1. ' By this suit the plaintiffs seek specific performance of the Agreement dated 29-7-85 whereby the defendant had agreed to sell to the plaintiffs the plot bearing No,157-S, measuring 1,000 sq. Yds. In Block 2 of PECHS, Karachi, together with construction thereon.
2. ' Brief facts of the case are that the plaintiffs and the defendant entered into the aforesaid agreement for the sale of the defendant's aforementioned property on the terms contained in the said agreement for a total consideration of Rs,46 lacs out of which a sum of Rs,6 lacs was paid by the plaintiffs to the defendant at the time of execution of the agreement and the balance was to be paid on execution of the sale-deed by the defendant. The time, under the agreement, for the completion of the sale, was 12 months from the date of the agreement. On 9-8-86 the plaintiff No,1 sent a letter to the defendant requesting for completion of the sale. However, it appears that no action for the finalisation of the sale was taken by either party and by its letter dated 29-12-86 addressed to the plaintiffs the defendant informed them that he was no longer obliged under the agreement which had come to an end, as the plaintiffs, in spite of lapse of 17 months, had failed to take any step for the finalisation of the sale. This followed by correspondence between the advocates of the parties ending with plaintiffs' counsel letter dated 7-2-87 whereby the plaintiffs threatened to take legal action against the defendant. Thirteen months thereafter, the present suit was filed for specific performance. Defendant contested the suit and filed his written statement.
3. Following consent issues were farmed:
(1) Whether the plaintiffs or the defendant committed breach of the contract?
(2) Whether the time stipulated under the agreement was not the essence of the contract?
(3) Relief.
4. ' With regard to issue No,1 the contention of Mr. Tufail H. Ebrahim the learned counsel of the plaintiffs was that in spite of repeated requests of the plaintiffs the defendant failed to take any step for discharging his obligations under the agreement, para. 4 whereof provided that the defendant had to make out a marketable valid and subsisting title to the property free from all encumberances, para. 5 required the defendant to produce original documents for the scrutiny of the plaintiffs'
5. Advocate, under para. 6 the defendant had to obtain Capital Gains Tax Clearance Certificate and under para. 7 the defendant had to obtain permission from Ministry of Works, Government of Pakistan, Islamabad, through the PECHS for the sale and transfer of the property to the plaintiffs. It was stated that none of these obligations were fulfilled by the defendant and ultimately the plaintiff No,1 by his letter dated 9-8-86, which is Exh.P.11 requested the defendant to hand over all necessary papers of the property and arrange some convenient time before 16th August, 1986, for inspection of the original documents by the plaintiffs' Advocate but no reply to this letter was given by the defendant and therefore the said plaintiff by Exh.P.12, which is his advocate's letter dated 31- 12-86 again asked the defendant to produce the relevant documents and to complete the sale within 15 days. However, instead of complying with the requirement the defendant by his letter dated 29-12-86 (Exh.P.13) terminated the contract. Similarly, he stated that, neither Capital Gains Tax was paid nor permission for transfer was obtained by the plaintiffs from the Ministry of Works.
6. As regards Capital Gains Tax, the counsel conceded that it was abolished in June, 1986 but submitted that the defendant had no advance knowledge of the abolition and therefore, if he was serious in the deal the tax would have been paid before its abolition, for, in the ordinary course it ought to have been paid within the 12 months period under the agreement which was to expire in July, 1986. In so far as the permission for transfer from Ministry of Works was concerned, it was submitted that admittedly the plaintiffs had not even applied for such permission. It was further submitted that under the agreement vacant possession of the property had to be given to the plaintiffs but the property remained occupied by tenants. Reference was made to the cross- examination of the defendant where he stated that, his sister was living on the ground floor while the defendant himself was living in a portion of the first floor and further to his admission that, "It is correct that some goods of Muhammad Sarwar are lying in this garage." This according to the learned counsel showed that the garage too was occupied by a tenant. It was submitted that though the defendant stated in his cross-examination that he got portion of the ground floor and first floor vacated in the end of 1985 or beginning of 1986 but his failure to produce any letter of possession in support of his contention would belie his claim. As against the failure of the defendant to fulfil any of his obligations under the agreement, it was contended, that the plaintiffs had always been ready and willing to pay the balance purchase price in the manner provided under the agreement.
