Anwaar Hussain J.- This Civil Revision challenges the concurrent findings of the Courts below.
Through judgment and decree dated 30.11.2022, the learned Civil Judge 1st Class, Sialkot, partially decreed the suit for recovery of Rs.14,800,000/- filed by respondent Zaheer Ahmed Loan, awarding Rs.5,766,000/-, with a 5% annual increase from the date of the sale deed (11.08.2005) until the payment. The remaining claims, including those based on mental anguish and alleged disgraceful conduct of the petitioner, being general attorney of one of the vendors of the sale, were dismissed.
The petitioner's appeal was also dismissed, through judgment and decree dated 21.09.2023.
2. By way of factual background, it has been noted that the respondent's suit was premised on the assertion that Mst. Shukar Bibi, Muhammad Amin, Muhammad Naeem, Muhammad Saleem, and Mst. Sajida Parveen were the owners in possession of the suit property, as detailed in the plaint.
They appointed the petitioner, Shaheen Baig, as their general attorney through document No.655 dated 12.06.2004. Acting under this power of attorney, the petitioner transferred the suit property to the respondent through registered sale deed No.4109 dated 11.08.2005, after receiving full sale consideration of Rs.23,000,000/-. However, the legal heirs of one of the vendors, namely, Muhammad Saleem instituted a suit titled 'Samina Kausar etc. v. Shaheen Baig', seeking declaration and cancellation of the sale deed and the subsequent mutation. They contended that Muhammad Saleem had passed away before the transfer, rendering the sale fraudulent and liable to cancellation.
3. The petitioner and the respondent were impleaded as defendants in the said suit, which was decreed on 30.04.2015. Their respective appeals were also dismissed through a consolidated judgment dated 20.09.2017, wherein it was held that the petitioner had received the entire sale consideration from the respondent but had not transferred the deceased Muhammad Saleem's share to the latter or his legal heirs. While the respondent challenged these findings through Regular Second Appeal bearing No.124611/2017 ("RSA"), the petitioner did not. During the RSA proceedings before this Court, the respondent entered into a compromise with Muhammad Saleem's legal heirs and statedly paid Rs.9,800,000/- on 28.02.2018, in addition to the amount initially paid at the time of execution of the sale deed dated 11.08.2005. Subsequently, the respondent instituted the suit for recovery, asserting that the petitioner had defrauded him by receiving the share of a deceased person, concealing this fact, and embroiling him in prolonged litigation. The suit was contested by the petitioner, and after framing of issues and recording of evidence, the Trial Court partially decreed it, awarding Rs.5,766,000/- with a 5% annual increase, which finding has been maintained by the Appellate Court below.
4. Learned counsel for the petitioner, inter alia, contends that the suit of the respondent was not maintainable, as in the earlier round of litigation, the respondent supported the stance of the petitioner that deceased, Muhammad Saleem, already received his share of the sale consideration, therefore, the suit of the respondent is hit by principle of approbation and reprobation. Adds that there is no claim of Rs. 5,766,000/- and the judgments of the Courts below are erroneous in this regard inasmuch as there is no clarity as to whether this amount corresponds to the proportionate share of the deceased, Muhammad Saleem, in sale consideration of the suit property, which was sold by the petitioner, inter alia, as attorney of the deceased, to the respondent. Further averred that decree passed contained component of compound interest by allowing 5% annual increase on decreed amount of Rs.5,766,000/-, which interest-cum- compensation was allowed without appreciating the scope and mandate of Section 34 of the Code of Civil Procedure, 1908 ("CPC"). He argued that no reasoning was provided to justify the mechanism used to determine this compensation and that no relief had been sought regarding compensation for the period before the suit's institution. Learned counsel has placed reliance upon case reported as Raja Muhammad Sadiq and 09 others v. WAPDA through Chairman, WAPDA House, Lahore and 3 others (PLD 2003 SC 290).
5. Conversely, learned counsel for the respondent has supported the impugned findings.
6. Arguments heard. Record perused.
7. The central issue for adjudication is whether the suit of the respondent was maintainable in view of the fact that he supported the stance of the petitioner that the deceased, Muhammad Saleem, took his share of the sale consideration? If the answer to the said issue is in affirmative, whether, the Courts below were justified in awarding an annual increase, particularly for the period prior to the institution of the suit, keeping in view the import of Section 34, CPC?
8. Before examining whether the respondent's suit was maintainable, it will be appropriate to analyze whether Section 34, CPC empowers the Court to grant interest on the principal amount adjudged payable from the commencement of the suit until the realization of decretal amount.
