Dunya Gul & another Vs Niaz Muhammad & 02 others

JUDGMENT SHEET

PESHAWAR HIGH COURT, PESHAWAR

JUDICIAL DEPARTMENT

RFA No.99-P/2024

Dunya Gul & another Vs. Niaz Muhammad & 02 others.

Date of hearing 26.03.2026.

Mr. Abdul Sattar Khan, Advocate, for the appellants.

Mr. Naveed Maqsood Sethi, Advocate, for the respondent No.1.

JUDGMENT

MUHAMMAD NAEEM ANWAR, J: - Niaz Muhammad, respondent No.1, initially instituted Civil Suit No.99/1 on 06.10.2015 against respondent No.2 and the present appellants, seeking a decree for declaration to the effect that he is the lawful owner of property measuring 312 Marla, situated at Hazar Khawni, Tehsil and District Peshawar, as fully described in Headnote-I of the plaint. He further sought a declaration that the alleged transfer of the suit property through an agreement to sell dated 10.01.2014, purportedly supported by issuance of cheques which were subsequently dishonoured, and the consequent attestation of Mutations Nos. 33303 and 33304 dated 28.05.2014, were the result of fraud, misrepresentation, and absence of lawful consideration; hence, the same were illegal, void, and ineffective upon his proprietary rights, liable to cancellation, with consequential correction of the revenue record in his favour. In addition, thereto, he prayed for a decree of permanent injunction restraining the appellants from alienating, encumbering, or otherwise creating third-party interests in the suit property, along with recovery of possession thereof from the appellants. In the alternative, he sought recovery of the unpaid balance of sale consideration. It was averred in the plaint that an agreement had initially been executed between respondent No.1 and respondent No.2, whereby certain terms and conditions were settled under which respondent No.2 undertook to pay the entire sale

consideration, and reciprocally, the property was to be transferred in his favour or in favour of any nominee designated by him. According to the plaintiff, he received an amount of Rs.3,00,00,000/-, whereas the remaining sale consideration was never paid. The mutations were attested merely on the assurance of respondent No.2 regarding payment of the balance amount, but he failed to honour his contractual obligation. Consequently, the alienation of the property in favour of the appellants, founded upon the said agreement and mutations, was alleged to be the product of fraud and want of lawful consideration, rendering the transaction voidable at the instance of the plaintiff.

2.The suit was contested by defendant No.1 (respondent No.2), who admitted his inability to make the remaining payment of sale consideration and claimed entitlement to recovery of the amount already paid to respondent No.1. He categorically denied any transfer of the property in favour of the appellants at his instance or under his authority. The appellants filed a joint written statement, asserting that the property had been sold to them directly by respondent No.1 against valid consideration and that the mutations dated 28.05.2014 had been lawfully attested in their favour. The remaining contents of the plaint were emphatically denied, and dismissal of the suit was sought. During the pendency of proceedings, the suit was transferred to the Court of the learned District Judge on account of lack of pecuniary jurisdiction. The plaintiff/respondent No.1 closed his evidence on 17.04.2019, whereafter the appellants were directed to lead their evidence. However, despite being afforded as many as forty-three (43) opportunities between 10.03.2021 and 08.04.2023, they failed to produce any evidence in support of their defence. Consequently, their right to produce evidence was struck off by the learned trial court. The said order was assailed before this Court through an appeal, which was dismissed on 08.04.2023, and thereafter, Civil Petition No.920-P/2023 was also dismissed

by the Hon’ble Supreme Court on 16.01.2024, thereby attaining finality. Upon conclusion of trial, the learned District Judge, after hearing the parties and evaluating the material available on record, decreed the suit in favour of respondent No.1 and directed cancellation of the agreements dated 10.01.2014 and 10.03.2015, as well as cancellation of Mutations Nos. 33303 and 33304 dated 28.05.2014. The plaintiff/respondent No.1 was further declared entitled to recovery of possession of the suit property. The appellants were held not entitled to claim any compensation for improvements or construction allegedly raised during the pendency of litigation, the same having been undertaken at their own risk and peril. The learned trial court further directed respondent No.1 to refund the amount of Rs.3,00,00,000/- to defendant No.1 within a period of thirty (30) days by depositing the same in Court, failing which he would be liable to pay additional markup at the rate of 15% per annum on the said amount until its realization. Being aggrieved by the said judgment and decree, the appellants have preferred the instant appeal.

