Legal Principle & Question Decided

Ruling Summary: This decision was rendered by the High Court of Sindh, officially reported as 2026 MLD 830. In this matter between Gulzar Ahmed and Muhammad ZamanHonorable Justice Jawad Akbar SarwanaBarrister Muhammad Sarmad Khan and Muhammad Qasim Iqbal,Nayyar Ziauddin, 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.

Full Judgment Text & Judicial Ruling

305

2026 M L D 830 [Sindh] Before Jawad Akbar Sarwana, J Gulzar Ahmed and another---Plaintiffs Versus Muhammad Zaman and another---Defendants Suit No. 248 of 2008, decided on 15th March, 2024. Specific Relief Act (I of 1877)--- ----Ss. 12 & 54---Qanun-e-Shahadat (10 of 1984) Chapter VI---Suit for specific performance of agreement to sell, injunction and recovery of damages---Exclusion of oral evidence by documentary evidence---Plaintiffs claimed to have entered into agreement with defendant to sell suit house, who had already received sale consideration---Validity---Defendant denied that he received any payment, yet at the same time, he contended that plaintiffs were his tenants---Defendant did not produce something in support of his contention---Defendant neither produced copy of any tenancy agreement nor submitted any proof of payment of rent to him---If plaintiffs had defaulted, then the defendant did not file any evidence of either rent recovery or eviction proceedings for default of payment of rent against plaintiffs---Defendant also did not file any action for possession / dispossession against plaintiffs nor any claim for mesne profit against plaintiffs---Defendant did nothing positive in support of his contention that plaintiffs were allegedly his tenants---If plaintiffs were, in fact, his tenants, then he should have deposed some evidence in support of such contention but there was nothing available on the record of Court---Defendant produced his work colleague, to depose that plaintiffs were tenants; that the tenancy agreement was verbal, and that there was no agreement of sale---However, this was not credible evidence given the surrounding facts and circumstances brought on record by plaintiffs evidence---Oral testimony of witness stood nowhere in the background of documentary evidence led by plaintiffs and after production of marginal witnesses---High Court rejected claim of damages raised by plaintiffs who did not provide any evidence to prove their claim for general or special damages---Plaintiffs proved their case and were entitled to relief of specific performance of agreement of sale between plaintiffs and defendant in respect of suit property---Suit was decreed accordingly. Barrister Muhammad Sarmad Khan and Muhammad Qasim Iqbal for Plaintiffs Nos. 1 and 2. Nayyar Ziauddin for Defendant No. 1. Sanaullah Noor Ghouri for Defendant No. 2. Dates of hearing: 4th October, 13th and 16th December, 2023. Judgment Jawad Akbar Sarwana, J.---On 22.01.2008, the Plaintiffs, Gulzar Ahmed son of Nazar Muhammad ( Plaintiff No.1 ) and Muhammad Anar son of Sher Muhammad (Plaintiff No.2)(severally and jointly referred to as the Plaintiffs ) filed the above-titled suit for Specific Performance, Damages and Permanent Injunction against Defendants, Muhammad Zaman son of Muhammad Abdul (Defendant No.1)(hereinafter referred to as MZ ) and Agricultural Development Bank of Pakistan Limited (formerly known as Zarai Tarkiati Bank Ltd. )(Defendant No.2)(hereinafter referred to as either ADBPL or Zarai Tarkiati Bank interchangeably, as the case may be). The Plaintiffs prayed for the following reliefs against MZ and ADBPL: (a) Directing the Defendant No.1 to execute the Sale Deed in respect of house bearing No.1038, Khyber Colony, Orangi Town, Karachi and in case of refusal by him the Nazir of this Hon'ble Court may be appointed for the execution of the Sale Deed in respect of the said house in favour of the Plaintiffs. (b) Directing the Defendant No.1 to pay the amount of Rs.185,000/- which the Plaintiffs have paid to the Defendant No.2 on behalf of Defendant No.1 as bank loan and also pay the damages to the extent of Rs.5,000,000/- (Rupees Fifty Lac only) to both the Plaintiffs. (c) Directing the Defendant No.2 to deposit the original title documents in respect of the said property before the Nazir of this Hon'ble Court on the ground that the entire bank loan has been paid by the Plaintiffs to them. Restraining the Defendant No.2 to hand over the title documents to Defendant No.1. (d) Further