Summary: The case involves two cross appeals arising from a dispute over an alleged oral agreement for the sale of a plot in Islamabad. The appellant (Syed Zaheer Hussain Naqvi) initially filed a suit for specific performance, seeking enforcement of an alleged oral agreement with the respondent (Asif Raza Mir) for the sale of a property. The trial court dismissed the suit, finding that the oral agreement lacked sufficient evidence. However, it ordered the respondent to refund a sum of Rs. 2.8 million to the appellant. Naqvi appealed the dismissal, while Mir appealed the refund order. ----- Issues: ----- 1) Whether an oral agreement to sell, allegedly supported by receipts and partial payments, was legally enforceable. ----- 2) Whether the defendant was liable to refund the payments made by the plaintiff, including any markup or interest. ----- Holding/Reasoning/Outcome: RFA 201 of 2004: The court dismissed the appeal, affirming the trial court’s finding that the oral agreement lacked credible evidence. Key points included: The plaintiff failed to produce any corroborating witnesses or written proof of the alleged terms. Only two receipts (Ex.P3 and Ex.P12) purportedly outlined the agreement's terms, but they were not verified by witnesses, rendering them inadmissible as per the Qanun-e-Shahadat Order, 1984. The court highlighted that under Section 29 of the Contract Act, 1872, contracts with uncertain terms are unenforceable. Previous judgments established that oral agreements require clear details of time, place, and witnesses, which were absent here. RFA 193 of 2005: The court dismissed the defendant’s appeal and upheld the refund order, but modified the trial court’s decision regarding interest. Key points included: Since the defendant admitted to receiving the payments without a written agreement, the court ruled that retaining the funds without providing the agreed property would be unjust enrichment, triggering an obligation to return the money under Section 70 of the Contract Act. The court awarded the appellant compensation at a compound interest rate based on KIBOR (Karachi Interbank Offered Rate), recognizing the long period the defendant held the money and the opportunity cost lost by the plaintiff. ----- Outcome: The court dismissed both appeals. The plaintiff’s suit for specific performance was denied, but he was awarded a refund with compounded interest, calculated at KIBOR, amounting to Rs. 16,901,525, payable within 30 days, with additional daily interest of Rs. 6,603 if delayed. ----- Citations/Precedents: Moiz Abbas vs. Mrs. Latifa (2019 SCMR 74): Requirements for proving oral agreements, including witness and corroborative evidence. Raja Nasir Khan vs. Abdul Sattar Khan (PLD 1998 Lahore 20): On the need for explicit forfeiture terms in agreements. Muhammad Ashiq Khan vs. Muhammad Sharif (2016 SCMR 1248): On restitution and compensation for lost opportunity costs. Terni S.P.A. vs. PECO (Pakistan Engineering Company) Ltd. (1992 SCMR 2238): Interest awards in the absence of explicit contract terms for pre-suit periods.

Summary: Section 2(d) Of The Contract Act, 1872Section 42 & 54 of The Specific Relief Act, 1877(a) Consideration for a transaction may not always be money changing hands.(b) A Court of facts cannot steal eyes from peculiar nature of a transaction due to which a party attest mutation in favour of another.

