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PLD 2010 Supreme Court 976

MUHAMMAD KHAN vs ABDUL MAJID and others

CitationPLD 2010 Supreme Court 976
CourtSupreme Court of Pakistan
Case No.Civil Appeal No,1568 of 2003
Date2010-04-19
Judge(s)Rehmat Hussain Jaffery, Nasir-ul-Mulk
ResultAppeal dismissed

' RAHMAT HUSSAIN JAFFERI, J.---The property admeasuring 62 kanals 16 marls, situated in square No,13 of Chak No,190/WB, Tehsil Mailsi, District Vehari, was owned by Muhammad Ismail. After his death, the property was devolved upon his two sons and two daughters viz. Abdul Majeed 1/3 share), Muhammad Ramzan (1/3 share), Mst. Sughra Bibi and Mst. Zahra Bibi (remaining shares).

On 20-11-1972, respondent No,1 on his behalf and on behalf of his above named brother (who was minor) and two sisters entered into agreement of sale of the suit property for a consideration of Rs,42,000 out of which he received Rs,5,000 as earnest money and Rs,2,500 subsequently. One .Of the conditions in the agreement was that if respondent No,1 could not transfer the property to the petitioner, then he would be liable to pay an amount of Rs,50,000 to the appellant. The said agreement is exhibited as Exh.P3. It was alleged that the respondents refused to execute the sale- deed and instead thereof they exchanged the property with the property of respondents Nos.5 & 6T -hence the suit for specific performance of the contract was filed.

2. The respondents contested the suit, denied the execution of the agreement and raised some legal pleas. Respondents Nos.5 & 6 took the plea that transaction of exchange of properties was bona fide and without notice of earlier agreement of sale.

3. The trial Court after examining the evidence led by the parties to prove their respective cases dismissed the suit, vide judgment and decree dated 23-07-1978. The appellant preferred appeal before the District Court. The appellate Court framed the opinion that the agreement was executed between the appellant and respondent No,1, who received an amount of Rs,7,500 and that the agreement was void in respect of Muhammad Ramzan as he was minor at the relevant time, whereas the agreement in respect of two sisters viz. Respondents Nos.3 & 4 was not binding upon them, as they were not party or signatory to the agreement. The appellate Court further formed the opinion that because the property was exchanged; the performance of the contract could not be fulfilled; the relief of specific performance is discretionary, therefore, in the circumstances, such discretion was not exercised in favour of the appellant; hence while maintaining the finding of the trial Court with regard to the dismissal of the claim of the specific performance of contract modified the decree of the trial Court to the extent that respondents Nos. 1 & 2 were directed to return the amount of Rs,7,500 to the appellant, under the judgment and decree dated 13-6-1981.

The appellant was dissatisfied with the said judgment, therefore, he preferred revision application before Lahore High Court, Multan Bench, Multan. The High Court maintained the judgment and decree of the appellate Court but modified the same to the extent of respondent No,2 Muhammad Ramzan by holding that he was not liable to pay the amount because he was minor under the impugned judgment dated 14-11-2002. Hence, the appellant has preferred the present appeal with leave of the Court, as per order dated 17-10-2003, which reads as under:-- "Leave is granted inter alia to consider whether discretion for not allowing specific performance of agreement has been properly and judicially exercised because while doing so the conduct of respondent No,1 who did not inform the petitioner about the conferment of proprietary rights in June 1974 and instead of calling upon him to perform his part of agreement he exchanged the land with the other respondents. The suit was filed promptly within few days of the said exchange when the petition came to know about it."

4. Learned counsel for the appellant has restricted his arguments only in respect of share of respondent No,1 and submitted that the contract to the extent of 1/3rd share of respondent No,1 could be performed by him; that the appellant is ready to perform his part of contract by paying the entire amount of the transaction to the respondent. In support of his contention, he has relied upon Imam Din v. Muhammad Din (AIR 1926 Lahore 136) and Pokhar Das v. Mela Ram (AIR 1927 Lahore 773(1). He has further contended that no fraud was committed by the appellant as it was specifically mentioned in the agreement that remaining part of the property was owned by his brother and sisters; that he would obtain the necessary permission from them to execute the deed and that the contract is legal and validly enforceable. He has also stated that exchange of properties between respondents Nos. 1 to 4 and respondents Nos.5 & 6 was illegal as the respondents Nos. 5 & 6 had notice of earlier transaction. He has relied upon Abdul Rehman v. Noor Ahmad (PLD 1974 Baghdad-ul-Jadid 25), Dinesh Chandra v. Satchidanand (AIR 1972 Orissa 235), Ranga Reddi v. Pitchi Reddi (AIR 1915 Madras 37) and Mary Joseph v. T.M.H. Moosa & Co. (AIR 1959 Madras 86).PAD

