' This judgment will decide Civil Revision No,164-D of 1986, which calls in question judgment dated 6-4-1986 of the learned Additional District Judge, Islamabad whereby appeal of the petitioner against judgment dated 7-4-1980 was dismissed.
2. Plot No,56, Street No,27, Shalimar-6, Islamabad was allotted in favour of the petitioner vide allotment Letter No, CDA/EM/F-6/2/57/63, dated 21-4-1965. In terms of the allotment letter, requisite payments were made by the petitioner who was also delivered possession of the plot. An agreement is claimed to have been executed containing terms and conditions of the allotment.. It is claimed that the construction was not raised within the building .Period for which certain extensions were allowed and subsequently respondent issued letter dated 18-8-1973 informing that the allotment was cancelled and plot was resumed. This letter gave rise to the present litigation.
3. Petitioner filed a suit for declaration to the effect that letter dated 18-8-1973 was illegal, without lawful authority and of no legal effect. A decree for mandatory injunction, directing the respondent to recall the letter/order and to sanction the plan for construction of house was also claimed. It was alleged that the petitioner had deposited total dues, she was allowed some extensions, the matter of transfer of plot to children was kept in abeyance which created confusions and that extensions were granted to other allottees but the petitioner was treated discriminately. The suit was resisted by respondent who maintained that the petitioner did not apply for necessary sanction for construction or raised the requisite construction within the stipulated period and that extensions granted from time to time were not utilised in a better way with the result that respondent had no option but to resume the plot.
4. After considering the evidence on record, the learned Senior Civil Judge, Rawalpindi dismissed the suit vide judgment dated 7-4-1980. Appeal filed by the petitioner was also dismissed by the learned Additional District Judge vide judgment dated 6-4-1986.
5. Learned counsel for the petitioner argued that, the respondent had been granting extension in time for raising construction to other allottees and have never resorted to resumption of plot as was done in the case of the petitioner and, therefore, the impugned action was discriminatory. It was contended that since the respondent had been granting extension from time to time, therefore, the petitioner had legitimate expectancy that the extension would be allowed and resumption will not take place. It was added that the respondent having adopted the practice of granting extension and uniform practice had attained the legal force, a different treatment could not be extended in the case of the petitioner in departure to the normal departmental practice. It was further submitted that the petitioner applied for transfer of property when the respondent asked for deposit of surcharge and to consider the request later but without informing the petitioner, promptly, about refusal to entertain request for transfer, the order for cancellation of plot was passed, with the result that the petitioner was kept in dark.
6. In reply, learned counsel for the respondent submitted that it was a case of extreme negligence on the part of the petitioner who did not take steps within the requisite period. Learned counsel submitted that the petitioner having failed to raise construction within the prescribed period, action was rightly taken against her and that the two Courts below having refused to intervene, no ground was made out for interference at this stage.
7. I have given due consideration to the submissions made, in the light of the material available on record.
8. The main reason which prevailed with the Courts below for declining relief to the petitioner was that she had been seeking extension in building period but did not complete construction and on this assumption, it was inferred that the action of respondents in cancelling the plot did not warrant interference. It appears that the two Courts below, did not properly comprehend the issue inasmuch as neither the terms of the contract were taken in consideration nor the relevant law governing respective rights of the parties in the matter of implementation and cancellation of the agreement was kept in view.
9. The question for -consideration was as to whether time was essence of the contract and if it was not, could the authority cancel allotment without warning the other side beforehand, about the contemplated action. In case time was essence of the contract and the party having the right to rescind the same fails to exercise the option and instead extend the period, would it not be a case of waiver. Another question would be whether in the circumstances of the case the petitioner was justified in having the legitimate expectancy that the extension being 9 routine matter would be allowed as it was done in the other cases. Another question was as to whether the respondent ever resorted .o penal action in the matter of other allottees in the same scheme. Still one more question to be considered is as to whether the respondents having opted to consider the request of transfer on payment of surcharge could take an action for cancellation of the contract without deciding the pending request for the transfer of plot. In this coret, it will have to be seen if the petitioner was not justified in assuming that no penal action would be taken till such time the issue pertaining to transfer would be resolved as it was yet to be decided as to who would raise the construction, i,e, the petitioner or the transferee from her.
10. The agreement was not brought on the record, by either side and both of them banked upon certain correspondence exchanged between them. In the absence of the agreement, it will be a difficult proposition to assume that time was essence of the contract, particularly keeping in view the conduct of the respondent. Admittedly, after the expiry of initial period of construction, the respondent allowed extensions to the petitioner and the last extension was allowed from 1-7-1972 to 30-6-1973 on payment of 5% surcharge. This fact is not disputed and is otherwise supported by Exh.P.l and Exh.P.2. It is not the case that the surcharge was not deposited. Admittedly, the respondent did not take action for the rescission of the contract, on the expiry of initial period of construction nor refused extension by maintaining that time was essence of the contract. It is also undying fact that the respondent did not issue notice for rescission of the contract, when the building was not constructed in the initial period prescribed in he agreement. By taking no penal action and allowing extensions, the respondent treated the time being not essence of the contract and waived the right to rescind the agreement. It is true that even if the time is not essence of the contract, yet it cannot be left open for the parties to prolong the duration of the agreement for performance of respective obligations and that the obligations are to be performed within reasonable time but in such eventuality, before rescinding the contract, the party has to warn that if the needful under the contract is not done within reasonable time, the contract will be treated to have been rescinded. In this case, admittedly no such notice was given before the action was taken.
