Rasaal Hasan Syed, J. The instant appeal calls into question order dated 14.1.2020 of the learned Civil Judge, Lahore whereby the suit of the appellant was dismissed for non-deposit of balance sale consideration.
2. The appellant filed a suit for possession through specific enforcement of agreement dated 23.7.2018 against respondent Nos.1 to 4 for sale of suit property for consideration of Rs.7,80,00,000/- out of which an amount of Rs.1,00,00,000/- was claimed to have been paid through pay orders to the respondents as earnest money in the presence of witnesses at the time of execution of the agreement, the cut-off date for balance payment and execution of sale deed was 17.11.2018 which was assertedly extended on 28.11.2018 in writing up to 17.2.2019 at the request of the respondents as their paperwork was incomplete. The petitioner allegedly arranged the sale consideration and approached the respondents to furnish necessary NOC for execution of sale deed within extended period, after receiving balance sale consideration, but met with dilatory response whereupon specific notice dated 12.2.2019 was assertedly issued to them notifying that balance sale consideration had been arranged and all necessary documentation for execution of the sale deed by the cut-of f date i.e., 17.2.2019 be arranged. On being greet ed by respondents' silence the appellan t instituted the suit for specific enforcement of the agreement on 25.2.2019.
3. While issuing notice on the application for interim relief in the fresh suit the learned Civil Judge granted status quo as to alienation of the suit property which was ordered to be maintained subje ct to payment of remaining sale consideration and appellant was also directed to affix proper court fee of Rs.15,000/-. The case came up on 13.3.2019 for the attendance of the defendants when the appellant was reminded to affix court fee and deposit balance sale consideration and observing last opportunity , the case was adjourne d to 24.4.2019 with the warning that in case of failure to comply , appropria te further proceedings will be taken. On 24.4.2019 the appellant filed an application seeking adjournment on the ground that an earlier suit with respect to the suit property , was pending in the court of Mr. Aqeel Ahmad Janjua, Civil Judge, Lahore, and that to avoid conflic ting judgments both cases were required to be tried in the same court and that appellant needed some time to place copy of the plaint of the other suit on the file. The request was acceded to, and the case was adjourned to 14.5.2019. Copy of a suit titled "Mst.
Samina Shaheen, etc. v. Muhammad Moazam, etc." was produced on the next date which the court found to be in respect of the same property that was the subject-matter of the instant litigation and involved the same defendants.
The learned Civil Judge referred the matter to the District Judge, Lahore for further orders.
4. The case, thereafter, came on 20.5.2019 for hearing but no one was in attendance, and it was adjourned to 25.5.2019 on which date too no proceedings took place, and the matter was fixed for 10.6.2019. On 10.6.2019 the learned counsel for the respondents reminded the court that the appellant was required to deposit the balance sale consideration in court, on which the learned Civil Judge observing "last opportunity", adjourned the case to 26.6.2019 in the interest of justice, for payment of balance sale consideration. The case kept getting adjourned thereafter uneventfully until 06.1.2020 when it was observed that the appellant was directed to deposit remaining sale consideration of Rs.6,80,00,000/- vide order dated 25.2.2019 and on 10.6.2019 the plaintiff was provided a last opportunity to deposit, in which the appellant had miserably failed and that to meet the ends of justice one "absolute" "last opportunity" was being provided to the appellant till 14.1.2020 with the direction to deposit the balance sale consideration, failing which no further opportunity shall be given; and "order shall be passed in accordance with law".
On 14.1.2020 as the deposit of balance sale consideration had still not come forth, the learned Civil Judge observed that the appellant had been given absolute last opportunity on the preceding date with the warning that an order shall be passed in accordance with law on his failure to deposit the balance sale consideration and that despite this appellant had not deposited the said amount nor was any plausible reason was brought on record for it; therefore, applying the rule in "Hamood Mehmood v. Mst. Shabana Ishaque and others " (2017 SCMR 2022 ) dismissed the suit.
