HAQ NAWAZ Versus MUHAMMAD YAQOOB
Briefly stated the facts giving rise to this second appeal under section 100, C.P.C. are that Mehr Haq Nawaz and Sultan, appellants, filed a suit against the respondents for declaration to the effect that they are owners in possession of 100 Kanals and 6 Marlas of land, subject‑matter of the suit, and that the sale of the suit land by Muhammad Yaqub, respondent, in favour of Ghulam Raza, Amir Ali and Khurshid Ahmad respondents through Mutation No.2736, dated 14‑9‑1967 being void was ineffective as against their rights of ownership. The appellants also sought as consequential relief a perpetual injunction restraining the respondents from interfering in their possession over the suit land. The averments contained in the plaint are that the plaintiffs are in possession of the land in dispute and in peaceful enjoyment of its produce by virtue of sale subject to the mortgagee's rights vide sale‑deed, dated 1‑11‑1962. The suit land was first mortgaged with Muhammad Siddique (P.W.4) vide registered deed, dated 12‑9‑1961 and then additional charge was created in favour of aforesaid Muhammad Siddique vide registered deed, dated 25‑9‑1961. It was averred that the suit land was represented to be free from any charge or encumbrance except for the above‑stated two mortgages but later on it transpired that the other encumbrance existed over the land as well which Muhammad Yaqoob respondent No.l acting fraudulently and with a view to cause loss to the plaintiffs did not disclose and so the same was not mentioned in the sale‑deed executed in favour of the plaintiffs. It was added that the sale Mutation No.2421 entered was cancelled on 3‑3‑1966 on the ground that land in question was got allotted in lieu of mortgagors as well as mortgagee's rights but the charges payable in respect thereof were not paid to the Government. It was also averred that on coming to know of the aforestated encumbrance the plaintiffs paid the Government dues amounting to Rs.3,195 got the land redeemed vide registered deed, dated 2‑9‑1967 and resultantly Mutations Nos. 2735 and 2737 of Redemption of Mortgages were attested on 12‑9‑1967. The plaintiffs further asserted that they have also redeemed the land from Muhammad Siddique by paying him his dues on 5‑4‑1968; thus these mortgages as well as the encumbrance in favour of the Government stand extinguished, the land stands redeemed and now land vests absolutely in them without any encumbrance, charge or mortgage. It was asserted that the sale made in favour of respondents Nos.2 to 4 by respondent No.l of the suit land vide Mutation No.2736, dated 14‑9‑1967 was illegal, null and void and as such ineffective as against the rights of ownership vesting in the plaintiffs.
2. The suit was contested by Muhammad Yaqoob, respondent alleging that the sale in favour of the appellants was void as due to legal prohibition the land could not have been sold and that the suit as framed was incompetent as the appellants‑plaintiffs were not in possession of the suit land. The other respondents also controverted the allegations contained in the plaint asserting that they are bona fide purchasers for value; that the sale in their favour was valid in law; and that the protection of section 41 of the Transfer of Property Act was also available. It was further averred that the suit was incompetent as the appellants were not in possession and that the appellants have no locus standi to file the suit as the transaction relied upon by them was void ab initio and hence ineffective in law.
3. The learned trial Court after framing the issues and recording the evidence of the parties, dismissed the suit vide judgment and decree, dated 28‑6‑1969. On appeal, the suit was remanded after framing additional issues. The learned trial Court, after trying these issues, again dismissed the suit vide judgment and decree, dated 22‑2‑1972. The first appeal filed by the appellants‑plaintiffs was dismissed by the learned District Judge, Jhang vide judgment and decree, dated 1‑3‑1973. This led to the filing of the present second appeal under section 100, C.P.C.
