Bishan Singh and Others vs Khazan Singh and Another

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 255 of 1954

Decision Date: 20 May 1958

Coram: Natwarlal H. Bhagwati, S.K. Das, Subba Rao

In the matter titled Bishan Singh and Others versus Khazan Singh and Another, the Supreme Court of India delivered its judgment on 20 May 1958. The case was heard before a bench comprising Justice Natwarlal H. Bhagwati, Justice S. K. Das and Justice K. Subbarao, with Chief Justice Sudhi Ranjan also sitting. The parties were identified as the petitioners, Bishan Singh and others, and the respondents, Khazan Singh and another individual. The decision is reported in the 1958 AIR 838 and the 1959 SCR 878, and it concerned the interpretation of the Punjab Pre‑emptor Act of 1913, particularly sections 17 and 28, relating to the nature of a pre‑emptor’s right, the effect of a pre‑emptor filing suit and obtaining a decree, the situation of a second pre‑emptor of equal degree filing a suit, the requirement of depositing purchase money and obtaining possession, and the applicability of the doctrine of lis pendens.

The factual backdrop involved the sale of certain village land on which the appellants, Bishan Singh and his co‑plaintiffs, instituted a suit for pre‑emption. The trial court thereafter passed a compromise decree that permitted the appellants to exercise their pre‑emptive right provided they deposited the purchase price by a stipulated date. The appellants complied by paying the required amount and consequently obtained possession of the land. Before the appellants could complete the deposit of the purchase sum, the respondents, who were also pre‑emptors of the same degree, filed a separate suit asserting their own pre‑emptive claim. The appellants argued that when both suits are pending at the time a decree is rendered, the land may be divided between the two equal pre‑emptors; however, they contended that because they had already secured a decree and paid the purchase price, they stood in the shoes of the original sellers and the respondents could succeed only by proving a superior pre‑emptive right. The respondents countered that under section 17 of the Punjab Pre‑emptor Act they possessed a statutory right to share the land with the appellants and that, having been substituted in place of the vendees pending the litigation, the appellants were subject to the doctrine of lis pendens and therefore could not claim a higher right than the original vendees. The Court held that the respondents’ suit could not prevail because the respondents did not possess a superior pre‑emptive right over the appellants, who, by paying the purchase money under their decree, had become the substitutes for the vendees. The Court explained that a pre‑emptor enjoys two distinct rights: an inherent primary right to be offered a thing about to be sold, and a secondary remedial right to step into the position of the original vendee. The secondary right operates as a right of substitution, as affirmed in Dhani Nath v. Budhu and Gobind Dayal v. Inayatullah. In a pre‑emptive suit, the plaintiff must demonstrate that his right is superior to that of the vendee and that it remains intact at the time he exercises it; this right is extinguished if, before exercise, another individual with an equal or superior right is substituted for the vendee. The Punjab Pre‑emptor Act delineates the pre‑emptive right and its enforcement procedure without expanding its scope or altering its incidentals.

