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Nagammal And Ors. vs Nanjammal And Anr. on 10 October, 1969

Madras High Court
Nagammal And Ors. vs Nanjammal And Anr. on 10 October, 1969
Equivalent citations: (1970) 1 MLJ 358
Author: M Natesan


M. Natesan, J.

1. This second Appeal raises an interesting problem in the application of Section 22 of the Hindu Succession Act, The problem has been rendered difficult by the absence of clear legislative guidance. Mulla in his principles of Hindu Law, 12th Edition, remarks on the section:

The section requires more explicit and stringent language.

2. To state the facts of the case in brief : The suit properties, lands with wells, belonged to one Bomma Naicken who, on his death in August 1958, left surviving his widow and four daughters. Under the Hindu Succession Act, as Class I heirs the four daughters and the widow share the properties equally, each taking a l/5th share. Plaintiffs 1 to 3 in the suit are the three daughters and the 1st defendant is the other daughter. Without reference to her co-heirs, the 1st defendant, under the original of the sale deed Exhibit A-5, dated 11th December, 1959, sold her share in the suit properties to one Pappa Naicken, the 2nd defendant in the suit, for a consideration of Rs. 1,000. The suit has been instituted on 12th July, 1960 in assertion by the plaintiffs of their preferential right to purchase her l/5th share under Section 22 of the Hindu Succession Act. During his lifetime, Bomma Naicken had created a mortgage over his properties for Rs. 2,000 in favour of the 1st plaintiff as evidenced by Exhibit A-l dated 21st May, 1952. The widow, the other co-heir, had, with reference to her share, executed two sale deeds, Exhibit A-2 in favour of the 1st plaintiff and Exhibit A-3 in favour of the 2nd plaintiff, directing them to discharge the mortgage due by the estate ; and the dispute is confined to the alienation, Exhibit A-5 in favour of the stranger. The Courts below have rejected the plaintiff’s claim and dismissed the suit. The Lower Appellate Court inter alia remarks that Section 22 does not provide as to what is to happen if one of the co-heirs sells his or her interest without informing the other co-heirs who have preferential right, the section not providing for any notice being given.

3. Section 22 of the Hindu Succession Act, 1956 under the Marginal heading ” preferential right to acquire property in certain cases ” runs thus ;

Where, after the commencement of this Act, an interest in any immovable property of an intestate, or in any business carried on by him or her, whether solely or in conjunction with others, devloves upon two or more heirs specified in Class I of the Schedule, and any one of such heirs proposes to transfer his or her interest in the property or business, the other heirs shall have a preferential right to acquire the interest proposed to be transferred.

(2) The consideration for which any interest in the property of the deceased may be transferred under this section shall, in the absence of any agreement between the parties, be determined by the Court on application being made to it in this behalf, and if any person proposing to acquire the interest is not willing to acquire it for the consideration so determined, such person shall be liable to pay all costs of or incident to the application.

(3) If there are two or more heirs specified in Class I of the Schedule proposing to acquire any interest under this section, that heir who offers the highest consideration for the transfer shall be preferred.

(Explanation omitted.)

4. The preferential right to acquire the share of a co-heir who proposes to transfer his interest in the property or business of the propositus is limited to cases of simultaneous succession and devolution of property upon two or more heirs belonging to Class I. Obviously, the section has been aimed at reducing to some extent at least the inconvenient effects of simultaneous succession by several persons at one and the same time as members of Class I leading to fragmentation and percelling up, of even small holdings of property. To a degree the section enables a co-heir to retain the property in the family and avoid the introduction of a stranger in the enjoyment of family property if he so desired. While Clause (1) of Section 22 gives the preferential right for the acquisition of interest proposed to be transferred by a co-heir, Clause (2) provides for the ascertainment of the amount of consideration or value payable by the co-heirs who. intend to exercise the preferential right, if the co-heirs are unable to agree about the price. If any co-hsir who intended to exercise the preferential right, is found not willing to acquire the interest for the consideration determined by Court on application, he cannot be compelled to, go through the purchase, but can be made liable to all costs of the application. Clause 3 of section. 22 provides that, if there is competition between two or more co-heirs specified in Class I for acquiring the interest proposed to be transferred, that heir who offers the highest price shall be preferred. Having said so much, Parliament could have laid down how and when the right of preference is to be exercised. It is the absence of provisions in this regard, that is pressed by the alienee. The first hurdle in the exercise of the right conferred by the section arises, when a co-heir without reference to the other co-heirs alienates his or her share. Other problems can be envisaged. To mention one, granting that the preferential right can be enforced against the purchaser, the ostensible price at which it has been sold to the purchaser may not be the real price. The deed of sale may show an exaggerated figure or reduced figure for various reasons. Such problems do not trouble us here.