3.Mr. Abdul Sattar Khan, Advocate, learned counsel for the appellants, contended that the execution of the agreement dated 10.01.2014 is an admitted fact, and the terms embodied therein, particularly those contained in document Ex.PW-10/2, clearly stipulate that the property was to be transferred either in favour of respondent No.2 or any nominee nominated by him. He further argued that the attestation of mutations, the personal appearance of the plaintiff before the Tehsildar/Revenue Officer, acknowledgement of receipt of Rs.3,00,00,000/-, delivery of possession at the spot, and existence of a multi storey structure on the property collectively demonstrate the bona fide nature of the transaction. Learned counsel maintained that despite dishonour of certain cheques, the plaintiff subsequently entered into a fresh agreement with defendant No.1 and even recorded a statement before the competent Court resulting in acquittal of defendant No.1 in

criminal proceedings, thereby evidencing settlement of disputes between them. He vehemently argued that the suit for declaration was not maintainable in the facts and circumstances of the case and that the plaintiff was estopped, by his own conduct and acquiescence, from challenging the transaction. It was further contended that the appellants are bona fide purchasers for value without notice, whose rights stand protected under settled law, as enunciated by the Hon’ble Supreme Court in the case of Muhammad Afzal Vs. Matloob Hussain & others (PLD 2006 SC 84). When confronted with the inconsistency between the defence taken in the written statement, asserting an independent sale directly from the plaintiff, and the admitted striking off of their right to produce evidence, learned counsel argued that even in the absence of defence evidence, the admitted factum of attestation of mutations and transfer of property in favour of the appellants was sufficient to protect their proprietary rights. He submitted that the decree passed against the appellants, without affirmative proof of fraud attributable to them, is legally unsustainable.

4.Mr. Naveed Maqsood Sethi, Advocate, learned counsel for respondent No.1, controverted the submissions of the appellants and contended that the documentary evidence on record, including the initial agreement, the subsequent deed dated 09.02.2021, and the mutations Ex.PW-10/1 and Ex.PW- 10/2, read in conjunction with payment records of taxes reflected therein, conclusively establish that the alleged consideration was never fully paid. He emphasized that the documentary evidence Ex.PA, as well as the statement recorded before the learned Judicial Magistrate, Mardan, on 09.02.2021 (Ex. DW-1/1-X), unequivocally demonstrates that no payment of sale consideration was made beyond the admitted amount of Rs.3,00,00,000/- out of the total agreed consideration of Rs.12,48,00,000/-. Learned counsel further argued that the appellants, despite being afforded repeated opportunities, failed to produce any evidence to substantiate

payment of consideration or to rebut the plaintiff’s case. Even during cross-examination of PW-9, it emerged that the mutations had been attested on the basis of cheques which were subsequently dishonoured, thereby undermining the very foundation of the transaction. He submitted that the learned trial court correctly appreciated the evidence and applied settled principles of law governing cancellation of fraudulent transactions and recovery of possession. Reliance was placed upon the judgments reported as Taj Wali Khan Vs. Hukam Khan (deceased) through L.Rs. (2025 SCMR 231) and Mrs. Shahina Shahid Vs. Messrs Qumran Construction (Pvt.) Ltd & another (2024 CLC 914), and it was earnestly requested that the instant appeal be dismissed with costs, being devoid of merit and substance.

5.Though, according to the cause list, only the civil miscellaneous application was fixed for arguments for today, yet learned counsel for both the parties appeared and addressed arguments on the main petition as well. With the consent of the learned counsel for the parties, the main civil revision was taken up for hearing, and with their valuable assistance, the record of the case was carefully perused.

6.Scrutiny of the record reveals that the suit instituted by the plaintiff/respondent No.1 was essentially one for declaration of his ownership rights in respect of the suit property, wherein he challenged not only the agreement to sell executed with defendant No.1 but also the subsequent transfer of the property in favour of defendants Nos.2 and 3 (the present appellants) on the ground of non-payment of the agreed sale consideration. It is an admitted position on record that the plaintiff/respondent No.1 had entered into an agreement to sell the suit property with defendant No.1 at the rate of Rs.4,00,000/- per Marla, whereby the total sale consideration for the property measuring 312 Marla was settled at Rs.12,48,00,000/-, vide agreement dated 10.01.2014. While acknowledging the execution of the said agreement, the plaintiff asserted that the obligations arising

