MUSHIR ALAM, J.---Facts necessary for the disposal of this instant appeal, with the leave of the court, are that Respondent No.2 booked apartment No. 402, fourth floor (hereinafter referred to as subject apartment), in a commercial multi-storied building, namely 'Adam Arcade', situated in Karachi sponsored by Respondent No,1, Amir Corporation Ltd, in 1980.
2. Subsequently , Respondent No.2, having paid the entire amount to the Respondent No. 1 in installments, being allottee, entered into a forward sale agreement dated 30th September , 1989 with the husband of the Appellant, Mr. Kesholal, in respect of subject apartment for a total sale consideration of Rs. 5,70,000/-. It was stipulated by, and between the vendor/Respondent No.2 and the vendee, Mr. Kesholal, that on payment of the entire sale consideration, Respondent No.2 shall transfer the said apartment in favour of the vendee or his nominee.
Therefore, on the payment of the entire sale consideration to the vendor , in terms of die sale agreement, the vendee, vendor , and the Appellant, being the nominee of her husband, visited the office of the builder , Respondent No.1, on 08.11.1989 to get the transfer of allotment, transfer of possession, and consequent execution of sublease in respect of the subject apartment from Respondent No. 1.
3. Afterwards, with the concurrence of the vendor/allottee, the Respondent No.1, at the instruction of the husband of the Appellant/ vendee, approved the transferred, and assigned her rights and interest in the allotted apartment to the Appellant. The requisite entry was recorded in the 'Memorandum of Transfers ' in the favor of the Appellant, Mst.
Jaiwanti Bai, and endorsed on 08.11.89. Respondent No.2 then, in performance of the sale agreement, handed over the possession of the apartment to the Appellant, including receipt of all payment made to the sponsor of the project, Respondent No.1, the allotment letter , and acknowledgement of possession letter , duly endorsed by the Respondent No.1 to the Appellant.
4. Respondent No.1 then demanded and received a sum of Rs. 9,000/- in order to process the execution of sublease in favor of the Appellant, Mst. Jaiwanti Bai, with an additional sum of Rs. 7866/- to provide an electric and gas meter . Respondent No.1, on receip t of the amount as demanded, assured the Appellant that she will be informed of the date and time for the appearance before the registrar for the execution of the sublease after the appropriate documentation is prepared.
5. It is evident from the record that the Appellant got the property registered in her name in the office of excise and taxation and has been paying the property tax since 1990-1991. She has also got the electric, gas, and telephone connection installed in her name and all recently paid bills were produced. It may be pertinent to mention here that the Appellant is in physical possession of the apartment since the date of handing over the possession on 08.11.1989, as well as in possession of all the original allotment papers, receipts for payments made to the vendor , the builder , property taxes, utility bills, and service charges to the association of the project. There is no denial of this stated fact.
6. It is the case of the Appellant that she and her husband, Mr. Kesholal, made several personal visits to the office of the Respondent No.1 to get the time and date for the execution of sublease but the matter was deferred to a future date every time, which never materialized. After realizing all her efforts were in vain, the Appellant issued a legal notice dated 23.01.2006 to Respondent No.1 on their original address known to the Appellant, whereby , Respondent No.1 was called upon to execute the sublease or, in the alternative, to refund the entire amount with interest, but this act too was to no avail.
7. The Appellant, left with no option, filed a suit on 14th September 2006 befor e the VIIIth Senior Civil Judge, Karachi East seeking judgment and decree for execution of sublease and other consequential reliefs. Respondent No.1 and Respondent No.2 were both made parties to the suit. Service against Respondent No. 1 was held good on 16.10.2006, whereas, notices sent to Respondent No. 1 remained unanswered. Therefore, service was affected through newspaper 'Nawa-e-waqt' dated 10th March 2007. The suit against Respondent No. 2 was dismissed as not pressed vide order dated 16.10.2006, whereas, the suit against Respondent No.1 was proceeded ex-parte.
After the commencement of the suit, ex-parte evidence was taken and there was no rebuttal to the case of the Appellant. However , the learned trial court dismissed the suit vide judgment dated 24.12.2008 on the assumption that under the sale agreement dated 30.9.1989 "transfer of the property was settled between both the parties within 30 days but the suit was filed on 15th September , 2006..." It was further held that "in the schedule of Limitation Act, 1908 time for Specific performance of contract is 2 years, therefore suit is time barred" and accordingly the suit was dismissed for being barred by time.
