MUNIB AKHTAR, J. --- These three connected Constitutional petitions (filed together by a total of 63 petitioners) arise in the following circumstances. The respondent No. 2, the District Government, Hyderabad, is the owner of a commercial shopping centre, known as the District Council Shopping Centre (hereinafter referred to as the "Shopping Centre"). The petitioners are all tenants of the respondent No. 2, and hold shops by way of tenancy in the Shopping Centre.
They are charged rent on a monthly basis for the shops let to them. By means of a notification published in the Provincial Gazette on 21.1.2010 ("the impugned notification"), the respondent No. 2 enhanced the rent payable by the petitioners manifold in the exercise of powers under the Sindh Local Government Ordinance, 2001 ("the 2001 Ordinance"). Being aggrieved by this notification, the petitioners have filed the present petitions..
2. Learned counsel for the petitioners submitted that the impugned notification, insofar as it applied to them in relation to the Shopping Centre, was clearly unlawful and without jurisdiction. His case was that the Shopping Centre was admittedly located within the area of the Hyderabad Cantonment. Learned counsel submitted that Section 1(2) of the 2001 Ordinance clearly provided that the Ordinance extended to the whole of the Province of Sindh, but did not apply to "the areas notified as Cantonments under the Cantonments Act, 1924... In relation to the matters covered thereunder". He therefore contended that the exercise of powers under the 2001 Ordinance, by which the impugned notification was issued, was patently unlawful in relation to the Shopping Centre. He further submitted that the matter of rent in Cantonment areas was regulated by the Cantonment Rent Restrictions Act, 1963 ("the 1963 Act"), an existing law which comes within the Federal domain. If at all the respondent No. 2 wished to enhance the rent in relation to the Shopping Centre, it could only do so under, and in the manner and to the extent provided for in the 1963 ACt, and not otherwise. This had obviously not been done, and therefore, the purported enhancement of rent in the present case was patently unlawful. Learned counsel also referred to Section 3 of the 1963 Act, which provides that the Act does not apply in relation to certain buildings.
Learned counsel submitted that the Shopping Centre did not come within the scope of Section 3, and therefore the 1963 Act was fully applicable.
3. Learned counsel for the respondents .Did not dispute the fact that the Shopping Centre was located within area of Hyderabad Cantonment. He however, contended that the impugned notification was entirely lawful, and had been properly issued in the due exercise of statutory powers. He relied on Section 116 of the 2001 Ordinance read with the Second Schedule thereof under which the impugned notification had been issued. He submitted that the petitions were not maintainable, and the petitioners had an alternate adequate remedy by way of appeal under Section 190. He also submitted that other tenants had also filed petitions against the ,impugned notification, but the same had been disposed off with the tenants preferring appeals before the Appellate Authority under Section'190. He submitted that the petitions were liable to be dismissed.
Learned State counsel adopted the submissions of learned counsel for the respondents.
4. We have heard learned counsel for the parties and examined the record with their assistance. As noted above, it is common ground between the parties that the Shopping Centre, though belonging to the respondent No. 2, lies within the area of Hyderabad Cantonment. The entire matter that falls for determination turns on a proper interpretation of the relevant statutory provisions. We begin by noting that the impugned notification is issued under Section 116(1) of the 2001 Ordinance, read with entry No. 10 of Part I of the Second Schedule thereof. The nothication purports to enhance the rent of two properties belonging to the respondent No. 2 with effect from 1.1.2010, and the first of the properties so listed is the Shopping Centre. Section 116(1) of the 2001 Ordinance provides as follows:-- "116. Taxes to be levied. - (1) A Council may levy taxes, cesses, fees, rates, rents, tolls, charge, surcharge and levies specified in the Second Schedule: Provided that the Government shall vet the tax proposal prior to the approval by the concerned Council: Provided further that the proposal shall be vetted within thirty days from the date of receipt of the proposal failing which it would deemed to have been vetted by the Government.'
The provisos are not relevant for present purpose, since the petitioners do not contend that the relevant procedural formalities were not corriplied with. Entry 10 of Part I of the Second Schedule reads as follows:-- "Rent for land, buildings, equipment, machinery and vehicles."
