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Regular First Appeal No. 125 of 1983, decided on 12th April, 1986.

---S. 21-A--Improvement of status by vendee during pendency of suit- Effect on right of pre-emption--No improvement otherwise than through inheritance or succession made in status of vendee after institution of suit for pre-emption, held, would affect right of pre-emptor in suit.

Hayat Bakhsh v. Mansab Dar Khan A I R 1935 Lah. 529; Jallu v. Shahu I L R 19 Lah. 93; Ali Muhammad v. Muhammad Din A I R 1941 Lah. 444; Muhammad k;huja v. Sher Afzal P L D 1970 Pesh. 136; Muhammad Khan v. Muhammad Sarwar and another P L D 1980 S C (A J & K) 18; Fateh Muhammad v. Rajan Khan P L D 1981 S C 347; Fazal Elahi v. Diwan Ali 1984 S (: M R 1404; Mst. Sant Kaur v. Teja Singh A I R 1946 Lah. 142; Mst. Fateh Bibi v. Ahmad Khan P L D 1971 Lah 171; Arshad Ali v. Abdul R.ashid P L D 1980 Lah. 382 and Mir Ahmad v. Attaullah and others 1981 S C M R 1851 ref.

---S. 21-A--Transfer of Property Act (IV of 1882), S. 52--Lis pendens rule of--Applicability--Rule of lis pendens, held, would be applicable to pre-emption where vendee improves his status after period of limitation otherwise than through inheritance or succession.

Muhammad Khan v. Muhammad Sarwar and others P L D 1980 SC (AJ&K) 18 distinguished.

---S. 4--Right of pre-emption-- Rule of sinker, applicability of Where vendee having equal or superior right of pre-emption associates with himself in joint purchase a stranger, rule of sinker, held, would apply Vendee would lose his right to resist claim of pre-emption based on same qualifications as possessed by vendees by associating with himself in purchase such persons who do not possess such qualifications Appellate jurisdiction was declined in circumstances.

yed Jamshed Ali for Appellants.

Masud Butt and Jariullah Khan for Respondents.

Ghulam Rasool and Ghulam Hazoor appellants alongwith Muhammad Rashid, Abdul Majid and Munir Ahmad son of Barket Ali purchased land measuring 38 Kanals 6 Marlas situated in Chak No. 360/J.B. Tehsil and District Toba Tek Singh from one Mst. Rasool Bibi through her attorney Muhammad Aslam by means of registered sale-deed, dated 31-5-1979 for Rs.50,000. Muhammad Latif, Abdul Majid and Muhammad Anwar respondents instituted a suit on 29-5-1980 to pre-empt the aforementioned sale on the ground that they were owners in the estate and were also co-sharers in the Khata out of which the land was sold and as such possessed a preferential right to purchase the land as against the vendees. They contended that some of the vendees were neither owners in the estate nor were co-sharers in the joint Khata and the other vendees, who possessed the same qualifications as the respondents had lost their right to retain the land in question by associating the aforementioned vendees in the sale. After the institution of the suit Muhammad Rashid, Abdul Majid and Munir Ahmad, who had purchased the suit land alongwith the appellants, transferred their share in the land by means of registered sale-deed,' dated 9-6-1980 to Ghulam Hazoor appellant. The respondent after seeking permission from the learned trial Court filed amended plaint wherein they challenged the sale effected by means of registered sale-deed, dated 9-6-1980 as being fictitious and Benami and contended that the same did not affect their right of pre-emption. The suit was contested by the appellants and co-vendees inter alia on the plea that the respondents were not entitled to pre-empt the sale as the appellants had removed their disqualification by purchasing their co-vendees' share in the land. They also pleaded that they had effected improvements in the land after the sale and as such were entitled to receive the amount incurred by them over the said improvements. According to them the valuation of the suit for purposes of court-fee was not correctly stated by the respondents. From the pleadings of the parties the learned trial Court framed the following issues:-

(1) Whether the plaintiffs have superior right of pre-emption regarding the suit land against defendants O.P.P

(2) What is the effect of the sale of the suit land by defendants Nos.3 to 5 (of their own share) in favour of defendant No.2 made on 9-6-1980 while pending the suit O.P.P.

