P L D 1989 Lahore 440 (PLP)

This revision is filed by Wali Muhammad, plaintiff, against the judgment and decree of affirmance passed by the learned Additional District Judge, Sahiwal, dated 12‑10‑1985; by which he dismissed the appeal filed by the petitioner and upheld the decision of the trial Court dated 5‑3‑1985.

2. The salient features of the case leading to this petition are: that the land in dispute is the State land, was granted to Wali Muhammad under the Ejected Tenants Scheme but was cancelled by the Collector and granted to one Muhammad Ilyas, that Wali Muhammad had been following the case for the restoration of grant in his favour. He appointed Muhammad Ibrahim as attorney through Registered Deed of Attorney dated 15‑11‑1977 empowering Muhammad Ibrahim to prosecute the case of Wali Muhammad. The said Muhammad Ibrahim, as attorney, made the sale of the land in dispute in favour of Hakim Ali, Muhammad 'Aslam, Qasim Ali, Mst. Naziran Bibi and Hafiz Muhammad Siddique through Registered Sale‑Deed dated 22‑6‑1981 after the conferment of deed of conveyance. The petitioner Wali Muhammad filed suit for a declaration to the effect that he was an illiterate villager, a simple person and an old man, that the Sale‑Deed was without consideration and made by Muhammad Ibrahim without any authority, that he had made the sale of the land in dispute in favour of this three sons and two associates by practising deception on him. The suit was resisted. The learned trial Court framed the following issues:‑ (1) Whether the suit cannot proceed in view of its present form? OPD (2) Whether the valuation of the suit is incorrect for the purposes of court‑fee and jurisdiction? OPD (3) Whether the registered sale‑deed dated 22‑6‑1981 is void on the basis of fraud and ineffective on the rights of the plaintiff and grounds mentioned in paras. 2 to 4 in the plaint? (4 )' Relief. ,

3. The learned trial Court by judgment and decree dismissed the suit. On issue No.l, the first Court came to the conclusion that Wali Muhammad was in possession of land in dispute. On issue No.2, it was held that valuation for the purpose of court‑fee and jurisdiction was correct. On issue No.3, it was concluded that the Sale‑Deed was legal. In result, the first Court dismissed the suit. The learned Additional District Judge by impugned judgment and decree maintained the decision of the trial Court. Hence this revision.

4. Both the learned counsel, confined their submissions to issue No.3 and did not dispute the findings of the lower Court on issues No.l and 2.

5. Learned counsel for the petitioner in support of the petition contended that Wali Muhammad was an illiterate villager while Muhammad Ibrahim was a clever person, that he ‑ was an attorney enjoying a position of influence and fiduciary position over his principal. .It was urged that the Sale‑Deed executed by attorney was procured through undue influence over his principal who was kept in total darkness about the transaction and who was not apprised about the making of sale. Reliance was placed on section 16 of the Contract Act.

6. The second attack of the petitioner was that Muhammad Ibrahim made a sale in favour of his minor sons Hakim Ali, Muhammad Aslam, Qasim Ali and Mst. Naziran Bibi and Hafiz Muhammad Siddique who were his associates, therefore, this Deed of Sale was hit under section 215 of the Contract Act. Reliance was placed on Fida Muhammad v. Pir Muhammad Khan and others (P L D 1985 SC 341).

7. Learned counsel for the petitioner next contended that the first appellate Court committed error of law by overlooking the evidence furnished` by the parties in respect of passing of consideration and mechanically affirmed the finding of the trial Court on issue No.2 under the shadow of deed of attorney dated 15‑11‑1977 and cancellation deed dated 30‑6‑1981.

8. It was urged that both the Courts below did not take into consideration that Muhammad Ibrahim and other vendees neither established the passing of consideration nor proved the delivery of possession, therefore, the Sale‑Deed was totally void and of no consequence.

9. Learned counsel for the respondents in reply supported the impugned decision. A preliminary objection was taken to the effect that finding on issue No.3 by the two Courts was a concurrent finding of fact and cannot be reopened in revisional jurisdiction of this Court. It was further urged that the Deed of Attorney dated 15‑11‑1977 was an admitted document between the parties. It contained the power of sale. Even another admitted document Cancellation Deed Dated 30‑6‑1981 completely demonstrated that Wali Muhammad had given the authority to Muhammad Ibrahim to sell the property in final success of the litigation. It was suggested that Wali Muhammad had started litigation on account of non‑payment of consideration by Muhammad Ibrahim to him. It was argued that the non‑payment of consideration alone did not vitiate the Sale‑Deed. A Sale‑Deed is complete when the parties to sell intend to transfer a right in favour of the vendee without any reservation. It was pointed out that Wali Muhammad in case of non‑payment of consideration from, his agent is only entitled to file a suit for payment of consideration against his attorney. Reliance was placed on Mst. Murrian etc. v. Suleman etc. PLD 1984 SC (AJ&K) 63 and Muhammad Shafi and others v. Allah Dad Khan P L D 1986 SC 519.

