LAHORE CANTONMENT COOPERATIVE HOUSING SOCIETY LIMITED, LAHORE, CANTT through Secretary vs Dr. NUSRAT ULLAH CHAUDHRY and others

SARDAR MUHAMMAD RAZA KHAN, J.--This Court vide order dated 18-7-1995 had granted leave to appeal to the Lahore Cantonment Cooperative Housing Society Limited, Lahore Cantt. (LCCHS), against the judgment dated 23-2-1994 passed by an Hon'ble Single Judge of the Lahore High Court in Writ Petition No,13258 of 1993, whereby the cancellation of contract between the parties by LCCHS was set aside and the writ petition filed by the respondents was accepted.

2. Relevant background of the case is that LCCHS entered into an agreement with Dr.Nusrat Ullah Chaudhry and Dr.Abdul Ahad for the construction of a hospital in the name and style of Messrs Nusrat Hospital in Lahore Cantonment Cooperative Housing Society. According to the terms of the agreement, land measuring 12 Kanals, 4 Marlas and 203 sq. Ft. At the rate of Rs,25,000 per Kanal was to be given by the LCCHS to the second party for the above purpose. The construction was to be completed and the hospital was to be made functional within three years of the signing of the agreement. The land was sold through a registered sale-deed in favour of the second party on 20- 1-1986 on payment of the entire cost on the following terms and conditions: "3(a). The member shall at his own cost and within a period of three years from the date of opening the Block for construction/or as permitted by the Society, complete/finish the construction upon the said plot commercial shop and/or such other construction in accordance with the plans and designs approved by the Society and Cannt Board. The member shall proceed strictly in accordance with the Construction Bye-Laws of the Society as amended from time to time. The member will also not violate the Cantonment Board's Construction Bye-Laws..

(b) In case the construction is not undertaken within a period of 12 months from the date of its approval or as provided in the ByeLaws/Construction Bye-Laws the member will be required to resubmit the drawings and the one previously approved will be deemed to have been cancelled.

(c) The member is required to complete the construction within 12 months of the approval of the drawings failing which the extension may be granted at the discretion of the Lahore Cantt.

Cooperative Housing Society Ltd. As per provisions of its Bye-Laws, decisions or Resolution in this behalf.

(d) In the event of failure to comply with any of the conditions/byelaws, the Managing Committee may impose fine, cancel membership, cancel the allotment of the plot or disconnect one or all services. Such punitive action may include any or all penalties." '

3. Some differences arose between the parties regarding necessary drawings the plan which continued for about three years and approved building plan was provided to the respondents on 26-12-1988. Owing to the aggravated differences, allegations and counter-allegations by the parties, the Managing Committee of LCCHS, on 16-1-1990, resolved to cancel the plot in dispute. The respondents in anticipation of the approval had started construction from 17-12-1988 but allegedly the water supply was disconnected.

4. After cancellation of the sale-deed LCCHS made a reference to the Registrar, Cooperative Societies, Punjab, Lahore, who, vide order dated 31-10-1992 upheld the cancellation of allotment.

Feeling aggrieved, the respondents filed a revision petition under section 64-A of the Cooperative Societies Act, 1925, before the Secretary, Cooperative Societies, Government of the Punjab, Lahore, which was rejected on 29-7-1993. The respondents challenged such order through a writ petition under Article 199 of the Constitution which, as said earlier, was accepted. Hence this appeal by LCCHS.

5. It is an admitted fact that what was challenged before the High Court under Article 199 of the Constitution was the cancellation of a contract. Both the parties had serious allegations against each other and each had accused the other for violating the terms and conditions of the contract.

What were the terms and conditions and how were those violated practically by any of the parties involves not one but numerous questions of fact which required the recording of evidence. Such disputed questions of fact pertaining to contractual liability could not be dealt with by the High Court in its Constitutional jurisdiction under Article 199 of the Constitution. In Secretary to the Government of the Punjab, Forest Department, Punjab, Lahore through Divisional Forest Officer v.

Ghulam Nabi (PLD .2001 SC 415-430) this Court has already held that disputed questions of fact cannot be gone into while exercising jurisdiction under Article 199 of the Constitution.

6. In Shah Wali v. Ferozuddin (2000 SCM R 718-722-B) and in Syed Asif Majeed v. A.D.C.(C) ASC (L), Lahore (2000 SCM R 998-1000-D) this Court has resolved that factual controversies should not be entered into while exercising jurisdiction under Article 199 of the Constitution. An investigation into disputed questions of fact was deprecated in Punjab Small Industries Corporation v. Ahmad Akhtar Cheema (2002 SCM R 549-553). The crux of all these findings is that whenever there is a disputed question of fact particularly referring to a contractual liability, it requires the extensive recording of evidence and hence only a Civil Court is competent to do that. As the recording of evidence is not permissible in exercise of writ jurisdiction, the very entertainment of writ petition in the circumstances is totally unwarranted. In Muhammad Mumtaz Masud v. House Building Finance Corporation (1994 SCM R 2287) and Shamshad Ali Khan v. Commissioner, Lahore (1969 SCM R 122- 123-A) this Court has already resolved and the same is once again reiterated that no writ can be filed to enforce contractual liability. In the instant case, the respondents had decidedly filed a writ petition in order to enforce contractual liability. In view of the known principles of law such contractual liability could not be enforced because with regard to the terms and conditions of the contract and with regard to numerous acts and allegations of the parties nothing could have been resolved without the recording of evidence. We are of the considered opinion that the writ petition in hand was unlawfully entertained. This alone is by itself sufficient to set aside the impugned order.

