1. ' This suit has been filed by the plaintiffs for recovery of Rs,14,51,000 as damages.
2. ' Briefly the facts are that the present plaintiffs who are Civil Engineers, Designers, Contractors and Builders had entred into an agreement with M/s. Karachi Transport Syndicate Limited on 16-11-1968 for the purchase of the plot of land measuring 28,000 square yards situate in Garden East, Karachi bearing No,769 for a lump sum price of Rs,9,00,000 only. The plot is hereinafter referred to as the suit plot. The plaintiffs then prepared a feasibility report regarding construction of building on suit plot which as per estimates showed the initial investment required including cost of suit plot to be Rs,20,00,000 while the total cost of project woiked out to Rs,1,11,00,000 only. This project was in the nature of self financing scheme and plaintiffs expected advance rent for the shops, cinema and octroi pump. The plaintiffs then approached the defendant late Mr. Abdul Majeed Bawany, who agreed to finance the abovesaid project on the condition to secure his finances, the plaintiffs would transfer the rights, interests acquired by them under the agreement of sale dated 16-11-1968.
3. The plaintiffs had initially demanded a sum of Rs,14,00,000 from the deceased Abdul Majeed Bawany as price of land in addition to the condition that plaintiffs will be given the building project on the suit plot. These terms and conditions were agreed between the parties initially but subsequently at the instance of defendant, the plaintiffs reduced the sale consideration of the suit plot to Rs,10,50,000 on further assurance that the defendants will also award four other building projects to the plaintiffs as mentioned in the plaint. Such an agreement was entered into between the parties on 22-11-1968 whereby the plaintiffs transferred all their rights and interests in the suit plot in favour of late Abdul Majeed Bawany. As there were some liabilities over the suit plot, it was agreed that the payments will be made to the plaintiffs as under:--
(a) Rs,21,000.
4. ' As advance to the vendor on signing of this Agreement.
(b) Rs,3,96,329.48.
5. ' For settling the liabilities of the Syndicate as appended to this Agreement.
(c) Rs,4,50,000.
6. ' For payment to Syndicate after a proper sale-deed is executed and registered in favour of the Vendee.
(d) Rs,1,82,670.52.
7. ' For payment to the Vendor after the sale-deed is executed and registered by Syndicate in favour of the Vendee and the Vendor fulfills all this undertakings as contained in this Agreement."
8. ' It is admitted that sum of Rs,21,000 was paid to the plaintiffs at the time of signing of the agreement while a bank guarantee was furnished for the amount of Rs,4,50,000 in favour of Messrs Karachi Transport Syndicate Limited but the deceased failed to clear the liabilities of Rs,3,96,329.48.
9. It is also alleged that since the deceased did not clear the liabilities, the suit plot was put to public auction by this Court in execution of the decrees in Suits Nos.78 of 1963 and 175 of 1964 on 19-2- 1969. The plaintiffs participated in the auction and their bid was for Rs,7,50,000 while ,the deceased, who also participated in the auction and his bid went upto Rs,10,50?000 but the suit plot was, however, knocked down in favour of one Ali Jaffer Zaidi in the sum of Rs,13,03,000 only. The plaintiffs alleged that he made protest on which the defendants assured them that he would get the suit plot through some other means and he also filed an application under Order XXI, Rule 89, C.P.C. For setting aside the auction which application was dismissed by this Court on 24-2-1970 and the parties to present suit then filed L.PA. No,44 of 1970, which was pending at the time of filing the suit but a statement at bar is made that the same has also been dismissed. The plaintiffs and defendants during the pendency of the above-said application also filed a suit being Suit No,173 of 1969-for specific performance of the contract against Messrs Karachi Transport Syndicate Limited and auction-purchaser, which suit was dismissed on 8-12-1972. It is also alleged in the plaint that during the pendency of the above suit, the present defendants entered into fresh agreement with the M/s. Karachi Transport Syndicate Ltd. Agreeing to purchase the plot in question for a sum of Rs,15,03,000 and sought a compromise in the suit on those basis but since the auction purchaser did not agree the said proposed compromise failed and the suit was ultimately dismissed. The parties exchanged correspondence and it is alleged that since the deceased had committed breach of contract, the plaintiffs were entitled to claim the suit amount as they had suffered losses and damages amounting to Rs,15,00,000. The plaintiffs claim that cause of action arose to them on 20th July, 1970 when the defendants resiled from the said agreement and failed to pay the liabilities of the Syndicate amounting to Rs,3,96,329.48.
