P L D 1968 Karachi 723 (PLP)

13. Evidence on record shows that the plot in dispute was leased out by Edulji Dinshaw to one Mr. T. C. Advani in 1943 and he ran an open air cinema there U 1948 when he left for India. It appears that there is no lease deed in writing between the parties. However, I was referred to‑a letter Exh. 24, dated 19-8‑1948 under which Edulji Dinshaw had permitted Mr. Advani to sell his lessee's rights to defendants Nos. 2 and 3 who there after were treated as lessee. I may again add here that no lease deed in writing was executed between these parties in spite of the fact that paragraph 7 of this letter mentions that a regular deed of lease will be prepared incorporating "the above terms and conditions." Plaintiffs have relied upon Exhs. 8, 9 and 10 to prove that defendants Nos. 2 and 3 were treated as lessees and when plaintiffs learnt about their intention to dispose of the cinema they contacted Mr. Minocher. (He is fully described as Mr. M. N. E. Dinshaw) who was then managing this property. Plaintiffs wanted to purchase this plot on easy instalments basis but Minocher was not agreeable to this arrangement i.e. payment of purchase money by instalments. He had,' however, suggested to lease this property with an option to purchase it within 15years at Rs. 175 per sq. yds. Plaintiffs further contend that after this oral agreement with Minocher was made they entered into an agreement with defendants Nos. 2 and

3. It is Exh. 38/1 dated 10‑5‑1956 while the deed of conveyance Exh. 38/2 was executed on 26‑3‑57 for the purchase of cinema from them along with their existing rights in the said plot. Accord ing to the plaintiffs existing rights referred to monthly tenancy. In pursuance of this transaction, defendants Nos. 2 and 3 handed over the possession of this disputed plot to the plaintiffs on 2‑9‑1956 with permission of Minocher (vide letter Exh. 38/6, dated 2‑9‑1956). It recites that defendant No. 2 had banded over the commission to the plaintiffs in view of agreement, dated 10‑5‑1956. Thereafter these four persons namely defendants Nos. 2 and 3 along with two plaintiffs addressed a letter Exh. 19 to Messrs Edulji Dinshaw confirming the terms of the lease and option to purchase contained in their letter dated 30‑8‑1956 (Exh. 8). This letter is addressed by defendants Nos. 2 and 3 to Messrs Edulji' Dinshaw "in respect of the terms of lease of Plot No. 19 sheet S. P. 5 (disputed plot)." It further recites as follows :‑‑ "Apropos the cordial conversation which took places at your office on the morning of 2‑9‑1956 between your Seth Minocher N. E. Dinshaw on the one hand and Mr. G. M. Khan (defendant No. 2) and Messrs Maneckji Behramji (plaintiff) on the other, this is now to confirm that the terms of lease offered in your above letter have now been clearly agreed upon. Now therefore, in pursuance of the said Agreement and. in order to effect the transfer, you will kindly incorporate the names of Maneckji Behramji Dastur and Hoshing Mariackji Dastur in place of Mr. G. M. Khan and Begum Nur Bakht as lessees of the said plot. The latter are affixing their signature hereunder in token of confirmation of the above transfer." It is significant to note that this letter (Exh. 19) is signed by the plaintiffs also. The object of this letter was to confirm the terms of the lease dated 30‑8‑56 so that the contract made Cdally between Minocher and plaintiffs in May 1956 as stated above, evidenced by Exh. 8 and confirmed by Exh. 19 was already b part performed i.e. delivery, of the possession of the disputed plot by defendants Nos. 2 and 3 to the "plaintiffs with the consent and permission of Messrs Edulji Dinshax through Minocher. Mr. Minocher bad endorsed on the letter Exh. 19 (vide Exh. 42/33) that the lease in terms of Exh. 8 should now be made in the name of the plaintiffs but for reasons not known to the plaintiffs his instructions were not carried out. It is apparent from these facts that the material document is Exh. 8, dated 30‑8‑1956. At this stage I find it necessary to‑ refer to its material terms. It is an agreement between defendants .Nos. 2 and 3 with Messrs Edulji Dinshaw for renewal of `ease of this 'plot for further period of 25 years with effect from 16‑8‑1958 when the existing lease period expired. It clearly recites that "main terms and conditions as arranged personally." Plaintiffs had therefore urged before me that all the material terms as well as conditions about the renewal of lease had been finally settled by them. Paragraph 1 refers to the period while para. 2 deals with rent and it lays down that:‑ "The rent payable by you will be at 5% on the value of the plot at Rs. 175 per sq. yd. amounting to Rs. 1,985." It further provides that all taxes and assessment would be payable by defendants Nos. 2 and 3, I' may further add here that the monthly rent has been increased. Under para. 3 defendants Nos. 2 and 3 have been granted permission to erect buildings on this plot while para. 4 deals with default clause in payment of monthly refit. They have been given option to purchase this plot. The relevant passage may be reproduced here with some advantage. "You will have the option to purchase the above‑mentioned plot within a period of 15 years from 16‑8‑1956 at Rs. 175 per sq. yd. i.e. on a total price of Rs. 4,76,

700. The said option if not exercised within the period of 15 years will stand automatically cancelled." Para. 5 also appears relevant for our purpose and it reads as follows:‑ "A regular lease deed will be executed by us on other terms and. conditions as may be advised, by our legal advisers, cost of which will be payable by you. The lease would be in favour of yourself, your successors and assigns." In paragraph 7 .it is laid down that all dispute would be settled by arbitration and defendants Nos. 2 and 3 were asked to confirm these terms. This letters is signed by J. H: Dinshaw (Julin who is said to be attorney of defendant No. 1), as well as by Mr.' Dingo Mal, the learned counsel for the defendant No.

1. It is on the basis of this paragraph 5 that defendant No. 1 has contended that the contract between defendants Nos. 2 and 3 with defendant No. 1 was unconcluded as further terms and conditions had yet to be settled and secondly that plaintiffs are not parties to this contract. It was further urged on behalf of defendant No. 1 that attorney of defendant No.1 had powers to lease out this plot and pot to sell it. All these arguments are without merit as defendant No. 1 has made innumerable admissions and acknowledgments both in oral and in writing. Apart from it in part performance of this agreement plaintiffs were put in possession of this disputed plot by defendants Nos. 2 and 3 with the consent of Mr. Minocher. 'He had not raised this objection in his litigation and consequ ently he is estopped from raising this objection at this stage. Plaintiffs had urged before me that for more than 7 years this objection was not raised by defendant No.

1. In fact he had relied upon Exh. 8, treated the plaintiffs as lessees and filed the litigation against them.

14. All these facts and the documents referred to above have been stated by the plaintiffs in their plaint vide paras. 3 to

7. Defendant No. 1 started the litigation for the first time in 1960 when Suit No. 47/60 was filed by them against the plaintiff for their ejectment mainly on the ground of alleged non‑payment of rent. Their prayer for ejectment was refused and consequently L.P.A. 15/62 was filed by them and this appeal was also dismissed. Paragraph 12 refers to the statement made by Maneckji (Agent of defendant No. 1) made on 26‑9‑1961 in the above stated suit and it is reproduced with some advantage:‑‑ "In view of the breach committed ‑by .the defendants we are not prepared now to execute the lease deed contemplated in Exh. 5 (it is marked Exh. 8 in the present suit)." , . Then second Suit No. 122/62 was filed by defendant No. 1 in this Court for the ejectment of the plaintiff followed by ejectment proceedings (No. 2976/63) before the Additional Civil . Judge and Rent Controller, Karachi. Issue No. 5 is based on the plea raised by defendant No. 1 in paragraph 4 of his written statement which recites that there was no "no concluded agreement of which specifically perfor mance can be claimed or granted." Paragraphs 10 to 16 refer to the facts already mentioned. According to him plaintiffs had failed to pay their rent as well a9.taxes and consequently he had to approach this Court . against them. He had further pleaded that he was not party to two agreements of 26‑3‑1957 and 10‑5‑1956 between defendants 2 and 3 and plaintiffs. In support of these pleas defendant No. 1 has relied upon various documents to which I will ‑presently make reference. The first documents Exh. 24, dated 19‑8‑1948 is a letter signed by Edulji Dinshaw and is addressed to the first lessee namely T. G. Advani. Mr. Dingo Mal bad pointed, out to me that this letter is signed by Edulji Dinshaw and secondly, that paragraph 7 clearly lays down that a regular deed of lease will be prepared incorporating the above terms and conditions. Second document is Exh. 38/14, (dated 1‑7‑49) which is an unregistered lease deed between defendant No. 1 on one hand and defendants . Nos. 2 and. 3 an the other. It recites that agreement had been made through Julian Hoshing Dinshaw who is duly constituted attorney of defendant No. 1.. Annual rent is fixed at Rs. 4,

