Plaintiff has instituted this suit for declaration, mesne profit and injunction against the action of freezing of plots bearing Nos.I48 and 149 admeasuring 977.56 sq. Yds. Each situated in Sector 15, Korangi Industrial Area, Karachi, ordered to be frozen by the letter of defendant No,1 dated 1-12- 1999.
2. Brief facts of the case are that the plaintiff applied to the Chief Minister for allotment of land for setting up industrial unit and after examination of the case of the plaintiff four plots bearing Nos.
146 to 149 were allotted to the plaintiff out of which the plaintiff disposed of two plots and raised construction and commenced industrial production on the premises on Plot Nos. 148 and 149. The steps taken by the plaintiff include mortgaging of property with the financial institution which in the instant case was Industrial Development Bank of Pakistan, the same was later released on repayment. However, in view of the impugned notice of the K.D.A., plaintiff claimed to have suffered losses on account of inability to offer the property as a security for further business resulting in financial losses. The plaintiff also seeks a declaration against the impugned notice as Well as injunction restraining further action.
3. The defendants have filed their written statement supporting the action taken by the defendants and the following issues arising out of the pleadings were framed with the consent of the learned counsel:--
(1) Whether the Chief Minister was competent to order for allotment of the plots in suit to one person?
(2) What is the effect of the subsequent lease of the suit plots in favour of the plaintiff?
(3) Whether the action of freezing of the suit plots took place on the orders of the Government of Sindh, defendant No,2, if so, its effect?
(4) What should the decree be?
4. The plaintiff has examined Zia Abbas, Director and Chief Executive of the plaintiff-Company, while Ferozuddin Awan, Assistant Director, K.D.A., appeared as witness of defendant No, 1 . The documents produced by the respective witnesses are admitted.
5. Mr. Kamal Azfar, Advocate advanced his detailed arguments in support of the claim of the plaintiff with respect to each of the issues framed. He placed reliance on sections 108(c), 110 and 11 1 of the Transfer of Property Act and challenged the authority of the defendant to take an action for freezing the land which does not fall in reference either in the law or relevant rules.
6. He also placed reliance on the powers of the Chief Minister for disposal of plots and the distinction between the residential, industrial and amenity plots to show that there was no breach or violation of any rule or law at the time of allotment.
7. As a result of above transactions learned counsel pressed his point to show that certain rights accrued to the plaintiff which are safeguarded under the law and have the cover of the Constitution guarantees available to the citizens. Reliance has also been placed on sections 35 and 39 of the Specific Relief Act and the following case-law has been cited:--
(I) Pakistan through Secretary Ministry of Finances v. Muhammad Himayatullah Farukhi PLD 1969 SC 407.
(2) Haji Noor Muhammad and others v. Karachi Development Authority and 2 others PLD 1975 Karachi 373.
(3) Nasira Sutlana v. Habib Bank Ltd. And others PLD 1975 Karachi 608.
(4) Messrs Army Welfare Sugar Mills Ltd. v. Federation of Pakistan 1992 SCMR 1652.
(5) Khawaja Akbar Waheed v. Karachi Development Authority 1993 MLD 87.
(6) Qureshi Industries v. Karachi Development Authority PLD 1993 Karachi 553.
(7) lmdad Magsi and others v. KW&SB and others PLD 2002 SC 728.
(8) Multiline Associates v. Ardeshir Cowas Jee and others 1995 SCMR 362.
(9) Rehan Hassan Naqvi v. Pakistan Defence Officers Housing Authority 2000 CLC 1535.
(10)Syed Tariq Sohail v. D.H.A. (2001 YLR 1193).
(II) The Commanding Officer, National Logistic Cell and another v. Raza Enterprises and others 2003 CLC 719.
8. Before concluding his arguments Mr. Kamal Azfar, learned counsel for the plaintiffs, states that in order to seek justice and not to capitalize on any action, the plaintiff would not persue his claim for damages/compensation.
