IN THE HIGH COURT OF SINDH KARACHI
Suit No. 1447 of 2006
Order with signature of Judge
Mr. Zia-ul-Haq Makhdoom, advocate for the plaintiff.
Mr. Riaz Ahmed Bhatti, advocate for defendant No.2.
Date of hearing : 15.04.2013.
ORDER ON C.M.A. No. 2946 / 2012
NADEEM AKHTAR, J. – This application has been filed by defendant No.2 under Order VII Rule 11 CPC for rejection of the plaint, on the grounds that the same does not disclose any cause of action and the Suit is barred by law. This Suit has been filed by the plaintiff for specific performance and injunction against the defendants.
2. The subject matter of this Suit is Plot No.9, Survey No.1/2, situated in Defence Housing Scheme No.1, Malir Cantt., Karachi (‘the Suit property’), which was originally allotted on 30.04.2003 to defendant No.3, who sold it to defendant No.2 on 13.04.2004 through a registered General Power of Attorney. Thereafter on 09.05.2005, defendant No.2 sold the suit property to defendant No.1 through a registered General Power of Sub-Attorney. It is the case of the plaintiff that defendant No.1 executed an agreement to sell dated 16.09.2006, whereby he agreed to sell the suit property to the plaintiff in consideration of Rs.9,000,000.00. An advance part payment of Rs.1,500,000.00 was made by the plaintiff to defendant No.1, out of which Rs.1,200,000.00 was paid through a demand draft and Rs.300,000.00 was paid in cash. The balance amount was to be paid by the plaintiff on or before 30.09.2006 after clearance and verification of documents, and execution of a General Power of Sub-Attorney in favour of the plaintiff. In order to perform his agreed part of the contract, the plaintiff arranged a demand draft for the balance sale consideration of Rs.7,500,000.00, but defendant No.1 did not execute the requisite documents in favour of the plaintiff within the stipulated period. The plaintiff issued a legal notice to defendant No.1 on 10.10.2006 calling upon him to complete the sale in his favour, but defendant No.1 refused to do so. In the above background, this Suit was filed by the plaintiff on 11.11.2006 against defendant No.1 for specific performance of the agreement to sell dated 16.09.2006, and for permanent injunction jointly and severally against defendants 1 to 3 to restrain them from transferring, alienating, encumbering the suit property, or from creating third party interest therein.
3. An ad interim injunction order was passed on 13.11.2006 on the plaintiff’s injunction application, whereby the defendants were restrained from creating any third party interest in the suit property subject to depositing 25% of the balance sale consideration and furnishing tangible security for the remaining amount with the Nazir of this Court. The said order was complied with by the plaintiff by depositing Rs.2,000,000.00, and by furnishing security in the form of shares worth Rs.5,512,615.00. Accordingly, the ad interim injunction order was confirmed on 25.08.2008 till the disposal of the Suit.
4. This application for rejection of the plaint has been filed by defendant No.2 on two grounds ; namely, the plaint does not disclose any cause of action, and the Suit is barred by law. Defendant No.2 has averred that there is no privity of contract between him and the plaintiff, or between the plaintiff and defendant No.1. He has further averred that the registered General Power of Sub-Attorney dated 09.05.2005 executed by him in favour of defendant No.1 was revoked by him on 05.06.2006 through a registered Deed of Revocation, which was within the knowledge of defendant No.1. It has also been averred that an undertaking was executed by defendant No.1 on 24.09.2006 that he had terminated the agreement to sell dated 16.09.2006 in favour of the plaintiff ; and, the plaintiff had witnessed the said undertaking. Defendant No.2 has alleged that in view of the said revocation on 05.06.2006, defendant No.1 had no right or authority to execute the agreement to sell on 16.09.2006 in favour of the plaintiff. He has further alleged that forged, fabricated and fictitious documents were prepared by the plaintiff and defendant No.1 in collusion with one another, and this Suit is based on such documents. It has also been alleged that defendant No.1 never acquired the ownership and title of the Suit property, and as such the same could not be sold by him to the plaintiff.
5. Counter affidavit in reply to this application has been filed by the plaintiff, wherein all the assertions and allegations made by defendant No.2 have been denied. Defendant No.2 did not file his affidavit-in-rejoinder to the counter affidavit filed by the plaintiff.
