P L D 1977 Karachi 191 (PLP)

8. I have given my best consideration to the respective contentions and arguments advanced by the learned counsel for the parties. Having regard to the voluminous documentary evidence produced by the parties, all said and done, the conclusion is inescapable that, prima facie, there existed a contract for sale of the suit property between the parties. Without meaning to decide the issue finally, for the present purpose. I would not hesitate to express that to my mind it is unimaginable that a huge sum of Rs. 30,00,000 was parted with only on a pious wish that the sale of the property would come about in this future. However, the question that has vexed my mind is, is this fact alone sufficient to pass order of injunction tying down the hands of the defendants from dealing with their property? And if not, will the plaintiff be able to avail the remedy sought in the suit by way of specific performance if the suit is decreed for that relief?

9. As to the first question Mr. Sharaf Faridi emphatically contended that the Court is not required to go into the niceties of the case on merits at this stage. Learned counsel made this submission in an effort to tide over the forceful contention of other side that there is clear documentary evidence available to show that at one stage the plaintiffs had abandoned the contract and demanded refund of the advance payment. It is needless for me to burden this order with the decision as to what is meant by prima facie case and of the considerations which weigh with the Court in the matter of grant of temporary injunction. The principles governing the discretion for granting such relief are now very well laid down. I am unable to agree that the question of injunction can be approached with any hard and fast rule like a mathematical formula. Injunction i9 a discretionary and equitable relief and each case has to be decided in the light of its own facts and circumstances.

10. I agree that the decision in such cases lies within a narrow compass and care is required not to adjudicate an issue as such at this stage but, nonetheless, in order to judge whether the plaintiff has made out a prima facie case, the assessment of the facts of the case in the limited sense is inevitable. In am, therefore, of the clear opinion that a Court for this purpose would be wall within the bounds of legitimate exercise of this jurisdiction to take into consideration the admitted documents placed before tit. It is needless to say that all such assessments are of tentative nature and do not bind the Court trying the suit at the hearing. If authority is required for this proposition reference may be made to cases reported in 1970SCMR654 and PLJ1975SC71.

11. Now the prayer for injunction is being sought as an ancillary relief and therefore necessarily has reference to the main relief of specific performance. The plaintiffs in order to show that they have a prima facie case must not only show that there was a contract between the parties but that B prima facie the contract still subsisted and further that all the pre‑requisites for grant of such relief were present in the cast or that there is nothing to impair the remedy sought at the trial. In this connection I might with advantage refer to Marghub Siddiqi v. Hamid Ahmad (1974 S C M R 519) where their Lordships of the Supreme Court made the following observations:‑ "Although as interim injunctions are granted under Order XXXIX, rule 1 of the Code of Civil Procedure, the principles, which govern the grant of injunction contained in the Specific Relief Act, have also to be kept in view. Under section 56, clause F, one of the principles is that an injunction cannot be granted to prevent the breach of a contract the performance of which cannot specifically be enforced. Now it is well settled that contracts for personal service are not contracts which could be specifically enforced. The granting of an injunction therefore, in a service matter like the present one is opposed to the principles governing the grant of such injunctions." This being the position, it would legitimately be open to the defendants toy show that the contract sought to be enforced is not prima facie capable of specific performance, even for the purposes of temporary injunction.

