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        2019 (10) TMI 1560 - SC - Indian Laws

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        Strict deposit compliance governs pre-emption rights; short deposit cannot be cured later, though failed claims may trigger refund. Under Sections 8 and 9 of the West Bengal Land Reforms Act, 1955, a pre-emptor must strictly comply with the statutory deposit condition: the full stated ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.

                          Strict deposit compliance governs pre-emption rights; short deposit cannot be cured later, though failed claims may trigger refund.

                          Under Sections 8 and 9 of the West Bengal Land Reforms Act, 1955, a pre-emptor must strictly comply with the statutory deposit condition: the full stated sale consideration and the additional 10% must be deposited within time as a condition precedent to invoking pre-emption. Section 9 permits inquiry only into additional sums properly claimed by the transferee, not a short deposit followed by later completion at the applicant's discretion. The time limit for exercising the right is not extendable. Where pre-emption fails, the amount deposited cannot be retained and must be refunded to the applicant with interest, if any.




                          Issues: (i) whether a pre-emptor under Sections 8 and 9 of the West Bengal Land Reforms Act, 1955 can institute a pre-emption application on a short deposit and make up the balance only after inquiry into the stated consideration; (ii) whether, on failure to deposit the full consideration money together with the statutory 10% within time, the applicant can later be granted time to deposit the balance and, if pre-emption ultimately fails, claim refund of the amount deposited.

                          Issue (i): whether a pre-emptor under Sections 8 and 9 of the West Bengal Land Reforms Act, 1955 can institute a pre-emption application on a short deposit and make up the balance only after inquiry into the stated consideration.

                          Analysis: The right of pre-emption is a weak and secondary right and therefore the statutory conditions for its exercise must be strictly complied with. Section 8(1) makes the right operable only on deposit of the consideration money shown in the sale deed together with 10% of that amount within the prescribed period. Section 9 begins only after the deposit mentioned in Section 8 has been made. The inquiry contemplated by Section 9 is into additional sums, if any, properly claimed by the transferee, and not into a discretionary reduced amount chosen by the pre-emptor. Reading the provisions otherwise would make the statutory scheme and the deposit requirement otiose.

                          Conclusion: A pre-emption application cannot be maintained on a short deposit. The full stated sale consideration and the statutory 10% must be deposited within time as a condition precedent.

                          Issue (ii): whether, on failure to deposit the full consideration money together with the statutory 10% within time, the applicant can later be granted time to deposit the balance and, if pre-emption ultimately fails, claim refund of the amount deposited.

                          Analysis: The time limit for exercising the right under Section 8 is sacrosanct and cannot be enlarged. Since the deposit requirement is part of the very trigger for the right, the balance cannot be permitted to be deposited later at the applicant's discretion. At the same time, an amount deposited for a pre-emption claim cannot be retained by either the vendee or the State where the claim does not succeed; any excess or deposited sum must be returned to the applicant with interest, if earned.

                          Conclusion: No further time could be granted to make the balance deposit, but the amount already deposited was directed to be refunded to the pre-emptor with interest, if any.

                          Final Conclusion: The statutory scheme requires complete and timely deposit as a condition for invoking pre-emption, and the pre-emption claim failed while the deposited amount was ordered to be returned.

                          Ratio Decidendi: Under Section 8 of the West Bengal Land Reforms Act, 1955, the right of pre-emption is triggered only by timely deposit of the full stated consideration plus 10%, and Section 9 permits inquiry only into additional sums properly payable, not a short deposit or delayed completion of the statutory deposit.


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