' RAHMAT HUSSAIN JAFFERI, J.---On 14-1-1992 the plaintiffs Mur aza Construction Corporation (Pvt.)
Limited filed the plaint fordeclaration, mandatory, permanent injunction and damages against Karachi Metropolitan Corporation (hereinafter referred to as the defendants) and Government of Sindh.
2. Brief facts of the case are that the plaintiffs, Murtaza Construction Corp. a Private Limited Company are engaged in developing of plots, construction of buildings and are licensed developers and builders under a valid license granted by Board of Karachi Building Control Authority. A plot bearing City Survey No,17 survey sheet No,PR-2 (old Survey No,F-3/14) admeasuring 3679 square yards situated in Preedy Quarters, Karachi (hereinafter referred to as the suit property) was purchased by the plaintiffs' predecessor-in-title in an open auction held by the defendants and was granted 99 years B-1 lease, commencing from February 2, 1881 subject to payment of land rent and renewable for a further period of 99 years on payment of revised land rent as assessed at the time of renewal. The plaintiffs purchased the suit property through a registered deed on 29-10- 1979. Before the expiry of period of lease on 19-1-1980 the plaintiffs made an application to the defendants for the renewal of B-1 lease of the suit property for a further term of 99 years on payment of usually revised ground rent. The defendants asked the plaintiffs to pay Rs,26,266 on account of revised land rent and further demanded Rs,22,26,600 on account of premium at the rate of Rs,600 per sq.Yd. The plaintiffs objected to the illegal demand of payment of premium by the defendants, therefore, they requested the defendants 'to send amended challan for the revised land rent. In the meantime, the plaintiffs also submitted plans for the construction of a proposed building on the suit property to Karachi Development Control Authority. They made queries from the defendants who replied to them that the matter of renewal of lease inJespect of suit property was under consideration and as soon as the same was finalized, the request for NOC to the proposed building plan would be considered under the rules. However, the defendants informed the plaintiffs that a similar case was referred to Law Department Government of Sindh therefore, the matter was kept in abeyance till the receipt of opinion from the Law Department. On 3-6-1981 the said Department gave opinion that the premium cannot be charged on renewal of B-1 lease.
Based on the said advice the defendants on 12-8-1981 informed the plaintiffs that the amount of premium was withdrawn and asked the plaintiffs to pay Rs,53,345.50 as revised land rent from 1-2- 1980 to 3-6-1982. They also asked the plaintiffs to pay mutation fee at the rate of 2% of sale price amounting to Rs,284,000 within a period of seven days. The plaintiffs deposited the total amount of Rs,3,37,345.50 on 13-8-1981 under protest. The defendants did not issue the renewal of lease order.
In the meantime on 14-11-1981 the Karachi Building Control Authority informed the plaintiffs that the proposed construction of building on thesuit property was approved subject to the production of lease. The plaintiffs approached the defendants for issuance of no objection certificate and lease deed but with no result, therefore, he approached the Secretary, Local Government Department for directing the defendants to issue the lease deed. The defendants again referred the case of the plaintiffs to the Law Department for opinion. The Law Department gave the similar opinion but the defendants did not renew the lease deed. In the meantime the Karachi Building Control Authority, on 19-12-1983 issued notice to the plaintiffs for stopping the work of construction on the suit property as the lease of the plot was not renewed by the defendants. In pursuance of the said letter the officials of the Karachi Building Control Authority came at the site of suit property and attempted to stop the work of the construction which was in progress. Therefore, the plaintiffs suffered losses of Rupees 30,000 per day and general damages to the tune of Rs,3, 00,00,000 hence the suit. Pending adjudication of the suit, on 2-8-1984 the defendants rescinded their earlier order, dated 12-8-1981 and threatened to resume the plot, therefore, the plaintiffs made necessary amendment in the plaint with the permission of the Court. Initially the defendants was Karachi Metropolitan Corporation which was subsequently merged in the City Government, therefore, necessary amendment was also made in the plaint with the permission of the Court. The plaintiffs also joined Government of Sindh after obtaining requisite permission from the Court and amended plaint was filed. The plaintiff's claim following reliefs:-
(a) That the plaintiffs pray for a declaration that mutation fee has been erroneously levied of Rs,2,84,000.00 and that the plaintiffs are entitled to refund of the excessive amount.
(b) That the plaintiffs further pray for a decree for permanent injunction restraining the defendants their agents, servants, representatives, employees and any other person or authority claiming, through or ,acting under them to forbear from stopping the plaintiff from constructing the proposing multistoried building on the plot in question in accordance with the building plans.
