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Petitioner: SHABBIR AHMED VS Respondent: KIRAN KHURSHEED and 8 others
Court Name: Lahore High Court Judge(s): Syed Mansoor Ali Shah Title: SHABBIR AHMED vs KIRAN KHURSHEED and 8 others Case No.:Writ Petition No,18645 of 2011Writ Petitions Nos.18645 and 16843 of 2011 and
JUDGMENT
Reported As: 2012 CLC 1236 Result: Order accordingly Judgment JUDGMENT ' SYED MANSOOR ALI SHAH, This judgment will decide this writ petition along with the following writ petitions, as they raise common questions of law and facts:- -- (i) Writ Petition No, 20259 of 2011 titled Messrs Pakistan State Oil .Company Ltd. v. Province of Punjab and others (ii) Writ Petition No, 18356 of 2011 titled Muhammad Waheed v. Government of the Punjab and others (iii) Writ Petition No, 16843 of 2011 titled Shabbir Ahmed v. Tehsil Municipal Administration and others 2. The facts narrated by Messrs Pakistan State Oil Ltd. ("PSO")1 are that on 20-5-1961 one Messrs Standard Vacuum Company Ltd, Karachi was granted lease of vacant plot ("PLOT") close to the General Bus Stand, District Sheikhupura by the Municipal Corporation, Sheikhupura at an annual rent of Rs,2,250/-. The said company took over the vacant possession of the PLOT and set up a petrol pump on the said premises under the name and style of "Moonlight Filling Station". {{FOOT NOTE}} Petitioner in Writ Petition No,20259 of 2011.
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' Later on the said company merged into PSO in the year 1981 and thereafter PSO has continued as a lessee of the aforesaid Municipal Corporation and later on of the respondent TMA, Sheikhupura (successor in interest of the Municipal Corporation). He further contended that one Shabbir Ahmad2 was appointed as authorized dealer of PSO on 1-8-2007. The major investment in setting up of the petrol pump has been of PSO, however, the new dealer has also constructed some office rooms attached to the existing petrol pump. He submitted that extension of the lease of the PLOT in favour of Shabbir Ahmad in the year 2007 is actually an extension granted in favour of PSO, as Shabbir Ahmed is the authorized dealer/agent of PSO. In any case PSO or its dealer Shabbir Ahmad remained tenants of respondent TMA, Sheikhupura till the impugned advertisement for public auction was published on 6-7-2011. The Lease Agreement ("Agreement") entered with Shabbir Ahmad in the year 2007 was for a period of five years, which is yet to expire in June, 2012. 3. Counsel for the petitioner Shabbir Ahmed supported the contention of the counsel for PSO and additionally submitted that the petitioner has been a dealer of PSO for the last several years and has referred to Certificate dated 8-7-2011 which shows that the petitioner is an authorized dealer of PSO to run and manage the aforesaid petrol pump. 4. Counsel for the petitioners (i,e,, PSO and Shabbir Ahmed)* further submitted that the auction of lease hold rights of the PLOT by the respondent TMA, vide public advertisement dated 6-7-2011 is without lawful authority, inasmuch as, it violates Rules 9(2)(e) and 16(c) of the Punjab Local Government (Property) Rules, 2003. They also contended that the auction of leasehold rights is without notice to the petitioners who have carried out huge investment and set up petrol pump on the PLOT in the year 1961. 5. On the question that the petitioners ought to have been issued a notice, learned counsel placed reliance on "Olga Tellis and others v. Bombay Municipal Corporation and others" (AIR 1986 SC 180) and Malik Abdul Adz v. West Pakistan Publishing Company (Private) Ltd." (PLD 1965 (W.P.) Lahore 82). Learned counsel for PSO further contends that the auction-purchaser namely Waheed Ahmad is not a dealer of PSO and does not have a license under Rule 115 of the Petroleum Rules, 1937 to carry out the business of running a petrol pump. It is reiterated that Shabbir Ahmad is still the dealer of PSO. 6. Explaining the background to the Agreement, learned counsel {{FOOT NOTE}} Petitioner in Writ Petition No,16843 of 2011 and the instant petition. ' for the petitioners submitted that a Committee was constituted by the respondent TMA on 16-7- 2007 to consider the enhancement of rent of the PLOT in question, as well as, other plots of TMA and has referred to meeting dated 10-9-2007 whereby the rent of various plots was enhanced. It is pointed out that the name of Pakistan State Oil appears at Sr. No,94 of the list of tenants attached to the said