P L D 1991 Supreme Court 130 (PLP)

ZAFFAR HUSSAIN MIRZA, J.‑‑These two appeals are in fact between the same parties and arise out of a single judgment and decree passed in Civil Suit No.471 of 1979, riled by the respondents. Therefore, we propose to dispose of these two appeals by the present common judgment. The facts forming the background of these appeals may briefly be stated as follows. One Nazar Muhammad had obtained a decree for possession through pre‑emption in respect of the land in dispute against Nawab Khan respondent No.1 and others respondents herein. After having deposited the pre‑emption amount in Court, in pursuance of the decree, by means of registered instrument dated 30th July, 1978, Nazar Muhammad sold his rights under the aforesaid decree to Sultan Muhammad and others appellants herein. It was specified in the sale‑deed that the first three appellants jointly were being transferred separately specific shares in the land which was subject‑matter of the decree and the remaining share separately in the said land to appellant No.4. The details may be stated at this stage. Out of the total area of 157 Kanals 7 Marlas, covered by the decree, the rights and interests of the decree‑holder in respect of an area of 137 Kanals 5 Marlas comprising Khasra numbers 1378, 1380, 1381, 1382, 1388, 1387, 1379, 1389, 1390, 1391, 1392 and one‑half of Khasra number 1383 were sold in favour of the first three appellants jointly and the rights in respect of an area of 20 Kanals 2 Marlas comprising Khasra number 1W and the remaining one‑half of Khasra number 1383 were sold to the appellant No.4. Significantly, however, the instrument did not specify the shares of the sale price contributed by each of the vendees. On 30th September, 1979, respondents instituted, in the Court of Civil Judge, Attock, a suit against the appellants, for pre‑emption of the said sale. The respondents based their right of pre‑emption on their being collaterals and heirs of the vendor. The appellants contested the suit and on the pleadings of the parties various issues were framed by the trial Court. The main plea in defence raised by the appellants was that they were tenants on the suit land at the time of its sale and therefore, the respondents (plaintiffs) did not have a superior right of pre‑emption as against them. The learned trial Court found that out of the lands in suit, appellants Nos. 1 to 3 were tenants in part of the suit land at the time of sale comprised in Khasra numbers 1379 and 1388 to 1392. They were not tenants in respect of the rest of the suit land. On this finding the trial Court by its judgment dated 14th April, 1981, decreed the suit of the respondent sin respect of an area measuring 74 Kanals 3 Marlas, namely, the land in respect of which the appellants were found to possess tenancy Tights. The decree directed the payment of Rs.30,104.22 which was proportionate share of the total sale price. The result was that the suit of the respondents in respect of rest of the land was dismissed. As the success was divided between the parties both parties filed first appeals to challenge the judgment and decree passed by the trial Court before the District Judge, Attock. By a common judgment, dated 15th March, 1982, the learned Additional District Judge, Attock, who decided the appeals, dismissed the appeal of the present appellants and accepted the appeal of the respondents, and decreed the suit in their favour in respect of the entire land in suit on payment of Rs.64,

000. The decision of the learned Additional District Judge proceeded on the principle of sinker, whereby it was found that while appellants Nos.1 to 3 were tenants of the land in suit, appellant No.1 was not a tenant in respect of any part of the land at all, therefore, by joining him in the sale they had lost their superior rights by the doctrine of sinker. The appellants then filed two regular second appeals in the Rawalpindi Bench of the Lahore High Court. By a common judgment dated 24th April, 1982, a learned Single Judge of the Lahore High Court dismissed both appeals in limine. The only contention advanced in support of the appeals before the High Court was that in the sale‑deed by which the appellants had purchased the land, the land in share of the appellant No.4 was separately shown and therefore, the sale was severable. In other words the contention was that in fact there were two sale transactions incorporated in the same instrument, one in favour of the first three appellants and the other in favour of the appellant No.4, and therefore, the doctrine of sinker was not attracted in the case of the remaining three appellants. This contention was repelled by the learned Single Judge for the reasons which appear in the following part of his order:‑‑ "There is, however, nothing in the sale‑deed indicating as to how Saadat Khan had shared the sale price which has been mentioned in lump sum. The land purchased by Saadat Khan cannot be separated from that of his co‑vendees as his precise share in the sale price is not known. The sale In the instant case is, therefore, not divisible. As a result, the vendees who have been found to be tenants would be hit by the doctrine of sinker due to their having associated with them a stranger." The appellants then brought two separate petitions for leave to appeal before this Court and leave was granted to consider the following contentions: (i) The sale was not of land/immovable property but of the rights under decree. (ii) The land covered by decree was separately described and assigned to set of vendees having right of pre‑emption and another to stranger. (iii) The share was so specified as to make proportionate price of the land capable of reckoning. So the principle of sinker did not apply." Malik Muhammad Jaffar learned counsel for the appellants has reurged the three contentions noted in the leave granting order as stated herein above. In respect of the first contention he invited us to examine the nature of the sale and particularly the subject‑matter of the transaction evidenced by the instrument dated 30th July, 1978. In a well‑prepared argument learned counsel raised the question that