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REPORTABLE  

IN THE SUPREME COURT OF INDIA  

  CIVIL APPELLATE JURISDICTION  

CIVIL APPEAL NOS. 1524-1525 OF 2019  

(@ SLP(C)Nos.15576-15577 of 2015)  

TILAK RAJ BAKSHI       ... APPELLANT(S)  

VERSUS  

AVINASH CHAND SHARMA (DEAD)  

THROUGH LRS. & OTHERS           ... RESPONDENT(S)    

J U D G M E N T  

K.M. JOSEPH, J.  

1. These appeals arise out of special leave petitions and  

are directed against the impugned judgment of the High Court  

of Punjab & Haryana by which the second appeal filed by the  

second defendant in the suit has been allowed and the civil  

suit filed by the appellant herein has been dismissed.  

Parties will be referred to with reference to their position  

in the Trial Court.  

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2. The suit scheduled property located in Chandigarh was  

owned by one Kirpa Ram Bakshi.  He had executed a registered  

will on 04.09.1974 in favour of the plaintiff, the first  

defendant and another son who was the 3rd defendant in the  

suit.  Thereafter, the disputed house was transferred in  

favour of the aforesaid three persons by the Estate Officer.   

The plaintiff filed the present suit from which the appeal  

arises alleging that on 31.03.1982 there was an agreement  

entered into between the three brothers namely himself, the  

first defendant and the younger brother.  Clause (5) of the  

agreement provides as follows:   

“The individual portions of New Delhi  

and Chandigarh and agricultural land cannot  

be sold without concurrence of all three in  

writing and if it is sold on agreement of  

three, first preference to be given to both  

other brothers.  Any special renovation  

after expiry of joint upkeep is done by any  

one of us and full accounts are maintained,  

then in the event of total sale of any unit,  

the extra amount spent on special renovation  

(subject to reasonable  

depreciation/appreciation) by individual  

will be payable to the individual over and  

above 1/3rd share of the sale proceeds.”  

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3.  It was alleged that the said clause was violated by  

his brother, the first defendant and without getting his  

written concurrence for the same the first defendant sold  

the suit scheduled property to the second defendant.  It  

was alleged that this will result in fragmenting the site  

which is prohibited and it was also alleged that the sale  

was void.  The suit came to be filed for declaring the sale  

deed in favour of the second defendant void and for specific  

performance directing first defendant to execute sale deed  

in respect of one-third share to the plaintiff.   

4. The second defendant contested the matter.  It was  

inter alia contended that the family settlement was forged  

and fabricated. The plaintiff did not have any preferential  

right.  The second defendant was a bonafide purchaser.   

The plaintiff never intended to purchase the property.  The  

share of the first defendant was transferred to the second  

defendant by the Estate Officer of Chandigarh on his  

application.  

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5. The trial Court found that the family arrangement was  

indeed executed.  It is a genuine document and not forged  

or fabricated.  The suit filed on 03.02.1998 challenging  

the sale deed dated 12.11.1997 was filed within time.  The  

second defendant was found not to be a bonafide purchaser.   

He was aware of giving preference by the first defendant  

to the appellant.  It was further found that the plaintiff  

was never offered to purchase the share of the first  

defendant.  The trial court found that the plaintiff was  

entitled to specific relief and declared the sale null and  

void.  The plaintiff was entitled to specific performance  

as per the terms and conditions of the agreement dated  

31.03.1982 to purchase the share of the first defendant.   

6. The second defendant appealed against the judgment.   

The first Appellate Court found that the family arrangement  

was genuine.  It referred to the correspondence between the  

plaintiff and the wife of the first defendant.  He  

proceeded to find that the only controversy was whether the  

first defendant has offered to the plaintiff to purchase  

his one-third share or whether the plaintiff never came

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forward for the same.  The first Appellate Court found that  

no document was produced to show that the first defendant  

himself offered.  The court further goes on to find letters  

by the wife of the first defendant which reveals that offer  

was given to the plaintiff to purchase.  As per clause (5)  

of the family arrangement, the concurrence of the plaintiff  

was not taken in writing before selling to the second  

defendant.  As far as the offer is concerned the Appellate  

Court referred to the correspondence.  Defendant no.1 was  

not ready to accept earnest money.  The house was located  

at Chandigarh.  The sale could be effected only at  

Chandigarh.  Plaintiff visiting Bhilai, where first  

defendant lived, would not have been served any purpose.   

Reference is made to the telephone bills of the plaintiff  

to prove communication between him and the first defendant  

regarding sale.  The sale in favour of the second defendant  

was effected through power of attorney.  No offer was made  

for selling to the plaintiff by the first defendant through  

a power of attorney.  It is found that though P19 shows that  

a deal was struck but because the wife of the first defendant

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was pressing hard for the plaintiff to come to Bhilai, it  

did not work.  The plaintiff was found ready and willing.   

The first defendant has violated the family settlement.   

The second defendant was aware from the wife of the first  

defendant that she wanted to sell to the plaintiff.  The  

second defendant was a tenant who was aware of the family  

arrangement.  There was no notice issued to the other  

sharers.  The appeal of the second defendant was dismissed.   

That apart the Appellate Court also allowed the cross appeal  

filed by the plaintiff and directed the second defendant  

to hand over possession to the plaintiff.  

PROCEEDINGS BEFORE THE HIGH COURT  

7. The High Court after referring to the correspondence  

between the parties found that the first defendant has  

indeed offered to sell his share to the plaintiff.   

Plaintiff could have sent a draft.  The precarious  

condition of the first defendant, having regard to his  

health, was known to the plaintiff.  

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8. The High Court found that there was no valid and binding  

contract between the parties. No price has been fixed nor  

there is any penalty clause, i.e., in case of failure,  

either one of the parties can enforce the agreement  

(obviously clause (5) which we have already quoted). In view  

of the omissions of the appellant to act on the offer, he  

has lost the preemptory right to purchase the share and it  

led to the sale in favour of the second defendant. The High  

Court proceeds to hold that clause (5) relied upon by the  

plaintiff is not only vague but indefinite and void. The  

plaintiff cannot be permitted to exercise belatedly after  

he has lost to encash offer reflected in the letters which  

we will refer to hereinafter.  

9. It is also found that the second defendant being the  

tenant could only be evicted under the law relating to  

tenants.  

10. The High Court noted that the fragmentation may not be  

possible but solution was found in Sections 2, 3 and 4 of  

the Partition Act and by ascertaining market value they

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could buy each other’s share.  Section 22 of the Hindu  

Succession Act was found to have been declared  

unconstitutional by this Court.  Appellant had not  

accepted the offer.  Reference was made to Section 20 of  

the Specific Relief Act and it was found that in the  

circumstances, appellant was not entitled to the  

discretionary relief.   

11. We heard Shri Nidhesh Gupta, learned senior counsel  

appearing on behalf of the appellant and Shri Dhruv Mehta,  

learned senior counsel appearing on behalf of the first  

respondent (second defendant).   

