PLJ 2022 Lahore 532 (DB)
Specific Relief Act, 1877 (I of 1877)--
----S. 12--Suit for specific performance was decreed--Agreement to sell--Earnest money was paid--Non-performance of agreement by appellant--Suit property was mortgaged against multiple loans--Extension of time for payment--Appellant was failed to redumption of suit property--Challenge to--Appellant/defendant, who failed to get redeemed suit property inspite of receiving half of consideration amount, could not blame respondents/plaintiffs/vendees that they failed to abide by their commitment in terms of agreement to sell--On one hand appellant received millions of rupees from respondents-vendees in part performance of contract and on other hand retained possession of suit property which fact also stands proof of fact that appellant-defendant was not ready to perform her part of contract--It cannot be believed that respondents- vendees were financially so feeble that they were not able to clear balance amount of consideration--It is proved on record that plaintiffs/respondents/vendees were ready to pay remaining consideration amount and were also willing to perform their part of agreement which could not be performed due to reluctance of defendant-appellant--We have not seen any illegality, irregularity and mis-reading or non-reading of evidence on part of trial Court while passing impugned judgment and decree--Findings of trial Court on question of facts and law having based upon proper appreciation of oral as well as documentary evidence produced in suit are not open to any interference--Appeal was dismissed.
[Pp. 549, 552, 557 & 558] B, C, F, G & H
Contract Act, 1872 (IX of 1872)--
----S. 55--Failure to performance of contract--Deals with effects of failure of a party to perform its part of contract where time is essence of contract and contracts where time is not essence of contract. [P. 544] A
Ref. PLD 2003 SC 430.
Specific Relief Act, 1877 (I of 1877)--
----S. 22--Grant of decree for specific performance-- A perusal of above-quoted provision shows that grant of decree for specific performance is discretionary in nature and such discretion should be justly exercised. [P. 553] D
Ref. 1994 SCMR 2189.
Discretionary relief--
----It is relevant to note over here that discretionary relief cannot be denied to a litigant, who otherwise is vigilant always ready and willing to perform his part of obligation, merely because his lis remained pending for many years in Court. [P. 554] E
Barrister Haris Azmat, Advocate for Appellant.
Mr. Mehmood Ahmad Bhatti, Advocate for Respondents.
Date of hearing: 21.2.2022.
PLJ 2022 Lahore 532 (DB)
Present: Shujaat Ali Khan and Ahmad Nadeem Arshad, JJ.
versus
LATIF SIDDIQUE and 2 others--Respondents
R.F.A. No. 17780 of 2021, decided on 21.2.2022.
Judgment
Ahmad Nadeem Arshad, J.--This Regular First Appeal under Section 96 of the Code of Civil Procedure, 1908 (CPC) has been directed against the judgment and decree dated 09.12.2020, passed by the learned Civil Judge, Sialkot whereby respondents-vendees suit for specific performance of agreements to sell was decreed.
2. Briefly, the facts, forming factual canvass of this appeal, are that appellant, being owner in possession of factory measuring 02 Kanal 06 Marla falling in Khewat No. 902, Khatoni No. 936 Kharsa No. 1337 situated within the revenue estate of Jiram Pur Said Pur, District Sialkot, entered into an agreement to sell with the respondents against total consideration of Rs. 6,75,00,000/- through agreement to sell dated 25.01.2016, which was followed by another agreement dated 30.04.2016. Out of total consideration amount, a sum of Rs. 100,00,000/- was paid by the respondents-vendees at the time of execution of agreement to sell dated 25.01.2016, whereas,
Rs. 2,37,50,000/- were to be paid by the respondents-vendees on 25.04.2016 while Rs. 1,68,75,000/- were to be paid on 25.09.2016 and the last instalment of Rs. 1,68,75,000/- was to be paid by the respondents-vendees on 31.12.2016. The respondents-vendees paid total sum of Rs. 3,37,50,000/- in terms of two agreements to sell. As the instalment due on 25.09.2016 was not paid by the respondents-vendees, the appellant served upon them a legal notice, dated 17.10.2016, sanitizing them to pay the due installment with the warning that in the event of their failure the agreement would stand revoked which was replied by the respondents-vendees inter-alia with the plea that since the appellant had not got issued NOC from the relevant department as the property was mortgaged with the bank against a loan, they were not bound to pay the installment(s). As a last resort, respondents-vendees filed suit for specific performance of agreements to sell dated 25.01.2016 on 24.01.2017, which was contested by the appellant inter-alia averring that since the respondents-vendees failed to perform their part of contract, they were not entitled to a decree for specific performance. Initially the Issues were framed by the learned trial Court on 12.04.2017, however, the same were re-casted on 22.11.2017 which are reproduced herein below:
ISSUES:-
1. Whether the plaintiffs were ready to pay the remaining consideration amount regarding suit property and they were also willing to perform their part of the agreement which could not be performed due to the reluctance of defendant? OPP.
