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Petitioner: ZAFRULLAH KHAN VS Respondent: MUHAMMAD ASAR HUSSAIN and another
Court Name: Supreme Court of Pakistan Judge(s): Sajjad Ali Shah, Naimuddin Title: ZAFRULLAH KHAN vs MUHAMMAD ASAR HUSSAIN and another Case No.: Civil Appeal No,375-K of 1990 Date of Judgment:1994-04-14 Reported As: 1996 SCMR 1804 Result: Appeal dismissed
JUDGMENT
JUDGMENT ' SAJJAD ALI SHAH, J.---This appeal with leave is directed against the judgment dated 7-8-1987 of High Court of Sindh whereby Revision Application No,296/86 filed respondent No,1 Muhammad Asar Hussain is partly allowed decreeing suit to the extent that order of cancellation and subsequent allotment in favor of appellant Zafrullah Khan are declared as illegal and it is left open to respondent No,2, Karachi Development Authority to decide the question whether respondent No,1 Muhammad Asar Hussain has committed breach of terms of contract after giving him show-cause notice. Briefly stated the relevant facts giving rise to this appeal are as under: ' Muhammad Asar Hussain filed Suit No,1350/67 in the Court of 1st Senior Civil Judge, Karachi against Karachi Development Authority for declaration that he is allotted of Plot No,A-141 in Block N6.L in K.D.As'. Expansion Scheme No,2, North Nazimabad, Karachi and further cancellation of that allotment is illegal and inoperative. He also prayed for mandatory injunction directing K.D. A. To accept 40 per cent. Occupancy value from him and to deliver possession of the said plot. For the sake of convenience parties will be referred hereafter as plaintiff and defendant in the suit. It was claimed by plaintiff in the suit that he had applied for Allotment of plot described above measuring 233.33 square yards and after payment of Rs,150 as 10% occupancy value the same was allotted to him vide Allotment Order No,A-15272, dated 10-8-1961. Subsequently as per terms of agreement he could not make payment of 4% occupancy value for the reason that Demand Notice No,15272/1154, dated 27-3-1962 was issued late from the office of K.D.A. And was received by him after expiry of time stipulated therein for making such payment. He made application for extension of time and went on exploring all avenues to get permission to deposit the money and finally after a period of nearly 5 years vide letter dated 23-24967 he was informed by the K.D.A. That his allotment of plot
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was cancelled. K.D.A. As defendant in the suit filed written statement in which stand was taken that allotment of plot in favor of plaintiff was cancelled for the reason that demand notice dated 27-3- 1962 was issued calling upon him to make payment of 40% occupancy value before 15-4-1962 but the same was not done and further plaintiff was served with that demand notice as per postal acknowledgement receipt, which was in possession of K.D.A. It was also mentioned in the written statement that after cancellation the plot in question was allotted to Zafrullah Khan. Consequently plaint was amended on three occasions and Zafrullah Khan was added as defendant No,2, who also filed written statement. Defendant No,2 averred in the written statement that he had paid occupancy value and was in possession of the allotment order and the plot. For the sake of convenience Zafrullah Khan will be referred hereafter as defendant No,2. Keeping in view the pleadings of the parties as many as 14 issues were framed by the Trial Court. ' In the trial Court in the evidence plaintiff examined himself and deposed that he was unable to make payment in compliance with demand notice as he received it late after the expiry of date mentioned in it for deposit which was 15-4-1962. He met Mr. A.M. Bin Hamid, Administrative Officer (Lands) of K.D.A. And on his advice he made application to him on 20-4-1962 for investigation of his complaint that he received demand notice late and in that connection enclosed with that application original envelope showing date of stamp and also demand notice and further made request for extension of time to enable him to deposit money in the bank. He produced copy of that application Exh.A/4 and receipt Exh.A/5 showing that such application was received in the office of Administrative Officer. Plaintiff then explained in his deposition as to how persistently he was making efforts to obtain permission to deposit money, in compliance with the demand notice in order to be entitled to take over possession of the plot but did not succeed. In that connection, he produced documents which are on the record from Exh.A/6 to Exh.A/25. For the first time he heard from K.D.A. Was when he received a copy of letter which was addressed to the Executive Engineer, North Nazimabad asking him to give some information in respect of the plot in question. He produced copy of the letter as Exh.A/26. Finally vide letter dated 23-2-1967 plaintiff was informed that his allotment was cancelled and there was no ground to review the cancellation order at that stage. Plaintiff examined P.W.2 Rashid Hamdani Officer from the Habib Bank who deposed about the procedure of accepting payments of amount mentioned in the challah in favor of K.D.A. Emphasizing on the fact that the bank could not and did not accept payments after expiry of date mentioned in the challah unless