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Petitioner: SAMAD CHARITABLE TRUST VS Respondent: Syed SABAHAT ALI and others
Court Name: Sindh High Court Judge(s): Anwar Mansoor Khan Title: SAMAD CHARITABLE TRUST vs Syed SABAHAT ALI and others Case No.: Suit No, 848 of 1985 Date of Judgment:2001-02-09 Reported As: 2001 CLC 1930 Result: Suit decreed
JUDGMENT
JUDGMENT Following are the reasons for the short order passed on 9-2-2001. The present suit has been filed by Samad Charitable Trust duly registered under Trusts Act, 1882 with its Chairman as Mr. S.A. Samad against the defendants for specific performance of agreement for sale of immovable property, possession, declaration and permanent injunction. The plaintiffs have prayed for execution of the sale-deed of the said property in the name of the plaintiff and a direction to the defendants to hand over vacant and peaceful possession thereof. The facts that arise from the plaint are that, the plaintiff, a charitable trust created by a Trust Deed, dated 22-4-1967 had entered into an agreement with the defendants for the purchase of their Property bearing No.193, Block-A, S.M.C.H. Society being a double storey building including open plot of land therewith measuring 1044 square yards for a total sale consideration of Rs.24 lacs. It is the case of the plaintiff that in fact, there was no formal written agreement but vide Exh.A/2, a receipt, the property aforementioned was agreed to be sold for the value stated on the face thereof. The vendors had to produce a marketable document of title free from all encumbrances thereon alongwith a no objection certificate of capital gains from the Excise and Taxation Department within the period of three: months. The names of the vendors were categorically mentioned and were signed by one of those vendors, Syed Sabahat Ali, the defendant No.1, on 5-2-1995. The said defendant had claimed himself to be an attorney of the rest of the owners of the property, i.e. defendants Nos.2 to 5. The said person namely Syed Sabahat Ali had claimed to be an attorney on the basis of a power of attorney, dated 27-12-1983, Exh.A/3 which was adjourned after presentation on 27-12-1983 and was taken up and admitted to registration on 26-1-1985. The case, therefore, of the plaintiff is, that the duly appointed attorney namely Syed Sabahat Ali had entered into an agreement for sale of the
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property on behalf of all the other co-owners. 2. It has been argued by the plaintiff that in consideration of having agreed to purchase the property from the defendants, and the defendants through the said attorney Syed Sabahat Ali agreeing to sell the same was paid a sum of Rs.15,000 by a Cheque bearing No.05702329, dated 12- 11-1984 drawn on Habib Bank Ltd., I.I. Chundrigar Road Branch, Karachi. It is upon delivery of the said cheque that on 5-2-1985 the said attorney vide Exh.A/2 issued a receipt, accepting for part payment out of the total sale consideration of Rs.24,00,000 mentioned on the receipt and for the agreement entered into between the defendants and the plaintiff. According to the plaintiff, having entered into an agreement with the defendants, the plaintiffs published a public notice in the daily Dawn and Jang Exh.A/7 and Exh. A/8 on 14-2-1985 stating therein that all the co-owners of the aforesaid property had agreed to sell the said property to the plaintiff through their duly authorised attorney Syed Sabahat Ali, the defendant No.1. The said notice called for claims. The only claim that was received was by S.M.C.H. Society, and the objection of the Society, was that the trust could not become a member of the Society and that, for the purposes of a sale a "No Objection" was required to be obtained from S.M.C.H. Society, by the seller, and which was not obtained. 3. It is stated that after the notice was received from the Society, the plaintiff through its attorney caused a notice to be served upon the defendant No.1, the attorney of the other defendants, stating therein that he and the other co-owners had acquired the said property as an heir of Mst. Mustafai Begum upon her demise and that the transmission of the property has also been duly accepted and recorded in the records of the Society. It was further stated, that per the agreement with the Trust through the Chairman, Mr. S.A. Samad for the sale of the property for Rs.24,00,000 (Rupees twenty-four Iacs only) was entered into and the earnest money was given. The said attorney was duly informed that the agreement was binding which was for the sale of the suit property and earnest money was also given in relation to the same. The said defendant No.1 was also informed of the notice published in the daily Dawn. Thereupon, the said notice categorically spelt out the objection by Mr. Mustafa Lakhani, Advocate on behalf of the society vide his notice, dated 16-2-1995 that the property stood sub-leased in the name of Mst. Mustafal Begum and that the co-allottees could not assign or sell it without prior consent of