KHAN AZIZ MANTOO Vs. SHIV JI & ORS

JUDGEMENT

(1.) A preliminary objection has been taken to this appeal being heard on the ground that it is incompetent and that leave should not have been granted by the High Court. The appeal has arisen out of a suit for pre-emption. The appellant is the vendee who was alleged to have purchased two properties ; one under a sale which is not evidenced by any registered instrument and the other under an ostensible transaction of exchange but alleged by the pre-emptor (respondent) to be in fact a sale. The latter instituted a suit for pre-emption under the Right of Prior Purchase Act. The suit was dismissed by the trial Court on the merits and the preemptor appealed to the High Court which dismissed the appeal not on the merits but on a question of law taken by the Court suo motu. The High Court pointed out that under section 138 (I) Transfer of Property Act, no transfer of immovable property is valid if it is not evidenced by a registered instrument in writing and that under sub-section (2) of the same section " No Court shall entertain a suit for pre-emption in respect of transfer of any such immovable property unless the transfer complies with the provisions of sub-section (I)." In this view the pre-emptor's suit was dismissed in liminie. The pre-emptor acquiesced in the decree of the High Court but, strangely enough, the vendee applied for leave to appeal to His Highness. He made a grievance of the finding on which the decree of the High Court proceeded. The High Court considered that the question involved in the appeal is a substantial question of law and granted leave, the case fulfilling the requirements of the law as regards valuation.

(2.) On the appeal being called on for hearing before the Board, learned counsel for the pre-emptor respondent took the preliminary objection that the decree being in favour of the vendee-appellant no appeal lies at his instance. It is urged that under section 2 of the Appeals to His Highness' Act, an appeal lies from a decree or final order and that only a party who is adversely affected by the terms of the decree can appeal. It is pointed out that the decree of the High Court merely dismisses the pre-emptor's appeal without mentioning the finding on which it proceeds and which is contained in the judgment and not in the decree. Learned counsel for the appellant contended, and cited authorities in support of his contention, that a party who has obtained a decree in his favour may yet have a right of appeal if the finding on which the decree proceeds affects him adversely. It is argued that though the decree of the High Court is in his favour its finding that the sale and exchange in suit are invalid is incorrect and will adversely affect him in any future litigation in which the validity of these transactions is in question. It is said that the vendor being a party to this case the finding of the High Court will operate as res judicata between the appellant and the vendor in any future litigation in which the validity of the sale and the exchange is in issue. The authorities quoted in support of this contention lay down that if such Is the case the party adversely affected by the finding can appeal from the decree though it is in his favour. The contention, so far as it goes, is undoubtedly sound. But the important condition necessary for the application of the rule on which the contention is based is missing in the present case. The finding of the High Court is not one, which, in the circumstances of the present case, can operate as res judicata between the vendor and the vendee in any future litigation.

(3.) The order of the High Court is in substance one under Order VII, rule 11 Civil Procedure Code, rejecting the plaint because on the face of it the plaintiff's suit is barred by a positive rule of law, namely, section 138 (2) Transfer of Property Act, which makes it obligatory on the Court, whether a plea is taken by any party or not, to reject the plaint. The plaint in this case should be deemed to have been rejected under this rule. The finding has not been recorded on any issue arising between the parties. Under section 11 Civil Procedure Code, the Court is debarred from trying any issue in which the matter directly and substantial by in issue has been decided in a former suit. Explanation 3 provides that the matter referred to in the section must in the former suit have been alleged by one party and either denied or admitted expressly or impliedly by the other. In the present case neither the pre-emptor nor the vendee alleged the sale and exchange in question to be invalid. The vendor like-wise did not characterize any of those transactions as invalid. It follows that no issue as to the validity or otherwise of these transactions arose either between the plaintiff and any of the defendants or between the defendants inter se. In these circumstances it is clear that one of the conditions necessary for the application of section 11 of Civil Procedure Code, in any future litigation between the vendor and the vendee will not be present. In this view the vendee appellant is not adversely affected by the decree in the sense contemplated by the authorities cited by the learned counsel for the appellant. This being so, the appeal is clearly incompetent. Accordingly the Board humbly advise His Highness to dismiss it with costs.