' GULZAR AHMED, J.---These are two appeals arise out of a common judgment dated 25-6-2010 passed by a learned Division Bench of Lahore High Court, Lahore, by which the R.F.A. No,150 of 2007 was allowed. Civil Appeal No,285-L of 2010 is filed by Dr. Mian Anjum Habib, in which Waseem Ahmed Khan is the respondent while Civil Appeal No, 661 of 2010 is filed by Waseem Ahmed Khan, in which Dr. Mian Anjum Habib is the respondent. For ease of reference, Waseem Ahmed Khan hereinafter will be described as appellant while Dr. Mian Anjum Habib hereinafter will be described as respondent.
2. The brief facts of the matter are that the respondent was owner of property bearing No,22/A Block-K, Gulberg-II, Lahore. An agreement to sell dated 10-3-2003 was executed between the respondent and the appellant whereby the respondent agreed to sell the said property for a total consideration of Rs,1,50,00,000 to the appellant. An amount of Rs,10 lac was paid by the appellant to the respondent as an advance/earnest money. It was agreed that the appellant will pay an amount of Rs, 20 lakh when the respondent obtains completion certificate from LDA and another amount of Rs, 20 lakh will be paid by the appellant on or before 10-7-2003 on the condition that the respondent had obtained completion certificate and transfer letter in his name. Balance amount of Rs,1 crore was to be paid on or before 10-11-2003 on registration of sale deed. The agreement provided for extending the period from final date. Clause 10 of this sale agreement is as follows:-- "That in case the Vendee fails to pay the balance amount on or before 10th November, 2003, the advance amount paid by the Vendee shall be forfeited. In case the Vendor avoided to execute the sale deed and receive the balance amount, Vendor will pay double the amount of earnest money to cancel this agreement. The Vendee may get the sale deed registered in his own name or any other name as he may desire."
3. Through a further agreement dated 14-10-2003 the date of final payment/sale deed was extended till 1-3-2004. On 26-8-2003, the appellant paid Rs,15 lac to the respondent. On 5-12-2003, the appellant paid another sum of Rs,25 lakh to the respondent. The appellant thus paid a total sum of Rs,50 lakh to the respondent.
4. Another agreement dated 10-12-2003 was made between the parties wherein the respondent acknowledged having received payment of Rs,50 lakh from the appellant and the period of registration of sale deed was extended till 1-3-2004. Clause 5 of this agreemem is as follows:-- {{URDU TEXT}}
5. Through a further agreement dated 26-2-2004, the time for execution of sale deed and final payment was extended till 15-7-2004 and this was done at the request of the respondent. The appellant through a legal notice dated 7-7-2004 informed the respondent that the appellant is willing to make payment of balance sale consideration of Rs,1 crore and required the respondent to intimate his readiness for registration of the sale deed. No response to this legal notice was made and the respondent also failed to register sale deed and receive the balance consideration on or before 15-7-2004. On 16-7-2004, the appellant filed a suit for specific performance of agreement to sell and for possession. The suit was contested by the respondent, who filed his written statement and took preliminary objections, para 2 of which is as follows:-- "That the suit cannot proceed as the plaintiff has received the amount of 2 million through pay order No,842364 dated 13-7-2004 without any objection and thereby has impliedly and openly admitted cancellation of the agreement between the parties".
6. The trial Court, after framing of issues, and recording of evidence of the parties, through judgment and decree dated 15-12-2006 decreed the suit. During the proceedings of the suit, the trial Court while hearing the injunction application had directed the appellant to deposit in Court the remaining amount of Rs,1 crore, which was deposited by the appellant. The respondent being aggrieved of judgment and decree of the trial Court filed R.F.A. No,150 of 2007 and the learned Division. Bench of the High Court through its judgment dated 25-6-2010 allowed the said appeal and set aside the judgment and decree of the trial Court with direction to the respondent to pay to the appellant an amount of Rs,80 lakh being double the amount of Rs,40 lakh received by the respondent and in respect of Rs,10 lakh held that the respondent has proved paying of Rs,20 lakh (double amount of Rs,10 lakh) to the appellant. The learned High Court also observed that the amount of Rs,1 crore deposited by the appellant with the trial Court may be withdrawn by him. The said judgment of the learned High Court is impugned in these appeals.
