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Petitioner: FLT.LT. (RETD.) MUMTAZ KHAN VS Respondent: Mst. AMTUL BATOOL
Court Name: Sindh High Court Judge(s): Saeeduzzaman Siddiqui Title: FLT.LT. (RETD.) MUMTAZ KHAN vs Mst. AMTUL BATOOL Case No.: Suits Nos. 243 of 1980 and 296 of 1981 Date of Judgment:1984-04-08 Reported As: 1984 CLC 3462 Result: Order accordingly
JUDGMENT
JUDGMENT ' This judgment will govern the disposal of Suit No, 243/80 and Suit No, 296/81. Suit No, 243/80 is filed by Flt./Lt. (Retired) Mumtaz Khan, against Mst. Amtul Batool, for cancellation of agreement of sale, dated 29th April, 1978 in respect of Bungalow No, 24/1, 8th Zamzama Street, measuring 880 sq. Yds., situated in Pakistan Defence Officers' Co-operative Housing Society, Karachi, for possession of the said bungalow and in the alternative damages in the sum of Rs, 7,50,000. Suit No, 296/81 is filed by Mst. Amtul Batool against Flt./Lt. (Rtd.) Mumtaz Khan, for specific performance of the agreement of sale referred to above and in the alternative compensation/damages in the sum of Rs, 13,16,400. (I will hereinafter refer in this judgment Flt /Lt. (Rtd.) Mumtaz Khan as "the seller", Mst. Amtul Batool as "the purchaser", Bungalow No, 24/1, 8th Zamzama Street, Defence Society, as "the Bungalow", Agreement of Sale, dated 29th April, 1978as "the agreement" and Pakistan Defence Officers' Cooperative Housing Society as "the Society" respectively for the sake of convenience). ' The facts which are relevant to the controversy between the parties may be stated as follows :- ' That on or before 26th February, 1978 negotiations started between the purchaser and the seller in respect of sale of the 'bungalow and the purchaser paid a sum of Rs, 50,000 on 26th February, 1978, Rs, 10,000 on 11th March, 1978 and 20,000 on 23rd February. 1978 towards the sale consideration of the bungalow. On 29th April, 1978 the agreement was executed between the seller and the purchaser and the bungalow was agreed to be conveyed for a lump sum consideration of Rs, 7,50,000. The purchaser who had already paid a sum of Rs, 80,000 to the seller before execution of the agreement paid a further sum of Rs, 5,95,000 to the seller upon execution of the agreement. The balance of the sale price amounting to Rs, 75,000 was agreed to be paid by the purchaser to the seller at the time of execution and registration of the formal conveyance deed in favour of the
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purchaser. As a part performance of the agreement, the seller but the purchaser in vacant and peaceful possession of the bungalow. The bungalow at the time of execution of the agreement was under mortgage with the Muslim Commercial Bank Limited, and therefore, it was provided in the agreement that the seller shall get the bungalow redeemed from the mortgage. It also appears that until execution of the agreement, a 99 years lease in respect of the plot on which the bungalow is constructed was not executed by the Society in favour of seller and therefore, it was provided in the agreement that the seller shall obtain a "B" lease in his favour from the Society. The seller was also required to obtain a completion certificate of bungalow from the competent authority before execution of final sale-deed in favour of the purchaser. All the aforesaid formalities were to be completed by the seller within 3 months of the date of execution of the agreement of sale. The agreement further provided that the cost of obtaining the redemption deed, completion certificate and the lease deed were to be borne by the seller. It also provided that all payments required to be made for and towards the taxes, cesses, charges and any other claim for the period upto the date of handing over of the possession to the purchaser were to be borne by the seller and thereafter, the same were to be paid by the purchaser. It appears that after about a month of execution of the agreement, the Society revised the development charges and demanded a sum of Rs, 29,832 in respect of the plot on which the bungalow is constructed as the difference of the development charges. The above development charges were paid by the seller on 29th June, 1978 and after payment thereof he obtained the "B" lease of the plot in his favour on 17th August, 1978. On 22nd August, 1978 the seller addressed a letter to the purchaser intimating her that he has completed all formalities and is ready to execute the required sale-deed in favour of the purchaser. A request was made in that letter to the purchaser to arrange the date for execution of sale-deed with the Registrar and a copy of draft sale-deed was asked for before it is finally typed. This letter sent by the seller to purchaser was however, returned by the postal authorities with the remarks that the purchaser has gone out. Thereafter, on 17th September, 1978 the seller through his counsel sent a notice to the purchaser informing her that all formalities required in connection with the execution of sale-deed has been completed on 17th August, 