Mohammedan Law - ss. 226 and 232 - Suit for pre-emption on the ground of vicinage - On the basis of agreement for sale of the suit property - Entertainability of - Held: Suit not entertainable as no cause of action arose to file the suit - Cause of action would arise only when the suit property is actually sold and not when there is merely an agreement to sell - Transfer of Property Act, 1882 - s. 54. Pre-emption - Right to pre-emption - Nature of - Held: Such right is a weak right - There are no equities in favour of pre-emptor - Courts can not go out of their way to help the pre-emptor - Equity. In the insant matter, the question for consideration was whether a suit for pre-emption on the ground of vicinage could be entertained when only an agreement for sale has been entered into in respect of the suit property. Allowing the appeal, the Court HELD: 1.1 On a plain reading of Sections 226 and 232 of the Mohammedan Law, it is clearly evident that the right of pre-emption can only accrue to an owner of immoveable property when another immoveable property is sold to another person. Section 232 of the Mohammedan Law indicates that sale alone gives rise to pre-emption. In view of the admitted fact that merely an agreement for sale was entered into by appellant No.3 in favour of appellant Nos.1 and 2 in respect of the suit property, the question of exercising any right of pre-emption by the respondents could not arise at all. A suit for pre-emption brought on the basis of such an agreement for sale must be held to be without any cause of action as there was no right of pre-emption in the respondents which could be enforced under the law. [Paras 10 and 11] [233,G-H; 234,D] 1.2 Section 54 of Transfer of Property Act says that a contract for sale does not, of itself, create any interest in or charge on immoveable property. Therefore, where the parties enter into a mere agreement to sell, it creates no interest in the suit property in favour of the vendee and the proprietary title does not validly pass from the vendor to the vendee and until that is completed, no right to enforce pre-emption arises. Therefore, the suit for pre-emption brought on the basis of such an agreement was without any cause of action as there was no right of pre-emption in the respondents which could be enforced under the law. [Para 11] [234,B-D] Radhakishan Laxminarayan Toshniwal, vs. Shridhar Ramchandra Alshi and Ors. AIR 1960 SC 1368 - referred to. 1.3 If ultimately the sale deed is executed, it would be open for the respondents to apply for pre-emption of the suit property, provided that under the law they are permitted to maintain the suit for pre-emption. [Para 15] [235,E] 2. There are no equities in favour of a pre-emptor, whose sole object is to disturb a valid transaction by virtue of the rights created in him by statute. It would be open to the pre-emptee, to defeat the law of pre-emption by any legitimate means, which is not fraud on the part of either the vendor or the vendee and a person is entitled to steer clear of the law of pre-emption by all lawful means. The right of pre-emption is a weak right and is not looked upon with favour by courts and therefore the courts cannot go out of their way to help the pre-emptor. [Paras 11 and 12] [234, H; 235,A-B] Radhakishan Laxminarayan Toshniwal vs. Shridhar Ramchandra Alshi and Ors. AIR 1960 SC 1368 - referred to. Case Law Reference AIR 1960 SC 1368 Referred to. Paras11 and 12 Shankar Divate for the Appellant. R.S. Hegde, P.P. Singh, M. Qamaruddin and Irshad Ahmad for the Respondents., 2008(12 )SCR226 , 2008(10 )SCC153 , 2008(11 )SCALE373 , 2008(9 )JT334

                                    REPORTABLE

       IN THE SUPREME COURT OF INDIA
        CIVIL APPELLATE JURISDICTION



         CIVIL APPEAL NO. 157 OF 2001

Kumar Gonsusab & Ors.                 ...Appellants

VERSUS

Sri Mohammed Miyan
Urf Baban & Ors                     ...Respondents



                 JUDGMENT


TARUN CHATTERJEE, J.




1. This appeal is directed against the judgment and
  decree dated 5th of November, 1998 passed by

  the High Court of Karnataka at Banglore in

  R.S.A. No. 831/1996, by which the second

  appeal filed by the respondents was allowed and

  judgment and decree of the courts below were set

  aside and the suit was decreed with costs.


                                                  1
2. The moot question that was raised by the parties
  before the courts below as well as before the High

  Court was - whether the law of pre-emption

  based on vicinage is void as held by this Court in

  the case of Bhau Ram vs. B. Baijnath Singh

  [1962 Supp.3 SCC 724] and Sant Ram & Ors.

  vs. Labh Singh & Ors. [1964 (7) SCR 756].

  However, while setting aside the judgments of the

  courts below, the High Court in second appeal

  held that the law of pre-emption on the ground of

  vicinage could not be held to be void and

  unconstitutional in view of the amendment of the

  Constitution.



3. Mohd. Ismail Urf Badshah-Plaintiff No.1 (since

  deceased) and Mohammed Miyan Urf Baban-

  Plaintiff No.2 instituted a suit for permanent

  injunction      against   Smt.    Hamedabegum



                                                  2
(Defendant No. 1/Appellant No.3) wife of Mohd

Yusuf Maniyar and against Kumar Gonsusab

(Defendant No. 2/Appellant No.1) and Kumar

Shafi Mohd (Defendant No. 3/Appellant No.2)

restraining the appellants from executing a sale

deed relating to the suit property on the ground

of right of pre-emption, to purchase 6 acres 31

guntas    being     R.S.No.164/3B           situated      at

Mishrikoti village of Kalghatagi taluk, Dharwad in

the State of Karnataka (hereinafter referred to as

the `suit property') and for other incidental

reliefs. Be it mentioned at this stage, that the

original Plaintiff No.1, namely, Mohd. Ismail Urf

Badshah      died   during     the    pendency     of    the

proceeding      and      his      heirs      and        legal

representatives were brought on record. In this

judgment,     the    plaintiffs      are   described      as

respondents and the defendants are described as

appellants.