6. Mr. Riaz Ahmed Bhatti, learned counsel for defendant No.2, contended that defendant No.2 had agreed to sell the suit property to defendant No.1, and defendant No.1 executed in his favour and delivered to him a cheque for Rs.3,000,000.00 towards the agreed sale consideration. However, the said cheque was dishonoured upon presentation. Due to this reason, defendant No.2 repudiated the sale, and through a registered Deed of Revocation dated 05.06.2006, he revoked the registered General Power of Sub-Attorney dated 09.05.2005 executed by him in favour of defendant No.1. According to the learned counsel, the original documents of the suit property and the original registered General Power of Sub-Attorney executed in favour of defendant No.1 by defendant No.2, were returned by defendant No.1. He submitted that no vested right in the suit property was ever created in favour of defendant No.1, and as such he had no locus standi to sell the suit property to the plaintiff. He argued that due to the above reasons, the agreement to sell between the plaintiff and defendant No.1 is void ab initio, and the plaintiff has no right whatsoever to seek specific performance of the said void agreement. It was urged that the Suit is barred under the Specific Relief Act, 1877, in view of his above submissions. According to the learned counsel, the plaint does not disclose any cause of action in view of the averments made therein. It was urged that the plaint is liable to be rejected on both these grounds. In support of his submissions, the learned counsel for defendant No.2 relied upon the cases of Haji Abdul Karim through attorney and 4 others V/S Messrs Florida Builders (Pvt.) Ltd. Karachi, 2009 YLR 451, and Muhammad Iqbal V/S Altaf Hussain and others, 2011 CLC 250.
7. The application was emphatically opposed by Mr. Zia-ul-Haq Makhdoom, the learned counsel for the plaintiff. At the very outset, he contended that the application is malafide, and has been filed by defendant No.2 only in order to usurp the suit property which he had already sold to defendant No.1. He further contended that before purchasing the suit property, the plaintiff invited objections through public notice in newspapers, but defendant No.2 did not come forward to object to the sale of the suit property ; the agreement for sale of the suit property between defendants 1 and 2 was never cancelled, as no document to this effect has been filed by defendant No.2 ; and, this fact alone is sufficient to show that the sale in favour of defendant No.1 by defendant No.2 was never repudiated. He argued that as the registered General Power of Sub-Attorney was admittedly executed in favour of defendant No.1 by defendant No.2 for consideration, the same could not be revoked unilaterally by defendant No.2 ; and, due to this reason, the purported Deed of Revocation is of no legal effect. The learned counsel pointed out that issues were settled in this Suit on 06.04.2009, and the matter is now at the stage of evidence. In the end, the learned counsel submitted that, in view of the valuable vested rights and interest of the plaintiff in the suit property, and the serious factual controversies involved in this matter, the dispute / Suit cannot be decided without evidence. In support of his submissions, learned counsel for the plaintiff cited and relied upon the cases of (1) Mst. Hajran Bibi and others V/S Suleman and others, 2003 SCMR 1555, (2) Abdul Rahim V/S Mukhtar Ahmed and 6 others, 2001 SCMR 1488, (3) Ashfaque Ahmed and 8 others V/S Nadeem Ahmed and 3 others, PLD 2006 Lahore 643, (4) Messrs FOSPAK (Private) Ltd. through Chief Executive V/S Fosroc International Limited and another, PLD 2011 Karachi 362, (5) Meer Hassan alias Ameer Hassan V/S Federation of Pakistan through Secretary Port and Shipping, 2009 YLR 1827, (6) Muhammad Tufail V/S Muhammad Younus and others, 2006 CLC 779, (7) Mst. Zakia Begum through legal heirs V/S Niaz Ahmed, 1999 MLD 3156 and (8) Tajuddin Khan V/S Habib Bank Ltd, and 3 others, 1998 CLC 563.
