JUDGMENT RANA BHAGWAN DAS, J. - Plaintiffs have brought this suit for declaration and permanent injunction asking for a declaration that the demand for payment of revised premium of Rs.
7,00,000/- per acre from them by the defendants vide their letters dated 10-11-1991 and 14-12-1991 is illegal, Unjust, arbitrary and that the defendants have no right to cancel the allotment in respect of plot No. D-16 SITE North Karachi and a permanent injunction restraining them from cancelling the allotment .Of the plot in their favour.
2. On or about 28-6-1982 plaintiffs applied to the Industries and Mineral Development Department, Government of Sindh for allotment of land measuring one acre for setting up factory for packing milk products. Provincial Government accordingly issued "No Objection Certificate" dated 11-2-1984 for allotment of land asked for in SITE Karachi. By letter dated 15-6-1985, defendants allotted the plot in suit to the plaintiffs for the purpose aforesaid at a premium of Rs. 2.75,000/- per acre and ground rent of Rs. 2500/- per acre per annum. It is the case of the plaintiffs that after the allotment of land they as well as other allottees could not obtain possession of the land due to non- availability of amenities and infrastructure such as water, gas, electricity, etc. In the said Scheme.
They were, therefore not an exception and could not be singled out. Later on, by letter dated I- 9- 1988 defendants informed the plaintiffs that as per decision taken in the meeting of Beard of Directors held on 30-5-1988, rate of premium was raised' from Rs. 2,75,000/- to Rs.4,00,000/-. They were required to pay the revised premium which was paid to the defendants before entering into formal agreement with the defendants. They were further made to pay an extra amount of Rs. -58,670/- towards premium and Rs. 2,848/- over and above the normal rate? Accordingly plaintiffs paid Rs. 4,77,868/- towards full and final payment of the plot in suit By letter dated 22-12-1990, defendants informed the plaintiffs that there was nothing outstanding against them. Plaintiffs claimed that on receipt of full payment, defendants delivered possession of the industrial plot in suit to them and executed Agreement to Licence on 5-1-1991 in their favour. Subsequently, however, vide letter dated 10-11-1991 they informed the plaintiffs that the Board of Directors had increased the premium in respect of the land to Rs. 7,00,000/- per acre in the meeting held on 29-4-1990 calling upon the plaintiffs to arrange payment of the balance premium within fifteen days failing which allotment of the land shall be cancelled. Plaintiffs repudiated the claim of the defendants who acknowledged the receipt of their reply but refused to concede to the request of the plaintiffs and reiterated their demand vide letter dated 14-12-1991 followed by a threat of cancellation of allotment in the event of failure to pay the balance premium within a fortnight, hence the suit.
3. Defendants contested the suit and filed a written statement relying upon conditions of allotment contained in the standard printed application form No. A for allotment of land in SITE. Serial No. 2 of the conditions provided that immediate steps should be taken to take over the possession after the allotment. If the allottee fails to take over the possession within three months the allotment should be considered withdrawn and the earnest money forfeited. While admitting the allotment of the plot in suit in favour of the plaintiffs vide letter dated 15-6- 1985 they referred to the terms and conditions of allotment as mentioned in this letter including the right of the defendants to forfeit the allotment and automatic lapse thereof in case of non-compliance of the terms by the plaintiffs. Without disputing the execution of Agreement to Licence in favour of the plaintiff? And rise in the premium they-raised pleas tending* to justify their action touching the maintainability of the suit:
4. Pleadings of the parties were reflected in the following issues.
(1) Whether the suit as framed is not maintainable?
(2) Whether the defendant is entitled to claim balance premium at the revised rate of Rs.
7,00,000/- per acre from the plaintiff in respect of the suit property ?
(3) Whether the defendant can unilaterally increase the premium and claim retrospectively from the plaintiff on past and closed transaction? If not, to what effect?
(4) Whether in the absence of any agreement,, the plaintiff is liable to pay balance premium at the revised rate of Rs. 7,00,000/- per acre for the. Suit property to the defendant?
(5) What should the decree be?
5. 1h support of their case, plaintiffs examined Akhlaque Resuool, Director of the Company Ex. 5 while the defendants examined Abdul Razak. Assistant Engineer SITE Ex.
6. Both the parties filed a number of documents in support of their respective contentions which will-be discussed later on.
6. I have heard learned counsel for the parties and gone through the relevant evidence on record. My findings on each of the issues with reasons therefor are as under:-
7. FINDING S. - Issue No. 1 ------------------ Negative.
Issue No. 2------------------ Negative.
Issue No. 3 ----------- --- Negative.
Issue No. 4------------------ Negative.
Issue No. 5------------------ with costs.
ISSUE NO. 1.
