This civil revision is directed against the judgment/order dated 20-7-1995 passed by the learned Senior Civil Judge, Sheikhupura, whereby the petitioners' application under Order VII, Rule 11, C.P.C.
Seeking rejection of the plaint in the suit filed by the respondents for the specific performance of the agreement was dismissed.
2. The relevant facts as can be gathered from the plaint in the suit filed by the respondents are to the effect that the petitioners being the owners in possession of land measuring 13 Kanals, 10 Marlas situate Qila Mir Singh, Tehsil and District Sheikhupura agreed to sell the same to respondent No.2 for a total consideration of Rs.29,40,000 and having received Rs.2,00,000 as earnest money executed an agreement to sell in favour of said respondent Nd.2 on 23-1-1993. As per the terms of the said agreement, it was agreed that the said respondent No.2 would pay another sum of Rs.4,00,000 till 23-3-1993 while the remaining amount of Rs.23,40,000 shall be paid at the time of execution of the sale-deed i.e. 31-8-1993, The cardinal terms of the agreement as aforenoted were followed by the usual terms that if the respective parties are not able to fulfil their undertakings as contained in the agreement, the petitioner being the vendor shall pay double the amount of earnest money and the respondents Le the vendees would be entitled to enforce the agreement through Court. Respondent No.2 was given the right to develop the site with the further rider that he would be entitled to obtain the sale deeds in parts or in toto as the case may be. The vendee- respondent No.2 was also authorised to execute further agreement in favour of third party and it was time and again repeated that in the event that respondent No.2 is not able to obtain the execution of the sale-deed in his favour by the date fixed i.e. 31-8-1993, the agreement would stand rescinded/cancelled.
3. It appears that respondent No.2 by invoking the clause of the agreement whereby he was delegated the powers to execute further agreement proceeded to conclude an agreement in favour of respondent No.1 on 28-10-1993 thereby further delegating him the power to develop the site as also to obtain the sale--deed either in his name or in the name of anybody else. It was also agreed that respondent No. l would execute power of attorney in favour of respondent No.2 but on the payment of total amount.
The activity aforenoted was followed by a period of lull till 18-5-1994 when respondent No.1 filed a suit for specific performance against the petitioners as also respondent No.2 Le, the first vendee thereby seeking specific performance of the agreement dated 28-3-1993 purported to have been executed between respondent No. 2 and respondent No. 1. The petitioners having been arrayed as defendants Nos.1 to 3 in the suit noted above, proceeded to file an application under Order VII, rule 11, C.P.C. Thereby seeking rejection of the plaint on the ground that there being no privity of contract between the petitioners arid the alleged second vendee, the alleged agreement entered into between the respondent No. l and respondent No.2 could not be enforced as against the petitioners and that under the law respondent No.2 had absolutely no right to further agree to sell the land in dispute to respondent No. 1. The said application was resisted by the respondents and was dismissed by the learned trial Court vide its judgment/order dated 20-7-1995.
4. The abovesaid judgment/order of the learned trial Court has been assailed in the present revision petition.
5. It was argued by the learned counsel for petitioners that the agreement to sell dated 28-3-1993 is stated to have been executed between respondent No. l and respondent No.2, therefore, the same could not be enforced as against the petitioners because there was no privity of contract between respondent No. l and the petitioner. The age-old principle that the agreement to sell does not create any right. Title or interest in regard to the property forming subject-matter thereof was also relied to contend that the agreement to sell dated 23-1-1993 executed by the petitioner in favour of respondent No.2 did not clothe the said respondent with any right, title or interest in regard to the property forming subject-matter thereof, therefore, the respondent No.'. Was not at all entitled under the law to further agree to sell the disputed land to a third party i.e. Respondent No. 1.
