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2019 LHC 2414

Muhammad Arif Choudhary vs Muzaffar Hussain and others

Citation2019 LHC 2414
CourtLahore High Court
Case No.Civil Revision No.577 of 2019
Date2019-06-27
Judge(s)Rasaal Hasan Syed
Resultaccordingly dismissed

Rasaal Hasan Syed, J.This judgment will decide civil revision petition which assails order dated 30.4.2019 of the learned Addl. District Judge, Kabirwala.

2. Muhammad Arif Chaudhry , petitioner herein, filed a suit for specific performance of agreements dated 04.5.2015, 05.6.2015 and 03.11.2018 in respect of land measuring 32 kanals 00 Marla in Mauza Jangal Ali Juppa, Abdul Hakeem, Tehsil Kabirwala, District Khanewal. An application under Order XXXIX, Rule 1 and 2, C.P.C. was filed with the plaint wherein the petitioner prayed for an order restraining the respondents from illegally dispossessing the petitioner , rescinding/cancelling the agreements, from alienating the property or encumbering the same, from presenting the cheques for encashment or from initiating any proceedings on the basis thereof against the petitioner . The learned Civil Judge, vide order dated 19.4.2019 directed issuan ce of summons/notices to the respondents through affixation and registered post, acknowledgement due and in the meanwhile granted ad interim injunctive order restraining the respondents from making further alienation of the suit property . In so far as the remaining part of the prayer in the applic ation, it was observed that "the petitioner has also prayed for injunction against initiation of criminal proceedings with respect to alleged cheques, which is expressly barred by section 56(e) of Specific Relief Act, 1877 as such the court is not persuaded to grant ad-interim injunction to this extent, which is turned down accordingly".

3. The petitioner challenged the ad interim injunctive order dated 19.4.2019 in appeal, which was decided by the learned Addl. District Judge vide order dated 30.4.2019 thereby partly granting conditional relief and sending the matter back to the learned trial court for decision of application for temporary injunc tion in accordance with law. The operative part of the order reads as under: - "4.As the parties have locked down in the litigation and findings of this court would prejudice the rights of parties before the learned trial court, therefore, I do not deem it appropriate to discuss merits of the case. However , while relying upon dictum laid down in case titled "Hamood Mehmood v. Mst. Shabana Ishaq and others" cited as 2017 SCMR 2022 the appellants are hereby directed to furnish the Bank Guarantee of Rs.1,51,06,667/-in respect of post-dated cheque No.12319753, for Rs.15,00,000/-, cheque No.12319754 , for Rs.35,00,000/-, cheque No.12319755, for Rs.50,00,000/-, and cheque No.12319756 for Rs.50,00,000/-, within fifteen days before the learned Trial Court. Respondents are hereby restrained from using the above said cheques against the appellant in any manner .

5. It is made clear that the Bank Guarantee if furnished by the appellant shall not be released in favour of any party without leave of the learned trial court. The learned trial before passing any such order shall satisfy itself that conditions of agreement to sell to be performed by either party are being fulfilled for releasing the amount.

6. The respondents who are present before this court have not yet joined the proceedings before the learned Trial Court, therefore, they are directed to file their written statement before the learned trial court on the date of hearing already fixed before the trial court i.e. 20.5.2019. The learned Trial Court shall therefore, decide the application for temporary injunction strictly in accordance with law and within short period of time...."

4. In the instant revision petition, the petitioner has impugned order dated 30.4.2019 of the learned Addl. District Judge to the extent of imposition of condition of furnishing bank guarantee equivalent to the amounts of cheques.

5. It has been argued on behalf of the petitioner that the petitioner could not be burdened with the additional responsibility of furnishing bank guarantee as a condition for the payment of cheques; the bona fide of the petitioner was above-board; the rights of respondents were adequately protected in the agreement and that in the peculiar circumstances of the case where the respondent was accused of having breached the terms of the agreement and failed to perform his obligations in respect of the transfer of the land for roads, and for obtainment of NOC, the petitioner could not further be burdened with additional liability of furnishing bank guarantee. The petitioners, therefore, requested for the deletion of the condition of furnishing bank guarantee.

6. In response, it was submitted on respondents' behalf that the petitioner committed to pay the amounts of cheque on the fixed date, time was of essence of the contract, and there being no pre-c ondition for the presentation of cheques as agreed in the alleged settlement, the petitioner 's demand to restrain the respondents from encashing the cheques was unfair , unjust and unreasonable. It was added that the petitioner 's own admission that the plots were carved, shops were transferred and payments were received from third parties, bars him from denying the respondents' right to recover the price of the land. It was added that the petitione r having himself agreed for the payment on the stipulated date in terms of the settlement, could not be permitted to volte-face particularly when he had recovered huge amounts in excess of the agreed price of the agreement from the third parties.

