2017 PLP 210 (CLCN)

MAHMOOD AHMED KHAN, J.

This suit has been filed by ICI Pakistan Limited against Karachi Metropolitan Corporation for Declaration, Injunction and Specific Performance.

2. The case as made out by the Plaintiff, in abbreviation with the required details, is that the Plaintiff claims to be lawful successor of the former Imperial Chemical Industries (Pakistan) Limited have purchased on or about in March 1968 the plot bearing Survey No.2, Sheet CL-7, (also referred to as No.235, E.I. Lines) measuring 3333 square yards situated in Civil Lines Quarters, Karachi, along with a residential bungalow constructed thereon from Kevalram Dayaram Shahani, acting as trustee and attorney of Dewan Metharam Dharamda (Public Charitable) trust, under the sale and assignment of registered lease deed, dated 22.03.1968. It is further stated that first predecessor-in-title namely Dewan Metharam Gidumal had obtained from the Karachi Municipality the occupancy rights of the said plot under a Lease Deed dated 08.04.1895, effective from 14.10.1893 for a period of 99 years with the further right of renewal in perpetuity. It is further stated that in the said lease deed among other stipulations, a provision reads as under:-- "And further the lessee, his heirs, successors, executors, administrators and assigns covenants at the expiry or sooner determination of this lease as aforesaid or otherwise to surrender and deliver up to the lessors and their successors the said plot of ground together with all buildings and erections thereon which said buildings and erection shall on such surrender become the absolute property of the lessors and their sucessors. Provided always that if this lease shall not sooner determine then if on its effuxion by time the lessee, his heirs, successors, executors, administrators or assigns shall be desirous of receiving a new lease of the said premises at the end of the said term the lessors and their successors shall on payment of the premium fixed by them according to a general valuation of lands in the quarter in which the land the subject of this lease is, grant to the lessee, his heirs, successors, executors, administrators and assigns a new lease for a further term of 99 years and with all the same convenants, provisos and stipulations as are in these presents contained or expressed including this proviso for renewal, but reserving any such rent (whether the same be decreased or increased) as the lessors and their successors shall think fit to reserve on a general revision of assessment at the commencement of such period upon the lessee, his heirs, successors, executors, administrators or assigns executing a counterpart thereof and defraying all expenses attending the preparation of the new lease and counterpart." (Underlining by me for clarification) It is further claimed that the plot was purchased before expiry of aforementioned lease deed and the same has been in occupation of the Plaintiff as official residence of their Chairman. The plaintiff applied for renewal of lease deed/extension for the next successive period of 99 years for the said plot/property by letter dated 04.10.1992 along with copies of the various relevant/related documents of title etc. The Defendant for the first time by their letter No.DL/CCNT/RL/93/53 dated 16.02.1993 asked for certified copies of various documents regarding the said property. In addition, the Defendant claimed and demanded 'renewal of lease charges' said to be fixed by the Council vide C.R. No.344, dated 06.04.1989 read with Rules 15 and 24 of the Sindh Local Council (Land) Rules, 1975, as under:-

1. Premium @ Rs.1250 per sq. yd. Rs.41,71,250/-

2. Land Rent at revised rate of Rs.3 per sq. yd. per annum i.e. Rs.10,011 per annum (Arrears) --

3. Land Rent for current year of 1992-93 Rs.10,011

4. Mutation Fee Rs.12,000 Total: Rs.41,93,261/- It is further claimed by the plaintiff that in a similar case when the question of imposition of premium was objected to and agitated as not payable, the defendant referred the matter to the Law Department, Government of Sindh. The Law Department advised Defendant that the lease premium was unauthorized and invalid in law. This opinion/advice of the Government of Sindh is incorporated in the order passed by the Mayor of the Defendant in an Appeal No.3 of 1981 by Yousuf Ali in respect of plot No.43 S.R.7, Campbell Street, Karachi, holding the imposition of premium to be invalid and this opinion was also followed by the Defendant in the case of Murtaza Construction Corporation Ltd. in respect of Plot No.17, PR-2, Preedy Quarters, Karachi, held on lease under letter No.DLE/PR/959, dated 12.08.1981. The said opinion was also reiterated in the matter of property 'B-1 Lease' and communicated vide letter dated 11.08.1983. It is further claimed by the Plaintiff that the levy of premium for renewal of successive 99 years period of lease is totally arbitrary and illegal besides being contrary to and beyond specific terms of lease and that premium cannot be imposed in law and as such Plaintiff is not liable to pay the said amount or any part thereof. The Plaintiff further claims entitlement for renewal of lease for the next successive period of 99 years on the same terms as are contained in the lease deed on granting to and making payment of the annual rent, which may be assessed on the said plot as a general revision of assessment "annual rent" as available, to which the Plaintiff has always been ready and willing to pay the same. The Defendant, however, despite the same, imposed and demanded unauthorized and unavoidable demand as such further lease is being denied. The Plaintiff claims specific performance in the circumstances of the lease and also seeks the prayer of declaration that the subject resolution is not available in law and that the premium as claimed by the Defendant is not available and in continuation directions of specific performance in respect of the subject property.

