P L D 1991 Supreme Court 407 (PLP)

MUHAMMAD AFZAL ZULLAH, CJ.‑‑This appeal through leave of the Court by vendee/defendants in a pre‑emption matter is directed against the acceptance by the High Court of respondent/plaintiffs Civil Revision. The main question involved in this case is the exemption granted to the Tarbela Dam's oustees from the law of pre‑emption. The appellants' side/vendees had claimed such exemption on the assertion that although the first vendee was not Tarbela Dam oustee, the defendant No.2 the second vendee was such an oustee. And the second sale to the second vendee having taken place prior to the filing of the respondent's suit, the second vendee was entitled to claim exemption. The respondent's suit was partially decreed regarding a part of the suit land. The appellants succeeded in their appeal before the District Court and the respondent's suit was dismissed on grounds other than the exemption. Regarding the exemption the District Court held as follows:‑‑ "Regarding issue No.6 it would suffice to say that the plea of exemption taken by defendant No.2 is not at all available to him because it is now well‑settled that a pre‑emptor can be defeated only by transfer of the property under the sword of pre‑emption to a person having an equal or superior right of pre‑emption during the period of limitation prescribed for filing a suit for pre‑emption and not to persons who claim exemptions on any ground allowed by law. The position would have been otherwise if the second vendee had been possessed of a right of pre‑emption equal or superior to right of pre‑emption of the plaintiff. The sale by Mst. Iqbal Begum defendant No.1 has admittedly not been made in favour of Aurangzeb defendant No.2 in recognition of his superior right of pre‑emption. The findings of the learned lower Court on issue No.6 are, therefore, upheld." The High Court did not set aside the alone‑reproduced view of the District Court and finding merit in the respondent's suit for pre‑emption decreed the same. Leave to appeal was granted to examine the contention that "not section 17 but section 7(2) of the N.‑W.F.P. Pre‑emption Act required construction and application. The pre‑emptor not possessed of the right of pre‑emption against Aurangzeb second vendee/appellant on the date of decree, the plaintiff/respondent could not succeed". The relevant provisions of the N.‑W.F.P. Pre‑emption Act, 1950 read as follows:‑‑ "Section 7.‑‑Power of Government to exempt transactions from pre‑emption, ‑(1) Notwithstanding anything contained in this Act, a right of pre‑emption shall not exist in respect of any sale made by or to the Government or by or to any local authority or to any company under the provisions of the Land Acquisition Act, 1894, or in respect of any sale sanctioned by the Deputy Commissioner under section 3(2) of the Punjab Alienation of Land Act, 1900. The Provincial Government may declare by notification that in any local area or with respect to any land or property or class of land or property or with respect to any sale or class of sales no right of pre‑emption shall exist. Section

