P L D 1967 Supreme Court 153 (PLP)

CORNELIUS, C. J.‑‑ The appellant is Abdul Wahid, vendee respondent in a pre‑emption suit brought in 1955 by Mst. Zamrut, widow of one Mian Masiti. The vendor in the sale which took place in 1939 was one Ganga Bishan, who migrated to India at the partition. It is on the record ' that the Custodian of Evacuee Property enquired into Abdul Wahid's right to be owner and in possession of Gansa Bishan's Property, namely, the house in question, and issued notice to Abdul Wahid, who made a number of replies, the last being of date the 26th April 1954, following which no further action was taken by the Custodian. It may be stated here with advantage that Ghulam Mustafa, Record Keeper of the office of the Custodian, Peshawar, clearly stated as a witness for the plaintiff‑pre‑emptor that this reply by Abdul Wahid was received in the office of the Custodian on the 29th April 1954, following which no further action was taken in the matter by the Custodian. The reply of Abdul Wahid was that he became owner of the house by first taking a mortgage from Ganga Bishan for a period of 12 years for a sum of Rs.1,700 by deed executed on the 26th March 1939, which was registered on the 20th April 1939, and secondly, by purchasing the equity of redemption of the house on the 24th May 1939, for a sum of Rs. 99, and as the consideration was less than Rs. 100, the sale did not require to be registered and was in fact not registered. Mst. Zamrut instituted her suit for pre‑emption on the 23rd June 1955. It was brought out in evidence that the house in question is surrounded on two sides by property now belonging to Mst. Zamrut, which she inherited from her husband, Mian Masiti. The existence of a pre‑emptive right is undeniable. It is also clear that the suit‑house was once part of a single property belonging to Mian Masiti, and that it was brought to sale by Ganga Bishan in execution of a decree in 1932 and thereby 'became lost to Mian Masiti. Ganga Bishan never lived in this house. It was always occupied by Muslim tenants. The names of four such tenants were mentioned in his evidence by Muhammad Ayub, son of Mst. Zamrut, who conducted the case on her behalf, she not having appeared in evidence at all. These names are Abdul Majid, Nouroze, Gul Muhammad and Mian Abdullah of whom only Mian Abdullah was produced as P. W. 8, and he said he had lived in the house some 20 years earlier, and had left it 18 years earlier. As he was deposing in the year 1956, this makes it clear that Mian Abdullah was one of the tenants of Ganga Bishan. Muhammad Ayub went to the length of saying that he did not know if Abdul Wahid had been living in the house since 1939, and was prepared to concede only that he had been living there for 10 or 12 years. At the same time, he insisted that Abdul Wahid was living there as a tenant, although he did not know to whom Abdul Wahid paid rent. In his cross‑examination, it was brought out that apart from connection by reason of easements, etc., there was even until lately a connecting door between the suit‑property and the adjoining house occupied by Mst. Zamrut. He admitted also that the womenfolk from the suit‑house used to visit 'the womenfolk in Mst. Zamrut's house. All this is relevant to the contention of Abdul Wahid that he has been living in the house ever since he brought it in 1939. One further fact appearing from the evidence of Abdul Wabid given in cross‑examination needs to b?, mentioned. It is that Mian Masiti, the husband of Mst. Zamrut died "7/8 years ago", this period being counted from the 15th December 1956, when the statement was being made in Court. As this statement was not contraverted it may be accepted that Mian Masiti was alive until 1948 or 1949, that is, he was alive for 9 or 10 years following the hid execution of Abdul Wahid's mortgage and sale deeds, and for a year or two following the partition. Further, even accepting Muhammad Ayub's statement made on the 24th July 1956 that Abdul Wahid had been living in the house for only 10 or 12 years, that is to say, from 1944 or at the latest 1946, Mian Masiti must be held to have seen Abdul Wahid in occupation of the portion of his property, which he had lost by virtue of a, decree to Ganga Bishan, for at least 3 and possibly for 5 years before he died. find no mention in the judgments of the Courts below, out the, are of direct importance to the question of the knowledge possessed by Mst. Zamrut and her predecessor to interest, Mian Masiti regarding the status of Abdul Wahid in respect of this property. For it must be assumed that Mian Masiti, who had lost an integral portion of his property, and it may be said also, ancestral property, to an outsider and a Hindu, in circumstances in which lie could not exercise his right of pre emption by virtue of contiguity, would be the person with the keenest desire to regain the property, whenever an opportunity arose through the entry of a person, who did not appear to be holding under the Hindu auction‑purchaser, but in his own right. For between 3 to 5 years before his death, Mian Masiti had been seeing Abdul Wahid in possession of this property, and at least after the departure of Ganga Bishan to India, which happened a year or two before Mian Masiti's death, an opportunity arose of making enquiry as to the status in which Abdul Wahid continued to occupy the house. The property, if it incorporated some evacuee interest vested in the Custodian, who had power to investigate the title of the present holder. There were comings and goings between the families, as is evident from the admission made by Muhammad Ayub that