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PLD 1981 Supreme Court I

MUHAMMAD HUSSAIN PATEL vs HABIB WALT MUHAMMAD, ETC.

CitationPLD 1981 Supreme Court I
CourtSupreme Court of Pakistan
Case No.Civil Appeals Nos. K/105 Second Appeals Nos. 75, 76, 77 and 78 of 1969
Date1980-07-29
Judge(s)Sheikh Anwarul Haq, Aslam Riaz Hussain, Karam Elahi Chauhan
ResultAppeal accepted

ORDER

ASLAM RIAz HUSSAIN, J.--This judgment will dispose of Civil Appeals Nos. K/105 to K/108 of 1978 a1) four of which are directed against a consolidated judgment of a learned Single Judge of the Sind High Court, dated 26-4-1977, whereby he dismissed the four Second appeals filed by the appellant under section 15(4) of the West Pakistan Urban Rent Restriction Ordinance, 1959.

2. The matter relates to a building owned by the appellant built on Plot No. 289 in Garden East, Karachi. The building comprises of four flats having identical accommodation, two of these on the ground floor and two on the first floor. The building was subject-matter of some litigation in 1954, when its Management was entrusted by the Court to an Official Assignee. The Official Assignee rented out the four flats, one each to the four respondents in the four appeals before us, by Rent Deeds dated 8-1-1957, executed by the respondents. The term relating to the rent payable by the respondents is contained in paragraph l(c) of the Rent Deed, which reads as follows "That the rent per mensem of the said flat is Rs. 450 which includes all taxes and assessment other than water and conservancy taxes and electricity and power charges which are to be borne by the lessee and these will be paid by the lessee to the lessor alongwith and in addition to the agreed rent payable per month. This agreed rent shall be payable by the lessee to the lessor in advance on the 1st of every month during the entire tenure of the lease."

3. As is evident from a reading of the aforementioned clause of the Rent Deed, 'rent proper' was fixed at Rs. 450 per month and it included all the taxes and assessment on the flats, except the water and conservancy taxes and electricity and power charges. But it was stipulated that the tenants shall pay these taxes and charges to the lessor (who at that time was the Official Assignees The water and conservancy charges were calculated at Rs. 51'75 per month. This sum was regularly paid to the lessor by each tenant in addition to the sum of Rs. 450.

4. The aforementioned litigation relating to the building ended some time in 1961 whereupon the Official Assignee was discharged by the Court and the appellant was put into possession of the premises. The appellant informed the- respondents by letter dated 29-6-1961 that he accepted there as his tenants on the same terms and conditions as contained in the Rent Deeds executed by the manfavour of the Official Assignee. All the respondent/tenants accepted this position and started paying the aforementioned amounts to theappellant.

5. In 1963 the K. MX. Increased the General Tax on the houses by 1 % with effect from 1-4-1959. The appellant wrote two letters to the respondents requiring them to pay the increased taxes. The West Pakistan Urban Immovable Property Tax Act, 1958 was also made applicable to Karachi on 1-7-1963 whereby Property Tax was increased from 5 % to 10 %. The petitioner/landlord addressed another letter dated 19-10-1963 to the tenants asking them to pay the increased Property Tax. On their refusal to pay the increased taxes, the landlord filed an application under section 9 of the West Pakistan Urban Rent Restriction Ordinance, 1959 (hereinafter referred to as the Rent Ordinance) for compelling his tenants to pay the amount of the increased tax as a part of the rent. The Rent Controller, by his order dated 30-7-1965; held that the tenants were liable to pay J the amount 'of the increased tax, which came to about Rs. 10/ 10 per month. Pursuant to this order the rent was increased to Rs. 460'10 per month. The landlord filed an appeal against the- said order but failed.

His S. A. O. Was, however, accepted by the High Court vide judgment dated 21-2-1972, and he was allowed the full amount of increase in the aforementioned taxes. We are informed that the appeal filed by the tenants against the said judgment is still pending before this Court.

