' I. MAHMUD, J.-This is a Letters Patent Appeal from the Judgment and Decree dated 11-1-1967 passed by a learned Single Judge (Kadir Nawaa S. A. Awan, J.), in Suit No, 191 of 1963 on the original side of the High Court, decreeing the suit of the respondents Nos. 1 to 5 for specific performance of a contract for lease and damages.
2. The property in dispute is a vacant plot of land bearing survey No, 29 Sheet SB-5, measuring 2724 sq. Yds , in Sadar Bazar Quarter, Karachi, situated at the corner of Fonus Road and Strachan Road, Karachi. It was owned by Dr. Eddie P. Bharuch, the respondent No, 7 who was a resident of India. His properties in Karachi, including the suit property, were being managed by the partners of the firm of Messrs Eduiji Dinshaw, which included Julian Hushing Dinshaw. They will hereinafter be collectively referred to as "the Owner". As Dr. Eddie P. Bharucha became an enemy alien on the outbreak of war between India and Pakistan in 1965, the suit property became vested in the Custodian of Enemy Property, and he was impleaded as defendant No, 7 in the suit.
3. The suit property Was held on lease by one Thakurdas G. Adwani since before Partition on which he was running the business of an open-air cinema, known as "Mayfair Cinema". On 16.8-1948, Khan Ghularn Mohluddin Khan and his wife Begum Noor Bakht (hereinafter referred to as "the Khans"), purchased the said cinema business from Adwati and with the consent of the owner, the Khans were accepted as lessees for a period of 10 years commencing from 16-8-1948 on a monthly rent of Rs, 538/4.
4. Sometime in May 1956, the Khans were interested in disposing of the "Mafair Cinema". But as their lease was to expire shortly after two years on 16-8-1958, they obtained a promise from Minocher Dinshaw, unc'e of the said Julian Hoshang Dinshaw, to extend their lease for a further period of 25 years to enable the Kbans to obtain a better price from buyers of the Cinema. Maneckji Dastur and his son, Hoshang Maneckji Dastur, hereinafter referred to as "the Dasturs") were interested in purchasing the cinema from the Kbans with the object of putting up a closed air-conditioned cinema and a hotel thereon. The case of the Dasturs, who were plaintiffs in the Suit No, 191 of 1963 out of which the present Appeal arises, was that Maneckji Dastur, who was an intimate friend of Minocher Dinshaw, uncle cf Julian Hosharg Dinshaw, appoached him for the purchase of the suit property on instalment basis, but this was not acceptable to Minccher Dinshaw. Instead, an oral agreement was reached to the effect that if the Dasturs purchased the cinema business from the Khans, they would be granted a lease of the suit property for a period of 25 years with an option to purchase the same at an agreed price of Rs, 4,76,700. That, relying on the assurance contained in this oral agreement, the Dasturs entered into an agreement with the Khans on 10th May, 1956 to purchase the cinemas business including their leasehold rights in the land for a high price. Their further case was that the terms and conditions of the agreements between the owner, the Khans and the Dasturs were confirmed and contained in a letter dated 30th August, 1956 (Exh. 8) addressed to the Khans by Julian Hushing Dinshaw, which is the alleged contract for lease with the option to purchase, of which specific performance was prayed in the suit. The Zetter reads as follows:- "Eduljee Dinshaw, 30th August, 1956.
' 260 R. A. Lines, Karachi: (Exh. 8)
' Khan G. M. Khan, Esqr., Karachi: ' Dear Sir, ' Re:-Plot No, 19 Sheet S. B. 5 measuring 2724 sq. Yds., Sadder Bazar, Karachi, called Mayfair Cinema: ' With reference to the above plot, which you hold on lease up to 16th August 1958, I agree to lease the same to you from 16th August 1958 for a further period of 25 years on the following main terms and conditions as arranged personally:-
(1) The period of the lease will be 25 years commencing from 16th August 1958.
(2) The rent payable by you will be at the rate of c % on the value of the Plot at Rs, 175 per square yard amounting to Rs, 1985. (One thousand nine hundred and eighty-five only), per month. All taxes and assessm ents now payable or which may be imposed hereafter, including all Municipal taxes and Government taxes, present or future in respect of the plot or buildings that may be constructed thereon will be payable by you. The rent payable will be Rs, 1,985 per month, free of all deductions.
(3) You will have permission to erect buildings on the aforesaid plot, in accordance with plans to be previously appoved by me in writing and to be approved by all Authorities before the commencement of the work. All such buildings to be surrendered and handed over at the termination of the lease period.
(4) In the event of your failure to pay rent at any time for a period of two months, the lease will be liable to be terminated by us and all buildings erected on the same plot would be surrendered to the owner. You will have the option to purchase the above-mentioned plot within a period of 15 (fifteen) years from the 16th August 1956 at the rate of Rs, 175 per square yard that is to say at a total price of Rs, 4,76,700. The said option if not exercised within the period of 15 (fifteen) years, will stand automatically cancelled.