(3) Whether the suit is properly valued for court-fee, if not, what is the correct valuation of the court-fee

(4) Whether the defendants have made any improvements in the suit land, if so, to what extent and value

2. The learned trial Court discussed issues Nos.l and 2 together and on the basis of evidence placed on file came to the conclusion that the appellants had lost their qualification to retain the suit land by associating the vendees in the sale and that the subsequent sale of the share of co-vendees in favour of Ghulam Hazoor appellant made during the pendency of the suit did not affect the respondents' right of pre-emption and accordingly decided the two issues in favour of the respondents. On issue No.3 the learned trial Court found that the valuation of the suit for purposes of court-fee as based on the statement of annual net profits Exh.P.1 filed by the respondents was correct. Issue No.4 was decided against the appellants and their co-vendees for want of evidence. As a result of these findings the learned trial Court decreed the respondents' suit on 21-7-1983. The judgment and decree of the learned trial Court have been challenged through this regular first appeal filed by the appellants.

3. Learned counsel for the appellants has assailed the findings of learned trial Court under issues Nos.l and 2 and has contended that section 21-A of the Punjab Pre-emption Act is not applicable in the present case because the appellants have not improved their status by purchasing the share of their co-vendees, but they have only removed the disqualification of associating persons in sale, who were not co-sharers in the joint Khata, out of which the hand was sold. In support of his above contention learned counsel has relied on Hayat Bakhsh v. Mansab Dar Khan A I R 1935 Lah. 529; Jallu v. Shahu ILR 19 Lah. 93; Ali Muhammad v. Muhammad Din A I R 1941 Lah. 444; Muhammad Shuja v. Sher Afzal P L D 1970 Pesh. 136; Muhammad Khan v. Muhammad Sarwar and another P L D 1980 S C (AJ & K) 18 and Fateh Muhammad v. Rajan Khan P L D 1981 S C 347. According to the learned counsel for the appellants the rule of lis pendens is not applicable in the present case, as the sale by the co-vendees of the appellant6 was effected in recognition on their preferential right to purchase the land. Learned counsel for the appellants has further contended that the rule of sinker applied by the learned trial Court by holding that the appellants by associating the co-vendees in the sale of the suit land had lost their right to retain the suit land as against the respondents is not based on any statutory provision as has been held by the Supreme Court in Fazal Elahi v. Diwan Ali 1984 S C M R 1404.

4. Although in the memo. of appeal it was stated that the finding of the learned trial Court under issue No.3 was not proper as it was incumbent upon the learned trial Court to determine the correct valuation of the suit for purposes of court-fee notwithstanding the fact that the statement of annual net profits EXh.D.l tendered in evidence by the appellants was not correctly prepared, no arguments were addressed by the learned counsel for the appellants at the time of hearing of the appeal probably for the reason that the learned trial Court had rightly concluded that on the basis of the statement of annual net profits EXh.P.l, which was not open to question, the respondents had correctly determined the value of the suit for purposes of court-fee and had paid proper court-fee on the plaint.

5. Learned counsel for the respondents has supported the finding of the learned trial Court under issues Nos. 1 and 2. He has argued that in view of the provisions of section 21-A of the Punjab Pre-emption Act, 1913 no vendee-defendant in a pre-emption suit can improve his status otherwise than through inheritance or succession after the institution of the suit. He has contended that rule of lis pendens would be attracted even in a pre-emption suit where the suit land is transferred to a person having superior right of pre-emption after the expiry of the period of limitation prescribed for filing of the pre-emption suit. In this connection he has relied on Mst. Sant Kaur v . Teja Singh AIR 1946 Lah. 142, Mst. Fateh Bibi v. Ahmad Khan P L D 1971 Lah. 171 and Arshad Ali v. Abdul Rashid P L D 1980 Lah. 382. According to the learned counsel, the rule of sinker though not based on any statutory provisions is applicable in the Punjab and the view expressed by the Supreme Court in Fazal Elahi's case referred to by the learned counsel for the appellant is being considered in view of the leave granting order passed in Mir Ahmad v. Attaullah and others reported as 1985 SCMR 1851.