                                                           3
4.    The   case    that   was    made     out   by    the

respondents may be summarized as follows:-

The suit property was the ancestral property

belonging to the family of the respondents, which

was   sub-divided    among       the   co-sharers.    Smt.

Hamedabegum, Appellant No. 3 was born in the

family of the respondents and she was given in

marriage. The respondents were adjoining owners of

the suit property and they were entitled to pre-empt

the suit property on the ground of vicinage. The

Appellant No.3 had entered into a mere agreement

to sell the suit property to Appellant Nos. 1 and 2

by a registered agreement for sale executed on 12th

of February, 1987.     The respondents claimed pre-

emption on the ground of vicinage under the

Mohammedan Law and family customs in respect of

the suit property. Since on 19th of February, 1987,

the appellants attempted to mutate their names on

the basis of the aforesaid registered agreement to



                                                        4
sell, executed on 12th of February, 1987, the

respondents, after coming to know the intention of

the appellants to sell the suit property on the basis

of the registered agreement to sell, expressed their

intention to exercise right of pre-emption on the

ground of vicinage. Since the Appellant No.3 had

refused to sell the suit property to the respondents,

they were constrained to file the suit for permanent

injunction, restraining the Appellant No.3 from

executing the sale deed in favour of Appellant Nos.

1 and 2 claiming pre-emption on the ground of

vicinage.



5. After entering appearance, the Appellant Nos. 1

  to 3 had filed a written statement, denying the

  material allegations made in the plaint. They,

  however, admitted that the respondents were the

  owners of the adjacent land of the suit property

  and the fact of entering into an agreement to sell



                                                   5
    by Hamedabegum, Appellant No.3 in favour of

     Appellant Nos. 1&2 was admitted. It was alleged

     in the written statement that since Appellant

     No.3 was the owner of the suit property and had

     every right to sell the same to the person she

     would    have   liked,   the   suit   for   permanent

     injunction   against     the   appellants   must   be

     dismissed.

6. The following issues were framed by the trial

     court:

" i). Whether plaintiffs prove that they have right of

pre-emption over the intended sale deed executed

by defendant no.1 in favour of defendant nos. 2 and

3?

ii). Is the plaintiff entitled to pre-emption as against

all the defendants?

iii). Whether defendant nos. 1 and 3 are entitled for

compensatory costs of Rs.3000/- each?




                                                        6
iv). Whether defendants proves that law of pre-

emption is not applicable to State of Karnataka and

more so to agricultural land?

(v) Whether court fee paid is proper ?

(vi) What order ? What decree ? "




7. The trial court after framing the issues and after
  permitting the parties to adduce evidence and

  considering them and also the materials on

  record and the law as laid down in Bhau Ram

  vs. B. Baij Nath Singh (supra) and Sant Ram

  vs. Labh Singh (supra), dismissed the suit inter

  alia holding that the law of pre-emption on the

  ground of vicinage was unconstitutional and

  void.   The trial Court further held that the

  question    of   right   of   pre-emption   of   the

  respondents in respect of the suit property could

  not arise in view of the fact that the agreement

  for sale could not create any interest in the suit



                                                    7
property in favour of Appellant Nos.1&2 and for

this purpose, reliance was placed by the trial

Court on Section 232 of the Mohammedan Law.

An appeal was carried by the respondents before

the first appellate court and the first appellate

court after considering the judgment and decree

of the trial court and also after re-appreciating

the evidence on record dismissed the appeal by

its judgment dated 6th of March, 1996. Against

the judgment of affirmance of the courts below, a

second appeal was filed by the respondents

which, by the impugned judgment, allowed the

second appeal, holding that in the light of the

amendment to the Constitution, the law of pre-

emption on the ground of vicinage cannot be held

to be unconstitutional and void.    However, the

High Court had failed to deal with the question

which was decided by the trial court as well as

the appellate court to the effect whether the suit

for pre-emption brought on the basis of such an

                                                8
agreement was without any cause of action as

there   was   no    right to   pre-emption   in the

respondents which could be enforced under the

law in view of Section 232 of the Mohammedan

Law. It was further held by the High Court, while

setting aside the judgments of the courts below,

that the respondents had got right of pre-

emption, if the agreement for sale was going to be

given effect to by the appellants and if not then

certainly the respondents were not affected and

that if the agreement for sale was going to result

in a sale deed then such sale must be held to be

in violation of the above provision. With these

findings, both the judgments and decrees of the

courts below were set aside and the suit was

decreed. It may be reiterated that the High Court,

while setting aside the judgment of the courts

below, held that the law of pre-emption based on

vicinage   cannot    be   held   to   be   void   and




                                                   9
    unconstitutional in view of the amendment of the

     Constitution.




