1. CH. MUSHTAO AHMAD KHAN, J.---Bungalow No-18, Survey No.169 measuring 2.41 acres situated in Kharian Cantt. is held by the respondents by way of lease in perpetuity which was granted on 16-4- 1905 on the motion of the lessee, the aforementioned premises were allowed to be segregated and sub-divided into thirteen plots of various sizes with a permission to construct independent buildings thereon vide letter dated 25-10-1978 Exh.P-43. Mr.SA. Qureshi who is respondent No.1 in this appeal and is General Attorney of respondents Nos.2 to 4 who are his son and daughters entered into an agreement for sale of above-mentioned lease rights in Plots Nos.5 to 11 out of the aforementioned sub-divided plots, with Qureshi Muhammad Anwar, the appellant No.1 vide receipt/deed of agreement for sale dated 3-12-1979 which is Exh.D6 and is reproduced as under:-- 335/A, Peshawar Road, Rawalpindi Cantt.
2. Dated 3rd December, 1979.
3. "This is to acknowledge of a sum of Rs.10,000 (Rupees ten thousand) only from Mr. Muhammad Anwar Qureshi son of Late Abdul Ghani Qureshi of Village Kala Gujran, Jhelum on account of advance for the sale of leasehold rights of Plots Nos.5 to 11 comprising Survey No.169/5 to 11 of Bungalow No.18 the Mall, Jhelum Cantt. measuring in aggregate 4,978.250 or there about at the rate of Rs.115.70 per Sq.Yd exclusive of all expenses, charges and fees (subject to registration of the sale-deeds immediately on the expiry of the period of notice for the proposed transfer to be given by the vendor to the M.E.O, Kharian circle under condition No.IV (i) of the lease-deed dated 6-4- 1905 in Form B of Cantt. Code, 1899 provided no veto is exercised by the competent authority on the proposed transfer. The vendee agrees to make the payment of the total balance of the price of the land at the aforesaid rate hereby agreed upon at the time of registration of the sale-deeds failing which the amount of advance now paid by the vendee shall be forfeited by the vendor.
4. (Sd.)
5. (S.A. Kureshy)
6. Vendor I agree and fully subscribe to the above conditions.
7. (Sd).
8. Dated Rawalpindi(Muhammad Anwar Qureshi the 3rd December, 1979.Vendee Witnesses."
9. (Underlining is by us).
10. The sale had to be executed after the proposed sale was permitted and was not vetoed by the Cantonment Authorities as per condition No.4 of the lease-deed which is reproduced as under:-- "CONDITION NO.IV Lessee's interest in certain cases:
(1) Whenever the lessee intends to transfer, by sale, gift, mortgage, or exchange, his interest in the land, or in the buildings erected on the land, or in any part of the land or buildings, he or the intended transferee shall give the Cantonment Magistrate one month's notice in writing before the transfer is completed.
(2) The General Officer of the Command shall have power, within the said period of one month, and with the concurrence of the Local Government, to impose, by order in writing, his veto on any such transfer; and, if in any case the Cantonment authority considers it desirable that the said power of veto should be exercised, it shall report the case to such General Officer without delay.
(3) If notice on any such transfer is not given as aforesaid, or if any such transfer is made after the same has been vetoed, the transfer shall be void."
11. A request in writing for grant of permission for the proposed sale, was made by the respondent No.1 on 4-12-1979 to the M.E.O Kharian Cantt. whereupon the permission to sell the property was not granted and, hence, the proposed transfer was vetoed in exercise of the powers conferred upon Cantonment Authorities under the condition No.4 referred to above, under an intimation to the respondent No.1 vide letter dated 1-1-80 Exh.D2. This letter is reproduced: 'Tele No.954 Re d A-D.
12. No.J-25/28/103 Military Estate Officer, Kharian Circle, Kharian Cantt.
13. Dated, the 01 Jan. 1980 To Mr. SA.Kureshy (Attorney)
14. Deputy Director, Mily Lands & Cantts, Rawalpindi Region, Rawalpindi Cantt.
15. Subject: Exercise of veto power to the proposed transfer by sale of the leasehold rights of 13 plots in Bungalow No.18, the Mall Jhelum Cantt.
16. Reference your application dt. 4-12-79.
2. It is intimated that the proposed transfer by sale of the leasehold rights of 13 plots in Bungalow No.18, the Mall, Jhelum Cantt. has not been agreed by the Army Authorities. The proposal is vetoed.
17. (Sd.)
18. (Abdul Qayyum Bhatti)
19. Mily. Estate Officer, Kharian Cantt.
20. Copy to:
1. The Director, Mily Lands & Cantts, Ministry of Defence, Pak. Sectt-II Rawalpindi.
2. The Deputy Director, Mily Lands. & Cantts., Lahore Region, Lahore Cantt.
3. Sta.HQs Jhelum Cantt."
21. It appears that even thereafter the parties continued making efforts for getting permission for transfer in terms of condition No.4 so that the agreement for sale could be acted upon and the plots agreed to be sold could be transferred. Consequently, Director Military Lands, Cantonment vide letter dated 15-4-1982 Exh.D4 informed the M.E.O., Kharian, Circle Kharian that the proposed sale of the plots is still encumbered with the veto conveyed vide Pak Army Signal No.0-2099 dated 17-12-1979 conveyed to the respondent No.1 vide letter dated 1-1-80 and, hence, the plots are not available for sale till the lessee agrees to take the lease of all the sub-divided plots in Schedule VIII of CIA Rules, 1937 on payment of prevalent rates of rent and premium at the prescribed rate. Letter Exh.D4 is reproduced as under: Regd.A.D.
22. No.15/5/L/AD/A/ML&C/76 Govt. of Pakistan Mily of Defence (ML&C Deptt)
23. Rawalpindi 15-4-82.
24. To The Military Estate Officer, Kharian Circle, Kharian Cantt.
25. Subject: Sale/Sub-division of the vacant compound of Bungalow No.18 (Survey No.169), The Mall, Jhelum Cantonment.
26. In supersession of this Deptt. letter No.15/5/L/AD/A/ML&C/76 dated 7th Sep. 1981, it is intimated that the GHQ QMG's Branch vide their letter No.5631/517/JMR/Qtg-lA, dated 11-3-1982 (copy enclosed) have since reiterated that the orders issued vide their letter No.5631/517/Qtg-L4, dated 31st August 1981 for the regularisation of the sanction issued vide this Department letter No.15/5/L/AD (A)/ML&C/76, dated 25-10-78 is strictly subject to the condition that the lessee takes leases of all the sub-divided plots in Sch.VIII of the CIA Rules, 1937 on payment of prevalent rates of rent premium at the prescribed rate.
2. It is, therefore, obvious that the proposed sale of the plots is still encumbered with the veto conveyed vide Pak Army Signal No.Q-2099, dated 17th December, 1979 as intimated to you by the HQ Kharian Log-Area vide their letter No.2016/3/B/Q-3, dated 18th December 1979 and conveyed to Mr. S.A. Kureshy, the attorney of the lessee vide your letter No.J-25/28/103, dated 1st Jan. 1980 and consequently, the plots are not available for sale till the lessee agrees to take the leases of all the sub-divided plots in Sch.VIII of the CLA Rules, 1937 on payment of prevalent rates of rent and premium at the prescribed rates.
3. You are, therefore, required to intimate the above orders to all concerned.
27. 4.Please acknowledge receipt.
28. (Sd.)
29. (S. Reyaz Hashmi)
30. Dy Director Mily Lands & Cantt.
31. Encl: As above.Department.
32. Copy to: 1.Mr. SA. Kureshy, FA.(P) D.P.Division, Rawalpindi.
33. 2.The DDML&C Lahore Region, Lahore Cantt."
34. In pursuance of the aforementioned letter M.E.O Kharian, Circle Kharian Cantt. conveyed the reiterated veto subject to conditions for grant of permission to transfer the plots requiring conversion of lease in perpetuity regarding whole property held by the respondent, into a lease under Schedule VIII of the CLA Rule, 1937 on payment of prevalent rate of rent and premium vide letter dated 26-5-82 Exh.D3. It is clear therefore, the permission to transfer the plots remained vetoed unless and until the respondents agreed to convert their lease rights in perpetuity to the lease rights for a limited period of time on payment of manifold higher rates of rent and premium and, hence, if they choose to act to their disadvantage. Obviously the permission being conditional and not acceptable to the respondents, they chose not to convert their lease in perpetuity into a lease for limited period of time on payment of exorbitantly higher rate of rent and premium, hence, they did not convert their lease rights as offered by the military authorities which conversion was a pre--condition for grant of permission for the proposed transfer. As the pre--condition for execution of sale-deed could not be fulfilled in spite of best efforts of the respondents, hence, they rescinded the contract which had stood frustrated and refused to execute sale-deed in terms of the agreement for sale dated 3-12-1979 in favour of plaintiffs who have filed this suit seeking Specific Performance of the aforementioned agreement for sale. In the plaint it has been alleged that there is a subsisting agreement for sale and that although there was a condition that the proposed sale shall not be executed in case the same is vetoed by the Military Authorities yet the subsequent letters Exh.D3 and Exh.D4 referred to above do amount to withdrawal of veto and hence grant of permission to transfer in terms of condition No.4 of the lease, therefore, the defendants/respondents are bound to execute sale-deeds in their favour on receipt of Rs.5,75,981 being the balance sale price. This suit has been contested by the respondents inter alia on the grounds that there is no privity of contract between plaintiffs No.2 to 7 and the defendants, hence, those plaintiffs have no locus standi to file the suit; that it is the plaintiffs who have fails I to perform their part of contract, hence, the same stood rescinded and that the agreement on the basis whereof the suit has been filed was to be performed subject to the pre-condition to the effect that the proposed transfer was not vetoed by the Military Authorities who have vetoed the same within the specified period of time, hence, the contract stood frustrated and rescinded which fact was duly notified to the plaintiffs on 28-1-80. Hence, the suit is liable to be dismissed.
2. On the basis of pleadings of the parties, learned trial Court settled the following issues:-
(1) Whether the plaintiffs Nos.2 to 7 have no locus standi to file the instant suit as there is no privity of agreement of plaintiffs Nos.2 to 7 and defendants?
