P L D 1962 (W (PLP)

ANWARUL HAQ, J.‑This order will dispose of two cross-appeals, namely, No. 391 of 1956 and No. 473 of 1956, which arise out of a pre‑emption suit instituted against Ghulam Muhammad and Ata Muhammad etc. by Bagga and Nadir, in respect of a transfer of 55 kanals and 5 marlas of land situate in village Bhachar in Tehsil Phalia of the Gujrat District. The first‑mentioned appeal is by the vendee‑defendants, Ghulam Muhammad and Ata Muhammad, whereas the second is by the two plaintiffs, who are dissatisfied because the lower appellate Court has not decreed their suit in its entirety. They also challenge the market value fixed by that Court.

2. The transaction, which formed the subject‑matter of the pre‑emption suit, was evidenced by a registered‑deed Exh. P. 8 executed on the 26th of September 1953 by Nabu, Nazar Muhammad and Mst. Jallan (defendants Nos. 1 to 3) In favour of the appellants, Ghulam Muhammad and Ata Muhammad (defendants Nos. 4 and 5 in the suit). In the registered document, the transaction was described as one of exchange, under which the transferors, Nabu, Nazar Muhammad and Mst. Jallan, had obtained 11 kanals of land in village Kandhanwala from the transferees in lieu of their 55 kanals and 5 marlas of land. Out of the 11 kanals obtained by them, the three transferors sold 4 kanals to Muhammad Hayat (defendant No. 6) on the same day by means of registered‑deed Exh. P. 6. again, on the 21st of October 1953, they sold another 6 kanals and 15 marlas out of this land to the same Muhammad Hayat by means of registered‑deed Exh. P.

5. The remaining five marlas were sold by them on the same day to one Bahadur Ali, who was, however, not made a party in the suit.

3. The two plaintiff‑respondents, Bagga and Nadir, instituted the present suit on the 1st of October 1954, alleging that the transaction was in fact a sale but had been given the colour of an exchange in order to defeat pre‑emption, and that they were owners in the village as well as co‑sharers in the land sold and, therefore, had a superior right of pre‑emption as compared to the vendees, Ghulam Muhammad and Ata Muhammad. They also challenged the correctness of the price of the land as shown in the exchanged deed.

4. Another similar suit was also instituted by Phallu and others in respect of the same transaction. The two suits were consolidated by the learned trial Judge (Sh. Abdul Hayee) and dismissed by a single judgment on the 12th of January 1956, holding that the plaintiff‑pre‑emptors had failed to show that the transaction in question was in fact a sale.

5. Bagga and Nadir respondents went up in appeal to the Additional District Judge, Gujrat (Sh. Farooq Ahmad), who came to the conclusion that the transaction was a sale and not an exchange. As regards the plaintiff's right of pre‑emption, he found that it was superior to that of the vendees, Ghulam Muhammad and Ata Muhammad, for the reason that the plaintiffs were co‑sharers in the same khata to the extent of 33 kanals and 5 marlas of land, whereas the vendees were only owners in the estate. He, therefore, decreed the plaintiff‑respondents' suit with regard to 33 kanals and 5 marlas of land but dismissed it with regard to the remaining 22 kanals. On the question of price, he found that the value of the land decreed by him in favour of the plaintiff‑respondents came to Rs. 7,922 at the rate of Rs. 1,906 per acre.

6. Before us, Mr. Karam Illahi Chauhan, the learned counsel for the appellants in Regular Second Appeal No. 391 of 1956, has first attacked the findings of the learned Additional District Judge with regard to the superior right of the plaintiff -respondents. He has contended that the learned Additional District Judge has taken an erroneous view regarding the date from which the respondents can be deemed to have become co‑sharers in one of the khatas in dispute, namely, Khata No.

37. He has pointed out that the only claim of the plaintiff -respondents to being co‑sharers in this khata is based on the decree Exh. P. 3 obtained by them on the 28th of August 1954 in a pre‑emption suit and the benefit of this decree cannot be given retrospective effect from the date of the sale which was the subject of pre‑emption in that suit. The sale in that case had been made on the 29th of June 1953 by Nabu and Nazra In favour of one Shahu. The plaintiff‑respondents had instituted their suit on the 23rd of June 1454 and obtained the decree on the 28th of August 1954. The learned Additional District Judge considered that the plaintiff-respondents, having been substituted for the vendee, Shahu, must be deemed to have become co‑sharers In a part of the present suit land from the date of the sale in favour of Shahu, namely, the 29th of June 1953.

