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Petitioner: MUHAMMAD YOUSUF VS Respondent: Messrs UROOJ (PRIVATE) LTD. through Managing
Court Name: Sindh High Court Judge(s): Shabbir Ahmed Title:MUHAMMAD YOUSUF vs Messrs UROOJ (PRIVATE) LTD. through Managing
JUDGMENT
Reported As: PLD 2003 Karachi 16 Result: Order accordingly Judgment JUDGMENT Through C.M.A. No,9440 of 2002 under Order 39, rules 1 and 2 read with section 151, C.P.C., the plaintiff seeks prohibitory injunction against the defendants restraining them, their agents, successors, attorneys, representatives and assigns from transferring, selling, gifting, encumbering, alienating or in any manner creating third party interest in the suit property comprising 47 shops situated on ground floor of Allah Wala Market on Plot No,RB-7/11, M.A. Jinnah Road, Karachi till the decision of the suit. The application is supported by affidavit of the plaintiff. Brief facts for the purpose of disposal of the present application are that defendant No,1 is owner of building on Plot No, RB-7/11, popularly known as Allah Wala Market situated on M.A. Jinnah Road, Karachi. It is case of the plaintiff that the plaintiff entered into a Sale Agreement with defendant No,1 through their attorney (defendant No,2) for the purchase of 47 shops on ground floor detailed in the Agreement dated 26-6-2001 (hereinafter referred to as the suit property) on the following terms and conditions:-- "(1) That the total Agreed Sale Consideration for the said 47 shops occupied by the tenants named above, to be got vacated by the Sellers, shall be Rs,42,300,000 (Rupees forty-two million and three hundred thousand) only, payable by the Buyer to the Sellers as under:-- (2) That the Buyer has, simultaneously with the signing of this Instrument of Sale, paid a sum of Rs,25,000,000 (Rupees two million, five hundred thousand) only in cash, to the Sellers as part payment of the Agreed Sale Consideration of Rs,4,23,00,000 (Rupees forty-two million and three thousand).
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(3) The Sellers, apart from a separate receipt issued in token of their having received the said part payment of Rs,25,00,000 (Rupees two million five hundred thousand) only, as stated above, also acknowledged and admit to have so received the said part payment from the buyer from the same and every part thereof." It is case of the plaintiff that at the time of execution of the said Agreement a sum of Rs,25 lacs was paid in cash against receipt executed by defendant No,2. The Plaintiff came to know about advertisement in daily Jang, Karachi dated 11-6-2001, whereby defendant No,1 through Javed Khalid, Mst. Nuzhat and Mst. Sultan Begum, Managing Director and Directors respectively purportedly notified for the general information that the registered power of attorney dated 29-4- 2000 executed by them in favour of defendant No,2 in respect of the suit property has been revoked and cancelled. As a consequence thereof, the plaintiff served notice dated 25th July, 2001 upon the defendant No,1, inter alia, reiterating the existence of the Agreement for sale between the plaintiff and the defendant No,1 and maintained that notwithstanding purported cancellation of power of attorney the agreement for sale in respect of the suit property between the parties was lawful and binding transaction/contact. The plaintiff also intimated the defendants that he was and is ready and willing to perform his part of the contractual obligation arising out of the said agreement and the plaintiff is still willing to perform the contractual obligation. Legal notice was replied admitting publication of notice for cancellation of registered power of attorney but denied having any knowledge of the agreement of sale dated 26-6-2001 and requested the plaintiff for supply of a copy of the said agreement. Defendant No,2 admitted the execution of the agreement by him as general attorney of defendant No,1 in respect of the suit property and maintained that it was within the knowledge of defendant No, 1 . Further correspondence was exchanged between the parties. Hence suit for Specific Performance of Contract and Permanent Injunction has been filed alongwith application under disposal supported by affidavit of Muhammad Yousuf, plaintiff, wherein it has been reiterated that the defendants have joined their hands in order to defeat lawful right of the plaintiff and for mala fide purpose they are attempting to dispose of the property and create third party interest in the suit property and in case injunction is not granted, the purpose of filing the suit will be frustrated. He was and is ready to perform the contractual obligations and has good prima facie case and balance of convenience also lies in his favour and if the injunction is not granted, he shall be seriously prejudiced and shall suffer irreparable loss which cannot be compensated in terms of money. The application has been contested by learned counsel for defendant No,1 by filing counter- affidavit of Javed Khalid, Managing Director and attorney of defendant No,1, whereby the agreement for sale dated 26-6-2001 or any other agreement was denied with the plaintiff. It has been pleaded that the agreement for sale has been fraudulently and collusively been manipulated between the plaintiff and defendant No,2, which has been referred as "fraudulent agreement" of sale and the entire suit