12. In the light of the above principles I shall now examine the circumstances of this case. In Annexure D/27 which is letter dated 13‑12‑1972, addressed by the plaintiffs to the defendants it was stated as follows: "It was not proper for K. G. C. to have paid Rs. 30,00,000 without obtaining possession of the plot. Fancy Foundation should, there fore, arrange to hand over clear possession of the plot to K. G. C. within three months; alternatively K. G. C. would be prepared to accept back amount paid to Fancy Foundation plus interest for the period. Fancy Foundation should either arrange to retain the plot for itself or sell it to some other party." Again in Annexure 28 which is a letter dated 9‑2‑1973, the plaintiffs stated as follows:‑ "I, therefore, write to request to arrange to hand over vacant possession of the Nariman Kothari Chambers plot to K. G. C. without any incumbrance within one month from the date of this letter and make out marketable title and complete the sale and conveyance within three months as otherwise we shall consider that the agreement for sale has been cancelled and the Fancy Foundation will be liable to refund the amount of Rs. 30,00,000 to K. G. C. with interest from the date of payment and other costs." In Annexure D/15, which is a letter dates 14‑11‑1974, the plaintiffs again wrote as under:‑ "We shall, therefore, be grateful if in "accordance with this indication you will kindly arrange to have vacant possession of the plot of Nariman Kothari Chambers, free from all incumbrances, given to us immediately failing which we would be constrained to request you kindly to refund the entire amount of Rs. 30,00,000 paid by us towards purchase price of the plot together with interest." On 4‑7‑1975, defendants' Advocate wrote to the plaintiffs vide Annexure D/23 saying that the defendants were willing to hand over the vacant possession of the plot as it had been obtained from the tenants pursuant to the judgment of the Supreme Court dated 30.5‑1973. It was further stated in this letter that the arrangement for sale of the above‑mentioned property to the plaintiffs was subject to the claim of the tenants for re‑instatement. It was stated at the Bar by Mr. Khalid Ishaque that as many as six times the possession was offered, but the plaintiff insisted on the defendants to settle the claim of the tenants as regards re‑induction in the new building to be erected on the plot. This position is reflected in the notice given through the Advocate by the plaintiffs dated 2‑4‑1975 (Annexure B to the plaint). It was stated in this notice as under :‑ "Our clients accordingly require you to negotiate and settle with the tenants and occupants of the property and make the property free of rights and claims of others and free of clog or other restrictions on the property and its title." From the above circumstances, two things emerge, prima facie, namely that at one stage the plaintiffs were willing to accept refund of the advance payment alongwith interest and other charges; and that until the filing of the suit the plaintiff insisted on the possession to be delivered free from claims of the evicted tenants, whereas the defendants continued to offer possession subject to all legal rights vesting in the tenants under the judgment of the Supreme Court. It was in the context of these circumstance that Mr. Khalid Ishaque forcefully contended that the plaintiffs are disentitled to discretionary relief as by their own showing monetary compensation was considered adequate relief by them. Also that the parties were a variance as to the essential terms of the contract regarding the nature o1 the possession to be delivered by the defendants. In this connection, learned p counsel placed reliance on Ramji Patel v. Rao Krishwar Singh (AIR 1929 P C 190), which was a case for specific performance of contract for sale of immovable property. Their Lordships of the Privy Council refused decree for specific performance on the finding that compensation in money was an adequate relief to the plaintiff and in view of the express provisions contained in sections 12(c) and 21 (a) of Specific Relief Act. He also cited the case of Hari Kishna v. K. C. Gupta (A I R 1949 All. 440) in which following the above Privy Council case, it was held that in a suit for specific performance of contract where it is established that the plaintiff had himself at one stage offered to accept damages as adequate compensation in place of specific performance, the jurisdiction to grant specific performance is barred by section 21(a), Specific Relief Act. 12‑A. Since Mr. Sharaf Faridi strongly relied upon the judgments mentioned earlier I would consider the same in the light of the present case. The first case referred to above by the learned counsel namely Mst. Iqbal Fatima v. Kaiser Tanveer (P L D 1976 Kar. 734) is my own judgment in a case for grant of temporary injunction. The passage relied upon is contained in para. 9 of the judgment which states that it was not necessary to give finding on the factual controversies raised by the parties as they would be subject‑matter of decision at the trial and that what was necessary to see was whether the plaintiff had made out an arguable case by raising rx serious question to go to trial. There can be no cavil against the proposition of law stated in the passage as the same is axiomatic in regard to the matters of temporary injunction. However, the perusal of the judgment will show that tentative assessment of the facts of the case was undertaken for the purpose of determining prima facie case. The second case referred was Perveen Begum v. Mohammad Sarwat Khan (P L D 1956 Kar. 521) in which in a suit for specific performance of contract for sale of plot of land the Court granted temporary injunction restraining the defendant from transferring the property. In this case, Inamullah, J., (as he then was) had relied upon the observations of Lord Justice Turner in the case of Halley v. The London Bank of Scotland (12LTR747). As the counsel particularly relied upon this observation it is necessary to reproduce it, which is as under s‑ "I have always understood the rule of the Court to be that, in a case where there is a clear and undoubted contract as to the validity of which no dispute arises for the sale of the property, the Court will not after that contract has been entered into permit the vendor to transfer the legal estate to a third person notwithstanding the Its pendens will operate against that third person, and I think that as well founded in principle, because the effect of the contract is to pass the whole equitable interest out of the vendors. So long as the contract is an undisputed contract the whole of the property is in equity transferred from the vendors to the purchaser; the vendor then becomes a trustee for the purchaser and the trustee cannot be permitted to deal with the legal estate so as to inconvenience tie purchaser." In order to appreciate the full impact of the dictum contained in this passage I have examined the whole judgment of the Court of Chancery and I propose to discuss the effect thereof in some detail. This case pertained to an appeal arising out of an order of the lower Court granting an injunction whereby the defendants were restrained from selling certain houses and property belonging to the defendants which were the subject to an alleged contract with the plaintiff. The plaintiff had brought a suit for specific performance of the contract for lease of the property. The decision of this appeal was in favour of the appellant and the order of injunction was dissolved. Lord Justice Turner after stating the general rule contained in the reproduced passage went on to observe as under :‑ "I think, therefore, that in a case where there is an undisputed and clear contract, there the Court will undoubtedly interfere in restraining the vendor from transferring the legal estate to a third person. That, however, as I think, is only in cases where there is a clear undisputed and undoubted contract. Now, without giving any opinion upon the result of this case, which I am very anxious not to do, in as much as it is not now the proper time to decide the question as to what effect of this contract would be, I go no further than to say that I think it is undoubtedly open to serious question what the result of this suit may be, so far as respects the contract, entered into by the plaintiff, and in that case I apprehend the question whe ther the vendor shall be permitted to transfer to a third person the legal estate becomes a question of comparative convenience or inconvenience; and here, I think, there is no doubt whatever as to the direction in which the balance of convenience or inconvenience lies; on the one side there is nothing more than that the legal estate will be transferred to a third person possibly, and that the transfer of the legal estate to that third person may render it necessary for the vendor either to amend c‑r file a supplementary bill and being the party to whom the legal estate is transferred before the Court. There is nothing therefore but the extra cost which will be incurred by that proceeding and which it will be quite in the power of the Court to deal with at the hearing of the case, if the plaintiff should succeed in this suit. On the other hand, if this injunction is maintained and the defendants are prevented from dealing with the estate at all by reason of the pendency of this suit tire consequence may be. and as it is stated at the bar, will be that they may be prevented from entering into beneficial contract." In view of these circumstances the Court of Appeal came to the conclusion that the comparative inconvenience by the grant of temporary injunction weighed in favour of refusal to grant the interlocutory relief.

