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Petitioner: MUHAMMAD AZIM VS Respondent: PAKISTAN EMPLOYEES COOPERATIVE HOUSING SOCIETY JUDGMENT
Court Name: Sindh High Court Judge(s): Abdul Hayee Qureshi Title:MUHAMMAD AZIM vs PAKISTAN EMPLOYEES COOPERATIVE HOUSING SOCIETY
JUDGMENT
Reported As: PLD 1985 Karachi 481 Result: Order accordingly Judgment JUDGMENT ' These five suits were consolidated by an order dated 29th November, 1967 which appears in the Order Sheet in Suit No, 243/65 (Miscellaneous Application No, 361/67). The suits were consolidated because the property consisting of a plot, which is the subject-matter of these suits, is the same in each one of them. Common evidence has been recorded and consolidated issues were framed and the same appear in the file relating to Suit No, 25/66. 2. The main parties in these suits are Muhammad Azim (hereinafter referred to as the plaintiff), who filed Suits bearing No, 45/66, 25/66 and 26/66; United Bank Ltd., (hereinafter referred to as the Bank), who filed Suits bearing No, 46/66 and 243/1965 ; and the Pakistan Employees Co-operative Housing Society Ltd. (hereinafter referred to as the Society), and this Society is a Defendant in all the five suits. Besides the above parties that are referred to as the main parties, three individuals have also been impleaded as Defendants in Suit No, 25/66. They are Mr. Zafrul Ahsan and Mr. A. A. Hasan the office-bearers of the Society and Mr. Agha Hasan Abidi, the Manager of the Bank. 3. The Society was formed in the wake of Partition for the purpose of providing houses to the employees of the Central Government. A large area of land was granted to the Society by the Government of Pakistan for the said purpose. I am informed by the learned Advocates for the Bank and the Society that sometime in the year 1957, the original body of the Society was superseded, but ultimately on 6th August, 1958 a "Licence Agreement" was executed between the President of Pakistan and the Society. By this agreement which was duly registered an area of land measuring 1,268 Acres was granted to the Society for the purpose of disposing of the same to its members for residential purposes. Besides, plots were also reserved for commercial purposes and for providing
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public amenities. The dispute in these suits relates to a commercial plot bearing No, 1/2-D, measuring 4,519 square yards and commonly known as Nursery Plot. This plot is stated to be located adjacent to Khayyam Cinema. 4. The Licence Agreement that has been referred to in the preceding paragraph clearly makes a provision in regard to disposal of commercial plots. The said provision is contained in para. VI (a) (2) of the Licence Agreement which has been produced on the record as Exh. 57/1. This provision reads as follows : "Plots reserved for commercial purposes shall not be disposed of by the licensee except under and in accordance with the directions given to it by the Landlord or the Authority as the case, may be in writing from time to time and on the terms set-out in Form C appended hereto." ' The landlord and authority referred to in the above-quoted passage mean respectively the Government of Pakistan and the Karachi Development Authority. Since Karachi Development Authority will be mentioned in this judgment frequently, the same shall be referred to as the K. D. A. ' Form C referred to in the above-quoted passage is the pro forma of a contract of lease contemplating the President of Pakistan to be the "Lessor" and the grantee of the plot to be the "Lessee". The pro forma further provides by implication that the document was to be executed on payment of the full instalments of premium, and after the execution of the document, the "Lease" was subject to the following conditions (i) That the Lessee would have to pay ground rent, (ii) that the plot and all buildings shall be subject to Municipal taxes and rates, (iii) that the lessee shall abide by all the rules and bye-laws of the K. D. A. Or other local authorities, (iv) that the lessee shall have the power to sell, sub-let, assign or transfer the plots whether with or without building thereon, (v) that in case of breach of condition, the Lessor could determine the lease and enter upon the plot and take possession of all the buildings constructed thereon, and (vi) that the lease was for a period of 99 years commencing from 1st April, 1948. 5. It may at this stage be pointed out that according to Licence Agreement, the K. D. A. Was appointed as the authority in regard to development of the area in accordance with the lay-out plan. The K. D. A. Also had the power to prevent diversion of any plot for use other than that for which the same had been approved. The K. D. A also had the power of preparing schemes and such schemes had to be executed by the Society in co-operation with all persons and other societies having similar rights in adjoining areas. In so far as execution of such schemes was concerned, the Society had to comply with all the directions given by the Government or K. D. A. In regard to such schemes from time to time. Although the alignment of the land and division of the area into blocks had been provided for in the lay-out plan, the execution thereof attracted the authority of the K. D. A. The cost of providing roads etc., was to be borne by the Society. 