IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH --- Regular Second Appeal No. 950 of 1984 Date of decision: 16.5.2008 Jodh Singh and another --- Appellants Versus Smt. Shanti Bai --- Respondent --- CORAM: HON’BLE MR. JUSTICE AJAY KUMAR MITTAL --- PRESENT: Mr. Sanjay Vij, Advocate for the appellants. Mr. Amit Jain, Advocate for the respondent. --- AJAY KUMAR MITTAL, J. The claim of the plaintiff-respondent, who is no more now and is represented in this appeal through her legal representatives, for possession of a piece of land measuring 16 Kanals, did not find favour with the trial court. Owing to reversal of trial court’s findings, she succeeded before the first appellate court and a decree for possession by way of pre-emption came to be passed in her favour. Now to appreciate the controversy, a glance at the facts is necessary. The plaintiff brought a suit for possession by way of pre- emption in respect of land measuring 16 Kanals. It was averred that R.S.A. No. 950 of 1984 the suit land was owned by Surjit Singh. The plaintiff was a co-sharer in the said land. The owner sold the suit land to the defendants vide registered sale deed dated 12.5.1980 for a consideration of Rs. 24,000/- for which no notice was given by the vendor to the plaintiff. The plea raised by the plaintiff in the context was that the defendants were strangers and she being a co-sharer had a preferential right to pre-empt the sale in question. The defendants contested the claim tooth and nail. It was pleaded by the defendants that Surjit Singh had sold the perpetual lease rights in respect of the suit property to them on 12.5.1980 for a consideration of Rs. 24,000/- and, since only the perpetual lease rights had been sold, the suit for pre-emption was not maintainable. The defendants further pleaded that the plea of the plaintiff was barred by the principle of res judicata in view of judgment of this Court in Regular Second Appeal No. 490 of 1968, dated 1.9.1978. The defendants also raised certain preliminary objections regarding limitation and cause of action etc. The controversy as noticed above was further crystallized by the following issues: 1- Whether the transaction in dispute is a sale? OPP 2- Whether the transaction in dispute is permanent lease as alleged? 3- If the transaction in question is proved to be a sale, whether the plaintiff has a superior right to pre-empt that sale? Pa ge R.S.A. No. 950 of 1984 4- Whether the expenses of stamps and registration fees etc. were incurred by the defendants and if so, to what amount? OPD 5- Whether the defendants effected any improvement on the suit land and if so, to what amount and to what effect? OPD 6- Whether the suit is barred by the principle of res judicata? OPD 7- Whether the suit is time barred? OPD 8- Whether the plaintiff is estopped from filing this suit? OPD 9- Whether the plaintiff has no cause of action to file this suit? OPD 10- Whether the defendants are entitled to special costs and if so, to what amount? OPD 11- Relief. Trial court, upon appreciation of evidence and consideration of law on the subject, held that the plaintiff was a co- sharer in Khewat No.27 of which the suit land also forms a part. Surjit Singh vendor had only perpetual lease rights in the suit property and thus, he could not transfer the ownership rights thereof to the defendants. It was, in other words, held that the transaction in question effected vide document Exhibit D-4 was not a sale of ownership rights but was only a sale of perpetual lease rights. In the wake of these findings, the trial court returned a finding that the plaintiff did not have any right of pre-emption in respect of sale of perpetual lease rights even though she was a co-sharer in the suit land. It was further held that the judgment of this Court in Regular Second Appeal No. 490 of Pa ge R.S.A. No. 950 of 1984 1968 operated as res judicata against the plaintiff and she was estopped from filing the instant suit. On the basis of these findings, the trial court dismissed the suit vide judgment and decree dated 17.12.1983. Before the first appellate court, the pleas raised by the plaintiff were accepted. The first appellate court on appreciation of evidence returned a finding that after considering all aspects it cannot be said that the sale transaction made vide document Exhibit D-4 (which is a registered document and according to the plaintiff, this is a sale deed vide which the plaintiff sold the suit land to the defendants) was in fact the sale of lease rights. It was also held that the vendor Surjit Singh