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2009 C L C 883

[Karachi]

Before Faisal Arab, J

MUHAMMAD NAVEED----Plaintiff

Versus

TEEJAYS EXCLUSIVE (PVT.) LTD. through Managing Director and another----


Respondents

Suit No.1038 of 2004, decided on 13th April, 2009.

(a) Specific Relief Act (I of 1877)---

----Ss. 8 & 43---Contract Act (IX of 1872), S.55---Specific performance of agreement for
sale of immovable property, suit for---Non-payment of balance price by plaintiff within
period fixed in agreement---Legal notice to defendant issued four weeks after expiry of
stipulated period repudiating agreement and forfeiting paid amount for such failure of
plaintiff---Plea of plaintiff that before payment of balance amount, defendant had to get
suit plot commercialized from Ministry of Works and Housing, which he had failed to do
so---Validity---Neither evidence on record nor agreement showed that defendant had
taken upon himself to get suit plot commercialized before its transfer in favour of
plaintiff---Parties at time of execution of agreement with mutual consent had deleted
clauses proposed by plaintiff regarding commercialization of suit plot by defendant---
Specific performance of such deleted clauses of agreement could not be enforced---
Plaintiff's failure to pay balance price within stipulated time on account of his improper
insistence on getting suit plot commercialized had established that he was not ready and
willing to complete sale transaction at relevant time in terms of agreement---Plaintiff was,
thus, not entitled to equitable relief of specific performance of contract---Suit was
dismissed in circumstances.

2003 YLR 2793; 1996 MLD 60; 2004 SCMR 584 and PLD 1995 SC 423 ref.

(b) Contract Act (IX of 1872)---

----Ss. 12 & 55---Immovable property, sale of, agreement for---Time as essence of such
contract---Determining factors stated.

Whether time is essence of contract or otherwise, can be ascertained from the terms of the
agreement and other attending circumstances. Generally in agreement for sale of
immovable property, time is not the essence of the contract. However, parties may
consciously bind each other for due performance within stipulated time and seek strict
compliance on failure of penal consequences provided in the agreement.

In a transaction for sale of immovable property, time is never considered to be of the


essence of the contract, unless it is specifically made so in the contract itself. Such a
contract continues to remain enforceable as it was before the expiry of the time specific
therein and continues to bind the parties.

(c) Specific Relief Act (I of 1877)---

----Ss. 8 & 37---Clause or stipulation in agreement imposing an obligation on a party---


Deletion of such clause or stipulation by parties consciously---Effect---Specific
performance of such stipulation could not be enforced.

(d) Specific Relief Act (I of 1877)---

---Ss. 18 & 40---Misrepresentation by promisor---Remedy of promisee---Scope---


Promisee might rescind contract with whatever deficiency as might be complained of---
Promisee could not be allowed to blow hot and cold in same breath.
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(e) Civil Procedure Code (V of 1908)---

---O. XXXIX, Rr.1 & 2---Temporary injunction, application for---Interpretation and


observations of Court while disposing of such application---Validity---Court while finally
deciding suit would not be bound to adopt such observation.

(f) Interpretation of documents---

---Nothing could be read in written contract more than what was written therein---No oral
term said to be orally agreed would be implanted or supplanted in written contract nor
could any party lead evidence to prove same---Principles.

When there is a written contract between the parties, then nothing can be read more than
what is written therein. No term said to be orally agreed is to be implanted or supplanted
in a written contract. It is also a rule of evidence, as laid down in Article 103 of Qanun-e-
Shahadat, 1984 that if the parties intend to add, vary, contradict or delete any term of a
written contract, then they must do this as well in writing. Any addition, variation,
contradiction or deletion of a written contract said to be arrived at by the parties orally, is
of no value and no party is even allowed to lead evidence to prove such oral agreement, if
it pertains to variation deletion or contradiction of any term of a written contract [Qanun-
e-Shahadat, 1984, Art.103].

(g) Contract Act (IX of 1872)---

----Ss. 43 & 55---Immovable property, sale of, contract for---Contract not specifically
making time essence thereof---Party defaulting to perform contractual obligations within
time specified in contract and then within notice period---Rights and remedies of
aggrieved party against defaulting party stated.

In a transaction for sale of immovable property, time is never considered to be of the


essence of the contract, unless it is specifically made so in the contract itself. Such a
contract continues to remain enforceable as it was before the expiry of the time specified
therein and continues to bind the parties.

A party cannot unilaterally put an end to such a contract. But then parties have to perform
their part of the obligation within reasonable time. A party cannot be allowed to enjoy the
entire duration of three years within which a suit for specific performance of the contract
can be brought before the Court. Even in contract, where no time for performance is
provided, section 46 of the Contract Act mandates that the same has to be performed
within reasonable time. In contract, where time is not of the essence and a party fails to
perform its contractual obligations within the specified time, then an aggrieved party has
to call upon the defaulting party to perform the contract within a reasonable period. This
is to be done by serving notice on the defaulting party, thereby making time essence of
the contract and gaining the option to unilaterally treat the contract as terminated at the
expiry of the notice period.

Where the seller fails to complete the transaction within the specific time, then the buyer,
at his option, may either choose to sue the seller for specific performance of the contract
and while doing so he may also seek damages, either in the alternative or in addition to
the relief of specific performance, against the seller or any loss that may have occasioned
to the buyer. However, on account of seller's failure to perform, the buyer also intends to
discharge himself of the obligations arising from the contract, then the buyer has to first
serve notice upon the seller giving him reasonable time to complete the transaction.
Serving of notice makes the time essence of the contract. In case, the seller still does not
come forward to complete the transaction within the notice period, the buyer becomes
entitled to treat himself discharged from his contractual obligations and seek return of all
monies that he has paid to the seller under the contract.

