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Ram Chand Vs. Randhir Singh [1994] INSC 514 (5 October 1994)

Punchhi, M.M. Punchhi, M.M. Kuldip Singh (J) Ramaswamy, K.

CITATION: 1995 AIR 130 1994 SCC (6) 552 JT 1994 (6) 404 1994 SCALE (4)395

ACT:

HEAD NOTE:

The Judgment of the Court was delivered by M.M. PUNCHHI, J.- This appeal, directed against the judgment and order of a learned Single Judge of the Punjab and Haryana High Court dated 1-2-1983, passed in Regular Second Appeal No. 1611 of 1973, raises two questions of importance, on the true interpretation of clause Fourthly in 555 Section 15(1)(a) of the Punjab Pre-emption Act, 1913 as applicable to the State of Haryana, being:

(i) whether an agricultural tenant inducted by the usufructuary mortgagee, has a right of pre-emption over the sale made by the mortgagor-vendor? and

(ii) whether an agricultural tenant holding under tenancy of the vendor a part of the sold land is entitled to pre-empt the entire sale?

2. Following are the facts as gathered from one or the other judgments of the three courts below. Some land including 50 kanals 6 marlas of land in Khasra Nos. 294/9 (9-12), 1 (6-16), 2 (3-2), 10 (7-8), 12 (8-0) and 13 (8-0) situated in Village Bhattukalan, Tehsil Fatehabad, District Hissar was owned by one Mool Chand. As per revenue records adduced in evidence before the learned trial Judge, the land stood tenanted even prior to the year 1946 and was so in the year 1950 with one Net Ram Gosain. In 1951, Mool Chand died and his estate was mutated in favour of his widow and two sons, one of whom was Mitter Sen and in whose share the above land fell. Mitter Sen mortgaged six khasra numbers barring 294/9 (9-12), from his inherited land on 16-12-1951 in favour of Amin Chand for Rs 2400 and Mutation No. 1548 in that regard was sanctioned and recorded in the revenue papers. The tenancy however was not affected. Under the tenancy laws, as applicable to Haryana, the agricultural year commences from 15th June, whereafter time arrives to sow the Kharif crop. At the time of the crop inspection of Kharif 1953, done on maturity of crops between October to December as per departmental instructions, Ratna Ram, the father of the present appellants herein, was found to be the tenant of the mortgaged as also non-mortgaged land of Mitter Sen on payment of one-third produce, and was recorded as such. The records are silent however as to whether Ratna was inducted as a tenant by Mitter Sen, owner of the land or Amin Chand, mortgagee. Be that as it may, the cultivation of the land by Ratna, father of the appellant continued till his death, whereafter the appellants were substituted as tenants by inheritance. Revenue records of intervening years kept showing the appellants or their father, as the case may be, sometimes as tenants under the owner, Mitter Sen and sometimes under Amin Chand, the mortgagee. While so, Mitter Sen, owner-mortgagor on 6-5-1966 re-mortgaged the disputed land with possession to the same Amin Chand for Rs 1500 by a Registered Mortgage Deed. Fifteen days later, on 21-5-1966, he redeemed the former mortgage of 16-12-1951.

The appellants remained unaffected by these transfers.

Mutation for the subsequent mortgage dated 6-5-1966 was sanctioned on 21-7-1966.

3. On 4-3-1968, Mitter Sen sold the entire 50 kanals 6 marlas of land for a total consideration of Rs 10,000 to the respondents. In the sale, a provision was made in letting the vendees keep the sum due for redeeming the existing mortgage. The appellants sought pre-emption of the sale in its entirety. The trial court granted them a decree for pre-emption in respect of the nonmortgaged Khasra No. 294/9 (9 kanals and 12 marlas) only on the payment 556 of proportionate price of Rs 2122.30 paise and dismissed the suit with regard to the mortgaged land, now in dispute.

4. The appellants as well as the respondents filed cross appeals before the District Judge, Hissar who allowed the appeal of the pre-emptorappellants granting them a pre- emption decree and dismissed the appeal of the respondents regarding the other part, in which the appellants had been successful qua one khasra number before the trial Judge.

