' The controversy in this case relates to immovable property bearing No, J. M. 200711-D-276 situated at New Town, Karachi owned by the defendant. The plaintiff agreed to purchase and the defendant agreed to sell this property for a consideration of Rs, 2,35,000 upon terms and conditions reduced to writing in an agreement dated 4-51970. The plaintiff paid to the defendant, at the time of agreement, a sum of Rs, 30,000 and the balance of consideration amounting to Rs, 2,05,000 was agreed to be paid at the time of registration of Sale-Deed. Two of the stipulations of the contract were as under: "(3) That the vendor shall furnish all original documents, plans, sketches, income-tax clearance certificate, wealth gain certificate, approved plan and all other connected documents of the scheduled property for the purpose of the Registration of the sale-deed within five months hereof.
(4) That the vendor shall obtain at his own expenses income-tax certificate, gift tax certificate and any other clearance certificate and shall produce the original documents including all the payments made to the K. M. C., K. D. A. And any other Government Agencies taxes of all kinds up to date of Registration of the Sale-Deed."
2. It is the case of the plaintiff that on 13-10-1970 the defendant wrote to the plaintiff asking for extension of time for four months to obtain Incom-tax clearance certificate, to which the plaintiff agreed. However, the defendant failed to obtain the certificate within the extended time. Thereupon the plaintiff on 19-2-1971 forwarded to the defendant an application form for obtaining the income- tax clearance certificate and requested him to expedite the matter. In October the defendant handed to the plaintiff a photo copy of application allegedly submitted by former to the Incom-tax Atthorities for obtaining the certificate. However, the defendant kept on avoiding to meet the plaintiff until the plaintiff finally served him notice dated 12-11-1973 calling upon him to produce the income-tax, clearance certificate and execute the Sale-Deed within 15 days. As the defendant refused to accept the notice, the plaintiff sent a telegraphic notice but despite that the defendant failed to fulfil his obligations under the contract. Thereupon the plaintiff brought the present suit.
3. The defendant has resisted the suit. In his written statement he contends that he was induced to enter into the agreement by misrepresentations made by the plaintiff regarding the price and other matters. He also alleges undue influence attributing it to his distressing financial condition and his failing health. He further alleged that in the circumstances his consent was obtained without free will for thoroughly inadequate consideration. He, however, admitted having sought and obtained extension of time for obtaining income-tax clearance certificate. But the defendant contended that the plaintiff had undertaken to himself obtain the income-tax clearance certificate and accordingly the agreement was modified. Upon these allegations the defendant alleged breach of contract on the part of the plaintiff and claimed forfeiture of the advance. He also urged legal defences and contended that the contract in suit is not liable to be specifically performed.
4. With the consent of parties the Court framed the following issues:-
(1) Whether the agreement of sale dated 4-5-1970 was executed by the defendant under inducement, undue influence and on fraudulent misrepresentation made by the plaintiff? Or the agreement was executed by the parties voluntarily?
(2) Whether the defendant has committed breach of the agreement dated 4-5-1970? If so, whether the plaintiff is entitled to specifically enforce the same?
(3) Whether the suit is barred by limitation?
(4) Whether the suit is not properly framed?
(5) Whether the suit is not maintainable?
(6) Is the plaintiff's suit barred by the Registration Act, the Transfer of Property, Act, the Contract Act, the Stamp Act and other provisions of Statutory law and equity?
(7) Whether the Agreement dated 4-5-1970 lapsed and not being extended, has no validity for purpose of specific performance? If so, to what effect?
(8) Whether the plaintiff committed breach of contract in terms of the agreement dated 4-5-1970?
If so, what are its effects in favour of the defendant?
(9) Whether the plaintiff will gain unfair advantage over the defendant who will suffer undue hardship by specific performance?
(10) Whether the plaintiff has right to sue? If so, to what result?
(11) If the plaintiff by his own conduct and act disentitled himself to specific relief? If so, what will be the results?
(12) What should the decree be?
