P L D 1969 Lahore 471 (PLP)

MUHAMMAD AFZAL CHEEMA, J.‑--Having failed in appeal before the learned Additional District Judge, Multan, on 24th of July 1959, after the dismissal of his pre‑emption suit, the appellant has filed the present Regular Second Appeal.

2. The simple facts of the case are that one Mst. Bhag Bhari, her three sons and a daughter sold by means of an oral transaction agricultural land measuring 78 kanals 1 marla situate in Mouza Ropree, Tehsil Khanewal, District Multan to respondents Rajada and Pehalwan for a consideration of Rs. 4,387 and Mutation No. 220 dated 30th October 1956 was sanctioned in this regard. On 28th October 1957, Sher Muhammad appellant brought a suit for possession claiming superior right of pre- emption on the ground of being a Khewatdar and an owner in the estate as against the vendees who were strangers to the village. It was also alleged that the ostensible price of Rs. 4,387 had been fictitiously shown instead of the actual sale price of Rs. 2,

000. The competency of the suit was challenged by the defendant‑respondents on ground of limitation on the assertion that the oral sale had in fact taken place in the year 1951 when they had taken possession of the land. The correctness of the price of Rs. 4,387 as mentioned in the mutation was also asserted as having been fixed bona fide and actually paid to the vendor. The plaintiff‑appellants' claim to a superior right of pre‑emption was also denied. The trial was held on the following issues:‑ "(1) Whether the suit is within time? (2) Whether the plaintiff has superior right of pre‑emption against the vendees? (3) Whether the amount of Rs. 4,387 was paid bona fide or was actually paid to the vendor? (4) What is the market price of the suit property? (5) Relief.

3. The matter was simplified by concessions made by either party, the defendant admitting the plaintiff's superior right of pre‑emption and the latter admitting the correctness of the price of Rs. 4,387 as having been actually paid, and consequently the scope of the trial was confined only to the determination of issue No. 1, relating to limitation.

4. Since mutation No. 220 (Exh. P. 2) in regard to the transaction of sale was sanctioned on 30th October 1956, and the suit was admittedly, filed on 28th October 1957, apparently it should have been deemed to be within the prescribed limitation of one year, and yet principally on the basis of the documents produced by the plaintiff himself, namely, copies of Khasra Girdawaris Exhs. P. 3 and P. 6., mutation No. 194 (Exh. P. 5) and mutation No. 220 (Exh. P. 2), the issue was decided against him and the suit was dismissed as time‑barred vide judgment dated 5th March 1959. This finding was upheld by the learned Additional District Judge, Multan, who dismissed the appeal on 24th July 1959. The concurrent finding on the question of limitation by the two Courts below obviously needs an elabora tion. From a perusal of Exh. D. 2, which is a copy of the entry No. 372 in the Patwari Roznamcha dated 16th August 1951, it appears that Muhammad Jahangir Khan one o the vendors had reported to the Patwari that by means of an oral, transaction he along with his mother Mst. Bhag Bhari, his brother Fateh Sher and sister Mst. Sagib Khatun had transferred the suit‑land in, favour of Rajadah and Pehalwan respondents, for a consideration of Rs. 4,

387. The details of the Khewat, Khatauni and Khasra numbers as given in Exh. D. 2 completely tally with the particulars of the suit‑land given in the plaint. On the basis of this report, mutation No. 194, Exh. P. 5, was entered by the Patwari on 14th September 1951, asking a categorical reference to the delivery of possession to the respondents and their non -entitlement to a proportionate share in the Shamilat. Since the vendors did not accept the liability to ray agricultural income‑tax in respect of the suit‑land the mutation was rejected by the Revenue Officer on 12th December 1953. It appears that the vendees continued to remain in possession till the 9th of March 1956, when Rajada and Pehalwan respondents lodged report No. 198 (copy Exh. D. 1) with the Patwari with a fresh recital of the sale of the suit‑land in their favour and their possession, thereof since four years. In pursuance of this report, a fresh. mutation No. 220 was entered by the Patwari on 18th May 1956, and was sanctioned by the Assistant Collector Second Grade on 30th October 1956. It was stated in the relevant order that the change in the law relating to agricultural income‑tax. having obviated the acceptance of responsibility by the vendors for the payment of income‑tax in respect of the land in question, the legal objection to the sanction of the mutation remained no longer in the field.

