AMEER NAWAB Versus WALI AKBAR
MUHAMMAD SHAFI SIDDIQUI, J.--- This appeal, as of right, has been filed under Article 185(2)(d) of the Constitution of the Islamic Republic of Pakistan, against the judgment dated 23.02.2022 of the Peshawar High Court, Peshawar, whereby the civil revision filed by the respondent was allowed.
2. The facts necessary for adjudication of the present lis are that a suit for pre-emption was filed by the appellant against the respondent in respect of the land measuring 1 kanal , 14 marlas , and 1 sarsai situated at Mauza Baja, Tehsil and District Swabi ( disputed property ). The suit was being adjudicated wherein the respondent moved an application under Order VII Rule 11 of the Code of Civil Procedure, 1908 ( C.P.C. ) on the ground that the appellant had not paid the actual 1/3rd amount of the sale consideration of the disputed property and bank guarantee for the remaining 2/3rd amount of such sale, hence, the plaint was liable to be rejected on account of non-compliance with the requirement of law concerning the deposit of the amount. The said application was allowed vide order dated 14.02.2020 by the Civil Judge-I, Swabi ( Trial Court ) and the plaint of the appellant was rejected. Feeling aggrieved by the said order of the Trial Court, the appellant preferred an appeal before the Additional District Judge-IV, Swabi ( Appellate Court ), which was allowed vide judgment dated 25.03.2021, and the order of the Trial Court was set aside and the suit for pre-emption was restored. Being dissatisfied with the judgment of the Appellate Court, the respondent filed a civil revision before the High Court, which was accepted vide impugned judgment dated 23.02.2022, and the judgment of the Appellate Court was set aside and restored that of the Trial Court, hence this direct civil appeal before this Court.
3. The main thrust of the argument of the learned counsel for the appellant was that the appellant has correctly deposited 1/3rd amount of the sale transaction as mentioned in the mutations in respect of the disputed property and that the learned High Court, while passing the impugned judgment, has ignored this crucial aspect of the matter. It was further contended that the impugned judgment was passed in exercise of revisional jurisdiction under section 115 of the C.P.C., which jurisdiction operates within a distinct and limited legal matrix.
4. On the contrary, the learned counsel representing the respondent has supported the impugned judgment and stated that the judgment of the Trial Court was based on surmises and conjectures.
5. We have heard the learned counsel for the parties and perused the material available on record.
6. The Appellate Court, while considering the case of the appellant/plaintiff, remanded the case to the Trial Court, as substantial evidence had already been recorded in the case. The actual transactional value was disputed by the appellant, as it had two versions, allegedly. Although we are not outrightly impressed with the arguments of the appellant s counsel that the market value of property is much less than recorded as it is the bona fide transactional value that matters most and not any other value, as suggested.
7. Appellant s arguments that the value of the property was disclosed exorbitantly higher than market value is insignificant unless it is shown that it was purposely done to defeat pre-emption and a very heavy burden rests upon the appellant to enforce pre-emption on such plea. One may fetch more value of his property than the prevailing market, and if someone is willing to pay more, why should the seller be deprived of such value? What is important for the Trial Court is to determine whether an exaggerated value is disclosed, which is actually not paid to the vendor or the value disclosed is a true transactional value, i.e., the amount actually paid, irrespective of market value.
8. The Khyber Pakhtunkhwa Pre-emption Act, 1987 ( Pre-emption Act ) regulates the right of a pre-emptor to acquire immovable property in substitution of the vendee, subject to strict statutory conditions. A central issue in pre-emption litigation concerns the price at which such right may be enforced. Contrary to common assumption, the law does not permit a preemptor to claim the property automatically on market or realistic value. Instead, the Act establishes a two-stage mechanism: where the sale consideration is found genuine and fixed in good faith, the pre-emptor must purchase the property at that same price; market value arises only as an exceptional measure where the stated consideration is proved fictitious or mala fide.
