1. The brief facts per the plaintiff are that by an agreement dated 23-6-1993, the plaintiff agreed to purchaie and the defendant agreed to sell, transfer, assign and convey unto the said plaintiff a property bearing No.D/271, measuring 603 sq. yds. with residential house constructed thereon, situated in K.D.A. Scheme No.1-A (Extension), Karachi-East for a total sale consideration of Rs.31,00,000 free from all encumbrances, charges, taxes, dues, assessments, cesses, rates mortgages, disputes, burdens and liens of any nature whatsoever with vacant physical possession deliverable to the plaintiff. It is the case of the plaintiff that the plaintiff had paid to the defendant a sum of Rs.5,00,000 as part payment and had executed an agreement of sale dated 23-6-1993 (Exh.2).
2. It is further the case of the plaintiff that according to the agreement the balance payment of Rs.26,00,000 was to be paid at the time of registration and handing over of the vacant and physical possession of the said property alongwith the title documents. It is his case that the defendant was to make out a valid, subsisting and marketable title of the said property free from all encumbrances, charges etc. Mr. Tufail H. Ibrahim, Advocate for the plaintiff has urged that after the execution of the agreement Exh.2 the defendant kept the plaintiff on promises and assured him from time to time that the formalities for the mutation of the said property were being processed and in due course the defendant would submit the photo copies of all the original title documents alongwith the upto date search certificates, paid bill of the taxes etc. It was urged that the plaintiff on several occasions had requested the defendant to complete her obligations as aforesaid and place before him the original title documents for examination and verification as the plaintiff was ready and willing to conclude the agreement (Exh.2). The defendant, however, it was stated, never. complied with such requests. It has been stated in the plaint that the defendant for the first time through her counsel by letter dated 20-1-1994 informed the plaintiff that the defendant had cancelled the sale agreement on account of the fact that the plaintiff had failed to pay the balance sale consideration wherefore the advance, of Rs.5,00,000 already paid by the plaintiff to the defendant stood forfeited. Such letter has also been produced as Exh.11. The plaintiff while placing the facts stated that by letter, dated 30-1-1994 Exh.12 the plaintiff denied the allegations as contained in the Exh.11 and by the said letter the plaintiff again requested the defendant to complete her obligation and finalise the sale in favour of the plaintiff, it was stated, to show bona fide and willingness of the plaintiff, the plaintiff's counsel, alongwith the letter (Exh.12) sent a copy of the proposed conveyance deed of the said property with a request to approve the same so that the sale could be concluded immediately. Such conveyance deed is also exhibited as Ex.h.15. It was argued that neither the defendant nor her legal consultant replied to the said letter, however, the plaintiff was informed through his estate agent that the defendant would not complete the sale unless the agreed sale consideration is increased further by the plaintiff.
3. It is the case of the plaintiff that though the time for completion of sale was agreed by and between the parties to be the essence of the agreement, but such could not be deemed as' such by conduct, as the defendant was first required to conclude formalities. The defendant had never informed the plaintiff that she had got mutated the property in her name and never requested the plaintiff to pay the balance sale consideration. By the only letter written (Exh.11) for the first time the defendant unilaterally cancelled the sale agreement. It was stated that the refusal to act on the agreement or conclude her obligation as contained in the agreement or forfeiture of the amount paid was without lawful authority. The plaintiff was and is, it was stated, ready and willing to conclude the said contract and that the plaintiff is pecunious.
4. On the other hand, Mr. Ghafoor Mangi stated that the defendant denying the contentions of the plaintiff and taking preliminary objections as follows filed written statement:--
(1) That the suit/plaint as framed or filed is not maintainable in law and facts, and in particular because there is no subsisting agreement on the date of filing of the plaint as alleged or at all.
(2) That the plaintiff has no legal cause of action as alleged or at all for the reasons that the agreement of sale contrary to its recitation was without actual consideration.
