Al Wakeelo
Your Digital Lawyer, Always on Duty
Initializing Secure Chambers
Your Digital Lawyer, Always on Duty
Initializing Secure Chambers
Petitioner: Shaikh MUHAMMAD TAQI VS Respondent: MUHAMMAD ANWAR KHAN GHAURI
Court Name: Sindh High Court Judge(s): Ajmal Mian, Fakhruddin H. Shaikh Title: Shaikh MUHAMMAD TAQI vs MUHAMMAD ANWAR KHAN GHAURI Case No.: High Court Appeal No, 10 of 1977 Date of Judgment:1983-01-26 Reported As: 1983 CLC 1085 Result: Appeal dismissed
JUDGMENT
JUDGMENT ' This is an appeal under section 21 of the Sind Rented Premises Ordinance, 1979 (hereinafter called the Ordinance) and is directed Whig in Suit No, 510 of 1973, whereby the respondent's suit for specific performance of a sale agreement and possession in respect of immovable property, was decree with cost. The property in suit is a plot with structure thereon bearing No, M. 305/ VII-D-276, situated in New Town, Karachi. The undisputed facts relating to the suit and this appeal was as under :- "The appellant is owner of the property described above. On 4th of May, 1970 he agreed to sell this property to the respondent for Rs, 2,35,000. Such sale agreement was executed between the parties on the same date. In pursuance of this agreement the appellant also received Rs, 30,000 as advance, the balance of Rs, 2,05,000 being payable from the respondent to the appellant at the time of the registration of the sale deed. On the same date i,e, 4th May, 1970 the appellant also executed a receipt for Rs, 30,000 in respect of the advance received by him from the respondent. 2. The terms and conditions of the sale agreement, inter alia were as under :- (a) That the appellant shall furnish all documents including income-tax clearance certificate etc. For the purpose of registration of the sale deed within four months of the agreement. (b) That the appellant shall obtain at his own expense income-tax certificate, gift tax certificate and other clearance certificates and shall produce the original documents including receipts for all payments made to the K. M. C., K. D. A. And other Government agencies upto the date of registration of the sale deed. (c) That if the appellant failed to perform his part of the contract in any way whatsoever, the respondent shall be entitled to have the agreement specifically performed through Court of law.
---
## Page 2
(d) That in case the entire contract frustrates as a result of any act done deliberately or otherwise by the appellant, the vendee i,e, the respondent in such event, shall be entitled to the refund of earnest money together with any damage or damages he may claim for such frustration of the contract. (e) That after obtaining all necessary certificates and documents etc. Within five months the vendor i,e, the appellant would intimate the respondent of the same and give him option to register the sale deed within one month thereafter and in case the latter wanted extension of date of registration, then the appellant shall have no objection to the extension of time by four months provided the respondent paid him a further amount of Rs, 15,000 towards the sale price and the balance of Rs, 1,90,000 at the time of the registration. (f) that if the vendee/respondent still failed to get the sale deed registered within the extended period of nine months, then it will be at the option of the vendor/appellant to refund the whole amount to the vendee/respondent less 10 per cent. Of the amount given to him and then cancel the sale agreement. 3. On 3rd October, 1970 i,e, almost five months after the date of execution of the sale agreement the appellant addressed a letter (Exh. 1/8) to the respondent saying that due to hospitalisation of his wife for a major operation he (appellant) had been unable to obtain the requisite income-tax clearance certificate etc. He, therefore, requested the respondent to extend the time for obtaining these certificates and get the sale deed registered by four months. The respondent sent a reply to this letter of the appellant on 22nd October, 1970 saying : "Without prejudice to the terms of the agreement I give you an extension of two months only within which you will kindly comply with all the requirements as contained in clauses 3 and 8 of the agreement without any further delay." ' This reply of the respondent is document (Exh. 1/19) in the original Court's record. In spite of extension of this time the appellant did not take any step to obtain the necessary clearance certificates. The respondent was, therefore, constrained to address the appellant another letter on 19th February, 1971 whereby the appellant was reminded that he has failed to get the requisite documents within the extended time of two months, although he was orally reminded several times in this behalf. The respondent further enclosed income-tax forms with the said letter in order to expedite the matter and advised the appellant in the following words exerting upon him to take further steps :- "In order to avoid further delay in the matter, I am forwarding herewith two forms Nos. I. T. 173 'the Application for a Certificate under section 3 of the Transfer of Property (Pakistan) Ordinance, 1947' and advise you to submit the same to the Income-tax Officer with required information's and documents, without losing further time on it." ' The appellant kept silent even after receiving