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Petitioner: QURESHI MUHAMMAD ANWAR And 6 Others VS Respondent: S.A. QURESHI And 3 OTHER
Court Name: Lahore High Court Judge(s): Sh. Riaz Ahmad, Ch. Mushtaq Ahmad Khan Title: QURESHI MUHAMMAD ANWAR And 6 Others vs S.A. QURESHI And 3 OTHER Case No.: Regular First Appeal No. 21 of 1985 Date of Judgment:1993-11-30 Reported As: 1994 CLC 733 Result: Order accordingly
JUDGMENT
JUDGMENT CH. MUSHTAO AHMAD KHAN, J.---Bungalow No-18, Survey No.169 measuring 2.41 acres situated in Kharian Cantt. is held by the respondents by way of lease in perpetuity which was granted on 16-4- 1905 on the motion of the lessee, the aforementioned premises were allowed to be segregated and sub-divided into thirteen plots of various sizes with a permission to construct independent buildings thereon vide letter dated 25-10-1978 Exh.P-43. Mr.SA. Qureshi who is respondent No.1 in this appeal and is General Attorney of respondents Nos.2 to 4 who are his son and daughters entered into an agreement for sale of above-mentioned lease rights in Plots Nos.5 to 11 out of the aforementioned sub-divided plots, with Qureshi Muhammad Anwar, the appellant No.1 vide receipt/deed of agreement for sale dated 3-12-1979 which is Exh.D6 and is reproduced as under:-- 335/A, Peshawar Road, Rawalpindi Cantt. Dated 3rd December, 1979. "This is to acknowledge of a sum of Rs.10,000 (Rupees ten thousand) only from Mr. Muhammad Anwar Qureshi son of Late Abdul Ghani Qureshi of Village Kala Gujran, Jhelum on account of advance for the sale of leasehold rights of Plots Nos.5 to 11 comprising Survey No.169/5 to 11 of Bungalow No.18 the Mall, Jhelum Cantt. measuring in aggregate 4,978.250 or there about at the rate of Rs.115.70 per Sq.Yd exclusive of all expenses, charges and fees (subject to registration of the sale-deeds immediately on the expiry of the period of notice for the proposed transfer to be given by the vendor to the M.E.O, Kharian circle under condition No.IV (i) of the lease-deed dated 6-4- 1905 in Form B of Cantt. Code, 1899 provided no veto is exercised by the competent authority on the proposed transfer. The vendee agrees to make the payment of the total balance of the price of the
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land at the aforesaid rate hereby agreed upon at the time of registration of the sale-deeds failing which the amount of advance now paid by the vendee shall be forfeited by the vendor. (Sd.) (S.A. Kureshy) Vendor I agree and fully subscribe to the above conditions. (Sd). Dated Rawalpindi(Muhammad Anwar Qureshi the 3rd December, 1979.Vendee Witnesses." (Underlining is by us). The sale had to be executed after the proposed sale was permitted and was not vetoed by the Cantonment Authorities as per condition No.4 of the lease-deed which is reproduced as under:-- "CONDITION NO.IV Lessee's interest in certain cases: (1) Whenever the lessee intends to transfer, by sale, gift, mortgage, or exchange, his interest in the land, or in the buildings erected on the land, or in any part of the land or buildings, he or the intended transferee shall give the Cantonment Magistrate one month's notice in writing before the transfer is completed. (2) The General Officer of the Command shall have power, within the said period of one month, and with the concurrence of the Local Government, to impose, by order in writing, his veto on any such transfer; and, if in any case the Cantonment authority considers it desirable that the said power of veto should be exercised, it shall report the case to such General Officer without delay. (3) If notice on any such transfer is not given as aforesaid, or if any such transfer is made after the same has been vetoed, the transfer shall be void." A request in writing for grant of permission for the proposed sale, was made by the respondent No.1 on 4-12-1979 to the M.E.O