ZULFIQAR AHMAD KHAN, J. This Second Appeal moved under Section 100 of the Code of Civil Procedure, 1908 is directed against the Judgment 03.07.2007 Decree dated 06.08.2007 ("Impugned Judgment and Decree") passed by the learned Additional District Judge-II Karachi South ("First Appellate Court") in Civil Appeal No.21 of 2006 ("Civil Appeal"), whereby, the appeal filed by the respondent No.1 was allowed.
2. The facts de rigueur for the disposal of this second appeal are that a project was announced by the respondent No.1 and appellant booked Apartment No.221/A, Marine Drive, Block-2, Clifton, Karachi against the total sale consideration of Rs.6,20,000/- on 21.07.1990. Per appellant's plea that she had paid a substantial amount of Rs.5,34,070/- towards the subject apartment but the respondent No.1 malafidely cancelled her allotment through cancellation notice dated 13.10.1996 which led her to file civil suit bearing No.1610 of 2003 for specific performance, damages and injunction before the learned Senior Civil Judge-VIII Karachi South ("trial Court") which was decreed vide Judgment dated 30.11.2005 and Decree dated 06.12.2005. The respondent No.1 impugned the Judgment and Decree of the learned trial Court by, filing Civil Appeal before the learned First Appellate Court where the Appellate Court reversed findings of the learned trial Court and set aside the Judgment and Decree recorded by the learned Trial Court, hence the appellant filed this second appeal.
3. Learned counsel for the appellant vehemently argued that the learned Senior Civil Judge being a Trial Court adjudicated the issues upon correct appreciation of law and facts and decreed the suit whereas the learned First Appellate Court through impugned Judgment and Decree reversed the findings in a slipshod and sketchy manner. Per learned counsel the appellant paid a considerable amount towards the subject apartment which payment was also admitted by the respondent No.1 during the course of cross examination but the learned First Appellate Court failed to consider the vested rights of the appellant and rendered the impugned Judgment. He lastly contended that the amount demanded by the respondent No.1 through various letters were never served upon the appellant and through a cancellation letter dated 13.10.1996, the respondent No.1 deprived the appellant from her right of property which is guaranteed vide Articles 23 and 24 of the Constitution, 1973. He further contended that the respondent No.1 surreptitiously created third party interest in the subject apartment as the cancellation letter dated 13.10.1996 issued on 14.10.1996 (a postal date) and on the same date i.e. 13.10.1996 the respondent No.1 allotted the subject apartment to the respondent No.2 which shows mala fide of the respondent No.1. While summing up his arguments, learned counsel went through various admissions of the respondent No.1 made by them during the course of cross-examination. Per Learned counsel, the respondent No.1 claimed that the respondent No.2 made regular payments, however, the respondent No.2 introduced on record through her written statement that she paid a lump sum amount towards the subject apartment, therefore, the learned trial Court having examined the pros and cons of the lis decreed the suit filed by the appellant but the learned First Appellate Court reversed the findings of the learned trial Court through impugned Judgment and Decree which is liable to be set aside.
4. Mr. Mian Mushtaq Ahmed, learned senior counsel advocated the case of the respondent No.1 and premised his case on the argument that the appellant breached the various terms and conditions of the contract and committed default in payment of agreed installments as well as miscellaneous payments causing cancellation of subject apartment in the name of the appellant. He further contended that through various intimation/warning notices, the appellant was informed by the respondent No.1 regarding payment of due installments but neither reply/response was ever submitted from her nor she turned up to tax the due installments. He further contended that default of installment is evident from the record hence the subject apartment was cancelled by the respondent No.1 which act of the respondent No.1 is according to law as the respondent No.1 before cancelling subject apartment in the name of the appellant, issued various notices to the appellant to pay the due installments and agreed miscellaneous payments which was never paid by the appellant, therefore, the learned First Appellate Court having examined the contentions of the respondent No.1, allowed the appeal filed by the respondent No.1 which needs no interference of this Court.
5. I have heard the respective learned counsel and have also considered the record to which my surveillance was solicited. The primary point of determination of this Court, in consonance with the prescription of Order XLI, Rule 31 of the Civil Procedure Code, 1908 is whether the impugned Judgment passed by learned First Appellate Court suffers from any illegality or material irregularity and that the Learned First Appellate Court was justified in setting aside the Judgment and Decree passed by learned trial Court?
6. It is considered pertinent to initiate this deliberation by referring to the settled law in such regard.
To start with, it is common knowledge that right to file Second Appeal provided under section 100 of C.P.C. can be set into motion only when the decision is contrary to law or failed to determine some material issue of law, and where a substantial error or defect in the procedure provided by the Code or law is witnessed.
