.
- Effect of the absence of written concurrence by the brothers on the validity of the sale.
- Whether the sale violates the prohibition against fragmentation under the Capital of Punjab (Development and Regulation) Act, 1952 and related rules.
Legislation cited
- Capital of Punjab (Development and Regulation) Act, 1952s. 22, s. 2(f), s. 2(k), s. 3, s. 4, s. 5
- Chandigarh Estate Rules, 2007s. 16
- Chandigarh (Sale of Sites and Building) Rules, 1960s. 14
- Indian Contract Act, 1872s. 29
- Indian Evidence Act, 1872s. 93
- Partition Act, 1893s. 2, s. 3, s. 4
- Specific Relief Act, 1963s. 20
Subjects
family settlementright of pre-emptionspecific performancecontract enforceabilityoffer and acceptanceestoppelfragmentationCapital of Punjab ActSection 20 Specific Relief Act
Judgment
[2019] 10 S.C.R. 251 251
TILAK RAJ BAKSHI A
v.
AVINASH CHAND SHARMA (DEAD) THROUGH LRS. &
OTHERS
(Civil Appeal Nos. 1524-1525 of 2019) B
AUGUST 20, 2019
[ASHOK BHUSHAN AND K. M. JOSEPH, JJ.]
Suit – Right of pre-emption – When not applicable – Father
of the appellant-plaintiff executed will of the suit scheduled property
C
in favour of his three sons, the plaintiff, first defendant and third
defendant – Suit for specific performance filed alleging that the
first defendant without getting plaintiff ’s written concurrence, sold
the suit property to the first respondent-second defendant, thus
violating Clause (5) of the agreement entered between the three
brothers – Trial court decreed the suit – Appellate Court dismissed D
the second defendant’s appeal – High Court dismissed the suit filed
by the plaintiff – On appeal, held: Clause in question does not
place absolute restriction on alienation in favour of a stranger –
All that it contemplates is an offer being made to the brothers, once
the first step of concurrence in writing by the brothers for the sale
E
is obtained – Plaintiff not justified in invoking the principle
underlying the right of pre-emption – First defendant indeed made
offer to the appellant for selling his share for Rs. 5 lakhs – Plaintiff
estopped from setting up the plea of absence of written consent of
the brothers as he led the first defendant to assume, that even without
written concurrence, the sale is permitted – First defendant acted F
on that basis, otherwise, he could have certainly obtained the
concurrence – Having thus acted in the matter, and the second stage
having been reached, when the fault cannot be attributed to the
first defendant, the offer, which the plaintiff himself describes as
reasonable, was not seized upon by him, the third stage emerged –
G
It became open to the first defendant to sell to a stranger and he
sold the property to the second defendant – Further, plaintiff not
able to persuade the Court to hold that the assignment in favour of
the second defendant is vulnerable on the basis that it involves
fragmentation of the site, which according to the plaintiff was
H
251
252 SUPREME COURT REPORTS [2019] 10 S.C.R.
A prohibited under 1952 Act – Transaction cannot be impugned on
the said ground also – Indian Contract Act, 1872 – s.29 – Capital
of Punjab (Development and Regulation) Act, 1952 – Specific Relief
Act, 1963 – s.20.
Capital of Punjab (Development and Regulation) Act,
B 1952 – ss.2(f), (k), 3-5, 22 – Difference between ‘site’ and
building’ – Discussed – Chandigarh (Sale of Sites and Building)
Rules, 1960 – r.14 – Chandigarh Estate Rules, 2007 – r.16 – Partition
Act, 1893 – ss.2-4.
Practice and Procedure – Plea not taken before the Appellate
C Court, if can be decided by it – Permissibility of – Held: Mere fact
that the plea that the clause in question was vague, and hence,
unenforceable and void was not taken, will not stand in the way of
the Appellate Court looking into the contract and, if on its terms, it
finds it to be vague and unenforceable, it can be so held – Indian
Evidence Act, 1872 – s.93.
D
Dismissing the appeals, the Court
HELD : 1.1 WHETHER THERE WAS A FAMILY
SETTLEMENT?
No material has been placed by the second defendant to
E establish that the alleged family settlement is a forged document.
There is no case that it is not a family settlement. The settlement
is arrived at between the plaintiff, his brother-the first defendant
and another brother-third defendant. Therefore, it is proceeded
on the basis that there is a family settlement. [Para 17]
F [265-G-H]
1.2 WHETHER THE FAMILY SETTLEMENT WAS
VAGUE?
The mere fact that a plea is not taken, that the clause in
question is vague, and hence, unenforceable and void will not
G stand in the way of the Appellate Court looking into the contract
and, if on its terms, it finds it to be vague and unenforceable, it
can be so held. Clause (5) in question provides that the property
in question cannot be sold without concurrence of the three
brothers in writing. If it is sold on the agreement of three brothers,
the first preference is to be given to both other brothers. When
H
TILAK RAJ BAKSHI v. AVINASH CHAND SHARMA (D) THR. 253
LRS. & ORS.
it is stated that the property cannot be sold without concurrence A
of the three brothers in writing, there cannot be any doubt about
its meaning. It means what it says which is that should a brother
want to sell the property, the other two brothers must agree in
writing. This clause cannot be described as vague. This is different
from the aspect as to whether it is a clog on ownership or whether
B
it is otherwise unenforceable but it cannot be described as being
vague. The second contention is that when a decision is taken by
the brothers permitting sale by a third brother, then, first
preference is to be given to both the other brothers. What is
intended is that after the written concurrence is obtained for
selling in order that property is not sold to a third party/stranger, C
the other two brothers are given an opportunity to buy that
property. This portion of the clause cannot also be described as
vague as such. No doubt, it could be argued that the price at
which the offer is to be made is not expressly mentioned. The
clause is part of a family settlement between brothers. Courts
D
ordinarily lean in favour of family settlement. Clause (5) itself
does not contain an agreement to sell. It only contemplates a
preferential offer being treated as a condition precedent to a
brother affecting a sale outside of a family to a stranger. The price
can only be understood as market price which would be the fair
price. Therefore, the finding by the High Court that contract is E
vague cannot be sustained. In the last letter dated 01.04.1996, it
is written by the plaintiff to the first defendant and his wife. He
has shown awareness of the first defendant’s health.
Correspondence indeed establish, therefore, that the health of
the first defendant was poor and it was deteriorating and he was
F
in urgent need for money. The first defendant had made offer to
the appellant for selling his share for Rupees Five Lakhs. The
plaintiff himself acknowledged in the letter dated 01.04.1996 that
the offer of Rupees five lakhs was reasonable. Appellant, quite
clearly, has articulated his pressing priority to be to conduct the
marriage of his daughter. This means that he was hard pressed G
for money. Otherwise there was no need for him after finding the
offer to be reasonable to request the first defendant and his wife
to try to reduce the value. Letter dated 15.04.1996 written by
the first defendant’s wife shows that she did not wish to then
receive earnest money and she finally demanded that final
H
254 SUPREME COURT REPORTS [2019] 10 S.C.R.
A payment be made as prices in Chandigarh were increasing quite
rapidly and rate settled by the plaintiff was quite old. She
emphasized that the offer was given because she was in dire need
of money. Now the need is of the plaintiff. This correspondence
also tends to show that the rate of five lakhs was, in fact, even
acceptable to the plaintiff as the letter referred to the rate settled
B
by the plaintiff being quite old. But nothing was happening on the
ground. This leads the first defendant wife to state that she would
only handle the situation in any manner but it will not be possible
later on. The sale took place after more than a year. One thing is
clear that an offer was made on behalf of the first defendant to the
C plaintiff. [Paras 21, 22, 29 and 30] [268-A-F; 273-D-H; 274-A-B]
1.3 Apparently, in keeping with the family settlement, a
preference was indeed shown. The price was reasonable and
acceptable even to the plaintiff though he wanted a reduction.
Having regard to the health of the first defendant and the dire
D stage at which first defendant and his wife were placed, they had
made an attempt to comply with the condition in the family
settlement providing for preference. [Para 32] [274-G-H]
1.4 WHETHER THE HIGH COURT WAS RIGHT IN
HOLDING THAT THE COURTS WOULD NOT EXERCISE
E DISCRETION UNDER SECTION 20 OF THE SPECIFIC
RELIEF ACT, 1963 AS THE CONTRACT WAS NOT
SPECIFICALLY ENFORCEABLE?
The Appellate Court finds that the plaint schedule property
was owned by the father. It is found that the three sons get equal
F shares. The Trial Court finds that no offer was made by the first
defendant to the plaintiff. It decrees specific performance by
directing so on the basis that first defendant will have to make an
offer to the plaintiff and the third defendant after finding that the
first defendant was not bound to make an offer to sell at Rs.4.80
lakhs. The Appellate Court, on the other hand, has gone to decree
G specific performance by even directing possession of the property
to be given to the plaintiff by the second defendant. On the basis
of the terms and conditions of the agreement dated 31.03.1982,
there are clearly two palpable flaws in the findings and directions.
