MUHAMMAD SAJID MEHMOOD SETHI, J.:- This consolidated judgment shall dispose of instant revision petition along with connected revision petition i.e. C.R. No.223599 of 2018 as common questions of law and facts are involved in these cases.
2. Through these revision petitions, vires of judgments & decrees dated 21.11.2012 & 23.01.2018, passed by learned Civil Judge and Additional District Judge, Pattoki, respectively, have been assailed, whereby petitioner's suit for recovery was partly decreed concurrently, to the extent of Rs.22,00,000/- as earnest money.
3. Brief facts of the case are that petitioner filed suit for recovery of Rs.44,00,000/-, which was contested by the respondents by filing written statement. Trial Court, after framing issues, recording evidence and hearing arguments of learned counsel for the parties, proceeded to decree the suit partly to the extent of earnest money of Rs.22,00,000/-. Feeling dissatisfied, both the parties preferred their respective appeals, which were dismissed by learned Additional District Judge vide consolidated judgment & decree dated 23.01.2018. Hence, these revision petitions.
4. Learned counsel for petitioner submits that petitioner is entitled to get double amount of the earnest money along with damages, as agreed between the parties, but this aspect of the matter has been overlooked by learned Courts below while passing impugned judgments & decrees, thus, same are unsustainable in the eyes of law. He adds that in terms of Section 19 of the Specific Relief Act, 1877, plaintiff may also seek compensation for breach of the contract, either in addition to the specific performance or in substitution for such performance and petitioner's suit was not only in addition to but also in substitution for specific performance. In support, he relied upon Matloob Ellahi Paracha v. Raja Arshad Mahmood and another (PLD 2024 Supreme Court 663). When confronted, learned counsel for respondents has vehemently opposed the above submissions by contending that petitioner never demonstrated his willingness to perform his part of the contract throughout the proceedings. He argues that respondent Muhammad Nadeem never denied specific performance of the contract, therefore, filing of suit for recovery of double earnest money instead of seeking specific performance of contract leads to the inference that petitioner was short of money. In support of his stance, learned counsel for respondents has referred to Muhammad Jamil and others v. Muhammad Arif (2021 SCMR 1108), Muhammad Asif Awan v. Dawood Khan and others (2021 SCMR 1270), Muhammad Rafique v. Dr. Qadir Ali Khan and another (PLD 2010 Karachi 295), S.M. Shoaib Baghpati v. Umar Gul Agha and 3 others [2017 CLC Note 4], Amjad Ali Abbasi v. Muhammad Buksh Jumani and others (2019 CLC 1275) and Farjan Khan v. Kamran Khan and others (PLD 2021 Peshawar 29). He also contends that an amount of Rs.22,00,000/- has already been received by the petitioner during the execution of the decree. Learned counsel for the petitioner concedes the receipt of aforesaid earnest money, however, he submits that the petitioner is entitled to a decree for double the amount of earnest money; hence, a further sum of Rs. 22,00,000/- remains payable.
5. Main controversy involved in this case is centered upon issue Nos.1, 4 & 5 which are reproduced as under:-
1. Whether the plaintiff is entitled for recovery of Rs.44,00,000/- from the defendant as prayed for?
OPP.
2......
3......
4. Whether the agreement to sell in favour of Khalid and Muhammad Ahmed were malafidely, fictitiously managed by the plaintiff himself, the suit is liable to be dismissed on this ground? OPD.
5. Whether the defendants are still willing for part performance of impugned agreement and the plaintiff backed out from the same and the suit is liable to be dismissed on this ground? OPD.
6......
