2004 PLP 1276 (CLC)

This suit has been filed by the plaintiff Messrs Zay Square Garments Industry against the defendant Messrs Sindh Industrial Trading Estates Ltd. (SITE) for declaration, specific performance and in the alternate for damages.

2. Brief facts, as per contents of the plaint, are that on application made by the plaintiff No. 1, the defendant allotted an Industrial Plot bearing No.F/583 situated at S.I.T.E Karachi, measuring 1‑00 Acre vide allotment order, dated 10‑7‑1991. An Agreement to Licence was also executed by the defendant in favour of plaintiff No. 1 on 27th June, 1992. The total consideration/premium for the said plot was fixed by the defendant at Rs.15,00,

000. The plaintiff paid Rs.1,00,000 on 4‑5‑1991 and a sum of Rs.6,52,600 being 50% of the premium and advance rent to the defendant through cheque and the remaining 50% premium was paid by the plaintiff in four equal six monthly instalments as allowed by the defendant vide post‑dated pay order, dated 12‑9‑1993. On 15‑9‑1993 pro forma plaintiffs Nos.2 and 3 entered into transaction to purchase the said plot from plaintiff No.1 and valuable consideration was paid by them to plaintiff No.

1. As the possession of the said plot was not handed over to plaintiff No. 1, in order to complete the necessary formalities an Irrevocable General Power of Attorney was executed by plaintiff No. 1 in favour of nominee of plaintiffs Nos.2 and

3. It is pleaded that subsequently it transpired that the said plot did not exit at the given location. When the abovesaid attorney of plaintiff No. 1 visited the site as per sketch, he found the plot to be under heavy encroachment and the encroachers claimed that plot came under jurisdiction of KMC and not the defendant. In fact the said plot was numbered by the KMC as 386 and was allotted in favour of two persons jointly namely Muhammad Ashraf and Muhammad Ejaz Ahmed who were running factories thereon. It is further averred that the plaintiffs made investment millions of rupees in purchase of machinery for setting up factory at the said plot which became rusted, obsolete and useless due to non‑use and lying idle and the plaintiffs have suffered loss of millions of rupees. It is further pleaded that attorney of the plaintiffs approached the defendant for change of location and allotment of an alternate plot and accordingly the defendant allotted land measuring' 1‑00 acre in Naurus Chowrangi, Karachi to plaintiff No.1 on 2‑9‑1993 giving it the same number as F/583. Grievance of the plaintiff is that defendant in an unlawful manner and without' serving any notice upon the plaintiffs, cancelled the said plot through a public notice published in the newspapers. The plaintiff No. 1 through its attorney sent numerous letters and representations but the defendant has not responded to the same. According to the plaintiffs, the defendant is under contractual and legal obligation to allot and hand over the peaceful vacant possession of Plot No.F/583 to plaintiff No.

1. Consequently the attorney got issued a legal notice dated 16‑11‑1999 to the defendant which was also not responded by the defendant,, hence the instant suit.

3. Consequent upon service of summons, appearance was put in on behalf of defendant. On request sufficient time was allowed to the defendant for filing written statement but the same was not filed, consequently on 6‑11‑2000 suit was ordered to proceed ex parte against the defendant. Accordingly the matter was fixed for final disposal. It may be stated that on various occasions the case was adjourned as time was being sought by the parties for amicable settlement. But there being none, the matter was heard.

4. The plaintiffs filed affidavit‑in‑eh parte proof of Muhammad Maher, attorney of plaintiff No. 1 and nominee of plaintiffs Nos.2 and 3, who reaffirmed on oath the facts stated in the plaint. He was duly cross examined.

5. I have heard the arguments advanced by Mr. Munir‑ur‑Rehman, Advocate assisted by Mr. Mustafa Hussain, Advocate on behalf of the plaintiffs and Mr. S.A. Samad Khan, Advocate appearing for the defendant.

6. It was mainly contended on behalf of plaintiffs that the plaintiffs were allotted a land at S.I.T.E., Karachi and such an agreement was executed between the parties on 27‑6‑1992 Consequent upon execution such agreement the plaintiffs deposited the total sum of Rs.15,00,000 with the defendants. However, in breach of terms of agreement defendants failed to hand over the possession of the plot. In anticipation of allotment of the plot, the plaintiffs made investment of millions of rupees in purchasing machinery for setting up a factory which became rusted, obsolete, and useless resultantly the plaintiffs sustained losses worth million of rupees. It was next argued that by nature of the documents, it was an agreement for lease as such vested right was created in favour of plaintiffs. In support of above arguments reliance was placed on (i) PLD 1964 SC 106, (ii) 1988 CLC 1261, (iii) PLD 1975 Kar. 608, (iv) PLD 1967 Kar. 158, (v) 2000 CLC 343 and (vi) PLD 1992 Kar. 94.

