MUHAMMAD HASSAN QURESHI and others Versus MUHAMMAD SHARIF through L.Rs.

1. SAHIB KHAN, J. --- We intend to dispose of both C.F.A. Nos.21 and 22 of 2000, through this single judgment/decree as both the appeals are outcome of single impugned judgment/decree, dated 25-9-2000, passed by Mr. Muhammad Alam Civil Judge 1st Class No.1 Gilgit, in Civil Suit No.46 of 1991, whereby, he passed a preliminary decree for possession of suit property subject to payment of Rs.3,00,000 mortgage amount in favour of respondent/plaintiff against appellants/ defendants.

2. The briefly stated facts of the case are that respondent No.1/plaintiff filed a Civil Suit No.46 of 1991, in the Court of Civil Judge 1st Class Gilgit, for redemption of suit property consisting of 3 Kanals land with two houses bearing Khasra No.1020 located at Hospital Road Majini Mohallah Gilgit, against defendants/appellants, (in both the appeals). In his plaint, the plaintiff averred that the disputed property owned and possessed by him was mortgaged in favour of defendant No.1 through registered deed No.182 dated 10-6-1981, against an amount of Rs.3,00,000, consequently, possession of property was handed over to defendant No. 1. Defendant No. 1 transferred the suit property to defendant No.2 on 12-8-1986 without any notice to plaintiff posing himself to be owner of it for a sum of Rs.3,00,000 through "Iqrar Nama" dated 12-8-1986 and Mutation No.8631. Plaintiff also pointed out that price shown was also less than the prevailing market value of suit property. He further challenged the validity of transaction taken place in between defendants regarding disputed property and sought for cancellation of sale-deed ("Iqarar Nama" unregistered) mutations effected in between parties being without any authority and against facts. The plaintiff seeks the possession of disputed property against the payment of alleged mortgaged amount of Rs.3,00,000 as relief.

3. In their separate written statements, defendants Nos.1 and 2 have contested the suit and raised certain preliminary objections. They mainly pleaded that the transaction in between plaintiff and defendant No.1 was not mortgaged but was sale. However, they stated that condition of purchase within the period of 5 years by the plaintiff was just a concession for him but he could not avail the same and transaction became final after the expiry of stipulated time. On the death of the plaintiff, his legal heirs were brought on record as plaintiffs on 20-11-1993 by the trial Judge. Defendant No.3 was impleaded and arrayed as defendant No.3 in response to the application made by plaintiff on 22-10-1991 but he did not contest the case who was proceeded ex paste later on. The learned trial Judge framed as marry as 14 issues in the light of pleadings of parties. Issues Nos. 1 to 5 pertain to preliminary objections raised by defendants Nos.1 and 2 the learned trial Judge on the conclusion of the trial of case passed preliminary decree as stated above, hence, defendants Nos.1 and 2 have assailed the impugned judgment/decree through separate appeals in hand.

4. We have heard the arguments advanced by the learned counsel .for the parties and have gone through the record of the case in detail and case-laws cited by the learned counsel for the parties.

5. The learned counsel, for the' appellants have jointly argued the case. They submitted that defendant No.1/appellant has purchased the disputed property through registered deed and this deed clearly indicates the nature of transaction. The time for repurchase given to plaintiff was concession which he failed to avail within stipulated time, therefore, sale transaction became absolute and. final. They further submitf6d that defendant No. l has validly transferred the disputed property to defendant No.2 who has developed the property by spending huge amounts and he has further mortgaged the property with defendant No.3. They denied the transaction to be a mortgage and referred the contents of Exh.P.1. They cited case-laws to substantiate their contentions.

6. Counsel for respondent No.1 vehemently opposed the contention made by the learned counsel for appellants. He submitted that the conditions mentioned in Exh.P.1 are enough to determine the nature of transaction, especially the conditions of repurchase and prohibition of improvements over the disputed property for indefinite period by the appellant/defendant No. 1, brings the document within the definition of mortgage as provided under section 58(c) of Transfer of Property Act, 1882. He too cited case-laws in support of his version.

