P L D 2024 Balochistan 50
Before Naeem Akhtar Afghan, C.J. and Shaukat Ali Rakhshani, J
Messrs USMAN SHIP BREAKERS through Proprietor---Petitioner
Versus
GOVERNMENT OF BALOCHISTAN through Secretary Ministry of Planning and
Development, Balochistan and 4 others ---Respondents
Constitution Petition No. 1338 of 2021, decided on 10th January, 2023.
Balochistan Ship Breaking Industry Rules, 1979 ---
----R. 14(1) ---Shipbreaking ---Allotment of plots ---Lease agreement, violation of ---
Cancellation of allotment ---Petitioner was a Ship -Breaking Company which was allotted
plots in Gaddani Ship- breaking Yard for beaching vessels by the respondents (Balochistan
Development Authority) ---Petitioner invoked constitutional jurisdiction of the High Court
alleging that allotment order had been cancelled in clandestine manner by the respondents while it was facing financial crises ---Validity ---Petitioner was allotted two plots in Gaddani
Ship -breaking Yard in the year 2012 and a lease agreement was also executed ---During the
first five years of the lease agreement, several vessels were beached and salvaged due to which no controversy arose between the petitioner and the respondents, which led them to
renewal of the allotment for further five years, following execution of lease agreement in the
year 2017---Rule 14(1) of the Rules 1979 manifested that after the allotment of the lease, the
allotted plots could not be left vacant without a ship for more than four months, however, the same could be extended for further four months, but with the prior approval of the Authority in writing for good reasons shown after being satisfied for not beaching the ship within the stipulated period of four months and that if the Rule was violated the lease would automatically stand terminated ---Furthermore, the relevant para of the lease- deed executed
by the petitioner also provided a similar condition--- There was no denial on the part of the
petitioner and endorsed by the respondents that the last vessel beached on the allotted pots in the year 2017, but thereafter no vessel had been beached by the petitioner ---Petitioner had
not placed on record any tangible evidence to substantiate his claim regarding his inability, including financial crises faced by him to beach the vessels ---Record revealed that after
cancellation of the allotment of the plots -in-question, the same had been allotted to another
ship-breaking company which had executed lease agreement, in consequence thereof a vested
rights had been created in its favour, but the petitioner had not arrayed the said company as respondent in the present petition, which now had an infeasible right in the allotted plots ---
Moreover, the lease- in-question was executed in the year 2017 for five years which had
elapsed in the year 2022 ---Hence, the lease executed in favour of the petitioner was no more
in field ---Allegation about cancellation of allotment order by putting back dates on the same
in clandestine manner had not been substantiated by the petitioner ---Constitutional petition
was dismissed, in circumstances.
Tahir Ali Baloch for Petitioner.
Syed Ayaz Zahoor and Abdul Zahir Kakar for Respondents Nos. 2 to 4.
Zahoor Ahmed Baloch, Assistant Advocate General for Respondent No.5.
Date of hearing: 20th December, 2022.
JUDGMENT
SHAUKAT ALI RAKHSHANI, J. ---The captioned constitutional petition has been
brought by the petitioner under Article 199 of the Constitution of Islamic Republic of
Pakistan 1973 ("Constitution"), which carries the following relief;
"(i) Declare that the registered existing registered lease agreements dated 14.12.2017, in favour of the Petitioner, in respect of Plots Nos.111 and 112 at Gadani Shipbreaking Yard, is in operation and cannot be cancelled without the intervention of a court of law;
(ii) Declare that the Impugned Letter, whereby the Petitioner was informed about the allotment of its plots to a third party on the basis of illegal order dated 30.07.2021; and especially during the pendency of appeal, is contrary to law, arbitrary, unjustified, without lawful authority and based on mala fide.
(iii) Declare that the unilateral cancellation letter dated 30.07.2021, passed by the Respondent No. 3, is illegal, without jurisdiction and against the constitution and natural justice as the same has been passed without providing any opportunity of hearing to the Petitioner.
(iv) Declare that Rules 14(1) and 16(1) of the Shipbreaking Rules, 1979 has no relevance to the case of the Petitioner.
(v) Direct the Respondents Nos. 3 and 4 to immediately cancel all allotment(s) of the subject plots, if allotted, to any third party; and not to create any third party interest in respect of Plots Nos. 111 and 112 at Shipbreaking Yard, Gadani in future during the disposal of this petition and till such time the appeal is not decided by the Respondent No. 2.