8. The current Appellant then filed Civil Appeal No.16/2009 which was dismissed on an altogether different assumption, whereby , it was held that the agreement was between Responden t No.2, Mrs. Zakir Parvez, the original allottee/vendor , and Mr. Kesholal/vendee, the husband of the current Appe llant, and therefore, the current Appellant, Mst. Jaiwanti Bai, did not have a Locus Standi before the Court. The learned Appellate Court, in the penultimate paragraph of the judgment observed that the signature of respondent No.2 Mrs. Zakia Pervaiz on the acknowledgement receipt of sale consideration of Rs.5,70,000 (page 59) is totally different from that on the sale agreement (page 53). It was further observed that another payment made by the Appellant through the receipt of Rs. 9000/- in favour of the builder does not create any right for her to file a suit for specific performance. It was finally observed 'that the appellant has come to court with unclean hands and tried to take shelter under the umbrella of court order to legalize her illegal act and Want to usurp suit property by playing fraud with the court of law'. In conclusion, the Court held that the Appellant had no locus to file the suit and dismissed the suit with compensatory cost of Rs. 25,000/-.
9. Surprisingly , in the second appeal under section 100 of the Code of Civil Procedure, 1908, the learned bench of the Sindh High Court, although, condoned the delay by relying on section 53-A of The Transfer of Property Act, 1887, but held that 'since the original vendor/allottee undertook to execute the general power of attorne y/ sale deed in favour of the Vendee or his nominee/ and the suit, if filed under clause 7 of the agreement, may enable the vendee to transfer the suit property in his favour or in favour of his nominee.' Consequently , the Honorable Sindh High Court dismissed the second appeal for want of evidence and lack of Locus Standi vide impugned judgment dated 23.09.15.
10. Mr. Neil Keshev , the learned ASC for the Appellant, has contended that the learned Trial Court committed serious errors of law by dismissing the suit solely on the ground of limitation. Secondly , he contends that the first Appellate Court failed to appreciate the documents, more particularly the acknowl edgement receipt, which, on the face of record, shows that the Demand Draft on record was received for Respondent No.2 and not by the Appellant herself. Therefore, the comparison of signature on the receipt and sale agreement was not justified which led to the erroneous assumption and the Appellate court erred to non-suit the Appellant on the ground of locus standi. It was also argued that the issue of limitation under facts and circumstances was not attracted and yet, the High Court invoked the defense available to a vendee in possession in part performance of agreement to sell under section 53-A Transfer of Property Act, and condoned the limitation, while at the same time, concurred with the first Appellate Court which caused serious miscarriages of justice. Therefore, the counsel for the Appellants contends that the impugned judgments are liable to be set aside and suit to be decreed.
11. It is also argued by Mr. Neil Keshev , learned ASC for the Appellant, that the learned trial court has misread the evidence, committed error of law by dismissing suit on the erroneous assumption that the suit is barred by time, and assumed that limitation for such kind of suits is two years. It was further urged that the first and the second appellate courts have failed to appreciat e the nature of the transaction, which comprised of forward sale of the subject apartment by and between the Respondent No.2 and the husband of the appellant in the first place.
Secondly , the Appellate Courts have failed to take note of the fact that the payment of the entire sale consideration by the Appellant, being nominee through cash and Demand Draft as acknowledged by the Respondent No.2, such sale of allotment, was duly approved and endorsed by the builder , Respondent No.1, as evidenced by the change and transfer of all rights and entitlement of the original allottee in favour of the Appellant as recorded by way of 'Memorandum of Transfer' on 8.11.1989 and the Respondent No.1 received a sum of Rs.9000/ being full and fugal payment for sublease charges against acknowledgement receipt? on same date (at page 60).
12. W e have heard the arguments of the learned Counsel for the Appellant, and examined the record.
13. It is a settled position in law that generally in a sale of immoveable property , time is not the essence of the contract, unless it is made so. In the instant case, as could be seen in the first limb of the sale transaction dated 30.9.1989 (page 51), clause 7 provided for an obligation on the part of the vendor to do all acts necessary "in connection with transfer and or registration in favour of the vendee or his nominee." Clause 12 thereof, provided that the sale "transaction shall be finalized within 30 days of on payment of balance :sale consideration".
14. From the record it is evident that the first With of the sale transaction was finalized on 8.11.1989 when the balance sale consideration was paid for through the Demand draft No. DD-199405 (page 55), which was acknowledged (page 59) on behalf of the Respondent No.2, who in turn appeared before the Respondent No.1 to have the entries in the 'Memorandum of Transfer ' amended in favor of the Appellant as nominee/assignee of the vendee endorsed by the Respondent No.1 on 8.11.1989 (page 64), and delivered the possession (page 61) to the Appellant being nominee/assignee of the vendee, and allotment was transferred in the name of Appellant.
