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Petitioner: Mst. BATUL and 4 others VS Respondent: Mst. RAZIA FAZAL and 9 others
Court Name: Sindh High Court Judge(s): Syed Deedar Hussain Shah, Ikram Ahmed Ansari Title: Mst. BATUL and 4 others vs Mst. RAZIA FAZAL and 9 others Case No.: High Court Appeal No, 145 of 1995 Date of Judgment:1998-05-20 Reported As: 1998 MLD 1933 Result: Appeal Dismissed.
JUDGMENT
JUDGMENT SYED DEEDAR HUSSAIN SHAH, J.---Respondents/plaintiffs filed suit for specific performance of the contract against appellant/defendants bearing Suit No,149 of 1988. The case of the respondents in brief is that the appellants/defendants are sister inter se and are co-owners of property plot of land bearing survey No,1 Sheet No,K.G.8 situated at Ghulam Hussain Qasim Quarters, Kharadar, Karachi measuring 4546 sq. yards with building and structures thereon. Respondents had entered into agreement for purchase of the said land with the appellants vide sale agreement dated 13-2- 1980 at the rate of Rs,800 per square yard for a total consideration of Rs,36,36,800. The appellants received amount of Rs,3,75,000 towards part payment of the said consideration. The suit property was in occupation of M/s. Bengal Oil Mills Ltd. as tenant. The appellants simultaneously with signing of the agreement also executed a power of attorney in favour of the respondent of Mr. Fazal-ur- Rehman, the predecessor-in-interest in order to enable him to obtain possession from the above tenant directly. Under the agreement the appellants were required to obtain Capital Gain Tax Clearance Certificate from Excise and Taxation Department in order to execute the sale-deed in favour of the plaintiffs/respondents: The time for completing for sale was fixed in agreement as four months which could be extended by another two months by mutual agreement. The balance of the sale price was to be paid to the appellants at the time of registration of sale-deed before the Sub-Registrar. The appellants had applied for the grant of requisite Capital Gain Tax Clearance Certificate and the Excise and Taxation Department assessing the value of the property at the rate of Rs,1,800 per Square Yard as against the agreed valuation of Rs,800 per month demanded froin the appellants Capital Gain Tax in the sum of Rs,22,00,000, against which demand the appellants had filed an appeal before the competent Authority. However, the appellants did not get the
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required Capital Gain tax Clearance Certificate, till 30-6-1986 after which date the Government of Sindh through Sindh Finance Act, 1986 abolished, the Capital Gain Tax and as such requirement of production of said certificate was done away with; but while abolishing the Capital Gain Tax the Government had enhanced the stamp duty for registration of sale-deed from 6% to 8%. There was lot of exchange of correspondence between the parties. Appellants in first phase of correspondence demanded the remaining balance of sale price whereas respondents insisted that they should firsl obtain Capital Gain Tax Clearance Certificate so that sale-deed can be executed. After abolition of the Capital Gain Tax another issue arose between the parties as the respondents demanded that due to the delay in obtaining Capital Gain Tax Clearance Certificate the respondents have been put to loss due to increase in stamp duty. Respondents also demanded that appellants should share additional burden on account of increase in Stamp Duty. In spite of lot of correspondence between the parties this issue could not be resolved. The appellants vide letter dated 23-9-1986 which is Exh.8/20 called upon the respondents to complete the sale on or before 21st October, 1986. The respondent claimed that he had not received the said letter and there was further correspondence between the parties. Vide letter dated 21-12-1987 Exh.8/40 the appellants informed the respondents that agreement of sale stood cancelled, revoked and terminated. The respondents thereafter filed present suit on 25-2-1988 through his duly constituted attorney Basseer Hassan in whose favour he executed irrevocable power of attorney. During the pendency of the suit plaintiff died and thereafter, his legal heirs were joined as plaintiffs in the suit as such amended plaint was filed for the following reliefs: (a)A Judgment and Decree against the defendants jointly and/or severally for the specific performance of the Agreement dated 13-2-1980 and registration of the sale-deed in favour of the plaintiff or his nominee or nominees before the Registrar or Sub-Registrar transferring and conveying the said property viz plot of land being survey No,1, Sheet No,GK-8 and measuring 4546 sq. yards situated at Ghulam Hussain Qassam Quarters Kharadhar Karachi with the buildings and structures raised thereon free from all dues and encumbrances and on their failure direct the Nazir of this Hon'ble Court to execute and Register the sale-deed in favour of the plaintiff or his nominer or nominees in accordance with law. (b)A decree against the defendants and in favour of the plaintiff directing the defendants to pay to the plaintiff jointly and/or severally a sum of Rs,72,736 being the amount of stamp duty calculated at 2% on the total sale consideration of Rs,36,36,800 which stood increased