AQEEL AHMED ABBASI,
1. Appellant through instant HCA has assailed order dated 4-11-2008 passed by learned Single Judge in Suit No,18/2003 dismissing/rejecting the plaint at the motion of the respondent/defendant . Under Order VII, rule 11, C.P.C. On the ground that the suit is barred by time.
2. Brief facts leading to controversy in hand, appears to be that the parties herein entered into an agreement of sale dated nil November 1996 in respect of land admeasuring 37 Kanals and 7 marlas (22650 square yards) or thereabout comprising Khasra Nos. 337/2/2, 338 and 339/2/2, Khatooni Nos: 610, 186 and 126. Khewat Nos. 356, 101 and 64 respectively subject to terms and conditions stated in agreement to sell (page 79).
3. On 7-1-2003 Appellant . (plaintiff) filed a suit bearing No,18/2003 seeking specific performance, of agreement dated November, 1996, and perpetual injunction and recovery of damages against the respondent (defendant).
4. Respondent filed written statement as well as counter claim denying the averments in plaint.
Respondents raised several legal pleas including plea of limitation. The respondent also filed C.M.A.
329/2003 under Order VII, Rule 11, C.P.C. Seeking rejection of the plaint on various grounds, including 'that in terms of clause 2 of the agreement of sale conveyance was to be executed on or before 31- 12-1997, the suit having been filed on 7-1-2003 is hopelessly barred by time'.
5. The case of the appellant/plaintiff is that plaint can only be rejected if from any statement in the plaint the same is found to be barred by law. It was further contended that plaint could only be rejected if the same have not been filed within three years from the date on which the plaintiff has noticed that performance has been refused. It is further argued that time would not be deemed to be essence of contract for sale of immoveable property merely because the date was fixed in the agreement. According to the learned counsel for appellant in view of paras. 8 and 10 of the plaint the cause of action accrued in September, 2002 and then in December 2002 when the appellant/plaintiff noticed that performance has been refused and the respondent/defendant is trying to dispose of the property. It was further argued that in terms of clause 10 of the agreement, time was never the essence of the contract. In case of any breach by the vendee the vendor was entitled to markup only. It was further argued that on the date of performance mentioned in the agreement the defendants/respondent was not in a position to pass on clear title because of pending litigation and in view of para. 10 of the agreement the defendant/respondent has no right to cancel/terminate the agreement. To support his contention he has placed reliance on the following reported cases:-
(1) Muhammad Yaqoob v. Hakim Ali (2004 SCMR 584), Mst. Gul Shahnaz v. Abdul Qayoom Soomro (PLD 2002 Karachi 333).
(2) Javed Iqbal v. PASSCO (2004 CLC 478)
(3) Zaheer Ahmed v. Abdul Aziz (1983 SCMR 559)
(4) Messrs Galaxy Construction Limited v. Province of Sindh through Secretary, Highway Division of Communications and Works Deptt. (1994 MLD 754)
(5) Mst. Amina Bibi v. Mudassar Aziz (PLD 2003 SC 430)
(6) Syed Muhammad Saleem v. Ashfaq Ahmed Khan (1989 CLC 1883)
(7) Mst. Batul and others v. Mst. Razia Fazal and others (2005 SCMR 544)
(8) Ghulam Hussain Pakseema v. Ebrahim Saley Mayat (PLD 1964 (W.P) Karachi 388)
(9) Haji Sattar- Haji Muhammad v. Allah Rakhya Dhanji (PLD 1963 W.P. Karachi 786)
(10) Inam Naqshban v. Haji Shaikh Ijaz Ahmad (PLD 1995 SC 314); and
(11) M. Hannan v. Dr. Anwarul Hassan (2002 SCMR 361).
