Case: Bishan Singh &amp; Others Vs. Khazan Singh &amp; Another

2. The material facts are not in dispute and may be briefly stated: The dispute relates to a land measuring 179 kanals and 2 marlas, situate in village Wanderjatana. On August 26, 1949, defendants 3 to 7 sold the said land to defendants 1 and 2 for a consideration of Rs.On August 26, 1950, defendants 8 to 11 instituted a suit, Suit No. 231 of 1950 (Exhibit P. 26/1) in the Court of the Subordinate Judge, II Class, Faridkot, to pre-empt the said sale on the ground, among others, that they had a right of pre-emption. On January 6, 1951, the vendees i.e., defendants 1 and 2, and the plaintiffs therein i.e., defendants 8 to 11 (appellants in the present appeal), entered into a compromise. Under the terms of the compromise, the vendees admitted that they had received Rs. 1,700 from defendants 8 to 11 and that defendants 8 to 11 agreed to pay the balance of the consideration, amounting to Rs. 35,911 on the 27th April 1951. It was further agreed that on the payment of the said amount, they should get possession through Court. As the amount agreed to be paid was in excess of the pecuniary jurisdiction of the Court of the Subordinate Judge, they filed the compromise deed in the Court of the District Judge and on the basis of the said compromise, the District Judge made a decree dated January 23, 1951. It was provided in the decree that in case defendants 8 to 11 failed to pay the balance to the vendees on April 27, 1951, the suit should stand dismissed and that if the said balance was paid on that date, the vendees should deliver possession of the land in dispute to them. Defendants 8 to 11 deposited the balance of Rs. 35,911 on April 23, 1951 and got possession of the land on May 17, 1951.3. Before the said defendants (8 to 11) deposited the amount in Court under the terms of the compromise decree, the respondents herein, claiming to be owners of land in the same patti, filed suit No. 13 of 1951 in the Court of the Subordinate Judge, II Class, Faridkot, to enforce their right of pre-emption. To that suit the original vendors were impleaded as defendants 3 to 7, the vendees as defendants 1 and 2 and the plaintiffs in Suit No. 231 of 1950 as defendants 8Defendants 8 to 11 contested the suit, inter alia, on the grounds that the plaintiffs had no right of pre-emption superior of that of theirs, that the suit was barred by limitation and that the whole of the sale consideration had been fixed in good faith and paid.4. The learned Subordinate Judge found all the issues in favour of defendants 8 to 11 and dismissed the suit. On the main issue he found that the said defendants, by obtaining a decree for pre-emption before the rival claimants had filed their suit, had become vendees through Court and so the plaintiffs could not succeed unless they had a superior right.5. The plaintiffs preferred an appeal to the Additional Dist. Judge, Faridkot, against the said decree. The District Judge held that the plaintiffs and defendants 8 to 11 had equal rights of pre-emption and were entitled to share the sale in the proportion of 3/7 and 4/7 respectively on payment of the proportionate amount of the consideration. On the main question, he took the view that defendants 8 to 11 did not exercise their right of pre-emption when the present suit was instituted for the reason that by the date of the filing of the suit they had not deposited the purchase money in Court. Both the parties filed Second Appeals against the decision of the District Judge in the High Court of Patiala questioning that part of the decree which went against them. The High Court upheld that part of the decree of the learned District Judge holding that the plaintiffs were entitled to a share in the suit property but remanded the suit to the District Judge to give his findings on the following two questions: (1) What was the amount paid by defendants 8 to 11 to the original vendees and whether they paid it in good faith; (2) Whether the case would come under S. 17C Cl. (e) of the Punjab Pre-emption Act (hereinafter to be referred to as the Act). As the High Court refused to certify that the case was a fit one for appeal to the Supreme Court , defendants 8 to 11 preferred to above appeal by obtaining special leave of this Court.

Reasoning:
18. In view of the aforesaid four Full Bench decisions - three of the Lahore High Court and the fourth of the East Punjab High Court - a further consideration of the case is unnecessary. The settled law in the Punjab may be summarizedThe doctrine of lis pendens applies only to a transfer pendente lite, but it cannot affect a pre-existing right. If the sale is a transfer in recognition of a pre-existing and subsisting right, it would not be affected by the doctrine, as the said transfer did not create new right pendente life; but if the pre-existing right became unenforceable by reason of the fact of limitation or otherwise, the transfer, though ostensibly made in recognition of such a right, in fact created only a new right pendente lite.20. Even so, it is contended that the right of the appellants to enforce their right of pre-emption was barred by limitation at the time of the transfer in their favour and therefore the transfer would be hit by the doctrine of lis pendens. This argument ignores the admitted facts of the case. The material facts may be recapitulated: Defendants 3 to 7 sold the land in dispute to defendants 1 and 2 on August 26, 1949, and the sale deed was registered on February 15, 1950. The appellants instituted their suit to pre-empt the said sale on August 26, 1950, and obtained a compromise decree on January 23, 1951. They deposited the balance of the amount payable on April 23, 1951, and took possession of the land on May 17, 1951.It would be seen from the aforesaid facts that the appellants right of pre-emption was clearly subsisting at the time when the appellants deposited the amount and took possession of the land, for they not only filed the suit but obtained a decree therein and complied with the terms of the decree within the time prescribed thereunder. The coercive process was still in operation. If so, it follows that the appellants are not hit by the doctrine of lis pendens and they acquired an indefeasible right to the suit land, at any rate, when they took possession of the land pursuant to the terms of the decree, after depositing in Court the balance of the amount due to the vendors.21. We shall briefly touch upon another argument of the learned Counsel for the appellants, namely, that the compromise decree obtained by them, whereunder their right of pre-emption was recognized, clothed them with the title to the property so as to deprive the plaintiffs of the equal right of pre-emption.The right of pre-emption can be effectively exercised or enforced only when the pre-emptor has been substituted by the vendee in the original bargain of sale. A conditional decree, such as that with which we are concerned, whereunder a pre-emptor gets possession only if he pays a specified amount within a prescribed time and which also provides for the dismissal of the suit in case the condition is not complied with, cannot obviously bring about the substitution of the decree-holder in place of the vendee before the condition is complied with. Such a substitution takes effect only when the decree-holder complies with the condition and takes possession of the land.22. The decision of the Judicial Committee in Deonandan Prashad Singh v. Ramdhari Chowdhri, 44 Ind App 80: (AIR 1916 PC 179) (J), throws considerable light on the question whether in similar circumstances the pre-emptor can be deemed to have been substituted in the place of the original vendee. There the Subordinate Judge made a pre-emption decree under which the pre-emptors were in possession from 1900 to 1904, when the decree was reversed by the High Court and the original purchaser regained possession and in 1908, the Privy Council, upon further appeal, declared the pre-emptors right to purchase, but at a higher price than decreed by the Sub-ordinate Judge. In 1909 the pre-emptors paid the additional price and thereupon again obtained possession. The question arose whether the pre-emptors were not entitled to mesne profits for the period between 1904 to 1909, i.e., during the period the judgment of the first appellate Court was in force. The Privy Council held that during that period the pre-emptors were not entitled to mesne profits.This judgment is, therefore, a clear authority for the position that the pre-emptor is not substituted in the place of the original vendee till conditions laid down in the decree are fulfilled. We cannot, therefore, agree with the learned Counsel that the compromise decree itself perfected his clients right in derogation to that of the plaintiffs.But as we have held that the appellants complied with the conditions laid down in the compromise decree, they were substituted in the place of the vendee before the present suit was disposed of. In the aforesaid view, the other questions raised by the appellants do not arise for consideration.