This is a suit for specific performance of the contract and for damages.
The case of the plaintiff in brief is that defendants who are sisters inter se are co-owner of property plot of land bearing Survey No. 1, Sheet NO.K.G. 8 situated at Ghulam Hussain Qasim Quarters, Kharadar, Karachi measuring 4546 square yards with building and structures thereupon (hereinafter referred to as the said or the suit land). The plaintiff had entered into agreement for the purchase of the said land with the defendants vide sale agreement dated 13-2-1980 @ Rs.800 per square yard for a total consideration of Rs.36,36,800. The defendants received amount of Rs.3,75,000 towards part payment of the said consideration. The said property was, and is still in occupation of M/s. Bengal Oil Mills Ltd. As tenant. The defendants simultaneously with signing of the agreement also executed a power of attorney in favour of the plaintiff in order to enable him to obtain possession from the said tenant directly. Under the agreement the defendants are required to obtain Capital Gain Tax Clearance Certificate from Excise and Taxation Department in order to execute the sale deed in favour of the plaintiff. The time for completing for sale was fixed in agreement as four months which could be extended by another two months by mutual agreement. The balance of the sale price was to be paid to the defendants at the time of registration before the Registrar. The defendants failed to get Capital Gain Tax Clearance Certificate from Excise and Taxation Department till the Gain Tax was abolished by the Sindh Finance Act, 1986. While abolishing the Gain Tax, Government enhanced the stamp duty of registration of sale deed from 6 to 8% and also increased the valuation of the property for the purpose of registration from Rs.800 to Rs.1,800 per square yard. There was lot of exchange of correspondence between the parties. Defendants in first phase of correspondence demanded the balance of the sale price, but the plaintiff insisted that they should first obtain Capital Gain Tax Clearance Certificate so the sale deed be executed. After abolition of the Capital Gain Tax there arose another issue between the parties as the plaintiff demanded that due to the delay in obtaining Capital Gain Tax Clearance Certificate plaintiff has been put to loss due to increase in stamp duty and the value of the land for the purpose of registration. Plaintiff also demanded that defendants should share his additional burden. Though there was lot of correspondence between the parties but this issue could not be resolved. The defendants, therefore, vide letter dated 23-9- 1986 which is Exh.8/20 called upon the plaintiff to complete the sale on or before 21st October, 1986.
The plaintiff claimed that he had not received the said letter and there was further correspondence between the parties. Vide letter dated 21-12-1987 Exh.8/40 the defendants informed the plaintiff that agreement of sale stood cancelled, revoked and terminated. The plaintiff thereafter filed present suit on 25-2-1988 through his duly constituted attorney Baseer Hasan in whose favour he executed irrevocable power of attorney. During the pendency of the suit plaintiff died and therefore, his legal heirs were joined as plaintiffs in the suit as such, amended plaint was filed. Legal heirs of deceased plaintiff also executed power of attorney in favour of said Basseer Hasan.
3. Defendants admitted in their written statement the execution of sale receipt, receipt of part payment of sale price and execution of power of attorney in favour of the plaintiff to get the possession of the suit property. They however claimed that obtaining of Capital Gain Tax Clearance Certificate was not requirement of law at the time of issuance of contract. It is contended that plaintiff has adopted delaying tactics and did not perform his part of contract within stipulated period. It is further contended that suit is time-barred, and plaintiff has abandoned their claim as they have no money to pay the sale price and they have surrendered their claim in favour of his attorney Baseer Hasan.
4. On the pleading of the parties Court framed following issues:--
(1) Whether the defendants executed Agreement for sale dated 13-2-1988 in respect of the suit property in favour of the plaintiff and the same is still valid and subsisting?
(2) What are the terms on which the sale was to be effected by the defendants in favour of the plaintiff particularly relating to payment of balance sale consideration, obtaining of capital gain tax, vacant possession, marketable title and the period for completion of sale transaction?
(3) Whether the time was the essence of contract and whether the defendants failed/were unable to execute the sale deed of the property in suit in terms of the contract and if so, what is the effect?
(4) Whether the defendants committed breach/avoided to perform their part of the contract and failed to obtain capital gain tax clearance certificate from the Excise and Taxation Authority and if so, what is the effect?
(5) Whether the defendants were required to obtain capital gain tax clearance certificate before execution of a sale deed in favour of the plaintiff?
(6) Whether on abolition of the capital gain tax under Sindh Finances Act, 1986, the rate of the stamp duty and registration charges stood increased by 2% and 1% respectively, if so, its effect?
(7) Whether on abolition of capital gain tax under the Sindh Finances Act, 1986 the Government fixed the value of the properties of different areas on different rates for the purposes of charging the stamp duty, if so, its effect?