12. Learned senior counsel for the appellant would contend  

that this is a clear case of family settlement.  The family  

settlement contained two distinct conditions. Not only  

preference must be given to the other sharers, the first  

defendant was obliged to obtain the written concurrence of  

the other sharers.  He would submit that courts lean in  

favour of family settlements and uphold the same.  In this  

case, there is no absolute prohibition against sale of his

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share.  It is only a partial prohibition.  The first  

defendant could sell his share to his brothers.  The object  

behind clause (5) was highlighted to be that third party  

is not rendered entitled to the family property.  Such a  

partial prohibition has been approved by both the Privy  

Council and also by this Court.  In this regard, he drew  

our attention to the judgments of this Court in the case  

of K. Naina Mohammed (Dead) Through Lrs. v. A.M. Vasudevan  

Chettiar (Dead) Through Lrs.and Others 1 , Hari Shankar  

Singhania and Others v. Gaur Hari Singhania and Others2  and  

also judgement of the Privy Council in the case of Muhammad  

Raza (since deceased) and others v. Abbas Bandi Bibi3. He  

also drew our attention to the judgment of this Court in  

Hari Shankar Singhania (supra) to contend that family  

settlement is treated differently from any other formal  

commercial settlement.  This is what the court held:   

“A family settlement is treated  

differently from any other formal commercial  

settlement as such settlement in the eye of  

                                                           1 2010 (7) SCC 603  2 2006 (4) SCC 658  3 AIR 1932 PC 158

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the law ensures peace and goodwill among the  

family members.  Such family settlements  

generally meet with approval of the courts.   

Such settlements are governed by a special  

equity principle where the terms are fair and  

bona fide, taking into account the well-being  

of a family.  

Technicalities of limitation, etc.  

should not be put at risk of the  

implementation of a settlement drawn by  

a family, which is essential for  

maintaining peace and harmony in a  

family. …”  

13. Next, he would contend that under Rule 16 of the  

Chandigarh Estate Rules, 2007, no fragmentation or  

amalgamation of any of the site is permissible. Therefore,  

in regard to the sale deed in favour of the second defendant  

the High Court overlooked that the aforesaid rule shall be  

observed in its breach.  Next he was at pains to demonstrate  

before us that the plaintiff was always willing and ready  

to take the share of the first defendant. The  

correspondence, however, revealed that the wife of the  

first defendant was insisting that the entire consideration  

must be paid at Bhilai where the first defendant resided,

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whereas the conveyance could be effected only at Chandigarh  

where the plaint schedule property is located. The  

plaintiff was ready to accommodate the reasonable demands  

of the first defendant but the property came to be conveyed  

to the second defendant.   

14. It was argued by Shri Nidhesh Gupta, learned senior  

counsel for the appellant that even if preference was given  

to the plaintiff, he must succeed on the ground that                  

clause (5) of the family settlement envisages written  

concurrence from the other sharers before a valid sale deed  

was made by the first defendant.  

15. Per contra, Shri Dhruv Mehta, learned senior counsel,  

appearing on behalf of the first respondent, supports the  

order of the High court.  He also took us to the  

correspondence and pointed out the plight of the first  

defendant whose health was in a precarious condition and  

he wanted money urgently.  An offer was made. The offer,  

he would point out, was not unreasonable namely Rs.5 lakhs  

but the plaintiff was not prepared to act on the offer

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leaving no option with the first defendant except to sell  

the share to the second defendant.  He would further point  

out that the second defendant was actually a bonafide  

purchaser of the property and the Trial Court and the first  

Appellate Court erroneously found that he was not a bona  

fide purchaser on the basis that he deposed that the wife  

of the first defendant told him about the offer made to the  

appellant. He would point out that this conversation did  

not establish that respondent was aware of the family  

arrangement and therefore, the second defendant was indeed  

a bonafide purchaser.  He would further complain that first  

Appellate Court has gone one step further than the Trial  

Court and even ordered that second defendant to put the  

plaintiff in possession even though undisputedly he was a  

tenant who was entitled to protection of the statute against  

eviction except in accordance with law.   

16.  The following points arise for our decision:  

A. Whether there was a family settlement?

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B. Whether the High Court was right in, without even a plea,  

holding that the family settlement is vague and  

unenforceable and void?  

C. Whether an offer was made by the first defendant to the  

plaintiff before the sale of the property to the second  

defendant?  

D. Whether the High Court was right in holding that the  

courts could not exercise discretion under Section 20 of  

the Specific Relief Act, 1963 as the contract is not  

specifically enforceable?  

E. What is the impact of absence of written concurrence by  

brothers for sale?  

F. What is the effect of the prohibition against  

fragmentation of property in question under the Capital  

of Punjab (Development and Regulation) Act, 1952?  

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FINDINGS  

WHETHER THERE WAS A FAMILY SETTLEMENT?  

17. As far as the first question is concerned, whether  

there was a family settlement, at paragraph 6 of the plaint,  

the family settlement was pleaded. The answer to the same,  

by the second defendant, is that the alleged family  

settlement dated 31.03.1982 is a forged and fabricated  

document. We can safely conclude that no material has been  

placed by the second defendant to establish that the alleged  

family settlement is a forged document. There is no case  

that it is not a family settlement. The settlement is  

arrived at between the plaintiff, his brother-the first  

defendant and another brother-third defendant. Therefore,  

we can proceed on the basis that there is a family  

settlement.  

WHETHER THE FAMILY SETTLEMENT WAS VAGUE?  

18. With regard to the finding by the High Court that  

whether the family settlement is vague, unenforceable and  

void, the complaint of the plaintiff is that there is no

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pleading that family settlement is vague and unenforceable.  

Section 29 of the Indian Contract Act, 1872 (hereinafter  

referred to as ‘the Contract Act’, for short), reads as  

follows:  

“29. Agreements void for  

uncertainty.—Agreements, the meaning of  

which is not certain, or capable of being made  

certain, are void. —Agreements, the meaning  

of which is not certain, or capable of being  

made certain, are void." Illustrations  

(a)  A agrees to sell B “a hundred tons of  

oil”. There is nothing whatever to show  

what kind of oil was intended. The  

agreement is void for uncertainty."  

(b) A agrees to sell B one hundred tons of  

oil of a specified description, known as  

an article of commerce. There is no  

uncertainty here to make the agreement  

void."  

(c) A, who is a dealer in coconut-oil only,  

agrees to sell to B “one hundred tons of  

oil”. The nature of A’s trade affords an  

indication of the meaning of the words,  

and A has entered into a contract for the  

sale of one hundred tons of  

coconut-oil."  

(d) A agrees to sell B “all the grain in my  

granary at Ramnagar”. There is no  

uncertainty here to make the agreement  

void."  

(e) A agrees to sell to B “one thousand  

maunds of rice at a price to be fixed by  

C”. As the price is capable of being made

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question in Keshavlal Lallubhai Patel v. Lalbhai Trikumlal  

Mills Ltd.4 and held as follows:  

“10. There is one more point which must be  

considered. It was strongly urged before us  

by the appellants that, in the trial court,  

no plea had been taken by the respondent that  

the agreement for the extension of time was  

vague and uncertain. No such plea appears to  

have been taken even in the grounds of appeal  

preferred by the respondent in the High Court  

at Bombay; but apparently the plea was  

allowed to be raised in the High Court and the  

appellants took no objection to it at that  

stage. It cannot be said that it was not open  

to the High Court to allow such a plea to be  

raised even for the first time in appeal.  