Sindhi Muslim Cooperative Housing Society. In the said letter, it was also stated that the consent was to be obtained before the transfer of the said property in the name of Samad Charitable Trust failing which the transfer would not be recognized by the Society. In addition, it was categorically stated, by the Society, that the seller was required to surrender his membership in favour of the buyer, and which was a condition precedent for such permission. The said defendant No.1 as attorney was, therefore, called upon to apply to the said Society for the relevant permissions including permission to sell the said property. The said letter was replied by the defendant No.1 that the said defendant No.1 felt strongly that the Trust has committed serious breach of the conditions of sale and had violated the verbal undertaking and assurances given by it as such, it was not possible for the said defendant No.1 to comply with unreasonable and unjustifiable demands of the plaintiff. It was also stated that the amount of Rs.15,000 could be returned to the plaintiff as soon as he was assured that the plaintiff would no longer contemplate involving him in futile litigation. The said letter, dated 16-4-1985 and its reply have been exhibited by the plaintiff as Exh.A/13 and Exh.A/14. It is in view of the refusal to convey the said property on the basis. of the agreement entered into, that the plaintiff filed the present suit. 4. The defendants Nos.2 to 5 filed their written statement stating that the defendants are sub-lease holders of the property in dispute. However, it had been denied in the written statement that defendant No.1 was an attorney duly authorised to deal with the said property. It was categorically stated that the said power of attorney was cancelled/revoked vide Registration No.314, pages 99 to 101, Book No.92 of Book IV Additional dated 29-3-1996. The said deed of revocation Exh.D/2 was signed by the defendants Nos.2 to 5 and was duly registered. In view of the abovestated .fact that,
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the said defendant No.1, according to defendants Nos.2 to 5 not being authorised to enter into negotiation or sale, the entire transaction was denied as void, ab initio. The cheque for earnest money was also denied. It was also stated that the defendant No.1 had no lawful authority on 12-11- 1984 to negotiate or receive the cheque on behalf of defendants Nos.2 to 5. The allegation is that the defendant No.1 was in collusion with the plaintiff and, therefore, the said receipt Exh.A/2 dated 4-2-1985 was prepared for the cheque, dated 12-11-1984. The assertion was that the power of attorney was registered on 26-1-1985 wherefor, there could have been no power of attorney on 12- 11-1984 and, therefore, the receipt of 4-2-1985 in respect of the said cheque dated 12-11-1984 had no basis. The publication by the plaintiff was also denied and it was stated that the said defendants Nos.2 to 5 had never approved any publication or had any knowledge about the transaction. The defendants Nos.2 to 5 have also denied the notice of 16-2-1985 (Exh.A/13) but have not denied the notice, dated 16-2-1985 Exh.A/12 which related to the notice published in the daily Dawn of 14-2- 1985. However, the defendants Nos.2 to 5 denied the factum raised by the society, that the sublease of the said property still stood in the name of the deceased mother of the defendants. By this it categorically implied that the property was transmitted and did stand in the name of the defendants as legal heirs of deceased Mst. Mustafai Begum. 5. The position that was taken up is that Exh.A/2 is only a receipt and not an agreement. According to the defendants the said documents indicates that there was a proposal and nothing was finally decided. It is also asserted that the transaction was to be finalised on the vendors' obtaining and producing marketable documents of 'title free from all encumbrances. Thus, according to the defendants if there was no marketable title the proposed sale could not be finalised. It is, therefore, stated that once an objection was raised by Sindhi Muslim Cooperative Housing Society that the plaintiff being a Trust cannot be a member, the property could not be sold to them. 6. It was stated that defendants Nos.2 to 5 are not subscribers of daily "Dawn" and they had no knowledge of such sale. They were only informed by a letter, dated 30-7- 1986 written by Mr. Azhar Ali Siddiqui, Advocate Exh.D/1 that the case had been filed. 7. It is important to note that the defendant No.1 has not come forth has not filed any written statement nor has he examined himself. 8. The following issues were settled:-- (1)Whether defendants Nos.2 to 5 executed general power of attorney dated 27-2-1983, in favour of defendant No.1? (2)Whether the defendant No.1 entered into the agreement for sale of the property as attorney of defendants Nos.2 to 5? If so, is it binding upon defendants Nos.2 to 5? (3)What should the decree be? 8-A. Evidence was led by the plaintiff and the defendants Nos.2 to 5 before the Commissioner. The plaintiff examined Imtiaz Samad son of the Trustee and Jaffer Ali son of Kasim Ali whereas for the defendants Mst. Bano Rizvi, defendant No.5 who appeared as the only witness. 