Federalism

This article is written by Avneet Kaur. It offers an extensive exploration of the case of Sant Ram and Ors. vs. Labh Singh and Ors. (1964), a significant judgement of the Supreme Court of India dealing with pre-emption laws. The article discusses various legal provisions involved in the case, along with various aspects of the judgement. It also attempts to analyse the significance of the judgement in succeeding cases.

This article has been published by Shashwat Kaushik.

Introduction 

The concept of pre-emption based on vicinage was the product of Mughal rule in India. The essence of this concept is that neighbours should be given the first opportunity to purchase the adjacent property. One of the basic tenets of this principle was to maintain the social fabric of the community and prevent fragmentation of land holdings. 

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Suppose X and Y are owners of their respective houses, which are adjacent to each other. Now, Y decides to sell his house to Z, who is a stranger to X. Going by the doctrine of pre-emption in this situation, X can repurchase the house sold to Z at the same price and conditions on which it was sold to Z by Y. 

The case of Sant Ram and Ors. vs. Labh Singh and Ors. (1964) is one of the most prominent instances of the viewpoint of the Indian judiciary on pre-emption rights. The case deals with a similar situation as the one mentioned in the above illustration. The judgement in this case goes on to explain the scope of the term “laws in force” in the Constitution and its far-reaching implications for the validity of custom-based pre-emption rights. 

Details of the case

  1. Name of the case: Sant Ram and Ors. vs. Labh Singh and Ors. (1964)
  2. Date of judgement: 15.04.1964
  3. Parties to the case:
  • Appellant: Sant Ram and Ors.
  • Respondent: Labh Singh and Anr.
  1. Equivalent citations: AIR 1965 SUPREME COURT 314, 1964 SCR (7) 745
  2. Type of case: Civil Suit (Appeal)
  3. Statutes involved:
  1. Provisions involved:
  • Article 12 of the Constitution of India 
  • Article 13 of the Constitution of India 
  • Article 19 of the Constitution of India 
  • Section 10, Rewa State Pre-emption Act 1946
  1. Bench: Chief Justice P.B. Gajendragadkar, Justice K.N. Wanchoo, and Justice K.C. Das Gupta

Background of the case 

The case of Kunwar Digamber Singh vs. Kunwar Ahmad Syeed Khan (1914) elaborated on the history of pre-emption rights in India. It was observed that the prevalence of pre-emption in India began with the advent of Mughal rule. Therefore, it was a subject matter of Mohammedan law. Eventually, many villages started following the Mohammedan rules of pre-emption. But many communities also developed their own rules governing pre-emption based on customs. The practice of pre-emption is the result of an agreement between co-sharers of a particular village. The ultimate purpose is to prevent a stranger from becoming a shareholder in a village or community. When the rights of pre-emption are based on customs or contractual agreements, then the same must be established by evidence, if challenged. 

The practice of pre-emption was in existence before the commencement of the Indian Constitution, when there was no fundamental right to acquire, hold or dispose of property. But after commencement, Article 19(1)(f) came into operation, which guaranteed the fundamental right to acquire, hold and dispose of property. Therefore, the effect of pre-emption claims on rights guaranteed under Article 19(1)(f) began to be challenged. The law of pre-emption varies in almost every state. The validity of the same has also been a subject of controversy due to differences in judicial decisions throughout the country. 

Accordingly, in the context of the validity of provisions of the Rewa State Pre-emption Act, 1946; the debate was settled in the case of Bhau Ram vs. B. Baijnath Singh (1962), wherein the Supreme Court declared Section 10 of the said Act void. The case of Sant Ram also deals with pre-emption claims on grounds of the vicinage, backed by the force of custom and reaffirms the ruling given in Bhau Ram’s case. 

Facts of Sant Ram and Ors. vs. Labh Singh and Ors. (1964) 

Respondent no. 2, i.e., Kaiseri Begum, sold a plot and two houses in the town of Milak located in Rampur District to the appellants, i.e., Sant Ram and Ors, on Dec 4, 1953. The first respondent, i.e., Labh Singh, owned the adjacent property and claimed pre-emption on the ground of vicinage. However, the sale of the property in question did not include a strip of land 3 feet 6 inches wide that was located between Labh Singh’s house and the sold property. 