8. I have heard the learned counsel for the parties and have also perused the material available on record with their assistance. I shall first deal with the ground urged on behalf of defendant No.2 that the plaint does not disclose any cause of action. Without looking at any other material on record, I have examined the plaint in order to see whether it discloses any cause of action or not. A bare perusal of the plaint shows that the plaintiff has specifically pleaded therein that there was an agreement between him and defendant No.2 in respect of the suit property ; the sale consideration agreed by the parties and the part payments made by the plaintiff to defendant No.2 are disclosed in the plaint ; in order to show that he was ready and willing to perform his agreed part of the contract, the plaintiff has stated that he arranged a demand draft in favour of defendant No.2 for the balance sale consideration ; he has also specified the conditions on which the completion of the sale was dependent, and has pleaded that defendant No.2 committed breach of the agreement as he did not fulfill the said conditions ; it has also been stated that defendant No.2 was called upon by the plaintiff through a legal notice to complete the sale ; and finally, the plaintiff has alleged that defendant No.2 neglected and avoided to complete the sale in his favour despite all his efforts. It is well-settled that for the purpose of rejection of the plaint, the averments and allegations made in the plaint are to be examined, and if upon a bare perusal thereof and assuming the same to be correct, a cause of action is spelt out from the plaint, it cannot be rejected. The accompaniments of the plaint and other undisputed material on record can also be looked into for this purpose. In Pakistan Agricultural Storage and Services Corporation LTD. V/S Mian Abdul Latif and others, PLD 2008 Supreme Court 371, the Hon’ble Supreme Court was pleased to hold that the term ‘cause of action’ represents all the requisites and facts which are necessary for the plaintiff to prove before he can succeed in a Suit. In the instant case, the plaintiff has pleaded all such facts and has made all such allegations in the plaint, which are required to be pleaded and made in a Suit for specific performance of an immovable property. It is also well-settled that where a cause of action is disclosed, the question as to whether the plaintiff will be able to prove it, is irrelevant for deciding an application for rejection of the plaint. In my humble opinion, on appreciation of the averments and allegations made in the plaint and the documents annexed therewith, it cannot be concluded that the plaint does not disclose a cause of action. Therefore, the plaint cannot be rejected on this ground.
9. The second ground on which defendant No.2 has sought rejection of the plaint is that the Suit is barred by law. The main thrust of the arguments of the defendant No.2’s learned counsel was that the agreement on the basis of which this Suit has been filed, is void ab initio, as defendant No.1 had no locus standi to execute the same in favour of the plaintiff in view of the registered Deed of Revocation executed by defendant No.2 prior to the said agreement. Defendant No.2 has alleged that the sale in favour of defendant No.1 was repudiated by him and the registered General Power of Sub-Attorney was revoked by him, because the cheque issued by defendant No.1 in his favour towards the agreed sale consideration was dishonoured upon presentation. Thus, defendant No.2 has admitted that the agreement for sale of the suit property and the registered General Power of Sub-Attorney were executed by him for consideration in favour of defendant No.1. In the above context, the following cases relied upon by the learned counsel for the plaintiff are briefly discussed below :
A. In the case of Mst. Hajran Bibi (supra), the Hon’ble Supreme Court was pleased to hold that as the registered general power of attorney was coupled with interest, the same was irrevocable by virtue of Section 202 of the Contract Act, 1872.
B. Similar view was taken by the Hon’ble Supreme Court in the case of Abdul Rahim (supra), that where the principal had received certain payment and executed the power of attorney, such power of attorney was irrevocable.
C. In Messrs FOSPAK (Private) Ltd. (supra), a learned Division Bench of this Court was pleased to hold that if a person agrees to sell his immovable property to another, and pending finalization of the transaction, executes a power of attorney in his favour in respect of the property, the power of attorney would not be revocable and would be protected by Section 202 of the Contract Act, 1872.
D. In the case of Ashfaque Ahmed (supra), it was held by a learned Division Bench of the Lahore High Court that the General Power of Attorney could not be revoked unilaterally in view of the provisions of Section 202 of the Contract Act, 1872, as price had been received. The case of Muhammad Tufail (supra) was also discussed in the cited authority, wherein it was held that the mere fact that Abtaal Nama was registered is of no consequence because there was nothing on record to show that the donee was given any intimation about the cancellation of Power of Attorney.
