1988 PLP 1783 (CLC)

6. The questions that require consideration in the case are whether the sale in favour of the appellants‑plaintiffs was void ab initio or voidable; and whether in the facts and circumstances of the case the appellants can invoke the equitable principles contained in sections 43 and 55 of the Transfer of Property Act and section 18 of Specific Relief Act. The facts relevant for the purposes of these questions are not in dispute except the assertion that the appellants‑plaintiffs had paid the charges payable on account of the mortgagees to the Settlement Authority and that they had redeemed the land was controverted with the assertion that these charges were paid by Muhammad Yaqoob respondent himself. This assertion, however, does not stand established on record and was rightly not accepted as except for the bald statement of Haq Nawaz plaintiff appearing as P.W.9 to the effect that they had paid Rs.4,000 to Muhammad Yaqoob for payment of mortgage money, no other evidence whatsoever was brought on record. The other relevant facts are that the suit land was allotted to Muhammad Yaqoob, respondent No.l, in lieu of mortgagee and mortgagor's rights held in the land left in India, vide R.L.II Exh.D.13. Muhammad Yaqoob respondent mortgaged the land with possession with Muhammad Siddique vide mortgage deed, dated 12‑9‑1961 and additional charge was created on the land in favour of Muhammad Siddiqu a vide registered deed, dated 25‑9‑1961. Both these mortgages were given effect to in the Revenue record vide mutations Exh.P.5 and EXh.P.6, dated 20‑7‑1962. The appellants‑plaintiffs obtained the land through sale‑deed, dated 1‑11‑1962, Exh.P.2. The mutation respecting the sale was entered but was cancelled on 3‑3‑1966. The mortgages in favour of Muhammad Siddique were extinguished vide order of the Collector, dated 3‑1‑1967 and consequently mutations of redemption Exh.D.9 and Exh.D.10 were sanctioned in the Revenue record on 31‑8‑1967. The Government charges payable by Muhammad Yaqoob allottee in respect of the allotted land were paid on various dates frcm 4‑7‑1966 to 24‑6‑1967 vide documents Exh.D.l to Exh.D.7 and the proprietary rights on account of payment of charges and redemption of land were granted on 12‑9‑1967. These mutations are Exh.P.3 and Exh.P.7. The mutation respecting the oral sale made by Muhammad Yaqoob in favour of respondents Nos. 2 to 4 was sanctioned on 14‑9‑1967 Exh.P.4. The appellant assertedly paid mortgage money to Muhammad Siddique (P.W.4) on 5‑4‑1968 and thereafter filed suit for declaration of title with consequential relief on 26‑4‑1968.

7. In the background of these facts emerging from record, the assertion of the learned counsel for the appellants that the sale of land made in favour of appellants‑plaintiffs was at best voidable but not void and on conferment of proprietary rights on Muhammad Yaqoob, respondent No.l, on 12‑9‑1967, the transaction of sale in favour of the appellants‑plaintiffs became valid and effective in law in view of the principles of equity contained in section 43 of the Transfer of Property Act requires to be examined. Learned counsel candidly conceded that if the prohibition contained in para. 14 of the Rehabilitation Settlement Scheme is treated as absolute and the transaction of sale is held to be void, then the appellants‑plaintiffs cannot claim protection under sections 43 and 55 of the Transfer of Property Act. His case was that para. 14 contemplates seeking of permission which could be pre‑facto or post‑facto and in any case the payment of Government dues on account of mortgages having been made the estate passed to the transferees i.e. the appellants plaintiffs without any further act of transfer and thus the subsequent sale in favour of the respondents was void and ineffective as against the ownership rights in the suit land which came to vest earlier in time in the appellants‑plaintiffs.

