' This is a suit for specific performance of contract and in alternate for damages claimed at Rs,9,72,000. According to the averments of the amended plaint, the predecessor in interest of plaintiffs Nos.1(a) and 1(b) namely Raja Sardar Khan (now deceased) and plaintiff No,2, namely Raja Ghulam Abbas are in possession of the two plots measuring 405 square yards each situated in S.B. 9, Saddar Bazar Quarters, Karachi (hereinafter referred to as the suit properties); that the plaintiff raised construction on the said plot after considerable investment; that initially lease was granted by defendant which continued till June, 1977 for which the plaintiffs were continuously paying rents; that in the year 1978, an offer was made by the defendant for grant of lease in respect of suit properties which was duly accepted; that the rate was fixed by the Government at Rs,1,000 per square yard for which the plaintiffs made representation and the same was reduced to Rs,600 per square yard; that this offer was accepted by the plaintiffs; that the defendant without affording any opportunity of hearing to the plaintiff and after accepting the consideration, illegally and unauthorisdely revoked the allotment; hence, the plaintiffs have filed the suit for the following relief:--- "(a) Specific performance of contract, dated 18-2-1978 and 25-2-1978 and direct the defendants to execute and register the Deed of Sale in respect of property comprising 810 sq. Yards., bearings Nos.9, Saddar Bazar, Karachi in favour of plaintiffs and/or their nominee or nominees and on failure of the defendants to do so, to direct the Nazir or any other officer of this Hon'ble Court to execute the sale-deed and to get the same registered after compliance with due formalities/alternatively to pass the judgment and decree in the sum of Rs,9,72,000 as damages and/or compensation.
(b) Costs of the suit.
(c) Interest at judgment at 14% per annum from the date of the suit to that of realisation of decretal amount.
(d) Such other, better or further relief and/or reliefs as this Hon'ble Court may deem fit in the circumstances of the case."
2. The defendant has challenged the maintainability of this suit in its written statement in addition to the denial of the averments of the plaint. It was stated by defendant/K.M.C. In its written statement that the letter Exh. 5/4 was issued by the lower staff of the K.M.C. Without any lawful authority and sent by the Land Department. It is further alleged that the said letter was issued under some pressure, but the source of such pressure was not disclosed. It is also pleaded that by virtue of MLO-60 and section 42 of the Sindh People's Local Government Ordinance, 1972 (hereinafter referred to as the Sindh People's Local Government Ordinance, 1972 this suit is liable to dismissed. As a result of the above pleadings of the parties, following issues were framed by this Court on 29-9-1979:--- "(1) Whether there is a concluded contract between the plaintiffs and defendant for sale of the property in suit?
(2) Whether the sanction was withdrawn by the Government? If so, what is the effect?
(3) Whether the plaintiffs have raised any construction on the disputed plot? If so, what is the effect?
(4) What is the effect of the filing of two suits by the plaintiffs against the defendant which are pending in the lower Courts?
(5) Relief?"
3. I have heard Mr. Rehanul Hasan Faruqi; Advocate for the plaintiff and Mr. Muhammad Yasin Kiyani, Advocate for defendant. I have also perused the evidence brought on record by the parties.
My findings issue-wise are as follows:--- Issue No,l.
4. This is an important issue which will decide the fate of the suit. It is provided in section 4 of the Specific Relief Act, 1877 (hereinafter referred to as the Act, 1877) that a specific relief cannot be granted in respect of an agreement which is not a contract. Much emphasis has been placed by Mr. Kiyani on the provisions of section 42 of the Sindh People's Local Government Ordinance, 1972, the relevant portion of which reads as follows:--- "42. Contracts.---(1) Every council shall be competent, subject to the provisions of this Ordinance or rules to transfer or alienate any movable or immovable property vested in or acquired by it and to enter into and perform all such contracts as it may consider necessary or expedient in order to carry into effect the provisions and purposes of this Ordinance: ' Provided that no expenditure not covered by the budget shall be permissible.
(2) All contracts made by or on behalf of a Council shall be---
(a) in writing and expressed to be made in the name of the Council; and
(b) repotted to the Council by the Mayor or Chairman, as the case may be, at the meeting next following the execution of the contract.