10. ' The defendant deceased Abdul Majeed Bawany filed his written statement denying the assertions made by the plaintiff. He denied that the letter -dated 29-9-1968 was received by him. He also denied that any feasibility report was prepared by the plaintiff or the same was submitted to the defendant. The case of the defendant, however, is that he had agreed to finance the said project subject to terms and conditions as laid down in agreement dated 22-11-1968 executed between the plaintiff and the defendant, which has been reproduced on record as Ext.5/2. It is further the case of the defendant that he had paid the sum of Rs,21,000 required to be paid at the time of execution of the agreement and he had furnished the bank guarantee to the Syndicate for Rs,4,50,000 as per the terms and conditions of the agreement. The case of the denfendant further is that he was to set-off the outstanding liabilities of the Syndicate after the Syndicate would enter into an equitable mortgage with the answering defendant which the Syndicate failed to do. He has further submitted that the defendant would be liable only in case the suit plot was conveyed to the plaintiff by the Syndicate which was not done and even the Suit No,173 of 1969 filed by the present parties for specific performance against the Syndicate and the auction-purchaser was dismissed.
11. In this suit, it was held by this Court that the very agreement entered into by the Syndicate with the present plaintiff was void and could not be enforced. The case of the defendant is that in view of above facts, he was not liable to the damages as claimed and that breach of contract was not committed by him in these circumstances. The defendant has further claimed that the plaintiffs have failed to prove the damages as claimed by him. During the pendency of the suit, the defendant Abdul Majeed Bawany expired and his legal representatives, the present three defendants were joined in the suit. The following issues were framed;
(1) Whether the plaintiff approached the defendant for financing the proposed building construction project on plot feasibility report?
(2) Whether the defendant agreed to finance the proposed building project of plaintiff on Plot No,769 G.R.F. On the condition that the plaintiff should first transfer his rights in the land in favour of defendant?
(3) Whether the defendant agreed to acquire the plot of land bearing No,769 G.R.F., from the plaintiff for Rs,14 lacs and also agreed to award the proposed construction work on the plot?
(4) Whether the plaintiff was induced by the defendant to reduce the price of plot from Rs,14 lacs to Rs,10.50 lacs on the assurance of the defendant to award the plaintiff the construction work as mentioned in para. 6 of the plaint?
(5) Whether the defendant committed breach of the terms of agreement dated 16-11-1968 and in consequence thereof the plot was put to auction by Court and purchased by a third party?
(6) Whether the compromise arrived at between the defendant and Karachi ' Transport Syndicate and the rejoinder affidavit filed by the plaintiff during the pendency of Suit No,173 of 1969 was voluntary and with the consent of the plaintiff?
12. Or the plaintiff signed the compromise application and the rejoinder due to fraud and persuasions as alleged in Para 18 of the plaint?
(7) Whether the plaintiffs labour, skill and interest in the proposed projects on Plot No,769 G.R.F. Was lost on account of breach of agreement/ assurance by the defendant?
(8) Whether the plaintiff suffered loss and damages on account of fraud and breach of contract committed by the defendant? If so, to what amount?
(9) What should the decree be?
13. ' The plaintiff examined S. Asharfi Abbassi, owner of the plaintiffs firm, who produced the correspondence and the two agreements. He also produced the plaintiffs deposition in Suit No,173 of 1969 and also the judgment in the said suit and some other documents. The plaintiff thereafter closed their side.
14. ' Mr. Munn. Malik, learned counsel appearing on behalf of present defendant No,1 closed his side without leading any evidence while Mr.S.Ishtiaq Ali, learned counsel appearing for defendants Nos.
15. 2 and 3 stated no instructions. Mr. Iftikharuddin Siddiqi, who was appearing on his behalf made a statement on 27-8-1990 before this Court that he may be permitted to withdraw his Vakalatnama and as such the side of defendants Nos.2 and 3 was closed and he was permitted to take necessary steps for withdrawal of his Vakalatnama under the rules.
16. ' I have heard the submissions of the learned counsel for the parties.
