FAISAL ARAB, J.--- The defendant No,1 is owner of Plot No,2/232-B, PECHS, Karachi, admeasuring 1000 square yards. On 31-3-2004 defendant No,1 agreed to sell the said plot to the plaintiff for a total sale consideration of Rs,31,500,000. The plaintiff paid a sum of Rs,5,00,000 as advance. Then on 7-4-2004 the parties executed a formal agreement to sell and at that time a further payment of Rs,45,00,000 was made to defendant No,1. It was one of stipulations of the agreement that within 60 days of the execution of the agreement a further payment of Rs,50,00,000 would be made to defendant No,
1. Such payment was however made on 8-7-2004. The balance sale consideration amount of Rs,2,15,00,000 was to be paid on or before 8-8-2004.
2. Upto the expiry of the period specified in the contract i,e, 8-8-2004, the transaction was not finalized. It was four weeks after the expiry of the stipulated date that the defendant No,1 through his counsel served a legal notice, dated 6-9-2004 on the plaintiff and repudiated the contract for the reason that the plaintiff had failed to pay the balance sale consideration within the stipulated period. The defendant No,1 also forfeited the entire amount of ten million rupees which the plaintiff had paid from time to time under the agreement. The plaintiff vide its counsel's legal notice, dated 9-9-204 responded to defendant No,1 legal notice, dated 6-9-2004. In the reply, the plaintiff laid the entire blame for non-completion of the transaction on the defendant No, 1 . After exchange of these notices, the plaintiff filed the present suit on 14-9-2004 seeking specific performance of the contract.
3. In paragraph 3 of the plaint, the plaintiff averred that defendant No,1 at the time of execution of the Sale Agreement gave assurance that the suit plot has been commercialized and only formality that is left is the payment of commercialization charges that are to be paid to the Ministry of Works and Housing, Government of Pakistan and the plaintiff on the basis of such assurance agreed to purchase the suit property. In paragraph 4 of the plaint it was further averred that defendant No,1 supplied title and other documents of the suit plot to the plaintiff and thereafter he invited objections through publication made in Daily Dawn. In paragraph 5 of the plaint, the plaintiff has stated that he then called upon defendant No,1 to provide copies evincing commercialization of the suit plot but the defendant No,1 failed to do so on one pretext or the other and kept prolonging the matter. The plaintiff in the said paragraph also stated that he is ready and willing to pay the balance sale consideration but as defendant No,1 failed to get the suit plot commercialized, the transaction could not be finalized.
4. The defendants in their written statement took the plea that as the plaintiff failed to make the balance sale consideration within the stipulated time i,e, 8-8-2004, the agreement stood terminated and the amount paid under the contract stood forfeited.
5. The parties submitted following consent issues, which were adopted by the Court:--
(1) Whether suit is barred under section 21 of Specific Relief Act?
(2) Whether the plaintiff committed breach of the terms of the Agreement to sell, dated 7-4-2004, if so its effect?
(3) Whether the subject plot of land has been duly commercialized, if not, its effect on the performance by the plaintif of the terms of the said agreement?
(4) Whether the sale agreement is still in operation or it has become a dead letter?
(5) Whether the purported cancellation of the said agreement by the defendants is legal and valid?
(6) What should the decree be?
6. No argument was advanced on issue No,
1. The Issues Nos.2 to 5 are interconnected and therefore they are taken up together. Issues Nos.2 to 5.
7. The plaintiff in his affidavit in evidence mainly reiterated what has been stated that in the plaint.
In paragraph 8 of his affidavit in evidence the plaintiff has stated that he asked the defendants to supply him with the copies of the relevant documents to show that commercialization of the plot has been completed so that he may be able to pay the balance sale consideration but the defendants kept him on false hopes. In paragraph 12 of his affidavit-in-evidence it is stated that the plaintiff failed to complete the formalities for the commercialization of the suit property.
