MRS. RASHIDA ASAD, J.----This High Court Appeal arises from a judgment dated 06 September 2018, passed by the learned Single judge of this Court, whereby a suit for specific performance filed by the respondent, the original plaintif f, was decreed to the extent of prayer clauses (A) & (B) of the plaint and partly in respect of prayer clause (c). The relief (s) sought in the-suit is as under:- a) To declare that the plaintiff has executed agreement for the purchase of property/suit land under formal agreement and as a token paid Rs. 1050,000 /- to the plaintiff whereby the defendant is bound to discharge his part of the contractual obligation in accordance with law . b) To direct the defendant to perform his pan of the agreement as he has agreed upon settled terms and conditions. c) To direct the defendant to pay damages/ compensation to the tune of Rs.1 Crore for his illegal acts and omission as described in the memo. of plaint. d) To grant permanent injunction against the defendant, his worker , attorney , relatives and assignees restraining them from dispossessing the plaintiff from the suit land with the use of illegal force and without due process of law and also creating third party , interest e) To grant cost of the suit f) Any other relief or relieves which Court may deem fit and proper .
2. The brief facts, as emerge from the plaint filed in the said suit are that the respondent/plaintif f, instituted a suit for specific performance and sought a declar ation of an agreement of sale said to have been 'executed on 21st March 2010 between the parties for the sale of the property , measuring 3-00 acres and 28 ghuntas in Survey No. 210, Naclass No.158, Deh Tore, Tapu Konkar , Gadap Town, Karachi (hereinafter referred to as said property) for a consideration of Rs.12500000/- and the respondent paid a sum of Rs.1,050,000/- to the appellant/defendant, who in turn was required to deposit the original title documents of the said property with a third parry and to ensure fulfillment of all requisite formalities, to accomplish the, transaction of sale within a period of 18 months. It was averted that the appellant/defendant, however , neglected and failed to perform his obligations under the subject agreement, therefore, the respondent/plaintif f filed the above referred Suit against the appellant.
3. The appellant/defendant contested the suit denying the execution of the sale agreement, however , he averted that he had signed a joint venture agreem ent (JV) with respondent on 03 February 2010, according to which the parties had merely agreed to jointly develop the said property for onward sale of units to third parties by sharing profit at a ratio of 60-40. According to the appellant, to start with the JV, the respondent, who was a builder and developer , paid him Rs.10,50000/- and as such he was permitted to use a portion of the said property for office purposes. That instead of launching of any project the respondent placed his private guards and associates in the premises and in fact all such arrangements were made with ulterior motives to usurp the suit property of the appellant and eventually in connivance of his accomplices the respondent obtained his signatures on a memorandum dated 21st March 2010 under duress and through coercion. The appellant expressed his unawareness regarding any public notice and stated that such alleged publication was made on 13 February 2010, much prior to the date of alleged agreement of sale which fact is sufficient enough to show the fraudulent intent of the respondent, hence the said memoran dum is not binding on him and the same did not constitute an Agreement to Sale amenable to specific performance. He prayed for dismissal of the suit.
4. The learned Single Judge by order dated 19.11.2013, restrained the appellant/d efendant from creating any third party interest in the said property , whereas, the respondent was directed to deposit balance sale consideration with the Nazir of this Court within 90 days, which was complied with accordingly . Subsequently , in compliance of order dated 30.11.2017 the appellant deposited the title documents of the said property on 13.02.2015. Out of the pleading of the patties following issues were framed:
1. Whether the plaintiff purchased a piece of land measuring 3 Acres and 28 Ghuntas situated in Survey No.210, NaClass No.158 in Deh Tore, Tapu Konkar , Gadap Town, Karachi, from the defendant, by an agreement dated 21.03.2010 for total sale consideration of Rs.1,25,00,000/ -?
2. Whether the plaintiff is entitled to the Specific Performance of the Contract dated 21.03.2010, while Plaintiff has already deposited with the Nazir of this Court, the entire balance of the sale consideration?
3. Whether the Plaintiff is entitled to the damages of Rs.1 Crore as prayed for , in the prayer clause?
4. Whether the Plaintiff is entitled to the Permanent Injunction against the defendant?
5. Whether the Plaintiff is entitled to the possession being dispossessed during the operation of interim order dated 24.04.2010?
6. Whether prior to the alleged agreement dated 21.03.2010 the Plaintiff and defendant had entered into joint venture. Agreement dated 3-2-2010 in respect of the suit land?
7. Whether the consent of the defendant was freely obtained by the Plaintiff in respect of the alleged agreement dated 21.03.2010?
