1995 PLP 1276 (SCMR)

(5) Whether the sum of Rs was fixed in good faith or actually paid as the price of the suit land? OPD (6) On non‑proof of issue No.5, what was the market value of the suit land at the time of its sale? OPPs. (7) Relief.

4. It is worth mentioning at this stage that in the present case Ahmad Ali respondent brought a declaratory suit against the vendees, minor sons, in respect of the suit land for declaration that he was the owner in possession of it on his own right and that sale in their name was Benami. That his minor sons have no interest in the suit land and that they be restrained from interfering with his possession. This suit was instituted in line with his written statement which he had filed in the suits for pre‑emption as guardian of the minors. The minors were sued through Mst. Halima their mother as their guardian ad litem in the instant case. The declaratory suit was decreed on 2‑3‑1982 as the guardian of the minors accepted the contents of the plaint.

5. In the suit for pre‑emption both the parties led their evidence whereafter the learned trial Judge held that declaratory decree referred to above was a‑ consent decree passed by the Civil Court in favour of the father of the minors/vendees during the pendency of the suits for pre‑emption and that the interest of the minors was not taken care in collusion with the guardian of the minors i.e. their mother, in order to defeat the pending pre‑emption suits, therefore, said decree was ineffective on the rights of the appellant/pre emptor. It was further held as a fact on the evidence that it was the mother of the vendees who purchased the suit land from her own sources in the names of her minor sons. On such finding the learned trial Judge decided both the material issues in favour of the appellant and against the respondent and decreed the pre‑emption suits on 24‑5‑1984 with direction to the decree‑holder to deposit the pre‑emption amount before 21‑6‑1984.

6. The aforementioned judgments and decrees were challenged in appeals before the District Judge, Sahiwal who was pleased to accept the appeals, set aside the judgments and decrees of the trial Court, and in consequence dismissed the suits by his judgment dated 19‑11‑1980. The revision petitions filed by the appellant (pre‑emptor) against the same were dismissed by the learned High Court vide judgment dated 24th November, 1990 recorded in Civil Revision Petition No. 199 of 1987.

7. Leave to appeal was granted against the judgment of the learned High Court on the contention raised by the learned counsel for the appellants that the minors were Benamidar, was not disputed before the learned High Court, but his contention before the learned High Court was that section 4 of the Punjab Pre‑emption Act, 1913, did not empower the Courts to adjudicate upon the Benami nature of the transaction for disposing of a suit for pre‑emption. The Court could only examine as to whether or not the complexion given to a transaction other than that of sale was really a sale or otherwise. That once a sale is establishes, irrespective of the fact whether sale is Benami or not, the Court has to decree the suit if the plaintiff's superior right of pre‑emption is established against the person mentioned as transferee in the sale‑deed and he shall be substituted for such transferee. Reliance was placed on Mahabir appellant v. Khargi‑respondent (AIR 1927 Oudh 508). After hearing the learned counsel leave to appeal was granted with an observation that prima facie, the later part of section 4 referred to above is merely an enabling provision which does not control the earlier part thereof but as the issue raised was of first impression requiring detailed examination.

8. As the arguments have been confined to the true import of section 4 Act, 1913 it would, therefore, be helpful to reproduced the same. "Section

4. The right of pre‑emption shall mean the right of a person to acquire agricultural land or village immovable property or urban immovable property in preference to other persons and it arises in respect of such land only in the case of sales or forceclosures of the right of redeem such property. Nothing in this section shall prevent a Court from holding that an alienation purporting to be other than a sale is in effect a sale."

9. Section reproduced above has got two parts. The first part provides for preferential right to acquire agricultural land or village immovable property or urban immovable property in preference to other person which right arises of sale of such property or foreclosure of the right to redeem while the latter part deals with the power of the Court to hold whether any alienation purported to be other than the sale is in fact a sale. The learned counsel for the appellant in interpreting second part of the section contended before us that the power of the Court taking cognizance of a pre‑emption suit is limited to determination of the nature of the transaction and once it is held that the transaction is that of sale, irrespective of other facts whether the transaction is Benami or otherwise, the Court is bound to determine the preferential right of pre‑emptor against the recorded vendee or vendees. In support of his contention the learned counsel has relied on Mansur and another v. Sultan and another AIR 1927 Oudh

509. In the case Moharram Ali and Farzand Ali, brothers inter se, jointly held certain share in the land in suit. Moharram Ali sold his share in the land in favour of Sultan Ali and Muhammad Wahab his nephew i.e. sons of Farzand Ali. The sale was pre‑empted by Mansur and one another. Defendant/vendees contested the suit mainly on the ground that the sale in their names was Benami and that Farzand Ali was the real owner against whom the pre‑emptor had no preferential right of pre‑emption. In the lower appellate Court it was held that Farzand Ali himself supplied the money with which the purchase was made, therefore, he was the real owner of the land against whom the pre‑emptor had no right of pre‑emption. Accordingly, the suit for pre‑emption was dismissed. The learned Division Bench of Oudh High Court did not agree with the learned lower Court‑ on the ground given as under:‑‑ "We find that not only were Sultan Ali and Muhammad Wahab mentioned as the vendees in the deed but that the vendor has stated that he had received the sale considered from them and their names were entered in the revenue registers as the persons entitled to engage for the revenue of the property. In our opinion in these circumstances, Mansur Ali and Newazish Ali had a right to exercise the right of pre emption in respect of the .property. Their right of pre‑emption is against the persons who are the transferees mentioned in the deed."