In considering the scope of the statutory provision, the Court observed that Section 28 of the Act does not prevent a court from granting a decree of pre‑emption even when the related suits have not been joined together and one of those suits has already been decreed separately. The doctrine of lis pendens, the Court explained, applies only to a transfer pendente lite and therefore cannot affect a right that already existed before the transfer. Consequently, if a sale is effected as a transfer that acknowledges a pre‑existing and subsisting pre‑emption right, the doctrine of lis pendens does not intervene, because the transfer does not create a fresh pendente lite right. However, if the pre‑existing right becomes unenforceable because of limitation or for any other reason, a transfer that is ostensibly made in recognition of that right would in reality create a new pendente lite right. The Court found that the appellants’ pre‑emption right was still subsisting and was not barred by limitation at the time of the transfer in their favour, since they had already instituted a suit, obtained a decree and the coercive process under Section 112‑880 was still operative. Accordingly, the appellants were not subject to the doctrine of lis pendens and they acquired an indefeasible right to the land when they took possession after depositing the purchase money in court. The Court approved the authorities of Mool Chand v. Ganga Jal, (1930) I.L.R. 11 Lah. 258; Mt. Sant Kaor v. Teja Singh, I.L.R. [1946] Lah. 467; Mohammad Sadiq v. Ghasi Ram, A.I.R. 1946 Lah. 322; and Wazir Ali Khan v. Zahir Ahmad Khan, A.I.R. 1949 East Punj. 193, while disapproving Kundan Lal v. Amar Singh, A.I.R. 1927 All. 664. The Court further explained that a pre‑emption right becomes effectively exercised only when the pre‑emptor is substituted in place of the original vendee. A conditional decree that grants possession to the pre‑emptor only upon payment of a specified sum within a prescribed period, and that provides for dismissal of the suit if the condition is not satisfied, does not create that substitution before the condition is fulfilled. Substitution occurs only when the decree holder complies with the condition and actually takes possession of the land, as affirmed in Deonandan Prashad Singh v. Ramdhari Choudhyi, (1916) L.R. 44 I.A. 80. The judgment then set out the procedural posture of the appeal: it was a civil appeal (No. 255 of 1954) filed by special leave against the judgment and decree dated 29 April 1953 of the former Pepsu High Court in R.S. A. Nos. 57 and 130 of 1952, which arose from the judgment and decree dated 8 March 1952 of the Court of Additional District Judge, Faridkot, in Civil Appeal No. 10 of 1952, itself being against the judgment and decree dated 4 December 1951 of the Sub‑Judge, 11 Class, Faridkot, in File No. 13 of 1951. Counsel for the appellant comprised Jagan Nath Kaushal and K.L. Mehta, while counsel for respondents 1 to 3 were Kapur Chand Puri and Tarachand Brijmohan Lal. The appeal was decided on 20 May 1958, and the judgment was delivered by Justice Subba Rao, who noted that the present appeal by special leave challenged the decision of the High Court of Patiala and East Punjab.

Punjab States Union raised a noteworthy question concerning the law of pre‑emption, and the material facts were not contested. The dispute concerned a parcel of land measuring one hundred seventy‑nine kanals and two marlas, located in the village of Wanderjatana. On 26 August 1949, defendants numbered three through seven transferred ownership of that land to defendants one and two for a purchase price of thirty‑seven thousand six hundred eleven rupees. A year later, on 26 August 1950, defendants eight through eleven instituted Suit No 231 of 1950 before the Subordinate Judge, 11 Class, at Faridkot, seeking to pre‑empt the said sale on the ground that they possessed a right of pre‑emption. On 6 January 1951, the purchasers – defendants one and two – and the plaintiffs in the earlier suit – defendants eight through eleven – entered into a compromise. Under the terms of that compromise the purchasers acknowledged receipt of one thousand seven hundred rupees from defendants eight through eleven and the latter agreed to pay the remaining thirty‑five thousand nine hundred eleven rupees on 27 April 1951. Moreover, the parties agreed that once the balance was paid, the plaintiffs would obtain possession of the land through a court order. Because the amount to be paid exceeded the pecuniary jurisdiction of the Subordinate Judge, the parties filed the compromise deed in the Court of the District Judge, which subsequently issued a decree on 23 January 1951. The decree stipulated that should defendants eight through eleven fail to pay the balance by 27 April 1951, the suit would be dismissed; conversely, if the balance were paid on that date, the purchasers were required to deliver possession of the disputed land to the plaintiffs. Defendants eight through eleven complied by depositing the balance of thirty‑five thousand nine hundred eleven rupees on 23 April 1951, and they thereafter took possession of the property on 17 May 1951.