8. Whether the alleged agreement dated 21.03.2010 was a conclusive agreement between the parties?
9. What should the decree be?
5. The respondent/plaintif f examined himself and so also Muhammad Naeem and Muhammad Junaid being attesting witnesses of the said Agreement. Whereas appellant/defendant himself appeared as his witness and produced original J.V memorandum dated 03.02.2010. After hearing the parties, the learned judge decreed the suit as above.
6. Learned counsel for the appellant at the outset argued that the respondent had approached the court with unclean hands by concealing from the court certain material facts about execution of JV dated 03.02.2010 by the parties which has been produced as Ex.D/2 and the same has been admitted by the respondent during his cross- examination. Elaborating the facts of the case the learned counsel submitted that in the year 2005 appellant had purchased the said property against a sale consideration of Rs.92,00,000/- and raised a boundary wall on the plot; that on 03.02.2010 the appellant entered into a Joint Venture/Ex.D/2 with respondent/plaintif f, who was a builder and developer , for construction of a real estate project over the said plot; that price of said property was fixed at Rs.2,60,00,000/- and it was agreed that after deduction of price of said property and other expenses, the profit would be shared between the appellant and respondent in the ratio of 40-60 respectively; that in terms of said joint venture agreement, initially , the respondent had to pay Rs. 25,00,000/-to the appellant but he received only Rs.10,50,000/- which is evident from the date of pay order . Per learned counsel the respondent was allowed to use a portion of the said property as booking office for launching the project. The learned counsel argued that the proposed project did not come through but the respondent turned dishonest and in connivance of his partners got the signatures of the appellant forcefully on the alleged Sale Agreement. Per learned counsel, the appellant never handed over the vacant possession of the said property to the respondent but the later had entered in the said property on the strength of joint venture and occupied the same by harassing the appellant. After lodgment of FIR against the respondent, for harassment and stealing of his belongings the respondent abandoned the said property and the appellant took over the possession. The learned counsel argued that alleged Sale Agreement is an unstamped paper which is inadmissible under the Stamp Act; that mala fide on the part of respondent can be ascertained from the fact that he made the publication on 13.02.2010, regarding alleged sale of the property much prior to the purported Sale Agreement; that the said memorandum does not constitute to be a valid sale agreement and as such the same is not enforceable and amenable to specific performance, therefore, the impugned decree is liable to be set aside and suit of the respondent is liable to be dismissed.
7. Conversely , learned counsel for the respondent argued that execution of sale agreement was not denied by the appellant as he admitted his signatures on sale agreement which was a substitution of the joint venture agreement that stood cancelled after execution of the sale agreement on 21.3.2010; that the plea of duress and coercion as raised by the appellant is not sustainable as he has not taken any step to get the document cancelled neither made any grievance on this account; that as per agreement of sale the appellant agreed to sale the said property to the respondent for a sum of Rs.1,25,00,000/- and in pursuance thereof the respondent paid a sum of Rs.1,050,000/- to the appellant and also deposited the balance sale consideration with the Nazir of this Court in compliance of the Court's directions; that appellant has also failed to justify receipt of Rs.1,050,000/- which he received in pursuant to the agreement of sale and did not come forward to perform the contract despite receiving legal notice dated 25.03.2010; that learned. Single Judge has rightly decreed the suit against the appellant/defendant and the judgment does not call any interference by this Court.
8. We have very keenly appreciated and considered the arguments of the parties and scanned the evidence and record with the assistance of the learned counsel for the parties.
9. Suffice, Memorandum of Joint Venture dated 03.02.2010 (the line of defence of the appellant) was admittedly executed between the parties for launching an estate project however , the plaint as well as Affidavit in evidence of the respondent are completely silent abou t this fact A plain reading of this joint venture would show that the price of the land has been fixed at Rs.2,60,00,000/- and out of the profit, from the project, appellant and respondent would receive 40% and 60% respectively . Paym ent of Rs.50000/- by respondent to the appellant is also recorded and the earlier had also agreed that initially a sum of Rs.25,00,000/- would be paid to the appellant being agreement money . A copy of the Pay Order (PO) dated 15.02.2010 is also available on record and receiving of Rs.105000/- by the appellant is not disputed. However , the claim of respondent is that he had paid the said amount of Rs.1050000/- on 21.03.2010 being part payment against sale consideration of Rs.12500000/- pursuant to the sale agreement executed between the parties on same day i.e 21-03-2010 and remaining amount was to be paid within 18 months. The respondent in his affidavit in evidence has stated that the said payment was made in presence of witnesses and thereafter an informal agreement was reduced in writing, duly signed by the parties and on same day the possession of the said plot was handed over to him. According to respondent after execution of the said agreement to sale he made publication in daily newspapers on 13.02.2010. Howev er, the appellant while admitting his signature on said memorandum took plea that it was signed by him under dress and threat, whereas, Rs.10,50,000/- were received by him in pursuant of Joint V enture Agreement, for construction of estate project.
