RAWAIL KHAN (deceased) Versus Khawaja MUHAMMAD ARIF
MUSARRAT HILALI, J.--- This Civil Appeal is directed against the judgment dated 14.03.2016 passed by the Peshawar High Court, Peshawar (impugned judgment), whereby the appeal filed by the respondent No.1/plaintiff (vendee) was allowed, the judgment and decree of the Trial Court dated 27.06.2009 were set aside, and the suit for specific performance of an agreement to sell dated 19.04.1992 was decreed subject to deposit of the remaining sale consideration. The Trial Court, while dismissing the suit, had directed the appellants/defendants (vendors) to refund the amount received (Rs. 1,550,000/- Fifteen Lakh and Fifty Thousand Rupees) along with markup.
2. The lis arises out of an agreement to sell dated 19.04.1992 (agreement), whereby the vendors namely Rawail Khan (deceased), Mustajab Shah and Jamal-ud-Din (deceased), sons of Swaleeheen agreed to sell land measuring 04 kanals out of joint holding of total land measuring 14 kanals, 13 marlas to the vendee namely Khwaja Muhammad Arif (respondent No.1/plaintiff) for a total sale consideration of Rs.2,320,000/-. For convenience and clarity, the parties shall hereinafter be referred to as the "vendors" and the "vendee". It is an admitted position that a substantial portion of the sale consideration was paid by the vendee and received by the vendors. The dispute essentially revolves around the alleged delay in payment of the remaining amount and the executability of the agreement.
3. Learned counsel for the vendors has contended that the vendee failed to make payment of the sale consideration and, therefore, was not entitled to the equitable relief of specific performance. It is further argued that the property being joint and unpartitioned, and in absence of necessary parties, the decree was not executable. Conversely, learned counsel for the vendee has supported the impugned judgment, contending that the execution of the agreement and receipt of substantial consideration having been admitted, the vendee had established his entitlement to the decree, and that delay in payment, in the absence of any penal consequence in the agreement, was not fatal.
4. We have heard the learned counsel for the parties at length and examined the record. The crucial questions requiring determination are: i. Whether the delay in payment of part of the sale consideration disentitles the vendee from seeking specific performance, and whether the High Court rightly interfered with the findings of the Trial Court. ii. Effect of non-registration of the agreement under the Registration Act, 1908, particularly when its execution and terms are admitted by the vendors.
5. It is now a settled principle of law that in contracts relating to immovable property, time is ordinarily not of the essence unless it is expressly provided so or the intention of the parties, gathered from the terms of the agreement, clearly indicates otherwise. Mere stipulation of dates for payment does not, by itself, render time as essence of the contract. In Zeeshan Pervez (Late) through his legal heirs v. Muhammad Nasir (2025 SCMR 495) , this Court, while examining the obligations of vendor and vendee, held that where the agreement does not confer strict consequences such as forfeiture or penalty to delayed payment, and the vendor has accepted payments without protest, the contract cannot be treated as time-bound in its strict sense, nor can the vendee be penalized for such delay. In the present case, the agreement does not contain any clause providing for forfeiture of the earnest money or automatic rescission of the contract in case of delayed payment. Rather, the conduct of the parties. demonstrates that the vendors accepted substantial payments. Such conduct clearly negates the contention that time was intended to be the essence of the contract. Once the vendors have acquiesced in the delayed payments, they cannot subsequently seek to avoid the contract on that very ground.
6. Furthermore, the record does not reflect that the vendee was unwilling to perform his part of the contract. On the contrary, the vendee approached the Court seeking enforcement of the agreement and expressed readiness to pay the remaining consideration. In matters of specific performance, the readiness and willingness of the vendee is to be assessed from the overall conduct of the parties, and not by isolating a delay in payment where no penal consequence is provided in the contract.
7. Now, coming to another important aspect requiring our consideration, learned counsel for the vendors, for the first time before this Court, has raised an objection that the agreement was not registered in terms of the Registration Act, 1908. At the outset, it may be noted that such objection was neither raised in the written statement before the Trial Court nor pressed before the High Court, and even in the instant appeal no such ground has been taken. It is a settled principle of law that a question not raised before the Courts below cannot ordinarily be allowed to be agitated for the first time before this Court. Therefore, this objection is not validly raised. Even otherwise, the execution of the agreement and receipt of substantial sale consideration stand admitted by the vendors. There is no rival agreement or competing title set up by the vendors, nor any denial of the contractual relationship. It is trite that admitted facts need not to be proved. Furthermore, Section 17 of the Registration Act, 1908 mandates registration of those instruments which, by themselves, create, declare, assign or extinguish any right, title or interest in immovable property. An agreement to sell, by its very nature, does not create or transfer any such right or title; rather, it only embodies a contract creating reciprocal obligations and confers upon the vendee a right to obtain another document, namely, a registered sale deed. It is now well settled that an agreement to sell does not, of itself, create any interest in immovable property and, therefore, does not require compulsory registration. In Mst. Rasheeda Begum and others v. Muhammad Yousaf and others (2002 SCMR 1089) , this Court held that an agreement to sell merely creates a right to obtain another document conferring title and, for that very reason, is not compulsorily registrable. Also, the date of execution of the agreement is 19.04.1992 and suit for specific performance was instituted on 11.04.1995, within the prescribed period of limitation of three years under Article 113 of the Limitation Act, 1908, and thus the contractual right of the vendee remained alive and enforceable. Specific performance being an equitable relief cannot be denied in the instant case, particularly where the conduct of the parties and the admitted terms of the agreement by the vendors clearly establish the enforceability of the contract.
8. The objection regarding non-joinder of co-sharers and the joint nature of the property is also not sufficient to defeat the claim of the vendee. It is a settled position that an agreement to sell executed by a co-sharer can be enforced to the extent of his share, and the vendee be put into symbolic or joint possession, leaving the parties to seek partition, if so advised. The High Court has rightly observed that such technicalities cannot be made a ground to deny substantive relief, particularly where the contract itself stands admitted.
9. The Trial Court, despite recording findings in favour of the vendee on material issues, declined relief primarily on the grounds of uncertainty of property description and executability. Such reasoning, in our view, is not sustainable in law, as the agreement, once admitted by the vendors and acted upon by receipt of substantial consideration, could not be rendered unenforceable merely on account of such technical objections. The High Court has correctly appreciated the evidence and applied the settled principles of law in reversing the findings of the Trial Court. No misreading or non-reading of evidence has been pointed out in the impugned judgment. The findings recorded by the High Court are in consonance with the settled legal principles governing specific performance of contracts and do not call for interference by this Court.
10. For the reasons stated above, we find no merit in this appeal. The impugned judgment is upheld and this Civil Appeal is dismissed.
MH/R-4/SC Appeal dismissed.