(8) Whether the plaintiff is entitled to specific performance of the contract of sale of property in suit and also to the payments of Rs.72,736, 3,63,680 and Rs.45,460 or any other amount as compensation and/or damages on account of enhancement of stamp duty, and registration charges due to delay in the performance of the contract by the defendants?
(9) Whether the plaintiff, in the alternative or otherwise, is entitled to the payment of Rs.62,71,000 by way of compensation and refund of the earnest money with interest thereon?
(10) To what relief, if any, the plaintiff is entitled?
(11) What should the decree be?
(12) Whether the plaintiff was ready/willing to complete sale or used defendant's difficulties with Excise Department simply to delay sale and if so its effect?
(13) Whether the suit is time-barred?
(14) Whether the plaintiff has assigned/transferred his right to the attorney, if so, its effect?
5. I have gone through the evidence on record and also considered the arguments of the counsel appearing for the parties. My findings and reasons recorded on said issues are as under.
6. Plaintiff's have examined their attorney Baseer Hasan, Ghulam Dastagir, Sub-Registrar and Shabbir Hussain, Assistant Inspector Taxation. The defendants examined attorney Ibrahim.
7. Issue No. l is in two parts. First part is whether defendants executed agreement for sale dated 13- 2-1980 in respect of the suit property in favour of the plaintiff. There is no dispute with regard to this issue. Execution of sale agreement is admitted by the defendants in the written statement as well as by their witness Ibrahim. Agreement has been produced by the plaintiff as Exh.5/1.
8. Second part of the issue is whether the same (sale agreement) is valid and subsisting.
Defendants have raised number of pleas to show that this agreement was neither subsisting nor valid at the time of institution of the suit. Separate issues have been framed on this plea and findings on the second part of this issue to be dependent on my findings on other issues. However, for the reasons to be recorded while dealing with other issues my finding is in affirmative on this part of Issue No. l .
ISSUE N0.2:
9. The term on which sale was to be effected has been spelt out in sale agreement Exh.5/1 Article 3 of the sale agreement reads "vendors shall make out a marketable title to the said property free from all encumbrances, charges", burdens, liens and claims of any nature whatsoever.
10. Article 5 reads: "vendor shall obtain Capital Gain Tax Clearance Certificate from Excise and Taxation ' L' Division required for registration of the sale-deed of the said property in favour of the purchaser.
11. Article 6 reads "the sale of the said property will be completed within a period of four months from the date hereof, provided time for completion of the sale will be extended by mutual consent for a period not exceeding two months, thereafter and time as provided will be of the essence of this agreement".
12. In regard to payment of sale price Article 7 provides "on completion of the sale in the manner aforesaid the vendors shall execute the sale-deed of the said property in favour of the purchaser and/or his nominee or nominees and on such execution the purchaser shall pay to the vendors, the entire balance of the consideration, after deducting the earnest money paid, before the Registering Authority by Bank pay order and the vendor shall appear before the Sub---Registrar, Karachi to admit execution of the sale-deed and to acknowledge receipt of the consideration".
13. As regards vacant possessions Article 4 of the agreement reads that "the vendors have informed the purchaser that the entire property is let out to M/s. Bengal Oil Mills Ltd., and is being used as godowns and that on completion of sale in the manner hereinafter appearing, the vendor shall cause the tenants to attorn to the purchaser. If required by the purchaser, the vendor, pending completion of the sale, will authorise the purchaser by power of attorney to take steps against the tenants only for ejectment and/or to negotiate with the tenants for vacating the property and the purchaser will bear and pay all costs, charges and expenses including Advocate's fees for ejecting the said tenants and after ejectment of the tenants of vacation by the tenants the purchaser shall take over possession of the property as tenants without rent.
Article 8 provides the possession of the property shall be by attornment of the tenants or as stated in para.4 hereof and all the documents of property in possession of the vendor shall be delivered to the purchaser. Issue No.2 stands replied in the above terms of the Sale Agreement.
ISSUE N0.3
14. It is contended by the defendants that the time was essence of contract. As pointed above the time fixed for the -completion of the sale under the agreement as per Article 6 of Agreement was initially 4 months which could be extended by two months with the consent of parties and it was further laid down that the time was essence of the contract. Admittedly, the sale was not completed within this stipulated time. However admittedly the period of completion of the contract was extended by mutual agreement of the parties vide endorsement on Exh.5/4 to the end of November, 1980. In their letter Exh.5/i0 dated 31-8-1981 the defendant's Advocate informed plaintiffs that his clients would be obtaining the required Capital Gain Tax Clearance Certificate and further asked the plaintiff to send the draft of the proposed sale deed for approval. It is admitted h) Mr. Ibrahim attorney and witness of defendants that for the first time the defendants applied for Capital Gain Tax Clearance Certificate on 6-3-1982. It is also admitted that defendants were unable to obtain Capital Gain Tax Clearance Certificate from the authroities till this tax was abolished on 30-6-1986 by the Sindh Finance Act, 1986 because the Taxing Authorities were demanding Rs.22,00,000 as Capital Gain Tax from the defendants which they were unable to pay.
