The facts that give rise to these suits, one for declaration and injunction and the other for possession and compensation to between the same parties, arise in respect of a plot of land measuring about 500 sq. yards, situate in a part of Karachi known as Kharadar and belonging to the Pakistan Western Railway.
2. On 17th April 1963, the Railway invited applications from members of the public for the lease of this plot for purposes of installing a public weigh-bridge at its Kharadar Goods Shed on the Karachi Circular Railway for weighing vehicles, carts, etc. The weigh-bridge was to be installed at the expense of the lessees the Railway providing the plot. Messrs Mizan Corporation, one of the parties to these two suits, responded to the notice and applied in consequence of which they were called upon by the Divisional Superintendent of the Railway to appear before them on the 11th of May 1963.
On the 16th of September 1963, Messrs Mizan Corporation were granted the lease being required to instal the weigh-bridge within two weeks from the date of the receipt of the latter. In pursuance of these directions, the Corporation were handed over possession of the plot on the 29th of September 1963. The case of the Corporation is that as the Railway did not have the forms of lease agreement they produced a form of a licence which was then signed, the understanding being that the agreement was on the basis of a lease. The Corporation thereafter installed the weigh- bridge within the stipulated period and since 23rd September 1963 claim to have been in exclusive and peaceful possession having invested Rs, 55,000.00 until 26th June 1964 when the Railway served a notice on them purporting to be in pursuance of clause 10 of what they described as the agreement for licence of the plot in dispute intimating to the Corporation their intention to terminate the licence and calling upon them to deliver possession and the constructions raised on it. The Corporation filed a suit in the Court of the learned III-Civil Judge First Class, Karachi, for declaration and injunction, to declare illegal the notice dated the 26th June 1964, that they were entitled to exclusive possession of the plot and the structure thereon and to restrain the Railway from interfering with their possession. In return the Government of Pakistan through the Railway filed a suit against the Corporation and two of its partners in this Court on the 1st April 1965 on the basis of the lease agreement dated 10th October 1963, and the notice dated 26th June 1964 claiming compensation for use and occupation of the plot as having been fixed at Rs, 3,500.00 p.m, which the Corporation had failed and neglected to pay and that after the termination of the licence by the Railway and the Government the possession of the Corporation was illegal, praying that the Corporation and those claiming through them be ejected from the plot in dispute, vacant possession be handed over to the Railway and for a decree for a sum of Rs, 60,433.33 as compensation for use and occupation of the plot from 23rd September 1963 to 28th February 1965 and for mesne profits from 1st March 1965 till vacant possession at Rs, 3,500.00 per month.
3. On the contentions between the parties, the following issues were framed in the suit filed by the Government of Pakistan : (1)Whether the defendants are licensees or lessees of the plaintiff in respect of the plot in question?
(2)(i) Whether the defendants have carried out construction of a permanent nature and made installations on the plot in question? If so, what is the effect?
(ii)Whether the defendants have invested Rs, 65,000 on the plot? If so, was it done at the instance and with the permission and knowledge of the plaintiff?
What is the effect of such investment?
(iii)Whether the alleged licence in respect of the plot is irrevocable as stated by the defendants? If so, what is the effect?
3. Whether there was understanding between the plaintiffs and the defendants that plaintiffs will charge nominal rent in respect of the plot?
(4)(i) Whether any further amounts are payable to the plaintiffs in respect of the plot as alleged by them?
(ii) Whether there was understanding between the parties that the investments made by the plaintiff's on the plot will be considered for fixing any additional amounts payable as rent?
(5)(i) Whether the demand of Rs, 3,500 per month by the plaintiff is illegal and mala fide as alleged?
(ii) Whether the defendants aggrieved at any time to pay Rs, 3,500 per month in respect of the plot to plaintiffs?
(6)Whether the plaintiffs have acquiesced in the rights of the defendants to hold plot without additional payments per month or otherwise? If so, what is the effect?
(7)Whether the plaintiffs are estopped from questioning the rights of the defendants on the plot or from making demands as alleged?
(8)Whether the defendants can be evicted from the plot in question?
(9)Whether the matter in issue is also directly in issue between parties in Civil Suit No, 137/64 (Suit 226 of 1968) as alleged. If so, what is the effect?
(10) Is the suit incompetent and not maintainable?
(11) Whether plaintiffs are entitled to the sum of Rs, 60,433.33 or any other sum?
(12) To what relief is the plaintiff entitled?