5. The right conferred is in substance a pre-emptive right. Justice Mahmood in Gobind Deval v. Inayathullah (1885) I.L.R. 7 All. 775 at 806, while examining the Muslim law of pre-emption quotes Muslim texts to the effect:

It is not lawful for any one to sell till he has informed his coparceners who may take or leave it as he wishes ; and if he has sold without such information, the coparcener has a preferential right to the share.

The incidents of Muslim law of pre-emption have become crystallized. Statutes relating to pre-emption (See the Agra Pre-emption) Act (XI of 1922) generally provide for the issue of prior notice to the pre-emptors. Provisions are found for ascertainment of the actual price by the Court, when the Court finds that the plaintiff has the right of pre-emption, but that the ostensible price is not the real price. The occasion for the assertion of the right of pre-emption strictly so called, or the cause of action for enforcing the preferential right of purchase as prevalent in several parts of the country, arises only on sale by a co-heir. It has necessarily to be so, as the right is not to compel a sale, but a right to elect to be the purchaser when a sale is proposed. Can the absence of any provision in the Act for the co-heir to pursue the matter, if a person should sell his or her interest without reference to the other heir, conclude the matter against him? If the absence of provision is decisive, then the conferment of. the preferential right is futile and absolutely valueless. The very object of enacting Section 22 would be defeated. To use the words of Lord Simonds in Cutler v. Wandsworth Stadium Ltd. L.R. (1949) App. Cas. 398 at 407, ‘ the statute would be but a pious aspiration.’ Let us, therefore, examine the jurisprudential aspect of the matter. The right conferred by Section 22 on co-heirs is undoubtedly a valuable right. The section provides that other heirs’ shall have preferential right to acquire the interest. While one co-heir cannot compel another co-heir to sell his or her interest, if he or she intends to sell his or her interest, the other co-heirs have the statutory right to’ purchase the interest; if they are prepared to pay the proper consideration. This statutory right necessarily imposes a corresponding duty on the co-heir who intends to sell his or her interest. It is a fundamental principle of our jurisprudence that, where there is a legal right, there is a corresponding duty enforceable by an action in* a Court of law. Also Ubi jus ibi remediam where there is a right there is a remedy. The expression ‘Jus’ in the maxim is understood as signifying the legal authority to do or demand something. A legal right is defined by Professor Holland as ” a capacity residing in one man of controlling, with the assent and assistance of the State, the actions of another.” Unless the section is looked upon as a pious exhortation of Parliament and not a legally enforceable right, the aggrieved co-heir can seek the Court’s assistance for the recognition of his right and relief necessary to secure to him that right. A Legislature does not intend its enactment to be a brutum fulmen. If a statute creates a duty–here the duty to offer the share to the co-heirs in the first instance is necessarily involved when it is said by the statute that the preferential right arises when a co-heir proposes to transfer his interest–and the statute does not provide or enact a remedy, an action at common law is clearly competent.. The duty is not one of imperfect obligation ceasing with its breach. If the right can be extinguished by the wrongful act of the obligor, it cannot be regarded as a. right in law.

