1. C.M.A. No 8914 of 2006 'TUFAIL H. EBRAHIM, J.---The plaintiff has filed this application under Order XXXIX, Rules 1 and 2, read with sections 94 and 151, CPC with the prayers that defendant No,1 may be restrained from evicting or dispossessing the plaintiff from the licensed premises and to maintain status quo till the final decision of this suit.
2. 'Brief facts of the case are that the plaintiff is a foundation established by State Petroleum Refining and Petrochemical Corporation (PERAC) under a registered trust deed dated 28-6-1987. Defendant No,1 is a limited company incorporated under the corporate laws of Pakistan. Clause 5(ii) of the trust deed provides 'that the plaintiff shall receive contributions from PERAC, the Government or other bodies or persons as outright grants or for services. Clause-6 of the trust deed provides that PERAC agrees to pay to the trustees (of the plaintiff) or arrange through its associate and subsidiary companies or the government or other organizations or persons, payment of such contributions grants and/or fees as are necessary to carry out the operations of the research centre and the objects contained in the Trust Deed. It is also admitted fact that defendant No,1 (prior to its privatization) along with plaintiff, ENAR Petrotech Services (Private) Limited (ENAR) and State Engineering Corporation Limited (SEC) were the associates and subsidiary companies of PERAC at the time of registration of the trust deed and the chairman of PERAC also acted as Chairman of the plaintiff's Board of Trustees as well as Chairman of the Board of Directors of ENAR, SEC and defendant No,1.
3. The learned counsel of the plaintiff has argued that defendant No,1 in terms of the previous arrangement and as associate and subsidiary of PERAC has contributed 26,035 square yards out of its land bearing A Plot No,7-B, measuring 919,334 square yards, situated in Korangi Industrial Area Karachi, (suit land) on license basis to the plaintiff on the terms and conditions set out in the license agreement dated 1-10-1991. The salient features of the said license agreement are (a) initially for a period of 20 years, whereafter to be automatically extended for further periods of 20 years after expiry of each period, (b) the licensee entitled to sub-license and/or assign the suit land with prior permission of the grantor (c) the licensee entitled to deal directly with all the relevant authorities in respect of the suit land and if required power of attorney would be executed by the grantor (d) the licensee is entitled to raise construction (e) license fee fixed at the rate of Rs,2.21 per square yard and to be increased by 5% after expiry of every 20 years period. Apparently to further secure the rights of the licensee a second license agreement was also executed and registered on 10-3-1994 on the same terms and conditions. A building was constructed in the year 1996 on a portion of the said land wherein research work is still being carried out by the plaintiff. In terms of the said license agreement the plaintiff has entered into a sub-license agreement dated 8-12-1996, in respect of major portion of the suit land measuring 19,298 square yards with ENAR on the terms and conditions therein contained, who have also made construction thereon and are using and occupying the said portion of the suit land.
4. 'The learned counsel for the plaintiff has submitted that the Government of Pakistan decided to privatize the defendant No,1 in the year 2003. At that point of time there was no dispute/issue between the plaintiff and defendant No,1 and the plaintiff and its sub-licensee continued to peacefully enjoy the suit land, without any hindrance or obstruction from defendant No, 1.
5. According to the learned counsel of the plaintiff, the cause of dispute gave birth during the finalization of the privatization proceeding of defendant No,1, when a revised license agreement dated 30-9-2004 was unlawfully and fraudulently executed between the defendant No,1 and plain= through defendants Nos.2 and 3, who had no lawful authority to act on behalf of the plaintiff and who in fact were the employees of defendant No, 1.
6. 'The learned counsel for the plaintiff has argued that a registered agreement could not be amended or modified or novated or replaced by unregistered agreement. In this revised agreement new clauses have been added and old clauses have been modified without the consent and approval of the Board of Trustees of the plaintiff. The said clauses are detrimental to the rights and interest of the plaintiff and contrary to the original terms and conditions of the old agreement. He has argued that the essence of the old agreement has been completely changed, modified and replaced in an unfair and unlawful manner in favour of defendant No,1 The salient features of the revised agreement as opposed to the original agreement are: (a) the period of the agreement has been reduced from 20 years (renewal in perpetuity) upto 30-7-2014, (b) the right of renewal has been taken away from the plaintiff and given to defendant No,1, (c) the license fee has been increased by approximately 1500% to Rs,34 per square yard per month, to be enhanced every year by 10% from the year 1-8-2005. (d) the rights to assign and sub-license has been taken away from the plaintiff, and (e) defendant No,1 has a right to revoke the license agreement on two months notice. The learned counsel of the plaintiff has argued that the said changed are totally repugnant to the spirit of the original agreement and the effect of the above changes would be that the plaintiff will now always remain at the mercy of defendant No, 1.