6. It is an admitted fact that Muhammad Rashid, Abdul Majid and Munir Ahmad, who had purchased 1/2 share in the suit land alongwith the appellants were not co-sharers in the joint Khata, out of which the suit land was sold and on that account could not successfully resist the claim of superior right of pre-emption of the respondents. There is also no denying the fact that the aforementioned vendees transferred their share in the suit land to Ghulam Hazoor appellant by means of sale-deed, dated 9-6-1980 when the respondents' suit for pre-emption was pending in the Court. The above sale was effected after more than one year of the original sale made by Muhammad Aslam Attorney of Mst. Rasool Bibi in favour of the appellants and their co-vendees. Learned counsel for the appellants contention is that since the appellants possessed the same qualification on the basis of which the respondents had claimed superior right of pre-emption as they were also co-sharers in the joint Khata. Out of which the suit land was sold, the respondents were not entitled to enforce their right of pre-emption against them and the question of any improvement in the status of the appellants. within the meaning of section 11-A of the Punjab Pre-emption Act, therefore, did not arise under the circumstances. By acquiring the share of the co-vendees, who could not successfully resist the respondents claim of pre-emption the appellants had only removed the disqualification, which they had allegedly incurred by associating the co-vendees in the sale. The real issue requiring determination in the present case is whether the appellants, who according to them, had incurred the disqualification by joining strangers in the sale of the suit land have improved their status during the pendency of the suit so as to defeat the respondents claim of pre-emption and whether the removal of the said disqualification does not amount to improvement of status as contemplated by section 21-A of the Punjab Pre-emption Act. To resolve this question it is necessary to examine the cases cited by the learned counsel for the appellant. In Hayat Bukhsh v. Mansab Dar which was followed in Jallu v. Shahu and Ali Muhammad v. Muhammad Din, referred to by the learned counsel for the appellants. It was held a venuee aeienuant having equal right of pre-emption who by associating which himself in the joint purchase a stranger had lost his right of resistence could remove the defect during the pendency of the suit and thereby defeat the pre-emptor's claim because under the law, the pre-emptor was required to retain his superior right of pre-emption till the passing of the decree by the Court in his favour. All these cases, however, were decided when section 21-A of the Punjab Pre-emption Act was not on the statute book. Before the insertion of section 21-A in 1944, there was a difference of opinion as to whether a vendee could improve his position against the pre-emptor during the pendency of the suit. The controversy was set at rest by section 21-A which provides that no improvements otherwise through inheritance or successsion made in the status of vendee/ defendant after the institution of a suit for pre-emption shall affect the right of the pre-emptor in the suit. With the insertion of section 21-A, no distinction is left in the removal of defect in the qualification of a vendee defendant to retain the property purchased by him and the improvement of status made during the pendency of the suit because he can defect the pre-emptor's suit only if he has acquired equal or superior right of pre-emption through inheritance or succession. Removal of defect in his qualification to retain the property purchased by him is no longer recognised under the law.

7. In Muhammad Shuja v. Sher Afzal, the Court had held that pre-emptor's suit could be defeated by the vendee by transferring the property purchased by him to a person having equal or a superior right to that of the pre-emptor during the pendency of the suit. This view, however, is based on the provisions of sections 16 and 17 of the N . -W . F . P . Pre-emption Act, 1950 which are reproduced as under: -

Section 16.-- "No decree for pre-emption shall be passed in favour of any person unless he has a subsisting right of pre-emption at the time of the decree but where a decree for pre-emption has been passed in favour of plaintiff, whether by a Court of first instance or of appeal, the right of such plaintiff shall not be affected by any transfer or loss of his interest occurring after the date of such decree".

