ZULFIQAR AHMAD KHAN, J.---This order will dispose of both the above mentioned applications, one of which has been filed under Order XXXIX Rules 1 and 2, and the other under Order XL, Rule 1 read with section 151, C.P.C. Through the first application, the Plaintiff has primarily requested that the Defendants be restrained from further creating third party interest in the property in question, and from interfering with the business being carried out by the Plaintiff. Through the second application, Official Assignee is requested to be appointed as receiver in respect of the property in question.
Giving brief of the controversy at hand, the learned counsel for the Plaintiff submitted that the Plaintiff (A.A. Corporation) was granted a lease for a term of 25 years by the Defendant No,1 (KPT) in respect of plot No,18-C Off. Moulvi Tamizuddin Khan Road, Karachi w,e,f, 01.07.1966 and the said lease was accordingly to be expired on 30.06.2001, which it did. A copy of the lease is reproduced between pages 25-91. Of particular importance is sub-clause (vi) regarding renewal of the lease, which is reproduced hereunder:-- VI. RENEWAL OF LEASE:-- The Board shall on written request of Tenants made 12 months before the expiration of the term hereby created and on the Tenant's obtaining, from Deputy Chief Engineer a Certificate that the premises and all buildings and erections thereon are good and tenantable condition and if there shall not at the time of such request be any existing breach or non-observance of any of the convenants on the part of the Tenants, hereinbefore contained and provided there be no development scheme affecting the premises, at the expense of the Tenants grant to them a lease of the premises for such period and on such revised rent, terms, convenants and conditions as may be decided then by the Board." (Underline is mine).
Also, the grant of the said lease to the plaintiff was subject to the payment of ground rent as per paragraph-2. Since the said paragraph would be referred to in the latter part of this order, I find it appropriate to reproduce the same hereunder: "2. GROUND RENT:- The Tenants shall pay in advance to the Board for the premises an annual rent of Rs,22,075.00 (Rupees Twenty two thousand and seventy five) only @ Rs,13.25 (Rupees thirteen and paisa twenty five) per square meter per annum, excluding Government, Municipal and other usual Taxes, without any deductions, in two equal half yearly installments of Rs,11,038.00 (Rupees Eleven Thousand and Thirty Eight only) on the first day of January and on the first day of July in each year and that in the event of the Board determining the rights of the Tenants an hereinafter provided, they shall nevertheless pay half of the said rent, viz: Rs,11,36.00 (Rupees Eleven Thousand and Thirty eight) only in respect of the half year or any part of which they may have been or be in possession of the premises or any part thereof. If the said rent be not paid within one month from the first day of January or the first day of July in any year then without prejudice to the right of re-entry hereinafter contained, interest at the rate 14% per annum with quarterly rests (compound interest) or at such higher rate of interest as is charged by the banks as prescribed by the State Bank of Pakistan from time to time shall be charged upon the said rent in arrears from the expiration of the said one month until payment."
Of relevance, but not of much significance is the purpose for which the lease was granted, which is stipulated under paragraph 4 and reproduced hereunder:-- "4. PURPOSE:-- The Tenants shall at their own expense complete and finish the remaining Two storeys by 30.06.1982 fit for accommodation of warehouses (storage of cotton and hazardous goods not permitted) and use the said building with all requisite and proper walls, drains, and other conveniences thereto so that the same may b in every respect in accordance with the terms of the said Agreement and so that the said building and conveniences shall be completely finished as aforesaid both externally and internally by the date mentioned above or within such extended period as may be required by the Tenants and granted by the Board subject to the payment in advance of extension fee equivalent to the ground rent for the period for which extension is required. The Tenants will not add to or alter the said buildings and conveniences either externally or internally without the consent in writing of the Deputy Chief Engineer and as required under clause (5) next following. This will not apply to minor alternations in decorative features not requiring the prior permission of the Karachi Metropolitan Corporation, Karachi Development Authority or other competent Authorities."
Through paragraph 20 of the said lease, the lessee was advised of the Resumption of the land in question by the lessor. The said paragraph is also reproduced hereunder:-- "20. RESUMPTION: Should the land at any time be affected by any development or expansion a scheme of the Board or of any competent authority entrusted with the development work, the lease shall be determined and the Board may resume the whole or part of the land whereupon on receipt of written notice from the Estate Manager, theyshall remove the structures/erection and other public utilities like drainage lines, water mains, gas mains, electric cables, telephone cables, etc., therefrom at their own expenses within such time as may be prescribed in the notice. Anything not removed within the period allowed shall vest in an be the absolute property of the Board, free from all claims, liens and encumbrance, whatsoever, and the Board may cause to remove the same in such manner as it deems fit and recover the cost of so doing from them."