6. Meanwhile, the tenants, probably on some legal advice given to them, stopped the payment of conservancy charges and tendered the rent excluding the said charges. The tender was, however, not accepted by the landlord. The tenant/respondents in Appeal K/107/1978 failed to pay the conservancy charges from 6-12-1965 up to 15-3-1967 (a period of 15 months) while the respondents in Appeals Nos. 105 and 106/78 failed to pay the same from 16-6-1966 to 15-3-1967 (i.e. a period of 9 months).

7. Consequently, the landlord was compelled to file ejectment applica--tions against each of the four, tenant/respondents on 18-2-1967 under section 13(2) (i) of the Rent Ordinance. In the written statements filed by the tenants, they admitted that the plaintiff/petitioner was their landlord. They also admitted that they had not paid the conservancy charges for the aforementioned periods.

The reason given by them for the non-payment of the said charges was that they were not liable to pay the same after the enforcement of the Rent Ordinance in Karachi with effect from 1-7-1963.

The Rent Controller thereupon framed four issues, Issues relevant for our purposes are only Nos. 2 and 3, the substance whereof is as follows :-

(a) whether the landlord was entitled to recover the conservancy charges from the tenants, and

(b) whether the tenants had committed default within the meaning of section 13(2) (i) of the Rent Ordinance by not paying the conservancy charges to the landlord.

8. At the trial, each party produced one witness. After hearing the argu--ments, the learned Rent Controller, by his order dated .12-4-1968, held that the conservancy charges were a part of the `rent due' under the Rent Deed and that the tenants had committed default by not paying the same.

Consequently, he ordered the ejectment of the tenants from the flats in question.

9. The tenants (defendants/respondents) filed an appeal before the Additional District Judge, Karachi. The learned first appellate Court held that the conservancy charges were not included in the expression `rent due' appearing in section 13(2) (i) of the Rent Ordinance, inter alia, on the ground that the Explanation relating to clause (i) of subsection (2) of section 13 contemplates the inclusion only of water and electricity charges in the term `rent due' and no other taxes or charges could be included therein. He, therefore, came to the conclusion that the tenant had not committed any default, and allowed the four appeals, setting aside the order of ejectment, against them.

10. The landlord then filed four separate S. A. Os. The High Court upheld the judgment of the learned Additional District Judge, but for different reasons While considering the question as to what was meant by the term `rent due' the learned High Court Judge left the Explanation out of consideration and relied mainly on the construction of clause' I(c) of the . Rent Deed and held that the word `rent' used therein meant only the sum of money specifically so described by the parties to the agreement and included only the taxes etc. Expressly stated by them to be included therein and not any other taxes or charges which might have been mentioned in the said clause, but were not intended by the parties to be treated as a part of what they described as `rent'. The learned Judge in chamber disposed of all the four appeals by a consolidated judgment dated 26-4-1977.

11. Aggrieved by this judgment, the landlord moved this Court by way of four separate Civil Petitions for Special Leave to Appeal in which Leave was granted by this Court by a consolidated order dated 12-3-1978 and the petitions were converted into Appeals Nos. 105, 106, 107 and 108 of 1978.

While granting Leave it was observed by this Court; "The moot question for consideration was as to whether the expression `rent due' appearing in section 13(2) of the West Pakistan Urban Rent Restriction Ordinance includes within its ambit water and conservancy charges. There is no definition of the word `rent' in the Ordinance and, therefore, the learned Single Judge held that the guide--line for determining this question would be the lease agreement itself. Accordingly, he proceeded to construe clause 1(c) of the Agreement and held that Rs. 450 inclusive of all taxes and assessments was the rental of each flat, and so far as the water, conservancy, electricity and power charges were concerned, they were additional payments and not included in the rental of the fiats.

The learned counsel for the petitioner has questioned the correctness of this interpretation as, according to her, on a proper reading of the clause, the rent would include water and conservancy charges in the absence of any definition of this word in the Ordinance. Since the question as to what the word `rent due' connotes is not free from difficulty, we would accordingly grant leave to appeal to the petitioner in all the petitions to consider it."

