AZIZUL HASSAN Versus SHAHIDA AHMED ASHRAF

1. This suit is for specific performance of contract. The case of the plaintiff is that the defendant. being owner of the. lease‑hold rights in plot of, land bearing‑ Survey No.217/E, Block No.2, P.E.C.H. Society, Karachi, consisting of 4 residential units/building constructed thereon (hereinafter referred to as the: suit property) entered into a Sale Agreement with the plaintiff on 5‑4‑1975 whereby she agreed to sell the suit property for a cash consideration of Rs.75,000. It is urged by the plaintiff that at the time of execution of sale agreement a sum of Rs.1,000 was paid by the plaintiff to the defendant which amount was acknowledged by the defendant while remaining Rs.74,000 was to be paid at the tine of execution of sale‑deed before the Sub- Registrar. The plaintiff has further asserted that in addition to the above amount he also paid a sure of Rs.25,000 to the defendant through her husband as underhand payment which was not reflected in the sale agreement. The contention of the plaintiff further is that since the defendant could not get the lease deed executed in her favour, therefore, sale‑deed in favour of the plaintiff could not be executed by 30‑6‑1975, the time mentioned in the agreement but the same was extended firstly upto 30‑8‑1975 and thereafter upto 3()‑9‑1975. The plaintiff's contention further is that as the defendant could not get the sale‑deed executed in her favour, the plaintiff at her request got the same executed on her favour on 3‑9‑7975 by incurring the expenditure to the tune of Rs.5,561 and had also arranged for loan from United Bank Ltd. to the extent of Rs.50,000 to finalize the transaction and handed over all the relevant documents to the Bank. The plaintiff thereafter made various requests to the defendant to execute the sale‑deed but she avoided to so and ultimately on 23‑9‑1975 the plaintiff sent phonogram to the defendant which was replied by' the defendant on 27‑9‑1975 by telegram asking the plaintiff to pay the capital gain tax. It is also alleged that the plaintiff then filed the Civil Suit No.2119/75 for injunction in the Court of XVth Senior Civil Judge, Karachi in which the defendant was served and also filed a counter‑affidavit but on account of formal defect and also for want of pecuniary jurisdiction the suit was withdrawn with permission to file fresh suit and thus the plaintiff filed this suit on 30‑1‑1976. The plaintiff also claims to be ready and willing to pay the balance amount and get the sale‑deed executed in his favour at all material time. The defendant contested the suit and filed her written statement wherein she has admitted the execution of sale agreement and receipt of an advance amount of Rs.1,000. However, she denied that any underhand payment of Rs.25,000 was made to her or her husband. She also denied if any expenditures were incurred by the plaintiff amounting to Rs.5,561 for getting sale‑deed executed in favour of the present defendant. She claims that she had always been ready and willing to perform her part of the contract while the plaintiff, according to defendant, was not prepared to get the deed of conveyance registered as he had no money. On the above pleadings of the parties the following issues were framed:‑‑‑

(1) Whether the plaintiff or the defendant failed to perform his or her part of contract in terms of Sale Agreement, dated 5th April, 1975?

(2) What amount the plaintiff paid to the defendant towards the consideration money?

(3) Whether the plaintiff incurred expenses of Rs.5,561 in getting the Lease Deed executed and registered in favour of the defendant in respect of the plot in dispute 7, and whether the plaintiff is entitled to adjust the same against the consideration money?

(4) To what relief, if any, the plaintiff is entitled against the defendant in the above suit?

(5) What should the decree be?

2. The plaintiff examined himself and one Mansoor Ahmad the Manager, UBL, Preedy Street Branch, Karachi, while the defendant examined her husband and attorney Ahmed Ashraf. The plaintiff and his witness produced number of documents.

