' RUSTAM S. SIDHWA, J.--- This is an appeal by Mst. Surryia Begum and others, appellants, successors-in-interest of Malik Mubarik Ahmad, deceased, against the judgment of a learned Division Bench of the Lahore High Court dated 13-3-1989, accepting the Regular First Appeal of Mirza Muhammad Iqbal and others, respondents Nos.2 to 5, and dismissing the suit of the appellants.
2. The brief facts of the case are that Mst. Suban Begum, deceased (now represented by Mirza Bashir Ahmad Baig and others, respondents Nos.1(i) to 1(vi), was the owner of property No,SE.26-R- 34, commonly known as 17-Abbot Road, Lahore, which property was transferred to her by the Settlement Department as per PTO No,2389-DSC-1-24 of 14-12-1959. It is alleged that she entered into an agreement with Malik Mubarik Ahmad, the predecessor-ininterest of the present appellants, to sell land measuring 12 kanals out of the said property for a sum of Rs,2,76,000 and received Rs,25,000 as earnest money. The agreement is dated 3-4-1962 and the sale-deed was to be executed and got registered on payment of the balance sale price within six months of obtaining the PTD, by the Vendor. The PTD was issued to Mst. Suban on 21-3-1964 and when she failed to complete the sale, Malik Mubarik Ahmed filed a suit for specific performance against Mst. Suban and the subsequent transferees, Irfan Ahmad and Faizanul Haq, who were originally impleaded as defendants No,2 and 3, in the Civil Court at Lahore, on 30-10-1964.
3. Malik Mubarik Ahmed died on 15-3-1965. The suit was resisted by Irfan Ahmed and Faizanul Haq, defendants No,2 and 3, only, while Mst.Suban having failed to put in her written statement, within time fixed by the Court, was proceeded against ex parte on 27-7-1965. Meanwhile/an application under Order 39, Rules 1 and 2,C.P.C. Was made by the appellants and an injunction order issued to the defendants restraining them from raising construction on the suit land. On 3-5-1965, as per statements of the parties, the Court modified the restraint order on the undertaking given by the defendants that they would raise construction at their own risk and cost and would be bound to give vacant possession to the appellants in case the suit was decreed.
4. On 27-7-1965, the following issues were framed by the Civil Judge on the pleadings of the parties:--
(1) Whether the defendant No,1 was not legally competent to enter into an agreement of sale with Malik Mubarik Ahmad (deceased) the predecessor-in-interest of the plaintiffs? OPD
(2) Whether the agreement of sale entered into between deceased Malik Mubarik Ahmad and defendant No,1 is fictitious and a result of collusion between the two? If so, with what effect? OPD
(3) Whether the defendants No,2 and 3 are bona fide transferees for consideration and without notice? If so, with what effect? OPD
(4) Whether the plaintiffs are entitled to specific performance of agreement of sale dated 3-4- 1962? OPP
(5) Whether the plaintiffs are estoppel by their conduct to file the suit? OPD
(6) Whether the defendant No,2 and defendant No,3 have effected any improvement over the disputed plot? If so, to what extent and with what effect? OPD
(7) Relief.
5. That the suit dragged in the Trial Court and during its pendency Irfan Ahmed, defendant No,2, died on 12-8-1967 and an application for impleadment his legal representatives was moved, but it remained undisposed of due to internal contest amongst the various legal representatives of his.
Subsequently an application for restraining the defendants from alienating the land was moved by the appellants on 16-7-1984. Faizanul Haq and some of the legal representatives of Irfan Ahmed filed reply saying that they had already alienated the property. The legal representatives of Irfan Ahmed were fmally brought on the record by the Trial Court as per its order dated 6-1-1985.
