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Revision Application No. 296 of 1986, decided on 7th June,1987.

---S.27---Suit for specific performance, filing of--Requirements--Suit for specific performance of contract, held, could only be filed if plaintiff had obtained possession of disputed land in part performance of contract--Petitioner admittedly not in possession of land in dispute, could not sue for specific performance :of contract in respect thereof.

Haji Noor Muhammad and others v. K.D.A. P L D 1957 Kar. 373; Shaikh Barkatuilah and others v. Khawaja Muhammad Ibrahim PLD 1970 S C 483; Abdul Bhai v. Muhammad Ahmed Deen P L D 1971 S C 114 and A I R 1952 Nagpur 115 ref.

---Ss. 27-A & 42--Civil Procedure Code (V of 1908), S 115- -Discretionary relief when granted--Declaratory relief being discretionary one, Court, held, might or might not grant same in exercise of its discretion--Such discretion, however, should be exercised by Court judiciously--As case of allotment of plot in dispute in favour petitioner by respondent Authority (K.D.A.) was not a case of simple agreement, but was a case of performance of statutory obligation and function, petitioner could be granted declaration as to his title to plot in dispute or his legal character, even if decree for specific performance of contract could not be passed in his favour--Court below by refusing such declaration, could not be deemed to have exercise discretion, judiciously--Order of Court below was set aside by High Court in exercise of revisional jurisdiction.

---S.115--Principles of natural justice, violation of--Revisional juris diction--Order of authority below, cancelling allotment of plot of petitioner was passed against petitioner without giving him any opportunity to show cause against such cancellation and was upheld by Appellate Court below--Such order, unless passed under law which specifically dispensed with service of notice to petitioner, held, was against principle of natural justice and was void--Such order was set aside by High Court in exercise of revisional jurisdiction.--[Natural justice, principles of].

---S.52--Suit for declaration against cancellation of allotment of plot was filed before subsequent allotment--Effect--Suit for declaration and injunction having been filed by applicant /original allottee prior to allotment order issued in favour of respondent, such subsequent allotment, held, would not affect rights of applicant and would not be binding upon him.

Applicant in person.

S.H. Kazilbash for Respondent No. 1.

Iqbal Kazi for Respondent No. 2.

This Revision Application, under section 115, C.P.C. is directed against the Judgment and decree of the learned Judge, Small Causes Court and Ex Officio Addl. Sessions Judge, Karachi, dated 23-8-1986, Whereby he dismissed the Civil Appeal No. 308/1982, filed by the applicant against the Judgment and decree dated 26-4-1982, passed by the 1st Sr. Civil Judge, Karachi, dismissing the Civil Suit No. 1350/1967, filed by the applicant.

2. The brief facts of the case are, that in response to general offer for allotment of plots in Scheme No. 2, North Nazimabad, Karachi, the applicant applied for a plot of land and got allotted Plot No. 141-A in Block 'L' North Nazimabad, Karachi, vide Allotment Order dated 10-8-1961. He paid 10% of the occupancy value alongwith the application. As per terms of allotment 40% of the occupany value was to be paid. within thirty days from the notice of demand. Notice of demand was issued to the applicant on 27-3-1962, but was received late by him and consequently, he could not make payment within the stipulated time, viz. on or before 15th April, 1962. He however, applied for extension of time. The applicant continued to make applications for extension of time to make payment, but he received no reply. By a letter dated 23-2-1967 he was informed that the plot had been cancelled for non-payment of the 40% of the occupancy value. He, therefore, filed a suit for declaration and injunction. On coming to know, that the plot in question .had been allotted to respondent No. 2, the applicant amended the Plaint impleading the respondent No. 2 and prayed for the following reliefs:-

(a) Declaring that the plaintiff is the allottee of Plot No. A-141, in Block No L, situated in KDA's Expansion Scheme No. 2, North Nazimabad, Karachi, and the cancellation of the allotment by the defendant No. I and the subsequent re-allotment of the said plot of land to defendant No. 2, is illegal, ultra vires, arbitrary and inoperative;

(b) Mandatory injunction directing the defendant No. 1 to cancel the allotment made to the defendant No. 2, accept the 40% Occupancy Value from the plaintiff, deliver to the plaintiff the possession of the said Plot No. A-141, in Block L, North Nazimabad, and execute proper Lease Deed in favour of the plaintiff or in the alternative in case the said plot of land cannot be given to the plaintiff for any unsurmountable technicalities, any other plot of land, not being lesser in size and value, in North Nazimabad, Karachi, be given to the plaintiff on the same price, terms and conditions:

(c) Cost of the suit.

(d) Any other or further reliefs which this Hon'ble Court may deem fit and proper.