4. It will be appropriate, at this stage, to point out the reasons given by the learned District Judge for dismissing the appeal of the appellants‑plaintiffs. These are:‑
(i) There is no evidence on record to show that the remaining consideration of Rs.11,000 was paid by the appellants to Muhammad Yaqoob, respondent. Even if it is supposed that the appellants paid Rs.11,000 to respondent No.l, at the time of registration of sale‑deed and they paid Rs.6,000 to Muhammad Siddique (P.W.4), on 5‑4‑1968, it cannot be said that the sale in favour of the appellants was for consideration as substantial portion of the consideration amounting to Rs.11,000 was not paid by the appellants to Muhammad Yaqoob, respondent;
(ii) The payment of Rs.6,000 to Muhammad Siddique is also not proved on record as respondent No.1 was declared owner of the land through Mutations Nos. 2735 and 2737 Exh.P.3 and Exh.P.7 respectively sanctioned on 12‑9‑1967 and Muhammad Siddique was then not mentioned as mortgagee of the land in suit for the reasons that the mortgage in favour of Muhammad Siddique stood extinguished vide Mutations Nos. 2339 and 2340, Exh.P.5 and Exh.P.6. The appellants could not have paid money to Muhammad Siddique on 5‑4‑1968 when about two years earlier :Mutation No.2421 Exh.D.14 regarding sale in his favour had been rejected. The witnesses of payment, namely, Muhammad Siddique (P.W.4), Gehla (P.W.5) and Allah Din (P.W.8) were not relied upon by the learned District Judge; and
(iii) The land has beer allotted in lieu of mortgagor and mortgagee rights and in view of para. 14 of the Rehabilitation Settlement Scheme read with the provisions of section 15 of the Displaced Persons (Land Settlement) Act, 1958, respondent No.l had no authority in 1962 to sell the land to the appellants and the sale was thus void. The plea that in view of the payment of mortgage charges by respondent‑No.l in 1967 and sanctioning of Mutations Nos. 2735 and 2737, dated 12‑9‑1967 the sale in favour of the appellants stood validated retrospectively did not find favour with the learned District Judge and was accordingly repelled.
5. I have heard the learned counsel for the parties and have also gone through the record. Learned counsel for the appellants argued that the plea that sale was without consideration, cannot be raised for the first time in appeal as such a plea was neither raised in the written statement nor any such issue was claimed or framed by the learned trial Court. It was added that except for the statement of the vendor, no evidence whatsoever was produced in this respect .either by the respondents or by the appellants. Next it was argued that para. 14 of the Rehabilitation Settlement Scheme 1956 does not totally ban alienation of the allotted land as the instructions issued at best provide that alienation is to be made after obtaining permission of the concerned officer. It was added that since the alienation can be effected with permission either pre‑facto or post‑facto, the transaction was not void ab initio but was voidable and on receiving the proprietary rights the restriction ceased to apply and the transaction of sale in favour of the appellants was rendered valid and effective in law in view of the principles of equity recognized' in sections 43 and 55 of the Transfer of Property Act and section 18(1)(c) of Specific Relief Act. Learned counsel further argued that the learned appellate Court acted arbitrarily in discarding the evidence of Gehla, Muhammad Siddique and Allah Din P.Ws. and that equity leans heavily in favour of the appellants‑plaintiffs and as such sale in favour of the respondents should not have been upheld.
