By this Civil Miscellaneous Application in this suit for declaration, and permanent injunction, plaintiff seeks a restraint Order in terms of order XXXIX, rules 1 and 2, C.P.C., restraining the defendants K.D.A. and K.B.C.A. from dealing with, disposing of and/or allotting the plot in suit to anyone else and from demolishing the building constructed thereon in accordance with the approved plan.
2. On the application of the plaintiff, defendant No,1 allotted Plot No,ST-4-A measuring 3-00 acres in Block-14, Federal 'B' Area, KDA Scheme No,16 for construction of multi-storeyed flats vide allocation letter, dated 30th September, 1964. Vide another letter, dated 8th October. 1964, KDA granted allotment of sites to ten different groups including the plaintiff company with direction for demarcation to the Chief Engineer (Development) KDA so as to enable the plaintiff to prepare final designs. Accordingly plaintiff deposited first and second instalments towards occupancy value on 16-1-1965 and 16-12-1969 respectively, on the basis whereof defendant KDA delivered vacant and physical possession of the site to him and executed indenture of lease in his favour on 24th January, 1970. Subsequently KDA executed indenture of lease dated 1st Mai. 1973 registered with the Sub Registrar on 15-8-1973 alongwith site plan of the plot in suit. Plaintiff paid a further sum of Rs,5,34,285.60 being the outstanding balance of occupancy value, ground rent upto 30th June, 1986, mutation fees, late fees, and non-utilization fees vide Bank challan dated 22-4-1985. Later, plaintiff engaged licensed architect for proposed construction plan and submitted the same to defendant No,1 which was duly approved vide letter dated 8-10-1970. Plaintiff booked the shops, offices, flats etc. to the general public with approval of defendant KDA but it is alleged that during the process of booking when the construction of the project was in progress, KDA on the basis of anonymous letters created hurdles in the process of smooth construction with the result that construction work came to a halt. After inquiry, defendant No,1 desired the submission of fresh building plan for approval which was duly proposed and approved vide letter dated 15-5-1973.
After fresh approval of the building plan, plaintiff completed the construction on ground floor and raised structure on first and second floors but defendant No,1 time and again interfered with the pace of construction which resulted into go-slow. On account of dispute between the allottees and the plaintiff, construction work had to be stopped. As averred in the plaint, with the approval of the KDA, plaintiff leased out the shops on ground floor of the building in favour of the allottees which were mortgaged with the Bank/House Building Finance Corporation for availment of loan facility by allottees with the permission of defendant KDA. During the process of this dispute, defendant KBCA came into being, accordingly dispute was referred to it. It is the case of the plaintiff that he conceded to all proposals barring a few cases and the matter was resolved but the construction work remained pending for want of fresh permission/no objection certificate to be obtained from various civic agencies under the provisions of Sindh Building Control Ordinance. But all of a sudden, defendant KDA on flimsy ground of violation of terms and conditions of allotment order cancelled the allotment, by reason of non-payment of outstanding amount of Rs,30,85,564 for which no demand was ever raised.
3. In the written statement filed by defendant KDA preliminary objections are raised to the maintainability of the suit for a number of reasons including want of notice as required under Article 131 of the KDA Order, 1957. Allotment in favour of the plaintiff company is admitted with the averment that the proprietor/allottee of the company having expired, nobody approached the KDA for transfer of the company in the name of the legal heirs. Payment of two instalments, delivery of possession and payment of outstanding amount inclusive of ground rent upto 30th June, 1986 is admitted. According to the KDA, building plans were approved but the plaintiff booked flats without following normal procedure for which serious complaints were received whereupon Chief Minister Sindh ordered the cancellation of allotment of the plot in suit. It is said that a show-cause notice was issued to the plaintiff but it was returned undelivered. Much emphasis is laid on the circumstances that on public complaints, a report was sent to the Government of Sindh on which Chief Minister ordered the cancellation of allotment in public interest, thus, the action taken is valid and within jurisdiction. Execution of lease deed annexure-G to the plaint is admitted but sub-lease in favour of allottees by plaintiff company is disputed for the reason that such statement is not filed alongwith the plaint. In the counter-affidavit, averments made in the written statement have been adopted.
4. On behalf of defendant No,2 i,e, KBCA, it is urged that the plaintiff started construction according to the approved plan and handed over possession of shops to the allottees without obtaining completion certificate or approval from the competent authority. As occupants of the shops encroached upon 20 feet compulsory open space and inhabitants of the locality lodged complaints, notices were issued to such shopkeepers and the plaintiff to remove the encroachment and in the event of non-compliance defendant No,1 was requested to take action who cancelled the allotment of the plot. In view of cancellation of the allotment, approval for building plan was withdrawn and the work has been stopped. This defendant also claimed notice under sections 16, 20 and 20-A of the Sindh Building Control Ordinance simultaneously pleading that there is no cause of action against this defendant. Supporting counter-affidavit is also filed by this defendant resisting the prayer for interim injunction.
5. Counter-affidavits filed by the defendants are followed by affidavits-inrejoinder reiterating the case set up in the plaint with a clarification that no show-cause notice was given to the plaintiff either for cancellation of allotment or for demolition of the construction and plaintiff has been punished and condemned unheard. It is urged that by virtue of the allotment of the plot in 1964 and full payment of occupancy value thereof, a right in rem was created in favour of the plaintiff which cannot be taken away and the construction raised according to the approved plan could not be demolished.
