The brief facts giving rise to this writ petition are that the petitioner and respondents executed an agreement on 17-2-1993 and work order was also issued to the petitioner for the excavation of ordinary sand to be utilized in Motorway Project. The respondents also granted prospecting license/Mining lease for ordinary sand vide notification, dated 17-2-1993. The petitioner filed an application before respondents on 13-2-1996 for grant of renewal for one year in the mining lease.
The respondents informed the petitioner vide order, dated 26th March, 1996 that request of petitioner would btr accepted subject to formal renewal be issued after receipt of outstanding dues Rs.5,06,680. The petitioner has paid Rs.75g.930 Royalty to the respondents for half year ending 31-12-1995 on 7-3-1995 as is evident from Annexure 'C'. Only 7 days delay of remittance of royalty, accrued due to late release of funds from the Federal Ministry of Finance Government of Pakistan.
During the subsistence of mining lease the respondents enhanced the rate of royalty Rs. l per ton to Rs.5 per ton with effect from 5-9-1993. The petitioner sought clarification from the respondents through letter, dated 4 whether to the implementation of enhancement of the royalty to the extent whether the same be applicable on the existing mining lease or on future lease but the respondents failed to send reply to the petitioner he petitioner sent letter to respondents on 26-2- 1995 under the heading of payment of penalty for late remission of royalty on quarry leases is not justified. The reminder was also sent to respondents on 22-2-1994. The respondents did not give reply of aforesaid letters and finally passed the order against the petitioner. The petitioner was constrained by the circumstances to file appeal before the Secretary Government of the Punjab Industries and Mineral Development Department, who also dismissed the appeal vide order, dated 5-9-1996. The petitioner being aggrieved filed this writ petition.
2. The petitioner's counsel submits that rate of royalty was Re. l at the time of execution of Agreement between the parties but the respondents arbitrarily without notice to the petitioner increased the rate of penalty vide notification, dated 5-9-1993. The action of respondents is without lawful authority and respondents have no authority to impose penalty qua the existing lease retrospectively as the agreement was executed between the parties on 17-2-1993 whereas the penalty was increased on 5-9-1993. The petitioner has accrued the vested right on the basis of the agreement and respondents have no authority to increase the penalty. In support of his contention he relied upon Al-Samrez Enterprises' case (1986 SCMR 1917); that respondents have no authority to charge penalty on the increased rate retrospectively, therefore, action of respondents is without lawful authority. He relied upon the following judgments:---- (PLD 1974 SC 180) Commissioner of Sales Tax West Karachi's case and (1988 SCMR 715) The Chief Land Commissioner, Sindh and others case
3. I have given my anxious consideration to the contentions of learned counsel for the petitioner and perused the record. It is better and appropriative to reproduce the relevant clauses of agreement executed between the parties to resolve the controversy between the parties:-- "(xi) That subject to the provisions of clause (is) above, you will pay royalty at the flat rate of Rs.1 per ton for all produced and carried away on six monthly basis, i.e. On the. 1st day of January and 1st day of July each year. This rate of royalty is subject to revision by the Government from time to time. The amount of royalty will, be deposited into any treasury of the Punjab Government under the head of account and the original receipted copy of the treasury challan sent to this Directorate under intimation to its concerned Regional Office. If the royalty is not paid within the grace period of two months, penalty at the rate of 5 % of the outstanding dues for the delay of every month or part thereof from the date the payment first became due will also be paid by you. The lease may be cancelled if dues payable under the lease are not paid within six months next after the due date."
(xv) That you will observe and abide by all the provisions of the Punjab Mining Concessions Rules, 1986 (including Schedules attached thereto) in force or as may be amended or revised from time to time. "
The agreement executed between WAPDA and Consumers contained the similar clause which is reproduced hereunder: -- "17. Clause 27 goes a step further and lays down that subject to clause 26 'the Department reserves the right at any time to amend, cancel or add to any of these Schedules and conditions'.
The aforesaid clause was interpreted by Division Bench of this Court in Ahmed Daud Khan's case (PLD 1971 Lah. 462) and laid down the following principle: "18. There is, therefore, no bar in the contract to a unilateral amendment of the rate, and the consent of the consumer is not required for such a change. In fact the contract positively empowers the supplier to amend the rates. The consumer is, in any case, not under any obligation to continue to purchase energy from WAPDA and discontinue the arrangement at his sweet-will. "
The aforesaid judgment was considered by the Hon'ble Supreme Court in Ch. Muhammad Shafi's case (PLD 1976 SC 254) and upheld the aforesaid principle of this Court. The Quetta High Court had also followed the aforesaid judgment in Pakistan Mineral Development Department Corporation (PLD 1986 Quetta 181). The judgments cited by petitioner's counsel are distinguished on facts and law and has no relevancy to resolve the present controversy.