10. I have heard the arguments of the parties and examined the record with great care. In order to come to a correct conclusion, the questions calling for determination are whether Muhammad Ibrahim was authorised by Deed of Attorney dated 15‑11‑1977 to make the sale and whether the said attorney had under the deed of Attorney abused his position within the framework of Section 215 of the Contract Act in making the alienation in favour of his three sons.

11. It is in evidence that Wali Muhammad is an old issueless person, is totally illiterate, had been relying upon Muhammad Ibrahim who is a relation of his wife. Muhammad Ibrahim was constituted as attorney to prosecute his case in respect of cancellation of grant in his favour before the appropriate authorities. Without any quarrel, at the time of executing power of attorney Wali Muhammad did not posssess any transferable right. The Deed of Conveyance was issued in favour of Wali Muhammad in 1981 under the provisions of Colonization of Government Lands Act.

12. The learned Additional District Judge while deciding the respective contentions of the parties on issue No .3 gave the following adjudication: ‑ "Thus from the evidence of the appellant himself and the documents Ex. D1, and Ex. D3, it is sufficiently proved that the appellant had executed general power of attorney willingly and that the general attorney had been authorised to deal with the property and to alienate it and that there was no fraud, misrepresentation and undue influence in respect of execution of general power of attorney. If the general power of attorney had failed to pay consideration received, by him to the appellant it gave no authority to the appellant to challenge the impugned transaction and his remedy lay only against general attorney to render account to him. In view of this I am satisfied that the appellant failed to prove that the impugned sale‑deed was void or was based on fraud and that the appellant was not bound by the said transaction. . The general attorney had the authority to alienate the property and he exercised this authority when the authority was intact . So there was no question of fraud or misrepresentation and there is no reason to hold that the impugned transaction was void."

13. It will be noticed from the aforesaid finding that the first appellate Court neither adverted to the evidence in respect of a consideration nor decided the effect of non‑payment of consideration. It is noteworthy to mention that Nazir Ahmad DW2, husband of Mst. Siddiquan deposed that the consideration was paid by Muhammad Ibrahim to Wali Muhammad at the time of execution of Sale‑Deed who was present at the time of execution, while Muhammad Siddique another vendee stated to the effect that he made the payment of consideration to Wali Muhammad himself while Muhammad Ibrahim attorney even went a bit further and stated that he paid the entire consideration received from .all the vendees to Wali Muhammad before the punchayat. These three versions arc mutually contradictory and belie each other. I amp very clear in m, mine that Mst. Naziran Bibi, Muhammad Siddique, and Muhammad Ibrahim have not paid any consideration to Wali Muhammad ,at all and as a matter of fact Muhammad Ibrahim had got executed power of attorney by practising deception 'on Wali Muhammad who was an illiterate rustic villager. Wali Muhammad at that time did not possess any transferable land and could not give power to make sale of land in dispute which was subject‑matter of the dispute at that time.

14. From the evidence on record, it is clear that Wali Muhammad was old, issueless person and illiterate. It was, therefore, imperative duty of the attorney to establish that the Sale‑Deed made by him was bona fide transaction.

15. Even there is another aspect of the case which has gone unnoticed by both the Courts below. The beneficiaries of the Sale‑Deed are three minor sons of Muhammad Ibrahim, and Mst. Naziran 4ibi and Hafiz Muhammad Siddique who appeared to be associates of Muhammad Ibrahim.

16. It is well‑settled principle that an ignorant agriculturist is just like a Pardanashin Lady and section 16 of the Contract Act is applicable to transaction made by such innocent villager. Section 16 is as follows:‑ 16. 'Undue influence' defined.‑(1) A contract is said to be induced by 'undue ‑influence' where the relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other. (2) In particular and without prejudice to the generality of the foregoing principle, a person is deemed to be in a position to dominate the will of another‑ (a) where he holds a real or apparent authority over the other, or where he stands in a fiduciary relation to the other; or (b) where he makes a contract with a person whose mental capacity is temporarily or permanently affected by reason of age, illness, or mental or bodily distress. (3) where a person who is in a position to dominate the will of another, enters into a contract with him, and the transaction appears, on the face of it or on the evidence adduced, to be unconscionable, the burden of proving that such contract ryas not induced by undue influence shall lie upon the person in a position to dominate the will of the other. Nothing in this subsection shall affect the provisions of section 111 of the Evidence Act, 1872 (I of 1872).

17. The bare analysis of Section 16 of the Contract Act postulates the following ingredients of undue influence:‑ (i) that the relations subsisting between the parties were such that one of them was in a position to dominate the will of the other; (ii) that the transaction secured unfair advantage to the person in a position to dominate the will of the other; (iii) that this unfair advantage resulted from the use of that position.

