Specific performance . Additional amount is not justfied. Pay balance amount in 30 days, otherwise earnest money will be forfeited .
 |
| Specific performance . Additional amount is not justfied. Pay balance amount in 30 days, otherwise earnest money will be forfeited . |
**فیصلے کا خلاصہ:**
یہ فیصلہ لاہور ہائی کورٹ کا ہے جس میں دو جڑے ہوئے سول ریویژنز پر فیصلہ سنایا گیا ہے۔ ان میں سے ایک ریویژن راجہ محمد خوبائب کی جانب سے دائر کی گئی تھی۔
**اہم نکات:**
1. **کیس کا پس منظر:**
- راجہ محمد خوبائب (درخواست گزار) ایک معاہدہ برائے فروخت کی تکمیل کے مسئلے میں ملوث تھا، جس کی تاریخ 30.11.2020 تھی۔
- معاہدے کی تکمیل کے لیے دو بار توسیع کی گئی تھی، اور درخواست گزار کو طے شدہ قیمت کے علاوہ اضافی رقم ادا کرنے کا کہا گیا تھا۔
2. **عدالت کے فیصلے:**
- ابتدائی عدالت نے مخصوص کارکردگی کا فیصلہ سنایا اور درخواست گزار پر اضافی رقم کی ادائیگی کی شرط عائد کی۔
- اپیل کورٹ نے اس فیصلے کو برقرار رکھا۔
3. **مسائل پر غور:**
- **اضافی ادائیگی:** ہائی کورٹ نے اضافی ادائیگی کے احکام کو غیر منصفانہ قرار دیا۔ عدالت نے یہ پایا کہ دونوں فریقین غیر کارکردگی کے ذمہ دار تھے، لہٰذا درخواست گزار پر اضافی رقم کا بوجھ ڈالنا غلط تھا۔
- **معاہدے کی منسوخی:** عدالت نے کہا کہ تاخیر کی وجہ سے معاہدہ خودبخود منسوخ نہیں ہوا۔ درخواست گزار پر ڈیفالٹ کا الزام عائد کرنا غیر منصفانہ تھا کیونکہ مدعا علیہ پاکستان میں موجود نہیں تھا اور نہ ہی کوئی ڈیفالٹ نوٹس جاری کیا گیا تھا۔
4. **حتمی فیصلہ:**
- سول ریویژن نمبر 38993/2023 کو مسترد کر دیا گیا۔
- سول ریویژن نمبر 23551/2023 کو منظور کر لیا گیا، اضافی ادائیگی اور earnest money کی واپسی کے احکام کو کالعدم قرار دیتے ہوئے۔
- درخواست گزار کے خلاف فیصلہ کیا گیا کہ وہ 30 دن کے اندر بقایا قیمت 24,500,000/- روپے ادا کرے۔ بصورت دیگر، earnest money ضبط کر لی جائے گی۔
5. **ڈکری شیٹ کی تیاری:**
- عدالت نے ڈکری شیٹ تیار کرنے کا حکم دیا۔
اس فیصلے میں عدالت نے درخواست گزار پر عائد اضافی مالی بوجھ کی منصفانہ اور قانونی حیثیت پر غور کیا اور معاہدے کی کارکردگی اور ڈیفالٹ کے مسائل کو حل کیا۔
reo. HCJDA 38.
Judgment Sheet
IN THE LAHORE HIGH COURT,
LAHORE.
JUDICIAL DEPARTMENT
….
Civil Revision No. 23551/2023.
Raja Muhammad Khubaib.
Versus
Addl. District Judge, Lahore & others.
JUDGMENT
Date of hearing:
05.06.2024.
Petitioner through:
Ms. Sabahat Rizvi, Advocate.
Respondent No.2 through:
Mr. Maqsood Ahmad Ghuman,
Advocate
Respondent No.3 through:
Mr. Ishfaq Amir, Advocate.
Respondent No.4 – [had no adverse interest to the petitioner]
ASIM HAFEEZ, J.