this letter and the enclosed income-tax forms. At last on 10th November, 1973 the respondent served a notice by registered post upon the appellant saying that the sale deed should be got registered within 15 days, failing which legal proceedings shall be instituted. This notice which is Exh. 1/13 on the record and was sent by registered post to the appellant, was returned by the Postal Authorities with the endorsement "Refused". The respondent, therefore sent a telegram on 19th November, 1973 reminding the appellant that the registered notice was returned undelivered with the remarks that it was refused. The appellant was further called upon to complete the sale deed within 15 days failing which action in Court will follow. Even after this telegram, the appellant kept silent. Consequently the respondent filed suit in this Court on 24th December, 1973 which was registered as Suit No, 510 of 1973. The respondent sought following reliefs in his suit :- (a) Judgment and decree for Specific performance of the Agreement of Sale dated 4th May, 1970 directing the defendant to execute the final Sale Deed in favour of the plaintiff in respect of
---
## Page 3
property bearing No, J. M. 305/VII-D-276, situated in New Town, Karachi after obtaining the Income- tax Clearance Certificate and after performing all other legal formalities, on receiving the balance of sale consideration amounting to Rs, 2,05,000 (Rupees two lakh and five thousand only). And on failure of the defendant the Nazir of this Hon'ble Court be directed to execute the final Sale Deed in favour of the plaintiff on payment of balance of sale consideration. (b) A decree for possession be passed against the defendant directing him and all persons acting for, through and under him to hand over vacant and peaceful possession of the said property to the plaintiff at the time of execution of final-Sale Deed. (c) Cost of the Suit may also be awarded. (d)Any other relief which this Hon'ble Court may deem fit and proper under the circumstances of the case may also be awarded." 4. In his written statement the appellant admitted having executed the sale agreement but alleged that he was "induced to enter into an agreement of sale dated 4th May, 1970 with the plaintiff in respect of property bearing No, J. M. 308/VII D-276, New Town, Karachi as a result of misrepresentations made by the plaintiff regarding price and several other factors, and "that the plaintiff also took undue advantage of the distressing financial condition of the respondent and his failing health to exercise undue influence upon him and otherwise induced him to enter into an agreement of sale in respect of the said house property which he did not want to, in fact could not, sell for sentimental and other immutable reasons". He, therefore, pleaded that the respondent had manoeuvred to extort consent of the appellant for a thoroughly inadequate consideration. The appellant admitted that he had addressed the letter to the respondent requesting for extension of four months, time to obtain income-tax clearance certificate. He further pleaded that the respondent knew that the appellant was attending to his ailing wife and was unable to obtain the income-tax certificate and other documents and, therefore, respondent himself undertook to obtain these certificates on his behalf and that to this extent the agreement dated 4th May, 1970 stood modified. The plea of the appellant appears to be that it was orally agreed between the parties that it would be the responsibility of the respondent himself to obtain income-tax clearance certificate etc. On behalf of the appellant, but he does admit that he had received the letter dated 19th February, 1971 (Exh. 1/11) with which the income-tax form was enclosed. 5. The appellant denies that the notice dated 10th November, 1973 which is said to have been returned by the Postal Authorities with the endorsement of refusal, was ever received by him. But there is no specific denial of the receipt of the telegram (Exh. 1/17) dated 19th November, 1973. It is also not denied that even after receiving this notice the appellant did not take any step to get the sale deed registered. Before the filing of the suit, the appellant did not repudiate the sale agreement on the ground that it was got executed through misrepresentation etc. Nor did he protest that the respondent himself had failed to perform his part of the agreement in view of the alleged oral modification of the sale agreement. However, in para-6 of his written statement the appellant alleged that the respondent himself is responsible for breach of agreement of sale in more than one respect. He does not elaborate as to what were the terms and conditions of the agreement which the respondent had failed to comply with. The appellant further stated that the appellant was entitled to forfeit the advance which in fact he had forfeited. He further stated that the agreement cannot be specifically enforced and that he was not prepared to perform it because it was obtained fraudulently. 6. On the above pleadings following issues were framed by the Court :- (1) "Whether the agreement of sale dated 4th May, 1970 was executed by the defendant under inducement, undue influence and on fraudulent misrepresentation made by the plaintiff ? Or the agreement was executed by the parties voluntarily ?
