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Petitioner: KHAYABANEIQBAL (PVT.) LTD. and 2 others VS Respondent: MUSTAFA HAJI MUHAMMAD
Court Name: Sindh High Court Judge(s): Rasheed A. Rizvi Title: KHAYABANEIQBAL (PVT.) LTD. and 2 others vs MUSTAFA HAJI MUHAMMAD Case No.: Suits Nos.368 and 426 of 1995 Date of Judgment:1995-12-20 Reported As: 1996 CLC 1758 Result: Order accordingly
JUDGMENT
JUDGMENT ' This order will dispose of several applications filed in Suit No,368/95 as well as in Suit No,426/95 as the law involved and the facts are similar and pertain to the same immovable property. Plaintiff No,1 in Suit No,368/95 is a private limited company while plaintiffs Nos.2 and 3 are its directors. The defendant in the said suit is the person who is claiming to have purchased the Plot bearing No,G.20, Block-9, K.D.A. Scheme No,5, Clifton, Karachi measuring 6533 square yards, hereinafter referred to as the plot in question. The plaintiffs in Suit No,368/95 are also defendants Nos.1 to 3 respectively in Suit No,426/95 filed by the defendant of Suit No,368/95. It would be convenient if the plaintiffs in Suit No,368/95 and defendants Nos.1 to 3 in Suit No,426/95 are called "the Owners". Likewise, the defendant in Suit No,368/95 who is also the plaintiff in the Suit No,426/95 is called as "the Purchaser". Suit No,368 of 1995 2. The brief facts of Suit No,368/95 are that the suit property belongs to the plaintiff No,1 while the other two plaintiffs are its directors. That one Liaquat Abdullah who is an estate agent by profession (defendant No,4 in Suit No,426/95) was instructed by the plaintiffs to bring offers at certain suggested rates for some plot in which the plaintiffs were interested. That the said estate agent introduced the purchaser who was interested in buying the plot in question from the owners. It is the case of the plaintiffs that the defendant approached the plaintiffs for the sale of plot in question which did not reach beyond the stage of negotiations. That the plaintiffs received three legal notices dated 13-5-1995 from the learned Counsel for the defendant alleging that an oral agreement containing many terms and conditions were reached between the parties for the sale of the plot in question and that a cheque of Rupees one million had been handed over to the
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plaintiffs which fact the plaintiffs have denied in their plaint. That on 16-5-1995 public notices were published in daily Dawn, Karachi and daily Jang, Karachi which, as averred in the plaint, are unlawful and vicious attempt on the part of the defendant to harm the plaintiffs and their project. In view of these circumstances, the plaintiffs have filed suit for permanent injunction seeking perpetual injunction against the defendant, his agent, servants, employees restraining them from advertising/publishing in any manner false claim for the sale/transfer of the plot in question and from interfering with the right of the plaintiff No,1 as its lawful and exclusive owner. The plaintiffs have also filed application for seeking interim injunction in the same term which is C.M.A. No,3004/95. 3. The defendant/purchaser has denied the allegations of the owner/plaintiff that the plot in question was never sold to the purchaser. It is vehemently pleaded by the defendant/purchaser in his counter-affidavit that the deal for the sale of plot in question was concluded and the sale price was fixed at Rs,38,000 per square yard with the two options, i,e, down payment of 40% of the purchase price in cash and 30% in 4-1/2 months and remaining 30% in the nine months' time with the bank guarantee for the payment of 60% balance sale consideration, secondly, a down payment of 50% in cash, 25% in six months and the remaining 25% in nine months with the bank guarantee for the payment of balance sale consideration for the period mentioned earlier. The defendant/purchaser has also alleged that the plaintiffs/owners agreed for the transfer of the entire share-holding/equity of the company. The defendant has also pleaded that on 19th April, 1995 he has issued a cheque for Rupees one million in favour of the plaintiff No,1 . 4. It is pertinent to note that the United Bank Limited (defendant No,5 in Suit No,426/95) issued a public notice in daily Dawn, Karachi dated 2-6-1995 claiming therein that the property in suit is mortgaged with them as security by the owners/plaintiffs against certain arrangements with the Bank. In this public notice, it was clearly stated by the Bank that it would not be bound or be adversely affected in its right by any agreements, deal, contracts and transactions between the owners and the purchaser. None of the parties have disputed the fact that the suit property is mortgaged with the United Bank Limited. Suit No,426 of 1995 5. The plaintiff in this suit is the defendant in Suit No,368/95 to whom I am referring as the purchaser. He has filed this suit for declaration, injunction and specific performance and in the alternate for damages for Rs,15,84,02,500. The purchaser has prayed for grant of declaration that the terms and conditions held in meeting dated 19-4-1995 are binding on the owners and that they are not entitled to withdraw the same. He has also prayed for a decree of specific performance of the oral agreement dated 19-4-1995 for the plot in question, for