2002 PLP 2865 (YLR)

Respondents have filed Regular First Appeal No.79 of 2001 also praying for setting aside the decree for recovery as granted by the learned Civil Judge.

7. Sheikh Ziaullah, Advocate; the learned counsel for the appellants, contended that in absence of a clause in the agreement, pleading in plaint and the prayer in the suit for grant of compensation to the appellants, the learned Civil Judge exceeded his jurisdiction by decreeing recovery in their favour, of Rs.20,00,000 alongwith interest @ 20% and this relief was beyond the terms and conditions of the agreement to sell. Instead he claimed a decree for specific performance of contracts stating that the respondents were vested with a valid title to transfer the suit property to the appellants. And that the learned Civil Judge erred at law by holding that respondent's title was subject‑matter of litigation, therefore decree for specific performance could not be granted, specially when the appellants were held to have performed their part of agreement qua the timely payment. It was further contended that agreement to sell dated. 17‑6‑1990 (Exh.P‑6) made full disclosure of the title, therefore the respondents now cannot be allowed to turn back and hide behind any litigation thereupon and they were bound to transfer a valid title of the suit property to the appellants. And that if there were any imperfections, it was the duty of the appellants to remove the same and then transfer the title of the suit property in performance of the agreements upon receipt of the balance of the sale price (held by the learned Civil Judge to be Rs.56,00,000) from the respondents. It was also contended that respondents had failed to disclose the pending litigation at the time of the transaction, therefore it was the contractual obligation of the respondents to rectify the deficiency in and remove the cloud upon the title and fulfil the terms of agreement. It was also asserted that the appellants at minimum could not be refused decree qua Plot No.1913 under proviso to clause 5 of agreement dated 17‑6‑1990.

8. Mr. Umar Ata Bandial, Advocate; the learned counsel for the respondents also claimed that the learned Civil Judge had no jurisdiction to pass the decree for recovery of money in absence of any clause thereto in the agreement, pleading in the plaint, evidence on record and prayer in the suit. It was further contended that appellants had renounced the agreement to sell dated 17‑6‑1990 in para. 10 of the plaint by terming it as fraudulently and deceptively procured from the appellants and alleging agreed sale price to be Rs.56,00,000 as against Rs.66,00,000 mentioned in the said agreement, therefore, they cannot seek specific performance of such an agreement. And that receipt dated 5‑6‑1990 only related to payment of token money and did not form a concluded agreement and agreement dated 17‑6‑1990 (Exh.P‑6) was the applicable agreement with the binding terms between the parties. It was further stated by the learned counsel for the appellants that case of the appellants rest upon four premise regarding disentitlement of appellants to claim specific performance. (a) renunciation of agreement by appellants in para. 10 of the plaint; (b) denial of the agreed price of Rs.66,00,000 by appellants and their insistence upon the same being Rs.56,00,000 tantamounted to changing the terms of the concluded agreement dated 17‑6‑1990 and appellants could not pick and choose some terms from the receipt and some from the agreement to sell; (c) non‑payment by appellants as per agreed schedule strictly because time was of the essence of the contract; and upon failure of appellants to pay the second instalment of Rs.30,00,000 as per the agreed schedule, the respondents exercised their option to rescind the said agreement by notice. The learned Civil Judge was wrong to presume on the basis of a copy of the cancelled Pay Order of Rs.29,00,000 (Exh.P‑1) that the same was really offered by appellants to the respondents who refused to issue a receipt thereto, hence the performance by the appellants. In fact Pay Order itself being a bank instrument in writing did not require a formal receipt which was never refused because no such Pay Order or any amount in cash was ever offered by the respondents; and (d) full disclosure was made in the agreement and the respondents were found to take the contract as entered and executed by them with the imperfect title. The learned counsel relied upon a number of judgments in support of his contentions. It was also contented by the learned counsel that the appellants had only sought a decree for specific performance qua Plot No. 19/3 and not for the whole land which was later included by amendment in the plaint upon respondents objection that the agreement was not severable and part performance could not be granted. And the mala fide conduct of the appellants is evident from the fact that despite direction by the learned Civil Judge as well as the Honourable High Court, the appellants did not make the deposit of Rs.30,00,000 to seek specific performance although time extension had also been sought by them. And in fact they had never been willing and ready to make the said payment because they were property dealers seeking to exploit the situation for earning profits by delaying the performance of the contract, for finding a deal thereto. Reliance was placed upon PLD 1990 Lahore 82, 1999 SCMR 1362/1366, (1995) Supreme Court Cases 115 (Indian) and 1987 SCMR 398/399.