---
## Page 4
(2) Whether the defendant has committed breach of the agreement dated 4th May, 1970 ? If so, whether the plaintiff is entitled to specifically enforce the same ? (3) Whether the suit is barred by limitation ? (4) Whether the suit is not properly framed ? (5) Whether the suit is not maintainable ? (6) Is the plaintiff's suit barred by the Registration Act, the Transfer of Property Act, the Contract Act, the Stamp Act and other provisions of Statutory law and equity ? (7) Whether the Agreement dated 4th May, 1970 lapsed and not being extended, has no validity for purposes of Specific Performance ? If so, to what effect ? (8) Whether the plaintiff committed breach of contract in terms of the agreement dated 4th May, 1970 ? If so, what are its effects in favour of the defendant ? (9) Whether the plaintiff will gain unfair advantage over the defendant who will suffer undue hardship by specific performance ? (10) Whether the plaintiff has right to sue ? If so, to what result ? (11) If the plaintiff by his own conduct and act disentitled himself to specific relief ? If so, what will be the results ? (12) What should the decree be ?" 7. On issue No, 1 the finding of the learned Single Judge was that the sale agreement was executed by the appellant voluntarily. While taking this view the learned Single Judge also referred to certain stipulations of the sale agreement which were against the interest of the respondent. He particularly referred to Article 9 of the agreement which stipulated that if the respondent failed to get his part of the contract performed then the appellant shall have option to refund the earnest money less 10 per cent and cancel the agreement. It was, therefore, held that if the agreement had been the result of undue influence or misrepresentation, then the respondent would not have agreed to incorporation of any stipulation which was against his interest. 8. Issues No, 2, 6, 9, 10 and 11 being connected were decided together by the learned Single Judge and it was held that the appellant was responsible for committing breach of the agreement and that the respondent was entitled to the relief of specific performance. 9. Issue No, 3 regarding limitation was also decided in favour of the respondent. It was held that the appellant was to perform his part of the contract within five months and that thereafter a period of four months was to be allowed to the respondent to perform his part of the contract. Thus the time of limitation, according to the learned Single Judge, shall be calculated from the expiry of period of nine months from the date of the sale agreement i,e, 4th May, 1970. The suit was filed on 24th December, 1973. If the period of nine months for performance of the contract, according to clause 9 of the sale agreement, is taken into consideration, then the suit, as held by the learned Judge, shall be deemed to have been filed within time i,e, on 24th December, 1973. 10. Issues Nos. 4 and 5 were also decided against the appellant and it was held that the suit was properly framed and was maintainable. On issue No, 7 it was held that since the appellant himself had failed to obtain Income-tax Certificate and other clearance certificates, therefore the question of paying Rs, 15,000 by the respondent to the appellant under clause 8 of the agreement, did not arise nor the sale agreement could be deemed to have lapsed on that account. 11. In view of the above findings the learned Single Judge decreed the respondent's suit for specific performance with costs. The respondent was directed to deposit the balance of sale consideration of Rs, 2,05,000 within six months and it was further directed that in case of his failure to do so the suit shall stand dismissed with cost. The judgment of the learned Single Judge has been challenged by the appellant, inter alia, on the following grounds :- (1) That the suit was time-barred and should have been dismissed as it was filed beyond three years from the time fixed in the contract for performance of the contract.
