This regular second appeal calls in question the judgment/decree dated the 8th of January, 1985, of the learned District Judge, Faisalabad, whereby the respondents-plaintiffs' appeal was accepted and their suit was decreed.
2. Plot No.17-A, Peoples Colony, Faisalabad, in dispute was allotted to the respondents' predecessor Major Abdul Ghafoor on the 6th of September, 1953; he obtained its possession on the 14th of January, 1957, and after having paid instalments obtained proprietary rights therein by means of a registered sale-deed dated the 21st of February, 1966. He was allegedly on friendly terms with the appellant-defendant Muhammad Siddiq and being himself in the Army asked the latter to construct for him a house thereon at his expense. Statingly he paid him in a chequered manner in all Rs.30,000 either in cash or from his own account or that of his daughters, but in spite of it the building was neither completed nor delivered to him. Consequently he brought the present suit for a declaration that he was owner in possession not only of the plot but also the building raised thereon and prayed for rendition of accounts as also permanent injunction restraining the appellant-defendant from interfering with his possession. He died during pendency of the suit and was represented by the present respondents. The appellant-defendant contested the suit stating that the plaintiff had relinquished the plot in his favour; that he constructed the house for himself at his own expense, without receiving a penny from him and that the suit for a mere declaration in the absence of prayer 'or possession was bad in law. Additionally he asserted adverse possession for more than twelve years making the suit barred by time.
3. The suit had a chequered history having been decided three times after successive remands.
Once it was amended to include a prayer for possession which in turn necessitated addition of some issues. However, finally it was found by the trial Court that the plot was abandoned by the plaintiff in favour of the defendant who raised the building at his own expense to the turn; of Rs.1,09,400 and that the plaintiff was at the most entitled to the cost of the plot amounting to Rs.9,335.40. Consequently the suit was dismissed except to the extent of granting the plaintiff Rs.9,335.40. In appeal, the learned District Judge took a contrary view and decreed the suit on a condition that the plaintiff would pay Rs.1,09,400 to the defendant as cost of the construction.
4. The controversy has now been narrowed down. It is no more disputed (i) that the plot initially belonged to the deceased plaintiff, (ii) that he permitted the appellant-defendant to occupy it for raising the house, (iii) that he did not pay a single pie towards the cost of construction, and (iv) that the defendant was occupying it ever since. The crucial question was if the construction was raised by the appellant in his own right as owner or as agent for the plaintiff. Reliance was placed upon the plaintiff's affidavit (Exh. D.2) and his application (Exh.D.4) whereby he was claimed to have relinquished his title in the plot in favour of the appellant who was said to have paid thereafter the entire cost of the plot amounting to Rs.9,000 odd in instalments to the Department concerned and had thereby become complete owner. A serious objection was taken to, the finding recorded in para.14 of the impugned judgment dated the 8th of Jauary, 1985, wherein the learned District Judge (Mr. Bhaur) held that "the defendant Muhammad Siddiq acted as an agent under its original owner Major Abdul Ghafoor". Kh. Habib Ullah, Advocate for the appellant claimed that a contrary finding on the precise point was recorded by Mr. Bhalli previously in his judgment dated the 2nd of March, 1980, as a Court of co-ordinate jurisdiction to the effect that the appellant in raising the disputed building did not act as agent for the deceased plaintiff and thus such a finding could not have been reversed at the same level of jurisdiction. He emphasized that since neither the deceased plaintiff himself nor his legal representatives challenged that finding in the High Court, it had become final for all times to come and Mr. Bhaur was not competent in a subsequent appeal to hold otherwise. The contention was not without force. In para.12 of his judgment Mr Bhalli remarked:-- "As regards Issue No.7 I agree with the learned counsel for the defendant that there was no point in granting a decree for permanent injunction in favour of the plaintiff restraining the defendant from interfering in the possession of the plaintiff when it was clearly found that it was the defendant who was in actual physical possession of the disputed house. The defendant claimed possession in his own right and not as an agent of-the plaintiff. It was, therefore, an exercise in futility to grant a decree for permanent injunction in favour of the plaintiff who was out of possession of the disputed house."
He agreed with the finding of the trial Court on Issue No.7 in refusing a decree for permanent injunction to the, plaintiff on the grounds that possession of the house lay with the defendant and that he claimed the same in his own right, rather than as an agent for the plaintiff. Ch. Khurshid Ahmad, Advocate for the respondent submitted that these remarks did not clearly hold the defendant to be not an agent for the plaintiff and that the converse finding by Mr. Bhaur in the impugned judgment being one of fact could not be upset. He referred to sections 216, 221 and 223 of the Contract Act pointing out that the only right available to the defendant was to be reimbursed for the cost of construction he raised at his own expense and no more. While it may be true that Mr. Bhalli did not record a categorical finding as to whether the defendant was not the plaintiffs agent, but the sum and substance of discussion in para.12 of his judgment leads one to assume that the sole reason for disallowing a decree for permanent injunction to the plaintiff was that the defendant was not occupying the premises as his agent. Such an inference may not be incompatible even with the plaintiff's own assertion as made in the plaint or shown in the evidence.
The agency, if any, according to him, was created to raise a house for him at his expense by the defendant but the concurrent finding on the question of fact was that he did not pay at all even a single penny. He was belied to that extent, and having so failed on a material constituent of the so- called agency the very plea was miserably exposed. The definition of an agent as provided in section 182 of the Contract Act was to employ another to do an act. Here, the plaintiff tried to show that he had employed the defendant to raise a house for him at the expense of money supplied by him from time to time. The latter element totally failed and, therefore, it could not be assumed that the house so built was in consummation of the agency created by the plaintiff as principal in favour of the defendant. Mr. Bhalli's remarks were that he stood contradicted by his own words on the point. Obviously he could not insist to show himslf to be such a principal and the defendant his agent. On this view of the matter there was hardly any occasion to invoke sections 216, 221 and 223 of the Contract Act.