The following issues were framed in the suit filed by Messrs Meezan Corporation : (1)Whether the plaintiffs are lessees of the defendants in respect of the plot premises?
(2)Whether the plaintiffs are licencees of the defendants in respect of the plot premises?
(3)Whether the plaintiffs have constructed a work of a permanent character on the plot and spent amounts on such construction etc.?
(4)Whether the plaintiffs are in exclusive possession of the plot premises in question including the built-up area therein?
(5)Whether the notice dated 26th June 1964 of the defendants is legal and vaild? If not, to what effect?
(6)Whether the defendants are entitled to summarily evict the plaintiffs from the plot premises in question, including the built-u? area therein, as threatened by them.
(7)What relief?
The following were the consent additional issues : (1)Whether the plaintiffs have sole and exclusive right to carry on the business of weighing public vehicles at or near the Kharadar Goods Shed? If so, what is the effect?
(2)Whether the defendant have acted ,mala fide. If so, to what effect?
4. Suit No, 226 of 1968 by consent of the parties transferred to the file of this Court and consolidated and heard with Suit No, 85 of 1965 by the order dated the 4th April 1968 passed in Suit No, 85 of 1965. The stage of the suit there was that the evidence of Mr. Thomas Edwin Gee (Exh. 21), Muhammad Sabir (Exh. 25), Muhammad Abdul Sattar Gazdar (Exh. 31) and Shafqat Hussain (Exh.
37) had been recorded in support of the case of the plaintiff Corporation. Mr. H. U. Lodhi Exh. 42 was examined on behalf of Railway. In this Court in Suit No, 85 of 1965 the Government of Pakistan- plaintiff examined Siraj Ahmad Khan, Exh. 5 a clerk in the office of the Divisional Super-intendant of Pakistan Western Railway, Karachi in support of their case and the Corporation examined Muhammad Sharif (Exh. 13) a Land Surveyor, K. M. C., Nasim Ahmad, Exh. 16 Manager of the Corporation and Dr. Inayat Husain Exh. 17 son of original defendant Shafqat Husain who died on 3rd December 1966. On a comparison of the issues framed in both the suits it will be seen that they are identical and my findings on the issues in Suit No, 85 of 1965 should therefore be taken to be my findings on the issues in Suit No, 226 of 1968. My findings accordingly on the relevant issues are : Issue No, 1.--Defendants are lessees of the plaintiff in respect of the plot in dispute.
Issue No, 2 (i).--Yes.
Issue No, 2 (ii).--Yes with the consent and knowledge of the plaintiff.
Issue No, 2 (iii).--Does not arise in view of my finding on Issue No, 1.
Issue No, 3.--Yes.
Issue No, 4(0.--Yes. As below. Issue No, 4(ii).--Yes.
Issue No, 5(i).--Yes. The demand is without foundation and mala fide.
Issue No, 5(i1).--No, Issue No, 6.--No, Issue No, 7.--Not pressed. Issue No, 8.--As below.
Issue No, 9.--Does not arise in view of the order of the consolidation of both the suits.
Issue No, 10.--Not pressed. Issue No, 11.--No, Issue No, 12.--As below. Additional Issues Issue No, 1.--No, Issue No, 2.--Yes. Reasons
5. Issue No, 1.--The case of the Government of Pakistan that the agreement between the parties is a licence with regard to the plot in dispute is based on Exh. 6, dated the 10th of October 1963. Exh. 6 is signed by Mr. M. F. Khan, the then Divisional Superintendent of the Pakistan Western Railways, two partners of the Corporation and attested by Siraj Ahmad Khan, a clerk in the Divisional Superintendant's office. It will be observed that the agreement had been executed on a form to be used for "licensing land for the purpose of stacking materials, such as fuel, ballast, stone etc. prior to registration for despatch". The important details of this document are that the Corporation was permitted to use the land measuring 500 sq. yds. of which "the rent will be fixed afterwards", the agreement being for a term of three years commencing from the 30th September 1963, a date prior to the date on which the agreement was in fact executed. H. U. Lodhi for the Railway (Exh. 42) has stated that the plot in question was given to the Corporation as a licensee in 1963, that he was present when Mr. M. F. Khan, D. S., since deceased, interviewed the partner of the Corporation. He admitted that physical possession of the plot was handed over to the Corporation in 1963, and that it was a fact that the Corporation had raised a pacca construction over the plot with the consent and knowledge of the Railway Department. Mr. Siraj Ahmad, another witness examined on behalf of the Railway, the attesting witness to Exh. 6 stated that the rent of the plot was not fixed at the time as the market value was not available and that the rent was to be fixed later by the Divisional Superintendent, that he was not present during the deliberations between the Corporation and Divisional Superintendent, that possession was given to the Corporation on 20th September 1953 before the licence was granted and although the weigh-bridge had not yet been fixed when Exh. 6 was signed by the parties the Corporation_ had started preliminary construction on the plot.
