SHUKRI Versus MUHAMMAD SHAFI

The facts of this case as disclosed by the petitioners are that land com prising Khasra Nos. 253, 264, 265, 265, 267, 218, 262/1, 269, 270, 72, 73, 77, 87, r.8, 89, U4, 96, 97, 91, 94, 109, 104, 106, 18l, 205, 206, 220, 143, 180 202 and 100 measuring 233 kanals 3 marlas fell in the khata of the Central Government after consolidation proceedings and was allotted to the prede cessor-in-interest of petitioners Nos. 1 to 4 in village Wasaipura, rehsil Chunian, District Lahore. The allotment was confirmed on 30th April 1964 and possession was also delivered. The petitioners continued in its undis turbed possession since after the death of their predecessor-in-interest. Prior to the consolidation proceedings the Knasra numbers were owned by respondent No 3 as local owner.

2. Muhammad Hussain etc. had obtained a declaration dated 31st January 1962 from the Custodian of Evacuee Property that certain land in the village in question obtained by them in exchange from tile evacuees was not evacuee property. This declaration was given effect to in the revenue record vide mutation No. 128 of 23rd July 1964 and those specific Khasra numbers which had fallen to the lot of respondent No. 3 in the consolidation proceed ings were restored to Muhammad Hussain etc.

3. On 30th October 1964, petitioners Nos. 1 to 4 sold the land in question to petitioner No. 5 and also got a mutation attested in her name. It is contended by the petitioners that about two years later a miscellaneous application was filed by respondent No. 3 Ghulam Muhammad saying that 44 kanals 7 marlas of land given to him during consolidation proceedings having been taken away from him on the ground that it was Muslim property, le was entitled to the equivalent land out of the khata of the Central Government. Reports were called for from the subordinates on this application of Ghulam Muhammad respondent No. 3 but the Additional Settlement Commissioner refused to consider the same. Rather he observed that respondents may file an appeal against the confirmation of the scheme of consolidation.

4. Consequently Ghulam Muhammad filed an appeal dated 29th August 1968, which came up for hearing before the Additional Settlement Commis sioner/Collector Consolidation, Lahore, who by his order dated 12th April 1969, held that placing the Muslim property into the khata of the Central Government was void ab initio. He also condoned the delay as the order was void. The present petitioners challenged that order in revision but the same wag also dismissed in limine.

5. In the present petition the petitioners submit that petitioner No. 5 being a bona fide purchaser of the property in question for valuable consi deration, from an ostensible owner, without any knowledge of a defect in the title of the vendor, is protected under section 41 of the Transfer of Property Act. It is urged that the Settlement Authority, as an agent of real owner of the property i.e. the Central Government by entering the allottee as the absolute owner, deemed to have stood by him, while he was selling the property as his own, and could not subsequently turn round to cancel the same and take it away from him. The contention is based on the doctrine of equitable estoppel which is now contained in section 115 of the Evidence Act and section 41 of the Transfer of Property Act. The most important ingredient of the principle is, that there should be a representation .by word or conduct, of existing facts, intended to be acted upon to his pre judice, by the person to whom it was made. In such a situation the maker of the representation will not be allowed to allege in the proceedings against the person so acting that the facts are other than he had presented to be. According to the learned counsel for the petitioners the land in question had been recorded by the statutory functionaries as being owned by petitioners Nos. 1 to 4 allottees. Under section 15 of the Displaced Persons (Land Settlement) Act the allottees after paying the settlement fee etc. gets perma nently settled on the land and becomes an absolute owner under section 16. He thus had a right to sell the property. In this particular case it is claimed that the Settlement and Revenue record did show the allottees as the owner and this was a clear representation which brought the case under section 41 .of the Transfer of Property Act which reads as under:---

"41. Where, with the consent, express or implied, of the persons interest ed in immovable property, a person is the ostensible owner of such property and transfers the same for consideration, the transfer shall not be voidable on the ground that the transferor was not authorised to make it: provided that the transferee, after taking reasonable care to ascertain that the transferor had power to make the transfer, has acted in good faith."

"The petitioners also relied on Khair Din and another v. Mst. Zainab Bibi and others (PLD 1973 Lah. 586), the relevant portion of which reads as under:-

"(5) The principle, on which section 41 of the Transfer of Property Act has been enacted, is based on the following observations of their Lord ships of the Judicial Committee in Ramcoomar Koondoon and others v. Macqueen and another (1872) 40 I A 43.