being a perpetual tenant in 1965 became owner of the suit land by virtue of provisions of the Punjab Occupancy Tenants (Vesting of Proprietary Rights) Act, 1952 (in short “the 1952 Act”), which was enacted with the sole purpose of conferring ownership on the occupancy tenants. On the question of suit being hit by principle of res judicata, the first appellate court clearly observed that the parties before it and those before the High Court in Regular Second Appeal No. 490 of 1968 were different. In the matter taken before the High Court, the transaction had been described to be a sale of lease rights whereas in the instant case, the transaction had been described to be sale of immovable property and thus, by no stretch of imagination, the principle of res judicata could be invoked. The findings on issue Nos. 1 to 3, 6 and 8 were accordingly reversed by the first appellate court. As a consequence thereof, the appeal was accepted and the suit was Pa ge R.S.A. No. 950 of 1984 decreed by the first appellate court by judgment and decree dated 15.3.1984. The plaintiff was directed to deposit a sum of Rs. 24,000/- plus Rs. 3355.25 as stamp and registration charges less the amount deposited as 1/5th of pre-emption amount, in the trial court within one month from the date of the decree, failing which it was further ordered, the suit was to be dismissed. It is thus, the above decree of the first appellate court which has been impugned by the defendants in this second appeal. Learned counsel for the appellants laid challenge to the judgment and decree of the lower appellate court and submitted that the document regarding sale was of perpetual lease rights and it was not an out-right sale and, therefore, the same was not pre-emptible. By relying upon 2004(8) SCC 717, learned counsel submitted that the name given to a document is conclusive and the intention of the parties is to be gathered from the reading of the entire recitals, and the terms of the document and the surrounding circumstances. According to the learned counsel, though the document in question had been labelled as sale deed, but in fact, it transferred only perpetual lease hold rights which are not pre-emptible. The counsel next argued that the present suit was barred by the principle of res judicata as on an earlier occasion, the plaintiff therein had failed upto the High Court in Regular Second Appeal No. 490 of 1968 decided on 1.9.1978 (1978 PLJ 353) wherein the right of pre-emption in respect of perpetual lease hold rights was negatived by this Court. Pa ge R.S.A. No. 950 of 1984 The counsel further argued that the vendee had derived only perpetual lease hold rights from his vendor and, therefore, he could not have conveyed better right than what he himself possessed. The learned counsel submitted that the acquisition of perpetual lease hold rights by the vendor, would entitle him to pass on the same to his vendee and that being so, the suit for possession by pre-emption was not maintainable. Reliance was also placed on judgments reported in JT 1994(5) SC 429 and 2003(4) SCC 635. The counsel also urged that since no Court had adjudicated that occupancy rights had been converted into full ownership rights, the plaintiff could not derive any benefit in that regard. Concluding his submission, the counsel emphasized that for a plaintiff to succeed in a suit for pre-emption, the superior right of pre- emption has to exist at three stages, i.e. at the time of sale, at the time of filing of the suit and at the time of decree by the court of the first instance. He drew support for this submission from the Apex Court’s judgments reported in JT 2001(6) SC 94; A.I.R. 1985 SC 111. The counsel thus argued that substantial question of law accordingly arises in this appeal. Mr. Jain vehemently controverting the submission of the learned counsel appearing for the appellants, submitted that vide Exhibit D-3, Maya Devi had transferred perpetual lease hold rights on 8.3.1965 in favour of Taro Devi and she in turn transferred these rights to Surjit Singh vide Exhibit D-1 on 28.4.1965. Surjit Singh, vide Exhibit P-3 (Exhibit D-4), transferred the same to Jodh Singh on 12.5.1980. According to Mr. Jain, even if Maya Devi may not be a full-fledged Pa ge R.S.A. No. 950 of 1984 owner, but when Surjit Singh got perpetual lease hold rights, they fructified into ownership rights by virtue of Section 3 of the Punjab Occupancy Tenancy (Vesting of Proprietary Rights) Act, 1952 (in short “the 1952 Act”) on the appointed day qua Surjit Singh. He cited judgments reported in 1986 PLJ 