P L D 1952 Lahore 489 (PLP)

RAHMAN, J.‑This order will dispose of a regular second appeal arising out of a pre‑emption suit brought by Muhammad Akram Khan to pre‑empt the sale of a house effected by Muhammad Rab Nawaz Khan defendant No. 2 in favour of Mst. Kaniz Fatima defendant No. 1, by deed dated the 12th January 1945, which was registered on the 22nd January 1945, for an ostensible consideration of Rs. 2,

600. It appears that Amir Baz Khan defendant No. 3, had also brought another pre emption suit in respect of the same property, a little earlier than Muhammad Akram Khan. Amir Baz Khan obtained a consent decree in his favour on the 23rd January 1946. Two days later, i.e., on the 25th January 1946, Amir Baz Khan sold the house that he had obtained under the pre‑emption decree; to Allah Ditta defendant No. 4 and Barkat Ali defendant No. 5, along with his own house on which his claim of pre emption was founded. This sale‑deed was registered on the 26th January 1946. The third vendee in his turn sold the property m suit, on the 9th March 1946, to Haji Muhammad Suleman defendant No.

3. The second, third and fourth vendees were impleaded by Muhammad Akram Khan in his suit as defendants after he had learnt of the transactions in their favour and he invoked the rule of lis pendens against them. The trial Court decreed the plaintiff's claim in respect of half the house in dispute on payment of Rs. 1,300 and this decision was affirmed on appeal by the learned Additional District Judge, Multan. Muhammad Akram Khan has come up in second appeal to this Court and cross‑objections have also been lodged on behalf of Muhammad Suleman defendant No.

6. This order will dispose of the appeal and the cross‑objections together. There is now no contest between the parties as regards the price at which the property was pre‑emptible. The osten sible price of Rs. 2,600 is accepted as a genuine one. It is further not disputed that both Muhammad Akram Khan and Amir Baz Khan owned properties contiguous to the house sold by Muhammad Rab Nawaz Khan at the time of the sale in favour of the first vendee. They had, therefore, equal rights to pre‑empt the sale. The Courts below have taken the view that though the second vendee obtained a decree in respect of the house by exercise of his right of pre‑emption, yet the decree was not binding on the appellant who was not impleaded in Amir Baz Khan's suit as a defendant. Consequently, it was held that the appellant and the second vendee were both entitled to take the property in equal shares. In appeal it is contended that the appellant hail the right to pre‑empt the gala of the whole of the house, as the third and fourth vendees were strangers and the second vendee had parted with his rights in the property, while the suit of the appellant was pending. In the cross -objections, on the other hand, it is urged that the appellant could not have been granted a decree even in respect of half the property as the appellant's right was effectively defeated by Amir Baz Khan having obtained a decree in his favour in exercise of his right of pre‑emption. It was maintained that the right of pre‑emption was one of preference besides being one of substitution for the original vendee and inasmuch as the appellant could not claim a right superior to that of Amir Baz Khan, his suit ought to have been dismissed. Mr. Muhammad Amin Khan appellant has cited Het Ram and others v. Dal Chand and others i L R 1933 (XIV Lah. 421), as authority for the proposition that the plaintiff in a pre emption suit must possess the necessary qualifications on three important dates, namely, (1) the date of the sale, (2) the date of institution of the suit, and (3) the date of the first Court's decree. He argues that in competition with the appellant, Amir Baz Khan has lost his right of pre‑emption by sale in favour of the third vendee before the appellant's suit was decreed, whereas the transferees from him had no right of pre‑emption whatever. He further drew our attention to Muhammad Ayub Khan and another v. Rune Khan and others 95 P R 1901, in which it was laid down that the right of pre emption is personal and incapable of being assigned. In that case a half share in five shops was transferred and subsequently, the owner of the other half share, gifted all his property inclu ding his half share in the shops, to his mother. He then, jointly with his mother, sued for pre‑emption in respect of the sale. It was held that the son was not competent to sue as he had parted with his ownership before the suit and that the mother had no right to sue as the property was sold before she became owner of the pre‑emptive property. Mr. B. Z. Kaikaus for the respondents has relied very strongly on three Full Bench decisions reported as Mool Chand and others v. Ganga Jal and others A I R 1930 Lah. 356, Mst. Sant Kaur v. Teja Singh A I R 1946 Lah. 142 and Muhammad Sadiq v. Ghasi Ram H I R 1946 Lah.

