' RAUF AHMAD SHEIKH, J.---It is contended that the order dated 9-7-2012 requiring the petitioner to pay the rent @ Rs,2,05,000 instead of Rs,1,19,790 and the assessment made by respondent No,5 are illegal, against the facts, arbitrary, against principles of natural justice, without jurisdiction and lawful authority and as such are inoperative qua his rights. It was further prayed that the respondents be directed to finalize and fix the fair rent and they be further restrained from taking any adverse action against the petitioner. It was stated that the petitioner obtained a piece of land measuring 8-kanals on lease from respondent No,4 w.e.f 1-2-1996 for development and establishment of a children park in Commercial Centre, Satelite Town, Rawalpindi. The initial period of lease was of five years, which was to be renewed for another period of five years. It is contended that she spent huge amount for development of the plot and installation of playing games for recreation and amusement of the children. The machinery and installation were regularly checked by the Mechanical Engineer approved by the Pakistan Engineering Council as was directed by respondent No,l. The park became a beautiful place due to her effort. The period of lease was mutually extended for another period of five years ending on 31-8-2007 @ Rs,36,603 per month. It was promised that the period would be further extended for anothef period of five years under clause 4 but the Town Nazim instead of fulfilling the commitment, illegally demanded the increase of rent to Rs,2,50,000 per month with 10% increase every year so a petition under section 20 of the Arbitration Act was filed and the learned trial court referred the matter to the District Coordination Officer, Rawalpindi as sole arbitrator in terms of clause 19 of the lease agreement. The petition was dismissed as withdrawn after pronouncement of the award. The petitioner asked the respondent No,4 to implement the award but he neither renewed the lease nor executed the new lease deed and surprisingly issued a notice regarding holding of public auction to grant fresh lease of the park.
The petitioner filed an application under section 14/17 of the Arbitration Act for enforcement of the award but respondent No,4 in spite of service on 4-7-2012 held the auction. A new notice was served upon the petitioner requiring her to match the highest bid and she due to apprehension of an adverse action, accepted the same under protest; that on 7-9-2012 respondent No,4 refused to execute the new agreement deed. With above averments, it is contended that the rate of rent has been enhanced unilaterally without having recourse to mutual negotiations, arbitrarily, whimsically and with ulterior motive to deprive the petitioner of her right; that the impugned order has no value in the eyes of law; that the order of the DCO for execution of new lease deed has been flouted; that new rent has not been assessed in accordance with rules; that unilateral assessment has no binding force; that respondent No,6 was not entitled to take part in the public auction; that the Punjab Local Government (Property) Rules, 2003 are not applicable to the lease in favour of the petitioner; that the petitioner made huge investment on assurance of respondent No,4 for grant of extension in the lease.
2. Respondent No,4 contested the petition. It is contended that after expiry of the five years lease on 31-8-2007, the parties were supposed to enter into negotiations and then to execute new lease agreement in accordance with the terms mutually settled but the petitioner did not enter into negotiations and accept the offer for execution of fresh lease so the park was sealed. She assured to pay the rent @ Rs,90,000 per month so the park was de-sealed and the matter was referred to the sole arbitrator under the agreement, who also approved the same rate i.e, Rs,90,000 with 10% increase per annum and directed the parties to execute the fresh lease agreement but the same could have not been executed in view of the Punjab Local Government (Property) Rules, 2003 so the matter was referred to the District Assessment Committee for determination of the rental value, which fixed Rs,2,00,000 per month and after publication in the newspaper, the lease rights were put to auction. The highest bid of Rs,2,05,000 per month was received. The petitioner was offered to exercise her option for extension of the lease at this rate but she refused.
3. The learned counsel for the petitioner has reiterated the contentions as set forth in Para No,1 of the petition. It is urged that the rate of rent is excessively high, oppressive and unilateral and violative to the lease agreement; that under the lease agreement the petitioner had the right of renewal of the lease after 31-8-2012 and that the bid given by respondent No,6 does not indicate the actual rental value of the plot as he has been installed by respondent No,4 just to give an exaggerated offer to cause harm to the petitioner.