6. The respondents Nos.2 to 5 moved an application under Order 22, Rule 10 of the C.P.C. To be substituted in place of Faizan-ul-Haq and the legal representatives of Irfan Ahmed claiming to have purchased the property pendente lite from them and on the ground that the original defendants Nos.2 and 3 had lost interest in the property in suit. Prior to this a similar application under Order 1, Rule 10, C.P.C. Had also been moved by respondents Nos.2 to 5 which had been dismissed by the Court on 3-24985 on the ground that they being Vendees pendente lite they were not necessary parties. The application under Order 22, Rule 10, C.P.C. Was resisted by the appellants but the Court allowed the application on 19-2-1985, on the concession of Faizan-ul-Haq and the legal representatives of Irfan Ahmed Accordingly the respondents Nos.2 to 5 were brought on the record and they contested the suit thereafter.
7. Evidence in the case had been partly recorded before substitution and the remaining witnesses were examined subsequently.
8. The Trial Court decided all the issues in favour of appellants and decreed the suit on 31-3-1985 holding that the subsequent vendees Irfan Ahmed and Faizan-ul-Haq had not established that they had purchased the suit property for consideration in good faith and without notice and were thus not protected by the exception contained in Section 27(b) of the Specifict Relief Act. Since the appellants had proved their agreement of sale dated 7-4- 1962 with Mst.Suban Begum, they were entitled to the relief of specific performance and Mst.Suban Begum was bound in law to execute and register the sale-deed in favour of the appellants on payment of the balance sale price and in case of default, the Court would execute the sale-deed in favour of the appellants on deposit of the balance sale price in the Court. Mst.Suban Begum, having failed to execute the sale-deed and the balance sale price having been deposited by the appellants in the Court, a regular sale-deed was executed in favour of the appellants by the learned Trial Court on 22-3-1987.
9. Respondents Nos.2 to 5 filed an appeal in the High Court against the judgment and decree of the Trial Court impleading Mst.Suban, who had died during pendency of the suit in the Trial Court as a respondent. During the pendency of the appeal, the legal representatives of Mst.Suban were brought on the record, subject to all just exceptions.
10. Before the High Court the learned counsel for the parties only submitted their arguments regarding issue No,3, which the learned Judges decided in favour of respondents Nos.2 to 5.
Accordingly their appeal was accepted and the suit of the appellants dismissed.
11. Being aggrieved by the above judgment, the appellants have filed the present direct appeal, which is now before us for disposal.
12. On behalf of the appellants it is submitted that the learned Single Judge materially erred in the appraisal of the evidence by holding that the respondents were bona fide transferees for consideration and without notice of the prior agreement. It is further submitted that the fact of absence of notice being within the special knowledge of the respondents, it was for them not only to deny the absence of notice in the pleading, but also to prove in the affirmative that they had no notice of the previous transaction to claim relief in equity. In view of absence of such proof, the High Court had erred in holding that the respondents had discharged the onus which was on them. In this connection the learned counsel relies on Abdul Razzaq Hawaldar v. Sh.Muhammad Shafi (PLD 1962 S.C. 134), Malik Muhammad Ishaq v Mirza Almas Ali Baig (PLD 1969 Lah. 762), Mst. Khairun Nisa v. Malik Muhammad Ishaq (PLD 1972 SC 25), Abdur Rehman v. Noor Muhammad (PLD 1974 BJ.25), Abdul Karim v. Jan Muhammad (PLD 1976 Kar. 640) and Allah Din v. Habib (PLD 1982 S.C. 465). On the basis of these authorities it is contended that the three ingredients of purchase in good faith, for value and without notice of earlier agreement, were not proved. It is urged that the expression "good faith" is not defined in the Specific Relief Act, 1877 and is also not covered by the definition given in section 3 (20) of the General Clauses Act, 1899, because the Specific Relief Act had been enacted prior to the General Clauses Act, and therefore the dictionary meaning would have to be given, which would indicate honesty of intention as the hallmark of that expression. Assuming that the onus of absence of notice had been discharged by the respondents, the ingredient of purchase in good faith has not been proved; rather the facts indicate deliberate abstension from conducting a proper inquiry wiht care as was expected of a businessman of ordinary prudence. It is further urged that certain circumstances taken into consideration by the High Court in respect of events subsequent to the purchase for the purpose of showing absence of notice is a material error in law.