6. The Society wanted to dispose of the plot in question and the record discloses that from the beginning of 1962 the Society was trying to dispose of the plot by private negotiations. Habib Bank Limited offered to purchase 1000 Sq. Yds. At the rate of Rs, 110 per Sq. Yd. On 1st January, 1962, but the offer was considered by the Society to be too low and Habib Bank was asked by a letters dated 16th January, 1962 (Exh. 13) to revise the offer. Again on 18th January, 1962 the Society offered the plot to the United Bank Ltd., but their letter on 2nd February, 1962 intimated the Society that they were not interested in the plot. Ultimately a meeting of the Sub-Committee for allotment set-up by the Society was held on 10th May, 1963 and at this meeting a resolution was passed to the effect that sealed tenders may be invited for the sale of the Nursery Plot as one unit. It was, however, provided that the right of sale would be reserved. It appears that there was some "Stay Order", but the record does not disclose nor were they learned Advocates able to inform me what was the nature of this Stay Order and what was its significance. Suffice it to say that the Secretary of the
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Society at this meeting gave an assurance that the "Stay Order" was to be vacated shortly. I have underlined the word one unit because the same is a point of dispute in these suits because of the rival contentions of the parties in regard to divisibility of the plot. 7. On 20th May, 1963 sealed tenders were invited by the Society in respect of the plot. The notice of tenders provided that the tenders should reach the Secretary of the Society on or before 28th May, 1963 and the same were to be opened in public on the same day at 5-30 p. m. The notice also recited that the Society had the right to accept or reject any tender without assigning any reason. The terms and conditions of disposal were not published in the newspapers, but the same have been placed on record as Exh. 57/1 (13). These terms and conditions in relation to the present Suits are relevant in the following particulars :- (i) The building plan will have to be approved by the Society and then forwarded to the K. D. A. For approval, and (ii) any permission or licence from any authorities other than the Society will have to be obtained by the allottee and before a request for obtaining such permission etc., was made by the allottee, the prior consent of the Society shall be necessary. 8. On 27th May, 1963 vide Exh. 16, Messrs Rainbow Estate Agency submitted a tender for the plot in question and offered to pay Rs, 177.25 per Sq. Yd. The tender was subject to some conditions. One of the conditions was that the Society shall not object to sub-division of the plot and was bound to forward the sub-division plan to the K. D. A. For approval. Habib Bank Ltd. Also submitted a tender on 28th May, 1963 offering Rs, 185 per sq. Yds. There was still a third tender which was on a lower rate and was submitted by a party not concerned with these suits. On 28th May, 1963 after the tenders were opened, Messrs Rainbow Estate Agency submitted a letter 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, 200/00 per sq. Yd., 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. Yd 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 words in brackets are mine. ' The document Exh. 20 has been produced by Society and admitted on behalf of the plaintiff showing that Messrs Rainbow Estate Agency further raised the offer from Rs, 200 per sq. Yd. To Rs, 201 per sq. Yd., because the members of the Allotment Committee insisted on increase. This letter bears no date. However, another letter which is Exh. 55/21 from Rainbow Estate Agency bears the date 13th May, 1963 and contains an offer of Rs, 200 per sq. Yd., and this letter when considered alongwith letter Exh. 20 clearly shows that Exh. 20 must have been written after Exh. 55/21 dated 30th May, 1963. However, a document Exh. 21 produced by the Society and admitted on behalf of the Plaintiff is useful for the purpose of determination of the proceedings taken by the Society in regard to the disposal of this plot. This document is with regard to the Minutes of the meeting of Negotiation Committee of the Society held on 20th June, 1963 to finalise the disposal of this plot. This document shows that the offer of Habib Bank Ltd. Was Rs, 185 per sq. Yd., and in-spite of the office bearers of the Society trying to persuade the representatives of the Habib Bank Ltd to revise the offer, they could not succeed so that 3 or 4 days' time was given to the representative of the Habib Bank for consulting his Principals. This document further shows that the representative of the Habib Bank did not revert on the subject and since the plaintiff Muhammad Azim had submitted a revised offer at Rs, 201 per sq. Yd., the Committee decided to accept this offer on condition of the