Therefore, the first limb of the transaction under the sale agreement completed upon settlement of balance consideration.
3(sic)., The second limb of the transaction commenced from the time the builder , Respondent No.1, acknowledged the Appellant as the transferee of the rights and interest of the original allottee, her husband, by endorsing transfer of allottee right and interest in the allotme nt through 'Memorandum of Transfer' on 8.11.1989 (page 64) and further by the endorsement dated 8.11.1989 on the possession letter (page 61) in the favor of the Appellant. The original allotment letter does not stipulate the time to execute the sublease, even while recording endorsement of transfer on Memorandum of Transfer , as mentioned herein, no date was provided. Specific performance could be sought by a vendee or vendor who have performe d and "is ready and willing to perform reciprocal promise' . In the instant case, Respondent No.2 performed her part of the contract with Respondent No.1 by paying the entire sale consideration: In a forward contract, Respondent No.2, having received the entire sale consideration from the Appellant, had performed her part of the contract by assigning and transferring her right in allotment of subject apartment, which Respondent No.1 acknowledged and is obliged to perform their reciprocal obligation by exectiting sub-lease under law. Specific performance is sought by the Appellant against Respondent No.1 for the execution of sublease, for which a sum of Rs. 9000/- was received on 8.11.1989 and further sum of Rs. 7,8661- was received on account of electric and gas meters (page 60). There is no denial of such fact on record.
14(sic). Prior to addressing the issue of limitation, it is first to be seen whether the Appellant had a locus standi to file the suit for specific performance. The learned first Appellate Court held that the Appellant has no locus standi to file the suit and such conclusion was drawn on the fact that the agreement dated 30.09.1989 was executed between the Respondent No.2, and Mr. Kesholal, the husband of the Appellant. Similarly , the learned Appellate Court also stated that the signature of the Vendor , Respondent No.1, and the signatures on the acknowledgement receipt do not tally. Therefore, the learned Appellate Court concluded that since the Appellant herself has not entered into the sale agreement, she could not file a suit for specific performance.
15. We have examined the material on record and noted that the learned first appellate Court mis-appreciated the evidence on record that led to erroneous finding, which cannot be sustained. The receipt acknowledging payment of Rs. 5,20,000/- in cash and Demand Draft No. DD 19940541/09 is available at page 59 of the file. It may be noted that the receipt is signed for Mr. Zakia and not by Mrs. Zakia, therefore, dissimilarity of signature on the agreement and receipt is understandable.
16. We have also noted that the Demand Draft No. DD 199405 41/09 is available on record page 55 which shows that it is drawn in the name of Mrs. Zakia. There is nothing on record to show that sale {{FOOT NOTE}} Section 51 of the Contract Act {{FOOT NOTE}} consideration was not paid to the vendor/allottee. Further receipt of Rs.9000/- as payment issued by the Respondent No.1 for execution of sublease is coupled with acknowledgement of possession executed by Respondent No.2, as approved by the Respondent No. 1.
17. The transaction, as disclosed by the appellant, has not been denied nor disproved. The provisions of section 50 of the Registration Act, 1908, become relevant in transactions such as these wherein: "every document of the kinds mentioned in clauses (a), (b), (c) and (d) of section 17, subsection (1), 3 [and every document registerable under section 18 in so far as such document affects immoveable property or acknowledges the receipt or payment of any consideration in respect of any transaction relating to immovable property], shall, if duly registered, take effect as regards the property comprised therein against every unregistered document relating to the same property , and not being a decree or order , whether such unregistered document be of the same nature as the registered document or not."
18. However , it may be noted that provisos to subsection (1) to Section 50 of the Registration Act, 1908 in stated,condition, nullifies the privilege enjoyed by the registered instrument, with regard to the rights and interests where immoveable property is concerned. A protection is provided to the transferee, who establishes to be in occupation and possession of the propert y, claiming rights and interests in the property on the basis of unregistered instrument, in part performance thereof, from any the transferor , or any person claiming under him. The implications of two provisos to subsection (1) of section 50 of the Registration Act, 1908 which, for ready reference, are reproduced below:- Provided that the person in possession of the property under an unregistered document prior in date would be entitled to the rights under section 53-A of the Transfer of Property Act, 1882 (IV of 1882) if the conditions of that section are fulfilled: Provided further that the person in whose favour an unregistered document is executed shall be entitled to enforce the contract under the unregistered docum ent in a suit for specific performance against a person claiming under a subsequent registered document, subjec t to the provisions of clause (b) of section 27 of the Specific Relief Act, 1877.