8.     Keeping the aforesaid conclusions arrived at

by the High Court in mind, we now proceed to deal

with the questions raised before us. So far as the

constitutionality of the right of pre-emption on the

ground of vicinage is concerned, we find that the

High Court, as noted hereinearlier, held that the

right of preemption on the ground of vicinage under

the Mohammedan Law cannot be said to be

unconstitutional and void in view of the amendment

to the Constitution.     Whereas the Courts below

relying on the two decisions, namely Bhau Ram's

case (supra) and Sant Ram's case (Supra), held

that the right of preemption on the ground of

vicinage was unconstitutional and void. It is true

that subsequent to the aforesaid two decisions, this

Court again reiterated the principles as laid down in



                                                  10
Bhau Ram's case (supra) and Sant Ram's case

(Supra) in the case of Atam Prakash vs. State of

Haryana & Ors. [(1986) 2 SCC 249] and also in

A.Razzaque Sajansaheb Bagwan & Ors. vs.

Ibrahim Haji Mohammed Husain [(1998) 8 SCC

83].   We, however, do not intend to go into this

question in this case as in view of our decision on

the other issue, namely, whether the suit for

preemption   on   the   ground    of   vicinage   was

maintainable in law in view of the admitted fact that

only an agreement for sale of the suit property was

entered into by the appellant No. 3 with the

Appellant Nos. 1 & 2.




9. Let us now take up the other question that was

  raised by the learned counsel for the parties. In

  our view, as indicated herein earlier, the issue

  whether the suit for pre-emption on the ground



                                                  11
 of vicinage could be entertainable when only a

  mere agreement for sale has been entered into by

  the appellant No.1 in favour of the appellant Nos.

  2 and 3 in respect of the suit property. In our

  view, on this account, the judgment and decree

  of the High Court cannot be sustained.



10.   Admittedly, a registered agreement for sale

was entered into by the appellant No.1 with the

appellant Nos. 2 and 3. Before we proceed further,

we may refer to Chapter XIII of the Mohammedan

Law, (Ed.19 by Mulla). Chapter XIII deals with pre-

emption under the Mohammedan Law. Section 226

says that right of pre-emption is a right which the

owner of an immovable property possesses to

acquire by purchase another immoveable property

which has been sold to another person. Section 232

of the Mohammedan Law would also be relevant

which runs as under:




                                                 12
    " 232. Sale alone gives rise to pre-emption -

     The right of pre-emption arises only out of
     a valid (a), complete (b), and bonafide (c)
     sale. It does not arise out of gift (hiba),
     sadaquah (s.171), wakf, inheritance,
     bequest (d), or a lease even though in
     perpetuity (e), Nor does it arise out of a
     mortgage even though it may be by way of
     conditional sale (f); but the right will
     accrue, if the mortgage is foreclosed (g). An
     exchange of properties between two
     persons subject to an option to either of
     them to cancel the exchange and take
     back his property at any time during his
     life, stands on the same footing as a
     conditional sale; such an exchange does
     not extinguish the ownership in the
     property and does not give rise to the right
     of pre-emption. But if one of the parties
     dies without canceling the exchange, the
     transaction will mature into two sales and
     will give rise to the right of preemption (h).
     It has been held by the High Court of
     Allahabad that a transfer of property by a
     husband to his wife in lieu of dower is a
     sale, and is therefore subject to a claim for
     pre-emption (i). On the other hand, the
     Chief Court of Oudh has held that the
     transaction amounts to a hiba-bil-ewaz,
     and no claim for pre-emption can therefore
     arise (j).



     On a plain reading of Sections 226 and 232 of

the Mohammedan Law, it is clearly evident that the



                                                      13
right of pre-emption can only accrue to an owner of

immoveable property when another immoveable

property is sold to another person. Section 232 of

the Mohammedan Law also indicates that sale

alone gives rise to pre-emption. Such being the

provision made in Sections 226 and 232 and in

view    of the   admitted   fact that in this case

admittedly sale was not affected by appellant No.1

in favour of the appellant Nos. 2 and 3 in respect of

the suit property, we are not in a position to hold

that the suit for pre-emption was maintainable as

there was no cause of action to file such suit in the

absence of a sale deed effected in respect of the said

agreement for sale.




11. In this connection, Section 54 of the Transfer

       of Property Act may also be referred to. Section

       54 of the Transfer of Property Act says that a

       contract for sale does not, of itself, create any



                                                     14
interest in or charge on immoveable property.