Before the plaintiffs effected the deposit under the compromise decree, respondents claiming ownership of land in the same patti instituted Suit No 13 of 1951 before the Subordinate Judge, 11 Class, Faridkot, in order to enforce their alleged right of pre‑emption. In that suit the original vendors were impleaded as defendants three through seven, the purchasers as defendants one and two, and the plaintiffs from Suit No 231 of 1950 were joined as defendants eight through eleven. Defendants eight through eleven mounted a defence asserting that the plaintiffs possessed no pre‑emptive right superior to theirs, that the suit was barred by the limitation period, and that the entire purchase price had been determined in good faith and fully paid. After hearing the arguments, the learned Subordinate Judge resolved all the issues in favour of defendants eight through eleven and dismissed the suit. In his reasoning the judge held that the defendants, by securing a decree for pre‑emption before the rival claimants filed their suit, had become vendees by operation of the court, and consequently the plaintiffs could not succeed unless they demonstrated a superior pre‑emptive right.

The Court observed that the decree granting pre‑emptive rights had been obtained before the rival claimants filed their suit, which caused the defendants numbered eight to eleven to become vendees by operation of the Court. Consequently, the plaintiffs could not succeed in their claim unless they could demonstrate a superior pre‑emptive right. The plaintiffs appealed this decree to the Additional District Judge at Faridkot. That Judge held that both the plaintiffs and defendants eight to eleven possessed equal pre‑emptive rights and therefore should share the purchase price in the ratio of three‑sevenths to four‑sevenths, each paying the proportionate share of the consideration. Addressing the principal issue, the Judge concluded that defendants eight to eleven had not exercised their pre‑emptive right at the time the present suit was instituted because, on the date the suit was filed, they had not yet deposited the purchase money with the Court. Both parties subsequently filed second appeals challenging the District Judge’s order before the High Court of Patiala. The High Court affirmed the portion of the decree that recognized the plaintiffs’ entitlement to a share in the property, but it remanded the matter back to the District Judge for further findings on two specific points: (i) the exact amount paid by defendants eight to eleven to the original vendees and whether such payment was made in good faith; and (ii) whether the dispute fell within section seventeen‑C, clause (e) of the Punjab Pre‑emption Act, hereinafter referred to as “the Act.” The High Court declined to certify the case as fit for appeal to the Supreme Court, prompting defendants eight to eleven to seek special leave to appeal before this Court.

Before the Supreme Court, counsel for the appellants advanced two primary arguments. First, they contended that section twenty‑eight of the Pre‑emption Act permits division of property between equal pre‑emptors under section seventeen of the Act only when both suits are pending before the Court at the time the decree is passed. Second, they maintained that the appellants had exercised their pre‑emptive right by obtaining a decree, or at the very least by depositing the money payable under the decree, thereby substituting themselves for the original vendees; consequently, the plaintiffs could succeed only by proving a superior right to theirs. Counsel for the respondents rebutted these submissions by asserting that the plaintiffs, as pre‑emptors of equal standing, possessed a statutory right under section seventeen of the Act to share the land with the appellants. Moreover, because the appellants had been substituted for the original vendees while the suit was pending, they were subject to the doctrine of lis pendens and therefore could not claim rights superior to those held by the original vendees at the time the suit was filed. The Court noted that, before providing a satisfactory answer to the questions raised, it would be appropriate to set out the material incidents relating to the right of pre‑emption.

