MUHAMMAD JAVED Versus AREZ SHER

MUHAMMAD KHALID MEHMOOD KHAN, J.--- The appellant filed a suit for possession through specific performance of an agreement to sell against the respondent, claiming that on 9.5.2003 the respondent through his general attorney namely Maqsood Ahmed (hereinafter referred to as ATTORNEY) entered into an agreement to sell for the sale of property detailed in paragraph No.1 of the plaint (hereinafter referred to as the SUIT PROPERTY) against consideration of Rs.99,50,000/-, out of the agreed sale consideration the respondent received Rs.500,000/- and balance amount was payable on or before 15.11.2003 on execution of transfer documents in favour of appellant. The appellant on 15.11.2003 appeared before the District Housing and Physical Planning Department, Gujranwala with the balance consideration of Rs.94,50,000/- but the respondent failed to appear, hence the transfer documents/sale deed was not executed. In the month of January-2004 the appellant received a notice from the attorney informing that the appellant has failed to pay the balance amount in terms of agreement to sell dated 09.5.2003 on due date and as such the agreement to sell stand cancelled. The appellant thus filed a suit for possession through specific performance of an agreement. The attorney and the principal both filed two separate written statements. The attorney while filing the written statement has admitted the execution of agreement to sell and receipt of Rs.500,000/- but claimed that it is the appellant who failed to perform his part of agreement. The principal Arez Sher claimed that the agreement to sell is based on fraud and misrepresentation, however he admitted that he appointed his father Maqsood Ahmad as his general attorney vide document registered on 17.9.1984. The attorney with the consent and knowledge of his other sons transferred the property in dispute on 06.7.2002 in the name of respondent/principal. Hence, after the transfer of property in the name of principal the document of attorney ceased to exist. The agreement to sell is an outcome of collusion between Maqsood Ahmad and the appellant. The agreement to sell is a bogus and fraudulent document. On the day of execution of agreement to sell Maqsood Ahmad was not the respondent's attorney. The learned trial court, out of divergent pleadings of the parties, framed the following issues:-

" ISSUES: i. Whether father of the defendant having been authorized and empowered by general power of attorney dated 17.9.1984 was legally competent to enter into an agreement to sell in respect of the property in question on 09.05.2003 for a total consideration of Rs.99,50,000/- and received a sum of Rs.5,00,000/- as earnest money, if so, its effect ? OPP ii. If issue No.1 is proved in affirmative, whether the plaintiff is entitled to a decree for possession through specific performance of alleged agreement to sell? OPP iii. Whether the plaintiff has been willing and ready to perform his part of the contract, if so, its effect? OPP iv. Whether the plaintiff has no cause of action to bring this suit? OPD v. Whether the plaintiff has not come to this court with clean hands?OPD vi. Whether the present suit is collusive between the plaintiff and father of the defendant? OPD vii. Whether the alleged agreement to sell is based on fraud and deception to deprive the plaintiff of his valuable property? OPD viii. Relief".

2. Both the parties adduced their respective evidence and the learned trial court vide impugned judgment and decree dated 04.6.2009 dismissed the suit, hence the appeal.

3. Learned counsel for appellant submits that attorney Maqsood Ahmad appeared as C.W-1 and categorically admitted the execution of agreement to sell and receipt of earnest money. The general power of attorney available on record specifically finds mentioned that attorney was having specific authority to sell the existing and all future properties of the principal. Learned counsel submits that the finding of learned trial court that the attorney has not made the payment of earnest money to principal, is against law. If the amount of earnest money is not paid, it is the matter between the principal and the attorney and the appellant has nothing to do with the alleged non-payment. The learned trial court has fallen in error while holding that the attorney has not taken permission from the respondent for sale of property. It is an admitted fact on record that Maqsood Ahmad remained the attorney of respondent and his attorney was revoked after the institution of the suit. All acts as to the transfer of property in the name of appellant were performed by the attorney on the basis of document of attorney and as such the findings of learned trial court are based on misreading and non reading of record. Learned counsel for appellant has relied on Bashir Ahmed v. Muhammad Luqman (1999 SCMR 378), Sami Ul Haq v. Dr. Maqbool Hussain Butt and others (2001 SCMR 1053), Karim Nawaz and another v. Habib Ullah Khan (2013 SCMR 1408), Muhammad Anwar v. Muhammad Aslam and others (2012 SCMR 345), Abdul Jabbar through L.Rs. and others v. Abdullah through L.Rs. and others (2006 SCMR 1541), Messrs Islamabad Farming Cooperative Society and others v. Ghulam Abbas Khan and others (2011 SCMR 153), Mst. Shabana Irfan v. Muhammad Shafi Khan and others (2009 SCMR 40) and Muhammad Suleman v. Rasheeda Bibi and 7 others (2012 CLC 79).