Therefore, where the parties enter into a mere

agreement to sell, it creates no interest in the

suit property in favour of the vendee and the

proprietary title does not validly pass from the

vendors to the vendee and until that is

completed no right to enforce pre-emption

arises. Therefore, in our view, the suit for pre-

emption brought on the basis of such an

agreement was without any cause of action as

there was no      right of pre-emption in the

respondents which could be enforced under

the law. In Radhakishan Laxminarayan

Toshniwal,     vs.   Shridhar     Ramchandra

Alshi &Ors. [AIR 1960 SC 1368], this Court

has held that the transfer of property, where

the Transfer of Property Act applies, has to be

under the provisions of the Act only and

Mohammedan Law or any other personal law

of transfer of property cannot override the

                                              15
statute. Therefore, unless title to the suit

property has passed in accordance with the

Act, no right to enforce pre-emption arises. In

view of our discussions made hereinabove, we

are, therefore, of the view that in view of the

admitted fact that merely agreement for sale

was entered into by the appellant No.3 with

the appellant Nos.1 and 2 in respect of the suit

property, the question of exercising any right

of pre-emption in the respondents could not

arise at all, as already observed, a suit for pre-

emption brought on the basis of such an

agreement for sale must be held to be without

any cause of action as there was no right of

pre-emption in the respondents which could

be enforced under the law. We should not be

unmindful of the fact that there are no equities

in favour of a pre-emptor, whose sole object is

to disturb a valid transaction by virtue of the

rights created in him by statute. It is well

                                               16
     settled that it would be open to the pre-

      emptee, to defeat the law of pre-emption by

      any legitimate means, which is not fraud on

      the part of either the vendor or the vendee and

      a person is entitled to steer clear of the law of

      pre-emption by all lawful means.




12.   That apart, it is now well settled that the right

of pre-emption is a weak right and is not looked

upon with favour by courts and therefore the courts

cannot go out of their way to help the pre-emptor.

(See: Radhakishan Laxminarayan Toshniwal

vs. Shridhar Ramchandra Alshi & Ors. [AIR

1960 SC 1368].



13.Such being the position, we are, therefore, of the

   view that the right of pre-emption was not

   available to the respondents in view of the

   discussions made herein above.



                                                    17
14.For the reasons aforesaid, this appeal is allowed

   and the judgment and decree of the High Court

   in the second appeal is set aside and consequent

   thereupon    the   suit   of   the   respondents         is

   dismissed. There will be no order as to costs.



15.    We make it clear that if ultimately the sale

deed    is executed, it would be open              for the

respondents to apply for pre-emption of the suit

property, if under the law they are permitted to

maintain the suit for pre-emption.



                                    .........................J.
                                    [Tarun Chatterjee]




New Delhi;                          .........................J.
August 19, 2008.                    [P.Sathasivam]




                                                           18

after passing of the Punjab Pre-emption 2 (Haryana Amendment) Act, 10 of 1995, (hereinafter referered to as "the Act") the right of pre-emption on the basis of co- sharership is not available

                                                           REPORTABLE




                IN THE SUPREME COURT OF INDIA




                 CIVIL APPELLATE JURISDICTION




                 CIVIL APPEAL NO. 6391  OF 2003






Pirthi                                                   .... Appellant (s)






             Versus






Mohan Singh & Ors.                                     .... Respondent(s)










                            J U D G M E N T 




P. Sathasivam, J.




1)     This   appeal   is   directed   against   the   final   judgment   and 






order   dated   07.03.2002   passed   by   the   High   Court   of   Punjab 






and Haryana at Chandigarh in RSA No. 136 of 2001 whereby 






the   High   Court   dismissed   the   appeal   filed   by   the   appellant 






herein.




2)     Brief facts:




(a)    The   appellant-plaintiff   and   respondent   No.5   -   whose 






name   has   been   deleted   from   the   array   of   parties   by   this 






Court's order dated 08.08.2003,  filed  a suit for possession by 










                                                                           1



way   of   pre-emption   being   Civil   Suit   No.   107/92/93   against 






respondent Nos. 1-4 herein (Defendants) before the Civil Judge 






(Jr.   Division),   Bahadurgarh,   Haryana   claiming   themselves   to 






be   co-sharers   with   the   vendor   -   Shiv   Lal-defendant   No.3 






(respondent          No.3         herein-since         deceased,         his         legal 






representatives are on record), who sold away his half share of 






the suit land comprised in Khewat No. 22 (min.), Khasra Nos. 






47   and   48,   Khasra   No.   1043   measuring   3   bighas,   3   biswas 






pukhta   1058   (2-11)   and   Khewat   No.   28   (min.),   Khasra   Nos. 






54-55.   Khasra   No.   5496/1693   (2-16)   5497/1693(1-5)   total 






measuring   10   Bighas   8   Biswas   to   defendant   Nos.   1   &   2 






(respondent Nos. 1 & 2 herein) by sale deed dated 08.06.1992 






for   a   consideration   of   Rs.1,40,000/-   and   for   declaring   the 






lease deed No. 326 dated 07.05.1992 illegal, null and void and 






unwarranted by law.   Defandant Nos. 1 & 2 are brothers and 






defendant No. 4 (respondent No.4 herein) is their mother.  






(b)    When   the   case   was   fixed   for   service   of   the   remaining 






defendants,   defendant   Nos.   1   &   4   filed   an   application   for 






dismissing the suit of the plaintiffs being not maintainable on 






the   ground   that   after   passing   of   the   Punjab   Pre-emption 








                                                                                        2



(Haryana   Amendment)   Act,   10   of   1995,   (hereinafter   referered 






to   as   "the   Act")   the   right   of   pre-emption   on   the   basis   of   co-






sharership   is   not   available   to   them.     The   Civil   Judge   (Jr. 






Division),   by   judgment   dated   09.02.1996,   accepting   the 






application filed by the defendants dismissed the suit filed by 






the plaintiffs.   