6. At the hearing learned counsel for plaintiff contended that the cancellation of allotment which in fact is cancellation of lease deed without any show-cause notice and without affording an opportunity of hearing is mala fide and completely without jurisdiction as the KDA had no lawful authority to cancel the lease on the ground of alleged violation of the terms and conditions thereof.
He submitted that after full payment of occupancy value there was nothing outstanding against the plaintiff and in case KDA thought that there were dues against the plaintiff, he ought to have been called upon to pay the outstanding amount. There is a considerable force in the submission of the counsel and in my view, notwithstanding condition No,27(4)(1) of lease deed under which KDA reserved a right to forfeit the lease, to re-enter upon the demised land, cancel the allotment of the plot and recover its possession, this could not be done without a valid show-cause notice and establishing violation of the terms and conditions of the lease. After execution of lease of immovable property, a valuable right is created in favour of transferee which cannot be taken away by a unilateral act of revocation/cancellation. Such right is further strengthened after delivery of physical possession and approval of building plan in favour of the lessee which cannot be cancelled without the intervention of Court of law.
7. Lease of immovable property is transfer of a right to enjoy such property. Right to enjoy the property as defined in section 105 of Transfer of Property Act, 1882 is not a mere contract but is a transfer of interest in the property leased which creates a right in rem.
8. No boubt KDA alleged violation of the terms and conditions of lease in the cancellation order, the position taken in the written statement and the counter-affidavit is altogether different namely that on receipt of various complaints from the inhabitants of the locality, a summary was moved to the Government of Sindh whereupon Chief Minister of Sindh was pleased to direct cancellation of allotment. Indeed both the pleas taken by KDA are self-contradictory and irreconcilable. Indeed KDA apparently failed to point out any violation of the terms and conditions of the lease executed in favour of the plaintiff, controversy to the effect that the plaintiff was in huge arrears cannot be accepted on a mere allegation as no detailed particulars are specified. In any event, no show- cause notice or a notice of demand was issued to the plaintiff entailing serious consequence of forfeiture of lease. On the other hand, after the execution of a valid and lawful lease deed and acquisition of valuable rights by the plaintiff, it is hardly possible to subscribe to the view that the Chief Minister Sindh could lawfully direct the cancellation of lease as pleaded by the defendant. At any rate, no document has been placed on record even to support such statement of fact. To my mind, KDA has a Board of Governors and it is an autonomous body created and established under a Federal statute. It is difficult to accept that in the presence of Board of Governors, Government of Sindh had anything to decide in matters relating to forfeiture of lease.
9. In an identical case reported as Noor Muhammad Shah v. Chairman KDA (1989 CLC 1470) a Division Bench of this Court struck down the order of cancellation of allotment being contrary to the principle of natural justice. This Court expressed the view that mere fact that an allotment order could be cancelled without giving reasons, does not abrogate the rule of natural justice (audi alteram partem), that an aggrieved party has to be informed before an order affecting his right is passed.
10.In Nasira Sultana v. Habib Bank Ltd. (PLD 1975 Karachi 608) the view taken was that the terms and conditions of allotment, no doubt entitled to KDA to terminate or cancel the allotment but not without cause and only in the event of a default committed by the allottee; which view was reiterated in D.B. decision reported as Noor Muhammad v. Karachi Development Authority (PLD 1975 Karachi 373).
11. Similar view was taken in Muhammad Mustagem v. PECHS Limited (PLD 1985 Karachi"326). In the case reported as Muhammad Azim v. PECHS Limited (PLD 1985 Karachi 481) late Abdul Hayee Qureshi, J. (as he then was) held 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 licence.
12.In High Court Appeal arising out of Muhammad Azim's case Division Bench in United Bank Ltd. v.
Muhammad Azim (PLD 1985 Karachi 215) expressed the view that in the instant case there is an agreement between the parties that 99 years' lease 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 licensor, does not make the allotment provisional as it is not a case of lincence or allotment simplicitor, but that of transfer of plot possession against full payment of price agreeing to execute a 99 years' lease in favour of the allottee as stipulated in terms and conditions mutually agreed. In such event doctrine of part performance under section 53-A, Transfer of Property Act would also apply. Somewhat similar view was taken by me in Millac Pakistan (Pvt.) Ltd. v. SITE Limited (1996 CLC 213).
13.There is latest pronouncement by Honourable Supreme Court in Shoukat Ali v. Government of Pakistan (PLD 1997 Supreme Court 342) expressing the view that even in case of a license if the action of the State functionary concerned is prompted with malice/mala fide, the Court may interfere with. The apex Court further held that State functionaries are expected to act fairly and justly in a manner which should not give to any one any cause of complaint on account of discriminatory treatment or otherwise.
14.As to the want of statutory notice in terms of Article 131 of K.D.A. Order, suffice to say, such notice would be necessary in case the action taken by KDA is within jurisdiction and according to the provisions of K.D.A. Order. In case the act complained of is prima facie illegal and beyond the sphere of authority, suit cannot be held to be incompletely filed for want of such notice.
15.As regards the position taken by K.B.C.A. in its written statement and the counter-affidavit, suffice it to say, approval of the building plan was withdrawn after the cancellation of allotment.
Since I have taken the view that the plaintiff has made out a strong prima facie case for a restraint order against the KDA, he is entitled to complete the construction provided it is in strict compliance with the provisions of the approved plan.
16.For the aforesaid facts and reasons. I am of the considered view that the plaintiff has made out a fit case for the grant of temporary injunction and all essential conditions for the grant of such relief do exist in his favour. Civil Miscellaneous Application is, therefore, granted and interim order confirmed.