7. Initially, a suit for specific performance was filed by the appellant. Under Section 22 of the Specific Relief Act, the exercise of jurisdiction by the Court for decreeing the suit for specific performance of contract is discretionary in nature where the Court is not bound to grant such a relief, but in tandem the discretion is not to be exercised arbitrarily but should be based on sound legal principles after analyzing and gauging the circumstances, inter alia, whether the contract is such which gives an unfair advantage to the plaintiff over the defendant or the performance of the contract encompasses some hardship on the defendant which he could not foresee or whether its non-performance would embroil some hardship to the plaintiff and whether the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance.
The person seeking specific performance has to establish that he is enthusiastic and vehement to act upon his obligations as per the contract whereas the opponent is refusing or delaying its execution. Another crucial aspect is what constitutes a valid contract between the parties for which undoubtedly one of the essential conditions is consensus ad idem for settling all the terms of the contract and upon perusal of Exh. P5/56 (available in evidence file), I have found that the parties consented to the terms and conditions of the application form/Exh . P5/56.
8. In order to substantiate her claim, the appellant produced overwhelming documentary evidence which tends to show that she had committed no default in the payment of installment and that she had paid a sum of Rs.5,34,070/- (out of total Rs.6,20,000/-) towards the subject apartment which fact is also confirmed from the documents produced by the appellant before the learned trial Court. The respondent No.1's witness was cross-examined by the appellant's counsel where material admissions were introduced on record which admissions were also discussed by the learned trial Court and it is considered expedient to reproduce the same hereunder:- "Installment of April, 1991 was paid on 20th April, 1991. It was 10 days late.
Installment of May, 1991 was deposited on 18.06.1991. It was due on 10th May, 1991.
Installment for the month of June, 1991 was also deposited on 18.06.1991. It was 8 days late.
It is correct that installment for the month of July, 1991 was deposited by her in advance along with the installment of June, 1991 Installment for the month of August, 1991 was deposited by the plaintiff on 3rd September, 1991.
It is correct that second yearly installment was deposited by the plaintiff on 3rd September, 1991.
It is correct that documentation charges are also included in the misc. charges, application for water connection are included in the documentation charges"
9. It is gleaned from appraisal of the foregoing that the appellant paid a substantial major portion of the contracted amount, as well, the delay pointed out by the witness of the respondent No.1 during evidence appears to be within the concession as ten days' grace period was already provided by the respondent No.1 per terms and conditions No.2 of application form (Exh. P5/56 available in evidence file) but cancelling the subject apartment despite having received major portion of the consideration (which is admitted by the witness of the respondent No.1) in my view is unwarranted and in violation of Section 14 of the Specific Relief Act, 1877. The learned trial Court having examined the documentary evidence reached the following conclusion:- "By going through with the entire evidence and documents, letter made available, I find that defendant No.1 never informed the plaintiff regarding the status of project or specifically her flat/unit. All the time every letter of defendant No.1 either contains threat or demand of money. The defendant No.1 admittedly has taken a sum of Rs.5,34,070/- against the price of suit property from plaintiff against the total cost of Rs.6,20,000/- thus their appeared no justification in cancelling the allotment of plaintiff. Further the written statement is silent that whether the project is completed in all respects and necessary NOC has been obtained from the competent authority i.e. KBCA and/or CDG, Karachi (KBA Wing). The defendant No.1 witnesses though attended the proceedings and lead his evidence, yet he has- not brought any record to support his contention that the defendant No.1 has acted strictly in accordance with the terms and conditions, delay of 1, 2 or 3 weeks is of no consequences, the project is late by years, therefore, the defendant No.1 has not acted in terms of agreement.
Learned counsel for the defendant No.1 during the course arguments has contended that the plaintiff has changed her address without informing the defendant No.1 during the period when the dispute between the parties was arisen. The plaintiff in her cross examination has stated that she after her marriage shifted to her husband's house, address of her husband house was not provided to defendant No.1, yet at the given address her mother is still residing, and any correspondence made all mailed their as alai when receipt will be delivered/transferred to her. Defendant No.1 neither in his written statement nor his affidavit has ever stated that she is raising the construction as per schedule given to the purchaser, defendant No.1 has committed to given the possession and also guarantee for not increasing the price but record reveals that defendant No.1 from time demanding money on one pretext or other charging mark-up misc. expenses account is increasing day by day without any justification. Under these circumstances naturally the purchaser will feel insecure and will try to secure his or her interest in any manner and specially by withholding the installments. In this case a major portion of sale consideration has been paid, only a sum of Rs.85,930/- is outstanding of which as per agreement/letter of taking Rs.30,000/- has to be paid at the time of possession. Thus only Rs.55,930 is due and outstanding which under no circumstances warranted cancellation."