7. With a view to determine the matter in controversy , the submissions made have been considered in the light of the pleadings and other documents filed along with the revision petition. Facts as ascertained from the said material are that petitioner filed a suit for specific performance. Case set up by him was that the first agreement of sale was executed on 04.5.2015 in terms whereof the respondents agreed to sell land measuring 32 kanals in consideration of Rs. 6,00,00,000/-. Part payment was made in cash and through cheques as incorporated in the agreement itself. The petitioner claims that on getting verbal approval of respondent Nos. 1 to 3 he entered into an agreement with Mian Iftikhar Hussain son of Muhammad Hussain whereby he agreed to transfer the rights under the sale agreement in favour of Mian Iftikhar Hussain for Rs, 6,25,00,000/- and received Rs. 1,25,00,000/.

The petitioner asserted that his assignee was made to abide by the terms and conditions which he had agreed with the respondents for the intended purchase of the property.

8. Strange enough the petitioner also claimed that Mian Iftikhar Hussain entered into certain agreements with third parties and received certain payments. It appears from the plaint that trouble started with his alleged assignment which the respondents challenged. The respondents appear to have not agreed to the alleged arrangement between the petitioner and Mian Iftikhar Hussain which led to the multiple litigation as admitted in the plaint i.e. the respondents filed a suit for the rescission of the contract, the petitioner filed a suit for specific performance and Mian Iftikhar Hussain also filed a civil suit in respect of the same property on the basis of the alleged agreement with the petitioner . It is claimed by the petitioner that on 24.11.2016 a compromise was allegedly effected in result it was agreed that the balance sale price of Rs. 3,70,00,000/- will be paid in five installments. Later , as per petitioner alleged that a revised agreement dated 03.11.2018 was executed in terms wher eof, the payment schedule was agreed, certain other conditions were also accepted and that the compromise dated 03.11.2018 was filed in court as Ex.C.1. It is stated that all the suits were withdrawn. According to petitioner , the respondents allegedly failed to cooperate in the matter of transfer of certain portion of land to TMA which was necessary for the issuance of NOC and that due to alleged non-cooperative attitude of the respondents, the agreement could not be acted upon. In this backdrop the petitioner claimed the enforcement of the three agreements. For the linked purpose of deciding the matter under consideration at this stage compromise Ex.C.1 dated 03.11.2018 will be relevant to appreciate the real controversy . The petitioner claims that the respondents could not encash the cheques or sue the petitioner on the basis of the cheques, nor prosecute him by lodging a criminal case due to the non-encashment of the cheques and that the respondent could not either dispossess the petitioner or alienate the property . Temporary injunction was claimed in the application under Order XXXIX, Rule 1 and 2, C.P .C.

9. The learned Civil Judge granted adinterim injunction to the extent of alienation and refused to restrain the respondents from approaching the court of law to enforce their rights. The petitioner challenged the adinterim order in appeal. The learned Addl. District Judge, disposed of the appeal vide impugned order dated 30.4.2019 with the observation that the petitioner should furnish bank guarantee for the amount of cheques which would not be encashed without the permission of the court and that before allowing such permission the court shall satisfy that the terms and conditions of the agreement were duly complied with.

10. From the facts noted supra, it is manifest that the petitioner 's own case is now based on revised agreement dated 03.11.2018. Exfacie reading of the plaint and the agreement make it clear that by virtue of the first agreement dated 04.5.2015 the property was agreed to be sold for Rs. 6,00,00,000/-.Partial payments were made in advance through cash and cheque and for the payment of balance sale price time was fixed , and post-dated cheques were issued. The dispute appears to have started when the petitioner came up with the plea that he had entered into an agreement with third party namely Mian Iftikhar Hussain, in terms whereof he asserted that the rights were transferred to him without any written consent or permission of the respondents. The agreement ex-facie did not visualize any such assignment nevertheless the petitioner claims verbal consent and permission of the respondents which the learned counsel for the respondents in the course of arguments did not accept.

11. Litigation started in the above setting, between the parties that ultimately ended up in the compromise dated 03.11.2018 Ex.C.1. The perusal of the agreement leaves no doubt that initially the petitioner admitted that the balance sale price payable by him was Rs. 2,90,00,000/-. After recording the mode of partial adjustment of this sale price against plots, remaining balance outstanding was admitted as Rs. 1,51,06,667/- which was agreed to be paid in installments. Post-dated cheques were issued for the discharge of his liability.

Specific dates were given on the post-dated cheques. The agreement did not provide the performance of any specific condition by the respondent before the presentation of the cheques for encashment or for receiving payments against the post-dated cheques. The agreement Ex.C.1 dated03.1 1.18 shows that the acts agreed by the respondents were to be performed after the encashment of the cheques.