8. At this stage reference to the provisions of the Rehabilitation Settlement Scheme 1956 and the instructions issued will be appropriate. The relevant part of para.14, Part I, Chapter II, of the Rehabilitation Settlement Scheme, 1956 reads as under:‑ "(14) The allottees concerned may transfer by sale, exchange, gift, will, mortgage or other private contract their rights or interests in the land allotted to them under the Rehabilitation Settlement Scheme except where‑‑ (a)

(b)

(c) the land has been allotted in lieu of rights as mortgagor or mortgagee till such time as the allottee concerned has fulfilled the terms and conditions contemplated to be prescribed in regard to such cases. Provided further that if the allottee‑alienor is subsequently found to have obtained the allotment of land by fraud or by misrepresentation the alienation will be deemed to be void. (2) Such alienation will only be entered in the cultivation column of the records the implication being that the land will continue to be evacuee property even after alienation. In this respect paras. 7 and 7‑A of the Scheme are also relevant. Para. 7, inter alla, provides that:‑ "A Muslim mortgagee of both Muslim and non‑Muslim mortgagor of land in the prescribed area will not be eligible for an allotment of land under the Scheme but he may be allotted land on such terms and conditions as the Rehabilitation Commissioner, West Pakistan may prescribe according to the area held by him under the mortgage subject to a maximum of 1,000 produce index units. In case any land allotted to such a mortgagee on the basis of an independent right under the Scheme the land so allotted shall be taken into account for the maximum limit specified above. Similarly a mortgagee of occupancy or other specified rights will be also treated as an ordinary mortgagee for the purposes of the Rehabilitation Scheme." Para. 7‑A provides the Scheme for final adjustment of allotment made under para.7. Likewise para. 8 provides for the allotment of the land to a Muslim mortgagor of both Muslim and non‑Muslim mortgagees of land. Para.II provides for the redemption of mortgages and attestation of mutation in respect thereof. The Chief Settlement Rehabilitation Commissioner vide Memo. No.2195‑62/3798‑R(L), dated 18‑5‑1962, Exh.D.16 issued instructions regarding disposal of land held by the mortgagees in the rural areas under para.7, Part I, Chapter II of the West Pakistan Rehabilitation Settlement Scheme. Under this memo the mortgagees were given option to purchase the land held by them under the aforesaid para.7 of the Scheme. Clause 7 of these instructions reads as under:‑

"The intending purchaser shall not without the sanction in writing of Deputy Settlement Commissioner (Land) alienate in any manner any portion of the land so purchased before he has paid the entire purchase price and a mutation conferring proprietary right on him has been sanctioned. Till such a mutation has been duly sanctioned, the Central Government will continue to be shown as an owner and the intending purchaser shall be shown as tenant on payment of land revenue, cesses and other public dues in respect of such land." It may also be noted that allottees who had obtained allotment in lieu of mortgagee or mortgagor's rights held in the land abandoned in India were allowed to retain the allotted land on payment of prescribed amount and the date fixed for making payment of these charges was extended from time to time by the Chief Settlement Commissioner. D.W.6 Muhammad Siddique clerk in his statement gave details of the instructions issued on various dates extending time for payment of these charges.

9. The aforesaid clause 7 of the memo. dated 18‑5‑1962 Exh. D.16 read with paras. 7 and 14, Chapter II, Part I of the Rehabilitation Settlement Scheme show that the mortgagees obtaining allotment under the said paras held at best the status of an intending purchaser. They cannot claim for themselves the status of even a confirmed allottee as their position was that of tenant paying land revenue, cesses and other public dues. They however, were entitled to exercise option to purchase the land held by them under para.7 of the Scheme. As their position was quite different from a confirmed allottee, they were prohibited to alienate in any manner the land received in allotment except after paying the charges and after obtaining permission from the concerned officer. The prohibition was thus placed with a view to safeguard the public interest. It is well‑established that no equity arises out of transaction which is prohibited by law on account of public policy. The alienation made by Muhammad Yaqoob on 1‑11‑1962 was thus hit by the prohibition and as such was void as the charges payable to Government had neither been paid nor the mutation conferring properietary rights had been sanctioned nor the sanction in writing of the Deputy Settlement Commissioner (Land) to alienate the land in dispute was obtained. The transaction being void, equitable principles contained in sections 43 and 55 of the Transfer of Property Act do not apply.

