P L D 1988 Lahore 216 (PLP)

Shop No. W/571 situate at Ratta Road Rawalpindi City, belonged to a Non Muslim evacuee. In course of settlement operations, it was transferred to Muhammad Aslam and was in possession of Abdul Majid as his rent paying tenant. By deed dated 16 1972, Exh.P.1, Muhammad Aslam agreed to sell the shop to Abdul Majid at the sale price of Rs.8,

000. Rs.1,200 were received in advance as earns, money and it was agreed that the sale deed shall be executed by 30-4-1973 when the balance sale price shall , be received before the Sub Registrar. It was further agreed that in the event of default on behalf of the promissor (Muhammad Aslam) he shall in addition, to earnest money, pay Rs.1,200 to the promisee, whereas if the promisee committed default in paying the sale price and having sale deed executed, earnest money shall be forfeited and the sale agreement rescinded. Exh.P.1 indicates that Abdul Majid was bound to pay the rent at the rate of Rs.50 per month meanwhile. Sale could not be completed by the and date and time for it was extended to 301973 by agreement Exh. P.z dated 30 1973. Except for the terms already settled and repeated, it was stated in Exh.P.2 that further extension in time shall not be allowed and in case of default, earnest money shall be forfeited and the sale agreement cancelled. It is common ground that sale was not completed even on 30 1973 and yet another agreement, in this behalf, was executed between the parties on 23 1976. It is Exh.P.3. It acknowledged receipt of Rs.2,000 through cheque No.734653 dated 1 1975, and also Rs.500 in cash from the Abdul Majid and provided a period of six months for the sale deed to be completed. Exh.P.3 further stated that in case Muhammad Aslam did not fulfil his promise and refused to complete the sale, he shall pay a sum of Rs.5,000 to Abdul Majid, whereas if Abdul Majid defaulted in his commitments, Rs.2,500 already received from him shall stand forfeited. It may be noticed that Exh. P. 3 does not account for Rs. 1, 200 already received as earnest money and no reference is made about it in Exh. P.3. As to the sale price of the shop, it was agreed that ' it shall be mentioned in the eventual sale deed but no specific amount as sale price was given in Exh.P.3. Since Muhammad Aslam did not fulfill his promise and allegedly declined to make the sale on the terms agreed upon, Abdul Majid brought a civil suit against him on 10 1977 for enforcement of the sale agreement. In the first instance, Muhammad Aslam only was impleaded as defendant in the suit. Since Muhammad Aslam had sold out the shop to Muhammad Safdar Insari at the sale price of Rs.20,000 on 8 1977, Abdul Majid made an application for his impleadment on 1 1977. It was allowed on 8 1978 and the subsequent transferee was also impleaded as defendant No.2 in the suit. Both submitted separate defence and traversed the claim put forth by the plaintiff. Pleadings gave rise to three issues. These are: (1) Whether the plaintiff has failed to perform his part of the contract? OPD (2) Whether defend No,2, is a bona fide purchaser for consideration and, without. notice? If so its effect? OPD 2 (3) Relief. In support of the aforenoted issues, parties produced their evidence oral as well as documentary. On its consideration, learned Civil Judge concluded that plaintiff failed toper form his part of the contract and that defendant No.2 was a bonafide purchaser for value without notice of the prior sale agreement. It was further found that since the plaintiff had failed to get the sale deed registered from defendant No.1 within stipulated period of time, his earnest money was forfeited and Exh.P.3 stood rescinded. On these conclusions suit was dismissed on 12 1979. Plaintiff preferred an appeal. It was allowed on 12 1980 and judgment and decree of the Court of first instance was reversed and the plaintiff was given a decree for specific performance subject to payment of Rs.20,000 as sale price to be deposited within three months. It is this decision which is being challenged in second appeal at the instance of defendants appellants. On behalf of the appellants, MuharriMad IMUhir Paracha Advocate assisted by Khalid lqbal Qazi Advocate raised these, submission FIG, (1) In the absence of specific averments in the plaint as to the plaintiff' readiness and willingness to perform his part of the contract, suit was bound to fail; (2) Inordinate' delay and laches disentitled the Plaintiff to specific performance of the sale agreement; (3) Time was essence of the contract for sale and the same having not been adhered to relief of specific performance cannot be had; (4) Exh.P.3 being vague and uncertain was incapable of specific performance; (5) Defendant No.2 was a bona fide purchaser for value without notice of prior agreement and his rights were protected in terms of section 27, clause (b), Specific Relief Act, 1877. In support of above contentions, reliance was placed on the decision in Said Habib v. Haji Matiur Rehman and 5 others 1980 C L C 1450, Ahmad Bakhsh v. Mst. Zaib Elahi P L D 1981 Baghdad ul Jadid 60, Muhammad Yousaf Ishaqi