minutes, establishing that PSO was a tenant in possession of the PLOT. The rent of the PLOT was enhanced from Rs,800/- to Rs,950/- by the said Committee. He submits that as a consequence of the said enhancement the aforesaid Agreement was entered between Shabbir Ahmed and respondent TMA. Further, learned counsel referred to parawise comments filed by the respondent Administrator TMA Sheikhupura, whereby it has been admitted that the petitioner has been a lessee of the respondent TMA. It is also pointed out that the comments of respondent TMA clearly state that, in order to enhance the rent, the process of auction of lease hold rights was recoursed to by respondent TMA under Punjab Local Government (Property) Rules, 2003 ("Rules") without issuance of notice to the petitioners for enhancement of rent. 7. It is further contended by the petitioners that the auction for lease hold rights is in violation of Item 64 of the 6th Schedule of the Local Government Ordinance, 2001. It is also submitted that after filing the first Writ Petition No,16843 of 2011, Shabbir Ahmed was granted interim relief on 20-7-2011 to the effect that the parties shall maintain status quo, however, on 29-7-2011 the petitioner was
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dispossessed from the said premises by Respondent/TMA with the help of Police force. The said dispossession was challenged through the second writ petition i,e,, Writ Petition No,18645 of 2011.In the second petition it is contended that after the status-quo order was issued by this Court, the subsequent act of dispossession has no lawful authority and ought to be reversed. It is lastly contended that no notice or proceedings have been initiated to date against PSO or Shabbir Ahmed alleging that Lease Agreement dated 16-7-2007 is bad in law. 8. Mr. Mehmood A Sheikh', Advocate, learned counsel for respondent TMA verbally admits that one Standard Vacuum Company Ltd. Was the lessee of the erstwhile Municipal Corporation Sheikhupura since 1961 and that PSO stepped into the shoes of the said Company in {{FOOT NOTE}} 3 Ref: Report of Additional Director GeneFal (Admn-H) Punjab Local Government Board, Annexure R/7-27 in reply of Writ Petition No,16843 of 2011. 4 Second counsel for the respondent TMA. The earlier counsel Niaz Ahmed Khan represented respondent TMA and also filed parawise comments, however he was subsequently replaced by Mr. Mehmood A. Sheikh, Advocate ' the year 1981 However, in his reply filed in Writ Petition No,20295 of 2011 (Para No,2 on facts submits that the merger of the Messrs Standard Vacuum Company Ltd. Into Pakistan State Oil is not known to TMA, in spite of the same, admittedly, the respondent TMA has been accepting rent from PSO as series of letters placed on the record states that PSO is. The tenant of respondent TMA. However, it is submitted that no formal lease agreement was entered into with PSO, however, PSO has been intermittently depositing rent over the years. The learned counsel further submitted that similarly after 2007 one Shabbir. Ahmad continued paying rent hence; on the whole, the status of PSO, as well as, Shabbir Ahmad is that of tenants, of TMA. He, however, vehemently adds that the said tenancy has been executed in violation of Punjab Local Government (Property) Rules, 2003 and is therefore void. 9: It is further submitted by the counsel for TMA that compliance of Item 64 of the 6th Schedule to the Punjab Local Government Ordinance, 2001 took place as the petitioner was given reasonable notice in the shape of the public advertisement for auction of the lease hold rights. In order to elucidate the point further, learned counsel placed reliance on the definition of the word "Notice" as defined in the Black's Law Dictionary. He also placed reliance on Rule 18 (24) of the- Rules in support of his contention. 