M/S Shamsi Builders Vs The KP Culture & tourism

PESHAWARHIGH COURT. SHAWAR

(JTJDICIAL DEPARTMENT)

Writ Petition 3977-P12023.

IWs Shamsi Builders Limited Karachi through its Authorized representative/Chief Executive.

Petitioner.

Versus

The Khyber Pakhtunkhw&, Culture &, Tourism, Authority, through its Director General, 13-A Ktryber Road, Peshawar etc.

..... ....Respondents.

For the Petitioner: Syed Tanveer Ashraf, Advocate.

For the Respondents: IWs Muhammd Ameen, Kundi, Rehmat Kundi, Asghar Khan Kundi Advocates and Mohammad Inam Yousafzai, AAG alongwith Asghar Ali, Director BCA, GDA, Essa Khan, Dy.

Director(Properties).

Date of Hearing: 25.6. 2025

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WIOAR AHMAD, J,- The petitioner was a public limited company incorporated under the Companies Ordinance, 1984.

In early 2007, the then Sarhad Tourism Corporation ("STC") of N.W.F.P. (now I(hyber Pakhtunkhwa), invited competitive bids via newspapers for granting a 30-year lease of a plot just over 4 kanals in Main Baz.aar, Donga Gali, District

Abbottabad, to develop a tourism complex consisting of \e./

rooms, suites, restaurants, ffid related facilities. The petitioner, a leading business group, participated and was declared successful bidder. They executed lease agreement on I June 2007, but it remained unregistered initially because Galiyat Development Authority ("GDA") had not yet transferred the plot to STC. On 4 December 2007, the lease was amended to include an additional 7 marlas, resulting in a total leased area of 4 kanals and 7 marlas. On 7 March 2008, GDA issued an NOC transferring the plot to STC, and the lease agreement was registered on l1 June 2008. The petitioner paid Rs. 3,600,000 as advance rent for the first three years, Rs. 1,000,000 as a security deposit, Rs. 315,000/- for the added 7 marlas, and spent approximately another Rs. 1,000,000 on registration, totaling around Rs. 6 million.

Under clauses 3 and 4 ofthe I June 2007 lease, the petitioner was required to prepare a master plan for the tourism complex, subject to STC and GDA approval, as a prerequisite to constnrction. STC cancelled the lease by letter dated 18 February 2010, stating that no construction had been initiated or completed within the two-year grace period, which ran from 1 Jture 2007 to I June 2009. The petitioner challenged that cancellation in Writ Petition No. 113 of 2010 before the Peshawar High Court's Abbottabad bench; STC filed comments, and on 13 May 2010, the Court accepted the petition and issued directions. Despite that, GDA refused to

approve the sitelbuilding plan, citing the amended section 13 of the GDA Act (1999) a provision that, it claimed, barred GDA from approving such plans. On 2 }/ray 20ll STC served a further notice (received 5 May), demanding plan approval within one month and warned of lease termination; the petitioner responded on 30 May 2011. On 14 June 20L1, the petitioner filed Writ Petition No. 348 of 2011 in Abbottabad Bench, against cancellation. The Court restrained adverse action and ordered maintaining status quo. Subsequently, a Division Bench issued notices in 22 related petitions and clubbed the cases together, though the status-quo order remained effective. On 29 May 2023, respondents submiued Letter No. KPCTA/L&P/Dong Galil 4.26N ol:Il202l I 6823 -26, dated, 29.05.2023 that duy, and on 15 June 2023, the Court disposed of WP 3481201I having become infructuous.

Petitioner then filed Review Petition No. 94-P/2023 under Section II4 CPC/Order XLVII CPC. On 18 July 2023 the Court granted interim status guo, which it extended on 26 July 2023. After hearing the review at length, the Division Bench directed the petitioner to initiate a fresh writ petition resulting in the present constitutional petition.

2.Arguments heard and record perused.