--------------------It is a principle of natural equity, which must be universally applicable, that where one man allows another to hold himself out as the owner of an estate and a third person purchases it, for value, from the apparent owner in the belief that he is the real owner, the man, who so allows the other to hold himself out, shall not be permitted to recover upon this secret title, unless he can overthrow that of the purchaser by showing either that he had direct notice, or something which amounts constructive notice, of the real title; or upon an inquiry that, if prosecuted, would have led to a discovery of it.'

As a matter of fact the principle is a statutory application of the law of estoppel, which was enunciated as follows in Gairacross v. Lorminer (1860) 3 Macq. 827 at p. 829 of the report :----

'If a man, either by words or by conduct, has initiated that he consents to an act which has been done, and that he will offer no opposition to it, although it could not have been lawfully done without his consent, and he thereby induces others to do that from which they might have abstained he cannot question the legality of the act he had so sanc tioned to the prejudice of those who have so given faith to his words or to the fair inference to be drawn from his conduct.'

Admittedly the section is an exception to the rule that a person cannot confer a better title than he has and when once we find that the under -mentioned ingredients of the section are present in a given case, the protection to the transferee is complete:

(a) The transferor is the ostensible owner;

(b) he is so by the consent, express or implied, of the real owner;

(c) the transfer is for consideration;

(d) the transferee has acted in good faith, taking reasonable care to ascertain that the transferor had power to transfer.

Learned counsel for defendant No. 3 has also invited my attention to Jagannarh Roy v. Radhakanta Roy and others P L D 1971 Dacca 52 wherein a similar question arose in a suit for partition filed by brother A against his brothers B, C and D, also impleading E and F who were transferees from B and were in possession since transfer, and it was held that right, title and interest of E and F due to acquiescencer on the part of plaintiff A was protected in the circumstances by principle of section 41 of the Transfer of Property Act and that the plaintiff A, if he had been deceived by the action of B (defendant No. 1), can be compensated from the remaining ancestral property out of the share of defendant No. 1. Learned counsel for the plaintiffs has not cited any authority or shown any rule of law to the contrary. 1, therefore, hold, in agreement with the learned lower appellate Court,, that the transfer in favour of defendant No. 3 is protected under section 41 of the Transfer of Property Act and the objection that if' the value of the parcel of land sold by defendants Nos. 1 and 2 to~ defendant No. 3 is found in excess of the former's share, the plaintiffs would be entitled to trace the same in the hands of the transferee, is untenable, an acceptance of such a contention would mean negation of the very principle enacted in the said provision of law."

6. The petitioners' learned counsel also invited my attention to a Full Bench case Shamsher Chand v. Bakhshi Mehar Chand etc. (A I R 1947 Lah. 147) on the same point. It was held per majority judgment in that case that unless the transferee had been induced by words or conduct of the real owner, mere in activity or silence on the part of the real owner will not amount to estoppel or attract application of section 41 of the Transfer of Property Act. Reliance was also placed on Rehman Shah v. Muhammad Shah and others (1974 S C M R 255). In this case the alleged sale of land was not mentioned in the Revenue papers and there was no other evidence to show that such a sale had taken place consequently, the transferee who had acted on the basis of the available record was given the protection under section 41 of the Transfer of Property Act.

7. A perusal of the above-noted section and the judgments would show that in order to seek a benefit under this rule the transferee must prove (1) that he had given valuable consideration, (2) that he had acted in good, faith and (3) that he had taken reasonable care or made reasonable inquiries to ascertain that the transferor had the power to make transfer. Where any of the essentials are lacking the transferee shall be denied this protection.

