PLD 1988 Lahore 691 (PLP)

Laws Cited

Representation

• Chaudhry Hamid‑ud‑Din for Respondent.
• Malik Muhammad Jaffar Advocate appears for appellants in Civil Appeals 629 and 630 of 1975 and respondents in Civil Appeals 385 and 386 of 1975. Ch. Hamid‑ud‑Din Advocate represents respondent in Appeals 629 and 630 of 1975 and appellants in Civil Appeals 385 and 386 of 1975.
• It is contended by Malik Muhammad Jaffar Advocate that pre‑emption being right of substitution, defendants 2 to 4 whose right extended to whole bargain could not claim part of the land sold and forego their right in regard to the rest. It was further submitted that for successful assertion of superior right of pre‑emption out of Court by a pre‑emptor, three essential requirements must be fulfilled;? (a) The transfer must be real and genuine one; (b) It must be in exercise of right of pre‑emption; (c) Transfer must conform to the laws of pre‑emption i.e. it must take place within the prescribed period of limitation and subject to the right of pre‑emption, must embrace whole transaction that is it must not be partial exercise of right of pre‑emption. In support, learned counsel referred to cases of Ralla and others v. Dayal and others, 34 Punjab Records 1903, Muhammad Khan and another v.Sadiq and others, P L D 1968 Lah. 929, Malik Hussain and others v. Lala Ram Chand and others, PLD 1970 S C 299 and also principles of Muslim Law of Pre‑emption. In opposition to these arguments, Ch. Hamid‑ud‑Din learned Advocate for the respondents submitted that rule of partial pre‑emption did not apply to a person with better or equal right of pre‑emption who chose to exercise it privately out of Court. It was argued that if such a person whose right extended to whole bargain chose to exercise it partially, it shall not avail the pre‑emptor who sought the assistance of the ‑Court to enforce his pre‑emptive rights. In this behalf, relied upon. decisions reported as 26 Punjab Records 1908, Muhammad Afzal v. Ghulam Muhammad A.I.R.01) 1944 Lah.463, Mustaqim Khan v. Abdullah Khan and others, P L D 1951 Pesh.1, Ghulam Muhammad and 3 others v. Khushi Muhammad and another P L D 1973 S C 444, Khurshid Alam and 2 others v. Muhammad Shah Nawaz and 12 others, 1985 C L C 1286 (Lah.), Muhammad Iqbal v. Raja Muhammad Asghar and others, P L D 1986 S C 1.
• Seen from the above, these appeals raise only two points for determination. First point is in regard to the entitlement of the parties and the second is about the claim for expenses on improvements as also whether application for amendment was correctly decided. Of the two questions, I shall first take up the question relating to right of pre‑emption. In regard to it, it is‑common ground that plaintiffs and defendants 2 to 4 as owners of property in the revenue state had equal right and their right was at par with each other. It is agreed that in capacity of owners of estate, their right extended to whole bargain. As for the original vendee, he had no right of pre‑emption and was a total stranger to the estate. Defendants 2 to 4 asserted their right out of Court and by compromise agreed to receive 1/3rd share of the properties on payment of stated price and that these transfers antelitem were in recognition of their superior right of pre‑emption. In this background, question emerging for consideration was whether antelitem transfers in favour of defendants Nos.2 to 4 could be held to have taken place in exercise of right of pre‑emption. Concisely put, point is whether rule of partial pre‑emption applied to defendants Nos.2 to 4 and if it did, what was its effect on the entitlement of the pre‑emptor who sued in Court. I have looked into the decisions relied upon by both the parties. There is largely body of case-law to indicate that it is open to the vendee to defend, pre‑emption by any legitimate means and there is nothing illegal in the vendee transferring the property privately out of Court to person who has got superior or equal rights with the pre‑emptor provided the transfer is a genuine transaction and was completed within the period prescribed by law. There is also no dispute that' form of subsequent transfer is immaterial but the important thing is that the tansferee with right of pre‑emption, equal or superior must, not have lost his right by his own conduct and had still the time to enforce it through Court. In result of necessary corollary of right of pre‑emption, pre‑emptor must take over the entire bargain with whole bundle of rights and liabilities, advantages and disadvantages appertaining to original sale. He cannot split and break the bargain, He cannot pick and choose as to the portion he shall like to take and the portion he shall like to leave for the vendee. It is in this sense that pre‑emption is described as right of substitution. Subject to his right, pre‑emptor is bound to take the place of the vendee or vendees in the original contract of sale. In case his right extended to whole bargain, he could not claim partial pre‑emption. To the rule of partial pre‑emption, there are certain well‑defined exceptions. Those do not apply to the facts in the present