17. ' ISSUES NOS.1 TO 3.--These issues are taken up jointly by Mr. Ismail Merchant, learned counsel for the plaintiff. The learned counsel has submitted that in the first instance the plaintiff has examined himself while defendants did not lead any evidence and, therefore, it should be assumed that the plaintiffs case as per these issues goes unrebutted and his word is to be accepted. He has further submitted that the plaintiff has produced the two agreements entered into by him. The first agreement is dated 16-11-1968 whereby the plaintiff is shown to have entered into an agreement of sale with the Karachi Transport Syndicate for purchase of the said plot for the consideration of Rs,9,00,000 only. The second agreement is dated 22-11-1968 whereby the present plaintiff has agreed to sell the said plot to the present defendants for the consideration of Rs,10,50,000 only. The schedule of payment is mentioned in this agreement, which is stated in the facts above whereby an advance of Rs,21,000 was paid to the plaintiff at the time of signing of the agreement while a bank guarantee of Rs,4,50,000 was to be furnished in favour of the Syndicate which admittedly has been furnished. The other two items amounting to Rs,3,96,329.48 and Rs,1.82,670.52 were to by paid by the present defendant against the setting off the liabilities of the Syndicate and to the vendor respectively. Mr. Ismail Merchant, the learned counsel for the plaintiff has further submitted that it was because of non-payment of the above-said liabilities of the Syndicate that the suit plot was put to auction by this Court in execution of the decrees passed in the suits against the Syndicate.
18. Mr. Ismail Merchant, learned counsel for the plaintiff has vehemently argued that the plaintiff's evidence and plaint has specifically stated that he informed the defendant about the said auction but the defendant instead of clearing the liabilities of the Syndicate assured the plaintiff that he will get the plot by other means. The plaintiff has further submitted that both the plaintiff and the defendant participated in the auction proceedings and gave bid. The bid of plaintiff was upto Rs,7,50,000 while the defendant's bid was upto Rs,10,50,000 but the plot was knocked down in favour of one Ali Jaffar Zaidi for Rs,13,03,000. From this the learned counsel has argued that it was for these reasons that the transaction could not materialise and, therefore, the plaintiff suffered the loss and damage. As against this Mr. Munir Malik the learned counsel for the present defendant No,1 has argued that stand of the plaintiff is self-contradictory. He has referred to the plaint and while reading paragraph 4 of the plaint, he has pointed out that according to the plaintiff, the whole dealings between the parties were based on a letter dated 29-9-1968 allegedly written by the plaintiff to the defendant. The defendant in his written statement has denied the receipt of the said letter. A simple unsigned copy of the said letter has been produced in evidence by the plaintiff as Ext.5/1. This letter in the first instance is only an unsigned copy. This letter does not make any mention of the plot in suit. Neither it gives the number of the plot nor it mentions the area of the plot but it only shows that his letter pertains to lease renewal at the rate of Rs,3.40 per sq. Yd. And not Rs,10 as presumed by the plaintiff. There is no evidence corroborating the oral version of the plaintiff to prove the delivery of this letter to the defendant. As regards the feasibility report, the learned counsel for the defendant has submitted that it is only the oral version of the plaintiff, which is not supported by any documentary evidence. It may be material to point out that the plaintiff in his cross-examination submitted that he had taken about 4/5 days to prepare the fesibility report as the maps and sketch were already prepared by him and the same were drawn by the plaintiff himself. The plaintiff further in his cross-examination has stated that the feasibility report alongwith maps and sketches was not with him as the same had been produced in Suit No,173 of 1969 and also that he did not have any copy of the same. The plaintiff has not summoned the said report from the record in Suit No,173 of 1969 to substantiate his claim. However, the documents on record being agreements of sale entered into between the plaintiff and defendant Abdul Majeed Bawany Ext.5/2 stands admitted. However, in the said agreement in paragraph 2 it is shown that "vendee has agreed to purchase the said plot with all structures thereon and building material lying at the site for a total consideration of Rs,10,50,000 only, which has been further agreed to be paid and/or adjusted as under." From this I am inclined to hold that the defendant had agreed to purchase the said plot alongwith the construction thereon and building material lying at the site for the sum of Rs,10,50,000 only and not for the sum of Rs,14,00,000 as claimed by the plaintiff. This agreement of sale is, however, subject to the conditions mentioned in the agreement itself. Except for oral word of the plaintiff, there is nothing on record to show that the defendant had agreed to purchase the suit plot for the sum of Rs,14,00,000. In view of the provisions of Article 103 of Qanun-e-Shahadat, no oral evidence can be considered as against the documentary evidence on record, which in this case is agreement Ext.5/2. The above issues, therefore, stand answered to the effect that the defendant had agreed to purchase the suit plot for a sum of Rs,10,50,000 subject to terms and conditions as mentioned in the agreement itself.