11. In "Sh. Muhammad Shaft v. Lahore Improvement Trust" (PLD 1959 Lah. 1), it was ruled that by allowing extension, the Trust waived its right of forfeiture and in law it was not entitled to take action on the plea that the time condition was not strictly adhered. It was further observed that if no action is taken and no reasonable time is fixed then penalty could not be imposed and that in such situations, the every party has a general right to have the contract performed within a reasonable time.
12. As noted supra, in the present case, the respondent did not issue any notice of warning, asking the respondent to complete the construction within reasonable time, failing the agreement will be rescinded and amount deposited would be forfeited and, therefore, the impugned action. Could not be approved. The two Courts below were influenced by certain correspondence which were exchanged between the parties and on that basis it was assumed that the suit was barred by the principle of laches. It was ignored that those correspondences were made during period, preceding the letters by which the extensions were allowed. Any letter exchanged before the expiry of initial period of construction ended in futility for the reason that the respondent did -not take at penal action and instead opted to allow extension. The last extension having been allowed in 1972, there was no subsequent show-cause notice or letter of warning for rescission of the contract in the event of non-completion of construction within reasonable time and, therefore, the cancellation letter was untenable.
13. It will be noteworthy to consider if clause in the agreement, pertaining to completion of constriction was, regulatory in nature or it could have a penal effect on the primary contract. The respondent agreed to give the plot in consideration of certain compensation which the petitioner paid and, therefore, so far as the initial consideration of the contract is concerned the same had already transferred to the other side and the transaction was complete. The requirement of completing construction within a specific period was with a view to regulate the development work in the area of scheme and also to ensure that the scheme is properly implemented. Any default in regard to the clause pertaining to building construction, may invite penalty in the form of surcharge for the delay caused as levied in the past but cannot possibly be deemed mandatory which could result in the rescission of the basic contract or annulment of the transaction, already completed. On this account too, the impugned action was untenable.
14. It is also notable, that the petitioner had applied for the transfer of the plot on the basis of gift and had requested for - its recognition by the respondent. Vide letter dated 21-7-1972, Exh.P.1, Assistant Estate Officer of respondent informed the petitioner that her request for transfer was considered and that she should first deposit the amount of surcharge for extension of building period. Similarly through letter, dated 31.-3-1973. Exh.P.2, the petitioner was required by the Assistant Estate Officer to remit the atrium-it of surcharge which was accordingly remitted. As a matter of fact, after the deposit of the surcharge for extension in building period, the respondents were required to take decision on the request for transfer and to apprise the petitioner about its result.
Obviously, if the transfer would be granted, the construction would have to be raised by the transferee who would be required to observe certain formalities and obtain sanction in their own name and if the request for transfer was to be declined, then the petitioner could be expected to take steps for construction including obtainment of necessary sanction for raising construction.
Keeping in view the tenor of letter, Exh.P.2 the petitioner could legitimately expect that her request for transfer would be accepted as she had deposited the amount of surcharge and that if it had to be rejected, the same could have been done at the very beginning. In this situation, there were possibly no occasion for her to start construction, unless her application for transfer had been declined.
15. Amazingly, the respondents did not take timely decision and instead, vide letter, dated 18-8- 1973, Exh.P.5, resumed the plot, forfeited the price along with interest and also rejected the request for transfer. This was wholly unjust and untenable. In the absence of any proper decision to refuse transfer and asking the petitioner to complete construction within the extended period already allowed, the respondent could not at once decide to decline transfer and also to resume the plot.
The action was, therefore, too arbitrary, unfair and unwarranted in law. If the petitioner had been informed, immediately after the extension was granted, that the request for transfer was not accepted and that she should raise construction and the petitioner had failed to do the needful, then of course there might have been some justification, to proceed against the petitioner but since no such intimation was given and the petitioner was kept in dark, therefore, the sudden and prompt action of the respondent in simultaneously refusing transfer and resuming plot, could not sustain in law. Even otherwise, having already granted extension on the previous request, and permitting extension to the other allottees in the scheme, the respondents, in the absence of any specific circumstance or exceptional reason, could not treat the petitioner with discrimination.
16. The two Courts below, misinterpreted the documentary evidence, misapplied the law and rested the decisions on erroneous assumptions. The impugned judgments, therefore, suffer from material illegality and legal infirmities.
17. For the reasons above, this revision petition is accepted; impugned judgments are set aside and the suit of the petitioner is decreed. The decree shall not, however, debar the respondent from taking further action in accordance with law after giving reasonable time to the petitioner to complete construction, on payment of prevailing surcharge.