P L D 1968 Lahore 428 (PLP)

The mere fact that it was brought out in evidence that the possession of the respective pieces of land continued with the former tenants does not mean that the exchange was in fact a facade for the transaction of sale. The transaction being one of exchange was held to be not pre‑emptible. Muhammad Shafi I for Appellant. Malik Muhammad Aslam for Respondent No.

1. Muhammad Abdul Wahid for Respondent No.

2. Date of hearing: 2nd May 1967. This second appeal arises out of a pre‑emption suit instituted by the present appellant Allah Dad in respect of ten Marlas of Chahi land sold by his cousin Ayub (respondent No. 2) to Bagh Ali (respondent No. 1). The transaction was carried out by means of a registered deed dated the 1st of July 1958 and therein it was recited that the parties were entering into an exchange, namely, Ayub was parting with 9 Marlas of Chahi land plus one Marla of Ghairmumkin on which the well was situated and the share in the well was also included; whereas Bagh Ali was giving in exchange 9 Marlas of Maira land situated on Pind Dadan Khan Road. It is also recited in the registered deed that Ayub wanted Bagh Ali's land for installing a Chakki and machine etc. The value of Ayub's land was fixed at Rs. 1,800 and Rs. 1,000 were to be paid by Bagh Ali in cash. The plaintiff‑appellant asserted that he was a collateral and heir of Ayub and, therefore, had a superior right as compared to the vendee Bagh Ali. It was contended that the transaction was given the colour of an exchange simply to defeat the appellant's right of pre‑emption.

2. The learned trial Judge found that the transaction was in fact a sale and, therefore, pre‑emptible, and that the sale price was Rs.

700. On this view of the matter, the appellant's suit was decreed. However, in appeal the learned District Judge reversed the finding of the trial Court on the question of the true nature of the transaction. He observed that the plaintiff's evidence was not satisfactory and that the mere fact that the two pieces of land had continued to remain with the tenants of the former land‑owners did not mean that possession had not changed hands in accordance with the registered deed. On these findings the learned District Judge dismissed the suit. Hence the present appeal.

3. It is contended by Mr. Muhammad Shafi, the learned counsel for the appellant, that the learned District Judge has misread the evidence on the record in arriving at the conclusion that the transaction was not one of sale; that there was no justification to discard the evidence of the plaintiff; and that when all the surrounding circumstances are taken into account it becomes abundantly clear that the transaction was in fact one of sale and was merely given the cloak of an exchange transaction to defeat the appellant's rights.

4. On behalf of the respondents a preliminary objection has been taken to the effect that the question whether a particular transaction is one of sale or exchange is a question of fact and cannot be gone into in second appeal. In support of this contention Malik Muhammad Aslam Khan has placed reliance on Budha Mal v. Ghulab and others (36 P R 1899), Sundardas v. Dhanpat Rai and others (60 P R 1907), Nadir Shah v. Lal Shah and another (P L D 1954 Lah. 447), Mst. Bhirawan and three others v. Ahmad Bakhsh and others (P L D 1955 Lah. 187) and Abdul Majid and others v. Khalil Ahmad (P L D 1955 F C 38). In the earliest case cited by Malik Muhammad Aslam Khan it was held that "the document being on the face of it one of mortgage, the question that arose was not as regards the proper construction of it, but rather as to the inference to be drawn from the deed and other evidence as regards the intention of the parties .to the transfer, and that this was a question of fact and not of law." The same view was reiterated in the case of Sundardas etc. It is not necessary to refer at any length to the other three cases referred to by the learned counsel for the respondents and it will suffice if reference is made to the case of Abdul Majid and others in which their Lordships of the Federal Court laid down that "the High Court has no jurisdiction to entertain a second appeal on the ground of an erroneous finding of fact, however gross and inexcusable the error may seem to be, unless there is an error in the procedure provided by law, which may possibly have produced an error or defect in the decision of the case on merits." It was added that "a fallacy in appraising the evidence as to a fact, unless it amounts to a material mistaken assumption, is merely an error in coming to a finding as to that fact, and such error has never been he d to be an error of law justifying interference in second appeal."

