PLJ 1999 Lahore 899 (DB)

Present: muhammad nawaz abbasi, and mumtaz alt mirza, JJ. SAMI-UL-HAQ-Appellant

versus

Dr. MAQBOOL HUSSAIN BUTT & another-Respondents

R.F.A. No. 29 of 1995 RFA No. 32 and 33 of 1996, dismissed on 16.2.1998.

(i) Transfer of Property Act, 1882 (IX of 1882)--

—-S. 38 & 41--Allotment of plot in favour of appellants, Firm by C.D.A.-- Execution of agreement to sell with respondent in violation of terms of allotment-Validity-Whether agreement enforceable under law- Question of-Appellant, after having received major portion of sale consideration delivered possession of property and thereby agreement having partly performed, was not revokable either by appellant or his co­ partners, as case may be, on any ground including ground that property
was not transferable—Agreement having validly executed was enforceable under law against executant, and bar created by C.D.A. upon transfer ofplot by allottee to third person does not effect right and liabilities of parties-Held : parties validly entered into agreement and executionthereof is enforceable under law.       [P. 905] A

(ii) Specific Relief Act, 1877 (I of 1877)-

—S. 42-Suit for specific performance decree by trial Court-Appeal against-Whether alternate claim of damages would make respondents dis-entitle to decree for specific performance of contract—Question of— There is no cavil to proposition that relief in nature of decree for specific performance of contract is equitable and in suitable cases instead of grant of decree, court can direct for payment of damages and refuse performance of contract through decree, but we having taken notice of fact that respondent paid amount of Rs. 34 Lac to appellant in year 1990 and obtained possession of property, but could not get fruit of same for want of litigation due to backing out of appellant from performing his part of contract, while retaining amount of respondent with him and depriving him from its use and benefited himself in terms of financial gain-Taking into consideration these aspect of matter we do not find any substance in agreement that decree in present form could not be granted-Held : Trial Court having taken correct view of matter rightly decree suit-Appeals without substance are accordingly dismissed.

[P. 907] B, C & D

Mr. Tanveer Bashir Ansari, Advocate for Appellant. Hafiz Saeed Ahmad Shaikh, Advocate for Respondent No. 1. Sardar Muhammad Aslam, Advocate for Respondent No. 2 (CDA). Mr. Muhammad Asad Chaudhry, Advocate for Respondent No. 3. Date of hearing : 16.2.1998.

judgment

Muhammad Nawaz Abbasi, J.~Three appeals bearing Nos. 29 of 1995, 32 of 1996 and 33 of 1996 filed by Sami-ul-Haq appellant arose out of a consolidated judgment dated 20.4.1995 passed by the learned Civil Judge 1st Class, Islamabad, in three civil suits of the following description :-

(i) Civil Suit No. 74 of 1991 for specific performance of the contract titled Dr. Maqbool Hussain Butt vs. Sami-ul Haq etc.

(ii) Civil Suit No. 185 of 1990 for declaration and permanent injunction titled M/s. Silk Road Company etc. vs. Sami-ul-Haq and another.

(iii) Civil Suit No. 218 of 1990 for possession and declaration with mandatory injunction titled Sami-u-Haq vs. Dr. Maqbool Hussain Butt and another.

This single judgment proposes to dispose of all the three connected appeals against the same judgment involving common dispute.

2.          Since the appellant and the respondents are common in all the  three appeals, therefore, in order to avoid any confusion, I will mention them with their names.