There is no dispute that the lease expired on 30.06.2001, and as provided in the renewal clause, the plaintiff wrote a letter dated 15.01.2001, (Annexure "C") to the Defendants, expressing his intention for the renewal of lease for a term of 25 years. It could be noted that such a letter was already incompetent under Clause (vi) which required the lessee to make such request 12 months before the expiration of the lease (i,e, on or before 29.06.2000). Be that as it may, the said letter was duly acknowledged by the Defendants, who in response to the aforementioned letter, wrote a letter to the Plaintiff on 10.02.2001. The contents of the letter are materially significant, which are reproduced hereunder:-- "Dated: 10.02.2001 To, M/s. A.A. Corporation, 18-C, Ware House Area, Off. M.T.Khan Road, Karachi.
SUB: RENEWAL OF LEASE OF PLOT NO.18-C GROUP WAREHOUSES AREA, OFF. M.T. KHAN ROAD.
Ref:- Your letter dated 15.05.2001. Dear Sir, Before your request for Renewal of Lease period of plot No,18-C Group Warehouses, Area Off.
M.T.Khan Road, is considered, you are requested to furnish the following informations/documents for finalization of your case.
1. A Search Certificate from the sub-Registrar of Assurance, Karachi, in respect of the subject plot.
2. A stability Certificate from you Architect certifying the structure standing on the plot in stable condition.
3. Details of Assets, specially immovable properties of the lease presently held by them.
4. N.I.T. Number if any.
5. Present Business and Residential Addresses.
6. A Pay Order for 9,04,838.00 in favour of KPT being the Security Deposit which will be refunded on vacation of the plot without any interest / markup.
7. A Pay Order for Rs,10,000/- as preparation charges of Lease of the plot in the name of Karachi Port Trust.
8. Convey your acceptance to the prescribed prevailing rate of Rs,543,12 per sqr. Meter per annum with 4%---every year plus Govt. K.M.C. and all other usual taxes.
9. Also furnish the information as per. On hearing from you, further action in the While the plaintiff continued to remain in the occupation of the said premises, per counsel, it continued to deposit ground rent as per the evidence submitted. The last payment of the ground rent in respect of the period commencing from 01.07.2006 to 31.12.2006 was made on 20.02.2007 (annexed G/1). Of material significance is to note that for the continuation of the tease, the Plaintiff was required to pay in advance annual ground rent of Rs,22,075/= at the rate of Rs,13.25 per sq, per meter, per annum in two half-yearly installments, each of Rs,11,038/- on the first day of January, and on the first day of July each year. The lease also provided that even in the case when the Board is determining the rights of the tenant, the tenant was to pay the rent in half-yearly installments on the above dates.
As shown hereinabove, the lease was granted subject to the payment of the ground rent in half- yearly installments as aforesaid, it is an admitted fact that the lease expired on 30.06.2001 and pursuant to paragraph 2, while the Plaintiff was still in the possession of the premises, he was required to pay ground rent in advance on the first day of January and the first day of July. From the documents shown by the counsel for the Plaintiff, no proof has been provided that once the lease stood expired on 30.06.2001, the Plaintiff made the advance six-monthly installment for the period of July to December 2001. No evidence for making of any such payment exists for the years 2002 and 2003. The first rental payment attached at page 111 is in respect of period commencing from 01.01.2004 to 30.06.2004, however, the payment is made on 29.09.2004, which ought to have been paid on or before 01.01.2004. The payment of ground rent for the term of 01.07.2004 to 31.12.2004 (Page 109), which ought to have been paid on or before 01.07.2004 was paid only on 11.05.2005; again delayed by more than ten months. The payment for the period 01.01.2005 to 30.06.2005 (page 105) as evident from Annexure G/2 was made on 28.10.2005, which infact ought to have been paid on or before 01.01.2005. Payment for the term of 01.07.2005 to 31.12.2005 was made on 08.03.2006. (Page 107), thus over eight months delayed. The last proof of payment of ground rent is attached on page 103, which is for the period from 01.07.2006 upto 31.12.2006, however, admittedly being made on 20.02.2007, which ought to have been paid on or before 01.07.2006, thus delayed by more than six months.
