NARAYAN BALAJI PATIL Vs. BABARAO BALIRAM BOBDE

JUDGEMENT

(1.) THIS is a second appeal by the original plaintiff who had filed a suit for pre -emption. The relevant facts are: On February 1, 1952, defendant No. 3 sold the suit, field No. 81/4 of Malkhed, Taluq Darwha, District Yeotmal, measuring 5 acres and 13 gunthas to defendants Nos. 1 and 2. Plaintiff' Narayan, who is a co -occupant in survey No. 81, filed the suit for pre -emption in respect of the suit field. The trial Court decreed the suit for pre -emption on condition that the plaintiff deposited Rs. 1,600 by way of pre -emption price. The first appellate Court raised the pre -emption price to Rs. 3,600 and against this decision the present second appeal has been preferred by the original plaintiff and his contention is that the pre -emption price should not be Rs. 3,600 but should he Rs. 1,600. The respondents have not filed any cross -objections. As they have not filed cross -objections their contention that the suit for pre -emption should have been dismissed on the ground that the right of pre -emption offends Article 19 of the Constitution cannot be considered. The only question for decision in this second appeal is whether the pre -emption price1 was rightly increased from Rs. 1,600 to Rs. 3,600 by the first appellate Court. Questions relating to the constitutionality of the right of pre -emption do not, therefore, arise for decision in this second appeal.

(2.) QUESTIONS regarding burden of proof, the exact nature of the right of preemption and the meaning of the expression 'fair consideration,' the question in what circumstances the pre -emption is for the price fixed in the sale -deed and in what circumstances the pre -emption is for a fair consideration have been canvassed* at length at the Bar.

(3.) CHAPTER XIV of the Berar Land Revenue Code deals with pre -emption and certain sections in this chapter confer the right of pre -emption, namely, Sections 176r 177, 178, 182, 183 and 184. Sections 176, 177 and 178 confer the right of preemption in cases wherenotice is given to the other occupants of the survey number, intimating the price at which the interest is proposed to be sold or the principal amount of the mortgage or the premium, if any, and the rent and the period in the case of a lease, the extent of the interest foreclosed in the case of a mortgage by conditional sale and the amount declared to be due by the final decree. In all these cases the other occupants of the survey number have a right to deposit the amount specified in the notice within two months from the service of the notice. These three Sections 176, 177 and 178, therefore, give the right of pre -emption for the amount specified in the notice. In such cases Section 182, however, gives an additional right to pre -empt, not for the amount stated in the notice but for a fair consideration. In the cases falling under Section 176, or 177 or 178, notwithstanding that the specified amount is stated in the notice, the occupant having the right of pre -emption can sue to enforce his right of pre -emption not for the amount stated in the notice but for a fair consideration, but he can do so only if the grounds specified in Clauses (a)t (b) and (c) of Sub -section(1) of Section 182 are satisfied. Clause (a) provides that in the case of a proposed sale, the price stated in the notice must not have been fixed in good faith. If the right of pre -emption falls under Section 177, namely, in the cease of foreclosure, the ground on which the right of pre -emption can be claimed for a fair consideration, is that the amount stated in the notice was not due by the terms of the final decree or that it exceeds the market value of the interest foreclosed. In cases falling under Section 178, i.e. where the right of pre -emption is in respect of a usufructuary mortgage or a lease, the grounds on which pre -emption can be claimed for a fair consideration is that stated in clause (c) of Sub -section (7) of Section 182, namely, that the principal amount or the premium or the rent stated in the notice was not fixed in good faith. In all these three cases although a specified sum is stated in this notice, if any of these conditions are satisfied, the person having the right of pre -emption can sue for the right to pre -empt not for the sum stated in the notice but for a fair consideration, but the conditions mentioned in Clauses (a), (b) and (c) must be satisfied. In two of these cases reference is made to good faith, namely, cases falling under Sections 176 and 178. In these cases, therefore, if a person claims a right of pre -emption for a fair consideration he has to prove that the amount stated in the notice was not fixed in good faith. Sub -section (4) to Section 182 provides that the Court shall presume that such price etc. was not fixed in good faith when it is proved that any price, principal amount etc. exceeds the figure for which the interest sold is mortgaged or leased. Sub -section (4), therefore, enumerates the circumstances in which the Court can draw a presumption of absence of good faith in cases where the absence of good faith has to be proved by the person claiming the right of pre -emption. Such an absence of good faith must be proved only in cases falling under Sections 176 and 178 and not in cases falling under Section 177.