PLJ 2009 Karachi
Present:
Gulzar Ahmed, J.
Messrs
SUNLEY DEVELOPERS PRIVATE LIMITED through Authorised Officer, Karachi
versus
Messrs
MUMAIR ASSOCIATES through Attorney
and
others--Defendants
Suit No. 9
and C.Ms. Nos.53 and 2790 of 2008, decided on 31.12.2008.
Limitation
Act, 1908 (IX of 1908)--
----Art.
113--Civil Procedure Code, (V of 1908), O. VII, R. 11--Specific Relief Act (I
of 1877), S. 12--Suit for specific performance of
contract--Limitation--Rejection of plaint--Scope--While dealing with the
question of rejection of plaint under O.VII, R. 11, C.P.C. the contents of the
plaint were to be assumed to be correct and same would be rejected if it was
shown that the plaint on its face was barred by law of limitation--Where the
plaint on its face did not show that same was barred by limitation, its
rejection would not be justified. [P.
209] A
Specific
Relief Act, 1877 (I of 1877)--
----S.
12--Civil Procedure Code, (V of 1908), O. VII, R. 11--Suit for specific
performance of agreement to sell--Rejection of plaint--Scope--All the items on
which grievances had been raised by the plaintiff were to be undertaken by the
plaintiff itself and none by the defendant--Heading of the agreement though
mentioned same to be an "agreement to sell" but its reading showed
that it was not so but was a complete conveyance of the land by defendant to
the plaintiff with giving of irrevocable general power of attorney for selling
of the plots and recovery of sales proceeds and making of sub--leases in favour
of prospective purchasers--Held, to the extent what was read from the agreement
itself and complaints made in the plaint, there seemed to be no cause of action
for filing of the suit by the plaintiff--Application for rejection of plaint
was allowed. [Pp. 211 & 212] B
& D
1986 SCMR
497; PLD 1987 Kar. 132; PLD 1985 SC 153; PLD 1987 Kar. 292; 2001 CLC 946 and
1988 CLC 722 ref.
Specific
Relief Act, 1877 (I of 1877)--
----S.
12--Civil Procedure Code, (V of 1908), O. VII, R. 11--Suit for specific
performance of agreement--Lease--Rejection of plaint--Scope--Agreement, though
showed selling of 950 residential plots but their exact location was mentioned
to be partly in specified survey numbers and as to where the remaining part of
the land was situated, the agreement was altogether silent--Except for there
being a covenant from the side of the defendant that it had a subsisting lease
of land, no particulars or details were given about purported lease as to from
whom it was obtained, what was its date, its nature, right given under it and
to what specific land it related; agreement and plaint were altogether silent
on this aspect of the matter--Where a document which, in the present case, was
agreement to sell purported to have conveyed the land of 950 plots by the
defendant to the plaintiff, it had to mention full particulars and details of
the lease--Even the copy of purported lease was not attached with the plaint
nor was available on record which would lead to the only inference that there
was no existence of lease of the suit land--Application was allowed. [Pp. 211 & 212] C & D
Mr. Muhammad
Sadiq Hidayatullah, Advocate for Plaintiff.
Mr. Nazar
Akbar, Advocate for Defendant No. 1.
Nemo for
Defendants Nos. 2, 3 and 5.
Date of
hearing: 31.12.2008.
Order
(1) &
(2) These are the two applications one is under Order XXXIX, Rule 1 & 2,
C.P.C. filed by plaintiff and the other is under Order VII, Rule 11, C.P.C.
filed by Defendant No. 1. The Defendant No. 1 has filed counter affidavit to
the first mentioned application while the plaintiff has filed objections to the
second application to which rejoinder has been filed by Defendant No. 1. Both
the counsel for the parties have made extensive submissions.
Learned
counsel for Defendant No. 1 has contended that no notice was given by the
plaintiff to Defendant No. 1 and that the suit is time barred and even
otherwise plaintiff has no cause of action for filing of the suit. In support
of his submissions he has relied upon the cases reported in 1986 SCMR 497. PLD
1987 Karachi Karachi
On the other
hand learned counsel for plaintiff has submitted that the plaintiff has made
full payment of the consideration amount to the Defendant No. 1 and was put in
possession of the property and that Defendant No. 1 was required to demolish
the boundary wall and the agreement is irrevocable. He has finally contended
that plaintiff's right is protected under Section 53-A Transfer of Property Act
and has relied upon the case reported in 1988 CLC 722.
