MUHAMMAD SHAN GUL, J. Through this judgment the titled civil revision is sought to be decided.
2. This civil revision lays a challenge to concurrent findings recorded through judgment dated 06.5.2010 passed by a learned Civil Judge, Kamalia as also judgment dated 30.10.2014 passed on appeal by a learned Addl. District Judge, Kamalia whereby a suit for specific performance of an agreement to sell filed by the petitioner was dismissed.
3. Facts in brief are that the petitioner filed a suit for possession through specific performance of agreement to sell dated 28.5.2003 with regard to land measuring 8 kanals 18 marlas situated at Khewat No.62, Khatooni No.295 to 311, Chak No.675/16 GB, Tehsil Kamalia, District Toba Tek Singh for a consideration of Rs.2,60,000/- out of which Rs.1,15,000/- were paid. The petitioner contended that the respondent delivered possession of the property to the petitioner but thereafter refused to get the property in issue transferred in favour of the petitioner through a registered sale deed and which is why the petitioner was forced to file a civil suit. After a full-fledged trial, the learned trial court dismissed the suit filed by the petitioner but directed for restitution of the petitioner and Rs.1,15,000/- were ordered to be paid to the petitioner by the respondent.
4. Before venturing to appreciate the merits of the case it is necessary to reproduce the agreement to sell in question:- {{URDU TEXT}}
5. A perusal of this agreement to sell clearly reveals that it is more in the nature of an agreement of mortgage rather than of sale. What this agreement means and conveys is that the petitioner had paid Rs.1,15,000/- to the respondent for the purpose of business/investment and the respondent had agreed to pay Rs.4200/- as annual profit. It is evident that far from being an agreement to sell this document is an agreement of loan or at best an agreement for mortgage. The time period prescribed was one year from 01.6.2003 to 31.5.2003 whereafter the penal clause contemplated in the agreement in question came into operation and it is only if the amount was not paid back that the respondent was to become liable to get his land transferred to the petitioner by receiving a total amount of Rs.2,60,000/- including the already received amount.
6. It is clear that there was no agreement to sell and resultantly no relationship of buyer and seller existed between the parties because the agreement in question was only meant to secure an amount of money which was advanced by the respondent to the petitioner by way of loan.
7. The trial court as also the appellate court dismissed the suit filed by the petitioner on the basis that the agreement in question did not qualify as a proper agreement to sell since the petitioner had been less than fortnight in his plaint about the ethos and real nature of his transactional relationship with the respondent. Both courts below observed that it was the content of the document and not its title or label which could determine its nature.
8. During the course of cross examination, the petitioner was hoisted in his own petard when he tacitly admitted the agreement in question as one of mortgage. In addition, the petitioner also admitted during cross examination that respondent, Dilawar Khan, was an illiterate person and thus the observations appearing in the judgment of the appellate court about the respondent having unduly been made liable for consequences of non-payment rings true. The agreement in question was rightly held not to bear the status of a lawful contract enforceable in law. In simple terms, the petitioner was held to have taken unfair advantage over the respondent in the matter of this agreement. Both courts below laid emphasis on this agreement and based their decisions on the status of this agreement because all other issues would have become relevant only if the agreement in question was taken as, accepted or held to be an agreement to sell and which it is not!
9. Upon a plain reading of the agreement in question it is unarguable that the real intention was to have the loan secured and the agreement was never meant to be an agreement to sell. The terms of the agreement being anomalous, the intent of the parties being not clear and evident and the respondent having been acknowledged as an illiterate person by the petitioner himself i.e. the beneficiary, the petitioner was required to establish by highly satisfactory and strong evidence that such an illiterate person had fully understood the contents of the document. No such exercise having been undertaken the judgments passed by the courts below do not warrant any interference.
10. An acquaintance with the precedent cases on the subject is now necessary to understand and reinforce the judgments passed by the courts below.
