Judgment Sheet

 

IN THE HIGH COURT OF SINDH KARACHI

 

High Court Appeal No. 147 of 2009

 

   Present

                                                                           Mr. Justice Nadeem Akhtar

                                                                           Mr. Justice Muhammad Iqbal Kalhoro

 

 

Appellants                 :  M/S Tee Jays Exclusive (Pvt.) Limited and Tanveer

   Jamshed, through Mirza Sarfaraz Ahmed Advocate.

 

Respondent              :  Muhammad Naveed,

   through Mr. H. A. Rahmani Advocate.

 

Dates of hearing      :  20.10.2014, 06.11.2014, 20.11.2014 and 26.11.2014.

 

J U D G M E N T

 

NADEEM AKHTAR, J. – This appeal was filed on 15.05.2009 by the appellants only against that part of the judgment and decree dated 13.04.2009 passed by a learned Single Judge of this Court in the respondent’s Suit No.1038/2004, whereby while dismissing the said Suit for specific performance filed by the respondent and allowing appellant No.1 to forfeit the advance money of Rs.500,000.00 paid by the respondent, appellant No.1 was directed to return to the respondent / plaintiff the remaining amount of Rs.9,500,000.00 paid by him within forty five (45) days, and it was further ordered that in case appellant No.1 fails to make such payment within the stipulated period, the executing Court shall effect its recovery from the sale of the property in question. Upon service of notice, the respondent, instead of filing separate appeal, filed cross-objections in this appeal by paying the requisite court fee thereon. On 07.05.2014, the appellants filed an application bearing CMA No.1236/2014 praying that they may be allowed to withdraw this appeal. On 16.10.2014 and 29.10.2014, learned counsel for the respondent made a statement that he has no objection if the appeal is allowed to be withdrawn provided protection to the respondent is granted as prayed by him in his cross-objections, and the cross-objections filed by him in this appeal against the impugned judgment and decree are heard and decided on merits. On 16.10.2014, learned counsel for the appellants made a statement that the appellants had no intention of disposing of the suit property till the final decision of the respondent’s cross-objections. In view of the above, the above application was allowed and the instant appeal was dismissed as withdrawn vide order dated 29.10.2014. Accordingly, this judgment shall decide and dispose of the cross-objections filed in this appeal by the respondent.

 

2.         The relevant facts of the case are that the respondent filed Suit No.1038 of 2004 on 14.09.2004 against the present appellants for specific performance and injunction. The case of the respondent / plaintiff was that the appellant No.1-company agreed to sell its Plot No.2/232-B, PECHS, Karachi, measuring 1,000 sq. yds. (‘the suit property’) to him for a total sale consideration of Rs.31,500,000.00 ; an amount of Rs.500,000.00 was paid by him to appellant No.1 on 31.03.2004 as advance / token money ; the parties executed an agreement to sell dated 07.04.2004 (‘the agreement’), and he made further part payments of Rs.4,500,000.00 and Rs.5,000,000.00 to appellant No.1 on 07.04.2004 and 08.06.2004, respectively ; the balance sale consideration was to be paid by him at the time of execution and registration of the sale deed in his favour and delivery of vacant, peaceful and physical possession of the suit property to him ; the suit property was represented and agreed to be sold to him by appellant No.1 as a commercial plot of land ; at the time of execution of the agreement, the appellants had assured him that the suit property had been duly commercialized and the only formality left in this behalf was the final payment of dues and the entry of the same in the relevant records of the Ministry of Works, Government of Pakistan ; he kept on requesting the appellants to provide him copies of the relevant documents confirming commercialization of the suit property and clearance of all dues in this behalf, however, the same were not provided to him ; due to such failure on the part of the appellants, the sale could not be completed within the date stipulated in the agreement although he requested the appellants on many occasions to complete the sale ; he was shocked to receive a legal notice dated 06.09.2004 from appellant No.1, which stated that appellant No.1 had cancelled the agreement and had forfeited the entire amount of Rs.10,000,000.00 paid by him ; an amount of Rs.5,000,000.00 was also claimed by appellant No.1 from him towards damages ; this legal notice was immediately responded to by him by denying and contesting the false allegations made by appellant No.1, and also by demanding completion of the sale in his favour ; and, he was always ready and willing to perform his agreed part of the contract, but the appellants committed deliberate and willful breach of the agreement. In the above background, the respondent filed the Suit with the following prayer :

