Jamal Soofl and others vs Mohd.Sidiq and others

Dar, Member.

(1) This is an appeal against the judgment, and the decree of the High Court dated Assuj 4 2008 by which the judgment and the decree dated 16th

Poh. 2007, of the City Judge of Srinagar was modified.

(2) On Baisakh 24, 2005, respondents .3 and 4 executed a sale deed of a house and land situated in Mohalla Syed Hamidpora in the City of

Srinagar in favour of the appellants for an ostensible consideration of Rs. 5000/. Respondents 1 and 2 who are the owners of the adjoining

property claim to exercise right of prior purchase in regard to this sale and the main question lor the consideration of the Board in this appeal is on

payment of what price this right can be enforced by them.

(3) Prior to the sale there was an agreement of sale dated Baisakh 24, 2005 which recites that at the time of agreement, a sum of Rs. 2000/ was

paid by the appellant to respondents 3 and 4. The sale deed of Baisakh 30, 2005 further recites that a sum of Rs. 1500/was paid at the time of the

execution of the sale deed and further a sum of Rs. 500/ was paid at the time of its attestation. On Baisakh 30, 2007 the date when the sale deed

was executed a bond was also executed for the payment of Rs. 1000/ by the appellant to respondents 3 and 4 and this bond was also attested by

the Registrar. Prima iacie the ostensible consideration of Rs. 5000/ of the sale deed is thus duly supported by documents two of which are

registered.

(4) Respondents 1 and 2, however, challenged this consideration to be fictitious to the extent of Rs. 3000/ and they also valued their suit for the

purpose of jurisdiction at Rs. 2000/. The respondents did not dispute that a sum of Rs. 1500/ was paid at the time of the execution of the sale

deed and a further sum of Rs. 500/ was paid at the time of its attestation. But they denied the payment of Rs. 2000/at the time of the agreement

and the payment of any money in satisfaction of the bond of Rs. 1000/.

(5) The trial Judge found that a sum of Rs. 700/ was paid at the time of the agreement, and no payment has been duly proved in regard to the

bond, the ostensible consideration therefore was not fixed in good faith and could be disregarded. He then found the market value of the property

to be Rs. 3000/ and granted a decree to respondents 1 and 2 on payment of that amount.

(6) Against this decree the appeals were taken to the High Court both by the appellants and respondents 1 and 2 and after filing these appeals, at

the hearing, a question was raised by the. appellants about the competency of the appeal to the High Court. That Court has come to the conclusion

that the appeals were competent and that the sale consideration which has been proved to have been paid, was Rs. 2700/ and respondents I and 2

are entitled to enforce the right of prior purchase on payment of that sum only. As a result the decree of the trial Court was modified to that extent.

(7) The 34th section of the Civil Courts Act 1977, no doubt provides that an appeal from a decree of the Subordinate Judge shall lie to the District

Judge where the value of the original suit in which decree was made did not exceed Rs. 2500/ and as the value of the suit in the plaint was set out

to be Rs. 2000/, the appeal against the decree of the trial Court prima facie lay to the District Judge and not to the High Court. But by the 9th

section of the Suits Valuation Act 1977 the determination' of value of certain suits has been left to the High Court and in exercise of the powers

conferred by this section the High Court has made certain rules with the sanction of the Government and Rule 16 of these Rules provides that the

valuation of the suits for preemption in respect of houses shall depend upon judicial decision. The proper construction of these provisions,

therefore, must be that in regard to suits for preemption in relation to houses, the forum of the Court of appeal is determined not by valuation laid in

the plaint but by the valuation determined by the judicial decision and in this view of the matter the High Court has rightly held that the appeal to it

was competent.

(8) On the question of consideration the High Court has taken the view that respondents 1 and 2 are entitled to exercise the right of prior purchase

on payment of price which the appellant has succeeded in proving to have been paid to respondents 1 and 2.

(9) Section 24(1), Right of Prior Purchases Act, 1993 provides:

(1) If in the case of sale the Parties are not agreed as to the price at which the person having right of prior purchase shall exercise his right, the

Court shall determine whether the price of which the sale purports to have taken place has been fixed in good faith or paid and if it finds that the

price was not so fixed or paid, it shall fix as the price for the purposes of the suit the market value of the land or property.

Section 26(a) further provides:

For the purpose of determining the market value, the Court may consider the following among other matters as evidence of such (a) the price or

value actually received or to be received by the vendor from the vendee or the amount really due on the footing of mortgage as the case may be;"".

(10) Both the Courts below have concurrently found that out of the sale consideration of Rs. 5000/ the appellants have succeeded in proving

consideration to the extent of Rs. 2700/ only. From this finding it follows that the price at which the sale purports to have taken place, has not been

fixed in good faith or paid, and therefore, it is the duty of the Court under S. 24(1) to determine the market value of the property and fix its price

for the purpose of the suit. In determining the market value under S. 26 (a) it can take into consideration inter alia the price actually received by the

vendor from the vendee but it is not bound to do so and the Statute does not give a right to the preemptor to preempt the property on payment of

the price which the vendee succeeds in proving to the satisfaction of the Court or which the vendee has actually paid to the vendor. The right of

prior purchase can only be exercised on payment of price fixed in good faith by the vendor or the vendee, or on payment of the price determined

by the Court on the basis of market value. In determining the market value the price actually paid may be taken into consideration but cannot form

an independent ground for the exercise of the right of prior purchase. The view of the High Court, therefore, that respondents 1 and 2 were entitled

to exercise the right of prior purchase on payment of price which the appellant has succeeded in proving cannot be sustained and it is necessary to

determine the market value of the property taking into consideration, among other matters, the payment of price which the appellant has succeeded

in proving to the satisfaction of the Court.

(11) The trial Court has found the market value to be Rs. 3000/ and the High Court has not expressed any opinion upon this point. It becomes,

therefore, necessary for the Board to consider the question for itself and it has come to the conclusion that the finding of the trial Court in this

matter is correct and should be affirmed.

(12) The Board will, therefore, humbly advise His Highness. that this appeal be allowed in part and that the variation made in the decree of the

High Court from the decree of the trial Court be set aside and that the decree of the trial Court be restored. The appellant will have 3 months time

from this date to deposit the purchase money if it has not already been made and the appellant will bear his own cost and will pay half costs of the

respondents before the Board and the High Court.

(13) B/H.G.P. Appeal partly allowed.