SHAFT-UR-REHMAN, J.--Leave to appeal was granted to the defendants to examine whether the agreement executed on 24-12-1970 and registered on 28-12-1970 was violative of the provisions of section 19 of the Colonization of the Government Lands Act, 1912 (hereinafter referred to as the Act) and hence void and incapable of conferring any rights whatsoever on the appellants.
2. Agricultural land measuring 98 kanals 14 marlas situate in Chak No. 45[K-B, Tehsil and District Vehari, was granted to one Mst. Jan, on terms applicable to Islamabed oustees. On her death Allah Ditta and Muhammad Hussain, her sons, succeeded to the grant. On 24-12-1970 the two grantees executed an agreement to sell this land in favour of the appellants, the sale deed to be executed after the grantees-vendors had acquired proprietary rights in the land and not before. The price fixed was Rs. 28,000 of which Rs. 13,500 had already been realised and Rs. 6,500 had to be realized at the time of registration and the balance of Rs. 8,000 was to be paid by the vendees under the agreement to the Government towards the dues for acquisition of proprietary rights in favour of the vendors. It was duly registered at Vehari on 28-12-1970.
3. It appears that the appellants were already in possession of the land as tenants thereof and after the agreement in their favour they claim to be in possession under the agreement though no such recital of handing over of the possession to them under the agreement was recorded.
Anticipating likely dispossession from the land at the instance of the vendors in March, 1974, before the acquisition of proprietary rights in the land by the vendors, they instituted a civil suit claiming a declaration that they were in possession of the land under the agreement to sell, that the aforesaid vendors were not entitled to eject them and an injunction was claimed restraining them from forcibly ejecting them. An ex parte decree was granted to the appellants on 12-12-1974.
4. On 28-7-1975 proprietary rights in the land were conferred on Allah Ditta and Muhammad Hussain, the grantees. On 30-7-1975 by a registered deed they sold this very land in. Favour of plaintiffs-respondents namely, Ata Muhammad, Ahmad Yar and Muhammad Amin. When they sought to get entries made in the revenue record reflecting this sale they found that there was record of the ex parte decree against Allah Ditta and Muhammad Hussain in respect of this very land. In consequence on 15-8-1975 they instituted a civil suit seeking a declaration that on the strength of the registered deed of sale dated 30-7-1975 they had become the owners of the land, they were not bound by the decree of the Civil Court dated 12-12-1974 which was fraudulent, collusive and obtained by misrepresentation and also sought an injunction against the appellants restraining them from interfering with their possession. The suit was resisted by the appellants but not by Allah Ditta and Muhammad Hussain. The following issues were framed on the pleadings of the parties:
(1) Whether the plaintiffs are owners in possession of the suit land O. P. P:
(2) Whether the judgment and decree of Civil Judge, Vehari dated 12-12-1974 is illegal, void and - ineffective against the right of the plaintiffs for the reasons disclosed in para. 7 of the plaint.. O. P. P.
(3) Whether the plaintiffs have no lacus standi.
(4) Whether the suit is not maintainable in the present form. . O. P. P.
(5) Whether the suit is bad for misjoinder of parties and causes of action. O. P. P.
(6) Whether the suit has collusively been filed and the plaintiffs are not entitled to discretionary relief. O. P. P.
(7) Whether-the suit has improperly been valued for purposes of court. Fees. If so what is the real value. O. P. P.
(8) Whether the defendant Nos. 1 and 2 are entitled to special costs under section 35 of C. P. C.
(9) Relief.
The trial Court held that in view of the earlier valid agreement to sell in favour of the appellants, the plaintiffs had not under the sale dead dated 30-7-1975 acquired any right or title and the appellants' interests were protected under section 53-A of the Transfer of Property Act. The ex parte judgment dated 12-12-1974 was held to be legal and valid and binding so far as Allah Ditta and Muhammad Hussain were concerned against whom it was directed. The plaintiffs were found to have no locus stand! as the sale deed in their favour was held to be not conferring any title or interest. The form of the suit was also found to be defective for the reason that the plaintiffs were not in possession and had not sought along with the declaratory relief the possession of the property in dispute. The suit was found not to suffer from misjoinder of parties. There was found to be collusion between Allah Ditta and Muhammad Hussain the vendors and the plaintiffs and for that reason the plaintiffs were held not to be entitled to the discretionary relief. The valuation of the suit was held to be proper and the plaintiffs were not held liable for payment of special costs to the contesting defendants---appellants. On these findings the trial Court dismissed the suit of the plaintiffs.
