NASIRA SULTANA Versus H. B. L.

The facts relevant to the controversy between the parties are not in dispute. On 25‑4‑1965, Messrs Unity Exporters hereinafter called the "sellers" were allotted a plot of land bearing No. L‑8,‑68, in Block No. 22, measuring 3.2 acres in the Industrial area of K. D. A. Scheme No. 16 in accordance with the terms and conditions of allotment, Exh. 8/2. The first instalment payable in terms of this allotment was made by the sellers on 21‑10‑1965. By an agreement in writing dated 28th May 1966, Exh. 9/1, the two partners in the firm of Unity Exporters agreed to sell their aforesaid plot for a consideration of Rs. 4.75 per square yard amounting to Rs. 72,460.00 to 'Messrs Rana Corporation of which Mst. Nasira Sultana was described as its proprietor and who is hereinafter referred to as the "purchaser". The entire sale consideration was paid to the sellers on the execution of the agreement and only such portion retained by the purchaser as was the balance due and payable by the sellers to the K. D. A. under the aforesaid allotment letter. In terms of the agreement the sellers executed an irrevocable general power of attorney in favour of Badruddin, the husband of the purchaser to enable the purchaser to enter into the possession of the plot, start construction thereon, pay the balance occupancy value to the K. D. A., to secure a regular lease deed in favour of the sellers and to convey and transfer the plot in favour of the purchaser or her nominee. Another Special Power of Attorney was also granted in favour of Badruddin by the sellers to enable the attorney to obtain the lease of the plot in favour of the sellers. On the same day the sellers handed over to the purchasers a letter addressed to the K. D. A. nominating the purchaser as their nominee/beneficiary in the event of their death. The purchaser was on the execution of the agreement handed over the original letter of allotment from K. D. A. and the original receipt of the first instalment paid by them. Following this agreement, on 9‑6‑1966, the purchaser paid a sum of Rs. 11,906.00 to the K. D. A. towards the second instalment in the name of the sellers. On 24‑6‑1966, the said Badruddin addressed a letter to the K. D. A, enclosing an attested copy of the power of attorney granted to him by the sellers with a request that future correspon?dence relating to the plot may be made directly with him. On 16‑10‑1966 an advertisement appeared in the daily "Dawn" under the signature of Mr. Khaliquzzaman, Advocate, purporting to act on behalf of one Kamran Industries who it was alleged had entered into art agreement with the sellers for the sale of the said plot, which the advertisement said, shall be completed if no objections were lodged within seven days. On 17‑10‑1966, the K. D. A. issued a letter of possession which was acknowledged by the Manager of the purchaser on behalf of the sellers and in pursuance of which possession was obtained by the Manager from the K. D. A. on 25th November 1966. On 2I‑10‑1966, the purchaser filed a suit against the seller, as well as Kamran Industries in the Court of IV Civil Judge First Class, Karachi, being Suit No. 413 of 1966 and obtained an interim injunction restraining the sellers from selling or otherwise transfering the said plot to Kamran Industries or any other person. The said Badruddin, husband of the purchaser died in the year 1969. It would appear that on 21st October 1966, the purchaser got published a notice in the daily "DAWN" in respect of her agreement with the sellers in response to which Habib Bank Ltd., hereinafter called the decree ?holder informed the purchaser that the plot in question had been attached by this Court on 23th October 1966, for a claim against the sellers for a total sum of Rs.37,144.20. On 3‑11‑1966, the purchaser filed an application under Order XXI, rule 58, C.P.C. on the ground that the plot was not liable to attachment and sold in execution of the decree obtained by Habib Bank Ltd. In the application, the purchaser also referred to her said agreement dated 28‑5‑1966 with the sellers and alleged that under it the sellers had completely divested, surrendered and relinquished all their rights, title and interest in the plot to the purchaser. This application was dismissed for default of the appearance of the purchaser on 24‑5‑1968. On 20‑1‑1969, the purchaser filed the present Suit No. 180 of 1969, under Order XXI, rule 63, C.P.C. The attached property, in the execution of the decree obtained by Habib Bank Ltd. was auctioned on 5‑3‑1969, in favour of Naseem Ahmed hereinafter referred to as the auction purchaser and confirmed by this Court on 28‑4‑1969. On 14‑5‑1969, the auction‑purchaser applied under Order XXI, rule 94, C.P.C. for issuance of sale certificate. On 3‑8‑1970 the purchaser filed suit for specific performance being Suit No. 372 of 1970 against the sellers, the decree‑holder and the auction‑purchaser. The two suits and the application under Order XXI, rule 94, C.P.C. filed by the auction‑purchaser were ordered to be heard together and consolidated issues filed on 9‑1‑1974, which read as follows:

"(1) Whether the plaintiff was in possession of the plot at the time of its attachment ?

