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Petitioner: UNITED BANK LTD. VS Respondent: MUHAMMAD AZIM AND ANOTHERs
Court Name: Sindh High Court Judge(s): Ajmal Mian, Tanzil-ur-Rehman Title: UNITED BANK LTD. vs MUHAMMAD AZIM AND ANOTHERs Case No.: High Court Appeals Nos. 55 to 57 of 1973; 17 and 20 of 1974, Date of Judgment:1984-11-18 Reported As: PLD 1985 Karachi 215 Result: Order accordingly
JUDGMENT
JUDGMENT ' TANZIL-UR-RAHMAN, J.-These are five High Court Appeals bearing Nos. 5', 56 and 57 of 1973 and 17 and 20 of 1974 which have arisen out of judgment dated 25-1-1973 passed by, a learned Single Judge of this Court in five consolidated suits bearing No, 243/1965, 25/1966, 26/1966, 45/1966 and 46/1966 as detailed below :- (i) Suit No, 243/1965-United Bank Ltd. v. Muhammad Azim and Pakistan Employees Co-operative Housing Society Limited, Karachi for declaration, injunction and possession of plot. (ii) Suit No, 25/1966-Muhammad Azim v. P. E. C. H. S., Zafiul Ahsan, A. A. Hassan, United Bank Ltd. And Agha Hassan Abidi for damages. (iii) Suit No, 26/1966-Muhammad Azim v. P. E. C. H. S. And United Bank Ltd. For declaration and damages. (iv) Suit No, 45/1966-Muhammad Azim v. P. E. C. H. S. For declaration and injunction. (v) Suit No, 46/1966 United Bank Ltd, v. Muhammad Azim and P. E. C. H. S. For possession, damages and in the alternative for the refund of Rs, 10,00,000. 2. The facts giving rise to the above appeals, briefly stated, are as under :- 3. The Pakistan Employees Co-operative Housing Society Ltd. (hereinafter referred to as the Society) was granted a large area of land measuring 1,268 Acres by the Government of Pakistan for the purpose of disposing of the same to its members, inter alia, for residential purposes. Besides plots were also reserved for commercial purposes and for providing public amenities and a Licence Agreement was duly executed and registered on 6-8-1958 (Exh. 57/1) between the President of Pakistan as Licensor and the Society as Licensee to carry out aforesaid purposes.
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4. The dispute in these High Court Appeals relates to a commercial plot bearing No, 1/2-D, measuring 4,519 Sq. Yds. Commonly known as Nursery Plot. The Society for the purpose of disposing of the said plot formed a Sub-Committee which in its meeting held on 10-5-1963 decided to invite sealed tenders for the sale of the said Nursery Plot (Exh. 30). Accordingly the tender notice was published in the daily newspapers providing, inter alia, that the tenders should reach the Secretary of the Society on or before 28-5-1963 and the same were to be opened in the public on the same day at 5-30 p. m. The tenders received by the Society under the said tender notice were opened on 28-5-1963 whereupon it was found that the highest offer was that of Habib Bank Ltd. At the rate of Rs, 185 per Sq. Yds. The second highest offer was from Messrs Rainbow Estate Agency at the rate of Rs, 177.25 per sq. Yard. On the same day after the tenders were opened, Messrs Rainbow Estate Agency submitted a letter dated 18-5-1963 to the Secretary of the Society wherein it was stated as follows :-- "That a couple of weeks back we wrote to your (Society) for the purchase of commercial plot known as Nursery Plot and our offer was Rs, 200 per Sq. Yard, but we came to know through your Society Officials that your honour considers that this offer is very low and you expect something more than that and, therefore, to get a better price you called tenders for the sale of the said plot. ' Now today after opening the tenders the highest offer received by you was Rs, 185 per Sq. Yds. And perhaps you are willing to sell it on the same price, therefore, we would request your honour to please consider our case wholeheartedly and for the benefit of the Society please give us the priority as our first offer of Rs, 200 stands still." ' The Society, however, decided in its meeting held on 8-6-1963 to sell the plot by negotiation to get a higher offer. For that purpose it appointed a Negotiation Committee. An effort was, therefore, made by the said Committee that the Habib Bank Ltd. Might raise its offer but the representative of Habib Bank Ltd. Did not raise it beyond Rs, 185 per Sq. Yard as already offered by it. Muhammad Azim for whom Messrs Rainbow Estate Agency was acting as agent, however, further raised his offer from Rs, 200 per Sq. Yard to Rs, 201 per Sq. Yard because the members of the Negotiation Sub- Committee insisted on increase. The Negotiation Committee in its meeting held on 20-6-1963 (Exh. 31) accepted the offer and agreed to allot the said plot to Muhammad Azim at the rate of Rs, 201 per Sq. Yard. A letter was accordingly issued by the Society on 1-7-1963 (Exh. 22) to Muhammad Azim intimating him that the Society had agreed to allot him the said plot at the rate of Rs, 201 per Sq. Yard for the purpose of constructing spacious and decent single unit building on the terms and coalitions notified in the tender. Muhammad Azim paid the price of the said plot in the sum of Rs, 9,08,319 being the full and final payment of the said plot. The Society issued a formal