is collusive and liable to be dismissed with costs in terms of clause (2) of the Memorandum of Understanding (hereinafter referred to as M.O.U.) dated 29-4-2000, which expressly provides that the attorney will take prior consent of the principal in writing regarding change of tenants, sale/transfer/ownership of any shop. No consent was ever obtained from them, which is contrary to the expressed provisions of M.O.U, hence the entire transaction under, the garb of fraudulent agreement for sale is without lawful authority and no effect. Copy of the M.O.U. Was also annexed. They have also denied receipt of any consideration and maintained that defendant No,2 had no authority to sell any shop but only negotiated and to bring the buyer for the sale of the shops on the ground floor of the suit property. It was also maintained that the defendant was fully entitled to revoke the power of attorney, which is revocable. Defendant No,2 was acting in capacity of broker and he was to be paid a sum of Rs,50,000 as commission for the sale of each shop, as such the plaintiff has no right, title or interest of any kind. The receipt of legal notice was admitted.
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They also maintained that the question of performance, readiness and willingness to perform the contractual obligation arising out of the said agreement does not arise as there is no agreement of sale in existence between the plaintiff and answering defendant. The agreement is untransferable and unconscionable as defendant No,2 has attempted to create a cloud on the title of the defendant to the suit property for parting a sum of Rs,2.5 million with payment of balance amount of Rs,3,98,00,000 after three years which is entirely absurd and contrary to usage, custom and practice with regard to the sale of the immovable property. Prima facie the agreement is collusive, forged, predated and executed after execution of power of attorney. The answering defendant has right to create third party interest in the suit property. Neither plaintiff nor defendant No,2 has .Any right or title or interest in the suit property in absence of any contract between the plaintiff and the answering defendant. The balance of convenience lies in favour of the answering defendant, who shall be seriously prejudiced and shall suffer irreparable loss and injury unless the said application is dismissed with cost. Defendant No,2 also filed counter-affidavit and supported the plaintiff by admitting that agreement was entered into by him in exercise of powers vested in him under the general power of attorney under clause (iv) thereof. He was authorized by defendant to initiate for sale of the suit property. He also admitted the M.O.U. Dated 29-4-2000 between him and defendant No,1 for the sale of shops on the ground floor of Allahwala Market. In consideration of said M.O.U., the power of attorney in his favour was for valuable consideration and it cannot be cancelled or revoked by the defendant. Defendant No,1 with ulterior motives, illegally and mala fide intention on 7th July, 2001 cancelled the power of attorney and made allegations against him publicly and contended that the said act of commission and omission on the part of defendant No,1 agreement in favour of the plaintiff was cancelled, as attorney he was also put to loss. Consequently, he invoked arbitration clause appearing in M.O.U.. The Arbitrators have given their award for the enforcement whereof and he intends to seek legal remedy against them. He maintained that on the contrary he suffered on account of defendant No,1 and have been deprived of the benefits under M.O.U. Affidavit in rejoinder was also filed, wherein it was specifically denied that the agreement for sale was either fraudulent or collusive or manipulated and denied that M.O.U. Was not within his knowledge at the relevant time and it was also maintained that the power of attorney being registered document no revocation has been executed. Defendant No,2 has exercised power given to him under the said M.O.U. Inasmuch as Jie had appeared before the Sub-Registrar and executed document for sale in respect of numerous shops in the said Allahwala Market. One registered sub- lease dated 25th November, 2000 in respect of Shop No,50 Allahwala Market in favour of Dost Muhammad Khan executed by defendant No,2 as a Director was also referred. I have heard Mr. Rasheed A. Razvi learned counsel for the plaintiff in support of the application, Mr. Kamal Azfar, learned counsel for defendant No,1 and M.G. Dastagir, learned counsel for defendant No,2. Mr. Kamal Azfar has vehemently contested the application whereas Mr. Dastagir supported the plaintiff by maintaining that the agreement was executed between the plaintiff and defendant No,2 on behalf of defendant No,1 in respect of sale of the suit property in terms of power of attorney and M.O.U. Executed on the same day and denied the collusiveness between the defendant No,2 and the plaintiff. During the course of hearing, Mr. Kamal Azfar, learned counsel for the defendant No,1 stated that though the agreement and the receipt of part payment in the sum of Rs,2,500,000 has been denied by the defendant yet the defendant would have no objection for the grant of application under disposal provided the plaintiff deposits the balance sale consideration of Rs,39,800,000 in Court within a period specified by this Court.
