REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1090 OF 2010

BARASAT EYE HOSPITAL & ORS.       … Appellant(s)

VERSUS

KAUSTABH MONDAL         …Respondent

J U D G M E N T

SANJAY KISHAN KAUL, J.

1. The right of pre-emption holds its origination to the advent of the

Mohammedan  rule,  based  on  customs  which  came  to  be  accepted  in

various courts largely located in the north of India.  This law is stated to

be largely absent in the south of India on account of the fact that it never

formed a part of Hindu law in respect of property.  However, this law

came to be incorporated in various statutes, both, prior to the Constitution

of India (for short ‘the Constitution’) coming into force, and even post

1

that.1  The constitutional validity of such laws of pre-emption came to be

debated  before  the  Constitution  Bench  of  this  Court,  in  Bhau Ram2.

There are different views expressed by the members of the Constitution

Bench of five Judges, and also dependent on the various State legislations

in this regard.  Even though there were views expressed that this right of

pre-emption  is  opposed  to  the  principles  of  justice,  equity  and  good

conscience, it was felt that the reasonableness of these statutes has to be

appreciated  in  the  context  of  a  society  where  there  were  certain

privileged classes holding land and, thus, there may have been utility in

allowing persons to prevent a stranger from acquiring property in an area

which has been populated by a particular fraternity or class of people.

This aspect was sought to be balanced with the constitutional scheme,

prohibiting  discrimination  against  citizens  on  the  grounds  of  only

religion, race, caste, sex, place of birth or any of them, under Article 15

of the Constitution, and the guarantees given to every citizen to acquire,

hold  and  dispose  of  property,  subject  only  to  the  test  of  reasonable

restriction and the interest of general public.

2. With the passage of time, such laws of pre-emption, which existed

1 Bhau Ram v. Baij Nath Singh & Ors. AIR 1962 SC 1476 2 supra

2

in many States were abrogated, and it is only within a limited jurisdiction

that it now prevails.  One such enactment still in existence is the West

Bengal  Land  Reforms  Act,  1955  (hereinafter  referred  to  as  the  ‘said

Act’), an enactment with which we are concerned, and it is this very right

of  pre-emption,  and  the  manner  of  its  application  under  the  said  act,

which was debated before us.  The Preamble of the said Act sets forth the

tone as under:

“An Act to reform the law relating to land tenure consequent on the vesting of all estates and of certain rights therein [and also to consolidate the law relating to land reforms] in the State”

3. The category of land holders are defined under Section 2 of the

said Act, and the relevant two provisions are extracted hereinunder:

“2. Definitions.—In this Act, unless there is anything repugnant in the subject or context,— …. …. …. …. …. ….

(2) "bargadar" means a person who under the system generally known as  adhi,  barga or  bhag cultivates the land of  another person on condition of delivering a share of the produce of such land  to  that  person;  [and  includes  a  person  who  under  the system generally known as kisani [or by any other description] cultivates the land of another person on condition of receiving a share of the produce of such land from that person;]

[, but does not include a person who is related to the owner of the land as—

3

[Explanation.—A  bargadar shall  continue  to  be  a  bargadar until cultivation by him is lawfully terminated under this Act;]”

…. …. …. …. …. ….

“[(10) “raiyat” means a person or an institution holding land for any purpose whatsoever;]”

4. The  two relevant  Sections  for  enforcement  of  the  right  of  pre-

emption are Sections 8 & 9 of the said Act, and we proceed to extract

only the relevant part of the same:

“8. Right of purchase by co-sharer or contiguous tenant.— (1)  If  a  portion  or  share  of  a  [plot  of  land  of  a  raiyat]  is transferred to any person other than a [co-sharer of a raiyat in the plot of land],[the bargadar in the plot of land] may, within three months of the date of such transfer, or] any [co-sharer of a raiyat in  the  plot  of  land]  may,  within  three  months  of  the service of the notice given under sub-section (5) of section 5, or any  raiyat possessing land [adjoining such plot of land] may, within four months of the date of such transfer,  apply to the [Munsif having territorial jurisdiction,] for transfer of the said portion or [share of the plot of land] to him, subject to the limit mentioned  in  [section  14M,]on  deposit  of  the  consideration money  together  with  a  further  sum  of  ten  per  cent  of  that amount: xxxx xxxx xxxx xxxx xxxx”

