6/7/24, 8:31 PM 2010 C L C 1843

2010 C L C 1843

[Karachi]

Before Muhammad Ali Mazhar, J

Messrs PAKISTAN STATE OIL COMPANY LIMITED, through authorized officer---Plaintiff

Versus

FEDERATION OF PAKISTAN, MINISTRY OF WORKS, through Secretary and 4 others ---

Defendants

Suit No. 1661 of 2008, C.M.A. No.11530 of 2008 and C.M.A. No.2665 of 2009, decided on 3rd
September, 2010.

(a) Specific Relief Act (I of 1877)---

----Ss. 42 & 54---Suit for declaration and permanent injunction---Dealership of an oil company---
Plaintiff, an oil company on the one hand was forcing that defendant should become its dealer in
view of the dealership agreement, on the other hand plaintiff refused to waive the security deposit
condition when applied by the defendant---No privity of contract existed between the plaintiff and
defendant---Plaintiff had no lawful right and authority to force the defendant to become its dealer--
-Dealership agreement signed between the plaintiff and defendant was not materialized and
operative due to non fulfilment of security clause; and the stand of plaintiff was a l s o hit by the
principle of approbate and reprobate---Party could not 'be allowed to approbate and reprobate in the
same breath, rather it would be bound by his previous stance---Main ground in the injunction
application was that defendant be restrained from entering into the agreement with some other party in
respect of the plot where petrol station was built---Principle of statutory tenancy, was not applicable
in the c a s e b e c a u s e not only the lease of the plaintiff in r e s p e c t of property in question had
expired, but it was finally executed in favour of the defendant---Plaintiff, thus, was n o t entitled to
claim t h e b e n e f i t of statutory t e n a n c y on expiry of l e a s e period, particularly w h e n t h e c a s e
filed by the plaintiff under S.10 of Sindh Rented Premises Ordinance, 1979 was dismissed on the
ground that provisions of Sindh Rented Premises O r d i nance, 1979 were not applicable to the land
in question which was owned by Federal Government.?

Mrs. Zarina Khawaja v. Agha Mahboob Shah PLD 1988 SC 190; Mirza Jawad Baig v. Pakistan State
Oil Co. Ltd. 1985 MLD 536; Pakistan Burmah Shell Ltd. v. Khalil Ahmed and another 1988 MLD 210;
Muslim Commercial Bank Ltd. and another v. Adamjee Insurance Company Ltd. and others 2003
MLD 688; Muhammad Yakoob v. Health Officer, Municipal Committee Hyderabad and another 1973
SCMR 184 and Khaliq Raza Khan v. Messrs Pakistan State Oil Company Limited 1998 SCMR 2092
ref.

(b) Specific Relief Act (I of 1877)---

----Ss. 21, 42, 54 & 56---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Suit for declaration
and permanent injunction---Application for temporary injunction---Relief by way of an injunction,
whether temporary or p e r m anent was in the discretion of the court-Section 21 of S p e c i f i c Relief
Act, 1877, had provided that a c o n t r a c t could not be s p e c i f i c a l l y e n f o r c e d w h i c h in its nature
was r e v o c a b l e and/or a c o n t r a c t for non-performance of w h i c h compensation of m o n e y was an
adequate relief---Section 56 of the Specific Relief Act, 1877 had provided that an injunction could
not be granted to prevent breach of a contract, the performance of which could not be specifically
enforced---Main ground in injunction application, in the present case, was that the defendant be
restrained from entering into the agreement with another party in respect of plot in question on which
the plaintiff had invested more than Rupees one million for the construction of Petrol Pump---First of

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all no agreement had come into existence due to non-fulfilment of security deposit clause, therefore no
licence/agency or franchise was issued by the plaintiff with c l e a r denial to waive the security
deposit clause-Plaintiff, in c i r c umstances, had no lawful justification to f o r c e th e
defendant for a re l u ctant relationship.
?
(c) Contract Act (IX of 1872)---

----S.73---Specific Relief Act (1 of 1877), S.21---Compensation for loss or damage caused by breach of
contract---Scope---Principal.

Section 73, Contract Act, 1872 provides that if plaintiff deems that the defendant has committed breach
of an obligation resembling those created by contract has been incurred and has not been discharged,
the' plaintiff may claim compensation subject to explanation attached with said section that in
estimating the loss or damage arising from a breach of contract, the means which existed of remedying
the inconvenience caused by the non-performance of the contract must be taken into account and such
compensation is not to be given for any remote and indirect loss or damage sustained by reason of the
breach. The similar provision is available under section 21 of the Specific Relief Act, which provides
under clause (a) that a contract cannot be specifically enforced for the non-performance of which-
compensation is an adequate relief a i d another clause (d) further provides that a contract which in its
nature revocable can, also not be specifically enforced. When the licence agreements,
agency/dealership agreements and franchising agreements are revocable in its nature, at the best, the
aggrieved party can claim damages/compensation for its alleged breach subject to proof.?

(d) Qanun-e-Shahadat (10 of 1984)---

----Art. 114--Estoppel, principle of---Applicability---Scope---When any person had by his

declaration, act or omission, intentionally caused or permitted another person to believe a thing to be
true and acted upon such belief, he would be estopped and not allowed to turn around.?

