Dr. MUHAMMAD JAVAID SHAFI VS Syed RASHID ARSHAD and others
Summary: (a) Specific Relief Act, 1877 (I of 1877) –
---- S. 39 – Cancellation of instruments – Fraud and forgery – Limitation – Whether suit barred by time – Plaintiff challenged a registered General Power of Attorney (GPA) and subsequent sale deeds as fraudulent and forged, seeking their cancellation and possession of the suit property – The High Court held the suit was within time under Article 142 of the Limitation Act, 1908 – Supreme Court held, however, that the suit was primarily for cancellation of instruments under Section 39 of the Specific Relief Act, which is subject to a three-year limitation under Article 91 of the Limitation Act – Since the plaintiff had knowledge of the alleged fraud as early as 1971 but filed suit in 1987, the claim was barred by time – Held, the consequential relief of possession could not survive once the claim for cancellation of documents was time-barred – Suit dismissed as time-barred.
(b) Limitation Act, 1908 (IX of 1908) –
---- Arts. 91, 142 & 14 – Limitation in suits for cancellation of documents – Plaintiff sought exemption from limitation under Section 14 of the Limitation Act – Whether time spent in pursuing remedies before other forums could be excluded – Supreme Court held that Section 14 was not applicable, as it only applies where proceedings were bona fide pursued before a court lacking jurisdiction – Plaintiff’s alleged recourse to martial law authorities did not qualify – Additionally, since no specific plea under Section 14 was raised in the plaint, no such exemption could be granted – Further held, where a suit involves multiple claims, the main relief determines the applicable limitation – In this case, since the primary relief was cancellation of documents, limitation was three years under Article 91, rendering the suit time-barred.
(c) Qanun-e-Shahadat, 1984 (P.O. 10 of 1984) –
---- Art. 114 – Estoppel – Whether plaintiff estopped from challenging GPA and sale transactions – Plaintiff admitted knowledge of the GPA in 1971 and sale transactions in 1974 but did not object or take legal action for over a decade – He also allowed the attorney to act upon the GPA, leading to exemption and onward transfer of the property – Held, plaintiff was estopped under Article 114 of Qanun-e-Shahadat, 1984, as he had by conduct permitted others to act on the assumption that the GPA was valid – Supreme Court upheld the rule of estoppel, barring plaintiff from challenging the transactions at a belated stage.
(d) Evidence Act & Qanun-e-Shahadat, 1984 –
---- Art. 129(g) – Burden of proof – Non-production of original documents – Presumption against party withholding evidence – Supreme Court noted that plaintiff did not produce the original GPA, sale deed, or rectification deed, which he alleged were forged – Held, burden of proof rested on plaintiff to establish forgery, and failure to produce original documents led to a presumption under Article 129(g) that the withheld evidence would have been unfavorable – Further held, where a document is challenged as forged, mere allegations do not shift the burden; initial burden remains on the challenger to prove forgery.
(e) Bona fide purchaser – Protection under Transfer of Property Act, 1882 –
---- S. 41 – Whether appellant was a bona fide purchaser – Appellant purchased the property from a subsequent transferee who had acquired title through a registered sale deed – Appellant also constructed a bungalow on the plot and remained in uninterrupted possession since 1973-74 – Supreme Court held, where transactions are not void ab initio, protection under Section 41 of the Transfer of Property Act, 1882 applies, and appellant’s title could not be disturbed – Further held, where a sale deed is executed by an attorney under a registered GPA, and no fraud is proved, subsequent transactions do not require cancellation.