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plaintiff Muhammad Azim paying the full price within a week. However, earlier to this meeting of the Negotiation Committee, the Managing Committee of the Society had by a Resolution dated 8th June, 1963 (Exh. 65) considered the matter in regard to the disposal of the plot. At this meeting, as the resolution states, all tenders were considered, and it was decided that the bidders should be persuaded to increase the bid. For this purpose another Committee was formed and the Managing Committee of the Society gave a direction to this Sub-Committee to negotiate on this matter and dispose of the plot to the person who was prepared to pay the highest price. 9. Ii was on 1st July, 1963 that the Secretary of the Society informed Rainbow Estate Agency that the Society had agreed to allot the plot for the purpose of constructing spacious and decent single unit buildings. I have underlined the word buildings, because in the document Exh. 72 the letter 's' in the word buildings although appears typewritten is yet overwritten in manuscript. Pursuant to the Allotment Order the plaintiff Muhammad Azim deposited an amount exceeding Rs, 9 lacs in Bank Account of the Society maintained in Standard Cooperative Bank Ltd. This amount was desposited within a week of the letter Exh. 22 whereby the Society agreed to allot the plot of land. Subsequently on 30th July, 1963 a formal allotment order was issued under the signature of the Honorary Secretary of the Society in favour of Muhammad Azim. In this document which is Exh. 55/1 on the record, reference has been made to construction of spacious and single unit buildings, but the letter 's' in the word buildings is not typed but is in manuscript. Similarly, condition No, 5 providing for payment of ground rent by plaintiff Muhammad Azim is also written in manuscript. I may state that the letter bears the seals of the Society. 10. After the issuance of Allotment Order the Managing Committee of the Society at its meeting on 17th July, 1963 confirmed the disposal of the plot and also expressed thanks to the persons who had brought about this transaction. By the same Resolution the Chairman of the Society was authorised to return the cheque of Habib Bank Ltd which had been given to the Society as earnest money at the time of submission of tender. However, after 17th July, 1963 Habib Bank Ltd. Did not enter into any correspondence with the Society in regard to the plot. 11. On 17th September, 1963 the plaintiff Muhammad Azim submitted a sub-division plan in respect of the plot to the Society for obtaining approval of the K. D. A. This sub-division plan was on the same day forwarded by the Executive Engineer of the Society to the K. D. A. For approval. In the meantime the plot in question was demarcated and a certificate of demarcation was issued to plaintiff Muhammad Azim on 5th October, 1963. This certificate which is Exh. 55/11 bears a seal of the Executive Engineer of the Society and a signature above the seal. Plaintiff Muhammad Azim has stated in his evidence that after the plot was demarcated, he put a fencing around the plot and constructed a Kutcha but for the Chowkidars. 12. It appears that the sub-division plan which was forwarded by the Executive Engineer of the Society to the K. D. A. For approval was not considered favourably by the K. D. A. The record discloses that the K.D.A. At one stage did not recognize the Society as the competent authority for the disposal of the plot and latter took a stand that the plot could not be sub-divided but ultimately insisted on a 30' strip out of the plot to provide a more wide road. Since several objections were taken by the K. D. A., plaintiff Muhammad Azim vide letter Exh. 55/20, dated 30th December, 1963 wrote to the Society that the plot in question had been allotted to him for construction of "a spacious and decent single unit buildings and not building." In this letter Muhammad Azim referred to the sub-division plan already submitted to the K. D. A. And requested that the Society may get the said sub-division plan approved. In fact plaintiff Muhammad Azim has stated in his letter that the condition of allotment of the plot was for construction of buildings and not of a single building. In fact earlier than the letter of Muhammad Azim, the Secretary of the Society had on 13th October, 1963 written to the Government of Pakistan that the plot in question was shown in the approved lay-out plan of the Society as "commercial plots" and the lay-out plan