By their letter dated 23-11-1986 produced by the defendants as Exh.8/24 the defendants extended the time for completing sale-deed uptill 21st October, 1986. The plaintiffs claim that they did not receive this letter. By their letter Exh.5/37 dated 21-12-1987 the defendants informed the plaintiff that the sale agreement has been cancelled, revolved and terminated due to their continuous negligence, default and failure to complete obligations and formalities.
15. It is admitted by Mr. Ibrahim witness for the defendants that all the letters written by their Advocate produced either by them or by the plaintiffs were issued under the instructions of the defendants and were correct.
16. From the above correspondence it is clear the time for completion of the contract was extended by the defendants from time to time either explicitly or by implicitly and there is no evidence to show that this extension was with the consent of the plaintiffs, except in case of first extension. The question that now arises is whether under such circumstances the time can be considered as essence of contract as mentioned in original sale agreement.
17. It is settled law that in case of contracts for sale of immovable property the presumption is the time is not the essence of the contract unless the parties make it so by the express agreement in the contract itself. No doubt in the instant case under Article 6 of the sale agreement period of four months was fixed for the completion of the sale which could be extended by two months with mutual consent. This agreement of sale was executed on 13-2-1980. The period of six months as stipulated expired on 13-8-1980. However, as pointed earlier by the endorsement on Exh.5/4 the parties extended this time up to the end of November, 1980. This time was being extended from time to time. As pointed earlier the completion of the sale agreement was dependent upon obtaining the Capital Gain Tax Clearance Certificate by the vendors. According to Mr. Ibrahim, witness and attorney for the defendants, they applied for this Certificate for the first time on 6-3- 1982. Admittedly, the defendants could not obtain this certificate which was done away with on 30- 6-1986 under the Sindh Finance Act of 1986. There was also exchange of the proposed sale deeds between the parties under their letters dated 1-11-1981 Exh.5/15 and under letter dated 6-2-1982 Exh.5/17 letter dated 30th September, 1986 which is Exh.5/24, the defendant's Advocate extended time for completion of sale up to 21st October, 1986. By letter Exh.5/28 which is also dated 23-3-1986 the defendants extended time up to 15th October, 1986. The plaintiff denied to have received this letter and therefore a copy of this letter which showed the date of completion on 21-10-1986 was sent to them alongwith letter dated 9-3-1987 which is Exh.8/30. By this time the period fixed in the letter dated 23-11-1981 Exh.5/20 had already expired. The defendants have riot produced any evidence to rebut the contention of the plaintiffs that they did not receive this letter of 23-11-1986.
17-A. The question the time was essence of contract was considered in PLD 1962 Supreme Court 1 in the case of Abdul Hameed v. Abbas Bhai, Abdul Hussain Soda Water Wala. In this case on 7th January, 1949 the vendor entered into sale agreement with vendee under which the payment was to be made within two months subject to vendee's obtaining Certificate from Income Tax.
Authorities and Custodian Evacuee Property. On 4th September, 1950 the vendor notified the vendee that he had obtained the requisite certificate. The vendee asked the vendor to produce the document for their inspection which he refused. Thereupon the vendor filed a suit for specific performance. The vendor resisted the suit on the plea that there was delay on the part of the vendee to perform his part of contract. In that case their lordships had held that income Tax Certificate and Custodian Certificate were not the documents required under section 55 of Transfer of Property Act. The vendee was not entitled to insist on examining such document, but he had only to be satisfied that the vendor had the same. Their lordships have further held, that the delay in obtaining certificate was caused by the vendor therefore vendor was not entitled by notice to the vendee to fix the period of only 10 days for completing execution of conveyance. The vendor at this stage was not entitled unilaterally to fix the time of 10 days for the performance of contract.
The delay if any in the carrying into effect the contract had been due to his conduct. The appeal of the vendee against dismissal of the suit by the trial Court was allowed. Their lordships have also quoted from Greensevin reported in 1913 Ch.D 589. The observation of Fry, J.-- in that case is reproduced in the following passage:-- "What right then had one party to limit a particular time within which an act was to be done by the other? It appears to be that he had no right to do, so unless there had been such delay on the part of other contracting party, so as to render it fair, that if steps were not immediately taken to complete, the person giving notice should be relieved from his contract."
Their lordships further held that equity will only grant specific performance if under all the circumstances it is just and equitable to do so.