6. A reading of the several provisions of Section 22 makes it manifest that Parliament intended to give a real right to co-heirs inheriting as Class I heirs. The section gives the non-alienating heirs the capacity of controlling the action of the co-heir who wants to alienate his interest and of compelling him to transfer the interest to-them. When the State by Law confers on the co-heirs this right, they are entitled to approach the Courts for the exercise of that control in the manner most effective.

Now, the general law as to the remedy of a person who has been injured by the infringement of a statutory right or the breach of a statutory obligation for his benefit is clear. Where the statute has not in explicit terms given a remedy, the remedy which is properly applicable to the right or the obligation flows as an. incident”, Dawson & Co. v. Bingley Urband Council L.R. (1911) 2 K.B. 149 at 159.

7. In Black v. Fife Goal Co., Ltd. L.R.(1912) App. Cases. 149 at 165, Lord Kinnear observed:

If the duty be established, I do not think there is any serious question as to the civil liability.

In Gutter v. Wandsworth Stadium Ltd. (1949) App. Cas. 398 at 407, Lord Simonds said:

For instance, if a statutory duty is prescribed but no remedy by way of penalty or otherwise for its breach is imposed, it can be assumed that a right of civil action accrues to the person who is damnified by the breach.

Thus for there is no difficulty. The next question is to define the legal basis on which, the right could be enforced against the stranger purchaser. When interpreting the section, one can properly assume that Parliament had in mind the practice of” pre-emption present in the country and the several pre-emption laws. A Legislature may be deemed to be conversant with the laws current within its territory. But that will not permit the adoption of the incidents of pre-emption recognised or provided for in other pre-emption laws, and in the Muslim law of pre-emption.

8. The right conferred under Section 22 (1) of the Hindu Succession Act cannot be enforced and a transfer secured if the alienating co-heir only intends to make a transfer. He or she could, at any time, abandon the proposal for transfer. It will be perfectly open to a person who is negotiating for a sale to a stranger, to withdraw from the negotiations and abandon the proposal for sale or his co-heir intervening to enforce his preferential right purely out of feelings of animosity towards the co-heir.. Such conduct is not unknown. A proposal to transfer may become manifest only on an irrevocable act of transfer. It is the sale against the right of the co-heirs that would constitute an infringement of the right conferred under Section 22 (1). To-repeat the cause of action is a sale to a third party, without reference to the other co-heirs who might have purchased the property for the proper price, if it had been offered. Shall we say that a firm proposal comes into existence vis-a-vis the other coheirs, when execution of the deed of transfer in favour of the stranger is taken up, and eo instanti the statutory right of purchase by the other co-heirs attaches itself to the property. Being a statutory incident of property inherited by Class I heirs it could be said that it runs with the land and binds the stranger purchaser. As I read Section 22, Parliament must have had in mind the two fold aspect of the right in the pre-emption laws current in the country : (1) the primary or substantive right to have an offer made and (2) the secondary or remedial right of the co-heirs-if the property is sold without being first offered to them to take it from the purchaser.. In my opinion, Parliament has emphasised upon the primary right of pre-emption and left the remedial right to the common law for the Courts to mould it according to the circumstances.

9. In Audh v. Gajadhar Jaipura , Mukherjea, J., (as he then was), referring to the Muslim law of pre-emption, pointed out that the right of pre-emption becomes enforceable only when there is a sale, but that the right exists antecedently to the sale The correct position of the Muslim law of pre-emption is enunciated in these words:

The correct legal position seems to be that the law of pre-emption imposes a limitation or disability upon the ownership of a property to the extent that it restricts the owners’ unfettered right of sale and compels him to sell the property to his co-sharer….The person who is a co-sharer in the land…. consequently gets an advantage or benefit corresponding to the burden with which the owner of the property is saddled ; even though it does not amount to an actual interest in the property sold. The crux of the whole thing is that the benefit : as well as the burden of the right of pre-emption run with the land and can be enforced by or against the owner of the land for the time being although the right of the pre-emptor does not amount to an interest in the land itself.