8. The defendant No,2, the managing director of defendant No,1 examined himself. He reiterated the contents of the written statement and stated that plot was already commercialized by K.B.C.A and nothing more was to be done by him and it was the plaintiff who failed to complete the transaction.
9. Learned counsel for the plaintiff Mr. H.A. Rehmani argued that the plaintiff at all material times was ready and willing to purchase the property; the balance sale consideration was not paid to defendant No,1 for the reason that the suit plot was purchased as commercial plot and the process of commercialization was not completed by defendant No,1 within the time specified in the contract. He submitted that the defendant No,1 ought to have completed the process of commercialization and only then it was entitled to the payment. In this regard learned counsel referred to Exhibits P.4, P.5 and P.9 these were produced in evidence in order to show that commercialization of the suit plot was yet to be completed. Learned counsel finally submitted that irrespective of the fact that the defendant No,1 failed to get the plot commercialized as undertaken by it at the time of execution of the sale agreement, the plaintiff is prepared to take the suit plot with its present status as he do not want to run the risk of getting the entire contract declared to have been frustrated due to non-commercialization. In support of his case learned counsel for the plaintiff has relied upon the cases reported in 2003 YLR 2793, 1996 M LD 60, 2004 SCM R 584 and PLD 1995 SC 423.
10. Learned counsel for the defendants, on the other hand, argued that at the time of execution of the contract, suit plot was already commercialized by Karachi Building Control Authority and approval for construction of a commercial building was also obtained and the defendant No,1 agreed to sell it with its existing status. He, therefore, submitted that under the contract defendant No,1 was not required to take any step for getting the suit plot commercialized from the Ministry of Works and Housing, Government of Pakistan. He explained this by submitting that it was for this reason that clauses 6 and 7 of the agreement that were proposed by the plaintiff were scored off and this deletion clearly demonstrates that the defendant No,1 was not required to take any further step for commercialization. He further stated that even in the legal notice, dated 9-9-2004, the plaintiff has nowhere mentioned that the defendant No,1 has failed to commercialize the suit plot which further shows that no commercialization, as claimed by the plaintiff, was to be carried out by defendant No,
1. He concluded his arguments by submitting that it was the plaintiff who avoided completion of transaction within the stipulated time without any lawful justification and therefore the plaintiff having failed to establish that he at all material times was ready and willing to purchase the plot, he is not entitled to the equitable relief of specific performance. He prayed for the dismissal of the suit.
11. Mr. H.A. Rehmani in reply to the arguments of Defendants' counsel argued that the plaintiff statements made in his affidavit-inevidence with regard to commercialization have gone unchallenged. He also argued that the outright refusal on the part of the defendant No,1 to complete the transaction in its legal notice, dated 6-9-2004 demonstrate that it was the defendant No,1 and not the plaintiff who refused to complete the sale transaction. He therefore submitted that the plaintiff is entitled to the relief of specific performance and suit be decreed.
12. It has come in evidence that before the execution of sale agreement, the defendant No,1 got the suit pot commercialized from Karachi Building Control Authority and certain steps were also taken for getting it commercialized from the Ministry of Works and Housing, Government of Pakistan but his process of commercialization fiom Ministry of Works and Housing, was not finalized. It has also come in evidence that at the time of execution of sale agreement, the defendant No,1 did not take upon itself to get the suit plot commercialized from the Ministry of Works and Housing, Government of Pakistan. On the contrary clauses 6 and 7 of the agreement to sell as originally proposed by the plaintiff in this regard was deleted with the consent of the parties as defendant No,1 was not agreeable to take upon itself the remaining process of commercialization from the Ministry of Works and Housing, Government of Pakistan. The whole case of the plaintiff in the plaint and in evidence was that there was an agreement that defendant No,1 would get the suit plot commercialized from Ministry of Works and Housing, Government of Pakistan and only thereafter the plaintiff was obliged to make payment of the balance sale consideration. In his cross- examination, the defendant No,2, who is managing director of defendant No,1, has stated that when he noticed clause 6 of the agreement to be contrary to what was agreed upon between the parties, he sought its omission. This piece of evidence has gone unchallenged.