(e) Civil Procedure Code (V of 1908)---

----O. XX XIX, Rr.1 & 2---Temporary injunction, grant of---Essential---Duty of court---Ingredients

for grant of temporary injunction: Existence of prima facie case, likelihood of irreparable loss or
legal injury for non-grant of temporary injunction; and the balance of convenience, were the three
requisite/essential ingredients which must be fulfilled before injunction could be granted in favour of
a party---Absence of any one of those essential ingredients, would not warrant grant of injunction---
Court while granting injunction should or ought to be of the view that plaintiff applying for
injunction was in all probability likely to succeed in the suit by having a decision in his favour; and
that his case was not likely to fail on account of some apparent defects---To obtain an interlocutory
injunction, it was not enough for the plaintiff to show that he had a prima facie case, but he must
further show that in the event of withholding the relief of temporary injunction, h e would s u ff e r an
irreparable injury; and that in the event of his success in the suit in establishing his alleged legal
right, he would not have the proper remedy in being awarded adequate damages--In such a situation,
the plaintiff must show a clear necessity for affording immediate protection to his alleged right or
interest which would otherwise be seriously injured or impaired.?

2003 MLD 688 ref.

Muhammad Sadiq for Plaintiff.

Abdul Karim Nizamani, Standing Counsel.

Muhammad Saleem Thepdawala for Defendant No.4.

Khalid Ahmed Tanwirl for Defendant No.5.

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6/7/24, 8:31 PM 2010 C L C 1843

Muhammad Aslam, Superintendent Legal Branch, Pak P.W.D. Ministry of Works present in person.

ORDER

MUHAMMAD ALI MAZHAR, J.---This application is brought under Order XXXIX, Rules 1 and 2,
C.P.C. The plaintiff has filed the instant suit for Declaration and Permanent Injunction with the
following prayer:

(i) For a declaration to the effect that defendant No. 4 shall become the dealer of the company
and shall use the same site as after fulfilling the terms and conditions of the dealership
agreement.

(ii) For permanent injunction to the effect that defendant No.4 be restrained from using the site
by creating dealership agreement with defendant No.5 as the plaintiff is a tenant of property
bearing Nos.10-E and 11-E, Jahangir Road, Karachi.

(iii) Cost of the suit.

The bare bones leading to the present controversy as narrated in the plaint are that defendant No.1
leased out the Property bearing Nos.10-E and 11-E, Jahangir Road, Karachi to defendant No.2 with
specific instruction to sublet the same to a petroleum company. Messrs Dawood Petroleum Company
requested the defendant No.2 to grant sublease of the said plots for constructing a petrol pump. The
lease was granted for a period of 30 years. On 29-12-1976, Messrs Dawood Petroleum Company was
merged with the plaintiff. Before the expiry of the lease agreement, plaintiff received a letter from
defendant No.2 intimating that the lease is going to expire._ The plaintiff was further informed by such
letter that the defendants had received several offers including highest offer of rent Rs.20,000 per
month plus deposit of Rs.2 Million, therefore the plaintiff was asked either to vacate the premises or
continue the lease on fresh terms and conditions. It is alleged that the plaintiff was threatened by the
defendant No.2 for dispossession from the property on which the plaintiff had invested more than
Rs.10 Million for construction of petroleum service station. The dealer of the Plaintiff filed a Suit
No.1053 of 2001 in this Court which was dismissed while the Suit No. 1031 of 2000 filed by the
plaintiff was also dismissed on technical grounds as the plaintiff had not joined the Federation of
Pakistan as party to the said proceedings. Plaintiff again filed a Suit No.565 of 2002 in this Court and
prayed for declaration to the effect that defendants Nos.1, 2 and 3 are not entitled to call for tender for
leasing out the suit premises and also prayed that they are not entitled to dispossess the plaintiff from
the suit premises. On 17-12-2002, the said defendants made a statement that they will dispossess the
plaintiff through due process of law and on the basis of such statement Suit No.565 of 2002 was
disposed of Thereafter, the plaintiff was running the petrol pump through its dealer Naveed Sadiq, who
expired and 11is wife (defendant No.4) filed SMA No.35 of 2005 which was granted in respect of the
assets of late Naveed Sadiq. A settlement was reached between the legal heirs of the deceased Naveed
Sadiq, on the basis whereof, the defendant No.4 became entitled to run the business and dealership in
respect of petrol pump in question. The defendant No.4 applied to the plaintiff for execution of
dealership license agreement for company's finance site, which was granted by the plaintiff. On 29-10-
2008, the plaintiff wrote a letter to the defendant No.4 calling upon her to deposit a sum of Rs.1
Million as Dealership Security Deposit, which was a mandatory requirement. The defendant No.4
replied the said letter expressing her-desire to convert the site into new vision and also requested the
plaintiff to waive the condition of dealership security deposit as a special case as she was not in a
position to pay the said amount, which request was not entertained by the plaintiff. On this refusal, the
defendant No.4 contacted defendant No.5 to become their dealer who wrote a letter to the plaintiff to
give NOC so that the defendant No.5 can take over the site. The plaintiff declined to give NOC and
categorically informed that the plaintiff wanted to retain the site. After execution of dealership
agreement by defendant No.4 with the plaintiff, the defendant No.4 is bound to pay Rs.1 Million
as security deposit and if she did not want to pay the same, she has no right to continue as dealer of
company and has to vacate the same. The defendant No.4 cannot continue as dealer without

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fulfilling the terms of the dealership agreement. Since the defendant No.4 is avoiding to honour the
commitment, therefore the plaintiff has filed this suit.