the womenfolk of the two houses used to visit each other, and the question of the capacity in which Abdul Wahid occupied the house was a very natural one to come up. There is not a word in the evidence led by the plaintiff in the case that she or anyone else was misled by any statement made by Abdul Wahid or anyone connected with him into thinking that he was continuing either as a mortgagee or a tenant. It was admitted by Muhammad Ayub that he was not aware of the mortgage. The mortgage was for a period of 12 years and was capable of being redeemed by the Custodian, if it was still in existence. At the partition, a very important opportunity arose of ascertaining with certainty what was the position of Abdul Wahid in respect of the house, if up to that time Mian Masiti and his people were not aware of the true position. and were still in the belief that Abdul Wahid's possession was not relateable to any title that had become vested in him. Taking these matters together, namely, the total absence of any enquiry in a period from at least 1944 to 1948‑49 coupled with the possession of ample means of knowledge or at least of enquiry during that period, and the fact that the person most keenly interested in regaining possession of the property, Mian Masiti, was alive throughout that period, the conclusion may well be reached that the lack of interest shown was due to acceptance of Abdul Wahid as title holder entitled to possession. A further relevant fact is established by evidence and is attested indeed by a Commissioner appointed by the trial Court, i1z., that during the period of his occupancy, Abdul Wahid had made additions and improvements in the house. That alone was sufficient to put a next‑door neighbour, with a right to pre‑empt, coupled with a keen interest in pre‑empting, upon enquiry. The fact is inescapable that no enquiry was made in that long period of some five years, which may well have been twice as long, for there is no substantial rebuttal of Abdul Wahid's statement that he went into possession of the house immediately after execution of the documents in 1939. The plaintiff through her son Muhammad Ayub specified with accuracy the date on which and the method by which her suspi cions were excited. Muhammad Ayub said that on the 22nd March 1955, he learnt from a milk seller, Inayatullah that on the previous day, a chaprasi had come from the Custodian's office with a notice for Abdul Wahid which had been refused. This aroused Muhammad Ayub's suspicion and on the very next day, he made application for the relevant documents from the Custodian's office and these were made available to him on the following day, namely, the 23rd March 1955. Since the suit for pre‑emption was being brought 16 years after the registered deed of mortgage, which on the allegations in the plaint was in fact a deed of sale, the subsequent document of the 24th May 1939, being characterised as fictitious and without consideration, it was the duty of the plaintiff to prove beyond doubt all the circum stances attending the receipt of information as to the transfer having already taken place. The plaintiff never produced Inayatullah, the alleged milk seller. On the statement of Ghulam Mustafa, Record Keeper, of the Custodian's office to the effect that after the 29th April 1954, no further proceedings took place in respect of the suit‑house in the Custodian's Department, it is safe to infer that the story that any notice was brought by a . chaprasi of the Custodian's Department to Abdul Wahid's house on the 21st March 1955 was in all probability a fabrication. No attempt was made to produce any such chaprasi. It becomes clear that no such notice was ever issued. These are matters which have not been noticed in the three judgments delivered in the Courts below. The omission is much to be regretted, for if the facts had been properly appreciated at the very outset, there need not have been the prolonged litigation which has followed. The Courts have made no comment on the fact that copies of the documents wanted by Muhammad Ayub were delivered to him with such great promptness, that is within a single day of his application. If they had given due attention to this remarkable circumstance, and the fact that although precise allegations were made as to the plaintiff's means and time of knowledge, no evidence was produced in support, and the allegations seemed clearly false, they would have gained a more correct appreciation of the foundation of the litigation. The whole reason for this litigation appears cleared to be that when called upon by the Custodian to explain his possession of the property which had once belonged to Ganga Bishan. Abdul Wahid in his reply of the 26th April 1954 had said, somewhat gratuitously, that he first took a mortgage of the house (i.e., instead of an outright sale) so that some neighbour or owner of con tiguous, .property should not bring a suit for pre‑emption. The plaintiff throughout her suit placed the maximum importance upon this admission as constituting by itself an action in fraud. The vendee‑defendant was fully conscious that this was the central weakness in any defence that he could put up, and he went to the length of denying that he ever .made such a reply. The application of the 26th April 1954 was in fact sent to the Finger Print Bureau, West Pakistan for comparison of the thumb impression thereon purporting to be that of Abdul Wahid with others on the vakalatnama in the case, and the opinion was obtained that these were in fact identical. On this point, the District Judge, who dismissed Mst. Zamrut's appeal against the dismissal of