13. Furthermore, this Court while hearing the injunction application C.M.A. No, 6360 of 2004 also took note of the legal effect of such deletion and dismissed the injunction application vide order, dated 12-9-2005. I shall reproduce relevant paragraphs of this order, which is authored by my learned brother Mr. Mushir Alam J:---
(5) Mr. Afsar Abidi learned counsel of the plaintiff contends that it was represented that plot is commercial. According to him the plot is still residential and, therefore, unless the commercialization is effected the plaintiff is not obliged to pay balance consideration. It was further stated that defendants failed to fulfil their obligation under the agreement and cannot be allowed to wriggle out on any count whatsoever.
(6) It was contended that, time was essence of the contract. Penal clause in the agreement required that on failure to make payment on or before the date as fixed by mutual agreement, the defendants were entitled to forfeit the amount. It was further urged that, much after the deadline fixed in the agreement (i,e, 8-8-2004) through a notice, 6-9-2004 (page 41 of the file) he was called upon to pay the damages as stipulated in the agreement. It was therefore urged that, to counter such demand for damages instant suit has been filed. Learned counsel for the defendants contends that the defendants are entitled for the recovery of the damages as stipulated under the penal clause and that no case for specific performance is made out.
(8) Whether the time is essence of contract or otherwise, could be ascertained from the terms of the agreement and other attending circumstances. Generally in agreement for sale of immovable property, time is not the essence of the contract. However, parties may consciously bind each other for due performance within stipulated time and seek strict compliance on failure penal consequence may be provided in the agreement.
(9) Mr. Abidi was confronted as to whether at any point in time, plaintiff demanded copies of plot documents or demanded that conversion of the residential plot into commercial be procured as was urged before this Court now. In response Mr. Abidi took me through reply to legal notice, dated 9-9-2004. He also extensively read the agreement of sale and emphasized clauses 4 and 14 of the agreement. For the benefit of appreciation clauses 1 to 5 and 14 are reproduced hereinunder:--- ........ (sic) .......
(10) On examination of clause 1 above, it is apparent that, time for completion of transaction was fixed as 8-8-2004. Time for finalization of transaction was again specifically mentioned in clause 5 to be on or before 8-8-2004.
(11) Contention of Mr. Abidi that copies of the documents were not provided to ascertain title of the defendant that caused delay in finalization. Contentions appears to be afterthought, no such demand was made by the plaintiff in reply to legal notice, I have gone through the reply with learned counsel for the plaintiff. Mr. Abidi was not able to read out a single sentence as regard non supply of title documents. Even otherwise such assertion raised now cannot be given any credence. In terms of clause 4, as reproduced above, documents of title were required "for examination and verifications for completion of the sale transaction and publication in local newspaper". On his own showing, plaintiff placed advertisement in daily Dawn, dated 29-7-2004 inviting objections to the proposed transaction of sale of commercial property. Admittedly, no objections were received. Advertisement in normal and natural course of events must have been placed after receiving copies of title of documents. In para.4 of the plaint plaintiff admits to have received the copies of the title documents. It does not sound to reason that a person entering into sale transaction of a valuable plot and paying substantial advance would enter into any deal without verifying title of the vendor.
