1999 PLP 2878 (SCMR)

SH. IJAZ NISAR, J.

This appeal by leave of the Court is directed against the judgment dated 19-3-1995. of the Peshawar High Court, D.I. Khan Bench, whereby Civil Revision No.31 of 1995, filed by Mst. Amiran Bibi etc, respondents herein, was accepted.

2. The facts as mentioned in the leave granting order are "that by virtue of an agreement to sell dated 18-4-1977, Muhammad Hayat, predecessor-in-interest of respondents Nos. 1 to 6 and Haji Bakhsh, predecessor in interest of respondents Nos. 18 to 21 agreed to sell the disputed shop to the petitioners for a sum of Rs.60,000, out of which Rs.500 in cash while Rs 37.000 were paid through cheque dated 2-4-1977. The father of the petitioners further agreed to transfer his land measuring 298 Kanals 14 Marlas by mutation in lieu of the balance amount of Rs.22,500 in favour of the respondents who in turn under took to get the sale deed registered in favour of the petitioners failing which Umar Din, petitioner No.6, father of the petitioners, would pay the balance of sale amount to the vendors at the time of registration of the sale deed. It appears that apart from the aforesaid recitals, simultaneously a separate agreement to transfer the aforesaid land in lieu of balance amount of Rs.22,500 was executed by Umar Din, petitioner No.6 father of the petitioners in favour of widow, sons and daughters of Muhammad Hayat and one Haji Hussain Bakhsh, predecessor-in-interest of respondents Nos. 18 to 21 wherein the stipulation contained in the agreement to sell to transfer the land aforesaid in lieu of balance of sale consideration amounting to Rs.22,500 had been reiterated, In case the petitioners failed to transfer the land as aforesaid on payment of balance of Rs.22,500, the respondents would get the sale deed registered in favour of the petitioners. On the respondents. reluctance to abide by the terms of the agreement to sell, the petitioners filed a suit for specific performance or in the alternative for the refund of Rs.45,100 besides the compensation for construction of the disputed shop/improvements brought about therein. The suit was resisted by the respondents, inter alia, pleading that the agreement between petitioner No.6 and the respondents or their predecessor, stood frustrated on account of cancellation of allotment of land in favour of one Badruddin who in his turn had executed a power of attorney for selling the aforesaid land in favour of petitioner No.6. The learned trial Judge found crucial issue as to the entitlement of the petitioners to the specific performance of the agreement to sell against the respondents and decreed the alternative relief etc. the extent of refund of Rs.37,

500. On appeal, the learned District Judge reversed the aforesaid findings of the learned trial Court and granted "a decree for specific performance of the agreement to sell as prayed for". Against the above appellate judgment the respondents filed a revision petition.

3. The learned Judge in Chamber by judgment dated 19-3-1995 accepted the revision petition, set aside the judgment of the Appellate Court and restored that of the learned trial Court. Operative part of the judgment is as under:-- "After hearing the learned counsel for the parties at length and going through the record I find that the impugned judgment and decree is not sustainable for the reasons that are not far to seek. The agreement to sell on which the vendees have based their claim was executed on 18-4-1977 and admittedly after the execution of that deed an exchange deed was executed whereby Umar Din, father of the vendees, had transferred his landed property in favour of the predecessors-in-interest of the petitioners in lieu of the shop in dispute. The subsequent deed has not been disputed by the vendees, therefore, there can be no dispute with the proposition that the previous deed was rescinded by the parties of their free will and accord and as such the contract reflected in the first deed is not enforceable. It was observed in Banque Indosuez v. Banking Tribunal for Sindh and Balochistan and others (1994 CLC 2272) that in case of novation of contract the rights of the parties under the original contract are completely extinguished given way to different rights under the subsequent agreement. It was contended by the learned counsel for the vendees that the subsequent deed having been executed without express permission of the Court was no better than a scrap of paper as the vendees were minors at the time of the execution of the first deed and the second deed had deprived them of the valuable rights that had already accrued to them under the first deed. The contention has no substance inasmuch as both the deeds were executed on the same day by the father of the minors who had certainly played a fraud on the vendors by giving an undertaking to transfer landed property which he did not own, the first deed was not acted upon in true sense of the word because the amount alluded to therein had already been received by Umar Din, father of the vendees, on 2-4-1977 through a cheque and an agreement to sell does not by itself confer title as is evident from section 54 of the Transfer of Property Act. Needless to point out that on the rescission of a contract the Court has equitable discretion to order the return of the earnest money. The discretion exercised by the learned trial Court was thus unexceptionable and interference was made by the learned Appellate Court on wrong premises. "

4. Leave was granted by this Court vide order dated 2-6-1996 to consider, inter alia, whether a Judge in Chamber had correctly construed the agreement dated 18-4-1977 to transfer the land by petitioner No.6 on the one hand and the predecessor-in-interest of the respondents on the other to be novation of the agreement to sell of the same date.

5. It is contended that there has been a gross misreading and misinterpretation of the two documents and non-appreciation of the law on the subject, the principle of novation of contract was not at all attracted to the facts of the case.

6. The relief claimed by Nooruddin etc. appellants in the plaint was that decree for specific performance of the contract in respect of the shop in dispute or in the alternative Rs.45,100 paid by them be returned.

7. Admittedly, two different deeds were executed between the parties on the same date. The first deed was an agreement to sell, by virtue of which Sikandar Hayat and Haji Hussain Bakhash had agreed to sell the shop in dispute to Nooruddin etc. appellants for Rs.60,

000. Out of the said consideration Rs.37,500 were paid to the respondents (sellers), and in respect of the remaining amount of Rs.22,500 it was agreed that Nooruddin, father of the appellants, will transfer his land situate in Mouza Maiekhi in favour of the respondents and in exchange would get the shop in dispute.

8. The learned trial Court held the first agreement to be void because some of the vendees, excepting Noor Din, were minors at the relevant time and further observed that the respondents realized that another agreement was executed between the father of Noor Din etc. and the respondents and since Noor Din etc, did not disclose in the plaint the execution of the second agreement by virtue of which their father had agreed to transfer the agricultural land in the names of the respondents, therefore, they were not entitled to the discretionary relief of grant of decree of specific performance of contract. So far as the alternate relief of the refund of Rs,45,100 of the plaintiffs was concerned, the respondents in the written statement has accepted the receipt of Rs.37,

500. According to Nooruddin he had further paid a sum of Rs.7,600 to Sikandar, Hayat etc., of which there is absolutely no rebuttal.

9. Since the agreement is linked with the first agreement, it cannot be read in isolation and both the agreements shall have to be read together. The learned trial Court had for valid reasons declined to pass a decree for the specific performance of contract in favour of the appellants. To that extent its order is maintained, but so far as passage of decree for Rs.37,500 in favour of the appellants is concerned, we are of the view that since an additional sum of Rs.7,600 is also proved to have been paid by the appellants, they could not be deprived of it and modify the decree of the trial Court to the extent that the respondents shall pay Rs.45,100 to the appellants instead of Rs.37,

500. The appeal is disposed of in the above terms leaving the parties to bear their own costs. M.B.A./N-61/S Order accordingly.