6. Learned counsel for the respondents on the other hand maintained that the petitioners having delegated the power to further alienate the property in favour of anybody else did in fact imply that the original powers of disposition as vested in the petitioners were delegated to respondent No.2, therefore, there did exist privity of contract between the petitioner and respondent No. 1. It was further maintained that as per the terms contained in the original agreement'"to sell dated 23-1- 1993 executed between the petitioner and respondent No.2, it is so obvious that respondent No.2 had been delegated the authority to further agree to sell the land forming subject-matter of the agreement in his favour and that being so no valid grouse could be made in regard to the agreement executed by respondent No.2 in favour of respondent No. 1. It was added that in any case the intention of the parties must be given preference and the Court should lean in favour of enforcement of the said agreement.
7. The case as laid in the plaint in the suit filed by respondent No. l is manifestly to the effect that he seeks specific performance of the agreement to sell dated 2-3-1993 purported to have been executed in his favour by respondent No.2. It is no doubt correct that the petitioners have also been arrayed as parties to the suit with the averments that originally they had agreed to sell the land in dispute to respondent No.2 vide agreement dated 23-1-1993 but the question as to whether there is any privity of contract between respondent No. l on the one side and the petitioners on the other can only be answered keeping in view the age old principle of law that the party in whose favour an agreement to sell is' executed is at all vested with any right, to the property forming subject- matter of the agreement or not. It is now well-settled that an agreement to sell does not create any right, title or interest in regard to property forming subject-matter of the agreement and the only right of the intended vendee as recognized under the law is the right to enforce the contract and that too against the owner thereof and since the equitable estate has not been recognised in this country, therefore, the person holding an agreement to sell in his favour is not clothed with the power to further sell or agree to sell the property forming subject-matter of the said agreement.
Needless to add that the legal estate passes on to the prospective purchaser on the completion of the sale itself and not before, therefore, even if the original owner agrees that the holder of the agreement to sell would be entitled to further agree to sell the property, the same would be manifestly against the law. The rigour is not only one of law but also that of logic and prudence inasmuch as person having no title to the property itself could not possibly agree to sell the same, therefore, such an agreement could not be sought to be specifically enforced for it has always been well-accepted that nobody is allowed to contract against the law and that if such a contract is entered into the same cannot be enforced through the process of law. In the instant case the original agreement entered into between the petitioner and respondent No.2 in so far as it contained a clause thereby conferring a power on the said respondent No.2 to further agree to sell the land being against the law and void ab initio, it would be taken to be non-existent in the eye of law, therefore, the same would not be interpreted to mean that the respondent No.2 had any power to further agree to sell the land in dispute to respondent No. l or for that matter to anybody else nor the said power could in turn create any privity of contract between respondent No. l and the petitioners and that being so the agreement executed by respondent No.2 in favour of respondent No. l could not be enforced against the petitioners. Again it would be too much to hold otherwise because in such a case the prospective purchaser would entrap the innocent sellers by obtaining such a power which may further be delegated and still further delegated thus never coming to an end yet the original seller may not be gaining any benefit therefrom, as in the present case the original owner had been paid only Rs.2,00,000 and the first prospective buyer having gained profit out of this bargain with the original seller has left the field satisfied while the second intended vendee is seeking to enforce the agreement against the original seller without there being any privity of contract between him and the said original seller.
8. The nutshell of the above discussion is to the effect that neither the first intended vendee i.e. Respondent No.2 could execute further agreement to sell in favour of the second intended vendee i.e. res1pndent No. 1 because no legal estate had passed on to him nor the first agreement to sell executed by the Q petitioner in favour of respondent No.2 could be deemed under the law to have clothed the said respondent No.2 with the power to create any right, title or interest in respect of the land in dispute in favour of respondent No. l particularly when equitable estate has not been recognized in this country andsince the so-called conferment of right on respondent No.2 to execute further agreement is held to be against the law. Therefore, no privity of contract existed between respondent No. l and the petitioner. The result is too obvious that the B suit was barred by law, therefore, the learned trial Court did proceed with material irregularity amounting to illegality in exercise of its jurisdiction while refusing to reject the plaint in the suit filed by I respondent No. 1.
9: For the reasons stated above this revision petition is accepted with no order as to costs and the judgment/order dated 20-7-1995 passed by the learned 1c trial Court is set-aside, resultantly, the plaint in the suit tiled by respondent No. l against the petitioner and respondent No.2 is hereby rejected. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.