Where the buyer fails to complete the transaction within the specified time and the seller
intends that he (seller) should be discharged of his contractual obligations under the
contract, then the seller must also serve legal notice on the buyer in the same manner as
the buyer is to serve on the seller. When buyer fails to perform his contractual obligations
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within the notice period, the seller stands discharged of his contractual obligations. He
then becomes entitled to forfeit the earnest money and, at his option, sue the buyer for
damages for any loss that may have occasioned to the seller on account of non-
performance of the contract by the buyer.

A notice period of at least thirty days is reasonable period of time for making time
essence of the contract within which a defaulting party has to complete the transaction. A
party who seeks discharge of its obligations arising from the contract need not have to
serve notice in the manner stated above, when the other party has already communicated
in writing its refusal to perform the contract. The refusal in writing by a defaulting party
by itself demonstrates inappropriate conduct, justifying unilateral rescission of the
contract by the aggrieved party, in case it does not wish to seek specific performance of
the contract. Thus, upon refusal in writing, the contract instantly becomes voidable at the
option of the aggrieved party. This difference between the refusal in writing to perform
the contract and failure to perform must always be kept in mind. Therefore, in order for
an aggrieved party to discharge itself of the obligations arising from the contract, notice is
required to be served on the defaulting party only when there is failure of the defaulting
party to perform its contractual obligations and not when there is outright refusal in
writing.

Where a seller either fails or refuses to convey the plot and the buyer is interested in
seeking conveyance of the property, then in order for the buyer to succeed in his suit for
specific performance, it is incumbent upon the buyer to demonstrate that he is-and at all
material times was ready and wiling to perform his part of the contract. One of the
requirement of demonstrating readiness and willingness of the buyer is that he does not
keep quiet for weeks altogether merely because the seller has either failed to perform his
contractual obligations or through his improper conduct has avoided or unnecessarily
sought extension in the completion of the transaction. If the seller fails to perform his
contractual obligations within the specified time, then immediately after expiry of the
stipulated period, the buyer should diligently seek enforcement of his rights under the
contract by calling upon the seller in writing to complete the transaction. The Court
would not grant the decree for specific performance merely because statute of limitation
entitles a buyer to file suit for specific performance within three years from the date
stipulated in the contract for its performance. After the expiry of the time specified in the
contract, if the buyer unnecessarily tries to extend finalization of the transaction on
unwarranted grounds, then in such eventuality, the Court shall deny the buyer the relief of
specific performance of the contract.

Thus, the failure on the part of the buyer may not entitle the seller to unilaterally
repudiate the contract without first serving notice in the manner stated above.

In case, the undue avoidance to complete the contract on the part of the buyer is ignored
on the ground that time is not the essence of the contract, then it would amount to
thrusting the contract upon the seller for no fault of his own. This may result in
irreparable financial loss to the seller. Immovable properties are sold for no ordinary
reasons. In the present day, inflationary economy, the prices of real estate fluctuate
rapidly. If the conduct of the buyer which is intended to unnecessarily protract the
finalization of the transaction is overlooked or condoned, then the same may unduly
benefit the buyer on the one hand and at the same time keep the seller tied to the contract
to his disadvantage. This would certainly create inequitable balance between the two
contracting parties leading to miscarriage of justice. Therefore, once undue avoidance to
complete the transaction on the part of the buyer, at any material stage, is established, the
Court has to assume that the buyer has failed to demonstrate that he was ready and
willing to perform his part of the contract. This assumption is to be made irrespective of
the fact that time was not of the essence of the contract and the seller had not put an end
to the contract by serving notice upon the buyer. Thus, when it is established that any
stage that the buyer was not ready and willing to perform his part of the bargain, then the
Court would not thrust upon the seller the contract for the reason that time is not of the
essence of the contract, but it would deny the buyer the discretionary and equitable relief
of specific performance of the contract.

(h) Specific Relief Act (I of 1877)---

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----S. 8---Contract Act (IX of 1872), S.73---Specific performance of agreement for sale of
land, suit for---Agreement giving right to defendant to forfeit advance money paid to him
and cancel agreement on plaintiff's failure to pay balance price within stipulated time---
Cancellation of agreement and forfeiture of entire money by defendant on plaintiff's such
failure including other payments made subsequently after payment of advance money---
Validity---Defendant was entitled to forfeit only advance money already paid---
Subsequent payments could not be termed as advance money---Court while dismissing
plaintiff's suit directed defendant to pay back amount subsequently paid and restrained
him from selling suit-land till repayment of such amount to plaintiff.

H.A. Rehmani for Plaintiff.

Ch. A. Rasheed for Defendants.

Dates of hearing: 19th February and 2nd March, 2009.

JUDGMENT

FAISAL ARAB, J.--- The defendant No.1 is owner of Plot No.2/232-B, PECHS, Karachi,
admeasuring 1000 square yards. On 31-3-2004 defendant No.1 agreed to sell the said plot
to the plaintiff for a total sale consideration of Rs.31,500,000. The plaintiff paid a sum of
Rs.5,00,000 as advance. Then on 7-4-2004 the parties executed a formal agreement to sell
and at that time a further payment of Rs.45,00,000 was made to defendant No. 1. It was
one of stipulations of the agreement that within 60 days of the execution of the agreement
a further payment of Rs.50,00,000 would be made to defendant No.1. Such payment was
however made on 8-7-2004. The balance sale consideration amount of Rs.2,15,00,000
was to be paid on or before 8-8-2004.