1978 and the purchaser was called upon to pay balance of Rs, 75,000 and get the sale-deed executed within a fortnight from the date of receipt of the letter. It was also stated in that letter that in case of failure on the part of purchaser to complete the sale within the above-stated period a suit will be filed against her for recovery of the balance of sale consideration amounting to Rs, 75,000 with interest at the rate of 13% per annum and cost of the suit. In the aforesaid notice of the counsel it was also mentioned that the slight delay in completion of "B" lease by the seller occurred for the reason that the Society had demanded additional development charges which in terms of paragraph 7 of the agreement was to be paid by the purchaser, but she declined to pay the same and in order to end the controversy the same has been paid by the seller. In reply to the above notice of the seller, the counsel of the purchaser on 10th October, 1978, wrote to the counsel of the seller that his client had agreed to deposit the cost of Gas and Electric connections charges and had also undertaken to provide grills on all doors and windows of the bungalow but he failed to do so. It was also alleged that various defects were found which the seller failed to remove and several items of work which were agreed to be done by the seller in agreement were not completed. A sum of Rs, 45,000 was claimed as the estimated cost for the work which was required to be done in respect of the bungalow, under the agreement. It was also complained in the reply of purchaser's counsel that the seller failed to produce the redemption deed and obtain "B" lease within the time mentioned in the agreement. In the end it was stated that the purchaser was willing and ready to perform her obligation under the agreement and is prepared to pay the balance after adjusting the amount mentioned above and to complete the sale-deed. This notice of the purchaser was replied by the Advocate of the seller on 16th September, 1978 wherein various allegations regarding failure of seller to complete items of
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work in respect of bungalow and other formalities required in connection thereto were denied and it was claimed that at the time of handing over vacant possession of the bungalow it was inspected by the purchaser and all the items which were found to be incomplete were provided in paragraph 8 of the agreement and the seller duly paid for them. It was further stated in the said notice that in view of the position taken by the purchaser, the seller has treated the agreement as repudiated and asked the purchaser to surrender the possession of the house within a fortnight of the receipt of letter and expressed his will ingress to refund the amount received by him. The purchaser was further called upon to pay a sum of Rs, 4,000 per month as rent for the period till the possession of the house is returned back to him. This notice of the seller's counsel was further replied by the purchaser's counsel on 12th December, 1978, in which the purchaser's counsel denied the claim of the seller and her liability to pay rent at the rate of Rs, 4,000 per month. The seller was once again called upon in this letter to complete the unfinished work and to reimburse the purchaser with the amount allegedly incurred by her and further threatened that in case the remaining work was not completed by the seller within 15 days of the receipt of the letter, the same would be completed at the risk and cost of the seller. In the end an offer was made for payment of the balance of sale consideration on completion of all the formalities in connection with the execution of the sale-deed. Thereafter, no further correspondence took place between the parties and on 8th March, 1980 the seller filed suit No, 243/80 in this Court seeking cancellation of the agreement of sale, dated 29th April, 1978 and for possession of the suit property. After about 13 months of the institution of Suit No, 243/80, the purchaser also filed Suit for specific performance of the agreement and in the alternative damages against the seller. After filing of written statements in the above suits, separate issues were framed. However, on 16th December, 1982 when both the suits came up for hearing before me I consolidated them and reframed consolidated issues in the two suits as follows :- "(1) Who has committed the breach of agreement, dated 29th April, 1978 and to what effect ? (2) Whether the purchaser is entitled to specifically enforce the contract, dated 29th April, 1978 or the contract is liable to be cancelled on account of the alleged breach on the part of purchaser ? (3)Whether the seller Flt./Lt. Mumtaz Khan is entitled to recover a sum of Rs, 29,833 paid as development charges to the Pakistan Defence Housing Society in accordance with the terms of agreement, dated 29th April, 1978 ? (4) Whether the purchaser Mst. Amtul Batool is entitled to adjust a sum of Rs, 51,400 out of the consideration amounting to Rs, 75,000 ? (5) To