800. Para. 3 permits the lessees to run their cinema and cafe on this plot While para$raph.8 lays down that the monthly rent must be paid punctually. I was then referred to notice Exh. 42/22, dated 22‑12‑1949 from K. M. C. It is addressed to Khurshed Bai, Hoshang Nadir and other members in, respect of Municipal taxes. Exh. 42/23 is the bill while Exhs. 40/4 and 43 are extracts from Property Register. According to Mr. Dingo Mal, power‑of‑attorney Exh. 42/l; dated 6‑3‑1958 executed by defendant No. 1, nominating and appointing Hoshang Nadirshaw and Julian Dinsbaw as attorneys, empowered them to manage this property and not to sell it. With regard to agreement Exh. 38/1 dated 10‑5‑1956, he had urged before me that the letters referred to in paragraph 7 have not ‑ been produced. Exh. 42/39 refers to the terms offered by Mr. Minocher. It is dated 11‑5‑1956. Contention of the plaintiffs is that they had met late Mr. Minocher a day earlier and have got assurance from him but Mr. Dingomal had argued before me that defendant No. 2 had not been examined to prove this document. Mr. Minocher who is the party to these terms is not alive. Mr. Dingomal had urged before me that late Mr. Minocher was a great business man and was Director of several concerns and it was not believable that he would have given such assurance to the plaintiffs a day earlier. In support of this argument he had again referred to Exh. 8, dated 30‑8‑1956 and pointed out that J. H. Dinshaw had requested defendant No. 2 in this letter to confirm the terms of lease mentioned in this letter. I have failed to appreciate this argument advanced by Mr. Dingomal. Story given by plaintiffs appears to, be natural, and it is supported by plaintiff No. I and un-contradicted by defendant No. 1. plaintiff No. I had stated on oath that they would have never entered into an agreement with defendants Nos. 2 and 3 in case this assurance had not been given to them, by Minocher a day earlier. This statement appears to be plausible and therefore believable. Unless the landlord had agreed and given such assurance plaintiffs would not have entered into such agreement with defendants Nos. 2 and 3 who were the lessees of this plot. With regard to Exh. 19 (dated 14‑9‑56) which is a very material document Mr. Dingomal had urged before me that this letter was received by them on 9-10‑1957 i.e. one year after this letter was written. On the other hand plaintiffs have alleged that this letter was delivered to the plaintiffs in October 1956. In support of this argument I was referred to paragraph 6 in plaint in Suit No.. 47/60 which recites that this letter was received by them on 9‑10‑1957.' Exh. 38/22 is the written statement filed in that suit by the present plaintiffs. It is paragraph 6, which refers to the contents of paragraph 6 of the plaint and 'which are not denied. With regard to Exh. 8 which is a very material docu ment Mr. Dingomal had urged before me that this letter is not addressed to the plaintiffs and therefore they are strangers to this agreement. According to him these were the proposals or terms offered by attorney of defendant Nos. 1 to defendants No. 2 and 3 who were requested to confirm these terms and therefore these terms could be accepted by them and not by the plaintiffs. He had further urged that on the basis of this document defendant No. 1 could not ' have sued the plaintiffs. He had also urged ber‑r6 me that even if Exhs. 8 and 19 are taken into consideration together there is no complete contract. This argument is based on that Exh. 8 is subject to two con ditions (vide paragraph 5) secondly lease deed was to be prepared and executed and lastly that other terms and conditions which were to be advised by the legal adviser had yet to be determined. In support of the argument he had referred me to certain reported cases (English as well as Indian cases). This is in nut‑shell the case of defendant No.

1. Plaintiffs on the other band have mainly relied upon innumerable admissions and acknowledge ments made by defendant No. 1 treating them as lessees. I have already referred to Exh. 19 in this respect. It confirms Exh. 8 and is signed by plaintiffs also. Endorsement on this letter is Exh. 42/33, dated 10‑10‑1957 which clearly shows that Minocher had signed this letter and he had directed that the change be made .as requested in this letter. This endorsement made by Minocher strongly corroborates the plaintiffs' version about the assurance given to them by Minocher. It also shows that there were negotiations between plaintiffs and Minocher. Apart from this fact when these two documents viz. Exhs. 8 and 19 are read together there is a clear acknowledg ment of a concluded contract which is binding upon defendant No.

1. With regard to other terms as mentioned in paragraph 5 of Exh. 8, it was urged before me that there was no certainty that other terms and conditions would be advised by the legal adviser who in this particular case is Mr. Dingomal who represents defendant No.

1. Exh. 8 was drafted by him. It clearly recites that main terms and conditions have been decided between the parties, Another document relied upon by the plaintiffs is Exh. 35, dated 3‑12‑1957. It is a letter from D. W. Chinoy addressed to Dastur (Plaintiff) and the relevant passage in this letter may be reproduced with some advantage: "The question of the transfer of the lease to your name can only be considered after the taxes and all outstand ing rents are satisfactorily settled. Will you kindly let me have an early reply and in the meantime, thanking you." It is thus evident that no further terms and conditions were to be settled before the execution of the lease deed. What defen dant No. 1 required was the payment of taxes before this deed could be executed. Chinoy who was examined by the defendant No. 1 had stated before me "the transfer of lease to Dastur should have been made by giving them a lease deed." It clearly shows that the contract has been admitted though execution of lease deed had been postponed. Exh. 32 is a letter dated 13‑1‑1959 by Mr. Dingomal to defendant No.

2. It refers to arrears of rent and reply to it is Exh. 27 dated 27‑1‑1959. This is signed by plaintiff No. 1 and it recites that plans for the renovation of the cinema had been approved and this would be submitted to the defendant for his approval and lastly that arrears of rent would be cleared during the next month. Plaintiff (Dastur) had deposed before me that this letter Exh. 27, was sent in reply to a letter from Mr. Dingomal inquiring about the building plans. He had further added that the recital in this letter regarding arrears of rent was added by him of his own accord. In Exh. 34 rent has been demanded at enhanced rate and it is because of Exh.

