2002 PLP 1821 (SCMR)

The findings of the first Court on the pivotal' Issue No.5 were that appellants being in possession of suit property had better title on the basis of registered sale‑deed which was executed in 1971 in their favour on behalf of Noor Muhammad who, on deposit of sale price in the treasury was transferred the proprietary rights in 1971. The learned District Judge in appeal reversed the finding of first Court, with the following observations:‑‑ "

3. I have perused the record and have also heard arguments. The learned counsel. for the appellants contended that Noor Muhammad respondent No. l did not appear in the witness‑box to rebut the claim of the appellants that, in 1966 he had sold the plot in dispute to Gollaya, predecessor‑in‑interest of the appellants through 25 unregistered sale‑deeds for a sum of Rs.2,497 and that in pursuance of that sale the possession was delivered to the vendee. The hesitation of respondent No. l from appearing in the witness‑box too conspicuous to be ignored. It means only that in fact he had held the disputed plot to Golaya in 1966 and after receiving the disputed plot to Gulaya in 1966 and after receiving Rs.2,497 had delivered the possession to him. On the other, hand, the respondents produced registered sale‑deed Exh.D.2 according to which the plot in dispute was sold by respondent No. l through his general attorney Said Muhammad respondent No.5 on 9‑3‑1971 to respondents Nos.3 to 5 for Rs.1,

000. It is noteworthy that in 1966 the disputed plot was sold for Rs.2,497 while the same plot has been shown to be sold to respondent No. 3 and in 1971 for Rs.1,000 only. On the face of it the price mentioned in Exh.D.2 is fictitious. Moreover, not a single penny was paid by the vendee to the vendor before the Registrar. This fact further strengthens the doubt that the sale in favour of respondents Nos.3 and 4 who are nephew of respondent No. l is fictitious and a registered sale‑deed has been executed simply to deprive the appellants from taking back the possession of the suit land. I, therefore, hold that the registered sale‑deed Exh.D.2. is not a genuine document but is a collusive one. This is a general and fundamental principle that fraud vitiates all transactions. Registration, therefore, cannot give any efficacy to a fraudulent and collusive document and the fact that it is registered cannot give it priority over an unregistered document. Since Exh.D.2 is not a valid document, I hold that the appellants being successors‑in interest of Gollaya are the owners of the disputed plot that they have a cause of action and that respondents Nos.3 and 4 have no concern with it. I reverse the findings given by the Civil Judge on Issues Nos.4 and 5 and decide Issue No.2 in favour of the appellants, while the last‑mentioned two against the respondents." The findings on Issue No.3 were also reversed and the same were decided in favour of the respondents. The High Court in .the second appeal affirmed the findings of fact in the following manner:‑‑ ' "

6. Golaya, the predecessor‑in‑interest of the respondents/plaintiffs, had purchased the suit Ahata vide sale‑deeds dated 20‑6‑1966 (Exhs.P.l/1 to 25). The execution thereof by Noor Muhammad has been proved by Sher Muhammad petition‑writer (P. W.1) and Mardan (P.W.2) a marginal witness‑Exh.D.3 is a revenue document which indicates that the price of property was deposited in the treasury on behalf of Noor Muhammad, on 24‑12‑1966. The Ahgta was Government property (it appears that the Ahata was allotted to Noor Muhammad under the Colonisation of Government Lands Apt, 1912). Noor Muhammad executed general power of attorney (Exh.D.1) in favour of his brother‑in‑law Said Muhammad defendant, on 3‑11‑1969 to obtain the proprietary rights with the authority to sell it as well. Said Muhammad sold this Ahata to Ghulam Jaffar and‑ Muhammad Sadiq vide registered sale‑deed (Exh.D.2) on 9‑3‑1971.

7. From the above evidence the following facts are proved:‑‑ Noor Muhammad, though allottee of the Ahata had still not become its full owner when he sold to Golaya under deeds (EXhS.D. 1/1 to 25) on 2‑6‑1966. Each deed is for less than Rs.100 and the method of execution of 25 sale‑deeds was adopted to side‑track the provisions of the Registration Act and the payment of registration fee and stamp duty. Government dues were cleared by Noor Muhammad on 24‑12‑1966 and so he became the full owner of the Ahata on the said date. It was sold to Ghulam Jaffar and Muhammad Sadiq, the appellants/defendants by Said Muhammad on 10‑3‑1971 vide Exh.D.2.

