MIRZA VIQAS RAUF, J. This regular second appeal under Section 100 of the Code of Civil Procedure (V of 1908) (hereinafter referred to as "CPC") arises out of the judgments of the courts below, which are at variance. The appellant being the allottee of plot bearing No.23 measuring 500 square yards situated in street No.20 Sector-A Defence Housing Morgah-II Rawalpindi (hereinafter referred to as "suit plot") entered into an agreement dated 26th March, 2002 with respondent No.1 (hereinafter referred to as "respondent") whereunder the appellant received an amount of Rs.6,00,000/- as sale consideration and agreed to transfer the "suit plot" in favour of "respondent" on its due course after obtaining no objection certificate from respondent No.2. On failure to abide the terms of the agreement, "respondent" instituted a suit for specific performance, declaration and injunction wherein she asserted that the appellant was allotted "suit plot" by respondent No.2 and as he was in dire need of money he approached "respondent" and offered her the "suit plot" for sale. The offer made by the appellant was accepted and sale consideration of Rs.6,00,000/- was paid to him and in terms thereof, sale transaction was reduced into writing as agreement dated 26th March, 2002.
In pursuance to the agreement constructive possession of the "suit plot" was also handed over to "respondent" as the appellant was not in physical possession of the "suit plot" yet. A deed of general attorney was also executed by the appellant in favour of "respondent" but later on he betrayed.
2. Suit was resisted by the appellant, who submitted his written statement wherein he asserted that agreement to sell was got executed by "respondent" through misrepresentation. The respondent No.2, however, did not submit its written statement, resultantly right of defence was struck off vide order dated 06th October, 2004. It would not be out of place to mention here that the appellant also instituted a suit for declaration and both the suits were consolidated whereafter consolidated issues were framed. The appellant, however, later on opted to withdraw his suit, which was dismissed as such vide order dated 13th April, 2011. The proceedings were thus conducted in the suit instituted by "respondent" and the learned trial court after recording of evidence of both the sides proceeded to decree the suit while holding the "respondent" entitled to receive Rs.12,00,000/- i.e. double of received amount as mentioned in agreement to sell (Exhibit-P2) by way of judgment dated 20th February, 2012. Feeling dissatisfied the "respondent" preferred appeal before the learned Additional District Judge, Rawalpindi, which was accepted and the judgment of the learned trial court was modified by extending relief of specific performance in favour of "respondent" while directing the appellant to transfer the "suit plot" in her name within one month through judgment and decree dated 20th October, 2012.
3. Learned counsel for the appellant submitted that as per agreement to sell it was stipulated that in case of breach of terms of the agreement the appellant shall pay the double of the amount of sale consideration and in view thereof, learned Civil Judge was right in its approach to award the decree for return of the amount instead of granting decree for specific performance of the agreement. Learned counsel emphasized that if the damages are assessable then there arises no need to ask for specific performance. It is argued that relief of specific performance is even otherwise discretionary with the court and the learned Civil Judge has rightly exercised its discretion. Learned counsel submitted that "suit plot" was allotted by respondent No.2 and there were certain restrictions on transfer of the same to third party and as such specific performance of the agreement was not possible. Learned counsel contended that the first appellate court has erred in law, while passing the impugned judgment and decree. Placed reliance on MUHAMMAD NAEEM SHAFI and another versus Mst. SHAMIM AKHTAR and another (2022 CLC 744).
4. Conversely, learned counsel for "respondent" submitted that there was no legal hurdle in the specific performance of the agreement and mere stipulation in the agreement qua compensation is not enough to refuse specific performance of the agreement. Learned counsel while going through Section 20 of the Specific Relief Act, 1877 contended that first appellate court has rightly interfered with the judgment of the learned trial court. It is emphatically argued that the learned Civil Judge has erred in law while refusing specific performance of the agreement, which judgment has rightly been interfered by the learned Additional District Judge. Added that impugned judgment is unexceptionable.
