1992 PLP 2160 (MLD)

‑‑‑‑S.13‑‑‑Right of pre‑emption‑‑‑Property in question was proved to have been merely mortgaged and not sold‑‑‑Such transaction would not give rise to pre- emption‑‑‑Decision on nature of, transaction would be sufficient to close controversy, on performance of Talabs, for it would then be unnecessary to advert to them‑‑‑Agreed finding of Courts below on question of Talabs was, however, not open to interference. (f) Punjab Pre‑emption Act (IX of 1991)‑‑‑ ‑‑‑‑S.13‑‑‑Suit for pre‑emption ‑‑‑Necessity to add owner as a party‑‑‑Where alienee, in a disputed nature of transaction, had claimed merely a mortgage of property in his favour and pre‑emptor asserted same to be a complete sale, it would be desirable to add owner of property as party to pre‑emption suit for effectual and complete adjudication of questions involved therein. B. Brij Narain v. B.H.K. Dhaon AIR (29) 1942 Oudh 366 ref. Muhammad Munir Peracha for Petitioner. This Civil Revision is against a judgment and decree of Additional District Judge, Chakwal passed on 12‑2‑1992, by which decree pasted by the trial Court on 15‑5‑1991 dismissing pre‑emption suit filed by the petitioner was confirmed. A residential Haveli al Jabbi Shah Dilawar, in Tehsil Talagang was owned by Ghulam Muhammad. He transferred it to Shah Muhammad, who hereinafter shall be referred to as respondent. Hayat Muhammad (for short, petitioner) claimed pre‑emption in respect of this transaction and asserted superior right of pre‑emption tin account of being a Shafi‑Sharik and Shafi‑Jar. Upon gaining knowledge of the transaction on 24‑12‑1990, he performed rituals of necessary Talabs and, eventually, instituted a pre‑emption suit on 8‑1‑1990, in the Court of Civil Judge at Talagang. It was averred in the plaint that the Haveli was sold for Rs.15,000 and its market value was equivalent to the price fixed and paid for it. Shah. Muhammad was the sole defendant impleaded in the pre‑emption suit. Ghulam Muhammad, however, was not added. Respondent filed his written statement. He raised four preliminary objections; (i) the Haveli was mortgaged with possession for the mortgage money of Rs.90,000 in his favour. Therefore, pre‑emption could not proceed; (ii) in absence of a complete sale, pre‑emption could not be claimed; (iii) petitioner had no cause of action; (iv) suit was frivolous and also vexatious. Therefore, petitioner was entitled to compensatory costs in the sum of Rs.10,

000. On merits, in addition to denial of superior right of pre‑emption, petitioner reiterated the objection that property‑in‑dispute was only mortgaged to him, and, therefore, the transaction was not pre‑emptible. Trial Court, on 6‑2‑1991 framed appropriate issues in vernacular and also correctly reproduced them in its judgment for reference. Thereupon, it took evidence from the parties. It consisted of five P.Ws. for the petitioner; two statements; one of respondent himself and the other of Ghulam Muhammad who was owner of the Haveli; Ext. D.1 an unregistered Iqrarnama dated 2‑12‑1990 containing the terms of the transaction describing it as mortgage deed. On consideration of oral evidence, and, Iqrarnama Ext. D.1, the trial Court mainly found faults. with Talb‑i‑Mowasabat and Talab‑i‑Ishhad and dismissed the pre‑emption ‑suit brought by the petitioner, on 15‑5‑1991. Petitioner agitated the decree of the trial Court in appeal before Additional District Judge, Chakwal. Upon re‑appraisal of record, lower appellate Court agreed with the trial Court's view taken on failing to fulfil Talb‑i‑Mowasabat and Talab‑i‑Ishhad and dismissed the appeal, on this score, on 12‑2‑1992. From the judgments in the lower Courts, it is clear that finding on nature of transaction, whether it was a sale or a mortgage was not expressly recorded, though the parties gave evidence for and against. Defect of discrepant and contradictory oral evidence applied not only to performance of Talabs but also to the nature of transaction: requiring decision in the suit. Primary issue in the suit was about the nature of transaction entered into between Ghulam Muhammad and the respondent and the other issue, that in case, transaction was found a pre‑emptible sale, whether, formalities of necessary Talabs were fulfilled. As the record was complete and evidence sufficient for final decision of the above two issues, on the analogy of the principle contained in section 103 of. Civil' Procedure Code, the High Court in revisional jurisdiction was empowered to determine even those issues, which had not been determined or decided by the lower Appellate Court, or which had been wrongly determined by such Court by reason of any illegality, omission, error or defect such as was referred to in subsection (1) of section 100 of Civil P.C. Consequently, learned counsel appearing for the petitioner was therefore put to notice on the point and was called upon to address arguments on it. He argued on all facets of the controversial points including the nature of transaction, whether it was an outright sale or was a mortgage. First, I shall take up the fundamental issue relating to the nature of the transaction, and, for that purpose, reference to evidence shall be necessary. P.W.1 is the plaintiff himself. He deposed in examination‑in‑chief that Ghulam Muhammad sold the 'Haveli‑in‑dispute to Shah Muhammad for Rs.15,

