P L D 1961 (W (PLP)

"(7) That the vendor, the party of the First Part, shall make out a marketable title to the said lands and premises, to be sold, and the vendor shall clear all defects, if any, in his title at his own expense including all claims by way of lease, lien, inheritance possession or otherwise. (11) That if the Vendor fails to perform any of the conditions provided herein, he shall be liable to refund all amounts paid and also will be liable to reasonable damages that may be sustained by the purchasers or be sued in a proper Court of law for specific performance of this contract. (13) The Vendor shall get the consent of all persons interested in the said land to be sold and shall get the necessary documents duly executed by them. (14) That the land contracted to be sold is agricultural non -bandishi land for sale of which No-objection Certificates shall be secured by the Vendor at his own costs and expenses. (16) All costs, charges, and expenses incidental to this Agreement and the conveyance and other writings to be made in pursuance hereof including the costs of transfer of property in the name of the Purchasers shall be borne by the Purchasers. (17) The Vendor has assured that the said lands in whole or part thereof have on this date not been requisitioned or acquisitioned. However, it is expressly agreed between the parties that any such action of the Government, semi-Govern ment, corporate body or bodies in respect of the said lands or part thereof by which the sale of said lands in whole or part there of, is made impossible then this Agreement shall stand cancelled in all respects ipso facto and the said Vendor shall refund in whole or part or adjust the amounts, as the case may be (calculated on the affected part of the land) paid by the Purchasers to the Vendor against the price of the said affected land from the compensation or other moneys received from the said authorities concerned."

7. The liability of seller of an immovable property in the absence of a contract to the contrary is a statutory one and is contained in section 55, sub-clauses 1, 2 & 3 of the Transfer of Property Act. No contract to the contrary has either been alleged or proved in this case. On the contrary there are express conditions in this contract which have been set out above. It is a well established principle of law relating to such cases that a purchaser is entitled to rescind the contract and claim refund of his money and damages, if any, if before the sale is completed A in all respects it is found that the title of the seller suffers from any defect or is under a cloud, which might have the effect of reducing the value of the property or subjecting it to litigation or endangering its quiet enjoyment by the purchaser. In the present case the defendant had himself not acquired a complete title to the lands which were the subject-matter of the agreement, Exh.

8. He had however entered into an agreement with one Abdur Rahman, who, with his daughter, was the owner of these lands. This was by means of Exh. 63, which is dated 5th October 1956 and whereby Abdur Rahman had agreed to sell these lands along with some other to the defendant. He (defen dant) had also obtained the mutation of these lands in his favour in the Record of Rights as would appear from the certified copy of the extract, Exh.

56. In the agreements, Exh. 63, between the defendant and Abdur Rahman similar conditions had been laid down as between them, which were included in Exh. 8 and which have been reproduced above. I t is the con tention of the defendant that the absence of a deed of conveyance in his favour by Abdur Rahman was immaterial because he would have been able to get Abdur Rahman to execute such a deed in favour of the plaintiffs if the transaction had come through. I shall revert to this question a little later, but for the present purposes it is enough to note that the defendant was bound to fulfil the conditions as between himself and the plaintiff set out in Exh. 8, and it may be that he had the same right as between himself and Abdur Rahman. It was contended by 'Mr. Tayabji, the learned counsel for the defendant, that if the plaintiffs had paid the full price and had wanted a deed of convey ance and its-registration, both the defendant and Abdur Rahman would have joined in one sale-deed and this would have fulfilled the defendant's obligation in respect of the conveyance of the property. This position was challenged by Mr. Lari, the learned advocate for the plaintiffs, who said that there was no privity of contract between the plaintiffs and Abdur Rahman and that the plaintiffs were entitled to get a sale-deed from the defendant, who might, in his turn, have obtained a sale deed from Abdur Rahman. But, whatever view is taken of this question it is hardly material for the purposes of the present case because if the plaintiffs succeed in showing that the defendant failed to fulfil the other conditions of the agreement the occasion for the execution of the sale-deed would not arise.

8. The agreement in question was executed on 21st August, 1957 and on 21st February 1959 a mutation was effected in favour of the plaintiffs in respect of the lands in question as evidenced by Exh.

51. The plaintiffs have challenged the validity of this mutation but at the moment it may be assumed that this mutation had been duly effected The transferor in the extract, Exh. 51, is shown to be the defendant and the transferee are the plaintiffs. The defendant himself had secured the mutation in his own favour in respect of the lands in question on 3-2-58 as would appear from the extract, Exh.

56. In this he is shown to be the transferee and Abdur Rahman is shown to be the transferor.

9. The mutation entry in favour of the plaintiffs however did not remain for long and was in effect cancelled on 2-3-59 by the Mukhtiarkaras would appear from the copy of the extract, Exh.

19. The cancellation was made in pursuance of Exh. 33 which is a letter from the Collector of Karachi to the Mukhtiarkar. That letter may be reproduced:- "The proposed Korangi Development Project has given rise to speculation in the matter of disposal of land by private owners in that area which is likely to affect payment of compensation by Government when the Scheme for land acquisition in respect of that project is finalized. No transfer of land should therefore be effected in the dehs of Sharabi, Drigh Road, Phihai, Dih, Landhi and Ibrahim Hyderi without obtaining a `No-objection' from the Collector and any transfers that have taken place after 8th October 1958, should be treated as void." The defendant states that he did not come to know of this can cellation until very late. It is, however, a matter of admission that in spite of his efforts he has not been able to secure so far the no-objection certificate of the Collector referred to in Exh.

33. The contention of Mr. Tayabji was that this cancellation was without authority and void. It is not necessary for me to go into that question because it appears to me very plain that if the authorities had, in fact, restrain such a transfer and directed the Mukhtiarkar not to record any such transfer in the Record of Rights it would be open to the purchaser under the agreement of sale to insist upon the removal of these restrictions before he could be called upon to perform his part of the contract. A purchaser of property does not want to buy litigation. But in this particular contract it was expressly provided that the defendant had to make out a marketable title, remove all defects and obtain a no-objection certificate from the Collector. These terms are contained in clauses 7 and

14. With regard to the clause 14, however, Mr. Tayabji contended that this term was put in by error because this was a non-bandishi land and no no-objection certificate was required. In any case, he contends that such a certificate had been obtained by Abdur Rahman as would appear from the letter of the Collector dated 11th February 1957, Exh.

