The Supreme Court of Pakistan has ruled that a claim for pre-emption cannot be maintained where ownership of a property has been transferred through an exchange rather than a sale, holding that the right of pre-emption is a weak legal right and the relevant law must therefore be construed strictly.
Pre-emption claim not maintainable where property is transferred through exchange, rules Supreme Court
ISLAMABAD, Jul 31 (APP):The Supreme Court of Pakistan has ruled that a claim for pre-emption cannot be maintained where ownership of a property has been transferred through an exchange rather than a sale, holding that the right of pre-emption is a weak legal right and the relevant law must therefore be construed strictly.
A two-member bench comprising Justice Shahid Bilal Hassan and Justice Musarrat Hilali issued the reserved judgment in Civil Appeals Nos. 28-L, 29-L and 30-L of 2011.
The Court held that the record clearly established that the transaction between the parties was an exchange of properties and not a sale. It observed that the plaintiff had failed to prove that the transaction, though recorded as an exchange, was in fact a sale.
Consequently, the claim for pre-emption was held to be legally untenable.
The judgment stated that courts cannot treat a transaction recorded as an exchange as a sale merely on the basis of conjecture. It emphasized that where a mutation records an exchange, no right of pre-emption arises unless strong and reliable evidence is produced to establish otherwise.
The Court further held that the plaintiff had also failed to prove compliance with the mandatory legal requirements relating to Talab-i-Ishhad (affirmation of the claim before witnesses). It noted that the concerned postman had not been produced as a witness to establish the service of the registered notice, despite the defendants denying receipt of the notice.
Referring to earlier Supreme Court precedents, the bench observed that in such circumstances the testimony of the postman is indispensable, and failure to produce him constitutes a fatal defect in the plaintiff’s case.
The judgment also noted that the plaintiff had failed to explain how he became aware of the alleged sale price.
According to the Court, a claimant seeking to enforce the right of pre-emption must establish not only the transaction itself but also the lawful source of his knowledge regarding the sale consideration.
On these grounds, the Supreme Court allowed the appeals, set aside the judgments of the Lahore High Court and the appellate court, and restored the trial court’s decision dismissing the pre-emption suit.