(c) The plaintiffs further pray for a declaration that the demand made by the defendants for payment of premium and orders, dated 2-8-1984 and 8-8-1984 are illegal, arbitrary and without lawful authority.
(d) That the plaintiffs further pray for a decree for mandatory injunction directing the defendants to issue formal document of renewal of B-1 Lease of Plot No,17 Sheet No,PR-2 (old Survey No,F-3/14) measuring 3679 sq.Yds situated in the Preedy Quarters of the city of Karachi.
(e) That the plaintiffs pray for decree of Rs,3,00,00,000 as compensation/damages for withholding the issue of formal documents of renewal of lease and NO OBJECTION CERTIFICATE.
(f) That the plaintiffs further pray for decree of Rs,30,000 per day as continuing damages for each day from the date of suit to the date when formal document is issued and losses to the plaintiffs ceased.
(g) Interest at 14% from the date of suit to the date of payment.
(h) Costs of the suit.
(i) Any other relief or reliefs which this Hon'ble Court may deem fit and proper.
3. Government of Sindh did not contest the suit, but the defendants contested the suit. They filed the written statement in which they admitted all the facts. They supported their demand of premium and mutation fee from the plaintiffs. They took the plea that the opinion of the Law Department was erroneous which was not binding upon them and relied upon Rules 24 & - 27 of Sindh Local Council (Land) Rules, 1975. They further stated that as the premium was not paid for the renewal of lease therefore lease deed was not renewed. They further stated that no damages have been caused to the plaintiffs therefore they are not entitled for any damages. They requested for the dismissal of the suit.
4. From the pleadings of the parties, following consent issues were framed on 27-10-1985:-- ISSUES
(1) Whether the plaintiffs are a private limited company and are licensed developers and builders under a valid license? If Not, its effect.
(2) Whether the defendants became entitled to mutation, fee and payment of premium for renewal of lease as provided under the law after the expiry of lease?
(3) Whether the demand of defendants vide letter, dated 4-5-1980 was legal and valid?
(4) Whether the defendants sent the letter, dated 30-4-1981 (Annexure 'ID') to the plaintiffs?
(5) Whether the order of the Government of Sindh-conveyed under their letter No,U.O.
No,0P15(69)/81-265, dated 3rd June,1981 and U.O. No, OP-3(14)/83/366, dated 11-8-1983 are binding on the defendant?
(6) Whether the decision of Mayor given on the basis of opinion of Law Department, Government of Sindh on erroneous interpretation of relevant provisions of law can form precedent for deciding similar cases of renewal of lease?
(7) Whether the defendant after payment of revised land rent and mutation fee as- demanded per letter, dated 12-8-1981 could withdraw the said order and demand premium?
(8) Whether defendant is stopped from rescinding the order conveyed as per letter, dated 12-8- 1981 as alleged in paragraphs 29 and 30 of the plaint?
(9) Whether the acceptance of revised rent and mutation fee without charging premium for renewal of lease, entitled the plaintiffs to renewal of lease?
(10) Whether the demand of premium and order, dated 2-8-1984 and 8-8-1984 of the defendant are illegal and without lawful authority?
(11) Whether the approval of building plan by Karachi Building Control Authority on 5-12-1981 without renewal of lease by defendants was legal and in order?
(12) Whether the defendants illegally withheld the renewal of lease inspite of payment of revised land rent and mutation fee?
(13) Whether, the plaintiffs suffered loss at the hands of the defendants and are entitled to damages for the same?
(14)(a) Whether the plaintiff has suffered further continuing loss on account of delay in completion of the project as alleged in paragraph 25 of the plaint?
(b) If so, is plaintiff entitled to recover damages/compensation of the said loss? If so, what amount?
(15) Whether the plaintiffs are liable to pay Rs,22,07,400 by way of premium for renewal of lease of plot measuring 3679 sq.Yds. At the rate of Rs,600 per sq.Yd.?
(16) Whether the plaintiff have failed to implead Karachi Building Control Authority who is a necessary party to the suit?
(17) Whether the suit is bad for non-joinder of necessary party and is premature against defendants in any view of the matter?
(18) Whether the plaintiffs are entitled to the relief claimed or any part thereof?
(19) What should the decree be?
5. In order to prove the issues the plaintiffs examined Shamsuddin Ibrahim one of the directions of the plaintiffs. He produced all the relevant documents. The defendants examined Altaf Ahmed Khan, Deputy District Officer. He also produced relevant documents and orders passed by the competent authorities of the defendants.