3.     The facts in the back-ground are that a plot No. NYA measuring 2400 Sq. Yards situated in Zone-D, Sports Complex, National Park Area, Islamabad, was allotted to an unregistered Firm namely Silk Road Tours Service Company established by the appellant and two others namely Laila Tandoko Tokouaqa and Naib Khan for the construction of a Hotel vide the allotment letter dated 24.4.1985. According to the terms of the allotment the construction was to be completed within four  ears. Sami-ul-Haq appellant entered into an agreement of sale of plot with Dr. Maqbool Hussain Butt (respondent herein) through an agreement to sell dated 13.6.1990 for a  ale  onsideration of Rs. 52-Lac out of which an amount of Rs. 11-Lac was paid in advance with delivery of the possession of the plot at the time of the execution of the agreement. It is stated that the appellant in continuation of the above agreement through a subsequent agreement dated 16.7.1990, extended the time for the  erformance of the agreement uptil 16.12.1990 pon receipt of another amount of Rs. 23-Lac from the respondent and only an amount of Rs. 18-Lac was left to be paid at the time of transfer of the property. The appellant did not fulfill his part of the contract as per terms of the agreement and in consequence thereof, respondent Dr. Maqbool Hussain Butt filed a suit for specific performance of the contract against Sami-ul-Haq appellant and two others namely CDA and Mrs. Laila Tandoko on 2.4.1991. Sami-ul-Haq, while defending the suit admitted the original agreement dated 13.6.1990, but denying the execution of subsequent agreement dated 16.7.1990 controverting the plea of Dr. Maqbool Hussain Butt and sought dismissal of the suit. The second suit bearing No. 185/90 was field by M/s.   Silk  Road  Company  against  Sami-ul-Haq.   The   plaintiff sought declaration to the effect that the agreement to sell executed by any individual partner relating to a non-transferable plot allotted to the Firm was not binding on the Firm.

4.    Though Civil Suit No. 218/90, Sami-ul-Haq appellant sought declaration and  possession to  the  effect that disputed plot being not transferable, the agreement was not enforceable.

5.  The learned trial Court consolidating all the three suits, upon the pleadings of the parties, framed a number of issues, out of which only issues Nos. 13,14 and 15 being relevant for the purpose of disposal of these appeals are re-produced hereinafter :--

ISSUES

(13)        Whether the suit property is jointly owned by three persons as alleged by Defendant No. 3 (Mrs. Laila Tadako Tokonaga). If so, its effects ?

(14)        Whether the Defendant No. 1 (Sami-ul-Haq), validly executed the agreements of sale dated 13.6.1990 and 16.7.1990 in favour of the plaintiff?

(15)        Whether the plaintiff is entitled to the Specific Performance of the agreement of sale. If so, on what terms and conditions ?

 

6.            The learned trial Court decided the above issues against the appellant/defendant in the suit filed by Dr. Maqbool Hussain Butt Plaintiff/ respondent herein and decreed his suit. The suit filed by M/s. Silk Road through Mrs. Laila Tandoko Taokouaga was disposed of with the direction to Dr. Maqbool Hussain Butt/respondent to make payment of the balance amount of Rs. 18-Lac to her as her share in the suit property. The third suit filed by Sami-ul-Haq against Dr. Maqbool Hussain Butt, whereby he sought a decree for declaration with permanent injunction in relation to the agreement to sell was dismissed.

7.            The parties relied upon the following documents in support of their respective stand :-

 

(a)              Agreement to sell dated 13.6.1990 (Ex. PW-5/1).

(b)              Agreement to sell dated 16.7.1990 (Ex. PW 5/2).

(c)              Registered   irrevocable   general   power   of  attorney   dated 17.7.1990 executed in favour of Dr. Maqbool Hussain Butt (Ex. PW-5/3).

(d)              Un-registered partnership deed of M/s. Silk Road Company (Ex. PW-3/2).

(e)              Letter of the CDA by virtue of which the possession of the plot in dispute was delivered to Sami-ul-Haq (Ex. PW-3/3).

(f)                Agreement of the CDA with M/s. Silk Road Company (Ex. D/l).

(g)       The authority letter dated 24.11.1985 in favour of Sami-ul-Haq (Ex. D/2).

The correspondence including the notices given by the parties to each other are Ex. D2 to Ex. D4.

