ISLAMABAD(National Times)- The Supreme Court has sounded a note of caution for lower courts while adjudicating property disputes, highlighting that unlike a bygone era when real estate values appreciated at a snail’s pace, the contemporary reality was one of rapid and often exponential escalation in property prices.
Therefore, while dealing with property disputes, courts must interpret agreements concerning property in light of current economic realities, Justice Miangul Hassan Aurangzeb suggested in a judgement.
The observation came while deciding a civil appeal and upholding the Lahore High Court’s (LHC) March 4, 2020, decision rejecting a suit for specific performance filed by a Sialkot-based purchaser, Amjad Javed, against property seller Maqsood Ahmad.
A two-judge bench comprising Justices Shakeel Ahmad and Aurangzeb, while dismissing the purchaser’s appeal, also ruled that a buyer who failed to pay the balance sale consideration within the agreed timeframe could not seek enforcement of a property agreement.
The dispute concerns a property in Revenue Estate Urban Chowinda in Pasrur tehsil of Sialkot district. Under an agreement executed on March 11, 2014, Mr Javed paid Rs800,000 as earnest money, while the remaining Rs6.48 million was to be paid by July 27, 2014. The agreement explicitly stated that failure to pay within the stipulated period would result in forfeiture of the earnest money.
The SC noted that as the appellant did not deposit the balance amount of Rs6.4m despite being granted two opportunities, the trial court turned down his request for a further extension of time.
On Jan 20, 2015, the trial court, by invoking Order XVII, Rule 3 of the Code of Civil Procedure, 1908, dismissed the appellant’s suit for specific performance of the agreement.
Specific performance
In his judgement, Justice Aurangzeb emphasised that a plaintiff seeking the equitable remedy of specific performance must always be ready, willing and able to perform his part of the contract.
“If a plaintiff does not deposit the balance sale consideration within the time stipulated by the trial court, the presumption would be that the plaintiff was not serious in prosecuting his remedy,” he added.
A suit for specific performance must conform to the requirements set out in Forms 47 and 48 of the Code of Civil Procedure’s First Schedule.
Form 47 requires the plaintiff or seller in a suit for specific performance to plead that he “has been and still is ready and willing specifically to perform the agreement on his part of which the defendant has had notice”.
Form 48 requires the plaintiff or purchaser to plead that he “is still ready and willing to pay the purchase money of the said property to the defendant”.
“Although the petitioner has pleaded that he is ready and able to pay the balance sale consideration, his failure to comply with the direction for the deposit of the balance sale consideration ipso facto renders him without a cause of action to seek the relief of specific performance,” the verdict stated.
“The appellant’s conduct suggests speculative litigation and abuse of equitable jurisdiction,” it added.
“The appellant had filed the suit for specific performance with no intention to pay the balance sale consideration to the respondents or deposit the same in the court.”
The SC noted that the appellant’s failure to comply with court directions to deposit the balance amount demonstrated a lack of readiness and willingness to pay the balance sale consideration.
The judgement said that the deposit of the balance sale consideration of Rs6.4m on Jan 24, 2018, (almost three and a half years after the date fixed in the agreement for such payment), did not, in any way, improve the appellant’s case, as the contractual deadline for making the payment had long passed.