19. On bare perusal of above, it is clear that in terms of 1st and 2nd provisos to subsection (1) of the Registration Act, 1908, if it is established on record that a person is in part performance of an unregistered document prior in time and is in possession of the property , such person, in terms of exception provid ed under first proviso "is entitled to the rights under section 53-A of the Transfer of Property Act, 1882 ". Further , in terms of exceptions carved out in the 2nd proviso to subsection (1), they "shall be entitled to enforce the contract under the unregistered document in suit for specific performance against a person claiming under a subsequent registered document, subject to the provisions of clause (b) of section 27 of the Specific Relief Act, 1877".
20. The rights of a person, having established that they are equipped with an unregistered instrument, which is prior in time, and are in possession of property in part performance of such instru ment, would rank superior even against the subsequent registered instrument. Such position in law was considered with approval in the cases cited as Faza v. Mehr Dia and 2 others', Mushta q Ahmed and others v. Muhammad Saeed and others', which was recently affirmed in the case of Sardar Arshad Hussain v. Muhammad Zenat Un Nisad. It may be observed that as a subsequent registered instrument was not brought on record, the Appellant cannot be provided the protection under the proviso of section 50 of the Registration Act, 1908 read with section 53-A of the Transfer of Property Act, 1882.
21. Had there been a subsequent purchaser of the subject apartment with a registered instrument, the aforementioned law would have protected the rights of the Appellant. It seems that on the current facts, the correct status of the Appellant is that she is the 'assignee' of her husband. There is nothing on record in rebuttal to the claim of the Appellant or her being an assignee of her husband.
22. An assignment, in cases relating to immoveable property , takes place when one party to an existing contract (as in this instant case the under the agreement to sell) conveys all the obligations, rights and interest under the agreement to another persons5. It is an admitted position that the current Appellant is the wife of the vendee under the sale agreement executed on 30.09.1989 by the Respondent No.2. It is also a matter of record that Respondent No.1, with the concurrence of allottee/vendor , Respondent No.2, and the vendee (husband of the Appellant), approved and endorsed the assignment by signing the 'Memorandum of Transfers' on 08.11.1989 (on reverse of allotment in favor of the original allottee at page 63 of the file) of the subject apartment in favor of the Appellant. Given the conferment of rights in the 'Memorandum of Transfers', coupled with the signatures of the original V endee and V endor on the sale agreement, and handing over of {{FOOT NOTE}} 2 1999 SCMR 837 3 2004 SCMR 530 4 2017 SCMR 608 3 AIR 1962 SC 1810 at 1817, Paragraph 21 {{FOOT NOTE}} the possession with the concurrence of Respondent No.1, the Appellant became the assignee to her husband.
23. In such an eventuality , the assignee steps into the shoes of the assignor and assumes all the contractual rights and obligations flowing therefrom. The concept of assignment is invoked both in contract and real estate, or property law, transactions. In the instant case, the possession was handed over to the Appellant (assignee of the vendee), as endorsed by the Responde nt No.1, which is sufficient evidence that the rights and interest of the original allottee in the subject allotment were to be duly conveyed and transferred to the Appellant. Therefore, the assignee, Appellant, becomes a 'representative-in-interese6 of the assignor' (her husband) and can lawfully enforce the performance of the contract against Respondent No. 1.
24. It is common usage and custom in real estate, construction and building contract, that at, or before the execution of sublease, investors book the apartments/shops in advance and sell, or transact, forward sale F multiple times, before the final sublease is executed. Traditionally , such type of transaction is evidenced by tripartite arrangement by and between the allottee, forward purchaser , and the builder . In the instant case, the memorandum of transfers executed by the builder , with the concurrence of the Allottee (vendee), has been produced at page 63, coupled with delivery and acknowledgement of possess ion in favor of assignee dated 8.11.1989 (page 61 of the file), which bears the signatures of all the three contra cting parties. It is a routine and common commercial sale transaction. As noted, it is tripartite agreement and each of the three parties assumes respective rights and obligation. Neither the Respondent No.1 nor Respondent No. 2 denied such transaction. In Pakistan, such contracts and arrangement are not regulated unlike in many countries including India where such transactions are stringently regulated under the Real Estate (Regulation and Development ) Act, 2016. It is high time in Pakistan that the real estate business is regulated, to secure rights and interest of builders, allottees and forward transferee alike.