Respondent No. 1 in his written statement averred, that the plot had been rightly cancelled and also raised certain legal pleas. Respondent No. 2 claims to be in possession of the plot which was legally allotted to him. Trial Court dismissed the suit, holding that plot was rightly cancelled by respondent No. 1. The appeal filed by the applicant was dismissed by the impugned Judgment.

3. The real dispute between the parties appears to be, whether plot was rightly and legally cancelled by the respondent No. 1. The allotment of the plot to the applicant is not denied. The allotment order has been produced as Exh. A/3. Condition No. 5 of the application for allotment Exh. A/1 reads as under

"In the event of my failure to pay the said 40% of the cost of the occupancy rights within one month date of despatch of the notice sent to me by registered post at the address given below calling upon me to pay the same; the Trust would be at liberty to cancel the allotment made in my favour and to allot the said occupancy right in respect of the said plot to some other person of its choice and to forfeit to itself Rs. ( ) now being deposited by me as earnest money, and that I will have no claim V, refund the same.

The main contention of the applicant, is that according to this term of agreement, he was entitled to .30 days notice, but notice was issued to him on 27-2-1962, which was received by him on 14-3-1962, when the last date of payment was 15-3-1962, and under the then existing practice, the bank would not have accepted the amount after 15-3-1962. In alternate it is contended, that even if an acknowledgement receipt, that has been produced as Exh. B/1 is accepted to be correct fur the sake of argument, still it shows, receipt of the notice by somebody on behalf of the applicant on 28-2-1962, whereas the last date of payment was 15-2-1962 and therefore, the period allowed to him for deposit of the 40 of the occupancy value was only 17 days, which is in violation of the terms of the agreement.

4. Mr. Iqbal Kazi, learned counsel for respondent No. 2, however, argued, that under the agreement, only one demand notice was to be issued and the payment was to be made within 30 days of such notice. It is contended, that this notice was issued on 18-10-1961, the receipt of which is admitted by the applicant in his cross -examination, and the notice dated 27-3-1962 was only a reminder and not a fresh notice, and under this notice only the time for payment was extended to 15-4-1962. It may be pointed, that the cancellation order Exh. C/2 in fact shows, the cancellation because of non-payment of 40% for occupancy value in pursuance of notice dated 18-10-1961. However, it is contended by the applicant, who himself is a practising Advocate, that this notice dated 18-10-1961 has neither been produced by the respondent No. 1, nor has he specifically pleaded service of this notice, but in fact, in the written statement, stress has been made on the notice dated 27-3-1961 only and not on notice dated 18-10-1961, consequently, no such issue was framed, and therefore, no opportunity was given to him to show the reason for non-payment in pursuance of this notice or to show, that even this notice was not in accordance with the terms of agreement. It is further submitted by him, that even the two Courts below have not referred to this notice dated 18-10-1961, nor have they made it basis for their findings, that the plot was legally cancelled by the respondent No. 1. The learned trial Court and the learned Appellate Court, have believed the evidence of the respondent, that the notice was served upon the applicant on 28-3-1962, and disbelieved the contention of the-applicant, that it was served upon him on 14-4-1962.

5. It is further contended by the applicant, that this order of cancellation was not communicated to him, and that it was passed without giving him .an opportunity to be heard and therefore, it was against the principles of natural justice. In this respect he has drawn attention to this Court to para No. 18 of the application for allotment of Plot, Exh. A/1, which empowers respondent No. 1, that in case of non-payment of dues or Commission of any breach of any condition contained therein by the allottee, to cancel the allotment of the plot by notice in writing either immediately or on expiration of the period specified in the notice. It is contended by the applicant, that at the time of allotment the allotment regulation framed by KDA under Article 5 of KDA Ordinance 1957, had not come into force as they were published on August 27, 1965, and therefore, the terms and conditions of the allotment would be governed by the terms and conditions of this application for allotment. He further contended, that this allotment conferred upon him a right in rem, which could not be taken away by the respondent without given him opportunity to show cause as to why he failed to make payment in time. He has relied upon the case of Haji Noor Muhammad and others v. KDA (PLD 1957 Kar. 373). In this case the petitioner, who was allottee of the plot from the KDA, failed to raise construction within specified time, and therefore, the plot was cancelled by KDA for breach of terms of the allotment. The petitioner challenged the order in the High Court, and Division Bench of this Court held that allottee of a plot in scheme formulated KDA Ordinance, 1957, was not merely a licensee or sub-licensee, but held a right in rem in respect of plot allotted to him. The High Court declared the order of cancellation to be illegal as the petitioner had not been given an adequated reasonable opportunity to show cause against the cancellation of allotment.

