Full Judgment Text & Judicial Ruling

P L D 2018 Islamabad 341 Before Athar Minallah and Miangul Hassan Aurangzeb, JJ Mst. MAROOF BEGUM AHMED and another---Appellant Versus IJAZ-UL-HAQ through Attorney and another---Respondents R.F.A. No.138 of 2014, decided on 11th July, 2018. (a) Specific Relief Act (I of 1877)--- ---S. 12---Limitation Act (IX of 1908), S. 22 & Art. 113---Civil Procedure Code (V of 1908), O.I, Rr. 9 & 10---Suit for specific performance of agreement to sell---Substitution of new defendant---Limitation---Commencement of---Necessary party---Non-joinder of necessary party---Effect---Agreement to sell was executed through attorney and suit was filed against him without impleadment of owner of suit property---Plaintiff during pendency of suit filed an application for impleadment of owner of suit land which was accepted---Trial Court decreed the suit subject to payment of remaining sale consideration within a period of ten days---Contention of defendants was that suit being time barred was liable to be dismissed---Validity---When a wrong defendant was sued and a right defendant was afterwards added or substituted then suit would be deemed to have been instituted when application for impleadment was filed---If a necessary party was not impleaded then suit would be bad for non-joinder---Addition of such a party after the period of limitation would necessitate the dismissal of suit---Owner of a property who executed an agreement to sell her property or on whose behalf such an agreement was executed was a necessary party to a suit for specific performance---Newly added defendant was owner of suit property and was a necessary party---Said defendant should have been made a party to the suit when it was instituted---Plaintiff could not enforce his rights against substituted defendant by suing her attorney only---Plaintiff being dominus litis might choose the persons against whom he wished to litigate---Present suit was filed on 18-02-2003 and owner of suit property was substituted on 11.10.2007---Suit would be deemed to have been instituted on 11.10.2007 when application for impleadment of owner of suit property was moved---Present suit against substituted defendant was barred by time---Court was to decide the question of limitation first and thereafter proceed to decide the matter on merits---Court was bound to notice the question of limitation irrespective of the fact whether it was agitated or not---Time barred suit should be dismissed even if nobody had pointed out such lacuna---If proceedings brought before a Court were barred by time then court could not assume jurisdiction unless delay was condoned---Relief of specific performance to which plaintiff claimed to be entitled was subject to law of limitation---Vested rights had been created in favour of newly added defendant due to the expiry of limitation period for filing of a suit for specific performance---Three years limitation period had been provided for such suit---Agreement to sell in the present case was executed on 18.12.2002 and parties had fixed 18.03.2003 as the date for its performance---Limitation period for filing of a suit for specific performance of said agreement would come to an end on 18.02.2006---Plaintiff had filed an application for impleadment of owner of suit property/vendor as a party to the suit on 11.10.2007---Suit against the said defendant was time-barred---Nothing was on record that plaintiff was in a position to pay the entire balance sale consideration for the suit property on 18.03.2003---Plaintiff even before institution of suit did not issue any notice to the defendants requiring them to perform their obligation under the alleged agreement to sell---Plaintiff was not bona fide in filing the present suit and was not entitled for discretionary relief of specific performance---Impugned judgment and decree passed by the Trial Court were set aside---Plaintiff had paid an earnest sale price of suit land to the defendant on 18.12.2002---Defendant had not issued any notice to the plaintiff requiring to pay the balance sale consideration by 18-03-2003 or to put him on notice that the failure in payment of the balance sale consideration by the said date would result in the forfeiture of earnest money---Value of real estate had increased many folds---Defendant was to compensate the plaintiff by paying an amount equal to the prevalent value of quantity of gold which could be purchased with the said earnest money on 18-12-2002---Appeal was allowed accordingly. Hayat v. Amir PLD 1982 SC 167; Waseem Haroon v. Abdul Shakoor Tabbani 2006 MLD 605; Muhammad Sami v. Additional District Judge, Sargodha 2007 SCMR 621; Commissioner of Income Tax, Companies Zone IV, Karachi v. Kakim Ali Zardari 2006 SCMR 170; Haji Ghulam Rasul v. Government of the Punjab 2003 SCMR 1815; Hakim Muhammad Buta v. Habib Ahmad PLD 1985 SC 153; Fazal Muhammad v. Nabi Bakhsh 1969 SCMR 531; Ahsan Ali v. District Judge PLD 1969 SC 167; Muhammad Khan v. Abdul Khaliq Khan PLD 1981 