5. The main contention raised by the learned counsel for the appellant before us was that the earlier sale dating back, to the year 1951 was no sale in the eye of law for the two fold reason of the rejection of the mutation and the legal bar to its validity created by section 8 of Act XVI of 1951, and as such it should be considered non‑existent for purposes of' limitation which should start running from the 30th of October 1956, when the subsequent mutation No. 220 was sanctioned for the first time. The merit of this contention has to be considered in the light of the relevant provision of law. Section 30 of the Pre‑emption Act deals with limitation. The relevant portion reads as follows "

30. Limitation.‑In any case not provided for by Article 10, of the second schedule of the Limitation Act, 1908, the period of Limitation in a suit to enforce a right of pre‑emption under the provisions of this Act shall, notwithstanding anything in. Article 120 of the said Schedule, be one year‑ (1) in the case of a sale of agricultural land or of village immovable property, from the date of the attestation (if) any of the sale by a Revenue officer having jurisdiction in the register of mutations maintained under the Punjab Land Revenue Act, 1887, or from the date on which the vendee takes under the sale physical possession of any part of such land or property whichever date shall be the earlier." Article 10 of the Limitation Act obviously applies to cases where the sale is evidenced by means of a registered instrument and where physical possession of the entire property has been obtained under the sale. In the absence of these conditions the provision applicable to the instant case was the one contained in subsection (1) of section 30 of the Pre‑emption Act.

6. It was contended by the learned counsel that in the first instance there was 'no satisfactory evidence of the respondent -vendees having taken physical possession of the land in question and assuming that they had been in physical possession since 1951, their possession could not be characterised as "physical possession under the sale", inasmuch as no valid sale had taken place. As stated earlier, validity of the sale was challenged on the basis of the provision contained in section 8 of Act XVI of 1951, which reads as follows:‑ "

8. Effect of transfers after the 14th August 1947.‑Any transfer of land or of an interest in land effected after the 14th August 1947, during his life‑time by an owner liable to pay tax under this Act, shall not be valid unless it has been formally approved by the Collector: Provided that if in the opinion of the Collector such a transfer of land or of an interest therein was intended to evade the tax, it shall be ineffectual for the purposes of this Act and the tax assessed in respect of the agricultural income of such land shall be payable by the person who would have been liable for its payment, if no such transfer had been effected: Provided further that in cases of transfers approved by the Collector under this section the consequent reduction in the amount of tax shall not be made without the previous approval of the Commissioner." It was for the first time that the agricultural income‑tax was permanently brought on the statute book the earlier Acts having successively remained in force for one year each. In view of the above provision it was contended that since the earlier transfer of the land relied upon by the respondent‑vendees hid not been approved by the Collector for which reason the Assistant Collector had rejected the mutation, it was not a valid transfer and as such should be deemed to be non‑existent. In further elaboration of the arguments, the learned counsel contended that at best it could be an agreement of sale which being unenforce able by law would be void in terms of section 2 (g) of the Contract Act. Reliance was placed in this regard on section 23 of the Contract Act which provided inter alia that the considera tion or object of an agreement would be fulfilled unless it was forbidden by law or was of such a nature that if permitted would defeat the provisions of any law. Further support was also sought from the provision contained in section 6 of the Transfer of Property Act which allowed transfer of properties of all kinds except those prohibited by the Transfer of Property Act itself, or any other law for the time being in force. It was contended that the so‑called sale of 1951 based on the Patwari's report in roznamcha Exh. D. 2 and the consequent entry of rejected mutation Exh. P. 5 was at best an agreement to sell or a contemplated sale which never materialised even if it were an inchoate sale a suit for pre‑emption under section 21 of the Act was not competent. Section 21 reads as follows: "(21) Any person entitled to a right of pre‑emption may, when the sale or foreclosure has been completed, bring a suit to enforce that right."

7. On the contrary, it was contended by the learned counsel for the respondents that notwithstanding the rejection of the mutation on 12th December 1953, the sale had been completed in the year 1951 with the complete fulfilment of' all its incidents including the receipt of price and the delivery of possession by the vendor. It was next argued that the bar created to the validity of a sale by section 8 of Act XVI of 1951, which came into force from Rabi 1951, did not render the sale void ab inatio but made its validity contingent on the approval of the Collector and since there was no time limit prescribed for obtaining such an approval, the removal of this bar by the sub stituted section 8 of Ordinance IV of 1954 had ipso facto resulted in the validation of the same which otherwise was complete in all respects. It was argued that the sanctioning of a mutation was not an essential ingredient or incident of sale but indicated only a subsequent admission on the part of the parties regarding the transaction of sale and could only be used as a piece of evidence of the same.