therefrom were not fulfilled by defendant No.1, inasmuch as the agreed consideration was not paid in accordance with the stipulated terms and conditions, and that the subsequent transfer of the property, allegedly effected at the direction of defendant No.1 in favour of defendants Nos.2 and 3 (the appellants), was without lawful consideration and, therefore, liable to cancellation in the eye of law. The plaintiff/respondent No.1 further alleged that defendant No.1 had issued four cheques, namely: Cheque No. 8993962 dated 15.05.2014 for an amount of Rs.2,50,00,000/-, Cheque No. 8993964 dated 15.05.2014 for an amount of Rs.3,00,00,000/-, Cheque No. 8993965 dated 15.08.2014 for an amount of Rs.2,00,00,000/-, and Cheque No. 8993966 dated 10.01.2015 for an amount of Rs.1,98,00,000/-; however, according to the plaintiff, except for the receipt of a sum of Rs.3,00,00,000/-, no further payment was ever made to him. Consequently, it was pleaded that the essential terms and conditions of the agreement, exhibited as Ex.PW-10/2, remained unfulfilled, thereby rendering the transaction incomplete and legally unenforceable. It was also specifically alleged that, at the instance and direction of defendant No.1, Mutations Nos. 33303 and 33304 were entered and subsequently attested in favour of the appellants, without lawful discharge of the consideration, thus vitiating the transaction and making the said mutations amenable to cancellation.

7.It is by now a well-settled proposition of law that mutation in the revenue record neither creates nor extinguishes title, nor does it confer any proprietary rights in favour of a party, unless the same is founded upon a valid and lawful transaction supported by consideration. The entries in the revenue record are primarily maintained for fiscal purposes and cannot, by themselves, constitute proof of ownership in the absence of independent and reliable evidence establishing the legality of the underlying transaction. Therefore, mere attestation of mutations in favour of the appellants, without

proof of payment of consideration, cannot be construed as conferring any lawful title upon them. In the present case, the very foundation of the appellants’ claims rests upon the alleged transfer of property in their favour; however, the essential ingredient of such transfer, namely payment of lawful consideration, has remained wholly unsubstantiated. The appellants, despite being afforded repeated and ample opportunities, failed to produce any documentary or oral evidence to demonstrate that the consideration reflected in the mutations was ever paid to the plaintiff. In these circumstances, an adverse inference, within the contemplation of the settled principles of evidence, is irresistibly drawn against the appellants for withholding the best possible evidence within their knowledge and possession.

8.It is also pertinent to observe that any construction or improvement allegedly raised by the appellants upon the suit property during the pendency of litigation was undertaken at their own risk and costs, being fully conscious of the disputed nature of their title. The doctrine of lis pendens, embodied in Section 52 of the Transfer of Property Act, squarely applies in such circumstances, whereby any act of transfer or alteration in the status of the property during the pendency of proceedings cannot prejudice the rights of the lawful owner as may ultimately be determined by a competent court of law. Consequently, the appellants cannot claim any equitable relief or compensation on account of improvements made during the subsistence of the dispute. Viewed from another angle, the consistent failure of the appellants to discharge their burden of proof, coupled with the admitted striking off of their right of defence and the absence of any legally admissible evidence regarding payment of consideration, renders their claim devoid of legal substance. The learned trial court, therefore, rightly appreciated the evidence available on record and applied the correct principles of law in decreeing the suit in favour of the plaintiff/respondent No.1. The findings recorded by the

learned trial court are based on proper evaluation of the material on record and do not suffer from any misreading or non-reading of evidence, nor from any jurisdictional defect warranting interference by this Court in exercise of its appellate jurisdiction.

9.Insofar as the question of delivery of possession and raising of construction at the spot is concerned, it is an admitted position on record that at the time of institution of the suit in the year 2015, no construction existed upon the suit property. The plaintiff/respondent No.1 had, in the plaint, specifically sought a prohibitory relief restraining the appellants from raising any construction over the disputed property. The said matter was also brought before this Court through appeal wherein, upon the request of the appellants, they were permitted to raise construction; however, such permission was expressly made subject to the condition that any construction undertaken would be at their own risk and cost, vide judgment dated 20.05.2016. In this backdrop, the submission advanced by the learned counsel for the appellants regarding expenditure of a substantial amount on construction of the property, allegedly in pursuance of the sale in their favour, is of no legal assistance to their case. Any construction raised by the appellants, having been undertaken with full knowledge of the pending litigation and under a conditional permission of this Court, was at their own peril, and they cannot shift the consequences thereof upon the plaintiff. More importantly, insofar as the assertion of a direct sale in their favour is concerned, the record is conspicuously devoid of any legally admissible evidence to substantiate such claim.