“9. Revenue Officer to allow the application and apportion lands in certain cases.—(1) On the deposit mentioned in sub- section  (1)  of  section  8  being  made,  the  Munsif  shall  give notice of the application to the transferee, and shall also cause a notice to be affixed on the land for the information of persons interested. On such notice being served, the transferee or any

4

person interested may appear within the time specified in the notice and prove the consideration money paid for the transfer and other sums, if any, properly paid by him in respect of the lands  including  any  sum  paid  for  annulling  encumbrances created prior to the day of transfer, and rent or revenue, cesses or taxes for any period. The Munsif may after such enquiry as he  considers  necessary  direct  the  applicant  to  deposit  such further sum, if  any,  within the time specified by him and on such  sum  being  deposited,  he  shall  make  an  order  that  the amount  of  the consideration money together  with such other sums as are proved to have been paid by the transferee or the person interested plus ten per cent of the consideration money be paid  to  the  transferee  or  the  person  interested  out  of  the money in deposit, the remainder, if any, being refunded to the applicant. The Munsif shall then make a further order that the portion  or  [share  of  the  plot  of  land]  be  transferred  to  the applicant and on such order being made, the portion or [share of the plot of land] shall vest in the applicant.”

Facts:

5. Now turning to the limited contours of the facts of the present case.

The appellants before us purchased the suit land from the raiyat holder of

land, being R.S. Plot No. 488, measuring 15 decimals, located in Mouza

Kalikapur,  Barasat,  West  Bengal,  in  pursuance  of  the  registered  Sale

Deed dated 27.5.2005.  The stated consideration under the Sale Deed is

Rs.5,21,000/-.   The  respondent  before  us  is  a  raiyat holder  of  land

contiguous to the suit  land, sharing a common boundary line with the

same.  The respondent, thus, sought to exercise his right of pre-emption

5

under Section 8 of the said Act by filing Misc. Case No.19/2005 before

the  Civil Judge (Junior Division), 3rd Court, Baruipur, on the ground of

vicinage.  The relevant aspect is that the respondent sought to dispute the

apparent consideration set out in the Sale Deed  vide this application by

alleging that only a sum of Rs. 2,50,000/- had been paid as consideration

for sale, and that an inflated sum had been set out in the Sale Deed as a

result  of  collusion  and  conspiracy  between  the  transferor  and  the

transferee, being the appellants herein.  On the basis of this assertion, the

application  was  accompanied  with  only  a  deposit  of  Rs.  2,75,000/-,

consisting of Rs.2,50,000/- as the principal consideration and Rs.25,000/-

as the further levy of 10% on the principal consideration, in accordance

with Section 8 of the said Act.  The respondent sought leave to deposit

any further sum, as may be determined by the court, at the time of trial.

6. The appellants objected to such an application and filed objections

inter alia disputing the allegation of inflated consideration.  In addition,

the appellants filed an application in that case, under Section 9 of the said

Act, explaining the manner in which the sum of Rs. 5,21,000/- had, in

fact, been paid by the appellants.  This application was objected to by the

respondent, by asserting that the balance amount could only be paid once

6

the appellants proved the consideration that had been paid under the Sale

Deed  and  in  case  the  court  found  so,  directions  could  be  issued  for

payment of further sum, if any, at that time, when the application under

Section 8 of the said Act would be allowed.  One of the grounds for

claiming so was that if the payment was made at a stage of filing the

application under Section 8 of the said Act, then in the eventuality that

the right of pre-emption was not enforced for any reason, there was no

provision contained in Section 9 of the said Act for refund of the amount

deposited.

7. The trial court found in favour of the respondent by opining that

firstly, the actual consideration amount had to be proved by the transferee

and secondly, on such inquiry being made, the balance could be deposited

on a direction by the court.  The court further opined that the sum was

non-refundable  since  no  specific  provision  was  made  regarding

repayment of the excess consideration, if any.

8. The appellants took up the matter in Misc. Appeal No.286/2007,

before the 11th Additional District Judge, Alipore, and succeeded in that

7

appeal  in  terms of  the order  dated 31.1.2008.   The conclusion of  the

appellate court was predicated on a reasoning that it was really not the

jurisdiction of the court to decide the value of the suit property, and that

Section 8(1) of the said Act clearly sets out that the person enforcing the

right of pre-emption is required to deposit the full amount as “shown in

the sale deed” between the transferor and the  “stranger purchaser”.