2. Upto the expiry of the period specified in the contract i.e. 8-8-2004, the transaction
was not finalized. It was four weeks after the expiry of the stipulated date that the
defendant No.1 through his counsel served a legal notice, dated 6-9-2004 on the plaintiff
and repudiated the contract for the reason that the plaintiff had failed to pay the balance
sale consideration within the stipulated period. The defendant No.1 also forfeited the
entire amount of ten million rupees which the plaintiff had paid from time to time under
the agreement. The plaintiff vide its counsel's legal notice, dated 9-9-204 responded to
defendant No. 1 legal notice, dated 6-9-2004. In the reply, the plaintiff laid the entire
blame for non-completion of the transaction on the defendant No. 1. After exchange of
these notices, the plaintiff filed the present suit on 14-9-2004 seeking specific
performance of the contract.

3. In paragraph 3 of the plaint, the plaintiff averred that defendant No.1 at the time of
execution of the Sale Agreement gave assurance that the suit plot has been
commercialized and only formality that is left is the payment of commercialization
charges that are to be paid to the Ministry of Works and Housing, Government of
Pakistan and the plaintiff on the basis of such assurance agreed to purchase the suit
property. In paragraph 4 of the plaint it was further averred that defendant No.1 supplied
title and other documents of the suit plot to the plaintiff and thereafter he invited
objections through publication made in Daily Dawn. In paragraph 5 of the plaint, the
plaintiff has stated that he then called upon defendant No.1 to provide copies evincing
commercialization of the suit plot but the defendant No.1 failed to do so on one pretext or
the other and kept prolonging the matter. The plaintiff in the said paragraph also stated
that he is ready and willing to pay the balance sale consideration but as defendant No.1
failed to get the suit plot commercialized, the transaction could not be finalized.

4. The defendants in their written statement took the plea that as the plaintiff failed to
make the balance sale consideration within the stipulated time i.e. 8-8-2004, the
agreement stood terminated and the amount paid under the contract stood forfeited.

5. The parties submitted following consent issues, which were adopted by the Court:---

(1) Whether suit is barred under section 21 of Specific Relief Act?

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(2) Whether the plaintiff committed breach of the terms of the Agreement to sell, dated 7-
4-2004, if so its effect?

(3) Whether the subject plot of land has been duly commercialized, if not, its effect on the
performance by the plaintiff of the terms of the said agreement?

(4) Whether the sale agreement is still in operation or it has become a dead letter?

(5) Whether the purported cancellation of the said agreement by the defendants is legal
and valid?

(6) What should the decree be?

6. No argument was advanced on issue No.1. The Issues Nos.2 to 5 are interconnected
and therefore they are taken up together.

Issues Nos.2 to 5.

7. The plaintiff in his affidavit in evidence mainly reiterated what has been stated that in
the plaint. In paragraph 8 of his affidavit in evidence the plaintiff has stated that he asked
the defendants to supply him with the copies of the relevant documents to show that
commercialization of the plot has been completed so that he may be able to pay the
balance sale consideration but the defendants kept him on false hopes. In paragraph 12 of
his affidavit-in-evidence it is stated that the plaintiff failed to complete the formalities for
the commercialization of the suit property.

8. The defendant No.2, the managing director of defendant No.1 examined himself. He
reiterated the contents of the written statement and stated that plot was already
commercialized by K.B.C.A and nothing more was to tie done by him and it was the
plaintiff who failed to complete the transaction.

9. Learned counsel for the plaintiff Mr. H.A. Rehmani argued that the plaintiff at all
material times was ready and willing to purchase the property; the balance sale
consideration was not paid to defendant No.1 for the reason that the suit plot was
purchased as commercial plot and the process of commercialization was not completed
by defendant No.1 within the time specified in the contract. He submitted that the
defendant No.1 ought to have completed the process of commercialization and only then
it was entitled to the payment. In this regard learned counsel referred to Exhibits P.4, P.5
and P.9 these were produced in evidence in order to show that commercialization of the
suit plot was yet to be completed. Learned counsel finally submitted that irrespective of
the fact that the defendant No.1 failed to get the plot commercialized as undertaken by it
at the time of execution of the sale agreement, the plaintiff is prepared to take the suit plot
with its present status as he do not want to run the risk of getting the entire contract
declared to have been frustrated due to non-commercialization. In support of his case
learned counsel for the plaintiff has relied upon the cases reported in 2003 YLR 2793,
1996 MLD 60, 2004 SCMR 584 and PLD 1995 SC 423.

10. Learned counsel for the defendants, on the other hand, argued that at the time of
execution of the contract, suit plot was already commercialized by Karachi Building
Control Authority and approval for construction of a commercial building was also
obtained and the defendant No.1 agreed to sell it with its existing status. He, therefore,
submitted that under the contract defendant No. 1 was not required to take any step for
getting the suit plot commercialized from the Ministry of Works and Housing,
Government of Pakistan. He explained this by submitting that it was for this reason that
clauses 6 and 7 of the agreement that were proposed by the plaintiff were scored off and
this deletion clearly demonstrates that the defendant No.1 was not required to take any
further step for commercialization. He further stated that even in the legal notice, dated 9-
9-2004, the plaintiff has nowhere mentioned that the defendant No.1 has failed to
commercialize the suit plot which further shows that no commercialization, as claimed by
the plaintiff, was to be carried out by defendant No.1. He concluded his arguments by
submitting that it was the plaintiff who avoided completion of transaction within the
stipulated time without any lawful justification and therefore the plaintiff having failed to
establish that he at all material times was ready and willing to purchase the plot, he is not
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entitled to the equitable relief of specific performance. He prayed for the dismissal of the
suit.