3.Perusal of record reveal that while passing termination order of the petitioner, petitioner have not been served with any notice nor afforded an opportunity of hearing. Although

respondents have annexed copy of notice as annexure-B to their comments but there is no proof of effecting its service on the petitioner. Learned counsel representing Tourism Authority was specifically asked whether any proof of service of notice on the petitioner was available with the department but he could not produce any such proof. Same has not been annexed with the comments also. In such circumstances service of notice on the petitioner cannot be presumed. He had been condemned unheard and therefore, the impugned order is not sustainable on this score. Reliance may hereby placed on judgrnent of Hon'ble Supreme Court of Pakistan rendered in case Khushdit Khan Malikvs. Secretary, Ministry of Defence Rawalpindi Cantt and others report as PLD 2016 SC 173, wherein the Hon'ble Apex Court held that the rule of natural justice should be deemed embodied in every statute, and that adminisfative authorities should not pass any order detrimental to a person, unless they afforded him an opportunity of hearing by complying with the rules of natural justice. Relevant observations of the Apex Court ate reproduced hereunder;

14.There is another aspect of the matter, which shall not go unnoticed. In this case, the appellant was successful in the baltoting process and got a plot; he deposited the seed money/installment, therefore, a decisive step was taken in the matter and vested right had already accrued to the appellant, hence unilateral cancellation of plot from his name without any show-cause notice to him, clearly amounts to condemning him unheard against the principle of natural justice. By now, it is well embedded and well entrenched principle of justice that the principle of natural justice shall Le construed to be a part and parcel of evely Statute even if it does not contain it and shalt apply to all proceedings' whether iudicial or administrative in nature. In this regard, reliance may be placed on the case of Mrs. Anisa Rehman v.

P.L.A.C. and another (1994 SCMR 2232). Therefore, on this score too, the impugned order being against the principle of natural justice is not sustainable in law.

Further reliance is placed on the case of Itlazara (Hitl Tract) Improvement Trust through Chariman and others reported as 2005 SCMR 678.

4.The reason for cancellation of the lease agreement was also not found appealable. In para-l of the impugned order background and history of the matter has been narrated while in para-2 is the order the reasons for cancellation of lease have been mentioned. Para-Z of the order is also reproduced for ready reference;

2.Order of Cancellation: -

l. That as per Clause-04 of the lease agreement, your Firm/Company was supposed to submit the Building PlanllVlaster Plan for the construction of the Project to be governed under GDA Bye-Laws and Rules but almost eight (08) times your Firm/Company submitted faulty site plan not in consonance with the GDA Building Bye-Laws and Act which inflicted heary losses to the public exchequer.

2, That your Firm/Company approached Peshawar High Court twice, because, in the earlier decision of the Peshawar High Court Abbottabad Bench, the lease money would be started/commenced subiect to the approval of the Site Plan and by this way your Firm/Company lingered-on the court proceedings intentionally which caused colossal loss to the public money.

3.That your Firm/Company was already in possession of Plot and during pendency of Writ Petition, You iltegally started Parking over 04 Kanals Land at Donga Gati and by collecting parking fee of Rs. 2001- per vehicle during this period.

In view of the above, I Director General of Khyber Pakhtunkhwa Tourism Authority has decided to cancel your lease agreement by exercising powers within the meaning of Claus e-12 & 14 of the lease agreement dated 0l-07-2008, while for{eiting your Security amount of Rs. I million & 3-years lease money of Rs. 3.600 million'

initiatly paid to TCKP by your lirm in advance, with \ immediate effect.

5.First of all it should be noted that the impugned order of cancellation of lease had been made during pendency of earlier writ petition filed by petitioner bearing No. 348 of 201 1 where this court had also earlier issued an injunctive order on t4.6.201 l. The main reason for cancellation, as mentioned in the order and the comments was that respondents have not been able to approved his building plan from Galiyat Development Authority ("GDA") and could not raise construction of the plot in accordance with the terms of his lease earlier granted to him. The lease deed was containing a condition providing a timeline for construction whereon respondents was relying, which was contained in para-S of the lease deed and same is also reproduced below;

" 5. The Master plan, once approved by the lessor shall be executed and complete within a period of two years. Also all works required under the master plan shall be undertaken by the lessee at his own cost, without making any claim in respect thereof to the lessor."