The first respondent, i.e., Labh Singh, filed a suit for pre-emption in the Munsif’s Court, wherein it was held that since Labh Singh’s house was not completely adjacent to the sold property and there was a strip of land dividing the two properties, he cannot claim pre-emption, despite the prevalence of general custom of pre-emption in the locality. 

Aggrieved by the decision of the Munsif’s Court, Labh Singh filed an appeal before the District Court, Rampur. The district judge allowed the appeal, recognizing Labh Singh’s right to pre-emption. In response to this decision, the appellants filed an appeal before the High Court of Judicature at Allahabad. The appeal was referred to a Division Bench of the High Court, wherein the appeal was dismissed by stating that the law of pre-emption was not void under Article 13 and was saved by Article 19(5) of the Constitution of India. The High Court certified the case for appeal and consequently, an appeal was filed against the decision of the Allahabad High Court before the Supreme Court of India. 

Issues raised 

  • Whether the term “laws in force” in Article 13(3)(b) of the Constitution of India includes custom and usage and whether Article 13(3)(a) shall be read with Article 13(1)?
  • Whether the right of pre-emption after the commencement of the Constitution becomes void?

Legal provisions involved in Sant Ram and Ors. vs. Labh Singh and Ors. (1964) 

Constitution of India, 1950

Article 12 of the Constitution

Article 12 provides the definition of “state” for the purposes of Parts III and IV of the Constitution of India. It provides that, unless stated otherwise, the State shall include the –

  • government and parliament of India;
  • government and parliament of states;
  • local or other authorities within the territory of India;
  • local and other authorities are under the control of the government of India. 

The present case involves the exploration of the question of whether actions related to pre-emption based on custom fall within the definition of the State as given under Article 12 of the Constitution of India. 

Article 13 of the Constitution

Article 13(1) provides that all pre-constitutional laws in force that are inconsistent with the provisions under Part III of the Constitution shall be void to the extent of that inconsistency. The doctrine of severability is the personification of this constitutional provision. Additionally, the doctrine of eclipse in this regard provides that all pre-constitutional laws violative of Part III will remain dormant and not dead until the state amends them. The essence of the doctrine is that, after a  provision of a statute or a law is found to be void or inconsistent, it should be considered whether the provision is capable of separation from the rest of the enactment. If it is not a material provision and is capable of being separated, then the validity of the rest of the enactment should not be affected by the invalidity of such a provision. The doctrine of eclipse postulates that if any law is found to be inconsistent with fundamental rights, then it should not be deemed dead or invalid. Rather, it is overshadowed by fundamental rights. The inconsistency can be removed through a Constitutional amendment. 

Sub-clauses (a) and (b) of clause (3) of Article 13 are also discussed in the judgement. These provisions define the terms ‘law’ and ‘laws in force’ respectively. The term ‘law’ includes any ordinance, by-law, rule, regulation, notification, custom or usage having the force of law in India. However, in Ahmedabad Women Action Group vs. Union of India (1977), the Supreme Court held that personal laws such as Hindu law, Muslim law, and Christian law are not part of the definition of law under Article 13. According to Article 13(3) (b), the term ‘law in force’ means laws passed by the legislature of a Union or States or any other competent authority before the commencement of the Constitution, irrespective of whether they are currently in operation or not. 

In the present case, one of the most significant questions before the Allahabad High Court was whether the term ‘laws in force’ includes, within its scope, customs or usages as well. The validity of the law of pre-emption was also discussed on the touchstone of Article 13 of the Constitution. 

Article 19 of the Constitution

Sub-clause (f) of clause (1) of Article 19 encompasses the fundamental right to acquire, hold and dispose of property without unwarranted interference by the government. It acted as a safeguard against the unjust confiscation of property. However, this also had an adverse effect on the government’s ability to achieve social welfare goals and ensure equitable distribution of resources. Accordingly, to strike a balance between the government’s ability and individual property rights, the 44th Constitutional Amendment Act, 1978, was introduced, which transitioned this right from the status of a fundamental right to a constitutional right. 

