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Petitioner: Shaikh Abdul Jabbar through his Legal Heirs VS Respondent: Irfan Jami Rafique and another
Court Name: Sindh High Court Judge(s): Muhammad Faisal Kamal Alam Title:Shaikh Abdul Jabbar through his Legal Heirs vs Irfan Jami Rafique and
another Case No.: Suit No.1311 of 2004 Date of Judgment:2018-06-08 Reported As: 2018 SHC 760 Result: N/A Judgment Muhammad Faisal Kamal Alam, J: The present suit filed by Plaintif fs, inter alia, seeking specific performance of the 'Mutual Agreement' dated 02.04.2002 (Exhibit- P), besides following relief(s): "It is, therefore, prayed that this Honourable Court may be pleased to pass a Judgment and Decree against the Defendants No.1 and 2 and in favour of the Plaintif f as under; A. Directing the Defendant No.1 to specifically perform the agreement dated 02.04.2002 by delivering the physical possession of the Shops No.12, 13 and 14 in "Jami Center" at Survey No.4 Sheet R.B-7 Aram Bagh Quarters Karachi, to the Plaintif f and to execute the sub-leases in favour of the Plaintif f in respect of the above shops, after determining the price per Sq. Ft. of the said shops, for the payment of the balance sale consideration to the Defendant No.1 at the time of registration of Sub-lease. A.1 Declare that the Sale Deed executed by the Defendant No.1 in favour of the Defendant No.2 in respect of the suit shops is beyond the scope of the agreement vaid and authority and it be ordered to be delivered up and cancelled and physical possession of the suit premises be handed over to the Plaintif f. B. That in default of the Defendants to deliver possession of the Shops No.12, 13 and 14 and to execute the sub leases, the Nazir of this Honourable Court may be authorized to take physical possession of the said shops from the Defendant and hand over to the Plaintif f and execute the Sub-Leases on behalf of the Defendant No.1 in favour of the Plaintif f. C. Grant permanent injunction restraining the Defendant No.1, from cancelling the booking of the shops, transferring, alienating or creating third party interest in the said shops. D. Any other relief(s) deemed to be fit and proper by this Honourable Court under the circumstances of the case."
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2. The Defendant No.1 contested the claim of Plaintif f and vide order dated 05.09.2005, the 'Askari Commercial Bank Limited' has been impleaded as Defendant No.2. 3. The subject matter of this case is the afore-referred agreement of 02.04.2002 (the subject agreement) in respect of Shops No.G-12, G-13 and G-14, which were to be handed over to Plaintiff in terms of the subject agreement, in exchange of Shop No.16 in which the Plaintiff was a tenant and running his business by the name 'Delhi Muslim Kali Hotel' -the demised premises, was located in a multistoried building called "Jami Centre" at Plot/Survey No.4, Sheet No.R-B-7, Aram Bagh Quarter , Karachi. For the sake of reference, the Shop No.16 will be referred to as "demised premises" and the proposed shops No.12, 13 and 14 as "proposed shops" . 4. From the divergent pleadings of the parties, following Issues were framed "1. Whether the Plaintiff or Defendant No.] has committed breach of mutual Agreement dated 22.04.2002? 2. Whether the Plaintif f is entitled to specific performance of mutual Agreement dated 22.04.2002? 3. Whether Defendant No.] has lawfully cancelled the mutual Agreement dated 22.04.2002? 4. Whether the Plaintif f has not come with clean hands and has filed the present suit with mala fide and ulterior motives? 5. Whether the Agreement being uncertain and vague is void in terms of Section 29 of the Contract Act? 6. Whether the Plaintif f was fully aware that the suit property had already been sold, conveyed, transferred and possession thereof has also been delivered to Defendant No.2 prior to the date of filing of the suit? 7. Whether the Plaintif f in the presence of witnesses (members of Alliance Market) admitted that he was not interested and willing to complete the sale and permitted the defendant to sell the suit shops to another buyer? 8. Whether Defendant No.2 is a bonafide purchaser of the suit property for valuable consideration without notice? 9. Whether the Plaintif f made any part payment for the sale of shops in respect of the subject property? 10. What should the decree be?" 5. Mr. Abdur Rahman, the learned counsel for Plaintif f has argued that the subject agreement is enforceable in law and Defendant No.1 committed serious breach of his commitment when the proposed shops were not handed over to Plaintif f and instead Defendant No.1 sold a large space in the above-named building, which includes the area of the proposed shops to Defendant No.2 (Askari Bank). In this context, he is also seeking relief that the Sale Deed dated 19 November , 2004 (Exhibit- N page- 173 of the Evidence File) between the present Defendants No.1 and 2 (Askari Commercial Bank Limited) is also liable to be cancelled. 