I have heard the learned counsel for the parties. The learned counsel for the plaintiff laid much
emphasis that after the expiry of lease in the year 2002, they have become the statutory tenant and
in this present suit a declaration has been sought that defendant No.4 shall become the dealer of the
company and shall use the same site as after fulfilling the terms and conditions of the dealership
agreement and besides the aforesaid declaration, the plaintiff has also prayed that permanent
injunction against defendant No.4 be issued restraining her from using the site by creating
dealership agreement with the defendant No.5. So far as the relief relating to declaration is
concerned, the plaintiff has filed a draft agreement of dealership for plaintiff's financed site and
according to plaintiff's own assertion, the said dealership agreement was never materialized. In
October, 2008, the plaintiff wrote a letter to the defendant No.4 calling upon her to deposit a sum
of Rs.1 Million as dealership security deposit, which is a compulsory requirement for company's
financed site. The defendant No.4 replied the said letter expressing her desire to convert the site
into new vision and also requested that the condition to pay Rs.1 Million as dealership security
deposit for company's financed site be waived as special case as she is not in a position to pay the
said amount, but the said request of the defendant No.4 was not entertained by the plaintiff keeping
in view the standard quality company's procedure. It is further argued that on the refusal of plaintiff
to entertain the request of security deposit waiver, the defendant No.4 entered into an agreement
with defendant No.5. The learned counsel further referred to an order dated 17-1-2002 passed in
Suit No.565 of 2002. The suit was disposed of in the year 2002 on the statement that the
defendants shall only take action, which is available under the law. In the plaint, the plaintiff has
itself admitted that the dealership agreement could not be materialized due to non-fulfilment of
security deposit clause and in spite of seeking waiver, the defendant No.4 was not accommodated
due to some standard procedure. In the injunction application, the plaintiff is seeking restraining
orders on the ground that the defendant No.4 is the dealer of the plaintiff in respect of the premises
with further restraining order that she may be restrained from entering into dealership agreement
with defendant No.5.

In support of the arguments, the learned counsel relied upon the following case-law:--

(1) PLD 1988 SC 190 (Mrs. Zarina Khawaja v. Agha Mahboob Shah). In this judgment,
continuance of statutory tenancy has been discussed and the Hon'ble Supreme Court held
that after expiry of the agreement of tenancy the general law of holding over by the tenant
has not been repealed or modified by the rent laws except to the extent that it comes in
conflict with the provisions of the Rent Restriction Law. On the contrary, it was specifically
provided in the definition of a `tenant' in section 2 of the West Pakistan Urban Rent
Restriction Ordinance, 1-959 that a tenant would include 'a tenant continuing in possession
after the termination of the tenancy in his favour'. The definition of tenant in the present
Sindh Law also provides that a tenant would include "any person who continues to be in
possession or occupation of the premises after the termination of his tenancy".

(2) 1985 MLD 536 (Mirza Jawad Baig v. Pakistan State Oil Co. Ltd.). In this judgment, the
learned single Judge of this Court has held that after expiry of lease by efflux of time,
tenant had become statutory tenant and was governed by provisions of section 13(2)(i) of
the repealed Ordinance VI of 1959.

(3) 1988 MLD 210 (Pakistan Burmah Shell Ltd. v. Khalil Ahmed and another). In this
judgment, it is held that where lessor agreed to a provision in lease deed that lessee would
have option to ask for a. renewal of lease at the determination of same for further period,
such provision must be given effect to. The main object of Sindh Rented Premises
Ordinance is to make effective provisions for regulations of relation between landlords and
tenants and to protect their interests in respect of rented premises and not to confer any new
right of eviction on landlords. Ordinance pre-supposes existence of landlord's right to
immediate possession, but his such right would be limited by provisions of section 15 of the

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Ordinance. Landlord though has got a right to evict tenant under general law, yet he cannot
get possession of premises unless one or other conditions specified in section 15 of the
Ordinance are complied with.

The learned counsel failed to point out or demonstrate through any document that the initial lease
of ten years granted in favour of Dawood Petroleum Limited in the year, 1971 was further renewed
in favour of the plaintiff after its original tenure and first renewal term. The lease deed was not
granted by a private party but the defendants Nos.1 and 2. In the injunction application, the plaintiff
has not claimed the protection for its dispossession from the site but restraining order has been sought
against defendant No.4 that she is the dealer of plaintiff and she cannot enter into an agreement with
defendant No.5. Even in the supporting affidavit of the injunction application, the authorized officer of
the plaintiff admits that the pump site was leased out to Dawood Petroleum Company, which was
merged in the PSO by virtue of a Notification dated 29th December, 1976 under re-organization plan. It
is also claimed by the plaintiff that at the time of leasing, a sum of Rs. 1 Million was invested by the
plaintiff's company for construction and the present value is more than Rs.10 Million. It is reiterated
that after the death of Naveed Sadiq, the defendant No.4, who is wife of deceased dealer, applied to
become a dealer of the plaintiff and entered into an agreement but since she failed to pay the dealership
security deposit of Rs.1 Million, the dealership agreement could not be materialized.