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On such statement, Mr. Rasheed A. Razvi, learned counsel for the plaintiff sought time to seek instructions. On 18-4-2002 a detailed statement was filed in Court. The sum and substance of the said statement is that at this stage in absence of possession the plaintiff is liable to pay Rs,3,60,000 per shop for 47 shops in terms of clauses (5), (6) and (7) of the Agreement and the total amount comes to Rs,16,929,2000 after deducting Rs,25,00,000 already paid and the balance sale consideration comes to Rs,1,44,20,000, the plaintiff is willing to furnish surety in the aforesaid amount to the satisfaction of the Nazir of this Court and defendant No,1 be put to terms to deposit a sum of Rs,25,00,000, which they have already received as advance payment. The statement referred to above is not in conformity with the proposal given by Mr. Kamal Azfar, as such the same was not acceptable to the defendant. Therefore, the matter has been argued by learned counsel for the parties. Mr. Rasheed A. Razvi learned counsel for the plaintiff contended that the plaintiff entered into Sale Agreement with defendant No,1 through their legally constituted attorney, defendant No,2, for purchase of 47 shops on ground floor in the market commonly known as Allahwala Market by agreement dated 26-6-2001. The plaintiff has parted with a sum of Rs,25,00,000 as part payment of the agreed sale consideration, which was Rs,4,23,00,000 payable by the plaintiff to the defendant in terms of agreement. The balance was payable within 3 years from the date of execution subject to vacation of shops by tenants, which was responsibility of defendant No, 1 . In case of inability to get the shops detailed in the agreement, vacated by tenants then the sale price of per shop at reduced price of Rs,3,60,000 and in terms of para. 5, in case defendant No,1 is not able to get the main lease renewed and failure to get the said shops vacated from respective tenants the buyer had option to acquire by purchasing the suit ' shops on payment of 40% of the agreed consideration viz. Rs,1,69,20,000. His further contention was that the time limit for execution of the sale-deed was three years. The plaintiff in the month of July, 2000 came across an advertisement in Daily Jang, dated 11th July, 2000 regarding cancellation of power of attorney of defendant No,2, which according to him was irrevocable. His further submission was that the Power of Attorney was registered one and till date no deed has been brought to light regarding cancellation of power of attorney nor the defendant has filed any such document excepting notice. His further contention was that the registered document viz. Power of Attorney has not been cancelled by the registered document nor it can be cancelled as clauses 1, 4 and 17 of the same give to defendant No,2 power of sale, who has entered into a sale agreement and right has been created in favour of plaintiff. Legal notice dated 25-7-2001 was sent to the defendant. It was replied. The correspondence exchanged between the plaintiff and defendant whereby the privity of contract was denied by defendant No,1 through their correspondence dated 30th October, 2001 addressed to the plaintiff. His contention was that the Agency is coupled with interest, therefore, defendant No,1 were not entitled to revoke the same, which was executed on 29th April, 2001. His contention was that on/he same day M.O.U. Was also executed between defendants Nos.1 and 2. This fact was not known to the plaintiff at the time of agreement and acquired knowledge by notice dated 21-8-2000 of Mr. M.G. Dastagir, Advocate, addressed to Syed Qasim Wasti & Co. And a copy of the same was sent to plaintiff's Advocate and a copy of the same has been filed by , defendant No,1 with their written statement. His further submission was that. Case of the defendant No,1 is that they have not authorized the defendant to sell the shops though their attorney entered into sale agreement and executed sub-lease in favour of Dost Muhammad and Yousuf Iqbal. The execution whereof has not been denied. No C/A has been filed. Mr. Razvi submission was that the question for determination in the suit is whether power of attorney was coupled with interest or simple power whether registered power of attorney can be cancelled without registering cancellation deed. Whether agreement executed by agent is binding on defendant No,1, whether in the circumstances plaintiff is entitled for relief of specific performance.