allotment letter, dated 30-7-1963 (Exh. 24) to Muhammad Azim. The plot was demarcated, site plan was issued and possession was handed over to Muhammad Azim as alleged by him (Exh. 55/1). Muhammad Azim by his letter, dated 17-9-1963 (Exh. 25) sent a proposed Sub-Division Plan of the said plot to the Society to be forwarded to the Karachi Development Authority for its approval which was accordingly forwarded by the Society to the Karachi Development Authority. Later on, Muhammad Azim informed the Society by his letter (Exh. 26) that after the Sub-Division Plan was submitted to the Karachi Development Authority through the Society, he had received a letter from the K. D. A. Stating that the Society had unauthorisedly sold the said plot (copy of the letter of K. D. A. Enclosed). It was, therefore, requested that an early reply may be given by the Society to the K. D. A. As well as to him for his satisfaction whether the Society was authorised to do it or not. The matter was then discussed in a number of meetings held by the Chairman and members of the Society with Mr. Ahmed Ali, the Town Planner of K. D. A. Wherein finally it was decided in the meeting of the Managing Committee of the Society held on 25-2-1964 (Exh. 34) that a strip of 30 feet of land be taken out along the 20 feet roadside near from the said Nursery Plot in between Nursery Area and `Khayam' Cinema and that may be earmarked as parking space. It was further proposed that
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in return of this 30 feet strip of land (out of the Nursery Plot already allotted to Muhammad Azim) the K. D. A. Will allow him an additional floor on the building to be built on the Nursery Plot. Besides he will also be allowed to make some garrages and shops in the basement of this slope-like Nursery Plot. The Managing Committee in its meeting held on 16-3-1964 formed a Sub-Committee for the purpose to discuss the matter with Muhammad Azim on the subject. The said Sub- Committee in its meeting held on 25-5-1964 (Exh. 35) discussed the matter with Muhammad Azim. The relevant minutes of the said meeting read as under :- "Mr. Azim at the outset insisted that either the entire money which he paid was blocKed for more than nine months and was not giving any remuneration to him be returned or the cost of the strip which he was required to surrender for car parking should be refunded. After lengthy discussion, however, he agreed that :- ' Society should make an attempt with the K. D. A. To get the width of the strip reduced to 20 ft. If this was not possible he would even agree to surrender a strip of 30 ft. Width provided the Society could make the K. D. A. To agree to accept a plan of the building where the strip would be used as a corridor for car parking. In other words he should be allowed to construct the first floor for residential flats etc. The height of the corridor would be between 8 and 10 ft. As the building plan would necessitate. As the surrender of the land involved an amount of more than one lac rupees as according to Mr. Azim the ground floor was very valuable for the constructing of shops etc., he should be allowed division in some other form also. For this Mr. Azim suggested the following :- ' He would submit a plan for the construction of a three-storey building. The K. D. A. Should allow the extra storey as a special case. Further, if the plots were sub-divided the Society should not charge any fee of the plots for the first transfer. The Society should also agree to the sub-division of the plots. ' The above was agreed to subject to the approval of the Managing Committee and the K. D. A. Mr. Gauhar was requested to see the Town Planner in this connection in order to obtain his approval to the proposal after it is concurred by the Managing Committee." 5. Muhammad Azim on its own also tried to get the plot sub-divided and in this connection he wrote a letter to the Ministry of Works at Islamabad but the permission was refused. On this he wrote a letter, dated 15-9-1964 (Exh. 55/17) to the K. D. A. Enquiring certain preliminaries for submission of a building plan by him to K. D. A. For approval. The K. D. A. Never attended to these queries. The Society, however, issued a letter, dated 2-1-1965 (Exh. 44) to Muhammad Azim whereby the allotment of the said plot was cancelled which reads as under :- "Regd. A/D. ' Mr. Muhammad Azim S/o Haji Barket Ali, C/o M/s. Rainbow Estate Agency, Central Commercial Area, P. E. C. H. S. Ltd., Karachi. ' Sub : Allotment of commercial plot known as 'Nursery Plot' adjacent to Khayam Cinema in P. E. C. H. S. Ltd., Karachi. ' Dear Sir, ' This is refer to the meeting held on 25-5-1964 at 5 p. m. In Office of the Society with your representative on the above subject and also to the subsequent discussions the undersigned had with you from time to time. In view of the difficulty explained by you in the meeting the above deal is hereby cancelled as desired. ' You are, therefore, requested to see the undersigned for collection of cheque on surrender of challans duly discharged. Yours faithfully, (Sd.) A. A. Hassan. 2-1-1965. Hony. Secretary, P.E.C.H.S. Ltd."
