MALISETTI VIRANNA Vs. KONDEPARTHI PALLAYYA

JUDGEMENT

(1.) The first defendant entered into an agreement with the plaintiff on 29 May, 1942, to sell the suit property to him for a sum of Rs. 1,300. This agreement is Ex. P-1. A sum of Rs. 150, which had been already received by the first defendant under an arrangement that the plaintiff should lend the first defendant a sum of Rs. 400 and enjoy the property for four and a half years appropriating the income towards interest, was treated as the advance for the agreement to sell. The balance of consideration was to be paid at the time of the registration of the sale deed which was to be executed in a month. On 17 July, 1942, the first defendant executed a deed of mortgage in favour of the plaintiff, Ex. P-2, for a sum of Rs. 400 providing that the properties were to be enjoyed by the plaintiff for a period of five years (from Chitrabanu to the end of Vyaya) the income to be appropriated towards the interest. At the end of the period, if the principal sum was not paid the mortgage was to be renewed for another term of five years. Then follows the material clause with which we are concerned in this appeal and it is in these terms: If during the term of this mortgage, if I choose to sell the property, I shall sell it to you for the price already fixed between us, deducting out of it the Rs. 400 now given to me. The sum of Rs. 400 was made up of Rs. 150 received as advance on the date of the agreement to sell, Rs. 80 received to cancel a mortgage arrangement made with third parties, and a sum of Rs. 170 lent on a promissory note.

(2.) The first defendant sold the property on 2nd September, 1943, under Exhibit D-1 to the second defendant for a sum of Rs. 2,500. The plaintiff has brought the suit to enforce the terms of Ex. P-i, the agreement to sell in his favour, alleging that the second defendant purchased the property with notice of the agreement. The. District Munsiff held that Ex. P-1 was superseded by the mortgage Ex. P-2 and that there was no prohibition under the mortgage to sell the property to any one, else. He dismissed the suit. On appeal, the District Judge concurred with the District Munsiff that the terms of the mortgage governed the rights of the parties; but he held that there was a right of pre-emption conferred on the plaintiff which he could enforce. He remanded the suit for consideration of the other issue, namely, Whether the second defendant is a bona fide purchaser for valuable consideration without notice of the alleged agreement to sell and right of pre-emption in favour of plaintiff. The defendants have preferred this appeal.

(3.) There can be no doubt that the agreement Ex. P-i is not now in force after the mortgage Ex. P-2 in which it is definitely stated that the first defendant was then unwilling to sell the property in accordance with the agreement already entered into. The plaintiff was a consenting party and we must now look to the terms of the mortgage to ascertain their respective rights and obligations. There is nothing like a suspension of the operation of the agreement to sell which was to revive when the first defendant entertains once again an intention to sell. It is true that if he proposed to sell he was to sell for the sum fixed in the original agreement minus the sum of Rs. 400 received under the mortgage. But it is the agreement under the mortgage that has to be regarded as in force between the parties and not Ex. P-i which was abandoned or superseded except for attracting the price specified therein.