SC 153; Chand Oil Mils v. Muhammaad Zakria and Co. PLD 1958 (W.P.) Kar. 510; Shahnawaz Shah v. Younis-ur-Rehman 2002 CLC 418; Muhammad Aslam v. Muhammad Haq 2002 CLC 1875; Dilawar Ali Khan v. Zohra Javaid 1997 CLC 152; National Insurance Corporation v. Kuwait National Petroleum Co. 1988 MLD 1024 and Haji Zahoor-ud-Din v. Khalid Latif (2016 MLD 1623 rel. (b) Civil Procedure Code (V of 1908)--- ----O. I, R. 10---'Necessary party'---Scope---Owner of suit property, agreement to sell having been executed on her behalf, was a necessary party, as regards the suit for specific performance. (c) Specific Relief Act (I of 1877)--- ----S. 12---Limitation Act (IX of 1908), Art. 113---Suit for specific performance of contract---Limitation, commencement of---Three years limitation period had been provided for a suit for specific performance of an agreement---Said limitation period was to commence from the date fixed for the performance of agreement or if no date was fixed then from the date when plaintiff had noticed that performance was refused. (d) Limitation--- ----Court was to decide the question of limitation first and thereafter proceed to decide the matter on merits---Court was bound to notice the question of limitation irrespective of the fact whether it was agitated or not---Time-barred suit was to be dismissed even if nobody had pointed out such lacuna---If proceedings brought before a Court were barred by time then court could not assume jurisdiction unless delay was condoned. (e) Power-of-attorney--- ----Attorney could not be held to be personally liable for the principal's debts unless there was specific provision to that effect in the power of attorney. Zulfiqar Ali Abbasi, Usama Malik and Shahid Munir for Appellants. Ch. Mushtaq Hussain for Respondent No.1. Date of hearing: 17th April, 2018. JUDGMENT MIANGUL HASSAN AURANGZEB, J.---Through the instant regular first appeal, Begum Maroof Ahmad (appellant No.1) and her daughter, Zahida Perveen Ahmad (appellant No.2), impugn the judgment and decree dated 29.11.2014, passed by the Court of the learned Civil Judge, Islamabad, whereby the suit for specific performance and permanent injunction instituted by ljaz-ul-Haq (respondent No.1), was decreed. In the said suit, respondent No.1 had prayed for a decree for specific performance of agreement to sell dated 18.12.2002 regarding industrial plot No.88 (along with the building constructed thereon) measuring 2,444.41 square yards, Industrial Area, 1-9, Islamabad ("the suit property"). Furthermore, respondent No.1 had prayed for the grant of Permanent injunction restraining the appellants from transferring/ alienating the suit property. 2. The facts essential for the disposal of this appeal are that vide transfer letter dated 02.01.1998 (Exh.D/2) issued by the Capital Development Authority ("C.D.A."), the suit property was transferred to appellant No.2. On 18.12.2002, appellant No.2 through her general attorney, appellant No.1, executed an agreement to sell (Exh.P/3) the suit property to respondent No.1 for a total sale consideration of Rs.71,00,000/-. Respondent No.1 had paid Rs.2,50,000/- as earnest money, whereas Rs.68,50,000/- had to be paid on or before 18.03.2003 "subject to the registration/completion of transfer documents of the said plot by the Seller in favour of Purchaser". Under the terms of the said agreement to sell, the seller was responsible to get the suit property transferred in the purchaser's favour at the time of the final payment. Physical possession of the suit property was to be handed over by the seller to the purchaser at the time of the final payment and the execution of the documents for the transfer of the said property. Furthermore, it was agreed that if the seller backed out from the deal she would have to pay double the amount of the earnest money received by her; and if the purchaser backed out, the seller would forfeit the earnest money and the agreement would be treated as cancelled. 3. It is an admitted position that the suit property was not transferred by appellant No.2 in respondent No.1's favour. The position taken by appellant No.2 was that respondent No.1 did not come up with the balance sale consideration within the period stipulated in the said agreement to sell (i.e., by 18.03.2003), whereas respondent No.1's position was that appellant No.2 did not obtain the necessary documents, especially the completion certificate, for the transfer of the suit property in respondent No.1's favour by the said date. 4. After disputes and differences developed between the parties to the said agreement to sell, respondent No.2, on 15.09.2003 instituted a suit for specific performance of the said agreement before the learned Civil Court. Vide order dated 15.09.2003, the learned Civil Court directed summons to be issued to the defendants in the said suit. Furthermore, respondent No.1 was directed to deposit in the Court Rs.10,00,000/- by the next date of hearing i.e., 27.09.2003. It is an admitted position that