Admittedly, the second defendant was already occupying the
H
TILAK RAJ BAKSHI v. AVINASH CHAND SHARMA (D) THR. 255
LRS. & ORS.
property as a tenant. He can be evicted only in accordance with A
law even if everything is held in favour of the plaintiff. In other
words, even if it is found that the assignment by the first defendant
in favour of the second defendant is null and void, he has the
right to continue in possession unless he is evicted under the
relevant law for the eviction of tenants. Therefore, the direction
B
to deliver possession is clearly unsustainable. The second flaw
which vitiated the judgment of the first Appellate Court is that it
has proceeded to hold that plaintiff is entitled to specific
performance as per the terms and conditions of the agreement
dated 31.03.1982. The Appellate Court was in error in decreeing
specific performance on the basis that the family settlement C
without anything more, embodied a contract for sale of immovable
property. The terms of the agreement, viz., the price at which
the property is to be sold and purchased, are not spelt out in the
family settlement, as correctly noticed by the Trial Court. The
Appellate Court has not proceeded to hold that the plaintiff is
D
entitled to purchase the property at Rs.4.80 lakhs at which price
the first defendant has sold to the second defendant. If the decree
is treated as confirming the decree of the Trial Court, then, the
price at which it is to be purchased would only have been
ascertained on the basis of an offer which is made in pursuance of
the Trial Court’s judgment, and therefore, no decree for specific E
performance, as passed by the First Appellate Court, could
certainly have been passed. [Para 37] [276-A-H; 277-A-E]
1.5 Right to preemption is ordinarily born out of custom or
in terms of a statutory provision. This case does not concern
with the statutory right of preemption or custom. There is no F
case expressly set up in the plaint that what appellant is seeking
to enforce is a right of preemption. If the suit involved a right of
preemption, and proceeding on the basis that the appellant was
pursuing his secondary right to follow the property sold, then,
the relief would have been to substitute himself in place of the
buyer/second defendant. The right of preemption is not right of G
re-purchase. Even proceeding on the basis of it being a case of
preemption, as held by the High Court and by this Court, first
preference was given to the plaintiff. In this case, the concerned
clause, certainly does not place an absolute restriction on
H
256 SUPREME COURT REPORTS [2019] 10 S.C.R.
A alienation in favour of a stranger. All that it contemplates is an
offer being made to the brothers, once the first step of concurrence
in writing by the brothers for the sale is obtained. Therefore, the
appellant would not be justified in invoking the principle
underlying the right of preemption in this case. [Paras 43, 44]
[279-F-G; 280-D-G]
B
1.6 IMPACT OF ABSENCE OF WRITTEN
CONCURRENCE BY BROTHERS FOR SALE
The controversial clause, according to the appellant, falls
in two parts. Firstly, there must be a written concurrence from
C the two brothers, if the third brother wishes to sell his share.
The second part is that the offer must be made to the other
brothers before transfer is effected to a stranger. In this case,
the title to the share in the property of the first defendant is
traceable to the will executed by the father. The plaint reveals
that the legatees, viz., the brothers applied to the Estate Office
D and the property was transferred in favour of the brothers on the
terms and conditions in Memo dated 10.07.1981. One of the
conditions was that there will be no fragmentation of the site. It
is thereafter that the controversial agreement was entered into
between the brothers. Thus, the family arrangement was entered
E into by the brothers when their rights as owners had crystallized.
It was not subject to any condition. Being brothers, they could to
promote harmony and avoid future disputes, enter into a family
settlement. The first defendant has sold his share to the second
defendant. Under the clause, can the first defendant sell to a
stranger? He can sell provided there was a written concurrence
F by the other brothers for a sale and the offer is made to the other
brothers and it does not fructify into a sale for reasons which are
not attributable to the brother who wishes to sell. There was an
offer to the appellant by the first defendant. He has failed to act
upon it. The other brother has no case about offer not being made
G and he has not raised any dispute over the sale to the second
defendant. [Paras 45, 50 and 51] [280-H; 281-A; 284-B-F]
1.7 Thus, what is sought is specific performance. The
appellant proceeded in the suit on the basis that there is a contract.
A contract presupposes an offer which is accepted which means
H
TILAK RAJ BAKSHI v. AVINASH CHAND SHARMA (D) THR. 257
LRS. & ORS.
that there was an offer from the defendant. The correspondence, A
which fortifies in holding that there was an effective offer and it
did not materialize on account of any default on the part of the
plaintiff. Now, if the clause is broken down, it involves the
following steps. A brother announces his desire to sell his share.
He seeks written concurrence of the other brothers. A written
B
concurrence is given. Then, the next step is reached. The selling
brother offers to sell it to the other brothers. If they take the
offer and the price is agreeable to the parties, sale follows. If the
brothers do not wish to buy, the sale to the strangers is permitted.
In the above process, in the facts of this case, it is clear that the
appellant and the first defendant, without insisting on the written C
concurrence, went to the stage of offer to brothers. The appellant
has led the first defendant to assume, even without a written
concurrence, that the sale is permitted. The first defendant has
acted clearly on the basis that the requirement of the first stage
was not being insisted upon. Otherwise, he could have certainly
D
obtained the concurrence. Having thus acted in the matter, and
the second stage having been reached, when for reasons where
the fault cannot be attributed to the first defendant, the offer,
which the appellant himself describes as reasonable, was not
seized upon by the appellant, the third stage emerged. This meant
that it became open to the first defendant to sell to a stranger E
and which is what he did by it selling it to the second defendant.
Even proceeding to enforce the clause, the appellant is clearly
estopped from setting up the plea of absence of written consent
of the brothers. It would be inequitable, particularly when the
matter is considered in an appeal sourced under Article 136 of
F
the Constitution of India. [Paras 52, 53] [285-D-H; 286-A-B]
1.8 EFFECT OF PROHIBITION AGAINST
FRAGMENTATION OF PROPERTY IN QUESTION UNDER
THE CAPITAL OF PUNJAB (DEVELOPMENT AND
REGULATION) ACT, 1952
G
The Capital of Punjab (Development and Regulation) Act,
1952 (hereinafter referred to as ‘the 1952 Act’ for short) defines
“site” in Section 2(f) as meaning “any land which is transferred
by the Central Government under Section 3. Section 4 of the
H
258 SUPREME COURT REPORTS [2019] 10 S.C.R.
A 1952 Act confers power upon the Central Government and the
Chief Administrator to issue directions in respect of any site or
building in regard to the matters which are mentioned therein.
The word “transferee” is defined in Section 2(k) of the Act. Section
5 of the 1952 Act forbids erection or occupation of any building at
Chandigarh in contravention of Building Rules made under sub-
B
Section (2). The word “site” means any land which is transferred
under Section 3 of the 1952 Act. When it comes to the terms of
Section 3, it contemplates power with the Central Government
to transfer by auction, allotment or otherwise any land or building
belonging to the Government in Chandigarh on such terms and
C conditions as may subject to any Rules that can be made under
the Act, the Government thinks fit to impose. Thus, though it is
open to the Central Government to transfer either land or building
belonging to the Government in Chandigarh under Section 3 of
the 1952 Act, the word “site” is confined to only the land which
is transferred by the Central Government under Section 3. In
D
fact, the word “building”, as defined in the Act, points to any
construction or part of construction transferred under Section 3.
It includes outhouse, stable, cattle shed and garage and also
includes any building erected on any land transferred by the
Central Government. The construction must be intended to be
E used for residential, commercial, industrial or any other purposes.
A clear distinction is maintained between “site” and “building”.
The Chandigarh (Sale of Sites and Building) Rules, 1960 came to
be made. Section 22 of the 1952 Act confers power upon the
Central Government to make the Rules for various purposes,
which are mentioned in sub-Section (2). It includes Sections 2(a),
F
2(d), 2(e) and 2(h) of the 1952 Act. Rule 14 of the Chandigarh
Sale of Sites and Building Rules, 1960 provides that no
fragmentation of any site is permitted. Subsequently, in exercise
of powers under Sections 3 and 22 of the Act, Chandigarh Estate
Rules, 2007 came to be made. Rule 16 deals with fragmentation/
G amalgamation. [Paras 54, 56, 58-60] [286-C-D; 287-B, D, G-H;
288-A-C, F]
1.9 While it may not be true that the issue of fragmentation
was not raised in the courts, the appellant is not able to persuade
the Court to hold that the assignment in favour of the second
H
TILAK RAJ BAKSHI v. AVINASH CHAND SHARMA (D) THR. 259
LRS. & ORS.
defendant is vulnerable on the basis that it involves fragmentation. A
The deposition of the plaintiff about partition of the house into
three portions has been noticed. The fact that one-third share
has been duly transferred and mutated in the name of the first
respondent/second defendant by the Chandigarh Administration,
has been noted. The second defendant has produced the
B
communication dated 19.12.1997 which indicates the transfer of
rights of site in Sector 19A held by first defendant is noted in
favour of the second defendant subject to certain conditions. This
is obviously before the 2007 Rules came into force. In the light
of the aforesaid facts, the appellant cannot be permitted to impugn
the transaction on the said ground. The contentions of the C
appellant are rejected. [Paras 63-66] [289-A-H; 290-A-B]
K. Naina Mohammed (Dead) Through Lrs. v. A.M.
Vasudevan Chettiar (Dead) Through Lrs.and Others
(2010) 7 SCC 603 : [2010] 7 SCR 927 ; Hari Shankar
Singhania and Others v. Gaur Hari Singhania and D
Others (2006) 4 SCC 658 : [2006] 3 SCR 726 ;
Muhammad Raza (since deceased) and others v. Abbas
Bandi Bibi AIR 1932 PC 158 – referred to.
Keshavlal Lallubhai Patel v. Lalbhai Trikumlal Mills Ltd.
AIR 1958 SC 512 : [1959] SCR 213 ; Bishan Singh v. E
Khazan Singh AIR 1958 SC 838 : [1959] SCR 878
– relied on.
Case Law Reference
[2010] 7 SCR 927 referred to Para 12
F
[2006] 3 SCR 726 referred to Para 12
AIR 1932 PC 158 referred to Para 12
[1959] SCR 213 relied on Para 20
[1959] SCR 878 relied on Para 41
G
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 1524-
1525 of 2019.
From the Judgment and Order dated 02.02.2015 of the High
Court of Punjab and Haryana at Chandigarh in R.S.A. Nos. 3496 of
2012 (O&M) and 3497 of 2012 (O&M). H
260 SUPREME COURT REPORTS [2019] 10 S.C.R.
A Nidhesh Gupta, Sr. Adv., Tarun Gupta, Ms. Vriti Gujral, Ms. Pallavi
Singh, Ms. Japneet Kaur, Advs. for the Appellant.