5. Further, para.10 of Mr. Bhalli's judgment needed considerable attention. He remanded the case observing: "Moreover, the Trial Court also failed to decide as to what was the effect of the construction having been made by, the defendant on the plot owned by the plaintiff. In other words it was necessary to decide as to what equitable arrangement has to be made between the parties in order to reach a just conclusion. It was obligatory for the Trial Judge to decide as to whether the plaintiff was entitled to receive the price of the disputed plot from the defendant or whether the defendant was entitled to receive compensation for the construction raised by him and at what rate."
These words did not leave any room to think that one of the parties was principal and the other agent. If this were so, there was no occasion to have observed that it was. Yet to be settled if the plaintiff was entitled to receive the price of the disputed plot from the defendant. In other words, it was clearly contemplated that there was possibility in law of the defendant retaining the plot in any "equitable arrangement": Thus, holding later that one was the principal and the other agent ran counter to the tenor of the above-quoted finding. Kh. Habib Ullah was greatly justified in urging that if equities of the base were kept in view, the deceased plaintiff had not come with clean hands in stating that he had advanced to the defendant in cash or from his own Bank account or that of his daughters a huge amount of ks.30,000. The concurrent finding of the Courts below on the point helps him to press this event into service in showing that the plaintiff had disentitled himself to the equitable relief. Failure of this part of the plaintiff's version correspondingly lent support to the defendant's plea that he was delivered possession of the plot to raise a house for himself and at the most pay cost thereof to the former. For all purposes this appeared to be the arrangement between the parties hinting at transfer of the plot to the defendant. Section 51 of the Transfer of Property Act was invoked to argue that the defendant-transferee having a defective title had to be paid the cost of improvement as obtain on the date of eviction or in the alternative he could compel the plaintiff to se his interest in the property to him at the market value prevailing at the time when the possession was delivered to him initially. Counsel for him stressed that since an equitable; arrangement was required to be determined to deal with the matter, it would be oppressive to the defendant to ask him to vacate a house which he built at his own expense some thirty years ago and for which he had been paying- taxes etc. Ever since. He relied upon section 2 of the Mesne Profits and Improvements Act XI of 1855 maintaining that equitable estoppel went far beyond section 51 of the Transfer of Property Act and found support for this view from the following passage appearing at page 311 of the Transfer of Property Act (Seventh Edition) by Sardar Muhammad Iqbal Khan Mokal: "In Willmott v. Barber (w), Fry, J., said--"It has been said that the acquiescence which will deprive a man of his legal rights must amount to fraud, and in my view that is an abbreviated statement of very true proposition. A man is not to be deprived of his legal rights unless he has acted in such a way as would make it fraudulent for him to set up those rights."
To raise an estoppel by acquiescence against a plaintiff the following conditions must be fulfilled:- - (1)the defendant must have made a mistake about his rights, (2)the plaintiff who has the better title must know of the existence of his own right which is inconsistent with that claimed by the defendant, (3)the plaintiff must know that the defendant has made a mistake as to his rights, (4)the defendant must have expended money or done some act on the faith of his mistaken belief, (5)the plaintiff must have encouraged the defendant to. Spend the money or do the act, either directly, or by abstaining from asserting his right.
If these conditions are fulfilled the equitable estoppel goes far beyond section 51. The party estopped is not put to terms to pay compensation but is compelled to make good his representation. Ashburner says(y); "if I build on your land and you are estopped from asserting your title, I take the land; I do not merely get a charge on the land as against you for the money spent on the building."
6. The conditions referred to by the author were quite squarely available in this case inasmuch as the defendant committed a mistake in having failed to obtain a formal transfer deed; the plaintiff knew of his own rights and their inconsistency with those claimed by the defendant; the defendant expended money on a mistaken faith or belief that he was doing so as owner of the house; and lastly the plaintiff encouraged him to spend the money not only overtly but by abstaining from asserting his right. The view taken was that if these conditions were fulfilled, the equitable estoppel would go far beyond section 51. Of the Transfer of Property Act and would compel the party estopped to make good his representation to give effect to the promise or expectation aroused by him in the mind of the opposite party. By his conduct established on the record beyond any manner of doubt whatsoever, the deceased plaintiff was bound to convey the plot to the defendant at the then market valve thercol". However, the appellant Muhammad Siddiq present personally in the Court himself and his counsel Kh. Habib Ullah, Advocate, both showed willingness to compensate the respondents by offering them ex gratia a sum of Rs.20 laic for the plot. One of the reasons for showing this grace was that the present respondents were progeny of the deceased plaintiff and were left orphans after his demise. As against "the then market value" of the plot amounting to 85.9,335.40, paying the respondents a huge amount of Rs.20 laic even if out of grace, was a substantial increase.Views of the respondents in this behalf could not be taken because their counsel Ch. Khurshid Ahmad, Advocate despite notice did not turn up.
7. The R.S.A. Is accepted, the impugned decree is set aside and instead the respondents' suit is decreed only to the extent that they shall be given Rs.20 lac (Rupees twenty laic only) as compensatory price for the plot. This amount may be deposited with the trial Court for respondents within three months as from today. The accretion, if any, on the deposit of this amount shall go to the respondents. In case the said amount is not deposited with the trial Court within the period fixed above, the present appeal shall stand dismissed with costs throughout.