(2) Whether the plaintiff has any right, title or interest in the plot?

(3) Whether the agreement for sale and power of attorney are inadmis?sible in evidence?

(4) Whether the agreement for sale was made with intent to defeat the claim of defendant No. 1 against defendants 2 to 4? If yes, its effect?

(5) Whether the interest held by defendants Nos. 2 to 4 in the plot in dispute was not liable to be attached and sold in execution of the decree against them? If so, what is its effect?

(6) Whether any temporary injunction was issued by the Court of VI Civil Judge, Karachi, restraining defendant No 2 from transferring the plot in suit? If so, what is its effect on the auction sale?

(7) Whether defendant No. 6 has purchased the plot in dispute in good faith at the Court auction which has been confirmed by the Hon'ble Court? If so, what is its effect?

(8) Whether the plaintiff has been negligent and guilty of laches? If she entitled to specific performance of the agreement?

(9) Whether the plaintiff has paid proper court‑fee in Suit No. 372 of 1970 ?

(10) Whether Suit No. 372 of 1970 is bad for non‑joinder of parties?

(11) Whether the plaintiff is entitled to damages? If so, to what extent and against whom?

(12) Whether Suit No. 372 of 1970 is barred by limitation?

(13) To what reliefs, if any, is the plaintiff entitled and against which of the defendants?"

2. Issues Nos. 2 and 5.‑These issues relate to Suit No. 180 of 1969 and may conveniently be dealt with together. Mr. Munawwar Abbas, the learned counsel for the purchaser referred to clauses 3, 6, 8, 9, 13, 14, 15 and 20 of the terms and conditions of allotment (Exh. 8/2) made by the K. D. A. its favour of the sellers and sought to argue that the sellers were mere licensees having no interest in the plot allotted to them. He further pointed out that on the date of attachment even the possession of the plot had not been delivered to the sellers and the second instalment of Rs. 14,906 was paid much later on 9th June 1966. The learned counsel particularly relied on clauses (15) and (20) of the allotment which read as follows :

"(15) The allottee till the execution of the lease, shall have no legal interest in the plot except that of a licensee to forwarding his applica?tion for the purpose of erecting the proposed building."

"(20) In the event of defaulting in the payment of fees, rates, taxes, charge, assessment, imposition and other outgoing in respect of the plot allotted and the building and structures thereon within 21st days next after the same shall have become due and payable (whether lawfully demanded or not) or committing breach of any of the conditions herein contained, the K. D. A. may by notice in writing, cancel the allotment of the plot immediately or at the expiration of the period specified in the notice whereupon the K. D. A. may enter into upon and retain possession of all buildings, structures, materials and things thereon for its absolute use and benefit but in such event, the K. D. A. may if it thinks fit, on after deducting all sums owing to it and expenses incidental to the sale and such other sums by way of liquidated damages as the K. D. A. may reasonably be estimated."

The aforesaid terms and conditions no doubt entitle the K. D. A. to terminate or cancel the allotment but not without cause and only in the event of a default committed by the allottee. The allotment is not a licence simpli?citer for the allottee has a right to be put in possession of the plot on A payment of second instalment, raise constructions thereon and on payment of the full occupancy value the K. D. A. was bound to grant a 99 years lease to the allottee. The allotment itself was transferable according to P. W.

1. Ferozuddin an Assistant Clerk in the K. D. A. Land Department on payment of Re. 1 per yard if request was made prior to lease and if made later on payment of a fixed fee of Rs. 25 only. No doubt that ‑the K. D. A. has by passage of time and non‑fulfilment of certain terms and conditions of the allotment has become entitled to cancel the allotment in favour of the sellers and resume the possession of the plot but significantly they have taken no such action and in the words of Mr. Shamsul Haq Memon, the learned counsel, they are keeping their option open. In these circumstances it cannot be said that the allotment in favour of the seller does not create any right or interest in favour of the allottee. Moreover, I am unable to appreciate this argument on behalf of the purchaser for the question then would be; what is it that she had agreed to purchase under the agreement dated 28th May, 1966 and of which she was seeking specific performance in Suit No. 372 of 1970? Issue No. 2 is, therefore, answered in the affirmative.