(5) A regular Lease Deed will be executed by us on other terms and conditions as may be advised by our Legal Advisers, the costs of which will be payable by you. The lease would be in favour of yourself, your successors and assigns.
(6) You will not transfer, assign or sublet the lease or premises to any one without our written permission. Further, six free passes for each show in the Cinema will be given to us.
(7) All disputes to be settled by arbitration under the Arbitration Act for the time being in force.
' Please confirm the above. Yours faithfully, (Sd.) J. H. Dinshaw."
' The Disturbs further pleaded that the Khans delivered possession of the -"Mayfair Cinema" and the suit property to the Dasturs on 2.9-1956 with the consent and knowledge of the Owner and 26-3- 1957, the Khans executed a deed of conveyance transferring the cinema to them.
5. In October 1957, the Karachi Municipal Corporation made a demand of Rs, 39,524-14-0 on account of arrears of Municipal taxes in respect of the suit property which had remained unpaid since the year 1945. The Dasturs also fell in arrears in payment of the rent of the plot despite demands by the Owner. In September 1958, the open-air cinema was demolished under the Orders of the then Martial Law Authorities and the Disturbs even asked the Owner to forego the rent until they were able to re-erect a new cinema and get the business going but it was not acceded to. In the result, the Owner addressed a legal notice dated 28-7.1959 to the Disturbs calling upon them to quit and deliver vacant possession of the OA and also pay up the arrears of the rents which then amounted to Rs, 37,282-8-0, As the Disturbs failed to comply, a final legal notice dated 7-12-1959 was addressed to them (as also to the Khans) demanding payment of the rent as well as the outstanding Municipal taxes and calling upon the Disturbs to quit and hand over vacant possession of the plot by 30-1-1960, failing which legal proceedings would be taken for their ejectment. As the Dasturs failed to comply with the said requisitions, the Owner filed a Suit No, 47 of 1960 on the Original side of the High Court on 29-2-1960 against both the Khans and the Disturbs for recovery of the arrears of rent, manse profits and for their ejectment. By the Judgment dated 30.9-1961 passed in that suit, the Disturbs were held to be monthly tenants and the prayer for their ejectment was dismissed. It was also held that in the circumstances of the case, the Disturbs had justification for withholding payment of rent. The prayer for payment of arrears of rent to the extent of Rs, 14,931 at the old rate of Rs, 538-4-0 per month was however decreed. A Letters Patent Appeal No, 15 of 1962 was filed by the Owner, but it was dismissed. While that Letters Patent Appeal was pending, the Owner filed another Suit No, 122 of 1962 in the High Court for ejectment of the Dasturs and for the recovery of further arrears of rent and mesne profits, but the suit was withdrawn and a separate Ejectment Application No, 2976 of 1963 was filed before the Rent Controller. A few weeks later, on 22-11-1963, the Disturbs filed the Suit No, 191 of 1963 against the Owner and the Khans, and others for Specific Performance of the Contract of Lease with the option to purchase dated 30th August, 1956 (Exh. 8), and for damages in the sum of Rs, 6,20,000 and further damages at the rate of Rs, 20,(00 per month from the date of the suit till payment. The plaint was later amended to include as the principal prayer, a prayer for specific performance of the option to purchase the suit property for the price of Rs, 4,76,000 as per paragraph 4 contained in the letter dated 30-8-1956 (Exh. 8) above-quoted. As stated earlier, the Custodian of Enemy Property was impleaded as defendant No, 7 in the said suit.
6. The suit was resisted by the Owner who filed a written statement in which it was pleaded mainly that there was no concluded or finalised contract of which specific performance could be claimed or granted and, in the alternative, that the Dasturs were guilty of breaches thereof and therefore could not enforce it. It was further pleaded that the suit was barred, not only by was jud1cata having regard to the judgment and decree in Suit No, 47 of 1960, but also by limitation their written statement was adopted by the Custodian of Enemy Property.
7. Several issues were framed in the suit including the issue whether the suit was incompetent and not maintainable. The suit was at first dismissed as not maintainable on the ground that the alleged contract in suit had become frustrated upon the Owner becoming an enemy alien upon the commencement of the Indo-Pakistan war in September, 1965. And that its enforcement had become illegal. But, on appeal by the Disturbs, a Letters Patent Bench remanded the suit for hearing on merits.
8. After recording evidence of the parties the trial Court by the impugned judgment dated 11-1-1967, decreed specific performance of the contract for lease with option to purchase dated 30.8-56 (Exh.
8) against the Owner and the Custodian of Enemy Property, and awarded damages in the sum of Rs, 1,55,000 in addition to monthly demages at the rate of Rs, 5,000 per month from the date of the Suit till execution of the lease leed with costs. The suit against the other defendants was dismissed.
