' SABIHUDDIN AHMED, J.--- This appeal by leave of the Court arises from a judgment of the Honourable High Court of Sindh dated 4-10-1995 in F.R.A. No,329 of 1991.
2. Briefly, the admitted facts appear to be that the appellant had acquired a shop (hereinafter mentioned as the demised premises) in Saddar through a registered lease deed in 1974. The deed in terms of clause (7-a) envisaged that the premises would be used for the purpose of opening a jewellery shop or any other lawful commodity and clause (12) envisaged that the lessee would not let or part with the actual or legal possession or the use of the premises or a part thereof without the previous consent in writing. It was further stipulated that in the event of the lessee's assigning, under-letting or parting with actual or legal possession in contravention of the aforesaid covenant, the lesser may without prejudice to their rights under the lease collect from the assignee but such collection will not be deemed to be an acceptance by the lessons of such persons as assignees under lessees or occupants. Clause (18) requires that if the agreed rent remaining unpaid, irrespective of a formal demand, for 15 days after becoming payable, the lease shall stand determined and the lesser would be entitled to re-enter the premises.
3. 'Admittedly the appellant commenced business as a sole proprietor in the name' and style of N.M. Chhotani Jewellers however, on 1-1-1977 inductee his brothers as his partners and continued to perform business in the demised premises under the same name and style. The terms of the partnership were reduced into writing through a deed on the same; day and subsequently the partnership firm was also registered with the Registrar of firms. Though this deed was not exhibited in evidence, it has been placed on record before us. It, inter alia, stipulates that the capital of the firm shall be contributed by all the partners in the way and manner to be agreed upon and the profits would be shared equally by all the three partners. The deed however, makes no mention of the appellant's tenancy rights in the premises.
4. Admittedly no formal information regarding the formation of the partnership firm was conveyed to the respondent. However, a letter, dated 4-1-1977 enclosing a cheque by way of rent in advance from January to December, 1977 appears to have been written on the letterhead of the firm and signed by the appellant in his capacity as a partner. In 1988 the respondent moved an application seeking ejectment of the petitioner alleging that the appellant had defaulted in the payment of rent from October, 1986 to February, 1988 and without consent of the respondent had handed over the possession of the premises to a partnership firm. The respondent submitted a written statement contending, inter alia, that the tenancy was not in his personal name but only in the name of the firm. Surprisingly, it was further averred that the allegation of the appellant having handed over possession of the premises to the firm was incorrect as the firm itself was the tenant to the knowledge of the respondent since 1977 and there was no change in the tenancy. The allegation of default however, was denied by explaining that the respondents themselves illegally refused to accept rents through cheques and money orders and, therefore, their tenants starting depositing rent in Court (MRC 240 of 1987) and continued to do so regularly. The affidavits in evidence were filed on behalf of the parties and the deponents were duly cross-examined.
Thereafter apparently written arguments were also submitted before the learned Rent Controller.
The learned Rent Controller recorded his findings on both grounds in favour of the respondents. On the first issue it was held that upon the appellant's failure to establish that partnership business was established with the consent of the respondent, the appellant rendered himself liable to ejectment. As to the allegation of default it was held that the respondents were entirely justified in refusing to accept rent tendered through cheques of the partnership firm and deposited in MRC through cheques of the firm did not constitute valid tender. The application was, therefore, allowed.
5. The appellant preferred an appeal against the ejectment order wherein somewhat surprisingly one of the grounds raised was that the firm had become the tenant of the respondents and, therefore, the ejectment application was not maintainable. Nevertheless at the hearing of the appeal it appears that such plea was given up and learned counsel premised his contention on the ground that induction of his two brothers as his partners did not amount to parting with possession for the purposes of section 15(2)(iii)(a) of the Sindh Rented Premises Ordinance, 1979. It was further urged that the respondents' acceptance of rent from the partnership concern for several years amounted to waiver of rights to evict the appellants apart from questioning the above propositions. The respondents reiterated that deposit of rent in MRC from the account of partnership firm could not be treated as valid tender. The learned single Judge hearing the appeal after taking into consideration a wealth of case-law cited recorded his findings in favour of the respondents on all the three questions and dismissed the appeal.
