This petition under Article 199 of the Constitution of Islamic Republic of Pakistan questions the validity of the orders dated 29-7-1993 passed by the Secretary, Co-operative Department, Lahore, and 31-10-1992 passed by the Registrar, Co-operative Societies, Punjab, Lahore, upholding the order dated 16-1-1990 of the Lahore Cantt. Co-operative Housing Society.
2. The relevant facts are that Lahore Cantonment Co-operative Housing Society (LCCHS) entered into an agreement with Dr. Nusrat Ullah Chaudhry and Dr. Abdul Ahad, petitioners, for the construction of a Clinic/Hospital in the name and style of Messrs Nusrat Hospital in Lahore Cantt.
Co-operative Housing Society. Under the terms of the agreement, land measuring 12 Kanals, 4 Marlas and 203 sq. Ft. At the rate of Rs.25,000 per Kanal was to be made available by the LCCHS and the petitioners were to construct the clinic/hospital together with ancillary buildings and facilities in accordance with the plan duly approved by LCCHS and the Cantonment Board, and to complete the construction and make the hospital functional within three years of the date of signing the agreement. LCCHS was to nominate one person to be the member of the governing body constituted by the petitioners to run the administration and management of the clinic/hospital. In pursuance of the above agreement, land measuring 12 Kanals, 4 Marlas and 203 Sq. Ft. Was sold through a registered sale-deed in favour of Dr. Nusrat Ullah Chaudhry, MRCP, and Dr. Abdul Ahad, petitioners, by the LCCHS on 20-1-1986 on payment of the entire cost by them on the following terms and conditions:-- "3.--(a) The member shall at his own cost and within a period of three years from the date of opening the block for construction/or as permitted by the society, complete/finish the construction upon the said plot commercial shop and/or such other construction in accordance with the plans and designs approved by the Society and Cantt. Board. The member shall proceed strictly in accordance with the construction Bye-Laws of the Society as amended from time to time. The member will also not violate the Cantt. Broad's construction Bye-Laws.
(b)In case the construction is not undertaken within a period of 12 months from the date of its approval or as provided in the Bye---Laws/Construction Bye-Laws the member will be required to re--submit the drawings and the one previously approved will be deemed to have been cancelled.
(c)The member is required to complete the construction within 12 months of the approval of the drawings failing which the extension may be granted at the discretion of the Lahore Cantonment Co--operative Housing Society Ltd. As per provisions of its Bye-Laws, decisions or Resolution in this behalf.
(d)In the event of failure to comply with any of the conditions/be-laws, the Managing Committee may impose fine, cancel membership, cancel the allotment of the plot or disconnect one or all services. Such punitive action may include any or all penalties."
According to the petitioners, immediately after the execution of the sale-deed, they submitted a building plan along with the necessary drawings to the LCCHS but the LCCHS did not sanction it for mala fide reasons and impeded the process of construction on one pretext or the other. The petitioners continued to make written representations but without any result and this situation continued for about three years and the approved building plan was ultimately provided to the petitioners on 26-12-1988. Although the construction of hospital/clinic could not be completed within the stipulated period on account of lethargic and unreasonable attitude of LCCHS, they shifted the fault to the petitioners. LCCHS did not stop there and about a year after i.e. In August 1989 dug out further inadequacies even in the approved building plan and demanded certain modifications. Petitioners claim that they even; complied with the said requirements and got a new plan drawn-up but they refused to accept the same also ultimately on 16-1-1990, the Managing Committee of LCCHS, respondent No. 3, resolved to cancel the allotment of the plot in dispute.
3. The petitioners maintain that in anticipation of the approval of the building plan, they started construction from 17-12-1988 but LCCHS disconnected the water-supply. They made formal request to LCCHS for extension of the period but without; any result. They did not even reply to the application submitted by the petitioners to find an. Excuse for the cancellation of the sale in their favour. Ultimately, the Managing Committee of respondent No. 3 in its meeting dated 16-1-1993 without affording an opportunity of being heard to the petitioners, illegally cancelled the allotment of the plot in question. Even, the copy of the minutes of the meeting was not made available to the petitioners and it was only after they appeared before the Registrar on the basis of the reference made by the LCCHS that they came to know about the cancellation order.
4. After the cancellation of the sale-deed, LOCHS made a reference to the Registrar, Co-operative Societies, Punjab, Lahore, for setting aside the sale deed after arbitration between the parties. The Registrar, Co-operative Societies upheld the cancellation of the allotment made by the Managing Committee vide his order dated 31-10-1992.
