Gul Rashid etc vs Israr Khan etc

IN THE PESHAWAR HIGH COURT,

BANNU BENCH.

CR No.98-B of 2011.

JUDGMENT

Date of hearing 12.11.2015 .

Appellant-Petitioner: By Rustam Khan Kundi, Advocate.

Respondent: By Sardar Naeem, Advocate.

IKRAMULLAH KHAN, J.--- I propose to dispose of both the Revision Petitions by my this single consolidated judgment as both Revision Petitions are arising out of the same consolidated impugned judgment dated 02.5.2011 rendered by learned Additional District Judge-I Bannu, whereby on acceptance of appeals # 87/13 and 88/13 filed by the respondents were accepted and both the impugned judgments of learned Civil Judge-I Bannu dated 20.12.2010 were set-aside and suit # 274/1 of 2008 filed by petitioners was dismissed while suit # 232/1 of 2010 was decreed accordingly.

2.In essence, two suits were instituted one by petitioners, for specific performance of agreement dated 20.02.2007 in regard to the suit house, fully described in the head-note of the plaint and another by respondents, for redemption of the same disputed house. Both the suits were contested by respective adverse parties, through submitting their respective written statements. Learned trial court, thereafter, framing the required issues in every suit, arising out of pleadings of parties, entered upon, to record evidence of parties, in both the suits and at the conclusion of trial, the suit filed by petitioners was decreed while one filed by respondents was dismissed. Respondents filed separate appeals, against both the impugned judgments dated 20.12.2010 in the court of learned District Judge, Bannu. Both the appeals, were sent to learned Additional District Judge-I Bannu for disposal, who thereafter, affording hearing to both the parties, accepted both the appeals, thereafter, consolidation of those, through the same impugned judgment, hence, these revisions.

3.Learned counsel for petitioners, contended that the impugned judgment is against law and facts on record; that the learned appellate court below has not properly appreciated not only the evidence on record but also the law; that respondents had failed to pay the balance amount of sale consideration of Rs.136000/- within the stipulated time mentioned in the agreement to sell, and consequently the agreement to sell dated 20.02.2007 had converted into deed of mortgage, for mortgage money amounted to Rs.1,30,000/- but learned appellate court has not appreciate this aspect of the case, fell in error of mis-reading and non-reading of not only evidence but also the law.

4.On the other hand, learned counsel for

respondents supported the impugned judgment and argued, that the impugned judgment has been rendered by learned appellate court below, thereafter, proper appreciation of law and appraisal of evidence on record, could not be interfered with by this court, as learned appellate court has not committed any

illegality or irregularity, in dispensation of the impugned judgments.

5.I have heard learned counsel for parties and gone through the record.

6.The record reveals that, petitioners had sold out the suit house, on receiving part of sale consideration and part was promised to be paid by the respondents within a period of one year, to be reckoned therefrom 22.02.2007. The possession had been delivered to respondents. However, it had been argued by both parties that till realization of out-standing amount, respondent had to pay Rs.500/- per month as rent. It is also stipulated therein the agreement to sell dated 22.02.2007 that on account of default, of the balance sale consideration, within the prescribed period of one year, the agreement to sell would be treated as a mortgage deed, in regard to the suit house, for consideration of Rs.1,30,000/-.

7.The crucial and the sole, point herein, to be resolved by my this judgment would be that whether time

would be essence of contract, in contract relating to immovable property.

8.The pertinent judgment in this regard, produced by learned counsel for respondents is reproduced here-in-under rendered by the apex court in "Seth Essabhoy Versus Saboor Ahmad" (PLD 1972 SC 39), relevant Para is reads as:- "It is a well settled principle of law that

in contracts relating to immovable

property, time is not of the essence of

the contract, and the claim of the

appellant, even if it were accepted that

he had given three days’ notice to the

respondent for completion of the

contract, failing which it would come to

an end, can not at all be considered to

be reasonable time."

9.However, in case in hand, there was no such stipulation, that prior notice would be given to the purported defaulter, but even then the petitioners were required to give notice to the respondents, for payment of the balance sale consideration. The petitioners had neither given, any notice in

this regard nor ever, had demanded, the agreed rent of Rs.500/-.

Petitioners were in active confidence of respondents, being maternal uncles of respondents.

10.In "Kaniz Fatima and another Versus

Sh.Muhammad Sohail and 7 others" (2003 CLC 923) the honourable Lahore High Court has held as:- "Time ordinarily in such transaction

not considered as being the essence of

the contract. Mere mention of time in

contract for its performance would not

mean that time was of the essence of the

contract."