7. Relief Record shows that petitioner filed suit for recovery of Rs.44,00,000/- as earnest money along with damages with the averments that respondents were the owners of the land detailed in para 1 of the plaint, who entered into an agreement to sell with the petitioner qua land measuring 18-Kanal in lieu of Rs.50,00,000/-, respondent received a cheque amounting to Rs.22,00,000/- in the name of his brother (respondent No.2), who acknowledged the receipt thereof on the back of agreement to sell, which was signed by all the respondents. According to the contents of agreement to sell, respondents promised to transfer land in question in favour of petitioner after receiving Rs.28,00,000/- on 11.05.2005. The agreement to sell contained that in case of failure of the respondents to perform their part of the agreement, they would be bound to return earnest money of Rs.22,00,000/- along with same amount as damages. In terms of the agreement, petitioner reached the office of Sub-Registrar, Pattoki to perform his part of agreement on 11.05.2005, but respondents did not turn up rather it came to his knowledge that respondents already entered into agreements to sell with other persons and received certain amounts as well and ultimately sold the property to some other persons after receiving the sale consideration. Petitioner also obtained order for registration of FIR against respondents from Justice of Peace, Pattoki in this regard.
6. Syed Fida Hussain while appearing as PW-2 stated that the respondents agreed to sell their property measuring 18-Kanals to the petitioner for a consideration of Rs. 5,000,000/-. The respondents executed agreement to sell (Exh.P1) in this regard. The petitioner paid Rs.22,00,000/- as earnest money to the respondents. PW-2 identified his signatures on Exh.P1 as Exh.P1/2. During cross-examination, PW2 denied the suggestion that the plaintiff caused any delay in the execution of the agreement due to non-payment of the remaining amount. PW-3, Syed Ishfaq Hussain Shah, stated that the respondents agreed to sell property measuring 18-Kanal to the petitioner for Rs.5,000,000 and executed an agreement (Exh.P1), with Rs.22,00,000/- paid as earnest money. He denied that the petitioner delayed execution due to non-payment. PW-4, Syed Muhammad Nadeem Shah, confirmed the sale agreement and payment of earnest money but clarified he was not a witness to the agreement. He accompanied the petitioner to the Sub- Registrar's office where payment was submitted. PW-5, Nazir Ahmed, testified that he issued the stamp paper and drafted the agreement (Exh.P1). He confirmed the agreement included clauses allowing the petitioner to transfer the property through the Court if the defendant failed to perform his part of agreement, and that earnest money would be forfeited if the petitioner failed to pay the remaining amount on time. Respondent No.2, namely Muhammad Saleem Akhtar while appearing as DW-1, stated that petitioner failed to pay the remaining amount by the agreed date and filed a false suit, leading to forfeiture of earnest money as per the agreement. He admitted not issuing a written notice for cancellation of Exh.P1 or responding to a legal notice received by his sister and not obtaining any Fard / Jamabandi for the sale deed. DW-2, Muhammad Ashraf, deposed that the petitioner asked to reduce the amount as it had become difficult for him to pay the remaining amount, quarreled with the respondents and tried to snatch the stamp paper. Despite multiple Panchayats to resolve the issue, the petitioner caused delays, resulting in forfeiture of earnest money.
It is evident from the evidence brought on record that petitioner testified that he appeared before the Sub-Registrar on the agreed date and produced Exh.P2, an application for his verification as buyer, which the Sub-Registrar rejected stating "No such provision in law". The petitioner also submitted a deposit slip (Exh.P3) showing funds for the contract's specific performance.
Respondent No.2 while appearing as DW-1 admitted that a legal notice regarding performance of Exh.P1 was received by his sister, but only after the target date. However, respondents never issued any cancellation notice to the petitioner nor filed any suit to cancel agreement to sell Exh.P1, which is even otherwise an admitted document. The petitioner further claimed that before the agreed date, the respondents entered into separate agreements to sell the same property to other parties and received earnest money from them. The respondents failed to effectively challenge this claim with credible evidence.
7. The conduct of respondents shows that they were never willing to perform their part of the agreement. It is apparent from the available record that respondents never made any attempt to perform their part of the agreement rather entered into agreements with other persons and sold the land after receiving sale consideration. Condition specified in relevant clause of the agreement made between the parties was that the sellers shall pay double the earnest money if they backed out from the sale and in case of death of either of the parties, legal heirs would be bound to abide by the terms and conditions of the agreement. It would be advantageous to reproduce the relevant excerpt of the agreement to sell, which is as follows:- Section 19 of the Specific Relief Act, 1877 gives right to claim compensation to the person suing for specific performance of contract in addition to or in substitution for its breach. The said section is reproduced hereunder for ready reference:- "19. Power to award compensation in certain cases. Any person suing for the specific performance of a contract may also ask for compensation for its breach, either in addition to, or in substitution for, such performance.