6. On the other hand, Mr. Muhammad Arif Khan, the learned counsel for Defendant No.1, while refuting the arguments of Plaintiff has primarily contended that since the Plaintiff did not make timely payment as per the schedule of subject agreement, therefore, after proper cancellation of the proposed shops, the subsequent Conveyance/Sale Deed with Defendant No.2 has been executed and the said Defendant No.2 already operating its Branch from the subject premises. The stance of Defendant No.2 is that its right and interest as transferee of the subject premises/property is protected under the well-established doctrine of bona fide purchaser for value without notice, which is recognized in Section 41 of the Property Law and 27(b) of the Specific Relief Act. 7. Arguments of the learned counsel representing the parties have been thoughtfully considered and with their assistance record of the proceeding has been perused. 8. Findings on the issues are as follows: FINDINGS ISSUE NO.1.As under. ISSUE NO.2. As under . ISSUE NO.3. In Negative. ISSUE NO.4. As under . ISSUE NO.5. In Negative.th
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ISSUE NO.6. As under ISSUE NO.7.In Negative. ISSUE NO.8. In Negative. ISSUE NO.9. In Affirmative. ISSUE NO.10.Suit Decreed. REASONS ISSUES NO. 4, 5 and 9. 9. Issues No.4 and 5 relate to the maintainability of the present case and Issue No.9 is also linked with it. The subject agreement (Exhibit-P) is an admitted document in which the entire transaction between the Plaintiff and Defendant No.1 is mentioned. Primarily, the Defendant No.1 being landlord / owner of the above-named building had to undertake building works and renovation thereof for which the subject agreement was entered into between Plaintiff and Defendant No.1. Admittedly, the Plaintiff was running a business in the above demised premises, which was surrendered to Defendant No.1 for a total monetary consideration of rupees ten million from which Rs.2.5 Million was received by the Plaintiff and the balance amount was to be adjusted at the time of purchase of the proposed shops on the terms mentioned in the subject agreement itself. With these basic undisputed facts, at this stage, it cannot be held that the Plaintif f has invoked the jurisdictio n of this Court with unclean hands, therefore, Issue No.4 is answered accordingly that the Plaintif f has not come with unclean hands and the present proceeding is not a result of mala fide or ulterior motives . The subject Agreement contains the fundamentals of a contract, that is, offer by Defendant No.1, acceptance by Plaintif fs and a consideration, which was/is otherwise not violative of any public policy or unlawful. The proposed shops were also identifiable for which part payment was already paid in terms of the subject agreement, inter alia, as mentioned in the recital and Clause- 1 thereof. Receipts issued by brother / representative of Defendant No.1, have been produced by Plaintif f witness as annexures F/1, F/2 and F/3, though it should have been exhibits, as the above referred representative-W aheed has also appeared as one of the witness es (DW-2) of Defendant No.1. Ultimately , the price of these shops was also communicated to Plaintif f by Defendant No.1, through final Notice dated 06.09.2004, produced in the evidence as undisputed document and marked as Annexure (exhibit) H/1. Case of Agha Sikandar Ali Khan (supra) is relied upon by the learned counsel for Defendant No.1 in support of his plea of Section 29 of the Contract Act, that subject agreement is void as it contains uncertain terms, is not applicable to the facts of the present case, in view of the above discussion. Even in this cited decision, the ingredients of sale price have been elaborated, which, in my considered view, rather lends suppor t to the case of Plaintif f. The relevant portion of the judgment of learned Lahore High Court in Agha Sikandar Ali Khan case is reproduced herein below: "4. While dealing with the necessary completeness of the contract, Fry in his celebrated treatise on Specific Performance (Sixth Edition) observes in paragraph 341 : "The necessary completeness of the contract may be considered in respect of (i) the subject-matter , (ii) the parties to the contract, (iii) the price, and (iv) the other terms." The ingredient of price is dealt with in paragraph 353 as under: - "In all sales it is evident that price is an essential ingredient, and that where this is neither ascertained nor rendered ascertainable, the contract is void for incompleteness, and incapable of enforcement." In paragraph 354 the learned author proceeds to say: "It is not, however , necessary that the contract should in the first instance determine the price. It may either appoint a way in which it is to be determined, or it may stipulate for a fair price. " Again, in paragraph 355 dealing with the same subject, the learned author observes: "where the contract appoints a way of determining the price, the Courts have in some cases deemed that way essential: in other cases they have deemed it non essential, and have treated the contract as essentially one to sell at a fair price. In all cases where the principal subject of the contract is to be valued in a specified manner , the manner has, it is believed, been held essential: the manner has often been held non-essential where it is applied only to an incident to the main subject, as timber to land, fixtures to a house, or plant to a business." [Underlined to add emphasis].