compensation and for mandatory injunction against the owners for delivery of the title documents as well as for conveying the property in question to purchaser. In the alternate, the plaintiff/purchaser has prayed for damages also. His case in this suit is same as his defence in the above suit. He has stated in his plaint that out of the two options as stated hereinabove he accepted the first and met the owners alongwith the defendant No,4, namely, Liaquat Abdullah who is disclosed as an estate agent in Suit No,368/95. It has not been denied by either party that the defendant No,4 is an estate agent by profession and was instrumental in arranging meeting of the plaintiff/purchaser with the defendants Nos.2 and 3/owners on 19-4-1995. In this suit, United Bank Limited, Jubilee Insurance House, I.I. Chundrigar Road, Karachi is impleaded as defendant No,5. This defendant had denied that the public notice as it appeared in the daily Dawn is a result of collusion between the owners and the Bank. In their written statement, the UBL/defendant No,5 has specifically pleaded that in the month of April, 1994 the property in question was mortgaged with the Bank by delivering all original title deeds through a memorandum which they have filed as Annexure-D/1 with their written statement which was registered under section 127 of the Companies Ordinance, 1984 with
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the Registrar of Companies. Annexure-D/2 filed with the written statement of U.B.L. Supports this fact. 6. The most significant aspect which requires consideration is alleged in the counter-affidavit filed by the defendant No,4, namely, Liaquat Abdullah, the estate agent. The defendant No,4 has stated that he was called by the defendants Nos.2 and 3/owners in early 1995 and expressed their desire to sell the plot in question. That the plaintiff/purchaser showed his interest to buy the property in question under the instructions of the owner. The defendant No,4 conveyed the two terms as mentioned hereinbefore. That on 19-4-1995 a meeting was held between the plaintiff of this suit (purchaser) and defendants Nos.2 and 3/owners and in the words of defendant this meeting was held "to finally settle the terms and conditions for the sale of the suit plot." He has supported purchaser to the extent that the first option was agreed upon between the parties. He has also supported the purchaser to the extent that in his presence cheque of Rupees one million was delivered to the owners. The estate agent in paras. 6 and 7 of his counter affidavit not only denied the contents of the paras. 6 and 7 of the purchaser's affidavit but improved the version of the purchaser by stating that the purchaser wanted to show the full consideration in agreement whereas the owner wanted to execute an agreement for sale of shares of the companies at the face value with a nominal premium which was not accepted by the purchaser. In para. 7, he has admitted that in the meeting of 19-4-1995 it was not disclosed to the purchaser that the share- holding of the company would be transferred at face value with nominal premium. 7. The owners/defendants Nos.1 2 and 3 in this suit have vehemently denied the case of the purchaser. They have prayed for dismissal of the suit. Their case is that the purchaser never visited their office on 19-4-1995 alongwith the estate agent. They have denied holding of any deliberations or negotiations. They have also denied acceptance of any cheque or consideration from the purchaser. It is their case that the defendants Nos.1 and 2 being only two directors were not in a position to sell the property of the company without seeking approval/consent of the other remaining directors. That they were not in a position to sell the property in suit as they had already booked/sold some 13 apartments to other persons and that the property being mortgaged was not liable to be sold without approval of the Bank. 8. I have heard Mr. Khalid M. Ishaque for the owners, Mr. Abdul Hafeez Pirzada, Advocate for the purchaser. It is contended by Mr. Khalid M. Ishaque that there is no concluded and binding agreement between the owner and the purchaser and, therefore, the acts of the purchaser to claim their ownership in the property in suit is illegal, unauthorised as well as mala fide. According to the learned counsel, it is vicious attempt on the part of the purchaser to harm the plaintiffs and their project. He has heavily relied upon the counter-affidavit of the estate agent in support of his contention that the alleged negotiations held on 19th April, 1995 in no manner amount to a concluded and binding agreement. ' That the element of promise is absolutely absent in the case of the purchaser. He has relied upon the following reported cases:- (1) Col. D.I. Mac Pherson v. M.N. Appanna and another (AIR 1951 SC 184). (2) Shaukat Ali v. Secretary, Industries and Mineral Development, Government of Punjab, Lahore and 3 others (1995 MLD 123). (3) Ch. Muhammad Hussain and another v. Hidayat Ali and 6 others (NLR 1981 SCJ 460). (4) Abdul Razak Adamjee and another v. Director-General, Karachi Development Authority (1995 MLD 803). (5) Liqram v. Agar Das (AIR 1967 Himachal Pradesh 29). (6) Zafar Ahmad v. Mst. Hajran Bibi (PLD 1986 Lahore 399). (7) M. Ghulam Muhammad v. Custodian of Evacuee Property, Lahore and others (PLD 1966 Lahore 953).
