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Petitioner: S.M. SHOAIB BAGHPATI VS Respondent: UMAR GUL AGA and 3 others
Court Name: Sindh High Court Judge(s): Salahuddin Panhwar Title: S.M. SHOAIB BAGHPATI vs UMAR GUL AGA and 3 others Case No.: Defendants Suit Nos 261 and 701 of 2007 Date of Judgment:2014-12-01 Reported As: PLD 2015 Sindh 481 Result: Order accordingly
JUDGMENT
JUDGMENT ' SALAHUDDIN PANHWAR, J.---Through the instant consolidated judgment, I am going to decide the above consolidated suit(s), filed by respective parties against each other (s). The Suit No,261 of 2007 has been the leading suit which was filed by the plaintiff S.M Shoaib against the defendants for Declaration and Recovery for the following relief(s): (a) To declare that as per Clause-3 of the said Agreement dated 30-5-2006 the defendants Nos.1 to 3 are liable to pay the double of the advance payment to the plaintiff due to their failure to comply with the contractual obligations as per agreed terms of the said agreements; (b) To pass judgment and decree for the sum of Rs,70.00 Million against the defendants Nos.1 to 3 jointly and severally being double of the advance payment made by the plaintiff; (c) To pass an order to allow the plaintiff to handover the possession of the one portion of said property which is presently in possession of the plaintiff to the Nazir of this Hon'able Court; (d) Any other, further and better relief or reliefs which this Hon'able Court may deem fit and proper in the circumstances of the case; (e) Costs of the suit may also be granted; 2. Succinctly, relevant facts are that defendants Nos.1 to 3 have been owners of plot of Land bearing No,43/9-G, Block-6 having Survey Sheet No,35/P/1, admeasuring 2000 Sq.Yds with two independent Double storey Bungalows comprising of 7 and 3 Bed-rooms etc. Respectively, situated in Block-6 Pakistan Employees Cooperative Housing Society, Karachi, having acquired by way of Gift deed duly registered with the Sub-Registrar T-Div.-XI, vide Registration No,426 of Book No,1 dated 24-2- 1990, M.F. Roll No, 1217 of photo-Registrar Karachi dated 3-3-1990 (hereinafter referred to as the "SUIT PROPERTY"). Suit property was mutated in name of the defendants Nos.1 to 3 in record of
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Ministry of Housing and Works through mutation letter No,F01/PECHS/12328/2006, dated 12th August 2006.Thedefendant No,4 is a Broker (Estate Agent) through whom the transaction for purchase of the said property took place between the plaintiff and defendants Nos.1 to 3. Defendants Nos.1 to 3 entered into an agreement to sell dated 31-5-2006 with plaintiff regarding sale of the suit property through defendant No,4 for a total sale consideration of Rs,100,000,000 (Rupees 100.00 Millions only). Plaintiff in compliance of the said agreement has paid a sum of Rs,10,000,00 (Rupees Ten millions only) through cheques all drawn on Soneri Bank Ltd. Chandni Chowk Branch, Younus Plaza, Block-7 (Opp. Old Sabzi Mandi) Karachi, in favour of the defendants Nos.1 to 3 being advance part payment. The defendants Nos.1 to 3 have admitted and acknowledged the receipt of said amount in agreement and have also executed and issued a separate receipt dated 31-5-2006 for said amount in favour of the plaintiff. 3. It is further case of the plaintiff that as per Clause 2 of the said agreement the balance sale consideration of Rs,90,000,000 (Rupees Ninety millions only) was required to be paid by the plaintiff to defendants Nos.1 to 3 at the time of handing over the vacant and peaceful physical possession of said property and completion of all formalities of agreement of sale including Registration of sale deed/General Power of Attorney in favour of the plaintiff or his nominees. It was agreed between parties that within a maximum period of six months from the date of signing of agreement i.e, on or before 30-11-2006 all the formalities to finalize the transaction will be completed and meanwhile the defendants Nos.1 to 3 will take all necessary steps to obtain marketable and clear title of the said property in their favour prior to date of final payment by the plaintiff as at the time of execution of the said agreement the