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Petitioner: KARACHI MUNICIPAL CORPORATION VS Respondent: MOOSA M. ADAM AND 4 Other
Court Name: Sindh High Court Judge(s): Durab Patel, Imdad Ali H. Agha Title: KARACHI MUNICIPAL CORPORATION vs MOOSA M. ADAM AND 4 Other Case No.: Letters Patent Appeal No. 209 of 1965 Date of Judgment:1972-05-11 Reported As: PLD 1972 Karachi 571 Result: Appeal accepted
JUDGMENT
JUDGMENT DORAB PATEL, J.-According to the plaint, the respondents (who were the plaintiffs in the trial Court) are the tenants of the appellant of an open piece of land measuring 800 square yards at the corner of Lawrence Road and Haji Camp Road, Karachi. They had erected a superstructure on this plot and they had been paying for it to the appellant since 1950. Then, according to them, without any prior notice terminating their tenancy, the appellant threatened to eject them and demolish their superstruc--ture, therefore on these allegations, on or about 5-11-1960, they filed a declaratory suit against the appellant in the Court of the Second Sub-Judge, First Class, Karachi. The relief sought by them in this suit was a declaration and an injunction. The declaration sought was that in the events that had happened the respondents had become the tenants of the plot in their occupa--tion and that the appellant was not entitled to eject them or demolish the superstructures constructed by them on the demised plot, and the injunction sought was to restrain the appellant from evicting them. The appellant contested this suit and submitted that the respondents were unauthorised occupants of the land in their possession and it also denied their allegation that it had received rent from them. It also claimed in its written statement to have ejected them but without prejudice to this plea. It advanced the further submission that it was entitled, under the K. M. C. Rules and Martial Law Order No. 60, to eject them. 2. On these pleadings the first respondent examined himself on behalf of the respondents. He claimed that the respondents had been in possession of the plot in dispute since 1947 and he produced several receipts (Exhs. P-1/1 to P-1/19) and said: "These are rent receipts. Held peaceful possession up to 1960". Then in cross-examination he admitted that the respondents did not have any agreement in support of their plea of tenancy, but he said that the respondents had talks with
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the appellant's land Manager for the purchase of the plot in dispute. Thus the evidence produced by the respondents was, to say the least, on the meagre side, but presumably because the appellant did not wish to be left behind in the race to produce the minimum evidence possible, it also examined only one witness, its surveyor. This witness produced a plan which was intended to show that the site occupied by the respondents was on a road or on an area marked for a road. Unfortunately, this evidence was not given clearly, but it is sufficient to point out here that the witness admitted the respondents' allegation that they were being ejected without a notice. However he denied the respondents' allegation of tenancy and emphatically asserted that the appellant had never realised rent from them. 3. The learned Civil Judge held that the respondents had failed to prove their tenancy because, under the K. Dal. C. Act, a lease could be created only by a written document in the manner prescribed in that Act. However, despite this finding he held that the appellant was not entitled to eject the respondents without a prior notice. Nonetheless he dismissed the suit of the respondents because he held that it was barred under section 94 of the Basic Democracies Order of 1959. 4. Aggrieved by this judgment, the respondents filed an appeal against it in the District Court, Karachi and together with their appeal they had applied for interim relief. As their application in this respect was dismissed, they filed an appeal in the High Court against the dismissal of their application for interim relief, and when this appeal came up for hearing before a learned Single Judge, the learned Single Judge decided to transfer the first appeal of the respondents from the District Court to the High Court. Accordingly, he exercised his powers under section 24, C. P. C. But with the consent of the parties and transferred to himself the appeal filed by the respondents against the dismissal of their suit. Then it would, appear that the learned Single Judge was hearing a similar appeal against the Hyderabad Municipality, therefore he decided to hear both the appeals together and also gave notice to learned counsel to assist him amicus curiae. Thereafter he heard arguments at length in both the appeals for several days and as in the Court below, the appellant's plea was that it could grant a lease only in the manner prescribed under the Karachi Municipal Corpora--tion Act, 1933 (hereafter called the K. M. C. Act) and that as the respondents did not even claim to have such a lease their suit