2. Whether the plaintiffs are entitled to discretionary relief of specific performance if so at what grounds and to the what extent? OPP.
3. Whether the tenure mentioned in agreement to sell was essence of the contract but plaintiffs neither offered nor paid remaining consideration of suit property within stipulated period of time hence agreement to sell has been corrupted and impracticable? OPD.
4. Whether plaintiffs have no cause of action to bring this suit hence same is liable to be dismissed? OPD.
5. Relief.
3. To discharge their onus, Babar Siddique and Latif Siddique, two of the plaintiffs, appeared as PW-1 and P.W.3 while they examined their father Muhammad Siddique as PW-2. In addition to oral evidence, the respondents-vendees also produced in evidence 09 documents ranging from Exh.P-1 to Exh.P-9.
4. On the contrary, one Muhammad Aleem Tahir, special attorney of appellant-defendant appeared as DW-1 and tendered ten documents as Exh.D-1 to Exh.D-10.
5. Upon conclusion of the trial, the learned trial Court decreed the suit of the respondents-vendees vide judgment and decree dated 09.12.2020 and directed them to pay the outstanding amount of consideration within 30 days after encashment of the Defence Saving Certificates already purchased against the amount deposited by them during the pendency of the proceedings before the learned trial Court. Being aggrieved of the judgment and decree passed by the learned trial Court, the appellate preferred the instant appeal.
6. Learned counsel for the appellant submits that while decreeing the suit, the learned trial Court failed to consider that at the time of execution of first agreement to sell it was made clear to the respondents-vendees that the suit property was mortgaged with the bank and it was to be redeemed upon payment of entire amount of consideration by the respondents-vendees but when they failed to abide by their commitment as per agreement to sell, they were not entitled for decree for specific performance which otherwise being discretionary relief could not be claimed by anybody as a right. Adds that the learned trial Court while passing the impugned judgment and decree mainly relied upon the bank statements produced by the respondents-vendees as Exh.P-3 to Exh.P-5 but while doing so it omitted to note that the closing balance as per the bank statements produced by the respondents-vendees was not sufficient to pay the remaining amount of consideration. Further adds that in the legal notice the appellant asked the respondents-vendees to deposit the balance amount of consideration in the bank(s) with which the property was mortgaged but they failed to do so which fact on the one hand speaks volumes about the bona fide of the appellant towards completion of the contract and on the other stands proof of inaction on the part of the respondents- vendees towards payment of the balance amount. Argues that according to the latest view of the superior Courts, the intent of the vendee(s) to complete the agreement between the parties is discernable from his readiness to deposit the balance amount with the Court at the time of filing of suit for specific performance but the respondents-vendees did not do so until and unless they were compelled by the Court in that regard. Further, argues that non-serious attitude of the respondents-vendees is also vividly clear from the fact that firstly they deposited the balance amount with the Court but subsequently they succeeded to withdraw it and again they deposited the same after the decision of the suit. Contends that at the most the respondents-vendees were entitled for return of the paid amount but by no stretch of imagination they were entitled for a decree of specific performance. Further contends that though the appellant is not bound to return the amount received from the respondents-vendees but to show her bona fide she is ready to return the same. In support of his contentions, learned counsel for the appellant has relied upon the cases reported as “Sheikh Akhtar Aziz versus Mst. Shabnam Begum and others” (2019 SCMR 524), “Mst. Samina Riffat and others versus Rohail Asghar and others” (2021 SCMR 7), “Inayatullah Khan and others versus Shabir Ahmad Khan” (2021 SCMR 686), “Muhammad Jamil and others versus Muhammad Arif” (2021 SCMR 1108) and “Muhammad Yousaf versus Allah Ditta and others” (2021 SCMR 1241).