I have
considered the submissions made by learned counsel and have gone through the
record.
The suit has
been filed for specific performance of contract, declaration and injunction. It
is alleged in the plaint that plaintiff has entered into an Agreement to Sell
dated 30-4-1998 with the Defendant No. 1 for purchase from Defendant No. 1
housing scheme by the name of Gulshan-e-Rumi upon besides other survey numbers
including Survey Nos. 108, 109 and 110 situated in Deh Safooran, Tapo Gadap,
Taluka & District East, Karachi on which 950 residential plots of 120 and
133 square yards have to be constructed and the plaintiff has agreed to
purchase these plots. The consideration of Rs.750 per square yard including all
outer and internal development charges together will all rights, title and
interest with full vacant possession and free from encumbrances, charges and
disputes. It is alleged that on the signing of the Agreement Rs. 100,00,000 was
paid and further Rs.50,00,000 was also paid as per the schedule of the
Agreement. It is alleged that on signing of the sale agreement and payment of
Rs. 150,00,000 the defendant handed over actual vacant possession of the
property to the plaintiff. Plaintiff got the lay out plan approved for 685
units/bungalows and obtained N.O.C. for sale of 218 units/bungalow, through its
sister concern M/s. Sobia Enterprises from the Cantonment Board. The
construction and development work was stopped because of the notice of
Defendant No. 4 namely Cantonment Board who asked for obtaining of N.O.C. from
Civil Aviation Authority. It is alleged that as per agreement the Defendant No.
1 had to obtain N.O.C. from competent authority and that the defendant failed
to get demarcation of boundary wall of the said housing scheme. Defendant also
failed to make internal development as per agreement of laying carpeting of
roads and separate approval of the residential plots. It is alleged that
plaintiff pressed the Defendant No. 1 to honour the terms of the agreement who
kept the plaintiff on false promises and ultimately in March 2007 defendant
failed to provide all the required N.O.C. and approval of residential status of
housing scheme and construction and carpeting of road was not done. It is
alleged that the defendant has threatened to dispossess the plaintiff and
refused to honour the terms of the agreement. It is alleged that the cause of
action for the suit accrued to the plaintiff in March 1997 when the plaintiff
paid and defendant received a sum of Rs. 100,00,000 and handed over the vacant
possession of the suit property and thereafter when plaintiff paid further sum
of Rs.50,00,000 to the defendants and ultimately in March 2007 when the
defendant failed to honour the commitment made in the agreement.
So far the
first submission of the learned counsel for the plaintiff that no notice was
given by the plaintiff to the defendant for seeking compliance of the said
agreement and to show its own willingness to perform the agreement, it may be
noted that no specific provisions of law was cited by the learned counsel to
show that giving of a notice for filing of suit for specific performance is
mandatory and without it the suit will not be maintainable. It appears to me
that there is no legal requirement for giving of a notice before filing of a
suit for specific performance of contract but prudency requires that giving of
notice be adverted to before entering upon costly and time consuming affair of
litigation. The exchange of notice and reply, in many cases may bring parties
to some agreeable solution of the dispute or at least narrow down contentious
issues between them and also crystallize their respective stand on point or
points on which disagreement exist. This facilitates Court proceeding as it
will only address to the narrowed controversy and answer to it. Since no
specific law has been cited for giving of a notice before filing of the suit
for specific performance of contract, therefore, this question cannot be
considered for rejection of the plaint under Order VII, Rule 11, C.P.C.
As regards
the second submission of the learned counsel that the suit is time barred,
Defendant No. 1 counsel has contended that even if the plea of the plaintiff
that it has paid the amount of Rs. 15,000,000 is accepted in accordance with
the schedule provided in clause (2) of the agreement still the suit will be
time barred, as it has not been filed within 3 years from the last payment
shown in the schedule. The schedule shows that a sum of Rs. 10,000,000 was paid
on the date of agreement i.e. 30-4-1998, Rs.2,500,000 within 30 days of the
signing of the agreement and further Rs.2,500,000 on expiry of 60 days from the
date of agreement. Thus the last payment would be around 29-6-1998.
