1996 PLP 60 (MLD)

Issues: (1) Whether the plaintiff has not performed his part of the agreement dated 29‑1‑1976 within the stipulated period and if so, what is its effect? (2) Whether the suit property was agreed to be sold for Rs.14,000 instead of Rs.22,000 mentioned in the agreement dated 29‑1‑1976? (3) Whether the agreement dated 29‑1‑1976 is binding on the parties and still effective? OPP (4) Relief. The execution of the agreement (Exh.Pl) and the delivery of possession is admitted and after recording of the evidence, the trial Court held that the sale price of the suit land was Rs.22,000 and that Rs.10,000 were paid at the time of its execution while the remaining amount was to be paid on 1‑5‑1976 and as it had not been paid till or on 1‑5‑1976, therefore, the agreement entered into between the parties was no longer binding upon the appellant/defendant and dismissed the respondent's suit vide judgment and decree, dated 12‑3‑1981 holding that time was the essence of contract. The First Appellate Court reversed the findings of the trial Court and relying Exh.P2 (copy of mutation) and Exh.P3 (copy of Jamabandi) held that the appellant became owner of the land in dispute in 1978 and the suit was filed in 1979 and, therefore, it was in time and further held that as the title of the appellant had not become perfect earlier, therefore, there was no question of bringing the suit earlier. The First Appellate Court also held that in such circumstances the time is not the essence of the contract.

4. Learned counsel for the appellant has assailed the judgment and decree of the First Appellate Court and has contended that the agreement (Exh.Pl) shows that, the respondent was bound to make the payment of balance amount of Rs.12,000 on of before 1‑5‑1976 and on his failing to do so the earnest money stood forfeited under paragraph No.4 of the agreement and the agreement read as a whole shows that time was the essence of the contract and the earnest money stood forfeited due to the fault or failure of the respondent and the agreement is not binding on the appellant. Reliance in this connection is placed upon Sarfraz Haider and another v. Mst. Khatija Bai and 4 others (1990 CLC 1649 Kar.), Steedman v. Drinkle and others (AIR 1915 PC 94) and Jamshed Khodaram Irani v. Burjorji Dhunjibhai (AIR 1915 PC 83). Learned counsel for the appellant has further contended that the judgment of the First Appellate Court is not a speaking judgment and no reasons have been given for the decision given in the appeal and as such the judgment of the First Appellate Court suffers from patent illegality and is liable to be set aside. Reliance in this connection is placed upon Rafiq Abbas Zaidi and 3 others v. Mst. Shahida Begum and 3 others 1983 CLC 2036.

5. On the other hand, the learned counsel for the respondent contended that the agreement itself does not say that the time mentioned for the making of the balance amount is the essence of the contract and the appellant was to transfer the land in dispute on the receipt of the balance amount of sale consideration only after having perfected his title and, therefore, no date was fixed for the performance of the contract and the appellant became owner of the disputed property in 1978 and the limitation period started against respondent/plaintiff only on the refusal of the appellant to perform his part of the contract. Reference is made to Article 113 of Limitation Act of,1908. The present suit was instituted in 1979 which was within time and the agreement was binding between the parties and the First Appellate Court correctly decreed the respondent's suit. It is further contended by the learned counsel for the respondent that even if the date mentioned in the agreement i.e. 1‑5‑1976 of the payment of the balance amount is considered to be the essence of the contract of sale, still as the appellant /vendor had not perfected his title to the land in dispute by the said date, there was no breach of the contract on the part of the respondent/vendee, due to his failure to pay the balance of amount of sale consideration on that date, as the appellant's title was not perfected and the appellant was not in position to transfer the land in dispute in favour of the respondent on the said date. In regard to paragraph No.4 of the agreement, the learned counsel for the respondent contended that the right to forfeit the earnest money by itself, would not suffice to establish that time was of the essence of contract and no urgency or compulsion was disclosed by the defendant and no evidence was brought on the record to show that due to the non‑payment of balance amount on 1‑5‑1976, the consequences adverse to the interests of the defendant/vendor had followed. Even otherwise it is contended that the sale could not be completed, in any case as the appellant/defendant's title was imperfect on that date and he was not in a position to transfer the land in dispute in favour of the respondent. Reliance is also placed on section 51 of the Contract Act, to contend that plaintiff is not bound to tender the purchase price unless defendant is ready and willing to perform his part of contract. In support of his contentions, the learned counsel for the respondent has placed reliance upon Mst. Munawar Bibi v. Mst. Maheen Quddusi (1986 CLC 1887 Karachi), Saleh Muhammad and others v. Subedar‑Major Muhammad Bakhsh and others (PLD 1960 (W.P.) Lah. 231), Mst. Mumtaz Begum and 2 others v. Bomanshaw Burjorji Gazdar and 2 others (1984 CLC 1820), Mirza Muhammad Hussain v. Abdul Hamid and others (1982 CLC 81), Kruttiventi Mallikharjuna Rao v. Vemuri Pardhasaradhirao (AIR (31) 1944 Mad 218), Haji Sattar Haji Mohamed v. Allah Rakha Dhanji (PLD 1963 (W.P.) Kar. 786); Bashir Ahmad and 4 others v. Muhammad Ramzan and another (1988 CLC 1600); Syed Nasir Ahmad Kazmi v. Syed Muhammad Zulfiqar Ali and others (PLD 1987 Kar. 261); Begraj v. Alisher and another (AIR 1923 Sindh 50) and Katta R. Venkatesayya and another v. Muhammad Ghouse Saheb (AIR (31) 1944 Mad. 450).

