JUDGMENT Lindsay and Sulaiman, JJ.
1. This is a defendant's appeal which has arisen out of a suit for pre-emption. It came before a Bench consisting of Mr. Justice Sulaman and myself, and in view of the course which the case took in the lower appellate court we found it necessary to refer it for decision to a Full Bench by our order dated the 22nd of November last.
2. The question is one of general importance, for we have to construe a wajib-ul-arz of a type which is very common in the Azamgarh district. This case, we may mention, comes from the district of Azamgarh.
3. A string of cases beginning with the case of Surajbali Singh v. Mohammad Nasir (1918) A.L.J. 879, has laid down certain principles of decision which govern the interpretation of wajib-ul-arzes which are framed in this peculiar way, and if those cases are to be followed it must be held in the case, now before us that the wajib-ul-arz relied upon by the plaintiff does not contain a record of custom.
4. In this particular case, however, the Judge of the lower appellate court considered that he was entitled to rely upon an older case than the case to which I have referred, namely, the casein the Allahabad Law Journal Reports. The case which was relied upon by the Judge in the court below was the Full Bench case of Majidan v. Hayatan Weekly Notes 1897 p. 3, decided in the year 1897. In that case, with one exception perhaps, the language of the wajib-ul-arz under consideration was identical with that of the wajib-ul-arz with which we are concerned in the present appeal and there can be no doubt whatever that the Full Bench in that case decided that the wajib-ul-arz before them did set out a record of custom.
5. The particular point upon which the controversy turns in this case is one which arises out of the concluding words of the clause relating to pre-emption. The clause begins by-reciting the general rule about pre-emption and specifying the classes of co-sharers who are entitled to preference and to take in the order of that preference. Following upon this recital there is a further recital that in the case of out-and-out sales the purchase money is to be calculated at a rate of interest equivalent to 6 per cent per annum, and in case of other transfers not being out-and-out sales the sum Which changes hands is to be calculated at the rate of 12 per cent per annum.
6. Then follows another provision that if in the case of a mortgage by conditional sale the mortgagor is unable to redeem and the property be about to be, foreclosed, a co-sharer, according to his right of pre-emption as recited above, would be entitled to pay off the mortgagee and to take possession of the property till he is himself redeemed by the mortgagor.
7. A clause framed in this latter language was in the wajib-ul-arz which was under consideration in the Pull Bench case of Majidan v. Hayatan Weekly Notes 1897 p. 3 in the year 1897 and there can be no doubt that the attention of the learned Judges composing that Bench was directed to the provisions of this clause. On the other hand, it is to be observed that there is nothing in the report of the case which would indicate that any argument was ever raised before the learned Judges as to whether a recital of this kind could properly be treated as a recital of custom.
8. Referring to the case of Surajbali v. Mohammad Nasir (1918) 16 A.L.J. 879, it is clear that this matter was argued before the Judges of the special Pre-emption Bench, and in dealing with this matter the learned Chief Justice who delivered the judgment pointed out that a clause similar to the clause we are now considering conferred a right of redemption upon a person who had no interest whatever in the mortgaged property.
9. In that case, too, there were, as in the present case, certain conditions which laid down the price at which the property could, be purchased or mortgaged.
10. We have no doubt whatever that the Case of Surajbali Singh was decided on the principle that the last clause, in the wajib-ul-arz contained matter which could not properly or possibly be the subject of custom, and that being so, the conclusion arrived at by the learned Judges was that, although prima facie the wajib-ul-arz was a record of custom, the internal evidence in the case overturned this presumption and showed that the record was not in truth a record of custom.
11. This case of Surajbali Singh v. Mohammad Nasir (1918) 16 A.L.J. 879 was decided on the principle which was laid down in the earlier case of Fazal Husain v. Muhammad Sharif (1914) I.L.R. 36 All. 471. The relevant passage, is to be found at page 473, and the principle there laid down is that where a wajib-ul-arz in the very same clause in which reference to pre-emption is made contains reference-to other matters which could not possibly be matters pf custom it ought to be held that the record is not one of custom at all.
12. It is not necessary therefore to enter into discussion of the cases decided subsequent to the case of Surajbdli Singh (1918) 16 A.L.J. 879. They have all been decided upon the principle which has just been enunciated.
13. Speaking for myself I have no doubt whatever that the decision of Richards, C.J., in Surajbdli Singh s case was perfectly correct and that a provision in a wajib-ul-arz which confers a right of redemption upon a person who is a stranger to the mortgage cannot in any sense be treated as being a record of a custom.