After all, the plea raised is a plea of law  

based solely upon the construction of the  

letter which is the basis of the case for the  

extension of time for the performance of the  

contract and so it was competent to the appeal  

court to allow such a plea to be raised under  

Order 41 Rule 2 of the Code of Civil  

Procedure. If, on a fair construction, the,  

condition mentioned in the document is held  

to be vague or uncertain, no evidence can be  

admitted to remove the said vagueness or  

uncertainty. The provisions of Section 93 of  

the Indian Evidence Act are clear on this  

point. It is the language of the document  

alone that will decide the question. It would  

not be open to the parties or to the court to  

attempt to remove the defect of vagueness or  

uncertainty by relying upon any extrinsic  

evidence. Such an attempt would really mean  

                                                           4 AIR 1958 SC 512

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the making of a new contract between the  

parties. That is why we do not think that the  

appellants can now effectively raise the  

point that the plea of vagueness should not  

have been entertained in the High Court.”  

(Emphasis supplied)    

21. Therefore, the mere fact that a plea is not taken, that  

the clause in question is vague, and hence, unenforceable  

and void will not stand in the way of the Appellate Court  

looking into the contract and, if on its terms, it finds  

it to be vague and unenforceable, it can be so held.  

22. The question is to whether clause (5) in question is  

vague and unenforceable. We noticed that it provides that  

the property in question cannot be sold without concurrence  

of the three brothers in writing. If it is sold on the  

agreement of three brothers, the first preference is to be  

given to both other brothers. When it is stated that the  

property cannot be sold without concurrence of the three  

brothers in writing, there cannot be any doubt about its  

meaning. It means what it says which is that should a brother  

want to sell the property, the other two brothers must agree  

in writing. This clause cannot be described as vague. This

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is different from the aspect as to whether it is a clog on  

ownership or whether it is otherwise unenforceable but it  

cannot be described as being vague. The second contention  

is that when a decision is taken by the brothers permitting  

sale by a third brother, then, first preference is to be  

given to both the other brothers. What is intended is that  

after the written concurrence is obtained for selling in  

order that property is not sold to a third party/stranger,  

the other two brothers are given an opportunity to buy that  

property. This portion of the clause cannot also be  

described as vague as such. No doubt, it could be argued  

that the price at which the offer is to be made is not  

expressly mentioned. We have found that the clause is part  

of a family settlement between brothers. Courts ordinarily  

lean in favour of family settlement. Clause (5) itself does  

not contain an agreement to sell. It only contemplates a  

preferential offer being treated as a condition precedent  

to a brother affecting a sale outside of a family to a  

stranger. The price can only be understood as market price  

which would be the fair price. Therefore, we are of the view

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that the finding by the High Court that contract is vague  

cannot be sustained.     

WHETHER OFFER WAS MADE BY DEFENDANT NO.1 TO PLAINTIFF  

23. We will first ascertain from the correspondence  

admittedly entered into between the plaintiff and the wife  

of the first defendant, what actually transpired. Ex. P16  

was written on 16.2.1996 by Shyama Mehta, wife of the first  

defendant, the same reads as under:   

“Dear Santosh and Tilak ji, Namaskar    

I hope you people are hale and hearty.  I had  

received a letter with respect to Havan being  

got performed by Buaji.  I had also got a  

Havan performed on First.  God may give peace  

to the sole.  The almighty may give place to  

her near him.  She had been relieved of her  

difficulties.  

I am once again writing to you that if you or  

Kuku is interest in purchase of our portion,  

then let us finalize the deal.  From our  

side, the deal can be closed.  From our side,  

Rs.5,00,000/- is final and I am making last  

request.  I am sending last request and I  

want that before the property goes into the  

hands of children, the brother should settle.   

The health of Mehtaji is deteriorating day by  

day.  He is not in a position to travel.  I

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hope you would also like that your son should  

remain with you.  You are elder and living on  

the ground floor, therefore, first offer is  

being made to you and second offer would be  

made to Kuku and only thereafter, I would  

offer the sale of my portion to outside.   

What is the status of eyes of Santosh?  I hope  

there would be improvement.  Please inform  

as to what Mamta is doing these days.  She  

must have completed her degree.  Kindly  

convey my love to Mani, Lakshmita and Dhruv.   

Please send photographs of Dhruv and  

Lakshmita and Naini.  These days, Dhruv must  

be quite talkative.  Please come over to  

Bhilai.  We could be very happy.  Mehtaji  

also joins me in wishing you Namaskar and love  

to children.  

Awaiting your reply,  

     Yours Shyama”   

24. On 10.03.1996 by Exhibit P17, the wife of the first  

defendant wrote as follows:   

“Dear Tilakji and Santoshji   

Namaskar  

We are well here and I hope everyone would be  

hale and hearty.  I heard about death of  

sister-in-law of Santoshji.  It is very  

shocking.  May God giver her soul peace.  I  

had a talk with Tilakji and I am responding  

to the points he asked :-  

1.  What would be the earnest money?

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2.  How the payment would be made?  

3.  What would be the rate?  

4.  Where the payment would be made and      

when the sale deed would be executed?  

5.  How the house would be got vacated?   

1 The earnest money can be paid Rs.1 lac       or two; even the entire payment can be made  

and signatures can be got done.  

2 Half payment would be through draft and the  remaining half would be in cash.  

3 As regards the rates, we have already  quoted quite low rates and this is final.   

I want to finalize the deal without telling  

Manu because it we are not able to finalize,  

then next offer would be to an outsider.   

If the deal is finalist by 1st April, after  

15th Manu would come and if he comes, then  

he would not let the house be sold.  

4 Payment will have to be made at Bhilai on  coming to Bhilai because Mr. Mehta is not  

in a position to travel.  

5 After giving the earnest money, we would  issue notice for vacating the house or  

adopt any other method (not readable)…….We  

will see.  

I hope you have got answer to all the  

points.  Please reply in writing  

immediately or give me a phone call.  

Kindly convey my love to children and  

regards to both of you.  

       Sd/-Shyama”

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25. There is no response again to the letter by the  

plaintiff though he claimed that he responded by a letter  

dated 23.02.1996 and 22.03.1996.  Again on 01.04.1996 P18  

was addressed by the plaintiff to the first defendant and  

his wife which inter alia read as follows:   

“Fax No.0788-324339  

Fax for Sh. V.D. Mehta,  

48/6, Nehru Nagar (West)  

Bhilai (MP)  

Res.Tele-324651  

13/19-A, Chandigarh  

      01.04.1996  

Respected brother and Shyama Bhabi,   

Namaskar, Ref. Today morning phone talks.   

In response to Bhabi’s letter dated  

10.03.1996, replied on 22.03.1996.  Main  

points are (1) Your reply pointwise received  

and discussed with family and in principal  

your offer is acceptable to us broadly.   

Please reconsider the matter and try to visit  

both of your along with Many Chandigarh.   

Also we are aware of brother’s health but if  

you try can come here, we will complete the  

formalities in one or two working days and  

give Biana one lac plus agreement to sell will  

be done.  At present, matrimonial talks of  

Mamta are in advanced stayed with 4/5 parties  

and their/our visits to each other are  

likely.  Our top priority is Mamta’s

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marriage and second priority is about your  

portion and Naini shifting to us.  Your  

reasonable offer has come at such a time that  

it is hard on me to take decision.  From my  

side, I will do my utmost best to complete the  

deal.  Rest it is God’s wish.  I and Santosh  

both are about 60 years old and are keeping  

indifferent health.  I am due to retire in  

August this year.  Please try to reduce the  

total value if there is some scope.  In case  

you decide not to come to Chandigarh, I will  

come for one or two working days to you.   

