MUHAMMAD AZIM vs PAKISTAN EMPLOYEES COOPERATIVE HOUSING SOCIETY

' These five suits were consolidated by an order dated 29th November, 1967 which appears in the Order Sheet in Suit No, 243/65 (Miscellaneous Application No, 361/67). The suits were consolidated because the property consisting of a plot, which is the subject-matter of these suits, is the same in each one of them. Common evidence has been recorded and consolidated issues were framed and the same appear in the file relating to Suit No, 25/66.

2. The main parties in these suits are Muhammad Azim (hereinafter referred to as the plaintiff), who filed Suits bearing No, 45/66, 25/66 and 26/66; United Bank Ltd., (hereinafter referred to as the Bank), who filed Suits bearing No, 46/66 and 243/1965 ; and the Pakistan Employees Co-operative Housing Society Ltd. (hereinafter referred to as the Society), and this Society is a Defendant in all the five suits. Besides the above parties that are referred to as the main parties, three individuals have also been impleaded as Defendants in Suit No, 25/66. They are Mr. Zafrul Ahsan and Mr. A. A.

Hasan the office-bearers of the Society and Mr. Agha Hasan Abidi, the Manager of the Bank.

3. The Society was formed in the wake of Partition for the purpose of providing houses to the employees of the Central Government. A large area of land was granted to the Society by the Government of Pakistan for the said purpose. I am informed by the learned Advocates for the Bank and the Society that sometime in the year 1957, the original body of the Society was superseded, but ultimately on 6th August, 1958 a "Licence Agreement" was executed between the President of Pakistan and the Society. By this agreement which was duly registered an area of land measuring 1,268 Acres was granted to the Society for the purpose of disposing of the same to its members for residential purposes. Besides, plots were also reserved for commercial purposes and for providing public amenities. The dispute in these suits relates to a commercial plot bearing No, 1/2-D, measuring 4,519 square yards and commonly known as Nursery Plot. This plot is stated to be located adjacent to Khayyam Cinema.

4. The Licence Agreement that has been referred to in the preceding paragraph clearly makes a provision in regard to disposal of commercial plots. The said provision is contained in para. VI (a)

(2) of the Licence Agreement which has been produced on the record as Exh. 57/1. This provision reads as follows : "Plots reserved for commercial purposes shall not be disposed of by the licensee except under and in accordance with the directions given to it by the Landlord or the Authority as the case, may be in writing from time to time and on the terms set-out in Form C appended hereto."

' The landlord and authority referred to in the above-quoted passage mean respectively the Government of Pakistan and the Karachi Development Authority. Since Karachi Development Authority will be mentioned in this judgment frequently, the same shall be referred to as the K. D. A.

' Form C referred to in the above-quoted passage is the pro forma of a contract of lease contemplating the President of Pakistan to be the "Lessor" and the grantee of the plot to be the "Lessee". The pro forma further provides by implication that the document was to be executed on payment of the full instalments of premium, and after the execution of the document, the "Lease" was subject to the following conditions

(i) That the Lessee would have to pay ground rent,

(ii) that the plot and all buildings shall be subject to Municipal taxes and rates,

(iii) that the lessee shall abide by all the rules and bye-laws of the K. D. A. Or other local authorities,

(iv) that the lessee shall have the power to sell, sub-let, assign or transfer the plots whether with or without building thereon,

(v) that in case of breach of condition, the Lessor could determine the lease and enter upon the plot and take possession of all the buildings constructed thereon, and

(vi) that the lease was for a period of 99 years commencing from 1st April, 1948.

5. It may at this stage be pointed out that according to Licence Agreement, the K. D. A. Was appointed as the authority in regard to development of the area in accordance with the lay-out plan. The K. D. A. Also had the power to prevent diversion of any plot for use other than that for which the same had been approved. The K. D. A also had the power of preparing schemes and such schemes had to be executed by the Society in co-operation with all persons and other societies having similar rights in adjoining areas. In so far as execution of such schemes was concerned, the Society had to comply with all the directions given by the Government or K. D. A. In regard to such schemes from time to time. Although the alignment of the land and division of the area into blocks had been provided for in the lay-out plan, the execution thereof attracted the authority of the K. D. A. The cost of providing roads etc., was to be borne by the Society.

6. The Society wanted to dispose of the plot in question and the record discloses that from the beginning of 1962 the Society was trying to dispose of the plot by private negotiations. Habib Bank Limited offered to purchase 1000 Sq. Yds. At the rate of Rs, 110 per Sq. Yd. On 1st January, 1962, but the offer was considered by the Society to be too low and Habib Bank was asked by a letters dated 16th January, 1962 (Exh. 13) to revise the offer. Again on 18th January, 1962 the Society offered the plot to the United Bank Ltd., but their letter on 2nd February, 1962 intimated the Society that they were not interested in the plot. Ultimately a meeting of the Sub-Committee for allotment set-up by the Society was held on 10th May, 1963 and at this meeting a resolution was passed to the effect that sealed tenders may be invited for the sale of the Nursery Plot as one unit. It was, however, provided that the right of sale would be reserved. It appears that there was some "Stay Order", but the record does not disclose nor were they learned Advocates able to inform me what was the nature of this Stay Order and what was its significance. Suffice it to say that the Secretary of the Society at this meeting gave an assurance that the "Stay Order" was to be vacated shortly. I have underlined the word one unit because the same is a point of dispute in these suits because of the rival contentions of the parties in regard to divisibility of the plot.

7. On 20th May, 1963 sealed tenders were invited by the Society in respect of the plot. The notice of tenders provided that the tenders should reach the Secretary of the Society on or before 28th May, 1963 and the same were to be opened in public on the same day at 5-30 p. m. The notice also recited that the Society had the right to accept or reject any tender without assigning any reason.

The terms and conditions of disposal were not published in the newspapers, but the same have been placed on record as Exh. 57/1 (13). These terms and conditions in relation to the present Suits are relevant in the following particulars :-

(i) The building plan will have to be approved by the Society and then forwarded to the K. D. A. For approval, and

(ii) any permission or licence from any authorities other than the Society will have to be obtained by the allottee and before a request for obtaining such permission etc., was made by the allottee, the prior consent of the Society shall be necessary.

8. On 27th May, 1963 vide Exh. 16, Messrs Rainbow Estate Agency submitted a tender for the plot in question and offered to pay Rs, 177.25 per Sq. Yd. The tender was subject to some conditions. One of the conditions was that the Society shall not object to sub-division of the plot and was bound to forward the sub-division plan to the K. D. A. For approval. Habib Bank Ltd. Also submitted a tender on 28th May, 1963 offering Rs, 185 per sq. Yds. There was still a third tender which was on a lower rate and was submitted by a party not concerned with these suits. On 28th May, 1963 after the tenders were opened, Messrs Rainbow Estate Agency submitted a letter to the Secretary of the Society wherein it was stated as follows : - "That a couple of weeks back we wrote to your (Society) for the purchase of commercial plot known as Nursery Plot and our offer was Rs, 200/00 per sq. Yd., but we came to know through your Society officials that your honour considers that this offer is very low and you expect something more than that and, therefore, to get a better price you called tenders for the sale of the said plot.

' Now today after opening the tenders the highest offer received by you was Rs, 185 per sq. Yd and perhaps you are willing to sell it on the same price, therefore, we would request your honour to please (consider) our case wholeheartedly and for the benefit of the Society please give us the priority as our first offer of Rs, 200 stands still."

' The words in brackets are mine.

' The document Exh. 20 has been produced by Society and admitted on behalf of the plaintiff showing that Messrs Rainbow Estate Agency further raised the offer from Rs, 200 per sq. Yd. To Rs, 201 per sq. Yd., because the members of the Allotment Committee insisted on increase. This letter bears no date. However, another letter which is Exh. 55/21 from Rainbow Estate Agency bears the date 13th May, 1963 and contains an offer of Rs, 200 per sq. Yd., and this letter when considered alongwith letter Exh. 20 clearly shows that Exh. 20 must have been written after Exh. 55/21 dated 30th May, 1963. However, a document Exh. 21 produced by the Society and admitted on behalf of the Plaintiff is useful for the purpose of determination of the proceedings taken by the Society in regard to the disposal of this plot. This document is with regard to the Minutes of the meeting of Negotiation Committee of the Society held on 20th June, 1963 to finalise the disposal of this plot.

This document shows that the offer of Habib Bank Ltd. Was Rs, 185 per sq. Yd., and in-spite of the office bearers of the Society trying to persuade the representatives of the Habib Bank Ltd to revise the offer, they could not succeed so that 3 or 4 days' time was given to the representative of the Habib Bank for consulting his Principals. This document further shows that the representative of the Habib Bank did not revert on the subject and since the plaintiff Muhammad Azim had submitted a revised offer at Rs, 201 per sq. Yd., the Committee decided to accept this offer on condition of the plaintiff Muhammad Azim paying the full price within a week. However, earlier to this meeting of the Negotiation Committee, the Managing Committee of the Society had by a Resolution dated 8th June, 1963 (Exh. 65) considered the matter in regard to the disposal of the plot. At this meeting, as the resolution states, all tenders were considered, and it was decided that the bidders should be persuaded to increase the bid. For this purpose another Committee was formed and the Managing Committee of the Society gave a direction to this Sub-Committee to negotiate on this matter and dispose of the plot to the person who was prepared to pay the highest price.

9. Ii was on 1st July, 1963 that the Secretary of the Society informed Rainbow Estate Agency that the Society had agreed to allot the plot for the purpose of constructing spacious and decent single unit buildings. I have underlined the word buildings, because in the document Exh. 72 the letter 's' in the word buildings although appears typewritten is yet overwritten in manuscript. Pursuant to the Allotment Order the plaintiff Muhammad Azim deposited an amount exceeding Rs, 9 lacs in Bank Account of the Society maintained in Standard Cooperative Bank Ltd. This amount was desposited within a week of the letter Exh. 22 whereby the Society agreed to allot the plot of land. Subsequently on 30th July, 1963 a formal allotment order was issued under the signature of the Honorary Secretary of the Society in favour of Muhammad Azim. In this document which is Exh. 55/1 on the record, reference has been made to construction of spacious and single unit buildings, but the letter 's' in the word buildings is not typed but is in manuscript. Similarly, condition No, 5 providing for payment of ground rent by plaintiff Muhammad Azim is also written in manuscript. I may state that the letter bears the seals of the Society.

10. After the issuance of Allotment Order the Managing Committee of the Society at its meeting on 17th July, 1963 confirmed the disposal of the plot and also expressed thanks to the persons who had brought about this transaction. By the same Resolution the Chairman of the Society was authorised to return the cheque of Habib Bank Ltd which had been given to the Society as earnest money at the time of submission of tender. However, after 17th July, 1963 Habib Bank Ltd. Did not enter into any correspondence with the Society in regard to the plot.

11. On 17th September, 1963 the plaintiff Muhammad Azim submitted a sub-division plan in respect of the plot to the Society for obtaining approval of the K. D. A. This sub-division plan was on the same day forwarded by the Executive Engineer of the Society to the K. D. A. For approval. In the meantime the plot in question was demarcated and a certificate of demarcation was issued to plaintiff Muhammad Azim on 5th October, 1963. This certificate which is Exh. 55/11 bears a seal of the Executive Engineer of the Society and a signature above the seal. Plaintiff Muhammad Azim has stated in his evidence that after the plot was demarcated, he put a fencing around the plot and constructed a Kutcha but for the Chowkidars.

12. It appears that the sub-division plan which was forwarded by the Executive Engineer of the Society to the K. D. A. For approval was not considered favourably by the K. D. A. The record discloses that the K.D.A. At one stage did not recognize the Society as the competent authority for the disposal of the plot and latter took a stand that the plot could not be sub-divided but ultimately insisted on a 30' strip out of the plot to provide a more wide road. Since several objections were taken by the K. D. A., plaintiff Muhammad Azim vide letter Exh. 55/20, dated 30th December, 1963 wrote to the Society that the plot in question had been allotted to him for construction of "a spacious and decent single unit buildings and not building." In this letter Muhammad Azim referred to the sub-division plan already submitted to the K. D. A. And requested that the Society may get the said sub-division plan approved. In fact plaintiff Muhammad Azim has stated in his letter that the condition of allotment of the plot was for construction of buildings and not of a single building. In fact earlier than the letter of Muhammad Azim, the Secretary of the Society had on 13th October, 1963 written to the Government of Pakistan that the plot in question was shown in the approved lay-out plan of the Society as "commercial plots" and the lay-out plan was duly signed by the Secretary of the Ministry of Rehabilitation. This letter was not replied to by the Government or in any case the reply has not been placed on record. Although the learned Advocates appearing on either side did not invite my attention to the lay-out plan appended to the Licence Agreement (Exh. 57/1), I have seen the plan and this, plot is mentioned in the plan as "commercial plots".

13. However, the Managing Committee of the Society held a meeting on 21-12-1963 and a resolution was passed on that date which reads as follows :- "The plans for the sub-division of Nursery Plot which were forwarded to the K. D. A. By the P. E. C. H. S. Were without the approval of the Managing Committee. The Plans may be taken back from the K.

D. A. Mr. Muhammad Azim may be informed of our previous decision of 'single unit building' on the whole plot. If Mr, Muhammad Azim does not adhere to this condition, the whole amount may be returned to him and the allotment cancelled."

' The sub-division plan forwarded by the Society to the K. D. A. Was, therefore, re-called on 24-12- 1963.

14. Another meeting of the Managing Committee of the Society was held on 14-1-1964 and at that meeting a resolution was passed by the Society expressing concern and disappointment at the addition of letter 's' after the word 'building' in the allotment order in favour of plaintiff Muhammad Azim. The Society decided to hold an inquiry into the matter. The matter did not rest there, but another meeting of the Managing Committee of the Society was held on 25-2-1964 and Mr. Ahmed Ali, the Town Planner of K. D. A. Was also present. It was decided in this meeting that parking space for an adjacent market was insufficient and, therefore, a strip of JO' of land may be taken from the plot in question and earmarked as parking space. However, it has also decided at this meeting that the owner of the plot was to be compensated for deprivation of this 30' strip of land and the compensation was to be in the form of allowing the owner to build an additional floor on the building and also allow the owner to construct some garages and shops in the basement of the buildings or the plot. The record discloses that thereafter another sub-committee was formed to settle the case of this plot. This subcommittee held a meeting on 16-3-1964 and plaintiff Muhammad Azim was also present. The Minutes of this meeting disclose that the subcommittee was of the opinion that it was not advisable to insist on cancellation of the sale already made in favour of plaintiff Muhammad Azim. The Minutes disclose that cancellation of the sale in favour of Muhammad Azim was avoided because it was likely to create legal complications. This Sub- Committee was of the view that plaintiff Muhammad Azim should be convinced that it would be in his interest to surrender a 30' wide strip because thereby he could construct an additional floor and shops etc. Plaintiff Muhammad Azim at the outset insisted on return of the entire money which had by then been blocked for more than nine months and in the alternative plaintiff Muhammad Azim insisted on return of the cost of the 30' wide strip of land which was sought to be taken from him.

' This Sub-Committee again held another meeting on 25-5-1964 and it was decided that the allotment in favour of Muhammad Azim should not be cancelled and further that the Society should make an attempt to gel the width of the strip reduced to 20'. In return it was decided that plaintiff Muhammad Azim should be allowed to construct three-storey building as a special case. It was also decided that if the plot was subdivided, the Society should not charge any fee for transfer of the subdivided portion of the plot by Muhammad Azim to other persons. This was, however, subject to the decision of the Managing Committee. Thereafter on 14-6-1964 the Society wrote to plaintiff Muhammad Azim as follows :- "It is requested that you will please confirm if you will agree to the decision envisaged in the enclosed Minutes (of the meeting dated 25-5-1964) and if so please submit a plan for the construction of a three-storey building immediately so that the same be put up before the next Managing Committee meeting. The final approval will be communicated to you after it is approved by the Managing Committee."