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' This intimation of cancellation was immediately attended to by Muhammad Azim by serving a legal notice dated 5-1-1965 on the Society challenging its action. 6. On the same day the said plot was allotted to United Bank Limited (hereinafter referred to as the Bank) on a sale consideration of Rs, 10,00,000 and an allotment letter, dated 2-1-1965 (Exh. 57/1/7) followed by Certificate of Demarcation and possession of plot, dated 9-1-1965 (Exh. 57/1/9 A and 57/1/10) was also issued to the Bank. It appears that on 12-1-1965 when some officer of the Bank alongwith one Chowkidar namely Muhammad Sharif tried to take possession of the said plot, a report was lodged by Muhammad Azim with S. H. 0, Firozabad P. S. A. Direct complaint under section 448, Cr. P. C. Was also filed by him in the Court of IInd Additional City Magistrate. However, the cancellation of the allotment of Muhammad Azim, its subsequent allotment in favour of the Bank and an attempt to take forcible possession of the said plot led to the filing of a number of suits, as referred to above, by the parties which were heard and decided by a learned Single Judge of this Court by his judgment dated 25-1-1973, whereby Suit No, 243/1965 was dismissed with costs to be paid to defendant No, 1 Muhammad AziM only. Suit No, 25/1966 was dismissed with no order as to costs against defendants Nos. 1-4, however, the plaintiff was ordered to pay to defendants 2, 3 and 5 the cost of the suit. In-Suit No, 26/1966 the plaintiff was declared to be lawful purchaser and allottee from defendant No, 1 of the plot and in due possession thereof with all rights and entitlement as purchaser and allottee and with full rights to get the document of lease or grant from defendant No, 1 and that the Letter of Allotment dated 2-1-1965 issued by the Honorary Secretary of the Society to the Bank was declared illegal, void and of no effect. Defendants Nos. 1 and 2 were perpetually restrained from taking possession of the aforesaid plot from the plaintiff. Defendant No, 1 (Society) was also adjudged to pay the plaintiff a sum of Rs, 3,83,765/18 on account of damages at the rate of 6% per annum on the amount of Rs, 9,08,319 from 10-1-1966 upto the date of Decree and the defendants also to pay to the plaintiff the cost of the suit. In Suit No, 45/1966 it was declared that the defendant (Society) had no legal right to take forcible possession of the plot in question from the plaintiff (Muhammad Azim) as the plaintiff had paid full price to the defendants (Society) and thereafter the defendants demarcated the said plot and handed over its vacant possession to the plaintiff and that the defendants have no legal right to allot the said plot to any third party. The defendants, their servants, representatives and employees were also perpetually restrained from interfering with the legal possession of the said plot except in due course of law and not to allot the said plot to any of the third party. The defendants were also ordered to pay the costs of the suit to the plaintiff (Muhammad Azim). Suit No, 46/1966 was dismissed with costs to defendant No, 1 (Muhammad Azim). 7. We heard at great length Mr. Abid Japanwala, fired counsel for the Bank, Irtiza Hussain Zaidi, learned counsel for the Society. Messrs Khalid M. Ishaq and Ahsan Rizvi, appeared for Muhammad Azim. 8. Mr. Abid Japanwala raised a number of contentions, namely, (1) The allotment made by the Society in favour of Muhammad Azim was subject to certain conditions including obtaining No Objection from K. D. A. As the Society was not authorised to allot the plot in question without the sanction having been obtained by the Society from K. D. A. ; (2) The allotment made in favour of Muhammad Azim was provisional as no lease has so far been granted to the Society by the Government of Pakistan ; (3) Muhammad Azim committed forgery by adding letter `s' in the Allotment Letter dated 1-7-1963 (Exh. 57/1/24) which has changed the nature of allotment; (4) Allotment was procured by Muhammad Azim fraudulently; (5) Possession was never given to Muhammad Azim ; and (6) Allotment made and possession given to the Bank was valid. 9. The foremost question which has arisen in this case is whether the Society had the power to allot. According to Mr. Abid Japanwala the Society could only pass a resolution to allot this plot to Muhammad Azim or for that matter anyone else but it was subject to the blessings of K. D. A. In
