Civil Appeal No 105 of 1990
From the Judgment and Order dated 103
1988 of the Rajasthan High Court in SB Civil Second Appeal No 327 of 1976
CM Lodha HM Singh and RS Yadav for the Appellant
SK Ghose M Qamaruddin and Mrs M Qamaruddin for the Respondent
The Judgment of the Court was delivered by RM SAHAI J
Is Estoppel a good defence to archaic  Atam Prakash vs State of Haryana   right of Pre emption which is a weak right  Bishen Singh vs Khazan Singh   and can be defeated by any legitimate  method Radha Kishan vs Sridhar  Barring High Court of Rajasthan and erstwhile Mewar State Jethmal vs Sajanumal 1947 Mewar Law Reports 36 most of the other high courts namely Allahabad Naunihal Singh vs Ram Ratan  Oudh Ram Rathi vs Mr Dhiraji 1947 Oudh 81 Ajmer 352 Gopinath vs RS Nand Kishore AIR 1952 Ajmer 26 Bhopal Abdul Karim vs Babu Lal AIR 1953 Bhopal and Lahore Kanshi Ram Sharma  Anr
vs Lahori Ram  Anr have answered the issue in the affirmative
The Privy Coun cil 1929 PC AIR 259 too applied this principle to non suit a pre emptor who knew that the property was in the market for long but offered to purchase only
one out of many blocs
It had Assuming that the prior completed purchase by the appellant would under other circumstances have given him the right of pre emption in respect of the blocks in suit he must be taken by his conduct to have waived this right and that it would be inequitable to allow him now to re assert it Even in Muslim Law which is the genesis of this right as it was unknown to Hindu Law and was brought in wake of Mohamme dan Rule it is settled that the right of pre emption is lost by estoppel and acquiescence
Estoppel is a rule of equity flowing out of fairness striking on behaviour deficient in good faith
It operates as a check on spurious conduct by preventing the inducer from taking advantage and assailing forfeiture already accomplished
It is invoked and applied to aid the law in administration of justice
But for it great many injustice may have been perpetrated
Present case is a glaring example of it
True no notice was given by the seller but the trial court and appellate court concurred that the pre emptor not only came to know of the sale immediately but he assisted the purchaser appellant in raising construction which went on for five months
Having thus persuaded rather misled the purchaser by his own conduct that he acquiesced in his ownership he somersaulted to grab the property with con structions by staking his own claim and attempting to unset tle the legal effect of his own conduct by taking recourse to law
To curb and control such unwarranted conduct the courts have extended the broad and paramount considerations of equity to transactions and assurances express or im plied to avoid injustice
Legal approach of the High Court thus that no estoppel could arise unless notice under Section 8 of the Rajasthan Pre emption Act In brevity the Act  was given by the seller and pre emptor should have had occasion to pay or tender price ignores the fallacy that Estoppel need not be specifically provided as it can always be used as a 353 weapon of defence
In the Privy Council decision referred earlier the court was concerned with Oudh Laws Act 18 of 1876 which too had an identical provision for giving notice by seller
No notice was given but since pre emptor knew that the property was for sale and he had even obtained details of lots he was precluded from basing his claim on pre emption
Exception to this universal rule or its non availabili ty is not due to absence of any provision in the Act ex cluding its operation but welfare of society or social and general well being
Protection was consequently sought not on the rationale adopted by the High Court that in absence of notice under Section 8 of the Act estoppel could not arise but under cover of public policy
Reliance was placed on Shalimar Tar Products vs HC Sharma   a decision on waiver and Equitable Life Assurance Society of the United States vs Reed 14 Appeal Cases 587 which laid down that there could be no estoppel against statute
Equi ty usually follows law
Therefore that which is statutori ly illegal and void cannot be enforced by resorting to the rule of estoppel
Such extension of rule may be against public policy
What then is the nature of right conferred by Section 9 of the Act In Bishen Singh vs Khazan Singh  this Court while approving the classic judgment of Mahmood J in Gobind Dayal vs Inayatullah ILR 7 All 775 FB that the right of pre emption was simply a right of substitution  observed that courts have not looked upon this right with great favour presumably for the reason that it operated as a clog on the right of the owner to alienate his property
In Radha Kishan vs Shridhar AIR 1960 SC 1369 this Court again while repelling the claim that the vendor and vendee by accepting price and transferring pos session without registration of sale deed adopted subterfuge to defeat the right of pre emption observed that there were 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
To defeat the law of pre emption by any legitimate means 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 
Such being the nature of right it is harsh to claim that its extinction by conduct would amount to statutory illegality or would be opposed to public policy
The distinction be tween validity and illegality or the transaction being void is clear and well known
The former can be waived by express or implied agreement or conduct
But not the latter
