P L D 2003 Supreme Court 425 (PLP)

‑‑‑‑S. 12‑‑‑Contract Act (IX of 1872), S.55‑‑‑Constitution of Pakistan (1973), Art. 185(3)‑‑‑Suit for specific performance of agreement to sell‑‑ Courts below concurrently decreed suit‑‑‑Validity‑‑‑Parties by mentioning one month time in agreement had not intended to make the time of the essence of contract‑‑‑Conduct of parties showed that plaintiff being a property dealer by profession had been anxious for completion of contract within stipulated period‑‑‑Defendant had avoided and neglected to perform her part of contract with a view to frustrate contract, whereas plaintiff had issued timely notice to her for discharge of her obligation by executing relevant documents‑‑‑Defendant herself had been found to be in breach of contract and she could not be permitted to take advantage of her own wrong‑‑‑If plaintiff was in breach of contract, defendant in law and equity was under obligation to provide reasonable time to plaintiff for performance of his part of contract before resorting to hasty and abrupt revocation of contract before expiry of thirty days‑‑‑No stipulation existed in the agreement that in case of plaintiff's failure to perform his part of contract, same would stand revoked‑‑‑Only stipulation in agreement was that on plaintiff's failure to make payment as indicated earnest money would stand forfeited‑‑‑Courts below had rightly found that time was not of the essence of contract‑‑‑Concurrent findings of fact did not suffer from misconception of law or misconstruction of evidence‑‑‑ Supreme Court dismissed appeal in circumstances. (e) Specific Relief Act (I of 1877)‑‑‑

S. 12‑‑‑Contract for sale of immovable property‑‑‑Relief of specific performance, grant of‑‑‑Considerations by Court stated. Generally specific performance of a contract of sale of immovable property is granted by Courts, although there has been a failure to keep the dates assigned by contract, if justice can be done between parties and if nothing in the express stipulation of the parties or in the nature of property, or in the surrounding circumstances make it inequitable to grant the relief. (f) Contract Act (IX of 1872)‑‑‑ ‑‑‑‑S. 55‑‑‑Specific Relief Act (I of 1877), S.12‑‑‑Contract for sale of immovable property‑‑‑Question, whether time was of the essence of such contract‑‑‑Determination of‑‑‑Guidelines stated. Intention to make time of the essence of contract must be expressed in unmistakable language and it may be inferred from what passed between parties before, but not after the contract is made. A mere mention of a specified period in an agreement for completion of sale would not make the time of the essence of contract. In contracts of sale of immovable property, ordinarily time is not considered to be of the essence of the contract, unless it was expressly intended by the parties and the term of contract did not permit of any other interpretation. Abdul Hamid v. Abbas Bhai‑Abdul Hussain PLD 1962 SC 1; Bahawood Deen v. B.G. Desouza PLD 1974 Quetta 36; Ghulam Nabi v. Muhammad Yaqub PLD 1983 SC 344; Essabhoy v. Saboor Ahmad PLD 1973 SC 93; Zaheer Ahmad v. Abdul Aziz 1983 SCMR 559; Muhammad Yaqub v. Muhammad Nasrullah Khan PLD 1986 SC 497; Mussarat Shaukat Ali v. Safia Khatoon 1994 SCMR 2189 and Sandoz Limited v. Federation of Pakistan 1995 SCMR 1431 rel. (g) Specific Relief Act (I of 1877)-‑‑ ‑‑‑‑S. 12‑‑‑Specific performance of contract‑‑‑Undue delay on part of one party‑‑‑Effect‑‑‑Equity would not assist where there had been undue delay on the part of one party to contract and other party had given him reasonable notice that he must complete contract within a definite time. (h) Constitution of Pakistan (1973)‑‑‑ ‑‑‑‑Art. 185(3)‑‑‑Petition for leave to appeal‑‑‑Plea not taken at trial of suit‑‑ Supreme Court declined to entertain same at such stage. Zaheer Ahmad v. Abdul Aziz 1983 SCMR 559 ref. (i) Contract Act (IX of 1872)‑‑‑ ‑‑‑‑S. 55‑‑‑Specific Relief Act (I of 1877), S.12‑‑‑Specific performance of contract‑‑‑Plea that time was of the essence of contract‑‑‑Scope‑‑‑Party guilty of preventing completion of contract within time could not plead that time was of the essence of contract. Zaheer Ahmad v. Abdul Aziz 1983 SCMR 559 fol. (j) Specific Relief Act (I of 1877)‑-‑ ‑‑‑‑S. 12‑‑‑Specific performance of contract, relief of ‑‑‑Entitlement‑‑ Plaintiff has first to allege and prove that he was always ready and prepared to perform his part of contact as same really was. In order to obtain a relief by way of specific performance of a contract, the plaintiff has first to allege and prove that he was ever ready and willing to perform his part of contract from the date of contract to the date of suit, as the contract really was and not in the way he thought the contract to be. Muhammad Yaqub v. Muhammad Nasrullah Khan PLD 1986 SC 497; Sandoz Limited v. Federation of Pakistan 1995 SCMR 1431 and Narinjan v. Muhammad Yunus AIR 1932 Lah. 265 rel. A.K. Dogar. Advocate Supreme Court for Appellant. Gul Zarin Kayani, Advocate Supreme Court for Respondent. Date of hearing: 15th January, 2003. RANA BHAGWANDAS, J.