what amount of damages, if any, the parties are liable to recover against each other ? (6) To what relief, if any, the parties are entitled to ? ' On the above issues the seller led his evidence first and thereafter purchaser produced her evidence. In support of his claim the seller besides examining himself (Exh. 11) and producing documents Exh. 11/1 to 11/9 examined Syed Yousufuddin (Exh. 5) and produced through him documents Exhs. 5/1 to 5/10, Abdul Wadood (Exh. 6) and produced through him document Exh. "X" which was later on marked as Exh. 11/10, Muhammad Mirza (Exh. 7) and produced through him documents Y/1 to Y/5, Virji (Exh. 8) and produced through him Exhs. Z/1 and Z/2, Amiruddin (Exh. 9) Riaz Ahmed (Exh. 10) and produced through him documents Exhs. 10/1 and 10/2 and closed his side subject to right of rebuttal and after close of evidence of purchaser examined Akbar Ali son of Khan Muhammad (Exh. 18) and produced documents Exhs. 18/1 to 18/9 and Zaheer Ahmed (Exh. 19) and produced through him Exh. 19/1. The purchaser in support of her case examined Atiq Ahmed son of Muniruddin (Exh. 12) and produced documents Exhs. 12/1 to 12/4 Muhammad Ahmed (Exh. 13) and produced through him document Exh. 13/1. Atash Mirza (Exh. 15) and produced through him Exhs. 5 to 15/3 and her attorney/husband Abdul Khaliq (Exh. 14) and produced through him documents Exh 14/1 to 14/19. Apart from the above oral and documentary evidence the parties also admitted some
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of the documents produced by them which were marked as Exh. P/1 to P/9 and D/1 to D/12. I heard the learned counsel for the parties at great length and have gone through the above evidence carefully with their assistance. Before giving my finding on the issues framed in the suit I would first deal with some preliminary objections raised by the learned counsel for the parties during the course of recording of evidence regarding production of witness and documents. The learned counsel for the purchaser objected to the examination of witnesses Exh. 18 and Exh. 19 and production of document Exh. 5/3 to 5/6, X, Y/1 to Y/5, Z/1 to Z/2 and 10/1 to 10/2, but at the hearing he did not press his objection in respect of Exhs. 5/3 to 5/6. The learned counsel however, objected production of documents, Exhs. "X", Y/1 to Y/5, Exh. Z/1 to Z/2 and Exhs. 10/1 to 10/2 on the grounds that these documents were not disclosed by the seller in his affidavit of documents and that some of these documents were in the nature of receipts and they required revenue stamp. It is true that the documents referred to above were not disclosed in the affidavit of documents filed by the seller but learned counsel for the seller contends that these documents were filed after the issues were re-settled by me on 16th December, 1982, in the light of the issues framed by the Court. I resettled the issues in the two suits after consolidating them on 16th December, 1982, and fixed the case for evidence of the parties on 24th January, 1983. The above documents were filed by the seller alongwith a list within 3 days of the framing of the issues. Order XIII, rule 1, C. P. C. Provides that the parties shall file at the first hearing of the suit all the documentary evidence of every description in their possession or power on which they intend to rely and which has not already been filed in Court and the Court on production of those documents shall receive the same. The first date of evidence after re-settlement of issues in the two suits was fixed by me as 24th January, 1983 and these documents were filed within 3 days of the reframing of the issues accompanied by an accurate list thereof. It has not been contended that any of the documents referred to above are forged or were non-existence at the time of filing of the suits. The objection raised by the learned counsel for the purchaser is only of a technical nature and he is unable to satisfy me that because of failure to disclose the documents in the affidavit of documents, the seller is debarred from producing the same on the 1st date of hearing in accordance with order XIII, rule 1, C. P. C. In my view, in the present case, as a result of consolidation of the suit an reframing of the issues on 16th December, 1982, the parties were entitled to file such other documents which were not disclosed or filed in the Court earlier, provided they fell within the scope of Order XIII, rule 1, C. P. C. I, therefore, find no substance in the objection of learned counsel for the purchaser that the above documents cannot be received in evidence because they were not disclosed in the affidavit of documents filed by the seller. I will now consider whether the above documents are produced properly in evidence. Exh. "X" is produced in evidence through witness Abdul Wadood (Exh. 6). Abdul Wadood in his evidence stated before the Court that he prepared the documents Exh. "X" and gave it to the seller. Apart from it this document was referred by the learned counsel for the purchaser in the