In order to identify and explain the essential elements of the right of pre‑emption, the Court first set out the applicable legal principles. A clear and concise exposition of the law was provided by Justice Plowden in the case of Dhani Nath v. Budhu. He observed that a preferential entitlement to acquire land belonging to another person, which arises when the owner proposes a transfer, does not constitute a direct right in the land itself. Rather, it is a right to acquire something that is alienated, not a right to the alienated thing. He explained that the pre‑emptor’s primary right consists of the entitlement to be offered the thing that is about to be sold; this right to the offer is distinct from a right to the thing itself. The secondary, or remedial, right arises when the sale proceeds without extending the proper offer to the pre‑emptor; in such a situation the pre‑emptor may, if he so chooses, acquire the property notwithstanding the sale that ignored his preferential claim. This passage therefore indicates that the pre‑emptor enjoys two distinct rights: first, an inherent or primary right to be offered the property before it is transferred, and second, a secondary right that allows him to follow the transaction and acquire the property despite the sale. Justice Mahmood, in his celebrated judgment in Gobind Dayal v. Inayatullah, further clarified the scope of the secondary right. He described it as a right of substitution that enables the pre‑emptor, by virtue of a legal incident attached to the sale, to step into the position of the original vendee with respect to all rights and obligations arising from the sale, effectively erasing the vendee’s name from the deed and inserting the pre‑emptor’s name in its place. This doctrine of substitution, as articulated by the learned judge, has been accepted and applied in later decisions. The general law of pre‑emption, however, does not permit a claimant to seek a share of the property when rival claimants exist; rather, the right is understood to be an entitlement to acquire the entire property in preference to others, as affirmed in Mool Chand v. Ganga Jal. Consequently, a plaintiff must demonstrate not merely that his pre‑emptive right is equal to that of the original vendee, but that it is superior to the vendee’s right. Established case law requires that this superior right exist at the moment the pre‑emptor exercises it, and that it is extinguished if, by that time, another individual with an equal or greater right has been substituted for the original vendee. Courts have historically treated this right with limited enthusiasm, likely because it can hinder the owner’s freedom to alienate his property. Accordingly, the vendor and the vendee are permitted to take lawful steps to prevent the accrual of the pre‑emptive right.

In this case, the Court explained that the right of pre‑emption may be exercised only by lawful means and that the vendee can defeat the right by selling the property to another pre‑emptor who possesses a preferential or equal right. The Court then summarized the nature of the right as follows: first, the right of pre‑emption is not a right to the thing that has been sold but a right to the offer of a thing that is about to be sold, as stated in the authority of (1885) I.L. R. 7 All. 775, 809. Second, the authority of (1930) I.L.R. 11 Lah. 258, 273 identifies this right as the primary or inherent right. Third, the pre‑emptor also possesses a secondary or remedial right that follows the thing sold. Fourth, the right is one of substitution rather than a right of re‑purchase; consequently the pre‑emptor steps into the position of the original vendee and takes the entire bargain. Fifth, the right enables the pre‑emptor to acquire the whole of the property that is sold and not merely a share of it. Sixth, because preference is the essential element of the right, the plaintiff must demonstrate a superior right over that of the vendee or any person who has been substituted in the vendee’s place. Seventh, the Court noted that the right is a very weak right and can be defeated by any legitimate method, for example when the vendee permits a claimant possessing a superior or equal right to be substituted in his place. The Court then turned to the question of whether the statutory provisions enlarge or modify this common law right. The relevant provisions of the Act, as read by the Court, are as follows: Section 4 defines the right of pre‑emption as the right of a person to acquire agricultural land, village immovable property or urban immovable property in preference to other persons, and it arises only in cases of sale or of foreclosure of the right to redeem such property. Section 13 provides that when a right of pre‑emption vests in any class or group of persons, the right may be exercised jointly by all members, or, if not exercised jointly, by any two or more members jointly, and if not exercised by two or more jointly, then by the members severally. Section 17 states that where several pre‑emptors are found by the Court to be equally entitled to the right, the right shall be exercised in accordance with the nature of their claim: if they claim as co‑sharers, the property is divided in proportion to the shares they already hold; if they claim as heirs, the division is in proportion to the shares they would have inherited on the vendor’s death without other heirs; and if they claim as owners of an estate or recognised subdivision thereof, the division is in proportion to the shares they would take if the land were common land in that estate or subdivision.