11.In another judgment of the Hon’ble Lahore High Court in "Anjuman-e-Islamia, Sialkot Versus Haji Muhammad Younas & 3 others" (PLD 1997 Lahore 153) it is held that time specified in deed contract of sale of immovable property is not of essence of contract between parties.

12.The provisions contained in Section-55 of the Contract Act 1872, clarifies such ambiguity, if occurred in a

contract, where time was essence to the contract, which read as:-

Section-55.Effect of failure to perform at fixed time in contract in which time is essential.—When a party to a contract promises to do a certain thing at or before a specified time or certain things at or before specified times, and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable, at the option of the promisee, if the intention of the parties was that time should be of the essence of the contract.

Effect of such failure when time is not essential.—If it was not the intention of the parties that time should be of the essence of the contract, the contract does not become voidable by the failure to do such thing at or before the specified time; but the promisee is entitled to compensation from the

promisor for any loss occasioned to him

by such failure.

Effect of acceptance of performance at

time other than that agreed upon.—If,

in case of a contract voidable on

account of the promisor’s failure to

perform his promise at the time agreed,

the promisee accepts performance of

such promise at any time other than

that agreed, the promisee can not claim

compensation for any loss occasioned

by the non-performance of the promise

at the time agreed, unless, at the time of such acceptance, he gives notice to the

promisor of his intention to do so."

13.It is settled principle of law that in the contracts relating to immovable property, time is not generally the essence of the contract in the failure to perform a-part of the contract by the date fixed in the agreement to sell.

14.No doubt, where time was fixed in agreement for its performance and any penalty clause was envisaged therein,

the time would be considered as its essence, unless the same is extended by active conduct or acquiescence.

15- In case in hand, as stated herein before in this judgment, parties are close relative and the conduct of petitioners give a strong inference, that the time had been extended other-wise, petitioners had to demand not only the balance amount, but also, the rent of Rs.500/-per month.

16- Section.53-A of the Transfer of Property Act 1882 which is later in time than the Contract Act 1872, which reads as:-

"53-A Part performance.—where any

person contracts to transfer for

consideration any immovable property

by writing signed by him or on his

behalf from which the terms necessary

to constitute the transfer can be

ascertained with reasonable certainty,

and the transferee, has, in part

performance of the contract, taken

possession of the property or any part

thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has doe some act in furtherance of the contract,

and the transferee, has,

performed or is willing to perform his part of the contract, then, notwithstanding that the contract, though required to be registered, has not been registered, or, where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefore, by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a

right expressly provided by the terms

of the contract;

Provided that nothing in this

section shall affect the rights of a

transferee for consideration who has no

notice of the contract or of the part of

performance thereof.

17- The fourth paragraph, of Section.53-A has placed, explicit bar, on such person, who had entered into agreement of sale, with the vendee, to whom, the possession had delivered, to enforce any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract.

18- Provision of the above mentioned section of Transfer Of Property Act 1882, protects the possession of transferee over property subject to fulfillment of the condition, firstly, existence of agreement of transfer and secondly transferee put in possession of the said property in part performance of the agreement.

19- All the contracts, in regard to immovable property shall subject to the law of Transfer Of Immovable Property, 1882 being later in promulgation than the Contract Act 1872, and as such, time could not be considered an essence to contract in regard to immovable property. The other stipulation, that on occasion of default of payment of the balance amount, the contract be converted into a mortgage in regard to the suit property, become redundant when time is not essence of contract in peculiar facts and feature of case in hand. Therefore, Revision Petition # 99-B/2011 is dismissed accordingly, however, Revision Petition # 98-B/2011 keeping in view the aforestated principle of law is partially accepted and the impugned judgment is modified to the extent that respondent shall deposit in trial court, not only the out-standing amount of Rs.1,36,000/- but also the total rent due to, at the rate of Rs.500/-per month, therefrom, 20.5.2007 and till 20.01.2016, which would be the target/last date for to deposit the above mentioned amount. In case the respondents failed to deposit before or on 20.01.2016, the above mentioned amount in case

of default, their suit would be deemed to be dismissed and the suit filed for redemption of mortgage shall be deemed to be decreed on depositing the amount of consideration of mortgage less the rent at the rate of Rs.500/-per month due to respondents since 20.5.2007.

Announced

12.11.201 JUDGE

*Imran steno*