4. Learned counsel for respondent submits that respondent executed power of attorney before acquiring the proprietary rights of the suit property, hence the power of attorney is useless document unless ratified by the respondent/principal. The attorney was not having authority to enter into agreement to sell. Learned trial court has rightly held that the attorney has failed to pay the earnest money to the principal. The decree in a suit for specific performance is discretionary, even if the agreement is proved the court is not bound to pass a decree on equitable consideration. Learned counsel submits that the attorney has not taken permission from the principal for entering into agreement to sell. Learned counsel for respondent supports the impugned judgment and decree and relied on Jameel Ahmad Paracha v. Mst. Shireen Gul (2010 SCMR 470), Imam Din and 4 others v. Bashir Ahmed and 10 others (PLD 2005 Supreme Court 418), Satyanarayan Amolakchand Bhut v. Vithal Narayan Jamdar (AIR 1959 Bombay 452 (V 46 C 132), Unair Ali Khan and others v. Faiz Rasool and others (PLD 2013 Supreme Court 190), Muhammad Ghafoor v. Mst. Munawar Shahzadi and another (2007 MLD 264), Mst. Basri through L.Rs and others v. Abdul Hamid through L.Rs. and others (1996 MLD 1123), Messrs M.A Majeed Khan through Proprietor v. Karachi Water and Sewerage Board through Chairman and another (PLD 2006 Karachi 168), Muhammad Sharif and others v. Nabi Bakhsh and others (2012 SCMR 900) and Muhammad Ashraf v. Basara and 6 others (2007 YLR 2808).

5. We have heard the learned counsel for the parties and gone through the record.

6. It is an admitted fact that respondent Arez Sher on 17.9.1984 along with his two brothers Flak Sher and Amjad Ali appointed their real father Maqsood Ahmad their general attorney with the power to sell, mortgage, exchange, gift and specific performance of agreement, etc. of the property No.248 Satellite Town, Gujranwala and all other properties presently in their name in Pakistan and the properties which become their ownership in future. The three principals were allotted the suit property through an agreement to sell dated 26.7.1994 (page 55 of LCR), the transferee through their attorney filed an application with the Housing and Physical Planning Department Gujranwala requesting that share of Falek Sher and Amjad Ali be transferred in the name of Arez Sher, the Housing and Physical Planning department accepted the request of attorney on 06.7.2002 vide Ex.D-2. After that the Housing and Physical planning department executed an agreement to sell in favour of respondent Arez Sher on 04.7.2002 Exh.D-3. On 8.3.2003 the owner department executed sale deed Exh.P-4 in favour of respondent through his General attorney Maqsood Ahmed. It is an admitted fact on record that document of power of attorney Ex.P-1 in favour of Maqsood Ahmed remain valid till 22.1.2004, when the respondent revoked the same vide Ex.P-5, it is an admitted fact that agreement to sell Exh.P-2 was executed on 9.5.2003 which mean that on the day of execution of Exh.P-2 the executant was the lawful attorney of respondent. Now it has to be seen what the document of attorney provides. The Principals of the document are three sons of Maqsood Ahmed, they narrated that they are the joint owners of House No.248 Satellite Town Gujranwala which they inherited from their mother, due to their inability to manage the affairs of the House they appoint their father Maqsood Ahmed their General attorney to manage, sale, mortgage, gift alienate etc., their present property and any other property in any city of Pakistan which become their property subsequently, they have delegated their all powers quo the existing property and other property which came under their ownership in any city of Pakistan. It is an admitted fact that suit property was allotted to three brothers on 26.7.1994 by the Housing and Physical Planning Department Gujranwala, Out of three allottees two brothers decided to surrender their share in the suit property in the name of respondent, hence their attorney applied for issuance of amended allotment letter, the department vide letter dated 6.7.2002 Ex.D-2 issued the amended letter confirming to Mr. Falek Sher, Arez Sher, Amjad Ali through General Attorney in the following terms:-