It is important to note that timeline would have started once the master plan had been approved by the lessor. It is an admitted fact also mentioned in the impugned order reproduced above that petitioner had submitted construction plan 08 times but same had not found favour with the concerned branch of GDA and every time it was objected by GDA. There has also been a long history of litigation. Lease of petitioner had also been earlier cancelled on 18.2.2010 which had been challenged by him through WP No. 11312010. Same

had also been allowed by this court vide order dated 13.5 .2010 with the following order;

13.Clause-l2 of Lease Agreement which has been reproduced in letter Impugned herein would reveal that lesior can teminate the agreement in case the lessee does not carry out construction work in accordance with approved deveiopment master plan which, essentially, is indicative of the fact that for commencement of construction, approval of master plan is/was a must hence liability was upon STC to get procured the approved plan from GDA and no slackness on the part of petitioner is forthcoming on record' In such state of affairs, there is no dispute whatsoever qua terms and conditions of agreement hence argument of respondentrs counsel that petitioner ought to have sought for arbitration is devoid of any substance. Unless and until master plan is approved and requisite NOC Issued by GDA' no question of raising construction over the plot leased out to Petitioner would arise. Contention of counsel for GDA that since the lease agreement stood expired, therefore, no action on master plan submitted by petitioner has been taken, is devoid of any iorce, either. In fact, duty was cast upon respondent No.l, too, to have had passed appropriate orderc on master plan and communicated to petitioner because orders thereupon were awaited since long.

14.In this case, it is not necessary for us to say more than this that the circumstances which we have enumerated above lead us only and lrresistible conclusion that each and every of the respondents including termination of lease were pregnant with malafide and Infected with a of power necessitating Inter{erence by this court IN of Constitutional Jurisdiction. \ile would, admit and allow the instant petition thereby Impugned letter of respondent No. 3 together with other of all the respondents hindering petitioner to construction over the plot in question to be without urisdiction and lawful authority hence of no legal effect would direct respondents 2'4 to facilitate q ua obtaining requisite NOC and approved plan from No.l within a reasonable time preferably four m period and respondent No.l shall pass a orders to this effect within such period with to the petitioner. Since detay was not occasioned on the of petitioner' therefore, period of two yearc la lease agreement shall be reckoned from the date of of plan and issuance of NOC by Respondent No. 1. O accordingly."

Then the matter could not proceed funher and petitioner felt need of filing another writ petition No.

348l2}l I whdre stay had also been issued on 1 4.6.201 1. Same writ petition was pending when the lease of petitioner was terminated. While dealing with said case and other connected matters this c$urt had rendered a judgfnent on 15.6.2023 but in

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said judgmentrwrit petition of the petitioner had been freated

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as having become infirrctuous because of cancellation of the lease. Relevant observations in respect of case of the petitioner has also been reproduced for ready reference;

..4. During the court of hearing, letter dated 29,5.2023 issued by the Khyber Pakhtunkhwa Culture & Tourism Authority is produced, whereby the lease agreement dated 01.6.2007 in respect of Tourism Complex Donga Gali has been cancelled and as such, petitions filed by lVUs Shamsi Builders Limited have become infructuous."

The history of litigation and the fact that earlier master plan had never been approved by the GDA despite efforts of the petitioner has also been reflected in the impugned order. [n such circumstances petitioner could not be blamed for the delay in construction, solely. The recital in the original deed has also been to the effect that the timeline would start after approval of the master plan. Since the master plan had not been approved so the time had not started running against the petitioner justiffing termination of the lease deed. An additional reason of putting the plot to another use of parking by the petitioner has also been mentioned in the impugned order but in said respect no evidence could be brought on record by respondents and keeping in view the fact that petitioner had not been issued any earlier notice restraining him from such alternate use or subsequent notice for affording him an opportunity of hearing, said ground is also not found substantiated and sufficient for cancellation of the lease. Order of termination of the lease was therefore found not sustainable.

6.Learned counsel for respondents also raised an objection as to existence of an arbitration clause in the lease agreement. Although an arbitration clause was existing in the agreement but keeping the history of past litigation in mind particularty the fact that this court had also once allowed writ petition of the petitioner giving certain directions to the respondents, this court is not inclined to leave the matter for arbitration. This court had expressed certain observations in the earlier judgment casting certain obligation of the respondents as mentioned in detail in the above reproduced paral3 and 14 of the judgment which could not even be demonstrated by respondents to have been fulfilled by them.

