1. A claim for specific performance of a contract seeks grant of discretionary relief in terms of section 12 and 22 of the Specific Relief Act, which is to be granted only in the interest of fairness and to dispense justice in accordance with law. One who seeks equity must do equity and thus the conduct of the claimant before and after the filing of the suit should be such that it does not disentitle him from being the recipient of equitable relief.
2. Specific performance cannot be granted in favour of a person, “who has become incapable of performing” his obligation under the contract, or “violates any essential term of the contract that on his part remains to be performed”, in terms of section 24(b) of the Specific Relief Act. It is therefore essential for a plaintiff to state unequivocally in the plaint that he is in compliance of his obligation under the contract he seeks to enforce, and to the extent that an obligation remains outstanding, such as payment of balance consideration, he is ready, willing and able to discharge the same. The failure of a plaintiff to ensure that such representation is included in the plaint could invite consequences under Order VII Rule 11(d) of the Civil Procedure Code, with the trial court finding that the suit is barred in view of section 24(b) of the Specific Relief Act, if the plaint does not manifest that the plaintiff is not in breach of any essential term of the contract to be performed.
3. Notwithstanding the statement in the plaint regarding compliance with the provisions of the contract, where the plaintiff is seeking enforcement of a contract in relation to immovable property, and any consideration in lieu of such property remains outstanding, even if due to steps that remains to be taken on part of the counter party in such contract, it is for the plaintiff to seek permission to deposit balance consideration or valid financial security in lieu thereof to establish within the meaning of section 24(b) that plaintiff is not incapable of performing his/her end of the bargain
4.Non-deposit of balance consideration after seeking court permission would not result in automatically dismissal of the suit as held by the august Supreme Court in Muhammad Asif Awan Versus Dawood Khan (2021 SCMR 1270). But the Specific Relief Act vests discretion in the trial court to determine whether or not a party is entitled to discretionary relief. The failure of the plaintiff to seek to deposit balance consideration with the court upon filing the suit would create a rebuttable presumption against the plaintiff regarding his/her capability and willingness to perform the contract at such time.
5. In the event that a plaintiff fails to seek permission to deposit balance consideration at the time of filing the suit, a structured and judicious exercise of discretion by the trial court, in terms of section 22 of the Specific Relief Act requires that the trial court order the plaintiff to deposit balance consideration or financial security in lieu thereof, to determine that grant of relief of specific performance is not barred under section 24(b) of the Specific Relief Act, due to the incapability of the plaintiff to discharge his/her obligation under the contract specific performance of which is sought.
6. Where the trial court orders the plaintiff to deposit balance consideration within a fixed period to satisfy itself that the plaintiff is not barred from being granted the relief sought under section 24(b) of the Specific Relief Act, and the plaintiff fails to comply within the time fixed without justifiable cause to the satisfaction of the trial court, the court is vested with authority under Order XV-A to pass judgment or proceed to decide the suit forthwith under Order XVII Rule 3 of the CPC read with section 24(b) of the Specific Relief Act, without the need to issue any additional warning to the plaintiff (in view of the law laid down by the august Supreme Court in Syed Tahir Hussain Mehmoodi Versus Agha Syed Liaqat Ali (2014 SCMR 637) in relation to Order XVII Rule 3). If, however, the trial court is satisfied that the disqualification under section 24(b) of the Specific Relief Act is not attracted or the plaintiff ought to be granted further time to demonstrate his/her ability and intent to perform the contract in the facts and circumstances of the case it is not under a legal obligation to dismiss or decide the suit forthwith. The discretion in view of section 12 and 22 of the Specific Relief Act is vested in the trial court and the principles laid down by the august Supreme Court are for purposes of guidance in relation to exercise of such discretion by the trial court.
7. In an appropriate case, the trial court would be within its jurisdiction to dismiss a plaint seeking specific performance of a contract if it appears from the statement in the plaint that it is barred by law in view of section 24(b) of the Specific Relief Act, hence the need to state in the pleadings relevant facts regarding discharge of the plaintiff’s obligation under the contract the performance of which is sought. Likewise, the trial court may decide the suit in terms of Order XV-A or Order XVII Rule 3 of the CPC, in the event that it orders the plaintiff to deposit balance sale consideration payable under the contract and the plaintiff fails to comply with such order within the time period as initially fixed or subsequently extended by the trial court.
8. The question of extension of time period for deposit of balance consideration does not however apply once the trial court has issued a decree coupled with a condition requiring deposit of balance consideration within a certain prescribed period and has held that failing compliance with such condition the suit would stand dismissed. In such case (which would only arise where the trial court in its discretion does not require deposit of balance consideration at the initiation of the trial) the trial court becomes functus officio after the lapse of time fixed and is no longer vested with jurisdiction in relation to the lis.
9. Where the contract prescribes penal consequences for failure of a contracting party to discharge his/her obligation within a period prescribed, it would be deemed that it was within the contemplation of the parties in relation to sale of immovable property that time was of the essence for performance of the obligation under the contract and penal consequences such as forfeiture of any earnest money paid by the defaulting party would be given effect by the court if clearly provided in the contract the performance of which is being sought.
RFA No. 51 of 2013
Abdus Salam Khan Barki, etc. Vs Mian Pervaiz Akhtar, etc.
22-02-2022
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