 

i.        For specific performance of the agreement to sell dated 07.04.2004 by the transfer of the Suit Property to the Plaintiff from the Defendant No.1 and the completion of the transaction thereby contemplated, including, but not limited, the execution and registration of the sale deed in this regard between the parties and the completion of all other formalities in regard thereto, including but not limited to, the handing over of vacant peaceful physical possession of the Suit Property to the Plaintiff ;

 

 ii.        For a direction that should the Defendants or either of them fail or refuse to specifically perform the aforesaid Agreement in respect of the Suit Property, then the sale deed be executed by the Nazir of this Hon’ble Court and the Nazir be directed and authorized to complete all formalities with regard to the completion of the transaction, including but not limited to, the registration of the sale deed by and with the concerned sub-Registrar, Karachi and the handing over of vacant peaceful physical possession of the Suit Property to the Plaintiff ;

 

 iii.       For a direction that should any amount(s) by way of any charges, dues or any claims whatsoever (including, but not limited to, commercialization charges) be found due and payable, then the same should be paid forthwith by the Defendants, either by way of deduction from the balance sale consideration or otherwise ;

 

 iv.       Permanently restrain the Defendants or any person acting under, for or on their behalf from selling, alienating in any manner or creating third party interest in respect of the Suit Property or acting in any manner whatsoever which may be prejudicial to the rights and interests of the Plaintiff in respect thereof ;

 

 v.        Without prejudice to the fore-going and in the alternative for payment as damages/compensation of the sum of Rs.1,00,00,000 along with mark-up thereon at a rate of 15% till date of actual payment ;

 

 vi.       For such further and/or other relief as this Hon’ble Court may deem just and equitable in the circumstances of the case ;

 

 vii.      For costs of the suit.

 

3.         In their written statement, the appellants mainly emphasized that time was of the essence of the contract and since the sale consideration was not paid by the respondent within the stipulated period, the agreement stood repudiated and the amount paid by him stood forfeited. In view of the pleadings of the parties, the following consent issues proposed by them were adopted by the learned trial Court :

 

            1.       Whether suit is barred under Section 21 of Specific Relief Act ?

 

 2.       Whether the Plaintiff committed breach of the terms of the Agreement to sell dated 07.04.2004, if so its effect ?

 

 3.       Whether the subject plot of land has been duly commercialized, if not, its effect on the performance by the Plaintiff of the terms of the said agreement ?

 

 4.       Whether the sale agreement is still in operation or it has become a dead letter ?

 

 5.       Whether the purported cancellation of the said agreement by the defendants is legal and valid ?

 

 6.       What should the decree be ?

 

4.         The respondent / plaintiff examined himself and three more witnesses, and on behalf of the appellants, appellant No.2, who is the Managing Director of appellant No.1, was examined. Both the parties produced several documents in support of their respective cases. After hearing the learned counsel for the parties, it was held inter alia by the learned Single Judge that the suit property had been commercialized by Karachi Building Control Authority (‘KBCA’) ; the fact that it would have gained complete commercial status when it is also commercialized by the Ministry of Works, Government of Pakistan (‘the Ministry’), was a different matter ; the respondent had failed in establishing that appellant No.1 was contractually obligated to get it commercialized from the Ministry ; insistence of the respondent that appellant No.1 was required to complete its commercialization from the Ministry, was without any contractual or lawful excuse as there was no such stipulation in the agreement ; all this goes to show that it was the respondent who avoided the completion of the transaction without any just cause and therefore proved that at all material times he was not ready and willing to perform his part of the contract ; and, hence the respondent was not entitled to the relief of specific performance. In view of the above findings, the Suit filed by the respondent was dismissed by the learned Single Judge, and appellant No.1 was allowed to forfeit the advance money of Rs.500,000.00 paid by the respondent, but was directed to return to him the remaining amount of Rs.9,500,000.00 paid by him within forty five (45) days, and it was further ordered that in case appellant No.1 fails to make such payment within the stipulated period, the executing Court shall effect its recovery from the sale of the suit property.