12. We have heard the learned counsel for the parties at length and have considered the contentions raised and the case-law cited by them. We have also gone through the judgments of the three Courts below. Both sides agree that decision of the present appeals would turn basically on the interpretation to be placed on the expression 'rent due' appearing in section 13(2) (i) of the Rent Ordinance, and whether the conservancy charges, which the tenants/respondents agreed to pay to the landlord vide clause 1(c) of the Rent Deed, were included in the said term. It was also agreed by both sides that the word 'rent' has not been defined in the Ordinance and that no authoritative pronouncement has yet been made by this Court as to the meaning of 'rent due' as appearing in clause (i) of subsection (2) of section 13.

13. The learned counsel for the appellant contended that in the absence of any definition of the word 'rent' in the Special Law i.e. the Rent Ordinance, the Court has to look for the meaning given to the word in the General Law i.e. Section 105 of the Transfer of Property Act, 1882, which is applicable to Karachi. The portion relating to the definition of 'rent' in section 105 is reproduced below for facility of reference;- "The transferor is called the lessor and the transferee is called the lessee, the price is called the premium and the money, share, service or other thing to be so rendered is called the 'rent'."

The counsel emphasized that according to the said definition even services or other things to be rendered by the tenant to the landlord are included in the definition of 'rent' and that the effect of this provision is that whatever the tenant agrees or undertakes to render to the landlord in consideration of the enjoyment of his property by whatever name it may be called, would constitute the 'rent' and, therefore, if he had, agreed to pay any part of the taxes to the landlord, in addition to and alongwith the money specifically described. As 'rent', taxes or charges so paid, would also be included in the term 'rent due' for the purpose of section 13(2) (i) of the Rent Ordinance especially when stipulation to pay the same constitutes consideration for transferring property to the lessee and gives him permission to use the same subject to these stipulations.

14. He contended further that the explanation to clause (i) of sec--petition 3(2) of the Rent Ordinance is only illustrative (and not exhaustive) of what may be included in or constitute 'rent' other than the sum of money specifically so described, and does not limit the same to water and electricity charges.

He also contended that section 9(2) of the Rent Ordinance does not bar the payment to the landlord of any taxes or charges leviable on or in respect of his property, except those which are increased or imposed after the parties have entered into an agreement of lease.

15. The learned counsel for the respondents controverted these contentions. Relying on the wording of clause 1(c) .Of the Rent Deed, he submitted that the meaning assigned to 'rent' could only be such as the parties understood it to be. He submitted further that definition of rent in section 105 of the Transfer of Property Act is not applicable to the present case because definition contained in any other law would be applicable only if it is pari materia to the law being considered in a particular case.

He contended further that 'rent' would, by no means, be considered as including different taxes, rates or charges though agreed to be paid by the tenants, in view of the bar placed by subsection

(2) of section 9 of the Rent Ordinance, which expressly prohibits the landlord from recovering the amount of any tax whatsoever, from the tenant.

He also contended that the 'Explanation' appended to clause (i) of subsection (2) of section 13 of the Rent Ordinance is not truly an Explanation but is in fact a Deeming Clause. Therefore, the principles of interpreting an Explanation, as enunciated in PLD 1969 Lah. 228 are not applicable to it. He also argued that the conservancy charges cannot be regarded as rent because these do not constitute 'profit' for the landlord who, after receiving it from the tenant, is obliged to pass it on to the relevant Authority.

He submitted lastly that the tenant/respondents have paid more money by way of water and conservancy charges than was actually due from them and, therefore, even if it be held that these charges are included in the term 'rent due' there had been no default in the payment thereof by the tenants/ respondents.

16. We agree with the view expressed by the learned counsel for the parties and the observation made by the Courts below that the decision in this case would turn entirely upon the interpretation to be placed on the term 'rent due' as occurring in section 13(2) (i), and not merely the meaning of the word 'rent'. We, therefore, proceed to determine the true import of that term, keeping in view the provisions of the Rent Ordinance and the aforementioned contentions of the learned counsel for the parties.