8. The learned Civil Judge considered that even if documents (Exhs.P.l/1 to 25) were considered as validly executed, these being not registered would give way to the registered deed in favour of the appellants/defendants. On the other hand learned District Judge concluded that under documents (EXhS.D.i/1 to' 25), the Ahata had been sold to Golaya by Noor Muhammad, possession delivered, the sale price was Rs.2,497 which was paid in 1971 registered sale‑deed (Exh.D.2) was fictitiously and fraudulently prepared showing the sale price as Rs.1,000 and to defeat the rights of the heirs of Golaya whose interests were protected under section 43 of the Transfer o f Property Act. Learned counsel for the appellants has raised the following contentions:‑‑ (a) That the findings of facts arrived at by the learned District Judge 4l first appeal and affirmed by the High Court in second appeal were suffering from non‑reading and misreading of evidence. (b) That admittedly Noor Muhammad being allottee of suit property which was owned by the' Government, did not acquire its proprietary rights at the time of alleged sale in favour of respondents in 1966 and that due to the bar contained in section of the Colonization of Government Lands Act, 1912 (hereinafter to be referred to as 'the Act, 1912') the sale of suit property if any through, unregistered sale‑deeds would be of no consequence. Learned counsel submitted that as per document Exh.D.3 Noor Muhammad acquired proprietary rights in 1971 through Said Muhammad, his general attorney who sold the Ahata to the respondents vide registered sale‑deed dated 10‑3‑1971. (c) That the protection of section 43 of the Transfer of Property Act, 1882 (hereinafter to be referred to as 'the Act') would not be available to the respondents as the sale in their favour being in violation of section 19 of the Act 1912 was void. Reliance has been placed on PLD 1954 Lahore

253. The learned counsel for the respondents, on the other hand, has submitted that the claim of the appellant is negated for the reasons. Firstly, the general power of attorney statedly executed by Noor Muhammad in favour of Said Muhammad was not proved to be a genuine document through any independent evidence and secondly, Noor Muhammad did not appear in the Court in confirmation of the sale dispite direction of the Court and that except Said Muhammad, who was one of the defendants in the suit, no independent person was produced in proof of the sale in favour of appellants and delivery of possession under the sale. The learned counsel contended that sale of the suit property by Noor Muhammad to Golaya through unregistered sale‑deeds (Exhs.P.1 to 25) and delivery of possession was established through direct and independent evidence and there was ample evidence of proof of the payment of consideration and conferment of title of the suit property with possession to the respondents and that Noor Muhammad being no more owner of the property in the year 1971 could not sell the same to the appellants, therefore, registered sale‑deed would be of no legal consequence. Lastly, learned counsel argued that sale in favour of Golaya was protected under section 43 of the Act and would not be hit by the provisions of section 19 of the Act of 1912. The learned counsel, in support of his argument has referred to the following case‑law:‑‑ (1) Sher Muhammad Khan v. Ilam Din (1994 SCMR 470). (2) Daulat Ali v. Ahmad (PLD 2000 SC 792) and (3) Suba v. Fatima Bibi (1992 SCMR 1510). In the light of the controversy between the parties, the following questions would need determination:‑‑‑ (i) Whether sale of Government land without acquisition of proprietary rights through unregistered or registered documents would be void and protection of section 43 of the Transfer of Property Act, 1882 would not be available to the vendee of such sale? (ii) Whether the subsequent vendee can defeat the claim of first vendee on the strength of section 19 (ibid) in the suit for possession without seeking declaration of his title? The respondents successors‑in‑interest of Golaya, on the basis of unregistered sale‑deed filed suit for possession of the suit property against the appellant and others taking the plea that they were in possession of suit property as liceisee of their predecessor‑in‑interest. The appellant side, on the other hand, while placing reliance on the registered sale‑deed resisted the suit and denied the title of the respondents. The learned District Judge in the first appeal having come to the conclusion that the respondents were owners of the suit property, allowed the appeal and decreed the suit in their favour. The finding of fact, on the pivotal issues relating to the claim of the ownership of the property by the parties was further upheld by the High Court in the second appeal with the following observations "9. ` The main plank of the arguments of the learned counsel for the appellants was that sale‑deeds (EXhS.P.I/1 to 20) were not properly executed, Noor Muhammad not being the owner at the time of their execution, these did not confer any title, the possession had never been delivered to Golaya or his successors‑in‑interests and so the registered sale‑deed in favour of Ghulam Jaffar and Muhammad