PLJ 2006
Present: Mian Saqib Nisar & Muhammad
Sair Ali, JJ.
MUHAMMAD RAMZAN and others--Appellants
versus
SAIF NADEEM ELECTRO (Pvt.) Ltd. through
its CHAIRMAN and others--Respondents
RFAs. Nos. 462 of 2004, 36 and 61 of
2005, heard on 19.4.2006.
(i)
Qanun-e-Shahadat Order, 1984 (10 of 1984)--
----Arts. 79 & 17(2)--Civil Procedure
Code (V of 1908), S. 114--Suit for specific performance of agreement to
sell--Execution and receipt of consideration--Suit decreed in favour of
respondent with direction to return amount of advance
consideration--Evidences--Cross-examination was declined--Payment of
substantial amount of advance consideration could have been proved through by
summoning the record of the bank but it was not done which omission has serious
reflection upon the genuineness of the transaction--Admission of a co-defendent
is not binding upon the others. [P.
1324] A
(ii)
Qanun-e-Shahadat Order, 1984 (10 of 1984)--
----Arts. 79 & 17(2)--Contract Act,
(IX of 1872) Ss. 73 & 74--Suit for specific performance--Agreement to
sell--Entitlement of compensation and damages for the amount--No such stipulation
in this behalf in the agreement to sell--Appellant was failed to lead any
evidence qua the terms in Ss. 73 & 74 of Contract Act. [P. 1325] B
(iii)
Specific Relief Act, 1887 (I of 1887)--
----S. 27-B--Transfer of property Act (IV
of 1882), S. 54--Suit for specific performance--Agreement to
sell--Enforcement--Question or bona fide purchase--According to the provisions
of Section 54 of Transfer Property Act--An agreement to sell does not create or
purport to create any right or interest in an immovable property, except it
confers upon the party the right to seek the specific enforcement--When
appellant was not yet the owner of the property, no defence in terms of Section
27-B of Specific Relief Act, 1877 can have been set out. [P. 1325] C
(iv)
Contract Act, 1872 (IX of 1872)--
----Ss. 73 & 174--Specific Relief Act
(I of 1887), S. 27-B--Suit for specific performance--Enforcement of agreement
to sell--Enterance into by his mother--Sale agreement between the adult and
minor--Contract by a minor is not merely
void but void ab initio and therefor, cannot be sued upon--Such contract has no
existence in the eyes of law and entails no liability--If agreement has been
made on behalf of minor by a close relative like mother, and prima facie is in
his interest, such agreement shall not be void or invalid--Where the competency
of mother to enter into transaction and enforceability thereof, it shall be
dependent upon the guardianship certificate and permission of the Court,
otherwise, it shall have no legal value--Appeals dismissed. [P. 1326] D, E & F
Mr. M. Mahmood, Advocate for Appellants.
Mr. Sajjad Mehmood Sheikh, Advocate for
Respondent No. 1.
Sardar Nazar Hussain Dogar, Advocate for
Respondents Nos. 2, 4, 5 and 6.
Syed Zafar Abbas Gillani, Advocate for
Respondent No. 3.
Mr. Ijaz Feroz, Advocate for Respondent
No. 1 in RFA. No. 36 and RFA No. 61 of 2005.
Date of hearing : 19.4.2006.
Judgment
Mian Saqib Nisar, J.--The dispute between
the parties, relates to the land measuring 165 Kanals 1 Marla, as stated in the
plaint of RFA No. 462/2004 but it is mentioned as 164 Kanals and 8 Marlas in
RFA No. 62/2005; however, the suit land, which is situate in Mauza Janjatey
Tehsil & District Lahore, has been fully described in the two plaints; the
suit for the specific performance filed by Respondent No. 1 in RFA No. 62/2005,
against Aziz Ahmad, etc. seeking the enforcement of the agreement to sell dated
7.1.1989, has been decreed, whereas, the suit brought by the appellant in this
case against the respondents, to the extent of specific enforcement of their
agreement dated 28.3.1990, has been disallowed, but he has been granted a
decree against the vendors for the return of the earnest money amounting to Rs.
21,09, 270/-. All the parties aggrieved of this judgment and decrees dated
20.10.2004, have filed these appeals i.e. RFA No. 462/2004, RFA No. 31/2005,
RFA No. 36/2005, RFA No. 61/2005 and RFA No. 62/2005, which are interconnected
matters, and thus are being decided through this single judgment.
2.