3. ISSUE NO.1 .

4. On this issue Mr. Khaliq Humayoon, learned counsel for the defendant has argued that time was essence of the contract as is evident from the Sale Agreement Exh.5/1. He has further submitted that the plaintiff has failed to show that he had taken any steps towards the completion of the transaction as he has not proved that he had obtained any such certificate nor he got draft deed of conveyance prepared. It is also argued by the learned counsel for the defendant that the plaintiff had not even taken date and time from the Sub-Registrar for the purposes of presentation and registration of the sale‑deed. The learned counsel has vehemently argued that the defendant could not execute the sale‑deed as both, the lease deed in favour of the defendant and sale agreement were in possession of the plaintiff which he had deposited with the Bank. As against this learned counsel for the plaintiff has submitted that the time was not essence of the contract which fact is proved from the admission of the defendant that time was twice extended. He has further submitted that defendant had to get the lease deed in her favour executed by the P.E.C.H.S. Ltd., which she could not get done, and therefore, the same was obtained on her behalf by the plaintiff finally on 3‑9‑1975 and, therefore, the time was extended. Learned counsel for the plaintiff has further submitted that the plaintiff had all along been ready and prepared to perform his part of contract which is supported by the fact that he incurred the expenses of Rs.5,561 in connection with getting lease deed registered in favour of the defendant and also arranged for loan of Rs.50,000 from the Bank and lastly he sent a phonogram to the defendant on 23‑9‑1975, well within stipulated period for execution of the sale‑deed but the defendant by her reply, dated 27‑9‑1975 refused, to do so unless capital gain tax was paid by the plaintiff. Both the learned counsel placed reliance on the case law.

5. I have considered the submissions of the learned counsel. The first point which requires consideration is whether the time was essence of the contract. A perusal of agreement of sale (Exh.5/1) shows that the transaction had to be finalised by 30‑6‑1975. There are two endorsements at the bottom of the sale-deed which show that the time was extended upto 30‑8‑1975 and then upto 30‑9‑1975. This by itself would show that time was not essence of the contract as no other reasons have been assigned. The learned counsel for the defendant in support of his contention that the time was essence of contract has placed reliance on following cases:‑‑‑

(1) Ghulam Nabi and others v. Seth Muhammad Yaqoob and others PLD 1983 SC 344; (2) Syed Muhammad Salim v. Ashfaq Ahmed Khan 1989 CLC 1883 and (3) Ahmed Bakhsh v. Mst. Zeb Ellahi PLD 1981 BJ. 60.

6. I am afraid from of these decisions helps the case of the defendant. In the above cited cases of the Hon'ble Supreme Court, their lordships have observed that in case of contract for sale of immovable property under section 55 of Contract Act time is not ordinarily considered as being essence of contract but the intention of the parties is to be considered and it is to be gathered from the terms of contract and facts and circumstances of case if parties had actual intended the time to be essence of the contract. The similar view was taken in the case of Ahmed Bakhsh v. Mst. Zeb Ellahi and in case of S.M. Salim v. Ashfaq Ahmed Khan, a learned Single Judge of this Court had observed that where a contract of sale involves reciprocal premises as contemplated by section 54 of the Contract Act and one of them promises perfecting the title of the seller then it is for him to show and prove if contradicted, that he was at all material times ready and willing to perform his part of obligation and that by his conduct, express or implied he did not lead the other party of the contract of performance to believe that he has abandoned the contract. In this case also it was observed that it cannot be adduced from the conduct of the parties, nature of transaction or from overall circumstances of the case if the time was intended to be essence of contract. In the light of above case law I will examine the evidence led by the parties. The perusal of the agreement, (Exh.5/1) shows that intention of the parties was the sale of the suit property by the defendant to the plaintiff for sum of Rs:75,000 out of which Rs.1,000 were paid to her at the time of execution of agreement of sale. The agreement also shows that the transaction was to be finalised by 30‑6‑1975 which period was extended twice i.e. till 30‑8‑1975 and 30‑9‑1975. The evidence shows that obviously reason for extension of this time was that there was not lease deed in favour of the present defendant. The lease deed has been produced on record as Exh.5/2 which shows that it was written on 15‑8‑1975 and was presented for registration on 3‑9‑1975 on which date it was registered. The plaintiff's contention is that ‑the defendant could not get this lease deed executed, therefore, the plaintiff on behalf of the defendant has got the needful done. In support of his contention he has produced the challan of K.M.C. Exh.5/6 being composition fee in respect of the suit property, another challan of State Bank of Pakistan (Exh.5/7) being ground rent for the suit property and 4 challans of HBL (Exhs.5/8 to 5/11) being for lease money, water, conservancy, maintenance and surcharge etc. for the suit property. He has also produced challan of Standard Bank Ltd., as Exh.5/12 for the suit property. These documents show that these payments were made during the period of May, June and July 1975. This fact further finds support from the cross‑examination of defendant's husband and attorney Ahmed Ashraf who has stated that "it is correct that the lease of property in question was made in the name of my wife on account of efforts made by the plaintiff and all the expenses were borne by the plaintiff'. However, at a later stage he has stated " it is not in my knowledge if the plaintiff had spent the sum of Rs.5,561 as expenses for getting sub‑lease transferred in the name of my wife " This shows that the quantum of amount is not admitted for want of knowledge but at the same time it is admitted that the sub‑lease in favour of the defendant was got executed through the efforts of the plaintiff at the expenses incurred by the plaintiff. Now the plaintiff on getting the said lease deed registered on 3‑9‑1.975 claims to have made oral requests to be defendant for execution of the sale‑deed and ultimately on 23‑9‑1975, before the stipulated period 30‑9‑1975 the plaintiff sent a phonogram to the defendant to execute the sale‑deed but in reply the defendant through telegram (Exh.5/5) asked him to first arrange for payment of capital gain tax and thereafter the sale‑deed shall be executed. It is a simple refusal or causing hindrance on the part of the defendant for finalisation of the transaction. Mr. Khalid Humayun, learned counsel for the defendant has submitted that as per the condition No.4 of the sale agreement the vendor agreed to clear all dues payable to K.M.C., K.DA. Excise and Taxation Department, Water/Electric/ Gas charges etc. while as per the condition No.5 all the expenses for getting the sale‑deed such as stamps duty, registration and mutation fee were to be paid by the Vendee. This itself shows that the plaintiff was not liable to pay any gain tax but it was the defendant who was required to pay capital gain tax. At the relevant time the payment of capital gain tax was pre‑requisite condition for registration of sale‑deed and thus it cannot be said that the defendant could execute the sale‑deed unless she had obtained capital gain tax clearance certificate. This agreement of sale, therefore, implies and provides that the defendant (Vendor) had to perfect her title and bring the same in such condition where she could be able to execute the sale‑deed in favour of the, plaintiff. Reliance may be placed on the above cited case Syed Muhammad Salim v. Ashfaq Ahmed Khan. In the present case, as observed above the defendant had deliberately avoided to pay capital gain tax and, therefore, by her conduct she gave an impression to the plaintiff that she had backed out from the contract. The case of the plaintiff finds further support from the evidence of the Bank Manager who has stated that on 15‑7‑1975 a loan of Rs.50,000 was sanctioned in favour of the present plaintiff. The loan sanction advice has been produced by the plaintiff as Exh.5/3. This witness has also produced copy of the application of the plaintiff, dated 10‑7‑1975 by which he had applied for the said loan. In this application he has clearly mentioned the reasons that he required the loan for purchase of the suit property and also that at that time he had a balance of Rs.23,495 with the Bank. This clearly implies the intention of the plaintiff that he had made all the preparations for finalisation of the transaction and had money available with him. I would, therefore, decide this issue in favour of plaintiff holding that the defendant had failed to perform her part of contract in terms of the sale agreement, dated 5‑4‑1975.