was fit only to be dismissed. A similar plea was raised by the Hyderabad Municipality in the appeal against it, but the facts in that appeal were very different. However, according to the learned Single Judge the plea thus advanced by the Municipalities had led to "a conflict between justice and the formalities of law" and he was of the view that Municipalities had to be estopped from relying on the relevant provisions of the Municipal laws, because they had been collecting rent from the respondents. I may therefore explain here that the rent alleged to have been paid by the respondents to the appellant in this appeal is Rs. 8 per month for 800 square yards of land in a busy commercial area. Learned counsel bad sought to meet the objections thus raised by the learned Single Judge by submitting that the relevant provisions of Municipal law on which they relied were mandatory, so that the alleged receipt of rent was immaterial. And in support of these submissions they had relied on the case-law of the High Courts of the sub-continent as well as English law. But the learned Single Judge dissented from the case-law cited, largely on the basis of decisions on estoppel against companies incorporated under the Companies Act, and I may further explain here that because he took the view that Municipal Corporations were no different from large commercial corporations, he held that the principles of estoppel applicable to commercial corporations were also applicable to claims against Municipal Corporations. Accordingly, he allowed the appeals before him by his judgment dated the 18-8-1965. The decision against the Hyderabad Municipality is not relevant and only the Karachi Municipal Corporation has come in appeal against this judgment. 5. Mr. Ghous Muhammad, who has argued this appeal with ability, took us through the relevant provisions of the K. M. C. Act as well as the Municipal Administration Ordinance, 1960, and submitted
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that the conditions prescribed therein for the execution of leases were mandatory and therefore the learned Single Judge had erred in holding that the appellant was estopped from relying on them, and in this connection he also took us through the case-law and submitted that the view of the learned Single Judge was contrary to the case-law of more than half a century and had caused chaos in the administration of Municipalities. I will now consider the arguments of Mr. Ghous Mohd , but as the appeal was decided against the appellant solely on the basis of estoppel, it is necessary to be clear about the meaning of an estoppel, and I would first consider this aspect of the case. 6. As the respondents have not pleaded any estoppel in their plaint, it is difficult to know what type of estoppel they rely on. But, at the highest, it could only be an estoppel by representation, therefore I would quote here the classic definition of an estoppel by representation given by Bower in his Estoppel by Representation, (1966 Edition), page 4: "From a careful scrutiny and collation of the various judicial pronouncements on the subject, of which no single one is, or was perhaps intended to be, quite adequate, and many are incorrect, redundant, or slipped in expression, the following general statement of the doctrine of estoppel by representation emerges ; where one person ("the representor") has made a representation to another person ("the representee") in words or by acts and conduct, or (being under a duty to the representee to speak or act) by silence or inaction, with the intention (actual or presumptive), and with the result, of inducing the representee on the faith of such representation to alter his position to his detriment, the representor, in any litigation which may afterwards take place between him and the representee, is estopped, as against the representee, from making, or attempting to establish by evidence, any averment substantially at variance with his former representation, if the representee at the proper time, and in the proper manner, objects thereto." Although the appellant denies the alleged tenancy claimed by the respondents, I will not even consider its evidence, and assume that the first respondent's evidence is true, but even so, does it make out any case of estoppel ? I have observed earlier that the first respondent claimed to have produced rent receipts. But although he claimed possession since 1947 in his evidence and since 1950 in his plaint, the so-called rent receipts produced by him relate to the period from and after 1954. Turning now to his evidence, he has merely said that the respondents had been "in possession since 1947 as tenants". 