Case Laws
Acts
Notifications
Circulars
Classification
Forms
Manuals
Articles
News
D. Forum
Highlights
Notes
🚨 Important Update for Our Users
We are transitioning to our new and improved portal - www.taxtmi.com - for a better experience.
⚠️ This portal will be discontinued on 31-07-2025
If you encounter any issues or problems while using the new portal,
please
let us know via our feedback form
so we can address them promptly.
Home
1962 (3) TMI 132 - SC - Indian LawsSuits for pre-emption - constitutionality of pre-emption laws prevailing in the States of Madhya Pradesh (Rewa-State area) Delhi and Maharashtra (Berar-area) - vicinage offends Article 19(1)(f) of the Constitution. K.N. Wanchoo J. - HELD THAT - In any case the price is always settled by agreement between the vendor and the vendee and there is no reason to hold that such an agreed price would be an unconscionable price. Nor do we think that the law of pre-emption in intended to provide for fixation of reasonable price by courts; therefore that can hardly be a reason to hold that it is a reasonable restriction in the interests of the general public on the right of the vendor under Art. 19(1)(f). We do not think that the restrictions placed by the law of pre-emption in a case based on vicinage have any effect on prices being reasonably fixed and the main effect we can see is that the law may give rise to a crop of litigation. We cannot therefore see any advantage to the general public by such a law of pre-emption and in any case the disadvantage certainly overweighs the advantage that may result to a small section of the public. Considering therefore the nature of the right created under the Code we have no hesitation in coming to the conclusion that this right is in reality in favour of a co-sharer strictly so-called or some one who is akin to a co-sharer and the reasons which we have already indicated when dealing with the Punjab Act relating to co-sharers will apply with full force to the right created under the Code with this addition that this being agricultural land there will be further advantage inasmuch as the right of pre-emption would result in consolidation of holdings within a survey number which as we have said is generally of an extent of thirty acres. We are therefore of opinion that the view taken in Ramchandra v. Janardan to the effect that the law of pre-emption provided in Chap. XIV of the Code does not infringe Art. 19(1)(f) is correct. This being the only point urged before us in the appeal we are of opinion that the appeal must fail. We therefore allow C.A. 270 of 1955 with costs and dismiss the suit for pre-emption. No order as to costs in this appeal C.A. 595 of 1960 and C.A. 430 of 1958 are hereby dismissed with costs. A.K. Sarkar J. - HELD THAT - If the property owned is a residential house - and s. 16 will be largely concerned with such properties - the introduction of a stranger into it would lead to an undesirable situation and often and in disaster. These are the advantages arising from a law of pre-emption based on co-ownership. The disadvantages are that the selling co-owner cannot sell it to anyone he likes or for an extortionate price and the purchaser is deprived of owning an undivided share in property. Neither of these seems to us to be a great deprivation. In neither case is the disadvantage suffered great as compared to the advantage accruing to the remaining joint owner. Therefore it seems to us that the restriction imposed on the right to dispose of or acquire properties imposed by the first ground under s. 16 of the Punjab Act is a reasonable restriction. It can be assumed that the residential accommodation provided is for persons working in the shops in the katra. Now clearly in business one has to work and mix with strangers. One has to welcome and associate with completely unknown persons who do not live with the persons doing the business. In order that business premises may cater to the needs of the community for which they exist they have to be open to all. To such premises no question of any advantage flowing from community living arises. They are generally properties of great value. It seems to us that they can therefore be put in a separate class. They do not need the protection of the law of pre-emption in the same way as other properties would do. For these reasons we do not think that s. 16 can be said to violate Art. 14 of the Constitution. In the result we hold that the first third fourth and sixth grounds on which a right of pre-emption is based by s. 16 of the Punjab Act are valid pieces of legislation. We would therefore dismiss this appeal with costs. In the present case the vendor owned sub-division No. 1 in survey-number 285 and the respondents jointly owned sub-division No. 2 in the same survey-number and in that right claimed to pre-empt the sale by the vendor. There is further no controversy that the lands were unalienated land held for agriculture purpose. It is clear from what we have earlier stated that the lands included in one survey-number are contiguous. It is only when an interest in such lands is sold that under the Berar Code a right of pre-emption arises. It would follow inevitably that the result of the exercise of this right would be to effect a consolidation of holdings. Such a consolidation would undoubtedly be of a great benefit to the agriculturist and to the community as a whole. The evils of fragmentation of agricultural holdings in our country are too well known to need detailed discussion. Shortly put it would help an agriculturist greatly if he could extend his holdings thereby making agricultural operation economical and more productive with the resultant benefit to the country. A law which therefore tends towards consolidation has great advantages. The idea behind fixing a ceiling for holding of land is to make an equitable distribution of the available land possible. But this is subject to the idea that each holding should be economical. In other words the law as to ceiling does not discourage consolidation of holdings but is intended only to prevent undue grabbing of lands by persons with the necessary means to do the same. Section 184 by providing that no right of pre-emption would arise on the exchange of lands clearly indicates that the object of the Berar Code in providing for the right of pre-emption is to achieve consolidation of holding. We feel no doubt that the benefits to arise out of consolidation far outweigh the disadvantages caused by the restriction put by it on the right to property guaranteed by Art. 19(1)(f). We therefore come to the conclusion that the provisions in Chapter 14 of the Berar Land Revenue Code creating a right of pre-emption on the sale of land are valid and fully within the Constitution. This appeal therefore must also fail and we would dismiss it with costs. In accordance with the opinion of the majority Civil Appeal No. 270 of 1955 is allowed. C.A. No. 27 of 1955 allowed C.A. No. 430 of 1958 and C.A. No. 595 of 1960 dismissed.