7. Conversely, learned counsel appearing on behalf of respondents-vendees, while defending the impugned judgment and decree, argues that since the cut-off date for final payment was 31.12.2016, the statements brought on record by his clients show that there were sufficient funds for payment of outstanding consideration amount, thus, the assertion of the learned counsel for the appellant that respondents-vendees did not have sufficient fund at the crucial date is against record thus it cannot be given any weightage. Adds that since no penal consequence were provided in the event of non-compliance of contract between the parties, the same could not be assumed by the learned trial Court at the whims of the appellant especially when she herself was responsible for non-performance of her part of the agreement; that in a suit for specific performance instead of deposit of cash in the Court, the capacity of the vendees has to be judged by the Court and when DW-1 in his cross examination admitted that respondents-vendees had the capacity to pay the balance amount, no illegality was committed by the learned trial Court while decreeing the suit; that bona fide and readiness of the respondents-vendees to perform their part of the contract in the shape of payment of balance amount is also evinced from the fact that while replying to the legal notice sent by the appellant, they stated in unequivocal words that they were ever ready to pay the balance but upon production of documents relating to redemption of suit property from the bank; that as a matter of fact the appellant defrauded the respondents-vendees as she did not disclose that the property was mortgaged against multiple loans availed by her; that when the appellant admitted during evidence that she had been receiving the installments against amount of consideration beyond the stipulated date, the time was not the essence of contract as alleged by the learned counsel for the appellant; that since the respondents-vendees deposited the balance amount before the learned trial Court, no adverse opinion could be formed against them on the ground that they did not do so at the time of filling of the suit as they could not deposit the amount without permission of the Court; that the application of the respondents-vendees before the learned trial Court for investment of the deposited amount in some profit bearing scheme stands proof of the fact that they were ever ready to perform their part of the contract; that prompt filing of the suit by the respondents- vendees within a month from the date of payment of last installment speaks volume about the fact that they were ever ready to perform their part of contract; that even during the evidence PW-1 stated in clear cut words that respondents- vendees were ready to pay the balance amount upon execution of formal sale deed by the plaintiff in their favour. To fortify his contentions, learned counsel for the respondents-vendees has relied upon the cases reported as “House Building Finance Cooperation versus Shahinshah Humayun Cooperative House Building Society and others (1992 SCMR 19), “Mrs. Mussarat Shaukat Ali versus Mrs. Safia Khatoon and others” (1994 SCMR 2189), Mst . AMINA BIBI versus Mudassar Aziz (PLD 2003 Supreme Court 430), “Hafiz Shaikh Anwar-Ul-Haque Through L.Rs. versus Jehan Khan and others (PLD 2011 Supreme Court 540) and “Muhammad Iqbal versus Mehboob Alam (2015 SCMR 21).
8. Learned counsel for the appellant, while exercise his right of rebuttal, submits that even if some part of the contract was performed by the respondents-vendees they were not entitled for decree of specific performance as held by the Hon’ble Supreme Court of Pakistan in case “Inayatullah Khan and others versus Shabir Ahmad Khan” (2021 SCMR 686). Adds that since respondents failed to pay the instalments were due on 25.09.2016 and 31.12.2016 the applicability of sufficient fund in their account on a subsequent date is immaterial.
9. We have heard learned counsel for the parties and have also perused the record of the learned trial Court in addition to the case-law cited at the bar.
10. There is no dispute with the facts that respondents-vendees entered into an agreement to sell dated 25.01.2016 with the appellant-defendant with regard to sale of the suit property for a consideration of Rs. 6,75,00,000/- (rupees six crores and seventy five lacs) in equal shares and paid Rs. 1,00,00,000/- (rupees one crore) as earnest money (Rs.25,00,000/- in cash and Rs. 75,00,000/- through three cheques). Balance consideration amount of Rs. 5,75,00,000/- was to be paid in three installments i.e. Rs. 2,37,50,000/- on 25.04.2016, Rs. 1,68,75,000/- on 25.09.2016 and Rs. 1,68,75,000/- on 31.12.2016. Another agreement was executed between the parties on 30.04.2016 for extension of the time for payment of second installment and as a result of it Rs. 2,00,00,000/- (rupees two crores) were paid through three different cheques and Rs. 37,50,000/- were paid on 27.05.2016 which acknowledged by the appellant-defendant through receipt (Exh.P.3). The dispute arose between the parties when third installment of Rs. 1,68,75,000/- was not paid on 25.09.2016. The appellant sent legal notice dated 17.10.2016 (Exh.D.1) which was duly replied by the respondents-vendees on 29.10.2016 (Exh.P.9). The appellant sent second notice on 12.01.2017 by informing that agreement was cancelled and earnest money was confiscated/forfeited. To resolve the controversy, respondents approached the Court by way of instituting the suit on 24.01.2017. It is also a matter of record that suit property was mortgaged with the Habib Metropolitan Bank through Mutations No. 4964 and 4282 as evident from two agreements (Exh.P.1 & Exh.P.2). During cross-examination, the attorney of appellant/defendant disclosed that third loan amounting to
Rs. 1,65,00,000/- was also availed by the appellant in year 2012 from Habib Metropolitan Bank and Mutation No. 3705 was sanctioned in this regard. In this background, we move to appreciate the arguments advanced by the respective counsel for the parties with reference to the evidence available on record.