Kharian Cantt. whereupon the permission to sell the property was not granted and, hence, the proposed transfer was vetoed in exercise of the powers conferred upon Cantonment Authorities under the condition No.4 referred to above, under an intimation to the respondent No.1 vide letter dated 1-1-80 Exh.D2. This letter is reproduced: 'Tele No.954 Re d A-D. No.J-25/28/103 Military Estate Officer, Kharian Circle, Kharian Cantt. Dated, the 01 Jan. 1980 To Mr. SA.Kureshy (Attorney) Deputy Director, Mily Lands & Cantts, Rawalpindi Region, Rawalpindi Cantt. Subject: Exercise of veto power to the proposed transfer by sale of the leasehold rights of 13 plots in Bungalow No.18, the Mall Jhelum Cantt. Reference your application dt. 4-12-79. 2. It is intimated that the proposed transfer by sale of the leasehold rights of 13 plots in Bungalow No.18, the Mall, Jhelum Cantt. has not been agreed by the Army Authorities. The proposal is vetoed. (Sd.) (Abdul Qayyum Bhatti) Mily. Estate Officer,
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Kharian Cantt. Copy to: 1. The Director, Mily Lands & Cantts, Ministry of Defence, Pak. Sectt-II Rawalpindi. 2. The Deputy Director, Mily Lands. & Cantts., Lahore Region, Lahore Cantt. 3. Sta.HQs Jhelum Cantt." It appears that even thereafter the parties continued making efforts for getting permission for transfer in terms of condition No.4 so that the agreement for sale could be acted upon and the plots agreed to be sold could be transferred. Consequently, Director Military Lands, Cantonment vide letter dated 15-4-1982 Exh.D4 informed the M.E.O., Kharian, Circle Kharian that the proposed sale of the plots is still encumbered with the veto conveyed vide Pak Army Signal No.0-2099 dated 17-12-1979 conveyed to the respondent No.1 vide letter dated 1-1-80 and, hence, the plots are not available for sale till the lessee agrees to take the lease of all the sub-divided plots in Schedule VIII of CIA Rules, 1937 on payment of prevalent rates of rent and premium at the prescribed rate. Letter Exh.D4 is reproduced as under: Regd.A.D. No.15/5/L/AD/A/ML&C/76 Govt. of Pakistan Mily of Defence (ML&C Deptt) Rawalpindi 15-4-82. To The Military Estate Officer, Kharian Circle, Kharian Cantt. Subject: Sale/Sub-division of the vacant compound of Bungalow No.18 (Survey No.169), The Mall, Jhelum Cantonment. In supersession of this Deptt. letter No.15/5/L/AD/A/ML&C/76 dated 7th Sep. 1981, it is intimated that the GHQ QMG's Branch vide their letter No.5631/517/JMR/Qtg-lA, dated 11-3-1982 (copy enclosed) have since reiterated that the orders issued vide their letter No.5631/517/Qtg-L4, dated 31st August 1981 for the regularisation of the sanction issued vide this Department letter No.15/5/L/AD (A)/ML&C/76, dated 25-10-78 is strictly subject to the condition that the lessee takes leases of all the sub-divided plots in Sch.VIII of the CIA Rules, 1937 on payment of prevalent rates of rent premium at the prescribed rate. 2. It is, therefore, obvious that the proposed sale of the plots is still encumbered with the veto conveyed vide Pak Army Signal No.Q-2099, dated 17th December, 1979 as intimated to you by the HQ Kharian Log-Area vide their letter No.2016/3/B/Q-3, dated 18th December 1979 and conveyed to Mr. S.A. Kureshy, the attorney of the lessee vide your letter No.J-25/28/103, dated 1st Jan. 1980 and consequently, the plots are not available for sale till the lessee agrees to take the leases of all the sub-divided plots in Sch.VIII of the CLA Rules, 1937 on payment of prevalent rates of rent and premium at the prescribed rates. 3. You are, therefore, required to intimate the above orders to all concerned. 4.Please acknowledge receipt. (Sd.) (S. Reyaz Hashmi) Dy Director Mily Lands & Cantt. Encl: As above.Department. Copy to: 1.Mr. SA. Kureshy, FA.(P) D.P.Division, Rawalpindi. 2.The DDML&C Lahore Region, Lahore Cantt."