(c)    Aggrieved   by   the   said   judgment,   the   plaintiffs   filed   an 






appeal being Civil Appeal No. 23 of 1996 before the Additional 






District   Judge,   Jhajjar.     By   order   dated   18.07.2000,   the 






Additional   District   Judge   dismissed   the   appeal   filed   by   the 






plaintiffs.  






(d)    Challenging   the   order   passed   by   the   Additional   District 






Judge,   Pirthi-plaintiff   No.1   (appellant   herein)   filed   regular 






second   appeal   being   RSA   No.   136   of   2001   before   the   High 






Court   of  Punjab  &  Haryana   at Chandigarh.     The  High Court, 






by   impugned   judgment   dated   07.03.2002,   holding   that   the 






plaintiff/appellant had lost the character of a co-owner during 






the pendency  of the suit, dismissed the  appeal.     Against the 






said judgment, the appellant-plaintiff  has  filed this appeal by 






way of special leave petition before this Court.








                                                                                  3



3)     Heard Mr. Mahabir Singh, learned senior counsel for the 






appellant   and   Mr.   Pramod   Dayal,   learned   counsel   for 






respondent Nos. 2 & 4.   Despite service of notice, respondent 






Nos.1 and  3 have not  chosen  to appear in-person or through 






counsel.  




Discussion:




4)     It   is   the   case   of   the   respondents/defendants   that 






superior right of pre-emption on the basis of co-sharership is 






not   available   to   plaintiffs   now.     After   passing   of   the   Act,   this 






right has been restricted only to the tenants and the plaintiffs 






have  no  locus-standi  to  file  and pursue  their   suit  as they   are 






not   claiming   the   right   as   tenants.     It   is   the   claim   of   the 






appellant/plaintiff   that   the   suit   in   question   was   instituted 






prior to the amendment in the Punjab Pre-emption Act, 1913 






hence   the   amendment   in   the   Act   is   not   applicable   to   the 






present   case.     The   trial   Court   accepted   the   objection   of   the 






defendants as to the maintainability of the suit and dismissed 






the same as not maintainable which was affirmed by the lower 






appellate   Court.     The   same   view   has   been   reiterated   by   the 






High Court by dismissing the second appeal.  








                                                                                  4



5)    It is true that the suit, in the present case, was filed prior 






to   the   amendment   in   the   Punjab   Pre-emption   Act,   1913. 






Section   15   of   the   Pre-emption   law   has   been   amended   and 






notified   vide   Gazette   Notification   dated   17.05.1995   which 






reads as under:






      "15. Right of Pre-emption to vest in tenant  - The right of 


      pre-emption in respect of sale of agricultural land and village 


      immovable property shall vest in the tenant who holds under 


      tenancy of the vendor/vendors the land or property sold or a 


      part thereof."









This   change   in   the   law   affects   all   pre-emption   cases   based 






upon the  co-sharership.   In view  of this  change  in the  law, a 






co-sharer has no right to bring a suit for possession by way of 






pre-emption, hence the application filed by the defendants for 






dismissing the suit of the plaintiffs being not maintainable had 






been accepted by the trial Court and suit of the plaintiff came 






to   be   dismissed.   This   was   affirmed   by   the   lower   appellate 






Court   and   finally   by   the   High   Court   which   order   is   under 






challenge in this appeal. 






6)    While   ordering   notice   on  the   special  leave  petition,   even 






as  early   as  on  02.09.2002,   it  was  specifically   mentioned   that 






as to why the case be not decided in the light of a Constitution 










                                                                          5



Bench   judgment   in  Shyam   Sunder   and   Others  vs.  Ram  




Kumar and Another, (2001) 8 SCC 24.  




7)    In  Bhagwan   Das  (dead)   by  LRS.   and   Others  vs.  Chet  




Ram,   1971   (1)   SCC   12,   a   three-Judge   Bench   of   this   Court, 




while   considering   right   of   pre-emption   has   held   that   pre-






emptor's   right   should   subsist   till   institution   of   suit   for   pre-






emption   and   passing   of   decree.     It   was   further   held   that   the 






rule that a pre-emptor must maintain his qualification to pre-






empt up to the date of decree was recognized as well settled. 






8)    In  Rikhi   Ram   and   Another  vs.  Ram   Kumar   and  




Others, (1975) 2 SCC 318, again, a three-Judge Bench of this 




Court,   while   considering   right   of   pre-emption   under   the 






Punjab Pre-emption Act, 1913, after adverting to the principles 






laid   down   in  Bhagwan   Das   (supra)  and   considering   Section 






15(1)   of   the   Punjab   Pre-emption   Act   held   that   under   the 






general   law   of   pre-emption,   it   is   firmly   established   that   the 






decisive   date   as   regards   the   right   of   pre-emptor   to   pre-empt 






the sale was the date of the decree.   In other words, the pre-






emptor who claims the right to pre-empt the sale on the date 






of the sale must continue to possess that right till the date of 








                                                                              6



the   decree.     If   he   loses   that   right   before   the   passing   of   the 






decree, decree for pre-emption cannot be granted even though 






he may have had such right on the date of the suit.   






9)     Now,   let   us   consider   the   decision   of   the   Constitution 






Bench i.e.  Shyam Sunder  (supra) and its applicability  to the 






case on hand.  Both the above decisions being Bhagwan Das  




(supra)  and  Rikhi   Ram   (supra)  were   relied   on   by   the 




Constitution Bench.    