The Supreme Court of Pakistan in case of Raja Muhammad Sadiq, supra held as under: "6. The examination of Section 34 C.P.C shows that interest can be awarded for the period firstly, from the date when the payment was due till the date of institution of suit, secondly from the date of institution of the suit till the date of decree and thirdly, from the date of decree till the realization of decretal amount. The award of interest under Section 34, C.P.C., from the date of institution of the suit till the date of realization of amount is discretionary with the Court and cannot be claimed as of right. The interest for the period prior to the institution of suit can only be claimed and awarded if it is permitted by the substantive law or it is specified in writing or in the demand notice but no such interest prior to the period of suit under Section 34, C.P.C., can be granted in a decree passed in the suit for damages in absence of the substantive law or if is not specified in writing in any form."
However, in case reported as Ghulam Abbas v. Trustee of the Port of Karachi (PLD 1987 SC 393), it has been held that the right to interest for the period prior to the suit is a matter of substantive law.
It may arise from an express or implied agreement, mercantile usage, statutory provision or equitable grounds. Similarly, in case reported as Terni S.P.A v. PECO (Pakistan Engineering Company) Limited (1992 SCMR 2238) the Supreme Court followed the principle laid down in case of Ghulam Abbas supra, in the following manner: "30. The Pakistan law provides for the grant of interest. The right to interest for the period prior to the date of suit has been held by the Privy Council and by the Supreme Courts of Pakistan and India to be a matter of substantive law and can be allowed if there is (a) a statutory provision, (b) an agreement, express or implied between the parties, (c) a mercantile usage, (d) or some equitable consideration to justify such a grant. B.N. Railway v Ruttanji Ramji AIR 1938 P.C. 67; Mahabir Prasad Rungta v. Durga Datta AIR 1961 SC 990 and Ghulam Abbas v. Trustees of Port of Karachi PLD 1987 SC 393. The law with regard to the grant of interest prior to the date of suit on a debt or sum certain payable at a certain specified time or otherwise is dealt with by the Interest Act, XXXII, of 1839. Section 1 of this Act provides that the Court in its discretion can allow upon any debt or sum certain payable at a certain time or otherwise, if such debt or sum certain is payable by virtue of some written instrument at a certain time, interest to the creditor at a rate not exceeding the current rate of interest from the time when such debt or sum certain becomes payable; or if such debt or sum certain is payable otherwise, then from the time when demand of payment has been made in writing, giving to the debtor notice that interest would be claimed from the date of such demand until the time of payment: without prejudice to cases where interest is payable under any other law. Since interest can be claimed from the date when such debt or loan becomes payable, if such time is specified in writing, or from notice of demand, if such time is not specified in writing, the claim of interest up to date of suit is thus covered by this section."
It is evident that the grant of interest from the date of institution of the suit falls within the discretion of the Court. Though the same cannot be claimed as a matter of right, the Court is vested with the discretion under Section, 34 CPC. As far as the grant of interest for the period prior to the institution of the suit is concerned, the same can be granted in the ways spelled out by the Supreme Court of Pakistan in case of Ghulam Abbas supra, which includes equitable grounds.
9. Having examined the scope of Section 34, CPC, it is pertinent to examine the equitable principle of unjust enrichment. Under common law, unjust enrichment primarily pertains to contract law but has been extended to the constitutional matters to prevent undue financial gain at another's expense. Case reported as Sui Northern Gas Piplelines v. Deputy Commissioner Inland Revenue and others (2014 PTD 1939) is referred, in this regard. In so far as the present case is concerned, it is noted that the petitioner acted as an agent for multiple persons, including deceased, Muhammad Saleem. Notably, the petitioner failed to disclose Muhammad Saleem's prior demise, which automatically revoked the general power of attorney. By withholding this material fact, the petitioner either defrauded the respondent or colluded with him, leading to the execution of a defective sale deed. This deception enabled the legal heirs to successfully challenge the sale, necessitating a compromise by the respondent. The petitioner's failure to challenge the decree in favour of the legal heirs amounted to an implicit admission of his misconduct. As an agent, the petitioner owed a fiduciary duty to act in the best interest of his principal including the deceased, Muhammad Saleem. His failure to transfer the sale consideration to the rightful heirs constitutes a clear breach of that duty. Consequently, the respondent had to bear additional costs to rectify the title, making the 5% annual increase a justified compensatory adjustment.