7. ' Mr. Shahanshah Hussain, learned counsel for the defendant, denied the allegations of the plaintiffs' counsel and stated that while the defendant was all along ready and willing to perform the contract it was due to plaintiffs' noncooperation and their avoidance to perform the contract that the sale could not be finalized. He stated that after the execution of the agreement Exh.P.1 the plaintiff visited the office of PECHS and obtained the procedure for transfer of the property which was conveyed to the plaintiff by letter dated 26-11-85 (Exh.D.1). He stated that as would be apparent from Exh.D.1 the formalities listed from Serial No,5 to 10 were to be complied with by the plaintiffs which they failed to do. He submitted that the plaintiffs' denial of the receipt of Exh.D.1 was false, but even if that was assumed to be true the fact was that the plaintiffs were already aware of these formalities as admittedly they had purchased the plot adjacent to the suit property. He contended that no application for transfer could be made without the compliance of the said formalities. In this connection he referred to Exh.D.2 which is a letter dated 5-12-88 from PECHS to the defendant's counsel and to the examination-in chief on D.W.2 Iqbal Ahmed who stated that: "I see Exh.D.2 dated 5-12-88 from the Society addressed to Mr. Shahanshah Hussain, ' Advocate. It bears my signatures. The requirement for transfer of the property as mentioned in this letter are necessary to be complied with. An application for transfer is forwarded by PECHS to the Ministry of Housing and Works only when these requirements are complied with."
8. ' He submitted that out of the requirements listed in D/2 those mentioned at S.No,4 (about photo copies of N.I. Cards of the purchaser), at Serial No,7 (about cutting of newspaper inviting objections through Press), at S.No,8 (about undertaking on Rs,6 stamp paper), at S.No,9 (about payment of transfer fee at the rate of Rs,15 per sq. Yd.), at S.No,10 (about payment of Membership Fee) and at S.No,11 (about payment of Masjid Fund) were wholly to be complied with by the plaintiffs but none of these was complied, as such, there could hardly be any question of making application for transfer. He, therefore, submitted that it was not only the payment of the balance sale consideration that had to be done by the plaintiffs but they had to cooperate with the defendant and take steps right from the beginning for fulfilling their obligations under the agreement. His contention was that the very fact that the first letter sent by the plaintiffs to the defendant was on 9-8-86, after the expiry of 12 months period stipulated under the contract for the finalisation of the sale, would show that the plaintiffs had never been interested in the transaction being finalised. As regards non-payment of Capital Gains Tax it was submitted that the normal practice is to pay this in the last when other things have been finali7r4, but before reaching that stage it had been abolished in June, 1986. In reply to the plaintiffs' objection about the suit property being occupied by the tenants he referred to the examination-in-chief and the cross-examination of defendant where he stated that though at the time of the agreement portion of the suit property was in occupation of tenants the same was got vacated by the defendant on payment of substantial sums to these tenants. The counsel argued that in order to succeed in a suit for specific performance it was incumbent on the plaintiffs not only to show that they had fulfilled all their obligations under the contract but also to show that from the time of agreement they were ready and willing to perform their part of the contract. Reliance was placed on the case of Muhammad Yaqoob v. Muhammad Nasrullah Khan and others reported in PLD 1986 SC 497 where on the basis of alleged oral agreement the purchaser was claiming the price to be only half of that mentioned in the written agreement and was prepared to pay the same. In these circumstances the Supreme Court made the following observation, citing with approval a passage from the case of Narinjan and others v. Muhammad Yunus (AIR 1932 Lah. 265): "8. From the above the only conclusion that can be arrived at is that the appellant has not only failed to prove that he was prepared to perform his part of the contract but in fact did not perform his part of the contract at all and is therefore, not entitled to any relief. Reliance in this respect is placed on Narinjan and others v. Muhammad Yunus wherein it has been held: ' In order to obtain a relief by way of specific performance of a contract the plaintiff has first to allege and prove that he was ever ready and willing to perform his part of the contract from the date of the contract to the date of the suit, as the contract really was and not in the way he thought the contract to be."
