2003 PLP 981 (YLR)

(4) Whether the alleged agreement has been cancelled? OPD (5) Whether the plaintiff has complied with the terms and conditions of the agreement to sell dated 7‑7‑1982 and as such entitled for a decree of specific performance of the contract? OPP (6) Relief.

2. After recording evidence, the learned trial Court vide judgment and decree dated 10‑10‑1987 decreed the suit of the respondent with costs and directed the plaintiff respondent to deposit the balance money of Rs.1,32,000 on or before 11‑11‑1987, filing which the suit of the plaintiff shall stand dismissed. This judgment and decree are being assailed through the instant appeal.

3. During the hearing of this appeal, it was observed by this Court that the learned trial Court had not given its findings on Issue No.3, therefore, vide order dated 8‑11‑2000, the tile was remitted to the learned trial Court for rendering its findings on Issue No.3 within 60 days and to return the file to his Court. Learned trial Court vide its order dated 11‑12‑2000 decided Issue No.3 in favour of the plaintiff and returned the file to this Court. Although there is no order of the Court requiring the parties to file their objections, if any, on the findings of the trial Court on Issue No.3 dated 11‑12‑2000, yet the appellants have filed their objections, which are on record. Learned counsel for the respondent initially stated that he had no notice of the filing of such objection before this Court, but later on he agreed to argue the case without seeking any further time to meet with the objections placed on record by the appellants.

4. Before embarking upon the merits of the case, learned counsel for the appellants has stressed upon his C.M. No.482‑C of 2001. According to this application, an objection had been raised by the appellants that the respondent had not complied with the direction of the learned trial Court contained in the impugned judgment and decree, whereby the plaintiff‑respondent was required to deposit a sum of Rs. 1,32,000 till 11‑11‑1987, but in fact respondent had deposited only a sum of Rs.1,17,000, therefore, he has not complied with the direction of the learned trial Court, so the suit stands dismissed automatically. He relies on Altaf Hussain and 2 others v. Muhammad Nawaz and 2 others (2001 SCMR 405).

5. On the other hand, learned counsel for the respondent concedes that the plaintiff respondent had deposited a sum of Rs.1,17,000 instead of 1,32,000 the reason assigned by him is that since the suit was decreed with costs, therefore, according to the decree sheet the cost was determined by the learned trial Court as Rs.15,062, therefore, the respondent‑plaintiff had deducted the cost of Rs.15,000, therefore, the deposit made by him is in accordance with the terms and conditions of the decree on the principle of equitable set‑off. He relies on Muhammad Afzal and 8 others v. Haji Fazal- ul‑Haq and another (PLD 1971 SC 162). He further contends that even if it is found by this Court that respondent had deposited less amount, still the time can be extended in cases for specific performance of agreement as held by this Court in Nasir Ahmad v. Muhammad Yousaf (PLD 1994 Lahore 280) and Muhammad Ismail v. Muhammad Akbar Bhatti and 5 others (PLD 1997 Lahore 177).

6. We have considered the arguments of the learned counsel for the parties on this preliminary objection.

7. The doctrine of equitable set‑off is recognized by the Honourable Supreme Court in case reported as (PLD 1971 SC 162) (supra). The relevant para. of the said judgment is as under:‑‑ "The doctrine of equitable set‑off has also been applied in suits for specific performance of contract and suits for redemption. In the case of Brijnath Dass v. Juggernath Dass (1879) 4 Cal. 742 the right to set‑off the costs due to the plaintiff against the amount due by him was recognized in a redemption suit. It was held in that case that the plaintiff was entitled to redemption on paying the amount directed less the costs awarded to him. This principle was further applied by the Madras High Court in the case of Chinnammal v. Chidambara Khothanar AIR 1936 Mad.

526. In that case, the trial Court passed the decree that on the plaintiff's depositing into Court a certain sum within a fixed time the defendant was to execute a deed of conveyance in his favour. It was further directed that the defendant was to pay the plaintiff a certain amount by way of costs. The plaintiff deposited a sum of money after deducting the amount of costs payable to him under the decree. On these facts, it was held by the Madras High Court that the doctrine of equitable set‑off was applicable and the plaintiff deposited the proper amount in Court."

8. Since the suit of the respondent plaintiff was decreed with costs. It would have been absurdity in law, if the plaintiff had been required to deposit the decretal amount including the costs to which he is entitled under the decree. The defendants withdraw that amount from the Court and than the plaintiff again had to file an execution for the refund of cost amount from the defendants. If he had already deducted the amount of costs, it is fully protected under the principle of "equitable set‑off".