10. Submitting further he said that the relationship of tenancy enjoyed by the petitioner since 1961 and in particular after 1981 has been in violation of the Rules, in as much as, no public auction of the said lease hold rights was conducted and therefore the tenancy in question is void ab inito. He laid special stress on the fact that the said tenancy is causing loss to the exchequer as a paltry sum of Rs,950/- per month is being paid as rent by the petitioners, while the current rent of the PLOT is around Rs,1,40,000/- per month. He referred to the proceedings of the. District Price Assessment Committee (DPAC) conducted in the year 2010 where the rent recommended by the said Committee for the PLOT was Rs,1,40,000/-. He submitted that intervention in the matter by this court will amount to retention of ill-gotten gains by the petitioners who have approached this court with unclean hands and with vehemence _placed reliance on "Muhammad Sharif through Legal Heirs and 4 others v. Sultan Hamayun and others" (2003 SCMR 1221), "Muhammad Baran and others v. Member (Settlement and Rehabilitation), Board of Revenue, Punjab and others" (PLD 1991 SC 691) "Syed Wajih-ul-Hassan Zaidi v. Government of Punjab and others" (1997 SCMR 1901), "Muhammad Maqsood Sabir Ansari v. District Returning Officer, Kasur and others" (PLD 2009 SC 28), "Lt. Col. (R) Muhammad Aslam v. Defence Housing Authority (DHA) through Administrator and 2 others" (PLD 2008 Lahore 261) and "Muhammad Arif v. District Coordination Officer Khushab and another" (2009 MLD 1160). As far as the rent assessm ent of the plot in question conducted in the year 2007 through
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a Committee fixing the annual rent as Rs,950/- enhancing it from Rs800/- per month, as referred to by the counsel for the petitioners, learned counsel for TMA submitted that the said proceedings were bogus and fake as the said Committee could not have been constituted under the Ordinance. He however, failed to refer to any order or document issued by the respondent TMA declaring the said meeting to be bogus or illegal 11. Learned counsel for auction-purchaser namely Muhammad Wahced5 submitted that the petitioner (Shabbir Ahmed) is estopped from challenging the auction proceedings because he himself participated in the same and placed reliance on "Indus Valley Construction Company Ltd. v. Comentation Intrafbr Ltd." (1982 SCMR 1127) and "Yahya Gulzar v. Province of Punjab through Secretary Health, Government of Punjab. Lahore and 3 others" (2001 CLC 9) in support of the same. He also referred to section 124 of the Punjab Local Government Ordinance, 2001 as well as, Rules 9(2) and 16 of the Punjab Local Government (Property) Rules, 2003. He further contended that public property can only he leased out -through public auction and placed reliance on "Alta Ullah Khan Malik v. Federation of Government of Pakistan through President of Pakistan and 3 others" (2010 PLD Lahore 605). He submitted that the said auction will bring a monthly rent of Rs,1.13,000/- to the public exchequer as opposed to Rs,1280/- paid by the petitioner. That the .Ease obtained by the petitioner is collusive and an internal report to this extent has been prepared by the respondent TMA. 12. Arguments heard. Record perused. WHETHER PETITIONERS (i,e,, PSO/SHABBIR AHMAD) ARE TENANTS? 13. The facts, as culled out from the pleadings of the parties and the additional documents placed on the record by the learned counsel for respondent TMA6 are that on 20-5-1961 the PLOT was leased out to Messrs Standard Vacuum Company Ltd. By the erstwhile Municipal Corporation, Sheikhupura. The said Company later on merged into PSO and thereafter PSO became the lessee. An incomplete copy of Agreement of Lease entered between the Municipal Corporation Sheikhupura and 5. It is clarified that in this judgment M. Waheed even though a petitioner in Writ Petition No, of 2011 will he referred to as "Auction-Purchaser". Reference to petitioners in this judgment does not include the said "Auction Purchaser".I8356 6. In the shape of paper book (Volume-I) dated 18-10-2011. ' PSO has been placed on the record by the learned counsel for TMA'. A complete copy was called for through the learned Assistant Advocate General, Punjab, which has been placed on the record as "Mark-A". The said Agreement is undated and does not specify the period of lease, however, its execution is admitted by the learned counsel for TMA and also certified by the Tehsil Officer (Regulations), TMA, Sheikhupura. A petrol pump has since been raised on the PLOT and further modernized in the year 2005 after incurring sizeable investment. Pleadings also show that partial investment has also been made by Shabbir Ahmad as authorized dealer of PSO. 14. The parawise comments filed on behalf of respondent TMA8 in Writ Petition No,16843 of 2011 and Writ Petition No,18645 of 2011 admit that Shabbir Ahmed is a lessee of the PLOT in question by virtue of Agreement dated 16-7-2007. In fact the said parawise comments show that TMA placed reliance on condition 5 of the Agreement for' initiating the impugned auction, thereby once again admitting the execution of the Lease Agreement. Condition 5 of the Agreement simply provides that the tenant shall be bound by the instructions issued by the TMA and government from time to time. Learned counsel for respondent TMA also submitted that relationship of tenancy exists between PSO/Shabbir Ahmad and the TMA and over the years (even after the year 2007) rent has been received by respondent TMA. However, intermittently. He, however, submitted that extension of lease in the year 2007 was not through public auction. No proceedings or action has been taken