9. It  was  now  the  turn  of  the  respondent  to  assail  this  order  by

preferring a petition, being CO No.1289/2008, under Article 227 of the

Constitution,  before  the  High  Court  of  Calcutta,  under  its  civil

revisionary  jurisdiction.   It  may  be  added  herein  that  after  the  first

appellate court passed the order, the trial court passed another order dated

7.4.2008, directing the respondent to deposit the balance amount in terms

of the order of the appellate Court, and this order was also challenged in

another petition, being CO No.1291/2008.  The High Court allowed both

these  applications  vide order  dated  24.7.2008.   In  construing  the

jurisdiction of the court in cases of pre-emption, as set out in Sections 8

& 9 of the said Act, the High Court opined that a pre-emptor was entitled

to raise an issue about the stated sale consideration, and on such inquiry

8

being complete, the Munsif could always direct deposit of the balance

amount.  A refund to the transferee would, thus, only arise if it was found

that the pre-emptor was liable to pay an amount less than what had been

deposited.   In coming to this  conclusion,  the decision of  the Division

Bench of the Calcutta High Court, in Sahid Ali v. S.K. Abdul Kasem3 was

relied upon.  The High Court also took strength from similar Sections

under the local Acts, i.e., Section 26F of the Bengal Tenancy Act, 1885

and Section 24 of the West Bengal Non-Agricultural Tenancy Act, 1949,

which provided for ‘penal’ consequences in cases of non-deposit of the

entire amount, i.e., rejection of the application for pre-emption.  In the

absence of such a ‘penal’ consequence under Sections 8 & 9 of the said

Act,  it  was  opined  that  the  application  for  pre-emption  without  full

deposit could not be rejected on that premise.  The effect of this, thus,

would be that an application could be entertained on ‘short deposit’ of the

consideration amount and only on final adjudication by the Munsif would

the occasion arise to deposit the balance amount.

Right of Pre-emption:

10. In order to appreciate the aforesaid provisions relating to the right

3 (1994) 1 CHN 202

9

of pre-emption, it  would be appropriate to refer to an extremely lucid

judgment of this Court by Justice K. Subbarao (as he then was), setting

forth the contours of the right of pre-emption in Bishan Singh & Ors. v.

Khazan Singh & Anr.,4  in a four Judge Bench judgement.  The Bench

proceeded to discuss the view of different Courts on this right of pre-

emption, as found in the following:

a. Plowden, J. in Dhani Nath v. Budhu5.

b. Mahmood, J. in Gobind Dayal v. Inayatullah6.

c. Mool Chand v. Ganga Jal7.

11. In view of the aforesaid elucidation, it  was opined that the pre-

emptor has two rights: first, the inherent or primary right, i.e., right for

the  offer  of  a  thing  about  to  be  sold;  and  second,  the  secondary  or

remedial  right  to  follow the  thing sold.   The  secondary  right  of  pre-

emption is simply a right of substitution, in place of an original vendee

and the pre-emptor is bound to show not only that his right is as good as

that of that vendee,  but that it  is superior to that of the vendee.  Such

superior right has to subsist at the time when the pre-emptor exercises his

4 AIR 1958 SC 838 5 136 P.R. 1894 6 (1885) ILR 7 All 775, 809 7 (1930) ILR 11 Lahore (F.B.) 258, 273

10

right.  The position is thereafter summarized in the following terms:

“11. …..(1) The right of pre-emption is not a right to the thing sold but a right to the offer of a thing about to be sold.  This right is called the primary or inherent right. (2) The pre-emptor has a secondary right or a remedial right to follow the thing sold. (3) It is a right of substitution but not of re-purchase i. e., the pre-emptor takes the entire bargain and steps into the shoes of the original vendee. (4) It is a right to acquire the whole of the  property  sold  and  not  a  share  of  the  property  sold.  (5) Preference  being  the  essence  of  the  right,  the  plaintiff  must have  a  superior  right  to  that  of  the  vendee  or  the  person substituted in his place. (6) The right being a very weak right, it can be defeated by all legitimate methods, such as the vendee allowing  the  claimant  of  a  superior  or  equal  right  being substituted in his place.”