11. Firstly taking up the foremost question as to whether the time was essence of the contract or not, we are of the view the same can be deciphered from the recitals of the agreements between the parties. For convenience of reference, agreement, executed between the parties on 25.01.2016, is reproduced herein below:-
From the perusal of the afore-quoted agreement, it appears that bargaining was struck between the parties for a total sale consideration of Rs. 6,75,00,000/- in equal share. An amount of one crore rupees was received from respondents as earnest money to the modes i.e. Rs. 25,00,000/- in cash and Rs. 75,00,000/- through three different cheques. It was further settled between them that
Rs. 2,37,50,000/- was to be paid on 25.04.2016 and remaining
Rs. 3,37,50,000/- was to be paid in two instalments, one on 25.09.2016 with regard to Rs. 1,68,75,000/- and second Rs. 1,68,75,000/- on 31.12.2016. Thereafter admittedly second agreement was executed between the parties on 30.04.2016 which for convenience of reference is reproduced herein below:
A cursory glance over the afore-quoted agreement brings it to limelight that with regard to payment of second instalment amounting to
Rs. 2,37,50,000/- on 25.04.2016 time was extended and it was settled that Rs. 2,00,00,000/- was to be given through three cheques, the detail are as under:
Rs. 67,00,000/- on 05.05.2016,
Rs. 67,00,000/- on 05.05.2016, &
Rs. 66,00,000/- on 05.05.2016.
The remaining amount of Rs. 37,50,000/- was to be paid within one month. On the backside of stamp paper a receipt was executed on 27.05.2016 (Exh.P.3) with regard to receipt of an amount of
Rs. 37,50,000/-, the details whereof are as under:
Rs.12,50,000/- through cheque dated 26.05.2016
Rs. 12,50,000/- through cheque dated 26.05.2016 &
Rs. 12,50,000/- in cash dated 27.05.2016.
In the above backdrop entering into further contract by the appellant was a sufficient indicator of the fact that time was not the essence of the contract. Due to the extension of time, the importance of the previous time frame had become redundant.
12. It is important to mention over here that in the contract relating to immovable property generally time is not the essence of the contract. The failure to perform part of contract by the date fixed in the agreement to sell i.e., for execution of the sale deed is not a ground for refusing relief of specific performance unless the circumstances must be highlighted and proved by the owner-vendor of the land that time is essence of the contract. Section 55 of the Contract Act, 1872 deals with the effects of the failure of a party to perform its part of the contract where time is essence of the contract and the contracts where the time is not the essence of the contract. For convenience of reference, the said provision is reproduced herein below:
Effect of failure to perform at fixed time, in contract in which time is essential When a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before a specified times, and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promisee, if the intention of the parties was that time should be of the essence of the contract.
Effect of such failure when time is not essential---If it was not the intention of the parties that time should be of the essence of the contract, the contract does not become voidable by the failure to do such thing at or before the specified time; but the promisee is entitled to compensation from the promisor for any loss occasioned to him by such failure.
Effect of acceptance of performance at time other than that agreed upon------If, in case of a contract voidable on account of the promisor's failure to perform his promise at the time agreed, the promisee accepts performance of such promise at any time other than that agreed, the promisee cannot claim compensation for any loss occasioned by the non-performance of the promise at the time agreed, unless, at the time of such acceptance he gives notice to the promisor of his intention to do so.
From above, it is vividly clear that intention to make time of the essence of the contract must be expressed in unmistakable language and it can be inferred from what passed between the parties before but not after the contract is made. A mere mention of a specified period in an agreement for completion of sale would not make the time as essence of the contract unless it is expressly intended by the parties and the terms of the contract do not permit any other interpretation. This question has to be decided according to the intention of the parties reflecting in the agreement, its terms, conduct of the parties after the agreement and all the attending circumstances. Reliance is placed upon the case reported as Mst. Amina Bibi versus Mudassar Aziz (PLD 2003 Supreme Court 430) wherein it has inter alia been held as under:
12.Generally speaking, specific performance of a contract of sale of immovable property has been granted by the Courts although there has been a failure to keep the dates assigned by it, if justice could be done between the parties and if nothing in (a) the express stipulation of the parties, (b) the nature of the property, or (c) the surrounding circumstances make it inequitable to grant the relief.
13. It is well-settled that intention to make time of the essence of the contract must be expressed in unmistakable language and it may be inferred from what passed between the parties before, but not after, the contract is made. A mere mention of a specified period of an agreement for completion of sale has been held as not to make the time of essence of the contract. In contracts of sale of immovable property, ordinarily, time is not considered to be the essence of the contract unless it was expressly intended by the parties and the terms of the contract do not permit of any other interpretation.