The present Letters Patent Appeal has been filed by the Custodian of Enemy Property against the said judgment and decree dated 11-1-1967.
9. Mr. Ali Ahmed Fazed, learned counsel for the appellant, has challenged the judgment and decree of the trial Court on the following grounds :-
(1) That the suit for specific performance of the alleged contract was barred by time under Article 113 of the First Schedule to the Limitation Act, 1908.
(2) That there was no binding or concluded contract between the parties which had given rise to a claim for specific performance.
(3) That the decision in Suit No, 47/60 holding that the respondents were monthly tenants and that the alleged contract for lease (Exh. 8) had not become operative, were res judicata and could not be re-agitated in Suit No, 191 of 1963.
(4) That the respondents had committed breach of the alleged contract for lease (Exh. 8) by defaulting in payment of rent and taxes and were therefore disentitled to claim specific performance.
(5) That as the decree for specific performance was incapable of execution in view of clause 5 of the Enemy Property (Custodian and Registration) Order, 1965, it should not have been granted by the Court in the exercise of its discretion.
(6) That the award of damages was arbitrary. These submissions will now be considered.
10. Dealing with the first submission of Mr. A. A. Fazoel, regarding limitation, the contention is that the suit for specific performance of the contract for lease was filed beyond three years from the date when the Disturbs bad notice that performance of the contract had been refused and that it was barred under Article 113 of the First Schedule to the Limitation Act, 1908. According to the counsel, both the notice to quit dated 7-12-1959 (Exh. 38/16) as well as the filing of the Suit No, 47 of 1960 for ejectment of the Disturbs from the plot 'summons of which were served on the Disturbs on 26-3- 1960), was each, a notice to them that the performance of the contract for lease contained in the letter dated 30-8-1956 (Exh. 8) had been refused. But, Article 113 of the Limitation Act presupposes the existence of a concluded and finalised contract between the plaintiff and the defendant, the performance of which has been refused -by the defendant and of which the plaintiff has notice.
Again, before a defendant can successfully invok the bar of limitation under Article 113, he has to prove affirmatively that his refusal to perform the contract was clear, unequivocal and unconditional. As rightly submitted by Mr. S. Akhlaque Hussain, learned counsel for the 'Dasturs, the position adopted by the Owner throughout this litigation has been that the letter dated 30-8-1956 (Exh. 8) did not constitute a concluded or finalised contract for lease. In fact, it is the second numbered submission abovementioned of Mr. Fazeel (to be presently discussed) that no binding or finalized contract between the parties was ever concluded, which had given rise to a claim for specific performance, inter alia, on the ground that some terms and conditions of the lease had yet to be finalized, as may be advised by the Legal Advisers of the Owner as stated in paragraph 5 of the said letter (Exh. 8). The Owner had neither accepted the Disturbs as having any contractual right to a lease, nor acknowledged the right of the Dasturs as assignee of the Khans to the benefit of the Contract contained in the letter dated 20-8-1956 (Exh. 8). On the contrary, the case of the Owner in both the notice to quit and the plaint in Suit No, 47/1960 was that as the Disturbs were put in possession of the plot by the Khans, the Owner was prepared. At most, to accept them as monthly tenants; but as the Disturbs had defaulted in the payment of the monthly rents demanded from them and the settlement of the arrears of the municipal taxes, their tenancy was being forfeited by the notice to quit (Exh. 38/16) dated 7-12-1959 and their ejectment was sought by filing the Suit No, 47 of 1960 a few weeks later on that basis. The ejectment suit was not filed on the basis that there had existed either a contract for lease with the Disturbs or that the Dasturs were assignees of the contract with the Khans, which contract the Owner was refusing to perform because the Disturbs had committed breach by defaulting in payment of rents and taxes.
Therefore, we accept the submission of Mr. Akhlaque Hussain that there can be no question of refusal to perform a contract, which the Owner himself had not accepted as concluded or finalized, and that neither the notice to quit (Exh. 38/16) nor the filing of the Suit No, 47 of 1960 for ejectment contained any such refusal to perform the contract (Exh. 8), or that any such refusal was ever made or intended to be made.
