' ABDUL SHAKURUL SALAM, J.---This appeal arises in the following circumstances:
1. Respondent agreed with the two appellants that she shall sell her Bungalow No,10 situated at Zafar Ali Road, Sialkot Cantonment for a sum of Rs,3,00,000. She received through cheque a sum of Rs,30,000. She executed an agreement Exh.P.W.1/1 that on receipt of no-objection certificate, within a month she shall execute a registered sale-deed and receive balance of Rs,2,70,000 before the Registrar. If she were not to do so the appellants shall be entitled instead of Rs,30,000 to Rs,60,000 from her. This is dated 11-9-1976. She applied through numerous letters to the Military Authorities for issuance of a no-objection certificate. It was not issued. The appellant No,2 on 14-3-1978 executed an agreement Exh.D.W.2/1 saying that if by 14-6-1978 no-objection certificate is not issued in favour of the respondent, he shall withdraw from the sale agreement and would be entitled to refund of Rs,30,000 from the respondent. On 14-10-1976 the respondent was informed by Station Headquarters, Sialkot Cantt. That "the subject site has been earmarked for army construction in the town planning of this Cantt, therefore, we regret that No-Objection Certificate cannot be issued by this Headquarter." The respondent again represented. But the General Headquarters O.M.G's. Branch (Otg Dt.) vide letter dated 7-4-1977 informed the respondent that "it is regretted that permission to the sale of above-mentioned bungalow cannot be granted till final decision by Government". It was followed by the letter dated 17th August, 1978 that "it is regretted your request for permission to the sale of the abovementioned bungalow cannot ' be granted". One year thereafter on 9-9-1979 the appellants filed a suit for specific performance of the contract. It was decreed by the learned Senior Civil Judge, Sialkot vide judgment and decree dated 4-7-1984. The respondent filed an appeal in the Lahore High Court bearing R.F.A. No, 135/84. A learned Division Bench after reappraising the evidence recorded the finding that "it is proved that no-objection certificate was refused by the Army Authorities". It was observed that "the question, therefore, arises as to whether agreement could be performed even without the same." The learned Judges held that "the agreement Exh.P.W.1/1 makes it clear that the obtaining of a no-objection certificate was a condition precedent for performance of agreement. The said conditin was accepted by both the parties through this agreement because they knew that such a no-objection certificate was required. Therefore, now the respondents cannot say that no no-objection certificate was required.
Similarly, the making of applications by the appellant for issuance of no-objection certificate and the refusal of the Military Authorities to grant the same also shows that such a no-objection certificate was required. As no such no-objection certificate could be issued the agreement there and then became incapable of specific performance. Again, Muhammad Bashir respondent No,2 gave an undertaking on 14-3-1978 that if no no-objection certificate was obtained by the appellant up to 146-1978 he will withdraw from the bargain/agreement and will be entitled only to the earnest money amounting to Rs,30,000. This undertaking Exh.D.W.2/1 was admitted by respondent No,2 as D.W.2. This undertaking suffices to prove that the agreement stood rescinded en 14-6-1978. Even if it is taken that the name was to the extent of the rights of respondent No,2 that will make no difference because the appellant could perform the contract only if the same was to be performed by both the respondents and as a whole and not otherwise. Therefore, specific performance of agreement Exh.P.W.1/1 could not be allowed." The learned Judges further held "that the condition in the agreement Exh.P.W.1/1 that in case the agreement could not be specifically performed the appellant would pay Rs,60,000 (double the amount of earnest money) to the respondents. The said undertaking Exh.D.W.2/1 also makes it clear that the appellant had undertaken to do so because through the said undertaking it was agreed that a sum of Rs,30,000 and not Rs,15,000 will be paid to Muhammad Bashir respondent No,2. This amount was only for respondent No,2 and naturally respondent No,1 is also entitled to the same amount for failure of the agreement". Finally, the learned Judges allowed the appeal of the respondent and the suit of the plaintiffs/appellants for specific performance of contract dated 11-9-1976 was dismissed. However, a decree for recovery of Rs,60,000 was passed in favour of the appellants (Rs,30,000 each). This is vide judgment and decree dated 20-3-1988. Hence, this appeal.
