MUNIB AKHTAR, J. --- The present application, for interim injunctive relief, has been filed in a suit that arises out of a dispute about a registered lease deed dated 10.05.2010 ("Lease Deed") between the plaintiff as tenant and the defendant ("KPT") as landlord. The property leased is an area measuring about 2007 sq. Meters at Plot Nos. 1 and 2 in the Boat Building Yard Area West Wharf ("the suit property"). The suit property was earlier leased out to the plaintiff under different leases/agreements of varying periods, and the present lease is for a period of 10 years, from 20.05.2009 to 19,05.2019. (It ' appears that although KPT had agreed to renew the lease on 23.07.2009, the Lease Deed was actually executed sometime later, as noted above.) As will presently become clear, the dispute between the parties centers on the proper interpretation and application of Clause 4 of the Lease Deed, which sets forth the purpose of the lease, and is in the following terms:-- "The Tenants shall at their own expenses complete and finish buildings fit for accommodation of Water Tank Machinery For Pumping And Filling Water And Storage Facilities and shall use the said buildings with all required and proper walls drains and other conveniences thereto so that the same may be in every respect In accordance with the terms of this Deed so that the said buildings and they will not add to or alter the said building and conveniences either externally or internally without the consent in writing of the Deputy Chief Engineer/Executive Engineer of the Board herein after referred to as the Executive Engineer and as required under clause (5) next following. This will not apply to minor alterations in decorative features not requiring the prior permission of the City Distt. Government Karachi, Karachi Building Control Authority or other Competent Authorities."
[emphasis in original]
2. The case of the plaintiff is that it had filed its building plans for construction (including that of storage facilities) at the suit property for approval by KPT. That approval was accorded by the latter on or about 17.11.2009, and communicated to the plaintiff on or about 24.11.2009, with Directions that the latter obtain the necessary approval from the Karachi Building Control Authority ("KBCA"). The plaintiff thereafter applied to the latter. It appears that some correspondence was also exchanged between KPT and KBCA on the matter. On 27.05.2010, the Town Planning Section of KBCA accorded its no objection to the plans submitted for approval, subject to fulfilment of certain conditions as specified. Eventually, KBCA by its letter dated 29.01.2011, granted its approval for the construction on the suit property in accordance with the approved plan. It appears that the plan was approved as submitted by the plaintiff, i.e., as duly approved by KPT.
3. In the meanwhile 1 and this led to the filing of the present suit on 26.11.2010 - the plaintiff was served with a notice on 21.10.2010 by KPT. By means of the impugned notice, KPT has purported to cancel its approval for the building plans that had earlier been granted by it on 17.11.2009. The reason for cancellation is stated in the impugned notice as follows:- It has been observed that you are not carrying out construction work at site for the purpose of Water Tank Machinery for pumping and filling water and storage facilities. Instead of storage of water facilities you are violating the lease purpose and doing construction work for storage other than water."
This issue constitutes the heart of the dispute between the parties. It appears that thereafter, the parties entered into some correspondence, and also held certain meetings. The plaintiffs stand was, and is, that it was acting properly, and within the scope of the Lease Deed. KPT on the other hand, contended, and contends, that the construction of storage facilities for storing something other than water at the suit property is outside the scope of the Lease Deed. In addition, KPT also (subsequently) took the objection that the plaintiff had started construction even prior to the permission required to be obtained from KBCA.
4. Learned counsel for the plaintiff narrated the facts as above, and contended that the plaintiff was engaged in the business, inter alia, of storing and warehousing agro based and other temperature sensitive produce for import and export, and it was for this purpose that the storage facilities were being built on the suit property. He submitted that one essential element of the temperature control system was water, which required the construction of a large water tank, and in fact, a water tank having a capacity of around 55,000 gallons had already been constructed on the suit property. His case was that the storage facilities as above were well within the scope of the purpose of the Lease Deed (Clause 4), and the specifications for the building as per Appendix A to the Lease Deed. He submitted that KPT itself had accorded approval for the building plans, and had also corresponded positively in this regard with KBCA. Learned counsel contended that the meaning and interpretation now being ascribed to the Lease Deed by KPT was clearly erroneous.