her suit by the trial Court made the following observation. "The mere fact that the defendant tried to give evasive answers about his thumb‑impressing the representation he made to the Assistant Custodian, cannot conclusively establish that he was guilty of fraudulent concealment of the sale transaction." In dealing with the admission that the transaction was first recorded as a mortgage before being converted into a sale for fear of pre‑emptors, the District Judge observed that it was "a matter of common knowledge that most of the people take properties on mortgage for long terms instead of purchasing them with a view to avoid pre‑emption". He also thought that the admission by itself did not have the effect of proving that the defendant "had committed any fraudulent concealment of fact to keep the factum of sale in secrecy from the plaintiff". Similar views, although in different words, were expressed in the judgment of the trial Judge, who interpreted the admission in question as meaning that "the house was taken on mortgage because he was afraid lest some neighbour might pre‑empt it, if it had been purchased". These Courts accordingly held that there was no fraud, and the suit was barred by time. In the High Court, where the matter' was taken in revision by Mst. Zamrut, however, a different view was taken in a passage, which while it does not clearly evaluate the alleged admission, nevertheless gives full effect to it. The passage is reproduced below:‑ "The plaintiff stated that she got to know of this sale on 23rd of March 1955 from her son. She also led evidence to prove this fact. We have it from Ghulam Mustafa, Record Keeper of the office of Custodian, Peshawar, that Abdul Wahid was called upon to account for his possession and his reply was received on 29th April 1954 ' that he was the owner of the suit house. It appears that Muhammad Ayub, the son of the plaintiff learnt. of it much later and the plaintiff lost no time in obtaining the necessary copies and instituted the suit to pre‑empt the sale. Abdul Wahid disclosed it for the first time on 26th April 1954 in his application (copy Exh. P. C). to ‑ the Assistant Custodian, Peshawar, that he got this house mortgaged in his favour on 26th March 1939 and on the 24th of May 1939 the house was sold to him and that he got the house on mortgage to defeat the neighbour's right of pre‑emption. It is settled law that when fraud is established it is for the defendant‑respondent to prove the precise point of knowledge of those facts by the other party entitled to have the transaction set aside". Evidently, the learned Single Judge in the High Court came to the conclusion of fraud on the basis of the statement in Abdul Wahid's application to the Custodian, which the learned Judge interpreted as meaning "he got the house on mortgage to defeat the neighbour's right of pre‑emption". That is by no means the only interpretation that the words can bear, and speaking with respect, it seems clear enough that the construction put upon these words by the two Courts below the High Court Was by far the more reasonable. There is no doubt that a fear of pre‑emption lingers in the mind of every purchaser of properties in an area where the law of pre‑emption prevails, and consequently, modes of acquisition of title are adopted, which if they do not exclude the possibility of pre‑emption, at least make the exercise of that right more difficult for pre‑emptors. Pre‑emption has been described in authoritative judgments for a great many years as a predatory right, and while it must be allowed, where the necessary conditions are satisfied, the Courts have frequently given their approval to certain modes by which title can be acquired, which place difficulties in the way of pre‑emptors. In the ‑ judgment of the learned Single Judge, there is a mention of a recent Peshawar case, cited as Ali Muhammad v. Malik Sanwal (P L D 1961 Posh. 62) where to avoid pre‑emption, the parties to the transfer of title adopted the method of an exchange. The High Court held in that case that "there was nothing illegal in this device which the law permits", and this observation was understood by the learned Judge .to mean that the device to be approved should be "legitimate and not fraudulent". He found fraud on the basis that the mortgage was executed "with the object of concealing. the real transaction" and "in about a month's time a sale of equity of redemption for Rs. 99 was surreptitiously executed in favour of Abdul Wahid": The learned Judge used a degree of emphasis in pronouncing that "the whole object behind this clandestine move was to fraudulently conceal the, transaction of sale from the pre‑emptor". It is to be regretted that words such as "surreptitiously" and "clandestine move" should furnish practically the whole basis for the conclusion reached by the learned Judge. In his judgment, he has noted that the marginal witnesses to the sale deed of the 24th May 1939, were Beli Ram Malhotra, a Pleader, a son of Ganga Bishan and one Nisar Ali, a tailor whose shop was close to Beli Ram's office, and in a different locality from the house in the suit. One would have thought that when a person entering into a legal transaction made use of his own son, who was a lawyer and maintained a law office, for the purpose of executing the necessary documents, the inference of dishonesty would at least not be the first inference. Such an action would be natural in the most respectable of men. It is surely unnecessary to demand that as a condition of the existence of honesty behind their actions, men should always use as their advisers in technical matters