Dhruv Mehta, Sr. Adv., Siddharth Mittal, Prabhat Kumar, Advs.
for the Respondents.
The Judgment of the Court was delivered by
B
K. M. JOSEPH, J.
1. These appeals arise out of special leave petitions and are
directed against the impugned judgment of the High Court of Punjab &
Haryana by which the second appeal filed by the second defendant in
C the suit has been allowed and the civil suit filed by the appellant herein
has been dismissed. Parties will be referred to with reference to their
position in the Trial Court.
2. The suit scheduled property located in Chandigarh was owned
by one Kirpa Ram Bakshi. He had executed a registered will on
D 04.09.1974 in favour of the plaintiff, the first defendant and another son
who was the 3rd defendant in the suit. Thereafter, the disputed house
was transferred in favour of the aforesaid three persons by the Estate
Officer. The plaintiff filed the present suit from which the appeal arises
alleging that on 31.03.1982 there was an agreement entered into between
the three brothers namely himself, the first defendant and the younger
E brother. Clause (5) of the agreement provides as follows:
“The individual portions of New Delhi and Chandigarh and
agricultural land cannot be sold without concurrence of all three
in writing and if it is sold on agreement of three, first preference
to be given to both other brothers. Any special renovation after
F expiry of joint upkeep is done by any one of us and full accounts
are maintained, then in the event of total sale of any unit, the extra
amount spent on special renovation (subject to reasonable
depreciation/appreciation) by individual will be payable to the
individual over and above 1/3rd share of the sale proceeds.”
G 3. It was alleged that the said clause was violated by his brother,
the first defendant and without getting his written concurrence for the
same the first defendant sold the suit scheduled property to the second
defendant. It was alleged that this will result in fragmenting the site
which is prohibited and it was also alleged that the sale was void. The
H
TILAK RAJ BAKSHI v. AVINASH CHAND SHARMA (D) THR. 261
LRS. & ORS. [K. M. JOSEPH, J.]
suit came to be filed for declaring the sale deed in favour of the second A
defendant void and for specific performance directing first defendant to
execute sale deed in respect of one-third share to the plaintiff.
4. The second defendant contested the matter. It was inter alia
contended that the family settlement was forged and fabricated. The
plaintiff did not have any preferential right. The second defendant was B
a bonafide purchaser. The plaintiff never intended to purchase the
property. The share of the first defendant was transferred to the second
defendant by the Estate Officer of Chandigarh on his application.
5. The trial Court found that the family arrangement was indeed
executed. It is a genuine document and not forged or fabricated. The C
suit filed on 03.02.1998 challenging the sale deed dated 12.11.1997 was
filed within time. The second defendant was found not to be a bonafide
purchaser. He was aware of giving preference by the first defendant to
the appellant. It was further found that the plaintiff was never offered
to purchase the share of the first defendant. The trial court found that
the plaintiff was entitled to specific relief and declared the sale null and D
void. The plaintiff was entitled to specific performance as per the terms
and conditions of the agreement dated 31.03.1982 to purchase the share
of the first defendant.
6. The second defendant appealed against the judgment. The
first Appellate Court found that the family arrangement was genuine. It E
referred to the correspondence between the plaintiff and the wife of the
first defendant. He proceeded to find that the only controversy was
whether the first defendant has offered to the plaintiff to purchase his
one-third share or whether the plaintiff never came forward for the
same. The first Appellate Court found that no document was produced F
to show that the first defendant himself offered. The court further goes
on to find letters by the wife of the first defendant which reveals that
offer was given to the plaintiff to purchase. As per clause (5) of the
family arrangement, the concurrence of the plaintiff was not taken in
writing before selling to the second defendant. As far as the offer is
concerned the Appellate Court referred to the correspondence. G
Defendant no.1 was not ready to accept earnest money. The house
was located at Chandigarh. The sale could be effected only at
Chandigarh. Plaintiff visiting Bhilai, where first defendant lived, would
not have been served any purpose. Reference is made to the telephone
bills of the plaintiff to prove communication between him and the first H
262 SUPREME COURT REPORTS [2019] 10 S.C.R.
A defendant regarding sale. The sale in favour of the second defendant
was effected through power of attorney. No offer was made for selling
to the plaintiff by the first defendant through a power of attorney. It is
found that though P19 shows that a deal was struck but because the
wife of the first defendant was pressing hard for the plaintiff to come to
Bhilai, it did not work. The plaintiff was found ready and willing. The
B
first defendant has violated the family settlement. The second defendant
was aware from the wife of the first defendant that she wanted to sell to
the plaintiff. The second defendant was a tenant who was aware of the
family arrangement. There was no notice issued to the other sharers.
The appeal of the second defendant was dismissed. That apart the
C Appellate Court also allowed the cross appeal filed by the plaintiff and
directed the second defendant to hand over possession to the plaintiff.
PROCEEDINGS BEFORE THE HIGH COURT
7. The High Court after referring to the correspondence between
the parties found that the first defendant has indeed offered to sell his
D share to the plaintiff. Plaintiff could have sent a draft. The precarious
condition of the first defendant, having regard to his health, was known
to the plaintiff.
8. The High Court found that there was no valid and binding
contract between the parties. No price has been fixed nor there is any
E penalty clause, i.e., in case of failure, either one of the parties can enforce
the agreement (obviously clause (5) which we have already quoted). In
view of the omissions of the appellant to act on the offer, he has lost the
preemptory right to purchase the share and it led to the sale in favour of
the second defendant. The High Court proceeds to hold that clause (5)
F relied upon by the plaintiff is not only vague but indefinite and void. The
plaintiff cannot be permitted to exercise belatedly after he has lost to
encash offer reflected in the letters which we will refer to hereinafter.
9. It is also found that the second defendant being the tenant
could only be evicted under the law relating to tenants.
G 10. The High Court noted that the fragmentation may not be
possible but solution was found in Sections 2, 3 and 4 of the Partition Act
and by ascertaining market value they could buy each other’s share.
Section 22 of the Hindu Succession Act was found to have been declared
unconstitutional by this Court. Appellant had not accepted the offer.
H
TILAK RAJ BAKSHI v. AVINASH CHAND SHARMA (D) THR. 263
LRS. & ORS. [K. M. JOSEPH, J.]
Reference was made to Section 20 of the Specific Relief Act and it was A
found that in the circumstances, appellant was not entitled to the
discretionary relief.
11. We heard Shri Nidhesh Gupta, learned senior counsel
appearing on behalf of the appellant and Shri Dhruv Mehta, learned
senior counsel appearing on behalf of the first respondent (second B
defendant).
12. Learned senior counsel for the appellant would contend that
this is a clear case of family settlement. The family settlement contained
two distinct conditions. Not only preference must be given to the other
sharers, the first defendant was obliged to obtain the written concurrence C
of the other sharers. He would submit that courts lean in favour of
family settlements and uphold the same. In this case, there is no absolute
prohibition against sale of his share. It is only a partial prohibition. The
first defendant could sell his share to his brothers. The object behind
clause (5) was highlighted to be that third party is not rendered entitled
to the family property. Such a partial prohibition has been approved by D
both the Privy Council and also by this Court. In this regard, he drew
our attention to the judgments of this Court in the case of K. Naina
Mohammed (Dead) Through Lrs. v. A.M. Vasudevan Chettiar (Dead)
Through Lrs.and Others1, Hari Shankar Singhania and Others v. Gaur
Hari Singhania and Others2 and also judgement of the Privy Council in E
the case of Muhammad Raza (since deceased) and others v. Abbas
Bandi Bibi3. He also drew our attention to the judgment of this Court in
Hari Shankar Singhania (supra) to contend that family settlement is
treated differently from any other formal commercial settlement. This
is what the court held:
F
“A family settlement is treated differently from any other formal
commercial settlement as such settlement in the eye of the law
ensures peace and goodwill among the family members. Such
family settlements generally meet with approval of the courts.
Such settlements are governed by a special equity principle where
the terms are fair and bona fide, taking into account the well- G
being of a family.
1
2010 (7) SCC 603
2
2006 (4) SCC 658
3
AIR 1932 PC 158 H
264 SUPREME COURT REPORTS [2019] 10 S.C.R.
A Technicalities of limitation, etc. should not be put at risk of the
implementation of a settlement drawn by a family, which is essential
for maintaining peace and harmony in a family. …”
13. Next, he would contend that under Rule 16 of the Chandigarh
Estate Rules, 2007, no fragmentation or amalgamation of any of the site
B is permissible. Therefore, in regard to the sale deed in favour of the
second defendant the High Court overlooked that the aforesaid rule shall
be observed in its breach. Next he was at pains to demonstrate before
us that the plaintiff was always willing and ready to take the share of the
first defendant. The correspondence, however, revealed that the wife of
the first defendant was insisting that the entire consideration must be
C paid at Bhilai where the first defendant resided, whereas the conveyance
could be effected only at Chandigarh where the plaint schedule property
is located. The plaintiff was ready to accommodate the reasonable
demands of the first defendant but the property came to be conveyed to
the second defendant.
D 14. It was argued by Shri Nidhesh Gupta, learned senior counsel
for the appellant that even if preference was given to the plaintiff, he
must succeed on the ground that clause (5) of the family settlement
envisages written concurrence from the other sharers before a valid
sale deed was made by the first defendant.
E 15. Per contra, Shri Dhruv Mehta, learned senior counsel,
appearing on behalf of the first respondent, supports the order of the
High court. He also took us to the correspondence and pointed out the
plight of the first defendant whose health was in a precarious condition
and he wanted money urgently. An offer was made. The offer, he
F would point out, was not unreasonable namely Rs.5 lakhs but the plaintiff
was not prepared to act on the offer leaving no option with the first
defendant except to sell the share to the second defendant. He would
further point out that the second defendant was actually a bonafide
purchaser of the property and the Trial Court and the first Appellate
Court erroneously found that he was not a bona fide purchaser on the
G basis that he deposed that the wife of the first defendant told him about
the offer made to the appellant. He would point out that this conversation
did not establish that respondent was aware of the family arrangement
and therefore, the second defendant was indeed a bonafide purchaser.
