MUHAMMAD SAIR ALI, J. --- In September, 2004, respondent No. 2 i.e. Standard Insurance Co. Limited as landlord filed eviction petition against the appellant for his eviction from the rented premises at the first and second floor of 'Standard Insurance House' at I. I. Chundrigar Road, Karachi. Parting with possession of the rented premises and subletting it to two independent entities i.e. Bhimji Gardezi Associate (Pvt.) Limited and Gardezi and Co. Without the consent of the landlord, were pleaded as the grounds for the eviction of the appellant.
Appellant in reply admitting to be a tenant under the respondent No. 2. Denied the allegations. The appellant also admitted to have incorporated Bhimji Gardezi Associate (Pvt.) Limited (a private company limited by shares) wherein he was a Shareholder/Director and to have established Gardezi & Co., Chartered Accountants as a firm with himself as one of the partner. Denying subletting or transfer of possession he stated that "the limited company as well as the partnership firm both are not carrying on any profession/practice from the rented premises nor the appellant is charging any rent from the two companies nor the premises have been sublet to them". The appellant claimed to be a Director/Shareholder of the company and Partner of the firm "in his independent personal capacity" having "full right to carry on his profession and or business in any name he deems fit".
2. The learned Rent Controller after issues and evidence , dismissed the petition through order dated 24.11.2006. On appeal, the Appellate Court of VI-Additional District Judge, Karachi (South) through judgment dated 4.11.2008 set aside the Trial Court's order and allowed respondent No. 2's appeal as well as the eviction petition. The appellant was directed to vacate the demised premises in four months. Constitutional Petition No. 08 of 2009 filed by the appellant to challenge the appellate judgment was dismissed by a learned Judge in chambers of the High Court of Sindh at Karachi through the impugned judgment dated 29.05.2009.
3. On Civil Petition No. 586-K of 204 before this Court, leave to appeal was granted to the appellant vide order dated 24.7.2009 to inter-alia consider as to whether:- "the learned High Court has not interpreted the law in its true perspective because Section 15(2)(iii)
(a) does not talk of subletting,, but it visualizes handing over of the possession of premises to some other person, which possession has never been handed over and is still with the petitioner/tenant".
4. Accordingly Appeal No. 1009 of 2009 was heard by us on 23.2.2011 and was dismissed by order dated 23.2.2011 which read as under:- "For reasons to be recorded later, instant appeal is dismissed leaving the parties to bear their own costs. However, four months' time is allowed to the appellant to handover peaceful vacant possession of the premises subject-matter of this appeal to the landlord".
OUR REASONS THERETO FOLLOW HEREINAFTER.
5. Syed Sharifuddin Pirzada, learned Sr. ASC submitted that Section 15 (2)(iii)(a) of the Sindh Rented Premises Ordinance, 1979 visualized ejectment of a tenant inter-alia if "the tenant has, without the written consent of the landlord, handed over the possession of the premises to some other person".
As such it was not the subletting but handing over of physical possession of the premises to some other person that exposed a tenant to ejectment. And that the appellant; though a partner in the firm and a Shareholder/Director in the company, continued to hold in his personal capacity the legal and physical possession of the premises and throughout paid the rent. Also that the firm and the company were merely licencees of the appellant and . ere not his sub-tenants. And there was no proof of receipt f rent by the appellant from the firm or the company.
Syed Sharifuddin Pirzada, learned Sr. ASC stated hat the factum of formation of the firm and incorporation of he company with their registered and business offices at the emised premises was not denied. And that these entities arried on business at the premises but only as appellant's icencees . Further that inducting a licencee did not constitute handing over of the possession' of the rented premises shich continued to be with the appellant. Reference was ade to the cases of "Manek J. Mobed and another v. Shah ehram and others" (PLD 1974 Supreme Court 351), 'Saeeda Begum v. Shameem Ahmed" (1994 SCM R 791), 'Muhammad Subhan and another v.. Bilquis Begum through egal Heirs, etc." (1994 SCM R 1507 (1)), ."Habibullah v. Ent Controller, Peshawar and 11 other(1998 SCM R 656), "Muhammad Shafi. v. State Life Insurance orporation" (2009 SCM R 893), "Arm Group Enterprises Ltd. Waldorf Restaurant and others" (AIR 2003 Supreme Court 106), "M/s. Shalimar Tar Products Ltd. v. H. C. Sharma and thers"
(AIR 1988 Supreme Court 145).
