2010 PLP 3233 (YLR)

ASAD MUNIR, J.

The brief facts giving rise to this appeal are that the appellant advanced to respondent No. 1 a sum of Rs.66,200,300 as loan which was agreed to be repaid within one year but was never repaid. Instead, an agreement to sell dated 28-12-2005 was executed between respondent No.2, on behalf of respondent No. 1 and the appellant whereby the respondent No. 1 agreed to sell his property No. B-12417, known as Kaikabad Mansion, situated at the Main Murree Road. (Jinnah Road) at a sale price of Rs.67,500,333 where for the amount of Rs.66,200,00 of the unpaid loan was treated and acknowledged as earnest money while the balance amount of Rs.1,300,000 was agreed to be paid by the appellant on delivery of possession and transfer of the property to be completed by 30-6-2006, However, at the time of the execution of the agreement to sell dated 28-12-2005, the suit property was subject to a mortgage created by respondent No.1 in favour of Habib Bank Ltd., respondent No.3, in consideration of a loan advanced to respondent No.1. Accordingly, it was undertaken by the respondent No.1 that the transfer of the suit property to the appellant would be free from the mortgage which will be redeemed by respondent No. 1 by returning the outstanding amount of the loan to bank. On the failure of the respondents to transfer and deliver the possession of the suit property, the appellant on 19-8-2006 filed a suit for specific performance of the agreement to sell dated 28-12-2005 with a permanent injunction restraining the respondents from alienating the suit property. Respondent No.2 submitted written statement, on behalf of both the respondents, wherein the execution of the agreement to sell was admitted along with an acknowledgement of the receipt of the earnest money of Rs.66,200,000 paid by the appellant. On 26-9-2006, respondent No. 2, who is the real brother and general attorney of respondent No. 1, also appeared before the Civil Judge and recorded his statement that he had no objection if the suit of the appellant was decreed as he had received the balance sale-price of Rs.1,300,000 and that the entire loan amount due to Habib Bank Limited, respondent No. 3, had been paid back. Subsequently, the bank manager of respondent No. 3 was summoned in order to confirm the repayment of the loan. However, the bank manager of respondent No.3 only stated that an amount of Rs.33,231,063 had been borrowed by respondent No. 1 but was non-committal about the bank having received the said amount.. The learned trial Court vide its judgment and decree dated 13-11-2007 instead of making an inquiry as to the status of the mortgage particularly as to whether it had been redeemed proceeded to pass a money decree in favour of the appellant to the effect that he was entitled to receive from the respondents double the amount paid by him to the respondents i.e. Rs.135,000,000 on the ground that the respondents had committed fraud as they had no title to sell the suit property as long as it was mortgaged with the bank for default in the payment of the amount due to the bank.

2. Through this regular first appeal, the judgment and decree dated 13-11-2007, passed by Civil Judge, Rawalpindi, has been called into question. Learned counsel for the appellant has contended that the said, judgment and decree has been passed by the learned Civil Judge without realizing that such a judgment and decree was never sought by the appellant who only sought specific performance of the agreement to sell dated 28-12-2005 but the learned Civil Judge rushed to pass the decree without application of mind and without making a proper inquiry to ascertain that the outstanding amount due to the bank had been cleared.

3. However, Mr. Nadeem Yousaf Rana, Advocate, learned counsel for Habib Bank Limited, respondent No. 3, has put an end to the whole controversy as he has stated that the entire amount due and payable to the bank has been paid by respondent No. 1 and the bank has no objection if the decree for specific performance is passed in favour of the appellant and against the respondents.

4. In this view of the matter, the bank has no interest in the suit property which shall be transferred to the appellant free of the mortgage in accordance with the terms of the agreement to sell dated 28-12-2005 as well as in view of respondent No. 2's statement that respondent No. 1 has received the entire price in consideration of the sale of the suit property.

5. We, therefore, allow this appeal and set aside the judgment and decree dated 13-11-2007, passed by the Civil Judge, Rawalpindi. Accordingly, the appellant's suit for specific performance of agreement to sell dated 28-12-2005 is decreed as prayed for in the plaint. There is no order as to costs. H.B.T./M-515/L Appeal allowed.