P L D 1952 Peshawar 32 (PLP)

MUHAMMAD SHAFI, J.‑House bearing No. K/1945, situated in Mohallah Aqa Shafi, Peshawar City, belonged to one Chuni Lal. In the execution of their decree for the recovery of Rs. 677/2/0 against him, the Municipal Committee Peshswar, had this house auctioned on 24th October, 1947. The last bit of Rs. 2,700 was of Karim Bakhsh, son of Fazal Illahi. On this date Rs. 675 were deposited with the auctioneer and the balance of Rs. 2,025 was to be deposited in Court by 8th November 1947. In the meanwhile Karim Bakhsh approached Khuda Bakhsh, who figures as a plaintiff in this case, and asked him to advance Rs. 2,025 to him, and he would in return immediately after he received the sale certificate from the Court concerned sell the house in his favour for Rs. 3,

000. Khuda Bakhsh agreed to this proposal and an agreement was executed on 7th November 1947, by which Khuda Bakhsh paid Rs. 2,025 in Karim Bakhsh and the latter in return promised to convey the house to the sale former on payment of a further sum of Rs. 975, soon after the sale certificate was granted to him. It was stipulated in the deed that if Karim Bakhsh did not abide by this agreement he would return Rs. 2,025 and also pay in addition a sum of Rs. 500 as damages. After the receipt of this money from Khuda Bakhsh it appears that Karim Bakhsh deposited it in Court and obtained tie sale certificate. He did not execute the sale‑deed until 24th of December 1947, and Khuda Bakhsh gave notice to Karim Bakhsh to execute such deed. On 21st January 1948, Karim Bakhsh instead of executing a sale‑deed in favour of Khuda Bakhsh entered into a mortgage transaction with Ghulam Muhammad, son of Mian Fazal Qadar, whereby the house was mortgaged with the latter for Rs. 4,000 for a period of five years. Out of the considera tion mentioned in the deed Rs. 200 were paid at once, and Rs. 3,800 were to be paid before the Sub‑Registrar. This deed was presented for registration to the Sub‑Registrar on 23rd January 1948, when Rs. 3,800 were paid and the document was ordered to be registered. Khuda Bakhsh on 29th January 1948, purchased the Court‑fee stamp in order to institute a suit against Karim Bakhsh. He actually instituted the suit for specific performance of the contract basing his cause of action on action on the agreement dated 7th November 1947, against Karim Bakhsh on 3rd February 1948. In this suit the plaintiff alleged that the defendant had undertaken to sell this house to him, and that in spite of notice he refused to execute the sale‑deed in his favour; and he, therefore, was entitled to get a decree for the specific performance of the contract. On the day when Khuda Bakhsh instituted the suit in the Court of the Senior Sub‑Judge Peshawar, Karim Bakhsh executed another deed in favour of his wife's brother Abdul Jabbar, by which he sold the equity of redemption in his favour in lieu of Rs. 2,

500. This amount it appears was paid in the presence of the Sub- Registrar, and the document was registered on the same day. Karim Bakhsh appeared in Court and put in his written state ment on 8th April 1949, disclosing to the Court that he had already mortgaged the house in favour of Ghulam Muhammad, and then transferred the equity of redemption in favour of Abdul Jabbar. On these grounds he had asked the Court to make them defendants in the case. The learned trial Court accepted this prayer and impleaded these two persons as defendants. On being summoned they put in their written statement in which they denied the plaintiff's claim in toto and urged that they mere transferees for value, and had paid their money in good faith and without notice of the original contract, and, therefore, the specific performance of the contract could not be enforced against them. On the pleadings of the parties the learned trial Court framed the following issues :‑

1. Whether the value for purposes of Court‑fee and jurisdiction is incorrect ?

2. Whether defendant No. 1 contracted to sell the suit house to the plaintiff for Rs. 3,000 ?

3. Whether the plaintiff paid Rs. 2,025 to defendant No. 1 according to the terms of the agreement dated 7th November 1947, and, therefore, defendant No. 1 is bound to execute the sale‑deed in favour of the plaintiff ?

4. Whether the plaintiff has committed the breach of the terms of the agreement dated 7th November 1947, and, therefore, he is not entitled to the relief claimed:

5. Whether the mortgage and sale effected by defendant No. 1 in favour of defendants Nos. 2 and 3 respec tively are void and fictitious and as such the plaintiff is not bound by them ?

6. Whether defendants Nos. 2 and 3 are bona fide trans ferees from defendant No. 1 with valuable considera tion without notice and if so with what effect ?