5. Conversely, learned counsel for respondents Nos.5 & 6 with whom the suit property was exchanged has stated that the contract was conditional because under the contract the property of other persons was agreed to be sold for which respondent No,1 had no authority; that a condition was mentioned in the contract that in case the other owners did not transfer the property then he would pay a penalty of Rs,50,000, that the conditions mentioned in section 15 of the Specific Relief Act have not been alleged or proved; that the authorities relied upon by learned counsel for the appellant are not applicable to the facts and circumstances of the case and that the contract cannot be performed in view of section 17 of Specific Relief Act. He has referred to Anwar Ahmad v.

Nafis Bano (2005 SCM R 152), Abdul Haque v. Shaukat Ali (2003 SCM R 74) and Salihu Powther v.

Sultan Moideen (AIR 1937 Madras 597).

6. Having heard learned counsel for the parties and perusing the record of the case, we find that respondent No,1 was not authorized to enter into agreement concerning the shares of respondent No,1, Muhammad Ramzan (minor) and respondents Nos.3 & 4, namely Mst. Sughra Bibi and Mst Zahra Bibi. Such finding has been confirmed by the High Court. The learned counsel for the appellant has also not pressed the specific performance of contract in respect of the shares of above-named three respondents, but vehemently argued that 1/3rd share of respondent No,1 can be transferred and the contract to the extent of his share can be performed and for that the appellant is ready to pay the entire amount and has taken protection under section 15 of the Specific Relief Act, 1877 (hereinafter referred to as 'the Act'). In support of his proposition, he has relied upon the above-mentioned authorities. There is no cavil to the proposition enunciated in the aforesaid authorities in respect of interpretation of section 15 but it further provides that the party must relinquish all claims to further performance and all right to compensation either for the deficiency or for the loss or damage sustained by him through the default of the other side. Section 15 is exception to section 17 of the Act under which a bar has been created by which the Court is not required to direct specific performance of a part of the contract except in the cases coming under sections 14 to 16 of the Act.

7. In order to appreciate the above point, section 15 of the Act is reproduced as under:-- "15. Specific performance of part of contract where part unperformed is large.--Where a party to a contract is unable to perform the whole of his part of it, and the part which must be .Left unperformed forms a considerable portion of the whole, or does not admit of compensation in money, he is not entitled to obtain a decree for specific performance. But the Court may, at the suit of the other party, direct the party in default to perform specifically so much of his part of the contract as he can perform, provided that the plaintiff relinquishes all claims to further performance, and all right to compensation either for the deficiency, or for the loss or damage sustained by him through the default of defendant."

' The above provision of law clearly stipulates and relates to a situation where the unperformed part is larger than the part, which can be performed, or for the unperformed part no compensation in money can be paid, then specific performance cannot be granted. Nevertheless, specific performance can be granted of such small part on the condition that the plaintiff relinquishes his claim to further performance, including a claim for compensation for the deficiency or for the loss or damage sustained by him through the default of the defendant.

8. From the above position, it is clear that two conditions are required to be fulfilled in respect of relinquishment of rights. Firstly, the plaintiff shall relinquish his claim to further performance and secondly, the relinquishment shall be towards claim for compensation for the deficiency or for the loss or damage sustained by him because of the fault of the defendant.