‑‑This appeal with the leave of this Court is directed against the judgment dated 31-1‑1996 passed by the Lahore High Court in R.F.A. No.39 of 1988 maintaining the judgment and decree passed by the learned Senior Civil Judge, Lahore decreeing the suit for specific performance brought by the respondent against the appellant: 2. Appellant Mst. Amina Bibi agreed to sell Plot No. 14‑V, measuring 2 Kanals allotted to her by Lahore Cantonment Cooperative Housing Society, Lahore Cantonment to respondent Mudassar Aziz vide agreement dated 14‑3 -1984 for a total sale consideration of Rs.2,10,000, out of which she was paid a sum of Rs.20,000 as earnest money. As per terms of the contract balance amount was payable to the appellant within one month from the date of signing the agreement and, on payment of the said amount, she was required to sign all the documents necessary for the transfer of the plot in the name of the respondent. Clauses (2) and (3) of the agreement, being vital and relevant to the issues involved in this appeal are reproduced hereunder:‑‑ (2) "That the SELLER shall sell and the Purchaser shall purchase the said plot at a price of Rs.2,10,000 (Rupees two lacs, ten thousand only) out of which, the PURCHASER has paid a sum of Rs.20,000 (Rupees twenty thousand only) as earnest money to the SELLER, and remaining amount is payable within one month from the date of signing this agreement. (3) That the SELLER will make himself available and sign all documents which he is called upon to sign by the Society or the Purchaser on the payment of remaining amount of Rs.1,90,000 (Rupees one lac, ninety thousand only), in connection with the transfer of the plot in the name of the Purchaser, or any of his nominees. " 3. On 11‑4‑1984 respondent sent a legal notice to the appellant through registered post A.D. requiring her to produce the necessary papers of ownership and to sign the papers for transfer. On her part, appellant, through her Advocate, intimated the respondent through telegram dated 14‑4‑1984 that the agreement stood cancelled and earnest money forfeited, as he had tailed to execute the document. In response to the legal notice, appellant through her counsel on 16‑4‑1984 replied to the respondent that she was ready and willing to perform her part of the contract on, or before 13‑4‑1984 but he did not turn up. As a result of his failure to perform the part of his contract, he was telegraphically informed that the agreement stood cancelled and the advance money stood forfeited. In the aforesaid background, respondent tiled a suit for specific performance of the agreement to sell, which, after contest, was decreed by the trial Court on 19‑7‑1987. R.F.A. preferred by the appellant was dismissed by a Division Bench of the Lahore High Court, holding that "the appellant was not entitled to the payment without completing the formalities for transfer‑of the plot in the name of the respondents. The admitted position is that she did not take any step, whatsoever, in this direction, therefore, she was not entitled to receive the balance of the sale price." In the opinion of the learned Judges, appellant was not ready and willing to perform her part of the contract, in spite of legal notice sent to her by the respondent. It was further held that "even the time was not the essence of the contract and appellant was under legal obligation to complete the deal before cancelling it". 4. Leave to appeal was granted to examine the questions, inter alia, whether in the facts and circumstances of the case, highlighted hereinabove, the parties had intended the time to be essence of the contract or by their subsequent conduct, the time had become the essence of the contract. 5. We have heard M/s. A.K. Dngar and Gul Zarin Kiani, learned Advocates Supreme Court on behalf of the parties and carefully scanned the record. Learned counsel for the appellant advanced the following contentions:‑‑ "(i) That the agreement of sale was void and unenforceable owing to the restriction placed on the appellant‑allottee of the plot in view of provisions contained in section 19(2) of the Punjab Cooperative Societies Act, 1925 and Bye‑Law 17(3) of the Bye‑Laws of the Lahore Cantonment Cooperative Housing Society. (ii) That the respondent was neither willing nor ready to perform his part of contract, as he did not part with the balance consideration of Rs.1,90,000 in favour of the appellant within prescribed time limit. (iii) That the respondent was guilty of misrepresenting the facts before the High Court, as after decree in the suit, plot in dispute had been transferred and mutated in his favour in the records of the Society. (iv) That a contract dependent on volition of third party cannot be enforced at law. (v) That the time was of the essence of the contract." 