19. ' ISSUE NO.4.--Mr. Ismail Merchant, learned counsel for the plaintiff has argued that the price was originally agreed to be Rs,14,00,000 which were to be paid by the defendant to the plaintiff but the same was subsequently reduced to Rs,10,50,000 on the assurance of defendant to award the plaintiff other construction work pertaining to four different projects. The learned counsel has submitted that in view of expected profit from those other projects, the plaintiff reduced the sale price of the suit plot from Rs,14,00,000 to Rs,10,50,000. The learned counsel has submitted that the plaintiff in his evidence on oath has made such statement while as against this, there is no evidence in rebuttal led by the defendants and, therefore, this issue should by answered in favour of the plaintiff. I have gone through the record and find that except for the oral word of the plaintiff, there is no other evidence to support his said contention. As against this, there is documentary evidence in the shape of agreement of sale (Ext.5/2) which shows that the defendant had agreed to purchase this plot only for Rs,10,50,000. The agreement does not make mention of any other project being awarded to the plaintiff. In these circumstances and in view of the findings on Issues Nos. I to 3, this issue is answered in negative.
20. ' ISSUE NO.5.--This is a most important issue in the suit. The learned counsel for the plaintiff has submitted that because the defendant failed to set off the liabilities of the Karachi Transport Syndicate amounting to Rs,3,96,329.48, therefore, the suit plot was put to auction by the Court and thus the plaintiff had to suffer the loss and damages. The learned counsel for the plaintiff has submitted that there is oral evidence of the plaintiff on this point and there being no evidence in rebuttal, the breach of contract stands admitted specially when the agreement Ext.5/2 is admitted.
21. Mr. Munir Malik, the learned counsel for the defendant No,1 repelling the above contentions of the plaintiff has submitted that in first instance, this agreement is based on a previous -agreement dated 16-11-1968 whereby the Syndicate had agreed to sell the suit plot to the plaintiff and that the said previous agreement is a void agreement, which could not be enforced in law and thus the subsequent agreement being consequent on the previous agreement also fails. The learned counsel for the defendant No,1 has further submitted that even if this agreenient Ext.5/2 be treated as valid agreement, then also it is not the present defendants, who have committed the breach of contract but it is the Syndicate, who is responsible for the breach and consequently the present plaintiff. He has further submitted that the present plaintiff never conveyed the suit plot to the defendants by a validly executed and registered sale-deed obviously for the reasons that the same was not sold to the plaintiff by the Syndicate nor could they do so. I have considered the submissions of the learned counsel on this point. It may be observed that para. 6 of the agreement (Ext.5/2) lays down as under:-- "That the property is at present under the attachment of Karachi Municipal Corporation, Esso Standard Inc; Karachi National Bank of Pakistan. The Syndicate has assigned the said liabilities to the vendor in the sum of Rs,3,96,329.48 only. The vendor clearly agrees that the said liabilities will be settled by the vendee on behalf of the Vendor/Syndicate for whatsoever amount they are able, but in any case the vendee shall be intitled to get the adjustment and/or re-imbursement to the aforesaid amount of Rs,3,96,329.48 together with all expenses such as Lawyers fee etc. Incurred by the Vendee or his Nominee for getting the attachments lifted. The vendee shall, however, take upon itself the liability of paying off the amounts of the said decrees and/or attachments, as aforesaid, upon the Syndicate's executing an agreement of equitable mortgage being the deposit of the title deeds of the said property in favour of the Vendee. It is, however, expressly agreed that the Vendee shall not be responsible for any other sum, except as mentioned in the Schedule of liabilities attached with this agreement, and if there is any other liability the same will be cleared by the Syndicate."
