PLJ 1996 Karachi 1072

PLJ 1996 Karachi 1072

Present: rana bhagwan das, J. Hqji ADAM ALI AGARIA-Plaintiff

versus

ASIF HUSSAIN and 2 others-

Defendants Civil Suit No. 301 of 1976, decided on 25th June, 1995.

(i) Contract Act, 1872 (IX of 1872)--

—S. 2~Agreement-Defmition of-A bare reading of agreement to sell unequivocally shows that there is proposal by vendor and acceptance by plaintiff for a valuable consideration-There is a stipulation of delivering vacant possession of properly by vendpr-These features do not admit of any ambiguity-Held: Parties had mutually entered into a valid, lawful and a concluded contract. [Pp. 1075 & 1077] A to C

(ii) Contract Act, 1872 (IX of 1872)--

1S. 55-Whether time is essence of a contract-Question of--In cases relating to transfer of immovable property ordinarily time is not to be considered as essence of contract, but at any rate a party in breach of contract cannot be permitted to take advantage of its own wrong and to blow hot and cold at one and same time. [P. 1081] D

(iii) Specific Relief Act, 1877 (I of 1877)--

—S. 22 read with S. 12-Contract-Repudiation thereof-Specific performance of contract-Discretion of contract to grant specific performance-Discretion of a court to grant specific performance must be exercised an sound judicial principles and not in arbitrary manner-Court is bound to grant such relief merely because it is lawful-Court may decline to exercise of granting specific performance of a contract, namely, (i) where circumstances under which contract is made are much, as to give plaintiff an unfair advantage over defendant, though there may not be fraud or misrepresentation on plaintiffs part and (ii) where performance of contract would involve some hardship on defendant which he did not fore see whereas its non-performance would involve such hardship on plaintiff-Court may properly exercise discretion to decree specific performance where plaintiff had done substantial acts or suffered losses in consequence of a contract capable of specific performance-A party in breach of commitment cannot seek discretion of court in his favour as it would amount to providing a premium on his on wrong-Held: Plaintiff, in law and equity has made out a strong case for pecific performance of contract-He has approached the court with clean hands and has always been ready and willing to perform his part of contract-Suit decreed with costs. [Pp. 1081 & 1082] E, F, G

PLD 1991 SC 905 and 1991 SCMR 2189 ref. H.A. Rehmani, Advocate for Plaintiff. Habibur Rehman, Advocate for Defendants. Dates of hearing: 3 and 16.5.1995.

judgment

The plaintiff has brought this suit for specific performance of an agreement to sell in respect of Bungalow No. GRE-317-VII-A-E-138-G/2 & 1/1, Garden East, Karachi.

2. An agreement to sell, Exh. 6/1, was executed on 4.8.1975 by Syed Asim Hussain (since dead), father of the defendants, in favour of the plaintiff, agreeing to sell the property in suit for a consideration of Rs. 1,35,000 acknowledging a sum of Rs. 7,000 by way of earnest money. The balance consideration of Rs. 1,28,000 was agreed to be paid at the time of execution and registration of sale-deed. It was further agreed that the deceased vendor shall within three months of the date of agreement complete the sale by executing the sale-deed in favour of the plaintiff after making out a good and marketable title of the property, free from all claims, charges, demands, encumbrances etc. It was stipulated in para. 12 of the agreement that deceased Syed Asim Hussain had stood surety in the sum of Rs. 10,000 before the High Court of Sindh and that he shall get the said surety discharged and obtain a certificate of discharge of surety and get the entry to this effect removed from the record of rights in the office of City Deputy Collector, Karachi. It is pleaded that the deceased was unable to comply with the above requirement within the prescribed period of three months with the result that the parties mutually agreed to extend time for unspecified period but as early as possible. Later, the plaintiff received legal notice dated 4-11-1975 sent on behalf of Syed Asim Hussain informing him that on account of breach of his premises and time being the essence of the contract, the vendor had cancelled the contract. A crossed cheque dated 28.10.1975 in the sum of Rs. 7,000 was also enclosed with this notice. The plaintiff by his letter dated 19.11.1975 replied to the legal notice repudiating all allegations and calling upon the deceased vendor to complete the sale transaction by executing the sale-deed as early as possible. Original cheque for Rs. 7,000 sent on behalf of the vendor was also returned alongwith this reply.