5. Heard. Record perused.
6. The matter in controversy interse parties is an offshoot of agreement to sell dated 26th March, 2002 (Exhibit-P2) wherein the appellant being owner/allottee of "suit plot" agreed to sell the same to "respondent" with sale consideration of Rs.6,00,000/-, which was received in lump sum. As per claim of "respondent" the deal was the outcome of the desire of the appellant, who was in dire need of money at that time. The possession was, however, not delivered to the "respondent" as it was to be handed over by respondent No.2. It would not be out of context to mention here that the agreement to sell was also coupled with a deed of attorney. Suit was, however, resisted by the appellant on the ground that due to close relationship the "respondent" through misrepresentation got executed the agreement to sell, which has been revoked by the appellant on 27th March, 2002 in view of penalty clause available in the same. From the perusal of written statement of the appellant it clearly reveals that he has taken self-contradictory stances to controvert the agreement to sell.
7. It is also evident from the record that the appellant also instituted a suit for declaration for the annulment of the agreement but it was dismissed as withdrawn on 13th April, 2011. In order to prove the agreement to sell the "respondent" examined Muhammad Akram being her special attorney as PW1. She also produced Muhammad Rizwan Minhas one of the attesting witnesses of the agreement to sell as PW2. In addition thereto, the "respondent" tendered in evidence certain necessary documents as well. Contrary to this, the appellant examined Ahsan Mehmood being attorney as DW1 as the sole witness to rebut the evidence led by the "respondent" who in his statement conceded the facts of execution of agreement to sell (Exhibit-P2). Thus after the admission of this material fact, the "respondent" successfully discharged the onus of proof with regard to the execution of agreement to sell, as admitted facts need not to be proved. It is well established on the record that there was no hurdle in the way of the appellant to execute the sale deed in favour of "respondent" in furtherance of the agreement to sell.
8. The only resistance to the suit was rested on the fact that since there was a penalty clause in the agreement to sell that in case of failure by the appellant to abide the terms of the agreement, he will pay the double of the amount received at the market value to the "respondent", so the "respondent" is precluded to ask for specific performance of agreement to sell. This plea has found due favour before the court of first instance and suit was decreed to the extent of Rs.12,00,000/- i.e. double of received amount as mentioned in the agreement to sell (Exhibit-P2). The "respondent" however feeling aggrieved preferred an appeal before the learned Additional District Judge, Rawalpindi which was allowed through impugned judgment and she was held entitled to the decree for specific performance of agreement.
9. There is no cavil that relief of specific performance is a discretionary relief in terms of Section 22 of the Specific Relief Act, 1877 (hereinafter referred to as "Act, 1877") but such discretion cannot be exercised arbitrarily and the court while exercising the discretion is bound to follow the well settled principles that a discretion shall always be structured on reasoning and fairness. Guidance in this respect can be sought from Mrs. MUSSARAT SHAUKAT ALI versus Mrs. SAFIA KHATOON and others (1994 SCMR 2189). The relevant extract from the same is reproduced below:- "......It is true that grant of relief of specific performance is discretionary with the Court but this discretion cannot be exercised arbitrarily. The relief of specific performance being an equitable relief, it can be refused by the Court only if the equities in the case are against the plaintiff. The Court while refusing to grant a decree for specific performance to a plaintiff must find some thing in the conduct of plaintiff which disentitled him to the grant of equitable relief of specific performance, or the Court reaches the conclusion that on account of delay in seeking the relief, the circumstances have so materially changed that it would be unjust to enforce the agreement specifically. The specific performance of a contract cannot be refused merely because it is lawful for the Court to refuse it. Section 22 of the Specific Relief Act, though not exhaustive provides some instances in which the specific relief of a contract may be refused by the Court in its discretion....."
10. So far judgment in the case of Muhammad Naeem Shafi's supra is concerned, it is observed that facts of the case run on entirely different path. In the referred case, the plaintiff/appellant failed to show his willingness to perform part of the contract and in this backdrop his appeal was dismissed while holding that the relief of specific performance is a discretionary relief as per contemplation of Section 22 of the Act ibid. In the facts and circumstances of the present case Section 20 of the "Act, 1877" would come into play which is reproduced below for the purposes of convenience :- "20. Liquidation of damages not a bar to specific performance. A contract, otherwise proper to be specifically enforced, may be thus enforced, though a sum be named in it as the amount to be paid in case of its breach, and the party in default is willing to pay the same.