cross- examination and is, therefore, rightly marked as Exh. 12/2. Exhs. Y/1 to Y/5 were issued to the seller by the witness Muhammad Mirza (Exh. 7) who produced the same and, therefore, these documents were also duly proved and are now marked as Exhs. 7/1 to 7/5. Similarly Exhs. Z/1 to Z/2 were produced in evidence through witness Virji (Exh. 8) who stated that he had prepared the same and given to seller, these documents are, therefore, now marked Exhs. 8/1 to 8/2. With regard to documents Exhs. 10/1 to 10/2 these documents were produced through witness Riaz Ahmed, who admitted in cross-examination that he did not prepare these documents nor these documents bear his signatures. Although he stated that the person who signed these documents had left the service and has gone to Saudi Arabia but he did not claim that he is conversant with the signature of the person who signed the documents Exhs. 10/1 to 10/2. The office copy of these documents were also not produced in evidence by this witness. The seller also did not refer these documents in his examination-in-chief and, therefore, I hold that the documents Exhs. 10/2 have not been proved
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in accordance with law. The learned counsel for the purchaser also objected to the examination of Exh. 18 and Exhibit 19 as witnesses on the ground that names of these witnesses were not disclosed in the list of witnesses filed in Court. These witnesses were examined by the seller in rebuttal in reply to the case set up by the purchaser in evidence. I therefore, overrule the objection of learned counsel for the purchaser. Will now consider the objections raised by the learned counsel for the seller to the examination of some of the witnesses by the purchaser and production of document through them. The learned counsel for the seller objected to the evidence of Muhammad Ahmed (Exh. 13) and Habib Ahmed (Exh. 16) on the ground that the names of these witnesses were not mentioned in, the list of witnesses filed by the purchaser in Court. However, at the hearing, the learned counsel did not press this objection and frankly stated that since these witnesses were brought by the purchaser without praying for issue of witness summons to them, the purchaser is entitled to examine them. The learned counsel however, objected to the production of documents Exhs. 12/1 and 12/4 through Atiq Ahmed (Exh. 12) on the ground that he is not the executant of this document. These documents are signed by one Rahim Zia and the witness Atiq Ahmed claims to be his brother and conversant with his signature. The witness also claimed that he was an employee of Sema Electric Stores who issued the bills Exhs. 12/1 and 12/2 to purchaser. In so far Exhs. 12/3 and 12/4 are concerned the witness admitted that he is neither owner nor an employee of Qaiser Electric Stores, but in re-examination stated that Exhs. 12/3 and 12/4 bear his signatures. Therefore, so far production of these documents in evidence are concerned, they appear to have been properly produced and learned counsel for the seller could not advance any cogent argument for their exclusion from evidence. The learned counsel for the seller also objected to the production of documents Exhs. 15/1 and 15/2 on the ground of inadmissibility but at the hearing he was unable to advance any argument in support of his contention. Having dealt with the preliminary objections raised by the learned counsel for the parties to witnesses and documents I now proceed to give my findings on the issues framed in the suits. ' Issues Nos. 1 and 2.-I will take up issues Nos. 1 and 2 together as they can be conveniently disposed of together. The learned counsel for the seller contends that the seller completed the formalities required under paragraphs 6 and 7 of the agreement and showed his willingness to convey the property to the purchaser upon payment of the balance of the sale consideration but the seller did not come forward to take the conveyance and unduly dalayed the execution of the sale-deed by making frivolous and uncalled for demands on the seller and, therefore, he committed breach of the agreement and is not entitled to enforce the agreement specifically against the seller. The purchaser on the other hand contended that failure of the seller to complete the formalities mentioned in paragraphs 6 and 7 of the agreement within stipulated time is admitted and, therefore, there was clear breach on his part to fulfil his obligations under the agreement. It is further contended that the seller having failed to carry out the items of work mentioned in para. 9 of the agreement cannot take advantage of his own breach and allege breach against the purchaser. It is also contended on behalf of the purchaser that the sale-deed in her favour could not be executed by the seller until capital gain tax was paid by the seller and since it is an admitted position that until today neither the seller has paid capital gain tax nor taken any steps to ascertain the amount of capital gain tax to be paid by him, he is clearly in breach of his obligations under the agreement of sale. ' The agreement was entered into on 29th April, 1978. The total sale consideration for the bungalow was settled at Rs, 7,50,000 out of which Rs, 6,75,000 was paid by the purchaser upto the time of execution of the agreement. The balance of the sale consideration amounting to Rs, 75,000 was to be paid by the purchaser to the seller at the time of execution of the final sale-deed. In part performance of the agreement the seller put the purchaser in the vacant and peaceful possession