by enhancement of stamp duty under the Sindh Finance Act, 1986 or to allow the plaintiff to adjust the same against the balance sale consideration; (c)A decree against the defendants and in favour of the plaintiff directing the defendants to pay to the plaintiff jointly and/or severally a sum of Rs,3,63,680 being the amount of stamp duty calculated at 8% on Rs,45,46,000 being the amount of difference between the agreed price and the value fixed under the law in Valuation Table or to allow the plaintiff to adjust the same against the balance sale consideration; (d)A decree against the defendants and in favour of the plaintiff directing the defendants to pay to the plaintiff jointly and/or severally a sum of Rs,45,460 being the amount of registration charges calculated at 1% on Rs,45,46,000 being amount of difference between the agreed price and the value fixed under the law in valuation table or to allow the plaintiff to adjust the same against the balance sale consideration; and (e)Award cost of the suit. Legal heirs of the deceased respondent also executed power of attorney in favour of the said Basir Hassan son of Saghir Hassan. After service appellants submitted their written statement in which they admitted the execution of sale agreement, receipt of part payment of sale price and execution of power of attorney in favour
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of respondents to get the possession of the suit property. They, however, stated in their written statement that obtaining of Capital Gain Tax Clearance Certificate was no requirement of law at the time of the signing of the contract. It was further stated that respondents adopted delaying tactics and did not perform his part of contract with stipulated period and they further stated in their written statement that suit is time-barred and that respondents have abandoned their claim as they have no money to pay the sale price and they have surrendered their claim in favour of attorney Basir Hassan. On 2-11-1988 by consent the Court Settled the following issues: (1)Whether the defendants executed agreement for sale dated 13-2-1988 in respect of the suit property in favour of the plaintiff and the same is still valid and subsisting? (2)What are the terms on which the sale was to be effected by the defendants' in favour of the plaintiff particularly relating to payment of balance sale consideration, obtaining of capital gain tax, vacant possession, marketable title and the period for completion of sale transaction? (3) Whether the time was the essence of contract and whether the defendants failed/were unable to execute the sale-deed of the property in suit in terms of the contract and if so, what is the effect? (4)Whether the defendants committed breach/avoided to perform their part of the contract and failed to obtain capital gain tax clearance certificate from the Excise and Taxation Authority and if so, what is the effect? (5)Whether the defendants were required to obtain capital gain tax clearance certificate before execution of a sale-deed in favour of the plaintiff? (6)Whether on abolition of the capital gain tax under Sindh Finances Act, 1986 the rate of the stamp duty and registration charges stood increased by 2% and 1% respectively, if so, its effect? (7)Whether on abolition of capital gain tax under the Sindh Finances Act, 1986 the Government fixed the value of the properties of ditterent areas on different rates for the purposes of charging the stamp duty if so, its effect? (8)Whether the plaintiff is entitled to specific performance of the contract of sale of property in suit and also to the payment of Rs,72,736, 3,63,680 and 45,460 or any other amount as compensation and/or damages on account of enhancement of stamp duty, and registration charges due to delay in the performance of the contract by the defendants? (9)Whether the plaintiff, in the alternative or otherwise, is entitled to the payment of Rs,62,71,000 by way of compensation and refund of the earnest money with interest thereon? (10)To what relief, if any, the plaintiff is entitled? (11)What should the decree be? (12)Whether the plaintiff was ready/willing to complete sale or used defendant's difficulties with Excise Department simply to delay sale and if so its effect? (13)Whether the suit is time-barred: (14)Whether the plaintiff has assigned/transferred his right to the attorney, if so, its effect? After settlement of issues, the evidence was led through affidavit in evidence and witnesses were cross-examined before the Commissioner Mr. Justice (Retd.) Muftakhiruddin. During trial respondents examined their attorney Baseer Hassan who produced Exh.5/1 to Exh.5/40 which documents have been discussed by the learned Single Judge in his judgment. Respondents also examined Ghulam Dastagir, Sub-Registrar who also produced documents which are mentioned as Exh.6/1 to Exh.6/7. Another witness namely Shabbir Hassain, Assistant Inspector Taxation was examined who produced Exhs.7/1 and 7/2. On behalf of appellants Ebrahim Lakda son of Ghulam Hussain Lakdawala was examined as Exh.8 who produced documents as Exh.8/1 to Exh . 8/45 . After hearing the parties, learned Single Judge was pleased to decree the suit of the respondents for specific performance with costs vide judgment dated 28-5-1995 and decree dated 28-5-1995.