Please inform convenient trains from Delhi  

and for return journey try to make II sleeper  

reserve up to Delhi/Ambala.  Hope brother’s  

health is improving and all children are  

happy at their places and so are grand  

children.  Please reply soon or phone or fax  

at my office No.0172-703603 “Attn: Tilak Raj  

Bakshi” With regards, your  

affectionately-Tilak Raj Bakshi.”     

26. To the same P19 letter is sent by the wife of the first  

defendant, the same reads as under:   

“Dear Tilak,  

Namaskar  

I am in receipt of your letter and fax.  I was  

to consult my children, so there was some  

delay.  Manik is not ready to give you the  

portion of the house.  He is quite angry but  

I have spoken to Rajiv.  He has told me that  

if your goodself are interested in  

purchasing, then you are requested to come to  

Bhilai with all the payment in one go and get  

all the papers signed.  We do not wish to

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inform him because he is in Dubai for one  

month with Anju.  He has got his visa  

extended by one month and if till then his job  

is fixed, then he would stay otherwise he  

would come back and do something here.  I do  

not wish to now receive earnest money.   

Please make the final payment as the prices  

in Chandigarh are increasing quite rapidly  

and the rate settled by you is quite old.   

Therefore, I have given you offer because I  

wan in dire need of money.  Now the need is  

yours.  If the deal is finalized before Manu  

coming back, then it is alright because  

health of Mehtaji is also very delicate.  In  

any case, I would handle the situation in any  

manner but it would not be possible later on.  

For coming to Bhilai, you can catch  

Chhattisgarh Express from Ambala or you can  

catch Mahamaya super fast which starts at  

2.20 P.M from Delhi.  There is another train  

from Nizammuddin which runs three days a week  

which is again good train.  Please tell me on  

telephone whenever you wish to come.  I would  

get the seat booked because during summer  

vacation, there would be heavy rush.  

Convey love to children.  Namaskar to both of  

you.  

       Sd/-Shyama”     

27. There is no response to this letter by the plaintiff.  

It is thereafter that the sale was affected in favour of  

the second defendant on 12.11.1997. It is undoubtedly true  

that learned counsel for the plaintiff drew our attention

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to the telephone bills on record which go to show that  

appellant was engaged in communication defendant No. 1 or  

his wife in regard to their property and their interest in  

purchasing the property. From the correspondence, we are  

inclined to find as follows:   

In letter dated 16.02.1996, he wrote that if the  

plaintiff or Kuku is interested in purchasing the  

portion, then let the deal be finalized.   

Consideration of Rupees 5 lakhs was final and she was  

making the last request before the property goes into  

the hands of the children, the brother should settle.    

The health of Mehtaji (first defendant) was  

deteriorating day by day.  He was not in a position to  

travel.  Plaintiff being elder and living on the  

ground floor, offer was made to him and second offer  

made to Har Krishan Lal alias Kuku (the other brother  

of the first defendant) and only thereafter the offer  

would go to outside.     

27  

28. In the second letter dated 10.03.1996, she wrote to the  

plaintiff and his wife. It was mentioned that earnest money  

could be paid Rupees one lakh or two, half payment was to  

be through draft and remaining half was to be in cash.  It  

is specifically stated that as regards the rates they have  

already quoted low rates and it is final.  It was pointed  

out that if the deal is not finalized by 1st April, after  

15th, if Manu, apparently, the son of the first defendant  

came, he will not allow the property to be sold.  Payment  

was to be made at Bhilai on going to Bhilai, as first  

defendant was not in a position to travel.   

29. In the last letter dated 01.04.1996, it is written by  

the plaintiff to the first defendant and his wife.  He has  

shown awareness of the first defendant’s health.  Next he  

pointed out matrimonial talks of Mamta’s (daughter) that  

was in an advanced stage and 4/5 parties were in talks, the  

marriage was the top priority and second priority was about  

the portion of the first defendant.  Thereafter, it is  

stated that a reasonable offer of the first defendant has  

come at such a time that it is hard for him to take a

28  

decision.  He promised to do his best to complete the deal.   

Next, he would say that an attempt may be made to reduce  

the total value if there is some scope.   

30. Correspondence indeed establish, therefore, that the  

health of the first defendant was poor and it was  

deteriorating and he was in urgent need for money.  It is  

quite clear that the first defendant had made offer to the  

appellant for selling his share for Rupees Five Lakhs.  It  

is also quite clear that the plaintiff himself acknowledged  

in the letter dated 01.04.1996 that the offer of Rupees five  

lakhs was reasonable. Appellant, quite clearly, has  

articulated his pressing priority to be to conduct the  

marriage of his daughter.  This means that he was hard  

pressed for money.  Otherwise there was no need for him  

after finding the offer to be reasonable to request the  

first defendant and his wife to try to reduce the value.   

Letter dated 15.04.1996 written by the first defendant’s  

wife shows that she did not wish to then receive earnest  

money and she finally demanded that final payment be made  

as prices in Chandigarh were increasing quite rapidly and

29  

rate settled by the plaintiff was quite old.  She  

emphasized that the offer was given because she was in dire  

need of money.  Now the need is of the plaintiff.  This  

correspondence also tends to show that the rate of five  

lakhs was, in fact, even acceptable to the plaintiff as the  

letter referred to the rate settled by the plaintiff being  

quite old.  But nothing was happening on the ground.  This  

leads the first defendant wife to state that she would only  

handle the situation in any manner but it will not be  

possible later on.  The sale took place after more than a  

year.  One thing is clear that an offer was made on behalf  

of the first defendant to the plaintiff.  

31. We may also notice that in his deposition as PW4,  

plaintiff has stated that it is correct that three brothers  

had partitioned amongst themselves, the house in question,  

by making three portions A, B, and portion. He then says,  

it is wrong to suggest that each owner came into possession  

of its respective portion which fell to him on partition.  

Portion A fell to apparently the plaintiff. He does not  

remember to whom portion B felt. He does not remember who

30  

became owner of portion C. He claims to be in possession  

of the entire house after partition. The first defendant  

let out his share of portion 15-16 years before to the second  

defendant, he deposes. He deposes that it is correct that  

he was offered to purchase first defendant’s one-third  

share vide Exhibit P16. The agreement could not be executed  

as per the offer because defendant never turned up in  

Chandigarh. He was ready to make the entire payment while  

coming at Chandigarh, since the property is in Chandigarh.  

An amount of Rs.5 lakh was settled as consideration amount.  

(It may be noted that plaintiff, in P18 letter writes  

“please try to reduce the total value, if there is some  

scope). He further says, it is correct that he had offered  

in that letter-Exhibit P19 to get the payment at Bhilai and  

after the payment, the documents will be executed. He  

volunteered and stated that since the documents could not  

be executed at Bhilai as the property in question is at  

Chandigarh, he never made any final payment to the first  

defendant in Bhilai.  

31  

32. Apparently, in keeping with the family settlement, a  

preference was indeed shown.  The price was reasonable and  

acceptable even to the plaintiff though he wanted a  

reduction. Having regard to the health of the first  

defendant and the dire stage at which first defendant and  

his wife were placed, we cannot for a moment but hold that  

they had made an attempt to comply with the condition in  

the family settlement providing for preference.   