10. A lot of emphasis has been laid on the point that the respondent has been approbating and reprobating as he initially contended that the deceased Muhammad Saleem had received the sale proceeds, by corroborating the stance of the petitioner. The doctrine of approbation and reprobation, which prevents a party from taking contradictory positions to another's detriment, does not apply to the respondent as the latter, initially, relied on the petitioner's representation that deceased Muhammad Saleem had received his share. However, once judicial findings established otherwise, the respondent adjusted his position accordingly, which does not constitute approbation and reprobation but rather a necessary rectification in the light of legal determinations.
11. The matter can be examined from another angle. The Trial as well as the Appellate Court(s), in case instituted by legal heirs of deceased Muhammad Saleem rightly acknowledged the fraudulent conduct of the petitioner. The following portion of the judgment of the Appellate Court below, dated 20.09.2017, is particularly relevant: "30. It has been noted that general attorney of the original owner has conceded to receive payments from the vendee in toto as is evident from his testimony while appearing as PW-2 which is further substantiated by Bank Transaction Exh.D-7 & Exh.D-8. Agent/appellant No.2 was obliged to make payments to all of the principles rate-ably but fact remains that evidence on record is neither sufficient, nor mind inspiring that he made payments to the predecessor-in-interest of the plaintiffs and as such, he is bound to return the amount received from the vendee equallant (sic) to the share of predecessor-in-interest of plaintiff Mohammad Saleem and as such, the vendee may seek appropriate remedy against general attorney. If the general attorney desires so, he may seek remedy for retrieving the money equallant (sic) to the suit property decreed from the person to whom he delivered the same. For the reasons recorded supra, the appeal titled as 'Zaheer Ahmad Lone Vs. Samina Kausar etc.' is partially allowed and appeal titled as 'Shaheen Baig Vs. Samina Kausar etc.' is dismissed and both the appeals are accordingly disposed off."
(Emphasis supplied)
12. It is worth mentioning that the petitioner did not lay challenge to the judgment dated 20.09.2017.
The petitioner's failure to challenge this finding indicates acceptance of the liability. The respondent, therefore, has an indisputable right to recover the amount he was compelled to pay to legal heirs of deceased, Muhammad Saleem along with compensation, which the Courts below have awarded in terms of 5% annual increase on the amount of money paid by the respondent from the date of execution of the sale deed dated 11.08.2005. Here, it is imperative to address the argument of learned counsel for the petitioner that the respondent did not lay a specific claim of Rs. 5,766,000/-. In this regard, suffice to mention that the respondent, both in his plaint and during the recording of evidence, asserted that this amount was proportionate share of the deceased, Muhammad Saleem, in the total sale consideration of the suit property i.e., Rs.23,000,000/- which the respondent paid to the petitioner, as general attorney of the vendors and there is no specific denial to this extent on part of the petitioner. Needless to mention that evasive denial is no denial in the eye of law and this argument of the petitioner side is misconceived.
13. The above discussion takes this Court to determine the second limb of the issue as to whether the Courts below were justified in awarding an annual increase, particularly for the period prior to the institution of the suit keeping in view the import of Section 34, CPC. In this regard, suffice to observe that the 5% annual increase awarded by the Courts below is not interest in the sense contemplated under Section 34, CPC, which governs the grant of interest as a discretionary relief on a principal sum adjudged by the Court, typically from the date of filing of the suit until realization. Interest under Section 34, CPC is compensatory for the time value of money and generally applies where there exists a delay in payment of an ascertained debt or obligation.
However, in the present case, the awarded 5% increase does not fall within this statutory definition of interest. In the instant case, the increase has been given as a compensatory measure, granted on equitable grounds, to neutralize the impact of inflation and currency devaluation suffered by the respondent due to the petitioner's wrongful conduct. This aligns with the doctrine of restitutio in integrum, which aims to restore the injured party to the position they would have occupied but for the wrongful act. It is imperative to observe that the respondent was forced to make additional payment to Muhammad Saleem's legal heirs to secure clear title to the property. Since this payment was made in the year 2018, their real economic value has eroded over time due to inflation and depreciation of currency. Thus, the compensatory increase serves to restore the respondent to the position he would have been in, had he not suffered financial loss due to the petitioner's fraudulent actions. However, awarding the 5% increase from 11.08.2005 (the dated of execution of sale deed) is inequitable and constitutes unjust enrichment of the respondent. Since the respondent only made payments to legal heirs of deceased Muhammad Saleem in the year 2018 after effecting compromise, increase should be awarded from that point onward i.e., when compromise was effected.
14. In light of the foregoing, the impugned judgments are upheld with the modification that the 5% annual increase shall be calculated from 28.02.2018 (when the compromise was effected by the respondent) instead of 11.08.2005. The revision petition is accordingly dismissed with the stated modification.