322. In the first case it was held by a majority of the judges constituting the Bench that the word `pre‑emptor' in section 17 of the Punjab Pre‑emption Act hereinafter referred to as the Act cannot be taken to include a person who has already purchased property in the exercise of his right of pre‑emption. It means a person seeking to enforce his right of pre‑emption through a Court. There, therefore, during the pendency of a pre‑emption suit, the property in dispute is sold by the vender to a person possessing a right of pre‑emption equal to that of the plaintiff, the plaintiff cannot share the property with the second vendee. Dalip Singh, J. expressed his doubts about the correctness of this proposition. He was inclined to apply the terms of section 17 of the Act, even in a case where the sale to the second person was a private sale, but lie agreed nevertheless with the other learned judges that section Ii of the Act did not in terms apply to such a case. The Full Bench gave a unanimous decision that the rule of lis pendens applies to pre‑emption suits. But it was added that this rule does not affect the validity of the gale effected by the vendee during the pendency of a pre‑emption suit to a person possessing a right of pre‑emption equal to that of the pre‑emptor. In the second case it was re affirmed that the doctrine of lis pendens applies to pre‑emption suits. It was further observed that a transferee pendente lite from the vendee, who had taken the property in recognition of his right of pre‑emption, within limitation, can defend his pos session on all pleas which he could have taken, had the sale been initially in his own favour. Where, however, at the time of the second transfer, the limitation for instituting a suit for pre‑emption by the second vendee had expired and he had lost the use of the coercive machinery of the law for compelling the vendee to surrender the property in recognition of his right of pre‑emption, the transfer in his favour by the original vendee must be regarded as a voluntary transfer of such title as the vendee himself had acquired under the original sale, so as to attract the principle of lis pendens. It would make no difference if the second vendee in such a case had in fact a superior right of pre‑emption to that of the plaintiff in the pending suit. In the third case it was laid down that the doctrine of lis pendens applies to a case where before the institution of the suit for pre‑emption, an agreement to sell the property has been executed by the vendee in favour of another prospective pre emptor, with an equal right of pre‑emption and subsequent to the institution of the suit, in pursuance of the agreement, a sale‑deed has been executed and registered in the latter's favour, after the expiry of limitation for a suit to enforce the latter's pre‑emptive right. The sale in favour of the second vendee in such a case cannot defeat the plaintiff's suit. The learned Judges followed the rule laid down in A I R 1946 Lah.

142. It was further held in that case that the substitution of the pre‑emptor for the purchaser takes place only when there is a complete divestiture of the purchaser by payment of the price, or its tender and surrender of the bargain in favour of the pre‑emptor. Mr. Kaikaus also cited Ghulam Qadir v. Ditta and others A I R 1946 Lah. 184 (F B) in support of his proposition that the right of pre‑emption is one of substitution. On the basis of these authorities, Mr. Kaikaus maintains that as Amir Baz Khan's right of pre‑emption was still alive when he got the property under his decree, he was at once substituted for the original vendee in the transaction of sale which was sought to be pre-empted, and, therefore, the appellant was out of Court as he had no preferential right and the subsequent transferees from Amir Baz Khan could stand in his shoes. Another ruling on which Mr. Kaikaus takes his stand is a Full Bench decision of this Court in Thakur Madho Singh and another v. Lt. James R. R. Skinner and another A I R 1941 Lah.

433. In that case it was held that a vendee can defeat the right of a pre‑emptor by improving his status at any time before the passing of the decree in the pre‑emption suit by the trial Court and that the improvement by the vendee in his status can be effected even after the expiry of one year from the date of the original trans action of sale. This proposition is hardly of any importance now in view of the introduction of section 21 (a) in the pct by the Amending Punjab Act I of 1944. It was, however, observed by the Full Bench in that case that the resale by the vendee in favour of a person possessing equal rights with the pre‑emptor, thus leading to a dismissal of the pre‑emptor's suit, is valid, on the authority of A I R 1930 Lah.