WHETHER THE HIGH COURT WAS RIGHT IN HOLDING THAT THE COURTS  

WOULD NOT EXERCISE DISCRETION UNDER SECTION 20 OF THE  

SPECIFIC RELIEF ACT, 1963 AS THE CONTRACT WAS NOT  

SPECIFICALLY ENFORCEABLE?  

33. Next question we must pose and answer is whether the  

High Court was right in holding that the courts would not  

exercise discretion under Section 20 of the Specific Relief  

Act, 1963 as the contract was not specifically enforceable.   

34. In this regard, the question would arise in the first  

place as to which is the contract which is sought to be  

enforced. It is pleaded in the plaint that first defendant  

was interested in disposing of his share and the plaintiff

32  

was ready and willing to purchase the share of first  

defendant. It is specifically averred that the third  

defendant (the other brother) did not show any interest in  

purchasing share of the fist defendant. Finally, the relief  

sought is by way of decree for specific performance  

directing the defendant to sell by the sale of one-third  

share in the house to the plaintiff and handover vacant  

possession of the demised portion to the plaintiff. This  

is apart from the relief against the sale in favour of the  

second defendant.  

35. Now, let us see the judgment of the Trial Court. The  

Trial Court proceeds to hold inter alia that there is a  

family settlement, there is correspondence and there are  

telephone bills. They made out the case that the plaintiff  

was never offered to purchase the share of the first  

defendant as per the terms and conditions of the family  

settlement. The sale in favour of the second defendant is  

null and void, he not being the bonafide purchaser. The  

plaintiff has the right of first preference to purchase.  

The sale consideration in favour of the second defendant

33  

is Rs.4.80 lakhs, but the first defendant is not bound to  

sell his share for that amount. However, he is bound to offer  

the plaintiff and defendant no.3 for purchase of that share  

before selling it to anybody else as no specific amount was  

mentioned as sale consideration in the family settlement.  

On these findings, the Trial Court decreed that the  

plaintiff is entitled to specific performance as per the  

terms and conditions of the agreement dated 31.03.1982 to  

purchase the share of defendant no.1. Thus, it can be seen  

that the family settlement has been understood as the  

agreement and the plaintiff is entitled to specific  

performance of the agreement.  

36. The first Appellate Court finds that it is admitted  

that the house belonged to the father of the plaintiff,  

first defendant and third defendant. He left behind him a  

registered will bequeathing properties including the  

plaint schedule house. It was found that the only  

controversy was whether offer was made to purchase the  

one-third share and whether the plaintiff came forward to  

accept the offer. It was further found that concurrence of

34  

the plaintiff in writing was not taken before transferring  

the property to the second defendant. The plaintiff was  

ready and willing but it was the first defendant who  

violated the terms of the family settlement. The Appellate  

Court goes further than the Trial Court and allowed the  

cross-appeal of the plaintiff and decreed that the second  

defendant will handover vacant possession to the plaintiff,  

finding that the relief of delivery was a consequential  

relief liable to be granted. It will be remembered that the  

Trial Court has decreed the suit for specific relief on the  

reasoning that under the family settlement, the first  

defendant has to give first preference to the plaintiff and  

it was also found that the first defendant is not bound to  

sell at an amount of Rs.4.80 lakhs for which first defendant  

has sold to the second defendant. All that he was to do was  

that he was bound to make an offer to the plaintiff before  

selling to anyone else.    

37. A perusal of these judgments would reveal the following  

aspects:

35  

1. The Appellate Court finds that the plaint schedule  

property was owned by the father. It is found that the  

three sons get equal shares.  

2. The Trial Court finds that no offer was made by the  

first defendant to the plaintiff. It decrees specific  

performance by directing so on the basis that first  

defendant will have to make an offer to the plaintiff  

and the third defendant after finding that the first  

defendant was not bound to make an offer to sell at  

Rs.4.80 lakhs. The Appellate Court, on the other hand,  

has gone to decree specific performance by even  

directing possession of the property to be given to the  

plaintiff by the second defendant. On the basis of the  

terms and conditions of the agreement dated  

31.03.1982, there are clearly two palpable flaws in the  

findings and directions. Admittedly, the second  

defendant was already occupying the property as a  

tenant. He can be evicted only in accordance with law  

even if everything is held in favour of the plaintiff.  

In other words, even if it is found that the assignment

36  

by the first defendant in favour of the second  

defendant is null and void, he has the right to continue  

in possession unless he is evicted under the relevant  

law for the eviction of tenants. Therefore, the  

direction to deliver possession is clearly  

unsustainable. The second flaw which vitiated the  

judgment of the first Appellate Court is that it has  

proceeded to hold that plaintiff is entitled to  

specific performance as per the terms and conditions  

of the agreement dated 31.03.1982. The Appellate Court  

was in error in decreeing specific performance on the  

basis that the family settlement without anything  

more, embodied a contract for sale of immovable  

property. The terms of the agreement, viz., the price  

at which the property is to be sold and purchased, are  

not spelt out in the family settlement, as correctly  

noticed by the Trial Court. The Appellate Court has not  

proceeded to hold that the plaintiff is entitled to  

purchase the property at Rs.4.80 lakhs at which price  

the first defendant has sold to the second defendant.

37  

If the decree is treated as confirming the decree of  

the Trial Court, then, the price at which it is to be  

purchased would only have been ascertained on the basis  

of an offer which is made in pursuance of the Trial  

Court’s judgment, and therefore, no decree for  

specific performance, as passed by the First Appellate  

Court, could certainly have been passed.  

38. This brings us to yet another question. Whether the  

terms of the family settlement embodied a right of  

preemption and what is the distinction between the right  

of preemption and right to purchase property under an  

agreement to sell.  

39. The decision of this Court in K. Naina Mohamed (supra)  

involved a will which was executed in favour of the two  

sisters of the testator. The will inter alia provided that  

after the demise of both the sisters who were to enjoy the  

properties during their life time, the male heirs would get  

the two properties in question as absolute owners. The

38  

properties were mentioned as properties ‘A’ and ‘B’. It is,  

thereafter, that clause (11) provided as follows:  

“(11) As and when Savithri Ammal's male  

heirs get and enjoy A property and as and  

when Rukmani Ammal's heirs get and  

enjoy B property, if any one of them wants to  

sell their share, they have to sell to the  

other sharers only as per the market value  

then prevailing and not to strangers.”  

40. The learned counsel for the appellant had contended  

essentially that the first defendant must honour his  

obligations under the settlement and what is involved here  

must be treated as a right of preemption. This is for the  

reason that in the decision which we have referred to this  

court, has taken the view that clause (11) was in the nature  

of right of preemption which can be enforced by the male  

heir of either sister in the event of sale of property by  

the male heir of the other sister. The words “other sharers”  

were understood to mean, “the male heirs of the other  

sister”.  We must, before we pronounce on this aspect,  

consider the content of the right of preemption.  

39  

41. In Bishan Singh v. Khazan Singh 5 , this Court has  

articulated the matter with clarity and we, hence, set out  

the following statement of the law:  

“7. Before attempting to give a  

satisfactory answer to the question raised,  

it would be convenient at the outset to notice  

and define the material incidents of the  

right of pre-emption. A concise but lucid  

statement of the law is given by Plowden, J.  

in 136 P.R. 1894, at page 511, thus:  

“A preferential right to acquire land,  

belonging to another person upon the  

occasion of a transfer by the latter, does  

not appear to me to be either a right to  

or a right in that land. It is jus ad rem  

alienum acquirendum and not a jus in re  

aliena…. A right to the offer of a thing  

about to be sold is not identical with a  

right to the thing itself, and that is the  

primary right of the pre-emptor. The  

secondary right is to follow the thing  

sold, when sold without the proper offer  

to the pre-emptor, and to acquire it, if  

he thinks fit, in spite of the sale, made  

in disregard of his preferential right.”  