represented by legal heirs v. Abdul Majid Khan and 5 others 1984 C L C 243, Bakhtawar v. Sher Muhammad and others 1984 CLC 2248, Shajar Ali Hoti v. Esmail Subhani 1987 C L C 2307. In defence of the impugned judgment, learned counsel for the respondents submitted that; (1) There was nothing in the Specific Relief Act to indicate that there must be an express averment in the plaint to the effect that plaintiff was ready and willing to perform his part of the contract and that the absence of such an averment was fatal to the suit. However, reference to para 5 of the plaint would reveal that such an averment was expressly made; (2) There was neither delay nor laches; (3) Ordinarily time is not of the essence of a contract to sell immovable property and in the circumstances of the case it was not so; (4) Exh. P.3 was in continuation of agreements Exhs. P.1, P.2 and it cannot be characterised either as vague or uncertain; (5) Stipulation of damages in the sale agreement was not a bar to the specific enforcement of the sale agreement; (6) Defendant No.2 had clear notice of the prior sale agreement in favour of the plaintiff and also possession over the disputed shop but did not act in good faith and without semblance of an inquiry as to the entitlement of the plaintiff to hold the disputed property rushed to make the purchase. In this circumstance, subsequent sale cannot be protected. In support relied upon the decisions in Abdul Hamid v. Abbas Bhai Abdul Hussain Sodawaterwala PLD 1962 Supre ' me Court 1, Haji Abdullah Khan and others %,. Nisar Muhammad Khan and others PLD 1965 Supreme Court 690, Ghulam Nabi and others v. Seth Muhammad Yaqub and others PLD 1983 Supreme Court

344. Muhammad Anwar Khan Ghouri v. Sheikh Muhammad Taqi P L D 1977 Karachi 391, Faqir Muhammad and 5 others v. Sheikh Nasim Ahmad P L D 1979 Lahore 356, Momtazul Karim and others v. Abu Hussain and another 1970 S C M R

816. Some of the facts are not in dispute. Those are:- Shop belonged to Muhammad Aslam. He agreed to sell the same to Abdul Majid for Rs.8,000 and received Rs.1,200 in advance as part of the purchase money. Per terms of Exh.P.1, sale deed was to be executed by 30 1973, on payment of the balance sale price. Sale could not be completed by the stipulated period and time in this behalf was further extended to 30 1973 and that to this date, because of express averment in Exh.P.2, the plaintiff was not in default. A further sum of Rs. 2,000 was received by Mohammad Aslam through cheque No.734653 dated 11975 in addition to Rs.500 in cash on 23 1976 and the time for sale was extended for another six months and that Ex.P.3 does not indicate the sale price but stated that it shall be mentioned in the sale deed to be executed subsequently by the parties. Execution of Ex.P.1 to Ex.P.3 is not in dispute. In this background, I propose to advert to the points in seriatim. As for the objection of express averments in the plaint about plaintiff's readiness and willingness to perform his part of the contract, reference to plaint in general and para 5 in particular, shall suffice to show that such an averment was made. From the plaint read as a whole, it clearly, transpires that default in regard to non completion of the sale was attributed to defendant No.1 and as for the plaintiff, it was specifically averred that he had always been ready and willing tolperform bis part of. the contract and continued to be so ready and willing. In Maksud Ali and others v. Eskandar Ali (P L D 1964 Supreme Court 381) in regard to such an averment, it was observed: "So far as the question of making any express averment in the pleadings of such readiness and willingness is concerned, we are of the view that although there can be no doubt that this is the invariable practice of pleading, and if we may say so, a desirable practice, designed to give a clear and express notice to the opponent of the case so tight to be made out, it A cannot be said that this is a rule of law which would render the structure of the suit itself defective or that without it a proper cause of action would not appear on the .plaint. We are, therefore, unable to accept the contention of the learned counsel that the present suit was bound to fail in the absence of such an averment. Now so far as the question of what exactly the plaintiff must still prove; namely, as to whether he must prove his readiness from the date of the contract to the date of hearing, is concerned; we express no final opinion, for, full arguments have not been advanced before us on this aspect of the question, as on the evidence in this case it has been held by all Courts below that even such readiness and willingness had in fact been established." Apart from these weighty observations, there appears to be nothing in the Specific Relief Act, which would indicate that there must be an express averment in the plaint to this B effect and in default the suit shall fail. See Hakim Ghulam Rasool v.1Sh. lmdad Hussain and another (P L D 1968 Lahore 501). This effectively answers the first point. As for the contention that a sum of money was named in the agreement as a pre assessed amount of damages obtainable in lieu of the remedy for specific performance, reference to decision of Supreme Court Abdul Karim v.Muhammad Shafi and another (1973 S.C.M.R. 225) shall .be helpful. Relevant observations are at page