Article 19(1)(d) and Article 19(1)(e) deal with the rights of movement and residence of Indian citizens throughout the territory of India, subject to certain reasonable restrictions. Sub-clause (5) of Article 19 provides the following grounds on which rights can be restricted:

  • The interest of the general public;
  • Protection of the interests of any Scheduled Tribe

One of the most significant matters of discussion in the present case was the effect of pre-emption rights on the rights guaranteed under Article 19(1)(f). And whether the right of pre-emption is saved by clause (5) of Article 19 of the Constitution of India.

Section 10 of the Rewa State Pre-emption Act, 1946

Section 10 of the Act provides a categorization of the classes of persons who shall have the right of pre-emption. The two classes include:

  • Any individual who is a co-owner or partner in the property that is being sold and foreclosed;
  • Any individual who owns the immovable property adjacent to the property being sold and foreclosed or in case of transferring tenancy rights, the land that is linked to those rights. 

Additionally, Section 10 provided certain rules for the determination of pre-emption rights as follows:

  • Persons in the first class mentioned above will have precedence over those in the second class; 
  • And if the individuals belong to the same class, then the one having more proximity and having a closer relationship with the owner of the property being sold or foreclosed will have precedence over those with distant relationships. 

The present case revolves around the implications and validity of this provision of the Rewa State pre-emption Act as violative of Article 13 of the Constitution of India. The right of pre-emption, originally known as ‘Shufa’, is based on three types of ownership. 

  • The first being Shafi-i-Sharik or pre-emption based on co-ownership. This right is based on the co-owner or co-sharer’s right to acquire the co-owned property before it is sold to someone else. 
  • The second is Shafi-i-Khalit or pre-emption based on participation in immunities. These immunities can arise in certain situations, such as when the pre-emptor is owner of a dominant or servient heritage, when the sold property is dominant heritage or when the pre-emptor’s property is dominant heritage to the third person’s property.
  • The third is Shafi-i-Jaar or pre-emption based on vicinage, the validity of which is discussed in the present case. This means that the owner of the adjoining property or house should have the opportunity to buy the adjacent property before it is sold to someone else.  

Arguments of the parties

Appellant 

  • The counsel on behalf of the appellants relied on the case of Bhau Ram vs. B. Baijnath Singh (1962) and contended that the right of pre-emption on the ground of vicinage cannot be claimed as the same had been declared void in the Bhau Ram case.
  • The appellants contended that, in the early stages of society, it may have been necessary to restrict the right of transfer, but with the commencement of the Constitution and modernization, the same has become outdated and cannot exist.
  • It was also put forward that Article 13 of the Constitution of India provides that any pre-constitutional law having the force of law in the territory of India, if found to be inconsistent with any of the fundamental rights provided by the Constitution,  shall be void to the extent of that inconsistency. And since the law of pre-emption after the commencement of the Constitution puts unreasonable restrictions on the right guaranteed under Article 19(1)(f). Therefore, the same shall be void to that extent. 
  • The reasoning behind the appellant’s contention that the right of pre-emption goes against the enjoyment of the right guaranteed under Article 19(1)(f) was that pre-emption claims restrict the seller’s right to handle, manage or dispose of property in any manner he likes, while at the same time interfering with the buyer’s right to purchase such property. 
  • Furthermore, as per Article 19(5), only reasonable restrictions in the interest of the general public can be imposed on the right to acquire, hold and dispose of property under Article 19(1)(f). However, the restrictions imposed by the law of pre-emption are neither reasonable, justified nor beneficial to the public interest. 

