1988 PLP 1767 (MLD)

This second appeal is on behalf of plaintiff. It arises out of a suit filed by him to recover, Rs.7,000 from Allah Bakhsh and others defendants in the first Court. Suit was decreed on 21‑6‑1978 by trial Court. In appeal, this decision was reversed on 3‑6‑1980 by Additional District Judge (I), Attock and the suit was dismissed leaving the parties to bear their respective costs of litigation.

2. For better appreciation of the points involved in the second appeal, relevant facts need be stated, 73 Kanals 3 Marlas of land comprised in Khasra 450 situate at Mauza Saghar, Tehsil Talagang belonged to one Mehr Khan. He sold this piece of land to defendants at the sale price of Rs.7,600 vide sale mutation 151 sanctioned on 31‑10‑1971. Plaintiff as non‑occupancy tenant of the land pre- empted the sale by filing a suit in the civil Court on 30‑10‑1972. In the first instance, vendees contested the suit but at some later stage entered into a Compromise with plaintiff and conceded his claim. Accordingly, on 18‑9‑1973, suit was decreed to the plaintiff conditional on payment of Rs.7,000 as sale price eel the land. Price was paid in Court to the vendees on the date of compromise Thereafter, plaintiff/decree‑holder sued out execution of the pre‑emption decree Date of filing of execution application is not available on the present records, Warrant for possession of the land was issued by the execution Court. It was returned to the Court on 9‑3‑1977 with the report that since the land subject matter of pre‑emption did not stand in the names of the judgment‑debtors and had already been mutated in favour of Government of Punjab on 14‑10‑1974 on the strength of an order passed by Deputy Settlement Commissioner on 30‑1 1974, possession could not be delivered to the decree‑holder under the pre- emption decree. Deprived of fruits of adjudication of his favour, plaintiff filed a suit out of which present appeal has arisen to recover back his money from the judgment‑debtors. Suit was instituted on 1‑2‑1978, in the civil Court at Talagang All the necessary facts constituting cause of action were set out, in the plaint. Defendants resisted the suit. Pleadings gave rise to as many as seven issues including that of relief. These are available in the impugned judgments and may not be reproduced. Trial Judge found that original vendor was not a necessary party, that plaintiff was not estopped to bring the suit that plaintiff was entitled to recover back his amount, that the suit was not barred by limitation. On these conclusions, trial Judge gave decree to the plaintiff. Learned Appellate Judge took a different view holding that original vendor was a necessary party and the suit in his absence was imperfectly constituted and in view of peculiar nature of pre‑emption, vendees could not be made liable to refund the sale price. Muhammad Munir Peracha, Advocate appeared on behalf of appellant. Muhammad Hussain respondent No. 2 is present in person. He requested for adjournment and has also filed an application written by his Advocate, Sheikh Karim Bakhsh who himself is not present. Sufficient grounds are not made out for adjournment. Accordingly, learned counsel for the appellant as also. respondent No. 2 have been heard.