5. Learned counsel for the appellant submits that the order of dismissing the suit was unjustified as no prior specific warning of dismissal of suit was made, the order of deposit was linked with the issuance of temporary injunction and that in the circumstances, the repeated caution of consequences on non-deposit of balance sale consideration legally denoted that an order would entail in the context of the conditional injunctive relief issued on 25.2.2019 which could be vacated and that it was never specifically warned by the court that the suit itself, in case of non- deposit of the balance sale consideration, shall be dismissed. It is further submitted that there was connected litigation against the suit property pending which was creating complications and that the matter therein was in fact resolved by the hectic efforts of the appe llant and further that the appellant always had the amount ready in the bank, the suit for specific enforcement was filed promptly within a few days of the cut-of f date given in the extension and that the appellant was never informed of the consequences of non-deposit and that if one opportunity of shortest possible time is given by this Court, the appellant shall ensure deposit of the balance sale consideration amount of Rs.6,80,00,000/-.
6. Learned counsel for the respondents, controverted this stance and supported the dismissal of suit by arguing that in a suit for specific performance, the intending buyer is expected to voluntarily deposit the balance sale consideration with a view to show his readiness and willingness to perform the contract and even if there was no order yet he could not be exonerated of his obligations and any failure in this regard shall result in automatic dismissal of suit, as the discretionary jurisdiction could not be exercised in favour of an unwilling purchaser. It was added that even if there was no specific mention of dismissal of suit as consequence of non-compliance in the order requiring deposit of balance sale price yet the observation that "order shall be passed in accordance with law", was a sufficient indicator that the suit will stand dismissed ipso facto if the order of deposit is not complied.
7. No doubt in a suit for specific performance the plaintiff as intending buyer is required in law to claim that he was ready and willing to perform his part of the obligations necessary for the completion of agreement and that he has the financial resources to discharge the obligation and that he took all steps for the completion of the deal and also that from the date of agreement till the filing of suit he acted with evident bona fide to ensure that the transaction is completed as per terms and conditions of the agreement. It has indeed been consistently ruled that to prove his bona fide, the plaintif f as intending buyer shall offer the payment of balance sale consideration on filing of the suit and if the party is not willing to receive it, to make a request for deposit thereof in the court; for investment in profit bearing scheme and ultimate disbursement as per final order/decree. In Messrs Kuwait Nation Real Estate Company (Pvt.) Ltd and others. vs. Messrs Educational Excellence Ltd and another " (2020 SCMR 171) it was observed to the effect that it is now well-settled that it was essential for party seeking specific performance of an agreement to sell to deposit the sale consideration amount in court and that in fact, by making such deposit the plaintif f demonstrates the capacity , readiness and willingness to perform his part of the contract, as integral pre condition to seeking specific performance and that failure to do so disentitles him to relief in discretionary jurisdiction. In the case of "Mst. Samina Riffat and others v. Rohail Asghar and others " (2021 SCMR 7) it was observed to the effect that in terms of section 51 of the Contract Act, 1872, where a contract is dependent on discharge or performance of reciprocal promise or obligations to be performed or discharged, the promisor need not perform his part of promise or obligation unless the promisee/vendee, is ready and willing to perform his reciprocal promise and that in cases emanating from sale of immovable property , a vendee seeking specific performance has to demonstrate his readiness and willingness to perform his part of reciprocal obligation as to payment of balance sale consideration and the question as to what is readiness and willingness to perform a contract in respect of purchase of immovable property implies the capacity to pay the requisite sale consideration within reasonable time and, even if he has the capacity to pay the sale consideration, the question still remains whether he has the intention to purchase the property and willingness to have the sale deed completed. In "Inayatullah Khan and others v. Shabbir Ahmad Khan" (2021 SCMR 686) it was observed to the effect that another factor that militates against the issuance of a decree of specific performance is failure of the seeker to perform his own part of the contract i.e. tender amount of sale consideration to the vendor and, if there is refusal to receive it, to tender it in court; and that non-deposit of balance sale consideration by vendee after the decree constituted failure to show that he was ready, able and willing to perform his obligation under the contract and that although the law did not require that the balance sale