11. It is also clear to us that Article 113 cannot properly be invoke by the owner who has taken inconsistent and contradictory pleas with regard B to the question whether the contract was concluded or not. For, while the Disturbs were not accepted as assignees of the Khans in the absence of written permission by the Owner, the latter was yet agreeable to grant a lease of the plot to the Disturbs on the basis of Exh. 8, but made it conditional upon payment of the arrears of rents and the municipal taxes. This stand was maintained even until 1962, for in paragraph 4 of the plaint in Suit No, 122 of 1962, the Owner admitted that he was ready and willing to execute the lease deed and would have done so, had the Disturbs paid the rent and the municipal taxes. The Owner also relied on Exh. 8 in Suit No, 47 of 1960 to claim the higher rent of Rs, 1985 per month from the Disturbs, stipulated in paragraph 2 of that letter and yet where disowning the right of the Disturbs to a lease, on the plea that the Disturbs had forfeited their right by breach. In view of the contradictory and in constraint position taken by the Owner, it can hardly be said that there was a clear and unequivocal refusal to perform the contract. If at all, there was a clear and unequivocal refusal, it was contained in the statement of Manek Wania (P. W. 1) Manager of the Owner which he made on 25-9-1961 in answer to a question by the Court in Suit No, 47 of 1960 viz: "In view of the breach committed by the defendants (Dasturs), we are not prepared now to execute the lease deed contemplated in Exh. 5 (Exh. 8)". Mr. Fazeel conceded that if this statement is accepted as a clear and unequivocal refusal to perform, then the suit would be within time. We are, therefore, in agreement with the finding by the learned Single Judge on this issue that neither the notice to quit (Exh. 38/16) nor the plaint in Suit No, 47 of 1960 contained any such unconditional or unequivocal refusal as is contemplated under Article 113 of the Limitation Act, and hold that the snit is not barred by limitation. It is, therefore, not necessary to discuss the further contentions of Mr. S. Akhlaque Hussian that even if the plaint in Suit No, 47 of 1960 is held to contain a refusal, the same had been revoked within three years before the present suit and the bar of limitation under Article 113 had been removed, and further that the bar of limitation of Article 113 cannot apply to the option to purchase the property which could be exercised at any time within 15 years from 13-8-1956.
12. The next submission of Mr. Fazeel is that letter dated 30-8-1956 (Exh. 8) addressed to the Khans containing the alleged contract for lease with option to purchase, was not a binding or concluded contract because,. As stated in para. 5 thereof, the other terms and conditions which were to be incorporated in the regular Lease Deed on the advice of the Legal Advisers before its execution, were neither settled nor finalized. In support of the proposition of law that an agreement which provides that a later document is to be concluded on the advice of the Legal Adviser, is an in choate and incomplete agreement, Mr. Fazeel referred to the decision of this High Court in Messrs Ashrafi (Pvt.) Ltd. And another v. Karachi Transport Syndicate Ltd. (1), the note of which case is reported in which several decisions from the British and Indian Jurisdictions were discussed. In that case, the agreement for sale of land was made expressly subject to approval by the general body of shareholders of the respondent-Company, which was not accorded. He also referred to additional case-law from the said jurisdictions and, in particular, the decision in Von Hatzfeldt Wildenburg v. Alexander (2), Caney v. Leith (3). Riley and another v. Troll (4), Raingold v. Bromley (5), and Baipsath v. Kahetraharl Saukar (6). In each of these cases, the agreement relied on as constituting the completed contract was held to be incohate, which provided either that the agreement was subject to "solicitors approving the lease" or "the covenants to be contained in the lease" or was subject to "usual doubt, well The proposition of law laid down in these cases is, no doubt, well settled. But, the question whether the parties had reached a concluded contract or not, is a question of fact to be deduced from the correspondence, and other documentary and oral evidence. The true test for deciding the C question is to ascertain whether the parties were of one mind on all the material terms at the time it is said to have been finalized between them and whether they inter ded that the matter was closed and concluded between them. There is nothing on record to show as to what were the alleged "other terms and conditions" to be contained in this regular lease deed. Manek Chinoy (D. W. 2) in answer to a Court question, admitted that no efforts were made by the Owner to finalize the terms and conditions of the lease. Nor did Mr. Dirigomal, the Legal Adviser, who drafted the letter (Exh. 8), ever submit any new terms or conditions for consideration of the Disturbs. On the other bard, the documentary evidence supports the conclusion that all main and material terms and conditions to be contained
(1) PLD 1973 Note 119 at p. 184 (2) (1912) 1 Ch. D 284
(3) (1937) 156 L T 483 (4) (1953) 1 All E R 966
(5) (1931) 2 Ch. D 307 (6) AIR 1955 Cal. 210 ' in the proposed lease deed were settled. Thus, the Khans and the Dastunconfirm in their jointly signed letter addressed to the Owner dated 14-9-1956- (Bah. 19) written shortly after Exh. 8, requesting that the lease deed be made out directly in the name of the Dasturs that "the terms of lease offered in your above letter (Exh. 8) have now been completely agreed upon." In subsequent correspondence exchanged between the Owner and the Dasturs, the agreement for lease is also acknowledged without as much as even a suggestion that it was subject to settlement of other terms and conditions of the proposed lease and a particular reference may be made to letter dated 3-12-1957 (Exh. 35) addressed by Manek Chinoy (D. W. 2) to theDasturs wherein payment of outstanding rents and taxes only was demanded before the question of transfer of the lease to their names could be considered. Mr. Manek Chinoy (D. W. 2) who had deposed that at no time all the terms and conditions were settled with the Dasturs and the Owner regarding the - proposed lease, gave a false and prevaricated version and was rightly disbelieved by the learned trial Court on this point. On a proper construction of Exit. 8 dated 30-8-195e, as well as the correspondence and other documentary and oral evidence on record, the learned Single Judge came to the conclusion that all the main and material terms and conditions to bez contained in the proposed regular lease, were settled between the owner and the Khans, and were contained in Exh. 8 and that nothing was left for further settlement. We agree with this conclusion.
