P L D 1961 (W (PLP)

Dates of hearing : 30th January, 1961, 20th and 21st March 1961. This is a second appeal against the judgment of Mr: Hamid Ali M. Memon, the then Additional District Judge, Karachi, in Civil Appeal No. 41 of 1958 dated 23rd February 1959 ‑dismissing the appeal of the Karachi Municipal Corporation, the‑ appellants in this appeal. Respondent Nawabuddin, originally a refugee from Delhi, settled at Karachi and was in search of a shop for the purposes of carrying on business. On the 26th of May 1949 he applied for the allotment of one of the shops under construction by the Karachi Municipal Corporation near Khori Garden, and on 8th July 1950 the Chief Officer of the. appellants allotted one of the shops under construction to him by letter (Exh. 3). The appellants on 21st July 1950 also accepted a sum of Rs. 500 under receipt (Exh. 4) towards the rent of the shop. The respondent alleged that the shop allotted to him was earmarked for him and he was permitted to put his sin‑board on the shop which he did on 23rd November 19.)0 while it was still under construction. It appears that, the respondent thereafter made repeated attempts to get the possession of the shop but the appellants did not hand over the possession of the shop in dispute to him. On 10th December 1951 the respondent called upon the appellants by notice (Exh. 13) under section 255 of the Karachi Municipal Act to hand over possession of the shop allotted to him and threatened to file a suit against them. The appellants promptly replied to this notice on 2nd January 1952 by letter (Exh. 14) and repudiated the contract alleged to have been entered on their behalf. They admitted that Rs. 500 were paid by the respondent which were to be appropriated by the Karachi Municipal Corporation towards the payment of rent, but contended that as there was no complete and valid contract in existence, the question of handing over possession of the shop did not arise. Thereafter the respondent made representations to the Municipal Commissioner of the appellants asking for permission to construct a shop opposite Karachi Hotel near Denso Hall but no reply was received by him. On the 6th of September he made a representation to the Chief Commissioner, who was the Provincial Government of Karachi, by letter (Exh. 19). He made further representation in this connection by letter (Exh. 21) dated 15th October 1952. It appears that the Chief Commissioner of Karachi forwarded his representa tion to the appellants for further consideration a communication to this effect was sent to the respondent by letter (Exh. 22) dated 29th October 1952 under the signature of the Assistant Secretary to the Chief Commissioner. The appellant's officers thereupon reconsidered the case of the respondent and offered a shop to him on Hassanally Effendi Road, which was refused. The respondent was again asked by the Assistant Secretary to the Chief Commissioner by letter (Exh. 25) dated 14th May 1953 to approach the appel lants for further negotiations in respect of the shop in dispute. As a result of this, Mr. Masrurul Hassan, the then Municipal Com missioner by letter (Exh. 26) dated 4th July 1953 allotted to respondent another shop in Khori Garden occupied by their Chowkidar in the same Building where the first shop is situated. But immediately thereafter Mr. Masrurul Hassan was replaced by Mr. Minai and the order dated 4th July 1953 was not put into effect. The respondent by letter dated 12th October 1954 (Exh. 28) called upon the appellants to comply with their obligations, but Mr. Minai by a letter (Exh. 30) dated 2nd November 1954 finally refused to deliver possession of the shop in occupation of the Chowkidar. Further correspondence passed between the parties, but as nothing came out of it the respondent filed Suit No.. 241 of 1957 in the Court of Mr. S. M. Abdul Aziz Jafri, IIT Sub‑Judge, First Class, Karachi. The suit was hotly contested but the learned Subordinate Judge by judgment dated 12th March 1958 upheld the contention of the respondent and awarded him a decree for specific performance of the agreement to lease out the shop in dispute. This judgment was challenged in Civil Appeal No. 41 of 1958 and Mr. Hamid Ali M. Memon the then Addi tional District Judge, Karachi also dismissed it and maintained the decree of the learned Subordinate Judge. The appellants are aggrieved from the order passed in Civil Appeal No. 41 of 1958 and have filed a second appeal in this Court against the aforesaid judgment of the learned Additional District Judge, Karachi. Mr. Fazle Haq, the learned counsel for the appellants, has ""taken me through the entire record in this case and has attacked the judgment of the learned first Appellate Court on the following grounds (1) That the order of allotment dated 8th July 1950 followed by deposit of Rs. 500 under receipt dated 21st July. 1950 towards rent did not constitute an agreement to lease out the shop in dispute to the respondent. (2) That the alleged agreement of lease was void as it was uncertain in so far as it did not fix any rent and the date of the delivery of possession of the shop. (3) That there was a novatio of contract and the learned Subordinate Judge could not grant a decree in respect of the original shop allotted to him and was only competent to grant a decree in respect of the shop allotted to the respondent on 4th July 1950 by Mr. Masrurul Hassan, the then Municipal Commissioner. (4) That the suit for specific performance was barred by limitation. (5). That the relief for specific performance being discretionary should not have been exercised in favour of the respondent as the premises in dispute were required by the Karachi Municipal Corporation for public needs. Before