18. In 1983 SCM R 559, it has been held by their lordships that where time was essence of contract, party guilty of preventing completion of contract within time, could not plead, that time was essence of contract. In the instant case also though the time was fixed in the agreement for the completion of contract, the vendors could not fulfil their obligations for nearly six years.
19. In 1992 M LD 1135 (Karachi) the learned Judge of this Court has observed "under the agreement of sale the transaction had to be finalised by 30-6-1975 but there were two endorsements at the bottom of the sale-deed which showed the time was extended up to 30-8-1975 and up to 30-9- 1975. This by itself would show that the time was not essence of contract". In PLD 1960 (W.P.) Karachi 517 it has been held "that the question whether time is essence of contract depends upon the intention of the parties, the surrounding circumstances and nature of contract. The mere fact, that certain time is specified for the payment of the amount in consideration of which the property is transferred, will not show the time as essence of contract. So far the contract relating to land are concerned, the time fixed for completion of transaction is not considered as essence of contract".
20. As pointed earlier, no doubt the time was fixed in the agreement for completion of the contract but even under endorsement on the letter Exh.5/4, this time was extended beyond the fixed period viz. Up to November, 1980. Subsequently, the, time was extended up to 21st October, 1986, as such time cannot be considered to be the essence of the contract in the instant case.
ISSUE NO. 4
21. Article 5 of the agreement required the defendants to obtain Capital Gain Tax Clearance Certificate from Excise and Taxation Department. Admittedly, they never obtained this Gain Tax Clearance Certificate till this requirement was done away with by the Sindh Finance Act, 1986. The evidence of Mr. Ghulam Dastagir witness No. l for the plaintiff Exh.6 shows that the production of Capital Gain Tax Clearance Certificate was necessary for the registration of the Department as per orders of Secretary to the Government of Sindh which is produced as Exh.6/1 dated 15-3-1979 and as per instructions issued by the Commissioner, Karachi Division which is produced as Exh.6/2 Mr. Syed Shabbir Hussain witness No.2 for the plaintiff Exh.7 who was working as AETO in the Taxation Department states that production of Capital Gain Tax was necessary for the registration of sale- deed from 1979 to 1986. Under the circumstances, because of this failure of the defendants to obtain the requisite Certificate uptill 30-6-1986, the option vested with the plaintiff to cancel the contract and sue for damages but instead the plaintiff had kept the contract alive and has sued for the performance of contract.
22. In view of the above facts my finding is in affirmative on the issue to the extent that the defendants failed to obtain the Capital Gain Tax Clearance Certificate for nearly six years and its consequence will be that thereafter they could not fix any time unilaterally to be the essence of contract.
ISSUE N0.5:
23. The contention of the defendants is, that they were not legally required to obtain the Capital Gain Tax Clearance Certificate before the registration of the sale-deed. In fact both the plaintiffs witnesses Mr: Ghulam Dastagir and Syed Shabbir Ahmed have admitted in the cross-examination that they do not know of any law which prevents the registration of the sale deed without obtaining the prior Capital Gain Tax Clearance Certificate. However, both the witnesses have asserted that no sate-deed was registered without the Capital Gain Tax Clearance Certificate from 1979 to 1986.
They have relied upon the order of the Chief Secretary Government of Sindh which has been produced as Exh.6/1 which shows that the Martial Law Administrator Zone-C, had been pleased to order that Capital Gain Tax wherever levyable shall be recovered from the assessee before registration of the sale-deed. He also produced order of the Inspector General Registration Exh.6/2 whereby in view of the order of Martial Law Administrator Zone-C all the Registering Authorities in Karachi were directed not to register any sale-deed without Clearance Certificate. Besides even under the agreement of sale under Article 50 the defendants were required to obtain this Certificate. Defendant's witness Ibrahim has admitted in his cross---examination that the defendants had undertaken to obtain Capital Gain Tax Clearance Certificate from the Excise Department before registration of the sale---deed. In view of the documentary and oral evidence my findings on this issue is in affirmative.