6. In the case of Muhammad Yaqoob (2004 SCMR 584), suit for specific performance of agreement dated 5-10-72 was filed on 31-1-1973, limitation was not in issue. In the case of Javed Iqbal (2004 CLC 478) controversy related to sale of wheet, and Court having examined the terms concluded that "if in a contract, there is power of extension any provision of penalties, time would not be of essence of contract". In the case of Zaheer Ahmed (1983 SCMR 559) Civil Petition in a case where the suit was decreed for specific performance was declined, in cite case no controversy as to limitation was involved. In Messrs Galaxy Construction Limited (1994 MLD 754) related to lease of collection of toll tax. In Mst. Amina Bibi (PLD 2003 SC 430), in said case issue of limitation was not involved. In Syed Muhammad Saleem (1989 CLC 1883) Mst. Batul and others was considered on the strength of argument whether on the facts and circumstance of case time was the essence of the contract or not. In the case of Mst. Baitul (2005 SCMR 544) issue of limitation was not mooted, and Court having come to conclusion that where both the parties were at fault time cannot be held to be of essence of the contract. In Ghulam Hussain Pakseema (PLD 1964 (W.P) Karachi 388), it was ruled that intentions of the parties to prevail on the language used in the contract. In the case of Haji Sattar- Haji Muhammad (PLD 1963 W.P. Karachi 786) where the vendor had himself had not perfected the title in his favour by paying amount due under previous agreement to his seller cannot complain of non performance by the forward purchaser from him. In Inam Naqshban (PLD 1995 S 314); and M. Hannan is a case where no particular date was expressly fixed in the agreement, it was held case is not governed by Article 113 of the Limitation Act. Case of M. Hannan (2002 SCMR 361), in fact goes against the appellant. In cited case after the sale agreement the vendor inducted another person in the property in 1993, yet the plaintiff instead of seeking relief of specific performance sought relief before all other forum, suit for specific performance was filed in 1997 was held to be barred by time.
7. Mr. Mushtaq A. Memon learned counsel for the respondent/defendant; contended that the sale agreement was to be concluded finally on or before 31-12-1997. It was argued that except a sum of rupees fifty lac paid prior to agreement, which was treated as earnest money in the subject transaction and four lac paid as legal fees to two lawyers no amount has been paid, even the cheque dated 2-12-1996 issued for the second instalment payment was stopped.
8. Mr. Memon has heavily relied upon Article 113 of Limitation Act according to which, if date of performance is fixed in the agreement, limitation for filing the suit starts from that date so fixed. It was further contended that time was the essence of the agreement and by not making payment as stipulated in the agreement; the plaintiff had committed breach of the agreement and is not entitled to the specific performance of the agreement. According to Mr. Mushtaq A. Memon, time for would be reckoned from 31-12-1997 i.e, the date of final performance fixed in the agreement and since the suit has been filed on 7-1-2003, the same was hopelessly time-barred. In support of his contention he placed reliance on following case-law:--
(1) Haji Muhammad Yaqoob v. Shahnawaz (1998 CLC 21)
(2) Messrs Imperial Builders v. Lines (Pvt) Ltd. (PLD 2006 Karachi 593)
(3) Ali Muhammad Aslam v. Bilquees Begum (PLD 2008 Lahore 42)
(4) Muzaffar laved v. Haji Noor Bukhsh (2002 MLD 1474)
(5) Province of Punjab v. Muhammad Hussain (PLD 1993 SC 14)?
(6) S.M. Shafi Ahmed Zaidi v. Moulvi Hasan Ali Khan (2002 SCMR 338)
(7) Mst. Parveen Akhter v. Consulate General of U.S.A. (2006 MLD 1657)
(8) Mrs, Farm and Foods International v. Hamid Mehmood (2006 CLC 192)
(9) Moulana Nur-ul-Haq v. Ibrahim Khalil (2000 SCMR 1305)
(10) Muhammad Akram alias Akan v. Mst. Pathani (2001 MLD 1037)
(11) T.L Muddukrishna and another v. Smt. Lalita Ramchandra Rao AIR 1997 SC 772
(12) Mahboob Pasha v. Syed Zaheerudin and others AIR 1988 Karnataka 83
(13) AIR 1997 SC 2631
(14) Sirajul Haq Khan and others v. Sunni Control Board of Waqf AIR 1959 SC 198
9. The learned counsel for defendant/respondent further submitted that once the limitation in terms of written agreement has expired, same cannot be extended verbally. It was further argued that the alleged pending litigation was not related to the title of the land in question. In this regard he has placed and referred a charge showing the pending litigation. He further submitted that clause 10 of the agreement would come into play in case of default in payment of instalment during the continuity of the agreement and not after the final date fixed in the agreement. He further stated that before September, 2002 the appellant/plaintiff has not asked the defendant/respondent to perform the agreement. To this affect he ahs placed reliance on the following reported cases:--
(1) Haji Muhammad Yaqoob v. Shah Nawaz (1998 CLC 12); and
(2) Province of Punjab v. Muhammad Hussain (PLD 1993 SC 147)?
10. It was further argued by the learned counsel for the respondent/defendant that even the earnest money cheque dated 2-12-1996, which was required to be made in terms of para-2 of the sale agreement was stopped.
11. We have heard both the learned counsel and perused the record. It appears that the controversy revolves around the question of limitation, with particular reference to clauses 2 and 10 of the said agreement. In order to appreciate contentions of both the learned counsel, it will be appropriate to look back at the relevant term and conditions of the agreement which are reproduced as follows.
