P L D 2011 Lahore 249 (PLP)

MUHAMMAD KHALID MEHMOOD KHAN, J.

The respondents filed a suit for declaration and redemption of mortgaged property against the petitioners claiming that their predecessor in interest mortgaged the suit property in favour of non-muslim evacuee vide Mutation No.159 attested on 9-1-1893. The non-muslim mortgagee further assigned their mortgagee rights in favour of Tara Mall vide Mutation No.235 attested on 21-2-1937. The property remained mortgaged till the creation of Pakistan. After the creation of Pakistan mortgage rights of non-muslim evacuee owners were transferred in favour of Central Government vide Mutation No.645 attested on 29-10-1969 by operation of law. The Central Government allotted the suit land to one Rukan son of Jammu being an evacuee against his abandoned claim. Rukan was survived by Ishaq son of Lal at No.623. The said Ishaq sold the land to one Allah Bukhsh against consideration and Mutation of sale No.806 was attested on 23-10-1979. The petitioners are the owners of suit-land. The respondents prayed for redemption of suit property as they are ready and willing to deposit the mortgaged money.

2. The petitioners controverted the respondent's assertions and claimed that they are the bona fide purchasers for value as they have purchased the land through a pre-emption decree passed in their favour on 27-1-1981. They have specifically raised the objection that Central Government is a necessary party to the suit and in his absence no decree can be passed. In addition to the above objections a number of other objections were raised by the petitioners.

3. Out of divergent pleadings of the parties, learned trial Court framed the following issues: "ISSUES: (1) Whether the plaintiffs have no cause of action to file this suit? OPD (2) Whether the suit is time barred? OPD (3) Whether the plaintiffs' are estopped by their own words and conduct to file this suit? OPD (4) Whether the suit is not maintainable in its present form? OPD (5) Whether the defendants are bona fide purchasers with consideration without notice? OPD (6) Whether the suit is not properly valued for the purpose of court-fee and jurisdiction? OPD (7) Whether the rights of redemption of the plaintiffs have been foreclosed due to completion of period of limitation? OPD (8) Whether the suit is liable to dismissal due to non-joinder of the necessary parties? OPD (9) Whether the suit is false, baseless, and has been filed only to harass the defendants and defendants are entitled to special costs under section 35-A, C.P.C.? If so, to what extent? OPD (10) Whether the plaintiffs are entitled to decree of declaration as prayed for? OPP (11) Relief."

4. Both the parties adduced their respective evidence both oral as well as documentary and the learned trial Court vide judgment and decree dated 30-1-2001 dismissed the suit. The respondents assailed the said judgment and decree through an appeal which was allowed on 23-1-2003. Hence, the present petition.

5. Learned counsel for the petitioners submits that suit suffers from non-joinder of necessary party. The petitioners have specifically raised the objection that Central Government has allotted the suit property to evacuee with complete ownership and not the mortgagee rights but the learned trial Court has failed to frame the issue on this point and Issue No.4 was wrongly decided by the learned courts below. Further submits that they are bona fide purchasers for value without notice and as such their rights are protected under section 41 of the Transfer of Property Act. He submits that suit was hopelessly barred by time as the original mortgage was created in 1893 and the suit was filed in the year 1988 after the expiry of statutory period as provided by law. He further submits that provisions of section 19 of Limitation Act are not applicable in the present case as at the time of assignment of mortgagee rights by the original mortgagee to second mortgagee, the mortgagor was not party to the said assignment. Further submits that petitioners if have any claim that is against the Central Government and not against the petitioners. He has relied on Muhammad Zaman and 8 others v. Abdul Malik Khan and 7 others (PLD 1991 Supreme Court 524), Ismail and 22 others v. Rehmat Ali and 15 others (1993 SCMR 92), Tahir Saeed Qureshi v. The Board of Intermediate and Secondary Education, Sargodha and 3 others (1996 SCMR 1872), Talib Hussain v. Babu Muhammad Shafi and 12 others (PLD 1987 Lahore 4) and Dost Muhammad through Legal Heirs v. Jahangir Khan and another (2000 CLC 1745).