7. Mr. Chauhan has relied on several authorities for the proposition that the benefit derived by the plaintiff‑respondents under the pre‑emption decree Exh. P. 3 cannot be given retros pective effect from the date of the sale, but must take effect from the date the decree was Implemented by the plaintiff- respondents, by fulfilling the conditions imposed thereunder with regard to the payment of the pre‑emption money etc. For instance, in Nadir Ali Shah v. Wali and Amir (I L R 5 Lah. 486) it was held that a successful pre‑emption is vested with the rights of the vendee, not from the date of the sale, but from the date on which he satisfies the conditions of the decree in his favour and brings it into operation.

8. The decision in Nadir Ali Shah v. Wall and Amir came in for detailed examination by a Full Bench of the Lahore High Court in Lachhman Singh v. Natha Singh (I L R 11 Lah. 128) and it was held that the case had been correctly decided. Their Lordships also referred to Order XX, rule 14 of the Civil Procedure Code, which lays down that in a pre‑emption decree the title of the plaintiff to the possession of the property shall be deemed to have accrued from the date on which payment of the decretal amount is made. They went on to add that " this provision of the law was considered by their Lordships of the Privy Council in Deonandan Prashad Singh v. Ramdhari Chowdhari ((1916) I L R 44 Cal. 675 (P C)), and it was held that a successful pre‑emptor is entitled to rents and profits of the land from the date, when on payment of the purchase money within the period specified in the decree he had obtained possession of the property, and that till then the original vendee retained possession, and was entitled to the rents and profits. In that case Lord Buckmaster L. C., referred with approval to the judgment of Mahmood, J. in Deokinandan v. Sri Ram ((1890) I L R 12 All. 234 (F B)) already cited, and observed that it was only when the terms of the decree were fulfilled and enforced that the persons having the right of pre emption become owners of the property, that such ownership did not vest from the date of sale, notwithstanding success in the suit, and that the actual substitution of the owner of the pre‑empted property dates with possession under the decree."

9. Mr. Chauhan also cited Deokinandan v. Sri Ram and Deokinandan Prashad Singh v. Ramdhari Chowdhri (I L R 44 Cal. 675) which however, need not be separately noticed as they have found mention in the observations cited above by us from Lachhman Singh v. Natha Singh. We may, however, mention that this view was reiterated by another Full Bench of the Lahore High Court in Muhammad Sadiq v. Ghasi Ram and other (A I R 1946 Lah. 322) as would be seen from the following passage appearing in that judgment: ‑ " A right of pre‑emption can be said to have been effectively exercised or enforced only when the pre‑emptor has become actually substituted for the vendee in the original bargain of sale. Where the pre‑emptive right is sought to be enforced by means of a suit, such substitution takes place and the pre‑emptive right is deemed to have been exercised or enforced only when the price has been paid by the pre emptor into Court in compliance with the decree passed in his favour. When the right is sought to be enforced by means of a private treaty out of Court the substitution of the pre‑emptor for the purchaser takes place and the pre emptive right is exercised or enforced when the price is either paid or tendered to the purchaser and be has actually surrendered the bargain in favour of the pre‑emptor. There can be no enforcement of the pre‑emptive right except by complete divestiture of the vendee's title and the vesting of such title in the pre‑emptor."

10. Mr. Zaidi, the learned counsel appearing for the plaintiff -respondents, relied on Kalu and others v. Bhupa and Bisharat Ali (30 P R 1893) which, however, does not contain any discussion on the point we are considering here. We find ourselves in respectful agreement with the view adopted in the authorities cited by Mr. Karam Elahi Chauhan, and hold that the plaintiff‑pre‑emptors became co‑sharers in the khata in question not from the date of the sale which was pre‑empted by means of the decree Exh. P. 3, but at the earliest from the date of that decree, namely, the 28th of August 1954, as there is no information as to when the conditions of that decree were fulfilled by the pre‑emptors. In other words, on the date of the sale which is the subject‑matter of the present suit, the plaintiff were simply owners in the estate and not co‑sharers in the khata.