"2. That the sale consideration of the said property has been agreed to be Rs,13,59,00,000 (Rupees Thirteen Crores Fifty, Nine Lacs) only out of which the vendees have already paid a sum of Rs,50,00,000 Hasham through two cheques and the vendees have this day paid a sum of Rs,50,00,000 (Rupees fifty lacs) only through Cheque No, dated 2-12-1996 drawn on MCB Merewether Tower Branch, Karachi, the receipts whereof the vendor has separately executed and passed and does hereby admit and acknowledge i.e, Rs,12,59,00,000 (Rupees Twelve Crores fifty nine lacs) only shall be paid by the Vendees to the Vendor as follows:
(a) A sum of Rs,59,00,000 (Rupees Fifty nine lacs only) shall be paid by the Vendees to the Vendor on or before 2-1-1997 against the delivery of physical possession of the said property by the vendor to the Vendees free from each and every encumbrance and litigation along with execution of power of Attorney appointing one of the vendees as attorney of the Vendor with power to have the layout and building plans approved/amendment obtain permission for advertisement and premises-wise sale of the premises proposed to be constructed and commence construction work on the said property at the costs and expenses of the Vendees.
(b) A sum of Rs,3,00,00,000 (Rupees Three Crores only) shall be paid by the Vendees to the Vendor on or before 28-2-1997.
(c) A sum of Rs,3,00,00,000 (Rupees Three Crores only) shall be paid by the Vendees to the Vendor on or before 30-6-1997.
(d) A sum of Rs,3,00,00,000 (Rupees Three Crores only) shall be paid by the Vendees to the Vendor on or before 30-9-1997 and the balance i.e, Rs,3,00,00,000 (Rupees Three Crores) only on or before -31-12-1997 against execution and registration of the Deed of Conveyance of the said property conveying the said property, free from each and every encumbrance, to and in favour of the Vendees or nominees of the Vendees and delivery of all original title deeds in respect of and relating to the said property including these of the predecessors of the vendor by the vendor to the vendees.
10. That in the event the vendees fail or neglect payment of any installment stricty as per the time schedule the Vendees shall be liable to pay mark up at bank rate as liquidated damages to the vendor."
12. First payment of Rs,50,00,000 (Rupees fifty lacs) made to Hashim is admitted. Appellants have also not disputed that encashment of cheques for Rs,50,00,000 (Rupees fifty lacs) dated 2-12-1996 drawn on MCB, was stopped, it is however claimed that it was stopped at the request of respondent, which is denied.
13. Claim of the appellant/plaintiff that the time was not essence of the agreement as no consequence was provided in case of default by the parties. Whereas, the claim of the respondent/defendant is that the date of performance was fixed in the agreement and since the appellant/plaintiff failed to fulfil the contractual obligation they were not entitled to enforce specific performance. In this view of the matter reference to the provision of Article 113 of the Limitation Act was made, same is reproduced for the sake of convenience:- Description of suit Period of limitationTime from which period begins to run
113. For specific performance of a contract[Three years] The date fixed for the performance, or, if no such date is fixed, when the plaintiff has notice that performance is refused.
14. From the perusal of the provision Article 113 of the Limitation Act as reproduced above, it is evident that it caters for two situations; one when the time of performance is fixed in the agreement and the other when the time is not fixed in the agreement. In the first situation the starting point for limitation is 3 years from the date fixed for the performance of the agreement, whereas in the later situation the time starts from the knowledge of the vendee of refusal of performance by the vendor.
15. In the case reported as Mst. Kulsoom v. Mst. Mariyam; in 1988 CLC 870 we concur with the views as expressed in para 5 at page 874 as under:-- "We are also inclined to hold that it is a well settled position in relation to Article 113 of the First Schedule to the Limitation.
Act that if the date for performance of a sale agreement of an immovable property is specified therein, the period of three years shall commence from the specified date, but where no date for performance is mentioned in the sale agreement, the three years period will commence from the date of refusal to perform."
16. Similarly we fully subscribe to the opinion expressed in the case of Haji Muhammad Yaqoob v.
Shahnawaz (1998 CLC Karachi 21), in para. 14 at page 26 it was held as follows:-- "Evidently, the expression time being essence of the contract" has been used in the Contract Act not as a term of art but for connoting situation relating to remedies available to the non-breaching parties. The Limitation Act was enacted in 1908 i.e, long after the Contract Act, 1872 had been enforced and the legislature is presumed to know that existing state of law. Nevertheless, the legislature in its own wisdom did not provide that limitation in the first part of Article 113 would apply only when time of the essence of the contract and stipulated that whenever a contract was required to be performed on a specified date limitation had to be reckoned from that date, I, therefore, find no force in the submissions that the first part would be attracted only when time was of the essence of the agreement and not otherwise."