6. Mr. Rashid A. Rizvi, learned Sr. ASC for the espondent submitted that the pleas of licence or licencee nd induction of firm/company in the rented premises as icencees, were never raised by the appellant in his reply, ppeal or the Constitutional petition before any of the Court. Nd that such pleas had been raised for the first time before his Court. And that no evidence thereto was brought on ecord. And that the applicable Section drew no distinction etween handing over the possession to a sub-tenant, icencee or anyone else. He also contended that the artnership deed and the incorporation documents of the ompany show that the petitioner was a small shareholder in he firm and the company. And that he delivered possession o the firm or company to carry on' business in the demised remises. The firm and the company had personalities ifferent from the tenant. It was a clear case of handing over the possession to the firm and the company by the tenan Reliance was placed upon the cases of "Manek J. Mobe and another v. Shah Behram and others" (PLD 197 Supreme Court 351), "Muhammad Subhan and another Mst. Bilquis Begum through legal heirs etc." (1994 SCM 1507 (2)) and "M/s. Premier Mercantile Service and anoth v. S. M. Younus and 2 others" (PLD 1982 Supreme Cou 79).
7. We have considered the contentions of th learned Sr. ASCs of the parties. As per the record and tli submissions made before us, a number of facts througho remained undisputed or were admitted by the parties i.e. (1 the relationship of the tenant and the landlord, (2) formatio of Bhimji Cardezi Associates (Pvt) Limited and Gardezi an Company, Chartered Accountants with appellant as on shareholder therein with others, (3) the nature of business the company & firm and (4) location of their registered an business offices at the rented premises.
8. The factual areas of dispute were that th appellant claimed never to have sublet the demise premises or to have 'handed over' the possession of the premises to the company or the firm. He asserted to hav continued in physical and legal possession of the propert himself throughout paying the rent to the landlord. On ,th legal plane Syed Sharifuddin Pirzada, learned Sr. AS though admitting possession of the company and the firm I the rented premises, claimed the company and the firm to b the appellant's licencees and thus not in independe possession, wherefor it was not a case of delivery of th possession in terms of Section 15(2)(iii)(a) of the Sind Rented Premises Ordinance 1979 for an order of eviction.
9. The statutory provision is clear. The. Law b now is also well-settled. Section 15(2)(iii)(a) of the Sind Rented Premises Ordinance, 1979 visualizes ejectment of tenant from the rented premises on the ground that "th tenant has, without the written consent of the landlord anded over the possession of the premises to some other ersons". It is handing over of the possession of the rented remises to some other person that exposes a tenant to viction. The ground of 'subletting' does not find Mention in section 15 ibid. The Sindh Rented Premises Ordinance, 979 changed the grounds for eviction of a tenant and milled "subletting" from the prescribed grounds thereof. He previous Sindh Laws on the subject and the Statutes in rovinces other than Sindh did prescribe 'subletting' without he consent of the landlord as one of the grounds for jectment of a tenant. It is probably because of the onditioning so caused that "subletting" and "handing over he possession" continue to be used interchangeably in the field of legal practice and also in some Courts. This change in the laws was duly noted and discussed by this Court in the case of "Saeeda Begum v. Shameem Ahmad" (1994 SCM R 791) that:--- "It may be noticed that the above-quoted clause prohibits handing over possession by a tenant to some other person without written permission of the landlord. It does not speak of creation of sub- tenancy or factum of subletting. In our view, the above clause is wider in its import inasmuch as it will be attracted to: if a landlord proves that factually his tenant has handed over possession to another person without his written consent and that the tenant is no longer in possession. The above initial burden is on the landlord and once he discharges it, the burden will shift to the tenant to prove that he has not handed over possession of the premises and that he is still in physical possession. In order to discharge the above burden of proof, the tenant may produce partnership deed, certificate of registration of the firm, account books, income tax assessment orders etc. Since in the present case the account books were maintained as per terms of the partnership deed, it was incumbent on the respondent to have produced the same to show that the above partnership was no bogus and was not entered into in order to circumven above provision of the Ordinance. It was als incumbent on him to show that factually he had no handed over physical possession of the premises t A.I Muhammad".
"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 as of right 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".