11. Learned counsel for the defendants contended with vehemence that the intention of the parties has to be gathered from the contents of the agreement which must be construed strictly. According to him intention of the parties is of cardinal importance and in the present case, intention of the parties was merely to execute a memorandum of understanding to be complied with within three months positively. Learned counsel submitted that in case the properly in suit was not released from the encumbrance and charge created in favour of Nazir of the High Court of Sindh, understanding would come to an end and there would be no concluded contract between the parties. With reference to paragraphs 1 to 4 of the plaint learned counsel urged that these averments would signify that in case sale was not completed, the agreement would lapse and come to an end. In this connection he referred to page 2 of the cross-examination of the plaintiff, in which the plaintiff innocently accepted the suggestion that the defendants failed to get correction made within three months in the record of C.D.C.,
regarding encumbrance of the property with the High Court and he failed to get the tenants removed from the property within three months. It is admitted position that the deceased defendant did not take steps for discharge of his liability as surety and did not obtain the discharge certificate from the High Court within a period of three months as stipulated in the agreement of sale because the letter from the High Court, Exh. 8/4, is dated 31.12.1979. Be that as it may, this part of the contract was required to be performed by the deceased defendant himself but this aspect of the case is not relevant for the purpose of deciding this issue.

12. Mr. Habibur Rehman, learned counsel for the defendants laid much emphasis on the admission by the plaintiff that the defendants could not get the tenants removed from the property within three months but I am least impressed by this submission of the learned counsel. Undoubtedly, the agreement Exh. 6/1, speaks of handing over vacant possession of the property at the time of execution and registration of the sale-deed, but it has no reference to the occupation of a part of the property by tenants. At any rate, there was no stipulation between the parties that the defendant vendor shall get the tenants ejected before the execution of the sale-deed.

13. In case there were/are some tenants in occupation of a portion of the property in the suit it was incumbent on the vendor to disclose this fact in categorical terms and inform the vendee that the agreement of sale would be subject to encumbrance of the tenants occupying a portion of the property in suit. As observed earlier, there is no mention of any tenant or tenancy rights in favour of any person in the agreement of sale Exh. 6/1. At the trial vendor having adduced evidence to the effect that some tenants are occupying a portion of the property in suit this circumstance would neither frustrate the contract nor absolve the vendor of his duty to perform his part of the contract enjoined by law. In fact, delivery of vacant possession of the property in suit in favour of the vendee would include possession of the portion with the vendor as well as the portion in occupation of the tenants. After acquiring a valid title to the property, plaintiff would be entitled to deal with the tenants in accordance with law.

14. Learned counsel for the defendants relied upon House Building Finance Corporation v. Shahenshah Humayun Cooperative Housing Society an others (1992 SCMR 19). In this case it was observed by the Honourable Supreme Court that the deed of contract has to be construed strictly and literally without deviating or implying anything which is not supported by the intention of the parties and the language of the document. Nothing can be implied in a contract which was inconsistent with its expressed terms. At page 28 of the report, it was observed that the main purpose of construction of terms of a written agreement is to find out the intention of the parties to the agreement. By looking to the words used one has to construe the intention which has persuaded the parties to enter into the agreement. Where the plain and ordinary meaning may lead to inconsistency with other expressions used in the document or absurdity then such plain and ordinary
meaning can be modified to avoid absurdity and inconsistency, because the law favours to save a deed, if possible. Courts are always anxious to adopt a reasonable construction by which the intention of the parties can be spelt out.