407 and 2002(1) PLR 258. Further, in view of the changed circumstances, the judgment Exhibit D-5 would not operate as res judicata. According to the learned counsel, no substantial question of law arises in this appeal. I have heard learned counsel for the parties and have gone through the record with their assistance. The 1952 Act was enacted with the object to confer full ownership rights on the occupancy tenants. According to Section 3 of the Act, an occupancy tenant would become owner free from all encumbrances on and from the appointed day. A Division Bench of this Court in 1981 PLJ 447 had held that a perpetual tenant partakes the character of an occupancy tenancy. The provisions of 19521 Act came up for consideration before this Court in 2002(1) PLR 258, wherein a Single Bench of this Court relying upon the observations of a Division Bench in 1971 PLJ 619 held that after the coming into force of the 1952 Act, the occupancy tenancy rights were automatically converted into statutory ownership. It was held by the learned Single Judge, as under:- “In Amin Lal’s case (supra), the Division Bench of this Court has held that after the coming into force of the Punjab Occupancy Tenants (Vesting of Proprietary Rights) Act, the occupancy rights had ceased to exist and all of them were automatically converted into statutory ownership. As a Pa ge R.S.A. No. 950 of 1984 matter of fact, after the appointed day as given in the said Act, no occupancy rights whether at present or in future could continue giving rise to any occasion for independently establishing a claim to those rights except that proof of such rights may sometime be necessary to prove ownership. The learned Counsel for the respondents have placed reliance on the Single Bench judgments. I am bound by the law laid down by the Division Bench to the effect that the occupancy right stood extinguished on the 15th of April 1953, when the Punjab Occupancy Tenants (Vesting of Proprietary Rights) Act, 1952 came into force and every tenant claiming occupancy rights automatically became owner of the land by operation of law. Therefore, the judgments/orders Annexures P-1, P-3 and P-4 (in CWP No. 3038 of 1980) are without jurisdiction.” Once it is concluded that Surjit Singh, vendee of the defendants had automatically become owner of the property in dispute, the occupancy rights in Surjit Singh transformed into full ownership rights on the appointed day, i.e. on the coming into force of the Act and by virtue of provisions of the 1952 Act, he was fully competent to transfer the same to the defendants. Still further, the plain reading of document, Exhibit D-4 clearly shows and there remains no ambiguity that it is a transaction relating to sale of immovable land and not with regard to any lease rights. There is no reference to any legal rights in the said document. There are no two opinions with the legal proposition that in the given circumstances, the court cannot go beyond the document to ascertain its true and real nature. In the facts and circumstances of the present case, it cannot be discerned from the reading of Exhibit D-4 that the transaction of sale of immovable property in fact, related to Pa ge R.S.A. No. 950 of 1984 transfer of lease rights. Once it is so held, the necessary corollary would be that it was not the perpetual lease hold rights which were transferred by Surjit Singh to the defendant-appellant, and, therefore, the same was pre-emptible. The submission of the learned counsel regarding earlier litigation operating as res judicata shall not detain this Court any longer, inasmuch as in the earlier litigation, it was only the perpetual lease hold rights which were transferred and which are not pre- emptible, whereas in the present case, the full ownership rights were transferred which are pre-emptible under the provisions of the Punjab Pre-emption Act, 1913, as applicable to Haryana State. In the facts and circumstances of the case, the rights of pre- emption in the plaintiff-respondent existed at the time of sale as well as on the day of filing of the suit and it subsisted till the time the decree was passed by the trial court. The submission of the learned counsel for the appellants has thus no merit and is rejected. Reliance placed by the learned counsel on various enunciations noticed above does not advance the cause of the appellants. In view of the above, I do not find any merit in the appeal and the same is accordingly dismissed with no order as to costs (AJAY KUMAR MITTAL) May , 2008 JUDGE *MALIK* Pa ge R.S.A. No. 950 of 1984 Pa ge