MUHAMMAD YAQUB vs MUHAMMAD NASRULLAH KHAN and others
The petitioner sought specific performance of an agreement dated 12th May 1960, under which the predecessor-in-interest of the respondents agreed to re-transfer a shop within five years upon payment of the price paid to the Settlement Department. The petitioner initially disputed the amount payable, arguing for a lower sum based on claim valuations, but later offered to pay the full amount. Both the trial court and the first appellate court rejected the suit. The High Court dismissed the second appeal, holding that the suit was filed on 13th May 1965, one day after the five-year period expired, and that time was of the essence of the contract. Before the Supreme Court, the petitioner argued that in contracts for immovable property, time is not normally of the essence, relying on precedent. The Supreme Court granted leave to appeal to examine whether the High Court correctly determined that time was of the essence in this specific agreement and whether the suit was time-barred despite the petitioner's subsequent offer to pay the full amount.
- Is time considered the essence of a contract for the sale of immovable property by default?
- Does the expiration of a stipulated period in a re-transfer agreement bar a suit for specific performance if filed immediately thereafter?
- Can a party to a specific performance suit cure a defect in the offered payment amount by offering the full amount during appellate proceedings?
ORDER
1. ' NASIM HASAN SHAH, J.-- The petitioner instituted a suit on 13th May, 1965 for the specific performance of an agreement made on 12th May, 1960 regarding the sale of the disputed shop.
2. Under the said agreement Mst. Umda the predecessor-in-interest of the respondents had agreed to re-transfer the shop to the petitioner within a period of 5 years of the execution of the agreement on the price paid by her to the Settlement Department. The case of the respondents was that a sum of Rs, 13,481; was paid by Mst. Urnda to the Settlement Department, but the petitioner, in his suit insisted on a decree for specific performance of the agreement on payment of Rs, 6,803.28 on the ground that payment made by Mst. Umda was through purchase of claims, which were available at 50% of their face value. The said plea having failed before the trial Court and the first appellate Court, he argued in the alternative at that stage that he was prepared to pay the full amount of Rs, 13,481. This plea was also rejected. The same was reiterated before the High Court on second appeal, but the learned Judge in the High Court rejected it by observing that the period of 5 years expired on 12th May, 1965 and the suit for specific performance was filed on 13th May, 1965 after the expiry of the stipulated period.
3. ' As regards the plea that time was not the assence of the contract it was observed that according to the contents of the agreement, time in this case was the essence of the contract. The second appeal accordingly was dismissed.
4. In support of this petition it is inter alia submitted that in cases of contracts in respect of immovable property, the time fixed for completion of the transaction is not normally to be regarded to be the essence of the contract. The presumption in such contracts is that though a specific time is mentioned within which completion is to take place, the parties really and in substance only intended that it should take place in a reasonable time. Reliance is placed on a judgment of this Court reported as Abdul Hamid v. Abbas Bhal-Abdul Hussain PLD 1962 SC 1.
5. ' Security in the sum of Rs, 2,500.
6. ' Status quo as to possession to be maintained meanwhile.