1988 PLP 870 (CLC)

(i) E. Gautret, Administratrix of Leon Gautret Deceased v. Egerton and others, 1866 Law Reports Court of Common Pleas Volume II, page 371 in which the Court of Common Pleas held that in order to maintain an action for negligence it is not enough to show that the defendant has been guilty of negligence without showing in what respect he was negligent and how he became bound to use care to prevent injury to others. (ii) Sarifun Mandalin and others v. Feradoul Khatun, 76 Indian Cases

603. In the above case a Division Bench of the Calcutta High Court while construing Order VIII, Rules 2 and 4 of the C . P. C . held that a defendant is to particularise in his defence all points, whether of law or of fact, which he takes by way of defence, and deprecated evasive denial. (iii) Khub Chand and others v. Chittal Mal, 132 I.C. 1931 page 43, in which a Division Bench of the Allahabad High Court held that Article 89 of the First Schedule to the Limitation Act is applicable to a suit by a Principal against an Agent for property received by the latter and not accounted for the period of three years runs from the date when the account is, during the continuance of the agency, demanded and refused or where no such demand is made, when the agency terminates. (iv) Braham Dutt v. East Punjab Province and others A I R 1958 Punjab 351 (V 45 C 101), in which a Division Bench of the Punjab High Court held that mere fact that pleas with respect to the suit being barred by limitation or under section 19 of Act XIV of 1947 were raised by each of the defendants would be of no avail, in the absence of a clear statement of facts on which these pleas could be based. (v) Cutodian of Enemy Property, Islamabad v. Hoshang M. Dastur and 6 others P L D 1977 Kar.

377. In the above case a Division Bench of this Court held that a defendant in order to invoke period of limitation should prove affirmatively that his refusal to perform contract was clear, unequivocal and unconditional and that Article 113 cannot be invoked by defendant who takes inconsistent and contradictory pleas with regard to conclusiveness or otherwise of contract. (vi) Miran alias Mir Muhammad v. Ghulam Hussain P L D 1985 Kar.

674. In the above case a learned Single Judge of this Court while construing Article 113 of the First Schedule to the Limitation Act observed that the Article visualises two situations; one when the date for performance is fixed in the contract itself and the other when no such date is fixed. In the former case the starting point would be a fixed date. But in the latter the limitation would remain suspended and the period would start to run only when the promiser defendant refuses to perform his part and such refusal is notified to the promisee/ plaintiff. (vii) Mst. Munawar Bibi v. Mst. Maheen Quddusi 1986 C LC (Karachi) 1887, in which a learned Single Judge of this Court held that period of limitation for filing suit for specific performance of contract, would begin to run from date fixed for performance thereof and in the absence of any fixed date from the notice of non‑performance of the agreement.

5. We are inclined to hold that in terms of Order VI, Rule 2 and Order VIII, Rule 2 a defendant is supposed to plead specifically the facts which may constitute a defence inter alia, for the purposes of limitation. We are also inclined to hold that it is a well‑settled position in relation to Article 113 of the First Schedule to the Limitation Act that if the date for performance of a sale agreement of an immovable property is specified therein, the period of three years shall commence from the specified date, but 'where no date for performance is mentioned in the sale agreement, the three years period will commence from the date of refusal to perform. In the present case, as pointed out hereinabove, in the written statement the appellants had not pleaded the factum of alleged refusal by the vendor's letter, dated 16‑7‑1974 or the factum that the cheque, dated 10‑7‑1975 for a sum of Rs.35,000 was tendered to the vendee by the vendor for refusing the performance of the agreement nor apparently it was urged before the learned Single Judge as is indicated from the judgment under appeal. However, it was urged by Mr. J.H. Rahimtoola learned counsel for the appellants that the Court should not strictly construe the pleadings, particularly on the question of limitation, as the burden is on a plaintiff to show that the suit is within the limitation period. He has further submitted that the statement of D.W.1 Mohammad Qasim to the effect that the vendor in his presence tendered the above cheque to the vendee for settlement of the agreement remained unrebutted and, therefore, his above submission is to be accepted. Leaving apart the question that in the absence of any specific plea as to the repudiation either on 16‑7‑1974 or 10‑7‑1975 it is not open to the appellants to urge the above point as evidently it was not urged before the learned Single Judge. We have examined the merits of the above submission. We are unable to read into vendor's aforesaid letter, dated 16‑7‑1974 Exh.P.7 any repudiation of the agreement. The vendor by his above letter had acknowledge the receipt of the full consideration of Rs.60,000 plus Rs.40,000 and thus a sum of Rs.1,00,

