1. ' This order will dispose of the application filed by the plaintiff (C.M.A. 7342 of 1999) wherein the plaintiff has prayed for restraint order against the defendant from demanding/taking over possession of the suit property namely warehouse situated on Plot No,7-C, Group Warehouse Area Off Moulvi Tamizuddin Road, Karachi measuring 1940 sq. Yds. And from interfering in the plaintiff physical possession in any manner and demanding/charging from the plaintiff increase in the rental of Rs,1,900 per cent. Per annum as well as escalation charges or security deposit in pursuance of the letter dated 8-10-1998. The application is supported by affidavit, which has been opposed by the defendant through counter-affidavit of one Bashir Ahmed, Estate Manager -of the defendant.
2. 'Briefly the facts for the purpose of disposal of the application are that the suit property was on lease with the plaintiff for a period from 8-1-1976 to 26-1-1998 on the terms and conditions in the Indenture of Lease (P.1) with annual rental at the rate of 14.20 per sq. Yd. Per annum plus usual tax.
3. The plaintiff in terms of lease deed opted for renewal. The defendant through their letter dated 8th October, 1998 (P.12) asked for the information and documents and also terms for renewal of the lease for 25 years. Such as (i) the payment of Rs,5,21,587 as security deposit; (ii) Rs,10,000 as preparation charges of lease of the plot; (iii) rental at 321.57 per sq. Meter per annum with 7% escalation every year excluding all taxes. It is case of the plaintiff that he is running warehouse and rent is being accepted by the defendant at old rate even after issuance of aforesaid letter. The suit for declaration and permanent injunction has been filed with the following reliefs:-- "A. For a declaration that the plaintiff has valuable/vested rights in the suit property, namely warehouse situated on Plot No,7-C Group Warehouses Area, Off Moulvi Tamizuddin Khan Road Karachi measuring 1,940 sq. Yds. And that, under clause 20(v) of the lease (P.1), the plaintiff is entitled for renewal of the lease (P. 1 ) in her favour for 25 years commencing from 27-1-1998 on fresh reasonable terms which may be with a reasonable increase in the current yearly rent up to amount between Rs,70 to Rs,80 per sq. Meter per annum, without any yearly escalation charges thereon. B. For a declaration that the increase in the yearly rent by 1900% that is from the current rate of Rs,17 to Rs,321.57 per sq. Meter per annum proposed/alleged by the defendant, is arbitrary, unrealistic, unjustified, unreasonable, illegal and mala fide, and as such the defendant is not justified to impose such terms for renewal of the lease upon the plaintiff. C. For a declaration that the demand of 7% escalation charges per year on the yearly rent made by the defendant from the plaintiff is mala tide and beyond the scope of the original indenture of lease dated 12-5-1975 and as such the said demand is illegal and void, and the defendant is not entitled to claim any amount from the plaintiff on account of escalation charges. D. For a declaration that the demand of Rs,521,587 made by the defendant from the plaintiff on account of security deposit is mala fide and beyond the scope of the original indenture of lease dated 12-5-1975 and as such the said demand is illegal and void, and the defendant is not entitled to claim the said amount, or any other amount, from the plaintiff on account of security deposit. E. For specific performance directing the defendant to renew the lease in respect of the abovementioned suit property in favour of the plaintiff for 25 years commencing from 27-1-1998 with a reasonable increase in the current yearly rent which may be any amount between Rs,70 to Rs,80 per sq. Meter per annum, without any yearly escalation charges thereon. In the event of defendant's failure to do so, the Nazir may be directed to do the needful. F. For specific performance directing the defendant to prove all the necessary and basic amenities in respect of the suit property for the new lease period of 25 years commencing from 27-1-1998, as provided in the original indenture of lease dated 12-5-1975 such as internal roads, sewerage lines/system etc. G. For permanent injunction restraining the defendant from demanding and/or taking over possession of the suit property from the plaintiff, and/or from interfering in plaintiffs peaceful possession of the suit property in any manner whatsoever and/or from demanding/charging from the plaintiff the alleged increase of 1900% in the current yearly rent of Rs,17 per sq. Meter per annum, as well as the alleged escalation charges or security/ deposit and/or security deposit, and/or from acting upon defendant's letter, dated 8-10-1998 in any manner whatsoever."
4. ' I have heard the learned counsel for the parties and also perused the pleadings.
5. 'Learned counsel. For the plaintiff has contended that the plaintiff has opted for renewal of the lease and the defendant has also agreed for renewal but the demand of the security as well as increase in the rental is unrealistic and unreasonable. It is further contended that the plaintiff is ready and willing for enhancement of the rental at reasonable rate. It has been further contended that the renewal of lease is subject to such terms and conditions as may then be decided in terms of clause (v) of the lease deed, which pertains to the renewal and contended that the terms and conditions cannot be unilaterally fixed but it has to be decided by mutual consent. The learned counsel referred the case of Mst. Sakina v. Karachi Metropolitan Corporation 1996 CLC 1080 wherein the following observation was made:-- "Coming directly now to the questions involved in the civil revision, merely because the lease relative to the main plot had expired it cannot be said that the erstwhile lessee had lost all rights in the leasehold. The latest renewal (Exh.P.3) which is on record and which probably is on the same pattern as the expired lease, would show that there is a vested right of renewal in the lessee under the indenture. What is more section 116 of the Transfer of Property Act, in clear and categorical terms, protects the rights of a tenant continuing in possession, following upon efflux of the lease period, irrespective of the nature of the lease and the rights and liabilities of the lessor and the lessee are to be governed on the basis of the expired lease, lessee being termed as the tenant governed on the basis of the expired lease, lessee being termed as the tenant holding over. The right accrues even if nothing more is involved than an assent of the lessor, express or implied, for the lessee to continue in possession. There is considerable case-law on the point but reference may only be made, as the learned counsel for the applicant have chosen to do, to Munshi Safar Ali v. Abdul Majeed AIR 1927 Cal. 279; Ramsundar v. Bataso Kuer AIR 1935 Pat.