 

5.         Mr. H. A. Rahmani, learned counsel for the respondent, contended that the suit property was originally a residential property as the 99 years’ lease (Exh. D/2) in respect thereof was executed specifically for such purpose ; the procedure prescribed for its conversion from residential to commercial was governed at the relevant time by Karachi Building & Town Planning Regulations of 1979 (‘the 1979 Regulations’) ; Clause (e) of Regulation No.4 of Schedule-D of Part-II of the 1979 Regulations provides that the applicant shall pay charges to MP&EC and the concerned authority, and Clause (f) of the said Regulation No.4 provides that final NOC shall be issued by the concerned authority after approval of MP&EC ; under Schedule-A of the 1979 Regulations, the Ministry has been described as concerned authority for the area of housing scheme including the suit property ; for changing the status of the suit property from residential to commercial, the appellants were required to obtain express consent in writing from the lessor as expressly provided in Clause 7 of the lease deed of the suit property ; and, the appellants had relied upon only letters dated 19.12.1987 (Exh. D/5) and 08.12.1994 (Exh. D/9) issued by KBCA giving NOC for commercialization only from planning point of view, which NOC was subject to the approval by the Ministry. He submitted that the entire burden to prove that the suit property had been legally and fully commercialized within the agreed period was squarely on the appellants, but they miserably failed in discharging such burden as they failed in producing any evidence to show that the above mandatory conditions were fulfilled by them. He pointed out that it was an admitted position on the record that the appellants did not pay charges to the concerned authority as required under Clause (e) of Regulation No.4 nor did they obtain the final NOC from the concerned authority as required under Clause (f) of Regulation No.4, and they also did not obtain the express written consent from the lessor under Clause 7 of the lease deed.

 

6.         Learned counsel for the respondent further submitted that it was not stated by the appellants anywhere in their written statement that the charges payable to the Ministry were not their responsibility or the same were payable by the respondent under the agreement or otherwise. He pointed out that the specific averment made by the respondent in paragraph 3 of his plaint regarding the assurance given by appellant No.2 in this behalf, was not specifically denied in their written statement by the appellants, and as such the said assertion made by the respondent stood proved under Order VIII Rule 5 CPC. He argued that in addition to the above, the oral agreement pleaded by the respondent in paragraph 3 of the plaint that in view of the representation and assurance by the appellants that the final payment of the dues of the Ministry would be made by them, the respondent entered into the agreement with them and made payments to them, was admissible in evidence under Article 103 of the Qanoon-e-Shahadat Order, 1984, as the agreement was silent in this behalf after cancellation of Clauses 6 and 7, and such oral agreement pleaded by the respondent was not inconsistent with the terms and conditions of the agreement. In support of this submission, he relied upon Umar Bakhsh and 2 others V/S Azim Khan and 12 others, 1993 SCMR 374. He also pointed out that appellant No.2 had admitted in his evidence that charges were under payment, which clearly meant that such payment by him was underway. He argued that it was never agreed by the parties that the above statutory liability of the appellants will be discharged by or shifted to the respondent nor was there any material on record in this behalf. He contended that such attempt made by the appellants at the time of execution of the agreement was strongly objected to and resisted by the respondent whereafter Clauses 6 and 7 of the agreement were cancelled by mutual consent, and the evidence produced by the respondent in this context remained unshaken. It was submitted by him that all such statements made on behalf of the appellants in their evidence which were not pleaded by them in their written statement, including the statement that said charges were payable by the respondent, were inadmissible and could not be relied upon as the same were beyond the scope of their written statement. He placed reliance on Mushtaq Ahmed and others V/S Muhammad Saeed and others, 2004 SCMR 530, in support of this submission.

 

7.         Mr. Rahmani further submitted that due to the above contractual and statutory failure on the part of the appellants, the suit property could not be commercialized within the period stipulated in the agreement and as such the appellants were incompetent and unable to convey the same to the respondent as a commercial property as was specifically agreed by the parties. He also submitted that the alleged commercialization of the suit property by KBCA, as claimed by the appellants, was misconceived as KBCA had no jurisdiction in this behalf and only the concerned authority, that is, Government of Pakistan was/is the competent authority to convert the status of the suit property from residential to commercial. In this context, he referred to Muhammad Islam and 5 others V/S Messrs Real Builders through Shaikh Muhammad Sadiq and others, PLD 2011 Karachi 204. He also submitted that the appellants had no right to cancel the agreement or to forfeit the payments made by the respondent, or to issue any notice in this behalf ; firstly, as they themselves were not in a position to perform their reciprocal promise by conveying the suit property to the respondent as a commercial property ; and secondly, as both the parties were prohibited from cancelling the agreement by virtue of Clause 14 thereof whereby it was specifically agreed that the agreement was irrevocable and in case of default by any party remedy of specific performance was specifically provided therein. He further submitted that in any event the agreement could not be cancelled on the ground that the respondent did not pay the balance amount within the agreed period as it is well-settled that time cannot be deemed to be of the essence of contract merely because a date was fixed therein as held by the Hon’ble Supreme Court in Muhammad Yaqoob and others V/S Hakim Ali and others, 2004 SCMR 584. Without prejudice to his above submissions, he submitted that under Section 61 of the Contract Act, 1872, the respondent was not obliged to pay the balance amount to the appellants as they were not ready to perform their reciprocal promise of conveying the suit property to him as a commercial property within the time stipulated in the agreement. In support of this submission, he relied upon the cases of Sajid Muhammad V/S Abdur Rehman, 1996 MLD 60 and Muhammad Hussain and another V/S Federation of Pakistan through Secretary, Law Justice and another, 2003 YLR 2793.