"The transfer rights of allotment of the property cited in the subject is hereby allotted from your name to the name of Mr. Arez Sher son of Haji Maqsood Ahmed on usual terms and conditions of auction"

After the permission to surrender the share of two brothers the department executed an agreement to sell on 04.7.2002 in the name of respondent. On 8.3.2003 the attorney applied to department for execution of sale deed of the suit property in favour of respondent, the department on 18.12.2003 executed the sale deed and it was registered with the Sub. Registrar Gujranwala at No.1975 Book 1 Volume 9004 registered on 18.12.2003, in the said sale deed the vendee is described in the following words:-

"Mr. Arez Sher son of Maqsood Ahmed through G. Attorney Mr. Maqsood Ahmed son of Rehmat Khan resident of 409 Satellite Town Gujranwala"

All the above said documents show that the respondent is accepting Maqsood Ahmed his attorney appointed on 17.9.1984. The attorney before the execution of sale deed on 9.5.2003 entered into an agreement to sell of the suit property with the appellant and received Rs.500,000/- he part consideration and agreed to transfer the suit property through sale deed or in the record of Housing and Physical Planning Department up to 15.11.2003 subject to payment of balance amount of Rs.94,50,000/-. The appellant on 15.11.2003 appeared before the District Officer, Housing and Physical Planning, Gujranwala and informed him that he brought Rs.94,50,000/- with him and is ready to pay the said amount for the transfer of suit property to respondent's attorney but Maqsood Ahmad has failed to attend the office. The concerned officer of the department entertained the application which was produced in the statement of PW-6 as Ex.P-3. The attorney also issued legal notice on 02.1.2004 to the appellant. The principal Arez Sher revoked the General power of attorney in favour of his father vide revocation deed dated 24.1.2004 Exh.P-5. Arez Sher appeared as D.W-2 and deposed that he become the owner of suit property on 18.12.2003. The Housing and Physical Planning department has allotted suit property on 06.7.2002 to him. After grant of proprietary rights he never appointed any attorney nor authorized his father for entering into agreement to sell or sale of the property. In the year 1984 he and his two brothers appointed defendant No.2, his father, as their attorney. He has not received any earnest money from his father. The agreement to sell dated 09.5.2003 is a fraudulent and bogus document. The agreement is without any authority. The agreement to sell is not in his knowledge. In cross-examination he admits that the proprietary rights of the suit property were transferred in his favour through his general attorney, this means up till 18.12.2003 the respondent No.2 was the lawful attorney of respondent No.1. He further admits that his father executed all documents with reference to transfer of suit property in his favour being his general attorney. He denied to recognize the signatures of his father, he stated that he is not aware of the execution of an agreement to sell but admits that he came to know about the transaction of sale in May or June, 2003 and he never initiated any proceedings against his father, due to the said agreement to sell he is living separately from his father. He has not filed a suit for cancellation of agreement to sell. He is not aware that on the basis of Exh.P-1, his father has rented out three shops in the suit property. The learned trial court summoned Maqsood Ahmad, the attorney, as C.W-1, the said witness was not cross-examined by the respondent, CW-1 in examination in chief deposed that Arez Sher become the owner of suit property in the year 2002. The appellant has not appointed him as his attorney after becoming the owner of the house, the respondent has not authorized him to enter into an agreement to sell, the earnest money is still with him. He admits that Arez Sher is his real son, he was Arez Sher general attorney, who revoked his power of attorney but he is not aware when he revoked. He admits that on the basis of document of attorney he rented out the shops, the part of suit property, to different people. He entered in to an agreement to sell of the suit property as general attorney of the respondent and as per agreement the final payment was to be made on 15.11.2003. Volunteered that balance amount was not paid and he issued notice to appellant in this behalf. The statement of CW-1 established that he entered into an agreement to sell of the suit property, he was the legally appointed attorney of respondent, his attorney was valid and was not revoked, he admits that he has no differences with his son who is residing in America.

