1989 PLP 1205 (MLD)

He agreed with the finding of the trial Court on Issue No.7 in refusing a decree for permanent injunction to the, plaintiff on the grounds that possession of the house lay with the defendant and that he claimed the same in his own right, rather than as an agent for the plaintiff. Ch. Khurshid Ahmad, Advocate for the respondent submitted that these remarks did not clearly hold the defendant to be not an agent for the plaintiff and that the converse finding by Mr. Bhaur in the impugned judgment being one of fact could not be upset. He referred to sections 216, 221 and 223 of the Contract Act pointing out that the only right available to the defendant was to be reimbursed for the cost of construction he raised at his own expense and no more. While it may be true that Mr. Bhalli did not record a categorical finding as to whether the defendant was not the plaintiffs agent, but the sum and substance of discussion in para.12 of his judgment leads one to assume that the sole reason for disallowing a decree for permanent injunction to the plaintiff was that the defendant was not occupying the premises as his agent. Such an inference may not be incompatible even with the plaintiff's own assertion as made in the plaint or shown in the evidence. The agency, if any, according to him, was created to raise a house for him at his expense by the defendant but the concurrent finding on the question of fact was that he did not pay at all even a single penny. He was belied to that extent, and having so failed on a material constituent of the so‑called agency the very plea was miserably exposed. The definition of an agent as provided in section 182 of the Contract Act was to employ another to do an act. Here, the plaintiff tried to show that he had employed the defendant to raise a house for him at the expense of money supplied by him from time to time. The latter element totally failed and, therefore, it could not be assumed that the house so built was in consummation of the agency created by the plaintiff as principal in favour of the defendant. Mr. Bhalli's remarks were that he stood contradicted by his own words on the point. Obviously he could not insist to show himslf to be such a principal and the defendant his agent. On this view of the matter there was hardly any occasion to invoke sections 216, 221 and 223 of the Contract Act.

5. Further, para.10 of Mr. Bhalli's judgment needed considerable attention. He remanded the case observing: "Moreover, the Trial Court also failed to decide as to what was the effect of the construction having been made by, the defendant on the plot owned by the plaintiff. In other words it was necessary to decide as to what equitable arrangement has to be made between the parties in order to reach a just conclusion. It was obligatory for the Trial Judge to decide as to whether the plaintiff was entitled to receive the price of the disputed plot from the defendant or whether the defendant was entitled to receive compensation for the construction raised by him and at what rate." These words did not leave any room to think that one of the parties was principal and the other agent. If this were so, there was no occasion to have observed that it was. yet to be settled if the plaintiff was entitled to receive the price of the disputed plot from the defendant. In other words, it was clearly contemplated that there was possibility in law of the defendant retaining the plot in any "equitable arrangement": Thus, holding later that one was the principal and the other agent ran counter to the tenor of the above‑quoted finding. Kh. Habib Ullah was greatly justified in urging that if equities of the base were kept in view, the deceased plaintiff had not come with clean hands in stating that he had advanced to the defendant in cash or from his own Bank account or that of his daughters a huge amount of ks.30,