1n these circumstances, at the highest, it can be contended that the appellant, by giving the alleged rent receipts, had made a representation that it would accept the respondents as tenants. I may however point out that the question of the identity of the alleged representator is shrouded in mystery. Be that as it may, in order to succeed in a plea of estoppel, the party advancing this plea has also to show that it has suffered to its detriment or altered its position on account of the representation made to it by the opposite-party. Unfortunately, even if we overlook the fact that no plea of estoppel has been raised in the plaint, the respondents have not even attempted in their evidence to show how they had altered their position on account of the appellant's alleged representation, therefore as an essential ingredient of an estoppel was not proved. I do not see how the respondents can be permitted to raise this plea, and when I pointed out to Mr. Naqvi that the essentials of an estoppel had not been alleged even in evidence, learned counsel feebly requested that the case should be remanded to the trial Court. We refused this request because there is absolutely no justification for it. 7. I now turn to Mr. Ghous Muhammad's criticism of the judgment under appeal. I would repeat here that the view of the learned . Judge was that, as the appellant had created a tenancy In favour of the respondents it was estopped from repudiating their tenancy. Learned counsel's criticism of this finding was two-fold : that there was no tenancy and that there was no estoppel, and taking l first the question of tenancy, the only evidence in support of this finding is the first respondent's evidence and the so-called rent receipts which he produced. Unfortunately, on examination of
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these receipts (Exhs. P/1/1 to P-1/19), I find that the first four receipts contain the following words: "Licence fee for cabin rent". Confusing though these words be, they might be stretched to support a plea of tenancy, but all the other receipts, which are later receipts, only contain the- words "Licence for cabin rent". In these circumstances, Mr. Ghous Muhammad's submission that the learned Single Judge has misconstrued these receipts is correct. I am aware that the use of the words "Licence" and "rent" in a receipt is not always decisive. But as the burden was on the respondents to prove their alleged tenancy, I have no doubt that the evidence produced was not sufficient to prove this plea. 8. I now turn to the question of estoppel, and before I consider the provisions of the K. M. C. Act to which Mr. Ghous Muhammad referred us. I have to emphasise here that the first respondent has neither identified in his evidence the person or persons who had issued the receipts (Exhs P-1/1 to P-1/19) nor has he specified the person or persons who had granted them a tenancy. Mr. Naqvi however stated that the tenancy had been created by an oral contract with the appellant's Land Manager. As I shall presently show, this submission is not correct, but even if I assume for the sale of arguments that the respondents can be permitted to advance this submission, it will not help their case. I now turn to the provisions of the K. M. C. Act to which Mr. Ghous Muhammad referred us, and as the plea of the respondents is that their tenancy was created in 1947 or in 1950 it is only this Act which is relevant to their contention. 9. The only provisions of this Act to which we were referred are sections 55 and 56 and sections 229 and 230. Section 55 relates to the disposal of property belonging to the appellant other than waste lands and, for the purpose of this appeal, it is sufficient that the only officer of the appellant who is empowered to transfer such land is the Chief Officer, and that provided the annual premium or rent or both does not exceed Rs. 1,000. Section 56 deals with the disposal of waste lands and, according to it, waste land can be transferred "in accordance with the rules which have been made by the said Municipality . . . . ." This provision is not relevant as it is not contended that the plot in dispute is waste land. In any case, Mr. Naqvi has not referred us to any rules which would empower the appellant's Land Manager to transfer waste land, therefore, this section is of no assistance to the plea or rather the arguments of the respondents in this appeal. Section 229, on which Mr. Ghous Mohd. Relied, is important and reads as follows : "229.-(1) Every contract made by or on behalf of the Corporation shall be made in accordance with the provisions of Chapter VII of Schedule I. (2) No contract shall be binding on the Corporation unless it has been made in accordance with the provisions of the said Chapter." Section 230, in so far as it is relevant, reads as follows "230.-(1) Wherever it is prescribed that the permission of the Corporation is necessary for the doing of any act, such permission shall (unless it is expressly provided otherwise) be in writing. (2) A licence or permission given under this Act shall specify the period for which, and the conditions and limitations subject to which, it is granted, and shall be signed in the prescribed manner. (3) For every licence or permission a fee may be charged at such rate as shall from time to time be fixed by the Chief Officer with the previous approval of the Standing Committee. (7) The acceptance by or on behalf of the Corporation of the fee for a licence or permission shall not entitle the person paying the fee to the licence or permission. (8) Every application for a licence or permission, shall be addressed to the Chief Officer. Once again these provisions do not confer any authority what--soever on the appellant's Land Manager to transfer or alienate land. Additionally, reading the sections together, it is clear that a lease or a licence has to be executed in writing, otherwise it is void and of no effect against the appellant. Turning now to the rules framed by the appellant, Mr. Naqvi thought that rules 5 and 6