9. Mr. Tufail Ibrahim stated that it is important to note the various dates on which the transaction took place. He states that the most important date would be the date of the agreement which according to him is the receipt Exh.A/2. According to Mr. Tufail there could be no doubt that the cheque was dated 12-11-1984 as, it is categorically spelt out in the receipt, but similarly it is also clear that the said cheque has been paid as earnest money for the purchase of the Property bearing No.193, Block "A", S.M.C.H. Society, Karachi. According to him the said receipt categorically mentions the name of the owner/allottee/member which are the defendants in this present case. He states that the objection is that the said defendant No.1 was not the attorney of the other defendants namely defendants Nos.2 to 5. He states that the said power of attorney Exh.A/3 has not actually been denied, but what has been stated is that the said power of attorney was revoked by Exh.D/2 dated 27-3-1986. According to him, the defendant No.1 was, therefore, attorney of the
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defendants Nos.2 to 5. When, this point was argued, Mr. Abdul Aziz Khan interrupted and clarified that the power of attorne cannot be deemed to have been a valid document as on 27-12-1983 the date of its presentation at the office of District Registrar, Karachi but will be deemed to have been an attorney on 26-1-1985 which is the date on which the same was admitted to registration. At this, Mr. Tufail stated that no doubt the power of attorney was admitted for registration on 26-1-1985 but the defendants Nos.2 to 5 had executed the document placing their signatures and the said attorney, defendant No.1, had also signed on the same on 27-12-1983. The power of attorney executed on 27-12-1983 was duly witnessed, but was adjourned. Names, addresses and other details of all the executants namely defendants Nos.2 to 5 alongwith their thumb-impressions are there, where it is categorically stated; "admit execution". He says that registration, therefore, was only a formality and that, he shall be deemed to be an attorney on the date of actual signatures and admission of execution of the document. According to him the registration is only for the purposes of the future sale-deed to be executed, where unless the document is duly registered, he shall not be accepted as an attorney in view of the provisions of section 33 of the Registration Act, 1908. According to him the power of attorney is not compulsorily registrable, Execution/admission is sufficient. It was signed before two witnesses and was retained in the office of the Registrar as "adjourned". According to him subsequently the document was registered, and upon registration the,date of the document was the actual date of execution, from which the document shall be deemed to be valid. Notwithstanding this, Mr. Tufail also argues that the receipt is dated 4-2-1985 signed on 5-2-1985. According to him, if these dates are also taken, the power of attorney was duly admitted to registration on 26-1-1985, the receipt will be, therefore, a valid receipt as an attorney on behalf of the other defendants. This receipt has not been denied by the defendant No. 1 . Defendants Nos.2 to 5 have denied the validity of the same and not the execution. The denial is on the basis that in fact the cheque was of 12-11-1984 and negotiations were possibly being conducted from a date prior to that. 10. It is the case of the defendants and as also argued by Mr. Abdul Aziz Khan that the said defendant No.1 had no authority to even negotiate and as he had no power to negotiate, he had no power, therefore, to enter into this arrangement. He has taken me through the evidence of Mst. Bano Rizvi where, it was stated that the defendant No.1 is not on speaking or visiting terms with the other brothers and sisters, the defendants Nos.2 to 5. The affidavit-in-evidence filed by the said Mst. Bano Rizvi, the defendant No.5, states that they had not executed any power of attorney dated 29-2-1983. Mr. Abdul Aziz Khan argues very vehemently that the issue in question is, whether there existed a power of attorney dated 29-2-1983. The denial is that there was no power of attorney on 29-2-1983, as such, such could not be a document that could be acted upon. Mr. Tufail H. Ibrahim has referred to the evidence that has been led by Mst. Bano Rizvi where she has said that the defendants Nos.2, 3 and 5 were old ladies and No.4 was an ailing brother and that the defendant No.1 had suggested. that he would look after the matter relating to the house in the various offices if he is made a general attorney, but he was not to have any power of selling the house. Mr. Tufail states that, therefore, it is evident that the defendants Nos.2 to 5 had agreed to grant the defendant No.1 a general attorney that is now being objected upon and pleaded that it was not to have a power of selling the house. According to him, in evidence, the said defendant No.5 has stated "we were all under the impression that the power of attorney had not been registered and did not exist. We came to know about the registration of the power of attorney around end of March, 1986 when we learned that defendant No.1 had managed the registration of the power of attorney on 26-1-1985 behind the back and without any knowledge of the defendants Nos.2 to 5. 