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Petitioner: Malik MUHAMMAD Y kSEEN VS Respondent: Syed RAZA HYDER
Court Name: Sindh High Court Judge(s): Nadeem Akhtar Title: Malik MUHAMMAD Y kSEEN vs Syed RAZA HYDER Case No.: IInd Civil Appeal No.9 of 2008 Date of Judgment:2013-04-17 Reported As: 2014 YLR 1927 Result: Appeal accepted
JUDGMENT
JUDGMENT ' NADEEM AKHTAR, J.---The appellant filed F.C. Suit No.352/2004 against the respondent for specific performance of contract, possession, and injunction, which was decreed as prayed by the appellant vide judgment delivered on 27-1-2006 by the 1st Senior Civil Judge, Nawabshah. Against the said judgment and decree, the respondent filed Civil Appeal No.27 of 2006, which has been allowed by the 1st Additional District Judge, Nawabshah, through the impugned judgment delivered and the decree passed / signed on 4-8-2008. Being aggrieved with the impugned judgment and decree of the lower appellate court, the appellant has preferred this second appeal. 2. Briefly stated, the facts of this case are that the parties entered into an agreement for sale dated 11-11-2003 (the Agreement), whereby the respondent agreed to sell to the appellant his Shop bearing Survey No.1072/1, measuring 37-3 sq. Yds., situated in Ward B., Market Road No.1, Nawabshah, (the suit property), and the appellant agreed to purchase the same from the respondent. The sale consideration was agreed at Rs.1,150,000.00. The appellant paid a sum of Rs.350,000.00 to the respondent as part payment, out of which Rs.300,000.00 was paid at the time of the agreement and Rs.50,000.00 was paid subsequently at the request of the respondent. The sale was to be concluded by 20-11-2004, when the appellant was required to pay the balance sale consideration of Rs.800,000.00 to the respondent, and the respondent was required to execute the sale deed in respect of the suit property in favour of the appellant and also to hand over to him the vacant and peaceful possession thereof. The execution of the Agreement, the amount of sale consideration, the part payment of Rs.350,000.00 by the appellant, and the date of completing the sale, are not disputed.
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3. It was the case of the appellant before the trial court that, by making the part payment of Rs.350,000.00 to the respondent at the time of the Agreement, he performed his initial part of the contract. It was averred by the appellant that he was always ready and willing to perform his remaining part of the contract, and for this purpose, he requested the respondent a number of times to accept from him the balance sale consideration of Rs.800,000.00 and to complete the sale in his favour on or before 20-11-2004. It was also the case of the appellant that the respondent was required to obtain such documents and certificates that were required for transferring the marketable title of the suit property in his favour, but the respondent failed to obtain the same within time. The appellant sent a legal notice dated 28-10-2004 to the respondent calling upon him to complete the sale in his favour, but the respondent did not respond to the same. It was alleged by the appellant that the respondent finally refused to complete the sale in his favour and informed him that he will sell the suit property to a third party. In the above background, She appellant filed F.C. Suit No.352 of 2004 against the respondent for specific performance of contract, possession, and injunction. 4. In his written statement, the respondent admitted the execution of the Agreement, the amount of sale consideration, the part payment of Rs.350,000.00 by the appellant and the date of completing the sale. It was, however, denied by the respondent that the appellant had been ready and willing to pay the balance sale consideration to him on 20-11-2004. It was alleged by the respondent that the appellant failed to pay the balance sale consideration to him despite his requests. It was averred by the respondent that the documents required for execution of the sale deed were obtained by him before 20-11-2004, and as per his commitment, he went to the office of the Sub- Registrar concerned on 20-11-2004 and waited there for the appellant, but the appellant failed to appear there. It was further alleged by the respondent that the breach of the Agreement was committed by the appellant and not by him, therefore, the Agreement was cancelled by him and the part payment made by the appellant was also forfeited by him. The respondent prayed for the dismissal of the Suit. 5. The trial court framed the following six issues on the basis of the pleadings of the parties:-- "(1) Whether suit is not maintainable ? (2) Whether plaintiff have (!) no cause of action ? (3) Whether the plaintiff has committed violation of terms and conditions of the sale agreement dated 11-11-2003, rendering the same liable to cancellation ? (4) Whether the defendant No.4 is liable to specifically perform the sale agreement dated 11-11- 2003 ? (5) Whether the plaintiff is