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Civil Appeal 60/P of 1982, decided on 15th December, 1985.

(On appeal from the Judgment and Order of Peshawar High Court dated 5‑12‑1979 passed in Civil Revision No. 295 of 1977).

‑‑‑S. 12‑‑Suit for pre‑emption‑ ‑Limitation‑‑Fraudulent concealment of sale from pre‑ emptor‑‑Mortgage executed with object of concealing real transaction of sale‑‑Vendee put in possession in pursuance of mutation of mortgage‑‑Mortgage subsequently declared by Court as transaction of sale‑‑Suit for pre‑emption ‑‑Limitation to commence from date of discovery of real transaction‑‑Mortgage having been executed in favour of respondent with object of concealing fraudulently real transaction of sale from pre‑emptor, suit, held, within time.‑‑[Limitation].

A.Y. Ahmad Ali Sardar v. Nani Bala Mondal P L D 1970 Dacca 37; Mst. Zamrut v. Abdul Wahid P L D 1964 (W.P.) Pesh. 224; Jahana v. Sher Muhammad and others P L D 1961 Lah. 1042 and Ganesh v. Sadiq and another A I R 1937 Lah. 37 ref.

Muhammad Shafiq, Advocate Supreme Court and Nur Ahmad Khan, Advocate‑on‑Record for Appellant.

Abdul Samad Khan, Advocate Supreme Court and Qasim Imam, Advocate‑on‑Record for Respondent No. 1.

Respondent No. 2: Ex parte.

Date of hearing: 15th December, 1985.

‑Facts arising out of this appeal are that Yunus Gul respondent No. 2 brother of the appellant, was occupancy tenant of one‑third share in Khasra No. 8086‑47A‑475 in the area of village Hangu vide Mutation No. 8109, dated 10‑2‑1961 purported to be that of mortgage. Younus Gul transferred the area in favour of Qurban Ali respondent No. 1. On 24‑2‑1969 Qurban Ali brought a suit for declaration to the effect that the transaction vide Mutation No. 8109 was that of sale for Rs.1,500 and that mutation showing it as mortgage for Rs.1,000 has been wrongly effected and that as such, rectification of the revenue record was necessary. Yunus Gul contested the suit and during the proceedings his statement was recorded. He made an offer that if the plaintiff takes an oath on the Holy Quran that he had purchased the land for Rs.1,500 decree be granted to him. The plaintiff promptly accepted the offer and after taking oath, he was granted the decree. In consequence of the mutation in question was changed into that of a sale. Jabir Ali appellant filed a suit for possession by pre‑emption of the land in question on payment of Rs.500. He claimed that the sale has been effected on 25‑9‑1969 and that he being a co‑sharer in that Khata, had a preferential right of pre‑emption against the defendant/ vendee.

2. Respondent Qurban Ali contested the suit which gave rise to as many as 9 issues. On 24‑11‑1970 the then Senior Civil Judge, Kohat granted a decree for possession by pre‑emption of the suit land to the petitioner on payment of Rs.1,500. Qurban Ali respondent preferred an appeal before the District Judge, Kohat which was accepted per order, dated 26‑10‑1974; order of the lower Court was set aside and the case remanded under Order XLI, rule 23, C.P.C. for decision afresh on issues Nos. 1 and 4 i.e. whether the plaintiff has got a superior right of pre‑emption and whether the suit is within time. After remand the learned trial Judge answered issue No. 4 in the negative and dismissed the suit per order, dated 7‑10‑1976.

3. Aggrieved from the aforesaid order, dated 7‑10‑1976 the appellant filed an appeal before the District Judge Kohat who vide his judgment and decree, dated 24‑10‑1977 accepted the appeal and set aside the order of the learned Senior Civil Judge; and granted the plaintiff/ petitioner decree for possession by pre‑emption. Qurban Ali then filed a revision petition in the High Court which resulted in the impugned judgment, dated 5‑12‑1979.

4. Learned counsel's contentions are that Mutation No. 8109 of 16‑2‑1961 was attested as a mutation of mortgage in favour of Qurban Ali, respondent No. 1 and on behalf of Yunus Gul. Respondent No. 2 with regard to the occupancy rights of 1/3rd share in relation to the land in dispute. Subsequently on 24‑2‑1969, Qurban Ali, respondent No. 1, filed a declaratory suit that the transaction vide Mutation No. 8109, dated 16‑2‑1961 was that of sale. Yunus Gul respondent contested the case but it was ultimately decided on oath in favour of Qurban Ali on 25‑2‑1969 and he was granted a decree and as such the transaction of sale is to be considered from 25‑9‑1969 when the matter was settled through a Court decree and on the basis of it the factum of sale becomes known to the appellant. It was further contended that the possession of Qurban Ali respondent over the land in question after the attestation of Mutation No. 8109 till the date of decree in his declaratory suit on 25‑9‑1969 had been that of a mortgagee and mutation was given effect in the subsequent revenue papers as from the date of discovery of the transaction in dispute as that of sale i.e. 25‑9‑1969. Therefore, the suit brought on 18‑6‑1970 would apparently be within time both under section 31 of the Pre‑emption Act and Article 120 of the Limitation Act; and hence, the learned High Court Judge fell into error in setting aside the judgment and decree of the lower appellate Court in exercise of the revisional powers of the High Court; that the learned Judge also misread and misapplied the evidence in the case and the question of law has been erroneously decided, and, therefore, the impugned order is not sustainable.

