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Petitioner: Messrs PAKISTAN STATE OIL COMPANY LIMITED, through authorized officer VS Respondent: FEDERATION OF PAKISTAN, MINISTRY OF WORKS, through Secretary and 4 others
Court Name: Sindh High Court Judge(s): Muhammad Ali Mazhar Title:Messrs PAKISTAN STATE OIL COMPANY LIMITED, through authorized officer vs
FEDERATION OF PAKISTAN, MINISTRY OF WORKS, through Secretary and 4 others Case No.: Suit No, 1661 of 2008 C.M.A. No,11530 of 2008 and C.M.A. No,2665 of 2009 Date of Judgment:2010-09-03 Reported As: 2010 CLC 1843 Result: Order accordingly Judgment ORDER ' MUHAMMAD ALI MAZHAR, J.---This application is brought under Order XXXIX, Rules 1 and 2, C .P.C. The plaintiff has filed the instant suit for Declaration and Permanent Injunction with the following prayer:-- (i) For a declaration to the effect that defendant No, 4 shall become the dealer of the company and shall use the same site as after fulfilling the terms and conditions of the dealership agreement. (ii) For permanent injunction to the effect that defendant No,4 be restrained from using the site by creating dealership agreement with defendant No,5 as the plaintiff is a tenant of property bearing Nos.10-E and 11-E, Jahangir Road, Karachi. (iii) Cost of the suit. ' The bare bones leading to the present controversy as narrated in the plaint are that defendant No,1 leased out the Property bearing Nos.10-E and 11-E, Jahangir Road, Karachi to defendant No,2 with specific instruction to sublet the same to a petroleum company. Messrs Dawood Petroleum Company requested the defendant No,2 to grant sublease of the said plots for constructing a petrol pump. The lease was granted for a period of 30 years. On 29-12-1976, Messrs Dawood Petroleum Company was merged with the plaintiff. Before the expiry of the lease agreement, plaintiff received a letter from defendant No,2 intimating that the lease is going to expire. The plaintiff was further informed by such letter that the defendants had received several offers including highest offer of rent Rs,20,000 per month plus deposit of Rs,2 Million, therefore the plaintiff was asked either to vacate the premises or continue the lease on fresh terms and conditions. It is
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alleged that the plaintiff was threatened by the defendant No,2 for dispossession from the property on which the plaintiff had invested more than Rs,10 Million for construction of petroleum service station. The dealer of the Plaintiff filed a Suit No,1053 of 2001 in this Court which was dismissed while the Suit No, 1-031 of 2000 filed by the plaintiff was also dismissed on technical grounds as the plaintiff had not joined the Federation of Pakistan as party to the said proceedings. Plaintiff again filed a Suit No,565 of 2002 in this Court and prayed for declaration to the effect that defendants Nos.1, 2 and 3 are not entitled to call for tender for leasing out the suit premises and also prayed that they are not entitled to dispossess the plaintiff from the suit premises. On 17-12-2002, the said defendants made a statement that they will dispossess the plaintiff through due process of law and on the basis of such statement Suit No,565 of 2002 was disposed of Thereafter, the plaintiff was running the petrol pump through its dealer Naveed Sadiq, who expired and h is wife (defendant No,4) filed SMA No,35 of 2005 which was granted in'respect of the assets of late Naveed Sadiq. A settlement was reached between the legal heirs of the deceased Naveed Sadiq, on the basis whereof, the defendant No,4 became entitled to run the business and dealership in respect of petrol pump in question. The defendant No,4 applied to the plaintiff for execution of dealership license agreement for company's finance site, which was granted by the plaintiff. On 29-102008, the plaintiff wrote a letter to the defendant. No,4 calling upon her to deposit a sum of Rs, I Million as Dealership Security Deposit, which was a mandatory requirement. The defendant No,4 replied the said letter expressing her desire to convert the site into new vision and also requested the plaintiff to waive the condition of dealership security deposit as a special case as she was not in a position to pay the said amount, which request was not entertained by the plaintiff. On this refusal, the defendant No,4 contacted defendant No,5 to become their dealer who wrote a letter to the plaintiff to give NOC so that the defendant No,5 can take over the site. The plaintiff declined to give NOC and categorically informed that the plaintiff wanted to retain the site. After execution of dealership agreement by defendant No,4 with the plaintiff, the defendant No,4 is bound to pay Rs,1 Million as security deposit and if she did not want to pay the same, she has no right to continue as dealer of company and has to vacate the same. The defendant No,4 cannot continue as dealer without fulfilling the terms of the dealership agreement. Since the defendant No,4 is avoiding to honour the commitment, therefore the plaintiff has