The provision in the Act requiring a vendor to serve the notice on persons having right of pre emption is condition of validity of transfer and therefore a pre emptor could waive it
Failure to serve notice as 354 required under the Act does not render the sale made by vendor in favour of vendee ultra vires
The test to deter mine the nature of interest namely private or public is whether the right which is renunciated is the right of party alone or of the public also in the sense that the general welfare of the society is involved
If the answer is latter then it may be difficult to put estoppel as a defence
But if it is right of party alone then it is capable of being abnegated either in writing or by conduct
The Act does not provide that in case no notice is given the transaction shall be void
The objective is to intimate the pre emptor who may be interested in getting himself substituted
The Act does not debar the pre emptor from giving up this right
Rather in case of its non exercise within two months may be for the financial reasons
the right stands extinguished
It does not pass on to anyone
No social disturbance is caused
It settles in purchaser
Giving up such right
expressly or impliedly cannot therefore be said to involve any interest of community or public welfare so as to be in mischief of public policy
Even otherwise on facts found that the respondent knew of the sale deed
assisted the appellant in raising the construction and after the construction was completed in the month of June he gave the notice in month of July for exer cise of the right and filed the suit in January would itself demonstrate that the conduct of the respondent was inequita ble and the courts in this country which are primarily the courts of equity justice and good conscience cannot permit the respondent to defeat the right of appellant and invoke a right which has been called a weak and inequitable right
In the result this appeal succeeds and is allowed
The order of the High Court is set aside and that of the First Appellate Court is restored
The appellant shall be entitled to his costs
GN Appeal allowed


Summary:
The appellant tenant was in occupation of a double storeyed building on a monthly rent of Rs 170
The respond ent landlady filed an application under Section 4 of the Tamil Nadu Buildings Lease and Rent Control Act 1960 for fixation of fair rent
The Rent Controller took note of the fact that 13rd portion of the building was being used for residential purpose and the rest of the building for non residential purpose namely for running a school
He also appointed an Engineer as Commissioner to evaluate the total cost of the building
The Commissioner adopted the rates prevalent in the Public Works Department and submitted his report
On the basis of the Commissioner s report the Rent Controller worked out the cost at Rs151820
Accordingly the fair rent for the said premises was arrived at Rs1518 per month at 12 per cent gross return
Since the respondent landlady had confined her claim for the enhance ment of fair rent to Rs1O00 only the Rent Controller fixed the fair rent at Rs1O00
On appeal the order of Rent Controller was affirmed by the Court of Small Causes
On a revision being preferred the High Court agreed with the valuation adopted and determined the fair rent on the basis that 13rd of the premises was used for residen tial purpose and 23rd for nonresidential purpose and as per sub sections 2 and 3 of Section 4 of the Act worked out the rent at 9 per cent and 12 per cent respectively on the cost of construction arrived at
The High Court fixed the fair rent at Rs 139167 per month
It confirmed the fair rent of Rs 1000 as was fixed by the Rent Controller and as confined to by the Respondent landlady
This appeal by special leave is against the High Court s order
It 395 was contended that the cost of the building and its market value as worked out was illegal fallacious and untenable
Dismissing the appeal HELD 1
Section 4 of the Tamil Nadu Buildings Lease and Rent Control Act 1960 prescribes the principles on the basis of which the fair rent is to be fixed
In the light of those principles the evidence adduced by the parties was considered by the Rent Controller the appellate court and the High Court and they found that the fixation of the fair rent was much in excess of the claim made by the Respondent landlady
Since she confined her claim to Rs1O00 per month the courts below have fixed the fair rent at Rs1O00
Therefore on the findings of facts based on consideration of the evidence this court cannot interfere and come to its own conclusion
The finding is neither vitiated nor illegal warranting interference
210B C 21 Sub section 4 of Section 4 of the Act clearly indicates that the total cost of construction referred to in sub sections 2 and 3 shall consist of the market value as on the date of application for fixation of the fair rent
209C 22 It is obvious that at the time when this Court rendered its decision in Nambiar s case there was no provi sion in Section 4 as to the date on which the cost of con struction was to be determined and Rule 12 provided the manner in which the fixation of the fair rent has to be made
The subsequent amendment brought on the statute in 1973 by the Amending Act 23 of 1973 has incorporated sub section 4 in Section 4 which amplified the date of appli cation as the starting point to fix market value
As such the fair rent has been rightly determined by the courts below
209D E HI KC Nambiar vs The IV Judge of the Court of Small Causes Madras  Ors  referred to