15. In the present case I have already reproduced salient features of the agreement of sale which do not admit of any ambiguity. The terms and conditions of the agreement between the parties have been expressed in clear and unequivocal terms and the only inference that can be drawn from the contents of the agreement is that the parties had mutually entered into a valid, lawful and a concluded contract.

16. Maxwell on the Interpretation of Statutes, Twelfth Edition, on page 212 states as under:-

"On The general principles of avoiding injustice and absurdity, any construction will, if possible, be rejected (unless the policy of the Act requires it) if it would enable a person by his own act to impair an obligation which he has undertaken, or otherwise to profit by his own wrong. A man may not take advantage of his own wrong. He may not plead in his own interest self-created necessity."

17. Defendants, therefore, cannot be permitted to take advantage of their own wrong by saying that there was no completed contract between the parties or that it was a mere draft proposed which was never finalized.

18. "Whether an agreement is a complete bargain or merely a provisional agreement depends on the intention of the parties as deducible rom the language used by the parties on the occasion when the negotiations take a concrete shape". This question was considered by Inamullah, J.~in Mrs. Parveen Begum v. Raja Muhammad Sarwar Khan (PLJD 1956 (W.P.) Kar. 521). Apart from other reasons learned Judge relied upon the judgment of the Privy Council in the case ofHadley v. The London Bank of Scot Land (AIR 1923 PC 47) which cannot be expressed in a better way than the judgment itself which reads as under: -

"I have always understood the rule of the Court to be that, in case where there is a clear and undoubted contract as to the validity of which no dispute arises for the sale of the property, the Court will not after that contract has been entered into permit the vendor to transfer the legal estate to a third person notwithstanding the Us pendens will operate against that third person, and I think that as well founded in principle, because the effect of the contract is to pass the whole equitable interest out of the vendor. So long as the contract is an undisputed contract the whole of the property is in equity transferred from the vendor to the purchaser; the vendor then becomes a trustee for the purchaser and the trustee cannot be permitted to deal with the legal estate so as to inconvenience the purchaser."

19. Mr. Habibur Rahman, learned counsel for the defendants, however, sought to rely upon the contents of the written statement filed by the deceased defendant Syed Asim Hussain who without appearing for his evidence expired during the pendency of the suit on 25.9.1985. In the written statement the deceased had taken the stand that the draft was only to serve as a basis for further negotiations and discussions between the parties; and only after such discussion and necessary amendment, the agreement would have been finalized and written out on a duly stamped paper. In para. 15 of the written statement he asserted that he wanted to sell the property in dispute and had contacted several brokers. In this connection, Qazi Muhammad Ramzan, a broker also contacted the defendant. The defendant having been pestered by the brokers made it quite clear to them particularly to Qazi Muhammad Ramzan, that he would not sell this property for less than rupees two lacs. He further told Muhammad Ramzan that he should bring offers only from genuine buyers who were willing to purchase the property for Rupees two lacs. In July, 1975 Muhammad Ramzan brought a draft of agreement typed on a simple paper purporting to be an agreement for sale of defendant's property to the plaintiff for a price of Rs. 1,35,000 alongwith a cheque for Rs. 7,000 bearing dated 4.8.1975 and drawn on Muslim Commercial Bank. The defendant refused to accept the offer contained in the said draft. He flatly told the said broker that he could not accept any offer for less than Rs. 2,00,000 because he shall have to spend Rs. 40,000 to Rs. 50,000 for getting a suitable ranted accommodation for himself and his family and a further sum of about Rs. 25,000 will be spent for providing alternate accommodation to his tenant of the ground floor of the building.

