1. On 9th June, 1967, Nand Singh is said to have executed a lease-deed, Exhibit D-2/A, regarding land, measuring 150 Kanals and 7 Marlas, situate in village Landeke, District Ferozepur, in favour of Gurdip Singh for a period of 20 years beginning from 16th June, 1967. The lease money fixed was Rs.1,800/- per year and this had to be paid by the lessee at the end of the year. The land revenue was to be paid by the lessor. There was a term in the deed that the lessor will not be able to evict the lessee before the expiry of the period of 20 years. It was further mentioned that some land out of 150 Kanals 7 Marlas, was under mortgage and the same would be redeemed by the lessor himself before 16th June, 1967. The possession of the land, which was free from mortgage, according to the deed, had been delivered to the lessee and as regards the mortgaged land, it was said that it would be given to the lessee immediately it was redeemed. This lease deed was, however, registered on 13th June, 1967, on which date the stamp duty for this document was also paid. On 13th June, 1967, vide Exhibit D/3, Nand Singh sold the entire land covered by the lease-deed, Exhibit D-2/A, to Kanwaljit Kaur and Simran Kaur, wife and daughter respectively of Gurdip Singh, lessee, for Rs.66,165/-.
Kanwaljit Kaur's share in the land was 3/4th, while that of Simran Kaur 1/4th. Out of the sale price, Rs.24,828/- were left with the vendees for payment to the previous mortgagees of the land and the remaining about Rs.41,337/- were paid before the Sub-Registrar. Out of this land, 149 Kanals 15 Marlas were under mortgage with different persons for the total amount of Rs.24,828/- and only 12 Marlas of land were free from mortgage. It was, however, mentioned in the deed that possession of the land sold was delivered to the vendees. It was also stated that the land had already been given by Nand Singh on lease for 20 years and the vendees would be bound by the terms of that lease-deed. This sale led to two suits for pre-emption. One (Suit No. 105 of 1968) was filed by Karamjit Singh and Inder Singh, son and nephew respectively of the vendor, and the other (Suit No. 660 of 1968) by Gurinderjeet Singh, another son of the vendor. Both these suits were later on consolidated and evidence was recorded in the first one.
2. These suits were contested by the vendees and as a result of the pleadings of the parties, a number of issues were framed. We are, however, in this appeal, concerned only with issue No. 3, namely:
'Whether lease in favour of defendant No. 1 (Gurdip Singh) is a sham transaction and consequently the said transaction of lease and the sale in favour of defendants Nos. 2 (Kanwaljit Kaur) and 3 (Simran Kaur) constitute only one transaction as alleged?'
3. The trial Court decreed the suits and it was held that the sons of the vendor had got a superior right of pre-emption and if they deposited the sale-price, they would be entitled to get the property in equal shares in the first instance. If, however, they failed to for so, then the nephew could get the land by depositing the same amount.
4. When the matter went in appeal before the learned Additional District Judge, Ferozepur, he modified the decree passed by the trial Court and directed that the decree-holders would get only symbolical or proprietary and not actual possession of the suit land. This was done, because he reversed the decision of the trial Court on issue No. 3 and found that the lease in favour of Gurdip Singh was not a sham transaction as held by the trial Court, and, therefore, the lessee would remain in possession of the property sold for 20 years. It was after the expiry of that period that the pre-emptors could get actual possession of the land. Against this decision, the present second appeal has been filed by Gurinderjeet Singh.
5. The only question that has been argued before me is regarding issue No. 3. It has been contended by the counsel for the appellant that the finding given by the learned Additional District Judge on this issue to the effect that the lease-deed, Exhibit D-2/A, executed by Nand Singh in favour of Gurdip Singh was a genuine transaction, was vitiated and it deserved to be reversed.