H
TILAK RAJ BAKSHI v. AVINASH CHAND SHARMA (D) THR. 265
LRS. & ORS. [K. M. JOSEPH, J.]
He would further complain that first Appellate Court has gone one step A
further than the Trial Court and even ordered that second defendant to
put the plaintiff in possession even though undisputedly he was a tenant
who was entitled to protection of the statute against eviction except in
accordance with law.
16. The following points arise for our decision: B
A. Whether there was a family settlement?
B. Whether the High Court was right in, without even a plea,
holding that the family settlement is vague and unenforceable
and void?
C
C. Whether an offer was made by the first defendant to the
plaintiff before the sale of the property to the second
defendant?
D. Whether the High Court was right in holding that the courts
could not exercise discretion under Section 20 of the Specific D
Relief Act, 1963 as the contract is not specifically
enforceable?
E. What is the impact of absence of written concurrence by
brothers for sale?
F. What is the effect of the prohibition against fragmentation E
of poperty in question under the Capital of Punjab
(Development and Regulation) Act, 1952?
FINDINGS
WHETHER THERE WAS A FAMILY SETTLEMENT?
F
17. As far as the first question is concerned, whether there was a
family settlement, at paragraph 6 of the plaint, the family settlement was
pleaded. The answer to the same, by the second defendant, is that the
alleged family settlement dated 31.03.1982 is a forged and fabricated
document. We can safely conclude that no material has been placed by
the second defendant to establish that the alleged family settlement is a G
forged document. There is no case that it is not a family settlement. The
settlement is arrived at between the plaintiff, his brother-the first
defendant and another brother-third defendant. Therefore, we can
proceed on the basis that there is a family settlement.
H
266 SUPREME COURT REPORTS [2019] 10 S.C.R.
A WHETHER THE FAMILY SETTLEMENT WAS VAGUE?
18. With regard to the finding by the High Court that whether the
family settlement is vague, unenforceable and void, the complaint of the
plaintiff is that there is no pleading that family settlement is vague and
unenforceable. Section 29 of the Indian Contract Act, 1872 (hereinafter
B referred to as ‘the Contract Act’, for short), reads as follows:
“29. Agreements void for uncertainty.—Agreements, the
meaning of which is not certain, or capable of being made certain,
are void. —Agreements, the meaning of which is not certain, or
capable of being made certain, are void.” Illustrations
C (a) A agrees to sell B “a hundred tons of oil”. There is nothing
whatever to show what kind of oil was intended. The
agreement is void for uncertainty.”
(b) A agrees to sell B one hundred tons of oil of a specified
description, known as an article of commerce. There is no
D uncertainty here to make the agreement void.”
(c) A, who is a dealer in coconut-oil only, agrees to sell to B
“one hundred tons of oil”. The nature of A’s trade affords an
indication of the meaning of the words, and A has entered
into a contract for the sale of one hundred tons of coconut
E oil.”
(d) A agrees to sell B “all the grain in my granary at Ramnagar”.
There is no uncertainty here to make the agreement void.”
(e) A agrees to sell to B “one thousand maunds of rice at a price
to be fixed by C”. As the price is capable of being made
F
certain, there is no uncertainty here to make the agreement
void.”
(f) A agrees to sell to B “my white horse for rupees five hundred
or rupees one thousand”. There is nothing to show which of
the two prices was to be given. The agreement is void.”
G
19. Section 93 of the Indian Evidence Act, 1872, reads as follows:
“93. Exclusion of evidence to explain or amend ambiguous
document.—When the language used in a document is, on its
H
TILAK RAJ BAKSHI v. AVINASH CHAND SHARMA (D) THR. 267
LRS. & ORS. [K. M. JOSEPH, J.]
face, ambiguous or defective, evidence may not be given of facts A
which would show its meaning or supply its defects. Illustrations
(a) A agrees, in writing, to sell a horse to B for “Rs. 1,000 or
Rs. 1,500”. Evidence cannot be given to show which price
was to be given.
(b) A deed contains blanks. Evidence cannot be given of facts B
which would show how they were meant to be filled.”
20. The question is not res integra. A Bench of three learned
Judges of this Court considered the very same question in Keshavlal
Lallubhai Patel v. Lalbhai Trikumlal Mills Ltd.4 and held as follows:
C
“10. There is one more point which must be considered. It
was strongly urged before us by the appellants that, in the trial
court, no plea had been taken by the respondent that the agreement
for the extension of time was vague and uncertain. No such plea
appears to have been taken even in the grounds of appeal preferred
by the respondent in the High Court at Bombay; but apparently D
the plea was allowed to be raised in the High Court and the
appellants took no objection to it at that stage. It cannot be said
that it was not open to the High Court to allow such a plea to be
raised even for the first time in appeal. After all, the plea raised is
a plea of law based solely upon the construction of the letter which E
is the basis of the case for the extension of time for the
performance of the contract and so it was competent to the appeal
court to allow such a plea to be raised under Order 41 Rule 2 of
the Code of Civil Procedure. If, on a fair construction, the, condition
mentioned in the document is held to be vague or uncertain, no
evidence can be admitted to remove the said vagueness or F
uncertainty. The provisions of Section 93 of the Indian Evidence
Act are clear on this point. It is the language of the document
alone that will decide the question. It would not be open to the
parties or to the court to attempt to remove the defect of vagueness
or uncertainty by relying upon any extrinsic evidence. Such an G
attempt would really mean the making of a new contract between
the parties. That is why we do not think that the appellants can
now effectively raise the point that the plea of vagueness should
not have been entertained in the High Court.”
(Emphasis supplied)
4
AIR 1958 SC 512 H
268 SUPREME COURT REPORTS [2019] 10 S.C.R.
A 21. Therefore, the mere fact that a plea is not taken, that the
clause in question is vague, and hence, unenforceable and void will not
stand in the way of the Appellate Court looking into the contract and, if
on its terms, it finds it to be vague and unenforceable, it can be so held.
22. The question is to whether clause (5) in question is vague and
B unenforceable. We noticed that it provides that the property in question
cannot be sold without concurrence of the three brothers in writing. If it
is sold on the agreement of three brothers, the first preference is to be
given to both other brothers. When it is stated that the property cannot
be sold without concurrence of the three brothers in writing, there cannot
be any doubt about its meaning. It means what it says which is that
C should a brother want to sell the property, the other two brothers must
agree in writing. This clause cannot be described as vague. This is
different from the aspect as to whether it is a clog on ownership or
whether it is otherwise unenforceable but it cannot be described as being
vague. The second contention is that when a decision is taken by the
D brothers permitting sale by a third brother, then, first preference is to be
given to both the other brothers. What is intended is that after the written
concurrence is obtained for selling in order that property is not sold to a
third party/stranger, the other two brothers are given an opportunity to
buy that property. This portion of the clause cannot also be described as
vague as such. No doubt, it could be argued that the price at which the
E offer is to be made is not expressly mentioned. We have found that the
clause is part of a family settlement between brothers. Courts ordinarily
lean in favour of family settlement. Clause (5) itself does not contain an
agreement to sell. It only contemplates a preferential offer being treated
as a condition precedent to a brother affecting a sale outside of a family
F to a stranger. The price can only be understood as market price which
would be the fair price. Therefore, we are of the view that the finding by
the High Court that contract is vague cannot be sustained.
WHETHER OFFER WAS MADE BY DEFENDANT NO.1 TO
PLAINTIFF
G 23. We will first ascertain from the correspondence admittedly
entered into between the plaintiff and the wife of the first defendant,
what actually transpired. Ex. P16 was written on 16.2.1996 by Shyama
Mehta, wife of the first defendant, the same reads as under:
H
TILAK RAJ BAKSHI v. AVINASH CHAND SHARMA (D) THR. 269
LRS. & ORS. [K. M. JOSEPH, J.]
“Dear Santosh and Tilak ji, A
Namaskar
I hope you people are hale and hearty. I had received a letter
with respect to Havan being got performed by Buaji. I had also
got a Havan performed on First. God may give peace to the sole.
The almighty may give place to her near him. She had been B
relieved of her difficulties.
I am once again writing to you that if you or Kuku is interest in
purchase of our portion, then let us finalize the deal. From our
side, the deal can be closed. From our side, Rs.5,00,000/- is final
and I am making last request. I am sending last request and I C
want that before the property goes into the hands of children, the
brother should settle. The health of Mehtaji is deteriorating day
by day. He is not in a position to travel. I hope you would also
like that your son should remain with you. You are elder and
living on the ground floor, therefore, first offer is being made to D
you and second offer would be made to Kuku and only thereafter,
I would offer the sale of my portion to outside. What is the status
of eyes of Santosh? I hope there would be improvement. Please
inform as to what Mamta is doing these days. She must have
completed her degree. Kindly convey my love to Mani, Lakshmita
and Dhruv. Please send photographs of Dhruv and Lakshmita E
and Naini. These days, Dhruv must be quite talkative. Please
come over to Bhilai. We could be very happy. Mehtaji also joins
me in wishing you Namaskar and love to children.
Awaiting your reply,
F
Yours Shyama”
24. On 10.03.1996 by Exhibit P17, the wife of the first defendant
wrote as follows:
“Dear Tilakji and Santoshji
Namaskar G
We are well here and I hope everyone would be hale and hearty.
I heard about death of sister-in-law of Santoshji. It is very
shocking. May God giver her soul peace. I had a talk with Tilakji
and I am responding to the points he asked :-
H
270 SUPREME COURT REPORTS [2019] 10 S.C.R.
A 1. What would be the earnest money?
2. How the payment would be made?
3. What would be the rate?
4. Where the payment would be made and when the sale deed
B would be executed?
5. How the house would be got vacated?
1 The earnest money can be paid Rs.1 lac or two; even the
entire payment can be made and signatures can be got done.
