NASIR ASLAM ZAHID, J.-This Petition under Article 199 of the Constitu--petition calls into question the order dated 8-4-1976 of the Member, Federal Land Commission passed in suo motu revision under paragraph 29 of the Land Reforms Regulation 1972 [M. L. R. 115] whereby sale made by respondent No. 5 in favour of the two petitioners has been declared as void.
2. The petitioners by a registered agreement dated 3-6-1971 agreed to purchase agricultural land measuring 73'33 acres situated in Deb. Pabero, Taluka Shahdadpur, District Sangbar from respondent No. 5 for a total consideration of Rs. 1,33,000. The agreement of sale recited that out of the total consideration of Rs. 1,33,000; respondent No. 5 bad already received Rs. 43,000 from the petitioners, another sum of Rs. 19,000 wits to be paid W the petitioners to the seller in the presence of the Registrar at the time of registration of the agreement and the balance of Rs. 71,000 was agreed to be paid by the petitioners to the respondent No. 5 at the time of registration of the sale deed. In the agreement, the respondent No. 5 had undertaken to execute the sale deed before 15- 7-1971. It was further stated in clause 3 of the agreement that possession of the lands in question had been handed over to the petitioners who had accepted the possession. This agreement. Was duly registered with the District Registrar. Sanghar.
3. The Revenue authorities, after receiving the extract of the aforesaid agreement from the Registrar, caused mutations in respect of the said agricultural lands in favour of the petitioners in Dakhil Kharij Register. These entries were made on 21-6-1971.
4. The sale deed, in pursuance of the said agreement and in relation to the aforesaid agricultural lands, was registered with the District Registrar, Sanghar on 31-12-1970. Clause 2 of the sale deed stated that possession of the said lands under sale was already with the petitioners as per written registered agreement and that the said agreement with possession had been registered with the District Registrar.
5. The Land Reforms Regulation 1972 [MLR-115] was promulgated on 11-3-1972 and the main objective of the Land Reforms Regulation, 1972, as specified in its preamble, was to fix a ceiling on individual agricultural land holdings and to distribute the excess lands resumed from land holders, who came within the mischief of land reforms, amongst the harts. Paragraph 8 of this Regulations limited the individual holding to 150 acres of irrigated land or 300 acres of unirrigated land or an area equivalent to 12000 produce index units of land, whichever was greater. Paragraph 7(1) (a) of the Regulation provided that the transfer of any land, and the creation of any right or interest in or encumbrance on any land made in any manner whatsoever in respect of any area, on or before 20-12-1971 by any person holding more than the permitted areas shall be deemed to be void.
Paragraph 7(1) (b, interpretation whereof will decide the question raised in the present petition, reads as follows :- ' "(b) save in cases where the Commission is satisfied that it was a bona fide transaction, the transfer of any land and the creation of any right or interest in or encumberance on any land, made in any manner whatsoever, by any person holding at any time during the period from the first day of March 967, to nineteenth day of December 1971 (both days inclusive) an area equivalent to more than twelve thousand produce index units (calculated on the basis of classification of soil as entered in the Revenue Records for Kharif 1966 and Rabi 1966-67), shall be and shall be deemed always to have been void, and the land so transferred or the land on which the right, interest or encumbrance was so created shall be, and shall be deemed always to have been, owned or possessed, as the case may be, by the person by whom it was owned or possessed immediately before that date Provided that any transfer of land or creation of any right or interest in or encumbrance on any land by way of gift by a person to whom this clause applies shall, subject to the next succeeding proviso, in no case be held by the Commission to be a bona fide transaction Provided further that nothing in this clause shall apply to--
(i) any transfer of land or creation of any right or interest in or encum--brance on any land, by way of gift or otherwise, made by a person in favour of his heir ; or
(ii) any transfer of land or right or interest therein, by way of gift, made by a person in favour of his widowed or unmarried sister, who has not received her due share of inheritance of ancestral land ; or
(iii) any transaction whereby any land was alienated in exchange for an area of land equivalent to the same or substantially same produce index units as the land alienated, and Explanation 1.--For the purposes of this sub-paragraph and paragraph 10 an heir shall mean the owner's wife or wives, sons, daughters, father, mother and sons and daughters of a deceased son or daughter.
Explanation II.-(Deleted by Land Reforms Regulation (Sind Second Amendment) Act, 1972.
Explanation III.-In determining whether a transaction referred to in clause (b) of paragraph (1) was bona fide or otherwise, the Commission shall, among other matters, take into consideration the following factors
(i) Whether adequate consideration has been paid by or on behalf of the person in whose favour the transfer has been made or any right, interest or encumbrance has been created ;
(ii) under whose management the land has remained which is claimed to have been transferred or in respect of which any right, interest or encumbrance has been created ; '(iii) who has been paying the land revenue and other charges in respect of such land ;
(iv) who has been receiving the rent for or batai share from such land."