5. The plaintiff besides appearing as his own witness, examined Mr. Samiur Reitman attesting witness of the agreement. The defendant only examined himself and Muhammad Azam Khan was examined by the plaintiff in rebuttal.
6. Issue No, 1.-The onus of proof of this issue lay upon the defendant. In his statement the defendant has not said anything suggesting undue influence or fraudulent misrepresentation. No other circumstances have been brought in the evidence to indicate that the agreement for sale was entered into by the defendant without free will. On the other hand it is in the evidence of the plaintiff that by letter dated 26-9-1970 he called upon the defendant to inform him whether the formalities of obtaining certificates and documents had been completed by the defendant as required under the terms of the agreement. The defendant admittedly replied to this letter (vide Exh. 1/8) seeking four months' extension for the purpose. In fact the perusal of evidence of the defendant clearly shows that he abandoned the plea of fraud and coercion and owned the contract as voluntarily entered into.
7. Mr. A. G. Siddiqui, learned counsel for the defendant, however, vehemently argued that the intrinsic evidence contained in the agreement is sufficient to infer undue influence and fraud. He conceded that no oral evidence was led on the issue but referred to Articles 6, 7, 8, 9 and 10 of the Sale Agreement between the parties in an attempt to show that these articles contained entirely one-sided terms in favor of the plaintiff enabling him to what he characterized as "eternal right" to purchase the property as and when he could muster enough financial ability. I find no force in this contention. Article 6 of the agreement provides that on the failure of the defendant to perform the contract the plaintiff shall be entitled to obtain specific performance of the contract through Court.
Article 7 provides that in case of frustration of the contract by the action of the defendant, the plaintiff shall be entitled to refund of earnest money and damages. These terms are in consonance with the legal rights of the plaintiff even in absence of such stipulations. Article 8 stipulates that in case the plaintiff seeks extension of time, the defendant shall have no objection to extension for four months provided the plaintiff pays a further sum of Rs, 15,000 out of the balance of consideration. Article 9 stipulates that in case the plaintiff still fails to complete the transaction within the extended time the defendant shall have the option to refund the earnest amount less ten per cent. And cancel the agreement. Finally Article 10 provides that in case the defendant fails to refund the amount as above within two months the plaintiff shall have the option to purchase the property by paying the remaining balance. I find nothing in these terms to render the agreement voidable for undue influence or fraudulent misrepresentation. The finding to the first part of this issue is therefore in the negative and I hold that the agreement was executed by parties voluntarily.
8. Issues Nos. 2, 6, 9, 10 and 11 -It would be convenient to consider these issues together. Mr. Siddiqui did not press the bar pleaded on he basis of Registration Act, Stamp Act and Transfer of Property Act.
9. It was contended that the plaintiff is not entitled to relief as the terms of the contract are such as give the plaintiff an unfair advantage over the defendant although no fraud or misrepresentation on the part of the plaintiff is proved (section 22, Specific Relief Act). It was also contended that the transaction in substance is a hard bargain for the defendant. There are no circumstances in evidence to support this submission and reliance is only placed on the terms of the contract already discussed above. Additionally it was argued that the conduct of the defendant after the agreement shows that he was waiting for the prices to go up before seeking enforcement of the contract. In this connection counsel referred to letter of the plaintiff sated 19-2-1971 (Exh. 1/11) after which he allegedly kept quiet for 2 years without doing anything. This contention is without foundation. The facts on the record show that on 14-10-1971 (Exh. 1/12) the defendant signed the application form for obtaining income-tax clearance certificate and gave a copy to the plaintiff.
The plaintiff thereafter, served notice dated 10-11-1973 finally calling upon the defendant to complete the transaction and filed the present suit on 24-12-1973. No question was put in the cross-examination indicating inaction or abandonment of the contract on his part. Nor is it the case of the defendant that he served any notice upon the plaintiff requiring him to complete the transaction within a specified time or complaining the delay in finalization of the Sale-Deed. I therefore see no force in the submission that merely because the plaintiff took no action for 2 years he can be disentitled in equity for the relief sought.