227. These read: Section 12 provides that the specific performance of the contract may be enforced in the discretion of the Court. Explanation to section 12 of the Act clearly states that unless and until the contrary is proved,. the Court shall presume that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money, and that the breach of a contract to transfer movable property can be thus relieved. Section 19 provides that any person suing for specific performance of a contract may also ask for compensation for its breach, either in addition to or in substitution for, such performance. Section 20 says that a contract, otherwise proper to be specifically enforced, may be thus enforced, though a sum be named in it as the amount to be paid in case of its breach, and the party in default is willing to pay the same. Section 22 provides that the jurisdiction to decree specific performance is discretionary, and the Court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the Court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a Court of Appeal. The aforesaid provisions thus clearly empower the Court to decree specific performance of the contract as the amount to be paid in c of its breach. The case reported in P L D 1958 PC 150 has no application to the present case inasmuch as the law was apparently different in Ceylon. Having regard to the presumption mentioned in explanation to section 12 it was for the petitioner to prove that pecuniary compensation could give adequate relief to the vendee. This the petitioner has failed to do. Presumption raised by explanation to Section 12 of the aforesaid Act has not been effectively rebutted, and, therefore, the law must take its that the sum named in the contract in case of its breach did the relief of specific performance. This disposes of the contention and brings me to the question of laches and delay in defence of the suit as a bar to relief of specific performance. To resume the narration at the risk of repetition, Ex.P.1 to Ex.P.3 and the payments made thereunder amply demonstrated that the plaintiff was quite eager to receive the disputed property at the agreed sale price and at no stage is shown to have either abandoned or waived his rights in the agreement. Therefore, the point made in regard to laches and delay cannot be accepted. Last agreement Ex.P.3 came to be made on 23 1976. It gave six months for completion of sale which expired on 23 1976. It is available in the plaintiffs evidence that he had been approaching defendant No.1 to complete the sale but was put off by him. Plaintiff is also shown to have given a notice in the press on 9 1977 (Ex. P. 1) and filed a suit. for specific performance on 10 1977. Delay short of limitation unless it was al case of inequitable conduct on the part of plaintiff does not prove fatal to an action of specific performance of the contract. In Gosthol Behari Sadhukhan and another v. Omiyo Prosad Malick and others (AIR 1960 Calcutta 361) learned Judge observed: "It would be too much to say that mere delay, merely because of its length, would precluded a plaintiff from obtaining specific performance. It is not correct to say that unless it is positively shown that the plaintiff has abandoned his right or there has been such a change of circumstances that the grant of specific performance would prejudice the defendants, the Court is bound to exercise its secretion in favour of the plaintiff. In deciding whether delay bars the grant of specific performance, the Court should consider the balance of justice and in considering this should take into account the length of the! delay and the nature of the acts done during the interval which may effect such questions. Even if the circumstances do not shown a! waiver but it appears that the plaintiff has come to the Court not' merely with the motive of obtaining specific performance but with an ulterior motive of taking advantage or money spent by a transferee, it will be proper for the Court to take into consideration such conduct of the plaintiff in deciding whether discretion should be exercised in his favour or not." Applying the aforesaid statement of law with which I respectfully agree to the facts of the present case, it cannot' be said that plaintiff's conduct was either inequitable or that action was delayed by him with some ulterior motives. Conversely, he has paid a major portion of the consideration that is Rs.3,700 and being in possession of the property as its tenant was deeply interested in buying the same on payment of the agreed price. Had it been otherwise, there was no occasion for him to pay Rs.2,000 by cheque on 1 1975 and an additional amount of Rs.500/ in cash on the date of the agreement Ex.P.3. Payment of Rs.2,000 on 1 1975 is indicative of the fact that sale agreement had not come to an end and was being kept alive. I enquired from the counsel for the appellants