Case Note & Summary
The dispute arose from a sale of a house by Ram Chander and others to Kanhaiyalal on 5 December 1960, with the sale deed registered on 10 December 1960 for a consideration of Rs 8,000. Nearly one year later, on 5 December 1961, Krishna Dass Agarwal instituted a suit to enforce a right of pre-emption on three grounds: an alleged agreement by Nath Mal, father of one of the vendors, granting first purchase right; the Gwalior Pre-emption Act, which conferred pre-emption on a dominant heritage holder; and an alleged customary right of pre-emption. The defendant disputed the claim, contending that the Gwalior Pre-emption Act was unconstitutional and unenforceable from the commencement of the Constitution of India. The trial court decreed the suit on 31 July 1967. The purchaser appealed. During pendency of the appeal, the Madhya Pradesh Agra-Kraya-Vidhi Nirsan Adhiniyam, 1968 repealed the Gwalior Pre-emption Act. The learned District Judge allowed the appeal on grounds that the repeal extinguished the statutory right of pre-emption; the alleged custom had ended with the enactment of the Gwalior Pre-emption Act and did not revive; and the agreement offended the rule of perpetuity and was not binding on a bona fide purchaser without notice. The District Judge did not record a finding on whether the plaintiff was a dominant heritage holder. The plaintiff's second appeal to the Madhya Pradesh High Court was dismissed. The High Court held that Section 23 of the Gwalior Pre-emption Act required the right to subsist at the time of the final decree; because an appeal is a continuation of the suit, the operative decree was the appellate decree, and since the Act had been repealed during the appeal, the right was not subsisting. The High Court also held that Section 10 of the Madhya Pradesh General Clauses Act, 1957 did not save the inchoate right of pre-emption. In the Supreme Court, the appellant argued that the second part of Section 23 protected a decree already passed in his favour and that Nirmala Devi was distinguishable because there repeal occurred during pendency of the suit, not after a decree; and that Section 10 M.P. General Clauses Act saved the right. The respondent emphasised the first part of Section 23 and the weak, inchoate nature of pre-emption. The Supreme Court agreed with the High Court. Relying on Bishan Singh v. Khazan Singh, it observed that the right of pre-emption is weak and can be defeated by all legitimate methods; it is generally looked upon with distaste because it interferes with the owner's freedom to sell. The Court interpreted Section 23: the first part requires a subsisting right at the time of decree, and the second part only protects against loss of interest after a decree in favour of the plaintiff, not against repeal of the Act itself. The Court observed that the word 'decree' in the first part could be construed as trial court decree or final appellate decree, but because the right is weak and the High Court had taken a possible view on a local enactment repealed as far back as 1968, it declined to take a different view. It held that Section 10 of the M.P. General Clauses Act did not assist because the right of pre-emption is an inchoate remedial right, not a vested or accrued right, until a decree is passed. The appeal was dismissed with no order as to costs.
Headnote
A) Property Law - Pre-emption - Nature of Right - Gwalior Pre-emption Act - The right of pre-emption is a weak right and is generally looked upon by courts with distaste because it interferes with the owner's freedom to sell to a person of his choice; it can be defeated by all legitimate methods. Held that because the right is weak, courts are disinclined to take a different view from that taken by the High Court on a local enactment which has been repealed as far back as 1968. (Paras not numbered) B) Statutory Interpretation - Effect of Repeal on Pending Appeal - Section 23 Gwalior Pre-emption Act - Section 23 requires that no decree for pre-emption shall be passed unless the claimant has a subsisting right at the time of the decree; since an appeal is a continuation of the suit and the only effective decree is the appellate decree, the word 'decree' in Section 23 means the final operative decree. Held that where the Gwalior Pre-emption Act was repealed during the pendency of the first appeal, the right was not subsisting on the date of the appellate decree and could not be enforced. (Paras not numbered) C) General Clauses Act - Savings on Repeal - Section 10 Madhya Pradesh General Clauses Act, 1957 and Section 6 General Clauses Act, 1897 - A right of pre-emption is an inchoate remedial right, not a vested or accrued right, and thus is not saved by Section 10 of the M.P. General Clauses Act after repeal of the parent Act. Held that the plaintiff could not enforce a right of pre-emption after the repeal of the Pre-emption Act. (Paras not numbered)
Issue of Consideration
Whether the right of pre-emption under the Gwalior Pre-emption Act survived the repeal of the Act during the pendency of the first appeal, having regard to Section 23 of that Act and Section 10 of the Madhya Pradesh General Clauses Act, 1957
Final Decision
Appeal dismissed; no order as to costs. The High Court's interpretation of Section 23 of the Gwalior Pre-emption Act and the effect of its repeal was upheld; the right of pre-emption did not subsist after the repeal of the Act in 1968.
Law Points
- Right of pre-emption is a weak right and can be defeated by all legitimate methods
- appeal is a continuation of the suit and the decree appealed against loses finality
- Section 23 of the Gwalior Pre-emption Act requires a subsisting right of pre-emption at the time of the final decree
- repeal of the Gwalior Pre-emption Act during pendency of appeal extinguishes the inchoate right
- Section 10 of the Madhya Pradesh General Clauses Act
- 1957 does not save a remedial right of pre-emption
- right of pre-emption is inchoate and not a vested or accrued right until decree