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(8) Sh. Manzoor Ahmad and others V. Mst. Iqbal Begum and others (1989 SCMR 949). (9) Shajar Ali Hoti v. Esmail Sobhani (1985 CLC 342). (10) M/s. Saral Trading Co. And others v. M/s. Mahesh Steel Traders, New Delhi (AIR 1987 Delhi 4). (11) M/s. Urmila & Co. (Pvt.) Ltd. v. M/s. J.M. Baxi & Co. (AIR 1986 Delhi 336). (12) Balquees Zaman Khan and others v. Tahir Mahmood Butt (1991 CLC 1507) and (13) Abdul Wahid and 5 others v. Noor Muhammad and 7 others (PLD 1993 Lahore 552). 9. Mr. Abdul Hafiz Pirzada, learned counsel for the purchaser has strenuously argued that since there was a legal and duly concluded oral agreement between the parties as such the purchaser is entitled for the injunction as prayed as well as for the specific performance of the said contract. That the purchaser has successfully proved all the three ingredients for the grant of interim injunction. He has relied upon the following cases:-- (1) Fawwad & Fareen Enterprise Ltd. v. Director of Industries, Government of Sindh, Karachi and others (PLD 1983 Karachi 340). (2) Abdus Saeed Khan and 2 others v. Basharat Ali and 13 others (PLD 1995 Lahore 255). (3) Ali Muhammad Khan v. Riazuddin Khera (PLD 1981 Karachi 170). (4) Bashir Ahmad v. Muhammad Yousaf (1993 SCMR 183). (5) Haji Ayub v. Mst. Bachai and another (PLD 1983 Quetta 114). (6) Ata Ullah Malik v. The Custodian Evacuee Property, West Pakistan, Karachi and others (PLD 1964 SC 236). (7) The President v. Mr. Justice Shaukat Ali (PLD 1971 SC 585). 10. Now I propose to deal with the several interlocutory applications filed in both these suits. However, I will deal with the injunction applications at a subsequent stage of this order. C.M.A. No,3787 in Suit No,426 of 1995 11. This is an application under Order X Rule 2 C.P.C. Filed by the purchaser/plaintiff in Suit No,426/95 praying that he may be allowed to examine the defendant No,4 who is an estate agent relating to the matter in controversy as it is in the interest of justice. It is alleged by the purchaser in his supporting affidavit that this estate agent is the permanent agent and authorised representative of the owners and that in past he was dealing on their behalf for the sale and purchase of several other immovable properties. Mr. Pirzada has argued that the owners have not denied the defendant No,4 to be their estate agent and that since the contents of the counter-affidavit filed by the defendant No,2, on the face of it, is false and inconsistent as such he may be allowed to cross- examine the defendant No,4 for the purpose of establishing the truth of the matter and ascertaining the real controversy involved in this case. He has relied upon the case of Haji Ayub v. Mst. Bachai and another (PLD 1983 Quetta 114). 12. Mr. Khalid M. Ishaque has vehemently opposed this application. It is argued that Rule 2 to Order X, C.P.C. Will attract at the stage of first hearing or at any subsequent hearing and not at the stage of hearing of interlocutory applications. He has contended that this application has been filed by the purchaser to harass the owners and to drag the case unnecessary for an indefinite period. He has relied upon the case of Liqram v. Agar Das (AIR 1967 Himachal Pradesh 29). 13. Order X, Rule 2, C.P.C. Empowers a Court at the stage of hearing or at any subsequent stage to orally examine any party appearing in person or present in Court or any person able to answer any material question relating to the suit and it further empowers that a Court may put him questions during such examination. However, the High Court while exercising its original civil jurisdiction is not required to reduce in writing the substance of the examination as provided in Rule 3 to Order X, C.P.C. (See Order XLIX, Rule 3 (2),C.P.C.). The purchaser has not specifically stated in his application as what are the material questions upon which the examination of defendant No,4 is required which is necessary for the purpose of ascertaining the real matter in controversy. Neither the applicant/purchaser has pointed out any specific contradictions and ambiguity in the affidavits of
