' SHAMS MEHMOOD MIRZA, J.--- This writ petition challenges and makes a prayer that order dated 31-10-2011 passed by respondent No,2 as also letter dated 19-10-1993 written by respondent No,3 be declared to be void, illegal and without lawful authority with further prayer that respondents Nos.1 and 2 be directed to deliver the possession of plot No,30 to the petitioners.
2. The principal question involved in this writ petition is the availability to the Lahore Development Authority (the LDA) the power and authority to impose penalties on the petitioner for allegedly failing to construct the commercial building within the time specified in exemption agreement dated 20-5-1981. The relevant facts of the case are that petitioner No,5 was owner in possession of land measuring 4 Kanals and 219 Square feet comprised in Kharas No,5193/1, 7593/5194/3, 7590/5197/2/1 situated in mouza Qilla Gujjar Singh Tehsil and District Lahore. The Lahore Improvement Trust, the predecessor-in-interest of the LDA notified the Kashmir-Egerton Road Scheme on 26-7-1968 and included the land belonging to petitioner No,5 in the said scheme.
Accordingly LDA entered into an exemption agreement dated 20-5-1981 with petitioner No,5 in terms whereof petitioner No,5 surrendered 1 Kanal, 6 Marlas 221 Square feet of his land to the LDA as proportionate contribution for roads and open spaces and respondent No,1 exempted plot No,30 measuring 2 Kanals, 14 Marlas, 40 square feet in the Kashmir-Egerton Road Scheme to petitioner No,5 in lieu of his interest to the extent of 2/3rd approximately of his ownership in the original plot (4 Kanals, 219 Square feet) on payment of development charges @ of Rs,40,000 per. Kanal. Petitioner No,5 paid Rs,180,882.23 to the LDA on account of development charges including 5% corner surcharge as plot No,30 was to abut on two roads. In terms of the exemption agreement dated 20- 5-1981, petitioner No,5 was required to construct building on plot No,30 within a period of four years as per building plan approved by the LDA. The Secretary, Housing and Planning department, respondent No,3, issued various instructions on 25-7-1983, 20-1-1985 and 19-10-1993 prescribing various rates of penalties/surcharge to be paid by the owners of plots who were allowed extension in building period.
3. It is the case of the petitioners that the possession of plot No,30 was never handed over to them although letters dated 29-7-1993 and 4-4-1994 in this regard were addressed to the LDA to hand over the possession of plot No,30 and to built 40 feet wide road on one side of the plot. In reply, the LDA vide letter dated 30-7-1994 declared that the matter of possession will be decided on clearance of dues and payment of up to date surcharge on the building period. This prompted the petitioners to serve legal notice dated 10-9-1996 on the LDA followed by letter dated 26-11-1986 whereby it was asserted that the penalty could not be levied on the petitioners as neither the possession of the exempted plot had been given nor the 40 feet wide side road was constructed.
The then Director General, LDA on receipt of legal notice dated 10-9-1996 recorded the following observations
1. Since possession has not been given how can we charge surcharge?
2. Possession be given as the exemption has been done long ago.
3. Road be constructed according to LDA plan as quickly as possible.
4 Building period of 3 years be (illegible) after completion of the road.
' Despite the observations recorded by the then D.G. LDA, the matter could not be resolved and finally the petitioners filed writ petition No,18934 of 2005 which was disposed of on 2-4-2008.
Feeling aggrieved by the said decision, the petitioners filed CPLA No,645 of 2008 which was disposed of on 1-8-2011. The relevant portion of the order is reproduced hereunder:--- ' In view of the above, this petition is disposed of. The Director General LDA shall grant full opportunity of hearing to the petitioners and decide the matter within a period of three months by dealing with all the questions/objections/issues raised by the petitioners including the above recorded six propositions.
' The six propositions recorded by the Hon'ble Supreme Court in leave granting order dated 1-8-2011 are reproduced below:--- I. There is no statutory base either in the LDA Act, 1975 or in any other law imposing penalty as envisaged in para 4 of the impugned letter dated 19-10-1993; II. There is no lawful basis for imposition of the penalty of the delayed construction, as admittedly LDA never delivered possession of the plot to the petitioners and also did not complete the development works by constructing the side road along with the plot. III. There is no warrant in law for giving retrospective effect to the letter dated 19-10-1993; IV. Without conceding, there is neither a reason nor a lawful basis for levy of penalty beyond the rate specified for the 5th year; V. The rate of penalty in un-reasonable, perverse, and arbitrary; VI. The levy of penalty is discriminatory because in similar eases extension was allowed without the penalty.
