' MAMOON RASHID SHEIKH, J.--- The brief facts giving rise to this appeal are to the effect that the appellants entered into an agreement to sell dated 19-1-2007 ("the agreement") with the respondent in respect of a plot of land measuring 11 kanals, 2 marlas and 40 sq. Ft. And the house/superstructure constructed thereon commonly known as House No,162-N, Model Town (Extension), Lahore ("the property"), for a total consideration of Rs,1,00,00,000/-. At the time of the agreement the respondent paid Rs,20,00,000/- to the appellants, out of which amount Rs,1,00,000/- was paid as token money whereas Rs,19,00,000/- was paid as earnest money. The said amounts were paid by the respondent to the appellants through two cheques dated 19-1-2007 drawn on the Bank of Punjab, Model Town Branch, Lahore. The balance consideration in the sum of Rs,80,00,000/- was to be paid on or before 30-4-2007. It was further agreed that the sale-deed would be executed upon payment of the balance consideration. This was, however, subject to completion of the necessary formalities/documents by the appellants for transfer of the property with a clear and marketable title as the property was in the name of the appellants' predecessor-in-interest.
The sale-deed was, however, not executed and on 23-5-2008 the respondent filed a suit for specific performance of the agreement, permanent injunction, recovery of possession and damages against the appellants. Thereafter, on 8-7-2008 the appellants filed a suit for "cancellation of the agreement to sell with consequential relief". Both suits were resisted by the respective defendants. However, as common questions of facts and law were involved therein, on 20-6-2009, both suits were consolidated and the following consolidated issues were framed:
(1) Whether the plaintiffs are entitled to the cancellation of the agreement to sell on the ground as agitated in the plaint? OPP Faisal Waheed etc.
(2) Whether the plaintiff Sarfraz Khan Durrani is entitled to specific performance of the agreement and recovery of possession along with permanent injunction as asked for in the plaint? OPP Sarfraz Khan Durrani.
(3) Whether the plaintiffs have no cause of action to file the present instant suit? OPD
(4) Whether the plaintiffs are estopped by their own conduct to file the instant suit? OPD
(5) Whether the suit of the plaintiffs Faisal Waheed etc. Being not maintainable is liable to be dismissed with special costs? OPD
(6) Whether the suit of the plaintiffs, Sarfraz Khan Durrani being not maintainable is liable to be dismissed with special costs? OPD
(7) Relief.
2. The parties led their respective evidence and on the basis of the same the learned trial Court through a consolidated judgment dated 2-5-2011 decided Issues Nos.l to 4 and 6 against the appellants whereas Issue No,5 was decided against the respondent. As a consequence, the respondent's suit for specific performance was decreed whereas the appellants suit for cancellation of the agreement was dismissed.
3. Through the instant appeal the appellants have only challenged the decree dated 2-5-2011 in favour of the respondent whereby his suit for specific performance has been decreed.
4. The learned counsel for the appellants submits that the impugned judgment and decree dated 2-5-2011 has been passed by the learned trial Court by misappreciation of facts and misapplication of law. The impugned judgment is based on misreading and non-reading of evidence. Further submits that the learned trial Court failed to appreciate that by virtue of the provisions of sections 22(11) and 28(b) of the Specific Relief Act, 1877, the respondent's suit could not have been decreed. Also contends that the learned trial Court failed to appreciate that time was of the essence of the contract. Indeed, the main thrust of the learned counsel's arguments is based on this premise. The terms of the agreement relating to failure on the part of the respondent in performing his part of the contract (agreement) were quite clear in that in case the respondent did not pay the balance consideration in the sum of Rs,80,00,000/- on or before 30-4-2007 then the token money and the earnest money paid by him in the sum of Rs,1,00,000/- and Rs,19,00,000/- respectively was liable to be forfeited and as a consequence the agreement would stand cancelled. The respondent failed to pay the balance consideration within the stipulated period, therefore, the agreement stood cancelled. The learned trial Court has erred in holding otherwise.
Further contends that the learned trial Court failed to appreciate that subsequent to entering into the agreement with the respondent the appellants on 12-2-2007 entered into an agreement to sell with one Mian Abdul Karim for purchase of his House No,9-E, Punjab Cooperative Housing Society, Lahore, for a consideration of Rs,95,00,000/- and paid Rs,16,00,000/- to him as token money out of the sum of Rs,20,00,000/- the appellants had received from the respondent as token/earnest money under the agreement. The transaction under the subsequent agreement to sell was to be completed by the appellants on or before 30-4-2007. As the respondent did not pay the balance amount to the appellants in time, therefore, the subsequent deal made by the appellants fell through, with the result that the appellants suffered loss.