entitled to the relief sought for ? (6) What should the decree be ? " 6. The parties led their respective evidence. The appellant examined himself and produced a number of documents in support of his claim. The respondent also produced a number of documents, and examined himself as well as two other witnesses; namely, Tahir Ahmed and Ghulam Farid, who were working with him as his colleagues at the General Post Office (GPO) at the relevant time. After examining the evidence produced by the parties and after hearing them, the suit filed by the appellant was decreed as prayed by him vide judgment delivered on 27-1-2006 by the trial court. The respondent filed Civil Appeal No.27 of 2006 against the judgment and decree passed by the trial court, which has been allowed by the lower appellate court through the impugned judgment and decree. Since both the courts below have given conflicting findings and I have two divergent views before me, it has become necessary for me to minutely examine and evaluate the evidence that resulted into completely opposite and contrary findings. 7. In his examination-in-chief, the appellant / plaintiff reiterated the contents of the plaint. He stated that he approached the respondent two months prior to the date of completion of the sale
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and requested him to receive the balance payment, but the reply of the respondent was evasive. Therefore, he sent a legal notice dated 28-10-2004 to the respondent through registered post A.D., calling upon him to complete the sale within time. In addition to the original Agreement, the appellant produced a copy of the legal notice, and the originals of the postal A.D. Receipt and a certificate from the post office concerned. The appellant further stated that the respondent did not acknowledge his legal notice, nor did he receive the balance payment offered by the appellant. He also stated that, as the respondent had refused to complete the sale in his favour and had shown his intention of selling the suit property to a third party, he filed the Suit on 18-11-2008, that is two days prior to the date of completion of the sale, in order to safeguard his vested rights and interest in the suit property. He specifically stated that he did not commit breach of the Agreement, and that he had always been ready and willing to perform his part of the contract. 8. In his cross examination, the appellant admitted that he did not go to the Sub-Registrar's office on 20-11-2004, but voluntarily said that he approached the respondent two months prior to the agreed date of completion of the sale, when he demanded from the respondent the documents required for completing the sale and informed the respondent that he was ready to perform his part of the contract by paying the balance amount. It was further stated by the appellant that he visited the respondent four times with the same demand and request, and the last meeting was held on 16-11-2004 when the respondent promised to execute the sale deed within three to four days; despite promise, the respondent not only failed in delivering the requisite documents to him, but he also started negotiations for the sale of the property to a third party ; and the balance payment was arranged by him ten days prior to the agreed date for completing the sale. The appellant specifically denied the suggestions put to him by the respondents counsel that the respondent was ready to perform his part of the contract till the agreed date for completing the sale; the respondent had obtained the requisite document ; he (the appellant) had failed to arrange the balance payment till the agreed date for completing the sale, or no legal notice was issued by him to the respondent; and he (the appellant) infringed the terms and conditions of the Agreement. 9. In his examination-in-chief, the respondent admitted the Agreement, the terms and conditions thereof, and that he received the part payment of Rs.350,000.00 from the appellant. He also admitted that on 16-11-2004, when the appellant visited him at the GPO, he informed the appellant that he will execute the sale-deed for which the stamp paper should be purchased by the appellant. It was stated by the respondent that the time mentioned in the Agreement was of the essence of the contract ; he was entitled to receive the balance sale consideration on 20-11-2004, which was the "final date" for execution of the sale-deed in favour of the appellant ; the balance sale consideration was not received by him on 20-11-2004 ; he was liable to execute the sale-deed in favour of the appellant and to deliver possession of the property to him only after receiving the balance sale consideration ; there was a penalty clause in the Agreement that provided for cancellation of the Agreement and forfeiture of the appellant's part payment in case of failure on the part of the appellant in paying the balance amount on the agreed date ; there was no breach on his part ; he had obtained the requisite document for completing the sale; he asked the appellant to come to the Sub-Registrars office on the "due date" with the balance amount, and informed him that the keys of the property would be handed over by him to the appellant; he took leave from his office and went to the Sub-Registrar's office with two witnesses for execution of the sale-deed and waited there from 11:00 am to 4:00 p.m., but the appellant did not turn up ; he neither refused to execute the sale-deed, nor was he trying to sell the property to a third party ; and he was not bound to execute the sale-deed in favour of the appellant. 10. In his cross examination, the respondent once again admitted the Agreement and the part payment of Rs.350,000.00 made by the appellant to him. It was also admitted in his cross