16. Effect of loss of right by Pre‑emptor prior to decree.‑‑No decree for pre‑emption shall be passed in favour of any person unless he has a subsisting right of pre‑emption at the time of the decree, but where a decree for pre‑emption has been passed in favour of plaintiff, whether by a Court of first instance or of appeal, the right of such plaintiff shall not be affected by any transfer or loss of his interest occurring after the date of such decree. Section 17.‑‑Sale of property to pre‑emptor or acquisition of right b original purchaser prior to suits‑‑(1) No suit for pre‑emption shall lie where the purchaser has, prior to the institution of such suit, transferred the property in dispute to a person, having a right of pre‑emption equal or superior to that of the plaintiff. (2) Any improvement, otherwise than through inheritance or succession, made in the status of a vendee‑defendant after the institution of a suit for pre‑emption shall not affect the right of the pre‑emptor‑plaintiff in such suit." It is obvious from the language in Section 17(l) that no suit shall be for pre‑emption where the purchaser prior to the institution of such suit transferred the property in dispute to a person having the right of pre‑emption equal or superior than that of the plaintiff. In this case no doubt the right of Aurangzeb (second vendee) otherwise is not superior to that of the plaintiff but the question as noted in the order for grant of leave to appeal is not one of sale by the vendee to a pre‑emptor having equal or superior right. While section 17 deals with the comparative rights of the parties as pre‑emptors, the cases covered under section 7(2) which deals with the exemptions, the question of the relevant strength of right of parties as pre‑emptors does not at all arise. Under the said provision as it I clearly lays down, the property or class of property regarding which a Notification under section 7(2) is issued as in the present case, the sale itself shall no more remain subject to right of pre‑emption. In this case it is not denied that before the filing of the suit, Aurangzeb who is governed by the exemption had purchased the land in question. The suit of the respondent/plaintiff was for possession through pre‑emption. The land having been sold before the suit, to Aurangzeb the exemptee, he had to be impleaded as a defendant. That being so, a decree for possession against the original defendant might not have been executable‑‑ the land having gone out of her hands before the institution of the suit, to an exemptee from Tarbela Dam. Thus in reality and in fact the suit of the plaintiff (although did challenge the first sale had also to challenge the same in order to complete the cause of action) it could not succeed without seriously bringing under challenge the claim of pre‑emption, the second sale successfully. Before the suit was filed this second sale had become immune from any claim of right of pre‑emption by virtue of the very strong command in subsection (2) of Section 7, therefore, by operation of law the suit could not proceed. In a similar case Mst. Bibi Jan v. Miss R.A. Monny PLD 1961 Supreme Court 69 in which similar point was involved, only a decree which might have been passed before such an exemption could be examined on the touchstone of the law of pre‑emption. It is not possible where the sale as well as exemption exists even before the filing of the suit. In our view, no question of existence of right of pre‑emption would arise. Section 7(2) of the Act is clear enough that such right would not even exist. Accordingly the reliance from the respondents' side whether on Section 17(l) of the Act or on a Lahore case Muhammad Khan v. Sadiq P L D 1968 Lahore 929 would be of no avail to the respondent/plaintiff. In the Lahore case no doubt it was ruled that the second or re‑sale as in the present case would be in continuation of the first sale and the person having right to pre‑empt first sale, can follow the property in the hands of the second vendee provided he pre‑empts the first sale in time, would not be applicable, because as already discussed, the question involved therein was not of exemption from the very exercise of the right of pre‑emption in the sense that the right to pre‑empt would not exist. The difference between the Punjab Law of Pre‑emption which was being applied in the Lahore case and the N.‑W.F.P. Law of Pre‑emption, notwithstanding, the Lahore case would not apply otherwise also be‑cause of the afore stated distinction regarding the present case being governed by Section 7(2) and not by 17 (1) of the N.W.F.P. Pre‑emption Act, 1950. If the view held by the lower Court is approved and the plea of exemptee is adjudged on the touchstone of Section 17(l), it would clothe such an exemptee with a right of pre‑emption for competition visualised in various provisions of the Act including Section 16 and Section

17. This was the intention of law as contained either in Section 7 or Section

17. The exemptee but for the exemption itself has not been clothed with any right of pre‑emption‑‑ he has only been given the right to protect the sale in his favour through exemption on the assumption that the law of pre‑emption, vis‑a‑vis, his purchase would notionally cease to exist. If on the other hand the argument from respondent's side is accepted, a competition between the rights of pre‑emption, between the parties, vis‑a‑vis, the affectees from Tarbela Dam or for that matter other persons similarly placed, might start. Exemptees would claim right of pre‑emption, regarding sales to other parties without there being any basic right to pre‑empt; simply because, they have been allowed to protect sale in their favour from the law of pre‑emption. Thums such an interpretation amounts to the very negation of the principle of exemption as indicated in Section 7 (2). Although there is no right of pre‑emption equal or superior in the vendee in such like cases; nevertheless another pre‑emption would fail because of a temporary clog on the existence of his right of pre‑emption, vis‑s‑vis, such sales and/or persons. The word clog has been used for the sake of illustration as otherwise the law of pre‑emption remains on the Statute Book. It ceases to operate due to a clog placed on its operation through the Notification under the statutory command contained in section 7(2) of the N.W.F.P. Pre‑emption Act, 1950. In the light of the foregoing discussion these appeals are allowed. The impugned judgments are set aside and the suit' of the respondent/plaintiff is dismissed. There shall be no order as to costs. M.B.A/1‑138/S. Appeal allowed.