consideration must be tendered or deposited in court such tender/deposit helps establish that vendee was not at fault and that, therefore, the contention that only after the court directs the deposit of the sale consideration is it to be deposited, is misplaced. It was further observed to the effect that invariably the value of the money depreciates over time and that of land appreciates; courts adjudicating such cases should not be unmindful of this reality as such and should endeavor to secure the interest of both parties and, therefore, in suit for specific performance of land, if the vendor had refused to receive the sale consideration, or any part thereof, it should be deposited in court and invested in some government protected security so that in case suit is decreed the seller would receive the value of money prevalent at the time of contract and in case the buyer loses he can similarly retrieve the deposited amount. In "Muhammad Shafiqullah and others v. Allah Bakhsh (Deceased) through L.R.s and others " (2021 SCMR 763) it was observed to the effect when vendee nor his legal heirs tendered the balance sale consideration to the sellers nor deposited the same in court if the latter had refused to receive it, and that non-payment of balance sale consideration violated an essential term of the contract outstanding against the vendee pursuant to section 24(b) of the Specific Relief Act, 1877, and for this reason too purported contract could not be specifically enforced and that in such circumstances the vendee and legal heirs had failed to demonstrate their readiness, ability and willingness to perform their obligations and that the oft repeated contention that a buyer is only required to tender sale consideration or the balance thereof, if so ordered by the Court , must be disabused. In "Muhammad Jamil and others v. Muhammad Arif" (2021 SCMR 1108) it was observed to the effect that foremost requirement for the vendee while seeking specific performance is to demonstrate his readiness and willingness to perform the agreement and that the promisor/vendor need not perform his part of promise or obligation, unless the promisee/vendee is ready and willing to perform his reciprocal promise that legally entails that a vendee, to demonstrate his readiness and willingness to perform his part of obligation by pleading that he has offered to pay, was and is already prepared to pay the consideration and had every intention to purchase the property and that it is well-settled law that the party seeking performance of the agreement to sell is essentially required to deposit the sale consideration in court and by making such deposit, he demonstrates his capacity , readiness and willing to perform his part of the contract which is necessary to seek specific performance of the contract. Similar views were expressed in the case of "Muhammad Yousaf v . Allah Ditta and others " (2021 SCMR 1241 ).
8. From the enunciation of law in the cases referred supra it is manifest that the relief of specific performance can be extended only on equitable grounds; it can be declined if the court arrives at the conclusion that it was unjust to do so or where the circumstances show that the performance of contract could give an unfair advantage to a plaintif f over the defendant or all necessary particulars entitling the specific performance of the contract could not be established and in this context the rule consistently observed is that the party seeking specific performance of the sale agreement needs not only allege but also to prove readiness and willingness to perform his part of obligation under the agreement from the date of the agreement till the passing of the decree and that with a view to demonstrate his readiness and willingness, capacity to pay and intentions to pay needs to offer the payment of balance consideration to the vendor or on his refusal, to tender the same in the court ; failing which adverse consequences will follow while determining the main suit and the entitlement of the plaintif f to seek decree in equitable and discretionary jurisdiction.
9. In the instant case the situation is a little different as the appellant was ordered to deposit remaining sale consideration of Rs.6,80,00,000/- on 25.2.2019 by the learned Civil Judge as a condition for grant of status quo order. The repeated caution and last opportunities given by the learned Civil Judge to the appellant on non- deposit of the balance sale consideration, were couched in general terms of reiterating that in case of failure to deposit, "an order would be passed in accordance with law". In the context that the order of deposit was made as an attendant condition to the stay order, prospective passage of such an order under caution and in accordance with law, it appears, could be interpreted to entail the vacation of the status quo order qua alienation granted in favour of appellant. No explicit and unequivocal warning of dismissal of suit as specific penal consequence of non-deposit of balance sale consideration was recorded by putting appellant on notice nor could anything to this effect be shown to us by the learned counsel for the respondents. In the circumstances the measure of dismissing the suit itself on non-deposit of the balance sale consideration does not appear to be readily covered by the phase " order shall be passed in accordance with law " repeatedly used by the learned Civil Judge.