time was extended for that purpose by K.D.A. ' On the other hand defendant No,1 K.D.A., examined S.M. Hussain, Assistant Superintendent working in the Land Department. He dealt with the plot in the suit which was first allotted to the plaintiff. According to this witness the demand notice for payment of occupancy value was issued on 27-3- 1962 which was served upon plaintiff on 28-3-1962 under registered A/D cover which was produced. That A/D cover is produced as Exh.B/1. Since same 40% occupancy value was not paid, allotment was cancelled on 25-5-1962 vide order copy of which was produced as Exh.B/2. After cancellation the same plot was allotted in favour of Zafrullah Khan vide order Exh.B/3. This witness further stated that on various representations made by plaintiff he was given final play in 1967 and copy of that letter was produced as Exh.B/4. While piecemeal cross-examination was going on services of this witness were terminated by K.D.A. And in his place in the trial Court was examined Shamsul Arfin who adopted the statement of his predecessor and also produced further documents and answered further questions in the cross-examination. Defendant No,2 Zafrullah Khan examined himself and produced documents to show that he was allotted the plot in dispute and that he had completed all the formalities. After appraisal of evidence produced by the parties including a very large number of documents, the trial Court in the final analysis dismissed the suit vide judgment dated 26-4-1982.
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' Being aggrieved plaintiff in the suit filed Civil Appeal No,308/82, which was dismissed vide judgment dated 23-8-1986 by learned Judge, Small Causes Court and Ex Officio Additional District Judge, Karachi. Having lost appeal plaintiff in the suit filed Revision Application No,269/88 in the High Court which was partly allowed vide judgment dated 7-8-1987, decreeing the suit to the extent that order of cancellation of allotment in favour of plaintiff and subsequent allotment in favour of a plaintiff-defendant No,2 Zafrullah Khan have been declared to be illegal and further it is left open to defendant No,1 K.D.A. To decide the question whether plaintiff in the suit has committed breach of contract after giving him show-cause notice. Perusal of impugned judgment shows that three points came under active discussion. Firstly that notice dated 27-3-1962 was reminder of compliance with earlier notice dated 18-10-1961 and in it time was extended up to 19-4-1962. Record shows that notice dated 18-10-1961 was not produced nor any issue was framed about it in the trial Court, as such it was a new plea. Secondly allotment could not be cancelled without giving plaintiff in the suit opportunity to show cause and in support reliance was placed on the case of Haji Noor Muhammad and others v. K.D.A. (PLD 1975 Karachi 373). Thirdly plaintiff in suit could not file suit for specific performance of contract, as he had not obtained possession so he was entitled to declaration as to title which could be granted by the Court as discretionary relief. Leave to appeal is granted to examine inter alia whether an additional show-cause notice before cancellation of allotment is necessary apart from notice calling upon allotted to make the deposit in terms of allotment order indicating therein also the result as per terms of allotment that failure to made deposit will result in cancellation of allotment. ' In order to appreciate findings of the High Court in the impugned judgment while disposing of revision and the point urged specifically and reflected in the leave granting order and other co- related contentions, it would be pertinent to recapitulate relevant facts in proper sequence in the light of terms and conditions of the agreement to find out whether notice was served or not for payment of 40% occupancy value and what consequence would flow from it and whether additional show-cause notice would be necessary before cancellation of allotment or not. ' Agreement is contained in the application which was filed by plaintiff in the suit for allotment of plot produced in the Trial Court as Exh.A/1 addressed to Karachi Improvement Trust. As deposed by the plaintiff he filed this application and applied for allotment of plot in the year 1961. He paid deposit of Rs,150 of approximately 10% of face value of occupancy right by enclosing pay order dated 12-1-1961 and further undertook to pay 40% of the cost of occupancy right exclusive of the sum deposited and excess if any to be adjusted towards computation of the said 40% of occupancy value to be determined on demarcation and measurement of the area of the plot. It is mentioned in paragraph 5 of the agreement/application that in case plaintiff failed to pay the said 40% of the cost of occupancy rights within one month from the date of the dispatch of notice sent to him by registered post at the address given below the trust would be at liberty to cancel the allotment made in his favor and occupancy right in the said plot can be allotted to any other person by the Trust. Paragraph 6 provides that in case an extension of time beyond the said period of one month is allowed by the Chairman. Karachi Improvement Trust, on applying for the same in writing plaintiff shall pay interest on the sum of money at the