10. Record demonstrates that the respondent in his evidence stated that in pursuance to execution of an informal agreement with the appellant he had paid a sum of Rs.10,50,000, on 21.03.2010, in presence of witnesses.
Whereas, his witnesses Muhammad Naeem PW- 1 and Muhammad Junaid, PW-2, during cross-examination admitted that no such amount had been paid by the respondent to the appellant on 21.03.2010 in their presence.
Even if it be accepted for argument sake that said amount was paid on 21.03.201 0, the respondent has failed to produce on record any document show ing that any payment was made on the date of execution of said memorandum, such admission of the witnesses dearly belies the assertion and claim of the respondent that he had paid an amount of Rs.10,50,000/- to the appellant at the time of execution of said memorandum towards the purchase of the subject property . Plain reading of memorandum dated 21.03.2010 shows that, apparently , it was just a promise to enter into an agreement of sale, however , no agreement for sale of property emanating to a valid contract came into existence. It is also an admitted fact that certain essential ingredients were missing in the said memorandum viz. the place of execution, CNICs, addresses of the parties and witnesses, and date of payment of earnest/advance money purportedly paid by the respondent on 21.03.2010.
11. Ex.PW -1/2 is a Legal Notice dated 25.03.2010, allegedly sent to appellant on behalf of respondent, astonishingly just after three days of the execution of said memorandum calling upon appellant to execute formal sale agreement. The appellant categorically denied receiving of such legal notice and the respondent could not place on record any cogent evidence of delivery of such legal notice. More so, in para-5 of the said notice it is mentioned that "at the time of giving formal agreement it was decided that you will convey the property within the period of 18 months and prior to that you will obtain fresh Form-11, permission to sale the property/NOC for sale and also would be ready to execute registered power of attorney , including formal sate agreement...." It clearly shows that the respondent was well aware that the property in question could not be sold without the clearance certificate given by the revenue authorities and he also admitted that no formal sale agreement was executed between the parties. Exs.R-3 and R4 are public notices dated 13.02.2010. The respondent in his affidavit-inevidence asserted that after execution of said so called agreement but a memorandum on 21.03.2010, he got published a public notice in Daily Tang and Dawn, the date of publication of above notices contradicts the assertion of the respondent. Ex.5/5 is an application dated 27.03.2010 to the SHO PS Gadap Town by the respondent for compelling the appellant to execute the sale agreement stating therein that he had purchased the property on 03.02.2010 and took its possession on 05.02.2010. Approaching to police for creating a pressure on the appellant in a pure civil dispute, in which police has nothing to do, reflects ill intention of the respondent apart from the fact that such statement is apparently conflicting with his claim regarding purchase of property on 21.03.2010. Considering the entire record and evidence, a question arises that whether the parties had entered into a valid sale agreement of property culmination to specific performance.
12. The remedy for specific performance of contract is provided under Section 12 of Specific Relief Act, 1877, yet grant of relief of specific performance is discretionary in nature and the Courts are not bound to grant such relief merely because it is lawful to do so. Grant of relief of Specific Performance being discretionary is provided in Section 22 of the Act and same is reproduced below: - "22. Discretion as to decreeing specif ic performance. The jurisdiction to decree specific performance is discretionary , and the Court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the Court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a Court of appeal."
13. A. perusal of the aforesaid provision clearly authorizes the court to decline specific performance on equitable ground.
14. In Ghulam Nabi v. Muhammad Yaqoob (PLD 1983 SC 344) the aforesaid provision was considered by Honourable Supreme Court and it was held as follows:- "The jurisdiction under section 22 is discretionary only in the sense that it cannot be claimed as a matter of right. As enjoined by the section itself, the exercise of the discretion is not to be arbitrary but sound and reasonable, guided by juridical principles and capable of correction by a Court of appeal. The exercise of the discretion to grant or refuse to grant relief will, therefore, depend upon the circumstances of the case and the conduct of the parties."