8. Exh. 33 is a letter dated 28‑7‑59 from Mr. Dingomal to the plaintiffs. It recites that this plot was leased out to defendant No. 2 "who it appears has assigned the lease to you and for some time' you are running the cinema. The cinema has been demolished and you continue in occupation. The arrears of rent up. to 30‑6‑1959 amounting to Rs. 34,357‑8‑

0. This amount you have failed to pay and not speaking of taxes. I have now to call upon you to please state what you propose to do with this plot now when the building has been demolished . . . . I have therefore, to call upon you to please handover the vacant possession of the plot as well as to pay arrears of rent to avoid any unpleasant action taken against you". If the contract was not concluded as argued by Mr. Dingomal I cannot understand why he had asked for arrears of rent from the plaintiffs and had enquired from them as to how they would use the plot after the building has been demolished under the orders of Martial Law authorities. Mr. Dingomal cannot avoid this letter and argue that this contract was not final. Exh. 22 is another letter addressed to the plaintiffs on 18‑11‑1959 and is signed by

1. H. Dinshaw. It refers to the arrears of rent for over 17 months as well as non‑payment of Municipal taxes. In letter Exh. 38131, dated 3‑12‑1960 signed by J. H. Dinshaw and addressed to the Architect, K. D. A., Karachi he has stated that this plot was let out in 1956 to defendant No. 2 who subsequently "with permission of the landlord" assigned his rights to Messrs Maneckji Dastur and Hoshang Maneckji Dastur who became the lessees of the plot. This letter further supports Exh. 8 whose paragraph 5, clearly lays down that "the lease would be in favour of yourself or successors and assigns." One more letter addressed by J. H. Dinshaw to the same Architect of K. D. A. is Exh. 38/32, dated 3‑2‑1961. This letter clearly recites that the plans have been submitted to him by their lessees and he was requested not to entertain any application "unless the same were signed by him as being a duly constituted attorney of the owner." It further recites that tenancy' of the plaintiffs had been terminated and a suit had been filed for their ejectment in this Court. Plaintiffs in support of this version have relied upon this litigation started by defendant No.

1. In the first lace there is Suit No. 47/60 and its plaint is Exh.

17. Plaintiffs were sued as tenants and not tresspassers. Exh. 21 is the statement made by Mr. Dingomal in that suit on 26‑9‑

61. There after defendants 2 and 3 were given up and the claim in suit was pressed against the present plaintiffs alone. This could not be done unless the plaintiffs were treated and recognised as lessees of the plot. They have also relied upon the findings given in that suit by Qadeeruddin Ahmed, J., Exh. 14 is memo. of L. P. A. (No. 15/62). Its paragraph 7 clearly recites that plaintiffs have committed breach of the terms of the agreement of lease. Paragraph 5, dealing with the facts clearly mentions "that although no registered lease was executed defendants Nos. 3 and 4 (present plaintiffs) held the premises in according with the terms and conditions contained in the aforesaid letter Exh. 5 (Exh. 8 in this case), and their acceptance Exh. 7 (Exh. 19 in this suit) under ground No. 6 defendants Nos. 1 had disputed the finding of the trial Court that present plaintiffs "withheld payment of rent and Municipal taxes till the execution of the lease deed. "This was followed by Suit No. 122/62 and the plaint is Exh.

37. Its paragraph 3 clearly mentions that defendants Nos. 2 and 3 had transferred the premises to the present plaintiffs on 30‑8‑1956 and they had agreed to occupy the above premises as tenants for a period of 25 years from 16‑1‑1956 and at other terms and conditions which were embodied in. letter dated 30‑8‑1956 sent by the plaintiff's' attorney (present defendant No. 1). Its paragraph 4 mentions that present plaintiffs continue to occupy the premises even though no lease deed was executed. Exh. 42/40 is the particulars filed in the above suit. Lastly 'I was referred to application Exh. 36 filed in ejectment proceedings (2976/63 before the Rent Controller). It is now apparent that from 30‑8‑1956 the stand taken by defendant No.1 is that Exh. 8 contains a valid and concluded agreement which is therefore binding on him as well as the plaintiffs. All this discussion shows that there are numerous admissions and acknowledgements made by defendant No. 1, that he has treated the plaintiffs as lessees. I have already discussed that there can be no other terms and conditions and even if there can be such terms and conditions this could not be in respect of the contract because the main and material conditions and terms had already been settled between the parties. What the Legal Adviser could do was to add‑ certain terms in conformity with the law. Lastly it was urged before me that plaintiffs had agreed to pay higher rate of rent because they had been given option to purchase it within 15 years. According to them Hoshang Dinshaw and Julian Dinahaw were material witnesses and for reasons known to them they have not been examined by the defendant No.

1. Part performance within the meaning of section 83, Transfer of Property Act was performed by defen dant No. 1 when the possession of the disputed plot was given to the plaintiffs and they continued to be in possession after 15‑8‑1958 with knowledge and permission of defendant No.

1. In the result I decide both these issues in favour of the plaintiffs. Findings accordingly. Issues Nos. 6 and 15.‑Contention of defendant No. 1 is that there is one contract only though two options are alleged by the plaintiffs namely (a) lease of the plot, (b) option to purchase the same. Mr. Dingomal bad urged before me that plaintiffs in this suit have given up the former option and have prayed for relief in respect of the later option only. He bad further urged before me that two principles of contract must be taken into, consideration before such relief can be granted to them and these are (1) consideration, (2) mutuality. It was also urged by him that plaintiffs have omitted to perform their part and lastly that Exh. 8 was not a contract between the plaintiffs and defendant No.

1. Conditions, precedent for exercise of sight of option according to him are: (1) further terms should have been settled first, (2) notice for exercise of option should have been given by the plaintiffs; (3) plaintiffs should have paid the rent in full; (4) plaintiffs should not have committed breach of any terms and lastly they should have paid the purchase money within the time limit fixed. He has also urged before K, me that if Exh. 8 created a contract between the plaintiffs and defendant No. 1, it was voidable and if it amounted to lease than other terms with regard to the lease must be complied with first. According to him plaintiffs had no option of purchase as lease deed has not been executed, and as they cannot separate this term or conditions they cannot exercise their option to pur chase this plot. In respect of these arguments he had relied upon provisions of section 2 of the Contract Act and certain reported cases viz. A I R 1950, F C 38 and (1957) 3 E R

75. He had also relied upon section 16, Specific Relief Act and paragraph 284 of Halsboury's Laws of England (Vol. 8). All these arguments appear to be without any merit. Evidence on record shows that plaintiffs had approached late Mr. Minocher for the purchase of this plot on instalment basis. It is thus evident that the primary object of the plaintiffs was to purchase this property outright. When late Mr. Minocher did not agree to the payment of purchase money by instalments, he suggested lease of this plot for a period of 25 years and the plaintiffs were given the option of purchasing the plot within 15 years. It, therefore, cannot be said that lease was the primary or dominant object of that agreement between the parties. A perusal of Exh. 8 shows that it is nothing but the contract for sale and lease of this plot. Its clause 4 lays down three conditions with regard to the rate, price and time of its commencement and termination Shout option i.e. it is not subject to any other condition. It does not specifically say that the plaintiffs could not make demand for sale without first obtaining a lease deed. I, therefore, agree with the plaintiffs that the option for purchase of this plot was not a condition precedent to its lease i.e. defendant No. 1 cannot claim a lease without agreeing to have the‑ option clause included in it. This option is an independent and separate matter. The prior lessees namely defendants Nos. 2 and 3 had originally lease of this plot only. They were not given the option to purchase this property. However, defendant No. 1, has wrongfully relied upon the name and form of the document (Exh. 8.) Plaintiffs had urged before me that these factors are always subordinate and subject to the substance and real meaning of the document. In respect of this argument they have relied upon certain reported cases viz., 6 M I A 411, A I R 1947 Bom. 49, A .1 R 1927 Pat. 254, 1 L R 63 Cal. 1098, A I R 1924 P C 216, A I R 1921 All. 399, A I R 1923 Cal. 694 and A I R 1949 Nag,

389. A perusal of these reported cases strongly supports this argument advanced on behalf of the plaintiffs. , I was also referred to the provisions of section 16 of the Specific Relief Act. It lays down that where a contract consists of several parts which are separate from, and independent of each other and some of which cannot or ought to be performed such part as can and ought to be performed, may be specifically enforced. The reported cases referred to above lay down that Courts must loot to the substance and not to the force of the document. With regard to the points raised by Mr. Dingomal and referred to above it was urged before me that lease and option to purchase this plot are separate. It was argued that the sole question is whether Exh. 8 makes the exercise of the right of purchases dependant upon a prior exercise of the right to obtain a lease deed. I agree with them that this document itself does not say so, i.e. exercise of option of right to purchase is dependent upon prior exercise of right to obtain a lease deed. In support of this argument it was brought to my notice that lease in favour of the plaintiffs was to commence from 16‑8‑58 i.e. the date of termination of lease with defendants Nos. 2 and