9. ' Reference was also made to the cases of Mubarak All v. Tula Khan alias Sanaullah Khan 1985 SCM R 236 and Mst. Khatoon Begum v, Mst. Barkatunnissa Begum PLD 1987 Kar.132. In the first case the Court having found that the purchaser failed to appear before Sub-Registrar for registration of the sale-deed, held that he committed breach of contract and was therefore not entitled to specific performance. It has been observed: "In view of the fading of the learned Judges of the High Court that he, indeed, was guilty of the breach of the contract, with which, finding we are in agreement, no decree of specific performance could be granted to the plaintiff and, accordingly, his suit was rightly dismissed."
10. ' In the other case the relevant observation is as follows: "In a suit for specific performance it is incumbent on the plaintiff not only to set out agreement on the basis of which he sues in all details, he must go further and plead that he has applied to the defendants specifically to perform the agreement pleaded by him but the defendant has not done so. He must further plead that he has been and is still ready and willing to specifically perform his part of the agreement."
11. ' The counsel submitted that not only the plaintiffs failed to discharge any of their obligations under the contract, but it was also apparent from their conduct that they were not interested in the purchase until prices of the property had started rising, long after the expiry of the stipulated time.
12. It was stated that in so far as the title documents were concerned, these had already been produced before the plaintiffs' counsel who had drafted the agreement to sell (Exh.P.1).
13. ' There is no controversy that the suit property was agreed to be sold on the terms contained in Exh.P.1. There is also no scope for doubt that before the execution of the sale-deed permission for transfer had to be obtained from the Ministry of Works, Government of Pakistan, Islamabad, through PECHS and one of the requirements for such permission was payment of transfer fee at the rate of Rs,15 per sq. Yd. In addition to payment of the transfer fee, certain other formalities as mentioned in Exh.D.2 had also to be fulfilled. Iqbal Ahmed, D.W.2, who at the relevant time was working as Administrative Officer of the PECHS has deposed that: "For transfer of any immovable property in PECHS, permission for sale is necessary to be taken from the Ministry of Works. For this purpose an application to the Ministry is made through PECHS Society.
14. For the purpose of transfer of property there are certain necessary requirements.
15. ' I see Exh.D.2 dated 5-12-88 from the Society addressed to Mr. Shahinshah Hussain, Advocate. It bears my' signatures. The requirement fot transfer of property as mentioned in this letter: are necessary to be complied with. An application for transfer is forwarded by PECHS to the Ministry of Housing and Works only when these requirements are complied with."
16. ' The requirements referred to by the witness are mentioned, both, in Exhs.D.1, and D/2. D/1 is a letter dated 26-11-85 purported to have been sent by the defendant to the plaintiffs listing the formalities and documents to be completed and submitted alongwith the application for transfer. The receipt of this letter is denied by the plaintiffs and the defendant having not been able to prove its delivery, it cannot be taken into consideration. However, notwithstanding the non-receipt of Exh.D.1 the plaintiffs ought to have known about the formalities necessary for the grant of permission from the Ministry of Works, as, admittedly the plaintiff No,1 had purchased the plot adjacent to the suit property earlier in 1984. But even if they were not aware of these requirements/obligations, it was incumbent upon them to find out. After all, as is apparent from clauses 7 and 13 of the agreement, it was in their knowledge that permission for the sale and transfer had to be obtained from Ministry of Works as also that transfer fee had to be paid in respect of the property. It is nowhere provided in the agreement (Exh.P.1) that it was the duty of the defendant to inform the plaintiffs of their obligations in connection with the permission for the transfer of the suit property. Had the plaintiffs made enquiries they would have known that out of the 11 requirements listed in Exh.D.2 no less than 6 were to be complied with by them. They, however, failed to fulfil even such basic requirements as, payment of transfer fee, membership of the Society and publication of public notice in newspapers inviting objections to the sale. The plaintiff No,1' in his cross-examination admitted that: "I had not offered to pay the transfer fee to the defendant since he had not demanded its payment."