restraining the Defendant No.1 to his nominees, agents, attorneys to create third party interest or to dispossess the Plaintiffs from the property in question without due course of law. (e) Restraining the Defendant No.2 to transfer the above said property in the name of any person. (f) Cost of the suit. (g) Any other relief which this Hon'ble Court deem fit and proper under the circumstances of the case. 2. The brief facts of the case are that on 06.06.2003, Plaintiffs, agreed to a sale transaction with Defendant No.1, MZ, in respect of a bungalow on plot bearing No.1038, Sector 4/F, Khyber Colony, Orangi Town, Karachi, ad-measuring 150 sq. yards (hereinafter referred to as the Suit Property ). After the agreement of sale, the Plaintiffs allegedly paid in cash to Defendant No.1/MZ, the entire sale consideration of Rs.450,000 and obtained receipt of the same from the latter. Defendant No.1/MZ denied receipt of the amount towards sale consideration and contended that in December 2002 he had rented out the bungalow to Plaintiff No.1, his tenant, on a monthly rent of Rs.4,000 without any security deposit and formal rental agreement. He claimed that physical possession of the bungalow was handed over to Plaintiff No.1 in the third week of December 2002, whereafter the brother-in-law of Plaintiff No.1, i.e. Plaintiff No.2, moved into the said bungalow. 3. Subsequently, according to the pleadings, Defendant No.1/MZ applied for and obtained a loan of Rs. 200,000 from and mortgaged the Suit Property to Defendant No.2/ADBPL. By 2007, Defendant No.1/MZ had defaulted on the loan, and Defendant No.2/ADBPL initiated proceedings to attach and sell the Suit Property. Plaintiffs claim this is when they discovered that the Suit Property sold to them by Defendant No.1/MZ, had allegedly been mortgaged to the Bank. At the time, Defendant No.1/MZ had apparently paid a sum of Rs.50,000~60,000 to Defendant No.2/ADBPL, and allegedly, a payment of Rs.184,000~Rs.204,000 was outstanding against the former, which the Plaintiffs claimed they had paid to the Bank. 4. On 23.07.2007, the Counsel for Plaintiffs served a legal notice on Defendant No.1/MZ claiming specific performance of the agreement of sale dated 06.06.2003 with a copy to Defendant No.2/ADBPL. The Counsel for Defendant No.1/MZ responded to the said letter, denied the existence of any sale agreement, and sought a copy of the same. 5. On 22.01.2008, Plaintiffs filed the titled suit against Defendants, praying for the reliefs as set out in paragraph 1 above.

6. On 10.03.2008, the High Court passed an ex-parte, ad-interim Order restraining Defendant No.1/MZ from dispossessing the Plaintiffs and directing Defendant No.2/ADBPL to deposit with the Nazir of this Court the original title documents relating to the Suit Property. Eventually, this Court confirmed the said ad-interim Order by its Order dated 18.04.2018. 7. Defendant No. 1/MZ filed his written statement on 29.11.2010. He claimed that the Plaintiffs suit was not maintainable under the law. He contended that there was no sale transaction, and the Plaintiffs were his tenants. He claimed ownership of the Suit Property and that it had been mortgaged with ADBPL and that he had made part-payment of the loan amount to ADBPL when Plaintiffs with malafide paid the entire remaining outstanding loan amount. 8. Defendant No.2/ADBPL filed their Written Statement on 01.08.2008 (earlier in time compared to Defendant No.1/MZ). The bank confirmed the loan of Rs.200,000 availed by the customer, Defendant No.1/MZ and that prior to the bank commencing auction proceedings, the latter had paid a sum of Rs.50,000 only. However, following the notices of auction proceedings, the Plaintiffs on behalf of Defendant No.1/MZ had settled the entire outstanding amount, and the mortgaged property stood redeemed. 9. On 18.04.2018, the Court settled the following issues (as proposed by the Plaintiffs on 24.01.2018): 1) Whether the Plaintiff had entered into agreement of Sale with Defendant No.1 in the year 2003, in respect of house bearing No.1038, Orangi Town, Karachi against total sale consideration of Rs.450,000/- if so its affect? 2) Whether the Plaintiff paid the entire amount of sale consideration to the Defendant No.1, which was duly received by him if so, its affect? 3) Whether after full payment physical peaceful vacant possession of the suit property was handed over to the Plaintiff by both the Defendants, if so, its affect?