15. In the meantime, however, plaintiff Muhammad Azim had been carrying on correspondence with the K. D. A. And the Government of Pakistan in regard to the plot and its use. However, it is necessary to refer to a letter by plaintiff Muhammad Azim to the Town Planner, K. D. A., Exh. 9/1 (14) dated 15-9-1964. In this letter Muhammad Azim asked the K. D. A. To advise him on the following matters:-

(i) What kind of building is allowed in that area?

(ii) How much area is allowed to be covered and how much open?

(iii) How many storeys are allowed to be constructed, etc. ' No reply was received by plaintiff Muhammad Azim from the Town Planner, K. D. A.

16. It was ultimately on 2-1-1965 that plaintiff Muhammad Azim received a letter from the Society informing him that the allotment of the plot in his favour had been cancelled. In this letter which is Exh. 28 on the record it was stated that the plot had been cancelled in view of the difficulties explained by plaintiff Muhammad Azim in meeting of the Sub-Committee held on 25-5-1964. It would appear on a reading of this letter that the plot had been cancelled at the instance of plaintiff Muhammad Azim. Earlier to this action of cancellation a meeting of the Managing Committee of Society had been held on 19-9-1964 and at this meeting a resolution was passed empowering the Chairman of the Society to allot plots of the Society. However, I may state at this stage that the resolution did not at all refer to this Nursery Plot. It has become necessary to refer to this resolution because in the evidence of Mr. A. A. Hasan, the witness of the Society it has been stated that the cancellation was resorted to in pursuance of this resolution. Thereafter, the question in regard to this plot came up for discussion before the Managing Committee of the Society at least twice but the matter was not discussed because by that time legal proceedings has been taken by plaintiff Muhammad Azim.

17. I will now go over to the facts relating to the period after the allotment of the plot to United Bank Ltd. The plot was allotted to the Bank on 2-1-1965 vide Exh. 57/I (7). No resolution has been placed on record to indicate under what circumstances the plot was allotted to the Bank, but the letter of allotment refers to some previous latters and correspondence between the Society and the Bank.

These letters have also not been produced, although the same were summoned. Syed Iqbal Halim, the Personnel Manager of the Bank was examined and he stated that the papers had been lost.

Suffice it to say at this stage that the plot was sold by the Society for a lump sum of Rs, 10 lacs and a further donation of Rs, 1,50,000 to the P. E. C. H. S. Ltd. Education Foundation. Admittedly this amount of 10,00,000 was deposited in the account of the Society in the United Bank Ltd. This account in the Bank was opened by this amount. The amount was deposited in Current Account so that it did not yield any interest. In fact it is the case of the Society that this amount was to be utilised for payment to plaintiff Muhammad Azim in the first instance and since admittedly plaintiff Muhammad Azim has not received the amount paid by him, the same is still lying in the account of Society maintained at the United Bank Ltd.

18. After the allotment order in favour of the Bank, a certificate of demarcation and a certification of possession was given by the Society in favour of the Bank on 9-1-1965. It has transpired in evidence that Muhammad Sharif was appointed as Chowkidar on this plot after two or three days of the taking of possession by the Bank. This would correspond to 12-1-1965. On this date plaintiff Muhammad Azim lodged a report at Police Station Ferozabad, at 4-10 p.m. Complaining that some employees of the Society had forcibly come on the plot and removed the fencing and demolished the Chowkidar's hut. The Police took no action with the result that plaintiff Muhammad Azim filed a direct complaint in the Court of IX Additional City Magistrate, Karachi under section 448, P. P. C. And section 380, P. P. C. Against Mr. A. A. Hasan, the Secretary of the Society. This complaint was ultimately dismissed mainly on the ground that there was no evidence that Mr. A. A. Hasan had himself committed these offences. However, I may mention here that the police did arrest the Chowkidar of the Bank but on account of the intervention of one Mr. Sami, an Officer of the Bank the Chowkidar was let off. It appears that once again on 4-3-1965 a second attempt was made by the employees of the Bank to take forcible possession but without success. However, K. D. A. On 6-3- 1965 issued a notice to plaintiff Muhammad Azim to remove unauthorised construction that had been made on the plot. The position admittedly is that plaintiff Muhammad Azim is in possession of the plot.

19. At this stage it would be useful to refer to the correspondence between the parties. The first letter which is dated 5-1-1965 is on behalf of plaintiff Muhammad Azim and addressed to Mr. A. A.

Hasan, the Secretary of the Society, wherein it is stated that Muhammad Azim had never expressed any difficulty in regard to the plot and had not invited cancellation. It has also been stated that Muhammad Azim is entitled to the plot and shall not surrender his rights in respect thereof. In this letter significantly there is no mention that the plot had been allotted to the Bank. The next letter which is dated 13-1-1965 is also on behalf of plaintiff Muhammad Azim and addressed to Mr. A. A.

Hassan, the Secretary of the Society. Even in this letter it has been stated that Muhammad Azim had never asked the Society to cancel the plot. Furthermore, this letter states that on 12-1-1965 the employees of the Society had attempted to dis-possess Muhammad Azim. The next letter which is Exh. 47 is dated 21-1-1965 and is on behalf of plaintiff Muhammad Azim and addressed to the Society. Even in this letter plaintiff Muhammad Azim has asserted his rights to the plot. The other two letters on behalf of plaintiff Muhammad Azim are Exhs. 49 and 50, which are respectively addressed to the Society and to the office-bearers of the Society and the Bank. It has been alleged in these letters that Mr. Agha Hassan Abidi, the Managing Director of the Bank and Mr. Zafrul Ahsan, the Chairman and Mr. A. A. Hasan, the Secretary of the Society had entered into a conspiracy to deprive Muhammad Azim of the plot. On behalf of the Society two replies have been made vide Exhs. 51 and 52. The stand of the Society in these two letters is that the plot in question had been demarcated and the cancellation of allotment in favour of Muhammad Azim was justified. In fact the tenor of these letters is that plaintiff Muhammad Azim acquired no. Right to the plot whatsoever. The last letter Exh. 53 is addressed on behalf of the Bank and Mr. Agha Hasan Abidi, which is addressed to the Advocate for plaintiff Muhammad Azim, In this letter it has been stated that the possession of the plot had been given by the Society to the Bank but it was Muhammad Azim who committed trespass on the land and filed a false case at Ferozabad Police Station. It is of interest to note that in this letter it is admitted that the chowkidar of the Bank had been arrested by the Police and further that an Officer of the Bank gave an assurance to the police that the Bank would not recover possession from plaintiff Muhammad Azim forcibly.

20. Before I proceed to give the summary of the pleadings in the suits, I would refer to an order passed by the Registrar of the Cooperative societies on 17-9-1966. This order which is Exh. 57/1 (11) was passed by the Registrar under section 46 of the Co-operative Societies Act read with rule 48 of the Co-operative Societies Rules, 1927. By this order the Registrar superseded the Managing Committee of the Society after holding an inquiry as required under section 43 of the Act. One of the reasons for supersession of the Society was that the Managing Committee had indulged in wrong and multiple allotments of plots. However, subsequently this order was re-called and another Managing Committee inducted into Office.

21. It is under these circumstances that the present five suits have been filed and I will now give a summary of the pleadings in these suits.

' Suit No, 45/66.-(Muhammad Azim v. Pakistan Employees Cooperative Housing Society Ltd.)

' This suit like Suit No, 46/66 was originally filed in the Court of the VIII Civil Judge, First Class, Karachi, where it was numbered as Suit No, 25/65. The plaint was presented on 23-1-1965.

Subsequently when other suits were filed on the Original Side of this Court, this suit along-with Suit No, 46/66 was transferred for trial in this Court. The prayer in the suit is for a declaration that the Socity had no legal right to take forcible possession of the plot from plaintiff Muhammad Azim because the latter had paid the full price of the plot to the Society and had obtained its vacant possession after getting the same demarcated. Plaintiff Muhammad Azim had also sought a declaration that the Society had no legal right to allot the plot to any third party. There was also a prayer for grant of permanent injunction to restrain the Society from interfering with the legal possession of plaintiff Muhammad Azim and further to restrain the Society from allotting the said plot to any third party.

' The suit was based on assertion of a right to possession of the plot in question which the plaintiff Muhammad Azim stated had been purchased by him for a sum of Rs, 9,08,319 in July, 1963. The plaintiff had further asserted that the plot had been demarcated and possession handed over to him on 8-8-1963 and that he had put a temporary fencing around the plot and constructed quarters for residence of Chowkidars. The plaintiff Azim further stated that he had been making inquiries from the Government and the K. D. A. In regard to the type of construction that was allowed on this plot but the K. D. A. Had asked him to surrender a 30' strip for expansion of the road.

The plaintiff Azim had further stated that a Sub-Committee was formed by the Society to settle the question of compensation to the Plaintiff Muhammad Azim in lieu of 30' wide strip and that he had been advised by the Sub-Committee to refrain from submitting building plans till the question about the acquisition of 30' strip was settled. He further stated that the Society had cancelled the sale in his favour on 2-1-1965 and that on 12-1-1965 employees of the Society had attempted to forcibly dispossess him of the plot and that he had by a notice informed the Society that he was legally entitled to the plot and there was no question of his having surrendered the rights in respect of the plot, ' On 16-3.1965 the Society filed a written statement wherein it was stated that the plot had not been sold to plaintiff Muhammad Azim but only allotted to him. The receipt of the amount was admitted by the Society and it was further admitted that the plot had been demarcated although the fact of physical possession of the plot with the plaintiff Muhammad Azitn was not admitted. The Society also denied that there was any fencing or quarter on the plot. It was further alleged that plaintiff Muhammad Azim having come to know about the allotment in favour of the Bank, attempted to take forcible possession on 12-1-1965. The Society further stated that the plaintiff Azim had attempted to obtain refund of the amount paid by him or concession in the form of sub-division of the plot. With regard to the formation of the Sub-Committee to deal with the problem, the Society substantially admitted the allegations of the plaintiff. With regard to the rights actually accruing to the plaintiff, the Society stated that the transaction entered into between the Society and the plaintiff was ultimately to take the shape of a licence to construct on the plot and sub-lease for 99 years. The Society also denied having given any promise to the plaintiff to use its good offices with the K. D. A. In favour of the plaintiff, but however, it was stated that the Society had never prevented the plaintiff from submitting plans to K. D. A. The Society also asserted a right to re-allot the plot by cancelling the plaintiff's allotment specially because the plaintiff had requested for such cancellation. Besides the above aversions, the Society also pleaded that the Suit was not maintainable because no notice under section 70, Cooperative Societies Act had been given and that the Suit was barred under section 54 of the Co-operative Societies Act. It was also pleaded that section 42 of the Specific Relief Act barred the grant of reliefs claimed by plaintiff Muhammad Azim.

22. After about 2i years of the filing of the written statement, the Society made an application under Order VI, rule 17 read with section 151, C. P. C. For amendment of the written statement. This application was allowed and an amended written statement was filed on 20-10.1969. In this written statement the Society pleaded that the allotment in favour of plaintiff Muhammad Azim, which was provisional in its very nature had been obtained by fraud, collusion and forgery. It was stated that the offer of Habib Bank Ltd. Was highest and, therefore, the plaintiff Muhammad Azim was not entitled to allotment and that the plaintiff had collusively and fraudulently enabled himself or managed to raise the offer for the plot through letters dated 25-5-1963, 20-5-1963, 31-5-1963 an undated subsequent letter. It was further stated that no notice was given to the Habib Bank to revise its bid. The physical possession of the plaintiff Azim in respect of the plot was denied. It was asserted that plaintiff had obtained possession on 4-3-1965. The Society once again averred that the allotment was cancelled on the request of plaintiff Muhammad Azim and that the Society had a legal right to re-allot the plot to a third party. It was further stated that the allotment was vitiated by fraud, collusion and forgeries and that the allotment had become infructuous or ineffective on ground of non-payment of ground rent. Although in written statement the allotment was called provisional but it was further stated that subsequently a licence to contract on the plot and sub- lease for 99 years was contemplated.

' I may here state that the application for amendment of the written statement states that after the Managing Committee of the Society had been superseded and the administration of the Society had been taken over by an Administrator, irregularity about this allotment in favour of plaintiff Muhammad Azim had been unearthed. I have already stated while giving the facts leading to this litigation_ that the management of the Society had been superseded by the Registrar vide order Exh. 57-1(11): ' Suit No, 46/66-(Messrs United Batik Ltd. v. (i) Muhammad Azim : (ii) Pakistan Employees Co- operative Housing Society.

23. This suit also was filed in the Court of VIII Civil Judge, First Class, Karachi on 8-3-1965 and was registered as Suit No, 69/65. Thereafter, this suit was withdrawn for trial on the Original Side of this Court and it was re-numbered as Suit No, 46/66. This suit was filed by the Bank for the a declaration that Bank was the rightful allottee of the plot and was in possession of the suit property, having acquired possession on 9-1-1965 after payment of full value of the property to the Society.

The other prayer was for a declaration that Muhammad Azim had no right, title or interest to the said property as his provisional allotment had been lawfully cancelled by the Society. There was a prayer for grant of a permanent injunction to restrain Muhammad Azim from interfering with or disturbing the possession of the Bank and further to restrain him from causing any damage to the plot or raising any construction over the same. The Bank also claimed a decree for Rs, 10,000 by wry of damages on account of Muhammad Azim having attempted to dispossess the Bank.

' I would not re-state all that is in the pleadings except to such extent as is different from or at variance with the pleadings in the previous Suit viz. Suit No, 45/66. The case of the Bank was that it had obtained possession on 8-1-1965 after paying full value of the rr'''t and by virtue of possession certificate and demarcation certificate. It was further stated that plaintiff Muhammad Azim had unsuccessfully attempted to take possession of the plot on or about 12-1-1965 and with a view to fortify his claim to the plot and wrongful possession thereof Muhammad Azim had filed a criminal case also against some functionaries of the Bank. It was further stated that Muhammad Azim had committed trespass on the plot on 4-3-1965. The Bank claimed that the allotment in their favour was valid and that the cancellation of allotment in favour of Muhammad Azim was also legal and valid.

' Plaintiff Muhammad Azim filed a written statement on 4-10-1965 wherein he stated that the Bank had no valid allotment or in any case the allotment was invalid. It was stated that office bearers of the Society had conspired with the Bank to deprive him of the plot. He further stated that sale of the plot in his favour was complete. He had stated that his offer of Rs, 201 per sq. Yd. Was the highest and the same had been accepted by the Committee appointed by the Managing Committee of the Society and that the Managing Committee had also passed a resolution accepting the offer.

He further stated that the Plot had been transferred to him for construction of spacious and single unit buildings. He also stated that the transaction in his favour was valid and that he had submitted plans to the K. D. A. For construction. He denied having attempted to take possession of the plot forcibly as was alleged in the plaint.

' The Society in their written statement substantially admitted the case of the Bank. But no allegation of fraud or forgery was made against plaintiff Muhammad Azim.