ISSUES NOS.6 and 7:
24. In para.21 of the affidavit-in-evidence, the plaintiff's witness Baseer Hasan has stated, that while abolishing the Capital Gain Tax the Government of Sindh under Finance Act, 1986 raised the rate of stamp duty to 8 % as against 6 % . The Government also fixed the valuation of properties in different areas at different rates in the valuation table for the purpose of charging stamp duty irrespective of the price agreed between the parties. This assertion is not denied by Mr. Ibrahim witness for the defendants in his affidavit in evidence which is Exh.8/1-B. In para.19 of the plaint similar assertion has been made by the plaintiff. This para. Is replied by para. No. 19 of written statement in which it is only stated that the stamp duty at 8% was not payable on the valuation fixed by the Government irrespective of agreed price. It is asserted that these could be challenged. In other words the allegation of the plaintiff that the stamp duty were raised to 8 % and that the Government had fixed value of property at different rates in different areas in valuation table has not been specifically denied. Mr. Ghulam Dastagir, Sub-Registrar Exh.6 has stated that after abolition of Gain Tax, Government introduced valuation table for the purpose of valuation of properties of different areas and of different categories to assess stamp duty and registration fee as per section 27-A of Stamp Act, 1899. He has produced a notification dated 1st July, 1986 as Exh.6/3. He further stated that subsequently valuation Table was again revised vide notification dated 18th November, 1986 Exh.6/4 and in the years 1989 and 1990 it was again revised vide Exhs.6/5 and 6/7.
Mr. Ghulam Dastagir has further stated that the Sub-Registrar is bound to follow the Valuation Table issued by the Government and assess Stamp Duty accordingly. His this statement is not challenged in the cross-examination. The document Exh.6/7 produced by him is a notification of the Government of Sindh dated 6-6-1990 whereby the Stamp Duty in Urban Area was raised from Rs.8 to Rs.9 and in the Rural area from Rs.6 to Rs.7. No evidence in rebuttal has been produced by the defendants.
ISSUES NOS. 8 and 9:
25. The plaintiff has prayed for the specific performance of the contract of sale or property in suit and also for the payment of Rs.7,2,736, Rs.3,63,680 and Rs.45,460 as compensation on account of enhancement of Stamp Duty and Registration Charges due to delay in the performance of contract by the defendants and in alternative he has prayed for the payment of Rs.62,71,000 by way of compensation and refund of the earnest money with interest thereupon.
26. I have already held that the defendants could not obtain the Capital Gain Tax Clearance Certificate as required under the agreement of sale until it was abolished on 30-6-1986 by the Sindh Finance Act, 1986.1 have also held that alongwith abolition of the Capital Gain Tax the Government simultaneously enhanced Stamp Duty and fixed the valuation of the property for the purpose of registration and Stamp Duty. The plaintiff in para. 21 of the plaint has calculated the additional amount payable by him in the following manner:--
(a) Additional Stamp Duty at 2 % on original sale price which comes to Rs.72,736.
(b) The difference on account of Stamp Duty and registration charges payable on the difference between agreed price and the value fixed under the law in the Valuation Table amounting to Rs.3,66,680 and Rs.45,460 respectively. The defendants in the written statement in paras. 20 and 21 have denied the averments made by the plaintiff. He has shifted the blame of the delay on the plaintiff but has not specifically denied the amounts calculated by the plaintiff payable by him due to enhancement of the Stamp Duty and the valuation of the property.
27. I have already held that the delay in obtaining Capital Gain Tax Clearance Certificate which was necessary, under the contract as well as under the practice followed in the Registration Office before the registration of the sale-deed, was on the part of the defendants. The plaintiff had the opportunity to cancel the contract and sue for damages but he has shown his preference for the enforcement of specific performance of the contract. This is evident from the correspondents that ensued between the parties, after June, 1986. The defendants in their letters called upon the plaintiff to complete the same and plaintiff also showed his willingness to complete the sale, but wanted some reasonable time and also wanted defendants to share additional burden upon him.
"If in case of contract voidable on account of promises failure to perform his promise at the time agreed, the promisee acts upon performance of such promise at any time other than that agreed, the promise cannot claim compensation for any loss occasioned by the non--performance of the promise at the time agreed unless at the time of acceptance he gives notice to the promisor of his intention to do so."
28. In the instant case time was fixed in the agreement for the performance of the contract which was extended by mutual consent to the end of November, 1980. Admittedly the contract could not be performed within the specified time and had become voidable at the option of the purchaser, but he has chosen to insist upon the performance of the contract at the time other than agreed, therefore, he is not entitled to any compensation. In view of this clear provision of law specially as he has not given any such notice to the promisor viz. The defendants, though he had been asking them to share the additional burden put upon him, he is not entitled to compensation in addition to specific performance of contract.
29. I have already held that because of the conduct of the parties, the time ceased to be essence of contract but that fact alone would not entitle the plaintiff to claim such compensation. No doubt the plaintiff is saddled with additional burden of Stamp Duty and Registration Fee but at the same time the value of the property has also increased and he would be adequately compensated for the loss that he may suffer due to additional burden. It is admitted by Mr. Ibrahim witness for the defendants, that in 1989-90 he received an offer of Rs.2,000 per square yards for the suit land.
Therefore, equity and justice requires that the defendants should not be burdened with the additional amount payable by the plaintiff, for Stamp Duty and Registration Fee in addition to specific performance of the contract.