11. Mr. H.A. Rehmani in reply to the arguments of Defendants' counsel argued that the
plaintiff statements made in his affidavit-in-evidence with regard to commercialization
have gone unchallenged. He also argued that the outright refusal on the part of the
defendant No.1 to complete the transaction in its legal notice, dated 6-9-2004
demonstrate that it was the defendant No.1 and not the plaintiff who refused to complete
the sale transaction. He therefore submitted that the plaintiff is entitled to the relief of
specific performance and suit be decreed.

12. It has come in evidence that before the execution of sale agreement, the defendant
No.1 got the suit pot commercialized from Karachi Building Control Authority and
certain steps were also taken for getting it commercialized from the Ministry of Works
and Housing, Government of Pakistan but his process of commercialization from
Ministry of Works and Housing, was not finalized. It has also come in evidence that at the
time of execution of sale agreement, the defendant No.1 did not take upon itself to get the
suit plot commercialized from the Ministry of Works and Housing, Government of
Pakistan. On the contrary clauses 6 and 7 of the agreement to sell as originally proposed
by the plaintiff in this regard was deleted with the consent of the parties as defendant No.
1 was not agreeable to take upon itself the remaining process of commercialization from
the Ministry of Works and Housing, Government of Pakistan. The whole case of the
plaintiff in the plaint and in evidence was that there was an agreement that defendant
No.1 would get the suit plot commercialized from Ministry of Works and Housing,
Government of Pakistan and only thereafter the plaintiff was obliged to make payment of
the balance sale consideration. In his cross-examination, the defendant No.2, who is
managing director of defendant No.1, has stated that when he noticed clause 6 of the
agreement to be contrary to what was agreed upon between the parties, he sought its
omission. This piece of evidence has gone unchallenged.

13. Furthermore, this Court while hearing the injunction application C.M.A. No. 6360 of
2004 also took note of the legal effect of such deletion and dismissed the injunction
application vide order, dated 12-9-2005. I shall reproduce relevant paragraphs of this
order, which is authored by my learned brother Mr. Mushir Alam J:---

(5) Mr. Afsar Abidi learned counsel of the plaintiff contends that it was represented that
plot is commercial. According to him the plot is still residential and, therefore, unless the
commercialization is effected the plaintiff is not obliged to pay balance consideration. It
was further stated that defendants failed to fulfil their obligation under the agreement and
cannot be allowed to wriggle out on any count whatsoever.

(6) It was contended that, time was essence of the contract. Penal clause in the agreement
required that on failure to make payment on or before the date as fixed by mutual
agreement, the defendants were entitled to forfeit the amount. It was further urged that,
much after the deadline fixed in the agreement (i.e. 8-8-2004) through a notice, 6-9-2004
(page 41 of the file) he was called upon to pay the damages as stipulated in the
agreement. It was therefore urged that, to counter such demand for damages instant suit
has been filed. Learned counsel for the defendants contends that the defendants are
entitled for the recovery of the damages as stipulated under the penal clause and that no
case for specific performance is made out.

(8) Whether the time is essence of contract or otherwise, could be ascertained from the
terms of the agreement and other attending circumstances. Generally in agreement for
sale of immovable property, time is not the essence of the contract. However, parties may
consciously bind each other for due performance within stipulated time and seek strict
compliance on failure penal consequence may be provided in the agreement.

(9) Mr. Abidi was confronted as to whether at any point in time, plaintiff demanded
copies of plot documents or demanded that conversion of the residential plot into
commercial be procured as was urged before this Court now. In response Mr. Abidi took
me through reply to legal notice, dated 9-9-2004. He also extensively read the agreement
of sale and emphasized clauses 4 and 14 of the agreement. For the benefit of appreciation
clauses I to 5 and 14 are reproduced hereinunder:---
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-----(sic)-----

(10) On examination of clause I above, it is apparent that, time for completion of


transaction was fixed as 8-8-2004. Time for finalization of transaction was again
specifically mentioned in clause 5 to be on or before 8-8-2004.

(11) Contention of Mr. Abidi that copies of the documents were not provided to ascertain
title of the defendant that caused delay in finalization. Contentions appears to be
afterthought, no such demand was made by the plaintiff in reply to legal notice, I have
gone through the reply with learned counsel for the plaintiff. Mr. Abidi was not able to
read out a single sentence as regard non supply of title documents. Even otherwise such
assertion raised now cannot be given any credence. In terms of clause 4, as reproduced
above, documents of title were required "for examination and verifications for
completion of the sale transaction and publication in local newspaper". On his own
showing, plaintiff placed advertisement in daily Dawn, dated 29-7-2004 inviting
objections to the proposed transaction of sale of commercial property. Admittedly, no
objections were received. Advertisement in normal and natural course of events must
have been placed after receiving copies of title of documents. In para.4 of the plaint
plaintiff admits to have received the copies of the title documents. It does not sound to
reason that a person entering into sale transaction of a valuable plot and paying
substantial advance would enter into any deal without verifying title of the vendor.