7. Whether the suit for specific performance of the contract is not competent ?

8. Whether defendants Nos. 2 and 3 are bound by the terms of the agreement dated 7th November 1947 ?

9. Relief. The learned trial judge on issue No. 1 found that the value of the suit was properly fixed both for purposes of Court‑fee and jurisdiction and the Court‑fee paid, therefore, was correct. He discussed issues Nos. 2‑4 together and came to the conclusion that defendant No, 1 had contracted to sell the suit house to the plaintiff: for Rs. 3,000, and that the plaintiff had paid Rs. 2,025 to defendant No. 1 according to the terms of the agreement dated 7th November 1947, and lastly that the plaintiff had not committed the breach of the terms of the agreement dated 7th November 1947. On issue No. 5 he held that the mortgage in favour or Ghulam Muhammad and the sale in favour of Abdur Jabbar were fictitious and were intended for the benefit of defendant No.

1. On issue No. 6 he arrived at the conclusion that the defendants Nos. 2 and 3 were not bona fide transferees from defendant No. 1 with valuable consideration and without notice of the previous agreement. On issue No. 7 he found that in spite of the fact that in the contract it was mentioned that in the case of the breach of the agreement Karim Bakhsh would be liable to pay Rs. 500 as damages, the plaintiff was entitled to get a decree for the specific performance of the contract. On issue No. 8 he came to the conclusion that defendants Nos. 2 and 3 were equally liable to perform the contract as defendant No. 1 was. Finding all the issues in favour of the plaintiff he granted him a decree for possession by specific performance of the suit house against the defendants with costs on payment of Rs. 975 to be deposited in three months from the date of the decree He declared the mortgage and sale effect in favour of defend ants Nos. 2 and 3 as null and void and cancelled them, and he directed the legal representatives of the original defendant (No. 1) and the subsequent transferees i.e., defendants Nos. 2 and 3 to carry out the contract by executing a sale‑deed in favour of the plaintiff. It is necessary to mention here that during the pendency of the suit Karim Bakhsh died. His two widows Mst. Marwari and Mst. Chand Munawar and two sons Vakil Ahmad from Mst. Marwari and Iqbal Ahmad from Mst. Chand Munawar wire brought on the record as his legal representatives. There were two appeals against the above order, one by Abdul Jabbar and the other by Ghulam Muhammad. The learned Additional judge accepted both the appeals and setting aside the judgment and decree of the trial Court on issues Nos. 5‑8 dismissed the plaintiff's suit with costs throughout. He did not give any decision on issues Nos. 1 4, because the decision thereon of the learned trial Court was not challenged by the appellants. He, however, permitted the plaintiff to sue the legal heirs of Karim Bakhsh for the return of Rs. 2,025 and also for damages as stipulated in the agreement of sale. The plaintiff has come up on revision to this Court against the judgment and decree of the learned Additional Judge. While the revision petition was pending in this Court Mst. Marwari died on 16th May 1950, and Vakil Ahmad on 26th December, 1950. The petitioner made an application to bring their legal representatives on the record on 17th April 1951. It was prayed in the application that Abdul Jabbar respondent and Wazir Muhammad, the two brothers of Mst. Marwari, should be cited as the legal representatives of the two deceased. On the last hearing an objection was raised by the respondents that as the application for bringing the legal representatives of the two deceased on the record was put in more than 90 days after their death, the revision petition had abated. Since the point involved could not be argued Sheikh Allah Bakhsh, because he did not anticipate this objection, the case was adjourned to to‑day. I do not propose to go into the question whether on account of the death of Mst. Marwari and her son Vakil Ahmad, and their legal representatives having not been brought on the record within 90 days the revision petition abates or not, because this question as has been conceded by the learned counsel on both sides does no more arise. The entire difficulty has been created by the application of the petitioner in which it was prayed that Abdul Jabbar and Wazir Muhammad be brought on the record as the legal representatives of the two deceased. In fact the correct legal position was that Mst. Marwari died on 16th May 1950, leaving behind Vakil Ahmad her son as her sole legal representative. The latter died in December 1950, leaving behind Iqbal Ahmad, his consanguine brother as his legal representative. This Iqbal Ahmad is already on the record, and as has been held in Arbab Said Khan v. Arbab Sarwar Khan reported in P L D 1951, Pesh. at page 20, it was not necessary to put in any applica tion to bring the legal representative of the deceased on the record. The revision petition as it stands is correct in law, and I, therefore, propose to hear it on merits. The findings of the learned trial judge on issues Nos. 1‑4 are again not challenged by the respondents or the petitioner in this Court. Very elaborate and skilful arguments were addressed before me by the learned counsel for the parties on the findings of the learned lower appellate Court on issues Nos. 5‑