Section 17 continues with a provision that, if the pre‑emptors claim as occupancy tenants, they must share the pre‑emptive right in proportion to the respective areas each holds under an occupancy right; and, in any other situation, such pre‑emptors share the right equally. Section 19 then provides that whenever a person intends to sell agricultural land, village immovable property, or urban immovable property, or wishes to foreclose the right to redeem such village or urban immovable property, and there exist persons who hold a right of pre‑emption, the seller may give notice to all of those persons indicating the price at which he is prepared to sell the land or property, or the amount due in the case of a mortgage. Such notice must be issued through any court that has jurisdiction over the area where the land or property, or any portion of it, is situated. The notice is considered duly given if it is also displayed on the chaupal or any other public place in the village, town, or locality where the land or property is located. Section 20 stipulates that a pre‑emptor’s right is extinguished unless, within three months of the date on which the notice under Section 19 is properly given, or within any further period not exceeding one year that the court may permit, the pre‑emptor files with the court a notice for service on the vendor or mortgagee declaring his intention to enforce his right of pre‑emption. That notice must state whether the pre‑emptor accepts the price or mortgage amount as correct, and if he does not, the sum he is prepared to pay. When the court is satisfied that this notice has been properly served on the vendor or mortgagee, the proceedings may be instituted. Section 28 deals with situations where more than one suit arises from the same sale or foreclosure. In such cases, the plaintiff in each suit must be joined as a defendant in every other suit, and the court, in each decree, must specify the order in which each claimant is entitled to exercise his right.

The Act, by defining the right and laying down a procedure for its enforcement, does not expand the content of the right nor does it alter the incidents attached to that right. Section 4 incorporates the pre‑existing law by defining the right as a person’s entitlement to acquire land preferentially over others in respect of sales of agricultural lands. Section 13 cannot be interpreted, as suggested, as a statutory recognition of a right that gives pre‑emptors of equal degree the ability to exercise their rights piecemeal limited to their individual shares in the land. Rather, Section 13 confers on the group of persons in whom the right of pre‑emption vests the authority to exercise that right either jointly or severally; that is, the right may be exercised by the entire group collectively or by any single member of the group acting alone.

The Court explained that a pre‑emptor could enforce the right only in relation to the whole sale. Section 17 dealt with how the pre‑empted land should be divided when the Court determined that more than one pre‑emptor held an equal claim to the pre‑emptive right. However, the provision applied solely in two circumstances: first, when the right had not yet been exercised, and second, when the Court found the pre‑emptors to be equally entitled to exercise it. The provision did not give any right to, or place any liability on, a person who had already exercised the pre‑emptive right and who, by lawful substitution, had taken the position of the original vendee. The Court referred to the authorities in Mool Chand v. Ganga Jal (1930) I.L.R. 11 Lah. 258 at page 274 and Lokha Singh v. Sermukh Singh A.I.R. 1952 Punj. 206‑207 for this principle.

Sections 19 and 20 laid down the procedural steps for exercising the primary pre‑emptive right. Section 28 gave the Court the authority to join two or more suits that arose out of the same sale so that the decree could contain appropriate directions about the sequence in which each claimant could exercise the right. The purpose of this provision was to avoid conflicting decisions and to finally settle the rights of all claimants. The Court held that these provisions did not change the essential nature of the pre‑emptive right that existed before the enactment of the Act. Instead, they offered a convenient and effective mechanism for handling multiple suits concerning the same transaction, for preventing inconsistent rulings, for fixing the order of priority for exercising the rights, and for regulating how the pre‑empted land would be distributed among rival pre‑emptors.

The Court stressed that the provisions did not allow a pre‑emptor to assert his right without first establishing his superiority over the vendee or over any person who had been lawfully substituted in the vendee’s place. Likewise, the provisions could not stop a vendor or a vendee, acting lawfully, from defeating a pre‑emptor’s claim by substituting another pre‑emptor who possessed a superior or equal right to that of the plaintiff. The Court rejected the argument of the appellants’ counsel that Section 28 barred the Court from granting a decree for pre‑emption when the two suits were not joined and one suit had been decreed separately. While Section 28 provided a helpful procedure, it could not alter the substantive rights of the parties.

The Court found no reason to conclude that, if the plaintiffs possessed a valid pre‑emptive right, they would lose it merely because the appellants obtained a decree before the plaintiffs filed their suit, unless the decree itself was deemed to substitute the appellants for the original vendees. Consequently, the Court held that the plaintiffs’ suit was not barred by any provision of the Act. The remaining issue, therefore, was whether the appellants, having obtained a consent decree on 23 January 1951 in their suit, could lawfully defeat the plaintiffs’ claim.

