P L D 1967 Supreme Court 418 (PLP)

CORNELIUS, C. J.‑The facts relevant to this appeal by special leave are as follows. The appellant Zulfiqar Ali is plaintiff in a pre‑emption suit respecting a sale of certain land by respondent Mian Bashir Ahmad to the respondent Mian Akhtar Islam. The suit was filed on the 17th March 1959, the sale having taken place on the 11th April 1958. Under section 22 (1) of the Punjab Pre‑emption Act, it is obligatory on the Court entertaining such a suit to require the plaintiff either to deposit in Court a sum not exceeding one‑fifth of the probable value of the property sold, or to give security to the satisfaction of the Court for the payment, if required, of such probable value in full. Such an order is to be made at or before the settlement of issues in the case. The Court must also fix a time within which compliance is to be made with its order. In this case, the first order made under section 22, sub section (1) was on the 14th May 1959, requiring the plaintiff to furnish security for the full amount of the probable value by the 30th July 1959. On the latter date, a security bona was filed. The vendee objected to this bond on the ground that the stamp duty was insufficient. The trial Court thereupon fixed the 11th September 1959, for hearing of arguments on the point raised. On the same day, however, the plaintiff expressed willingness to deposit zar‑a panjam, that is to perform the alternative obliga tion laid down by the Act to deposit one‑fifth of the probable value in cash. The trial Court permitted him to do so and the money was actually deposited on the 2nd September 1959. The vendee again objected that there had been no proper compliance with the requirement of section 22(1) and asked that the plaint should be rejected in terms of section 22(4). The latter section requires that a plaint shall be rejected "if the plaintiff fails within the time fixed by the Court or within such further time as the Court may allow to make the deposit or furnish the security men tioned in subsection (1)." The trial Court made an order on the 29th May 1962, rejecting the plaint. It held that the plaintiff did not comply with the order to furnish security, because the strong duty on the security bond was not sufficient. Its decision is expressed in the following words:‑ "It shall be presumed that the order of the Court was that security bond should be executed by the plaintiff on the proper stamp paper and if the security bond was found to be impro perly stamped, it could not be said that due compliance of the Court's order was made." The judgment of the trial Court does not contain any examina tion of the adequacy of the stamps on the security bond. It does not mention what amount of stamp duty was paid or how much was necessary to be paid. Long before the order of the trial Court rejecting the plaint on the 29th May 1962, the vendee had taken the Court's order of the 30th July 1959, before the High Court in revision. A copy of the grounds for revision has been placed on the paper book. The facts were fully set out, and there was included a ground on which the validity of the trial Court's order of the 30th July 1959, permitting the plaintiff to deposit one‑fifth of the probable value of the land by the 11th September 1959, was directly called in question. It was said that the plaintiff had not shown any good ground for enlargement of time, and "the pre‑emptive right being a piratical right, the Court should have not granted the request as it was not made bona fide". The Court in enlarging time had done so "without exercising its judicial mind as to the sufficiency of the ground", and had acted "in the exercise of its jurisdiction illegally or with material irregularity". The revision petition was dismissed by the High Court in limine on the 10th December 1959. Against the rejection of the plaint by order of the trial Court dated the 29th May 1962, an appeal was taken before the District Judge which was allowed principally on the ground that "by refusing to interfere on the revisional side in the matter of the order allowing the plaintiff to deposit zar‑a panjam in cash, the High Court confirmed this order and the plaintiff was thus to comply with this order and not the one for furnishing bond." The appeal was accordingly allowed and the case was remanded for trial. A second appeal was taken before the High Court by the vendee and was allowed. With reference to the decision of the High Court in the revision petition, it was held that since the order was made in limine without summoning the opposite‑party, it amounted to mere refusal to exercise super visory jurisdiction under section 115 of the Code of Civil Proce dure, and could not be interpreted as affirmation of the decision of which revision was sought. With reference to the validity of the order allowing deposit of zar‑a panjam on an extended date, the learned Single Judge relied on two decisions of the Lahore High Court. The first is the case of Zaman Mehdi Khan v. Hayat Khan (A I R 1938 Lah. 452), where after an order for security, a surety bond had been furnished and accepted. Thereafter the surety withdrew and the plaintiff was thereupon directed to deposit cash within a certain time, which he failed to do. The suit was accordingly dismissed, but on appeal, the District Judge held that when the security bond had become void, the Court should have asked for fresh security and not cash. Reference was