10. This aspect was considered by Supreme Court of Pakistan in "Muhammad Asif Awan v. Dawood Khan and others" (2021 SCMR 1270). In the said case the suit for specific performance was instituted, the existence and execution of an agreement was disputed by the defendant in the suit. On an application of the defendant seeking an order for directing deposit of entire sale consideration which was positively responded by the plaintiff/vendee by showing his willingness to deposit balance sale consideration, the Trial Court ordered deposit of balance sale consideration; the order was challenged in Revision which though was eventually dismissed, yet the time for deposit of balance sale price was extended. In the Constitutional jurisdiction, a learned Single Judge of this Court set aside the order of extension and non-suited the vendee while taking the view that the Order could be passed under Order XVII, Rule 3, C.P.C. Leave was granted by the Supreme Court of Pakistan to consider as to whether a party could be non-suited on the ground that the amount was not deposited within the time specified in the order and whether the amount was deposited within extended time and further as to whether in view of the denial of agreement to sell the order for deposit of amount was harsh. In the said case while considering the scope and exercise of jurisdiction under section 22 of the Specific Relief Act, 1877 it was observed that there was no provision in the said Act which on the filing of the suit caste a duty on the court or required the vendee to deposit the balance sale consideration, however , since the relief of specific performance was discretionary and could not be claimed as a matter of right, therefore, the court in order to ensure the bona fide of the vendee at any stage of the proceedings may put him to terms. It was held has under: "8. Additionally , section 24(b) of the Specific Relief Act, 1877 details the contracts which cannot be specifically enforced provides that specific performance of a contract cannot be enforced in favour of a person who has become incapable of performing or violates, any essential term of the contract that on his part remains to be performed. Therefore, the vendee while seeking specific performance/ enforcement of a condition to be performed by the vendor must state that either he has performed all the conditions which under the contract he was bound to perform and/or that at all times right from the date of the agreement down to the date of filing the suit he has been ready and willing to perform/fulfill his part of the deal. He is not only supposed to narrate in the plaint his readiness and willingness at all material time to fulfill his part of the agreement but also is bound to demonstrate through supporting evidence such as pay orders, Bank statement or other material, his ability to fulfill his part of the deal leaving no doubt in the mind of the Court that the proceedings seeking specific performances have been initiated to cover up his default or to gain time to generate resources or create ability to fulfill his part of the deal. It is in that pursuit that the Court to weigh his capacity to perform and intention to purchase may direct the vendee to deposit the balance sale consideration. The readiness and willingness on the part of the vendee to perform his part of obligation also prima facie demonstrates that the non-completion of the contract was not the fault of the vendee, and the contract would have been completed if it has not been renounced by the vendor . Reference can be made to the case of Abdul Hamid. v . Abbas Bhai-Abdul Hussain (PLD 1959 (W .P) Karachi 629)".
While considering the order of dismissal of suit in the said case it was observed that the case of Hamood Mehmood supra was a leave refusing order which could not be held to be an enunciation of law by the Supreme Court of Pakistan as it had been settled by the Supreme Court in number of cases that an order granting and/or refusing leave is not a judgment that decides a question of law and, therefore, it should not be followed necessarily and imperatively . As to the order of dismissal of suit in the said case, it was observed that the order impugned therein did not provide for any penal consequences in the event of non-deposit and, therefore, the suit could not be dismissed. Relevant portion of the judgment is as follows: "12. Coming to the second limb of submi ssion, the record reflects that the order dated 15.7.2018 of the trial Court whereby the appellant in the light of Hamood Mehmood case (supra) was directed to deposit the remaining consideration did not provide any penal consequences, on the contrary the suit was fixed for the evidence of the plaintif f, therefore, in our opinion, the suit in the circumstances could not have been dismissed on account of non- deposit... "
It is manifest from the judgment referred supra, that as per observations therein suit cannot be dismissed on non- deposit unless the Trial Court specifically directs deposit of remaining sale consideration and puts the plaintif f on explicit notice to this effect bearing clear warning that non-deposit of balance sale price shall be deemed to be his inability of performing his part of contract as envisaged under section 24(b) of the Specific Relief Act, 1877, that states the specific performance of a contract cannot be enforced in favour of a person who has become incapable of performing or violates an essential term of the contract that on his part remains to be performed and which would render the contract unenforceable.