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of the property and also handed over the documents mentioned in para. 5 of the agreement within the period mentioned therein. No doubt period of 3 months was provided in the agreement for completion of the formalities by the seller in connection with the execution of final sale-deed but it is quite clear from the evidence on record that time was not made essence of the contract by the parties. In fact a careful reading of the agreement will show that no consequences for the delay in performance of the agreement or breach thereof is provided at all therein. It is sufficiently established in the evidence in the case that immediately on obtaining the "B" lease, the seller informed the purchaser about the completion of the formalities and called upon her to complete the sale but in reply thereto the purchaser came out with the plea that several items of work which the seller had agreed to do under the agreement were still incomplete, and therefore, he should first complete those items of work and then receive the balance of the sale consideration after adjustment of the amount spent thereon. I may mention here that attempts were made both by the seller and the purchaser to make improvements over their respective stands when they filed suits in this Court. For instance before filing of the suit -the seller at no stage demanded the sum of Rs, 29,833 paid by him as additional development charges to the Society from t e purchaser and only claimed the balance of the sale consideration amounting to Rs, 75,000. However, which jug the suit the seller included the 'claim' for payment of this arena the purchaser also in the suit 'on' the plea that this amount was paid by the seller at the assurance of the purchaser who had promised to reimburse the same. Again before filing Suit No, 243/1980 the seller never objected to the validity of the agreement, but in paragraph 13 of the plaint he raised the plea that it was brought about as a result of misrepresentation and fraud on the part of the purchaser. Similarly, the purchaser, also made no grievance regarding non-obtaining of capital gain tax certificate by the seller prior to the filing of Suit No, 296/1981 but in her suit she specifically pleaded that because of non-obtaining of capital gain tax certificate by the seller the sale-deed could not be executed in favour of the purchaser. I have already stated that the time mentioned in the agreement, for its performance, is not of the essence of the contract in the present case, and therefore, delay simplicitor, either on the part of the seller or the punchier is not of much consequene in the case in the absence of prejudsce to either party. Apart from it, it is also to be kept in mind, that the seller in the present case, in part B performance of the agreement handed over vacant and peaceful possession of the bungalow and documents of title in his possession relating to property to the purchaser upon execution of the agreement and except for payment of balance of the sale consideration which is equal to only 10% of the total sale consideration, no other consequences is provided in the agreement in the event of breach. In these circumances, in my view, the Court will not ordinarily refuse specific performance of the agreement unless some exceptional circumstances are shown to exist which have caused serious prejudice to the seller on C account of delay and which cannot be compensated except by refusing) specific performance. The learned counsel for the seller argued that on account of delay on the part of purchaser to pay balance of the sale consideration, the seller was prevented from entering into any agreement of sale in respect of other property which he wanted to purchase after sale of the bungalow and, therefore, the whole purpose for which the agreement was made, stood frustrated. Firstly, the seller at no stage, before filing Suit No, 243/1980 raised any such a plea. Secondly it is an admitted position that only 10% of the sale consideration was to be paid to seller, on execution of final sale-deed in favour of purchaser. It is also admitted position that the liability for payment of capital gain tax under the agreement was that of the seller. The seller in his evidence admitted before the Court that the amount of capital gain tax which he has to pay in respect of the transaction comes to about Rs, one lac or so. It is, therefore,…
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