18. Whenever it is established that the person who has executed certain contract was under the influence of a person who dominated him, it becomes the imperative duty of the beneficiary of contract to establish that the transaction was entered into by an illiterate old person without any undue influence.

19. It is a well‑established canon of law that agency is founded on the principle of high trust and confidence. An agent possesses a dominent influence over his principal. In Wajid Khan's case (Supra 18 IA 144), the grantee was the managing agent in great confidence and the grantor, an old pardanashin illiterate lady incapable of managing her business. The grantee took advantage of this and under the guise of a trust from the old lady contrived to obtain a pecuniary benefit. The Privy Council was of the view that since the grant was also devoid of valuable consideration, the onus was on the grantee to prove the bona fides of the transaction, independent advice and want of undue influence.

20. In Abdul Majeed v. Khirode Chandra Pal (29 Indian Cases 843 = 19 C.W.N.809) it was argued that section 16 of the Contract Act dealt with the cases of undue influence only and as there was no plea of undue influence, the Court should not have gone into the nature of the bargain. Repelling this argument, the Court held as under:‑ "In my opinion this contention cannot be maintained, nor ought a Court of law to be alter in placing a restricted construction upon the language of a remedial Act. The section means exactly what it says, namely, that if there is evidence which satisfies the Court that the transaction is harsh and unconscionable, using those words in a plain and not in any way technical sense, the Court may reopen it, provided, of course, that the case meets the other condition required. Those are only illustrations, and, as in the case of fraud, it is neither practicable nor expedient to attempt any exhaustive condition. What the Court has to do in such circumstances is, if satisfied that the interest or charges are excessive, to see whether in truth and fact and according to its sense of justice the transaction was harsh and unconscionable. We are asked to say that an excessive rate of interest could not be of itself evidence that it was so. I do not accept that view. Excess of interest or charges may of itself be such evidence, and particularly if it be unexplained. If no justification be established, the presumption hardens into a certainty."

21. From the evidence on the record it is clear that Wali Muhammad was an old and issueless illiterate person and relied upon Muhammad Ibrahim. Muhammad Ibrahim had not brought on record an inch of evidence to the effect that he made the sale without the exercise of his dominent influence and by providing independent advice to Wali Muhammad. His only case is that he had the power of sale under the Deed of Attorney and has validly made the sale in favour of his three sons and vendees. I am afraid this cannot be countenanced. Therefore in my humble view the sale is vitiated on account of exercise of undue influence over Wali Muhammad by Muhammad Ibrahim.

22. Even there is another aspect of the case that at the time of execution of power of attorney, Wali Muhammad had no transferable' right in his favour, therefore, he could not confer the power of sale on attorney in respect of rights which were not in existence under section 6 of the Transfer of Property Act.

23. Here I will pause to examine the objection of the learned counsel for the petitioner that the deed of sale was hit by the principles contained in section 215 of the Contract Act. There is no dispute to the effect that Muhammad Ibrahim made the sale of property in dispute in the following manner:‑ (1) Hakim Ali (2) Muhammad Aslam minor 24 shares (3) Qasim Ali sons (4) Mst. Naziran Bibi 16 shares (5) Hafiz Muhammad Siddique 24 shares.

24. Hakim Ali, Muhammad Aslam and Qasim Ali are his minor sons whose minority has been suppressed while Mst. Naziran Bibi and Hafiz Muhammad Siddique are his associates from the beginning.

25. It is elementary principle of agency that relationship between the agent and the principal is very delicate and of a high trust. In this relationship, the agent occupies the position of dominant influence. He is not permitted to make a transfer of the property of the principal in his own favour or in favour of his associates without the consent of his principal. This proposition came into consideration in Mathra Das‑Jagan Nath v. Jiwan Mal‑Gian Chand (ILR 1928 Lah.7), in which Mr. Tek Chand, J. speaking for the Bench, observed:‑ "It is a necessary incident of the contract of agency that the agent stands in a fiduciary relation towards his principal. His position is one involving confidence, and in the discharge of this duties, he must act with the most perfect good faith towards his principal, and should not in any way abuse the confidence reposed in him. He is bound to use his best endeavours to promote the interest of the person who has employed him. He will not be permitted to enter into any transaction in which his personal interest conflicts with his duty towards his principal, except with the consent of the latter, given after all the material circumstances and the exact nature and extent of the interest of the agent have been fully disclosed to him. In law as well as in equity an agent for the sale of goods belonging to the principal cannot, while actually selling the property or making settlements for damages on foot of such transactions, make any secret profit for himself or for persons with whom he is associated. The proposition is too elementary to require an elaborate discussion, but it seems t:: me necessary to emphasize it, as the real nature of the obligations of the agent is often lost sight of by the mercantile community in this province. It is well settled that "a person, who stands in a relation of trust or confidence to another shall not be permitted in pursuit of his private advantage to place himself in a situation which gives him a bias against the due discharge of that trust or confidence. 26.Similarly in Bentley v. Graven (1853‑104 R.R.373), Mr. Romilly M.R. observed:‑ "Two principles with relation to the doctrine of principal and agent have been recognized from the earliest times. One is that an agent employed to purchase cannot legally buy his own goods for his principal. Neither can an agent, employed to self, himself purchase the goods of his principal. If he should do so, and thereby make a profit, his principal may either repudiate the transaction altogether or adopting it may claim for himself the benefit made by his agent. It is founded on this principle that an agent will not be allowed to place himself in a situation which under ordinary circumstances, would tempt a man to do that which is not the best for his principal and it is the plain duty of every agent to do the best he can for his principal."