Article 113
of the Schedule to the Limitation Act, 1908 provides limitation period for
filing of suit for specific performance of contract that of 3 years from the
date fixed for the performance and if no such date is fixed then from the date
the plaintiff has notice that performance is refused. Admittedly, no date is
fixed in the agreement for the performance, therefore, the second part of the
provision will apply where limitation has to run from the date of refusal to
perform the agreement. Plaintiff in the plaint has pleaded that refusal to
perform the agreement has been made by the Defendant No. 1 in March 2007. The
Defendant No. 1 has not shown any document that there was refusal on its part
to perform the agreement prior to the date which is alleged in the plaint. In
the absence of any such prior refusal, the question as to whether there was a
refusal to perform the agreement by the Defendant No. 1 in March 2007 is a
question of fact which can only be determined after evidence is recorded by the
parties. After all while dealing with the question of rejection of plaint under
Order VII, Rule 11, C.P.C, the contents of plaint are assumed to be correct and
it will be rejected if it is shown that the plaint on its face is barred by the
law of limitation. The plaint, on its face does not show that it is barred by
limitation law.
As regards
the last arguments of the learned counsel for the Defendant No. 1 that the
plaintiff has no cause of action for the suit, it may be noted that the
Agreement to Sell was made between the plaintiff and Defendant No. 1 in respect
of housing scheme of Gulshan-e-Rumi on land besides other survey numbers
including survey Nos. 108, 109 and 110 in Deh Safooran, Taluka and District
Karachi East. Second recital of the agreements provide that the Defendant No. 1
has agreed to sell, transfer, convey and assign to the plaintiff a total area
of 115975 square yards partly from the said survey numbers for development and
construction of approximately 950 residential plots of 120 and 133 square yards
at an agreed sale consideration to be calculated at the rate of Rs.750 per
square yard each inclusive of all development charges together with tight,
title and interest with full vacant possession, free from all encumbrances.
Developing charges is defined in clause (b) of this recital with is as follows
:--
(b) The
agreed Sale consideration to be calculated at the rate of Rs.750 per each
square yard of the said Land shall also be inclusive of all the internal
development charges such as construction and carpeting of Roads as per approved
Layout Plan, separate approved Plans from the concerned authorities with all
required N.O.C.'s together with approval of their Residential status under the
said Housing Scheme, permission/N.O.C. for sale and allotment of the said plots
to the individual allottees including the permission/N.O.C. for construction in
respect of the plots involved in the said Land from the concerned authorities
of the Cantonment Board and from all other concerned Governmental
Authorities."
Clause (2)
of the agreement shows payment of Rs. 10,000,000 as partial payment towards
consideration and further two payments of Rs.2,500,000 in two instalments of 30
days and 60 days respectively from the date of agreement. Clause-3 contains
schedule on earn and pay basis and it provides that 65 % out of the amount to
be recovered by the plaintiff on account of sale proceeds of 950 residential
plots from prospective purchasers shall be invested by the plaintiff upon
construction of model bungalows, bungalows on account of development and on
other construction work and payment to the Defendant No. 1 of 25% out of the
amount recovered by the plaintiff from the perspective purchaser for adjustment
of full and final consideration of the land and the rest 10% will be retained
by the plaintiff against investment in the housing scheme. By clause-4
Defendant No. 1 covenants with the plaintiff that the lease in respect of the
land of 950 residential plots under sale is in full force, valid and subsisting
and that the Defendant No. 1 has full power and lawful authority to sell,
transfer, convey and assign the said land to the plaintiff in the manner done
by the agreement. By clause-5 Defendant No. 1 covenants with the plaintiff that
it has paid all assessment, taxes, cesses and development charges, ground rents
etc, till the delivery of vacant possession. By clause-7 defendant covenants
with the plaintiff that it shall do or cause to be done all lawful acts, deeds
and things for better selling and perfectly assigning the said land unto the
plaintiff free from all encumbrances and that the Defendant No. 1 shall execute
an Irrevocable General Power of Attorney in favour of the plaintiff or his
nominee containing all the powers and authorities for booking and selling of
the said plots to individual sub-lessees, to handover sub leases, to get
publication or advertisement for sale, recover sale proceeds, to get construct
house on 950 plots, to deliver physical possession thereof to perspective
purchaser, to sign, execute and admit execution of sublease deeds of the said
plots in favour of individual allottees and sub-lessees. By clause-8 Defendant
No. 1 has delivered full vacant possession of the land to the plaintiff with
stipulation that now the plaintiff is fully and legally entitled to get the
plots sold to the perspective purchase
of its own choice either under old or new name of housing scheme and to recover
sale proceeds there-from without any concern whatsoever of the Defendant No. 1.