3. In the written statement, filed by the Defendant, the suit was opposed on the ground inter alia that the Plaintiff has not applied for mutation and as such the suit is incompetent. The title of the predecessor-in-interest of the Plaintiff, however, is not denied along with the period as claimed by the Plaintiff. It is further claimed by the Defendant that under Rule 24 of Sindh Local Government Rules, 1975, the premium and revised land rent are chargeable at the time of renewal of expired lease. It is further claimed that for renewal of leases, premium as demanded is to be paid notwithstanding the lease itself and placed reliance upon the following:- (i) Rule 31(a) of rules for Management of Waste Land within Municipal Limits of Karachi made on 14.10.1929 providing that:- "Lease issued for 99 years on the expiry of the lease be renewed at the option of the lessee for the period of 99 years....... on condition of the lessee paying such premium and such revised amount of land rent as may be fixed by the Municipality and sanctioned by the Commissioner in Sindh on terms and conditions of the original lease ..........." (ii) Rule 24 of the Sindh Local Government Rules, 1975 providing for renewal of lease as under:- "The council may in its discretion renew the lease for a period of 99 years in the certified developed quarters on the further condition that the Lessee shall pay such premium and such revised land rent as may be fixed under those rules." The said defendant also claimed that the plaintiff has willfully avoided to pay the levy fixed. The said defendant exerts its right to demand the amounts of premium, revised land rent and mutation fee. It is further claimed by the said defendant in support of his contentions as follows:- (a) That the Rules framed after grant of lease providing for payment of premium, for renewal of lease, are deemed to be part of the statute and have force of law. (b) There is no estoppel against the statute and correct interpretation of law can always be given effect to and as such law does not debar KMC from levying premium for renewal of lease. (c) On full consideration of the relevant law and its application to renewal of leases the defendants have come to the conclusion regarding the liability of the plaintiffs to pay premium for renewal of the lease hence the demand has rightly been raised on the plaintiff. (d) Order dated 12.08.1981 referred to by the plaintiff was passed on the basis of erroneous opinion and erroneous order does not create vested rights and can also be revised and recalled. The defendants are competent under law to withdraw, cancel or vary the erroneous order passed on erroneous interpretation of law/wrong opinion and that there is no estoppel against the statute. The defendant objects the claim of the plaintiff as misconceived and prays that the suit is liable to be dismissed.

4. The following consent issues filed by the parties were adopted by the Court vide order dated 18.09.1994:- I. Whether or not the defendants are lawfully entitled/authorized to enhance the premium and rate of Land Rent on the renewal of the lease for a further period of 99 years? II. Whether the alleged Resolution No.344 dated 6.4.89 was validly and lawfully passed? If not, to what effect? III. What is the effect of the opinion of the Law Department, Government of Sindh in respect of enhancement of premium and land rent etc., in an identical case and the order passed by the Mayor of the Defendant dated 11.07.1981? IV. Whether or not the opinion, the order and subsequent affirmation/confirmation of the legal position in 1983, having not been disputed and challenged have attained a binding finality? V. Whether or not the plaintiffs are entitled to the renewal of lease for a further period of 99 years on the same terms and conditions as to the premium and land rent etc., as contained in the Document of Lease dated 8.4.1895? VI. What should the decree be?

5. The parties led their evidence on commission. Saeed Amjad Ali, the Assistant Manager General Services of the Plaintiff filed his Affidavit-in-Evidence and was examined. He produced his Affidavit -in-Evidence as Ex.P/1, Deed of Sale as Ex.P/2, Letter dated 04.10.1992 as Ex.P/3, Letter dated 16.02.1993 as Ex.P/4, Order passed in Appeal No.3/1981 as Ex.P/5, letter dated 12.08.1981 as Ex.P/6 and special power of attorney as Ex.P/8, the said witness was cross-examined.