(3)..
(4) All contracts for transfer by grant, sale, mortgage, lease or otherwise of immovable property or any interest and right thereto or disposal or sale of movable property shall, subject to rules to be entered into after inviting offers in an open auction: ' Provided that if the highest bid is not accepted by the Council, approval in writing of the Controlling Authority shall in his order give reasons for not accepting the higher bid; 'Provided further that a Council may with the approval of Government enter into a contract without inviting offers in auction.'
Note: The last proviso to subsection (4) was added by the Act V of 1974 (PLD 1974 Sindh 50).
(5)..
(6).
(7) No contract executed otherwise than in conformity with the provisions of this section shall be binding on the Council."
5. In support of their case, the plaintiffs have examined Raja Fakhar Abbas who is son of original plaintiff No,1 . According to this witness, plaintiffs are in physical possession of the suit properties since 1st February, 1953 and carrying on business of different merchandise; that the monthly rent was fixed at Rs,39.25 which was paid till June, 1997; that in the year 1969 defendant demanded lease money at the enhanced rate of 300 rupees per square yards which was refused; as such, the said action of the defendant was challenged through two Suits Bearings Nos.247 of 1969 and 249 of 1969. On 20-11-1969, declaration was granted by the 9th Civil Judge, Karachi vide Exh.5/1 that the plaintiffs are lawful tenants and cannot be evicted otherwise than due course of law.
6. The main document upon which the plaintiffs are relying is Exh.514 which was also produced by the defendant's witness as Exh/6/4. This is a letter, dated 14-2-1978 written by Director Land and Estate, K.M.C. To the predecessor in interest of the plaintiffs through which it was communicated that the Government has decided to sanction grant of lease on 99 years basis subject to payment of Rs,1,000 per square yard plus land rent at the rate of Rs,3 per square yards per annum. Through this letter, the plaintiffs. Were directed to deposit the occupancy value of Rs,8,10,000 plus a sum of Rs,3,378.45 being land rent and survey fee. Mr. Kiyani has drawn my attention to the opening para. Of this letter Exh.5/5 and Exh.6/4 which refers to some letter of the plaintiff addressed to the Martial Law Administrator Zone-C. At the bottom of this letter, a copy of Exh.5/4 was forwarded to Lt. Col. Muhammad Sohrab, Martial Law Headquarters, Assembly Building, Karachi. The other document which has been relied upon by the plaintiffs is Exh.6/5 which is again a letter, dated 18-2-1998 written by Section Officer of Government of Sindh to the Administrator of K.M.C. Expressing willingness of the Government for reduction of lease money from Rs,1,000 to Rs,600 per square yard.
Again this document contains a note in handwriting that "Col. Sohrab of M.L. Insists that the demand letters be issued today".
7. It is pertinent to note that on 14-2-1978. Approval was granted by the Government of Sindh vide Exh.6/3 and on the same day it was conveyed by the K.M.C. To plaintiff vide Exh.6/4. Within a span of four days only the Government of Sindh agreed to reduce the lease money which fact was conveyed to the plaintiffs. The defendant's witness has produced a letter, dated 23-2-1978 written by the then Administrator, K.M.C. To the Secretary Government of Sindh, Karachi (Exh.6/7) asking the Government to revoke the plots and to resume the land for the purpose of Empress Market Re- construction Scheme. As a result of this letter, on 7-3-1978, the Government revoked the offer to lease out the suit properties on 99 years basis through Exh.6/8. This letter was written by the same Section Officer who has written Exh.6/5.
8. Now, the question which requires consideration is whether in view of the aforesaid documents, a valid, lawful and binding contract came into existence? Mr. Rehanul Hasan Faruqi has relied upon the following cases to support his contention that even mere allotment creates a permanent right and cannot be revoked without affording proper opportunity of hearing to such allottee:---
(i) Khan Bashir Ahmad Khan v. The Government of West Pakistan and others (PLD 1959 Lahore 790);
(ii) Haji Noor Muhammad and others v. Karachi Development Authority and 2 others (PLD 1975 Karachi 373);
(iii) Nasira Sultana v. Habib Bank Ltd. And others (PLD 1975 Karachi 608);
(iv) Pakistan Medical Association, Karachi v. Government of Sindh and 5 others (1979 CLC 382); and
(v) Sh. Abdul Aziz v. Karachi Development Authority through its Chairman (1984 CLC 2629).