15. In the case of Arif Shah v . Abdul Hakeem Qureshi (PLD 1991 SC 905 ) it was observed as under:- "It may be noticed that according to the above quoted section, the jurisdiction to pass a decree of specific performance is discretionary and the Court is not bound to grant such relief merely because it is lawful. It may further be noticed that the above section gives two illustrations which are not exhaustive to demonstration in which case the Court may decline to exercise discretion of granting the specific performance of a contract namely; (i) where the circumstances under which the contract is made are such as to give the plaintif f an unfair advantage over the defendant though there may not be fraud or misrepresentation on the plaintif fs part; (ii) Where the performance of a contract would involve some hardship on the defendant which he did not foresee whereas its non performance would not involve such hardship on the plaintif f"
16. In the case of Mussarat Shaukat Ali v. Safia Khatoon (1994 SCMR 2189 ), the Honourable Supreme Court observed as follows: "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 plaintif f. The Court while refusing to grant a decree for specific performance to a plaintif f must find something in the conduct of plaintif f which disentitled him to the grant of equitable relief of specific performa nce 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 (emphasis supplied)."
17. The ratio of the aforesaid precedents is that where circumstances under which a contract is made are such as to give the plaintif f an unfair advantage over the defendant, though there may not be fraud or misrepresentation on plaintif fs' part, the relief of specific performance may be denied and declined.
18. Perusal of section 22 of the Specific Relief Act, 1877 as interpreted by the Honourable Supreme Court, makes it abundantly clear that the Court has discretion to decline specific performance of an agreement even in the absence of an obvious impediment in this behalf and despite the fact that such agreement may possess all necessary particulars entitling the specific performance of the contract. It declares that specific performance is essentially an equitable relief which can lawfully be declined if the Court comes to the conclusion that it is unjust and inequitable to do so. For determining where the relief of specific performance is to be granted, the circumstances under which the contract is executed and the conduct of the parties at that time and thereafter may be taken into consideration. The illustrations given in section 22 of the Act pertain to unforeseen circumstances and hardships that may be inflicted upon a party through specific performance in contradistinction to lack of such hardships as a consequence of failure to specifically perform the contract.
Illustrations are not exhaustive but indicative of the discretion available with the Courts which must be exercised on the basis of settled judicial principles. It may be emphasized that the discretion must be relatable to the circumstances in which the agreement came about, subsequent conduct of the parties and the consequences of grant or refusal of the relief of specific performance.
19. In Liaqat Ali Khan v. Falak Sher (PLD 2014 SC 506), the aforesaid principle was reiterated in the following terms:- "18. A plain reading of above reproduced statutory provision leads to a definite conclusion that the relief of specific performance claimed by respondents Nos.1 to 4 in their suit is, purely discretionary in nature and the Court is not bound to grant such relief merely as it is lawful to do so. At the same time, the discretion to be exercised by the Court shall not be arbitrary , but it should be based on sound and reasonable analysis of the relevant facts of each case, guided by judicial principles and capable of correction by a Court of appeal. Moreover , in sub-paragraphs Nos. ii and iii of section 22 (ibid) some instances have been given, where the Court can refuse to exercise its discretion to pass a decree for specific performance. A careful reading of these instances, which are self-explanatory , further amplify vast powers of the Court in the matter of exercise of its discretion for ordering specific performance or otherwise. When the above reproduced provision of law is read in conjunction with the case-law cited at the Bar by both the learned Senior Advocates Supreme Court, the things as regards powers of the Court in exercising its discretion, become even more clear that there is no two plus equal to four formula available with any Court of law for this purpose, which can be applied through cut and paste device to all case s of such nature. Conversely , it will be the peculiar facts and circumstances of each case, particularly , the terms of the agreement between, the parties, its language, their subsequent conduct and other surro unding circumstances, which will enable the Court to decide whether the discretion in terms of section 22(ibid) ought to be exercised in favour of specific performance or not. Besides, some well articulated judgments on the subject, have further broadened the scope of exercise of such discretion of the Court by way of awarding reasonable compensation to the parties, keeping in view the other surrounding circumstances, such as rate of inflation, having direct bearing the value of suit property , inordinate delay/ passage of time, and change in the circumstances or status of the subject property etc."
(underlined for emphasis)
20. The evidence as available on record and the conduct of the respondent emanates a considered outcome that respondent has failed to make out a case for specific performance of contract and as such he was not entitled for such relief and impugned judgment suffers from material illegalities thus not sustainable. And accordingly , the impugned judgment B dated 06.09.2018 is set aside with direction that the amount deposited by the respondent with the Nazir of this Court shall be refunded to him along with profit thereon, if accrued, on the said amount since the same was deposited. The appellant shall also return to the responde nt the double of the amount (Rs.1050000) received by him as compen sation for beneficial use of such amount for a considerable long time. The appellant shall submit a pay order in the name of respondent to the Nazir of this Court for delivery to the respondent within a period of one month from the date of this judgment.
Instant High Court Appeal stands allowed in the above terms along with listed applications.