11. Mr. Tufail Ibrahim states that the written statement that had been filed is full of contradictions. One of the contradiction, is that in para. 2 thereof defendants Nos.2 to 5 have stated that they were not aware of the transaction and that subsequently in para. 7 it is stated that they came to know of
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this on 30th July, 1986, whereas they have not denied the contents of para.8 and only said that the copy of notice was not sent to the defendants Nos.2 to 5 by the plaintiff. They have not denied the factum of its being received by the defendant No.1. Additionally he says that in paragraph 5 of the written statement the defendants have stated, "the contents of para.7 of the plaint as stated are denied. It is submitted that the notice, dated 16-2-1985 is not denied. However, it is denied that the Advocate of S.M.C.H. Society in his notice raised the objection that the sub-lease of the said property still stood in the name of the deceased mother of the defendants". He states that Exh.A/12 is the letter of 16-2-1985 which is an objection in response to, the notice Exh.A/7. Naturally when the said document is not denied, they had, therefore, knowledge of that letter itself that there was an advertisement which was published in the daily Dawn. Therefore, they have acknowledged and allowed the transaction to go through and when subsequently, the value of the property had risen the frivolous pleas have been taken up. According to him the defence that was led by the said defendant No.5 is not what has been stated in the written statement but is much beyond that and that, if such is not pleaded, according to him, the defendants cannot be allowed to make out a case for which no foundation had been laid in the pleadings. In this respect, he refers to the case of Noor Muhammad and another v. Muhammad Ishaq and another 2000 M LD 251. 12.Mr. Tufail H. Ibrahim states that the agreement was entered into and the denial now is motivated. The defendant No.1, attorney of defendants Nos.2 to 5 has not filed written statement nor has led evidence. According to him all what has been stated by the defendants, therefore, in the written statement could have only been in the knowledge of the plaintiff and the defendant No.1 and that such has to be accepted as correct, true and is liable to be believed. The assertion, therefore, according to Mr. Tufail H. Ibrahim is that the statement of broker Jaffer Ali cannot be taken into account. Notwithstanding he states that the said Jaffer Ali in his cross-examination only states that the transaction was settled on 12-11-1984. He states that the said broker in his cross- examination no doubt stated that he had not seen the power of attorney in favour of defendant No.1 on 12-11-1984 and that, he had not started any negotiation in respect of the said property with the defendant No.1 before 12-11-1984. He, however, said that he had met the defendant for the first time in January, 1985 and that, before 5-2-1985 he had met the said defendant No.1 twice. According to Mr. Tufail from the evidence it is clear that there was a transaction. The receipt Exh.A/2 was passed on to the plaintiff by the defendant No.1 on 5-2-1985 and that the cheque was given. He states that in view of the above, it is clear that there was an agreement between the plaintiff and the defendant No.1 as attorney of the defendants Nos.2 to 5 and acting on their behalf as such, all the defendants are liable, despite the fact that the power of attorney was subsequently revoked. He relies on the judgment in the case of Syed Humayun Zaidi and 4 others v. Mst. Hussain Afroza 1999 SCM R 2718 where it was held that the general power of attorney on the basis of which the defendant had entered into an agreement of sale with the plaintiff having been revoked subsequent to the execution of the agreement of sale would save the transaction and the principals would be bound by the act of the attorney. He also relies on the judgment in the case of Ahmad Khan v. Settlement Commissioner and others 1975 SCM R 64 and the case of Abdul Majeed and others Muhammad Akram and others 1989 SCM R 1298. 13.The question of registration was also taken up that, it was not compulsory for a power of attorney to be registered in the year 1993 or for that matter in 1995 when the document was admitted to registration. He refers to section 17 of the Registration Act, 1908 and states that by an Ordinance Sindh Ordinance VII of 1996 clause (f) of subsection (1) to section 17 was introduced as follows:-- "(f) Power of attorney when authorising the attorney to sell any immovable property." 14.He states that, therefore, under section 17(1)(f) which states as to all the documents are liable to be registered the power of attorney even if it had the power to sell was not mandatorily
