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Suit No.149 of 1979, decided on 5th August, 1984.
‑‑‑S. 54‑‑Specific Relief Act (I of 1877), S.21‑‑Agreement to sell‑ Validity of‑‑Suit for specific performance of con tract‑ ‑Maintainability‑ ‑Agreement to sell in respect of property in dispute neither showing most essential term of sale, viz. sale consideration for which disputed property was agreed to be sold nor mentioning other important terms Of all i.e. time for completion of sale; payment of balance of sale con deration by vendee; time for performance of contract; mode of payment and delivery of possession of property by vendor to vendee‑ Such sale agreement, held, could not be deemed to have legal existence and as such could nit‑be made basis of suit for specific performance of contract.
Custodiain of Enemy Property v Hushang M Dastur P L D 1977 Kar. 377; Major (Rtd.) Ahmed Khan Bhatti v Masooda Fatima P L D 1981 Kar. 398 and Perveen Begum v Mr. Sarwar Khan PLD 1956 Kar. 521 ref.
Khalilur Rehman for Plaintiff.
Nizam Ahmad for Defendant.
Date of hearing: 13th February, 1984.
The plaintiff has filed this suit against the defendant for specific performance of an alleged agreement of sale dated 22‑5‑1978. The following facts are disclosed in the plaint.
That under an agreement dated 22‑5‑1978 the defendant agreed to sell to the plaintiff, plot of land with building thereon bearing No.323, Survey Sheet Garden East, situated at the corner of Birtto Road, and Amtul Ammara Road, Garden East, Karachi for a total sale consideration of Rs.4,00,000. Out of the above agreed sale consideration the defendant paid a sum of Rs. 25,000 as earnest money agreeing to pay the balance amounting to Rs.3,75,000 at the time of registration of sale‑deed before the Sub‑Registrar Karachi. That at the time of entering into the above agreement of sale the lease of the plot stood forfeited and accordingly, the defendant undertook to get the lease restored from the authorities concerned and to inform the plaintiff about the same. It is alleged that for the above reasons no time was fixed for completion of sale. That the plaintiff entering into agreement of sale approached the defendant on several occasions but he avoided completion of the sale on various pretexts. The plaintiff finally received a letter from the defendant dated 14‑9‑1978 wherein the defendant falsely alleged non‑compliance of the agreement on the part of the plaintiff and he returned the earnest amount of Rs.25,000. The plaintiff, however, did not accept the same and repudiated the claim of the defendant through his Advocate letter dated 24‑9‑1978. Alter exchange of some correspondence between the parties, the present suit was instituted on 24‑2‑1979 for specific performance of agreement of sale.
In the written statement filed by the defendant. He denied existence of any concluded agreement of sale between the parties and contended that the receipt dated 22‑5‑1978 was merely a deposit by the plaintiff as a security for execution of agreement of sale between the par4ies which was to follow thereafter. It is also denied that the sale consideration was Rs.4,00,000 as alleged by the plaintiff and it is contended that the agreed sale consideration was Rs.8,00,000. On pleadings of the parties the following consent issues were adopted by the Court:‑
(1) Was there a binding agreement entered into between the parties for the sale of suit property If so in what terms
(2) What was the sale consideration agreed to between the parties
(3) Has the defendant committed breach of the contract of sale of suit property If so, to what effect
(4) What should the decree be "
On the above issues the plaintiff has examined himself as Ex.5 and has produced documents Exs.5/1 to 5/9. The defendant has also examined himself as Ex. 6 and has produced document Ex. 6/1 to 6/8. 1 have heard the learned counsel for the parties at length and my findings on the above issues are as follows:
will take up all these issues together as they are interconnected and can be conveniently disposed of together. The plaintiff, contention is that by virtue of documents Ex.5/1 there came into existence the binding and concluded contract relating to the sale of the suit property between the parties. On the other hand the defendant contends that the documents Ex. 5/1 was only a step towards finalization of the agreement of sale, which never materialized as the plaintiff avoided to execute the agreement of sale. The document Ex. 5/1 relied by the plaintiff as the concluded agreement of sale between the parties reads as under:‑
"Received Rs.25,000 as earnest money for the property Sale of Esmail Villa Garden East, Plot No.323, corner of Britto Road, and Ambit Ammara Road, Garden East Karachi‑5 from Mr Shajar Ali Hoti son of Mr. Baghali Hoti.
Dt:22‑5‑1978
Witness:
Muhammad Yousaf. Nadir Baig Farid.