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the estate agent and in the affidavit of owner which may entitle him for grant of this application. In my view if such applications are granted this will amount to holding of mini Trial within a full- fledged Trial. In the case of Haji Ayub v. Mst. Bachai, a learned Single Judge of the Balochistan High Court observed that the Court can examine the parties under 'Order X, C.P.C. If the pleadings of the parties are wanting any clarity and for the purpose of getting the cases of parties properly on record. In the instant case, the applicant was not able to bring his case within the rule laid down in the case of Haji Ayub. In the case of Manmohan Das and others v. Mt. Ramdei and another (AIR 1931 P.C. 175), it was held by the Privy Council that the Court should not hold mini Trial. It was held as follows:- "... But this power is intended to be used by the Judge only when he finds it necessary to obtain from such party information on any material questions relating to the suit and ought not to be employed so as to supersede the ordinary procedure at Trial as prescribed in 0.18...." ' In the circumstances, C.M.A. No,3738/95 is dismissed. C.M.A. No,3386 in Suit No,426 of 1995 14. This application under Order XXXVII, Rule 7, C.P.C. Has again been filed by the purchaser with the prayer that Nazir of this Court be allowed to enter upon the office premises of the defendant and to take possession, custody and control from the defendants Nos.2 and 3 all receipt books, allotment orders, application forms, booking/accounts registers, pay-in-slips and all other documents pertaining to the booking of the apartments in the project and to retain the same with such Officer of this Court as to be appointed. The reason given for such relief as stated in the affidavit, is that the owners have turned dishonest and totally refused to honour the terms of contract for the property in question and that the owner may with the purpose of delaying the claim of the purchaser may create further charge. All these allegations have been denied by the owners through their counter-affidavit. 15. Through this application, the plaintiff in Suit No,426/95 is seeking dispossession of the company and its directors from their offices and is also seeking appointment of an Officer of this Court to take into possession all the documents of the company on the basis of an oral agreement for the sale of an immovable property. It is now well-settled that an agreement to sell does not create any right, title or interest in the immovable property (For reference, see M. Ghulam Muhammad v. Custodian of Evacuee Property. Lahore and others PLD 1966 Lahore 953). In the case of Dip Narain Singh v. Nageshar Prasad and others (AIR 1930 Allahabad 1), a Full Bench of the Allahabad High Court held that a mere undertaking to mortgage or to sell an immovable property would not amount to actual transfer of any interest in the property. It was further held that a deed of sale or mortgage, if duly registered, would operate as a conveyance of such interest. In a recent case of Sh. Manzoor Ahmad and others v. Mst. Iqbal Begum and others (1989 SCMR 949), it was held by the Hon'ble Supreme Court "that a contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties but it does not, of itself create any interest in or charge on such property." In view of this settled law, I am of the considered opinion that the applicant/purchaser has no right, title or interest in the business of the defendants Nos.1 to 3 and, therefore, the buyer is not entitled in law for the interim relief as prayed in this application. 16. To grant an interlocutory injunction in a manner as prayed in this application under Order XXXVII, Rule 7, C.P.C., I am of the view that the plaintiff has to show something more than a prima facie case, irreparable loss and balance of convenience since this provision directly comes into conflict with the Article 18 of the Constitution of the Islamic Republic of Pakistan, 1973 which provides freedom to every citizen to enter upon any lawful profession or occupation and to conduct any lawful trade or business. Article 24(1) protects all persons' right of property. In the instant case, the purchaser was not able to establish a strong case for the relief which he has prayed. For the
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reasons which I propose to discuss while deciding injunction applications, I dismiss this application. C.M.A. No,3386/95 stands disposed of. C.M.A. No,3480 in Suit No,426 of 1995 17. This is an application filed by the owner under Order XXXIX, Rule 4, C.P.C. To set aside, discharge or vary the ad interim injunction passed against them by this Court in the above suit on 13-6-1995. I propose to deal this application alongwith the two other injunction applications. C.M.A. No,3543 in Suit No,426 of 1995 18. This application has been filed by the purchaser under Order XIX, Rule 2, C.P.C. Seeking order to cross-examine the defendant No,2 upon the contents of his counter affidavit. The reason given is that the counter-affidavit is false, inconsistence and that it is necessary for the purpose of establishing truth. Mr. Abdul Hafeez Pirzada has relied upon the case of Ata Ullah Malik v. The Custodian Evacuee Property and others (PLD 1964 SC 236) as well as on the case of The President v. Mr. Justice Shaukat Ali (PLD 1971 SC 585). In the case of Ata Ullah Malik, it was observed by the Hon'ble Supreme Court that every person against