property was not mutated in the record of the Ministry of Housing and Works in favour of defendants Nos.1 to 3. The relevant portion of the said clause is reproduced here-in-below for ready reference:-- "Clause-2....That balance and remaining payment of Rs,9,00,00,000 (Rupees Nine Crore only) shall be paid by the Vendee to the Vendors at the time of handing over the vacant and peaceful physical possession of the said property and completion of sale formalities including registration of Sale deed ' General Power of Attorney in favour of the Vendee or his nominee (s) within a period of six (06) months from the date of signing of this agreement subject to obtaining of marketable and clear title by the Vendors in their names prior to date of final payment" 4. As per clause 3 of the agreement it was agreed between the plaintiff and the defendants Nos.1 to 3 that in case of failure of the defendants Nos.1 to 3 to comply with the required formalities as mentioned hereinabove within the stipulated period, the defendants Nos.1 to 3 shall be liable to refund the double of the part payment received by them from the plaintiff. In the same manner it was also agreed that if the plaintiff fails to perform his part of obligations, the defendants Nos.1 to 3 shall be entitled to forfeit the amount of advance payment made by the plaintiff. The clause 3 of the said agreement is:-- ' Clause-3 ...That if due to any circumstances the Vendor fails to complete the sale formalities and to provide the marketable clear title documents for transfer of title of the said property in favour of the Vendee or his nominee(s) in such event, the Vendors shall be liable to refund the double of part payment received under Clause-1 above and similarly if the Vendee fails to make the balance payment within stipulated period in such case the Vendors shall be entitled to forfeit the amount of advance payment' 5. As per clause 11 of the said agreement, it was further agreed between the parties viz. That on receiving 33 % of sale consideration, the Vendors (defendant Nos. 1 to 3) shall handover the vacant and peaceful physical possession of One Unit Bungalow measuring 700 sq. Yds, out of the said property to the Vendee (plaintiff). It was also agreed between the parties in Clause 10 of the said agreement whereby defendants Nos.1 to 3 had undertaken and agreed to fully indemnify the
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plaintiff for all losses, litigations, suits, claims, objection, disputes whatsoever in case of any impediment found in the transfer of the said property in favour of the plaintiff. Plaintiff in compliance of the Clause 11 of the said agreement, arranged to pay a further sum of Rs,25,00 Million to the defendants Nos.1 to 3 for getting peaceful vacant physical possession of the one portion of the said property measuring 700 sq.Yds, and in this regard both the parties signed/executed a supplementary agreement of sale dated 10-10-2006 in continuity of the said Agreement. Thus, total amount for the said portion of 700 sq.Yds, at the rate of Rs,50,000 per sq. Yards was determined at Rs,35.0 Millions, out of which the sum of Rs,10.00 Million had already been paid through said agreement and a further sum of Rs,25.00 Million was paid through three cheques ; all drawn at Soneri Bank Ltd. Chandni Chowk Branch, Karachi, receipt whereof has duly been acknowledged by defendants Nos.1 to 3 in the said supplementary agreement and have also executed a separate receipt for the same in favour of the plaintiff. Upon total payment of Rs,35.00 Millions the defendants Nos.1 to 3 have handed over the peaceful vacant physical possession of one portion of the said property which was required to be 700 sq. Yds with all furniture and fixtures and fittings as agreed between the parties and in this regard the defendants Nos.1 to 3 have also executed a Loan Affidavit and Possession letter dated 10-10-2006. Defendants Nos.1 to 3 while handing over possession of said portion plaintiff committed certain illegalities and irregularities in performance of the contractual obligations. As there was difference in area, and in addition to this the defendants Nos.1 to 3 have also with mala fide intention