filed this suit. ' I have heard the learned counsel for the parties. The learned counsel for the plaintiff laid much emphasis that after the expiry of lease in the year 2002, they have become the statutory tenant and in this present suit a declaration has been sought that defendant No,4 shall become the dealer of the company and shall use the same site as after fulfilling the terms and conditions of the dealership agreement and besides the aforesaid declaration, the plaintiff has also prayed that permanent injunction against defendant No,4 be issued restraining her from using the site by creating dealership agreement with the defendant No,5. So far as the relief relating to declaration is concerned, the plaintiff has filed a draft agreement of dealership for plaintiff's financed site and according to plaintiff's own assertion, the said dealership agreement was never materialized. In October, 2008, the plaintiff wrote a letter to the defendant No,4 calling upon her to deposit a sum of Rs,1 Million as dealership security deposit, which is a compulsory requirement for company's financed site. The defendant No,4 replied the said letter expressing her desire to convert the site into new vision and also requested that the condition to pay Rs,1 Million as dealership security deposit for company's financed site be waived as special case as she is not in a position to pay the said amount, but the said request of the defendant No,4 was not entertained by the plaintiff keeping in view the standard quality company's procedure. It is further argued that on the refusal of plaintiff to entertain the request of security deposit waiver, the defendant No,4 entered into an agreement with defendant No,5. The learned counsel further referred to an order dated 17-1-2002 passed in Suit No,565 of 2002. The suit was disposed of in the year 2002 on the statement that the
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defendants shall only take action, which is available under the law. In the plaint, the plaintiff has itself admitted that the dealership agreement could not be materialized due to non-fulfilment of security deposit clause and in spite of seeking waiver, the defendant No,4 was not accommodated due to some standard procedure. In the injunction application, the plaintiff is seeking restraining orders on the ground that the defendant No,4 is the dealer of the plaintiff in respect of the premises with further restraining order that she may be restrained from entering into dealership agreement with defendant No,5. ' In support of the arguments, the learned counsel relied upon the following c ase-law:-- (1) PLD 1988 SC 190 (Mrs. Zarina Khawaja v. Agha Mahboob Shah). In this judgment, continuance of statutory tenancy has been discussed and the Hon'ble Supreme Court held that after expiry of the agreement of tenancy the general law of holding over by the tenant has not been repealed or modified by the rent laws except to the extent that it comes in conflict with the provisions of the Rent Restriction Law. On the contrary, it was specifically' provided in the definition of a 'tenant' in section 2 of the West Pakistan Urban Rent Restriction Ordinance, 1959 that a tenant would include 'a tenant continuing in possession after the termination of the tenancy in his favour'. The definition of tenant in the present Sindh Law also provides that a tenant would include "any person who continues to be in possession or occupation of the premises after the termination of his tenancy". (2) 1985 M LD 536 (Mirza Jawad Baig v. Pakistan State Oil Co. Ltd.). In this judgment, the learned single Judge of this Court has held that after expiry of lease by efflux of time, tenant had become statutory tenant and was governed by provisions of section 13(2)(i) of the repealed Ordinance VI of 1959. (3) 1988 M LD 210 (Pakistan Burmah Shell Ltd. v. Khalil Ahmed and another). In this judgment, it is held that where lessor agreed to a provision in lease deed that lessee would have option to ask for a renewal of lease at the determination of same for further period, such provision must be given effect to. The main object of Sindh Rented Premises Ordinance is to make effective provisions for regulations of relation between landlords and tenants and to protect their interests in respect of rented premises and not to confer any new right of eviction on landlords. Ordinance pre-supposes existence of landlord's right to immediate possession, but his such right would be limited by provisions of section 15 of the Ordinance. Landlord though has got a right to evict tenant under general law, yet he cannot get possession of premises unless one or other conditions specified in section 15 of the Ordinance are complied with. ' The learned counsel failed to point out or demonstrate through any document that the initial lease of ten years granted in favour of Dawood Petroleum Limited in the year, 1971 was further renewed in favour of the plaintiff after its original tenure and first renewal term. The lease deed was not granted by a private party but the defendants