' On the other hand, Mr. Muhammad Yasin Kiyani has argued that since this is a suit for specific performance, the cases cited by Mr. Faruqi do not help him as in these cases question of allotment was involved and in the instant case, the question involved is of a valid and binding contract. In addition to section 42 of the Sindh People's Local Government Ordinance, 1972, he has cited the following cases:---
(i) Rai Singh and others v. Allah Din and others (PLD 1950 Lahore 111);
(ii) Dr. Fazal Din v. Municipal Committee Lyallpur (PLD 1956 (W.P.) Lahore 916).
(iii) Karachi Municipal Corporation v. Moosa M. Adam and others (PLD 1972 Karachi 571).
9. The authorities cited by Mr. Rehanul Hasan Faruqi involve the question of allotment by the Development Authorities. The first case cited by him namely Khan Bashir Ahmed Khan (supra) pertains to the allotment of a premises under the rehabilitation laws where it was held by a learned Single Judge of Lahore High Court that once an order of allotment is passed a formal order has to be issued and it is not correct to say that so long as a formal order of allotment is not signed and delivered, there is no allotment in favour of an allottee. The case of Haji Noor Muhammad (supra) was decided by a Division Bench of this Court where it was held that an allottee of a plot in a housing scheme formulated under the Karachi Development Authority Ordinance, 1957 is not merely a licensee or sub licensee but has a right in rem in respect of the plot allotted to him. The cases of Kamaluddin Ansari v. Director Excise and Taxation (PLD 1971 SC 114) and Abdul Bhai v.
Muhammad Ahmed Din (PLD 1964 SC 101) were followed by the learned Division Bench of this Court in the case of Haji Noor Muhammad. The rule laid down by a learned Single Judge of this Court in the case of Nasira Sultana (supra) is that an allottee according to the terms of agreement with K.D.A. Is entitled to be put into possession and raise construction on the plot on the payment of full occupancy value and that K.D.A. Is bound under agreement to grant lease of 99 years. The rule laid down in the case of Haji Noor Muhammad (supra) was reiterated by another Division Bench of this Court in the case of Pakikan Medical Association (1979 CLC 382). The last case cited by Mr. Faruqi is not relevant as in that case it was held that where an allotment order is cancelled by the Karachi Development Authority without notice to the allottee such cancellation is illegal. None of these cases is relevant for the purpose of resolving the present controversy. It is not the case of the plaintiffs that they were allotted a plot by a Development Authority. Their case is that K.M.C. Agreed to convert their licence/tenancy into 99 years lease hold rights.
10. The cases cited by Mr. Kiyani are direct on the point involved in this case. He has relied upon the case of Rai Singh (supra) and contended that when a special procedure has been laid down and a special provision has been made on a particular subject then to that subject the general provision of a statute cannot be applied. However, in the instant suit, it is section 42 of the Sindh People's Local Government Ordinance, 1972 (now repealed) which is involved. This provision of law was incorporated in section 45 of the Sindh Local Government Ordinance, 1979. In order to ascertain the real intention of the legislators, it would be necessary to examine the subject-matter, the scope and the object of enactment; whether any injury will result from ignoring it; whether it requires same antecedent and pre-requisite conditions to the performance of an act or conducting of a proceeding in order to invest it with validity. Reliance is placed on the cases Tanzeem-e- Mulazamin Baldiya and 2 others v. Government of West Pakistan and 4 others (PLD 1971 Karachi 535) and Messrs Saleemsons Ltd. v. The Second Sindh Labour Court, Karachi and another (PLD 1973 Karachi 1). The question in the case of Dr. Fazal Din (PLD 1956 Lahore 916) was whether an agreement of lease of land by a Municipal Committee which was reduced to writing but did not bear its seal was void not being binding on either party to the lease. Reference was made to section 6 of the Punjab Municipal Execution Officers Act, 1931, wherein, inter alia, it was provided that every contract to be entered into by Municipal Committee affecting immovable property shall be entered into in certain manner and form and shall be in writing and be sealed with the owned seal of the Committee. It was further provided that no contract executed otherwise than as provided in section 6 of the Act, 1931 shall be binding on the Municipal Committee. A learned Division Bench of the Lahore High Court followed the rule laid down in the case of Municipal Committee Lahore v.