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Being aggrieved and dissatisfied with the judgment and decree the appellants have preferred this appeal. Mr. Kazim Hassan, learned counsel for the appellants contended that respondents tried to innovate the contract from the original agreement dated 3-2-1980 and this amounts to a innovation of a contract which is not admissible/available under the law and further that respondent's reliefs claimed in paras. (a)(b)(c)(d) and (e) in any case are not available as delay in execution of the agreement was caused by the respondent himself. That learned Single Judge has not properly appreciated the evidence and the case-law. The learned counsel for the appellants referred to the following authorities. (1)Darakshan Afridi and 2 others v. Additional Director (Corn.), Karachi Development Authority and another (1991) CLC 1844) (2)Ardeshir H. Mama v. Flora Sassoon (AIR 1928 P.C. 208) (3)Narinjan and others v. Muhammad Yunus (AIR 1932 Lahore 265) (4)Sm. Parul Bala Ghosh v. Saroj Kumar Goswami and others (AIR (35) 1948 Calcutta 147 (5)Rustomali and others v. Sheikh Haider Rahaman (45 CWN 837) (6)Muhammad Yaqub v. Muhammad Nasrullah Khan and others (PLD 1986 SC 497) (7)Asad Zaheeruddin and 3 others v. The Sub-Registrar 'T' Division-1 and others (1987 CLC 786) Mr. Shaiq Usmani, learned counsel for the respondents contended that specific performance of contract is within the discretion of the Court and the learned Single Judge has exercised his discretion very equitably, justly and fairly. According to the agreement of sale capital gain tax clearance certificate was to be obtained by the appellants which they did not get and unnecessarily prolonged the matter with the result that subsequently Government increased the stamp duty and registration fee according to the category of the properties notified by the Government for the Karachi Division. That respondent was always willing and ready to complete the sale for which he paid Rs,3,75,000 as an advance. The sale agreement dated 13-2-1980 executed and signed by the appellants is an admitted fact. The evidence so adduced on behalf of the parties and the documents which were produced and exhibited during the trial were minutely considered and examined by the learned Single Judge and learned Single Judge has properly appreciated the evidence. That in any case there is no averment on behalf of the appellants of misreading or non-reading of the evidence by the learned Single Judge. Mr. Shaiq Usmani cited the following authorities. (1)Razia Sultana Bano and others v. Muhammad Sharif and others (1993 SCM R 804) (2)Zaheer Ahmad and another v. Abdul Aziz and others (1983 SCM R 559) It would be entirely in the interest of justice to refer to the evidence adduced by the parties and documents produced and exhibited by them during the trial. The letter dated 19th October, 1986 written by Fazalur Rahman, of the respondents to Messrs Ghulamali Ebrahim & Company Solicitor and Advocates, In this letter the respondent has very categorical stated that: "However, I am willing to finalize the bargain within reasonable time." Likewise in Exh.5/27, respondents have stated as follows: "In view of above facts and attending circumstances, your clients are not legally justified to cancel the agreement of sale unilaterally or to forfeit the part payment of consideration or to revoke the Power of Attorney which is coupled with the interest of the purchaser. I wish to assert again that I am willing and ready to obtain conveyance deed on payment of balance amount." Exhs.5/31, a letter written by Mr. Fasihuddin, Advocate on behalf of respondents, the relevant portion of the same reads as follows: "That your client or the sellers should understand clearly and unambiguously that in the event and failure of your client to complete the sale, my client shall enforce the agreement of sale, dated 13th February, 1980 in Court of law and the sellers will be saddled with costs of the proceedings."