10. Mr. Siddiqui further strongly urged that the plaintiff was guilty of laches and submitted that by the delay in seeking the enforcement of the contract, the status quo has been disturbed owing to devaluation of Pakistani currency and fall of East Pakistan resulting in the rise in prices of real property. There is however, no evidence on record establishing that these factors in fact have affected the prices of real property. Nothing has been stated by the defendant in his evidence on this point. The only relevant material touching this question appearing on the record is an admission by the plaintiff that at the time of the contract the A value of the property was much less but this by itself is not a factor attributable to .Any conduct on the part of the plaintiff to alter the status quo, for the upward trend in prices of immovable property is a continuous process in Pakistan and in fact in most of the countries in the world. I am therefore, quite unable to agree that this could be made the basis for refusing the relief of specific pereformance specially when no specific evidence has been adduced to show in what proportion and by what factors the value of the property has increased. Mr. Siddiqui cited a large number of cases on this point but for reasons already stated these decisions are of no help to the defendant in this case The cases on which reliance was placed are reported in AIR 1922 P C 24 AIR 1915 P C 83, 43 I A 26 and AIR. 1921 Cal.
179. In the last mentioned case refusing specific performance, it was held that the plaintiff's conduct amounted to an abandonment of the contract and that there was a change in the value of the property which had occurred by reason of the delay attributable to the plaintiff. In the present case however, there is nothing to show that the plaintiff had abandoned the contract or that the change in value is in any way referable to the conduct of the plaintiff. On the question of laches Mr. Siddiqui cited AIR 1921 Sind 197. AIR 1915 Mad. 46 and AIR 1948 Cal. 147 and submitted that laches of about two years or so was held to be fatal to the relief of specific performance. The Supreme Court of Pakistan in Habibullah Khan v. Mohammad Ishaque (1), laid down the law on the aforesaid points clearly. It was remarked at page 509 of the report as under:- "In a case where such a relief is sought can the defendant be entitled to raise the plea of delay as a defence to the suit, even where the delay does not amount to a bar under the statute of limitation?
The discretion, it is now well settled, must be exercised on principles substantially equitable. Equity does not, however, proceed upon a priori basis. It has therefore, never treated delay simpliciter as a bar. Unless the delay has caused some prejudice to the other party, equity has not intervened to excuse performance of a contract. So long as matters remained in status quo and there is nothing to show
(1) PLD 1966 SC 505 ' that the party called upon to perform has been misled by the inaction of the other party to alter his position in such a manner as to make it inequitable to force him to perform his part of the contract, lapse of time short of the period prescribed by the Limitation Act should not be allowed to operate as a bar to the claim of the relief.
' It may be taken to be fairly well settled that if the persons seeking performance has not committed such delay as would cause prejudice to the other side or would amount to waiver or acquiescence on the part of the person seeking performance, !Aches by itself would not be a sufficient ground. Thus until it can be shown that the plaintiff in the suit had actively done something to lead the defendant to suppose that he had abandoned his claim against the latter, the doctrine of laches would have no application in cases where the statute of limitation has fixed a date for suing for performance."
' In Mohammad Wazir v. Jehanglrl Mal (1) the rule was laid down that inaction may bar the claim for specific performance only in case the claimant knows that the party against whom he has a claim is altering his position in the belief that the claimant has abandoned or will not enforce his claim and even then, the claimant does nothing.
11. For the foregoing reasons I have reached the conclusion that the defendant committed breach of the agreement and that there are noIC circumstances disentitling the plaintiff to the relief of specific performance.