3. Exh. 8 prescribes no time or date for the execution of the lease deed, i.e. it could be executed even long after 16th August, as the contract gave assurance to the plaintiffs for the continuance of possession of this plot. Clause 4 makes the right to purchase commence two years earlier, from 16th August 1956. Plaintiffs had therefore argued before me that the execution of the lease deed was not a condition precedent to the, creation or the exercise of the right to purchase. The two rights were to begin and end on different dates and were, therefore, quite independent of each other. It was further urged that it was open to them to ask for a sale the moment the agreement was made, but they could not have insisted upon the renewal of the lease two years earlier. According to them the most conclusive considera tion is that having expressly given them a specified and definite period within which they must obtain a sale deed on pain of forfeiture of the right of purchase, defendant No. 1 could not as plaintiffs to delay the demand for the sale deed because he would have thus cut down the period allowed to the plaintiffs far the purchase of this property. The evidence of plaintiff No. 1 shows that it was late Mr. Minocher who had entered into two separate agreements with regard to lease and option to purchase this property. It is not contradicted by any evidence. Plaintiffs had urged before me that it i.e. this statement of plaintiff No. 1 is strongly corroborated by various circumstances, namely, (1) that they must have been given the assurance by landlord when they entered into a costly transaction, (2) they would not have disclosed this agreement with Minocher. (He is said to be friend of plaintiff No. 1) to defendants Nos. 2 and 3 for the reason that they would have raised the price (3 defendant No. 2 had approached Minocher for the option to purchase and better terms of lease (vide Exh. 42/39) but he could not obtain such favourable terms, (4) Exh. 20 refers to personal interview prior to agreement entered into by the plaintiffs. Their primary object was to construct hotel and cinema on this building. Exh. 8 authorises erection of building. It was, therefore, urged before me that indirectly this document supported their contention that they wanted to purchase this property by sale. In support of this argument it was urged before me that this document fixes the rate of rent (clause 2) at "5 % on the value of the plot at Rs. 175 per sq. yd. amounting to Rs. 1,985." According to them this was sort of interest on the price agreed upon for sale of this property and in view of it they were given possession as prospective purchase. They were called lessee because it would facilitate their ejectment if such contingency arose. Their right to purchase was to termi nate 13 years after the commencement of this lease. During this period, plaintiffs had to spend heavy amount on the const ruction of cinema and hotel. They had paid high price to defendants Nos. 2 and 3: Plaintiffs had, therefore, urged before me that device of lease was adopted in order to allow them to keep possession of this plot for another period of 12 years after the lapse of their right to purchase. Necessity for this alternative agreement for lease arose because plaintiffs were unable to pay the entire price at once. Reliance was placed on the provisions of sections 57, 58 of the Contract Act and section 16 of the Specific Relief Act in support of their argument that when a contract or transaction is divisible and apart of it is illegal, void or unenforceable for any reason the unobjectionable part is upheld and enforced. With regard to consideration it was alleged that rent was consideration for lease while price of the land viz. Rs. 4,76,700 was the consideration for the exercise of the option to purchase this plot. This argument is not without any merit. It was further urged before me that there was no question of the agreement Exh. 8 being cancelled, it is only the lease which could be terminated in case of default of payment of rent for two months and this too after the execution of the lease deed and the option to purchase is not subject to any condition except that it will automatically lapse if not exercised within 15 years from 16‑8‑1956. I also agree with the plaintiffs that option is to be exercised by one party alone. It cannot be the option of all the parties, otherwise there will be no contract as no party will be bound to implement it. There is also mutuality because if the plaintiffs demanded sale defendant No. 1 could make a demand for the price. In this respect plaintiffs have relied upon reported cases viz.. A I R 1923 Bom. 75, A I R 1948 All. 125 and A I R 1956 Cal.

92. In the result I decide both these issues in favour of the plaintiffs. Issue No. 12.‑‑‑Paragrapbs 15, 18 and 26 in the written statement of defendant No. 1 deal with the objections in respect of which this issue has been settled., These allegations, in brief are:‑ (1) Plaintiffs failed to conclude lease with defendant No. 1 or his attorney. (2) Lease deed was neither executed nor registered. (3) Other terms and conditions referred to in the letter o1 30‑8‑1956 (Exh, 8) were not settled. (4) Plaintiffs failed and neglected to pay rent as well as to carry out even the terms offered to them. Allegation regarding non‑payment of rent is again repeated in paras. 18 and

26. When D. W. 2 was cross‑examined with regard to pro visions which have been breached by the plaintiffs he had replied. "The terms and conditions not complied by the plaintiffs are: (1) that the rent was not paid by them, (2) other terms were still to be finalised between the parties and that had not been done so far." During the course of arguments the learned counsel for defendant No. 1 (Mr. Dingomal) had mention two further or additional breaches committed by the plaintiffs and these are: (1) plaintiffs' failure to allow defendant No. 1 to take possession of the plot on their default to pay two months rent, (2) they submitted plans to the K. D. A. for approval without the previous approval of the landlord in writing. 1n brief the breaches committed by plaintiffs are (1) failure to pay rent, (2) carry out terms of Exh. 8, (3) failure to execute lease deed. In support of these allegations it was urged before me that no offer was made by the plaintiffs to pay the rent, (2) attitude of plaintiff No. 1 was that of a despe rate person, (3) prior litigation between the parties including the application filed under Order XL, rule 1, (4) that rents have been paid till July 1958 with the result that defendant No. 1 had approached the Rent Controller, (5) that rent has been deposited at the rate of Rs. 538 and not at Rs. 1,985 though plaintiffs were bound to deposit it at the contracted rate. In support of this argument Mr. Dingomal had referred me to several reported cases and these are; A I R 1965 Cal. 45, 28 P C 208, 1930 Pat. 121, 1933 Bom. 71, A I R 1952 Nag. 220, A I R 1954 Trav. Coch. 440 and A I R 1964 Cal.

556. In order to meet these objections plaintiffs had urged before me that the alleged breaches are in respect of payment of the rent which relates only to the contract for lease and not for sale which is the main relief asked for in the present suit. If the alleged breaches are proved plaintiffs may have dis‑entitled themselves of the lease and nonetheless they are entitled to purchase under the option clause. With regard to submission of plan to the K. D. A. (Exh. 8) clearly lays down that plaintiffs could erect buildings on this plot "in accordance with plans to be approved by him in writing and to be approved by all parties before the commencement of the work." It is thus evident that Exh. 8 nowhere lays down that the plans were to be submitted for the approval of the landlord first. What it lays down is that 'his approval must be obtained before the com mencement of work. Admitted position is that no work bad yet commenced and for that defendant No. 1 is primarily liable. Plain tiffs bad submitted the plans for the approval of the K. D. A. but defendant No.1 asked them not‑ to grant such an approval because lease had been terminated and secondly a suit bad been filed in this Court. Apart from it, this alleged breach has not harmed or prejudiced the interest of defendant No, 1.. Trival breaches cannot deprive the plaintiffs of their right of specific performance. In support of this argument plaintiffs have relied upon 1926 Ch. D

92. Another allegation made during the argument was that plaintiffs did not allow the landlord to take possession. There is no evidence on record to support it, i.e. the landlord asked for possession or came to the site for its possession and plaintiffs obstructed him. Previous litigation shows (vide Suit No.47/60) that defendant No. 1 had ap proached this Court for the ejectment of the plaintiffs. In that suit, prayer for ejectment was refused because ft was held that no default had been committed by the plaintiffs. Landlord is entitled to demand 'possession if both in fact and in law default in payment of the rent had been proved by him. With regard to allegation No. 1 referred to above, this question has been dealt within connection with Issue No.