4) Whether the terms and conditions of Agreement of Sale are binding upon Defendant No.1, if so, its affect? 5) Whether the Plaintiff taken bank loan from the Defendant No.1 if so, its affect? 6) Whether the Defendant No.1 at the time of agreement of sale disclosed that the property documents were mortgaged by him in the office of Defendant No.2 and loan was sanctioned in favour of Defendant No.1, if so, its affect? 7) Whether the Plaintiff paid entire amount of the bank loan and thereafter the property documents as per order passed by this Court were deposited before Nazir of this Court, if so its affect? 8) Whether the Defendant No.1 played fraud with the Plaintiff if so, its affect? 9) Whether the Plaintiff is entitled to recover the amount of Rs.185,000/- (Bank Loan) paid to Defendant No.1, Plaintiff is entitled to claim damages to the extent of Rs.5,000,000/- if so its affect? 10) What should the decree be? 10. On 08.02.2019, the Court appointed a Commissioner for Recording Evidence. 11. On 20.05.2019, Gulzar Ahmed (Plaintiff No.1) appeared as a witness for himself and as an attorney of Plaintiff No.2. He filed his affidavit-in-evidence and was cross-examined on the same date. He produced a copy of the Sale Agreement dated 06.06.2003, marked as Exhibit P/3 , a copy of the Receipt dated 06.06.2003 marked as Exhibit. P/4 , a copy the legal notice dated 23.07.2007 marked as Exhibit. P/5 , a copy of the reply of the legal notice dated 15.08.2007 marked as Exhibit. P/6 , a copy of the debit cash voucher dated 27.12.2007 marked as Exhibit P/7, and a copy of the payment of Rs.1,000,000/- to ADBPL by the Plaintiffs on 29.11.2007 marked as Exhibit P/8 . 12. Meanwhile, a photocopy of the indenture of lease of Karachi Metropolitan Corporation dated 23.09.1998 was marked as Annexure-X/1 along with challan dated 30.10.1997, the copy of the FIR No.132/2007 and Criminal Case No.1163/2007 of the Court No.IX Civil Judge/Judicial Magistrate was marked as Annexure-X/2 , the copy of the charge sheet No.107/2007 was marked as Annexure-X/3 , the photocopy of the cheque No.1916419 of the National Bank of Pakistan was marked as Annexure-X/4 , the copy of the transfer voucher of Zarai Taraqiati Bank Ltd. dated 19.05.2007 was marked as Annexure-X/5 , the photocopy of the auction notice of Zarai Taraqiati Bank Ltd. marked as Annexure-X/6 , and the copy of the release of documents to Manager dated 08.12.2007 was marked as Annexure-X/7 . 13. Subsequently, the Plaintiffs also produced the two marginal witnesses to the Agreement of Sale dated 06.06.2003, namely, Plaintiffs witness No.2, Muhammad Mubeen ( PW-2 ), who filed his Affidavit in Evidence on 20.05.2019 and was cross-examined by the Counsel of Defendant No. 1 on the even date. Plaintiffs also produced Allah Rakha Babar ( PW-3 ), who filed his Affidavit in Evidence and was cross-examined by the Counsel of Defendant No.1 on 20.05.2019. 14. Defendant No.1/MZ filed his Affidavit in Evidence on 02.08.2019 and was cross-examined by the Counsel of Plaintiffs on the same date. He produced the copy of the Zarai Taraqiati Bank Ltd., Fish Harbour Branch, deposit slips dated 31.12.2004 in the sum of Rs.2,000/- and 30.12.2005 in the sum of Rs.5,000/- marked as Exhibit D/2 , a copy of the order passed in Cr. Case No.1163/2007 dated 04.03.2010 marked as Exhibit D/3 , and the copy of the Examination-in-Chief of Mr. Gulzar Ahmed in suit/case No.1163/2007 marked as Exhibit D/4 . Meanwhile, the photocopy of the Examination-in-Chief in Suit No.1163/2007 was marked as Annexure-X-1 , the photocopy of the deposition of Mr. Muhammad Anar was marked as Annexure-X-2 , and the photocopy of the Examination-in-Chief of Mr. Allah Rakha was marked as Annexure-X-3 . 15. On 06.08.2019, Defendant No.1/MZ also produced his second witness, Muhammad Hassan son of Muhammad Yaqoob Khan ( DW/1 ), who claimed to be an eye-witness to a verbal tenancy agreement between the Plaintiffs and Defendant No.1/MZ in December 2002 and deposed that there was no Agreement of Sale between Plaintiffs and Defendant No.1/MZ in respect of the Suit Property. 