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2009 CLC 708

Messrs SUNLEY DEVELOPERS (PVT.) LTD. through Director vs Messrs HUMAIR

Citation2009 CLC 708
CourtSindh High Court
Case No.High Court Appeal No,24 of 2009
Date2009-03-06
Judge(s)Khilji Arif Hussain, Arshad Noor Khan
ResultAppeal accepted

ORDER

1. ' KHILJI ARIF HUSSAIN, J.-- Aggrieved by the order dated 29-12-2008 rejecting the plaint for want of cause of action, the appellant preferred this appeal.

2. ' Facts to decide the appeal can be summarized that appellant a private limited company engaged in the business of construction and development entered into an agreement of sale dated 30-4-1998 with respondent No,1 for sale of 950 residential plots of 120, 133 sq. Yds. Each situated on the piece of land bearing Survey Nos.108, 109 and 110, Deh Safroon, Tappo Gadap, Taluka and District Karachi at the rate of Rs,750 per sq. Yd. Including all outer and internal development charges together with all rights, titles and interests, free from all encumbrances, liens, charges etc. With the condition that respondent No,1 shall obtain all the NOCs from the concerned authorities. In terms of the agreement of the sale appellant paid an amount of Rs,10,000,000 (Rupees ten million) to respondent No,1 at the time of execution of the agreement of sale further paid a sum of Rs,5,000,000 (Rupees five million) as per schedule of payment prescribed in the agreement of sale. The appellant's case was that in part performance of the agreement, in consideration of substantial amount paid, respondent No,1 handed over physical possession of the property to appellant who has been dispossessed by force by respondent No,1 during the pendency of suit. The appellant through his sister-concern Sobia Enterprises got layout plan approved for 685 units/bungalows and then for 218 units/bungalows from Malir Cantonment Board Karachi and thereafter started construction and development work. Malir Cantonment Board Karachi stopped the work for want of NOC from the Civil Aviation Authority and demarcation of boundary wall in between and property of Civil Aviation Authority the said property/land. The appellant's case was that appellant has been pressing hard the respondent No,1 to honour the terms of the agreement but they kept the appellant on false promises and ultimately in March, 2007 respondent No,1 threatened to dispossess the appellant from the suit property and refused to honour terms of the agreement of sale. The appellant filed suit for specific performance of the agreement, declaration and injunction.

3. ' The respondent No,1 filed an application under Order VII, rule 11, C.P.C. On 1-4-2008 to reject the plaint on following grounds:-

(1) The suit is hopelessly time-barred since the plaintiff is seeking enforcement of agreement dated 30-4-1998.

(2) That the suit is hit by the provision of section 21 of the Specific Relief Act as any contract containing uncertain, vague or otherwise undefined terms cannot be enforced against defendants and particularly when performance of contract can go beyond three years from the date of execution to its full and final implementation.

(3) That plaint does not disclose any cause of action since the agreement has expired and no notice was issued by the plaintiff to the defendant prior to filing of the suit.

4. ' After hearing the learned counsel for the parties, learned Single Judge allowed the application, rejected the plaint by holding that what is read from the agreement itself and complaints made in the plaint there seems to be no cause of action for filing of the suit by the plaintiff while holding that the suit was filed in time and not barred under section 21 of the Specific Relief Act.

5. ' After service of the notice in appeal, respondent No,1 filed cross-objection under Order XLI, rule 22, C.P.C. To hold that the suit was time-barred and incapable of specific performance in terms of section 21 of the Specific Relief Act.

6. ' Heard Mr. Khawaja Shamsul Islam learned Advocate for the appellant and Mr. Nazar Akbar learned Advocate for the respondent.

