AMIR BAKHSH And Others vs SANWAL KHAN And Another
This matter involves a dispute over agricultural land measuring approximately 72 acres, concerning rival agreements to sell executed by the owner in favour of the first purchaser and subsequent purchasers (petitioners). The first purchaser filed a suit for specific performance of contract, which was decreed by the trial Court after finding that the subsequent purchasers had prior notice of the earlier transaction. The High Court dismissed the subsequent purchasers' first appeal. Upon a petition for leave to appeal to the Supreme Court, the petitioners contended that the lower courts misread the evidence regarding their knowledge at the time of the initial agreement and erred in holding that the first agreement was superseded by a novation. The Supreme Court held that prima facie there was no clear admission in the testimony of the witness establishing the petitioners' knowledge at the relevant time, and that important questions regarding notice and novation required consideration. Consequently, the Supreme Court granted leave to appeal while recording an undertaking from the respondent not to alienate or encumber the land pending the appeal.
- Whether subsequent purchasers had notice of a prior agreement to sell at the time of entering into their own agreement?
- Whether a subsequent agreement can operate as a novation superseding an earlier agreement to sell?
- Whether the concurrent findings of lower courts regarding the knowledge of a prior transaction are sustainable on the evidence on record?
ORDER
ZAFFAR HUSSAIN MIRZA, J.--The dispute in this case relates to agricultural land measuring about 72 Acres in Deh Khandhar, Taluka Kandiaro, District Nawabshah. The petitioners claimed to be Haris of this land since their ancestors for over a period of 100 years. The admitted facts are that Muhammad Ali, respondent No. 2 who is the owner of the land entered into an agreement to sell this land to Sanwal Khan, respondent No. 1, on 25th October, 1956. Respondent No. 1 is said to have paid Rs.800 out of earnest money on the date of the agreement and the balance of the earnest money amounting to Rs.3,200 was payable within one month as stipulated.
2. Respondent No. 2 entered into another agreement to sell the same land to the petitioners on 2nd May, 1967, and received advance payment of Rs.30,000. It is said that as the petitioners were unable to procure the entire balance of consideration another document was signed by respondent No. 2 in their favour on 21st July, 1967, in which again he undertook to sell the land to the petitioners on the payment of the balance of consideration amount outstanding.
3. As no sale-deed was executed in favour of respondent No. 1 (first purchaser) by respondent No. 2 (seller), the former filed a suit for specific performance of contract for sale on 25th November, 1971.
The petitioners were not impleaded as parties in this suit by the first purchaser but were later on joined as defendants at their own request. The seller admitted the first agreement in favour of the first purchaser in his written statement, but contended that as the said first purchaser had committed breach of the terms of agreement in not paying the balance of earnest money, within the stipulated the the contract stood cancelled and, therefore, he was free to dispose of the land to any third party. The petitioners also contested the suit and their plea, inter alia, was that they had entered into agreement to purchase the land with the seller without notice of the previous agreement with the first purchaser in good faith and for valuable consideration. The trial Court upon the evidence adduced before it by the parties, held that the petitioners had knowledge of the prior transaction between the seller and the first purchaser and that the contract in favour of the first purchaser was enforceable. Accordingly the trial Court decreed the suit on 25th November, 1971. The petitioners then challenged the decree in first appeal but their appeal was dismissed by the High Court of Sind, Karachi, by its judgment, dated 19th January, 1984. Hence this petition for leave to appeal.
4.Mr. Abdul Hafeez Memon, learned counsel appearing in support of the petition, has taken us through the relevant part of the pleadings of the parties and the evidence produced at the trial. He has challenged the finding of the Courts below that the petitioners had knowledge of the previous transaction in favour of the first purchaser as having no basis and wholly unsustainable on the evidence on record. Referring to the deposition of petitioner's witness Sanwal Khan, on whose alleged admission, the Courts below have based their findings, the learned counsel contended that this witness has nowhere admitted that the petitioners were aware of the previous transaction in favour of the first purchaser. Learned counsel submits that the learned Courts below have misread the evidence of this witness, who was referred to such knowledge at the the of the execution of the subsequent document in favour of the petitioners on 21st July, 1967, which was after the institution of the suit for specific performance. It is emphatically contended by the learned counsel that the agreement on which the petitioners rely was the one executed by the seller on 2nd May, 1967, on which date they had no knowledge of the previous transaction and the High Court has erred in holding that this agreement was superseded by way of novation by the subsequent agreement, dated 21st July, 1967.
5. Mrs. Salma Nasiruddin, appearing for respondent No. 1/caveator has opposed the petition and has relied on the evidence of witness Sanwal Khan. After reading the evidence of this witness with her we are of the opinion that prima facie there is no clear admission in his testimony that the petitioners had knowledge of previous transaction at the the of the first agreement in their favour.
6.In view of the above, we feel that the question whether the petitioners had notice of the transaction in favour of the first purchaser at the the of agreement in their favour and whether the agreement, dated 2nd May, 1967, was superseded by the subsequent document of 21st July, 1967, inter alia, requires consideration. Leave is accordingly granted. Security Rs.2,500.
7.Learned counsel for the petitioners urged that the execution of the decree under challenge may be stayed. We are, however, presently not inclined to stay the execution of the decree as the learned counsel for respondent No. 1/caveator has undertaken that in case of execution of the said decree, respondent No. 1 will not alienate or dispose of the land in dispute or in any way in cumber his right or interest therein until the disposal of the appeal.