1996 PLP 1086 (CLC)

SALAHUDDIN MIRZA, J.‑‑‑This appeal is directed against the order dated 10‑11‑1991 whereby injunction application moved by the respondent/plaintiff (CMA No.4883/87) was granted and the appellants were restrained from alienating the land in dispute to any third party during the pendency of the suit and were directed to maintain status quo in that regard.

2. Respondent Kamruddin Valika had filed Suit No.806 of 1987 on 8‑11‑1987 for specific performance of contract of sale and in the alternative had demanded compensation/damages to the tune of Rs.50 crores. There is no need to go into the details given by the respondent/plaintiff in his plaint. It is sufficient for our purposes to mention that the respondent/plaintiff had entered into some negotiations with the appellants for the purchase of 200 acres of land lying in Korangi and submitted an application dated 22‑12‑1985 to respondent No.4. Correspondence between the parties continued until 1st December 1986 per Annexure ' I' to the plaint which is a letter addressed by the respondent/plaintiff to appellant No.4 in which he demanded delivery of possession of the land in dispute. It appears that in the meanwhile the area sought to be purchased by the respondent/plaintiff increased from 200 acres to 300 acres because Annexure ' I' to the plaint refers to 300 acres. However there was no further response from the side of the appellants whereupon the respondent/plaintiff served them with notice under section 80 of C.P.C. (Annexure 'J' to the plaint). Along with the plaint, respondent/plaintiff moved the application seeking to restrain the appellants from disposing of the suit land during the pendency of the suit. In their counter‑affidavit, appellant No.4 denied the existence of any contract of sale between the parties and stated that some negotiations did take place between the appellants and the respondent but they did not result in the execution of any contract of sale. However, application under Order 39, Rules 1 and 2 was allowed by the Single Judge vide impugned order.

3. Learned counsel for the appellants urges before us that the respondent had failed to establish a prima facie case in his favour and the learned Single Judge did not discuss this important aspect in the impugned judgment. He further submitted that not only there does not exist any agreement or contract of sale between the parties but that no consideration, or part thereof, has been received by the appellants. It was further urged that when the respondent has himself computed the damages for the breach of the alleged agreement/contract, specific performance of the same cannot be enforced. On the other hand learned counsel for the respondent pointed out that vide letter dated 6th July 1986 (Annexure 'F/1' to the objections) appellant No.4 had sought the consent of the respondent for the sale of 300 acres of land at the rate of Rs.20,000 per acre and the respondent vide his letter of the next day (Annexure ' F/2') had accepted this offer ,and this offer and acceptance constituted a valid contract between the parties. In para.3 of his letter (Annexure ' F/2') respondent stated that "as desired by you, I am sending herewith the exact location of three hundred acres of land which has to be leased out by you in my favour under Schedule X, modified for all commercial purposes".

4. It is an admitted position that there is no written agreement or contract of sale between the parties. The respondent is relying on the correspondence between him and the appellants. In his letter dated 7th July 1986 (Annexure ' F/2' to the objections) the respondent concedes that the land in question was yet to be leased out in his favour. It is difficult to believe that the transaction of sale for such a huge piece of land costing about Rs.60,00,000 (60 lacs) even at the throw‑away price of Rs.20,000 per acre could not be reduced into writing. It is impossible to decide what is the area and what exactly the location of the land in dispute and what were the exact terms and conditions on which the lease was A contemplated and when the possession was to be delivered to the respondent. It appears to us that correspondence between the parties had not reached any conclusion and was still under a fluid state. We agree that under these conditions the respondent has failed to establish that, prima facie, he had a case for specific performance. There is also no question of balance of convenience being in favour of the respondent because under section 52 of the Transfer of Property Act any sale of a property during the pendency of a suit is subject to the rights of the party in whose favour the suit is decided and, therefore, even if the appellants alienate the suit‑land during the pendency of the suit, the decree of specific performance of contract, if it is passed, cannot be frustrated. The question of any irreparable loss occurring to the respondent simply does not arise because he has himself computed the loss in terms of money.

5. Apart from what is stated above, learned counsel of the appellants has also argued that when a person claims damages for breach of contract he cannot, at the same time, seek specific performance thereof and in this regard he referred to the judgment reported as PLD 1977 Kar. 191 (Karachi Gas Company Ltd. v. Fancy Foundation). It is held in this judgment that where the plaintiff had once offered to accept damages as adequate compensation in place of specific performance, jurisdiction to grant specific performance would prima facie be barred under section 21 of the Specific Relief Act and, therefore, in such a case temporary injunction restraining the defendant from transferring the property in dispute should rather be refused. In para. 19 (iii) of section 80 notice (Annexure 'J' to the objection of the respondent) the respondent had specified the reliefs claimed by him in the following words:‑ "For specific performance of the agreement to lease 300 acres of land and in the alternative damages in the sum of Rs.50 crores and cost. " It would thus appear that even before filing the suit, the respondent had assessed the quantum of damages or loss he would sustain and had offered to accept the amount in lieu of the specific performance of the alleged agreement and, as such, it would appear that the right to enforce specific performance would be prima facie barred. Although learned counsel of the appellants had not brought to our attention the observations of Lord Justice Turner in the case of Hailey v. The London Bank of Scotland (12 LTR 747) which was referred to in PLD 1977 Kar 191, we have gone through a passage from that judgment in which it is held that "I think, therefore, that in a case where there is an undisputed and clear contract, there the Court will undoubtedly interfere in restraining the vendor from transferring the legal estate to a third person. That, however, as I think, is only in cases where there " is a clear, undisputed and undoubted contract. " These observations of Lord Justice Turner also support our conclusion, arrived at in the previous paragraph, that the respondent is not entitled to an interim injunction restraining the appellants from alienating, leasing or otherwise dealing with the suit land because in the present case there is no undisputed and clear contract and the claim of the respondent is based merely on the correspondence between him and the appellants. For the above noted reasons we would accept this appeal, set aside the order of the learned) Single Judge on C.M.A. No.4883/87 and dismiss the said injunction application. A.A. /G‑387/K Appeal accepted.