to explain the circumstances in which the aforesaid payment came to be made after the expiry of time limit fixed in Ex.P.2. He searched in vain for a suitable reply. In these circumstances, I do not subscribe to course, in taking me to hold not bar second Needed the contention that action was deliberately delayed by the plaintiff and in this he is shown to have acted inequitably disentitling him to the discretionary relief in equity jurisdiction. This bring me to the point, whether time was the essence of the contract. It is well settle that ordinarily time is not of the essence of a contract to sell immovable property unless expressly it was stipulated and circumstances showing that it was intended to be so. It is correct that by Ex. P. 1, sale was to be made by 30-4-1973. It is also correct that this time was extended to 30-6-1973 by Ex. P.2 which provided that sale could not be completed but for this no fault was ascribed to plaintiff. In Ex.P.3, it was stated that sale shall take place within six months. Though it was stated therein that in case of default on part of the plaintiff Rs.2,500 were to stand forfeited, yet it was not expressly stated that the sale agreement would also come to an end. That part, plaintiff in his own statement had clearly deposed that he deligently pursued the matter with defendant No.1 and repeatedly asked him to complete the sale but the latter adopted dillidallying attitude and postponed the matter till such time that he alienated the disputed shop to defendant No.2. Therefore, failure to keep to the date assigned will not prevent the plaintiff from claiming specific performance of the sale agreement because firstly time was not of the essence of the contract anal secondly even if it be so, defendant No.1 cannot be permitted t01 take advantage of his own delaying conduct. To permit him to do so' would be tantamount to placing a premium on his wrong. Next comes the question as to whether defendant No.2 was a bona fide purchaser for value without notice of the existing sale agreement. Section 27,1 Specific Relief Act in so far as was relevant to the case provides that in addition to the parties, contract may be enforced against any other person claiming under him by a title arising subsequent to the contract except a transferee for value, who has paid his money in good faith and without notice of the original contract. (Underlining is mine). Therefore, material 'point falling for examination is whether defendant No.2 had notice of the prior sale agreement. Admittedly, plaintiff was in possession of the disputed shop and vide Ex.P.3 was absolved from paying any rent. Defendant No.2 was owner of the adjacent shop and was residing in his own house which too was contiguous to the shop in dispute. Plaintiff gave evidence that defendant No.2 had knowledge of the sale agreement. Defendant deposed to the contrary. Onus to prove that defendant No.2 had no notice and purchased the property in good faith lay upon him. In order to succeed, he was obliged to prove that he paid the price, acted in good faith, had no notice of the prior agreement and also took reasonable care. In Mummidi Reddi Papannagari Yella Reddy vs. Salla Subbi Reddy and others (AIR 1954 Andhra Pradesh 20) it was held that notice contemplated by Section 27(b) cannot be confined actual notice but extended to constructive notice. as, well and that where the subsequent transferee had the knowledge of actual possession of certain person as a tenant over the property he cannot be said to be a person purchasing the property without notice. Therefore when a person who takes a transfer without enquiry as to the terms on which a tenant was in possession cannot enforce his transfer against him if he happened to be in possession of a prior sale agreement. In Sastha Kumaraswamy v. Joseph Alasius, and others A.I.R. (37) 1950 Travancore- Cochin 61, it was held: It is undoubted that the defendant is a person who owns a shop quite opposite to the premises and from his evidence, it is clear that he was also aware of the fact that the plaintiff was in possession. It must, therefore, be held that it was incumbent on him to make enquiries of the plaintiff to ascertain under what title he was in possession. He said that he went to the plaintiff one day after the sale deed was registered. This is certainly not conduct consistent with bona fides, for, as we understand it, the good faith of a purchaser is to be gauged from the enquiries which a bona fide purchaser would make before he purchases and the opportunities which he had of making enquiries. We are unable to believe that a person demanding surrender of a property on the strength of a sale deed is a person who takes the sale deed in good faith. We are, therefore, led to infer that the defendant is not a bona fide purchaser for value. The case law on the point leaves no room for doubt on this matter. In Baba San v. Mohammad Akbar Sahib, A.I.R. (10) 1923 Mad. 563: (73 1.0.297), it was pointed out, that it was incumbent on a purchaser of immovable property not in! the possession of .the vendor to enquire into the nature of the