6. Leave to appeal was granted by this Court, inter alia, to consider whether upon induction of his two brothers as partners without leaving the premises himself, did the petitioner render himself liable to ejectment under section 15 of the Sindh Rented Premises Ordinance, 1979 as held by this Court in the case of Saeeda Begum v. Shameen Ahmed reported in 1994 SCM R 791 and whether the Honourable High Court was justified in holding that the principles laid therein were not applicable to the instant case.##TE
7. We have heard Mr. Iqbal Kazi, learned counsel for the appellant and Mian Mushtaq Ahmed, learned counsel for the respondents in great detail and must acknowledge our gratitude to them for the invaluable assistance rendered at the Bar.
8. Mr. Qazi primarily asserted that by inducting his brothers as partners in the business which was already being carried on by the appellant in the demised premises, he had not assigned his lease- hold rights and could not be stated to have parted with possession of the premises in terms of the grounds of ejectment laid down under section 15 of the Sindh Rented Premises Ordinance, 1979.
With his usual candour Mr. Kazi took us through a series of judgments of this Court as well as other superior Courts, both in his favour and against him, to show the development of law in this respect.
It may not be necessary to refer to the entire case-law cited but it may be appropriate to take note of some important judgments of this Court having a bearing on the question. In the case of Manek J. Mobed and another v. Shah Behram and others reported in PLD 1974 SC 351 the appellant was originally the tenant of the premises and had subsequently created a private limited company (though consisting of his own family members) to carry on business in the leased premises. In these conditions their Lordships held that subletting for the purposes of section 13 of the West Pakistan Urban Rent Restriction Ordinance, 1959 had taken place and observed as follows:--- "If a person obtains lease-hold rights in his own name and subsequently assigns them to a firm or to a private limited company consisting of family members it cannot be said that no change has taken place in the status of the tenant or that it is not a case of subletting or assignment of lease hold rights."
9. Learned counsel however, argued that the principles laid down in the above judgment was not applicable to the facts of the instant case. In the first instance he urged that an incorporated company as distinguished from a partnership was an altogether independent corporate personality different from its members. Nevertheless no such attribute attached to a partnership firm and business could be carried on by the firm in premises owned or possessed by one of the partners which always remained his personal property and he would be entitled to its exclusive use upon the dissolution of the firm. In this context learned counsel referred to section 14 of the Partnership Act, which reads as follows : "The property of the firm.--- Subject to contract between the partners, the property of the firm includes all property and rights and interest in property originally brought into the stock of the firm, or acquired, by purchase or otherwise, by or for the firm, or for the purposes and in the course of the business of the firm, and includes also the goodwill of the business.
' Unless the contrary intention appears, property and rights and interest in property acquired with money belonging to the firm are deemed to have been acquired for the firm."
10. Hence to determine whether the lease hold rights vested in the appellant were brought into stock of the firm, positive evidence in this respect was necessary. Moreover, as is evident from the above provision that while a presumption exists in the absence of contrary intention that interests in property acquired with money belonging to the firm are to be deemed to have been acquired for the firm, no such presumption can be attached with respect to the interest in property not so acquired.
11. Secondly, Mr. Kazi argued that while subletting was a ground for ejectment under the Rent Restriction Ordinance, 1959 the provision of the 1979 Ordinance from the standpoint of the tenant had a wider import. Whatever be the contours of the expression "subletting" section 15(2)(iii)(a) of the Sindh Rented Premises Ordinance, 1979 requires that a tenant could only be ejected if it could be shown that he had actually parted with possession of immovable property and not when he continued in possession though along with other partners. In this context Mr. Kazi referred to a judgment of this Court in the case of Saeeda Begum (supra). In the aforesaid case their Lordships clearly brought out the difference in the terminology of the relevant provisions of the 1959 Ordinance and that of the 1979 Ordinance and proceeded to hold that if a tenant does not sit in the demised premises but permits his partners to have exclusive possession of the same he could be ejected under section 15. Nevertheless mere taking of a working or financial partner bonafidely while retaining physical possession of the premises, the provision of section 15 for ejectment could not be attracted. The above view if we may respectfully say so supports Mr. Kazi's contention to the hilt.