8. The sole question that falls for determination is whether the sale of the land was completed in 1951 notwithstanding the rejection of mutation No. 194, and that subsequent entry in Mutation No. 220 on 18th May 1956, was merely a fresh recital of the same, or in the alternative it marked a new transaction of sale rendering it liable to the right of pre‑emption within one year. Sale has been defined in section 54 of the Transfer of Property Act as "A transfer of ownership in exchange for a price paid or promised or part paid and part promised". The paragraph next following the definition relating to the mode of making a sale' and making the instrument of transfer compulsorily registerable is not, however, relevant. In the instant case, there is convincing evidence on the record and rightly believed by the Courts below that the vendee ‑respondents had paid a sum of Rs. 4,387 to the vendor who had delivered them the possession of the land in question in 1951. There is not the slightest indication that on account of the rejection of the mutation in this regard, the parties had rescinded the sale by repayment of the price to the vendees and re‑delivery of the possession to the vendor, thus reversing to status quo ante. On the contrary, even from the Patwari's report Exh. D. 1, it becomes abundantly clear that the respondents had been in continuous possession of the land since 1951. It may also be observed that it is nobody's case that the respondents were already in possession even prior to 1951 in any tether capacity of a tenant, lessee or mortgagee, but the possession of the land was delivered to them only in pursuance of the sale. We are therefore, of the considered opinion that the sale in this case was completed in 1951 but only conditional invalidity attached to it which was removed in 1956. Thus there was no new sale of the land in the year 1956 which could be pre‑empted in 1957.

9. The next point to be considered in this regard is the effect of the bar created by section 8 of the Act XVI of 1951 to the validity of such a transfer. It cannot be denied that the sole object of making this provision is to safeguard the interest of the Government in so far as the payment of Agricultural Income‑tax is concerned and to completely shut the door for the assessee to have recourse to evasive 'transfers effected with a view to escape the liability. From the expression "Any transfer . . . . . shall not be valid unless" employed in section makes it abundantly clear that such transfers are not void gab initio, but their validity had been made contingent on the approval by the Collector. When the Collector refuses the approval on the basis of a finding that it is a mala fide and evasive transfer, the only consequences that follow from such a patent and glaring finding are that the transfers are rendered ineffectual for the purposes of the Act, o in other words. it does not effect the liability of the assessee to pay the agriculture, income‑tax, and that is the end of the matter. Thus the only effect of the non‑approval by the Collector of the so‑call‑‑d invalid sale would be that the owner, shall continue to be liable for the payment of agricultural income tax and the invalidity would be confined only to that extent and for no other purpose. We are, therefore, of the view that the transaction between the lea‑ties in the year 1951 was one of complete sale and its contingent invalidity for purposes of Agricultural Income‑tax Act old not render it incomplete in terms of section 21 of the Pre‑emption Act. It may be observed in this context that the exception created by section 6 of the Transfer of Property Act would not be attracted in the instant case. The relevant portion of that section reads thus:‑ "Property of any kind may be transferred except as otherwise provided by this Act or by any other law for the time being in force." Section 8 of the Agricultural Income‑tax Act does not operate as a complete bar to transfer of property but only imposes a temporary restriction for the limited purposes of ensuring payment of Agricultural Income‑tax otherwise the validity of the sale; is not questionable on any other ground. We are of the view that much of the confusion seems to have arisen on account of the use of the expression "shall not be valid" in section 8 ibid. As stated earlier, the scope of this so‑called invalidity is restricted only to the fulfilment of the object of the Agricultural Income‑tax Act and to no other purpose, and as such the lack of validation cannot be put up as a defence for not bringing the suit within one year of the date of the delivery of the physical possession of the land to the respondent. This view finds support from a decision of Hafiz Abdul Majid and M. U. Khan, learned Members Board of Revenue, in Manzoor Hussain v. Mst. Sughra Bibi (P L D 1957 W P (Rev.) 40). It was held by the learned Members that the word `valid' used in the operative clause should be deemed to be equivalent to the word `effective' and the words `formally approved' must be considered to be equivalent to the words "declared to be free of the intention of evading tax."

