P L D 1999 Lahore 193 (PLP)

NAJAM‑UL‑HASSAN KAZMI, J.‑‑‑This judgment proposes to decide R. F. A. No. 142 of 1996 which extends challenge to judgment and decree, dated 20‑12‑1995, passed by the learned Civil Judge, Lahore in a suit for specific performance 6f agreement of sale.

2. Babar & Co., respondent No. l herein, filed a suit for possession through specific performance, claiming that the appellant (Pioneer Housing Society (Pvt.) Ltd. etc., had agreed to sell Plot No.28‑A, measuring 2 Kafals West Wood Housing Colony, Raiwind Road, Lahore, in favour of respondent No. 1, vide agreement of sale dated 9‑7‑1988. The sale consideration was claimed as Rs.7 lacs, out of which, Rs. one lac was stated to have been paid through pay order, dated 9‑7‑1988, drawn on National Bank of Pakistan, Regal Chowk Branch, Lahore, as earnest money. It was maintained that in terms of sale agreement, the sale was to be concluded till 8‑9‑1998. It was asserted that despite readiness and willingness of respondent to had the deal concluded, the final transfer could not take place because of the. fault on part of appellant for which legal notice was also served. In this' backdrop, respondent claimed enforcement of an agreement through the decree of the Court.

3. Appellant resisted the suit, by claiming that respondent had no cause of action, the suit was not maintainable in its existing form, the respondent had no locus standi to file the suit and that the suit was vexatious and false. In para.2 of the written statement it was maintained that the appellant had entered into an agreement of sale with Babar & Co. through one Fareed Ali, who had no connection with the respondent and that the agreement was cancelled as Babar.& Co. had allegedly failed to perform its part under the agreement. Respondents Nos.2 and 3 were impleaded as parties, as it was claimed that the plot was allegedly transferred to respondent No.2 by the appellant, during the pendency of the suit, who had allegedly assigned his interest to respondent No.3. though written statement was filed by these two respondents yet they later absented from the proceedings and neither appeared in evidence nor contested the suit any further.

4. Conflicting pleadings were given the form of following issues:‑‑ (1) Whether the suit is not maintainable in its present form? OPD (2) Whether the defendant has entered into an agreement with plaintiffs, on 9‑7-1988, to sell the Plot No.28‑A measuring 2 Kanals in West Wood Housing Colony, Raiwind Road, Lahore in lieu of Rs.7,00,000 out of which, he had received Rs.1,00,000 as earnest money? OPP (3) Whether this suit had been filed without any locus standi and cause of action? OPD (4) Whether the plaintiffs are entitled to the decree as prayed for? OPP (5) Whether the suit is vexatious, false, fake and is filed to harass the defendant with mala fide intention? If so, its effect? OPD (5‑A) Whether the suit is time‑barred as against the defendant No.3? OPD (5‑B) Whether the suit is not competent as against the defendant No.3? OPD (5‑C) Whether the agreement executed between the defendant No. l and M/s. Babar & Company, through Mr. Farid Ali stands cancelled and has become ineffective? OPD‑1. (6) Relief.

5. Respondent No.l produced in evidence, Mr. R.A. Zafar, P.W.1, Fareed Ali, P.W.2, Shahzad Muhammad Khan, P.W.3 while appellant produced Haji Taj Muhammad D.W.1 and Sh.Muhammad Saeed D.W.2. Additionally documentary evidence in the form of agreement of sale, executed between the parties and legal notice were produced as Exh.P.l to Exh.P.28. Similarly letters, notice, telegram and Mukhtar Nama were produced as Exh.D‑1 to Exh. D‑4 and Mark ' A' to Mark ' E' .

6. The learned Civil Judge, on the review of the evidence, decreed the suit vide judgment, dated 20‑12‑1995, which is subject‑matter of consideration in this appeal.

7. Learned counsel for the appellant argued that the appellant did not deny the existence of sale agreement but pleaded that the agreement was made with Babar & Co. through Fareed Ali who had no link with respondent No.