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In pursuance of the aforementioned letter M.E.O Kharian, Circle Kharian Cantt. conveyed the reiterated veto subject to conditions for grant of permission to transfer the plots requiring conversion of lease in perpetuity regarding whole property held by the respondent, into a lease under Schedule VIII of the CLA Rule, 1937 on payment of prevalent rate of rent and premium vide letter dated 26-5-82 Exh.D3. It is clear therefore, the permission to transfer the plots remained vetoed unless and until the respondents agreed to convert their lease rights in perpetuity to the lease rights for a limited period of time on payment of manifold higher rates of rent and premium and, hence, if they choose to act to their disadvantage. Obviously the permission being conditional and not acceptable to the respondents, they chose not to convert their lease in perpetuity into a lease for limited period of time on payment of exorbitantly higher rate of rent and premium, hence, they did not convert their lease rights as offered by the military authorities which conversion was a pre--condition for grant of permission for the proposed transfer. As the pre--condition for execution of sale-deed could not be fulfilled in spite of best efforts of the respondents, hence, they rescinded the contract which had stood frustrated and refused to execute sale-deed in terms of the agreement for sale dated 3-12-1979 in favour of plaintiffs who have filed this suit seeking Specific Performance of the aforementioned agreement for sale. In the plaint it has been alleged that there is a subsisting agreement for sale and that although there was a condition that the proposed sale shall not be executed in case the same is vetoed by the Military Authorities yet the subsequent letters Exh.D3 and Exh.D4 referred to above do amount to withdrawal of veto and hence grant of permission to transfer in terms of condition No.4 of the lease, therefore, the defendants/respondents are bound to execute sale-deeds in their favour on receipt of Rs.5,75,981 being the balance sale price. This suit has been contested by the respondents inter alia on the grounds that there is no privity of contract between plaintiffs No.2 to 7 and the defendants, hence, those plaintiffs have no locus standi to file the suit; that it is the plaintiffs who have fails I to perform their part of contract, hence, the same stood rescinded and that the agreement on the basis whereof the suit has been filed was to be performed subject to the pre-condition to the effect that the proposed transfer was not vetoed by the Military Authorities who have vetoed the same within the specified period of time, hence, the contract stood frustrated and rescinded which fact was duly notified to the plaintiffs on 28-1-80. Hence, the suit is liable to be dismissed. 2. On the basis of pleadings of the parties, learned trial Court settled the following issues:- (1) Whether the plaintiffs Nos.2 to 7 have no locus standi to file the instant suit as there is no privity of agreement of plaintiffs Nos.2 to 7 and defendants? (2) Whether the plaintiffs have failed to pay the amount on the expiry of notice and as such they had failed to perform their part of contract? (3) Whether veto was exercised within stipulated period of the notice, if so, with what effect? (4) Whether the relief is barred under section 21 of Specific Relief Act? (5) Whether the plaint merits rejection under Order 7, rule 11, C.P.C.? (6) Whether the alleged agreement is unstamped and is not admissible in evidence unless it is impounded penalty is paid by the plaintiff? (7) Whether the suit is bad for misjoinder of parties? (8) Whether the plaintiffs are estopped by their conduct to file this suit? (9) Whether the agreement in question was finally terminated and rescinded on 28-1-80 when the plaintiff failed to perform their part of contract? (10) Whether the plaintiff is entitled to relief prayed for? (11) Relief. ' In support of their case both the parties produced oral as well as documentary evidence. Plaintiffs produced five witnesses P.W.1 to PW5 whereas defendants produced two witnesses who are D.W.1 and D.W.2. Besides the above oral evidence the plaintiffs have produced documents Exh.P1 to