On the date of hearing, Muhammad Aslam, Superintendent, Legal Branch, PWD, Ministry of Works
was present. The learned Standing Counsel Mr. Abdul Karim Nizamani argued and referred to the
written statement filed by the defendants Nos.1, 2 and 3 in which it has been stated that the lease of the
plaintiff expired on 25-8-2001, thereafter, the plaintiff failed to enter into a fresh agreement. The
plaintiff is an encroacher over the subject property after expiry of lease granted to the plaintiff within
the definition of terms contained in Federal Government Land (Removal of Encroachments)
Ordinance, 1965, hence the suit filed by plaintiff is liable to be dismissed as the plaintiff has no legal
character or locus standi. It was further submitted that after expiry of lease, the then dealer of Quaid
Service Station filed Suit No.1053 of 2001, thereafter, Khushnood Sadiq filed an appeal but finally the
appeal was withdrawn by him. After the sudden death of Naveed Sadiq, the defendant No.4 approached
this Court for Letter of Administration, thereafter, a settlement had taken place between Khushnood
Sadiq and defendant No.4 and she was allowed to run the business/dealership of the said petrol pump,
thereafter defendant No.4 applied for fresh lease agreement in her favour and she became lessee as per
fresh lease agreement executed on 10-10-2007. It is further alleged that after expiry of lease agreement
between Pakistan State Oil and the Government, the plaintiff failed to meet the fresh terms and
conditions for renewal of lease and Government had lawfully auctioned the said property and made
fresh lease agreement in favour of Khushnud Sadiq. Along with the Written Statement, indenture of
lease of Government land dated 1-10-2003 is attached, which was executed between the President of
Pakistan as lessor and Khushnud Sadiq as lessee. Besides above, there is another indenture of lease of
Government land dated 10-10-2007, which was again executed by the President of Pakistan and Mst.
Lubna Jawaid, the defendant No.4 in the present matter for the demised premises in question. It is
further alleged that the plaintiff has no legal character to file the present suit.

Mr. Muhammad Salem Thepdawala, learned counsel for the defendant No.4 during his arguments also
referred to the counter-affidavit filed by the defendant No.4. From the counter-affidavit, he pointed out
a letter dated 5-11-2008 in which the defendant No.2 confirmed that Ms. Lubna Jawaid is sub-lessee of
Government property bearing Plots Nos.10-E and 11-E, Jehangir Road, Karachi-East (Quaid Service
Station) as per indenture of lease agreement. In another letter dated 9-1-2008, the defendant No.2
issued no objection certificate whereby defendant No.4 was allowed to sub-lease the aforesaid plot to
any oil company of Pakistan. Another certificate dated 23-1-2008 is also attached which was issued by
the defendant No.2 certifying that plot of land bearing Nos.10-E and 11-E situated at Jehangir Road,
Karachi is Federal Government property and Pakistan Works Department is the custodian of all Federal
Government land. The said plots have been leased out to Ms. Lubna Jawaid for running POL business
as per lease agreement dated 10-10-2007. He further argued that first lease was executed in the month
of August, 1977 by the defendant No.2 in favour of PSO, which expired, thereafter, the lease of the plot
was executed in favour of Khushnud Sadiq in the month of October, 2003 and after mutual settlement
between the defendant No.4, and previous lessee Khushnud Sadiq, the defendants No.1 and 2 had

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executed the lease in favour of defendant No.4 in the year 2007. The plaintiff filed Suit No.1031 of
2000, which was dismissed for non-joinder of Federation of Pakistan. Similarly in the year 2001, the
then dealer Khushnud Sadiq had filed Suit No.1053 of 2001, which was dismissed by this Court and
against the said order, a High Court of Appeal was filed which was subsequently withdrawn on 28-8-
2003. The learned counsel further argued that after expiry of lease in the year 2001, the plaintiff filed a
Miscellaneous Rent Case No.569 of 2001 under section 10 of Sindh Rented Premises Ordinance in the
Court of VIth Rent Controller, Karachi, East for depositing rent in the Court. The defendant No.2
raised objections against the maintainability of application on the ground that since the land is owned
by the Government of Pakistan, therefore, it does not come within the ambit and purview of Sindh
Rented Premises Ordinance, 1979. He further argued that after hearing the parties, the learned Senior
Civil Judge dismissed the application vide order, dated 12-11-2001 with the observation that since the
land is owned by the Federal Government, therefore, under section 3 of the Sindh Rented Premises
Ordinance, 1979, the provisions of Rent Laws are not applicable, hence, the Rent Controller has no
jurisdiction to entertain the application. After dismissal of Misc. Rent Case in the year 2001, nothing
further is available on record to justify or to prove that the order passed by the Rent Controller
was ever challenged in any appellate forum or not. All these material facts have been suppressed
and concealed by the plaintiff in the plaint. The learned counsel further argued that in fact the
plaintiff has filed the suit to pressurize the defendant No.4 and trying to make the defendant No.4
dealer under duress. The contents of plaint are itself showing that after executing the dealership
agreement, the defendant No.4 failed to furnish any security amount and in spite of her request
for the waiver, the plaintiff did not accept the request, therefore, at present, there is no agreement
in force between the parties as it never came into existence due to non-fulfilment of security
clause. He further argued that the plaintiff has no right to seek any declaration to the effect that
the defendant No.4 shall become the dealer of the company after fulfiling the terms and
conditions of dealership agreement. The plaintiff cannot ask for any restraining order against the
defendant No.4 not to enter into any agreement with defendant No. 5. The learned counsel in
support of his arguments, relied upon the following case-law:

(1) 2003 MLD 688 (Muslim Commercial Bank Ltd. and another v. Adamjee Insurance
Company Ltd. and others). In this judgment, the Divisional Bench of this Court has held
that the party seeking grant of injunction has to establish the existence of three essential
ingredients i.e. existence of a prima facie case; likelihood of irreparable loss or legal
injury for non-grant of temporary injunction, and that balance of convenience ought to be
in favour of the party seeking temporary injunction. It is also the requirement of law that
all the three requisites/ essential ingredients must be fulfilled before injunction can be
granted in favour of a party and absence of anyone of these essential ingredients would
not warrant grant of injunction. Existence of prima facie case is to be judged or made out
on the basis of material/evidence on record at the time of hearing of injunction
application, and such evidence or material should be of the nature that by considering the
same Court should or ought to be of the view that plaintiff applying for injunction was in
all probability likely to succeed in the suit by having a decision in favour, and that his
case was not likely to fail on account of some apparent defects.