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support of his contention he relied on Exh. 57/1/25 and invited our attention to the following paragraph appearing at page 529 of the Paper Book :- "Now, therefore, it has been decided to issue a fresh licence to the P.E.C.H.S. Ltd., whereby whilst the work of development and land management will continue to remain with the P.E.C.H.S. And be its responsibility, the Karachi Development Authority will exercise effective control over the Society under the Karachi Development Order of 1957, generally and especially as mentioned hereunder :" ' He also invited our attention to paragraph 3 of the same Exhibit at page 538 which reads as under :- "Every building plan shall be approved by the Karachi Development Authority and a completion certificate obtained from K. D. A. In accordance with the provisions of Chapter 5 of K. D. A. Order before the lease is issued and registered." ' We are afraid, the contention of the Mr. Abid Japanwala that the allotment of the plot made by the Society was subject to the No Objection from the K. D. A., is entirely misconceived. The Society is competent to allot the plot of land under the terms of the Licence Agreement executed between the Society and the Government of Pakistan. K. D. A. Is to exercise effective control over the Society under the Karachi Development Order of 1957 generally and especially as mentioned in the said Exhibit which, inter alia, specifically provides that every building plan shall be approved by the K. D. A. And a completion certificate obtained from K. D. A. In accordance with the provisions of Chapter 5 of K. D. A. Order, before the lease is issued and registered (in favour of individual allottees). The K. D. A. Is responsible for planning and development which has no direct bearing or relevance to the power of allotment of a commercial plot which is an issue in the cases before us. The embargo, as argued by Mr. Abid Japanwala, is not backed by any term of the Licence Agreement executed between the President of Pakistan and the Society nor any provisions of the K. D. A. Order of 1957 can be invoked to support that plea and, in fact, Mr. Abid has not been able to cite any provision of K. D. A. Order in support of his plea. We may, however. State that the K. D. A. May come into picture only if there is a deviation from the layout plan approved by the K. D. A. In the instant case it is nobody's case that the layout plan in the matter of allotment of the plot in question, was at all deviated. 10. The contention of Mr. Abid Japanwala that in the case of the Bank such No Objection to the allotment of the plot made by the Society in favour of the Bank was issued by the K. D. A., does not help him as it was not at all necessary for the Society to be subjected to such condition of having No Objection from K. D. A. For making allotment. As would appear from the facts on record the K. D. A., though at one time appears to have taken an objection to the allotment as having been made unauthorisedly by the Society to Muhammad Azim, but later on objection does not seem to have been pressed by the K. D. A. When K. D. A. Itself came out with the proposal of allowing Muhammad Azim to have additional one floor in addition to constructing some garrages and shops in the basement, on taking out 40 feet strip of land from the said plot. It is also pertinent to note that when the matter was taken up with the Ministry of Works, Government of Pakistan, Islamabad, the K. D. A. Failed to produce before the Government any undertaking given by the Sociely that it will seek No Objection for making allotment of the plot in question, the Society's stand before us was that it had requisite power to allot. This plea of the learned counsel for the Bank is, therefore, rejected. 11. The second contention of the learned counsel for the Bank that the allotment was provisional inasmuch as the Society was merely a licensee is also without any force. Admittedly the Government of Pakistan allotted 1,268 acres of land to the Society as a licensee. The Society was required to divide the land into plots and then to issue sub-licensees in respect of the plots to the individual allottees of the Society. After the sub-licensees has constructed buildings on their plots and made all payments in respect of their lands, they were entitled to obtain directly from the
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Government of Pakistan registered leases in their favour. The Government of Pakistan and the Society under the licence agreement contemplated the construction of building on the land and, therefore, the licence was for building purposes which was intended to be permanent. 12. In a case reported as Kalimuddin Ansari v. Director, Excise & Taxation and another (1) the Licence agreement came under scrutiny and the Honourable Supreme Court observed as under / "On a consideration of the various provisions of the agreement in question, coupled with the fact that the Government have not only allowed the appellants and other sub-licensees to construct masonry building on the lands but also expressly provided in the agreements that on the completion of the buildings the sub-licensees shall be entitled to obtain a registered lease from the Government and the conduct of the parties, in treating the agreement as one for lease in all respects, I have no doubt that for all practical purposes the sub-licensees have become the holders of a permanent lease." 