5. In reply Sheikh Muhammad Shafi has referred me to Gul Muhammad v. Sabz Ali Khan (104 P R 1918), Allah Ditta v. Haji and another (A I R 1934 Lah.823), Shaukat Khan and others v. Khawaja Muhammad Khan and another (P L D 1959 Pesh. 178) and Wali Muhammad and others v. Muhammad Bakhsh and others (A I R 1930 P C 91). In the first four cases mentioned by Sheikh Muhammad Shafi there is hardly any discussion of the point which has been raised on behalf of the respondents, although it is correct that in second appeal the learned Judges did examine the question whether the transaction in dispute was one of sale or of exchange. However, in the case of Wali Muhammad and others their Lordships of the Privy Council did lay down certain principles governing the application and scope of section 100 of the Civil Procedure Code, and one of these principles is to the effect that the proper legal effect of a proved fact is essentially a question of law, but the question whether a fact has been proved when evidence for and against gas been properly admitted is necessarily a pure question of fact. It was submitted by Sheikh Muhammad Shafi that this dictum of the Privy Council clearly meant that in second appeal the question of the legal effect of proved facts could be gone into.

6. There can hardly be any dispute with the proposition laid down by their Lordships of the Privy Council in the case of. Wall Muhammad and others, but it is clear from the authorities cited by Malik Muhammad Aslam Khan that the question regarding the true nature of a transaction, when the inference has to be drawn from the evidence placed on the record, is a question of fact and not a question of law. While determining such a question the Court is not called upon to construe a document but merely to decide whether the evidence placed on the record shows the transaction to be one of sale or exchange. The predominant view appears to be that such a question would be a question of fact.

7. However, even if the question is gone into in the present second appeal, I see no reason to differ from the findings recorded by the lower appellate Court. In the registered deed the transaction is described as one of exchange and it is recited that the value of the land given by Ayub was Rs. 1,800 and the value of the land given by Bagh Ali was Rs. 800 with the result that Bagh Ali was paying a sum of Rs. 1,000 in cash. Part of this transaction can be deemed to be a sale, but the entire transaction being indivisible, if part of it is held to be an exchange then the entire transaction will be immune from pre‑emption. There is evidence, in the shape of Exh. D. 2, that on a previous occasion Bagh Ali had purchased 8 Marlas of Chahi land from Ayub, with a corresponding share in the well, for Rs. 2,300 thus showing that the price of contiguous Chahi land was nearly Rs. 300 per Marla. It would appear, therefore, that the price of the Chahi land given by Ayub on this occasion may very well be Rs. 1,800 as assessed by the parties. If that is so, then it is clear that the land which Bagh Ali has given to Ayub must be worth something, as otherwise the cash consideration would not have been as low as Rs. 1,

000. It appears, therefore, that the land which has been given by Bagh All? formed a C substantial part of the consideration received by Ayub in exchange for 10 Marlas of his Chahi land. In Shaligram v. Amar Singh and another (A I R 1947 Pesh. 29) it was observed that where the price of the land given in exchange was not negligible, the transaction must be held to be one of exchange.

8. The mere fact that it was brought out in evidence that the possession of the respective pieces of land continued with the former tenants does not mean that the exchange was in fact a facade for the transaction of sale. In the first place, the tenants could not be ousted automatically just because the owners had exchanged the two pieces of land between themselves, and, in the second place, if the contention of Sheikh Muhammad Shafi is taken to its logical conclusion it would mean that even the land for which the appellant has brought this suit has in fact not been given over to Bagh Ali as Ayub's tenant continues in possession. If, therefore, the ousting of the previous tenants was a necessary condition for the transaction to take effect, then even the transection of sale has not been completed. It is clear that such a position is not tenable and nothing turns on the mere fact that tenants have not surrendered physical possession to the new owners.

9. The learned counsel appearing for Ayub asserted at the Bar that Ayub had taken Bagh Ali's land in exchange as it was situated on a pacca road and was more suitable for putting up a Chakki and machine than his own Chahi land which he had given to Bagh Ali. This position, which is in consonance with the recital in the registered deed, appears to be a plausible explanation for the exchange transaction entered into between the parties. I consider, therefore, that the learned District Judge was justified, on the basis of the material before him, in holding that the transaction was one of exchange as asserted by the respondents.

10. For the foregoing reasons, the appellant's suit was rightly dismissed. The present appeal also fails and is hereby dismissed with costs. A.H. Appeal dismissed.