Illustrations A contracts to grant B an under-lease of property held by A under C, and that he will apply to C for a license necessary to the validity of the under lease, and that, if the license is not procured, A will pay B Rs.10,000. A refuses to apply for the license and offers to pay B the Rs.10,000. B is nevertheless entitled to have the contract specifically enforced it C consents to give the license."
From the bare perusal of the above provision of law it is manifestly clear that even if there is a stipulation in agreement that in case of its breach a penalty would be the outcome, this by itself would not impede the specific performance of the agreement.
11. In somewhat similar circumstances in the case of GULZAR AHMAD and others versus MUHAMMAD ASLAM and others (2022 SMCR 1433), the Hon'ble Supreme Court of Pakistan held as under:- "10. In the present controversy, the niceties of section 20 are also very crucial which elucidate that a contract otherwise proper to be specifically enforced, may be thus enforced, though a sum be named in it as the amount to be paid in the case of its breach and the party in default willing to pay the same. In this backdrop a party to a contract for the sale of immovable property should not be allowed to evade specific performance merely because the agreement provides the penalty to be paid on default. In the same context, this court rendered the judgment in the case of Syed Arif Shah v. Abdul Hakeem Qureshi (PLD 1991 SC 905) and held as under:- ".... there is legal presumption in view of Explanation to section 12 that the breach of a contract to transfer an immovable property cannot be adequately relieved by compensation in money. This initial presumption is not dislodged by the factum that under the sale agreement, a sum is named as the amount of liquidated damages in case the contract is not performed. The burden to dislodge the above legal presumption is on the person who avers contrary to it. It was further held that the jurisdiction to decree specific performance is discretionary and the Court is not bound to grant such relief merely because it is lawful. However, the discretion of the Court is not arbitrary but sound and reasonable and is to be guided by judicial principles which are amenable to correction by a Court of appeal".
Halsbury's Laws of England, Second Edition, Volume XXXI, Part-II "Limits of the Jurisdiction", Paragraph 373 also enlightened the raison d'tre of penalty clause as under:- "373 Where the contract contains a stipulation that in the event of non-performance a certain sum of money shall be paid, that fact is not in itself decisive in considering whether or not specific performance should be granted. Nor does the distinction between penalty and liquidated damages (q) affect the answer to this question (r). The answer is to be found by considering the intention of the parties, that is, whether the party bound to performance has an alternative choice given to him by the contract, to perform or to pay the agreed sum, or whether he is bound to do a certain thing with a penal sum or sum by way of liquidated damages attached as security (s). In the latter case the Court, notwithstanding the penal clause, enforces performance if the contract be such that without the penal clause it would have been proper for specific performance."
(q) For an explanation of this distinction, see titles Bonds, Vol.III., p.110; Damages, Vol.X., pp.141 et seq., see also titles Building Contracts, Engineers and Architects, Vol.III., PP.279 et seq., 292, 293; Master and Servants, Vol. XXII., pp.161, 162; Shipping and Navigation, Vol. XXX., p.361 (Charter-party). (r)
London City) v. Pugh (1927), 4 Bro. Parl. Cas.395; 17 Digest 404, 2134; Webb v. Clark (1782), I Fonblanque, Treatise of Equity, 154; 2 Digest 19, 112; French v. Macale (1842), 2 Dr. & War. 269; 42 Digest 446, 180 i, Coles vs. Sims (1854), 5 De. G.M. C.1; 17 Digest 402, 2116; Carden v. Butler (1832), Hayes & Jo.112; Bird v. Lake (1863), I Hem. & M.111; 17 Digest 365, 1757; Bray v. Fogarty (1870), 4 I.R.Eg.544; 17 Digest 149, p. (s) French v. Macale, Supra; Coles v. Sims, Supra; Roper v.
Bartholomew, Butler v. Bartholomew (1823), 12 Price, 797, 821; 17 Digest 402, 2114; and see titles Deeds and Other Instruments, Vol.X., pp.325-327; Equity, Vol.XIII., pp.189, 190.
In the case of Ranger v. Great Western Rail Co. [Reported as 5 H.L. Cas. 72; 24 L.T.O. S. 22; 18 Jur.