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contained in Chapter VII of Schedule I supported his argument. I cannot agree with this view. In the first place, these rules do not refer to leases and the plea of the respondents is that they are lessees and not licensees. And as I am not able to understand how these rules can lend any support to the case of the respon--dents, I would first quote them : "5. Every contract entered into by or on behalf of the Corporation and involving an expenditure exceeding two thousand rupees shall be in writing and sealed with the common seal of the Corporation. 6.-(1) Every contract under or for any purpose of this Act, shall be executed on behalf of the Corporation by the Chief Officer. (2) No such contract for any purpose which the Chief Officer is not empowered by this Act to carry out without the approval or sanction of some other Municipal Authority shall be executed by him until or unless such approval or sanction has first of all been duly given." Because rule 5 prescribes that a contract on behalf of the appellant shall be in writing and sealed with the appellant's common seal only when it involves an expenditure exceeding Rs. 2,000, Mr. Naqvi's submission was that, as the appellant had not produced evidence to show that the contract in question exceeded Rs. 2,000, it could not rely on this rule, and this was also the view of the learned Single Judge. With great respect, T cannot agree with it. On the plain language of the rule, it relates to contracts which involve expenditure on the part of the appellant and no expenditure was required in the present case ; therefore it has no relevance to the claim of the respondents, whether as lessees or as licensees. Secondly, the effect of rule 6 is that no contract whatsoever can be made on the appellant's behalf by its officers except by its Chief Officer. But as in the present case the plea of the respondents, even in evidence, is of an oral contract with the appellant's Land Manager, it is clear that the agreement on which they rely, even if true, is hit by rule 6, and as this rule has to be read with section 229, I have no doubt that it is mandatory and not directory. The result is that Mr. Naqvi's reliance on these rules is misconceived, and, on the other hand, I agree with Mr. Ghous Muhammad that the effect of these rules read with sections 229 and 230 of the K. M. C. Act is that the alleged agreement on which the respondents rely is null and void, and similarly the receipts on which they rely are hit by the express provisions of section 229. 10. I have also to observe here that similar provisions were contained in the Municipal legislation of the various provinces of the sub-continent and Mr. Ghous Muhammad's submission was that such provisions had always been held to be mandatory. This submission is correct. Thus nearly 70 years ago a Division Bench of the Bombay High Court held in Ahmedabad Municipality v. Sulemanji (I L R 27 Bom. 618) that the Provisions of the Bombay District Municipal Legislation regarding the execution of contracts by Municipalities were mandatory, not directory. Mr. Naqvi has not referred us to any decision of the Bombay High Court in which a different view was taken, nor am I aware of it. That has also long been the view of the Allahabad High Court Radha Krishna v. Municipal Board of Benares (I L R 27 All. 592). The view of the Madras High Court is the same, and I would only refer here to the leading case of that Court Raman Chetti v. Municipal Council of Kumbakonam (I L R 30 Mad. 290). That has also been the consistent view of the Calcutta High Court, and I may refer here to the classic judgment in Muhammad Ibrahimullah v. Commis--sioner for the Port of Chittagong (AIR 1927 Cal. 465) where all the earlier decisions of the Calcutta High Court have been discussed. The Sind Chief Court had also taken the same view in Bhumbo Metha Ram v. District Local Board (AIR 1940 Sind 199) and though this judgment was not cited before Inamullah. J., as he then was, he also took the same view in All Hussain v. K. M. C. (PLD 1957 Kar. 463). I am aware that the observations of Inamullah, J. In this case are obiter dicta, but the same view was taken by a Division Bench of the West Pakistan High Court in Dr. Fazal Din v. Municipal Committee, Lyallpur (PLD 1956 Lah. 916). Thus the trend of authority is clear, consistent, and uniform the formalities prescribed in municipal legislation with regard to the execution of contracts by Municipalities are