7. Conversely it was argued on behalf of defendants that by virtue of condition stipulated in the agreement in question, defendants were competent to suitably amend agreement in that, it was merely licence which was revocable and stood revoked. Since it was only licence and there was no contract, there was no occasion for enforcement of the same.

8. Arguments advanced by the learned counsel for the parties have been thoroughly considered and the evidence adduced on the record has been scrutinized.

9. Regarding the case‑law referred by learned Advocate for the plaintiff, it must be admitted at the outset, that the propositions of law decided therein are inescapable. However, to the hard-luck of the plaintiff the authorities cited are hardly applicable to the facts of the present case.

10. It has been admitted position that the plaintiffs were allotted the land for industrial purpose by the defendants. An agreement to licence was executed between the plaintiffs and defendants on 27th June, 1992. As provided in clause (1) of agreement, a lease for a term of 5 to 99 years may be agreed between the owner and plaintiffs subject, however, to the condition if the factory agreed to be erected shall be completed within the time allowed and in conformity with the terms and conditions mentioned in the agreement. According to clause No.23 the owner viz. defendants reserved the rights to suitability amend the agreement as and when considered necessary. It is also not denied that consequent upon entering into an agreement the plaintiffs have deposited a sum of Rs.15,00,000, however, the possession of the plot which was allotted to the plaintiffs could not be delivered to them, as the same was found to be encroached upon. It has come from the mouth of the plaintiffs' witness in the cross‑examination that in the first place licence was granted which was to be followed by a lease after the construction was raised. It was admitted by the plaintiffs that the plaintiffs were never handed over the possession of any plot. In the given circumstances, neither the lease was executed, nor it could be deemed to have been executed.

11. It is well‑settled that there are two provisions of law which stand in the way of transferring the interest in immovable property in favour of a party. Those provisions are contained in section 49 of the Registration Act and section 107 of the Transfer of Property Act. According to section 49 of the Registration Act, no document which is required by section 17 of the Registration Act to be registered and has not been registered can either create a right in immovable property or be received as evidence of such right. According to section 107 of the Transfer of Property Act, a lease for period of more than one year can be created only by a registered instrument and a lease even for a period of one year can be created either by registered instrument or by an oral agreement coupled with delivery of possession. The document upon which the plaintiff is relying is badly hit by both these provisions of law. According to section 17 of the Registration Act a document evidencing a lease for more than one year is compulsorily registerable. The arguments rendered on behalf of plaintiffs stressing that the documents executed by the defendants with them was, in fact lease, is devoid of merit in view of settled law that a lease as will appear from section 105 of the Transfer of Property Act, is a transfer of an interest in immovable property. Ownership of physical property consists of a number of rights and the owner of such property when creates a lease, transfer to the lessee a part of the right of ownership i.e. the right of enjoyment of the property, for a certain period for consideration.

12. Reverting back to the fact of the present case, the possession of the property was never delivered to the plaintiffs. In the circumstances, it could not be deemed to be a lease and as such specific performance thereof was out of question and not warranted by law. The document which is subject‑matter of the suit is merely licence which is revocable. In the given situation, the prayer for grant of specific performance was without merit. As such the same is declined.

13. However, the fact remains that neither the licence granted to the plaintiffs was revoked nor 'the amount so deposited by the plaintiffs was returned to them. Nothing has been brought on record by the defendants to demonstrate that at any moment they did show their willingness to return the amount of premium to the plaintiffs. The defendants have thus, unjustifiably appropriated to their own use the amount of defendants without any valid reason. The conduct of the defendants was regrettable. Undoubtedly they have rendered themselves liable to compensation to which the plaintiffs are definitely entitled. The plaintiffs have, though failed to adduce any evidence to substantiate their claim about quantum of damages sustained by them. Yet, the plaintiffs are entitled to the real worth of the amount deposited by them. Though no handy device could be found to determine the real worth, yet instead of passing a preliminary decree I have opted to decide the matter finally with a purpose to save the parties from being dragged in litigation any more.

14. In the circumstances, the suit of the plaintiffs is decreed in the sum of Rs.15,00,

000. The plaintiffs shall be entitled to a profit at the rate of 10% per annum from the date of deposit of amount with the defendants till the realization of amount. Besides the plaintiffs shall also be entitled to the costs. Before parting, it seems necessary to state that some cases which were referred by learned counsel for the parties were fully considered. While the legal propositions decided therein were inescapable, yet those were found to be distinguishable on facts, hence reference thereof was not deemed necessary. Suit is decreed in the terms stated above. H.B.T./Z-6/K Suit decreed.