Similarly, in case of “Muhammad Hussain and others versus . Dr. Zahoor Alam (2010 SCMR 286) the issue, under discussion, was clinched in the following manner:
In the contract relating to immovable property time is not generally the essence of the contract in the failure to perform part of the contract by the date fixed in the agreement to sell i.e. for execution of sale deed is not a ground for refusing specific performance unless the circumstances must be highlighted and proved by the owner of the land that time is essence of the contract in view of the law laid down by this Court in various pronouncements. See Abdul Hamid‘s case (PLD 1962 SC 1) Seth Essabhy‘s case (PLD 1973 SC 39).‖
Moreover, the apex Court of the country in the matter of “Hafiz Shaikh Anwar-Ul-Haqure Through L.Rs. versus Jehan Khan and others (PLD 2011 Supreme Court 540) responded the query, under discussion, in the following words:
If time is extended for performance of a contract pertaining to immovable property, then time can never be enforced as of the contract.
Likewise, the august Supreme Court of Pakistan in case titled “Muhammad Abdur Rehman Qureshi versus Sagheer Ahmed” (2017 SCMR 1696) while interpreting that whether time is essence of the contract in the real estate transactions held as under:
It must be interpreted and applied specifically considering the facts and circumstances of each case to balance equities, keeping the standards of reasonability in mind and ensuring that injustice is not done to either side.
If the question as to whether the time was essence of the agreements entered between the parties is adjudged on the touchstone of the afore-referred judgments of the Hon’ble Supreme Court there leaves no ambiguity that according to the recitals of agreement to sell (Exh.P-1) the suit property was under mortgage and it was settled between the parties that it would be the duty of the appellant/vendor to get redeem the whole suit property. The respondents-vendees were to pay balance consideration amount in three installments. In this way, the said agreement to sell consisted of reciprocal promises to be simultaneously performed by the parties to the contract without any penalty for non- performance of the respective part of the contract. In this background, it can safely be concluded that the time was not essence of the contract.
13. A bird’s eye view over the appellant’s evidence shows that her attorney while recording his statement as DW-1 deposed that she received Rs. 3,37,50,000/- from the plaintiffs but did not pay even a single penny in bank from this amount. He volunteered that she (appellant-defendant) had been constructing a building due to which he could not make repayment of bank loan. The exact deposition is as under:
He admitted it correct that in the year 2012, defendant took a loan of Rs. 1,65,00,000/- from Habib Bank Metropolitan against which Mutation No. 3705 was sanctioned. He also admitted it correct that in the agreement to sell (Exh.P-1) the loan with regard to Mutation No. 3750 was not mentioned. The exact deposition in that regard is as under:
From above admission on the part of DW-1 it is abundantly clear that the appellant-respondent concealed material fact regarding availing of loan against Mutation No. 3750 meaning thereby that she kept the respondents-vendees in dark. In the case of “Said Muhammad v. Abdul Rehman” (1996 MLD 60) while dealing with the consequences of non-payment of balance amount where the title of the vendor is not clear it has inter alia been held that:
Plaintiff need not have offer to make balance amount to defendant on specified date for defendant‘s title was not perfect on the said date and defendant was not ready on the said date to perform his reciprocal of transfer of land in favour of the plaintiff
It is evident from the perusal of Exh.P-1 that the respondents/plaintiffs/vendees bound down themselves to pay remaining considering amount till 31.12.2016 and the date for execution of formal sale deed was settled as 31.12.2016. It was also settled that it was the duty of the appellant/defendant to get redeemed the whole suit property and she was liable to pay all dues. It was further settled that before registration, appellant/defendant/vendor will bound to deliver the possession within time after clearance of all dues and getting NOC from the bank and thereafter she would be bound to execute registered sale deed in favour of respondents/ plaintiffs/vendees and would also be entitled to receive the balance consideration amount and in the event of her denial to get registered the sale deed within time, the vendees would have a right to institute suit for specific performance at the costs of the appellant-defendant and if the vendees failed to get registered the sale deed within time, then earnest money would be forfeited and agreement would be deemed to be cancelled. Exact wording in the agreement to sell is as under:
The august Supreme Court of Pakistan in the case cited as “Mst. Rehmat and others versus Mst. Zubaida Begum and others (2021 SCMR 1534) while interpreting Section 51 of the Contract Act, 1872, concluded that in such situations time is not essence of the contract which is reproduced as under:
Clause 4 of the said agreement made it mandatory for the First Party‘ that is the vendor Mst. Ashfaq Jahan to obtain all documents necessary for registration of the suit property in the following terms:
4) That the FIRST PARTY shall obtain all documents necessary for registration of the said property in the name of the SECOND PARTY, namely:
i. Income Tax clearance certificate.
ii. No objection certificate from the Excise and Taxation Authority, Hyderabad.
iii. Certificate/Receipt showing payment of electricity and water charges.
iv. Mutation in the City Survey record kept in the City Survey Officer, Hyderabad.