14. That being so, and fallowing the cursus curiae, I am of opinion that in the present case the wajib-ul-arz ought not to be treated as containing, a record of custom, and consequently the finding of the court -below ought to have-been that the custom of pre-emption was not proved.
15. There is, of course, the additional reason already mentioned, namely, that this wajib-ul-arz professes to lay down the rates at which sales and mortgages are to be made, and it is hardly necessary to say that an entry of this nature could not possibly be a record of custom.
16. It is, however, necessary to express an opinion regarding the soundness of the judgment in the Full Bench case of Majidan v. Hayatan Weekly Notes 1897 p. 3 and it was for that purpose that this reference was made to a Full Bench. Speaking for myself, I am of opinion that that case cannot be held to be authority against the view which has prevailed since the Pre-emption Bench has been constituted. As I have mentioned, the particular point with which we are dealing here was never raised before that Full Bench and in my opinion it cannot rightly be laid down that a record conferring a right of redemption upon a stranger to a mortgage can be a record of custom. If the Full Bench case of Majidan v. Hayatan purports to lay down the law in any other sense, then in my opinion it ought to be overruled and declared to be no longer good law.
Piggott, J.
17. I concur with Mr. Justice Lindsay. We start with the general presumption that an entry in the wajib-ul-arz, and more particularly an entry such as the one before us in this case which is headed "custom of pre-emption", is to be treated as the record of a custom. This principle, however, has always been qualified by one condition, namely, that it shall not be apparent from anything in the wajib-ul-arz itself that what purports to be the record of a custom is in reality the record of a contract or agreement arrived at by the co-sharers amongst themselves at the time of the settlement. The necessity for such a qualification is obvious. You might conceivably have a wajib-ul-arz entry under the above heading which began by expressly reciting that there had hitherto been no custom of pre-emption in the village, but went on to say that the co-sharers agreed amongst themselves to be governed hereafter by such and such rules in the matter. This of course is an extreme case, but entries of this kind have actually come under the notice of this Court; it would be clearly preposterous to lay down the principle that such an entry must be regarded as the record of a custom because in the wajib-ul-arz it has been wrongly inserted in the place provided for the record of the custom relating to pre-emption. Now in the present case we have an entry which begins in the ordinary way in which one would expect the record of a custom to start. So far so good; but immediately after the words, which standing by themselves appear to be a valid record of an existing custom, there followed special provisions as to the price at which the party claiming pre-emption is to be entitled to purchase or to take up a mortgage. Immediately after this comes a provision of a special and peculiar character, permitting other co-sharers under certain circumstances to redeem a mortgage in which they have no concern whatsoever, except that they are the co-sharers of the mortgagor. What strikes me most about the right recorded in favour of co-sharers in this clause is that it offends against the very essence of a right of pre-emption. The co-sharer redeeming a mortgage under this clause does not acquire the proprietary title of the mortgagor. He does not, in any sense of the words, step into the snoes of the mortgagor. Neither does, he step into the shoes of the mortgagee; for ft is clearly not intended by the entry in the wajib-ul-arz that a co-sharer so redeeming shall acquire the right of foreclosure which the mortgagee, held under his contract of mortgage.. The effect of the transaction outlined in this clause of the wajib-ul-arz, assuming it to be carried out, would be to put the co-sharer exercising this right of redemption into possession as an ordinary usufructuary mortgagee, subject to a liability to be redeemed by the original mortgagor, presumably within the period of limitation prescribed, by law for the redemption of the original mortgage. It does not seem to me that a right of this sort can possibly be. created by custom. I therefore agree with Mr. Justice LINDSAY in holding, that the wajib-ul-arz which we are considering, in view of those entries inserted under the heading of custom of preemption to which I have referred, cannot be treated as the record of a custom existing at the time when it was drawn up, but must be regarded as the record of an agreement come to by the co-sharers amongst themselves at the time.
Sulaiman, J.
18. I have come to the same conclusion. It is true that when there is an entry of a right of pre-emption in a wajib-ul-arz there is a prima facie presumption that it is an entry of custom. At the same time if that very clause which recites such a right contains other matters relating to the transfer or devolution of property which cannot possibly be a record of custom then that presumption is negatived. It is open to the courts then to say that the evidence produced by the plaintiff in support of the alleged custom is totally insufficient even to raise a presumption that such a custom exists. The question, therefore, which we have to consider in this case is whether there are any other matters contained in Clause 13 of the wajib-ul-arz of 1872 which negative the idea that that entry was a record of custom. Two matters have been specially referred to by the learned advocate for the defendant appellant before us. The first is that that clause contains a recital that if in the case of a mortgage by conditional sale the mortgagor is unable to redeem and the property be on the point of foreclosure and a notice for foreclosure has been issued to the mortgagor, a co-sharer by virtue of his right of pre-emption would be entitled to pay off the mortgagee and to take possession of the property till he is himself redeemed by the mortgagor.
