SHAMIM AKHTAR vs MUHAMMAD RASHEED

1. ' MUHAMMAD HALEEM, C.J.--Leave to appeal was granted to consider: firstly, whether the respondent was not entitled to the protection under the provisions of section 53-A of the Transfer of Property Act as he was a tenant of the previous landlords before the execution of the contract of sale of the house with them in the A absence of the stipulation that he had either taken possession of the premises or continued to remain in its possession in part performance of the contract; and, secondly, whether the appellant being a bona fide purchaser without notice of the previous contract of sale, or the part performance thereof, if any, was affected by the respondent's right in respect of, the contract with the previous landlords.

2. ' The dispute relates to House No,1703, Street No,5, Mohallah Islamabad, Gujranwala. The respondent was a tenant of one Abdul Haq for the last many years. Abdul Haq agreed to sell the house to him pursuant to an agreement on 20th July, 1974, for a sale consideration of Rs,15,500 out of which the respondent paid to him a sum of Rs,2,000 as earnest money, and again on 11th January, 1975, he paid another sum of Rs,1,500 as the further amount of earnest money and Abdul Haq thereupon agreed to execute the sale-deed by 20th of March, 1975. However, Abdul Haq did not execute the sale-deed as agreed upon although respondent informed him through a telegram that he was ready and willing to perform his part of the contract which was not responded to by Abdul Haq. This led to the filing of the suit by the respondent for the specific performance of the contract on 23rd September, 1976, or in the alternative for the recovery of Rs,7,000 on account of earnest money paid and penalty incurred in accordance with the terms of the agreement. The appellant served a notice upon the respondent under section 13-A of the Rent Restriction Ordinance, 1959 on 31-1-1977 for the payment of rent on account of the property having been purchased by her. As no rent was paid, she filed an ejectment application for his eviction on 9th of September, 1978. In the meantime the respondent having come to know of the subsequent purchase of the disputed house by the appellant got her impleaded in the suit for the specific performance of the contract.

3. ' The respondent resisted the suit on the ground that the present application was not maintainable in view of the suit for specific performance pending in the Court in which she was a party; and that there existed no relationship of landlord and tenant between them ' The trial Court framed the preliminary issue on the question as to whether there existed any relationship of landlord and tenant between the parties, and decided it in favour of the appellant although it was pleaded before him that such relationship did not exist in view of the suit for the specific performance of the contract regarding the sale of the house having been filed at an earlier date. The trial Court held him to be a tenant under the original landlord, namely, Abdul Haq, and that as the house had been transferred to the appellant and a notice had been served on him under section 13-A of the Rent Restriction Ordinance, there existed the relationship of landlord and tenant.

4. ' On appeal, the Additional District Judge, Gujranwala, held that as the respondent had admitted to be the tenant of Abdul Haq and also the fact that he had received a notice under section 13-A given by the appellant for payment of rent on account of the purchase of the property by her, the conclusion was irresistible that he became the tenant of the appellant. The appellate Court further observed that the respondent was not able to prove his agreement of sale of the house with Abdul Haq, and, therefore, without establishing the execution of the agreement he could not successfully resist the claim against ejectment.

5. ' The respondent thereupon invoked the jurisdiction of the High Court through Writ Petition No,1612 of 1982 and succeeded as the High Court held: "In the circumstances of this case, the Controller as also the learned Appellate Authority ignored the provisions of Section 53-A of the Transfer of Property Act and failed to follow the law laid down in this behalf in Hassan Abbas v. Shahid Bashir and Manzoor Hussain v. Nawazish Nazir Hussain."

6. ' The High Court has mainly relied on the cases reported as Hassan Abbas v. Shahid Bashir and 5 others (1980 CLC 1942 (Lahore) and Manzoor Hussain v. Nawazish Nazir Hussain and another, (PLD 1976 Lah. 837) for reaching the conclusion, as it did, that in view of the agreement to sell possession stands protected in view of section 53-A of the Transfer of Property Act. Further, the High Court held that as the question of the execution of the agreement to sell was yet to decided by a Civil Court of competent jurisdiction, the appellate Court was in error to hold that it was not proved for giving the protection envisaged by section 53-A of the Transfer of Property Act.

7. ' Section 53-A of the Transfer of Property Act partially imports the English equitable doctrine of part performance. Apart from this section except as provided therein, the doctrine of part performance is not applicable in Pakistan. The section does not give any right which the formal agreement does not give. Under this section the transferee must have taken possession or if he was already in possession he must have continued in possession and must have further done some act in furtherance of the contract. It is then that the part performance under this section gives rise to a statutory right of defence.