6. Para. 12 of the 1972 Regulation required declarations to be filed by the affected classes of persons and these included land owners who on 1-3-1967 owned or possessed land in excess of the prescribed maximum of twelve thousand produce index units.
7. Respondent No. 5 filed a declaration under paragraph 1.2 of MLR-115, disclosing his holding on 1- 3-1967 and showing, apart from other alienations, the aforesaid sale made by him in favour of the two petitioners. The case of the respondent No. 5 came up for scrutiny of alienations made by him before the Land Commissioner, Sind who, by an order dated 21-6-1972, came to the conclusion that the sales (including the transaction in favour of the petitioners) were made through registered deeds, consideration passed was reported to be adequate, revenue record mutated accordingly, sales were effected before the crucial date and the alienees were reported to be in effective possession of the land, managing the same and paying the land revenue. He accordingly held the alienations as bona fide and declared them to be not void under para. 7 of the Regulation.
8. Nothing adverse to the petitioners took place for nearly four years when the matter was taken up in suo motu revision by the Member, Federal Land Commission who passed the impugned order dated 8-4-1976 declaring the sale in favour of the petitioners by respondent No. 5 as void and directed the Deputy Land Commissioner, Sangbar to re-calculate the area to be resumed from the declarant. The reasons which led the Member, Federal Land Commission to declare the sale in favour of the petitioners as void, are given in para. 3 of his order dated 8-4-1976 which reads as follows :- "The record shows that the 4 impugned alienations (which include the sale in favour of the petitioners) were made in favour of strangers by registered deeds. However, the sale deeds were not executed until after 20-12-1971. On behalf of the parties, it is conceded that the sale deeds were executed after the crucial date, but it is argued that the transactions were in pursuance of an agreement recorded before the crucial date It is accordingly suggested by them that the transactions of sale may be considered to have taken place before the crucial date. This plea is rejected because the agreement cannot be considered the same as sale. Sales come into force from the date of execution of bale deeds, if they have been registered. As 'the date of execution is after the crucial date, all the 4 alienations are held to be void under M. L. R. 115."
9. The question accordingly, which arises for consideration in the pre--sent petition, is that in case where an agreement of sale is made after 1-3-1967 and before the crucial date, i. e. 20-12-1971, and under the agreement part payment of the consideration has been made and possession has also been delivered to the purchaser, but the registered sale deed is executed on or after 20,-12-1971, whether such a transaction can be treated as a void transaction under para. 7(I) (a) of M. L. R. 115 and the land, subject-matter of the sale agreement, would be treated as part of the holding of the seller for the purposes of M. L. R. 115 ?
10. Mr. Imam A.I Kazi, the learned counsel for the petitioners, has argued that para. 7(1) (b) of the Land Reforms Regulation, 1972 contemplates scrutiny not only of transfers of lands but also transactions which create any right or interest in land made in any manner whatsoever, and even if no sale deed has been executed and registered by a declarant owner but by an agreement of sale, under which possession of lands has been delivered to the purchaser, such transaction, as it would create rights in favour of the purchaser, can be scrutinised and declared to be bona fide.
The learned counsel, in this connection, has relied upon the wordings of this paragraph of the Regulation and also on three judgments.
11. Reliance has been placed firstly on a judgment of the Division Bench of this Court in the case of All Khan v. Additional Chief Settlement Commissioner, Sind and others PLD 1980 Kar.
189. In that case, the declarant owner had acquired from the Government agricultural lands under M. L. Rs. 89 and 91. Some instalments had been paid by the declarant owner and he had still to make payment of the remaining instalments to the Government, when he entered into an agreement with the petitioner for the sale of these lands. The agreement between the parties recited that the declarant had put the petitioner in possession of the lands and that the remaining instalments, which were due and payable by him to the Government, could be paid by the petitioner. The agreement also stated that the land revenue would be paid by the petitioner. The matter came up finally in revision before the Member, Federal Land Commission and the transaction was held to be void and the ground for so holding was that the petitioner was only a purchaser under an agreement and that the sale deed in his favour was not executed until 24-9-1973, much after the crucial date of 20-12- 1971. Its the circum--stances, it was held by the Member, Federal Land Commission that there was no question of validating such a sale under M. L. R.