9. Under the Pre-emption Act, the right of pre-emption (right to purchase in preference to others) allows a qualified pre-emptor to step into the shoes of the original buyer and purchase immovable property instead of that buyer but only at a specified price. The law controls how that price is determined. Under the Act, the price on which a pre-emptor can enforce his right is not automatically the realistic or market value. The law creates a two-stage rule depending upon whether the sale price mentioned in the transaction is genuine or not.
The Primary Rule is Pre-emption on the Sale Price
10. The starting point in law is the price stated in the sale. If the Court finds that the sale consideration was fixed in good faith or actually paid, then the pre-emptor must purchase the property on that same price. Section 27(2) provides that where the price is genuine, the Court shall fix such price to be paid by the pre-emptor. It means the pre-emptor does not get the property on market value merely because he believes it is lower or higher, he steps into the shoes of the vendee and pays the same lawful consideration.
Exception is Pre-emption on Market Value
11. Only when the Court concludes that the price mentioned in the sale deed was not fixed in good faith (for example, inflated or fictitious to defeat pre-emption) does the law shift to market valuation. Section 27(1) states that if the price was not fixed in good faith, the Court shall determine the market value and that becomes the price payable by the pre-emptor. Therefore, market value of the property is not the default rule, it is a corrective mechanism when the sale price is unreliable.
12. In Zilla Muhammad s 1 this Court ruled that disagreement regarding sale consideration is specifically governed by section 27 of the Khyber Pakhtunkhwa Pre-emption Act, 1987, empowering the Court to determine the price fixed in good faith and decree the suit upon payment thereof. A similar view had already been expressed by this Court in Allah Bakhsh s 2 .
13. In Wasal Khan s 3 this Court clarified that the deposit under section 24 of the Khyber Pakhtunkhwa Pre-emption Act, 1987 is 1/3rd of sale consideration. The Court further criticised the prevailing practice of referring to pre-emption money instead of the statutory term sale consideration, directing lower courts to use correct terminology and to calculate and specify the precise amount required for deposit within a reasonable time.
14. The statutory scheme of the Khyber Pakhtunkhwa Pre-emption Act, 1987 demonstrates that the right of pre-emption is fundamentally anchored to the sale transaction itself rather than to an independent assessment of market value. Sections 24, 27 and 28 collectively establish that the preemptor ordinarily steps into the position of the vendee and must purchase the property on the same consideration where the price is found to be genuine and fixed in good faith. The determination of market value is not the default rule but a limited corrective mechanism, invoked only where the court concludes that the declared consideration is fictitious, inflated, or otherwise mala fide.
15. Judicial interpretation by the Supreme Court has consistently affirmed this principle, emphasising that courts must first examine the bona fides of the sale price before resorting to valuation exercises based on comparable sales or surrounding circumstances. The jurisprudence thus seeks to maintain a balance between protecting the preferential right of the pre-emptor and preserving certainty and fairness in contractual transactions. Accordingly, under the law of Khyber Pakhtunkhwa, a pre-emptor cannot claim property merely on the basis of perceived realistic value; the enforceable price remains the genuine sale consideration unless statutory grounds justify substitution by market value determined through judicial scrutiny.
16. So, when the lawful authority was exercised by the Appellate Court it does not leave any room for the revisional court to form another view. So, the Court has considered the contentions of the parties and noted that not a single ground was available to the revisional court to exercise jurisdiction to reinforce it under section 115 of the C.P.C. There is no suggestion that the impugned judgment is exercise of jurisdiction vested in it when the Appellate Court s jurisdiction was in accordance with law.
17. The Trial Court may frame issue, if deemed necessary by the parties and additional evidence, if any, however, the trial may not take more than three months.
18. With the above observations, this appeal is allowed. The impugned judgment of the High Court is set aside and corrected in the above terms. The matter is remanded back to the Trial Court, however, for the reasons mentioned hereinabove, to proceed with the pre-emption suit keeping in mind the observations given in the preceding paragraph.
19. Above are the reasons for our short order of even date.
MH/A-8/SC Appeal allowed.
1 Zilla Muhammad v. Qamar Ali Khan (2016 SCMR 184).
2 Allah Bakhsh v. Umar (1991 SCMR 1692).
3 Wasal Khan v. Niaz Ali Khan (2016 SCMR 40).