FEDERAL HANDICRAFT Versus CIVIL AVIATION AUTHORITY
ORDER
1. MUHAMMAD JUNAID GHAFFAR, J.--- In all these Suits a common issue is involved as all the Plaintiffs assert that their Agreement(s) with Defendant No.1 is either a Lease or a Tenancy right but not a Licence, therefore, they cannot be ejected from their respective shops without due process of law. Today, all the learned Counsel have been heard on the listed application(s) as well as on maintainability of these Suits as raised on behalf of defendants and by this Court during hearing of the listed applications.
2. Learned Counsel for Plaintiff in Suit No. 2348 of 2016 has contended that Agreement dated 25.4.2015 is though worded as a Licence Agreement, but in fact is a Lease/Tenancy, Agreement, and therefore, even after its expiry on 10.11.2016, the Plaintiff cannot be evicted from the Suit premises as they have become statutory tenants. Learned Counsel has referred to Clauses 2, 3 and 4 of the Licence Agreement and submits that certain clauses are in contradiction to each other, insofar as payment of license fee and possession beyond the period of license is concerned, therefore, even after expiry of Agreement they cannot be evicted without due process. Learned counsel has also referred to an earlier Agreement dated 12.10.1976 and certain receipts to substantiate that Defendant No.1 used to collect rent for shops within the old Jinnah Terminal Building, therefore, for all legal purposes, the Plaintiff is a tenant and not a Licencee. Learned Counsel further submits that the Defendants have issued a challan for the entire month of November, 2016 which they have paid, therefore impliedly, the licence Agreement even otherwise, stands extended and Defendants be directed to issue challan for current month and so on and so forth. Learned Counsel further submits that there have been previous litigations amongst the parties, wherein out of Court settlement/compromise was reached showing the intention that the Defendants want to continue relations with the Plaintiff insofar as the Suit property is concerned, therefore, any attempt to evict the Plaintiff is unlawful. As to objection of maintainability of Suit(s), learned Counsel submits that by conduct of Defendants a right has been created in favour of Plaintiff to seek a declaration under section 42 of the Specific Relief Act, 1877, therefore, this objection is misconceived. Insofar as the objection with regard to Arbitration clause is concerned, learned Counsel submits that since Defendants have filed a counter affidavit, therefore, they are estopped from raising such objections. He further submits that time and again by conduct, impliedly the Agreement has been renewed whereas, selectively Agreements of other occupants of the shops have been renewed; hence, discriminatory treatment is being meted out to the Plaintiff. He submits that in view of foregoing submissions ad interim order passed on 8.11.2016 be confirmed.
3. Mr. Khalil Ahmed Khalil Advocate for Plaintiff in Suit No.2359 of 2016, in addition to adopting arguments of Mr. Mirza Adil Beg, submits that the Defendants cannot cancel the license Agreement without notice and a proper hearing opportunity. Learned Counsel has referred to Minutes of Meeting dated 21.8.1999, held between the occupants and management of Defendants, and submits that it has been agreed that period of License should be extendable, hence, now they cannot resile from such decision. He further submits that certain goodwill is attached to the Plaintiff's premises as they have been in occupation for more than 25 years and would suffer irreparably if they are evicted from the Suit premises abruptly and without due process. He further submits that the Agreement in question was entered into in 2015, however, it covers period starting from 2013 and therefore, it cannot be given retrospective effect and is to be counted prospectively from 2015 onwards. Per learned Counsel the contents of the license Agreement are to be read into which reflects that it is a Lease and or a Tenancy Agreement. Similarly, Mr. Safdar Hussain appearing for other Plaintiffs has adopted the arguments of Mr. Mirza Adil Beg and Mr. Khalil Ahmed Khalil.