13. With all respect to the learned Judge who decided the Karachi case I would further point out that the rule adopted by the learned Judge pertained to the peculiar legal position under the English Law which recognises a distinction between legal and equitable estates. Under the English Law, a contract of sale of real property makes the purchaser the owner in equity of the estate. Such a distinction is not recogaisad in our system of law which is governed by statutory provisions. Be that as it may, the sub sequent passage reproduced by me in this judgment quite clearly shows that ‑the learned Judges of the Court of Appeal in the English case did not regard the dictum stated by them as an invariable rule governing the question of temporary injunction in suits for specific performance of contract for the sale of real property. The judicial opinion in England has not been consistent in this regard which is illustrated by the decision in the case of Turner v. White (49ER252) which was similarly a case of injunction in a suit for specific performance, to restrain a vendor from letting or selling the estate. The Master of Rolls, Lord Langdale, in this case said that he would not now decide on the validity of the contract; and, as to the injunction to restrain the defendant the motion was refused with a condition that a purchaser pendente life would take the property subject to the rights of the ‑plaintiff. From the examination of these cases, therefore, I have come to the conclusion that each case depends on its own facts and circumstances and no hard and fast rule can be laid down in every case of specific performance of contract for sale of the immovable property, without having regard to the respective inconvenience resulting from the grant of temporary injunction, the Court is to grant such relief. Cases can be conceived where such relief may unhesitatingly be given, as for instance, where in pursuance of the written contract for sale of such property, the vendor has delivered to the vendee possession of the property in part performance of the contract, the balance of inconvenience in such a case would obviously be in favour of grant of temporary injunction. This principle is also deducible from the following observation in the judgment under discussion in the Karachi case‑ "It is always left to the Court to find out whether the contract is one which would prima facie entitle the plaintiff to the relief he has sought for." . For these reasons in my opinion this judgment also does not support the case of the defendants. It is not necessary for me to burden this order with the discussion of the decision in S. M. Gupta & Company v. Sardar Nanda Ghosh (P L D 1960 Dacca 153) as it deals with the general principles for the grant of temporary injunction which are quite well‑established.

