IN THE HIGH COURT OF SINDH AT KARACHI
Suit No.1042 of 2004
&
Suit No.170 of 2005
Present:
Mr. Justice Irfan Saadat Khan.
Date of hearing : 19-8.2010.
For plaintiff in Suit No.1042/2004 : Mr. Tasawar Ali Hashmi, Advocate.
For defendant in Suit No.1042/2004 : None.
For plaintiff in Suit No.170/2005 : None.
For defendant in Suit No.170/2005 : Mr. Tasawar Ali Hashmi, Advocate.
JUDGMENT
IRFAN SAADAT KHAN, J.: Plaintiff has filed this suit for declaration, specific performance, possession, compensation and injunction in respect of Apartment No.12/SSI/PTI, Fourth Floor, Silver Sands Project, DS-123, Phase V Extension, Khayaban-e-Shamsheer, DHA, Karachi.
Brief facts of the matter are that through agreement dated 16.11.1995 (“the agreement”) plaintiff booked a residential apartment No.12/SSI/PTI on fourth floor in the project of defendant namely Silver Sands Project situated on plot No. DS-123, Phase V, Extension Khayaban-e- Shamsheer, DHA, Karachi on the terms and conditions mentioned in the said agreement. As per the agreement, the possession of the said apartment was to be handed over to the plaintiff within three and half years from the date of issuance of allocation letter, which letter was never issued as the apartment and its number was already allocated. The plaintiff kept on making payments of the installments when in the year 1996 construction work was completely stopped. The defendant concealed this fact from the plaintiff and demanded the escalation of the price of the apartment for the reason that the specification of some items related to finishing was to be improved. As the Plaintiff had already invested hefty amount therefore he reluctantly agreed to the escalation of Rs. 500,000/- by addendum dated 18.12.1999 to the agreement dated 16.11.1995. The plaintiff not only paid the entire amount according to the original agreement dated 16.11.1995 but also the additional escalated amount under the aforestated addendum dated 18.12.1999 to the tune of Rs. 3,88,842/- leaving a balance of a meager amount of Rs. 1,11,158/-, which was supposed to be paid at the time of possession of the said apartment. As per the terms of the agreement dated 18.12.1999 defendant agreed that in case they failed to give physical possession of the said apartment to the plaintiff by or before July 2000 the defendant shall pay to the plaintiff an amount of Rs.15000 per month for each delayed month as compensation on prorate basis. That in spite of repeated written requests and demands defendant failed to hand over the physical possession of the said apartment to the plaintiff. At the relevant time plaintiff was working in Kuwait, therefore, he complained the matter to the Overseas Pakistanis Foundation. The defendant vide its letter dated 20.11.2000 falsely informed the Foundation that the possession of the said apartment would be given to the plaintiff in January 2001, yet it failed to do so and stressed on demanding the dues although no construction work was going on and the apartment is not ready for delivery. The Defendant also addressed threatening letters dated 22.10.2001 and 27.2.2002 in reply to plaintiff's letter dated 24.11.2001. Hence the plaintiff filed instant suit for the following relief:
i-a) For specific performance of the agreements dated 16.11.1995 and 18.12.1999 by the Defendant.
i) For possession of apartment bearing No.12/SSI/PTI on fourth floor of Silver Sand apartments on plot No. DS-123 Phase V Extension, Khayaban-e-Shamsheer, D.H.A.Karachi.
ii) Compensation for delay in handing over the said apartment at Rs.15,000/- per month from August 2000 to September 2004 amounting to Rs. 7,50,000/- and thereafter at the same rate till possession is handed over to the plaintiff.
iii) Alternatively for a sum of Rs.50.00 Lacs which is the present market value of the said apartment plus compensation at the rate of Rs.15,000/= per month from August 2000 till payment.
iv) A surcharge equal to 2% per month of the due amount as agreed.
v) Declaration that Plaintiff is the owner of and entitled to Apartment No. 12/SSI/PTI 4th floor, Silver Sand Apartments on plot No. DS-123 Phase V Extension, Khayaban-e-Shamsheer, D.H.A.Karachi.
vi) Restrain the Defendant its agents, employees, nominees from alienating/selling/transferring in any way the said apartment to third party.
vii) Cost of the suit.
viii) Any other/further/additional relief/reliefs which this Hon'ble Court may deem fit and proper under the circumstances of the case.
