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Civil Petition for Special Leave to Appeal No. 81 of 1970, decided on 20th April 1970.
(On appeal from the judgment and order of the High Court of West Pakistan, Lahore, dated the 9th January 1970, in Regular Second Appeal No. 246 of 1964).
------S. 41‑Transfer by osten sible owner‑House put under equitable mortgage by deposit of title deed etc. sold out to a third party‑Suit by mortgagee for recovery of mortgage money by sale of house‑Third party purchaser claiming protection under S. 41, Transfer of Property Act, 1882‑Basis : that entries in revenue papers showed site of house in vendor's ownership and free from encumbrances‑Held : Property being urban immovable property inquiry should not have been confined to examination of revenue papers but should have extended to demand for title deed Purchaser not entitled to protection sought.
S. M. Almas Ali, Advocate Supreme Court instructed by S. Wajid Hussain, Advocate‑ on‑Record for Petitioner.
Nemo for Respondents.
Date of hearing : 20th April 1970.
The petitioner purchased the house in dispute from its owner Sh. Muhammad Bashir who had earlier created an equitable mortgage of the same in favour of the respondent‑Bank by deposit of the title deed of the site of the house and other documents, including the plan of the house sanctioned by the Sargodha Municipality. The mortgage was effected as a security for over‑draft facilities from the Bank by the aforesaid Muhammad Bashir who failed to pay the amount of the over‑draft within time, which amounted to Rs. 7,237 and a suit was brought against him for recovery of that amount by sale of the house in dispute. The petitioner who was impleaded as a party, pleaded protection as a bona fide purchaser under section 41 of the Transfer of Property Act. The first Court and the lower appellate Court upheld her plea, but the High Court has rejected it, leading to this petition for special leave to appeal.
The basis of the plea of bona fide purchase was that the petitioner and her Mukhtar had seen the entries in the revenue papers pertaining to the disputed house which showed that the site of the house was in the ownership of Bashir free from any encumbrance and that this examination of the revenue record was a sufficient inquiry to give to the petitioner protection under section 41 of the Transfer of Property Act. 'The High Court has held that the petitioner should have made further enquiries and asked for title deed of the house from the vendor which would have revealed the real position that the title deed had been deposited with a view to create an equitable mortgage on the house. We agree with the view of the High Court that the plea of bona fide purchase was not placed on a sound footing as the inquiry made by the petitioner about the title of the suit house should not have been merely confined to the examination of the revenue papers. As the property concerned was an urban immovable property, the inquiry should have been extended to a demand for the title deed which would in this case have revealed the real position that the house was subject to an equitable mortgage in favour of the respondent‑Bank.
There is no merit in this petition which is dismissed.
Leave refused.
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