4. Pursuant to the direction given by Hon`ble Supreme Court, the Director General of LDA decided the matter and vide impugned order dated 31-10-2011 and rejected all the grounds urged by the petitioners. For the completeness of facts, it is stated that the plot in question was gifted by petitioner No,5 to petitioners Nos.1 to 4 vide gift deed dated 25-6-2005 who also furnished bank guarantee in favour of the LDA pursuant to its decision dated 8-9-2006.
5. The respondents have filed their parawise comments in this petition wherein the stance of the petitioners has been controverted.
6. It was contended by learned counsel for the petitioners that LDA was not entitled/empowered to levy penalties on the petitioners either under the terms of exemption agreement dated 20-5-1991 or LDA Building Regulations, 1984. It was further stated that LDA is a statutory body which is controlled and managed under the provisions of LDA Act, 1975 and as such it was not bound by the directions issued by respondent No,3 to impose the penalties on the owners of plots in its schemes.
It was also the case of the petitioners that in any event there was no jurisdictional basis for imposing penalty on the petitioners as possession of the plot had not been delivered to the petitioners and the 40' wide side road was not even approved for construction till 8-9-2006. It was further submitted that even if the impugned levy of penalties on the basis of letter dated 19-10-1993 be considered to be valid, the said penalties could not be imposed beyond the period of five years as there was no specific provision in the said letter for imposition of penalty beyond the said period. Learned counsel for the respondents, on the other hand, supported the impugned order and took the position that the possession of the plot in question had been delivered to the petitioners. Learned counsel for respondents also referred to clause 5 and clause 14 of the exemption agreement dated 20-5-1991 to argue that the petitioners were bound to construct a commercial building within a period of four years in accordance with the provisions of the sanctioned scheme.- He further stated that under the terms of the said agreement any default by the petitioners of the terms of the exemption agreement entitled the LDA to resume possession of the plot in question and to forfeit the amount paid by the petitioners. It was further stated that the LDA is bound to follow the directions of the Government as conveyed through letter dated 19-10- 1993 for imposition of the penalty. He, however, submitted that despite the default committed by the petitioners a lenient view was taken and instead of canceling the exemption of the plot in question in favour of the petitioners, late payment surcharge was levied.
7. The arguments of the learned counsel for the parties have been heard and the record has been perused with their able assistance. It is clear that neither LDA Act, 1975 nor LDA Building Regulations, 1984 empowered the LDA to impose penalties on the petitioners consequent upon the alleged default by them in raising construction on the plot in question within the stipulated time. Learned counsel for the respondents could not refer to any Rule, Regulation or Notification of the LDA which empowered it to impose the said penalties. It is an established position of law that a penalty cannot be imposed in the absence of a statutory instrument. It is further clear that the LDA being a statutory corporation had to act within the four corners, of LDA Act, 1975. None of the provisions of the LDA Act allowed the LDA authorities to follow the directions conveyed by the Government through letter dated 19-10-1993 prescribing imposition of the penalties. In any event, the parties entered into exemption agreement on 20-5-1981 and therefore, letter dated 19-10-1993 could not have been applied retrospectively to the case of the petitioners. At best the respondents could have resorted to the penal consequences provided for in exemption agreement dated 20-5-1991 by taking possession of the plot in question. However, this option was not exercised and instead penalties were imposed on the petitioners. In a judgment reported as Nagina Silk Mill, Lyallpur v. (1)
The Income Tax Officer, A-Ward Lyallpur and (2) The Income-Tax Appellate Tribunal, Pakistan PLD 1963 Supreme Court 322, it was held that the Courts must lean against giving a statute retrospective operation on the presumption that the Legislature does not intend what is unjust. In the present case, an executive instruction contained in a letter written by Secretary Housing and.
Physical Planning Department was being given retrospective effect by LDA which being a statutory corporation was even otherwise not bound by such instructions. The learned counsel for the respondents could not satisfactorily explain as to how LDA felt bound to levy surcharge/penalty on the owners of plots pursuant to the directions of Secretary Housing and Physical Planning department.
8. It may relevantly be pointed out that petitioner No,5 was not a normal allottee but was an exemptee as his area was taken over by the LDA for the Kashmir Egerton Road scheme and as such he could not have been treated at par with other persons who were allotted plots in the said scheme. In a judgment reported as Ishrat Jehan and 5 others v.