---
## Page 5
(2) That the learned Single Judge has allowed the question of limitation to be affected by the irrelevant consideration as to whether time was of the essence of contract or not. (3) That in the interest of equity and justice, discretion should have been exercised in favour of the appellant by refusing to enforce specific performance of the sale agreement as specific performance would work great hardship upon the appellant in view of the spiral rise in prices. (4) That the silence of respondent for more than two years and eight months before filing the suit amounted to acquiescence, abandonment and waiver of his claim. (5) That due to valuation of currency as a result of fall of East Pakistan, the value of immovable property in Karachi had increased and provided unfair advantage to respondent over the appellant and that it would be harsh case for the appellant if specific performance was enforced ; and lastly. (6) That it was not considered whether damages for breach of contract were not adequate remedy in the circumstances of this case instead of specific performance. 12. From the above grounds it would appear that the appellant has abandoned the plea that the sale agreement was result of undue influence, inducement or fraudulent misrepresentation on the part of the respondent. However, during the arguments Mr. Khalid M. Ishaque, learned counsel for the appellant, attacked the judgment of the learned Single Judge on the following three grounds only (1) That the suit was barred by limitation. (2) That as a result of devaluation consequent upon fall of East Pakistan, the value of the suit property has increased due to which the contract between the parties must be deemed to have been frustrated. (3) That looking to the hardship which the appellant shall incur as a result of specific performance, discretion in this case should have been exercised in favour of the appellant by refusing to enforce specific performance and that damages would have been the appropriate remedy to be awarded to the respondent, 13. So far as the point of limitation is concerned, the terms and conditions of the sale agreement which have been reproduced in para 2 above, disclose that the appellant was to perform his part of the contract within five months. He was required to obtain Income-Tax Certificate and other clearance certificates within this period and inform the respondent accordingly. It is an admitted fact that the appellant did not do this within five months. It is also admitted that the appellant addressed a letter dated 3rd October, 1970 (Exh. 1/81 requesting the respondent to extend the time by four months to enable him to obtain the requisite certificates. The respondent had all along been keen to get the formalities performed expeditiously so that the sale deed could be registered without any further delay. This fact would be evident from the letter of respondent (Exh. 1/11) the receipt of which has not been denied by the appellant. By this letter the respondent allowed two months' time to the appellant to comply with all the requirements as contained in clauses 3 and 8 of the sale agreement. Alongwith this letter the respondent also enclosed an application form for certificate of Income-tax clearance, so as to enable the appellant to act promptly in the matter. The letter (Exh. 1111) was received by the appellant on 22nd March, 1971. The plea of Mr. Khalid M. Ishaque is that the respondent was entitled at the most to the benefit of 7 months from the date of agreement in the matter of calculating the period of three years of limitation under Article 113 of the Limitation Act. According to this article, three years' time of limitation for a suit for a specific performance is to be counted from the date when specific performance is refused or when the performance was due. According to him, the contract should have been performed by 4th December, 1970, if the period of 7 months is taken into consideration from the date of the sale agreement, and that as the suit was filed on 24th December, 1973, it was beyond the period of three years as envisaged by Article 113.