(12) Adverting to other contention of Mr. Abidi that the defendant misrepresented that
subject plot is commercial as appears from the recital of the agreement. It was urged that
it is defendants who are in breach, therefore, plaintiff cannot be made to suffer for no
fault on his part. Arguments seemingly persuasive, when examined were found to be
fallacious. I have gone through entire agreement with the learned counsel. Indeed subject
plot in the recital has been described as "Commercial Plot of land bearing No.2/232-B,
measuring 1000 square yards" preceding words "building constructed on" have been
scored off. Clauses 6 and 7 of the agreement specifically stipulating the obligation on the
part of the defendant for payment of commercialization dues to "concerned departments"
has been specifically deleted and initialed by both the parties. It cannot therefore, be
asserted that defendant misrepresented the suit plot to be commercial plot or that, it was
obligatory on the part of defendants to obtain commercialization. Once the parties
consciously delete a clause or stipulation, in the agreement, imposing any obligation on
any of the party, specific performance of such stipulation cannot be enforced. Plaintiff
will not succeed even if plea of misrepresentation on the part of defendant is taken on its
face value. In case of misrepresentation by promisor, the promisee at his option may
rescind the contract with whatever deficiency as may be complained of. Promisee cannot
be allowed to blow hot and cold in the same breath. Plaintiff cannot have the cake and eat
it as well.

14. This Court while finally deciding the suit need not necessarily have to adopt the
interpretation and observations that are made by the Court while disposing of injunction
application but then nothing has come in evidence to deviate from such interpretation. It
is an admitted position that clauses 6 and 7 of the agreement were deleted at the time of
execution of the agreement to sell. It is well-settled principle of interpretation that when
there is a written contract between the parties then nothing can be read more than what is
written therein. No term said to be orally agreed is to be implanted or supplanted in a
written contract. It is also a rule of evidence, as laid down in section 103 of Qanun-e-
Shahadat Order, 1984, that if the parties intend to add, vary, contradict or delete any term
of a written contract then they must do this as well in writing. Any addition, variation,
contradiction or deletion of a written contract said to be arrived at by the parties orally, is
of no value and no party is even allowed to lead evidence to prove such oral agreement if
it pertains to variation, deletion or contradiction of any term of a written contract. I have
examined the terms of the agreement to sell in some detail in order to see if there was any
agreement to sell in some detail in order to see if there was any stipulation under which
the defendant No. 1 had taken upon itself to get the plot commercialized from Ministry of
Works and Housing, Government of Pakistan, before it could be transferred to the
plaintiff and I have found that there is none. The stipulation in the form of clauses 6 and 7
were scored off at the time of execution of the agreement to sell thus there was nothing to

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show that it was the defendant No.1 which failed to fulfil any obligation under the
contract that prevented the plaintiff from finalizing of the transaction.

15. It has undisputedly come on record that plaintiff was not agreeable to complete the
transaction unless the suit plot is commercialized from Ministry of Works and Housing,
Government of Pakistan. This insistence on the part of the plaintiff was not based on any
stipulation in the contract. This establishes the fact that the plaintiff was not ready and
willing to complete the sale transaction. At the stage of arguments, the plaintiff dropped
his demand for commercialization but then it would not wipe out the fact that at the
relevant time, the plaintiff has failed to demonstrate his readiness and willingness to
complete the transaction in terms of the cont act. I would now examine the question as to
what is the legal effect of unwarranted avoidance on the part of a party to a contract and
what are the rights and obligations of the parties to a contract for sale of immovable
property?

16. In a transaction for sale of immovable property, time is never considered to be of the
essence of the contract unless it is specifically made so in the contract itself. Such a
contract continues to remain enforceable as it was before the expiry of the time specified
therein and continues to bind the parties. A party cannot unilaterally put an end to such a
contract. But then parties have to perform their part of the' obligation within reasonable
time. A party cannot be allowed to enjoy the entire duration of three years within which a
suit for specific performance of the contract can be brought before the Court. Even in
contracts where no time for performance is provided, section 46 of the Contract Act
mandates that the same has to be performed within reasonable time. In contracts where
time is not of the essence, and party fails to perform its contractual obligations within the
specified time then an aggrieved party has to call upon the defaulting party to perform the
contract within a reasonable period. This is to be done by serving notice on the defaulting
party, thereby making time essence of the contract and gaining the option to unilaterally
treat the contract as terminated at the expiry of the notice period.

17. Where the seller fails to complete the transaction within the specified time then the
buyer, at his option, may either choose to sue the seller for specific performance of the
contract and while doing so he may also seek damages, either in the alternative or in
addition to the relief of specific performance, against the seller for any loss that may have
occasioned to the buyer. However, on account of seller's failure to perform, the buyer also
intends to discharge himself of the obligations arising from the contract then the buyer
has to first serve notice upon the seller giving him reasonable time to complete the
transaction. Serving of notice makes the time essence of the contract. In case the seller
still does not come forward to complete the transaction within the notice period, the
buyer becomes entitled to treat himself discharged from his contractual obligations and
seek return of all monies that he has paid to the seller under the contract.

18. Where the buyer fails to complete the transaction within the specified time and the
seller intends that he (seller) should be discharged of his contractual obligations under the
contract then the seller must also serve legal notice on the buyer in the same manner as
the buyer is to serve on the seller. When buyer fails to perform his contractual m
obligation within the notice period, the seller stands discharged of his contractual
obligations. He then becomes entitled to forfeit the earnest money and, at his option, sue
the buyer for damages for any loss that may have occasioned to the seller on account of
non-performance of the contract by the buyer.

19. Now that should be the reasonable notice period to make time the essence of the
contract which otherwise was not? In my view a notice period of at least thirty days is
reasonable period of time for making time essence of the contract within which a
defaulting party has to complete the transaction. It may however be clarified that a party
which seeks discharge of its obligations arising from the contract need not have to serve
notice in the manner stated above, when the other party has already communicated in
writing its refusal to perform the contract. The refusal in writing by a defaulting party by
itself demonstrates inappropriate conduct, justifying unilateral rescission of the contract
by the aggrieved party, in case it does not wish to seek specific performance of the
contract. Thus upon refusal in writing, the contract instantly becomes voidable at the
option of the aggrieved party. This difference between refusal in writing to perform the
contract and failure to perform must always be kept in mind. Therefore, in order for an
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aggrieved party to discharge itself of the obligations arising from the contract, notice is
required to be served on the defaulting party only when there is failure of the defaulting
party to perform its contractual obligations and not when there is outright refusal in
writing.