10. The case of "Habibullah v. Rent Controller, Peshawar and 11 others (1998 SCM R 2656) decided by a Bench of three Hon'ble Judges of this Court was a case of eviction under Section 13(2)(ii)(a) etc. Of the West Pakistan Urban Rent Restriction Ordinance (VI of 1959) on the ground of subletting and assignment of tenancy. The case was largely decided in the context and import of 'subletting' and the effect of a partnership or a company inducted as a licencee. It was not a case decided under Section 15(2)(iii) (a) of the Sindh Rented Premises Ordinance, 1979. A distinction was however drawn between the two Statutes in the words that:--- "Herein, amongst other things, lies the distinction between the provisions of Section 13(2)(ii)(a) of the Urban Rent Restriction Ordinance, 1959 and Section 15(2)(iii)(a) in the Sindh Rented Premises Ordinance, 1979, the former penalizing even subletting of a portion but the latter visualizing parting with the whole of the possession........................................................ "The difference in these provisions lies in the circumstance that whereas it is handing over of the possession of the premises, which constitutes a ground .For eviction under the 1979 enactment, something which implies divestation of legal possession by the tenant, as noticeably distinguished from mere permission, use or shared occupancy ................................... As to making such an assessment, the 'phraseology in the deed, attending circumstances, including the conduct of the parties and the intention or object behind the arrangement is to come up for examination".
2009 SCMR 893) decided by a Bench of two Hon'ble Judges of this Court, judgments of "Muhammad Subhan and another" (1994 SCM R 1507(2)) and "Habibullah v. Rent Controller, Peshawar and 11 others" (1998 SCM R 2656) were referred to for dealing with the issues of 'assignment and transfer of a tenancy rights' viz. The induction induction of a 'licencee', in the factual perspective of the case.
11. In our view of the matter, the facts, record and evidence of the present case attracts the principles recorded in the case of "Monek J. Mobed and another v. Shah Behram and others" (PLD 1974 SC 351) decided by a Bench of four Hon'ble Judges of the Supreme Court. In this case grounds of subletting and also of transfer of possession by the tenant were involved. The original lessee converted his business into a private limited' company with himself and three of his family members as the share-holders. The lessee became the Managing Director. Eviction petition was filed by the landlord on the ground of subletting. The matter ultimately came for consideration of this Court on the findings of the Letters Patent Bench that there was transfer of lease hold rights by the original tenant to the company which act amounted to subletting whereupon the original tenant had ceased to be in possession. Original tenant however maintained that tenancy rights were not transferred and he was in possession. To determine the issue, this Court examined the evidence and observed that:--: "There was, even no suggestion in the statement of Jehangir J. Mobed that the premises were taken over by the defendant No. 2 as a licensee under him. 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. The business of running the cinema included use of the premises, the machinery, the apparatus and furniture installed in the Cinema by defendant No. 2. This operation was not possible until.Defendant No. 2 had entered into possession It follows that defendant No. 1 ceased to be in possession as soon as the defendant No. 2 took over the business of the Paradise , Theatre. The case must therefore be decided on the premises that defendant No...... 1 had parted with possession 12. In the case "Messrs Premier Mercantile Service and another v. S.M. Younus and 2 others" (PLD) 1982 Supreme Court 79), decided by a Bench of three Hon'ble Judges, it was held that:--- "A distinct leaf entit different from the firm had come into existence. It was so whether the veil of incorporation was lifted or not. Such a legal entity had an altogether different rights and liabilities with respect to third parties including the landlords. Such a change could n.Ot be unilaterally brought about by the tenants so as to transform their very Fegal existence in a manner to affect their liability. The landlords could object. They could make it a ground for proceedings under the Rent Laws. Such a tenant as had permitted itself to be dissolved and then effaced and substituted b a different legal entit could be eected for this act alone, having not taken the landlord into confidence". It was also importantly observed that:- ...................... .As petitioner No. 2 wanted to establish a relationship with the landlords it was its responsibility to show its locus-standi, to supply the landlords with the documents asked for notwithstanding the fact that these were public documents and their copies could be obtained in the normal course. The very fact the landlords continued to issue receipts in the name of the dissolved partnership, the actual tenant of the property, would show that there was a manifest refusal on their part to recognize anyone else as tenant of the property".
13. Assessing the prersent case in the context of above analyzed legal principles, we note that the appellant had not pleaded or deposed before the Trial Court that the company or the firm were his licencees and were so inducted in the demised premises to do business of the appellant or their own. The judgment dated 4th November, 2008 of the learned VI-Additional District Judge, Karachi East shows that the appellant also failed to raise such a plea before the learned first Appellate Court. Similarly neither in his Constitution Petition nor in the arguments before the High Court did the appellant premise his case on the licencee status of the company/firm. We thus agree with Mr. Rasheed A. Rizvi, learned Sr. ASC for respondent No. 2 that this plea having never been raised before any of the Courts by the appellant, cannot be considered for the first time by this Court particularly when no evidence on record exists to substantiate such a plea. Arguments of Syed Sharif-ud-Din Pirzada and the cases referred to by him on the factum of company/firm being appellant's licencee, can thus be of no benefit to the case of the appellant.
