' MUHAMMAD AKHTAR SHABBIR, J.--- This judgment will decide Regular First Appeal 166 of 1989 and Regular First Appeal 211 of 1991 (cross-objections), which arise out of judgment and decree dated 22-6-1989 of learned Civil Judge Faisalabad.
2. On the basis of agreement of sale dated 22-8-1983, in respect of land measuring 48 Kanals and 19 Marlas, Haji Abdul Rehman, appellant filed a suit for specific performance. It was claimed that Niaz Ali respondent had agreed to sell land in issue in consideration of Rs, six lacs, received Rs,1,50,000 but did not execute sale-deed in accordance with the agreed terms of sale. It was maintained that gain tax etc. Was payable by the vendor who did not perform his obligation and also did not execute the sale-deed, though the appellant remained ready and willing to do the needful. It was also alleged that notice, dated 1-10-1984 (received on 4-10-1984) was served upon the appellant which was followed by notice, dated 13-10-1984 claiming recission of the contract. On the plea that the appellant remained ready and willing to perform his part and that the transaction could not conclude due to default on the part of respondent, the appellant prayed for enforcement of the agreement under decree of the Court.
3. Niaz Ali respondent, defended the suit, by taking the plea that the appellant never had the funds to pay the balance price, the needful under the agreement was not done by the appellant and that the deed was not procured even during the extended period. It was added that by fraud, the brother of appellant procured agreement dated 29-8-1984 and even the terms thereof were not implemented. In this backdrop, dismissal of the suit was prayed.
4. Factual and legal controversies appearing in the pleadings were given the form of following issues:--
(1) Whether the plaintiff is estopped by conduct? OPD
(2) Whether the plaintiff introduced fresh terms of agreement and is not entitled for specific performance? OPD
(3) Whether the suit is mala fide and fraudulent? OPD
(4) Whether the suit is frivolous and the defendant is entitled to recover special costs from the plaintiff? OPD
(5) Whether terms of the sale agreement have not been recorded in accordance with consent of the defendant? OPD
(6) Whether the plaintiff failed to perform his part of contract? OPD
(7) Whether the defendant agreed to extend date for completion of sale deed and handed over partial possession of the suit property in May, 1984 in favour of the plaintiff? OPD
(8) Whether the defendant executed writing dated 29-8-1984 and the date was extended for completion of sale-deed up to 25-9-1984? OPP.
(9) Whether the defendant failed to perform his part of contract and the plaintiff is entitled for specific performance of sale agreement on payment of Rs,4,50,000? OPP
(10) Relief.
5. Appellant produced Muhammad Hassan Sub-Registrar P.W.1, Haji Ghulam Ahmad P.W.2, Ishfaq Ahmad Patwari P.W.3, Mirza Abdul Haq P.W.4 and himself appeared as P.W.5. Respondent produced Allah Ditta D.W.1, Nawab Din D.W.2, Abdul Hameed D.W.3, Syed Aziz Ahmad D.W.4 and himself appeared as D.W.5.
6. Learned Civil Judge, vide judgment, dated 22-6-1989 declined specific performance of the agreement but, however, directed that the earnest money of Rs,1,50,000 be returned to the appellant within one month from the date of order.
7. Learned counsel for the appellant argued that the learned Civil Judge misconstrued the pleading and evidence while assuming that the appellant intended to enforce terms other than those contained in the agreement. It was contended that duty rested upon the Court to determine the real terms of agreement for enforcement of the agreement according to the intentions of the parties. It was added that by allowing appellant relief of return of earnest money and declining the defence of sufferance of losses, raised by respondent, the trial Court virtually accepted the plea of the appellant that he was not at fault and this in itself should have been a ground to enforce the agreement.
8. Learned counsel submitted that the appellant appeared before the Sub-Registrar while respondent did not respond and that the suit was filed immediately on the receipt of the notice when it was observed that the respondent was not inclined to perform the agreement. Learned counsel maintained that the discretion had been exercised arbitrarily and against the settled Principle of Justice. Lastly learned counsel submitted that the appellant was prepared to pay any amount which may be deemed reasonable and fair, by this Court, over and above the price already agreed and that the agreement should be enforced.
9. In reply, it was argued that time was essence of the contract, the appellant did not perform his part under the agreement and that a different agreement was being enforced which could not be allowed and also that the appellant was estopped by his conduct to file the suit. It was added that the suit was not maintainable and that the appellant was not entitled to the refund of the earnest money.
10. We undertook the exercise of minutely looking into the entire evidence on record and have also extended our careful thoughts to the respective submissions on both sides.