persons who are totally unrelated to them by blood. Nisar Ali is al tailor, but that does not make him a natural agent for the practice of dishonesty or concealment of fraud. The learned judge failed to notice that the marginal witnesses to the mortgage deed, a registered document as to which no allegation of conceal ment could possibly be made, were also the same persons Beli Ram Malhotra and Nisar Ali. Of them, Nisar Ali has appeared in evidence and proved the execution of these documents as well as the passing of consideration. Therefore, the document of sale cannot be said to have been "surreptitiously" executed, unless it be said that the document of mortgage was also surreptitiously executed, and that is impossible. Execution of the sale deed cannot be regarded as a "clandestine move," unless the execu tion of the mortgage deed, which was also carried out in practically the same circumstances, 6e also regarded as a clandestine move and that is impossible. When the learned Judge said that by executing the mortgage deed in the first instance, the parties acted with the object of concealing the real transaction, he could not have meant that the transaction, of mortgage should be concealed, for that was impossible because it was duly registered. He meant that the real intention, viz., to proceed to a sale was concealed, but there is no duty upon persons, who are parties to an intended pre‑emptible transaction, to publish their intention to all pre‑emptors. They may use whatever means and methods are allowed by law to carry out their intention and one of the means allowed to the parties by, law for making an effective transfer of title in immovable property, is by the creation of an encum brance in the first instance, and later at a time suitable to the parties, to dispose of the equity of redemption in favour of k the mortgagee. As between the parties to the transaction this is perfectly effective and perfectly legitimate. If this method is one which imposes a higher degree of vigilance on pre‑emptors than the method of an outright sale might, entail, that is not a circumstance for which the parties to the transfer can be penalised in arty way. In the present case, there seems little doubt that the visible act of entry into possession and occupation of the adjacent property was effected contemporaneously with the transactions of mortgage and sale. As I have observed already, Mian Masiti being alive at the time and his keenness for regaining his property being presumed to be high, the occasion for vigilance was immediately provided, and‑the fact that no vigilance was displayed at all by him during the remaining 9 or 10 years of his life is a factor which must necessarily weigh in determination of the question whether the suit was brought within time. Accordingly, on the facts it seems clear that no finding of fraud can be sustained, and consequently the application of Article 18 of the Limitation Act by the learned Singe Judge in the High Court for holding that the suit was within time cannot be approved. The learned Single Judge's inference that Muhammad Ayub learnt of Abdul Wahid's application to the Custodian dated the 26th April 1954 "much later" may possibly be correct. It is conceivable that the alleged admission made in this applica tion by Abdul Wahid was discovered to Muhammed Ayub by some persons in the Custodian's Department "much later" that is about the 22nd March 1955, but that would not make of the discovery a fresh starting point of limitation for the benefit of the pre‑emptor. Accordingly, on a proper appreciation of the entire evidence and the circumstances in this case, it becomes clear that the conclusion reached by the Courts below the High Court was the only proper conclusion that could be reached in the case. Leave was granted to Abdul Wajid to appeal to this Court against the High Court's judgment decree ing the suit, on a question of law, namely, whether it was open to the High Court under section 34 of the North West Frontier Province Courts Regulation, 1931 to interfere with concurrent findings on question of fact by the Courts below. These provisions were considered by the learned. Single Judge, who found it possible to treat the revision before him from the judgment of the District Judge, in the manner of an appeal, on the basis that by a clause in that section, it was open to the High Court to interfere in a case falling outside the four corners of section 115 of the Civil Procedure Code, namely, a case in which the opinion is formed that there is an important question of law or custom involved which requires further consideration: A question of fraud is never a pure question of law. It involved firstly a finding in regard to facts, that is to say conduct on the part of the party alleged to consider whether such proved conduct amounts in the circumstances of the case to fraud. The latter may be regarded as a question of law arising in relation to the particular facts. Such a question cannot be excluded from the scope of the extended jurisdiction provided to the High Court in revision by the clause in section 34 aforesaid. Therefore, the learned Single Judge must be thought to have acted within his powers, when he reversed the findings of the Courts below, and held that, on the facts, fraud was established. There was no excess of jurisdiction, but, for the reasons given above, the conclusion of fraud cannot be sustained. We allow this appeal, and setting aside the order of the High Court, restore that of the District Judge, with costs of this Court and the High Court to the appellant Abdul Wahid. K. B. A Appeal accepted.