The suit was contested by the defendant by filing written statement. In its written statement, the defendant has admitted the transaction and execution of the agreement dated 16.11.1995 and addendum dated 18.12.1999 while denied more or less all other averments in the plaint stating that the plaintiff failed to make payment of dues within stipulated time. It would not be out of place to mention that the defendant also as a counterblast has filed a suit bearing No.170/05 against the plaintiff for not paying the installments in time and for cancellation of the booking of the said flat. Both these suits are taken up together for final disposal.
On the basis of the pleadings of the parties, the following issues were framed:
1. Whether the plaintiff paid a sum of Rs.28,88,842 to the defendant towards the price of apartment No.12/SSI/PTI on Fourth Floor of project Silver Sand Apartments on Plot No.DS-123, Phase V Extension, Khayaban-e-Shamsher, D.H.A., Karachi, being 100% of original price and 97% of escalated price?
2. Whether the apartment was completed for handing over the possession to plaintiff in accordance with the Addendum No.1 dated 13.3.2000. If not to what effect?
3. Whether the plaintiff was justified in withholding an amount of Rs.1,11,158 due to the fact that the subject apartment was not completed and still incomplete?
4. Whether the plaintiff is entitled to recover compensation for an amount of Rs.15,000/- per month from July 2000 till physical possession of completed apartment is given to the plaintiff by the defendant in accordance with the agreement?
5. Whether the defendant is entitled to cancel the agreement?
6. Whether the plaintiff violated the terms and conditions of sale of the suit property and withheld the installments and also the additional amount @24%, if yes, what is its legal effect?
7. Whether the plaintiff is entitled to possession of the suit property?
8. What should the Decree be?”
The plaintiff in support of his case examined himself and produced documentary as well as oral evidence while attorney of the partners of the defendants, namely, Muhammad Asif son of Ghulam Mahboob was examined on behalf of the defendants and also produced oral as well as documentary evidence.
Mr. Tasawar Ali Hashmi, learned counsel for the plaintiff submitted that as per agreement dated 16.11.1995 the total cost of the apartment was Rs.25,00,000 and it was provided under Article 3 of the said agreement that there would be no escalation in price. The learned counsel stated that although work on the project was completely stopped in 1996 but the defendant did not disclose the said fact to the plaintiff and the plaintiff honestly kept on paying the installments to the defendant and till 18.12.1999 had paid a sum of Rs.21,73,000/-. The learned counsel also submitted that though there was clause 3 in the agreement which barred any increase in the price but still reluctantly the plaintiff agreed to Addendum I dated 18.12.1999 whereby the cost of the apartment was increased to Rs.3,000,000. It is explained that the plaintiff had paid a total sum of Rs.28,88,842 upto 24.3.2001, which comes to 96% of the total payment, to the defendant. Thus, according to the learned counsel, the plaintiff has paid to the defendant the entire price of the apartment originally agreed between the parties, rather more, and has paid more than 96% of the revised price which was increased in violation of the previous agreement. Learned counsel further stated that as per clause 7 of Addendum I to the Agreement the apartment was to be completed and handed over to the plaintiff “latest by July 2000” and in case of failure to do so, the defendant was to pay Rs.15,000/= per month to the plaintiff for each delayed month. The learned counsel finally submitted that till date the defendant has miserably failed to complete the apartment and has not handed over the same despite the fact that more than 100% of the original agreed price and more than 96% of the revised price of the apartment had already been paid to the defendant. He, therefore, prayed that the suit may be decreed in favour of the plaintiff.