' Subsequently when the Society was permitted to amend its written statement in Suit No, 45/66, amended pleadings were filed in this suit also. In these amended pleadings it was stated by the Bank and the Society that the allotment in favour of plaintiff Muhammad Azim was tainted by fraud and that the allotment order had been forged by adding letter 's' to the word building. The Bank filed an amended plaint and para. 6 of the plaint stated that the allotment in favour of Plaintiff Muhammad Azim was invalid because it was obtained by fraud and further that the said allotment was subject to approval by K. D. A. Which had not been obtained. It was further stated mat the allotment was vitiated on account of forgery in the allotment order. It was also stated that Muhammad Azim having failed to surrender the strip of land as required by the K. D. A. Had disentitled himself to the plot. It was also stated that the Society was justified in cancelling the allotment. In the amended written statement filed by Muhammad Azim, allegations of fraud or forgery were specifically denied.

Suit No, 243165.-(United Bank Ltd. v. (i) Muhammad Azim : (ii) P. E. C. H. S. Ltd.

24. This suit was directly filed in this Court on 21-10-1965 and the Bank prayed for a decree for possession of the plot. In addition the Bank has claimed damages of Rs, 4,00,000 by way of general damages and mesne profits. The Bank has also claimed recurring damages at the rate of Rs, 15,000 per month. In the alternative tile Bank has prayed for a decree for refund of Rs, 10,000 with interest and damages of Rs, 3,00,000 against the Society.

' The Suit was based on allotment in favour of the Bank and the .Further aversion was made that the Bank was in possession. It has been stated by the Bank in the plaint that they were assured by the Society that there was no encumbrance on the plot and that the sum of Rs, 10,00,000 was paid by the Bank to the Society on such assurance and before taking physical possession. The Bank in the plaint alleged that they were in physical possession, but Muhammad Azim had criminally trespassed over the land. I may point out that no allegation either of fraud or forgery was made in the plaint.

' Muhammad Azim filed his written statement on 22-12-1965 wherein he disputed the validity of the allotment in favour of the Bank and denied that the Bank was at any time in possession of the plot.

He also alleged that no offers were invited before allotting the plot to the Bank and that the allotment had been procured or manoeuvred by the Society and the Bank for depriving him of the plot. He reiterated his right to the plot and the fact of his possession. It was stated by plaintiff Muhammad Azim that the Bank was fully aware of the previous allotment in his favour he further alleged that on 12-1-1965 the barbed wire fencing of the plot had been forcibly removed and that he had lodged the report at the Police Station.

' The Society in their written statement filed on 8-2-1966 stated that no assurance of non- encumbrance was given by the Society to the Bank and that the Bank knew about the previous allotment and took it with open eyes. It was further stated that the Bank account in the name of the Society with the United Bank Ltd. Had a condition for repayment to Muhammad Azim before the same could be operated at all. The Society further stated that the Bank did not take possession of the plot on account of its negligence, inefficiency or conspiracy or collusion with Muhammad Azim.

It was further stated by the Society that the Bank had taken the plot with full knowledge of every fact and risk involved, and therefore, the Society was not liable to pay any damages to the Bank.

' Subsequently, amendments were sought to be made in the pleadings on the basis of fraud, collusion and forgery as in the other suits.

25. However, a Miscellaneous Application bearing No, 504/72 was filed by the Society on 9-3-1972 wherein the Society unequivocally admitted the claim of the Bank to possession and agreed that a decree for possession may be passed in favour of the Bank. However, in the same application it was stated that the question of damages should be decided only as between the plaintiff Muhammad Azim and the Bank.

' Again on 3-8-1972 the Bank and the Society made a joint application bearing Miscellaneous Application No, 1055/72 wherein a prayer was made that the Society may be transposed as co- plaintiff with the Bank in the suit. This application was not resisted >on behalf of Muhammad Azim because according the learned Advocate for Muhammad Azim ; the Bank and the Society were in collusion and had made common interest against Muhammad Azim. Since all the parties consented to transposition, I allowed this Miscellaneous Application.

' Suit No, 25/1966.-Muhammad Azim v. (i) P. E. C. H. S. Ltd., (II) Mr. Zafrul Ahsan, (iii) Mr. A. A. Hasan.,

(iv) United Rank Ltd. (v) Mr. Agha Hasan Abidi.

26. This plaint was presented in this Court on 17-1-1966 by plaintiff Muhammad Azim for recovery of Rs, 6,00,000 from the defendants on account of damages for unlawful conspiracy to deprive him of the plot and trespass on the plot and cost of the materials etc. ' In the plaint Muhammad Azim has once again asserted his rights to the plot and stated that he was in possession and that his allotment had been illegally cancelled. He stated that the Society had tried to forcibly dispossess him. He built up a case that Mr. Zafrul Ahsan and Mr. A. A. Hasan respectively the Chairman and the Secretary of the Society had entered into a conspiracy with Mr. Agha Hasan Abidi, the Director o United Bank Ltd. To dispossess . Him of the plot and deprive him of his rights in respect of the plot.

' The Society in their written statement submitted on 18-4-1966 challenged the jurisdiction of the Court to inquire into or examine matters relating to indoor affairs or management of the Society.

The jurisdiction of this Court was also challenged on the ground that Muhammad Azim had also a right of appeal to the Managing Committee of the Society and the General Body of the Society and since he had not exhausted these remedies, the suit was not maintainable. It was further stated that there was no condition of allotment of plot io the highest bidder and that the Society could allot commercial plots in any manner. It was further stated that Society could not sell the plot but could only allot the same and such allotment created only a licence and a permission, but did not create any right or interest in the property, The allegations of fraud, collusion and forgery were again repeated.

' The Bank and Mr. Agha Hasan Abidi filed a written statement on 22-4-1966 wherein the rights of the Bank to the plot were reiterated. The Bank also claimed possession of the plot and it was stated that there was no but or construction on the plot. It was further admitted that the Bank had come to know that the Society had tried to help Muhammad Azim with the K. D. A., but the K. D. A. Had refused to permit construction of more than one building on the plot. It is then stated that since Muhammad Azim was attempting to get compensation from the Society in respect of the 30' strip, the Society cancelled the allotment. The Bank denied the existence of any conspiracy. It was further stated that question of allotment, cancellation, sale etc., related to internal management of the Society and inquiry in this respect was not within the jurisdiction of this Court. The jurisdiction of this Court was further challenged on the ground that the Society acted as the domestic tribunal to whose jurisdiction Muhammad Azim was subject.

' The Society filed an amended written statement on 20-10-1969 wherein the jurisdiction of the Court was challenged on the ground of the matter being an internal affair of the Society and Muhammad Azim being subject to the Jurisdiction of the "Domestic Tribunal" of the Society. It was further stated that the Society held the lands for allotment and grant of sub-lease, but subject to approval of the Government or K. D. A. It was further stated that in the approved lay-out plan the plot is not shown as sub-divided plot. It has also been stated in the written statement that the allotment was a mere licence and permission and did not confer any right in respect of the plot.

The allegations of fraud, collusion and forgery were reiterated. However, in the written statement it was stated that when forgery by addition of letter 's' to the word building was detected and brought to the notice of the Managing Committee, the allotment was ordered to be cancelled, unless Muhammad Azim adhered to original terms and conditions of allotment. The formation of the subcommittee was admitted, but it was stated that Muhammad Azim did not agree to the terms of the Sub-Committee.

' The Bank also filed an amended written statement on 20-10-1969 wherein there was the same re- statement of the aversion both factual and legal.

' Suit No, 26/1966.-Muhammad Azim v. (1) P. E. C. H. S. Ltd., (ii) United Bank Ltd.

27. This suit was filed on 20-1-1966 by Muhammad Azim for a declaration that he is the lawful purchaser and allottee of the plot and is in possession of the same. He has also prayed for a declaration that the allotment in favour of the Bank issued by Society is illegal. He has also prayed for a permanent injunction to restrain the Society and the Bank from taking possession of the plot, There is a further prayer for damages on account of the wrongful acts of the defendants.

' The suit is based on the same statement of rights as in the other suits. Likewise the written statements of the Bank and Society are also in identical terms. Same pleas about internal management and exclusion of jurisdiction on account of existence of domestic tribunal have been raised. It is not necessary to repeat the various allegations and facts contained in the pleadings as I have already given a fairly full resume of the facts and a versions which form the basis of the case of each one of these parties.

' However, at the time of arguments, the learned Advocate for Muhammad Azim had made an application for amendment of the plaint. This application was made because an argument was raised by Mr. Akhlaq Hussain that further relief as contemplated by section 42 of the Specific Relief Act not having been claimed by Mr. Muhammad Azim, he was not entitled to a decree. By a short order, I dismissed this application for amendment and the reasons for this order will follow in this judgment. Suffice it to say at this stage that I do not consider such a prayer to be necessary for the effective disposal of these suits.

28. I have already stated all the facts relating to these five Suits ; consent issues were framed on 21- 1-1970 which appear in the file of Suit No, 25/1966 and are reproduced herein below :- Consent Issues "(1) Is the suit not maintainable ?

(2) Whether adequate court-fees have been paid by Muhammad Azim ?

(3) Whether the allotment of the plot in suit in favour of Muhammad Azim was a final and valid one ?

(4) Whether the allotment in favour of Muhammad Azim was procured fraudulently ?

(5) Whether the allotment in favour of Muhammad Azim was validly cancelled.

(6) Is Muhammad Azim barred or estopped from questioning the action of the P. E. C. H. S.?

(7) Whether the plot was validly allotted to United Bank and possession handed over to them ?

(8) Which party is entitled to mesne profits and damages and against whom ?

(9) What should be the decree and against which Party ?"

29. In these suits numerous documents have been filed and each one of the main parties has produced evidence. At the time of arguments, plaintiff Muhammad Azim was represented befor me by Mr. Percy Ramchandani. The Society was represented by Mr. Haji Mutiur Reiman whereas the Bank was represented by Mr. Akhlaq Hussain, who was assisted by Mr. Ashfaq Hussain.

' Issue No, 2 which relates to Court Fees has not been pressed before me whereas arguments have been advanced on every other issue. I propose to take up Issues Nos. 3 and 4 first and I am discussing these issues jointly.

' Issues Nos. 3 and 4.

30. These issues relate to validity of allotment in favour of plaintiff Muhammad Azim. The points that have been raised by the learned Advocates in regard to these issues are to the following effect :- (0 Did the Society have the power of allotment of the plot to plaintiff Muhammad Azim ?

(ii) Was the allotment in favour of Plaintiff Muhammad Azim done validly ?

(iii) Has the allotment been obtained by fraud ?

(iv) Has the allotment order become an invalid document on account-of forgery ?

(v) Was the allotment final in the sense that it could not be cancelled ?

' For the purpose of determining these questions, I will first examine the Licence Agreement, Exh.

57/1, executed on 6-8-1968 between the President of Pakistan and the Society. In the Licence Agreement the President has been designated as the landlord and the Society as licensee. By this agreement the Landlord authorised and permitted the Licensee viz. The Society to enter upon the land transferred by this Licence Agreement. The terms and conditions to which this licence agreement is subjected provide that the Society had to get the land surveyed and divided into blocks and also to make provision for roads. Para. (II) (2) of the Licence Agreement provides that the Society cannot divert any plot to any use other than the one for which it had been-approved without the previous consent in writing of the Landlord or the K. D. A. The same para. Also states that the K. D. A. Was to exercise control over the development of the land under the provisions of Karachi Development Authority Order (President's Order No, 5 of 1957). This document also provides that the Society had to prepare and submit to the K. D. A. An overall development scheme and the work of development had to be completed within the specified time. Para. IV (c) again provides that the execution of the scheme in regard to development has to be carried out by the Society under the directions given by the Landlord or the K. D. A. In that regard from time to time. Para. VI provides for allotment of the plots. Since the plot in question is a commercial plot, I will reproduce Para. VI (2) which deals with allotment of plots reserved for commercial purposes :-- "Plot reserved for commercial purposes shall not be disposed of by the licensee except under and in accordance with the directions given to it by the landlord or the Authority (K. D. A.) as the case may be in wilting from time to time, and on the terms setout in Form 'C' appended hereto."

' Form 'C' which is annexure to the main licence agreement provides a pro forma of a lease between the President of Pakistan and the Society. This agreement provides that the Society was to be granted a lease of a portion of the plots mentioned as commercial plots. It further provides that on compliance of some conditions by the Society the President of Pakistan had to lease and demise unto the Society all the commercial plots. Para VI of this proforma agreement reserves to the Society the power to sell, sub-let, assign or otherwise transfer the commercial plots whether with or without buildings thereon. It is agreed case between the parties that this lease in regard to commercial plots as is contemplated by Form 'C' to the agreement has not yet been entered into.

31. However, the parties have placed on record a pro forma of sublease (Exh. 38) which is to be executed between the Society and the individual transferees of commercial plots, but only after the lease of commercial plots by the President of Pakistan in favour of the Society. Since it is conceded case that a sub-lease in respect of the commercial plots was to be executed subsequently, I have examined the terms of this pro forma of sub-lease. Para. 7 reads as follows :- "The sub-lessee (purchaser or allottee) shall have the power subject to the above conditions to sell, sub-let, assign or otherwise transfer his rights in the said plot with or without building thereon, but such transfer shall in every case be subject to the above conditions, etc."

' The conditions referred to in para. 7 of the proforma of sub-lease relate to payment by the sub- lessee to the Society in respect of the plot and regulations regarding construction and payment of municipal taxes rates, etc.

32. Before I conclude examination of this Licence Agreement, I would make a reference to the lay- out plan of the Society which is appended to this Licence Agreement. In this lay-out plan, the plot in these suits is shown in the blue-print as "Commercial Plots". I must say that at the time of arguments, the learned Advocates for the parties did not invite my attention to the description of this plot in the lay-out plan, but on examination of the plan, I have found that the plot in question is referred to in plural and not in singular.

33. Earlier to the execution of the licence agreement, the Government of Pakistan, Ministry of Works had passed an order on 11-2-1958 and the said order has been placed on record as Exh. 57/1 (25).

This order was passed with a view to apportion the powers and responsibilities of the Society and the K. D. A. Vis-a-vis the land granted to the Society. This order states that some changes and modifications had been made in the original lay-out plan viz. The plan appended to the previous licence agreement between the Society and the Government. It was decided by this order that work of development and land management was to continue to remain with the Society and be its responsibility ; whereas the K. D. A. Was to exercise effective control over the Society in the following matters :-

(i) Maintenance of boundaries.

(ii) Construction of roads.

(iii) Providing of amenities like schools, clubs, clinics, etc.

(iv) Provisions .For market B, C & D together with the bus stands.

' Para. 2 of this order further states as follows :- "In order to ensure that the above undertaking is fulfilled, no sub-licence will be issued by the Society to its members nor will it be registered until a 'no objection certificate' is obtained from the K. D. A. Similarly no lease will be issued by the Government of Pakistan as the landlord nor will it be registered until a 'no objection certificate' is obtained from the K. D. A. And produced before the Registrar."

34. On a consideration of these documents, the position appears to be that Commercial Plots were to be sub-leased by the Society to individual allottees and the sub-lease could be executed and registered only after the lease was executed by the President of Pakistan in favour of the Society and the K. D. A. Had granted a 'no objection certificate'. There is no dispute, however, that the land specifically marked for commercial plots had been granted to the Society; nor is there any dispute on the point of the Society being able to transfer possession of commercial plots pending the execution of lease in his favour and sub-lease in favour of allottees or transferees. In fact the right of United Bank Ltd. Also does not stand higher though it has succeeded in obtaining recognition of its allotment in 1967.