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Mr. Rasheed A. Razvi, learned counsel for the plaintiff contended that in order to seek injunction a party has to make out a prima facie case and balance of convenience in his favour and in case of refusal to grant injunction by Court, irreparable loss that cannot be compensated in terms of money. He contended that the term "prima facie case" has been interpreted by a Division Bench of this Court in case of Muhammad Mateen v. Mrs. Dino Mankji Chinoy PLD 1983 Kar. 387 by Abdul Hayee Kureshi, Actg. C.J., who authored the judgment on behalf of the Bench following the view taken in Sui Gas Transmission Company v. Sui Gas Employees' Union 1977 SCM R 220 that prima facie case would be spell out if a serious question of law, or fact was raised in the plaint, on which the parties have to go to trial. In such enquiry, the objection by the defendants even as to maintainability of the suit will not be a proper criterion. The view taken in the case of S.N. Gupta v. Sadanand Gosh PLD 1960 Dacca 153 was also considered with regard to the entitlement of the plaintiff to obtain an injunction, as distinct from succeeding in a suit for specific performance. The legal position assimilated by Sardar Muhammad Iqbal Khan in his textbook on Specific Relief Act, 1981 Edition at page 652, and the legal position has been summarized in the following words:-- "Though reliefs by specific performance and by injunction belong to the same branch of law, yet there is a distinction between the remedies in that specific performance is directed to compel the performance of an active duty while an injunction is generally directed to prevent the violation of a negative duty.. The Court by an injunction ties up the hands of the defendant and preserves unchanged not only the property itself but also the relation of all the parties thereto. Again relief by way of issue of an injunction is granted by the principle of quia timet, and if the Court finds that there is a substantial question to be investigated and the matter to be preserved in status quo till the final determination of that question, it is a sufficient ground for granting an injunction. No doubt the burden on the plaintiff seeking an injunction by an interlocutory application is not as onerous as the burden would be for succeeding in obtaining a decree for specific performance. It would appear that all that the plaintiff needs to establish is that there is a prima facie existence of a right and a threatened infringement, and once he succeeds in showing this, he could obtain an injunction. In pursuit of a finding, the Court has not to enter into minute and detailed discussion in regard to merits, although a limited examination of the legal aspects in the case would be permissible. On the other hand, the Court will only look to the difficulty in resolving the points that arise in the case and, if it is of the view that a substantial, or, serious question of law, or fact arises, the requirement of having a prima facie case would be satisfied. This may be termed even as the plaintiff having an arguable case, as distinct from the plaintiff having no right at all, or the plaint making fanciful, or frivolous claims. In such an enquiry, the Court will also keep in its mind the substance of the stake involved, for example, the value of the property, and the loss that might be occasioned to one, or the other party by the refusal or grant of an injunction." Mr. Rasheed A. Razvi maintained that agency' is coupled with interest and to substantiate his contention has referred the power of attorney as well as M.O.U. To contend that the authority coupled with interest in favour of defendant No,2 has been treated, as such power of attorney is not revocable and referred case of Syed Shafique Hussian v. Syed Abdul Qasim PLD 1979 Kar. 22, wherein it was held that it is not necessary that express mention of the interest be made in document itself, as language of section 202 of the Contract Act is wider and what is necessary under the said section is that the agent should have an interest in the property forming the subject-matter of the agency which may be inferred either from the document or from the course of dealings between the parties and, I would add, from the other surrounding circumstances. In other words, it is the existence of the interest, not the mode in which it is given, that is of importance. In reaching above conclusion, the meaning of phrase "coupled with interest" as defined by Chief Justice Marshal in Hunt v. Ransmanier 8 Wheat 147-5L Edn.589, was also referred, "it becomes
