1. Khilji Arif Hussain, J.--For the purposes of disposing of the application under Order XXXIX, Rules 1 and 2, C.P.C. brief facts of the case are that on 30-9-2004 Attorney of the Plaintiff alongwith the Legal Advisor Mr. Muhammad Younis Memon, Advocate met with Defendants Nos. 1 and 2, both Trustees of F.N.E. Dinshaw Trust to purchase Immovable Trust Property Bearing No. 25, SB-6 admeasuring 867 and 3/4 square yards situated at Zaib-un-Nisa Street Saddar, Karachi in consideration of Rs. 85,000,000 (Rupees Eighty Five Million), and handed over 11 undated cheques of Rs. 80,000,000 (Rupees Eighty Million only). Out of these 11 cheques five cheques were issued in the name of Defendant No. 1 amounting to Rs. 40,000,000 and six cheques of Rs. 40,000,000 in the name of Defendant No. 2 and they wrote receipt which according to the plaintiff is an agreement of sale in respect of the property in question. It is alleged that after entering into the agreement of sale on 30-9-2004 defendants have to complete the sale transaction by executing and getting deed of conveyance registered but in spite of many requests made to them by the plaintiff's attorney and their Legal Adviser the defendants are avoiding to perform their part of obligation whereas the plaintiffs are ready and willing to pay Rs. 5,000,000 being the balance amount of sale consideration. It is alleged that Defendant No. 3 is the third trustee of F.N.E. Dinshaw Trust, and Defendant No. 2 is her constituted attorney.
2. Defendants filed counter-affidavit to the listed-application and denied that they agreed to sell the property in question to the plaintiffs while raising preliminary objection about the maintainability of the suit. It was further stated that the parties being unable to finalize terms of sale therefore no agreement of sale has been executed and the Note/Receipt Annexure A filed alongwith the plaint cannot be treated as an agreement between the parties.
3. Heard Mr. Ghulam AR Khokhar, learned counsel for the plaintiffs, and Mr. Bilal Shaukat; learned counsel for the defendants.
4. Mr. Ghulam Ali Khokhar, learned counsel for the plaintiff, vehemently argued that the receipt Annexure A filed alongwith the plaint is an agreement between the parties by which defendants agreed to sell the property in question in favour of the plaintiff in total sale consideration of Rs.
5. 85,000,000. Learned counsel for the plaintiff argued that description of the property has been given in the receipt and defendants acknowledged receipt of Rs. 80,000,000, which, in fact, is an agreement of sale between the parties as the said receipt (Annexure A) is clearly a receipt of payment in which names of purchaser and seller are mentioned alongwith the description of the properties and their price and merely because formal agreement of sale could not be entered into between the parties, will not disentitle the plaintiff to ask for performance of the agreement. The receipt (Annexure A) by itself is an agreement of sale between the parties. In support of his contention the learned counsel relied upon the case Mst. Najma Rana v. S. M. Maroof (1989 M LD 1317), Mrs. Parveen Begum v. Raja Muhammad Sarwar Khan (PLD 1956 (WP) Kar 521), Mobinul Haq Siddiqi and another II. Mrs. Hajra Farooqo and 3 others (PLD 1986 Kar, 358), Mrs. Parveen Begum v.
6. Raja Muhammad Sarwar Khan (PLD 1956 Kar. 521) and Province of West Pakistan v. Gammon's Pakistan Ltd. Karachi (PLD 1976 Kar. 458).
7. Mr. Bilal Shaukat, learned counsel for the defendant, in reply to the arguments argued that the receipt dated 30-9-2004 cannot be termed as an agreement between the parties as the parties had not reached to a concluding contract at any point of time. The said receipt at the most can be termed as an understanding between the parties to enter into an agreement of sale, if so agreed.