Respondent  

  • The respondents contended that the Bhau Ram case is not suitable in the present circumstances because the former dealt with a legislative measure and the latter is concerned with custom.
  • It was also put forward that pre-emption arises out of contracts between co-sharers or customs prevalent in the community. Therefore, Articles 14 and 15 do not apply as they are concerned with the state as defined under Article 12 of the Constitution. 
  • The respondents argued that neither customs nor contracts amount to law as defined under Article 13 (3)(a) of the Constitution of India.
  • Further, it was contended that clause (1) of Article 13 deals with ‘all laws in force’, and the term ‘custom’ is nowhere to be found in the definition of the phrase ‘laws in force’ in Article 13(3)(b).
  • According to the counsel on behalf of the respondent, Article 13(1) cannot be interpreted in light of the definition of the term ‘law’ as given under Article 13(3)(a), because it was meant to define ‘law’ in Article 13(2). Only Article 13(3)(b) and the definition of the phrase ‘laws in force’ thereunder govern Article 13(1).
  • The respondents contended that henceforth, as the definition under Article 13(3)(b) does not talk about custom, the law of pre-emption based on custom cannot be said to be inconsistent with Article 19(1)(f). 

Decision of the Division Bench of High Court

The Division Bench of the Allahabad High Court held that there is a difference of opinion and authority on the validity of pre-emption laws. But the balance of authority lies in favour of their validity. Though the right of pre-emption puts certain restrictions on the right to acquire, hold and dispose of property, it cannot be said to be unreasonable or against the public interest. The Bench recognized that every community has the desire to maintain homogeneity and prevent fragmentation. Therefore, if a stranger interferes and acquires a part of the property, then difficulties may arise. In order to secure the peaceful enjoyment of co-owned property, the co-sharers should be given the priority right to buy the shares of other co-sharers. 

Additionally, it was held that the restrictions imposed by pre-emption rights on the transfer of property are limited in nature because:

  • Firstly, it is only available to specific classes of people as provided under Section 4 of the Rewa State pre-emption Act, 1946 and only gets activated when a real sale of property takes place;
  • Secondly, when a person exercises his right of pre-emption, he merely substitutes the vendee and pays the full price of the property. The preemptor gets bound by the same conditions and liabilities as the vendee would have been.

Henceforth, the right of pre-emption is not inconsistent with the right guaranteed under Article 19(1)(f) and is saved by clause (5) of Article 19. 

Issue-wise judgement in Sant Ram and Ors. vs. Labh Singh and Ors. (1964)

Interpretation of Article 13(3)(b) and its relationship with Article 13(1) 

The Supreme Court rejected the contention of the respondents that Article 13(3)(b) alone governs Article 13(1) and the definition of ‘law’ under Article 13(3)(a) cannot be used for the purpose of Article 13(1). The Supreme Court held that Article 13(3)(a) must be read with Article 13(1) because if the definition of the phrase ‘laws in force’ had not been given, then necessarily the definition of the term ‘law’ would have been read with clause (1) of Article 13. The reasoning behind the respondent’s contention was that Article 13(3)(b) does not take into account customs and usages and thus, the law of pre-emption based on custom was not affected by Article 19(1)(f). 

The Supreme Court held that it must be taken into consideration that the intention behind defining ‘laws in force’ was not to exclude the definition of ‘law’ under Article 13(3)(a). Article 13(3)(b) gives an inclusive definition as it comprises not only laws made or passed by the legislature or any other competent body before the commencement of the Constitution but also laws that are not in operation in specific areas or at all, though present in the statute book. It was held that this definition of ‘laws in force’ does not restrict the definition of the term ‘law’; rather, it only extends it and both of them are complementary to each other. 

The Supreme Court in its judgement provided two reasons as to why custom and usage having the force of law in the territory of India shall be held to be included within the meaning of the phrase ‘laws in force’:

  • Non-inclusion of customs and practices in the definition of ‘laws in force’ would narrow down and restrict the application of the term ‘law’, thereby rendering the fundamental rights ineffective and non-operational; and
  • Under Article 13(2), the term ‘law’ does not include customs or usages because the same are not made by the state. If we go by the reasoning that Article 13(3)(a) applies to Article 13(2) and not Article 13(1), then the term ‘customs’ or ‘usages’ would not apply to either clause of Article 13. However, this reasoning does not align with the original intent behind the definitions.