made to sub section (5)(b) of section 22, which lays down that when security becomes void or insufficient for any cause, the Court shall order the plaintiff to furnish fresh security within a time to be fixed, and if the plaintiff fails to comply with such an order, the suit shall be dismissed. In that case, a security furnished had in fact become void, and section 22(5)(b) was clearly applicable, but the learned Single Judge in the High Court went on to say that section 22(1) was no longer applicable as issues had been framed and the option as regards choice between cash and security had already been exercised." It should be noted that in that case, the District Judge had remanded the case to the trial Court with a direction that fresh security should be ordered to be furnished, and that the suit had not been dismissed. The case is distinguishable also on the ground that the terminal date fixed by section 22(1) for furnishing either a cash deposit or security had already elapsed, and therefore it was not open to the trial Court at the stage when the security became void to exercise a choice between cash and security. That is not the case here, as it appears that issues in the case have not yet been settled on the merits. The second case relied upon is that of Zorawar Singh v. Jasbir Singh (A I R 1938 Lah. 606), which appears not to be strictly relevant since what it lays down is that a Court acting under section 22(5)(6) has no power to extend the time which it allows under that provision. This is based on the fact that this provision contains no express power to extend time in explicit terms, whereas subsection (4) of section 22 provides an express power to extend the time. The third case mentioned without discussion in the judgment of the learned Single Judge is that of Muhammad Ahmad v. Azizur Rehman (A I R 1947 Lah. 72). It was held in that case that the discretion conferred upon a Court section 22(4) . to extend time is set out in absolute terms, and is not to be restricted to cases of a special or extreme kind. In this case, however, the point arising is not only one of extension of time. The question is whether at a time prior to the settlement of issues in a pre‑emption case, the trial Court has power to vary its decision as to whether it will reel airs a cash deposit or security. On a later date, the learned Single Judge who allowed the appeal and restored the order of the trial Court rejecting the plaint, refused a certificate for an appeal under the Letters Patent, and thereupon, the plaintiff moved this Court for leave to appeal further. It was granted to consider. 'whether an order for deposit of a fifth of the ostensible' sale‑price, by the plaintiff, in a suit for pre‑emption, following! failure on the plaintiff's part to satisfy an order for deposit of security for the same amount, is to be deemed to be an independent order in the premises, and not in continuation of the first order and if it be regarded in the latter light, whether it was within the competence of the Court to make it." The mention in this order of "failure on the plaintiff's part to satisfy an order for deposit of security" is not strictly correct on the facts. The trial Court had not found on the 30th July 1959, that there had been in fact a failure. An objection had been taken to that effect, and the Court had fixed a date for hearing arguments on the legal question of adequacy of stamp duty that had been raised. No decision had been given on this point, and we note here that if the decision of the case were to turn on that point, it was appropriate that it should have been referred back to the trial Court, rather than that a decision should have been given on the point in the High Court, as has been done. The true question that arises in this case is whether on the 30th July 1959, in the circumstances then existing, it was open to the Court to exercise a fresh option whether to demand a cash deposit or security. Some assistance in clarification of this question is to be derived from the observations in Zaman Mehdi Khan's case, where it was said that since issues had already been settled, section 22(1) was no longer applicable and the option as between a cash deposit and security had already been exercised. In an earlier decision of the Lahore High Court in the case of Raja Khan v. Muhammad Khan (1 L R 11 Lah. 531), a somewhat similar question arose. In a pre‑emption suit, the trial Court had ordered deposit of zar‑a panjam by the 6th August 1928, on which date, the plaintiff filed instead a security bond for payment of the full amount of the purchase money, and this was accepted by the Court and the case was allowed to proceed. At a later stage, it came before another Subordinate Judge, who rejected the plaint on the finding that the plaintiff had failed to comply with the first order requiring deposit of zar‑a panjam. Thereupon, an appeal was filed before the District Judge, who disagreed with this view and held that by accepting the security bond on the 6th August 1928, the trial Court had "by implica tion varied his previous order as regards cash payment and the plaint was therefore not liable to be rejected." The appeal being accepted the vendee appealed further to the High Court, where it was found that the question for decision was "whether there is any presumption that the learned Subordinate Judge varied his previous order by accepting a security bond instead of cash deposit on the 