---
## Page 6
14. It was also argued by Mr. Khalid M. Ishaque that due to failure of the appellant to obtain clearance certificates within the stipulated period, clause 8 of the agreement did not become operative. This clause provides that after getting the requisite certificates within five months the appellant shall allow further 4 months' time to complete his part of the contract. It was argued that since the appellant had not obtained the requisite certificates within the stipulated period and even after the extended period hence the question of allowing further 4 months time to the respondent to perform his part did not arise. According to him, the respondent was not entitled to the benefit of adding 4 months to the original period of 5 months fixed for the performance of the original contract and in view of this, clause 9 of the agreement did not become operative which provides that if the vendee failed to get the sale deed registered within the extended period of 9 months, then it will be at the option of the vendor to refund the whole amount to the vendee less 10 per cent of the amount and cancel the sale agreement. 15. We are not inclined to accept the argument canvassed by the learned counsel for the appellant. Clause 9 categorically stipulates that the entire agreement was to be performed by both the parties within a period of 9 months from the date of the agreement. The period of 9 months envisaged in para 9 of the agreement has not been made subject to clause 8 being effective. Reading clauses 8 and 9 of the agreement together one is left in no doubt as to the fact that both the parties had to perform their parts of the contract within a period of nine months from the date of the agreement. The learned Single Judge was, therefore, justified in holding that the time of limitation for filing suit for specific performance shall be calculated from expiry of 9 months from the date of the sale agreement i,e, 4th May, 1970 and that if this period is taken into consideration, then the suit was filed well within time. We do not see any reason to take exception to this finding of the learned Single Judge be deemed to have been frustrated due to circumstances, viz. The fall of East Pakistan, devaluation in Pakistan currency and consequent rise in the value of the suit property. It may be stated that the plea of frustration of the contract has been set up by the learned counsel on behalf of the appellant for the first time during arguments. No such plea was raised before the trial Court. Even in the memo of appeal no such ground was raised. He was, therefore, not entitled to take this plea at the 'hearing of this appeal. Mr. Khalid M. Ishaque has cited number of cases in support of his plea relating the doctrine of frustration of contract. It is not necessary to refer to those cases since we are not inclined to hold that the circumstances pleaded by the learned counsel, would have the effect of frustrating the contract. 17. The last point urged in support of the appeal by Mr. Khalid M. Ishaque is that the relief of specific performance is a discretionary relief and that in this case the proper remedy for the respondent would have been damages rather than specific performance. In support of this plea he has relied on clause II of section 22 of the Specific Relief Act. The above clause states that if the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its nonperformance would involve no such hardship on the plaintiff, then the Court may properly exercise discretion not to decree specific performance. The learned counsel has further referred to illustration (i) to the above clauses which is to the following effect :- "(1) A, a lessee of mines contracts with B, his lessor, that at any time during the continuance of the lease may give notice of his desire to take the machinery and plant used in and above the mines, and that he shall have the articles specified in his notice delivered to him at a valuation on the expiry of the lease. Such a .Contract might be most injurious to the lessee's business, and specific performance of it should be refused to B." 18. It has further been urged that the relief of specific performance should be refused also on the ground of laches on the part of the respondent because he waited for about 2 years after his last letter dated 19th February, 1971 (Exh.1/11), before filing this suit and that during this period there had been abnormal rise in the prices of real property. It was, therefore, argued that the respondent
---
## Page 7
should not be allowed to take advantage of his laches in remaining silent for two years and coming to the Court at a time when specific performance of the contract would entail great hardship to the appellant. The learned counsel further argued that due to traumatic events which led to the bifurcation of the country in December, 1971, there had been devaluation of Pakistan currency as a result of which the value of the property in dispute had increased, according to the counsel, ten-fold and as such respondent should not be allowed to take advantage of this situation. 19. So far as the first plea regarding applicability of section 22 of the Specific Relief Act is concerned, it may be stated that a person who seeks discretion to be exercised in his favour, should come to the Court with clean hands and must himself be prepared to do equity if he expects the opposite party to do equity to him. In order to determine how far the conduct of the appellant himself has been fair, it would be necessary to refer to his written statement which he had filed before the trial Court. In the first place he resisted the claim of the respondent on frivolous ground that the sale agreement was the result of misrepresentation, that undue influence was exerted upon him and that the respondent had manoeuvred to extort his consent for a thoroughly inadequate consideration. He also pleaded that his signature on the letter dated 3th October, 1970 (whereby he had requested for 4 months further time to get the sale-deed registered) had been obtained by the respondent by fraud. Later on this frivolous plea was altogether abandoned by the appellant. When the…
Read the unabridged text and precedent citation network on Al Wakeelo Legal Research Platform.