2 Half payment would be through draft and the remaining half
C
would be in cash.
3 As regards the rates, we have already quoted quite low rates
and this is final. I want to finalize the deal without telling Manu
because it we are not able to finalize, then next offer would be
to an outsider. If the deal is finalist by 1st April, after 15th
D
Manu would come and if he comes, then he would not let the
house be sold.
4 Payment will have to be made at Bhilai on coming to Bhilai
because Mr. Mehta is not in a position to travel.
E 5 After giving the earnest money, we would issue notice for
vacating the house or adopt any other method (not
readable)…….We will see.
I hope you have got answer to all the points. Please reply in
writing immediately or give me a phone call.
F Kindly convey my love to children and regards to both of you.
Sd/-Shyama”
25. There is no response again to the letter by the plaintiff though
he claimed that he responded by a letter dated 23.02.1996 and 22.03.1996.
Again on 01.04.1996 P18 was addressed by the plaintiff to the first
G
defendant and his wife which inter alia read as follows:
“Fax No.0788-324339
Fax for Sh. V.D. Mehta,
48/6, Nehru Nagar (West)
Bhilai (MP)
H
TILAK RAJ BAKSHI v. AVINASH CHAND SHARMA (D) THR. 271
LRS. & ORS. [K. M. JOSEPH, J.]
Res.Tele-324651 A
13/19-A, Chandigarh
01.04.1996
Respected brother and Shyama Bhabi,
Namaskar, Ref. Today morning phone talks. In response to B
Bhabi’s letter dated 10.03.1996, replied on 22.03.1996. Main points
are (1) Your reply pointwise received and discussed with family
and in principal your offer is acceptable to us broadly. Please
reconsider the matter and try to visit both of your along with Many
Chandigarh. Also we are aware of brother’s health but if you try
C
can come here, we will complete the formalities in one or two
working days and give Biana one lac plus agreement to sell will
be done. At present, matrimonial talks of Mamta are in advanced
stayed with 4/5 parties and their/our visits to each other are likely.
Our top priority is Mamta’s marriage and second priority is about
your portion and Naini shifting to us. Your reasonable offer has D
come at such a time that it is hard on me to take decision. From
my side, I will do my utmost best to complete the deal. Rest it is
God’s wish. I and Santosh both are about 60 years old and are
keeping indifferent health. I am due to retire in August this year.
Please try to reduce the total value if there is some scope. In
E
case you decide not to come to Chandigarh, I will come for one or
two working days to you. Please inform convenient trains from
Delhi and for return journey try to make II sleeper reserve up to
Delhi/Ambala. Hope brother’s health is improving and all children
are happy at their places and so are grand children. Please reply
soon or phone or fax at my office No.0172-703603 “Attn: Tilak F
Raj Bakshi” With regards, your affectionately-Tilak Raj Bakshi.”
26. To the same P19 letter is sent by the wife of the first defendant,
the same reads as under:
“Dear Tilak,
G
Namaskar
I am in receipt of your letter and fax. I was to consult my children,
so there was some delay. Manik is not ready to give you the
portion of the house. He is quite angry but I have spoken to Rajiv.
H
272 SUPREME COURT REPORTS [2019] 10 S.C.R.
A He has told me that if your goodself are interested in purchasing,
then you are requested to come to Bhilai with all the payment in
one go and get all the papers signed. We do not wish to inform
him because he is in Dubai for one month with Anju. He has got
his visa extended by one month and if till then his job is fixed, then
he would stay otherwise he would come back and do something
B
here. I do not wish to now receive earnest money. Please make
the final payment as the prices in Chandigarh are increasing quite
rapidly and the rate settled by you is quite old. Therefore, I have
given you offer because I wan in dire need of money. Now the
need is yours. If the deal is finalized before Manu coming back,
C then it is alright because health of Mehtaji is also very delicate. In
any case, I would handle the situation in any manner but it would
not be possible later on.
For coming to Bhilai, you can catch Chhattisgarh Express from
Ambala or you can catch Mahamaya super fast which starts at
D 2.20 P.M from Delhi. There is another train from Nizammuddin
which runs three days a week which is again good train. Please
tell me on telephone whenever you wish to come. I would get the
seat booked because during summer vacation, there would be
heavy rush.
E Convey love to children. Namaskar to both of you.
Sd/-Shyama”
27. There is no response to this letter by the plaintiff. It is thereafter
that the sale was affected in favour of the second defendant on 12.11.1997.
It is undoubtedly true that learned counsel for the plaintiff drew our
F attention to the telephone bills on record which go to show that appellant
was engaged in communication defendant No. 1 or his wife in regard to
their property and their interest in purchasing the property. From the
correspondence, we are inclined to find as follows:
In letter dated 16.02.1996, he wrote that if the plaintiff or Kuku is
G interested in purchasing the portion, then let the deal be finalized.
Consideration of Rupees 5 lakhs was final and she was making
the last request before the property goes into the hands of the
children, the brother should settle. The health of Mehtaji (first
defendant) was deteriorating day by day. He was not in a position
H
TILAK RAJ BAKSHI v. AVINASH CHAND SHARMA (D) THR. 273
LRS. & ORS. [K. M. JOSEPH, J.]
to travel. Plaintiff being elder and living on the ground floor, offer A
was made to him and second offer made to Har Krishan Lal alias
Kuku (the other brother of the first defendant) and only thereafter
the offer would go to outside.
28. In the second letter dated 10.03.1996, she wrote to the plaintiff
and his wife. It was mentioned that earnest money could be paid Rupees B
one lakh or two, half payment was to be through draft and remaining
half was to be in cash. It is specifically stated that as regards the rates
they have already quoted low rates and it is final. It was pointed out that
if the deal is not finalized by 1st April, after 15th, if Manu, apparently, the
son of the first defendant came, he will not allow the property to be sold.
Payment was to be made at Bhilai on going to Bhilai, as first defendant C
was not in a position to travel.
29. In the last letter dated 01.04.1996, it is written by the plaintiff
to the first defendant and his wife. He has shown awareness of the first
defendant’s health. Next he pointed out matrimonial talks of Mamta’s
(daughter) that was in an advanced stage and 4/5 parties were in talks, D
the marriage was the top priority and second priority was about the
portion of the first defendant. Thereafter, it is stated that a reasonable
offer of the first defendant has come at such a time that it is hard for him
to take a decision. He promised to do his best to complete the deal.
Next, he would say that an attempt may be made to reduce the total E
value if there is some scope.
30. Correspondence indeed establish, therefore, that the health of
the first defendant was poor and it was deteriorating and he was in
urgent need for money. It is quite clear that the first defendant had
made offer to the appellant for selling his share for Rupees Five Lakhs. F
It is also quite clear that the plaintiff himself acknowledged in the letter
dated 01.04.1996 that the offer of Rupees five lakhs was reasonable.
Appellant, quite clearly, has articulated his pressing priority to be to
conduct the marriage of his daughter. This means that he was hard
pressed for money. Otherwise there was no need for him after finding
the offer to be reasonable to request the first defendant and his wife to G
try to reduce the value. Letter dated 15.04.1996 written by the first
defendant’s wife shows that she did not wish to then receive earnest
money and she finally demanded that final payment be made as prices in
Chandigarh were increasing quite rapidly and rate settled by the plaintiff
H
274 SUPREME COURT REPORTS [2019] 10 S.C.R.
A was quite old. She emphasized that the offer was given because she
was in dire need of money. Now the need is of the plaintiff. This
correspondence also tends to show that the rate of five lakhs was, in
fact, even acceptable to the plaintiff as the letter referred to the rate
settled by the plaintiff being quite old. But nothing was happening on the
ground. This leads the first defendant wife to state that she would only
B
handle the situation in any manner but it will not be possible later on.
The sale took place after more than a year. One thing is clear that an
offer was made on behalf of the first defendant to the plaintiff.
31. We may also notice that in his deposition as PW4, plaintiff has
stated that it is correct that three brothers had partitioned amongst
C themselves, the house in question, by making three portions A, B, and
portion. He then says, it is wrong to suggest that each owner came into
possession of its respective portion which fell to him on partition. Portion
A fell to apparently the plaintiff. He does not remember to whom portion
B felt. He does not remember who became owner of portion C. He
D claims to be in possession of the entire house after partition. The first
defendant let out his share of portion 15-16 years before to the second
defendant, he deposes. He deposes that it is correct that he was offered
to purchase first defendant’s one-third share vide Exhibit P16. The
agreement could not be executed as per the offer because defendant
never turned up in Chandigarh. He was ready to make the entire payment
E while coming at Chandigarh, since the property is in Chandigarh. An
amount of Rs.5 lakh was settled as consideration amount. (It may be
noted that plaintiff, in P18 letter writes “please try to reduce the
total value, if there is some scope). He further says, it is correct that
he had offered in that letter-Exhibit P19 to get the payment at Bhilai and
F after the payment, the documents will be executed. He volunteered and
stated that since the documents could not be executed at Bhilai as the
property in question is at Chandigarh, he never made any final payment
to the first defendant in Bhilai.
32. Apparently, in keeping with the family settlement, a preference
G was indeed shown. The price was reasonable and acceptable even to
the plaintiff though he wanted a reduction. Having regard to the health
of the first defendant and the dire stage at which first defendant and his
wife were placed, we cannot for a moment but hold that they had made
an attempt to comply with the condition in the family settlement providing
for preference.
H
TILAK RAJ BAKSHI v. AVINASH CHAND SHARMA (D) THR. 275
LRS. & ORS. [K. M. JOSEPH, J.]
WHETHER THE HIGH COURT WAS RIGHT IN HOLDING A
THAT THE COURTS WOULD NOT EXERCISE DISCRETION
UNDER SECTION 20 OF THE SPECIFIC RELIEF ACT, 1963 AS
THE CONTRACT WAS NOT SPECIFICALLY ENFORCEABLE?