1. It was added that time was essence of the contract and since respondent No. l did not have adequate funds, the agreement was cancelled by the appellant. Learned counsel submitted that respondent No. l had asked for alternative relief of damages and, therefore, specific performance of the agreement could not be allowed and question of granting compensation could only be attended to. It was lastly submitted that the jurisdiction to grant specific performance being discretionary in nature, the Court could not enforce the agreement because of the hardship which the appellant would suffer in the event of enforcement of agreement.

8. Learned counsel for respondent No. l argued that Fareed Ali was only a representative of the Firm who appeared in the evidence and supported respondent No. l and after his statement, the objection raised by the appellant did not carry any significance. It was contended that the correspondence exchanged between the parties would reveal that neither time was considered as essence of the contract nor the agreement was ever rescined by complaining any default on the part of the defendants. Learned counsel submitted that respondent No. I was in fact a Firm which was later dissolved and under sections 47 and 48 of the Partnership Act, its partner could continue the proceedings to enforce the rights of the Firm under the agreement.

9. We have given our serious thoughts to the submissions made and have minutely scanned the evidence on record.

10. The perusal of written statement and also the submissions made before us, leaves no room of doubt that the execution of an agreement of ‑ sale with Babar & Co. ‑ (respondent No. 1) is not disputed though attempt has been made to escape liability under the agreement by raising hypertechnical objection. The only plea of the appellant in this regard is that Fareed Ali signed the agreement on behalf of Babar & Co. who should have filed a suit. The perusal of agreement makes it obvious that the transaction was not made with Fareed Ali but with Babar & Co. which filed the suit. Being an intending purchaser, the vendee A could be represented by any representative which could not mean that the agreement was for the benefit of the agent/representative and not for the Firm. The agreement vividly demonstrates that it was between Pioneer Housing Society and Babar & Co. It is also not denied that Babar & Co. was a Firm at the time of execution of the agreement which fact is otherwise proved by the partnership deed, dated 29‑12‑1986. Partners of this Firm were Shakir Ali , A Shahid Ali, Khalid Ali and Fareed Ali. The suit was instituted by Babar & Co. through Shakir Ali, a partner of the Firm. Any misdescription in the particulars of the parties, would not create any disabling consequences for the respondent/decree‑holder, particularly when it is proved on the record that the agreement was executed in favour of Babar & Co. Certificate of dissolution of the partnership is also available on the file. Under sections 47 and 48 of the A" Partnership Act, the partnership does not come to an end on dissolution of Firm but it continues for the purpose of winding up of business and partner cats sue or may be sued in the name of the same Firm for the adjudication of unfinished affairs. Reference can be made to Ghulam Hussain etc. v. Haji Ibrahim NLR 1985 (C) 678, where it was observed that a suit by a proprietor of dissolved Firm for the recovery of costs of cloth supplied by the Firm to the defendants would be competent. Similar view was taken in M/s. Memon, Trading Co. v. Messrs Hajee Gaffar Hajee Habib Janoo PLD 1966 Dacca

612. This being so. the suit filed by Babar & Co., through Shakir Ali proprietor of the firm, for the IC enforcement of the agreement in favour of the firm was competently instituted and no exception can be taken to the same.

11. Even otherwise, the objection was only to the extent that Fareed Ali should have come forward which objection, as observed above, is without substance, as the agreement was in favour of the Firm while Farid Ali appearing as P. W.2 had confirmed this position.

