P L D 2024 Balochistan 129
Before Naeem Akhtar Afghan, C.J. and Muhammad Aamir Nawaz Rana, J
AHMEDULLAH and another ---Petitioners
Versus
PROVINCE OF BALOCHISTAN through Addl. Chief Secretary (Dev) and others ---
Respondents
C.Ps. Nos. 195, 1079 and 1309 of 2020, decided on 4th May, 2023.
(a) Balochistan Development Authority Act (X of 1974) ---
----S. 18 ---Balochistan Ship Breaking Industry Rules, 1979, S. 15(2) ---Constitution of
Pakistan Arts. 199 & 270- A---Tonnage fee, levy of ---Petitioners alleged that they were
carrying out their activity on the private plots, as such the demand of respondents for tonnage
fee was illegal ---Validity ---Martial Law Order (MLR) No. 115, which was subsequently
adopted by Parliament by inserting--Article 270 -A in the Constitution on 30.12.1985 through
8th Amendment in the Constitution, contemplated that the ship breaking industry in the coastal area shall be conducted only and exclusively on a plot or land allotted for that purpose by the Balochistan Development Authority---Further, ship breaking in any other area/place without the express permission of the Balochistan Development Authority was
prohibited in the said order ---Thus, the contention of the petitioners that they were carrying
out scrapping of imported vessels by beaching the same at private plots had no relevance or
significance as any such activity was prohibited under the law ---Petitions were accordingly
dismissed.
Mustafa Impex's Case PLD 2016 SC 808 ref.
(b) Interpretation of statutes ---
----Fiscal statute ---Fee, charging of ---Principles ---No doubt fee is always levied on services
rendered by Government to its payer ---If the charge of money by the Government is not
against the service provided, then such levy cannot be termed as fee--- In other words, quid
pro quo is an essential ingredient which brings a levy within the definition of term 'fee', i.e.
charge payable for rendering specific service or extending specific privilege which the payers can avail subject to the conditions that may be attracted to it.
Osman A. Hadi, Mujeeb Ahmed Hashmi and Sarosh Jameel for Petitioners.
Zahoor Ahmed Baloch, Assistant Advocate General for Respondent No. 1.
Syed Tanweer Ashraf for Respondent No. 2.
Date of hearing: 15th March, 2023.
JUDGMENT
MUHAMMAD AAMIR NAWAZ RANA, J. ---Through this common judgment, we
intend disposing of above captioned petitions as identical propositions of law and similar facts are involved in these petitions.
2. The petitioners are in the business of shipbreaking at Gaddani. It is the case of
petitioners that since they are carrying out scrapping of imported vessels which are beached at private plots in Gaddani Shipbreaking Yard, therefore the charging provisions of the Balochistan Development Authority Act, 1974 (hereinafter "BDA Act") and the Balochistan Ship Breaking Industry Rules, 1979 (hereinafter "the Rules, 1979"), particularly section 18(2)(d) of the BDA Act does not apply in the case of petitioners as they are carrying out their activity on the private plots.
The petitioners have also questioned the legality of tonnage fee being charged under
sub-rule (2) of Rule 15 of the Rules 1979 on the ground that the petitioners are not receiving
any services in reciprocal to the fee paid by them; further questioned the mandate and scope
of the BDA Act and the rules framed thereunder to impose, claim and increase the tonnage fee.
3. Messrs Osman A. Hadi, Mujeeb Ahmed Hashmi and Sarosh Jameel, Advocates
appearing on behalf of the petitioners mainly contended that charging of tonnage fee is quid pro quo to any direct benefit; since respondents are not providing any services, therefore charging of tonnage fee is illegal. Further contended that enhancement rate in the tonnage fee is not in accordance with law as the proper mechanism provided in the Balochistan Government Rules of Business, 2012 was not adopted. According to learned counsel, enhancement in tonnage fee vide Notification No. RO(BDA)/P&D/(505)/ 2017- 18/4795 by
the Additional Chief Secretary (Dev.), Planning and Development Department (BDA Section), Government of Balochistan ('GoB') with the prior approval of the Chief Minister Balochistan is against the dictum laid down by the Supreme Court in Mustafa Impex Case
1.
Learned counsel emphasized that since the petitioners are carrying out their activity of dismantling the imported vessels, beached at private plots, therefore they are not liable to pay the tonnage fee.