Cited Cases:
• Atta Muhammad v. Maula Bakhsh, 2007 SCMR 1446
• Abdul Majeed v. Muhammad Subhan, 1999 SCMR 1245
• Muhammad Akbar Shah v. Muhammad Yusuf Shah, PLD 1964 SC 329
• Mst. Hameeda Begum v. Mst. Murad Begum, PLD 1975 SC 624
• Abdul Rehman v. Ghulam Muhammad, 2010 SCMR 978
Disposition:
Appeal allowed by majority (2-1). Judgment of the High Court set aside. Trial court’s judgment dismissing the suit restored.------ (2a) Limitation Act (IX of 1908)---
----First Sched. Arts. 91 & 142---Specific Relief Act (I of 1877), Ss.8 & 39---Suit for cancellation of general power of attorney, sale agreement and sale deed and recovery of possession of immoveable property---Plaintiff joining several causes of action and seeking multiple remedies/relief in the suit---Primary remedy/relief---Ancillary, incidental and consequential remedies/relief---Question as to which remedy was to be considered for the purposes of ascertaining the limitation period for filing suit---Plaintiff allegedly executed and got registered an irrevocable general power of attorney in favour of the defendant/attorney--Defendant on basis of such power of attorney sold out the suit plot to a third person, who in turn sold it to the appellant---About 16 years after the date of execution/registration of the general power of attorney in favour of defendant, plaintiff filed a suit for cancellation of documents and possession of the suit land alleging that the power of attorney, sale agreements and sale deeds were obtained by fraud, forgery, misrepresentation and manipulation---Trial Court dismissed the suit on the basis that it was barred by limitation--High Court, however, decreed the suit on the grounds that suit being for possession of immovable property was filed within twelve years and was thus within the time limit---Legality--Suit filed by plaintiff had been treated by the High Court to be one for possession and Art.142 of First Schedule of the Limitation Act, 1908 had been resorted to---Where an instrument, was alleged to have been obtained by fraud, undue influence, coercion or misrepresentation, it was not a document which could be held to be void ab initio or on the face of it void, but it was required to be determined and adjudged by the court of law as voidable or void as the case may be and in such an eventuality, the matter shall squarely be covered by S.39 of the Specific Relief Act, 1877---Suit filed by the plaintiff in the present case was in fact for cancellation of the documents on the allegations of fraud, forgery and misrepresentation, which (suit) squarely fell within the purview of S.39 of the Specific Relief Act, 1877 and per Art.91 of the First Schedule of the Limitation Act, 1908, the prescribed period of limitation for such suit was three years---Plaintiff was primarily challenging the documents as being invalid against him on the ground of fraud, forgery, misrepresentation etc., and as a consequential relief he unambiguously was seeking a decree for possession of suit land by further asking for the demolition of the superstructure existing thereupon---Relief for possession claimed by plaintiff upon proper construction of the plaint and the frame of the suit was merely ancillary, incidental, consequential and dependent upon the primary relief of cancellation of the documents which was the basic and the foundational relief being sought---Where the main relief was time barred and the bar was not surmounted by the plaintiff, the incidental and consequential relief had to go away along with it and the suit was liable to be dismissed on account of being time barred---Plaintiff had knowledge of the general power of attorney and all the transaction(s) of sale in favour of third party and the appellant made through the defendant/attorney, but did not bring any legal action under S.39 of the Specific Relief Act, 1877, within the prescribed period of (3 years) limitation per Art.91 of First Schedule of the Limitation Act, 1908---Suit filed by the plaintiff was, thus, barred by time and was accordingly dismissed---Appeal was dismissed accordingly.
(b) Limitation Act (IX of 1908)---
----S. 3 & Preamble---Law of limitation---Object, scope and significance.
Law of limitation was founded upon public policy and State interest, and it was vital for an orderly and organized society and the people at large, who believed in being governed by systemized law. The obvious object of law of limitation was that if no time constraints and limits were prescribed for pursuing a cause of action and for seeking reliefs/remedies relating to such cause of action, and a person was allowed to sue for the redressal of his grievance within an infinite and unlimited time period, it shall adversely affect the disciplined and structured judicial process and mechanism of the State, which was sine qua non for any State to perform its functions within the parameters of the Constitution and the rule of law.
Law of limitation was considered prescriptive and preventive in nature and served as a major deterrent against the factors and the elements which could affect peace, tranquility and due order of the State and society. The law of limitation required that a person must approach the Court and take recourse to legal remedies with due diligence, without dilatoriness and negligence and within the time provided by the law; as against choosing his own time for the purpose of bringing forth a legal action at his own whim and desire. Because if that was so permitted to happen, it shall not only result in the misuse of the judicial process of the State, but shall also cause exploitation of the legal system and the society as a whole. This was not permissible in a State which was governed by law and Constitution.