4. On the other hand, learned counsel for Defendants submits that license stood expired on 10.11.2016, therefore, a Suit for declaration in respect of an expired Agreement is not maintainable. Learned counsel has referred to section 52 of the Easement Act, 1882, and so also section 62(c) and submits that since license in instant case fulfills the requirement of Easement Act, therefore, it cannot be termed as a Lease or a Tenancy Agreement. He further submits that no vested right has accrued to the Plaintiffs nor any extension of the Agreement arises, whereas, the Defendants, intend to allot these shops through an open tender and the Plaintiffs are at liberty to participate and offer their bids. Learned Counsel submits that instant Suit(s), are otherwise barred in terms of sections 21(d), 42 and section 56 of the Specific Relief Act as no declaration can be granted in favour of a licensee. He further submits that insofar as the earlier Agreement and compromise reached between the Plaintiffs and Defendants is concerned, they have no nexus with the present Agreement in question which is independent in nature and was specific in time therefore, the same cannot be extended nor the Court has any power to rewrite the Agreement. Insofar as Minutes of the Meeting are concerned, he submits that it does not create any right, whereas, the Plaintiffs had themselves agreed to enter into an Agreement in the year 2015 for a specific period starting from 2013, therefore, the plea of giving retrospective effect is not justified. In support learned Counsel has relied upon the cases of Riaz Ahmed and others v. Government of Pakistan and others (2000 SCMR 1181), Messrs Sign Source v. Messrs Road Trip Advertisers and another (2005 CLC 1982) and Aftab Hussain v. Government of Sindh and 2 others (2015 MLD 1688).
5. I have heard all the learned Counsel and perused the record. The facts in all the cases are almost identical, except the dates of Agreement(s), however, all of them have expired on 10.11.2016, whereas, they were issued License Fee Challans for November, 2016, and on 8.11.2016, this Court was pleased to pass an interim order in the following terms;
6. "In the meantime since challans were issued by the defendants in pursuance whereof the plaintiff has paid the requisite amount for the month of November, 2016 let to such an extent parties maintain status quo till next dated."
7. The precise case as setup on behalf of the Plaintiffs is that the Agreement in question is not a License. Agreement but a Lease/Tenancy Agreement, and therefore, they cannot be evicted from their shops housed at Jinnah International Terminal, Karachi, without due process of law. To appreciate the controversy in hand, it would be advantageous to refer to certain relevant clauses of the Agreements which read as under:-
1. "STATUS OF THE LICENSEE
8. It is clearly undertaken by the Licensee that the contents of this License Agreement or any part thereof shall not be deemed, claimed, construed or interpreted in a manner, amounting to creation of an easement, lease or any other interest except what is explicitly stated in this license Agreement, in favour of the Licensee and in respect of the Premises. It is also clearly understood that the licensee shall have the status of contractor and shall not consider to be a servant or agent or tenant of the Licensor in any manner. The Licensor shall be deemed to be in exclusive possession of the Premises at all the times.
2. DURATION
9. The License in respect of the premises and/or business, shall remain in force of for a period of THREE (03) YEARS w.e.f. 11-11-2013 to 10.11.2016. Provided that the Licensor reserves the right to cancel the permission in public interest at any time, as decided by the Director General or the Licensor, without notice and without any cause being assigned and without any compensation.
3. LICENSE FEE: a) The Licensee shall pay to the Licensor through Airport Manager, JIAP, Karachi Security Deposit as per Clause 4 and license fee in advance for the current month i.e. on the date of start of business or possession of the premises is handed over to the Licensee, as the case may be. Thereafter, THE LICENSE FEE OF RS. 75,181/- shall be paid in advance up to 10th of each month to which it relates, whether the licensee receives any bill or not. If licensee failed to pay monthly license fee on due date, late payment surcharge thereon @ 5% shall be imposed. The aforesaid license fee shall be enhanced by 10% during subsequent years. b) ............. c) .............
7. EXCLUSIVE POSSESSION AND FREE ACCESS OF THE LICENSOR
10. Nothing contained in this license Agreement shall prevent the free access/entry or use of the premises by the Licensor/Airport Manager/or his authorized representative who shall be deemed to be in exclusive possession of the premises at all times, who shall be at liberty to inspect or use the premises any time and the Licensee shall not do or permit to be done anything which may cause inconvenience or annoyance to such person or the Licensor.