8. Learned counsel for the defendants contended that the plaintiffs are not the licencees in respect of the plot in suit because they had not obtained possession from the defendants as provided in the conditions of allotment on the application for allotment Ex. 6/1. It was urged that their status is of inchoate licensee and that they could only maintain a suit for damages for eviction from the licenced land under section 64 of the Easements Act. I am not at all impressed by the argument advanced on behalf of the defendants because in the first instance conditions printed on page 2 of the application for allotment of land would not constitute the terms and conditions of licence and secondly; these are unilateral and onerous in nature. Indeed a photo copy of this document was mentioned to have7 been filed alongwith written statement to have been filed alongwith written statement but actually it was not filed in Court till 19-9-1992 whereas evidence of the plaintiffs was concluded on 15-9-1992. It may be pertinent to' 6$safe that this document was not confronted to the plaintiffs' witness. It is worthwhile to note that the defendants letter dated 15-6-198?Ex. 5/2 months the rate of premium at Rs. 2,75,000/- per acre and other terms and conditions to be complied with by the plaintiffs but it is strange to find that even after compliance of terms and conditions of allotment in respect of the plot, they are not accepted as licensee. Payment of the revised premium as well as other charges and execution of agreement to licence Ex. 5/11 in favour of the plaintiffs, on 5-1-1991 would show that the plaintiffs were granted this plot for a term of 5 to 99 years at annual rent of Rs. 2500/- w.e.f. 15-7-1985. Under the circumstances it cannot be held that the plaintiffs did not acquire a valid right and interest in respect of the plot in suit or that they could not maintain the present suit for declaration and permanent injunction after a concluded agreement to licence was duly executed between the parties. I am of the considered view that reference to section 64 of the Easement Act is hardly relevant and called for in the circumstances of this case. Contention to the effect that sir the plaintiffs have not taken over a possession of the plot in suit the suit was incompetent is devoid of any force as handing over possession of the plot in suit would depend on the fairness and promptitude of the defendants who were duty bond to deliver possession after the receipt of payment and execution of a concluded agreement between the parties.
9. Learned counsel for the defendants referred to the case of Muhammad Khan v. Remnarayan Misra and others (AIR 1956 Orissa. 156) and urged that the license granted in favour of the plaintiffs did not confer any right or interest in the property in their favour and that the license has no other effect than to confer a liberty upon the licensee to go upon the land which would otherwise be unlawful. Learned counsel relied upon the following paragraph in the judgment at page 161 of the report which was the view taken in the case of Dominion of India v. Sohan Lai (AIR 1950 E.P. 40)
"The first of the two tests of irrevocability laid down in the Section is obviously narrower than the corresponding test laid down in the English cases. In order to be irrevocable under the section, a licences has to be coupled with transfer of property, whereas under the English law it is enough if it is coupled with a grant or interest in the nature of property." S In the reported case Court was concerned with a contract for collection and removal of Knead leaves from crop and recovery of amount for wrongful removal and collection of leaves.
10. Reported case is thus distinguishable on facts and hardly applicable in the facts of the present case for the obvious reason that the license in favour of the plaintiffs has not yet been revoked and is coupled with an interest of permanent nature. I am of the view that the plaintiffs being lawful licenses coupled with an interest in 'the property have acquired a valid right and interest in the property which is enforceable at law and their suit cannot be thrown out on the ground of non- maintainability.
ISSUES NO. 2 & 3. I. Both these issues are inter-connected and may be discussed together for the sake of brevity and convenience. It would appear that according to the letter of allotment Ex. 5/2 premium of the plot in suit was fixed at Rs. 2, 75,000/- but before the agreement to license Ex. 5/11 could be executed between the parties, the Board of Directors of the defendants decided to raise the premium to Rs. 4,00,000/-. Which was accepted by the plaintiffs as by that time there was no agreement to licensee or valid conferment of interest in their favour with regard to the plot in suit.
Before the execution of agreement to licence Ex. 5/11 they made full payment of the premium, penalty on premium and rent for the plot in suit vide receipts Ex. 5/6, 5/7 and 5/8. These payments' were acknowledged by defendants' Chief Accountant in his letter dated 22-12-1990 addressed to the plaintiffs confirming that there were no dues outstanding against them as land rent up to 30- 6-1991 and full premium for the plot of land were duly paid. It would further appear that the agreement to licence between the parties is spread over as many as 25 clauses but there is no clause authorising the defendants to increase the premium at their sweet- will . While clause 24 of the agreement lays down that the decision of Board regarding periodical enhancement in rent for land, building etc., in SITE will be binding on the licensee there is no corresponding clause or convenient between the parties to authorise the increase in the amount of premium unilaterally on the part of-the defendants. The contract between the parties evidencing the grant of licence for a period up to 99 years with permission to set up a factory thereon for the manufacture of Milk Food Products and Packing of Milk Products Subject to approval was a valid, lawful and concluded agreement, termS and conditions whereof could by no stretch of reasoning be varied, modified or amended to the disadvantage of either party . Since the grant of licence in this case was coupled with a valuable right in the plot in suit as held by this Court in a number of decided cases it would amount to a lease within the meaning of the term.