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Exh.5/32 a public notice published in Daily Dawn and in Daily Jang which reads as follows: "PUBLIC NOTICE Plot No,IGK/8 Ghulam Husain, Hassam Road, Karachi, has been agreed to be sold to me by the owners, Mst. Batool Bai and others. The said agreement of sale is still subsisting, valid and binding. Public is warned to desist from entering into any deal with respect to the said plot with the sellers, and if any one, in spite of this notice, does so, he will do it at his own risk. Haji Fazalur Rahman H-1, Al-Fazal, Block 'B' North Nazimabad, Karachi (Phone. 624860)" Exh.5/34 is a letter of respondent the relevant portion of which reads as follows: "That the sale agreement executed by your clients with me is still subsisting, binding and enforcible." The relevant portion of Exh.5/36 reads as under: "In furtherance of letter dated 7th June, 1987 addressed to you by my Advocate Mr. Fasihuddin regarding the above plot, I have to state that I have been and still am absolutely ready and willing to finalize the transaction as per agreement provided your clients given me sufficient time for the publication of public notice and inspection of documents preparatory to the execution of Conveyance Deed." Relevant Portion of Exh.5/38 reads as under: Para. 9: That my client as such approached your representative to resolve the complications caused due to the increase in stamp duty and fixation of the value of the property and my client was given to understand that the problem will be solved amicably in a short time. My client was, however, surprised to receive letter dated 30-9-1986 from your advocate whereby a copy of the letter dated 23-9-1986 was sent wherefrom it transpired that you had fixed the date for completion of sale to be 15th October, 1986 and that time was made an essence of the contract. My client sent his reply dated 19-10-1986 and also approached your representative Mr. Ebrahim Lakdawala in person and explained that he was ready to complete the sale provided: (a)you pay him in cash for the burden which stood increased by enhancement of stamp duty and registration charges amounting to Rs,72,736 or to adjust the same against the balance sale consideration; and (b)you pay the stamp duty and registration charges payable on the difference between the agreed price and the value fixed by the law under the Valuation Table amounting to Rs,3,63,680 and 45,460 respectively or to adjust the same against balance sale consideration. Para. 11. That the Agreement dated 13-2-1980 and the power of attorney was executed by you for consideration and my client acting upon the power of attorney has invested considerable amount on account of litigations against the tenant and my client is entitled to have a conveyance of the said property from you. In view of the events which have taken place you are liable to execute the required conveyance in favour of my client or his nominee and to adjust/ pay him the amount which stood increased due to enhancement of the stamp duty and fixation of the value by the law. (d) execute a proper conveyance deed of the said property in favour of my client or his nominee forthwith. It would also be pertinent to refer the written statement filed by the appellants especially paras. 19 and 30. "The para. 19 is admitted but it is denied that stamp duty at 8% is to be paid on the value fixed by the Government, irrespective of the agreed price. It is submitted that these can be challenged. That paras. 20 and 21 are denied. It is denied that the plaintiff ever approached the defendants, or any of their representatives. In fact, after the abolishment of Capital Gains Tax, it was the defendants, through their attorney, who approached the plaintiff to see if he was still interested to purchase simply with a view to give him another chance to do so.