Sadiq appellants would hold the field. The execution of documents (Exhs.P.l/1 to 25) is proved from the statements of Sher Muhammad petition writer and Mardan (P. Ws. 1 and 2). Mardan is the father‑in‑law of Ramzan defendant. He stated in cross‑examination that Muhammad Bakhsh, the other marginal witness of documents (Exhs.P.l/1 to 25) was also a relative of Golaya. Said Muhammad (D.W.1) admitted in cross‑examination that Noor Muhammad sold his agricultural land in the Chak to the father of the plaintiffs (Golaya) in 1986, delivered possession and left the Chak alongwith his son Abdul Haq, never to return. He denied the suggestion that in the same year Noor Muhammad sold the Ahata as well to the further of the plaintiffs for Rs.2,479 and delivered possession or that the father of the plaintiffs had given it to Muhammad Sadiq and Ghulam Jaffar, gratis for residence. He admitted the suggestion as correct that the father of the plaintiffs was residing at Chah Gahneywala which was 1/2 mile from the Abadi of Chak. Even if on,20‑6‑1966 Noor Muhammad was not the full owner of the Ahata, he had become one on 24‑12‑1966. Documents (Exhs.P.l/1 to 25) would therefore confer the title on the principle of 'equity would feed the estoppel. Noor Muhammad having sold the Ahata when his title was inchosta the sale would confer full title in favour of the plaintiffs when he became the full owner just in December, 1966. Noor Muhammad had sold the land to Golaya and shifted his residence to District Rahimyar Khan so the claim of the plaintiffs is correct that even the Ahata was sold and possession delivered. Since Golaya and his family were residing outside the Abadi of the Chak at Chah Gahneywala, so their version is correct that it was given to Muhammad Sadiq and GhuJam Jaffar for residence whose own Ahata was adjacent to it. Noor Muhammad did not care to enter the witness‑box to deny the sale or delivery 'of possession in favour of Golaya. His relative Said Muhammad in complicity with Jaffar and Sadiq prepared a registered sale‑deed (Exh.D.2) in 1971, showing the sale price as 8.1,000 while actually it must have gone much higher, price being Rs.2,479 in 1966. The contentions are, therefore, rejected and the findings recorded by the learned District Judge affirmed." The appellants have contested the title on the ground that sale of Government land before acquisition of proprietary rights and sanction of concerned authority under section 19 of the Act 1912 was of no consequence. The "sale" is defined in section 54 of the Transfer of Property Act, 1882 as under:‑‑ "54 'Sale defined.'‑‑‑Such transfer, in the case of ownership in exchange for a price paid or promised to part paid part promised. Sale how made.‑‑Such transfer, in the case of tangible immovable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument. In, the case of tangible immovable property, of a valueless than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property. Delivery of tangible immovable property takes place when the seller places the buyer, or such person as he directs, in possession of the property. Contract of sale.‑‑A contract for the sale of immovable property is a contract that a sale of such property shall take place on terms of settled between the parties. It does not, of itself create any interest, in or charge on such property. " The sale of immovable property means transfer of an ownership on a price to be paid or promised to be paid with delivery of possession. The mere execution of sale‑deed registered or unregistered without proof of payment of price and delivery of possession is not enough to pass the title of the property and thus if the sale is not, in contravention of section 54 of the Act, would be a sale in the eyes of law. Reference may be made to Ali Muhammad and others v. Chief Settlement and Rehabilitation Commissioner and others (1984 SCMR 94). The temporary transfer of rights and interest in the property either in full or in part is not a sale and the sale of Government land by an allottee without obtaining proprietary rights would not convey the title due to the legal bar contained in section 19 of the Act 1912 and such sale would take effect only on the acquisition of proprietary rights by the vendee/allottee. The sale of the Government property without proprietary rights through registered or unregistered document would not confer title in the transferee and being only a contract of sale may be relevant to establish title on the acquisition of proprietary rights by the tmasferor. The transfer of ownership rights through a document compulsorily registrable without its registration, would not create title but in exceptional circumstances even an unregistered document can also create a valid title. In the present case, the suit property was sold through 25 unregistered sale‑deeds each of the value of Rs.49.93 in 1966 and the oral evidence coupled with the contents of sale deeds would lend support to the claim of respondents. The sale‑deeds (Exhs. P.1 to 25) read as under:‑‑ It is not disputed that the unregistered sale‑seeds were executed at the time when Noor Muhammad vendee had not yet acquired the proprietary, rights of the suit property and similarly there was no other proof