It is contended that the statement of Abdur Rehaman PW5 tending to discredit Abdul Karim PW2 was inadmissible in evidence and no reliance could be placed on that. It is further submitted that the first promisees were not impleaded in the appeal that was preferred before the High Court and that they being necessary parties, the appeal before the High Court was incompetent and should have been dismissed. It is contended that it was not enough for the respondents to have merely impleaded the appellants, but should also have impleaded the first promisees as co-respondents in the appeal, as otherwise a proper decree cannot be passed, for it was necessary for the first promisees to also have been parties to the decree so that the matter could have been effectively decided qua all the disputant parties concerned. In this connection the learned counsel relies on Hakim Ghulam Rasool v. Sh. Imdad Hussain (PLD 1969 Lah. 501), Montazul Karim v. Abul Hussain ( 1970 D.L.C. 211) and Mst. Ghulam Fatima v. Rahim Bakhsh (1988 SCMR 250).
13. On behalf of the respondents Nos.2-5 it is submitted that all the three essential ingredients required to be proved under section 27(b), Exception of the Specific Relief Act were proved. It is urged that in the suit no challenge was made to the subsequent sale deed nor was it suggested that the consideration had not been paid or that the said sale was collusive. The respondents proved through evidence that the consideration had been paid. In the absence of any assertion of collusion with Mst.Suban Begum or absence of consideration, good faith automatically must be presumed. Mst. Suban Begum was available and could have been produced by the appellants, but that they did not do so. In these circumstances, it is contended that all the three ingredients stood satisfied. As regards the legal objection regarding the competency of the appeal, it is submitted that initially when respondents Nos.2- 5 moved an application under Order I, Rule 10, C.P.C. For being impleaded as defendants in the suit, the same was resisted by the appellants, whereupon the same was dismissed. Thereafter the said respondents applied wider Order 22, Rule 10, C.P.C. For substitution in place of Faizanul Haq and the legal representatives of Irfan Ahmad on the ground that they had purchased the property pendente lite from them, which was allowed. It is urged that no objection was taken as regards the competency of the appeal before the High Court and therefore the appellants should be barred from agitating the same now. In any case, it is submitted that even if the decree is to be passed against them, it would be treated as decree in favour of the assignees of the first promisees and the fear expressed by the learned counsel for the appellants is misplaced. In this connection the learned counsel relies on Maung Bathaw v. Ma Saw May (AIR 1942 Ran& 13) and Mst.Muhammadi Begtun v. Dr. H.H. Mirza (1982 CLC 738).
14. Two legal questions arise in this case. First, the legal rule applicable to subsequent transferees to prove their case and second, the question of burden of proof in respect thereof. With regard to the first, it is clear that the transferee has to establish circumstances, which will allow him to retain the benefit of transfer, which prima facie he has no right to retain, and since he is the person who has knowledge of the facts as to whether he has paid the consideration and whether he has notice of the original contract, he has to prove by virtue of section 27(b) that he was (i) transferee for value (ii) who has paid money in good faith and (iii) without notice of the original contract. If any authority is required for this view, Bhup Narain Singh v. Gokul Chand Mahton and others (AIR 1934 P.C. 68), Shankarlal Narayandas Mundade v. The New Mofussil Co. Ltd. And others (AIR 1946 P.C. 97), Varden Seth Ram v. Luckpathy Royjee Lallah (9 Moore's I.A. 307) and Mst.Khairul Nisa's case (supra) may be referred. With regard to the second question, it is not necessary to enter upon a discussion of the question of onus where the whole of the evidence in the case is before the Court and it has no difficulty in arriving at a conclusion in respect thereof. See Muhammad Aslam Khan v. Feroz Khan (AIR 1932 P.C. 228 at 230). But the question of burden of proof may become material where the Court finds evidence so evenly balanced, that it can come to no definite conclusion, in which event the rule is that the party on whom the onus lies must fail. See Mst.Kausar Khatoon v. Abdul Khaliq (PLD 1971 SC 334). Since in civil suits an issue is to be decided by preponderance of evidence, the initial burden would be on the plaintiff to prove his prior contract, which if discharged, the burden of proving the subsequent bona fide transfer for value without notice would be on the party alleging it. Very little evidence and in certain circumstances a mere denial regarding want of knowledge of the earlier contract would discharge this burden and shift the onus on the plaintiff to prove that the subsequent transferee had the notice of the earlier contract. See Ramdeni Singh v Gumani Raut (AIR 1929 Patna 300 at 301) and Mst.Khairul Nisa's case (supra).