the said amount was deposited by respondent No.1's special attorney, Tasawar Hussain, on 29.09.2003 (i.e., with the delay of two days). Along with the said suit, respondent No.1 had also filed an application for interim injunction. Vide order dated 24.01.2004, the learned Civil Court allowed the said application subject to the payment of the remaining sale consideration within a period of ten days i.e., by 03.02.2004. Admittedly, an amount of Rs.58,50,000/- was deposited by Tasawar Hussain on 07.02.2004 through pay order dated 30.01.2004 drawn on Muslim Commercial Bank. 5. Appellant No.1 was impleaded as defendant No.1, whereas the Capital Development Authority ("C.D.A.") was impleaded as defendant No.2 in the said suit. It was not until 11.10.2007 when respondent No.1 filed an application under Order I, Rule 10, C.P.C. for appellant No.2's impleadment as a defendant in the said suit. In the said application, it has been pleaded inter-alia that respondent No.1 wants to implead appellant No.2 as a party so that no technical deficiency ( ) remains for deciding the said suit on merits. Vide order dated 25.10.2007, the said application was allowed by the learned Civil Court with the consent of the learned counsel for appellant No.1. On 30.10.2007, respondent No.1 filed an amended plaint, whereafter notices were directed to be issued to the newly impleaded defendant i.e., appellant No.2. On 24.11.2007, appellant No.2's counsel filed a memo of appearance before the learned Civil Court. As per the contents of the said memo of appearance, appellant No.2 resided in England and required some time to submit a duly attested power of attorney. 6. Since appellant No.2 did not file a written statement despite being given three opportunities to do so, the learned Civil Court vide order dated 15.01.2008 struck off appellant No.2's defence and decided to proceed ex-parte against her. Appellant No.1 had contested the said suit by filing a written statement. From the divergent pleadings of the contesting parties, on 24.01.2004, the learned Civil Court framed the following issues:- "1) Whether the plaintiff is entitled to the decree for specific performance of the contract, as prayed in the plaint? OPP 2) Whether the plaintiff is entitled to decree for permanent injunction, as prayed in the plaint? OPP 3) Whether the suit is not maintainable under the law? OPD 4) Whether the plaintiff has no cause of action or locus standi, hence suit is liable to be rejected under Order VII, Rule 11 C.P.C.? OPD 5) Whether the plaintiff has not paid the remaining sale price according to the agreement to sell, if so, its effects? OPD 6) Whether the suit is false, frivolous and defendant is entitled for special costs under section 35-A C.P.C.? OPD 7) Whether the plaintiff has not come to the court with clean hands? OPD 8) Relief" 7. Respondent No.1's special attorney, Tasawar Hussain, gave evidence as PW-2, whereas Abdur Rauf, Upper Division Clerk in the Estate Management Directorate of the C.D.A., as PW-3. The agreement to sell dated 18.12.2002 was produced as Exh.P/3; the special power of attorney dated 04.09.2003 as Exh.P/2; and receipts for payment of Rs.10,00,000/- and Rs.58,50,000/- as Exh.P/4 and Exh.P/5, respectively. PW-3 produced the completion certificate dated 31.10.2003 as Exh.P/6. Appellant No.1's special attorney, Attiq-ur-Rehman, appeared as DW-1 and produced the special power of attorney dated 15.05.2014 as Exh.D/2. The learned counsel for respondent No.2/C.D.A. produced transfer letter dated 02.01.1998 as Exh.D/2; clearance certificate dated 12-03-2003 as Exh.D/3; power of attorney as Exh.D/4; and C.D.A. is acceptance letter dated 19.04.2003 as Exh.D/5. 8. Vide judgment and decree dated 29.11.2014, the learned Civil Court decreed the suit. The said judgment and decree has been assailed by the appellants in the instant appeal filed through their special attorney, Attiq-ur-Rehman. CONTENTIONS OF THE LEARNED COUNSEL FOR THE APPELLANTS: 9. Messrs Osama Malik and Zulfiqar Ali Abbasi, learned counsel for the appellants after narrating the facts leading to the filing of the instant appeal, submitted that since the learned Civil Court vide order dated 25.10.2007 allowed respondent No.1's application dated 11.10.2007 for appellant No.2's impleadment as a defendant in the suit for specific performance, the said suit was liable to be dismissed as time-barred; that initially when the suit was filed, appellant No.2 was not impleaded as a defendant therein; that the owner of the suit property was appellant No.2, and not appellant No.1; that the said suit as against appellant No.1, who was appellant No.2's general attorney, was not competent since appellant No.1 was neither the owner nor the seller of the suit property; that in terms of Section 22 of the Limitation Act, 1908, the said suit is to be considered as instituted against appellant No.2 with effect from the date when she was impleaded as a party; that since the amended plaint was filed on 30.10.2007, the suit is to be considered as having been instituted against appellant No.2 on the said date; that Article 113 of the Schedule to the Limitation Act, 1908 provides a limitation period of three years for a suit for specific performance of an agreement to sell; and that even if it is assumed that the cause of action accrued to respondent No.1 on the date when the suit was filed (i.e., on 15.09.2003), the suit to the extent as against appellant No.2 was barred by 13 months. 