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was duly signed by the Secretary of the Ministry of Rehabilitation. This letter was not replied to by the Government or in any case the reply has not been placed on record. Although the learned Advocates appearing on either side did not invite my attention to the lay-out plan appended to the Licence Agreement (Exh. 57/1), I have seen the plan and this, plot is mentioned in the plan as "commercial plots". 13. However, the Managing Committee of the Society held a meeting on 21-12-1963 and a resolution was passed on that date which reads as follows :- "The plans for the sub-division of Nursery Plot which were forwarded to the K. D. A. By the P. E. C. H. S. Were without the approval of the Managing Committee. The Plans may be taken back from the K. D. A. Mr. Muhammad Azim may be informed of our previous decision of 'single unit building' on the whole plot. If Mr, Muhammad Azim does not adhere to this condition, the whole amount may be returned to him and the allotment cancelled." ' The sub-division plan forwarded by the Society to the K. D. A. Was, therefore, re-called on 24-12- 1963. 14. Another meeting of the Managing Committee of the Society was held on 14-1-1964 and at that meeting a resolution was passed by the Society expressing concern and disappointment at the addition of letter 's' after the word 'building' in the allotment order in favour of plaintiff Muhammad Azim. The Society decided to hold an inquiry into the matter. The matter did not rest there, but another meeting of the Managing Committee of the Society was held on 25-2-1964 and Mr. Ahmed Ali, the Town Planner of K. D. A. Was also present. It was decided in this meeting that parking space for an adjacent market was insufficient and, therefore, a strip of JO' of land may be taken from the plot in question and earmarked as parking space. However, it has also decided at this meeting that the owner of the plot was to be compensated for deprivation of this 30' strip of land and the compensation was to be in the form of allowing the owner to build an additional floor on the building and also allow the owner to construct some garages and shops in the basement of the buildings or the plot. The record discloses that thereafter another sub-committee was formed to settle the case of this plot. This subcommittee held a meeting on 16-3-1964 and plaintiff Muhammad Azim was also present. The Minutes of this meeting disclose that the subcommittee was of the opinion that it was not advisable to insist on cancellation of the sale already made in favour of plaintiff Muhammad Azim. The Minutes disclose that cancellation of the sale in favour of Muhammad Azim was avoided because it was likely to create legal complications. This Sub- Committee was of the view that plaintiff Muhammad Azim should be convinced that it would be in his interest to surrender a 30' wide strip because thereby he could construct an additional floor and shops etc. Plaintiff Muhammad Azim at the outset insisted on return of the entire money which had by then been blocked for more than nine months and in the alternative plaintiff Muhammad Azim insisted on return of the cost of the 30' wide strip of land which was sought to be taken from him. ' This Sub-Committee again held another meeting on 25-5-1964 and it was decided that the allotment in favour of Muhammad Azim should not be cancelled and further that the Society should make an attempt to gel the width of the strip reduced to 20'. In return it was decided that plaintiff Muhammad Azim should be allowed to construct three-storey building as a special case. It was also decided that if the plot was subdivided, the Society should not charge any fee for transfer of the subdivided portion of the plot by Muhammad Azim to other persons. This was, however, subject to the decision of the Managing Committee. Thereafter on 14-6-1964 the Society wrote to plaintiff Muhammad Azim as follows :- "It is requested that you will please confirm if you will agree to the decision envisaged in the enclosed Minutes (of the meeting dated 25-5-1964) and if so please submit a plan for the construction of a three-storey building immediately so that the same be put up before the next Managing Committee meeting. The final approval