9. Mr. Muzaffar Imam, learned counsel for the defendant No,1, has argued that the plots in question were allotted to the plaintiffs as a favour in violation of rules and on insufficient consideration which is violative of the allotment rules for such plots. He contended that the plaintiffs have already disposed of two plots and the action now proposed to be taken was with regard to the plots available with the plaintiffs. He has also clarified that although there is no provision for any action for freezing of plots under the rules or the by-laws of the K.D.A., the action was an initial and tentative step to the final action of cancellation of plots after due opportunity was afforded to the plaintiffs according to the decisions of Government of Sindh, Housing and Town Planning contained in their letter dated 28th May, 1997 which is cited with the permission of this Court. After referring to the relevant clauses of the lease deed, particularly clauses 16 and 28, Mr.Lmam proceeded to argue that there is no mala fide intentions on the part of K.D.A. The allotment was carried out in violation of the relevant rules and procedure being adopted at the relevant time and that the plots have been sold at the prevailing price fixed by the K.D.A. And not at the market value.
10. Ch. Muhammad Rafique, Additional Advocate-General appearing for Government of Sindh, defendant No,2, states that being a formal party as no claim has been sought against defendant No,2, he adopts the arguments of learned counsel for defendant No, I .
11. After advancing their respective arguments in sufficient details as noted above, and the reference to the case of Commanding Officer, National Logistic Cell (supra) of which I was also a member, learned counsel for the plaintiffs conceded that the effect of the promulgation of the Sindh Urban Land (Cancellation of Allotment, Conversion and Exchanges) Ordinance, 2001 as interpreted in the aforesaid decision is attracted to the present suit particularly the following paragraph which is reproduced as under:-- "8. Sections 3 and 4 of the Ordinance, which are the operative provisions may be reproduced as follows:--
3. Notwithstanding anything contained in any law for the time being in force or any agreement or judgment or order of a Court, but subject to other provisions of this Ordinance, the allotments, conversions or exchanges of urban State land obtained or granted for residential, commercial or industrial purpose at the rates of lower than the market value in violation of law or ban from 1st January, 1985 shall stand cancelled.
4. (1) Government may appoint a Committee for carrying out the purposes of this Ordinance.
(2) Where the Committee, after making such enquiry as deemed fit is satisfied that the allotments, conversions or exchanges of urban State land are obtained or granted for residential, commercial or industrial purposes at the rates lower than the market value in violation of law or ban, it shall determine the amount of loss caused to Government-and call upon the person concerned to pay such amount within the specified time."
9. Indeed the above provisions, in accordance with well-settled principle of interpretation of statutes need of be read together. Section 3 no doubt provides that allotments of State land at rates lower than the market value shall stand cancelled, but section 4(2) requires a Committee to make an enquiry for determining whether the allotment was made at a rate less than the market value which has been defined to mean under section 2(6) as the value of the land at the time of allotment. In other words, the cancellation under section 3, could, prima facie, take effect after market value at the relevant time has been determined by the Committee. It is equally important to keep in view that under section 4(2) even if the allotment is found to be in violation of the law or a ban on allotments the Committee is still empowered to determine the amount of loss caused to the Government and call upon the person concerned to pay such amount within a specified time.
It, therefore, appears that even in such cases the allotment is not to be treated as void ab initio but the allottee can acquire ownership rights after payment of the amount of loss caused to the Government within the time specified by the Committee."
12. Mr. Muzaffar Imam who has himself cited this decision also concedes to this position and the fact that the vested rights of the allottee are recognized to the extent specified under the said judgment followed by resort to be prescribed procedure for determination of market value of the property at the time of allotment. On being asked Mr. Imam could not point out if any specific formula has been worked out pertaining to the price of the industrial properties allotted in the year 1991. However, he contended that the matters are being considered on their own merits before the Committee constituted under the said Ordinance and after notifications have also been published in the newspaper calling upon the affected persons to approach the Committee.
13. The plaintiff may take steps for enforcement of his rights on payment of the dues of the market price and the allotment price as may be determined by the Authority constituted under the Sindh Urban Land (Cancellation of Allotment), Conversion and Exchanges) Ordinance, 2001 as held by this Court in the case of Commanding Officer, National Logistic Cell.
14. Accordingly, in view of the above with the consent of the learned counsel this suit is decreed to the extent of grant of injunction only in favour of the plaintiff but with no orders as to costs.