17. The word 'rent' had been defined not only in the ordinary English dictionaries but also in Law Lexicons and Judicial Dictionaries as well as the general law on the subject namely the Transfer of Property Act, 1882. In the Oxford Dictionary, the meaning of rent is given as follows :- "A source or item of revenue or income a separate piece of land or other property yielding a certain return to the owner (Volume VIII, p. 451)."

"Rent be in diverse manners, that is rent service, rent chargo and rent secke.

Probably, it may be said that the primary meaning of 'rent' is the sum certain, in gross, which a tenant pays his landlord for the right of occupying the demised premises. Thus an agreement to occupy part of premises on the terms of keeping the whole clean and paying the rates and taxes, is not an agreement to pay 'rent'. "

Different definitions or descriptions of the said word as occurring in various Acts or decided cases have also been enumerated in the same Volume of Stroud's Dictionary, some of which are reproduced below, alongwith their respective serial numbers;- "(8) Under Real Property Limitation Acts, 1833 and 1874 'rent' extends to all heriots, and to all services and suits, for which a distress may be made, and to all annuities and periodical sums of money charged upon or payable out, any land. .

(12) 'rent' includes yearly or other rent, toll; duty, royalty, or other reservation by the acre, the ton

(15) means the actual contractual rent without any deduction in respect of rates or taxes which the landlord may have agreed to pay

(22) (section 96 Metropolis Management Act, 1862) tenant to deduct 'out of the rent' moneys he pays to the local authority for paying charges, does nest make such moneys a payment of 'rent'.

They are only a payment on account of the costs and expenses demandable by the local authority (31-C) (subsection 2) All contractual stipulations should be added together and treated as rent.

According to Corpus Juris Secundum (Volume 52) the meaning of term `rent' is given as follows "the term `rent' usually implies the elements of periodicity and certainty, it is applicable to compensation for the use of lands and tenements corporeal and is something, not necessarily money, which a tenant renders out of the profits of the land which he enjoys."

1n Halsbury's Laws of England, Third Edition (Vol. 3), pp. 536 and 537 the nature of rent is dealt thus;- "Rent-that is, rent-service, is the recompense paid to the landlord for the exclusive possession of corporeal hereditaments. The modern conception of rent is a payment which a tenant is bound by his contract to make to his landlord for the use of the property let."

18. It would be noticed that there is considerable variation in the meanings given to the word `rent' in the different definitions or description thereof contained in the aforementioned dictionaries and legal treaties.

As mentioned above, it was contended by the learned counsel for the respondents that if the term in question is not defined in the statute under consideration and the Court has to fall back on its definition as given in any other law, then it (i.e. the Court) must restrict itself to the definition thereof only in such laws which are pari materia. We fully endorse this view because as evident from the above noted definition, the term `rent' is by its nature a very loose one, and is susceptible to diverse interpretations when applied to different situations. Moreover, it is noteworthy that what we have to construe in the present case is not merely the word `rent' but the term `rent due' as used in section 13(2) (i) of the Rent Ordinance.

19. We would, however, like to mention that in a case relating to rent, under the Karachi Rent Restriction Act, 1953 i.e. Dr. Pashotan v. Peerozshaw PLD 1962 Kar. 296Mr. Justice Qadeeruddin Ahmad, while considering the meaning of the word `rent' which was not defined in the said Act, relied on the definition of the word as given in section 105 of the Transfer of Property Act. The relevant observation may be usefully reproduced below;- "Now the term `rent' is not defined in any of the statutes of rent restriction that were, and the one which is now applicable to Karachi. It is a generic term, and its meaning can be gathered from section 105 of the Transfer of Property Act, 1882 to be a price paid or promised, or money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions by the lessee to the landlord. If a lease is created by agreement of the parties in which rent is paid in the form of service rendered to the owners of the property, it is interest in the property and would form a part of the assets of the firm in terms of section 14 of the Partnership Act."