22. From the above condition, it is clear that this amount of liability of the Syndicate was to be paid by the defendant upon the condition that the Syndicate will execute an agreement of equitable mortgage being the deposit of title deeds of the said property in favour of the defendant. There is nothing on the record to show that the Syndicate executed such agreement of equitable mortgage or that they were willing or prepared to do so. In these circumstances, breach of contract, if any, cannot be attributed to the defendant. It may also be observed that it is an admitted position that the plot in suit was under attachment in the decrees passed by this Court for the liabilities against the Syndicate and in such circumstances any private transfer or delivery of such property shall be void as provided in section 64 of Civil Procedure Code, which reads as under:-- "64. Private alienation of property after attachment to be void.-Where an attachment has been made, any private transfer or delivery of the property attached or of any interest therein and any payment to the judgment-debtor of any debt, dividend or other monies contrary to such attachment, shall be void as against all claims enforceable under the attachment.
23. ' Explanation.---For the purposes of this section claims enforceable under an attachment include claims for the rateable distribution of assets."
24. ' The plaintiff has also produced the certified copy of the judgment in Suit No,173 of 1969 as Ext.5/7.
25. This suit was filed by the present plaintiff and the deceased defendant Abdul Majeed Bawany, the ancestor of the present defendants against Karachi Transport Syndicate and auction purchaser Ali Jaffer Zaidi for the specific performance of the agreement executed by the Syndicate in favour of the present plaintiff on 16-11-1968. This suit was dismissed by Noorul Arfin, J. (as he then was) vide judgment passed on 9-12-1972. In this suit an alternate relief of damages was also claimed, which was also declined. In the said suit, issues Nos.3 and 4 read as under:- "(3) Whether the agreement of sale in view of winding up petition No,J.M.33 of 1967 is void?
(4) Whether the agreement of sale is not binding on defendant No,1 without the approval of its general body?"
26. ' The finding on issue No,3 is given at page 26 of the certified copy of judgment (Ext.5/7) which reads as under:-- "I take this view, because the prohibition under section 64 C.P.C. Is against the private transfers or deliveries of the property. In the instant case, there is no question of delivery of property or of creation of any interest therein. Under section 54 of the Transfer of Property Act, it has been noted, a mere contract for sale of land does not create any interest in or charge on the property. Ext.5/3 contains a mere promise by the defendant to sell the disputed land to the plaintiffs for the price and on the conditions specified therein. The word "transfer" in section 64 C.P.C. Applied to contracts which pass real rights in property from one person to another. Reference in this connection may be made to Gopal Pandey v. Parsotam Das (1883) 5 All. 121 and Mata Din Kasodhan v. Kazim Hussain (1891) 13 All.
432. Ext.5/3 being merely an agreement to sell the land in future does not create any interest in the said land in favour of the plaintiff No,1, and therefore, no real rights passed under this agreement from the defendant No,1 to the plaintiff No,1. Thus, neither section 227(2) of the Companies Act, 1913, nor section 64, C.P.C. Have any application to the agreement, Ext.5/3. Therefore, the finding on Issue No,3 is against the defendants."
27. ' While dealing with issue No,4, it has been observed as under:- "This being the legal position, the agreement Ext.5/3 cannot be said to be binding on the defendant No,1 or even defendant No,2. As a matter of fact, this agreement cannot be said to have brought about any contractual relationship between the plaintiff No,1 on the one hand and the defendant No,1 on the other, in that the agreement purports to have been executed on behalf of the defendant No,1, by the operative director, Khawaja Muzafarul Haq, whose authority and competence to enter into such agreement has not been established. In the absence of approval by the general body of defendant No,1's share-holders, these defendants cannot be said to be party to the agreement, Ext.5/3 at all. Same legal position would prevail with regard to the arrangement contained in the application under Order 23, Rule 3, C.P.C. This arrangement, to be treated as a binding agreement, also required approval of the general body of the defendant No,1's share-holders by reason of the provisions of section 86-H of the Companies Act, 1913. Thus, neither the agreement Ext.5/3 nor the arrangement contained in the application under Order 23, Rule 3, C.P.C. Can be treated as contracts binding on the defendant No,1 or even on defendant No,2. Thus, Issue No,4 is decided according to this conclusion."