12. Mr. Kazi also referred to a later pronouncement of this Court in the case of Habibullah v. Rent Controller Peshawar reported in 1998 SCM R 2656 which seems to go a little further in his favour. In this case ejectment of a tenant was sought under the 1959 Ordinance who had, after the inception of the tenancy, constituted a partnership firm whose business was being conducted in the demised premises. Taking into consideration the language of the provisions of both the statutes and the judgment of this Court in the case of Manek J. Mobed and another (supra) Wajihuddin Ahmed, J. Proceeded to hold that whereas under the . 1959 Ordinance a tenant could be ejected even if he had sublet a portion of the demised premises, the 1979 Ordinance requires that complete divestation of the legal and physical possession would be necessary to confer a ground for ejectment. His Lordship further proceeded to observe that in either case it was important to consider whether there was an assignment of interests in the property itself in favour of the sublessees or whether they were mere licensees authorized to carry on business along with the original lessee during the subsistence of the partnership. Only in the former case grounds for ejectment under the law could be invoked.
13. Nevertheless Mr. Kazi himself pointed out that a somewhat contrary view seems to have been taken by this Court by a three member Bench in the case of Muhammad Subhan and another v.
Mst. Bilquis Begum through Legal Heirs and 3 others reported in 1994 SCM R 1507(2). Though both the Honourable Judges deciding the case of Saeeda Begum (supra) were part of this Bench and the judgment was also authored by one of them, the view of law taken in this case seems to, be clearly stated from the following observations recorded by Saleem Akhtar, J:--- "Handing over possession is of a wider implication than mere subletting. In case a partnership firm is a tenant, then all the partners can claim the tenancy rights in proportion of their share. Each partner is deemed to be in possession of the demised property. Once a proprietary firm is changed into a partnership firm, then all the partners have right, title and interest in the tenancy, goodwill, business and assets according to their share unless otherwise provided in the partnership deed.
The petitioners have not filed partnership deed from which it could be ascertained that although the firm is a partnership firm, yet the right of tenancy was preserved in the name of petitioner No,1 and other partners did not have any right in the tenancy. In these circumstances, petitioner No,1 has created interest of other two partners in the disputed premises who shall be deemed to be in its possession as partners."
14. Mian Mushtaq Ahmed, learned counsel for the respondent on the other hand emphatically relied upon the above pronouncement in the case of Muhammad Subhan and another (supra) and argued that the view taken by a two member Bench in the case of Saeeda Begum (supra) stood expressly overruled by the aforesaid decision of a three member Bench. Learned counsel further argued that it was wrong to assert that the appellant had not assigned his tenancy rights and in this context he primarily relied upon the pleadings of the parties and the evidence adduced before the Rent Controller. Learned counsel pointed out that both in the written statement verified on oath as well as memo. Of appeal, the appellant had categorically asserted that lease-hold rights stood transferred to the firm comprising three partners each of whom had equal rights and the application for ejectment against him was not maintainable. Learned counsel also pointed out that the appellant had categorically denied the factum of his tenancy in para.6 of his affidavit in evidence in cross-examination he made the following assertions on oath and it is a fact that "we are three equal partners of assets of the firm and the shop". Moreover that the partnership deed unlike those in the cases of Saeeda Begum (supra) and Habibullah (supra) did not even mention that lease hold rights continued to remain vested in the appellant.