11, In this case, execution of agreement of sale dated 22-8-1983 Exh.P.2 and payment of Rs,1,50,000 as earnest money was not disputed. It was also not denied that according to the original agreement the transaction was to be completed till 10th of January, 1984. It is an undenying fact that though the sale-deed was not concluded till 10-1-1984 yet the agreement was not rescinded and instead respondent sent notice dated 1-10-1984, Exh.P.3, in which the appellant was notified that the sale-deed should be completed within seven days from the receipt of notice failing the agreement, would be rescinded. The parties are at variance on the question as to which one of the two was at fault for non-completion of the deal within the period of notice. It is also in the evidence that during the time when appellant had gone to 'Hajj', an agreement Exh.D.3 was executed between the respondent and Abdul Haq, brother of the appellant by which Abdul Haq promised to pay the price till 25-9-1984 for getting deal completed and in terms thereof a cheque was issued for Rs,one lac which could not be encashed.
12. As far as the agreement Exh.D.3 is concerned, the appellant is not signatory of the document and the findings of learned Civil Judge on issue No,8 are that the agreement was between Niaz Ali Khan (respondent) and Mirza Abdul Khaliq and said alleged agreement had nothing to do with the agreement of the appellant, Exh.P.2. This sounds well, as appellant is not a party to that document and even the statement of Abdul Haq as also the contents of the document indicate that the respondent agreed for the execution of sale-deed in favour of Abdul Haq, till 29-9-1984. Abdul Haq did not make any payment nor the cheque for the token amount issued by him was encased.
Abdul Haq is not the plaintiff in this case nor applied for enforcement of the said agreement and, therefore, it was rightly concluded that the plaintiff had nothing to do with the agreement of appellant.
13. The question for consideration will be, as to whether time was essence of the contract and if not, whether the appellant is entitled to specific performance. The learned Civil Judge, took the view that the appellant intended to enforce different terms than those contained in the agreement of sale Exh.P.2 and cannot be allowed specific performance, therefore, he allowed the return of earnest money of Rs,1,50,000 to the appellant. As noted supra the execution of the agreement and payment of earnest money are not in issue. According to the original agreement the sale-deed was to be executed till 10-1-1984 which was not executed. Admittedly no notice of recession of the agreement was given on the expiry of the period initially fixed in the agreement Exh.P.2 nor does the evidence indicate that the parties ever treated time as essence of the contract. From the notice dated 1-10-1984, Exh.P.3, it is discernible that the respondent treated the agreement as alive and desired enforcement thereof within one week. If time was essence of the contract, then the respondent need not to offer for enforcement of the agreement after 10th of January, 1984. The issuance of notice dated 1-10-1984 proved two things viz, the respondent did not feel aggrieved by any of the act of the petitioner in the past i,e, from the date of execution of the agreement of sale dated 22-8-1983 and that he did not consider time as essence of the contract. If the appellant had failed to perform his respective obligations under the sale agreement before 10-1-1984, the respondent could have simply informed that on account of the breach of contract, the agreement was no longer enforceable and was accordingly rescinded. Same would have been the stand if time was the essence of the contract. Having not treated time as essence of the contract, the respondent could not subsequently plead that the time should be treated to be a primary condition for the enforcement of the agreement. Another question will be, as to whether the respondent could unilaterally fix time for execution of the sale-deed and treated it as essence of the contract. Simple answer will be that this will not be permissible. Parties have to consciously that the time would be the essence of the contract and its breach would automatically result in recission of the contract. After the expiry of the initial period in the agreement, the appellant did not treat the time as essence of the contract and, therefore, he could not in law, unilaterally fixed one week's time for the enforcement and then attempted to resile from the commitments by assuming the time as essence of the contract., Reference can be made to Abdul Hamid v. Abbas Bhai-Abdul Hussain Sodawaterwala PLD 1962 SC 1.
14. The next question for consideration will be as to whether the appellant remained ready and willing to perform the agreement and was entitled to the specific performance. As note supra, the respondent by sending notice, dated 1-10-1984, kept the agreement alive, and thus, it will have to be seen if the sale-deed could not be subsequently executed due to the default of the appellant or on account of the conduct of respondent. Previous circumstances will be deemed to have been accepted by the respondent by not rescinding the contract through his notice dated 1-10-1984, and it will, thus, have to be seen as to how, they proceeded after 1-10-1984. The notice was received on 4-10-1984. Appellate produced evidence to prove that he approached the respondent for preparation of sale-deed and registration thereof on receipt of balanced amount of consideration.
It is claimed that the respondent was called upon to appear before the Sub-Registrar for doing needful and that appellant did appear before the Sub-Registrar but the respondent did not turn up.