5. An appeal was preferred to the District Judge who held that anagreement to sell entered into on 24-12-1970 and registered on 28-12-1970 was clearly violative of section 19 of the Act and, therefore, it was void and conferring no rights on the appellants and offered no impediment to the plaintiffs.
As the sale deed in favour of the plaintiffs-respondents was executed at a time when the proprietary rights in the land had been acquired by Allah Ditta and Muhammad Hussain, it was found to be valid and effective. Finding that no other point was urged in the arguments before him the District Judge accepted the appeal, set aside the judgment of the trial Court and granted the declaration to the plaintiffs-respondents that they were owners in possession of the land in suit and the impugned decree dated 12-12-1974 passed by a Civil Judge, Vehari in favour of the appellants-- was a nullity in the eye of law and was ineffective on their rights. As a consequential relief the-injunction sought for was granted.
6. A Civil Revision was filed. The learned Judge in the High Court came to the conclusion that the agreement to sell became effective only on the 28th July, 1975 when proprietary rights in the land were acquired: On this finding it was concluded that the ex parte decree obtained before that date on 12-12-1974 on the basis of such an agreement was a nullity. Without going further into the findings the learned Judge held that "being a revision petition and the decree of the year 1974 having been passed contrary to the provisions of section 19 of the Act, this is not a fit case for exercise of discretion under section 115, C. P. C." The revision petition was, therefore, dismissed.
7. The learned counsel representing the parties are not at variance so far as the strict provisions of law contained in section 119 of the Act is concerned. It is admitted by both that if the agreement of sale has .Got tile effect of transferring a right in praesenti or of creating a charge or encumbrance on the property itself which is the subject-matter of grant but the consequences are postponed to a date after or on acquisition of proprietary rights then section 19 in terms is not violated. The contest however centers round the content and the effect of agreement to sell executed on 24-12- 1970 and registered on 28-12-1970. According to the learned counsel for the appellants there was no transfer of interest under the agreement to sell. There was only an undertaking to transfer interest in the property after acquisition of proprietary rights. In terms therefore neither a charge was created nor an encumbrance and it did not deal with or transfer any interest in property except an undertaking to do so after the proprietary rights had been acquired. The learned counsel for the respondents on the other hand contends that it has been the case of the appellants throughout that they obtained immediately on execution of such an agreement an interest in the land by delivery of possession so much so that they made this agreement of sale a basis for claiming and obtaining an ex parte injunction restraining the respondents from interfering with their possession. Such claim could not consistently be made with what the appellants now contend that there was no interest created in the property itself in the nature of a charge and encumbrance or a liability.
8. The conditions governing the sale of Colony Land by private treaty to Islamabad oustees are contained in two Notifications Nos. 9201-62 3152-S(G)IJ dated 31st July, 1963 and 1714/416-S(G)II dated 17th February, 1965. After payment of the advance an agreement to sell was to be executed and the price was payable in installments .As provided in para. 12 of the notification dated 17-2- 1965. After the full price had been paid a deed of conveyance was to be executed. The grant so made was subject to the general Colony Conditions, 1938 under section 10(2) of the Act so far as they may be applicable thereto.
9. The express words of section 19 of the Act prohibited the transfer or charging of the rights or interests vested in a tenant by any sale, exchange, gift, will, mortgage or any other private contract.
The only exception to this general prohibition was a sub-lease for not more than one year in the case of a tenant who has not acquired a right of occupancy and sever. Years in the case of a tenant who has acquired a right of occupancy. Any transfer made in violation of the prohibition was declared to be void and the Collector had the right to get the intervenor ejected from the land.