6. The case of the defendants that they are lessees and not the licensees is established by overwhelming documentary and circumstantial evidence, the dominating factor being Exh. 7 which is a notice inserted in a daily newspaper by the D. S. of the Railway by which "applications are invited for lease of a plot of land for installation of a public weigh-bridge at Kharadar Goods Shed at Karachi Circular Railway. The weigh-bridge will be used by merchants for weighing vehicles, trucks and carts on payment. The Railway will lease a plot of land on rent and the weigh-bridge will be provided and installed by the applicants". Apart from this in their letter dated 16th September 1963 (Exh. 10) addressed on behalf of the Divisional Superintendant to the Corporation the reference is to a "lease of plot of land for the installation of a weigh-bridge" Exh. 13 dated 25-9-63 is a letter addressed by the Executive Engineer of Karachi Circular Railway construction, to the Assistant Engineer, Karachi Circular Railway, with reference to "lease of a plot of land" directing the Assistant Engineer to make over possession of the plot demarcated for the installation of a weigh-bridge at Kharadar to the Corporation. It is only for the first time and quite suddenly that on the 26th June 1964 the Railway addressed the Corporation by what they considered a notice in pursuance of clause 10 of the agreement expressing their intention to determine the licence and called upon the Corporation to deliver possession of the land and the premises situated thereon.
Thereafter the Railway has maintained the position that Exh. 6 between the parties is a licence and not a lease.
7. There is no difficulty in the circumstance in determining that Exh. 6 is a lease in regard to the plot in dispute and not a licence. The evidence examined to which I have referred establishes the test for decision in such a case whether the Cor-poration is a lessee and not a licensee of the Railway.
On the showing of the witnesses of the Railway exclusive possession was given to the Corporation though subject to certain reservations. The agreement was not merely for the use of the property in a certain way or on certain terms while the possession and control was of the Railway. It was put in exclusive possession of the Corporation and although there were no express words to that effect the nature of the acts to be done by the Corporation required exclusive possession of the plot in dispute. A similar situation arose In re: Burmah Oil Co. before the Full Bench presided over by that distinguished and revered jurist Sulaiman, C. J., the consideration being an agreement to give temporary use of land on monthly rent described as a licence for constructing petroleum installation to which the licensor was to have access at any time and the licensee was to rebuild or repair at licensor's request in which no right to transfer or sublet was given to the licensee and on breach of condition of the terms of the agreement the licensor was entitled to determine the licence by seven days' written notice and to enter into possession. It was held that the document in1 all these circumstances must be held to be a lease. Their Lordships observed with reference to the definition of a `license' as contained in the Easements Act and of a 'lease' as defined in the Transfer of Property Act and the Stamp Act that even though the parties called the document an agreement by way of a license and although throughout the document had been referred to in the same phrase the substance of the terms agreed upon was to be looked into and that the distinction between a 'license' and a 'lease' was a very narrow and thin one. The outstanding factors to be considered were exclusive possession and enjoyment of the land for the time being subject to the restrictions of inspection at some times by the licensor. Their Lordships finally held that from all points of view the document between the parties there amounted to a lease chargeable with duty under the relevant section of the Stamp Act. In Abdullah Bhai v. Ahmad Din their Lordships of the Supreme Court reiterated the proposition of AIR 1933 All. 735 observing that the line of emarcation between a 'lease' and a 'licence' is sometimes very thin one and the criterion for distinguishing between a lease and a licence is simple i,e, whether any right in immovable property itself, a right in rem, has passed to the person concerned. The evidence of Shafqat Hussain (Exh. 37) a partner of the Corporation is that after his interview with Mr. F. M. Khan, the Corporation was given possession of the Plotting dispute for the installation of a weigh-bridge exclusively and that thereafter the weigh-bridge was installed as a permanent structure together with a cabin, the understanding being that the Railway would not instal any weigh-bridge in the neighbourhood for the weighment of public vehicles and that when he signed Exh. 6 after the installation of the machine, he was told that the form was not the proper one, the proper form for a lease being available at Lahore and that they would be signed later. This evidence has not been contradicted and indeed is supported by other circumstances and the documentary evidence I have referred to. My finding accordingly that the Corporation was a lessee of the Railway in respect of the plot in dispute. In addition, it has also been established as stated by Siraj Ahmad Khan who write out the details of Exh. 6 that it was also agreed that the rent was to be fixed later on the basis of the nominal rent charged in the locality. Shafqat Hussain of the Corporation had admitted that the rent charged would be that was charged in respect of the plots adjoining the plot in dispute.
