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Official Citation: 2026 LHC 3177
Court / Jurisdiction: Lahore High Court (Honorable Mr. Justice Anwaar Hussain)
Ruling Summary: This decision was rendered by the Lahore High Court (Honorable Mr. Justice Anwaar Hussain), officially reported as 2026 LHC 3177. In this matter between the Petitioner and the Respondent, the court adjudicated key questions of statutory construction, procedural regularity, and legal precedent under Pakistani law.
Core Holding: The honorable bench evaluated governing statutory provisions and judicial authorities to establish the rights of the parties, delivering the binding reasoning set out below.
COURT: Lahore High Court (Honorable Mr. Justice Anwaar Hussain) DECISION DATE: 28-04-2026 CASE DETAILS: Civil Revision 221976/18 ============================================================ Stereo. H C J D A 38. Judgment Sheet LAHORE HIGH COURT, LAHORE JUDICIAL DEPARTMENT
C.R No.221976/2018
Lahore Development Authority etc. Versus Abdul Hameed Chaudhri etc.
J U D G M E N T
Date of Hearing 28.04.2026 Petitioners by: Barrister Hamza Shehram Sarwar, Advocate Respondent No.1(i) to 1(iii) by: Mr. Muhammad Ahmad Qayyum, Advocate Respondents No.2(i) to 2(iv) by: Syed Ishtiaq Hussain, Advocate
Anwaar Hussain J: This revision petition , under Section 115 of the Code of Civil Procedure, 1908 (―CPC‖), is directed against the concurrent findings of the Courts below. Through judgment dated 19.10.2016, the Trial Court decreed the suit of deceased respondent No.1, namely, Abdul Hameed Chaudhri and respondents No. 2(i) to 2(iv) (―the respondents/plaintiffs‖), whereas through judgment dated 19.10.2017, the appeal preferred by the petitioner -Lahore Development Authority (― petitioner-LDA‖) was dismissed , and the findings of the Trial Court were maintained. 2. The factual background, to the extent necess ary for adjudication, reveals that the predecessors -in-interest of respondents No.1(i) to 1(iii) and 2(i) to 2(iv), namely Abdul Hameed Chaudhri and Abdul Majeed Chaudhri, respectively were real brothers (―the owners‖) who had admittedly purchased the suit property from Mst. Mehr-un-Nisa etc., through registered sale deed dated 03.06.1958. The said property was subsequently acquired by the Lahore Improvement Trust (― LIT‖), predecessor of the petitioner-LDA, for the purpose of establishing New Muslim Town Scheme, Lahore (―the Scheme‖). Upon acquisition, LIT recognized the rights of the owners
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and offered them an exemption plot , under the Scheme. It is an admitted position that an agreement dated 13.04.1964 (―the agreement‖) was executed between LIT and the ow ners, whereby development charges and dues for excess land were to be paid . In terms of clause 4 of the agreement, t he total payable amount was determined as Rs.57,495.33/-, out of which 1/4 th was paid at the time of execution of the agreement and the remaining was to be paid within one year, in three equal instalments. According to the petitioner-LDA, only an amount of Rs.14,376.33/- was paid at the time of execution of the agreement and despite issuance of notices as well as reminders, the installments for making up the remainder of the amount were not cleared. Consequently, after lapse of time, the agreement was rescinded and the exemption of the plot was withdrawn, through letter dated 30.04.1965. The respondents/plaintiffs instituted the suit , on 10.11.2015, asserting that the rescission/cancellation came to their knowledge a week before the death of Mr. Abdul Majeed Chaudhri, when steps for subdivision of the property were undertaken, whereupon it was discovered that the plot had already been cancelled decades earlier , which constrained the respondents/plaintiffs to file representation that was rejected by the petitioner-LDA through letter dated 10.08.2012. The impugned cancellation of the plot was based on doctrine of laches and contractual default, invoking clause 10 of the agreement, which provided consequences of breach of terms and conditions of the agreement. The Trial Court decreed the suit primarily on the reasoning that since the agreement contained a penalty clause providing 6% annual interest on the delayed payments, the drastic measure of cancellation of the plot was unwarranted. It was further held that no adequate opportunity of hearing was shown to have been afforded to the respondents/plaintiffs , before invoking clause 10 of the agreement. 3. Learned counsel for the petitioner-LDA submits that the Courts below have erred in appreciating that clause 10 of the agreement has an overriding effect over clause 4 thereof conferring power upon LIT
