1. ' In this suit for declaration and permanent injunction plaintiff has sought declaratory relief as to their right to operate C.N.G. Stations under the licence agreement and has impugned, the notice calling upon the plaintiff to vacate with consequential injunctive relief.
2. ' Through listed C.M.A. No,5082 of 2004 plaintiff seeks injunctive relief against the defendants not to take adverse action against the plaintiff on the basis of the impugned notice dated 29-7-2004 whereby calling upon the plaintiff to vacate the C.N.G. Filling plant within 30 days.
3. ' In order to appreciate rival claim of the parties. Brief resume of the facts may be necessary.
4. ' It appears that the plaintiff a partnership firm, carrying on business of C.N.G. Filling stations under name and style of Green Fuels. Defendant a multinational oil company operates directly or through its agents, dealers, fuel, oil and lubricant outlets and stations. It appears that plaintiff after some negotiations with the defendant entered into memorandum of association dated 9-10-1998 followed by formal agreement dated 29-7-1999 whereunder the plaintiff was allocated different site for operating C.N.G. Pumps at various stations. It appears that the plaintiff established C.N.G.
5. Station at Margalla G-10 Islamabad subject-matter of instant suit. Prototype agreements were executed between the parties almost in identical terms as regard other stations as well.
6. ' It appears that the defendant through impugned notice dated 28-7-2004 called upon the plaintiff to remove the C.N.G. Plant.
7. ' In the foregoing backdrop it was contended by Mr. Kamal Azfar learned counsel for the plaintiff that the licence was in fact for a period of 15 years it was for this reason the plaintiff had incurred substantial expenses in raising permanent structure. It was next pleaded that necessary licence/permissions to run C.N.G. Station was secured from, the Government of Pakistan for a period of 1'5 years. Mr. Kamal Azfar further emphasized that the very use of the word "initially for 5 years" in the licence agreement is indicative of the fact that the licence is to be renewed for two successive terms of five years each and in essence the licence for 15 years. It was urged that only in case where the defendant required the subject site for their own use only then the licence could be terminated before expiry of 15 years and not otherwise.
8. ' Mr. Azfar, therefore, contended that, licence is irrevocable during the subsistence of fixed term of licence, unless the plaintiff commits any default or breach of the licence, which has not been committed by the defendant. It was further urged that in the contest of controversy the word 'may' used in the clause 16 of the agreement is to be read as shall, therefore, plaintiff is entitled to avail the benefit of licence for the full term contracted. In support of his contention he has relied upon Frederic Guilder Julius v. The Right Rev. The Lord Bishop of Oxford 5 AC 214. Mr. Kamal Azfar, contended that the licence is time bound and besides the plaintiff has raised permanent structure on the basis of licence is entitled for protection in terms of sections 60 and 62(c) of the Easements Act.
9. ' Dr. Farogh Naseem learned counsel appearing for the defendant contended that the agreement was for a fixed term of 5 years. According to him renewal was subject to mutual consent, it was urged that, on completion of first term of five years the defendant notified the plaintiff their intention not to renew the licence.
10. ' Dr. Farogh controverted the argument of Mr. Kamal Azfar that use of "may" in clause 16, of the agreement could be construed as "shall". In support of his contention he has placed reliance on Wali Muhammad v. State PLD 1971 Lah.
433. In the cited case learned. Division Bench while interpreting statutory conditions of lease under section 10 of Colonization of Government Lands Act, 1912 opined that `may' used in renewal clause under facts of the case cannot be read as `shall'. As regard arguments of Mr. Azfar, premised on the ground of investment and raising structure, it was contended that, investment is no criteria to confer any right on the plaintiff. It was further urged that, once the licence is revoked, plaintiff is merely a trespasser and is not entitled for any injunctive relief or protection. Dr. Farogh contends that licence is for five years and it would be total anarchy, if the renewal clause is interpreted otherwise. He places heavy reliance on section 62(c) of the Easements Act, 1882, to urge that each clause of section 62 is independent and apply on its own force. In support placed reliance on a Full Bench decision from Indian jurisdiction reported as Chundu Lal v. Delhi Municipality AIR 1978 Delhi 174 and quite a few judgments from the Indian judgment it was contended that no injunction could be granted.
11. ' I have heard the arguments and perused the record.
