' JAW WAD S. KHAWAJA, J.- Tariq Shabbir (petitioner/defendant) impugns the concurrent decrees of the learned trial Court dated 4-9-2004 and of the learned Appellate Court dated 4-7-2005, whereby a suit filed by the respondent/ plaintiff, namely Muhammad Ijaz, has been decreed.
Initially, the respondent had filed a suit seeking declaration of title and. Possession of two shops situated in Shabbir Building, Miana Pura, Sialkot City. Subsequently, however, the respondent filed an amended plaint praying for specific performance of agreement dated 16-3-1995.
2. The case of the respondent/ plaintiff, in brief, was that the petitioner had obtained a sum of Rs,400,000 from him by way of loan and had executed the aforesaid agreement stipulating that if the amount was not repaid by 31-7-1995, the title in the' property shall be deemed to have passed to the respondent. It was also averred in the plaint that upon failure of the petitioner to pay the sum by the aforesaid date, the period was extended, through a second agreement, upto 31-8-1995. The suit was filed in order to enforce the aforesaid agreements.
3. The defence, raised by the petitioner, was that he had business dealings with Muhammad Ilyas brother of the respondent. Based on those business dealings, the said Muhammad Ilyas filed a suit against the petitioner for recovery of money. According to the petitioner, the aforesaid agreements were fabricated by the respondent in order to pressurize the petitioner into conceding the claim of the respondent's brother Muhammad Ilyas in the latter's recovery suit.
4. Based on the pleadings, the learned trial Court framed as many as 8 issues including that of relief. The first three issues are of relevance here which were framed in the following terms:-
(1) Whether the defendant received a sum of Rs,4,00,000 as loan and executed agreements dated 16-3-1995 and extended on, 2-8-1995? OPP.
(2) If above issue- is proved in affirmative whether the plaintiff has become owner of two shops and is entitled to their possession? OPP.
(2-A) If Issue No,l is proved in affirmative, then whether the plaintiff is entitled to have a decree for specific performance of agreements dated 16-3-1995 and 2-8-1995 as prayed for, if so, on what terms? OPP
5. The respondent-plaintiff produced four witnesses to support his case and himself appeared as P.W.5 to give affirmative evidence and as P.W.6 when he appeared in rebuttal. On the other hand, the petitioner appeared as his sole witness and denied ever having received the sum of Rs,4,00,000 from the respondent or that he had executed the two agreements referred to above.
6. Both Courts below have decided the above three issues in favour of the respondent-plaintiff.
Learned counsel for the petitioner argued that the witnesses produced by the respondent were not credible as there were discrepancies and contradictions in their testimony. The learned Courts below, however, have noted that P.W.l P.W.2 and P.W.4 were disinterested and independent witnesses and, therefore, could be relied upon in proof of the two agreements (Exh.P.l and Exh.P.2)
P.W.l, Muhammad Aslam Advocate has, in categorical terms, deposed that the agreements had been executed by the petitioner-defendant. Proof of execution of the two agreements is the most important aspect of the case because any apparent discrepancies between the testimony of the P.Ws. Have been found by the learned Courts below to be outweighed by the fact that the petitioner had executed the agreements wherein his liability stands admitted. On this score the findings of the learned Courts below cannot be interfered with.
7. The next argument advanced on behalf of the petitioner was as to the nature of the transaction, alleged in the plaint. It is submitted that even if the two agreements (Exhs. P.l and P.2) are held to.
Have been proved, the same cannot be specifically enforced, firstly, because the same are unconscionable and, secondly, because even, according to the plaint, the transaction embodied in the agreements, is by way of an anomalous mortgage to secure repayment of the alleged sum of Rs,4,00,000. On this basis, it was contended that the decree for specific performance, passed by the learned Courts below, was not legally sustainable. This argument has merit. Learned counsel for the parties have been heard on this issue. The learned Courts below have decided Issues Nos.2 and 2-A in favour of the respondent-plaintiff without considering this legal aspect of the case.
8. In order to ascertain if the agreements constitute a mortgage or not, the intention of the parties has to be seen. This can be gathered from the terms agreed between them. Exh.P.l needs to be examined for this purpose. From the same it is abundantly, clear that the sum of Rs,4,00,000 was taken by the petitioner by way of loan and the same had to be returned by 31-7-1995. The word "loan" has been repeatedly used in the agreement. Additionally, it has been stipulated that the two shops mentioned in the agreement were to remain encumbered until repayment of the loan. These terms duly recorded in the agreement (Exh.P.l) leave no room for doubt that the transaction was in the nature U of a mortgage. Learned counsel for the respondent argued that a sale , was also intended because the agreement envisaged transfer of title of the two shops in favour of the respondent-plaintiff in the event of the failure of the petitioner to repay the amount. This submission is not legally tenable because the agreement (Exh.P.l) could only have been treated as an agreement to sell the two shops if the sum of Rs,4,00,000 was mentioned therein as consideration for the sale without any stipulation for repayment of the amount.
9. Learned counsel for the petitioner referred to the case titled Abdul Sattar v. Mst. Sardar Begum and others 1992 SCM R 417 to support his argument that the agreement (Exh.P.l) could only be construed as a mortgage and not as a sale. Learned counsel for the respondents, however, referred to the cases titled Salim Ullah Faridi and 8 others v. Amjad Sharif Qazi and 7 others 2003 YLR 1112 and Zafar Mehmood Shaikh v. Prudential Discount and Guarantee House Limited and 4 others 2003 CLD 1740. I have gone through these precedents and find that there is nothing therein to dispel the conclusion that the agreement (Exh.P.l) is not in the nature of a mortgage. The case of Zafar Mehmood Shaikh v. Prudential Discount and Guarantee House Limited supra relates to a mortgage created in favour of a banking company as defined in the Banking Companeis (Recovery of Loans, Advances, Credits and Finances) Act, 1997. The issue therein was as to whether a mortgage by deposit of title deeds in favour of a banking company had to be accompanied by an entry in the record of rights in order to perfect the mortgage. The other issue arising in the case was as to the requirement of registration of a document under section 17 of the Registration Act.
These questions have no relevance in the present case. The other case cited on behalf of the respondent viz. Salim Ullah Faridi, in fact, supports the argument advanced on behalf of the petitioner.
10. In the foregoing circumstances, the findings of the learned Courts below on Issues Nos.2 and 2-A are reversed. It is held that the respondent-plaintiff has not become owner of the two shops mentioned in the agreement (Exh.P.l). He is also not entitled to a decree for specific performance of the agreements (Exhs.P.l and P.2).
11. Learned counsel for the petitioner stated that the petitioner would repay the amount of Rs,4,00,000 to the respondent- plaintiff, I, however, am of the opinion that in view of the fact that the petitioner has been enjoying the benefit of the said sum since March, 1995, he should also pay a return thereon to the respondent-plaintiff. The respondent-plaintiff has, in his plaint, prayed for any relief to which he is. Found entitled. Here it may be added that the petitioner did not make any such offer of repayment in his written statement or at any time during the pendency of the case until today. On the contrary he wrongly denied execution of the two agreements (Exhs.Pl and P.2). In the circumstances, the decrees of the learned Courts below are modified and it is ordered that the petitioner shall pay to the respondent-plaintiff a sum of Rs,4,00,000 together with a return thereon calculated at the rate of 10 percent per annum from 16-3-1995 until the payment of the entire amount to the respondent- plaintiff. However, in view of the fact that the petitioner has succeeded partially, there shall be no order as to costs.