10. Learned counsel for the appellants further submitted that appellant No.2 was ready, willing and able to perform her part of the bargain under the agreement to sell, but respondent No.1 was not able to come up with the remaining sale consideration within the period stipulated in the said agreement (i.e., by 18.03.2003); that appellant No.2 had taken all the steps necessary for the transfer of the suit property in accordance with the terms of the said agreement to sell; that the building on the suit property was completed on 01.05.1988; that letter dated 01.05.1988 (Exh. D/2) from the Estate Management Directorate of C.D.A. shows that the notice of completion was issued by the C.D.A.; that letter dated 12.03.2003 (Exh.D/1) from the Estate Management Directorate of C.D.A. shows that appellant No.2 had paid all the outstanding dues for the issuance of the completion certificate; that time was of the essence as regards the said agreement to sell, which clearly provided that if the purchaser fails to pay the remaining sale consideration, the earnest money would be forfeited and the agreement would be treated as cancelled; that respondent No.1 was a property dealer, and tried to re-sell the suit property within the time period agreed for the performance of the said agreement to sell; and that on account of respondent No.1's inability to pay the remaining sale consideration by 18.03.2003, the said agreement to sell stood cancelled and the earnest money forfeited. 11. Furthermore, it was submitted that respondent No.1 never appeared before the learned Civil Court to give evidence; that evidence on behalf of respondent No.1 was given by his special attorney, Tasawar Hussain, who appeared as PW.2; that Tasawar Hussain was not present when the agreement to sell dated 18.12.2002 was executed; that the special power of attorney was executed by respondent No.1 in favour of Tasawar Hussain on 04.09.2003 i.e., about a week before the institution of the suit for specific performance, etc.; that PW.3 in his examination-in chief produced the completion certificate dated 31.10.2003 as Exh.P/6; that Atiq-ur-Rehman, who was appellant No.1's special attorney, gave evidence as DW.1 and in his examination-in-chief he deposed inter-alia that after obtaining the completion certificate from the C.D.A. on 12.03.2003, respondent No.1 was contacted and repeatedly asked to pay the balance sale consideration for the transfer of the suit property, but respondent No.1 did not pay the same by 18.03.2003; that DW.1 was not cross-examined on the said portion of his examination-in-chief; and that respondent No.1's bona fides are lacking and is therefore, not entitled to the discretionary relief of specific performance. Learned counsel for the appellants prayed for the appeal to be allowed and for the suit to be dismissed. CONTENTIONS OF THE LEARNED COUNSEL FOR RESPONDENT NO.1: 12. On the other hand, Chaudhary Mushtaq Hussain, Advocate, learned counsel for respondent No.1, submitted that the agreement to sell was executed by appellant No.2 through her special attorney, appellant No.1; that appellant No.2, being appellant No.1's daughter, was well aware about the institution of the suit; that time was not the essence of the agreement; that the payment of the balance sale consideration of Rs.68,50,000/- was conditional on the completion of the transfer documents; that a completion certificate was essential for the transfer of the suit property in the C.D.A. records; that the completion certificate (Exh.P/6) with respect to the suit property was issued by the C.D.A. on 31.10.2003 i.e., several months after the agreed date by which the suit property was to be transferred; that Exh.P/3 was produced by Abdur Rauf, Upper Division Clerk in the Estate Management Directorate of the C.D.A.; that the mere fact that the completion certificate was not issued prior to 18.03.2003 shows that the appellants were not in a position to transfer the suit property to respondent No.1 by the said date; that letter dated 12.03.2003 (Exh.D/1) from the Estate Management Directorate of C.D.A. is not a completion certificate, and is not even addressed to the appellants; and that respondent No.1 was ready, willing and able to perform his part of the obligations under the said agreement to sell but the appellants failed to obtain the completion certificate without which the suit property could not be transferred. 