3. This appeal raises two points First point is that if after passing of a pre -emption decree and payment of sale price in accordance therewith, title of the original vendor is found defective, can the pre‑emptor seek refund of the sale price from the vendees. Second, whether in a suit for recovery of money filed in such circumstances, vendor is a necessary party. It is contended on behalf of the appellant that since title to the land in dispute successfully pre‑empted by the plaintiff was defective, pre‑emptor is entitles! to refund of the sale price from the vendee. Learned counsel failed to bring to my notice any judgment directly on the point to assist the decision of the question involved in the second appeal. Pre- emption is right of substitution. It is not a right to or in the property. It is simply a right to acquire property in preference to others. It does not forbid or control alienation. Pre‑emption is not a right of repurchase either from the vendor or from the vendee but is a right of substitution by reason of a legal incident to which the sale was subject to stand in the shoes of the vendee in respect of rights and obligations arising from the sale under which vendee has taken his title. It is in this sense that the successful pre‑emptor cannot be described as their representative. It is also settled that a pre‑emptor cannot put the vendee to proof of the title of his vendor. Very concept of pre‑emption which is a right of substitution is sufficient to indicate that pre‑emptor must be prepared to take over whatever title the vendee had taken in the property. It certainly involves some risk but risk is inevitable. In Mst. Banti v. Mandu and another A I R 1928 Lah. 357(2) a Division Bench of this Court observed. "A pre‑emptor when instituting a suit to pre‑empt the land asserts that the vendor had good title to the land sold by him but that he, the pre‑emptor, had a prior right to purchase it as compared with the vendee. The very nature of the suit for pre‑emption, therefore, implies that there is no doubt as to the title of the vendor in the land described ill the sale deed". From the facts of the present case, it clearly appears that from the date of sale of the pre‑empted property to the date of decree by the trial Court and payment of sale price, land in suit stood in the names of the vendees which title by operation of pre‑emption decree was transferred to the successful pre -emptor, namely, Muhammad Hussain. It is also clear from the record that land was mutated to Provincial Government under an order of Deputy Settlement Commissioner after the date of pre‑emption decree. Copy of the order passed by Deputy Settlement Commissioner and the mutation attested in pursunace thereof were not made part of record. However, Mr. Peracha submitted that presumably it was in result of the proceedings taken under sections 10, 11 of Land Settlement Act, 1958 since repealed. Be that as it may, in later events, original transfer was made ineffective and in the result of action taken by the Settlement Authorities, original sale shall be deemed to have been avoided and the land reverted to Provincial Government. In this backdrop, question arising for consideration is about the rights of pre‑emptor and against whom these are enforceable. It has been observed in some cases that purely personal covenants between vendor and the vendee do not ensure for the benefit of the pre‑emptor. One such instance is a personal covenant of indemnity existing in the deed of sale in which vendor guarantees his title in the land sold to the original vendee and in which he also compensates the vendee if disturbed. Such like covenant does not survive for the benefit of the pre‑emptor who succeeds in obtaining a decree for possession by right of pre‑emption. Likewise the covenant to indemnify the vendee either by cash compensation or by delivery of other property of the vendor is not enforceable at the instance of the pre‑emptor. This view was taken in a Division Bench judgment of this Court reported as A I R 1928 Lah. 357(2). As I already observed, learned counsel for the appellant did not cite a single decision favouring his contention. Some assistance in this direction can be sought from decisions of the Punjab Chief Court in Abdulla v. Amir‑ud‑Din and others 76 Punjab Record 1902 Bishen Singh v. Mussammat Bishni and two others 103 Punjab Records 1919 but these decisions are not on all fours with the point involved in the appeal. In absence of a contract to the contrary, rights and liabilities of buyer and seller given in section 55 of the Transfer of Property Act are applicable. Section 55(2) says that "The seller shall be deemed to contract with the buyer that the interest which the seller professes to transfer to the buyer subsists, and that he has power to transfer the same:" The benefit of contract mentioned in this rule shall be annexed to, and shall go with the interest of the transferee as such, and may be enforced by every person in whom that interest is for the whole or any part thereof from time to time vested". This rule implied a warranty of title in all sales. Even in absence of stipulation that the vendor will be responsible to pay back the consideration in case the transaction of sale fell through or was set aside, the vendor undertakes the liability under section 55(2) Transfer of Property Act. Rule in section 55(2) applies to Punjab also. A covenant of indemnity is not only distinct but is different also from a warranty of title which is implied in a contract of sale: In Hadwant Rai v. Chandi Prasad and others A I R 1929 All. 293, a Division Bench of Allahabad High Court held that a vendee from a pre‑emptor is entitled to take benefit of an express covenant to idemnity in a sale‑deed and especially the original vendor cannot contend k, the contrary. A decision more in point is the case of Abdul v. Kisan A I R 1931 Nagpur 166 in which it was held that pre‑emption sale is a voluntary sale to which implied warranty of title applied. After quoting section 55, subsection (2) Transfer of Property Act. Judicial Commissioner observed "It is clear from this provision that the implied covenant for title is one which runs with tile land Bapu versus Kashiram A I R 1929 Bombay 361 and is therefore, enforceable by the pre‑emptor in whom vests the property. Hanwant Rai versus Chandi Prasad A I R 1929 All.

293. The contract of indemnity is only personal and does not run with the land. Since the covenant of title runs with the land, the pre‑emptor has as much right to enforce the covenant and claim compensation for breach thereof as any vendee under a sale by private treaty. II appears to me that in all kinds of sales except the compulsory sale, there is an implied warranty of title since the vendee purchases the property and not merely the right, title and interest of the vendor. The principle that the seller is liable to the pre‑emptor for breach of an implied warranty of title was recognized by the 'Muslim jurists: see Hamilton's Hedaya, p.557 quoted by Mr.Agarwala at p.200. In cases of judicial sales there can be no warranty of title because the Court sells the property attached while it is in possession of the judgment‑debtor without determining the title. As their Lordships observed in Dorab Ally Khan versus Abdul Aziz 1877 3 Ca1.806. the execution purchaser has no remedy against either the sheriff or the judgments debtor because the sheriff is authorised by the writ to seize the property of the execution‑debtor which lies within his territorial jurisdiction rind to pass the debtor's title to it without warranting that title to be good" Present suit was one substantially for compensation for failure of consideration. In the cited case, in almost identical circumstances, pre‑emptor was found entitled to refund of the sale price. With respects this decision enunciates a correct statement of law with which I respectfully agree and hold that a successful pre‑emptor on failing to get the property on the ground of the original sale being defective, was entitled to claim restitution. To this extent, 1 disagree with the learned Judge below. Even decision of this Court reported as A I R 1928 Lahore 357(2) on its close reading supports the aforesaid view. After having held that pre‑emptor was entitled to be I restituted, next question arising for consideration is from whom he can claim refund of the price. Original vendees paid the stated sale price to the vendor in exchange for the land received by them Plaintiff in result (if pre‑emption was substituted in the sale for the vendees. In the subsequent events already referred to above, allotment from the name of original vendor was recalled and consequently sale stood rescinded Vendees cannot be compelled to pay back to the pre‑emptor since, they are not shown to have received any benefit. However, suit could be decreed against the vendor who alone took the benefit from the sale.

4. In my view, therefore, original vendor was a necessary party to the; suit. In his absence, no decree can be passed against him. Despite objection, plaintiff did not implead him as a defendant in the suit. He ran a grave risk which is evident from the present result of adjudication. Had the original vendor been made a party in the suit, there was no legal bar in giving the necessary relief to the. plaintiff as was done in the Nagpur case. At this stage vendor cannot be impleaded nor a request was made by the appellant for his impleadment. Obviously, the suit against him is now barred by limitation. Liability of the original vendor to repay (he sale price is not in doubt but no relief can be given to the appellant because the vendor was not impleaded in the suit and no attempt was made during all these years to have the error corrected. For the reasons set out above, this appeal is dismissed leaving the parties to bear their costs throughout. H.B.T./M‑959/L Appeal dismissed.