(12) Adverting to other contention of Mr. Abidi that the defendant misrepresented that subject plot is commercial as appears from the recital of the agreement. It was urged that it is defendants who are in breach, therefore, plaintiff cannot be made to suffer for no fault on his part. Arguments seemingly persuasive, when examined were found to be fallacious. I have gone through entire agreement with the learned counsel. Indeed subject plot in the recital has been described as "Commercial Plot of land bearing No,2/232-B, measuring 1000 square yards" preceding words "building constructed on" have been scored off. Clauses 6 and 7 of the agreement specifically stipulating the obligation on the part of the defendant for payment of commercialization dues to "concerned departments" has been specifically deleted and initialed by both the parties. It cannot therefore, be asserted that defendant misrepresented the suit plot to be commercial plot or that, it was obligatory on the part of defendants to obtain commercialization. Once the parties consciously delete a clause or stipulation, in the agreement, imposing any obligation on any of the party, specific performance of such stipulation cannot be enforced. Plaintiff will not succeed even if plea of misrepresentation on the part of defendant is taken on its face value. In case of misrepresentation by promisor, the promise at his option may rescind the contract with whatever deficiency as may be complained of. Promisee cannot be allowed to blow hot and cold in the same breath. Plaintiff cannot have the cake and eat it as well.
14. This Court while finally deciding the suit need not necessarily have to adopt the interpretation and observations that are made by the E Court while disposing of injunction application but then nothing has come in evidence to deviate from such interpretation. It is an admitted F position that clauses 6 and 7 of the agreement were deleted at the time of execution of the agreement to sell. It is well-settled principle of interpretation that when there is a written contract between the parties then nothing can be read more than what is written therein. No term said to be orally agreed is to be implanted or supplanted in a written contract. It is also a rule of evidence, as laid down in section 103 of Qanun-eShahadat Order, 1984, that if the parties intend to .Add, vary, contradict G or delete any term of a written contract then they must do this as well in writing. Any addition, variation, contradiction or deletion of a written contract said to be arrived at by the parties orally, is of no value and no party is even allowed to lead evidence to prove such oral agreement if it pertains to variation, deletion or contradiction of any term of a written contract. I have examined the terms of the agreement to sell in some detail in order to see if there was any agreement to sell in some detail in order to see if there was any stipulation under which the defendant No,1 had taken upon itself to get the plot commercialized from Ministry of Works and Housing, Government of Pakistan, before it could be transferred to the plaintiff and I have found that there is none. The stipulation in the form of clauses 6 and 7 were scored off at the time of execution of the agreement to sell thus there was nothing to show that it was the defendant No,1 which failed to fulfill any obligation under the contract that prevented the plaintiff from finalizing of the transaction.
15. It has undisputedly come on record that plaintiff was not agreeable to complete the transaction unless the suit plot is I commercialized from Ministry of Works and Housing, Government of Pakistan. This insistence on the part of the plaintiff was not based on any stipulation in the contract.
This establishes the fact that the plaintiff was not ready and willing to complete the sale transaction. At the stage of arguments, the plaintiff dropped his demand for commercialization but I then it would not wipe out the fact that at the relevant time, the plaintiff has failed to demonstrate his readiness and willingness to complete the transaction in terms of the Cont act. I would now examine the question as to what is the legal effect of unwarranted , avoidance on the part of a party to a contract and what are the rights and obligations of the parties to a contract for sale of immovable property?
16. In a transaction for sale of immovable property, time is never considered to be of the essence of the contract unless it is specifically made so in the contract itself. Such a contract continues to remain enforceable as it was before the expiry of the time specified therein and continues to bind the parties. A party cannot unilaterally put an end to such a contract. But then parties have to perform their part of the obligation within reasonable time. A party cannot be allowed to enjoy the entire duration of three years within which a suit for specific performance of the contract can be brought before the Court. Even in contracts where no time for performance is provided, section 46 of the Contract Act mandates that the same has to be performed within reasonable time. In contracts where time is not of the essence, and party' fails to perform its contractual obligations within the specified time then an aggrieved party has to call upon the defaulting party to perform the contract within a reasonable period. This is to be done by serving notice on the defaulting party, thereby making time essence of the contract and gaining the option to unilaterally treat the contract as terminated at the expiry of the notice period.