9. We have considered the arguments of the learned counsel for the parties and have thoroughly examined the record, pleadings of the parties and their evidence.

1. To properly determine the import of appellants' case, it is relevant to reproduce some extracts of their pleadings from paras. 1 to 4 and 10 of their plaint: (1) That . defendant No. 1 entered into an agreement to sell on 5th of June, 1990 all the four plots of land situated at Sundar Das Road, Lahore White House Lane No. 1 for Rs.14,00,000 per plot and received Rs.200,000 from the plaintiff No.1. This agreement contained certain other relevant conditions regarding payment of the rest of the consideration and execution of sale‑deed etc. (2) However, original defendants resiled from their commitment and entered into another agreement to sell on 17th of June, 1990 for a consideration of Rs.66,00,

000. An amount of Rs.10,00,000 was received as earnest money on 17th of June, 1990. Remaining consideration was to be received by the original defendants subsequently: However, sale‑deed was to be executed and registered before the Sub‑Registrar Lahore Cantonment till 17‑12‑1990. (3) It was, however, specifically agreed vide condition No.5 of the said agreement to sell that the plaintiffs shall have the option to claim from the defendants the execution and registration of sale‑deed in respect of one of these plots viz. Plot No. 19/3 after payment of Rs.40,00,000. (4) That the original defendant No. 1 has delivered possession of the Plot No. 19/3 to the plaintiffs. (5)

(6)

(7)

(8)

(9)

(10) That the plaintiffs are illiterate though they can put their signatures in broken urdu. Original defendant No.1 through her attorney and daughter defendant No.2 succeeded and produced signatures of the plaintiffs on a non‑judicial stamp paper of the value of Rs.5 and another ordinary paper while both these papers were blank and nothing had been typed on these papers. Fraudulently and malafidely taking undue advantage of illiteracy and simplicity of the plaintiffs and the confidence the plaintiffs reposed in the defendants, Rs.66,00,000 had, been mentioned although it was agreed to be Rs.56,00,000 for whole of the said bargain. "

2. Pleadings of the parties, statement of their witnesses and submissions of their counsel show that there is no dispute that a transaction was made between the parties regarding the sale of four plots of land and on 5‑6‑1990 Exh.P‑4 was made and signed by respondent No.2 to acknowledge receipt of Rs.200,000 from appellant No.1. Exh.P‑4 also recorded that upon receipt of Rs. 800,000 on 13‑6‑1990, agreement to sell was to be executed and period for registration of sale‑deed (on 5‑12‑1990) was to be six months commencing from 13‑6‑1990 and price per plot was transacted to, be at Rs.14,00,

000. Appellant No.1, appearing as P.W‑4, at four places in first ten lines of his statement, referred to and admitted Exh. P.‑4 to be a receipt. Allah Rakha i.e. P.W.3 also admitted Exh. P.4 to be a receipt upon respondent No.2's letter head. Appellant No.1 (P. W.4) in his statement never claimed this document to be an agreement to sell. Even otherwise Exh. P‑4 being deficient as to the identity of the parties, description and specifics of land under transaction and necessary representations and conditions of an agreement, cannot be legally termed as a concluded agreement between the parties which, as stated in Exh.P‑4, was to be made on 13‑6‑1990 after receipt of payment of Rs.800,

000. Appellants thus could not claim Exh. P‑4 to be an agreement to sell and seek specific performance thereto in their suit and the learned Civil Judge misread the evidence and committed a legal error in adjudging Exh.P‑4 to be an agreement entitled to be cumulatively read with Exh.P.6 (agreement to sell dated 17‑6‑1990) for ascertainment of agreed terms between the parties regarding the actual sale price as Rs.56,00,000.

3. It is noteworthy that appellants in para. 10 of the plaint asserted that respondent No.2, taking advantage of their illiteracy and simplicity, procured their signatures on the blank and non‑printed stamp paper and another ordinary paper and fraudulently scribed Rs.66,00,000 as the sale price instead of Rs.56,00,

000. Yet in paras. 2 and 5 of the plaint they admitted suppression of arrangement dated 5‑6‑1990 and execution of agreement to sell dated 17‑6‑1990 (Exh.P‑6) for a consideration of Rs.66,00,000 against payment of an earnest money of Rs.10,00,

000. In paras. 3 and 7 read with the prayer in the plaint, the appellants sought specific enforcement of agreement to sell dated 17‑6‑1990 (Exh.P‑6) on the basis of covenants contained in para. 5 of the said agreement qua Plot No.19/3 upon payment of Rs.40,00,