interest' held by the person in possession and if he willfully abstains from making any enquiry or is grossly negligent in making enquiry he will! be in law affected with notice of any fact which he would have come! to know had he made such enquiry. To the same effect is the decision; in Faki Ibrahim v. Faki Ghulam, A.I.R. (8) 1921 Bom. 459: (45' Bom. 910). In that case Macleod C.J. held that where a purchaser of immovable property knowing that his vendor is not in possession purchases the property without making any enquiries must be taken to have had constructive notice of all the equities in favour of that one in possession. The following passage occurring in Daniels v,.! Davison, (1809) 16 ves.249: (10 R.R. 171) was also quoted as justifying the above view: "Where there was a tenant in possession under a lease or an agreement a person, purchasing part of the estate, must be bound to enquire on what terms that person was in possession.... that this tenant being in possession under a lease, with an agreement in his pocket to become the purchaser, those circumstances altogether gave him an equity repelling the claim of a subsequent purchaser, who made no enquiry as to the nature of his possession. In Bhup Narain v., Gokul Chand, A.I.R. (21) 1934 P 0 68: (13) Pat. 242), it was pointed out that the burden of proving bona fide is on the M transferee. Adverting to S.27 which saves bona fide purchases in suits for specific performance of contract, their Lordships pointed out as follows: "In their Lordship's opinion, the section lays down a general rule that the original contract may be specifically enforced against a subsequent transferee but allows an exception to that general rule, not to the transferor, but to the transferee, and, in their Lordships' opinion it is clearly for the transferee to establish the circumstances which will allow him to retain the benefit of a transfer which prima facie he had no right to get." In Shah Muhammad v. Inayatullah and others PLD 1953 Lahore 87 B. Z. Kaikous, J. , as his Lordship then was said "There is abundant authority for the proposition that possession is tantamount to notice of title of the party in possession. He may have acquired possession under one title and may at the same time possess a document entitling him to have another interest transferred. The person, who purchases the property, shall be deemed to have notice of all his rights." In this state of law, it was clearly for the defendant No. 2 to prove that he. was a transferee in good faith and 'without notice of the original contract. Mere denial that he had no notice was insufficient and the burden which lay upon him has not been adequately discharged. On examination of the totality of circumstances emerging from the record. I do not think it is possible for the defendant No.2 to successfully urge that he was not cognizant of the sale agreement existing in favour of the plaintiff. There is no additional circumstance available in the evidence and that is that in 1973 where, defendant No.2 built b wall on the roof of his own house, plaintiff raised a protest and it is,, said that the wall was demolished. Therefore, on the available evidence, it is open to serious about that defendant No.2 was a bona fide transferee for value without notice and was protected under the law. Last comes the argument that the agreement was vague and uncertain, transmute as ,that, neither the sale price was fixed nor was it certain with reasonable certainty. As observed above, in Exts.1, P.2, Rs.8,000 was fixed as the sale price of the disputed shop. However, it Exh.p,n., it was stated that actual sale price if would be mentioned in the sale deed. From the grounds of appeal, , it clearly appears that the parties had agreed to the sale of the shop at the current rate, meaning thereby that the agreement' was that the shop shall be purchased at the market value obtaining at the time of the sale deed. An extract from the grounds of appeal may assist this point. It reads "As at this time, the price of the property had shot up many fold, the respondent did not mention the price of the shop and promised to buy at the current rate." If this be so, sale agreement was neither vague nor uncertain. Agreement. to sell was, at market price. In Tirumala Chetty Rangayya Chetty Kandalla. Srinivasa Raghavacharlu and others A I R 1929 Mad. 243, At page 246, it was observed that an agreement To sell at a moderate price or at a fair rate or at a proper rate may be perfectly valid but an agreement to sell at a favourable or concession rate is indefinite and must be regarded as void ' for indefiniteness. This rule was approved in Agha Sikandar Ali Khan v. Mst. Nawab Bibi and 11 others P L D 1973 Lahore

77. In this view of the matter, I find that the sale agreement in favour of respondent cannot be characterised as void on the ground that it did not provide for the sale price payable for the shop. For the reasons set out above, I would agree with the learned Judge below, uphold his decision and dismiss the appeal but leave the parties to bear their own costs. M.B.A. /M-520/L Appeal dismissed.