MUHAMMAD MUSHTAQ vs MALIK MUMTAZ — 2026 SCMR 54 SUPREME-COURT

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MUHAMMAD MUSHTAQ VS MALIK MUMTAZ. Ss. 2(d), 5 & 13---Pre-emption---Distinction between sale and exchange---Transaction recorded in mutation as an exchange or a sale---Classification and determination---Right of pre-emption, arising of---Pre-requisite---Occurrence of sale transaction being mandatory. Courts below concurrently held that defendant failed to prove that the transaction was an exchange. The dispute arose over a parcel of land measuring 24 kanals and 3 marlas situated in Dera Ismail Khan, where "MT", the owner, executed a mutation reflecting an exchange of land with the defendant, allegedly for better management. The plaintiff, claiming a superior right of pre-emption, instituted a suit asserting that the transaction, though recorded as an exchange, was in fact a sale. The Trial Court treated the mutation as a sale and decreed that both parties, being co-owners in the same khata, were entitled to equal pre-emption rights. The appellate and revisional Courts upheld the said view. The legal question before the Supreme Court was whether the transaction through mutation constituted a genuine exchange or a sale disguised as an exchange, thereby determining the applicability of the right of pre-emption under Section 5 of the Khyber Pakhtunkhwa Pre-emption Act, 1987. Held: The Courts below incorrectly placed the burden upon the defendant to prove that the transaction was a genuine exchange. The onus of proof primarily lay upon the plaintiff (pre-emptor), who asserted that the recorded mutation represented a sale rather than an exchange. The mere failure of the defendant to establish the transaction as a legitimate and bona fide exchange did not automatically validate the conclusion that it was a sale. The absence of any credible proof indicating payment of price or a promise thereof led to the conclusion that the transaction documented in the mutation was an exchange rather than the sale claimed by the plaintiff. The Courts below significantly misinterpreted the evidence presented and also misapplied the relevant legal principles. According to Section 5 of the Act, the right of pre-emption was contingent upon the occurrence of a sale. Such right did not extend to transactions such as gifts or exchanges. In the present case, the plaintiff (pre-emptor) failed to demonstrate that the transaction documented in mutation constituted a sale. Consequently, the plaintiff was not entitled to the decree sought by him. Judgments and decrees issued by the Courts below were legally untenable and were set aside. Petitions were converted into appeals. The petition brought forth by the plaintiff (pre-emptor) was dismissed and the petition brought forth by the defendant was allowed.

MUHAMMAD MUSHTAQ vs MALIK MUMTAZ — 2026 SCMR 54 SUPREME-COURT

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