39. The first contention of the learned counsel is negatived by the plain terms of clause 14 wherein it is clearly stated that the land in question is a non -bandishi land and therefore the no-objection certificate required under that clause must be in respect of some matter other than the question of bandishi. That this no-objection certificate was required in connection with other restrictions is borne out by Exh. 39 itself, which says that the survey numbers in question are situated outside the Old and New Federal Capital Area and do not fall under any scheme, but this was on 11th February 1957. The restriction with regard to the Korangi Scheme evidently came later and it was clearly understood between the parties when Exh. 8 was executed that the defendant will have to obtain a no objection certificate from the Collector in respect of any such restrictions. The defendant has stated that he did not come to know of the said restriction or the cancellation of the mutation until he received in July the registered letter from the Mukhtiarkar. It is difficult for me to accept this statement, because the defendant had been dealing extensively with the purchase and sale of the land in that area and would normally have come to know of it very soon. It would appear from Exh. 34 which is a letter dated 2-3-59 and marked `most urgent' from the Mukhtiarkar to the Tapedar of the relevant area, in which the gist of the letter of the Collector dated 26th February 1959, has been conveyed as a warning. According to the defendant when he received the Mukhtiarkar's letter dated 8-7-59 Exh. 41 he applied as per Exh. 43 to the Collector on 23-7-59 for the no-objection certificate, but admittedly no certificate was obtained until the date of the suit nor up to the present date. There is nothing on record to show that even after the receipt of the registered letter, Exh. 41, from the Mukhtiarkar on or about the 8th July 1959, the defendant informed the plaintiffs of this new development. I accept the statement of the plaintiff's witness Mr. Ashrafi on that point that the plaintiffs did not come to know any thing about this until November 1959. 1 have no doubt that if these facts bad been brought to the notice of the plaintiffs they would have certainly brought the matter to a head with the defendant. Exh. 19 would show that this certified copy of the extract with the note of can cellation was obtained by the plaintiffs on 23rd January 1960.

10. For the above reasons I hold that the transfer of these lands had come under a restriction and in so far as the defendant B failed to remove this restriction he committed a breach of the terms contained in clauses 7 and 14 of Exh. 8.

11. The next question to be considered is whether there was any acquisition or any threat of acquisition of the lands which were the subject-matter of the transaction in question. Admittedly the lands in question have not so far been acquired. The question, therefore, remains whether there was any threat of acquisition. The evidence on this point may now be examined. The defendant's witness No. 1, who has been the Mukhtiarkar of the area since March 1959 and under whose jurisdiction these lands fall, has stated that the lands in dispute are covered by the master plan of Karachi, which relates to rural areas and that this particular area is known as Korangi Township Area Scheme. The lands which have been notified under this Scheme cannot be sold without the permission of the Collector. He has further stated that though he had not seen the notification he had seen the master plan in which these plots are included. He has further stated that he had received written instruction from the Collector to the effect that all transfers of lands covered by the scheme would be void if effected after 8th October 1958, and that the Mukhtiarkar had been directed not to effect mutation of such transfers. This evidence has not been controverted and it shows clearly that the lands in question fell within the Korangi Township Scheme and restrictions had been imposed with regard to its transfer. The fear of acquisition of these lands was very much present in the mind of the parties when the agreement Exh. 8 was executed, and we find mention of it in clause 17 of Exh. 8, which has been reproduced above. In fact, the defendant had himself taken an assurance in this respect from his own vendor under the agreement, Exh.

63. Clause 19 of that agreement deals with the situation relating to possible acquisition or any other actions in respect of the lands by the Government or semi-Government, corporate bodies, in which eventuality the defendant's money was to be refunded to him by the said Abdur Rahman. On 19-3-60 the defendant himself had addressed a letter to the Collector asking him whether the lands in question amongst other situated in Deh Phihai had been acquired under the Land Acquisition Act for the establishment of Korangi Township. The defendant has not produced a copy of this letter but he has produced the reply received from the Collector, which is Exh. 36, and from which it is not difficult to see what the contents of his letter must have been. It will be worthwhile to reproduce that letter "Manzoor Ahmad Sabi Esquire, Wood Street, Karachi. Subject:- Acquisition of land for establishment of Korangi Township. Reference:- Your application dated 19-3-60. None of the Surveys Nos. 62 to 79, 115, 87 to 92, 124, 125, 154, 157 to 165, 168 to 170, 199, 235 to 239, 244 to 248 and 226 to 229 situated in deh Phihai, has so far been acquired under the provisions of the Land Acquisition Act, for the above project. (Sd.) illegible For Collector of Karachi." Reading between the lines of this letter it is not difficult to infer that at least the possibility of such acquisition was there. There are then two more documents, Exhs. 66 and

67. Exh. 66 is the letter from the Ministry of Works addressed to the plaintiffs' Secretary referring to their meeting of 11th May 1960, and stating that it had been decided that eventually the lands within the sectors including the Society's lands will have to be acquired. The second letter, Exh. 67 is more definite. It is addressed from the Collector of Karachi to the plaintiffs stating that proposal for acquisition of the survey numbers in question amongst other had been received from the Karachi Development Authority and that necessary notification under sections 4 and 6 of the Land Acquisition Act, 1894 were under preparation. This letter is dated 10th September 1960 and was evidently obtained by the Secretary Mr. Ashrafi during the course of the hearing of this suit. I would have normally ignored these two documents because they were proved in the case about the fag end of the trial, but these letters do not stand by themselves. There is support for the contents of these letters in the evidence of the Mukhtiarkar which I have referred to above. There is also an indirect support from Exh. 36 which was the letter obtained by the defendant himself from the office of the Collector. The question that then arises is whether in the circumstances the threat of acquisition of these lands such as is indicated from the evidence would entitle the plaintiffs to rescind the agreement and claim the refund of their money. Mr. Tayabji's contention on this part of the case was two fold. Firstly, he said that the mere preparation of a scheme or even a remote possibility of acquisition of the lands for such a scheme does not justify a purchaser to rescind the agreement of sale. He contended that a stage in the process of acquisition has to be reached whereby the acquisition of the lands in question becomes more or less certain and unless that stage is reached the purchaser cannot get out of the contract. He pointed out that the mere framing of the scheme by the K. D. A. did not necessarily mean that the land was to be actually acquired. He said that for all we know the K. D. A. might in all probabilities allow the Society to develop the lands under its supervision in order to prevent haphazard growth of construction and if this is all that might happen there was no occasion for the plaintiffs to rescind the contract. His second contention which applied to this as well as to all other possible defects of title was that in the present case the defendant had in part performance of the agreement given possession of the lands to the plaintiffs, and had got the mutation entries effected in their favour and had thus done all that he was required to do under the agreement, and that thereafter, if anything happened, it would be the responsibility of the plaintiffs to meet all such threats. His argument was that even though a deed of conveyance had not been executed the ownership in the lands had passed to the plaintiffs on the principle of part performance and the plaintiffs who had received possession were estopped from going back upon the agreement. I shall deal with the second con tention separately because it constitutes one of the main planks of the defendant's case as put forward by his learned counsel and applies not merely to the point of acquisition but also a number of other issues in the case.