35. The learned Advocate for the Bank has argued before me that the allotment order issued by the Society in favour of Muhammad Azim, the plaintiff, was a mere licensee and did not create any interest in the plot. The learned Advocate argued that the Society had no power to transfer the plot without obtaining a lease in its favour from the Government and getting no objection certificate from the K. D. A. In this context I may briefly refer to the provisions of section 52, Easements Act.

Section 52 provides that whenever a person grants to another person a right to do or continue to do something, which without such grant would be unlawful ; such right will be a licence. But if a right creates an interest in the property, the grant cannot be called a licence. The question is whether the Society intended or contemplated by this transaction to create an interest in favour of plaintiff Muhammad Azim in regard to the plot in question. For this purpose it will be useful to examine the so-called allotment order issued by the Society in favour of Muhammad Azim. This allotment order which is Exh. 55/1 was issued on 30-7-1963 and bears the signature of the Socretary of the Society as well as the seal of the Society. It states that the plot measuriug 4,519 sq.

Yds. Was allotted to Muhammad Azim for constructing buildings. It further provides that Muhammad Azim was to pay ground rent at the rate of one Anna per Sd. Yd. Per Annum. Earlier to this the Society had advertised and invited tenders for the grant of lease hold rights for 99 years in respect of this plot. This advertisement which is on record as Exh. 57/1(6) states that the site plans and the terms and conditions in respect of the grant of leasehold plots were available in the Office of the Society. These terms and conditions referred to in the advertisement have been placed on record as Exh. 57/1(13) and are entitled as "terms and conditions of allotment of cinema and Nursery commercial plot." Even these conditions state that the plot was to be utilised as a commercial plot and building plans will have to be got approved by the Society before the same were forwarded to the K. D. A.

36. In fact in various documents concerning the disposal of this plot; the manner of disposal has been described by the Society as a sale. Even though it connot be considered to be sale, I have no doubt whatsoever that the Society had the power to grant lease in respect of the plot and the document which is called as allotment order is in fact an agreement for lease.

37. A case an similar facts arose between the same Society and Anwer Sultana. This the reported case of Pakistan Employees Co-operative Housing Society Ltd. v. Anwar Sultana and others (1). In that case an amenity plot had been allotted by the Society to a non-member and it appears that the nature of the transaction was examined by the Division Bench. Mr. Justice Anwarul Haq (as he then was) now a Judge of the Supreme Court of Pakistan, who wrote the judgment on behalf of the Division Bench observed as follows :- "It was common ground between the parties and there were usually three stages in which the plot was dealt with by Society namely an allotment, followed by a sub-lease, and a lease. It seems, therefore, that under the terms of its licence the Society was competent to lease-out the plot in dispute In these advertisements applications were invited for leases for two plots of land, about 3 Acres of land, situated in Blocks Nos. 2 and 6 of the Society . All these circumstances go to show that although the

(1) PLD 1969 Kar. 474 ' Society was licensee from the Government in respect of the land placed under his control, yet in his own turn it had the authority and was in practice using that authority to grant leases to its members and others. The lease in question cannot, therefore, be held to be ultra vires of the powers of the Society."

' In that case also an allotment order had been issued and this allotment order was held to be an agreement of lease.

38. In the case of Abdullah Bhai and others v. Ahmed Din (1), their Lordships of the Supreme Court considered the salient points of distinction as between a lease and a licence and observed as follows :- "The criterion for distinction 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, but the determination of this question may be difficult in the circumstances of a particular case."

' Their Lordships also observed as follows :- "During the continuance of the lease, the right of enjoyment of the property belongs to the tenant and not to the landlord. The right of ownership as well as the rights of which it is composed in rem and not in personam and by the lease a right in rem is transferred to the lessee."

' The most important and determining factor is whether a personal right is granted to an individual to do some act on the property or whether the grant envisages and contemplates rights in the property itself. In the former case it is a licence and in the latter, it is a lease. Applying this test and considering the circumstances of the transaction I find that plaintiff Muhammad Azim had paid more than 9 lacs of rupees and the Society had undertaken to grant a 99 years lease. Furthermore, the lease was for the construction of buildings for commercial purposes. If rights in land are given to a person for the purpose of constructions of a permanent nature, the presumption in law would be in favour of construing such a, transaction as a lease rather than a licence. Moreover, it is inconceivable! That a person will pay about a million rupees and possibly spend a few millions more on constructions just to acquire a licence. In the circumstances of this case, I will hold that the Society had entered into an agreement of lease with plaintiff Muhammad Azim.

39. The events subsequent to allotment of this plot disclose that Muhammad Azim had prepared plans regarding sub-division of the plot and these plans were actually forwarded by the Society to the K. D. A. Not only that, but on 25-2-1964 a meeting of the Managing Committee of the Society was held and at this meeting the Town Planner of the K. D. A. Was present as representing the K. D.

A. A resolution which is Exh. 34 on the record was passed and it will be profitable to reproduce a portion of this resolution. It reads as under :- "The Town Planner further proposed that in return of this 30' strip of land, the K. D. A. Will allow the owner of the Nursery Plot an additional floor on the building to be built on the nursery plot.

(1) PLD 1964 SC 106 ' Besides (He) Town Planner will allow the owner to make some garages and shops in the basement of this slope-like Nursery Plot."

' It will be seen that Muhammad Azim, who according to Mr. Akhlaq Hussain was a bare licensee was-referred to as the owner of the plot by the Society and the Town Planner, K. D. A.

40. The next argument of Mr. Akhlaq Hussain is that interest in immoveable property can be created either by conveyance or inheritance and that the allotment order not being a registered document is not receivable in evidence and confers no rights. He has also contended that without the concurrence or agreement of K. D. A. No rights devolved on plaintiff Muhammad Azim. Now I propose to consider the extent of the powers of the K. D. A. In relation to this plot in the first instance.

During the arguments Mr. Akhlaq Hussain has invited my attention to several documents which have been placed on record for the purpose of indicating the interest of the K. D. A. In this plot. The first of these documents is a letter dated 2-3-1957 from the Government of Pakistan to the Society.

It is stated in this letter that the plot known as Green Nursery on Drigh Road had been reserved for open space and amenity purposes and, therefore, was not available for allotment for the construction of buildings. This letter bears a date earlier than the date of the Licence Agreement which was executed on 6-8-1958. First of all it is not clear whether the "Green Nursery" referred to in this letter is the same plot which has been transferred, but in any case the lay-out plan annexed to the Licence Agreement under which the Society acquired rights to land shows the plot in question in the suits to be "Commercial Plots". It would seem that this plot that is referred to in this letter, if it is the same plot which is a subject-matter of dispute in these suits, was perhaps being treated as amenity plot. But on the basis of the lay-out plan annexed to the licence Agreement, this plot is a commercial plot and not an amenity plot.. Mr. Akhlaq Hussain next relied on a document purported to be a letter from the Town Planner, K. D. A. To the Society dated 12-9-1961 and produced on record as Exh. 56/14. By this letter the Town Planner had requested the Society to revise the lay-out plan to provide place for parking. As I have already pointed out, the Licence Agreement provided for preparation of schemes under the direction of the K. D. A. In relation to provision for roads. This letter has been written with that purposein view and does not at all go to indicate that the K. D. A.

Had anything to do with the allotment of this plot. Furthermore, this letter referred to the plot in question as "plots in nursery plot". Mr. Akhlaq Hussain has also referred to Exhs. 17 and 26 which are letters from or on behalf of plaintiff Muhammad Azim, and addressed to the Society wherein Muhammad Azim has recognised the authority of the K. D. A in respect of the plot. As I have said I have no doubt whatsoever that the K. D. A. Has some authority in respect of plots in the society but that authority is only for the purpose of disposal of the plots in a manner which would be in conformity with the conditions in the Licence Agreement and layout plan. This authority is no higher than the provision of roads and completion of schemes. With regard to distribution and disposal of land, the K. D. A. Had no powers. There are several documents on the record which have been produced by Nizamuddin, the Land Inspector of the K. D. A. These documents show that the K D. A.

Had the power of preventing deviation in the muter of use of the plots and compliance in the matter of schemes and lay-out plans of the Society, but none of these letters shows that the K. D. A.

Had anything to do with the allotment or disposal of the plots. I would, however, make a mention of a document namely Exh. 57/15 in this behalf. This document which is a record of the Minutes of the meeting of K. D. A. Held on 25-9-1963 (after allotment to Muhammad Azim) shows a Minute of the said authority in the following words :- "There was a condition that this plot would not be allotted or sold without the prior sanction of K. D.

A. And the P. E. C. H. S. Having not stood by their commitment in this respect. The P. E. C. H. S. Is required to explain why they have committed this breach of contract. The Ministry may also be informed of this for necessary action."

' The above Minute would indicate that the K. D. A. Perhaps was of the view that allotment of the plot was subject to their sanction. No evidence has been brought to show under what circumstances this Minute was recorded but the title of this Minute indicates that the question of sub-division of Nursery Plot engaged the attention of the K. D. A. After Muhammad Azim submitted plans for sub- division and that is why this Minute came to be recorded. However, there are several other documents on the record which clearly go to indicate that the K. D. A. Was not to exercise any authority in regard to disposal of this plot. I would in the first instance refer to a letter Exh. 9/1(6), dated 25-11-1963 from Mr. A. M. Khan, Section Officer, Rehabilitation Ministry. In this letter Mr. A. M.

Khan inquired from the Town Planner, K. D. A. Whether the Society had given an undertaking in writing that the Nursery Plot would not be sold without the approval of K. D. A. A demand of copy of such undertaking was made but no such undertaking has been produced in Court nor who it produced by K. D. A. In reply to this requisition. On the contrary Assistant Town Planner, K. D. A. By a letter dated 29-2-1964 addressed to the Society and produced on record as Exh. 9/1(13) asked the Society to supply the Town Planner with a copy of the undertaking in regard to disposal of this plot.

No such undertaking was produced and I fail to understand as to why a copy of the undertaking was being demanded from the Society when it should have been with the K. D. A. I may also refer to a document bearing Exh. 9/1(8) which is a record of the Minutes of the meeting of the K. D. A. Held on 29-11-1963. In these minutes it has been recorded that the proposal for sub-division of the plot had been rejected by the Town Planning Committee, but in the same minute it is also stated as follows :- "Since it has been acquired by one owner, the whole project should be considered as one and normal two floors construction may be allowed over the car parking floor."

' This would clearly show that K. D. A. Recognised the transfer of this plot by the Society to Muhammad Azim. I may also in this context refer. To Exh. 34 which is the record of the Minutes of the meeting of the Society held on 25-2-1964. Mr. Ahmed Ali, Town Planner, K. D. A. Was present at this meeting and it was decided pursuant to a proposal of the Town Planner himself that the owner of the plot may return a 30' strip of the land for which the K. D. A. Would allow the owner the right to construct an additional floor besides some garages and shops in the basement of this plot.

' In this context I may also refer to a letter from the Secretary c f the Society to the Ministry of Rehabilitation and Works. This letter which is Exh. 66 on the record was written on 13-10-1963. It will be profitable to quote a portion of this letter.

"The plot was shown in the approved lay-out plans of the Society as commercial plots which was duly signed by the Secretary, Ministry of Rehabilitation (because Government agreed to the sub- division of the plot at that time).

' On the basis of Government's decision, the plot was sub-divided by the Society and disposed of to the highest bidder Muhammad Azim, so that the amount be utilized for the completion of the balance of development work in the area as has been directed by Government recently."

' There was no reply by the Government to the Society. If the Society had no powers to dispose of this plot or if the K. D. A. Had any authority in regard to disposal of this plot, this letter from the Secretary of the Society would not have gone unchallenged.

' The plaintiff Muhammad Azim has in his evidence produced several documents and one of these documents is a letter bearing Exh. 55/16 written by Section Officer, of the Rehabilitation Ministry, to Muhammad Azim on 29-5-1964. In this letter the Section Officer advised Muhammad Azim to submit building plan of the plot in question to K. D. A. For putting up a building having shops and show-rooms on the ground floor and flats on the upper floor. Lastly there is another document Exh.

55/17 which is an application made by Muhammad Azim, the plaintiff, to the Town Planner, K. D. A.

Wherein he asked the K. D. A. To indicate the type of building that he could construct on the premises. The K. D. A. Did not object to use of this plot by Muhammad Azim in spite of the disposal having been made by the Society without any consultation or interference by the K. D. A.

' All these documents leave me in no doubt whatsoever that K. D. A. Had nothing to do with the disposal of this plot.

41. The next argument of Mr. Akhlaq Hussain is that the allotment order had been obtained by plaintiff Muhammad Azirn by fraud. He has stated that since fraud will destroy all rights, the allotment order cannot confer any rights on plaintiff Muhammad Azim. For proper determination of this question I may initially give a history, of this litigation. Five suits have been filed which are being decided by this judgment. The first suit was filed on 23-1-1965 by plaintiff Muhammad Azim against the Society. In fact all the suits were filed knr January, 1966. The written statements were also filed by March, 1966. In all these written statements filed by the Bank and Society and the Plaints filed by the Bank against the Society and plaintiff Muhammad Azim, no allegation of fraud was made. It was for the first time in October, 1967 viz. After more than two years of the filing of the first suit that an application was made for amendment of pleadings by both the Society and the Bank. This application was mainly grounded on the allegation of fraud on the part of Muhammad Azim in procuring this allotment. This application was allowed and amended pleadings were filed in October, 1959.

42. From the amended pleadings, I reproduce paragraph 6(e), ( f) and (g) of the plaint in Suit No, 46/66 (United Bank Ltd. V. Muhammad Azim and P. E. C. H. S.). This paragraph reads as follows :- "(6) The plaintiff have now come to know the following facts :-

(e) The allotment in favour of defendant No, 1 is also vitiated by a series of frauds which he perpetrated on the defendant Society. For instance, he got the letter 's' fraudulently and wrongfully added to the word 'building' in the expression 'single unit building' in the allotment order and other relevant documents contrary to the terms of allotment.

(f) In collusion with the then Secretary and Executive Engineer of defendant No, 2 (Society), he also had a plan of sub-division of the plot fraudulently and surreptitiously forwarded through the latter to the K. D. A. For approval without authority and contrary to the terms of the allotment'. Defendant No, 2 (Society) is not prepared to condone this breach and the Administrator now Incharge of the affairs of defendant No, 2 has also refused to condone the breach.

(g) In order to make defendant No, 2 agree to his terms, defendant No, 1 kept on insisting on the return of his money."

43. Besides these allegations no other allegation of fraud is contained in the pleadings. Mr. Akhlaq Hussain, the learned Advocate, for the Bank has, however, travelled far beyond the pleadings while arguing this case.

44. Under the provisions of Order VI, rules 2 and 4, C. P. C. Fraud had to be specifically pleaded and particulars with dates and items (if necessary) have to be stated in the pleadings. In cases of fraud, bare allegation without particulars do not constitute an adequate or sufficient plea. The question then is whether these allegations in paragraph 6 of the Plaint in Suit No, 46/66 make out a case of fraud.

45. Mr. Akhlaq Hussain at the time of arguments has raised the following points :-

(i) That the Society had no power to dispose of the plot.

(ii) That the Society had not reserved any parking place.

(iii) That the Society had not given adequate publicity before disposal of the plot.

(iv) That the offer of the Habib Bank was higher and, therefore, it was fraud on the Siety when the plot was given to Muhammad Azim.

(v) That the allotment order had been forged in a manner by addition of letter 's' with a view to give higher benefits to Mr. Azim.