16. The evidence of Defendant No.2/ADBPL was not recorded, and on 25.09.2019, the Commissioner for Recording Evidence submitted his Report dated 12.09.2019, returning his Commission to the Court, which was taken on record. Thereafter, the matter was listed for final arguments. 17. The learned Counsel for the Plaintiffs submitted that Plaintiffs had paid the entire sale consideration mentioned in the Agreement of Sale dated 06.06.2003 and completed their part of the bargain. The Plaintiffs also produced marginal witnesses to the Agreement of Sale and the handing over of the possession of the Suit Property by the Defendant No.1/MZ to the Plaintiffs which was not denied except that Defendant No.1/MZ contended that the Plaintiffs were his tenant but did not produce any documentary evidence in support of this defence. He argued that after receiving notice from Defendant No.2/ADBPL by way of the Auction Notice pasted on Suit Property, they paid off the loan advanced by ADBPL to Defendant No.1/MZ which Defendant No. 1/MZ did not deny. He argued that the Agreement of Sate dated 06.06.2003 did not mention the completion date of execution/registration of the sale deed; hence, under Article 113 of the Limitation Act, 1908, the period of limitation for specific performance of a contract was three years from the date fixed for the performance or if no such date is fixed when the Plaintiff has notice that performance is refused. Plaintiffs Counsel argued that no date was fixed in the agreement. Therefore, the period of limitation commenced when Defendant No.1/MZ refused the performance of the contract, and this was in the year 2007. The Plaintiffs were always ready to perform, but Defendant, with mala fide intention, got the property mortgaged to ADBPL. The Plaintiffs claimed that they only found out about the mortgage in 2006 when an auction notice was pasted on the Suit Property, and they approached Defendant No.1/MZ. The Plaintiffs eventually paid off his (Defendant No.1/MZ) loan amount to ADBPL. As such, the suit was filed within time. 18. The Counsel of Defendant No.1/MZ denied the existence of the Agreement of Sale. He claimed that the Plaintiffs were tenants based on a verbal tenancy agreement and that the Plaintiffs manipulated the events such that they were now claiming to have purchased his residence. He argued that even if the Agreement of Sale was to be believed as having been executed on 06.06.2003, the titled Suit filed on 22.01.2008 was already time-barred under Article 113 of the Limitation Act, 1908. 19. I have heard the learned Counsel for the parties, read the material/evidence available on the record, and considered the applicable law, and my findings on the above issues, along with reasons, are as follows: REASONS Issue No. (i) 20. Issue No. (i) requires the Court to determine whether the Plaintiffs had entered into an Agreement of Sale with Defendant No.1/MZ on 06.06.2003 in respect of the Suit Property. The Plaintiffs produced the Agreement of Sale along with the marginal witnesses, Muhammad Mubeen and Allah Rakha Babar, who corroborated the Plaintiffs' claim that they had executed an agreement of sale with Defendant No.1/MZ. Plaintiffs Nos.1 and 2 signed the Agreement of Sale as Vendee and Vendee-1 , respectively. The Plaintiffs also produced the cash receipt of Rs.450,000. Defendant No.1/MZ denied the existence of the Agreement of Sale but did not put any question in his cross-examination, which arguably could shake the Plaintiffs version, in particular as Defendant No. 1/MZ did not deny that the Plaintiffs had possession of the Suit Property, which was surprising if no payment had been made. Further, Defendant No.1/MZ s contention that the Plaintiffs were his tenants was not supported by any contemporaneous evidence. He produced no evidence in support of the receipt of rent or tenancy agreement. 