6. I have heard the parties' Advocates and perused the record of this case very carefully. My finding on the above issues are as under for the following reasons:-- FINDINGS Issue No. 1 - In negative Issue No. 2 - In affirmative Issue No. 3 - As under Issue No. 4 - In negative Issue No. 5 - In negative Issue No. 6 - In negative Issue No. 7 - In affirmative Issue No. 8 - In negative Issue No. 9 - In negative Issue No. 10 - In affirmative Issue No. 11 - As under Issue No. 12 - In negative Issue No. 13 - In negative Issue No. 14 - In negative Issue No. 15 - In affirmative Issue No. 16 - In negative Issue No. 17 - In negative Issue No. 18 - In negative Issue No. 19 - The Suit is dismissed with no order as to costs REASONS ISSUE NO.1
7. The burden of proof, to prove the issue lies upon the plaintiffs. The plaintiffs have not led any oral or documentary evidence on the above issue as such without such evidence the issue cannot be replied in affirmative. Hence, the issue is replied in negative. ISSUE NO.2
8. The burden of proof, to prove the issue lies upon the defendants. The learned Advocate for the defendant has argued that the defendants are entitled to recover premium under Rule 24 of Sindh Local Council (Land) Rules, 1975 (hereinafter referred to as the Rules); that the mutation fee can be charged at two per cent of the initial sale price under Rule 27 of the Rules, therefore, the defendants are entitled for mutation fee and premium for renewal of lease. Conversely the learned Advocate for the plaintiffs has argued that the Law Department of Government of Sindh gave opinion that the premium is not chargeable and mutation fee cannot be charged from the plaintiffs. In order to appreciate the arguments it will be advantageous to reproduce Rules 24 and 27 of the Rules, which are as under:-- "Rule 24. Renewal of leases.--The council may in its discretion renew the lease for further period of ninety-nine years in the certified developed quarters on further condition that the lessee shall pay such premium and such revised land rent as may be fixed under these rules. Rule 27: In registering names of the transferees in such registers the council shall as far as possible adopt the procedure laid down in the West Pakistan Land Revenue Act, 1967 (West Pakistan Act XVII of 1967) for mutation of the names in respect of plots leased out by Government and any entry made in such register shall be rectified by the council on furnishing of such proof and a mutation fee at 2 per cent of the initial sale price."
9. From the above Rules it is clear that the defendants are entitled to claim premium along with land rent as may be fixed under the rule. A They are also authorized to recover mutation fee at 2 per cent of the initial sale price.
10. It is pertinent to point out that Rule 31(2) of Rules forManagement of waste land within Municipal Limits of Karachi framed on 14-10-1929 provided as under:-- "Lease issued under Form B-1 for 99 year---On the expiry of the lease be renewed at the option of the lessee for a period of 99years.,On condition of the lessee, paying such premium andsuch revised amount as may be fixed by the Municipality and sanctioned by the Commissioner in Sindh on terms andconditions of the original lease
11. Thus, the defendants are entitled to recover the mutation fee and premium for renewal of lease as mentioned above from 14-10-1929. The plaintiffs could not produce any law or rules debarring the defendants from recovering the mutation fee and premium for renewal of lease. The issue is replied in the affirmative.
ISSUE NO.3.
12. The defendants under letter, dated 4-5-1980 Exh.5/5 demanded' premium, land rent and mutation fee from the plaintiffs that are as under:-- "(1) Premium at the rate of Rs,600 per square yard. KMC landmeasuring 3711 square yards amounting, to Rs,2,26,600.
(2) Revised land rent at the rate of Rs,6 per square yard per annum with effect from 1-2-1980 to 31- 1-1981 amounting to Rs,22,266.
(3) Mutation fee at Rs,2 per cent of sale price that is on Rs,1,42,00,000."
13.. Under Rule 24 of the Rules the defendants are entitled to recover the premium and such revised land rent as may be fixed under the Rules. Rule 15 of the Rules gives the procedure about fixing the rent and occupancy value. The defendants have fixed the revised land rent at Rs,6 per square yard.
Under illustration (e) to Article 129 of Qanun-e-Shahadat 1984 official acts, are presumed to be regularly performed unless contrary is proved. Thus a presumption can be attached to the fixation of revised land rent that it was regularly revised in accordance with law unless contrary is proved.
As such the burden shifts upon the plaintiffs to prove that the defendants did not fix the revised land rent in accordance with Rule 15 of the Rules but no such evidence has been led by the plaintiffs to rebut the presumption attached to the official acts as required under illustration (e) of Article 129 of Qanun-e-Shahadat, 1984.