2. Learned counsel for the appellants at the outset pointed out that no- objection certificate has been issued by the Military Authorities on 4-9-1984 i.e, to say before the judgment under appeal was delivered by the High Court on 20-3-1988. Subsequent event can be taken into account and therefore, the objection regarding no-objection certificate has disappeared, hence the appellants are entitled to a decree for specific performance. Learned counsel appearing for the respondent submitted that the non-objection certificate dated 4-9-1984 was issued in view of the decree of the trial Court dated 4-7-1984. Nevertheless it is of no effect because the agreement dated 11-9- 1976 had come to an end with the refusal of the Military Authorities to issue no-objection certificate finally on 17-8-1978 and the appellant No,2 had already agreed on 14-3-1978 that if no-objection certificate was not issued up to 14-6-1978 he will withdraw from the bargain.
3. Learned counsel for the appellants has further vehemently contended that firstly there was no requirement of obtaining a no-objection certificate from the Military Authorities. He relied on "Mst.
Bhaghan and 2 others v. Sh, Muhammad Latif and 2 others" (PLD 1981 Lahore 146). Secondly he submitted that now during the pendency of appeal in the High Court no-objection certificate was issued by the Military Authorities. Therefore, the hurdle has disappeared. He also submitted that the clause in the agreement that for non-performance of the contract the respondent shall pay Rs,60,000 is no hurdle to a decree for specific performance. He relied upon "Abdul Karim v.
Muhammad Shafi and another" (1973 SCMR 225).
4. We have heard the learned counsel for the parties at length and perused the record with their assistance. The precise question is whether the agreement dated 11-9-1976 was intact at the time of the institution of suit on 9-9-1979 or it has been furstrated for non-issuance of no-objection certificate. Admitted facts are that in the agreement dated 11-9-1976 it was agreed to by the parties that no-objection certificate was to be obtained. While the respondent was trying to obtain no-objection certificate, appellant No,2 probably got fed up with the delay and entered into an agreement on 14-3-1978 saying that if no-objection certificate was not issued in favour of the respondent by 14-6-1978, he would withdraw from the bargain. The bargain was in favour of both the appellants. One of them having withdrawn, the bargain fell through. More importantly, the Military Authorities refused to issue no-objection certificate on 14-10-1976 and finally on 17-8-1978.
The property fell within the area of a Cantonment. No objection certificate agreed to by the parties to be obtained was apparently necessary because in Cantonment areas where the Military personnel are stationed and their ammunitions stocked, unverified, persons cannot be allowed to come in by purchase. Enemy spies can otherwise come to live, gather information, pass it on, inform about movement of troops and ammunition, at worst blow up. The single Judge Bench judgment of the High Court relied upon by the learned counsel for the appellants does not dispense with no objection certificate. Besides the agreement of the appellant No,2 himself dated 14-3-1978, with the refusal of the Military Authorities to issue no-objection certificate finally on 17-8- 1978, the contract had frustrated and come to an end. There being nothing, no specific performance of anything could be decreed. The contention of the learned counsel for the appellant that the subsequent issuance of no-objection certificate will entitle the appellants to a decree for specific performance loses sight of the fact that the subsequent issuance of no- objection certificate on 4-9-1984 cannot revive or resurrect that what had come to an end by agreement of the parties and operation of law long time go at the latest by 17-8-1978. The authority issuing the no-objection certificate subsequently was by no mean a Messiah to give life to dead. In view of all the circumstances of the case, we do not think there is any justification for this Court to interfere in the findings of fact recorded by the highest Court of the Province. Therefore, we dismiss this appeal but leave the parties to bear their own costs.
' RUSTAM S. SIDHWA, J.---I have read the judgment of my learned brother Abdul Shakurul Salam, J.
Since I wish to express myself in some detail, I do so herewith.
2. The main question that arises in the instant case is whether the condition in the agreement for sale dated 11-9-1976 calling upon the vendor to secure the No-objection Certificate from the Military Authorities was a condition precedent or a condition subsequent.
3. Prof. Dr. M.A. Mannan in "The Contract Act, 1872" 1988 Edition, mentions at page 335:- "A distinction is drawn in law between a condition precedent and a condition subsequent. Where a certain act has to be performed or a certain event has to happen before the contract obligation can be fixed, this act or event is a condition precedent. Where , on the other hand, a valid contract is formed in the first instance, but it is stipulated that the contract shall be annulled if a certain act be not performed or a certain event does not happen, that is a condition subsequent, the non- fulfilment of which discharges the contract."
4. G.H. Treitel in "The Law of Contract", 5th Edition, at page 46 has the following to say about conditional agreements:- "An agreement is said to be conditional if its operation depends on the occurrence of an event which is not certain to occur (other than the performance by one party of any of his undertakings).
It is subject to a condition subsequent if it provides for its determination on the occurrence of the event. Where the condition is subsequent, there is a binding agreement until the event occurs.