11.Clause 4, of the agreement as reproduced above, reveals that the appellant No. 2 while acting as an attorney of his mother Mst. Ashfaq Jahan was required to procure all the documents noted therein, before the execution of sale deed. These conditions manifest that the agreement dated April 1973 contained reciprocal promises on the part of the vendor as well vendee and both the parties were required to perform their respective part of the contract in order to accomplish the sale transaction; however, the vendor failed to perform her part of reciprocal obligations and did not procured requisite documents, except the Income Tax Clearance Certificate; which is also apparent from the perusal of notices Ex.91, Ex.116, Ex.118. As the vendor Mst. Ashfaq Jahan herself failed to perform her part of contract, therefore, she could not rescind and revoke the agreement dated April 1973, after the delivery of possession of the suit property to the Respondent No. 1 and the receipt of a sum of Rs. 36000/- i.e. 80% of the total sale consideration in part performance of performance of sale transaction. It can safely be concluded that the time was never the essence of the agreement dated April 1973 and the failure on the part of the promisor/vendor to perform her part of contract could not put her into a position of rescinding or revoking the contract in terms of Section 51of the Contract Act, 1872.
14. A cursory glance over the agreement to sell reproduced in the preceding paragraphs it cannot be said that respondents/ plaintiffs/ vendees will have to face the consequence of non-payment of consideration amount within the stipulated time. Firstly, it was the duty of the appellant to fulfill the obligation imposed upon her in Exh.P-1 then she could attribute the failure on the part of respondents/plaintiffs/vendees followed by the forfeiture of their earnest money and cancellation of the agreement. The appellant/ defendant, who failed to get redeemed the suit property inspite of receiving half of the consideration amount, could not blame the respondents/plaintiffs/vendees that they failed to abide by their commitment in terms of agreement to sell.
15. Considering from another angle, the conduct of the parties of a contract are very relevant to determine the question as to whether the time was the essence of contract or not. Insofar as the case in hand is concerned, suffice it to note that admission on the part of DW-1 that a partial amount of consideration was being received by the appellant even beyond the cutoff date mentioned in the agreement to sell which proves that the time was not essence of contract. Exact deposition is as under:
16. During the course of arguments learned counsel for the appellant emphatically pleaded that since respondents-vendees failed to pay Rs. 1,68,75,000/- by 25.09.2016 as they agreed in the agreement to sell they were not entitled for decree for specific performance. In this regard, we do not see eye to eye with the learned counsel for the appellant for the reason that while replying to the legal notice of the appellant, the respondents-vendees showed their readiness to pay the balance amount but with the condition that the appellant should perform her part of the contract towards issuance of NOC by the financial institutions with which the suit property was mortgaged. For ready reference the reply submitted by the respondents- vendees to the legal notice got issued by the appellant is reproduced as under:
The appellant failed to give replication of said reply and in this regard D.W.1 admitted in the following manner:
"پھر کہا کہ اس جواب نوٹس کا میں نے جواب نہ دیا تھا۔"
If the plea of the parties is considered and put in juxtaposition, there leaves no doubt that the respondents- vendees were ever ready to perform their part of the contract.
17. There is no cavil with the proposition that it is not incumbent upon the Court to decree every suit for specific performance if the circumstances of the case require otherwise. As far as the case in hand is concerned, despite addressing the Court at length, learned counsel for the appellant has not been able to convince us with solid reason as to why the suit of the respondents-vendees could not be decreed. It is admitted proposition that on the one hand the appellant received millions of rupees from the respondents-vendees in part performance of the contract and on the other hand retained the possession of the suit property which fact also stands proof of the fact that the appellant-defendant was not ready to perform her part of the contract.
18. It is relevant to note that Section 22 of the Specific Relief Act, 1877 deals with discretion to grant of decree for specific performance. The said provision is reproduced herein below:-
22. Discretion as to decreeing specific performance.--The jurisdiction to decree specific performance is discretionary, and the Court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the Court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a Court of appeal.
The following are cases in which the Court may properly exercise a discretion not to decree specific performance:
(I) Where the circumstances under which the contract is made are such as to give the plaintiff an unfair advantage over the defendant, though there may be no fraud or misrepresentation on the plaintiff‘s part.
(II) Where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance would involve no such hardship on the plaintiff.