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registrable. He states, therefore, that once the power of attorney has been signed and executed, the attorney would be deemed to have been given powers to act on behalf of the Principals. Thus, the person in whose favour the document had been executed to act on their behalf to the extent of the powers contained in the power of attorney. He has relied on the judgment in the case of Syed Abdul Khader v. Rami Reddy and others AIR 1979 SC 553 where also it was held that the power of attorney is not compulsorily registrable. 15.Mr. Tufail states that the conduct of the parties is also to be seen. The defendant No.1 has chosen not to file the written statement nor come in the witness-box. He states that the said defendant No.1 was staying abroad and despite this the power of attorney was given to him. There could have been no reason for the plaintiff to doubt that there was a dispute in the family and that the power of attorney containing a clause of sale would be a document by which a sale could not be made. He states that the bona fides of the defendants are in doubt. The plaintiffs are always able and willing and are pecunious which is evident from Exh.A/9 wherein funds for the entire amount of sale had been transferred for the purpose of purchasing the said property. 16.Mr. Abdul Aziz Khan, on the other hand, argued that the cheque was issued on 12-11-1984 for Rs.15,000 in the name of defendant No.l. Syed Sabahat Ali and it is the case of the plaintiff that he had never met the defendant No. 1 . It is according to him, therefore, that Mr. S.A. Samad did not examine himself as according to him the truth would have come out. Mr. Abdul Aziz Khan stated that the sale consideration for Rs.2.4 millions could not justify an earnest money in such a meagre amount i.e. Rs.15,000 only. According to him the defendants had been made a target of collusion between the defendant No.1 and the plaintiff. According to him, therefore, by such fraud played on the defendants Nos.2 to 5 the entire transaction would be vitiated as, according to him fraud if played would vitiate even the most solemn promise. Mr. Abdul Aziz Khan has not denied the tactum of issue of receipt. The entire case of Mr. Abdul Aziz Khan is that. it is the brother of the defendants Nos.2 to 5 namely defendant No.1 who did not inform them of the transaction and that, it is he who had in fact, played a fraud on them. According to Mr. Abdul Aziz Khan where it was not the intention of the defendants to give power of sale to the defendant No.1 and if such was utilised or contained in the power such power cannot be utilised and if it is the transaction is vitiated. He relies on the judgment in the case of Board of Intermediate and Secondary Education, Lahore v. Mst. Salma Afroza and 2 others PLD 1992 SC 263(273) and the case of the Chief Settlement Commissioner, Lahore v. Muhammad Fazil Khan and others PLD 1975 SC 331 in which it has been held that a fraud vitiates most solemn proceedings and no party should be allowed to take advantage of his fraud as such, according to him, the plaintiff could not be a beneficiary as a result of the fraud. He stated that the evidence of the broker clearly shows that in fact he is not the person who had brokered the deal but it is the plaintiff who had done so. In the plaint, it is categorically mentioned that the plaintiff has never met the defendant No.1 till after he had received the receipt. According to him the broker has stated that the deal was finalised in November, 1984 and it is this reason that the receipt Exh.A/2 was drawn out. He states that the said broker had not seen the power of attorney and, therefore, there was malice on the part of the broker, the plaintiff and the defendant No.1 and they were in collusion with each other. 17.Mr. Zaki was not present in Court who is representing the defendant No.1 who has neither filed his written statement nor led any evidence. On the basis of the arguments, the facts and the evidence led, I had on that date for reasons to be recorded, decreed the suit. 18.It is clear and evident and it is not denied that there is receipt Exh.A/2. The only allegation is that such is a fraudulent document. It has been signed by the defendant No.1 and such has been not denied. The defendant No.1 has not been examined. The broker also stated that the cheque was delivered on 5-2-1985 and the receipt was issued. It is also an admitted position that there was power of attorney executed on 27-12-1983 and registered on 26-1-1985. In the year 1983 as also
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1985 as argued by Mr. Tufail Ibrahim and correctly so, the…
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