Summary: (a) Specific Relief – Specific Performance of Contract ---- Specific Relief Act, 1877, Ss. 12, 22 & 24(b) Specific performance is a discretionary relief—A party seeking specific performance must demonstrate its readiness, willingness, and ability to perform contractual obligations—Failure to deposit balance sale consideration despite multiple court directives disentitles the claimant—Plaintiff's failure to comply with court orders under Order XVII Rule 3, CPC, led to dismissal of the suit—Reliance placed on Haji Abdul Hameed Khan v. Ghulam Rabbani (2003 SCMR 953), Adil Tiwana v. Shaukat Ullah Khan Bangash (2015 SCMR 828), Muhammad Wahid v. Nasrullah (2016 SCMR 179), Hamood Mehmood v. Mst. Shabana Ishaque (2017 SCMR 2022). (b) Civil Procedure – Order XVII Rule 3, CPC ---- Non-compliance with court orders—Court directed the plaintiff to deposit balance sale consideration—Failure to do so despite multiple extensions led to immediate dismissal of the suit—Court exercised its discretion under Order XVII Rule 3, CPC—Plaintiff’s failure to deposit the amount evidenced incapability to perform contractual obligations—Reliance placed on Syed Tahir Hussain Mehmoodi v. Agha Syed Liaqat Ali (2014 SCMR 637). (c) Contract Law – Time as Essence of Contract ---- Specific performance and contractual obligations—Where an agreement explicitly provides penal consequences for non-performance within a prescribed time, the court may consider time as the essence of the contract—Forfeiture of earnest money enforceable where contractual terms permit—Reliance placed on Mst. Samina Riffat v. Rohail Asghar (2021 SCMR 7). (d) Discretionary Nature of Specific Performance ---- The court is not bound to grant specific performance merely because it is lawful to do so—Plaintiff must show continuous compliance with contractual obligations and establish financial capability to fulfill the agreement—Failure to seek permission to deposit balance consideration or provide financial security raises a rebuttable presumption against the plaintiff’s intent and capability—Reliance placed on Kuwait National Real Estate Company (Pvt.) Ltd. v. Educational Excellence Ltd. (2020 SCMR 171), Muhammad Asif Awan v. Dawood Khan (2021 SCMR 1270). (e) Forfeiture of Earnest Money – Enforceability ---- Where the contract prescribes forfeiture of earnest money in case of non-compliance, courts may enforce such a provision—Claim for specific performance cannot be maintained if a party has violated an essential term of the contract—Reliance placed on Abdul Hamid v. Abbas Bhai-Abdul Hussain (PLD 1959 (W.P.) Karachi 629). Disposition: Appeal dismissed—Judgment and decree of the Civil Court upheld—Plaintiffs directed to pay Rs. 25,000 as costs to respondents within 30 days. Cited Cases: Haji Abdul Hameed Khan v. Ghulam Rabbani (2003 SCMR 953) Adil Tiwana v. Shaukat Ullah Khan Bangash (2015 SCMR 828) Muhammad Wahid v. Nasrullah (2016 SCMR 179) Hamood Mehmood v. Mst. Shabana Ishaque (2017 SCMR 2022) Syed Tahir Hussain Mehmoodi v. Agha Syed Liaqat Ali (2014 SCMR 637) Mst. Samina Riffat v. Rohail Asghar (2021 SCMR 7) Kuwait National Real Estate Company (Pvt.) Ltd. v. Educational Excellence Ltd. (2020 SCMR 171) Muhammad Asif Awan v. Dawood Khan (2021 SCMR 1270) Abdul Hamid v. Abbas Bhai-Abdul Hussain (PLD 1959 (W.P.) Karachi 629)

Summary: [(1) Applicability of Article 113 and Section 3 of the Limitation Act. (2) Conditions for Novation of Contract in terms of Section 62 of the Contract Act, 1872.] [''Novation is a legal concept that allows parties to substitute a new contract for an existing one, thereby altering their rights and obligations. This comprehensive guide aims to provide a clear understanding of novation in contract law, including its definition, elements, and implications----(6)Elements of Novation: Agreement between the Parties, Extinction of the Original Contract, Consideration, Legal Capacity, Consent of all Parties. Types of Novation: Novation by Substitution of Parties, Novation by Substitution of Obligations, Novation by Substitution of Contracts. Implications of Novation: Discharge of the Original Contract, Creation of a New Contractual Relationship, Alteration of Rights and Obligations, Legal Consequences.'' ]The petitioner had filed a suit seeking specific performance of a contract dated 30th June 2001 related to a property against the respondents. Simultaneously, the respondents had filed their own suit for the recovery of possession of the same property from the petitioner. Both suits were consolidated, and after due process, the Trial Court dismissed the petitioner's specific performance suit and decreed the suit filed by the respondents for recovery of possession. Appeals against this judgment were also dismissed by the Appellate Court.The petitioner argued that the lower courts misread and did not consider some crucial evidence. They contended that the Trial Court erroneously treated the matter as time-barred under Article 113 of the Limitation Act. Additionally, the petitioner claimed that after the death of Rashid Pervaiz (one of the parties to the agreement) before the expiration of the agreement's time, the sale deed could not be executed without obtaining a guardianship certificate for the minor legal heirs. Therefore, with the consent of the major legal heirs, the time for performance was extended, which amounted to a novation of the contract. Hence, the suit should not have been dismissed based on the original time fixed in the agreement.The Supreme Court, after careful consideration, rejected the petitioner's arguments. The Court clarified that Article 113 of the Limitation Act has two parts: one pertaining to cases where a specific date is fixed for performance in the agreement, and the other for cases where no specific date is predetermined. The Court ruled that the right to sue accrues either from the specific date or from the date when the plaintiff becomes aware of the refusal to perform.Regarding the plea of novation of the contract, the Court explained the requirements for a valid novation under Section 62 of the Contract Act. The Court found that there was no evidence of any understanding or agreement for novation, and the petitioner failed to establish the substitution of a new contract in place of the old one.In conclusion, the Supreme Court found no merit in the petitioner's arguments and upheld the judgments of the lower courts, dismissing the Civil Petitions and declining to grant leave to appeal. Civil Petitions were dismissed.