33. Next question we must pose and answer is whether the High
Court was right in holding that the courts would not exercise discretion B
under Section 20 of the Specific Relief Act, 1963 as the contract was
not specifically enforceable.
34. In this regard, the question would arise in the first place as to
which is the contract which is sought to be enforced. It is pleaded in the
plaint that first defendant was interested in disposing of his share and C
the plaintiff was ready and willing to purchase the share of first defendant.
It is specifically averred that the third defendant (the other brother) did
not show any interest in purchasing share of the fist defendant. Finally,
the relief sought is by way of decree for specific performance directing
the defendant to sell by the sale of one-third share in the house to the
plaintiff and handover vacant possession of the demised portion to the D
plaintiff. This is apart from the relief against the sale in favour of the
second defendant.
35. Now, let us see the judgment of the Trial Court. The Trial
Court proceeds to hold inter alia that there is a family settlement, there
is correspondence and there are telephone bills. They made out the case E
that the plaintiff was never offered to purchase the share of the first
defendant as per the terms and conditions of the family settlement. The
sale in favour of the second defendant is null and void, he not being the
bonafide purchaser. The plaintiff has the right of first preference to
purchase. The sale consideration in favour of the second defendant is F
Rs.4.80 lakhs, but the first defendant is not bound to sell his share for
that amount. However, he is bound to offer the plaintiff and defendant
no.3 for purchase of that share before selling it to anybody else as no
specific amount was mentioned as sale consideration in the family
settlement. On these findings, the Trial Court decreed that the plaintiff is
entitled to specific performance as per the terms and conditions of the G
agreement dated 31.03.1982 to purchase the share of defendant no.1.
Thus, it can be seen that the family settlement has been understood as
the agreement and the plaintiff is entitled to specific performance of the
agreement.
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276 SUPREME COURT REPORTS [2019] 10 S.C.R.
A 36. The first Appellate Court finds that it is admitted that the house
belonged to the father of the plaintiff, first defendant and third defendant.
He left behind him a registered will bequeathing properties including the
plaint schedule house. It was found that the only controversy was whether
offer was made to purchase the one-third share and whether the plaintiff
came forward to accept the offer. It was further found that concurrence
B
of the plaintiff in writing was not taken before transferring the property
to the second defendant. The plaintiff was ready and willing but it was
the first defendant who violated the terms of the family settlement. The
Appellate Court goes further than the Trial Court and allowed the cross-
appeal of the plaintiff and decreed that the second defendant will handover
C vacant possession to the plaintiff, finding that the relief of delivery was a
consequential relief liable to be granted. It will be remembered that the
Trial Court has decreed the suit for specific relief on the reasoning that
under the family settlement, the first defendant has to give first preference
to the plaintiff and it was also found that the first defendant is not bound
to sell at an amount of Rs.4.80 lakhs for which first defendant has sold
D
to the second defendant. All that he was to do was that he was bound to
make an offer to the plaintiff before selling to anyone else.
37. A perusal of these judgments would reveal the following
aspects:
E 1. The Appellate Court finds that the plaint schedule property was
owned by the father. It is found that the three sons get equal
shares.
2. The Trial Court finds that no offer was made by the first
defendant to the plaintiff. It decrees specific performance by
F directing so on the basis that first defendant will have to make
an offer to the plaintiff and the third defendant after finding that
the first defendant was not bound to make an offer to sell at
Rs.4.80 lakhs. The Appellate Court, on the other hand, has gone
to decree specific performance by even directing possession of
the property to be given to the plaintiff by the second defendant.
G On the basis of the terms and conditions of the agreement dated
31.03.1982, there are clearly two palpable flaws in the findings
and directions. Admittedly, the second defendant was already
occupying the property as a tenant. He can be evicted only in
accordance with law even if everything is held in favour of the
H
TILAK RAJ BAKSHI v. AVINASH CHAND SHARMA (D) THR. 277
LRS. & ORS. [K. M. JOSEPH, J.]
plaintiff. In other words, even if it is found that the assignment A
by the first defendant in favour of the second defendant is null
and void, he has the right to continue in possession unless he is
evicted under the relevant law for the eviction of tenants.
Therefore, the direction to deliver possession is clearly
unsustainable. The second flaw which vitiated the judgment of
B
the first Appellate Court is that it has proceeded to hold that
plaintiff is entitled to specific performance as per the terms and
conditions of the agreement dated 31.03.1982. The Appellate
Court was in error in decreeing specific performance on the
basis that the family settlement without anything more, embodied
a contract for sale of immovable property. The terms of the C
agreement, viz., the price at which the property is to be sold and
purchased, are not spelt out in the family settlement, as correctly
noticed by the Trial Court. The Appellate Court has not
proceeded to hold that the plaintiff is entitled to purchase the
property at Rs.4.80 lakhs at which price the first defendant has
D
sold to the second defendant. If the decree is treated as
confirming the decree of the Trial Court, then, the price at which
it is to be purchased would only have been ascertained on the
basis of an offer which is made in pursuance of the Trial Court’s
judgment, and therefore, no decree for specific performance,
as passed by the First Appellate Court, could certainly have E
been passed.
38. This brings us to yet another question. Whether the terms of
the family settlement embodied a right of preemption and what is the
distinction between the right of preemption and right to purchase property
under an agreement to sell. F
39. The decision of this Court in K. Naina Mohamed (supra)
involved a will which was executed in favour of the two sisters of the
testator. The will inter alia provided that after the demise of both the
sisters who were to enjoy the properties during their life time, the male
heirs would get the two properties in question as absolute owners. The G
properties were mentioned as properties ‘A’ and ‘B’. It is, thereafter,
that clause (11) provided as follows:
“(11) As and when Savithri Ammal’s male heirs get and
enjoy A property and as and when Rukmani Ammal’s heirs get
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278 SUPREME COURT REPORTS [2019] 10 S.C.R.
A and enjoy B property, if any one of them wants to sell their share,
they have to sell to the other sharers only as per the market value
then prevailing and not to strangers.”
40. The learned counsel for the appellant had contended essentially
that the first defendant must honour his obligations under the settlement
B and what is involved here must be treated as a right of preemption. This
is for the reason that in the decision which we have referred to this
court, has taken the view that clause (11) was in the nature of right of
preemption which can be enforced by the male heir of either sister in the
event of sale of property by the male heir of the other sister. The words
“other sharers” were understood to mean, “the male heirs of the other
C sister”. We must, before we pronounce on this aspect, consider the
content of the right of preemption.
41. In Bishan Singh v. Khazan Singh5, this Court has articulated
the matter with clarity and we, hence, set out the following statement of
the law:
D
“7. Before attempting to give a satisfactory answer to the
question raised, it would be convenient at the outset to notice and
define the material incidents of the right of pre-emption. A concise
but lucid statement of the law is given by Plowden, J. in 136 P.R.
1894, at page 511, thus:
E
“A preferential right to acquire land, belonging to another
person upon the occasion of a transfer by the latter, does not
appear to me to be either a right to or a right in that land. It
is jus ad rem alienum acquirendum and not a jus in re
aliena…. A right to the offer of a thing about to be sold is not
F identical with a right to the thing itself, and that is the primary
right of the pre-emptor. The secondary right is to follow the
thing sold, when sold without the proper offer to the pre-emptor,
and to acquire it, if he thinks fit, in spite of the sale, made in
disregard of his preferential right.”
G The aforesaid passage indicates that a pre-emptor has two
rights: (1) inherent or primary right i.e. a right for the offer of a
thing about to be sold and (2) secondary or remedial right to follow
the thing sold.”
5
H AIR 1958 SC 838
TILAK RAJ BAKSHI v. AVINASH CHAND SHARMA (D) THR. 279
LRS. & ORS. [K. M. JOSEPH, J.]
42. We also think that it would be appropriate to refer to A
paragraph 11:
“11. The plaintiff is bound to show not only that his right is as
good as that of the vendee but that it is superior to that of the
vendee. Decided cases have recognized that this superior right
must subsist at the time the pre-emptor exercises his right and B
that that right is lost if by that time another person with equal or
superior right has been substituted in place of the original vendee
courts have not looked upon this right with great favour,
presumably, for the reason that it operates as a clog on the right
of the owner to alienate his property. The vendor and the vendee
are, therefore, permitted to avoid accrual of the right of pre-emption C
by all lawful means. The vendee may defeat the right by selling
the property to a rival pre-emptor with preferential or equal right.
To summarize: (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 D
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 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 E
that of the vendee or the person substituted in his place. (6) The
right being a very weak right, 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.”
(Emphasis supplied) F
43. Right to preemption is ordinarily born out of custom or in terms
of a statutory provision. We are not, in this case, concerned with the
statutory right of preemption or custom. We would necessarily have to
fall back on first principles relating to preemption, which we feel, have
been explained in Bishan Singh (supra) which we have set out. We will G
proceed on the basis that a family settlement/contract can give rise to a
right of preemption. But is this a case which calls for the application of
right of preemption? The relief which is sought by the appellant in his
plaint, reads as follows:
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280 SUPREME COURT REPORTS [2019] 10 S.C.R.
A “14. That the suit for the purposes of court fee and jurisdiction
for relief of declaration is Rs.19-50 paise declaration and
accordingly court fee i.e. Rs.19-50 paise is affixed on the plaint.
The value of the suit for the jurisdiction of court fee for specific
performance is Rs.4,80,000/- and accordingly court i.e. Rs…….
Is affixed on the plaint.
B
It is therefore, respectfully prayed that the decree of the
declaration be passed in favour of the plaintiff and against the
defendant no.1 and 2 declaring sale deed dated 12.11.1997 null
and void ab initio and for setting aside the same and decree the
specific performance be also passed directing the defendant. No
C to sell by the sale deed of 1/3rd share of property bearing House
No.13, Sector 19-A, Chandigarh (shown red in site plan) to the
plaintiff and to handover vacant possession of demised portion to
plaintiff. Any other relief which the plaintiff under the law is held
entitled to also granted to him. The suit be decreed with costs.”