4. The learned counsel for TMA has opposed the petition and contended that after 31-8-2012 the petitioner had no right of extension in the lease and the matter was to be settled on new terms. It is further contended that infact after 2007, she did not enter into negotiations or agreement and has involved respondent No,4 in litigation at different forums. It is urged that after mutual negotiations during the arbitration proceedings, the rate was fixed at Rs,90,000 per month with 10% annually increase w.e.f, 1-9-2007. She did not pay the rent at the said rate and wilfully withdrew the application.
5. The parties are bound by the mutual agreement, which is written in black and white. The first agreement executed on 1-2-1996 was superseded by the subsequent lease agreement which become effective w.e.f, 1-9-2002 to 31-8-2007 (five years). Clause 4 of the said agreement provided as under:-- "The licence would be initially for a period of 10 years, After conclusion of five years, from the date of operation of this licence, the parties will renew the licence for another period of five years on fresh financial terms to be mutually agreed. These terms with regard to the licence fee, will apply to the sixth year and subsequent to that ten percent annual increase will take effect as provided in para No,3 above. The licence may be renewed for any further period by the Tehsil Municipal Administration on mutually agreed terms and conditions as per their procedure hereinafter provided".
' The rate of rent for the 5th year was Rs,4,39,230 per annum as per agreement. This agreement was renewable on new terms to be mutually agreed by the parties. It was further agreed that there would be 10% annual increase on the new rate so agreed to. It is obvious that the rate of rent and new terms were to be settled with mutual consent. Neither of the parties had right to enhance the rent unilaterally nor to extend the lease without consent of the other party. The parties did not agree to new terms so by invoking clause 19, the petitioner moved an application under section 20 of the Arbitration Act and the learned trial court appointed District Coordination Officer, Rawalpindi as sole arbitrator, who pronounced award by holding that after detailed negotiations, the parties had agreed @ Rs,90,000 with 10% annually increase. It was further directed that the parties should execute a new agreement deed but it was not so executed after pronouncement of the award. The petitioner had withdrawn the petition meaning thereby, she had accepted the terms of the award, which inter alia shows that this rent was agreed with mutual consent. In view of this agreement, the rate of rent would have been as under: w.e.f, 1-9-2007 Rs,90,000 w.e.f, 1-9-2008 Rs,99,000 w.e.f, 1-9- 2009 Rs,1,08,900 w.e.f, 1-9-2010 Rs,1,19790 w.e.f, 1-9-2011 Rs,1,31,769 w.e.f, 1-9-2012 till vacation Rs,1,45,135.
The contention that the respondent No,4 was authorized to grant lease through public auction in view of Rule 3 of the Punjab Local Government (Property) Rules, 2003 is without force because the rules cannot have retrospective effect and did not affect the rights and liabilities of the parties under the lease agreement mutually executed prior to the notification. The petitioner had the right to remain in possession till 31-8-2012. She is still holding over so from 1-9-2012, she was required to pay the rent at the newly agreed rate of rent. No new rent was mutually agreed to. The Punjab Local Government (Property) Rules, 2003 would become fully applicable on expiry of the fixed period of lease on 31-8-2012. The property was put to auction. An offer was made for payment of the lease money @ Rs,2,05,000. The respondent No,4 with all fairness offered the petitioner to accept this rate or to vacate it. She accepted it under protest and paid the rent at the same rate. The learned counsel for the petitioner has contended that this rate is highly oppressive. Under rule 16(c) of the Rules ibid, the petitioner being legal occupant has the right of first refusal of the highest bid. Now, it is for her to decide whether this rate is acceptable to her or not. If she opts to retain the lease on this rate, the respondent No,4 would be under obligation to execute the fresh lease deed, for a period of five years w.e.f, 1-3-2013 and in case she opts to vacate the premises, she will do so till 31- 3-2013 after adjustment of the rent in view of the above rate for each year w.e.f, 1-9-2007. The parties would be under obligation to adjust or pay/receive the rent, if paid more or less than the actual rent due, as the case may be. The petition stands disposed of in above terms.