As per arbitration clause, Secretary Tourism departnent has been agreed to be the sole arbitrator but the fact that earlier this court had taken cognizance of similar controversy, decided same on merits by rendering express finding, this Court is not inclined to allow the arbitrator to pass a different judgment. Besides, respondents have been participating in litigation between the parties for the last almost 15 years. The objection as to the arbitration clause had not been raised at the earliest available opportunrty in the earlier filed writ petition and same cannot be allowed to be raised at this stage. Instant writ petition has also been pending before this Court since 5th September, 2023 where all the respondents have filed their coilrments, joined the proceedings and they had never filed any application at the occasion of their first appeaxance for

stopping of the proceedings or referring the matter to the

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arbitration. An arbitration clause should be respected, but the party seeking to avail of the provision of stay under section 34 of the Arbitration Act, 1940 must clarify its position at the earliest possible opportunity, so as to leave no manner of doubt that it wishes to have resort to arbitration proceedings. If it hesitates in this regard, or allows the suit to proceed in any manner, that conduct would indicate that such pafiy has abdicated its claim to have the dispute decided under the arbitration clause, and to have thereby forfeited its right to claim stay of the proceedings in the Court. Even if the matter has been adjourned by the Court in routine for filing of a written statement, the defendants, if they want to opt for the dispute resolution mechanism contained in the contract, can take corrective steps and inform the Court, without any delay, about their intention to seek stay of the suit. Since the appellants have not taken up the issue of sending the matter to the arbitrator at the earliest, thus, relinquished/ waived their right for such request.

In the case of Pakistan International Airlines Corporation v.

Messrs Pak Saaf Dry Cleaners reported as PLD 1981 S.C 553,the Hon'ble Supreme Court has observed in this regard;

66The Legislature has, of counse, clearly implied in the language used in the section that the arbitration clause should be respected, but has also made it abundantly clear that the party seeking to avail of the provision of stay under this section rust clarify his position at the earliest possible opportunity, so - as to leave no manner of doubt that he wishes to have resort to arbitration proceedings. If he hesitates in this regard, or allows the suit to proceed in any manner' that conduct would indicate

that he has abdicated his claim to have the dispute decided under ! the arbitration clause, and to have thereby forfeited his right to claim stay of the proceedings in the Court."

Similarly, the Hon'ble Islamabad High Court, in the case of Infospan (Private) Limited v. Messrs Telecom Foundation reported (2017 CLC l3I) has observed as under:- '6Once in the contract, take corrective steps and inform the Court, without any delay, about his intention to seek the defendant has gone through the suit, he must, at the earliest make up his mind whether or not to submit to the jurisdiction of the Court. Ife must not dilly-dally but take a position at the lirst available opportunity. Even if the matter has been adjourned by the Court in routine for the liling of a written statement, the defendant, if he wants to opt for the dispute resolution mechanism contained in the contract, take corrective steps and inform the Court, without any delay, about his intention to seek stay of the suit."

Further reliance is placed upon Muhammad Farooq v. Nazir Ahmad (PLD 2006 Supreme Court 196), Muhammad llyas Khokhar y. Ihsan Ilahi Mughal (2000 CLC 206), Rana Muhammad Ikram v. Province Of Punjab (2005 CLC 206), Government of the N.-W.F.P. and others v. Khalid Khan and others (2006 MLD 1897), Province Of Punjab v.

Muhammad Asghar (2008 YLR 300), Messrs Sprint Energy (Pvt.) Limited v. Ahsaan Ullah (2013 CLD 885), Hamad Raza v. Sajid Hussain Q0l4 CLC 1057), Aftab Ahmad Khan v. Wazir Ahmad (2014 CLC 1401)' Shin Satellite v. Messrs Kasb Technology Services Limited (2016 YLR 2322), and Messrs Ash Associates v. The Chief Executive Officer (2019 CLC 1303).

Beside this court is seized with the instant petition in its constitutional jurisdiction under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973 and bar of jurisdiction in ordinary law cannot be taken to be effecting

constitutional jurisdiction of this court. Hon'ble Supreme

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Court of Pakistan in the case of Adamjee Insurance Co. Ltd.

vs. Muhammad Ramzan and others (PLD 2020 SC 414), has held that;

('4,..1t is axiomatic and by now a judicial cliche that sub- constitutional legislation cannot curtail or abridge the jurisdiction of the constitutional court. Legislature, being the creature of the Constitution cannot take away the jurisdiction of a constitutional court conferred by the Constitution..'.\ilhile the constitutional courts may consider the legislative object and purpose of a statute, still they cannot shut their doorc to an aggrieved person who invokes the constitutional jurisdiction of the court under Article 199 of the Constitution. This well settled constitutional principle loudly resonates through our jurisprudence".