8. Issue No, 2(i).--Shafqat Hussain (Exh. 37) also stated that after they were given possession the weigh-bridge and its accompaniments were installed on the plot in dispute and that the structure was a permanent one including the cabin, h )using the dial of the weighing machine, Thomas Edwin Gee (Exh. 21) service Manager of Ever Scales, the manufacturers of the weighing machine, has stated that the foundation structure of the weighbridge was of reinforced concrete and was a permanent construction. Muhammad Abdul Sattar Gazdar (Exh. 31) prepared a structural design and supervised the construction of the weighbridge and the attached office room. He states that the foundations of the weigh-bridge were of R. C. C. concrete, steel weighing about 31 tons being used in the construction, and that the entire construction was permanently fixed in the ground and in support of his contention has produced Exh. 32 which is his bill for the work carried out. This evidence has not been controverted and therefore my findings accordingly.
9. Issue No, 2 (ii).--The weighing machine was sold by Messrs Avery Scales Ltd. to Mst. Rahat Bi, wife of witness Muhammad Sabir (Exh. 25) for Rs, 32,155. (See Exh. 23). Muhammad Sabir stated that he sold the machine on behalf of his wife to the Corporation for Rs 34,000 in furtherance of the agreement Exh.
26. Exhs. 29 and 30 are the receipts for the payment of the value of the weighing machine paid to Muhammad Sabir by the Corporation. Muhammad Abdul Sattar Gazdar (Exh. 31) has stated that the cost of the entire R. C. C. construction and of the steel and other material used together with the labour was about Rs, 22,000. Exh. 32 support this contention. The defendants have thus proved that they invested a sum of Rs, 55,000 as is claimed by them. The Railway have not controverted this evidence. My finding accordingly.
10. Issue No, 2 (iii).--The question of the consideration of this issue does not arise.2 11.11. Issues Nos, 3 and 4(i) and Issue No, 6.--In view of the evidence of Siraj Ahmad Khan (Exh. 5), a witness for Railway, that the basis of the rent would be nominal rent charged in the locality and of the admission of Shafqat Husain that the rent to be charged was to be in confirmity with the rent of the adjoining plots it is established that there was an understanding between the parties that the Railway would charge the Corporation the nominal rent in respect of the plot. My finding accordingly.
12.Issue No, 4(4--There is no evidence on this issue. Finding accordingly.
13.Issue No, 5(1) and (ii) and Addl. Issue No, 2.--In paragraph 5 of Suit No, 85 of 1965 the Plaintiff- Railways have claimed to have fixed the rent of the plot at Rs, 3,500 p.m. They also claimed compensation for use and occupation of it at this rate. No basis whatsoever has been shown for the fixation of this amount. Siraj Ahmad Khan (Exh. 5) a witness for the Railway has no knowledge of the officer who fixed this amount nor of the basis on which it was fixed. Some support was sought for Exh. 10, a tender submitted by the Corporation for the erection of a weigh-bridge near Kala Pul and of another tender by the Public Weighment Corporation offering Rs, 51,000 for the lease of some land near Kala Pul measuring 60 x 40 feet. Kala Pul is miles away from the plot in dispute being at two divergent points of the City, Kala Pul being near the hub centre of the Cantonment Railway Station the present site being near Kharadar. No comparison or similarities in the context are possible nor reliable. The Corporation has denied that they have acquiesced in paying this amount or had agreed to do so. Their contention on the other hand is that the demand is illegal and mala fide. The demand no doubt is entirely without foundation in the context of the established position that the rent of the disputed plot was to be in conformity with that of the adjoining plots. The lease granted to the Corporation was initially for three years from 10th October 1953 expiring on 9th October 1966. Although there is no support for the evidence of Shafqat Hussain that an assurance was given to him by the Divisional Superintendent at the time the lease was granted to him and at the interview that no other weigh-bridge would be installed it stands to reason that the Corporation would only have undertaken to instal a weigh-bridge and invest a large sums of money amounting to Rs, 55,000 with some understanding and indeed hope that their business and remuneration from the weigh-bridge would cover their investments on it. No reason has been given why the Railway installed their own weigh-bridge near the dispute plot in
164. Exh. 38 is a letter addressed by the Corporation to the Divisional Superintendent dated 24th June 1964 complaining of the visit of some officers of the Railway to the weigh-bridge of the Corporation demanding on account of the income and expenditure, etc. of the staff employed for the weigh-bridge of the Corporation. It is contended that it is because of these complaints that the Railway decided to instal their own weigh-bridge post-haste in 1964. There is, therefore, in my opinion justification in the plea on behalf of the Corporation that the demand for Rs, 3,500 as rent of the plot was not only illegal but mala fide.