Nos.1 and 2. In the injunction application, the plaintiff has not claimed the protection for its dispossession from the site but restraining order has been sought against defendant No,4 that she is the dealer of plaintiff and she cannot enter into an agreement with defendant No,5. Even in the supporting affidavit of the injunction application, the authorized officer of the plaintiff admits that the pump site was leased out to Dawood Petroleum Company, which was merged in the PSO by virtue of a Notification dated 29th December, 1976 under re-organization plan. It is also claimed by the plaintiff that at 'the time of leasing, a sum of Rs,1 Million was invested by the plaintiff's company for construction and the present value is more than Rs,10 Million. It is reiterated that after the death of Naveed Sadiq, the defendant No,4, who is wife of deceased dealer, applied to become a dealer of the plaintiff and entered into an agreement but since she failed to pay the dealership security deposit of Rs,1 Million, the dealership agreement could not be materialized. ' On the date of hearing, Muhammad Aslam, Superintendent, Legal Branch, PWD, Ministry of Works was present. The learned Standing Counsel Mr. Abdul Karim Nizamani argued and referred to the
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written statement filed by the defendants Nos.1, 2 and 3 in which it has been stated that the lease of the plaintiff expired on 25-8-2001, thereafter, the plaintiff failed to enter into a fresh agreement. The plaintiff is an encroacher over the subject property after expiry of lease granted to the plaintiff within the definition of terms contained in Federal Government Land (Removal of Encroachments) Ordinance, 1965, hence the suit filed by plaintiff is liable to be dismissed as the plaintiff has no legal character or locus standi. It was further submitted that after expiry of lease, the then dealer of Quaid Service Station filed Suit No,1053 of 2001, thereafter,Khushnood Sadiq filed an appeal but finally the appeal was withdrawn by him. After the sudden death of Naveed Sadiq, the defendant No,4 approached this Court for Letter of Administration, thereafter, a settlement had taken place between Khushnood Sadiq and defendant No,4 and she was allowed to run the business/dealership of the-said petrol pump, thereafter defendant No,4 applied for fresh lease agreement in her favour and she became lessee as per fresh lease agreement executed on 10-10- 2007. It is further alleged that after expiry of lease agreement between Pakistan State Oil and the Government, the plaintiff failed to meet the fresh terms and conditions for renewal of lease and Government had lawfully auctioned the said property and made fresh lease agreement in favour of Khushnud Sadiq. Along with the Written Statement, indenture of lease of Government land dated 1-10-2003 is attached, which was executed between the President of Pakistan as lessor and Khushnud Sadiq as lessee. Besides above, there is another indenture of lease of Government land dated 10-10-2007, which was again executed by the President of Pakistan and Mst. Lubna Jawaid, the defendant No,4 in the present matter for the demised premises in question. It is further alleged that the plaintiff has no legal character to file the present suit. ' Mr. Muhammad Saleem Thepdawala, learned counsel for the defendant No,4 during his arguments also referred to the counter-affidavit filed by the defendant No,4. From the counter- affidavit, he pointed out a letter dated 5-11-2008 in which the defendant No,2 confirmed that Ms. Lubna Jawaid is sub-lessee of Government property bearing Plots Nos.1Q-E and 11-E, Jehangir Road, Karachi-East (Quaid Service Station) as per indenture of lease agreement. In another letter dated 9-1-2008, the defendant No,2 issued no objection certificate whereby defendant No,4 was allowed to sub-lease the aforesaid plot to any oil company of Pakistan. Another certificate dated 23-1-2008 is also attached which was issued by the defendant No,2 certifying that plot of land bearing Nes.10- E and 11-E situated at Jehangir Road, Karachi is Federal Government property and Pakistan Works Department is the custodian of all Federal Government land. The said plots have been leased out to Ms. Lubna Jawaid for running POL business as per lease agreement dated 10-10-2007. He further argued that first lease was executed in the month of August, 1977 by the defendant No,2 in favour of PSO, which expired, thereafter, the lease of the plot was executed in favour of Khushnucd Sadiq in the month of October, 2003 and after mutual settlement between the defendant No,4, and previous lessee Khushnud Sadiq, the defendants No,1 and 2 had executed the lease in favour of defendant No,4 in the year 2007. The plaintiff filed Suit No,1031 of 2000, which was dismissed for non-joinder of Federation of Pakistan. Similarly in the year 2001, the then dealer Khushnud Sadiq had filed Suit No,1053 of 2001, which was dismissed by this Court and against the said order, a High Court of Appeal was filed which was subsequently