12. Coming back to the question whether upon the material on record it could be said that the threat or possibility of acquisition of these lands was such as to entitle the plaintiffs to refuse to buy these lands it would be convenient to refer to the Federal Court judgment in the case of Associated Hotels of India Limited and another v. R. B. Jodha Mal Kothalia (P L D 1954 F C 35). In that case there was an agreement dated 2nd October 1946, executed between the respondent and appellant No. 2 for the sale of certain property to the latter for a consideration of Rs. 52,75,000 out of which Rs. 5,00,000 had been paid as earnest money. The registration was to be completed by the 2nd of December 1946, which date was extended till 20th January 1947. The agreement provided that if the purchaser refused to have the sale deed and pay the balance of price to the vendor the earnest money shall stand forfeited. On 11th December 1946, a notice was published in "the Tribune" under section 36 of the Punjab Town Improvement Act (IV of 1922) to the effect that the Lahore Improvement Trust had framed a development scheme and proposed the acquisition of a large area for that purpose. The inspection of the scheme and map attached thereto showed that the property which was the subject-matter of the agreement of sale was comprised within that area. The purchaser thereupon refused to complete the sale on the ground that the said notice constituted a material defect in the title of the property and demanded the return of the earnest money. The seller refused to accept this as a defect of title and claimed to be entitled to forfeit the earnest money.

13. The aforesaid Act IV of 1922 follows the usual pattern of Town Improvement Acts. Section 36 provides for the pre paration of scheme, section 38 for the objection to such a scheme and section 42 to its notification. In the case with which their Lordships were dealing all that had happened was that merely a scheme had been prepared. It is of interest to note that this scheme was eventually given up in October 1947. Upon these facts it was held that the issue of the notice had created a material defect in the title which the vendor was capable of passing on the due date. The observation of his Lordship Mr. Justice Cornelius, as he then was, at page 71 of the report may be usefully reproduced:- " . . . . Once the notice was issued under the Punjab Town Improvement Act, declaring that a scheme had been framed and that the intention of the scheme was no other than the com pulsory acquisition of titles in a large area of land including this suit property, a proceeding was set on foot which, in the eye of law, reduced the title-holders to the position of mere spectators, whilst it was decided between the authorities whether or not a proposal, presumably framed by the Improvement Trust after mature consideration, that their titles should be compulsorily acquired would or would not be carried out. Certainly, the threat to those titles would become more acute as the proceedings matured to the stage at which acquisition was in fact directed by the competent authorities, but the liability to be compulsorily acquired commenced from the time when the notice under section 36 was issued, and that liability was nonetheless real on account of its being at that stage contingent upon the conclusion of certain further formalities." These observations apply with full force to the facts of the present case, in which at least the framing of the scheme which covers the lands in question has been established by the evidence of the defendant's own witness, the Mukhtiarkar. And considering that the plaintiffs were buying these lands for the purpose of allotting them to the members for building their own houses, they were entitled to rescind the contract in view of the threat of the acquisition of the lands in question. The plaintiffs would be entitled to take the attitude that they were not going to purchase the land which was under the cloud of requisition and that they were not going to wait and see what course these apprehended proceedings were going to take.

14. I will now take up the question of the restoration of the said lands to the original owner Abdur Rahman which is the subject-matter of issue No.

11. The fact that these lands have, in fact, been restored to Abdur Rahman is admitted by the defen dant in para. 11 of his written statement. It would appear from Exh. 35 that the Collector of Karachi passed an order to this effect on 28th October 1959 and we can take it that the restoration took place near about the date. The defendant, however, says that this happened because of the continued default of the plaintiffs to pay the amounts due by them in terms of clause 4 of the agree ment dated 21-2-59, Exh.

50. I will revert to this agreement in detail later but I might say here that I have reached the conclusion that this agreement does not cover the lands in suit. But, quite apart from that fact, it is significant to note the defendant's own admission in the witness box on this point. He has stated that the total price which he had to pay to Abdur Rahman in respect of all the lands covered by Exhs. 8, 20 and Survey No. 75 of Exh. 50 amounted to Rs. 5,60,0

0. He has further admitted that on 19th February 1959 the excess payment by the plaintiffs amounted to Rs. 5,90,

659. This excess was over and above the payments made in respect of the lands covered by agreements Exhs. 5, 6 and

7. He was then pointedly asked whether on his own showing the excess payment was not sufficient to enable him to pay the seller (Abdur Rahman). To this he gave an indifferent and half-hearted reply, by saying that the payments made by the plaintiffs in respect of these lands hardly covered the total amount payable by him to his seller. Even assuming that there was a little deficit the defendant could not be allowed to plead it in justification of his failure to pay up Abdur Rahman. And further it is plain that the defendant's obligation to pay up Abdur Rahman was an indepen dent obligation and was not contingent upon his receiving exactly the same sum of money from the plaintiffs. It must further be noted that Abdur Rahman admittedly died in May 1959. None of his heirs have been examined in this case to show that all of them were prepared to join in a sale-deed in favour of the plaintiffs. And it is also not clear from the evidence whether the restoration of the lands in the name of Abdur Rahman was upon any representation on his or his heirs, behalf of non-payment of consideration or for similar reason for which the mutation in favour of the plaintiffs was cancelled. No evidence was led upon this point but it seems far more likely that the restoration of lands in the revenue records in favour of Abdur Rahman must have followed the cancellation of plaintiffs mutation and for the same reasons.

15. The obvious effect of such restoration to Abdur Rehman would be that the- defendant would not have been able to transfer the title to the plaintiffs in the lands in question. He himself held acquired no title in the lands by mere mutation. There had to be s D a deed of conveyance and registration, neither of which had taken place and, therefore, the defendant would not, in his turn, be able to execute a conveyance in favour of the plaintiffs.

16. I will now revert to the legal contention of Mr. Tayabji which was his main argument on this part of the case. I would like to reproduce his own words in which he formulated the pro position. He stated that the parties having entered into the written agreement of sale and the plaintiffs having taken possession in part performance of that agreement, the title to the lands passed to the plaintiffs and if there was any subsequent invasion or threat to that title they could not rescind the contract and it would be for them to defend their title against whosoever threatened it. In support of this argument he relied upon section 53-A of the Transfer of Property Act and upon the doctrine of part per formance. Alternatively he argued that the plaintiffs having got possession of the lands had derived benefit under the contract and were therefore estopped from rescinding the same. Both these contentions were urged with great emphasis, and at con siderable length. I shall now proceed to deal with them.