14. This brings me no w to the consideration of the important question of balance of convenience or inconvenience. It is common ground that the principle of lis pendens as enacted in section 52 of the Transfer of Property Act would govern any transfer made by the defendants during the pendency of this suit. It was conceded at the Bar by the learned counsel for the plaintiffs that section 52 gives protection to the plaintiffs in so far as any e subsequent transfer of the property effected during the pendency of this suit would not affect the rights of the plaintiffs. The protection that the; plaintiffs seek by way of temporary injunction is therefore already available 1e to them. In case the plaintiff succeeds in obtaining a decree for specific performance of the contract the same shall be binding upon the transferee pendente lire by virtue of section 52 of the Transfer of the Property Act. I am quite conscious while saying so that in the case of Hadly v. London Bank of Scotland referred to above. the learned Judge has stated that the only inconvenience that would result by refusal of injunction would be that the plaintiff would have to implead the subsequent purchaser as a party to the suit. However, upon authority it can be stated that the position in the sub‑continent by virtue of the statutory provisions of section 52 of the Transfer of Property Act is substantially different. A plaintiff protected by the provisions of this section. is not under obligation, for obtaining effective relief against such transfers, to implead such subsequent transferees who have acquired right in the subject of the litigation through transactions during the pendency of the suit. This precise question came up for consider ation before a Full Bench of the Kerala High Court in the case of Lakshimanan v. Kamal (A I R 1959 Kar. 67) while repelling the contention of the subsequent transferees that the decree and the execution proceedings were not binding on them as they were not impleaded in the suit, the Court observed as under :‑ "If a transfer or other dealing with a suit property pendente late is void as against the decree‑holder and be is entitled to ignore it and it cannot affect his rights under the decree no purpose will be served by bringing on record after the transfer the transferee or the person in whose favour the property has been dealt with; and to insist that the transferee or the persons in whose favour the property has been dealt with should be brought on record in such cases would only be to hold out a premium to persons who desire to escape from their legal obligations and unnecessarily protract legal proceedings and would defeat the very purpose for which section 52 of the Transfer of Property Act has been enacted." Similar view was held in Munilal v. Bhaiya Lal (A I R 1962 Madh. Pra. 34). Indeed the learned counsel for defendant himself contended that section 52 of the Transfer of Property Act extends statutory protection to the rights of the plaintiffs.

15. It was argued with some vehemence by Mr. Khalid lshaque that the balance of inconvenience weighs heavily in favour of the defendants inasmuch as it is quite evident that by lapse of time the defendant would be prejudiced if their bands are tied so far as dealing with the property is concerned as they are being offered attractive price for their property. In the event of the suit failing to succeed as regards the relief of specific performance, the loss that would be occasioned to them would result in depriving them of utilising the funds procured from the disposal of the property for being used for the purpose of their business. Counsel argued that in case they allowed the property to remain unconstructed, they would be exposing themselves to criminal prosecution under the Urban Rent Restriction Ordinance, 1969.. Whereas if the injunction is refused the plaintiffs' rights in case of a decree for specific performance would remain unaffected. On the other hand, if the injunction is issued the defendants will have to keep the plot of land vacated and unutilised as long as the suit is pending which in the present situation is likely to take considerable time. Mr. Khalid Ishaque stated at the Bar that the defendants would be prepared to expressly mention the pendency of the present suit in the conveyance deed in case any transaction comes about regarding transfer of the suit properly which would ensure notice to the purchaser that his rights will be subject to the decree in the suit. Having regard to these circumstances, therefore, there is no doubt in my mind that the balance of inconve nience lies in favour of the defendants.

16. Looking therefore at the matter in the light of the aforesaid discussion, I am led to the conclusion that the plaintiffs have not succeeded in making out a prima facie case, principally having regard to the fact, a can at present be judged, that they were willing to accept money compensation for dropping the contract. The probabilities of the case as regards the balance of convenience or inconvenience also seem to weigh against the confirmation of the order for temporary injunction. There is thus no ease made out for grant of this application.

17. However, the circumstances of the case very strongly warrant a order for putting the defendants to terms. The necessity to do so, to m mind, arises out of the consideration that the defendants have failed at this stage to make out any justification for withholding the amount of Rs. 3 lacs received by them towards the transaction in controversy, as it appears the defendants, even if the breach is established to be on the side of the plaintiffs, are not going to suffer any loss on that account. As earlier stated, for about nine long years the defendants had the use of the huge sum of money and if the respective positions of the parties remain as the appear to be, there is every chance of the plaintiffs succeeding to get a decree for the refund of this amount. While therefore refusing to con the injunction, in order to protect the interests of the plaintiffs, I soul order the defendants to deposit the sum of Rs. 30,00,000 in Court within .one month from this date and after they have done so, the amount would be deposited by the Nazir of this Court In the Habib Bank, Court Road Branch. Karachi, as a time deposit at the maximum available interest. The ad interim order shall continuo in force until the amount is paid and upon failure by the defendants to do so within the period stated above, the ad interim order shall stand confirmed, but if they so deposit the amount, the same shall stand vacated. It may be clarified that .this order shall not be treated as authority to transfer or otherwise deal with the property as contemplated by section 52 of the Transfer of Property Act and any transfer or dealing with the property shall be subject to the degree is this suit. The defendants shall further, in case of any transfer, expressly mention the fact of pendency of this suit in the conveyance deed or other instrument of transfer.

18. In the result, the application is disposed of on terms stated above. The costs to be the costs in the cause. S. A. H. Order accordingly.