(vi) Restrain the Respondents Nos. 3, 4 and 5 from execution and registration of lease agreement(s) in respect of Plots Nos. 111 and 112 at Shipbreaking Yard, Gadani, in favour of any person or legal entity, other than the Petitioner.
(vii) Restrain the Respondents Nos. 3 and 4 and their employees and anybody acting
under them, from taking any coercive steps for dispossessing the Petitioner from its plots, in any manner, during the pendency of this petition and during the pendency of the appeal which is subjudice before the Respondent No. 2.
(viii) Declare that after filing of appeal before the Respondent No. 2, the Respondent No.
3 has become functus officio and has no right to re -allot the subject plots to anybody
before deciding of appeal.
(ix) Cost of the Petition.
(x) Any other relief(s) which deem fit by this Honourable Court under the circumstances
of the case."
2. Messrs Usman Ship Breakers is a company, engaged in the business of ship- breaking
and was allotted two plots, bearing Plots Nos.111 and 112 ("the allotted plots") vide
allotment order Nos.BDA/ GSBD/2 -111/2012/779- 80 and BDA/GSBD/2 -112/2012/781- 82
dated 14.05.2012 each measuring 1.619 hectars by respondent No.4, i.e., Ship- breaking
Division Hub of Balochistan Development Authority ("BDA") subject to certain conditions and payment of dues contained therein followed by two separate lease agreements executed on 16.05.2012 between the petitioner and BDA for five years commencing from 16.05.2012 till termination of the lease with the conditions enumerated and agreed in the lease deed.
3. According to the petitioner, his company beached several vessels, and after salvage
paid requisite levy fee as per the above Lease Agreements; the first tenure went without any issue; on completion of five years period, the lease agreements were renewed and extended for a further period of five years vide lease agreements dated 14.12.2017 by respondent No.3
with similar terms and conditions; in the year 2016 a vessel namely "ACES" was beached at
plot No.54 of the shipping yard Gaddani, which was imported by a ship- breaking company
styled as Ghaffar and Company owned by the brother of the petitioner, which caught fire, resulting into heavy financial loss to the petitioner and his brother.
The petitioner further contended that both the brothers went through a serious
financial crunch and for such reason the financial institutions obviated to render financial assistance to them, therefore, the petitioner was unable to purchase vessels for beaching and salvaging; but now they have come out of the financial crises and the petitioner is in a position to buy and beach the vessels; the petitioner made a request vide letter dated 22.06.2021 to respondent No.4, which was received by him on 23.06.2021, apprising him about the situation faced by the petitioner for not beaching the vessels within the stipulated period with the assurance that in the month of September -October 2021, the ship shall start
beaching on the allotted plots.
The petitioner further pleaded that another letter dated 06.08.2021 was sent through
TCS to respondent No.3, which was duly served on 06.08.2021 with the above assurance; but to the utter surprise of the petitioner, instead of positive response to the letters sent by the petitioner to respondents Nos.3 and 4, a consolidated notice bearing No. BDA/ GSBD/2-111/1112/ 2021/ 273- 75 dated 30.07.2021 was dispatched on 06.08.2021 regarding
cancellation of the allotted plots w.e.f. 30.07.2021 under Rule 14(1) read with rule 16(1) of the Balochistan Ship Breaking Industry Rules, 1979 ("Rules of 1979") for non- compliance of
the statutory requirements of beaching the vessels, which was received by the petitioner on 07.08.2021.
4. The petitioner being dismayed from the consolidated notice of cancellation of allotted
plots dated 30.07.2021 filed an appeal under section 17 of the Rules of 1979 before the
Board of Directors, which was received by respondent No. 1 on 26.08.2021 but during pendency of his appeal, respondent No.3 in response to the above, conveyed him the order dated 06.09.2021 ("impugned order"), whereby the petitioner was intimated that his request has been turned down and the allotted plots have been allotted to another shiping company,
and the petitioner was further directed to remove all his belongings within a week time,
failing which the same shall be confiscated as per Rules of 1979 at his risk and cost and that
the loss incurred to the lessee shall be borne by him.
5. In response to the petition, respondents Nos. 2 to 4 filed para -wise comments,
resisting the petition on factual and legal premises, whereas learned AAG appearing on behalf of respondents Nos.1 and 5 opted not to file para -wise comments.