 

8.         Mirza Sarfaraz Ahmed, learned counsel for the appellants, at the very outset raised a preliminary objection regarding the maintainability of the cross-objections filed by the respondent. According to him, the entire judgment and decree cannot be looked into by this Court as this appeal was filed by the appellants only against the direction given to them by the learned Single Judge to return the amount of Rs.9,500,000.00 to the respondent. While conceding that the appellate Court possesses all powers under Rule 33 of Order XLI CPC, he submitted that such powers cannot be exercised by the appellate Court while hearing cross-objections under Rule 22 of Order XLI CPC. He contended that since the respondent admittedly did not file any appeal against the dismissal of his Suit for specific performance and injunction, he cannot claim such relief by filing cross-objections in this appeal which has now been dismissed as withdrawn on the application filed by the appellants. He further contended that the respondent can only support the decree, but cannot oppose the same. In support of this preliminary objection, he relied upon Sargodha Central Co-operative Bank Ltd. and another V/S New Hampshire Insurance Co., PLD 1982 Karachi 627, and Muhammad Tabish Naeem Khan V/S Additional District Judge, Lahore and others, 2014 SCMR 1365.

 

9.         Without prejudice and in addition to his above preliminary objection, learned counsel for the appellants contended that admittedly the agreement was the only document that governed the rights and obligations of the parties ; under the agreement, the appellants were obliged to (i) execute registered sale deed in respect of the suit property in favour of the respondent, (ii) deliver the vacant and peaceful possession of the suit property to the respondent latest by 08.08.2004 after receiving from him Rs.21,500,000.00 being the balance amount of the agreed sale consideration, and (iii) clear all the outstanding dues of the suit property pertaining to the utility agencies, Excise and Taxation Department and PECH Society ; in consideration of the above, the respondent was obliged to pay the above mentioned balance sale consideration to the appellants latest by 08.08.2004 ; vide Clause 2 of the agreement, it was agreed that if appellant No.1 failed in performing its part of the contract, the respondent will be entitled to double the amount paid by him ; Clause 3 of the agreement specifically provided that if the respondent failed in performing his part of the contract and did not pay the balance sale consideration within the stipulated time, appellant No.1 will be entitled to forfeit the advance money paid by him ; under Clause 5 of the agreement, time was of the essence for the contract as the parties had agreed to finalize the sale in all respects on or before the said date ; despite the above stipulations, the respondent failed in paying the balance sale consideration within the stipulated time ; and, in view of such failure and breach on the part of the respondent, the appellants were entitled and fully justified in canceling the agreement and forfeiting the amount paid by him. After referring to the agreement and its above mentioned clauses, he referred to Articles 102 and 103 of Qanoon-e-Shahadat Order, 1984, to substantiate his submission that documentary evidence excludes the oral evidence, and in support of this submission, he relied upon Mst. Baswar Sultan V/S Mst. Adeeba Alvi, 2002 SCMR 326, Karam Din through L.Rs and others V/S Muhammad Idrees, 2010 CLC 246, Bolan Beverages (Pvt.) Limited V/S PEPSICO Inc. and others, PLD 2004 S.C. 860, and Mst. Safia V/S Mst. Bibi and 14 others, 2005 MLD 646.