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The reported decision of KMC cited by the Plaintif fs' counsel is relevant to decide the present issue, as in the said reported case the plea of Section 29 of the Contract Act, for declaring the contract as void because of uncertain terms, was repelled and the decision of the Subordinate Courts granting the specific performance was maintained. It is significant to note that in this decision, another defence of appellant KMC that they were using the premises as health office did not weigh with this Court. It would be advantageous to reproduce the applicable portion of the reported decision_ "....Moreover , admittedly the shop was under construction and the agreement must be construed in a reasonable manner and impliedly meant that it would be delivered to the respondent immediately after it was read for occupation. In my opinion the agreement of lease in the present case does not suffer from any infirmity in this respect. In my opinion this is not one of those contracts which is incomplete and not final. The appellants' counsel failed to draw my attention to any provision of the Karachi Municipal Act which makes such contracts dependent on the execution of any formal contract or approval of some other higher authority . In Hillas & Co. Ltd. v. Arcos Ltd. (1932, 147 L T 503 at 514). Lord Wright observed that it is the duty of the Court to construe such documents fairly and broadly , without being too astute or subtle in finding defects. Similarly in New Beerbhoom Coal Co. v. Boloram Mahara (7 I A 107) the Privy Council held that if the price is uncertain on the face of a contract but the mode of ascertaining it is given, then there is no uncertainty in it." Hence, Issues No.5 and 9 are answered in Negative and Affirmative, respectively; both in favour of Plaintif fs, that the subject agreement is not void as envisaged in Section 29 of the Contract Act, because in addition to the above discussion, the Defendant No.1 admittedly received part payment of Rs.7.5 Million from the Plaintif f towards sale of proposed shops, as mentioned in the subject agreement and subsequently admitted by him in his testimony . ISSUES NO.1, 3 and 7. 10. These Issues are pivotal. Issue No.7 will be discussed first. The admitted scenario of the entire controversy is that Plaintif f was running his business in the demised premises and he was offered rupees ten million at that relevant time, way back in the year 2002 when the subject 'mutual agreement' dated 02.04.2004 (Annexure "E", originally produced as Exhibit-P) was executed between the Plaintif f and Defendant No.1. The Defendant No.1 in his cross-examination has admitted that the above amount of Rs.10 Million was offered to the Plaintif f for surrendering his tenancy rights, while further admitting that only Rs.2.5 Million was paid, whereas, Rs.7.5 Million was to be adjusted in the purchase price of the proposed shops . Defendant has produced Muhammad Ajmal, who was the member of the Market Committee of the area as mentioned by him in his examination-in-chief / Affidavit-in-Evidence. This witness (Witness No.3) was examined to corroborate the stance of Defendant No.1 that Plaintif f was not willing to pay the balance sale price and was interested in monetary compensation. In paragraph-5 of his Affidavit-in-Evidence, the said Muhammad Ajmal (witness No.3 of Defendant) has deposed about the above fact and that the Plaintif f permitted Defendant No.1 to sale the proposed shops to another buyer subject to payment of Rs.7.5 Million to Plaintif fs, whereas, the Defendant No.1 was willing to return only Rs.6 Million (Sixty Lacs) but because of his (Muhammad Ajmal' s) intervention, a figure of Rs.6.5 Million was reached as settlement. In his cross- examination, the said witness has admitt ed that price mentioned above was not a market price of the proposed shops nor any agreement was signed by the Plaintif f, while further adding that the Plaintif fs sought time to consult his brother . Though in re-examination, the learned counsel representing the Defendant No.1 attempted to improve the evidence by asking the following question_ "Q. Whether any agreement arrived between the plaintiff and defendant No.1?" to which the said witness No.3 replied as follows_ "Ans. The plaintiff agreed with me." Plaintif f's counsel then suggested the following_ "Q. Have you any authority to enforce the parties to obey your decision?" To the above the said witness replied in negative. 11. Similarly , witness No.2 (Waheed Ahmed), who is brother of Defendant No.1, in his cross-examination, could not justify his deposition as mentioned in his Affidavit-in-Evidence and subsequent examination-in-chief, in which he deposed that in his presence, the Plaintif f admitted that he was not ready and willing to complete the transaction in question and it is the Plaintif f, who committed default as the subject building stood completed, yet the balance sale