This and connected Civil Revision No.38993/2023 are
directed against consolidated judgment & decree dated 21.02.2023, whereby
appellate court dismissed appeals preferred by the petitioner and respondent No.3,
against judgment & decree dated 30.07.2022 of the court of first instance, which
decreed petitioner’s suit for specific performance of agreement to sell of
30.11.2020 [time for performance was extended twice with mutual concurrence],
and directed petitioner to pay additional amount of Rs.6,769,350/-, over and
above the consideration amount agreed under the agreement. Petitioner is
aggrieved of the imposition of payment of additional amount. Respondent No.3
objects to the decree of specific performance on the premise that agreement stood
rescinded upon failure of the petitioner to arrange balance consideration of
Civil Revision No. 23551/20
23.
Civil Revision No. 38993/20223.
2
Rs.24,500,000/- by the end of second extended period, which was 28.02.2021.
For quick and complete understanding, operative part of the judgment of the trial
court is reproduced hereunder,
“This civil suit is hereby decreed subject to payment of
Rs.67,69350/0 in addition to the remaining consideration
Rs.245,00,000/- by the plaintiff to the defendant No.1 within 30 days
of this order. In case of this failure to pay the said amounts within 30
days, suit of the plaintiff shall be deemed dismissed and in said case
the defendant No.1 would be bound to return the earnest money
Rs.65,00,000/- to the plaintiff within next days 30 days. There is no
order as to cost.”
2.
Factual narration provided in the opening paragraphs of judgment of the
appellate court is sufficient for understanding underlying facts, still some material
facts, potentially touching the subject matter controversy, need amplification.
Factum of Agreement to sell dated 30.11.2020, execution thereof and conditions
embodied therein constitute admitted facts. First cut-off date was 02.01.2021,
which was extended till 30.01.2021 and finally to 28.02.2021. There is no dispute
that date for performance was extended due to injunctive order against property in
question. Earnest money of Rs.6,500,000/- was paid and balance consideration
payable was 24,500,000/-. Petitioner had arranged for pay-orders for balance
consideration before 02.01.2021. Parties agree to disagree on two issues.
Petitioner alleged that he was ready and willing to perform his obligations, but
respondent No.3 was not in Pakistan till July 2021. Conversely, respondent No.3
took stand that pay-orders arranged were cancelled before 28.02.2021 and
petitioner had no funds to pay, which situation attracted default clause and
agreement, wherein agreeably time was of the essence in terms of clause 3, stood
cancelled and earnest money was liable to be forfeited. Suit was instituted on
20.05.2021.
Civil Revision No. 23551/20
23.
Civil Revision No. 38993/20223.
3
3.
Arguments heard; record perused, and Court concluded as follows.
4.
Controversy touches down upon two questions. Whether imposition of
compensation through additional payment is justified and secondly, whether
agreement stood cancelled upon alleged default and was time essence of the
contract – in the context of second issue the burden lies on the respondent No.3 to
prove factum of default of the petitioner and establish that timely performance
was central to the enforceability of the contract.
5.
First thing first. Whether imposition of compensatory amount – additional
payment – was justified. Upon perusal of the judgments of the courts, which
concurrently decided in favour of additional payment, it is found that findings
with respect to additional payment were erroneous. Concept of compensating, in
monetary terms, is essentially a tool to recompense the party that suffered loss,
injury or disadvantage. Loss caused; injury occasioned; disadvantage suffered, in
contractual arrangements, would, correspondingly, be the cause and effect of
default committed or failure attributable to one of the parties to the contract.
Hence, before subjecting defaulting party to the obligation of compensating the
non-defaulting party, it is imperative to substantiate
‘
factum of default’
. It is
axiomatic that trial court reached conclusion that ‘Now the plaintiff and defendant
No.1 are equally responsible for non-performance of the suit agreement to sell on
28.02.2021’ [observed in paragraph 11 of its judgment]. If that was the position
how could petitioner be penalized by subjecting it to payment of additional
payment when failure was attributed to both the parties. Appellate court failed to
identify and reject blatant discrepancy in the judgment, and instead endorsed the
illegality. This peculiar mistake is fatal to the sustainability of the judgments. It
appears that Courts misread the evidence and overlooked effect thereof. Evidently,
Civil Revision No. 23551/20
23.