000. He had stated that in case he would cancel the aforesaid agreement he would pay back the vendee the aforesaid sum of Rs.1,00,000 by adjusting Rs.65,000 payable to him by the vendee under an agreement, dated 14‑7‑1974 in respect of M & M Square (Commercial Plot No. SD‑23, North Nazimabad, Karachi and by making a cash payment of Rs.35,

000. He had further confirmed that in the event of the parties agreeing to cancel the agreement, the vendee would not be required to pay anything towards the use and occupation of the half portion of bungalow upto the date of the cancellation of the agreement. It cannot be urged by any stretch of imagination that the above letter amounted to repudiation or refusal of the agreement. The above submission of the learned counsel for the appellants is also belied by the contents of the vendor's aforesaid letter, dated 7‑4‑1977 Exh.P.3 whereby first time he repudiated the agreement, inasmuch as in the above letter he had neither referred to any repudiation by the above letter Exh.P.7 nor by the above cheque Exh.6/1. In our view the above pleas are in fact unfounded and, therefore, were not pleaded in the written statement nor were urged before the learned Single Judge. Since the repudiation was made first time by the vendor through his above letter, dated 7‑4‑1977 Exh.P.3 and as the suit was filed on 11‑3‑1980, it was within three years from the date of refusal and hence within the limitation period.

6. Mr. J.H. Rahimtoola in support of Issue No. 6 has submitted that factually the vendor has not received the sale consideration. In furtherance of his above submission he has stated that the admission of the receipt of the consideration by the vendor in his letter, dated 16‑7‑1974 Exh.P.7 cannot be taken into consideration as the above letter was inadmissible in evidence and in any case liable to be ignored because of section 23 of the Evidence Act as the same was written during the process of settlement. In furtherance of his submission he has referred to above section 23 of the Evidence Act, which provides that in civil cases no admission is relevant, if it is made either upon an express condition that evidence of it is not to be given, or under circumstances from which the Court can infer that the parties agreed together that evidence of it should not be given. To reinforce the above submission, he has referred to the following observations from the Law of Evidence by M. Monir and following para. 212 from Halsbury's Laws of England, Fourth Edition, Volume 17, which read as follows: "Principal.‑‑ Confidential overtures of pacification and any other offers of propositions between litigating parties, expressly or impliedly made without prejudice, are excluded on grounds of public policy; for without this protective rule, it would often be difficult to take any steps towards an amicable compromise or adjustment: and, as Lord Mansfield has observed, all men must be permitted to buy their peace without prejudice to them should be offer not succeed; such offers being made to stop litigation, without regard to the question whether anything is due or not. It is most important that the door should not be shut against compromise. When a man offers to compromise a claim, he does not thereby necessarily admit it, but simply agrees to pay so much to be rid of the action." 'Halsbury' "Para.

212. Communications 'without prejudice'. Letters written and oral communications made during a dispute between the' parties, which are written or made for the purpose of settling the dispute, and which are expressed or otherwise proved to have been made 'without prejudice', cannot generally be admitted in evidence. The rule does not apply to communications which have a purpose other than settlement of the dispute; thus, it does not apply in respect of a document which, form its character, may prejudice the person to whom it is addressed. The privilege, where it exists, covers not only the particular letter itself but also all subsequent parts of the same correspondence on both sides, even if they are not expressed to be 'without prejudice', unless there is a clear break in the chain of correspondence to show that the ensuing letters are open. Moreover, it has been held to cover an open letter, followed by another from the same party to the effect that their communications were intended to be 'without prejudice'. The privilege attaches only for the purposes of the action in which it was written, but it applies for the protection of the solicitor who writes the letter, as well as for his client."