20. What is intended to be shown by quoting the above noted observa--petition is that as early as 1962 the Karachi High Court itself regarded the Transfer of Property Act as a law pari materia to the Karachi Rent Restric-- petition Act and considered the definition of `rent' given in section 105 of the said Act as relevant for the purpose of construing the same word occurring in the aforementioned Rent Act. From a reading of the definition of the word `rent' in section 105 of the Transfer of Property Act, it is evident that it includes not only the money agreed to be paid but includes even services or other things to be rendered by the tenant to the landlord. In other words, according to this definition; whatever the tenant agrees or undertakes to render to the landlord in consideration of the enjoyment of his property, whatever it may be or by whatever name it may be called, would, be included in the term `rent'. As such if the tenant agrees to pay any part of the taxes to the landlord in addition to or in lieu of the substantive rent, that additional payment would also be included in the rent due from the tenant.

21. The contention that such extra payments would not constitute any `profit' to the landlord overlooks the fact that the payment of the taxes agreed to be paid by the tenant relieves the landlord of the burden of paying the same himself and as such becomes `profit' for to him that extent.

22. Coming now to the wording of clause 1(c) of the Rent Deed, a reading thereof clearly shows that the tenants/respondents had not only agreed to pay Rs. 450 per month (which would include all taxes and assessm ent imposed or levied on the property in question except water and conservancy taxes and electricity and power charges which were to be paid by the lessee) but had also specifically agreed that the tenants shall pay the amount of these taxes or charges to the landlord alongwith and in addition to the aforementioned sum of Rs. 450 p.m.

23. From the above it is clear that the tenants had themselves agreed to pay some taxes, like the property tax etc., apart from the money pail merely for the use and occupation of the premises in question and these were included in the sum specifically described as `rent' and secondly that they had also made themselves liable to pay certain other taxes or charges to the landlord, though not specifically called `rent'.

24. In fact, a study of the scheme and language of the Rent Ordinance leaves one in no manner of doubt that payment of taxes (to whatever extent agreed to between the parties or permissible under the law) by the tenant to the landlord, is inherent in the concept of the term `rent due' as used in the Rent Ordinance. This is evident from section 4 of the Rent Ordinance which deals with the determination of fair rent by the Rent Controller and provides that amongst other factors the imposition of new taxes will also be taken into consideration by him. Even section 9 of the Rent Ordinance supports the contention that the taxes, to the extent permitted, are an integral part of the rent.

25. Therefore, if one has to go by what the parties, in the present case agreed to between themselves, then it is evident that for the use and occupa--petition of the premises the tenant had agreed to pay a sum of Rs. 450 which included some taxes mentioned therein and they also agreed to pay some extra amounts of money towards certain other taxes, including the conser-- vancy charges. In other words these extra amounts mentioned in the Rent Deed, though to be paid in addition to the sum of 453 would also be due from the tenant. Had the agreement been that the tenant would be responsi--ble to pay certain charges like electricity, water and conservancy char directly to the concerned : authorities. The position would have been different.

But in the present case the tenant had specifically agreed that they would also be bound to pay the amounts of charges towards the aforementioned items to the landlord alongwith Rs. 450.

Therefore, according to the terms of the contract itself they made themselves' liable for the payment not only of Rs. 450 described by them specifically as 'rent', but also to pay an extra sum of money, inter alia, towards the conservancy charges which bad been calculated at Rs. 51.75 per month. Had the term to be interpreted been simply 'rent' then it could have been argued that only the default in payment of that amount which specifically described by the parties as 'rent' would give rise to the liability of ejectment against the tenants and not the failure to pay any additional amount, though mentioned in the deed as payable by the tenants.

But in the case in hand, the question, as agreed by both sides, is the interpretation of the term `rent due' the non-payment of which, according to section 13 (2) (i) would render the tenant liable to ejectment.

26. The contention that the Explanation relating to clause (f) of sec--petition 13 (2) is not truly an Explanation but is, in fact a 'Deeming Clause' is wholly fallacious. The Legislature in its wisdom, has specifically named it as an Explanation and made it relatable to clause (f) of section 13 (2) in order to indicate as to what the term 'rent due' may include. We feel that there is no ambiguity in the words used by the Legislature necessitating a construction other than the one indicated by a plain reading of that word.