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necessary to inquire what is meant by the expression a power coupled with an interest? Is it an interest in the subject on which the power is to be exercised? Or is it an interest in that which is produced by the exercise of the power? We hold it to be clear that the interest which can protect a power after the death of a person who creates it must be an interest in the thing itself. In other words, the power must be in grafted on an estate in the thing. The words themselves seem to import this meaning. 'A power coupled with an interest' is a power which accompanies or is connected with an interest. The power and the interest are united in the same person. But if we are to understand by the word 'interest' an interest in that which is to be produced by the exercise of the power, then they are never united. The power to produce the interest, must be exercised, and by its exercise, is extinguished. The power ceases when the interest commences, and therefore, cannot, in accurate law language, be said to be coupled with it. The above statement of law was referred in Tod v. Superior Court (1991) 7 ALR 938-184 Pac. 684. The Division Bench of Madras High Court while dealing with section 202 of the Contract Act in Palani Vannan and others v. Krishnaswami Kanar and others AIR 1946 Mad. 9, observed that the section did not more than state the effect of the English decisions under common law, and effect of all these cases appears to be stated accurately in Bowstead on the Law of Agency, Edition 8, page 456 Article 138, where the authority of an agent is given for the purpose of effectuating any security or of protecting or securing any interest of the agent, it is irrevocable during the subsisting of such security or interest. Section 202 was also interpreted in case of Kondayya Chetti v. Narasimhula Chetti ILR 20 Mad. 97, by Division Bench of Madras High Court while explaining the true scope of the section observed that section 202 was wider in terms and in the section itself all that is necessary is that the agent should himself have 'an interest in the property' to be sold, and it seems to us that such interest may be inferred from the language of the document and from the course of dealings between the parties and need not be expressly given. It is the existence of an interest not the mode in which it is given, that is of importance. Mr. Rasheed Ahmad Razvi was confronted with the query whether remuneration or commission of the agent could be equated with term "coupled with interest" then he referred case of M.A. Effendi v. Egypt Air 1980 SCM R 588, wherein the plaintiff was appointed Sale Agent by Egypt Air Company. They cancelled agency and tried to resume it by appointing someone else as their sale agent. There were charges of non-payment and misappropriation against the agency by the Egypt Air. They filed suit for declaration and also prayed for interim injunction, which was dismissed. Appeal filed by the plaintiff before the Supreme Court. Injunction was granted. While granting leave to appeal observation was made that the case involves substantial questions of law and fact and the questions formulated were as under:-- (i) Whether the plaintiff is entitled to continue the agency and or claim damages from the principal on the pleadings as made by him in his plaint and if so to what ultimate relief he will be entitled on the facts and in the overall circumstances of the case? (ii) Under what circumstances a contract of agency of the kind involved in this case could be cancelled or revoked by a principal? Mr. Rasheed A. Razvi also referred case of Zubair v. Pakistan State Oil PLD 1987 Kara 112, wherein injunction against the cancellation of dealership of the petitioner following dictum of Egypt Air was granted. Mr. Rasheed A. Razvi also referred case of Anis v. Anwar Hussain 1992 CLC 2137. In this case the respondent had irrevocably appointed Mumtaz Hussain husband of the petitioner as general attorney to deal with the disputed property in any manner he likes. In this background it was taken latter as agent of the former acquired interest in the property forming part of the agency within meaning of section 202 of the Contract. Thus principal was not competent to revoke the authority given to Mumtaz Hussain as general attorney.
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Mr. Kamal Azfar conversely contested the assertions made on behalf of the plaintiff and contended the power of attorney executed in favour of defendant No,2 does not show the power to alienate or sell and contended that the power of attorney is to be construed strictly and nothing can be added to give power to attorney which has not been given. He maintained that paras. 1, 4 and 17 referred to by the learned counsel for the plaintiff, if perused then the same will not confer power on the Attorney to sell. The relevant clauses (1). (4) and (17) are as follows:-- Clause (1). To manage, administer, look after of the affairs of the property known as. Allahwala Market and the shops on the ground floor to deal with and generally to do all such acts, deeds and things, which we can do personally. Clause (4). To negotiate and bring buyers for the sale of shops on the ground floor property…
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