3. Issue No. 5.‑In support of this issue Mr. Munawwar Abbas, the learned counsel for the purchaser contended that the plot was not attachable under section 60 of the C. P. C. as it was not saleable property and the seller had no disposing power over the same. For this purpose the learned counsel invited my attention to the aforesaid terms and conditions of the allotment and went on to argue that as on the date of the attachment of the plot the allottee had no disposing power over the same. There is no specific prohibition against the transfer of the allotment either before or after the lease in favour of the allottee and oral evidence, referred to above, is that the allotment was transferable both before and after the lease. It cannot, therefore, be said that the property attached was not saleable property. Even if I was to read the terms and conditions of allotment as containing prohibition against transfer by the allottee, I am of the view that the word "saleable" occurring in section 60, C.P.C. has no reference to property which is not transferable by an agreement between parties to a transaction. Mr. Munawar Abas referred to several reported decisions, in which property was held not saleable as the owner had no power over its disposal. In all these cases except one such a limitation was imposed by statute. In A I R 1931 Pat. 364 the prohibition against sale was contained in Chotta Nagpur Encumbered Estates Act, 1896 under section 12‑A of which sale of property attached was void without the sanction of the Commissioner. In A I R 1931 Cal. 305 shares in a cooperative society were attached and held to be not saleable under the Cooperative Societies Act, 1925; In A I R 1936 Cal. 694 the amount standing to the credit of an employee in a provident fund was so sought to be attached but was held to be exempt under clause (k) of section 60, C.P.C., and section (3) of the Provident Fund Act, 1925. In 1950 Mad. 402 attachment was sought to be executed on the amount of Provident Fund and vacated for the same reason. The only case in which the property not transferable by agreement between the parties was held to be not to be "saleable" is one reported in A I R 1931 Rang.

1. In this case, however, the learned Judges appear to proceed on the assumption that it was not `saleable' for there is no discussion and no contention to the contrary was raised. In this view of the matter, issue No. 5 is decided against the purchaser.

4. Issues Nos. 1, 3, 4, 6, 9 and 10.‑These issues were not pressed at the trial except issue No. 3 for the documents referred therein were, when produced, objected to as inadmissible but subsequently at the hearing of the arguments nothing was stated in its support. These issues have, therefore, been dropped and/or abandoned by the parties.

Issue No. 12. The position taken up by the sellers in their written statement in Suit No. 180/1969 is the denial of the agreement with the purchaser. In the subsequent suit for specific performance, the execution of the agreement is not denied. It is however alleged that this agreement was with one Messrs Bana Corporation and not with the plaintiff and the plaintiff had therefore, no locus standi to file the suit. On behalf of the contesting defendants, the decree‑holder and the auction‑purchaser, the contention was that the suit was barred under Article 113 of the Limitation Act for the agreement did not fix any date for the performance but the purchaser had notice that the performance was refused three years prior to the filing of the suit. No such specific assertion of refusal is contained in their written statement. However, to my mind, the agreement does fix a date for the performance though no date has been expressed by calendar. This date of performance, can be ascertained with reference to certain events stated in the agreement. In para. 3 of the agreement, the sellers were to secure through their attorney execution of a regular lease deed in their favour after payment of the balance of the occupancy charges, which were, under the conditions of allotment, payable in instalments, namely, the first instalment of 25 % alongwith the application for allotment, which was duly paid by the sellers, the second instalment before the possession was handed over, which was paid by the purchaser on behalf of the sellers on 9th of June, 1966 and the balance was payable within one year from the date of the possession, which was actually delivered on 25‑11‑1966 to be followed by a 99 years lease in favour of the allottee. Under the agreement between the sellers and the purchaser, the sellers' attorney was to first obtain the lease from the K. D. A. and thereafter convey the plot to the purchaser. It will, therefore, follow that time for performance of the agreement by the sellers in favour of the purchaser by executing a conveyance was postponed until the lease was obtained by the sellers in their favour which would not be earlier than 24‑11‑1967. It will therefore follow that the parties were governed by the first part of Article 113, and the commencing date for the purpose of limitation never arrived for the sellers have not secured as yet the lease from the K.D.A. On behalf of the decree‑holder and the auction‑purchaser, it was, however, contended that the sellers refused to perform their contract for they had quite clearly repudiated the contract as far back as 16‑10‑66 when they allegedly entered into agreement for sale of this plot in favour of one Kamran Industries. I will presently deal with this aspect of the matter in another context. For the present it will suffice to say that purchaser had notwithstanding the alleged breach or repudiation by the sellers the option not to treat the contract as rescinded and await until the time for the performance of the agreement arrived. Assuming that I am wrong in my view that time for performance was fixed under the agreement, I find that the creditor and the auction‑purchaser have failed to prove that the sellers had refused performance of the contract three years prior to the filing of the present suit.