6. In order to decide this question, we have first to see as to what are the proved facts in this case. There is no doubt that the learned Gurdip Singh is the husband and the father of the two vendees, namely, Kanwaljit Kaur and Simran Kaur, respectively. The lease-deed admittedly bears the date of 9th June, 1967, but it is in evidence that it was attested by Mr. Satwan Singh, Advocate, on 13th June, 1967. It is also beyond dispute that the stamp duty for this document was paid on 13th June, 1967, on which date it was also registered. It is common ground that the sale-deed was also executed and registered on the same date, namely, 13th June, 1967. The stamp-paper for the sale-deed was, however, purchased on 9th June, 1967. Gurdip Singh has come in the witness-box as D.W. 7 and stated that Nand Singh, the lessor, had approached him 4 or 5 days after he had originally in May, 1967 settled to effect the lease in his favour and told him that he had been advised by his lawyer that instead of leasing out the land, he should sell the same as that would be for his benefit.
Gurdip Singh had agreed to take the land on lease and, therefore, when the lessor told him that he had given up the idea of leasing it out and wanted to sell it, Gurdip Singh informed him that he would give him a reply after consulting his wife, because she had some money in her own separate account. Gurdip Singh further deposed that after 2 or 3 days, the lessor again came to him and he then gave his consent to take the land on sale from him. If this statement of Gurdip Singh is correct, then it is difficult to understand as to why on 9th June, 1967, Nand Singh, the lessor, again agreed to execute the lease-deed, Exhibit D-2/A. No explanation is coming forth on the record as to why the lease-deed had to be executed when Nand Singh had completely given up the idea of leasing out the land and had instead decided to sell it on the advice of his lawyer.
7. The other circumstances, namely, that the stamp-paper for the sale-deed was purchased by the vendees on 9th June, 1967, shows that on that day, when the lease-deed is also alleged to have been executed, it had been settled that the property would be sold and not leased out. It is possible that Gurdip Singh, subsequently, on 13th June, 1967, thought that in order to defeat the possible pre-emptive right he might also get a document, like the lease-deed executed in the instant case, and it was, therefore, that the present lease deed came into existence. If the same was really a genuine document, it would have not only been executed but also registered on that very day i.e., 9th June, 1967, after paying the proper stamp-duty. The sale-deed, as I have already said, was executed and registered on 13th June, 1967, and when that was done, it appears that the idea struck Gurdip Singh to make out a transaction of a lease-deed to defeat the possible right of pre-emption. That also explains as to why this document was executed, attested and registered after paying the stamp duty on one and the same day, i.e., 13th June, 1967.
As has been rightly pointed out by the trial Judge, the execution of the lease-deed and the sale-deed and their presentation before the Sub-Registrar on the same day do not make out any sense, because apparently Nand Singh had no necessity for executing the lease-deed since he was going to transfer his ownership rights to the defendants on that very day. The date, 9th June, 1967, had been written a few days earlier than the sale transaction. There is intrinsic evidence also in the documents, Exhibit D-2/A, which shows that it was merely a paper transaction and not intended to be acted upon. It was mentioned in the deed that possession of the land, which was free from mortgage, had been given to the lessee. Curiously enough, it has not been proved on the record that possession of any land was taken by the lessee on 13th June, 1967. It was said by Gurdip Singh in his evidence that he had taken possession of one Kanal of land on that day.
This statement has been proved to be incorrect. There is a document, Exhibit D-5, on the record, which is a mutation dated 26th October, 1967, effected in favour of the vendees on the basis of the sale-deed. Therein, it has been mentioned that possession of 12 Marlas of land, which was the only land free from mortgage, was taken by the vendees and with regard to the rest of the land, it was stated that its possession was with the mortgagees themselves. This statement in the mutation definitely shows that the lessee had not taken possession of any land, which was free from mortgage, on 13th June, 1967, as alleged by him. Then again, it is stated in the lease-deed that the possession of the mortgaged land will be given to the lessee on the date the same is redeemed. It is, however, established on the record that the mortgaged land was redeemed on 13th June, 1967. But even after redemption, its possession was taken not by the lessee but by the vendees. This fact is proved by Exhibits D-7 to D-11, which are mutations regarding the redemption of the various mortgages.