Where the condition is precedent, the agreement is not fully binding until the event occurs; nor does either party undertake that it will occur. But an agreement subject to a condition precedent may impose some degree of obligation on the parties or on one of them. Whether it has this effect, and if so what degree of obligation is imposed, depends on the true construction of the condition."
5. G.H.L. Fridman in "The Law of Contract in Canada", 1976 Edition, at page 272, whilst referring to conditions precedent and conditions subsequent states that prior to the English Sale of Goods Act, 1893 the express condition was implied by the Courts to refer to a term in a contract by virtue of which the contract could be postponed, so far as its taking effect was concerned, unless and until a certain event or occurrence took place, or could be rendered invalid and non-binding ab initio, if a certain event or occurrence happened. The former types of conditions were called conditions precedent, the latter conditions subsequent. An alternative form of language was to refer to the former class of conditions as suspensive (because they acted to suspend the potential operation of the contract) and the latter resolutive (because they acted to resolve or render a contract effective that had already become operative). The learned author states it pages 275 and 276:- "The two issues are not entirely unconnected. For the obligations placed on a party or on the parties, and the effects of the non-fulfilment of the obligation or obligations, depend in the first instance upon whether what is involved is what has been called 'a true condition precedent--an external condition upon which the existence of the obligation depends', or is a condition in another sense, an ordinary or internal condition in effect a condition in the sense in which that term has become understood since the newer usages of the Sale of Goods Act. If the condition is a true condition precedent, there is no contract until it is satisfied. If the condition is the other sort of condition, then, in event of its non-fulfilment; there may still be a binding contract upon the parties, depending upon the way in which the innocent party reacts to the breach of condition. A series of Canadian cases makes this difference very clear, even though the actual determination of the true character of the condition that is under consideration in any given instance may not always be simple and straightforward.
' The distinction seems to lie in the fact that if, on its true construction, term is a condition precedent, its performance cannot normally be waived unilaterally by either party. It goes to the root of the contract, and the only way that its fulfilment can be dispensed with so as to leave the contract intact and valid is if the parties make a new or further agreement, either varying the original contract by omitting or bilaterally waiving the condition precedent, or rescinding the original agreement and replacing it with a new one, from which the condition precedent of the first contract is lacking. If the condition in question is one which is not a condition precedent to the coming into effect of a binding contract, then, either such condition may be waived by both parties agreeing together in the manner just stated, or it may be waived unilaterally, as long as such waiver is by the party in whose favour the condition was inserted into the contract. In other words, if a condition is for the mutual benefit of all the parties it is not susceptible of unilateral waiver. Thus a term may be a condition precedent or an ordinary condition; if the latter, if may be for the benefit of both parties or for the benefit of only one. Conditions precedent and mutually beneficial ordinary conditions may not be waived unilaterally. All others may. It. Is a question of law as to the exact status of a condition, whether or not it is a condition precedent, or whether it is only for the benefit of one party. And the onus of proving that it is in the latter category is on the party asserting that such is the true legal character of the term in question."
6. The agreement for sale' dated 11-9-1976' inter alia recited that "the vendor hereby expresses in writing and agrees that within a month from the securing of the No-objection Certificate, she shall execute and cause to be registered the sale-deed in question". No exact date or time limit was fixed for the execution and registration of the sale-deed.
7. From the resume of the law as above stated, .It is clear that the said condition in the agreement for sale that the vendor would secure the No-objection Certificate from the Military authorities was not a condition precedent to the said agreement, but rather a condition subsequent. The condition did not go to the root of the agreement to nullify it. It was an internal condition not affecting the agreement. The condition had the effect of releasing the vendees from their obligation to accept the sale-deed if the No-objection Certificate was not obtained by the vendor and thus annulling the agreement for sale.
8. The next question that arises is upto what date the No-objection Certificate had to be obtained by the vendor and whether the condition subsequent was mutually waived at any stage by both the parties or by the vendees, they being the party in whose favour the condition was inserted into the contract. The agreement for sale does not refer to any time limit by which the condition subsequent was to be performed. In the absence of such a provision in the agreement, a reasonable time would have to be allowed, depending upon the facts and circumstances of this case. Since the sale-deed had to be executed within a month of the receipt of the No-objection Certificate, the element of urgency is apparent and I would assume that a period of six months was more than reasonable time for securing the certificate. However, I need not go into this matter, for the vendor herself kept applying for the No Objection Certificate right uptil 1-1-1978, whereafter on 14-3-1978 one of the vendees, namely, Muhammad Bashir himself executed a memorandum Exh.