dealing with the various points urged in support of the appeal it will be convenient to mention here that there is a concurrent finding of facts of the two Courts below that the shop on which the respondent fixed his sign‑board on 23rd November 1950 was the shop which was allotted to him by the Chief Officer of the appellants under letter (Exh. 3) dated 8th July 1950. There is a further concurrent finding of fact that Mr. Masrurul Hassan, the then Municipal Commissioner, by an: order dated 4th July 1953 (Exh. 26) allotted the shop in the premises constructed by them in Khori Garden occupied by their Chowkidar. The learned counsel for the appellants has not been able to satisfy me that these findings of facts are not based on sufficient evidence and therefore for the decision of this appeal I shall accept these findings of facts as conclusive between the' parties. The first objection of the appellants that the allotment order dated 8th July 1950 followed by deposit of Rs. 500 on 21st July 1950 towards the rent of the premises in dispute did not constitute a valid agreement between the parties is based on the argument that the allotments are matters of favour and not as of right and any promise made by the Chief Officer of the appellants to the respondent under the alleged allotment cannot bind them. Mr. Fazle Iraq further contended that as the agree ment in question‑was not in the form of contracts prescribed by the Karachi Municipal Corporation the alleged agreement of lease has no validity in the eye of law. The learned counsel for the appellants has not been able to refer to any provision of the Karachi Municipal Act in support of his contention that allot ments of the premises belonging to the Karachi Municipal Corporation are not in the nature of contracts and are not binding on them. On the other hand, section 55 of the Karachi Municipal Act specifically authorises the Chief Officer to grant the lease of any immovable property belonging to the Corporation, the rent of which does not exceed Rs. 1,000 for any period not exceeding twelve months at a time. Thus, there is not the slightest doubt that the Chief Officer was fully competent to lease out the premises in dispute. The letter dated 8th July 1950 does not specify the period for which the lease is granted and in the absence of any specific term it will be presumed that the Chief Officer granted the lease in respect of the shop in dispute for a period not exceeding twelve months. The terms on which the Chief Officer granted the lease to the respondent under Exh‑. 3, dated 8th July 1950 is in the following words : "One of the (shops at Khori Garden has been allotted to you by me. The shop has been allotted to you on the clear under standing that you will pay the rent as decided by the Chief Officer. The date from which you pay the rent shall be the date on which possession of the shop has been handed over to you. This letter clearly shows that the shop in dispute was allotted to the respondents on two conditions : (1) that he will pay rent as decided by the Chief Officer and (2) that the rent will be paid from the date on which the possession of the shop is handed over to the respondent. These terms fully comply with the provisions of the Karachi Municipal Act. Section 164 of the Karachi Municipal Act authorises the Chief Officer to fix rents of the shops belonging to the Karachi Municipal Corporation from time to time with the previous approval of the Standing Committee. It is for this reason that in Exh. 3 it is mentioned that the respondent will pay the rent which will be fixed by the Chief Officer. Now, so far as the commencement of the lease is concerned, this letter in also clear on this point and says that it will commence from the date when the possession of the shop is handed over to .the respondent. The appellant's contention that there was no valid contract between the parties might have been of some avail if they had not accepted rent of Rs. 500 under receipt (Exh. 4) dated 21st July 1950. The reply to the notice given by the appellants Exh. 14 dated 2nd January 1952 admits that this amount was paid by the respondent towards the rent. In my opinion therefore the contention that the allotment dated 8th July 1950 read with the deposit of amount under receipt (Exh. 4) dated 21st July 1950 do not constitute an agreement of lease is not well founded and the finding of the learned Subordinate Court in this respect is absolutely correct. The second objection of the appellants that the agreement of lease entered into between the parties was void in view of the provisions of section 29 of the Contract Act also is not well founded. Section 29 of the Contract Act reads as under: "

29. Agreements, the meaning of which is not certain, or capable of being made certain, are void." This section, therefore, provides that if the meaning of an agree ment is not certain and capable of being made certain, such agreements are void. The learned counsel for the appellants was not able to satisfy me that there was any vague term in the agreement, the meaning of which is not certain or which is not capable of being made certain. The learned counsel in this con nection invited my attention to two decisions reported in Srimati Gribala Dasi v. Kahdas Bhanja and others (A I R 1921 P C 71) and Khushi Ram v. Munshi Lai and another (A I R 1940 Lah. 225). In the Privy Council decision it was held by their Lordships "It is elementary that specific performance of an agreement to grant a lease cannot be decreed unless that agreement either expressly or implied to be granted fixes the date from which the term is to run." This observation does not .in the least affect the respondent's case. The temps Of the allotment provide in