In this case the appellants had obtained a consent decree on January 23, 1951 against the original vendees, had paid the sum specified in that decree, had taken possession of the property and, by those acts, had been substituted in place of the original vendees. The question that arose was whether, after that substitution, the appellants could validly defeat the rights of the plaintiffs, who, because of the substitution, were left only as pre‑emptors of equal standing with the appellants and therefore no longer possessed any superior right. Counsel for the respondents argued that the appellants were subject to the doctrine of lis pendens, so that the substitution effected on April 23, 1951 could not impair the plaintiffs’ pre‑emptive right which they had exercised by filing their suit on February 15, 1951. It is settled authority in Punjab that the rule of lis pendens applies to a suit to enforce a pre‑emptive right in the same manner as it applies to any other suit. The principle underlying that doctrine is explained in the leading case of Bellami v. Sabine, where the Lord Chancellor observed that while a suit is pending, neither party may alienate the property in a way that would affect the opponent. In other words, the law prevents litigants, during the pendency of the suit, from transferring their rights in the disputed property in order to prejudice the other side. As a corollary, the rule does not affect a right that existed before the suit was filed. The limitations of this rule were examined by a Full Bench of the Lahore High Court in Mool Chand v. Ganga Jal. In that case, during the pendency of a pre‑emptive suit, the vendee sold the property that was the subject of the litigation to a person who held a pre‑emptive right equal to that of the plaintiff, thereby recognising that person’s right. The resale was made before the limitation period for instituting a pre‑emptive suit with respect to the original sale had expired. The Full Bench held that the doctrine of lis pendens applied to pre‑emptive suits; however, it concluded that the resale in that case did not conflict with the doctrine because the vendee was merely exercising his pre‑existing pre‑emptive right, and therefore the sale did not offend the rule. Bhide J. explained this reasoning at page 272, stating that the vendee “takes the bargain in the assertion of his pre‑existing pre‑emptive right, and hence the sale does not offend against the doctrine of lis pendens.” A later Full Bench of the Lahore High Court adopted the same doctrine in Mt. Sant Kaur v. Teja Singh. In that matter, while a pre‑emptive suit was pending, the vendee sold the land that he had purchased to a person in recognition of that person’s superior pre‑emptive right. The second purchaser was later added as a defendant to the suit. At the time of his purchase, his right to enforce the pre‑emptive claim was barred by limitation. The High Court observed that this circumstance altered the application of the rule of lis pendens and quoted at page 145 that where the subsequent vendee still retains the ability to compel the original vendee, a surrender made out of court in recognition of that right cannot be regarded as a voluntary transfer that would attract the rule. The appropriate view, the Court held, is to regard the subsequent transferee as simply being substituted for the original vendee in the original contract of sale, allowing him to defend the suit in his own right.