8.    Mr. Tanvir Bashir Ansari, Advocate learned counsel for the appellant has challenged the judgment and decree and various grounds, but without denying the execution of the agreement to sell dated 13.6.1990 contended that the sale was not binding on the partnership Firm as the two partners namely Naib Khan and Mrs. Laila Tandoko Tokouaga being not the party to the agreement did not incur any liability under the decree and Sami-ul-Haq appellant in his individual capacity could be asked to return the earnest money to the tune of Rs. 11-Lac. He challenging the execution of the subsequent   agreement   dated   16.7.1990   contended   that   Sami-ul-Haq appellant having not received the said amount, the liability cannot be fixed upon him and that the suit of Maqbool Hussain Butt being not maintainable against the partnership  Firm was wrongly decreed  against the Firm. According to the learned counsel two partners of the Firm namely Naib
Khan and Mrs. Laila Tandoko Tokouage having not consented for the execution of the agreement were not responsible for the act of third partner namely Sami-ul-Haq, who retained no power of the transfer of the property of Firm no their behalf. He however, conceded that the appellant was authorized to perform ancillary matters including the management of the property but the transfer of the same through the agreement in question was not within his competency. Therefore, the decree on the basis of the agreement in question was void. He next argued that the plot in question being not transferable without completion of construction on it, was not sale­ able and consequently, the agreement to sell having no legal force was not even enforceable against Sami-ul-Haq appellant. Learned counsel for the appellant also argued that the decree being based on the agreement against the public policy and beyond the pleadings and that agreement having no
legal force, the sale did not confer any right on the respondent to be enforced through a suit for specific performance of the contract. He added that Dr. Maqbool Hussain Butt in this suit claimed relied only against Sami-ul-Haq, appellant and therefore, he was not entitled to the grant of decree in the present form.

9.   Sardar Muhammad Aslam, learned counsel appearing on behalf of CDA supporting the cause of the appellant contended that the decree on the basis of the agreement to sell is not executeable in letter and spirit as no agreement was in existence between Dr. Maqbool Hussain Butt and CDA. According to him, in view of the bar on the transfer of the plot till the completion of construction did not create any right in favour of third party as a result of private sale which does not bind the CDA to transfer the  ownership of such plot to the vendee. He clarified that even transfer of the title of the plot with permission of the CDA, the use of such plot other than the purpose for which it was allotted is not possible without the permission of the CDA.

10.   Mr. Muhammad Asad Chaudhry, learned counsel appearing on behalf of Mrs. Laila Tandako Tokohaga respondent in appeal accepting the claim of Dr. Maqbool Hussain Respondent No. 1 in Appeal No. 29/95 has owned the agreements to sell dated 13.6.1990 and 16.7.1990. The learned counsel stated that she being a party to the agreement and the suit in question has received her share to the tune of Rs. 18-Lac in the property under the decree passed by the learned trial Court. The learned counsel with reference to the statement of Sami-ul-Haq appellant made by him before the learned trial Court submitted that the above position was also  ccepted by the appellant. He supporting the stand of Dr. Maqbool Hussain Butt sought dismissal of the appeal.

11.    M/s. Hafiz Saeed Ahmad Sheikh and Syed Riaasat Hussain Chishti, Advocates, appearing on behalf of Dr. Maqbool Hussain Butt/ respondent contended that all the partners of M/s. Silk Road Company acknowledged the agreement to sell and, therefore, the objection that the sale was not binding on the two partners, who have not initially signed the agreement in question, did not incur any liability to be enforced through the suit for specific performance the contract and consequently the decree passed thereon was not legal and valid has no force. They contended that Naib Khan one of the partners in Firm being a marginal-witness to the agreement
in question did not raise any objection thereto at any stage and consequently, he was a party to the agreement for all practical purpose. Similarly Mrs. Laila  cknowledging the agreement in question admitted the receipt of an  mount of Rs. 18-Lac from Dr. Maqbool Hussain Butt before the trial Court. They further argued that the denial of Sami-ul-Haq of the execution of the second agreement is refuted by the fact that he admitted his signatures on the said agreement before the Court and the payment of Rs. 23-Lac to him was proved through bank-receipts. It is added that after execution of the said agreement, the appellant also attorned irrevocable power of attorney in favour of Dr. Maqbool Hussain by virtue of which the plot in question rest in absolute ownership of the said respondent. They pleaded that the agreement would be deemed to have been executed by all the partners of the Firm in question, and the same being binding on them was enforceable against all of
them collectively. They argued that the sale price having paid much before the respondent entered into sale transaction and the possession of the plot also delivered, the sale was completed and there was no bar in passing the decree for specific performance of the contract. The objection of the CDA that property being not transferable before completion of the construction is not entertainable as a valid ground to undo the decree. Lastly, it was argued by the learned counsel that the appellant while taking contradictory position was estopped from pleading in contravention to the agreement to sell executed by him in favour of Dr. Maqbool Hussain respondent. Learned counsel placing reliance on Sections 38 and 41 of the Transfer of Property Act, argued that the appellant giving impression of being sole owner of the property offered the sale of the same to the respondent throught the agreement in question and thus, even if he was not holding any authority on behalf of his partners, the ostensible belief of ownership does not render the transaction void. Learned counsel summing up the arguments submitted that asking for the alternate relief claimed in the suit is not effected and the contention of the learned counsel for the appellant in this behalf is of no substance.

