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2019 (8) TMI 1899 - SC - Indian LawsFamily settlement - Prohibition against fragmentation of the site - Suit for specific performance directing first Defendant to execute sale deed in respect of one-third share to the Plaintiff - it is contended that the family settlement was forged and fabricated - enforceable contract or not - impact of absence of written concurrence by brothers for sale. Whether there was a family settlement? - HELD 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 High Court was right in, without even a plea, holding that the family settlement is vague and unenforceable and void? - HELD THAT:- 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. It is 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, the finding by the High Court that contract is vague cannot be sustained. Whether an offer was made by the first Defendant to the Plaintiff before the sale of the property to the second Defendant? - HELD THAT:- 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 - 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 could not exercise discretion Under Section 20 of the Specific Relief Act, 1963 as the contract is not specifically enforceable? - HELD 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, first preference was given to the Plaintiff - 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 - the Appellant would not be justified in invoking the principle underlying the right of preemption in this case. What is the impact of absence of written concurrence by brothers for sale? - HELD THAT:- 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 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. What is the effect of the prohibition against fragmentation of property in question under the Capital of Punjab (Development and Regulation) Act, 1952? - HELD 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, cattle shed and garage and also includes any building erected on any land transferred by the Central Government - 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. 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. The Appellant cannot be permitted to impugn the transaction on the said ground - the contentions of the Appellant are liable to be rejected - appeal dismissed.
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