20. It may however be further clarified that where a seller either fails or refuses to convey
the plot and the buyer is interested in seeking conveyance of the property, then in order
for the buyer to succeed in his suit for specific performance, it is incumbent upon the
buyer to demonstrate that he is and at all material times was ready and willing to perform
his part of the contract. One of the requirements of demonstrating ready and willingness
of the buyer is that he does not keep quiet for weeks altogether merely because the seller
has either failed to perform his contractual obligations or through his improper conduct
has avoided or unnecessarily sought extension in the completion of the transaction. If the
seller fails to perform his contractual obligations within the specified time, then
immediately after expiry of the stipulated period, the buyer should diligently seek
enforcement of his rights under the contract by calling upon the seller in writing to
complete the transaction. The Court would not grant the decree for specific performance
merely because statute of limitation entitles a buyer to file suit for specific performance
within three years from the date stipulated in the contract for its performance. After the
expiry of the time specified in the contract if the buyer unnecessarily tries to extend
finalization of the transaction on unwarranted grounds, then in such eventuality, the Court
shall deny the buyer the relief of specific performance of the contract.

21. Thus, the failure on the part of the buyer may not entitle the seller to unilaterally
repudiate the contract without first serving notice in the manner discussed earlier, but
failure on the part of the buyer coupled with improper insistence on getting the suit plot
commercialized has certainly established that he was not ready and willing to perform his
contractual obligations at all material times thereby disentitling him the equitable relief of
specific performance of the contract. In case the undue avoidance to complete the
contract on the part of the buyer is ignored on the ground that time is not the essence of
the contract then it would amount to thrusting the contract upon the seller for no fault of
his own. This may result in irreparable financial loss to the seller. Immovable properties
are sold for no ordinary reasons. In the present day inflationary economy, the prices of
real estate fluctuate rapidly. If the conduct of the buyer which is intended to unnecessarily
protract the finalization of the transaction is overlooked or condoned, then the same may
unduly benefit the buyer on the one hand and at the same time keep the seller tied to the
contract to his disadvantage. This would certainly create inequitable balance between the
two contracting parties leading to miscarriage of justice. Therefore, once undue
avoidance to complete the transaction on the part of the buyer, at any material stage, is
established, the Court has to assume that the buyer has failed to demonstrate that he was
ready and willing to perform his part of the contract. This assumption is to be made
irrespective of the fact that time was not the essence of the contract and the seller has not
put an end to the contract by serving notice upon the buyer. Thus, when it is established
that at any stage that the buyer was not ready and willing to perform his part of the
bargain, then the Court would not thrust upon the seller the contract for the reason that
time is not the essence of the contract but it would deny the buyer the discretionary and
equitable relief of specific performance of the contract.

22. In view of the above discussion, I am of the considered view that the plaintiff, without
any contractual or lawful excuse, insisted on defendant No.1 to complete the
commercialization of the suit plot from Ministry of Works, Government of Pakistan when
there was no such stipulation in the agreement to sell. The suit plot was commercialized
by Karachi Building Control Authority. The fact that it would have gained complete
commercial status when it is also commercialized from Ministry pf Works, Government
of Pakistan is a different matter. The suit plot in its present form was still transferable and
sellable and this is what has been agreed to be sold by defendant No. 1. The insistence of
the plaintiff on its commercialization from Ministry of Works demonstrates that he
wanted to read into the contract a stipulation which was not there. In fact clauses to that
effect, which were proposed by the plaintiff, were s scored off with the consent of both
the parties at the time of execution of the agreement. All this goes to show that it was the
plaintiff who avoided the completion of the transaction without any just cause and
therefore proved that he, at all material times, was not ready and willing to perform his
part of the contract. The case-law cited by the plaintiff's counsel pertain to the legal
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questions and principles that (i) mere fact that time fixed in the contract for performance
does not make it the essence of the contract (ii) vendee not bound to make payment of
balance consideration till the vendor has put the property in condition in which the same
is to be conveyed (iii) under building regulations which authority is to issue final NOC.
There is no cavil with the ratio of these decisions but in view of the findings on fact, as
has been discussed above, the plaintiff has failed to establish that defendant No.1 was
contractually obligated to get the suit plot commercialized from Ministry of Works and
Housing, Government of Pakistan. The plaintiff therefore has failed to successfully
demonstrate that he at all material times was ready and willing to perform his part of the
contractual obligation. Therefore, the case-law cited by plaintiff's counsel is of no help to
the plaintiff's case. Hence, the plaintiff is not entitled to the relief of specific performance.
The Issues Nos.2 to 5 are answered accordingly.

23. However it is noticed that under clause 3 of the agreement defendant is entitled to
forfeit only such amount which was paid to him in advance. Clause 3 reads as follows:-

"Clause 3. Similarly if the Vendee fails to perform his part of commitment or fails to
make payment of the balance sale consideration within stipulated time the vendor shall be
entitled to forfeit the advance money already paid by the Vendee to the Vendor and the
agreement shall be treated as cancelled."