removed most of the furniture and other articles available therein including fancy Electric fittings etc and this bitter fact was revealed when plaintiff reached to get possession thereof along with the defendants Nos.1 to 3 and the Estate Agents namely (1) Syed Jawad Karrar Naqvi and (ii) Jahangir son of Safdar Hussain which were required to be delivered to plaintiff and thereby defendants Nos.1 to 3 were not authorized to remove. Plaintiff as well as said broker Mr.Jahangir, constantly approached defendants Nos.1 to 3 in order to get the explanation of the said illegality and irregularity committed by them but they always gave a deaf ear and kept plaintiff on assurances only to provide/return the said furniture and fixtures and fancy electric fittings etc. Plaintiff through letter dated 11-10-2006 called upon defendants Nos.1 to 3 for illegalities / irregularities committed by them that at the time of handing over the physical possession of the one portion upon payment of 35.00 million and categorically emphasized upon misstatement made by defendants Nos.1 to 3 regarding lesser area of the said portion and illegal and unauthorized removal of the furniture, fixtures and fancy electric fittings etc. Which were available in the said portion. However, the defendants Nos.1 to 3 as per their normal routine and practice neither responded the said letter in writing nor complied with their assurances verbally given to the plaintiff in presence of the said two witnesses/brokers. 6. Defendants Nos.1 to 3 failed, neglected and avoided to comply with the agreed terms of agreement without assigning any rational and lawful justification, the plaintiff vide its letter dated 20-11-2006 called upon defendants Nos.1 to 3 to transfer said portion in favour of the plaintiff in terms of clause-2 of the said supplementary agreement and also direct them to provide/return the furniture, fixtures and fancy electric fittings, removed by defendants Nos.1 to 3 illegally and unauthorisedly from said portion and also directed to finalize the deal/transaction on or before 30- 11-2006 and in case of failure of the defendants, the plaintiff will have full rights and legal authority to revoke the said transaction and to claim the refund of the double of the part payment made by the plaintiff. Relevant portion of clause 2 of said supplementary agreement is:-- Clause-2...Thus all the above sums making together an aggregate sum of Rs,3,50,00,000 (Rupees Three Crore Fifty Lac only) being the full and final payment of above portion measuring 700 square. Yards receipt of which the Vendors (defendants) doth hereby admit and acknowledge separately. Upon receiving the full and final payment the Vendors (defendants) named above are
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bound to transfer the portion of 700 sq.Yds. Of the property in favour of vendee (plaintiff) named above. ' Despite lapse of more than two months of failure of defendants Nos.1 to 3 to comply with the agreed terms of the agreement dated 31-5-2006 and continuous un-responding attitude on the part of the defendants Nos.1 to 3 and attitude to give a deaf car upon all the bona fide requests and approaches of the plaintiff. However, defendants Nos.1 to 3 failed/neglected and avoided to comply with agreed terms and meanwhile market prices of said property reduced from Rs,50,000 per sq.Yds. To Rs,35,000 per sq.Yds. And thereby the plaintiff will suffer heavy monetary losses due to unreasonable, unjustified and irrational delay on part of the defendants Nos.1 to 3 for which defendants Nos.1 to 3 are liable and responsible to compensate and indemnify the plaintiff. Plaintiff, when, found all above bona fide efforts to settle the issue in amicable manner, unfruitful got served a legal notice dated 1-2-2007 to the defendants Nos.1 to 3 through his counsel, wherein the plaintiff besides high-lighting the irregularities and illegalities in performance of their contractual obligations also informed about the revocation of the said agreement dated 31-5-2006 and 10-10- 2006 by the plaintiff and thereby also directed the defendants Nos.1 to 3 to refund the sum of Rs,70.00 Millions (double of part payment of Rs,35.00 Millions) in compliance of clause-3 of the agreement dated 31-5-2006. Defendants Nos.1 to 3 through their Advocate's letter dated 7-2-2007 replied the Legal Notice of the plaintiff but badly failed to properly reply any of the allegations leveled in the said legal notice. On the contrary fictitious and concocted pleas has been taken which having no substance and truth. 