1. In this second appeal by the vendees in a pre-emption case, the Courts below have come to the concurrent findings of fact that the transfer in favour of the appellants was a sale and not a mortgage as claimed by them. This finding of fact cannot possibly be disturbed in a second appeal when it is based on reliable evidence including the registered deed executed between the parties to the transaction.
2. The appellants had purchased the land in dispute from defendant-respondent No. 2 for a sum of Rs. 25,000/- vide the registered deed Exhibit D-2 dated March 3, 1966. The plaintiff-respondent No. 1 had filed the suit for pre-emption on the last date of limitation, that is, March 3, 1967 and it is nobody's case that the suit is time-barred. About two months after the pre-emption suit had been filed, the vendor instituted a suit against the appellants for a declaration that a fraud had been practiced on him and that whereas he had intended to mortgage the land he had been wrongly made to execute a sale deed. This suit was compromised between the parties to the sale within a week after it had been instituted and before any service had been officially effected on the appellants. It was not the case of the parties in that compromise that the transfer was a mortgage from its very inception. The vendees had, however, agreed to treat the transfer as a mortgage though it was described to have been originally entered into as a sale. The consideration of Rs.25,000/- was described as the sale-price (Zar-i-Saman) though it was agreed that it would henceforth be taken to be the amount for which the land had been mortgaged. The suit was decreed in terms of the compromise deed the same day. The plaintiff-pre-emptor was no party to these proceedings and his pre-emption suit was pending at the time.
3. In spite of the fact that the compromise decree between the parties to the sale could have been challenged by the plaintiff during the hearing of his pre-emption suit on the ground that the decree was collusive and ineffective as regards his rights, he had filed a completely unnecessary suit for a declaration to that effect on December 14, 1967. This suit was, however, withdrawn by the plaintiff-respondent during the pendency of the pre-emption suit but after the defendants had stepped into the arena to contest it. The statement made by the plaintiff-respondent, copy Exhibit D-7, dated May 25, 1968, is to the effect that the points in controversy in the declaratory suit had also been agitated in the pre-emption suit and can be decided therein. The Court passed the final order the same day saying that the suit was being dismissed as withdrawn in view of the statement made by the counsel for the plaintiff. The pre-emption suit was decreed by the trial Court about 6-7 weeks later.
4. Shri Y. P. Gandhi, the learned counsel for the appellants, argues that it was open to his clients to defeat, by any honest means, the piratical right of pre-emption and that the agreement arrived at by compromise on May 10, 1967, was an honest arrangement. It had been conceded in that compromise deed that the transfer as originally effected was a sale. The registered deed, Exhibit D-2, executed between the parties was an important piece of evidence that could have been looked into for determining the nature of the transaction and the oral evidence examined by the parties was not very reliable and has been rightly disbelieved by the Courts below. There was nothing in law however, against the vendee-appellants surrendering some of their valuable civil rights under the sale which was an outright and irrevocable transfer. The owner had not reserved to himself any right to redeem or repurchase the property but the vendees could agree to give him that right in order to defeat a pre-emptor who was seeking to enforce a right which has been described as a piratical right in a number of authorities. There was nothing dishonest about the purchaser reducing himself to the status of a mortgagee only. By this sacrifice, however, he was making a distinct improvement in his capacity to resist the suit for pre-emption. This improvement in his rights, so far as the pre-emption suit was concerned, would fully attract the application of Section 21-A, which was inserted in the Punjab Pre-emption Act in May, 1944. This section runs as follows:
'21-A. Any improvement, otherwise than through inheritance or succession, made in the status of a vendee defendant after the institution of a suit for pre-emption shall not affect the right of the plaintiff-pre-emptor in such suit.'
5. As the improvement in the status of the vendee-appellants had been made otherwise than through inheritance or succession after the institution of the pre-emption suit, it could not in any way affect the right of the plaintiff-pre-emptor.
6. Shri Gandhi then argues on the basis of the Supreme Court decision in Bhagwan Dass v. Chet Ram, AIR 1971 SC 369, that it was necessary for the plaintiff-respondent to maintain his superior right of pre-emption right up to the date of the decree. In that case Section 21-A had no application because it was not by virtue of any improvement made by the vendees during the pendency of the pre-emption suit that the plaintiff had lost his superior right to purchase the land in preference to the vendees. The right of pre-emption in that case was based on the fact that the plaintiff was a tenant in possession of the land sold. His landlord had, however, obtained an ejectment decree from a Revenue Court and had succeeded in evicting the tenant during the pendency of the pre-emption suit filed by him (the tenant). The plaintiff pre-emptor had, therefore, lost the superior right of pre-emption for reasons independent of any improvement made by the vendee in his own status and Section 21-A was, therefore, not applicable.
The Supreme Court ruling in Bhagwan Das's case (supra) had been based on a number of Full Bench decisions of the High Courts of Lahore and Punjab. Some of these rulings were of a date prior to the coming into force of Section 21-A. The Full Bench decision in Ramji Lal v. State of Punjab, AIR 1966 Punj 374 (FB), related to a Punjab Pre-emption Act of S. 21-A, but there also the plaintiff had lost his superior right of pre-emption for reasons other than an improvement made by the vendee in his status. In that case, the plaintiff had lost his right of pre-emption during the pendency of the suit by virtue of a notification issued by the Government under Section 8(2) of the Act. In the case now before me Section 21-A is fully applicable and any improvement made by the vendee-appellants in their status after the filing of the pre-emption suit has to be ignored.
7. Shri Gandhi then argued that the withdrawal of the declaratory suit filed by the plaintiff-pre-emptor was a bar to his being granted a pre-emption decree in this previously instituted suit. His main reliance is on Order XXIII, Rule 1(3) of the Code of Civil Procedure, according to which the withdrawal of a suit would preclude the institution of any fresh suit in respect of the same cause of action. This provision would operate as a bar only if the plaintiff-pre-emptor was to institute a fresh suit. There is nothing in this provision of law which may seem to affect a party's right or pleas in a previously instituted suit, even though it may have been pending at the time of the withdrawal of a subsequently instituted suit. Nothing was finally decided at the time of the withdrawal of the declaratory suit and Section 11 of the Code would also have no application. Order 2, Rule 2, has also no bearing on this case because there was no splitting up of the claim or relief. This rule would be applicable only where the plaintiff has relinquished a part of his claim in a suit decided earlier and then seeks to file another suit for the claim that he had given up.
The plaintiff-pre-emptor had, in fact, filed a wholly unnecessary suit when the points in controversy could have been and had actually been raised by him in the previously instituted suit which was pending at the time of the filing and withdrawal of the second suit. He could have allowed the second suit to be tagged on to the previously instituted suit but his withdrawal from the unnecessary suit was only calculated to avoid a multiplicity of proceedings. The mistake made, if any, in withdrawing the second suit could in no way prejudice the pre-emption suit. It cannot be said that the plaintiff-pre-emptor had withdrawn from the second suit without making any reservations and the decision in Shankar Sitaram Sontakke v. Balkrishan Sitaram Sontakke, AIR 1954 SC 352, is not applicable to the facts of our case.
8. I, therefore, dismiss this appeal with costs.
9. Appeal dismissed.