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examination by the respondent that he did not give any written notice to the appellant to perform his agreed part of the contract; and he did not produce his "short leave application" and the "short leave order" for the leave taken by him on 20-11-2004 for going to the Sub-Registrar's office. The respondent denied the *suggestions put to him by the appellants counsel that the balance sale consideration was offered to him by the appellant from time to time, or the appellant approached him to execute the sale-deed, or he avoided to execute the same ; a legal notice was issued to him by the appellant calling upon him to receive the balance amount and to execute the sale-deed ; the appellant visited him on 17-11-2004 when he was requested by the appellant to complete the sale, but he refused; he did not take leave on 20-11-2004, or he and his colleagues/ witnesses did not go to the Sub-Registrars office on that date; the appellant did not violate the terms and conditions of the Agreement; and he (the respondent) refused to perform his agreed part of the contract. 11. The other two witnesses produced by the respondent were Tahir Ahmed and Ghulam Fareed, who were working with him as his colleagues at the GPO at the relevant time. In their examination- in-chief, both these witnesses admitted that the appellant visited the respondent at the GPO in their presence on 16-11-2004, and asked the respondent to execute the sale-deed, and further that the respondent asked the appellant to bring the balance amount on 20-11-2004 at the time of execution of the sale-deed. These witnesses stated that they went to the Sub-Registrar's office on 20-11-2004 with the respondent at about 12:00 noon for execution of the sale-deed ; they waited there for the appellant, but the latter did not appear. Tahir Ahmed stated that they waited for "half an hour and 2 an hour" (!), and Ghulam Farid stated that they waited for "about 1 and half hours". In his cross examination, Tahir Ahmed admitted that he could not leave his office without prior permission and leave, and that he did not produce the proof of his short leave. Both the witnesses admitted that they were not summoned by the court. It was admitted by Ghulam Farid that he came to give evidence at the request of the respondent. Both the witnesses admitted that they saw the C.S. Extract with the respondent on 20-11-2004, but they did not see the sale clearance certificate with him on that date. These witnesses stated that the respondent prepared a notice at about 4-00 pm on 20-11-2004, but they did not remember the place where the said notice was prepared. 12. The first two issues regarding the maintainability of the suit and the cause of action accrued to the appellant/plaintiff, were decided by the trial court in favour of the appellant by holding that the suit was maintainable and cause of action had accrued to him. Such findings were given by the trial court as the Agreement was an admitted transaction between the parties, and also in view of the specific averments made by the appellant in the plaint regarding part performance of the contract by him and the breach thereof committed by the respondent. 13. It was rightly held by the trial court that the burden to prove Issue No.3 was on the respondent / defendant as to whether or not the appellant had violated the terms and conditions of the Agreement rendering the same liable for cancellation. It was observed by the trial court that there was no dispute about the existence of the Agreement between the parties, and the main dispute was the failure on the part of the appellant to make the balance payment within the stipulated/agreed period. It was further observed by the trial court that the respondent as well as his witnesses had admitted not only that the appellant visited the respondent at the GPO on 16-11- 2004 and requested the respondent to execute the sale-deed in his favour, but also that the respondent told the appellant that he will execute the sale-deed in favour of the appellant. In view of the above admissions, these important facts stood proved. Regarding the presence of the respondents two witnesses in the Sub-Registrar's office on 20-11-2004, the trial court opined inter alia that admittedly both the witnesses did not produce any proof of the short leave claimed to have been taken by them; they were the colleagues of. The respondent and appeared to be