5. Plaintiffs had rightly urged before me that if there is no contract there cannot be any breach of it. With regard to non‑execution and non‑registration of the lease deed I agree with the plaintiffs that it amounts to admission of their claim. Exh. 8 (clause 5) clearly lays down that a regular lease deed would be executed by defendant No.

1. Apparently defendant No. 1 is to be blamed for its non‑execution. Plaintiffs can ask for execution and the refusal by defendant No. 1 would give right to them for specific performance and they have done it in this suit. Third allegation is in respect of non‑settlement of other terms and conditions referred to in Exh.

8. Apparently this is another admission of the plaintiffs case. These terms were to be settled by the legal Adviser of defendant No. 1 and he alone could do it. There is nothing on record to suggest that this Legal Adviser bad suggested any terms which plaintiffs had refused to agree. The material allegation is with regard to non‑payment of rent. As already pointed out this would affect the plaintiffs right in respect of the lease and not in respect of his option for the purchase of the plot in dispute. In their lengthy arguments plaintiffs have tried to show that they have not committed any breach and if there is any such breach it has been condoned by defendant No.

1. They have also relied upon the decision given in Suit No. 47/60. Where it was held that plaintiffs were justified for withholding payment. In view of these findings it was urged before me that this question is now res judicara between the parties and cannot be agitated between them. Lastly it was urged that since this suit is for an equitable relief and is to be decided on equitable principles the foremost of which is "he who comes to equity must do equity; he who comes to equity must come with clean hands." In support of it the plaintiffs have referred me to the judgment of Qadeeruddin Ahmad, J. in Suit No. 4'7/60 which enumerates a number of instances of defendant No. 1 inequitable and unjust attitude towards the plaintiffs and his own solemn contract the breach of which defendant No. 1 has complained. According to the plaintiffs, the only breach that they have made is in respect of taxes. 'It was urged by them that they were at the mercy of defendant No. 1 who had failed to execute the lease deed. In view of this position undue pressure was brought upon them to accept liability for payment of taxes amounting to Rs. 13,663‑5‑0 which, amount defendants Nos. 2 and 3 had to pay. It was observed in L.P.A. No. 15/62‑that "it will not be possible to believe that defendants Nos. 3 and 4 (present plaintiffs) contrary to the expressed evidence on record would undertake to shoulder the responsibility of defendants Nos. 1 and 2 (present defendants Nos. 2 and .3) without any purpose. The obvious conclu sions to which any body can arrive at is that defendants Nos. 3and4 (Plaintiffs were concerned with the lease of the plot for 25 years as contemplated in letter Exh, 5 (now Exh. 8) and were therefore prepared to meet the just or unjust demands of the plaintiffs/appellants, provided the lease was executed in their favour. The plaintiffs had urged before me that there was no demand for payment or threat of forfeiture or ejectment. According to them defendant No. 1 was in the habit of waiving or condoning default, as defendants Nos. 2 and 3 were also allowed to remain in arrears to tine extent of about Rs. 8,

000. This argument will not save the plaintiffs. Further it is evident that defendants Nos. 2 and 3 were responsible for the arrears of taxes as they were hi possession of this plot. They have also replied upon the finding given in L. P. A. 15/62 that taxes were not due from the plaintiffs. As regards K. M. C. dues, apparently defendant No. 1 was responsible. Lastly it was urged that soon after the execution of Exh. 8 they were deprived of the use of the property because it was demolished under the orders of Martial Law Authorities and secondly, that defendant No. 1 had refused to allow plaintiffs to build a covered cinema. According to them this amounts to their eviction as held in 24 Cal. 296 and consequ ently they were entitled to remission of all rents. They have relied upon A I R 1935 Cal.

366. Remission, abatement or suspension of rent in all cases where the tenant is deprived of the benefit of the lease property through no fault of his is equitable relief, A I R 1914 Lah.42, A I R 1948 Pat. 322 and 1917 Cal.

737. In the result I decide this issue also in favour of the plaintiffs. Issues Nos. 2 and 7.‑It is common ground that Article 113, Limitation Act applies to the facts of this case. Paragraph 19 of the plaint recites that clause of action for specific performance arose on 26-9-1961 when the defendant No. 1's agent signified the refusal on behalf of his principal to execute the lease of plot in suit as mentioned in paragraph 12 and for damages in April 1961, as referred to in paragraph 11 of this plaint. Period of limitation provided under Article 113 is three years (a) from the date fixed for performance or (b) if no such date is fixed from the date when the plaintiff' has notice that performance is refused". Exh. 8 which is material document in this suit does not mention any such date. Even defendant No.1 has not pleaded that any date was fixed for the performance of this contract. Therefore, the Court has to determine whether there was any refusal on the part of defendant No. 1 to perform the contract in suit. If so, when plaintiff had, if at all, notice of it. These are questions of fact and therefore must be determined in the light of principles laid down by various High Court at different times. The first principle which has been universally recognised is that since the laws of limitation take away rights of parties, this must be liberally construed and without doing any violence to the intention of the Legislature and lastly' this must be applied for the benefit of the plaintiff: In this connection plaintiffs have relied upon reported case$ namely, A I R 1953 Cal. 50, A 1 R 1958 Bom. 10, A I R 1960 Pun. 655, A I R 1951 All. 495 A I R 1939 Nag. 150, A I R 1938 Lah. 23 and A I R 1957 Andh. Pard,

406. Bombay High Court in the case referred to above has laid down that‑‑

"The Limitation Act deprives a party of a valuable right, and unless the Limitation Act is clear and beyond doubt, a benevolent construction favourable to the party whose valuable right is being taken away must always be given," Another case relied upon by the plaintiffs in this con nection is 9 1 C 300 (P. P. Lahore) where it was laid down that: . "Statutes of Limitation must be strictly construed and that no man is to be deprived of his rights which would belong to him unless the specific provisions of law, which are alleged to take away these rights can be shown to apply clearly and in precise terms to his case." Another rule or principle to be noted is that the refusal of the defendant to perform contract apart from being proved strictly must be clear, unequivocal and unconditional. This view gets support from a case reported in A I R 1932 Lah.