Although none has appeared on behalf of the defendant and even on the last date i.e. 11.1.2010 no one was present for the defendant, but I have examined the entire evidences recorded on behalf of the defendant and have also taken into consideration all the material placed by the defendant in its defence while disposing of the present two suits and my findings are as under:
v So far as the first issue regarding payment of Rs. 28,88,842 is concerned, this has been admitted by the witness of the defendant in his cross examination. It seems that there is some typographical mistake whereby the amount has been mentioned as “28,28,842” in the cross examination. Therefore, no deliberation on this issue is required. Thus, the issue is answered in the affirmative.
v Issue No.2 is with regard to completion and handing over the suit property to the plaintiff. In this regard reference may be made to the Nazir’s report dated 15.12.2005 whereby it was reported as under:
“The plaintiff’s flat is situate on 4th floor. Pasterwork is complete and flooring work is yet to start. Electric wiring is complete without switchboard and connection. Water pipe lines of Bathroom and kitchen are fixed. Door and window frames are fixed but without pans [panes]. All the flats including the flat of the plaintiff is [are] uninhabitable.”
v Thus, as per the Nazir’s report, the apartment of the plaintiff was not complete on 15.12.2005. Even the witness of the defendant had admitted in his cross examination that 80% work is complete in respect of the suit flat and that none of the allottees of the project are residing in the said flats. This means that not a single flat/apartment has been completed and handed over to any of the allottees. Thus, the apartment of the plaintiff was not completed for handing over of the same to the plaintiff in accordance with the Addendum No.1 dated 13.3.2000. This issue is answered accordingly. However, its effect would be discussed at appropriate place in this judgment.
v Issue No.3 relates to the withholding of Rs.111,158 by the plaintiff. According to the agreement dated 16.11.1995, the price of the apartment was fixed at Rs.2,500,000 and as per clause 3 of the said agreement, there was to be no escalation in the said price provided that the installments were paid regularly and “except due to unavoidable reasons beyond the control of the Company [Defendant] such as force majeure, war, natural calamity, civil commotion, strike, go slow by labour, change in Fiscal Policy of Federal, Provincial or Local Government etc.etc.” However, perusal of the Addendum No.1 to the Agreement, whereby the price was increased to Rs.3,000,000, shows that it was not increased due to any of the reasons stated in clause 3 of the Agreement. It may be stated that as per the Addendum No.1, apart from the change in price and handing over schedule, the other terms and conditions of the “original agreement remains unchanged”. Even otherwise, in the Addendum itself it is mentioned that Rs.83,000/- were to be paid at the time of possession. Thus a meager amount of only Rs. 28,158/- remains unpaid and that, too, due to the stoppage of work by the defendant. The defendant would have been justified in their claim had it been shown that the defendant’s project was progressing towards its timely completion. However, as admitted by the witness of the defendant and as reported by the Nazir in his report dated 15.12.2005 that the apartment under question rather all the apartments in the said project are still incomplete. Nothing has been produced in evidence to show that at any time the plaintiff was called upon to clear his dues as the apartment was ready for delivery to him. Therefore, the plaintiff was justified in withholding the said amount. This issue is therefore answered accordingly.
v Issue No.4 relates to the compensation claimed by the plaintiff at the rate of Rs.15,000/- per month, due to delay in handing over of the possession of the said apartment to the plaintiff. As per clause 14 of the agreement dated 16.11.1995, the defendant undertook to complete the said project and hand over the possession of the said apartments to its allottees complete in all respects within 40 months. However, when the Addendum No.1 to the agreement was executed it was agreed that the apartment will be completed and handed over to the plaintiff latest by July, 2000 and it was also agreed that if the defendant failed to give physical possession of the completed apartment to the plaintiff, in the stipulated time, the defendant would pay Rs.15,000/- per month for each delayed month as compensation, till physical possession of the said apartment is handed over to the plaintiff.
v Apart from the above, in the case of Rahim Ahmed Zaidi v.Hina Housing Project (2010 SCMR 1228), the Hon’ble Supreme Court has been pleased to allow damages to the party in view of the provisions of Section 13(3) of the Sindh Building Control Ordinance, 1979 and on the ground that the appellant in that case suffered a lot and remained in mental agony after booking of the property when the possession was not handed over to him within stipulated period. In the cited case it was held as under:
“The appellant suffered a lot and remained in mental agony after booking of shop when the possession was not handed over to him within stipulated period i.e. three years. The appellant endorsed the notice to the respondent and then filed a suit. The respondent deliberately lingered on the proceeding to avoid in handing over the possession of the shop. We find that the appellant is entitled to claim damages under section 13(3) of the Sindh Building Control Ordinance, 1979…”
The case of the plaintiff is quite identical to the above case even on better footings as the defendant has itself agreed to pay Rs.15,000/- per month to the plaintiff if the apartment is not handed over to him complete in all respects. Hence the plaintiff is also entitled to the said benefit. This issue is accordingly answered in affirmative.