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Exh.P43 whereas respondents have produced documents Exh.Dl to Exh.D9. Report of Local Commissioner is Exh.LC-I whereas his statement is Exh.LC-II. The evidence produced by the plaintiffs oral as well as documentary is mainly to the effect that the respondents entered into an agreement for sale which was to be performed subject to the veto to be exercised by the military authorities against the proposed transfer which veto though initially exercised by the military authorities was subsequently withdrawn and proposed transfer was permitted, hence, the plaintiffs are entitled to the specific performance of the contract as they have been ready and willing to perform their part of contract. On the other hand respondents have produced evidence to prove that within the stipulated period of time the respondents did approach the military authorities for grant of permission to transfer which was refused and the proposed transfer was vetoed and further that the plaintiffs also failed to perform their part of contract within the stipulated period of time, hence, contract stood terminated/rescinded/frustrated which fact was duly notified to the plaintiffs, therefore, the suit for Specific Performance cannot be decreed against them and further that there was no privity of contract between plaintiffs Nos.2 to 7 and the defendants, therefore, they have no locus standi to file the suit against the defendants on the basis of agreement executed between the respondent No.1 and the plaintiff No.1. 2-A. After scanning the whole evidence, learned trial Court held that there is no contract between the plaintiffs No.2 to 7 and the defendants, therefore, issues No.1 and 7 were decided against the plaintiffs. Regarding issues No.2 to 4, learned trial Court held that although an agreement for sale was executed between the plaintiff No.1 and respondent No.1 yet proposed transfer remained vetoed inasmuch as the condition attached for grant of permission to transfer in subsequent orders/letters having not been accepted by the defendants as the same was to their disadvantage, no decree for Specific Performance of Contract can be granted in favour of the plaintiffs in view of the provisions of sections 21 and 22 Explanations I and II of the Specific Relief Act, therefore, issue No-2 was decided in favour of the plaintiffs, however, issues No.3 and 4 have been decided in favour of defendants. Relying upon Exh.D6 read with other documentary evidence particularly Exh.D3 and Exh.D4, learned trial Court decided issue No.8 against the plaintiffs holding that the Court cannot vary the contract for sale and direct the Specific Performance thereof, as the original agreement for sale Exh.D4 did not contain a term to oblige the defendants to perform the conditions contained in Exh.D3 and Exh.D4. Other issues have also been decided in favour of the defendant, and against the plaintiffs and the suit has been dismissed vide judgment and decree dated 2-2-1985. Aggrieved of this judgment and decree, the plaintiffs have filed this regular first appeal. 3. Mr. Muhammad Hanif Bhatti, Advocate and Malik Qamar Afzal Advocate have appeared on behalf of the appellants whereas Mirza Anwar Baig, Advocate has appeared on behalf of the respondents. 4. Learned counsel for the appellants have addressed consolidated arguments only on issues No.3, 4, 8, 9 and 10 decided against the plaintiffs and the sole point which has been raised during the course of arguments is that in view of the admitted facts of this case that an agreement for sale was executed between the parties on 3-12-1979 and the proposed transfer though initially vetoed vide Exh.D2 yet was permitted by the orders/letters dated 15-4-1982, ?.6-5-1982 Exh.D3 and Exh.D4 (reproduced in the earlier part of the judgment) and documents Exhs.P-33 and P-34 which are reproduced as under:-- EXHIBIT D-3REGISTERED. No.J-25/28/16. Mily Estate Office, Kharian Circle, Kharian Cantt.