D 44. We would notice that there is no case expressly set up in the
plaint that what appellant is seeking to enforce is a right of preemption.
If the suit involved a right of preemption, and proceeding on the basis
that the appellant was pursuing his secondary right to follow the property
sold, then, the relief would have been to substitute himself in place of the
E buyer/second defendant. As held by this Court, the right of preemption
is not right of re-purchase. Even proceeding on the basis of it being a
case of preemption, as held by the High Court and by us, first preference
was given to the plaintiff. As far as decision in K. Naina Mohamed
(supra)is concerned, clause (11) of the will in the said case tabooed
alienation in favour of strangers. In this case, the clause, we are concerned
F with, certainly does not place an absolute restriction on alienation in
favour of a stranger. All that it contemplates is an offer being made to
the brothers, once the first step of concurrence in writing by the brothers
for the sale is obtained. We do not, therefore, think that the appellant
would be justified in invoking the principle underlying the right of
G preemption in this case.
IMPACT OF ABSENCE OF WRITTEN CONCURRENCE BY
BROTHERS FOR SALE
45. The controversial clause, according to the appellant, falls in
two parts. Firstly, there must be a written concurrence from the two
H
TILAK RAJ BAKSHI v. AVINASH CHAND SHARMA (D) THR. 281
LRS. & ORS. [K. M. JOSEPH, J.]
brothers, if the third brother wishes to sell his share. The second part is A
that the offer must be made to the other brothers before transfer is
effected to a stranger. The contention is that the family settlement was
arrived at so that the stranger is not inducted into the property.
46. To answer these questions, which have been posed, it may be
also necessary to look at the case law in relation to the family settlements B
and restrictions which are put on property rights under such settlements.
In Muhammad Raza (supra), which is relied upon by the appellant, under
a compromise between the two Shia Mahomedans, the defendant agreed
to marry the plaintiff. Certain rights were conferred upon the plaintiff
upon her marriage with the defendant. The defendant was already
married. Under the compromise, it was provided inter alia that the plaintiff C
would become owner of one-half of the property along with the first
wife of the defendant. However, it was provided that the plaintiff, as
also the first wife, shall not have the power to transfer the property to a
stranger. Ownership was to devolve on the legal heirs of the two wives,
generation to generation. Dispute arose upon the first plaintiff in earlier D
case/second wife, selling/mortgaging her share before her death. One
of the contentions raised by the transferees from the wife, who was the
plaintiff in the earlier suit which resulted in the compromise, was about
the validity of the restriction against sale of the property to strangers.
Dealing with the said aspect, the Privy Council had this to say:
E
“Their Lordships feel the weight of these contentions, and they
might have some difficulty in holding that Sughra Bibi took nothing
more than a life estate. But assuming in the appellants’ favour
that she took an estate of inheritance, it was nevertheless one
saddled, under the express words of the document, with a restriction
against alienation to “a stranger.” Their Lordships have no doubt F
that “stranger” means anyone who is not a member of the family,
and the appellants are admittedly strangers in this sense.
Unless, therefore, this restriction can for some reason be
disregarded, they have no title to the properties which can prevail
against the respondent. G
On the assumption that Sughra Bibi took under the terms of
the document in question an absolute estate subject only to this
restriction, their Lordships think that the restriction was not absolute
but partial; it forbids only alienation to strangers, leaving her free
to make any transfer she pleases within the ambit of the family. H
282 SUPREME COURT REPORTS [2019] 10 S.C.R.
A The question therefore is whether such a partial restriction on
alienation is so inconsistent with an otherwise absolute estate that
it must be regarded as repugnant and merely void. On this question
their Lordships think that Raghunath Prasad Singh’s case29 is
of no assistance to the appellants, for there the restriction against
alienation was absolute and was attached to a gift by will. It is, in
B
their Lordships’ opinion, important in the present case to bear in
mind that the document under which the appellants claim was not
a deed of gift, or a conveyance, by one of the parties to the other,
but was in the nature of a contract between them as to the terms
upon which the ladies were to take. The title to that which Sughra
C Bibi took was in dispute between her and Afzal Husain. In
compromise of their conflicting claims what was evidently a family
arrangement was come to, by which it was agreed that she should
take what she claimed upon certain conditions. One of these
conditions was that she would not alienate the property outside
the family. Their Lordships are asked by the appellants to say that
D
this condition was not binding upon her, and that what she took
she was free to transfer to them.”
47. It will be noted that Privy Council took note of the fact that
plaintiff in the earlier suit got title under the compromise, which contained
the restriction against sale to strangers. It was not a deed of gift or
E conveyance but in the nature of the contract. It was upon compromise
of their conflicting claims that she agreed to certain conditions one of
which was the prohibition against alienation to strangers. The court also
dealt with the matter on the basis that a partial restriction would not, in
case of the transfer inter vivos, be bad, after the passing of the Transfer
F of Property Act, 1882 (hereinafter referred to as ‘the TP Act’).
48. In K. Naina Mohamed (supra), the owner of the property, by
a registered will, created life interest in favour of her two sisters. The
will stipulated that after the death of the sisters, their male heirs would
acquire absolute rights in the properties with the limitation that they shall
G not sell the properties to strangers. The sisters divided the properties
amongst themselves. The property which stood allotted to one of the
sisters came to be sold by the sister and her son in favour of the appellant.
The sale was challenged as being violative of the condition in the will. In
the course of its judgment, this Court observed as follows:
H
TILAK RAJ BAKSHI v. AVINASH CHAND SHARMA (D) THR. 283
LRS. & ORS. [K. M. JOSEPH, J.]
“38. Reverting to the case in hand, we find that by executing A
the will dated 22-9-1951, Smt Ramakkal Ammal created life interest
in favour of her two sisters with a stipulation that after their death,
their male heirs will acquire absolute right in A and B properties
respectively subject to the condition that if either of them want to
sell the property then they shall have to sell it to the other sharers
B
only as per the prevailing market value and not to strangers. The
restriction contained in Clause 11 was not absolute inasmuch as
alienation was permitted among male heirs of the two sisters.
The object of incorporating this restriction was to ensure that the
property does not go out of the families of the two sisters. The
male heirs of Savithri Ammal and Rukmani Ammal did not question C
the conditional conferment upon them of title of the properties.
Therefore, the appellant who purchased B property in violation of
the aforesaid condition cannot be heard to say that the restriction
contained in Clause 11 of the will should be treated as void because
it violates the rule against perpetuity.”
D
49. The court also, while dealing with the question of preemption,
held as follows:
“44. In the light of the above, we shall now consider whether
Clause 11 of the will executed by Smt Ramakkal Ammal is violative
of the rule against perpetuity. If that clause is read in conjunction E
with Clauses 4 and 10 of the will, it becomes clear that the two
sisters of the testator, namely, Savithri Ammal and Rukmani
Ammal were to enjoy house properties jointly during their lifetime
without creating any encumbrance and after their death, their male
heirs were to get the absolute rights in A and B properties. The
male heirs of the two sisters could alienate their respective shares F
to other sharers on prevailing market value. It can thus be said
that Smt Ramakkal Ammal had indirectly conferred a preferential
right upon the male heirs of her sisters to purchase the share of
the male heir of either sisters. This was in the nature of a right of
pre-emption which could be enforced by the male heir of either G
sister in the event of sale of property by the male heir of the other
sister. If the term “other sharers” used in Clause 11 is interpreted
keeping in view the context in which it was used in the will, there
can be no manner of doubt that it referred to the male heirs of the
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284 SUPREME COURT REPORTS [2019] 10 S.C.R.
A other sister. The only restriction contained in Clause 11 was on
alienation of property to strangers.”
(Emphasis supplied)
50. In the case decided by the Privy Council, in Muhammad Raza
(supra), during the pendency of the disputes in a suit, a compromise was
B arrived at, which among other things, put an end to the dispute between
the parties and recognized the right with the plaintiff over the property,
however, subject to the condition that there will be no right to sell to
strangers. In this case, as already noted, the title to the share in the
property of the first defendant is traceable to the will executed by the
C father. The plaint reveals that the legatees, viz., the brothers applied to
the Estate Office and the property was transferred in favour of the
brothers on the terms and conditions in Memo dated 10.07.1981. One of
the conditions was that there will be no fragmentation of the site. It is
thereafter that the controversial agreement was entered into between
the brothers. Thus, the family arrangement was entered into by the
D brothers when their rights as owners had crystallized. It was not subject
to any condition as was the case in Muhammad Raza (supra) where the
compromise in the suit created the right but subject to the condition
against alienation to stranger. No doubt, being brothers, they could to
promote harmony and avoid future disputes, enter into a family settlement.
E 51. The first defendant has sold his share to the second defendant.
Under the clause, can the first defendant sell to a stranger? He can sell
provided there was a written concurrence by the other brothers for a
sale and the offer is made to the other brothers and it does not fructify
into a sale for reasons which are not attributable to the brother who
F wishes to sell. We find that there was an offer to the appellant by the
first defendant. He has failed to act upon it. The other brother has no
case about offer not being made and he has not raised any dispute over
the sale to the second defendant. The perusal of the plaint reveals that
the following case has been set up by the plaintiff:
G “7. that the defendant no.1 was interested in disposing his share
in House no.19-A, Chandigarh and the plaintiff was already and
willing to purchase the portion of the defendant no.1 and the plaintiff
has been expressing his readiness willingness to purchase the share
of the defendant no.1 through number of Regd. Letters, telephone
and even on FAX.
H
TILAK RAJ BAKSHI v. AVINASH CHAND SHARMA (D) THR. 285
LRS. & ORS. [K. M. JOSEPH, J.]