356. In my opinion, the authorities cited on behalf of the respondents are distinguishable on the fact from the present case. It is clear that the suit of the appellant was pending at the same time in the same Court as that of Amir Baz Khan. A suit must be regarded as pending as soon as it is lodged. Reference in this connection may be made to Faiyaz Hussain Khan v. Prag Narain's I L R 29 All. 339 P C. About a week after the suit of the appellant had been instituted, Amir Baz Khan seems to have persuaded the original vendee to confess judgment in his favour and to have thus stolen a march over the appellant. The decree passed in his favour was in violation of the terms of section 28 of the Act which prescribes that when more suits than one, arising out of the same sale or foreclosure, are pending the plaintiff in each suit shall be joined as defendant in each of the other suits, and in deciding the suits, the Court shall, in each decree, state the order in which each claimant is entitled to exercise his right. There can be no doubt that if the procedure laid down in this section had been followed, section 17 of the Act would have been at once attracted to the case and, the appellant as well as Amir Baz Khan would each have been granted a decree for half the property. In my opinion, the decree obtained by Amir Baz Khan in these circumstances is of no avail to him as against the right of the appellant whose suit was pending at the same time. Whatever the decision might have been on the authority of the Full Bench decisions of this Court, quoted above, if Amir Baz Khan had obtained a sale in his favour by private treaty, the facts here establish that sections 28 and 17 of the Act were applicable and, therefore, those decisions being distinguishable, are not really in point. I may only note that there seems to be conflict of authority on the point decided in these Full Bench cases. Other Courts appear to have adopted the view that the rule of lis pendens affects all sales, whether made by private treaty or otherwise. However, I need not Lahour the point further, as even if the Full Bench judgments are accepted as unquestioned authorities, they must be held confined to the facts of those cases. In the present case the position seems to be different. The decree that Amir Baz Khan had procured did not give him any advantage over the appellant and, therefore, the Court which had both the pre‑emptors before it, could have given them half a share each in the property, by way of pre‑emption, provided Amir Baz Khan still held the decree. It may be pointed out that under section 13 of the Act whenever a right of pre‑emption vests in any class or group of" persons, the right may be exercised by all the members of such class or group, jointly or severally. It would be anomalous to hold that if they brought separate suits, non of them could defeat the other's right by merely obtaining a collusive consent decree behind the back of the others. This would in fact make the provisions of section 17 of the Act nugatory in respect of equally qualified pre‑emptors rights to share the property in certain proportions or equally as the case may be. The rule of superior diligence which seems to have been recognized in Mohkam Din v. Karim Ullah 102 P R 1881, Rahmat Ali Khan v. Hamid‑ud‑Din and others 43 P R 1903 and some other authorities of the Punjab Chief Court, does not now appear to be applicable in view of the provisions of section 17 of the Act. This was virtually the view taken in another decision of the Punjab Chief Court reported as Ibrahim and others v. Illahi Bakhsh and others 88 P R 1908. The learned judges in that case considered the provisions of section 14 of the Pre‑emption Act, 1905, which corresponds to section 17 of the present Act, as precluding the application of the doctrine of superior diligence. In that particular case, the learned judges applied clause (e) of section 14 of the Pre‑emption Act, 1905 and gave preference to the person in whose favour the vendor had exercised his right of election given by that clause. It is significant that that particular clause has since been removed from the statute. There seems to be considerable force in the contention raised on behalf of the appellant that the third and fourth transferees in this case, who had no independent right of pre‑emption, at the time of the first sale, could not urge in support of their case that their transferor, namely, Amir Baz Khan had a right to retain the property in suit by virtue of his own right of pre‑emption. The transfers in their favour were all made during the pendency of the appellant's suit and, therefore, are hit by the rule of lis pendens. The only contesting party in this case is Muhammad Suleman, the fourth vendee, and it is clear that as against the appellant he has no right whatever. It does not even avail him to say that Amir Baz Khan, in whose shoes he stands had at least the right to retain half the property. It is fairly clear that Amir Baz Khan had no intention of taking the property for his own benefit. Only two days after he had obtained the decree, he passed on the property to others. His exercise of the right of pre‑emption, therefore, was not bona fide in his own interest. It is a well' recognized principle of the Pre‑emption Law that in order to defeat the plaintiff pre emptor, the second sale must be in favour of another pre‑emptor with a superior right, in the bona fide exercise of that right, for his own benefit and not for the benefit of other persons. It was not incumbent on the appellant in this case to bring a separate suit for pre‑emption in respect of the transfer made by Amir Baz Khan in favour of the third vendee and by the latter in favour of the fourth vendee, as both these transfers took place while the appellant's suit was still pending. It is now the fourth vendee who is the contesting respondent and whose rights have to be considered vis a vis that of the appellant. If the choice is confined to them, the answer is obvious that the appellant is entitled to take the whole of the property in exercise of his right of pre emption. The respondent had certainly no such right at the time of the original sale or at the time of the institution of the suit even if he now may have acquired the pre‑emptive property owned by Amir Baz Khan, in the face of section 21‑A of the Act. I may state that there is no evidence on the record to show that Muhammad Suleman has in fact acquired that pre‑emptive property, though it was suggested by Mr. Kaikaus that he had. The result is that the appeal must be allowed and a decree granted to the appellant for the whole of the house in dispute on payment of Rs. 2,

600. He will deposit this money in Court within one month of the date of this order, failing which his suit will stand dismissed with costs throughout. The appellant will have his costs throughout if he complies with this order. Cross‑objections are dismissed with costs. M. SOOFI, J.‑I agree. A. H. Appeal allowed.