12. We would like to emphasise an important aspect which emerges

from the aforesaid that, apart from the elucidation of the legal position in

this behalf, right is “a very weak right.”  That being the character of the

right,  any  provision  to  enforce  such  a  right  must,  thus,  be  strictly

construed.

13. An interesting aspect which supports the aforesaid view, albeit, in

the context of the period of limitation with respect to the exercise of the

pre-emption right, has been elucidated by this Court in Gopal Sardar v.

Karuna Sardar8.   The discussion proceeds on the basis  of  the earlier

8 (2004) 4 SCC 252

11

judicial pronouncements and a conclusion was reached that Section 5 of

the Limitation Act, 1963 cannot be pressed into service in aid of a belated

application made under Section 8 of the said Act, seeking condonation of

delay.   The right  of  pre-emption under Section 8 of  the said Act was

observed to be a statutory right, besides being a weak one, and thus, had

to be exercised strictly in terms of the said Section with no place for

consideration of equity.

14. In a comparatively recent decision, in  Kedar Mishra v. State of

Bihar9, a three Judge Bench had an occasion to deal with the Bihar Land

Reforms (Fixation of Ceiling Area and Acquisition of Surplus Land) Act,

1961.  We may notice that the right of pre-emption contained in Section

16(3) has since been repealed.  The relevant provision reads as under:

“16 – Restriction on future acquisition by transfer etc. …. …. …. …. …. …. (3)  (i)  When  any  transfer  of  land  is  made  after  the commencement of this Act to any person other than a co-sharer or a raiyat of adjoining land, any co-sharer of the transferor or any raiyat holding land adjoining the land transferred, shall be entitled, within three months of the date of registration of the document  of  the  transfer,  to  make  an  application  before  the Collector in the prescribed manner for the transfer of the land to him on the terms and conditions contained in the said deed:

9 (2016) 7 SCC 478

12

Provided that no such application shall  be entertained by the Collector unless the purchase money together with a sum equal to  ten  percent  thereof  is  deposited  in  the  prescribed manner within the said period.”

The  object  of  the  aforesaid  sub-section  was  observed  to  be  to

secure consolidation, by giving a right of re-conveyance to a co-sharer or

raiyat to  an  adjoining  area,  to  facilitate  the  use  of  land  in  a  more

advantageous manner and to prevent fragmentation.  It was categorically

observed that “…In terms of Section 16(3)(i), no pre-emption application

shall be entertained by the Collector unless the purchase money together

with a sum equal to 10% thereof is deposited by the person claiming right

of pre-emption in the prescribed manner within the said period.”10

15. We are conscious of the fact that the proviso begins with a negative

connotation  of  “no such application shall  be  entertained”,  but  yet  the

observations are relevant and germane.

Rival Contentions:

16. Learned counsel for the appellants sought to rely on the elucidation

10 Kedar Mishra v. State of Bihar (supra)

13

of the right of pre-emption, as set out in the Bishan Singh & Ors.11 case,

to  contend  that  the  right  being  defined  as  a  “very  weak  right”,  the

provisions of the Section should be read as they are. Section 8(1) of the

said Act prescribes that the right has to be exercised “on deposit of the

consideration money together with further sum of 10% of that amount:

…”   Thus,  the  trigger  for  the  very  right  has  to  be  the  full  stated

consideration plus (+) 10% of the consideration amount.  The question of

recourse  to  Section  9,  it  was  thus  contended,  would not  arise  till  the

amount was so deposited, and within the given time.  Secondly, it was

contended that Section 9 of the said Act, as it reads, could not be said to

contemplate an inquiry into the amount of consideration set out in the

sale deed, but the inquiry was confined to any further amounts, if any,

claimed  by the  vendee.   In  substance,  the  plea  was that  the  Sections

should be given their plain meaning.