5. The learned counsel for the respondent controverts the stance of the learned counsel for the appellants. Contends that time was not of the essence of the contract. Indeed, the agreement was conditional inasmuch as the balance payment was to be made only when the appellants had completed the formalities/documentation re-transfer of the property. At the time of entering into the agreement i,e, on 19-1-2007 the property did not stand in the name of the appellants. As per the record of the Lahore Development Authority (LDA) (which is the controlling Authority of the property) the property still stood in the name of the predecessor-in-interest of the appellants. The property was subsequently transferred in the name of the appellants on 28-3-2007. As per the agreement the appellants were duty bound to inform the respondent that the formalities/documentation regarding transfer of the property had been completed as this was the basic stipulation contained in the agreement. The appellants, however, did not give any notice to the respondent in this respect nor did they demand that the balance payment be made. Further contends that the factum of the appellants having entered into a subsequent agreement to purchase the property from Mian Abdul Karim is an afterthought. The respondent was never informed by the appellants that they had entered into any such agreement. Even otherwise, the agreement between the parties has no nexus with the agreement entered into by the appellants with Mian Abdul Karim. Moreover, in the plaint filed by the appellants in their own suit and the written statement filed by the appellants in the respondent's suit no mention of the subsequent agreement has been made. Any evidence led by the appellants in this behalf could not have been read or considered by the learned trial Court which in fact it did not. It is a cardinal principle of law that evidence oral or documentary led by the parties beyond their pleadings cannot be read or considered by the Courts. Further contends that it has been established on the record that the respondent was ready and willing to perform his part of the agreement, however, the appellants kept on delaying the matter on one pretext or the other primarily with a view to extracting a higher price of the property from the respondent. Relies on the judgments reported as Malik Tanvir All and another v. Sardar Ali Imam and 2 others (2010 YLR 1799), Seth Essa Bhoy v. Saboor Ahmad (PLD 1973 SC 39), Ghulam Nabi and others v. Seth Muhammad Yaqoob and others (PLD 1983 SC 344), Abdul Hamid v. Abbas Bhai-Abdul Hussain Soda Water Wala (PLD 1962 SC 1), Mst. Amina Bibi v. Mudassar Aziz (PLD 2003 SC 430) and Muhammad Nawaz Khan and another v. Mst. Farrah Naz (PLD 1999 Lahore 238) in support of his contentions.
6. Arguments heard. Record perused.
7. The basic Issues which required determination for adjudication of the suits between the parties were Issues Nos.1 and 2 as quoted in para 1 above. The learned trial Court has decided both Issues against the appellants. The learned trial Court has based its decision partly on the contents of the agreement and partly on the oral evidence led by the parties.
8. The basic document, therefore, which requires examination for deciding the appeal is the agreement between the parties. The agreement is an admitted document and the original thereof has consequently been adduced in evidence as Exh.D/1. Both parties in support of their contentions have placed reliance on the terms 'and conditions contained in the agreement which are, inter alia, to the effect that the appellants agreed to sell and the respondent agreed to purchase the property for a total consideration of Rs,1,00,00,000/-. At the time of signing of the agreement on 19- 1-2007 the respondent paid a sum of Rs,20,00,000/- to the appellants by way of token/earnest money. The balance consideration in the sum of Rs,80,00,000/- was to be paid on or before 30-4- 2007. It was further mentioned in the agreement that the property is in the name of the predecessor-in-interest of the appellants and they have been declared as his legal heirs through a declaratory decree dated 18-12-2006 passed by the Civil Court, Lahore. The property is being sold by the appellants in their capacity as the legal heirs of their predecessor-in interest. It was further stipulated that the appellants are bound to complete the formalities and/or documentation in respect of the transfer of the property including but not limited to transfer of the property in their names in the record of the LDA on or before 30-4-2007. At the same time it was stipulated that if the respondent does not pay the balance consideration on or before 30-4-2007 then the token/earnest money would stand forfeited and the agreement shall stand cancelled.
9. Appellants Nos.2 and 3 entered into the witness-box as P.W.-1 and P.W.-2. They deposed that as the respondent had not completed the transaction by the cut-off date i,e, 30-4-2007, therefore, the appellants were no longer bound by the agreement. The appellants were within their rights to forfeit the token/earnest money as per the terms of the agreement and as a result the agreement was liable to be cancelled. However, during the course of cross-examination they admitted that at the time of entering into the agreement i,e, on 19-1-2007 the property still stood in the name of their predecessor-in-interest in the record of the LDA. They had been declared the legal heirs of their predecessor-in interest through a declaratory decree. It was, however, only on 28-3-2007 that the property was transferred in the record of the LDA from the name of their predecessor-in-interest in the names of the appellants. It was further admitted that the appellants did not give any notice to the respondent in respect of the transfer of the property nor did they give any notice to the respondent before 30-4-2007 for completion of the contract and/or payment of the balance consideration and execution of the sale-deed on/or before 30-4-2007. The evidence of the appellants also reveals that the appellants did not complete the other formalities for transfer of the property in the names of the appellants as stipulated in the agreement before the cut-off date. The learned trial Court has considered all these aspects whilst passing the decree against the appellants.