the terms of the sale instrument clearly spell out that the, subject‑matter of transfer was the rights under the pre‑emption decree obtained by the vendor and not the land described therein, He referred to the title of the instrument which reads as under:‑‑ Proceeding on this premise that the sale related to the rights of the decree‑holder under the pre‑emption decree, learned counsel forcefully contended that no right of pre‑emption accrued in favour of the respondents, in that, by virtue of section 6 of the Punjab Pre‑emption Act, 1913 (hereinafter referred to as the Act) which recognizes such a right to exist in respect of 'agricultural land' and 'village immovable property. The submission was that the sale in suit did not relate either to such land or immovable property, but to intangible rights under the decree. Learned counsel referred to the definition of the said expressions in clauses (1) and (2) of section 3 of the Act. Learned counsel also referred to the provisions of Order XXI, Rules 15 and 16 of the C.P.C. to urge that the rights of decree‑holder or transferee of the decree are distinct. According to the learned counsel the purchaser under the transaction had merely acquired the right to execute the decree by making an application under Order XXI, Rule 16 and his rights were inchoate, since the proceedings with regard to notice before execution of the decree were required to be taken in terms of Rule

16. Learned counsel asked, can such creation of rights be equated with the sale in respect of agricultural land or village immovable property? We have carefully considered the arguments of the learned counsel and regret our inability to find force in them. The admitted position is that the sale transaction in suit had taken place after Nazar Muhammad the vendor (decree holder in the previous suit) had already deposited the pre‑emption amount in 113 Court. On the strength of this fact it was urged by Mr. Bashir Ahmad Ansari, learned counsel for the respondents, that by virtue of the provisions of Order XX, Rule 14, C.P.C., the title in the property which was subject‑matter of the earlier pre‑emption decree stood vested in Nazar Muhammad from the date of such payment and therefore, the transaction created in substance and in reality a right in the land. Such a transaction of sale, it was urged, is subject to all incidents of the right of pre‑emption recognized under the Act. Counsel submitted that therefore, the provisions of Order XXI, Rule 16, C.P.C. are not relevant at all. The principle underlying section 4 Of the Act, whereby the power of the Court to determine the real or substantial nature of the alienation whether it was a sale or not, recognizes that the form of the transaction is not material but the Court has to determine if the transaction amounts to a sale in fact, then notwithstanding its form the right of pre‑emption will come into operation. It is clear to us that what the appellants were purchasing was not a mere paper decree or the right to execute a decree, unrelated to the rights in land which was the subject‑matter of the decree. Indeed in view of the fact that the decree‑holder had already acquired title in the land by virtue of the payment of pre‑emption money apparently he was transferring that right in land through the transaction. Whether the possession was not immediately transferred, or was to be obtained by means of execution proceedings, will not have a material bearing on the nature of the transaction as a sale in respect of agricultural land. Once it is held that the transaction effected a transfer of a right in land, it follows that any right arising out of such sale of land in favour of a third party would automatically flow from such transaction. In this connection reference may be made to Allah Ditta v, Fateb Khan P L D 1970 Lah. 168 in which the question with regard to the right of pre emption under the Act in respect of land permanently settled under the Displaced Persons, (Land Settlement) Act, 1958, was considered. It was urged in that case that a sale by an allottee of land under the Settlement Law was not subject to right of pre‑emption because a sale of allotment was not a sale in respect of agricultural land but a sale of mere right of Allotment. It was held that since the allotment gave the right of alienation to the allottee, even though the allotment was liable to be cancelled under sections 10 and 11 of the Displaced Persons Act if found to have been obtained by fraud and misrepresentation, the sale of right of allotment does fall within the purview of section 4 of the Act. Reliance was placed on Syed Abdul Rashid v. Pakistan and others P L D 1962 SC 42 in which following dictum was laid down:‑‑ "It is difficult, in the circumstances, to imagine how it can be said that the interest acquired by the allottee in the property is merely a personal interest which cannot be inherited. In our view, having regard to the rights expressly conferred upon him by the Scheme itself, an allottee, in whose favour an allotment has been confirmed, acquired a right which is in every sense of the term a 'real property' in its true juristic concept an interest in land." From the aforesaid dictum laid down by this Court it will be manifest that the crucial test is whether a right is acquired in the land which is tantamount to real property, in order to attract the provisions of the Act. The case of Syed Abdul Rashid was followed by Jallu v. Muhammad Khan and others P L D 1973 SC 347 in which the maintainability of the pre emption suits in respect of sale by the vendors of their rights and interests in the evacuee land held by them as temporary allottees, confirmed allottees or permanent transferees was considered. In this case the dictum laid down in the case of Syed Abdul Rashid (supra) was reaffirmed and in an exhaustive judgment it was held that since no right or interest in the land was created by temporary allotment the same did not fall within the purview of section 4 of the Act and was not subject to pre‑emption because such allottees could not sell such non‑existent rights. As regards the permanent transferees, since, they were conferred full ownership