The respondents' regular second appeal before the High Court was allowed and the judgment and decree of the trial court was restored with the result that the appellants were denied the relief of preempting sale of the land which was under mortgage. The question, therefore, has arisen whether the appellants had such a right of pre-emption as claimed by them and on what basis.

5. Section 15(1)(a) Fourthly would, when properly arranged and culled out from the text, read as follows:

"The right of pre-emption in respect of agricultural land shall vest ... where the sale is by a sole owner ... in the tenant who holds under tenancy of the vendor, the land sold or a part thereof."

6. The first question is raised on the premise that the appellants (before them their father) had been inducted in the disputed land in 1953. The land in dispute was already tenanted when mortgaged for the first time in 1951. It remained tenanted thereafter throughout. There was only a change of tenants in the process of time. From this, it was sought to be urged that deriving usufruct of the land by tenanting was the accepted mode evidenced from the conduct of parties. It was also urged that there was no prohibition in terms of the mortgage to the induction of tenants by the mortgagee. It was stressed that within the terms of Section 76(a) of the Transfer of Property Act, a mortgagee has a right to manage the property as a person of ordinary prudence would manage, if it were his own. It was also pointed out that since tenants were given some security from eviction under the provisions of the Punjab Security of Land Tenancy Act, 1953 with effect from 15-4-1953, the appellants as tenants by legal fiction had become the tenants of the vendor insofar as the mortgaged property was concerned.

7. The words "if it were his own" in Section 76(a) of the Transfer of Property Act make the mortgagee, unless prohibited from doing so, the second self of the mortgagor, when he as a prudent owner leases out agricultural land. It is well known and settled that in case of lease of agricultural land, the lessee, by the very process of cultivation, has to bring in inputs, effort and as a termed measure fertilization of the soil, pursuing constant and continuous agricultural activity and vigil to attain acceptable results. His effort is not that of one time but a continuous one with a future in view and that is why there is a presumption that agricultural leases are from year to year and not of monthly or daily duration. In the instant case, when there was no prohibition to lease out the mortgaged land in the event of the then tenant vacating, what better could be an instance of good management by the mortgagee in putting another tenant, whose existence on 557 the land, as future tells us, was never questioned at any time by Mitter Sen, and more so, at the time of the execution of the second mortgage.

8. The legal position with regard to the agricultural leases, has also been settled by a five-judge Bench of this Hon'ble Court in Prabhu v. Ramdeo1 by holding that persons inducted into agricultural lands as tenants by a usufructuary mortgagee, who become entitled to protection under the tenancy laws, cannot be ejected by the mortgagor on the ground that the mortgage of the land had been redeemed. Even though that was a case in which the right of tenure accrued to the tenants after the creation of the lease but on principle it would not make a difference insofar as the present case is concerned, where the Punjab Security of Land Tenures Act giving protection to the tenants from ejectment, except on grounds mentioned in the statute, became available from 15-4-1953 onwards, and the lease herein has been shown to have commenced with the agricultural year starting from 15-6-1953, within a span of two months of that Act being enforced. When viewed in this backdrop it becomes apparent that when the mortgagee changed the tenant, he had done so under his legal right and obligation under Section 76(a) of the Transfer of Property Act and the just and equitable principles involved therein.

Thus his deeds in that regard are to be considered as deeds of the mortgagor. Having arrived at such conclusion, it is not difficult then to proceed on the footing that the tenancy created by the mortgagee was in sum and substance the tenancy created by and for the mortgagor and when on that basis the mortgagor gets to be the vendor of the land sold during the subsistence of the mortgage, the tenants inducted on the land by the mortgagee for him, non-ejectible at will, derive the right of preemption. For the ultimate social goal is that the land must go to the tiller, Whose bare feet get kissed and blessed by the feel of Mother Earth. In Atam Prakash v. State of Haryana2, Chinnappa Reddy, J. speaking for this Court had held: (SCC p. 261, para 10) "The right of pre-emption vested in a tenant can also be easily sustained. There can be no denying that the movement of all land reform legislations has been towards enabling the tiller of the soil to obtain proprietary right in the soil so that he may not be disturbed from possession of the land and deprived of his livelihood by a superior proprietor. The right of pre-emption in favour of a tenant granted by the Act is only another instance of a legislation aimed at protecting the tenant.

