Law: Transfer of Property Act, 1882

Section: 41, 52

Law: Qanun-e-Shahadat Order, 1984

Section: 114, 115

Law: Specific Relief Act, 1877

Section:

Case Summary

Facts

The plaintiff (respondent No.1) filed a civil suit seeking declaration of ownership over 312 Marlas of land situated at Hazar Khawni, Peshawar. He alleged that:

• He agreed to sell the property to respondent No.2 for Rs.12.48 crore.
• He received only Rs.3 crore out of the total sale price.
• The remaining amount was never paid as the issued cheques were dishonoured.
• Despite non-payment, the property was transferred through Mutations Nos.33303 and 33304 in favour of the appellants.
• The transfer was fraudulent, without lawful consideration, and liable to cancellation.

The trial court decreed the suit, cancelled the sale agreements and mutations, restored possession to the plaintiff, and directed refund of Rs.3 crore to defendant No.1. The appellants challenged that decree before the High Court.

Issues

1. Whether the mutations conferred valid ownership upon the appellants?
2. Whether transfer of property without payment of full sale consideration was legally valid?
3. Whether the appellants were bona fide purchasers entitled to protection under Section 41 of the Transfer of Property Act?
4. Whether the appellants were entitled to compensation for construction raised during litigation?

Held

The High Court dismissed the appeal and upheld the trial court's judgment.