Plaintiff Declared Bona Fide Purchasers for Consideration without Notice Under Section 27 of the Specific Relief Act, 1877

In a landmark judgment, the Lahore High Court has declared the plaintiff as bona fide purchasers for consideration without notice under Section 27 of the Specific Relief Act, 1877. The case, “2017 CLD 538 Lahore High Court Lahore” between Asim Riaz Qureshi and Bank Al-Falah Limited, has far-reaching implications for property transactions in Pakistan.

Principle of Due Diligence

The court’s ruling emphasizes the principle of due diligence, highlighting the importance of thorough examination and verification in property transactions to avoid unwarranted legal complications. The plaintiff had availed finance from the defendant bank to purchase a plot, but later contended that the bank should have checked the title of the plot as the seller was not the actual owner.

Caveat Emptor

The court distinguished the agreement as a finance agreement, not an agreement between the seller and purchaser of the plot, and therefore not void due to belated disclosure of fraud. The court noted that the defendant did not exercise proper due diligence before purchasing the plot, invoking the principle of “caveat emptor” or “let the buyer beware.”

Significance of Due Diligence

The judgment is part of a larger jurisprudence surrounding due diligence in property transactions, which continues to evolve and address various facets of property dealings. Other notable cases include:

2011 PLD 163 Supreme Court: A Human Rights case where the Supreme Court emphasized the legal and moral obligation of regulatory authorities to exercise maximum care, caution, and due diligence when granting sanctions and permissions for launching housing schemes.
Review Jurisdiction: The Lahore High Court has also underscored the significance of due diligence in the context of review jurisdiction, emphasizing that the power of review under Section 8 of the West Pakistan Board of Revenue Act, 1957 can only be exercised if there is a substantial error apparent on the face of the record which, despite due diligence, could not have been brought on the record earlier.

Collectively Depicting a Landscape

The cases collectively depict a landscape where the principle of due diligence is central to the proper adjudication of matters pertaining to property transactions. The courts advocate for a more rigorous application of due diligence by both individuals and regulatory authorities to uphold the sanctity of legal processes and safeguard the rights and interests of parties involved in property transactions.

In related developments, other cases have highlighted various facets and legal intricacies surrounding property transfer, including:

Insufficiency of Agreement: Inadequacy of agreement to sell
Obligation to Perform: Duty to fulfill obligations
Inheritance Concerns: Issues regarding inheritance rights
Timing and Prematurity of Action: Timing of actions and prematurity of claims
Limited Ownership: Restrictive nature of ownership rights
Registered vs Unregistered Deed: Differences between registered and unregistered deeds
Protection under Unregistered Deed: Protection offered by unregistered deeds

Conclusion

The plaintiff’s declaration as bona fide purchasers for consideration without notice is a significant victory in the ongoing efforts to promote due diligence and protect the rights of parties involved in property transactions. As the legal landscape continues to evolve, it is crucial that individuals and regulatory authorities adhere to the principles outlined in these judgments to ensure the smooth and efficient functioning of property transactions in Pakistan.