17. On the other hand, learned counsel for the respondent contended

that if unrealistic or arbitrary considerations are shown in the sale deed,

they cannot bind the pre-emptor as that would amount to perpetuating a

fraud.   His  contention  was  that  on  deposit  of  what  the  pre-emptor

11 supra

14

believes to be the appropriate consideration, an application could be filed

under Section 8(1) of the said Act, and thereafter an inquiry in that behalf

would proceed under Section 9 of the said Act; otherwise, there would be

no meaning to the power conferred on the Munsif to make an inquiry, as

he  considers  necessary,  and  that  portion  would  be  otiose.   This  is  as

against the plea of the appellants, that to construe so, would amount to

making the latter part of Section 8(1) otiose as discussed aforesaid, and

also make nugatory, the first sentence of Section 9(1), which begins with

“on the deposit mentioned in sub-section (1) of Section 8”

18. Learned  counsel  for  the  respondent  sought  to  refer  to  the

judgments of the Calcutta High Court, in the  Sahid Ali case12,  Jyotish

Chandra Sardar  v.  Hira  Lal  Sardar13, as  also  to  two other  cases,  in

Amitava Shit v. Bablu Kundu14 and Smt. Aparna Maity v. Smt. Purabi

Das15.

19. If one may say so, the latter two are really in the nature of orders,

not elucidating any law, other than relying on the principles set out in the

12 (supra) 13 ILR 1971 (1) Calcutta 213  14 2014(1) CHN (Cal) 744 15 C.O. No.3859/2015 AGM 2016 decided on 19th December, 2016

15

Sahid Ali16 case  (a  Division  Bench view,  as  against  the  Single  Judge

Bench view in the latter two cases).  The  Sahid Ali17 case, in turn, has

relied upon the judgment in the Jyotish Chandra Sardar18 case.

20. The common thread which goes through all these judgments is that

an inquiry into the stated consideration was envisaged under Section 9 of

the said Act, on a conjoint reading of Sections 8 & 9 of the said Act.  It

may be noticed that the Jyotish Chandra Sardar19 case sets out a factual

matrix where the mechanism for deposit of the amount was not enforced

and, thus, despite the endeavour of the pre-emptor to deposit the amount,

such amount  could not  be deposited.   An important  aspect  examined,

while distinguishing the views taken in respect of the Bengal Tenancy

Act, 1885 and of the West Bengal Non-Agricultural Tenancy Act, 1949,

was that those enactments provided for “penal consequences” and, thus,

construction of those provisions would have to be different, as compared

to the said Act.

Discussion:

16 supra 17 supra 18 supra 19 supra

16

21. We  have  examined  the  rival  contentions  of  the  parties  and

considered  it  appropriate  to  set  forth  the  history  of  the  right  of  pre-

emption, as it may possibly have larger ramifications, especially when we

are informed that there are other cases pending consideration before the

Calcutta High Court.

22. The  historical  perspective  of  this  right  was  set  forth  by  the

Constitution Bench of this Court, as far back as in 1962, in the  Bhau

Ram20 case.  The judgment in the Bishan Singh & Ors.21 case preceded

the same, where different views, expressed in respect of this law of pre-

emption,  have  been  set  out,  and  thereafter  the  position  has  been

summarized.  There is no purpose in repeating the same, but, suffice to

say that the remedial action in respect of the right of pre-emption is a

secondary right,  and that too in the context of the “right being a very

weak right.”  It is in this context that it was observed that such a right can

be defeated by all  legitimate methods,  such as a  vendee allowing the

claimant of a superior or equal right to be substituted in its place.  This is

not a right where equitable considerations would gain ground.  In fact,

the effect of the right to pre-emption is that a private contract inter se the

20 supra 21 supra

17

parties and that too, in respect of land, is sought to be interfered with, and

substituted by a purchaser who fortuitously has land in the vicinity to the

land being sold.  It is not a case of a co-sharer, which would rest on a

different ground.

23. The  second  aspect  of  importance  is  that  given  the  aforesaid

position, even the time period for making the deposit, under Section 8(1)

of the said Act, has been held to be sacrosanct, in view of the judgment of

this Court in the Gopal Sardar22 case.  The very provision of Section 8(1)

of the said Act came up for consideration and, as held in that case, if the

time period itself cannot be extended and if Section 5 of the Limitation

Act would not apply, while interpreting Section 8 of the said Act, then the

requirement of deposit of the amount along with the application, within

the time stipulated is sacrosanct.  The amount to be deposited is not any

amount, as that would give a wide discretion to the pre-emptor, and any

pre-emptor not able to pay the full amount, would always be able to say

that, in his belief, the consideration was much lesser than what had been

set out.  If we read the judgment in the Gopal Sardar23 case, in its true

22 supra 23 supra

18

enunciation and spirit, there is sanctity attached to both, the amount and

the time frame.  There cannot be sanctity to the time frame, incapable of

extension even by the Limitation Act, and yet, there be no sanctity to the

amount.