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mandatory and there can be no estoppel against them. The reasons for this are obvious : the Legislature's awareness of the frailties of human nature and the consequent possibilities of malverisation of public funds and assets, and the necessity of maintaining a record so as to ensure responsibility of municipal councillors to their electors. As was observed nearly a century ago by Lord Bramwell in Young v. Mayor ((1883) 8 A C 517), with reference to the requirement of a seal "the Legislature has made provisions for the protection of rate-payers. Shareholders, and others, who must act through the agency of a representative body, by requiring the observance of certain solemnities and formalities which involve deliberation and reflection. That is the importance of the seal. It is idle to say there is no magic in a wafer". 11. In my humble opinion, there is nothing improper or unjust in the view that there can be no estoppel against a statute, and I cannot understand how the learned Single Judge came to the conclusions that the appellant's reliance on the very statute by which it was created amounted to something improper because it was an insistence on the mere technicalities of law at the expense of justice. With respect, this criticism was unfair to the long line of eminent Judges who, for generations, have held that there can be no estoppel against a statute. I say this not to be derogatory, but because this further means that whatever the view of the learned Single Judge, on the principle of stare decisis at least, he should not have dissented from the settled law. 12. However, In dissenting from the long established view of the Courts, the learned Single Judge has relied on judgments of the Lahore High Court, on the principles of estoppel as applied by the English Courts, on the principles of American Jurisprudence and on Indian decisions, and I will now examine whether the law relied upon by the learned Single Judge was relevant to the question of estoppel against a statute. 13. The judgments of the Lahore High Court on which the learned Single Judge relied are Faqir Chand v. Municipal Committee, Ludhiana (155 I C 491), Muhammad Hussain v. Municipal Committee, Sialkot (AIR 1936 Lah. 689), Anant Ram v. Small Town Committee, Pundri (AIR 1937 Lah. 84). It is true that the Lahore High Court has in these judgments extended the principle of estoppel to Municipalities and so, although the facts in these cases are distinguishable, it can be said that they support the view taken by the learned Single Judge. However, as I have pointed out, the question of estoppel against a statute was considered by a Division Bench of the West Pakistan High Court in Dr. Fazal Din v. Municipal Committee, Lyallpur and the learned Judges held that even the requirement under the Municipal Laws that a contract by a Municipality could only be made by axing its seal to the contract was binding and that non-compliance with this provision rendered contracts by Municipalities void. Apart from the fact that this view was later re-affirmed by the West Pakistan High Court in Dr. Azeem Shad v. Municipal Committee, Multan (PLD 1968 Lah. 1419), the learned Single Judge erred in preferring the judgments of the Lahore High Court to that of a Division Bench judgment of the West Pakistan High Court. This he simply could not do. 14. I now turn to the English judgments on which the learned Single Judge relied. But as I have earlier quoted, the English Law of estoppel, as stated by Bower, I may, with advantage, quote here the relevant passage from Bower on the question of Estoppel against a Statute. At page 131 the learned author has stated :- "Just at it is a good affirmative defence to an action on a contract that it cannot be performed without directly contravening the provisions of a statute and that, by enforcing it or otherwise judicially treating it as valid, any Court would be sanctioning and condoning such contravention, so also it is a good affirmative answer to a case of estoppel by representa--tion that any closure of the representor's mouth would result in a like judicial recognition of, and connivance at, a statutory illegality. The private rights and interests of the individual must yield in such circumstances to the higher rights and interests of the State. In accordance with these paramount considerations of public policy, it has been held that no estoppel can be allowed which will preclude the representor
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from asserting, and bringing to the notice of the Court, the statutory illegality of such acts, proceedings, and instruments as are sought to be validated by the estoppel put forward. So no assumption of powers which are ultra vires of any person. Officer or corporation can be validated by the process of raising an estoppel against him who assumes them. A contract…
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