Civil Revision No. 38993/20223.
4
Rs.6,500,000/- was paid as earnest money. Pay-orders for balance consideration
of Rs.24,500,000/- were arranged before the first performance date – [this fact
was admitted by respondent No.3, who appeared as DW-1]. Time was mutually
extended in wake of an injunctive order, which injunctive order remained intact
till 09.02.2021. Final performance date was 28.02.2021. It is not disputed that
pay-orders for Rs.5,400,000/- and Rs.800,000/- were cancelled before 28.02.2021
and other two payment orders, for substantial amount, became ineffective after
the filing of the suit on 20.05.2021. Notably, under the orders of the Court
balance amount of Rs.24,500,000/- was deposited before 06.07.2021. In these
circumstances, how lack of willingness could be attributed to the petitioner – no
reasoning was found in the judgments. There is another aspect of the matter.
Respondent No.3 appeared as DW-1, who admitted that he went to U.S in
January 2021, after the agreement, and came back in the last week of July 2021.
And who further admitted that he was not in Pakistan at the time of the extension
of time-period for performance on 30.01.2021 and 28.02.2021. One of the
conditions of the agreement was physical presence of the respondent No.3 before
DHA, Lahore, at the time of transfer of the plot – [condition 4 of the agreement].
In these circumstances, whether finding of default on the part of petitioner is
legally sustainable. I lay hands on decision in the case of “Muhammad Siddique v.
Muhammad Akram” (2000 SCMR 533), where Hon’ble Supreme Court had
awarded compensation, over and above the agreed consideration but in the
context of different facts – wherein suit, though within limitation, was instituted
after nine years of the agreement therein. In said circumstances, compensation
was awarded.
Civil Revision No. 23551/20
23.
Civil Revision No. 38993/20223.
5
6.
In view of the aforesaid, I find the findings recorded and direction of
payment of additional amount of Rs.6,769,350/- unjustified, unlawful and devoid
of reasoning.
7.
Now I take up second issue, regarding significance of the performance
within stipulated time. No doubt that timelines for performance were provided in
the agreement and same were extended on two occasions. Without commenting
on the circumstances leading to extension of time, the relevant question is
whether petitioner had defaulted after 28.02.2021 and whether any intent of
timely performance of agreement was demonstrated on the part of the respondent
No.3. There is no hard and fast rule to determine whether time is the essence of
the agreement, no doubt performance timelines in the agreement had significant
bearing on the question of timely performance and effect of failure, but mere
elapse of cut-off date, proprio vigore would not non-suit the buyer but such
determination is dependent upon facts and circumstances encountered in each
case. Respondent No.3 admitted absence from Pakistan during material times,
who remained in U.S from January 2021 till last week of July 2021. Written
statement is silent regarding issuing any notice of default on the part of the
petitioner. No notice of cancellation was issued, let alone alleged. Respondent
No.3 was the only witness appeared. No document was brought on record to show
that any authority was extended to any person to undertake process of transfer of
plot, in the absence of respondent No.3. Learned counsel for respondent No.3
cited following decisions to support argument of significance of time in the
context of effect of non-performance, “MUHAMMAD ASLAM and others. Vs.
MUHAMMAD ANWAR.” (2023 SCMR 1371), “ASIM JAMSHAID. VS.
SHAHZAD IQBAL MALIK and others.” (2023 CLC 1100), “MST. SAMINA
Civil Revision No. 23551/20
23.
Civil Revision No. 38993/20223.
6
RIFFAT and others. Vs. ROHAIL ASGHAR and others.” (2021 SCMR 7),
“MUHAMMAD JAMIL and others. Vs. MUHAMMAD ARIF.” (20021 SCMR
1108), “MUHAMMAD YOUSAF. VS. ALLAH DITTA and others.” (2021 SCMR
1241), “MUHAMMAD ABDUR REHMAN QURESHI. VS. SAGHEER AHMAD.”