15. We have anxiously considered the respective contentions of learned counsel and have gone through the record. Taking up the question of default we tend to agree with Mr. Iqbal Kazi inasmuch as the mere fact that the rent was not disbursed from the personal account of the appellant does not by itself amount to default. All that the law seems to ensure is that the landlord must receive the rent due at the appropriate time and it is not his concern how the tenant arranges for its tender. The findings of the Courts below on this account appear to be unsustainable.
16. Coming to the crucial question of parting with possession, a careful reading, of the judgment in the cases of Saeeda Begum (supra) and Muhammad Subhan and another (supra) mentioned above, in our opinion do not contain conflicting views and could be perfectly reconciled. As is evident from the excerpt from the observations. Of Saleem Akhtar, J. In the latter case the view that handing over possession was a concept somewhat different from subletting was acknowledged.
All that their Lordships appear to state was that though in the former case the partnership deed tendered in evidence clearly stipulated that tenancy rights would continue to vest in the original tenant the deed in the latter case was not produced. His Lordship apparently only intended to say that in the absence of a specific term in the partnership deed a presumption would arise that tenancy rights stood transferred to all partner carrying on business in the demised premises. Mr. Kazi no doubt urged that such a presumption was not warranted by the provisions of section 14 of the Partnership Act. Nevertheless it is not necessary to pronounce upon this delicate question in view of the categorical admission of the appellant as to assignment of interests in tenancy without permission of the landlord which is, inter alia, evident from his pleadings as well as the following statement in cross-'examination:--- "It is a fact that I did not intimate the applicant/landlord regarding the change of proprietorship business into partnership business nor I sought the permission. It is a fact that we are three equal partners of assets, of the firm and the shop."
17. We also tend to subscribe to Mr. Kazi's assertion that the later pronouncement in the case of Habibullah (supra) represent the correct view of law. In this context we are of the view that while interpreting the provisions of such statutes the intention of the Legislature as far as it could be gathered from the operative provisions and the preamble also needs to be taken into consideration. It ought to be considered what the law intended to achieve and the mischief that it required to be curbed. The preamble to the 1979 Ordinance suggests that it was intended to regulate relations between landlord and the tenants and protect their respective interests in respect of rental premises. Keeping this in view it appears that when a landlord chose to induct a tenant in a building owned by him he needed assurance that the tenant would pay rent and abide by other covenants of the lease. To protect his interest the law stipulates that the tenant, without his consent, would not abdicate his responsibility by divesting himself of interests and leave the landlord at the mercy of a complete stranger. With the object of curbing this mischief the relevant provision in the statute was designed, therefore, as long as the tenant continued to remain in possession and undertook to perform his obligations under the lease, no interest of the landlord would be affected and as such it is difficult to conceive that a ground for ejectment might still become available to seek the tenants eviction. In our view, the opinion of Wajihuddin Ahmed, J. In the case of Habibullah (supra) represents correct view of the law. Nevertheless Mian Mushtaq Ahmed contention to the effect that tenancy rights in the instant case were admittedly transferred in favour of the partnership firm as is evident from the written statement as well as the deposition of the appellant is equally formidable. Therefor, it will have to be seen whether the assignment of such did take place.
18. Nevertheless the appellant's difficulty seems to stem from the fact that it is well-settled, as has also been observed even in the judgment in the case of Habibullah (supra) that it needed to be determined whether the newly inducted partners had acquired any rights in the leased premises or were merely the licensees of the original tenant. In the instant case as has been clearly pointed out by Mian Mushtaq Ahmed that more than once the appellant categorically asserted that he had ceased to remain a tenant and that the tenancy rights stood transferred to the entire partnership firm consisting of three partners. The plea of the respondent's acceptance of cheques from the firm obviously does not create an estoppel because the law expressly requires that transfer of such rights can only be affected with prior consent of the landlord. The word "prior" occurring in the statute cannot be ignored and even a subsequent ratification by the landlord through his conduct, in our view, would not debar him from exercising rights conferred by law.
19. For the foregoing reasons we are constrained to dismiss this appeal. However, being a commercial premises, six months time is granted to the appellant to vacate the same.