The enunciation of the legal principle here is not based on any peculiarity of the Muslim law of pre-emption. The obligation on a co-heir to submit to the preferential right of purchase of his co-heir is regarded as a limitation or disability upon the ownership of property, to the extent it restricts the owner’s unfettered, right of sale. Section 22 of the Hindu Succession Act imposes a restriction or limitation on the co-heir’s unfettered right of sale of his interest. On inheritance he takes the property subject to the restriction on his power of sale and the corresponding right in his co-heirs. Referring to the right of pre-emption as generally prevalent when dealing with the Punjab Pre-emption Act which defines the right and provides a procedure for enforcing it, Subba Rao, J., (as he then was) observed in Bishan Singh v. Khazan Singh (1958) S.C.J. 1234 : (1959) S.C.R. 878 : A.I.R. 1958 S.C. 838 at 841:

(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 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.

It is useful here to quote a passage from the Judgment of Plowden, J., in Dhani Nath v. Budhu, 136 P.R. 1894, referred to by the learned Judge in the case cited above:

A preferential right to acquire land, belonging to another, 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 a jus ad rem alienam acquierendam, and not a jus in re aliena. The right, title and interest of the owner of land, which is subject to rights of preemption, is not qualified or affected by the circumstances that is so subject. The right, title and interest which passes upon a transfer is precisely the same, whether the transfer be to a pre-emptor, or non-pre-emptor, the only difference being that in the latter case the transfer is avoidable at the instance of any pre-emptor. What is really affected by the existence of the right of pre-emption is not the right, title or interest of the owner–but the exercise of the owners’ power of transfer…. He is not at fall liberty to transfer to whomsoever he pleases….until he has given the pre-emptor the opportunity prescribed by law to exercise the preferential right of acquisition.

The same is the position of the co-heir who inherits as Class I heir under the Hindu. Succession Act. The primary or principal right, the right to offer of the thing about to be sold while it is not an interest or right in the property itself, as an inherent right attaches itself to the property. The other rights can follow therefrom as remedial and in enforcement of this primary right, since the preferential right conferred by law has to be respected and enforced by Courts in accordance with the Legislative intent. There are certain fundamental juridical principles which are necessarily pre-supposed by every statute and which determines when properly applied what legal rights and duties have been violated, and what ought to be done, in order to place those whose rights have been violated as near as may be in same situation in which they would have stood if the laws have been observed and the duties carried out. In Crawfords Construction of Statutes, 1940 Edition, at page 427, quoting Dwamis on Statutes, it is observed:

Legislation being the establishment, beforehand, of those general principles by which civil conduct is to be regulated, and jurisprudence, consisting of those principles which are developed in the application of the former to particular cases, it follows, that the latter will be more or less extensive, according as the former is more or less general or particular ; jurisprudence being the most extensive when the law is most general, and least extensive when the law goes furtherest into details and particulars. When this is the case, it so far occupies the place which would otherwise be filled with jurisprudence. Jurisprudence, on the other Hand, supplying all that Legislation leaves unprovided for in the administration of justice, and developing principles which serve as rules of conduct for cases subsequently arising, so far stands in the place, and performs the functions of legislation.