v Issue No.5 is whether the defendant is entitled to cancel the agreement? It is an admitted position that the plaintiff has paid the entire sale consideration (Rs.2,500,000) in respect of the suit property as agreed in the original agreement and has also paid more than 96% of the escalated price and it is also an admitted position that the apartment of the plaintiff is not ready as yet, therefore, there is no default on the part of the plaintiff entailing the penalty of cancellation of the agreement. This fact is further confirmed by the Addendum to the Agreement wherein the reason for escalation in price has not been shown to be delay on the part of the plaintiff in payment of installments. Thus, it is clear that even the defendant admits that there was no default on the part of the plaintiff in payment of installments towards the price of the apartment. This issue is, therefore, answered in the negative.
v Issue No.6 was proposed by the defendant. It is to the effect whether the plaintiff violated the terms and conditions of the sale of the suit property, withholding of the installments and the additional amount of 24%. It is an admitted position that upto 24.3.2001 the plaintiff has paid a sum of Rs.2,888,842. In case the defendant had completed the apartment and called upon the plaintiff to take its possession and the plaintiff had failed to take the possession of the apartment in such situation the defendant would have been justified in claiming a penalty on the unpaid amount of installments. However, when the default was on the part of the defendant and the apartment as well as the entire project was not completed on time, rather it is still incomplete, the defendant cannot claim any such additional amount. In view of this and in view of my findings on the above issues, this issue is answered in the negative.
v In view of my discussion on the above issues, issue No. 7 is answered in the affirmative.
Accordingly, this suit is decreed in favour of the plaintiff and against the defendant as under:
a) The defendant is directed to put the plaintiff in possession of apartment bearing No.12/SSI/PTI on fourth floor of Silver Sand apartments on plot No. DS-123 Phase V Extension, Khayaban-e-Shamsheer, D.H.A.Karachi complete in all respects within three months from the date of announcement of this judgment, when admittedly 80% work of the said project is complete;
b) To pay compensation to the plaintiff for delay in handing over the said apartment at Rs.15,000/- per month from August 2000 till realization;
c) In case the defendant fails to handover the apartment as per (a) above, the defendant shall pay a sum of Rs.50.00 Lacs plus compensation at the rate of Rs.15,000/= per month from August 2000 till payment in lieu of the apartment;
d) A surcharge equal to 2% per month of the due amount, as agreed.
e) It is declared that the Plaintiff is the owner of and entitled to Apartment No. 12/SSI/PTI 4th floor, Silver Sand Apartments on plot No. DS-123 Phase V Extension, Khayaban-e-Shamsheer, D.H.A.Karachi.
f) The defendant its agents, employees, nominees are restrained from alienating/selling/transferring in any way the said apartment to third party;
g) Cost of the suit.
Before parting with the judgment it may be observed that no one appeared on behalf of the defendant. However, from the evidence on record it is evident that the defendant has no case and the absence on its part is an attempt to protract the proceedings. It has also come on record that all the partners of the defendant firm have gone abroad. The witness who appeared on behalf of the defendant as attorney of the partners of the defendant firm has admitted in his cross examination that the Power of Attorney executed in his favour has not been attested by the Pakistan Embassy. It is mandatory requirement that a power of attorney executed in a foreign territory is to be attested by the Pakistan Embassy/Consulate in that country otherwise it has no evidentiary value. Reference in this regard may be made to the decision Muhammad Yaseen Siddiqui vs. Tehseen Javaid Siddiqui reported as 2003 MLD 319. Therefore, it can be safely said that there is no rebuttal to the case of the plaintiff. However, if the evidence adduced on behalf of the defendant is examined, even then no case is made out for dismissing the suit as all the relevant facts have been admitted by the witness of the defendant.
Hence in view of the facts enumerated above the suit filed by the plaintiff namely Muhammad Maroof Ahsan bearing No.1042/2004 is decreed in his favour as mentioned above, while the suit filed by the defendant namely M/s. Beach Developers bearing No.170/2005 is hereby dismissed being frivolous and trivial in nature.
Karachi, the ______________ Judge