KBCA itself had also granted approval, and thus there was no hurdle in the way of the construction going ahead as planned and approved. He submitted that the plaintiff had already made a huge investment, and ' had imported specialized machinery worth tens of lacs of rupees for the purpose of the storage facilities. He also submitted that such facilities were not available elsewhere at Karachi port, and the project was fully supported both by the Government and also by the importers and exporters whose goods and consignments required storage in a controlled, temperature sensitive environment. He submitted that all the ingredients for the grant of interim relief existed in favour of the plaintiff, and prayed that the application be allowed.
5. Learned counsel for the defendant KPT opposed the grant of any interim relief. He submitted that the scope and purpose of the Lease Deed was clear, and it was confined to the construction of water storage facilities only. The construction now underway it the suit property was beyond the scope of the Lease Deed, and hence impermissible. Learned counsel submitted that the rental rates for the suit property had been computed and were being charged by KPT on the foregoing basis; had the intent been to allow the plaintiff to use the facilities for storing something other than water, KPT would have charged a different (higher) rental rate. Learned counsel also submitted that the plaintiff had started construction without any approval from KBCA being in place.
6. I have heard learned counsel for the parties, and examined the record with their assistance.
There appear to be two issues that presently require attention and determination. Firstly, what is the proper scope and meaning of the purpose of the Lease Deed, as set forth in clause 4 thereof, and has the plaintiff acted in a manner contrary to, or beyond the scope of, such purpose?
Secondly, what is the effect, if any, of the fact that the approval for the building plans was accorded by KBCA on 29.01.2011, whereas the plaintiff started construction activities on the suit property prior to that date? I take up these questions in the foregoing order.
7. The terms of Clause 4 of the Lease Deed have already been reproduced above. The proper interpretation and meaning of the terms of a contract is, ultimately, a question of law to be decided by the Court. For this purpose, the Courts have developed Certain well-known rules of interpretation, and the first issue that has been raised in the present case requires an application of those rules and principles to Clause 4 in order to ascertain its true and proper meaning. As is obvious, the key difference between the parties lies in the meaning to be ascribed to the words "and storage facilities". According to learned counsel for the defendant, the proper meaning of these words is they are limited to the storage of water. On the other hand, according to learned counsel for the plaintiff, these words have a broader meaning, and apply to storage facilities designed to store goods or commodities other than water. These words cannot however, be regarded in isolation from the words immediately preceding them. The purpose of the Lease Deed is stated in the entire phrase, "Water Tank Machinery For Pumping And Filling Water And Storage Facilities", and it is the meaning of this phrase that has to be ascertained. In my view, there is an ambiguity with regard to this phrase, and it is not immediately obvious or clear that it has the meaning put forward by learned counsel for the defendant. Had that been so, the phrase could have been worded along some such lines as follows: "Machinery For Pumping And Filling Water And Storage Facilities for Water Tank", but that obviously is not the case. The correct legal meaning of the phrase therefore requires to be ascertained.
8. As noted above, the Lease Deed presently under consideration was preceded by a number of other agreements/lease deeds between the parties. In my view, any antecedent agreement(s) between the parties on the same subject-matter can, in appropriate circumstances, shed light (by forming part of the relevant factual background) on the proper meaning of the word used in the contract actually under consideration. This is all the moreso when the subject-matter of the contract is immoveable property. The defendant has, in its written statement, reproduced the purposes of the leases/agreements between the parties that were entered into prior to the Lease Deed. It appears that the relationship between the parties in this regard dates back to 1968. Originally, the purpose for which the suit property was leased to the plaintiff was "Water Tanks open storage for feeding main plant on Plot No. 13, West Wharf'. It appears that the plaintiff had taken Plot 13 on lease as well (which, it seems, is across the road from the suit property), and was carrying on its business activities on that plot. Shortly after the initial lease, the purpose of the lease was modified, and became: "Water Tanks Machineries for pumping and Feeding Water and Storage area for feeding the main Plant on Plot No. 13 Industrial Area at West Wharf'. Thereafter, in the subsequent lease deeds, this language was modified slightly from time to time, but in substance remained the same as above. Thus, in the lease deed last preceding the Lease Deed, the purpose of the lease (which ran from 20.05.1999 to 19.05.2009) was stated as: "Water Tank Machinery for pumping and filling Water and Storage for feeding on Plot No. 13 Industrial Area at West Wharf'.
