PUNJAB SUGAR MILLS, CO LTD Vs. LACHHMAN PRASAD

JUDGEMENT

(1.) This is a defendant's appeal arising out of a suit for pre-emption of shares sold in two mahals. The plaintiff is admittedly a cosharer in the mahals and the defendant company which is the vendee is a stranger. The plaintiff alleged the existence of a custom of pre-emption and a right under the Pre-emption Act, and also asserted that the ostensible consideration of Rs. 24,000 was not the true consideration but only Rs. 19,333-5-3 were paid. The defendant originally contested the claim on the ground that there was no custom of pre-emption, that the consideration mentioned in the sale-deed was the true consideration and that the deed had been executed with the knowledge and consent and after the refusal of the plaintiff. Some days later the written statement was amended and a further plea was added that the share in question had been purchased for the cultivation of sugarcane for the factory which was a manufacturing industry and the plaintiff was, therefore, not entitled to preempt the same.

(2.) The learned Subordinate Judge has found that the plaintiff has the right of pre-emption under the Act and that the defendant is not entitled to protection on account of the purchase having been made for their factory. His view is that the acquisition of land for the purpose of sowing sugarcane crops is for the purpose of a manufacturing industry within the meaning of Section 8, Sub-clause (c) of the Act, but he has held that inasmuch as there was no recital of the alleged purpose in the sale-deed the defendant cannot take advantage of it. As regards the plea of estoppel his finding is that there was no refusal by the plaintiff. On the question of consideration he has found in favour of the defendant and has held that the entire sum of Rs. 24,000 passed.

(3.) The defendant has appealed and the plaintiff has filed a cross appeal. There can be no doubt that the manufacture of sugar whether it be the extraction of sugar juice from sugarcane or the refinement of sugar is a manufacturing industry but the, question is whether the defendant is entitled to the protection given to him by the section.