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to cancel the plot, for breach of any of the terms and conditions of the agreement including non-payment of development charges etc., within stipulated period of time . Adds that rescission of the agreement was made and the plot was cancelled after issuing notices to the owners that were brought on record in evidence. Conversely, learned counsel for the respondents supported the impugned findings . They have also raised objection that the present petition is barred by time . While relying upon case reported as Asad Ali and 9 others v. The Bank of Punjab and oth ers1, they contend that delay in removal of the office objections beyond limitation renders the petition barred by time. 4. Arguments heard. Record perused. 5. At the outset, it is evident that the foundational facts of the case are largely admitted. The e xecution of the sale deed in favour of the owners, acquisition of the property by LIT, and subsequent succession of LIT by the petitioner-LDA are not in dispute. Likewise, execution of the agreement is also an admitted fact. Therefore, t he concurrent findings recorded by the Court s below , whereby the claim of the respondents/plaintiffs has been decreed and the petitioner-LDA has been non-suited, call for examination in the light of the contractual framework governing the parties, particularly clauses 4 and 10 of the agreement. 6. Both the Courts below have held that rescission of the agreement followed by cancellation of the plot by the petitioner-LDA was contrary to the terms of the agreement and legally unsustainable. In order to assess whether such findi ngs suffer from any jurisdictional defect or legal infirmity , within the limited scope of interference under Section 115 CPC, it is necessary to examine the true import and interplay of the above referred clauses of the agreement. Fo r ease of reference, said clauses are reproduced hereunder:
1 PLD 2020 SC 736
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―4. That the amount payable by the Second Party on account of development charges and sale price for excess land under plot No.4 and proportionate share of land required under road and open spaces, if any shall be paid to the First Party in four equal quarterly instalments. The Second Party has paid a sum of Rs.14376.33 on 10 -4-64 towards 1/4 of the Development charges and cost of excess land and the balance shall be paid to the 1st party within one year from the exe cution of this agreement in three equal instalments, and if any amount or part of the instalment is not paid by the Second Party on or before the due dates then interest 6% P.A. shall be payable by the Second Party w.e.f. the date the payment was to be made till the date of payment. 5.… 6.… 7.… 8.… 9.… 10. For compliance with the conditions of this agreement the Second Party pledges the aforesaid land to the First Party and in case of breach of aforesaid conditions or any of them or if it is joined at any subsequent time that the title of the Second Party to the land was defective, this agreement will become void and the First Party shall be entitled to enter upon the said land or any portion thereof with or without a building and acquire and sell the same to any other person . Any amount or part thereof paid by the Second Party under this agreement shall also be forfeited in favour of the First Party.‖
(Emphasis supplied)
A plain reading of clause 4 reveals that the parties had consciously provided for a specific consequence in the event of default in payment of instalments qua development charges etc. It stipulates that if any instalment or part thereof is not paid on the due date, interest at the rate of 6% per annum shall be payable fro m the date the payment fell due , till its actual realization. This clause, therefore, embodies a complete and self -contained mechanism to deal with the delayed payments, converting the default into a compensable financial liability , rather than a ground fo r extinguishment of the
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proprietary rights. On the other hand, clause 10 is couched in general terms and provides for drastic consequences, including avoidance of the agreement, re -entry upon the land, and forfeiture of the amounts paid, in case of breach of conditions of the agreement . However, the said clause does not specifically address the contingency of delayed payment of instalments, which has already been expressly dealt with under clause 4. It is a settled rule of interpretation that where a contract contains both a specific provision and a general provision dealing with the same subject, the specific provision prevails, in line with the maxim lex specialis derogat legi generali (special law overrides general law ). Therefore, clause 10, being genera l in nature, cannot be invoked in a manner so as to nullify the specifically agreed monetary consequence for non-payment, under clause 4. The doctrine of harmonious construction requires that contractual terms be interpreted in a way that maintains the internal coherence of an agreement. A construction that allows forfeiture , despite a stipulated compensatory mechanism, would render the interest/surcharge clause otiose, which is impermissible. Similarly, where two constructions are possible, the one giving effect to all clauses of the contract, and avoiding conflict, must be preferred. 7. The matter can be examined from another angle. Clause 10 of the agreement provided that on breach of any condition, the agreement ―will become void‖ and the First Party i.e., LIT would be entitled to enter upon the land, acquire and sell it, and forfeit the amounts paid. The wording ―will become void‖ in clause 10 confers a right of rescission , upon LIT, on account of breach, which as per contention of the petitioner -LDA includes breach in timely payment of instalments of the development charges etc., in terms of clause 4 . However, it did not operate ipso facto . Under Section 39 of the Contract Act, 1872 (―the Act 1872 ‖), rescission is a right to be exercised and communicated, which reads as under:
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“39. Effect of refusal of party to perform promise wholly.– When a party to a contract has refused to perform, or disabled himself from performing , his promise in its entirety, the promisee may put an end to the contract, unless he has signified, by words or conduct, his acquiescence in its continuance.‖
Where the other party i.e., the owner s in present case (and thereafter the respondents/plaintiffs) disputes the breach or its consequences, the party claiming rescission must se ek a declaration to that effect and cancellation as consequence from the Court. Section 3 5 of the Specific Relief Act, 1877 (―the Act 1877 ‖), makes this explicit by permitting a suit to have an instrument adjudged void or voidable , which reads as under: “35. When rescission may be adjudged. – Any person interested in a contract in writing may sue to have it rescinded and such rescission may be adjudged by the Court in any of the following cases, namely:-
(a) where the contract is voidable or terminable by the plaintiff.‖ (Emphasis supplied) Similarly, Section 53 of the Act 1872 2, read with other provisions, require restoration of benefits on rescission. Therefore, if LIT, and later on the petitioner -LDA, intended to rescind the agreement, it was required to file a suit for declaration to the effect that the agreement has become void, hence, must be rescinded under Section 3 5 of the Act 1877, and seek the Court‘s determination on restitution under Section 53 of the Act 1872. Having failed to do so and having allowed possession of the owners to continue for decades, the impugned unilateral invocation of rescission , through letter dated 30.04.1965, had no legal effect. 8. At this juncture, it is imperative to examine the conduct of LIT , which is equally significant. Despite the alleged default in first out of
2 53. Liability of party preventing event on which the contract is t o take effect. – When a contract contains reciprocal promises, and one party to the contract prevents the other from performing his promise, the contract becomes voidable at the option of the party so prevented; and he is entitled to compensation from the o ther party for any loss which he may sustain in consequence of the non-performance of the contract.
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the three installments of the development charges etc., LIT proceeded to approve the building plan, submitted by the owners, on 31.08.1964, and permitted construction thereon. The structur e was raised, possession continued, and the property remained in uninterrupted use of the owners, for decades with all the attendant incidents, including the utility connections. Such conduct clearly indicates that LIT as well as the petitioner-LDA did not treat the agreement void, at the relevant time. Rights and expectations crystallized over that period. Allowing a public authority to rely on a private, unproved notice of rescission after four decades would defeat certainty of title and possession. This attracts the doctrine of promissory estoppel as well as waiver by conduct. A party cannot approbate and reprobate—having allowed the owners to proceed with construction and enjoy the suit property without enforcing the surcharge on alleged default in accordance with the contract, LIT as wells the petitioner -LDA cannot, after an inordinate lapse of time, revert to a position inconsistent with its earlier conduct and invoke the drastic consequences , under clause 10 of the agreement. 9. It is imperative to no te that the owners were granted exemption plot, which is in the nature of exchange for the piece of their land acquired by LIT and the amount due on the part of the owners was on account of development charges and price of any land in excess of the exemption plot. This was not a simple agreement of sale and purchase or a case of defective title that could result into unilateral rescission of the agreement , by one party. Even invocation of clause 10 of the agreement has its own trappings and condition preced ents. In case of occurrence of any of the contingencies envisaged in clause 10, the penal consequences were not confined to the agreement becoming void, rather, the LIT in order to effectuate the voidability of the agreement was also obligated to acquire t he said land for which no step had been taken. The conduct of the LIT and/or the petitioner - LDA becomes more relevant when the words ―enter upon the said land… acquire and sell the same‖ used in clause 10 of the agreement