of acquisition of proprietary rights of the suit property by Noor Muhammad at the time of sale in favour of appellant through registered sale‑deed, Exh.D.2 except Fard Taqseem Malkiat, Exh.D.3, the evidentiary value of which was under challenge, that he had acquired the proprietary rights of the property Thus the sale and transfer of ownership rights of the suit property without prior sanction in terms of section 19 of the Act of 1912 either through registered sale‑deed or unregistered document would not be a sale and would only be a contract of sale which would not be hit by the provisions of section 19 of the Act, 1912 and would be enforceable in law as sale after acquisition of proprietary rights by the vendee/allottee. Thus the restriction contained in section 19 of the Act 1912 would not prohibit the vendee from r executing a document relating to the sale of the property for consideration and delivery of possession. The bar is only confined to the extent of permanent transfer of ownership rights in the property and therefore, the registered sale‑deed in such a situation would not get preference over the unregistered sale‑deed to claim better title. This is settled law that the title of the property cannot be conferred to a third person by the allottee of the Government land without obtaining the proprietary rights, due to the prohibition contained in section, 19 of the Act of 1912 and the sale in either form would not be validated till the acquisition of proprietary rights by the vendor. The value of each sale‑deed executed in favour of the respondents was less than rupees 100 and was not required to be registered, therefore, the same at the time of execution would acquire the status of contract of sale which would be enforceable as a legal document for the purpose of establishing the title on the acquisition of proprietary rights by the vendor. This Court in the case of Muhammad Iqbal v. Muhammad Hussain (PLD 1986 SC 70) observed as under‑‑ "It was held by this Court in paragraphs 12 of its judgment in that case that a contract of this kind was not violative of the provisions of section 19 of the Colonization of Government Lands Act, 1912. Paragraph No. 12 may be reproduced here for facility of reference;

'On the facts case we are clear that the document was merely an agreement to sell the specific performance of which was postponed to a date when the grantees had acquired the proprietary, rights. Such a reservation in the deed itself showed the awareness of the prohibition, the recognition of its legal effect and an effort on the part of the contracting parties to keep themselves well; within the confines of the law and to act in accordance with the requirements of the law. Such an agreement to sell cannot be said to be violative of either the express provisions of section 19 of the Act or of the public policy behind such a statutory provisions.' We respectfully follow the abovenoted view taken by a learned Full Bench of this Court and hold that the oral agreement of sale by Ghulam Rasool in favour of Mirza Muhammad Hussain (respondent No. l) is not hit by the provisions of section 19 of the aforesaid Act. It may be mentioned that the same view has been taken, in Mirza Muhammad Ahmad Beg v. Mirza Amjad Beg, Ghulam Muhammad v. Lakha Singh and Mst. Khurshid Begum v. Inam Rabbani on which the High Court has relied while delivering the impugned judgment. " In the light of the above discussion, we hold that sale of Government land by the allottee without proprietary rights would not take legal effect and operation of the same would remain suspended till the proprietary rights of the property are not acquired by the vendor. The unregistered sale‑deeds (Exhs.P.1 to 25) were executed in favour of the Golaya, predecessor‑in‑interest of respondents, in 1966 and the same were executed with the intention that title would be passed to Golaya and subject to the fulfilment of the condition contained in section 19 of the Act, 1912 would be a complete sale for all practical purposes and beneficiary of the documents could competently file suit for possession against the occupants. As per claim of appellants Noor Muhammad executed general power of attorney in favour of Said Muhammad his brother‑in‑law in 1971 for getting proprietary rights on his behalf with the power of sale of property and Said Muhammad on the basis of power of attorney sold the suit property to them through registered sale‑deed dated 9‑3‑1971. The acquisition of proprietary rights of the suit property by Noor Muhammad through Said Muhammad was claimed by the appellants on the strength of Fard Taqseem Malkiat, Exh.D.3, prepared by the concerned revenue officials with reference to an order, dated 11‑1‑1971 passed by the Collector. Except this document Exh.D.3 and the sole statement of Said Muhammad who was also defendant in the suit no other evidence oral or documentary was brought on record in proof of the acquisition of proprietary rights by Noor Muhammad before sale of the suit property in favour of the appellants and thus with the exclusion of Exh.D.3 the parties would stand at par to each other so far as the requirement of section 19. of the Act 1912 was concerned and controversy relating to the