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2009 YLR 1124

STATE LIFE INSURANCE CORPORATION OF PAKISTAN, KARACHI vs Messrs

Citation2009 YLR 1124
CourtSindh High Court
Judge(s)Abdul Rasheed Kalwar
ResultOrder accordingly

' ABDUL RASHEED KALWAR, J.---By this single judgment, I propose to dispose of both these petitions as they arise out of the same impugned order.

' State Life Insurance Corporation is the landlord of Messrs Victor Restaurant in respect of premises admeasuring 1000 sq. Feet, situated on ground floor of the building known as State Life Insurance Building No,7 constructed on Plot bearing Survey No,20/CK-8, G.A. Allana Road, Karachi. The rate of rent was Rs,0.325 per sq. Ft. Per Month totalling to Rs,325 per month excluding electricity charges.

2. The landlord filed Rent Case No,752/96 under section 8 of the Sindh Rented Premises Ordinance, 1979 before the Court of Rent Controller, Karachi South and thereby prayed for determination of fair rent at the rate of Rs,16 per sq. Ft, per month, from the date of institution i.e, 14-5-1996. The tenant through its one partner filed written, statement thereby they disputed area of 1000 sq. Feet; besides they resisted the enhancement of rent on various grounds including the old and dilapidated condition of the building. The tenant asserted that they are just running tea shop serving tea and snacks to the passengers. The tenant further asserted that the covered area of the tenement would hardly by 600 sq. Feet. They raised objections in the written statement that provisions of Rent Act may not be applicable as the case premises comes within the area of K.P.T.

3. The landlord filed affidavit in evidence of one Muhammad Hanif on 27-2-1998 and produced lease deed dated 4-11-1992 executed between the State Life Insurance Corporation and Messrs Citi Bank Limited, lease deed dated 3-12-1997 between State Life Insurance Corporation and Messrs Deutsche Bank, A.G. And lease deed dated 19-2-1997 between State Life Insurance Corporation and Messrs A.F. Ferguson & Co. He produced statement of maintenance dated 23-2-1998, year-wise statement of water conservancy charges along with paid 38 challans, year-wise statement along with 47 paid challans showing increase in the tax on the property and a power of attorney of one Muhammad Latif Choudhry executed on 8-2-1996.

4. In defence, one Behrose Felfeli filed his affidavit in evidence on behalf of tenant, on 22-4-2004. He had produced 3 challans of the rent deposited in Court and 14 photographs of the tenement. The witness was also cross-examined.

5. The IVth Rent Controller, Karachi South (Mr. Anand Ram D. Sairani) allowed the landlord's prayer vide order dated 30-9-2004 and enhanced the rent to the extent of 20 times which became Rs,6,500 per month and directed to be paid to the landlord after the date of passing of the order and in future.

6. The tenant being aggrieved by and dissatisfied with the order passed by the learned Rent Controller, filed F.R.A. No,163/04 which was decided by Mr. Abrar Hussain Memon, IVth Additional District Judge, Karachi South vide order dated 30-9-2004 and thereby set aside the order of Rent Controller. The case was remanded to the Court of Rent Controller with the direction to hear the learned counsel for the parties and decide the application afresh discussing the ingredients of section 8 of the Sindh Rented Premises Ordinance, 1979 and considering the evidence and documents brought on record by the respective parties.

7. In consequence of this order, matter was remanded back to the Court of IVth Senior Civil Judge & Rent Controller, Karachi South; where, on 9-2-2005, the tenant filed an application under Order XI, Rule 14, C.P.C. Supported by an affidavit, praying the Court for direction against the landlord to produce all the documents pertaining to property bearing Survey No,20/CK-8, known as State Life Insurance Building No,7, G.A. Allana Road, Karachi. The landlord filed their objections on the said application on 19-4-2005. Again reply to objections was filed by the tenant on 23-5-2005.