7. We have heard the learned counsel for the parties at length and have gone through the record.
8. The main arguments of the learned counsel for the parties revolved around two points namely that the respondent has paid to the appellant the amount of Rs,20 lakh and thus has cancelled the agreement and secondly whether the provision for payment of liquidated damages for cancelling of agreement to sell will render the suit for specific performance not maintainable.
9. Syed Najjam-ul-Hassan Kazmi, learned Senior Advocate Supreme Court for the appellant has vehemently argued that the purported pay order of Rs,20 lakh alleged to have been sent by the respondent to the appellant was never received by the appellant and that the evidence on record also does not prove such fact. He has further contended that even if there be a provision of liquidated damages in the agreement to sell, the suit for specific performance will still be maintainable and in this respect while reading various provisions of the Specific Relief Act, 1877 has relied upon the cases of Syed Arif Shah v. Abdul Hakeem Qureshi [PLD 1991 SC 905]; Nisar Ahmed Afzal v. Muhammad Taj and 7 others [2013 SCMR 146]; P.D. Souza v. Shondrilo Naidu [(2004) 6 SCC 649]; Manzoor Ahmed Magray v. Ghulam Hassan Aram and others [(1999) 7 SCC 703] and Abdur Rahman v. Nasir Ali Khan [AIR 1931 Lahore 657]. On the other hand, Mr. Amir Alam Khan, learned Senior Advocate Supreme Court for the respondent has contended that the agreement being revocable, the same having been revoked by the respondent there was no agreement in the field which could be specifically enforced. He contended that the suit for specific performance was not maintainable. Learned counsel further contended that though the Court has been allowed discretion to grant relief of specific performance of an agreement but such discretion has to be exercised by keeping in view the facts and circumstances of the case more particularly in the present case where there is no subsisting agreement between the parties. He, therefore, has supported the impugned judgment and relied upon the cases of Shah Muhammad v. Inayat Ullah and others [PLD 1953 Lahore 87]; and Abdul Karim v. Muhammad Shafi and another [1973 SCMR 225].
10. It is apparent from record that initially the parties have entered into an agreement to sell the said property on 10-3-2003 and the appellant had paid to the respondent an amount of Rs,10 lakh as advance/earnest money. Clause 10 of the agreement had provided for its cancellation by the respondent by making payment of double the amount of earnest money. It is an admitted fact, on record that this stipulation in the agreement was not opted by the respondent but subsequent agreements were made by which time for execution of sale deed and payment of balance amount was extended. The appellant made further two payments one of Rs,15 lakh and the other of Rs,25 lakh and both these payments were received by the respondent. In the agreement dated 10-12- 2003, the respondent has acknowledged that he has received payment of Rs,50, lack, from the appellant and while the period for registration, of sale deed was extended up to 1-3-2004, clause 5 of this agreement specifically provided that in case the respondent avoids registry/transfer, he will pay double the amount he has received according to the market value and in the same breath it was also stipulated that the appellant will be entitled to approach the Court for obtaining registry/transfer. This, stipulation in the agreement dated 10-12-2003 abundantly shows that the previous stipulation in the initial agreement dated 10-3-2003 regarding cancellation of the agreement by returning double the amount of earnest money at the option of the respondent was materially altered for the reason that by the time this agreement was made, the respondent has received further two payments from the appellant towards consideration of the said property which led the parties to set up different terms with regard to the paying of the amount for avoiding implementation of the agreement by the respondent. The eventuality of returning double the amount of earnest money for cancelling the agreement was no more available to the respondent.
