' This civil revision petition is filed against the judgment of learned Additional District Judge, Pattoki, dated 2-7-2004 that upholds the earlier order dated 23-12-1998 passed by the learned Civil Judge, Pattoki rejecting the plaint in the suit for specific performance filed by the petitioner/plaintiff on application under Order VII, rule 11.
2. The petitioner's suit is for specific performance of agreement to sell, dated 31-5-1990 executed by the respondent No,1 ("vendor") in favour of respondents Nos.2 to 4 ("first vendees") in respect of land measuring 65 Kanals, 7 Marlas situated at Lakhankey Bhangor, Tehsil Pattoki, District Kasur providing for completion on 16-8-1990. Interestingly, the petitioner is not a vendee in that agreement but claims to have acquired rights thereunder pursuant to a second agreement to sell dated 14-8-1990 executed in favour of the petitioner by the first vendees, namely, respondents Nos.2 to 4, in respect of the same land. The vendor, respondent No,1 has subscribed the second agreement to sell by signing the same at least in the capacity of an attesting witness. More significantly, simultaneously with the execution of the second agreement, the vendor also extended the date of completion under the first agreement to sell with the first vendees from 16-8-1990 to 10- 10-1990.
3. Learned counsel for the petitioner submits that the two agreements have to be read together in order to appreciate the legal right of the petitioner to enforce the sale transaction against the vendor, respondent No,1, in the petitioner's favour as vendee under the second agreement to sell to which the vendor has subscribed.
4. Learned lower Courts did not find any merit in the submission of the petitioner. With the result that the learned Civil Judge rejected the plaint on the ground that the first vendees, respondents Nos.2 to 4, did not have a transferable interest in the suit-land which they could have conveyed by a separate agreement to the petitioner. Hence the petitioner had no enforceable right against the vendor. This view was upheld by the learned Additional District Judge who observed as follows:-- "Respondents Nos.2 to 4 were holding an agreement to sell in their favour but were not having right of further sale or agreed to sell the property forming subject-matter of the agreement. They could not transfer the property on the basis of agreement even if the original owner had agreed that they will be having right to further sell the property. This was manifestly against the law. Therefore, appellant could not seek to specific enforcement of the 2nd contract, especially when one of the person Sharif alias Rehman is not party to the contract. In the contract dated 14-8-1990 the name of Ahmed Din has been written instead of Sharif. Agreement dated 14-8-1990 is against the law.
(1997 CLC 1108)."
5. Learned counsel for the petitioner has clarified that the observation in the quoted passage about Sharif and Ahmed Din is erroneous, these are the names of one and the same person among the first vendees therefore, objection on this score which is not raised in the written statement is only superficial. Accordingly, the only reason sustaining the impugned judgment and which is also the solitary point forcefully relied by the learned counsel for the respondents, is the ratio in the case of Rashid Ahmed Khokhar v. Sana Ullah 1997 CLC 1159 wrongly noted as 1108. The facts in the precedent case were similar,to the present case with the difference that the vendor had in the first agreement to sell delegated to the vendee a tight to further alienate the property in favour of anybody else. This delegation was relied upon by the purchaser from the said vendee under a subsequence agreement to sell, to specifically enforce the promise of sale made by the vendor under the first agreement to sell. In this respect the learned. Judge in Chamber was pleased to hold as follows:- "It is no doubt correct that the petitioners have also been arrayed as parties to the suit with the averments that originally they had agreed to sell the land in dispute to respondent No,2 vide agreement, dated 23-1-1993 but the question as to whether there is any privity of contract between respondent Nol. On the one side and the petitioner on the other can only be, answered keeping in view the age old principle of law that the party in whose favour an agreement to sell is executed is at all vested with any right, to the property forming subject-matter of the agreement or not. It is now well-settled that an agreement to sell does not create any right, title or interest in regard to property forming subject-matter of the agreement and the only right of the intended vendee as recognized under the law is the right to enforce the contract and that too against the owner thereof and since the equitable estate has not been recognized in .This country, - therefore, the person holding an agreement to sell in his favour is not clothed with the power to further sell or agree to sell the property forming subject-matter of said agreement. Needless to add that the legal estate passes on to the prospective purchaser on the completion of the sale itself and not before, therefore, even if the original owner agrees that the holder of the agreement to sell would be entitled to further agree to sell the property, the same would be manifestly against the law. The rigour is not only one of law but also that of logic and prudence inasmuch a person having no title to the property itself could not possibly agree to sell the same, therefore, such an agreement could not be sought to be specifically enforced for it has always been well-accepted that nobody is allowed to contract against the law and that if such a contract is entered into the same cannot be enforced through the process of law. In the instant case the original agreement entered into the between the petitioner and respondent No,2 is so for as it contained a clause, thereby conferring a power on the said respondent No,2 to further agree to sell the land being against the law and void ab initio, it would be taken to be nonexistent in the eye of law, therefore, the same would not be interpreted to mean that the respondent No,2 had any power to further agree to sell the land in dispute to respondent No,1 or for that matter to anybody else nor the, said power could in turn create any privity of contract between respondent No,1 and the petitioners and that being so the agreement executed by respondent No,2 in favour of respondent No,1 could not be enforced against the petitioners."
