Mutual negotiations

2013 YLR 2376 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

Rr.3 & 16(c)Constitution of Pakistan, Art. 199Constitutional petitionLease agreement, renewal ofAssessment of rentMutual negotiations

Contention of the petitioner (lessee) was that she obtained land on lease for five years w.e.f. 1-2-1996 which was to be renewed for another period of five years and period of lease was mutually extended for five years ending on 31-8-2007 @ Rs.36,603 per month, however, authorities promised that the period of lease would be further extended for another period of five years but instead of fulfilling the commitment, rent was increased illegally after completion of auction and a notice was served upon her to match the highest bid which she accepted under protest and rate of rent had been enhanced without having recourse to mutual negotiations

Validity

Parties were bound by the mutual agreement which was written in black and white

First agreement executed on 1-2-1996 was superseded by the subsequent lease agreements which became effective w.e.f. 1-9-2002 to 31-8-2007

Agreement was renewable on new terms to be mutually agreed by the parties and 10% annual increase on the new rate was also agreed

Rate of rent and new terms were to be settled with mutual consent

Neither of the parties had right to enhance the rent unilaterally nor to extend the lease without consent of the other party

Petitioner had withdrawn the petition filed under S. 20 of the Arbitration Act, 1940 and she had accepted the terms of award which inter alia showed that present rent was agreed with mutual consent

Rule 3 of the Punjab Local Government (Property) Rules, 2003 was without force because the Rules could not have retrospective effect and did not affect the rights and liabilities of the parties under the lease agreement mutually executed prior to the notification of auction

Petitioner had the right to remain in possession till 31-8-2012 and she was holding over so from 1-9-2012, she was required to pay the rent at the newly agreed rate of rent

No new rent was mutually agreed to, and the Punjab Local Government (Property) Rules, 2003 would become applicable on expiry of lease on 31-8-2012

Property was put to auction and offer was made for payment of lease money @ Rs.2,05,000

Authorities with fairness offered the petitioner to accept present rate or to vacate the park and she accepted under protest and paid the rent at the same rate

Petitioner being legal occupant had the right of first refusal of the highest bid and that was for her to decide whether present rate was acceptable to her or not and if she opted to retain the lease on present rate, the authorities would be under obligation to execute the fresh lease deed for a period of five years w.e.f. 1-3-2013 and in case she opted to vacate the premises, she would do so till 31-3-2013 after adjustment of the rent in view of the above rate for each year w.e.f. 1-9-2007

Constitutional petition was dis-posed of accordingly.