12. ' For the purpose of present controversy clauses 5.4, 5.5, 16 and 17 are relevant, which are reproduced for the benefit of appreciation:-- "5.4. Shell shall grant written permission to the licensee to obtain natural gas and electricity connection for use by the C.N.G. Filling station in its own name. The licensee shall be responsible for the payment o the installation charges and the regular payment of the actual bill to the concerned Authorities in respect of the Gas and Electricity consumed by the C.N.G. Filling station on a monthly basis. Shell shall not be liable for the payment of the said bill under any circumstances whatsoever.
13. 5.5. Upon the expiry of the term of this licence or its earlier termination, the licensee shall remove its C.N.G. Filling plant at its own cost within 30 days of the expiry of the licence.
16. Terms and Renewal 16.1 This licence is valid for an initial period of 5 years beginning from the date, month and year first above written and may be renewed for two additional terms of five years each.
17. Termination 17.1 If at any time after the grant of this licence or the installation of the C.N.G. Filling station, the space where the C.N.G. Filling plant is installed is required by the Company for surrendering to its landlord or if the licensee fails to discharge any of its obligations under this licence, the Company may terminate this licence by serving upon the licensee a six months advance written notice of such termination upon the expiry of which this licence shall stand terminated. The licensee upon receipt of such notice shall surrender the licensed space to the Company within the notice period after removal of the C.N.G. Filling plant in accordance with clause 5.4 hereof.
14. 17.2. Safety is the prime and foremost concern for Shell. Safety standards, emergency producers and operating guidelines have been provided as Appendix "B" with schedule IV. Any serious violation may result in the immediate termination of the contract without a notice period of six months.
15. 17.3. The licensee may at any time surrender this licence by serving upon the Company a six months advance written notice of such surrender upon the expiry of which this licence shall deemed to have been surrendered. In such an event the licensee agrees to first offer to sell the C.N.G. Filling plant to Shell at a fair market value to be mutually agreed between the parties and if Shell does not exercise its option to but the C.N.G. Plant then the licensee shall during the notice period remove the C.N.G. Filling plant in accordance with clause 5.4 hereof. (underlined to add emphasis).
16. ' Moot controversy, appears to be revolving round the interpretation of renewal clause 16 as reproduced above.
17. ' In the case Fredric Guilder Julius v. The Right Rev. The Lord Bishop of Oxford 5 AC 214, the House of Lords while interpreting section 3 of Church Discipline Act, 1940, held that "the word 'it shall be lawful' in a statute are, plainly and unambiguously, merely permissive, empowering and conferring on the person named, a right to do a specified thing, but where the object of the enactment is to effectuate a legal right, whether a public or private, they are to be construed as compulsory. This is equally the case where the enabling power is given by the word "may"."
18. ' In the case of Wali Muhammad v. State PLD 1971 Lah. 433, learned Division Bench was called upon to interpret "may" as used in statutory terms and condition of lease issued under section 10 of the Colonization of Government Lands Act, 1912. Keeping in view case of Frederic Gulider Julius (supra), the learned Bench was of the view that, the right of renewal was not to be spelt out from the use of word "may" but had to be independently shown to have existed.
19. ' In the case of Chundu Lal (supra), the appellant therein, acquired Kiosk in auction held by the Municipality for a term of 11 months as advertised. In licence agreement, it was provided that licence is liable to be cancelled by authorized officer without assigning any reasons and on expiry of licence or revocation resume exclusive possession and charge of Kiosk and deal with it as may deem fit. The licence of Kiosk was neither assignable nor transferable. Learned Full Bench of Delhi High Court, in the context of case rightly held at page 181 para.27 that:- "The petitioners are not entitled to retain possession against the Corporation, which can take possession of the Kiosk and would not be driven to the Court of law as the mere physical possession of the petitioner confers no right on them.
20. ' In Delhi case, neither issue as to 'licence is time bound' nor, the licensee had claimed protection under section 60(b) of the Easements Act, nor such plea was available to him. From facts of cited case from Indian jurisdiction it appears that, licensee was merely given permission to run his business without any permission to raise construction, therefore, the case of Chundu Lal (supra), is clearly distinguishable.
21. In the instant case the licence, it appears could be succeeded and assigned (see the description of the second party in the agreement and clause 1.2), though it expressed otherwise in clause 15.2.