46. With regard to the power of disposal of the Society, I have already held that the Society had full power to dispose' of the plot. Mr. Akhlaq Hussain has, however, relied on another document which is a letter from the Government to the Society dated 2-3-1957 (earlier than the date of licence agreement in favour of the Society). As I have stated earlier, the matter of division of powers between the Society and the K. D. A. Had been decided by an order of the Government of Pakistan on 11-2-1958 vide Exh. 57/1(25). By this order, disposal of the plots was exclusively within the powers of the Society. Even the licence agreement makes this position clear. Moreover, the K. D. A. Has taken no steps to cancel the allotment in favour of Muhammad Azim and on the contrary the Town Planner of the K. D. A. Had offered to straighten the relations between the Society and the plaintiff Muhammad Azim. Mr. Akhlaq Hussain has also relied on a document bearing Exh. 56/12 which is a noting sheet of K. D. A. In this document a note of the Town Planner, K. D. A. Appears. On 11-8-1960 he made a note that the approved lay-out plan of the Society contained an endorsement on this plot to the effect that the use of the plot shall be subject to prior approval of the K. D. A. In the approved lay out plan, there is no such endorsement and in fact there are documents on the record which clearly point to the fact that there was no undertaking given by the Society to the K. D. A. To subject the Society to consultation or direction of the K. D. A. In the matter of disposal of this plot. However, the Chairman of the K. D. A. On 19-8-1960 warned the Society against future defaults. The note is indeed vague and does not clearly indicate the nature of default. Moreover, in this document there is reference to some other documents which have not been placed on the record. In fact this bunch of documents from Exhs. 56/1 to 56/15 relates to the period prior to allotment in favour of Muhammad Azim. Subsequently, it appears, and is indeed established, that the stand of the K. D. A.

Was that Muhammad Azim should be allowed to make constructions on the plot.

47. As regards the reservation of the plot for providing parking space, the lay-out plan makes no such provision. Even if the K. D. A. Prepares a scheme as is envisaged by the licence agreement in regard to the reservation of a portion of plot for parking, the question would arise whether such a scheme will be binding on plaintiff Muhammad Azim. For the purpose of disposal of these Suits, it is not necessary to enter into that question. If and when such scheme is framed under Karachi Development Authority Order (P.

0. 5 of 1957), the question might come up for decision.

48. The argument of Mr. Akhlaq Hussain that sufficient publicity was not made is equally weak. On 4-1-1962 the Managing Committee of the Society held a meeting to consider some quotations received for the sale of the plot in question. Exh. 29 which is a record of the Minutes of the meeting states that the Committee decided to give more publicity to the sale of that plot. Thereaftetr, an Allotment Sub-Committee was formed and at a meeting on 10-5-1963 they decided to invite sealed tenders and gave wide publicity. Notice of tender was published in five daily newspapers of Karachi and tenders were opened on 28-5-1963. On opening the tenders, the tender of Habib Bank was found to be highest. Habib Bank had offered to purchase a plot at Rs, 185 per square yard.

Rainbow Estate Agency had already offered Rs, 200 per sq. Yard. No decision was taken because the Society considered the offer to be too low. Since the Society had reserved the right to reject tenders without any reason, it was decided by the Managing Committee at a meeting held on 8-6- 1963 that the plot should be disposed of by negotiations. Exh. 65 which is the record of the Minutes of this meeting reads as follows :- "All tenders were considered and it was decided that the bidders should be persuaded to increase the bid. For this purpose a Committee was formed consisting of Messrs A. R. Siddiqui, Jilani, Abdul Hayat, Ihsanul Haq alongwith Hony. Secretary which was to negotiate on this matter and give the plot to the highest bidder. {{URDU TEXT}} ' Thereafter, the aforesaid negotiation committee held a meeting on 20-6-1963 and at this meeting the representatives of plaintiff Muhammad Azim and Habib Bank were present. The Minutes of this meeting which are Exh. 31 on the record are revealing. It appears that the representative of the Habib Bank in spite of being told that Muhammad Azim had increased his offer to Rs, 200 per square yard, could not raise the offer beyond Rs, 185 viz. The original offer. On the other hand Muhammad Azim was given an impression, and I should say falsely, that Habib Bank had matched his offer to Rs, 200 per sq. Yd. Mr. Muhammad Azim thereafter raised his offer to Rs, 201 per sq. y d.

The Negotiation Committee decided to accept his offer. Curiously enough these Minutes show that in spite of Muhammad Azim's offer having been accepted, the representative of the Habib Bank was allowed three or four days time to consult his Principals with a view to improve the offer. Noting was thereafter done by Habib Bank and there was no communication from them until 4-7-1963. In the meantime the Society by a letter Exh. 57/1(24), dated 1-7-1963 agreed to allot the plot to Rainbow Estate Agency who were the Agents of Muhammad Azim.

' Even thereafter the matter was placed before the Managing Committee of the Society on 17-7- 1963 and the disposal of the plot in favour of Muhammad Azim was confirmed by the Managing Committee. Habib Bank raised no objection at that. Admittedly the full amount payable by Muhammad Azim to the Society was deposited by Muhammad Azim before 8-7-1963.

49. The contention of Mr. Akhlaq Hussain that adequate publicity was not given is not sound at all.

In fact the Society had decided to dispose of this plot by negotiation. Indeed they had the power to dispose of the plot in that manner. Moreover, Habib Bank is not a party in these suits and they do not appear to have any grievance.

50. Mr. Akhlaq Hussain has further argued that the doctrine of indoor management will not be attracted to this case. It* advanced the argument on the basis that having decided to dispose of the plot by publicity and invitation of tenders, they could not enter into negotiations. I am afraid I cannot agree with that contention. The Society could enter into Contracts and if Muhammad Azim dealt with the Society in good faith, his interest will be fully protected. Admittedly Muhammad Azim like United Bank was not even a member of the Society and further he was dealing with the Negotiation Committee set-up by the Society. Not only that, the decision of the Negotiation Committee was affirmed by the Managing Committee. He could reasonably presume the regularity of the acts performed by the functionaries of the Society. It cannot be considered that the Managing Committee could not setup a Negotiation Committee nor can it be said that the persons with whom plaintiff Muhammad Azim was dealing did not have the powers to do the acts that they have done. The doctrine of indoor management is fully applicable to the facts of this case. Even in the case of Pakistan Employee Co-operative Housing Society Ltd. v. Anwar Sultana, the application of the doctrine of indoor management was considered. In that case the Managing Committee of the Society had not even passed a resolution disposing of a plot, but it was only the Secretary who had acted and the learned Judges of the Division Bench came to the conclusion in the following words :- "Outside parties are not concerned with the internal management of the Company. They are not concerned to see that there was a proper quorum of Directors present or that persons who are apparently Directors had in fact been validly appointed, those are matters of internal management."

51. I would now like to consider some reported cases and the opinions of some authors on the doctrine of indoor management.

' L. C. B. Gower in "Modern Company Law" II Edition, at page 141 considered the rule in Turquand's case (I) and stated the case of agency and vicarious liability as follows :- `Here it must suffice to say that the Principal is liable if the Agent is doing.

(i) What he has actually authorised to do,

(ii) What an Agent of that type would normally have authority to do, or

(iii) What he has been 'held-out' by the Principal as having authority to do, provided that, in cases

(ii) and the other party to the transaction did not know that the Agent was exceeding his actual authority."

The rule when takes to its logical conclusion implies that unless the circumstances are such that the third party knows that the official had no authority or the circumstances were such as to put him on inquiry, the transaction will be protected and binding on the Company. Of course in cases where the third party or the Agent is guilty of fraud or improper conduct, this protection will not be available.

' In Palmer's Company Law (XX Edition), at page 250, the rule in Turqaund's case was held to be fully applicable to transactions entered into by a third party with the agent of a Company unless the third party is on notice of a irregularity in its internal management in connection with the subject- matter of the dealings. Further, at page 251, the learned author has stated that in the circumstances of a particular case if a third party is put upon an inquiry with regard to irregularity, Turquaund's case will not be applicable. Similarly the learned author says that the principles of Turqaund's case do not apply if a document is forged so as to purport to be a Company's document.

' In the case of P. E. C. H. S. v. Anwar Sultana Anwarul Haq J., (as he then was), now a Judge of the Supreme Court, on consideration of cases reported in Dehradun Alussorie Electrical Tramway Comany Ltd. v. Jagmandar Das (2) ; British Thomson Houston Company Ltd. v Federated European Bank (3), F. V. Demodara Reddy and another v. Indian National Agencies Ltd. (4), Kredit Bank Cassel v. Shenkers Ltd. (5) and South London Greyhound Race Courses v. Wake (6), stated the case relating to contracts with companies on the basis of doctrine of indoor management as follows "Broadly and briefly stated this doctrine is to the effect that persons contracting with the company and dealing in good faith may assum that acts within its constitution and powers have been properly and duly performed and are not bound to inquire whether acts of internal management have been regularly done."

' In this case which was decided by a Division Bench of Anwarul Haq and Abdul Kadir Shaikh, JJ., the facts were that there was only correspondence in favour of the allottee and such communications were received by the allottee from the Secretary of the Society. The learned Judges held (11 (1856) 6 E & B 327 (2) AIR 1932 All. 141

(3) (1932) 2 K B 176 (4) AIR 1936 Mad. 35

(5) (1926) All E L R 421 (6) 1930 All E L R 496 ' that the allottee was not required to inquires whether in fact the Society had approved the terms which had been offered to him.

52. Summing up, therefore, the concept of indoor management, the law is fairly well-established that a third party may in all reason rely on the assertion of an agent of the Company in respect of the contracts entered on behalf of the Company. His rights could be defeated only if it could G be shown that the third party knew of circumstances tending to defeat his rights or the transaction was fraudulent. Every corporation in law is equal to a natural person and does have an independent legal entity of its own.

53. Applying these principles to the facts of this case, I find that the transaction in favour of plaintiff Muhammad Azim was not only authorised but even ratified by the Managing Committee of the Society. There was no element of fraud in the transaction. Mr. Akhlaq Hussain has made a grievance that the circumstances indicated that the functionaries of the Society viz. Members of the Negotiation Committee in conspiracy and collusion with plaintiff Muhammad Azim had deliberately elbowed out the Habib Bank from the transaction in regard to disposal of the plot. The facts disclose otherwise. No doubt the tender of Habib Bank was highest, but earlier to that Rainbow Estate Agency's offer of Rs, 200 per sq. Yd. Was highest. This Agency coming to know that the highest offer by way of tender was only Rs, 185 per sq. Yd. Naturally protested. Thereafter the Managing Committee at its meeting authorised the Negotiation Committee to enter into direct negotiations in order to obtain highest value. These negotiations were held on 20-6-1963. At these negotiations the representative of the . Habib Bank was present and perhaps for want of authority from his principals did not raise the bid beyond Rs, 185 per sq. Yd. At that time in spite of Habib Bank representative refusing to raise the bid, plaintiff Muhammad Azim was informed by the Members of the Negotiation Committee that Habib Bank was prepared to pay Rs, 200 per sq. Yd. This representation was false although it was for the benefit of the Society. Plaintiff Muhammad Azim relying on this representation went to the extent of raising the price by Rs, 1 per sq. Yd. His offer was accepted and a letter of acceptance was actually issued to him on 1-7.1963. It was only on 4-7- 1963 when the offer of Muhammad Azim had been accepted that Habib Bank offered to pay Rs, 205 per sq. Yd. All these documents including the subsequent and belated offer of Habib Bank were in possession of the Society and all these circumstances were to the knowledge of the Managing Committee of the Society. In spite of that, the Managing Committee at its meeting on 17-7-1973 approved and ratified the action of the Negotiation Committee. At this meeting it was decided to return the deposit amount of Habib Bank and the same was also returned. Habib Bank thereafter took no legal action perhaps for the reasons that they were satisfied. Habib Bank is not even a party to these proceedings and if any party had a grievance it was this Bank viz. The Habib Bank. In fact United Bank was nowhere in the picture at all.

54. As to the element of fraud, I cannot understand how raising of the offer by Muhammad Azim could be termed to be fraud. It is admitted case that the offer of Muhammad Azim was the highest of the offers that had till then been received by the Society. I, therefore, hold that this transaction is not tainted on account of fraud. I may at this stage also state that Mr. Akhlaq Hussain had made allegation that one Mr Khairi, the then Secretary of the Society, was in conspiracy with plaintiff Muhammad Azim. Mr. Khairi, is not a party to this suit nor was he summoned for examination or cross examination In fact Abu Hasan Akhtar, who has appeared and given evidence in this case has not been able to make out any case either of fraud or conspiracy between Muhammad Azim and Khairi. All that he said in his evidence was to the following effect :- "The Society did not accept the tender of Habib Bank as it was considered that the amount was low, and therefore, wanted to allot the plot by negotiations with the persons who had given tenders.

The Committee of the Society was formed for the purpose of negotiations. Habib Bank then raised the offer to Rs, 205 per sq. Yd. However, this offer was not accepted by the Committee and the plot was allotted in favour of Rainbow Estate Agency at the rate of Rs, 201 per sq. Yd. I do not know what was the reason for rejecting the higher offer and accepting the lower offer."

' The aforesaid quotation from the evidence of Abu Akhtar is misleading. The facts are that the plot was allotted in favour of Rainbow Estate Agency on 20-6-1963 and confirmed by writing on 1-7- 1963 ; but the offer of Habib Bank was received on 4-7-1963. In any case this statement neither makes out a case of fraud nor of conspiracy.

55. 1 may also state that under section 19 of the Contract Act, agreements entered into by fraud are voidable contracts at the option of the party whose consent was obtained by fraud. All the same the party so defrauded can insist on the performance of the Contract. The Contract is not void, but voidable. Even this option of avoiding the contract is subject to an exception. This Exception to section 19, Contract, reads as follows :- "Exception.-If such consent was caused by himself, representation or by silence, fraudulent within the meaning of section 17, the contract, nevertheless is not voidable, if the party whose consent was so caused had the means of discovering the truth with ordinary, diligence."

' Furthermore, the person seeking to avoid a contract on the basis of fraudulent representation should prompt in seeking redress. If he allows a long time to elapse, he disentitles himself from obtaining any relief on the basis of fraudulent mis-representation. Mr. Percy Dingoinal, the.Learned Advocate for Plaintiff Muhammad Azim has strenously argued that the Society had disentitled itself from relief on account of delay. He has strongly relied on a Judgment of Mr. Justice Waheeduddin Ahmed, now a Judge of Supreme Court, in the case of Aisha Bai v. Usman Muhammad (1) His Lordship relied on and quoted passages with approval from the following English decisions :- "(11 United Shoe Machinery Company of Canada v. Brunet and others 1909 A C 330.

(2) Thomas Clarke v. Samuel Auchmuty Dickson 120 E R 463.

(3) Sheffield Nickel and Silver Plating Company V. Unwyn (1877 Q. B. D. 214 ' In the last of these cases, it was held that a Company after a lapse of long time claiming to set aside the resolution and enforcing the guarantee the ground of defendant having fraudulently misdescribed the property sol by him had disentitled itself to the relief on account of delay in repudiatio

(1) PLD 1967 Kar, 733 ' of Contract. In these cases, Mr. Akhlaq Hussain has argued that allotment order in favour of Muhammad Azim has been forged and, therefore, cannot found any rights. It is not his argument that the entire document has been forged, but he states that a letter 's' has been added in the allotment order (Exh. 55/1) after the word 'building' so that the purpose for which the plot was allotted to Muhammad Azim had been altered ; because by this forgery Muhammad Azim claims to be entitled to construction of more than one building on the plot. In this context, I must initially say that the original offer by Rainbow Estate Agency had asked for the right to sub-divide the plot and the forbearance of the Society from charging transfer fee in case of disposal of the sub- divided plots. Thereafter, the Society invited tenders and the conditions of tenders haVe been produced on record as Exh. 57/1 (13). In the notice of tenders, Exh. 57/1 (6) it was stated that the copy of site plans could be obtained from the Office of the Society. The lay-out plan appended to the licence agreement in favour of the Society shows this plot as "Commercial Plots". The word is in plural. Even Exh, 66, which is a letter from the Secretary of the Society to the Government of Pakistan, states that Government had agreed to sub-division of the plot. Moreover, a letter Exh.