7. ' Mr. Khawaja Sahmsul Islam learned Advocate for the appellant vehemently argued that by an agreement of sale dated 30-4-1998 respondent agreed to sell the property in question against valuable consideration out of which considerable amount of Rs,15,000,000 was paid to the respondent at the time of agreement of sale and thereafter respondent executed irrevocable power of attorney in favour of the appellant nominee. It was argued by the learned counsel, that the said power of attorney is still intact the respondent has not denied or disputed execution of the agreement of sale and power of attorney accepted disputed payment of Rs,5,000,000 after execution of sale and delivery of possession. It was argued by the learned Advocate that the respondent after filing of the suit forcibly dispossessed the appellant by taking advantage of ex parte inspection. Learned Advocate also drawn our attention to public notice of respondent on 20- 1-2009 and argued that the property in question was part of alleged understanding between the respondent and NAB Authorities and not disclosed by the respondent at any point of time. The appellant filed suit for specific performance was in time and learned Judge committed error of law in failing to note that cause of action disclosed in plaint merely because power of attorney has been executed in favour of the appellant nominee not disentitle the appellant to file suit for specific performance or barred from filing the same. It was argued by the learned Advocate that time for specific performance was not essence of agreement and respondent at no point of time denied the performance of the agreement, as such suit was filed within time. It was further argued that description of property given sufficient details in memo. Of plaint as well as in agreement of sale and plaint cannot be rejected under section 21 of the Specific Relief Act.

8. ' On the other hand, Mr. Nazar Akbar, learned Advocate for the respondent No,1 argued that the suit was filed against the respondent through attorney, who was Chief Executive of the appellant and on this score appellant's suit was liable to be dismissed. It was argued that no cause of action accrued to the appellant nor any cause has been disclosed in the plaint, the power of attorney was executed in favour of the nominee of the appellant and learned Judge rightly rejected the plaint.

9. Learned Advocate for the respondent, in support of counter-objection argued, that terms of agreement of sale were vague, total area of the land was more than the area respondent agreed to sell under the agreement of sale and specific description of the property was given either in the memo. Of plaint or in the agreement and on this ground too, plaint was liable to be rejected.

10. Learned Advocate further argued that suit was barred under law, agreement of sale was executed on 30-4-1998 whereas vide letter, dated 30-4-2001 Cantonment Executive Officer, Malir Cantonment, directed the appellant to stop development work as land falls in the funnel area of the airport and further that the Civil Aviation Authority has not issued NOC in favour of the appellant whereas suit of specific performance was filed in year 2008 after about six seven years of order to stop the work, and after 10 years of agreement of sale on the face of it was time-barred and plaint was liable to be rejected.

11. ' We have taken into consideration respective arguments advanced by the learned Advocates for the parties, perused the record. From perusal of the record it appears that appellant filed suit for specific performance on the basis of the agreement of sale executed on 30-4-1998 by which respondent agreed to sell 950 residential plots of 120, 140 sq.Yds. A sum of Rs,one million was paid at the time of signing of the agreement further a sum of Rs,2.5 million and a sum of Rs,five million were alleged to have been paid as per schedule of the agreement. The appellant alleged that in part performance of the agreement respondent handed over actual possession of the property to him. The appellant after execution of the agreement of sale and power of attorney submitted plan for approval of 685 units/bungalows through his sister-concern Sobia Enterprises, which was duly approved by the office of the Cantonment Board Malir Cantt. Karachi, dated 9-6-1999. Further granted permission for advertisement and sale of bungalows to be constructed on the subject land on 30-6-1999. The appellant hereinafter as per memo. Of the plaint started construction and development work on the suit property in question, but respondent No,4 stopped the construction work, directed the appellant to obtain NOC from the Civil Aviation Authority. In reply to the notice of Cantonment Executive Officer dated 10-4-2001 the appellant through letter dated 16-4-2001 informed the Authority that the plan is duly received with approval of the Cantonment Board and further that before approval of the plan they got NOC issued by the different authorities including Cantonment Board, Deputy Director, Land K.D.A., Karachi, K.B.C.A.

12. ' The respondent No,1 filed written statement while taking preliminary legal objection about the maintainability of the suit admitted execution of the agreement of sale, and execution of registered power of attorney, however, alleged that appellant failed to pay initial consideration of the agreement to sell within 30 days also failed to make payment within 60 days from the date of execution of the agreement as stated in para.2(B)(C) of the agreement of sale, as such there exists no agreement between the parties. It was alleged that time for initial payment was essence of the contract which has not been complied with by the appellant for the last ten years and even till date the respondent has right to sue the appellant not only for damages contemplated under section 73 of the Contract Act but also for filing frivolous suit and intimate respondent by obtaining ex parte order.