14. The learned Advocate for the plaintiffs was asked to point out any rule under which the premium is to be fixed but he was unable to point out any rule in the Rules. However, the defendants had calculatedthe amount for an area of 37 square yards but the total area of the suit property is 3679 square yards. Therefore, the defendants are required to calculate the premium for an area of 3679 square yards at the rate of Rs,600 per square yard.
15. As regards the mutation fee, the Rule 27 of the Rules provides that mutation fee be charged at two per cent of the initial sale price. In the present case, the defendants had charged the mutation fee at 2 per cent of the sale price on which the plaintiffs purchased the suit property in the year, 1979. The record is silent about the initial sale price on D which the suit property was sold to the predecessor-in-interest of the plaintiffs. Thus the defendants are not entitled to recover the mutation fee on Rs,1,42,00,000 but they are entitled to recover the mutation fee at 2% of the initial sale price which can be gathered from the record of the defendants.
16. In the light of what has been discussed above the letter, dated 4-5-1980 is modified to the above extent. The issue is replied accordingly. ISSUE NO.4
17. The issue is in respect of a letter sent by the defendants, dated 30-4-1981 (Annexure-"D"). The parties have not produced any such letter in the evidence. However Annexure "D" attached to the plaint is in respect of letter, dated 14-5-1980 which has been addressed by the plaintiffs to the defendants. Thus, this letter does not cover the issue framed in the suit. As the letter, dated 30-4- 1981 sent by the defendants has not been produced, therefore, the issue is replied in negative. ISSUE NO.5.
18. The letters referred in the issue are the opinions of Law Department Government of Sindh given to the defendants on their request. As under the above-referred letters Law Department gave opinion on the subject-matter, therefore, it is not binding upon the defendants to follow the same.
However, under the rules of business of the Government of Sindh an opinion can be sought from the Law Department on any legal aspect of the case. However, if the Department concerned form the opinion that it is against the rules or law then the Department concerned may not follow the said opinion. As such, the issue is replied in negative.
ISSUE NO.6
19. If the opinion of the Law Department is found erroneous on the interpretation of the relevant provisions of law then even if a decision was given on the said erroneous opinion, such precedent would not bebinding upon the authority to follow such precedent. The issues is replied in negative.
ISSUES NOS.7, 8 AND 10
20. As these issues are interconnected, therefore, they are discussed together. The learned Advocate for the plaintiffs has argued that vide letter, dated 12-8-1981 the defendants had withdrawn the demand of premium and asked the plaintiffs to pay the revised land rent and mutation fee within seven days which were deposited on the same 'date and such intimation was sent to the defendants vide Exh.P.5/10, therefore a valuable right was created in favor of the plaintiffs for renewal of lease deed hence the defendants cannot withdraw the said letter and the' demand of premium through letters, dated 2-8-1984 wad 8-8-1984 is illegal. Conversely the learned Advocate for the defendants has argued that under section 21 of General Clauses Act the defendants were competent to withdraw the letter, dated 12-8-1981 as the premium was withdrawn under the erroneous advice of the Law Department and such demand was made under Rule 24 of the Rules that no vested right was created in favor of the plaintiffs, therefore, principle of locus poenitentiae would not be available to them.
21. It is an admitted fact that initially the defendants demanded premium of renewal of lease. After obtaining the opinion from Law Department Government of Sindh the demand of premium was withdrawn, vide letter, dated 12-8-1981 Exh.5/9. Subsequently the defendants found the said withdrawal against the rules therefore, they again demanded the premium from the plaintiffs vide their letter, dated 2-8-1984 and 8-8-1984. Under section 20 of Sindh General Clauses Act, 1956 where any authority conferred with the powers to issue notifications, orders, rules, or bye-laws then that includes a power exercisable in the like manner and subject to the like sanctions and conditions if any, to add, to amend, vary or rescind any notification, orders, or rules, scheme, form, bye-laws so issued. However if the order has taken legal effect and certain rights have been created in favor of any individual then principle of locus poenitentiae would be available to such party. It has been held in 1992 SCM R 1652 that authority competent to make order has power to undo it, but the order cannot be withdrawn or rescinded once it has taken legal effect and certain rights are created in favor of any individual and principle of locus penitential would be available. It has also been held in 1988 SCMR 1745 that power rescinding can be exercised till a decisive step is taken. It has further been held in 1981 SCM R 604 that statutory and executive authorities have locus penitential to recall an order if no effective step taken till then in implementation thereof. It has further been held in 1991 SCM R 2293 that appellants/Government were entitled to rescind or to modifydecision of Land Utilization Committee provided that no vested right that might have accrued to between the date of decision and the date of revocation of that decision, could be destroyed.