case and therefore it is not necessary to make a detailed comment thereon. True test whether the plaintiff's suit for pre‑emption should succeed or fail where the original vendee transferred the property antelitem to a third party is whether the plaintiff 'has superior right of pre‑emption in regard to the first sale as against the transferee and also whether the subsequent transfer conformed to laws of pre‑emption. It has been held in several decided cases that Pre‑emption Act did not prescribe any particular mode or form for the exercise of right of pre‑emption nor does the Act indicate preference to one form of exercise of the right over the other. Therefore, it is open to a pre‑emptor to seek assistance of the Court for enforcement of his pre‑emptive right or to have the pre‑emptor property transferred to him through private sale out of Court. All that is required is that assertion and exercise must be genuine and effective. Without dispute, impugned transactions are pre‑emptible sales. Therefore, it was open to the defendants 2 to 4 to enforce their pre‑emption right through Court. Law also gave them option the exercise this right privately out of Court. In case, they filed a pre‑emption suit in Court, they were clearly obliged to sue in respect of the whole bargain and could not omit to sue in respect of any part of the property save at the grave risk of dismissal of the pre‑emption suit. Further, if two suits with equal rights of pre‑emption arose from the same sale, section 17 of Punjab Pre‑emption Act would apply and both sets of pre‑emptors shall share the property. In the facts of the present case, 'if both sets of pre‑emptors had filed suits in Court, clause (c) of section 17 would have applied. As observe 4, above, defendants 2 to 4 chose to settle the dispute with the original vendor out of Court and felt content with 1/3rd share in the properties even though their right extended to the whole of bargain. In my opinion, rule of partial pre‑emption equally applied to a pre‑emptor of whether he chose to exercise his rights through Court or purchased the property privately out of Court in recognition of his superior right of pre‑emption. The fact that he‑ exercised it out of Court and the vendee accepted his claim, neither in principle nor on authority made any material difference. In either case. the property was transferred ' erred in recognition of superior right of pre‑emption and not otherwise. Until now I had been discussing the point without reference to the case‑law. In case of Ralla and others, one Gajju sold 56 kanals, of land to Sawan. Sons of one Kharku as pre‑emptors and reversioners of Gajju entered into an agreement with Sawan vendee by which in consideration of Sawan giving them 15 kanals of the land sold, they confirmed the sale of the remaining 41 kanals to Sawan. A third party filed a pre‑emption suit. Clark, C.J. with whom Anderson, J., agreed observed that "It is not competent for a pre‑emptor with superior rights to exclude a pre‑emptor with inferior rights of pre‑emption by entering into an agreement with a stranger vendee to sell or give up his right of pre‑emption. The transaction is in itself a perfectly lawful one as between that pre‑emptor and the vendee, but it does not defeat the rights of other pre‑emptors. Looked at from other points of view, the transaction was equivalent to the sons of Kharku taking over a portion only of Sawan's bargain, or to the sons of Kharku associating a stranger with themselves in the purchase of the land and neither of these courses are permissible according to ‑the decisions of this Court". This decision of the Punjab Chief Court is clearly to the point and materially assists the decision of point involved in these appeals. In case of Muhammad Khan and others, it was held by Karam Ellahi Chauhan, J. as his Lordship then was that the subsequent transfer must be of the whole transaction. From this, it necessarily followed that the subsequent transfer must embrace the whole transaction if the right extended to it. Decision in Mustaqim Khan's case is not in point. It simply decided that resale does not really vest in new rights. All that the subsequent vendee does in such a case is to take the bargain in the assertion of his pre‑existing pre‑emption right and hence the resale does not affect the doctrine of respondents. Similarly case of Mst. Fateh Bibi is not helpful to the respondents. In the cited case, one Bandu sold 254 kanals 5 marlas of land to Imam Din, Niaz Muhammad and Abdur Rahim on 26‑12‑1966. Later on, Imam Din and Niaz Muhammad sold their share in the land ,to Allah Dad Khan and Ali Nawaz on 9‑2‑1967. Ahmad Khan and Muhammad Nawaz pre‑empted the sale on 16th February, 1967 and impleaded original as well as second vendees as defendants 1 to 5 in the suit. Plaintiffs claimed pre‑emption as co‑owners in the estate stating that defendants 1 to 3 i.e. original vendees were strangers. It was further pleaded that defendant No.4 who himself was a land owner had by associating with him defendant No.5 a total stranger had lost his own right of pre‑emption also. In the defence, it was pointed out