6. Conversely, learned counsel for the respondent submitted that the appellant had categorically asserted to be the absolute owner of the plot in suit in agreement of sale and that the bar of law was neither pleaded in the written statement nor was this point taken before the High Court. In any event, the respondent was entitled to the transfer of the plot in suit in favour of any of his nominees and that after success in the suit he had secured the transfer of the plot in the name of Abdul Hakeem Dogar, who was a member of the Society. Mr. Kayani maintained that there was no misrepresentation of facts as the respondent had approached the Court with clean hands. Learned counsel vehemently urged that the respondent was all along ready, willing and anxious to perform his part of the contract and it was the appellant herself who avoided the performance of her part of contract by not making herself available before the Society for effecting the transfer of the plot in suit. He maintained that execution of the contract was not dependent on the volition of the Society, inasmuch as, the respondent was entitled to have the plot transferred in favour of his nominee. He was even eligible to secure the membership of the Society after the decree, had he opted to have the plot transferred in his own name. Lastly, learned counsel strenuously contended that in contracts of sale of immovable property time is not of the essence of the contract and though a period of one month was stipulated in the agreement for completion of the contract, since the appellant purposely avoided to take steps for obtaining N.O.C. from the Society and appearing for transfer in order to frustrate the contract and thereby committed breach of the agreement, time was not of the essence of the contract. 7. Adverting to first contention of the learned counsel, it may be observed that the appellant did not even indirectly plead the bar of section 19 of the Act, 1925 or Bye‑law 17(3) of the Bye‑laws of the Society. In his preliminary objections, appellant had only asserted that agreement was void send unenforceable at law. Even the argument raised before this Court was not pressed into service before the High Court and the fact that the agreement was incapable of being enforced at law, as the respondent was not a member of the Society, was neither pleaded nor even alluded to. Ordinarily, we would not allow the learned counsel to raise this submission but he submitted that this being a pure question of law can be validly raised before this Court. We are not inclined to agree with the submission of the learned counsel as the restriction on the power of an allottee of a plot in the Society to transfer the same to a non‑member may be a question of law but the circumstance whether the respondent was or was not a member of the Society is certainly a question of fact which ought to be pleaded before building any argument on it. Assuming, without conceding, that the respondent was not a member of the Society, by virtue of clause (3) of the contract, respondent was entitled to the transfer of the plot in favour of his nominee. The submission of the learned counsel for the respondent that the restriction on transfer of a plot of the Society was not applicable to a person whose application for membership has been accepted by the Society which could be obtained even after the completion of sale transaction is not without force. Learned counsel for the appellant was unable to meet this argument which has a greater force. 8. Taking up the next submission of the learned counsel with reference to the evidence on record and more particularly the evidence of respondent Mudassar Aziz learned counsel attempted to persuade us to hold that respondent was not serious willing and ready to perform his part of the contract as he did not part with the balance consideration in favour of the appellant. Learned counsel submitted that, according to the respondent, he had visited the house of the appellant on 9‑4‑1984 but had no access to the appellant, as according to her son, she had left for Walton. Submission of the learned counsel was that since the respondent has paid the earnest money through appellant's son, he should have passed on the balance amount to her son or to demonstrate by his conduct that he was ever ready