115. On behalf of the petitioner, in that case, reliance was placed on a decision of the Federal Land Commission appearing at pages 199 and 200 of the Sind Land Reforms Manual, Volume 1, which may be reproduced here; "Subject : Permission of Alienations to the Allottees of Land under M. L. R. 89/91 The matter respecting transfers of land acquired under M. L. R 89/91 was taken up with the Federal Land Commission.
(2) The decision of the Federal Land Commission taken in this regard as conveyed ride their Letter No. F. 7(4) F. L. C. 73, dated 20th August, 1973, is reproduced below 'In cases of 'sale or sale agreement, where the prior permission of the Collector was not obtained, all such transactions are to be reopened and thoroughly scrutinised by the Land Commissioner and if they are found to be genuine, they may be confirmed in spite of the fact, that the permission of the Collector was not obtained. However, gifts made by the grantees of land under M. L. R. 89/91 should be treated as void and all such lands should be resumed immediately and a com--pliance report sent to the Federal Land Commission:
(3) Sind Land Commission has been pleased to decide that the above order of the Federal Land Commission should be complied with."
The Division Bench of this Court while allowing the petition against the order of the Member, Federal Land Commission held as follows :- "In so far as the impugned order of the Federal Land Commission is concerned it may at once be noticed that the finding given by the Land Commissioner, Sind that the transaction was a bona fide transaction ---between the petitioner and Nawab A.I and that it ought to be otherwise confirmed under para. 7 has not been commented upon or departed from. The Member, Federal Land Commission was labouring under a misapprehension that only such transactions could be confirmed or approved under para. 7 which were completed sale transactions and not where the transaction created some rights, interest in favour of the purchaser. Paragraph 7 of M. L. R. 115 envisage approval of transactions which may not be supported by registered sale deed but which may otherwise reflect a transaction creating right, title or interest in a land, which is made further clear by the instructions reproduced above."
12. The second case, on which reliance has been placed by Mr. Imam A.I Kazi, is an unreported judgment dated 21-6-1974 of a Division Bench of the Lahore High Court made in Writ Petition No. 185/74. That was a case of a Government servant who had been granted State agricultural land in District Sukkur and in accordance with the terms of the grant, the Govern--ment servant had obtained possession of the land in the year 1964 on payment of the first instalment. The remaining instalments were still to be paid when he entered into an agreement with the petitioners for the sale of the said land in 1968. In pursuance of one of the terms of the said agreement, the Government servant also executed an irrevocable power of attorney in favour of one of the petitioners. The petitioners occupied the lands in January 1969 and later on developed the same.
On coming into force of the Land Reforms Regulation, 1972, the Government servant, in view of the provisions of para. 10 of the Regulation, filed a declaration giving details of this transaction but taking up the plea that he had transferred his interest in these lands to the petitioners and as such the land was exempt from the operation of para. 10. None of the Land Commission authorities accepted the contention of the Government servant as, in their opinion, the claim for exemption being based merely on an agreement to sell and not the complete sale, it was not a valid claim.
The petitioners challenged the orders of the Land Commission authorities in their writ petition before the Lahore High Court. The petition was allowed and K. M. A. Samdani, J., who wrote the judgment, held as follows; "I am of the view that the Provincial and the Federal Land Commissions have both erred in holding that the Government servant has not yet transferred the land in question to the petitioners and that it is, therefore, hit by the provisions of paragraph 10 of the Martial Law Regulation..
While construing the word `transfer' it was necessary that the purpose and the spirit of the Land Reforms Regulation should have been kept in view. It must be noted that this Regulation has not been enacted to regulate the transfers of immovable property from one party to another.
Therefore, it was wrong to have given that meaning to the expression `transfer' which under the law governing the transfers of pro--perty, it normally carries. The error of Land Commission authorities lies in the fact that they construed the word `transfer' strictly in a manner which would be justified only in a case where the dispute was between the transferor and the transferee. In the present case, it may be noted that there is no conflict between the positions taken by the Government servant, who is the transferor, and the petitioners who are the transferees. It is the Government as a third party that is seeking to hold the transfer invalid in order to resume the bulk of the land in question. In these circumstances, what the Land Commission is to see is whether in effect the transfer is complete even if it is not strictly so under the general law governing the transfers of property. de facto position that counts and not the de jure one except where the validity of the transfer is disputed also by one or the other party to the transfer. Similarly, while interpreting the words `own' and `possess' occurring in paragraph 10 of the Regulation, the Land Commissions should always bear in mind the purposes of the Regulation itself. For, it is only to enforce the provisions of that Regulation that the Commissions have been created and not to settle disputes relating to transfers of pro--perties between the transferors and transferees. In the circumstances, of this case, the transferor has completely gotten rid of the property. "Therefore, he cannot be said either to 'own' or `possess' it within the meaning of paragraph 10 of the Regulation. Since, for the reasons given above, I am of the view that the Federal and Provincial Land Commissions did not put the correct construction on the relevant provisions of the Land Reforms Regulation and the Notification issued by the Punjab Land Commission, I hold that on the basis of that misconstruction, they assumed authority in the matter of resumption of land from the Government servant which did not vest in them.