17. Where the seller fails to complete the transaction within the specified time then the buyer, at his option, may either choose to sue the seller for specific performance of the contract and while doing so he may also seek damages, either in the alternative or in addition to the relief of specific performance, against the seller for any loss that may have occasioned to the buyer. However, on account of seller's failure to perform, the buyer also intends to discharge himself of the obligations arising from the contract then the buyer has to first serve notice upon the seller giving him reasonable time to complete the transaction. Serving of notice makes the time essence of the contract. In case the seller still does not come forward to complete the transaction within the notice period, the buyer becomes entitled to treat himself discharged from his contractual obligations and seek return of all monies that he has paid to the seller under the contract.
18. Where the buyer fails to complete the transaction within the specified time and the seller intends that he (seller) should be discharged of his contractual obligations under the contract then the seller must also serve legal notice on the buyer in the same manner as the buyer is to serve on the seller. When buyer fails to perform his contractual obligation within the notice period, the seller stands discharged of his contractual obligations. He then becomes entitled to forfeit the earnest money and, at his option, sue the buyer for damages for any loss that may have occasioned to the seller on account of non-performance of the contract by the buyer.
19. Now that should be the reasonable notice period to make time the essence of the contract which otherwise was not? In my view a notice period of at least thirty days is reasonable period of time for making time essence of the contract within which a defaulting party has to complete the transaction. It may however be clarified that a party which seeks discharge of its obligations arising from the contract need not have to serve notice in the manner stated above, when the other party has already communicated in writing its refusal to perform the contract. The refusal in writing by a defaulting party by itself demonstrates inappropriate conduct, justifying unilateral rescission of the contract by the aggrieved party, in case it does not wish to seek specific performance of the contract. Thus upon refusal in writing, the contract instantly becomes voidable at the option of the aggrieved party. This difference between refusal in writing to perform the contract and failure to perform must always be kept in mind. Therefore, in order for an aggrieved party to discharge itself of the obligations arising from the contract, notice is required to be served on the defaulting party only when there is failure of the defaulting party to perform its contractual obligations and not when there is outright refusal in writing.
20. It may however be further clarified that where a seller either fails or refuses to convey the plot and the buyer is interested in seeking conveyance of the property, then in order for the buyer to succeed in his suit for specific performance, it is incumbent upon the buyer to demonstrate that he is and at all material times was ready and willing to perform his part of the contract. One of the requirements of demonstrating ready and willingness of the buyer is that he does not keep quiet for weeks altogether merely because the seller has either failed to perform his contractual obligations or through his improper conduct has avoided or unnecessarily sought extension in the completion of the transaction. If the seller fails to perform his contractual obligations within the specified time, then immediately after expiry of the stipulated period, the buyer should diligently seek enforcement of his rights under the contract by calling upon the seller in writing to complete the transaction. The Court would not grant the decree for specific performance merely because statute of limitation entitles a buyer to file suit for specific performance within three years from the date stipulated in the contract for its performance. After the expiry of the time specified in the contract if the buyer unnecessarily tries to extend finalization of the transaction on unwarranted grounds, then in such eventuality, the Court shall deny the buyer the relief of specific performance of the contract.
21. Thus, the failure on the part of the buyer may not entitle the seller to unilaterally repudiate the contract without first serving notice in P the manner discussed earlier, but failure on the part of the buyer coupled with improper insistence on getting the suit plot commercialized has certainly established that he was not ready and willing to perform his contractual obligations at all material times thereby disentitling him the Q equitable relief of specific performance of the contract. In case the undue avoidance to complete the contract on the part of the buyer is ignored on the ground that time is not the essence of the contract then it would amount to thrusting the contract upon the seller for no fault of his own. This may result in irreparable financial loss to the seller. Immovable properties are sold for no ordinary reasons. In the present day inflationary economy, the prices of real estate fluctuate rapidly. If the conduct of the buyer which is intended to unnecessarily protract the finalization of the transaction is overlooked or condoned, then the same may unduly benefit, the buyer on the one hand acid at the same time keep the seller tied to the contract to his disadvantage. This would certainly create inequitable balance between the two contracting parties leading to miscarriage of justice. Therefore, once undue avoidance to complete the transaction on the part of the buyer, at any material stage, is established, the Court has to assume that the buyer has failed to demonstrate that he was ready and willing to perform his part of the contract. This assumption is to be made irrespective of the fact that time was not the essence of the contract and the seller has not put an end to the contract by serving notice upon the buyer.