7. In our view, the principles of law enunciated in the above‑quoted paras from the Law of Evidence by M. Monir and Halsbury's Laws of England, are not attracted to the present case, inasmuch as, there is nothing on record to indicate that Exh.P.7 was written by the vendor in the process of any negotiation for settlement. It was a unilateral letter written by the vendor when there was no dispute as to the non‑performance of the agreement. We may observe that the vendor in his letter, dated 7‑4‑1977 Exh.P.8 has made a reference to the above Exh.P.7 without any reservation. It was not the case of the vendor that he had admitted the receipt of consideration during the process of any negotiation. Then it was contended by Mr. J.H. Rahimtoola that factually the agreement was part of the business transaction in relation to 'M & M Square' and that as the vendee was liable to pay a sum of Rs.65,000 in respect of the said transaction, factually he had not received any consideration for half portion of the bungalow. In furtherance of the above submission he has referred to the vendor's above letter, dated 16‑7‑1974 Exh.P.7 in which reference to M & M Square has been made and also to the factum that the vendee was liable to pay a sum of Rs.65,000 in relation thereof. He has also referred to the vendee's letter, dated 13‑4‑1977 Exh.P.9 in which he had admitted that he would, no doubt, settle the account and pay the amount in terms of the vendor's above letter dated 16‑7‑1974 Exh.P.7. He has also referred to Exh.7/2, which is a Declaration of Oral Gift made by the vendee on 14‑7‑1974, whereby he gifted M & M Square in favour of his wife and four children in proportion mentioned therein and also stated that he owned commercial plot admeasuring 1,000 square yards bearing No. SD‑23, Block A, North Nazimabad, Karachi under a lease deed, dated 6‑11‑1968 and that he in conjunction with the vendor raised construction of a market building known as M & M Square, consisting of 19 shops and 8 residential flats at a total cost of Rs.1,80,000 including the cost of the plot and that he owed a sum of Rs.65,000 to the vendor which amount was to be discharged in addition to the other liabilities mentioned in the gift‑deed by the donees. In this behalf it may be pertinent to reproduce paras. 2 and 6 of the above gift‑deed:‑ "

2. That on 14th July, 1974 the agreement of sale, dated 30‑6-1970 between me and the said Mr. Mohammad Ayub as also the oral agreement between us regarding the investment on the construction and sharing of rents and profits of the building has been revoked and cancelled by agreement dated 14th July, 1974 signed by us at my house in presence of Mr. Mohammad Amin Memon as witness, and the account of investments made by Mr. Mohammad Ayub as also of the rents and profits payable to him upto 14‑7‑1974 has been finally settled as incorporated in the agreement of cancellation, dated 14‑7‑1974 and I have to pay a sum of Rs.65,000 to the said Mr. Mohammad Ayub in full and final settlement. (6) That I am making this declaration to provide evidence of the aforesaid antecedent oral gift and its acceptance by the respective donees aforesaid subject to the liabilities as mentioned and to the terms and conditions of the lease granted by the K.D.A. and of the delivery of possession of the donees. The witnesses to the antecedent oral gift have also signed this declaration in token of its correctness." Incidentally it may be mentioned that the vendor was a witness to the above gift‑deed.

8. We may observe that from the material on record it seems that the vendor and the vendee were class‑fellows during the school days and were very close friends inasmuch as that the vendee in one of his letters at the initial stage was agreeable to cancellation of the agreement provided the vendor would gift the bungalow to his first wife and children with whom he had strained relations on account of second marriage and whom he had in fact divorced. However, there is nothing on record from which it can be concluded that the agreement and the above transaction between the vendor and the vendee in relation to construction of M & M Square was in continuation or was part of the agreement of sale. We are, therefore, inclined to hold that merely the fact that the vendee was liable to pay a sum of Rs.65,000 in respect of the construction of M & M Square would not negative the factum that the vendee had paid the full consideration under the agreement. It may be observed that though in the agreement the consideration for half bungalow shown is Rs.60,000 but factually it was Rs.1,00,000 as admitted by the vendor in his above letter, dated 16‑7‑1974 Exh.P.7. We are inclined to' concur with the finding of the learned Single Judge that the vendor had received the full consideration under the agreement from the vendee.