17. With regard to the provision of section 53-A of the Transfer of Property Act, the plain reading of the section shows that it has no application to the present case. All section 53-A does is to protect the transferee against the transferor or any person claiming under him from enforcing any right irrespect of the property notwithstanding the fact that the contract, though required to be registered, had not been registered or where there is an instrument of transfer the same has not been com pleted in the manner prescribed therefore by the law for the time being in force. This protection is given to the transferee upon the fulfilment of the conditions set out in that section and upon the principle that equity looks on that as done which ought to be done. If the transferee is ready and willing to do all that he is required to do under the contract it would not lie in the mouth of the transferor or any one claiming through him to plead absence of registration or compliance with other formalities to get out of his own obligation under the contract. This section nowhere professes to transfer the title to the purchaser which is expressly provided for by section 54 of the same Act, which defines sole and according to which the transfer of immovable property of the value of Rs. 100 and upwards can be made only by a registered instrument and which further lays down that a contract for the sale of immovable property is a contract that the sale of such property shall take place on terms settled between the parties and it does not of itself create any interest or charge on such property. In view of these clear statutory provisions there was no substance in the argument of the learned counsel that the title to the property had passed to the plaintiffs in the present case. Mr. Tayabji then contended that even if section 53-A was not applicable in terms the case was still covered by the doctrine pf part performance. The short answer to that contention is that the doctrine of part performance as understood in English Law has not been made applicable to contracts of sale in this country for which a clear. statutory provision has been made under section 54 of the Transfer of Property Act. The basis of the application of the doctrine of part performance in England is the recognition of the existence of a legal and equitable estate in the same property. This is an incidence of equity and has a long history behind it. This duality of estates was brought into play in cases of contracts for the sale of immovable property which had not been completed in. all respects as required by law and in such cases it was laid down that as soon as such a contract was made the equitable estate in the property passed to the purchaser whereas the legal estate remained in the seller and for that reason the seller acquired an interest in the immovable property. But, the law in this country does not recognize such a duality. There is no such thing here as an equitable estate and section 54 of the Transfer of Property Act expressly lays down that a contract of sale of itself does not create any interest in or charge on such property. It is, therefore, abundantly clear to me that the doctrine of part performance as understood and practised under the English Law can render no assistance to the defendant. That doctrine has been made applicable only to a limited extent in cases of sale of immovable property under section 53-A of the Transfer of Property Act, the effect of which has been discussed by me earlier.

18. Mr. Tayabji then quoted a passage from the judgment of Cornelius, J. in the case of Associated Hotels, to which reference has already been made above. The passage relied upon appears at page 66 of the report and reads as follows:- "It might have been otherwise if on some basis of law of legal principle it could have b;en held that by reason of the agreement of sale the purchaser became invested with or entitled to some kind of interest in the property." Mr. Tayabji argued that in that case with which his Lordship was dealing no possession had passed and there had been no part performance but in the present case there has been a part performance in so far as the possession was delivered to the plaintiffs in pursuance of the agreement of sale. He, therefore, contended that the effect of his Lordship's observation, quoted above, is that in such an eventuality as the one in hand the result would have been otherwise, that is, it would be for the purchaser to contest all threats which might arise to the property or to its title. All that I can say about this argument is that the learned counsel overlooked the passage immediately following the one which has been quoted above. This is what his Lordship said:- "The law in England on that point is that from the date of the contract the purchaser is in equity the owner of the property sold, though not absolutely but subject to the conditions that the contract is specifically enforceable." His Lordship then went on to point out that no such equitable estate passes to the purchaser in Pakistan in view of the plain provision of section 54 of the Transfer of Property Act.

19. Let me now examine the contention of the learned counsel based upon the principle of estoppel, and I must say with respect to the learned counsel that in spite of his mist strenuous argument on this point I failed to discover any plausibility in it for the purpose of the present case. The contention of the learned counsel was that the plaintiffs having entered into the contract which was acted upon and having derived benefit under it were estopped from challenging the title of the defendant which was the subject-matter of transfer in the said contract. I have no hesitation in rejecting this contention. The rule of estoppel is founded on the equitable doctrine that a person, who, by his declaration, act or omission has induced another to act as he would not have otherwise done, should be able to deny or repudiate the effect of his former statement to the detriment of the other person who had acted on it. No such thing happened in this case. The representation, if any, was made by the G defendant that he was competent to transfer a valid title in respect of the lands in suit to the plaintiffs, upon which repre sentation the plaintiffs acted. If this representation was not correct and if the defendant failed to transfer a valid title there could be no question of any estoppel against the plaintiffs even if I assume that they had got possession of the lands under the said contract. When such a contract is rescinded the only consequence that follows is that the partly rescinding the contract must restore all benefits which he may have received under it. If, therefore, the plaintiffs had received actual possession under this contract, a fact which by no means has been established, all that they would have been liable to do would be to surrender possession to the defendant. 1, therefore, find that neither the doctrine of part performance nor the principle of estoppel can be of any assistance to the defendant in the present case.

20. For the purposes of discussion in the preceding para. I had proceeded on the assumption that the defendant had put the plaintiffs in possession of the lands in question. I shall now examine the question on merits. The defendant has stated that the possession of the lands under the agreements Exhs. 8 and 20 was delivered to the plaintiffs on the execution of those agree ments, and that the society had taken possession of these lands; that he had all these lands demarcated and that the office bearers of the plaintiff society had gone with him to these lands and he had taken them all around this demarcated area. He also relied upon Exh. 23, which was a plan prepared by the architect of the plaintiffs, in which the lands in question had been shown. Mr. Ashrafi on behalf of the plaintiffs stated that the plan Exh. 23 was prepared at the end of 1953 and on the basis of it the society had made allotments to its members. He, however, stated that these allotments were merely on paper and no physical possession was given to the members. The architect, who prepared Exh. 23, was examined by the defendant as D. W. 2 and he stated that he had prepared this plan from a blue print and a plan which he had received from the office of the defendant and had also received instructions from his office in that regard. He also stated that the red lines on the plan demarcating the survey numbers had not been put by him, and it is an admitted position that this was done in the office of the defendant. Upon this evidence the conclusion that I have reached is that even though physical possession of the various survey numbers was not taken by the plaintiffs yet in view of the fact that the lands had been demarcated at least on the plan the plaintiffs were, at least after the mutation which took place in February 1959, put in the way of taking physical possession if they had so chosen to do. Nothing however turns upon this question, because upon the cancellation of mutation and the rescission of the contract and considering that all this land is open and barren and the plaintiffs were never physically upon it, the possession shall be deemed to be that of the true owner which are not the plaintiffs. In fact, most of the lands covered by the agreement Exh. 8 had been admittedly restored to Abdur Rahman.