If in any such suit the Court decides that specific performance ought not to be granted, but that there is a contract between the parties which has been broken by the defendant and that the plaintiff is entitled to compensation for that breach, it shall award him compensation accordingly.
If in any such suit the Court decides that specific performance out to be granted, but that it is not sufficient to satisfy the justice of the case, and that some compensation for breach of the contract should also be made to the plaintiff, it shall award him such compensation accordingly.
Compensation awarded under this section may be assessed in such manner as the Court may direct.
Explanation.-The circumstance that the contract has become incapable of specific performance does not preclude the Court from exercising the jurisdiction conferred by this section."
In this case, the vendors have committed breach and the transaction could not go forward, therefore, they are liable to repay the earnest money to the vendee. The relinquishment of right to seek specific performance of contract is to be decided keeping in view the conduct of the parties and evidence led in this respect. Reliance in this regard is placed upon Mrs. Mussarat Shaukat Ali v. Mst. Safia Khatoon and others (1994 SCMR 2189).
8. Primarily it entirely depends upon the specific terms/language of the agreement and the relevant facts and circumstances of each case at the time of entering into the agreement and thereafter, which will enable the Court to decide whether the stipulation of specific time for performance of an agreement was not the essence of the contract or the Court while exercising its discretion in this regard could brush aside such agreed stipulation of timeframe merely for the reason that the agreement relates to a transaction involving sale of immovable property. In such circumstances, when there was clear stipulation of the type incorporated by the parties in the agreement having regards to it, while exercising discretion such agreed terms cannot be disregarded by the Court. While dealing with somewhat similar situation, the Hon'ble Supreme Court in judgment reported as Liaqat Ali Khan and others v. Falak Sher and others (PLD 2014 Supreme Court 506), has awarded compensation in the following manner:- "26. Now, the next important issue for consideration before us is regarding payment of compensation, if any, to be made to either of the two parties in terms of this judgment. In this regard, as discussed in the earlier part of the judgment, from the side of the appellants, their learned Advocate Supreme Court has candidly offered to pay a sum of Rupees Three Million to respondents Nos.1 to 4, as compensation as against payment of Rs.30,000 in the year 1979, which sum too they had deposited in the Court at the earliest opportunity, or any other reasonable amount of compensation as deemed fit by the Court. Conversely, learned Advocate Supreme Court for respondents Nos.1 to 4 has also offered to enhance amount of compensation as deemed fit by the Court. Keeping in view such counter offers, an opportunity was afforded to the concerned parties to find out some amicable settlement for this purpose, but this exercise has failed. In any case, from the above discussion we are clear in our mind that in the above discussed facts and circumstances, equitable and fair exercise of discretion is that respondents Nos.1 to 4 are not entitled for the specific performance of agreement in question due to their conduct and default.
However, keeping in view the generous offer made by the appellants, we deem it appropriate to award them compensation of Rupees Five Million, which sum will be paid in addition to the sum of Rs.30,000 paid by them in terms of the agreement, and refund of balance sale consideration amount, which they had deposited in Court in terms of the impugned judgment."
[emphasis supplied] The aggrieved party is entitled to recover reasonable compensation from the party guilty of breach of contract, only if actual loss or damage is proved to have been caused, except where the contract stipulates liquidated damages, in which case reasonable compensation may still be awarded, even if actual loss is not strictly proved. Reference can be made to Province of West Pakistan v. Messers Mistri Patel & Co. and another (PLD 1969 Supreme Court 80).