9. Thus, the plaintiff before taking the benefit of section 15 of the Act must assert and prove the above both conditions. In this connection, we have examined the plaint but did not find any averment concerning any of the conditions mentioned in section 15 of the Act but on the contrary the prayer of the plaintiff specifically shows that the appellant had prayed for specific performance of entire contract. The trial Court dismissed the suit of the appellant. He preferred appeal before the District Court. We have also examined the memo of appeal but could not find any averment or ground attracting any of the conditions mentioned in section 15 of the Act, particularly relinquishment of claim for compensation etc. So is the case of memo of revision application filed by him before the High Court as the averments are silent about the above two conditions and no ground has been taken to the said effect. Even in the judgments of the three Courts below, there is no observation that any written application was made by the appellant relinquishing the rights or claim etc. Mentioned in section 15 of the Act. However, before the High Court, learned counsel for the appellant argued as under:-- "Learned counsel for the appellant at the very outset has frankly conceded that the appellant cannot succeed for specific performance as against respondents Nos.2 to 4 in view of the fact that respondent No,2 was minor at the time of agreement and respondents Nos. 3 and 4 were not party to the disputed agreement, therefore, the prayer of the appellant is restricted to the extent of 1/3 share of respondent No,1 alone."

10. In spite of above oral plea taken by the appellant before the High Court, he did not state or make any ground or specific averment in the memo of appeal before this Court, relinquishing his right or claim to further performance or claim for compensation for the deficiency or for the loss or damage sustained by him through the default of the respondent No,1. The appellant in para 5 of the appeal, filed before this Court, stated as under:-- "Upon proof of agreements Ex.P.1, Ex.P/3 payment of advance money, and, the finding that plaintiff was ready and willing to perform his part of contract and Abdul Majid had broken it, whether specific performance of 1/3rd share in joint and owned by Abdul Majid could, in proper exercise of discretionary jurisdiction have been refused in the light of cases reported as PLD 1964 SC 807 (almost on all fours) PLD 1974 BJ 25, 1988 MLD 2904 (at page 2908), NLR 1989 AC 769 (sic) (para 10 at pages 772-73) and sections 14 to 17 of Specific Relief Act?".

11. Before this Court, the learned counsel for the appellant has argued that he is pressing the appeal in respect of the share of respondent No,1 only and that the appellant is ready to pay the entire amount of sale consideration. To support his contention, he has relied upon above-mentioned authorities. We are conscious of the fact that the conditions provided in section 15 of the Act can be taken at any stage of litigation till the final decision. On this proposition, the learned counsel for the appellant has relied upon Waryam Singh v. Gopi Chand (AIR 1930 Lahore 34). In this case also, one of the co-sharer had agreed to sell the property of other co-sharers but the other co-sharers did not agree, therefore, a written application was moved before the trial Court in which he stated that he would content if a decree of specific performance is passed in his favour for the share with further assertion that in that case he would be prepared to give up all claims; for further performance or to compensation for the deficiency. Similar prayer was also repeated in the memorandum of appeal presented before the High Court and that plea was accepted and it was held that it was open to the plaintiff to relinquish his claim to any part of the property in the suit on the condition specified in section 15 of the Act at any time before the suit is finally decided by the Court of appeal. Similar point was also considered by Supreme Court of India in the case of Kalyanpur Lime Works v. State of Bihar (1954 SC 165). In that case also, a written application was moved relinquishing all claims to further performance of right to compensation either for deficiency or for the loss or damage sustained by him for default of the defendant. The Court observed that relinquishment of claim to further performance and claim can be made at any stage of the litigation. The rule laid down in the case of Waryam Singh (supra) was approved.

12. In the present case, as already observed that the condition of relinquishment of all claims to further performance or right to compensation etc, as provided in section 15 of the Act has not been alleged or stated at any stage of the proceedings either in the plaint, or memo of appeal, revision application, appeal before this Court or moved any application before any Court. Therefore, the provisions of section 15 of the. Act in letter and spirit were neither alleged nor proved nor attracted in the peculiar facts and circumstances of the present case; hence the bar contained in section 17 would be operative in this case. Even otherwise, the agreement of 20-11-1972 cannot be specifically enforced as the parties had agreed that Abdul Majeed would compensate the appellant in case he is unable to obtain consent of the co-owners.

13. From the record, it appears that respondents Nos. 5 & 6 are bona fide purchasers of the property through exchange and without any notice, which factual aspect of the case has been confirmed by the High Court, therefore, such findings are not required to be interfered with.

14. In the light of what has been discussed above, we are of the considered view that the High Court has rightly ordered for the return of amount to be paid to the appellant. Consequently, the appeal has no merits and the same is dismissed.

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