13. A Division Bench of this Court consisting of Muhammad Haleem, J. (as he then was, now Chief Justice of Pakistan) and Z. A. Channa, J. (as he then was) in the case Haji Noor Muhammad and others v. Karachi Development Authority (2) following the above-cited Supreme Court decision PLD 1971 SC 114 as well as another judgment of the Supreme Court reported as Abdul Bhai v. Muhammad Ahmed Din (3) observed as follows :- "Mr. Nasir Khan also faintly attempted to argue that under the terms of the allotment and the allotment regulations of the 'K. D. A., the allottee is a mere licensee untill the allottee builds a house and executes a regular lease with the K.D.A. This contention has no substance in view of the decision of their Lordships of the Supreme Court in the case of Kamaluddin Ansari v. Director. Excise & Taxation PLD 1971 SC 114 that the allottees of the plots in the P. E. C. H. Society were neither licensees nor sub-licensees, though they had been so labelled in the agreements executed between the Government, the housing societies and the individual owners, for they had seal interest in the land allotted to them. The criterion that has been (1) PLD 1971 SC 114 (2) PLD 1975 Kar. 373 (3) PLD 1964 SC 107 laid down by their Lordships of the Supreme Court in the case of Abdul Bhai v. Muhammad Ahmed Din PLD 1964 SC 107 for distinguishing between a lease and a licence is whether any right in immovable property itself, i, e. a right in rem, has passed to the person concerned. In this case clearly a right in rem in respect of the plot has passed to the allottee." 14. We may also refer to a Single Bench decision of this Court Nasra Sultana v.. Habib Bank Ltd. And another (1) wherein it was observed that the allotment made by K. D. A. Is not a licence simpliciter for the allottee, has a right to be put in possession of the plot on payment of second instalment, raise constructions thereon and on payment of full occupancy value the K. D. A., was bound to give 99 years lease to the allottees. 15. In the instant case there is an agreement between the parties that a 99 years' lease will be executed in accordance with the terms and conditions of the licence after the building is constructed. The mere fact that the Society, as against the allottee, is merely a licensor, does not make the allotment provisional as it is not a case of licence or allotment simpliciter, but a case of transfer of plot with possession against full payment of price A agreeing to execute a 99 years' lease in favour of the allottee (Muhammad Azim) as stipulated in the terms and conditions mutually agreed. In any case, the doctrine of part performance under section 53-A of the Transfer of Property Act, 1882 will also be applicable in the case. Refer Pakistan Employees Co-operative Housing Society Ltd. v. Mst. Anwar Sultana and others (2). 16. The third contention of the learned counsel for the Bank that a forgery committed by Muhammad Azim by adding letter 's' in the Allotment Letter which was beneficial to him, has changed the nature of allot ment which has vitiated the entire contract is also without any
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substance. The contract being valid ab initio the subsequent event of adding the lette `s' will not turn it to be void or voidable, even if it is assumed that the letter 's' was added by Muhammad Azim. The contract, nevertheless, will remain enforceable in terms of its original_ condition of constructing a "single unit building", as the nature of allotment has not undergone any change. In any case, the allotment made in favour of Muhammad Azi was not repudiated by the Society on the ground of this alleged fraud because, according to the Society, the allotment was cancelled "at the desire" of Muhammad Azim himself. So, this plea, even otherwise, is not available to the Bank or the Society for legalising its action of the cancellation of the allotment in question. 17. Learned counsel for the Bank. To support his fourth contention that the allotment was obtained by Muhammad Azim fraudulently, has urged that the tender of the Rainbow Estate Agency was at the rate of 177.25 per Sq. Yard, whereas the tender rate as offered by Habib Bank Limited was Rs, 185 per Sq. Yard, which was raised to Rs, 205 per Sq. Yard by the Habib Bank Limited. According to him, Muhammad Azim manoeuvred in getting the plot allotted to him at the rate of Rs, 201 per Sq. Yard only. The contention is not at all supported by the facts on record. It is on record that the Society at first tried its level best (1) PLD 1965 Kar. 608 (2) PLD 1969 Kar. 474 (D. B.) to dispose of the said plot by private negotiations and then as a last resort the tenders were invited. But before the tenders were invited Messrs Rainbow Estate Agency had offered Rs, 200 per sq. Yard for the said plot. However, in response to tender notice, 63 only three tenders were received first from Habib Bank Ltd. Offering the rate at Rs, 185 per sq.…
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