(2) Whether the plaintiffs have failed to pay the amount on the expiry of notice and as such they had failed to perform their part of contract?
(3) Whether veto was exercised within stipulated period of the notice, if so, with what effect?
(4) Whether the relief is barred under section 21 of Specific Relief Act?
(5) Whether the plaint merits rejection under Order 7, rule 11, C.P.C.?
(6) Whether the alleged agreement is unstamped and is not admissible in evidence unless it is impounded penalty is paid by the plaintiff?
(7) Whether the suit is bad for misjoinder of parties?
(8) Whether the plaintiffs are estopped by their conduct to file this suit?
(9) Whether the agreement in question was finally terminated and rescinded on 28-1-80 when the plaintiff failed to perform their part of contract?
(10) Whether the plaintiff is entitled to relief prayed for?
(11) Relief. '
35. In support of their case both the parties produced oral as well as documentary evidence. Plaintiffs produced five witnesses P.W.1 to PW5 whereas defendants produced two witnesses who are D.W.1 and D.W.2. Besides the above oral evidence the plaintiffs have produced documents Exh.P1 to Exh.P43 whereas respondents have produced documents Exh.Dl to Exh.D9. Report of Local Commissioner is Exh.LC-I whereas his statement is Exh.LC-II. The evidence produced by the plaintiffs oral as well as documentary is mainly to the effect that the respondents entered into an agreement for sale which was to be performed subject to the veto to be exercised by the military authorities against the proposed transfer which veto though initially exercised by the military authorities was subsequently withdrawn and proposed transfer was permitted, hence, the plaintiffs are entitled to the specific performance of the contract as they have been ready and willing to perform their part of contract. On the other hand respondents have produced evidence to prove that within the stipulated period of time the respondents did approach the military authorities for grant of permission to transfer which was refused and the proposed transfer was vetoed and further that the plaintiffs also failed to perform their part of contract within the stipulated period of time, hence, contract stood terminated/rescinded/frustrated which fact was duly notified to the plaintiffs, therefore, the suit for Specific Performance cannot be decreed against them and further that there was no privity of contract between plaintiffs Nos.2 to 7 and the defendants, therefore, they have no locus standi to file the suit against the defendants on the basis of agreement executed between the respondent No.1 and the plaintiff No.1.
36. 2-A. After scanning the whole evidence, learned trial Court held that there is no contract between the plaintiffs No.2 to 7 and the defendants, therefore, issues No.1 and 7 were decided against the plaintiffs. Regarding issues No.2 to 4, learned trial Court held that although an agreement for sale was executed between the plaintiff No.1 and respondent No.1 yet proposed transfer remained vetoed inasmuch as the condition attached for grant of permission to transfer in subsequent orders/letters having not been accepted by the defendants as the same was to their disadvantage, no decree for Specific Performance of Contract can be granted in favour of the plaintiffs in view of the provisions of sections 21 and 22 Explanations I and II of the Specific Relief Act, therefore, issue No-2 was decided in favour of the plaintiffs, however, issues No.3 and 4 have been decided in favour of defendants. Relying upon Exh.D6 read with other documentary evidence particularly Exh.D3 and Exh.D4, learned trial Court decided issue No.8 against the plaintiffs holding that the Court cannot vary the contract for sale and direct the Specific Performance thereof, as the original agreement for sale Exh.D4 did not contain a term to oblige the defendants to perform the conditions contained in Exh.D3 and Exh.D4. Other issues have also been decided in favour of the defendant, and against the plaintiffs and the suit has been dismissed vide judgment and decree dated 2-2-1985. Aggrieved of this judgment and decree, the plaintiffs have filed this regular first appeal.
3. Mr. Muhammad Hanif Bhatti, Advocate and Malik Qamar Afzal Advocate have appeared on behalf of the appellants whereas Mirza Anwar Baig, Advocate has appeared on behalf of the respondents.
4. Learned counsel for the appellants have addressed consolidated arguments only on issues No.3, 4, 8, 9 and 10 decided against the plaintiffs and the sole point which has been raised during the course of arguments is that in view of the admitted facts of this case that an agreement for sale was executed between the parties on 3-12-1979 and the proposed transfer though initially vetoed vide Exh.D2 yet was permitted by the orders/letters dated 15-4-1982, ?.6-5-1982 Exh.D3 and Exh.D4 (reproduced in the earlier part of the judgment) and documents Exhs.P-33 and P-34 which are reproduced as under:-- EXHIBIT D-3REGISTERED.
37. No.J-25/28/16.
38. Mily Estate Office, Kharian Circle, Kharian Cantt.
39. Dt: 26-5-1982.
40. To Mr.SA.Kureshy, F.A.(P)D.P.
41. Division, Rawalpindi.
42. Subject: Sale/Sub-Division of the vacant compound of Bungalow No.18 (Survey No.169), The Mall, Jhelum Cantonment.
43. Reference ML&C Deptt. letter No.15/5/l/AD/A/ML&C/76, dated 15th April, 1982 on the subject cited above.
(2) I am directed to inform you that in supersession of the Deptt letter No.15/5/L/AD/A/ML&C dated 7th Sept 1981, it has been intimated that the GHO vide QMG's Branch letter No.5631/517/JMR/Qtg/1-A dated 11-3-82 have reiterated that the Orders already issued under their letter No.5631/517/Qtg-1-A dated 31-8-81 for the regularisation of the sanction accorded by the competent authority vide ML&C Deptt. letter No:15/5/L/AD (A)/ML&C/76, dated 25-10-78 are strictly subject to the condition- that you take out leases of all the sub--divided plots in Sch.VIIl of the C.L.A. Rules, 1937 on .payment of ,prevalent rate of rent and premium at the prescribed rates.
(3) I am further directed to inform that the proposed sale of the plots is still encumbered with the veto conveyed to you vide this office letter No,J-25/28/103 dated 1-1-80 and consequently, the plots are not available for transfer by sale or otherwise till you agree to take out leases of all the sub- divided plots in Sch.VIII of the C.LA. Rules, 1937 on payment of prevalent rates of rent and premium at the prescribed rates as mentioned in para No.2 above alongwith the allied charges.
44. (4)Please acknowledge receipt.
45. (R.H.Malik)
46. Mily Estate Officer, Kharian Circle, Kharian Cantt.
47. Copy to:
1. Mr. Pervez Anwar Qureshi, Kala Gujran/Jhelum, for information, EXI.IBIT-D-4.
48. Reproduced in the earlier part of this judgment.
49. EXHIBIT. P-33.
50. Registered.
51. QMG's Branch (Qtg Dt)
52. General Headquarters, Rawalpindi.
53. Tele: GHQ/41960 No.5631/517/QTG-IA 31 Aug 1981 ToSta HQ Jhelum Info: HQ Khn Log Area M1&C Deptt for information with reference to their U.O.No.15/5/L/AD/A/ ML&C/76 DT. 11 Aug 1981.
54. MEO Kharian.
55. Subject: Sale/Sub-division of Bungalow No.18, The Mall, Jhelum Cantt.
56. Your letter No.205/18/Q dated 11 Oct 81 refers.
57. GHQ have no objection to regularise the sub-division of site of Bungalow No.18, Survey No.169, The Mall, Jhelum Cantt. granted under Govt. of Pakistan Min of Def letter No.15/5/L/AD/A/ML&C/76 dated 25 Oct 1976 and transfer of sub--divided plots by way of sale after converting the lease into SCh.VIlI on payment of prevalent rates of rent and premium.
2. This NOC has been issued as a special case and will not be quoted as a precedence in future.
3. Pak Army signals No.Q-2099 of 17 Dec.79 and No.Q-2074 of 23 Feb:80 are hereby cancelled.
58. Brig.
59. Quartermaster General (Muhammad Ihsan ul Haq)
60. EXHIBIT P-34.
61. Registered.
62. No.15/5/AD/A/ML&O/ 76, Govt. of Pakistan, Ministry of Defence (MI&O Deptt.) Rawalpindi, the 7th Sept: 1981.
63. To The Deputy Director, Mily Lands & Cantonments, Lahore Region, Lahore Cantt:- Subject: Jhelum Cantt: Transfer of leasehold rights of 13 sub-divided plots comprising Svy. No.169J1 to 13 carved out of the vacant compound of Bungalow No.18, The Mall.
64. Reference your letter No.18/68/DD/LR/54, dated 21-12-1979.
(2) A copy of GHQ letter No.5631/517/Qts-IA, dated 31st August, 1981 is forwarded herewith for your information. MEO Kharian may now please be directed to issue the necessary permission to the Sub--Registrar, Jhelum to accept for registration the transfer deeds through sale of all the 13 plots of land cited in the subject in pursuance of notice of transfer dated 4-12-1979 served by the attorney of the transferee on him under the provisions of clause (i) of condition IV of the lease- deed dated 6-4-1905 in Form `S' of Cantt. Code 1899, consequent upon the withdrawal of the veto exercised by the GHQ vide their signal No.Q-2099 dated 17-12-1979 and No.Q-2074 dated 23-2-1980 which now stand cancelled vide para. 3 of GHQ letter quoted above. .
(3) Action taken in the matter may please be intimated to this Deptt. As early as possible under intimation to the transferees.
(4) Please acknowledge receipt.
65. (S.Reyaz Hashmi)
66. Dy. Director Mily Lands and Cantts.
67. Te1:63530.
68. Copy to:
(1) The MEO Kharian Circle, Kharian Cantt. for immediate further necessary action.
(2) Mr.S.A.Kureshy, Director (Finance) PRD C; 177/A Barwar Road,Rawalpindi Cantt. with reference to his appeal dated 24-5-1981 to Lt.- Genl. Saeed Qadir, HI (M). S.Bt.QNG, Pakistan Army, GHQ Rawalpindi together with a copy of GHQ letter dated 31-8-81 referred to above. ,
(3) The Executive Officer, Jhelum Cantonment.