7. Legal representatives of plaintiff' (deceased) in proof and in rebuttal of issues examined Muhammad Ayaz general attorney and produced Ghulam Muhammad as P.W.1 and Exh.P.1 to Exh.P.3 as documentary evidence. Defendant No.2 examined himself along with D.W.1 Amir Hamza and produced Exh.D.1 to Exh.D.15 as documentary evidence. Defendant No.1 filed his contesting written statement on 22-10-1991 and raised eight preliminary objections. He, however, did not opt to examine himself or produce any oral/documentary evidence in support of his version given in written statement.

8. In his statement attorney for the plaintiff, narrated the story of mortgage and this contention was also supported by P.W.1 who is a marginal witness to Exh.P.1. The documentary evidence adduced by the plaintiffs is the copy of decd dated- 2-6-1981, registered on 10-6-1981, Mutation No.8631 attested on 4-9-1986 and Mutation No.8583 attested on 31-7-1986. Through these mutations, the propriety rights of the disputed property have been transferred from plaintiff to defendant No. 1 and further from defendant No.1 to defendant No.2 as sale. Existence of above documents is not in question between the parties here except the nature of transaction:

9. Defendant No.2 examined himself and deposed that the transaction was sale and denied it to be a mortgage. He added that he spent a sum of Rs. 1,70,000 in improvements and besides this he has further mortgaged the suit property with defendant No.3 against a sum of Rs.2,00,000. D.W.2 deposed that he on behalf' of defendant No.2, has improved the property by spending Rs. 1,70,000 as contractor. Defendant No.2 has also produced documentary evidence. Out of all we find Exh.D.1, Exh.D.3 and Exh.D.15 very relevant to determine the factual position of the case, while all others are found to be mutations as produced by plaintiff and reports of revenue field staff receipts showing expenditures on improvements etc. and found immaterial, to determine the controversy of the parties, therefore, no need to discuss here.

10. The plaintiff adduced marginal witness of Exh.P.1. dated 2-6-1981, besides attorney for the plaintiffs. Both have deposed that the transaction was mortgage and negated the contention of sale transaction, this fact needs to be rebutted through evidence. We found nothing in rebuttal or inasmuch as in support of contention made in the written statements filed by defendants Nos.1 and 2, stating the transaction to be a sale except the statement of defendant No.2. The statement of defendant No.2 cannot be relied upon for the reason that defendant No.2 was admittedly neither to party to the transaction and execution of Exh.P.1, nor the said transaction had taken place in his presence, therefore, the value of his statement is no more than hearsay; evidence. Defendant No.1 being the real party to the transaction and execution of the document dated 2-6-1981 (Exh.P.1) did not bother to turn up and utter a single word before the Court or adduced evidence supporting his contentions. His conduct leads to admission of facts given by the plaintiff. As staled above defendant No.1/appellant was legally and morally duty bound to defend the case in interest of institution headed by him. Exh.D.3 is an "Iqrar Nama" executed in favour of defendant No.2 by defendant No. 1, which is unregistered and lacks the requirements of provisions of sections 7 and 54 of Transfer of Property Act along with relevant provisions of Registration Act and stamp Act. Exh.D.15 is found to be a registered deed. Through this decd (deceased) plaintiff has allegedly mortgaged a piece of land with defendant No.1 against the amount of Rs.2,94,400 loan payable by one Muhammad Nawar son of (deceased) plaintiff to defendant No.1. the; contents of the document transpire that although loan was outstanding on Muhammad Nawaz but the land and shops of the plaintiff (deceased) have been mortgaged with defendant No.1 for nothing. On our query, the learned counsel for defendant No.1 stated that the (deceased) plaintiff was guarantor of the loanee, therefore, his property was mortgaged with defendant No.1 but nothing supporting to this contention on the record, so ultimate reflection of this document is that there was relationship of debtor and creditor in between plaintiff and defendant No. l directly or indirectly.

11. It is also admitted fact that the value of the disputed property was fixed Rs.3,00,000 in the year 1981, but it was sold out again in 1986 in favour of defendant No.2 at the same price. No one can presume that the value of the houses including urban lands situated at Hospital Road Gilgit remains the same for 5/6 years, so much so, the escalation/devaluation did not affect the value of property. Keeping in view the factual position of the case we felt it to take into consideration whether defendant No.1 having normal business routine/object to purchase lands and sold it out under the relevant provisions of bylaws of the Karakurum Cooperative Bank Limited but we could not find out such provision in the said bylaws. It is obviously necessary to determine the legal status/nature of transaction in the light of relevant provision of Transfer of Property Act, 1882 (IV of 1882).