9. In the present case, the agreement to sell is an admitted document containing a specific stipulation that, upon breach, the vendee shall be entitled to recover double the amount of earnest money paid. Such a contractual clause, freely negotiated and mutually accepted, deserves enforcement unless it is found to be unconscionable or contrary to public policy. The amount of earnest money of Rs.22,00,000/- has been received by the respondents' side, which has been acknowledged on the back of agreement to sell and in terms of the condition specified in relevant clause of the agreement made, reproduced supra, petitioner is entitled to receive the double the amount of earnest money i.e. Rs.44,00,000/-. Reliance is placed upon Muhammad Iqbal v.
Mehboob Alam (2015 SCMR 21), Mst. Safia Begum v. Muhammad Ishaq and others (1988 CLC 1915), Khuda Bakhsh v. Zakia Khatoon and others (2014 YLR 2321), Mrs. Nusrat Kausar Gillani v.
Aftab Ahmed Khan and another (2016 YLR 1690) and Muhammad Tanvir v. Muhammad Ramzan Asad and others (2024 CLC 1379).
10. Even otherwise, the Hon'ble Supreme Court in Muhammad Abdur Rehman Qureshi v. Sagheer Ahmad (2017 SCMR 1696) emphasized that Courts, while exercising equitable jurisdiction under Sections 19 and 22 of the Specific Relief Act, 1877, may decline specific performance and instead award reasonable compensation, particularly where inflation, depreciation in currency value, lapse of time, and market volatility make specific enforcement unjust or impracticable. Likewise, in Liaqat Ali Khan v. Falak Sher (PLD 2014 Supreme Court 506), the apex Court held that in circumstances involving material delay and substantial increase in property value, equitable relief could be moulded to avoid unjust enrichment and to balance the equities. The Sindh High Court, in Miss Uzma Amjad Ali v. Saeeda Bano (2024 MLD 1115), also endorsed the view that when specific performance is declined, monetary compensation may be granted, keeping in view the prolonged utilization of the buyer's funds and prevailing economic factors. In the present case, the vendee's funds remained blocked without fruition of the contract, and the vendor's default has triggered a stipulated liability. Given these circumstances, the plaintiff is held entitled to recover double the earnest money in accordance with the contractual terms, which constitutes just, equitable, and adequate compensation in view of inflationary trends, market appreciation, and the principle of restitution in integrum.
11. There is no cavil that revisional jurisdiction is always exercised with great care and caution, while interfering with the concurrent findings of the learned Courts below but such findings are neither sacrosanct nor it is an inflexible rule that despite observing material flaws, the revisional Court will abdicate to exercise its jurisdiction. The judgments of both the learned Courts below are not based on proper appraisal of evidence and the learned Civil Judge, while partly decreeing the suit filed by the petitioner has grossly mis-read the evidence as already noted hereinabove. The learned lower Appellate Court, while maintaining the judgment of the learned Civil Judge also committed a procedural defect. This amounts to a material irregularity on the part of the learned Courts below.
Thus, this Court under Section 115 of CPC is obliged and fully competent to correct such error in exercise of its revisional jurisdiction contemplated under the said provision of law. When once it is established on the record that concurrent findings are fraught with legal infirmities hedged in Section 115 of the Code ibid, it becomes the bounden duty of Court exercising revisional powers to curb and stifle such illegalities and material irregularities. Reliance in this respect if needed, can be placed upon Imam Din and 4 others v. Bashir Ahmed and 10 others (PLD 2005 Supreme Court 418) and Malik Muhammad Khaqan v. Trustees of the Port of Karachi (KPT) and another (2008 SCMR 428).
12. The nutshell of above discussion is that both the Courts below have acted in an illegal and unlawful manner, while passing the impugned judgments and decrees which are hereby set aside and the instant petition is accepted. As a consequence thereof, suit filed by the petitioner is decreed with no order as to costs, subject to the clarification that if the petitioner, Muhammad Babar Shah, has already received the earnest money in the sum of Rs.22,00,000/- during execution proceedings, the said amount shall be deducted from the total payable amount of Rs.44,00,000/-.
Accordingly, the connected revision petition i.e. C.R. No.223599 of 2018, being devoid of any merits, is dismissed with no order as to costs.