Miran Bux (ILR 13 Lahore 561) and Mayor of Ludlow v. Charlton (6 M & W 815) and held that it is only a seal of the Corporation which acts when it enters into contracts in writing and if there is no seal the Corporation has not acted at all and that no question of existence of a contract, therefore, arises.
The contract entered in such circumstances was held to be totally void. This view as fufther reaffirmed by the erstwhile West Pakistan High Court in Dr. Azim Shad v. Municipal Committee Multan (PLD 1968 Lahore 1419).
11. The last case cited by Mr. Kiyani is of a Division Bench of this Court where the present defendant filed a letters patent appeal against an order of a learned Single Judge of this Court. One of the objection raised was that since the agreement to transfer a land was not in accordance with sections 229 and 230 of the City of Karachi Municipal Act, 1933 (hereinafter referred to as the Act, 1933), it was not a binding contract and was, therefore, void. It is pertinent to note that in sections 229 and 230 of the Act, 1933, there were certain conditions laid down for entering into contract without which it was stipulated that such contract shall not be binding on the Municipal Corporation. Two learned Judges of this Court, Dorab Patel and Imdad Ali H. Agha, JJ. (as their Lordships then were) after resume of 70 years of law on the Municipality dating from Ahmedabad Municipality v. Suleman G. (ILR 27 Bombay 618) till the case of Dr. Fazal Din (supra) held, inter alia, that the formalities prescribed in Municipal Legislation with regard to the execution of contracts of municipalities are mandatory and there can be no estoppel against them and that a contract by a Municipality can only be made by affixing its seal to the contract and noncompliance with this provision rendered contracts of municipalities, void. The object for laying down such rules by the legislators in respect of contracts to be entered into by Municipal Committees was narrated in the following words:--- "...In order to protect the public interest to check corruption and to ensure the purity of the democratic process, the Legislature has always imposed drastic controls on the powers of the employees of Municipalities, and so under the K.M.C. Act, whilst the Corporation itself has wide powers, the only officer empowered to contract on its behalf is its Chief Officer and that in the manner specified under the Act. To nullify these provisions by equating Municipalities with joint stock Companies and then invoked the rule of estoppel would, in my humble opinion amount to frustrating the intention of the Legislature..."
12. Section 42 of Sindh Local Government Ordinance, 1972 came up for consideration in a suit before this Court in 'the case Ali Muhammad v. K.M.C. (1985 CLC 1730) when reference was made to the case of Dr. Azeem Shad (PLD 1968 Lahore 1419). It was held by Saleem Akhtar, J. (as he then was), inter alia, that it is now well-settled that contracts entered into with the Corporations in breach of statutory provisions and rules are not binding on them. Provisions of subsection (7) to section 42 of the Ordinance, 1972 where it was provided that any contract entered into otherwise than in conformity with the provisions of section 42 will not be binding on the Council/Corporation was held to be mandatory and not directory. In the instant case, it is admitted position that no contract as provided under section 42 of the Sindh People's Local Government Ordinance, 1972 was entered into at any relevant time.