 

10.       Learned counsel for the appellants further contended that it was never agreed by the parties that NOC from the Ministry will be obtained by the appellants or charges for commercialization will be paid by them to the Ministry, nor did the appellants give any such assurance to the respondent, and there was no oral agreement in this behalf between the parties. He submitted that this plea of shifting such responsibility to the appellants was taken by the respondent for the first time in his Suit only in order to make out a case for specific performance ; however, the respondent did not produce any evidence to prove that any such assurance was given by appellants or he made any requests or demands in this behalf to the appellants from the date when the deal was struck till the date when the sale was to be completed. He further submitted that the admitted deletion of Clauses 6 and 7 of the agreement and substitution of Clause 13 thereof, clearly show that it was the responsibility of the respondent to obtain NOC from the Ministry and to pay commercialization charges to the Ministry, and it was due to this particular reason that such responsibility was not assigned in the agreement to appellant No.1. It was contended by him that the respondent entered into the agreement to purchase the suit property on as-is-where-is basis with his own free will and after having been fully satisfied with the title and status thereof. It was urged that the appellants successfully performed their agreed part of the contract by paying the requisite charges for commercialization to KBCA and PECHS, and by getting the suit property commercialized from the said authorities, but the respondent did not perform his agreed part of the contract as he admittedly did not pay the balance sale consideration within the time stipulated in the agreement and as such he was/is not entitled to the discretionary relief of specific performance. In this context, he placed reliance upon Anwar Sajid V/S Abdul Rashid Khan and another, 2011 SCMR 958, Sirbaland V/S Allah Loke and others, 1996 SCMR 575, and Muzaffar Javed V/S Haji Noor Bakhsh and others, 2002 MLD 1474.

 

11.       Regarding not cross-examining the respondent in relation to the contents of paragraphs 3, 4, 7, 8 and 12 of his affidavit-in-evidence, Mirza Sarfaraz Ahmed submitted that the appellants were not required to do so as the contents of the above paragraphs were beyond the pleadings of the respondent ; and such failure on the part of the appellants cannot be deemed to be an admission on their part. In support of this submission, he relied upon Abdul Rehman and another V/S Zia-ul-Haque Makhdoom and others, 2012 SCMR 954, Asmatullah V/S Allah Nawaz and others,  2007 MLD 1329, Rab Nawaz and 13 others V/S Mustaqeem Khan and 14 others, 1999 SCMR 1362, Fazal-ur-Rehman V/S Ahmed Saeed Mughal and others, 2004 SCMR 436, and Abdul Aziz and another V/S Abdul Rehman and others, 1994 SCMR 111.

 

12.       Exercising his right of rebuttal, Mr. H. A. Rahmani submitted on behalf of the respondent that Rule 22 of Order XLI CPC provides two remedies to the aggrieved party, that is, either to file an appeal against the judgment and decree, or to wait for the other side to file an appeal and then to file cross-objections therein within thirty (30) days ; if the cross-objections are within time and once the same are entertained, they acquire independent status of an appeal and are to be heard as an appeal ; and, Sub-Rule (4) of Rule 22 ibid clearly supports the above view. In support of this submission he relied upon Muhammad Nawaz V/S Mst. Ahmad Bibi and 3 others, 1995 SCMR 266. Regarding Article 103 of Qanoon-e-Shahadat Order, 1984, he submitted that proviso No.2 thereto is an exception because proviso is always an exception to the general rule ; the said proviso does not completely exclude admissibility of oral agreement in the presence of a written one ; the respondent was required to fulfill only two conditions by establishing that (i) the agreement was silent with regard to the oral agreement, and (ii) the oral agreement was not inconsistent with the written agreement ; the respondent successfully discharged his burden in proving the oral agreement regarding assurance by the appellants to get the suit property commercialized, and the respondent’s evidence in this behalf remained un-rebutted ; and, under Rule 5 of Order VIII CPC, specific denial by the appellants was necessary, which was completely absent, and the absence of specific denial amounts to admission on their part. Regarding the assertion that the respondent had agreed to purchase the suit property on as-is-where-is basis, he submitted that such fundamental point of fact ought to have been pleaded by the appellants in their written statement, and since it was not raised therein, the same cannot be agitated by them at this stage. He placed reliance upon Mushtaq Ahmed (supra) in support of this submission.

 

13.       We have heard the learned counsel for the parties at length and with their valuable assistance have also examined the material available on record as well as the law cited by them at the bar. Since the maintainability of the cross-objections filed by the respondent has been questioned by the appellants, we would like to decide the said objection first. The relevant provision for this purpose is Rule 22 of Order XLI CPC, which reads as under :

 

22.    Upon hearing, respondent may object to decree as if he had preferred separate appeal. –

 

(1)  Any respondent, though he may not have appealed from any part of the decree, may not only support the decree on any of the grounds decided against him in the Court below, but take any cross-objection to the decree which he could have taken by way of appeal, provided he has filed such objection in the Appellate Court within one month from the date of service on him or his pleader of notice of the day fixed for hearing the appeal, or within such further time as the Appellate Court may see fit to allow.