56/14 dated 12-9-1961 from the Town Planner, K. D. A. To the Society mentions this plot as "Plots in Nursery Plot". Then the Minutes of the meeting of K. D. A. On 7-1-1964 also state as follows "Since it has been required (acquired) by one owner, the whole project should be considered as one and normal two floor construction may be allowed over the car parking floor." .(The word in brackets is mine).

' This would indicate that acquisition of the plot by a single owner came to the K. D. A. As a significant feature' in the case. Significance was attached to the fact of acquisition by one owner because the plot was not a single plot, but several plots joined in one by description. In fact, the K.

D. A. In its correspondence had recognized this plot to be not a single plot.

56. The contention of the Society is that letter 's' after the word `building' being in manuscript is subsequent forgery. In this context I will refer to Exh. 22 and Exh. 57/1 (24). Both these documents have been produced by the Society, but none of these is carbon copy of the original order of allotment in favour of Muhammad Azim, Exh. 55/1. In Exh. 22, the word "buildings" is typed, but the typewritten letter 's' is again overwritten in manuscript. Similarly Exh. 57/1 (24), which is the office copy of the allotment order also mentions the word "buildings" although the letter '5' is in manuscript. In the order of allotment Exh. 55/1, which has been produced by Mr. Muhammad Azim in his evidence, I have found para. 5 written in manuscript. This para. Reads as follows :- "5. Ground rent at -/1/- per sq. Yd. Per annum will have . To be paid to the Society in advance."

' This addition in manuscript is also not initialled or signed by anyone.

57. Not only that, but Muhammad Azim submitted a plan for subdivision of the plot on or about 14- 9-1963 viz, within six weeks of the allotment. On this application which is Exh. 25, some employee of the Society has made an endorsement reading "please verify". The Verification Clerk put a rubber stamp on this application on 13-9-1963. Three days thereafter the sub-division plan was forwarded by the Executive Engineer of the Society to K. D. A. For approval. It seems that K. D. A. Was not inclined to allow sub-division of the plot as car parking had become a problem in the area. On 29- 11-1963, a meeting of the Town Planning Committee of the K. D. A. Was held and in the Minutes Exh.

9/1 (16) the necessity for an area for car parking was expressed. Thereafter, the Minute reads that the K. D. A. Wanted to discuss a "scheme" in relation to this plot with the Architect of the Society. This meeting was held long after the sub-division plans had been forwarded by the Society to the K. D.

A., but the K. D. A. Had no object to that or in any case did not express such an objection. Even in the earlier resolution dated 25-9-1963, of the Planning Sub-Committee of the K. D. A., there was no objection in relation to subdivision of the plot although plans for sub-division had been forwarded to the K. D. A. This resolution is Exh. 9/1(3). It appears that on 29-11-1963 the K. D. A. For the first time objected to the sub-division of the plot as submitted by Muhammad Azim.

58. Thereafter, the Society held a meeting on 14-1-1964 and for the first time passed a resolution (Exh. 33) expressing concern at. Addition of letter 's' in the allotment order. There was no evidence that the allotment order which had been handed over to Muhammad Azim was before the Managing Committee; and, therefore, the only reasonable inference is that even the copy of the allotment order in the Office of the Society bore the letter 's'. This completely absolves Muhammad Azim of any forgery. However, Mr. Akhlaq Hussain has argued that Mr. Khairi and Muhammad Azim were in conspiracy and that is why this letter 's' was added after the word "building". Mr. Khairi is not a party in the suit nor has he been examined. There is no evidence whatsoever to show as to who added this letter 's'. The burden of avoiding these documents on account of forgery is plainly on the Society and even in evidence nothing has been proved to show that Muhammad Azim added or caused to be added this letter 's' to the word building in the allotment order either before or after 30-7-1963, the date which the allotment order bears. Mr. Akhlaq Hussain has, however, argued that any correction or alteration in a document, if unexplained, destroys the documents itself. I am unable to agree with this broadbased contention.

59. Whenever forgery is pleaded, the burden of proof on the party pleading it is indeed heavy. The burden cannot even be discharged on premises of presumptive proof. Even proof has to be of a very high degree excluding all possibilities of the alteration having been made innocently or in normal circumstances. Moreover, in order to deprive a person of his rights on account of forgery, it has to be affirmatively established that he committed the forgery. The evidence in proof of forgery has to be almost at par with evidence required in criminal cases. Essential ingredient for proof of forgery and even of fraud is bad intention and dishonesty.

60. The Contract Act does not deal with the effect of forgery in documents founding a claim.

However, Mullah in his book on Indian Contract and Specific Relief Act (VIII Edition) at page 372 under the topic "Excursus to section 62: unauthorised alteration of documents" has expressed his opinion. The learned author has distinguished between documents which create transfers and documents which are only evidence of transfer. Transfer is a matter of law and document is only evidence. More so, in this case, when the transaction between Muhammad Azim and the Society is not denied by the latter. Moreover, the alteration has to be a material alteration which should concern the rights of a party to the document. I my humble opinion, the mere alteration in the details of permitted construction cannot rob this document of its value. The_only question is whether Muhammad Azim could construct a single building of several buildings.

61. In the case of Abdool Hosein v. Goolam Hussain (1) it was held that addition in a document of description of immovable property which though not within the scope of the document would not be a material Migration. In the case of Mesha Ahronel v. The National Bank of India (2) a Bill of Exchange had been altered, so that, instead of documents being referred to as documents of pledge were made to read as documents creating a right to delivery against acceptance and this was not considered to be a material alteration. Similarly in several cases, a document like a bond which does not require attestation, the addition of the signatures of attesting witnesses has not been considered to be a material alteration. Only such alterations destroy rights as lay the foundation of a claim. In another case froml Madras viz. Paramma v. Ram Chandra (3) it was held that a purchaser for value of a piece of land from a person empowered to sell under a will is not precluded from relying upon the Will to prove the validity of the sale, though forged attestations are added to the Will after the sale. In Indo Pakistan sub-continent, the rule as stated by Mulla appears to be to the following effect :- "A material alteration, though fraudulent, made in a mortgage or hypothecation bond does not render it void for all purposes and the altered document may be received in evidence on behalf of the person to whom it is executed for the purpose of proving the right, title or interest created by or resulting from, the execution of the document, provided that the suit is based on such right and not on the altered document."

62. Applying the above principles. It would appear that even if this document is considered to have been forged in the minor respect of the addition of letter 's' after the word 'building' and even if Muhammad Azim is found to be guilty of this forgery ; the rights conferred by this document are not destroyed. First of all there is no evidence of forgery or anything in proof of Muhammad Azim being responsible for it, but even if those questions are begged, the question is : Does the document without the letter 's' confer a right on Muhammad Azim or not. It is nobody's case that Muhammad Azim did not acquire this plot, and it is further admitted that he paid a huge price for it.

Under these circumstances, I hold that not only forgery has not been proved but even if the document has been forged, it does not destroy the rights of Muhammad Azim. Moreover, the allegations of forgery and fraud were belated and the Society went on dealing with Muhammad Azim in spite of knowing all the circumstances of the case. It is needless to repeat that a Conciliation Committee was formed to settle the rights of Muhammad Azim. Moreover, the letter of cancellation of allotment states that the same had been cancelled not on account of fraud or forgery but at the request of Muhammad Azim.

' For these reasons, I hold Issues 3 and 4 in favour of plaintiff Muhammad Azim and against the Society and the Bank. I hold that allotment in favour of Muhammad Azim was final and valid and confers rights on Muhammad Azim. I further hold that the allotment is neither a

(1) (1906) 30 Born. 304 (2) (1903) 5 Born. L R 524

(3) (1883) 7 Mad. 302 ' product of fraud nor has any forgery been committed as to disentitle Muhammad Azim.

' Issues Nos. 5 and 6 :-

63. These two issues concern the question of validity of the cancellation of the allotment order in favour of Muhammad Azim, and whether Muhammad Azim is barred or estopped from questioning the action of the Society in cancelling the allotment of the plot. The main argument of Mr. Akhlaq Hussain and Mr. Haji Mutiur Rehman on these issues is that the allotment was cancelled at the request of Muhammad Azim. The letter of cancellation is dated 2-1-1965 and reads as follows :- "This is to refer to the meeting held on 25-5-1964 at 5 p. m. In the Office of the Society with your representative on the above subject and also to the subsequent discussions the undersigned had with you from time to time. In view of the difficulty explained by you in the meeting, the above deal is hereby cancelled as desired."

' This letter is signed by Mr. Aboo Akhtar Hassan, the Secretary of the Society. In his evidence in Court he stated that plaintiff Muhammad Azim had been telling him for the return of the entire amount and the cancellation of allotment. However, in his cross-examination he was confronted with the Minutes of the meeting on 25-5-1964 and he stated that a settlement had been reached with Muhammad Azim at that meeting but he never accepted the settlement although he was asked to do so. At this meeting the Minutes whereof are on the record as Exh. 57/1 (16), it is stated as follows :- "Mr. Azim at the outset insisted that either the entire money which he paid and which had been blocked for more than nine months and was not given any remuneration (return) to him be returned or the cost of the strip which he was required to surrender for car-parking should be refunded. After lengthy discussion, however, he agreed that :-- ' Society should make an attempt with the K. D. A. To get the width of the strip reduced to 20'. If this was not possible he would even agree to surrender a strip of 30' width provided that the Society could make the K. D. A. To agree to accept the plan of the building where the strip would be used as a corridor for car-parking. In other words he should be allowed to construct the first floor . For residential flats etc Further if the plots were sub-divided the Society should not charge any fee of the plots for the first transfer. The Society should also agree to the sub-division of the plots."

' The above was agreed subject to the approval of the K. D. A. Mr. Gauhar was requested to see the Town Planner (K. D. A.) in this connection in order to obtain his approval to the proposal after it was concurred by the Managing Committee.

64. Then on 14-6-1964 vide Exh. 57/1 (22) Muhammad Azim was requested to confirm if he agreed to the decision of the Managing Committee as contemplated in the Minutes dated 25-5-1964, This letter was not Accompanied by a copy of the Minutes of the Managing Committee, but it seems that Muhammad Azim did not make a reply. Instead Muhammad Azim vide Exh. 9/1 (14) wrote to the K. D. A. On 15-9-1964 asking them to advise him on the following question :-- "(a) What kind of building is allowed in that area,

(b) how much area is allowed to be covered and how much open,

(c) how many storeys are allowed to be constructed etc."

' Muhammad Azim in his evidence has clearly stated that he had attended the meeting of the Sub- Committee on 25-5-1964 and at that time he was all alone. He has further stated that the only talk was with regard to the widening of the road on one side of the plot, but no decision had been taken. Muhammad Azim proceeded to say that he continued to press for approval of the plans when he suddenly received the letter dated 24-1965 cancelling his allotment.

' There is nothing in writing from Muhammad Azim to show that he surrendered his rights in respect of this plot nor is there any evidence whatsoever on the record to indicate that Muhammad Azim had any representative for dealing with the Society in this matter.

65. In fact Mr. Aboo Akhtar Hassan in his evidence has again stated that he was directed by the Managing Committee to cancel the plot. There is nothing on the record to show that the allotment in favour of Muhammad Azim had been cancelled persuant to directions of the Managing Committee. However, Aboo Akhtar Hassan in his evidence referred to the Minutes of the Managing Committee in regard to meeting on 25-11-1964, Exh. 57/1 (19) and stated that the Minutes authorised the Chairman to dispose of the plots in general and, therefore, this authority covered the disposal of the plot involved in these suits. Exh. 57/1 (19) does not show any such Minute but perhaps the witness was referring to Exh. 57/1 (17). This exhibit is the record of the Minutes of the meeting of the Managing Committee held on 12-9-1964. By this Minute the Managing Committee authorised the Chairman of the Society to make changes in the allotment list for residential plots.

This resolution also authorised the Chairman to invite applications from the Members of the Society for allotment of commercial and cottage industry plots in 'E' market.

66. First of all this resolution relates to allotment of plots in 'E' market and the present plot is not in 'E' market. It is a separate plot located adjacent to `13' market. Moreover, there is no evidence that any applications were invited before cancellation of the allotment of Muhammad Azim. Further, no notice was given to Muhammad Azim before the cancellation of this plot. In fact This plot was not even available for allotment as the allotment in favour of Muhammad Azim stood valid and intact. I believe that there, is no resolution of the Society cancelling the allotment of Muhammadd Azim and this document is being referred to only to confuse the issues.

67. At this stage I may also refer to the correspondence that passed between the parties after 2-1- 1965. Several notices were given on behalf of Muhammad Azim to the Society. These notices are Exh. 45 dated 5-1-1965, Exh. 46 dated 13-1-1965, Exh. 47dated 21-1-1965, Exh. 49 dated 31-1-1965, and Exh. 50 dated 7-4-1965. For the first time that the Society replied to any of these notices was on 7- 4-1965 vide Exh.

51. In para. 5 of this notice, Mr. Haji Mutiur Rehman, Advocate for the Society wrote to Mr. Dingomal, Advocate for Muhammad Azim, as follows :- "It is maintained that the Society did its best to maintain your client's (Muhammad Azim) allotment and even formed a Sub-Committee to settle the dispute and Sub-Committee also in its formal meeting on 25-5-1964 and subsequently several discussions and negotiations took place but all in vain and in the end the allotment had to be cancelled as desired."

' There is, however, no evidence of any discussion between the Sub-Committee and Muhammad Azim subsequent to 25-5-1964. In fact Mr. Muhammad Azim in his evidence has completely denied it and the evidence of Aboo Akhtar Hassan, the witness for the Society is completely vague on that point. Suffice it to say that he has not been able to even name any person, who according to him, had any discussions in relation to. This plot after 25-5-1964.

68. In that context I may also refer to a document Exh. 57/1 (16) which is the record of the Minutes of the Sub-committee of the Society. This Sub-Committee as stated above was formed to settle the case of this plot. In para 1 of the Minutes, it has been stated that consensus of opinion of the Committee was that it would not be advisable to insist upon cancellation of the sale already made in favour of Muhammad Azim. However, the Minutes do express that the Members of the Sub- Committee appreciated that technically they could get out of sale, but it may create legal complications. I am unable to understand what is meant by technicalities when the Sub- Committee termed the transaction as a sale. This para in the Minutes clearly shows that Muhammad Azim had not asked for cancellation of his allotment. However, the same Minutes do state that Muhammad Azim at the outset insisted on return of the entire money because the bargain had not brought any fruits to him, and in the alternative he even agreed to yield to the Society and the K.D.A. a strip of land from the plot for car-parking. This shows the anxiety of Muhammad Azim to retain the plot rather than relinquish the rights to the plot. At this meeting even alternatives were contemplated to compensate Muhammad Azim for surrender of this strip.

69. There is also evidence on the record to the effect that after the cancellation this matter came up before the Managing Committee of the Society on more than one occasion and each time a hitch was created in the process of discussion of the validity of this cancellation by some Members of the Managing Committee. Exh. 57/1 (23), which is the record of the Minutes of the Managing Committee in regard to the meeting held on 3-4-1965. At item Na. 7 of these Minutes, the following text appears :- "The Chairman made statement giving factual position regarding Nursery plot. Mr. Gauhar, Convenor, standing committee formed for the purpose also made a statement of the facts which had led to the cancellation of the allotment of the Nursery plot, and its allotment to the United Bank Ltd.''