6. It is further contended by the applicant, that in sale of immovable property, time is never considered as essence of a contract. In support he has relied upon number of cases. Mr. Iqbal Kazi, learned counsel for the respondent No. 2, however, contended, that in all these cases relied upon by the applicant, the possession of the property had been transferred to the purchaser, but in the instant case, the possession of the plot admittedly was not delivered to the applicant, and as such, he could not file suit for specific performance even, under section 27-A, which provided, that where the contract of lease of immovable property is made in writing, which has not been registered though required to be registered, and the lessee may sue for specific performance, in the part performance of the contract if he has taken possession, of the property. Reliance is placed on the case of [Shaikh Barkatullah and others vs. Khawaja Muhammad Ibrahim (P L D 1970 S C 483)]. In this case suit for Specific Performance of the contract of lease in respect of shop, was filed on the basis of agreement arrived at between the parties in a compromise decree. It was held by their Lordships, that the period of lease prescribed in the compromise deed being 10 years, the agreement required registration under section 17 of the Registration Act, and in absence of registration respondent could claim the specific performance only if he had entered into possession in pursuance to the agreement of lease and done himself act in part of performance thereof.

It is contended by the applicant, that the document, in question, is not lease-agreement but an agreement to execute a lease deed, and therefore, it does not require registration and the suit is maintainable even when the applicant was not to be in possession of the plot in question. The applicant has already relied upon the case of Noor Muhammad referred to above in which a Division Bench of this Court, held, that the right in rem was conferred upon the allottee by virtue of allotment order though he is declared as licensee or sub-licensee in the allotment order, meaning thereby, that by virtue of the allotment order certain rights are transferred /conferred upon the allottee in the immovable property. The learned Judges in the said case have referred to the case of [Abdul Bhai v. Muhammad Ahmed Deen (P L D 1971 SC 114)]. Wherein a criterion has been laid down by their Lordships for distinguishing between a lease and licence which is whether any right in immovable property itself i. e. a right in rem has passed to the person concerned. The learned Judges of the D. B. of this Court held, that by an allotment order a right in rem in respect of plot passed to the allottee.

In order to find out if there was any contract of lease of immovable property in writing signed .by the parties, two documents produced by the appellant have to be taken into consideration. One of the documents is Exh. A/1, and other is Exh. A/3. Admittedly, in pursuance of the offer made by the respondent No 1, the applicant moved the application, Exh. A/1, for the allotment of the plot which contained the terms and conditions of the allotment. This document is admittedly signed by the applicant. The heading of this document shows, it is an application for the allotment of occupancy right in the plot of land in Scheme No. 2. It shows, that the applicant applied for the purchase of occupancy right for 99 years in the plot under this agreement he agreed to the allotment of the plot on the terms and conditions therein. Under the terms and conditions of this agreement, the applicant paid 10% occupancy value alongwith the applicant. Under condition No. 5, which has already been produced above, he had to pay 40 of the occupancy value within one month from the date of notice under this agreement after payment of the said 40 of the occupancy value, he had right to enter into plot. Condition No. 13, which is also material, is reproduced as below:-

"On payment of the full occupancy value and all arrears of fees together with one year's rent advance in respect of the plot allotted to me I will be entitled to a lease of the same for a period of 99 years upon the terms arid conditions contained in the lease draft of which I have examined and signed in token of my acceptance of the same. The stamp duty and registration charges in respect of the lease will be paid by me."

Under the condition No. 14, till the execution of lease the applicant agreed, that he had no right or legal interest on the plot except that of licence. In spite of this condition, it has been held by this Court in the case mentioned above, that the allottee, viz the applicant, acquired the right in rem in the plot as a lessee. It is clear from the condition No. 13, that even lease deed had teen signed by the applicant but only it was to be registered after payment of the full occupancy value. The terms and conditions of the lease had also been settled by the parties which according to the aforesaid decision in case of Noor Muhammad would be same as contained in the application for allotment. Document Exh. A/3 is allotment order, which is addressed to the applicant informing him, that the respondent No. 1 had allotted him the plot in dispute. He, however, was informed, that on payment of occupancy value, he would be handed the possession of the plot to enable him to build thereupon. It is signed by the Administrative Officer of respondent No. 1. If both the documents are read together there is no doubt, that there was contract of lease of immovable property for 99 years between the p4-ties, which contract was to be registered or, payment of balance of occupancy value by the applicant. It may be pointed, that it is not necessary that both lessor and lessee should have signed on the same sheet of paper. In AIR 1952 Nagpur 115, it is held, "that where contract to lease is signed by the transferor, and its counterpart is signed by the transferee and both form part of the same transaction, the first condition requisite to be proved under section 72-A, namely, that the contract to lease should have been in writing signed by the parties, thereto, is fulfilled". Applying the principles laid down in this case, it will be seen, that the two documents Exhs. A/1 and A/3 constituted contract in writing signed by both the parties. In pursuance of offer of respondent No. 1, the applicant agreed to the terms and conditions of the allotment whereupon the respondent No. 1 allotted the plot in question to the applicant. The applicant, therefore, can file suit of specific performance contract only if he had obtained possession of the land in part of performance of contract. Admittedly, the applicant did not get possession of the land and as A such as - held by their Lordships of Supreme Court in the abovementioned case, he cannot sue for specific performance in this, Court. The prayer contained in clause "B" of the plaint, therefore, cannot be granted to the applicant.