11. The next question is whether the improvement effected by the plaintiff‑respondents in their status after the date of the sale but before the institution of the present suit can be of any avail. There does not appear to be any specific provision In the Punjab Pre‑emption Act on this subject on the lines of section 21‑A of the Act which deals with the improvement in the status of the vendee‑defendant made after the institution of a suit for pre emption. That section appears to permit, by implication, a vendee -defendant to improve his status after the sale but before the institution of a suit for pre‑emption. The position with regard to a pre‑emptor, however, appears to be different. A Full Bench of the Lahore High Court observed in Faiz Muhammad v. Fajar Ali (A I R 1944 Lah. 172) that "the vendee is on the defensive and Is entitled to arm himself with a shield to order to protect his right which had accrued to him on the basis of his contract. A pre‑emptor is on the other hand, an aggressor. It is he who wishes to dislocate the vendee and It Is he, therefore, who must show that the superior right to pre‑empt which he had at the date of the sale continues to remain superior at all relevant times. If he fails to show that, he must fail in his suit. Hence, it is not permissible for a pre‑emptor to so improve his position before the date of the Institution of the suit although after the date of the sale as to render the improvement made by the vendee in his status after the Institution of the suit for pre‑emption against him Ineffectual." It may be remarked that the last sentence obviously refers to the position as it prevailed before the Introduction of section 21‑A of the Pre‑emption Act.

12. We are in respectful agreement with these observations, which are in accord with the definition of the "right of pre emption" given in section 4 of the Pre‑emption Act. According to that section, a right to acquire a property by pre‑emption arises on the date of the sale. The result, therefore, is that the decree Exh. P. 3 obtained by the plaintiffs on the 28th of August 1954 cannot help Improve their status to that of being co‑sharers. They must stand or fall on the basis of their status of being simple owners in the estate.

13. Now, on the date when the present suit was instituted, namely, the 1st of October 1954, the vendee‑appellants had also become owners in the estate although they were not so on the date of the sale, i.e. the 26th of September 1953. They had acquired certain property in this estate by means of sale‑deed Exh. R. I on the‑26th of January 1954. The present plain tiff‑pre‑emptors bad instituted a suit to pre‑empt that sale as well but the Fame was dismissed by the trial Judge on the 26th April 1956, and the appeal was also dismissed by District Judge on the 11th of June 1956. Mr. Zaidi, the learned counsel for the plaintiffs, strenuously contended that if we are going to hold that in the case of the pre‑emptors the benefit of the decree Exh. P. 3 can accrue to them at the earliest from the date of the decree, then a similar rule should be applied in the case of the vendee‑defend ants and their status as owners in the estate should take effect not from the date of the sale in their favour by means of sale‑deed Exh. R. I. but from the date on which the pre‑emption suit filed against them was dismissed i.e., the 26th of April 1956. If this contention of the learned counsel is accepted, then the position would be that on the date of institution of the present suit i.e. the 1st of October 1954, the vendees would be non‑proprietors in the estate, and will be clearly hit by section 21‑A of the Pre‑emption Act, with the result that no benefit will accrue to them from the sale in their favour effected on the 26th of January 1954. In this connection Mr. Zaidi referred us to section 28‑A of the Pre‑emption Act. This section is to the following effect: ‑‑ "(1) If in any suit for pre‑emption any person bases a claim or plea on a right of pre‑emption derived from the ownership of agricultural land or other immovable property, and the title to such land or property is liable to be defeated by the enforcement of a right of pre‑emption with respect to it, the Court shall not decide the claim or plea until the period of limitation for the enforcement of such right of pre‑emption has expired and the suits for pre‑emption (if any) instituted with respect to the land or property during the period have been finally decided. "(2) If the ownership of agricultural land or other immovable property is lost by the enforcement of a right of pre‑emption, the Court shall disallow the claim or plea based upon the right of pre‑emption derived therefrom."