II. Rights and liabilities of lessor and lessee are regulated by the provisions of section 108 of the Transfer of Property Act which do not confer any right on the lessor to enhance the premium at his sweet will in the absence of an agreement. In the absence of any agreement between the parties to enhance the premium in respect of lease of the plot in suit, I am of the considered view that the defendants could not legally enhance the rate of premium and claim the balance amount from the plaintiffs retrospectively. Their demand in this respect is unjust, arbitrary and without any lawful authority.
12. There is also a case from Privy Council jurisdiction i.e. Ottoman Bank of Nicosia v. Ohones Chak arian (AIR 1938 Privy Council 26) in which the Privy Council was dealing with a case of contract of employment and entitlement of the employe^ on his retirement from service. Construing and interpreting the contract, Privy Council expressed their view in the following terms:- "If a contract is dear and unambiguous, its true effect cannot be changed merely by the course of conduct adopted by the parties in acting under it. Suit conduct, if it is clear and unambiguous, truly in detain events raise the inference that the parties -have agreed io modify their contract, but short of that, such conduct cannot have the effect of changing the operation of an unambiguous agreement, though it might possibly in special cases support, alongwith other appropriate evidence, a claim for rectification."
I am fortified in this view by a Division Bench judgment in United Bank Limited v. Muhammad Azim and another. (PLD 1985 Karachi 215) in which it was levide that in the instant case there is an agreement between the parties that a 99 years le. Tse will be executed in accordance with terms and conditions of license after the building is constructed. The mere fact that the Society, as against the allottee, is merely a licenser, does not make the allotment provisional as it is not a' case of licencee or allotment simpliciter, but a case of transfer of plot with possession against full payment of price and agreeing to execute a 99 years lease in favour of the allottee as stipulated in the terms and conditions mutually agreed.
3. In this connection I may refer to the case of Muhammad Mustaqeem Khan v. Pakistan Employees Co-operative Housing Society Limited and another (PLD 1985 Karachi 326) which was a case of cancellation of allotment of a plot by PEXH Society, in favour of a person not being member of the Society. In the absence of commission of any breach of terms of sub-licence a Division Bench of this Court set aside the cancellation as being without lawful authority.
2. Reference may also be made to a Single Bench judgment of this Court in Muhammad Ali v. PECH Society Limited & others. (PLD 1985 Karachi 481) delivered by Abdul Hayee Qureshi, J. (as he then was) holding that if rights in. Land are given to a person for the purpose of construction of a permanent nature, the presumption in law would be in favour of construing such a transaction as a lease rather than license. While referring to Section 52 of the Easements Act, learned Judge held that whenever a person grants to another person a right to do or continue, lo do something, which without such grant would be unlawful; such right would be a licence. If a right creates an interest in property, grant cannot be called a licence.
3. In the case of Nasira Sultana v. Habib Bank Ltd., and others (PLD 1975 Karachi 608) it was held that the aforesaid terms and conditions no doubt entitled the KDA to terminate or cancel the allotment but not without cause and only in the event of a default committed by the allottee. The allotment is not a 1 issue -simpliciter for the allottee has a right to be put in possession of the plot on payment of second installment, raised construction thereon and on payment of the lull occupancy value the KDA was bound it grant a 99 years lease to the allottee.
It is elementary principle of justice that one of the parties to a contract shall not get rid Of hi's contractual responsibilities by disabling the other contractor from fulfilling his part of the bargain.
In the light of above said discussion both the issues are answered in negative. ISSUE NO. 4. ' '
I6. In view of my findings on issues No. 2 & 3 and in the absence of any agreement, the plaintiffs are not liable to pay the balance amount of premium at the revised rate to the defendants.
I SM K.S NO, 5 & 6 As a result of my findings on the foregoing issues, suit is decreed with, costs. I .elter . dated 10-11- 1991 and 14-12-1991 issued by the defendants demanding payment of the balance premium at the revised rate of Rs. 7,00,000/- per acre are declared to be unlawful, arbitrary and of no legal effect.
The defendants have no right to cancel the lease in respect of the plot in suit on the failure of the plaintiffs to pay the balance amount. They shall not cancel the allotment lease of the plot in sui in I'avour'. Of the plaintiffs except in due course of law.