(3) That the plaintiff has not come to the Court with clean hands and has disentitled himself to the equitable relief especially (i) because of his sharp conduct; (ii) and suppression of material facts in that the agreement of sale was originally made on 27th February, 1993, between the plaintiff and the late Mr. Aftab Ahmed Alavi, Barrister-at-Law and Advocate of Supreme Court of Pakistan, the husband of the defendant and on his death on 1st of April, 1993, the plaintiff exploited the situation by (a) making her sign a harsh agreement on 23-6-1993; (b) by making her incorrectly admit that she has received the sum of Rs.5,00,000 (Rupees five lacs only) in cash through Pay Order No.031871, dated 27-2-1993 under the threat of dire consequences of her forcible eviction from the house during the period of her Iddat.
(4) That the plaintiff is guilty of patent/material misrepresentation because contrary to his false claim para.9 of the agreement, dated 23-6-1993, states/stipulates the pre-condition that the transaction was agreed to be completed on and before 31st of August, 1993, and that the time was the essence of the agreement"
5. It was stated by Mr. Ghafoor Mangi for the defendant that no amount was paid to the defendant by the plaintiff. It was stated that the plaintiff had originally entered into an agreement of sale with the late husband of the defendant on 27-2-1993 and that, the said amount of Rs.5,00,000 was paid to the late husband of the defendant, photo copy of the sale agreement, dated 27-2-1993 has been produced as Exh.17-B. It was stated by the defendant that time was essence of the agreement and the transaction was to be completed on or before 31-8-1993 and that, the real fact of the matter was that the plaintiff had entered into an agreement with the deceased husband of the defendant but he did not fulfil his terms of the agreement with the deceased husband of the defendant and on the contrary he had been showing premises to different purchasers for sale as the plaintiff was the broker and not the real purchaser. It is the case of the defendant that the late husband of the defendant had executed a gift deed in favour of the defendant and had to spend a sum of Rs.1,23,000 on the completion of such gift deed. It was stated that the husband of the defendant suffered from serious ailments and he had desired to sell his bungalow to undergo his medical treatment but the plaintiff intentionally and deliberately avoided to complete the terms of the agreement only with the intention to purchase the bungalow at a lesser price. The defendant's husband had expired due to the conduct of the plaintiff and the defendant had since got the premises mutated in her name and a copy of the said mutation has been filed with the written statement as Annexure "B" which is a letter of Karachi Development Authority, dated 19-8-1993 mutating the said property in favour of the defendant on account of a registered gift deed.
6. The defendant has denied that she was not willing to perform her part of the agreement but the only ground that was taken was that the plaintiff was not a real purchaser as he kept ,the matter pending only to wait for the increase of price of the premises. It is the case of the defendant that the plaintiff never tried to perform his part of the contract and as such she was within her right to terminate the agreement and forfeit, the advance of Rs.5,00,000 paid by the plaintiffs.
7. The following issues were settled:-- (1)Whether the plaintiff or the defendant has committed breach of the sale agreement, dated 23- 6-1993?
8. (2)Whether time for completion of the sale was the essence of the Agreement?
9. (3)Whether the plaintiff is entitled to specific performance of the sale agreement, dated 23-6-1993?
10. (4)Whether the plaintiff is entitled to any damages/compensation due to the breach of the agreement?
11. (5)What should the decree be?
12. The evidence was led on commission where the plaintiff Ashraf Hanif examined himself and the defendant Mst. Najma Alavi examined herself. Both filed affidavits in evidence whereby the plaintiff produced various exhibits from Exh.1 to Exh.16 and the defendant produced Exhs.17, 17-A and 17-B.
13. The crux of the issues that had been framed basically is whether the agreement of 23-6-1993 has to be performed or not. The issues are such that they have to be treated together as such the issues and each of them are not being treated separately.