36. Accord ing to Mr. Dingomal, Article 113 presumed concluded and finalised contract and lays stress upon the date when a party had notice of performance of contract, and its refusal. Relying upon the Lahore referred to above it was urged before race on behalf of the plaintiff that they have a very strong case against defendant No.1 because when he alleged that they had forfeited their rights under Exh. 8 by non‑payment of rent and filed a suit for them ejectment, defendant No.1 must be pre sumed to have done so with the intention that if it was finally held by the Court that plaintiff have done nothing to forfeit their rights, he would abide by the decision and honour his obligation under the contract on other words defendant No.1 submitted the dispute between and the plaintiffs for the adjudication in his Court with the intention to abide by the decision in his case. In this connection reference was made to the statement made by D. W. 2 which may be reproduced with advantage: "On behalf of defendant No. 1, I was doing Patravi in all these matters. I am also aware of whatever transpired in these matters. Whatever was done it was done under my instructions." This statement was made by him after he was referred to Suit No. 471'60, L. P. A. 15/62, Suit No. 122/66 and ejectment proceedings Suit No. 2976163 before the Rent Controller. With regard to the notice (Exh. 38/ l6), dated 7‑12‑1959, which was issued before the filing of Suit No. 47/60 D. W. 2 had stated : "If the contents of any notice or letter are proved to be false, I will not only naturally withdraw it but even apolo gise . . . . This notice Exh. 38/16 and plaint in suit are based on the assumption that the contents or allegations therein are correct." Mr. S. A, Ashfaq, the learned counsel for the plaintiffs, had urged before me that the plaintiffs were, therefore, not wrong in believ ing that once the Court held that the allegations in the plaintiffs Suit No. 47/60 were found to be incorrect, defendant No. 1 would withdraw from the position taken up by him in notice Exh: 38/16 Dyad Spit No. 47-40 and would perform his part of the contract without any hesitation. It is thus apparent that the refusal in that notice and Suit No. 47/60, if it amounts refusal at ail, was a conditional refusal i.e. dependant upon the position taken up by defendant No. 1 being found to be correct by the Court. Plaintiffs had also referred me to a case reported in 1914 Cal. 155, wherein it was held that it must be proved that either there was an express and un‑equivocal refusal to perform the contract and not evasive or equivocal or what defendant No. 1 had done or said, plaintiffs did in fact receive the impression that such a refusal had been made. I was referred to the evidence adduced by the parties in support of the stand taken by the plaintiffs that their suit is within time. In the first place reliance was placed upon the evidence of plaintiff No. 1 who had stated as follows; In spite of the fact that this Suit No. (14 760) was pending I was prepared for construction in April 1961 because the question in suit was whether we have committed the breach of the agreement. The landlord had never said that he would not execute the lease deed if this case was to be decided in our favour . . . . At no time Edulji Dinshaw had refused to execute the lease deed in our favour. Question of the execution of the lease deed did not arise before the institution of this suit." This statement has not been contradicted by defendant No. 1 or his attorney. Evidence of D. W. 2 shows that it is full of evasive replies. He had admitted in his evidence referred to above that all notices and letters were written under his instruc tions and even the suits were instituted according to instructions issued by him. He has not stated in his evidence that plaintiffs were told at any time that a lease deed would not be executed in their favour. In fact his .evidence shows that the execu tion of the lease deed was postponed until payment of taxes and rent. Exh. 35, dated the 3‑12‑1957 is a letter addressed. to the plaintiffs by D. W. 2 and it clearly recites that the ques tion of the transfer of the lease would be considered after the taxes and all outstanding rents are satisfactorily settled, Further stand taken by this witness was that the contract still remained to be completed and finalised, and consequently the question about the execution of the lease deed would arise only after the contract was concluded. He had further stated before me that "lease deed would have been executed only after the terms of the lease had been finalised. Plaintiffs have never asked us to finalise the contract . . . . he never asked for an agreement of lease . . . . I still maintain today that there is no contract between the parties for giving lease to the plaintiffs." In view of these averments, plaintiffs have urged before me that it can never be contended that Exh. 38/6 or plaint in Suit No. 47/60 which were both prepared under instructions contained any refusal to perform the contract as provided under Article 113, or that any such refusal was ever made or intended to be made. It was further urged on their behalf that it must also be proved that this refusal was known to the plaintiffs. Stand taken by defendant No. I is that until 1962 he was ready and willing to execute the sale deed (vide para. 4 of Exh. 37 which is the plaint in Suit No. 122162) but when Lt. W. 2 was cross‑examined he had clearly stated that defendant No. 1 was not ready and willing to execute lease deed in favour of the plaintiff. When he was referred to the paragraph 4 of the plaint in Suit No. 122/62 he replied "this plaint was signed by Mr. Julian Dinshaw and it cannot be false. His statement I say is correct and not what I have stated today." In view of this position Mr. Ashfaq had urged before me that Exh. 38/16 and plaint in Suit No. 47/60 could not be relied upon that these two documents contain any refusal by defendant No. 1 to perform the contract. As already pointed out, Mr. Dingomal had urged before me that Article 113 presumes that contract must be concluded and finalised. When different and contradictory pleas are taken up by defendant No. 1 i.e. whether the contract was concluded or not, these two documents, I would agree with the plaintiffs,, cannot be accepted in connection with refusal alleged to have been made by defendant No.

1. Further stand taken by the defendant No. 1 is that when the lease of defendants Nos. 2 and 3 expired on 15‑8‑1958, they became monthly tenants thereafter and plaintiffs' position as assignees or sub lessees of defendants Nos. 2 and 3 was no way better. Plain tiffs had urged before me that so far as tenancy is concerned this stand is unexceptionable. According to them where there is no lease deed, a tenant can at best he only a monthly tenant. Reliance was placed by them upon the provision of section 107, Transfer of Property Act, and A I R 1952 S C

23. As defendants Nos. 2 and 3 or the plaintiffs as their assignees were holding over after 15‑8‑58, they were not tenants at all, no rent was payable by them and they were only liable to pay compensation for use and occupation. I also agree with the plaintiffs that at no time defendant No. 1 had denied his obligations under Exh. 8 or refused to execute a lease deed. He had merely postponed execution of a lease deed until plaintiffs cleared up all the arrears of taxes and rent. Mr. Dingomal had relied upon Exhs. 33 and 35 to prove refusal. Both these documents were not pleaded in the written statement, for this purpose and nor they have been referred to in evidence. It was for the first time that he relied upon these two documents during the course of arguments. In the alternative it was urged on behalf of the plaintiffs that if limitation period had commenced to run from any time more than 3 years prior to institution of present suit, bar of limitation was removed by subsequent acknowledgements by defendant No. 1 to plaintiffs' right to a lease deed. In order to meet this argument Mr. Dingomal had urged before me that his acknowledgements must not be considered as these have not been specifically pleaded in the plaint. Stand taken by Mr. Ashfaq is that the plaintiffs have not pleaded in their plaint that their suit was time barred and hence there was no occasion or necessity for them to plead these acknowledgement. As regards these acknowledgements plaintiffs had referred me in the first place to the plaint in Suit No. 47160, which admits the validity of the contract and "the entitlement of the plaintiff's to lease deed. Ejectment was sought on the assumption that plaintiffs were in the wrong. This suit was decided against defendant No.

1. Plaintiffs have also relied upon Exh. 37 dated 24‑5‑1962 which clearly recites that "the plaintiff was ready and willing to execute the sale deed." Plaintiffs have also relied upon the statement of Mr. Dingomal in Suit No. 122/62 which reads as follows: "It was due to the fault of the defendants that the lease deed was neither executed nor registered." D. W. 2 had also stated that "plaintiffs had never asked us to finalise the contract." Another acknowledgement relied upon by the plaintiffs is the statement made by Hoshang in Suit No. 122/62 and it reads as follows: " . . . during the pendency of Suit No. 122/62, 1, Mr. Julian Dinshaw and Mr. Dingomal had several meetings for settling matter outside the Court. My right to the lease of the property had not been cancelled by the other two and I was offered money in case I would forego my lease right . . . . it is not correctly recorded that my right in the lease had (not) been cancelled but what 1 had said was that my rights to lease were acknowledged by the others too." It was therefore argued on behalf of the plaintiffs that this negotiation and offer of money to plaintiffs in lieu of their giving up the rights of the lease amounts to implied acknowledgement of their rights. Reliance was placed by them on P L D 1961 Kar.