In this case, the Court observed that the person who was brought in as a defendant had bought the land at a time when his own superior right of pre‑emption was already barred by the limitation period. The High Court held that this circumstance altered the way the rule of lis pendens was to be applied. The Court then articulated a clear distinction between two categories of cases, as recorded on page 145. It stated: “Where the subsequent vendee has still the means of coercing, by means of legal action, the original vendee into surrendering the bargain in his favour, a surrender as a result of a private treaty, and out of Court, in recognition of the right to compel such surrender by means of a suit cannot properly be regarded as a voluntary transfer so as to attract the application of the rule of lis pendens. The correct way to look at the matter, in a case of this kind, is to regard the subsequent transferee as having simply been substituted for the vendee in the original bargain of sale. He can defend the suit on all the pleas which he could have taken had the sale been initially in his own favour.” However, the Court added: “However, where the subsequent transferee has lost the means of making use of the coercive machinery of the law to compel the vendee to surrender the original bargain to him, a re‑transfer of the property in the former’s favour cannot be looked upon as anything more than a voluntary transfer in the former’s favour of such title as he had himself acquired under the original sale. Such transfer has not the effect of substituting the subsequent transferee in place of the vendee in the original bargain. Such a transferee takes the property only subject to the result of the suit. Even if he is impleaded as a defendant in such suit, he cannot be regarded as anything more than a representative‑in‑interest of the original vendee, having no right to defend the suit except on the pleas that were open to such vendee himself.” Consequently, this decision introduces a new element in deciding whether the doctrine of lis pendens applies to a suit for enforcing a pre‑emptive right. If the pre‑emptor’s right remains subsisting and enforceable—whether by coercive process or otherwise—his purchase is treated as an exercise of that pre‑existing right and therefore does not fall foul of the doctrine of lis pendens. Conversely, if the pre‑emptor purchases the land after his superior or equal right to enforce pre‑emption has been extinguished by limitation, he is regarded merely as a representative‑in‑interest of the original vendee, effectively a non‑existent right. The same principle was applied by another Full Bench of the Lahore High Court in Mohammad Sadiq v.

In the decision reported as Ghasi Ram (1), the Court observed that before the filing of a suit for pre‑emptive relief, the vendee had executed an agreement to sell the subject land to another prospective pre‑emptor who possessed an equal degree of pre‑emptive right. After the suit was instituted, the parties acted upon that agreement and a sale deed was executed and subsequently registered in favour of the latter purchaser, but this transaction occurred after the limitation period for bringing a suit to enforce the purchaser’s own pre‑emptive right had already expired. The Full Bench held that the doctrine of lis pendens applied to the circumstances of that case. The reasoning underlying this conclusion was the same as that articulated in Mt. Sant Kaur v. Te a Singh (2), where a right that had become barred by limitation was treated as a non‑existent right. The same principle was reaffirmed by another Full Bench of the East Punjab High Court in Wazir Ali Khan v. Zahir Ahmad Khan (3). At page 195 of that report the learned judges observed that “It is settled law that unless a transfer pendente lite can be held to be a transfer in recognition of a subsisting pre‑emptive right, the rule of lis pendens applies and the transferee takes the property subject to the result of the suit during the pendency whereof it took place.” The Allahabad High Court, however, had applied the doctrine of lis pendens to a suit for pre‑emption without respecting the inherent limitation that the doctrine cannot affect a pre‑existing right, as noted in Kundan Lal v. Amar Singh (1). The present Court accepted the view expressed by the Lahore High Court and the East Punjab High Court in preference to that of the Allahabad High Court. In view of the four Full Bench decisions—three from the Lahore High Court and one from the East Punjab High Court—further consideration of the matter was deemed unnecessary.

The settled law in Punjab may be summarised as follows: the doctrine of lis pendens is applicable only to a transfer pendente lite and it cannot prejudice a pre‑existing right. Where a sale constitutes a transfer made in recognition of a subsisting pre‑emptive right, that transfer is not affected by the doctrine because it does not create a new right that is pending litigation; however, if the pre‑existing right has become unenforceable because of limitation or any other reason, the transfer, though apparently made in acknowledgment of that right, effectively creates a new right pendente lite and is therefore subject to the doctrine. In the present matter it was contended that the appellants’ right to enforce their pre‑emptive claim was already barred by limitation at the time the transfer to them occurred, and consequently the transfer should be subject to lis pendens. That argument disregards the admitted facts of the case. The material facts may be recapitulated: defendants three to seven sold the disputed land to defendants one and two on 26 August 1949, and the sale deed was registered on 15 February 1950. The appellants then instituted their suit to pre‑empt the said sale on 26 August 1950, obtained a compromise decree on 23 January 1951, deposited the balance of the consideration on 23 April 1951 and took possession of the land on 17 May 1951. These facts demonstrate that the appellants’ pre‑emptive right remained subsisting at the time they completed the payment and entered into possession, for they not only filed the suit but also secured a decree and complied with its terms within the prescribed period. Consequently, the doctrine of lis pendens did not operate to defeat their indefeasible right to the suit land.