9. It will be seen from the foregoing that, the purpose for which the suit property was leased prior to the Lease Deed was firmly tied to Plot No. 13. There could be no doubt in that situation that the permissible activity on the suit property was limited to the construction and operation of a water tank (and support machinery) that was ancillary to the plaintiffs business activities on Plot No. 13.
However, that situation is no longer applicable. It is expressly noted in the written statement, in para 7 (in the section titled "Facts of the Suit Property"), that "Plot No. 13 (located in front of Plot Nos. 1 & 2) was not used for Oil Factory/Oil Plant where Water was feeding for the Oil Factory in past", and this was the situation in which the Lease Deed was executed.
10. In my view, when the foregoing background factual matrix (i.e., the antecedent agreements/leases) is kept in mind, there can be little doubt that the reasonable interpretation is that the purpose of the !Ease has undergone a change from the position previously prevailing.
Earlier, the purpose of the suit property appears to have been to serve as no more than an adjunct to the business activity on Plot No. 13. In the earlier situation, there therefore appeared to be a commercial or business reason why the purpose of the lease was to be limited to the construction and operation of a water tank and allied facilities. That nexus however, no longer exists. The purpose of the suit property (and thus, the Lease Deed) has been decoupled from Plot No. 13. What therefore would be the business sense now of regarding the purpose of the Lease Deed being limited as before? It is obvious that constructing, maintaining and operating a water tank is not in and of itself one of the businesses of the plaintiff. The water tank has always been ancillary to, and serves the purpose of, some business activity of the plaintiff. In Cargill International SA v.
Bangladesh Sugar and Food Industries Corporation [1997] EWCA Civ 2757; [1998] 1 WLR 461, the (English) Court of Appeal observed as follows:--- "On the other hand, modern principles of construction require the Court to have regard to the commercial background, the context of the contract and the circumstances of the parties, and to consider whether, against that background and in that context, to give the words a particular or restricted meaning would lead to an apparently unreasonable and unfair result." (per Potter, LJ) "water tank" that has no means for storing water. But water is obviously stored in a water tank for some purpose. The earlier lease deeds, which also used this term, specifically provided that the storage of water was for the purpose of "feeding" Plot No. 13. It is also to be noted that the earlier lease deeds do not appear to have used the words "storage facilities". Thus, earlier, water was to be stored on the suit property in a water tank, and used to "feed" Plot No. 13. This purpose appears no longer to exist (or at least, is not the expressly stated purpose of the lease), yet water continues to be stored in the water tank at the suit property. In this situation, the reasonable and commercially sensible interpretation of Clause 4 is that the purpose for which the water is being stored (and used) is for the "storage facilities", which can only mean storage of commodities and goods other than the water itself.
11. In my view therefore, the first question requiring determination (see para 6 above) must be answered in favour of the plaintiff, and against the interpretation and meaning put forward by the defendant. Insofar as the second question is concerned, the fact of the matter is that it appears that KBCA has accorded its approval by means of the letter/order dated 29.01.2011. Learned counsel for the defendant was not able to point out any specific deviation from, or violation of, the approved building plans. It is not even the defendant's case that the plaintiff started construction work before the plans were approved by KPT itself. Therefore, even if the plaintiff started construction activity before the KBCA approval was formally in place, that matter appears subsequently to have been regularized, and nothing much turns on this objection.
12. In my view, the plaintiff has been able to make out a prima facie case. The plaintiff has also placed on record details of the expenditure already incurred by it in respect of the construction activity, and it would appear that without the completion of the storage facilities, the lease of the suit property would essentially be without any utility.
Therefore, all three of the ingredients for interim relief have been made out. Accordingly, the present application is allowed subject to the condition that the construction activity shall be carried out strictly in accordance with the approved plans, and applicable rules and regulations.
Needless to say, the observations made herein are only of a tentative nature, and the suit shall be tried and decided on its own merits in terms of the issues framed by the Court of the pleadings of the parties, and on the basis of the evidence led by the parties at the trial.
Interim injunction .