19. I concede at once that if a right is given which in any way overrides a statutory provision, such a right cannot possibly be a record of custom. The question is whether this particular right was in any way in contravention of Regulation 17 of 1806 which was in force at the time when this wajib-ul-arz was prepared. I am unable to say that such a right had necessarily the effect of overriding the provisions of that Regulation. Under that Regulation the mortgagee was, bound to submit to the property being taken away from him and the foreclosure prevented, if the amount due on the mortgage was deposited within the year of grace by the mortgagor or his legal representatives. I do not think that a custom which gave the co-sharers a right to intervene and take the place of the mortgagor and prevent foreclosure can necessarily be said to be absurd, unreasonable or illegal. Under the present law, when property is transferred to a stranger under a registered document, the -vendee obtains absolute rights under the provisions of the Transfer of Property Act. Can it be said that the right of a pre-emptor who comes into court to claim pre-emption necessarily implies an overriding of the provisions of the Transfer of Property Act? All that the co-sharers would be entitle to do would be to obtain possession of the property and remain in, possession of it as the mortgagee would have done if no proceedings for foreclosure had been taken.
20. In order, therefore, to see whether such a right could not possibly be the basis of a custom and could not possibly have been recognized by a court of law, we have to see whether in earlier cases such a right was ever referred to or assumed. I may here point out that in the case of Ashik Ali v. Mathura Kandu (1882) I.L.R. 5 All. 187 (190), two learned Judges of this Court remarked that there might be a right under which co-sharers would be able to enforce pre-emption either immediately upon the execution of the mortgage, or by redemption during the year of grace after issue of the notice of foreclosure, or after the sale became absolute. The wajib-ul-arz which was before the Full Bench in the case of Majidan v. Hayatan Weekly Notes 1897 p. 3 also clearly contained a similar provision for pre-mortgage or redemption during the year of grace. The learned Judges who disposed of that case certainly expressed the view that there was nothing in that clause which showed necessarily that the record was one of contract and not of custom, and they pointed out that the paragraphs referred to, a, practice which prevailed as to the redemption of mortgages by the sharers or the co-sharers and as to pre-emption in the case of conditional sales. Then again, in the case of Gaya Bharthi v. Lakhnath Rai (1897) I.L.R. 20 All. 103, another Full Bench case, three learned Judges of this Court at least assumed that there was a right in co-sharers to claim pre-emption at two stages, firstly when the mortgage by conditional sale was executed, and secondly after a suit for foreclosure had been instituted but before a decree for foreclosure had been actually passed. I have no doubt in my mind that if one were to search the old reports many more cases may be found. When therefore, we have an expression of opinion by at least six learned Judges of this Court who were well familiar with the customary law of pre-emption, and find that they assumed, if not recognized, the possibility of the enforcement of such a right, can it be said that such a right is so absurd or illegal that it cannot possibly be the basis of a custom? If, therefore, there had been nothing further in the clause but only this provision, I would not have been prepared to hold that the record is necessarily one of contract.
21. There is, however, a further condition in the same clause, under which the right of pre-emption can be enforced in favour of the co-sharers at a fixed price. Such a condition in any opinion is certainly absurd and cannot be the result of a growth of custom. If this condition were to be enforced the consequences would be startling. A co-sharer at all future times would be bound to offer the property at a.fixed pxice, regardless of the market value of the property, to the other co-sharers. He would be forced to submit to transfer it to co-sharers at a very inadequate price although purchasers for higher value were available. It would also follow that even if a stranger did actually pay a fancy price or even the market price, the co-sharers would be entitled to take the property from him on payment not of the price he paid but a price calculated at the smaller fixed rate. This, in my opinion, would place an unreasonable restraint on a co-sharer's power of alienation, and could not be enforced by a court of law. As this condition is inseparably connected with the alleged custom of pre-emption I am of opinion that there can be no presumption that the clause was a record of custom. I, also would therefore allow this appeal, set aside the order of the lower appellate court ant restore that of the court of first instance.
22. We allow this appeal, set aside the order of remand and restore the decree of the court of first instance with costs to the defendant throughout.