7 So for as objection of respondents relating to non- exerclse of writ jurisdiction in contractual matters is concerned, same objection in the circumstances of this case was not found valid as a factual inquiry was not found preventing this court from exercising its constitutional jurisdiction and the respondents being statutory body were found amenable to constitutional jurisdiction of this court.

Reliance in this respect may be placed on judgement of Hon'ble Supreme Cotrt of Pakistan rendered in case of Messres Airport Support Services..vs..The Airpot Manager, Quaid-s-Azam International Aiprot, Karachi and other reported as 1998 SCMR 2268 where the apex court has held;

$lt consistently been held that while routine contractual disputes between private parties and public functionaries are not open to scrutiny under the Constitutional iurisdiction' breaches of such contracts, which do not entail inquiry into or examination of minute or controvereial questions of fact, if committed by Government, semi-Government or Local Authorities or like controversies if involving dereliction of obligations, flowing from a statute, rules or instructions can adequately be addressed for relief under that jurisdiction. Further a contract, carrying elements of public interest,

concluded by functionaries of the State, has to be just' fair, \,/ transparent, reasonable and free of any taint of mala fides, all such aspects remaining open for iudicial review. The rule is founded-on the premises that public functionaries, deriving authority from or under law, are obligated to act justly, fairly equitabty, reasonably, without any element of discriminations and squarely within the parameters of law, as applicable in a given situation. Deviations, if of substance, can be corrected through appropriate orders under Article 199 of the Constitution. In such behalf even where a contract pure and simple, is involved, provided always that public element presents itself and the dispute does not entail evidentiary facts of a disputed nature redress may be provided."

Further ahead in said judgment it was also held; 6.As regards arbitration clauses in contracts of the genus, the normal rule of bar of proceedings under section 34 of the Arbitration Act and other postulates of the same law, manifestly, do not, with conventional force, reflect on Constitutional remedies, for the simple reason that a sub- Constitutional legislation cannot curtail or otherwise cut across the Constitutional mandates.' Even while the preclusions in the ordinary laws may contextuafly, stand so clogged, and in the categolT may relevantly be in-cluded in the Contract Act ,l872rthe Specilic Retief Act, 1877 and Sale of Goods Act, 1930, the court, when addressing a Constitutional relief cannot be altogether oblivious of the just, reasonable and salutary provisions in such legislations. Thus, where a contract in terms of the Specific Relief Act cannot be specilicatly enforced or under the Contract Act is void ab initio or under the Sale of Goods Act giving effect to the same may contravene the principles and postulates of that law, a Constitutional Court would be slow in extending relief. It is for this reason that a servant cannot be forced on an unwilling master nor can contracts eminently unsuitable for specifiJ performance to be directed to be specifically perfoimed oor considerations of public policy may be ignored in extending a Constitutional remedy' Atl this, however, in the Court's discretion may give way to public interest and public good, where a State functionary has exceeded his p-ower and wilfully or wantonly tramptd upon vested private or public rights. That such a polver, relevant to the ArbitratiorAct, 1940, vests in the superior Court has clearly been recognised in at least two of the reported cases from this jurisdiclion, which have been cited by Mr. Fazl-e- Mehmood, appearing for the appetlant. such are Anjuman- e-Ahmadly" S.rgod[a v. Deputy Commissioner, Sargodha' pLD l966SC 63i and Muhammad Ashraf Ali v. Muhammad Naseer 1985 SCMR 1096.'

8.In light of what has been discussed above, the impugned order of termination of the lease was not found maintainable, same is set aside on allowing of the instant writ petition.

Additionally, it is directed that petitioner shall be afforded a single opportunity for preparing and submitting a map of construction in accordance with the prevalent GDA

regulations within 90 days from today. Then an application v shall be made alongwith proposed map to the Director General of the KP Culture and Tourism Authority. The department shall forward the map to the GDA within 30 days of being submitted. The GDA shall either approve the map within 30 days further or convey to the petitioner any reservation or objection which may be made on such building plan within same period of 30 days. Petitioner shall remove all such objections and submit a fresh building plan to GDA within 30 days thereafter in respect of which GDA shall pass a written order within further thirty days either approving or disapproving the map by giving express reasons. If this time the map is disapproved by GDA finally or petitioner fails in removing the valid objection conveyed to him in writing then KP Tourism Authority shall be at liberty to cancel the agreement again after affording opportunity of hearing to petitioner.

Announced on;

2gh ofJune,2025 *Aotgho/,)

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JUDGE

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