Section 17.-- (1) No suit for pre-emption shall lie where the purchaser has, prior to the institution of such suit, transferred the property in dispute to a person, having a right of pre-emption equal or superior to that of the plaintiff.

(2) Any improvement, otherwise than through inheritance or succession, made in the status of a vendee/ defendant after the institution of a suit for pre-emption shall not affect right of the pre- emptor-plaintiff in such suit."

With utmost respect, it is submitted that apart from the fact that the provisions of section 16 could not be considered in isolation and the provisions of subsection (2) of section 17 had also to be kept in view while examining the effect of transfer of the suit land by the vendee during the pendency of the suit, the rule of Us pendens which is attracted even in a pre-emption suit if the subsequent sale by the first vendee has not been effected before the expiry of limitation as has been held in Mst. Sant Kaur v. Teja Singh was not taken notice of while deciding the above case. The next case cited by the learned counsel for the appellants is Muhammad Khan v. Muhammad Sarwar and others P L D 1980 S C (A J & K) 18 wherein it was held that the vendee was legally competent to improve his status during pendency of pre-emption suit so as to destroy right of the pre-emptor. It is not necessary to go into the details of this case in which reference has been made to some earlier decisions of the Lahore High Court given prior to the insertion of section 21-A in the Punjab Pre-emption Act. This case was decided in the light of the provisions of the Right of Prior Purchase Act applicable in the State of Jammu and Kashmir. The view taken in this case has no bearing on the case under appeal as it was observed in paragraph 15 of the judgment that statutory law is different in Azad Jammu and Kashmir from what it is in Punjab and that section 21-A which was added in 1944 in the Punjab Pre-emption Act, 1913 has not been incorporated in the Right of Prior Purchase Act.

8. In the present case, Ghulam Hazoor appellant had purchased the share of his co-vendees on 2-6-1980 when the prescribed period of limitation to exercise the right of pre-emption in respect of the sale, dated 31-5-1979 had expired. The rule of Us pendens contained in section 52 of the Transfer of Property Act would be attracted in view of the Full Bench decision in Mat. Sant Kaur's case. The case of Mst. Fateh Bibi referred to by learned counsel for the respondents, also supports the above view because in that case too the sale of the suit property by the vendee in favour of a person having right of pre-emption superior to that of pre-emptor was effected within the period of limitation and as such the subsequent sale could be considered to have been made in recognition of the superior right of pre-emption of the purchaser. The last case referred to by learned counsel for the appellants is Fateh Muhammad v. Rajan Khan but this case is also not helpful to the appellants because in this case right of improvement in status by vendee was conceded to the extent permissible under section 21-A of the Punjab Pre-emption Act.

9. As regards the rule of sinker, it may be stated that even in the absence of a specific provision in the Punjab Pre-emption Act, 1913 the Courts have been consistently applying this rule in a case where a vendee having an equal or superior right of pre-emption had associated with himself in the joint purchase a stranger because the retention of the property purchased by the vendees in such cases would defeat one of the main objects of the law of pre-emption which is to preserve homogeneous character of the society both in rural and urban areas. There is no doubt that in Fazai Elahi's case, while considering the provisions of section (8)2 of the Punjab Preemption Act, 1913, an observation has been made that in the N.-W.F.P. Pre-emption Act, 1950, section 19 expressly provides that where the purchaser having an equal right of pre-emption associates with himself in the purchase a person with rights inferior to those of the pre-emptor, the purchaser loses in preferential right but there is no corresponding provision in the Punjab Pre-emption Act, 1913. But the question of applicability of the rule of sinker in the Punjab has been specifically raised in the case of Mir Ahmad in which leave to appeal has been granted to the petitioner to examine the above question. Under the circumstances we find it difficult to accept the appellants' contention that the rule of sinker is not applicable in the present case. In our view, the appellants have lost their right to resist the respondent claim of pre-emption based on the same qualification as possessed by the appellants because they had associated with themselves in the joint sale persons who did not possess such qualification.

In view of what has been stated above, there is no force in this appeal which is hereby dismissed with costs.

A. A. Appeal dismissed.

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