' The above passage does not at all indicate as to what was the nature of discussion at the meeting of its Society not has Mr, Gauhar or the Chairman entered the witness box. I may also refer to Exh. 36 and Exh. 37 which are the Minutes of the meeting of the Managing Committee. In these meetings there was once again an echo in regard to cancellation. The Managing Committee was shown an order from the Registrar, Co-operative Societies, restraining the Managing Committee from taking up or discussing this matter on the ground that the case had become sub judice.

Whether discussion was prohibited on that ground is a different matter, but it seems that there was a lobby in the Managing Committee that did not see eye to eye with the authorities that had cancelled the allotment of Muhammad Azim; and to stifle their voice, it had become necessary to obtain an order from the Registrar restraining any discussion. Whether the Registrar was legally empowered issue such direction to is an open question, but I would not like to enter into that question because it is not necessary for decision of this case.

70. Mr. Akhlaq Hussain, however, referred to the Minutes of the Managing Committee (Exh. 33) concerning the meeting held on 14-1-1964 viz. The date when the Managing Committee had discussed the addition of the letter 's' to the word building. He has argued that since letter `s' had been added to the word building, the allotment order in favour of Mohammad Azim had become a document of no value and, therefore, the Society was within its rights to cancel the allotment. I have already answered that question in an earlier part of this judgment. I would only say that in spite of this alleged discovery of fraud and forgery, the Society went on dealing with Muhammad Azim, and in the correspondence it has been stated that the Society on the contrary tried its utmost to accommodate Mohammad Azim. I, therefore, hold that the Society was not justified in cancelling the allotment in favour of Muhammad Azim. He had not surrendered his rights nor had his rights been destroyed on ground of fraud or forgery as alleged.

' Issue No, 7 :

71. This issue concerns the validity of allotment in favour of United Bank Ltd., and handing over the possession to them. In the discussions on the preceding issues, I have already held that the allotment of Muhammad Azim is valid and subsisting and not liable to cancellation. I have also held that cancellation is invalid. In the result the plot was not available for allotment to the United Bank Ltd. The allotment in favour of United Bank Ltd., is therefore, invalid. Regarding possession of the plot by United Bank, I may state that United Bank was not given physical possession of the plot.

I will, however, consider this question while dealing with Issue No, 1 regarding maintainability of these suits because Muhammad Azim has claimed rights also by virtue of protection of section 53- A, Transfer of Property Act on the principles of part-performance.

' Issue No, 6 :

72. This issue raises the question whether Muhammad Azim is barred or estopped from questioning the action of the P.E.C.H.S. This issue is partly answered in the discussion on Issue No, 5, in so far as the justification for cancellation is concerned. However, it has been argued on behalf of the Society and the Bank that the questions regarding relations between the Society and Muhammad Azim cannot be inquired into these suits. This point can better be considered while discussing the maintainability of these suits. I will, therefore, proceed to determine Issue No, 1.

' Issue No, 1 :

73. This issue concerns the maintainability of these suits. The contention on behalf of the Society and the Bank is that these suits are barred by virtue of provisions of sections 70 and 54 of the Co- operative Societies Act. The next contention is that "further relief" as contemplated by section 42, Specific Relief Act, not having been claimed, suits for mere declaration although accompanied by prayer for injunction are not maintainable. It has further been urged- that under the Bye-Laws of the Society, an appeal is provided to the General Body of the Society in its domestic jurisdiction and, therefore, too, these suits were barred. Lastly it has been urged that the claim for damages and compensation in the Suits filed subsequent to Suits Nos. 45 and 46 of 1966 is barred by the provisions of Order II, rule 2, C.P.C.

74. I will first consider the question of maintainability of these suits in view of the provisions of section 42, Specific Relief Act. Mr. Akhlaq Hussain had raised this point at the time of argument. The arguments continued for several days and when Mr. Percy Dingomal started his arguments on behalf of Muhammad Azim he raised the point that in cases where a suit was likely to be defeated on account of omission of the plaintiff to seek further relief within the meaning of section 42 of the Specific Relief Act, the Court may instead of dismissing the suit allow the plaintiff to amend the plaint. He further argued that amendment could be allowed at any stage and even during the pendency of appeals. He, therefore, made an application under Order VI, rule 17, C.P.C. On 25-10- 1972. I had given notice of this application to the Society and the Bank. Suffice to say that this application was not consented to by the Society and the Bank. I will, therefore, deal with this application also while determining this issue. By a short order I had dismissed this application on conclusion of hearing.

75. The proviso to section 42, Specific Relief Act, reads as follows : ' Provided that no Court shall make any such declaration where the plaintiff being able to seek further relief than a mere declaration of title omits to do so."

' The proviso speaks of "further relief" and not "other relief". Suit No, 45/66 had been filed on 23-1- 1965. The prayer in this suit was for a declaration that the Defendant Society had no right to take forcible possession because plaintiff Muhammad Azim had paid the full price and had obtained vacant possession of the plot. Plaintiff Muhammad Azim had further prayed for a declaration that the defendant Society had no legal right to allot the plot to any third party. Consequential relief was sought in the form of an injunction to restrain the Society from allotting the plot to any third party or interfering with the possession of Muhammad Azim.

76. In the letter of cancellation addressed by the Society to Muhammad Azim, there was no mention about the subsequent allotment of the plot by the Society to the Bank, although the letter of cancellation of allotment was issued on 2-1-1965, the date on which the plot was allotted to the Bank. The United Bank was not impleaded as a defendant in this suit viz. 45/66. It will also be useful to refer to the first notice on behalf of plaintiff Muhammad Azim to the Society. This letter which is Exh. 45 is dated 5-1-1965. On a reading of this letter it appears that the plaintiff Muhammad Azim had no knowledge about the allotment of the plot in favour of the Bank. There is no mention whatsoever about any subsequent allotment or about United Bank Ltd., having been allotted this plot. In fact there is no evidence on the record to indicate that before filing this suit, Plaintiff Muhammad Azim even knew about the allotment in favour of United Bank Ltd.

77. The next suit filed by plaintiff Muhammad Azim is Suit No, 25/66. This suit was filed on 17-1-1966.

In this suit the relief claimed was by way of damages, both for unlawful conspiracy to deprive him from the plot and for tresspass on the plot. In this suit the United Bank along with its General Manager Mr. Agha Hasan Abidi was impleaded as a defendant. The other defendants were the Society along with Mr. Zafrul Ehsan as Chairman and Mr. Aboo Akhtar Hassan as Secretary.

78. The third suit viz. 26/65 was filed by plaintiff Muhammad Azim on 10-1-1966. In this suit the Society and the United Bank were impleaded as defendants. The prayer was for a declaration that he was the lawful purchaser and allottee from the Society and was in possession of all his rights. He further sought a declaration that the allotment order in favour of the United Bank was void and illegal. A permanent injunction was also sought to prevent the defendant from disturbing his possession. In addition there was a claim for damages.

79. On a consideration of the reliefs claimed by plaintiff Muhammad Azim in the three separate suits, it would clearly appear that he made no prayer for specific performance of the original agreement of lease (allotment order) in his favour. For the first time that plaintiff Muhammad Azim made such prayer was in his application under Order VI, rule 17, C. P. C. At the time of arguments or these suits. He had prayed for amendment of para. 28 of the plaint in Suit No 26/66 so as to include the prayer for specific performance of the contract by execution and registration of a Deed of Lease by the Society or Government of Pakistan or by any other party competent to do so.. The prayer was conditional and in para. 3 of the application it was stated as follows :- "Should this Hon'ble Court be pleased to take the view that the suit for a mere declaration in this respect is not maintainable and the proPer relief should be by way of specific performance, the plaintiff submits that the suit should not be dismissed or relief refused, but an opportunity be given to the plaintiff to amend the plaint and seek specific performance."

80. On an appraisal of all the pleadings and even the evidence in these cases, I am of the view that the proviso to section 42 of the Specific Relief Act does not bar Suits 45/66 and 250. It was conceded by Mr. Akhlaq Hussain and Mr. Haji Mutiur Rehman that the agreement, the pro forma of which is annexed to the licence agreement, Exh. 57/1, has not yet been executed. The result, therefore, is that the Society cannot execute any sub- leasein favour of Muhammad Azim because no lease agreement has been executed between the Government and the Society. Mr Haji Mutiur Rehman has stated before me that at the time of allotment, a lease for 99 years was contemplated, but he has also conceded before me that even in the present circumstances no sub-lease can be executed by the Society in favour of respondent Muhammad Azim. That being so, Muhammad Azim could not obtain specific performance.

81. With regard to the other reliefs I may state that the same are maintainable. The facts of the case are that the plaintiff Muhammad Azim was the allottee and he was in possession. 1 will first deal with the question of possession of this plot before deciding the question of maintainability of 'hese suits in the light of the provisions of section 42, Specific Relief Act, and the effect of section 53-A of Transfer of Property Act.

82. In each of the plaints filed by Muhammad Azim he has stated that he obtained possession after payment to the Society. In his evidence in Court he has stated as follows - "On 8-8-1963 I was given possession of the Nursery Plot by P.E.C.H.S. Authority. When I was given the possession I was also given the site plan and demarcation plan of the plot which 1 produce as Exh.

55/9 and 55/10. On 5-10-1963, I was also given demarcation certificate which I produced as Exh.

55/11. After I had got the possession I put wire around the plot. I also engaged the Chowkidar to look after it."

' Muhammad Azim in his evidence further went on to say that on 12-1-1965 a representative of the Society came on the plot and forcibly removed the boundary pillars and the connecting wires, and carried them away in trucks. He further stated that two weeks after the above incident he constructed a Pucca boundary wall around the plot. In a later portion of his evidence he has stated that again on 4-3-1965, two Chowkidars of the United Bank Ltd. Sat at the plot and he, therefore, lodged a report Ferozabad Police Station.

' In cross-examination it was suggested to him that he had forcibly taken possession on 4-3-1965 and such allegation was denied by him. It is admitted position that possession of the plot is now with Muhammad Azim. There is no doubt that Muhammad Azim paid the dues of the Society by 8- 7-1963. It is also conceded case on 5-10-1963 a certificate of demarcation of plot (Exh. 55/11) bearing the signature and seal of the Executive Engineer of the Society was given to Muhammad Azim. This certificate reads as follows :- "Certified that plot No, 1/2, Nursery, Block No, VI measuring 4,519 sq. Yds. Allotted to Mr. Muhammad Azim Share No,----has been demarcated on 8-8-1963 in accordance with the site plan of the plot dated 18-9-1963."

' This certificate shows that an area of 4519 sq. Yds. Consisting of the Nursery Plot had been allotted to Muhammad Azim and had been demarcated on 8-8-196i. A photostat copy of this document viz. The demarcation certificate was filed by plaintiff Muhammad AZiril as an annexure to the plaint in Suit No, 45/66, but the Society did not deny it. The circumstances of the case further do not show any circumstance as might have prevented the Society from giving possession to Muhammad Azim or the latter taking possession. Moreover, Aboo Akhtar Hassan, the Secretary of the Society, who appeared to give evidence in Court has clearly stated that demarcation proceedings and transfer of possession take place simultaneously. The assertion of Muhammad Azim in regard to taking of possession is reinforced by the circumstance that Muhammad Azim submitted plan for sub-division which was forwarded by the Society to K.D.A. Besides, there are numerous documents on the record to show that Muhammad Azim was making frantic efforts to straighten the dispute with the Society and K.D.A. As to enable him to start construction. It is unimaginable that Muhammad Azim would not be in possession in spite of payment of a huge amount. What is more, that in notices Exhs. 46 and 47 given by Muhammad Azim in January, 1965, he had clearly stated that he was in possession and there was no reply till April, 1965.

83. On the other hand the United Bank Ltd claims that possession of the plot had been given to the Bank by the Society on 9-1-1965. Rashid Zubairi (Exh. 62) has appeared as a witness for United Bank. He has state] in his evidence that possession was given on 9-1-1965 and he has further stated that possession certificate and demarcation certificate was delivered to him in the Office of the Society. The reading of the evidence of Rashid Zubairi is very interesting and revealing. He states that a Chowkidar was appointed after two or three days of the Bank obtaining possession of the plot. This date of appointment of Chowkidar would correspond to 12-1-1965. It was on that day that Muhammad Azim lodged the report at Ferozabad Police Station. A copy of the report has been placed on record as Exh. 8/1. This would show as soon as the Chowkidar of the Bank or the society came on the plot Muhammad Azim lodged the report. It further appeared in the evidence of Muhammad Sharif, Chowkidar of the Bank (Exh. 59) that on the day that he went to the plot to raise bamboo hut, Police turned up within two hours and took him to the Police Station where be was.

Confined for four hours before being released. He has further stated that after his release he was not sent to the plot again. This evidence clearly shows that as soon as a Chowkidar of United Bank went to the plot to take possession a report was lodged with the Police and within two hours the Chowkidar was arrested and thereafter no representative of the Bank went to the plot. At this stage I may also refer to Exh. 53 which is a notice on behalf of the United Bank to the Advocate of Muhammad Azim. In this notice it has been stated that Muhammad Azim had filed a false report at Ferozabad Police Station and got the Chowkidar of the Bank arrested and locked up. But what is more interesting is that the notice also states that a responsible officer of the Bank appeared at Ferozabad Police Station and gave an assurance that the Bank would not recover forcible possession from Muhammad Azim. Admittedly the Chowkidar was arrested only once and that was on 12-1-1965, and further the Chowkidar was in the, plot for only about two hours. If Muhammad Azim had not been in possession of the plot he would not have been able to get Police assistance within such a short time. On the other hand if United Bank had been in possession, their Officer would not have given an undertaking to Ferozabad Police to the effect that the Bank would not recover forcible possession.

84. But the most interesting feature on the point of possession is revealed in the written statement filed by the Society in Suit No, 243/66. In that written statement the Society has stated that United Bank did not take possession on account of "Their negligence, inefficiency, conspiracy or collusion with Muhammad Azim. This assertion in the written statement completely establishes that possession of the plot was with Muhammad Azim and United Bank was never in possession of the plot. No doubt United Bank did attempt to take possession on 12-1-190 and again on 4-3-1965 when a second report was filed by Muhammad Azim which is Exh. 8/2 on record. Even in this second report Muhammad Azim shows that he was in possession. Muhammad Azim also filed criminal prosecutions against the Secretary of the Society for trespass but this complaint was dismissed not on the ground that Muhammad Azim was not in possession but because there was paucity of evidence to fix individual liability of the accused.

85. In the light of the above discussion on the point of possession I proceed to determine whether the suit is barred by reason of section 42 of the Specific Relief Act. It must not be forgotten that all the suits filed by Muhammad Azim in so far as the same relate to his title or possession had come to be filed as defences to the proposed dis-possession of Muhammad Azim. Since Muhammad Azim was in possession and had paid entire consideration and was not required to perform any other act in furtherance of the Contract with the Society, concerning this plot ; allotment order is N receivable in evidence by virtue of :section 53-A, Transfer of Property Act. It is needless to reproduce the said- provision of law but the legal position clearly is that the Society is debarred from enforcing any right against Muhammad Azim save such right as may be expressly provided in the allotment order itself. No right is saved to the Society under this document save recovery of ground rent which has not been demanded and, therefore, Muhammad Azim could file the suits to protect his rights and he could use the document as a shield against any wrongful act of the Society. The position in law is very clear and if authorities are needed for the proposition, the same are available and the following cases may be referred to :-

(1) Inayatullah v. Shah Muhammad PLD 1961 Lah.