24. In the context of the Bihar Land Reforms (Fixation of Ceiling Area

and  Acquisition  of  Surplus  Land)  Act,  1961,  the  recent  view of  this

Court, in the context of the relevant provision (now repealed24), itself puts

a pre-condition for the exercise of the right of pre-emption, by requiring

the deposit of the full stated purchase money and 10% of the purchase

amount.  In our view, it makes no difference that the proviso in Section

16(3)  of  that  Act  states  that  “…no  such  application  shall  be

entertained…”,  in  the  context  of  filing  of  applications,  without  the

deposit of the full amount.  We may say so because, if we turn to Section

8(1) of the said Act, the right of pre-emption is activated “on deposit of

the consideration money together with the further sum of 10% of that

amount.”  Thus, unless such a deposit is made, the right of a pre-emptor

is not even triggered off.  The provisions of Section 8 are explicit and

24  Vide Section 2 of The Bihar Land Reforms (Fixation of Ceiling Area and  Acquisition of Surplus Land) (Amendment) Act, 2019

19

clear in their terms.

25. Now turning to Section 9 of the said Act, from which, apparently,

some  judgments  of  the  Calcutta  High  Court  have  sought  to  derive  a

conclusion  that  an  inquiry  into  the  stated  consideration  is  envisaged.

However, the commencement of sub-section (1) of Section 9 is with “on

the  deposit  mentioned in  sub-section  (1)  of  section  8  being  made…”

Thus, for anything further to happen under Section 9 of the said Act, the

deposit as envisaged under Section 8 of the said Act has to be made.  It is

only then that the remaining portion of Section 9 of the said Act would

come into play.

26. The question now is as  to what would be the nature of  inquiry

which has been envisaged to be carried out by the Munsif.  If Section 9,

as it reads, is perused, then first,  the amount as mentioned in the sale

transaction is to be deposited, as per sub-section (1) of Section 8 of the

said Act.  Once that amount is deposited, the next stage is for the Munsif

to  give  notice  of  the  application  to  the  transferee.   The  transferee

thereafter, when enters appearance within the time specified, can prove

20

the consideration money paid for the transfer “and other sums.”  Such

other sums, if any, are as “properly paid by him in respect of the land

including any sum paid for annulling encumbrances created prior to the

day of transfer and rent or revenue, cesses or taxes for any period.”  The

inquiry, thus envisaged, is in respect of the amount sought to be claimed

over  and above  the  stated  sale  consideration  in  the  document  of  sale

because,  in that  eventuality further  sums would have to be called for,

from the pre-emptor.  In that context, the additional amount would have

to  be  deposited.  Even  in  the  event  that  a  pre-emptor  raises  doubts

regarding the consideration amount, enquiry into the said aspect can be

done only upon payment of the full amount, along with the application.

In this aspect, the phrase “the remainder, if any, being refunded to the

applicant”  would include to mean the repayment of  the initial  deposit

made along with the application, if considered to be excess.  To give any

other connotation to these Sections would make both, the latter part of

Section 8 of the said Act and the inception part of Section 9 of the said

Act, otiose.  We do not think such an interpretation can be countenanced.

27. In  our  view,  when  the  inquiry  is  being  made  by  the  Munsif,

whether  in  respect  of  the  stated  consideration,  or  in  respect  of  any

21

additional amounts which may be payable, the pre-requisite of deposit of

the amount of the stated consideration under Section 8(1) of the said Act

would be required to be fulfilled.  The phraseology “the remainder, if any,

being refunded to the applicant” would have to be understood in that

context.  The word “remainder” is in reference to any amount which, on

inquiry  about  the  stated  consideration,  may  be  found  to  have  been

deposited in excess, but it cannot be left at the own whim of the applicant

to deposit any amount, which is deemed proper, but the full amount has

to be deposited, and if found in excess on inquiry, be refunded to the

applicant.

