MATLOOB ELLAHI PARACHA vs Raja ARSHAD MAHMOOD First Sched — 2024 PLD 663 SUPREME-COURT

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MATLOOB ELLAHI PARACHA VS Raja ARSHAD MAHMOOD First Sched., arts. 97 & 181---agreement to sell immoveable property, cancellation of---Earnest money paid, recovery of---First suit for specific performance of agreement to sell filed by plaintiff (vendee) was withdrawn---Plaintiff filed second suit for recovery of earnest money paid - Whether article 97 or 181 of the Limitation act, 1908 applied in the case of the second suit?---Held, that the only article which could have been applied, in the given circumstances of the present case, was article 97 of the Limitation act, 1908---This article deals with a suit "for money paid upon an existing consideration which afterwards fails"---Plain reading of said article dictates three ingredients for its applicability: firstly, the suit must be for money; secondly, such money must have been paid upon a consideration which was in existence at the time of the payment; and lastly, the said consideration must have afterwards failed---If all these ingredients are established, the application of article 97 cannot be resisted, and the starting point of limitation of three years under it would not be the date when the money was paid but when the consideration fails---all these three ingredients were fulfilled in this case---Payment of earnest money under the agreement to sell dated 20th of July, 2005, would fall within the meaning of the phrase "for money paid"---Money paid under the agreement was paid for "existing consideration"---Lastly facts stated by the plaintiff in the second suit show that the transaction did not fructify in a completed sale and thus the inevitable conclusion is that the consideration for which the money was paid was extinguished---Thus, all the three requirements of article 97 were fully met in the present case, and, that being so, the limitation for the plaintiff's second suit would rightly start from the date of failure of the consideration, and the second suit would be within time having been brought within three years of the date of the failure of the consideration, which in this case could be said to have failed only when the first suit was dismissed as withdrawn---appeal was allowed, and Trial Court was directed to decide the second suit of plaintiff on merits. Citation Name: 2024 PLD 663 SUPREME-COURTBookmark this Case MATLOOB ELLAHI PARACHA VS Raja ARSHAD MAHMOOD O. II, R.2---Suit to include the whole claim---Agreement to sell immoveable property, cancellation of---Earnest money paid, recovery of---First suit for specific performance of agreement to sell filed by plaintiff (vendee) was withdrawn---Plaintiff filed second suit for recovery of earnest money paid---Whether second suit was maintainable, and whether the cause of action in both suits was different?---Held, that cause of action in the second suit was not the same as in the first suit---First suit was brought alleging that the defendants (vendor and his attorney) illegally got cancelled the agreement to sell, and as such, the plaintiff claimed a decree for possession of the property by specific performance of the said agreement---Whereas the second suit of the plaintiff was based upon the allegations that the agreement to sell was cancelled by mutual consent of the parties, and it was agreed that the defendants would return the earnest money of Rs.5,000,000 to the plaintiff---In support of these allegations, the plaintiff relied on the statement of attorney of the vendor, which he recorded before the Deputy Registrar (Judicial) of the High Court, and the prayer of the plaint was for recovery of earnest money---This relief could not have been claimed by the plaintiff in his first suit for possession of the property by specific performance of the agreement to sell, because the right to possession accrues only when specific performance is decreed---Similarly, the right to refund of earnest money accrues only when specific performance is denied---As such, the facts relating to the denial of specific performance resulting from the cancellation of the agreement to sell, and the settlement agreement in the case constituted a fresh cause of action, and therefore, the second suit for recovery of money based thereon could not be held to be barred under Order II, Rule 2, C.P.C.---Appeal was allowed, and Trial Court was directed to decide the second suit of plaintiff on merits. Citation Name: 2024 PLD 663 SUPREME-COURTBookmark this Case MATLOOB ELLAHI PARACHA VS Raja ARSHAD MAHMOOD S. 12---Suit for specific performance of an agreement to sell immoveable property---Dismissal of suit---Earnest money paid, recovery of---Suitable amendments proposed by the Supreme Court in the Specific Relief Act, 1877 for refund of earnest money---In the present case the sale agreement was executed on 20th of July, 2005---After that, a suit for specific performance was instituted---Case continued until it was dismissed on 18th of November, 2013, after eight years of litigation---On 13th of February, 2014, the second round of litigation was brought by the plaintiff to recover earnest money, to which the cause of action arose after the dismissal of the first suit for specific performance, and has reached the Supreme Court in appeal 18 years after the agreement---In total, these two rounds of litigation, starting with the same agreement, had almost completed 19 years of litigation---Supreme Court observed that based on empirical study it is advisable to suggest that suitable amendments to the Specific Relief Act, 1877, be made so as to do away with such litigations and reduce the burden on the courts and on parties; that proposed amendments should provide for a provision by which any person suing for the specific performance of a contract for the transfer of immovable property, in appropriate cases, may ask for (i) possession or partition and separate possession, of the property in addition to such performance; or (ii) any other relief to which he is entitled, including the refund of any earnest money or deposit paid or made by him, in case his claim for specific performance is refused. Citation Name: 2024 PLD 663 SUPREME-COURTBookmark this Case MATLOOB ELLAHI PARACHA VS Raja ARSHAD MAHMOOD O. II, R.2---Suit to include the whole claim---Order II, Rule 2, C.P.C---Object and scope stated. Citation Name: 2024 PLD 663 SUPREME-COURTBookmark this Case MATLOOB ELLAHI PARACHA VS Raja ARSHAD MAHMOOD S. 3 & First Sched.---Periods of limitation provided in Articles under First Schedule to the Limitation Act, 1908---Interpretation---Law of limitation being a disabling provision, its various Articles are to be construed by its plain language.

MATLOOB ELLAHI PARACHA vs Raja ARSHAD MAHMOOD First Sched — 2024 PLD 663 SUPREME-COURT

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