8. The pre-emptors had also produced Exhibit P-2 Khasra Girdawari from Kharif 1963 to Rabi 1968, which showed that during the relevant period Kharif 1967 and Rabi 1968, the possession of the redeemed land and unencumbered land was of the vendees and not of the lessee. It may be stated that the learned counsel for the respondents made a reference to Exhibit P-3, which is a copy of the order date 8th August, 1968, passed by the Assistant Collector, IInd Grade, Moga. By this order, the Assistant Collector had made correction in the above entries in the Khasra Girdawaris. On its basis, it was submitted that the land was in the possession of the lessee and not the vendees. This order, however, shows that Gurdip Singh made an application for the correction of the entries in the Khasra Girdawaris regarding the possession of the land for Kharif 1967 and Rabi 1968.
On a notice of that application having been issued, Kanwaljit Kaur, respondent, appeared and stated that her husband Gurdip Singh had cultivated the land in question for the said period and it was still in his possession under the lease-deed and further that she had no objection if the necessary correction was ordered. The Assistant Collector, then, mainly on the basis of the statement of Kanwaljit Kaur, made the necessary correction. It is pertinent to mention that this order had been made during the pendency of the pre-emption suits, which had been filed in June, 1968. Gurdip Singh realized that the fact that the possession of the land in dispute was with the vendees, and not with him, might go against him and it was, therefore, that he obtained this collusive order of the correction of the said entries merely on the admission of his wife. This document, therefore, cannot be of any avail to the respondents.
9. According to Gurdip Singh, he had to pay the mortgage money and redeem the land. He stated that he actually paid that amount and got the land redeemed. This again is wrong, because the receipts, Exhibits D-1 and D-2, produced on the record by the vendees themselves, show that the mortgage amount was paid by the vendees and it were they who redeemed the land. Both these receipts are dated 13th June, 1967. Exhibit D-1 is for Rs.2160/- and is regarding 9 Kanals 12 Marlas, while Exhibit D-2 is for Rupees 8268/- and it pertains to 44 Kanals 3 Marlas. The mortgagees have also come into the witness-box and stated that it were the vendees, who paid the amount to them. It is also in evidence that it was the lessee, who paid the sale-price and it was he, who actually got the sale-deed executed and registered before the Sub-Registrar.
If the lease was not a sham transaction, it is obvious that the vendees would not have paid the mortgage amount, because they would have got the possession of the land only after a period of 20 years. This circumstance also goes a long way in showing that the lease-deed was not to be acted upon and had been executed merely to defeat the right of the pre-emptors. Then again, if the lease-deed was a genuine document, it meant that the lessor, as mentioned in the deed, had undertaken to pay the mortgage amount of Rs.24,828 to the mortgagees for redeeming the land from them and then handing over its possession to the lessee. Why should he have paid this large amount for the benefit of the lessee, when he was only going to get a yearly income of Rs.1,800/- from the land for 20 years? The record, however, shows that this liability alleged to have been undertaken by the lessor was not true, because he immediately sold the land and it were the vendees, who redeemed it.
It is also established on the record by the endorsement of the Sub-Registrar on the sale-deed, Exhibit D-3, that the amount of Rs.41,337/- was paid to the vendor by Gurdip Singh and not the vendees. It is further proved by the copies of the savings bank accounts, Exhibits D-1/A and P.W. 5/A, of Kanwaljit Kaur and Gurdip Singh that the entire amount was paid out of the account of the lessee and not of the vendees. The close relationship between the vendees and the lessee and the active part played by the latter in getting both the deeds executed on the same day also support the case of the pre-emptors. Again, it is significant that Kanwaljit Kaur, the major vendee, had not come into the witness-box to depose that the lease-deed was a genuine transaction.
10. All the facts and circumstances mentioned above, in may opinion, conclusively prove that the lease-deed, Exhibit D-2/A, had been executed merely to defeat the right of pre-emption. It was not a genuine transaction and was not intended to be acted upon by the parties.