13. Mr. Fazed' further submitted that although consent to assignment was requested by the Khans and the Dasturs in their joint letter addressed to the Owner, dated 14-9-1956 (Exh. 19), it was not accorded. He also referred to para. 6 of the letter (Exh. 8) prohibiting assignment of the lease of the premises without the previous written permission of the Owner. On the other hand, Mr. Syed Akhlaque Hussain referred to the oral and documentary evidence on record, showing that the Owner had in fact orally agreed to grant the lease to the Dasturs, which fact has been confirmed and achnowledged in several letters, and that the prohibition to assignment mentioned in para 6 of the latter referred to by Mr. Fazeel, was to be a term of the proposed lease and did not apply to transfer of the benefit of Exh. 8 because the fact was that the Owner had admitted that the lease was to be executed in favour of the Dasturs. The case of the Dasturs and the version of their main witness, Hoshang Manekji Dastur (P. W. 1) in his deposition was that Minozher Dinshaw who had earlier promised the Khans to renew their lease of the suit property for 25 years with effect from date of its expiry on 16-8-1958, orally agreed and assured his father, Manekji Dastur, who was an intimate friend of Minocher Dins haw, that if the Dasturs wanted to purchase the cinema business from the Khans, they would be granted the lease of the suit property for 25 years with option to purchase the same at an agreed price of Rs, 4,76,000 and that relying on the faith of this agreement and assurance, they entered into that agreement with the Khans on 10-5-1956 to purchase the "Mayfair Cinema" and the leasehold rights in the plot of land and paid a large price to them, and that the said arrangement between the Owner, Khans and the Disturbs was embodied and contained in letter dated 30-8-195 (Exh. 8). The arrangement was in the full knowledge of Julian Hashing Dins haw and Eddie Moocher Dins haw, the nephew and son respectively of Moocher Dins haw. The letter Exh. 8 was in fact written by the former on the instructions of his uncle.
Moocher died in 1960. Therefore, Julian Hoshang Dinshaw and Eddie Moocher Dins haw were important witnesses. If the version of Hushing Manekji Dastur (P. W. I) was false, as alleged, it was indeed the duty of Julian Hoshang Dinshaw and Eddie Minocher Dinshaw to have entered the witness box, they being important witnesses in this regard. Mr. Syed Akhlaque Hussain pointed out that the omission of Julian Hashang Dinshaw or even of Eddie Minocher Dinshaw to enter the witness box must lead to the inference that the falsity of the plea now advanced would have been exposed in cross-examination and in this connection, he cited the following observations of the Privy Council in Sri Rajah Vatsavaya Venkata Subhadrayyamma Jagapati Bandur Garu v. Sri Poosapati Vankatapati Rah, Garu and others (1) at page 166 :- "They were not examined as witnesses in the suit out of which this appeal has arisen. They were important witnesses if their allegations were true. It appears to their Lordships that there is only one rational explanation of their absence from the witness chair, namely, their well-grounded fear of cross-examination. If their statements be true, the evidence of Lakshmi must be a wicked and deliberate concoction. Their Lordships do not think it is that."
' On the other hand, the version of Hoshang Manekji Dastur (P. W. 1) stands amply supported by several admission and acknowledgements to which Mr. Syed Akhlaque Hussain drew our attention.
He referred to the statement of Mr. Dingomal, the Legal Adviser of the Owner and the author of letter Exh. 8, made by him under Order X, C. P. C. In Suit No, 47 of 1960 (Exh. 21), wherein he stated that the tripartite arrangement between the Owner, Khans and the Dasturs was set out in the said letter (Exh. 8) pursuant to which the Dasturs "were to be substituted as tenants" in place of the Khans. The evidence also shows that the Dasturs took possession of the premises from the Khans on 2-9-1956 as, Manek Wanya (P. W. 1) in Suit No, 47/60 said in answer to a question by the Court, "with the Owner's consent and knowledge, paid rent to us and we accepted it". However, in the Suit No, 191 of 1963, Manek Wanya was withheld and, instead, Manek Chinoy was put forward by the Owner as the principal witness, who while denying this fact gave a prevaricated and false version.