10)    The   very   same   Haryana   Amendment   Act,   10   of   1995, 






which   introduced   Section   15,   was   considered   by   a 






Constitution Bench in  Shyam Sunder  (supra).   The question 






posed before the Constitution Bench was: 






       "What   is   the   effect   of   substituted   Section   15 


       introduced   by   the   Haryana   Amendment   Act,   1995 


       (hereinafter referred to as `the amending Act, 1995') 


       in   the   parent   Act   i.e.   the   Punjab   Pre-emption   Act 


       (hereinafter   referred   to   as   `the   parent   Act')   as 


       applicable to the State of Haryana whereby the right 


       of   a   co-sharer   to   pre-empt   a   sale   has   been   taken 


       away during the pendency of an appeal filed against 


       a   judgment   of   the   High   Court   affirming   the   decree 


       passed by the trial Court in a pre-emption suit?"






11)    When   in   the   case   of  Shyam   Sunder  (supra),   the   main 






appeal, i.e., Civil Appeal No. 4680 of 1993 came up for hearing 










                                                                                 7



before a Bench of this Court, the Bench, on the question of the 






effect   of   the   amendment   made   in   1995   in   the   parent   Act, 






found that there is conflict in the view taken in the decisions 






of   two   three-Judge   Benches   of   this   Court,   which   are  Didar  




Singh  vs.  Ishar Singh  (2001) 8 SCC 52 wherein it was held 




that in a suit for pre-emption, the pre-emptor must prove his 






right to pre-empt up to the date of decree of the first court and 






any loss of right or subsequent change in law after the date of 






adjudication of the suit and during pendency of appeal would 






not affect the decree of the first court and Ramjilal vs. Ghisa  




Ram  (1996) 7 SCC 507 wherein it was laid down that appeal 




being continuation of the suit, the right to claim pre-emption 






must be available on the date when the decree is made and is 






finally   to   be   affirmed   or   needs   to   be   modified   at   the   time   of 






disposal of the appeal therefrom, and since the amending Act 






came   into   force   during   pendency   of   appeal,   the   right   and 






remedy of the plaintiff stood extinguished and as a result the 






suit   must   fail.     In   order   to   resolve   the   conflict   between   the 






aforesaid two decisions rendered by two different Benches, the 






Bench   referred   the   appeal   for   decision   by   a   Bench   of   five 








                                                                                  8



Judges.   It   is   in   this   way,   the   matter   was   heard   by   the 






Constitution Bench.  






12)    The Constitution Bench noted the facts which have given 






rise   to   Civil   Appeal   No.   4680   of   1993.       The   defendant-






appellants   herein   purchased   land   measuring   54   kanals, 






situated in Village Rithal Phogat, being 1/2 share of the land 






of Khewat Nos. 204, 205 and 206, measuring 108 kanals for a 






sum   of   Rs   84,000/-   from   vendors   viz.   Bharpai,   Chhoto   and 






Pyari   --   daughters   of   Bhagwana   vide   sale   deed   dated 






17-07-1985.   The   plaintiff-respondents   herein   claimed 






preferential   right   to   pre-empt   the   sale   in   favour   of   the 






defendant-appellants   on   the   ground   that   they   are   co-sharers 






by   means   of  a  civil   suit  laid   before   the   Sub-Judge,   Ist  Class, 






Gohana.   In   the   said   suit,   issues   were   framed   and   the   trial 






court   decided   all   the   issues   in   favour   of   the   plaintiff-






respondents   and   consequently   on   30-5-1990   the   suit   was 






decreed.   The   respondents   after   passing   of   the   decree   by   the 






court   of   first   instance   deposited   the   purchase   money   as 






required under Order 20 Rule 14 CPC. The appeal preferred by 






the appellants before the first appellate court and the second 








                                                                             9



appeal before the High Court were dismissed and the decree of 






the   trial   court   was   affirmed.   The   appellants   thereafter 






preferred  this   appeal   by   way  of   special   leave   petition.   During 






pendency of the appeal, Section 15(1)(b) of the parent Act, on 






the   basis   of   which   the   suit   was   filed   by   the   plaintiff-






respondents,   was   amended   and   was   substituted   by   new 






Section 15 whereby the right of a co-sharer to pre-empt a sale 






was   taken   away.   The   substituted   Section   15   of   the   Act   has 






been quoted earlier.