withdrawn on 28-8-2003. The learned counsel further argued that after expiry of lease in the year 2001, the plaintiff filed a Miscellaneous Rent Case No,569 of 2001 under section 10 of Sindh Rented Premises Ordinance in the Court of VIth Rent Controller, Karachi, East for depositing rent in the Court. The defendant No,2 raised objections against the maintainability of application on the ground that since the land is owned by the Government of Pakistan, therefore, it does not come within the ambit and purview of Sindh Rented Premises Ordinance, 1979. He further argued that after hearing the parties, the learned Senior Civil Judge dismissed the application vide order dated 12-11-2001 with the observation that since the land is owned by the Federal Government, therefore, under section 3 of the Sindh Rented Premises
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Ordinance, 1979, the provisions of Rent Laws are not applicable, hence, the Rent Controller has no jurisdiction to entertain the application. After dismissal of Misc. Rent Case in the year 2001, nothing further is available on record to justify or to prove that the order passed by the Rent Controller was ever challenged in any appellate forum or not. All these material facts have been suppressed and concealed by the plaintiff in the plaint. The learned counsel further argued that in fact the plaintiff has filed the suit to pressurize the defendant No,4 and trying to make the defendant No,4 dealer under duress. The contents of plaint are itself showing that after executing the dealership agreement, the defendant No,4 failed to furnish any security amount and in spite of her request for the waiver, the plaintiff did not accept the request, therefore, at present, there is no agreement in force between the parties as it never came into existence due to non-fulfilment of security clause. He further argued that the plaintiff has no right to seek any declaration to the effect that the defendant No,4 shall become the dealer of the company after fulfiling the terms and conditions of dealership agreement. The plaintiff cannot ask for any restraining order against the defendant No,4 not to enter into any agreement with defendant No, 5. The learned counsel in support of his arguments, relied upon the following case-law:-- (1) 2003 M LD 688 (Muslim Commercial Bank Ltd. And another v. Adamjee Insurance Company Ltd. And others). In this judgment, the Divisional Bench of this Court has held that the party seeking grant of injunction has to establish the existence of three essential ingredients i,e, existence of a prima facie case; likelihood of irreparable loss or legal injury for non-grant of temporary injunction, and that balance of convenience ought to be in favour of the party seeking temporary injunction. It is also the requirement of law that all the three requisites/ essential ingredients must be fulfilled before injunction can be granted in favour of a party and absence of anyone of these essential ingredients would not warrant grant of injunction. Existence of prima facie case is to be judged or made out on the basis of material/evidence on record at the time of hearing of injunction application, and such evidence or material should be of the nature that by considering the same Court should or ought to be of the view that plaintiff applying for injunction, was in all probability likely to succeed in the suit by having a decision in favour, and that his case was not likely to fail on account of some apparent 4efects. (2) 1973 SCM R 184 (Muhammad Yakoob v. Health Officer, Municipal Committee Hyderabad and another). In this judgment, the Hon'ble Supreme Court has considered Order XXXIX, Rule 1, C.P.C. Read with section 42 of the Specific Relief Act and held that after the license had expired by efflux of time, there could be no further question of continuing them or restraining the Municipal Committee from cancelling the same. If the petitioner succeeds in his suit, he will be entitled to recover all damages suffered as a consequence of the cancellation and also to the renewal of his license. No irreparable injury will thus be suffered by him which cannot be compensated in terms of money. ' Mr. Khalid Ahmed Tanwiri, learned counsel for the defendant No,5 argued that the suit is barred under sections 42 and 56 of the Specific Relief Act. The plaintiff has no legal character. The plaintiff has no right to file the suit or injunction application in respect of the property in question as the lease of the plaintiff with defendant No,2 stood vanished due to completion of its tenure. The learned counsel also referred to letter dated 2-8-2006. This letter was written by Inspector of Explosives to the 6 different oil companies including the plaintiff. The subject of letter shows that requirement of a valid registered lease agreement is a pre-condition for issuance/amendment/renewal of storage license. In the body of letter, the Inspector of Explosives invited the attention to an office letter dated 30-8-2005 with the advice to furnish a valid registered lease agreement between the oil companies and their respective dealers for each site/petrol pump as a part of particulars for grant/renewal/ amendment of license without further delay. The purpose of showing this letter is to invite attention of this Court that no explosive storage license for