10. As in the case before us a sale and an agreement to sell are involved and not any other mode of transfer of interest, it is necessary to enquire into the legal conceptual aspect of sale and a contract of sale. Section 54 of the Transfer of Property Act defines "sale" as "a transfer of ownership in exchange for a price paid or promised or part paid and part promised" The same section defines contract of sale as "a contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties. It does not by itself create any interest in or charge on such property" In the light of the express words of section 19 of the Act what we have to examine and ensure is whether the agreement entered into with the appellants had the effect of transferring or changing by sale any right or interest vested in a tenant under the Act. The document does not, as noted by the 1; arced Judge in the High Court, recite the delivery of possession nor does it imply it. The delivery of possession of the property does not seem to be taken following this contract or a par of the agreement to sell. There was an express promise and reservation made in the deed, and it was quite consistent with the rest of the recital therein that after the proprietary rights had been acquired, q in lieu of consideration adjusted in the manner indicated in the doe the proprietors shall transfer it. The sale itself and the performance o the agreement to sell was delayed to a time after the grantees bad acquired proprietary rights and it did not in praesenti transfer or have the effect of charging or encumbering the rights or interest of the tenants as such. In terms therefore it did not violate the express words of section 19 of the Act nor was it put up as a defence at a time when the tenancy rights were enjoyed by the grantees.
11. The specific legal ground which has been advanced and accepted by the two Courts for declaring this agreement to sell void was considered by this Court, not in the context of section 19 of the Act but in the context of section 4 of the Kabul River Project (Control and Prevention of Specula--tion in Land) Act, 1948, in the case of Abdullah Khan and others v. Nisar Muhammad Khan and others (PLD 1965 SC 690), the relevant observation being as follows :- "The contention of learned co I for the appellants is that whenever ' sale of land is prohibited an agreement for sale without sanction should also be regarded as prohibited on grounds of public policy. We find little force in this contention, 1F there is some condition precedent to the validity of a-transfer it is open to the parties to enter into an agreement subject to compliance with the condition precedent. The attack on the agreement for sale on the ground of public policy could only succeed if it was shown that the intention of the agreement was to defeat a law. If the parties that enter into an agreement for sale contemplate only a sale with the requisite sanction they are not making any effort to defeat the law."
The specific point i.e. Violation of section 19 of the Act came up directly for consideration in Fateh Muhammad v. Muhammad Shaft and another PLD 1953 Lah. 251) and the following observations and reference to decisions are relevant. ---The objection as to section 19 of the Punjab Colonization of Govern--ment Lands Act, though it may not affect the document, which by itself does not purport to transfer any rights in the land, may affect the transaction to which it refers if the transaction took place after Fateh Muhammad had acquired tenancy rights. For the purposes of this case, however, it is not necessary for me to go into the question whether the original agreement between the parties preceded the acquisition of the tenancy and whether it really violates section 19 of the Punjab Colonization of Government Lands Act. The suit relates to ownership of the land. There is no bar to a person agreeing to transfer or to acquire jointly proprietary rights. Agreements which relate to both tenancy and proprietary rights, though they may fall as regards the former, would still be enforceable in respect of the latter.
If authority were needed for such a proposition, it will be found in Nathu v. Allah Ditta AIR 1922 Lah.
287, Hussain Bakhsh v. Sarbuland AIR 1926 Lah. 14 and Hussain Khan v. Jahan Khan 58 P R 1913. In the first mentioned case, the agreement was heldinvalid as regards tenancy rights having been entered into in violation of section 19 of the Punjab Colonization of Government Lands Act, and yet was held valid with respect to proprietary rights."
12. On the facts of the case we are clear that the document was merely an agreement to sell, the specific performance of which was postponed to a date when the grantees had acquired the proprietary rights. Such a reservation in the deed itself showed the awareness of the prohibition, the recognition of its legal effect and an effort on the part of the contracting parties to keep themselves well within the confines of the law and to act in accordance with the requirements of the law. Such an agreement to sell cannot be said to be violative of either the express provisions of section 19 of the Act or of the public policy behind such a statutory provision.
13. The plaintiffs-respondents cannot be considered to be bona fide) purchasers for value without notice. The agreement to sell was registered.) The revenue records showed the possession of the appellants. There was also an indication that they claimed rights other than that of the tenants. B There was a recent civil litigation in respect of it in which ex parte decree had been passed. Even a casual inquiry would have put the plaintiffs---respondents on notice of the claim and interest of the appellants. The trial Court's finding that they are not entitled to protection remains undisturbed.
14. We accept the appeal with costs, set aside the judgment -of the High Court impugned before us and restore the decree of the trial Court dismissing the suit of the plaintiffs-respondents.