The only thing which the respondent could have done to avoid implementation of the agreement by him was by paying to the appellant double the amount received by him and that too as per market value. Admittedly, the respondent never paid this sum to the appellant. Further, it may be noted that the cancellation of agreement as per clause 10 of the initial agreement was given up also becomes manifestly clear by the fact that the appellant was allowed to approach the Court for obtaining registry/transfer. The only meaning that can be spelt out from this stipulation is that even if the respondent had paid double the amount received by him as per market value, the agreement will not cease but will remain operative for the appellant to have it enforced through Court of law for obtaining registry/transfer of the said property. Looked from this perspective, the only fair conclusion that can be reached on close scrutiny of the two agreements dated 10-3-2003 and 10-12-2003 is that there remained no option available to the respondent to cancel the agreement and purported cancellation of the agreement made by him per clause 10 of the agreement dated 10-3-2003 did not at all cancel the agreement made between the parties for selling of the said property.
11. The argument of the learned counsel appearing for the respondent in this regard appears to be too naive and cannot legitimately be accepted. The agreement remained alive and fully operative to be performed by the parties and the suit for specific performance in this regard was fully competent. Reference to various provisions of Specific Relief Act as regards the provision of liquidated damages being provided in the agreement for its cancellation and the discretion of the Court to enforce or not to enforce such agreement, in the facts and circumstances of the matter becomes irrelevant for that as per the agreed terms between the parties the agreement remained alive for its enforcement through a Court of law. For the same reason, we do not consider it necessary to discuss the case-law cited by the counsel for the parties.
12. It may, however, be noted that through a further agreement dated 26-2-2004 the time for registration of sale deed and payment of balance sale consideration was extended to 15-7-2004.
As the appellant apprehended that the respondent may not abide by the agreement, therefore, he through his counsel served a legal notice dated 7-7-2004 wherein he informed, the respondent of his willingness to pay the balance sale consideration and required the respondent to intimate his readiness for registration of the sale deed. No response to this legal police was made by the respondent and ultimately the appellant filed a suit for specific performance on 16-7-2004. On filing of the suit and while obtaining an interim order, on the direction of the trial Court the appellant admittedly has deposited in the trial Court the balance sale consideration of Rs, 1 crore.
Thus, the appellant has parted with the whole of the sale consideration for purchase of the said property from the respondent. We may also note that during the course of arguments before us, the learned counsel for the respondent has frankly conceded that the pay order of Rs,20 lakh said to have been sent by the respondent to the appellant has not been encashed.
13. Though it was argued before us by learned counsel for the appellant that neither the letter of cancellation of agreement nor pay order of Rs, 20 lakh was received by the appellant but as we have come to the conclusion that the very basis on which the cancellation of agreement was asserted by the respondent is found to be on misplaced premises and wrong assumption, therefore, it is not necessary for us to decide about the receipt of the said letter. In any case, neither the said letter is of any relevance nor does it cause any material change in the conclusion that we have reached in the matter.
' In our view, the learned Division Bench of the High Court despite having noted in the impugned judgment the entering of agreement dated 10-12-2003 by the parties and the appellant having paid Rs,50 lakh towards partial sale consideration of the said property to the respondent has gone on to accept the cancellation of the agreement on sending of a pay order of double the amount of earnest money of Rs,10 lakh. This conclusion of High Court, in our view, was not based upon correct reading and appreciation of the record of the case in hand and therefore such findings and conclusion of the High Court ex facie cannot be supported or maintained.
15. We, therefore, set aside the impugned judgment dated 25-6-2010 and allow Civil Appeal No 661 of 2010, filed by Waseem-Ahmed Khan and dismiss Civil Appeal No,285-L of 2010, filed by Dr. Mian Anjum Habib. Consequently, the judgment and decree passed by the learned trial Court is restored.
The parties are left to bear their own costs.