12. Issue No, 3.-As to this issue Mr. Siddiqui made a strange argument. It was contended by him, with reference to clause 3 of the Agreement between the parties that the contract was to be performed within 5 months and consequently the breach occurred on the expiry of that period w. e. f. The date of the contract namely, 4-5-1970. The suit having been filed on 24-12-1973 the counsel contended, the suit was barred by limitation. It was submitted in reply by Mr. Saeeduz Zaman and rightly so that clause 3 of the Contract, which has been reproduced in the opening part of this judgment, does not prescribe 5 months' time for the performance of the contract but that the agreement provided for obtaining of income-tax certificate and other documents by the defendant within this period. Clause 9 of the Agreement clearly stipulates for the registration of the Sale-Deed within a period of 9 months. Consequently the minimum stipulated period for performance of the contract would be 9 months from the date thereof, by which the suit would be clearly in time. However, on 3-10-1970 (vide Exh. 1/8) the defendant himself applied for extension of time which was agreed to by the plaintiff at least for 2 months. On 14-10-1971 (vide &h. 1/12) the defendant admittedly signed application for obtaining income-tax clearance certificate which clearly indicates his willingness to perform the contract up to that time. Be that as it may, time is not ordinarily regarded as the essence of the contract. It was held in Essa Bhoy v. Saboor Ahmed
(2) that it is well settled principle of law that in any contract relating to immovable property, time is not of the essence of the contract. The issue must therefore be decided against the defendant.
13. Issues Nos. 4 and 5.-These issues relate to the frame of suit and its maintainability. It was contended by Mr. Siddiqui that the plaintiff has not specifically pleaded his readiness and willingness to perform his part of the contract. It is in the evidence that the plaintiff called upon
(1) AIR 1949 Lah. 72 (2) PLD 1973 SC 39 ' the defendant by his letter dated 26-9-1970 to complete the formalities so that the sale could be concluded. Once again the plaintiff urged upon the defendant by his letter dated 19-2-1971 to obtain the income-tax clearance certificate to avoid further delay in the matter and finally served legal notice dated 10-11-1973 calling upon the defendant to complete the sale within 15 days. The plaintiff was therefore demonstrably eager for performance of the contract. However, in view of the clear dictum laid down in Essa Bhoy's case already referred, the contention has no substance. It was held that where the defendant is found to have committed breach of contract, it is not obligatory on the part of the plaintiff to prove his willingness to perform it up to the date of filing of the suit and that the plaintiff is absolved D from showing that he was ready and willing to perform his part of the contract where the defendant has definitely repudiated the contract or has ,committed breach thereof. It is apparent from the stipulations contained in the agreement that it was for the defendant to obtain the income-tax clearance certificate. The defendant has made an oral allegation that the plaintiff had taken upon himself to obtain the said certificate. But apart from the bare statement of the defendant there is nothing to indicate that the terms of the contract were altered in the manner alleged. In fact no such oral evidence would be admissible in proof of the variation dig terms of the written contract, in view of the bar contained in sections 911 and 92 of the Evidence Act. No other argument was advanced as to these -two issues. My finding is therefore, in the negative as to both issues.
14. Issue No, 7.-The only contention of Mr. Siddiqui as regards this issue was that the plaintiff committed breach of his promise to pay the further sum of Rs, 15,000 as contemplated in clause 8 of the Agreement. A bare perusal of clause in question would show that the sum of Rs, 15,000 was payable in case the plaintiff sought extension for registration of the Sale-Deed after the defendant obtained all the certificates and documents within 5 months and intimated the plaintiff for registration of the Sale-Deed. I have already held that the defendant committed default by not obtaining the income-tax certificate. The question of further payment of Rs, 15,000 by the defendant, therefore obviously did not arise. Accordingly the agreement between the parties did not lapse and remained enforceable at the instance of the parties.
15. No other issue was pressed and no other argument was advanced by Mr. Siddiqui.
16. In view of the conclusions and findings arrived at by me, this suit is decreed for specific performance as prayed with costs. The plaintiff is further required to deposit in Court the balance of consideration amounting to Rs, 2,05,000 (Rupees two lass and five thousands) within 6 months and in case of his failure to do so the suit shall stand dismissed with costs on the lapse of the aforesaid period.