15. We may now turn to the evidence. The evidence of Shah Din P.W.1 and Abdul Karim P.W.2 was recorded in Jane and September, 1966 on the issues, the burden of which was on the appellants/plaintiffs. Then, the evidence of Abdur Rehman D.W.1, Saeed Wamak D.W.2, MA. Nomani D.W.3, Faizanul Haq D.W.4 and Abdur Rehman D.W.5 was recorded between January and March 1985 on the issues on which the burden of proof was on the defendants. Thereafter, the evidence of Malik Bashir Ahmad P.W.3, Muhammad Salem P.W.4 and Malik Naseer Ahmad P.W.5 was recorded in rebuttal between March and May 1985. On the question whether Irfan Ahmed and Faizanul Haq had prior notice of the agreement, the only evidence on behalf of the appellants in this connection is that of Abdul Karim P.W.2 who stated that in April 1964 PTD had been issued to Mst. Suban Begum, that Malik Mubarak had sent him to Mst. Suban Begum as the lady had secured the PTD and had asked him about the sale-deed, whereupon the lady had informed him that she had given the land to Irfan Sahib and had executed a sale-deed in favour of defendants 2 and 3 (i.e, Irfan Ahmed and Faizanul Haq). He further stated that on his objeetion, Mst.Subhan Begum had informed him that she had informed defendants 2 and 3 that she had earlier received Rs,25,000 from Malik Mubarak and had executed-an agreement for sale in his favour. This part of the evidence being hearsay has to be rejected. He concluded by stating that he . Informed about this talk to Malik Mubarak. Turning now to the defendants' evidence, Saeed Wamak D.W.2, who is the person who brought about the sale transaction between Mst. Subhan Begum and Irfan Ahmed and Faizanul Haq, inter alia, stated that the disputed land had been allotted to Mst. Subhan Begum, that in 1962-63 the said land was with the Forest Office and the area where Mubarak Cinema stands was then vacant, that the son of the said lady had informed him that she had got the PTD and she wanted to sell the land, that he had discussed this matter with Irfan Ahmad and Faizanul Haq, who had showed their intention to purchase 20 kanals out of the 24 kanals which had been transferred to her, that during that period he had dealings with Malik Mubarak regarding film business, that he had also mentioned about the intention of Mst. Subhan Begum to sell her lands to Malik Mubarak, but at that stage Malik Mubarak showed no interest in the matter, that after Irfan Ahmed had expressed his desire to purchase the land through his request in November, 1963, Irfan Ahmed had secured the PTD in favour of Mst.
Subhan Begum from Ch. Abdur Rashid, that the transaction between Mst. Subhan Begum and Irfan Ahmed had taken place for Rs,3,00,000 and that Mst. Subhan Begum had undertaken to secure vacant possession from the Forest Department and other occupants. Faizanul Haq DW4 in his evidence stated that when he and Irfan Ahmed had agreed to purchase the plot for Rs,3,00,000, at that time the PTD had not been issued, that later they had secured it for Mst. Subhan Begum, that they had secured the sale-deed in April 1964 after paying the balance price and that at the time when they had secured the sale-deed, she had not contracted with any other person for the sale of any part of the area that had been transferred to them. He further stated that when the sale-deed was executed, the Forest Department had its office on the disputed land. He further stated that during the period when they were trying to secure possession of the disputed land and pulling down the old structure, Malik Mubarak was aware of what was happening, that at that time Malik Mubarak used to chat with them, because initially they had put up a board of cold storage on the land, but later had changed their intention to build a cinema and had applied for a cinema licence.