22. Keeping in view the above principle I have examined the case and find that the defendants, on 4-5-1980, demanded the premium from the plaintiff vide Exh.5/1, but subsequently after the opinion given by Law Department, Government of Sindh the demand of premium was withdrawn on 12-8- 1981 vide Exh.P5/1/9. After withdrawing the premium the defendants was required to deposit Rs,3,37,345.50 within 7 days which they did thereafter the matter was again referred to Law Department for fresh opinion but the Law Department stood to their earlier opinion. However, the defendants did not agree with the said opinion as it was found against Rules 24 and 27 of the Rules.
Therefore, the defendants withdrawn the letter Exh.5/9 vide letter, dated 2-8-1984 and demanded the premium from the plaintiffs in between both the letters no decisive action was taken on the letter Exh.5/5 as the lease was not renewed. As such, no vested right was created in favor of the plaintiffs during the said period.
23. Nevertheless, it is pointed out that a right can be created through a valid and legal order, but if the order is invalid, illegal or void no right whatsoever can be created through the said order as the void order is one which was passed by an authority either lacking jurisdiction or was made in complete disregard of the mandatory provisions of law, which is an illegal order not existent in the eyes of law. Reference is invited to Sharif Ahmed Hashmi v. Chairman, Screening Committee, Lahore (1980 SCM R 711), Abdul Qadir v. Government of Pakistan (PLD 1967 SC 506), Chief Settlement Commissioner v. Raja Fazal Khan (PLD 1975 SC 331) and Atta Muhammad Qureshi v. Settlement Commissioner, Lahore (PLD 1971 SC 61).
24. The above view is supported by Hon'ble Supreme Court of Pakistan in a case of Ardeshire Cowasjee v. Karachi Building Control Authority (KMC) 1999 SCM R 2883 (KMC) in the following words:-- "In our view, the principle of locus poenitentiae is not attached to the present case inter alia for the reasons, firstly, the appellants were not the authority which had approved respondent No,5's building plan in violation of the above provisions of the order and the regulations. Secondly, since the above approval was in contravention of the provisions of law, the above illegal action/order cannot be treated as irrevocable or past and closed that as the order of approval of the plan is illegal, perpetual rights cannot be gained on the basis of the same."
25. In the present case, as has already been observed, that under Rule, 24 of the Rules the defendants were authorized to demand premium, as such the earlier order, dated 4-54980 Exh.5/5 was an illegal and void order. As such through that order no vested right was created in favor of the plaintiff. Therefore, the defendants were entitled to revise the said order and the demand of premium through order, dated 2-8-1984 was legal. The issue No,7 is replied in affirmative, issue No, 8 is replied in negative and issue No,10 is replied in affirmative. ISSUE NO, 9
26. In view of my findings on issues 2, 7, 8, and 10, the plaintiffs are required to pay the premium after the expiry of lease period, but as the same was not paid, therefore, the lease cannot be renewed. The issue is replied in negative. ISSUE NO.11
27. It is admitted position that the Karachi Building Control Authority approved the proposed building plan of the plaintiffs on 5-12-1981 subject to renewal of lease by the defendants. As such, the Karachi Building Control Authority provisionally approved the building plan of the plaintiffs.
Without the renewal of lease the plan cannot be approved by the Karachi Building Control Authority. The issue is replied accordingly. ISSUE NO.12
28. In view of my findings on issues 2, 7, 8 and 10 the defendants were justified in withholding the renewal of lease as the premium was not paid by the plaintiffs after the demand was made. The issue is replied in negative.
ISSUES NOS.13 AND 14
29. As the action of the defendants was justified and legal, therefore, the plaintiffs have not suffered any loss at the hands ofdefendants, therefore, the plaintiffs are not entitled to any damages. These issues are replied in negative. ISSUES NO.15
30. In view of my findings on issue No,4, the plaintiffs are liable to pay premium for renewal of lease of the plot for an area of 3679 sq.Yds. At the rate of Rs,600 per sq.Yds amounting 'to Rs,22,07,400.
The issue is replied in affirmative.
ISSUES NOS.16 AND 17
31. As no relief has been sought against Karachi Building Control Authority, as such they are not necessary party in the suit, therefore, thesuit is not bad for the non-joinder of necessary party. The issues are replied in negative.
ISSUES NOS. 18 AND 19
32. In view of my findings on Issues 1 to 17 the plaintiffs are not entitled to any relief claimed in the suit. As such, the suit of plaintiffs is dismissed with no order as to costs.