000. The concurrent finding of the Courts below on the point helps him to press this event into service in showing that the plaintiff had disentitled himself to the equitable relief. Failure of this part of the plaintiff's version correspondingly lent support to the defendant's plea that he was delivered possession of the plot to raise a house for himself and at the most pay cost thereof to the former. For all purposes this appeared to be the arrangement between the parties hinting at transfer of the plot to the defendant. Section 51 of the Transfer of Property Act was invoked to argue that the defendant‑transferee having a defective title had to be paid the cost of improvement as obtain on the date of eviction or in the alternative he could compel the plaintiff to se his interest in the property to him at the market value prevailing at the time when the possession was delivered to him initially. Counsel for him stressed that since an equitable; arrangement was required to be determined to deal with the matter, it would be oppressive to the defendant to ask him to vacate a house which he built at his own expense some thirty years ago and for which he had been paying‑ taxes etc. eversince. He relied upon section 2 of the Mesne Profits and Improvements Act XI of 1855 maintaining that equitable estoppel went far beyond section 51 of the Transfer of Property Act and found support for this view from the following passage appearing at page 311 of the Transfer of Property Act (Seventh Edition) by Sardar Muhammad Iqbal Khan Mokal: "In Willmott v. Barber (w), Fry, J., said‑‑"It has been said that the acquiescence which will deprive a man of his legal rights must amount to fraud, and in my view that is an abbreviated statement of very true proposition. A man is not to be deprived of his legal rights unless he has acted in such a way as would make it fraudulent for him to set up those rights." To raise an estoppel by acquiescence against a plaintiff the following conditions must be fulfilled:‑‑ (1)??????? the defendant must have made a mistake about his rights, (2)??????? the plaintiff who has the better title must know of the existence of his own right which is inconsistent with that claimed by the defendant, (3)??????? the plaintiff must know that the defendant has made a mistake as to his rights, (4)??????? the defendant must have expended money or done some act on the faith of his mistaken belief, (5)??????? the plaintiff must have encouraged the defendant to. spend the money or do the act, either directly, or by abstaining from asserting his right. If these conditions are fulfilled the equitable estoppel goes far beyond section

51. The party estopped is not put to terms to pay compensation but is compelled to make good his representation. Ashburner says(y); "if I build on your land and you are estopped from asserting your title, I take the land; I do not merely get a charge on the land as against you for the money spent on the building." In Ramsden v. Dyson (z) Lord Kingsdown said‑‑"The rule of law applicable to the case appears to me to be this; If a man under a verbal agreement with a landlord for a certain interest in land, or what amounts to the same thing, under an expectation created or encouraged by the landlord, but he shall have a certain interest, takes possession of such land, with the consent of the landlord, and upon the faith of such promise or expectation, with the knowledge of the landlord, and without objection by him, lays out money upon the land, a Court of equity will compel the landlord to give effect to such promise or expectation". This principle was applied by the Privy Council in Forbes v. Rafi(a)." .

6. The conditions referred to by the author were quite squarely available in this case inasmuch as the defendant committed a mistake in having failed to obtain a formal transfer deed; the plaintiff knew of his own rights and their inconsistency with those claimed by the defendant; the defendant expended money on a mistaken faith or belief that he was doing so as owner of the house; and lastly the plaintiff encouraged him to spend the money not only overtly but by abstaining from asserting his right. The view taken was that if these conditions were fulfilled, the equitable estoppel would go far beyond section 51. of the Transfer of Property Act and would compel the party estopped to make good his representation to give effect to the promise or expectation aroused by him in the mind of the opposite party. By his conduct established on the record beyond any manner of doubt whatsoever, the deceased plaintiff was bound to convey the plot to the defendant at the then market valve thercol". However, the appellant Muhammad Siddiq present personally in the Court himself and his counsel Kh. Habib Ullah, Advocate, both showed willingness to compensate the respondents by offering them ex gratia a sum of Rs.20 laic for the plot. One of the reasons for showing this grace was that the present respondents were progeny of the deceased plaintiff and were left orphans after his demise. As against "the then market value" of the plot amounting to 85.9,335.40, paying the respondents a huge amount of Rs.20 laic even if out of grace, was a substantial increase.Views of the respondents in this behalf could not be taken because their counsel Ch. Khurshid Ahmad, Advocate despite notice did not turn up.

7. The R.S.A. is accepted, the impugned decree is set aside and instead the respondents' suit is decreed only to the extent that they shall be given Rs.20 lac (Rupees twenty laic only) as compensatory price for the plot. This amount may be deposited with the trial Court for respondents within three months as from today. The accretion, if any, on the deposit of this amount shall go to the respondents. In case the said amount is not deposited with the trial Court within the period fixed above, the present appeal shall stand dismissed with costs throughout. H.B.T./M‑1203/L ?????????????????????????????????????????????????????????????????????????????? Appeal accepted.