21. I shall now sum up the position with regard to this part of the case and in doing so shall also deal with issue No.

5. This issue is too broadly worded. It is not the impossibility of the transfer of the lands in question which falls for decision in this case. What really is to be decided is whether, in view of the objections and restriction to the transfer of these lands which has been dealt with in detail above and the absence of title of the defendant himself in these lands and the restoration thereof to the original owner Abdur Rahman, the plaintiffs were entitled to rescind the agreement, and that the defendant had neither title nor power to complete the transfer.

22. I am not going to repeat all that I have said with regard to the defect of title and the restrictions on transfer and the defendant's capacity to do so. I would only recapitulate that there was an objection by the Collector with regard to the transfer of these lands, that in consequence of the said objection the mutation in favour of the plaintiffs had been cancelled and the lands had bean restored to the original owner and there was also the threat of the acquisition of this property by the Govern ment or the Karachi Development Authority. Under the agreement, Exh. 8, which is dated 21st August 1957, the payment, apart from the earnest money of Rs. 25,000, had to be made within 11 months commencing from 15th January 1953. This, however, was admittedly not done, but it was conceded by Mr. Tayabji, and rightly, that no penalties came into force by this default because the steps necessary for it had not been taken. And in any case no occasion for the levying of penalties would arise if the defendant was himself in breach.. Payments however were continued to be made and were received until 5-10-59, on which date was the last payment made. It is common ground that it was in November 1959, that the relation between the parties became strained. According to the plaintiffs, because they had found out the fact of the cancellation etc. and according to the defendant, because the plaintiffs had not kept up the rate of payment as provided by this agreement and the subsequent agreement dated 21-2-59. In fact, written notices started from 22nd December 1959, Exh. 53, from the defendant and the plaintiffs replied to it on 26th December 1959, telling him that he had no right, power or authority' to sell and convoy the said lands which had reverted to the original owners in the record of rights. A claim was then made for the refund of all the money upon the termination of the agreement. The reply to this was given by the defendant on 4th January 195), Exh. 54, wherein he denied all the allegations of the plaintiffs and in which he stated in effect that the agreement in question was alive and subsisting and called upon the plaintiffs to pay the money cumulatively due on this and the other agreement within 7 days failing which clause 4, which related to forfeiture, would apply. This was followed by a legal notice from the plaintiffs on 18-2-60, Exh. 13.

23. From what has been said above it is clear that when the claim for the refund of money was made by the plaintiffs upon the termination of the agreement the position, as it existed at that time, was that the objection of the Collector which resulted in the cancellation of the mutation had still subsisted, and the defendant in spite of his effort had not succeeded in removing it. The threat of requisition by virtue of the lands in question having been included in the Korangi Township Area Scheme had come into being and finally most of the lands, in question had been restored to the heirs of Abdur Rahman, who was already dead. The defendant had expressly undertaken to make out a marketable title free from all defects, anal it is plain that the defendant had failed to make out such a title. The objection of the Collector even remains upto the present day and the threat of requisition has assumed a more definite shape. I must, therefore, hold the defendant had failed to make out a marketable title. Upon the express agreement between the parties and under the implied covenants provided by section 55 of the Transfer of Property Act, the defendant in order to perform his obligation was bound to give a clear title in respect of the lands ensuring quiet and beneficial enjoyment thereof. It is an accepted principle of law that a purchaser is entitled to repudiate a contract if the seller's title to the property is not free from responsible doubt and free from material defect. As I will presently show the plaintiffs had by October 1959, paid up the entire consideration in respect to the lands which were covered by the agreement in question, Exh. 8, and considering all the circumstances of the case they could not be expected to keep the contract alive indefinitely to enable the defendant to remove the defects of restrictions. As I have, pointed out, those restrictions and defects exist up to the present day and have not been removed.

24. Apart from the defects and restrictions the defendant did not have the power to convey the property in question and complete the sale by executing a proper conveyance, because as has been pointed out most of these lands had been restored to the heirs of the original owner. -The seller in such cases must have at the relevant time the title in the property and the power to convey it and the absence of either of it entitles the purchaser to repudiate the contract.

25. In view of my findings and the reasons given above my answer to issue Nos. 2 and 11 is in the affirmative. The circum stances and the effect of the restoration of the lands which is the subject-matter of the latter part of issue No. 11 have been stated earlier. On issue No. 3 my answer is that there was a ban of the transfer of the lands in suit whether under the Martial Law or otherwise. On issue No. 4 my answer is that the lands have not been acquired by the Government but there was a threat of such acquisition at the material time and which continues. On issue No. 5 and in the manner in which I have construed it my answer is that the defendant was not in a position to effectively transfer the lands as required by law and the contracts due both to the defect of title and absence of the capacity to transfer.

26. I shall now briefly deal with the question of mutation of the lands in question which is the subject-matter of issues Nos. 6, 7, 8 and

18. It was the case of the defendant that Mr. Ashrafi, the Secretary of the plaintiff society, had himself appeared before the Mukhtiarkar along with the defendant and various statements were made before the Mukhtiarkar by both the parties and the mutation was effected in their presence. There seems to be some confusion about the actual date of the mutation because in the written statement it was said that it took place on 19-2-59 but the certified copy of the extracts, Exhs. 19 and 51, show that the mutation was made on 21-2-59. That, however, does not make any difference. Mr. Ashrafi in his evidence denied that he had appeared before the Mukhtiarkar. The case of the plaintiffs was that these mutation proceedings, which took place on the 19th or 21st of February, were not bona fide proceedings, because within 8 days this mutation was cancelled. It was further pointed out that it was not necessary for the plaintiffs as purchasers to report the transfer. Reliance was placed on sections 135-C and 135-D of the Land Revenue Code. It was further pointed out that Exhs. 9 and 10, which were produced by the defendant, did not relate to the lands in suit but to bandishi lands and these were not filed by Mr. Ashrafi before the Mukhtiarkar but handed over to the defendant, and that it was the defendant who had managed this mutation. It, however, appears to me that the question whether the mutation took place in the presence of the plaintiff' representative or in their absence and without any assistance from them does not make any difference whatever to the decision of this case. I will take it that the mutation did take place on 21-2-59 and was effective until 2-3-59 when it was in effect cancelled. What remains to be examined is as to what was the effect of the mutation and its cancellation. It was conceded by Mr. Tayabji that the mutation by itself did not have the effect of transferring the title in the lands to the plaintiffs. It was not possible to take any other stand because the relevant provisions of the Land Revenue Code make it quite clear that the mutation proceedings are intended primarily for fiscal purposes for the collection of land revenues and they are by no means a judicial proceeding in which the L right and title in the property is determined. It may be useful to quote the observation of their Lordships of the Judicial Committee in the case of Nirman Singh and others v. Lal Rudra Partab Narain Singh and others (53 I A 220), the relevant portion appearing at page