14. The appellant instead specifically and categorically denied the operation of the business at the rented premises by the company/firm. The intriguing case pleaded by the appellant in para 4 of his reply is reproduced hereunder:--- "The opponent (Hyder A.I Bhimji son of Akbar A.I Bhimji) is one of the Shareholder in the Limited Company and a Partner in the Partnership firm, but the Limited Company as well 'as the Partnership firm both are not carrying on any profession/practice from the Rented Premises and he is the Director/Shareholder of the Limited Company since 1985 and Partner of the Partnership firm since 1987 in his independent personal capacity as such ......................... Has full right to carry on his profession and or business in any name he deems fit".
The appellant was legally bound by the case set up in his pleadings. He did not have freedom to depart therefrom and raise a different case. Also that in absence of specific pleadings, the Court could not allow the appellant to grope around and draw remote inferences in his favour from his vague expressions.
15. By his own admission, the appellant was a Director/Shareholder of the company and Partner of the Firm but "in his independent personal capacity" purportedly having "full right to carry on his profession and or business in any name he deems fit" and that the company and the firm were not carrying on any business or profession from the rented premises. The appellant did not explain the meaning of his assertions. To our mind he had been deliberately evasive, self-defeative and contradictory. Being a company's Director or a firm's Partner, he was obliged by law to carry on, as such; the business of the company and/or the firm with non-compete limitations; the absence of which has neither been argued nor proved. Appellant's stand of 'no business' is belied by his learned Sr. ASC's submissions that the company/firm was doing business at the rented premises i.e. Their registered and business office [but allegedly as licencees]. The appellant was also opaque and inexplicit in pleading and deposing to be a Director in the company and Partner in the firm "in his independent personal capacity". Being a Director in 'a company or a Partner in a firm, the appellant held distinct corporate-offices entailing statutory rights, powers, duties and limitations which were prescribed and regulated under the Companies Ordinance, 1984 and the Partnership Act, 1932. The alleged personal capacity of the appellant could not have smoke screened his capacities as Director in the company or Partner in the firm. Incorporating the limited company and registering the firm were structural changes from the sole proprietorship. These were legally independent entities. Their shareholders/ Directors or Partners enjoyed capacities separate from their personal capacities. It was not a mere change in name.
16. The appellant admitted in his cross-examination that the head office of the company was situated at the demised premises. And that he never intimated the landlord of the incorporation of the company. The company's Annual Returns in Form A were filed with CLA by the appellant as the Chief Executive of the Company acknowledging the company and its registered/principal/ head office at the rented premises. Ex.A2 and. A3 also proved that Bhimji Gardezi Associate (Pvt.) Limited, had its business address and registered office at the rented premises. Also that the appellant was a minor shareholder of 7.5% in the firm and had one share in the company representing only 20% or 25% value in the share capital of the incorporated company.
Memo. Dated 31.07.2004 of the institute of Chartered Accountants of Pakistan, produced by the landlord in evidence confirmed the firm to be a member of the Institute doing business at the demised premises having four partners.
Through CMA No. 389 of 2011 certain documents were filed by the appellant on Court orders. These documents included Certificate of Incorporation of Bhimji Gardezi Associates (Pvt.) Ltd.
Memorandum and Articles, Balance Sheet, Profit and Loss Account and Notes to the Accounts as of 30.06.2008 wherein it was admitted that, "Bhimji Gardezi Associates (Pvt.) Ltd. Was incorporated as a private limited company on 24th October, 1985 in Pakistan and is engaged in corporate and tax advisory and compliance services. Its Registered Office is situated at 2nd Floor, Standard Insurance House, ' I.I. Chundrigar Road, Karachi". These Notes also proved/employment/presence of a large staff at the rented premises and payment of salaries to the staff and the Directors and the business expenses undertaken by the company from this office. Profit and Loss Accounts also showed, substantial income of the company as well as the administrative and general expenses.
17. We thus find that the evidence on record and the documents produced before this Court duly support the concurrent findings of the first Appellate Court and the High Court.
The company was engaged in the corporate, tax advising and compliance services from the rented premises, its business generated substantial income and it undertook large administrator and general expenses. Separate Accounts of the partners or share-holders were withheld by the appellant, though the appellant as the Chief Executive or the managing partner was obliged to produce all such documents in his possession to show reimbursements and refunds. Appellant wrongly pleaded in the written statement that the firm/Company were not doing any business in the demised premises.
The appellant had without the written consent of the landlord handed over legal and physical possession of the demised premises to the firm/company and other sharers therein by allowing these entities to operate/do business therefrom.
8. For the above discussed reasons, the appeal stands dismissed as per the short order dated.
23.2.2011 hereinabove reproduced.