'_t20. Learned counsel persuaded this Court to accept these averments of the deceased defendant as a part of evidence without proving the same through the defendant's son Syed Wasif Hussain who appeared in the witness-box. In this connection I may refer to the celebrated judgment of the Supreme Court in the case of Mst, Khairunnisa and others v. Malik Muhammad Ishaque and others (PLD 1972 SC 25), in which it was laid down that a written statement cannot be exhibited in a case without the person filing the same being examined in Court and, therefore, cannot be treated as evidence in the ease under section 32 of the Evidence Act. Learned counsel for the defendants attempted to distinguish this judgment by submitting that prior to the Law Reforms Ordinance, 1972 pleadings were not verified on oath whereas written statement in the present case was verified on oath by the deceased defendant. Be that as it may, I am least impressed by the argument advanced in support of the proposition that the averments made in a written statement after death of the author can be taken into consideration as a valid piece of evidence. Apart from the view taken in the aforesaid authority this view was affirmed and approved by majority judgment in Khawaja Auot Cars Ltd. v. Muhammad Yousuf (1991 SCMR 2223). In my view acceptance of contention of the learned counsel would give rise to serious complications in law which may lead to commit violence on the statute.

-__ 21. Even otherwise evidence before a Court of law would include examination-in-chief, cross-examination by the opposite-party and re- examination by the party calling the witness with the leave of the Court. In he present case author of the written statement being not available for cross-examination and the plaintiff having no opportunity of cross-
examining him the same cannot be taken or accepted as evidence of the facts stated therein as contended by the learned counsel. For these reasons, I hold that agreement Exh. 6/1 executed between the parties was a completed contract and not a draft proposal.

22. ISSUE NO. 2: This issue was struck in view of the averments in the plaint and \ denied by the defendants but Mr. H.A. Rahmani, the learned counsel for the plaintiff did not press this issue which is accordingly dropped.

23. ISSUE NO. 3:

In view of the fact that period of three months was fixed in the agreement of sale for completion of the contract learned counsel for the plaintiff did not controvert the position that time was to be of the essence of the contract. It was, however, submitted that the time was fixed for placing responsibility on the vendor to perform his part of the contract for obtaining a good and marketable title to the property with a view to execute a sale-deed and get it registered. It is an admitted position that consistent with the terms of the contract deceased vendor did not obtain a certificate from the High Court within a period of three months discharging him of the encumbrance on the property and the certificate obtained from the High Court was dated 31st December, 1979 long after the period for completion of the sale agreed upon between the parties. This circumstance per se, however, would not absolve the vendor of his legal duty to perform the part of his contract notwithstanding the expiry of period fixed in the agreement of sale. Indeed the vendor did not take steps to achieve the desired result and to discharge his obligation arising out of the agreement. On the contrary after lape of three months he sent a letter of cancellation Exh. 6/2 to the plaintiff alleging breach of contract on his part which was false and baseless on the face of it to the knowledge of the vendor. For the first time defendant's Advocate alleged in his letter that as upper clause 8 of the agreement vendor had to construct the cement block common wall between his plot and that of the adjoining owner but it was agreed that it will be done at the cost of the defendant. The letter went on saying that the original vendor had called upon the defendant several times to arrange for money and/or do the needful by calling the masons and the building material but he did not pay any heed. Apart from the above allegations it was said that the plaintiff had also agreed to arrange for alternate accommodation of the tenant of the ground floor but later on he had backed out. It may be observed here that both these conditions do not find any place in the agreement of sale consisting of 12 clauses. No doubt clause (8) of the agreement says that before delivery of vacant possession of the property in suit vendor shall construct and/or erect the cement block common wall between his plot and that of the adjoining owner Mst. Sheerin Begum, it does not say that the vendee shall bear the expenses. Likewise, there is no stipulation in the agreement that he shall make alternate arrangement for accommodation of the tenant of the ground floor of the property. The defendant having introduced entirely a new case in this letter just after the expiry of three months and cancelling the 'agreement of sale unilaterally could not be allowed to do so. In any case the breach of contract was committed by him, consequently he could not back out from his promise or to rescind the contract on his own will. In my view the contract of sale being complete and valid in all respects could not be unilaterally revoked to the utter disadvantage of the vendee who lost no time in repudiating the allegations of the vendor by sending a prompt reply Exh. 6/3 through his Advocate. In his reply plaintiff not only repudiated the allegations of the defendant but also expressed his readiness and willingness to perform of his part of contract. He had also returned the cheque for Rs. 7,000 to the defendant sent by him. Needless to point out in the event of wrongful repudiation by a contractor it would not bind other party to the contract and the defendant had the least justification to put an end to the contract.