8. Mr. Muhammad Saleem Larik, the Vth Rent Controller, Karachi South, dismissed such application with the observations that in his opinion the landlord cannot be compelled to produce all the documents nor such directions were to be given to the landlord by the appellate Court. However, the Court of Rent Controller once again decided the matter vide order dated 11-12-2006 and thereby allowed application of the landlord. Again rate of rent was fixed at Rs,6500 per month payable to the landlord since the date of filing the application. The tenant again challenged this order before District Judge, Karachi South by F.R.A. No,7 of 2007. The learned District Judge, Mr. Zaheeruddin S. Leghari, dismissed said appeal with the observation that rate of rent of Rs,6.50 per sq. Ft. Was justified, however due to contradictory version of both the parties about the measurement, he had ordered that after measurement the rent may be fixed at the rate of Rs,6,5 per sq. Ft. And modified the order to the extent that the enhanced rent was liable to be paid not from the date of filing the application but from the date of order of enhancement passed on 30-9- 2004. The landlord being aggrieved by such order of District Judge passed in F.R.A. No,7 of 2007, preferred this constitutional petition with following prayer:-- "The impugned order dated 12-4-2007 passed by respondent No,3 in F.R. A . No, 7/2007 declared to be void and illegal and to set aside the same by upholding the order passed by the Rent Controller in Rent Case No . 752/1996 dated 11-12-2006 Annexure P/13' . "

9. The tenant also filed another C.P. No,S.53/2008 against District Judge, Vth Rent Controller and the landlord on 14-12-2007 whereby he made following prayer:-- "The impugned orders of respondents Nos.1 and 2 are grossly illegal, against the principle of justice, very unreasonable and in violation of section 8, Sindh Rented Premises Ordinance and be reversed, failing whereupon the petitioner will suffer an irreparable loss and would be forced to vacate the premises.

' It is further prayed that this Honourable Court may in the interest of justice be pleased to stay the impugned order of the District Judge Karachi South as the same is unreasonable, oppressive and against the principles enunciated under section 8 of the Sindh Rented Premises Ordinance."

10. Learned counsel for the landlord has argued that there is no need for measurement of the tenement. There is no provision of law which may require the Court to measure the rented premises for determination of fair rent. He has drawn my attention towards the fact that rate of rent i.e, Re.0.325 per sq. Ft. Has been admitted by the tenant in cross-examination and it is also admitted by the tenant in para No,1 of C.P. No,S-53/08 that they were depositing rent at the rate of Rs,325 per month. By simple calculation it is clear that the area of tenement is 1000 sq. Feet. The area was disputed by the tenant and it was his burden to bring plausible evidence before the Court in support of his contention regarding the measurement of the tenement. The rate of rent has remained in force since long and had there been the lesser area; the tenant would have got corrected the rate of rent with the calculation of 0.325 per sq. Ft. By the impugned judgment an opportunity has been provided to landlord to fill in the lacuna of his evidence on one hand and enjoy the fruits by paying meagre rent to the landlord under the guise of pendency of the case.

11. While arguing on the point of date of effectiveness of fair rent from the date of application, he submitted that it is a settled principle of law that case is to be decided in the light of circumstances available at the time of institution of the case. By ordering the deposit of the rent from the date of rent order i.e, 30-9-2004, the landlord has illegally and unlawfully been deprived of his right and no cogent reasons have been furnished by the learned District Judge, Karachi South for doing so. He has relied upon the cases reported as Shahid Ahmed alias Shahid Mukhtar and 9 others v. Mst.

Rasheeda Khatoon and 12 others (PLD 1996 Karachi 494), Messrs Olympia Spinning and Weaving Mills Ltd. And another v. State Life Insurance Corporation of Pakistan (2001 SCMR 1103) and Messrs Shamim Akhtar v. State Life Insurance Corporation of Pakistan (PLD 2005 Karachi 554).

12. Mr. R.F. Veerji, Advocate for the tenant, has argued that the rent has unfairly been enhanced, no repair has been carried out by the landlord, no water has been supplied to the tenement and that the rent of other tenements in the same building has not been brought on record mala fidely but the rent of building located at a distance; housing, multi-national banks and companies have been taken into consideration, which cannot be equated with the conditions, income and the amenities provided to the tenement in occupation of respondent No,1. However, he had said not a single word about the date of enhancement of rent, either it should be from the date of institution of the case or from the date of rent order. He has relied upon the cases reported as State Life Insurance Corporation of Pakistan v. Messrs Ahmed & Brothers and 2 others (2008 CLC 610), State Life Insurance Corporation of Pakistan v. Habib Safe Deposit Vault (Pvt.) Ltd. (2008 CLC 517), Sultan Ali v. Mst. Khatija Bai (1995 CLC 1441), Habib Bank AG Zurich v. Nazir Ahmed Vaid & others (2007 MLD 131), Nazar Khan v. The Additional Sessions Judge-H, Quetta and 2 others (PLD 1986 Quetta 214), Muzaffar Khan and others v. Evacuee Trust Property (2002 CLC 1819), 1989 SCMR 75 and PLD 1996 Karachi 494.