12. It is crystal clear that in Exh.P.1. the words of "sale-deed" and words of "sale" have been used so frequently than its need purposedly or otherwise but in the meantime, two important conditions contained in the document are:---

13. In the light of above conditions, the single point for determination is whether in the presence of above two conditions this document can be considered and treated as "sale-deed"'? We therefore, just for own convenience reproduce relevant provisions of Transfer of Properly Act, 1882 (IV of 1882).

14. Section 54. " Sale Defined ".--- "Sale" is a transfer of ownership in exchange for a price paid or promised or part paid and part promised.

15. Contract for sale .--- A contract for the sale of immovable property is a contract that a sale of such property shall take on terms settled between the parties. It does not, of itself create any interest in or charge on such property.

16. Section 58

(c) Mortgage by conditional sale. Where the mortgagor ostensibly sells the mortgaged property:

17. On the condition that on default of payment or the mortgage money on a certain date the sale shall become absolute; or

18. On condition that on such payment being made the sale shall become void; or on condition that on such payment being made the buyer shall transfer the property to the seller;

19. The transaction is called a mortgage by conditional sale and the mortgage a mortgagee by conditional sale :

20. Provided that no such transaction shall be deemed to be a mortgage, unless, the condition is embodied in the document which effects or purports to affect the sale.

21. Section 54 of the Transfer of Property Act, 1882, defines a "sale" and a "contract' for sale. The clauses of agreement of sale (Exh.P.1) if read together make it abundantly clear that it did not pass a valid title to the appellant (in C.F.A. No.22 of 2000) as required by section 54 Part (1). So far second pact of this section is concerned, under the law such a person gets only a right to compel the other party to execute a sale-deed in respect of the property and unless and until such a sale-decd is actually brought into existence by the act of the parties or under a decree of a Court, the party who has entered into such contract cannot be said to have acquired an ownership over the property. Thus, taking into the consideration agreement Exh.P.1 in the light of foregoing legal and factual background, we are of the opinion that Exh.P.1 cannot be treated as an absolute transaction of sale, as has been tried to be but it is an agreement "mortgage by conditional sale" provided under section 58(c) of Transfer of Property Act, 1882. Thus, we unanimously feel and observe that:--

22. The clause of conditional sale is contained in the varied document by which the mortgage is created. It is a clog on the equity of redemption and repugnant to law and therefore, declared void. On the basis of factual, legal and also views taken in series of case-laws by the august Courts in Pakistan, especially the case-laws referred below:--

(i) PLD 1971 Lah. page 77, (ii) PLD 1959 (AJ&K) page 73, (iii) PLD 1971 Pesh. Page 28 and (iv) PLD 1983 SC (AJ&K) page 63.

23. Coming to the case of appellant (Muhammad Hassan Qureshi), we feel it that he steps into the shoes of General Manager Provincial Cooperative Bank (appellant). Since we have come to the conclusion that the later had no title or ownership over the disputed property therefore, the consequent transactions are ab inito void, therefore, the appellant (Muhammad Hassan Qureshi) stands nowhere, however, he can claim appellant (The Provincial Cooperative Bank Limited Gilgit), if he is so advised.

24. It would be pertinent to point out that appellant/defendant No.1 being a registered Cooperative Society, is functioning under the bylaws of the said Society and laws of the land, the Chairman should take notice of it and other identical cases in the best interests of the share-holders and account-holders of the Provincial Cooperative Bank (The Karakuratn Cooperative Bank Limited).

25. We have taken into the consideration the impugned judgment dated 25-9-2000 and found to be justified in all respects and uphuld. Both the appeals arc dismissed. However, the decree- holders will be entitled for the costs throughout. The Registrar of this Court is directed to send a copy of this judgment to the Chief Secretary/Chairman, the Karakuram Cooperative Bank Limited Gilgit for information.

26. F.B./3/Glt. Appeals dismissed.