There can be no doubt that tenants form a distinct class by themselves and the right of pre-emption granted in their favour is reasonable and in the public interest." The first question is thus answered accordingly to hold that an agricultural tenant inducted in terms of Section 76(a) of the Transfer of Property Act, by the usufructuary mortgage, has a right of pre-emption over the sale made by the mortgagor-vendor.

1 AIR 1966 SC 1721 2 (1986) 2 SCC 249 558

9. The second question is, should the provision be interpreted confining the right to the tenanted area or extending it to the entire area covered by the sale? It has been contended on behalf of the appellants that on the findings recorded by the courts below they were tenants over a part of the land sold, for which they have been given a decree of pre-emption. They claim that on a true interpretation of the provision they should get the whole bargain in pre-emption, even if they are not treated as tenants of the other part. It was also asserted that if in a sale of agricultural land, some part of it was tenanted then the right vests in the tenant to seek pre-emption of the sale in entirety because of the jural relationship existing. It was emphasised that the qualification for seeking pre-emption was barely being a tenant who holds land under tenancy of the vendor, not necessarily the whole. The tenanted part thereof, entitles him to have the whole because it is involved in the sale and so connected with the vendor through that land. We have not been made any wiser by any precedent cited at the bar for or against the preposition raised. Even the point as such was not raised before the courts below but has arisen otherwise in discussion.

10. A learned Single Judge of the Punjab and Haryana High Court in Balwant Singh v. Mehar Singh3, interpreting the provision, has viewed that the word 'holds' in the provision is not to be construed in isolation but is to be read with its succeeding words "under tenancy". This ratio of the High Court had apparently risen where the tenant claiming pre-emption of the suit land had, after the sale, been ousted from physical possession and his claim for pre- emption was being protected by the court. It is in that context that the High Court ruled that the word 'holds' must be read along with the words "under tenancy" and that the right of tenancy did not merely mean the act of physical possession but also included a bunch of incorporeal rights which are not capable of physical possession. Qualificatory rights in that regard were thus settled by precedent that the preempting tenant should merely have held the land on the date of sale and not necessarily at any time thereafter to satisfy the rule of maintaining the status on three occasions i.e. on the date of sale, on the date of the suit and on the date of the decree of the first court. However, it has always remained unquestioned that the tenant can pre- empt the sale with regard to the portion of the land actually in his tenancy. To the untenanted portion which was part of the sale, a bar has always been read. All the same, it would have to be gathered from the provision whether such right of pre-emption, in respect of agricultural land, has been made to vest in the tenant? It is apparent that the tenant, in priority has the last right for preemption in Section 15(1) of the Act. The language conferring such right, as is evident, is not punctuated.

All the words have been put together. Its language thus is capable of more than one meaning. Therefore, whatever goes to further the intendment of the measure should be the basis of interpretation. It is well to remember that this right to the tenant was conferred by amendment in the Act in the year 1960 in the post- 559 constitutional era as part of agrarian reform. Atam Prakash case2 is a clear pointer. Unlike its other provisions, save in the case of a co-sharer, which have been struck down as archaic and unconstitutional in Atam Prakash case2, this part has been kept alive, attuned as it is with modern thinking. Thus the provision would need a purposive interpretation furthering, if not expanding, the right rather than curtailing it. If the words "holds under tenancy" be not disjuncted as per dictum of Balwant Singh case3, they have then as a sequitur to be conjuncted with the words "of the vendor". If so the right thus is vested in the tenant who holds under tenancy of the vendor not only the land sold but even a part thereof, i.e., of the land sold. Thus on interpretation, this view can be taken that when a tenanted part of land is involved in the sale, the tenant thereof has a right of pre-emption qua the entire sold land and the vendees cannot resist the same.