6. The questions that require consideration in the case are whether the sale in favour of the appellants‑plaintiffs was void ab initio or voidable; and whether in the facts and circumstances of the case the appellants can invoke the equitable principles contained in sections 43 and 55 of the Transfer of Property Act and section 18 of Specific Relief Act. The facts relevant for the purposes of these questions are not in dispute except the assertion that the appellants‑plaintiffs had paid the charges payable on account of the mortgagees to the Settlement Authority and that they had redeemed the land was controverted with the assertion that these charges were paid by Muhammad Yaqoob respondent himself. This assertion, however, does not stand established on record and was rightly not accepted as except for the bald statement of Haq Nawaz plaintiff appearing as P.W.9 to the effect that they had paid Rs.4,000 to Muhammad Yaqoob for payment of mortgage money, no other evidence whatsoever was brought on record. The other relevant facts are that the suit land was allotted to Muhammad Yaqoob, respondent No.l, in lieu of mortgagee and mortgagor's rights held in the land left in India, vide R.L.II Exh.D.13. Muhammad Yaqoob respondent mortgaged the land with possession with Muhammad Siddique vide mortgage deed, dated 12‑9‑1961 and additional charge was created on the land in favour of Muhammad Siddiqu a vide registered deed, dated 25‑9‑1961. Both these mortgages were given effect to in the Revenue record vide mutations Exh.P.5 and EXh.P.6, dated 20‑7‑1962. The appellants‑plaintiffs obtained the land through sale‑deed, dated 1‑11‑1962, Exh.P.2. The mutation respecting the sale was entered but was cancelled on 3‑3‑1966. The mortgages in favour of Muhammad Siddique were extinguished vide order of the Collector, dated 3‑1‑1967 and consequently mutations of redemption Exh.D.9 and Exh.D.10 were sanctioned in the Revenue record on 31‑8‑1967. The Government charges payable by Muhammad Yaqoob allottee in respect of the allotted land were paid on various dates frcm 4‑7‑1966 to 24‑6‑1967 vide documents Exh.D.l to Exh.D.7 and the proprietary rights on account of payment of charges and redemption of land were granted on 12‑9‑1967. These mutations are Exh.P.3 and Exh.P.7. The mutation respecting the oral sale made by Muhammad Yaqoob in favour of respondents Nos. 2 to 4 was sanctioned on 14‑9‑1967 Exh.P.4. The appellant assertedly paid mortgage money to Muhammad Siddique (P.W.4) on 5‑4‑1968 and thereafter filed suit for declaration of title with consequential relief on 26‑4‑1968.
7. In the background of these facts emerging from record, the assertion of the learned counsel for the appellants that the sale of land made in favour of appellants‑plaintiffs was at best voidable but not void and on conferment of proprietary rights on Muhammad Yaqoob, respondent No.l, on 12‑9‑1967, the transaction of sale in favour of the appellants‑plaintiffs became valid and effective in law in view of the principles of equity contained in section 43 of the Transfer of Property Act requires to be examined. Learned counsel candidly conceded that if the prohibition contained in para. 14 of the Rehabilitation Settlement Scheme is treated as absolute and the transaction of sale is held to be void, then the appellants‑plaintiffs cannot claim protection under sections 43 and 55 of the Transfer of Property Act. His case was that para. 14 contemplates seeking of permission which could be pre‑facto or post‑facto and in any case the payment of Government dues on account of mortgages having been made the estate passed to the transferees i.e. the appellants plaintiffs without any further act of transfer and thus the subsequent sale in favour of the respondents was void and ineffective as against the ownership rights in the suit land which came to vest earlier in time in the appellants‑plaintiffs.
8. At this stage reference to the provisions of the Rehabilitation Settlement Scheme 1956 and the instructions issued will be appropriate. The relevant part of para.14, Part I, Chapter II, of the Rehabilitation Settlement Scheme, 1956 reads as under:‑
"(14) The allottees concerned may transfer by sale, exchange, gift, will, mortgage or other private contract their rights or interests in the land allotted to them under the Rehabilitation Settlement Scheme except where‑‑
(a)-------------------------------------------
(b) -------------------------------------------
(c) the land has been allotted in lieu of rights as mortgagor or mortgagee till such time as the allottee concerned has fulfilled the terms and conditions contemplated to be prescribed in regard to such cases.
Provided further that if the allottee‑alienor is subsequently found to have obtained the allotment of land by fraud or by misrepresentation the alienation will be deemed to be void.
(2) Such alienation will only be entered in the cultivation column of the records the implication being that the land will continue to be evacuee property even after alienation.