title of the suit property would be resolved in the light of documentary and oral evidence brought on record by the parties. The presumption of existence of the order dated 11‑1‑1971 referred in Exh.D.3 in Fard taqseem Malkiat cannot be raised as this document was not proved to have been prepared in the manner as provided under Instruction No.7.60‑A, contained in Chapter 7 of the Land Records Manual. An examination of the document in the light of the instructions referred to above, would show that neither same was prepared in accordance with these instructions nor the concerned Revenue Official was examined to establish that the document was prepared in terms thereof. The mere mentioning of the order relating to the acquisition of proprietary rights by Noor Muhammad in the said document would not be sufficient proof of the acquisition of such rights. There is no cavil to the proposition that the registered document will have precedence over the unregistered document if it was executed earlier in time as the title is determined from the date of execution and not from the date of registration of the document. In the case in hand, the appellant claimed ownership of suit property on the basis of registered sale‑deed which was executed much later to the execution of the unregistered sale‑deed on the basis of which respondents claiming themselves as owner of the property filed suit for possession, The claim of the appellants was that they have purchased the suit property for consideration and obtained possession from Said Muhammad under the sale and in support thereof produced only Said Muhammad whereas the respondents produced two witnesses who had claimed direct knowledge of sale of Ahata by Noor Muhammad to Golaya being the scribe of sale‑deeds and marginal witness. Said Muhammad one of the defendants, in the suit in the capacity of general attorney of Noor Muhammad appeared in the witness‑box in affirmation of sale in favour of appellant but Noor Muhammad did not appear in support of the claim of appellant and in the circumstances, the learned District Judge and the learned Judge in the High Court having made the detailed scrutiny of the evidence came to the conclusion that the respondents were rightful owners of the property. The learned counsel for the appellants has not been able to point out any misreading or non‑reading of evidence by the two Courts in coming to this conclusion. Coming back to the question of prohibition contained in section 19 of the Act 1912 suffice it to say that no cogent ‑evidence of acquisition proprietary right of suit property by Noor Muhammad in 1971 was brought on record and appellant has failed to dislodge the claim of respondents and establish through independent and reliable evidence to the effect that Noor Muhammad had acquired proprietary rights in the property at the time of sale by Said Muhammad in 1971 to the appellant. The sale through unregistered sale‑deeds (Exhs.P.1 to 25) in favour of respondents being not suffering from any legal defect' would create a valid title of the respondents in the property which cannot be denied for mere fact that appellants were in possession of registered sale‑deed. The next question relates to the protection provided under section 43 of the Transfer of Property Act, 1882 to the sale through which the rights of ownership are transferred in the property by a person who has no title in the property at the time of transfer but subsequently he acquired such title. This section is applicable in a case in which a person while erroneously representing himself as owner of property transfer the same for consideration and subsequently acquired the title of the property. The transfer will operate if subsequent to sale in favour of transferee, the transferor acquires title of the property. It was held in Mumtaz Sultana v. Settlement and Rehabilitation Commissioner (PLD 1964 (W.P.) Lahore 388) that in the case of sale in respect of Government‑owned property, the transfer would become operative on the acquisition of proprietary rights by the transferor, therefore, the protection provided under section 43 of the ibid Act would be available to the title of such transferee under the sale. The essential condition of erroneous representation of transferor that he was authorized to transfer the land would attract the provisions of section 43 of the Act and the transferee will become owner of property from the date of acquiring the title by the transferor. We having considered the issue under discussion are of the view that the concurrent findings of fact regarding the ownership of the property being not suffering from any legal or factual infirmity could not be interfered with by invoking the provisions of section 19 of the Act of 1912 in favour of appellant and consequently in the given facts and the nature of dispute between the parties transaction of the sale of suit property in favour of respondents would not hit by the said provisions of law, therefore, the concurrent findings of fact even erroneous, if not suffering from legal defect, would not be called in question. For the foregoing reasons, this appeal fails , and same is, accordingly, dismissed with no order as to costs. S.A.K./M‑357/S Appeal dismissed.