24. Under clause 3 of the agreement it was stipulated that in case the purchaser fails to
perform his part of the obligation, the seller shall be entitled to forfeit the advance money
already paid by the purchaser to the seller. A sum of Rs.5,00,000 only was paid as
advance money. It is this sum only which is to be forfeited. The other payments were
made subsequently after the payment of the advance sum of Rs.5,00,000 was paid and
therefore such other payments amounting to Rs.95,00,000 cannot be termed as advance
payment. The defendant No.1 therefore is entitled to forfeit Rs.5,00,000 only. The
defendant No.1 is directed to return the remaining amount of Rs.95,00,000 back to the
plaintiff within 45 days from the date hereof. In case defendant No.1 fails to make the
payment within 45 days, the executing Court shall effect its recovery from the sale of the
suit plot, after due notice to the defendants. Till recovery of the said amount, the
defendants are restrained from selling the suit plot.

25. The suit is dismissed in the above terms.

S.A.K. /M-74/K Suit dismissed.

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2007 Y L R 916

[Peshawar]

Before Ijaz-ul-Hassan Khan, J

AMIR KHAN---Appellant

Versus

AJAB KHAN and others---Respondents

R.F.A. No.32 of 2005, decided on 6th November, 2006.

Specific Relief Act (I of 1877)---

----Ss. 42 & 54---West Pakistan Land Revenue Act (XVII of 1967), S.52---Suit for
declaration, permanent injunction and recovery of amount of sale
consideration---Plaintiff claiming declaration to the effect that he was owner in
possession of suit property and that sale mutations attested in favour of
defendants, were illegal and being based on fraud were ineffective on the rights
of plaintiff and liable to cancellation-Plaintiff in the alterative had prayed for
recovery of amount as sale price of suit property and demanded. grant of
permanent injunction restraining defendants from interfering in his possessory
rights etc.---Validity---Onus regarding non-payment of sale consideration, was
heavily placed on the shoulders of plaintiff, but he had failed to discharge the
same through cogent and convincing evidence---Plaintiff had to prove his case
from his own evidence and he could not benefit from the weakness of
defendant's case---Evidence produced by plaintiff in support of his claim was
discrepant and suffered from serious infirmities and flaws, which had rightly
been discarded by the Trial Court for valid reasons---Trial Court adverted to
every aspect of the case, rightly discussed the issues and rendered reasoned
judgment, which was not open to exception---Evidence showed that mutation in
question had been attested in 'Jalsa aam' in the presence of Revenue officials,
marginal witnesses to the mutations and same were duly thumb impressed by
the plaintiff---Mere assertion of plaintiff that sale consideration was not paid to
him and same was delayed by defendants for one reason or the other without a
positive attempt on his part to substantiate same, was of no consequence---Entry
made in Record of Rights in accordance with law for the time being in force,
must be presumed to be correct, until contrary was proved or a new entry was
lawfully substantiated therefor--Mere fact that sale consideration had not
changed hands in presence of Revenue Officials, by itself, could not be
considered a ground to believe the claim of plaintiff---Law did not require that
sale consideration must be paid by the purchaser to the owner in presence of
Revenue Officials---Impugned judgment passed by the Trial Court whereby suit
filed by plaintiff was dismissed, was neither contrary to evidence on record nor
in violation of the principle of administration of justice---Appeal against said
judgment, was dismissed, in circumstances.

PLD 1986 SC (AJ&K) 109; Muhammad Sadiq and 2 others v. Barkat Ali and 4
others 1990 CLC 533; Rana Muhammad Shabbir (deceased) through his 10 L.Rs.
v. Muhammad Ismail and 3 others 1990 CLC 546 and Allah Dad v. Government
of Pakistan and 53 others 1989 CLC 1571 rel.

Iftikhar Butt for Appellant.

Miss Nusrat Yasmeem for Respondents.

Date of hearing: 6th November, 2006.

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JUDGMENT

IJAZ-UL-HASSAN KHAN, J.--This appeal is directed against the judgment and


decree dated 16-2-2005, passed by learned Civil Judge, Peshawar, whereby suit
of Amir Khan, plaintiff-appellant for declaration-cum-injunction and recovery of
Rs.12,50,000 as price of suit property, was dismissed, mainly on the ground that
claim of the plaintiff-appellant was not substantiated by cogent and convincing
evidence.

2. The litigation between the parties started when Amir Khan plaintiff-appellant
instituted suit against Ajab Khan and others, defendants-respondents, in the
Court of Senior Civil Judge, Peshawar, claiming a declaration to the effect that
plaintiff was owner in possession of suit property measuring 1 Kanal, 10 Marlas,
bearing Khasra Nos.660, .772 and 82613 situate in `Mauza' Laram, Tehsil and
District Peshawar, and sale Mutations Nos.6023, 6024, 6025 and 6026, attested on
13-6-1997, in favour of the defendants-respondents, were void, illegal, based on
fraud and thus ineffective on the rights of the plaintiff-appellant and liable to
cancellation. In the alternative, the plaintiff-appellant also prayed for recovery of
Rs.12,50,000 as sale price of suit property. The plaintiff-appellant further prayed
for grant of permanent injunction, restraining defendants-respondent from
interfering in his possessery rights or alienating the property in suit .in any
manner.

3. It was averred in the plaint that plaintiff constructed a house over suit
property and sold the same in favour of defendant No. 1, in consideration of
Rs.12,50,000 but payment of sale price was delayed on one pretext or the other,
which led the plaintiff to file suit:

4. The defendants appeared in Court and resisted the suit on all grounds, legal as
well as factual. They repudiated the assertions of the plaintiff and claimed to
have paid him the entire sale consideration of suit property. In view of divergent
pleadings of the parties, following issues were framed:--

(1) Whether the plaintiff has got a cause of action?

(2) Whether the plaintiff is estopped to sue as Mutations Nos.6023, 6024, 6025,
6026 dated 13-6-1997 have been attested by plaintiff at "Jalsa Aam" and at the
same .time mutations were entered in their names by him and sale consideration
of the suit property was received by him?

