NASIM AHMAD KHAN Versus IRSHAD ALI
This petition for special leave to appeal challenges a Lahore High Court order that set aside a decision by the Deputy Settlement Commissioner regarding an agreement of association between the parties. The dispute concerns a double-storey house in Sant Nagar, Lahore, originally transferred to respondent Irshad Ali. Irshad Ali subsequently entered into an agreement of association with the petitioners' predecessor, Niaz Ahmad Khan, to transfer half the house via vertical partition in exchange for payment of the transfer price. Following litigation involving a third party, Abdur Rauf, the ground floor was transferred to the latter, leaving only the upper floor for the original parties. The Deputy Settlement Commissioner later accepted the association agreement, directing that both parties share the upper floor. The High Court, however, declared this order without lawful authority, reasoning that the transfer of the ground floor to a third party had destroyed the material basis of the agreement, rendering it unenforceable. The Supreme Court, upon review, found the High Court's reasoning required further examination and granted leave to appeal to determine the validity of the Commissioner's order.
- Can an agreement of association for the transfer of property be enforced when the underlying subject matter has been partially alienated to a third party?
- Does the transfer of a portion of a property to a third party render an existing agreement of association regarding that property legally impossible to perform?
ORDER
SAAD SAOOD JAN, J.‑ This is a petition for special leave to appeal from the order dated 4‑7‑84 of the Lahore High Court declaring, in writ jurisdiction, the order dated 31‑7‑1977 of the Deputy Settlement Commissioner to be without lawful authority and of no legal effect:
2. The dispute between the parties relates to a double storey house situate in Sant Nagar, Lahore. The whole house was transferred on 15‑10‑65 to Irshad Ali, respondent No.1. After the transfer, Irshad Ali entered into an agreement of association with Niaz Ahmad Khan, predecessor‑in‑interest of the petitioners. Under the agreement, Niaz Ahmad Khan undertook to pay the entire transfer price partly in cash and partly by way of adjustment of his compensation book and in return thereof Irshad Ali agreed to transfer half of the house to him by a vertical partition thereof. The agreement was filed before the Deputy Settlement Commissioner who recorded the statements of the parties. However, the agreement was not immediately accepted as another occupant of the house, namely, Abdur Rauf, had challenged the transfer of the whole house to Irshad Ali. Subsequently, Abdur Rauf succeeded in getting the ground floor transferred in his favour. Thus, Irshad Ali was left only with the upper floor. The matter of transfer was agitated by both Irshad Ali and Niaz Ahmad right up to the High Court but without any success.
3. After the dispute relating to the transfer of the house had been finally settled, a controversy arose between Irshad Ali and Niaz Ahmad over the agreement of association. By an order dated 31‑7‑77 the Deputy Settlement Commissioner accepted the association agreement and directed that both Irshad Ali and Niaz Ahmad were entitled to share the upper floor of the house in terms of the agreement. Irshad Ali invoked the writ jurisdiction of the High Court to call in question the legality of the order of the Deputy Settlement Commissioner. A learned Single Judge in the High Court accepted the writ petition and declared the order of the Deputy Settlement Commissioner to be without lawful authority and of no legal effect. In making this order, the learned Single Judge relied upon the terms of the agreement of association and also.the fact that with the transfer of the ground floor to Abdur Rauf, the material basis of the agreement of association had disappeared and that it was no longer possible to give effect to the same.
4. After hearing the learned counsel for the petitioner as well as Irshad Ali, we are of the opinion that the reasons given by the learned Single Judge in support of this order need examination. Leave to appeal is granted. Security for costs in the sum of Rs.2,000. The appeal may be made ready for hearing on the present record with permission to the parties to file additional documents, if any, within two months.
M.A.K./N‑181/S Leave granted.