28. We  are,  thus,  firmly  of  the  view that  the  pre-requisite  to  even

endeavour to exercise this weak right is the deposit of the amount of sale

consideration  and  the  10%  levy  on  that  consideration,  as  otherwise,

Section 8(1) of the said Act will not be triggered off, apart from making

even the beginning of Section 9(1) of the said Act otiose.

29. We are not inclined to construe the aforesaid provisions otherwise

only  on  the  ground  that  there  are  no  so  called  “penal  provisions”

22

included.  The provisions of Sections 8 & 9 of the said Act must be read

as they are.  In fact, it  is a settled rule of construction that legislative

provisions  should be read in  their  plain grammatical  connotation,  and

only  in  the  case  of  conflicts  between  different  provisions  would  an

endeavour have to be made to read them in a manner that they co-exist

and no part of the rule is made superfluous.25  The interpretation, as we

have adopted, would show that really speaking, no part of either Section

8, or Section 9 of the said Act is made otiose. Even if an inquiry takes

place in the aspect of stated consideration, on a plea of some fraud or

likewise,  and if  such a  finding is  reached,  the  amount  can always be

directed to be refunded, if deposited in excess.  However, it cannot be

said that a discretion can be left to the pre-emptor to deposit whatever

amount,  in  his  opinion,  is  the  appropriate  consideration,  in  order  to

exercise a right of pre-emption.  The full amount has to be deposited.

30. We may also note that, as a matter of fact, the pre-emptor in the

present case, i.e., the respondent has not filed any material to substantiate

even the plea on the basis of which, even if an inquiry was held, could a

25 British India General Insurance Co. Ltd. v. Captain Itbar Singh, AIR 1959 SC  1331

23

conclusion  be  reached  that  the  stated  consideration  is  not  the  market

value of the land.

31. We also believe that to give such a discretion to the pre-emptor,

without deposit of the full consideration, would give rise to speculative

litigation, where the pre-emptor, by depositing smaller amounts, can drag

on the issue of the vendee exercising rights in pursuance of the valid sale

deed executed.  In the present case, there is a sale deed executed and

registered, setting out the consideration.

32. We are of the view that the impugned order and the view adopted

would make a weak right into a  ‘speculative strong right’, something

which  has  neither  historically,  nor  in  judicial  interpretation  been

envisaged.

33. The last question which arises is whether the respondent can now

be granted time to deposit the balance amount.  When the direction was

so passed, in pursuance of the order of the appellate court, the respondent

still assailed the same.  The requirement of exercising the right within the

24

stipulated  time,  in  respect  of  the  very  provision  has  been  held  to  be

sacrosanct, i.e., that there can be no extension of time granted even by

recourse to Section 5 of the Limitation Act.26  

34. As we have discussed above, once the time period to exercise a

right is sacrosanct, then the deposit of the full amount within the time is

also sacrosanct.   The two go hand-in-hand.  It  is not a case where an

application has been filed within time and the amount is deficient, but the

balance amount has been deposited within the time meant for the exercise

of the right.  We are saying so as such an eventuality may arise, but in

that  case,  the  right  under  the  application  would  be  triggered  off  on

deposit of the amount which, in turn, would be within the time stipulated

for triggering the right.  That not having happened, we are of the view

that there cannot be any extension of time granted to the respondent now,

to exercise such a right.  This is, of course, apart from the fact that this

speculative exercise on behalf of the respondent has continued for the last

fourteen  years, by deposit of 50% of the amount.

35. We may add here  that  it  may not  be  appropriate  to  envisage  a

situation where a person not succeeding in the right of pre-emption is

26 Gopal Sardar v. Karuna Sardar (supra)

25

deprived of the amount deposited.  The vendee cannot appropriate this

amount.  The State should not be permitted to appropriate this amount.

Then, the only sequitur  would be that  the amount should be refunded

back to the pre-emptor.

36. The aforesaid being the position, the respondent is entitled to the

refund of the amount deposited by him, together with interest,  if  any,

earned on the same, in case it has been kept in an interest bearing deposit.

37. The appeal is accordingly allowed in the aforesaid terms, leaving

the parties to bear their own costs.

38. We hope that our view should put the controversy in respect of this

“weak right” of pre-emption to rest.

...……………………………J. [Sanjay Kishan Kaul]

...……………………………J. [K.M. Joseph]

New Delhi. October 17, 2019.

26