1993CLC937 (PLP)

.In the case in hand there is absolutely no ground for exercise of discretion against the plaintiff‑appellant. He has categorically proved that there was an agreement for sale in his favour and he has been ready and willing to perform his part of the contract. It is also not denied that it is the respondents who have failed to execute the sale‑deed in favour of the appellant and, hence, however failed to perform their part of the contract. Consequently, it is a fit case where discretion is to be exercised in favour of the appellant in whose favour it has been exercised by the learned trial Court. Exercise of discretion by the learned appellate Court had to be on the basis of sound and judicial reasons. There are absolutely no sound and judicial reasons for interfering with the decree granted by the learned trial Court and for refusing a decree for specific performance of the contract to the appellant merely because the Court feels that decree for specific performance may not be passed. Omission of the term in the agreement Air sale, to the effect that contract can be specifically enforced through a Court of law and the decree for specific performance can be obtained by filing of a suit is not a valid and lawful ground for refusing the grant of such decree. Argument of the learned counsel for the respondents to the effect that as there is specific penalty provided in the deed of agreement of sale itself in the shape of payment of damages and there is alternate prayer for grant of wages in the plaint, hence, prayer for the grant of decree for specific performance of contract has been rightly refused by the learned first appellate Court, is also misconceived. Learned counsel had sought support for the argument from the cases of Messrs Karachi Gas Company, Limited, Karachi v. Messrs Fancy Foundation PLD 1977 Karachi 191 and Ramji Patel v. Rao Kishore Singh AIR 1929 P.C.

190. In the later judgment at pages 193 and 194 of the report, it has been held as under:‑ "It was found as already mentioned by the learned District Judge that compensation in money was an adequate relief to the plaintiff and his finding was affirmed by the Court of the Judicial Commissioner. Their Lordships have already stated that there was evidence before the learned District Judge who was the first appellate Court, which would entitle him to arrive at such a finding. Consequently, it must be taken for the purpose of this appeal that the above‑mentioned finding stands. Their Lordships desire to add that they see no reason for thinking that the finding of the Courts in India in this respect was in any way incorrect." The material provisions of the Specific Relief Act (Act 1 of 1877) are Ss 12 (c) (d) and the Explanation thereto, 19,21 (a) and 22 and are as follows: "

12. Except as otherwise provided in this Chapter, the specific performance of any contract may in the discretion of the Court be enforced; (c) "When the act agreed to be done is such that pecuniary compensation for its non‑performance would not afford adequate relief; or (d) "When it is probable that pecuniary compensation cannot be got for the non‑performance of the act agreed to be done. Explanation‑‑‑Unless and until the contrary is proved, the Court shall presume that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money, and that the breach of a contract to transfer movable property can be thus relieved.

19. Any person suing for the specific performance of a contract may also ask for compensation for its breach, either in addition to, or in substitution for, such performance. If in any such suit the Court decides that specific performance ought not to be granted, but that there is a contract between the parties which has been broken by the defendant and that the plaintiff is entitled to compensation for that breach, it shall award him compensation accordingly. If in any such suit the Court decides that specific performance ought to be granted but that it is not sufficient to satisfy the justice of the case, and that some compensation for breach of the contract should also be made to the plaintiff, it shall award him such compensation accordingly.

21. The following contracts cannot be specifically enforced: (a) A‑contract for the non‑performance of which compensation in money is an adequate relief.

22. The jurisdiction to decree specific performance is discretionary, and the Court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the Court is not arbitrary, but sound and reasonable, guided by judicial principles and capable of correction by a Court of appeal. The following are cases in which the Court may properly exercise, a discretion not to decree specific performance; Where the circumstances under which contract is made are such as to give the plaintiff an unfair advantage over the defendant, though there may be no fraud or misrepresentation on the plaintiffs part. Reliance was placed by the learned counsel for the plaintiff on the explanation to S.12 and urged that the learned District Judge was right in making a decree for spec performance. The obvious answer is that in this case the presumption referred to in the explanation was rebutted because it was proved and found that the breach of the contract could be adequately relieved by compensation in money. It was further argued that it was probable that pecuniary compensation could not be got for the non‑performance of the act agreed to be done, and that consequently, the case fell within S.12(d). This point as far as their Lordships can discover, was not taken in the Courts in India, nor was it mentioned in the reasons set out in the plaintiff's‑appellant's case on appeal to this Board. The learned counsel for the plaintiff was not able to draw their Lordships' attention to any evidence which would justify them in holding that there is a probability that pecuniary compensation if awarded, cannot be recovered. If there were any substance in this point, it would undoubtedly have been relied upon by the plaintiff, because, if proved, it would have afforded a good ground for obtaining the decree for specific performance which he desired. In view of the finding that compensation in money is an adequate relief to the plaintiff and in view of the express provisions contained in Ss. 12(c) and 21(a), their Lordships are of opinion that a decree for specific performance of the contract should not be made." The case of Messrs Karachi Gas Co. Ltd., Karachi v. Messrs Fancy Foundation PLD 1977 Karachi 191 is not at all relevant for the purpose of decision to the controversy in question as it relates to the applicability of the principle of lis pendens to the suits of specific performance of the contract while deciding the question of issuance of interim injunction against alienations pendente lite. The case of Ramji Patel v. Rao Kishore Singh AIR 1929 PC 19() is distinguishable on facts as is clear from the portion of the judgment which has been reproduced above. Some of the distinguishing feature of the case in hand are that it has been held by the two Courts that the appellant entitled to the grant of a decree of possession of the land in question as he has proved his case. There is absolutely no evidence or finding which could being the cast within the scope of exceptions contained in section 21 of the Specific Relief Act. Learned trial Court has passed a decree for specific performance of contract in his favour. Learned first appellate Court has' interfered with the exercise of discretion by the learned trial Court without any lawful and valid grounds. Alternate plea to claim damages in not a valid ground for refusing the decree for specific performance of the contract. In case of Abdul Karim v. Muhammad Shaft (1973 SCMR 225) it has been held as under:‑ "We are unable to accept this contention in view of the clew provisions of the Spec Relief Act which is applicable in !hi` country. Section 12 provides that the specific performance of the contract may be enforced in the discretion of the Court. Explanation to, section 12 of the Act clearly states that unless and until the contrary is proved, the Court shall presume that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money and that the breach of contract to transfer movable property can be thus relieved. Section 19 provides that any person suing for specific performance of a contract may also ask for compensation for its breach, either in addition to or in substitution for, such performance. Section 20 says that a contract otherwise proper to be specifically enforced, may be thus enforced, though a sum be named in it as the amount to be paid in case of its breach, and the party in default is willing to pay the same. Section 22 provides that the jurisdiction to decree specific performance is discretionary, and the. Court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the Court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a Court of appeal." It is clear from the ratio of the above‑cited case that merely because there is a penalty clause in the agreement and there is a prayer for the payment of damages as an alternate relief, is not a ground to refuse a decree for spec performance of the contract. Consequently, this authority is squarely applicable to the facts and the circumstances of the case in hand and, hence, I hold that the decree for the specific performance of contract granted by the learned trial Court could not have been interfered with by the learned First Appellate Court who has exercised his jurisdiction illegally and with a material irregularity. Resultantly, this regular second appeal is accepted, the impugned judgment' and decree passed by the learned lower appellate Court is set aside and that of the learned trial Court is restored with costs throughout. H.B.T./N‑125/L Appeal accepted.