21. Based on the evidence produced by the Plaintiffs, it has come on record that through the Plaintiffs Witness (himself) as a signatory and the two attesting witnesses fulfilling the requirements of Articles 17 and 79 of the Qanun-e-Shahadat Order, 1984 the Plaintiffs and Defendant No.1/MZ entered into an agreement of sale in respect of the sale of the Suit Property on 06.06.2003. The evidence led by the Plaintiffs has gone unchallenged. The Agreement/Payment Receipt of the entire sale consideration mentioned in the Agreement of Sale has also not been dislodged in the cross-examination. Defendant No.1/MZ produced no positive evidence to rebut and controvert the Plaintiffs' contentions. Defendant No.1/MZ denied his signature on the Agreement of Sale but took this defence very casually. After the Plaintiffs had closed its side, and even otherwise, after reviewing the issues settled by the Court, Defendant No.1/MZ s, knew that if he had to prove that he had never signed the Agreement of Sale, the burden was on him to prove his defence. He should have provided evidence in support of this contention, but he did not do so. No expert was called, nor was the examination-in-chief set up to support his contentions in this regard such that without cross-examination by Plaintiffs Counsel, he could take benefit of such default and prove that he did not sign the Agreement of Sale or at least be in a position to argue purposively that there was no Agreement of Sale and get the issue settled by the Court decided in his favor. Yet no such evidence is available on record for me to find that Issue No.1 may be decided in the negative. 22. Finally, even if this Court believed that Defendant No.1/MZ neither signed nor executed the Agreement of Sale, the point of the matter was that there was an agreement by conduct between the Plaintiffs and Defendant No.1/MZ. When Defendant No.1/MZ decided to remain silent and took no action to agitate his right to the property, and did not even bother to send a legal notice to the Plaintiffs claiming his rights and instead remaining indolent, the same arguably constituted an acceptance of status-quo, i.e. he had accepted and conceded that the Suit Property had been sold and he was simply buying time to see how matters could unfold and he may wriggle out of his obligation of performance.. 23. In view of the above, Issue No. (i) is answered in the affirmative and in favour of the Plaintiffs. Issue Nos. (ii) 24. The issue No. (ii) involves the determination by this Court whether the Plaintiffs paid the entire amount of sale consideration of Rs.450,000 to Defendant No.1/MZ, which he duly received. 25. The Plaintiffs, as required under Articles 17 and 79 of the Qanun-e-Shahadat Order, 1984, mandating that in case of financial instruments, the execution of the same ought to be corroborated by two male witnesses produced two marginal witnesses of the Agreement of Sale and the Payment Receipts in support thereof, evidencing full and final payment of Rs.450,000. The learned Counsel for Defendant No.1/MZ did not cross-examine these marginal witnesses, to deny the receipt of the entire sale consideration. Both the witnesses confirmed the payment in cash of Rs.450,000 to Defendant No.1/MZ; thus, issue No.(ii) is answered in the affirmative in favor of the Plaintiffs. Issue Nos. (iii) 26. Issue No.(iii.) involves the determination of whether, after full payment of the sale consideration, Defendant No.1/MZ handed physical peaceful possession of the Suit Property. It is an admitted position that the Plaintiffs have had physical possession of the Suit Property since 2002. This fact is and has not been denied by Defendant No.1/MZ in his evidence. Defendant No.1/MZ claims that the Plaintiffs were handed possession of the Suit Property in December 2002 (albeit as a tenant), whereas, according to Clause 3 of the Agreement of Sale, the physical possession of the Suit Property was handed by Defendant No.1/MZ to the Plaintiffs on 06.06.2003. In either event, physical peaceful possession of the Suit Property of Plaintiffs is not denied. 27. In view of the above, Issue No.(iii.) is answered in the affirmative and decided in favor of the Plaintiffs. Issue No.(iv) Issue Nos. (iv) 28. Issue No.