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consideration of Rs.104,40,000/- (Rupee s One Crore, Four Lacs and Forty Thousand) approximately Rs.10.5 Million was not paid within time, which resulted in cancellation of the subject mutual agreement; but, in his cross- examination, he was not consistent. He admitted that his role was only confined to the booking of Unit / shop in the subject building and supervising the construction. He has further admitted that construction was delayed. The deposition of above witness is also contrary to the Nazir 's Site Inspection Report , which has been produced in the evidence as Annexure "L" and is available at Page-659 of the evidence file. Since it was not objected to by the Defendants during proceeding, thus, after its production in the evidence, the said Report became an undisputed fact, which is relevant for deciding the controversy involved in the matter . This Nazir 's Report completely belies the stance of witnesses of Defendant No.1 about completion of the subject building. This site inspection Report has been submitted on 06.06.2005 and even at that relevant time, it has been mentioned that the subject building was unoccupied by any party and the renovation work was being carried out, therefore, the evidence of witness No.2 particularly to the extent of unwillingness of Plaintif f to complete the transaction in question and no objection for sale of proposed shops to the other buyers, is not believable. On this particular issue, if the evidence of Plaintif f is examined and particularly the specific and consistent replies of Plaintif f himself as witness, in which he has denied that he has conceded to the cancellation of proposed shops and that it was not in his knowledge that transactio n was under way in favour of some other buyers, is evaluated with the testimony of witnesses of Defendant No.1, then at least to this extent, their evidence (of Defendant No.1) is dis-believable as this particular assertion could not be proved rather disproved by looking at the evidence of defence witness No.3 (the above named Muhammad Ajmal, who was the representative of Market Committee); that no settlement between Plaintif f and Defendant No.1 was reached. Seco ndly, correspondences of Plaintif f dated 03.09.2004 and 08.09.2004 are not disputed by the Defendants' side. In these correspondences, viz. Annexures/Ex hibits "G" and "H/2" respectively , the Plaintif f has complained about delay on the part of Defendant No.1 in handing over the proposed shops to Plaintif f by twenty nine (29) months and in the subsequent correspondence, the claim of Defendant No.1 as mentioned in his final notice of 06.09.2004 (Annexure/Exhibit H/1.), has been refuted. 12. In view of the foregoing discussion, Issue No.7 is answered in Negative and against the present Defendants. 13. After signing the subject agreement (Exhibit- P), in terms of Clauses 2, 3 and 4 where of it was agreed that Defendant No.1 will hand over the possession of the proposed shops within one year, that is, by 2 April, 2003. The first correspondence initiated after this agreement is the afore referred letter from the Plaintif f's side dated 03.09.2004 (Annexure "G"), reminding the Defendant No.1 about his commitment. Surprisingly and interestingly within three days, the latter (Defendant No.1) responded to the said letter of Plaintif f by serving a 'FINAL NOTICE' of 06.09.2004 (Annexure / Exhibit- H/1), fixing the price of Rs.57,000/- per square foot, giving a discount of Rs.5,000/- (Rupees Five Thousand Only) and after adjusting Rs.7.5 Million towards advance/part payment, as agreed in the above mutual agreement, raised a demand of Rs.10.5 Million approximately Rs.1,04,40,000/- (Rupees One Crore Four Lacs Forty Thousand Only) from the Plaintiff towards the total sale price of the proposed shops. This calculation was made for the total area of 345 per square ft. comprising of the proposed shops. More so, it is mentioned in the above FINAL NOTICE, that the rate of Rs. 57,000/ sq. ft. "was mutually agreed". Only three days' time was given for making payment coupled with a penalty clause of 20% as cancellation charges. Within two (02) days from this, the Plaintiff addressed his above referred second correspondence of 08.09.2004 (Exhibit H/2), reiterating his stance and refuting that of Defendant No.1. On the next day, vide correspondence dated 09.09.2004, the Defendant No.1 cancelled the allotment of proposed shops of Plaintiffs after giving another three days' time to clear all dues. This undisputed correspondence has been exhibited as Annexure "I", which is available at page-157 of the evidence file. 14. The main grievance of Plaintif f is that inflated price was quoted by Defendant No.1 and only 03 (three) days' time was given to pay the entire amount, in order to create fait accompli situation for Plaintif f. It has been further deposed by the Plaintif f's witness by placing reliance upon the Sale Deed dated 19.11.2004-Exhibit- N at page-173 of the evidence file, entered into between Defendants No.1 and 2 (Askari Bank Limited) as well as the public notice of Karachi Building Control Authority {KBCA, as it then was, which is now Sindh Building Control Authority-SBCA }-nd