rate of 6% per annum for each month for the whole period of extension allowed. Paragraph 8 provides that until the said 40% of the occupancy value has been paid plaintiff will have no right to enter upon the plot or permit his agents, servants, employees or contractors to enter thereupon. Paragraphs 9 to 17 pertain to building construction and all other prerequisites connected therewith including sanction of plains and specifications in compliance with provisions of Trust Zoning Regulations Building Sanitary and posing Drainage Rules or standards or regulation as may be in force. Paragraph 13 provides that on payment of full occupancy value and all arrears of fees together with one year's rent advance plaintiff will be entitled to lease of the plot for the period of 99 years upon terms and conditions
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contained in the lease draft. Paragraph 14 provides that prior to the execution of lease plaintiff shall have no legal interest in the plot except that of licensee to enter upon the said plot for the purpose of erecting proposed building. ' Paragraph 18 of the agreement/application is important in nature and is reproduced verbatim as under:-- "I agree that in the event of my defaulting in the payment of fees, rates, taxes, charges, assessment impositions and other outgoings in respect of the plot allotted to me and the buildings and structures there within 21 days next after the same shall have become due and payable (whether lawfully demanded or not) or committing breach of any of the conditions herein contained the Trust may by notice in writing cancel the allotment of the plot immediately or at the expiration of the period specified in the notice whereupon the Trust may enter into and upon and retain possession of all the buildings, structures, materials and things therein for its absolute use and benefit but in such event the Trust may if it thinks fit on effecting a sale thereof pay to me the net sale proceed after deducting all sums owing to it and expenses incidental to the sale and such other sums by way. Liquidated damages as the Trust may reasonably estimate." In paragraph 20 which is the last paragraph of the agreement/application, it is mentioned that terms and conditions mentioned in this application constitute a firm offer on the part of the plaintiff to purchase occupancy rights in the plot and dispatch of letter Of allotment by Trust to the plaintiff by registered post at the address given below would constitute a binding acceptance of the said offer and thereby would be created binding agreement between plaintiff and the Trust. The terms and conditions mentioned in the agreement as stated above clearly show that there are two stages for issuance of notice. The first stage is calling upon plaintiff to pay 40% of the cost of occupancy right for which one month's time is to be allowed in the notice and if payment is not made with in the stipulated time, allotment would be cancelled. There is also provision for extension of period allowed for payment of occupancy value. After that stage is crossed then other formalities are to be observed in connection with construction of building and in that connection also fees, taxes and other charges are to be made and if default is made and such payment is not made within 21 days after it has become due, then also allotment can be cancelled but before that notice has to be issued. At the second stage after expiry of time in the notice it is open to the Trust to enter into and take over possession of all buildings, structures, materials and things thereupon. In the instant case the second stage had not arrived because the plaintiff could not cross the first stage as he was unable to pay 40% occupancy value within time stipulated in the notice. ' Plaintiff has deposed before the trial Court that he was allotted Plot No,A-141 in Block No,' L' measuring about 233.33 square yards in Town Expansion Scheme No,2, North Nazimabad. He has produced allotment order which is on the record as Exh.A/3. According to this order he was required to pay occupancy value within one month from the date of issue of such call for payment and on receipt of such payment he would be allowed possession of the plot enabling him to build thereupon. He was also directed that all payments should be made by him by a bank draft/pay order in favor of Karachi Development Authority. Dispute started as to when call notice for payment of occupancy value was issued by K.D.A. And served upon the plaintiff. Plaintiff has deposed in the. Trial Court that he received call for payment of 40% from defendant No,1 vide their demand notice No,15272/1154, dated 27-3-1962 and that notice was received by him after expiry of the last date of 5-4-1962 fixed by defendant No,1 for acceptance of the payment by the bank. He did not state clearly as to on what date he received that notice but insisted that it was received by him after expiry of time limit mentioned in it and in that connection he met Mr. A.M. Bin Harnid, Administrative Officer (Lands) of K.D.A. And on his advice submitted application dated 20-4-1962 alongwith copies of the demand notice an'' envelope in original for investigation of his complaint and extension of time for payment. He has produced copy of application dated 20-4-1962 addressed by him to Mr.