13. Before venturing into the controversies of the parties, let us have a glimpse of the provisions of section 8 of the Sindh Rented Premises Ordinance, 1979 which reads as under:-- "Fair rent.---(1) The Controller shall, on application by the tenant or landlord determine fair rent of the premises after taking into consideration the following factors:--

(a) the rent of similar premises situated in the similar circumstances, in the same adjoining locality.

(b) the rise in cost of construction and repair charges.

(c) the imposition of new taxes, if any, after commencement of the tenancy; and the annual value of the premises, if any, on which property tax is levied.

(2) Where any addition to or, improvement in any premises has been made or any tax, or other public charges have been levied, enhanced, reduced or withdrawn in respect thereof, or any fixtures such as lifts or electric or other fittings have been provided thereon subsequent to the determination of the fair rent of such premises, the fair rent shall, notwithstanding the provisions of section 9 to be determined or, as the case may be, revised after taking such changes into consideration."

14. From the perusal of order of the two Rent Controllers and the order of one appellate Court one thing is clear that both the Courts are consistent about the rate of rent i.e, Rs,6.50 per sq. Ft. The difference between the two orders is about the date of effectiveness of the fresh rate of rent and the area of the premises. First of all from the perusal of prayer of the landlord in C.P. No,S-414 of 2007, it appears that in either case he is not dissatisfied with the rate of rent but his concern is about the date of effectiveness of the fresh rate of rent and the measurement of the tenement.

' Regarding the question that when the enhanced rent should be made applicable, the learned Judge of the appellate Court has not given any cogent reasons that as to why it should not be commenced from the date of institution of the application under section 8 of the Sindh Rented Premises Ordinance, 1979 before the Rent Controller and why it should commence from the date of the order passed by the appellate Court. The provisions of section 8 of Sindh Rented Premises Ordinance do not impose restriction on Rent Controller about the date of effectiveness of the enhanced rent. The fixation of date of enhancement of rent is discretionary with the Rent Controller.

There should have been convincing and plausible reasoning for deciding upon the discretion exercised by the Rent Controller. It would be just and fair to decide the matter in view of the circumstances prevailing at the time of filing of the application because the facts mentioned in the application are based upon the conditions prevalent on the date. The rent application is based on facts and circumstances collected upto that date. The evidence, as to the rate of rent, is also brought on record, keeping in view the rates, rents, taxes, market values prevalent on the date or prior to it. I am fortified by the dictum laid down in the case reported in PLD 1996 Karachi 494 (Shahid Ahmed alias Shahid Mukhtar and 9 others v. Mst. Rasheeda Khatoon and 12 others) wherein it was held as follows: "In the instant case application for enhancement of the rent was filed on 22-12-1992 but the learned Rent Controller had fixed the fair rent from 1-1-1990. It is well-established principle that where the statute does not provide the date, the same can be fixed either from the date of filing of application or from the date of the order or even from the date in between the two dates looking to the peculiar circumstances of the case. In my view the date fixed by the Rent Controller for payment of fair rent is not proper and the proper date would be the date on which the landlord agitates his right of payment of fair rent i.e, 22-2-1992."

15. Regarding the measurement of the tenement, it is pertinent to mention that the area becomes 1000 sq. Feet because the rate of rent of Re.0.325 has been admitted in cross-examination. The tenant is admittedly paying Rs,325 per month to the landlord as shown in C.P. No,S-53/08. If the area of the tenement was under dispute, then it was the burden of the respondent to bring some evidence on record to substantiate his pleas taken by him in his written reply. The calculation of dividing monthly rent of Rs,325 by the rate of rent i.e, Rs,0.325 per sq. Ft. Will result in 1000 sq. Feet.