and willing to pay the balance amount to the appellant. We do not feel persuaded to agree with the submission of the learned counsel in view of the stipulations contained in clause (3) of the agreement. We are firmly of the view that payment of balance amount on the part of the respondent was required to be made at the time of documentation leading to transfer of the plot in suit before an authorized officer of the Society. If the appellant did not make herself available before the Society or did not take requisite steps for transfer in favour of respondent or his nominee, she was not entitled to receive the balance consideration as misunderstood. On evaluation and interpretation of the terms employed in clause (3) of the agreement we are of the considered view that on her part the appellant was required to sign all the papers required by the Society or the purchaser and simultaneously respondent was supposed to pay the balance amount for the transfer of the plot. The strong circumstance that the respondent visited the house of the appellant on 9‑4‑1984 and finding her not available called upon her through legal notice dated 11‑4‑1984 to produce necessary papers of ownership and sign the papers for transfer or to face the consequences, clearly tends to show that he was all along ready and willing to complete the transaction. In fact, it was the appellant herself who avoided to perform her part of the contract for the reasons, which may not be difficult to discern. Even otherwise the conduct of the appellant in cancelling the contract vide telegram dated 14‑4‑1984 tends to reflect the bent of her mind as the period of one month stipulated in the agreement expired on 14‑4‑1984 at 24‑00 hours whereas the telegraphic intimation was sent in the early hours of the day. Concurrent findings of the Courts below, thus, do not call for any interference and are based on correct and conscious application of mind and proper construction of evidence. 9. Adverting to the third submission of the learned counsel for the appellant, it was agitated that the respondent had misrepresented before the High Court that the Society had mutated the record in respect of the plot in suit in his favour consequent upon the decree in his favour, which is factually incorrect. Mr. Dogar referred to the letter dated 6‑3‑1996 by the Society addressed to the appellant informing her that the respondent had appointed Abdul Hakeem Dogar as his attorney and the said attorney, in execution of the decree, got the transfer documents executed in favour of his wife Mst. Shahida Hakeem. He pointedly referred to an affidavit purportedly sworn by Abdul Hakeem Dogar on 12‑10‑1996 affirming that he had relinquished his right and interest in the plot in favour of his wife Mst. Shahida Hakeem with a request that her name may be entered in the record of the Society as owner of the property. Be that as it may, consistent with the stipulations in clause (3) of the agreement, the respondent appears to have exercised his option of obtaining transfer of the property in favour of his nominee and the Society acted accordingly. At any event, this circumstance alone would not be adequate enough to brush aside the findings on the merits of the case. 10. Let us now deal with the fourth contention of the learned counsel that the contract dependent on volition of a third party could not be enforced at law. Precise argument was that since the performance of the contract was contingent upon the will of the Society who was neither party to the agreement nor the suit, the agreement could not be enforced at law. We are least impressed by this submission of the learned counsel as it is common practice between the allottee‑members of a Society to part with their rights and interests in the share capital or property allotted to them in a Society in favour of a third party and no society is generally arrayed as party to the agreement or the suit. Essentially, the dispute remains between the vendor and the vendee. Each Cooperative Society in the course of its business acts strictly according to its Bye‑laws and the law of the land. It is true that the Society was not arrayed as party to the suit but during the pendency of this appeal, appellant had moved a C.M.A. for impleading the Society as respondent No.2 in the appeal, which was allowed by a learned Judge of this Court, subject to all just exceptions. The Society was accordingly arrayed as patty to this appeal and Chaudhry Muhammad Aslam, Advocate‑on‑Record had entered appearance but neither any concise statement was filed nor did anyone appear before us at the hearing of the appeal. The fact remains that the Society has not entered appearance at the hearing of the appeal and has neither