(III) Where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance.
A perusal of above-quoted provision shows that grant of decree for specific performance is discretionary in nature and such discretion should be justly exercised. The Hon’ble Supreme Court of Pakistan in the case reported as “Mrs Mussarat Shaukat Ali versus Mrs. Safia Khatoon and others” (1994 SCMR 2189) highlighted the principles for grant of decree for specific performance in the following words:
It is true that grant of relief of specific performance is discretionary with the Court but this discretion cannot be exercised arbitrarily. The relief of specific performance being an equitable relief, it can be refused by the Court only if the equities in the case are against the plaintiff. The Court while refusing to grant a decree for specific performance to a plaintiff must find some thing in the conduct of plaintiff which disentitled him to the grant of equitable relief of specific performance, or the Court reaches the conclusion that on account of delay in seeking the relief, the circumstances have so materially changed that it would be unjust to enforce the agreement specifically. The specific performance of a contract cannot be refused merely – because it is lawful for the Court to refuse it. Section 22 of the Specific Relief Act, though not a exhaustive provides some instances in which the specific relief of a contract may be refused by the Court in its jurisdiction.
It was further held in “Liaqat Ali Khan and others versus Falak Sher and others” (PLD 2014 Supreme Court 506) that
A plain reading of above reproduced statutory provision leads to a definite conclusion that the role of specific performance claimed by Respondents Nos.1 to 4 in their suit is, purely discretionary in nature and the Court is not bound to grant such relief merely as it is lawful to do so. At the same time, the discretion to be exercised by the Court shall not be arbitrary, but it should be based on sound and reasonable analysis of the relevant facts of each case, guided by judicial principles and capable of correction by a Court of appeal. Moreover, in sub-paragraphs Nos.i, ii and iii of Section 22 (ibid) some instances have been given, wherein the Court can refuse to exercise its discretion to pass a decree for specific performance. A careful reading of these instances, which are self-explanatory, further amplify vast powers of the Court in the matter of exercise of its discretion for ordering specific performance or otherwise. When the above reproduced provision of law is read in conjunction with the case law cited at the Bar by both the learned Senior Advocate Supreme Courts, the things as regards powers of the Court in exercising its discretion, became even more clear that there is no two plus two, equal to four formula available with any Court of law for this purpose, which can be applied through cut and paste device to all cases of such nature. Conversely, it will be the peculiar facts and circumstances of each case, particularly, there terms of the agreement between the parties, its language, their subsequent conduct and other surrounding circumstances, which will enable the Court to decide whether the discretion in terms of section22(ibid) ought to be exercised in favour of specific performance or not. Besides, some well articulated judgments on the subject, have further broadened the scope of exercise of such discretion of the Court by way of awarding reasonable compensation to the parties, keeping in view the other surrounding circumstances, such as rate of inflation, having direct bearing the value of suit property, inordinate delay/passage of time, and change in the circumstances or status of the subject property etc.
Moreover, the issue, under discussion, has elaborately been dealt with in case of “Mrs. Zakia Hussain and another versus Syed Farooq Hussain” (PLD 2020 Supreme Court 401) in the following manner:
It is time and again held by this Court that specific performance of a contract is essentially an equitable and discretionary relief and the Court seized of the matter is in a better position to decide and resolve not simply according to the spirit of the law but also in accordance with the principles of substantial justice by keeping in mind peculiar facts and circumstance of each case. It cannot be claimed as a matter of right. The discretion to be exercised by the Court requires that it should not be arbitrary but should be sound and reasonable guided by judicial principles and capable of correction by a Court of appeal. Such an exercise of grant or refusal of relief would depend on the facts and circumstances of each case and also the conduct of the parties.
19. It is relevant to note over here that discretionary relief cannot be denied to a litigant, who otherwise is vigilant always ready and willing to perform his part of obligation, merely because his lis remained pending for many years in the Court. Increase of price of the property during the time when causes remain pending in Courts, not ipso facto disentitles the purchaser to seek discretionary relief of specific performance. Rise in the price of the property may be relevant factor in denying the relief of specific performance, keeping in view the conduct of the vendee, date of agreement of sale, time agreed to performance and time of filing of the suit before trial Court. In the present case, time for performance of the agreement to sell was 31.12.2016, respondents instituted their suit for specific performance on 24.01.2017 just after 24 days and deposited the balance sale consideration in terms of the order passed by the Court despite the fact that they were not in possession of the suit property. The said fact alone is sufficient to prove bona fide of the respondents-vendees towards performance of their part of the contract.