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interested in the respondents case ; and there was no occasion for the respondent to take two witnesses with him to the Sub-Registrar's office. The conflicting statements of the respondent and his two witnesses about the duration for which they waited at the Sub-Registrar's office on 20-11- 2004, was also noticed by the trial court. It was further observed by the trial court that even the respondent did not produce any material to prove that he took leave on 20-11-2004 or he was present on that date at the Sub-Registrar's office. The trial court also observed that the suit was filed by the appellant on 18-11-2004, that is two days prior to the date of completion of sale, as the respondent had refused to complete the sale in his favour and he was apprehending that the respondent will create a third party interest in the property. Finally, it was observed by the trial court that the respondent had not filed any suit for cancellation of the Agreement ; the respondent had not produced the sale clearance certificate required for completing the sale ; and the respondent had admittedly received a handsome amount of Rs.350,000.00 from the appellant. In view of the above observations and findings, Issue No.3 was decided by the trial court in favour of the appellant by holding that the appellant did not commit any violation of the terms and conditions of the Agreement. 14. In view of the finding on Issue No.3 in favour of the appellant, Issue No.4 relating to the specific performance of the Agreement, was also decided by the trial court in favour of the appellant. It was held that the respondent was liable for the specific performance of the Agreement. On the basis of the findings on Issues Nos.3 and 4, Issue No.5 was decided by the trial court by holding that the appellant was entitled to the relief prayed for by him in the suit. Accordingly, the suit filed by the appellant was decreed as prayed by him. 15. The lower appellate court was fully aware that there was no dispute with regard to the Agreement, the part payment made by the appellant, and the promise made by the respondent to execute the sale-deed in favour of the appellant, as the admission regarding these facts has been mentioned in paragraph 12 of the impugned judgment. It was observed by the lower appellate court that the points at issue between the parties were as to which party did not perform his promise on the specified date, and whether the time was of the essence of the contract or not. The lower appellate court further observed that the time for completion of the sale was 20-11-2004, but before that date, the appellant sent a legal notice dated 28-10-2004 to the respondent requiring him to obtain the requisite documents, execute the sale-deed and deliver the possession of the property. It was also observed that the suit was filed by the appellant on 18-11-2004, two days prior to the specified date of payment, praying for execution of sale-deed and delivery of possession. On the basis of these observations, the appellate court below came to the conclusion that these facts draw an inference that the appellant might not have arranged the balance amount, therefore, he filed a suit in order to linger on the matter and to keep the contract intact. Without giving any reason, the lower appellate court believed the version of the respondent that he went to the Sub- Registrar's office with witnesses on 20-11-2004, but the appellant did not come forward. Similarly, without giving any reason, it was held by the lower appellate court that the appellant did not perform his promise whenever the respondent was ready to perform his promise.. It was held by the lower appellate court that there was sufficient and undisputed evidence that time was of the essence of the contract. The case reported as 1994 SCMR 2189 was followed by the lower appellate court, wherein it was held that it was open to the parties while entering into an agreement for sale of an immovable property to provide that the time for performance of the agreement will be treated as the essence of the contract, and in such cases, if the party seeking enforcement of the contract is shown to be in breach of the contract, the court may refuse to enforce the contract. On the basis of the above findings and the aforementioned authority, it was held by the lower appellate court that the appellant failed in performing his part of the contract, and as such the
