Pakistan Case Law
1994 SCMR 349

Ch. MUHAMMAD NAWAZ vs Ch. REHMAT ALI and another

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Citation1994 SCMR 349
CourtSupreme Court of Pakistan
Case No.Civil Appeal No, 385 of 1992
Date1993-10-20
Judge(s)Shafiur Rahman, Saleem Akhtar and Fazal Ilahi Khan
Authored bySaleem Akhtar
ResultAppeal dismissed
AI Summary — generated from this judgment; read the full text below and verify before relying on it.

This civil appeal by leave of the Supreme Court challenged a judgment of the High Court confirming the dismissal of the appellant's execution application for a compromise decree. The appellant had filed a suit for specific performance which was settled via a compromise decree passed by the High Court, stipulating specific timelines for payment to a designated nominee and execution of sale-deeds, failing which rights would accrue to third parties. The appellant submitted a draft sale-deed containing an excess area and issued payment to the wrong party, attempting to cure these defects only after the stipulated time had expired. The core legal question was whether a compromise decree where time was the essence can be executed after the decree-holder commits a default in material terms and timelines. The Supreme Court held that a consent decree cannot be altered unilaterally, time was of the essence, and default by the appellant created rights in favour of third parties, thus justifying the refusal to execute the decree. The key principle laid down is that parties to a consent decree must strictly adhere to its terms and timelines, and failure to do so, especially when third-party rights are created, bars execution.

Questions settled in this judgment
  • Whether a consent decree can be changed or altered unilaterally without the consent of the other party?
  • Can a compromise decree be executed after the expiry of the stipulated time when time was made the essence of the contract?
  • Does a default in complying with the payment terms of a compromise decree create rights in favour of third parties?
Laws & provisions referred
  • Order XXI Rule 34, Code of Civil Procedure 1908
  • Order XXI Rule 34(3), Code of Civil Procedure 1908
compromise decreeexecution of decreespecific performanceconsent decreetime is of the essence

' SALEEM AKHTAR, J. ---The appellant by the leave of this Court has challenged the judgment passed by the learned Judge in Chambers of the High Court confirming the order dated 4-5-1991 passed by the learned Civil Judge 1st Class, Lahore dismissing the execution application of the appellant for enforcement of a compromise decree passed by the High Court.

2. The appellant had filed a suit for specific performance of contract dated 20-3-1984 against the respondents which was dismissed on 26-1-1990 by a learned Civil Judge. The appellant filed an appeal in the High Court where a compromise decree was passed containing all the terms and conditions settled between the parties. Under the agreement, which was made a decree?

(1) the appellant undertook to supply full particulars of his nominee Ch. Muhammad Amin in writing within a fortnight of the order;

(2) to pay the price of 4 Kanals 2 Marlas and 64 square feet of land to Ch. Muhammad Amin at the rate of Rs,1,30,000 per Kanal within a period of three months. This area included an area of 12 Marlas 40 square feet utilized for the roads. However, the sale-deed was to be executed by Ch. Rehmat Ali and Ch. Muhammad Amin and registered in respect of 3 Kanals 10 Marlas and 24 square feet only;

(3) the sale-deed was to be executed by them in favour of the appellant or his nominees within the specified period of three months;

(4) in case appellant failed to pay the price of these plots of Ch. Muhammad Amin within the specified period his nominees would have a right to have the sale-deeds of their respective plots executed and registered in their favour within a further period of three months and

(5) in case the appellant or his nominee failed to have the sale-deed executed within the above period of six months, the appellant and his nominee will lose all rights in that nominee's land.

3. After the decree containing the aforestated terms and conditions amongst others, which have not been reproduced, there seems to be some dispute between the parties which followed correspondence from both sides. Ultimately the appellant filed an application for execution of the decree and also filed an application under Order 21, rule 34, C.P.C. Alongwith a draft sale-deed. The respondents raised objections to the draft sale deed pleading that the area included in it is much in excess of the area agreed upon in terms of decree and further that the pay order has been issued in the name of Ch. Rehmat Ali instead of Ch. Muhammad Amin, to whom the said amount was to be paid in terms of the decree. Both the applications were dismissed by the learned Civil Judge against which appeal was filed in the High Court which was also dismissed by the impugned judgment.

4. Mr. Taki Ahmad Khan, learned counsel for appellant contended that if there was any discrepancy in the draft sale-deed the same could have been altered by the Court as required by Order 21, rule 34 (3), C.P.C. It was further contended that the appellant had not committed any breach and therefore decree ought to have been executed. A perusal of the entire record shows that the appellant was seeking to execute a consent decree in which all particulars and details including the rate at which land was to be sold, the area of the land and the time for payment of price as well as for execution of sale-deed were provided. In spite of such clear and unambiguous terms recorded the appellant submitted a sale-deed which was completely contrary to the agreement.

Furthermore, the payment made by the appellant was also not in accordance with the agreement as it ought to have been made to Ch. Muhammad Amin. The learned counsel contended that Ch. Muhammad Amin was the attorney of Ch. Rehmat All and therefore the appellant thought it proper to pay to Ch. Rehmat All as it was possible that power-of-attorney may have been cancelled. This was merely a presumption on the part of the appellant as in accordance with the decree payment was to be specifically made to Ch. Muhammad Amin without specifying that he was to receive it as attorney of Ch. Rehmat Ali. The learned counsel pointed out that an amended draft as well as a pay order as provided by the decree was submitted. It was too late to submit as the time fixed under the decree had expired. It is provided under the decree that in case the appellant failed to pay price to Ch. Muhammad Amin within the stipulated period, appellant's nominees will have the right to have the sale-deed executed in their favour. Thus, by default right of the nominees was created and the sale-deed could not be executed in favour of the appellant. A consent decree cannot be changed or altered unilaterally and without the consent of the other side, particularly when it relates to material consideration and conditions. Both the Courts below were therefore justified in refusing to grant execution of the decree.

5. The question whether the compromise decree could be enforced after appropriate adjustment may not be possible in the facts and circumstances of the case particularly when the time had been made essence of the contract with the consent of both the parties and on failure to pay the money as required a third party interest had been created. The appeal is dismissed.

Cited by 9 cases

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