Brief facts of the case are, that on 30.4.1990, Respondent No. 1,
brought a suit for the specific performance against Respondents Nos. 2 to 6,
claiming that the said respondents being the owners of the suit land measuring
164 Kanals 8 Marlas, described in paragraph No. 3, of the plaint, have entered
into a sale agreement dated 7.1.1989 Ex. P-4, with it for a total consideration
of Rs. 60,62,352/- i.e. at the rate of Rs. 2,95,000/- per acre and had received
a sum of Rs. 12 lac (twelve laces) as earnest/advance money. It is stated in
the plaint that Respondent No. 3 (Defendant No. 2) was a minor at that time,
thus the agreement on his behalf was entered into by Mst. Sardar Bibi, his real
mother, with the stipulation to procure the permission for the sale from the
guardian Court; three months period was fixed between the parties for the
finalization of the transaction. It is averred by the plaintiff/Respondent No.
1, in his plaint, that the Respondents Nos. 2 to 6, failed to accomplish the
deal and to execute the instrument of sale; hence, the suit was brought against
them.
3.
Matter was contested by Respondents Nos. 2 to 6, who admitted the valid
execution of the agreement to sell and the receipt of the part consideration,
but only to the extent of Rs. 5,00,000/- however, they denied the remaining
consideration by averring that the defendants are illiterate persons and
Respondent No. 1, has played a fraud upon them and procured their thumb
impressions upon certain receipts to show the payment of
Rs. 12,00,000/-. It is also their case that it is the plaintiff/Respondent No.
1, who failed to pay the balance amount of the consideration within the
stipulated time, during which, they have never refused the finalization of the
transaction, thus by imputing default to Respondent No. 1, it was asserted that
the agreement Ex. P-4, automatically stands cancelled. In their written
statement, Respondents Nos. 2 to 6, never disclosed that they have also entered
into any other agreement to sell with any third party i.e. the appellant.
4.
The above matter was yet pending, when on 7.1.1991, the appellant of
this appeal brought a suit for the specific performance against Respondents
Nos. 2 to 6, claiming that they through an agreement dated 28.3.1990 agreed to
sell the same land (there is some difference in the total area as mentioned
above) to him, at the rate of Rs. 4,25,000/- per acres and received an amount
of Rs. 21,09,270/- as an advance/earnest money. He asserted that as per the
agreement, the said respondents were bound to obtain the demarcation of the
property, before the execution of the sale-deed and had to hand over the
possession to the appellant, but they failed and surprisingly in breach of the
above stipulation, the defendants/vendors through a legal notice dated
19.11.1990, sought the finalization of the deal within a period of seven days,
which notice was replied, followed by the suit for the specific performance by
the appellant. In this suit, Respondents Nos. 2 to 6, filed their written
statement, in which the agreement to sell and the payment of advance
consideration was admitted; however, the said respondents, again set out the
defence that it is the plaintiff/appellant, who has failed to perform his part
of the agreement. It may be pertinent to mention here that Respondent No. 1
(Saif Nadeem Electro Ltd.) filed an application under Order 1, Rule 10 CPC, to
be impleaded as a party in this suit, which was allowed by the Court, vide
order dated 29.7.1991 and the company was arrayed in the matter as Defendant
No. 6, the said defendant filed its written statement, by setting out a clear
and unequivocal defence that the agreement to sell allegedly entered into
between the appellant and Respondents Nos. 2 to 6, is fraudulent and collusive,
and the suit also suffers from the same vice. It may not be out of place to
mention here that in the suit of the Respondent No. 1 (the first suit for the
specific performance), the application of the appellant under Order 1, Rule 10
CPC for impleading him as a party, was rejected through the order dated
20.10.1993; but this order was not further challenged by the appellant.
However, upon the application of either side, the two cases were transferred by
the learned District Judge, to the same learned Civil Judge and were
consolidated and tried together on the following issues:--
1. Whether
the suit is not maintainable in its present form? OPD
2. Whether
the plaintiff has not come to the Court with clean hands? OPD
3. Whether
the conditions laid down in the agreement of sale were fraudulent? OPD
4. Whether
only Rs. 5,00,000/- was paid as earnest money? OPD
5. Whether
the plaintiff was willing to perform his part of contract? OPP
6. Whether
the plaintiff has paid Rs. 12,00,000/- as earnest money? OPP
7. Whether
the plaintiff is entitled to decree for specific performance of the agreement
as prayed for? OPP
7.A Whether
Muhammad Ramzan, plaintiff in Suit No. 9/1/91 titled "Muhammad Ramzan vs.
Aziz Ahmad, etc. is entitled to specific performance of agreement to sell or in
the alternative to recover Rs. 21,09,270/- and Rs. 2500,000/-, as damages?