69. Hence, the plaintiffs are entitled to the grant of decree for Specific Performance of the contract but the learned lower Court has illegally dismissed the suit under the assumption that the proposed transfer has been vetoed and contract stands rescinded and frustrated. Referring to the provision of section 18 of the Specific Relief Act, which-is reproduced as under: SECTION 18: "Where a person contracts to sell or let certain property, having only an imperfect title thereto, the purchaser or lessee (except as otherwise provided by this Chapter) has the following rights:-
(a) if the vendor or lessor has subsequently to the sale or lease acquired any interest in the property, the purchaser or lessee may compel him to make good the contract out of such interest;
(b) where the concurrence of other persons is necessary to validate the title, and they are bound to convey at the vendor's or lessor's request, the purchaser or lessee may compel, him to procure such concurrence;
(c) Where the vendor professes to sell unencumbered property, but the property is mortgaged for an amount not exceeding the purchase money, and the vendor has in fact only a right to redeem it, the purchaser may compel him to redeem the mortgage and to obtain conveyance from the mortgagee;
(d) Where the vendor or lessor sues for specific performance of the contract, and the suit is dismissed on the ground of his imperfect title, the defendant has a right to a return of his deposit (if any) with interest thereon, to his costs of the suit, and to a lien for such deposit, interest and cost on the interest of the vendor or lessor in the property agreed to be sold or let."
70. Learned counsel has contended that the plaintiffs are entitled to get agreement for sale of specifically performed including issuance of a direction to the j respondents to convert their lease rights in perpetuity to a lease under Sch.VIII to CIA Rules, 1937 for a limited period of time on payment of enhanced rate of rent and prevalent premium. Regarding applicability of provision of sections 21 and 22 of the Specific Relief Act, which have been relied upon by the learned trial Court for non-suiting the plaintiffs, learned counsel has argued that the respondents having agreed to sell the plots in question, cannot wriggle out of their commitment by refusing to perform their part of contract merely on the ground that Specific Performance of Agreement for sale will put them to a disadvantageous position. Referring to letter Exh.P43, learned counsel contended that the defendants had already got the plots sub-divided and permission has been granted to them to raise construction thereon, therefore, there is absolutely no bar to the passing of a decree for Specific Performance of Contract in favour of the plaintiffs. In support of his contention, besides, relying upon the provision of section 18 of the Specific Relief Act, learned counsel has also placed reliance on the following cases:
(1) Kalyanpur Lime Works Ltd v. State of Bilhar and another (AIR 1954 SC 165), (2)Sayyed Ghulam Muhammad Shah v. Sayyed Fateh Muhammad Shah (PLD 1955 FC 1), and
(3) Ziauddin Raf v. Muhammad Khan and others (PLD 1962 (W.P.) Lahore 321).
5. As against the above arguments,. Mirza Anwar Baig Advocate learned counsel for the respondents has vehemently argued that the lease rights agreed to be sold were granted to the respondents in the year 1905 vide a lease in perpetuity. Permission to sub-divide Bungalow into 13 plots and raising construction thereon was granted to the respondents vide a letter Exh.P43 dated 25-10-1978 according to which the nature of the lease rights as originally granted remained intact.
71. Agreement for sale dated 3-12-1979 was executed between the plaintiff No.1 and the respondent No.1 with a view to transfer the existing lease rights in the plots agreed to be sold. There was a pre- condition in the agreement for executing transfer/sale-deeds in favour of plaintiffs to the effect that transfer shall take place only if the proposed transfer is not vetoed in terms of condition No.4 of the lease-deed, according to which if transfer is made without permission from the Cantonment Authorities the same is void. The respondents did approach the Military Authorities within the stipulated period of time to obtain necessary. permission and to know as to whether the proposed transfer as vetoed? The said authorities vetoed the proposed transfer which veto was conveyed to the respondents on 1st of Jan: 1981 vide a letter Exh.D2. Subsequent thereto however another letter was issued by the Cantonment Authorities offering that the proposed transfer can be allowed to be made in case the lease in perpetuity is converted into lease under Sch.VIII of Cantonment Lease Agreement Rules, 1937 on payment of prevalent rate of rent and the premium which lease is for a limited period of time and at one time for a maximum period of 33 years. The rate of rent. and premium of the said lease is also manifold higher than the one already agreed upon. A perusal of the documents Exh.D3, Exh.D4, Exh.P33 and Exh.P34 clearly proves that in this offer veto as originally exercised was never withdrawn. It was only stated that the permission can be granted if the lessee, agrees to convert their lease rights into a different type of lease. Naturally it was a prerogative of the respondents to accept the offer or not and as the same was disadvantageous to their rights in property already held by them as leases in perpetuity, hence, it was not accepted. Net result is that till today the veto exercised by the Military. Authorities remains in force and hence, the pre- condition for executing the sale/transfer deed having not been fulfilled, the contract in question was rescinded as the same stood frustrated. Therefore, even if it is admitted that there is an agreement for sale between the plaintiffs and the defendants as the pre-condition, fulfillment whereof has not been satisfied, as the proposed sale has been vetoed, no decree for Specific Performance can either be claimed or granted, therefore, judgment and decree rendered by the learned trial Court is unexceptionable.
6. Regarding applicability of provision of section 18 of the Specific Relief Act and the law declared in the cases cited by the learned counsel for the appellants, learned counsel contended that the said provision as well as the law declared in the judgments cited at Bar by the learned counsel for the appellants are not at all attracted to the facts and circumstances of the case inasmuch as section 18 applied to those cases only where the title of the transferor is deficient and he can make up the title due to his own act and it is in such a situation that while passing a decree for Specific Performance of the contract, a direction can be issued that the transferor should get his title completed. According to the learned counsel these judgments are even otherwise distinguishable on facts. Learned counsel contends that after the veto was exercised by the competent authority, the contract stood frustrated and, therefore, there being no subsisting contract, thereafter between the parties thereto no question of specific performance thereof arises. In support of the above provisions, learned counsel has placed reliance on the following cases:
(1) Denny, Mott & Dickson, Ltd. v. James B, Fraser & Company, Ltd. (1944 A.C. & Privy Council 265),
(2) Kassamali v. Mst. Shakra Begum (PLD 1968 Karachi 307)
(3) Messrs Dada Ltd. v. M/s. Abdul Sattar & Co. (PLD 1984 SCMR 77).
(4) M/s. Mansukhdad Bodaram v. Hussain Brothers Ltd. (PLD 1980 SC 122).
(5) Mst. Safia Begum v. Muhammad Ishaq etc. (1989 CLC 1915).
(6) Muhammad Ishaq and another v. Mst. Sufia Begam (1992 SCMR 1629).
72. Learned Counsel has further contended that it is a case of impossibility and, therefore, decree for specific thereof cannot be passed to enforce such a contract. In support of.this proposition learned counsel has placed reliance on the following cases:
(1) Punjraj v. Kalusa (AIR 1927 Nagpur 233).
(2) Ismail Khan Mir Azam Khan v. The Official Receiver (AIR 1928 Sindh 63).
(3) Nathulal v. Phoolchand (AIR 1970 SC 546).
73. Learned counsel has next contended that if a decree for specific performance is passed in favour of the plaintiff the Court will first have to make a fresh and varied contract for the plaintiff, which is not permissible under the law inasmuch as the respondents shall have to convert their perpetual leasehold rights to the rights for a limited period of time on cumbersome terms which are very harsh and are of serious financial implications as the respondents will be obliged to pay an amount of Rs.4/5 lac as the premium and rent as compared to Rs.24 as fixed in the original lease agreement, therefore, the suit has rightly been dismissed by the learned trial Court after taking note of the provisions of sections 21 and 22 of Specific Relief Act. In support of his contention in this behalf learned counsel has placed reliance on the following cases:
(1) Agha Sikandar Ali Khan v. Mst. Nawab Bibi and 11 others (PLD 1973 Lah. 77),
(2) Davis Contractors Limited v. Farham Urban District Council ((1956) 2 All England Law Reports 145),
(3) British Movietonew Limited v. London and District Cinemas Limited (1951 All England Law Reports 617),
(4) Rana Sheo Ambar Singh v. Allahabad Bank Ltd., Allahabad (AIR 1961 SC 1790),
(5) M/s. Hafiz Abdul Aziz Cotton Ginning Factory v. M/s. Haji Ali Muhammad & Co. (PLD 1966 (W.P.)
74. Kar. 197),
(6) Barkat Ram v. Anant Ram (1931 Indian Cases 632) and
(7) Davies v. Davies (1987(36) CA 359 (395)).
7. We have considered the arguments addressed by the learned counsel for the parties and have also gone through the record as well as the case-law cited at Bar by the learned counsel for t-he parties. Facts necessary to determine the arguments addressed by the learned counsel for the parties are almost admitted. Both the parties admitted that agreement for sale of the plots in question was executed between plaintiff No.1 and respondent No.1 as . attorney of the other respondents on 3-12-1979 which document is Exh.D6. The Bungalow in question is being held by respondents as lessees in perpetuity which lease was granted on 16-4-1905. This Bungalow has been allowed to be segregated sub-divided into 13 plots .with a permission to build houses independent thereon vide letter order Exh.P43. Rs.10,000 as earnest money was admittedly received by respondent No.1 while executing receipt/agreement for sale Exh.D6 on 3-12-1979. The respondents did apply to the Military Authorities within the stipulated period of time informing the proposed transfer to know the exercise or otherwise of veto by them in terms of condition No.4 of the lease agreement. The proposed transfer was vetoed and was conveyed to the respondents vide letter/order dated 1-1-1980 Exh.D2. Subsequently another order was passed by the Cantonment Authorities as is clear from the documents Exh.D3, Exh.D4 and Exh.P33 to Exh.P35 according to which the conditional permission to transfer the plots in question was granted to the respondent in case they agreed to convert their lease rights in whole property from a lease in perpetuity to a lease for a limited period of time to be granted as per Schedule VIII, CLA Rules, 1937, on payment of prevalent premium and rate of rent which is manifold higher than the existing premium/rent payable by the respondents. The condition of conversion of lease right has not been accepted by the respondents and, hence, the position even today is that there was an agreement for sale but the proposed transfer has since been vetoed by the Military Authorities and as such the respondents cannot execute the sale-deed in favour of the plaintiffs. According to the defendants/respondents they have intimated the rescinding of the contract to the plaintiff and, therefore, there being no subsisting contract, decree for specific performance can neither be claimed nor passed by this Court. Case of the plaintiffs, however, is that the subsequent permission amounts to withdrawal of the earlier veto therefore, a decree for specific performance as prayed for can be granted in their favour which shall also include a direction to the respondents to fulfil the conditions imposed by the Military Authorities for grant of permission of proposed sale.