11. In "Asif Raza Mir v. Muhammad Khurshid Khan" (2011 SCMR 1917), it has been held as follows:- "7. Having considered the evidence and the judgments of the learned Additional District Judge and the High Court in this case, we find the case of the respondent-plaintiff, to the extent of declaration and specific performance, to be without merit. There was no agreement to sell the disputed property and resultantly no relationship of buyer and seller existed between the parties which would bind the appellant-defendant to convey the disputed property. The various agreements between the parties were only meant to secure the amount which was advanced by the respondent to the appellant by way of loan. The respondent has been less than forthright in his plaint about the genesis and true nature of his transactional relationship with the appellant.
This will be apparent from the documentary evidence next discussed.
9. It has long been settled in our jurisprudence that the contents of a document determine its nature and not its title or the label appearing at its head. Learned counsel for respondent was unable to explain as to how Exh. D.2 could be considered a partnership deed when the obligation imposed on the appellant-defendant was expressed as an absolute liability and commitment regardless of the profit or loss of the business. The return to the partners on their investment can be positive as well as negative. There is no business conceivable in the commercial world which is not susceptible to a loss or a fluctuating amount by way of profit......
10. That the nature of the relationship between the parties was that of lender and borrower is further buttressed by the next agreement (Exh.D1) which the parties entered into on 16-6-1992. It has been recorded in Exh.D1 that the appellant-defendant has received a sum of Rs.15,00,000 prior to the execution of the document, and acknowledges receipt of a further sum of Rs.3,50,000 thus making a total amount of Rs.18,50,000. This recital is followed by the extremely unusual stipulation which establishes that the parties were borrower and lender inter se and not seller and buyer as alleged in the plaint. It has been recorded that if by 1-7-1992 i.e. 14 days after the execution of the agreement, the appellant fails to repay the sum of Rs.18,50,000, the respondent- plaintiff shall have the right to sell the disputed shop after advertising the sale in the press. What conclusively determines the relationship between the parties is the additional stipulation that if the sale fetches an amount in excess of Rs.18,50,000, the appellant-defendant shall be entitled to such excess and if the sale fetches a price of less than Rs.18,50,000, the respondent-plaintiff shall be entitled to recover the short-fall from the appellant. These stipulations are enough to demolish the plea of the respondent that the agreements mentioned in his plaint dated 17-12- 1991 (Exh.P1) and 18-3-1992 (Exh.P2) created a simple and straightforward agreement to sell. It is perhaps for this reason that a material concealment was made from the Court by the respondent-plaintiff and the agreement Exh.D1 dated 16-6-1992 was not referred to in the plaint.
11. Taking into account the above circumstances, it is not difficult for us to decide that the respondent-plaintiff was not entitled to a decree for specific performance. ......Bearing in mind the facts of the case and the discretionary nature of relief by way of specific performance, we are clear that the discretion of the Court cannot be exercised in favour of the respondent-plaintiff.
Additionally, having concluded that there was no agreement to sell between the parties, it follows that there can be no question of specifically enforcing the same.
12.... We have already observed that it is the substance, content and context of a document which determines the nature of such document and not the label or heading alone. The nature of the document so determined represents the true intention of the parties and it is this which the courts are obliged to give effect to, not the mere form of the document. The cases titled Messrs Khanzada Muhummad Abdul Haq Khattaq and Co. v. Wapda through Chairman and another (1991 SCMR 1436 at 1439);House Building Finance Corporation v. Shahinshah Humayun Cooperative House Building Society and others (1992 SCMR 19 at 27-28) can be seen in support of this conclusion. We also have precedent which holds that a document purporting to be an agreement to sell can be construed as a mortgage, charge or security for a loan if such intention is spelt out from its contents or from its attendant circumstances. Chitty on Contracts, an authoritative text on contract law, has this to say on the subject:-- "True nature of the agreement. Extrinsic evidence is admissible to prove the true nature of the agreement, or the legal relationship of the parties, even though this may vary or add to the written instrument. Thus a conveyance may be shown to be merely a mortgage, a sale and hire- purchase agreement to be an unregistered bill of sale, and a sale of property to be a loan on security" [Chitty on Contracts, Vol 1. at 632 (London, Sweet & Maxwell, 28th ed., 1999)]."