5. Feeling aggrieved, the petitioners filed a revision petition under section 64-A of the Co-operative Societies Act, 1925, before the Secretary, Co-operative Societies, Government of Punjab, Lahore, which was rejected on 29-7-1993, mainly on the ground that they had failed to avail of the opportunity provided on June, 1993, for reconciliation regarding realistic price of land in dispute.
Hence this constitutional petition.
6. It is contended that the cancellation of the sale of land had been made for mala fide reasons e.g. To increase the price of the land and further that the petitioners were not provided any reasonable opportunity of being heard before passage of the impugned order of cancellation of the sale-deed and that discriminatory treatment had been meted out to the petitioners. The cancellation of the sale of land in favour of Aftab Hospital on the same ground was later set aside by LOCHS and they were allowed to proceed with the construction.
7. The LOCHS, respondent No. 3, has contested the petition. It is, inter cilia, contended on their behalf that the petitioners are estopped by their conduct to bring the constitutional petition as they had been duly served with the relevant show-cause notices and reasonable opportunities of being heard were provided to them before cancellation of the plot in question. Time was essence of the contract and as the petitioners had failed to complete the construction within the stipulated period, they cannot seek the exercise of judicial discretion in their favour. According to respondent No. 3, since after the allotment of the plot, the petitioners had become members of the LOCHS, the dispute, if any, between a member of the Co-operative Society was to be referred to the Registrar, Co-operative Societies as provided by section 54 of the Co-operative Societies Act, 1925.
On merits, it is stated that the sale-deed was duly cancelled as they had failed to raise construction within the stipulated time. The building plan was rightly turned down as it did not meet the requirements settled between the. Parties. The grant of extension of a period of one year to the petitioners to complete the construction is admitted by respondent No. 3 but, according to them, the petitioners failed to complete the construction even within the extended period. The petitioners could have opted for arbitration through Corps Commander before filing the reference before respondent No. 3 but they did not avail of the said opportunity, it is added. According to respondent No. 3, petitioners wanted to grab precious land on a charitable price without any serious intention to raise a hospital for the residents of the area. According to them, it was the responsibility of the petitioners to submit an appropriate site-plan, accurate and comprehensive in all respects and by merely submitting a deficient site-plan they could neither justify their lapse nor avail of further time.
8. The basic facts regarding the allotment of land, the terms of grant and obligations of the parties are not disputed. The parties are, however, at variance regarding the performance of their respective . Obligations. The petitioners have not denied their liability for the construction of the hospital within time-frame provided in the sale-deed. What have they stated is that they effectively performed their part of the contract by submitting a building plan to LOCHS without any delay but instead of expediting its approval, respondent No. 3, in the first instance, raised unnecessary objections and when the same were removed it kept sitting on the matter. The approval of the site-plan, for the first time, was conveyed to the petitioners on 26-12-1988 when the stipulated period of three years for making the project functional had already run out. Even this approval was not adhered to by respondent No3. Subsequent to this approval, pandora of objections was. Opened once again and the petitioners were asked to cause further modifications.
This, in fact, gate a new turn to the proposition. No effective steps for the commencement of the construction could be undertaken by the petitioners before the fugal approval of the modified site- plan. Even if for the arguments sake, it is conceded that the petitioners wanted to waive their responsibilities by submitting a deficient site-plan it would be difficult for respondent No. 3 to wriggle out of the situation because this aspect of the matter came to an end when the approval of the plan was conveyed to the petitioners. And if subsequent to the approval of the site-plan LOCHS asked the petitioners to further modify the plan, from then onward the responsibility for lapse of time lay on .It and none else. It is admitted by the LOCHS that the extension of one year had been granted in the construction period. When during the currency of such extended period, the LOCHS opted to desire more changes in the site-plan, how can they justify penal action against the petitioners without first finalising that plan.
9. There is still another aspect of the matter. The record shows that at the relevant time i.e. At the time of allotment of the disputed plot and even by the end of three years period specified for construction of the hospital, the LOCHS had not framed be-laws for the construction of clinics and hospitals. This position is confirmed by the fact that on 26-6-1986, the Maintenance Engineer, a functionary of LOCHS intimated the Secretary that necessary be --laws for the construction of clinics/hospitals had not been framed. The petitioners were not only given an impression but actually informed by the Maintenance Engineer through letter dated 8-7-1986 that the plan submitted by them shall be processed for approval after the framing of be-laws.
