' NASIR ASLAM ZAHID, J.--This judgment will dispose of Constitutional Petitions Nos.153/91 and 246/91.
2. Petitioners in C.P. No,153/91 are the owners of a factory constructed on Plot No,C/20, Estate Avenue, Sindh Industrial Trading Estate, Karachi, which plot is held by them on a 99 years' lease from respondent No,1 S.I.T.E. Limited, hereinafter called "SITE" which lease was executed in 1959.
According to the petitioner, on the western side of the petitioner's plot, a 60 feet wide "Nallah" existed since the time the lease was executed, and the approved plan of the petitioner's plot as well as the maps/plans of SITE, duly approved by various authorities, show the existence of the said 60 feet wide Nallah. From 1980 to 1988, the petitioner made several applications to SITE for allotment of the 60 feet wide Nallah adjacent to the western side of the petitioner's factory but SITE rejected their request on the ground that it would create hindrance to the free flow of storm water as well as drainage water of the adjoining factories.
' In its letter dated 23-11-1980, addressed to the petitioner, SITE stated as follows:-- "We regret to inform you that your request for allotment of Nallah land was considered and rejected, as it will create hindrance to the free flow of storm water as well as drainage water of the adjoining factories."
' In their letter dated 3-6-1984, addressed to the petitioner rejecting petitioner's request for allotment of the Nallah land, it was stated by the SITE as follows:- "With reference to your above letter, we would like to impress upon you that SITE does not allot Nallah and thus your request for allotment of Nallah land merits no consideration. Moreover allowing-any further construction naturally would create hindrance to the flow of storm water as well as drainage water of the adjoining factories."
(Underlining is ours)
' In the letter dated 30-8-1988 of SITE addressed to the Secretary SITE Association of Industry, it was stated as follows:-- "With reference to your above letter, it is to inform you that no land adjacent to Nallah is available, as such the request of MA, Maniar ' Industries (Private) Ltd., allottee of plot No,C/20, SITE Area, Karachi cannot be entertained."
' Copy of the letter dated 30-8-1988 was endorsed to the petitioner.
3. In spite of the clear, unequivocal and consistent stand taken by SITE from 1980 to 1988 that the Nallah or the Nallah land adjoining the petitioner's land could not be allotted as SITE does not allot Nallah land to anyone and that the allotment of such land would create hindrance to the flow of storm water as well as drainage water of the adjoining factories, SITE agreed to lease out the same Nallah land to respondent No,2, Khawaja Rehan Mansoor, the sole proprietor of M/s. Umer-e- Khayam Fashion, in 1990 and this was done without any notice or intimation to the petitioner.
According to the petitioner, they and other adjoining lessees in November, 1990, found respondent No,2 preparing for construction over the said Nallah, on which they made a representation to SITE on 19-11-1990 stating that the Nallah in question, which was originally 60 feet wide, was filled with earth and only a few feet passwa y was left for water flowing. It was also stated that this nrrow passwa y was inadequate to contain the flow of water that used to pass through the 60 feet wide Nallah and that water had started approaching the boundary walls of some of the adjoining factories. It was also pointed out that such illegal construction by respondent No,2 over the Nallah would play havoc during the rainy season which would not only affect the boundary walls but the buildings and plants of the factories situated on both sides of the Nallah would also be endangered. According to the petitioner, there was no response from SITE on the said representation but, on enquiry from the office of SITE, it was found that respondent No,2 had been allotted portion of the Nallah next to the western boundary wall of the petitioner's plot after reducing the width of the Nallah from 60 feet to 8 feet and the allotted portion was marked as Plot No,C/79. The allotment of the said Nallah land to respondent No,2 has been challenged in Constitution Petition No,D-153/1991.
4. Mr. SA. Samad Khan for SITE has only taken up two legal pleas challenging the maintainability of the present Constitution petition. The first preliminary objection raised by the learned counsel for SITE is that SITE is a company registered under the Companies Act 1913 (now Companies Ordinance, 1984), and it has its own Memorandum and Articles of Association, according to which, it performs all its functions and it does not perform any functions in connection with the affairs of the Province or Federation and as such it is not ameable to jurisdiction under Article 199 of the Constitution. The second objection was that under the lease executed in favour of the petitioners, they have no right to any land outside the plot leased to them and as such they cannot challenge the allotment of the Nallah land to the respondent No,2.