He further stated that at the time when they purchased the land, till then they were not aware of any other contract existing between any person regarding the said area. He also stated that Malik Mubarak had talked with his elder brother that in case they wanted to sell their plot, that they could sell it to him, that till that time Malik Mubarak had not informed them about any agreement in his favour and that his brother had informed him that they had no intention to sell the land. This part of the evidence is hearsay and must be rejected. He also concluded that the registered sale-deed was secured by them after they had paid the full price. In cross-examination he denied that he had any prior knowledge of any agreement in favour of Malik Mubarak, due to which they had forcibly taken possession of the land. Turning to the plaintiffs' evidence in rebuttal, Malik Bashir Ahmad PW3 stated that Irfan Ahmed and Faizanul Haq had purchased the land in 1964. In cross-examination he affirmed that they had so purchased the land in April 1964. Muhammad Saleem PW4 stated that the land under Mahfil Cinema had been purchased by Irfan Ahmed and Faizanul Haq in April 1964, that at that time meetings of the Forest Department used to be held there, and that in November 1964 Irfan Ahmed etc., started demolishing the building because' they had to build a cinema. This completes the evidence regarding whether Irfan Ahmad and Faizanul Haq had or did not have prior notice of the earlier agreement between Mst. Subhan Begum and Malik Mubarak. It is clear that the affirmative evidence of the appllants was nil on the subject. The evidence of the defendants however is clear that up to the date that Irfan Ahmad and Faizanul Haq purchased the property in April, 1964, they had no prior knowledge whatsoever as regards the alleged agreement between Mst. Subhan Begum and Malik Mubarak. The evidence of the plaintiffs in rebuttal does not add anything further to the picture in their favour. There is no question of the word of the plaintiffs being pitted against the word of the defendants. There is much more to the evidence of Faizanul Haq DW4 and Saeed Wamak DW2 than a mere denial of notice of the earlier agreement in favour of Malik Mubarak. In respect of antecedent matters it is clear that Faizanul Haq DW4 and his partner Irfan Ahmad took steps on helhalf of Mst. Subhan Begum to secure her PTD, that thereafter having paid the full price of Rs,3,00,000, to Mst.Subhan Begum, Faizanul Haq and his partner secured the sale-deed in their favour in April 1964, that at that time when the sale-deed was executed, Mst. Subhan Begum had executed no contract with any other person, that at that time the Forest Department and certain other persons were in occupation of the land, that in terms of an internal arrangement Mst. Subhan Begum was to secure vacant possession of the demised land, but she was unable to do so, that thereafter Faizanul Haq DW4 and his partner themselves secured vacant possession and began to take steps to remove the Malba, that at that time Malik Mubarak was aware of what they were doing and had been talking to them and had been informed of their intention to set up a cinema, that at that time Malik Mubarak also did not at all disclose any agreement in his favour regarding the disputed property and that up to date of sale- deed in their favour, they had no knowledge of any other contract subsisting in favour of any other party regarding the disputed land. It cannot be denied that Malik Mubarak had also secured sale- deed for about 12 kanals of land in favour of his wife Mst. Surayya Begum on 25-8-1964, just four months after Faizanul Haq and Irfan Ahmed had secured their sale deed. It is also clear from the evidence that Malik Mubarak had also set up a small hat there. If Mst. Subhan Begum had executed any agreement in his favour on 3-41962, as alleged, he would have brought a suit against Faizanul Haq and Irfan Ahmad to restrain them from entering into possession. Both conduct precedent and subsequent of Malik Mubarak deceased clearly leads to the inference that there was no agreement dated 3-4-1962 executed between him and Mst. Subhan Begum. The evidence also clearly shows that Faizanul Haq and Irfan Ahmad were transferees, that they had paid the money and had no notice of the original contract, and in the absence of any evidence to the contrary, good faith would have to be presumed in their favour. The purchase in good faith thus stands established. The very fact that the transferees took personal interest to secure the PTD for the vendor, shows that they were close to her and acting with care as was expected of businessmen of ordinary prudence.