27. The rigour with which the English Courts enforce the rule is clear from the following remarks of Sir George Jessel M.R. in Dunne v. English (1874, L.R.18 Equity 524):‑ "It is not enough for an agent to tell the principal that he is going to have an interest in the purchase, or to have a part in the purchase. He must tell him all the material facts. He must make a full disclosure. * * * * * * * If in a transaction between principal and agent it appears that there has been any underhand dealing by the agent, e.g. that he has purchased the estate of the principal in the name of another person instead of his own, however, fair the transaction may be in other respects, it has no validity in a Court of Equity.

28. Likewise, Rigby L.J. in Lagunas Nitrate Coy v. Lagunas Syndicate (1899, L.R.2 Ch.392), laid down: "It is an equitable rule, which has always been guarded and enforced with the utmost jealousy that no fiduciary agent shall, under pain of consequences thoroughly well‑known, intentionally place himself in a position in which his interest may conflict with his duty. The rule is not a mere arbitrary or technical rule of equity, but is based upon high grounds of morality and Courts of Equity have always held any departure from it to be a very serious wrongdoing. The equitable rule referred to, does not in any way depend upon fraud or any presumption of advantage actually taken. Indeed, it applies equally, even though it be shown that no advantage has been taken. The rule is made general in order to prevent the danger arising from the difficulty of disproving in particular cases that duty has given way to interest."

29. The principles contained in Bentley v. Graven (1853‑104 R.R.373), Dunne v. English (1874 L.R.18‑ Equity 524) and Langunas Nitrate Coy v. Langunas Syndicate (1899, L.R.2 Ch.392) were followed in Mathra Das Jagan Nath v. Jiwan Mal‑Gian Chand (ILR 1928 Lah.7) and have been given statutory recognition in Section 215 of the Contract Act which is as follows:‑ "

215. Right of principal when agent deals, on his own account in _business of agency without principal's consent. If an agent deals on his own account in the business of the agency, without first obtaining the consent of his principal and acquainting him with all material circumstances which have come to his own knowledge on the subject, the principal may repudiate the transaction, if the case shows either that any material fact has been dishonestly concealed from him by the agent, or that the dealings of the agent have been disadvantageous to him.

30. Applying the aforesaid principle to the facts of the case it is! clear that Muhammad Ibrahim attorney flagrantly abused his authority by entering into contract of transfers with his three minor sons and two other associates without any consent of Wali Muhammad. Wali Muhammad was, therefore, legally justified to repudiate the impugned sale‑deed.

31. Reverting to the preliminary objection of the learned counsel for the respondent that the revisional jurisdiction of this Court is of limited nature and the revisional Court has no jurisdiction to set aside the concurrent finding of fact arrived at on issue No.3, is devoid of force. There can be no cavil with the proposition that the revisional jurisdiction is intended to correct the errors of jurisdiction. Whenever the revisional Court comes to conclusion that the subordinate courts have arrived at conclusion in contravention of provisions of law, or in disregard of material evidence, it has the power to set aside the concurrent finding of the subordinate courts and do the complete justice between the parties. The aforesaid rule is enunciated in Haji Ilahi Bakhsh v. Noor Muhammad and others P L D 1985 SC 41, Jan Muhammad Khan v. Shah Mir Hussain and others (1985 SCMR 2029. The objection of the respondent is, therefore, repelled.

32. The result of whatever has been stated above is that I am of the view that the finding of the first appellate court as well as the trial Court on issue No.3 suffers from misapplication of section 16 and section 215 of the Contract Act, and also suffers from non- consideration of material evidence that neither Wali Muhammad received the consideration nor delivered the possession. I accordingly accept the petition, set aside the judgment and decree passed by the learned Additional District Judge dated 12‑10‑1985 and the judgment and decree passed by the Civil Judge dated 5‑3‑1985. I decree the .suit filed by Wali Muhammad plaintiff.

33. In view of the difficult nature of the questions involved, the parties are left to bear their own costs. A . A . /W‑66/L Revision accepted.