whom an affidavit is produced is entitled in the absence of special circumstances to have the deponent put in the witness-box and to cross- examine him. The facts of the reported case is quite distinguishable with the facts of the present case. For the purpose of calling a deponent for cross-examination, the applicant must show what is the ambiguity in the affidavit and what is the clarity which the applicant wants to bring on record through such cross-examination. The rule laid down by the Hon'ble Supreme Court in the case of The President v. Mr. Justice Shaukat Ali is not attracted in the circumstances of the present case as it deals with the Rule 1 to Order XIX, C.P.C. And secondly the facts are quite different of the reported case in comparison to the instant case. I have held earlier that it is neither proper nor justified in absence of any special circumstances to hold mini Trial within a full-fledged Trial. In the circumstances, C.M.A. No,3543/95 is dismissed. C.M.A. No,3004 in Suit No,368, C.M.A. No,3385 and C.M.A. No,3480 in Suit No,426 of 1995 19. Plaintifs/owners have filed application under Order XXXIX, Rules 1 and 2, C.P.C. In Suit No,368/95 praying that the defendant, his servants, agents, employees be restrained from advertising, publishing in any manner the claim for the sale/transfer of the property in question (C.M.A. No,3004/95). The plaintiff/purchaser in Suit No,426/95 has also filed application seeking temporary injunction against the owners, their agents, attorneys, employees from selling, transferring, leasing, mortgaging and disposing of in any manner the property in question or transferring, approving, recording and registering any transfer of the shares of the company parting with the possession or creating any third party right till the disposal of this suit (C.M.A. No,3385/95). On 13-6-1995 this Court in Suit No,426/95 passed ad interim injunction restraining the owners from booking further flats against which the owners have filed an application under Order XXXIX Rule 4, C.P.C. (C.M.A. No,3480/95). 20. Mr. Abdul Hafeez Pirzada has argued that to obtain an interim injunction in a suit for specific performance the plaintiff is only required to show a prima facie case. He has referred the case of Muhammad Matin v. Mrs. Dino Manekji Chinoy and others (PLD 1983 Karachi 387). In this reported case, a learned Division Bench of this Court has held that all that the plaintiff needs to obtain an interim injunction in a suit for specific performance is to establish that there is a prima facie existence of a right and threatened infringement, and, once he succeeds in showing this, he could obtain an injunction. It was further held that the burden on the plaintiff seeking such relief is not as onerous as the burden would be for succeeding in obtaining a decree for the specific performance. The word "prima facie" was also defined in this reported case as in a case where substantial or serious question of law or fact arises the requirement of having a prima facie case would be satisfied. In reply to this plea, Mr. Khalid Ishaque has argued that since the purchaser is claiming a right on the basis of an oral agreement, therefore, he is bound to establish prima facie a strong
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case in support of the alleged oral agreement. He has further argued that the incident narrated in the plaint and in the counter-affidavit of the purchaser does not even prima facie show that the alleged oral agreement was a concluded and a binding contract. Both the learned counsel have cited several cases in support of their respective contentions. 21. It is now well-established that the contract can be in writing as well as oral and that the oral agreement is also enforceable as a written agreement D provided it fulfils all the requirements of a valid contract. (See the case of Bashir Ahmad v. Muhammad Yousaf 1993 SCMR 183). It is also well- settled that an oral agreement requires for its proof clearest and most satisfactory evidence. (See the case of Ali Muhammad Khan v. Riazuddin Khera PLD 1981 Karachi 170). The question of sufficiency and insufficiency of proof of an oral contract came up for consideration before the Hon'ble Supreme Court in the case of Ch. Muhammad Hussain and another v. Hidayat Ali and 6 others (NLR 1981 SCJ 460) wherein it was held that the subject-matter of the controversy, the conduct of the parties. Nature of relationship and experience of the parties are all relevant facts for determining the credibility of oral evidence on such matter. Following is the relevant portion of the said reported case:-- "11. As regards the oral evidence and its effect and credibility, the learned counsel is not correct in insisting that oral evidence should be…
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