9. Adverting to issue No. 5, it may be observed that the thrust of the argument of Mr. J.H. Rahimtoola was that the vendee was in addition to being a friend of the vendor, was also his legal adviser and, therefore, he was in dominant position and that the conditions of the agreement indicate that it was one sided inasmuch as even it was provided that the balance consideration could be paid even after the registration and execution of the sale‑deed. In our view, the above submission is not in consonance with issue No. 5, as framed. The above issue refers to para. 2 of the written statement wherein the plea taken was as follows: '

2. The statements made in paragraph (2) of the plaint and their implications are denied. It is submitted that late Mr. Ghulamali and the defendant were very close friends and the defendant trusted and had complete faith in Mr. Ghulamali. The defendant and late Mr. Ghulamali had grown up together since their childhood and were classmates also. The alleged agreement of sale was a fake and fictitious trans action and was made at the instance of late Mr. Ghulamali on his representation that 'he needed it for purposes of saving his income‑tax and that it will not be acted upon or enforced. The defendant believing his representation to be true signed along the dotted line and executed the agreement without reading its contents and solely relying on the friendship of and faith in the late Mr. Ghulamali. No consideration was received by the defendant as alleged or otherwise. The bungalow is a double‑storeyed one and the ground floor alone could not have been sold. The figure. of Rs.60,000 (Rupees sixty thousand only) was also sham and fictitious because the property is worth more than Rs.6,00,000 (Rupees six lac only) and the ground floor could not have been sold for a throw away price of Rs.6,00,000 (Rupees six lac only). The figure of consideration was also unilaterally fixed by Mr. Ghulamali and the agreement was made and prepared by him and its terms were not agreed between Mr. Ghulamali and the defendant but the same were incorporated by Mr. Ghulamali alone and since it was not to be acted upon the defendant signed it to oblige Mr. Ghulamali." Neither the vendor during his lifetime in any of his letters, nor D.W.2 Mohammad Aslam one of the legal heirs in his deposition has stated that the agreement was entered into' at the representation of the vendee that he needed the same for saving his income‑tax and that it would not be acted upon or enforced. We may observe that the vendor even in his letter, dated 17‑4‑1977 Exh.P.3 whereby he refused the completion of the agreement had not averred that the agreement was entered into for the above purpose and was not to be acted upon or that any undue influence was exercised by the vendee. The plea taken by the vendor in para. 2 of the written statement was apparently untrue. We may mention that there is nothing on record on the basis of which it can be concluded that either the agreement was fictitious or it was executed because of the undue influence of the vendee.