unmistakable words the lease will commence from the date from which the possession will be handed over to the respondent. Similarly, the decision in A I R 1940 Lah. 225, which is based on the Privy Council decision is also distinguishable on the facts under consideration. Moreover, admittedly the shop was under construction and the agreement must be construed in a reasonable manner and impliedly meant that it would be delivered to the respondent immediately after it was read for occupation. In my opinion the agreement of lease in the present case does not suffer from any infirmity in this respect. In my opinion this is not one of those contracts which is incomplete and not final. The appellants' counsel failed to draw my attention to any provision of the Karachi Municipal Act which makes such contracts dependent on the execution of any formal contract or approval of some other higher authority. In Hillas & Co. Ltd. v. Arcos Ltd. (1932, 147 L T 503 at 514). Lord Wright observed that it is the duty of the Court to construe such documents fairly and broadly, without being too astute or subtle in finding defects. Similarly in New Beerbhoom Coal Co. v. Boloram Mahara (7 I A 107) the Privy Council held that if the price is uncertain on the face of a contract but the mode of ascertain ing it is given, then there is no uncertainty in it. Mr. Fazle Haq then referred me to a decision Ramasami v. Rajagopala (I L R 11 Mad. 201) to show that if the landlord is to fix rent such agreements are bad for uncertainty and tenancy does not come into existence. This case was distinguished in 27 Mad. 332 as being a decision with reference to suits under section 9 of the Rent Recovery Act. Apart from that if the provisions of the Karachi Municipal Act themselves say that the rent for the shops of the Municipality will be such as will be determined by the Chief Officer with the approval of the Standing Committee and the agreement in question complies with this provision how can it, under such circumstances be said that the agreement is bad for uncertainty ? Reliance was also placed on the case of Simon Reubean v. Haji Shaikh Mahomed Shustry (A I R 1922 Bom. 404). In that case the parties entered into an agreement of lease of a building which was under construction for a period of five years and on a monthly rent of Rs. 1,500 from the date of the completion of the same subject to the conditions and entering into a regular lease. The question arose whether the terms of the lease could be considered certain in view of the words in the agreement "subject to the conditions of regular lease." Their Lordships of the Bombay High Court held that such a term makes the agreement uncertain and could not be enforced under section 21(c) of the Specific Relief Act. But no such uncertainty exists in the present case. There is no agreement between the parties that the agreement was entered into subject to the conditions of entering into a regular lease. This case is not applicable to the facts of the present case. Another case cited was Muthiah Chettiar and another v. Perityan Kone and others (A I R 1920 Mad. 115) in which it was held that an agreement to pay rent in cash without the rate being definitely fixed is void for uncertainty has also no relevancy to the facts of the present case. In my opinion, the agreement in this case is no void under section 29 of the Contract Act because under the terms of the agreement it was agreed between the parties that the respondent will pay such rent as will be fixed by the Chief Officer of the appellants and the date of the commencement of the lease was to start on the delivery of the possession of the shop in dispute. These two terms are quite plain and simple. The very fact that the appellants were to fix the rent is sufficient to repel the contention of the appellants that the agreement is bad. There is not the slightest doubt in my mind that this contention has no force on the facts of the present case. Coming now to the third objection raised by the appellants, it will be noticed that the appellants committed a breach in respect of the agreement entered into under letter (Exh. 3) dated 8th July 1950 and receipt (Exh. 4) dated 21st July 1950, on 2nd January 1952 by repudiating their responsibility to perform their part of the contract. The respondent made a representation to the Chief Commissioner, Karachi, who was the Provincial Government, and on his intervention the appellants were forced to reconsider the case of the respondent on merits. In fact, finding force in the respondent's representation on 4th July 1953 Mr. Masrurul Hassan, the then Municipal Commissioner allotted another shop in the same market where the previous shop was allotted, which offer was accepted by the respondent. There is thus no doubt that there was a novation of contract and if the appellants had fulfilled the new contract entered into by them on 4th July 1953, the respondent in law would not have been entitled to enforce the original contract entered into between the parties, but the facts of this case show that the appellants did not even fulfil the contract entered into by them, on 4th July 1953. It was vehemently urged by the learned counsel for the appellants that if there is a novation of contract, in law the old contract is substituted by the new contract and a party is not entitled to enforce the old contract. Mr. Mahmudul Hassan, the learned counsel for the respondents has contested this position and placed reliance on the case of Manohur Koyal v. Thakur Das Naskar (I L R 15 Cal. 319). In that case the learned Judges of the Calcutta High Court held that upon the breach by the defendant of the terms which he had made, and upon the non- performance by him of the satisfaction