8. Learned counsel further argued that undated cheques were handed over in Trust to defendants by the plaintiffs, were not encashed by the defendants, which also clearly demonstrate that the parties had not entered into an agreement of sale of the property in question. Learned counsel further argued that all the Trustees are not parties to receipt in question which according to the plaintiff, is an agreement of sale is not binding upon the defendants as section 48 of the. Trust Act required that. all the Trustees must act jointly. In support of his contention, he relied upon the case of Muhammad Kamran Khan v. F.N.E. Dinshaw Trust (PLD 2006 Kar. 108), Al-Huda Hotels and Tourism Co. and others v. Paktel Limited and others (2002 CLD 218), Seth Banarsi Dass v. Cane Commissioner UP and another (AIR 1956 Allahabad 725), Khayaban-e-Iqbal (Pvt) Ltd and others v.
9. Mustafa Haji Muhammad (1996 CLC 1758), Riley and another v. Troll (1953 AELR 966).
10. I have taken into consideration respective arguments advanced by the learned counsel for the parties and also gone through the record. In terms of Section 10 of the Contract Act provided that all agreements are contracts if they are made by the free consent of the parties competent to contract, for the lawful consideration and with a lawful object and are not hereby expressly declared to be void. To constitute a valid contract between the parties one of the essential condition is that consensus ad idem must exist between the parties with regard to all the terms of the contract and in case of any ambiguity, the same can adversely reflect about the existence of the contract.
11. In order to convert a proposal with binding contract the acceptance of a proposal must be absolute and unqualified there must be shown to exist a consensus ad idem with regard to all the fundamental terms of the contract, where an agreement is a completed bargain or merely provisional agreement depends on the intention of the parties as deducible from the language used while negotiations take a contract shape and whether the intention to have formed document drawn up postponed the formation of the contract depends on the circumstances of each case.
12. Keeping in view this principle of law now I would like to examine whether receipt Annexure A can be termed as an agreement between the parties to sell the property in question. Before proceeding further I would like to make it clear that a receipt can be termed as a contract if on going through the said receipt, four components to form an agreement can be spelt out without any ambiguity i.e. (i) identification of seller and purchaser, (ii) -sale consideration amount, (iii) identification of property to be sold, and (iv) that parties to agreement to sell the property in question are at consensus ad idem.
13. The receipt Annexure A-1 which according to the plaintiff is an agreement of sale between the parties provided that Defendants Nos. 1 and 2 received 11 undated cheques out of which Defendant No. 1 received five cheques for total amount of Rs. 40,000,000 and Defendant No. 2 received six cheques for total amount of Rs. 40,000;000. The receipt further provided that: "the cheques shall be retained in Trust of the Defendants Nos. 1 and 2 and shall only be encashed on reaching the agreement of sale of the property 867 and 3/4 square yards."
14. From the above receipt Annexure A it is clear that the plaintiff handed over cheques "in trust" to Defendants Nos. 1 and 2 with specific understanding that the same will be encashed on reaching the agreement of sale. This phrase in the receipt that "cheques will be retained in trust to be encashed on reaching the agreement of sale" clearly established that the parties at the time of execution of the receipt wanted to do something more to enter into an agreement of sale till such time defendants undertook that they will not encash the cheque, which fact was further established from the conduct of the parties that on the date of execution of said receipt i.e. 30.9.2004 till dated cheques were not encashed by the defendants and after about four months of issuance of receipt and handing over undated cheques for the first time plaintiff's attorney addressed a letter to Defendant No. 1, called upon him to complete the bargain in respect of the property in question. The defendant alongwith his written statement placed on record letter dated 1-10-2004 addressed to Mr. Muhammad Younis Memon, Advocate, Legal Adviser of the defendant that if for any reason whatsoever the Trustees of F.N. Dinshaw Trust cannot reach an agreement of sale for the building to you or to any of your nominees the cheque will be returned uncashed. Legal Adviser of the plaintiff filed his personal affidavit that such letter was not received by him.