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Exhibit -M at page-171 of the Evidence File, to show that per square foot price was far less than what has been demanded from Plaintif f. Both these documents are obviously undisputed. In the referred Sale Deed (between Defendants No.1 and 2), the price for per square foot has been mentioned as Rs. 25,000/- (Rupees Twenty Five Thousand Only), whereas, in the aforementioned Public Notice of KBCA, the price, inter alia, for space for shop on ground floor is mentioned as Rs.12,000 per square ft., that too as offered by the Defendant No.1. In this regard, the Plaintiff has produced his own calculation in his evidence. Paragraph-18 of the Affidavit-in-Evidence of Plaintiff is very specific about the calculation and the basis of Plaintiff's calculation is the price on which Defendant No.2 has taken the property in question, that is, Rs.25,000/- (Rupees Twenty Five Thousand Only) per square foot on the ground floor. It has been argued by the learned counsel for the Plaintiff that though the competent authority-KBCA has mentioned a far less value for the ground floor, yet to show his bona fide, the Plaintiff has taken the higher value mentioned in the above referred registered Sale Deed. It has been argued that if the agreed Rs.5,000/- (Rupees Five Thousand Only) per square foot discount is made applicable to the rate on which Askari Bank Limited has taken the space, then the total sale price of the proposed shops comes to Rs.6.9 Million; Rs.20,000/- (Rupees Twenty Thousand Only) x 345 square feet (the area which was agreed in the subject agreement for the proposed shops). Admittedly, Rs.7.5 Million was / has been lying with Defendant No.1 towards advance payment and thus as per the Plaintiff's version, the entire sale price has already been paid to Defendant No.1. Significantly, Plaintiff remained consistent in his cross-examination about his above assertion/deposition of sale price. 15. On the other hand, the arguments of learned counsel for Defendant No.1 is that it is a matter of established commercial practice that when a party / purchaser , in the instant case, Defendant No.2 Bank, is purchasing a large area in the subject building, that is, 5050 square feet, then obviously the price per square ft. will be far less than what has been quoted to Plaintif f by Defendant in its earlier correspondences of 06.09.2004 (Exhibit- H/1) and 09.09.2004 (Exhibit- I). 16. The facts of the present case are quite peculiar . It is not a simple sale purchase agreement between the two parties. Admittedly , Plaintif f was running a business in the subject shops and in consideration of the afore-referred mutual/subject agreement, he agreed to handover the possession of the demis ed premises / subject shops to Defendant No.1. Admittedly , Plaintif f closed down his running business in consider ation of the commitments made by Defendant No. l in the form of terms contained in the subject agreement of 02.04.2002. Time frame of one year in Clause 4, is also mentioned for handing over the proposed shops to Plaintif f by Defendant No.1, which was also violated by the Defendant No.1. One should not lose sight of the fact that even Plaintiff also paid a huge amount of Rs.7.5 Million towards sale consideration, as envisaged in the above referred subject agreement. The Defendants' side has no answer to the question that due to the subject agreement, the Defendant No.1 very conveniently avoided the hassle of filing rent proceedings against the Plaintif f. Rather it would not be out of place to mention that Plaintif f was lured into signing the subject agreement in consideration of having the proposed shops for his future business. The other undeniable fact is that within one month of cancellation of the subject agreement, Defendant No.1 swiftly executed a fresh Sale Deed with Defendant No.2. It has been rightly pointed out by the Plaintif f's counsel by referring to one of the clauses of said Sale Deed between Defendants No.1 and 2 (Exhibit- N) that in fact the impugned transaction in question between the Defendants inter se was entered on 26.08.2004 when the Defendant No.2 (Askari Bank Limited) paid an amount of Rs.1 Million towards part payment to Defendant No.1. This has been mentioned in clause 6(i) of the impugned Sale Deed. At that relevant time, the afore-referred subject agreement between the Plaintif f and Defendant No.1 was in the field and admittedly the same was cancelled by the impugned notice of 09.09.2004 (Exhibit-…
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