SAHADEO SINGH Vs. KUBER NATH LAL

JUDGEMENT

(1.) This is an appeal by a plaintiff whose suit for pre-emption of an alleged sale has been dismissed by the Courts below. In 1907, Fazal Ali Khan and Jahandar Khan usnfructuarily mortgaged with Bhoja Kuer their 23 ganda share in the village for Rs. 636/-. Bhoja Kuer entered into possession and received the profits of the mortgaged share, It is said that the mortgage debt was discharged completely from the profits before 1939, but that she would not surrender possession to Asfandyar Khan, Nawab Khan and Rahrnatullah Khan, the sons of Pazal Ali and Jahandar Khan who had died, as Asfandyar Khan, etc. thought of filing a suit against Bhoja Kuer for recovery of possession of the mortgaged share, but had no money. Consequently he negotiated with Kuber Nath and Sudeehra Kuer the sale of 9 gandas out of the 23 gandas mortgaged. The negotiations were successful, and Kuber Nath and Sudeshra Kuer agreed to file a suit against Bhoja Kuer for recovery of the entire 23 ganda share, keep 9 gandas to themselves and band over the remaining U gandas to Asfandyar Khan, etc and to defray all the expenses of the litigation upto the Judicial! Committee. Accordingly on , 6th April 1939, Asfandyar Khan, etc. executed a deed purporting to be one of sale in favour of Kuber Nath and Sudeshra Kuer in respect of 9 gandas. It was registered the same day. The conditions on which the sale was made are mentioned in the deed and one of them is that Kuber Nath and Sudeshra Kuer (who will hereafter be known as the vendees) were to file a suit within a month to recover possession over the 23 gandas share from Sahdeo Singh, the son and heir of Bhoja Kuer who had died. Accordingly, on 24th April 1939, the vendees instituted a suit for redemption of the usufructuary mortgage under Section 12, Agri. Culturists' Relief Act against Shahdeo Singh, impleading Asfandyar Khan, etc. (to be known as vendors) as pro forma defendants. The suit was resisted by the mortgagee on the ground that Rs. 17,851/- were still due to him. On 8th December 1942, the parties compromised the matter ; the vendees agreed to pay Rs. 400/- within two months to the mortgagee who in turn agreed to deliver possession over 9 gandas to them. There was one more suit pending between the vendors and the mortgagee and other persons and that also was compromised on the same day. That compromise deals with the remaining 14 gandas share, I do not say anything about it because we are not concerned with it. On 8th February 1943 the vendees deposited Rs. 400/- in Court for payment to the mortgagee. On 8th February 1944, the mortgages himself sued to pre-empt the sale of 6th April 1939. He pleaded that he had a preferential claim to purchase the 9 gandas share, that it had been sold by the vendors to the vendees for Rs. 400/- only, and that he was entitled to purchase the property for Rs. 400/-. The suit was contested by the vendees on the grounds that the transaction carried out on 6th April 1939 was not a pre-emption sale, and that the suit was barred by time. They admitted that the plaintiff had a preferential right to purchase the property. In reply the plaintiff contended that as the vendors were out of possession and the vendees deposited the sum of Rs. 400/- in Court on 8th February 1943, the sale must be deemed to have been completed on 8th February 1943 and that, computing the period of limitation from that date, his suit was within time. The trial Court held that the transaction of 6th April 1939 was not a sale and that the suit was barred by time. The lower appellate Court accepted the trial Court's finding that the transaction was not a pre-emptible sale, but curiously enough, while discussing the question of limitation, accepted that it was a sale. Taking it to be a sale completed on 6th April 1939, it also held the suit to be barred by time.

(2.) The case is governed by the Agra Preemption Act which gives a right of pre-emption only against sale, as defined in the Transfer of Property Act. What we have to see first is, whether the transaction of 6th April 1939, is a sale as defined in Section 54, T. P. Act, viz. "a transfer of ownership in exchange for a pries paid or promised or part-paid and part promised." It is stated in the deed that the vendors were the owners of 23 gandas share. The operative part of the deed is that the sale-deed was being executed in favour of the vendees "in exchange for the pairvi and expenses of the redemption suit," that from that day the ownership of 9 gandas share vested in the vendees and that they would take possession of it on obtaining a decree for redemption. The vendees were to be deemed to be the owners of the 9 gandas share whether the vendors joined with them in the suit or not. The dead is described as a contract of sale and it is repeated that 9 gandas share was sold in exchange for the pairvi and expenses of the suit. It is clear that the vendors transferred in preasenti the ownership over the property in dispute through the deed. They were the owners, though not in possession. They had not received the consideration before the execution of the deed but the consideration had been promised. Neither the fact that the consideration had not been paid; nor the fact that the vendors were not in actual possession, could prevent the transaction from operating as a sale. The definition quoted above does not take possession into account at all and expressly allows a sale to take place even though the price has not been paid, provided it has been promised. Any number of authorities may be cited in support of the proposition that a sale may be complete even though the full price has not been paid. I would satisfy myself with quoting only Baijnath Singh v. Paltu, 30 ALL. 125 : (5 A. L. J. 96), Sagaji v. Namdev, 23 Bom. 525 : (1 Bom. L. R. 5) and Sib Lal v. Bhagwan Das, 11 ALL. 244: (1889 A. W. N. 96). In Narain Das v. Mt. Dhama,, 38 ALL. 154: (A. I. R. (3) 1916 ALL. 366), Bannerjee J. with whom Walsh J. agreed, stated that the only light of an unpaid vendor is to retain the title deeds and to charge the property with the unpaid price and that he cannot retain possession on the ground that the price has not been paid. The large number of decrees for possession passed in suits brought by vendors against their Vendees supports the proposition that ownership can be transferred even without delivery of possession or by an owner who himself is not in possession.

