SYED JAMSHED ALI, J. -- This is pre-emptor's second appeal. His suit was decreed by the learned Trial Court on 16.9.1984 but on an appeal having been taken before the learned District Court by the vendee, the judgment and decree was reversed and the suit filed by the appellant was dismissed.
It arises out of the following circumstances.
2. Vide Mutation No. 345 attested on 23.2.1982 (Ex.P-6) the land in dispute was sold by Amanat Ali, respondent No. 2 in favour of Abdul Khaliq, respondent No. 1 for a consideration of Rs. 2,07,000/-.
This was based on the decree of the Civil Court dated 8.2.1982. The appellant preempted the sale on the ground that he was an owner of the estate which qualification was not possessed by respondent No. 1. The vendee, respondent No. 1 and the vendor respondent No. 2 contested the suit on a number of grounds by filing separate written statements. Their main defence was that land measuring 373-1/2 Kanals was purchased by the two respondents with their joint funds on 30.4.1978 (Ex.D-6) through a registered sale-deed executed in favour of respondent No. 2 alone and that to the extent of 1 '2 of the purchased land, respondent No. 2 was only an ostensible owner while respondent No. 1 was the beneficial owner. It was further pleaded that on account of a dispute having arisen between the respondents inter se the matter was referred to an Arbitrator who rendered an award which was made the rule of the Court by the learned Civil Court on 8.2.1 c>82. It was further averred that no sale consideration had actually passed at the time of attestation of the mutation, subject-matter of the instant suit. On the basis of the pleadings of the parties as many as 15 issues were framed.
3. The learned Trial Court while recording findings on Issues Nos. 11 to 13 came to the conclusion that the respondents did not purchase the suit land jointly vide registered sale-deed dated 30.4.1978. It was held that respondent No. 1 had become owner of the suit land on the basis of the award, decree and the mutation. On issue No. 5, it was held that respondent No. 1 was entitled to an amount of Rs. 50,000/- by way of improvements in addition to the sale consideration of Rs.
2,07,000/-. Accordingly, the suit filed by the appellant was decreed vide judgment and decree dated 16.9.1984.
2. Against that RFA No. 134/84 was filed before this Court. However, as a result of enhancement of the pecuniary jurisdiction of the District Court it was transferred to the said Court and the learned Additional District Judge vide order dated 21.1.1987 remanded the case to the learned Trial Court on the basis of his finding that the provisions of Rule 8 of Order XVIH of the Code of Civil Procedure had not been complied with. This time, the appellant approached this Court in FAO No. 148/87 which was dismissed on 14.12.1987, against which his appeal bearing No. 1099/90 was allowed by the Honourable Supreme Court on 9.12.1992 whereby the learned first Appellate Court was directed to decide the case. Pursuant thereto the learned Additional District Judge, Sargodha vide his judgment and decree dated 26.9.1995, dismissed the suit. He came to the conclusion that Mutation No. 345 was not a fresh transaction, half of the land had already been sold to respondent No. 1 on 30.4.1978 and that the transaction in question was not pre-emptible.
3. The learned counsel for the appellant has contended that the appellant not being party to the arbitration proceedings; the award and the rule of the Court was not bound by the transaction of 1978 and, therefore, the transaction vide Mutation No. 345 was pre-emptible. It was further contended that the pre-emptor could not be non-suited on the ground that the transaction of 1978 was a "benami" transaction.
4. On the other hand, the learned counsel for respondent No. 1 has contended that in fact the sale transaction was effected on 30.4.1978 and no consideration had passed at the time of attestation of Mutation No. 345. Therefore, it was not a sale within the contemplation of Section 54 of the Transfer of Property Act. He further contended that under Section 82 of the Trust Act, respondent No. 2 was trustee of the property to the extent of the share of respondent No. 1. Explaining the justification for the joint sale in 1978 his contention was that the two respondents were the co- contractors working abroad and at the time of sale in 1978 respondent No. 1 was in Abu Dhabi.