10. In view of the law laid down in the above authorities, the contention of the learned counsel for the plaintiff appears to be correct that defendant No.2 could not unilaterally revoke the registered General Power of Sub-Attorney granted by him in favour of defendant No.1 for consideration, and the mere fact that the Deed of Revocation is a registered document is of no consequence, as there is nothing on record to show that defendant No.1 was given any intimation about the said revocation. I am of the view that the circumstances alleged by defendant No.2 for the revocation of the registered General Power of Sub-Attorney are also of no consequence ; firstly, as the cheque towards the agreed sale consideration was admittedly received by defendant No.2 from defendant No.1, and secondly, as the question about the alleged dishonouring of the said cheque cannot be decided without evidence. It is to be noted that defendant No.2 has alleged that the agreement to sell dated 16.09.2006 in favour of the plaintiff was terminated by defendant No.1 on 24.09.2006. It is the case of defendant No.2 that he had already revoked the defendant No.1’s registered General Power of Sub-Attorney on 05.06.2006, that is, before execution of the agreement to sell dated 16.09.2006, and also before 24.09.2006 when the said agreement was purportedly terminated. Despite this admitted position, defendant No.2 on the one hand has disputed the agreement to sell dated 16.09.2006 on the ground that defendant No.1 had no locus standi to execute the same, but on the other hand has relied upon the document dated 24.09.2006 by claiming that the same was executed by defendant No.1 in order to cancel the said agreement. In my view, this stance taken by defendant No.2 is self-contradictory.
11. Defendant No.2 has alleged that this Suit has been filed by the plaintiff in collusion with defendant No.1 on the basis of forged, fabricated and fictitious documents ; the cheque issued by defendant No.1 towards the agreed sale consideration of the suit property was dishonoured upon presentation ; due to this reason, defendant No.2 repudiated the sale of the suit property between himself and defendant No.1, and revoked the General Power of Sub-Attorney granted by him in favour of defendant No.1 ; and, defendant No.1 had no locus standi to enter into the agreement with the plaintiff for the sale of the suit property. On the basis of the pleadings of the parties, following issues were settled by the Court on 06.04.2009 :
“1. Whether the plaintiff has no locus standi to file the instant Suit ?
2. Whether the documents, on the basis of which Suit for specific performance is filed, is forged and/or fabricated as to what consequences ?
3. Whether the Sub-Power of Attorney purportedly executed by the defendant No.2 in favour of defendant No.1 was already revoked on 5/6/2006 within the knowledge of defendant No.1 ? If so, to what effect ?
4. Whether the sale agreement dated 16/9/2006 is capable of specific performance ? If so, to what effect ?
5. Whether the purported sale agreement was terminated through undertaking dated 24/9/2006 ? If so, its effect ?
6. What should the judgment and decree be ?”
12. The allegations and counter allegations by the parties clearly indicate that they are at variance on questions of fact which cannot be resolved without recording their respective evidence. In my humble opinion, the plaint cannot be rejected in these circumstances without affording opportunity to the parties to adduce evidence and without providing them chance of hearing, especially when issues were settled by the Court in this Suit on 06.04.2009, which directly relate to the grounds urged by defendant No.2 in the instant application. This view expressed by me is supported by (1) Q.B.E. Insurance (International) Ltd. V/S Jaffar Flour and Oil Mills Ltd. and others, 2008 SCMR 1037, (2) Mst. Karim Bibi and others V/S Zubair and others, 1993 SCMR 2039, (3) Muhammad Younis Arvi V/S Muhammad Aslam and 16 others, 2012 CLC 1445 (Supreme Court AJ&K) and (4) Muhammad Afzal V/S Muhammad Manzoor and 40 others, 2013 YLR 85 (Supreme Court AJ&K).
13. Keeping in view the settled law that a person seeking specific performance of contract has to show his readiness and willingness to perform his agreed part of the contract, the fact that the plaintiff has deposited the entire balance sale consideration with the Nazir in compliance of this Court’s order, cannot be ignored. In view of my findings that the plaint discloses a cause of action and it cannot be rejected, the Single Bench cases of this Court relied upon by the learned counsel for defendant No.2, are not applicable in this case. In any event, the said cases are not binding on me.
In view of the above discussion, C.M.A. No. 2946 of 2012 filed by defendant No.2 is dismissed with no order as to costs. It is, however, clarified that the observations made and the findings contained in this order, which are tentative in nature, shall not prejudice the case of any of the parties, and the Suit shall be decided on merits strictly in accordance with law.
J U D G E