1. ' These are connected Second Appeals bearing Second Appeals Nos. 260 and 261 of 1978, where the appellant is the same and the premises in dispute are also situated in the same building. The appeals arise out of the orders of Rent Controller dated 16th November, 1976, and order of Additional District Judge, Karachi, dated 25th May, 1978, whereby the claim of the present appellant for raising the rent under section 9 had been partly dismissed, but was allowed in respect of 1/2 of betterment tax.
2. ' The relevant facts are that shop of respondent Jamshed Irani is No, G-3 of Plot No, 2/28/1, Garden Road, Karachi, and the rent of the same was assessed at Rs, 225 per month and the taxes were assessed at Rs, 75 per month, in 1969-70, the rental value of the said shop wail raised by Excise & Taxation Department to Rs, 11,400 per year, but in revision it was reduced to Rs, 613.13 per month and.The taxes payable came to Rs, 204.40 per month with effect from July, 1970, which meant an increase in the taxes payable by the landlord by Rs, 129.45 per month. The result, therefore, was that Rs, 75 being the previous tax and Rs, 129.45 being the increase in the taxes the total taxes payable by Mst. Rais Jehan in respect of shop of Jamshed Irani now come to Rs, 204.40. The betterment tax is payable separately and there is no dispute in respect of the same as Jamshed Irani has not filed an appeal against the award of betterment tax in favour of Mst. Rais Jehan against Jamshed Irani.
3. ' In respect of the premises in occupation of respondent Akbar Jokar, the position is that the rent was assessed of his shop No, G-2 at Rs, 150 per month and the taxes were payable at Rs, 50 per month. The rent was, thereafter, raised to Rs, 250 per month. However, in the year 1969-70, the annual rental value of this shop was raised to Rs, 12,900 per year, but in revision the same was reduced to Rs, 669.60 per month and the taxes payable came to Rs, 223.25 per month. This amount of Rs, 223.25 per month includes the previous tax to Rs, 50 per month. The new taxes become payable from 1st July, 1969.
4. ' Mst. Rais Jehan, the appellant filed Application No, 1027/71 against Akbar Jokar where she claimed for increase in rent from Rs, 250 to Rs 669.50 per month, while as against Jamshed Irani Application No, 87/72 was filed, claiming the increase in rent from Rs, 225 to Rs, 613.35 per month. The two Courts below have dismissed the claim in respect of the increase in the rent except to the extent of betterment tax, and therefore, the present two appeals.
5. ' MRs, Rashida Patel, the learned counsel for the appellant has now confined the claim of the appellant to increase in rent to the extent of the increase in the payment of taxes payable in respect of the two shops by the appellant viz. Rs, 129.45 in respect of Jamshed Irani and Rs, 174 in respect of Akbar Joker. Her claim is based upon the increase in rent allowed by section 9 of the West Pakistan Urban Rent Restriction Ordinance, 1959.
6. ' Syed Inayat Ali, the learned counsel for the respondents has contested the said claim and his contention is that the increase in the taxes payable being due to increase in the assessment of the rental value of the two shops, the same is not covered by the provisions of section 9 of Urban Rent Restriction Ordinance, 1959, and hence, two Courts below could not allow the application of the appellant as the application has been made only under section 9 and not otherwise.
7. ' MRs, Rashida Patel, on the other hand contended that it would be unfair and harsh to the appellant not to allow the increase in the rent as the total taxes now payable by the appellant is almost equal to the rent payable by the respondents to the appellant and she asserts that an increase in the rate of taxes, .By whatever process the same accrues, is to be allowed to the landlord in rent increase.
8. ' Before proceeding to examine the contentions of the two learned counsel it would be necessary to reproduce the relevant provisions of section 9 of Urban Rent Restriction Ordinance, 1959 which reads as follows :- "9.-(1) Notwithstanding anything contained in any other provision of this Ordinance, a landlord shall, subject to the approval of the Controller, be entitled to increase the rent of a building or rented land if after the commencement of this Ordinance a fresh rate, cess or tax is levied in respect of the building or rented land by (Government or) any local authority or if there is an increase in the amount of such a rate, cess or tax being levied at the commencement of this Ordinance : ' Provided that the increase in rent shall not exceed one-half of the amount of any such rate, cess or tax or the amount of the increase in such rate, cess or tax, as the case may be.
(2) Notwithstanding anything contained in any other law for the time being in force or any agreement, no landlord shall recover from his tenant the amount of any tax or any portion thereof in respect of any building or rented land occupied by tenant by any increase in the amount of the rent payable or otherwise, save as provided in subsection (I)."
9. ' After giving some serious consideration to the provisions quoted above, I am inclined to accept the appeals and to allow the increase in rent to the extent of the increase in the payment of taxes payable by the landlord to the Excise & Taxation Department and Karachi Municipal Corporation.
10. This increase would be in addition to the betterment taxes allowed by the Controller and not challenged by the respondents. My reasons are as follows :- "There are two portions of section 9(1). The first portion entitles the landlord to increase the rent of a building in case a fresh rate, cess or tax is levied by the Government or local authority after the commencement of Urban Rent Restriction Ordinance, 1959, and the proviso to this subsection allowed the increase to the extent of only one-half of the rent of any such fresh rate, cess or tax.
11. Since, in the present case before me, there is no controversy in respect of the imposition of the fresh betterment tax, which has been allowed to the extent of one-half, therefore, this part of section 9 does not require consideration. The result is that the controversy is only in respect of the interpretation of the following part of section 9, or if there is an increase in the amount of such a rate, cess or tax being levied at the commencement of this Ordinance."