In this respect paras. 7 and 7‑A of the Scheme are also relevant. Para. 7, inter alla, provides that:‑
"A Muslim mortgagee of both Muslim and non‑Muslim mortgagor of land in the prescribed area will not be eligible for an allotment of land under the Scheme but he may be allotted land on such terms and conditions as the Rehabilitation Commissioner, West Pakistan may prescribe according to the area held by him under the mortgage subject to a maximum of 1,000 produce index units. In case any land allotted to such a mortgagee on the basis of an independent right under the Scheme the land so allotted shall be taken into account for the maximum limit specified above. Similarly a mortgagee of occupancy or other specified rights will be also treated as an ordinary mortgagee for the purposes of the Rehabilitation Scheme."
Para. 7‑A provides the Scheme for final adjustment of allotment made under para.7. Likewise para. 8 provides for the allotment of the land to a Muslim mortgagor of both Muslim and non‑Muslim mortgagees of land. Para.II provides for the redemption of mortgages and attestation of mutation in respect thereof. The Chief Settlement Rehabilitation Commissioner vide Memo. No.2195‑62/3798‑R(L), dated 18‑5‑1962, Exh.D.16 issued instructions regarding disposal of land held by the mortgagees in the rural areas under para.7, Part I, Chapter II of the West Pakistan Rehabilitation Settlement Scheme. Under this memo the mortgagees were given option to purchase the land held by them under the aforesaid para.7 of the Scheme. Clause 7 of these instructions reads as under:‑---
"The intending purchaser shall not without the sanction in writing of Deputy Settlement Commissioner (Land) alienate in any manner any portion of the land so purchased before he has paid the entire purchase price and a mutation conferring proprietary right on him has been sanctioned. Till such a mutation has been duly sanctioned, the Central Government will continue to be shown as an owner and the intending purchaser shall be shown as tenant on payment of land revenue, cesses and other public dues in respect of such land."
It may also be noted that allottees who had obtained allotment in lieu of mortgagee or mortgagor's rights held in the land abandoned in India were allowed to retain the allotted land on payment of prescribed amount and the date fixed for making payment of these charges was extended from time to time by the Chief Settlement Commissioner. D.W.6 Muhammad Siddique clerk in his statement gave details of the instructions issued on various dates extending time for payment of these charges.
9. The aforesaid clause 7 of the memo. dated 18‑5‑1962 Exh. D.16 read with paras. 7 and 14, Chapter II, Part I of the Rehabilitation Settlement Scheme show that the mortgagees obtaining allotment under the said paras held at best the status of an intending purchaser. They cannot claim for themselves the status of even a confirmed allottee as their position was that of tenant paying land revenue, cesses and other public dues. They however, were entitled to exercise option to purchase the land held by them under para.7 of the Scheme. As their position was quite different from a confirmed allottee, they were prohibited to alienate in any manner the land received in allotment except after paying the charges and after obtaining permission from the concerned officer. The prohibition was thus placed with a view to safeguard the public interest. It is well‑established that no equity arises out of transaction which is prohibited by law on account of public policy. The alienation made by Muhammad Yaqoob on 1‑11‑1962 was thus hit by the prohibition and as such was void as the charges payable to Government had neither been paid nor the mutation conferring properietary rights had been sanctioned nor the sanction in writing of the Deputy Settlement Commissioner (Land) to alienate the land in dispute was obtained. The transaction being void, equitable principles contained in sections 43 and 55 of the Transfer of Property Act do not apply.