28. In view of the above judgment and the facts discussed above, it is obvious that the said agreement of sale executed by the Karachi Transport Syndicate in favour of the plaintiff itself is a void agreement which could not have been executed by the Syndicate in favour of the present plaintiff.
29. Consequently, the subsequent agreement of sale (Ext.5/2) entered into by the present plaintiff in favour of the present defendants also is void and cannot be enforced. The basis of this second agreement or the contract between the parties, if any, is based on the said earlier agreement and is like a superstructure based thereon. If the very basis of the claim is held to be void then all the superstructure built on that also falls to the ground. Reliance may be placed on the case of Yousuf Ali v. Muhammad Aslam Zia and 2 others PLD 1958 SC 104 wherein their Lordships held as under:-- "And if on the basis of a void order subsequent orders have been passed either by the same authority or by other authority, the whole series of such orders, together with the superstructure of rights and obligations built upon them, must, unless some statute or principle of law recognising as legal the changed position of the parties is in operation, fall to the ground because such orders have as little legal foundation as the void order on which they are founded."
30. ' In view of above discussion, this issue is answered in negative.
31. ' ISSUE NO.6:---This issue is not pressed by the parties as admittedly the said compromise was not consented to by the auction-purchaser and also for the reasons that in the earlier Suit No,173 of 1969 it has been held by this Court that Karachi Transport Syndicate could not have entered into any such compromise without prior approval of their governing body.
32. ' ISSUES NOS.7 and 8.---The plaintiff has claimed his damages showing that the project in suit was worth about Rs,1,11,00,000 on which he would have earned a profit at the rate of 10% amounting to Rs,11,10,000 only. He has further claimed an amount of Rs,4,00,000 being the difference of the price of the plot. As per the plaintiff, he had agreed to purchase the said plot from the Syndicate for a sum of Rs,9,00,000 whereas the same was sold to the auction-purchaser for the amount of Rs,13,00,000. Thus, this difference to be at Rs,4,00,000 plus Rs,11,10,000 which would have been the profit earned by him brings the total of his loss to Rs,15,1b,000. After deducting the payment received by the plaintiff, he has filed the present suit for the sum of Rs,14,51,000 as the losses and damages sustained by him. Mr. Munir Malik, learned counsel for the defendant No,1 has vehemently opposed the above claim of the plaintiff and has submitted that this is only an oral version of the plaintiff. A perusal of the plaintiff's evidence and the documents produced by him would show that nothing has been brought on record to give the particulars of project amounting to Rs,1,11,00,000 as claimed by the plaintiff. He has not produced any feasibility report or site plans, project estimates, details of various shops, cinema, petrol pump etc proposed to be raised on the plot in suit from where it could be ascertained as to how much could be the cost of the project and consequently the expected profit thereon. The plaintiff has also failed to produce any evidence on record to show that he had agreed to sell the said plot to the defendant for a sum of Rs,14,00,000 as claimed by him orally in his evidence and in his plaint. On the contrary the agreement Ext.5/2 shows that the sale price of the suit plot was agreed to be Rs,10,50,000. The burden is heavy on the plaintiff to prove the damages sustained by him through evidence and all the particulars of the damages have also to be proved by him. Mere general or vague oral assertions in this respect cannot be sufficient to discharge the onus caused on the plaintiff. Moreover, it is also required of the plaintiff to prove the damages as occurring to him on the date the breach of contract is alleged to have been committed. In the case of Nawar Ali Khan v. Abdul Sattar Abu Bakar PLD 1968 Karachi 154, Noorul Arlin, J. (as he then was) had not awarded the damages to the plaintiff for the reasons that plaintiff had failed to adduce evidence to enable the Court to make assessment of damages. In another case of Adam Ltd. v. Muhammadi Steamship Company Limited PLD 1962 Karachi 227, Qadeeruddin Ahmed, J. (as he then was) had observed that burden lies on the plaintiff to prove his losses in a suit for damages and that non-production of record and evidence proving such loss would weigh against the plaintiff and not against the defendant. In view of above discussion, these issues stand answered against the plaintiff as no evidence has been brought on record from where the loss or damages suffered by the plaintiff can be assessed.
33. ' ISSUE NO.9:---In view of the findings on above issues, the present suit is dismissed with no order as to costs.