Conversely, Syed Tanweer Ashraf, Advocate appearing on behalf of Balochistan
Development Authority ('BDA'), while referring different provisions of the BDA Act, the Rules 1979 and Martial Law Order No.155 published in the Balochistan Gazette (Extraordinary) No. 11 dated 11.01.1984, strongly repudiated the stance of the petitioners and stated that since the petitioners are carrying out their business activity of dismantling the
imported vessels, therefore they are liable to pay the tonnage fee as per applicable law and
rules. According to learned counsel, dismantling of imported vessels without license is
illegal. The claim of petitioners regarding private plots was also refuted by learned counsel for BDA by stating that all the plots in Shipbreaking Yard belong to the Government of Balochistan and BDA has been assigned the task to lease out the same to the Ship Breakers in accordance with the BDA Act. Learned counsel pointed out that previously few plots had wrongly been transferred in the name of private persons in the year 1988 which transfer was challenged by respondent No. 2 (BDA) before the revenue authorities and the Competent Authority cancelled the mutations in favour of private persons which order had been upheld upto the Supreme Court of Pakistan, therefore, per learned counsel, the petitioners have mentioned incorrect facts. With regard to enhancement of rates in the tonnage fee, learned
counsel submitted that through Notification dated 24.07.2018 issued by Planning and
Development Department (BDA Section) GoB, the tonnage fee was enhanced to Rs.800/ - per
ton but subsequently through negotiations with office bearers of Ship Breakers Association,
the issue was sorted out and vide Order dated 29.03.2019, the tonnage fee was fixed @ Rs.350/ - per ton. Per learned counsel, since the petitioners, despite knowledge of said
Notification and order, had not challenged the same before any forum and even in these petitions as well the said Notification and order have not been assailed by them, therefore
considering the doctrine of acquiescence as well as laches, the petitions, being not
maintainable, deserve dismissal. While concluding his arguments, learned counsel submitted that the petitioner in Constitution Petition No.195/2020 i.e. Mr. Ahmedullah is not only
member of Balochistan Ship Breakers Association but he has remained its office bearer for
quite some time and in pursuance of the agreement between BDA and Ship Breakers
Association, he has been paying the tonnage fee without any objection, therefore the
petitioners are legally barred to agitate this issue considering the doctrine of estoppel by conduct.
4. We have heard learned counsel for the parties and have perused the record.
5. The BDA Act was promulgated on 22.07.1974; its preamble envisages establishment
of a Development Authority for the promotion of the economic and industrial development of Balochistan and for matters ancillary thereto. Under section 18 of the ibid Act, the
Authority was authorized to take such measures and exercise such powers as may be
necessary for carrying out the purposes of the said Act. Through Balochistan Ordinance XI of 1980, which had taken effect from 04.06.1974, words "tonnage charges", "royalty" or "any
other fee" were inserted in section 18(2)(d) and (e) of the BDA Act. For the facility of ready
reference, same is reproduced herein below:
"18. (1) Subject to provisions of this Act and the rules made thereunder, the Authority
may take such measures and exercise such powers as may be necessary for carrying out the purposes of this Act.
(2) Without prejudice to the generality of the powers conferred by subsection (1) the Authority may:
(a) ----------------------
(b) ----------------------
(c) ----------------------
(d) with the previous sanction of the Government, impose [tonnage charges or royalty or] development fee, Abyana, or any other fee or charge to meet the expenses
incurred by the Authority in the performance of its functions or on the provision of
any benefits or services.
[(e) The Tonnage Charges or royalty or development fee Abyana or any other fee or
charges described in clause (d) shall be recoverable as arrears of land revenue.]"
6. In pursuance of section 30 of the BDA Act, the Rules, 1979 were framed. Rule 14(1-
A) of Rules, 1979 stipulates that whosoever beaches a vessel at any Coastal area in
Balochistan shall be required to obtain a No Objection Certificate ('NOC') from the General
Manager BDA Shipbreaking Yard at Gaddani and in case of breach of Rule 14(1- A) of Rules,
1979, punitive action under Rule 15(4) of the Rules, 1979 will be taken by the Competent
Authority which categorically stipulates that whosoever beaches a ship/ vessel without a
proper lease agreement or allotment order shall, in addition to being liable to be dispossessed
with the use of such force as may be necessary, would also be liable to pay an amount equal
to three times the lease money/ allotment fee and tonnage charges and furthermore, shall also
be liable to pay any other penalty specifically or generally provided.