7. Summons and notices were issued to the defendants, pursuant thereto the defendants Nos.1 to 3 caused their appearance, however, the defendants No,4, despite service, not appeared so he was declared ex parte vide order dated 13-8-2007. 8. In jointly filed written statement the defendants Nos.1 to 3 wherein admitted contents of the paras-1 to 11 but with addition that:-- According to the terms and conditions of sale agreement dated 31-5-2006 suit property was mutated in the names of the defendants Nos.1 to 3 from PECH Society on 12-8-2006 within the stipulated time period fixed between the parties hence they obtained their clear and marketable title for transfer of the same in favour of plaintiff. They got mutation in their favour within stipulated period as admitted by plaintiff in para-2 of the plaint. The defendants Nos.1 to 3 had a good clear marketable title in their favour for alienation of suit property in favour of plaintiff. It was pleaded that plaintiff failed to observe terms and conditions of Clause 3 of the sale agreement dated 31-5-2006 so defendants, while exercising their power, forfeited earnest money, paid by plaintiff. ' Defendants denied contents of paras. 12 to 14 while asserting that they after receiving 33% of sale consideration handed over physical peaceful vacant possession of 700 sq. Yards as settled between parties by fresh sale agreement dated 10-10-2006 and possession letter was also executed between parties at the time of handing over the physical and peaceful possession of one unit Bungalow of 700 sq. Yards, of the suit property. Plaintiff has himself admitted in Paras. 8 and 10 of the plaint that defendants Nos.1 to 3 were obliged to deliver vacant and physical possession of 700 sq.Yds to the plaintiff but it is surprising that plaintiff has manufactured and concocted story that defendants were obliged to deliver possession with fittings and fixtures to the plaintiff. It is against the terms and conditions of both sale agreements. Neither it was settled between parties nor did defendants commit any illegally in delivery of possession of 700 sq.Yds. To plaintiff. Undertaking given by Mr. Jehangir and Syed Jawad Tarar Naqvi are false and fabricated. They have themselves witnessed the sale agreement dated 10-10-2006 and possession letter dated 10- 10-2006 wherein it is specifically mentioned that the Vendors shall deliver vacant and peaceful possession of 700 sq. Yards to the plaintiff which the defendants did. Denying the para 15 of the
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plaint the defendants pleaded that they never received any letter dated 11-10-2006. They, however, pleaded to have committed no illegality in handing over 1/3rd portion of the property so the allegations. Paras-16 and 17 of plaint were denied with claim that they never received any notice dated 20-11-2006 from plaintiff, however, plaintiff was obliged to show his readiness and willingness to perform the contract after execution of sale agreement dated 31-5-2006 within stipulated period of six months from date of execution of sale agreement. Plaintiff neither prepared memo of sale deed and publication nor got prepared pay order for remaining sale consideration which shows mala fide on part of the plaintiff. The suit property was purchased by plaintiff at prevailing market rate and plaintiff was obliged to get execution of sale deed within prescribed time of six months and if market rate of suit property had been reduced it is only due to the act of the plaintiff the defendant are not obliged to suffer losses of decrease in rate of the suit property which have been done due to negligence of the plaintiff. It was further pleaded that if the defendants failed in performing their part the plaintiff was obliged to have filed suit for Specific Performance of contract and not to revoke the sale agreement