10. Moreover, Haq Nawaz plaintiff while appearing as P.W.1 stated that it was incorrect that as the defendants could not have sold the land hence their sale transaction had come to an end. They were thus not conceding that the title held by Muhammad Yaqub at the time of sale was defective in any respect. In any case appellants by their conduct treated the sale in their favour as ineffective in law having come to an end, and hence not subsisting. It is in this context that the question of payment of consideration and of fulfilling the other obligation arising under the sale were required to be noticed. The learned first appellate Court on the basis of evidence or. record held that substantial part of the purchase price did not pass hands. Admittedly the mutation respecting sale in favour of appellants was allowed to be cancelled for non‑payment of charges payable to the Settlement Department. The appellants since sale, dated 1‑11‑1962 till cancellation of mutation on 3‑3‑1966 did not discharge the obligation of redeeming the mortgages from Muhammad Siddique. The Government dues were paid and land was got redeemed in 1967 by Muhammad Yaqoob himself and after about 7 months of the sale of suit land in favour of respondent No.2, the appellants‑plaintiffs thought of paying .the mortgage amount to Muhammad Siddique mortgagee. This alleged payment to Muhammad Siddique has not been believed by the learned District Judge. Assuming that the mortgage amount was paid still this payment on 5‑4‑1968 confers no rights as the land stood already redeemed vide order of the Collector, dated 3‑1‑1967 which order had also been given effect to by sanctioning the necessary mutations on 31‑8‑1967. The assertion as to the making of the payment to Muhammad Siddique just before filing of the suit was made in order to equip themselves with the plea that the appellants‑plaintiffs had performed their part of the contract but that was too late in the day. Muhammad Siddique appearing as P.W.4 though acknowledged receipt of Rupees six thousand the mortgage money from the appellants‑plaintiffs yet that acknowledgement is of no benefit to the appellants as the land had already been redeemed and no question of making the payment at that stage could arise. The appellants‑plaintiffs, it is apparent, did not discharge their obligation for years together. Can they now urge that they treated the transaction as subsisting or that the respondents Nos.2 to 4 were not bona fide purchaser for value and that they had notice of the sale transaction of the appellants.

11. Even on the question of possession, the statements of Muhammad Siddique, P.W.4, Gehla, P.W.5, Ibrahim, P.W.6, and Ahmad, P.W.7, cannot be believed. Muhammad Yaqoob had filed criminal proceedings against Muhammad Siddique and his brother alongwith Sardar, the attorney of Muhammad Yaqoob. Gehla in cross‑examination had to admit that his daughter was married to Pehlwan, the brother of Sultan one of the appellants‑plaintiffs. Ibrahim P.W.6 stated that he has been paying Batai firstly to Muhammad Yaqoob, and later to the appellants‑plaintiffs but in cross‑examination he was confronted with his affidavit, dated 4‑5‑1968 wherein he had deposed that he gives share of Batai to Amir Ali etc. the respondents and that he had not till date given Batai to Haq Nawaz and Sultan, appellants‑plaintiffs. These recitals contained in the affidavit were not accepted as correct. He reiterated that about 6 months earlier he had for the first time given share of Batai to the appellants‑plaintiffs. He is a self‑condemned liar. He firstly swore an affidavit suiting the respondents and at the trial made statement in favour of the appellants‑plaintiffs. Ahmad P.W.7 stated that he cultivated land in dispute for two years on lease and thereafter delivered possession to Gehta P.W.5 who was tenant of the appellants‑plaintiffs. Muhammad Siddique P.W. stated that Haq Nawaz had received the possession after paying Rupees six thousand to him. This payment was made according to him on 5‑4‑1968 i.e. twenty days prior to the institution of suit. If this is believed, then the version of Gehla P.W.5 and Ibrahim P.W.6 that they have been paying the share of Batai to the appellants‑plaintiffs as well as the version of Ahmad P.W.7 that Gehla was tenant of the appellants plaintiffs cannot be accepted. The version that the appellants‑plaintiffs were in possession through tenants thus cannot be accepted. The sale in favour of respondents was validly made and these respondents had no notice of any subsisting sale in favour of any other party. They are to be treated in possession as the person whoever may be in physical possession will be treated as tenant of the true owner.

12. For the reasons given above, the learned first appellate Court was right in holding that the transaction of sale vide registered sale‑deed, dated 1‑11‑1962 Exh.P.2 was void and that the provisions of sections 43 and 55 of the Transfer of Property Act were not attracted to the instant case. The judgment and decree, dated 1‑3‑1973 passed by the learned District Judge, Jhang, are hereby upheld and the second appeal is dismissed with costs. S.Q./H‑50/L Appeal dismissed.