By clause (9) the Defendant No. 1 has covenanted with the plaintiff that it
shall sign, execute and issue allotment letters and possession letters of 950
residential plots of the said land in favour of the newly established
partnership firm namely Messrs G.M. Developers Karachi. In clause (10) the
Defendant No. 1 covenanted that it will demolish the entire boundary wall at
their own cost and expenses and by Clause-11, the agreement has been made
irrevocable and binding upon the parties, their heirs, successors, executors,
administrators and assignees.
The
grievance of the plaintiff is that the obligation of obtaining approval of lay
out plan of 685 units/bungalow, N.O.C. for sale of 218 units/bungalows was of
the Defendant No. 1. It is also complained that the Defendant No. 1 failed to
get demarcation of the boundary wall and internal development as per agreement
that of laying carpeting of roads and separate approved plan of residential
plots. On the perusal of the agreement as noted above, all the items on which
grievance has been raised by the plaintiff were to be undertaken by the
plaintiff itself and none by the Defendant No. 1. This is clear from reading of
second recital and moreso by its sub-para, (b) and clause (3) of the agreement.
Although heading of the agreement mentions it to be an Agreement to Sell but
its reading shows that it is not so but is a complete conveyance of the land by
the Defendant No. 1 to the plaintiff with giving of Irrevocable General Power
Attorney for selling of the plots and recovery of sale proceeds and making of
sub leases in favour of the prospective purchaser. To the extent what is read
from the agreement itself and complaints made in the plaint, there seems to be
no cause of action for filing of the suit by the plaintiff.
The other
very interesting feature of the case is that though the agreement shows selling
of 950 residential plots but their exact location is mentioned to be partly on
survey Nos.108, 109 and 110 in Deh Safooran, Taluka & District East, Karachi
Despite
above failings patent on the record, the defendants Nos.3 & 5 who are
respectively Mukhtiarkar, District Malir and Province of Sindh through
Secretary Land Utilization have filed written statement, which is signed and
verified by one Iqbal Ahmed son of Muhammad Umar without mentioning his
designation and in para, (e) under the heading of preliminary objection it
contains as follows:
"(e)
That entries in favour of defendants Nos. 1 and 2 were kept on the basis of
registered sale deed but so far no proof is filed to establish that the sellers
and defendants Nos. 1 and 2 possessed any marketable title."
Now, what
one can make out of what is purported to be pleaded in this paragraph of the
written statement. In the first place it says that entries in favour of
defendants Nos. 1 & 2 were kept on the basis of registered sale deed and in
the second place it says that no proof is filed to establish that sellers and
defendants Nos. 1 & 2 possessed any marketable title. These are totally
destructive and inconsistent pleas, which are irreconcilable and seem to have
been made only to facilitate wrong doing by defendants Nos.3 & 5. It has introduced
facts which are altogether not pleaded in the plaint nor mentioned in the
agreement itself. This appears to be totally dubious plea. The Secretary Land
Utilization Department, Government of Sindh is directed to enquire into and
file complaint against the said Iqbal Ahmed son of Muhammad Umar in the Anti Corruption Court
Resultantly,
application under Order VII, Rule 11, C.P.C. is allowed. Plant is rejected and
all other applications are disposed of.
(R.A.) Order accordingly.
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