5. We find no.Marit in either of the contentions raised by Mr. SA. Samad Khan. On the first preliminaty objection, there is already a decision of this Court in the case of Sindh Industrial Trading Estate Ltd., Karachi v. Central Board of Revenue (PLD 1975 Karachi 128), in which judgment it has been held that SITE is nothing more than a department of the Provincial Government though clothed with juristic personality and it performs essential provincial functions entrusted to the Province with regard to the development of trade and industries. The judgment in this case was challenged by the Central Board of Revenue before the Supreme Court and the Supreme Court's judgment is available in Central Board of Revenue v. SITE (PLD 1985 SC 97).
Mr. S.A. Samad Khan, learned counsel for SITE, made a feeble attempt to contend that the ratio laid down in PLD 1975 Karachi 128 was being interpreted wrongly as in that case the High Court did not hold that SITE was a department of the Provincial Government of Sindh. The additional argument was that the judgment of the Sindh High Court in PLD 1975 Karachi 128 stood merged in the appellate judgment of the Supreme Court (PLD 1985 SC 97) which never decided that the petitioner was a department of the Provincial Government of Sindh. Precisely the same contentions had been raised by Mr. SA. Samad Khan himself as the advocate for SITE recently in C.P. No, 1770/1991 (SITE v.
Provincial Ombudsman and others) but, by order dated 19-2-1992, a Division Bench of this Court, headed by the Hon'ble Chief Justice, rejected the said contentions affirming the earlier decision of this Court reported in PLD 1975 Karachi 128. It was observed as follows:- 'After carefully going through the above observations of the Supreme Court we are of the view that neither the ratio laid down in PLD 1975 Karachi 128 has been overruled nor modified by the judgment of the Supreme Court (PLD 1985 SC 97). As the petitioner is functioning as a department of the Provincial Government of Sindh, the notice issued to it by the Provincial Ombudsman cannot be held to be without lawful authority."
' The other argument raised by Mr. SA. Samad Khan was that if SITE was a part of the Provincial Government, then the. High Court could not decide the case reported in PLD 1975 Karachi 128 in view of the provisions of Article 184(1) of the Constitution. This submission had also been raised by Mr. SA. Samad Khan in C.P. No,1770/1991 filed by SITE, but the same was also rejected as f allows by this Court in its decision dated 19-12-1991 dismissing the aforesaid petition filed by SITE:--- "Mr. SA. Samad Khan lastly contended before us that if the petitioner was a part of the Provincial Government then High Court of Sindh could not decide the case reported in PLD 1975 Karachi 128 in view of the provisions of Article 184 of the Constitution. The contention is misconceived. The decision in the case of SITE, Karachi v. Central Board of Revenue having been confirmed by the Supreme Court cannot be challenged now."
' Following our previous decision reported in PLD 1975 Karachi 128 and the decision dated 19-2-1992 dismissing C.P.No, 1170/91 (SITE v. Provincial Ombudsman And others) and the decision of the Supreme Court reported in PLD 1985 SC 97, the aforesaid preliminary objections raised by Mr. S.A.
Samad Khan are overruled.
6. The other contention raised by Mr. Samad Khan was that in view of the terms of the 99 years' lease deed in favour of the petitioner they could not claim any extra land. The contention is misconceived as the petitioners are not claiming the allotment of the Nallah land but are challenging the allotment of Nallah land to respondent No,2. In our view, in the circumstances of the present case, the petitioners can challenge the allotment of said Nallah land to respondent No,2 in the present Constitution Petition filed under Article 199 of the Constitution.