14. The affidavit-in-evidence filed by the plaintiff is supported by various documents namely the agreement of sale dated 23-6-1993, original whereof was duly filed and produced as Exh.2 aforestated. The agreement of sale Exh.2 is between Mst. Najma Alavi, widow of late Aftab Ahmed Alavi and the defendant and Ashraf Hanif son of Hanif Qasim, the plaintiff. In the agreement, it is categorically stated that the defendant is seized and possessed of and is otherwise full, absolute and lawful owner of the residential plot of land bearing No.D-271 measuring 603 sq.yds. with single storey bungalow built thereon situated in K.D.A. Scheme No.1-A Extension, Karachi through. a gift deed registered at Serial No.721 at pages 96 to 99, Volume 373 of Book 1 Additional dated 8-4-1993, but the same was required to be transferred in her name by the K.D.A. for which necessary application had been submitted. This is an important assertion in the agreement. It shows `categorically that, though, she had acquired the title in the property by way of required gift deed, but she was to have the property transferred in her name in the K.D.A. for which she had moved an appropriate application. In the agreement there is no time that has been fixed for the purposes of the completion of the transfer. Naturally the completion of the transfer had to be made by the defendant and it was she who was required to inform the plaintiff that such transfer had taken place. In the affidavit-in-evidence filed by the defendant the defendant has stated that she has since got the premises mutated in her name, copy whereof was .filed with the written statement as Annexure "B" and that the plaintiff was not at all entitled to acquire the title documents of the premises without making any payment within stipulated period. Annexure "B" to the written statement though not produced but has been referred to by the defendant and not objected to by the plaintiff, can be looked into. The date of the mutation order is 19-8-1993 whereas the date of the agreement of sale is 23-6-1993. From the reading of the agreement, one thing is absolutely clear, that it was the defendant who was liable to inform the plaintiff that the property had been mutated in her name. There was no way for the plaintiff to have known whether such had been done. It is only after this, that further proceeding, whether the plaintiff was interested to fulfil the conditions thereof could have been raised. In the written statement that has been filed by the defendant the ground that has been taken for not performing the contract, was, that the time was the essence of the contract, and that the transaction was to be concluded or completed before 31st of August, 1993. No doubt, the provision is contained in the agreement that the transaction had to be concluded on or before 31st August, 1993 and that, the time was stated to be the essence of the contract but this did not mean that, whereas on the one hand the defendant could delay and not inform the plaintiff that she is competent to conclude the transaction and then, take the plaintiff on warpath that as the time is concluded, therefore, the defendant would not proceed to conclude the same. This is not only unjust but is mala fide. Mr. Tufail H. Ebrahim has referred to the judgment of Sindh Industrial Trading Estate Ltd. v. Kemia Industries Ltd. 1999 CLC 1076. In the said case the allotment of plot which was in dispute contained a term that the industrial unit should be completed within eight months, the plaintiff could not do so due to failure of the defendant authority to provide infrastructure to the plaintiff as agreed to between the parties. In such a case it was held:-- ".... On the merits of the case learned counsel for the appellants submitted that as the time was the essence of the contract, the appellants were well within their rights to cancel the allotment order issued to the respondents and resume the plot where the latter failed to establish their industries therein within the agreed time frame. This argument touches issue No.5. No doubt time may have been the essence of the bargain between the parties, however, it cannot be said that one of the parties can be non-suited if it failed to perform its obligations under the contract due to the corresponding failure of the other party to perform its own obligation. The learned Single Judge has considered this aspect of the matter and has come to the conclusion that the appellants failed to provide the necessary infrastructure facilities i.e. roads, power and gas connections (excluding water connection) and hence could not be allowed to plead that the allotment was validly cancelled on this score and we see no reason to disagree with him...."
15. In another case of Haji Muhammad Yaqoob v. Shah Nawaz 1993 CLC 21 the learned Single Judge has held that section 55 of the Contract Act shows that when even where the time is of the essence of the contract the contract does not come to an end immediately upon expiry of the agreed time and only the non-breaching party acquired an option to put it to end which he may or may not exercise. Section 55 of the Contract Act reads as under:-- "55. When a" party to a contract promises to do certain thing at or before a specified time, and fails to do any such thing at or before the , specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promisee, if the intention of the parties was that time should be of the essence of the contract.
16. If, it was not the intention of the parties that time should be of the essence of the contract, the contract does not become voidable by the failure to do such thing at or before the specified time; but the promisee is entitled to compensation from the promiser for any loss occasioned to him by such failure. If in case of a contract voidable on account of the promisor's failure to perform his promise at the time agreed, the .promisee accepts performance of such promise at any time other than the agreed, the promisee cannot claim compensation for any loss occasioned by the non- performance of the promise at the time agreed, unless, at the time of such acceptance, he gives notice to the promisor of his intention to do so...."