9. EXPIRY/DETERMINATION OF THE LICENSE a) On expiry of the license period, relation between the parties shall be determined and cease, to exist and the Licensee shall be deemed to be in unauthorized and illegal occupation of the premises. b) Unless extended or renewed specifically in writing, the license shall be deemed and construed to have determined and concluded and the Licensor shall take over possession of the premises without any notice, notwithstanding receipt of any payment under clause 3(c). c) This licence, which is personal in nature, shall cease to exist in the event of death/winding up/non-existence of the Licensee and no right under this license shall be deemed to have been transferred or succeeded in any manner, unless specifically granted/transferred in writing by the Licensor. d) Notwithstanding expiry of this agreement or sooner determination/cancellation, if the Licensee remains in occupation of the preemies for any reason whatsoever, the Licensee shall be responsible and liable to make payment of the dues for the period he occupied/possessed the premises."
11. Perusal of the aforesaid clauses of the Agreement reflect that the Plaintiffs have agreed to their status as described hereinabove, whereas, it is an admitted document being relied by them, therefore, I am unable to agree with the contention of the learned Counsel for the Plaintiffs that instant Agreement is not a license Agreement, but a lease/tenancy Agreement. Clause 1 very clearly provides that the Agreement or any part thereof shall not be deemed, claimed, construed or interpreted in a manner, amounting to creation of an easement, lease or any other interest except what is explicitly stated in this license Agreement. It further provides that the plaintiffs shall not consider to be a servant or agent or tenant of the Licensor in any manner. Whereas, the Licensor shall be deemed to be in exclusive possession of the premises at all the times. The Agreement further provides a duration period and the term of the license expires on 10.11.2016. It further provides that on expiry of the license period, relation between the parties shall be determined and cease to exist, whereas the Licensee shall be deemed to be in an unauthorized and illegal occupation of the premises, and further provides that unless the same is renewed specifically in writing, the licensor shall take over possession without notice, notwithstanding receipt of any payment under clause 3(c). It further provides that notwithstanding expiry of this Agreement, if the Licensee remains in occupation for any reason whatsoever, he is liable to make payment of the dues for the period he remains in possession after the expiry of the Agreement. Therefore, after going through the contents of the Agreement, it can be safely said and held that the Agreement in question is not a lease and or tenancy Agreement but a license Agreement.
12. According to the learned counsel for the Plaintiffs, agreement between the parties is a Lease Agreement and not merely a License and cannot be revoked unilaterally even on its expiry, whereas, through instant Suit the Plaintiff(s) seek declaration to that effect. it appears to be an admitted position that the license in question stands expired as of today whereas, the interim order passed on 8.11.2016 was also to the extent of November, 2016 as License Fee Challans were already issued to them. The request for confirming the status quo order, therefore, even otherwise does not advance the case of plaintiffs any further as no Challans have been admittedly issued thereafter.
13. It is also pertinent to observe that in view of section 60 of the Easements Act, 1882, the Licensee [plaintiff(s)] have a very limited right as against a tenant, who cannot be evicted otherwise than provided under the Rent Laws. Section-60 of the said Act provides that License can be revoked by the Grantor, unless it is coupled with a transfer of property and such transfer is in force; or the licensee, acting upon the license, has executed a work of permanent character and incurred expenses in this regard. In the instant matter, I am afraid that both the aforesaid conditions are not attracted, (it is only averred that valuable goods are lying in their shops), whereby protection could be sought in terms of section 60 of the Easements Act, whereas, section 62 of the Easement Act, 1882, clearly provides that the license is deemed to be revoked, once it has been granted for a limited period and on expiry of such period, it stands revoked. As of today it stands expired, therefore, no declaration as prayed can be granted by this Court.
14. The case of the plaintiffs in fact is more appropriately covered in terms of section 52 of the Easements Act, 1882, which provides that where one person grants to another, a right to do, or continue to do, in or upon the immoveable property of the grantor, something which would, in absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a license. In the case of grant of permission for using the shops in question in a restricted area (i.e. Jinnah International Airport), even otherwise no lease can or has been granted and it is only a licence and no interest in the property is assigned or transferred. Even if word "lease" would have been used in the agreement, even then it would not have conferred any title on the plaintiffs to seek a declaration from this Court. It is in fact not the transfer of ownership in the property; rather it is merely a permission to use or to do something lawfully, which otherwise would be unlawful to do so. It has never created or conferred rights physically in respect of the property.