(iv.) requires this Court to determine whether the terms and conditions of the Agreement of Sale are binding upon Defendant No.1 and, if so, its effect. The Defendant No.1/MZ has denied the Agreement of Sale dated 06.06.2003. He claimed that he neither signed nor executed the said agreement. He denied that he received any payment, yet at the same time, he contended that the Plaintiffs were his tenants. If this were true and correct, Defendant No.1/MZ would have produced at least something in support of his contention. He neither produced any copy of the tenancy agreement nor submitted any proof of payment of rent to him, and if the Plaintiffs defaulted, then he did not file any evidence of either rent recovery or eviction proceedings for default of payment of rent against the Plaintiffs, nor did he file any action for possession/ dispossession against the Plaintiffs nor any claim for mesne profit against the Plaintiffs. Instead, he did nothing positive in support of his contention that the Plaintiffs were allegedly his tenants. Indeed, if the Plaintiffs were, in fact, his tenants, then he should have deposed some evidence in support of such contention, but there was nothing available on the record of this Court. Defendant No.1/MZ produced his work colleague, Muhammad Hassan, to depose that the Plaintiffs were tenants, that the tenancy agreement was verbal, and there was no Agreement of Sale. This was hardly credible evidence given the surrounding facts and circumstances which had been brought on record by the Plaintiffs evidence. On the parole evidence rule, the oral testimony of Muhammad Hassan stood nowhere in the background of the documentary evidence led by the Plaintiffs and after the production of the marginal witnesses. The Defendant No.1/MZ plea that the Notary Public was not produced, although material, was neither here nor there, given the available evidence. Thus, based on the evidence brought on record, given the matchup between the evidence of the Agreement of Sale and the verbal tenancy agreement, Defendant No.1/MZ had no case to assert Plaintiffs were his tenants and not vendees.

29. In view of the above, Issue No.(iv.) is decided in the affirmative and in favour of the Plaintiffs. Issue Nos. (v), (vi) and (vii) 30. Issue Nos. (v.), (vi.), and (vii.) all relate to whether Defendant No.1/MZ had taken a bank loan from ADBPL, whether the Suit Property was mortgaged with the bank in connection with the loan at the time of the agreement of sale dated 06.06.2003, whether the Plaintiffs paid any amount of the bank loan; and, whether the title and other property documents of the Suit Property were deposited with the Nazir of this Court. 31. During the cross-examination, Defendant No.1/MZ admitted that: It is correct to suggest that I had taken the loan of Rs.200,000/- and mortgage the property with the bank of the Defendant No.2. It is correct to suggest that I have not informed to the Plaintiff that the suit property is mortgaged with the Defendant No.2 (Bank). It is not in my knowledge that the Plaintiff came to know in the month of April, 2007 that the suit property was mortgaged and leased out. It is correct to suggest that the bank advertised the publication in Jang for attachment of the suit property. It is correct to suggest that the officers of the bank reached at the suit property to attach the property. The aforementioned admissions by Defendant No.1/MZ confirm that Defendant No.1/MZ had taken a bank loan from ADBPL. It was no one s case that the Plaintiffs had taken a loan from Defendant No.1. To this extent Issue No.(v.) was perhaps not framed properly and is reframed by the Court to read: Issue No.(v.) Whether the Defendant No.1/MZ [had] taken bank loan from the Defendant No.2/ADBPL, if so, its affect? It may be mentioned here that paragraph 6 of the Affidavit in Evidence of Defendant No.1/MZ states that: I had obtained the loan from Zarai Tarkiati Bank on 09.09.2003 and mortgaged the said house with bank. I had deposited the 8/9 installments of loan but thereafter I could not pay the installments of loan amount to bank. Although no one stepped into the witness box on behalf of ABDPL, as per the Written Statement filed by…

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