In support of their contention learned counsel invited my attention to the publication in the DAWN daily dated 16‑10‑1966 on behalf of Kamran Industries in which it was alleged that they had entered into an agreement with the sellers for the purchase of this plot which will be completed if no objections were received within the period specified therein. This publication by itself does not prove that the sellers had entered into any such agreement but only that one Kamran Industries have claimed to have entered Into such an agreement. Significantly the purchaser was neither confronted with the publication nor was it put to her that any such agreement had been arrived at. Faced with this situation the learned counsel then invited my attention to the suit filed by the purchaser for a declaration and injunction against the sellers and this Kamran Industries and the ad Interim injunction obtained by them restraining the sellers from selling the property to Kamran Industries. The learned counsel have not brought on record the pleadings of that suit to enable me to come to the conclusion that it was the case of the sellers that any such agreement had in fact been entered into or that it was a mere case of apprehension on the part of the purchaser which led her to file the suit and obtained an ad interim injunction. Reliance was next placed on paragraph 13 of the plaint which reads as follows:

"That defendant No. 1 filed his written statement in the above‑noted suit wherein be admitted and acknowledged the execution of the agreement for sale in favour of the plaintiff and the receipt of Rs. 26,45.50 as part of sale consideration. Defendant No. 1 also expressed his readiness and willingness to execute the sale deed in favour of the plaintiff but demanded the entire sale consideration for himself against the terms of the agreement under which the balance was to be retained by the plaintiff for payment to K. D. A."

The aforesaid paragraph at best refers to an unlawful demand made by the sellers though they were ready and willing to execute the sale deed in favour of the purchaser. This paragraph does not by itself demonstrate that the sellers had repudiated the contract or had refused to perform it in its entirety. The burden was on the contesting defendants to prove notice to the purchaser of the sellers' refusal to perform the agreement in its entirety three years prior to the filing of the suit. Such refusal at its best can only be inferred from the failure of the sellers to reply to the purchaser's legal notice in April 1970 and the written statement in Suit No. 180 of 1969 in which they denied the agreement and the present suit which has been filed within three years from the date thereof is not barred by limitation.

7. Issue No. 8.‑On behalf of the decree‑holder and the auction purchaser it was contended that relief for specific performance is discretionary and although the delay may not amount to be a bar under the statute of limitation the purchaser has become disentitled to this discretionary relief on account of latches. The argument was teat the agreement was entered into as far back as 28‑5‑1966 and the present suit was not filed until August 1970. In considering the conduct of the purchaser I cannot overlook the fact that she is a lady who had lost her husband after prolonged illness in the year 1969. It may also be observed that there was no inaction on the part of the lady for at the time of the Kabala Agreement with the sellers she obtained from them an irrevocable power of attorney in favour of her husband and another special power of attorney in her favour to enable completion of the sale. She paid the second instalment to the K. D. A. and also obtained possession of the plot and when the Kamran Industries notice appeared in the press on 16‑10‑1966, she immediately filed a suit for a declara?tion and injunction in the lower Court. She got the publication made in the Press regarding her agreement with the sellers on 24‑10‑1966 and when she learnt from reply made by the counsel for the decree‑holder that plot had been attached she made an application under Order XXI, rule 58, C. P. C. which remained pending until May 1966, when it was dismissed for default of her appearance. Thereafter on 20‑1‑1969 she filed Suit No. 180/69 under Order XXI, rule 63 which was followed by the present suit on 3‑8‑1970, following her husband's demise in the year 149. It cannot therefore, be said that the purchaser had either waived or abundoned her rights. This issue, is, therefore, answered in favour of the purchaser plaintiff.

8. Issue No. 7.‑On behalf of the auction‑purchaser it is contended that lie was a bona fide purchaser for value of the property without notice at the Court auction held on 5‑3‑69 and accordingly the agreement between the sellers and the purchaser cannot be specifically enforced against him. It was conceded by Mr. Munawar Abbas that the auction purchaser was purchaser for value and that he had no express notice of the agreement between the sellers and the purchaser. Mr. Munawar Abbas, however, contended that the auction purchaser bad constructive notice of this agreement for the auction purchaser was aware of the Court proceedings in which the property was ordered to be put to auction and if he had made further enquiries, he would have become aware of prior agreement between the sellers and the purchaser for the purchaser's application under Order XXI, rule 58, C. P. C. made a mention of this agreement. The burden was on the auction purchaser to prove that he had no notice. In his cross‑examination the auction purchaser admitted that he came to the Court to confirm the notice of auction, obtained auction pamphlet in which mention was made of the proceedings in which the auction was held. He went on to state that he was quite satisfied that the Court was auctioning the plot and, therefore, did not examine any file relating to the auction, and that for the same reason he did not make any enquiry from the K. D. A. as regards the lease of the plot. To my mind the auction purchaser should have been all the more cautious for unlike private sale, in sales by the Court no warranty of title is given. He had the opportunity of ascertaining the true facts but he was quite prepared to go into a risky bargain. Had he taken inspection of the Court file he would have been put to enquiry as regards the purchaser's claim against the sellers. It cannot, therefore, be said that the auction purchaser was a transferee without notice of the original contract within the meaning of exception in section 27‑E of the Specific Relief Act. This issue is, therefore, answered against the auction purchaser.