15. A learned Single Judge of this Court in the case of Messrs Zaidis Enterprises and others v. Civil Aviation Authority (PLD 1991 Karachi 181) had the occasion to deal with somewhat identical facts inasmuch as the plaintiffs in that Suit were also claiming to be tenants/licensees of CAA in respect of different shops situated in the Transit Lounge of Jinnah International Terminal, Karachi. The same arguments were raised on behalf of the plaintiffs that they are tenants/licensees, have invested huge amount on the shops and paying rent regularly, that there was a renewal clause in the agreement etc. The learned Single Judge while hearing the injunction application after observing as follows dismissed the same and also rejected plaints in all the Suits:
16. The learned Counsel for the plaintiffs cited several authorities including Halsbury's Laws of England (3rd Edition), Landlord and Tenant, Page 432; American Jurisprudence (1941 Edition), Volume 33 on Licenses, pages 406-408, which need not be discussed as it is crystal clear that the relationship between the parties is that of Licensee and Licensor and the agreement executed between them is clearly a License Agreement.
17. The learned Counsel for the plaintiffs further argued that in case, it is held that the Agreement under discussion is held to be a license, it is a license coupled with interest, and therefore, it cannot be revoked in view of section 60 of the Easements Act, 1882. I have already pointed out above that under the provisions of the License Agreement, no interest of any kind whatsoever in the property has been transferred to the plaintiff and no work of a permanent character can be executed by the plaintiff and if executed the same shall become the property of C.A.A on termination of the Agreement. The argument is, therefore, devoid of any merit.
18. In view of hereinabove discussion, I am of the confirmed view that the agreement between the plaintiffs and C.A.A. is a License Agreement and that all the plaintiffs are licensees of C.A.A. and accordingly not entitled to the relief of injunction. The Licenses having expired, the plaintiffs have no right to remain in the premises and the defendants would be justified in taking action against the plaintiffs for obtaining possession of the premises in accordance with law. If the plaintiffs are aggrieved by the action of C.A.A their remedy is not by way of injunction but by way of damages as held in PLD 1965 SC 83.
19. In the case of M. A. Naser v. Chairman Pakistan Easter Railways (PLD 1965 SC 83) the Hon'ble Supreme Court has been pleased to observe as under;
20. From the above provisions it is clear that this agreement merely conferred a right to carry on business of catering in the Refreshment Rooms and on the Buffet Cars. They were not given any general right of occupation but only a right to use the Refreshment Rooms allotted to them for the exclusive purpose of catering refreshments. Such a right does not amount to easement as defined in section 4 of the Easements Act or an interest in the property. Nor can it be regarded as a licence 'coupled with a transfer of property' within the meaning of section 60 of the Easements Act. Nor can it be suggested that the Contractor was required 'to execute any work of permanent character' in connection with the business. No doubt his business may involve complex arrangements for continued supply of refreshments both solid and liquid but this cannot be regarded as "execution of a work of permanent character".
21. Mr. Pal faintly suggested that provision regarding assignment of the benefits of the agreement indicates that it was intended to be an irrevocable licence. This suggestion, however, overlooks the fact that such assignment was only permissible with the consent of the Administration. After fully examining the provisions of the agreement we have come to the unhesitating conclusion that this licence does not fall either within clause (a) or (b) of section 60 of the Easements Act and therefore, it was revocable at the will of the grantor. We may, however, point out that there may be cases where parties by special contract may make the licence which is prima facie revocable under section 60 an irrevocable one, but these clauses of this agreement envisage no such intention.
22. Thus this being a revocable licence, the revocation thereof cannot be prevented by injunction. In a case like this the licensee is entitled to a reasonable notice in accordance with the D provisions of section 63 of the Easements Act. If however, the licence is revoked without reasonable notice the remedy of the licensee is by way of damages and not by way of an injunction.
23. It may also be pointed out that as this contract cannot be specifically enforced, clause (f) of section 56 of the Specific Relief Act will operate as a bar to the grant of injunction. Section 21 of the Specific Relief Act provides that......
24. From the above provisions licence and as adequate relief may be obtained by way of damages this contract, cannot be specifically enforced and as such no perpetual injunction can be granted in this case.
25. In the suit there was also a prayer for a declaration under section 42 of the Specific Relief Act that the contract in question was still subsisting. The learned counsel has not pressed this point before us. Under the provisions of section 42 of the Specific Relief Act a person entitled "to any legal character" or to "any right to property" can institute for a declaratory relief in respect of his title to such legal character or right to property. It will therefore, suffice to say that section 42 does not contemplate a suit like the present one.