372.

(2) Anwar Sultana v. P E C H S PLD 1969 Kar.

474.

(3) Razzaq v. Muhammad Shaffi PLD 1963 SC 134.

' These decisions proceed on the principle of equity of part performance which were administered by Courts in lndo-Pakistan sub-continent even before legislative recognition of the same by way of insertion of section 53-A in the Transfer of Property Act. The principle is laid down in the leading case of Maddisson v. Alderson (1).

86. The next contention of Mr. Akhlaq Hussain is that since plaintiff Muhammad Azim had omitted to seek specific performance of the contract of lease, the suits were not maintainable. This contention is misconceived. Cases where a party is in possession have to be distinguished from such cases where a party is out of possession. While in the later the suit will be defeated for the reason of omission to claim specific performance, in the former a suit will not fail on that account.

Mulla in his Book on "Contract and Specific Relief Act" (VIII Edition) at page 866 has stated at follows :- "Under this section a plaintiff who is able to seek further relief than a mere declaration of title is obliged to seek such relief, if he omits to do so, the Court will not make the declaration asked for.

Thus, a plaintiff out of possession sueing for a declara-p tion of a title to land ought to pray for possession, if the defendant is in adverse possession. But he is not obliged to do so if the defendant is not in possession or if he is in lawful possession in any case and the dispute relates only to the character of his possession."

Aggarwala in "Law of Specific Relief in India and Pakistan" (IV Edition) at page 257 has stated the case as follows:- "A prayer for confirmation of possession is a prayer for consequential relief. The suit for declaration of title and for confirmation o ,, possession is not barred by the proviso to section 42 of the Act, ' simply because the plaintiff was not in possession at the date of the suit and instead of seeking recovery of possession he claimed confirmation of possession as consequential relief."

The above passage will show that even a suit for a declaration of title and mere confirmation of possession will not be barred if no further relief is R claimed. In the present case possession is with plaintiff Muhammad Azim.

Moreover, the proviso to section 42 is designed to avoid multiplicity of suits so that a person may not pray for mere declaration when the declaration would be useless and the circumstances would require him to institute suits for other reliefs in order to complete his claim. Applying this test to the facts of this case I find that the object of plaintiff Muhammad Azim in the present state of circumstances would be fulfilled if it is declared that he is the lawful allottee, that cancellation of his allotment is invalid, that allotment of United Bank is invalid, and a further injunction to restrain the Society or the Bank from dispossessing him.

(I) (1883) 8 A C 467 In the case of Mufizur Rehman v. The East Pakistan (1) and in the case of Baisnab Das Mohanta v.

Nani Gopal Das and others (2) the above-said principle was recognized. A true owner is entitled to claim a mere declaration of title without violation of section 42, because the owner has in his favour a presumption that he is in possession.

' Moreover, further relief as mentioned in section 42 has to be a relief flowing directly and necessarily from the declaration sought and it has to be a relief appropriate to, and necessarily consequent on, the right or title sought to be asserted. In this case the admitted position is that lease even in favour of the Society has not been executed and for that reason the Society could not execute a sub-lease in favour of Muhammad Azim. In that case claim for further relief in the form of registration of a sub-lease could not be granted to Muhammad Azim. Such remedy is not available and that being so this suit cannot fail on that ground. In my view Muhammad Azim being in possession can competently bring these suits for a declaration and injunction as a consequential relief of injunction would completely protect his rights in the present circumstances. Moreover, the T cause of action in relation to which further relief bad to be claimed is only an attempt by the Society and the Bank to dispossess Muhammad Azi and cancel the allotment in his favour and under these circumstances an injunction would provide sufficient protection to Muhammad Azim. I, therefore, hold that the suits are not barred under section 42 of the Specific Relief Act.

87. The next contention of Mr. Haji Mutiur Rehman is that the suit is barred by the provisions of sections 54 and 70-A of Co-operative Societies Act of 1925. While section 54 of the Act provides for reference of disputes to the Registrar or his Nominees, section 70-A, which was enacted by West Pakistan Ordinance No, XII of 1966, bars the jurisdiction of the Courts in relation to matters which have to be decided by statutory functionaries under section 54. In fact the two provisions are complementary. Section 70-A of the Act will only oust the jurisdiction of the civil Courts in only such matters as are compulsorily referable under section 54 of the Act.

' Section 54 of the Act reads as follows :- "54. Arbitration.-If any dispute touching the business of a society (other than a dispute regarding disciplinary action taken by the society or its committee against a paid servant of the society) arises-

(a) between members or past members of the society or persons claiming through a member or past member, or

(b) between members or past members or persons so claiming and any past or present officer, agent or servant of the society, or

(c) between the society or its committee, and any past or present member of the society, or

(d) between the society or its committee and any past or present officer, agent or servant of the society, or a surety or such officer, agent or servant, whether such surety is or is not a member of the society, or

(1) PLD 1962 Dacca 635 (2) PLD 1963 Dacca 504

(e) between a financing bank authorised under subsection (1) of section 34 and a person who is not a member of a society, it shall be referred to the Registrar for decision by himself or his nominee, or if either of the parties so desires, to arbitration of three arbitrators who shall be the Registrar or his nominee and two persons of whom one shall be nominated by each of the parties concerned."

' Under this provision two essential conditions have to be fulfilled. The first is with regard to nature of the dispute and the second with regard to parties to the dispute. The nature of the dispute must be such as touches the business of the Society. The parties to the dispute must be either members, or past members or sureties of the members. The point came up for consideration before a Division Bench of the West Pakistan High Court in the'case of Azizuddin Ahmed v. Aziz Ahmed and others (1).

Mr. Justice Waheeduddin (as he then was), now a Judge of the Supreme Court, wrote the Judgment and explained the position as follows :- "Under section 54 of the Bombay Co-operative Societies Act, two essential conditions must be fulfilled before its provisions can be invoked. The first is that it should relate to a dispute which touches the business of the society and the second that such a dispute must be between the society or its members or between the members or past members or those who claim through them. There is another class of cases which can also be referred and they are those which are mentioned in clauses (d) and (e), namely between the society and the surety of a member, whether he be a member or not or between a financing bank and a person who is not a member of this society.

' Where the dispute was between two members of Society, to one of whom certain plots of land were allotted by the Society and the allotments under the rules had merged in a lease for 99 years granted by the Government of Pakistan. The lease deed having been duly signed on behalf of the Government as well as on behalf of the Society. But, the Society in the meantime, had allotted a part of the same land to the other member : ' Held, that as the dispute was not confined to the question of allotment and really affected the lease deed, the Government of Pakistan was a necessary party to the dispute and as such the dispute was not covered by section 54 of Bombay Co-operative Societies Act and so could not be referred by the Registrar to arbitration."

' Mr. Justice Muhammad Bakhsh in the case of Siraj Farooqui v. Pir Ellahi Bux Co-operative Society

(2) also held that section 54 of the Cooperative Societies Act did not apply in a case in which some of the defendants are not members of the Society or claiming through them.

88. In the present case admittedly neither the United Bank nor Muhammad Azim are the members of the Society. Moreover, the 'dispute' envisaged in section 54 must relate to some kind of transaction in which the categories of persons mentioned in the several clauses of section 54 have interest in that capacity. Section 54 is not intended to cover every dispute created by transactions that a Society has. My Lord Mr. Justice Hamoodur Rehman, the present Chief Justice of Pakistan has also

(1) PLD 1959 Kar. 497 (2) PLD 1956 Sind 95 ' considered the question in the case of Government of West Pakistan v. Walt Muhammad Habib (1) and has expressed as follows :- "Reading these provisions in the light of the above principles the enlargement of the scope of the word 'dispute' in the second paragraph by the introduction of the word `non-member' therein in 1947 merely has, in our opinion, the effect of enlarging the nation of the dispute whilst still retaining the condition that such a dispute must nevertheless be between the society and the category of persons enumerated in the foregoing clauses (a) to (e) of the said section. If the intention of the Legislature was, as contended on behalf of the appellants that any and every kind of dispute between a cooperative society and its members or past members or even nonmembers should be referable for decision by the tribunal thereby set-up, then the legislature, when making the amendment to the second paragraph in 1947, could easily have deleted the previous clauses and made that intention clear. We are, therefore, in agreement with the High Court that the enlargement of the definition of a 'dispute' did not also operate to enlarge the category of persons between whom the dispute must exist. In our view, the dispute must still relate to some kind of transaction in which the categories of persons mentioned in clauses (a) to (e) of the said section have interest in that capacity. The accident merely of a person also falling under any one of the said categories is not sufficient to bring a dispute between him and a co-operative society within the ambit of the said section. To hold otherwise would amount to rendering clauses (a) to (e) of section 54 nugatory. It is, furthermore, inconceivable that the Legislature intended that any or every kind of dispute, if it merely touched the business of the society, should be dealt with in the manner provided in the said section, for, then anyone dealing with a Cooperative Society will have to do so at the peril of being deprived of his ordinary remedies under the general law of the land. Such an intention we cannot possibly impute to the Legislature."

89. The dispute in the present case is not referable to the Registrar under section 54 of the Co- operative Societies Act nor is Muhammad Azim or United Bank a Member of the Society. A plain reading of section 70-A of the Act clearly indicates that jurisdiction of the civil Court is barred only in such cases which have to be decided by the statutory functionaries under the Act by virtue of the provisions of the Act or the Rules or Bye-Laws framed thereunder. If the dispute could not be referred under section 54 of the Act to arbitration, section 70-A does not bar the jurisdiction of civil Court. Moreover, the transaction was of a contractual nature entered into by the Society with an outsider. The outsider is beyond the scope of the authority of the Society. The two provisions are interpreted to include disputes arising out of any transaction that a Society may enter into, the results will be fantastic and I should say dangerous. In that case every person dealing with the Society will be exposed to the risk of having no recourse to civil Courts. Any society may in that case flout all contracts and force the opposite parties to seek redress before the Registrar.

Certainly this could not and was not the intention of the Legislature. I am of the view that these suits are not barred under the Co-operative Societies Act.

(1) PLD 1961 SC 2 15

90. The last point raised by Mr. Akhlaq Hussain and Mr. Haji Mutiur Rehman is that Muhammad Azim is subject to domestic jurisdiction of the Society. In fact the point was canvassed very faintly. If Muhammad Azim was not a member of the Society, I fail to understand W how he could be subjected to such supposed domestic jurisdiction. Moreover, no Bye-laws of the Society have been placed before me which may indicate that Muhammad Azim was subject to such extraordinary, jurisdiction of the Society.

' Issues Nos. 8 and 9 :

91. Having decided the above issues I now turn to the remaining two issues regarding compensation, damages and relief. The United Bank and the Society had made a common cause.

They made a joint application for transposition which was allowed. In fact Mr. Akhlaq Hussain did not press for any relief against the Society. He made a clear satement in that context. Moreover, it is clear on the record that United Bank knew about the existence of previous allotment in favour of Muhammad Azim. It is perhaps for this reason that the payment of Rs, 10,00,000 was made by opening an account in the name of the Society in United Bank Ltd. And providing a condition that the account was to be a Current Account bearing no interest and the same was not to be operated till such time that payment to Muhammad Azim was made. In that event the United Bank is not entitled to any relief as against the Society. Since the allotment of the plot in favour of United Bank Ltd. Was invalid, it is not entitled to any relief against Muhammad Azim also. In the result Suit No, 46/1966 and Suit No, 243/1965 filed by United Bank Ltd., are dismissed. No costs shall be paid by United Bank Ltd. To the Society, but Muhammad Azim shall recover costs from the Bank.

92. Suit No, 45/1966 is decreed as prayed.

93. Suit No, 26/1966 is decreed in respect of prayers (i), (ii), (iii) and (vi) as prayed. Prayer in clause

(iv) is in regard to damages. This clause reads as follows :- "That a decree be passed awarding damages to the plaintiff against the defendants Nos. 1 and 2 or such defendants as this Hon'ble Court holds to be liable for Rs, 1,80,000 and further damages from date of suit onwards at the rate of Rs, 15,000 per month."

' Mr. Haji Mutiur Rehman relying on the provisions of Order II, rule 2, C. P. C. Has stated that this claim for damages is barred. He did not place any case-law before me, but 1 have considered this point and in my view the objection is misconceived. First of all United Bank Ltd was not a party in the earlier suit. The allotment in favour of the plaintiff was for the benefit of the United Bank Ltd., but in the letter of cancellation delivered to Muhammad Azim this fact was not disclosed. Moreover, the first suit is for a declaration that Muhammad Azim is an allottee of the plot and the claim for damages is not in respect of the same cause of action. By the allotment, Muhammad Azim was entitled to obtain a lease agreement in his favour and also a right to construct. This right of construction is independent and is contingent upon building plans being! Approved and passed.

The bar under Order II, rule 2 being in the nature of an Exception to the right of a party has to be strictly construed, and has no to be lightly inferred. In the case Rafia Begum v. Mirajuddin (1), the fact

(1) PLD 1959 Lah. 890 were that the mortgage deed stated that the mortgage amount was to carry interest at the rate of 10 per cent and in case of default the amount was to be charged on the mortgaged property. An agreement of lease was also entered into by the parties which provided for payment of rent to mortgage property. It was held that although the mortgage and agreement of lease form one transaction, but the same gave rise to two distinct obligations in favour of the mortgagee, namely, to realize interest and to recover mortgage amount. On that premises the suit was held to be not barred under Order H, rule 2, C. P. C.

In some earlier cases from the Bombay High Court viz. Ramchandra v. Lodha Gouri (1) and Rama Kallappa Pujari v. Saidabba Sidrama (2) claim for future mesne profits was not included in a suit for possession and subsequently a separate suit for mesne profits was brought and it was held that Order II, rule 2, C. P. C. Does not bar the suits. However, a contrary view was taken in the case of Gordhan Lalji v. Bishamber Nath (3) and Channappa v. Bagalkot Bank (4). Of the two views, I am of the opinion that in cases involving contingent and accruing damages, the earlier decisions of Bombay High Court are preferable. These cases relate to relief for mesne profits but principles can be imported in this case with advantage. Moreover, before the filing of the suit, Muhammad Azim had not been asked to surrender possession.

Coming to the quantum of damages Muhammad Azim has stated as follows :- "I had obtained the disputed plot with the object of constructing thereon a number of multi-storey buildings and letting them out on commercial basis."

Construction of buildings had to follow the approval of plans. The Government of Pakistan had asked Muhammad Azim to submit the building plans and the Society and Town Planner of the K. D.

A. Had also been persuading him to make construction but according to their wishes. In any case Muhammad Azim has suffered damage because a sum of Rs, 9,08,319 was paid by him and the Society has retained that amount. Muhammad Azim, at the minimum, is entitled to damages at the rate of six per cent per annum on this amount. He shall recover damages at this rate from 10-1- 1966, the date of filing of this suit up to the date of decree. He shall, however, recover the amount only from the Society and not from the United Bank Ltd., because his allotment had been wrongfully cancelled by the Society. Decree shall be prepared only after proper Court Fee is paid.

94. Suit No, 25 of 1966 is dismissed with no order as to costs against defendants Nos. 1 and 4.

However the defendants Nos. 2, 3 and 5 shall recover costs from the plaintiff.

(1) AIR 1924 Born. 368 (2) AIR 1935 Born. 306

(3) AIR. 1927 All. 716 (4) AIR 1942 Born. 338