000. In cross‑examination, the witness deposed that his nephew Noor Khan had informed him of the sale on 24‑12‑1990, in his baithak, in presence of Lambardar Ghulam Shah and one Baha‑ud‑Din. Baha‑ud‑Din was brother- in‑law of the P.W. Noon Khan did not enter the witness‑box. Further, Noor Khan was not present at the time of striking of the bargain for sale or at the time of its finalization. According to P.W.1, Ehtbar had informed Noor Khan. about the sale of Haveli. Mian Ghulam Shah P.W.2 was principally a witness for making of Talabs, but he also deposed that in his presence Noor Khan had . parted with information of sale of the Haveli to P.W.1. P.W.2 admitted that respondent belonged to a political group of Shah Aurangzeb Lambardar and the petitioner to his group. The witness denied the suggestion that the Haveli was mortgaged to the respondent. Mian Baha‑ud‑Din P.W.3 testified that Noor Khan gave information of sale of the Haveli to the petitioner in his presence and performance of Talabs for exercising pre‑emption took place in his presence. Statement of P.W.4 Ehtbar Khan was taken down by the trial Court on 11‑4‑1991. He deposed in examination‑in‑chief that 4‑1/2 months before, the sale of the Haveli for Rs.15,000 was made in his presence and that of Ejaz and that he had informed of it to the petitioner 4/5 days after the above sale, when he was passing in front of the petitioner's baithak. Petitioner was then sitting alone in his baithak. Witness could not tell the day or the date of sale. However, he stated that the sale price was transferred in his presence. P.W.5 is Ejaz Ahmad. He belonged to Multan Khurd, a different village. He deposed that he owned land in Mauza Jabbi Shah Dilawar. He further deposed that in the last week of November, 1990, sale was made in his presence. He spoke that Ehtbar was also present on this occasion and, sale price was paid in his presence. Post Office receipt Ext. P.1, A/D Ext. P.2, photocopy of notice marked `A' were tendered in evidence by the petitioner. Respondent, in his defence appeared as R.W.

1. He gave evidence that he took Haveli on mortgage with possession for Rs.90,000 and Iqrarnama Ext. Dl was reduced to writing on the following day on 2‑12‑1990. Stamp paper on which Iqrarnama was written was purchased on the same day. No separate receipt for payment of mortgage money existed. Witness admitted that he had collected building material for construction in the Haveli, with oral permission, of Ghulam Muhammad, who had agreed that on redemption of the mortgage, he shall pay compensation for the improvements. He admitted receipt of notice from the petitioner. He further admitted that mortgage money was not repaid by him as yet. Ghulam Muhammad D.W.2 deposed that he had mortgaged the Haveli with possession in favour of respondent for Rs.90,000 and got executed an Iqrarnama Ext. Dl. Mortgage money was received on a day prior to execution of Ext. Dl. The witness admitted that he had earlier agreed for sale of the Haveli to the petitioner, but this deal vas not finalized, and, thereafter, he had mortgaged the Haveli to the respondent. He stated that his son was involved in a Hudood case and Shah Aurangzeb, gave evidence for his innocence, but he denied that he belonged to his political group. Last came the repository of transaction‑ Ext. Dl; an unregistered Iqrarnama executed on 2‑12‑1990. It described that the Haveli was mortgaged for Rs.90,000 to respondent. It acknowledged receipt of mortgage money and provided that upon its return within three months, Haveli shall be reconveyed to its owner, failing that the transaction shall be deemed to have been converted into an outright sale. Ext. D1 bore thumb impressions of Ghulam Muhammad; signatures of respondent, and, three witnesses namely Qaim Shah son of Ghulam Shah, Shah Aurangzeb, Lambardar of the village, and, Ata Muhammad son of Ghulam Muhammad Stamp vendor, who had sold the stamp paper on which lqrarnama was scribed was not tendered in evidence. Nor was there any clear evidence as to the scribe of Ext. D