7. Martial Law Order (MLR) No.155, which was subsequently affirmed and adopted by
the Parliament by inserting Article 270 -A in the Constitution of Islamic Republic of
Pakistan, 1973 (hereinafter "the Constitution") on 30.12.1985, through 8th Amendment in the Constitution, contemplated that the shipbreaking industry in the Coastal area in Tehsil Hub District Labella shall be conducted only and exclusively on a plot or land allotted for this purpose by the BDA. Further, shipbreaking in any other area/place without the express permission of the BDA was prohibited in the said order.
8. In view of above referred legal enactment, the contention of learned counsel for the
petitioners that the petitioners are carrying out scrapping of imported vessels by beaching the same at private plots has no relevance or significance as any such activity is prohibited under the law. Surprisingly, despite insertion of words "tonnage charges", "royalty" or "any other fee" in section 18(2)(b) and (e) of the BDA Act in the year 1980, no challenge has been thrown at the above referred Act, rules and at subsequent amendments, rather record transpires that the petitioners have been paying the tonnage fee while complying with the referred charging provision of Act and rules.
9. Though the petitioners' main emphasis in all the captioned petitions had been that
since the petitioners are scrapping the vessels/ships at private plots, therefore the charging provisions of the BDA Act do not apply to them. During the course of arguments when learned counsel for the petitioners was confronted with the legal aspect of these cases in the light of referred Act and Rules, learned counsel for the petitioners shifted his stance towards increase of tonnage fee by the respondents by referring the increase illegal, unconstitutional and in violation to the dictum laid down by the Supreme Court in Mustafa Impex Case (supra).
We have considered the above contention of learned counsel for the petitioners in the
backdrop of previous Notification dated 23.02.2018 issued by Planning and Development Department (BDA Section) GoB, whereby the rate of tonnage fee collected by BDA at Gaddani Shipbreaking Yard was enhanced from Rs.50/ - per ton to Rs.800/ - per ton (with
annual increase of 1% for 5 years); the said Notification was challenged by Messrs Pakistan Ship Breakers Association and others before this Court by filing Constitution P etition
No.411/ 2018; during hearing of the said Constitution Petition, the Pakistan Ship Breakers
Association as well as Chairman BDA had opted to resolve the issue through negotiations; in
that context record transpires that meeting between BDA management and office bearers of Ship Breakers Association was convened on 16.09.2018, wherein the parties resolved the issue of the enhancement in tonnage fee with consensus, in the following terms:
a) Rs.200/LDT till 30.06.2019.
b) Rs.350/LDT with effect from 01.07.2019.
c) Annual Increase of 2.5% w. e.f. 01.07.2020".
10. In pursuance of the above consensus between the Ship Breakers Association and
concerned official respondents, Constitution Petition No.411/2018 was disposed of by this Court vide order dated 14.12.2018, which reads as under:
"The learned counsel for the BDA places on record copy of the settlement and stated that the BDA decided to withdraw the impugned notification. He stated that the parties have reached a settlement, pursuant to which tonnage fees has been agreed between the parties, which is mentioned in the settlement
deed. The learned counsel stated that the BDA is going to issue afresh notification as per
the agreement.
The learned counsel for the petitioner stated that he has no contact with his client.
We have heard the learned counsel for the respondent/BDA. Through this petition, the petitioner has challenged the Notification No.RO(BDA)/P&D/ (505)/2017- 18/4795
dated 23rd February, 2018, which according to the learned counsel has been
withdrawn by the BDA, therefore, the grievance of the petitioner has been redressed. As far as the settlement between the parties is concerned, this is for them to follow, as it is not the subject matter of this petition. Under such circumstances, the petition having borne fruit, is disposed of accordingly".
11. Subsequently, in pursuance of settlement between Pakistan Ship Breakers Association
and BDA, vide Order dated 29.03.2019, the aforementioned rates of tonnage fee were fixed by Chairman BDA.
12. The petitioners' objection regarding issuance of initial Notification dated 23.02.2018
without prior approval of the Provincial Cabinet in the light of ibid case (Mustafa Impex Case) is without any substance as the record divulges that though the initial Notification for enhancement in tonnage fee was issued on 23.02.2018 by the Additional Chief Secretary (Dev.), Planning and Development Department (BDA Section), GoB with the prior approval of the Chief Minister Balochistan but thereafter this matter was placed before the Provincial Cabinet in its meeting held on 29.05.2018 as Agenda Item No. 12 and the Provincial Cabinet had given approval for enhancement of rates; for the facility of ready reference, the decision of Provincial Cabinet is reproduced:
"Decision
The Provincial Cabinet unanimously approved the proposed enhancement of tonnage fee from Rs.50/ - to Rs.800/ - per ton and amendment in the Balochistan Ship Breaking
Rules, 1979, as specified below: -
In the aforesaid Rules, in rule 15 in sub- rule (2) for the words and figures "Rs. 50/ -
per tonnage fee", appearing after the words "at the rate of", the words and figure will be "Rs. 800/ - per ton (with annual increase of 1 %) for 5 years" shall be substituted
with immediate effect".