30. The plaintiff has calculated the damages which he claims in case specific performance of the contract is refused in para. 26 of the contract. He has calculated Rs.45,45,000 to be difference of the market price as on 13-2-1980 and on the date of the filing of the suit being Rs.1,000 per square yard. He appears to have based this difference on the increase of the price for the purpose of valuation. The suit was filed on 25-2-1988 and as pointed above in 1989 the witness of the defendants was admittedly offered Rs.2,000 per square yard. This claim of the plaintiff therefore does not look unreasonable. He has claimed 3,75,000 which was paid by him to the defendants at the time of the agreement in earnest money. The receipt of this amount is admitted by the defendants. In case the specific performance of the contract is refused he is entitled to receive back this amount also alongwith interest.
31. The plaintiff also claims Rs.1,50,000 on account of litigation against the tenants up to Supreme Court. There is no detailed evidence produced by the plaintiff to show how much he spent upon the litigation. Under sale agreement the plaintiff had agreed to proceed against the tenant for ejectment at his own cost. Therefore, he is not entitled to receive this amount.
32. The plaintiff has also claimed Rs.12,00,000 as compensation on account of mental torture and agony caused to the plaintiff for withholding the performance by the defendants. This claim is denied by the defendants in para.25 of the written statement. However, the burden was upon the plaintiff to show that they actually had suffered mental torture and agony for which Rs.12,00,000 as compensation could be awarded. It may be pointed the original plaintiff had died because he was admittedly ailing even before the registration of suit and therefore the suit was filed through his attorney. None of the legal heirs have been examined to prove this claim of the plaintiff. As such in my opinion the plaintiff is not entitled to claim this amount as compensation.
33. The third question that requires consideration in these two issues is whether the plaintiff is entitled to the specific performance of the contract. Section 12 of the Specific Performance Act provides, the cases in which Specific Performance is enforcible at the discretion of the Court.
Clause C of this section provides specific performance of contract may in the discretion of the Court be enforced when the Act agreed to be done is such that pecuniary compensation for its non-performance would not afford adequate relief. Illustration to clause C in this section, shows that where A contracts with B to sell his house for Rs.1,000, B is entitled to decree directing A to convey house to him, he paying the purchase money.
34. The explanation to this section provides "unless and until the contrary is proved the Court shall presume that the breach of contract to transfer immovable property cannot be adequately relieved by compensation in money, and the breach of contract to transfer movable property can be thus relieved.
35. In the Specific Relief Act by Sardar Muhammad Iqbal, 1981 Edition at page 138 the learned author has relied upon the case of New Beerbhoom Coal Co. v. Bulla Ram Mahata reported in ILR 5 Cal. 932
(PC) wherein reliance is placed on the first illustration to the clause C and it has been held that there is presumption that the breach of the contract to transfer of immovable property cannot be adequately relieved by compensation and therefore specific performance should be enforced.
36. On the same page, the learned author has observed that Court of equity will decree a performance of the contract of land, because damages at law, which must be calculated upon general value of the land may not be complete remedy to a purchaser, to whom land may have a peculiar and special value. The locality, character vicinage, soil easement or accommodation of the land generally may give a peculiar and special value in the eyes of purchaser, so that it cannot be replaced by other land of the same precise value, but not having the same precise local convenience or accommodation and therefore a compensation in damages would not be adequate relief.
37. Therefore, in my view the plaintiff is entitled to Specific Performance of the contract only. Both the issues are answered accordingly.
ISSUE NO. 12:
38. I will deal with this issue first as it also affects the entitlement of the plaintiff to obtain the decree of the specific performance of the contract.
39. I have already pointed out, that the dealings between the parties in the shape of correspondence was in two phases. In the first phase the defendants first insisted upon the plaintiff to make payment of balance of the sale price but the plaintiff instead had insisted that first they should obtain the Capital Gain Tax Clearance Certificate whereafter at the time of registration the balance amount was payable to the defendants as per the terms of the said agreement. In the letter Exh.5/10 dated 3-9-1981 the defendants Advocate stated in para.2, that Mr. Fazlur Rehman plaintiff was ready and willing to complete sale of the above property on terms contained in the agreement and that his clients will be obtaining the required Gain Tax Clearance Certificate and in the meantime proposed sale-deed may be sent to the defendants' Advocate for their approval. I have already pointed that the proposed sale-deed Exh.5/14 was sent to the defendant's Advocate vide the letter Exh.5/13 dated 21-10-1981. Admittedly for the first time the defendants applied for Capital Gain Tax Clearance Certificate on 6-3-1982 but they did not get the Certificate till this Capital Gain Tax was abolished by the Sindh Government under Sindh Finance Act, 1986.