14.Issue No, 7.--This issue is not pressed.
15.Issue Nos, 8 and 11 and Addl. Issue No, 1.--It has been urged on behalf of the Railway that in any case the period of the lease in favour of the Corporation has expired, the Railway having refused to accede to the request of the Corporation made in their letter dated 6th July 1964 (Exh. 39) for an extension of the lease for a further period of 20 years, in view of their in-vestment of about Rs, 55,000 on the foundation and the installation of the weigh-bridge. It is also urged that in view of West Pakistan Government Lands and Buildings (Recovery of Possession) Ordinance, 1966 (Ordinance IX of 1966) the Railway as a Government organization are entitled to evict the Corporation from the land in dispute. It appears to me that this Ordinance does not apply to the facts of the present case. It is not the case of the Railway that the eviction of the Corporation was sought for a public purpose.
The general set-up of the Ordinance appears to be one for taking over possession of Government lands and buildings in the temporary possession especially in the case of Government servants allotted accommodation whilst in service and continuing to be in possession thereafter after retirement, resignation, dismissal, etc. No notice under this Ordinance was given to the Corporation by an officer authorised by the Government and no order as envisaged under section 5 of the Ordinance was admittedly given to the Corporation. In any case it has been rightly urged that the provisions of this Ordinance do not over-ride the provisions of any statute subsisting in law.
16.The position, therefore, is that the Railway can evict the Corporation on the basis that their lease has been terminated but only on condition that the Corporation is compensated adequately for the amounts invested in it towards the installation of the weigh-bridge, the cost of the weigh- bridge less the rents that would be due from the Corporation to the Railway and the reasonable time to the Corporation to evict the premises. I have already held that the Corporation have established having spent Rs, 55,000 over the installation and cost of the weighbridge. In the context of the admitted position, the rent of the premises has to be fixed on the basis of the evidence of Muhammad Sharif (Exh. 13), a witness for the Corporation. He is the land Surveyor of the Karachi Municipal Corporation and is acquainted with the area where the disputed plot is situated.
He has stated that there were no commercial plots there. The value fixed by the K. M C. from 1959 to 1964 round about the Wazir Mansion area was Rs, 20 per sq. yd. Exh. 14 is the Schedule of the rents area-wise fixed by the K. M. C. from 1959 to 1964. The disputed plot would come within the area of item No, 39 Lyari Sub-area (f) Baghdadi where the Corporation has sanctioned land per square yard for a permanent lease at 0.38 paisas for commercial purposes and 0.19 paisa. per sq. yard for residential purposes. The area mentioned at Item No, 39(f) is about a furlong and a half away from Wazir Mansion where the dispute plot is situated. In the circumstances the only basis for the fixation of the rent for the area of the dispute plot which is 500 sq. yard will be 0.38 paisas per sq. yard per annum amounting to Rs,
100. I must also take into consideration the evidence of Nasim Ahmad Exh.
16 and Dr. Inayat Hussain Exh. 17, two witnesses of the Corporation, the first stating that their income from the weigh-bridge is about Rs, 100 to Rs, 150 per day, the latter stating that their monthly income from the weigh-bridge is Rs, 2,090 to Rs, 2,500 per month. This is the legitimate income from the weigh-bridge and the Corporation therefore cannot say that they have been completely ousted from the business since the installation of the weigh-bridge by the Railway.
17. Finally, therefore, I would conclude that the Railway can evict the Corporation on payment of compensation amounting to Rs, 55,000 less the rent calculated on the basis earlier referred to.
Thus I hold that the Corporation have no claim against the Railway for declaration and injunction and consequently Suit No, 226 of 1968 will be dismissed with no order as to costs and that Suit No, 85 of 1965 will be decreed for possession in these terms. There will be no order as to costs. AIR 1933 All. 735 PLD 1964 SC 106