13)    Since several decisions have been cited, the Constitution 






Bench  categorized those  decisions  and referred them   as  first, 






second and third categories of decisions.   The first category of 






decisions  are those wherein the  view  of law  expressed  is that 






in   a   suit   for   pre-emption,   the   pre-emptor   must   possess   his 






right   to   pre-empt   right   from   the   date   of   sale   till   the   date   of 






decree of the first court, and loss of that right after the date of 






decree   either   by   own   act,   or   an   act   beyond   his   control   or   by 






any   subsequent   change   in   legislation   which   is   prospective   in 






operation   during   pendency   of   the   appeal   filed   against   the 






decree of the court of first instance would not affect the right 








                                                                                   10



of the pre-emptor. The second category of decisions deals with 






the cases where right of a pre-emptor was taken away after the 






date   of   decree   of   the   first   court   and   during   pendency   of   the 






appeal   by   statutory   enactment   which   had   retroactive 






operation. In such cases, it was held that the appellate court 






is   competent   to   take   into   account   legislative   changes   which 






are   retrospective   and   accordingly   affect   the   rights   of   the 






parties to the litigation. The decisions in the third category of 






cases   are   those   where   it   has   been   held   that   appeal   being   a 






continuation of the suit, the right to pre-empt a sale must be 






available on the date when the decree is made and is finally to 






be affirmed or needs to be modified at the time of disposal of 






appeal   and   in   case   of   loss   of   right   by   legislative   changes 






during pendency of appeal, the suit for pre-emption must fail. 






After   analyzing   various   decisions   referred   to   in   the   first 






category,   the   Constitution   Bench   formulated   the   following 






legal principles:






      "1.  The  pre-emptor  must  have  the  right  to  pre-empt  on  the 


      date of sale, on the date of filing of the suit and on the date 


      of   passing   of   the   decree   by   the   court   of   the   first   instance 


      only.










                                                                                            11



       2. The pre-emptor who claims the right to pre-empt the sale 


       on the date of the sale must prove that such right continued 


       to  subsist  till  the passing  of  the  decree   of the first   court.  If 


       the claimant loses that right or a vendee improves his right 


       equal   or   above   the   right   of   the   claimant   before   the 


       adjudication of suit, the suit for pre-emption must fail.




       3.   A   pre-emptor   who   has   a   right   to   pre-empt   a   sale   on   the 


       date  of institution  of the suit and on the date  of passing of 


       decree, the loss of such right subsequent to the decree of the 


       first court would not affect his right or maintainability of the 


       suit for pre-emption.




       4.   A   pre-emptor   who   after   proving   his   right   on   the   date   of 


       sale, on the date of filing the suit and on the date of passing 


       of   the   decree   by   the   first   court,   has   obtained   a   decree   for 


       pre-emption by the court of first instance, such right cannot 


       be taken away by subsequent legislation during pendency of 


       the   appeal   filed   against   the   decree   unless   such   legislation 


       has retrospective operation."






14)    The   legal   position   that   emerges  on   review   of   the   second 






category of decisions is that the appeal being a continuation of 






the   suit,   the   appellate   court   is   required   to   give   effect   to   any 






change in law which has retrospective effect.   In para 15, the 






Constitution   Bench   has   held   that   the   legal   principle   that 






emerges out of the aforesaid decisions is that an appeal being 






a   continuation   of   the   suit,   the   right   to   pre-empt   must   be 






available on the date when the decree is made and is finally to 






be affirmed or needs to be modified at the time of disposal of 






the   appeal   and   where   right   and   remedy   of   the   plaintiff   has 










                                                                                             12



been   taken   away   statutorily   during   pendency   of   appeal,   the 






suit must fail.






15)    The   following   discussion   and   conclusion   in   para   28   are 






relevant:






       "...   .....   In  Shanti   Devi  v.  Hukum   Chand,   (1996)   5   SCC   768, 


       this Court had occasion to interpret the substituted Section 


       15   with   which   we   are   concerned   and   held   that   on   a   plain 


       reading of Section 15, it is clear that it has been introduced 


       prospectively   and   there   is   no   question   of   such   section 


       affecting in any manner the judgment and decree passed in 


       the   suit   for   pre-emption   affirmed   by   the   High   Court   in   the 


       second   appeal.   We   are   respectfully   in   agreement   with   the 


       view   expressed   in   the   said   decision   and   hold   that   the 


       substituted   Section   15   in   the   absence   of   anything   in   it   to 


       show that it is retrospective, does not affect the right of the 


       parties which accrued to them on the date of the suit or on 


       the   date   of   passing   of   the   decree   by   the   court   of   first 


       instance.   We   are   also   of   the   view   that   the   present   appeals 


       are   unaffected   by   change   in   law   insofar   it   related   to 


       determination of the substantive rights of the parties and the 


       same are required to be decided in the light of the law of pre-


       emption as it existed on the date of passing of the decree."






16)    After   analyzing   all   the   decisions   cited   therein,   the 






Constitution Bench has concluded thus:






       "44.  From   the   aforesaid   decisions,   the   legal   principle   that 


       emerges is that the function of a declaratory or explanatory 


       Act is to supply an obvious omission or to clear up doubts as 


       to meaning of the previous Act and such an Act comes into 


       effect from the date of passing of the previous Act. Learned 


       counsel for the appellants strongly relied upon a decision of 


       a two-Judge Bench of this Court in Mithilesh Kumari v. Prem  


       Behari   Khare  in   support   of   his   argument.   In   the   said 


       decision,   it   was   held   by   this   Court   that   the   Benami 


       Transactions (Prohibition) Act, 1988 being a declaratory Act, 


       the   provisions   of   Section   4   of   the   Act   have   retroactive 


       operation.   The   reliance   on   this   decision   by   the   appellants' 










                                                                                          13



       counsel is totally misplaced as this decision was overruled in 


       R. Rajagopal  Reddy  v.  Padmini  Chandrasekharan  wherein it 


       was held that the Act was not passed to clear any doubt that 


       existed as to the common law or the meaning of effect of any 


       statute and it was, therefore, not a declaratory Act.