17. ' Under the agreement the defendant was not required to demand the transfer fee, this was to be paid by the plaintiffs of their own. The fact that the plaintiffs never bothered to fulfil any of their obligations necessary for obtaining the requisite permission for transfer, demonstrates their indifference towards the transaction.
18. ' In the plaint the plaintiffs have stated in para. 18 that: "(18) That the plaintiffs were at all material times ready, willing and able to pay the balance sale consideration amounting to Rs,40,00,000.00 (Rupees forty lacs only). That even now the plaintiffs are ready and willing to pay the balance sale consideration on the delivery of vacant peaceful physical possession of the said property and on the registration of proper conveyance deed in favour of the plaintiffs of the said property free from all encumbrances."
19. ' There is, however, no mention about the payment of transfer fee and compliance of other obligations of the plaintiffs. In his examination-in-chief the plaintiff No,1. Stated that: "The sale agreement does not require me to do any other thing except to pay the balance amount of price as stated therein."
20. It is apparent from the deposition of Iqbal Ahmed (D.W.2) that payment of transfer fee and compliance of other formalities mentioned in Exh.D/2 were prerequisites for the grant of permission for transfer/sale. Therefore, on failure of the plaintiffs to comply with their part of the obligations and to make available the requisite documents in accordance with Exh.D.2 no useful purpose could have been served by submitting application for permission to transfer and the defendant was not obliged to make such incomplete application.
21. ' In so far as the production of documents for inspection by plaintiffs' Advocate is concerned, that request was made by the plaintiffs belatedly after the stipulated 12 months period had already expired and that too without even slightly indicating that they were willing to fulfil their obligations under the contract. Even so, defendant did not turn down the request but the plaintiffs themselves failed to pursue the matter thereafter for over four months. This would indicate that the plaintiffs were not serious about the inspection of documents and the demand was just a device to gain time. Moreover, it would appear from plaintiff No,1's statement during his cross-examination that the title documents had already been inspected by plaintiffs's Advocate before the execution of agreement (Exh.P.1). He stated: "It is correct that Exh.P.1 Agreement was drawn by my advocate. The description of property is given in the agreement were obtained from original documents of title."
22. ' Similarly, the contention that the defendant failed to get the property vacated from his tenants is also not supported from the evidence. Apart from defendant's statement that only two portions of the suit property had been rented out to tenants and both were got vacated by him within six months of the agreement, there is also plaintiff No,1's admission on the point. He has stated: "The defendant had not informed me that he has got the property vacated from his tenants.
23. However, it is in my knowledge that some of the tenants of defendant have vacated the premises, and some are still in occupation."
24. ' Though it would seem from the evidence, that, the portions of the property rented out to tenants were got vacated by the defendant but it is not necessary to go into the question as to whether all the tenants had been removed, as asserted by the defendant, or some portions of the property were still occupied by tenants, as stated by the plaintiff No,1, for the admitted fact is that some portions of the property were got vacated by the defendant and this would at least show defendant's willingness to meet his obligations under the agreement.
25. ' Objection with regard to non-payment of capital gains tax has been satisfactorily explained by the defendant. In the circumstances of the present case when the plaintiffs had not cared to take even the initial steps necessary to secure permission for sale, it could hardly be expected of the defendant to pay the capital gains tax earlier than required.
26. It is obvious from the above discussion that the plaintiffs have not only failed to show that they were willing to perform their obligations under the contract but in fact did not perform the same with the result that the sale of the property could not be finalized. Accordingly, with reference to Issue No,1, I hold that the plaintiffs committed breach of the contract.
27. ' On the second issue the plaintiffs' counsel submitted that in transaction for the sale of immovable property the presumption is that time is not the essence of contract and mere fixing of time in the agreement for finalisation of the sale would not make time the essence of contract. Even where the agreement provided that time was essence, it was not so if conduct of the parties was otherwise.
28. Reliance was placed on the cases of Muhammad Ayyub Khan vs Ch. Muhammad Ahsan and others 1984 CLC 2259 where it has been held that: "It is well settled by a long string of authorities of the highest Courts of the realm, including Jamshed Khodaram Irani v. Burjoriji Dhunjibhai AIR 1915 PC 83 and Seth Essabhoy v. Sabooi Ahmed PLD 1973 SC 3 in a contract of sale of land though period is fixed for completion of the sale mere mention of the period does not make time essence of the contract."