8. In order to appreciate the arguments addressed by the learned counsel for the parties and to determine issues involved in this case for the purpose of reference relevant provisions of Specific Relief Act as well as portions of the judgments referred to by both learned counsel for the parties, are reproduced as under:- SECTION 16: Specific performance of independent part of contract. When a part of contract which taken by itself, can and sought to be specifically performed, stands on a separate and independent footing from another part of the same contract which cannot or ought not to be specifically performed, the Court may direct specific performance of the former part.
75. SECTION 17: Bar in other cases of specific performance of part of contract. The Court shall not direct the specific performance of a part of contract except in cases coming under one or other of the three preceding sections.
76. SECTION 18: Where a person contracts to sell or let certain property, having only an imperfect title thereto, the purchaser or lessee (except or otherwise provided by this Chapter) has the following rights.
(a) If the vendor or lessor has subsequently to the sale or lease acquired any interest in the property, the purchaser or lessee interest in the property, the purchaser or lessee may compel him, to make good the contract out of such interest.
(b) Where the concurrence of other persons is necessary to validate the title, and they are bound to convey at the vendor's or lessor's request the purchaser or lessee may compel him to. procure such concurrence:-
(c) Where the vendor professes to sell unencumbered property but the property is mortgaged for amount not exceeding the purchase money and the vendor has in fact only a right to redeem it, the purchaser may compel him to redeem the mortgage and to obtain conveyance from the mortgagee.
(d) Where the vendor or lessor sues for specific performance of the contract and the suit is dismissed on the ground of his imperfect title, the defendant has a right to a return of his deposit (if any) with interest thereon, to his costs of the suit and to a lien for such deposit, interest and cost on the interest of the vendor or lessor in the property agreed to be sold or let.
77. SECTION 21: The following contracts cannot be specifically enforced.
(a) a eontr4et for the non-performance of which compensation in money is an adequate relief;
(b) a contract which runs into such minute or numerous details, or which is so dependent on the personal qualifications or violations of the parties, or otherwise from its nature is such, that the Court cannot enforce specific performance of its material terms;
(c) a contract the terms of which the Court cannot find with reasonable certainty.
(d) a contract which is in its nature revocable;
(e) a contract made by trustees either in excess of their powers in reach of their trust;
(f) a contract made by or on behalf of which involves the performance of a continuous duty extending over a longer period than three years from its date.
(g) a contract the performance of which involves the performance of a continuous duty extending over a longer period than three years from its date; and
(h) a contract of which a material part of the subject-matter, supposed by both parties to exist has, before it has been made, ceased to exist.
78. And save as provided by the (Arbitration Act, 1940) no contract to refer (present or future differences) to arbitration shall specifically be enforced but if any person who has made such a contract (other than an arbitration agreement) to which the provisions of the said Act, apply and has refused to perform it sues in respect of any subject which he has contracted to refer, the existence of such contract shall bar the suit.
79. Illustrations. to (a)-- A contracts to sell and B contracts to by a lakh of rupees in the four percent loan of the (Central Governments).
80. A contracts to sell, and B contracts to buy 40 chests of indigo at Rs.1,000 per chest. In consideration of certain property having been transferred by A to B. B contracts to open a credit in A's favour to the extent of Rs.10,000, and to honour A's drafts to that amount. The above contracts cannot be specifically enforced, for in the first and second both A and B and in the third A would be reimbursed, by compensation in money. to (b)-- A contracts to render personal service to B. A contracts to employ B on personal service; A an author, contracts with B a publisher, to complete a literary work. B cannot enforce specific performance of these contracts.
81. A contracts to buy B's business at the, amount of a valuation to be made by two values one to be named by A and the other by B. A and B each name a valuer but before the valuation is made, A instructs his valuer not to proceed.
82. By a charter-party entered into in (Chittagong) between A the owner of a ship and B, the charterer it is agreed that the ship shall proceed to (Karachi) and there load a cargo of rice, and thence proceed to London, freight to be paid one-third on arrival (Karachi) and two--thirds on delivery of the cargo in London.
83. A lets land to B and B contracts to cultivates it in a particular manner for three years next after the date of the lease.
84. A and B contract, that in consideration of annual advances to. be made by A B, will for three years next after date of the contract grow particular crops on the land in his possession and deliver them to A when cut and ready for delivery.
85. A contracts B that in consideration of Rs.10,000 to be paid to him by B he will paint a picture for B.
86. A contracts B to execute certain works which the Court cannot superintend.
87. A contracts to supply B with all the goods of a certain class which B may require.
88. A contracts with B to take from B a lease of a certain house for a specified term at a specified rent.
89. If the drawings room is handsomely decorated even if it is held to have so much certainty that compensation can be recovered for its breach.
90. A contracts to marry B The above contracts cannot be specifically enforced. to (c)-- A the owner of a refreshment-room contracts with B to give him accommodation there for the sale of his goods and to furnish him with the necessary appliances. A refuses to perform his contract.
91. The case is one for compensation and not for specific performance the amount and nature of the accommodation and appliances being undefined. to (d)-- A and B contract to become partners in a certain business, the 'contract not specifying the duration of the proposed partnership. This contract cannot be specifically performed, for, if it were so performed, either A or B might at once dissolve the partnership. to (e)-- A is a trustee of land with power to lease it for seven years. He enters into a contract with B to grant a lease of the land for seven years, with a covenant to renew the lease at the expiry of the term.
92. This contract cannot be specifically enforced.
93. Two trustees A and B empowered to sell trust-property worth a lakh of rupees contract to sell it to C for Rs.30,000. The contract is so disadvantageous as to be a breach of trust. C cannot enforce its specific performance.
94. The promoters of a company for working mines contract that the company when formed shall purchase certain mineral property. They take no proper precautions to ascertain the value of such property and in fact agree to pay an extravagant price therefor. They also stipulate that the vendors shall give them a bonus out of the purchase-money. This contract cannot be specifically enforced. to (f)-- A company existing for the sole purpose of making and working a railway contract for the purchase of a piece of land for the purpose of erecting a cotton mill thereon. This contract cannot be specifically enforced. to (g)-- A contract to let for twenty-one years to B the right to use such part of certain railway made by A as was upon B's land, and that B should have a right of running carriages over the whole line on certain terms, and might require A to supply the necessary engine-power, and that A should during the term keep the whole railway in good repair. Specific performance of this contract must be refused to B. 'to (h)-- A contract to pay an annuity to B for the lives of C and D. It turns out that, at the date of the contract, C, though supposed by A and B to be alive, was dead. The contract cannot be specifically performed."
95. SECTION 22: The jurisdiction to decree specific performance is 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.
96. The .following are cases in which the Court may properly exercise a discretion not to decree specific performance:- I. Where the .circumstances under which the contract is made are such as to give the plaintiff an unfair advantage over the defendant, though there may be no fraud or misrepresentation on the plaintiff's part.
97. ILLUSTRATIONS (a)A; a tenant for life of certain property, assigns, his interest therein to B. C contracts to buy, and B contract to sell that interest. Before the contract is completed, A receives a mortal injury from the effects of which he dies the day after the contract is executed. If B and C were equally ignorant or equally aware of the fact, B is entitled to specific pcrf,3rmance of the contract. If B knew the fact, and C did not, specific performance of the contract should be refused to B.
98. (b)A contracts to sell to B in interest of C in certain stock in trade. It is stipulated that the sale shall stand good, even though it should turn out that C's interest is worth nothing. In fact, the value of C's interest depends on the result of certain partnership-accounts, on which he is heavily in debt to his partners. This indebtedness is known to A, but not to B, specific performance of the contract should be refused to A.
99. (c)A contract to sell, and B contracts to buy, certain land. To protect the land from floods, it is necessary for its owner to maintain an expensive embankment. A does not know of this circumstance and A conceals it from him. Specific performance of the contract should be refused to A.
100. (d)A's property is put up to auction. B requests C, A's attorney, to bid for him. C does this inadvertently and in good faith. The persons present, seeing the vendor's attorney bidding think that he is a mere puffer and cease to compete. The lot is knocked down to B at a low price. Specific performance of the contract should be refused to B.
101. II.Where the performance pf the contract would involve some hardship on the defendant which he did not foresee, whereas its non--performance would involve no such hardship on the plaintiff.
(e) .* (f)A and B trustees, join beneficiary, C, in a contract to sell the trust estate to D, and personally agree to exonerate the estate from heavy encumbrances to which it is subject. The purchase- money is not nearly enough to discharge those encumbrances, though at the date of the contract, the vendors believed it to be sufficient. Specific performance of the contract should be refused to D.
102. (g)A, the owner of an estate contract to sell it to B, and stipulates that he, A, shall not be obliged to define its boundary. The estate really comprises a valuable property, not known to either to be part of it. Specific performance of the contract should be refused to B unless he waives his claim to the unknown property.
103. (h)A contracts with B to sell him certain land, and to make a road to it from a certain railway station. It is found afterwards that A cannot make the road without exposing himself to litigation.
104. Specific performance on the part of the contract relating to the road should be refused to B, even though it may be held. that he is entitled to specific performance of the rest with compensation for loss of the road.
105. (i)A, a lessee of mines, contracts with B, his lessor, that at any time during the continuance of the lease B may give notice of his desire to take the machinery and plant used in and about the mines and that he shall have the articles specified in his notice delivered to him at a valuation on the expiry of the lease. Such a contract might be most injurious to the lessee's business, and specific performance of it should be refused to B.
106. (j)A contracts to buy certain land from B. The contract is silent as to access to the land. No right of way to it can be shown to exist. Specific performance of the contract should be refused to B.
107. (k)A contracts with B to buy from B's manufactory and not elsewhere all the goods of a certain class used by A in his trade. The Court cannot compel B to supply the goods, but if he does not supply them, A may be ruined, unless he is allowed to buy them elsewhere. Specific performance of the contract should be refused to B.
108. 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.
109. A sells land to a railway company, who contract to execute certain works for his convenience. The company take the land and use it for their railway. Specific performance of the contract to exercise the works should be decreed in favour of A.