22. Under the Licence agreement the plaintiff was authorized to raise construction and erect C.N.G..
23. Pump. There seems to be no unfettered discretion vesting in the defendant as claimed by Dr. Farogh to revoke the licence before the term settled, save in accordance with clause 17, which provides grounds for revocation before expiry of term.
24. ' Dr. Farogh learned counsel for the defendant maintained that, investment is no criteria to confer any right on the plaintiff to continue occupying the suit premises. It was further urged that, once the licence is revoked the plaintiff is mere trespasser and not entitled for any relief.
25. Contention of Dr. Farogh Nasim that, the agreement is time bound for a period of five years and since the defendants have exercised the option not to renew the licence the licence is deemed to have come to an end.
26. ' Relationship of licenser and licensee is regulated under the Easements Act, 1882 and licensee have limited right as against the tenant who could not be evicted otherwise than provided under the rent laws. In the case of Wali Muhammad (supra), grant of lease was made under the Colonization of Government Lands Act, 1912. Initial lease of 10 years was stipulated. Renewal clause provided "the Collector "may" renew it for a further period not exceeding 5 years at a time". In cited case also, the Court was called upon to examine whether use of word "may" in a statutory provision confers discretion upon an administrative authority and cast obligation upon it. In said case it appeared to the Court, that the. Government had the authority to resume the land for public purposes. The Government issued a directive through a memorandum leases in favour of non- Lambardars and the area should not be renewed as the same is required to be allotted to Lambardars under the same scheme. The Collector followed the directive of the Controlling Authority. In the context of the case, it was held that the Authority for the renewal was subject to the decision of the 'superior authority', which had decided for making the land available for public purpose. Therefore, it was held that the Collector had no discretion and the "may" in the Statutory Conditions under circumstance cannot be interpreted as "shall".
27. "May" is generally used in permissive sense, it is interchangeable with "shall" having obligatory connotation, and at time, if context so permit, could be interpreted as obligatory. It therefore, follows that the use of "may" in any legal- or contractual instrument should not always be perceived with rigidity as attributed to it in ordinary usage. Use of such expression carries varying connotations. At times, it implies what is permissive, elective, optional or discretionary and, at times, it is obligatory and imperative upon an authority or person invested with power to exercise it, as laid down under the instrument. To decipher the intention of parties whether "may" is to be given optional connotation or imperative, instrument is to be examined as an organic whole. ##TSE# (See Tanzeem-e-Mulazmin Baldia v. Government of West Pakistan PLD 1971 Kar. 535, H.M. Siddique v. Administrator, Lahore Municipal Corporation 1980 CLC 1289 and Wasim Beg v. State of Uttar Pradesh AIR 1998 SC 1291.
28. In the instant case, the permission to operate C.N.G. Station, issued by all the regulatory agencies are admittedly valid for 15 years. It is for this reason, renewal for two consecutive terms of five years is provided for in the agreement to cover the period of permission.
29. Defendant does not dispute that the permission to operate the C.N.G. Station is for 15 years.
30. Defendant in para.7 of counter-affidavit, stated "plaintiff's contention that it obtained the acquisition licence from the Government for 15 years because subject agreement was for 15 years, is misleading and fabricated. The truth of the matter is that all C.N.G. Licences granted by Government (OGRA) are granted for 15 years regardless the terms of agreement between the parties i,e, in this case the plaintiff and the defendant. Therefore, there is no nexus between the term of 15 years granted to the plaintiff by (OGRA) and the term of the licence of 5 years granted by the defendant, only renewable at the option of the licenser for 2 further period of 5 years which has not been done".
31. ' On examination of renewal clause, which is reproduced at the cost of repetition as follows:-- 16.1 This licence is valid for an initial period of 5 years beginning from the date, month and year first above written and may be renewed for two additional terms of five years each.
32. On reading renewal clause as quoted above, contention of Dr. Farogh "that licence is only renewable at the option of the licenser" does not seem to be convincing, the option for renewal in the renewal clause is not left at the discretion either of the licenser nor of licensee.
33. On examination of termination clause, it is apparent that the defendant could not terminate the agreement' arbitrarily or at its sweet will, whims and fancies as is conventional in the licence agreements. The discretion is controlled by well-defined contingencies, in terms of clauses 16 and 17 already reproduced above. In terms of termination clause, the defendant could terminate the licence before expiry of term on occurrence of three eventualities namely; (i) the Company for the surrender to its landlord, requires the premises, (ii) Where the licensee has failed to discharge any of the obligations under the agreement and lastly (iii) where the licensee failed to observe the safety standard. Admittedly none of the contingency giving right to revoke the licence agreement has either been invoked or shown to have occurred.
