2018 SCMR 1586 SUPREME-COURT

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Haji BAZ MUHAMMAD KHAN VS NOOR ALI S. 12---Contract Act (IX of 1872), S. 62---Suit for specific performance of agreement to sell---Maintainability---Novation agreement---Landlord and tenant entered into an oral agreement to sell the subject property---Tenant failed to pay the balance sale consideration within the stipulated time, whereafter the matter was referred to arbitration---Arbitrators gave their award, in terms whereof the tenant was to vacate the shop under his tenancy and hand it over to the landlord and in consideration thereof the landlord was to pay a sum of Rs.1,400,000/- to the tenant---Such decision rendered by the arbitrators was not challenged by any of the parties in any legal proceedings---Tenant failed to handover the possession of the shop, as a result of which the landlord also did not pay him the amount determined by the arbitrators---Landlord then sold the shop to a third party, which filed eviction proceedings against the tenant after which the tenant on his part filed a suit for specific performance of his oral agreement to sell with the landlord---Held, that the legal effect of the arbitrators' decision, which remained unchallenged was that the tenant gave up both his right to seek specific performance of the contract under the oral agreement as well as his tenancy rights on the condition of receiving Rs.1,400,000/- from the landlord---In such circumstances, the tenant could not have sought specific performance of the oral agreement that stood novated in terms reflected in the arbitrators' award signed and acknowledged by both the parties---Oral agreement to sell came to an end and in consequence thereof the tenant was only entitled to receive Rs.1,400,000/- and handover the possession of the shop to the landlord, thus the suit for specific performance was not maintainable---Supreme Court directed that the landlord shall deposit Rs.1,400,000/- in the Supreme Court within a period of sixty days which shall then be paid to the tenant; that there shall be no extension in time for any reason whatsoever and failure to deposit the amount within such period shall result in dismissal of present appeal and the tenant shall be entitled to retain the possession of the shop in his capacity as tenant of the third party who were the successor-in-interest of the landlord; that the tenant shall be entitled to receive the amount deposited in the Supreme Court after the possession of the property was handed over to the third party---Appeal was allowed accordingly.