6. The appellant/defendant appeared as his own witness as D.W.1 and did not state that the date for making the payment of balance amount i.e. 1‑5‑1976 was essence of the contract. Similarly he has not alleged any loss due to the non‑payment of the remaining amount on the said date. The agreement (Exh.Pl) itself also does not mention that the time was the essence .of the contract. In Mst. Munawar Bibi v. Mst. Maheen Ouddusi (1986 CLC 1887 Karachi), it was held that "the mere fact that a certain time is mentioned in an agreement for the performance of an act would not necessarily lead to the conclusion that the time so fixed was essence of the contract. The real intention A of the parties to the agreement has to be deduced from all the surrounding circumstances of the case". It is, therefore, held that the time was not the essence of the contract.

7. Para. 4 of the agreement relied upon by the appellant, no doubt mentions the date for making the payment of the balance amount but the plain reading of this para. of the agreement also shows that the appellant had promised to transfer the land in dispute to the respondent after receiving the balance amount. The appellant obviously was not in a position to transfer the land in dispute to the respondent on 1‑5‑1976 as he had not been conferred the proprietary rights till then and he became owner of the land in dispute in 1978 and prior to that respondent was not under any legal obligation to make the payment to the appellant. Section 51 of the Contract Act of 1872 reads as follows: "When a contract consists of the reciprocal promises to be simultaneously performed, no promisor need perform his promise unless the promise is ready and willing to perform his reciprocal promise." It is fully applicable to the facts of the present case. The respondent need not have offered to make the payment of balance amount to appellant on 1‑5‑1976 as the appellant's title was not perfect on the said date and the appellant was not ready on the said date to perform his reciprocal promise of transfer of land in favour of respondent. Reliance can be placed on Dina Nath Dutt v. Maha Vir Gupta AIR '1958 Punjab 289 (V 45 C 77) (D.B.) wherein it was held that even if time is the essence of contract of sale, where the vendor has not perfected his title to the goods by the date when the contract has to be completed, there is no breach of the contract on the part of the vendee, if he failed to pay the consideration on that date and complete the contract. In Haji Sattar Haji Mohamed v. Allah Rakha Dhanji (PLD 1963 (W.P.) Kar. 786), a Division Bench of Karachi High Court held that in a non‑commercial contract time to be essence must be stated to be so in contract, itself: In the said case suit was brought by vendee for specific performance of contract of the sale in which the balance of purchase money was stipulated to be paid within six months of agreement to purchase. The payment of balance was delayed by vendee because the vendor himself had not yet paid full amount of purchase money to his own; prior vendor and vendee was waiting for vendor to acquire full, valid, legal and marketable title and if these circumstances it was held that time was not essence of contract. It is, therefore, held that the agreement remained binding on the parties even after 1‑5‑1976.

8. I have also gone through the judgments cited by the learned counsel for the appellant which are distinguishable on facts as well as on law laid down in them.

9. In the result, this appeal is dismissed with no order as to costs. AA./S‑473/L??????????????????????????????????????????????????????????????????????????????????????? Appeal dismissed