7. The argument of Learned Counsel is that three brothers appointed Maqsood Ahmed their General Attorney on Exh.P-4 and at that time the three persons were the owner of only one property and no other property was in the name of three brothers hence the General power of attorney was not applicable against the property which was purchased after the execution of General Power of attorney. The wording of document of attorney is very clear. It is specifically mentioned in the document that the present property and any other property in any part of Pakistan in future will be managed, sold, gift alienate will be dealt by the attorney the words used are:-

The three brothers got allotted the suit property and subsequently two brothers surrendered their share in favour of respondent after 10 years of the execution of general attorney the respondent is not objecting the said transaction if the General Power of attorney in favour of Maqsood Ahmed was restricted to the extent of only one property how he surrendered the property of two other principals in favour of respondent and till today the two principals have not challenged the transaction of surrender, further Maqsood Ahmed acting as the General Attorney of respondent arranged the execution of sale deed of the suit property in favour of respondent, the respondent has not objected the said transaction till today, how the respondent can only challenge the act of attorney which did not suit him. The respondent revoked the power of attorney after the institution of suit but he admits that the he came to know the suit sale in the month of June 2003, where as the appellant filed the suit on 14.1.2004, hence this argument of Learned Counsel for the respondent is not tenable in the eye of Law.

8. The other argument of Learned Counsel is the respondent while appointing Maqsood Ahmed has not empowered him to enter in to sale agreement. It is a settled principle of law that deed of power of attorney requires strict construction and it should be construed according to its language used, the only exception is available under Section 188 of the Contract Act that while doing the act permitted under the power of attorney the attorney is entitled to do lawful things incidental for completion or performance of the act permitted under the attorney. It is an admitted fact that the attorney Maqsood Ahmad has the power to sell the property in the name of principal, hence the agreement to sell is an incidental act for completion of sale. The argument of learned counsel thus has no substance. Reliance is placed on Muhammad Hussain v. Bashir Ahmed and others (PLD 1987 Lahore 392) wherein this Court has held as under:-

"Rule 2 of Order III of the C.P.C. permits the performance of acts on behalf of the parties by their recognised agents and they are specified to be, among others, "the persons holding powers-of-attorney, authorising them to do such acts on behalf of such parties". Therefore, to sustain an act done by one person on behalf of the other, a specific power 'to do such an act' on his behalf has to be established. Sections 226 and 227 of the Contract Act are also in point. They provide as under:-

"226. Contracts entered into through an agent, and obligations arising from acts done by an agent, may be enforced in the same manner and will have the same legal consequences, as if the contracts had been entered into and the acts done by the principal in person.

227. When an agent does more than he is authorised to do, and when the part of what he does, which is within his authority can be separated from the part which is beyond his authority, so much only of what he does as is within his authority, is binding as between him and his principal."

Again, in section 2 of the Power of Attorney Act, VII of 1892, it is provided as under:

"The donee of a power-of-attorney may, if he thinks fit, execute or do any assurance, instrument or thing in and with his own name and signature, and his own seal, where sealing is required, by the authority of the donor of the power; and every assurance, instrument and thing so executed and done, shall be as effectual in law as if it had been executed or done by the donee of the power in the name, and with the signature and seal, of the donor thereof."