9. The case‑law relied upon by the learned counsel for the appellants i.e. (2001 SCMR 405) (supra) cannot be attracted to the instant case as the cited case related to a situation arising out of a pre‑emption case, thus certainly the short payment made by a plaintiff in the pre‑emption case carries entirely different repercussion than in a case of specific performance.

10. Accordingly the preliminary objection raised by the learned counsel for the appellant is repelled. C.M. No.482‑C of 2001 is, therefore, dismissed.

11. On merits learned counsel for the appellants contends that respondent had not produced the marginal witnesses of the agreement to sell Exh.P‑1, therefore, neither the execution is proved nor the payment of earnest money is proved. It is further submitted that no payment was made at the time of the execution of the impugned agreement. The amount of Rs.2,18,000 was only incorporated in the agreement on the request of the respondent so as to ward off a prospective pre‑emption suit. Therefore, it was incumbent upon the respondent‑plaintiff to prove the payment of the earnest money and in the absence of marginal witnesses the material evidence on payment of earnest money is lacking in the instant case. It is further submitted by referring to Exh.D‑1 that the appellants were present before the Sub‑Registrar on 31‑12‑1983 till 3‑30 p.m. and the respondent‑plaintiff did not turn up, therefore, he had failed to perform his part of the contract. As a result thereof the contract stood cancelled automatically.

12. On the other hand, learned counsel for the respondent contends that payment of Rs.2,18,000, the earnest money, was made before, the Sub‑Registrar at the time of registration of the disputed agreement to sell Exh.P‑

1. This fact was endorsed by the Sub Registrar on the agreement to sell. Such endorsement carries presumption of correctness in view of law laid down by this Court reported in Syed Saeed Hassan v. Pyar Ali and 7 others (PLD 1976 Lahore 6). He further urges that the payment of earnest money is otherwise admitted by the appellants in their application Exh.D‑1 as well. Therefore, in the presence of this evidence the plaintiff‑respondent was not obliged to produce the marginal witnesses, who were otherwise not ready to depose as they were closely related to the appellants. It is further stated that the plaintiff while appearing as P.W.4 stated in clear terms that he remained present ' before' the Sub‑Registrar throughout the day on 31‑12‑1983 with the balance sale price but the appellants did not turn up. However, he was always ready to perform his part of contract. Finally, it is argued that time has never been an essence of the contract for immovable property, unless so specifically agreed by the parties by their conduct.

13. We have considered the arguments of the learned counsel for the parties.

14. The appellants have not pleaded in their written statement that the earnest money in the sum of Rs.2,18,000 was fictitiously incorporated on the request of the respondent plaintiff to ward off a prospective pre‑emptor. This story was later on introduced by appellant No.2 while appearing as D.W.

5. Even otherwise their own document Exh.D‑1 shows that it was admitted by him in the said document that a sum of Rs.2,18,000 was received by him as earnest money from the respondent at the time of execution of the agreement. This fact is further established from the endorsement of the Sub‑Registrar before whom the said amount was received by appellant No.2. Therefore, the respondent was not obliged to produce the marginal witnesses of Exh. P.1 to prove the payment of earnest money, particularly when it is established on record that said witnesses were closely related to the appellants.

15. It is now well‑settled law that time has never been an essence of the contract for' the sale of immovable property unless the parties have made it so by express words and conduct. Merely fixing a date for the finalization/registration of the sale‑deed does not make the time as essence of the contract. In the instant case, although the date of 31‑12‑1983 was fixed according to Exh.P‑1 but there is no evidence on record to suggest that the parties had intended to make the time as essence of this contract.

16. There is yet another absurdity of the case of the appellants that they had pleaded in the written statement that no earnest money was received by them despite that possession of the disputed land was handed over by them to the respondent and still further they had gone the Sub- Registrar on 31‑12‑1983. If by any mean they were being defrauded by the plaintiff without paying a single penny and obtaining the possession of the land in dispute then there was no occasion for the appellants to go before the Sub‑Registrar on 31‑12‑1983 for the finalization/registration of the sale‑deed.

17. Since the respondent was always ready to perform his part of the contract and by filing the instant suit, he had reiterated his intention within prescribed period of limitation, therefore, there does not appear to be any reason to deny him the relief of specific performance against the appellants, therefore, the suit of the respondent was rightly decreed by the learned trial Court through the impugned judgment and decree dated 10‑10‑1987.

18. Resultantly, we find no merit in this appeal and the same is accordingly dismissed. No order as to costs. H.B.T./G‑242/L Appeal dismissed.