The object of the law of limitation and the law itself, prescribing time constraints for each cause or case or for seeking any relief or remedy had been examined by the courts in many a cases, and it had been held to be a valid piece of legislation, and law of the land. Law of limitation should be strictly construed and applied in its letter and spirit, and by no stretch of legal interpretation it could be held that such law was merely a technicality and that too of procedural nature. Rather from the mandate of S.3 of the Limitation Act, 1908 it was obligatory upon the court to dismiss a cause/lis which was barred by time even though limitation had not been set out as a defence. This showed the imperative adherence to and the mandatory application of such law by the courts. Law providing for limitation for various causes/reliefs was not a matter of mere technicality but foundationally of the "LAW" itself.
Atta Muhammad v. Maula Bakhsh and others 2007 SCMR 1446 ref.
(c) Limitation Act (IX of 1908)---
----S. 3 & First Sched.---Suit---Several causes of action---Multiple remedies/relief sought--Limitation---Scope---Plaintiff joining several causes of action and seeking multiple remedies/relief in the suit---Primary remedy/relief---Ancillary, incidental and consequential remedies/relief---Question as to whether the cause of action/remedy entailing the maximum period of limitation should necessarily and mandatorily be resorted to and should cover the question of limitation for the purposes of the whole suit, regardless of whether the suit was barred by time for other cause(s) of action or relief---To ascertain the application of the correct Article from the First Schedule to the Limitation Act, 1908, the frame of the suit should be considered, adverted and adhered to---Test for determining the period of limitation was to see the true effect of the suit and not its formal or verbal description---Legal aspect (of the suit) should be examined by taking into consideration the facts of each case and particularly the frame and object of the suit, taking inter alia further into account the contents of the plaint itself---Point to be determined was what main relief was being sought by the plaintiff and whether the other remedies asked for (which may be carrying longer period of limitation) were ancillary, dependent and consequential to the main relief---Where the main/basic/foundational relief being sought was time barred and the bar was not surmounted by the plaintiff, the incidental and consequential relief had to go away along with it and the suit was liable to be dismissed on account of being time barred.
Mst.Fattan Bi and 2 others v. Fateh Muhammad and 6 others PLD 1974 Lah. 458; Janki Kunwar v. Ajit Singh 15 Cal. 58 [Privy Council] and Bashir Ahmad v. Partab 1989 MLD 4314 ref.
(d) Qanun-e-Shahadat (10 of 1984)---
----Art. 114---Estoppel---Scope---Where a person was aggrieved of a fact, he had a right, rather a duty to object thereto to safeguard his right, and if such a person did not object, he shall be held to have waived his right to object and subsequently shall be estopped from raising such objection at a later stage---Person was estopped by his own conduct, if he though was aware of certain fact(s), which was likely to cause harm to his rights and adversely affect him and was prejudicial against him, avowedly or through some conspicuous act or by omission, intentionally permitted and allowed another person to believe a thing to be true and act on such belief without taking any steps to controvert or nullify such adverse fact and instead he slept over the matter--- Such waiver or estoppel may arise from mere silence or inaction or even inconsistent conduct of a person.