12. In "Malik Coal Corporation (Regd.) through Partner v. Muhammad Ijaz and another" (2008 CLC 680), it has been held as follows: "2....A decree for specific performance of agreement, dated 15-3-1968 was accordingly prayed for.
In his written statement the said defendant took plea that he did not agree to sell the land to the appellant. He had brick kiln near the suit-land and required coal. The appellant agreed to supply coal and as a security for the price of coal the agreement was got executed. The parties never intended either to sell or to purchase land..... Learned trial Court dismissed the suit on 5-5-1982. A first appeal filed by the appellant was dismissed by a learned Additional District Judge, Gujranwala, on 15-4-2003.
6. Upon plain reading of two documents there is no manner of doubt in my mind that the real intention of the parties was to secure the price of Coal that was delivered to the defendant by the appellant. Apart from this notwithstanding the fact that respondents had categorically said in the written statement with reference to Exh. P.1 that he has paid price of Coal before 30-9-1968, said Muhammad Bashir P.W.4 in his entire examination-in-chief did not at all refer to said Exh.D.1 and did not at all state that the amount had not been paid by the defendant. In his cross- examination he could not tell weight of the coal supplied and could not refer to any document in this behalf.
7. On the other hand, Muhammad Siddique appeared as D.W.2 and deposed in absolute accord with the written statement. He categorically stated that he has made payment in accordance with Exh.P.1. It was not even suggested that he had not made payment as stated by him.
8. Having thus, examined the record, I do not find any question of law arising in these R. S. As., which are accordingly dismissed but without any order as to costs."
13. In "Tariq Shabeer v. Muhammad Ijaz" (2007 YLR 1369), it has been held as follows:- "2. The case of the respondent/ plaintiff, in brief, was that the petitioner had obtained a sum of Rs.400,000 from him by way of loan and had executed the aforesaid agreement stipulating that if the amount was not repaid by 31-7-1995, the title in the property shall be deemed to have passed to the respondent. It was also averred in the plaint that upon failure of the petitioner to pay the sum by the aforesaid date, the period was extended, through a second agreement, upto 31-8- 1995. The suit was filed in order to enforce the aforesaid agreements.
7. The next argument advanced on behalf of the petitioner was as to the nature of the transaction, alleged in the plaint. It is submitted that even if the two agreements (Exhs: P.1 and P.2) are held to have been proved, the same cannot be specifically enforced, firstly, because the same are unconscionable and, secondly, because even, according to the plaint, the transaction embodied in the agreements, is by way of an anomalous mortgage to secure repayment of the alleged sum of Rs.4,00,000. On this basis, it was contended that the decree for specific performance, passed by the learned Courts below, was not legally sustainable. This argument has merit. Learned counsel for the parties have been heard on this issue. The learned Courts below have decided Issues Nos.2 and 2-A in favour of the respondent-plaintiff without considering this legal aspect of the case.
8. In order to ascertain if the agreements constitute a mortgage or not, the intention of the parties has to be seen. This can be gathered from the terms agreed between them. Exh.P.1 needs to be examined for this purpose. From the same it is abundantly, clear that the sum of Rs.4,00,000 was taken by the petitioner by way of loan and the same had to be returned by 31-7-1995. The word "loan" has been repeatedly used in the agreement. Additionally, it has been stipulated that the two shops mentioned in the agreement were to remain encumbered until repayment of the loan. These terms duly recorded in the agreement (Exh.P.1) leave no room for doubt that the transaction was in the nature of a mortgage. Learned counsel for the respondent argued that a sale was also intended because the agreement envisaged transfer of title of the two shops in favour of the respondent-plaintiff in the event of the failure of the petitioner to repay the amount. This submission is not legally tenable because the agreement (Exh.P.1) could only have been treated as an agreement to sell the two shops if the sum I of Rs.4,00,000 was mentioned therein as consideration for the sale without any stipulation for repayment of the amount.
