TMI Blog1966 (9) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... ed their award on which a final decree was passed on March 15, 1941 in the partition suit. Under the award, two of the four blocks, A, B, C D, into which the properties were divided by the arbitrators, namely, blocks A and C, were allotted to Tulshidas and the remaining two blocks, B and D were allotted to Kishorilal. Two common passages marked as X and Y and a common drain Z were kept joint between the parties for their use. In the award there was a clause to the following effect : We further find and report with the consent of and approval of the parties that any party in case of disposing or transferring any portion of his share, shall offer preference to the other party, that is each party shall have the right of pre-emption between each other. Thereafter, on August 20, 1941 Tulshidas sold his A block to one Nagendra Nath Ghosh. This was done after Kishorilal s refusal to pre-empt the same in spite of Tulshidas s offer to him in terms of he pre-emption clause. On April 22, 1942, Kishorilal sold, by the Kobala (Ex. 1), his two blocks, B and D to Rati Raman Mukherjee and others. On June 21, 1946, the Mukherjees in their turn sold the two blocks B D to the plaintiffs b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fic performance of a contract may be obtained by- (a)...................................... (b) the representative in interest, or the principal, of any party thereto : provided that, where the learning, skill, solvency or any personal quality of such party is a material ingredient in the contract, or where the contract provides that his interest shall not be assigned, his representative in interest or his principal shall not be entitled to specific performance of the contract, unless where his part thereof has already been performed Section 27(b) of the Act is to the following effect 27. Except as otherwise provided by this Chapter, specific performance of a contract may be enforced against- (a)...................................... (b) any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of the original contract ; Reference should also be made to ss. 37 and 40 of the Indian Contract Act which are to the following effect 37. The parties to a contract must either perform, or offer to perform, their respective promises, unless such performanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d pit which shall have to be maintained as such for ever. With the consent of the parties we find and award that the parties shall complete construction of new structures or demolition of any existing structures, in terms of this award within one year from this date, that is 16th day of December, 1940. During this period of one year parties shall remain entitled to use and enjoy the entire property as allotted, but immediately after the expiry of the said period of one year plaintiff shall have every right to close or otherwise obstruct the defendant from enjoyment of that portion of the structure privy or land exclusively allotted to him and the defendant shall have the same right as against the plaintiff in respect of his share of structures and land exclusively allotted to his share in terms of the award. It is obvious that in these clauses the expression parties cannot be restricted to the original parties to the contract but must include the legal representatives and assignees of the original parties. There is hence no reason why the same expression should be given a restricted meaning in the preemption clause which is the subjectmatter of interpretation in the present a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or gotten out of the lands so sold and which would be shipped for sale, to George Silvertop, his heirs, executors, administrators or assigns. The covenant was enforced in 1883 at the instance of an assignee from the legal representatives of George Silvertop against the executors of the Earl. The Lord Chancellor (Earl of Silborne) overruled the plea that the covenant offended the rule against perpetuities on the ground (1) (1863) 10 H.L.C. 367; 11 E.R. 1068. (2) [1910] 1 Ch. 12. (3) (1883) Challies Law of Real Property, 3rd. Ed., App. V., p. 440.that, though the covenant had relation to land, it did not amount to a reservation of any interest in land. In English law a contract for purchase of real property is regarded as creating an equitable interest, and if, in the absence of a time limit, it is possible that the option for repurchase might be exercised beyond the prescribed period fixed by the perpetuity rule, the covenant is regarded as altogether void. It has therefore been held that a covenant for pre-emption unlimited in point of time is bad as being obnoxious to the rule against perpetuities. The point was settled by the Court of appeal in London and South Western ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in another, the covenant giving the option must give the other an interest in land. In the case of an agreement for sale entered into prior to the passing of the Transfer of Property Act, it was the accepted doctrine in India that the agreement created an interest in the land itself in favour of the purchaser. For instance, in Fati Chand Sahu v. Lilambar Sing Das(1) a suit for specific performance of a contract for sale was dismissed on the ground that the agreement, which was held to create an interest in the land, was not registered under s. 17, cl. (2) of the Indian Registration Act of 1866. Following this principle, Markby J. in Tripoota Soonduree v. Juggur Nath Dutt(2) expressed the opinion that a covenant for pre-emption contained in a deed of partition, which was unlimited in point of time, was not enforceable in law. The same view was taken by Baker J. in Allibhai Mahomed Akuji v. Dada Allis Isaac(3) where the option of purchase was contained in a contract entered into before the passing of the Tranfer of Property Act. The decision of the Judicial Committee in Maharaj Bahadur Singh v. Bal Chanad(4) was also a decision relating to a contract of the year 1872. In that ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansferee of the property affected thereby, but not against a transferee for consideration and without notice of the right or obligation nor against such property in his hands. The second paragraph of s. 40 taken with the illustration establishes two propositions : (1) that a contract for sale does not create any interest in the land, but is annexed to the ownership of the land and (2) that the obligation can be enforced against a subsequent gratuitous transferee from the vendor or a transferee for value but with notice. Section 14 of the Act states as follows : 14. No transfer of property can operate to create an interest which is to take effect after the lifetime of one or more persons living at the date of such transfer, and the minority of some person who shall be in existence at the expiration of that period, and to whom, if he attains full age, the interest created is to belong. Reading s. 14 along with s. 54 of the Transfer of Property Act its manifest that a mere contract for sale of immovable property does not create any interest in the immovable property and it therefore follows that the rule of perpetuity cannot be applied to a covenant of pre-emption even tho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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