Property lawPre emptionSupreme Court of India

Rambaran Prosad v Ram Mohit Hazra

AIR 1967 SC 744; (1967) 1 SCR 29319661 min read
The case in brief30-second read
Facts
A partition award gave co-owners a mutual right of pre-emption over each other's shares, with no time limit. One share was sold to an outsider. The other co-owner sued to enforce the pre-emption covenant against the buyer.
Issue
Does the covenant bind successors and assignees?
Held
Read in context and based on vicinage, the covenant binds successors and assignees.
Principle
A covenant of pre-emption creates no interest in land (S.14, S.54 TPA), so the rule against perpetuity does not apply to it; under S.40 TPA it binds assignees who take gratuitously or with notice, but not a bona fide purchaser for value without notice.
Cite this

Facts

  • A partition award gave co-owners a mutual right of pre-emption over each other's shares, with no time limit.
  • One share was sold to an outsider. The other co-owner sued to enforce the pre-emption covenant against the buyer.

Issues

  1. Does the covenant bind successors and assignees?
  2. Is it void under the rule against perpetuity?

Held

  • Read in context and based on vicinage, the covenant binds successors and assignees.
  • A contract for sale creates no interest in land (S.54 TPA), so the rule against perpetuity (S.14) does not apply, even with no time limit.
  • Under S.40 TPA the obligation is enforceable against an assignee who takes gratuitously or with notice, but not against a purchaser for value without notice.
  • The appeal was dismissed.

Cite this

Citation

Rambaran Prosad v Ram Mohit Hazra AIR 1967 SC 744; (1967) 1 SCR 293

Reported: https://api.sci.gov.in/jonew/judis/2608.pdf. This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.