- (1.) THIS is a plaintiffs appeal arising out of a suit for specific per formance of a contract of sale and for a declaration that the 'bara' situated to the south of his house was never sold by him to the defendant No. 1 and also for possession over the said 'bara' in case he was found to be out of possession. It was alleged by him that Purshottam who was impleaded in the suit as defendant No. 2 and who subse quently died during the pendency of the suit was his second cousin. Four or five years prior to the filing of the suit Pur shottam returned to the village with a view to settle down there. For this purpose he requested the plaintiff to find out a house for him. The plaintiff suggested that one of his houses, which is in fact the subject-matter of the suit, might be purchased by Purshot tam on the condition that Purshottam and his heirs might continue in possession of the house for any length of time and in case they ever desired to sell the same, they would first offer the same for sale to the plaintiff or his heirs and on his refusal to purchase the same they could sell it to any third person. This condition was accepted by Purshottam and the house was accordingly sold to him per sale deed dated 1-5-1951 in which the said condition was incorporated. Pnrsfiottam, however, did not abide by that condition and sold the house to Chhedi Dhobi, defendant No. 1 for a sum of Rs. 700.00 on 30-6-1955 without first offering the same to the plain tiff. Purshottam also included in the sale deed the plaintiff's Bara which had never been sold to Purshottam and of which he was308 not the owner. As the defendants failed to transfer the house to the plaintiff for this amount of Rs. 700.00, the latter instituted the suit which gave rise to the present ap peal. The defendant No. 1 contested the suit, inter alia, on the ground that there existed no such contract between the plaintiff and Purshottam as alleged in the plaint and at any rate the alleged contract was illegal. It also pleaded that the plaintiff had refused to purchase the house, hence he purchased the same from Purshottam for a sum of Rs. 700.00. The bar of the provision of Sec tion 41 (14) of the Transfer of Property Act Was also raised by him. The trial court hav ing found that the agreement in question being uncertain and violative of the rule of perpetuity was unenforceable. It, however, found that Purshottam had sold the house to the defendant No. 1 without ever offer ing to the plaintiff and had wrongly included Bara land in the sale deed executed in favour of the defendant No. 1. The trial Court dismissed the suit for specific perfor mance of contract of sale but granted the decree for possession over the Bara land. Against the said decision, the plaintiff and the defendant No. 1 filed separate appeals. Both the appeals were heard and disposed of by a common judgment by Civil and Sessions Judge. The appellate court below found that the agreement was vague and it offen ded against the rule of perpetuity. It also did not give any right to pre-empt. The Appel late Court below also recorded a concurrent finding of fact that Bara land was neveu transferred to Purshottam hence he had no right to sell the same to the defendant No. 1. On these findings both these appeals were dismissed. Aggrieved the plaintiff has come to this Court in second appeal. A cross-objection has also been filed by the defen dant No. 1.