(2) 1973 SCMR 184 (Muhammad Yakoob v. Health Officer, Municipal Committee
Hyderabad and another). In this judgment, the Hon'ble Supreme Court has considered
Order XXXIX, Rule 1, C.P.C. read with section 42 of the Specific Relief Act and held that
after the license had expired by efflux of time, there could be no further question of
continuing them or restraining the Municipal Committee from cancelling the same. If the
petitioner succeeds in his suit, he will be entitled to recover all damages suffered as a
consequence of the cancellation and also to the renewal of his license. No irreparable
injury will thus be suffered by him which cannot be compensated in terms of money.

Mr. Khalid Ahmed Tanwiri, learned counsel for the defendant No.5 argued that the suit is barred
under sections 42 and 56 of .the Specific Relief Act. The plaintiff has no legal character. The plaintiff
has no right to file the suit or injunction application in respect of the property in question as the
lease of the plaintiff with defendant No.2 stood vanished due to completion of its tenure. The

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learned counsel also referred to letter dated 2-8-2006. This letter was written by Inspector of
Explosives to the 6 different oil companies including the plaintiff. The subject of letter shows
that requirement of a valid registered lease agreement is a pre-condition for
issuance/amendment/renewal of storage license. In the body of letter, the Inspector of Explosives
invited the attention to an office letter dated 30-8-2005 with the advice to furnish a valid
registered lease agreement between the oil companies and their respective dealers for each
site/petrol pump as a part of particulars for grant/renewal/ amendment of license without further
delay. The purpose of showing this letter is to invite attention of this Court that no explosive
storage license for the oil lubrication can be issued to any oil company unless they produce valid
registered lease deed with the dealer/owner of the plot and unless lease deed is produced,
explosive license under the Petroleum Rules, 1937 cannot be renewed. He has also invited
attention of this Court to a lease deed dated 8-5-2008 executed by the defendant No.4 in favour
of defendant No.5 for running a pump at the plot in question. Finally he argued that the
defendant No.4 by her own freewill and consent entered into an agreement with the defendant
No.5 and the plaintiff has no right and authority to force the defendant No.4 to become the dealer
of plaintiff. The plaintiff and defendant No.4 have no privity of contract, therefore the plaintiff
has no locus standi or legal character to file the present suit.

After hearing the arguments of all the learned counsel appearing for the parties, I have reached to
the conclusion that the plaintiff has no lawful, right and authority to force the defendant No.4 to
become the dealer of PSO. The dealership agreement signed between the plaintiff and defendant
No.4 was not materialized and operative due to non-fulfilment of security, clause and the stand of
plaintiff is also hit by the principle of approbate' and reprobate. Party cannot be allowed to
approbate and reprobate in the same breath, rather it would be bound by his previous stance. On
one hand the plaintiff is forcing that the defendant No.4 should become a dealer in view of the
dealership agreement and on the other hand they refused to waive the security deposit condition when
applied by the defendant No.4. So in my view, there is no privity of contract between the plaintiff and
defendant No.4 and the prayer clause amounts to exertion of undue influence upon the plaintiff. The
judgment relied upon by the learned counsel for the plaintiffs on the principle of statutory tenancy are
also not applicable in this case because not only the lease of the plaintiff expired but subsequently it
was executed in favour of Khushnud Sadiq and then in favour of defendant No.4 so the plaintiff is not
entitled to claim the benefit of statutory tenancy on expiry of its lease period particularly in the
circumstances when the MRC filed by the plaintiff under section 10 of the Sindh Rented Premises
Ordinance, 1979 was dismissed on the ground that under section 3, the provisions of Sindh Rented
Premises Ordinance, 1979 are not applicable to the land owned by the Federal Government. It is an
admitted position in this suit that the land in question is owned by the Federal Government and the
defendants Nos.1 to 3 in their written statement have clearly taken a plea that the plaintiff is an
encroacher within the terms of Federal Government Land (Removal of Encroachments) Ordinance,
1965. The relief by way of an injunction whether temporary or permanent is in the discretion of the
Court. Under section 21 of the Specific Relief Act, it is clearly mentioned that a contract cannot be
specifically enforced which in its nature is revocable and or a contract for non-performance of which
compensation of money is an adequate relief. Similarly, section 56 of the Specific Relief Act clearly
provides that an injunction cannot be granted to prevent breach of a contract, the performance of which
would not be specifically enforced. The main ground in the injunction application is that the defendant
No.4 may be restrained from entering into the agreement with the defendant No. 5 in respect of the plot
in question on which the plaintiff has invested more than Rs.1 Million for the construction of petrol
pump. First of all no agreement came into existence due to non-fulfilment of security deposit clause,
therefore no license/agency or franchise was issued by the plaintiff with clear denial to waive the
security deposit clause. Therefore, the plaintiff has no lawful justification to force the defendant No.4
for a reluctant relationship. The plaintiff itself filed a letter of defendant No.4 as annexure 'g' to the
plaint in which the defendant No.4 categorically submitted that she is not in a position to pay the
required sum of Rs.10 Lacs and requested for the waiver, which was declined. Since the request was
declined, in fact there is no agreement between the parties. Article 8 of the agreement clearly stipulates
and demonstrates that at the time of agreement, it is a pre-condition that the amount should be
deposited with PSO in advance that is why Article 8 starts from the words "dealer has deposited with
PSO a sum of rupees??."but in the agreement filed by the plaintiff the column of security amount is