13. In pursuance of above decision of the Cabinet, the 2nd Notification was issued on
24.07.2018 by the Additional Chief Secretary (Dev.), Planning and Development Department (BDA Section), GoB. Despite aforementioned approval by the Provincial Cabinet and subsequent Notification dated 24.07.2018, the Order dated 29.03.2019 was issued by the Chairman BDA, whereby tonnage fee has been fixed @ Rs.350/ - LDT w.e.f. 01.07.2019 with
annual increase of 2.5% w.e.f. 01.07.2020; which apparently is an outcome of amic able
settlement between BDA and Pakistan Ship Breakers Association and the said order is still holding the field. So in this context, the argument of learned counsel for the petitioners that enhancement in the rates of tonnage fee without approval of the Provincial Cabinet seems
misplaced and out of context, rather as a matter of fact the Provincial Cabinet has given the
approval for tonnage fee of Rs.800/ - per ton and only as a result of mutual settlement lesser
fee is being charged by BDA.
14. No doubt fee is always levied on services rendered by Government to its payer
meaning thereby a fee can be regarded as a charge of payment for a service rendered by the Government to its payer and if the charge of money by the Government is not against the service provided, then such levy cannot be termed as fee. In other words, quid pro quo is an essential ingredient which brings a levy within the definition of term 'fee'. The Government of Balochistan, as mentioned above, has assigned the task to BDA to lease out the plots to the Ship Breakers under the BDA Act; BDA is not only leasing out the plots to the Ship Breakers but considering the penal provisions of the Rules 1979, it is constantly keeping a check upon illegal scarping of imported vessels/ships without obtaining NOC or by beaching the vessels/ships at any unauthorized plot. In this context tonnage fee is being charged by BDA which is being paid by the Ship Breakers of Balochistan since 1980 without any objection.
15. In view of the doctrine of acquiescence as well as laches, the petitioners' objection,
that too, approximately after delay of 40 years, without any explanation or justification is not worth consideration. Reliance in this regard is being placed upon the case titled as S.A. Jameel v. Secretary to the Govt. of the Punjab
2 in which the Supreme Court while addressing
the question of laches has observed that "there is marked distinction between delay in filing of a legal proceedings within the period specified under the provisions of Limitation Act, 1908 and undue time consumed by a party in filing of Constitutional petition, for which no statutory period is prescribed under the law; in the former case, delay of - each day is to be
explained by furnishing sufficient cause for enlargement of time and condonation of delay within the contemplation of section 5 of the Limitation Act whereas in the later case lapse of time or the question of laches has to be examined on equitable principles for the reason that the exercise of Constitutional jurisdiction is always discretionary with the Court and the relief so granted is always in the nature of equitable relief in case if the Court finds that the party invoking writ jurisdiction of the High Court is guilty of contumacious lethargy, inaction, laxity or gross negligence in the prosecution or a cause for enforcement of a right, the Court would be justified in non- suiting such person on the premise of laches"
16. On the basis of above deliberations and in the light of approval for enhancement of
tonnage fee by the Provincial Cabinet duly notified by the Government of Balochistan, subsequent Order by BDA in the light of the settlement between BDA and Pakistan Ship Breakers Association, payment of the tonnage fee without any objection by the petitioners till waking up from deep slumber by filing these constitution petitions and prohibition of scrapping of imported vessels/ships on private plots under the BDA Act and the rules framed thereunder; it is concluded that under section 18(2) (d) and (e) of the BDA Act, BDA is entitled to charge and increase tonnage fee in accordance with law and rules framed thereunder.
For the foregoing reasons, all these petitions, being devoid of merits, are dismissed.
The interim order dated 05.07.2021 passed in Constitution Petition No.195/2020, interim order dated 24.06.2021 passed in Constitution Petition No. 1079/2020 and interim order
dated 24.06.2021 passed in Constitution Petition No.1309/2020 stand recalled.
JK/79/Bal. Petitions dismissed.This judgment is reproduced from a publicly available source for informational purposes and does not constitute legal advice. If you believe this listing contains an error,
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