In these circumstances, we affirm the findings of the learned Judges of the High Court with regard to issue No,3.
16. As regards the objection that since Faizanul Haq and the legal representatives of Irfan Ahmad had not been impleaded in the appeal, the same was not properly constituted and should have been dismissed, as no proper decree could have been passed in their absence, the same cannot be accepted. It is admitted that the present respondents/second vendees did apply for being impleaded as respondents to the suit under Order 1, rule 10, C.P.C., but the said request was opposed by the defendants, whereupon they subsequently applied under Order 22, Rule 10, C.P.C.
For being substituted in place of the first transferees, which application was allowed. The decree having been drawn up against them, they appealed to the High Court without bringing on record the first transferees, as they were not shown as parties in the decree. Since the appellants opposed the request of the respondents/second vendees to be impleaded as co-defendants in the suit and they also did not take up any objection at the appellate stage that the first vendees had not been impleaded as parties in the appeal, they cannot be permitted to raise this objection now. Even otherwise, this objection does not make their appeal incompetent. Under section 52 of the Transfer of Property Act, a transfer of immovable property in suit to which any right is directly or specifically claimed, is not completely prohibited. What is contemplated by this provision is that the property cannot be transferred or otherwise dealt with, without permission of the Court by any party to suit or proceedings so as to affect rights of any other party thereto under any decree or order which might be passed therein. Subject to these reservations, property can be transferred even without permission of the Court, but the transferee or donee or assignee would acquire right thereto or interest therein only subject to the judgment or order of the Court in the suit. See Mst. Zohra Bai v AA. Zubairi (PLD 1988 Kar 58). Order 22, rule 10. C.P.C. Is a residuary rule, which governs cases not provided for by rules 1-9. Rules 10 and 11 of Order 22 C.P.C. Read together indicate that in making rule 10 applicable to appeals, the word "suit" in rule 10 has to be read as including an appeal, that E is to say the word 'suit' has to be read as 'suit or appeal', thus indicating that the appellate Court also has jurisdiction to implead an assignee as a party to the appeal even when the assignment was made in his favour during the pendency of the suit. See Luxmi Narayan v. Babu (AIR 1946 Lah.
33). Order 22, rule 10, C.P.C. Is a permissive provision which enables the assignee to continue the suit in place of the assignor. The assignee need not bring himself on record, if he feels that his interest is being protected by his assignor, in which case the decision for or against his assignor would be binding upon him. See Luxmi Narayan's case (supra) and Nawabazda Shamsher All Khan v Maj.- Gen. Nawabazada Sher All Khan (PLD 1976 Lah 650). The suit in such a case would be treated as continuing for the benefit of the assignee, who can, after the decree is passed, file execution proceedings. See Uchhab Pratta v. Brundaban Malik (AIR 1969 Orissa 142) and Jugalkishara Saraf v. Raw Cotton Co. Ltd. (AIR 1955 S.C. 376). It is only when the assignee feels that his interest is in jeopardy and not likely to be protected by the assignor, that he can apply to become either a party under Order 1, rule 10, C.P.C. (See Ameer Muhammad v Jiwanlal), AIR 1952 M.B. 154), or to be substituted for his assignor under Order 22 rule 10, C.P.C.. In the former case, the decree for or against the assignor would be binding on the assignee, and the assignee would be deemed fully represented through the decree holder (See Banke Behari Lal I v. Raghubar Dayal AIR 1930 All. 380) and in the latter case the decree would be treated as one for or against the assignee, as transferee of the assignor. In both cases, the decree covers the assignor, the first directly and the second impliedly.
' For the above reasons, there is no merit is this appeal which is dismissed, with no order to cost.