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Dt: 26-5-1982. To Mr.SA.Kureshy, F.A.(P)D.P. Division, Rawalpindi. Subject: Sale/Sub-Division of the vacant compound of Bungalow No.18 (Survey No.169), The Mall, Jhelum Cantonment. Reference ML&C Deptt. letter No.15/5/l/AD/A/ML&C/76, dated 15th April, 1982 on the subject cited above. (2) I am directed to inform you that in supersession of the Deptt letter No.15/5/L/AD/A/ML&C dated 7th Sept 1981, it has been intimated that the GHO vide QMG's Branch letter No.5631/517/JMR/Qtg/1-A dated 11-3-82 have reiterated that the Orders already issued under their letter No.5631/517/Qtg-1-A dated 31-8-81 for the regularisation of the sanction accorded by the competent authority vide ML&C Deptt. letter No:15/5/L/AD (A)/ML&C/76, dated 25-10-78 are strictly subject to the condition- that you take out leases of all the sub--divided plots in Sch.VIIl of the C.L.A. Rules, 1937 on .payment of ,prevalent rate of rent and premium at the prescribed rates. (3) I am further directed to inform that the proposed sale of the plots is still encumbered with the veto conveyed to you vide this office letter No,J-25/28/103 dated 1-1-80 and consequently, the plots are not available for transfer by sale or otherwise till you agree to take out leases of all the sub- divided plots in Sch.VIII of the C.LA. Rules, 1937 on payment of prevalent rates of rent and premium at the prescribed rates as mentioned in para No.2 above alongwith the allied charges. (4)Please acknowledge receipt. (R.H.Malik) Mily Estate Officer, Kharian Circle, Kharian Cantt. Copy to: 1. Mr. Pervez Anwar Qureshi, Kala Gujran/Jhelum, for information, EXI.IBIT-D-4. Reproduced in the earlier part of this judgment. EXHIBIT. P-33. Registered. QMG's Branch (Qtg Dt) General Headquarters, Rawalpindi. Tele: GHQ/41960 No.5631/517/QTG-IA 31 Aug 1981 ToSta HQ Jhelum Info: HQ Khn Log Area M1&C Deptt for information with reference to their U.O.No.15/5/L/AD/A/ ML&C/76 DT. 11 Aug 1981. MEO Kharian. Subject: Sale/Sub-division of Bungalow No.18, The Mall, Jhelum Cantt. Your letter No.205/18/Q dated 11 Oct 81 refers. GHQ have no objection to regularise the sub-division of site of Bungalow No.18, Survey No.169, The Mall, Jhelum Cantt. granted under Govt. of Pakistan Min of Def letter No.15/5/L/AD/A/ML&C/76 dated
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25 Oct 1976 and transfer of sub--divided plots by way of sale after converting the lease into SCh.VIlI on payment of prevalent rates of rent and premium. 2. This NOC has been issued as a special case and will not be quoted as a precedence in future. 3. Pak Army signals No.Q-2099 of 17 Dec.79 and No.Q-2074 of 23 Feb:80 are hereby cancelled. Brig. Quartermaster General (Muhammad Ihsan ul Haq) EXHIBIT P-34. Registered. No.15/5/AD/A/ML&O/ 76, Govt. of Pakistan, Ministry of Defence (MI&O Deptt.) Rawalpindi, the 7th Sept: 1981. To The Deputy Director, Mily Lands & Cantonments, Lahore Region, Lahore Cantt:- Subject: Jhelum Cantt: Transfer of leasehold rights of 13 sub-divided plots comprising Svy. No.169J1 to 13 carved out of the vacant compound of Bungalow No.18, The Mall. Reference your letter No.18/68/DD/LR/54, dated 21-12-1979. (2) A copy of GHQ letter No.5631/517/Qts-IA, dated 31st August, 1981 is forwarded herewith for your information. MEO Kharian may now please be directed to issue the necessary permission to the Sub--Registrar, Jhelum to accept for registration the transfer deeds through sale of all the 13 plots of land cited in the subject in pursuance of notice of transfer dated 4-12-1979 served by the attorney of the transferee on him under the provisions of clause (i) of condition IV of the lease- deed dated 6-4-1905 in Form `S' of Cantt. Code 1899, consequent upon the withdrawal of the veto exercised by the GHQ vide their signal No.Q-2099 dated 17-12-1979 and No.Q-2074 dated 23-2-1980 which now stand cancelled vide para. 3 of GHQ letter quoted above. . (3) Action taken in the matter may please be intimated to this Deptt. As early as possible under intimation to the transferees. (4) Please acknowledge receipt. (S.Reyaz Hashmi) Dy. Director Mily Lands and Cantts. Te1:63530. Copy to: (1) The MEO Kharian Circle, Kharian Cantt. for immediate further necessary action. (2) Mr.S.A.Kureshy, Director (Finance) PRD C; 177/A Barwar Road,Rawalpindi Cantt. with reference to his appeal dated 24-5-1981 to Lt.- Genl. Saeed Qadir, HI (M). S.Bt.QNG, Pakistan Army, GHQ Rawalpindi together with a copy of GHQ letter dated 31-8-81 referred to above. , (3) The Executive Officer, Jhelum Cantonment. Hence, the plaintiffs are entitled to the grant of decree for Specific Performance of the contract but the learned lower Court has illegally dismissed the suit under the assumption that the proposed transfer has been vetoed and contract stands rescinded and frustrated. Referring to the provision of section 18 of the Specific Relief Act, which-is reproduced as under: SECTION 18: "Where a person contracts to sell or let certain property, having only an imperfect title thereto, the purchaser or lessee (except as otherwise provided by this Chapter) has the following rights:-