(e) Qanun-e-Shahadat (10 of 1984)---
----Art. 114---Contract Act (IX of 1872), Ss. 203, 206 & 207---Specific Relief Act (I of 1877), S. 39 --- Suit for cancellation of general power of attorney, and consequential sale agreement and sale deed---Estoppel---Scope---Silence and inaction on part of plaintiff in safeguarding his right---Effect---Waiver of right to object---Suit plot was exempted in favour of plaintiff/respondent by the Development Authority as compensation for acquired land--Plaintiff purportedly executed and got registered an irrevocable general power of attorney in favour of the defendant/attorney---Defendant pursued the exemption of the suit plot with the Development Authority on behalf of the plaintiff---Subsequently defendant on basis of the power of attorney sold out the suit plot to a third person, who in turn sold it to the appellant--About 16 years after the date of execution/registration of the general power of attorney in favour of defendant, plaintiff filed a suit for cancellation of documents and possession of suit land alleging that the power of attorney, sale agreements and sale deeds were the result of fraud, forgery, misrepresentation and manipulation---Validity---Plaintiff admittedly came to know about the general power of attorney in favour of defendant in the year 1971, but did not take recourse to the proper legal action---Plaintiff according to his own statement was aware of the sale having been made in favour of third party in 1974, but no action was taken for assailing the same in time and he remained silent---General power of attorney which was the basis of alleged fraud was undisputedly in the knowledge of the plaintiff since 1971, but he slept over the matter, and allowed the said power of attorney to be utilized against his interest, which culminated into the sale firstly in favour of third party and thereafter in favour of the appellant---Defendant in fact virtually procured the exemption of the suit plot on the basis of the said power of attorney, and thereafter entered into an agreement with the Development Authority---Plaintiff having come to know of the power of attorney neither sought revocation of the same as per S.203 of the Contract Act, 1872, nor issued a notice for its revocation or renunciation according to Ss.206 & 207 of the Contract Act, 1872 or a public notice to renounce the same---Plaintiff since the year 1971 never even bothered to visit the suit land to see its physical condition, whether it was vacant or had been constructed upon---All such facts put together led to the conclusion that the rule of estoppel squarely operated against the plaintiff, within the purview of Art.114 of Qanun-e-Shahadat, 1984---Plaintiff in the facts and circumstances of the case was estopped by his own conduct from filing the suit--- Appeal was dismissed accordingly.
(f) Specific Relief Act (I of 1877)---
----S. 39---Transfer of Property Act (IV of 1882), S. 54---Contract Act (IX of 1872), S. 182--Suit for cancellation of registered power of attorney and sale deed---Plea of fraud and fabrication---Burden of proof---Scope---Where plaintiff (alleged executant) himself was challenging the power of attorney and consequential sale deed, and all such documents were registered with the sub-Registrar, it was the plaintiff's duty to bring on record the said documents and discharge the initial burden by establishing that they were invalid.
Per Ejaz Afzal Khan, J; disagreeing with Mian Saqib Nisar, J. [Minority view]
(g) Specific Relief Act (I of 1877)---
----Ss. 8 & 39 ---Transfer of Property Act (IV of 1882), S. 41---Qanun-e-Shahadat (10 of 1984), Art.129(g)---Suit for cancellation of general power of attorney, sale agreement and sale deed and recovery of possession of immoveable property---Claim based on documentary evidence--Documents not proved---Effect---Plaintiff, who was owner of suit plot, allegedly executed and got registered an irrevocable general power of attorney in favour of the defendant/attorney---Defendant on basis of such power of attorney sold out the suit plot to a third person, who in turn sold it to the appellant---Plaintiff filed a suit for cancellation of documents and possession of the suit land alleging that the power of attorney, sale agreements and sale deeds were obtained by fraud, forgery, misrepresentation and manipulation---Trial Court dismissed the suit, however, High Court, reversed findings of Trial Court and decreed the suit---Validity---Only question requiring consideration, in the present case was whether the appellant proved the documents which were sheet anchor of his claim--Case of the appellant was that he purchased the property in dispute from a third party, who purchased it from the defendant, who allegedly held a general power of Attorney on behalf of the plaintiff---Appellant did not prove any of the documents; he did not even examine the person who was holding general power of attorney on behalf of plaintiff to prove that in fact he was holding such power of attorney---Question as to who executed the power of attorney, who scribed it, who witnessed it, what was the consideration, if any, where and in whose presence was it paid, were the (sort of) queries to be addressed before examining the sustainability of the superstructure raised thereon---Appellant could not assert his title to the suit property when he neither proved the general power of attorney nor the deeds witnessing the alleged sale transactions nor confronted the plaintiff therewith---Failure of appellant to examine the attorney, the attesting witnesses of the power of attorney, the executant of the sale deeds and their attesting witnesses would give rise to a presumption under Art. 129(g) of Qanun-e-Shahadal, 1984, that the evidence which could be but was not produced, would, if produced, be unfavourable to the person withholding it---Appellant in such circumstances could not be termed a bona fide purchaser either so as to entitle him to protection under S.41 of the Transfer of Property Act, 1882---High Court had rightly decreed the plaintiff's suit--Appeal was dismissed accordingly. [Minority view]
Zar Wali Shah v. Yousaf Ali Shah and others 1992 SCMR 1778 and Syed Phul Shah v. Muhammad Hussain and 10 others PLD 1991 SC 1051 distinguished.