7. The question now arises as to whether the applicant can be granted Declaration as to his title to the property or his legal character, when decree for specific performance of contract cannot be granted to him. The declaratory relief is a discretionary relief which the Court may or may not grant in exercise of its discretion. In the instant case, both the Courts below have exercised discretion by refusing the grant of relief of declaration. However, the discretion is to be exercised by the Court judiciously. As pointed above, they have declined to exercise the discretion on the wrong assumption that the allotment order in favour of applicant was rightly and legally cancelled. It is argued, that mere declaration without decree of specific performance would be an exercise in futility and the Court should not grant ineffective decree. In this context, I may again refer to the case of Noor Muhammad, wherein it is held by this Court, that allotment of plot by KDA was not a case of simple agreement, but it was a case of performance of statutory obligation and functions. Though this. Court may not enforce the contractual obligation against the respondent No. 1, but at the same time there are statutory obligations enjoined upon the respondent No. 1, which he is expected to discharge in accordance with rules and regulations.

8. The applicant, in fact, has sought three reliefs. His first relief is, that order of the cancellation of his allotment order may be declared as null and void and his second relief is, that the allotment order issued in favour of the respondent No. 2, may be declared null and void, and his third prayer is, that the respondent No: 1 may be asked to accept lease money and execute the lease deed. Thus, in fact, the third relief claimed by the applicant was for specific performance of the contract, which under circumstances of the case he is not entitled to claim. With respect to first claim, I have already held, that order was passed by respondent No. 1, cancelling the plot of the applicant without giving him any opportunity to show-cause against the cancellation of his plot. Such an order, unless passed under the law, which specifically dispenses with the service of such notice, has always been considered by the superior courts to be against the principles of natural justice, and therefore, void. In the instant case, even under pare 18 of the application of the allotment, which lays down the terms and conditions of the contract between the parties, the respondent had to serve notice upon the applicant before cancellation, which has not been done in this case. As such the order of cancellation is not legally sustainable. The learned Courts below have misread the evidence and misinterpreted the law while coming to the findings, that the plot was legally cancelled.

However, with respect to the second relief for declaration, that allotment of plot issued in favour of respondent No. 2 is void it is argued by Mr. Iqbal Kazi, learned counsel for respondent No. 2, that the respondent No. 2 is purchaser for consideration, who had no knowledge of any previous agreement or contract between the applicant, and respondent No. 1. He has drawn attention of this court to the fact, that even prior to the allotment of the plot in favour of the applicant, the plot had been allotted to a lady, whose allotment order was cancelled without notice to her, and the plot was allotted to the applicant. He argues, that if the allotment of plot of applicant is considered valid, allotment to the respondent No. 2, which is also made under the similar circumstances should also be considered a valid allotment.

9. Be it as may, the fact remains, that the applicant had filed this suit on 14-7-1967. The allotment order Exh. B/3, was issued in favour of the respondent No. 2, on 5-8-1967. As such under section D 52 of Transfer of Property Act, this allotment would not affect the

rights of the applicant and is not binding against him.

10. The result of the above discussion is that the revision application of the applicant is partly allowed and the Judgment and decree of the lower Courts are set aside to the extent, that the suit of the applicant for declaration that the cancellation of the allotment order in favour of the applicant, and subsequent allotment to respondent No. 2 are illegal and inoperative is decreed. The Judgment and decree of Courts below dismissing his suit for mandatory injunction directing the respondent No. 1 to accept the occupancy value and give up the possession of the plot of the applicant, is maintained. As already pointed the respondent No. 1 is expected to discharge his statutory duties in accordance with law. However, the respondent No. 1 is at liberty to decide afresh if he so desires, after giving show-cause notice to the applicant, as to whether the applicant has committed any breach of any terms of the contract.

The Revision Application was partly allowed to the above extent by a short order dated 26-5-1987. The above are the reasons in support of the said order.

H . B . T . / M-292/ K Revision partly allowed.

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