on frivolous grounds while legal notice dated 1-2-2007 issued by his counsel after expiry of the prescribed time of execution of sale agreement. Since plaintiff himself has violated the terms and condition of the sale agreement, so not entitled to refund of double of part payment of sale instead defendants are entitled to forfeit the earnest money. Defendants claimed that at the demand of the plaintiff they applied for bifurcation of the plot into 2 portion of 1000 sq.Yds each to the authorities and it was never settled between the parties that 700 sq. Yds. Shall be got bifurcated from whole plot and it was also never assured that defendants shall transfer =one portion of 700 sq. Yds in favour of plaintiff. The defendants also claimed that plaintiff never attempted to finalize the sale within stipulated period so defendants forfeited the advance money. It was also claimed that plaintiff was required to have hand over the possession immediately hence they claimed mesne profit at rate of. Rs,50,000 per month from date of delivery of possession i.e, 10-10-2006 till possession is handed over to defendants. Besides above, the defendants also raised legal obligations to maintainability, of suit of the plaintiff and that he (plaintiff) had no cause of action. 9. The defendants of the leading Suit No,261 of 2007 also filed their own Civil Suit No,701 of 2007 against the plaintiff of leading suit for following relieves:- (a) Declaration to the effect that the defendant has violated the terms and conditions of the sale agreement dated 31-5-2006 and 10-10-2006, so the plaintiffs are entitled to forfeit the earnest money of Rs,3,50,00,000 received by them from the defendant; (b) Declaration to the effect that because the defendant has committed the violation of terms and conditions of sale agreement so he is not entitled to claim the refund double amount of earnest money; (c) Declaration to the effect that the decrease of market price has been occurred by the negligence on the part of the defendant so the plaintiffs are entitled to receive a sum of Rs,3 crores on account of losses in decrease of sale price from the defendant; (d) Direct the defendant to deliver the peaceful vacant and physical possession of a portion of Bungalow of 700 sq. Yds. Situated at plot No,43/9-G , Block 6, Survey Sheet No,35/P/1 out of 2000 sq. Yds situated at PECH Society, Karachi; (e) Direct the defendant to pay mesne profit at the rate of Rs,50,000 per month as prevailing market rent of the premises of the area of 700 sq. Yds w.e.f 10-10-2006 till the possession is delivered by the defendant to the plaintiffs; (f) Permanent injunction against the defendant his nominees, agents and assignees from creating 3rd party interest or impart possession of 700 sq. Yds which is in his possession; (g)Any other relief which this Hon'ble Court may deems fit and proper in the circumstances of the case;
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(h) Costs of the suit; 10. While the pleadings in this suit were almost same as that came surface in leading suit, therefore, the same needs not be' re-mentioned again. Out of the pleadings of the parties' the following consolidated issues were framed:-- (1) Who has violated the terms and conditions of Clause 3 of sale agreement dated 31-5-2006, what result? (2) Whether the Vendee was given possession as per Clause 11 of sale agreement dated 31-5-2006 from 10-8-20062 (3) Whether the Vendors have cleared their marketable title within the stipulated time as per Clause 2 of sale agreement? (4) Whether the Vendee cancelled the sale agreement after the stipulated time i.e, on 1-2-2007? (5) Whether the possession of the Vendee on suit property becomes illegal and as encroacher after the date of delivery of possession and the plaintiff is entitled to receive mesne profit at the rate of Rs,50,000 per month of 700 sq.Yds. Which is prevailing market rate of rent of the area from 10-8-2006 till the possession is handed over to the Vendors? (6) Whether the decrease of value of suit property from Rs,50,000 per sqr.Yd. To Rs,35,000 per sqr.Yd admitted by plaintiff/ Vendee in para No,18 of the Suit No,261 of 2007. The Vendors/ defendants are entitled to receive amount of difference of value Rs,3 Crores from the Vendee? (7) Whether the Vendors are entitled for recovery of possession of the suit property from the Vendee? (8) What should the decree be? 11. The matter was referred to the Commissioner for recording of evidence and in compliance whereof plaintiff S.M. Shoib and defendant M. Karim Gul Aga appeared before the learned Commissioner; filed their respective affidavit-in-evidence(s). 