Henceforth, the Supreme Court held that both definitions govern the meaning of Article 13(1) of the Constitution. 

Validity of law of pre-emption

The Supreme Court relied on the case of Bhau Ram vs. B. Baijnath Singh (1962) in the context of Section 10 of the Rewa State Pre-emption Act, 1946. In the Bhau Ram case, it was held that the law of pre-emption based on vicinage is void because it imposes unjustified limitations on the right of individuals under Article 19(1)(f) to acquire, hold and dispose of property. It was held that this provision imposes restrictions on the vendor and the vendee and there was no public advantage arising out of it. The only justification for its support was that it prevented people belonging to different religions, races, and castes from acquiring property in a homogenous area or community. However, this reasoning is inconsistent with the right guaranteed under Article 15 of the Constitution of India. 

Therefore,  the Supreme Court held that if we go by the decision in the Bhau Ram case, then this appeal must succeed. The Supreme Court held that the reason given behind holding Section 10 void would equally apply to a custom. Hence, since Section 10 is void, the right of pre-emption based on custom would also be void. 

Henceforth, the Supreme Court ruled in favour of the appellant and held that each party would bear its own costs throughout.

The rationale behind this judgement

The Supreme Court in the case of Sant Ram vs. Labh Singh (1964) dealt with the effect and operation of pre-emption post-Constitution. The Supreme Court declared Section 10 of the Rewa State pre-emption Act, 1946, void in line with the decision given in the case of Bhau Ram vs. B. Baijnath Singh (1964). The rationale behind the Supreme Court’s judgement was based on several factors

  • Firstly, the law of pre-emption is a pre-constitutional product, a time when there were no fundamental rights, but after the commencement of the Constitution, several fundamental rights were conferred on the Indian citizens, one of them being the right to acquire, hold and dispose of property as given under Article 19(1)(f). Further, the Constitution also provided mechanisms to safeguard the rights, such as Article 13, which provided that any pre-Constitution law, if found to be inconsistent with fundamental rights of citizens, must be declared void to the extent of such inconsistency. 
  • Secondly, the Supreme Court observed the manner in which pre-emption claims on grounds of vicinage affect the fundamental rights of others. Pre-emption prevents the seller of a property from dealing with or selling his property in any way or to anyone, according to his will. The buyer of such a property may also face litigation even after providing notices or fulfilling all terms and conditions of the sale. Hence, it violates the rights of the seller and buyer to acquire, hold and dispose of property under Article 19(1)(f) of the Constitution. 
  • Thirdly, pre-emption may have been necessary in the early stages of development of society to promote social harmony and stability and to prevent disputes. However, in modern society, there is a robust property rights mechanism in place to deal with such issues, thereby making pre-emption redundant. 

Precedent followed in the case 

Bhau Ram vs. B. Baijnath Singh (1962)

In this case, the Supreme Court collectively heard three appeals that raise the question of the constitutionality of certain provisions of pre-emption laws prevailing in the states of Madhya Pradesh, Delhi and Maharashtra. Three suits for pre-emption were brought by pre-emptors who were deceased and the consequent appeals were by the purchasers of the property that is subject to pre-emption. One of the appeals dealt with the validity of Section 10 of the Rewa State pre-emption Act, 1946. The Supreme Court of India held that the right of pre-emption on grounds of vicinage as provided under Section 10 is void because it imposes unjustified restrictions on the right guaranteed under Article 19(1) (f). It restricts the right of the seller to sell his property to the buyer of his choice on such terms as may be agreed upon between them. The buyer can face litigation even after providing the requisite notice to the person claiming pre-emption. The only reason behind supporting claims for pre-emption is to prevent heterogeneity of religion, race, or caste in a community and ensure consolidation of land holdings. However, this reason is inconsistent with the letter and spirit of Article 15 of the Constitution of India. 

In the Sant Ram case, the Supreme Court relied on its judgement in the Bhau Ram case and reiterated the void nature of Section 10. 