6. Learned counsel for the respondents submits that under section 60 of Transfer of Property Act the equity of limitation remained alive unless a decree of foreclosure is finalized. Further submits that under section 19 of the Limitation Act second mortgage is an acknowledgment and the limitation will start from the date of acknowledgment and as such in the present case the limitation for redemption of mortgaged property will start from the second mortgage i.e 21-2-1937. Further submits that there is no need for impleading the erstwhile claimants of mortgaged land. He under the law is within his right to file the suit against the last owner of the suit property. He relied on Yado Rao v. Amrit Rao and others (AIR 1926 Nagpur 135) and an unreported judgment of Civil Revision No.466 and submits that respondent's suit does not suffer from non-joinder of necessary party. The Central Government was not the necessary nor a proper party. He adds that under section 13 of the Limitation Act the limitation stopped due to migration of non-Muslim mortgagee and as such the suit was within time. Further submits that a mortgage, subject matter of suit is a usufructuary mortgage and as such the suit of the respondents comes under section 20(2) of Limitation Act as delivery of share of produce give rise to fresh period of limitation and as such question of extinguishment of title or mortgagor does not arise. He submits that right of pre-emption is merely one of substitution and not of re-purchase and if the original transfer is found fictitious the title of pre-emptor cannot be sustained. Further submits that entry in Revenue Record is sufficient to bring the case of petitioner under the mischief of Section 19 of the Limitation Act. He adds that Central Government after creation of Pakistan is substituted as mortgagee and not the owner. Lastly submits that petitioners are not bona fide purchasers for value as before filing the suit of pre-emption they were bound to inquire about the title of the vendor. He relied on Dit Ram Mal and another v. Hans Raj and others (AIR 1934 Lahore 101 (2)), Ahmad Bakhsh v. Ghulam Hussain and others (2007 CLC 454), Chaman Khan v. Naqibullah Khan and 10 others (PLD 1989 Peshawar 107), Ghulam Muhammad and 3 others v. Member Board of Revenue Punjab Lahore and 16 others (PLD 2005 Lahore 119), Muhammad Akram and others v. Arsalla Khan and others (1997 MLD 138), Abdul Haq v. Ali Akbar and 12 others (1998 CLC 129), Rani Begum and others v. Muhammad Azam Khan and others (PLD 2003 Supreme Court 235), Muhammad Shafi v. Ghulam Qadir and others (PLD 1978 Lahore 71), Samar Gul v. Central Government and others (PLD 1986 Supreme Court 35), Muhammad Hanif through Legal Heirs and 2 others v. Zulfiqar Ali and 56 others ( 1996 SCMR 1869), Muhammad Luqman v. Allah Diwaya and others (2006 SCMR 718), Sufi Zaheer Ahmad (deceased) through Legal Heirs v. Chief Settlement and Rehabilitation Commissioner and others (1993 MLD 195), Muhammad Nabi through Legal Heirs v. Ghulam Yahya through Legal Heirs (1999 CLC 1771), Talib Hussain and others v. Member, Board of Revenue and others (2003 SCMR 549) and Allah Ditta and others v. Sardar Khan and others PLD 1997 Lah. 716.

7. Heard. Record perused.

8. It is an admitted fact on record that respondents are legal heirs of mortgagors. The land was mortgaged on 9-1-1893 vide Mutation No.159 in favour of a non-Muslim evacuee. The non-Muslim evacuee assigned his mortgagee rights in suit land in favour of another non Muslim mortgagee vide Mutation No.235 attested on 21-2-1937. The mortgage was in continuous when Pakistan came into existence and non-Muslim evacuee left Pakistan and by operation of law the Central Government became the owner of evacuee land as well as rights in land/property. It is also an admitted proposition of law that mortgage is al/ charge and not ownership. There is no cavil in the preposition of law that Central Government after creation of Pakistan becomes the owner of mortgagee rights of non-Muslim evacuees. In the present case the petitioners have purchased the property through a decree of pre-emption and are not the first allottee of land. Learned counsel for the petitioner substantiate his arguments on the ground that property was mortgaged in the year 1893 and when Pakistan came into existence the Central Government became the mortgagee of suit-land and vide order dated 31-10-1969 after expiry of 60 years the Central Government became the absolute owner of suit-land. His argument is that the land was mortgaged in 1893 and up to 31-10-1969 the respondents have not filed any application for redemption of mortgage and as such the property become the absolute ownership of Central Government. He submits that under section 19 of the Limitation Act the respondent's case is not covered and as in the second mutation attested in the year 1937 the mortgagor was not party. Section 19 of Limitation Act is read as under:- "

19. Effect of acknowledgment in writing.

(1) Where, before the expiration of the period prescribed for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by some person through whom he derives title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so. signed. (2) Where the writing containing the acknowledgment is undated; oral evidence may be given of the time when it was signed; but, subject to the provisions of the Evidence Act, 1872, oral evidence of its contents shall not be received. Explanation I.

For the purpose of this section an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery performance or enjoyment has not yet come, or is accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to a set-off; or is addressed to a person other than the person entitled to the property or right. Explanation II

For the purpose of this section, "signed" means signed either personally or by an agent duly authorized in this behalf. Explanation III.

For the purpose of this section an application for the execution of a decree or order is an application in respect of a right."

9. Perusal of said provision of law shows that the acknowledgment of the liability in respect of property or right has necessarily to be made in writing assigned by the party against whom such property or right is claimed. Admittedly in the present case no writing for acknowledgment of mortgagor is available on record. Second mortgagee who is in fact is assignee of mortgagee rights of first mortgagee is vide Mutation No.235 attested on 21-2-1937. This issue was dilated upon by the Hon'ble Supreme Court of Pakistan in Muhammad Zairian and 8 others v. Abdul Malik Khan and 7 others (PLD 1991 Supreme Court 524) and author Judge was Shafiur Rehman, J. and it was held as under:-- "In the case in hand in order to prove acknowledgment giving fresh start to the period of limitation, it is incumbent upon the mortgagors to prove the same within the four corners of the law relied upon. On going through the record of the case and the evidence produced by the parties acknowledgment as a question of fact was never specifically raised nor proved in the trial Court. The important ingredient for attracting the provisions of section 19 of the Limitation Act that the same must be in writing and signed by the person making it is totally missing. All the sub-mortgagees were created from time to time through mutation referred to above which are not required to be signed or thumb-impressed by the parties to the transaction. Mutations are the effect of the oral transaction entered into between the parties and reported to the relevant authority. Keeping in view that the above mentioned mandatory element of acknowledgment is missing in the present case, I have no hesitation in holding that the defendants appellants have utterly failed to prove a valid acknowledgment of the original mortgage giving fresh start of limitation under section 19 of the Act. The creation of sub-mortgage unless in writing and signed by the mortgagors (Original mortgagees) and proved in Court of law as a fact does not amount to acknowledgment within the meaning of section 19 of the Limitation Act."