Issues Involved:
1. Constitutionality of pre-emption laws in Madhya Pradesh (Rewa-State area), Delhi, and Maharashtra (Berar-area). 2. Whether pre-emption by vicinage offends Article 19(1)(f) of the Constitution. 3. Reasonableness of restrictions imposed by pre-emption laws. 4. Validity of pre-emption laws under Article 14 of the Constitution. Issue-wise Detailed Analysis: 1. Constitutionality of Pre-emption Laws in Madhya Pradesh (Rewa-State Area) Case: C.A. 207 of 1955 - Relevant Law: Rewa State Pre-emption Act, 1946, Section 10. - Key Points: - Section 10 provides pre-emption rights to co-sharers and owners of adjoining property. - The court examined whether these provisions impose unreasonable restrictions on the right to acquire, hold, and dispose of property under Article 19(1)(f). - Judgment: - The court held that pre-emption by vicinage imposes a restriction on the right guaranteed by Article 19(1)(f). - The law of pre-emption by vicinage was found to be unreasonable and not in the interest of the general public, leading to unnecessary litigation and potentially depressing property prices. - The court struck down the second clause of Section 10 as unconstitutional, while the first clause regarding co-sharers was upheld. 2. Constitutionality of Pre-emption Laws in Delhi Case: C.A. 595 of 1960 - Relevant Law: Punjab Pre-emption Act, 1913, Section 16. - Key Points: - Section 16 provides pre-emption rights based on co-sharership, common structures, and vicinage. - The High Court had conflicting views on the sixth ground (vicinage) and upheld the first, third, and fourth grounds. - Judgment: - The court reaffirmed that pre-emption by vicinage is an unreasonable restriction under Article 19(1)(f). - However, pre-emption rights based on co-sharership, common staircases, and common entrances were upheld as reasonable restrictions. - The court found that these provisions promote public order, domestic comfort, and prevent the introduction of strangers into closely-knit communities. 3. Constitutionality of Pre-emption Laws in Maharashtra (Berar-area) Case: C.A. 430 of 1958 - Relevant Law: Berar Land Revenue Code, 1928, Chapter XIV. - Key Points: - Chapter XIV provides pre-emption rights for unalienated agricultural lands within a survey number. - The High Court upheld these provisions as constitutional. - Judgment: - The court found that the pre-emption rights under the Berar Land Revenue Code are limited in scope and primarily aim at consolidating agricultural holdings. - The court held that these provisions are reasonable restrictions under Article 19(1)(f) as they prevent fragmentation of agricultural lands, which is beneficial for the community. 4. Validity under Article 14 of the Constitution Case: C.A. 595 of 1960 - Key Points: - The appellant argued that Section 16 of the Punjab Act violates Article 14 due to exemptions for certain properties like shops and katras. - Judgment: - The court held that agricultural properties and urban properties form distinct classes, justifying different treatments. - The exemptions for shops and katras were found to be reasonable as these properties are generally business premises and do not require the same protection as residential properties. - The court concluded that Section 16 does not violate Article 14. Conclusion: - C.A. 270 of 1955 (Rewa Act): Appeal allowed, pre-emption by vicinage struck down. - C.A. 595 of 1960 (Punjab Act): Appeal dismissed, pre-emption based on co-sharership and common structures upheld. - C.A. 430 of 1958 (Berar Code): Appeal dismissed, pre-emption for agricultural consolidation upheld. The judgments collectively reinforce that while pre-emption laws can impose restrictions on property rights, such restrictions must be reasonable, justified by public interest, and consistent with constitutional guarantees.
|