DIN MUHAMMAD vs EIDU
This matter originated as a petition for leave to appeal against a Lahore High Court order dismissing a civil revision. The dispute concerned a land transaction involving 49 Kanals 6 Marlas of land, where the petitioner claimed ownership based on a document he characterized as a mortgage deed with conditional sale, while the respondent contended it was merely a simple mortgage. The core legal question was whether the transaction was valid or vitiated by fraud. The trial court initially decreed the suit in favor of the petitioner, but the appellate court reversed this decision, finding the transaction was a simple mortgage and that fraud had been committed against the respondent. The Supreme Court upheld the lower appellate court's findings, noting that the petitioner's own witnesses failed to support the claim of a settled bargain and that the consideration amount was disproportionately low compared to the property's actual value. The Court held that a contract based on fraud cannot be enforced or upheld, thereby dismissing the petition.
- Can a court enforce a contract that is found to be based on fraud?
- Does a finding of fact regarding fraud by lower courts warrant interference in civil revision?
- Is a transaction involving a significantly undervalued property subject to scrutiny for fraud?
ORDER
1. S. USMAN ALI SHAH, J.---Leave to appeal has been sought by the petitioner against the order of the Lahore High Court, Lahore, dated 15-11-1986, whereby his civil revision was dismissed.
2. Respondent Eidu son of Qadria was owner of the land in dispute measuring 49 Kanals 6 Marlas sitaute in village Audhowali Tehsil and District Gujranwala. On 24-8-1977 he executed a document Exh.P.1 in the name of the petitioner which he terms it to be a mortgage deed with conditional sale of the land in dispute subject-matter of the document in his favour for consideration of Rs.88,000 while the respondent terms it as simple mortgage deed.
3. The plaintiff/petitioner instituted a suit for declaration that he was the owner of the land in dispute and the respondent had no concern thereof. He also prayed for perpetual injunction, restraining the respondent from interference with his possession. The learned trial Judge. Gujranwala after recording evidence on the contesting issues framed on the pleadings of the parties accepted the petitioner's plea and decreed his suit. On appeal before the Additional District Judge by the respondent, the finding of the trial Court was reversed and the suit of the petitioner was dismissed.
4. The learned District Judge vide his judgment; dated 28-10-1986 held that the respondent had effected the mortgage of the land in dispute with the petitioner and nothing more. Being aggrieved, the petitioner filed a civil revision before the Lahore High Court which was dismissed in limine, vide impugned judgment.
5. We have heard the learned counsel for the petitioner and have gone through the findings of the Courts below. It is observed that the parties besides being related to each other are also illiterate and there are the findings of fact of the two Courts below that the fraud was committed on Eidu respondent. The witnesses of the mortgage deed have not supported the case of Din Muhammad petitioner, as according to them no bargain was settled between the parties in their presence. The price of the property at the time of the mortgage is given Rs.1,75,000 which has now increased to 85.3,00,000 according to the statements of the witnesses. Hence, such a valuable property cannot be mortgaged with the sum of Rs.88,000 as mentioned in document which comes to about half of the value of the property in dispute, allegedly mortgaged with the petitioner. As this whole contract was based on fraud and the Courts under the law are not allowed to interfere in a contract based on the fraud. The petition is, accordingly dismissed.