10. In the present case admittedly Mutation No.235 Exh.P-1 is not signed by the mortgagor (Original mortgagee) nor the mortgagee. It was attested on the oral statement of mortgagee. The order of acknowledgment denotes that the same should be in writing. Learned counsel for the respondents has counter this argument claiming that mutation is not needed to be signed by the parties. It is just a recording of some fact in the Revenue Record and as such the mutation is an acknowledgment in terms of section 19 of the Limitation Act. He has placed reliance on 2007 CLC

454. In this case the matter was not a creation of sub-mortgage, the land in dispute was mortgaged on 22-11-1985 through Mutation No.210 and the said mortgage agreement was renewed through another oral Mutation No. 372 attested on 20-12-1935. In this case the parties are the same and it was a renewal of mortgage and not assignment rights of mortgagee in favour of new mortgagee, so facts of this case are not applicable in the present case.

11. There is another aspect of this case that respondents are local and when non Muslim evacuee left Pakistan it was in their .knowledge that property after 15 August, 1947 left by the evacuee owners or evacuee mortgagees becomes the property of Central Government. They have not applied for redemption of suit property till 31-10-1969 when on 31-10-1969 the Central Government confiscated the mortgagee rights of non-Muslim evacuee vide a judicial order, the respondents remained silent. They have not challenged the order dated 31-10-1969 before the Settlement hierarchy or any other court of law and even the present suit. Admittedly they filed a suit in the year 1988 against the last owners claiming that they are entitled for redemption of land. The rights of respondents were confiscated by the Central Government may be wrongly but the said order was not assailed by them. Further they have not impleaded the Central Government as party to the suit. The petitioners have purchased the property through a decree of pre-emption. The petitioner's vendor was the transferee of land by the Central Government. The Central Government transferred the land claiming themselves to be the owner of the same. Although the respondent's claim is that Central Government was only the mortgagee of land and not the owner but it is a proven fact on record that Central Government vide order dated 31-10-1969 confiscated the right of respondents of redemption and passed the following order:--

12. This document becomes the title of Central Government to the land and the Central Government transferred his title to the vendor of petitioners. The petitioners have raised a specific objection that Central Government is a necessary and proper party and without impleading it as party no decree can be passed. Learned counsel for the petitioners has placed reliance on Yado Rao v. Amrit Rao and Others (AIR 1926 Nagpur 135). Facts of that case are distinguishable. In that case there was a sale of mortgagee rights only and the court come to the conclusion as under: "The prior mortgagees or the purchasers of his rights under the mortgage are not a necessary party to a suit brought by the subsequent mortgagee upon his mortgage as the prior mortgagee is under no obligation to redeem to keep his own rights alive." But in the present case the facts are different. The petitioner's right was confiscated by the Central Government and the Central Government transferred the land to the vendor of petitioners as owner. In the present case the main grievance of respondent is against the Central Government as the Central Government is claiming absolute ownership of the suit land and the respondents are agitating that the Central Government ii only the owner of mortgage rights and as such for the resolution of said dispute the Central Government was the necessary party. Learned trial court has failed to frame the issue on this point and as such in the absence of Central Government the party to the suit the judgment and I decree under appeal is defective one. I will refrain myself for commenting on the evidence available on record produced by both the parties and will restrict myself only to the extent of necessary party. There is no cavil in the preposition of law that due to non-impleading the necessary party the suit does not fail but it is equally necessary that no defective decree should be passed in the absence of necessary party. The petitioners are claiming to be the bona fide purchasers for value without notice and as such for resolution of this issue it was necessary that Central Government should have been impleaded as party in the suit, specially when respondent has not challenged mutation of ownership in favour of Central Government.

13. The upshot of my above discussion is that on this sole ground that Central Government is not party to the suit and learned trial Court has not framed the issue on this point in spite of petitioner's objection, I set aside both the judgments of both the courts below and remand the case to the learned trial Court for framing the issue on the objection of petitioner regarding non impleadment of Central Government as party to the suit. Learned trial Court will direct the respondents to file amended plaint by impleading the Central Government as party and will allow both the parties to lead evidence if they opt to do so and after recording the evidence will decide the case afresh. However the learned trial court will not be influenced from the observations given in this judgment on the issue of limitation and will decide the case by scanning the evidence independently afresh. This revision is allowed and case is remanded to the learned trial Court. M.H./K-8/L Case remanded.