13. Furthermore, it was submitted that the plea taken by appellant No.1 in her written statement was that she had already cancelled the agreement to sell dated 18.12.2002 and that the earnest money had already been forfeited; that the appellants did not file any suit for the cancellation of the agreement to sell at any stage; that in compliance with the order dated 15.09.2003, an amount of Rs.10,00,000/- was deposited on 27.09.2003; that the said amount had been deposited through a pay order; that on 25.09.2003, the learned Civil Court had granted respondent No.1 permission to deposit the said amount through a pay order; and that respondent No.1 had not committed any default in showing compliance with orders of the learned Civil Court for the deposit of any amount in the Court. 14. Learned counsel for respondent No.1 further submitted that respondent No.1 had filed an application for appellant No.2's impleadment as a party to the suit on 11.10.2007; that vide order dated 25.10.2007, the said application was allowed with the consent of appellant No.1; that even after her impleadment as a party to the suit, appellant No.2, did not appear in the learned Civil Court; that Order Ill C.P.C. permits the filing of a suit for specific performance against an attorney of the owner/seller; that it is well settled that a principal can do all that an attorney can do; that the principal can also be served through an attorney; that the suit instituted by respondent No.1 on 15.09.2003 was in fact against appellant No.2; that since appellant No.1 was appellant No.2's attorney, limitation would not run separately against appellant No.2; that at no material stage was any notice given by the appellants to respondent No.1 for the performance of the agreement to sell; and that the impugned judgment and decree is strictly in accordance with the law and facts of the case, and does not suffer from any legal infirmity. Learned counsel for respondent No.1 prayed for the appeal to be dismissed. 15. We have heard the contentions of the learned counsel for the contesting parties and have perused the record with their able assistance. 16. The facts leading to the filing of the instant appeal are set out in sufficient detail in paragraphs 2 to 8 above and need not to be recapitulated. 17. We first propose to decide the question as to whether the suit for specific performance of the agreement to sell dated 18.02.2003 instituted by respondent No.1 was barred by limitation as against Appellant No.2. The owner of the suit property was appellant No.2. The said agreement to sell was signed by Appellant No.1 as appellant No.2's attorney. When the said suit was instituted on 15.09.2003, appellant No.2 had not been made a party to the suit. An application for appellant No.2's impleadment was filed on 11.10.2007, which was allowed by the learned Civil Court vide order dated 25.10.2007. Now, Section 22 of the Limitation Act, 1908 provides that where, after the institution of the suit, a new plaintiff or defendant is substituted or added, the suit shall, as regards him, be deemed to have been instituted when he was so made a party. For the purposes of clarity, the said Section is reproduced hereinbelow:- "Effect of substitution or adding new plaintiff or defendant: (1) where, after the institution of suit, a new plaintiff or defendant is substituted or added, the suit shall, as regards him be deemed to have been instituted when he was so made a party. (2) Nothing in subsection (1) shall apply to a case where a party is added or substituted owing to an assignment or devolution of any interest during the pendency of suit or where a plaintiff is made a defendant or a defendant is made a plaintiff." 18. It is quite clear from the wording of Section 22 of the Limitation Act, 1908 that when a wrong defendant is sued, and a right defendant is afterwards added or substituted, the suit must be regarded as instituted as on the date of such addition or substitution. If a necessary party is not impleaded, the suit is bad for non-joinder and the addition of such a party after the period of limitation will necessitate the dismissal of the suit. It goes without saying that the owner of a property who executes an agreement to sell his property or on whose behalf such an agreement is executed by an attorney, is a necessary party to a suit for specific performance of the agreement. 19. Since appellant No.2 was the owner of the suit property, and the said agreement to sell had been executed on her behalf, she was most certainly a necessary party as regards the suit for specific performance instituted by respondent No.1. Appellant No.2 was a party necessary for the constitution of the suit i.e., a party in whose absence no effective decree for specific performance could be passed. It is not disputed that appellant No.2's interest was likely to be affected by the suit. Appellant No.2 being the owner of the suit property should have been made a party to the suit for specific performance when it was instituted on 15.09.2003. 20. Respondent No.1,…

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