1. In the context of above material, it was to be seen, whether the transaction was a permanent transfer of ownership rights in the property by its owner, in favour of respondent, by divestiture of complete ownership rights in him. 1t has been found in number of judgments that where the property was alienated under a document purporting to be other than what appeared on its face, it was open to a third party to unveil it, and, prove that the transaction was, in truth, a pre‑emptible sale and a false disguise was woven around it for concealing its true nature. In that situation, it is open to the plaintiff to lead evidence on relevant facts to the issue "whether‑there has been a sale", and, to the defendant to establish that there has been no sale and to rely upon the document itself as part of his defence. Sale has been defined in section 2,) clause (d) of Punjab Pre‑emption Ordinance/Act. It means, permanent transfer of ownership of an immovable property in exchange for a valuable consideration and includes transfer of an immovable property by way of `hiba bil‑iwaz' or `hiba ba shart‑ul‑iwaz'. Transfers listed in clauses (i) to (iv) of clause (d) were excluded from the definition of the term "sale". Section 5 of Punjab Pre‑emption Ordinance/Act gave right of pre‑emption in case of sale of immovable property. In its subsection (2), it permitted the Court to discover true nature of the transaction for purposes of pre‑emption, regardless of its exterior disguise. Onus to prove that a particular transaction was in fact a sale and not what it apparently purported to be, lay entirely upon the pre‑emptor and, the evidence produced by him for establishing it must be of a cogent an, convincing character. It is true that parties to the transaction take all C precautions to conceal their intentions and plug in all loopholes for a possible leak out, yet the initial onus to prove the real nature of the transaction to show it to be a pre‑emptible sale rested upon the pre‑emptor. In the very nature of things, direct evidence is hardly available and an attempt to procure it raises suspicions of its untrustworthiness. The task for the pre‑emptor is both hard and difficult. Nonetheless, he is bound to bring forth clearer proof of facts and circumstances leading to an irresistible conclusion that the transaction was in reality intended to be a sale of property between the parties and a false cover, was given to it for concealment of its true nature. Oral evidence adduced at the trial, as was visible from a reference to it above, could not be found reliable. Many links were missing in it, which were tried to be futilely supplied by weak kind of evidence. Both the Courts of fact had, 6pon its careful analysis, found it incredible. In revision, the view could not be different because the finding by a Court of fact on appreciation of oral evidence, unless suffering from a serious error touching the principles governing appreciation of oral evidence, is ordinarily final and held binding. Neither, pleadings nor evidence gave any indication of true market value of the Haveli. Market‑value of the Haveli would have had a probative force and also a material circumstance to determine the nature of the transaction. Ordinarily, property is pledged for a value lesser than its market value. Herein, the Haveli was mortgaged for a sum of Rs.90,

000. In absence of. any evidence or a finding on market‑value of the Haveli, its proportion to mortgage money could not be commented upon. It was stipulated in the deed that upon payment of the mortgage money within three months, Haveli shall be reconveyed to its owner. In default, deed shall convert itself into an outright sale of the Haveli, without further payment. This stipulation was in the nature of mortgage by conditional sale, and, by itself would not tantamount to a complete sale. Further, an intention on part of the respondent to effect improvements in the Haveli, subject to, an oral agreement with its owner for payment of compensation at the time of redemption of the mortgage shall also not be a material factor in favour of the pre‑emptor. Also, the persons engaged in the transaction were necessarily essential witnesses and their testimony on the nature of transaction concluded between them, in absence of material contradiction or a compelling principle to the contrary which was not shown to exist, could not be discarded. As is evident from the above, the owner of the Haveli unequivocally testified in Court that he had mortgaged it to the respondent for a sum of Rs.90,000 and had not sold it out to him. The period for redemption of the mortgage was not fixed. Therefore, ordinary period of limitation fixed for redemption shall apply. There is literally nothing in terms of deed, which have been set forth in it to make transaction other than an ordinary mortgage of the property. Terms and conditions of mortgage were also not shown onerous for making it practically impossible for owner to exercise his right of redemption. Last, but not the least, in the event of a room for a reasonable doubt, the transaction should be held to be what it professes to be. Since the property in dispute was merely mortgaged by its owner to the respondent, it did not give rise to, pre‑emption. Decision on nature of transaction was sufficient to further close the controversy on performance of Talabs, for it shall then be unnecessary to advert to them. Nonetheless, agreed finding in Courts below on the nature of untrustworthy evidence led to support the performance of Talabs is not open to further interference in revision. At the end, it may be pointed out that in case of a disputed nature of transaction, where a party claims merely a mortgage of the property in his favour and the pre‑emptor asserts it to be a complete sale, it shall be desirable to add owner of the property, as party to the pre‑emption suit for its effectual and complete adjudication of the questions involved in, it. In B. Brij Narain. v. B.H.K. Dhaon AIR (29) 1942 Oudh 306, a Division Bench of the Oudh Chief Court after referring to the cases decided by Punjab Chief Court, took the view that the vendor is not as a rule or in all cases a necessary party in suits for pre-emption. However, where the points‑in‑dispute cannot be decided without his being impleaded, he may be a necessary party, but no general rule could be formulated, and, every case was to be decided on its own merits. Speaking in the context, in view of a dispute on the nature of transaction, presence of the owner of the property before the Court must have been helpful to it. 2166-2167 For the reasons aforesaid, I would agree with, and, uphold the impugned judgments and decrees of the, Courts below and dismiss the civil lG revision in limine. Records be returned. A.A./H‑33/L Revision dismissed.