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are analyzed. The word ―acquire‖ i s not neutral. In the context of a public authority, like LIT and/or petitioner-LDA, acquisition is a legal process requiring notice, hearing and payment of compensation. It cannot mean summary resumption by self -help. The phrase ―acquire and sell‖ shows t hat the authority was to step into the allottee/exemptee‘s position (the owners in present case) , realize the property, and adjust the equities. That cannot be done without determining what is to be refunded and what is to be adjusted for improvements made over time. To read ―acquire‖ as summary resumption would render the clause penal and would permit unjust enrichment. In terms of clause 4, t he agreement had already provided interest as the agreed compensation for delay in payment of development charges e tc. Had the LIT intended to effectuate the voidability of the agreement, it should have effectuated in full by acquiring the property/plot at that time which it stopped short of. Hence, allowing LIT to bypass that remedy and retain all amounts paid would amount to enforcing a penalty. 10. Moreover, the Court cannot lose sight of the fact that c lause 10 is a ‗Standard-Form-Clause‘, drafted by the authority (LIT). Any ambiguity in the words ―acquire‖ and ―forfeit‖ must be construed against the drafter. Furt her, a public authority is held to a higher standard of fairness and due process. It cannot be a judge in its own cause and cannot deprive a person of property without adjudication. The Courts do not enforce penalties unless proved as a genuine pre - estimate of the loss. Section 24 of the Act 1877 3, bars specific performance where compensation in money is adequate. By parity of reasoning, the authority could not bypass the agreed monetary remedy and enforce forfeiture without testing proportionality before a Court of law. Even otherwise, there is another dimension of the case and , examination from the said perspective also propels to conclude that
3 ―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‖ (Emphasis supplied)
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the petitioner-LDA has no case. Certain notices were relied upon by the petitioner -LDA (exhibits Exh.D-2 to Exh. D-5), which were tendered in evidence through DWs, however, it is an admitted position that the said witnesses, after recording examination -in-chief, failed to present themselves for cross -examination, despite availing multiple opportunities. In such circu mstances, the testimony of such a witness cannot be relied upon and is liable to be discarded. The evidence not subjected to cross -examination carries no probative value and such documents cannot be read in evidence. 11. Having been held that the petitioner-LDA has no case even on merits, it is nonetheless necessary to address the question of limitation raised by learned counsel for the respondents. There is no dispute that the impugned appellate judgment was rendered on 19.10.2017, whereas the present peti tion was first filed on 27.01.2018 , in an incomplete form , and was admittedly returned for removal of objections. The petition was thereafter re -filed, in complete form, on 27.06.2018. Computed accordingly, the petition is delayed by 69 days. No plausible explanation, much less any application for condonation of delay supported by sufficient cause, has been filed on behalf of the petitioner-LDA. It is by now a settled principle, consistently laid down by the Supreme Court, as well as this Court, that where a matter is initially filed in an incomplete or defective form and is subsequently re -filed after the expiry of the prescribed period of limitation, such re -filing does not stop or suspend the running of limitation unless the delay is satisfactorily explai ned. In the absence of any plausible or sufficient cause, the petition is to be treated as time-barred. Consequently, the present petition is clearly barred by time and liable to be dismissed on this score as well. Reliance placed on case of Asad Ali supra is apt. This Court in case reported as Sharifan Bibi and others v. Muhammad Ismail (Deceased) through L.Rs and others4 has also followed the same rule.
4 2026 YLR 6
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12. In view of the above discussion , the concurrent findings of the Courts below , that the recission of the agreement followed by cancellation of the plot was unlawful , neither suffer from any misreading or non -reading of evidence nor any illegality or jurisdictional defect , warranting interference. The present revision petition is not only time barred but is also devoid of any merits, hence, dismissed. No order as to costs.
(ANWAAR HUSSAIN) JUDGE
Approved for reporting
Judge
A.B**