Sd/
(E.H.Y. Sobhani)"
A reading of Ex.5/1 will show that the essential terms of sale namely the sale consideration for which the property was agreed to be sold is not mentioned therein. The document also did not mention the time for completion of sale, payment of balance of sale consideration by the plaintiff and the delivery of the possession of property by the defendant to the plaintiff. There is serious dispute between the parties as to the consideration for which the property was agreed to be sold. According to plaintiff the sale consideration was agreed at Rs.4,00,000 while according to the defendant it was Rs.8,00,000. In his evidence before the Court the plaintiff stated that he entered into agreement of sale on 22‑5‑1978 for purchase of the suit property for a total sale consideration of Rs.4,00,000 and paid Rs.25,000 as earnest money. The balance of the sale consideration was payable on regisration of final sale‑deed. It is also stated by the plaintiff in his examination‑in‑chief that he got the draft agreement of sale prepared and typed and delivered the same to defendant but he did not execute or return it to him. In cross‑examination he stated that the common practice in the market is that 10% of the ale consideration is paid as an advance. He admitted that at the time he paid the sum Rs.25,000 the lease of the plot was forfeited and he did not know when the lease was restored. He stated that both the witnesses of Exh.5/1 had signed the receipt in presence of the defendant. He stated that whenever he met defendant and asked him for executing the agreement of sale he avoided by replying that he will not do so unless the lease was restored. He stated that he delivered the copy of draft agreement to the defendant after about 7/8 days of the execution of Exh.5/1, and until then lease was not restored. He did not pay the balance amount which was to be paid after execution of the agreement. He stated that the sale consideration of Rs.4,00,000 is not mentioned in Exh.5/1 as the defendant had agreed to execute the agreement of sale within 4/5 days and this could be provided therein. He denied the suggestion that no final agreement between the parties was reached and the sum of Rs.25,000 was paid only to continue the negotiation. He also denied the suggestion that the defendant was demanding Rs.8,00,000 but he was offering only Rs.7,50,000. He stated that the present value of the plot is between Rs.3,00,000 to Rs.3,50,000 but he is prepared to pay Rs.8,00,000 to settle the dispute. The defendant on the other hand in his evidence before the Court stated that in the year 1978 he advertised for sale of the suit property and many prospective customers came to him and offered between Rs‑6,00,000 to Rs.7,00,000 for it. The plaintiff first offered Rs.7,00,000 and thereafter he raised it to Rs.7,25,000 but the defendant did not agree as he was demanding Rs.8,00,000. He further stated that a sum of Rs.25,000 was paid as token money for continuing further negotiations for sale of the property. However, after payment of the above amount the plaintiff did not turn up nor offered or paid any further amount to the defendant. He contacted the plaintiff on several occasions but he avoided to settle the matter. The lease of the plot was renewed in June 1978 and he has produced Exhs.6/1 to 6/3 to prove that fact. He stated that one Sultan with whom the plaintiff was in constant touch had conveyed these facts to the plaintiff. He also stated that at the time Rs.25,000 was paid, the plaintiff, Sultan and Muhammad Yousuf were present. Yousuf had come with the plaintiff and he is a broker. He also stated that the receipt Exh.5/1 was signed by Yousuf only and no other witness had signed the sale. He produced a copy of the receipt as Exh.6/5 to show that it bears the signature of only one witness Muhammad Yousuf. As the plaintiff failed to finalize the transaction he returned the sum of Rs.25,000 through letter Exh.5/2. He then negotiated for sale of the property to another person and agreed to sell the same for Rs.10,00,000. He produced the agreement with the third party as Ex.6/6. However, after filing of the present suit, he stated, that he cancelled the agreement Exh.6/6 and returned the sum of Rs.1,25,000 received by him from the third party. He produced the receipt for return of the amount as Exh.6/7. The present market value of the property is stated by the defendant in his evidence between Rs.15/16 Lac. In cross‑examination the defendant stated that in reply to his advertisement for sale of the property, Lahore Boot House, had offered Rs.7,00,000. Bombay Property, offered Rs.6,50,000 and both these parties are in Karachi. He further stated that the plaintiff contacted him about 8 or 10 days before execution of Exh.5/1 and he only stated that he is interested ‑in purchasing the property in suit but sale consideration was not settled. He denied that the plot in dispute is in cutting and stated that in fact the area of 1,145 sq. yds. is after the cutting is allowed. He denied that before the execution of Exh.5/1 the contract was finally settled between the parties. He admitted that he wrote Exh.5/1 himself and described Rs.25,000 as earnest money. He further stated that after receipt (Exh.5/1) was executed the parties were required to settle the sale consideration, the mode of payment, time during which the sale‑deed was to be executed and the payment of taxes. He denied the suggestion that the property in dispute is reputed to be haunted. He also denied that witness Nadir Baig is his friend and is known to him. He stated that he did not inform the plaintiff personally about the renewal of lease but Sultan had communicated to the plaintiff personally. He also stated that by Exh.5/2 he only demanded return of the receipt and had not cancelled the agreement because there was no agreement in existence between the parties. He stated that the oral transaction in respect of the sale of property was only to the extent that the parties had agreed to settle the terms and conditions and get the agreement drafted by their advocates.