5. I have considered the submissions made by the learned counsel for the parties and have perused the record. The superior right of the appellant is not disputed by respondent No. 1 nor the appellant has disputed the compensation for improvements. The only question requiring determination is as to whether the transaction attested vide Mutation No. 345 on 23.2.1982 was pre- emptible.
6. The word "Benami" is a Persian compound word made up of two different words namely "be" which means without and "Naam" which denotes name and, therefore, it literally means without a name i.e. Nameless or fictitious and is used to denote transaction which is really done by a person without using his own name but the name of another". However, for all intent and purposes a 'Benamidar' is an owner of the property and his ownership is subject to the over-riding title of the true owner. He can pass title to a third person and if that person had no knowledge of benami nature of his title he acquires a good title even against the real owner. This has so been recognized by Section 41 of the Transfer of Property Act. The title of the ostensible owner remains in tact unless it is so recognized by the ostensible owner either by his own act or on account of the process of adjudication before a competent Court of jurisdiction. In this case, respondent No. 2 continued to be the ostensible owner of the property and only through the decree of the Court based on an award as a result of arbitration proceedings title to 1/2 of the property of respondent No. 1 was recognized and given effect to. This amounted to transfer of ownership by respondent No. 2 in favour of respondent No. 1.
7. I have perused the agreement to refer to arbitration Ex.D-7, the award Ex.D-8, the written statement (Ex.D-9) filed by respondent No. 2 to the application of respondent No. 1 for making the Award the rule of the Court and Ex.D-10 the order dated 8.2.1982 passed by the learned Trial Court.
The award was based on the consent of respondents Nos. 1 and 2, the written statement filed by respondent No. 2 confessed judgment and on the basis thereof the award was made the rule of the Court with the consent of respondent No. 2. These proceedings show that the proceedings of arbitration and the formal order were nothing but an agreement between the respondents super- added to it was the command of the Judge. The effect thereof was that respondent No. 2 was transferring his ostensible ownership in favour of respondent No. 1.
8. It is also an admitted position that the pre-emptor was not party to the Arbitration proceedings, the award rendered and the rule of the Court. He could not, therefore, be bound by said proceedings.
9. Sale has been defined in Section 54 of the Transfer of Property Act as "transfer of ownership for price paid or promised or part paid and part promised". Transfer of ownership in Section 54 to my mind include transfer of benami ownership to the real owner. Therefore, by mutation No. 345 in favour of respondent No. 1 by respondent No. 2 he was transferring his ostensible ownership to the extent of 1/2 share in the property in favour of respondent No. 1 and, therefore, this amounted to sale for the purposes of the pre-emption suit.
10. The emphasis of the learned counsel for respondent No. 1 has been that at the time of attestation of mutation, no consideration had passed on to respondent No. 2 and thus the transaction embodied therein was not a sale. The contention has no merit because according to the version of the respondents themselves, half of the sale consideration was paid to respondent No. 2 by respondent No. 1 at the time of transaction of 1978. According to DW-4, it was respondent No. 2 who had paid a sum of Rs. 4,15,000/- before the Sub-Registrar. Amanat Ali respondent No. 1 appeared as DW-6 and stated that he had paid the sale consideration to the vendors. It is clear from his statement that he purchased the property in his name at best with 1/2 of the funds provided by respondent No. 1. Thus, transfer of 1/2 of the property in the name of respondent No. 1, through arbitration proceedings, was for consideration already received by respondent No. 2 from respondent No. 1. The mutation in question also recites that the transaction was for a consideration of Rs. 2,07,000/-.
11. For what has been stated above, the finding of the learned first Appellate Court that the transaction vide Mutation No. 345 was not preemptible is not sustainable. Accordingly, it is set aside.
12. Resultantly, this appeal is allowed. The judgment and decree of the learned first Appellate Court dated 26.9.1995 is set aside and that of the learned Trial Court is restored. There is no order as to costs.