Thus, when it is established that at any stage that the buyer was not ready and willing to perform his part of the bargain, then the Court would not thrust upon the seller the contract for the reason that time is not the essence of the contract but it would deny the buyer the discretionary and equitable relief of specific performance of the contract.
22. In view of the above discussion, I am of the considered view that the plaintiff, without any contractual or lawful excuse, insisted on defendant No,1 to complete the commercialization of the suit plot from Ministry of Works, Government of Pakistan when there was no such stipulation in the agreement to sell. The suit plot was commercialized by Karachi Building Control Authority. The fact that it would have gained complete commercial status when it is also commercialised from Ministry of Works, Government of Pakistan is a different matter. The suit plot in its present form was still transferable and sellable and this is what has been agreed to be sold by defendant No,1. The insistence of the plaintiff on its commercialization from Ministry of Works demonstrates that he wanted to read into the contract a stipulation which was not there. In fact clauses to that effect, which were proposed by the plaintiff, were scored off with the consent of both the parties at the time of execution of the agreement. All this goes to show that it was the plaintiff who avoided the completion of the transaction without any just cause and therefore proved that he, at all material times, was not ready and willing to perform his part of the contract. The case-law cited by the plaintiff's counsel pertain to the legal questions and principles that (i) mere fact that time fixed in the contract for performance does not make it the esseace of the contract (ii) vendee not bound to make payment of balance consideration till the vendor has put the property in condition in which the same is to be conveyed (iii) under building regulations which authority is to issue final NOC. There is no cavil with the ratio of these decisions but in view of the findings on fad, as has been discussed above, the plaintiff has failed to establish that defendant No,1 was contractually obligated to get the suit plot commercialized from Ministry of Works and Housing, Government of Pakistan. The plaintiff therefore has failed to successfully demonstrate that he at all material times was ready and willing to perform his part of the contractual obligation. Therefore, the case-law cited by plaintiff's counsel is of no help to the plaintiff's case. Hence, the plaintiff is not entitled to the relief of specific performance. The Issues Nos.2 to 5 are answered accordingly.
23. However it is noticed that under clause 3 of the agreement defendant is entitled to forfeit only such amount which was paid to him in advance. Clause 3 reads as follows:- "Clause 3 Similarly if the Vendee fails to perform his part of 1 commitment or fails to make payment of the , balance sale consideration within stipulated time the vendor shall be entitled to forfeit the advance money already paid by the Vendee to the Vendor and the agreement shall be treated as cancelled."
24. Under clause 3 of the agreement it was stipulated that in case the purchaser fails to perform his part of the obligation, the seller shall be entitled to forfeit the advance money already paid by the purchaser to the seller. A sum of Rs,5,00,000 only was paid as advance money. It is this sum only which is to be forfeited. The other payments were made subsequently after the payment of the advance sum of Rs,5,00,000 was paid and therefore such other payments amounting to Rs,95,00,000 cannot be termed as advance payment. The defendant No,1 therefore is entitled to forfeit Rs,5,00,000 only. The defendant No,1 is directed to return the remaining amount of Rs,95,00,000 back to the plaintiff within 45 days from the date hereof. In case defendant No,1 fails to make the payment within 45 days, the executing Court shall effect its recovery from the sale of the suit plot, after due notice to the defendants. Till recovery of the said amount, the defendants are restrained from selling the suit plot.
25. The suit is dismissed in the above terms.