MISRI LAL Vs. DEBI CHARAN

JUDGEMENT

(1.) This is a plaintiff's appeal arising out of a suit for pre-emption brought by him for recovery of possession of the property in suit on payment of Rs. 400, which is alleged to be the market value of such property, on the allegation that Rs. 1,200, the consideration entered in the sale deed executed by defendants 2 to 7 in favour of defendant 1, does not represent the actual price and has been fictitiously mentioned to deprive the plaintiff of his right of pre-emption. The Court of first instance decreed the claim on payment of Rs. 400 on a finding that the price entered in the sale deed was not the actual price. The lower appellate Court took a contrary view on the question of the price shown in the sale deed being the actual price; and in allowing the plaintiff's claim to pre-emption it made him liable to pay the entire sum of Rs. 1,200. The only question in dispute in second appeal is whether the lower appellate Court was justified in holding that the Sensible consideration was the actual price. Some transactions, anterior to the sale in question, have a material bearing on the controversy and should be noted in chronological order. One and half biswas share of Nagla Balli belonged to Baji Lal and Sughar Bahadur Singh, the share of the former being one biswa and that of the latter half a biswa. Both of them hypothecated their shares under a deed, dated 4 May 1907, to one Chet Ram for Rs. 300. By a deed, dated 13 June 1920, Chet Earn assigned his rights under the hypothecation bond to Debi Charan, defendant 1, for Rs. 350, though a much larger sum was due under the deed. There is little doubt that Chet Earn sold his rights for less than the sum then due to him, because he did not expect to recover all his dues, having regard to the value of the property and the personal remedy against the mortgagor and his other property being barred by limitation.

(2.) Baji Lal, one of the mortgagors, having died in the meantime, his heirs sold his one biswa share on 29 April 1926. This is the sale in respect of which pre- emption is claimed in the present case. The deed reoites that two-thirds of the mortgage-money then duo was Rs. 1,150 and that a sum of Rs. 50 was paid in cash by the vendee so as to make a total of Rs. 1,200, which was the price agreed on between the parties. It should be mentioned that Debi Charan, who as shown, had become the owner of one biswa, had the remaining half-biawa sold in execution of decree obtained by him on foot of the mortgage and purchased it himself. It is however not known for how much it was sold at the auction. The Munsif's view proceeds on the reasoning that the market valua of the property sold, that is, one. biswa, is not more than Rs. 400 calculating it on the basis of certain transactions he refers to as exemplars, and that therefore prima facie, it could not be the actual price. Starting with that assumption, he threw the burden of proof on the vendee to establish "that the property in suit is worth Rs. 1,200." Ho then winds up with the observation that the defendant vendee was out of pocket for Rs. 400. The market value of the disputed property comes to Rs. 400 or so.

(3.) Accordingly, he decreed pre-emption on payment of Rs. 400. There is a palpable error in this treatment of the case. Assuming the plaintiff discharged the initial onus, which undoubtedly lies on him, the vendee is to establish, if he can, the actual price agreed on between the parties to the transaction and not, as the Munsif thinks, that the property is worth the amount entered in the sale deed as the price. The learned Subordinate Judge, on the other hand, took the view that the ostensible consideration mentioned in the sale deed was the actual price and that there was therefore no occasion to ascertain the market value of the property. As I read his finding, it implies that the plaintiff failed to discharge the initial onus, which admittedly lay on him. Unless the finding of the learned Subordinate Judge is vitiated by some error of law or is not supported by any evidence, it must be accepted in second appeal, which must fail on the initial point, namely, that the ostensible price is the actual price. It is however argued, on the authority of Jagat Singh V/s. Baldeo Prasad A.I.R. 1921 All. 290 that where personal remedy under a mortgage is barred and the mortgage money greatly exceeds the market value of the property sold to the mortgagee himself, who pays a small amount over and above the mortgage money as the price of the property, the price should be deemed to be no more than the market value plus the cash paid. The following passage is relied on: We agree with the argument raised on behalf of the appellant that the Vendee is entitled to recover from the pre-emptor the full amount that he has in good faith actually paid for the property purchased, but we have to see what the appellant vendee did in the present case actually pay. Ho gave up the debt due on the bond plus Rs. 100 for the property. The value of the debt duo on the bond is clearly limited to the value of the property in question. Nobody would have given to the vendee a price for his mortgage debt greater than the security afforded by the property. Just as a time barred debt is practically of no value, so a mortgage debt where the personal remedy is barred cannot be greater in value than the security itself. No one in the open market would have given the appellant anything more than Rs. 1,250 for his mortgage debt. It therefore is clear that the amount which the appellant paid for the property is not the amount which was due on the face of the mortgage- deed but the amount which was recoverable under the bond from the security. Nothing more than the market value of the property could have been recovered.