11. It was contended by the learned counsel for the respondent that the finding, as to whether the lease-deed was a genuine or sham transaction, was one of fact and should not be interfered with in second appeal.
12. After going through the evidence produced in this case and hearing the counsel for the parties, I am of the view that the finding given by the learned Additional District Judge on this point is vitiated inasmuch as he has, in arriving at this finding, ignored important documentary, oral and circumstantial evidence. The documentary evidence, as already mentioned above, consists of Exhibits D-1, D-2, D-5, D-7 to D-11 and P-2. The oral evidence was the statement of Gurdip Singh himself as D.W. 7. The circumstantial evidence has been referred to above by me. The learned Judge has also failed to meet the reasoning of the trial Court, when reversing its finding on this issue. Reference in this connection may be made to the Privy Council ruling in Rani Hemanta Kumari Devi v. Maharaja Jagadindra Nath Roy, (1906) 16 Mad LJ 272(PC), wherein it was observed:
'It is better that the appellate Court whenever it reverses the judgment of the lower Court, comes into close quarters with the judgment of the lower Court and meets the reasoning therein.'
Besides, at placed the learned Judge had proceeded on wrong facts. In his judgment, he had observed that none of the pre-emptors Karamjit Singh, P.W. 4, and Gurinderjeet Singh, D.W. 8, had, in their own statements, said a word about their allegation that the lease-deed was a sham transaction. I have seen the record and this is not a correct statement. Gurinderjeet Singh had, in cross-examination by the counsel for the plaintiffs, stated that the vendee in this case was in fact Gurdip Singh and the lease-deed executed in his favour was a fictitious document. Karamjit Singh had also deposed that no Pattanama (lease-deed) was ever executed by his father Nand Singh and, consequently, the question of his presence at the time of the execution of the said deed did not arise. Then again, the learned Judge had observed that Gurdip Singh, lessee, had affirmed as D.W. 7, that the lease-deed was a genuine transaction and quite independent of the sale-deed, as he had got possession of one Kanal of that land as a lessee on 9th June, 1967, and of the remaining land on 13th June, 1967, when he paid the mortgage debt and got it redeemed from the mortgagees.
As I have already observed above, it is proved on the record that Gurdip Singh did not get possession of my portion of the land as a lessee either on 9th June, 1967, or 13th June, 1967. Besides, it was not he, but the vendees, who paid the mortgage amount and got the land redeemed. In my opinion, the learned Judge approached the consideration of this issue from an erroneous point of view also. The learned Judge started by mentioning the distinction between a Benami and a sham transaction. But nobody had pleaded in this case that there was any Benami transaction. The case set up by the pre-emptors was that though the lease-deed had been executed, it was not meant to be acted upon by the parties and it had come into being merely for the purpose of defeating the right of pre-emption. That being so, the only question to be determined was whether this allegation had been established or not. His finding being vitiated on account of the reasons mentioned above, was, therefore, liable to be set aside.
13. It is true that a vendee can defeat a pre-emptor's right by legitimate means, but this object cannot be obtained by bringing about a transaction, which is not genuine or intended to be acted upon and this is precisely what has happened in the instant case.
14. In view of what I have said above, I would accept this appeal, set aside the decree passed by the lower Appellate Court and restore that of the trial Court. In the circumstances of this case, however, the parties will bear their own costs in this Court as well.
15. While disposing of Civil Miscellaneous Application No. 1174-C of 1971, in this very appeal, I had in my order dated May 27, 1971, observed that instead of deciding the said application on merits it would be desirable if the main appeal be listed for hearing on an actual date to be fixed by the office. Counsel for the respondents, at that time, undertook to give actual possession of the land in dispute, in whatever condition it was, to the pre-emptors in case their appeal succeeded in this Court. In view of that undertaking, I direct that the respondents should now give actual possession of the land in question to the appellants immediately.
16. Appeal allowed.