(h) Limitation Act (IX of 1908)---
----First Sched. Arts. 91 & 142---Specific Relief Act (I of 1877), Ss.8 & 39---Contract Act (IX of 1872), Ss. 2(g) & 17---Suit for cancellation of general power of attorney, sale agreement and sale deed and recovery of possession of immoveable property---Property transferred under a void and fraudulent agreement---Suit filed by owner of such property for its possession--Limitation period---Scope---Plaintiff, who was owner of suit property, allegedly executed and got registered an irrevocable general power of attorney in favour of the defendant/attorney--Defendant on basis of such power of attorney sold out the suit plot to a third person, who in turn sold it to the appellant---About 16 years after the date of execution/registration of the general power of attorney in favour of defendant, plaintiff filed a suit for cancellation of documents and possession of the suit land alleging that the power of attorney, sale agreements and sale deeds were obtained by fraud, forgery, misrepresentation and manipulation---Trial Court dismissed the suit on the basis that it was barred by limitation, as limitation period for filing a suit for cancellation of documents was three years---High Court, however, decreed the suit on the grounds that suit being for possession of immovable property was filed within twelve years and was thus within the time limit---Legality---Appellant did not prove any of the documents on which he based his claim---Appellant neither proved the general power of attorney nor the deeds witnessing the alleged sale transactions nor confronted the respondent therewith---Plaintiff, in such circumstances, did not need to institute a suit for declaration or cancellation of documents, which had no existence---Plaintiff needed to institute a suit for possession on the basis of title within a period of 12 years, and that was what he did---Appellant who was left with sheer possession could not defend it in a possessory suit instituted by the plaintiff on the basis of title---Failure to question a transaction within the period of limitation would certainly matter, if it had any existence and effect, but where it had no existence and effect, it could not in any manner have life breathed into it, and passage of time or length of years could not give it any existence and effect---Building a castle of limitation in defence of such a transaction or its beneficiary on the basis of documents which were neither produced nor proved, would amount to building a castle in the air---Such exercise would be all the more unwarranted when the beneficiary (i.e. appellant) himself did not stir even a straw to prove his claim---Although the law of limitation ensured order in the society but it could not be used as a bulwark to perpetuate a gain having its origin in fraud which not only vitiated the most solemn transaction but the very fabric of the society--Shielding a transaction based on fraud and forgery would be more chaotic and disorderly than undoing it---Limitation could not shield a transaction having no effect and existence on account of fraud and forgery---Plaintiff, in the present case thus could not be non-suited on account of his failure to institute a suit for declaration or for cancellation of documents within the time provided by the statute---High Court had rightly held that plaintiff's suit was for possession of suit property, which was filed within the limitation period of twelve years--Appeal was dismissed accordingly.[Minority view].
Abdul Majeed and 6 others v. Muhammad Subhan and 2 others 1999 SCMR 1245; Mst. Hameeda Begum v. Mst. Murad Begum PLD 1975 SC 624 and Abdul Rehman and others v. Ghulam Muhammad through L.Rs and others 2010 SCMR 978 ref.
(i) Contract Act (IX of 1872)---
----Ss. 2(g) & (i)---Void and voidable transaction, setting aside of---Scope---When a transaction was voidable it was essential that it was set aside but if it was void the question of setting it aside would not arise.
Muhammad Akbar Shah v. Muhammad Yusuf Shah and others PLD 1964 SC 329 ref.
(j) Limitation Act (IX of 1908)---
----Preamble---Contract Act (IX of 1872), S. 17---Limitation could not shield a transaction having no effect and existence on account of fraud and forgery.