(2.) THE learned counsel for the ap pellant contended that the agreement to sell as contained in the sale deed, Ex. 1, was neither vague nor did it offend against the rule of perpetuity. It is stated in the sale deed, Ex. 1, that Purshottam had after dis posing of his ancestral house left the village but had later on returned and as he had no house to live in, he requested Jagar Nath Ram to get a house for him so that he, could settle down in the village. Jagar Nath was then owning two houses. He offered to sell one of those houses to Purshottam on the condition that if at any time Purshottam wanted to sell that house, he could sell the same to Jagar Nath or his heirs, as the case may be, and if Jagar Nath or his heirs did not purchase the same, then in that event, Purshottam or his heirs, as the case may be, could sell the house to any other person. This condition was agreed to by Purshottam and on this agreement Jagar Nath sold the house to Purshottam. Both the courts below have found the terms of the agreement to be vague, because they do not specify the price at which Purshottam was to sell the house to the plaintiff and the period within which the plaintiff could exercise his right In my view the agreement in question suf fers from no infirmity. The agreement fof sale cannot be held to be void merely be cause no time for performance is specified. At any rate in the instant case the agreement provided that whenever Purshottam desired to sell the house he would have to offer the same first to Jagar Nath, or his heirs as the case may be. If the latter did not pur chase the house within a reasonable time, Purshottam had the right to sell the same to any person he liked. The price at which the house was to be resold to Jagar Nath was also not left indeternunated inasmuch as Purshottam was given a right to sell the house at a reasonable price. While constru ing the terms of the agreement, we have not merely to look at the form or the language but its substance, the governing idea or pur pose of the deed, the context and the sur rounding circumstances. As pointed out above, P_urshottam was in need of a house in the village. Jagar Nath who was cousin of Purshottam agreed to sell one of his houses to him on the agreement that if and when Purshottam wanted to sell that house, he could sell the same to Jagar Nath or his heirs, as the case may be, and in the event they failed to purchase the same, Purshot tam could sell that house to any other per son at a reasonable price. The terms of this agreement were, therefore, quite clear to the parties concerned and did not suffer from any infirmity on account of the alleged vague ness therein. Both the courts below had also held that the said agreement offended against the rule of perpetuity. In support of this finding the learned counsel for the respon dents referred me to (1921) 64 Ind Cas 1001 (Cal.), Rash Behari Gangully v. Shabharanjan Samaddar; 19 All LJ 848 = (AIR 1921 All 97), Dal Singh v. Khubchand, and AIR 1924 Oudh 125, Teju Singh v. Moti Singh. In my view these decisions do not help the respondents. In the case of Rash Behari Gangully (supra), it was held that a covenant for pre- emption which is unlimited in point of time is void on the ground that it is abnoxious to the rule against perpetui ties. Subsequently a Full Bench of the Cal cutta High Court in the case of Moulvi Ali Hossain Mian v. Raj Kumr Hardar, AIR 1943 Cal 417, however, held that covenant for pre-emption in respect of land unrestrict ed in point of time and binding on parties, their heirs and successors did not offend the rules against perpetuity. In the case of Dal Singh (supra) the agreement provided as fol low:- "I the executant promise and execute this document in proof of my promise that when I the purchaser or my heirs want to trans fer the shares in two villages then I will sell them to Ganga Din or his heirs for the sum of Rs. 400/- and will not sell them to any body else." Thus there was a clear agreement be tween the parties that the executant would not sell the properties to anybody else. 1 terms of that contract were held to consto a tranfer of property subject to a limitation absolutely restraining the transferee from parting with or disposing of his interest in the contract inasmuch as he did not have the right to sell the properties to anybody-else except to Ganga Din or his heirs. That is not so in the present case. It was agreed between the parties that in case Jagar Nath or his heirs did not purchase the property, Purshottam would have the right to sell the same to any other person at a reasonable price. Similarly in the case of Teju Singh (supra) the terms of the grant provided that the property could not be transferred to a stranger and such a restriction on alienation was held to be absolute. The facts of this case also, therefore, are distinguishable.
(3.) THE rule against perpetuity is em bodied in Section 14 of the Transfer of Pro perty Act Its object is to restrain the crea tion of future conditional interest in the pro perty. It concerns rights of property only and does not affect the making of contracts which do not create rights of property. It does not, therefore, apply to personal con tracts which in effect do not create interest in property. An ordinary contract for pur chase entered into after the Transfer of Pro perty Act does not by itself create any inte rest in land but the obligation can be enforc ed against a subsequent gratuitous transferee from the vendor of a transferee of value but with notice. The rule against perpetuity has no application to contracts which create no interest in land. The rule against perpetuity as quoted in Section 14 of the Transfer of Property Act begins with these words, "no transfer of property can operate etc.". The provision of Section 14 would therefore not apply to those cases in which there is no "transfer of property". The agreement in the instant case is not a transfer of property at all. Therefore, Section 14 has no applicability.;