12. ' Syed Inayat Ali, Advocate for the respondents wants me to construe the above-quoted portion of section 9 in the light of the earlier part of section 9. He contends that since the earlier part speaks of a fresh rate, cess or tax being levied by the Government, therefore, the later portion of the same subsection 9(1), which I have reproduced above, should also be interpreted to mean that the increase should be treated as the increase in the incidence of such a rate, cess or tax, which is made by the Government and the local authority in their legislative or subordinate legislative authority and it should not be interpreted to include the increase on account of the re-assessment of the annual rental value of the building, which is merely a ministerial act by the subordinate officials of the authority."
13. ' MRs, Rashida Patel has submitted in reply that the two portions of section 9 should be treated as separate provisions dealing with two different situations, one dealing with any fresh imposition or levy by the Government or the local authority and the other dealing with the increase in the amount or rate, cess or tax, which was levied at the commencement of this Ordinance.
14. ' I prefer to interpret the last portion of section 9(1) in a manner which would meet the ends of justice and which appears to be more inconsonance with the intent and spirit of the legislation. It appears that the Legislature wanted the landlord to be reimbursed in respect of half of the freshly levied rate, cess or tax but if there was an increase in the actual amount of the rate, cess or tax which was already levied at the commencement of Urban Rent Restriction Ordinance, 1959, then the whole of such increase in the amount of tax was to be payable to the landlord. I am unable to accept the interpretation of Syed Inayat Ali as the same would work great hardship upon the landlord. It is common knowledge that the annual rental value of a premises is raised by the local authority on account of different reasons and one of the reason is merely the consideration that the value of the premises has increased. The Legislature was quite cognizant of this situation, and therefore it made a provision for increase in the rent being allowed on account of the increase by whatever process, in the amount of rate, cess or tax, which had been levied in 1959, or earlier. The relevant words in subsection 9(1) are "increase in the amount of such a rate, cess or tax" and not the words "increase in the incidence of such a rate, cess or tax". The amount of tax may be increased either by increasing the rate or by increasing rental value of the property and to my mind it appears that the last portion of section 9,(I) in fact caters for both the situations, namely, (1) increase in the incidence of rate, cess or tax levied by Government or local authority or (2) an increase in the amount of rate, cess or tax on account of increase in the assessment made by the Ministerial Act of Subordinate Officers, who are authorised to do the same in law.
15. ' I am fortified in this view from the meaning of the words "levy" as given on page 725 of Law Lexicon by Ramnatha Aiyar, 1947 Edition, which is as follows :- "Levy .-As applied to Taxation, as a noun it means assessment ; to computation according to assessm ent ; the taking and seizure of property on a warrant ; as a verb, to assess, to collect or exact ; impose.
16. ' As Applied to Taxes, it sometimes means to raise and exact by authority of Government, or to determine by vote the amount of tax to be raised. It is in this, sense that town, city, and school districts levy taxes. In other cases it is used with reference to the mere ministerial or executive act of entering them on the tax books and collecting them."
17. Therefore, in the light of the above wide meanings of the word "levy", increase in the amount of tax will include the increase on the basis of assessment made by Ministerial or executive officers, who enter the same in the tax books and later collect the same. I am, therefore, in agreement with the contentions of the appellant's counsel that increase in the amount of tax should not be restricted to the act of legislative or subordinate legislative authority only but should he extended to an increase in the amount of the taxes payable as a result of increase in the assessment of annual rental value of a property by the action of the assessing officers as well. The only condition in this respect would be that the increase should be only in respect of such a rate, cess or tax, which was levied at the commencement of this Ordinance, and in this case there is no dispute that the increase in the tax in respect of present appeals is relevant to the rate, cess or tax, which was being already levied.
18. ' In respect of particular facts of these two appeals, I am of the view that the increase in the rent was obviously called for. It is an admitted position that the assessment authority had increased the rental value of the two shops in question on account of the improvements, alterations and additions made in the two shops by the respondents for their own benefits, and therefore, B it was fair that they alone should meet the extra taxes, which have been increased on account of their action in improving the value of their shops. In respect of Akbar Jokar the appellant received Rs, 250 per month as rent, while she has to pay Rs, 223 as taxes, which leaves only a sum of Rs, 27 per month as net rent after the respondent Akbar Jokar made improvements in his shop, while previous to these improvements the appellant was receiving Rs, 250 per month as rent and was paying only Rs, 50 per month as the taxes and was thus able to have a net rent of Rs, 200 per month. This appears to be a very unfair and harsh reduction of the net rent from Rs, 200 per month to Rs, 27 per month. If one considers, the reduction in the real value of the rupees then the reduction in net rent appears to be much more harsh. In respect of Jamshed Irani the rent is Rs, 225 per month, while previous taxes before improvements and additions were only Rs, 75 per month leaving to the appellant a net amount of Rs, 150 per month. But after the improvements and additions have been made by Jamshed Irani the rent has remained as Rs, 225 per month, while the taxes rose to a total of Rs, 204.45. This obviously is again a very harsh and unbearable result of the improvements and alterations made by the respondents.
19. ' It is, therefore, just and fair that the respondents should pay to the appellant the increase in respect of the taxes payable by the appellant. Consequently, Jamshed Irani will pay the total taxes of Rs, 204.45 per month C to the appellant with effect from 1-7-1970 apart from the rent of Rs, 225 per month payable by him and also apart from one half of the betterment taxes already allowed by the Controller. Similarly, the respondent Akbar Jokar will pay the total amount of Rs, 223.37 per month as taxes with effect from 1st July, 1969 to the appellant apart from the rent of Rs, 250 per month, which is payable by him plus one-half of the betterment tax, which has already been allowed by the Controller.
20. ' The two appeals are, therefore, allowed to the extent above mentioned.