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That with regard to the prayer clause, it is submitted that the suit be dismissed. Without prejudice to all other defences, it is submitted that Reliefs B, C and D are any way not available as the delay was caused by the plaintiff himself and anyway this would amount to a novation of contract, not permissible under law." Exh.511, relevant para. 5 provides as under: "The Vendors shall obtain Capital Gains Tax Clearance Certificate from Excise and Taxation Authority ' L' Division Required for registration of the sale-deed of the said property in favour of the purchaser." Exh.5117, letter dated 6-2-1982 written by Ghulamali Ebrahim & Co. Advocates and Solicitors to respondent reads as follows: "...we are enclosing herewith fair draft of the sale-deed, which has been re-cast by us." Exh.5/18 which is sale-deed and its relevant para. is as under: "...we are enclosing herewith fair draft of the sale-deed, which has been re-cast by us." Exh.5/18 which is sale-deed and its relevant para. is as under: "And whereas the Vendors have obtained Capital Gains Tax Clearance Certificate required for registration of these Presents." Attorney of the appellant Ibrahim was examined as Exh.8 and in his cross examination he has stated as under: "It is correct that the defendants had undertaken to obtain Capital Tax Clearance Certificate from the Excise Department before the Registration of the sale-deed. It is correct that the Excise Department had assessed the Capital Gains Tax at Rs,22,00,000 (Rupees twenty two lacs) which was not acceptable to the defendants and it is also correct that the defendants had filed a revision before the Director-General, Excise, against the Order of Assessment of Gains Tax by the Excise Officer. I see Exh.8/45 and say that the contents thereof are correct and true."... It is not correct that Mr. Fazal-ur-Rehman never refused to execute the sale-deed It is incorrect to suggest that Mr. Fazal-ur-Rehman approached us for the execution of the sale- deed except that he did reply the letters stating that he was ready." It would be advantageous to refer to the provisions of sections 14, 22 and 24 of the Specific Relief Act which provide as under: "S.14: Specific performance of part of contract where part unperformed is small.---Where a party to a contract is unable to perform the whole of his part of it, but the part which must be left unperformed bears only a small proportion to the whole in value, and admits of compensation in money, the Court may, at the suit of either party, direct the specific performance of so much of the contract as can be performed, and award compensation in money for the deficiency. S.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. S.24: Personal bars to the relief.---Specific performance of a contract cannot be enforced in favour of a person. (a)who could not recover compensation for its breach; (b)who has become incapable of performing, or violates, any essential term of the contract that on his part remains to be performed; (c)who has already chosen his remedy and obtained satisfaction for the alleged breach of contract; or (d)who, previously to the contract, had notice that a settlement of the subject-matter thereof (though not founded on any valuable consideration had been made and was then in force." Section 55 of the Contract Act provides as follows:
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"If in case of contract voidable on account of promises failure to perform his promisee acts upon 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 acceptance he gives notice to the promisor of his intention to do so." In view of the provisions of the Specific Relief Act, and the Contract Act, the evidence adduced and documents exhibited by the parties referred to and reproduced hereinabove we would like to discuss the case-law referred to by Mr. Kazim Hassan, learned counsel for the appellant. (1) Darakshan Afridi and 2 others v. Additional Director (Com.), Karachi Development Authority and another (1991 CLC 1844). The case of the petitioner in this Constitutional Petition was that commercial plot No, Commercial 4, Block 2, Clifton, Karachi measuring 2,133.33 sq. yds was allotted by the K.D.A. to one Aziz Patel. The K.D.A. thereafter, handed over possession of the plot to him. The occupancy value was determined at Rs,200 per sq. yd and a sum of Rs,4,26,666 was paid by him as full and complete occupancy value. On 29-5-1978 Aziz Patel transferred the said plot to petitioner No,1 by an agreement of sale. K.D.A. respondent approved the pre-lease transfer and mutated the plot in tie name of petitioner No,1 on 10-7-1978. K.D.A. then executed registered lease deed of the plot in favour of petitioner No,1 on 25-3-1979. On 10-11-1983, petitioner No,1 entered into an agreement of sale of the aforesaid plot with petitioner No,2 Kamran Ali Pardhan. Since there were no dues whatsoever. Petitioner No,1 applied for Clearance Certificate, but to his utter surprise the respondents came out with an additional demand of Rs,4,27,375 on the pretext that the K.D.A. had enhanced the price from Rs,200 to Rs,400 per sq. yd. The petitioners claimed that the K.D.A. having once finally fixed and settled the occupancy value, having received the same without any reservation and having transferred the plot finally and that the allotment was made, possession was delivered and registered sub-lease was executed. In this background of the matter petitioner approached this Court through the Constitutional Petition. During proceedings of the petition, petitioner's attorney through his counter-affidavit reproduced the extract of legal advice of Mr. Sabir Hussain Qazilbash the advocate and law officer of respondent on enhancement of occupancy value which reads as follows: "We stand committed at the rates on which the allotments were issued and the rates offered would constitute to be a contract and the terms of the contract shall equally be binding upon the parties to the contract agreement." Learned D.B. further observed as follows: "We have heard Mr. Muhammad Naseem, Advocate for the petitioners and Mr. Sabir Hussain Qazilbash, Advocate for respondent No,1. It is an admitted position that the plot in question was allotted…
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