10. It is a well-settled principle of law that normally in cases other than commercial contracts that is to say in contracts relating to immovable property even when a date is mentioned for the performance of the contract time is not of the essence of the contract. It is also a settled principle of law that in determining whether time is of the essence of the contract or not the intention of the parties in this behalf has to be gathered from the contents of the contract itself and the facts and circumstances of the case. Reliance in this regard is inter alia placed on the judgments reported as Abdul Hamid v. Abbas Bhai-Abdul Hussain Soda Water Wala (PLD 1962 SC 1) and Seth Essa Bhoy v.
Saboor Ahmad (PLD 1973 SC 39).
11. The terms and conditions of the agreement have been given in some detail hereinabove. As will be evident the agreement is based on the principle of reciprocity. Both parties were to fulfil certain conditions. The appellants were responsible for completing all formalities for passing on a marketable title to the respondent. Admittedly at the time of entering into the agreement the property did not stand in the names of the appellants. It was after a passage of two months that the names of the appellants were entered into the record of the LDA as the owners of the property in place of their predecessor-in-interest. The appellants admittedly did not give any notice of this fact to the respondent. The appellants similarly failed to give any notice to the respondent for due performance of the agreement by 30-4-2007. The respondent on the other hand has shown his readiness to perform his part of the agreement by depositing the balance consideration in the amount of Rs,80,00,000/- in the Government Treasury albeit on the direction dated 8-7-2009 of the learned trial Court.
12. We therefore, tend to agree with the learned counsel for the respondent that in the facts and circumstances of the case time is not of the essence of the contract. The contention, therefore, of the learned counsel for the appellants that the learned trial Court failed to appreciate that time was of the essence of the contract is repelled.
13. The learned counsel for the appellants placed reliance on sections 22(11) and 28(b) of the Specific Relief Act, 1877, to contend that the impugned judgment and decree could not have been passed in the facts and circumstances of case. In order to appreciate the contention of the learned counsel the provisions of the said sections are being reproduced hereunder for ease of reference: Section 22 of the Specific Relief Act, 1877 "22. Discretion as to decreeing specific performance.--- The jurisdiction to decree specific performance is discretionary, and the Court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the Court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a Court of appeal.
' The following are cases in which the Court may properly exercise a discretion not to decree specific performance: ' Where the circumstances under which the contract is made are such as to give the plaintiff an unfair advantage over the defendant, though there may be no fraud or misrepresentation on the plaintiff's part.
(a) Illustrations tenant for life of certain property, assigns his interest therein to B. C contracts to buy, and B contracts to sell that interest. Before the contract is completed, A receives a mortal injury from the effects of which he dies the day after the contract is executed. If B and C were equally ignorant or equally aware of the fact, B is entitled to specific performance of the contract.
If B knew the fact, and C did not. Specific performance of the contract should be refused to B.
(b) ' A contracts to sell to B the interest of C in certain stock-in-trade. It is stipulated that the sale shall stand good, even though it should turn out that C's interest is worth noting. In fact, the value of C's interest depends on the result of certain partnership-accounts, on which he is heavily in debt to his partners. The indebtedness is known to A, but not to B. Specific 'performance of the contract should be refused to A.
(c) A contracts to sell and B contracts to buy certain land. To protect the land from floods, it is necessary for its owner to maintain an expensive embankment. B does not know of this circumstance, and A conceals it from him. Specific performance of the contract should be refused to A.
(d) A's property is put up to auction. B requests C, A's attorney, to bid for him. C does this inadvertently and in good faith. The persons present, seeing the vendor's attorney bidding, think that he is a mere puffer and cease to complete. The lot is knocked down to B at a low price.
Specific performance of the contract should be refused to B.
II. Where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance would involve no such hardship on the plaintiff.
Illustrations
(e) Omitted by the Specific Relief (Amendment) Ordinance, XXII of 1983, S.3.
A and B, trustees, join their beneficiary, C, in a contract to sell the trust-estate to D, and personally agree to exonerate the estate from heavy encumbrances to which it is subject. The purchase- money is not nearly enough to discharge those encumbrances, though, at the date of the contract, the vendors believed it to be sufficient. Specific performance of the contract should be refused to D.
(g) A, the owner of an estate, contracts to sell it to B, and stipulates that he, A, shall not be obliged to define its boundary. The estate really comprises a valuable property, not known to either to be part of it. Specific performance of the contract should be refused to B, unless he waives his claims to the unknown property.