10. It may be observed that the pre‑emptability of a sale has not been made in any manner contingent on the sanctioning of the mutation but the only expression used in section 21 of the Pre‑emption Act is "when the sale has been completed." In our opinion a reference to the provision of subsection 2(g) of section 23 of the Contract Act would be wholly irrelevant. It was not a case of an agreement which was unenforceable by law or one whose consideration or subject was forbidden by law or which purported to defeat the provisions of any law as envisaged by section 23(2)(g) ibid. We may point out that it is no body's case and in fact could not possibly be so that the sale was effected by the vendors with a view to defeat the provisions of the Agricultural Income‑tax Act so as to render the transaction null and void. It is well‑settled that the right of pre‑emption is one of substitution and the pre‑emptor must take the property subject to all the rights and obligations arising out of the, sale transaction. He is bound to take the title which the vendee was ready to take. If the vendee has chosen to take the property with all the risks of getting a doubtful title, the pre‑emptor must offer to be substituted completely in his place or not have it at all. It was, therefore, incumbent on the appellant to have brought the suit within one year of the date of delivery of the physical possession of the land to the respondent‑vendees completely regardless of the rejection of the mutation which was wholly irrelevant. The attestation of the subsequent mutation No. 220, on 30th October 1956, was in recognition of the old transaction of sale made in the year 1951 after the legal hurdle to its attestation, on the basis of section 8 of Act XVI of 1951, was removed. 11. 1t now remains to examine the authorities relied upon by the learned counsel for the appellant. He cited before us Imam‑ud‑Din v. Khuda Bakhsh (A I R 1915 Lah. 479), Ram Peara v. Rup Lai (A I R 1918 Lah. 79), Tola Ram v. Lorinda Ram (A I R 1922 Lah. 250), Sheo Ram v. Indraj (A I R 1925 Lah. 152 (2)) and Muhammad Sarwar v. Feroz Khan (P L D 1951 Lah. 169). In the first three authorities the vendees were already in possession of the land whose sale was sought to be pre‑empted as lessees, and as such it was rightly held therein that it was not a case of taking physical possession of the land under the sale. The correctness of this proposition can hardly be disputed, but this has no bearing on the instant case. We have already held that it was in pursuance of the transaction of sale that the respondent‑vendees took physical possession of the land in question for the first time, and as such there could be no doubt as to its being a case of taking physical possession under the sale. Tolu Ram v. Lorinda Ram, the facts were that on 20th March 1901, two persons Thakur Dass and Matan Das executed a deed in favour of one Parshotam Das regarding the sale of one‑half of their land in Multan district accompanied by delivery of possession. According to the terms of the deed, the ownership of Parshotam Das was made contingent on the fulfilment of the sinking of a well, the erection of certain buildings and the cash payment of Rs.

300. On 4th of March 1908, the plaintiff brought a suit for pre -emption which was dismissed by the trial Court principally on the ground that according to the statement of Thakur Das the deed had begin cancelled owing to non‑fulfilment of the conditions stipulated therein. Parshotam Das, however, remained yin possession throughout. Thakur Das died in 1909 and on the 14th of September 1911, his one‑half share was entered in the name of the son of Parshotam Das on the recital that the .conditions had been fulfilled and the title had matured. A second suit was instituted on the strength of this mutation on 13th January 1912. A decree for pre‑emption was given by the trial Court, but the suit was dismissed on appeal on ground of limitation. The plaintiff preferred a second appeal in the High Court which was accepted by their Lordships of the Division Bench holding the suit to be within limitation. The position was obviously distinguishable. In the first instance the plaintiff pre‑emptor had filed a previous suit which was dismissed and secondly it was clearly held by their Lordships that in the circumstances of that case taking physical possession under the law was impossible in the very nature of things, and as such limitation started running from the date of mutation. What is more significant however, is the fact that full title had not passed in favour of the vendees at the time of the agreement notwithstanding the delivery of possession. Thus in the precedent case the transfer of the property in question was contingent on the fulfilment of certain conditions which according to the statement of Thakur Das were never fulfilled and as such the deed of transfer stood cancelled. The deed was only held to be tantamount to an agreement of sale and notwith standing the transfer of possession full title had not passed. On the point of Limitation their Lordships of the Division Bench ruled as follows: "The underlying principle governing the limitation in pre -emption suits is that it runs from the date of notice. If physical possession is given under the sale the whole world is given under notice of the alienation." In the case before their Lordships the plaintiff‑pre‑emptor was informed that the contract under which the transfer had taken place had been cancelled and that during the pendency of his pre‑emption suit, and as such he was given notice of the sale by the mutation. The authority, therefore, does not advance the case of the appellant.

11. Likewise, in Muhammad Sarwar v. Feroz Khan a Division Bench authority, the facts were different. The land in question was waste land which remained unbroken and the mere admission by the vendor before the Patwari or the Revenue Officers that he had surrendered possession to the vendees in the absence of any visible or concrete evidence of his actual taking of the physical possession such as ploughing or fencing, their Lordships were not satisfied as to the vendees' taking of physical possession under the law. On the contrary, in the instant case on the basis of evidence supported by copies of Khasra. Girdawaris, it was concurrently found by the Courts below that the vendee‑respondents had been in possession at least of a part of the land since 1951.

12. The upshot of the discussion, therefore, is that the appeal must fail, which is hereby dismissed, with no order as to costs. K. B. A. Appeal dismissed.