MIAN BURHANUDDIN KHAN, J.-- On 19-11-1966 the appellants entered into an agreement to sell their house situate in Gulberg, Lahore to respondent Mirza Azam Beg for Rs, 90,000 but afterwards on 1- 5-1967 the parties entered into a second agreement rescinding the earlier agreement and it was inter alia agreed that the appellants would refund a total of Rs, 33,986 in all to the respondent by 1- 1-1973. In this A connection it was expressly stipulated between the parties that if the respondent started any proceedings against the appellants then the unpaid amount due to him shall be forfeited. Leave was granted by this Court vide order dated 25-3-1976 to consider the question raised regarding the interpretation and effect of stipulations in the second agreement dated 1-5- 1967.
2. A suit was instituted in the Court of Civil Judge, Lahore by Mirza Azam Beg respondent herein against Ch. Altaf Hussan and his wife Mst. Safia and one Mst. Kaneez Fatima for the recovery of Rs, 29,986. Facts as stated in the plaint were briefly that on 19-11-1966 Ch. Altaf Hussain and Mst. Safia Begum defendants No. 1 and 2 (appellants herein) had executed an agreement in favour of the plaintiff (respondent herein) for the sale of a bungalow for a consideration of Rs, 90,000 Mirza Azam Beg plaintiff paid Rs, 87,467 in purusance of the said agreement. Later on both the parties cancelled the said agreement on 1-5-1967 with the stipulation that the entire money received from Mirza Azam Beg would be returned to him. Accordingly Rs, 55,967 were paid to him leaving the balance, including interest of Rs, 2,468 which was to be paid on or before January, 1973 or in case the bungalow in question was sold earlier, the balance amount would be refunded immediately to the plaintiff/respondent. After the execution of the Agreement dated 1-5-1967 defendants Nos. 1 and 2 paid to the plaintiff an amount of Rs, 4,000 on 4-11-1967 leaving a balance of Rs, 29,986 including interest. But on 12-4-1971 the plaintiff Mirza Azam Beg through a public notice, published in the daily Pakistan Times, learnt the defendants/appellants were going to sell the said bungalow to Mst. Kaniz Fatima. The plaintiff, therefore, sent a notice to the counsel of Mst. Kaniz Fatima on 13-4- 1971 informing him that the defendants Nos. 1 and 2 (appellants herein) owed an amount of Rs, 29,986 to him, to which the plaintiff received reply on 12-5-1971.
3. Defendants Nos. 1 and 2, however, transferred the bungalow for a consideration of 1,07,000 in favour of the defendant No, 3 Mst. Kaniz Fatima by a registered sale-deed dated 6-5-1971, but did not pay back Rs, 29,986 to the plaintiff Mirza Azam Beg. The suit was resisted by the defendants Nos. 1 and 2 and the main ground taken up was that the plaintiff had violated the terms and conditions of the agreement dated 1-5-1967; that the said bungalow was owned and possessed by them and the same was neither mortgaged nor under any encumbrance and they could, therefore sell it without incurring any liability. Defendant No, 3 Mst. Kaniz Fatima took up the plea that she had purchased .The house in question from its lawful owners and no liability was attached to the transaction. The learned Civil Judge framed 9 issues. Main issues Nos. 1, 2 and 3 read as follows:
(1) Whether the plaintiff is estopped by reason of his conduct from filing the suit?
(2) Whether the defendant No,3 is a necessary or proper party to the suit?
(3) Whether the plaintiff has violated the terms of the agreement dated 1-5-1967, if so, in what respect and to what effect?
4. Issues Nos. 1 and 3 were dealt together by the Civil Judge and it was held that in view of the agreement dated 1-5-1967 Exh. D.2 the plaintiff/respondent Mirza Azam Beg could not have resorted to coercive methods like making a complaint to the Martial Law authority against the defendants/appellants. Both these issues were, therefore, decided against the plaintiff/respondent.
As regards issue No,2 it was held that defendant No,3 Mst. Kaniz Fatima was a proper party in the suit. Thus this issue was also decided against the plaintiff while the remaining issues were decided in favour of the defendants/appellants vide judgment dated 29-1-1975.
5. First appeal against the judgment of the learned Civil Judge was filed in the Lahore High Court by Mirza Azam Beg respondent which was accepted vide judgment dated 19-1-1976, judgment of the trial Court was set aside and decree for the recovery of Rs, 29,986 including interest and future profit @ 9% was passed against respondents Nos. 1 and 2 (appellants herein) while respondent No, 3 Mst. Kaniz Fatima was absolved of any liability.