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blank, which clearly shows that at the time of agreement nothing was deposited with PSO to fulfil the
material condition. Even nothing is mentioned in the agreement that certain time was granted to the
defendant No.4 to deposit the amount, but it was signed leaving the security deposit column blank and
opened, which leads to the conclusion that there was no privity of contract due to the lack of security
deposit.

Even otherwise, if the plaintiff in its own wisdom and prudence assumes that the defendant No.4 has
committed some breach of agreement, which caused some losses or damages to the plaintiff, the
plaintiff may claim damages under section 73 of the Contract Act, which provides as under: -

"73. Compensation for loss or damage caused by breach of contract.---When a contract 'has
been broken, the party who suffers by such breach is entitled to receive, from the party who has
broken the contract, compensation for any loss or damage caused to him thereby, which
naturally arose in the usual course of things from such breach, or which the parties knew, when
they made the contract, to be likely to result from the breach of it.

Such compensation is not to be given for any remote and indirect loss or damage sustained by
reason of the breach.

Compensation for failure to discharge obligation resembling those created by contract.---When

an obligation resembling those created by contract has been incurred and has not been
discharged, any person injured by the failure to discharge it is entitled to receive the same
compensation from the party in default, as if such person had contracted to discharge it and had
broken his contract.

Explanation. In estimating the loss or damage arising from a breach of contract, the means
which existed of remedying the inconvenience caused by the non-performance of the contract
must be taken into account".

It is clear from the aforesaid section that if plaintiff deems that the defendant No.4 has committed
breach of an obligation resembling those created by contract has been incurred and has not been
discharged, the plaintiff may claim compensation subject to explanation attached with this section that
in estimating the loss or damage arising from a breach of contract, the means which existed of
remedying the inconvenience caused by the non-performance of the contract must be taken into
account and such compensation is not to be given for any remote and indirect loss or damage sustained
by reason of the breach. The similar provision is available under section 21 of the Specific Relief Act,
which provides under clause (a) that a contract cannot be specifically enforced for the non-performance
of which compensation is an adequate relief and another clause (d) further provides that a contract
which in its nature is revocable can also not be specifically enforced. Since the license agreements,
agency/dealership agreements and franchising agreements are revocable their nature, therefore, at the
best, the aggrieved party can claim damages/compensation for its alleged breach subject to proof. So
far as the judgments relied upon by the learned counsel for the plaintiff relating to the statutory tenancy
are concerned, the judgments are based on the relationship of private persons and not against the
Government as lessor and the private party as lessee. The judgments are relevant to the relationship of
landlord and tenant in connection with the tenancy created under the Rent Laws including Sindh
Rented Premises Ordinance, 1979 but in this case there is a clear distinction which is a material fact
available on record that in the year 2004 the plaintiff filed a Misc. Rent Case No.569 of 2001 under
section 10(3) of the Sindh Rented Premises Ordinance, 1979 and sought the permission to deposit the
rent in Court, which application was dismissed keeping in view section 3 of the Sindh Rented Premises
Ordinance, 1979 on the sole ground that the property in question. is owned by the Federal Government,
therefore Rent Laws are not applicable. The Hon'able Supreme Court in its judgment reported in 1998
SCMR 2092 (Khaliq Raza Khan v. Messrs Pakistan State Oil Company Limited) has discussed section
3 of the Sindh Rented Premises Ordinance in detail. The facts of this case are that the President of
Pakistan granted lease of a plot to Khaliq Raza Khan for a period of 10 years in the first instance with
the condition that the lessee shall not sublet, sell, mortgage or transfer in any manner or the part with
the plot or structure erected/ installed on the said plot of land or a part thereof to anyone except to a

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petroleum company without prior written permission' of the Executive Engineer, PWD. Pursuant to the
above clause, the appellant with the permission of the Executive Engineer leased out the plot to the
respondent on 31-7-1957. Though in this case, the Hon'ble Supreme Court has held that since the
Government granted lease to a private person with further right to sublet the plot subject to the
permission of the Executive Engineer, therefore, the Hon'able Supreme Court has held that bar
contained in section 3 of the Sindh Rented Premises Ordinance, 1979 is not applicable but
simultaneously, the Hon'ble Supreme Court has discussed section 3 in detail and held that word
"owner" has to be understood with reference to the context in which the same has been used. Lessee of
Government would not be able to invoke the provisions of Sindh Rented Premises Ordinance, 1979 in
a dispute between him and his lessor, the Government. If, however the dispute is between lessee as the
landlord and someone as tenant which does not involve the interest of Government as to the
possession, same is covered by the provisions of Sindh Rented Premises Ordinance, 1979. Subsection
(1) of section 3 of Sindh Rented Premises Ordinance, 1979 will be applicable if the lessee was to file a
case against the Government as admittedly he is lessee from Government in respect of a plot which
vests in the Federal Government. In other words, he will not be able to invoke the provisions of the
Ordinance in a dispute between him and his lessor, the Federal Government. However, since the
dispute was between the lessee as the landlord and tenant which did not involve interest of the
government as to possession, it was covered by the provisions of the Ordinance and. the lessee, the
tenant and the suit land are covered by the definitions of the terms "landlords", "tenant" and "premises"
given in section 2 of the Ordinance.