 

Form of objection and provisions applicable thereto. –

 

(2)  Such cross-objection shall be in the form of a memorandum, and the provisions of rule 1, so far as they relate to the form and contents of the memorandum of appeal, shall apply thereto.

 

(3)  ………………………………

 

(4)  Where, in any case in which any respondent has under this rule filed a memorandum of objection, the original appeal is withdrawn or is dismissed for default, the objection so filed may nevertheless be heard and determined after such notice to the other parties as the Court thinks fit.

 

(5)  ……………………………….

 

14.       A plain reading of Sub-Rules (1) and (2) of Rule 22 ibid shows that any party aggrieved from any judgment or decree, or from any part thereof, has a remedy to prefer appeal against the same straightaway or wait till the other party approaches the appellate Court in which case he will have a right to defend the decree on any ground or file cross-objection within thirty (30) days from the service of notice of appeal upon him. It also shows that the cross-objection filed by a respondent under this Rule will have the force of an appeal though he may not have appealed from any part of the decree. This view is fortified by Muhammad Nawaz (supra) relied upon by the learned counsel for the respondent, and also by Suba and others V/S Abdul Aziz and others, 2008 SCMR 332. Sub-Rule (4) of Rule 22 ibid, which specifically deals with a situation where a respondent has filed memorandum of objections under Rule 22 ibid and the original appeal is withdrawn or is dismissed for default, provides that such objections filed by the respondent may be heard and determined by the appellate Court after notice to the other party despite the withdrawal or dismissal of the original appeal, as the case may be. In the instant appeal, the cross-objections were admittedly filed by the respondent within time and he has also paid the requisite court fee thereon. Therefore, while rejecting the objection raised on behalf of the appellants, we hold the respondent’s cross-objections as maintainable. 

 

15.       It is an admitted position that the suit property was agreed to be sold to the respondent as a commercial property as it has been described in the agreement as commercial plot of land. It is also an admitted position that at the time of execution of the 99 years’ lease and even when appellant No.1 purchased it from the previous owner, the suit property was a residential property, and appellant No.1 had applied for its commercialization in the year 1987 prior to the agreement with the respondent. In our opinion, the main question is whether or not the suit property was fully and legally commercialized prior to the agreement or within the time stipulated therein for conveying the same to the respondent as a commercial property. Though it is the case of the appellants before us that the suit property was duly commercialized by KBCA and PECHS, and as such they were not required to fulfill any other formality including payment of charges to the Ministry and or obtaining NOC from the Ministry, but no such plea was raised by them in their written statement. On the other hand, the case of the respondent has all along been that the appellants were obliged to get the suit property commercialized from the Ministry by paying the requisite charges to and obtaining NOC from the Ministry, and he was not obliged to pay the balance sale consideration unless the above reciprocal promise was performed by the appellants. In order to appreciate the respective contentions of the parties, we have examined the relevant provisions of the 1979 Regulations which were undisputedly applicable at the relevant time.

 

16.       Regulation 4 of Schedule-D of Part-II of the 1979 Regulations specifically deals with Change of Land Use of Residential Plots. Clause (a) of Regulation 4 ibid provides that no residential plot shall be converted into any other use except with the approval of MP&EC after the recommendations of the concerned authority. Clause (b) of Regulation 4 ibid provides that the applicant shall apply to the concerned authorityfor the change of land use of the plot with full justification whereafter the concerned authorityshall examine the application in the light of the planning of the area, commercial facilities in the vicinity, road width, traffic flow and other relevant factors. It may be noted that appellant No.1 was admittedly the applicant in terms of Clause (b) ibid as the application for commercialization was filed by appellant No.1 prior to the execution of the agreement. Under Clauses (c) and (d) of Regulation 4 ibid, the concerned authorityshall issue a public notice at the expense of the applicant for the change of land use of the plot, and shall also convey the objections, if any, to MP&EC for determination. Under Clause (e) of Regulation 4 ibid, the applicant shall pay the prescribed scrutiny fee and other charges to MP&EC and the concerned authority. Clause (f) of Regulation 4 ibid provides that final no objection certificate (NOC) shall be issued by the concerned authority after approval of MP&EC.