10. It is, thus, crystal clear that at least by the-end of 1988 no be-laws regarding the construction of hospitals/clinics were in existence. In the absence of such be-laws, especially in the light of the letters dated 26 t-1986 and 8-7-1986 of the Maintenance Engineer; there could be no question of the sanction of the site-plan submitted by the petitioners. From this circumstance, it can reasonably be inferred that time was not the essence of the contract. The contention of the petitioners that the construction could not be completed due to the failure of LCCHS to grant approval of the site-plan is thus fully borne out from the record. In these circumstances, the respondent was not legally competent to cancel the allotment nor could it justifiably make the impugned reference to the Registrar, Co-operative Societies. The reference was, thus, misconceived from the very out set and could not, in any way, encroach upon the rights of the petitioners.
11. Apart altogether from the above controversy, it is an established principle of law that no man shall be condemned unheard. It has been repeatedly held by the Superior Courts that the rule of natural justice embodied in .The maxim "audi alteram partem" is not confined to proceedings before Courts but extends to all proceedings by whomsoever held, which may affect the person or property or other rights of the parties concerned in a dispute. See Chief Commissioner, Karachi and another v. Mrs. Dina Sohrab Katrak PLD 1959 SC (Pak.)
45. The effect of non-issuance of show-cause notice prior to cancellation of leasehold rights of the petitioners on the ground of non-raising the construction within the stipulated period was considered in Malik Meraj Khalid v. Islamic Republic of Pakistan PLD 1988 Lahore 325, and the cancellation order was declared as vide ab initio, being violative of the maxim, "audi alteram partem". Mrs. Abida Begum v. Government of Pakistan 1985 CLC 2859 may also be cited wherein an order passed in violation of the principles of natural justice was declared to have been passed without lawful authority and of no legal effect and was consequently set aside.
It is sufficiently evident from the circumstances of the instant case that prior to the cancellation of the allotment no notice was issued to the petitioners.
12. The respondent has vehemently relied upon a letter dated 1-7-1989 asking the petitioners to appear before the Welfare Sub-Committee on 9-7-1989 and to discuss the case of construction of the hospital. According to respondent No. 3, the petitioners failed to attend the office and were reminded through letter dated 10-7-1989 that in case the construction is not completed as per schedule the Management Committee shall be constrained to cancel the allotment of the plot.
From here, the respondent has, inferred that it was a show-cause notice providing opportunity of hearing to the petitioners.
This interpretation of the respondent is wholly misconceived. Firstly, the letter dated 1-7-1989 cannot, in any sense, be construed to constitute a show-cause notice for cancellation of allotment.
It was simply an invitation for consultation or discussion of the construction of the building and did not embody a warning or possibility of cancellation of the allotment. So, the petitioners were not supposed to defend their allotment in reply to this letter. Secondly, according to the petitioners, they received this letter on 8-7-1989 and as it was not possible for them to prepare their case and replies by the next day, they had requested the respondent No. 3 to provide reasonable time for the proposed meeting. The record does not show that the letter dated 1-7-1989 was received by the petitioners well in advance of the proposed date of the meeting. In the absence of any such evidence there is no option but to accept the version of the petitioners that the letter was received by them only on the day preceding the date fixed for the purpose. The letter dated 10-7-1989 also is not a sufficient notice because this in essence, conveyed the decision instead of seeking any explanation from the petitioners.
In these circumstances, I have no hesitation in holding that the allotment of the plot in question was cancelled totally at the back of the petitioners without affording them an opportunity of being heard. It was, therefore, violative of the maxim audi alteram partem, and, consequently void ab initio.
The very decision of the respondent No 3. Dated 16-1-1990 for cancellation of the allotment being unlawful, the impugned reference and the order passed thereon by respondent No.3 becomes devoid of legal significance. That being so, the order of respondent No. 1 is also not sustainable. It is pertinent to note that the fate of the whole case hinges upon the determination of the , responsibility for delay in construction of the Hospital but the E respondents Nos. 1 and 2 both failed to give any fording on this issue. As they failed to exercise the jurisdiction vesting in them, in this behalf, the impugned orders are liable to be struck down.
13. In consequence, the writ petition is accepted and the orders dated 29-7-1993 and 31-10-1992 respectively passed by respondents Nos. 1 and 2 are declared to be illegal, without lawful authority and of no legal effect. And the cancellation of allotment of the plot in question from the petitioners name on 16-1-1990 by the Managing Committee of the Lahore Cantt. Co--operative Housing Society Limited, Lahore Cantt., is set aside with a direction to them to process the building plan submitted by the petitioners is the light of the be-laws prepared for the construction of clinics/hospitals and to pass necessary orders in this behalf and convey the same to them so that they may proceed with the construction. Building period would commence the date of communication of the orders by the LCCHS to the petitioners regarding the sanction of the building-plan.
Parties are left to bear their own costs.