10. From the above it is evident that the learned High Court on its finding given above did not agree with the finding of the lower appellate Court that sale was Benami. However, there is no denial of the fact that it was observed, on facts of the case, that right of pre‑emption shall be determined qua the person shown transferee in the deed. However, such observation cannot be divorced from the context in which it was made. It may also be pointed out that the right of pre‑emption under the Oudh Laws Act, 1976 is given as under:‑‑ "Ri ht, t of pre‑emption.‑‑Right of pre‑emption is a right of the persons hereinafter mentioned or referred to, to acquire in cases hereinafter specified, immovable property in preference to all others." The above provisions of law are not identical with the provision of the Punjab Pre‑emption Act reproduced in the earlier part of this judgment therefore the authority is not helpful to the appellant on facts and law.

11. Section 4 of the Punjab Pre‑emption Act has two parts ‑‑ the first part deals with the right of pre‑emption while the second part empowers the Court to enquire into the nature of transaction under pre‑emption as such right arises of a sale or foreclose to redeem. The Court as such is not debarred from going into all the questions raised in respect of the sale including its Benami nature and once the sale is questioned it becomes the duty of the Court to determine such questions There appears no substance in the contention of the learned counsel that the later part of section 4 limits the power of the Court which by itself is an enabling and explanatory provision and shall be read in aid of the preceding part.

12. In Dit Ram Mal and another ‑‑ appellants v. Hans Raj and others ‑ respondents (AIR 1934 Lahore 101(2)) the facts were that in insolvency proceedings before the order of adjudication was passed the insolvent sold his property to Chanan Das for Rs.2,

000. An application was made by the official receiver for the sale being set aside under section 53, Provincial Insolvency Act. During the pendency of these proceedings the above sale was pre‑empted and decreed. The pre‑emptors were accordingly made parties to the proceedings and eventually the sale was set aside. The pre‑emptor's appeal was dismissed. When the case came up for hearing before the learned High Court it was observed as under:‑‑ "If the original alienation is challenged and the subsequent alliances are also made parties as in the present proceedings, I see no good reason why the subsequent transfers also should not be set aside when the original transfer falls through. The subsequent transfers cannot have any greater validity than the original transfer.‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑ ‑‑‑‑‑‑‑‑‑‑‑‑It is well‑established that the right of pre‑emption is merely one of substitution and not of re‑purchase: see Gobind Dayal v. Inayat Ullah (4), and when the original transfer has been found to be fictitious and has been set side, I fail to see how the title of the present pre‑emptors can be sustained." 12‑A. In Sankatha Prasad ‑‑ appellant v. Mt. Rukhmani and others ‑respondents (AIR 1940 Allahabad 97), which is an identical case, the suit for pre‑emption was resisted on the ground that the alleged sale was Benami. Their Lordships in the context of the plea raised held: "We are of the opinion that the pre‑emption against a vendee who is a Benamidar for a person who has a prior right of pre‑emption to the plaintiff, does not lie. It is duty of the Court in such a suit to discover who is the real purchaser i.e. who takes the proprietary and beneficial interest under the sale." Similar was the view earlier expressed in Mahabeer Sindh defendant/appellant v. Buda Singh ‑‑ plaintiff/respondents (AIR 1938 Lahore 510).

13. On consideration of the law and judgment cited before us Benami transaction has judicial recognition and permissible under the law, therefore, it cannot be said that such question does not fall within the purview of section 4 of the Pre‑emption Act. If it is found that the sale transaction in question is Bcnami and that the pre‑emptor has no preferential right of pre‑emption as against the real owner, for whom Benamidar stands as a trustee, the suit for pre‑emption in respect thereof would not succeed.

14. As in the instant case the learned counsel for the appellant did not challenge the findings of the Courts below that the respondents/vendees were Benamidar for Farzand Ali against whom the appellant had no preferential right of pre‑emption their suit was rightly dismissed. The question that in the suit for declaration the appellant was not made party or that interest of the minors was not properly looked into are not relevant for consideration in these appeals. The appeals are, accordingly, dismissed as we find no merit in the same. Parties are left to bear their own costs. AA./M‑3049/S Appeals dismissed.