Collusive Decree Created Only to Defeat Prior Agreement to Sell, Not to Claim Pre-Emption: Punjab & Haryana High Court Rejects Co-Sharer Rights
Case Name: Swaran Kaur v. Jagdish Ram and Others connected with cross appeals and contempt petitions
Date of Judgment: 15 May 2026
Citation: RSA-598-1995 and connected matters
Bench: Justice Deepak Gupta
Held: The Punjab and Haryana High Court held that a decree allegedly conferring co-sharership rights upon the plaintiff was collusive and engineered solely to create a right of pre-emption after an earlier agreement to sell had already been executed in favour of the vendees. The Court reiterated that the right of pre-emption is a weak right and cannot be enforced on the basis of an artificial or collusive arrangement intended to defeat pre-existing contractual rights. The Court consequently dismissed both pre-emption suits and allowed the vendees’ appeals.
Summary: The litigation concerned agricultural land measuring more than 301 kanals situated in Haryana, where two separate sale transactions had been executed by co-sharers Smt. Harnam Kaur and Piara Singh in favour of Jagdish Ram and others. The plaintiff, Smt. Swaran Kaur, instituted two suits claiming possession by way of pre-emption on the ground that she was a co-sharer and that the sales had been effected without notice to her under the Punjab Pre-emption Act.
The defendants contested the suits by asserting that long before the impugned sale deeds were executed, the vendors had already entered into an agreement to sell dated 09.03.1990 in favour of the defendants regarding the entire land. According to the defendants, after execution of the agreement to sell, a collusive decree dated 19.04.1990 was engineered amongst close family members solely to create co-sharership rights in favour of Smt. Swaran Kaur so that she could later claim pre-emption against the vendees.
The High Court undertook an extensive analysis of the pedigree table, the chronology of events, and the surrounding circumstances. The Court noted that Mohinder Singh who suffered the decree in favour of his son and daughter-in-law was closely related to both vendors and was actively involved in negotiations with the defendants. The Court found it highly significant that the decree conferring co-sharership rights was obtained only after execution of the agreement to sell and shortly before the target date fixed for execution of sale deeds.
Justice Deepak Gupta observed that the timing of the decree, the close familial relationship amongst the parties, and the absence of any mutation or reflection of the decree in the revenue record clearly demonstrated that the decree was not a bona fide adjudication of rights but a calculated device to defeat the contractual rights already accrued in favour of the vendees.
The Court further held that a person who acquires co-sharership rights through such a collusive arrangement cannot invoke the equitable jurisdiction relating to pre-emption. Reiterating settled law, the Court emphasized that the right of pre-emption is merely a weak right of substitution and can be defeated by all lawful means.
Apart from the issue of collusion, the Court also found serious defects in the maintainability of the suits. The plaintiff had specifically pleaded lack of notice regarding the intended sales under Sections 19 to 21 of the Punjab Pre-emption Act, yet neither of the vendors was impleaded as a party nor examined as a witness. The Court held that in such circumstances, the vendors were crucial witnesses whose absence materially affected effective adjudication of the controversy.
The Court also dealt with connected contempt petitions alleging violation of interim orders passed during pendency of the appeals. However, after dismissing the substantive pre-emption claims themselves, the Court declined to continue contempt proceedings, holding that no enforceable equitable claim survived in favour of the plaintiff.
Decision: The High Court dismissed RSA Nos. 598 and 599 of 1995 filed by Smt. Swaran Kaur and allowed RSA Nos. 741 and 742 of 1995 preferred by the vendees. The judgments of the first appellate Court granting decrees of pre-emption were set aside and both suits filed by the plaintiff stood dismissed. The connected contempt petitions were also dismissed.