(3) Whether the suit requires summary dismissal under Order VII, rule 11, C.P.C.
for want of proper court-fee?

(4) Whether the suit is infructuous in its present form?

(5) Is the suit within time?

(6) Whether the suit is bad for misjoinder/non-joinder of necessary parties?

(7) Whether the plaintiff has instituted this suit so as to harass the, defendants as
such the defendants are entitled to receive special costs?

(8) Whether the suit house is in possession of tenants namely, Naeem Gul, Juma
Gul, Raj Muhammad, Faqir Muhammad and Wazir Gul and plaintiff has got no
possessery rights over it?

(9) Whether the plaintiff is entitled to the decree for declaration to the effect that
he is still owner of suit property measuring 1 Kanal, 10 Marlas out of the total of
8 Kanals, 13 Marlas and Mutations Nos.6023, 6024, 6025 and 6026 dated 13-6-
1997 requires cancellation, as the same are ineffective upon his rights?
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(10) Whether plaintiff is entitled to recover an amount of Rs.12,50,000 from
defendants in alternate?

(11) Whether the plaintiff is entitled to the permanent injunction as prayed by


him in (jeem) of the plaint?

(12) Whether the plaintiff is entitled to the decree as prayed for?

(13) Relief.

5. At the conclusion of trial, learned Civil Judge, Peshawar, seized of the matter,
decided Issues Nos. 1, 9, 10, 11 and 12 together and found the same in negative,
holding that plaintiff has not been able to substantiate his claim through strong
and cogent evidence. Having held so, suit was dismissed through the impugned
judgment and decree, as mentioned and detailed above.

6. Mr. Iftikhar Butt, Advocate, appearing on behalf of the appellant contended


that judgment of the trial Court is tainted with illegality of misreading of
evidence and suffers from the defect of material irregularity and run counter to
the evidence on the file and as such, is not sustainable at law. The learned
counsel submitted that sufficient material was available on the file in support of
the appellant's claim, which has not been appreciated in its true perspective and
instead shaky and defective evidence of the respondents has been given undue
weight, which has resulted in manifest injustice. In this regard, reliance was
placed on. PLD 1986 SC (AJ&K) 109.

7. Miss Nusrat Yasmin, Advocate of the respondents, on the other hand, refuted
the arguments of learned counsel for the appellant and supported the impugned
judgment and decree whole heartedly.

8. I have heard at length arguments and submissions of learned counsel for the
parties and perused the record with their able assistance.

9. It is established principle of civil law that the plaintiff has to prove his case
from his own evidence and cannot benefit from the weaknesses in the
defendant's case.

10. Amir Khan, plaintiff-appellant, in order to prove his case, produced six
witnesses in all, including Raz Muhammad Khan and Saeed Khan, Patwari
Halqa Laram, Peshawar. On the contrary, solitary statement of Awal Khel,
special attorney for defendants, .was recorded as D.W.1. The onus regarding
non-payment of sale consideration, was heavily placed on the shoulders of
plaintiff-appellant but he has failed to discharge the same through cogent and.
convincing evidence. The evidence produced by him in support of his claim is
discrepant .and pregnant with serious infirmities and flaws and has been
discarded by the trial Court for valid reasons. The trial Court adverted to every
aspect of the case, rightly discussed the issues, as agitated and rendered a
reasoned judgment, which is not open to exception. It has come in evidence that
the mutations in question had been attested in `Jalsa Aam' in the presence of
revenue officials, marginal witnesses to the mutations and same were duly
thumb-impressed by the plaintiff-appellant. The mere assertion of the plaintiff-
appellant that sale consideration was not paid to him and the same was delayed
by the defendants-respondents for one reason or the other, without a positive
attempt on his part to substantiate the same, is of no consequence. Although the
records of rights are not instrumental of title, but they are certainly presumptive
pieces of evidence to prove a person's title. An entry made in a record of rights in
according with the law for the time being enforced must be presumed to be
correct until the contrary is proved or a new entry is lawfully substituted
therefor. Onus lies heavily on the person who asserts that revenue entries are
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incorrect. The plaintiff in order to succeed must establish that the mutation order
is a false document. The mere fact that the patwari has committed some
irregularity in submitting the record on whom the order of mutation is
insufficient to displace the presumption, which arises under section 52 of West
Pakistan Land Revenue Act, 1967 and in the absence of a definite proof that the
order of mutation itself is false. The plaintiff cannot be held to have discharged
the onus that lay on him. It is incumbent on him to lead evidence to show that a
fraud had been practised by the defendant on the revenue authorities by giving a
wrong address or in any other manner. The mere fact that sale consideration has
not changed hands in presence of the revenue officials, by itself, cannot be
considered a ground to believe the plaintiff's claim. It is not the requirement of
law that sale consideration must be paid by the 'purchaser to the owner in the
presence of the Revenue Officials. In this regard I am fortified by the
observations made in Muhammad Sadiq and 2 others v. Barkat Ali and 4 others
(1990 CLC 533 Lahore), Rana Muhammad Shabbir (deceased) through his 10
L.Rs. v. Muhammad Ismail and 3 others (1990 CLC 546 Lahore) and Allah Dad v.
Government of Pakistan and 53 others (1989 CLC 1571 Peshawar).

In the ultimate analysis, I am of the firm view that the impugned judgment is
neither contrary to the evidence on record nor in violation of the principle of
administration of justice. The appeal having been found bereft of merit, is
dismissed, with no order as to costs.

H.B.T./41/P Appeal dismissed.

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