12. Instead of allowing the respondents to receive the payment by encashing the cheques, the petitioner opted to file the suit to restrain the respondents from presenting the cheque, encashing the same or taking any legal action on criminal side against him due to non-encashment of cheques. On the one hand the petitioner claimed a restraint against the respondents to refrain from receiving the amount of cheques while on the other hand the petitioner prayed for a restraint against alienation and dispossession. In this scenario, the learned Addl. District Judge, passed a very fair order , asking the petitioner to furnish bank guarantee for the cheque amount. Reason appears to be logical as specific dates were given in the cheques and if the respondents were to be restrained from encashing them, the same could not be presented for payment after expiry of fixed period; in result, except litigation nothing else could have been left for respondents to protect their interest. The injunctive relief claimed by the petitioner even otherwise appears to be unreasonable as having taken the possession of the property under the agreement admitting that he had made third party commitments without any permission and then admitting to compromise with the respondents and in the settlement agreement accepting liability, to pay the balance amount of Rs. 1,51,06,667/- through post-dated cheques to discharge of the liability the petitioner could not object to the encashment of the cheques. The payments were not conditional to the issuance of any NOC or the transfer of any property to TMA, rather the respondents were required to do their part after encashment of cheques which the petitioner prevented the respondents to do. The petitioner after admitting that he had made number of transactions with third parties, got certain sale deeds registered from the respondents in favour of the buyer, received huge payments from them, inducting third parties in different portions by receiving consideration, yet was not willing to pay the owners of the property the price of their land. Such conduct could not be approved.

13. In the matter of temporary injunction prima facie case is not the only requirement but other ingredients and factors like balance of convenience,irreparable loss, conduct of the parties, nature of the suit, time likely to be absorbed in it, and workability and reasonableness of the orders proposed to be passed. It has been consistently ruled that if by issuing an injunctive order the intention is to relieve a party from certain oppression, care should be taken at the same time to avoid oppres sion for the other party . The agreement Ex.C.1 clearly reveals that the dispute was resolved, on the assurance of timely payment of balance sale price for which post-dated cheques were issued. Time being the essence of the arrangement, non adherence thereto could create serious consequential effects. The petitioner therefore could not be permitted to avoid the performance of the commitment in the garb of the protective order of the court. It was in this backdrop that the learned additional District Judge appeared to have created a balance, while granting ad interim injunction, by requiring the petitioner to furnish bank guarantee for the cheque amount which being order fair and equitable does not call for any interference at this stage.

14. In the course of hearing learned counsel for the petitioner referred to the case of "Messrs Bin Bak Industries (Pvt.) Ltd. and another v. Friends Associates (Regd.) and others" (2003 SCMR 238) which had different and distinguishable facts, history and background. In the said case, the agreement was for the sale of land, machinery and structure. The buyer was empowered to demolish, remove and sell the machinery and structure, and apply the sale proceeds towards payment of the sale price. The mortgage charge was also to be satisfied by the buyer.

The owner had undertaken to deliver the possession of the remaining land which was not delivered thereby preventing the purchaser from developing the land, carving roads and blocks, inviting buyers and receiving payments from them so as to pay off the owner. And in those specific circumstances the requirement of the deposit of the balance sale price for injunctive relief was not considered to be appropriate. However, in the instant case the facts are altogether distinguishable. The initial agreement was breached by the buyer, resulting in litigation. Compromise was effected thereafter and parties executed revised agreement Ex.C.1 in terms whereof the petitioner undertook to make timely payments of balance sale price through post-dated cheques, which the petitioner wanted to avoid under the shelter of court order, therefore, to strike a balance and to protect the rights of the respondents as well, it was deemed necessary that the restraining order shall be subject to the furnishing of bank guarantee for the cheque amount. In "Manzoor Ahmad and 6 others v. Hamid Shah Gilani and another"

(1997 SCMR 1443)the honourable Supreme Court observed as under:- "7. ... we are of the view that the discretion exercised by the learned trial Court while granting ad interim injunction in favour of the respondent subject to the deposit of the balance amount in Court within reasonable time, is neither in excess of the jurisdiction vested in it, nor arbitrary in nature so as to warrant interference by the High Court. The respondent in already in possession of the plot and has been protected by interim injunction issued in his favor pending decision of the suit filed by him..."

The consistent rule laid by the honourable Supreme Court is that in a suit for specific performance the buyer shall voluntarily deposit the balance sale price to show his bona fide and non-deposit of such amount or waiting for the final decree to deposit the price, shall reflect upon the bonafide of the purchaser adversely. Reference can be made to the case of "Hamood Mehmood v. Mst. Shabana Ishaque and others"(2017 SCMR 2022) and "Rab Nawaz and 13 others v. Mustaqeem Khan and 14 others" (1999 SCMR 1362).

15. In view of the circumstances noted supra, the appellate court passed a fair, reasonable and just order to protect both parties while allowing injunction against the presentation of cheques as well as the prosecution of the petitioner by requiring the petitioner to furnish bank guarantee, and in doing so no error of law or jurisdiction was committed.

16. For the reasons above, this revision petition is without substance, which is accordingly dismissed .

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