34. It needs no authority that where a statute is capable of two interpretations then the interpretation that favours the subject is to be preferred, reason is obvious. Statute is framed by the State having dominating and commanding position as against the subject.
35. Likewise where a word, phrase or expression used in an instrument is capable of two interpretations, then the dispute is to be resolved against the party that had drawn the instrument or the party that had dominating and imposing position. Admittedly the defendant is a multinational company and had drawn the instrument. Defendant was in dominating and imposing position as against the plaintiff who is merely a dealer and small entrepreneur as compared to the defendant "Shell". (see also Province of West Pakistan v. Gammons Pakistan Ltd.
36. PLD 1976 Kar. 458 and 463).
37. Under given facts and circumstances, when the Licence Agreement is examined as a whole, in my opinion the use of word "may" as employed in clause 16.1 carries obligatory connotation. Thus, the defendant is obliged to renew the licence for two consecutive terms of five years as committed, unless the contingencies as stipulated under clause 17 are available or occur, the licence cannot be revoked or come to an end before 15 years.
38. Even otherwise, looking at the case from another point of view, it is not all and every licence are revocable, section 60 of the Easements Act provide exception to this general rule. Section 60 of the Easements Act runs as follows:-- "60 Licence when revocable.--- A licence may be revoked by the grantor, when unless---
(a) It is coupled with a transfer of property and such transfer is in force;
(b) The licensee, acting upon the licence, has executed work of a permanent character and incurred expenses in the execution.
39. In terms of section 60 of the Easements Act as reproduced above the licence is irrevocable only in cases where it is coupled with interest or where a licence has raised construction of a permanent nature. In the instant suit the case of the plaintiff is covered under clause (b) of section 60.
40. Admittedly the plaintiff/licensee, acting upon the licence, has executed work of a permanent character and incurred expenses in the execution. The plaintiff on the representation made in the licence has ,installed C.N.G. Filling station and incurred substantial expenditure. It would be wholly unfair, that the defendant may be clothed with arbitrary authority to terminate the licence at his whims, against specified grounds to seek revocation as provided for under clause 17. There seems to be force in the arguments of Mr. Kamal Azfar, that incurring substantial expense would not be feasible for a shorter term of five years. Unless the plaintiff is allowed to exploit the licence for the full stretch of 15 years the plaintiff would suffer irreparable loss as against the defendant who will not suffer any loss.
41. ' It will not be out of place to mention that the plaintiff had offered to vacate the premises, provided the defendant agrees to purchase the C.N.G. Filling station. As such option was also available to the-defendant per clause 17.2 of the agreement, which offer the defendant did not accept.
42. ' Contention of Dr. Farogh that, the licence was time bound and in terms of section 62(c) of the Easements Act licence stood revoked. According to Dr. Farogh, each of the clause of section 62 applied on its own force independently, therefore, the licence stood revoked on expiry of first term of five years. Section 62(c) reads as follows:-- "62. Licence when deemed revoked.--- A licence is deemed to be revoked:-- (a)
(b) .................................................
(c) Where it has been granted for a limited period or acquired on condition that it shall become void on the performance or nonperformance of a specified act, and, the period expires or the condition is fulfilled.
43. It is true that each clause of section 62 applies on its own force and provide disjunctive cause of revocation of licence. As already held above that "may" as used in the renewal clause, under facts and circumstance of the case has obligatory connotation, therefore, it cannot be said that the term of the licence has expired. There is no allegation in the plaint that the licence was acquired on conditions and the conditions were breached or that it has become void on the performance or nonperformance of a specified act, or the condition on which it was acquired. In absence of such allegation as is required under section 62(c) of the Easements Act. In my opinion defendant has failed to substantiate from the pleading.
44. Under facts and circumstances of the case, in my opinion, the plaintiff has made out a prima facie good case for the grant of listed application, balance of inconvenience also leans in favour of the plaintiff in case injunction is refused, besides no loss would be caused to the defendant. On the contrary it is the plaintiff who would suffer loss if uprooted.