The aforesaid passage indicates that a  

pre-emptor has two rights: (1) inherent or  

primary right i.e. a right for the offer of  

a thing about to be sold and (2) secondary or  

remedial right to follow the thing sold.”  

                                                           5 AIR 1958 SC 838

40  

42. We also think that it would be appropriate to refer to  

paragraph 11:  

“11. The plaintiff is bound to show not  

only that his right is as good as that of the  

vendee but that it is superior to that of the  

vendee. Decided cases have recognized that  

this superior right must subsist at the time  

the pre-emptor exercises his right and that  

that right is lost if by that time another  

person with equal or superior right has been  

substituted in place of the original vendee  

courts have not looked upon this right with  

great favour, presumably, for the reason that  

it operates as a clog on the right of the owner  

to alienate his property. The vendor and the  

vendee are, therefore, permitted to avoid  

accrual of the right of pre-emption by all  

lawful means. The vendee may defeat the right  

by selling the property to a rival pre-emptor  

with preferential or equal right. To  

summarize: (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,

41  

such as the vendee allowing the claimant of  

a superior or equal right being substituted  

in his place.”  

(Emphasis supplied)  

43. Right to preemption is ordinarily born out of custom  

or in terms of a statutory provision. We are not, in this  

case, concerned with the statutory right of preemption or  

custom. We would necessarily have to fall back on first  

principles relating to preemption, which we feel, have been  

explained in Bishan Singh (supra) which we have set out.  

We will proceed on the basis that a family  

settlement/contract can give rise to a right of preemption.  

But is this a case which calls for the application of right  

of preemption? The relief which is sought by the appellant  

in his plaint, reads as follows:  

“14. That the suit for the purposes of  

court fee and jurisdiction for relief of  

declaration is Rs.19-50 paise declaration  

and accordingly court fee i.e. Rs.19-50 paise  

is affixed on the plaint.  The value of the  

suit for the jurisdiction of court fee for  

specific performance is Rs.4,80,000/- and  

accordingly court i.e. Rs……. Is affixed on  

the plaint.

42  

It is therefore, respectfully prayed  

that the decree of the declaration be passed  

in favour of the plaintiff and against the  

defendant no.1 and 2 declaring sale deed  

dated 12.11.1997 null and void ab initio and  

for setting aside the same and decree the  

specific performance be also passed  

directing the defendant.  No to sell by the  

sale deed of 1/3rd share of property bearing  

House No.13, Sector 19-A, Chandigarh (shown  

red in site plan) to the plaintiff and to  

handover vacant possession of demised  

portion to plaintiff.  Any other relief  

which the plaintiff under the law is held  

entitled to also granted to him.  The suit be  

decreed with costs.”  

44. We would notice that there is no case expressly set up  

in the plaint that what appellant is seeking to enforce is  

a right of preemption. If the suit involved a right of  

preemption, and proceeding on the basis that the appellant  

was pursuing his secondary right to follow the property  

sold, then, the relief would have been to substitute himself  

in place of the buyer/second defendant. As held by this  

Court, the right of preemption is not right of re-purchase.  

Even proceeding on the basis of it being a case of  

preemption, as held by the High Court and by us, first  

preference was given to the plaintiff. As far as decision

43  

in K. Naina Mohamed (supra)is concerned, clause (11) of the  

will in the said case tabooed alienation in favour of  

strangers. In this case, the clause, we are concerned with,  

certainly does not place an absolute restriction on  

alienation in favour of a stranger. All that it contemplates  

is an offer being made to the brothers, once the first step  

of concurrence in writing by the brothers for the sale is  

obtained. We do not, therefore, think that the appellant  

would be justified in invoking the principle underlying the  

right of preemption in this case.   

IMPACT OF ABSENCE OF WRITTEN CONCURRENCE BY BROTHERS FOR  

SALE   

45. The controversial clause, according to the appellant,  

falls in two parts. Firstly, there must be a written  

concurrence from the two brothers, if the third brother  

wishes to sell his share. The second part is that the offer  

must be made to the other brothers before transfer is  

effected to a stranger. The contention is that the family  

settlement was arrived at so that the stranger is not  

inducted into the property.  

44  

46. To answer these questions, which have been posed, it  

may be also necessary to look at the case law in relation  

to the family settlements and restrictions which are put  

on property rights under such settlements. In Muhammad        

Raza (supra), which is relied upon by the appellant, under  

a compromise between the two Shia Mahomedans, the defendant  

agreed to marry the plaintiff. Certain rights were  

conferred upon the plaintiff upon her marriage with the  

defendant. The defendant was already married. Under the  

compromise, it was provided inter alia that the plaintiff  

would become owner of one-half of the property along with  

the first wife of the defendant. However, it was provided  

that the plaintiff, as also the first wife, shall not have  

the power to transfer the property to a stranger. Ownership  

was to devolve on the legal heirs of the two wives,  

generation to generation. Dispute arose upon the first  

plaintiff in earlier case/second wife, selling/mortgaging  

her share before her death. One of the contentions raised  

by the transferees from the wife, who was the plaintiff in  

the earlier suit which resulted in the compromise, was about

45  

the validity of the restriction against sale of the property  

to strangers. Dealing with the said aspect, the Privy  

Council had this to say:  

“Their Lordships feel the weight of  

these contentions, and they might have some  

difficulty in holding that Sughra Bibi took  

nothing more than a life estate. But assuming  

in the appellants' favour that she took an  

estate of inheritance, it was nevertheless  

one saddled, under the express words of the  

document, with a restriction against  

alienation to “a stranger.” Their Lordships  

have no doubt that “stranger” means anyone  

who is not a member of the family, and the  

appellants are admittedly strangers in this  

sense. Unless, therefore, this restriction  

can for some reason be disregarded, they have  

no title to the properties which can prevail  

against the respondent.  

On the assumption that Sughra Bibi took  

under the terms of the document in question  

an absolute estate subject only to this  

restriction, their Lordships think that the  

restriction was not absolute but partial; it  

forbids only alienation to strangers,  

leaving her free to make any transfer she  

pleases within the ambit of the family. The  

question therefore is whether such a partial  

restriction on alienation is so inconsistent  

with an otherwise absolute estate that it  

must be regarded as repugnant and merely  

void. On this question their Lordships think

47  

conditions one of which was the prohibition against  

alienation to strangers. The court also dealt with the  

matter on the basis that a partial restriction would not,  

in case of the transfer inter vivos, be bad, after the  

passing of the Transfer of Property Act, 1882 (hereinafter  

referred to as ‘the TP Act’).    

48. In K. Naina Mohamed (supra), the owner of the property,  

by a registered will, created life interest in favour of  

her two sisters. The will stipulated that after the death  

of the sisters, their male heirs would acquire absolute  

rights in the properties with the limitation that they shall  

not sell the properties to strangers. The sisters divided  

the properties amongst themselves. The property which stood  

allotted to one of the sisters came to be sold by the sister  

and her son in favour of the appellant. The sale was  

challenged as being violative of the condition in the will.  