Summary: Background: A murder case led to the registration of an FIR against an individual who was subsequently arrested. To resolve the matter, a village Panchayat mediated a compromise. The Panchayat decided that the accused's family would offer his daughter in marriage to the victim's family and, failing that, a penalty of Rs. 1,000,000 would be imposed on the petitioner. The petitioner issued a cheque as a security for the penalty, but it bounced. The victim’s family sought legal action under Section 489-F of the Pakistan Penal Code (dishonest issuance of a cheque). The Ex-Officio Justice of Peace directed the police to register an FIR under Section 489-F. The petitioner challenged this directive under Article 199 of the Constitution. -----Issues: 1- Can a Panchayat legally enforce a compromise requiring marriage or financial penalties? -----2- Is a cheque issued as part of such an agreement valid and enforceable under the law? -----3- Did the Ex-Officio Justice of Peace act lawfully in ordering the registration of an FIR? -----Holding/Reasoning/Outcome: --Custom of Vani/Swara is illegal and un-Islamic: The compromise enforced by the Panchayat was deemed void ab initio as it violated constitutional and Islamic principles. The practice of giving women in marriage as a form of dispute resolution (vani/swara) is un-Islamic, unconstitutional, and criminalized under Section 310-A of the Pakistan Penal Code. --Invalidity of the cheque: The cheque issued under the unlawful compromise was void under Section 24 of the Contract Act, 1872, as its consideration was illegal and against public policy. As a result, the cheque could not form the basis of a civil or criminal case. --Registration of FIR under Section 489-F was not justified: Since the cheque and its underlying agreement were void, initiating criminal proceedings under Section 489-F was legally untenable. --Improper conduct by the Ex-Officio Justice of Peace: The Ex-Officio Justice of Peace failed to consider the facts and the illegality of the compromise before directing the registration of an FIR. The petition was accepted, and the directive of the Ex-Officio Justice of Peace to register an FIR was set aside. -----Citations/Precedents: International Instruments: Universal Declaration of Human Rights (UDHR), Articles 1 & 2. Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW), 1979. Declaration on the Elimination of Violence Against Women (DEVAW), 1993. Constitution of Pakistan (1973): Article 8(1): Declares customs and laws inconsistent with Fundamental Rights void. Article 25: Guarantees equality before the law and prohibits discrimination on the basis of sex. Article 14: Protects the dignity of individuals. Article 34: Promotes full participation of women in all spheres of life. Article 36: Protects women, children, and families. Judicial Precedents: Atif Zareef v. The State (PLD 2021 SC 550): The right to dignity is inviolable and non-negotiable. Mst. Sakeena Bibi (PLD 2022 FSC 57): Declared vani/swara practices un-Islamic. National Commission on Status of Women v. Government of Pakistan (PLD 2019 SC 218): Jirgas/Panchayats cannot make arbitrary decisions violating fundamental rights. Muhammad Siddique v. The State (PLD 2002 Lah. 444): Customs inconsistent with law and civil society values are invalid. Hasnain Akhtar v. Justice of Peace (2015 YLR 2294): Panchayats cannot resolve criminal cases or bypass the legal process. Cooper et al. v. Aaron (358 U.S. 1, 1958): Local customs must yield to constitutional principles. Legislation: Section 310-A, Pakistan Penal Code: Criminalizes vani/swara with penalties of imprisonment and fine. Section 24, Contract Act, 1872: Invalidates agreements based on unlawful consideration.