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against the petitioners on the basis of the said 'Agreement by TMA. On the contrary the written correspondence of TMA and its parawise reply filed before this court confirms that Shabbir Ahmed is a tenant of TMA. 15. Additionally, Minutes 'of Meeting of District Rent Assessment Committee, Sheikhupura held on 8- 11-2010 placed on the record by respondent TMA acknowledge that Shabbir Ahmad is running the petrol pump under respondent TMA. Letter dated 18-4-2011 issued by the Tehsil Municipal Officer, Tehsil Municipal Administration, Sheikhupura also acknowledges that the PLOT has been leased out in favour of the erstwhile company on .20-5-1961 and a fresh Agreement of Lease has been executed between respondent TMA and PSO in the year 2007. Similarly, in letter dated 4-7-2011 issued by the Administrator, Tehsil Municipal Administration, Sheikhupura it is once again reiterated that respondent TMA has leased out the PLOT on 20-5-1961 and fresh Lease {{FOOT NOTE}} 7 Paper Book (Volume-I) dated 18-10-2011 (P.54). 8 Filed by the earlier counsel of TMA and not withdrawn or amended by the subsequent counsel representing TMA. ' Agreement was signed between respondent TMA and PSO in the year 2007. This letter, however, qualifies that the Lease Agreement was signed in the year 2007 without following the procedure of open auction but does not mention if any action was taken in pursuance of the same or any inquiry was conducted in the matter or notice has been issued to the petitioners for cancellation of the Agreement. Reference is also made to the Committee constituted by the Local Government in pursuance to letter dated 7-7-1982, comprising Tehsil Municipal Officer, Tehsil Officer (Regulation) and three Naib Nazims. The Committee enhanced the rent of the leased properties of TMA. The said document of enhancement of rent duly lists. PSO at serial No, 94 and shows that the rent has been enhanced from Rs,800/- to Rs,950/- p.m. In the year 2007. It is submitted by the learned counsel for respondent TMA that the said minutes are bogus and collusive, but has failed to refer to any action taken against the complicit officers of TMA or for the cancellation of the said minutes or for that matter any document issued by TMA recording the said minutes to be bogus. Report of the Additional Director General (Adorn-II) of the Punjab Local Government Board dated 30-8-2011 placed on the record by the auction-purchaser9 confirms that such a Committee was constituted and rent enhanced to Rs,950/- but qualified that it was without the sanction of the Tehsil Nazim and the matter was not placed before the Tehsil Council and holds Tehsil Officer (Regulation) responsible. Nothing has been placed on the record to show that TMA took action in the matter after the Report of the Additional Director General (Admn-II) of the Punjab Local Government Board. 16. The above facts show, that there is an ongoing relationship of tenancy between PSO and as a consequence with its agent/authorized dealer namely (Shabbir Ahmad) and respondent TMA. This relationship is in existence since the erstwhile Municipal Corporation entered into Lease Agreement with the predecessor in interest of PSO. It .Is also admitted that PSO raised petrol pump on the vacant PLOT and has since been operating the same as a tenant and has been paying rent, even though irregularly. It is also admitted by respondent TMA that .Since 2007 the authorized dealer/agent of PSO (Shabbir Ahmed) has been operating the petrol pump. Even if the Agreement is taken out of the equation, as is the contention of the respondents, the original Lease Agreement still stands between TMA and PSO. Therefore, it can be safely concluded that the petitioners namely PSO (and as a consequence its authorized dealer Shabbir Ahmad) are the tenants of respondent TMA. {{FOOT NOTE}} In Writ Petition No,16843 of 2011 as Annexure-R/7-27 with his reply.