25. In view of the foregoing, it is established that the assignee from the vendee, having stepped into the shoes of the assignor , acquired all the rights and interests, including the equity to seek specific performance of contract from the builder and becomes a representative-in-interest of the Vendee. Therefore, she has the locus standi to file the suit for specific performance. Hence, the finding of the Courts below on the issue of locus standi is erroneous cannot be sustained. {{FOOT NOTE}} 6 S.23(b) of Specific Relief Act (I of 1877)
(1995) 4 SCC 15, Paragraph 28, (1993) 2 SCC 740, AIR 1928 PC 174 {{FOOT NOTE}}
26. Attending to question of limitation, cases of specific performance are governed under Article 113 of the Limitation Act, which is reproduced below for convenience sake: Description of SuitPeriod of LimitationTime from which period begins to run 113 For Specific per- formance of a contractThree years The date fixed for the performance, or if no such date is fixed, when the plaintif f has notice that performance is refused
27. It is on record that the interest in the allotment of subject apartment was assigned, as per the sale agreement, by the husband in the favor of his wife, the Appellant, being his nominee, and paym ent of the balance consideration was made by the Appellant through Demand Draft to Respondent No.2. Thereafter , Respondent No.2 performed their part of the,obligation by doing what was required under the sale agreement and transferred the allotment of the subject apartment as is evidenced by entries in the 'memorandum of transfers' . An Amount of Rs.9000/- was demanded and received by the Respondent No.1, however , the sublease was never executed and Respondent No.1 abruptly vanished from the scene. Given that no date was fixed for performance of execution of sublease between the Appellant and Respondent No.1, for all practical purposes, the Appellant may treat refusal of performance when the legal notice remained unanswered.
28. To seek specific performance of agreement to sell, Article 113 of the Limitation Act provides two starting points to trigger the period of limitation of three years; one from 'the date fixed for the performance, and second where 'no such date is fixed, when the plaintiff has notice that performance is refused.' In the case at hand, it is evident that the original allottee, Respondent No.1, completed all the formalities as committed under the sale agreement with the husband of the Appellant on receipt of the entire sale consideration by transferring her rights and interest, handing over the possession in the allotment of suit apartment in favor of the Appellant, which was concurred and endorsed by the builder , Respondent No. 1.
29. There is nothing on record to show that any date was fixed by Respondent No.1 for execution of the sublease, either in the original sale transaction between the original allottee/vendor , nor any date was provided for in the execution of sublease at the time of transfer of assignment of rights and interest in the allotted apartment by Respondent No.1 in the memorandum of transfer . In cases such as these, the vendee can make time the essence of the contract by calling upon the vendor to perform the agreement within date specified in the notice and the period of limitation of three years would run from the date so specified.
30. In the instant case, as noted, no time for the performance, i.e. for execution of sublease was fixed by Respondent No. 1. In such a situation, the court is required to find out when the vendee/plaintif f had notice that the performance was refused. Once such date or period is discovered, then period of three years is to be computed thereof. In a case reported as Gunwantbhai Mulchand Shah and others v. Anton Elis Farel and others' , the Indian Supreme court relying on the case of R.K Parvatharai Gupta v. KC Jayadeva Reddy' held that a suit, in terms of the requirement of Article 54 of the Indian Limitation Act, (akin to Article 113 of Limitation Act, 1908 of Pakistan ) should have been filed within a period of three years from the date of expiry from the date of receipt of the notice of refusal. The limitation of three years within the contemplation of second part of Article 113 of the Limitation would under the facts and circumstances of the case run from the date Appellant was only notified of refusal of performance when the legal notice dated 23.01.2006 remained unansw ered. Hence, given that the suit was filed on 14.09.2006, it was well within time.
31. In the light of the above discussion, this court is of the considered view that the Appellants are entitled to the grant of decree of specific performance of the contract and accordingly the suit is decreed against Respondent No.1 and in favor of the Appellants. The impugned judgments and decree dated 24.12.2008 and 20.1.2009 respectively passed by the learned Trial Court, Judgment in C.A. 16 of 2009 dated 13.10.2009 by the learned VIIIth Additional District Judge, Karachi East, Judgment in Second appeal No.72 rendered by the High Court dated 23.9.2015 are respectively set aside. Consequently , Suit No.1075/2006 is decreed in favor of the Appellants.
Respondent No.1 is directed to execute the sublease in favor of the appellants within a period of one month from the date of receipt of this order , since the appellant had already paid the cost of sublease to the Respondent No. 1.
In case Respondent No.1 fails to execute the sublease within 30 days, the Nazir of the learned Trial Court to do the needful, in accordance with law and the Appellant shall bear all the expenses and in turn recover the same from the Respondent No.1 with cost throughout. {{FOOT NOTE}} 8 (2006) 3 SCC 634 9 (2006) 2 SCC 428 {{FOOT NOTE}}