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will be communicated to you after it is approved by the Managing Committee." 15. In the meantime, however, plaintiff Muhammad Azim had been carrying on correspondence with the K. D. A. And the Government of Pakistan in regard to the plot and its use. However, it is necessary to refer to a letter by plaintiff Muhammad Azim to the Town Planner, K. D. A., Exh. 9/1 (14) dated 15-9-1964. In this letter Muhammad Azim asked the K. D. A. To advise him on the following matters:- (i) What kind of building is allowed in that area? (ii) How much area is allowed to be covered and how much open? (iii) How many storeys are allowed to be constructed, etc. ' No reply was received by plaintiff Muhammad Azim from the Town Planner, K. D. A. 16. It was ultimately on 2-1-1965 that plaintiff Muhammad Azim received a letter from the Society informing him that the allotment of the plot in his favour had been cancelled. In this letter which is Exh. 28 on the record it was stated that the plot had been cancelled in view of the difficulties explained by plaintiff Muhammad Azim in meeting of the Sub-Committee held on 25-5-1964. It would appear on a reading of this letter that the plot had been cancelled at the instance of plaintiff Muhammad Azim. Earlier to this action of cancellation a meeting of the Managing Committee of Society had been held on 19-9-1964 and at this meeting a resolution was passed empowering the Chairman of the Society to allot plots of the Society. However, I may state at this stage that the resolution did not at all refer to this Nursery Plot. It has become necessary to refer to this resolution because in the evidence of Mr. A. A. Hasan, the witness of the Society it has been stated that the cancellation was resorted to in pursuance of this resolution. Thereafter, the question in regard to this plot came up for discussion before the Managing Committee of the Society at least twice but the matter was not discussed because by that time legal proceedings has been taken by plaintiff Muhammad Azim. 17. I will now go over to the facts relating to the period after the allotment of the plot to United Bank Ltd. The plot was allotted to the Bank on 2-1-1965 vide Exh. 57/I (7). No resolution has been placed on record to indicate under what circumstances the plot was allotted to the Bank, but the letter of allotment refers to some previous latters and correspondence between the Society and the Bank. These letters have also not been produced, although the same were summoned. Syed Iqbal Halim, the Personnel Manager of the Bank was examined and he stated that the papers had been lost. Suffice it to say at this stage that the plot was sold by the Society for a lump sum of Rs, 10 lacs and a further donation of Rs, 1,50,000 to the P. E. C. H. S. Ltd. Education Foundation. Admittedly this amount of 10,00,000 was deposited in the account of the Society in the United Bank Ltd. This account in the Bank was opened by this amount. The amount was deposited in Current Account so that it did not yield any interest. In fact it is the case of the Society that this amount was to be utilised for payment to plaintiff Muhammad Azim in the first instance and since admittedly plaintiff Muhammad Azim has not received the amount paid by him, the same is still lying in the account of Society maintained at the United Bank Ltd. 18. After the allotment order in favour of the Bank, a certificate of demarcation and a certification of possession was given by the Society in favour of the Bank on 9-1-1965. It has transpired in evidence that Muhammad Sharif was appointed as Chowkidar on this plot after two or three days of the taking of possession by the Bank. This would correspond to 12-1-1965. On this date plaintiff Muhammad Azim lodged a report at Police Station Ferozabad, at 4-10 p.m. Complaining that some employees of the Society had forcibly come on the plot and removed the fencing and demolished the Chowkidar's hut. The Police took no action with the result that plaintiff Muhammad Azim filed a direct complaint in the Court of IX Additional City Magistrate, Karachi under section 448, P. P. C. And section 380, P. P. C. Against Mr. A. A. Hasan, the Secretary of the Society. This complaint was ultimately dismissed mainly on the ground that there was no evidence that Mr. A. A. Hasan had
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himself committed these offences. However, I may mention here that the police did arrest the Chowkidar of the Bank but on account of the intervention of one Mr. Sami, an Officer of the Bank the Chowkidar was let off. It appears that once again on 4-3-1965 a second attempt was made by the employees of the Bank to take forcible possession but without success. However, K. D. A. On 6-3- 1965 issued a notice to plaintiff Muhammad Azim to remove unauthorised construction that had been made on the plot. The position admittedly is that plaintiff Muhammad Azim is in possession of the plot. 19. At this stage it would be useful to refer to the correspondence between the parties. The first letter which is dated 5-1-1965 is on behalf of plaintiff Muhammad Azim and addressed to Mr. A. A. Hasan, the Secretary of the Society, wherein it is stated that Muhammad Azim had never expressed any difficulty in regard to the plot and had not invited cancellation. It has also been stated that Muhammad Azim is entitled to the plot and shall not surrender his rights in respect thereof. In this letter significantly…
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