rights under Settlement Act, the sales made by them were held subject to right of pre‑emption. Even in respect of confirmed or permanent allottees, in view of the dictum laid down in the case of Abdul Rashid (supra) although the allottee did not become absolute owner of the land, since he acquired interest in the land, his right was equated with occupancy tenancy and was, therefore, held to be subject to the right of pre‑emption. The conclusion was formulated by the Court as hereunder:‑‑ (1) There is no right of pre‑emption in regard to sale by temporary allottees of their rights in the lands as they do not get any saleable interest in those lands held by them temporarily. (2) Permanent transferees under the Land Settlement Act acquire full ownership rights of the lands conferred on them and the sale by them is the sale of agricultural land owned by them which is subject to the right of pre‑emption under the Pre‑emption Act. (3) The rights in land allotted to confirmed allotted rights conferred on them fall in the category of 'village immovable property'. The sale of such rights is pre‑emptible under the Punjab Pre emption Act." The aforesaid discussion leads us to the conclusion that in the present case the transaction in question did involve the transfer of rights and interests in immovable property which inhered in the decree‑holder in the previous suit by virtue of the decree and the payment of the pre‑emption amount. But for this, it seems to us that the sale of a pre‑emption decree in which the payment of amount was not deposited would be purely sale of a decree creating a personal right, which cannot be transferred to a third person, for the reason that such a decree is a judicial recognition of a personal right of the pre‑emptor. See Mustaqim v. Sher Bahadur PLD 1962 Pesh.

14. In such a case no right is created in favour of the transferee or an assignee of the decree. But in the present case since the title in the property stood vested in favour of the pre‑emptor by virtue of the payment of the pre‑emption amount under the decree, rights in property had accrued to him, therefore, he could transfer by sale his rights in land to the appellants. However, since such rights were created by sale in agricultural land, or village immovable property the same gave rise to the right of pre‑emption in favour of the respondents. See 94 P.R. (1902). As there is no dispute in the view we have taken the conclusion would be that the transaction in question was a sale in respect of agricultural land within the meaning of section 3 of the Act. Therefore, the reliance of the learned counsel for the appellants on Hardit Singh v. Mohindar Singh and others A I R 1937 Lah. 755 is not relevant. The other cases referred to by the learned counsel with regard to the subject‑matter of sale are similarly irrelevant. In this view of the matter we find no substance in the first contention of the learned counsel. The next two contentions can be taken up together as they referred to the question whether the doctrine of sinker was attracted in the present case. The contention of the learned counsel for the appellants was that the land covered by the decree was described and assigned, in the transaction in question, in favour of the first three appellants separately as vendees and separate portion of land was described as assigned to appellant No.4. In other words, the submission was that the transaction was divisible so that the transfer in favour of the first three appellant, jointly who had a superior right of pre‑emption by virtue of their being tenants in the land, was not liable to be vitiated, merely because separately described land in the same instrument was transferred to appellant No.4 who was stranger having no right of tenancy. The admitted position in the present case is that separate parcels of lands were described in the instrument to have been transferred to the first set of three appellants and appellant No.4. However, so far as the price or consideration is concerned it was shown as paid by only one of the vendees. Mr. Bashir Ahmad Ansari, learned counsel for the respondents has referred to Muhammad Ismail and others v. Karamat Ali P L D 1989 SC 474 in which it was held that if a vendee having a superior right of pre‑emption joins with another vendee who is a stranger having no such right, if such a transaction is through a single sale‑deed and they come into a possession of the suit land jointly with common interest in it the transaction would be indivisible, attracting the doctrine of sinker. However, the position now stands settled by a recent decision of this Court in Civil Appeal No.10 of 1983, Mir Ahmad son of Ghulam Muhammad v. Attaullah alias Atta Muhammad and others, and connected Appeal No.20 of 1983 Muhammad Anwar Khan and others v. Attaullah alias Atta Muhammad and others, where it has been held that 'in pre‑emption suits where a vendee having an equal or superior right of pre‑emption associates a stranger i.e. a person having an inferior right of pre‑emption than the pre‑emptor, the rule of sinker will apply and the suit decreed unless the impugned sale is divisible i.e. it is a sale wherein not only the share of each vendee is specified but the amount paid towards the price by each vendee is also specified." In the light of the aforesaid decision the transaction in the present case cannot be held to be divisible, so as to avoid the doctrine of sinker, for the simple reason that the amount paid towards the price has not been separately apportioned to each vendee but has been shown to have been paid by one of the vendees in lump sum. Thus, if the transaction is not divisible the learned Judge in the High Court was right in holding that the first three appellants cannot separately claim a superior right and defeat the right of pre‑emption set up by the respondents. Our conclusion is that the doctrine of sinker has been rightly applied in this case and the defence of the appellants rejected on that account. For the foregoing reasons both these appeals fail and are accordingly dismissed but in the circumstances of this case we make no order as to costs. M.BA./S‑593/S Appeals dismissed