26. A learned Division Bench of this Court in the case of Noorani Traders, Karachi v. Pakistan Civil Aviation Authority (PLD 2002 Karachi 83) has been pleased to hold as under;
27. It would be seen that the controversy between the parties is that on the one hand, the appellant has disputed the cancellation of the Licence Agreement being an alleged arbitrary, mala fide and discriminatory exercise whereas on the other hand, the respondent has denied this claiming the right to cancel the Agreement in terms of powers derived from the Agreement itself as well as being in the public interest. The legal position regarding the rights and obligations of a licensee is well-settled inasmuch as a licence does not contemplate a transfer of interest in property and it is purely a permissible right which is at the behest of the grantor. This position is in contradistinction to a lease whereby there is a transfer of interest and an exclusive right to possession is granted. This would therefore mean that a licensee holds the licensed property purely at the behest of the grantor which can at any stage be revoked in which event the licensee's only namely would be a suit for damages, as specific performance or other equitable relief would not be permissible in the circumstances of the case. The above formulation of law finds full support in the Easements Act itself section 60 of which allows the revocation of a licensee unless it is coupled with a transfer of property of the licensee has executed works of a permanent character in the licensed premises. Further sections 63 and 64 of the said Act provides for the consequences of such revocation viz. reasonable time to the licensee for vacation of the property and his right to recover compensation for damages etc. as result of such eviction. In these circumstances, therefore, a suit for specific performance would not be maintainable as laid down by the Honourable Supreme Court long ago in M.A. Nasir v. Chairman, Pakistan Eastern. Railways and endorsed by the superior Courts from time to time viz., in Royal Foreign Currency Exchange v. Civil Aviation Authority, Zaidi's Enterprises v. Civil Aviation Authority (supra) etc.
28. A learned Single Judge of the Lahore High Court in the case of Abdul Rashid Khan and 8 others v. President Services Institute P.A.F. Base, Lahore (1999 MLD 1870) has dealt with the term License and Lease in the following manner;
16. Section 60 read with section 62 leave no doubt that any licence with an agreement, say for term of a year, would always be revocable at the volition of the grantor. This is further shown by various contingencies mentioned in section 62, thus, when the licence is for a limited period of time, then the licence is deemed to have been revoked when the period expired in this case, there is period provided in the licence and, consequently. On the expiry of such time, it would be deemed to have been revoked irrespective of fact whether any superstructure has been raised by the licensee and section 60(b) would have no application.
21. As regards second contention that petitioners cannot be dispossessed otherwise then through a civil action, it may be stated that a licensee merely has a right to use the property and such a right does not amount to an easement or an interest in the property but is only a privilege given to the licensee by the licensor. After termination of licensee, the licensor is legally entitled and has a right to deal with his property in the manner he feels like. This right, he gets as owner in possession of the property against possession of the licence, would be deemed to be possession of the lawful owner. He needs not to bring a decree of the Court to obtain and enforce this right but is entitled to resist in defence of his proprietary right the attempts of licensee to come upon his property by exerting necessary and reasonable minimum force to expel the trespasser. If, however, licensor uses excessive force, he may make himself liable to be punished under the prosecution, but he will infringe no right of a licensee.
22. There is another aspect of the matter, admittedly the licence of the petitioners has expired; their possession cannot be termed to be lawful; the termination letter has been issued to them as far back as August, 1997, and thus, petitioners, in view of above, cannot seek indulgence of this Court to grant them an equitable relief. Learned Deputy Attorney-General has rightly argued that Constitutional jurisdiction by High Court, shall not be exercised to perpetuate the injustice, as such jurisdiction being discretionary could only be pressed into service to foster cause of justice, public good, High Court should refuse to exercise its jurisdiction if by doing so, instead of advancing administration of justice, it could be defeated; to provide any relief to the unlawful occupant of a Government property, would be tantamount to provide help and assistance by the Courts.