10. In the foregoing circumstances, the findings of the learned Courts below on Issues Nos.2 and 2- A are reversed. It is held that the respondent-plaintiff has not become owner of the two shops mentioned in the agreement (Exh.P.1). He is also not entitled to a decree for specific performance of the agreements (Exhs.P.1 and P.2)."
14. In "Muhammad Bashir v. Gohar Naseem" (2016 YLR 565), it has been held as follows:- "8. It is also admitted fact that the appellant/defendant was an illiterate person and this fact also stood proved from the perusal of Exh.P1 wherein the appellant was shown to have put his thumb impression only. It is now well settled principle that where the document is allegedly executed by the illiterate person, the beneficiary of the document is bound to establish by highly satisfactory and strong evidence that not only the document has been executed by such illiterate person but also that such person had fully understood the contents of the document. The perusal of Exh.P1 further reveals that nowhere it is mentioned therein that document after its writing had been read over to the executant and he after considering the same to be true had put his thumb impression over there. Even respondent/plaintiff as PW.1 never deposed in his examination-in-chief that the contents of agreement (Exh.P1) were read over to the appellant/defendant. He also did not depose in his examination-in-chief the date, time, venue and the names of the witnesses before whom the bargain was settled between the parties."
15. In "Meharban through L.Rs and others v. Muhammad Asghar through L.Rs and others" (2012 MLD 914), it has been held as follows: "Court was not expected to decree suit of specific performance where circumstances in which contract was made were such as to give plaintiff unfair advantage over vendor or legal heirs of the property."
16. In "Sheikh Akhtar Aziz v. Mst. Shabnam Begum and others" (2019 SCMR 524), it has been held as follows:- "Relief of specific performance was discretionary in nature and despite proof of an agreement to sell, exercise of discretion could be withheld if the Court considered that grant of such relief would be unfair or inequitable."
17. In "Shaukat Ali alias Shaukat Hayat and another v. Muhammad Hanif and others" (2004 MLD 1868), it has been held as follows:- "Court can decline discretionary relief where it is convinced that plaintiff was exercising unfair advantage or there was fraud or misrepresentation on his part or contract involved some hardship on defendant."
18. In "Farzand Ali and another v. Khuda Bakhsh and others" (PLD 2015 SC 187), it has been held at paragraph No.9 as follows: "Rather in law such an agreement (of immovable property) is a contract (note: may be executory in nature) and the first, and the foremost requisite of a contract (agreement) is that the parties should have reached agreement, which unmistakably means, that an agreement is founded upon offer and acceptance. Thus for the purposes of a valid contract (agreement) there should be the meeting of minds of the contracting parties (who are competent in law to contract). And where a contract is reduced into writing, not only should it be founded upon the imperative elements of offer and acceptance, but its proof is also dependent upon the execution of the contract by both the contracting parties i.e. by signing or affixing their thumb impression.
So that it should reflect and establish their "consensus ad idem", which obviously is the inherent and basic element of the meeting of the minds, which connotes the mutuality of assent, and reflects and proves the intention of the parties thereto. In particular it refers to the situation where there is a common understanding of the parties in the formation of the contract in the absence of which there is neither a concept nor the possibility of a valid contract. But in this case this is conspicuously lacking by virtue of non execution (non-signing) of the agreement by the appellants, therefore, in law and fact it is no contract (agreement)."
19. In "Inayatullah Khan and others v. Shabir Ahmad Khan" (2021 SCMR 686) where the question before the Court was that whether vagueness and uncertainty rendered a contract unenforceable, it was held at paragraph No.9 as follows: "9. The said document does not describe the land, its area, the total sale consideration and when the balance of the sale consideration was payable and the transaction to be completed.