7. Respondent No,2 in his counter-affidavit has contested this Constitution Petition submitting that SITE has allotted the Nallah land to him according to normal procedure and rules of SITE. It was informed that allotment order dated 19-3-1990 has been issued and licence agreement dated 5- 4-1990 executed by SITE in favour of respondent No,2 in respect of the said Nallah land for which a major portion of the total consideration has been paid by the petitioner (?) to SITE whereafter he has started necessary development work on the allotted plot and in the process he has incurred huge expenses to the tune of Rs,15,00,000 so far. Respondent No,2 also relied upon clause 5 (3) of the Lease Deed, executed in favour of the petitioner which reads as follows:-- "(3) The lessor shall always have the right and be entitled without obtaining any consent from or making any compensation to the tenant to deal as the lessor may think fit with any of the lands adjoining opposite or near to the demised land and to erect or permit to be erected on such lands any buildings whatsoever notwithstanding that such buildings may affect or diminish light or air which may now or at any time during the term be enjoyed by the demised land or any part there of."
8. Mr. K.B. Bhutto, learned counsel for respondent No,2, vehemently argued that respondent No,2 was a bona fide allottee of the Nallah land on which he has raised certain construction spending Rs,15,00,000 so far on such development and construction and, in case the allotment is cancelled, irreparable loss will be caused to, respondent No,2. Relying upon clause 5 (3) of the Lease Deed of the petitioner, it was submitted that the petitioner could not challenge the allotment of the Nallah land to respondent No,2. It was also contended that the petition is not maintainable as, under its Constitutional jurisdiction, this Court will not enforce contractual obligations.
9. Mr. Syed Sarfraz Ahmad, learned Additional Advocate-General, appearing on Court notice, submitted that the Constitutional petition filed by the petitioners is maintainable against SITE in view of the decision of this Court reported in PLD 1975 Karachi 128 and the decision of the Supreme Court reported in PLD 1985 SC 97 but, on merits, it was submitted that the petition be decided on the basis of arguments advanced on behalf of the parties.
10. As observed, SITE has been considered to be a department of the Provincial Government and a "person" performing functions of the Provincial Government in the field of development of trade and industries and as such amenable to the jurisdiction of this Court under Article 199 of the Constitution. The executive decision taken by SITE, as in case of any other Government department or functionary, are subject to correction by this Court under Article 199 of the Constitution if High Court finds that such executive actions, which affect private rights, are arbitrary or unreasonable.
The executive discretion, where private rights are affected by the exercise of such discretionary executive powers, are not uncontrolled. It is now a well-settled principle of our Constitutional law evolved through Constitutional interpretation by decisions of Supreme Court and also the High Courts that such executive discretion must be exercised justly, fairly and reasonably and not in an arbitrary or unreasonable fashion and that such actions are subject to judicial review by the Superior Courts under their Constitutional jurisdiction. Reference may be made to some of these decisions which are as follows:-
(i) Manthar Ali Jatoi v. Government of Sindh 1988 PLC (C.S.) 334).
(ii) Syed Jaffer Hussain v. Additional Rehabilitation Commissioner 1985 SCMR 1076.
(iii) Federation of Pakistan v. M/s. Charsadda Sugar Mills Limited 1985 SCMR 428.
(iv) Makramullah v. Province of East Pakistan PLD 1969 Dacca 417.
(v) Montgomery Flour and General Mills Ltd. v. Director, Food Purchase, West Pakistan PLD 1957 Lah.
914.
Reference may also be made in this context to the following two Indian decisions of the Supreme Court of India in this regard:--
(a) Ramana Daryaram Shethi v. Int. Airport Authority of India AIR 1979 SC 1628.
(b) Harminder Singh Arora v. Union of India (1986) 3 Supreme Court Cases 247.
11. In the present case, from 1980 to 1988, whenever the petitioner c approached SITE for the grant of Nallah land, the consistent stand taken by SITE, a "person" performing functions in connection with the development of trade and industries in the Province of Sindh, was that SITE does not allot Nallahs and that, in any case, the allotment of the Nallah in question would affect the flow of stormwater and also of drainage water of the adjoining factories. In view of this consistent and unequivocal stand taken by the SITE for nearly a decade, the action of SITE in acceding to the request of a third party, namely, respondent No,2 for the allotment of the same Nallah without reference to the petitioner and owners of other adjoining factories and plots and without any explanation as to factors which persuaded SITE to change its earlier stand was an arbitrary and unreasonable exercise of power by SITE. We may not be understood to have held that, as SITE had for 8 years or more taken the stand that the Nallah could not be allotted, it could never be allotted in future to any one. What we mean to observe is that in case a consistent position, and apparently a reasonable one, has been taken by SITE, a Government agency, that the Nallah cannot be allotted to any one, there should be adequate reasons available on record to establish that the position had changed and now the Nallah land can be allotted without affecting the flow of storm water and drainage water and without endangering the adjoining factories, and while taking such a decision, the parties likely to be affected by such new decision given an opportunity to place their view-point before SITE. This is so as, for 8 years or more, the consistent stand on behalf of the SITE itself was that Nallah land is not allotted to anyone and that in any case the allotment of Nallah land in question would affect the flow of storm and drainage water endangering the adjoining factories and such a stand cannot be allowed to be changed in the abrupt and arbitrary manner as has been done.