5. The case put forward by learned counsel for the respondents is straightforward. He contends that Section 116(1) read with Entry 10 armed the respondent No. 2 with the necessary statutory authority to issue the impugned notification, which is therefore entirely lawful. As noted above, learned counsel for the petitioners contends that there is no such power in relation to the Shopping Centre by reason of Section 1(2) of the 2001 Ordinance, This states as follows (insofar as is presently relevant):- "It extends to the whole of the Province of Sindh other than the areas notified as 'Cantonment under the Cantonments Act, 1924 ... In relation to the matters covered thereunder." . It will be seen that the latter part of Section 1(2), whereby the operation of the 2001 Ordinance is excluded, applies only in relation to cantonments notified under the Cantonments Act,. 1924 ("1924 Act"), and then only in relation to matters covered under the 1924 Act. Both of these conditions have to be fulfilled, and if that is the case, then the 2001 Ordinance stands excluded to that extent. However, in our view', it is not necessary to consider whether, and if so to what extent, the latter part of Section 1(2) may be applicable. As its short and long titles indicate, the 2001 Ordinance is concerned with Local Governments and their regulation.
The Ordinance divides the Province into "local areas", and sets up "Councils" for each local area. It is of fundamental importance to appreciate that the jurisdiction and powers conferred on a Council are granted in the context of, and are limited to, the local area to which it relates. In other words, the jurisdiction of .a Council is wholly territorial in nature. Thus, the power conferred by Section 116(1) to levy taxes, cesses, fees, rents, etc. Is, in the case of each Council, limited to the local area over which the Council has, or can, exercise jurisdiction. This power does not extend (and cannot be extended) to any other area. In relation to rents in respect of lands, buildings, etc., this means that the power of the Council under Section 116(1) can be exercised only in relation to lands or buildings within its local area, and not otherwise. In other words, the power is not exercisable in relation to the property of the Council wherever situated, but only if such property is within its own local area. For example, if Zilla Council X owns property in (say) the local area of Zilla Council Y, it cannot, simply by virtue of its ownership, exercise statutory powers in the area of the other Council. Of course, Zilla Council X has all the rights of ownership vested in it in relation to the property, which it may exercise in accordance with law. However, its rights and entitlements as owner of a property are distinct and separate from its statutory powers as a Council, and the existence of the former does not confer any jurisdiction on it to exercise such powers outside of its local area. This, in our view, is the fundamental errormade by the respondent No. 2 in the issuance of the impugned notification in respect of the Shopping Centre. Simply because the Shopping Centre belongs to the respondent No. 2 does not, and did. Not, give the Zilla Council, Hyderabad the jurisdiction to exercise powers under Section 116 in relation thereto. The Shopping Centre had to be within the local area of the Zilla Council, but that admittedly is not the case since it is within the area of Hyderabad Cantonment. Therefore, the impugned notification, to the extent that it relates to the Shopping Centre, is without lawful authority, and liable to be declared as such.
6. By reason of the view that we have taken of the matter, it is' not necessary for us to consider the submissions made by learned counsel for the parties in relation to the applicability or otherwise of the 1963 Act. Insofar as the objections as to maintainability taken by learned counsel for the respondents are concerned, it is well-settled that a petition is maintainable if the impugned action or order is without jurisdiction or lawful authority. The other petitions (being C.P. 463 of 2010 and C.P.
454 of 2010, disposed off by orders dated 7.9.2010 and 2.11.2010 respectively) that were filed by other tenants were withdrawn and/or disposed off to enable those petitioners, of their own choice, to file appeals under Section 190. In our view, those orders, not being made on the merits of the case, do not stand in the way of a substantive determination of these petitions on the merits.
7. In view of what has been stated herein above, we hereby allow these petitions to the extent of declaring the enhancement of rent made in the impugned notification in relation of the Shopping Centre and in respect of the petitioners to be without lawful authority and of no legal effect. There will however, be no order as to costs. .