8. Relief.
Proceedings were conducted in the case of
Respondent No. 1; and it examined PW-1 Muhammad Ashraf, the representative of
National Bank of Pakistan, who has proved in the evidence the pay order Ex.
P-1, Ex.P-2 and Ex. P-3, all dated 7.1.1989, envisaging the payment of Rs.
2,00,000/-, Rs. 2,50,000/- and Rs. 5,000,00/- respectively; PW-2 Muhammad
Akhtar is the marginal witness of the agreement to sell dated 7.1.1989, Ex.
P-4; PW-3 is Mushtaq Ahmed Butt, who is an advocate and has scribed the
agreement to sell Ex. P-4; PW-4, Saif Ashfaq is the representative of the
company, whereas, PW-5 Maqbool Ahmed is another marginal witness of Ex. P-4;.
As against the above, the defendants of the case produced Manzoor Hussain (DW-1),
Ashiq Ali (DW-2) and Aziz Ahmad, himself appeared as DW-3; they also tendered
in evidence the documents i.e guardian certificate of Muhammad Siddique minor
dated 23.5.1989 Ex. D-1, in favour of Mst. Sardar Bibi, his mother and the
order of the guardian Judge dated 13.6.1989 Ex. D-2, permitting the sale of the
property by the said guardian.
Muhammad Ramzan, the appellant in his
suit examined, PW-6 Shahnawaz, the stamp vendor and the scribe of his agreement
to sell dated 28.3.1990 Ex. PW-1/1; PW-7, Syed Hassan Mehmood Naqvi, is a
Manager of Allied Commercial Cooperative Corporation Ltd, who claims to be the
marginal witness of Ex. PW1/1; he has also testified about the payment of the
earnest money of an amount of Rs. 21,9700 paid by Muhammad Ramzan to vendors
Aziz Ahmed, etc; PW-8 Bilal Ahmed is an attorney of Muhammad Ramzan; PW-9 is
Syed Jawad Haider Jhafari Advocate, who proved his reply to the legal notice of
the Respondents Nos. 2 to 6, which was taken in evidence as Ex. PW-91/1.
Upon the conclusion of the trial, the
learned Civil Judge, by giving findings upon Issues Nos. 1 to 7, in favour of
Respondent No. 1, has decreed the suit, whereas, by deciding Issue No. 7-A
against Muhammad Ramzan, has refused the specific enforcement of his agreement to
sell, but has directed the vendors/Respondents Nos. 2 to 6 to refund/return the
amount of Rs. 21,09,270/- to the appellant, which was received by them as the
advance. However, the relief of the damages/compensation as claimed in the suit
has been declined.
Aggrieved of the above, Muhammad Ramzan
has brought the present appeal, Muhammad Siddique has filed two appeals i.e.
RFA No. 31/2005 and RFA No. 36/2005, challenging both the decrees; similarly
Aziz Ahmed has preferred appeal RFA No. 61/2005 and RFA No. 62/2005.
3.
Learned counsel for the appellant contends that the agreement to sell
dated 28.3.1990, as also the receipt of consideration of Rs. 21,09,270/-, has
been admitted by Respondents Nos. 2 to 6, therefore, the appellant having paid
such a substantial amount of money as the advance, was entitled to the grant of
a decree in his favour; it is further stated that the appellant was unaware of
any prior agreement to sell between Respondent No. 1 and Respondents Nos. 2 to
6, consequently such an agreement, could not be made the basis of refusing the
relief of the specific performance to the appellant; the appellant for all
intents and purposes, was the bona fide purchaser and his rights under the law
should be protected by enforcing his agreement. It is also submitted that
Respondent No. 1 failed to prove that he was ready and willing to perform his
part of the agreement, inasmuch as, it failed to pay the balance consideration,
within the stipulated time, therefore, the agreement of the said respondent automatically
stood cancelled and his suit was thus liable to be dismissed. It is further
urged that the trial Court was bound to grant the compensation to the appellant
for the amount of Rs. 21,09,270/-, which has been utilized by Respondents Nos.
2 to 6, for such a long period of time.
4.
Heard. The appellant in support of his case, has examined PW-6,
Shahnawaz Bhatti, who claims to be the stamp vendor and the scribe of Ex.