12. The objection as to the time being essence to the contract is .devoid of any merit. In this regard it was claimed that the balance payment was to be made till 8‑9‑1988. In the first instance, the agreement itself does not give any impression that the parties were ever desirous of treating the time as essence of the contract. Even otherwise the conduct of the parties, as reflected from the subsequent correspondence changed between them would show that they had never treated the time to be essence of the agreement. Reference can be made to Exh.D‑1 and Exh.D.2. In Exh.D‑2, sent by the appellant on 11‑4‑1989, the appellant informed that the management of the Society had changed and, therefore, the respondent should pay the balance amount within' two weeks after the receipt of the letter otherwise the allotment would be cancelled. If time was essence of the contract, then the appellant would not have asked for the balance payment after the expiry of the time given in the agreement as, according to the agreement, the payment was to be made till 8‑9‑1988. In the matter of agreements pertaining to immovable property, the time is ordinarily not the essence of the agreement, and if the parties desire that strict adherence to the time should be ensured, then the terms of the agreement should be so specific which would leave no room of doubt that any deviation' from the time clause would entail penal consequence. Similarly, the conduct of the parties should be such which should be evidence of the fact that the violation of the time clause will not be compromised. This can be ensured, if on the expiry of the stipulated time, the vendee issues a notice for the rescission of the contract. In the absence of any notice for the rescission of the contract, it could not be assumed that the vendor had treated the time clause as essence of the contract. In this case no notice was served for the rescission of the contract. So much so, the appellant offered to transfer the land on receiving balance sale consideration after the time had expired which would mean that the time was not treated to be as essential part of the contract. The objection on this ground is‑devoid of substance.

13. Even otherwise, the legal notice and other correspondence, tendered in evidence, read with the oral evidence produced by respondent proved that the respondent remained ready and willing to perform its part‑of the contract and! that the agreement could not conclude, because of the lapse on the part of the appellant as change of management of the Society had taken place, The evidence proved that the respondent paid earnest money and also offered the balance and, therefore, the respondent was entitled to enforce the agreement in the equitable jurisdiction. As to the argument that the respondent had asked for the relief of compensation as an alternative relief, therefore, the specific performance should not be allowed, the argument is not well‑founded. Under section 19 of Specific Relief Act, a person suing performance of the contract can also ask for the compensation of breach, either in addition to or in substitution for such performance and if the Court decides that specific performance might not be granted but the contract having been broken, the plaintiff is entitled to compensation for the breach thereof, it can award compensation accordingly. The suit was framed in accordance with the spirit of section 19 of the Act. The respondent did not forego his right of seeking enforcement of the agreement through specific performance but maintained that if the Court would feel difficulty in granting specific performance, the relief of compensation be granted. By doing so, the respondent did not render itself disentitled to the grant of specific performance of the contract. Under section 12 of the Specific Relief Act, the non‑performance of an agreement pertaining to immovable property cannot be compensated in terms of money and, therefore, its enforcement cannot be refused unless it causes any extreme hardship to the other side which is not the case here. The respondent having proved existence of agreement, payment of earnest money, readiness to perform the contract and willingness to pay the balance price, there was no reason for declining relief in the discretionary jurisdiction, which of course, has to be exercised on sound judicial principles.

14. In view of the reasons noted supra, we are of the view that the discretion in, this case has been exercised in accordance with law and for solid reasons and that no ground is made out for interference.

15. We have, however, observed that the suit was decreed on 20‑12‑1995 and since there was no specific direction for the deposit of the balance sale price nor any time was fixed for the deposit thereof, therefore, the respondent applied for the execution of the decree and did not take deposit of balance sale consideration under the decree. We have also observed that the agreement was executed in 1988 and a period of ten years has already elapsed, as a result of correspondence between the parties or the present litigation. On account of lapse I of such a long time, the value of the price has, to some extent, diminished due to devaluation of the currency while the prices of the properties have increased due to trend of increase in the prices of immovable properties in the market. This being so, while allowing enforcement of the contract, we feel that the appellant should also be allowed additional compensation.

16. Learned counsel for the respondent, in consultation with the representative of respondent No. l has been fair enough :o make an offer that respondent No. l was prepared to pay additional compensation, over and above the initial price, and would pay Rs.8,60,000, instead of Rs.7,00,

000. This, of course, appears to be reasonable offer.

17. Accordingly, while upholding the decree of the learned trial Court we direct that the respondent shall be entitled to the decree for enforcement of the sale agreement, on payment of Rs.8,60,000 i.e. Rs.7,00,000 initial price plus Rs.1,60,000 as additional compensation. An amount of Rs.one lac is admittedly paid as earnest money, the respondent shall deposit Rs.7,60,000, till 30‑11‑1998, failing the suit shall be deemed to have been dismissed.

18. The, appeal is, therefore, dismissed with the above modifications. M.B.A./P‑59/L Appeal dismissed.