5. We have considered the submissions made by the learned counsel and find that dealing with the question the learned trial Court held:

"In view of the arguments addressed, the vital question for determination would be when the cause of action to bring the present suit accrued. There can be no doubt that Mutation No. 8109, dated 16‑2‑1961, originally attested, was that of mortgage and as such, the plaintiff could not be presumed to know the 'real' intention clear, section 4 of the N.W.F.P. Pre‑emption Act, 1950, provides that the right of pre‑emption means the right of a person to acquire agricultural land or village immovable property in preference to other persons and that it arises in respect of such land only in the case of 'sales'. Evidently the cause of action to bring the present suit arose when the real intention of the parties to the transaction became known (25‑9‑1969) when the decree was granted in favour of the then plaintiff Qurban Ali" ------The cause of action to the plaintiff in the circumstances accrued on 25‑9‑1969 and applying even section 31 of the Pre‑emption Act the suit would be within time, otherwise I am of the view that Article 120 of the Limitation Act is applicable to the case and the suit shall be undoubtedly within time."

It was further recorded by the learned trial Court that the plaintiff was co‑sharer in the suit land while the vendee except for the sale in question, had no such right, and, therefore, the plaintiff was held to have a superior right of pre‑emption. The learned District Judge agreeing with the observations made by the learned trial Court, affirmed his finding on this vital issue in the case and it was observed in his judgment, dated 24‑10‑1977 that limitation would commence from the date of discovery of the transaction in dispute as that of sale i.e. 25‑9‑1969. The suit brought on 18‑6‑1970 would, therefore, be within time.

6. Learned counsel referred to section 18 of the Limitation Act which reads as follows:‑

"18. Where any person, having a right to institute a suit or make an application has, by means of fraud been kept from the knowledge of such right or of the title on which it is founded, or where any document necessary to establish such right has been fraudulently concealed from him, the time limited for instituting a suit or making an application

(a) against the person guilty of the fraud or accessory thereto, or

(b) against any person claiming through him otherwise than in good faith and for a valuable consideration.

shall be computed from the time when the fraud first became known to the person injuriously affected thereby, or, in the case of the concealed document, when he first had the means of producing it or compelling its production."

In a case where earlier knowledge of petitioners (in possession of land) in respect of sale alleged by opposite parties (auction‑purchasers) was disputed, onus lay on opposite‑parties to prove such knowledge. The petitioners were held, entitled to relief under section 18 A.Y. Ahmad Ali Sardar v. Nani Bala Mondal P L D 1970 Dacca 37. It was held in Mst. 2amrut v. Abdul Wahid P L D 1964 (W.P.) Pesh. 224.

"If, when a land is sold the transaction is fraudulently described as one conferring occupancy rights on the purchaser in order to defeat the rights of pre‑emption and if the person having the right of pre‑emption is not aware of the fraudulent nature of the transaction, the limitation for pre‑emption begins to run from the date on which the fraud comes to the knowledge of the pre‑emptor."

The facts on which allegations of fraudulent concealment was based are (a) the deed is described as a mortgage deed, (b) nobody was aware of the sale of equity of redemption and (c) that the sale in favour of the respondent became known after he was called upon by the Custodian of Evacuee Property to account for the possession of the suit house. Learned counsel for the respondent contended that mere concealment of sale does not imply fraud, and in this connection reliance was placed on Jahana v. Sher Muhammad and others P L D 1961 Lah. 1042. In the aforesaid case the sale‑deed was executed and registered at Lahore although the land was situate in the District of Shahpur. There was also an additional circumstance in that case. The vendors had settled in Lahore. In the circumstances, the Division Bench rightly held that 'mere concealment does not necessarily imply fraud' but at the same time the learned Judges observed 'there must be some evidence to establish affirmatively that the respondent had designed to prevent of discovery of the cause of action from the plaintiff. Learned counsel for the respondent contended that pre‑emption can be defeated by such a device and in the reported case the vendees were anxious to take certain land and in order to defeat the pre‑emptor's right they resorted to the device of exchange. It was held that there was nothing illegal in this device which the law permits.

There is no cavil with this principle. All we would say is that any device which is used in a pre‑emption case should be legitimate and not fraudlent. In the instant case the mortgage was executed in favour of the respondent with the object of concealing the real transaction. The vendee was put in possession in pursuance of the mortgage entered in his favour. The whole object behind the clandestine move was to conceal fraudulently the transaction of sale from the pre emptor. So, it was held in Ganesh v. Sadiq and another A I R 1937 Lah. 37.

In view of the above discussion we would allow this appeal and remand the case to the trial Court for decision afresh .on merits. No order as to costs.

M. I. Appeal allowed.

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