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Tilak Raj Bakshi v. Avinash Chand Sharma (Dead) Through LRs.

Civil Appeal · 2019 INSC 923Decided 20 Aug 2019
Civil Appeal Nos. 1524-1525 of 2019
Justice Ashok Bhushan · Justice K.M. Joseph

Background

Three brothers inherited a jointly-owned house in Chandigarh under their father's will and later entered into a 1982 family settlement requiring unanimous written consent of all three before any one brother's share could be sold, with first preference to be given to the other two brothers. One brother (the first defendant) sold his one-third share to an outsider (the second defendant) without the plaintiff-brother's written concurrence. The plaintiff sued, alleging the sale violated the family settlement and seeking to have the sale declared void and to specifically enforce his own right to purchase the share instead. The Trial Court and the First Appellate Court ruled in the plaintiff's favour, but the Punjab & Haryana High Court reversed this and dismissed the suit, holding the first defendant had, in fact, offered the share to the plaintiff, who failed to accept it in time.

Decision Breakdown

The Supreme Court examined the correspondence and conduct of the parties in detail and agreed with the High Court's conclusion that the first defendant had made a genuine offer to sell his share to the plaintiff first, and that the plaintiff failed to act on it, particularly given the first defendant's precarious health and urgency to conclude the sale. The Court also rejected the plaintiff's separate argument that the sale amounted to an unlawful "fragmentation" of the Chandigarh property site under local administration rules, noting the second defendant had become a co-owner whose share had been duly transferred and mutated by the Chandigarh Administration, and that the appropriate remedy for any co-ownership grievance was a suit for partition, not invalidation of the sale. Finding no merit in the appellant's contentions, the Supreme Court dismissed the appeals, with each party bearing its own costs.

Lesson Learnt

A contractual right of first refusal among co-owners is satisfied once a genuine, timely offer is made to the other co-owners: if they fail to act on it, a subsequent sale to a third party will not automatically be invalidated merely because formal written consent was not separately obtained; and allegations of unlawful "fragmentation" of jointly-owned property are properly addressed through a partition suit, not by voiding the sale itself.

Official source (sci.gov.in)View Judgment (PDF)

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