8. On behalf of the petitioner it is urged that Ghulam Muhammad and. Abdul Jabbar had notice of the agreement which Karim Bakhsh had executed in his favour, and in spite of that notice they had the transfer of the property made in their favour, and, therefore, he is entitled to have his contract specifically enforced against them as well. It is also submitted on his behalf that in spite of the fact that it was mentioned in the agreement that in case Karim Bakhsh failed to comply with the agreement he would be liable to pay Rs. 500 as damages, the plaintiff was entitled to get the decree prayed for. Under section 27 (a) (b) of the Specific Relief Act, specific performance of a contract can he enforced against either party thereto, or any other person claiming under him, by a title arising subsequently to the contract, except a transferee for value, who hag paid his money in good faith and without notice of the original contract. The principle underlying this section is that the law regards as done what is agreed to be done; and everyone acquiring any interest in the property agreed to be sold subsequent to such agreement and with its notice is in the same way liable to perform the contract as the party from whom he has taken the property on transfer. The subsequent transferee, however, can in order to avoid his liability prove (1) that he is a transferee for value, (2) that he has paid the money in good faith, and (3) that he had no notice of the original contract. Under section 27 (b) it is clearly for the transferee to establish the circumstances under which he would be entitled to retain the property. Prima facie once the vendor had con tracted to sell the property in favour of another person, the subsequent transferee will have no right to get the property until it is shown that he had no notice of the prior agreement. Under section 103 of the Evidence Act the burden of proof as to any particular fact lies on that person who wishes the Court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person. Again under section 106 of the Evidence Act, when any fact is spe cially within the knowledge of any person the burden of proving that fact is upon him. Keeping in view these two sections, it is obvious that it would be within the knowledge of the subsequent transferee whether he had any notice of the previous contract or not, and neither he had paid the money in good faith, and on account of that reason it would be for him to prove that he had no notice of such a contract, and that he was a bona fide purchaser for consideration. It is of an utmost importance that the Courts should gather from all material facts brought on the record as to whether the subsequent transferees were only introduced on account of the malicious motive to defeat the right of a person to enforce a contract or they were the honest transferees of the property. It cannot be forgotten that if the intention in entering into the subsequent transac tions was to defraud a person and defeat his legitimate right, the parties would take all possible precautions to conceal the real nature of the transactions. The Courts have got to see that no party succeeds on account of his cunningness and his ability to hide the real intention of the parties to a certain transaction which on the face of it seems to be perfectly valid and good in law. The result of the above discussion is that it was for Ghulam Muhammad and Abdul Jabbar to prove affirmatively that they had no knowledge of the contract by Karim Bakhsh in favour of Khuda Bakhsh to sell the house in dispute, when they took the property, one on mortgage and the other by sale. The case of Abdul Jabbar does not present much difficulty. He is admittedly the brother of Mst. Marwari, the wife of Karim Bakhsh. He purchased the property on the day when the suit was instituted in Court. It appears that on 29th Janu ary 1948, when Khuda Bakhsh was purchasing the stamp to institute the suit Karim Bakhsh got scent of it from somewhere and he fraudulently transferred the property in favour of Abdul Jabbar. It is inconceivable that Abdul Jabbar being the wife's brother of Karim Bakhsh was completely ignorant of the fact that Karim Bakhsh was so poor that he could not deposit Rs. 2,025 in Court in order to get the sale completed in his favour and for that purpose he had to borrow this amount from Khuda Bakhsh and in lieu thereof as well as some additional amount he had agreed to sell the property in his favour. Abdul Jabbar appeared in the witness‑box and stated that he had no knowledge of this agreement, but this is a mere denial on his part, which remains uncorroborated by any other evidence on the record. It is urged that Abdul Jabbar had paid the entire sale consideration of the equity of redemption in presence of the Sub‑Registrar. No doubt the note of the Sub‑Registrar does show that the amount was paid by Abdul Jabbar to Karim Bakhsh in his presence, but then it can be a mere device adopted by Karim Bakhsh and Abdul Jabbar to hide their real intention, which was to save the property from going into the hands of Khuda Bakhsh. It is significant to note that out of the three marginal witnesses of the sale‑deed in favour of Abdul Jabbar, only Said Ahmad was produced and he also did not say that Abdul Jabbar had no notice of the contract by Karim Bakhsh in favour of Khuda Bakhsh to sell the property in the latter's favour, or that any money changed hands in his pre sence either before the Sub‑Registrar or at the time when the deed was being executed. If Abdul Jabbar's statement was true that he had paid the money in good faith, there is no reason why should