17. The apex Court in the case of Province of Punjab through Member Board of Revenue v.
Muhammad Hussain PLD 1993 SC 147 held that:-- "There is no principle known to law where under on expiry of full available period of limitation revival of cause of action afresh and running of the limitation period over again could take place either from the date of knowledge of the attornment of the tenants or on obtaining of possession."
18. Above judgments were also relied upon by the learned single Judge, learned counsel for the appellants was not able to distinguish the same. The principles enunciated in the referred case resounded in the cases relied upon by Mr. Mushtaq Memon learned counsel for the respondent.
19. Contention of Mr. Anwar Mansoor that litigation was pending against the respondents therefore amount was not paid is no justification to withhold payment of instalment. Even otherwise JM 184/96 and Cr.BA 267/96 admittedly were prior to sale agreement, rest of the five cases i.e, HCA 173/97, Cr.0 413/97, JM No,9/98, HCA 17/99 JM No,17/2000 mentioned in para. 3 of the plaint were all subsequent to the cut of date fixed for the performance of the sale agreement. There is nothing on record to show that the subject property was under any distress of litigation or for that matter either the appellant or the respondents were under any restrain or bound by any injunctive order in respect of subject property. Unless the property or parties are subject to any restraining order such plea could not be invoked to enlarge the period of limitation (See also Sirajul Haq Khan and others v. Sunni Control Board of Waqf AIR 1959 SC 198 para 19 @ 205).
20. Other contention of the learned counsel for the appellant that since per clause 10 of the agreement at the best appellant/plaintiff (vendees) would be liable to pay mark up at bank rate as liquidated damages to the respondent, similar arguments were repelled in the case from Indian jurisdiction reported as T.L Muddukrishan v. Lalitha Ramchanra Raw AIR 1997 SC 772. Any stipulation to pay interest or markup on delayed payment would not enlarge period of limitation, which would start running from the date so fixed by the parties in the agreement.
21. Examining instant case from any angle one comes to safe conclusion that the suit is barred under Article 113 of the Limitation Act. From what has been discussed above, it is clear that the question whether time is essence of the contract may be relevant consideration to foist the responsibility and or liability arising out of breach to determine which party is at fault. Position is very clear in case where the date of performance of the agreement to the sale is fixed in the agreement as provided for in the first part of Article 113 of the Limitation Act 1908, the limitation begins to run from the date fixed for the performance. Examining the case from other point of view, admittedly the appellant stopped the payment of cheque dated 2-12-1996 of fifty lac it was first breach on the part of the appellant. Secondly; as per sub clause (a) of Clause 2 of the agreement, a sum of 59 lac was to be paid by the appellant on or before 2-1-1997 against the delivery of possession, and execution of power of attorney by the respondent in favour of one of the appellant.
If at all respondent did not delivered the possession, nor execute general power of attorney in their favour per said clause, it could be taken as first refusal on the part of the respondent to perform the agreement and time under second part of Article 113 of the Limitation Act would begin to run from 2-1-1997.
22. It may be observed that the agreement was entered dated nil November 1996 for a total sale consideration of Rupees Thirteen Crore Fifty Nine Lac, out ,of which it appears that the appellant had paid a meagre sum of Rs,54,00,000 (Fifty Four Lac) only. From the year 1999 there is phenomenal rise in the value of real estate this Court had taken judicial notice of such fact in the case of Iqbal Ahmed v. Abdul Kabir 2005 YLR 1916 and deprecated the tendency of holding back the property after paying meager amount and approaching Court belatedly to seek specific performance.
23. In view of the foregoing we do not see any error in the order impugned, that may warrant any interference. Accordingly instant appeal is dismissed. However before parting with the judgment, it may be observed that the respondent have admitted to have receive a sum of Rs,54,00,000 (Rupees Fifty Four Lac). Where the agreement has run out of limitation and cannot be enforced, will not debar this Court, while dismissing the suit or rejecting the plaint under Order VII, Rule 11 C.P.C. As in the instant case, to direct the respondent/defendant/vendor to refund the amount so received in terms of section 65 of the Contract Act, we would therefore direct the respondent/defendant to refund the amount of 54,00,000 to the appellants/plaintiffs with markup at the rate of 2% above the rate fixed by the State Bank within 30 days from hereof. On refusal of the appellants to receive the amount, same be deposited with the Nazir of this Court within 15 days from the date of refusal (one may also refer to Muhammad Aslam v. Bilqees Begum 2008 CLD 28 para 9 (a 47-49 and T.L Muddukrishna and another v. Smt. Lalita Ramchandra Rao, AIR 1997 SC 772 para. 9 at 775).
Appeal stand disposed of in terms above.