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EVENTS LEADING TO THE IMPUGNED PUBLIC ADVERTISEMENT FOR AUCTION OF LEASEHOLD RIGHTS DATED 6-7-2011. 17. Events leading to the impugned public advertisement dated 6-7-2011 through which leasehold rights of the PLOT were put to auction by Respondent TMA during the currency of the tenancy with PSO can be ascertained from,the parawise comments-of respondent TMA. In Writ Petition. No,16843 of 2011 and Writ Petition No,18645 of 2011, as well as, documents placed on the record through separate paper book (Volume-I) dated 18-10.2011 by the learned counsel for respondent TMA and are as follows:-- (i) Notification' dated 7-10-2010 issued by the Government of the Punjab, Colonies Department, Board of Revenue. Punjab, Lahore for grant of fresh leases and extension of leases of. State land for installations of petrol pumps, CNG stations, etc. In the Province of Punjab through public auction. Under the said Notification, District Price Assessm ent Committee (DPAC)," Sheikhupura, headed by District Officer (Revenue), Sheikhupura held a meeting on 8-11-2010. Besides noting in their minutes that Shabbir Ahmad was running Moon Light Petrol Pump under the respondent TMA and paying rent Rs,1160/- p.m., the Committee Unanimously assessed the rent of the PLOT as Rs,1,40,000/- p.m. The said rent was maintained in the reassessment exercise done by DRAC Reference Minutes of DRAC dated 31-12-2010. It is pointed out that this exercise was conducted by the Revenue. Authorities under the Colonization of Government Lands (Punjab) Act, 1912 and not by Respondent TMA under PLGO, 2001. (ii) Notification12 dated 23-11-2010. Respondent Tehsil Municipal Officer, Tehsil Municipal Administration, Sheikhupura vide letter dated 18-4-2011 in pursuance of Notification dated 23-11- 2010 issued by the Local Government and Community Development Department, 'Government of Punjab requested District Officer (Revenue) that market rent of the PLOT be assessed from the District. Rent Assessm ent Committee (DRAC). The said Notification was issued under section 197 Of PLGO {{FOOT NOTE}} 10 Notification No,3510-2010/2794-CL.II, dated 7th October, 2010 issued under section 10(2) of the Colonization of Government Lands (Punjab) Act, 1912. wrongly decribed as DPAC- should. Be DRAC. ' 12 Notification No,SO.ESTATE 2-30/2009 dated 23-11-2010. 2001". It is underlined that in the above referred letter dated 18-4-2011 issued by Respondent TMA, Sheikhupura, it is admitted that PSO is the tenant and also acknowledges the lease agreement executed in the year 2007. It is also observed that the above Notification was issued under section 197 of the PLGO, 2001, which is simply for the removal of difficulties and has a limited scope. Section 197 does not empower the Department to lay down procedure and guidelines for regulating lease of immovable property of the Local Government which falls within the rule making function under section 191 of the PLGO, 2001. (iii) The Additional District Collector, Sheikhupura in response to the above letter dated 18-4-2011 of TMA, communicated vide his letter dated 14-5-2011 the Minutes of the District Rent Assessm ent Committee, Sheikhupura dated 8-11-2011 and 31-12-2010 to the Tehsil Municipal Officer, Sheikhupura, prepared under an earlier Notification mentioned above issued under the Colonization of Government Lands (Punjab) Act, 1912. (iv) On 20-5-2011, Tehsil Municipal Officer wrote to the Additional District Collector Sheikhupura explaining that the size of the plot is l4-marlas while the rent has been assessed showing the plot to be of 1-kanal therefore the matter may be placed before the District Rent Assessment Committee for reassessm ent of rent. (v) The Additional District Collector, Sheikhupura wrote back on 24-6-2011 stating that the area of the plot is 16-marlas, 1-Sarsahi and therefore, himself re-assessed the rent to Rs,1,12,770/- p.m.