795; 10 E.R.824], Lord Cranworth held as under:- "There is no doubt that where the doing of any particular act is secured by a penalty, a court of equity is in general anxious to treat the penalty as being merely a mode of securing the due performance of the act contracted to be done and not as a sum of money really intended to be paid. On the other hand, it is certainly open to parties who are entering into contracts to stipulate that, on failure to perform what has been agreed to be done, a fixed sum shall be paid by way of compensation. Whether a sum so fixed is to be considered as merely in the nature of liquidated damages, is often a question of great nicety and difficulty. I am not sure that benefits has, on the whole, resulted from the struggles which courts, both of law and equity have made to relieve contracting parties from payments which they have bound themselves to make by way of penalty.
Such a course may have been very reasonable and useful where the damage resulting from the violation of the contract is capable of being exactly measured, but whenever the quantum of damage is in its nature uncertain and the due performance of it has been secured, or purports to have been secured, by a penalty, it might, perhaps, have been safer and more convenient to have always understood the parties as meaning what their language imports namely, that on failure to perform the contract, the stipulated penalty should be paid. But this has not always been the doctrine of the courts. The distinction between a penalty and a sum fixed as the conventional amount of damages is too well established to be now called in question, however difficult it may be to say in any particular case under which head the stipulation is to be classed. I shall presently have occasion to state that the sums in this contract, made payable under the name of penalties, are to be treated as liquidated damages, and not as penalties to secure something unliquidated."
Reference to the above effect can also be made to Sh. MUHAMMAD RIAZ DIWANA through His LEGAL HEIRS versus Sh. MUHAMMAD SHARIF and others (1989 MLD 3663). The relevant extract from the same is reproduced below:- "15. The fallacy of this argument consisted in assuming that mere incorporation of such a clause in the agreement, brings the agreement within the mischief of section 21(a). This argument cannot be accepted without doing violence to the express provisions of Section 20 of the Act which provided that "a contract, otherwise proper to be specifically enforced, may be thus enforced, though a sum be named in it as the amount to be paid in case of its breach, add the party in default is willing to pay the same." The reported judgments on which reliance has been placed by the learned counsel in support of this argument are not applicable to the facts and circumstances of this case. Mr. Bhandari on the other hand relied on the cases reported as Abdul Karim v. Muhammad Shafi and another 1973 SCMR 225 Khuda Bakhsh v. Abdul Jabbar and others PLD 1952 Pesh. 32 and Hakim Ghulam Rasool v. Sh. Imdad Hussain and another PLD 1968 Lah. 501. In Abdul Karim's case the case reported in "PLD 1958 PC page 150" referred to by the learned counsel for the appellants has been discussed and it has been held that the rule laid down in the said case is not applicable in Pakistan in the presence of the express statutory provision in the Specific Relief Act referred to above. This apart, the said clause m the agreement merely provides that Sh. Riaz deceased would return the earnest money alongwith equal sum if he failed to execute the sale-deed by stipulated time i.e. 30-8-1980. Both these agreements in general and this clause in particular, in terms or by implication do not suggest that the parties settled that this sum would be an adequate compensation in money as a substitution of non-performance of the agreement i.e. in lieu of the transfer of ownership rights. It merely provided that a penalty would be imposed in case the vendor failed to abide by the terms of the agreement in that, if he failed to transfer the property by the stipulated date. It rather established the anxiety of respondent No.l to ensure that the agreement must be performed. It is difficult to accept the argument that this sum should be taken to be adequate compensation in money for non-performance of agreement to attract section 21(a) of the Specific Relief Act, because a penalty to be imposed in case of failure of a party to abide by the agreed cannot be equated with the compensation in lieu of transfer of the property itself. The argument thus has little merit which is hereby repelled."
After having an overview of the principles of law referred hereinabove I am of the considered view that the learned first appellate court was justified in forming the opinion that the "respondent" is entitled for the decree of specific performance in the circumstances.