Summary: the respondent, after initiating suit related to the subject matter of the arbitration agreement and then abandoning it, could not unilaterally resort to arbitration without following the prescribed procedure---115 CPC revisional jurisdiction should only be exercised in specific circumstances, such as when a subordinate court exceeded its jurisdiction or acted illegally.---The petitioner contended that an appeal should be allowed even though the original orders had been set aside. This was based on a reference to a previous legal case. The respondent parties presented differing views on whether the petition should be converted into an appeal. The Court ultimately allowed the petition to be converted into an appeal since it was filed within the prescribed period.The case revolved around the validity of an arbitration agreement. The appellant, the petitioner in this case, had challenged the enforceability of the agreement and the subsequent arbitration proceedings. The appellant's argument was that the respondent had initiated court proceedings and abandoned them, which barred them from unilaterally resorting to arbitration.The High Court judge's judgment held that the respondent had not been barred from initiating arbitration proceedings after abandoning the court case. However, the judge's interpretation of the law was deemed incorrect by the Supreme Court. The Supreme Court ruled that the respondent, having initiated a court suit related to the subject matter of the arbitration agreement and then abandoning it, could not unilaterally resort to arbitration without following the prescribed procedure.Furthermore, the Supreme Court found issues with the High Court judge's exercise of revisional powers under section 115 of the Code of Civil Procedure. The Court emphasized that revisional jurisdiction should only be exercised in specific circumstances, such as when a subordinate court exceeded its jurisdiction or acted illegally. The Court found that the questions framed by the High Court were not suitable for consideration in a revision, and thus, the judgment could not be sustained.Additionally, the Supreme Court commented on the Arbitrator's Award, highlighting concerns about the haste with which it was made and the lack of due process. The Court concluded by allowing the appeal and setting aside the High Court's judgment.

Summary: The main issues were whether a mutual mistake of fact existed between the parties, whether a money decree could be granted despite not being explicitly prayed for in the plaint, whether a report from a local commission justified the money decree, and whether the suit was barred by limitation.The court analyzed the concept of mutual mistake of fact, stating that it renders an agreement void under the Contract Act 1872. The court outlined the conditions necessary for such a mistake, including the fundamental nature of the mistake and its impact on the contract. The court emphasized that both parties must be under the same misconception about an essential fact for the agreement to be void.In this case, the court determined that a mutual mistake existed regarding the area of land being sold. The court held that this mistake was essential to the contract, and the buyer would not have paid the price had the mistake been known. Therefore, the court concluded that the transaction related to the deficient land was void under section 20 of the Contract Act 1872.Regarding the money decree, the court discussed its authority to grant relief not specifically prayed for in the plaint. It referred to previous cases and established that the court has the power to mold relief within the scope of the provisions of the Code of Civil Procedure. In this case, the court ruled that the money decree was permissible given the circumstances and findings.The court also considered the report of the local commission, which showed the mistake in land measurements. The court clarified that the report was used to ascertain facts, not legal entitlements, and supported the lower courts' decisions.Lastly, the court addressed the issue of limitation. It determined that the cause of action for the claim arose when the mutual mistake of fact was discovered, and not earlier when the transaction took place. Therefore, the court held that the money decree issued by the trial court was within the limitation period.In conclusion, the Supreme Court of Pakistan upheld the lower courts' decisions, dismissing the appeal based on its legal analysis of mutual mistake, relief molding, the local commission's report, and the application of the limitation period

Summary: Benami Transactions---appeal allowed--The case revolved around a dispute concerning land transfer. The appellant claimed that a compromise and statement were made before the Trial Court in a prior case titled "Allah Bakhsh versus Abdul Hameed" on 11.03.2002, in which two acres of land were to be transferred to each of the three brothers, including the appellant. The defendant, Abdul Hameed, denied this compromise and statement and refused to transfer the land.The trial court dismissed the appellant's suit for declaration, a decision upheld by the district court and the Lahore High Court. However, the Supreme Court found that the lower courts had not properly considered the evidence, including a registered document (Hibba Nama) and its reference to the earlier compromise. The Supreme Court noted that the presumption of correctness attached to registered documents, along with the absence of any challenge to the document's authenticity, supported the appellant's case.The Supreme Court concluded that the appellant's suit was competent under section 42 of the Specific Relief Act for a declaration of title. It set aside the judgments of the lower courts and decreed the suit in favor of the appellant. The appeal was allowed.