110. In case of Kalyanpur Lime Works Ltd. v. State of Bihar and another (AIR 1954 SC 165) at pages 169 and 170 of the report it has been held as under:- "The next question which arises for consideration is whether the High Court was right in its conclusion that the contract of which the specific performance is asked for in the plaint is not the contract which the parties entered into. In this connection the High Court found that the parties come to the final agreement on all the essential terms of the proposed leases on or before the 30th April, 1935 and these terms were embodied in Exhibits 22 and 22(a). It is contended before us on behalf of the appellant that the substance of the contract entered into between the parties was the lease for 20 years under the rules of Waste Lands & Mineral Concession Manual and that the time from which the lease was to commence was not on its essence.
111. This intention, it is urged, flows clearly from the relevant correspondence which passed between the. parties on the subject. That such was the intention is said to be further confirmed by the fact that precisely the same terms were entered into with Kuchwar Co. We agree with the High Court that although the period of the leases was to be for twenty years yet this period was not to commence from the date when the leases were to be executed. In para. 7 of the plaint the plaintiff alleged that in pursuance of the contract it was inducted by Government into possession of the property though the leases were to be subsequently executed and were to take effect from the Ist April, 1934. The draft leases while specifying the duration as 2(? years make it clear that they were to commence from the 15th April, 1934.
112. That is the contract of which spec performance can be allowed but as the defendant No.1 is unable to perform it in its entirety, the plaintiff can claim leases for the un-expired portion, that is to say up to the 31st March 1954, if it can invoke the provisions of section 15 of the Specific Relief Act in its favour. We agree with the High Court that section 13(a) of the Spec Relief Act applies to the case.
113. That section lays down that where a person contracts to sell or let certain property having only imperfect title thereto, if the vendor or lessor has subsequently to the sale or lease acquired any interest in the property, the purchaser or lessee may compel him to make good the contract out of such interest.
114. There can be no doubt whatever that when the Government entered into the contract to grant leases to the Lime Co. in 1934, it had an imperfect title, inasmuch as it could not grant a fresh lease to anyone during the existence of the previous lease in favour of Kuchwar Co. No doubt the Government thought that it had the right to forfeit those leases and did in fact order forfeiture but it having been found subsequently that the forfeiture was legally invalid, rights of the previous lessees were restored. As already pointed out above this is not a case of absence of title but is one of imperfect title and hence falls within the meaning of section 18. After the 31st March 1948 when the lease in favour of Kuchwar Co. expired, the impediment in the way of the Government to grant leases of the property stood removed and the Lime Company's right to get the leases revived in its favour. This right of the plaintiff was resisted by the Government who on the other hand, granted the leases to defendant No.2.
(21) The High Court of Patna rightly took the view that section 18 (a) was applicable to the facts of this case and although defendant No.1. was not in a position to grant a lease from the time it agreed to do, the impediment being now removed and a suit for specific performance not being barred, the Lime Co. was entitled to sue for that relief. We have already held in agreement with the view of the High Court that section 18 is attracted to the facts of this case and the contract of which specific performance can be decreed in favour of the plaintiff is the one embodied in Exhibits 22 and 22(a) but as a substantial portion of the period has already expired, relief can be given only under section 15 of the Specific 'Relief Act and in compliance with its conditions.
115. The High Court while holding that section 15 applied, disallowed the plaintiff's claim because in its view these conditions were not fulfilled. According to the High Court, the application of the plaintiff dated the 18th Feb. 1952 show that it had relinquished all claims to further performance and all right to compensation either for the deficiency, or for the loss or damage sustained but it through the default of the defendant as required by section 15. The relevant portion of the application is in the following terms: "That without prejudice to the submissions made by the petitioner under section 18 of the Spec Relief Act the petitioner alternatively claims relief under section 15 of the Specific Relief Act and claims a decree for specific performance of contract for the period after the expiry of the lease of Kuchwar Lime and Stone Co. Ltd., that is from 1-4-49 to 31-3-54 on the usual covenants as mentioned in Waste Land Mineral Concessions Manual with such compensation as may be permissible. He further relinquishes all claims to further performance and all right to compensation either for the deficiency or for the loss or damages sustained by him for default of the defendant for the period prior to 1-4-1943."
116. In case of Sayyed Ghulam Muhammad Shah v. Sayyed Fateh Muhammad Shah (PLD 1955 FC 1) at pages 8, 9 and 10 of the report it has been held as under:- "It is true that the Transfer of Property Act, 1882 is not in force in the Punjab and such transfers are not void in that Province by reason of any statutory rule. But the principle on which such transfers are held to be void is of wider application and rests on the rule, also recognised by English Law, that an expectancy is not property which can be assigned. There is, however, one exception to this principle which has been enforced by the Courts in England, and here is the Provinces where the Transfer of Property Act is not in force. That exception was stated by Buckley, J. in re: Ellenborough
(4) at p.700 where he said, "if value be given, it is immaterial what is the form of assurance by which the disposition is made, or whether the subject of the disposition is capable of being thereby disposed of or not. As assignment for value binds the conscience of the assignor. A Court of Equity as against him will compel to that which ex hypothesi he has not yet effectually done. Future property, possibilities and expectancies are all assignable in equity for value: Taiby v. Official Receiver (1888) 13 AC 523 at p. 543. But when the assurance is not for value, a Court of Equity will not assist a volunteer." The exception has received statutory recognition here in section 43 of the Transfer of Property Act, section 115 of the Evidence Act and section 18 of the Specific Relief Act. The doctrine of feeding the grant by estoppel which appears as the solitary illustration to section 115 of the Evidence Act and in section 43 of the Transfer of Property Act is based on the ground that if a person, for value received, conveys what he does not own but subsequently he acquires the title which he conveyed, then the transferee can enforce the conveyance against him. A Court of Equity in such cases will not only actively assist the person paying the value but will also repel the transferor's plea based on the invalidity of the transfer in law. Similarly section 18 of the Specific Relief Act recognises as enforceable at law the right of a person contracting to purchase or to take in lease property from a person who at the time of the contract does not own it but who subsequently acquires it. This rule, being founded on equity has been applied in the Punjab, where the transfer of Property Act is not in force. Thus where a person acting on the consent of the next reversioner has purchased for valuable consideration property from a limited owner, as for instance, a sonless proprietor or a widow, his right to the property has been held to be enforceable against the consenting reversioner, if he has on the expiry of the limited estate succeeded to the property. Instances of this character will be found in Allah Baksh v. Ghulam (13 PR 1899), Padmun and others v. Achhar and others (AIR 1926 Lah. 39), confirmed in Letters Patent Appeal No.87 of 1924.
117. Naranjan Singh v. Dharam Singh (AIR 1930 Lah. 928), and other cases cited in Ali Muhammad v. Mst.
118. Mughlani and others (AIR 1946 Lah. 180), Gobinda v. Chanan Singh and another (AIR 1933 Lah. 378), was in fact a case of gift but was decided by Currie, J. as if it were a case of sale. The distinguishing feature between the Full Bench case in AIR 1946 Lah. 180 and the present case is that in the former the widow had made a gift of property, thus surrendering her own widow's interest in the property gifted, with the result that part of the property had become vested in the consenting reversioner who was the next reversioner. It is on this ground that decision can be supported because section 18 of the Specific Relief Act which seems to have been invoked in that case is not applicable to gratuitous transactions like gifts and wills. In the present case, the consent by Nazar Muhammad Shah amounted, at the most, to an alienation of his reversionary right which at the time of his consent was no more than a spes successions. Such consent would have been enforced by A Court of Equity against him and his heirs if it had been given for valuable consideration, but admittedly Nazar Muhammad Shah received no consideration for his consent and his act was no more than a promise to make a gift, which in the absence of facts giving rise to estoppel to the property of Muhammad Ali Shah. This distinction seems to have been completely overlooked by the learned Judges of the High Court though the decision of the Subordinate Judge was solely founded on it."
119. In case of Ziauddin Rafi v. Muhammad Khan and others (PLD 1962 (W.P.) Lahore 321) at page 324 of the report headnote A & B, it has been held that if a person transfer a property for consideration which is not vested in him to devolve upon, subsequently he is bound to make a contract as provided under the provision of section 18 of Specific Relief Act read with section 43 of the Transfer of Property Act. In case of Nathulal v. Phoolchand (AIR 1970 SC 546) where a statute provided that the land agreed to be transferred had to be with prior permission of the competent authority. It has been held that agreement shall be deemed subject to the implied condition of the prior permission of the said authority and further at page 548 it has been held as under:- "The conditions necessary for making out the defence of part performance to an action in ejectment by the owner are: (1)that the transferor has contracted to transfer for consideration any immovable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty; (2)that the transferee has, in part performance of the contract, taken possession of the property on any part thereof, or the transferee, being already in possession continues in possession in part performance of the contract; (3)that the transferee has done some act in furtherance of the contract; and (4)that the transferee has performed or is willing to perform his part of the contract.
120. If these conditions are fulfilled then notwithstanding that the contract, though required to be registered, has not been registered, or, where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefore by the law for the time being in force, the transferor or any person claiming under him is debarred from enforcing against the transferee any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract."
121. There is in this case a contract to transfer for consideration immovable property by writing signed by Nathulal from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty. In part performance of the contract, Phoolchand has taken possession of the property and he had in pursuance of the contract must be independent of the terms of the contract cannot be accepted. The first three conditions, for the defence of part performance to be effectively set up by Phoolchand exist. Mr. Shroff for Nathulal however contends that Phoolchand was not willing to perform his part of the contract.
122. 10.Nathulal had expressly undertaken to have the Revenue Records rectified by securing the deletion of Chittarmal's name, and it was an implied condition of the contract that Nathulal will secure the sanction of the Collector to the transfer under section 70 (4) of the Madhya Bharat Land Revenue and Tenancy Act 66 of 1950. The first condition was not fulfilled till October 6, 1952 and the second condition was never fulfilled. We are unable to agree with Mr. Shroff that the repeal of the Madhya Bharat Act 66 of 1950 by the Madhya Pradesh Land Revenue Code, 1959, has retrospective operation.