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A.M. Bin Hamid, Administrative Officer of K.D.A. Which is Exh.A/4 on the record. It is stated in this application as under:-- "Kindly refer to my interview with you on the above subject. As desired by you the envelope bearing the date stamp of the Post Office alongwith the contents is enclosed herewith for investigation. The same was received by me when the time fixed for the deposit had already expired. The despatch date on the Challan itself clearly shows that it was delayed in your office. ' It is, therefore, requested that you may kindly extend the date for payment of 40% O.V. And arrange the issue of revised Challans to enable me to make the payment as demanded by the K.D.A." ' S.M. Hussain was examined on behalf of defendant No,1 (KDA). At the relevant time he was working as Assistant Superintendent in the Land Department and had dealt with the case of plot in question. He deposed that plot in question was allotted to the plaintiff and demand notice was issued on 27-3-1962 for payment of occupancy value which was served and delivered upon plaintiff on 28-3-1962 under registered A/D cover which was produced as Exh.B/1. Occupancy value was not paid hence cancellation order was passed on 25-5-1962 which was produced as Exh.B/2. Plot in question was allotted to defendant No,2 on 5-8-1967. According to the plaintiff demand notice was received by him but after expiry of the time stipulated therein for the payment and the last date mentioned therein was 15-4-1962. He appeared before Administrative Officer, Mr. A.M. Bin Hamid on 20-4-1962. He has questioned this notice on three grounds: Firstly that time of full one month was not given in this notice from 27-3-1962 and instead three weeks' time was allowed which expired on 15-4-1962. If one month's time had been given from 27-3-1962, then the last date would have been 27-4-1962 instead of 15-4-1962. Secondly address of the plaintiff in Exh.B/1, is different from the address given by him in the application. Thirdly, acknowledgement receipt Exh.B/1 does not bear signature of the plaintiff but some other person has signed on his behalf. ' So far second and third objections of the plaintiff are concerned, they lose force in the face of the fact that it is admitted by the plaintiff that the notice in question did reach him ultimately though after expiry of time mentioned in it for payment. He does not mention the date on which this notice reached him but last date for payment mentioned in the notice was 15-4-1962 and he appeared before the Administrative Officer of K.D.A. On 20-4-1962 requesting investigation and extension of time. Now first objection of the plaintiff is which is important that when he received the notice, time mentioned therein for payment had already expired and since he was directed in the letter of allotment to make payments to K.D.A. By bank draft/pay order, no times was 'eft from him to make effort therefore, he did not approach the bank and requested the Administrative Officer to investigate his complaint that notice was issued late in the office of K.D.A. And also requested for extension of time to enable him to make the payment. ' In this context Mr. Iqbal Kazi counsel for the appellant has pointed out that initially demand notice was issued on 18-10-1961, directing plaintiff to pay 40% of occupancy value before 31-12-1961 and since the period for payment had expired plaintiff approached office of the K.D.A. And requested the Head Clerk for extension of time which was allowed up to 15-4-1962. Plaintiff had admitted this factual position in the application dated 23-12-1965 addressed to the. Chairman, K.D.A. Karachi copy of which is on the record as Exh.A/13 in paragraphs 5, 6 and 7. It was submitted by the plaintiff that the extension was intimated in the notice dated 27-3-1962 and the same was received late. He further stated that he had not applied for extension of time but had applied for change of plot in the order of allotment from North Naziabad to Federal B Area but since he was not obliged he was prepared to make payment of occupancy value in respect of the plot allotted to him but since time mentioned in the notice had expired he was entitled to clear period of 30 days. Plaintiff further stated that he had not concealed any fact and had mentioned this fact in paragraphs 4 and 5 of his application dated 23-12-1965 addressed to the Chairman, K.D.A. Which is Exh.A/13 on the record.