In this matter, the appellants commenced a suit to enforce their pre‑emptive right on 26 August 1950. The suit resulted in a compromise decree being issued on 23 January 1951. Subsequent to that decree, the appellants paid the outstanding balance of the purchase price on 23 April 1951 and, on 17 May 1951, they took actual possession of the disputed land. From these chronological facts it is clear that the appellants’ pre‑emptive right was still alive at the moment they tendered the balance and entered into possession. They not only filed the suit but also secured a decree and fulfilled the conditions imposed by that decree within the statutory time‑frame. Consequently, the coercive proceedings were still operative at the time of possession. Because the pre‑emptive right continued to exist, the appellants could not be said to be caught by the doctrine of lis pendens, as noted in A.I.R. 1927 All. 664 VI. Accordingly, the appellants acquired an indefeasible title to the suit land at the point when they entered possession pursuant to the decree after depositing the balance due to the vendors in Court.

The Court also considered a further submission made on behalf of the appellants. That submission contended that the compromise decree, which recognized the appellants’ pre‑emptive right, conferred upon them full ownership of the property and therefore extinguished any comparable right of pre‑emption that the plaintiffs might have claimed. The Court explained that a pre‑emptive right can be effectively exercised only when the pre‑emptor is substituted for the original vendee in the underlying contract of sale. A conditional decree of the type before the Court, which allows the pre‑emptor to obtain possession only after paying a specified sum within a prescribed period and which provides for dismissal of the suit if the condition is not satisfied, does not effect such substitution before the condition is fulfilled. Substitution of the decree holder for the original vendee occurs only after the decree‑holder complies with the stipulated condition and actually takes possession. The Court referred to the Judicial Committee’s decision in Deonandan Prashad Singh v. Ramdhari Chowdhri (1) for guidance. In that case, a Sub‑Judge had issued a pre‑emptive decree that gave the pre‑emptors possession from 1900 to 1904; the decree was later reversed, the original purchaser regained possession, and the Privy Council in 1908 upheld the pre‑emptors’ right to purchase at a higher price. The pre‑emptors paid the additional amount in 1909 and regained possession. The issue then was whether the pre‑emptors were entitled to mesne profits for the interval from 1904 to 1909, i.e., while the judgment of the first appellate Court was still operative. The Privy Council held that during that interval the pre‑emptors were not entitled to mesne profits, underscoring that ownership and the attendant rights do not vest until the decree’s conditions are satisfied and possession is effected.

In the judgment, the Court explained that the reason for denying mesne profits was set out on page 84, where it was observed that a plaintiff obtains possession of the property only when the purchase money is paid on the date specified in the decree, and that until that moment the original purchaser continues to hold possession and is therefore entitled to the rents and profits of the land.

The Court further referred to the decision in Deokinandan v. Sri Ram, noting that the opinion of Mahmud J., whose authority was widely accepted, stated that the individuals possessing a pre‑emptive right become owners of the property only after the terms of the decree are fully satisfied and enforced; ownership does not arise merely from the date of sale, even if the suit is successful, and the actual substitution of the pre‑emptor as owner occurs only when possession is granted under the decree.

This authoritative judgment was described as a clear statement of the principle that a pre‑emptor does not replace the original vendee until all conditions specified in the decree have been fulfilled.

Consequently, the Court could not accept the argument presented by counsel that the compromise decree alone perfected the right of the client in a way that infringed upon the rights of the plaintiffs.

However, the Court observed that the appellants had complied with the conditions laid down in the compromise decree, and as a result they were deemed to have been substituted in the place of the original vendee before the present suit reached a final disposition.

In view of this finding, the Court held that the additional questions raised by the appellants did not require further consideration.

The final order was that the appeal was allowed, the suit was dismissed with costs awarded throughout, and the appeal was thereby granted, as recorded in the citation (1889) I.L.R. 12 All. 234.