       45.  We   have   already   quoted   substituted   Section   15   of   the 


       amending  Act but do not  find that  the amending  Act either 


       expressly or by necessary implication intended to supply an 


       omission   or   to   clear   up   a   doubt   as   to   the   meaning   of   the 


       previous Section 15 of the parent Act. The previous  Section 


       15   of   the   parent   Act   was   precise,   plain   and   simple.   There 


       was   no   ambiguity   in   it.   The   meaning   of   the   words   used   in 


       Section   15   of   the   parent   Act   was   never   in   doubt   and   there 


       was no omission in its phraseology which was required to be 


       supplied  by the  amending   Act.   Moreover,   the  amending  Act 


       either   expressly   or   by   implication   was   not   intended   to   be 


       retroactive and for that reason we hold that amending Act 10 


       of   1995   is   not   a   declaratory   Act   and,   therefore,   it   has   no 


       retrospective operation.






       46.  For the aforestated reasons, we approve the view of law 


       taken in Didar Singh v. Ishar Singh and further hold that the 


       decision   in   the   case   of  Ramjilal  v.  Ghisa   Ram  does   not   lay 


       down the correct view of law.






       47.  The   result   of   the   aforesaid   discussion   is   that   the 


       amending Act being prospective in operation does not affect 


       the   rights   of   the   parties   to   the   litigation   on   the   date   of 


       adjudication of the pre-emption suit and the appellate court 


       is   not   required   to   take   into   account   or   give   effect   to   the 


       substituted Section 15 introduced by the amending Act.






       48. In view of what has been stated above, these appeals fail 


       and accordingly are dismissed, but there shall be no order as 


       to costs."






17)    From  the above discussion, particularly, in para 45, the 






Constitution Bench observed that the Amending Act 10/1995 






is not a declaratory Act and, therefore, it has no retrospective 










                                                                                            14



operation.     In   para   46,   the   Constitution   Bench   has   approved 






the view of law taken in Didar Singh (supra) and further held 






that the decision in the case of  Ramjilal  (supra) does not lay 






down   the   correct   view   of   law.     No   doubt,   in   the   penultimate 






para   47,   the   Constitution   Bench   has   concluded   that   the 






amending   Act   being   prospective   in   operation   does   not   affect 






the   rights   of   the   parties   to   the   litigation   on   the   date   of 






adjudication of the pre-emption suit and the appellate court is 






not   required   to   take   into   account   or   give   effect   to   the 






substituted Section 15 introduced by the amending Act.   It is 






clear   that   the   appellate   court   is   not   required   to   take   into 






account or give effect to the substituted Section 15 introduced 






by   the   amending   Act.     On   the   other   hand,   as   discussed   and 






concluded   in   para   46,   the   dictum   laid   down   in  Didar   Singh 






(supra)   has   been   approved.     In  Didar   Singh  (supra),   it   was 






held that in a suit for pre-emption, pre-emptor must prove his 






right to pre-empt up to the date of the decree of the first court 






and   any   loss   of   right   or   subsequent   change   in   law   after   the 






date   of   adjudication   of   the   suit   and   pre-tendency   of   appeal 






would   not   affect   the   decree   of   the   first   court.     The   said   view 








                                                                                  15



has been approved by the Constitution Bench.  In other words, 






in a suit for pre-emption, the pre-emptor must prove his right 






to pre-empt up to the date of decree of the first court.   To put 






it clear, the pre-emptor must have the right to pre-empt on the 






date of sale on the date of filing of the suit and on the date of 






passing   of   the   decree   by   the   court   of   the   first   instance 






[Emphasis   supplied].     In   the   case   on   hand,   the   amendment 






Act came into force with effect from 17.05.1995 and suit had 






been   laid   on   31.10.1992.     In   other   words,   on   the   date   of 






institution  of  the  suit,   the  plaintiff/pre-emptor had  a  right  to 






claim "right of pre-emption".  However, during the pendency of 






the   suit,   since   the   amendment   Act   came   into   force,   deleting 






the   right   of   pre-emption   and   in   the   absence   of   such   right   on 






the date of passing of the decree by the court of first instance, 






we   are   of   the   view   that   both   the   courts   below   have   correctly 






appreciated   the   effect   of   the   amendment   and   the   High   Court 






also   rightly   dismissed   the   second   appeal   holding   that   the 






plaintiff   had   lost   the   character   of   a   co-owner   during   the 






pendency of the suit by virtue of the amendment Act. 










                                                                               16



18)    In view of the above discussion and the interpretation of 






the   Constitution   Bench   in   respect   of   substituted   Section   15 






introduced   by   the   Haryana   Amendment   Act,   1995   in   the 






Parent Act i.e. the Punjab Pre-emption Act, we concur with the 






view   expressed   by   all   the   three   courts   including   the   High 






Court.     Consequently,   the   appeal   fails   and   the   same   is 






dismissed.  No order as to costs.               






                                   ..........................................J. 


                                          (P. SATHASIVAM) 








                                      ..........................................J. 


                                         (H.L. GOKHALE) 




NEW DELHI;


September 2, 2011.          










                                                                         17