29. ' It was argued that in this case although in clause 9 a period of 12 months has been mentioned for the finalisation of the transaction but the intention of the parties was never to make that as essence of the contract, as was apparent from the correspondence between the parties.
30. ' On the contrary, the argument of the defendant's counsel was that time was the essence of contract in the instant case. He contended that in sale transaction of immovable properties time is not ordinarily considered to be the essence of contract but that is mere presumption which can be dislodged by the intention of parties. Reference was made to the case of Ghulam Nabi and others v. Seth Muhammad Yaqoob and others reported in PLD 1983 SC 344 where it observed: "Though time is not ordinarily considered the essence of the contract involving transaction of immovable property but the true intention of the parties can be gathered from the terms of the contract and the facts and circumstances of the case and mere mention of time in the 1993 stated: contract for its performance does not necessarily mean that time was of the essence."
31. ' He referred to the ,cross-examination of the plaintiffs where it was "It is correct to suggest that according to the agreement the period of 12 months was final."
32. ' Reference was also made to the deposition of the defendant where he stated that: "The period of contract was essence of contract".
33. It is well settled that in contract for the sale of immovable property, ordinarily time is not considered essence of the contract, even if a time was fixed in the contract. As to whether or not time was intended to be made essence of the contract depends on the intention of the parties to be gathered from the facts of each case. In the present case I am unable to agree with the D defendant's counsel that time was made the essence of contract. As held by the Supreme Court in Ghulara Nabi's case mentioned above, intention of the parties has to be gathered from the contract and other circumstances and "mere mention of time in the contract for its performance does not necessarily mean that time was the essence". In order to gather the intention of the defendant reference may be made to his two letters dated 29-12-1986 and 14-8-1986 being Exh.P.13 and Exh.D.4 respectively. Exh.P.13 is the letter by which the agreement (Exh.P.1) was terminated by the defendant. Paras. 1 and 5 of this letter would be relevant for the present issue. These read as follows: "(1) For last five months you have been promising to meet me to finalize the deal but have not met me so far.
(5) The Agreement was to be finalized within 12 months and now 17 months have elapsed without any progress towards the finalization of the sale. It is apparent that you are no longer interested in meeting your obligations under the said Agreement, therefore, I am also no more obliged to you under that Agreement which has already come to end."
34. ' It is apparent from para. 1 above that during five months period preceding 29-12-86 i,e, the date of the letter, the defendant was ready to finalize the deal, which in other words means that the defendant did not consider that the Agreement had come to an end on expiry of 12 months on 28- 7-1986, for, had that been so the defendant would not have been willing to finalise the deal after 28-7-1986. Para. 5 would also show that the defendant considered the agreement to be operative beyond 12 months period. This is obvious from the expression. "The Agreement was to be finalized within 12 months and now 17 months have elapsed without any progress towards the finalization of the sale".
35. ' The other letter dated 14-8-1986 (Exh.D.4) is a disputed document, in the sense that. The defendant asserts that it was sent by him to the plaintiff in reply to plaintiffs' letter dated 9-8-86 (Exh.D.3) but the plaintiff denies its receipt. Even so, the letter may be referred to gather the intention of the defendant. Plaintiffs' letter Exh.D.3 is dated 9-8-86, i,e, after the expiry of the 12 months period under the said Agreement, yet in his purported reply dated 14-8-86 (Exh.D.4) the defendant instead of taking the plea of the expiry of the agreement shows his willingness to finalize the deal. I think these two letters clinch the issue, leaving no scope for doubt that time was not intended to be essence of the contract. However, that would not give any party a free hand to perform his obligations at pleasure without any limit as to time. It only means that, the times fixed under the agreement was not mandatory but still each party was obliged to comply with its part of the contract within a reasonable time.
36. ' As regards issue No,3, in view of my findings on issue No,1 and the circumstances of the case, the plaintiffs are not entitled to the reliefs claimed by them and accordingly the suit is dismissed with costs.