8. The facts of the case in hand show that Muhammad Hussain got the declaration from the Custodian on 31st January 1962. The land was confirmed in favour of petitioners Nos. I to 4 on 30th April 1964. The declaration of the Custodian of Evacuee Property was given effect to in the revenue record on 23rd July 1964, while petitioner No. 5 purchased the property on 30th October 1964. Thus, if the petitioner had taken a little care he would have found out that the khata of the Central Government had been depleted by 557 P. I. U. and one of the two allottees in the village must have lost a part of his allotment. It is to be noted here that the evacuee did not have much area in the village in question. The entire land was allotted against two Khata Nos. 11 and 12. Land in Khata No. 11 had been purchased in entirety by respondent No. 3 and the same has now been adjusted against a part of the shortfall in his favour. The balance has been taken from the allotment of petitioners Nos. 1 to 4. The result is that petitioner No. 5 was not vigilant. It has been held in a number of cases that the usual search is for the period of 12 years. There is nothing on record that the petitioner complied with any of the essentials noted above. The writ petition shows that the land in question was sold by an attorney. The is short interval between the date of confirmation and sale raises a suspicion that it might be a case of sale of claim units. The transfer was effected orally witnessed by a mutation but the same has not been produced. No inquiry or search is even alleged to have been made to prove reasonable care or bona fide. A mere entry of one's name as an owner in the Government record or in private papers did not relieve the purchaser from such owner from the duty and the responsibility of making an inquiry into the title of the owner as held in Sheogohind Ram Baral and another v. Anwar All and another (A I R 1929 Pat. 305). In another case Abdul Shakur Ahan v. Mst. Rafiqun Nisa (31 All. 73 (P C)) it was held that the purchaser who merely relies on mutation of names does not act with reasonable care for mutation itself does not confer proprietary title. In a number of other cases the mutation was considered to be merely a statement of the fact which existed as to possession of the property. Consequently neither the mutation nor the entry in the Record-of-Rights or revenue papers were considered to be a substitute for the title and a purchaser who acted upon such an entry as evidence of title was said to have acted at his own risk as held in Muhammad Sujat v. Mst. Chand Bi (A I R 1927 Nag. 41), Ram Chalitra Thakur and others v. Shivanandan Thakur and others (A I R 1934 Pat. 67). In Kanhlya Lal v. Dup Chand (A I R 1947 Lah. 199) the Court laid down a good rule about the extent of inquiry. It was held that in the case of a house property in a town, no transferee should be allowed the benefit of this section, unless he undertakes a scrutiny of the relevant registers in the registration office. The standard of care is that which a reasonable or a prudent man would take in such circumstances. It is no gain saying that allotments on bogus and fraudulent claims have been so rampant that every purchaser had to be extra cautious, and vigilant before entering into any transaction. This notoriety in the allotments of the evacuee land calls for extra care and extensive inquiry. Thus the standard of care in such cases is far higher than in other cases.

9. In any case there is no material on record from which it could be judged whether the petitioner did qualify to avail of the protection of section 41 of the Transfer of Property Act. Further, all this would involve an elaborate inquiry to establish and the present proceedings are not the right media for the same.

10. It may also be observed that the respondent is a local. He is neither the person who made the representation nor was he the transferor. He was given the property in question in the consolidation proceedings under the West Pakistan Consolidation of Holdings Ordinance, 1961, in lieu of his personal land. The officers who gave this land to the respondent did have a power under the law to do so. The respondent, therefore, could not have been penalized for any inaction or silence on the part of Muhammad Hussain to get the declaration of the Custodian, Evacuee Property implemented, with promptness in the Revenue record. The omission, if any, on the part of the Settlement/Revenue officials to take away the land in question immediately after the declaration of the Custodian of Evacuee Property or to correct their records accordingly, could not cause any damage to the respondent.

11. Further the allotment of this area was also void as it shall be deemed to have never been acquired under the Displaced Persons (Land Settlement) Act, 1958 as held in Muhammad Khan and others v. Chief Settle ment and Rehabilitation Commissioner (P L D 1962 S C 284), the relevant passages of the case at pages 289 and 291 are as follows :-

. . It is difficult to accede to this contention as correct. The intention to destroy the rights of Pakistani owners in properties, in which part of the interest vested in an evacuee, without any compen sation whatsoever, cannot be lightly attributed to the Legislature . . . ."

"The position that emerges, therefore, is that the right, title and interest of the appellants has not been acquired by the notification issued under section 4 of the Act and unless the appellants' mortgage is redeemed either by the Government or by the allottees, the appellants are entitled to retain possession of the lands under their mortgage."

This will show that the general notification acquiring the evacuee property was neither meant to acquire such properties nor could the same be taken over or allotted. The allotment to that extent was, therefore, void and could be taken away under sections 10 and 11 of the Displaced Persons (Land Settlement) Act.

12. For the reasons stated above, there is no force in this petition and the same is dismissed leaving the parties to bear their own costs.

K. B. A. Petition dismissed.