Thereafter, the second phase of correspondence shows that defendants called upon the plaintiff to complete the sale contract. The plaintiff however required sometime and also asked the defendants to share the burden of additional taxation. No doubt it has been held that the plaintiff was not entitled to get the amount from the defendants towards this additional tax burdened.
However, his request cannot be considered to be absolutely unreasonable. He did show his willingness to complete sale-deed. He also requested for reasonable time as more than six years had passed and naturally he required sometime to arrange for such huge amount of about Rs.33,00,000. Even the witness for the defendants Mr. Ibrahim has admitted that Mr. Fazlur Rehman never refused to execute sale-deed. Therefore my finding is in affirmative, so far as willingness of plaintiff to complete the sale-deed was considered there is no evidence to show that he caused defendant's difficulties in the Taxation Department to delay the sale.
40. Even before the abolition of the Capital Gain Tax the plaintiff vide letter Exh.5/23 dated 20-8- 1985 called upon the defendants to obtain Capital Gain Tax Certificate and complete the sale- deed. Under letter Exh.5/24 dated 30-9-1986 the defendants called upon the plaintiff to complete the sale before 21st December, 1986. In reply by letter dated 10-10-1986 Exh.5/25 the plaintiff informed the defendants that defendants had taken more than six years to show their intention to finalise the transaction and it was unreasonable and unjustified to ask the plaintiff to finalise within any unilateral specified time and asked for some reasonable time. The defendants claimed to have sent a letter dated 23-9-1986 Exh.5/20 under which the plaintiff was asked to complete sale before 21st October, 1986. This letter is denied by the plaintiff to have been received and a copy of it subsequently sent by letter dated 9-3-1987 Exh.8/30 to the plaintiff after the time for performance of the contract had expired. Even the witness for the defendants have admitted that the plaintiff never refused to execute the sale-deed. All the letters which have been brought on the record show that plaintiff was always willing to complete contract but the delay if any was on the part of the defendants.
41. The defendants have relied upon PLD 1986 Supreme Court page 497 wherein their Lordships have held, that in order to obtain the relief by way of specific performance of contract, the plaintiff has first to allege and prove, that he was ever ready and willing to perform his part of contract as really was and not in the way he thought. Similar views were taken in cases reported in AIR 1932 Lahore 265, AIR 1948 Cal. 147 and AIR 1950 Nagpur 238.
42. The evidence of witness Mr. Basir the letters exchanged between the parties, the admission of the defendant's witness Ibrahim and the final notice dated 20th January, 1988 Exh.5/38 clearly show, plaintiff's willingness and readiness to perform his part of contract. In view of the facts and the evidence on record, in my opinion, the plaintiff is entitled for specific performance of his contract as he was ready and willing to complete the same.
ISSUE N0.13:
43. Under Article 113 of the Limitation Act, the period of limitation for specific performance of contract is three years from the date fixed for performance of contract or if no such date is fixed; when the plaintiff has notice that its performance is refused.
44. Originally date fixed under the agreement was four months from the date of the agreement viz. 13-2-1980 which could-be extended by two months which means the date of performance would be 13-8-1980. If the time of limitation is to run from this date, then the suit is hopelessly time-barred.
45. In the Limitation Act by Shaukat Mehmood, at page 563 the learned author has relied upon the case reported in AIR 1922 PC 178 and has observed that where time under the contract be extended, the new date substituted, was the date fixed for the performance. Admittedly the defendants lastly fixed the 21st October, 1986 to be the date of performance.
46. The learned author also on the same page, quoted from AIR 1965 Madras 24, where though the cause of action accrued to A on the date of agreement, no suit could have been brought on this cause of action, till 8-1-1953, when cause of action was complete. It is further observed that a cause of action arises for a party under a contract only when as contemplated by the parties, the obliger is in a position to perform his promise effectively". In the instant case also the defendants could not perform their part of contract till 30-6-1986 when the requirement of production of Capital Gain Tax was done away with.
47. Mr. Ibrahim in his affidavit in evidence in para.21 has stated that the defendant's through their Advocate wrote to the deceased plaintiff on 20-9-1987, reiterating that the contract for sale of suit property stood terminated due to his failure to complete the sale.
48. The plaintiff filed the suit on 25-2-1988. If we take the date from which the period of limitation is to run from any of the abovementioned three dates viz. 30-6-1986 when the defendants could perform his promise after the w abolition of the Capital Gain Tax or from 21-10-1986 when the defendants lastly fixed the date for completion of the sale or from 20-9-1987 when the contract was terminated by the defendants the suit would still be within time viz. Within three years. My findings on Issue No. 13 is therefore in negative.