12.   Learned counsel for the appellant vehemently contended that the plaintiff asking for alternate relief of damages has, in fact, relinquished the relief to the extent of specific performance of contract and, therefore, the relief in the nature of decree to the specific performance of the contract could not be granted to the respondent.

13.  We have perused the record with the help of the learned counsel for the parties and heard the arguments advanced by them at length. The pivotal questions cropped up in the matter for decision are :-

(1)             Whether the agreement to sell in question having not executed as such by the two partners was not binding on them and the property in the name of the Firm being not transferable, the agreement being void was not enforceable in law ?

(2)             Whether the agreement was not enforceable through the suit for specific performance of the contract and the decree was nullity in the eyes of law ?

(3)             Whether in view of the bar of transfer contained in the transfer order has made the transaction of sale ineffective and not enforceable through the process of law ?

(4)             Whether by claiming alternate relief in the nature of the damages, the plaintiff lost his right to the claim for the relief of specific performance of the agreement ?

14.   The execution of the agreement by the appellant Sami-ul-Haq in favour of Dr. Maqbool Hussain Butt respondent herein is not denied. The execution of the second agreement and the receipt of the amount of Rs. 23- Lac for extension of time for performance of the contract is proved on record through unrebutted documentary as well as oral evidence except the bare denial. Naib Khan having signed the initial agreement as marginal witness was also a consenting party to the agreement and he having not raised any objection to the execution of the agreement in question at any subsequent stage has expressly acknowledged the execution of the same. Mrs. Laila Tandoko Tokohaga, the third partner having made a statement before the Court also acknowledged the agreement. The offer made by her having
accepted by the above named respondent, she was paid Rs. 18,OQ,000/- as remaining price of the plot in question under the decree. The execution and the validity of the above said agreements are not challengeable on technical grounds such as that it was not signed by the co-partners of the appellant at the time of its execution. We, are therefore, of the view that the agreement pertaining to the partnership of the property having executed by and on behalf of the Firm, validly created rights in favour of the respondent and was as such enforceable in law. The agreement creating valuable rights in favour of respondent namely Dr. Maqbool Hussain Butt describes certain liabilities of the parties cannot be declared void for the reasons that the plot subject matter of the agreement in question as per terms of the allotment was not transferable. The restriction on the transfer of the property placed by the CDA being a different matter does not render the agreement invalid or effect the validity of such agreement and the rights of the parties thereto. The main effect could be the non-implementation of sale by the CDA pending removal bar of transfer. The original allottee after payment of the full sale price to the CDA executed the agreement for the transfer of the plot in favour of the respondent and the condition of completion of construction attached therewith by the CDA for the transfer of the property would not make the transaction invalid and restrict the passing of title to the respondents. It is noticeable that the CDA despite having the knowledge of the transfer in question and non-completion of the construction beyond the prescribed period did not proceed against the original allottee and had taken no step for the cancellation of the plot." The CDA even did not proceed in the matter at any stage pending disposal of the suit. This would show that the CDA had no intention to cancel the plot despite the violation of the terms and conditions of the allotment by the allottee and therefore, the condition of the completion of the construction for transfer of the plot stood waived.