24. In Zaheer Ahmed and another v. Abdul Aziz arid others (1983 SCMR 559) Honourable Supreme Court observed that in a case where time was of the essence of the contract a party guilty of reventing completion of contract within time could not plead that time was of the essence of the contract.

25. Truly speaking in cases relating to transfer of immovable property ordinarily time is not to be considered as essence of the contract but at any rate a party in breach of contract cannot be permitted to take advantage of its own wrong and to blow hot and cold at one and the same time. In my view, in the present case, stipulation of time fixed in the agreement would not result in frustration of the contract and the defendant would not be entitled to revoke the same he being guilty of contravention of the terms of the contract itself.

ISSUE NO. 4:

26. It is true that section 22 of the Specific Relief Act gives discretion to a Court to grant specific performance but the discretion must be exercised on sound judicial principles and not in an arbitrary manner. It is true that jurisdiction to decree specific performance is discretionary and the Court is not bound to grant such relief merely because it is lawful. However, the discretion of the Court is not arbitrary but it is to be guided by sound judicial principles which are amenable to correction by a Court of Appeal. It may further be noticed that section 22 gives two illustrations which are not exhaustive to demonstrate in which cases the Court may decline to exercise of granting specific performance of a contract, namely, (i) where the circumst nces under which the contract is made are such as to give the plaintiff an unfair advantage over the defendant though there may not be fraud or misrepresentation on the plaintiffs part; and (ii) where the performance of the contract would involve some hardship on the defendant which he did not foresee whereas its non-performance of the contract would involve such hardship on the plaintiff. It may also be pointed out that the above section provides that the Court may properly exercise discretion to decree specific performance where the plaintiff had done substantial acts or suffered losses in consequence of a contract capable of specific performance.

27. It would be noticed that the defendant has not raised either of the two grounds to defeat the claim of the plaintiff. On the contrary he has attempted to take advantage of his own wrong and breach of contract on his part. It is well-settled that a party in breach of commitment cannot seek discretion of the Court in his favour as it would amount to providing a premium on his own wrong. In law and equity the plaintiff has made out a strong case for specific performance of the contract and in the circumstances he is entitled to a decree for specific performance subject to payment of the balance consideration. There is no cogent and convincing reason to refuse specific performance in favour of the plaintiff who has approached the Court with clean hands and has always been ready and willing to perform his part of the contract. In fact no authority is needed for this proposition yet I am benefitted by the view expressed by the Supreme Court in the case of Syed ArifShah v. Abdul Hakeem Qureshi (PLD 1991 SC 905) and Mr*. Mussarat ShoukatAli v. Mrs. Sofia Khatoon and others (1991 SCMR 2189).

28. In the last-mentioned case Honourable Supreme Court while reiterating that grant of relief specific performance is discretionary with the Court observed that the relief specific performance being an equitable relief, it can be refused by the Court only if the equities in the case are against the plaintiff. The Court while refusing to grant a decree for specific performance to a plaintiff must find something in the conduct of plaintiff which disentitles him to the grant of equitable relief of specific performance of a contract which cannot be refused merely because it is lawful for the Court to refuse it

ISSUE NO. 5:

29. As a result of my findings on Issues Nos. 1 to 4 suit is decreed with costs. He shall deposit the balance consideration of Rs. 1,28,000 in Court within thirty days of the decree. The defendants are directed to execute a registered sale-deed in favour of the plaintiff within thirty days of the deposit of the amount::: this Court.

(M.Y.F.K.) Suit decreed.