While Courts do not legislate, a statute can be carried into execution by known rules of law and equity if applicable. To avoid a sale in violation of the preferential right of the co-heirs the Court, without doing violence to the language of the sections, can rely upon the principle of either Section 38 or preferably of the 1st part of Section 40 of the Transfer of Property Act. The principle of Section 38 has been applied to cases where a person is authorised only under certain circumstances to dispose of immoveable property. It has been applied to alienation by a Hindu widow and other limited heirs, alienation by the father in derogation of the rights of his son under the Mithakshara Law and alienation by Mahants and Shebaits. It could be said that a co-heir cannot transfer his interest in the property which he inherited along with the other co-heirs, without reference to the preferential right of the co-heirs. The law which provides for inheritance by co-heirs under Class I limits the freedom of disposal of immoveable property. A co-heir can sell his interest to a person of his own choice, only if the preferential right of his co-heirs to make the purchase is not availed of by them. The 2nd paragraph of Section 40 has generally been invoked as providing substantive law and the foundation for specific relief under Section 27 (b) of the Specific Relief Act, 1877, where, there is a covenant for pre-emption, which does not give any interest in his co-heirs’ share in the immovaeble property or any easement therein. A co-heir who shares land along with another co-heir gets an advantage or benefit to acquire the latter’s interest in common property manifestly for the beneficial enjoyment of his own interest therein, when the latter co-heir seeks to dispose of his interest. A co-heir is thus saddled with a burden and his right of enjoyment as absolute owner free to dispose of his interest to whomsoever he pleases is restrained. Under the first part, of Section 40 the dominant right of the non-alienating co-heir may be enforced against a transferee for consideration with notice thereof, as the statutory obligation of a co-heir gets annexed to the ownership of the land by reason of his inheritance of the land as co-heir. In the, light of the foregoing discussion it follows that the right of a person to transfer his interest in property inherited along with other Class I heirs is subject to the preferential right of his co-heirs to take the transfer, and that any transfer in derogation of that right would be voidable at the instance of the co-heirs, who are denied their preferential right.

10. Learned Counsel for the respondents drew my attention to cases where it has been held that the right of pre-emption is a very weak right and can be defeated by all legitimate methods. But that does not mean that the right is not there to be enforced. The observation in the various decisions that it is open to a stranger vendee of property liable to pre-emption to defeat the pre-emptor’s claim by all legitimate means, is consistent with the enforcement of the pre-emptor’s claim according to law. What is said is that, as the right of pre-emption is a restriction on the normal right of conveyance, it must be exercised with utmost vigilance by the person who avails himself of it, complying strictly with the conditions in regard to its exercise..

11. There is no question here that the price shown to have been paid for the sale in favour of the and defendant is not the proper price. There has been no discussion, before me questioning the reality of the consideration paid for the sale. The passing observation of the Court below that there was a waiver of the right of pre-emption is wholly untenable. It is the case of the plaintiffs that the 1st defendant’s husband died 20 years previous to the suit, and that she had left the village and gone to Nilgris. where she was living as the mistress of a certain person and had two children by him. The 2nd plaintiff as P.W. 1 deposed that her sister the 1st defendant attended her father’s funeral and claimed a share in the properties, and that P.W. 1 told her that she had gone out of the caste. It is said that the plaintiffs then asked her to given the land free, but that she refused. P.W. 2 has deposed that the 1st defendant stated that she was not prepared to sell the property for any” price. One thing is, clear that, at the time of the funeral when there was some claim by the plaintiffs, there was no proposal by the 1st defendant to transfer her interest in the property to any one. The question of exercise of preferential right can arise only when there is a proposal to sell the property. There is no evidence that, at any time, to the knowledge of the plaintiffs, there was a proposal for sale. For the first time, the plaintiffs came to know of her intention to sell when she sold the property to the 2nd defendant. To infer waiver of the right, there must be knowledge and an opportunity to exercise the option. There can be no claim of bona fides and want of notice by the purchaser in the case, as the right conferred here is statutory and the purchase is of the share of the co-heir shortly after the inheritance opened. The thing’ speaks for itself. The existence of the right is patent and the burden is upon the purchaser to establish that the other co-heirs declared or waived their preferential right when occasion arose. It is not pretended that the purchaser made any reference to the non-alienating co-heirs before his purchase. It follows that the plaintiffs have not lost their preferential right of purchase by the sale and are entitled to have the property conveyed to them.

12. In the result there will be a decree for a conveyance of the property. The plaintiffs are given two months’ time to deposit in the trial Court the purchase price of Rs. 1,000 paid by the 2nd defendant. The second appeal is allowed accordingly. The parties will bear their respective costs throughout.

13. Leave granted.

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