2015 PLP 828 (SCMR)

JAWWAD S. KHAWAJA, J.

Civil Appeal No. 786 of 2013:

We have heard learned counsel for the parties and have also gone through the record with their assistance. This appeal is as of right and has arisen from a suit for specific performance of an agreement dated 13-7-1995 (Exh.P-1) executed by the predecessor in interest of the appellant in favour of the respondent-purchaser.

2. The facts of the case in the main are not seriously disputed. In particular, the execution of the agreement is admitted and so is the consideration amount of Rs.1,25,00,

000. It is also not disputed that the sum of Rs.25,00,000 was paid by the respondent to the appellant at the time of the execution of the agreement and a further sum of Rs.10,00,000 was paid subsequently but before 31-12-1995, which was the final date for making payment of the balance amount. There are other facts also which have only a secondary and peripheral bearing on the case but these facts are also not seriously disputed. Firstly, it is admitted that when the suit was filed by the respondent-plaintiff on 13-3-1996, he did not make payment of the balance amount or seek deposit of the same in Court. Instead, on 13-3-1996 the Court directed the respondent to deposit defense saving certificates having a face value of Rs.90,000,00 in Court within one month i.e. by 13-4-1996. This was not done. On 20-5-1996, the respondent filed an application seeking further time to do the needful and further indulgence was shown to the respondent who was allowed up to 23-5-1996 to deposit the defense saving certificates. Since this was also not done, the respondent applied on 25-5-1996 praying that he be allowed to deposit WAPDA bonds of the equivalent face value. Once again, a great deal of indulgence was shown to the respondent and he was allowed till August, 1996 to deposit the WAPDA bonds. Once again this was not done by the respondent. The WAPDA bonds, which were earning 19% interest, were then deposited in Court. On 25-11-2004 i.e. 8 years after the deposit of the WAPDA bonds the respondent applied for release of the said bonds to him on the undertaking that he will submit a bank guarantee. The WAPDA bonds were released, however, the bank guarantee which was furnished on 10-12-2014, expired on 9-12-2005 and was not renewed or extended. As such, since 25-11-2004 onwards no cash was deposited with the Court nor were any bonds/government securities deposited and nor was there a bank guarantee as undertaken by the respondent himself.

3. We have gone through the judgment of the learned trial Court which has for good reasons, noted in para 6 onwards, held that the respondent-plaintiff was not entitled to specific performance of the agreement. The reasons given by the trial Court are also cogent. The above circumstances amongst others have been duly noted. It has also been observed that a legal notice (Exh.P-3), which had been served by the respondent on the appellant, had been given on 8-2-1996 which was after the cut off date of 31-12-1995. The fact remains that the respondent, who was obliged to make payment of the balance sum of Rs.90,00,000 by 31-12-1995, had failed to fulfil this material obligation until after the judgment of the High Court rendered on 4-4-2013. It would, in our opinion, be highly unfair and inequitable if the respondent is to be granted discretionary relief in the foregoing circumstances, which show failure on his part to make payment or comply with Court orders in spite of the extreme indulgence shown to him by the Court.

4. Learned counsel for the respondent contended that the appellant had cancelled the power of attorney given after the legal notice (Exh.P-3) without assigning any reason. This submission, however is irrelevant in the circumstances of the present case because according to the appellants-defendants, the agreement had already come to an end on the failure of the respondent to make payment of the balance consideration of Rs.90,00,000 on or before 30-12-1995. We may also record the fact, which is relevant, that the very wording of the agreement to sell (Exh.P-1) shows that the date of 31-12-1995 was the absolute limit for making payment for the balance. This is evident from the fact that both parties had agreed that the remaining amount must be paid by 31-12-1995 or earlier. The use of the words "or earlier" is also indicative of the fact that 31-12-1995 was indeed of the essence being the outer limit of time within which payment was to be made.

5. Unfortunately, the learned Division Bench of the High Court, while deciding R.F.A. No.17 of 2006, has not given due consideration to the above noted aspects of the case or to the cogent reasoning given by the trial Court for dismissing the suit of the respondent-plaintiff. We may also add at this stage that the remedy by way of specific performance is equitable and it is not obligatory on the Court to grant such a relief merely because it is lawful to do so. Section 22 of the Specific Relief Act expressly stipulates so. It is axiomatic that one who seeks equity must do equity. In the present case all equities are squarely in favour of the appellants/defendants and stacked high against the respondent/plaintiff. This is evident from his conduct and is a significant additional reason why the suit filed by the respondent/plaintiff seeking discretionary equitable relief must be dismissed.

6. Bearing in mind the above facts and circumstances of the case, we allow this appeal. As a consequence , the appellate judgment dated 4-4-2013 is set aside and the judgment and decree of trial Court dated 20-2-2006 is restored. The amount of Rs.35,00,000 paid to the appellant by the respondent-plaintiff shall be returned to the respondent within 30 days.

7. The appellant shall be entitled to his costs throughout. Civil Petition No. 1634 of 2014:

In view of the above, this petition has become infructuous and is disposed of accordingly. MWA/A-8/SC Order accordingly.