6. Learned counsel for the petitioner inter alia contended that the company of the
petitioner is a well reputed, which is engaged in the business of ship breaking for several decades, who after allotment of the plots bearing Nos. 111 and 112 had utilized the same in the first five years tenure (2012- 2017) by beaching various vessels for salvaging, but after
renewal of the lease agreement of the allotted plots in the second tenure (2017 -2022) the
vessels could not be beached except one due to financial crisis, pertaining to the incident of vessel 'ACES' which caught fire, but respondent No.3 cancelled his allotted plots without show cause notice in a clandestine manner and allotted the same to third party maliciously. He maintained that the registered lease agreements executed between the petitioner and respondent No.3 could not be cancelled without notice in advance and due course of law because the agreement had to lapse on 14.12.2022, and he was -is entitled for renewal of the
allotment and lease for further five years.
Conversely, learned counsel for the respondents Nos.3 and 4 vigorously opposed the
contention put forth by the learned counsel for the petitioner. He urged that since the petitioner had failed to beach the vessel within the stipulated period as such in view of the lease agreement dated 14.12.2017 his lease stood canceled as per the terms of the lease and that the petitioner had violated the provision of Rule 14(1) and para (6) of the lease agreement ibid. It was further contended that after cancellation of the allotted plots the same has been allotted and leased out to Simon Ship -breakers, who have not been made party in
the petition thus, the same is not maintainable and requested for the dismissal of the petition.
7. Heard. Record pondered upon with the able assistance of learned counsel for the
parties. The petitioner was allotted Plots Nos. 111 and 112 in Gaddani Ship- breaking yard on
14.05.2012 and consequently a lease agreement dated 16.05.2012 was executed. During the first five years of the lease agreement several vessels were beached and salvaged due to which no controversy arose between the petitioner and respondents Nos.2 to 4, which led them to renew the allotment for further five years, following execution of lease agreements dated 14.12.2017.
8. For ease of understanding the provisions related to the controversy, the relevant
excerpt of rule 14(1) of the Rules of 1979 is reproduced hereunder;
"14. WORKING OBLIGATIONS:
(1) The lessee or the allottee shall not keep the plot vacant without a ship for more
than 4 months from the date of issue of allotment order of the plot or the grant of the lease. This period may be extended for further period of four months by the Authority in writing on being satisfied that there are good reasons for such extension. Violation of this rule shall result in automatic termination of the lease or the allotment."
[Emphasis added]
9. The rule ibid manifests that after allotment of the lease the allotted plots cannot be left
vacant without a ship for more than four months, however, the same can be extended for further four months, but with the prior approval of the authority in writing for good reasons shown, after being satisfied for not beaching the ship within the stipulated period of four months and that if the rule is violated the lease shall automatically stand terminated. Furthermore, para -6 of the lease deed dated 14.12.2017 also provides a similar condition,
which reads as under;
"6. That the lessee shall not keep the plot vacant without a ship for more than four months from date of allotment order or in the subsequent period except under special permission in writing be granted by the Authority on being satisfied that there are good reasons for the extension of the 4 months period Violation of this Rule shall result in automatic termination of the lease. In case of such termination, the lessee shall be liable to pay lease money from the date of allotment order of the plot up to the date of termination of the lease."
10. There is no denial on the part of the petitioner and endorsed by the respondents Nos. 2
to 4 that the last vessel "MV Glabal Trader -1" beached on the allotted plots on 16.09.2017,
but thereafter no vessel has been beached by the petitioner. The petitioner has not placed on
record any tangible evidence to substantiate his claim regarding his inability including financial crisis faced by him to beach the vessels. After cancellation of allotment of the plots in question, the same has been allotted to a Ship- breaking Company styled as Simon Ship -
breakers, who has executed lease agreement in consequence thereof a vested right has been created in its favour, but the petitioner has not arrayed the said company as respondent in the petition, who now has an indefeasible right in the allotted plots. Moreover, the lease in question was executed on 14.12.2017 for five years, which has lapsed on 14.12.2022. Hence presently the lease ibid is no more in field.
11. The allegation about cancellation of allotment order by putting back dates on the
same in a clandestine manner has not been substantiated by the petitioner.
12. In view of the above, the constitutional petitions being devoid of merits is dismissed.
The earlier interim order dated: 15.09.2021 stands recalled.
MQ/67/Bal. Petition dismisseThis 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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