It is therefore evident that while there is no proof of the rent having been paid for the years 2003 and 2004, the rent paid between the period 2004 to 2006 in six-monthly installments was always delayed and only made in violation of the lease terms which required such payments to be made in advance for the forthcoming six months' period. The case put forward by the learned counsel for the Plaintiff was that notwithstanding that the lease stood expired, since the Plaintiff was making payment of the ground rent, therefore, it could not have been dispossessed, which was done by the Defendant No,1 after issuing him the Final Notice dated 01.06.2006. Notwithstanding therewith, there are letters attached as Annexures H/2 and H/3 issued by K.P.T. demanding formalities of renewal (of the lease) to be complied with, however, no compliance thereof was made, which is evident from the letters written by the plaintiff. However, the counsel drew court's attention to a letter written on 26.06.2006 (by the Plaintiff) along with which there is a mention of two cheques being sent to K.P.T. on account of security deposit and preparation charges of lease, that too is without providing the information, details and sanctions requisitioned by the letter dated 10.02:2001.
In a nutshell, the case of the Plaintiff is that notwithstanding that the lease has expired on 30.06.2001, the payment of rent, which has been identified in above paragraphs, coupled with the fact that in the year 2006 two payments were forwarded to the Defendants, the Plaintiff could not have been dispossessed from the premises, alleging that the said act is in violation of section 116 of the Transfer of Property Act, 1882, where the lessee of a property continuing to remain in possession thereof (after the determination of the lease granted to the lessee) and where the lessor had accepted rent from the lessee, or otherwise assented to his continuing of the possession, the lease in the absence of an agreement to the contrary is to be considered to be renewed from year to year, or from month to month, according to the purpose for which the property is leased.
The learned counsel contends that as provided by the aforesaid section, since the lessor has accepted the rental payments, therefore, it could not have dispossessed the lessee. The learned counsel has also drew this Court's attention to section 9 of the Specific Relief Act, under which a connected Suit No,483/2007 is filed. The counsel contends that his client was illegally dispossessed, therefore, through the instant suit possession should be recovered from the Defendants. In support of his contentions, he has placed reliance on case reported as 2003 CLC 38 (Mrs. Anwar Jehan Qureshi v. Trustees of the Port of Karachi).
The learned counsel for the Defendants commenced his arguments bringing this Court's attention towards the proof of the payments of rents and stated that while there is no evidence for the payment of ground rent for the year 2002 and 2003, the lease clearly stipulated that the ground rent even while there is a pending case between the lessor or lessee ought to be continued to be paid in advance on or before first January or first July, and by making reference to the aforementioned payments, showed to this Court's satisfaction that none of the rental payments were made in accordance with terms of the lease. He made a reference to the Nazir report dated 10.04.2007, which confirms that the possession was already taken over by the Defendants and by placing reliance on PLD 1998 Kar. 373 and PLD 1970 SC 139 submitted that no anti status-quo order could be passed since the possession has already been taken over by the Defendants, therefore, the present applications have become infructuous.
Heard counsel for the parties and perused the record. To me it is a very simple case of the Plaintiff not making compliance of the terms of the lease and while having been provided a complete procedure for the extension of the lease through the lessor's letter dated 10.02.2001, the lease having expired on 30.06.2001, the lessee did not comply with any of the requirements mandated for the extension of the lease, but still continued to hold the possession, not even paying the ground rent on timely basis but in the year 2006 by sending two cheques to the lessor, still trying to make a case that he has legal rights to continue to enjoy the property. When I posed a simple question to the counsel for the Plaintiff that when the Defendants sent the Plaintiff a letter on 10.02.2001, which I have reproduced in toto in the aforesaid paragraphs, why did not the Plaintiff comply with the terms of that renewal of lease letter and fulfill the requirements prescribed by the lessor, if he would have done so there would have been no cause of instituting the present suit as well as the property would have been (subject to the approval of the Board of K.P.T.) further extended in the lease hold of the Plaintiff for another term. The learned counsel could not put forward any satisfactory answer except suggesting that there was a dispute on the quantum of the ground rent to be charged, which I find amusing since the offer letter specified in paragraph 8, the ground rent demanded by the lessor. I, therefore, do not find that explanation satisfactory at all.