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respondent had rightly cancelled the Agreement and had rightly forfeited the part payment made by the appellant. 16. As noted above, an inference was drawn by the appellate court below that the appellant "might not have arranged the balance amount", therefore, he filed the suit in order to linger on the matter and to keep the contract intact. This inference was drawn in view of the facts that the time for completion of the sale was 20-11-2004, but before that date, the appellant sent a legal notice dated 28-10-2004 to the respondent requiring him to obtain the requisite documents, execute the sale-deed and deliver the possession of the property, and then he filed the suit on 18-11-2004, two days prior to the specified date of payment, for execution of sale-deed and delivery of possession. The inference drawn by the lower appellate court was presumptive, misconceived and uncalled for. Valuable and vested rights of a party cannot be decided or taken away, or a decree validly passed in favour of a party by a competent C court cannot be set aside, in such a casual manner merely on the basis of a presumption or inference. The suit of the appellant could not be dismissed merely on the ground that he issued a legal notice to the respondent and filed the suit against him before the agreed date. In fact, the findings of the trial court in this context appear to be more logical, sound realistic and reasonable, as it was held by the trial court that the appellant filed the suit before the agreed date because the respondent had refused to complete the sale in his favour and he was apprehending that the respondent will create a third party interest in the property. There was nothing on record to establish that the appellant had failed to arrange the balance amount on the agreed date, especially when the appellant had specifically denied the suggestion that he committed breach of his agreed part of the contract. On the contrary, the appellant had asserted that he had always been ready and willing to pay the balance amount, had offered the same to the respondent on a number of occasions, and had arranged the same ten days prior to the agreed date. The very fact that the respondent and his two witnesses admitted that the appellant visited the respondent at the GPO on 16-11-2004 and requested the respondent to execute the sale-deed and accept the balance payment from him, clearly shows that there was sufficient evidence to establish that the appellant was not only ready to pay the balance amount, but in fact had also offered the same to the respondent. In view of the categorical admissions by the respondent and his witnesses, the above material facts stood proved, and as such the burden was not on the appellant to prove the same. The above findings of the lower appellate court were, therefore, arbitrary and contrary to the admitted facts and the evidence on record. 17. Much emphasis was given by the lower appellate court to the admission made by the appellant that he did not go to the Sub-Registrar's office on 20-11-2004, when he was called by the respondent. The lower appellate court failed to appreciate that the appellant had nowhere admitted that he was called by the respondent on 20-11-2004 at the Sub-Registrar's office. There was no evidence on record to prove that the appellant was actually called by the respondent, or that the respondent had actually gone to the Sub-Registrar's office on 20-11-2004. It is important to note here that the respondent did not examine the Sub-Registrar or any of his officials in support of this assertion. The lower appellate court also failed to appreciate that the appellant had already filed the suit on 18-11-2004 against the respondent, and the dispute was sub judice before the trial court. In such circumstances, the appellant was not obliged to go to the Sub-Registrar's office, if at all he was called by the respondent. 18. The respondent's appeal was allowed by the lower appellate court and the judgment and decree passed by the trial court in favour of the appellant were set aside, mainly on the ground that the time mentioned in the Agreement was of the essence of the contract. This finding of the appellate court below was against the law laid down by the Superior Courts. In this context, some important reported cases are briefly discussed below:--
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(A) PLD 1962 Supreme Court 01 (Larger Bench - 5 JJ) Abdul Hamid v. Abbas Bhai-Abdul Hussain Sodawaterwala. In the above cited authority, the Larger Bench comprising of five (5) learned Judges of the Hon'ble Supreme Court was pleased to hold inter alia that an intention to make time as the essence of the contract must be expressed in unmistakable language; it may be inferred from what passed between the parties before, but not after, the contract is made; equity will not assist where there has been undue delay on the part of one party to the contract, and the other has given him reasonable notice that he must complete within a definite time ; where the vendor must procure Income Tax Clearance Certificate and Custodians Certificate before a sale could be registered, the date when the vendee is informed by the vendor that such certificates had been procured, is the relevant date with reference to which the conduct of the parties has to be judged in respect of their willingness or otherwise of…
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