599. With regard to delay in fling this suit defendant No. 1 has not proved that plaintiffs had abandoned their right or they are guilty of lathes (A T R 1949 Mad. 265 and 1930 P C 165). In this particular case defendant No. 1 himself is responsible for all this delay. He kept on postponing the execution of the lease deed until 1959 for the only reason i.e. non‑payment of taxes add rent. Thereafter he started prolonged liti gation. Consequently plaintiffs had to wait to file this suit. Lastly it was urged that all these arguments have been advanced with regard to their prayer for the execution of lease deed which prayer they have made in the alternative. Their main prayer is for sale deed. According to them the contract i. e. Exh. 8 provides three choices; (1) lease; (2) sale, (3) lease first and then sale. It was, therefore, urged that they could ask for sale in the first instance. Even if the relief for lease is barred by time the claim for sale is manifestly not time barred. Section 16, Specific Relief Act provides that an inde pendent part of a contract may be enforced if the other part cannot be specifically enforced. Clause 4 of Exh. 8 gives right to the plaintiffs to ask for sale at any time within 15 years from 16‑8‑1956 and therefore, this suit is within time. In the result I decide both these issues in favour of the plaintiffs. Issues Nos. 3 arid .p.‑Former issue was settled at the instance gal' defendant No. 1 who had pleaded in para. 3 of his written statement that the suit "is also incompetent and misconceived being barred by res judicata having regard to judgment and decree in Suit No. 4'7/60 of this Honourable Court." Plaintiffs are of view that no suit can be barred as res judicala under section 11, C. P. C. but only matters, questions or issues involved in suit may be res judicata and consequently Issue No. 9 was raised. . According to them Suit No. 47/60 was for rent and ejectment and it had assumed the relationship of lessor and lessees between the parties. The perusal' of judgment in that case shows that this suit was not at all concerned with the enforceability or validity of any contract to lease the property which may have existed between the parties. Therefore, the whole question in that suit was whether the present plaintiffs were lessees of defendant No. 1 and if so on what terms. Second factor to be noticed about the former suit is that defendants Nos. 2 and 3 In the present suit who were impleaded as defendants in that suit and same reliefs were asked for against them as well were subsequently given up by Mr. Dingomal, "in view of the statement of counsel" (vide Exh. 26). This view of Mr. Dingomal has been disputed by the plaintiffs and they have referred me to statements Exhs. 21, 16 and 38/23. Exh. 21 refers to the admission made by Mr. Dingomal that all the three parties had consented to the arrangement set out in Exh. 8 and "in pursuance of this letter defendants Nos. 3 and 4 (present plaintiffs) were to be substituted as tenants in place, of defendants Nos. I and 2 (Khans)." This statement clearly shows (a) that the rights of the Khans under the old arrangement (Exh. 24) extending up to 16‑8‑1958 had been transferred to the plaintiffs with the consent of defendant No.1 and (b) that the arrangement set out in Exh. 8 had been made between plaintiff and defendant No. 1 as well. On this admission plaintiff had no right to suit against defendants Nos. 1 and 2 but Mr. Dingomal made a statement that "the plaintiff would be satisfied with a decree as prayed against defendants Nos. 1 and 2 or defendants Nos. 3 and 4 (present plaintiffs) who may be found to be liable and in possession of the premises." In view of this statement Khans could not he made liable as they had handed over possession to present plaintiffs on 2‑9‑1956 and they' were responsible for the performance of the terms of the tenancy. Plaintiffs had disputed their liability (vide Exh. 38/23). After Khans were given up that suit must be treated as having been insti tuted and relief claimed against the present plaintiffs only. The basis of the claim in that suit was that the present plaintiffs were liable to pay rent i. e. they were the lessees, in accordance with the terms of Exh. 8 and, therefore, it was necessary for the Court to have determined whether that document created the relationship of the Lessor and Lessee. Consequently Issue No.1 in that suit wits settled wherein Exhs. 5 and 7 (in that suit) created a valid and binding lease. View taken by defendant No. 1 is that parties in both the suits are same and so is also the subject‑matter i.e. property. According to Mr. Dingomal reliefs claimed sin both the suits are identical. In support of this stand he had referred me to plaint (paragraphs 5 and 12) written statement (para. 5) in Suit No. 47/60. He bad also referred the to Issues Nos. 1 and 2 as well as the judgment. As regards the legal aspect he has relied upon explanations Nos. 1 and 3 to section 11, C. P. C. and the case reported in A I R 1930 P C

22. According to him plaintiff No. 1 (H. Dastur) knew the findings given by the trial Court in Suit No. 47/60. This view of defendant No. 1 is strongly criticised at great length on behalf of the plaintiffs. Accord ing to them, the whole case of defendant No. 1 as the plaintiff in the former suit had no basis as present plaintiffs could not be treated as lessees under Exh. 8 and no term of the proposed lease could apply because these terms were to come into force and become binding in future i.e. after the execution of the proposed lease deed e. g. plaintiffs had premised to pay Rs. .1,985 instead of Rs. 538‑4‑0 because they were going to acquire the right ; (1) to keep the land for 25 years and (2) to erect building on it. These rights could accrue to them only through the registered lease deed. Consequently they were not liable to pay any rent under Exh. 8; their liability to rent. would also have commenced on the execution of the lease deed. The only provisions in Exh. 8 which came into .force immediately were the opening para. and clause 5 but the trial Court in Suit No. 47/60 was not called upon to enforce them. The learned counsel for the plaintiffs bad therefore urged before me that answer to Issue No.1 in Suit No. 47/60 was thus obvious. He had also referred to the findings given on Issues Nos. 2 and 3 in that suit. According to him additional terms to which the learned Judge in that suit had made reference were irrelevant, and it was relied upon only as additional circumstance as there was no issue to this effect. According to them therefore the only matters resjudicata between the parties in consequence of Suits Nos. 47/641 and L. P. A. 15/62 are (1) Exhs. 8 and 19, do not constitute a valid binding lease though they constitute an agreement as urged by defendant No. 1 himself in Suit No. 47/60 from which present plaintiffs derive their rights, (2) until defendant No. 1 executed the lease deed in accordance with the agreement (Exh. 8) he cannot ask plaintiffs to pay the Municipal taxes or rent at the enhanced rate of Rs. 1,985. (3) Plaintiffs were justified in withholding payment of rent even at the old rate of Rs. 538‑4‑0 because of the action of defendant No. I in not executing the lease deed referred to is para. 5 of Exh.

8. In support of this stand plaintiffs have referred me to Explanation 3 of section 11, C. P. C. which reads as follows: "The matter above referred to must in the former suit have been alleged by one party and either denied or admitted expressly or impliedly by another." It was neither alleged nor admitted or denied by either party in Suit No. 4.7/60 that "there were no settled and final terms of the lease deed." 'They had further urged before me that even if the observations made by the trial Court in the former suit could possibly be described as the finding it can have no effect in this suit, because even the decision of the Court on a point not put directly and substantially in issue cannot operate as rer judicata in a subsequent suit. A I R 1728 Nag. 189, 1931 Cal. 15 3 and 1 L II 26 Cal. 4213. According to the plaintiffs rebel's sought in the two suits are absolutely different. In this connection reference was made to the issues settled in these two suits. According to them res judicata is the decision itself and not any reason advanced in support of it. Reliance is placed upon cases reported in A I R 1954 Cal. 8, (1919) 1 K B 328 (1926) A C 94, A I R 1949 Cal. 430, 1928 Cal. 777, 1949 Cal. 430 and 1941 Cal. 289. "They have also relied upon the case reported in A I R 1929 Lah. 833, by way of reply to the suggestion made by defendant No. 1 that the additional reason for the plaintiffs might have been put forward by them as a justification for withholding payment of rent. In the result I hold that the three matters referred to above only are res judicata. Both these issues are disposed of accordingly. Issue No. 13.‑Under clause 3 of Exh. 8 permission was given by defendant No. 1 to the lessees "to erect buildings on the aforesaid plot in accordance with the plans to be previously approved by him in writing and to be approved by all the parties before the commencement of the work." Plaintiff No. 1 had stated on oath before me that they had got the plans prepared to put up an air‑conditioned cinema and hotel. His evidence further shows that this work of preparing plans had first been entrusted to an architect by name Mr. Mistry in 1957 and later on to another architect, namely, Mr. Misbahuddin, that he had shown the plans to Eddie Dinshaw and lastly that those plans were approved by 1C. D. A. on 28‑11‑60 (Exh. 38/4). He is supported by S. M. Tahir (D.W. 1‑‑K. M. ‑C. official). His statement that an application for approval of the building plans was filed on 2‑4‑60 is not correct. This date does not appear on the applica tion. At a later stage this witness had to admit that he could not say if any application was filed before this date. He had proved the receipt Exh. 40/7, dated 27-4‑1959. All this evidence is not controverted by defendant No. 1, Exh. 27, dated 27‑1‑59 supports the plaintiff that application for plans must have been filed before 27‑4‑