17. In the case of Isso and another v. Muhammad Ismail and 2 others reported as 1992 M LD 1787, it was held:-- ' .....This brings me to the other point which has been a subject of debate before me viz. the question whether the time mentioned in an agreement is or is not of the essence of the contract.
18. The finding of the trial Court is that the time is made essence of the contract, and as regards the surrounding circumstances and the conduct of the parties, the same have also proved as that the parties had an intention to make the time as essence of the contract in their mind at the time of agreement Exh.113. Whereas the finding of the lower Appellate Court is that the contract would not have been materialized one-sided by merely making payment to the second respondent as the latter was also under obligation to perform her part of the contract. Ordinarily, non-payment of the full purchase money is not a ground for denying the plaintiff's claim for specific performance of a contract of sale.
19. In Jamshed Rhodaram Irani v. Burjarji Dhunibhai (AIR 1915 PC 83 = 431-A) A 26), Lord Viscount Haldone observed at page 85 = 33 as under-- 'Prima facie, equity treats the importance of such time limits as being subordinate to the main purpose of the parties, and it will enjoin specific performance notwithstanding that from the point of view of a Court of Law the contract has not been literally performed by the plaintiff as regards the time limit specified' ."
20. The above observations were approved by the Honourable Supreme Court in the case of Abdul Hamid v. Abbas Bhai Abdul Hussain PLD 1962 SC 1.
21. To the same effect are the observations of Lord Danis in Tilley v. Thomos (1867) 3 Ch. 61 = W.R.66 = 17 L.T. 4220 which read as under:-- "The construction is, and must be, in equity the same as in a Court of law. A Court of equity will indeed relieve against, and enforce specific performance, notwithstanding a failure to keep the dates assigned by the contract, either for completion, or for the steps towards completion, if it can do justice between the parties, and if (as Lord Justice Turner said in Roberts v. Berry (1853) 3 De G.M. & G. 284 = 22 L.J. Ch. 398 = 98 R.R. 139 = 20 L.T. (O.S.) 215) there is nothing in the express stipulations between the parties, the nature of the property, or the surrounding circumstances, which would make it inequitable to interfere with and modify the legal right. This is what is meant, and all that is meant, when it is said that in equity time is not of the essence of the contract. Of the three grounds .... Mentioned by the Lord Justice Turner, express stipulations requires no comment. The nature of the property is illustrated by the case of reversions, mines, or trades. The surrounding circumstances must depend on the facts of each particular case."
22. In Eskandar Ali v. Alharmra Begum PLD 1969 Dacca 214 a Division Bench of High Court of East Pakistan observed/held at page 231 as under:-- "The question whether the time mentioned in an agreement is or is not of the essence of the contract depends upon the intention of the parties to the agreement which is to be gathered from the facts and circumstances of the case. The mere fact that certain time is mentioned in the agreement for the performance of an act would not necessarily lead to the conclusion that the time specified was, of the essence of the contract. The real intention of the parties to the agreement is the determining factor, and is to, be deduced from all the surrounding circumstances of the case. The intention of the parties can be best ascertained from the agreements itself.
23. Applying the above principles to the agreement as found by the Lower Appellate Court, it must be held that time was not of the essence of the contract. The Lower Appellate Court gave cogent reasons in support of the above finding. This is in accord with the evidence on the record. I do not find any force in the contention of Mr. Panwahar...."
24. In the case of Abdullah v. Mohammed Siddique reported as 1992 CLC 1561 it was held:-- .... It is well-settled that mere insertion of a term in the agreement that a certain act will have to be performed up to a fixed time does not automatically' make time essence of the contract. The intention of the parties that time is the essence of the contract can be . gathered not only from the terms of contract but also from the surrounding circumstances, the nature of property and transaction involved in the matter. This is a suit involving transaction relating to immovable property in which the defendants have failed to comply with condition regarding completion of sale. They, therefore, cannot insist on performance within, the time fixed by the agreement."