000. Appellant appearing as P.W.4 admitted to have signed and thumb marked Exh. P‑6, at a number of places on both pages like P.6/1, P.6/2, P.6/3, P.6/4, P.6/6 though he did state that he had on the advice of respondents' attorney signed on blank stamp paper and an ordinary paper and "Rs.65,00,000" was printed instead of the agreed amount of Rs.56,00,

000. The statement of P.W.4, as made, conveyed the impression that he had signed the blanks only once. There is no statement as to the affixing of thumb-impressions by the appellant No. 1 on any blank papers. At the end of the second page of his statement, appellant No. 1 (P.W.4) stated that respondents demanded Rs.65,00,000 because excess amount was got printed on Exh.P‑6 which amount had not been written at the time of signatures wherefore he through his lawyers gave telegraphic notices dated 17‑9‑1990 and 22‑9‑1990 (Exh.P.7 and Exh.P.8) regarding the fraudulent incorporation of excess price and for registration of the sale‑deed of Plot No.19/3 upon receipt of the Rs.30,00,000 as per clause 5 of agreement dated 17‑6‑1990. In Exh.P‑7 and Exh.P‑8 it was claimed that the appellants came to know of printing of Rs.66,00,000 on 17‑9‑1990 although they admitted to have collected Exh.P‑6 on 18‑6‑1990 from the office of respondent No.1's attorney. It is intriguing that none of the attesting witnesses of Exh. P‑6 namely Muhammad Riaz and Jameel were presented by the appellants to support their version and to prove that the appellant No.1 had signed on blanks. In view thereof appellants' have failed to prove that signatures and thumb impressions of appellant No. 1 were fraudulently, malafidely and deceptively procured by respondent No.2 upon blank papers which were later printed to show a higher price than was agreed between the parties. The appellants in fact did not ever deny Exh.P.6 to be definitive, final, regular and concluded agreement between the parties and was sought to be specifically enforced by them with all its terms and conditions other than the sale price. Appellants while renouncing the most essential and basic term of the agreement (Exh.P.6) qua the consideration/sale price, sought to enforce the remaining, terms and conditions of Exh.P.6. It is also intriguing that the appellants in para. 4 of the plaint stated to be in possession of Plot No.19/3 yet appellant No.1 in his deposition categorically stated that possession of this plot of was to be handed over upon payment of Rs.30,00,000 only. The conduct of appellants thus smacked of mala fide, inconsistence and dishonesty which disentitled them to claim an quitable and discretionary relief of specific performance from the Court.

4. The malady of this case is that even the vendors i.e. respondents do not appear from the record to have acted suitably and truthfully as was required of them by late and morality. They were obligated under section 55 of the Transfer of Property Act to make honest, faithful and full disclosure of any material defect in or cloud on or litigation upon their title and to give all information and documents title to the vendees of their property. No argument of the kind advanced by their learned counsel absolved the respondents of their obligation to openly, candidly and forthrightly disclose the factum of litigation with Settlement Department as to the status and title of property as was ongoing long before the above said agreement to sell. Instead of refusing to make the transaction of sale, the respondents entered into Exh. P.6 with express representations about their clean, clear and absolute title in the following terms: "Whereas the vendor is owner in possession of the land ." In clauses (4) and (5) of Exh.P.6, he appellants represented, assured and undertook that: "

4. That upon full and complete disclosure by the vendor, the vendees have duly satisfied themselves as to title and possession after physical inspection of the land and scrutiny of its documents of title. The vendor shall be liable to produce before the vendees or the Sub‑Registrar as the case may be at the time of registration of the sale- deed, a current extract of Revenue Record showing the title of the vendor to the land as at present." (*words in italics seem to have incorporated through a distinct writing by a Pen) "5. (i)That the vendees shall upon full payment of the consideration price have the right to obtain execution and registration of the sale‑deed for the land in favour of themselves or any person named by them: Provided that the vendees shall have the option to seek from the vendor the execution and registration of sale -deed in respect of the plot, namely Plot No. 19/3, after payment of Rs.40,00,000 (Rupees forty lacs only) The learned counsel for the respondents tried to reinforce his contention relating to full disclosure of litigation and knowledge of appellants through above reproduced words "as at present" at the end of clause (4) where the appellants had undertaken to produce at the time of registration of the sale‑deed, a current extract of Revenue Record showing the title of the vendor to the land" and had assured execution and registration of sale‑deed in favour of the appellants. These words "as at present" can in no way be interpreted to be "full and honest disclosure" of defect in title and pending litigation thereupon. These words were added through a pen and appear to be a dubious incorporation in the computer print out as a device to conceal the defects in title than to disclose the same. As borne out from the statements of all the witnesses i.e. P. Ws.2 to 4 as well as D.W.1 (respondent No.2), respondents negotiated‑ and completed this transaction and its documentation including Exh. P.6 through able assistance of their attorneys. It could not, therefore, be said that appellants were unaware of the intricacies of a transaction and nuances of legal documents evidence the same. In fact responsibility of respondents as vendors was heavier than the appellants as vendees. Disclosure should have been express, clear and unambiguous in the document itself. There is no plausible evidence to infer that the appellants had, opted to take imperfect title and that disclosure as required by law was really made by the respondents. We are, therefore, not convinced that respondents had, performed their duty of disclosure as required by law.

