Specific Performance is an Equitable Remedy, requiring clean hands and Good Faith from all Parties --- Lahore High Court, Lahore
Islamabad, 22-11-2024: In a significant judgment, the Lahore High Court, Multan Bench, disposed of two appeals [RFA No.267/2019] and [RFA No.270/2019], affirming the decree for specific performance of a land sale agreement. The case revolved around allegations of fraud, evidentiary discrepancies, and the equitable application of property law.
The appeals arose from a property dispute between Nasir Ahmad (Appellant) and Amanullah Khan and others (Respondents) concerning a sale agreement for land measuring 15 kanal 17 marla in Multan. The appellant alleged that the agreement was fraudulent, executed under misuse of blank signed papers given to the respondent in his capacity as a special attorney. In contrast, the respondents claimed the agreement was genuine and substantial payments had been made.
The Trial Court had dismissed the appellant’s suit for declaration and injunction while decreeing the respondents’ suit for specific performance of the agreement.
The Court upheld the agreement’s validity, finding that the appellant’s allegations of fraud were unsupported by credible evidence. The appellant failed to meet the legal standard under Order VI Rule 4 of the CPC, 1908, which requires detailed particulars for fraud claims.
While receipts for part consideration (Exh.D2, Exh.D3, Exh.D4) were not conclusively proved, the Court recognized a payment of $42,000 through the appellant’s bank account. The appellant’s use of these funds without objection was treated as substantial performance of the agreement.
Applying Section 22 of the Specific Relief Act, 1877, the Court emphasized its discretionary jurisdiction to decree specific performance. It found the respondents had demonstrated consistent readiness to fulfill their obligations, including depositing the balance sale consideration.
The decree was clarified to operate only to the extent of the appellant’s share in the jointly owned property, subject to partition proceedings.
The Court reaffirmed that specific performance is an equitable remedy, requiring clean hands and good faith from all parties. It also drew adverse inferences against the appellant for his lack of cooperation in forensic verification of disputed receipts.
The Lahore High Court upheld the Trial Court’s decree with modifications:
- The respondents were directed to deposit Rs.45,500,000 within two months as part of the balance consideration.
- The decree would apply only to the appellant’s share in the property.
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