Payment of earnest money

2017 YLR 2459 KARACHI-HIGH-COURT-SINDH Judicial Precedent

Ss. 12 & 27(b)Suit for specific performancePayment of earnest moneySubsequent transferee entering into agreement with vendorKnowledge of earlier agreementElement of good faithScope

Plaintiff/respondent contended that Appellant/subsequent transferee had knowledge of agreement between plaintiff and defendant so his entering into agreement with vendor/defendant was not in good faith

Appellant/subsequent transferee contended that first Appellate Court had erroneously reversed the decree and judgment of Trial Court

Validity

Plaintiff of the suit had repeatedly sent notices and letters to defendant expressing his readiness to pay the balance amount within stipulated time in the agreement and requested the vendor to perform his part of contract by delivering possession of the suit property along with its original title document as per terms of contract

Evidence adduced by the plaintiff in that behalf appeared to be confidence inspiring and corroborated by the documentary evidence which had not been refuted by the other side

Evidence showed that the agreement to sell and purchase of the property in question was signed by the parties and the cash amounting to Rs. 1,00,000/- only handed over to the vendor being part payment of total sale consideration, in lieu of receipt

Payment of Rs. 4,00,000/- was offered to the vendor as per terms of agreement and request of plaintiff for performing his part of contract had been made part of record of the Trial Court during the course of recording deposition

After purchase of property in question by the appellant/subsequent transferee could not be sanctified for the reason that the same was subject matter of an intact agreement of vendor to sell it to the plaintiff for total consideration of Rs.5,00,000/- out of which the vendor had received Rs.1,00,000/- as earnest money from vendee/plaintiff

Having conscious knowledge of the said agreement, being resident of the same vicinity and taking into consideration the dictates of fair-play, the appellant should have refrained from entering into agreement with the vendor for purchase of the property and that too in exchange of almost same amount of consideration that was previously agreed between plaintiff and vendor conjointly

If the appellant had no knowledge of the agreement reached between the parties, even then, instantly after acquiring such knowledge the appellant should have annulled the transaction

Appellant, during course of trial had not adduced evidence for negating the factum of having conscious knowledge about agreement between the vendor and the vendee to sell/purchase the property in question

Appellant had thus failed to discharge the onus and remained unsuccessful to prove his version, which he ought to have squared during the course of trial to show that the agreement by him to purchase the property in question was out-come of good faith

Findings recorded by the first Appellate Court, therefore, did not call for interference by the High Court

Second appeal was dismissed accordingly.