Original application Exh.P.1, moved before the Sub-Registrar Faisalabad has been produced which bears the endorsement of the Sub-Registrar, to the effect that the appellant appeared before him but the respondent did not turn up. It is stated in the endorsement that the application was kept pending from 9-00 a.m. To 12-00 Noon and during this period the case was called 3/4 times but the respondent did not appear, therefore, the application was handed over to the appellant with the endorsement. P.W.1, Sub-Registrar appeared before the Court and deposed that the application Exh.P.1 was submitted to him, the endorsement Exh.P.1/1 was in his handwriting, the original agreement Exh.P.2 was produced before him and that he dealt with the application. Ishfaq Ahmad Patwari Halqa P.W.3 deposed that respondent did not obtain copy of Fard Jamabandi till 11- 10-1984, which was required for preparation of sale-deed and registration thereof. Appellant himself appeared as P.W.5 and deposed that he approached the respondent for the sale-deed and ultimately asked him to appear before the Sub-Registrar but the deed could not be prepared or registered due to the default on the respondent. It is also important to note that the suit was filed on 22-10-1984 i,e, within 17 days from the receipt of the notice while the application Exh.P.1, for registration of the sale-deed was presented before the Sub-Registrar on 11-10-1984. These circumstances indicate that the appellant was interested to get the deed concluded and that on receiving notice, he firstly approached the respondent, then appeared before Sub-Registrar and remaining unsuccessful, he filed a suit to enforce the agreement without delay. The three successive actions, in a span of 20 days, makes the conduct of appellant quite obvious. As against this, the evidence of Patwari shows that the respondent did not prepare himself for the registration of the sale-deed as he never applied for certified copy of Fard Jamabandi which was required for description of property in the sale-deed and also for registration of the sale-deed before the Sub- Registrar. The respondent could not show, if he took any steps to do his needful part after sending notice dated 1-10-1984. The evidence is, thus, indicative of the fact that the appellant was ready and willing to perform his part.
15. Learned Civil Judge, was influenced by the argument that the appellant intended to enforce terms different than the terms contained in the agreement. Perusal of the agreement Exh.P.2 will show, that except sale price, the land subject-matter of sale, the date of execution of the sale- deed, the other material terms were not specifically mentioned. The terms pertaining to the other rights and liabilities of the intending buyer or of the vendor were not specified. Ordinarily the agreement discloses as to who is responsible for payment of the taxes till the registration of the sale-deed, the payment of gain tax, the duties necessary for the registration, of the sale-deed. It is true, that the expenses requisite for the sale-deed are ordinarily borne by the vendee and these expenses include the stamp paper, deed writer expenses, the registration fee, Local Council Fee but the duty to pay the taxes due against the property subject-matter of sale and also to pay gain tax, if in force, always rest on the vendor. Since the other respective conditions, pertaining to the liabilities of the two parties, were not specifically enumerated in the agreement, it gave rise to different versions as the appellant claimed that the payment of certain expenses was agreed to the liability of respondent while the respondent took the plea to the contrary. It was thus, not a case of enforcing different agreement or different terms as the appellant wanted the same land, which was mentioned in the agreement, intended to purchase at the same price with was given in the agreement and pleaded payment of same earnest money which was recorded in the agreement and admitted by the parties. The other dispute pertaining to the incurrent of expenses, which arose due to the circumstances hereinabove, could be resolved by the Court as the Court was to find out the real intentions of the parties and to enforce the terms of the agreement as actually agreed. The intending buyer could not be non-suited, on assumption that he was intending to enforce different terms. In the given circumstances, the refusal to grant specific performance was not warranted.
Appellant having proved, execution of agreement of sale, payment of earnest money, readiness and willingness to perform obligations under the agreement filing of application before the Sub- Registrar and appearance before him for getting the sale-deed attested and having filed the suit immediately after the notice and, therefore, he was entitled to the exercise of discretion in his favour.
16. The next question will be as to whether appellant should be made to pay the price as actually agreed or in view of the rising prices and delay due to the limitation, the respondent should be compensated. It is a settled rule, that one who seeks equity must do equity. Learned counsel for the appellant has himself offered that the appellant was inclined to pay additional amount as compensation, over and above the sale price already agreed for availing relief in discretionary jurisdiction. The sale price, original fixed, was Rs,6 lacs, the agreement was executed in 1983 and a period of 16 years has already elapsed. If the appellant had deposited balance sale price at the time of filing of the suit, the same could have been either paid to the respondent or invested in profit bearing scheme, which appears to have not been done. If the respondent had received the balance, he could have earn some profit on the same of which he has been deprived and on the contrary, the appellant at this stage will be getting the property, the price whereof has increased due to rise in prices. In these circumstances, we direct that the appellant should pay additional amount of Rs,2 lacs, over and above the sale price already agreed, for the purchase of land which in our view is fair and reasonable.
17. For the reasons above, we allow Regular First Appeal No, 166 of 1989 and dismiss the cross- appeal (Regular First Appeal No,211 of 1991). In result the suit for specific performance of the appellant stands decreed, subject to payment of Rs,8 lacs i,e, Rs,6 lacs original price plus Rs,2 lacs as compensation. Out of this amount, Rs,1,50,000 has been admittedly paid as earnest money and remaining Rs,6,50,000 is outstanding, which the appellant should deposit, if not earlier deposited, within two months from today. No order as to the costs.