Significance in subsequent cases 

Ramdayal Sahu vs. Hari Shankar Lal Sahu And Ors. (1966)

In the case of Ramdayal Sahu vs. Hari Shankar Lal Sahu and ors. (1966), the Patna High Court, while dealing with the validity of Section 47 of the Chota Nagpur Tenancy Act 1908, relied on the judgement in the case of Sant Ram vs. Labh Singh (1964) and held that the effect of the judgement is that any law, including that which has been in force before the commencement of the Constitution, such as pre-emption law, whether based on customs or statute, should undergo the test of reasonable restrictions as provided in Article 19. If the law is found to be inconsistent with regard to any right or liberty of the citizens to deal with their property as they please, then the same must be struck down as void. 

Youth Welfare Federation vs. Union Of India (1996)

In the case of Youth Welfare Federation vs. Union of India (1996), one of the issues that the Andhra High Court dealt with was whether the phrase ‘laws in force’ as defined in Article 13 of the Constitution includes personal laws since they are largely based on customs and practices. The High Court, while giving its decision, relied on the judgement in the Sant Ram case and observed that customs and usage having the force of law in the territory of India must be contemplated by the expression ‘laws in force’. However, the fact that personal laws are also a result of customs and administered by courts is not sufficient since they are largely uncodified. It was further recognized that the word ‘laws’ in Article 13(3)(b) has the same meaning as ‘law’ in Article 13(3)(a). 

Critical analysis of the case 

The judgement in the case of Sant Ram vs. Labh Singh (1964) dealt with the implication of pre-emption laws in the post-constitutional period. The Supreme Court declared Section 10 void and upheld the stature of fundamental rights over customs or laws. The law of pre-emption was a reason to prevent people belonging to other communities, religions or races from becoming property share-holders in a particular village or community. This prevented the growth of diversity, which is the main source of societal growth and development. The customary practice of pre-emption on grounds of vicinage did not in any way benefit the general public. Rather, it fostered feelings of discrimination, thereby going against Articles 14 and 15 of the Constitution of India. The judgement proved to be quite controversial among many communities where pre-emption was a prevalent custom. However, due to variations in pre-emption laws in different states, the authority on the validity of such laws continues to remain unbalanced. A firm stance on the validity or invalidity of pre-emptions across the country will ensure uniformity in their status and application. 

Conclusion 

The legal battle surrounding the validity of pre-emption claims on grounds of vicinage was ended by the decision of the Supreme Court in the Sant Ram case. The case upheld the significance of precedents, the rule of law and the fundamental rights of citizens. The Supreme Court aptly analysed the definition of the terms ‘law’ and ‘laws in force’ under Article 13 and their applicability to Article 13(1). The inclusion of customs in the expression ‘laws in force’ ensured that no laws or customs having the force of law in the territory of India before the commencement of the Constitution resulted in a violation of the fundamental rights of the citizens. Apart from that, the court also recognized the importance of individual property rights and the reasonableness of restrictions that can be imposed in their exercise. Overall, the judgement settled the debate surrounding pre-emption on grounds of vicinage by declaring Section 10 of the Rewa State Pre-emption Act, 1946, as void. 

Frequently Asked Questions (FAQs)

What is pre-emption?

The principle of pre-emption states that the owner of an immovable property has the right to purchase another immovable property in its vicinity or adjacent to it or if it is a co-owned property, before the same is sold to anyone else. It also entitles the person claiming pre-emption to repurchase the property if it has already been sold to another person. 

What is the status of Article 19(1)(f) of the Constitution of India?

Article 19(1)(f) provided one of the fundamental rights to acquire, hold and dispose of property. Every Indian citizen had the right to deal with or manage his property according to his will without interference from the government or any person. However, this restricted the state’s right to acquire property for developmental and public welfare purposes. Therefore, the 44th Constitutional Amendment in 1978 removed this right from the ambit of fundamental rights and placed it under Article 300A as a constitutional right. 

Who can claim pre-emption?

The right of pre-emption arises out of either custom, contract or statutory provisions. The law of pre-emption varies across states; therefore, it depends on the jurisdiction and nature of the property involved. However, usually co-owners, shareholders, and neighbours can claim pre-emption. 

References

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