- (1.) This appeal is brought, by special leave, from the judgment of the Calcutta High Court dated November 18, 1959 in First Appeal No. 104 of 1954 affirming the judgment and decree dated February 27, 1954 for the Subordinate Judge, Fifth Court, at Alipore District 24 Paraganas in Title Suit No. 100 of 1952 decreeing the suit for pre-emption in favour of the plaintiffs-respondents Nos. 1 and 2.
(2.) Two brothers, Tulshidas Chatterjee and Kishorilal Chatterjee owned certain properties (Land and building) on Paharpur Road within Mouza Garden Reach, Khiderpore, in the suburbs of Calcutta. In the year 1938 Kishorilal sued for partition of the properties and eventually the matter was referred to arbitration. On December 16, 1940, the arbitrators filed 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, and 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 the pre-emption clause. On April 22, 1942, Kishorilal sold, by the Kobala (Ex. I), his two blocks, B and D to Rati Raman Mukherjee and others. On June 21, 1946, the Mukerjees in their turn sold the two blocks B and D to the plaintiffs by the Kobala [Ex. 1(a)]. On September 20, 1952 Nagendra Nath Ghosh sold block A to defendant No. 1 and on December 2, 1952, the present suit was filed by the plaintiffs against the said purchaser- defendant No. 1 for pre-empting his aforesaid purchase. On April 7, 1953 while the suit was pending in the trial Court, defendant No. 1 sold the disputed property (block A) to defendant No. 2. The plaintiffs thereafter made an application for amendment of the plaint praying for a decree for pre-emption against defendants Nos. 1 and 2 and calling upon them to execute a conveyance in favour of the plaintiffs on payment of the actual consideration paid for the property in suit. On the conclusion of the trial the Subordinate Judge held that the covenant of pre-emption was binding upon the defendants who had notice of that clause and plaintiffs were entitled to enforce the right of pre-emption. He further held that the covenant of pre-emption was not hit enforceable against the assignees of the original parties to the contract. Accordingly a decree was granted to the plaintiffs asking them to deposit within one month a sum of Rs. 14,000 for the purpose of pre-empting the suit property and both defendants were directed to execute and register a Kobala in plaintiffs' favour within 15 days of the deposit by the plaintiffs. The defendants took the matter in appeal to the Calcutta High Court, which dismissed the appeal and affirmed the judgement and decree of the Subordinate Judge.
(3.) On behalf of the appellant learned Counsel put forward the argument that the covenant for pre-emption was merely a personal covenant between the contracting parties and was not binding against successors-in-interest or the assignees of the original parties to the contract. We are unable to accept this submission as correct. It is true that the pre-emption clause does not expressly state that it is binding upon the assignees or successors-in-interest, but , having regard to the context and the circumstances in which the award was made, it is manifest that the pre-emption clause must be construed as binding upon the assignees or successors-in-interest of the original contracting parties.;