There is also a clear admission by Julian Hoshang Dinshaw in his letter addressed to the Architect (Control) K. D. A. Dated 3-12-60 (Exh. 38/31) wherein he stated "subsequently G, M. Khan with the permission of the landlord assigned his rights to Messrs Manekji Dasturs and Hoshang Manekji Dastur who became the lessees of the plot." There is also the admission of Manek Chinoy (D. W. 2) in Suit in which he stated "It is also correct that Mr. Minocher Dinshaw had orally agreed to transfer the lease to the Dasturs". This witness also admitted the endorsement (Exh. 42/32) made by him at the foot of letter (Exh. 19) dated 14-9-1956 reading "Mr. Minocher has seen this and he has asked for the change to be made as requested in his letter." The evidence on record further shows that the Owner was ready and willing to execute the lease in favour of the Dasturs had they not been defaulting in the payment of rent and taxes, as will appear from letter dated 3-12-1957 (Exh. 35) addressed to the Dasturs by Manek Chincy (D. W. 2) in which he stated that "the question of the transfer of the lease to your name will only be considered after the taxes and all outstanding rents are satisfactorily settled." In his deposition, in answer to a question by the Court, this witness replied that the Owner was ready and willing to execute the lease deed but he blamed the Dasturs for not executing the same because they did not have money to pay the rents and taxes which had accumulated. Further admissions and acknowledgements appear in
(1) AIR 1924 P C 162 ' paragraph 5 of the Memo of Appeal in L. P. A. 15 of 1962, in paragraph 4 of the plaint in Suit No, 122 of 1962 and in paragraph 3 of Rent Application No, 2976 of 1963. In the face of these admissions and the documentary and oral evidence on record, we agree with the learned Single Judge that there is no truth in the plea that the owner had not consented to the assignment or that the owner had not agreed to grant the lease to the Disturbs.
14. The next submission of Mr. Fazed was that neither Minocher Dinshaw was authorized to consent to the assignment of the lease, nor Julian Hushing Dins haw had any authority to give the option to purchase, because the former was not an Attorney of Dr. Eddie. Bharuch, while the latter, as attorney, had no power except to manage his properties. This plea was also raised before the learned Single Judge and, for reasons with which we agree and which have been further elaborated by Mr. Syed Akhlaque Hussain before us, it was rightly rejected. The evidence on record shows that it was Minocher, uncle of Julian Hoshang Dinshaw, who was personally dealing with the property in dispute. Julian Hoshang Diashaw who admittedly had signed the letter Exh. 8, did not indicate beneath his signature that he signed it as an Attorney. The evidence of Hoshang Manekji Dastur (P. W. 1) was that Minocher Dins haw alone managed and dealt with the property in suit until he fell ill at the end of 1958, wnere after Julian Hushing Dinshaw assumed the management of the property. This is further supported by the evidence of Manek Wania (P. W. 1) in Suit No, 47 of 190, and is not contradicted by Manek Chiney (D. W. 3), the principal witness of the Owner in Suit 191/53. The evidence further shows that the property was being treated as if it belonged to the firm the "Eduljec Dinshaw" and rent bills were being issued in the firm's name even after the power of attorney dated 3-6-1956 vide Exhs. 42/13, 42/14, 42/15 and some cheques were also drawn in favour of the firm "Eduljee Dinshaw". In the municipal records, the Dinshaws were recorded as owner of the said property vide Municipal Extract Exh. 42/23 dated 29-6-1959 and notices were being addressed to them with regard to taxes and assessments, vide Exh. 9, dated 30-10-1957, and were being attended to by the firm "Eduljee Dinshaw". The name of Dr. Eddie P. Bharucha as owner of the said property did not transpire until later in 1959/60. However, the plea of want of authority was not raised in the litigation ; nor was any issue framed D thereon, and therefore, it was rightly held by the learned Single Judge that the owner was estopped from agitating this question at the time of arguments. In this regard, Mr. S. Akhlaque Husain referred to the observations of the Privy Council in Sri Rajah Mairaju Lakshmi Venkayyama Rao Bohadur and another v. Sri Rajah Venkata Narasimha Appa Rao Bahadur and others (1) to the effect that if parties have acted with knowledge and upon the footing of a proposal made, they are estopped by their conduct from raising plea that the contract is incohate and incomplete. In Sri Mirza Raja Sri v. Secretary of State for India (2), their Lordships for the Privy Council observed "A litigant who has all along maintained a position in support of one, and in this case the more important branch of his suit, cannot be permitted, when he fails upon this branch to withdraw from the position and assert the contrary, more especially when he thereby places bis opponent at a great disadvantages. There could be no AtR 1916 PC9 (2) A R 1926 P C IS ' clearer case for the application of the doctrine of estoppel owing to the conduct of the litigant."
' For these reasons, we must reject the submission of Mr. Fazed' that the assignments of the benefit of the contract or the option to purchase were unauthorized.