Province of Punjab through Secretary Housing, Physical and Environmental Planning Department, Lahore and 5 others 2009 YLR 2349, it was held that ' So far as the other contentions of the learned A.A.-G. Are concerned the condition for construction of the plot could not be imposed on the petitioners because they are not allottees of the plots' in the scheme like general allottees. They are allottees of the plots against their compensation of acquired land by the respondents and no condition could be imposed on them like others. So there was no question of cancellation of plots on the violation of any condition by the petitioners.
9. Again, the penalty being imposed on the petitioners was in the nature of unjust enrichment in as much as the LDA failed to deliver the possession of the plot in question to the petitioners and also did not built the side road on the plot in question. Being not at fault, the LDA could not have required the petitioners to pay the amount of the penalty and that too on the basis of a letter by the Secretary, Housing and Physical Planning department which it was not obliged to follow. In a judgment reported as Noor-ul-Hassan Khan v. Lahore Development Authority through Chairman and another 2013 CLC 100, it was held that:--- ' The alleged claim by the respondents is not a tax recoverable by the respondents/Lahore Development Authority. It was a price for an excess land which formed part of the plot in the year 1998 when the allotment in the name of the appellant was made. Nothing prevented the respondents from the measurement of the plot at that time in the year 1998 and charge the price of the excess area at the spot in the year 1998. Had this process been undertaken by the respondent in the year 1998, the price chargeable for the excess area should not have been more than the price at the rate mentioned in the allotment letter. Merely because the respondents themselves delayed the process of measurement of the extra land forming part of the plot of the appellant and took twelve years in raising the demand that too after issuing an office order dated 28-5-2001 embodying a policy for assessing the prices of the future cases by the respondents does not clothe the respondents-Lahore Development Authority with any lawful authority to raise demand against the appellant for the recovery of price at 40% above the current rate determined by the Deputy Commissioner in the locality of the property. This act of the respondents is totally unjust, unfair and violative of-the principles of equity and justice and amounts to applying the doctrine of /unjust enrichment in favour of the respondents. No action of any statutory authority or a local body simply based upon a policy/office order can be justified with approval if in its very purpose, it purportedly defeats the well-known principles and norms touching the sphere of Rule of Law. Any order or action of such a public authority which thus glitters so colourful that the glimpses of arbitrariness cannot be shed away therefrom cannot be given protection by the Courts of law which are relentlessly functioning to administer justice only and solely in accordance with the Constitution and the law. This Court cannot approve this course of action adopted by the respondents.
10. It may also be noted that Director General, LDA did not satisfactorily answer the six propositions laid down by the Hon'ble Supreme Court and failed to decide the basic issue regarding the power available with the LDA to impose the penalty on the petitioners. Reliance by the Director General, LDA on section 17 of the LDA Act, 1975 was also misplaced as it does not support the case of LDA that it was bound to follow the instructions of Secretary Housing and Physical Planning department more so when LDA did not frame any rules or regulations in terms of section 28 read with sections 44 and 45 of the LDA Act, 1975 in regard to the imposition of penalties. Similarly, the issue with regard to the retrospective operation of letter dated 19-10-1993 was also not addressed in the impugned order.
11. During the course of arguments the learned counsel for the petitioners took the position and submitted that if at all penalties ought to be imposed, the same cannot be recovered beyond the period of five years as mentioned in letter dated 19-10-1993. At this juncture this Court asked the learned counsel for the petitioner to seek instructions from his client regarding the payment of penalties for five years as stipulated in letter dated 19-10-1993. On instructions, the learned counsel for the petitioners submitted that the petitioners are agreeable to the payment of the penalties without prejudice to their afore-stated position that penalties could not be levied by LDA. He further stated that amount of penalties comes to Rs,1,556,545. Learned counsel for the LDA sought an adjournment to obtain instructions in the matter and to verify the amount. Today, the learned counsel for the respondents stated that the petitioners are liable to pay the amount of penalties till date. The stance taken by the LDA is not acceptable as letter dated 19-10-1993 itself stipulated that penalties could only be levied up to five years. It is an admitted fact that the amount of penalties calculated at the rate A mentioned in letter dated 19-10-1993 come to Rs,1,556,545. The demand by the LDA for imposition of penalties beyond the fifth year is of course an afterthought and as such travels outside the scope and intent of letter dated 19-10-1993. The petitioners are willing to make the amount of penalty as per letter dated 19-10-1993, therefore, the matter stands resolved.
12. In the result, this writ petition is allowed and LDA is directed to deliver a possession memo. To the petitioners specifying the details of the property handed over to the petitioners after payment by the petitioners of the amount of Rs,1,556,545 within a period of two months. The petitioners are directed to construct the building on the said plot within a period of four years from the date of execution of the possession memo.