Consequently, I declare the impugned orders of the Provincial and the Federal Land Commissions to be without lawful authority and of no legal effect."
13. The third ruling, on which reliance was placed by Mr. Imam A.I Kazi, learned counsel for the petitioners, in support of his contention, is the judgment in the case of Muhammad v. Custodian of Evacuee Property PLD 1962 Kar. 3
14. We see no reason to depart from the view of the Division Bench of this Court (of which one of us was a member) in the case of A.I Khan.
The order of the Member, Federal Land Commission, disallowing the transaction in favour of the petitioners only on the ground that the sale-deed had been executed and registered after 20-12- 1971 does not take into considera--petition the spirit and objective of the Land Reforms Regulation and the provisions of para. 7(1) (b) thereof. Para. 7(1) (b) talks not only of transfer of lands but also of transactions creating any right or interest in or encumb--rance on any land in any manner whatsoever by the concerned person. A agreement to sell land in pursuance whereof possession of the land has bee delivered to the purchaser does create same right in favour of the, purchaser in relation to the land, subject-matter of the agreement. On the other hand the only right, which is left in the seller in such a case is the right to claim the balance consideration, and there is an obligation on him to execute a formal sale deed in favour of the purchaser. The legal title may remain in the name of the seller but the beneficial interest in the property passes to the purchaser.
As observed by K. M. A. Samadani, J., Land Commission authorities are required to see whether in effect the transfer is complete even if it is not strictly so under the general law governing the transfers of property. We are in agreement with this view.
15. The Federal Land Commission itself has taken the position that not only complete sales effected through registered instruments are to be scru--tinised and declared bona fide or void but also agreements of sales made during the prescribed period by the affected parties The instructions of the Federal Land Commission at pages 199 and 200 of the Sind Land Reforms, Manual, Volume 1, reproduced above, are clear to the effect that even in a case of sale agreement made by a person in respect of lands acquired by him under M. L. R. 89/91, where prior permission of the Collector had not been obtained, such a transaction could be confirmed if it was found to be genuine. Although these instructions relate to lands acquired under M. L. R. 89/91 but the decision of the Federal Land Commission in this context supports the contention of the petitioners that agreements of sale can also be confirmed under para. 7(1) (b) provided they are otherwise bona fide
16. Here, reference may also be made to section 53-A of the Transfer of Property Act, 1882, which creates valuable rights in favour of a person who is only a holder of an agreement of sale provided the conditions mentioned in the aforesaid section are duly fulfilled. Section 53-A may be reproduced here; 53-A. Part performance.-Where any person contracts to transfer for consideration any immovable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken pos--session of the property or any part thereof, or the transferee, being already in possession, continues in possession, in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then, notwithstanding that the contract, though required to be registered, has not been registered, or, where there is an instrument of transfer that the transfer has not been completed in the manner prescribed thereof by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract; Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof."