Such a document does not constitute a contract to sell land. Therefore, it would be void for uncertainty in terms of section 29 of the Contract Act, which provides that, 'Agreements, the meaning of which is not certain, or capable of being made certain, are void'. In the case of Rauf Ahmed Ghori1 it was held, that:
22. This, however, does not conclude the matter. It is settled that an agreement is not a binding contract if it lacks certainty due to vagueness or because its terms cannot be ascertained. (See law of Contract by G.H. Trietel at page 47 International Student Edition 1995 by Sweet and Maxwell).
Necessarily, an agreement comes into being with the consent of the parties. It must be certain, unambiguous or be made certain. This rule of common law was embodied in section 29 of the Contract Act (IX of 1872). It clearly postulates that agreement, the meaning of which is not certain or capable of being made certain, is void. This provision was considered in weekly Law Reports (Volume I) page 1025 in Harvey v. Pratt. In this case there was uncertainty in contract with regard to the period of lease, rate of rent and its commencement. It was held therein that agreement was uncertain and incapable of enforcement."
20. In "Rauf Ahmed Ghori v. Managing Director, Cholistan Development Authority, Bahawalpur and 7 others" (1998 CLC 1464), it has been held at paragraph No.22 as follows: "It is settled that an agreement is not a binding contract if it lacks certainty due to vagueness or because its terms cannot be ascertained. (See law of Contract by G.H. Trietel at page 47 International Student Edition 1995 by Sweet and Maxwell). Necessarily, an agreement comes into being with the consent of the parties. It must be certain, unambiguous or be made certain.
This rule of common law was embodied in section 29 of the Contract Act (IX of 1872). It clearly postulates that agreement, the meaning of which is not certain or capable of being made certain, is void. This provision was considered in weekly Law Reports (Volume I) page 1025 in Harvey v. Pratt. In this case there was uncertainty in contract with regard to the period of lease, rate of rent and its commencement. It was held therein that agreement was uncertain and incapable of enforcement."
21. From a perusal of precedent cases it is evident that:
(a) An agreement meant to secure an amount of loan so advanced and which agreement also contains a penal clause which comes into operation upon default does not operate as an agreement to sell because there is no meeting of minds of the parties;
(b) That it is the substance, content and context of a document which determines the nature of such document and not its label;
(c) That a document purporting to be an agreement to sell can be construed as a mortgage, charge or security for a loan if such intent is spelt out from the contents thereof;
(d) If the agreement is primarily meant to secure price of a particular commodity which was delivered then it does not operate as an agreement to sell;
(e) That unconscionable and anomalous contents of an agreement cannot be sought to be enforced specifically;
(f) That when a document is executed by an illiterate person the beneficiary thereof is bound to establish by strong evidence that such illiterate person had fully understood the contents of the document. Nay the threshold or the benchmark required for the purpose of proof is that much higher;
(g) That first and foremost requisite of a contract is for the contracting parties to have reached an agreement based upon offer and acceptance resulting in a meeting of minds so as to reflect consensus ad idem; and
(h) That vague, anomalous, unconscionable and lopsided agreements are not capable of being enforced specifically.
22. When the facts involved in this civil revision are measured in the context of precedent cases and the law laid down therein it is obvious that the agreement in question specific enforcement of which is being sought is unarguably an agreement of mortgage and not of sale which has only been executed with the primary and sole purpose of securing the amount of loan in question and the part about transfer of property has only been thrown in for good measure and which is not of the essence of the agreement. It is also obvious that the respondent is an acknowledged illiterate person and could not have possibly agreed to such an unconscionable agreement which would result in the respondent being short-sold. It is conspicuous that the real intent of the parties was to have the amount of loan secured. The agreement in question could have only been accepted as an agreement to sell if it had only contained the stipulation about transfer of property for consideration and not any stipulation for repayment of loan.
23. In view of what has been observed above, it is evident that the judgments passed by both courts below refusing to recognize the agreement in question as an enforceable agreement to sell are absolutely unexceptionable and in line with trite law.
24. This petition is, therefore, meritless and is accordingly dismissed.