16. Three Judges i.e, Rent Controller, Mr. Anand Ram vide order dated 30-9-2004, another Rent Controller, Mr. Muhammad Saleem Larik and the District Judge, Mr. Zaheeruddin Leghari while considering whole evidence on record, in B view of the provisions of section 8 of Sindh Rented Premises Ordinance have concurrently fixed the rate of rent at Rs,6-50 per sq. Ft. Such findings are not open to interference in constitutional petition. The reliance in this regard is placed on 2001 SCMR 1103 (Olympia Shipping and Weaving Mills Ltd. v. State Life Insurance Corpn. Of Pakistan wherein the Honourable Supreme Court held as under:-- "During the course of arguments, learned counsel has been unable to impugn the concurrent findings of fact on the question of fixation of fair rent except that the rent so fixed was seventeen times higher than the rate of rent which was being paid by the appellants. It may not be out of place to state here that in ease value of property has appreciated in a particular locality, so also there has been increase in the cost of construction, maintenance, repairs, renovation or increase in local taxes or Property Tax etc. By the Legislature, the rate of rent could be revised which could be at higher percentage than the normal increase of 10% per annum. Consequently, fixation of fair rent cannot be said to be unfair or inequitable. In C.P.L.A. No,414-K of 1989, decided on 15-1-1990, Muhammad Afzal Zullah, C.J (as his lordship then was), observed that it was not merely lesser rents in locality which were to be taken into account. It is settled proposition of law that this Court would not generally interfere with the concurrent findings of fact unless it is shown that findings are recorded by misappreciation of evidence and/or misconstruction of law and against the settled principles for appraisal of evidence. Obviously, appellants have not been able to bring their case within the exception clause with the result that we are not inclined to interfere with the findings of fact and the discretion exercised by the Rent Controller and the High Court."

' In PLD 2005 Karachi 554 (Messrs Shamim Akhtar v. State Life Insurance Corporation of Pakistan, Karachi and 2 others) it was held:-- "Considering all these factors and the concurrent findings of two Courts below regarding fixation of rent at the rate of Rs,12, it cannot be said that such findings are arbitrary or based on misreading of evidence. As held by the apex Court in the case of Olympia Spinning and Weaving Mills (supra) the cumulative effect of all the four factors enumerated in section 8 (i) of the Ordinance 1979 is to be taken into consideration by the Rent Controller for fixation of fair rent, therefore, mere fact that property tax paid by the landlord in respect of the building, having the case premises on the ground floor, is much less than the rate of rent fixed by Rent Controller, cannot be made basis to hold that findings are not based on proper appreciation of evidence/ case record."

17. The ratio of following case law cited by learned counsel for the tenant are not lending any support to the pleas of tenant's counsel.

' 2008 CLC 610 is regarding fixation of fair rent. The order of lower Courts was upheld by the Court in C.P. As landlord could not produce any document to substantiate the order. In 2008 CLC 517 the order of lower Courts regarding fixation of fair rent was upheld. 1995 CLC 1441 was a case of first rent Appeal. At that time High Court had jurisdiction to entertain the first rental appeal. The present case is a constitutional petition which has a different scope than the first rent appeal. In 2007 MLD 131 rent was fixed on the Commissioner's report. The Commissioner's report cannot be substitute for the evidence on record. PLD 1986 Quetta 214 pertains to correction of jurisdictional error and it does not pertain to Sindh Rented Premises Ordinance, 2002 CLC 1819 [Lahore] is an election petition and is nothing to do with section 8 of the Sindh Rented Premises Ordinance, 1979.

18. Since, due to simple calculation there is no need for further measurement as it has been established through calculation that area of the tenement is 1000 sq. Feet, the rate of rent concurrently determined by three Judges of the lower Courts is Rs,6.50 per sq. Ft. Per month. The scope of c constitutional petition is limited one. In constitutional jurisdiction the Court generally does not substitute the factual findings by its own findings, therefore, the findings given by three Judges of the lower Courts regarding rate of rent cannot be said to be arbitrary. The enhanced rate of rent shall be effective from the date of D institution of the rent application. The tenant could not show any legal infirmity in the orders as to rate of rent which may require interference of this Court under constitutional jurisdiction. Tenant's counsel has not argued regarding the date of effectiveness of enhanced rate of rent.

' For the above reasons, C. P. No,S-414/07 is allowed and C.P. No,S-53 of 2008 is dismissed.

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