' QAZI MUHAMMAD FAROOQ, J.---By this common judgment we intend to dispose of the above- mentioned two petitions for leave to appeal which have arisen from the consolidated judgment dated 6-6-2002 of a learned Judge in Chambers of the Lahore High Court passed in F.A.O. No,112 and F.A.O. No,117 of 2002.
2. The noteworthy facts in brief are that the petitioner M/s. Bin Bak Industries (Pvt.) Limited being the owner of a factory known as Lyallpur Cotton Mills, located in the Factory Area Faisalabad, had executed an agreement to sell in respect thereof on 1-10-1995 in favour of the respondents Friends Associates etc. For a sum of Rs,74 crores. The subject-matter of the deed consisted of the machinery, building, stores, godowns, sheds, offices, officers colony, workmen quarters etc. As well as ,the land underneath measuring 59 acres, 5 Marlas. Out of the sale consideration an amount of Rs,32 crores was paid by the respondents in due course. However, payment of the remaining amount did not materalise on account of certain bottlenecks traceable to non-delivery of possession of some area included in the subject-matter of the agreement to sell and differences with regard to performance of respective obligations. In order to settle the controversies and take the matter to its logical conclusion the respondents filed a suit for specific performance of the said agreement to sell. An application under Order XXXIX, Rules 1 and 2 read with section 151, C.P.C. For grant of interim relief was also made alongwith the suit. The trial Court, vide order dated 9-3-2002, granted the temporary injunction prayed for subject to the deposit of the remaining amount of Rs,42 crores or a Bank Guarantee of equal amount within two months. It was also observed that if the balance amount is not deposited or the Bank Guarantee is not furnished the application for grant of temporary injunction shall be deemed to have been dismissed. Feeling aggrieved by the condition in regard to deposit of the remaining amount the respondents took the matter in appeal before the High Court and the petitioner also filed an appeal against the said order. The appeal filed by the respondents was accepted and the condition with regard to deposit of the balance amount of Rs,42 crores set aside. The appeal filed by the petitioner was dismissed.
3. The impugned judgment was assailed by the learned counsel for the petitioners from different angles. It was contended at the outset that in accordance with the terms of the agreement to sell the respondents were obliged to pay the entire sale consideration, within a period of 27 months which expired on 25-8-1999 on account of delay in delivery of possession of an area measuring 14 acres under the residential quarters occupied by the workers. The respondents had not only failed to pay the entire amount within the stipulated period but had also failed to bring any material on record to show that they were ready and willing to perform their part of the contract and had the requisite funds. It was next contended that there was no stipulation in the agreement to sell that the respondents will develop the land underneath the factory into plots and after alienating the same will pay the sale consideration. The High Court had misconstrued and misinterpreted the terms of the agreement by treating the same as an agreement for development of the property into plots and making payment of the sale consideration from the sale proceeds of the developed plots. It was further contended that in a suit for specific performance of contract an order of restraint against the defendant is invariably made subject to the deposit to the unpaid sale consideration by the plaintiff so as to protect the rights of the defendant. Reliance was placed on Manzoor Ahmed v. Hamid Shah Gilani (1997 SCMR 1443), Balquees Zaman Khan v. Tahir Mehmood Butt (1991 CLC 1507) and Fateh Muhammad v. Muhammad Hanif (PLD 1990 Lahore 82). It was also contended that the learned Single Judge of the High Court had virtually decided the entire case by giving positive findings on the merits on the case which is awaiting disposal before the trial Court.
The interpretation of the agreement to sell made by the learned Judge of the High Court had left no scope for the trial Court to take .a different view. It was lastly contended that possession of the area measuring 9 acres under the Officers Colony etc. Had already been delivered to the respondents and in any event delivery of possession of land was not a condition precedent for payment of the sale consideration which was to be made as per agreed schedule.
4. The contentions have not impressed us for reasons that are not far to seek. The impugned judgment relates to an interlocutory order passed by the learned trial Court whereby the respondents were granted a temporary injunction subject to the deposit of the remaining amount of Rs,42 crores. The temporary injunction was granted by the learned trial Court after holding that the respondents had a prima facie case, the balance of convenience was in their favour and they may suffer an irreparable loss if the temporary injunction is not granted. The learned Single Judge of the Lahore High Court also arrived at the same conclusion after examining all the facets of the case at length and set aside the condition after holding as under:-- ' "Attending to last plea first, it may be held that it is not a rule of law that essentially in all the cases, of specific performance while granting temporary injunction to the plaintiff, the Court should impose condition of deposit of balance consideration. It depends upon the facts and circumstances of the case enabling the Court to exercise its discretionary equitable relief. In the instant case, the agreement dated 1-10-1995 between the parties is not a simple agreement in nature of sale purchase of immovable property, rather it is for the development of the suit property, enabling' the appellants to develop the land and sell plots to third parties and to a pay amounts to the respondents from the sale proceeds of such sale, though within a specified period as stipulated in the agreement. But as the respondents prima facie are found at fault in not handing over the entire suit property to the appellants for the purpose of such development, therefore, the imposition of condition for the deposit of the balance consideration in the facts and circumstances of the case, would be harsh and runs against the settled rules for the exercise of discretion."
5.The parties are locked in litigation, therefore. We do not deem it appropriate to examine the merits of the case closely. Suffice it to say that the contents of the undisputed agreement to sell prima facie point to generation of funds through various modes including development and sale of plots to be undertaken by the respondents and the pleadings of the parties spell out a dispute over delivery of possession of an area measuring 9 acres covered by the Chairman, Rest House and Officers Colony etc., therefore, there can be no dispute with the proposition that the respondents have a fair prima facie case. The balance of convenience also tilts in favour of the respondents because the material on record indicates that they have not only cleared the outstanding loans and paid a huge amount of Rs,32 crores but are also engaged in development and sale of plots.
The respondents will indeed suffer an irreparable loss if the temporary injunction prayed for is declined.
6. Adverting to the condition of depositing balance amount in Court we find that in view of the peculiar nature of the agreement to sell on which the suit is founded the discretion exercised by the learned trial Court was arbitrary and capricious. No doubt in a suit of specific performance of contract an order of restraint in respect of the suit property is normally granted subject to the deposit of the balance of the sale consideration but the rule is not absolute and mandatory. The exercise of discretion in this context depends upon the nature of the agreement to sell and facts and circumstances of the case. The suit filed by the respondents is based on an extraordinary and rare agreement to sell, the bona fides of the respondents appear to be above board and the petitioner's rights and financial interest are adequately protected in view of the fetters imposed in the agreement to sell on the sale of developed plots by the respondents. In this backdrop application of the said rule to the suit of the respondents and exercise of discretion against them seems iniquitous. The case-law cited by the learned counsel for the petitioner relates to suits based on ordinary and common place agreements to sell and as such is distinguishable.
7. The anxiety of the learned counsel for the petitioner that the learned trial Court may not be able to take a different view on account of the interpretation of the agreement to sell made in the impugned judgment is unfounded. It goes without saying that the observations made in the impugned and this judgment being confined to the disposal of the application for grant of interim relief shall not influence the mind of the learned trial Judge who will decide the suit on merits in accordance with law. However, we are inclined to direct the learned trial Court to expedite the disposal of the suit.
For the foregoing reasons both the petitions are dismissed and leave refused.