6. On behalf of the defendant Ghayasuddin, Altaf Ahmed (wrongly stated as Altaf Khan as said in the deposition) and Muhammad Mazhar Khan filed their affidavits-in-evidence along with documents being Exh.DW-2/ 1 containing 05 pages and DW 2/2 containing 14 pages with signature of the witness Muhammad Mazhar. The two witnesses i.e. except Ghayasuddin were cross-examined.

7. Learned counsel for the plaintiff has relied upon the written synopsis wherein he has referred to the documents of lease and taken the stance that the property was purchased by the plaintiff before expiry of the lease and as such the property was subject to the subsisting leaseholds and its terms and conditions. It is further contended by the learned counsel that the levy of premium for renewal of successive 99 years period of lease is arbitrary, illegal, contrary to and beyond the specific term of said lease. Learned counsel has further relied upon by the evidence led by the parties wherein the orders have been produced wherein the said premium has not been allowed on the ground that retrospective application of the resolution enforcing the premium is not available based upon the opinion of Law Department, Government of Sindh. It is also contended that during cross-examination the evidence whereby the plaintiff's witness has categorically stated that the plaintiff is not liable to pay the premium has not been disturbed and that the evidence as led by the defendant is not liable to be considered, as the same is in ignorance of the said witness about the proceedings (so stated by the witness).

8. No one had appeared on behalf of the defendants in the matter.

9. Having heard the learned counsel for the plaintiff and perused the record. At the present stage where the parties have come to end of the proceedings considering the material present I prefer to the recasting of the issues as:

1. Whether the plaintiff can be charged with amounts specially premium on renewal of lease as claimed by the defendant?

2. What should the decree be?

10. My findings with discussion are as follows:- FINDINGS Issue No.1 ................ Negative for premium Issue No.2 ................ Suit decreed as discussed REASONS ISSUE NO.1. Whether the plaintiff can be charged with amounts specially premium on renewal of lease as claimed by the defendant? It is an admitted position that on the renewal of lease amounts claimed by the defendant are (1) premium (2) land rent for the arrears and current year and (3) mutation fee. The plaintiff claims that the amount in accordance with the lease earlier granted are only available, whereas, it is the claim of the defendant that by way of resolution having support of Sindh Local Government Rules, 1975, payment of premium is available to be charged. The terms of lease is the basic contract between the parties which is subject to law, the case as made out by the plaintiff that the subject property was purchased during the subsisting period of lease as such premium is not available carries weight. Under the Sindh Local Government Ordinance, 1972 a certain formation is provided for imposition of land rent, although the Local Authorities are empowered to impose taxes. It is, however, to be considered that for a certain act two taxes cannot be imposed under different names (in the present case one with control and another without control). If a resolution as may have been passed, said to be based upon the relied upon rules which are found to be in violation of the available allowance as provided in the parent law/statue, their enforcement cannot have legal backing and protection. In the Sindh Local Government Ordinance, 1972, the matters of land rent are dealt with thoroughly, including that of any enhancement but the same are available as provided accordingly only, as otherwise the same will make the parent statue redundant along with the control provided thereto, i.e. deviating therefrom and cannot be available/protected in/by law. The word "premium" as is used in the lease is for the consideration of land rent so interpretable considering the applicable law. The enhancement of land rent or for that matter even a decrease is available only as provided along with a reasonable mutation fee to the defendant. This variation is also provided in the lease by the specific words "but reserving any such rent (whether the same be decreased or increased) as the lessors and their successors shall think fit to reserve on a general revision of assessment at the commencement of such period upon the lessee". The plaintiff not having agitated the matter of quantum of land rent which is otherwise to be regulated as provided, the same requires no consideration. The similar examples of other parties wherein the premium has been set aside by the Appellate Authority (the Mayor) is an additional element to the benefit of the plaintiff for which the defendant has failed to come up with any distinction, as discrimination is not available, the plaintiff cannot be charged with premium on this count also. This issue as such is found negative for premium only. ISSUE NO.2. What should the decree be? For the reasons and discussion as made above, the suit of the plaintiff is decreed to the extent of permanent injunction restraining the defendants from charging any amount from the plaintiff other than land rent and mutation fee along with cost of the suit in favour of the plaintiff. Office to prepare the decree accordingly. JK/I-21/Sindh Suit decreed.