9. Issue Nos. 11 and 13.‑Mr. J. H. Rahimtoola, the learned counsel for the decree‑holder contended that the sellers were made licensee of this plot who had admittedly committed &faults in payment of the occupancy value and having thus no right, title or interest in the plot, the Court will not in its discretion order specific performance of a contract relating to such a property. I have already dealt with this aspect of the matter while deciding Issue No. 2 and in my view the allotment in favour of the sellers did create some interest in their favour. if it was otherwise, the question very much? would be what was the right, title and interest of the sellers which the decree holder sought to attach in execution No. 76 of 1966? Reliance was placed for this purpose on a decision reported as Kassamali v. Mst. Shakra Begum (P L D 1968 Kar. 307). In this case the learned Single Judge of this Court in his discre?tion refused to grant a decree for specific performance of a contract for sale of land of which the defendant was an allottee on the ground that he was merely licensee of the land which licence was revocable at the will of the licensor, thus making decree for specific performance valueless and ineffective. The learned Judge came to the conclusion that the transfer of the suit land in favour of the plaintiff was conditional upon his becoming a member of the Babadur Yar Jung Co‑operative Housing Society in which the suit land was situate and permission had to be obtained from the President of Pakistan and the Karachi Co‑operative Housing Societies Union Ltd., and the said Bahadur Yar Jung Co‑operative Housing Society for transfer of the plot in favour of the plaintiff, and since these matters were dependent upon volition of third parties, decree for specific performance in the absence of evidence that such concurrence was forthcoming would be fruitless. It may be noted that these grounds for refusal to grant the decree sought did not find any mention in the written statement of the defendant for these were allowed to be raised at the trial only. The plaintiff had, therefore, not opportunity to lead any evidence that such concurrence was not forthcoming. In any event the plaintiff in that case was quite prepared to accept transfer of such right, title and interest as may have been possessed by the defendant and I am with great respect to the learned Judge wholly unable to see reasonableness of the exercise of discretion against the grant of decree for specific performance against a defendant who had received full consideration, executed all and several documents including an irrevocable power of attorney to enable the plaintiff to have the plot transferred in his name either as purchaser or on behalf of the seller defendants. Such a denial would in fact confer undue advantage on a recalcitrant defendant. In the present case the sellers have received the full price under the agreement and also put the purchaser in possession of the property. In these circumstances I do not think that it will be proper exercise of my discretion to refuse to the purchaser a decree for specific performance.

9. Lastly, it was contended by Mr. Dastagir the learned counsel for the auction purchaser that the suit for specific performance was barred under Order 11, rule 2, C. P. C. by reason of the failure of the purchaser to sue for specific performance in her earlier suit filed in the lower Court for declara?tion, injunction only. At the time when the said suit was filed the purchaser had an irrevocable power of attorney from the sellers in favour of her nominee under which she could not only obtain the lease from the K. D. A. on behalf of the sellers but also a conveyance registered in her favour. This power of attorney was never revoked by the sellers and the necessity for filing the present suit for specific performance arose only on account of the demise of the donee of the power of attorney subsequent to the previous suit. In the circumstances the purchaser rightly confined her remedy for a declaration and injunction in that suit for her apprehension then was that the sellers were negotiating sale of the plot with Kamran Industries which must immediately be prevented.

10. In view of my finding on Issues Nos. 2 and 5, the Suit No. 180 of 1969 is dismissed with cost. In view of my finding on the remaining issues Suit No. 372 of 1970 is decreed for specific performance with cost. In so far as the auction purchasers' application (Misc. No. 94/ 1959) for issue of sales certificate under Order XXI, rule 94, C. P. C. is concerned no purpose will be served in its grant for consideration having failed the auction purchaser is entitled to the refund of the auction price deposited by him in Court.

K. B. A. ???????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? ????????????????? Order accordingly.