14. It was contended by Mr. Zaidi that as long as the pre emption suit against the vendee‑defendants in respect of the sole evidence by document Exh. R. I. was pending, it was not open to them to raise the plea that they were proprietors in the estate, and therefore, the trial Court in the present suit, committed an error of law in entertaining this plea and treating them as proprietors in the estate. A reference to the language used in section 28‑A clearly shows that it does not debar a plaintiff or a defendant from basing a claim or a plea on a right of pre‑emption derived from the ownership of agricultural land or other immovable property, the title to which is liable to be defeated by the enforcement of a right of pre‑emption ; all that the section contemplates is that the Court shall not decide such a claim or plea until the period of limitation for the enforcement of such right of pre emption has expired and the suits for pre‑emption, if any, institu ted with respect to the land or property have been finally decided in other words, the vendees were within their rights to raise the plea that they had become owners in the estate by means of a sale in their favour on the 26th of January 1954, but the Court should not have decided this plea until the expiry of the period of limita tion or the decision of the pre‑emption suit. In the present case, although the trial Court dismissed the plaintiffs' suit on the 12th of January 1956, I.e., before the decision of the preemption suit filed against the vendees in respect of the sale dated the 26th of January 1954, that decision was not based on the plea referred to in section 28‑A, but on the basis that the transaction sought to be pre‑empted was an exchange and not a sale. When the appeal came to be decided by the learned Additional District Judge in July 1956, the other pre‑emption suit and the appeal filed by the pre‑emptors had both been dismissed. The learned Additional District Judge was, therefore, entitled to decide on the plea raised by the vendees in this case. We find, therefore, that in the circumstances of the present case no benefit can accrue to the pre‑emptors by reference to the provisions of section 28‑A of the Pre‑emption Act.

15. The argument that the case of a vendee should be governed by the same principles as that of a pre‑emptor overlooks the fundamental distinction between the position of the two a distinction forcefully brought out in the judgment of the Full Bench of the Lahore High Court in Faiz Muhammad v. Fajur All from which we have already quoted. It is clear that a vendee acquirers his rights on the date of the sale and they are not void or incom plete simply for the reason that they are open to challenge by a pre‑emptor. If the pre‑emption suit against him fails, his rights remain intact and the effective date is the date on which they were acquired. On the other hand, a pre‑emptor does not acquire any right in the land sought to be pre‑empted until such time as his right has been recognised and he has been substituted for the vendee. It is clear, therefore, that the same principles can not apply to the case of a vendee as obtain in the case of a pre emptor. As additional support for this view, we might refer to Boota Ram v. Bagga Singh (A I R 1948 Lah. 103) in which a Division Bench of the Lahore High Court observed that "a deed operates according to law from the date of Its execution and not of its registration. Where, therefore, a deed of gift In favour of a vendee (by which gift the vendee improves his status) is executed before the date of suit for pre‑emption, the provisions of section 21‑A according to which vendee cannot improve his status after the institution of the suit, do not stand in the way of the vendee even though the deed of gift Is registered after the institution of the suit."

16. It will be seen, therefore, that the position which emerges is this. The relevant date for determining the status of a pre‑emptor is the date of the sale which he seeks to pre‑empt. Any Improve ment in the status after the date of the sale is of no avail. Any improvement obtained by him through a Court decree takes effect from the date the conditions of the decree are fulfilled and he is substituted for the vendees, and not from the date of the sale which formed the subject‑matter of that decree. As regards the vendee, the relevant date is the date of the institution of the suit as prescribed by section 21‑A of the Punjab Pre‑emption Act. Any improvement in his status effected by a vendee takes effect from the date of the sale in his favour and not after the expiry of the period of limitation or the dismissal of any pre‑emption suit which may be brought in respect of such a sale.

17. Applying these principles try the present case, we find that the plain tiffs‑pre‑emptors were owners in the estate on the date of the sale in suit, namely, the 26th of October 1953. They became co‑sharers in one of the khatas after the "8th of August 1954, but that improvement is of no avail as it was effected after the date of the sale. The vendee, on the other hand, were not owners in the estate on the date of the sale but they improved their position ant', became owners in the estate before the institution of the suit on the 1st of October 1954, with the result that when the suit wag instituted, they had an equal right of pre-emption with the plaintiff‑pre‑emptors and could not be ousted from the land in suit For this reason, the suit of the plaintiff respondents was liable to be dismissed.

18. In view of our finding on the question of the relative pre‑emption rights of the parties, we do not think it necessary to deal with the other contentions raised by the learned counsel on both sides. We would accept Regular Second Appeal No. 391 of 1956 and dismiss the plaintiffs' suit with costs throughout. The cross appeal filed by the plaintiffs, namely, Regular Second Appeal No. 477 of 1956 also stand dismissed. K. B. A. Appeal accepted.