13. ' Learned Single Judge after taking in consideration respective arguments advanced by the learned Advocate for the respondent in support of contention for rejection of the plaint under Order VII, rule 11, C.P.C. Held that no specific law has been cited for giving notice before filing of the suit for specific performance and as such plaint cannot be rejected on this ground and further held that, plaint on the face appears to be not barred by limitation of law. While dealing with the contention of the learned counsel for the respondent that the appellant has no cause of action plaint was rejected, by holding that "(i) grievance of the plaintiff is that the obligation of obtaining approval of layout plan of 689 units/bungalows. NOC for sale of 218 units/bungalows was not of the defendant No, 1/respondent No, 1 . (ii) On perusal of the agreement as noted above, all the items on which grievance has been raised by the plaintiff were to be undertaken by the plaintiff/appellant itself and none by the defendant No, 1/respondent No,

1. This is clear from recital and moreso by its sub- para.(b) and clause (3) of the agreement. (iii) This is clear from reading of the second recital that heading of the agreement mentioned it to be an agreement to sell but its reading shows that it is not so but is a complete covenant of land by the defendant No,1 to the plaintiff by giving irrevocable general power of attorney for selling of the plots and recovery of the sale proceeds and making of sub-lease in favour of the perspective purchaser. To the extent what is read from the agreement itself and complaints made in the plaint, there seems to be no cause of action for filing of the suit by the plaintiff.

14. ' The object of Order VII, rule 11, C.P.C., is to bury the suit not maintainable on its inception, but at the same time, although Order VII, rule 11, C.P.C., is not worded exhaustively, the Court has to make efforts to decide the matter on merits rather than to non-suit the same on technical grounds. If there is ambiguity in the pleadings or that controversy in the matter cannot be decided without recording of evidence and/or that where sufficient necessary details have not been given, then parties can be called upon to give better particulars of their pleadings or to lead the evidence and then decide issues on the basis of material brought on record.

15. ' In the case of Mian Zafar Iqbal and others v. Bashir Ahmed and others PLD 1989 Lah. 152, while dealing with the judgment and decree dismissing the suit for specific performance of agreement of sale where defendant contested the suit and raised number of preliminary objection like that the plaintiff has no cause of action as he had not performed his part of contract, that the agreement rescinded comes to an end when plaintiff failed to perform his own part of obligation/contract that the suit is not maintainable in the present form as other land mentioned in the agreement of sale has been made subject-matter of the suit etc., it was held:--- "In our view, this was a mere case of false description, and subject-matter of sale agreement can be made certain because even if Khasra number had not been mentioned and all that had been said was that the vendors were selling their entire holding comprising Khata Nos.88 and 89 situate in Mauza Karaim Wah that would have sufficient description of the land established identity of the subject-matter of the agreement."

16. ' In the case of ABC Laminari (Pvt.) Ltd. v. A.P. Agencies AIR 1989 SC 1239, it was held:--- "It is a bundle of such facts which taken with the law applicable to them gives the plaintiff a right to relief against the defendant. It must include some act done by the defendant since in the absence of such an act no cause can possibly accrue. It is not limited to the actual infringement of the right sued on but includes all the material facts on which it is founded. It does not comprise evidence necessary to prove such facts, but every fact necessary for the plaintiff to prove to enable him to obtain a decree. Everything which if not proved give the defendant a right to immediate judgment must be part of the cause of action.

17. ' But it has no relation whatever to the defence which may be set up by the defendant nor does it depend upon the character of the relief prayed for the plaintiff."

18. ' In the case of M. Khurram Muggo v. Mst. Perveen Hameed Muggo and 3 others PLD 2007 Lah. 518, the Honourable Court of Lahore held that:--- "The expression "cause of action" has been compendiously defined to mean every fact, which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the Court. It does not comprise every piece of evidence, which is necessary to prove each fact but every fact which is necessary to be proved. It means action for which the defendant is answerable to the Court; everything which, if not proved, would give the defendant a right to an immediate judgment, must be part of action (sic) its significance whole of the material facts title of the essential which it is necessary for plaintiff to prove before it and succeed."

19. ' In the case of Institute (Institute) of Engineers Pakistan through Honorary Secretary, Karachi Centre v. Engineer Khalid Pervasiz and another 1999 YLR 436 held that:--- "The provision provides that the Courts while rejecting the plaint will look only into the contents of the plaint and neither the written statement nor counter-affidavit can be looked into. If the pleadings are vague the Court can direct the party to furnish better statement rather than rejecting the plaint. Further if the Court is of the view that the allegations in the plaint prima facie give a cause of action then it can direct the defendant to show as to how the allegations in the plaint do not reveal any cause of action and in such a case put up can be taken into for consideration. But in such cases a preliminary issue regarding maintainability should be framed and decided."