20. It is also discernable from the record that the amount received by the appellant-defendant from the respondents-vendees was utilized by her for raising construction at some other site but despite that she averred that she suffered loss of about one million without specifying the reason as to why she did not get redeemed the suit property from the bank after repayment of the loan availed by her.
21. It is very astonishing to note that on the one hand the stance of the appellant is that she could not get redeemed the suit property from the bank as the respondents-vendees did not pay the entire outstanding amount of consideration but on the other hand she had no explanation for the fact as to why she did not pay the amount already received from the respondents-vendees to the bank for redemption of the suit property. Had there been any bona fide on the part of the appellant, it was foremost for her to firstly clear her liability towards the bank and then to think about investment at some other site. As the appellant was not ready to execute formal sale deed after getting the suit property clear from bank, the respondents- vendees rightly withheld the payment of balance amount especially when the possession of the suit property was also with the appellant.
22. During the course of arguments, learned counsel for the appellant offered for return of the amount received by the appellant from the respondents-vendees as partial payment of the consideration amount, the same is of no worth at this stage as after passing the decree in their favour, a vested right has already accrued in their favour and this Court cannot compel them to receive the said amount and desist from the deal as according to the own showing of the appellant the price of the suit property had increased reasonably.
23. Now coming to the financial position of the respondents/ plaintiffs/vendees to liquidate their liability towards payment of the balance amount we are of the view that according to three bank statements brought on record as Exh.P.3, Exh.P.4 and Exh.P.5 they had sufficient funds in their accounts to clear the balance amount till 31.12.2016. Further, PW-1 during his testimony stated as under:
P.W.1 in his statement further deposed that they contacted the appellant to get the property redeemed and visit the bank for this purpose but she had neither paid the loan nor released the property. Exact deposition is as under:
As against the above, D.W.1, during cross-examination deposed that plaintiffs are dealing with business of motorcycles and schools. He further deposed that plaintiffs had their petrol pumps. He did not deny specifically that plaintiffs are running business of trillions. Exact deposition is as under:
In view of above it cannot be believed that the respondents- vendees were financially so feeble that they were not able to clear the balance amount of consideration.
24. In nutshell, it is proved on the record that plaintiffs/ respondents/vendees were ready to pay the remaining consideration amount and were also willing to perform their part of the agreement which could not be performed due to the reluctance of defendant-appellant. The learned trial Court, keeping in view the facts & evidence of the parties, rightly decided issues No. 1 to 3 in favour of the respondents/plaintiffs.
25. During the course of arguments, learned counsel for the appellant ferociously pleaded that since the respondents-vendees did not offer for the deposit of balance amount at the time of filing of the suit, they were not entitled for decree for specific performance of agreements to sell. Perhaps learned counsel for the appellant has raised such plea in oblivion of order dated 18.01.2018 passed by the learned trial Court which clearly shows that the learned counsel for the respondents-vendees offered for payment of remaining consideration amount and investment of said outstanding amount of Rs. 3,37,50,000/- in some profit bearing scheme and accordingly they purchased Defence Saving Certificate as is evident from the concluding paragraph of the impugned judgment and statement of P.W.1 whereby the said witness produced certificates amounting to Rs. 3,37,60,000/- for perusal of the Court which were returned after perusal. Exact deposition of PW-1 in that regard is as under:
26. While arguing the matter, the learned counsel for the appellant took specific plea that since respondents- vendees withdrew the amount deposited with the learned trial Court, they were not entitled to decree for specific performance. While pleading so, learned counsel for the appellant omitted to note that respondents-vendees invested the balance amount for purchase of Defence Saving Certificates, copies whereof were produced by the learned counsel for the respondent-vendees and the said fact stands affirmed from the concluding paragraph of the impugned judgment and decree, wherein the learned trial Court clearly mentioned that the respondent-vendees
shall pay the balance amount within 30 days after getting encashed the Defence Saving Certificate, thus the said plea of the learned counsel for the appellant is without any substance.
27. So far as the case-law referred by the learned counsel for the appellant is concerned, suffice it to note that the same is not applicable to the peculiar facts and circumstances of the presence case for the reason that in none of the said cases it has been held that the vendee can be denied the decree for specific relief even if the vendor(s) fails to get redeemed the suit property admittedly mortgaged with any financial institution against loan availed by the vendor(s).
28. We have not seen any illegality, irregularity and mis-reading or non-reading of evidence on the part of learned trial Court while passing the impugned judgment and decree. The findings of the learned trial Court on question of facts and law having based upon proper appreciation of oral as well as documentary evidence produced in the suit are not open to any interference.
29. The epitome of above discussion is that instant Regular First Appeal is without any merits and substance, hence, the same is, hereby dismissed with no order as to costs.
(Y.A.) Appeal dismissed
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