8. ' In Ewaz Ali v. Firdous Jehan, (AIR 1944 Oudh 212), it was held that the part performance under this section confers upon the transferee the privilege of invoking the doctrine embodied therein only as a shield against any invasion of his rights by the transferor or person claiming under him, and in a case where the terms of a contract do not contain any stipulation about delivery of possession or continuance of possession in part performance of the agreement to sell, the status does not change and it cannot be said that such possession was in pursuance of the agreement.

9. ' It is, therefore, of paramount importance that under this section as between the parties part performance must result in the change of their relative positions as to the subject-matter of the contract as a result of the stipulation fulfilling the requirements of this section in order to give right to defend possession.

10. ' In the context of the above statemeht of law there has not been any change in the relative positions of the parties as regards the subject-matter of the contract in the absence of a,ny stipulation that the continuance of his possession was in part performance of the agreement to sell. In Ammer Hussain v. Muhammad Shabbiruddin Khan, 1987 CLC 1149, it was held that the possession of the tenant in the absence of any stipulation in the agreement to sell D could not be said to be in part performance of the contract so as to give protection against ejectment. The same view was expressed in Khurso Alam Hydri v. Mst. Lqbal Begum, 1981 CLC 347 and Chhappar Khan v. Land Commissioner, West Pakistan, Karachi (PLD 1976 Kar. 747).

11. ' In Allah Yar v. Additional District Judge, (1984 SCM R 741), the tenants claimed to have purchased land on the basis of a receipt and had filed a suit for specific performance of the agreement. This Court held while denying to them the benefit of section 53-A: "Reliance of the learned counsel on section 53-A of the Transfer of Property Act in the circumstances of this case is of no help to the petitioners. According to him they have filed a suit for specific performance so as to establish the genuineness, validity and effect of the so-called receipt. Till they are able to obtain a decree from the Civil Court, they could not have lawfully denied the relationship of landlord and tenant."

12. ' This was so because the continuance of the possession by the tenants was in no other capacity but that of .a tenant, and, therefore, there was no change of relative positions of the parties as to the subject-matter of the contract.

13. ' In Haji Jan Muhammad v. Ghulam Ghaus and 2 others, (1976 SCM R 141), there was no stipulation in the agreement not to pay rent and the plea of part performance of the agreement was put across as a defence against ejectment. It was held as under: "In support of his plea of part performance, learned counsel raised a novel argument that his clients continued occupation of the premises occupied with the admitted non-payment of rent, which constituted the grounds of petitioner's ejectment, were the two overt acts on his part towards part performance of the contract. As observed earlier, agreement of sale, Exh. R/1 which formed the sheet-anchor of the petitioner's case did not exempt him from payment of rent and therefore, his continued occupation of the premises in violation of the law could hardly be put forth as a defence or a step towards part performance when admittedly the petitioner had never paid the consideration. The authority relied upon in this behalf by the learned counsel namely, Kalimuddin Ansari v. Director, Excise & Taxation, (PLD 1971 SC 114), has, therefore, no relevancy as it proceeds on entirely different and distinguishable facts."

14. ' The High Court, however, failed to distinguish while relying on Hassan Abbas's case that there was a stipulation in the agreement to sell that the tenant will not pay any rent to the original owner, and, therefore, his possession ceased to be that of a tenant as the tenancy stood terminated.

15. Accordingly, the tenant was protected against his dispossession under section 53-A of the Transfer of Property Act. In Manzoor Hussain's case, it was alleged that there was an agreement to sell the property and that the tenant had paid a considerable amount of the sale consideration in advance and upon that premise it was urged that there was no relationship of landlord and tenant between the parties. The Rent Controller also without recording evidence on the point whether an agreement to sell was executed by one of the landlords held that even if the agreement had been executed it did not put an end to the relationship of landlord and tenant which had come into existence prior to it. In this case there was no consideration of the question as to whether there was any stipulation in the agreement to show as to whether the continuance of possession was of a tenant or of a 'vendee and the High Court merely upon the premise that protection is afforded against dispossession under section 53-A of the Transfer of Property Act upon the execution of the agreement decided the issue. The High Court's reliance on this decision was not correct as it had failed to notice the important ingredients .Of section 53-A of the Transfer of Property Act.

16. ' For the foregoing reasons, we are of the view that the judgment of the High Court suffers from patent illegality as it has given protection without fulfilment of the condition required by section 53-A of the Transfer of Property Act as regards the continuance of possession in part performance of the agreement. As the appeal is being disposed of on the consideration of the first question', it is not necessry to examine the second question.

17. ' Accordingly, we would set aside the judgment of the High Court and restore that of the Rent Controller, and allow the appeal with costs.