227. This is what their Lordships said: "The perusal by their Lordships of the judgment of the Court of the Judicial Commissioner of Oudh leads their Lordships to think that it is to a great degree based on the mischievous but persistent error that the proceedings for the mutation of named are judicial proceedings in which the title to and the proprietary rights in immovable property are determined. They are nothing of the kind, as has been pointed out times innumerable by the Judicial Committee. They are much mire in the nature of fiscal inquiries instituted in the interest of the State for the purpose of ascertaining which of the several claimants for the occupation of certain denominations of immovable property may be put into occupation of it with the greater confidence that the revenue for it will be paid." The said mutation, therefore, did not have the effect of trans ferring the right and title in the lands to the plaintiffs. The next question is about the cancellation. According to the evidence of the defendant's own witness, the Mukhtiarkar, and the note on Exh. 19 at the bottom, it is plain that the mutation, which had taken place on 21-2-59, had been negatived and the defendant was informed "that no such entry will be made unless and until the no-objection certificate is received". Therefore, in effect, there was a cancellation of the mutation. Whether this cancellation was valid or otherwise is not for me to determine in these proceedings. That would be a matter between the defendant and the Government who are not parties to the suit. All that I have to say is that the effect of this cancellation was that the plaintiff' status with regard to the Revenue authorities in respect of the lands in question came to an end and whatever right of occupation th y might have had on the basis of this mutation was also negatived.

27. In view of my above finding- my answer to the first part of issue No. 6, is that the mutation did take place on 19-2-59 or 21-2-59. It is not necessary to decide the latter part of the issue. In view of this finding the consideration of issue No. 7 becomes superfluous. On issue No. 8 my answer is that the mutation was cancelled with the effect stated by me earlier. The answer on issue No. 18 is in the negative.

28. I shall now take up the issues Nos. 9, 10, 12 and 17 which all relate to the agreement of 21-2-59, Exh.

50. It is the case of the defendant that the agreement dated 21-8-57, Exh. 8, was merged into Exh. 50 and as such no action could be brought on the basis of Exh.

8. Mr. Lari had objected to the admissibility of Exh. 50 on the ground that it was hit by section 49 of the Registration Act and section 35 of the Stamp Act. With regard to section 49 the objection was based with reference to para. 5 of this document, wherein it is said that: "The vendor does hereby absolutely transfer, convey and sell free from all encumbrances, claims, liens or demands whatsoever, the said plots of land fully described in the Schedule annexed herein under with all rights etc." There can be no doubt that this document purports to transfer and convey the lands in the schedule which are certainly of the value of more than Rs. 100 and as such to that extent it is directly hit by section 49 of the Registration Act, not having been registered. I have however admitted this document for the collateral purpose of seeing whether the agreement, Exh. 8, was merged into this document and thereby came to be extinguished. For all other purposes this document is inadmissible. The objection under section 35 of the Stamp Act is met by an old notification dated 23-10-1919 which has the effect in the circum stances of the present case to exempt this document from stamp duty on the ground that a co-operative society was a party to it.

29. Let me now revert to the question which I have stated earlier. In order to appreciate the contention of the defendant it would be necessary to refer to several other transactions between the parties. The first agreement of sale between the plaintiffs and the defendant with regard to other survey numbers, which are not the subject-matter of the suit, was made on 15th October 1956 by Exh.

5. There was then another agreement on 20th May 1957, in respect of some more lands which is evidenced by agreements Exh.

6. These two agreements were consolidated on 12th June 1957 by Exh.

7. These transactions are not in dispute and the price in regard to them had been admittedly fully paid off. The next agreement in sequence is the one in question via., Exh. 8 dated 2l-8-57. Thereafter, yet another agreement took place between the parties on 10-7-58 in respect of other land and then the last agreement was made on 21-2-59, Exh.

50. The schedule of Exh. 50 only includes the land of Exh. 20 and five survey numbers which are not the subject -matter of any other agreement. It is, however, the case of the defendant that .the omission of the lands of Exh. 8 in the schedule of Exh. 50 was a mistake, because according to him Exh. 50 was to cover the lands of Exh. 8, 20 and the additional 5 survey numbers mentioned therein. It is the case of the defendant that about the time that this Exh. 50 came to be executed the entire accounting had taken place between the parties and Exh. 50 had the effect of consolidating the agreements Exhs. 8 and 20 and adding to it the additional 5 survey numbers, and stating the final liability of the plaintiffs with regard to the payments due to the defendant on account of Exhs. 8, 20 and the 5 survey numbers of Exh.

50. This is denied by the plaintiffs, according to whom Exh. 50 related to the transfer of the lands covered by Exh. 20 and the additional 5 survey numbers mentioned in Exh. 50 only and that it did not include the lands of Exh. 8, which, is the subject matter of the suit.

30. In order to find out whether the lands covered by Exh. 8 were included in Exh. 50 and whether that agreement was consolidated with Exh. 20 by means of this fresh agreement Exh. 50, we must look into Exh. 50 itself, which in the words of the defendant was the final agreement. I repeatedly asked Mr. Tayabji, defendant's advocate, whether he was challenging or repudiating the contents of Exh. 50, and he categorically stated that he was not doing anything of the kind and that he relied on this agreement in its entirety. In fact, considering his case that the agreement, Exh. 8, had merged into Exh. 50 it would have been impossible for him to take any other stand, because if he repudiated Exh. 50 or challenged its terms that would knock the bottom out of the case With retard to merger and consolidation and then we would have been left with Exh. 8 standing by itself. I have found it necessary to make these observations because the plain reading of Exh. 50 shows that it did not consolidate into it the transaction of the lands of Exh. 8. 1 shall now try to demonstrate it.