In the course of its judgment, this Court observed as  

follows:  

“38. Reverting to the case in hand, we find  

that by executing the will dated 22-9-1951,

48  

Smt Ramakkal Ammal created life interest in  

favour of her two sisters with a stipulation  

that after their death, their male heirs will  

acquire absolute right in A and B properties  

respectively subject to the condition that if  

either of them want to sell the property then  

they shall have to sell it to the other  

sharers only as per the prevailing market  

value and not to strangers. The restriction  

contained in Clause 11 was not absolute  

inasmuch as alienation was permitted among  

male heirs of the two sisters. The object of  

incorporating this restriction was to ensure  

that the property does not go out of the  

families of the two sisters. The male heirs  

of Savithri Ammal and Rukmani Ammal did not  

question the conditional conferment upon  

them of title of the properties. Therefore,  

the appellant who purchased B property in  

violation of the aforesaid condition cannot  

be heard to say that the restriction  

contained in Clause 11 of the will should be  

treated as void because it violates the rule  

against perpetuity.”  

49. The court also, while dealing with the question of  

preemption, held as follows:  

“44. In the light of the above, we shall  

now consider whether Clause 11 of the will  

executed by Smt Ramakkal Ammal is violative  

of the rule against perpetuity. If that  

clause is read in conjunction with Clauses 4  

and 10 of the will, it becomes clear that the  

two sisters of the testator, namely, Savithri

49  

Ammal and Rukmani Ammal were to enjoy house  

properties jointly during their lifetime  

without creating any encumbrance and after  

their death, their male heirs were to get the  

absolute rights in A and B properties. The  

male heirs of the two sisters could alienate  

their respective shares to other sharers on  

prevailing market value. It can thus be said  

that Smt Ramakkal Ammal had indirectly  

conferred a preferential right upon the male  

heirs of her sisters to purchase the share of  

the male heir of either sisters. This was in  

the nature of a right of pre-emption which  

could be enforced by the male heir of either  

sister in the event of sale of property by the  

male heir of the other sister. If the term  

“other sharers” used in Clause 11 is  

interpreted keeping in view the context in  

which it was used in the will, there can be  

no manner of doubt that it referred to the  

male heirs of the other sister. The only  

restriction contained in Clause 11 was on  

alienation of property to strangers.”  

(Emphasis supplied)  

50. In the case decided by the Privy Council, in Muhammad  

Raza (supra), during the pendency of the disputes in a suit,  

a compromise was arrived at, which among other things, put  

an end to the dispute between the parties and recognized  

the right with the plaintiff over the property, however,

50  

subject to the condition that there will be no right to sell  

to strangers. In this case, as already noted, the title to  

the share in the property of the first defendant is  

traceable to the will executed by the father. The plaint  

reveals that the legatees, viz., the brothers applied to  

the Estate Office and the property was transferred in favour  

of the brothers on the terms and conditions in Memo dated  

10.07.1981. One of the conditions was that there will be  

no fragmentation of the site. It is thereafter that the  

controversial agreement was entered into between the  

brothers. Thus, the family arrangement was entered into by  

the brothers when their rights as owners had crystallized.  

It was not subject to any condition as was the case in  

Muhammad Raza (supra) where the compromise in the suit  

created the right but subject to the condition against  

alienation to stranger. No doubt, being brothers, they  

could to promote harmony and avoid future disputes, enter  

into a family settlement.  

51  

51. The first defendant has sold his share to the second  

defendant. Under the clause, can the first defendant sell  

to a stranger? He can sell provided there was a written  

concurrence by the other brothers for a sale and the offer  

is made to the other brothers and it does not fructify into  

a sale for reasons which are not attributable to the brother  

who wishes to sell. We find that there was an offer to the  

appellant by the first defendant. He has failed to act upon  

it. The other brother has no case about offer not being made  

and he has not raised any dispute over the sale to the second  

defendant. The perusal of the plaint reveals that the  

following case has been set up by the plaintiff:  

“7. that the defendant no.1 was  

interested in disposing his share in House  

no.19-A, Chandigarh and the plaintiff was  

already and willing to purchase the portion  

of the defendant no.1 and the plaintiff has  

been expressing his readiness willingness to  

purchase the share of the defendant no.1  

through number of Regd. Letters, telephone  

and even on FAX.  

8. That the defendant no.1 as well as  

his wife and son has been corresponding and  

discussing on behalf of the defendant no.1  

promising to sell the property to the  

plaintiff as defendant no.3 did not show any  

interest to purchase the share of defendant

52  

no.1 nor he was interested at all to purchase  

the 1/3rd share of the defendant no.1 in the  

property.    

9. that the plaintiff was shocked and  

surprised to learn that the defendant no.1  

has sold his 1/3rd share of the property to  

defendant no.2 a tenant who was already  

occupying the said portion in a totally  

secret manner without informing the  

plaintiff and against the terms and  

conditions of agreement of family partition  

and minutes dated 31.3.1982 arrived between  

plaintiff, defendant no.1 and defendant  

no.3.  the site plan showing the portion sold  

by the defendant no.1 to defendant no.2 (in  

red) is attached with this plaint.”  

(Emphasis supplied)    

52. Thus, what is sought is specific performance. The  

appellant proceeded in the suit on the basis that there is  

a contract. A contract presupposes an offer which is  

accepted which means that there was an offer from the  

defendant. The correspondence, which we have referred to,  

fortifies us in holding that there was an effective offer  

and it did not materialize on account of any default on the  

part of the plaintiff.

53  

53. Now, if the clause is broken down, it involves the  

following steps. A brother announces his desire to sell his  

share. He seeks written concurrence of the other brothers.  

A written concurrence is given. Then, the next step is  

reached. The selling brother offers to sell it to the other  

brothers. If they take the offer and the price is agreeable  

to the parties, sale follows. If the brothers do not wish  

to buy, the sale to the strangers is permitted. In the above  

process, in the facts of this case, it is clear that the  

appellant and the first defendant, without insisting on the  

written concurrence, went to the stage of offer to brothers.  

The appellant has led the first defendant to assume, even  

without a written concurrence, that the sale is permitted.  

The first defendant has acted clearly on the basis that the  

requirement of the first stage was not being insisted upon.  

Otherwise, he could have certainly obtained the  

concurrence. Having thus acted in the matter, and the second  

stage having been reached, when for reasons where the fault  

cannot be attributed to the first defendant, the offer,  

which the appellant himself describes as reasonable, was

54  

not seized upon by the appellant, the third stage emerged.  

This meant that it became open to the first defendant to  

sell to a stranger and which is what he did by it selling  

it to the second defendant. Even proceeding to enforce the  

clause, we find that the appellant is clearly estopped from  

setting up the plea of absence of written consent of the  

brothers. It would be inequitable, particularly when we are  

considering the matter in an appeal sourced under Article  

136 of the Constitution of India.  

EFFECT OF PROHIBITION AGAINST FRAGMENTATION OF PROPERTY IN  

QUESTION UNDER THE CAPITAL OF PUNJAB (DEVELOPMENT AND  

REGULATION) ACT, 1952  

54. The further obstacle remains posed, however, that the  

sale will result in contravening the law prohibiting  

fragmentation. The Capital of Punjab (Development and  

Regulation) Act, 1952 (hereinafter referred to as ‘the 1952  

Act’ for short) defines “site” in Section 2(f) as meaning  

“any land which is transferred by the Central Government  

under Section 3”.