271. Badal v. A.M. Bharosa AIR 1938 All. 649 and Abdul Ghaffar Khan v. Ghullah Jan PLD 1952 Pesh.
50. It follows, accordingly, that the concurrent findings of the Courts below that neither the plaintiff nor her predecessor had any right, title or interest in the main plot when the private defendants came to acquire their entitlement are not sustainable. The plaintiff-applicant did have, at all material times, rights in the main property for seeking declaratory relief covered by section 42 of the Specific Relief Act and consequential remedy could correspondingly be considered."
6. ' On the basis of the above observation, it has been contended by the learned counsel for the plaintiff that the plaintiff is in possession though the lease has expired and the defendant has accepted the annual rental and her position would be as the tenant holding over and can claim declaratory relief. It has been contended that the plaintiff has filed suit for declaration and injunction. The reasonableness of rental and security deposit claimed by the defendant has to be enquired into at trial. The defendant will get the same the rent, in case of their success whereas. If the plaintiff is dispossessed, her valuable and right would be lost . On above premises the learned counsel for the plaintiff has contended that the plaintiff has prima facie case and balance of convenience lies in her favour and if the injunction is not granted, she would suffer irreparable loss and referred the case of Abdul Aziz Tayeb v. Trustees of the Port of Karachi 1984 CLC 2393, wherein the following observation was made:-- "Learned counsel for the plaintiff contends that the lease granted to the plaintiff by defendant is still valid and subsisting as after service of notice of suit, the defendant accepted the rent from plaintiff for the period subsequent to the notice. It is not disputed by the learned counsel for the defendant that the lease between the parties is governed under the provisions of Transfer of Property Act. It is,.
7. However, contended on behalf of defendant that more acceptance of rent by the defendant, in the circumstances of the case, did not amount to waiver of notice within the meaning of sections 112 and 113 of the Transfer of Property Act. It is urged that the rent was accepted by the defendant after institution of ejectment proceedings against the plaintiff and therefore, the case is covered under the provision to section 112 of the Transfer of Property Act. The present material on the record, however, does not disclose the date on which the defendant applied for eviction of plaintiff from the premises to the Authorized Officer under Ordinance XXIX of 1962. Therefore, on the basis of present material it cannot be said that the defendant accepted rent from the plaintiff for the period subsequent to the notice of eviction which was after institution of ejectment proceedings against him. Therefore, the plaintiff prima facie has succeeded in showing that the lease granted in his favour is still subsisting. The lease in favour of the plaintiff is valid up to 14th March, 2004 and whether it was validly cancelled by the defendant on account of the alleged breach of covenant on the part of the plaintiff is yet to be established at the trial of suit. The effect of acceptance of rent by the defendant subsequent to the date of notice of forfeiture will also be determined finally at the trial of the suit in the light of evidence which may be produced by the parties. For the present I find that the plaintiff has made out a prima facie case for grant of injunction. The balance of convenience is also in favour of the plaintiff and he is likely to suffer irreparable injury if the grant of temporary injunction is withheld as he may be dispossessed from the premises in the meantime while the lease in his favour prima facie, is still subsisting."
8. ' On the above observation, it has been contended that the rent has been accepted after the letter (P.12) and the plaintiff is ready and willing to pay and what would be the reasonable increase has to be determined by the Court, as such he prayed for the injunction against the defendant.
9. 'Conversely, learned counsel for the defendant contended that the Board has power to deal with the property in terms of section 18 of the K.P.T. Act as such Board has power to fix the terms and conditions for renewal. The Board on written request of the tenant within six months before expiry of the term, can renew the lease on term and on such term the covenant, condition to be decided in terms of clause (v) of the lease deed, which has been referred by the plaintiff's counsel as well. On the basis of clause (v) of the deed it has been contended by him that it is discretion of the Board to fix rental which, according to the learned counsel, was calculated on the basis of indexation by the State Bank. The learned counsel further contended that the plaintiff has no case for injunction as she is not willing for the increase in the rent as decided by -the Board. He referred the case of Hayee -Commercial Industrial Corporation v. Trustees of Karachi Port PLD 1986 Kar. 229 where distinction was drawn between tenants continued in possession after the determination of lease without consent of the landlord and tenant doing so with the landlord's consent. This case is of no help to the defendant's case, as the defendant has agreed for the renewal of the lease on the terms and conditions mentioned in their letter dated 18-10-1998. The defendants have accepted the rent even after expiry of the said period and after issuance of the said letter as such position of the plaintiff cannot be equated with tenant in possession without consent of the landlord.
10. 'I have considered the respective contentions of the parties. The plaintiff is running warehouse. She has opted for the renewal of lease in terms of lease deed. The terms and conditions to be settled are at variance. Plaintiff's contention is that same are to be settled mutually whereas; the defendant's plea is that Board has unilateral power to fix the terms and conditions. In such a situation, in my view the plaintiff has made out prima facie case in her favour and if she is ejected from the premises, she cannot be compensated in terms of money. I, therefore, allow the application as prayed provided that the plaintiff continues to deposit rent in terms of the expired lease agreement.