challenged the vires of the decree nor revoked the transfer of the plot in favour of the third party. Learned counsel heavily relied upon Punjraj v. Kalusa (AIR 1927 Nagpur 233) and Kassamali v. Shakra Begum (PLD 1968 Karachi 307). Both the cases are distinguishable on facts and not relevant to the point raised at the Bar. In Nagpur case, plaintiff had alternatively claimed the refund of consideration and terms of the contract were that the defendant was required to procure the landlord's consent, who was not a party to the suit. In Karachi case, it was observed that party, not a member of Society, could not be compelled to proceed to statutory arbitration with regard to a dispute with a party, who is member. Learned counsel relied upon the observation at page 319 of the report where learned Single Judge observed that the Courts should be reluctant to grant a decree, which may become inoperative. Opinion was founded on the premise that the plaintiff should have joined licensors as parties to the suit because in that event, it would have been possible to ascertain as to whether the requisite sanctions would be forthcoming or not. 11. Before parting with the judgment, we proceed to examine the last submission of the learned counsel as to whether time was of the essence of the contract. The principle of law is contained in section 55 of the Contract Act, 1872, which reads as under:‑‑ "55. Effect of failure to perform at fixed time in contract in which time is essential.‑‑When a party to a contract promises to do a certain thing at or before a specified time or certain things at or before specified times and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable, at the option of the promise, if the intention of the parties was that time should be of the essence of the contract. Effect of such failure when time is not essential.‑‑If it was not the intention of the parties that time should be of the essence of the contract, the contract does not become voidable by the failure to do such thing at or before the specified time; but the promisee is entitled to compensation from the promisor for any loss occasioned to him by such failure. Effect of acceptance of performance at time other than that agreed upon.‑‑If, in case of a contract voidable on account of the promisor's failure to perform his promise at the time agreed the promisee accepts performance of 'such promise at any time other than that agreed, the promisee cannot claim compensation for any loss occasioned by the non‑performance of the promise at the time agreed, unless, at the time or such acceptance, he gives notice to the promisor of his intention to do so." 12. Generally speaking, specific performance of a contract of sale of immovable property has been granted by the Courts although there has been a failure to keep the dates assigned by it, if justice could be done between the parties and if nothing in (a) the express stipulation of the parties, (b) the nature of the property, or (c) the surrounding circumstances make it inequitable to grant the relief. 13. It is well‑settled that intention to make time of the essence of the contract must be expressed in unmistakable language and it may be inferred from what passed between the parties before, but not after, the contract is made. A mere mention of a specified period in an agreement for completion of sale has been held as not to make the time of essence of the contract. In contracts of sale of immovable property, ordinarily, time is not considered to be of essence of the contract unless it was expressly intended by the parties and the terms of the contract do not permit of any other interpretation: Both she learned counsel have heavily relied upon Abdul Hamid v. Abbas Bhai Abdul Hussain (PLD 1962 SC 1), which reiterates the legal proposition as to whether the time was of essence of a contract. it may be inferred from what passed between the parties before but not after the contract is made. Equity will not assist where there has been undue delay on the part of one party to the contract and the other has given him reasonable notice that he must complete the contract within a definite time. In the case in hand, it has been found as a matter of fact that the appellant neglected to perform her part of the contract whereas the respondent had issued timely notice to her for discharge of her obligation by executing the relevant documents. Mr. Dogar agitated that it was incumbent upon the respondent to obtain No‑Objection Certificate from the Society for transfer of the plot in his favour but as no such plea was taken at the trial of the suit, we are not inclined to entertain the same at this stage. Refer Zaheer Ahmad v. Abdul Aziz (1983 SCMR 559). Suffice it