12. The preliminary objection raised by Mr. K.B. Bhutto has no substance. No contractual rights are being enforced. Petitioner has challenged the arbitrary and unreasonable decision of SITE to allot a part of Nallah in a manner not warranted by law.
13. In our view, in the circumstances, the ex parte decision to allot the Nallah without there being any rational basis available on record to change the D stand taken earlier by SITE and without hearing the parties likely to be affected, including the petitioner, being arbitrary and unreasonable, is without lawful authority and of no legal effect.
14. As regards the stand taken by Mr. K.B. Bhutto on behalf of respondent No,2 that huge investment to the tune of Rs,15,00,000 has been made by respondent No,2 towards development and initial construction on the Nallah land allotted to him and that the respondent No,2 is a bona fide allottee, it may be stated that this position would not justify or legalise the action of SITE in making the allotment in favour of respondent No,2, Respondent No,2 can claim damages against the SITE Limited for which they can file a suit against the SITE, which suit of course will be decided on its own merit.
15. As a result, Constitutional Petition No, D-153/1991 is allowed and the prayers (a), (b) and (c), made in this petition and reproduced here are granted:-- "(a) declare that the action/orders of the respondent No,1 reducing the width of 60 fact wide Nallah existing according to the approved plan of the Respondent No,2, to only 8 feet and allotting the said 52 feet width of the Nallah to respondent No,2 as Plot No,C/79, S.I.T.E., Karachi; is illegal and without lawful authority;
(b) direct and restrain the respondents Nos.1 and 2 from giving effect to the said orders and raising any construction over the said land themselves or through any other agency by any process and in any manner whatsoever;
(c) direct and order the respondents to restore the Nallah in the same position as it exists in the approved plan, i,e. 60 feet wide."
The petitioner in Constitutional Petition No,153/91 shall be entitled to costs as against SITE.
16. The other petition, namely, Constitution Petition No,D-246/1991 has been filed by Zulfigar All Malik represented by Mr. J.H. Rahimtoola, Advocate. In this petition, respondent No,1 is Province of Sindh represented by Mr. Syed Sarfraz Ahmad, Additional Advocate-General. Respondent No,2 is S.I.T.E.
Limited represented by Mr. S.A. Samad Khan, Advocate. Respondent No,3 is M/s. Umer Khayam Fashion (Proprietor Khawaja Mansoor) represented by Mr. K.M. Bhutto and respondent No,4 is represented by Mr. Muhammad Yaseen Kiyani, Advocate.
17. The case of the petitioner is similar to that of petitioner in Constitution Petition No,D-153/1991.
According to the petitioner Zulfigar Ali Malik, the Nallah land next to petitioner's Plot No, C/18-A, on which petitioner's Mills are located, has been allotted or encroached upon by respondent No,3 Khawaja Mansoor.
' A clear stand has been taken on behalf of SITE by Mr. S.A. Samad Khan, Advocate, that SITE has not allotted any portion of the Nallah next to the plot of the petitioner Zulfiqar All Malik to any one. Mr. K.B. Bhutto has also taken up a very clear stand on behalf of Khawaja Mansoor that no portion of the Nallah adjacent to the plot of the petitioner Zulfiqar All Malik has been allotted to him by SITE nor he has encroached upon any such portion of the Nallah.
' The aforesaid clear stands taken on behalf of the SITE and Khawaja Mansoor, Proprietor of Umer Khayam Fashion, are taken on record and, in the circumstances, Constitution Petition No,D- 246/1991 has become infructuous and stands disposed of as such with no order as to costs.