11. This interpretation is advantageous from the legal as also the economic and social point of view in the rural society. Permitting total sale being preempted is to prevent fragmentation of the erstwhile holding of the vendor. It does away disputes of partitioning or sharing sources of irrigation and working out rights to take water to agricultural fields through the fields of the other which need was non-existent under the vendor's management.

Likewise for passages of ingress and egress, problems may come up. It obviates the necessity of settling other disputes such as apportionment of price of the tenanted area on the splitting of the sale, the possible design of its being inflated to frighten the prospective tenant pre- emptor. It is attuned with the principle of bar to partial pre-emption. It also avoids the lurking fear of the tenant having to deal with a stranger. Such advantages are just some. Taking the language of the text and its plain advantageous meaning, we would rather give such an interpretation to the provision which would entitle a tenant to pre-empt a sale of agricultural land in which his tenanted land is included, on the strength of which he can claim the entire bargain in the exercise of his right of substitution over the vendee. A Full Bench of the Punjab High Court in Uttam Singh v. Kartar Singh4 had enumerated one of the grounds in upholding the vires of Section 15 as avoidance of fragmentation of holding. This Court in Ram Sarup v. Munshi5, testing the ground aforementioned in the case of a son, observed as follows: (SCR p. 873) "Nor can the ground of avoidance of fragmentation of holdings afford assistance to sustain the claim of a son to pre-empt in the event of a sale by a sole owner-father, for that criterion has primary relevance to the right of pre-emption enjoyed by co-sharers and the like."

12. The word 'like' was obviously used to cover up the case of someone other than the co-sharer. And besides the co- sharer, only the tenant now has the right of pre-emption.

So the word 'like' seemingly was conceived to include the case of a tenant. The second question therefore is answered 4 AIR 1954 Punj 55 55 Punj LR 500 : ILR 1954 Punj 232 5 (1963) 3 SCR 858 AIR 1963 SC 553 560 accordingly to hold that an agricultural tenant holding under tenancy of the vendor a part of the sold land is entitled to pre-empt the entire sale.

13. The trial Judge dismissed the suit of the appellants on the understanding that the appellants were not tenants of the mortgagor-vendor. The lower appellate court took the view that between the date of the second mortgage and date of the mutation on 21-7-1966, the first mortgage had been redeemed and from that moment onwards the appellants became direct tenants of the vendor and thus the land for the second time, when mortgaged, stood tenanted. That view was taken possibly on the understanding that till mutation was effected, the second mortgage was not operative. There was an obvious fallacy in that reasoning which the High Court corrected in upsetting that view. The High Court seemed otherwise aware that on redemption of mortgage, the lease created by the mortgagee, such as the present one, would have to be taken as if created by the mortgagor. This outcome was circumvented taking the view that the second mortgage was created at a time when the first one was subsisting during which period the lease in favour of the appellants was created; the lease which continued uninterrupted under the second mortgage. The High Court, in our view, should have drawn the inference that the second mortgage was nothing but an implicit act of ratification of the deeds of the mortgagee, who was no other but the same Amin Chand, the creator of the lease. At that time, no objection as to the existence of the lease was raised. By his conduct the mortgagor revealed that he had taken the created lease as his own, lending qualification to the appellants in being the vendor's tenants over his holding.

14. We are thus of the view that in these facts and circumstances, when the appellants have been on the land for over 40 years as tenants, in the otherwise dying law of pre- emption, such rights in favour of them, on true interpretation of the statute, shall be read in the way we have answered the two questions aforeposed. We, therefore, allow this appeal and set aside the impugned order of the High Court and that of the trial court restoring operatively that of the lower appellate court, decreeing the suit of preemption of the appellants. They shall make deposit of the sum as required by the lower appellate court on terms on or before 31-12-1994 failing which the law as settled would remain, but the appellants would have denied to themselves the relief of a positive decree. In the circumstances, there shall be no order as to costs.

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