15. Mr. Ghulam Ali Khokhar, learned counsel for the plaintiffs, relied upon the case of Mst. Najma Rana (supra), where the learned Judge of this Court accepted "receipt" as an agreement, but facts of the said case are distinguishable. In the case of Mst. Najma Rana (supra), the seller admitted that he had received a sum of Rs. 10,000 as part consideration of sale, but since purchase did not abide by the commitments in the receipt and asked for adjustment of sale consideration towards rent on the basis of these facts learned Judge vacated the order of status quo. In the case of Mrs. Parveen Begum (supra), it has been held that for the purpose of deciding the question whether. or not a temporary injunction should be issued, the Court will not go into nice question, whether in a suit for specific performance, the defendant's son, who had negotiated the transaction of sale of plot of land with plaintiff, who had received the earnest money by cheque which defendant had actually encashed have authority or not. It was held that it is difficult to draw a line between the scope of authority conferred on Raja Mahboob Asghar and on the basis of these facts held that plaintiff made out a prima facie case.
16. The facts of the case are distinguishable as in the instant case cheques received by the Defendants Nos. 1 and 2 have not been encashed by the defendants towards sale consideration whereas in the case of Mrs. Parveen Begum (supra)(sic).
17. In the case of PIDC (supra), learned Judge relied upon the case of Hatzfeltit-Wildenburg Alexander, (1912) 1 Ch. 284, 288, it was held that: "It appears to be well-settled by the authorities that if the documents or letter relied on as constituting a contract contemplated the execution of a further contract between the parties, it is a question of construction whether the execution of the further contract is a condition or term of the bargain or whether it is a mere expression of the desire of the parties as to the manner in which the transaction already agreed to will in fact go through. In the former case there is no enforceable contract either because the condition is unfulfilled or because the law- does not recognize the contract to enter into a contract. In the latter case there is a binding contract and the reference to the more formal document may be ignored."
18. Be that as it may, since receipt by itself provided that cheques will be encashed only on reaching agreement of sale clearly established that at the time of execution of the receipt parties were not intended to sell the property but would like to enter into the agreement at subsequent date.
19. In the case of Al-Huda Hotels and Tourism Co. and others v. Paktel Limited and others (supra), 2002 CLD 218, identical question came under consideration before this Court. Brief facts of the said case were that the parties entered into negotiations for sale and the transfer of (he shareholdings owned by one of the defendants. It is claimed that the oral agreement was reduced into writing through a letter and accordingly a letter dated 10-12-1999 was sent by which the terms of agreement for confirmation which was returned by Defendant No. 2 with certain handmade changes whereafter Defendant No. 2 accepted the offer letter through its covering letter dated 15- 12-1999. The letter contained a condition on its top, which read as "subject to contract" it is claimed that the use of the phrase "subject to contract" did not mean that the agreement has not been finalized.
20. After discussing various case-laws learned Single Judge held that it is not possible at this stage to hold that there is binding contract between the parties and the plaintiff therefore failed to establish prima facie case in its favour for grant of injunction.
21. The question whether parties reached a concluding contract or not depend upon the fact where the parties were of one mind and all the material terms have been finalized between them and they intended that the matter was closed and concluded between them.
22. Mr. Bilal Shaukat, learned counsel for the defendant, in support of his argument stated that the agreement of sale was not concluded between the parties and relied upon the case of Raingold v.
23. Brom1ey, (1931) 2 Chancery Division 307, where it has been held: "That there was no binding contract to grant a lease, as the expression "subject to terms of the lease" in the letter of December 9, 1930, meant "subject to the terms to be contained in the lease executed by the lessor".
24. Apart from the above, it also appears that receipt Annexure A-1 has been executed only by Defendants Nos. 1 and 2 whereas there are three Trustees, and in terms of Section 48 of the Trust Act, they had to act jointly. The contention of Mr. Ghulam Ali Khokhar learned counsel for the plaintiff that Defendant No. 2 is father of Defendant No. 3 and also an attorney has no force as Defendant No. 2 has not signed the receipt in question for and on behalf of Defendant No. 3 to bind her with the contents of the said receipt.
25. I also have my reservations about the maintainability of the suit as framed. Instead of filing the suit against the Trust and/or making the Trust as one of the defendants and or issuing cheques of sale consideration in the name of Trust, the plaintiff has filed the suit against the Trustees however this question can be decided at an appropriate time, as none of the parties addressed on it. The plaintiff failed to make out any case for grant of injunction.
26. For the foregoing reasons listed application has no merit, which is accordingly dismissed. These are the reasons of my short order dated 20-42006. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.