Along with the plaint, the plaintiff has annexed a copy of Suit No. 565 of 2002, which was filed in this
Court for declaration and permanent injunction against the present defendants Nos.1 to 3. In the prayer
clause, the plaintiff claimed declaration to the effect that tender invited by the defendant No.2 for
leasing out the premises bearing Nos.10-E and 11-E, Jehangir Road, Karachi in pursuance of
acceptance of offer made by the defendant No.2 and accepted by the plaintiff for taking the premises in
suit on fresh terms .and conditions be declared as null and void. The plaintiff sought the declaration for
the same premises which is the subject-matter of this suit and during the course of arguments, the
learned counsel for the plaintiff also shown a copy of order dated 17-12-2002 passed in Suit No. 565 of
2002 which was disposed of on the statement of Advocate appearing for the defendants Nos. 1 to 3 that
his client shall only take action which is available under the law. On the basis of this statement, the suit
was disposed of along with the listed application for injunction. The defendants Nos. 1 to 3 have filed
various documents with their written statement and annexure 'A' is the order in High Court Appeal
No.110 of 2002 which was filed by the dealer of PSO Khushnud Sadiq against the same defendants in
another suit which HCA was withdrawn by him vide order dated 28-8-2003 on the ground that parties
have settled the matter outside the court. The record shows that the appeal was withdrawn on 28-8-
2003 and on 1-10-2003, the defendants Nos. 1 to 3 entered into an agreement with Khushnud Sadiq for
the lease of same plots, thereafter Mr. Khushnud Sadiq has acquired two legal characters, one is the
lessee of the Government for the same plots, the subject-matter of the suit while in another capacity, he
was also a dealer of PSO for the pump sites situated/located on the same plots. Though in the Suit
No.565 of 2002, the plaintiff had challenged the tender of the defendants that except PSO they cannot
grant lease of the said plots to any other person, but record shows that when in the month of October,
2003 the lease of same plots was executed in favour of Khushnud Sadiq, the plaintiff maintained
complete silence and they had not challenged this action of the Government and accepted the lease in
favour of Khushnud Sadiq and allowed him to continue as dealer which shows that after the expiry of
PSO agreement with the defendants Nos.1 to 3, they created new lease in favour of Khushnud Sadiq,
who was already in possession as dealer and' in the same sequence by virtue of a private settlement
between defendant No.4 and Khushnud Sadiq, she was operating the pump under same dealership as
Mr. Khushnud Sadiq was running under the name and style of Quaid Service Station. The plaintiff
itself filed a copy of agreement dated 28-9-2004 which was entered into between defendant No.4 and
Khushnud Sadiq and as per clause 2 of the agreement, the defendant No.4 acquired absolute and
exclusive ownership of properties and running business in the manner as mentioned in para 1 of the
agreement. The defendants, Nos.1 to 3 in para 7 of their written statement submitted that the defendant
No.1 who accepted the fresh terms and conditions of the Government had already withdrawn all cases
unconditionally, hence the plaintiff had not been dispossessed from the suit property though the
plaintiff has no legal character, therefore, question of forcible dispossession does not arise. In para. 8 it

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is submitted that dealer unconditionally withdrawn court cases and accepted fresh terms and
conditions, thereafter Government assured to the Court that the defendant shall take action which is
available under the law. The plaintiff has also not produced any documentary evidence to whom it is
paying rent for the premises. The plaintiff has suppressed the factum of grant of lease in favour of
Khushnud Sadiq and also failed to take any action when the Government granted lease in his favour
which shows that the plaintiff conceded to and accepted the grant of lease in favour of Khushnud Sadiq
who was not only the lessee but also a dealer of the plaintiff for the same pump site. By virtue of a
settlement, Khushnud Sadiq assigned the business to the defendant No.4 and in the year 2007, the lease
of same plots was executed by the defendants Nos. 1 to 3 in favour of defendant No.4. The chronology
of lease agreements shows that after the expiry of PSO lease with the Government at least two lease
agreements were granted subsequent to the expiry of PSO lease and against the grant of aforesaid two
lease agreements, plaintiff (PSO) maintained complete silence and not raised any objection that they
are allegedly in actual or constructive possession and the lease cannot be granted in favour of any other
person. It is a matter of record that not only they did fail to raise any objection but also accepted the
new lessees of the land as their dealer. Keeping in view the peculiar circumstances of the case, I do not
think that any action was required to be taken by the defendants Nos. 1 to 3 under the provisions of
Central Government Lands and Buildings (Recovery of Possession) Ordinance, 1965 (wrongly
mentioned by the defendants Nos. 1 to 3 in WS as "Federal Government Land (Removal of
Encroachment) Ordinance, 1965) against the plaintiff which waved its right to challenge the lease at
relevant point of time. Had the plaintiff any grievance against the first lessee Khushnud Sadiq, it would
have lodged legal proceedings in October, 2003 when the President of Pakistan executed lease of the
same plots in favour of Khushnud Sadiq but instead of'raising any objection, they continued him to be
their dealer and after execution of lease, the plaintiff has no right to claim that they are in actual or
constructive possession. In fact the lease in favour of Khushnud Sadiq amount to waiver of PSO right
and now at this stage they are estoppel to claim any right of possession. The principle of estoppels is
clear that when any person has by his declaration, act or omission, intentionally caused or permitted
another person to believe a thing to be true and act upon such belief, he shall be estopped and not
allowed to turn around. It appears to me that since the lessees are the same persons, who were also the
dealer of PSO and operating the business as dealer, therefore the Government has simply granted lease
without any action for the recovery of possession from PSO which his already reflected from para 2 of
the written statement wherein the defendants Nos.1 to 3 'have mentioned that when the defendant No.4
became the dealer then the plaintiff did not protest on any legal forum against the Government or the
said dealer and were mutually agreed to supply oil and related products till 2007. However after sudden
death of Navaid Sadiq, his wife approached this Court and obtained letter of administration in respect
of assets and properties left by the deceased which was granted by this Court, thereafter settlement had
taken place between the plaintiff and defendant No.4 and she was allowed to run the
business/dealership of the said petrol pump. The defendant No.4 applied for the fresh lease agreement
in her favour and she became lessee as per lease agreement executed on 10-10-2007. During the said
period the plaintiff and defendant No.4 were running the business amicably. It is further submitted in
Para 3 of the same written statement that after the expiry of lease agreement between PSO and
Government, the plaintiff failed to meet the fresh terms and conditions for renewal of lease and only
then Government had lawfully auctioned the said property and made fresh lease agreement in favour of
Khushnud Sadiq, the then dealer.