31. The schedule of Exh. 50 does not include the lands of Exh.

8. It only mentions the lands of the agreement Exh. 20 and the five additional survey numbers. 71e expression "said plots of lands" in paras, 1, 4, 5, 6 and 8 can only relate to the lands of the schedule of Exh. 50 to the exclusion of the lands of Exh.

8. Any other construction would be impossible. I shall refer only to paragraphs 6 and 4 of Exh. 50 for this purpose. Para. 6 is as follows:-- "That this Indenture farther witnesses that the Vendor has by virtue of these presents delivered possession of the said plots of lands and also Survey Nos. 62 to 79, 115 and 116 of Deh Phiai, Karachi to the Vendees subject to the conditions laid down herein before." Now these survey numbers 62 to 79, 115 and 116 are all the lands covered by Exh.

8. If the schedule of Exh. 50 was intended to include the lands of Exh. 8 it would not have been necessary to expressly state the survey numbers of Exh. 8 in addition to the "said plots", which obviously related to the lands of the schedule of Exh. 50.

32. Para. 4 of Exh. 50 entitles the defendant in case of default of payment by the plaintiffs to cancel the indenture and resume the possession of the "solid Plots of lands" and then there is a statement, which is as follows : `(Survey Nos. to be selected by the vendor at his discretion out of the said survey numbers and surveys Nos. 62 to 79, 11 and 116 of Deh Phiai, Karachi)". The only inference which is possible from the reading of these two paragraphs is that wherever reference was intended to be meant to the lands of Exh. 8 that was expressly mentioned in contradistinction to the "said plots of lands" which were included in the schedule of Exh. 50 and which were obviously the only survey numbers intended to be conveyed by this document.

33. Para. 1 of Exh. 50 states the sale consideration agreed between the parties for the "said plots of lands" together with mohag rights of the adjoining Government land at Rs. 20,07,026 and it is stated that out of this money the vendor had already received Rs. 25,

000. Now if the lands of Exh. 8 had been intended to be covered by this agreement this Rs. 20,07,026 would not have covered the price of the lands of Exh. 50 as well as of Exh. 8 which would have together amounted to something like Rs. 28,00,000.

34. Para. 1 further states that the vendor has received Rs. 25,000 towards this transaction. Now admittedly the payment by the plaintiffs which had been made until 21-2-59, which is the date of Exh. 50 over and above the price of Exhs. 5, 6 and 7, was Rs. 5,90,

659. If, therefore, the lands of Exh. 8 were intended to be covered by Exh. 50 and the two transactions had been consolidated it would have been certainly stated that the consideration so far received was Rs. 5,90,659 and not only Rs. 25,000 as is actually stated in that paragraph. It was the case of the plaintiffs that out of this Rs. 5,90659, Rs. 25,000 had been appropriated by the defendant with the, consent of the plaintiffs towards the transaction evidenced by the agreement dated 10th July 1958, Exh. 20, which was admittedly consolidated in Exh. 50 with the addition of five more survey numbers. If this was true then the mention of Rs. 25,000 in para. I of Exh. 50 would be clearly consistent. Conscious of this weakness of his case the defendant in the witness box first denied that he had received Rs. 25,000 as mentioned in the said paragraph. He said that this Rs. 25,000 was over and above the amount of consideration mentioned in the agreements Exhs. 20 and

50. To this position he stubbornly adhered in the earlier part of his evidence in cross-examination. However when he was confronted with his own receipts Exh. 18/93 for Rs. 20,000 and Exh. 18/94 relating to the remaining Rs. 5,000 he had to admit that it was correct that Rs. 25,000 had been paid towards the Exh. 20 and that his earlier statement in this respect was not correct. The inescapable conclusion therefore from the above is that para. 1 of Exh. 50 had stated the price of the lands covered by the Schedule of Exh. 50 and had also stated the payment of Rs 25,000 towards these lands and that it was not intended that this agreement or the schedule to it should include the lands of Exh. 8.

35. In the course of the cross-examination of Mr. Ashrafi the defendant produced 3 sheets of paper Exhs. 61, 61/1 and 61/2, which, according to him, were pages 2, 3 and 4 of the original draft of the agreement which was intended to be executed between the parties on or about 21-2-59. The first page, according to him, was the same as that of Exh.

50. It was very late day for the defendant to come forward with this case. 'I, however, allowed these documents to be exhibited in the interest of justice. Accord ing to the defendant, this was the document which was first prepared with the first page of 50 and the defendant actually put his signature on it and Mr. Ashrafi took that for the signature of the Chairman of the Society; that two days thereafter Mr. Ashrafi and the treasurer came to his office and told him that it would be more convenient to have an agreement with certain changes as compared to the one which they had taken and that the document was typed again by the treasurer and in the evening the Chairman also came along and this Exh. 50 in its present form was signed by him, the Chairman, the honorary secretary and one member. In the first place, I find it difficult to believe this story coming as it does for the first time in the course of the evidence. The defendant had nowhere in the pleadings even suggested that the Exh. 50 was not the real agreement which was intended to be reached between the parties or that certain terms had been added to and subtracted from the real agreement. In fact, he himself admitted that the Exh. 50 was the final agreement and his learned counsel categorically stated that he relied on Exh. 50 for his case that the two transactions had been consolidation. Further, there are some obvious discrepancies. If pages 2, 3 and 4 of the alleged agreement remained with the defendant as the copy of it, there can be no reason why he should not also have had the first page of it. If Mr. Ashrafi had taken away the original, the first page of which was on a stamp paper, there is no reason why the defendant should be left without the first page in the copy. The reason may be that the defendant night have found it difficult to produce something as the first page, which should appear to be the carbon copy of the first page of Exh. 50.

36. But, even if the statement of the defendant was to be accepted that such a document had been prepared in the first instance that does not advance his case of consolidation any further. Mr. Ashrafi was not to the society and even if there had been a draft in the first instance on the lines of Exhs. 61, 61/1 and 61/2, it had to be signed by the officers of the society, and it is an admitted position that the first draft was not approved by the Chairman and the agreement, which came to be approved, is the one contained in Exh. 5) and which was duly signed by both the parties. The defendant knows English very well. He appeared to me to be a shrewd man as I noticed when he was giving his evidence and he had a fair experience of such documents of transfer, so that when he executed Exh. 50 it must be held that he executed it with the full understanding of its contents and import. If we compare the various paragraphs of Exh. 50 with the 3 sheets of Exh. 61, Exhs. 61/1 and 61/2 produced by the defendant, we notice such substantial changes particularly in paras 1, 4, 6 and the schedule, of the two documents that it becomes abundantly clear that even if there was an original proposal of consolidating the two transactions, it was definitely given up and the transaction of Exh. 8 was neither included nor intended to be included in Exh.