8. That the defendant no.1 as well as his wife and son has A
been corresponding and discussing on behalf of the defendant
no.1 promising to sell the property to the plaintiff as defendant
no.3 did not show any interest to purchase the share of defendant
no.1 nor he was interested at all to purchase the 1/3rd share of the
defendant no.1 in the property.
B
9. that the plaintiff was shocked and surprised to learn that the
defendant no.1 has sold his 1/3rd share of the property to defendant
no.2 a tenant who was already occupying the said portion in a
totally secret manner without informing the plaintiff and against
the terms and conditions of agreement of family partition and
minutes dated 31.3.1982 arrived between plaintiff, defendant no.1 C
and defendant no.3. the site plan showing the portion sold by the
defendant no.1 to defendant no.2 (in red) is attached with this
plaint.”
(Emphasis supplied)
D
52. Thus, what is sought is specific performance. The appellant
proceeded in the suit on the basis that there is a contract. A contract
presupposes an offer which is accepted which means that there was an
offer from the defendant. The correspondence, which we have referred
to, fortifies us in holding that there was an effective offer and it did not
materialize on account of any default on the part of the plaintiff. E
53. Now, if the clause is broken down, it involves the following
steps. A brother announces his desire to sell his share. He seeks written
concurrence of the other brothers. A written concurrence is given. Then,
the next step is reached. The selling brother offers to sell it to the other
brothers. If they take the offer and the price is agreeable to the parties, F
sale follows. If the brothers do not wish to buy, the sale to the strangers
is permitted. In the above process, in the facts of this case, it is clear
that the appellant and the first defendant, without insisting on the written
concurrence, went to the stage of offer to brothers. The appellant has
led the first defendant to assume, even without a written concurrence, G
that the sale is permitted. The first defendant has acted clearly on the
basis that the requirement of the first stage was not being insisted upon.
Otherwise, he could have certainly obtained the concurrence. Having
thus acted in the matter, and the second stage having been reached,
when for reasons where the fault cannot be attributed to the first
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286 SUPREME COURT REPORTS [2019] 10 S.C.R.
A defendant, the offer, which the appellant himself describes as reasonable,
was not seized upon by the appellant, the third stage emerged. This
meant that it became open to the first defendant to sell to a stranger and
which is what he did by it selling it to the second defendant. Even
proceeding to enforce the clause, we find that the appellant is clearly
estopped from setting up the plea of absence of written consent of the
B
brothers. It would be inequitable, particularly when we are considering
the matter in an appeal sourced under Article 136 of the Constitution of
India.
EFFECT OF PROHIBITION AGAINST FRAGMENTATION
OF PROPERTY IN QUESTION UNDER THE CAPITAL OF
C PUNJAB (DEVELOPMENT AND REGULATION) ACT, 1952
54. The further obstacle remains posed, however, that the sale
will result in contravening the law prohibiting fragmentation. The Capital
of Punjab (Development and Regulation) Act, 1952 (hereinafter referred
to as ‘the 1952 Act’ for short) defines “site” in Section 2(f) as meaning
D “any land which is transferred by the Central Government under
Section 3”.
55. Section 3 of the Act reads as follows:
“3. Power of Central Government in respect of transfer of
E land and building in Chandigarh. –
(1) Subject to the provisions of this section, the Central
Government may sell, lease or otherwise transfer, whether by
auction, allotment or otherwise, any land or building belonging to
the Government in Chandigarh on such terms and conditions as it
F may, subject to any rules that may be made under this Act, think
fit to impose.
(2) The consideration money for any transfer under sub-section
(1) shall be paid to the Central Government in such manner and in
such instalments and at such rate of interest as may be prescribed.
G (3) Notwithstanding anything contained in any other law for
the time being in force, until the entire consideration money together
with interest or any other amount, if any, due to the Central
Government on account of the transfer of any site or building, or
both, under sub-section (1) is paid, such site or building, or both,
H
TILAK RAJ BAKSHI v. AVINASH CHAND SHARMA (D) THR. 287
LRS. & ORS. [K. M. JOSEPH, J.]
as the case may be, shall continue to belong to the Central A
Government.”
56. Section 4 of the 1952 Act confers power upon the Central
Government and the Chief Administrator to issue directions in respect
of any site or building in regard to the matters which are mentioned
therein. The word “transferee” is defined in Section 2(k) of the Act, B
which reads as follows:
“2(k)”transferee” means a person (including a firm or. other body
of individuals, whether incorporated or not) to whom a site or
building is transferred in any manner whatsoever, under this Act
and includes his successors and assigns;” C
57. Section 4(2) of the 1952 Act reads as follows:
“4(2) Every transferee shall comply with the directions issued
under sub-section(1) and shall as expeditiously as possible, erect
any building or take such other steps as may be necessary, to
comply with such directions.” D
58. Section 5 of the 1952 Act forbids erection or occupation of
any building at Chandigarh in contravention of Building Rules made under
sub-Section (2). The word “building” is defined in Section 2(c), which
reads as follows:
E
“2(c)”building” means any construction or part of a construction
which is transferred by the ‘[Central Government] under section
3 and which is intended to be used for residential, commercial,
industrial or other purposes, whether in actual use or not, and
includes any out-house, stable, cattle shed and garage and also
includes any building erected on any land transferred by the Central F
Government under section 3;”
59. From a perusal of the aforesaid provisions, it becomes clear
that the word “site” means any land which is transferred under Section
3 of the 1952 Act. When it comes to the terms of Section 3, it contemplates
power with the Central Government to transfer by auction, allotment or G
otherwise any land or building belonging to the Government in Chandigarh
on such terms and conditions as may subject to any Rules that can be
made under the Act, the Government thinks fit to impose. Thus, though
it is open to the Central Government to transfer either land or building
belonging to the Government in Chandigarh under Section 3 of the 1952
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288 SUPREME COURT REPORTS [2019] 10 S.C.R.
A Act, the word “site” is confined to only the land which is transferred by
the Central Government under Section 3. In fact, the word “building”, as
defined in the Act, points to any construction or part of construction
which his transferred under Section 3. It includes outhouse, stable, cattle
shed and garage and also includes any building erected on any land
transferred by the Central Government. The construction must be intended
B
to be used for residential, commercial, industrial or any other purposes.
A clear distinction is maintained between “site” and “building”. The
Chandigarh (Sale of Sites and Building) Rules, 1960 came to be made.
Section 22 of the 1952 Act confers power upon the Central Government
to make the Rules for various purposes, which are mentioned in sub-
C Section (2). It includes Sections 2(a), 2(d), 2(e) and 2(h) of the 1952
Act, which reads as follows:
“2(a) the terms and conditions on which any land or building may
be transferred by the Central Government under this Act;
xxx xxx xxx
D
2(d) the terms and conditions under which the transfer of any
right in any sit or building may be permitted;
xxx xxx xxx
2(e) erection of any building or the use of any site;
E
xxx xxx xxx
2(h) the conditions with regard to the buildings to be erected on
sites transferred under this Act;”
60. Rule 14 of the Chandigarh Sale of Sites and Building Rules,
F 1960 provides that no fragmentation of any site is permitted. Subsequently,
in exercise of powers under Sections 3 and 22 of the Act, Chandigarh
Estate Rules, 2007 came to be made. Rule 16 deals with fragmentation/
amalgamation, which reads as follows:
“16. Fragmentation/Amalgamation. No fragmentation or
G amalgamation of any site or building shall be permitted. Provided
that amalgamation of two or more adjoining sites shall be
permissible only in the case of commercial or industrial sites subject
to the condition that the revised plans are approved by the
H
TILAK RAJ BAKSHI v. AVINASH CHAND SHARMA (D) THR. 289
LRS. & ORS. [K. M. JOSEPH, J.]
competent authority, prior thereto. Provided further that A
fragmentation of any site shall be allowed if such fragmentation is
permitted under any scheme notified by the Administration.”
(Emphasis supplied)
61. It is on the strength of the provisions contained in Rule 14 of
the 1960 Rules and Rule 16 of the 2007 Rules that the appellant would B
argue that the assignment of the share of the first defendant occasioned
a breach of the law. The second defendant, on the other hand would
point out that there was no issue of fragmentation ever raised before the
courts and the same was not decided in the courts.
62. It is contended by the second defendant that the sale deed in C
favour of the respondent no.1 specifically says that the sale is in respect
of one-third share in the residential house no.13 of Sector 19A,
Chandigarh. After the sale deed, it is contended, one-third share of the
party was duly transferred and mutated in the name of respondent no.1/
second defendant by the Chandigarh Administration. The High Court, in D
fact, tides over this objection by the appellant by pointing out that once
the second defendant steps into the shoes of the first defendant, he
became a co-owner and his remedy is to sue for partition and while
fragmentation of property, is not ‘admissible’, the market value of the
property can be determined, and buying each other’s share, as per the
provisions of Sections 2, 3 and 4 of the Partition Act, 1893. E
63. While it may not be true that the issue of fragmentation was
not raised in the courts, we would think that the appellant is not able to
persuade us to hold that the assignment in favour of the second defendant
is vulnerable on the basis that it involves fragmentation. We have noticed
the deposition of the plaintiff about partition of the house into three F
portions. We have noted the fact that one-third share has been duly
transferred and mutated in the name of the first respondent/second
defendant by the Chandigarh Administration.
64. The second defendant has produced the communication dated
19.12.1997 which indicates the transfer of rights of site in Sector 19A G
held by Vishnu Dutt Mehta (first defendant) is noted in favour of the
second defendant subject to certain conditions. This is obviously before
the 2007 Rules came into force.
H
290 SUPREME COURT REPORTS [2019] 10 S.C.R.
A 65. In the light of the aforesaid facts, we cannot permit the appellant
to impugn the transaction on the said ground.
66. The upshot of the above discussion is that the contentions of
the appellant are liable to be rejected. We do so. The appeals will stand
dismissed. The parties will bear their own costs.
B
Divya Pandey Appeals dismissed.
C
D
E
F
G
H
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