15. The next submission of Mr. Fazed is that the decision on issue No, 1 in Suit No, 47 of .1960 that Exh.
8 did not create a valid and binding lease was res judicata. Mr. Syed Akhlaque Hussain submitted that the decision on this issue which was based on the concession of Mr. Diagonal, rightly held that in the absence of a registered lease deed, no binding lease can come into legal effect and therefore Mr. Dingomal rightly conceded that the Dasturs held the premises as monthly tenants.
But there was no contest in the suit between the parties as to whether Exh. 8 was a concluded and binding contract for lease or not. It was neither alleged nor denied by either party in that suit. The Khans with whom Exh. 8 was entered into were dropped from the suit and the Disturbs were sued as monthly tenants on the basis that they held the premises on the terms and conditions of Exh. 8 as to rents and taxes and were liable to ejectment for default of payment. On the contrary, he submitted that the decisions in Suit No, 47 of 1960 were recorded on the basis and the admission by the Owner that Exh. 8 was a binding and concluded contract. The only matters involved in Suit No, 47 of 1960 which were res judicata were that Exh. 8 did not constitute a valid lease deed due to non-registration ; that the Owner could not charge rent at the higher rate of Rs, 1985 per month on the basis of Exh. 8 ; and that the Disturbs were jusufied in withholding payment of the rent in the circumstances that while the owner was not recognizing them as tenants nor executing the !Ease deed in their favour, was yet demanding the higher rent and the taxes on the basis of Exh.
8. His submission therefore is that although no issue as to the binding and concluded effect of Exh.
8 was framed, it was yet a question involved in the suit and indeed was the ground-work of the decision, as the findings on the above-mentioned matters raised in that suit could not be sustained except on the basis of the concluded nature of Exh.
8. 'therefore on the principle of constructive res judicata, the implied admission as to concluded nature of Exh. 8 was a matter directly and substantially in issue and was res jacticata, In support of the submission that an implied finding based on an agreement or admission by a party in a former suit operates as res judicata in the subsequent suit E in the same way as a finding based on an adjudication by the Court, learned Council cited S. Nand Singh v. Rahmat Din (minor) and others (1). In that case, in a mortgage Suit a distinct issue was raised as to whether the mortgagor was a member of a specified agricultural tithe and whether the mortgage of the suit land contravened the provisions of the Punjab Alienation of Land Act. By compromise, the defendants abandoned the plea that had given rise to this issue and agreed to a decree being passed on the assumption that the mortgage in suit was a perfectly valid mortgage, having been effected by a person who was not a member of the specified agricultural tribe and did not contravene any positions of the Punjab Alienation of Land Act. When the decree-holder-mortgagee took out execution of the decree, the judgment-debtor resisted the execution on the ground that the mortgag was a member of the specified agricultural tribe, the sale of his land was prohibited by section 16 of the Punjab Alienation of Land Act. It was held : "The decree for sale of the suit land or any portion thereof could not
(1) A 1 R 1946 Lab.
7.i ' have been passed except on a finding in the plaintiff's favor on the issue as to the validity of the mortgage and as to its being in contravention of the provisions of the alienation of Land Act. A finding on this issue in the plaintiff's favor must, therefore, be regarded as implicit in the decree eventually passed The mere circumstance that this implied finding was based not on an adjudication by the Court but on an agreement or admission by the defendant cannot make any difference in so far as the operation of the principle of res judicata is concerned It was further pointed out that the points to be considered in deciding a question of res judicata is whether the judgment in the previous case could be sustained without the determination of the question at issue in the subsequent suit, even though the subject-matters of the two suits are different. If the judgment in the previons suit could not be sustained without the determination of the question in the subsequent suit the previous decision operates as res judicata and bars the subsequent suit.
The consent decree in the mortgage suit could not be sustained without the determination of the question of the tribe to which the mortgagor belonged. That decree must, therefore, operate as res judicata in any subsequent litigation between the same parties, or parties claiming through or under them . . . . . .
' Counsel further referred to the principle of constructive res judicata in Rahini Nandan Chaudhurl and others v. Ladunandan C haudhuri and others (1) that even if a particular matter be not included in a formal issue, if it is directly and substantially in issue between the parties, and if there be a decision thereon, it will operate as res judicata. To the same effect is the decision in L. Bishun Das v. L. Laxmi Narain (2). What was therefore, res judicata was the decision as to the binding and concluded nature of Exh. 8, which question was involved in that suit and which was the groundwork of the decision and not the altogether different question whether Exh. 8 created a valid and binding lease. We, therefore, find no force in the submission of Mr. Fazed and concur with the finding of the learned Single Judge that the finding on issue No, 1 in Suit No, 47 of 1960 is not res judicata.