12. This is a regular second appeal which has a very limited scope as provided under Section 100 of "CPC". There is though divergence of views in both the courts below but ordinarily preference should be given to the judgment of first appellate court unless it offends any law. The judgment of learned first appellate court cannot be interfered with unless some procedural defect materially affecting such findings is pointed out by the appellant. There is a mark distinction between the revisional jurisdiction and appellate jurisdiction in terms of Section 100 of "CPC". In the case of BASHIR AHMED vs Mst. TAJA BEGUM and others (PLD 2010 Supreme Court 906) the august Supreme Court of Pakistan outlined the scope of Section 100 of "CPC" in the following manner :- "6. A second appeal, however, is much more restricted in its scope compared to a regular first appeal. Section 100, C.P.C. lays down the limits of jurisdiction of a Court in second appeal. It stipulates as under:- "100. Second appeal.---(1) Save where otherwise expressly provided in the body of this Code or by any other law for the time being in force, an appeal shall lie to the High Court from every decree passed in appeal by any Court subordinate to a High Court, on any of the following grounds, namely:-
(a) the decision being contrary to law or to some usage having the force of law;
(b) the decision having failed to determine some material issue of law or usage having the force of law;
(c) a substantial error or defect in the procedure provided by this Code or by any other law for the time being in force, which may possibly have produced error or defect in the decision of the case upon the merits."
7. At this point, we may note that first and second appeals are available (wherever provided by law) as of right. In the present case, a second appeal was not available to the petitioner. He, therefore, invoked the revisional jurisdiction of the High Court under section 115, C.P.C. This jurisdiction is, in material respects, even more restricted than the appellate jurisdiction under section 100, C.P.C., because a judgment can be assailed through a revision petition only where it suffers from a jurisdictional error of the nature set out in clauses (a), (b) and (c) of section 115, C.P.C.
8. As opposed to first and second appeals, provided for in sections 96 and 100, respectively of the C.P.C., the provisions of Article 185(3) of the Constitution do not confer any right on an unsuccessful litigant, to prefer an appeal to this Court. He must seek leave to appeal, and in order to be granted such leave, a petitioner under Article 185(3) ibid, is obliged to show something at least equivalent to if not more stringent than what is required by section 100 or 115, C.P.C. It is this requirement which lays down the minimum standard and sets the bar for granting leave to appeal under Article 185(3) ibid. In the context of the present case, we would like to examine the criteria for determining whether leave to appeal should or should not be granted. This necessarily will have to be determined in the light of the facts and circumstances of this petition and, therefore, exhaustive rules of universal application may neither be appropriate nor possible.
9. Guidance in laying down criteria for grant of leave to appeal, can, however, be taken from the provisions of section 96 and section 100 of the Code of Civil Procedure. One rule which can be safely laid down is that in order to be granted leave to appeal under Article 185(3) of the Constitution, at the very least, the petitioner should satisfy the requirements of section 100, C.P.C. In the present case, it is quite obvious to us that the decisions of the learned Courts below are neither contrary to law nor any usage having the force of law. Likewise, we have not been shown that the impugned judgments have omitted to decide "some material issue of law or usage having the force of law." We may note at this stage, that not all instances of a Court's failure to decide an issue will suffer for the purpose of allowing an appeal. It is only a failure to decide material issues which will enable an aggrieved party to invoke the jurisdiction of an appellate Court. The question of materiality, that is, whether or not an issue is of a material nature, will depend upon whether the ultimate decision of the Court of first appeal would have been different, if the omitted issued had been determined by it. Thus, in order to succeed in second appeal on ground (b) of subsection (1) of section 100, C.P.C., an appellant would have to show that the Court of first appeal would have reached a different conclusion, had it not failed to decide the issue of law or usage specified in ground (b) ibid. 10. We now take up for consideration ground (c) given in sub-section (1) of section 100, C.P.C. This provision requires an appeal, to show firstly that there has been a substantial error or defect in procedure and secondly that such a substantial error could have resulted in an erroneous or defective decision of the case. Illustrations to highlight such substantial errors are not hard to find. However, no such substantial error arises from the judgments assailed before us."
The same view was previously expressed by the Hon'ble Apex Court in the case of MUHAMMAD FEROZE and others vs MUHAMMAD JAMAAT ALI (2006 SCMR 1304).
13. For what has been discussed above, I have no hesitation in my mind to hold that judgment of the learned Additional District Judge, Rawalpindi is neither perverse nor arbitrary, so as to justify the interference in exercise of jurisdiction contemplated in Section 100 of "CPC". Consequently the instant regular second appeal, being without any merit is dismissed with no order as to costs.