5. The learned counsel for the appellants in order to develop a case for specific performance in favour of his clients has advanced the argument that the learned Civil Judge did not go into the nature of litigation qua the title of respondents, to refuse the decree for specific performance. We are afraid this is hardly a cogent reason to pass a decree for specific performance in favour of appellants who, did not even tender any document or evidence or a replication to refute respondents' pleas in the written statement (reproduced in para. 2 above) or to prove that respondents possessed a marketable and transferable title to execute and register the sale‑deed in their favour. In fact, during the arguments, the learned counsel for appellants did not deny that case as to the Central Government's and its allottee's claim upon the suit‑land as the evacuee land and respondents' claim to its title as Muslim owners was even presently pending before a learned Judge‑of this Court as Custodian of Evacuee Properties and appellants' petitions to be impleaded as parties therein had also failed. In view thereof we have no doubt that a transferable title does not presently vest in the respondents enabling them to transfer the suit‑land to the appellants through execution and registration of a sale -deed. As such refusal of the learned Civil Judge to grant appellants a decree for specific performance of the agreement to sell through judgment and decree dated 19‑12‑2000 is unexceptionable. Even otherwise as has been held above, appellants' conduct also disentitles them to a decree for specific performance of the agreement (Exh.P.6) in view of their false pleadings in para. 4 and para. 10 of the plaint and dishonest depositions through evidence.

6. Both the parties have also assailed the impugned and decree directing payment by the respondents to the appellants of earnest money Rs.10,00,000 alongwith compensation of another Rs.10,00,000 with interest @ 20% per annum from the date of payment of earnest money till realization of the same. Appellants have challenged the decree for recovery of money in their favour to obtain a decree for specific performance of the agreement to sell the suit-land. Since we have upheld the impugned judgment and decree declining appellants the decree of specific performance on grounds stated above, therefore, we are however, of the opinion that appellants are entitled to a decree for recovery of Rs.10,00,000 from the respondents for earnest money paid by them and for compensation/damages which under sections 18 and 19 of Specific Relief Act can be granted even without a formal prayer thereto in the suit. In view of non‑disclosure imperfections in and litigation upon respondents' title to the suit‑land, appellants entitled to respondents compensation.

7. The learned Civil Judge, without specifically stating the reasons to justify his decree for compensation, awarded the appellant a sum of Rs.10,00,000 and interest @ per annum only on the ground of alleged market practice. In absence of any evidence as to market practice or the actual loss suffered by the appellants, decree for compensation of Rs.10,00,000 and for interest @ 20% per annum cannot be sustained. As a result: (a) Appellants' Appeal No.9 of 2001 seeking a decree for specific'' performance of agreement to sell is dismissed for reasons recorded above; (B) Respondents' Appeal No.79 of 2001 and Appellants Appeal No.9 of 2001 against the decree for recovery of money are decided in the following terms. (i) decree of the learned Civil Judge for payment of Rs.10,00,000 by respondents to the appellants on account of earnest money paid by the appellants is upheld, (ii) decree of the learned Civil Judge for payment of compensation and damages by respondents to the appellants is also upheld in principle but the same is set aside to the extent of quantum and interest as awarded by the learned Civil Judge; (iii) the case is remanded to the learned Civil Judge for re‑decision in accordance with law, on the limited question of the quantum of compensation and damages to be awarded to the appellants after giving parties due opportunity of producing further evidence; and (iv) parties shall appear before' the learned Civil Judge on 15th of January, 2002. (c) parties are left to bear their own costs. Q.M.H./M.A.K./I‑97 Order accordingly.