10. Moreover, Haq Nawaz plaintiff while appearing as P.W.1 stated that it was incorrect that as the defendants could not have sold the land hence their sale transaction had come to an end. They were thus not conceding that the title held by Muhammad Yaqub at the time of sale was defective in any respect. In any case appellants by their conduct treated the sale in their favour as ineffective in law having come to an end, and hence not subsisting. It is in this context that the question of payment of consideration and of fulfilling the other obligation arising under the sale were required to be noticed. The learned first appellate Court on the basis of evidence or. record held that substantial part of the purchase price did not pass hands. Admittedly the mutation respecting sale in favour of appellants was allowed to be cancelled for non‑payment of charges payable to the Settlement Department. The appellants since sale, dated 1‑11‑1962 till cancellation of mutation on 3‑3‑1966 did not discharge the obligation of redeeming the mortgages from Muhammad Siddique. The Government dues were paid and land was got redeemed in 1967 by Muhammad Yaqoob himself and after about 7 months of the sale of suit land in favour of respondent No.2, the appellants‑plaintiffs thought of paying .the mortgage amount to Muhammad Siddique mortgagee. This alleged payment to Muhammad Siddique has not been believed by the learned District Judge. Assuming that the mortgage amount was paid still this payment on 5‑4‑1968 confers no rights as the land stood already redeemed vide order of the Collector, dated 3‑1‑1967 which order had also been given effect to by sanctioning the necessary mutations on 31‑8‑1967. The assertion as to the making of the payment to Muhammad Siddique just before filing of the suit was made in order to equip themselves with the plea that the appellants‑plaintiffs had performed their part of the contract but that was too late in the day. Muhammad Siddique appearing as P.W.4 though acknowledged receipt of Rupees six thousand the mortgage money from the appellants‑plaintiffs yet that acknowledgement is of no benefit to the appellants as the land had already been redeemed and no question of making the payment at that stage could arise. The appellants‑plaintiffs, it is apparent, did not discharge their obligation for years together. Can they now urge that they treated the transaction as subsisting or that the respondents Nos.2 to 4 were not bona fide purchaser for value and that they had notice of the sale transaction of the appellants.
11. Even on the question of possession, the statements of Muhammad Siddique, P.W.4, Gehla, P.W.5, Ibrahim, P.W.6, and Ahmad, P.W.7, cannot be believed. Muhammad Yaqoob had filed criminal proceedings against Muhammad Siddique and his brother alongwith Sardar, the attorney of Muhammad Yaqoob. Gehla in cross‑examination had to admit that his daughter was married to Pehlwan, the brother of Sultan one of the appellants‑plaintiffs. Ibrahim P.W.6 stated that he has been paying Batai firstly to Muhammad Yaqoob, and later to the appellants‑plaintiffs but in cross‑examination he was confronted with his affidavit, dated 4‑5‑1968 wherein he had deposed that he gives share of Batai to Amir Ali etc. the respondents and that he had not till date given Batai to Haq Nawaz and Sultan, appellants‑plaintiffs. These recitals contained in the affidavit were not accepted as correct. He reiterated that about 6 months earlier he had for the first time given share of Batai to the appellants‑plaintiffs. He is a self‑condemned liar. He firstly swore an affidavit suiting the respondents and at the trial made statement in favour of the appellants‑plaintiffs. Ahmad P.W.7 stated that he cultivated land in dispute for two years on lease and thereafter delivered possession to Gehta P.W.5 who was tenant of the appellants‑plaintiffs. Muhammad Siddique P.W. stated that Haq Nawaz had received the possession after paying Rupees six thousand to him. This payment was made according to him on 5‑4‑1968 i.e. twenty days prior to the institution of suit. If this is believed, then the version of Gehla P.W.5 and Ibrahim P.W.6 that they have been paying the share of Batai to the appellants‑plaintiffs as well as the version of Ahmad P.W.7 that Gehla was tenant of the appellants plaintiffs cannot be accepted. The version that the appellants‑plaintiffs were in possession through tenants thus cannot be accepted. The sale in favour of respondents was validly made and these respondents had no notice of any subsisting sale in favour of any other party. They are to be treated in possession as the person whoever may be in physical possession will be treated as tenant of the true owner.
12. For the reasons given above, the learned first appellate Court was right in holding that the transaction of sale vide registered sale‑deed, dated 1‑11‑1962 Exh.P.2 was void and that the provisions of sections 43 and 55 of the Transfer of Property Act were not attracted to the instant case. The judgment and decree, dated 1‑3‑1973 passed by the learned District Judge, Jhang, are hereby upheld and the second appeal is dismissed with costs.
S.Q./H‑50/L Appeal dismissed.