 

17.       In Regulation 1(e) of Part-II of the 1979 Regulations, concerned authority has been defined as the public agency designated to perform the functions for the purposes of the 1979 Regulations, and listed in Schedule-A thereto. In the said Schedule-A, several public agencies have been designated as concerned authorities for their respective areas with such powers as contemplated by Sections / Regulations 30 and 31 of the Part-II of the 1979 Regulations. For the purposes of the area of the suit property, ‘Pakistan Public Work Department’ listed in the said Schedule-A would be the concerned authority as Sub-License ‘A’ and the 99 years’ lease in Form ‘B’ in respect thereof were executed by PECH Society and Government of Pakistan, Ministry of Works and Rehabilitation. Under Regulation 30 ibid, powers and duties under the 1979 Regulations are delegated by MP&EC to the concerned authority listed in Schedule-A ibid ; and, Regulation 31 ibid inter alia provides that each concerned authority shall carry out inspection and take other appropriate measures on behalf of MP&EC to ensure compliance with the 1979 Regulations and submitting the report to MP&EC.

 

18.       After examining the above provisions, it can be safely concluded that recommendations from the Ministry were required prior to the approval of MP&EC, as provided in Regulation 4(a) ibid, for conversion of the suit property from residential to commercial ; under Regulation 4(b) ibid, appellant No.1 was required to apply to the Ministry for the change of land use of the suit plot and such application was to be examined by the Ministry in view of the criteria / factors specified therein ; the Ministry was also required to comply with the requirements contained in Regulations 4(c) and 4(d) ibid ; under Regulation 4(e) ibid, appellant No.1 was required to pay the prescribed scrutiny fee and other charges not only to MP&EC, but also to the Ministry ; and, the final NOC under Regulation 4(f) ibid was to be issued by the Ministry after approval of MP&EC. Since all the above requirements were mandatory in nature, the suit property could not be deemed to have been commercialized under the 1979 Regulations in the absence of any of the above. Exhibit D/5 dated 19.12.1987 issued by KBCA to PECHS clearly shows that NOC for commercialization was issued by KBCA only from town planning point of view, and that too subject to approval by the Ministry, as admitted by appellant No.2 in his cross-examination. He had also admitted that such approval from the Ministry was not obtained by him. Likewise, Exhibit D/9 dated 08.12.1994 issued by KBCA to appellant No.1 regarding the proposed plan was also subject to approval by the Ministry. Exhibits D/8 and D-8/1 relied upon by the learned counsel for the appellants show that the amounts mentioned therein were paid by appellant No.1 to PECHS and not to the Ministry. Record shows that in his cross-examination the respondent was not confronted at all by the appellants that his claim that the appellants were required to pay charges to the Ministry and obtain NOC from the Ministry was wrong, and it was not even suggested to him that the commercialization process was to be completed by him. This being the position, the assertions of the appellants that after issuance of letters / NOC by KBCA and PECHS, the process of commercialization of the suit property had been completed in all respects and they were not required to take any further steps in this behalf or that the remaining formalities in this behalf were to be completed by the respondent, do not appear to be correct and they are also beyond the scope of their written statement. Even if the agreement was silent on this point, the appellants could not absolve themselves from the above obligations which were cast upon them by the Regulations having complete statutory sanction as held in Multiline Associates V/S Ardeshir Cowasjee and 2 others, PLD 1995 S.C. 423 ; firstly, as admittedly the suit property was to be conveyed to the respondent under the agreement as a commercial property ; and secondly, as admittedly there was no stipulation in the agreement that the respondent was responsible to complete the formalities for commercialization of the suit property.

 

19.       In view of our above finding that the appellants were obliged to discharge their statutory obligation in any event, the respondent was not required to prove the same. Moreover, there was no need or occasion for the parties to enter into an oral agreement for this purpose as the said statutory obligation could not be discharged or undertaken in any manner by the respondent without first becoming the absolute owner of the suit property and acquiring title in respect thereof ; and, the respondent could not have acquired such status and title unless the suit property was commercialized for all legal intent and purposes prior to its conveyance in his favour. However, the oral understanding in this behalf was successfully proven by the respondent in our opinion in terms of Article 103 of Qanoon-e-Shahadat Order, 1984, as the agreement was admittedly silent on this point and the evidence produced by the respondent in relation thereto was not inconsistent with the agreement, but was in fact necessary to implement the agreement and the intention of the parties expressed therein. In this context, reference may be made to Umar Bakhsh (supra) relied upon by the learned counsel for the respondent. Since we have already held that evidence produced by the respondent in relation to the oral understanding was not inconsistent with the agreement, the cases of Mst. Baswar Sultan (supra) and Bolan Beverages (Pvt.) Limited (supra) relied upon by the learned counsel for the appellants are not relevant in our opinion as it was held in the said cases that such evidence relating to oral agreement or statement cannot be permitted which may contradict or vary the terms of the agreement or is against the terms of the agreement.