Said Ahmad have not mentioned this fact in his evidence. I consequently hold that Abdul Jabbar has failed to prove that he purchased the equity of redemption of the house in dispute without the knowledge of Karim Bakhsh's contract in favour of Khuda Bakhsh to sell the property to him. Ghulam Muhammad's case presents some difficulty. He is not related to Karim Bakhsh at all, and there is no satisfactory evidence produced on the record to show that he was his friend or a close associate. It is also in evidence and has in fact been admitted by Khuda Bakhsh himself that the possession of the house in dispute is at present with Ghulam Muhammad. The endorsement of the Sub‑Registrar on the back of the mortgage -deed in favour of Ghulam Muhammad. also shows that except Rs. 200 which had been paid previously, the rest of the con sideration changed hands in his presence. All these facts taken together would prima facie show that Ghulam Muhammad got this property on mortgage with consideration, and that he paid the amount in presence of the Sub‑Registrar: In spite of that Ghulam Muhammad is not absolved to prove affirmatively that he got the property on mortgage without knowing that Karim Bakhsh had agreed to sell it in favour of Khuda Bakhsh‑ In order to prove this fact he himself appeared in the witness‑box and denied all knowledge of the previous contract. He failed to produce rbe three marginal witnesses of the mortgage‑deed, and the normal presumption would be that if they had been produced they would have deposed against him viz., that he had the knowledge of the previous contract. It is very signi ficant to note that Karim Bakhsh obtained the sale certificate on‑20th November 1947. Khuda Bakhsh gave him a notice to perform his contract on 24th December 1947. Suddenly on 21st January 1948, the mortgage was executed in favour of Ghulam Muhammad, who admitted in his evidence that the negotiations for this mortage had started only four days prior to the execu tion of the deed. He further admitted that he made no inquiries with regard to the title of Karim Bakhsh to the house in dispute, before he actually paid the money to him. There is no explanation forthcoming as to why immediately after Khuda Bakhsh had given notice to Karim Bakhsh. Ghulam Muhammad was in such a desperate hurry as to take the property on mort gage. . These fact lead me to an irresistible conclusion that Ghulam Muhammad at the time when he took the property on mortgage did definitely have the knowledge that Karim Bakhsh had undertaken to sell the house in dispute to Khuda Bakhsh, and the mortgage in his favour was only a device to defeat that right of Khuda Bakhsh. I, therefore, hold that the plaintiff is entitled to enforce his contract against Ghulam Muhammad just as must as he is entitled to do so against the rest of the respondents. The next question is whether in view of the stipulation in the deed that in case of Karim Bakhsh failing to perform the contract he would be liable to return Rs. 2,025 and pay Rs. 500 as damages, the plaintiff is still entitled to the claim of the specific performance of the contract. No doubt under section 12 of the Specific Relief Act, the specific performance of a contract can be enforced only when the act agreed to be done in such that pecuniary compensation for its non‑performance would no: afford adequate relief, and on the basis of this provision of law the learned counsel for the respondents argued that Rs. 500 affords adequate relief for the non‑performance of the contract and the specific relief should, therefore, be refused. While advancing this argument the Explanation appended to‑section 12 of the Contract Act is completely lost sight of. This Explanation lays down that unless and until the contrary is proved, the Court shall presume that the breach of the con tract to transfer immovable property cannot be adequately relieved by compensation in money. Normally the compensa tion is mentioned in the agreement to provide a security for its performance and not because the parties consider that sum as the adequate relief for the non‑performance of the contract. In my view, a party who contracts' to sell a certain immovable property in favour of another person should not be allowed to evade the specific performance merely on account of the fact that the agreement provides the penalty to be paid in default. I consequently hold that the plaintiff would be entitled to have the contract specifically enforced in spite of the fact that damages in case of default have been stipulated in the agreement. The result is that I find the plaintiff entitled to get a decree for the specific performance of the contract dated 7th November 1947, against all the respondents. The wordings of the decree of the learned trial Court in my opinion are not in accor dance with law, and, therefore, it cannot be restored as it stands. In view of the above finding I accept this revision petition set aside the judgment and decree of the learned lower appellate Court, and pass the following decree in favour of the plaintiff against the defendants with costs throughout :‑ "The plaintiff's right to the specific performance of the contract is declared, and he is found entitled to get physical possession of the house in suit. Within a month from the arrival of the record in the trial Court, the plaintiff shall deposit in Court Rs. 975, and Ghulam Muhammad, Abdul Jabbar and Mst. Chand Munawar as well as Muhammad Daud on behalf of his ward Iqbal Ahmad, shall execute the transfer deed in favour of the plaintiff in respect of the disputed house as claimed". Orders announced. A. H Revision accepted.