55  

55. Section 3 of the Act reads as follows:  

“3. Power of Central Government in  

respect of transfer of land and building in  

Chandigarh. –  

(1) Subject to the provisions of this  

section, the Central Government may sell,  

lease or otherwise transfer, whether by  

auction, allotment or otherwise, any land or  

building belonging to the Government in  

Chandigarh on such terms and conditions as it  

may, subject to any rules that may be made  

under this Act, think fit to impose.  

(2) The consideration money for any  

transfer under sub-section (1) shall be paid  

to the Central Government in such manner and  

in such instalments and at such rate of  

interest as may be prescribed.  

(3) Notwithstanding anything contained  

in any other law for the time being in force,  

until the entire consideration money  

together with interest or any other amount,  

if any, due to the Central Government on  

account of the transfer of any site or  

building, or both, under sub-section (1) is  

paid, such site or building, or both, as the  

case may be, shall continue to belong to the  

Central Government.”  

56.  Section 4 of the 1952 Act confers power upon the  

Central Government and the Chief Administrator to issue  

directions in respect of any site or building in regard to  

the matters which are mentioned therein. The word

56  

“transferee” is defined in Section 2(k) of the Act, which  

reads as follows:  

“2(k)"transferee" means a person (including  

a firm or. other body of individuals, whether  

incorporated or not) to whom a site or  

building is transferred in any manner  

whatsoever, under this Act and includes his  

successors and assigns;”  

57. Section 4(2) of the 1952 Act reads as follows:  

“4(2) Every transferee shall comply with  

the directions issued under sub-section(1)  

and shall as expeditiously as possible, erect  

any building or take such other steps as may  

be necessary, to comply with such  

directions.”  

58. Section 5 of the 1952 Act forbids erection or  

occupation of any building at Chandigarh in contravention  

of Building Rules made under sub-Section (2). The word  

“building” is defined in Section 2(c), which reads as  

follows:  

“2(c)"building" means any construction or  

part of a construction which is transferred  

by the '[Central Government] under section 3  

and which is intended to be used for

57  

residential, commercial, industrial or other  

purposes, whether in actual use or not, and  

includes any out-house, stable, cattle shed  

and garage and also includes any building  

erected on any land transferred by the  

Central Government under section 3;”  

59. From a perusal of the aforesaid provisions, it becomes  

clear that the word “site” means any land which is  

transferred under Section 3 of the 1952 Act. When it comes  

to the terms of Section 3, it contemplates power with the  

Central Government to transfer by auction, allotment or  

otherwise any land or building belonging to the Government  

in Chandigarh on such terms and conditions as may subject  

to any Rules that can be made under the Act, the Government  

thinks fit to impose. Thus, though it is open to the Central  

Government to transfer either land or building belonging  

to the Government in Chandigarh under Section 3 of the 1952  

Act, the word “site” is confined to only the land which is  

transferred by the Central Government under Section 3. In  

fact, the word “building”, as defined in the Act, points  

to any construction or part of construction which his  

transferred under Section 3. It includes outhouse, stable,

58  

cattle shed and garage and also includes any building  

erected on any land transferred by the Central Government.  

The construction must be intended to be used for  

residential, commercial, industrial or any other purposes.  

A clear distinction is maintained between “site” and  

“building”. The Chandigarh (Sale of Sites and Building)  

Rules, 1960 came to be made. Section 22 of the 1952 Act  

confers power upon the Central Government to make the                  

Rules for various purposes, which are mentioned in  

sub-Section (2). It includes Sections 2(a), 2(d), 2(e) and  

2(h) of the 1952 Act, which reads as follows:  

“2(a) the terms and conditions on which any  

land or building may be transferred by the  

Central Government under this Act;   

xxx     xxx     xxx  

2(d) the terms and conditions under which the  

transfer of any right in any sit or building  

may be permitted;  

xxx     xxx     xxx  

2(e) erection of any building or the use of  

any site;  

59  

xxx     xxx     xxx   

2(h) the conditions with regard to the  

buildings to be erected on sites transferred  

under this Act;”  

60. Rule 14 of the Chandigarh Sale of Sites and Building  

Rules, 1960 provides that no fragmentation of any site is  

permitted. Subsequently, in exercise of powers under  

Sections 3 and 22 of the Act, Chandigarh Estate Rules, 2007  

came to be made. Rule 16 deals with  

fragmentation/amalgamation, which reads as follows:  

“16. Fragmentation/Amalgamation. No  

fragmentation or amalgamation of any site or  

building shall be permitted. Provided that  

amalgamation of two or more adjoining sites  

shall be permissible only in the case of  

commercial or industrial sites subject to the  

condition that the revised plans are approved  

by the competent authority, prior thereto.  

Provided further that fragmentation of any  

site shall be allowed if such fragmentation  

is permitted under any scheme notified by the  

Administration.”  

(Emphasis supplied)  

61.  It is on the strength of the provisions contained in  

Rule 14 of the 1960 Rules and Rule 16 of the 2007 Rules that

60  

the appellant would argue that the assignment of the share  

of the first defendant occasioned a breach of the law. The  

second defendant, on the other hand would point out that  

there was no issue of fragmentation ever raised before the  

courts and the same was not decided in the courts.  

62. It is contended by the second defendant that the sale  

deed in favour of the respondent no.1 specifically says that  

the sale is in respect of one-third share in the residential  

house no.13 of Sector 19A, Chandigarh. After the sale deed,  

it is contended, one-third share of the party was duly  

transferred and mutated in the name of respondent  

no.1/second defendant by the Chandigarh Administration.  

The High Court, in fact, tides over this objection by the  

appellant by pointing out that once the second defendant  

steps into the shoes of the first defendant, he became a  

co-owner and his remedy is to sue for partition and while  

fragmentation of property, is not ‘admissible’, the market  

value of the property can be determined, and buying each  

other’s share, as per the provisions of Sections 2, 3 and  

4 of the Partition Act, 1893.

61  

63. While it may not be true that the issue of fragmentation  

was not raised in the courts, we would think that the  

appellant is not able to persuade us to hold that the  

assignment in favour of the second defendant is vulnerable  

on the basis that it involves fragmentation. We have noticed  

the deposition of the plaintiff about partition of the house  

into three portions. We have noted the fact that one-third  

share has been duly transferred and mutated in the name of  

the first respondent/second defendant by the Chandigarh  

Administration.  

64. The second defendant has produced the communication  

dated 19.12.1997 which indicates the transfer of rights of  

site in Sector 19A held by Vishnu Dutt Mehta (first  

defendant) is noted in favour of the second defendant  

subject to certain conditions. This is obviously before the  

2007 Rules came into force.  

65. In the light of the aforesaid facts, we cannot permit  

the appellant to impugn the transaction on the said ground.  

62  

66. The upshot of the above discussion is that the  

contentions of the appellant are liable to be rejected. We  

do so. The appeals will stand dismissed. The parties will  

bear their own costs.  

          ……………………………………J.  

                                (ASHOK BHUSHAN)   

…………………………………………J.  

            (K.M JOSEPH)  

NEW DELHI;  

AUGUST 20, 2019.