ISSUE N0.14:
49. There is nothing on record to show, that the plaintiff had assigned/transferred his right to the attorney Mr. Basir Hasan, except that irrevocable power of attorney was executed in his favour.
Under this power of attorney whatever acts were done by attorney were on behalf of and in the name of plaintiff. Even D.W. Mr. Ibrahim has admitted in the cross-examination, that he had no knowledge about Mr. Basir Hasan being the nominee of the plaintiff. Even otherwise, under clause 7 of the sale agreement Exh.5/1 the vendors undertook to execute the sale deed of property in favour of the purchaser and/or his nominee or nominees. My finding therefore is in negative on this issue.
ISSUE NO. 10:
50. The plaintiff has filed the suit for specific performance of the contract and damages or in alternative. For damages. I have already held, that plaintiff is not entitled to additional damages, if his prayer for specific performance is allowed. I have also held as to what amount he would be entitled to get as damages, if his prayer for specific performance is allowed. I have also held as to what amount he would be entitled to get as damages, if his prayer for specific performance is refused.
51. The case-law which has been discussed above clearly shows, that the plaintiff, before seeking specific performance of contract, is to show his willingness and readiness to perform the contract. I have also held that evidence on record proves, that he was willing and ready to perform his part of contract. In 1973 SCM R 225 it has been held by their lordships:-- "The contention, that therein a contract of sale or immovable property, the contract provided for payment of specific amount on vendors' failing to fulfil the contract, no specific performance of the contract would be enforced by the Court, cannot be accepted. "
52. Section 12 of the Specific Relief Act provides that specific performance of the contract may be enforced in the discretion of the Court. Explanation to section 12 of the Act clearly states, that unless and until the contrary is proved, the Court shall presume, that the breach of contract of transfer of immovable property cannot be adequately relieved by compensation money. In 1983 CLC 1085 a Division Bench of this Court had held that conduct of the appellant/vendor has to be consistent. If he is responsible for flagrant violation of sale agreement for ulterior motive, but blamed the vendee for the breach of the contract, he was not entitled to press his claim, for discretion of the Court to be exercised in his favour.
53. In the instant case also, the vendors failed to get requisite Certificate for nearly six years and then gave a notice for very short period to the plaintiff for which also they could not prove that the same was received by plaintiff in time. Such a conduct does not entitle them to claim the discretion of the Court to order award of damages instead of specific performance of the contract.
The defendants have relied upon the case reported in 1988 M LD 608 but the facts of the case are distinguishable from the facts of the instant case. In that case the vendee did not pay the rent of the shop, which was in his possession, pending the completion of the sale-deed as per agreement.
He also offered to pay half of the price of the amount paid by the vendor he claimed adjusted sale price at 8 annas per rupee. Therefore, it was held, that the vendee could not be allowed specific performance of contract, after the expiry of the time of payment of amount, which he was formerly not willing to pay.
54. Before I part with this suit one other point also requires consideration. Under orders of the Court, the plaintiff deposited the balance of the sale price money about 32,61,800 in the Court, which were ordered to be deposited in the Khas Deposit Certificate. The question now arises as to who is entitled to receive the profit, though the sale price would naturally go to the defendants on the execution of sale-deed. In the case reported in 1983 CLC 1085, a Division Bench of this Court has held, that where respondent deposited in the Court sale consideration in pursuance of High Court Order, while appellant vendor enjoyed possession of property, which they did not pass on to respondent, the appellant cannot be allowed benefit of possession as well as interest accumulated on the sale consideration. The appellant was entitled to sale consideration according to sale agreement, while the respondents/purchasers were entitled to interest thereon. However, I find that after 30-6-1986 the plaintiffs can also partly be held responsible for the delay, though this suit cannot be dismissed on that account, for reasons already recorded, but justice and equity requires, that the profit earned on the deposit for the first two years therefore be paid to the defendants while profits for rest of period be paid to the plaintiff. This arrangement would be equitable in the sense that the defendants do not have now to pay Rs.22,00,000 as Capital Gain Tax and also they will be receiving some amount viz. The profits earned for the first two years. It will offset the feeling of the defendants that they have been deprived of the benefit of escalation in the price of the land though on that account they cannot cancel the contract. The plaintiff would also be compensated by payment of the profit for the balance of period, as he has to pay additional Stamp Duty and Registration Fee due to the delay of the defendants in getting the requisite certificate. The plaintiff will also get the benefit of escalation in the price of land. The defendants had also been enjoying the rent of the suit property during all this period as power of attorney only entitled the plaintiff to obtain possession of suit property which he was unable to get. My finding therefore, on this issue is that the plaintiff is entitled to get relief of specific performance of contract and the amount of profits as mentioned above.
ISSUE NO. 11: