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IN THE HIGH COURT OF SINDH AT KARACHI

H.C.A. No.170 OF 2019

[ Fatima Munir v. Khawar Karim & another ]

(Arising out of Suit No.514/2004)

H.C.A. No.171 OF 2019

[ Fatima Munir v. Khawar Karim & another ]

(Arising out of Suit No.502/2004)

H.C.A. No.172 OF 2019

[ Fatima Munir v. Khawar Karim & another ]

(Arising out of Suit No.1390/2004)

PRESENT:

Mr. Justice Arshad Hussain Khan

Mr. Justice Amjad Ali Sahito

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M/s. Ahmed Ali Hussain and Syed Zaeem Hyder, advocates for appellant.

Mr. Irfanullah Khan, advocate for respondents.

Date of hearing : : 27.08.2026.

Date of Judgment : 09.09.2026

JUDGMENT

ARSHAD HUSSAIN KHAN J; This common judgment shall dispose of High Court Appeals Nos.170, 171 and 172 of 2019, preferred under Section 3 of the Law Reforms Ordinance, 1972, whereby the Appellant has assailed the consolidated judgment and decree dated 12.02.2019 passed by the learned Single Judge, sitting on the Original Side of this Court, in Suits Nos.514 of 2004, 502 of 2004 and 1390 of 2004. By the impugned judgment and decree, the learned Single Judge decreed Suits Nos.514 of 2004 and 1390 of 2004, filed by Respondent No.1 (Khawar Karim), with costs, while dismissing Suit No.502 of 2004 filed by the Appellant (Fatima Munir). Being aggrieved, the Appellant has preferred these connected appeals seeking setting aside of the impugned judgment and decree.

2. Briefly stated, the controversy arises out of a series of transactions concerning property bearing No.3-B, East Street, Phase-I, D.H.A., Karachi, admeasuring 1,700 square yards (“the subject property”). The parties initially entered into two agreements to sell dated 07.09.2003 and 21.12.2003 (hereinafter collectively referred to as “the earlier agreements”) for a total sale consideration of Rs.135,00,000/-. Difficulties subsequently arose in the performance of these agreements on account of, inter alia, encumbrances and outstanding liabilities in favour of Allied Bank Limited (ABL), as well as disputes regarding the agreed payment schedule. In an attempt to resolve these issues and restructure their respective obligations, the parties entered into a third agreement, styled as a Settlement Agreement dated 10.05.2004 (“the Settlement agreement”) . The controversy, however, persisted and further disputes arose regarding possession of the subject property, delivery and encashment of post-dated cheques, payment of utility dues and an alleged incident dated 02.06.2004 involving firing, hostage-taking and forcible dispossession. The aforesaid disputes culminated in the institution of three suits between the parties. Suit No.502 of 2004 was filed by Mrs. Fatima Munir seeking declaration, specific performance of the Settlement Agreement and permanent injunction; Suit No.514 of 2004 was instituted by Khawar Karim seeking, inter alia, specific performance of the earlier agreements and permanent injunction; whereas Suit No.1390 of 2004 was filed by Khawar Karim under Section 9 of the Specific Relief Act, 1877, seeking restoration of possession of the subject property. The parties filed their respective written statements and contested the suits. Since all three suits arose out of the same property and interconnected transactions between the parties, consolidated issues were framed and common evidence was recorded. Upon conclusion of the evidence and after hearing learned counsel for the parties, the learned Single Judge decided all three suits through the impugned consolidated judgment and decree dated 12.02.2019 in the manner noted hereinabove.

3. Learned counsel for the Appellant assailed the impugned judgment and decree on the ground that the same suffer from material misreading and non-reading of the evidence available on record. He contended that the learned Single Judge failed to appreciate the legal effect of the Settlement Agreement, which, according to him, constituted a novation of the earlier contractual arrangements between the parties and superseded the earlier agreements. He further submitted that Respondent No.1 repeatedly defaulted in fulfilling his contractual obligations, particularly in payment of the agreed consideration and clearance of the outstanding liabilities of Allied Bank Limited (ABL), and had also issued stop-payment instructions in respect of the post-dated cheques delivered pursuant to the settlement. Learned counsel further argued that Respondent No.1’s assertions regarding his longstanding residence in the subject property, forcible dispossession therefrom and loss of valuables were false and unsupported by the evidence on record. In support of this contention, he referred to the electricity bills allegedly reflecting negligible consumption, the police record and reports of Sub-Inspector Amir, which, according to him, did not substantiate any incident of forcible dispossession or mistreatment, as well as material contradictions in the testimony of the defence witnesses, namely Mushtaq Ahmed and Sawab Khan. Lastly, he contended that the learned Single Judge acted without lawful authority in granting Respondent No.1 a further period of 90 days to clear the outstanding bank liabilities, as such indulgence was neither contemplated by the contractual arrangement between the parties nor permissible under the applicable banking laws. On these grounds, he prayed that the impugned judgment and decree be set aside and the appeals be allowed.

4. Conversely, learned counsel for Respondent No.1 supported the impugned judgment and decree and contended that Respondent No.1 had duly performed his part of the contractual obligations by paying substantial advance consideration and taking lawful possession of the subject property. He submitted that it was the Appellant who committed breach of her contractual obligations by failing to convey a clear and unencumbered title and to discharge the outstanding liabilities and encumbrances of ABL, as agreed between the parties. With regard to the Settlement Agreement, learned counsel argued that the Appellant neither produced the original document in evidence nor laid the requisite factual and legal foundation for proving the same through secondary evidence; therefore, no reliance could lawfully be placed thereon. He further maintained that the learned Single Judge had correctly appreciated the oral and documentary evidence available on record, including the FIRs and agreements relating to deployment of security guards, and rightly concluded that Respondent No.1 had been unlawfully dispossessed from the subject property and was consequently entitled to restoration of possession as well as specific performance of the contractual obligations. He, therefore, prayed for dismissal of the appeals.

5. We have heard learned counsel for the parties at considerable length and, with their assistance, carefully examined the material available on record. Upon such examination, it emerges that the controversy essentially revolves around three documents, namely, the first agreement dated 07.09.2003, the second agreement dated 21.12.2003, and the alleged Settlement Agreement dated 10.05.2004. The case of the Appellant, Fatima Munir, is that when disputes arose between the parties regarding performance of the first two agreements, they subsequently entered into the Settlement Agreement dated 10.05.2004, whereby the earlier arrangements were cancelled/superseded and their respective rights and obligations were restructured. Respondent No.1, Khawar Karim, however, categorically denied having executed the said Settlement Agreement and maintained that the purported agreement, along with the receipts relating to payment and possession allegedly executed on the same date, were forged, bogus and fabricated documents.

6. In view of these divergent stands, the learned Single Judge framed, inter alia, specific issues touching upon the execution, enforceability and effect of the aforesaid agreements, including: (1) whether the parties entered into the agreements of sale dated 07.09.2003 and 21.12.2003; (2) whether the said agreements were capable of specific performance; and (7) whether the alleged agreement of Settlement dated 10.05.2004, along with the receipts pertaining to payment and possession of the same date, were fake, bogus and fabricated documents and, if so, to what effect and relief the parties were entitled.

7. While deciding the aforesaid issues No.(2) and (7) jointly, the learned Single Judge specifically noticed that the original Settlement Agreement had not been produced in evidence. On that premise, the learned Single Judge observed that no conclusive finding regarding its genuineness could be recorded in the civil proceedings. Since the existence, execution and legal effect of the Settlement Agreement constitute a material aspect of the controversy between the parties, it would be appropriate to reproduce the relevant portion of the impugned judgment, which reads as follows:-

“…. It is the claim of the purchaser that the agreements dated 07.11(09).2003 and 21.12.2003 (hereinafter referred to as the said agreements) are capable of specific performance whereas the seller claims in adversity on account of being cancelled by the third agreement dated 10.5.2004 (hereinafter referred to as the said agreement) being for cancellation of the said agreements. The onus as such is with the seller in this regard. The seller in support of this element has brought up evidence by producing photocopy of agreement of settlement dated 07.11.2006 marked as Annexure X-1, photocopy of notice under Article 76 & 77 of the Qanoon- e-Shahadat Order, 1984 read with Order 11 Rule 15 CPC marked as Annexure X-2, original TCS receipt marked as Annexure X-3, photocopy of the receipt of Rs. 20,00,000/- marked as Annexure X-4 and photocopy of the possession handing over/taking over to subject property marked as Annexure X-5 along with evidence of witnesses namely Abdul Hafeez producing his affidavit-in-evidence as Exh-DW-2 along with the witness Naveed Ahmed producing his affidavit-in-evidence as Exh-DW-3, in support of the said agreement. However The original of the said agreement has not been brought up in evidence nor the seller has been able to prove the said agreement by any other means and methods, even otherwise with the backdrop of the parties having made documented payments through banking channels the cash consideration in the sum of Rs.20 lacks of the said agreement not appealing to the mind cannot be entertained. The parties though have a controversy as to the original of the said agreement along with the allegation of the same to being bogus no conclusive findings can be given in a civil proceedings as to same being bogus and mad-up without any positive evidence in this respect especially where the original has not been produced before the Court, however the concluding effect of not proving an element determining the rights of the parties. As such these are determined in affirmative not proved and as discussed.”

[Emphasis supplied]

8. Learned counsel for the Appellant pointed out that, although the Appellant did not herself produce the original Settlement Agreement, the original thereof was, in fact, produced by Respondent No.1, Khawar Karim, during his evidence and was brought on record as Exh.PW-1/46. He further pointed out that one of the marginal witnesses to the said agreement was also examined during the proceedings. According to learned counsel, these material aspects of the evidence escaped the attention of the learned Single Judge while concluding that the original Settlement Agreement had not been produced. When confronted with this position, learned counsel for Respondent No.1 did not dispute that the original document had been produced from the side of Respondent No.1 and formed part of the evidentiary record.

9. The Appellant’s case throughout has been that the Settlement Agreement constituted a fresh contractual arrangement between the parties, amounting to novation of the earlier agreements and thereby superseding/cancelling the same. We find that a material error underlying the impugned judgment relates to the evidentiary status, and consequently the legal effect, of the Settlement Agreement. The record reflects that, notwithstanding the fact that the Appellant did not herself produce the original document in her evidence, the original Settlement Agreement was subsequently produced by Respondent No.1 during the course of evidence and was brought on record as Exh.PW-1/46. The Court inspected the original and recorded the endorsement “original seen and returned”, and the document was thus brought on the evidentiary record without any objection as to its production.

10. In these circumstances, the observation in the impugned judgment that the original Settlement Agreement had not been produced, and that for such reason no conclusive finding could be recorded regarding the document, does not appear to be borne out from the record. Once the original document had been produced before the Court and brought on record as Exh.PW-1/46, its evidentiary worth, authenticity and legal effect were required to be examined on their own merits, particularly when a specific issue had been framed as to whether the said Settlement Agreement and the accompanying receipts were fake, bogus or fabricated. The learned Single Judge, therefore, could not have left that material issue inconclusive merely on the premise that the original document was not before the Court.

11. Under Articles 72 and 73 of the Qanun-e-Shahadat Order, 1984, the contents of a document may be proved by primary evidence, and primary evidence means the document itself produced for the inspection of the Court. In the present case, once the original Settlement Agreement was produced before the Court, inspected and brought on record as Exh.PW-1/46, its existence and evidentiary status could not have been disregarded merely on the premise that the Appellant had not herself produced the original in her evidence. The learned Single Judge, therefore, fell into material error in proceeding on the assumption that the original document had not been produced and, on that basis, declining to record a conclusive finding upon an issue specifically framed with regard to its genuineness and effect.

12. There is yet another important dimension of the matter. Section 62 of the Contract Act, 1872, provides that where the parties to a contract agree to substitute a new contract for it, or to rescind or alter the original contract, the latter need not be performed. Thus, where a subsequent agreement is asserted to have substituted, rescinded or materially altered an earlier contractual arrangement, its execution, validity and legal effect assume fundamental importance in determining the subsisting rights and obligations of the parties. In a suit seeking specific performance, the Court must first ascertain which contractual arrangement governs the relationship between the parties before determining whether, and on what terms, specific performance can lawfully be granted.

13. In view of the specific issue framed regarding the Settlement Agreement and the connected receipts, coupled with the fact that the original agreement had been brought on record as Exh.PW-1/46, it was incumbent upon the learned Single Judge to return a definite finding thereon after evaluating the evidence available on record. Such determination necessarily required consideration of the genuineness and evidentiary worth of the said documents and, if found duly proved, their legal effect upon the earlier agreements in the context of Section 62 of the Contract Act, 1872. Only thereafter could it be determined which contractual arrangement governed the subsisting rights and obligations of the parties and whether either party was entitled to the relief of specific performance or any other consequential relief claimed in the respective suits.

14. We are, therefore, of the considered view that the failure to determine the aforesaid questions goes to the root of the controversy. The suits for specific performance could not appropriately be determined without first resolving which contractual arrangement governed the field. The finding of the learned Single Judge that no conclusive determination could be made regarding the Settlement Agreement because its original had not been produced is contradicted by the evidentiary record, which reflects that the original was produced and brought on record as Exh.PW-1/46. The consequential failure to examine its genuineness and legal effect has materially affected the adjudication of the consolidated suits and renders the impugned judgment and decree unsustainable.

15. At the same time, we deem it appropriate not to express any opinion on the genuineness of the Settlement Agreement, whether it in fact amounted to novation, rescission or alteration of the earlier agreements, or as to which party committed breach of its contractual obligations. Similarly, we refrain from recording any finding regarding payment of consideration, discharge of the ABL liabilities, possession or dispossession of the subject property, or the other disputed questions of fact raised by the parties. These matters require determination upon a holistic appraisal of the evidence already brought on record and are, therefore, best left to the Trial Court for fresh adjudication.

16. For the foregoing reasons, High Court Appeals Nos.170, 171 and 172 of 2019 are allowed. Consequently, the consolidated judgment and decree dated 12.02.2019 passed in Suits Nos.514 of 2004, 502 of 2004 and 1390 of 2004 are hereby set aside, and all three suits are remanded to the learned Trial Court for decision afresh. The learned Trial Court shall reconsider the issues already framed, particularly the issue concerning the Settlement Agreement dated 10.05.2004 and the connected receipts, and return definite findings as to their genuineness, evidentiary worth and legal effect, including the applicability of Section 62 of the Contract Act, 1872. Upon such determination, the learned Trial Court shall decide the respective claims of the parties afresh on the basis of the evidence and material already available on record, strictly in accordance with law. It is clarified that any observations made herein are confined to the disposal of these appeals and shall not influence the learned Trial Court while determining the respective claims and defences of the parties on merits.

17. Since the underlying suits pertain to the year 2004 and have remained pending for a considerable period, the learned Trial Court is directed to proceed with the matters expeditiously and make every endeavour to decide the same, preferably within a period of four (04) months from the date of receipt of a copy of this judgment. Unnecessary adjournments shall be discouraged, and the parties as well as their learned counsel shall extend full cooperation to the learned Trial Court to ensure expeditious disposal of the suits.

JUDGE

Naveed PA