' SABIHUDDIN AHMAD, J.--- The predecessor-in-interest of the petitioner was allotted a plot of land measuring about 240 sq. Yards vide allotment order, dated 19-4-1975 and possession was delivered to the allottee on 3-5-1975. Thereafter, the scheme under which the allotment had been made was transferred to the Karachi Metropolitan Corporation, which underipok to fulfil obligations undertaken by the respondent No,1. The petitioner thereafter purchased the allotments rights from the original allottee and transfer was effected in the name of the petitioner vide transfer order, dated 22-8-1997. Subsequently, a lease was also executed in her favour by the K.M.C. Later on the scheme appears to have been retransferred to the respondent No,1.
2. The petitioner through this petition has called in question the rapid increase in the non-utilization fee demanded by the respondent No,1 and the exorbitant amount of composition fee for approving the building plan claimed by the respondent No,2. After having argued for sometime, however, learned counsel stated at the Bar today that he was no longer pressing his objection to composition fee and, therefore, the petition as against the respondent No,2 be dismissed.
3. As regards non-utilization fee it was contended that the allotment order issued by the respondent No,1 did not stipulate any such fee. However, the Allotment Regulations, 1965, the terms whereof would be deemed to form part of the contract provided that in case the petitioner/allottee failed to raise construction within the time prescribbd in the Regulations or such extended time to do so that may be allowed he would pay a penalty at the rate of 3% per annum of the total occupancy value for every six months or part thereof. Learned counsel argued that after a complete contract had come into existence, the respondent No,1. Unilaterally and arbitrarily increased the rate of non-utilization fee to 6% per annum and also proceeded to calculate the same on the basis of what it considered to be the prevailing market value rendered the original occupancy value. Such action being unlawful and arbitrary was liable to be struck down.
4. As regards the enhancement of occupancy value for the purpose of calculating non-utilization fee the matter appears to be fully covered by a pronouncement of a Division Bench of this Court in Abdul Majeed v. K.D.A. 1992 M LD 2401, wherein it was held that the respondent No,1 could not enhance the rate of occupancy value without approval of the Provincial Government and even if such approval was accorded, the new rates could only apply prospectively and not to the allotments made earlier. The question raised by the petitioner was also examined very recently by a Division Bench of this Court, of which one of us (Sabihuddin Ahmad, J.) was a member, in a Constitutional Petition No,D-948 of 1996 (Syed Iqbal Ahmad v. K.D.A.) and a number of other connected petitions, and it was clearly held that such fee could not exceed 3% of the original occupancy value of the plot.
5. Mr. S.M. Yaqoob requested us to clarify whether the respondent No,1 could claim the interest or mark-up on the amount of the fee claimed. In this context it may be explained that in case of Syed Iqbal Ahmad, we had held that the impost could neither be treated as a tax levied under statutory authority nor a fee for services rendered. In the circumstances it could only be treated as penalty for breach of contract, which would be claimed under section 74 of the Contract Act, provided it was reasonable and did not exceed the amount mentioned in the contract.
6. For the foregoing reasons we are of the view that no mark-up could be claimed on non- utilization fee and the maximum limit must be confined to 3% of the original occupancy value. The petition is allowed to the extent and the petitioner will be entitled to adjustment of the amount already paid. There will be no order as to costs.