Abdul Majeed and 6 others v. Muhammad Subhan and 2 others 1999 SCMR 1245; Muhammad Akbar Shah v. Muhammad Yusuf Shah and others PLD 1964 SC 329; Mst. Hameeda Begum v. Mst. Murad Begum PLD 1975 SC 624 and Abdul Rehman and others v. Ghulam Muhammad through L.Rs and others 2010 SCMR 978 ref.
Niagara Mills Pvt Ltd Vs PCBL
Summary: The petitioners, including Niagara Mills (Pvt) Limited and others, challenged the consolidated judgment passed by the Judicial Officer of the Punjab Cooperative Board for Liquidation (PCBL) on 01.10.2021. The judgment annulled the sale of a 26-kanal, 18-marla property located in Faisalabad, ordering the cancellation of three sale deeds to the extent of 20-kanals and 8-marlas. The petitioners acquired the property from the National Industrial Cooperative Finance Corporation (NICFC) through a negotiated sale facilitated by the PCBL, the statutory liquidator managing the disposal of assets from undesirable cooperative societies. The sale was questioned, and PCBL sought to annul the transaction 14 years after the sale based on allegations of fraud.
--- Issues:
1) Whether the Judicial Officer had the legal authority to annul the sale of the property.
---2) Whether the PCBL could challenge a concluded sale transaction after a lapse of 14 years.
---3) Whether the sale was fraudulent or collusive, justifying its cancellation.
---4) Whether the Judicial Officer’s decision to annul the sale deeds was lawful.
---- Holding/Reasoning/Outcome:
Authority of the Judicial Officer:
The court held that the Judicial Officer, as a delegate of the PCBL, had quasi-judicial powers to review and annul the sale of the property. The delegation of such powers was authorized under Section 11 of the Punjab Undesirable Cooperative Societies Act, 1993, allowing the Judicial Officer to confirm, reverse, or modify the Board's actions.
---- Reopening of Sale Transaction:
The doctrine of finality or past-and-closed transactions was not applicable since the full transfer of the property had not been completed (6-kanals and 10-marlas remained untransferred). The Cooperatives Board retained the authority to reopen the sale due to allegations of fraud, which vitiates any transaction, regardless of time elapsed.
--- Fraudulent Sale:
The court found substantial irregularities in the sale process. The sale was not conducted through a public auction as initially advertised, and there was no valid explanation for switching to a negotiated sale. The terms of the sale were also unclear, with delays in payments and no approval of the conditions by the PCBL. These factors led the court to conclude that the sale was fraudulent and collusive, warranting cancellation.
---- Cancellation of Sale Deeds:
The Judicial Officer had the authority to cancel the sale deeds as a consequence of the fraudulent sale. The court affirmed that the cancellation was a logical outcome of nullifying the fraudulent transaction, which was within the jurisdiction of the Judicial Officer, and did not require involvement of the civil courts.
---- Citations/Precedents:
Telecard Limited v. Pakistan Telecommunication Authority, 2014 CLD 415
Muhammad Ashraf Khan v. Muhammad Khan, 2004 CLC 1133
Amir Jamal v. Malik Zahoor-ul-Haq, 2011 SCMR 1023
Muhammad Ashraf Tiwana v. Pakistan, 2013 SCMR 1159
S.M. Waseem Ashraf v. Federation of Pakistan, 2013 SCMR 338
Administrator, Thal Development v. Ali Muhammad, 2012 SCMR 730
Nawab Syed Raunaq Ali v. Chief Settlement Commissioner, PLD 1973 SC 236
Punjab Cooperative Board for Liquidation v. Zeenat Bibi, 2020 YLR 2421
Director, Directorate-General of Intelligence v. Messrs Al-Faiz Industries, 2006 SCMR 129
Shahida Bibi v. Habib Bank Limited, PLD 2016 SC 995
Mrs. Sultana Ahmed v. Sindh Industrial Trading Estate Ltd, 2003 YLR 1760
Punjab Cooperative Board for Liquidation v. Muhammad Ilyas, PLD 2014 SC 471
Muhammad Hayat v. Muhammad Nawaz, 1971 SCMR 414