16. The fourth submission of Mr. Fazeel is that as the Dasturs had committed breaches of the contract (Exh. 8) by defaulting in payment of the rents and tames, they were, therefore, disentitled to claim the discretionary relief of specie performance of the said contract. In this regard, Mr. Fazeel referred to the correspondence and the circumstances which should the financial embarrassment of the Dasturs and inability to pay rents after the "Mayfair Cinema" was demolished on the orders of the Martial Law authorities, when they asked the Owner to relieve them from payment of the rents until the cinema business was resumed. As observed earlier, and as rightly submitted by Mr. Syed Akhlaque Hussain, the decision in Suit No, 47 of 1960 was res judicata which held that the Disturbs were justified in withholding payment of the rent stipulated in Eah. 8 in the circumstances, and that this question could not be agitated again. Learned counsel further submitted that even if the Dasturs are held to have defaulted in payment of the said rents which may lead to forfeiture of the lease, that could not affect the option to purchase the suit property. According to counsel, the letter (Exh. 8) comprises of the contracts, one for grant of lease and the
(I) AIR 1926 Cal. 1022 (2) AIR 1949 All. 596 ' other for the option to purchase the suit property. He cited Green v. Low (1) for the proposition of law that when the contract comprises parts which are mutually exclusive of one another, and the plaintiff has a right to ask for performance of one part, the Court may treat this as independent of the other and default by the plaintiff in respect of the one part will not bar the specific performance of the other. In that case, the plaintiff had entered into an agreement with the defendant, to build a villa on the land of the defendant of the value of 1,000 and agreed to insure and keep it insured in their joint names in the County Fire office for 900 and agreed to grant a lease of the house for 99 years to the plaintiff upon completion and that if the plaintiff should not perform his part, the agreement for lease should be void. The agreement also stipulated that the defendant would have the option of purchasing the land and the building within two years at the price of 500. The plaintiff erected the villa but insured in the wrong office and in his own name alone and within the stipulated period gave notice of his intention to exercise the option of purchase and tendered the purchase money and a conveyance but the defendant refused to convey the property insisting that the plaintiff bad committed breach of the agreement to insure in the manner stipulated. The defendant then commenced proceedings at law to recover possession, while the plaintiff brought the bill in enquiry for specific performance of the contract to sell. The Master of the Roils (Sir Jhon Remilly) upon the construction of the contract upheld the contention on behalf of the plaintiff that the right to purchase was independent of the right to lease and that even if the right to e latter had been forfeited on account of breach by the plaintiff, still the right to purchase remained unaffected and, accordingly, he decreed specific performance and awarded perpetual injunction to restrain the defendant's proceedings at law. That proposition of law is stated in Fry's, Specific Performance of Contracts (1921), 6th Edn., Arts. 865, 938. We would, therefore, agree with the reasoning of the learned Single Judge and the conclusion reached by him on issue No, 1 that tire option to purchase was unconditional, independent and separate contract from that for the lease and that the exercise of the former option was net dependent on the execution of the lease deed. It is the submission of Mr. Syed Akhlaque Hussain that the Dasturs have exercised the option to purchase the suit property given in paragraph 4 of the letter EA. 8 during the pendency of Suit No 47 of 1960 in that they amended their plaint in that suit on 16-1-1964 and have prayed for a decree for specific performance of the option to purchase as a principal relief in the suit. As that relief does not appear to have been granted by the learned Single Judge, Mr. Akhlaque Hussain during the course of arguments betide us has filed an application under section 151, C. P. C. On 14-10-1976 praying for a clarification of the judgment and the decree. No orders, however, can be passed on this application without notice to the appellant.
17. In support of his fifth submission, Mr. Panel relied on clause 5 of the Enemy Property (Custody and Registration) Order, 1965 which exempts enemy property vesting in the Custodian from attachment, seizure or sale in execution of a decree of a civil Court The contention is that as the attachment of the suit property in execution of the decree for specific performance is barred, this Court should not have granted the decree. Attachment and sale of the attached property is only one mode of execution of a decree for specific performance of a contract under Order XXI, rule 32(1 p and (3), C. P. C. However it is open to the judgment-creditor to apply to
(1) 52 E R 1240 ' the Court under rule 5 of the said Order for a direction to appoint any officer of the Court, such as usually the Nazir, to execute and register the/ lease in lieu of attachment and sale. The submission of Mr. Fazed, in our opinion, is therefore misconceived and cannot be accepted.
18. The final submission of Mr. Fazed is that the award of nominal damages against the appellant was arbitrary. But as rightly submitted by Mr. Syed Akhlaque Hussain, it is not in dispute that the Dasturs were prevented from constructing the new cinema and the hotel, the building plans of which had already been approved by the K. D. A., as the construction was suspended by the K. D. A.
On account of the objections lodged by Julian Dins haw. From the nature of things, it was not possible for any witness to state the precise amount of the loss suffered by the Disturbs. Therefore, the award of damages could only be given on the basis of an estimate. In the absence of evidence from the Owner's side, we agree that the award of nominal damages was not improper in the circumstance of the case.
19. For the foregoing reasons, we find no force in this appeal. It is accordingly dismissed with costs.