6th August 1928". A Division Bench held that the District Judge had erred in law in holding that the acceptance of the security bond implied that the previous order for cash deposit had been varied. Absence of an express order by the trial Judge was the point on which the decision in the High Court turned as will appear from the following passage in the judgment of the Division Bench:‑ "The plaintiffs had filed an affidavit that they had made an oral request to the Subordinate Judge that the security bond should be taken instead of cash deposit, but the learned District Judge has apparently not accepted this affidavit as reliable. If any such oral request had been made and the Subordinate Judge had intended to vary his order he would in all probability have expressly said so." In the present case, the trial Judge has expressly said in writing that he accepted the request made on the 30th July 1959, by the plaintiff to be permitted to deposit zar‑a panjam. The words of his order are as follows in translation:‑ "The plaintiff wishes to deposit cash, zar‑a panjam in cash to be deposited by the next date," viz., the 11th September 1959. As has been seen, the deposit was made on the 2nd September 1959. The question which then arises is whether the trial Court was competent to vary its original order requiring security and to replace it by an order in the alternative form allowed by the law, viz., an order for deposit of one‑fifth of the purchase price. At the date when the order of the 30th July 1959, was made, issues had not yet been settled. In Zaman Mehdi Khan's case and that of Raja Khan, expressions have been used which indicate that in the view of the learned Judges of the Lahore High Court, such a power does exist, but it must be exercised b.‑fore the settlement of issues, and it must be exercised expressly. That view is in our opinion, supportable upon a consideration of the wording of subsections (1) and (4) of section

22. There is nothing in sub section (1) to indicate that the choice can be made only once in a suit. It is well‑known that the requirement of a cash deposit or security contained in the subsection is intended to guard against vexatious and mala fide litigation, and thus to guarantee a vendee against frivolous proceedings on the part of possible pre‑emptors. The deposit is a token of good faith, and equally the security for the full amount of the purchase 1; price constitutes a guarantee that plaintiff will meet whatever demand is made for money in case his suit succeeds. The furnishing of a guarantee in one or the other form is made obligatory by subsection (1), but the subsection contains no words to indicate that the choice between the two forms of guarantee can only be made ones, and so far as the safeguard of the interests of the vendee is concerned, the two guarantees are to be placed on a level. An indication that the law does not impose so strict a condition that a form of guarantee once chosen cannot be altered by the trial Court within the time permitted is to be found in the wording of subsection (4) which reads as following "If the plaintiff fails within the time fixed by the Court or within such further time as the Court may allow to make the deposit or furnish the security mentioned in subsection (1) or (2) . . . . . his plaint shall be rejected or his appeal dismissed as the case may be." It seems to us that if the intention of the law were that the Court's first choice should be unalterable, there would have been no need to mention in subsection (4) both the alternatives, namely, the deposit as well as the security, and it would have been sufficient to say that the plaint should be rejected if the plaintiff should fail within the time fixed to comply with the order made by the Court in the relevant respect under section 22(1). A similar result might have been produced by adding the words "as the case may be" after the words "to make the deposit or furnish the security". The language used in subsection (4) appears to us to leave open to the Court under subsection (4) the same choice as the Court could exercise at the earlier stage under sub section (1). In this case, the time for making a choice had not expired, so it could not be said that the option was no longer alterable. By an order in writing, the trial Court purported to vary the original order for security and replace it by the alter native order that the law allowed, for the making of a deposit within a certain time, and a deposit was duly made. Accordingly, we are unable to accept the view of the learned judge in the High Court, which is expressed in the following words:‑ "the Court having allowed the plaintiff to furnish security in the first instance, it was left with no power to direct him to make a deposit of one‑fifth of the sale money." That is a sufficient finding for disposal of the appeal, but we would add that we must not be understood to agree with the view of the learned Single Judge that the order of the High Court on the vendee's earlier revision, dismissing that petition, has merely a supervisory quality, and does not constitute a rejection of the contention raised in the ground of revision reproduced in the earlier part of this judgment. We allow this appeal and setting aside the order of the High Court we restore that made by the District Judge, but in view of the difficult point of law that was raised, we leave the parties to bear their own costs. A. H. Appeal allowed.