123. 11.In considering whether a person is willing to perform his part of the contract the sequence in which the obligations under a contract are to be performed must be taken into account. The argument raised by Mr. Shroff that Nathulal was bound to perform the two conditions only after the amount of Rs.21,000 was paid is plainly contrary to the terms of the agreement. By virtue of section 4 of the Transfer of Property Act the chapters and sections of the Transfer of Property Act which relate to contracts are to be taken as part of the Indian Contract Act, 1872. If, therefore, under the terms of the contract the obligations of the parties have to be performed in a certain sequence, one of the parties to the contract cannot require compliance with the obligations by the other party without in the first instance performing his own part of the contract which in the sequence of obligations is performable by him earlier.
124. In view of the arrangement made by Phoolchand it was clear that he had at all relevant times made necessary arrangements for paying the amount due, but so long as Nathulal did not carry out his part of the price. It must therefore be held that Phoolchand was at all relevant times willing to carry out his part of the contract."
125. In case of Agha Sikander Ali Khan v. Mst. Nawab Bibi and 11 others (PLD 1973 Lahore 77) at page 80 of the report it has been held as under:-- "The question for determination here is whether having regard to the principles enunciated in the excerpts above, with which we are in complete accord, any case has been made out by the appellant to show that the essential ingredient of price is ascertained or rendered ascertainable in the document under consideration. From the plain language of the contract it is not ascertainable at what price the property which the widow might get in case of her success, which she had promised to convey to the appellant would be sold. Even the extent of the land to be conveyed, the maximum of which was one --fourth share in the inheritance of her husband, was left to further determination. The document does not even mention any mode of ascertainment nor does it further say that the land will be conveyed for reasonable and fair price. All this has been left to imagination.
126. Learned counsel for the appellant proceeded on the assumption that Rs.1,400.00 was the price of the land likely to- be obtained by the widow in the suit against the collaterals. This interpretation can clearly not be spelt out of the text of the contract and the argument is unsustainable. The document being incomplete, as its terms are not ascertainable with reasonable certainty, it comes within the mischief of section 29 of the Contract Act and is void and by virtue of the provisions of section 21(a) of the Specific Relief Act is not to be enforced specifically.
127. It will not be out of place to mention that section 93 of the Evidence Act provides that when any particular document is ambiguous or defective, no evidence can be given to explain or amend the document. There is no denying the fact that the Court is bound to overcome the difficulties that often occur in determining what is a reasonable price or a reasonable rate or in fixing the amount of damages which a man has sustained under particular circumstances and upon a proper enquiry the Court is not unable to determine it. All the same the Court will not undertake to supply defects or remove ambiguousness according to its own notions of what is reasonable, for this would not be enforcing the contract made by the parties but to make a new contract for them. On parity of reasoning it was held in Tirumala Chetty Rangayya Chetty v. Kandalla Srinivasa Raghavacharlu and others AIR 1929 Mad. 243 that an agreement to sell at a moderate price or at a fair rate or at a proper rate may be perfectly valid but an agreement to sell at a favourable or concession rate is indefinite and must be regarded as void for uncertainty. The case before us is no better. We, therefore, hold in agreement with the two Courts below that the contract is too uncertain to be enforced. The appeal is without merit and is dismissed with costs."
128. In case of Messrs Hafiz Abdul Aziz Cotton Ginning Factory v. Messrs Haji Ali Muhammad Abdullah & Co. and another (PLD 1966 Karachi 197) at page 206 of the report it has been held as under:- "Counsel did not realise that under section 8(1)(b) the Court can appoint an arbitrator or umpire when an arbitrator or umpire appointed by the parties "neglects or refuses to act, or is incapable of acting, or dies" and that in terms of section 20(4) the Court can order reference to an arbitrator appointed by itself "where the parties cannot agree upon an arbitrator", which means that the Court can replace a person of its choice to give effect to the intention of the parties. This power, does not confer the authority on the Court to substitute the original agreement of the parties by an entirely new agreement of its own choice. This being the law on which counsel relied they were not entitled to contend that the bye-laws of the defunct-Sindh Association could be discarded or disregarded. Counsel for the present applicant rightly pointed out that such an argument would amount to raising the contention that not only novation by alteration but by substitution of a completely new contract has taken place. He argued that such novation has in fact. not taken place in terms of section 62 of the Contract Act. But it is unnecessary to go into those details because that was not the case of the respondents at the time of making the reference to arbitration or before the trial Court. They have nowhere alleged that the applicant had agreed to substitute a completely new contract for the original one but have on the contrary pleaded that the Sindh Association itself exists by virtue of its merger in the Pakistan Association and that the panel of latter Association is not different from the panel of the former Association; therefore, the original agreement itself can be enforced. That plea cannot succeed unless the bye-laws of the said association too are discarded for making the reference.
129. In case of British Movietonews, Ltd. v. London and District Cinemas, Ltd. (1951 AER 617) at page 625 of the report it has been held as under:- It is of the utmost importance that the action of a Court, when it decides that, in view of a supervening situation the rights and obligations under a contract have automatically ceased, should not be misunderstood. The suggestion that an "uncontemplated turn of events" is enough to enable a Court to substitute its notion of what is "just and reasonable" for the contract as it stands, even though there is no "frustrating event". appears to be likely to lead to some misunderstanding.
130. The parties to an executory contract are often faced, in the course of carrying it out, with a turn of events which they did not at all anticipate a wholly abnormal rise or fall in prices, a sudden depreciation of currency, an unexpected obstacle to execution, or the like. Yet this does not in itself affect the bargain they have made. If, on the other hand, a consideration of the terms of the contract, in the light of the circumstances existing when it was made, shows that they never agreed to be bounded in a fundamentally different situation which has not unexpectedly emerged, the contract ceases to bind at that point not because the Court in its discretion thinks it just and reasonable to qualify the terms of the contract, but because on its true construction it does not apply in that situation. When it is said that in such circumstances the Court reaches a conclusion which is "just and reasonable": LORD WRIGHT in Constantine's case ((1941) 2 All E.R. 186); or one "which justice demands": LORD SUMMER in Hirji Mulji v. Cheong Yue S.S.Co. (13) (1926) AC 510); this result is arrived at by putting a just construction on the contract in accordance with an "implication ...... from the presumed common intention of the parties": LORD SUMMER in Bank Line, Ltd. v. Capel (A.) .& Co. (II) (1919) AC 455). If the decisions in "frustration" cases are regarded as instructions of the power and duty of a Court to put the proper construction on the agreement made between the parties, having regard to the terms of which that agreement is expressed and to the surrounding circumstances in which it was made, including any necessary implication, such decisions are seen to be examples of the general judicial function of interpreting a contract when there is disagreement as to its effect. What distinguishes "frustration" cases is that the interpretation involves the consequence that, in view of what has happened, further performance is automatically ended. This is because the frustrating event (such, for example, as war or prolonged delay) must be regarded as introducing a new situation to which no limit can be put. There are of course, many other examples where the Court has to put an interpretation 'on the agreement made, not with the result that the contract is brought to an end by frustration, but with the result that the contract goes on and continues to bind the parties according to its true construction.
131. Bennett, Walden & Co. v. Wood (10), quoted by DENNING, LJ., is an obvious example. The advantage of approaching the topic in this way seems to me to be that it makes plain that in all cases alike the question is really at bottom a question of construction. In my opinion, the appeal succeeds and I move that it be allowed with costs here and below."
132. In case of Davis Contractors, Ltd. v. Fareham Urban District Council (1956 AER 145), it has been held as under:-- "In March, 1946, the appellants tendered for a contract with the respondents to build seventy-eight houses within a period of eight months. The tender was accompanied by a letter which stated that the tender was "subject to adequate supplies of material and labour being available as and when required to carry out the work within the time specified". In July 1946, after further negotiations, a formal contract was entered into between the parties and this incorporated a number of preliminary documents; these were listed in a clause of the contract and, although the tender was specified to be one of them, the letter was not so specified. The contract was to build the houses at a fixed price subject to certain adjustments. For various reasons, the chief of which was the lack of skilled labour, the work took twenty-two months to complete instead of eight months. The appellants were paid the contract price together with stipulated increases and adjustments but they claimed that they were entitled to a greater sum on the basis of a quantum meruit. They contended that the contract price was not binding because either (a) the contract had been subject to an express overriding condition (contained in the letter of March, 1946) that there should be adequate supplies of material and labour, or(b) that owing to the long delay due to the scarcity of labour the contract had been frustrated.
133. Held: the appellants were not, entitled to be paid on the basis of a quantum meruit because (i)the appellants' letter of March, 1946, and the condition stated therein were not incorporated into the final contract of July, 1946 (see particularly p.157, letter H, to p.158, letter I, post, per LORD RADCLIFFE with whose opinion VISCOUNT SIMONDS and LORD MORTON OF HENRYTON agreed).
134. (ii)the fact that both parties to the contract expected that it would be possible to complete the work within eight months did not result in the contract being frustrated when, as events happened, these expectations were not realised with the consequence that the contract became more onerous than the parties had contemplated (Bush v. Whitehaven Port & Town Trustees (1888) 2 Hudson's B.C., 4th Edn., 122, criticised).
135. Basis of the doctrine of frustration considered; see per LORD REID (LORD SOMERVELL OF HARROW concurring) at pp. 152 et seq., post, and PER LORD RADCLIFFE at p. 159 et seq., particularly at p.160, letter D. Decision of the Court of Appeal (1955) 1 All E.R.275) affirmed on the second point but overruled on the first point."
136. In case of Muhammad Ishaq and another v. Mst. Sufia Begum (1992 SCMR 1629) at page 1632 to 1637 of the report it has been held as under:-- "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 frustrated 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.
137. 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.
138. RUSTAM S.. SIDHWA, J---I have read the judgment of my learned brother Abdul Shakur-ul-Salam, J.
139. 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.MA. 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-fulfillment of which discharges the contract."
4. G.H. Treitel in "The Law of Contract", 5 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).
140. 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.
141. 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, the agreement is not fully binding until the event occurs; not. does either party undertake that it will occur. But an agreement subject to a condition precedent may impose some decree of obligation on the parties or on one of them. Whether it has this effect, and if so what 'decree of obligation is imposed, depends on the true construction of the conditions." :5. G.H.L. Fridman in "The Law of Contract in Canada", 1976 Edition, at page ? 72, 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 re for to a term in a contract by virtue of which the contract could be postponed, so la, 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 curtain 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).