10.It is a settled principle of civil jurisprudence that civil disputes are to be decided on the touchstone of preponderance of evidence, upon careful evaluation of the material placed on record in accordance with established principles of law. In the present case, the plaintiff/respondent No.1 has successfully brought on record sufficient and reliable evidence to establish

the execution of the agreement, the non-payment of the entire sale consideration, the transfer of property in favour of the appellants through attestation of mutations, and the raising of a superstructure over the property without lawful discharge of the consideration. The said evidence has been rightly appreciated and evaluated by the learned trial court in arriving at the impugned findings. The stance adopted by the appellants, particularly in view of the arguments advanced before this Court, appears to be self-contradictory and internally inconsistent. On the one hand, the appellants have denied that the plaintiff received any amount from them towards the sale consideration, and on the other hand, they seek to derive benefit from the amount admittedly paid by defendant No.1 to the plaintiff. In fact, the payment of Rs.3,00,00,000/-, to the extent it was acknowledged, remained a matter exclusively between the plaintiff and defendant No.1, and the learned trial court has rightly addressed the said aspect by directing the plaintiff to deposit the amount of Rs.3,00,00,000/- in Court for payment to defendant No.1 on account of failure of the transaction for want of the remaining sale consideration. Consequently, no derivative or ancillary benefit can lawfully be extended to the appellants in respect of the said amount, which was never shown to have been paid by them.

11.Likewise, the circumstances relied upon by the appellants, namely possession of the property, construction raised thereon, execution of a subsequent agreement with defendant No.1, and the appearance of the plaintiff before the Revenue Officer at the time of attestation of mutation, are of no legal consequence in the absence of proof of payment of consideration and existence of a valid contractual relationship between the plaintiff and the appellants. These factors, individually or collectively, do not create title nor do they confer enforceable rights upon the appellants in the absence of a lawful and completed transaction. The legal issues raised by the learned counsel for the appellants pertaining to the doctrine

of estoppel, with reference to Articles 114 and 115 of the Qanun-e-Shahadat Order, 1984, are likewise devoid of substance and unsupported by the evidence available on record. Estoppel, being a rule of evidence and equity, operates only where a party, by his declaration, act, or omission, has intentionally caused another to believe a particular state of affairs and to act upon such belief to his detriment. In the present case, although certain admissions regarding execution of the initial agreement exist on record, there is nothing to demonstrate any admission, representation, or conduct on the part of the plaintiff acknowledging a completed sale in favour of the appellants. In the absence of such foundational facts, the doctrine of estoppel cannot be invoked to defeat the lawful rights of the plaintiff.

12.Adverting to the provisions of Section 41 of the Transfer of Property Act, 1882, in the context of the submissions advanced by the learned counsel for the appellants, it is to be observed that the protection contemplated under the said provision is available only where a transferee establishes, through credible and satisfactory evidence, that the transfer was effected by an ostensible owner with the consent, express or implied, of the real owner, and that the transferee acted in good faith after taking reasonable care to ascertain the authority of the transferor to effect such transfer. In the present case, although the appellants have asserted a direct sale in their favour, they have failed to prove the genuineness, legality, and validity of such transaction by producing any reliable evidence. The record is conspicuously silent regarding payment of lawful consideration by the appellants or due diligence exercised by them prior to the alleged transfer. In these circumstances, mere possession of the property, by itself, cannot entitle the appellants to claim the statutory protection envisaged under Section 41 of the Transfer of Property Act, 1882. Consequently, the case set up by the appellants does not fall within the ambit or scope of Section 41 of the Transfer of

Property Act, 1882, and the reliance placed by the learned counsel upon the principle of transfer by an ostensible owner or the doctrine of bona fide purchaser for value without notice is wholly misplaced. The case law cited in support of such proposition, being distinguishable on facts and law, is not attracted to the circumstances of the present case and, therefore, affords no assistance to the appellants.

13.Learned counsel for the appellants, despite strenuous efforts, has been unable to point out any illegality, material irregularity, jurisdictional defect, or misreading or non-reading of evidence in the judgment and decree impugned in the present appeal. Upon careful scrutiny of the entire evidence on record and thoughtful consideration of the submissions advanced by the learned counsel for the parties, this Court finds that the findings recorded by the learned trial court are well- reasoned, based on proper appreciation of evidence, and in consonance with the settled principles of law, thus warranting no interference by this Court in the exercise of its appellate jurisdiction. Consequently, the instant appeal, being devoid of merit, fails and is hereby dismissed. However, in the circumstances of the case, there shall be no order as to costs. The record of the learned court below be transmitted to the court concerned forthwith.

Announced.

JUDGE

Haider Shah, SSS (SB) Hon’ble Mr. Justice Muhammad Naeem Anwar.