that the vendees had sold away the entire land within the period of limitation to Mst. Fateh Bibi. She was joined defendant No.6 in the suit. At the time of purchase, she was already an owner of the estate in her own right and transfer in her favour though after the suit but was made before the period of limitation for pre emption suit had expired. It was in this context that Division Bench of this Court observed that she was entitled to resist the suit and retain the land on the ground ‑of having taken it in assertion of her superior Light of pre‑emption. This decision instead of helping the respondents really goes against their contention.' True decision in case of Khurshid Alam favours the view advocated on behalf of respondents. Relavant observations are available at page 1293 of the Report. These read:‑ "I have given serious consideration to the aforenoted pleas but I find that sale of the land made voluntary by the parties cannot be equated with the right of pre‑emption sought to be enforced through agency of a Court of law. It will b~ seen that right of pre‑emption is not a right in property but is a right to acquire property In preference to other persons in certain defined circumstances. It is erroneous to describe the right of pre‑emption as a right of "forbidding an alienation". Its very name shows that this is not its true nature and it is obvious that when a sale takes place those favoured individuals who have the right of substituting themselves, if they so think fit for the vendees have no right to forbid the sale. All that they can claim is that if the sale is in favour of a person who is not one of the favoured classes the Court shall delete the names of the vendees and substitute their own names in their place. The right of contract vesting under the general law of the land had thus not been curbed in any way. The pre‑emption Act merely recognises the right of substitution. The law also recognises the right of a vendee to surrender the land to another person in recognition of right of pre‑emption superior to his own. Thus, right available under the law of contract is not circumscribed in the case of voluntary contracts though for exercise and enforcement of right of pre‑emption through a Court of law certain defined circumstances and classes of persons have been provided for. These limitations or qualifications are as such applicable to the exercise of right of pre‑emption through a Court of law and by no stretch of imagination these can be extended to voluntary contracts. It was, therefore, not compulsory for the petitioners to purchase the entire land from Ashraf and Munawar respondents, the original vendees. The principle of partial pre‑emption as such in my considered view does not apply in the circumstances of this case. The two sales cannot be considered as one sale and on no discernible principle the two sales can be considered as a joint sale or that the subsequent vendees cannot be considered to have joined original vendee so as to apply the principle of sinker. These are two sales and the pre‑emptors have to establish their preferential right of pre‑emption as against both the sets of vendees. The pre‑emptors cannot succeed as against the petitioners in respect of the land purchased by them as admittedly the pre‑emptors /plaintiffs had equal right of pre‑emption and not the superior against the petitioners. The suit, as such, was bound to fail as against the petitioners". A little higher, learned Judge himself had observed that no principle of law or precedent was cited before him by the learned counsel in favour or against the proposition. Unfortunately, two decisions, one of the Punjab Chief Court and the other of the Lahore High Court were not brought to the notice of his Lordship. Had attention to these two decisions been invited, result may have been different. Neither in principle nor on authority, I see any difference between two forms of exercise of right of pre‑emption. In my humble opinion, rule of partial pre‑emption and waiver must apply to both the forms and there is no legal justification for treating one form differently from the other. Decisions relied upon by Malik Muhammad Jaffar Advocate represent correct statement of law with which I respectfully agree. On my own research. I have succeeded in laying my hands on a decision from post partition East Punjab High Court reported as A.I.R. 1948 East Punjab 19. It lays down that "the right of pre‑emption is not a right of repurchase', either from the vendor or the vendee involving a new contract of sale but simply a right of substitution entitling the pre‑emptor by reason of a legal incident to which the sale itself was subject to stand in the shoes of the vendee in respect of all the rights and obligations arising from the sale under which he derived his title. It follows as a consequence that ordinarily the pre‑emptor must take over the whole and not only a part of the property to which he is, entitled to pre‑empt. But if he takes the conveyance of a part only, he cannot thereby deprive the other pre‑emptors to pre‑empt the whole bargain". This decision also fortifies my