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(a) if the vendor or lessor has subsequently to the sale or lease acquired any interest in the property, the purchaser or lessee may compel him to make good the contract out of such interest; (b) where the concurrence of other persons is necessary to validate the title, and they are bound to convey at the vendor's or lessor's request, the purchaser or lessee may compel, him to procure such concurrence; (c) Where the vendor professes to sell unencumbered property, but the property is mortgaged for an amount not exceeding the purchase money, and the vendor has in fact only a right to redeem it, the purchaser may compel him to redeem the mortgage and to obtain conveyance from the mortgagee; (d) Where the vendor or lessor sues for specific performance of the contract, and the suit is dismissed on the ground of his imperfect title, the defendant has a right to a return of his deposit (if any) with interest thereon, to his costs of the suit, and to a lien for such deposit, interest and cost on the interest of the vendor or lessor in the property agreed to be sold or let." Learned counsel has contended that the plaintiffs are entitled to get agreement for sale of specifically performed including issuance of a direction to the j respondents to convert their lease rights in perpetuity to a lease under Sch.VIII to CIA Rules, 1937 for a limited period of time on payment of enhanced rate of rent and prevalent premium. Regarding applicability of provision of sections 21 and 22 of the Specific Relief Act, which have been relied upon by the learned trial Court for non-suiting the plaintiffs, learned counsel has argued that the respondents having agreed to sell the plots in question, cannot wriggle out of their commitment by refusing to perform their part of contract merely on the ground that Specific Performance of Agreement for sale will put them to a disadvantageous position. Referring to letter Exh.P43, learned counsel contended that the defendants had already got the plots sub-divided and permission has been granted to them to raise construction thereon, therefore, there is absolutely no bar to the passing of a decree for Specific Performance of Contract in favour of the plaintiffs. In support of his contention, besides, relying upon the provision of section 18 of the Specific Relief Act, learned counsel has also placed reliance on the following cases: (1) Kalyanpur Lime Works Ltd v. State of Bilhar and another (AIR 1954 SC 165), (2)Sayyed Ghulam Muhammad Shah v. Sayyed Fateh Muhammad Shah (PLD 1955 FC 1), and (3) Ziauddin Raf v. Muhammad Khan and others (PLD 1962 (W.P.) Lahore 321). 5. As against the above arguments,. Mirza Anwar Baig Advocate learned counsel for the respondents has vehemently argued that the lease rights agreed to be sold were granted to the respondents in the year 1905 vide a lease in perpetuity. Permission to sub-divide Bungalow into 13 plots and raising construction thereon was granted to the respondents vide a letter Exh.P43 dated 25-10-1978 according to which the nature of the lease rights as originally granted remained intact. Agreement for sale dated 3-12-1979 was executed between the plaintiff No.1 and the respondent No.1 with a view to transfer the existing lease rights in the plots agreed to be sold. There was a pre- condition in the agreement for executing transfer/sale-deeds in favour of plaintiffs to the effect that transfer shall take place only if the proposed transfer is not vetoed in terms of condition No.4 of the lease-deed, according to which if transfer is made without permission from the Cantonment Authorities the same is void. The respondents did approach the Military Authorities within the stipulated period of time to obtain necessary. permission and to know as to whether the proposed transfer as vetoed? The said authorities vetoed the proposed transfer which veto was conveyed to the respondents on 1st of Jan: 1981 vide a letter Exh.D2. Subsequent thereto however another letter was issued by the Cantonment Authorities offering that the proposed transfer can be allowed to be made in case the lease in perpetuity is…
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