(2017 SCMR 1696), “HAMOOD MEHMOOD. VS. MST. SHABANA ISHAQUE
and others.” (2017 SCMR 2022), “MUHAMMAD SAFDAR KHAN and another.
Vs. MUHAMMAD NADEEM ABBASI and another.” (2021 MLD 617), “MIRZA
SHAFAAT ALI BAIG. VS. Wg.Cdr. (Rtd.) KHURSHID ANWAR and another.”
(2020 YLR 886) and “MUHAMMAD SIDDIQUE and 6 others. Vs. ABDUL AZIZ
RATALVI and 7 others.” (2016 YLR 612). Decisions cited were rendered in
wake of peculiar circumstances in each case, and no commonalty of facts and
circumstances were found. In the instant case, both the courts dismissed the plea
of cancellation of agreement, which findings show no error of law or irregularity
in the exercise of jurisdiction. Respondent No.3 failed to prove factum of default
on the part of the petitioner and also failed to make out a case for cancellation of
the agreement in the context of condition 3 of the agreement. Respondent 3’s
counsel emphasized on the decision rendered in the case of MUHAMMAD
ASLAM and others. Vs. MUHAMMAD ANWAR (supra) without appreciating the
factum of admission of failure on the part of the buyer to arrange for remaining
consideration on the date of performance. In the case at hand pay-orders of
Rs.18,300,000/- were not cancelled at the time of final performance on
28.02.2021 and on said date respondent No.3 was not available in Pakistan.
Likewise, facts of cited case of “MST. SAMINA RIFFAT and others. Vs. ROHAIL
ASGHAR and others. (supra) are distinguishable, wherein intention to purchase
was conspicuously lacking, besides failure of the plaintiff to deposit the amount
Civil Revision No. 23551/20
23.
Civil Revision No. 38993/20223.
7
despite direction by the Court – in instant case balance amount was deposited
under the directions of the Court.
8.
There is another flaw in the judgment of the trial court, and affirmed by the
appellate court. Court observed that in case petitioner failed to pay balance
consideration within 30 days, respondent No.3 would be bound to return earnest
money. This is contrary to the terms of the agreement. Agreement provided that
in case the buyer fails to pay the remaining amount – buyer is petitioner – earnest
money shall be treated forfeited. Agreement says that in case the seller fails or
refuses to arrange for the transfer, he shall be bound to return doubled amount of
earnest money, this latter condition is not applicable since the buyer had opted for
enforcement of the agreement by resorting to remedy for enforcement of
agreement. Now what would happen if the petitioner failed to pay the balance
consideration within 30 days, without further ado earnest money had to be
forfeited.
9.
In view of the above, Civil Revision No.38993/2023 is dismissed. And
Civil Revision No.23551/2023 is allowed and judgments and decrees of the trial
court and the appellate court, to the extent of allowing / decreeing additional
amount of Rs.6,769,350/- against the petitioner and direction to return earnest
money upon failure of the buyer to pay balance consideration are, hereby, setaside and declared of no legal effect. And suit of the petitioner is, hereby, decreed
in following terms,
“Petitioner’s suit is decreed subject to payment of remaining
consideration Rs.24,500,000/- to respondent No.3 within 30 days of
signing of this order. And in case of petitioner’s failure to do the
needful, that is to pay the balance consideration within 30 days,
Civil Revision No. 23551/20
23.
Civil Revision No. 38993/20223.
8
petitioner’s suit shall stand dismissed and consequently the paid
earnest money of Rs.6,500,000/- shall stand forfeited, and
respondent No.3 shall be entitled to retain forfeited earnest money
of Rs.6,500,000/- and thereupon petitioner shall have no claim
against the property in question. No order as to the costs.”
10. Office shall accordingly prepare the decree sheet.
(Asim Hafeez)
Judge
Decision signed on June 21st 2024.
Approved for reporting.
JUDGE.
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