ALI HUSSAIN QAZILBASH, J.--This is an appeal from the order of the Lahore High Court, dated 9-6- 1976, whereby the regular second appeal of the appellant was dismissed in limine.
2. The dispute is with regard to the sale of shop bearing No.1114 Eastern half portion, Ward No.6/M, outside Delhi Gate. Multan. This was purchased by respondent No.2 in open auction conducted by the Settlement Department and P.T.O. Was issued to him on 11-6-1960. The said portion was in occupation of the appellant as tenant under respondent No.2. On 19-6-1965, Abdul Haq respondent No.2 executed an agreement for sale (duly registered) of the suit shop in favour of respondent No.1 for a consideration of Rs.12,000 of which a sum of Rs.7,500 was paid by respondent No.1 to respondent No.2 on different dates against receipts which are available on the record. It was stipulated in the said agreement that the sale-deed will be executed favour of the vendee (respondent No.1) within a period of four months. Since respondent No.2 did not sell the property, respondent No.1 served him with a registered notice on 22-9-1966 asking him to get the sale-deed executed and registered in his favour. This having not been done, respondent No.1 was compelled to file a suit for specific performance of the agreement to sell in respect of the suit shop on 12-10- 1967. It was during the pendency of the suit that it transpired that respondent No.2 had already sold the shop in favour of the appellant on 11-7-1967 through a registered sale-deed and, therefore, the appellant was also arrayed as a defendant in the said suit. The suit was contested by the appellant alone whereas respondent No.2 was placed ex parte. As a result of the contest the learned trial Court framed as many as five issues, of them issues 2 and 3 are relevant and are in the following words: "(2) If issue No.1 is proved in affirmative, whether defendant No-2 is not bound by the said agreement for sale of shop?
(3) Whether defendant No. 2 is a bona fide purchaser for value without notice of the shop in question, if so, what is its effect?"
The learned trial Court after recording the evidence decided the issues No.1 in respect of execution of the agreement for sale of the suit shop in favour of respondent No.1 but issues 2 and 3 were decided against respondent No.1 by holding that the appellant was not informed about the contract of sale and that he was a bona fide purchaser of the property and thus dismissed his suit vide judgment, dated 23-6-1973. Respondent No.1 took up the matter in appeal from the above judgment and decree which was heard by the learned Additional District Judge, Multan, who reversed the findings of the learned trial Court on issues 2 and 3 and decreed the suit of respondent No.1 vide his judgment, dated 1-4-1975. This time it was the appellant who filed a regular second appeal in the High Court which too was dismissed by a learned Single Judge of the High Court in limine on 9-6-1976.
3. Leave was granted mainly to consider whether the agreement of sale, dated 19-6-1965 not being compulsorily registerable under section 17 of the Registration Act, 1908, did not constitute a constructive notice of the agreement for sale in favour of the appellant.
We have heard the learned counsel for the parties and have gone through the record of the case.
Mr. Bashir Ahmad Ansari, the learned counsel for the appellant, has made two-fold submission. His first contention was that the appellant is a sitting tenant of the suit shop and was a bona fide purchaser of the same, he had no proper notice of the agreement of sale in favour of respondent No.1 and none was served upon him either. Therefore, the sale in favour of the appellant is protected and both the Courts have acted illegally in decreeing the suit in favour of respondent No.1. Secondly he submitted that under section 22 of the Specific Relief Act the jurisdiction to decree specific performance is discretionary which had rightly been exercised by the learned trial Court in favour of the appellant. The same, therefore, should not have been set at naught by the learned appellate Courts. As for the first contention, it was raised before the two Courts which was duly considered by them and repelled. The learned Judge of the High Court while dealing with the issue of knowledge about the agreement to sell by the appellant has observed: "The learned lower appellate Court while setting aside the judgment and decree passed by the learned trial Court has relied upon the statements of the P.W.3 and P.W.7, Abdul Aziz and Bashir-ud- Din, respectively, to the effect that the appellant had due notice about the agreement to sell executed by respondent No.2 in favour of respondent No.1. According to the statement of P.W.3, he had been working at the shop of appellant during the period 1965 to 1968 and during that period Mehar Din plaintiff-respondent No.1 before this Court, came to the appellant and asked him to pay rent of the property as the same had been purchased by him. It is admitted by both the parties that the appellant has been occupying the property as tenant under the previous owner, respondent No.2. Similar is the statement of P.W.7. The learned trial Court while deciding issues Nos.3 and 4 never adverted to the evidence of P.W.3 and P.W.7, which has been rightly relied upon by the learned lower appellate Court while deciding the case. So far as the evidence of the appellant on the said issues, of which was placed on him, is concerned he simply denied notice to have been received by him in regard to the previous transaction. Nothing has been brought on record by him to show that P.W.3 and P.W.7 have been inimical to him or otherwise favourably inclined towards respondent No.1. The learned counsel for respondent No.1 have drawn my attention to the statement of appellant himself appearing as D.W.1 admitting that respondent No. 1, Wehar Din, plaintiff before the trial Court, was in occupation of the adjoining shop and he used to visit respondent No.2 at the shop in question. He has further admitted that he never enquired from respondent No.1 as to why he used to visit Abdul Haq, respondent No.2. The question which arises is: as to how it is possible to believe that appellant did not come to know about the previous transaction having been effected in favour of respondent No.1 by respondent No.2 when the shop of respondent No.1 adjoined the shop in question. The conclusion has been arrived at by the learned lower appellate Court on due appraisal of the evidence produced by the parties. It is based upon good reasons and is not liable to be interfered within the given circumstances."
The arguments addressed by the learned counsel for the appellant in support of his first contention, in view of the above findings, did not impress us at all in that even if his contention that the execution of the registered agreement to sell did not constitute a constructive notice to the appellant is accepted correct, yet there is ample evidence on the record from the side of respondent No.1 and the other circumstances alluded to by the two appellate Courts which go a long way to establish that the appellant had the notice of the agreement for sale in favour of respondent No. 1.
4. As for the second contention, this too cannot be sustained inasmuch as section 22 of the Specific Relief Act itself invests the appellate Court to correct, in suitable cases, the discretion exercised by the trial Court. The instance case, we are of the view, is fully covered by "Case III" of section 22 ibid. Section 22 lays down: "22. Discretion as to decreeing specific performance.-- The jurisdiction to decree specific performance if 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------------------------------ ------...
The following is a case in which the Court may properly exercise a discretion to decree specific performance:---- III. Where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance."
Respondent No.1 had got the deed of agreement to sell registered in order to safeguard his interests from outside invasion and to impart notice to all. Admittedly, respondent No.1 had paid the major portion of the sale consideration to respondent No.2 in respect of the suit property, thereby performing a substantial part of his contract and was all the time ready and willing to complete the contract but it was only the other side who tried to frustrate his (respondent No.1's) efforts which compelled him to seek his redress through the process of the Court. In these circumstances if the decree had been denied to him, he would have suffered not only monetary loss but mental torture as well. Therefore, the suit was rightly decreed in his favour.
5. In view of the above, this appeal has no merits and is dismissed with costs.