 

20.       It may be observed that every lessee of an immovable property is bound by the terms and conditions of the lease, and in the case of the suit property, whosoever may step into the shoes of the lessee shall be bound by the terms and conditions of the registered lease in Form-B (Exhibit D/2), Clause 7 whereof reads as under :

 

7.      The said plot, and the buildings or erection built or to be built thereof shall be used for residential purposes only, and shall not be diverted to other use without the express consent in writing from the Lessor. For breach of this covalent the Lessor shall be entitled to forfeit the lease and to resume the plot.

 

The lessor in the instant case was the President of Pakistan / Government of Pakistan, Ministry of Works and Rehabilitation, whose express consent in writing was not obtained by the appellants for converting the status of suit property from residential to commercial. When appellant No.2 was confronted with the above and was specifically asked to produce the document, he insisted that KBCA was authorized by the Government in this behalf. We may observe that KBCA being a building control authority and PECHS being a cooperative housing society, are not competent and have no jurisdiction at all to change or alter the status of use of any land / plot for which it is specifically leased. In the instant case, only the Ministry having the exclusive power and jurisdiction was/is competent to change the status of the suit property from residential to commercial.

 

21.       In paragraph 3 of his plaint, the respondent had specifically averred that the suit property was represented and agreed to be sold to him by appellant No.1 as a commercial plot of land ; at the time of execution of the agreement, the appellants had assured him that the suit property had been duly commercialized and the only formality left in that regard was the final payment of dues and the entry of the same in the relevant records of the Ministry ; and, on such basis and assurance, he had entered into the agreement and made payments thereunder. In paragraph 5 of the plaint, the respondent had specifically alleged that he kept pressing the appellants to supply him copies of the documents and records showing commercialization of the suit property and payments in respect thereof by the appellants to relevant authorities, but the appellants failed and refused to produce or show the relevant documents to him and kept on prolonging the matter on one ground or the other. The above specific averments and allegation by the respondent were not specifically denied or controverted by the appellants in their written statement. It is well-settled that under Rules 3 and 5 of Order VIII CPC it shall not be sufficient for a defendant to deny in his written statement generally the grounds alleged by the plaintiff ; the defendant must deal specifically with each allegation of fact of which he does not admit the truth ; every allegation of fact in the plaint, if not denied specifically or by necessary implication or stated to be not admitted by the defendant in his pleading, shall be taken to be admitted. In view of the above well-settled legal position, as the appellants did not deny the above specific averments and allegation made by the respondent, the same ought to be deemed to have been admitted by them.

 

22.       We have already held that the appellants were obliged to convey the suit property to the respondent as a commercial property and to complete all the requisite statutory obligations in this behalf before finalization of the sale. Therefore, it follows that the respective promises of both the parties under the agreement were reciprocal in nature and were certainly dependent on the performance of each other. As such, the respondent was not obliged to pay the balance sale consideration to the appellants unless the entire process of commercialization of the suit property was completed and it was ready to be conveyed to him as a commercial property. This being the position, there was no breach on the part of the respondent, and in fact it was the appellants who committed breach by not conveying the suit property to the respondent as a commercial property, as it has never been their case that it had become impossible for them to perform their reciprocal promise. The time stipulated in the agreement was of no consequence in view of reciprocal promises of the parties and also as it is well-settled that time is not deemed to be of the essence of contract in cases of immovable properties. The cases cited and relied upon by the learned counsel for the appellants are clearly distinguishable and as such are of no help to him. In view of the above discussion, the Suit filed by the respondent for specific performance and injunction ought to have been decreed in his favour.

 

23.       Foregoing are the reasons of the short order announced by us on 26.11.2014, whereby the cross-objections filed by the respondent in this appeal were allowed with costs throughout, and Suit No.1038 of 2004 filed by him against the appellants was decreed to the extent of prayers (i), (ii), (iii) and (iv) made therein.

 

 

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