7. Let us see, in the interest of justice, as to what had been the respective conduct of the parties.

The respondents had submitted plan for construction in April, 1986 (page 51). Somehow or the other, the plan could not be agreed upon between the parties and thus, a revised plan was submitted in 1988. The same was sanctioned by LCCHS as well as the Cantonment Board on 26-12- 1988: It is pertinent to note at this juncture that the period of construction and completion of project numerously mentioned to be three years had already lapsed. The respondents filed an application (page 102) to the Secretary LCCHS on 17-12-1988 requesting the extension of time for a period of one year. It is still interesting to note that the extension was sought by the respondents themselves and they themselves considered a period of one year to be sufficient for the purpose. The same was granted on 18-12-1988 (page 104) and the respondents were, according to their own request, asked to complete the project and make the hospital functional by 31-12-1989.

8. No progress appeared to have been made and so a notice dated 1-7-1989 was issued. Another notice dated 10-7-1979 was issued but to no avail. It is proved from record that with regard to the extension of time which, of course, was the essence of the contract, a new agreement had been entered into between the parties as per request of the respondents. Such new agreement was considered to be a part and parcel of the previous one. It is quite amazing that in para. No,12 of the memo. Of writ petition (page 35), the very existence of the second agreement had been denied by the respondents with the plea that the signatures had been obtained on a blank stamp paper. It is quite inconceivable that the respondents are denying the extension of one year despite the fact that such extension was sought by themselves. This excuse of non-information is totally unfounded because in pursuance thereof they had already started construction as well which is admittedly available on the spot.

9. From the perusal of the terms and conditions of the first agreement as well as of the second agreement, one can conveniently derive that time was the essence of the contract but in spite thereof the same was extended through the second contract duly signed by the respondents. The LCCHS has favoured them yet they could not complete the construction and make the hospital functional even within the extended time. It was resolved between the parties that if such condition is not fulfilled the contract shall be liable to cancellation. So; was it cancelled.

10. The learned counsel for the respondents came up with a variety of objections. His first objection was that it was the appellant Society due, to which the delay was caused and had it been so material, they should have cancelled the contract immediately after the expiry of three years. He further added that entering into further contract by the appellant was a sufficient indicator of the fact that time was not the essence of the contract. We believe that the argument is without substance. The time was of the essence of contract, so much so, that the parties for the sake of extending the time had entered into second contract. It is a matter of common sense that whatever be the term or terms of a contract whether specific or general, whether of essence or otherwise, the same can be altered or modified with mutual consent of the parties. We are absolutely clear in our mind that in the instant case the parties had mutually agreed to extend the time period and the same was extended for the choice and benefit of the respondents. Due to the extension of time, the importance of the previous time frame had become redundant. The parties were now bound to follow the time frame mutually agreed upon between them in the second contract. The respondents unfortunately failed to comply with the terms and conditions within the time frame suggested by their ownselves.

11. The second argument was to the effect that the project could not be completed because the copy of the second agreement was not supplied to the respondents. This argument is destructive of the plea that no second agreement had ever been signed by the respondents. Moreover, the copy of the agreement was not at all necessary because when signed by the respondent each and every detail thereof was within the knowledge of the signatories and thus, the work could well be started immediately because the second agreement, anyway, was a part of public record. It is also pertinent to note that No-Objection Certificate was granted to the respondents the same day.

The stance so taken is also not material because the respondents had even started some minor construction. Had there been no second agreement, the commencement of construction would not have been possible or permitted.

12. The last argument was to the effect that the respondents could not commence or continue the construction because the appellant had disconnected the utilities like water and electricity. This also is out of place because the contract had been cancelled on 24-1-1990 while the utilities had been cut off on 21-12-1991, much after the cancellation of contract. It was very much provided in the terms and conditions of the contract, on two occasions, that if the conditions are not fulfilled or if those are violated, the same shall stand cancelled and the property shall revert back to the original owner.

13. In the circumstances, we are constrained to hold that the authorities had rightly cancelled the contract and the High Court had no jurisdiction to hold anything about a contractual liability for which the jurisdiction under. Article 199 of the Constitution could not be at all assumed. It is sad to note that a benevolent project of the construction of a hospital for public welfare could not be completed despite the lapse of 16-1/2 years. Accordingly, the impugned judgment dated 23-2-1994 of the High Court is set aside, the appeal is accepted and the order passed by the authority about cancellation of contract is upheld. The property in dispute had been earmarked for a benevolent purpose of giving treatment to the public at large and, therefore, it is directed that the same shall not be put to any other purpose. We direct that only hospital shall be constructed by the appellant Society itself on the entire plot in dispute within two years and no other use it shall be put to.