29. Insofar as the arguments that no proper notice has been given for eviction and the plaintiffs have been condemned unheard, it appears that the action which is being initiated against the Plaintiffs is admittedly after expiry of the Agreement in question; therefore, this arguments also fails as no notice is required in such circumstances. At the most this argument could have sustained if any action was being taken by the Defendants during validity and subsistence of the Agreement in question and the Court would have examined that whether the action has been taken within four corners of law or not. However, insofar as instant matter is concerned, admittedly the license has since expired; therefore, I am of the view that neither any further notice nor any hearing is required to be given to the Plaintiffs.
30. The learned counsel for all the plaintiffs have vehemently argued that agreement in question is a tenancy agreement, therefore, plaintiffs cannot be evicted without due to process of law, to which all of them were confronted, that in such eventuality, how, even otherwise a declaration could be given by a Civil Court to protect their tenancy rights. All of them could not satisfactorily respond nor could refer to any precedents to support their contention. Notwithstanding this, the agreement in question provides that licensee is required to pay license fee in advance up to 10th of each month to which it relates, whether the licensee receives any bill or not. In view of such position, if the plaintiffs feel that they are tenants of defendants, and have not been issued any bills for payment of license fee of current month (rent according to them), and terming such non-issuance of Bills, as refusal to receive Fee (rent), then they had their remedy as a tenant under the relevant applicable rent laws, to file a Rent Case for deposit of license fee (rent according to them) before the Rent Controller. Therefore, even on their assertion and averments in the plaint, instant Suit(s) appear to be barred in law.
31. As to the claim of damages in some of the cases and not all, it would suffice to observe that since no right to sue accrues on the basis of expired licenses in the instant matter, the question of claiming damages also does not arises as it is dependent on the agreement in question and is not an independent claim, whereas, instant Suits have been filed for declaration as to right to renewal of the agreements and for restraining defendants from evicting them without due process of law. Therefore, the claim for damages is at the moment premature as they have not been dispossessed as yet, whereas, except claiming billions as damages in the prayer clause(s) nothing else has been pleaded on their behalf. In fact as of today no cause of action has accrued for claiming such damages as no unlawful action has been taken against them. It is only in anticipation that the plaintiffs have claimed damages as well and for that the cause of action would only arise once any such action is taken and is impugned by them which will be dealt with by the Court in accordance with law.
32. The plaintiff's entire case as set up in the plaint and argued by the learned Counsel is dependent on their claim that the Agreement in question is a tenancy and or lease Agreement and therefore, a declaration ought to be given in favour of the Plaintiffs. Since I have come to the conclusion that the Agreement in question is a license Agreement and not a lease/tenancy Agreement, it appears that instant Suit(s) are barred in law in terms of sections 21(f), 42 and section 56 of the Specific Relief Act, whereas, there case is also hit by section 62 of the Easements Act, 1882. Though no specific application for rejection of plaint has so far been filed on behalf of the Defendants, however, this Court can always raise and address such objection at any stage of the proceeding(s) as it is a settled proposition of law that a still born Suit must be buried at its inception and it is the primary duty of the Court to examine and see that whether the Suit is maintainable and the relief(s) being sought can be granted by the Court or not. Rather the Court is under an obligation to reject the plaint in such Suit(s) without any formal application from the party. Reliance in this regard may be placed on the case of Raja Ali Shan v. Essem Hotel Limited (200 SCMR 741), Haji Abdul Karim and others v. Messrs Florida Builders (Pvt.) Limited (PLD 2012 SC 247), Haji Abdul Mateen Akhunzada and another v. District Co-ordination Officer/Deputy Commissioner, Quetta and 5 others (PLD 2012 Balochistan 154) and Burmah Eastern Ltd. v. Burmah Eastern Employees Union and others (PLD 1967 Dacca 190). The learned Counsel for Plaintiffs were confronted specifically as to maintainability of instant Suit(s) which has also been raised by the learned Counsel for Defendants, therefore, it is within the competence and powers of the Court to reject plaint under Order VII, rule 11, C.P.C.
33. In view of hereinabove facts and circumstances I am of the view that instant Suit(s) are not competent being barred in law as stated hereinabove, therefore plaint in all Suit are hereby rejected under Order VII, Rule 11, C.P.C. Resultantly all pending applications have become infructuous and are dismissed accordingly.
34. ZC/F-10/Sindh sPlaint rejected.