142. The learned author states at 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--ful6lment of the 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-fulfillment, there may still hr binding contract upon the parties, depending upon the way in which the innocent party reacts to the breach of condition. A series u: Canadian cases makes this difference very clear, even though the actual determination of the true character of the co-.1ition that under consideration in any given instance may not always be simple and straightforward.
143. 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 fulfillment can be dispensed with so as to leave the contract intact and valid as 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, it 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."
144. In case of Mst. Safia Begum v. Muhammad Ishaq etc (1989 CLC 1915) paragraph 2 of the judgment it has been held as under:-- "Letters Exts. D.W..1/3, Ext.D.2, Ext.D3, Ext.D.4, Exts.D.7 to D.9, Ext.D.W.. 1/5 and Ext.D.W.l/4 are the correspondence between the appellant and the Military Authorities. The same clearly show that the respondents had been requesting them for issuance of a No-Objection Certificate. However, the Army Authorities expressly refused and regretted the same on the ground that the property in dispute stood earmarked for Army Constructions. Therefore, it is proved that the N0-Objection Certificate was refused by the Army Authroities. The question, therefore, arises as to whether the agreement could be performed even without the same. The learned counsel for- the respondents has referred to Mst. Bhagan and 2 others v. Sheikh Muhammad Latif and 2 others (PLD 1981 Lahore 146) to press the point that n r. such No-Objection Certificate is required for completion of a sale.
145. However, in that case the property consisted of "old grant rights". However, in our case it has not been even alleged that the property in dispute falls in that category. Therefore, the law laid down therein is not applicable to our case. In any case the agreement Ext. PW.1/1 makes it clear that the obtaining of a No-Objection Certificate was a condition precedent for performance of agreement.
146. The said condition 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-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 show 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---Objection Certificate was obtained by the appellant up to 14-6-1978 he will withdraw from the bargain/agreement and will be entitled only to the earnest money amounting to Rs.30,000. This undertaking Ext.D.W.-2/1 was admitted by respondent No.2 as DW-2. This undertaking suffices to prove that the agreement stood rescinded on 14-6-78. Even if it is taken that the same 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 Ext.PW.l/1 could not be allowed. The findings of the learned trial Court on issues Nos.2 to 4 are, therefore, reversed.
147. In case of M/s. Mansukhdas Bodaram v. Hussain Brothers PLD 1980 SC 122 at lo 132 of the report it has been held as under:- "To say something further on the subject of frustration of the contract it may be pointed out that the relevant Martial Law in the county had been imposed on 7-10-1958, whereby the Constitution of 1956 was abrogated; the National and Provincial Assemblies were dissolved and an altogether new Order in the country was introduced. On 7-10-1958 (gazetted on 15-10-1958) the Chief Martial Law Administrator issued the following notice (see PLD 1958 Central Statutes page 499):- "(1) Whereas I adjudge it essential for national requirements to exercise jurisdiction within the international boundaries of Pakistan, I, the Supreme Commander of the Armed Forces of Pakistan do hereby give notices as follows.
(2) Martial Law Regulations and Orders will be published in such manner as is conveniently possible. Any person contravening the said Regulations or Orders shall be liable under Martial Law to the penalties stated in the Regulations.
(3) The said Regulations may prescribe special penalties for offences under the ordinary law.
(4) The said Regulations may appoint Special Courts for the trial and punishment of contraventions of the said Regulations and Orders and of offences under the ordinary law.
148. On 10th October 1958, the Chief Martial Law Administrator issued Laws (Continuance in Force)
149. Order, 1958. Article 3 of this Order laid down that "No Court or person shall call or permit to be called in question (i) the Proclamation, (ii) any Order made in pursuance of the Proclamation or any Martial Law Order or Martial Law Regulations". Martial Law Regulation 42 of 1958 was issued on 1/4- 11-1958 and then it was the Martial Law Government itself--(being the Central Government) which issued the relevant notification on 10/14-11-1958 fixing thereunder the maximum price of rapeseeds at Rs.27-8 per maund (i.e. Rs.55 per bag of two maunds). Violation of any price fixed under Martial Law Regulation 42 of 1958 was made a penal offence. In these circumstances it will be too much to expect that the purchasers should have despite the situation above explained gone ahead on 28- 5-1959--(the date up to which the contracts were kept alive by the plaintiffs) or hazarded to go ahead in ignoring that notification and taking risk of facing a prosecution by purchasing the rapeseeds, at the contract price, in violation of (if we can use this term) Regulation price. The risk for prosecution was in this way "real" as distinct from a mere commercial risk of just some financial loss or gain in the bargain. Reference here may be made to section 56 of the Contract Act IX of 1872 which so far as relevant states that "A contract to do an act which after the contract is made, becomes impossible, or by reason of some event which the promisor could not prevent, unlawful, t>c.comcs void when the act becomes impossible or unlawful." In Kisanlal Nandlal and another v.
150. Vithal Nagayya Kandawar (AIR 1951 Nag. 320), it was held that, when under Oilseeds (Forward Contracts Prohibition) Order, 1943 read with rule 81(4) of the Defence of India Rules the performance of forward contract of oilseeds was rendered unlawful, the contract became impossible to be performed or unlawful thereafter and that an impossibility arising from an Act of the Legislature subsequent to the contract discharges the contract from liability. Similar was the position in Jagadish Prosad Pannalal v. Produce Exchange Corporation Ltd. (AIR 1946 Cal. 245), where a contract was rendered void by fixation of a price under the law different from the contract price. It may here be stated that the matter is to be examined in the light of the further principle that a law remains valid unless and until a declaration to the contrary is obtained from a Court of competent jurisdiction and, the same is the position of the statutory notifications and orders. In the face of this state of the, legal position on the subject, and the factual circumstances abovementioned, the act of the purchasers to purchase and lift the goods at contract rates, would have been in violation of Martial Law Regulation 42 and therefore if they refused to undertake that realistic risk of being prosecuted they cannot be said to be guilty of a deliberate breach of a contract. It is to be remembered that doctrine of frustration is not really an exception to the rule that a man must pay damages if he breaks the contract for there can be no default in not doing that which the law prohibits. It may be stated frustration of contract is a developing concept like negligence; its categories are never closed but are as wide as the categories of human conduct. Its effect is immediate, and automatic. It guillotines the contract without the action of either party.
151. The result is that this appeal fails and is dismissed hereby leaving the parties, to bear their own costs.
152. In case of Messrs DADA Ltd. v. Messrs Abdul Sattar & Co. 1984 SCMR 77 at page 79 and 80 of the report it has been held as under:-- "It was, however, contended by the learned counsel for the appellants that notwithstanding the order passed by the District Magistrate it was still open to the sellers to have supplied the goods under any of the modes suggested in their letters dated 26-2-1965. The contention has no force.
153. Firstly, because the letters in question were written by the buyers after the contracts stood already frustrated a day earlier on 25-2-1965 upon the imposition of the ban by the District Magistrate on the said date. The letters of the appellants/buyers dated 26-2-1965 at best were in the nature of fresh proposals as the mode of delivery was sought to be changed contrary to the stipulation contained in the two contracts. Further, the stipulation in the contracts with regard to delivery was that the sellers had to present R/Rs at Karachi to the buyers and payment of 90% of the price was to be made against the R/Rs. Thus, undoubtedly the intention of the parties was that the mode of performance contemplated by them was that the sellers themselves had to despatch the goods by rail to Karachi from any railway station on the Mirpur Line and present relevant R/Rs to the buyers at Karachi before 28-2-65. No exception, in the circumstances, can be taken to the findings of the learned Bench of the High Court that the alternate mode of delivery of the goods ex-stock with other merchants in Karachi, could not have been in the contemplation of the parties or intended by them as a natural or reasonable mode of delivery of the goods."
154. In case of Rana Sheo Ambar Singh v. The Allahabad Bank Ltd. (1961 SE 1790) at page 1794 of the report it has been held as under:-- "There is no doubt that the property mortgaged has been compulsorily acquired in tu& case by the State under the Act. Therefore, S.6 (h) read with S.73 directs that the mortgagee shall proceed in the manner provided in S.73, namely, follow the compensation money, and there is no other way possible for him in view of S.6 (h) with respect to the property which has been acquired under the Act. We have held that sir and khudkashat land and prove land have been acquired under the Act and have vested in the State; therefore the mortgagee is relegated to enforce his rights against the mortgagor in the manner provided in S.73 of the Transfer of Property Act and in no other way. What we say here does not affect that property which is not acquired by the State, for example, property excepted under S.9 of the Act; but where the property has vested in the State by virtue of a notification under S.4 and its consequences under S.6, the only course open to the mortgagee is to follow the compensation money under S.6(h). The Bhumidari rights created under S.18 are not compensation; they are special rights conferred on the intermediary by virtue of his cultivatory possession of the lands comprised therein. The respondent therefore cannot enforce his rights under the mortgage by sale of the Bhumidari rights created in favour of the appellant under S.18 so far as his sir and khudkashat land and grove land are concerned; it can only follow the compensation money as provided in S.6 (h). The argument that Bhumidari rights can be followed as substituted security must therefore equally fail."
155. In case of Barkat Ram v. Anant Ram (1931 Indian Cases 632 at page 633) of the report it has been held as under:- "The doctrine of law, which makes vague contracts incapable of enforcement and which finds expression in section 29 of the Indian Contract Act, rests upon practical common sense. It is obviously impossible for a Court of justice to give effect to a contract, the meaning of which it is unable to find out with reasonable clearness. The principle is firmly established that Court cannot undertake to supply defects or ambiguities according to its own notions of what is reasonable; for this would be not to enforce a contract made by the parties .but to make a new contract for them.
156. As observed by Lord Justice Fry in Davies v. Davies, "it is the function of the Courts of Law to interpret contracts to say whether a contract is or is not reasonable, to say whether it is or is not void, but that it is not the duty of the Courts to make contracts between parties.