15.          It would be pertinent to point out here that the appellant after having received the major portion of the sale consideration delivered the possession of the property and thereby the agreement having partly performed was not revocable either by the appellant or his co-partners, as the case may be, on any ground including the ground that the property was not transferable. From the above discussion, it would be clear that the agreement having validly executed was enforceable under the law against the executant and the bar created by the CDA upon the transfer of the plot by the allottee to the third person does not effect the rights and the liabilities of the parties and despite placing restriction on transfer by the CDA, on the allottee the same cannot be enforced against the purchaser for consideration. Thus, the parties validly entered into the agreement and the execution thereof being enforceable under the law and the objection raised by the
appellant in this behalf being without any substance is repelled.

16.          The definition of 'SALE' given in the Transfer of Property Act, 1882, is as under :-

"The payment of the sale price with delivery of possession, possesses ostensible titled to the purchaser even without execution of title."

The appellant while acting as an absolute owner of the property has given an impression to the respondents that the enjoyed the sale authority to sell the property was believed as ostensible owner of the property. Therefore, the respondent as purchaser having taken all precautionary measures and being vigilant entered into a valid agreement confirming the title in his favour. Sections 38 and 41 of the Transfer of Property Act. 1882, are reproduced as under :-

SECTION 38.

"Transfer by a person authorised only under certain circumstances to transfer-where any person, only under circumstances in their nature variable to dispose of immovable property, transfers such property for consideration, alleging the existence of such circumstances, they shall, as between the transferee on the one part and transferor and other person (if any) affected by the transfer on the other part, be deemed to have existed, if the transferee, after using reasonable care to ascertain the existence of such circumstances, has acted in good faith."

SECTION 41.

"Transfer by ostensible owner.--Where, with the consent, express or implied, of the persons interested in immovable property, a person is the ostensible owner of such property and transfer the same for consideration, the transfer shall not be voidable on the ground that the transferor was not authorised to make it : provide that the transferee, after taking reasonable care to ascertain that the transferor had power to make the transfer, has acted in good."

17.             The subsequent acknowledgement of the agreement to sell by the other two partners of the Firm confirm the execution of the agreement with the consent of all the partners despite with the partial ownership of the  appellant and without retaining the absolute powers to enter into andexecute an agreement. Thus the arguments of the learned counsel for the appellant that the respondent should have been vigilant about the condition attached therewith for transfer of the property and that the co-partners of the appellant have not initially signed the agreement as party is without anyfoundation.

18.             The next question for determination is, whether the alternate claim of damage would make the respondent disentitle to the decree forspecific performance of the contract. Learned counsel for the appellant has not been able to show any law on the subject creating bar for the grant of thedecree in such circumstances.

19.       Learned counsel for the respondent argued that the alternate plea in a civil suit for specific performance of the contract was taken as anabundant caution which did not preclude the plaintiff from asking for the decree of specific performance of the contract. We have examined this question in detail and have not been able to accept the contention raised by the learned counsel for the appellant. We may observe that neither the law debars grant of a decree for specific performance of the contract nor the right to the said decree is waived by asking for alternate relief. There is no cavil to the proposition that the relief in the nature of decree for specific performance of the contract is equitable and in suitable cases instead of grant of the decree, the Court can direct for the payment of the damages and refused the performance of the contract through a decree but we having taken notice of the fact that the respondent paid an amount of Rs. 34-Lac to the appellant in the year 1990 and obtained the possession of the property, but could not get the fruit of the same for want of litigation due to backing out of the appellant from performing his part of the contract, while retaining amount of the respondent with him, and depriving him from its use and benefited himself in terms of the financial gain. Further, Mrs. Laila the other partner of Silk Road Company etc. also having received the remaining sale price of the plot (Rs. 18-Lac) has acknowledged the claim of the respondent before the civil Court as well as before us through her counsel. We, therefore, taking into consideration these aspects of the matter do not find any substance in the argument that the decree in the present form could not be granted. The learned trial Court having taken correct view of the matter rightly decreed the suit.

20.    In the light of the above discussion, we having found no  ~ substance in these appeals, dismissed the same with no order as to costs.

(B.T.)                                                                               Appeal dismissed.