25. It is clear from the reading of the above that a party if it was contracted making to do a certain thing at or before a specified time fails to do such thing by such specified time the agreement becomes voidable at the option of the promisee only if the intention of the party was that the time should be of the essence of the contract. It is important to note that no doubt the time was stated to be the essence'of the contract, but it was also an act whereby the seller, namely the defendant, was required to conclude the transfer in her favour else she would not have the right to conclude the sale-deed. It is categorically stated in the agreement that the balance sale consideration would be paid at the time of execution and registration of the sale-deed in favour of the vendee before the Sub-Registrar concerned at Karachi, there is a stipulation of agreement of transfer of property and handling over vacant possession therefor.
26. The learned counsel for the defendant Mr. Abdul Ghafoor Mangi vehemently argued that the time was of the essence of the contract, therefore, notwithstanding the fact that the defendant had not intimated the plaintiff of having concluded her part of the contract and where the contract had not been acted by the date stipulated in the agreement the contract shall fail and that the amount so paid as advance be forfeited.
27. I do not agree with the contention of the learned counsel for the defendant. In the entire arguments Mr. Abdul Ghafoor Mangi laid emphasis and said that he was not bound to disclose that all the documents had been completed and that the defendant was ready and willing to conclude the transaction. He stated that where the time was fixed for completion of contract and had not been extended beyond the period, by afflux of time the contract stood cancelled and which was done, according to him when the notice dated 20-1-1994 was given.
28. Mr. Mangi also argued that in fact the agreement was with the late husband of the defendant and that the defendant's husband expired. He stated that the amount of advance had been given to the husband of the defendant as such the said amount could not be treated to have forfeited under the present agreement. This is also incorrect on facts. The agreement of 23-6-1993 Exh.2 is an admitted document. It has been stated, however, to have been obtained under duress or coercion as the defendant was in Iddat and could not have excluded the same. However, the signature on the document and the contents thereof have not been denied. In the affidavit-in- evidence of Dr. Mst. Najma Alavi, the defendant, she states-- ".... the plaintiff exploited the situation by (a) adopting coercive measures and under the threat of dire consequences of her forcible eviction from the house with the help of number of" persons on 23-6-1993 during the period of her Iddat when I was living with my sister in the house having no other male member in the house and making her sign a fresh agreement on 23-6-1993; (b) by making her incorrectly admit that she had received the sum of Rs.5,00,000 (Rupees five lacs only) in cash through Pay Order No.031871, dated 27-2-1993 which was never received by me and is evident from the dates as date of fresh agreement is 23-6-1993 and Pay Order is of 27-2-1993 when my husband was alive. The agreement between the plaintiff and my husband in which the cut off date for registration of the sale-deed was 30-6-1993 but no efforts were made by the plaintiff for enforcement of that contract during the lifetime by my husband and even after his death no suit or any legal proceedings were taken by the plaintiff against the legal heirs of the deceased as the money said to have paid to him..."
29. She has produced a photo copy of the agreement as Exh . 17-B between Aftab Ahmed Alavi and Ashraf Hanif in which, there was a detail of the payment of Rs.5,00,000 and that in the said agreement also the date of the conclusion was 30th June, 1993. However, according to her own showing the said property was gifted by her husband through a deed of gift. The deed of gift has not been produced in evidence, but filed as Annexure "B" to the written statement. It shows that the said property was gifted to her. She had thereafter applied for mutation in her name and such was granted on 19-8-1993. This fact relates to the averments contained in the agreement of sale Exh.2. It is. clear from the agreement of sale that the gift was executed on 8-4-1993. There could be, therefore, no direct relation as to the conclusion of the sale under the first agreement i.e. 27th February, 2000. Exh.17-B as the time fixed for conclusion was 30th June, 1993 before which the transfer by gift had taken place. It is after the gift deed was executed that the present agreement of sale was entered into. There is nothing on record nor is there any evidence except the words of the defendant that the signature on the document Exh.2 was obtained under coercion or there was suppression of material facts or that the agreement was a harsh agreement and that she was made incorrectly to admit that she had received Rs.5,00,000. The onus was on the defendant, which she has not been able to discharge. Even if the argument of the defendant is taken to be correct, then also the present agreement Exh.2 would be nothing but a continuity, as probably it was in the mind of the husband of the defendant that due to his ailing health he may not be able to conclude the contract, as such the gift was made prior to the date of the conclusion of the contract with him. Notwithstanding the above, the notice dated 20-1-1994 that had been sent to the plaintiff by the defendant which has been filed alongwith the plaint, and exhibited as Exh.11 has to be taken into account. This document has not been denied in fact has been relied upon by the defendant. In the said letter which has been written by the counsel for the defendant, it has been clearly stated that "she had also received a sum of Rs.5;00,000 from you on account of advance money on 23-6-1993" and that subsequently in the same notice it has been stated that "... My client has revoked the aforesaid agreement of sale dated 23-6-1993 and has confiscated the advance money of Rs.5,00,000". The letter addressed by Mr. Mumtaz Hussain Shah, Advocate High Court on behalf of the defendant.