PW-1/1; however, this witness has not provided any proof of selling the paper
or scribing the document on the date, as has been shown from the said
instrument; he has not produced any record of the stamp vendor or the deed
writer. When questioned in the cross-examination, he has answered:--
This is very significant answer, as he
claiming to be the scribe of the document, but has no clue, as to where it was
written; he has also not stated, if the thumb impressions upon the document
were affixed by Respondents Nos. 2 to 6, in his presence. PW-7, Syed Hassan
Mehmood Naqvi, who in his examination-in-chief, has stated that he was the
Manager of the Bank Allied Commercial Co-operative Corporation Ltd. Ali Town
Branch, and that the appellant in his presence has made the payment of an
amount of Rs. 21 lac to Respondents Nos. 2 to 6 and that the vendor took away
half of money and remaining half was deposited by them in their bank account in
the said bank; he deposed that he is the marginal witness of the agreement to
sell Ex. PW-1/1 and has identified his signature as Ex. PW-1/2. In the cross-examination,
he deposed that he is the Transporter Stationed at Abbotabad; he concedes of
having no knowledge about some earlier agreement to sell between Respondents
Nos. 2 to 6 and Respondent No. 1; he was not a witness summoned through the
process of the Court; he does not know, there Ex. PW-1/1 was scribed; in the
examination-in-chief, he deposed that only the appellant and the vendors were
present at the time of the execution of Ex. PW-1/1, but in the
cross-examination, he contradicts the above, when stated that the deed writer
and other marginal witnesses were also there; but Ex. PW-1/1 envisaged the
presence of only one other witness and no one else; no documentary evidence
through him, has been brought on the record about the withdrawal of Rs.
21,00,000/- from any bank account of the appellant and a part thereof deposited
by the Respondents Nos. 2 to 6 in their account as stated by the witness. We
are not much impressed with the testimony of PW-7, which in our view is not
much confidence inspiring, which otherwise, has remained uncorroborated, as the
other marginal witnesses were not examined; the appellant has not appeared as a
witness in this matter, rather has examined PW-8, as his attorney; who in the
opening part of his examination-in-chief deposed:--
he further states:--
he also deposed:--
In the cross-examination, this witness
stated that he is the property dealer and is engaged in the sale/purchase of
the properties and that Muhammad Ramzan, (the appellant) infact has purchased
the property for his society. His above reproduced part of the
examination-in-chief and what he mentioned in the cross-examination does not go
in line with the appellant's case, set out in the plaint. It may be mentioned
here that he is not the marginal witness of the agreement to sell dated
28.3.1990; PW-9 is Syed Jawad Haider Jafari, who only replied to the legal
notice, which has been placed on the record as Ex.PW-9/1; PW-10, Muhammad
Hanif, is again a property dealer, who stated that he had arranged the
transaction between the appellant and Respondents Nos. 2 to 6; he however, is
not a marginal witness of the agreement to sell and there is no independent
proof on the record, if he was the go between the parties to Ex. PW-1/1.
5.
From the above evidence, we are not convinced, if the appellant has been
able to prove the agreement to sell in terms of Articles 79 and 17(2) of the
Qanun-e-Shahadat Order, 1984, which they were obliged to prove through
examining the two attesting witnesses; Muhammad Shafi, the other marginal
witness of the instrument has not been examined for any valid reason. There is
no independent proof, if such a substantial amount of advance consideration of
Rs. 21,07,270/- was paid by the appellant to Respondents Nos. 2 to 6, this
could have been easily done by the appellant through summoning the record of
the bank, in which the transaction of payment is alleged to have taken place,
but surprisingly this was not done, which omission to our mind has serious
reflection upon the genuineness of the transaction. The argument that as
Defendants Nos. 2 to 6, who are the executants of the agreement have admitted
the same and the payment thereof as well, thus it was not required to examine
the other marginal witness; the summoning/production of the record/registers of
the stamp vendor and the scribe, or the bank record for the purposes of proving
the advance payment, suffice it to say that the co-admission of a co-defendant
is not binding upon the others; Respondent No. 1 in its written statement had
disputed the genuineness of the said agreement and had imputed fraud and
collusion between the appellant and Respondents Nos. 2 to 6; thus in this
peculiar situation, it was incumbent upon the appellant to have proved the
agreement in accordance with the mandatory provision of Article 79; besides, to
have corroborated the proof through the summoning and production of the record
of the stamp vendor, the deed writer and the bank documents of the payment of
advance consideration, but this all is conspicuously missing in the case. Above
all, PW-8, who is key witness of the appellant, has departed and deviated from
the contents of the plaint; it is stated by him that he has entered into the
agreement to sell with Respondents Nos. 2 to 6, whereas, this is not the case
set out in the plaint of the appellant, resultantly, we are not convinced, if
the appellant has proved his case about the execution of the agreement as
against Respondent No. 1. However, as Respondents Nos. 2 to 6, have admitted
the said document and also the receipt of payment of the advance money, such
admission is binding upon them, therefore, the Court below has rightly directed
in the decree for the return of the amount of earnest money received by them
from the appellant.
6.