10. From record it further unfurls that the respondent No.2 only lied a written statement and never lead any evidence. It is settled principle that written statement by itself has no evidentiary value unless deponent of pleadings (plaint or written statement), enters into witness box to lead evidence[1]. The respondent No.1's witness introduced on record during the course of examination in chief that the respondent No.2, the subsequent purchaser of the subject apartment, made payment with regard to the subject apartment on various dates till taking over possession, however, the respondent No.2 in her written statement admitted that she only paid a lump sum amount of Rs.620,000/- to the respondent No. 1. It is considered expedient to reproduce the relevant admission of respondent No.1 and stance of the respondent No.2 in this regard as under:- Admission of respondent No.1's witness Defendant No.2 has made the payment of various dates between the date of booking and date of taking over possession.
I have not bought the original papers relating to the allotment of flat in dispute of defendant No.2.
Stance of respondent No.2 in written statement.
The defendant No.2 paid full cost of the unit No.221/A in Marine Drive project, Clifton i.e. Rs.620,000/- in cash and obtain a letter of Allotment dated 13.10.1996 which is filed herewith as annexure A"
10(sic) It is gleaned from appraisal of the foregoing that the respondent No. 1's witness admitted to have not exhibited any original document regarding allotment of subject apartment to the respondent No.2 as well he admitted such fact before the learned trial Court. It is further evident from the record that the respondent No.1 did not receive the payment from respondent No.2 in installment as the respondent No.2 in her written statement admitted that she paid price of subject apartment in lump sum, which creates serious doubts in the version of the respondents which fact was fully considered by the learned trial Court, but ignored by the appellate Court.
12. It is worth stating here that a subsequent vendee avowing bona fide intention cannot be absolved from the duty of making investigations as to the title of the vendor, which inquiries may include but not limited to inviting objections through public notices in order to determine that there was no deception or foul intentions in the transaction and that he/she acted in good faith and with bona fide intention without knowledge or notice of earlier sale agreement at the time of his transaction and proceeded in the matter as a person of ordinary prudence before signing on the dotted line, in which exercise the respondent No.2 clearly failed. In the case of Hafiz Tassaduq Hussain v. Lal Khatoon (PLD 2011 SC 296), the Hon'ble Supreme Court held that:- "5. Be that as it may, the subsequent vendee thus has to discharge the initial onus as follows:--
(1) that he acquired the property for due consideration and thus is a transferee for value, meaning thereby that his purchase is for the price paid to the vendor and not otherwise.
(2) there was no dishonesty of purpose or tainted intention to enter into the transaction which shall settle that he acted in good faith or with bona fide;
(3) he had no knowledge or the notice of the original sale agreement between the plaintiff and the vendor at the time of his transaction with the later.
From the above it is depicted that the section merely enacts the English equitable rule which allows later legal title to prevail over an equitable interest in case of bona fide purchaser for value, without notice. And this principle has to be kept in view by the Courts while analyzing and appreciating the evidence on the record for the discharge of the requisite burden.
7. The second ingredient "good faith" is the term which reflects the state of mind and according to section 3(20) of the General Clauses Act, 1897 "a thing shall be deemed to be done in 'good faith' where it is in fact done honestly, whether it is done negligently or not". While interpreting this, it was held in Nannu Mal v. Rani Chander (AIR 1931 All 277 (FB)) that good faith as defined above is equivalent to honesty of dealing and does not entail upon the purchaser the necessity of searching the registry, even assuming that there were facts indicative of negligence in investigating title, that by itself was not predicative of a lack of bona fides. Therefore, the second condition shall stand settled if the subsequent vendee has acted as a man of ordinary prudence in making inquiries expected from a purchaser who wants to acquire a good title for the price/value he is paying. This may include the checking of the Revenue Record or obtain the copies thereof to verify about the title of the vendor or any third party in right, interest or charge over the property or any endorsement in such record about any pending litigation or an injunctive order etc; this may be a good and adequate, exercise of investigative process in case of rural/agriculture property. And for the same purpose, regarding urban property, the Excise and Taxation record may be examined coupled with the verification and obtaining the original documents of title from the vendor, if those are available. However, the subsequent vendee is not obliged to run from the pillar to post in conducting rowing and fishing inquiries, to ascertain if a third party has any interest etc. in the property which otherwise is visibly lacking, But if there exist some overt, prominent and conspicuous indicators about the third party interest, which are so patently noticeable and manifest that those could not and should not be missed and ignored by a purchaser, such as the possession not with the vendor but someone else, who if approached or its nature investigated would lead to discover such interest, the purchaser is obliged to probe about it, otherwise he may not be able to take resort of the noted equitable rule."
13 The combined effect of the above discussion leads me to the irresistible conclusion that the instant IInd Appeal be allowed which thus also ought to result in setting aside the impugned Judgment and Decree passed by learned First Appellate Court and at the same time maintaining the Judgment and Decree of the learned trial Court. Ordered accordingly.
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