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' One thing appears very clear from the evidence brought on the record. Plaintiff had applied for allotment of plot and allotment order was issued in his favor. He was very eager as he should be, to make payment of 40% of occupancy value in order to get possession and to raise construction thereupon. According to the plaintiff he was served with notice late after expiry of time stipulated therein for making payment. There was restriction imposed upon him that payment had to be made through bank and bank would not accept money from him if time set out for that purpose as stated in the notice had expired. In such circumstances he was making persistent and hectic efforts to obtain extension of time. Even if time was extended once as it appears from the record again plaintiff did not have knowledge that such time was extended and he received notice late after expiry of time. Now if application filed by the plaintiff after issue of letter of allotment constitutes binding agreement between the parties then it is expected that K.D.A. Being statutory body should comply with the terms and conditions in a manner which is fair to both parties. Paragaraph-6 of the agreement very clearly provides that 40% of the occupancy value is to be paid within one month from the date of dispatch of notice to be sent to the plaintiff by registered post at the address given at the end of the application. Not only this is to be done but at the same time it is to be seen that the plaintiff must receive the notice so that he should have time allowed under the agreement to enable him to make the payment in the manner required In the instant case this is not done. Record shows that address in the application/agreement Exh.A/1 is 2/3-P, P.E.C.H. Society, Karachi (original documents in the suit record sent for and seen). Address of the plaintiff in postal acknowledgement receipt Exh.B/1 produced by K.D.A. Is 10/23/E, Nazimabad No,5, Karachi Additionally this receipt is signed by some other person on behalf of plaintiff. Plaintiff is right in claiming that he should be served on his address given by him in the application/agreement Exh.A/1 and also he should be given 30 days' time to make the payment. ' There is no dispute about the fact that after cancellation plot in question was allotted to defendant No,2 Zafrullah Khan who was working at the relevant time as the Superintendent in the Office of Commissioner, Karachi who was also Chairman of K.D.A. Zafrullah Khan in his cross- examination before the Trial Court has admitted as under:--- "It is fact that Commissioner being head of my department had recommended that plot if available may be allotted to applicant. I do not know if the K.D.As'. Director has also made an endorsement that if plot is available may be allotted to the applicant. I had not applied for allotment of the plot. The K.D.A. Offered me the suit plot at their own accord. It is a fact that I was eligible for the allotment of the plot from the K.D.A. As employee of the Commissioner Office. I understand that suit plot is measuring about 200 sq. Yds. I had filed an affidavit in response to the K.D.A. Office which I produce in the Court as Exh.D-2 and Exh. D-3. I do not remember to have signed and filed terms and conditions and any application in respect of the suit plot. I do not remember as when I have filed Exh.38. It is incorrect to suggest that vide Exh.D-7 is the first installment but it is a second installment. It is incorrect to suggest that I had paid the interest of Rs,1.88 for making the late payment. I do not remember to have received any challah for payment of second instilment of O.V. Along with Exh.D-6 I had made the payment of second instilment of occupancy value within one month from the date of receipt of Exh.D-6. I had paid the payment of the second instilment between 19th December, 1967 and 31st December, 1967." ' Plaintiff arguing his case before us challenged the action of the K.D.A. Of cancelling his allotment on the ground that it was done with mala fide intention. Evidence on record as stated above also shows that possibility cannot be ruled out that by way of contrivance plaintiff was disentitled in order to provide the said plot to defendant No,2 who was working in the Office "f Commissioner who was also Chairman of K.D.A. ' In the context of what is stated above it would be necessary to ascertain whether in the meantime fresh allotment order in favor of defender 2r Zafrullah Khan had become effective and had been
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acted upon or not. Plaintiffs has deposed that he received copy of letter dated 22-9-1966 Exh.A/26 (page 154 of paper book) addressed to the Executive…
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