13. Reverting to the facts of the case, it will be seen that on 14-2-1978, vide Exh.6/3 which was issued by Section Officer VI of Housing Town Planning and Local Government Department plaintiffs were granted 99 years leasehold rights for the suit properties and on the same day, Director Land and Estate K.M.C. Vide Exh.6/4 affirmed the action of the Government of Sindh. In fact, allotment, if any, should have been made first by the Council and only thereafter it should have been placed before the Provincial Government for confirmation or otherwise. But in the instant case, reverse procedure was adopted. However, it is interesting to note that a copy of Exh.6/4 issued by Director Land and Estate K.M.C. Was forwarded to Lt. Col. Muhammad Sohrab, Martial Law Headquarters, Assembly Building, Karachi "for favour of information". One of the conditions of lease as mentioned in Exh.6/3 was that the same shall be liable to be reverted back to the K.M.C. For any public amenities or any other purpose specified by the K.M.C. The price of lease was fixed at Rs,1,000 which was subsequently reduced to Rs,600 vide Exh.6/5, dated 18-2-1978 within a period of four days from the issuance of Exh.6/3. This Exh.6/5 which is issued by the same Officer as of Exh.6/3 contains a remark, "Col. Sohrab of M.L. Insists that demand letter be issued today". Accordingly, on the same day Exh.6/6 was issued by the Director Land and Estate reducing the rate from 1,000 to 600 per square yard. Admittedly, no agreement or contract as provided under section 42, Sindh People's Local Government Ordinance, 1972 was executed. It is not the case of the plaintiff that such grant of lease was reported to the Council by the Mayor or Chairman of defendant in the next meeting. In what manner and how hurriedly this offer of lease was made to the plaintiff is incorporated in Exh.6/11 which has not been denied by the plaintiff which reveals that it was under the pressure from the then Martial Law Authorities. Be that as it may, during the same month i,e,, February, 1978 the then Administrator K.M.C. Who happened to be a retired Bridg stood to the occasion and brought the facts before the Government of Sindh. It was under these circumstances, that the Government recalled grant of lease vide letter, dated 7-3-1978 (Exh.6/8) which is the letter challenged in this suit.
14. Section 42 of the Sindh People's Local Government Ordinance, 1972 provides that it is only the Council which shall be competent to transfer or alienate any movable or immovable property vested in it. It further provides that all contracts made by or on behalf of a Council shall be in writing and to be made in the name of such Council which shall be reported to the Council by the Mayor or Chairman as the case may be at the next following meeting after the execution of the contract. Subsection (4) provides that all contracts in the nature of transfer by grant, sale, mortgage, lease or otherwise of immovable property or any interest and right involved in an immovable or movable property shall be entered into after inviting offer in an open auction.
Subsection (7) makes it clear that no contract executed otherwise than in conformity with the provisions of this section shall be binding on the Council. In the instant case, the lease was granted by the Provincial Government and thereafter, it was confirmed by the defendant on 14-2-1998 and within a span of 17 days the same was recalled by the same process as it was granted. Neither any formal contract as provided under section 42 of the repealed Ordinance of 1972 was executed nor the same was placed before the Council which are mandatory provisions of law. In absence of such provisions, it cannot be held that that there was a concluded and binding contract between the plaintiffs and defendant for the lease or sale of the property in suit. Accordingly, my answer to Issue No,1 is in negative.
Issue No,2.
15. It has not been denied that the offer was subsequently withdrawn by the Council vide Exh.6/8.
Since I have held that there was no concluded and binding contract between the parties, such withdrawal has no legal effect. Issue No,3.
16. Plaintiffs have not brought on record any reliable or tangible evidence to show that what type of construction was raised on the suit property. They are claiming to be in possession of suit property since 1924 and are doing business. In such circumstances, the presumption is that there may be some construction of Katcha/Pakka nature. But neither any approved plan or completion certificate was produced in order to show that there is a lawful and bona fide construction on the suit premises. Even if there is such construction, it will have no effect as the defendant has not denied the status of plaintiffs on the suit premises to be tenants.
Issue No,4.
17. It is admitted by both the parties that after filing of the instant suit, the previously filed suits were withdrawn and, therefore, this issue was not pressed by Mr. Kiyani.
Issue No,5.
18. It is pertinent to note that the plaintiffs have prayed in alternate for a decree of Rs,9,72,000 as damages and/or compensation but neither in the plaint nor in the entire evidence of P.W.1 namely Raja Fakhar Abbas it was shown as to how the plaintiffs have suffered any damages or pecuniary loss. There is no evidence on this point. As a result of the above discussion, the suit is dismissed with no order as to costs.
Suit -dismissed.