10. This leads us to the issue urged by Mr. J.H. Rahimtoola, namely issue No.8. His first submission was that the agreement being uncertain and vague is void in terms of section 39 of the Contract Act and cannot be specifically enforced. The above contention seems to be untenable as the agreement specifies distinctly the subject‑matter of the agreement by stating that half share comprising of the ground floor with open space, lawns and gardens and of which the possession was given to the vendee. Then it was contended that the vendor intended to convey only half of the bungalow, which is evident from the preamble of the agreement and, therefore, the vendee cannot claim more than half of the land, whereas the respondents have claimed the entire land comprising of lawns and gardens. The above contention and also the earlier contention of Mr. J.H. Rahimtoola referred to hereinabove in fact is belied by D.W.2's admission in his cross‑examination to the effect that 'It is correct that the house consists of two independent units namely the ground floor and the first floor. Again says they are partly independent because they have common water connection. It is correct that both the units have their separate entrances and lawns'. He has also pressed into service clause (c) of section 21 of the Specific Relief Act which provides that the Contract cannot be specifically enforced if the Court cannot find with reasonable certainty the terms of the contract. In our view neither section 39 of the Contract Act nor above clause (c) of section 21 of the Specific Relief Act is applicable. Then it was contended that in terms of para. 1 of section 22 of the Specific Relief Act, this Court will be reluctant to grant specific performance of the Agreement as the circumstances under the agreement are such as to give the respondents an unfair advantage over the appellants though there might not have been fraud or misrepresentation on the part of the vendee. To reinforce the above submission he has submitted that the appellants would be deprived of the major portion of the bungalow for a meagre sum of Rs.1,00,000 and that fact is to be viewed in conjunction with the fact that the vendee was liable to pay a sum of Rs.65,000 in respect of M & lit Square transaction. He has further submitted that the respondents have filed the suit for specific performance after the expiry of about 11 years and, therefore, even otherwise equity is on the side of the appellants. On the other hand Mr. Mohammad Sharif learned counsel for the respondents has submitted that equity is on the side of the respondents inasmuch as the vendee after disposing of the quarter in which he was putting up had purchased the half bungalow at the time when the market value of the same was not very high because of the presence of a slaughter house. He has also referred to Exhs.7/3 to 7/8 to indicate the market value of the similar bungalows in the locality at the relevant time. He has also referred to the following cases: (i) S.V. Sankaralinga Nadar v. P.T.S. Ratnaswami Naddar and others A I R 1952 Mad. 389. (ii) Farid Gul and another v. Haji Gul Hassan and others P L D 1963 (W.P.) Pesh. 133. (iii) Muhammad Anwar Khan Ghouri v. Sheikh Muhammad Taqi PLD 1977 Kar. 391; (iv) Ghulam Nabi and others v. Seth Muhammad Yaqub and others P L D 1983 S C 344; and (v) Thiagaraja Mudaliar and another v. Vedathanni A I R 1933 Mad. 48. in furtherance of his submission that in the absence of any plea that the Agreement was abandoned or the vendor had changed his position to his detriment because of the alleged late filing of the suit, it is not open to the appellants to urge the above point. In this regard, it may be pertinent to refer to the admission of D.W. 2 Mohammad Aslam to the effect "it is correct that because of the existence of the slaughter house the bungalow in dispute did not have much market value at that time". We have given our serious thoughts to the above submission of Mr. J.H. Rahimtoola and in our view the equity is more on the side of the respondents. It is an admitted position that the vendee after disposing of the house in Muslim League Quarters purchased the half bungalow in question in 1969 at the time when the slaughter house was situated in the locality and, therefore the bungalow had not much value. It has come on record that though he was the President of the Sindhi Muslim Housing Society but he had not obtained any allotment of any plot in the Society. It is also an admitted position that because of the efflux of time the market price of the immovable properties in Karachi have gone up un-proportionately on the very high side inasmuch as the market price of a plot which could be purchased in 1969 at Rs.20 to 30 per square yard now would cost about Rs.1,500 per square yard. The vendor has not taken any plea in the written statement that because of the non‑filing of the suit earlier he has changed his position to his disadvantage. We may also observe that there has been no delay in the filing of the suit. The vendor has first time repudiated the agreement on 7‑4‑1977 as held by us and the suit was filed within three years from the date of refusal. We have enquired from Mr. Mohammad Sharif whether the respondents have paid the aforesaid sum of Rs.65,000 mentioned in the gift‑deed Exh.7/2 which was payable by the vendee to the vendor in respect of M & M Square transaction, his reply was in the negative. However, he has submitted that the respondents are ready and willing to pay the above sum.

11. In our view, it will be just and proper to grant the decree of the specific performance on the condition that the respondents shall pay the above sum of Rs.65,000 to the appellants with six per cent. interest thereon per annum from 14‑7‑1974 till payment. With the above modification the judgment and decree is maintained. However, there will be no order as to costs., M . B . A . / K‑60/ K Order accordingly.