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the oil lubrication can be issued to any oil company unless they produce valid registered lease deed with the dealer/owner of the plot and unless lease deed is produced, explosive license under the Petroleum Rules, 1937 cannot be renewed. He has also invited attention of this Court to a lease deed dated 8-5-2008 executed by the defendant No,4 in favour of defendant No,5 for running a pump at the plot in question. Finally he argued that the defendant No,4 by her own freewill and consent entered into an agreement with the defendant No,5 and the plaintiff has no right and authority to force the defendant No,4 to become the dealer of plaintiff. The plaintiff and defendant No,4 have no privity of contract, therefore the plaintiff has no locus standi or legal character to file the present suit. ' After hearing the arguments of all the learned counsel appearing for the parties, I have reached to the conclusion that the plaintiff has no lawful right and authority to force the defendant No,4 to become the dealer of PSO. The dealership agreement signed between the plaintiff and defendant No,4 was not materialized and operative due to non-fulfilment of security, clause and the stand of plaintiff is also hit by the principle of approbate and reprobate. Party cannot be allowed to approbate and reprobate in the same breath, rather it would be bound by his previous stance. On one hand the plaintiff is forcing that the defendant No,4 should become a dealer in view of the dealership agreement and on the other hand they refused to waive the security deposit condition when applied by the defendant No,4. So in my view, there is no privity of contract between the plaintiff and defendant No,4 and the prayer clause amounts to exertion of undue influence upon the plaintiff. The judgment relied upon by the learned counsel for the plaintiffs on the principle of statutory tenancy are also not applicable in this case because not only the lease of the plaintiff expired but subsequently it was executed in favour of Khushnud Sadiq and then in favour of defendant No,4 so the plaintiff is not entitled to claim the benefit of statutory tenancy on expiry of its lease period particularly in the circumstances when the MRC filed by the plaintiff under section 10 of the Sindh Rented Premises Ordinance, 1979 was dismissed on the ground that under section 3, the provisions of Sindh Rented Premises Ordinance, 1979 are not applicable to the land owned by the Federal Government. It is an admitted position in this suit that the land in question is owned by the Federal Government and the defendants Nos.1 to 3 in their written statement have clearly taken a plea that the plaintiff is an encroacher within the terms of Federal Government Land (Removal of Encroachments) Ordinance, 1965. The relief by way of an injunction whether temporary or permanent is in the discretion of the Court. Under section 21 of the Specific Relief Act, it is clearly mentioned that a contract cannot be specifically enforced which in its nature is revocable and or a contract for non-performance of which compensation of money is an adequate relief. Similarly, section 56 of the Specific Relief Act clearly provides that an injunction cannot be granted to prevent breach of a contract, the performance of which would not be specifically enforced. The main ground in the injunction application is that the defendant No,4 may be restrained from entering into the agreement with the defendant No, 5 in respect of the plot in question on which the plaintiff has invested more than Rs,1 Million for the construction of petrol pump. First of all no agreement came into existence due to non-fulfilment of security deposit clause, therefore no license/agency or franchise was issued by the plaintiff with clear denial to waive the security deposit clause. Therefore, the plaintiff has no lawful justification to force the defendant No,4 for a reluctant relationship. The plaintiff itself filed a letter of defendant No,4 as annexure 'g' to the plaint in which the defendant No,4 categorically submitted that she is not in a position to pay the required sum of Rs,10 Lacs and requested for the waiver, which was declined. Since the request was declined, in fact there is no agreement between the parties. Article 8 of the agreement clearly stipulates and demonstrates that at the time of agreement, it is a precondition that the amount should be deposited with PSO in advance that is why Article 8 starts from the words "dealer has deposited with PSO a sum of rupees "but in the agreement filed by the plaintiff the column of
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security amount is blank, which clearly shows that…
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