which he had promised to give, the parties were relegated to their rights and liabilities under the original contract, and that consequently the plaintiff was entitled to the relief he claimed on the basis of the original contract. Their Lordships further held that section 62 of the Contract Act is merely a legislative expression of the common law, and the provisions thereof do not apply to a case where there has been a breach of the original contract before the subsequent agreement is come to. This view was also followed in Union of India v. Kishorilal Gupta & Bros. (A I R 1953 Cal. 642) ; Sakarchand Shamji v. Ismail Hoosein and another (A I R 1931 Rang. 189) ; and New Standard Bank Ltd. v. Probodh Chandra Chakravarty (A I R 1942 Cal. 87). The view taken in these decisions is consistent with the provisions of section 62 of the Contract. Act, which is in the following terms: "

62. If the parties to a contract agree to substitute a new contract for it, or to rescind or alter it, the original contract need not be performed." The language of section 62 of the Contract Act clearly points out that the original contract‑ need not be performed if the parties to a contract agree to substitute a new contract or rescind or alter it but as has been held in the above‑mentioned decision it applies only to those cases where no breach has been committed in respect of the original contract and then the original contract is substitu ted by a new contract. Mr. Fazle Haq, the learned counsel for the appellants, has not shown me any contrary view by these decisions. I therefore find no force in this contention and hold that the respondent was entitled to claim relief on the basis of the original contract. This brings me to the question whether the suit was barred by limitation. The learned counsel for the appellants in this connection has relied on section 155 of the Karachi Municipal Act and also Article 113 of the Limitation Act. The view of this Court as far as section 255 of the Karachi Municipal Act is concerned is that it does not apply to those cases where the suit is filed on an action which is not in pursuance of the provisions of the Karachi Municipal Act. It was held in a full Bench decision of the Bombay High Court as Municipality Borough of Ahmedabad v. Jayantilal Chhotalal Patel (A I R 1948 Bom. 98) and Abdullah and others v. Municipal Corporation of Karachi ( P L D 1959 Kar. 99) that section 255 of the Karachi Municipal Act does not apply to the enforcement of agreement of lease and for causes of action which are based on contracts entered into between the parties. Therefore this case is governed by Article 113 of the Limitation Act, which provides a period of three years for enforcing the specific performance of a contract and limitation runs from the date when any party has notice that performance is refused. It is quite true that the appellants first repudiated the contract in January 1952, but there are number of documents on the record to show that on the intervention of the Provincial Government further negotiations took place between the parties and the appellants impliedly admitted their liability under the original contract so much as that Mr. Masrurul Hassan in July 1953 allotted another shop to the respondent in order to discharge their obligations under the original contract. In Hukumat v. Nenumal (A I R 1928 Sind 45) it was held that acknowledgement under section 19 is not limited in respect of a debt only, but can be in respect of any property or right which is the subject matter of the suit and applied its provisions to a case of partnership. In my opinion under Exh. 20 dated 20‑9‑52 and Exh. 26 dated 4‑7‑53 the appel lants impliedly admitted their liability on the original contract and this having been made prior to the expiry of the period of limitation, extended the period for filing the suit even if the refusal to perform the contract is taken to. have happened in January. 1952. But I further agree with the Courts below that the appellants by their conduct kept the contract alive till their final refusal to perform it on 2‑11‑1954 and the suit was rightly held to be within limitation. The last point urged by the learned counsel for the appellants was that the relief of the specific performance being discretionary it should not have been exercised .in favour of the respondent. The learned counsel for the appellants referred me to various documents on the record to show that the shops in dispute are now being used as a health office by the Karachi Municipal Corporation and the fact that the appellant Corporation changed their mind for public purposes is sufficient to non‑suit the respondent. In my opinion the fact that the Municipal Corporation later on changed their mind and wanted to use these premises for their own purposes cannot render the contract ineffective. The attitude of the appellants this case has not been straightforward, they have not produced all the relevant documents on the record and further failed to produce material on the record to prove the circumstances in which they changed their mind for the use of the shops constructed them. In fact they hove examined no witnesses to depose about this fact. In the absence of any material on the record on the point, I am not inclined to accept the contention of the learned counsel for the appellants that the reason for going back on the contract was that the premises were required for public use. I therefore find no force in the contention raised before me and hold that the learned subordinate Courts were perfectly justified in holding that the respondent was entitled to specific performance of the contract. In the result the appeal is dismissed with costs. K. M. A. Appeal dismissed.