12. The evidence of the plaintiff was recorded as PW-1 wherein he produced his affidavit-in- evidence as Exh.PW.1/1 and produced following documents:-- (1) Mutation letter dated 12-8-2006 as Exh.PW.1/2 (2) Sale Agreement dated 31-5-2006 as Exh.PW.1/3 (3) Receipt dated 31-5-2006 as Exh.PW.1/4 (4) Photo copy of Supplementary Agreement dated 10-10-2006 as Exh. PW. 1/5 (5) Receipt dated 10-10-2006 as Exh.PW.1/6 (6) Letter of possession dated 10-10.-2006 as Exh.PW.1/7 (7) Loan Affidavit dated 5-8-2006 as Exh.PW.1/8 (8) Photo copy of undertaking by Naqvi son of Syed Karrar Hussain as Exh.PW.I/9 (9) Photo copy of undertaking by Jehangir as Exh.PW.1/10 (10) Plaintiff's letter dated 11-10-2006 as Exh.PW. 1/11, along with courier Ack. Receipt as Exh.PW.1/11-A (11) Plaintiff's letter dated 20-11-2006 as Exh.PW.1/12 along with courier receipt as Exh.PW.1/12-A (12) Legal Notice dated 1-2-2007 issued by Salim Thepdawala & Co. As Exh.PW.1/13 (13) Reply of legal notice dated 7-2-2007 issued by Idrees Law Associates as Exh.PW.1/14 (14) P.E.C.H.S letter dated 30-12-2006 as Exh.PW.1/15 (15) Newspaper clipping dated 14-12-2006 published in daily 'JANG' Karachi as Exh.PW.1/16 13. Defendants on their turn, filed affidavit-in-evidence of defendant Muhammad Karim Gul and during his examination he produced the same and special power of attorney on behalf of defendants Nos.1 and 2. 14. The learned counsel for the plaintiff has argued that the defendant failed in getting his title clear for purpose of executing registered document of the property under sale, therefore, he breached the term of the contract hence liable to compensate the plaintiff; it was a matter of record that the defendant, within stipulated period, was not having the marketable title for making a legal
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registered sale deed in favour of the plaintiff therefore, within stipulated period he failed to make the title of the plaintiff perfect. He, therefore, prayed for decree of the suit of the plaintiff while relying on the case-laws reported as Hakim Ghulam Rasool v. Sh. Imdad Hussain (PLD 1968 Lah. 501); Mussarat Shaukat Ali v. Safia Khatoon (1994 SCMR 2189); Dada Steel Mills v. Metal Export (2009 CLD 1524); Sigallo Asia Limited v. Akbar Enterprises (Pvt.) Limited (2001 CLC 660) and Mahmooda Khatoon v. Syed Zainul Hasnain Rizvi (PLD 1958 Kar. 150). 15. On the other hand, the learned counsel for the defendant has argued that defendant cleared the title within time and was ready to perform his part but the plaintiff did not come forward to get the title though time was essence of agreement. After expiry of the period for execution of sale agreement i.e, 30-11-2006 the plaintiff served a notice for revocation of sale agreement though there was no such term for revocation of the agreement and even the plaintiff admitted about decrease in value of the property. He, having concluded so, prayed for decree in favour of the defendant. He has placed reliance on the case laws, reported as PLD 1968 SC 497, lqbal Ahmed v. Col. Abdul Kabeer (SBLR 2005 Sindh 625); Sunshine Enterprises (Pvt.) Ltd. v. West Pakistan Tank Terminal (Pvt.) Ltd. (2002 YLR 3815 Karachi), Mubarik Ali v. Tula Khan (1985 SCMR 236); Muhammad Sharif v. Fajji (1998 SCMR 2485); Muhammad Sharif Sandhu v. District Accounts Officer (2011 SCMR 1287 SC); Muhammad Yar v. Muhammad Tahir (2003 YLR 3066 (Pesh)); Bashir Hussain Siddiqui v. Pan-Islamic Steamship Co. Ltd. (PLD 1967 Karachi 222); PLD 1993 SC 311 and AIR 1935 Rajhistan 70. 16. Heard learned counsel (s) for plaintiff and defendants and have also meticulously examined the available material. My findings on the issues with reasoning are as under:- FINDINGS ' Issue No,1 'As discussed'…
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