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There is no reference in the letter showing that the matter was referred to DRAC. 18. The above simply shows that the rent of the PLOT was being assessed assuming the petitioners to be lawful tenants. Additionally, the rent enhancement exercise narrated above has been under the Colonization of Govt. Lands (Punjab) Act, 1912 and subsequently, under notification issued under section 197 of the Punjab Local Government Ordinance which simply deals with removal of difficulties 'and could not have provided the mechanism for carrying out enhancement of rent. While' the said rent assessm ent was going on in spite of its hazy and {{FOOT NOTE}} .13 Section 197 of PLGO, 2001 deals with Removal of Difficulties. It is pointed out that by 13-4-2011, Rule 18 had been introduced in Rules, 2003 which recognized DRAC for the first time. ' suspect legal foundation, Rule 18 was introduced on 13-4-2011 in Rules, 2003 providing for lease of immovable property for the purposes of petrol pumps, etc through public auction. Respondent TMA on the basis of the said amendment directly proceeded with the auction of the PLOT in total disregard of the fact that petitioners were tenants in possession of the PLOT since 1961 and that Rule 18 did not apply to an existing continuing tenancy. Rule 18 of Rules, 2003 does not authorize the local government to intervene in an unexpired tenancy and put it up for auction without notice to the petitioners. Parawise comments of respondent TMA in Writ Petition No,16843 of 2011 show that the only consideration that weighed with respondent TMA were that the Rules, 2003 per se necessitated a re-auction of leasehold rights, which is incorrect. The parawise comments are reproduced for ready reference: ' Para 2 "On Facts":- "Admitted to the extent that the petitioner was lessee of Plot No,26 situated in Purana Adda Larrian Sheikhupura. According to Condition No,5 of agreement executed between the parties, both the petitioner and respondents were bound to comply with the instructions of the Government of the Punjab LG&CD Department issued from time to time. Government of the Punjab, LG&CD Department issued Punjab Local Government (Property) Rules 2003 (amended 2011) and according to section 18 of the rules ibid, the land meant for petrol pump had to be re-auctioned." (emphasis supplied) ' Thereafter, without notice to the petitioners, Respondent TMA issued a public advertisement for auction of lease hold rights on 6-7-2011 and proceeded with the auction wherein Muhammad Waheed, the auction-purchaser, has been declared successful by the respondent-Administrator, Sheikhupura. 19. Learned Counsel for TMA verbally justified recourse to direct auction on 'the ground that the government exchequer was suffering a huge loss due to the low rent being paid by the petitioners and therefore required an immediate action. LEGAL QUESTIONS THAT REQUIRES DETERMINATION 20. The following legal questions arise in this case:--- (a) Whether petitioners who were admittedly tenants of TMA (and the erstwhile Municipal Corporation) since 1961 could be ousted from the PLOT without notice as provided under item 64 of the 6th Schedule of PLGO, 2001, even after the insertion of Rule 18 in Rules, 2003 on 13-4-2011 ? (b)…
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