6. In order to comprehend the contentions raised by the learned counsel we may refer to the second agreement dated 1-5-1967 wherein it is recorded that agreement dated 19-11-1966 regarding sale of bungalow No, K/2 alongwith land measuring 2 Kanals 3 Marlas and 90 sq. Ft situate in Block-K Gulberg Scheme-3, Lahore was agreed upon to be sold to the plaintiff/respondent for Rs, 90,000 out of which Rs, 5,000 were paid in cash and another Rs, 5,000 were paid through cheque No, SAAL-196419, dated 19-11-1966 drawn on Habib Bank Ltd., Bank Square, Lahore Rs, 31,500 due from the owners to the House Building Finance Corporation would be paid by the plaintiff/respondent to the H B FC and remaining Rs, 48,500 will be paid by him to the owners within the stipulated period at the time of registration of the sale-deed, and if the plaintiff/respondent failed to execute the registered sale-deed in accordance with the aforesaid terms, the earnest money paid by him will be forfeited. As the respondent Mirza Azam Beg failed to abide by the terms of the Agreement dated 19-11-1966 it is now agreed that he will not be penalized and the earnest money paid by him will not be forfeited; that the appellants have returned the money received so far by various cheques Balance of Rs, 31,500 and interest Rs, 2,468 upto 1-1-1973 will be paid by instalment of Rs, 500 per month or Rs, 6,000 in lump sum annually which will be deposited in the account of respondent in Habib Bank Ltd., Bank Square, Lahore and if the respondent started any legal proceedings before 1-1-1973 he shall forfeit Rs, 33,986 or any amount which shall be due on that date from the appellants; any legal proceedings would be considered as null and void and that the owners of the bungalow would be at liberty to sell the same to any person to whom they may desire and neither the respondent nor his heirs would be entitled to any claim as against the owners or the purchaser.
7. Learned counsel referred to letter Exh. D-1/A which was addressed by respondent Mirza Azam Beg to the Martial Law Administrator, Zone 'A' Lahore which reads as follows: ' I beg to report that one Ch. Altai Hussain s/o Ch. Muhammad Ismail, Gujjar by caste, resident of 2/K Gulberg Scheme No,3, Lahore, who is an Assistant Engineer in the Irrigation P.W.D. Secretariat, near Tollinton Market Lahore, owns Bungalow No, 2/K Gulberg Scheme No, 3, Lahore. This bungalow has an annexe also. Whereas Ch. Altaf Hussain lets out on hire, the main bungalow, he himself resides in its annexe. His wife Mst. Safia Begum is a co-owner of the said property and her husband holds a Registered General Power of Attorney from her to do all things with respect to this property on her behalf as well. He may have other property as well but I cannot say definitely. He is thus obviously living beyond his means because in this little service, he cannot have so much property.
(2) He owes me a sum of Rs, 30,406 since 1-5-1967 rather from 3-2-1967 when the actual payment was made to him. On 1-5-1967 he acknowledged this debt in writing. No Government servant under the Government Servants Conduct Rules can be under debt because that clearly shows that man lives beyond his means.
(3) I request that under the circumstances, suitable action in the matter may kindly be taken against him."
' Contention of the learned counsel is that according to the agreement Exh. D.2 respondent Mirza Azam Beg had agreed not to file any legal proceedings against the appellants but the aforesaid letter Exh. D-1/A addressed to the Martial Law Administrator was a positive attempt to initiate proceedings before the Martial Law authorities or through the Department of appellant No. 1 and thus the learned High Court Judge has not fully comprehended the tenor of the agreement or of the letter Exh. D-1A and this was in violation of the terms of the second agreement entailing forfeiture of the balance amount sued for and the terms of the said agreement admit of no other interpretation.
8. The learned counsel further contended that the learned High Court Judge omitted to consider letter Exh. D/1 wherein the Deputy Sub-Administrator, Martial Law, Lahore asked the Chief Engineer, Irrigation, Lahore to advise the appellant No. 1 to clear the debt. Similarly the learned Judge did not consider letter Exh. D 3/1 from the same Martial Law authority addressed to respondent Mirza Azam Beg that inquiry was held regarding his claim for the recovery of the suit amount but it was found that the amount had been given under a mutual agreement between the parties. But it was held that letter Exh. D-1/A was just a complaint regarding the conduct of appellant No. 1 to be a "corrupt officer" and it would be travesty of fact as in this letter respondent Mirza Azam Beg had asked for the recovery of the amount and thus violated the terms of the agreement.
9. On facts the learned counsel contended that the learned Judge of the High Court has erred in holding that the respondent was entitled to profit @ 9% as no such ground was urged by the respondent in the Memorandum of Appeal and lastly that accrument of interest @ 3% was specifically agreed between the parties and as such no higher rate of interest could be awarded in the instant case, and in the end, the learned counsel also referred to section 73 of the Contract Act, 1872.
10. We have examined the contentions raised by the learned counsel and agree with the finding of the learned High Court Judge that the letter referred to above does not constitute "proceedings" for the recovery of the outstanding amount due from the appellant; that letter addressed to the Martial Law Administrator was only regarding the conduct of appellant No. 1 as regards his financial status and living beyond his source of income; that the relevant stipulation in the Agreement, in fact, contemplates proceedings in a Court where the claim could be adjudicated upon by evidence and decree passed accordingly. As to the rate of interest decreed it is in conformity with the relevant provision of section 34, C.P.C. Which reads as follows: "(1) Where and in so far as a decree is for the payment of money, the Court may, in the decree, order interest as such rate as the Court deems reasonable to be paid on the principal sum adjudged from the date of the suit to the date of the decree in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate as the Court deems reasonable on the aggregate sum so adjudged, from the date of the decree to the date of payment, or to such earlier date as the Court thinks fit."
' Lastly, the provisions of section 73 of the Contract Act, 1872, referred to by the learned counsel are not applicable to the facts of the present case. Thus we find no merit in this appeal which is, consequently, dismissed, with no order as to costs.