' A contracts with B to sell him certain land, and to make a road to it from, a certain railway station. It is found afterwards that A cannot make the road without exposing himself to litigation.
Specific performance of the part of the contract relating to the road should be refused to B, even though it may be held that he is entitled to specific performance of the rest with compensation for loss of the road.
(h) A, a lessee of mines, contracts with B, his lessor, that at any time during the continuance of the lease B may give notice of his desire to take the machinery and plant used in and about the mines, and that he shall have the articles specified in his notice delivered to him at a valuation on the expiry of the lease. Such a contract might be most injurious to the lessee's business, and specific performance of it should be refused to B.
A contracts to buy certain land from B. The contract is silent as to success to the land. No right of way to it can be shown to exist. Specific performance of the contract should be refused to B.
(k) A contracts with B to buy from B's manufactory and not elsewhere all the goods of a certain class used by A in his trade. The Court cannot compel B to supply the goods, but if he does not supply them, A may be ruined, unless he is allowed to buy them elsewhere. Specific performance of the contract should be refused to B.
' The following is a case in which the Court may properly exercise a discretion to decree specific performance: III. Where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance.
Illustrations ' A sells land to a railway-company, who contract to execute certain works for his convenience.
The company take the land and use it for their railway. Specific performance of the contract to execute the works should be decreed in favour of A.
Section 28 of the Specific Relief Act, 1877 "28. What parties cannot be compelled to perform: Specific performance of a contract cannot be enforced against a party thereto in any of the following cases; (a)
(b) if his assent was obtained by the misrepresentation (whether willful or innocent), concealment, circumvention or unfair practices, of any party to whom performance would become due under the contract, or by any promise of such party which has not been substantially fulfilled;
(c) ' As will be clear section 22 of the Act, ibid, confers a discretionary power on the Court to decree a suit for specific performance, however, the discretion of the Court is not arbitrary and has to be exercised on sound and reasonable grounds guided by judicial principles. Section 22 of the Act, ibid, then goes on to give instances of Cases, which are two in number, where specific performance may be refused; and an instance of one case where a decree for specific performance may be granted. So far as the Cases for refusal are concerned the first one is where the plaintiff has an unfair advantage over the defendant and the second case which is relevant to the instant appeal, as urged by the learned counsel for the appellants, is where the performance of the contract would create some hardship to the defendant. The hardship contemplated by Case-II in section 22 of the Act, ibid, is to be of such a nature which cannot be foreseen by the parties at the time of entering into the contract. Although the learned counsel for the appellants has laid great stress on the provisions of Case-II of section 22 of the Act, ibid, yet he has been unable to establish from the record that performance of the agreement would give an unfair advantage to the respondent or indeed involves some hardship to the appellants which they had not foreseen at the time of entering into the agreement. The reliance, therefore, placed by the learned counsel for the appellants on the provisions of Case-II of section 22 of the Act, ibid, does not come to the aid of the appellants. We are fortified in our view on the basis of the judgment reported as Haji Barkat Ali v.
Tariq Mahmood (2002 YLR 3096).
' As to the applicability of section 28(b) of the Act, ibid, suffice it to say that the learned counsel for the appellants has similarly been unable to establish from the record any instances of misrepresentation, concealment, circumvention or unfair practice attributable to the respondent.
The contention of the learned counsel is, therefore, repelled.
14. As to the contention of the learned counsel for the appellants that due to the breach having been committed by the appellants the subsequent agreement entered into by the appellants for purchase of the property from one Mian Abdul Karim fell through thereby causing loss to the appellants suffice it to say that these facts have not been pleaded by the appellants in their pleadings in both suits. They have, however, led evidence in this behalf but the same can neither be read nor considered as it is a settled principle of law that a party cannot lead evidence beyond its pleadings. In the first place the trial court should not allow such evidence to be led, however, if such evidence is brought on the record the same is neither to be considered nor read. Similarly a party cannot be allowed to improve its case through evidence if its (fresh) stance has not been set up in the pleadings. Reliance in this regard is placed on the judgments reported as Muhammad Iqbal v. Ali Sher (2008 SCMR 1682) and Irshad Begum v. Muhammad Rafique (PLD 2010 Lahore 649).
The contention of the learned counsel is, therefore, repelled being misconceived.
15. Another factor which is worth noting is that although the appellants' suit for cancellation of the agreement was dismissed through the consolidated judgment and decree dated 2-5-2011 yet the appellants have not filed an appeal against the decree whereby the suit was dismissed. The learned counsel for the appellants has not been able to give a plausible explanation for non-filing of the said appeal by the appellants. This factor in itself goes to further weaken the appellants' case.
16. Under the circumstances, the appeal fails and is dismissed accordingly. The parties are left to bear their own costs.