157. It is urged on behalf of the plaintiff that if the case on partnership fails, he is, in any case, entitled to the rendition of accounts from the defendant and it argued that the defendant stood to the plaintiff in the relation of agent to his principal. This contention we are unable to accept. The document P.1, discussed above, shows that a partnership was apparently contemplated, but the terms thereof cannot be ascertained. We do not think that the defendant ever became the agent of the plaintiff, and the alternative relief on the ground of agency was, in our opinion, rightly refused by the District Judge."
158. In case of Davies v. Davies (1$87 (36) Civil Appeals 359) at page 395 of the report it has been held as under:-- "The covenant consists of three parts. It is, first, that James Davies is to retire wholly and absolutely from the partnership. With regard to that, no question arises. Secondly, James Davies is to retire (for thus---I read it) so far as the law allows, from the trade of business thereof (that is, of the partnership) in all its branches; and thirdly, James Davies is not to trade, act, or deal in any way so as to either directly or indirectly affect Edward Davies and Edward Albert Davies. I deal first with the second branch of that covenant that James Davies will so far as the law allows retire from the trade and business of the partnership in all its branches. I think that covenant is too vague to be enforced. I think the object of the contracting parties was to leave the law to make the contract between them. I think that it is the function of the Courts of Law to interpret contracts; to say whether a contract is or is not reasonable, to say whether it is or is not void, but that it is not the duty of the Courts to make contracts between parties."
159. In case of Narain Pattro v. Aukhcy Narain Manna and others (Indian Law Reports 12 Calcutta 153) at page 154 of the report it has been held as under:-- "In this second appeal the Vakeel for the appellant has contended that the Judge was wrong in law in holding that S. 26 of the Specific Relief Act. did not apply to the case, and that the plaintiff was barred by clause (e) of S.26 and clause (b) of S.27. It has also been contended that the Court should have decided the matter as to the alternative relief sought in the plaint. It is not necessary for us to express any opinion as to whether the suit was barred by clause (e) of S.21 or clause (b) of S.27 of the Specific Relief Act, for in our opinion the Judge was quite right in saying that the contract as it stood could not be enforced, and that S.26 had no application to the case. The contract, such as it was, was not a complete contract at any time. It was contingent upon the permission of the Court. The Court's permission did not extend to the whole contract as set out in the shuttanamah.
160. The defendants, therefore, could not be compelled to carry out the terms of the original agreement, nor could they have insisted upon the plaintiffs carrying out the terms sanctioned by the Court."
9. Following are the principles of the law which have been laid down in the aforementioned judgments.
(i) That in case an agreement for sale is executed between the parties and the transferor at the time of execution of said agreement is not possessed of complete title in the property agreed to be transferred which title is complete subsequently it can be ordered to be specifically enforced through a decree of the Court including a direction for completing title.
(ii) That in case a contract is to be performed on fulfillment of a mandatory condition of getting NOC and the permission to transfer is to be granted by a third party who is not a party to the contract, and the NOC/permission is , not granted, the contract is guillotined and stands frustrated on account of refusal of such NOC/permission and hence, is not enforcible through a Court of law.
(iii) That a person who enters into an agreement for sale of his property cannot be compelled to perform the contract specifically in case of impossibility of performance of the contract or frustration thereof by act/omission of third party and direction for specific performance whereof will result in causing of unreasonable loss to the said person and will put him in a disadvantageous position.
(iv) That an agreement for sale is to be performed keeping in view the rights of the transferor in the estate agreed to be sold and the Court has no jurisdiction to direct specific performance of contract by directing conversion of the very nature of rights in the tenure to be sold; hence; by varying and creating a new contract altogether, which the parties never visualised at the time of date of agreement.
(v) That while deciding question as to whether contract can be specifically performed or not, the agreement can only by enforced in accord with express or implied terms thereof, and the Court has no jurisdiction to create a new contract altogether without consent of the transferor to his disadvantageous and to direct the performance thereof.
10. Examining the case in hand in the light of the aforementioned settled legal principles we find that the parties to the suit entered into an agreement for sale of plots sub-divided out of the premises held on lease in perpetuity on very nominal rate of rent of Rs.24 only. The parties understood the transfer of rights which had to take place in case the sale was completed. It were the lease rights granted in the year 1905 which were agreed to be transferred. The parties neither agreed, nor could visualise the transfer of the property in question after converting the same into a lease of different nature and character. Similarly, it could not be visualised that the contract shall be performed even if the defendants are put to a disadvantageous position including the loss of more than the amount which they had to receive as a price for the plots to be sold in case the conditional veto is honoured by them. The defendants stood by their commitment. They applied for grant of permission and hence, intimated the Military Authorities to decide the vetoing or otherwise of the proposed transfer in question, which is a condition precedent for performance of the contract as per condition No.4 of the lease violation whereof will result in the termination of their original lease and the executed sale shall also be void. The Military Authorities vetoed the proposed transfer and refused to grant the permission to sell. Subsequent orders/letters Exh.P33,.34, 35, D3 and D4 do not prove that the competent ~ authorities have withdrawn the veto. These documents only show that veto could be withdrawn only if the defendants converted their lease in perpetuity into a lease under Schedule VIII of C.LA Rules, 1937 on payment of prevalent premium and rates of rent. The defendants were not bound to accept the condition either under the contract in question or under the law, hence, they did not accept the same and resultantly, the position even today is that the proposed transfer in question stands vetoed. The agreement in question, hence, stands gilloutined and frustrated. It does not subsist, hence, neither the suit for specific performance of the contract could have been filed nor decreed. Arguments of the learned counsel for the appellant to the effect that the subsequent orders passed by the Military Authorities amount to withdrawal of the previous veto is misconceived and is based upon misreading of the subsequent orders/letters Exhs.P33 to P35 and Exh.D2 to Exh.D4, hence, is repelled.
11. Provision of section 18 of the Specific Relief Act do not apply to the case in hand inasmuch as it is not the case where the transferor was not holding complete title on the date when the agreement for sale was executed which title can be said to have been acquired or completed subsequently or can be directed to be completed by a decree of the Court. It is a case where the transferor had a complete title in the property in question which was agreed to be transferred. However the proposed transfer could not have . been executed/completed without issuance of NOC by the Military Authorities who in this case have vetoed the proposed transfer' in competent exercise of their lawful authority, hence, reference by the learned counsel to the provision of section 18 of Specific Relief Act as well as the cases referred to supra is inapt and is of no help to the appellants.
161. Finding of the learned lower Court to the effect that section 18 is not applicable to this case is, therefore, unexceptionable and is upheld. Argument of the learned counsel for the appellants to the effect that the provisions of sections 21 and 22 of Specific Relief Act are not applicable as the plaintiffs, are entitled to the grant of a decree for Specific Performance of the Contract against the respondents, including a direction to convert their lease from perpetuity into a lease for a limited period on payment of exorbitant premium of rate of rent under Schedule VIII of C.LA. Rules, 1937 is also misconceived. The agreement is to be performed in terms it was agreed upon expressly and impliedly at the time it was entered into on 3-12-1979. On that date the nature of the property to be transferred was lease rights held in perpetuity and the defendants never agreed or intended to agree that the premises shall be converted into a new type of lease altogether and,, thereafter the agreement shall be enforced in relation thereto. Even otherwise an agreement for specific performance which results in putting the transferor to a disadvantageous position without any default on his part is not enforcible as per provision of section 22 of the Specific Relief Act read with Explanation No.1 and II thereof. The agreement for sale is also not liable to be performed on the ground of impossibility and in case this Court directs the specific performance of the agreement for sale and grants a decree in favour of the plaintiffs, it would amount to creation ' of a new contract altogether viz. the nature of the tenure to be transferred as well as the terms of the lease regarding rest of the property which shall be left untransferred with the defendants. This cannot be legally done by this Court. The above view taken by us is, fully supported by the cases cited by the learned counsel for the respondents, referred to above. We, therefore, hold that the trial Court has rightly held that the agreement for sale in question stands terminated/frustrated and is not enforcible and, hence, no decree for specific performance can be passed in favour of the plaintiffs as per provisions of sections 21 and 22 of the Specific Relief Act. No other point has been argued by the learned counsel for the appellants. The findings rendered by the trial Court on all the issues decided against the plaintiffs, therefore, are quite in accord with facts and law and, hence, are upheld.
12. Before parting with this judgment, we have however, observed that admittedly the defendants have received an amount of Rs.10,000 as earnest money from the plaintiff No.1 vide receipt/agreement for sale dated 3-12-1979. It has been held by the learned trial Court that there was a valid agreement for sale executed, which finding has not been challenged before us and we are of the view that both the parties intended to perform their part of the contract but the sale- deed could not be executed as the proposed transfer has since been vetoed by the Military Authorities. The contract, therefore, stood terminated/rescinded/frustrated. Neither of the parties, hence, being at fault, the defendants are not entitled to retain the amount of Rs.10,000 received as earnest money, therefore, are liable to refund the same. Above view is in accord with the principle that while administering justice the Court should ensure that whatever is due of a party to a lis must be given to him as held in case of Allah Ditta v. Barkat Ali and three others (1992 SCMR 1974) wherein at page 1976 of the report it has been held as under:- "As long as 1963 it was laid down by this Court in the classic statement of law in `Imtiaz Ahmad v.
162. Ghulam Ali etc." (PLD 1963 SC 382) at page 400 as-follows: " .... the proper place of procedure in any system of administration of justice is to help and not to thwart the grant to the people of their rights. All technicalities have to be avoided unless it be essential to comply with them on grounds of public policy. Any system which by giving effect to the form and not to the substance defeats substantive rights is defective to that extent. The ideal must always be a system that gives to every person what is his."
163. Learned counsel for the respondents has also no objection to the return/refund of the aforementioned amount of Rs.10,000 and hence modification of the decree is to that extent.
13. Resultantly, we see no force in this appeal to the extent of claim of the appellant for grant of decree for specific performance of the contract and, therefore, the appeal is partly dismissed and judgment and decree of dismissal of the suit passed by the learned trial Court is affirmed. However, we partly accept this appeal and pass a decree for payment of Rs.10,000 in favour of the appellant No.1 against respondent No.1 and to this extent modify the decree passed by the learned trial Court.
164. As complicated legal questions were involved in this case, the parties are left to bear their own costs.
165. We appreciate the valuable assistance rendered by both the learned counsel for the parties.