Summary: (a) Qanun-e-Shahadat (10 of 1984)-------Arts. 79 & 115---Specific Relief Act (I of 1877), S. 42---Landlord---Title of landlordchallenged--- Relationship---Agreement, proof of---Suit for declaration/ cancellation ofmutation entries, permanent injunctions--- Concurrent dismissal---Petitioner/plaintiffcontended that he had purchased suit house from predecessor of respondents/ co-sharer videsale agreement with payment of half of the stipulated consideration while the mutation wasagreed to be transferred on payment of remaining amount; that petitioner continued payingmonthly rent to the predecessor; that after demise of predecessor, his brother despiteknowledge of sale deed had fraudulently mutated the house in his name and consequentlysold the same---Validity---Petitioner's witnesses did not prove their presence at the time ofexecution of agreement/payment to the predecessor of respondent---No evidence regardingpayment---Suit was filed as an attempt to extend illegal stay in suit house by taking shield offake/fabricated document having no legal value---Petitioner failed to satisfy that anagreement to sell the suit house by one co-sharer in absence of other co-sharers could validlymake out case for transfer of entire un-divided property to another person---No question ofthe specific performance of the alleged agreement---Petitioner admitted that he was inductedas tenant by making payment of rent for many years---Petitioner could not challenge the titleof the landlord without first surrendering the possession to him---Revision petition wasdismissed accordingly.(b) Constitution of Pakistan-------Art. 199---Revisional jurisdiction---Concurrent findings of courts below---Scope---Courtcould not go beyond concurrent findings of the fact unless it could be shown that same wereillegal; unlawful; based on the misapplication of relevant legal provisions; shocking;perverse; artificial; fanciful; so patently improbable that accepting the same could amount toperpetuating grave miscarriage of justice; or if there had been any misapplication of principlerelating to appreciation of evidence; or if the finding could be demonstrated to be physicallyimpossible.

Summary: (a) Civil Procedure Code (V of 1908) ---- S. 100 --- Second appeal --- Scope and limitations --- Interference by High Court --- When warranted --- Petitioner challenged the concurrent findings of the first Appellate Court and the High Court in a second appeal, alleging misreading and non-reading of evidence --- Held, that under S. 100, C.P.C., second appeal can only be entertained on substantial questions of law, such as when the decision is contrary to law, involves failure to determine a material issue, or suffers from procedural defects --- High Court, in the instant case, properly evaluated the evidence and found no legal infirmity in the first Appellate Court's findings --- Supreme Court held that when there is inconsistency between the trial court and the appellate court, the latter's findings are to be preferred in the absence of cogent reasons to the contrary --- Appeal dismissed. Cited Cases: Madan Gopal v. Maran Bepari (PLD 1969 SC 617) Amjad Ikram v. Mst. Asiya Kausar (2015 SCMR 1) (b) Specific Relief Act (I of 1877) ---- S. 27(b) --- Specific performance --- Bona fide purchaser for value without notice --- Burden of proof --- Respondent filed a suit for specific performance of an agreement to sell, which was dismissed by the trial court but decreed by the appellate court and upheld by the High Court --- Appellant No.1, who subsequently acquired the property through an oral sale from his sister (Appellant No.2), claimed to be a bona fide purchaser without notice of the earlier agreement --- Held, that the burden of proving good faith and absence of notice rests upon the subsequent purchaser, who must establish that he acted with due diligence and inquired about prior encumbrances --- Mere relationship between vendor and purchaser (real brother and sister) raises a presumption of knowledge about prior transactions --- Transfer of property by Appellant No.2 to Appellant No.1, just before the cut-off date for performance under the agreement, was a calculated attempt to frustrate the respondent's claim --- Supreme Court held that the transaction was not bona fide and was aimed at depriving the respondent of his contractual rights. Cited Cases: Hafiz Tassaduq Hussain v. Lal Khatoon (PLD 2011 SC 296) R. K. Mohammed Ubaidullah v. Hajee C. Abdul Wahab (AIR 2001 SC 1658) (c) Transfer of Property Act (IV of 1882) ---- S. 3 --- Notice --- Willful abstention from inquiry --- Effect --- A purchaser is deemed to have notice of a prior transaction if he willfully abstains from making reasonable inquiries about the property --- Supreme Court observed that Appellant No.1, being the real brother of Appellant No.2, could not claim ignorance of the prior agreement --- Absence of inquiry into possession, revenue records, and the vendor’s past dealings amounted to willful negligence --- Supreme Court reiterated that a person who deliberately avoids an inquiry is presumed to have notice of prior claims. (d) Administration of Justice ---- Misreading and non-reading of evidence --- Findings of first Appellate Court and High Court --- Supreme Court upheld the findings of the first Appellate Court and High Court, holding that both courts had properly assessed the evidence and reached a just conclusion --- The conduct of the appellants in executing an oral sale to frustrate the earlier contract was dubious and aimed at creating a false plea of bona fide purchase --- Supreme Court declined to interfere with the High Court’s judgment and dismissed the appeal. Disposition: Appeal dismissed. Judgment of the High Court and first Appellate Court upheld. Suit for specific performance maintained.