7. 'The learned counsel for the plaintiff has further argued that defendants Nos.2 and 3 while in the employment of defendant No,1, taking undue advantage of their position and ignoring the situation of conflict of interest, entered into collusive and sham agreement on behalf of plaintiff in favour of defendant No,
1. He further submits that defendants Nos.2 and 3 had no legal or moral authority to act on behalf of the plaintiff. It has been submitted that defendants Nos.2 and 3 did not claim or disclose any directions, position, consent, authority from the plaintiff or from PERAC to enable them to execute the said revised agreement. He further states that the revised agreement was not registered in accordance with law. He has argued that defendants Nos.2 and 3, who were employees of defendant No,1, for mala fide reasons, under the unlawful influence of the prospective purchasers of defendant No,1 and without the consent of the Board of Trustees executed the revised agreement in violation of clauses 9, 12 and 20 and rule 2 of the said Trust Deed. He has argued that revised license agreement suffers from legal flaws, such as want of consideration, registration, stamp duty, board resolution, affixation of common seal, etc and on these account the said revised agreement is void, unlawful and unenforceable. It has been further contended that the original agreement was irrevocable, the plaintiff has made permanent construction on the suit land and for the other reasons as stated above the original agreement is in fact a lease agreement within the meaning of section 60 of the Easements Act, 1882. It is the contention of the learned counsel of the plaintiff that the original license agreement would prevail and rights and liabilities of parties should be determined on that basis only. He states after the privatization of defendant No,1, it is now unlawfully demanding revised license fee at the new rates which is 1500 times more than the original license fee and defendant No,1 has even threatened to unlawfully evict the plaintiff from the suit land. The learned counsel submits that the plaintiff has a prima facie case and the balance of convenience is in its favour and if the injunction application is not granted as prayed then the plaintiff shall suffer irreparable loss and damage.
8. 'The learned counsel for defendant No,1 has argued that defendant No,1 had handed over the suit plot to the plaintiff under special circumstances as envisaged at the time of incorporation of the plaintiff and when the plaintiff and defendant No,1 and other Companies were under the effective control of PERAC. The learned counsel of defendant No,1 has argued that the conditions of both the earlier agreements show that the said agreements were merely a license agreement and not a lease agreement as being now alleged by the plaintiff for the first time The original agreement specifically provided that (a) permission for approval of construction on the suit plot would be made by the licensee on behalf of the Grantor as an agent of the Grantor, (b) the license could be terminated and determined in accordance with the provisions set out in the said agreement or through mutual understanding and on such termination the licensee was to remove all such building materials within a period of two years, (c) the agreement itself stated that this Agreement constitutes a license and confers no tenancy rights, (d) registration and payment of stamp duty would not have any affect and (e) the sublicense was, as indeed it should have been, subject to the rights granted under the license agreement. The learned counsel for defendant No,1 has argued that the revised agreement cannot be considered as unlawful on the grounds of non- registration, nonpayment of stamp duty and non-affixation of the common seal of the plaintiff. He has stressed that no ad valorem stamp duty is payable on license agreement and the same is not required to be compulsorily registered under the relevant laws. He has further stated that even on the original agreement the common seal of the company was not affixed.
9. 'The learned counsel for defendant No,1 has argued that all changes made to the revised license agreement and its execution were within the knowledge of PERAC and all the Trustees/Board members of the plaintiff and the allegation that defendant Nos.2 and 3 acted without the authority of the Board of Trustees or the plaintiff or from PERAC is false which is evident from (a) plaintiff's memo dated 27-1-2004 in response to defendant's No,1 memo dated 19-1-2004 (Annexures D-1/3 and D-1/4 to the written statement) draft minutes of the Board of Trustee circulated by the Secretary on 30-4-2004 (annexure D-1/5 to the written statement), defendant's No, 1 memo dated 13-9-2004 addressed to Managing Trustee of the Plaintiff enclosing copy of the revised draft agreement (annexure D-1/6 to the written statement), (d) draft minutes of 31st meeting sent for approval of the all the Trustees attached to memo dated 25-10-2004 circulated by the Secretary of the plaintiff (annexure D-1/7 to the written statement), (e) defendant's No,1 memo dated '4-11-2004, plaintiff's memo dated 5-11-2004 and Chairman's letter dated 19-11-2004 (annexures D-1/8 to D- 1/10 to the written statement) and (f) drafts of minutes of 32nd 33rd meeting of the Board of Trustees of the Plaintiff (annexures D-1/11 and D-1/12 to the written statement).
10. 'The learned counsel for defendant No,1 has argued that defendants have not acted in collusion with each other and defendant No,1 has not played any fraud on the plaintiff. The changes and the execution were within the knowledge of the plaintiff and PERAC. The revised agreement has been acted upon and revised fees have been paid by the plaintiff to defendant No,1, and defendant No,1 has strictly acted in accordance with the revised agreement and the application of the plaintiff is liable to be dismissed as the plaintiff has failed to make out a prima facie case, balance of convenience is not in favour of the plaintiff and the plaintiff shall not suffer any loss.
11. 'No counter affidavit has been filed by. Defendants Nos.2 and 3.
12. From the above facts and arguments advanced by the learned counsel of the parties, I have prima facie come to the conclusion that the revised license agreement has been executed with the knowledge of the Board of Trustees of the Plaintiff, but the legality of the said revised license agreement can only be determined after the evidence of all the parties are recorded. In the circumstances as aforesaid, defendant No,1 is directed not to evict the plaintiff from the suit plot till the final adjudication of this suit, subject to the plaintiff not committing any breach of the license agreement dated 10-3-2004 and further subject to the payment of the original license fee to the plaintiff at the rate of Rs,2.21 per square yard and deposit of the net revised license fee at the rate of Rs .31. 79 (Rs .34-Rs, 2. 21) per square yard, with the Nazir of this Court, including arrears if any, till final adjudication of the suit. The plaintiff is further directed not part possession, or raise new construction or create any third 'party interest or encumber the suit land in any manner. The Nazir is directed to invest the amounts to be deposited in terms of this order in some profit bearing government securities.