11. No such clear , unambiguous and pointed warning was ever issued to the appellant in this case as to explicitly notify the appellant of the penal effect of dismissal of suit. In the circumstances we find that the order of dismissal passed by the learned Civil Judge in the peculiar circumstances is not sustainable.
12. The instant appeal is, therefore, allowed. The impugned order of the Trial Court is set aside. The case shall be deemed to be pending before the Civil Judge concerned where the parties shall appear on 18.10.2021 for further proceedings. Learned counsel for the appellant has undertaken that appellant shall deposit the balance sale consideration of Rs.6,80,00,000/- within seven days. He is allowed to do so. The appellant is hereby put on notice that in case of failure to deposit the said amount within seven days of the date of appearance immediately hereinabove specified, his suit shall be deemed to be automatically dismissed.
(SHAHID KARIM) (RASAAL HASAN SYED)
JUDGE JUDGE I have seen in draft the judgment of my learned brother , Rasaal Hasan Syed, J. and concur in the conclusion drawn on the facts of the present appeal. In my opinion, however , a lot of uncertainty surrounds the making of any order for deposit of balance sale consideration by the plaintif f/vendee. The cluster of precedents relied upon by my learned brother brings forth ineluctably that the deposit has to be made in all suits seeking specific performance of a contract and the singular reason is to establish the good faith of the vendee to perform his part of the obligation and to rule out frivolity and contumacy . This is, inter alia, culled out of Section 24(b) of The Specific Relief Act, 1877. The modalities for making the deposit and the consequences which flow out of non-performance have resulted in misdirection of law by the lower court which then feeds through the rest of the decision-making process.
It has, in turn, generated a mass of disparate judgments by the superior courts and the courts below are left to grapple with the difficult task of finding the right one to rely upon. We, therefore, deem it proper to lay the following guidelines for the lower courts to follow in all matters relating to suits for specific performance (the suits):
2. At the time of taking cognizance of the suits by the civil courts, while issuing notice to the defendants, an order shall be made for the deposit of the balance sale consideration by the vendee (if he is a plaintif f in the suit) within a stipulated time. In sum, not more than two opportunities for making the deposit shall be given by the court. At the time of granting the second and last opportunity (if requested by the vendee), the civil court shall specifically mention the consequences that will visit the failure to deposit viz. that the suit shall be dismissed on that account. It is made clear that this order shall be passed separately and will not be made part of any other order passed for a different purpose. The amount so deposited as balance sale consideration shall be invested, pendente lite, in a profit bearing scheme with a high rate of return.
3. Notwithstanding the above, we still feel that a permanent solution to this problematic area lies in the legislature stepping in to clear the muddled subject. The superior courts have merely grafted a condition on to a statute. This condition, however, ought to be part of the statute brought about by making the amendments to the law in such a manner that this pre-condition becomes a statutory requirement to maintain the suit. This judge-made rule ought to be given statutory recognition. For the purpose, we direct the Government of Punjab (through Secretary Law and Parliamentary Affairs Department) to initiate legislative process in this regard keeping in view the precedents of superior courts and to complete the process with all deliberate speed. A report shall be filed within two months to the Additional Registrar (Judicial) of this Court. A copy of this order shall be transmitted for information to all civil courts in Punjab. It shall also be sent to the Government of Punjab for compliance.