(3.) In cases decided before the Transfer of Property Act of 1882, it was held that if property was sold by an owner in circumstances similar to those in the instant case, it would be not a sale bat a contract for sale. See for instance Rani Bhabo Soonduree Dossee v. Issur Chunder Dutt, 18 W. R. 140 : (ll Beng. L. R. 36). In that case the deed was described as a sale-deed and the operative words were 'I sell the same to you." Still their Lordships held that "the bill of sale in such a case can only be evidence of a contract to be performed in future." In Abdul Wahid Khan v. Shaluka Bibi, 21 Cal. 496 : (21 I. A. 26 P. C.), the Judicial Committee dismissed a pre-emption suit on the ground that what was sought to be pre-empted was only "a sale of a share in a law suit" and not on the ground that there could be no sale at all when the vendor was out of possession. Their Lordships did observe: "The consideration was, providing the money necessary for carrying on the suit, the amount of which could not be estimated. If tin defendant succeeded and the suit was dismissed there would have been no property to be sold." But they did not mean that there could have been no valid sale even if the consideration were given in cash. In Kalyan v. Mt. Desrani, A. I. R. (14) 1927 ALL. 361 : (49 ALL. 498), Sulaiman J., as he was then, made it clear that: "A sale is duly effected and the proprietary interest in the property passes no matter whether the vendor is or is not in actual possession," (p. 363). Abdul Wahid Khan v. Shaluka. Bibi, 21 Cal. 496 : (21 I. A. 26 P.C.) was cited before the Judicial Commissioner of Oudh in Muntazim Husain v. Ahmad Husain, 23 O. C. 13: (A. I. R. (6) 1919 Oudh 58), which also was a case of a sale by an impoverished owner who was out of possession of the property and had no means of filing a suit to recover possession. It was contended before the learned Judicial Commissioner that the sale was not genuine and that what was sold was simply a share in a law suit. To this the reply of Stuart J. C., was that the question should be decided on the facts of each case and that : "The mare fact that legal proceedings are necessary to obtain possession of the property sold is no ground for holding that the sale does not give rise to a right of pre-emption" (p. 16). He distinguished the transfer in that case from transfer of a purely speculative claim having no more than a possible right to recover possession. The claim of Asfandyar Khan, etc., could not possibly be said to be a speculative claim having no more than a possible right to recover possession. There is a well-understood distinction between a contract of sale and a contract to sell or for sale. The former is an executed contract and the latter is an executory contract. Sale creates a jus in rem as it passes ownership immediately when it has been executed, while a contract to sell is jus ad rem, for it only creates an obligation attached to the ownership of property not amounting to an interest therein. See Shib Lal v Bhagwan Das, 11 ALL. 244 : (1889 A. W. N. 96). It is not always that ownership passes on the execution of a deed of sale, when the ownership passes is a question of intention of the parties. They may intend that the ownership would pass not immediately on execution of the deed, but on a subsequent date on the happening of a certain event. This postponement of the passing of title does not convert a contract to sell into a contract for sale. The criterion to decide whether there is a sale or merely a contract for sale is whether another deed would be required to pass the title or ownership. Under the Transfer of Property Act, there must be a deed transferring ownership of immovable property which is not in the vendor's possession. If there is only a contract foe sale, no ownership would be transferred unless another deed for sale is executed. A contract for sale simply gives a right to the contractee to a deed of sale. But in the case of a sale with postponed transfer of title, that deed itself transfers the title on the happening of the particular event and another deed to transfer it is not required and would even be meaningless. If this distinction is borne in mind, one would have absolutely no hesitation in saying that the deed of 6th April 1939 is a deed of sale and not of an agreement or contract for sale. Even if it be said that the passing of the title is postponed to the date on which the vendee would obtain possession from the mortgagee, the title would pass under this very deed and no other deed would be required to be executed by the vendors to pass the title. This deed itself gave them a right to sue for possession; were it only a contract for sale, they would first have to obtain a sale deed from the vendors before being in a position to sue for possession. They did sue for possession by redemption and the suit was decreed against the vary parson who now contends that there wag no sale but only a contract for sale. Had there been only a contract for sale, he should have defeated the suit of the vendees on that very ground. After allowing the decree for redemption to be passed against him, it does not lie in his mouth to plead that the title had not passed to the vendees on 6th April 1989.