30. The documents on record clearly show that various letters have been written to the defendant by the plaintiff namely letter dated 14th November, 1993 Exh.5 with the postal receipt Exh.4, letter, dated 12th December, 1993 Exh.6 and postal receipt Exh.7, so also Exhs.8, 9 and 10. Amazingly, instead of reacting to those letters the defendant waited till the time for execution concluded whereafter she sent letter dated Exh.11 cancelling the said agreement.
31. Mr. Abdul Ghafoor Mangi vehemently argued that the said letters were never delivered or received by the defendants. The allegations of having received the letters was denied and the defendant was required to prove the same. The plaintiff had categorically pleaded in paras. 7, 8 and 9 of the plaint the fact of having requesting the defendant to complete her obligation as required by the agreement. The reply in the written is simpliciter denial of that fact. It does not, however, specifically deny the receipt of the said letters. What it says, is "the plaintiff never tried to perform his terms of the agreement. He had been making various demands for the examination of documents of the ownership of the defendant. Defendant had always declined to provide such documents to the plaintiff unless and until he came forward and complete further documents of business transaction". This paragraph 7 of the written statement is absolutely clear. It categorically shows that the plaintiff was continuously pressing that the act that had to be done by the defendant for transferring the title in her name was to be shown by the defendant to the plaintiff. The defendant, was instead requiring the plaintiff to come forward and complete document some business transaction details of which has not been made clear in the written statement. The payment, per the agreement was to be made in front of the Registrar upon execution of the deed of sale. I do not find anything in the contract, which the plaintiff was required to do before the title was clear.
32. In view of the above, evidence led and the documents produced and after hearing parties, I am of the clear view that the defendant has acted mala fidely, purposely delayed the process as such the time given in the agreement cannot be taken. as the essence of the contract. It is clear from the written statement so also from the plaint and the letters sent, that the plaintiff was pursuing and was ready and willing to perform his part of the contract if the title of the property had been clear and no doubt if the document would have been shown, which admittedly were not shown, the conveyance would have been concluded. In view of the above, I allow the suit of the plaintiff in the following terms:-- (A)The plaintiff shall deposit balance amount of Rs.26,00,000 in this Court alongwith the amount of stamp duty, charges or any other amounts payable at the time of registration, within seven working days of the date hereof. The Nazir shall give a notice of the said receipt to the defendant for a specific date for execution of the sale-deed. In the event the said defendant refuses to come forth or refuses to execute the sale-deed, the Nazir of this Court is hereby authorized to execute the sale-deed before the Registrar or Sub-Registrar as the case may be and proceed to recover vacant possession of the said property bearing No.D-271 measuring 603 sq.yds. with single storey built thereon situated on K.D.A. Scheme No.1-A, Karachi and hand it over to the plaintiff.
33. (B)The Nazir shall affix the required stamp duty on the sale-deed, and retain the sale consideration paid by the plaintiff, from which amount, he shall pay all dues, taxes, charges, electricity and gas bills or any amount that may be due or recoverable against the said property till the date when the property is physically handed over to the plaintiff.
34. (C)The fee of the Nazir is fixed at Rs.20,000 which shall be payable by the defendant and also deductible from the amount received from the plaintiff. All costs of the present case shall be payable by the defendant and shall also be deductible from the amount paid by the plaintiff. After deducting the said amount, the Nazir shall pay the balance thereof to the defendant.
35. (D)Till such time the property is finally conveyed and possession handed over, the defendant is restrained from selling, transferring, conveying, alienating, encumbering, leasing or in any manner creating any charge on the said property.