The expression 'thing so executed and done', used in this section also signifies the importance of the conferment of a specific power on the donee of a power-of-attorney to become as effectual as done by the donor himself. Law treats the agent (the donee of power-of-attorney) as the alter-ego of the principal and the primary purpose of such an instrument is to evidence the authority of the agent to the third parties with whom the agent deals. A power-of-attorney is held to confer only those powers as are specified therein so that the agent can neither go beyond the terms of the power-of-attorney nor deviate therefrom. In Fida Muhamamd v. Pir Muhamamd Khan (deceased) through legal heirs and others PLD 1985 SC 341, it is held:-

"It is wrong to assume that every "general" Power-of-Attorney on account of the said description means and includes the power to alienate/dispose of property of the principal. In order to achieve that object it must contain a clear separate clause devoted to the said object."

The rule is firmly settled that the deed of power-of-attorney has to be strictly construed and a power which is not specifically given therein, except to the extent of doing lawful things incidental to the exercise of such specified power (vide section 188 of the Contract Act), cannot be regarded to have been impliedly conferred. See, for instance, Messrs Eagle Star Insurance Co. Ltd. v. Messrs Usman Sons Ltd. and others PLD 1969 Kar. 123; Munir Hussain v. Pakistan Radio House Ltd. and 12 others v. Cassim Suleman and 7 others 1983 CLC 1656 and Muhammad Afsar Khan and another v. Khadim Hussain and 3 others PLD 1978 SC(AJ&K) 143".

9. Learned counsel has vehemently argued that the attorney has not taken permission from the principal before entering into agreement to sell. This argument of learned counsel again is devoid of any merit as the attorney himself has delegated his powers to sell the property, if the power to sell or alienate is available to the attorney then there is no need for getting fresh permission for sale of property of principal.

10. The last argument of learned counsel for appellant is that the attorney has not paid him the part consideration received and he retained the same with him. It is a matter between the principal and the agent who are father and son. The purchaser has nothing to do with the said act. If the father/attorney has not paid the amount of part consideration to the principal, the principal has every right to recover the same from the attorney according to law.

11. We are conscious of the fact that the transaction of sale was entered into between the appellant and respondent's attorney on 09.5.2002, the appellant has only paid Rs.500,000/- out of Rs.99,50,000/-the major amount remained with the appellant while the property remained in possession of respondent who continued to reap its benefits, in spite of all these facts the currency was devaluated and also the value of property stand appreciated. The Hon'ble Supreme Court of Pakistan has attended to this aspect of case in a case reported as Mst. Mehmooda Begum v. Syed Hassan Sajjad and 2 others (PLD 2010 Supreme Court 952) and has held as under:-

"As we have also pointed out above this Court is competent to consider the conduct of the parties to the agreement and circumstances attending its execution and if specific performance will give an unfair advantage to the plaintiff over defendant. It should be refused as held in case titled Jethalal N. Modi v. Bachu (AIR 1945 Bom, 481). However, the judicial consensus seems to be and it is otherwise well entrenched legal proposition that "inadequacy of consideration is by itself, not a ground for refusing specific performance of an agreement. There is no justification for relieving one of the parties from its obligation only for the reason that it might give some monetary loss to the other. Although section 22 of the Specific Relief Act, 1877, does empower the Court to refuse specific performance of the agreement in cases of hardship but the hardship contemplated by that provision is of the nature which could not be foreseen by the parties at the time of agreement. In the case of Imanakchand v. Purna (AIR(sic.) Madh. Par. 235) it was held that where the price is so grossly inadequate as to shock the conscience of the Court and either by itself or in conjunction with other circumstances such as illiteracy, oppression etc, it evidences fraud or that undue advantage was taken by the other side, the Court will refuse specific performance".

12. The upshot of the above said discussion is that we allow the appeal and set aside the impugned judgment and decree of the learned trial court and decree the suit, however the appellant will be liable to pay 08% markup per annum simple on the balance amount of Rs.94,50,000/- till the execution of sale deed.

ZC/M-91/L Appeal allowed.