The bottom line of this discussion is that, I do not find existence of a prima facie case on the basis of
material on record. The judgment of this Court relied upon by the learned counsel for the defendant
No.4 reported in 2003 MLD 688 is quite applicable in which it has been held that existence of prima
face case, likelihood of irreparable loss or legal injury for non-grant of temporary injunction and the
balance of convenience, all three requisite/ essential ingredients, must be fulfilled before injunction can
be granted in favour of a party and absence of anyone of these essential ingredients would not
warrant grant of injunction. The Court while granting injunction should or ought to be of the
view that plaintiff applying for injunction was in all probability likely to succeed in the suit by
having a decision in his favour and that his case was not likely to fail on account of some
apparent defects. There is no logical justification or rationale in which the plaintiff is entitled to
claim injunction, whereby; the defendant No.4 may be restrained from entering into dealership
agreement with the defendant No.5 or vice versa the defendant No.5 may be restrained from

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entering into dealership agreement with defendant No.4. In order to obtain an interlocutory
injunction, it is not enough for the plaintiff to show that he has a prima facie case. He must
further show that (1) in the event of withholding the relief of temporary injunction he will suffer
an irreparable injury; and (2) in the event of his success in the suit in establishing his alleged
legal right, he will not have the proper remedy in being awarded adequate damages. In such a
situation the plaintiff must show a clear necessity for affording immediate protection to his
alleged right or interest which would otherwise be seriously injured or impaired. According to
Woodroffe's Injunction, (1964). P. 237, (C.M. Row, Law of Injunction, Seventh Edition), the
subject-matter of injunction therefore, in the case of obligations arising out of contracts or
agreements bilaterally binding and voidable agreements which the parties who have the power to
avoid them have elected to make it binding. The distinction between a void and voidable
agreement is that, which is void has never had any legal existence and can therefore, never be
confirmed; while that which is voidable is valid as long as it is not impeached by the party who
has in his power to avoid it. But, though valid, a contract so long as it is voidable cannot be
specifically enforced. The Halsbury's Laws of England, Vol. 21 para 798, p 380 (3rd Ed), Vol. 24,
para 988, p 553 (4th Ed). (C.M. Row, Law of Injunctions, Seventh Edition), further clarified that
it is not in every case of breach of contract or covenant that the court will interfere by an
injunction. The mere fact that the contract or covenant in question is clear, and the breach clear,
is not of itself sufficient to warrant the interference of the court, unless the contract or covenant
is itself of such a nature that it can be enforced consistently with the rules and principles upon
which the court acts in granting an equitable relief.

So far the as the next claim in the same injunction application that the plaintiff has allegedly
invested more than Rs. 1 Million for the construction of petrol pump, this aspect has already been
answered by the that if the defendant No.4 has allegedly committed any breach of dealership
agreement according to the plaintiff, the compensation can be claimed under the provisions of
section 73 of the Contract Act including the amount of investment, if any borne by the plaintiff
on the pump site.

For these reasons, I do not find any substance in the injunction application (C.M.A. No.11530 of
2008) which is .hereby dismissed.

There is another application pending (C.M.A. No.2665 of 2009) under Order VII, Rule 11,
C.P.C., moved by the defendant No.4 on the grounds that the plaintiff's suit is barred by sections
42 and 56 of the Specific Relief Act and there is no privity of contract between the plaintiff and
the defendant. Since the plaintiff has not filed any objection/counter affidavit to this application,
this application is deferred with the direction to the plaintiff to file counter affidavit within two
weeks as without giving an ample opportunity of hearing to the plaintiff on this application, it
would not be justified to pass any orders thereon.

H.B.T/P-
16/K?????????????????????????????????????????????????????????????????????????????????????
Order accordingly.

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