KHUSHI MUHAMMAD vs Mst. ATTA ELAHI
This petition for special leave to appeal arises from concurrent judgments of the trial court, appellate court, and the High Court dismissing a pre-emption suit. The respondent had acquired a tract of land through a transaction involving both cash payment and a transfer of land, which the lower courts concurrently characterized as an exchange rather than a sale. The core legal question before the Supreme Court is whether a transaction where the major portion of the consideration is paid in money constitutes a sale rather than an exchange for the purposes of pre-emption. Granting leave to appeal, the Supreme Court held that the contention regarding the nature of the transaction when the major portion of consideration is paid in cash requires detailed examination. The key principle laid down is that the proportion of monetary consideration versus property transfer in a transaction determines whether it amounts to a sale or an exchange.
- Whether a transaction where the major portion of the consideration is paid in the form of money is a sale or an exchange?
- Can a pre-emption suit be dismissed solely on the ground that the underlying transaction is an exchange?
ORDER
SAAD SAOOD JAN, J.--This petition for special leave to appeal arises out of a pre-emption suit which was dismissed by the trial Court. On appeal the Additional District Judge affirmed the judgment and decree of the trial Court and the High Court declined to interfere with the said judgment and decree in revisional jurisdiction.
2. The respondent obtained 26 kanals and 11 marlas of land from Mst. Mamen. According to the findings of the Courts below the market value of this land was Rs.5,00,000. By way of consideration she paid Rs.3,75,000/- in cash to Mst. Mamen and also transferred 12 Kanals and 16 Marlas of her own land to the latter. The petitioner who was a collateral of Mst. Mamen and also a co-sharer in the khata of which the land obtained by the respondent formed a part filed a suit for pre-emption.
The suit was dismissed by the trial Court solely on the ground that the transaction between the respondent and Mst. Mamen was that of an exchange. This finding was affirmed by the Additional District Judge and the High Court.
3. In support of this petition it is contended on behalf of the petitioner that where the major portion of the consideration is paid in the form of money the transaction is one of sale and not that of exchange. This contention needs examination. Leave to appeal is granted. Security for costs in the sum of Rs.2,000/- The appeal may be made ready for hearing on the present record with permission to the parties to file additional documents, if any.