IN THE HIGH COURT OF SINDH, AT KARACHI.
SUIT NO.727/2007
Date of Hearing: 19.05.2009
Plaintiff : Mrs. Zakia Nazish through
Mr.Aminullah Siddiqui, Advocate.
KHALID ALI Z. QAZI, J: This is a suit filed by the plaintiff against the defendant Al-Asr Enterprises seeking declaration, direction, specific performance, mandatory injunction and damages with the following prayers:-
"a) Declare that the letter of escalation dated 10-05-2007 as well as Notice/Letter of Defendant’s counsel dated 07-06-2007 are illegal, unlawful and uncalled for and no value in the eyes of law, as such, liable to be declared as such.
b) Direct the Defendant to hand over the Possession of the Flat in question to the Plaintiff forthwith.
c) Judgment & Decree for specific performance be passed in favour of the plaintiff and against the defendant with the direction to the defendant to transfer and execute the title documents of Flat in question. Mandatory injunction against the Defendant, their officers and agents be issued to such effect.
d) Judgment and Decree be passed in favour of the plaintiff for physical, vacant possession of the Flat in question.
e) Judgment and Decree granting damages in favour of the plaintiff and against the defendant to the tune of Rs Fifty Lacs plus mark up at Bank rate as mentioned hereinabove.
f) Permanent injunction (and pending disposal of the main suit) restraining the defendant, their agents, successors, servants, legal heirs, attorneys, employees or any person or persons for or under and / or on behalf of the defendant including (without limitation) from transferring, parting, renting, selling or create third party interest.
g) Consequential relief as this Honorable Court may deem fit and proper may also be granted.
h) Any other relief(s) which this Honorable Court may deem fit and proper under the circumstances of the case
i). Costs of the suit."
2. The brief facts requisite for disposal of the case are that defendant launched a building project under the name and style of “Sanober Heights” to be constructed over Plot No.S.B-11, Sector Z-A, Gulshan-e-Maymar, Karachi and invited applications from the general public for booking / allotment of its respective units. The plaintiff having been satisfied from the terms and conditions offered by the defendant booked Flat No.209, 2nd Floor, Block-B, Type-A-1 of the said project on 26.12.2003 for a total sale consideration of Rs.8,65,000/-, (hereinafter referred to as the Flat in question) including special discount of Rs.20,000/- and documentation charges of Rs.150,000/- as well as road facing charges of Rs.20,000/- plus loan of House Building Finance Corporation of Rs.275,000/-, in this regard terms and conditions for the schedule of payment in respect of flat in question was also settled between the parties. The Plaintiff in compliance of the aforesaid schedule of payment, made payment without any delay not only the actual payment of the flat in question but made excess payment of Rs.7,751/-, which is refundable to the plaintiff.
3. It is further case of the plaintiff is that the defendant on 10-05-2007 sent a letter regarding payment of House Building Loan over the flat in question by the Plaintiff, which is the responsibility of the defendant to arrange the loan of the House Building Finance Corporation, however looking to the problems of the defendant the Plaintiff was and is ready to cooperate with the defendant and assured to pay the loan in three installments although it is not responsibility of the Plaintiff. Since the Plaintiff made full / excess payment of the flat in question to the defendant and his dream to live and enjoy with his family in his own house/flat is going to be fulfilled, the defendant illegally, illegitimately, unlawfully and dishonestly sent a circular/letter dated 10-05-2007 and demanded escalation charges by the Plaintiff with reference to clause 12(b) of the terms and conditions of agreement, which shows that it does not serve the purposes of the circular/letter of defendant asking for the escalation charges as it is mentioned in the said clause in respect of the tariff charges which have no relation with the escalation charges and it is related directly with the Government. If there is anything in this regard with the defendant he should have to show off the same and if there is existence of such type of proof it is the matter between the Plaintiff and the Government and not the Defendant, hence no question arises for sending the letter/circular asking for the escalation charges. As per para-4 of the terms and conditions it is crystal clear in reply to the aforesaid escalation circular of the defendant in presence of the fact that the Plaintiff has already been made not only full and final but excess payment.
4. It is further stated in the memo of plaint that despite handing over the possession of the flat in question after full and final payment of the agreed amount, defendant through his counsel sent a letter dated 07.06.2007 demanded clearance of dues within 07 days from the date of receipt, in this regard it is pertinent to mention here that all the payments with regard to the flat in question have already been made within due time. With regard to circular/letter regarding escalation charges it is necessary to point out here that in the aforesaid letter of Defendant’s counsel himself admitted in next para of opening that “That no doubt that the terms and conditions 04 of the unit in question is that no any amount will be increased in the agreed price of the unit according to the payment schedule” hence no question arises for the escalation charges. Since the full payment of agreed amount, the plaintiff is running from the pillar to post to have the possession of the flat in question but the defendant ignoring the request of the Plaintiff on one pretext or the other. The Plaintiff spent their whole life's saving in booking of the flat in question and due to defendant's illegal action has resulted in great mental torture, agony and harassment. As such the plaintiff is entitled to general damages as well as special damages relating to mental torture, distress and has to be measured as follows:-
i) Mental torture and agony Rs.15,00,000/-
ii) Legal Expenses Rs.200,000/-
iii) General damages Rs.10,00,000/-
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Rs.27,00,000/-
Further more the price of flat in question has been increased as such the Plaintiff is also entitled to further damages to the tune of Rs.20 lacs.
5. It is stated that the above act of the defendant was unbecoming of the conduct of a business organization, illegal and in violation of the Contract Act and the Transfer of Property Act while the defendants are neglecting and avoiding to give the possession of the flat in question although plaintiff has religiously followed and adhered to the binding contract, in this regard regulation 5-1.4 regarding determination of price and cost estimate of the Karachi Building & Town Planning Regulations, 2002 speaks volume. It is also stated that behind the above illegal act of the defendant for not handing over the possession of the flat in question is that since the market price has been increased, therefore he is trying his level best to cancel the flat in question to sell out the same to other buyer on the rate of his own choice, hence the suit.
6. To controvert the above position as stated by the Plaintiff, the Defendant filed written statement and raised preliminary Legal Objections to the effect that the suit is not maintainable under the Law, as the plaintiff has approached this Court with unclean hands and he failed to perform his contractual obligation with the answering defendant and as such he is not entitled for possession before performing the part of contract according to the terms and conditions, hence the suit is liable to be dismissed.
7. It is stated in the written statement filed by the Defendant that plaintiff having been satisfied from the terms and conditions offered by the defendant and booked flat in question, but according to the terms and conditions the plaintiff not performing his contractual obligations in a result Rs.275,000/- and other necessary charges are outstanding against the said flat, therefore as per terms and conditions the plaintiff is not entitled for the claim of possession from the answering defendant. It is denied that the plaintiff paid any excess amount to the defendant. It is also denied that the allegation leveled by the plaintiff against the defendant regarding the House Building Finance Corporation's loan and stated that the terms and condition No.26 of the flat in question clearly shown that in case of loan / investment is delayed or reduced or refused due to any reason by the loan giving agency the deficit so arises will pay in case by the applicant own his resources, on demand but the plaintiff not fulfill the commitment and not paid the loan amount on demand of answering defendant. It is admitted that defendant issued a letter dated 10.5.2007 for demand of escalation charges as such the answering defendant completed the project before the completion date of KBCA and therefore completing the project the rates of material and labour charges are higher than the expectation and beyond the limit of answering defendant in a result the answering defendant suffering heavy financial losses and facing great difficulties to complete the finishing work of the project, therefore, the schedule price of the unit offered necessary to increase as such necessarily to major facts for escalation moreover the situation of Karachi therefore the defendant enhance the price according to the ratio of enhancement in prices of construction material and labour charges to complete the project before the date of completion of project for delivery to the respective allottees. But the plaintiff according to their commitments and the terms and conditions never cooperated with the defendant, therefore, the plaintiff is not entitled to take the possession of the flat in question before clearance of all dues in respect of the unit in question and according to the terms and condition No.3 of the flat in question. It is denied that the plaintiff paid the full and final or any excess amount to the defendant. It is also stated that the plaintiff filed this suit to get undue advantage from this Court and also from the defendant, and he is not entitled for any damages as such the plaintiff not performing the contractual obligation of the flat in question with the defendant.
8. Out of the pleadings of the parties, following consent Issues have been framed by this Court on 05.05.2008:
"1. Whether the plaintiff is entitled to abide the terms and conditions of the unit in question?
2. Whether the plaintiff is entitled to pay the escalation charges to the defendant, which were spend on the unit in question after unacceptation of increasing of higher prices in the building materials, labours and other charges?
3. Whether the plaintiff is entitled to any other relief claimed?
4. What should the decree be?"
9. This Court on 05.05.2008 appointed Mr. Qamar Ahmed Shaikh, Advocate (Retired District & Sessions Judge) as Commissioner to record the evidence of the parties.
10. The plaintiff filed his affidavit-in-evidence as Ex.P/1 along with the documents Ex.P/2 to Ex.P/30 and after cross examination by the learned counsel for the defendant, the side of plaintiff was closed on 10.06.2008.
11. The defendant filed affidavit-in-evidence of its director Bilal Ahmed as witness who was cross examined by the learned counsel for the plaintiff thereafter side of the defendant was closed on 28.10.2008.
12. I have heard the learned advocate for the parties, perused the record and the case law on the subject. I will deal the Issues one by one. My findings with reasons are as under:-
ISSUE NO.1:
13. In para-3 of the affidavit-in-evidence (Ex.P/1) the plaintiff admitted that after his satisfaction with the terms and conditions as mentioned in application form Ex.P/2 offered by the defendant he booked the suit flat in the defendant's project on 26.12.2003 for a total sale consideration of Rs.8,65,000/- (Rupees Eight Lacs Sixty Five Thousand Only) including special discount of Rs.20,000/- and documentation charges of Rs.1,50,000/- as well as road facing charges of Rs.20,000/- plus loan of House Building Finance Corporation of Rs.2,75,000/-. It is further testified that payment schedule was also agreed between both the parties. He further deposed that he made the payment not only as per schedule but also made excess payment of Rs.9,751/- which is refundable to him as Ex.P/4 to Ex.P/24. In Para-4 of the Ex.P/1 the plaintiff admitted that in response to the defendant's letter dated 10.5.2007 (Ex.P/25) he is ready to cooperate with the defendant and ready to pay the loan in three installments. In cross-examination he admitted that he has not cleared HBFC loan according to the terms and conditions.
14. On perusal of the record of evidence it may be observed that the terms and conditions No.26 of Ex.P/2 of the suit property clearly mentioned that in case of HBFC loan/investment is delayed or reduced or refused due to any reason by the loan giving agency the deficit so arises will be paid in cash by the plaintiff from his own resources on demand but the plaintiff has not paid the said amount on demand Ex.P/26 of the defendant. The plaintiff is required to abide the terms and conditions as mentioned in Ex.P/2. Accordingly, this Issue is answered in the affirmative.