17. From the registered agreement dated 3-6-1971 executed by respondent No. 5 in favour of the petitioners, it is apparent that the conditions laid down in section 53-A of the Transfer of Property Act have been fulfilled. Valuable rights were created in favour of the petitioners by the agreement of sale in part performance whereof possession was delivered to the petitioners. Respondent No. 5, in these circumstances, stood debarred from enforcing against the petitioners any right in this property except to claim the balance consideration. While addressing his arguments on section 53-A of the Transfer of Property Act, Mr. Imam A.I Kazi, the learned counsel for the petitioners referred to the case of Muhammad v. Custodian of Evacuee Property. The petitioners in that case had entered into an agreement of sale prior to Partition with the Hindu owner of the property and under the terms of the agreement, after making part payment of the sale consideration, took over possession in pursuance of the agreement. The Hindu owner later died. The petitioners remained in possession of the land but sale deed could not be executed and registered in their favour. The property was declared a hidden evacuee property. While dealing with the rights of the Custodian in this property, Mr. Justice Anwarul Haq (as he then was), who delivered the judgment in the case, held that the only right which the evacuee heirs of the vendor possess in the land in question was the right to receive the balance of the sale price and not the right to dispossess the petitioners and it is only this right that must be deemed to have vested in the Custodian under section 7 of the Act and no more. The petition was disposed of by Mr. Justice Anwarul Haq in the following terms "The position thus clearly emerges that in the present case the right or interest of the evacuee is of a limited nature, and the petitioners have a right to remain on the property as contemplated by section 53-A of the Transfer of Property Act. It seems to us that such an interest in the property is not outside the purview of section 22 of Act XII of 1957, and in fact seems to be included in clause
(b) of subsection (1) of section 22 of the Act. This will become clear from a perusal of the language used in the section itself which may be reproduced here for facility of reference; '22. Claims by interested persons.--(1) Any person claiming any right or interest in any property treated by the Custodian or a Rehabilitation Authority as evacuee property may prefer a claim to the Custodian on the ground that;
(a) the property is not evacuee property, or
(b) his interest in the property has not been affected by- the provisions of this Act: Unfortunately, however, in this case the petitioners made an application in terms of clause (a) only of subsection (i) of section 22 of the Act, praying for a declaration that the land is not evacuee property. In view of the fact that the proprietary title still vested in the heirs of .The Hindu owner such a declaration could trot obviously be granted to the petitioners. There was, however, no bar to a declaration being granted to the petitioners in terms of clause (b) of subsection (1) of section 22 of the Act regarding their right to remain on the property under section 53-A of the Transfer of property Act. A reference to sub--section (3) of section 22 shows that it is in the discretion of the Custodian to allow the application `wholly or in part on such terms and conditions as he thinks fit to impose'.
For all these reasons, we have come to the conclusion that, while no case is made out for our interference by issuing a writ of certiorari to quash the impugned order, there does seem to exist justification for a review of the impugned order by the learned Custodian himself, so as to grant the petitioners the limited declaration contemplated by clause (b) of subsection (1) of section 22 of Act XII of 1957."
The right of the petitioners under section 53-A of the Transfer of Property Act, 1882, was accordingly acknowledged as an 'interest' in property'. The case supports the contention of the learned counsel that the right acquired by his clients under the registered agreement dated 3-6-1971 can be considered as an `interest' in land and the transaction can be confirmed as bona fide under, paragraph 7(1) (b) of the 1972 Regulation.
18. Explanation III to para. 7(1) (b) of the 1972 Regulation also supports the contention of the learned counsel for the petitioners as sub-paragraphs (i) and (ii) of Explanation III also refer to transfers as well as right, interest or encumbrance created.
19. There is yet another reason that not only completed sale transactions duly confirmed by registered deeds can be confirmed under para. 7(1) (b) of the Regulation but also other transactions, which create right or interest in e the land although such transactions may not be complete sales through registered deeds. This sub-paragraph lays down that unless the Commission is satisfied that it was a bona fide transaction, the transfer of any land or creation of any right or interest by the affected person during the prescribed period shall be deemed to be void and the land so transferred or the land on which the right, interest or encumbrance was so created, shall be and shall be deemed always to have been, owned or possessed, as the case may be, by the person by whom it was owned or possessed immediately before that date. According to this provision, therefore, if in respect of any land, any right, interest or encumbrance has been created by a declarant in favour of a third' party and the said transaction is held to be a bona fide transaction by the C Land Commission authorities, the .Said land may not be considered to be part of the holding of the declarant for the purposes of land reforms law. It is, therefore, clear that even if no transfer in the form of a registered sale deed has taken place but the transaction only reflects the creation of any right or interest in land, it is possible for the Land Commission authorities to declare such transaction as bona fide and in such case, the person, who has created such right or interest in favour of another person, may not be treated as the owner of such land for the purpose of determining his holding under the Land Reforms Regulation, 1972.
20. As stated earlier, the Land Commissioner Sind by his order dated 21-6-1972, while dealing with the transaction in question, had held that the consideration passed was reported to be adequate, revenue record had been mutated in favour of the petitioners, the petitioners were reported to be in--effective possession of the land, managing the same and paying the land reve--nue. None of these findings have been challenged by the Land Commission sion authorities and the only ground on which the learned Member, Federal Land Commission declared the transactions as void, was on account of the registration of the sale deed after 20-12-1971. These findings have also not been challenged on behalf of the Land Commission authorities before this Court.
21. The result, therefore, is that the transaction in favour of the petitioners, being a registered agreement of sale dated 3-6-1971 in pursuance whereof possession of the land had been delivered to the petitioners, was rightly approved. By the Sind Land Commissioner, and since there is no valid ground for setting aside his order, the impugned order dated 8-4-1976 of the Member, Federal Land Commission, in so far as it relates to the transaction of 73'33 acres of land in favour of the petitioners, is declared to have been made without lawful authority and to be of no legal effect. The petition is allowed with costs.