50. And for the same reasons I further hold that the promissory notes, Exhs. 24 to 31, do not affect the position. My finding, therefore, on issue No. 9 is that the document dated 21-2-59 did not effect the agreement in suit, i.e. Exh. 8. 1 further hold that for all other purposes the docu ment, Exh. 50, is inadmissible in evidence. On issue No. 10 my finding is that no transfer was or could be effected by the document dated 21-2-59. As no transfer was effected by this document and no right or interest were created by it, the latter part of the issue becomes redundant. For the same reason I hold that clause 4 of the said document is of no effect. Moreover, the defendant having himself committed the breach of agreement he had no right to forfeit any money. I answer issue No. 12 accordingly.

37. I shall now take up issue No. 13 and incidentally deal with issue No. 1 along with it. From the findings given above it follows that the plaintiffs are entitled to claim the refund of the amount paid by them on the transaction, contained in Exh.

8. The question is to what amount? Exh. 18/1 to Exh. 18/122 are all the receipts of admitted payments made by the plaintiff's to the defendant. The receipts Exh. 18/1 to 18/92 relate to the transactions of Exhs. 5, 6 and

7. Exh. 18/93, which is a receipt for Rs. 20,000 dated 11-7-58, is in respect of Exh. 20, and a part of the amount of the receipt Exh. 18/94, viz. Rs. 5,000 is also on account of the agreement Exh.

20. The remaining sum of receipt Exh. 18/94 is towards the agreement Exh.

7. Thereafter, all further payments upto 21-1-59 evidenced by Exh. 18/95 to Exh. 18/110 are shown to be in respect of Exh. 7, which is the agreement dated 12-5-57. It may be noted that the mutation in respect of the lands of Exh. 8 took place on 21-2-59, on which date was also executed Exh.

50. And though the payments received upto 21-1-57 with the exception of two payments of Rs. 20,000 and Rs. 5,000 mentioned above are shown in the receipt to have been in respect of the agreement dated 12-6-57, yet it is common ground that when the accounts were made on or before 21-2-59 the total payments upto that date amounted to Rs. 27,34,900 and deducting from it the price of all the lands covered by Exh. 7. which amounted to Rs. 21,44,241 it left a balance of Rs. 5,90,

659. From this was deducted the sum of Rs. 25,000 paid towards the Exh. 2,

0. That left a balance of Rs. 5,65,

659. After 21-2-59 the plaintiff's have paid a further total sum of Rs. 2,46,500 as acknow ledged in the receipts Exhs. 18/111 to Exh. 181122. That makes a total of Rs. 8,12,

159. The total price of the land as shown in Exh. 8 comes to Rs. 7,94,

970. There was a considerable argument and controversy with respect to the final figures as regards the value of the lands of Exhs. 8, 20 and 50, but whatever figures that were given with reference to the area of the lands and the price agreed thereof had always some discrepancy or the other. I do not find it necessary for the purposes of this suit to determine as to what was the price of all the lands covered by Exhs. 8, 20 and 50 or whether the area of the lands covered by Exh. 8 was 73 acres or more and whether the area of the lands covered by Exh. 20 was 157 acres or less. This is not a suit for specific performance and I do not have to determine what is due to be paid by the plaintiff as the price of the lands for the purposes of the performance of the contract. The price of the lands, according to the area in Exh. 8 at the rate stated therein, amounts to Rs. 7,94,970 and the plaintiffs have claimed tile refund of this amount. The question, therefore, which needs to be considered is whether the sum of Rs. 5,65,659 mentioned above and a part of the further payment of Rs. 2,46,500 should be deemed to have been paid towards Exh. 8 so as to make a total of Rs. 7,94,

970. Now it is an admitted position that the payments made before 21-2-59 were in excess by Rs. 5,90,659 of the price of the lands covered by Exhs. 5 6 and

7. Of this amount Rs. 25,000 were expressly appropriated towards the Exh. 20 which is dated 10th July 1958. Exh. 50 shows that only these Rs. 25,000 out of the aforesaid balance of Rs. 5,90,659 were appropriated towards the contract contained in Exh. 20, which was merged in Exh. 50, The balance therefore must have been agreed to have been appropriated towards Exh.

8. Then it must be noted that according to Exh. 8 payments to respect of it were to begin on 5-1-58 and end on 15-11-58. According to Exh. 29 payment on this transaction had to commence by November 1958. It must, therefore, be held the it was agreed between the parties that the payment in respect of Exh. 20 was to commence after the payment of Exh. 8 had been completed. This position, as has been shown above, was further recognised in Ex.

50. With regard to the payment made after 21-2-59 the receipts Exh. 18/111 to Exh. 18/122 show that these payments were not appropriated towards any specific transaction. All that these receipts show is that these payments are received in part payment of "dues of land price" and we know that there were two agreements subsisting at that time namely, the one under Exh. 8 and the other Exh.

50. In fact, considering that so far the defendant had been issuing receipts with reference to the specific date of a particular agreement the fact that after 21-2-59 no mention of any particular agreement is made, would support the case that Exh. 8 and Exh. 50 were kept apart. Since these payments after 21-2-59 were not appropriated towards any particular agreement section 61 of the Contract Act would apply and the payment must be deemed to apply in discharge of the debts in order of time. Upon the basis the payments must first be deemed to have been applied towards Exh. 8 until it was paid off.

38. On issue No. 1, therefore, I find that by 21-2-59 the plaintiffs had paid Rs. 5,65,659 towards the agreement Exh.

8. I further hold that thereafter out of the further payment of Rs. 2,46,500 the balance of the transaction under Exh. 8 must be deemed to have been paid first and appropriated accordingly, The remaining amount would be towards Exh.

50. I accordingly hold that the plaintiffs have paid to the defendant on the agree ment, Exh. 8, a total sum of Rs. 7,94,970 which is the amount worked out on the basis of the area mentioned in Exh. 8.

39. In view, of my findings given above, I answer issue No. 14 in the affirmative. On issue No. 15 I hold that the plaintiffs are entitled to the refund of the sum of Rs. 7,94,970 with interest at 6% from 26th December 1959 till the date of suit which works out to Rs. 9,937-2-0.

40. I accordingly decree the plaintiffs' suit against the defendant for Rs. 8,04,907-2-0 (which includes the interest upto the date of the suit, and further interest at the rate of 6% from the date of suit till decree and until payment). The plaintiffs shall have their costs of the suit from defendant. A. H. Suit decreed.