7. ISSUE N0.2.

8. The agreement of sale shows that the amount of Rs.1,000 was paid by the plaintiff to the defendant. There is no other evidence to support the oral words of the plaintiff that he had made underhand payment Rs.25,000. Under these circumstances I will hold that the plaintiff had paid only Rs.1.000 to the defendant towards consideration money.

9. ISSUE N0.3.

10. As observed and discussed in issue No.1, it is admitted by the defendant's husband and attorney that the lease was executed m favour of the defendant due to the efforts of the plaintiff and by expenses incurred by the plaintiff. The plaintiff has specifically stated that he has spent sum of Rs.5,561 over the said expenses. However, the amount of challans if totalled comes to' Rs.754.50. I would, therefore, hold that the plaintiff has incurred expenses of Rs.754.50 and is entitled to adjustment of the said amount Rs.754.50 in addition to Rs.1,000 paid by him as advance money.

11. ISSUE N0.4.

12. In view of the observation on issues Nos.1 to 3 this issue is decided in favour of the plaintiff to the effect that he is entitled to relief of the specific performance as provided under section 12 of the Specific Relief Act and that no adequate compensation in terms of money can be granted as further provided under proviso to section 12 of the Specific Relief Act.

13. ISSUE N0.5.

14. In view of the above findings, I decree the suit of the plaintiff for specific performance, directing the defendant to execute the sale‑deed in favour of the plaintiff who shall pay the sale consideration after adjustment of the amount of Rs.1,000 paid by him as advance money and Rs.754.50, the expenses incurred by him on execution of the lease deed in favour of the defendant. The plaintiff will accordingly pay the balance of Rs.73,265.50 to the defendant. In case of failure on account of the defendant the Nazir of this Court will do the needful. The suit of the plaintiff, therefore, stands decreed with costs.

15. AA./A‑1097/K Suit decreed.