20. ' The appellant filed suit for direction to the defendant to specifically perform the agreement dated 30-4-1998 and further that the defendant No, 1/respondent No,1 is not entitled to dispossess the plaintiff/appellant from the suit property without due process of law. It was alleged in the memo. Of plaint that in part performance of the agreement of sale plaintiff was put in possession of the property which was subject-matter of the suit. Even if for the sake of argument it is accepted that after power of attorney was registered in the name of appellant's nominee appellant, it was for the appellant/plaintiff to perform all acts under the agreement on behalf of the respondent No, 1/defendant No,1, the appellant was entitled for relief pertaining protection of his possession of property which was subject-matter of suit. It appears from the Commissioner report that the respondent No,1 is in possession of the land whereas it was alleged by the appellant Advocate that appellant was dispossessed from the property after filing of the suit by force. So far as possession of the appellant on the land in question, whether he was in possession of the land at the time of filing of suit or not. Keeping in view the letter of Cantonment Board granting permission to sell, advertise and other documents same can be answered only after recording of evidence.

21. ' As regards power of attorney, the appellant was authorized as an attorney from the documents on record particularly letter, dated 30-6-1999 addressed by the Cantonment Executive Officer plaintiff sister concern granting permission for advertisement and sale of the bungalows on the land in question. Letter, dated 10-4-2001 addressed by the Cantonment Executive Officer by which the appellant's sister concern was directed to stop construction over the land, one can say that the appellant was in possession of the land in part performance of the agreement and the question whether he was entitled for the relief of injunction gave him cause of action for maintaining the suit Now a question, whether suit for specific performance after execution of the registered power of attorney of the nominee purchaser is maintainable? Agreement of sale, execution of which has not been denied by the respondent was executed on 30-4-1998 respondent claimed himself as an owner of the housing scheme namely Gulshan-e-Roomi upon the land besides other Survey Nos.108, 109 and 110, Deh Safooran Tappo Gadap, Taluka and District East Karachi and vendors have agreed to sell, transfer, convey and assign the said land to the vendee a total area of 115975 sq.

22. Yds. Partly from the said survey numbers for development and construction of 950 residential plots of 120 sq. Yds. And 133 sq. Yds. At an agreed sale consideration to be calculated at the rate of Rs,750 per square yard inclusive all development charges together with all rights, titles and interests attached thereto, subject-matter of the land, which was duly identified and marked in red colour in the map attached with the agreement of sale in this regard, contention of Mr. Nazar Akbar learned counsel for the respondent argued that the agreement is vague and for want of identification of the land in view of the above is unfounded the respondent assured the appellant that he had paid all the assessm ent, taxes, fee, development charges, ground rents, non-utilization fee etc. And if any due remained unpaid then the same will be paid by him. Power of attorney in terms of clause

(7) of the agreement of sale was given to the appellant nominee was only onward booking, onward sale of the plots to the individual.

23. 'As regards power of attorney, the appellant was authorized as an attorney to recover sale proceeds and outer development charges from prospective purchasers, to get constructed the houses on the land to deliver vacant peaceful physical possession of the same etc. The attorney was not authorized, in our tentative view to convey and transfer. Title of the property subject- matter of the agreement in it favour. In terms of clause (10) of the agreement of sale it was for the respondents to demolish the entire boundary wall at their own cost and expenses, which is lying in between the land and the rest of the area of the housing scheme. The respondents denied their obligation for performing the agreement of sale on various grounds including that the appellant has failed to pay the amount in terms of the agreement of sale, time was essence of the contract and as such appellant is not entitled for the relief for the performance of the agreement.

24. ' The question, whether time was essence of the contract, whether it was obligation of the respondent to demolish boundary walls in between the land agreed to sell and land belonging to housing scheme or that the property is duly identified or not, and that respondent has marketable title transferable in favour of the appellant or cause of action for maintaining plaint can be answered only after recording of evidence.

25. ' For the foregoing reasons, impugned order is set aside and cross-objections are dismissed.

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