to observe, conduct cat the parties tends to reflect that the respondent, though a property dealer by profession, was anxious for completion of the contract within the stipulated period. It was the appellant, who avoided and neglected to perform her part of contract with a view to frustrate the contract. Learned counsel submitted that by not tendering the balance consideration to the appellant, respondent had rendered the contract void and she was entitled to revoke the same. We do not feel persuaded to agree with the submission of the learned counsel, as concurrent findings of tact are against her which do not suffer from misconception of law or misconstruction of evidence. Learned counsel relied upon Bahawood‑Deen v. 13.G. Desouza (PLD 1974 Quetta 36) and Ghulam Nabi v. Muhammad Yaqub (PLD 1983 SC 344). Both the cases reiterate the principle enunciated in the earlier judgments that mere mention of time in a contract for sale of immovable property for its performance does not necessarily mean that time was of essence of the contract. Intention of parties in that behalf can be gathered from the terms of the contract and facts and circumstances of the case. Besides the above said cases, rule of law was clearly laid down in Essabhoy v. Saboor Ahmad (PLD 1973 SC 93), Zaheer Ahmad v. Abdul Aziz (1983 SCMR 559), Muhammad Yaqub v. Muhammad Nasrullah Khan, (PLD 1986 SC 497), Mussarat Shaukat Ali v. Safia Khatoon (1994 SCMR 2189) and Sandoz Limited v. Federation of Pakistan (1995 SCMR 1431). In Zaheer Ahmad (supra), it was held that a party guilty, of prevention of completion of contract within time could not plead that time was essence of the contract. This principle was reiterated in Mussarat Shaukat Ali, (supra). Saeeduzzaman Siddiqui, J. (as his Lordship then was) speaking for the Full Bench observed as under:‑‑ "It is open to the parties while entering the agreement of sale in respect of an immovable property to provide that the time for performance of the agreement will be treated as essence of the contract. In such cases, if the party seeking enforcement of the contract is shown to be in breach of the contract, the Court may in appropriate cases refuse to enforce the contract. However, in the absence of a provision in the agreement to sell an immovable property that the time fixed for performance of the contract is to be treated as the essence of the contract, the time fixed for performance of the contract is not treated as the essence of the contract. Therefore, specific performance of an agreement of sale relating to immovable property can be granted by Courts even after expiry of the period fixed in the contract." 14. In Muhammad Yaqoob s case, principle laid down in Narinjan v. Muhammad Yunus (AIR 1932 Lahore 265) was approved. Ratio of the case appears to be that in order to obtain a relief by way of specific performance of a contract, the plaintiff has first to allege and prove that he was ever ready and willing to perform his part of the contract from the date of the contract to the date of the suit, as the contract really was and not in the way he thought the contract to be. In Sandoz Ltd. and Essabhoy (supra) principle discussed above was reiterated with approval. 15. In the facts and circumstance of the case, fully described in the narrative of this judgment, analysed by the Courts below, in our view, have been correctly and consciously construed. In our view, by mentioning a period of one month for completion of the transaction in the agreement of sale, the parties did not' intend to make the titter of the essence of the contract. At any event, appellant herself has been found to be in breach of the contract and she cannot be permitted to take the advantage of her own wrong. Alternatively, assuming for the sake of arguments, respondent was in breach of contract, in law and equity, appellant was under an obligation to provide reasonable time to the respondent for performance of the part of contract before resorting to hasty and abrupt revocation of the contract before expiry of 30 days. Obviously, it was not stipulated in the agreement that in case respondent failed to perform his part of the contract, it would stand revoked and the only stipulation in the agreement was that on his failure to make payment, as stipulated, earnest money of Rs.20,000 would stand forfeited. No other circumstance has been pointed out to lead to the contrary view. We are, therefore, firmly of the opinion that time was not of the essence of the contract as rightly held by the Courts below. 16. For the aforesaid facts, circumstances and reasons, there is no merit in this appeal, which must fail and is hereby dismissed with no order as to costs. S.A.K./A‑381/S Appeal dismissed.