D.W.2/1 in her favour agreeing to the condition that if by 14-6-1978 a No-objection Certificate in her favour relative to the bungalow in dispute was not issued by the relevant department, he would give up his rights to the agreement for sale and would receive back the earnest money of Rs,30,000 from her. I would therefore hold that by the act of the parties, the reasonable time requisite for obtaining the No Objection Certificate was extended upto 14-6-1978 and it cannot be taken any further. As regards the question whether the condition subsequent was waived by both the parties mutually or by the vendees, they being the parties in whose favour the C condition was inserted, the documents exhibited by both the parties show that it was not so waived. The last notice Exh.
P.W.2/3 sent on behalf of the vendees on 3-7-1978 to the vendor refers to the need of such a No- objection Certificate. Reasonable time having expired on 14-6-1978 much before the issue of this notice, no waiver took place before the agreement became impossible of performance.
9. The case of the vendees is that memorandum Exh. D.W.2/1 was only signed by one of the two vendees and is therefore, not binding on them and that, in the even if it be treated as binding on them, then under the said agreement the vendor had to furnish to them an application duly signed by her and addressed to the Station Commandant requesting for the No-objection Certificate, for without such an application it was not possible for them to secure such a certificate. Both these submissions have no weight. The fact that one of the vendees signed the memorandum, is sufficient to bind him and if it bound him, he had the right to withdraw the whole of the earnest money and if he did that, the case of the other vendee was not severable and the contract being joint qua the vendees, the transaction as a whole would fall. It cannot be doubted that Muhammad Bashir, vendee, who executed the memorandum was the main person who had earlier extended the time period by supplementary agreement Ex P.1 dated 7-7-1977 and on whose instructions legal notices Exhs. P.W.2/1, P.W.2/2 and P.W.2/3 were issued to the vendor and being the king pin behind the show, he cannot be allowed to say that he was not acting for his co-vendee but only for himself. But even assuming for a matter of argument that the memorandum Exh. D.W.2/1 was not binding on both the vendees, reasonable time for the vendor to fulfil the condition subsequent having run out, the agreement for sale stood frustrated. As regards the second submission, the memorandum Exh. D.W.2/1 did not postulate that the vendees would apply for the No-objection Certificate on behalf of the vendor. In these circumstances, the vendor was not obliged to furnish to the vendees any application addressed to the Military Authorities requesting for a No-objection Certificate. However, it appears that on a notice Exh. P.W.2/3 issued on behalf of the vendee Muhammad Bashir to the vendor on 3-7-1978 that she should sign and furnish such an application to the vendees, so that they may pursue the case on her behalf, the vendor on 1-8-1978 by letter Exh. D.W.1/2 herself again applied to the Military Authorities for a No-objection Certificate, to which she got a negative reply Exh. D.W.1/5 (Exh. D.9) on 17-8-1978 from the Quartermaster General. As stated earlier, the vendor was not obliged to furnish such an application to the vendees. The fact that she pursued the matter herself on 1-8-1978 even though time had run out under Muhammad .Bashir's memorandum Exh. D.W.2/1, only shows her good gesture to assist the vendees, but then when the Quartermaster General finally refused to issue the certificate on 17-8-1978, the matter could not, be kept indefinitely open for the benefit of the vendees and the vendor's good gesture cannot be taken to defeat the true intent of memorandum Exh. D.W.2/1, which closed the matter for the vendees. I would therefore, hold that on 14-6-1978 the agreement stood frustrated by the non- availability of the No-objection Certificate and by one of the two joint vendees having given up his rights in the agreement for sale
10. The only matter that remains is the effect of the letter of General Headquarters, Rawalpindi, to the Station Headquarters, Sialkot, dated 10-10-1986 stating that the former had no objection to the mutation of the disputed bunglow being made in favour of the vendees. This was received during the pendency of the vendor's appeal in the High Court. Since the vendor had on 30-10-1986 intimated to the Station Headquarters, Sialkot, that the High Court had stayed the Civil Judge's decree, the said office did not act further on the letter. It is not clear whether the General Headquarters' order was communicated to the vendor, but it is the vendees' case that it was not communicated to them. Very likely it was not communicated to either and no vested right therefore accrues to either party out of the said letter which was an internal communication between two departments of the military wing. Be that as it may, since reasonable time had already expired and one of the vendees by his memorandum Exh. D.W.2/1 had put an end to the agreement for sale, which also affected the other vendee who was jointly bound, the agreement stood frustrated much before the issue of the General Headquarters' letter and therefore, the said letter does not advance the case of the vendees.
11. Agreeing with my learned brother, I would hold that this appeal be dismissed.