59. This letter clearly recites that plaintiff No. 1 had informed Mr. Dingomal that he was expecting the approval of the building plans soon. It is, therefore, estab lished that plaintiffs bad filed such application before January 1959, and the requisite approval was granted on 28‑11‑

60. Lastly D. W. 1 has proved that the plans sanctioned were in respect of hotel and a cinema. In view of this posi tion first part of this issue is decided in favour of the plaintiffs. With regard to the latter part of this issue plaintiffs had urged before me that there was no question of any right or autho rity to apply for that permission. According to them any body in possession or occupation of this plot could apply for such permission which would be subject to the condition "provided this does not entitle you to build on land not lawfully yours." (Exh. 38/4). It was because of this document that K. D. A. had informed Julian (Exh. 40/5). Later on K. D. A. informed plaintiffs "not to start any construction . . . till the matter is finally decided by the Court of Law (Exh. 38/ 5 dated 28‑3‑61). It may be due to the influence of Julien Dinshaw. With regard to plaintiffs right to apply for permission it was urged before me on their behalf that this question did not arise. There is no law according to them to prevent any body believing himself entitled from applying for such permission. The landlord could raise objection when the construction actually started. This view gets support from Exh. 8 which only lays down that ‑no building shall be constructed without the previous permission of the landlord. It does not lay down that no application for permission to construct could be made. I have already referred to the un‑contradicted statement of plaintiff No.

1. Plaintiffs had referred me to Exh. 38/24, Exh. 12 and Exh. 38/15 in order to support their view with regard to clear acquiescence by conduct on the part of defendant No.

1. Even Mr. Dingomal had been informed by plaintiff No. l that the building plans had been submitted to the K. D. A. and further that approval was expected shortly. No body either Mr. Dingomal or Eddie Julien or Hoshang Dinshaw had raised any objection. Apart from this acquiescence on part of defendant No. 1, Exh. 8 (para 3 provides that lessee would erect buildings on the aforesaid plot. It was confirmed by Mr. Dingomal (vide Exh. 21). In the result I decide this issue in favour of the plaintiffs. Issue No. 14.‑Main contention raised on behalf of defendant No. 1 is that plaintiffs had no money for raising this construc tion. Right of the plaintiffs of construction on this plot cannot be disputed in view of their agreement with Minocher. State ment made by plaintiff No. 1 in support of it remains un- contradicted. According to Exhs. 20 and 38/15 his statement could have been contradicted by Eddie Dinshaw' but for reasons best known to defendant No. 1 he was not examined. Clause 3 of Exh. 8 supports plaintiffs as it lays down that they had permission to erect buildings on this plot. Evidence on record shows that this plot was taken whether by sale or on lease for the express purpose of putting up' a cinema and a hotel thereon. Assurance was given to the plaintiffs and they had invested huge amount on it. So far permission is concerned it would be either obtained from the authorities or defendant No. 1 himself. As regards the former, clause 3 of Exh. 8 means that defendant No. 1 would not be in any way responsible if the plaintiffs were refused such permission. Evidence on record shows that plaintiffs had obtained such permission. Defendant No. 1 could not refuse permission as it would amount to frustration of the entire purpose of the agreement. In para. 22 of written statement defendant No.1 has pleaded that no notice was given to him that plaintiffs wanted to start building. According to plaintiffs this allegation is falsified by document. Exh. 38/16, Exh. 27, Exh. 38/24, Exh. 12, Exh. 20, Exh. 42/6, Exh. 33, Exh. 38/15, Exh. 22 and Exh. 38/10 were referred to by the plaintiffs in support of, their stand that such notice was given to the defendant No. 1, secondly that they had spent money and time on obtaining approval of the plans by the autho rities and preparations for the construction of these two build ings. Even the plans were shown to Eddie. According to the state ment of plaintiff No. 1 all this evidence has not been rebutted. In the result I decide this issue in favour of the plaintiff's. Finding accordingly. Issue No. 8.‑Two witnesses Muhammad‑Anwar and Basheer, D. W. 2 and D. W. 3 have been examined by the plaintiffs in support of their case. Their evidence does not appear to be satisfactory. Various factors must be taken into consideration in connection with claim of the plaintiffs for damages. So far hotel is con cerned there is no guarantee that all the rooms would be occupied by the guests throughout the month. It would also depend upon number of rooms and guests who occupy. Similarly seats in the cinema hall may remain vacant because of lack of interest in the picture by the people. Sometimes the cinema hall may be over‑crowded and again it would depend upon the picture. However, I agree with the plaintiffs that they were prevented from constructing these two buildings due to wrongful act of defendant No.

1. I have already pointed out that permission to construct buildings was granted to them after the plans submitted by them were approved by K. D. A. (Vide Exh. 38/4, dated 28‑11‑1960). But before they could start construction work this permission was suspended by the K. D. A. and the plaintiffs have blamed Julien for it (Vide Exhs. 40/3, 38/31, 40/5, 38/32 and Exh. 38). I have already pointed out that there is nothing in Exh. 8 or any other law which prevented plaintiff s from obtaining sanction from the K. D. A. before the execution of the lease deed in their favour. Defendant No.1 was bound to give his approval. Case reported in P 'L D 1960 Kar. 616, strongly supports the stand taken by the plaintiffs. With regard to the quantum of damages as already pointed out they have relied upon the evidence of P. Ws. 1 and

2. According to them both are independent witnesses and they have ample business experience. P. W. 2 had deposed before me that the income of the proposed cinema would be Rs. 13,000 to Rs. 14,

000. No reasons are given by him. I have already pointed out that income from cinema would depend upon the nature of the picture that is exhibited there. It may or not be popular with the people. As regards hotel evidence P. W. 3 shows that net monthly, income would be Rs. 20,

000. He was cross‑examined at some length by Mr. Dingomal. I have already referred to several factors upon which income from a hotel would depend. Main contention raised on behalf of defendant No. 1 is that plaintiffs had no sufficient funds to raise this construction. This plea is without any merit. If plaintiffs had no money for which there is no sufficient evidence on record, they could have borrowed and obtained financial aid from various resources. Apart from these facts it would not bar the claim of the plaintiffs. What the plaintiffs have to prove is their ability to find the necessary funds. Reliance was placed by them on a case reported in P L D 1960 Kar.

122. They have claimed a sum of Rs. 6,20,000 by way of damages for the period of 31 months from April 1961 to 31st October 1963. As they have failed to prove this amount I allow a sum of Rs. 1,55,000 by way of nominal damages. In addition to it they have claimed Rs. 20,000 per month as further damages from date of suit till execution of lease deed. There is no sufficient proof of it. However, I allow the sum of Rs. 5,000 (Rs. 3,000 per mensem from hotel and Rs. 2,000 from cinema by way of nominal damages. Finding accordingly. Issue No. 4.‑No specific allegations have been made by defendant No. 1 how this suit is champertous and consequently this issue does not call for any detailed discussions. During his argument Mr. Dingomal had urged before me that there were strong circumstances to prove these allegations. No refer ence was made specifically to these circumstances. ' Mere fact K that plaintiffs are poor people or were being financed by others would not prove that the suit is champertous. This issue is therefore decided against defendant No.

1. Issue No. 16.‑Decree shall therefore follow against defen dants Nos. 1 and 7 for specific performance of the contract for lease dated 30‑8‑1956 with option to purchase the said plot and for a sum of Rs. 1,55,000 in addition to monthly damages at the rate of Rs. 5,000 per mensem from date of suit till execution of lease deed. Defendants Nos. 1 and 7 to bear the costs of the plaintiffs. Suit against other defendants is dismissed with no order to costs. A. E./K.B. A. Suit decreed.