From the above discussed evidence it is quite clear that both the parties contemplated another agreement after execution of Exh.5/1 which was admittedly not executed. The plaintiff in his examination‑in- chief stated that after execution of Exh.5/1 he prepared a draft agreement and sent it to the defendant which he avoided to execute. He did not produce any copy of the said draft and stated that he did not retain the same. In these circumstances the burden of proving that the parties had entered into a concluded agreement of sale rested on the plaintiff. The two witnesses before whom Exh.5/1 was executed and who according to plaintiff signed it have not been examined and no explanation for their non‑examination is offered by the plaintiff.
The only other evidence in support of the contention of plaintiff that there was a duly concluded contract between the parties is Exh.5/1. I have already reproduced above the contents of Exh.5/1 which is in the nature of receipt acknowledging only receipt of a sum of Rs.25,000 in connection with the sale of the property in suit. Neither the sale consideration for which the property is agreed to be sold is mentioned in it, nor any other terms of the sale namely time for payment of the balance of sale consideration by the plaintiff, time for performance of the contract, mode of payment, delivery of possession of property, can be ascertained from it. There is serious dispute between the parties about the sale consideration of the property. The plaintiff claims that it was Rs.4,00,000 while the defendant states that it was settled at Rs.8,00,000. In the absence of any stipulation in Exh.5/1, regarding sale consideration the burden of proving the same was on plaintiff who failed to discharge the same. He did not examine any of the witnesses before whom he paid Rs.25,000. During the pendency of the suit the plaintiff filed a statement in Court agreeing to pay a sum of Rs.8,00,000 as the total sale consideration of the property A and offered to deposit this amount in Court. The statement is on record as Exh.5/9. The defendant has refused to accept this offer on the ground that the market value of the property has gone much above Rs.8/9 Lac now. The plaintiff himself admitted in his evidence that Exh.5/1 was to be followed by another document in which sale consideration and other terms and conditions of the sale were to be incorporated. The document Exh.5/1 did not mention the most important term of sale namely the sale consideration. In these circumstances it cannot be said that the parties were ad idem as to all the essential terms of sale. In the case of Custodian of Enemy Property v. Hushangi M. Dastur P L D 1977 Kar. 377 a Division Bench of this Court held that the true test for deciding whether the parties had reached a concluded contract or not is to ascertain whether the parties were of one mind on all the material terms at the time it is said to have been finalised between them and whether they intended that the matter was closed and concluded between them. In the light of the evidence which has come on record in this case, it cannot be said the parties were of one mind on the sale consideration of the property which is definitely an essential term of the sale. Mr. Khalilur Rehman, the learned counsel for the plaintiff referred to the case of Major (Rtd.) Ahmed Khan Bhatti v. Masooda Fatima P L D 1981 Kar. 398 to contend that in that case I held that a document which contemplated execution of another document could be enforced as an agreement of sale and accordingly urged that in the present case also the document Exh‑5/1 could be considered as an agreement of sale between the parties. The argument of the learned counsel, however, looses sight of the fact that in the above‑cited case the document which was relied as a concluded agreement of sale, besides, mentioning particulars of property, also mentioned the total sale consideration for which property in suit was agreed to be sold. Similarly, in the case of Parveen Begum v. Mr. Sarwar Khan P L D 1956 Kar. 521 relied by the learned counsel, the Court considered a document which contemplated execution of another document as an agreement of sale but in that case also the document so considered as an agreement of sale, did mention the sale consideration of the property. Therefore, on fact both these cases, relied upon by the learned counsel for the plaintiff, are distinguishable. As pointed out by me, earlier, the document Exh.5/1 did not mention the total sale consideration for which the property was agreed to be sold. It cannot be disputed that the sale consideration is one of the most essential term of an agreement of sale and in the absence of an agreement between the parties on that term, no agreement of sale could legally come into existence. Mr. Khalilur Rehman, the learned counsel for the plaintiff also contended, that in view of the fact that the plaintiff is now prepared to pay the sum of Rs.8,00,000 demanded as sale consideration by the defendant, the suit for specific performance could be decreed. This belated offer of plaintiff contained in the statement Exh.5/9 cannot be accepted at this stage. The plaintiff had the opportunity of making this offer when the defendant wrote to him on 26‑10‑1978 (Exh.5/4) stating that the sale consideration was agreed at Rs.8,00,000 and not Rs.4,00,000 as contended by the plaintiff but instead of doing that he insisted that the sale consideration was Rs.4,00,000 only. The defendant has contended that the price of property has gone up now and in fact he has produced in evidence an agreement which he entered into with another party in 1979 for sale of the suit property for a sum of Rs.10,00,000. In these circumstances the offer made by the plaintiff at the trial of suit to pay Rs.8,00,000 as sale consideration of the property cannot be taken into account.
In view of above discussion I am of the view that the plaintiff has failed to establish that there was any concluded agreement of sale between the parties in respect of the property in suit. He also failed to establish that the defendant agreed to sell the property to him for Rs.4,00,000. I accordingly dismiss the suit for specific performance. However, the sum of Rs.25,000 which was received by the defendant as earnest money from the plaintiff will be refunded to plaintiff. There will be no order as to costs.
H.B.T./S‑59/K Suit dismissed.