The fact is that while at one hand the Plaintiff continued to enjoy the possession of the property, he played on the border line on a six-monthly basis to seek extension of the term of the lease, which was rightly extended to it to satisfy the requirements of section 116 of the Transfer of the Property Act, since it was only on the expiry of the last term of rental after which the possession was taken over by the Defendants.
Also of importance is that under the terms of lease, the Plaintiff was to make construction as anticipated in paragraph-4 of the lease. A picture taken by Nazir when the suit was filed clearly shows that the property primarily remained a barren land which means even the Plaintiff did not fulfill the condition of purposefulness envisaged by the lease.
Now I would like to go to paragraph 20 of the lease, which clearly states that lessor, if needed, as part of any developmental or exceptional plan will resume possession of the land in whole or in part. Per document annexed as D/3 to the Counter of the counsel for the Defendants, the said land on account of new TPX area taken away by the US Consulate and on account of the old TPX required for Mass Transit Scheme and Elevated Expressway, the "C" area (in which the instant plot was situated) was needed by K.P.T. to be used as Bonded Area according to Master Plan developed by K.P.T. In my view, only on this ground the lessor was competent to resume the possession of the land in question. Notwithstanding that a situation was extremely aggravated by the Plaintiff not only apply for renewal of the lease in time, coupled with his failure of fulfilling the requirement prescribed in the letter dated 10.02.2001, even not paying the ground rent in advance in a structured manner as stipulated under paragraph 2 of the lease, therefore, to me the Plaintiff has not made any case which could have compelled any Court of law to grant him relief sought through the instant applications.
With regard to the specific reference made to section 116 of the Transfer of Property Act, it is abundantly clear that the law and the aforementioned case law clearly provide that even after the expiry of lease, if the land continued to be in the possession of the lessee and where it regularly pays the rent on monthly or yearly basis, then in the absence of any agreement to the contrary, the lease would be assumed to have been continued to be renewed on monthly or yearly basis. As it is evident from the aforesaid disclosure that the renewal application was belated, rent was never paid by the Plaintiff in time, which alone would desist this Court from granting relief envisaged by Section 116, notwithstanding such relief had already been enjoyed by the Plaintiff and it was only upon the expiry of the last term of irregularly paid rent that the Plaintiff was served with a final notice and eventually the possession was taken over from him.
With regards the applicability (or otherwise) of section 116 of the Transfer of Property Act, guidance could be sought from the Supreme Court's judgment reported as 1984 SCM R 446 (Noor Hussain v.
Allah Buksh), where the Apex Court held that in order to succeed in establishing his right to the renewal of the lease by holding over, the onus of the proof lay heavily upon the lessee, he had to prove that after the determination of the original lease, the lessor or his legal representative accepted rent from the lessee or otherwise assented to his continuing in possession. In the present case, the plaintiff has not given any proof that payment of rent has been made timely for the years 2002-2003 and for the period 2003-2006, as per the evidence submitted rents were not paid in time. Notwithstanding therewith, during this entire (2002-2006) period there is no proof that K.P.T. assented to the continued use of the property by the plaintiff. In the case of PLD 1980 SC 29 (Muhammad Yousuf v. Abdullah) interpreting Section 116, the Apex Court held that agreement of lease for a fixed period comes to end on expiry of agreed period unless renewed by both parties.
Lease coming to end on a particular date could remain in force only if lessor and lessee entered into a fresh agreement to keep lease in force. No such fresh agreement was ever entered into between lessee and lessor in the case at hand, thus no benefit under section 116 could be extended to it.
Coming to section 9 of the Specific Relief Act, this section is only applicable if a person is dispossessed otherwise than the due course of law. In the given circumstances, I do not see that a case is made out for illegal dispossession as it was only on account of failure of the Plaintiff to apply for extension of lease in tithe, and to comply with the terms provided to it for the extension of lease through letter dated 10.02.2001, I do not see what option did the Defendants had in this case except to expel the Plaintiff. The Plaintiff seemingly continued to play a six-monthly inning with the Defendant that too on the boundary line without making a long term commitment with his partner (K.P.T.) and the last two cheques sent by it under the cover of letter dated 26.06.2006 seem to be paid in charity without complying with the other codal formalities envisaged by the letter dated 10.02.2001. I, therefore, have even failed to be impressed on this account.
Accordingly, for the above reasons the status-quo order passed by this Court vide order dated 07.04.2007 is hereby vacated and the instant applications are dismissed.