view. I must confess, with utmost respects that I have not been able to follow the reasoning as to non‑application of rule of partial pre‑emption in case of Khurshid Alam. If the decision intended to lay down a general principle that a, subsequent vendee who seeks to assert his superior right of pre‑emption out of Court is free from the limitations of rule of partial pre‑emption, I would respectfully disagree. I have said enough one this point. My considered view is that rule of partial pre‑emption applied to the subsequent transferees also. In this view, I cannot endorse the decisions of the Courts below. I disagree with them and hold that transfer of 1/3rd share of the land in favour of defendants D 2 to 4 cannot be held to have taken place in exercise of right of pre‑emption, equal or superior and that the appellants were entitled to get the entire land to which their right extends. I shall now advert to question of expenses on improvements and also to the legality and propriety of the order declining amendment to the written statement. In view of the facts to be presently noticed, I do not think that there is any truth or substance in the claim for improvements and the Courts below were justified in refusing amendment to the written statement. Impugned sale is dated 18‑3‑1967. Pre‑emption suit was instituted on 18‑3‑1968. Defendant submitted written statement on 22‑11‑1968. In the written statement, claim ‑for improvements was not made. Local Commissioner was appointed to determine market value of the land. He visited the spot on 22‑10‑1969. No reference to improvements is available in his report. Suit happened to be dismissed on 9‑7‑1970. On appeal, dismissal was set aside and the suit was remanded on 20‑4‑1971 for deciding of it afresh. After the trial had concluded and the suit was postponed for hearing arguments on 20‑9‑1974, defendant filed an application on 12‑9‑1974 seeking permission of the Court to amend his written statement to include claim for expenses of improvements. This application was dismissed on 3‑10‑1974 by Civil Judge Talagang. Revision filed in the Court of' District Judge also failed on 11‑12‑1974. Neither in the report of Local Commissioner nor in the evidence led by the defendant, reference was made to any improvements. In these circumstances, claim to. improvements appears to be a belated thought. Had there been any' truth in the claim, it would certainly have been made in the first written statement and not delayed to the date of arguments when entire evidence was over and case was only fixed for hearing arguments, In these circumstances, I do not see how it can be urged that the trial Court and the revisional Court were erroneous in rejecting the application for amendment. No good ground is shown for permitting amendment at this belated stage to reopen the matter afresh with possibly no better results. This ends the discussion on the second point. It may be noted that success of the pre‑emptors uptil now, may not materially assist them in the end. By judgment reported as P L D 1986 S C 360, ownership of agricultural land as a ground for pre‑emption was declared repugnant to Islamic injunctions. This judgment came into force on 31‑7‑1986. Question that arises for consideration is whether decree passed by the trial Court giving 2/3rd share in the property to the pre‑emptors could be modified and pre‑emption suits decreed in their entirety. Chaudhry Hamid‑ud‑Din Advocate heavily relied on the decision of the Supreme Court in Sardar Ali and others v. Mohammad Ali and others P L D 1988 S C 287 and argued that a fresh decree even in a modified form on the ground already found repugnant to Islamic injunctions cannot be passed. It was urged that if no decree had been passed before 31‑7‑1986, fresh decree could not be passed after 31‑7‑1986. A fortiori, if the pre‑emption suit was partially decreed before 31‑7‑1986, no Court after this date could amend the decree and decree the suit in toto. In the opinion of Chaudhary. Hamid‑ud‑Din Advocate, if the amendment in the decree is now made, it shall tantamount to resurrecting a dead law. Malik Muhammad Jaffar Advocate conceded jurisdiction of this Court to alter the decisions of the Courts below and decree the pre‑emption suits for the whole bargain. I have carefully considered this aspect of the controversy. It is not expressly covered by the questions formulated and answers given thereto by the Supreme Court in case of Sardar Ali. Nonetheless, result is not much different. In case, pre‑emption suits had been dismissed before 31‑7‑1986, no decree could have been passed thereafter by any Court on the grounds: declared repugnant to Islamic injunctions. On parity of reasoning, if the suits had been partly decreed and partly dismissed before 31‑7‑1986, no Court after setting aside of the partial dismissal, could decree the suits in toto because that would be reviving and enforcing. a piece of law finally put an end to by the pronouncement of a k competent Court to strike it down. as un‑Islamic. In this view of the law, pre‑emptors cannot be assisted by this Court.

Headnotes / Summary

Judgment & Decree