It is 'noticed that the crucial finding sustaining the foregoing rule is the absence of privity between the vendor in the first agreement with vendee in the second agreement to sell. In the present case, however, the vendor is a signatory to the second agreement to sell; certainly in the capacity of an attesting witness although it is claimed that he may be treated as party thereto. Learned counsel points out that the body of the second agreement imposes an obligation on the vendor to execute a sale-deed in favour of the petitioner after the petitioner has adjusted the outstanding loan of A.D.B.P. And paid the balance amount of sale consideration. It would be a matter of interpretation of the agreement as to whether the vendor may be treated as a party to the second agreement.
This is a point that is not germane to the present inquiry whether the plaint in suit should have been rejected at the outset. The factum of the vendor's signature on the second agreement to sell would prima facie demonstrate two things in terms of Article 17(2)(a) of the Qanun-e-Shahadat, 1984 his knowledge about the transaction concluded by the agreement; and by virtue of such knowledge his endorsement of or consent to that transaction. These and perhaps other facts in the case would have bearing upon the question whether the vendor can, in the circumstances of the case, be treated to be a party to the second agreement to sell. If he is treated as such a party then clearly the rule laid down in the case of Rashid Ahmed Khokhar (supra) does not apply to the present case so as to non-suit the petitioner/plaintiff. On the other hand, if upon appreciation of the record, a contrary finding is given then the question would arise as to what purpose and effect is intended by the vendor's signature on the agreement. Upon such an analysis it appears that the petitioner may have a case that discloses a cause of action and a right that is not barred by any law to attract rejection of plaint.
5. In the foregoing context there is another aspect that comes to attention. It is common for commercial transactions to be concluded through a string of agreements; such arrangements are not unknown to legal jurisprudence. Back to back agreements can create effective legal relations between a series of parties provided the essential links of consent by and knowledge of the relevant persons remain present through the transactions. This is the area covered by the law of assignment. On this point the law makes a distinction based on knowledge and consent. The requirement for consent differs with whether it is the benefit of a contract that is being passed or its burden. This divergence in treatment is highlighted in an instructive passage given in the judgment of the Indian Supreme Court in the case of Khardah Company Limited v. Raymon & Co. (India)
Private Ltd. AIR 1962 SC 1810. It was observed that:-- "There is no dispute between the parties that it is a specific delivery contract. It is between named buyers and sellers, the goods are specified, as also the period during which they have to be actually delivered and their price is fixed. What is in controversy is whether it is transferable or non- transferable. There was considerable argument before us on the question as to assignability of a contract. The law on the subject is well-settled and might be stated in simple terms. An assignment of a contract might result by transfer either of the rights or of the obligations thereunder. But there is a well-recognized distinction between these two classes of assignments.
As a rule obligations under a contract cannot be assigned except with the consent of the promisee, and when such consent is given, it is really a novation resulting in substitution of liabilities. On the other hand rights under a contract are assignable unless the contract is personal in its nature or the rights are incapable of assignment either under the law or under an agreement between the parties."
6. The foregoing statement of the principle regarding the assignment of contractual rights makes clear that in the present case benefit of the vendors promise under the first agreement to sell is capable of being assigned to the vendee under the second agreement to sell. The person whose consent in this case is, prima facie, relevant and necessary is the vendee who is the promisee under the vendor's promise. The first vendee's contractual right under the first agreement may with his consent be transferred to a second vendee. However, the first agreement may not be assignable without the vendor's consent if it were a personal contract. If there is any such consideration in the contract apart from payment of money then the vendor's consent would also be required. Such consent is in fact being claimed by the learned counsel for the petitioner, but these are matters that should be settled after recording of evidence. Accordingly, prima facie the suit of the petitioner/plaintiff is neither barred by law nor devoid of a cause of action so as to be defeated at the very outset under Order VII, rule 11, C.P.C. As done by the impugned judgments of the learned Courts below by the rejection of the plaint. Such a view, upon the foregoing analysis, is pre-emptive in the facts of the present case.
7. In view of what has been stated above the revision petition is accepted, the impugned judgments of the learned Courts below are set aside and the plaint of the petitioner in the suit is restored to its original number for its trial and adjudication in accordance with law. No order as to costs.