As far as the argument that the appellant was entitled to the
compensation and damages for the amount, which was given to Respondents Nos. 2
to 6, as an advance money, suffice it to say that there is no such stipulation
in this behalf in the agreement to sell. Besides the appellant, has failed to
lead any evidence about this plea, which he had to prove in terms of Sections
73 and 74 of the Contract Act, 1872.
7.
For the question that the appellant is bona fide purchaser, suffice it
to say that according to the provisions of Section 54 of the Transfer of
Property Act, an agreement to sell does not create or purport to create any
right or interest in an immovable property, except it confers upon a party the
right to seek the specific enforcement thereof, but when the appellant was not yet
the owner of the property, no defence in terms of Section 27-B of the Specific
Relief Act, could have been set out. Besides, the appellant's claims that he
was unaware of the agreement to sell between Respondent No. 1 and Respondents
Nos. 2 to 6, has been set at naught by one of the defendants namely Aziz Ahmed,
when appeared before the Court as DW-3 and clearly deposed that:--
this statement has not been subjected to
cross-examination by the plaintiff and is enough to show that the appellant had
the knowledge of the earlier agreement to sell and therefore, it was his
responsibility to have made inquiries to find out, about the fate of the
earlier agreement to sell.
In the light of what ever has been stated
above, we do not find any merit in this appeal, which is hereby dismissed.
6.
For the other two appeals filed by Muhammad Siddique, the only plea
raised is that the was a minor, when the two agreements to sell were executed,
therefore, such agreements are void. Admittedly, he was a minor at the relevant
time and the agreement Ex. P-4, was entered on his behalf by his real mother;
in the agreement, it is specifically stipulated that the mother shall obtain
the guardianship certificate and the permission from the learned Guardian Judge
for the sale of the minor's share in the joint suit property before the target
date; these documents have been produced by the Respondents Nos. 2 to 6,
themselves establishing that the mother had applied for the above purpose and
she was appointed the guardian vide order Ex. D-1 dated 29.5.1989; thereafter,
she also procured the permission for the sale of minor's share in the suit
property, from the Court through order dated 16.11.1989, Ex. D-2. When
specifically asked in the Court, learned counsel for Muhammad Siddique has
categorically stated that this application for the permission u/S. 29 of the
Guardians & Wards Act, 1890, was made pursuant to the agreement to sell Ex.
P-4 and the agreement was mentioned in the application and the permission was
accordingly sought and obtained on that account; he however, has argued that in
view of the judgments reported as Ghulam Nabi vs. Faisal Naveed and 2 others
(2003 SCMR 1794) and Hazrat Khan vs. N. Khalid Khan and others (1997 CLC 1765),
any sale agreement between the minor without first obtaining the permission
from the learned Guardian Judge is void; the above judgments have been
considered but found distinguishable on their own facts. We are conscious of
the legal position that a contract by a minor is not merely void but void ab
initio and hence, cannot be sued upon. Such a contract has no existence in the
eyes of law and entails no liability. But in the present case, it is not the
minor, who has entered into the agreement himself, rather that was through his
defecto guardian, the mother. The Agreement to sell is not the sale of an
immovable property, rather it is only a promise to do so in future. Therefore,
if the agreement has been made on behalf of the minor by a close relative, like
the mother and prima facie is in the interest of the minor as in this case,
because the other co-shares were selling their shares, and it was not in the
benefit of the minor to retain his share out of the joint khata and there was a
clear stipulation in the agreement that the permission shall be obtained from
the Guardian Court before the sale is made; such agreement shall not be void or
invalid, rather it shall be an agreement, where the competency of the mother to
enter into the transaction and the enforceability thereof, shall be dependent
upon the requisite guardianship certificate and the permission of the Court; if
it is granted, the agreement becomes enforceable, but otherwise it shall have
not legal value. In the instant case, we have noticed with care that there is a
clear mention about the permission in the agreement Ex. P-4, it is on account
of this agreement by a specific
reference, that permission was obtained and granted by the Court, when the
application was made by the mother and in the order Ex. D-2, it is clearly
mentioned that the sale is in the benefit of the minor and is meant to
safeguard his interest, resultantly in the above circumstances, the plea
propounded by the appellant's counsel that the Ex. P-4, is void, has no force
and is hereby repelled.
7.
For the other two appeals filed by Aziz Ahmed, learned counsel for the
appellant has not independently argued but has relied upon the submission of
learned counsel for the appellant in RFA No. 462 of 2004, which pleas have
already been answered.
In the light of above, we do not find any
merits in all these appeals which are hereby dismissed.
(Sh. Zulfiqar Ahmad) Appeals dismissed.