The object of adding an Explanation to a statutory provision has been considered in the case of Colony Sarhad Textile Mills v. Collector, C. E L. C. PLD 1969 Lab. 228. It may be mentioned that the present Chief Justice of the Supreme Court (Mr. Justice S. Anwarul Haq), was a party to the said judgment. We respectfully agree with the .Observations made by the Court in that case which are as follows :- "The object of adding an Explanation to a statutory provision is only to facilitate its proper interpretation and to remove any possible confusion or misunderstanding about its true meaning.

It does not per se create or extinguish any liability which has to be spelled out only from the main provision sought to be interpreted with the assistance of the Explanation. In other words, the Explanation is to be relied upon .Only as a useful guide or in aid to the construction of the main provision."

The object of the Explanation in the present case is obviously the same, namely to remove any doubt as to the meaning of the term `rent due' as used in clause (i) of section 13 (2) and to clarify that in addition to the amount of 'rent simpliciter' it could also include other charges and taxes agreed to by the parties. And even in the present case, the Explanation, does not create or add anything to the main section but merely illustrates as to what the term 'rent due' may include.

Obviously, therefore, the Explanation does not place any limitation on the type and the number of other charges the payment of which the tenants may agree to pay and which would thus) become due from him.

27. We also find no force in the contention that section 9 (2) of the Rent Ordinance prohibits the landlord from recovering the amount of any taxes whatsoever. The view canvassed by the learned counsel for the respon--dents that it places such a bar, is based on misconception which has arisen as a result of reading subsection (2) of section 9 in isolation from the rest of that section. A reading of section 9 in its entirety clearly shows that sub (2) of that section create a bar only against the demand for the payment of any fresh taxes or of any increase in the existing taxes, after the parties have entered into an agreement. It does not apply to taxes existing at the time of execution of the Lease Deed which the tenant has agreed to pay to the landlord. It is with respect only to new and increased taxes that an approval has, to be obtained from the Rent Controller under subsection (1), of section 9 before enhancement of the rent. In the case in hand, there has been no increase in the conservancy charges. The landlord only demanded the amount of charges which the tenants had already agreed to pay alongwith Rs. 450. As mentioned above when the tax was increased by the K. M. C. And a new tax was imposed after the extension of the Excise and Taxation Act to Karachi, the landlord had approached the Rent Controller for an order requiring the tenants to pay the amount of fresh taxes to him as part of the rent.

28. As rightly observed by the learned Rent Controller if the interpreta--petition placed by the counsel for the respondents on subsection (2) of section 9 was to be accepted then the tenant would not have been liable to pay even the sum of Rs. 45 agreed to be paid by them as 'rent simpliciter' because even that sum included all other taxes or changes except the conservancy and water charges etc.

29. The contention that the respondents have paid more money towards the conservancy charges than was due from them relates to a 'fact' on which they have not cared to adduce any evidence.

As such it is too late in the day to urge this plea successfully.

30. As a result of the above discussion we hold that the term `rent due for the purposes of clause (i) of section 13 (2) of the Rent Ordinance (i.e. For constituting a ground for ejectment on default of payment of the same), mean not only the money specifically described as `rent' in the Rent Deed or the Lease Agreement, but also includes all other moneys (except fresh taxes o amounts of increase in the existing taxes) agreed to be paid by the tenants to l the landlord.

31. It, therefore, follows that by not paying the conservancy charges as agreed, the tenants/respondents were guilty of default in the payment o `rent due' and as such they were liable to be ejected from the premises in question. In this view of the matter, we accept all the four appeals and set-aside the impugned judgment of the High Court and direct ejectment of the respondents therefrom. ,

32. We, however, allow the tenants two months' time to vacate the premises subject, of course, to the payment of the 'rent due' as defined above, to the landlord each month on the date fixed for payment of the same.

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