ISSUE NO.2:
15. The burden of proof in respect of this Issue is on the defendant. The defendant's witness in para-5 of his affidavit-in-evidence and in written statement deposed that the defendant has issued a letter dated 10.5.2007 Ex.P/25 for demand of escalation charges as the project has been completed before the date of completion given by KBCA and during this period the rates of material and labour charges are higher then the expectation and beyond the limit of the defendant therefore the defendant was suffering with the heavy financial losses and facing great difficulties to complete the finishing work of the project, therefore it is quite clear that the schedule price of the unit offered necessary to increase as such necessarily to major facts for escalation more over the situation of Karachi, therefore the defendant enhance the price according to the ratio of enhancement in prices of construction material and labour charges to complete the project. During the cross-examination, the DW admitted that the defendant have not taken any permission from KBCA for escalation of the price of the suit flat. He admitted no completion certificate has been filed in Court. He admitted that the clause 12 of the agreement Ex.P/2 only mentions about authorities and by the defendant. On perusal of the material available on the record it appears that prima facie the suit as framed on this Issue is quite in order. The contents of the plaint has been verified on Oath by the plaintiff who also appeared as PW and faced the cross-examination. The process of the construction of the buildings is governed under the provision of Sindh Building Control Ordinance, 1979 as amended in 1982 and Karachi Building Town Planning Regulations 2002 framed thereunder. Regarding the determination of price and cost, the Regulation 5.1.4 of Karachi Building & Town Planning Regulations 2002 is relevant which may be read as under:-
"5-1.4. Determination of Price & Cost Estimate.
A developer shall submit the Selling Price of various units for registration purposes with details specification and work program for the project as specified in Form DNP-I Annexure (3) and (4) respectively.
This price shall be quoted in all the advertisement and promotion literature published by the developer, no escalation in the cost shall be allowed except where inflation (as defined by the Ministry of Finance) is above double digit for particular year in such case excess over the double digits shall be the percentage of price increase. In this case the developer shall simply inform the Authority along-with relevant inflation figure. No escalation shall be granted to the developer who has failed to complete the project in time."
16. On bare perusal of the above it is clear that no escalation in the cost shall be allowed except where inflation (as defined by the Ministry of Finance) is above double digit for particular year in such case excess over the double digit shall be the percentage of price increase. In present case admittedly the defendant has not produced any evidence of whatsoever nature to justify his action for the escalation of the price of suit property. Neither any permission from KBCA has been obtained nor any document in respect of inflation from the Ministry of Finance has been produced to substantiate their claim so much so no comparative statement of costs of different building material has been filed. Not a single witness from the concerned department or construction industry has been examined on this Issue. On the contrary under the conditions No.4 and 12(b) of agreement Ex.P/2, the defendant is required not to enhance the price of the suit property under the circumstances of the case. The agreed conditions No.4 & 12(b) may be read as under:-
"4. There shall be no increase in the agreed price of the unit, which is already booked by company provided installments rate paid by the applicant strictly in accordance with schedule agreed at the time of booking.
12(b). The company accepts no responsibilities if rates/tariff charges by these concerned authorities are higher than applicant's expectations. The applicant will make his / her own arrangement individually or collectively to settle these higher / inflated rates with the concerned authorities."
17. In view of the above circular/letter dated 10.5.2007 Ex.P/25 issued by the defendant demanding the escalation charges from the plaintiff is unjustified, illegal and liable to be withdrawn or set aside. The plaintiff is not liable to pay the escalation charges to the defendant. The Issue is answered accordingly.
ISSUE NO.3:
18. The burden of proof in respect of this Issue is on the plaintiff. As regards the claim of general and special damages relating to mental torture, distress etc. the plaintiff has not produced sufficient evidence as required under the law. No receipt has been produced in respect of payment of legal charges. Similarly no evidence has been produced in respect of the increase of the price of suit flat to substantiate his claim. Answered accordingly.
ISSUE NO.4:
19. In view of my findings on the above Issues, I am of the considered view that the plaintiff is entitled for the reliefs as under:-
i) Declaration that the letter of escalation dated 10.5.2007 issued by defendant is illegal, unlawful and liable to be withdrawn;
ii) Direction to the defendant to handover the possession of suit property to the plaintiff after receipt of deficit HBFC loan from the plaintiff;
iii) Direction to the defendant to transfer and execute the title documents of suit property in favour of the plaintiff in accordance with law within 30 days from the date of judgment.
In above terms the suit is decreed with costs.
Karachi: JUDGE
Dated:29.5.09.