' This judgment will dispose of R. S. A. No, 85 of 1974 and S. A.
0. No, 48 of 1978 as both the appeals though on different sides raise common question of law and facts and it would be appropriate to take up R. S. A. No, 85 of 1974 first.
2. Briefly the facts of this case are that Rehmat Ali the original appellant (hereinafter called 'the plaintiff') filed a suit for declaration to the effect that he was entitled to protection under section 53-A of the Transfer of Property Act on the basis of the agreement for sale dated 27-8-1965. It was claimed that Abdul Aziz respondent had' entered into an agreement for sale with the plaintiff in respect of Shop No, 8/308-A, situate in Galla Mandl, Lalamusa. The suit was filed on 27th April, 1970.
This suit was contested by the respondent and in the written statement filed on 30-5-1970 the respondent took several legal objections including the objection relating to the maintainability of the suit. On merits the execution of the agreement and the receipt of Rs, 4,000 as consideration of the shop was specifically denied. The respondent also maintained that the appellant was a statutory tenant and was estopped to file the present suit. The learned trial Court framed several issues but the issue which has so far been dealt with by the Courts below was Issue No, 3 and worded as under :- "Issue No, 3.-Whether the suit is not maintainable in. Its present font V'
3. The learned Civil Judge, Kharian vide his judgment and decree dated 29-11-1972 dismissed the suit holding that the sale was still incomplete and as such a declaratory suit could not be filed.
According to the learned trial Court a suit for specific performance of the contract could only be filed. The plaintiff filed an appeal and the learned District Judge, Gujrat vide his judgment dated.
28-11-1973 dismissed the appeal. The learned District Judge affirmed the finding of the learned trial'
Court that a declaratory suit could not be filed and distinguished the judgment of this Court reported as Mst. Shankri and others v. Milkha Singh (1).
4. Ns the facts relating to S. A. O. No, 48/78 may be taken up. The respondent in this case filed a petition for eviction against the plaintiff claiming to be the transferee of the disputed shop and that the plaintiff had become his statutory tenant under the provisions of section 30 of the Displaced Persons (Compensation and Rehabilitation) Act, 1958. The respondent claimed, rent with effect from 27-1-1961 at the rate of Rs,
30. The eviction application also proceeded on the ground of damage and personal need. The plaintiff in these proceedings denied the relationship of landlord and tenant and claimed protection under section 53-A of the Transfer of Property Act by virtue of the agreement dated 27-8-1965 by which the plaintiff claimed that he had paid a sum of Rs, 4,000 being the entire consideration. The respondent denied the execution of any such agreement or the receipt of the consideration of Rs, 4,000. On this account several issues were framed but the one with which we are concerned presently is the existence of relationship of landlord and tenant between the parties being Issue No. 1 as this would be the issue raising the common question of law and facts in both R. S. A. No, 85 of 1974 as well as S. A.
0. No, 48 of 1978 arising out of the rent proceedings.
5. Both these appeals raise some important questions of law in view of (1) AIR 1941 Lab. 407 the fact that in most of the rent cases the defence taken by the tenant is that he is in possession of the property in pursuance to an agreement for sale and that he has either paid the entire consideration or a considerable portion thereof, and on that basis the liability to pay the rent is denied. In the present case the very execution of the agreement is denied and this would be the point which I shall be taking up specifically under the S. A.
0. But for the purpose of R. S. A. It shall be assumed that there is in existence an agreement and the question for determination as reflected in Issue No, 3 would be whether a suit in these circumstances for a declaration in respect of the protection under section 53-A of the Transfer of Property Act is maintainable or not. This question has assumed considerable importance as in most of the cases the tenant does not file a suit for the specific performance of contract within the period of limitation and only confines himself to taking up the defence in the rent proceedings and even no declaratory suit is filed as to the protection under section 53-A of the Transfer of Property Act. The questions on the proposition to be dealt with in this appeal may be formulated as under :-
(i) If the landlord enters into an agreement for sale in respect of the property in his occupation what is its effect on their existing relations and whether such a tenant is still liable to pay the rent.
(ii) If such a tenant does not file a suit for specific performance of the agreement and the period of limitation is run out, whether he is still entitled to the protection under section 53-A of the Transfer of Property Act and competent to file a declaratory suit.
6. Point No. 1.-First question posed above does not present any difficulty. The first judgment to be considered in this behalf is the case reported as Kalimuddin Ansari v. Director, Excise and Taxation, Karachi and another (1). In this case two appeals were disposed of together and the appellants were either the sub-licensees or lessees of the House building Society. The leave was granted to consider the question regarding the, validity of the Constitution of Karachi Municipal Corporation and its right to recover taxes under the West Pakistan Immovable Property Act from the persons who had constructed houses in the P. E. C. H. S., Karachi and the plots holders of the Housing Union.
In determining the liability the payment of tax by such a person as regards the protection under section 53-A of the Transfer of Property Act, their Lordships of the Supreme Court observed as under "I have no doubt that for all practical purposes the sub-licensees have become the holders of a permanent lease. The appellants and the other sub-licensees are either living in the houses constructed by them or have rented them out to the tenants. In short, but for the technical objection that no registered lease has been executed the lands are leased out in perpetuity, and it would indeed be very difficult for the Government to oust them. In any proceeding for ejectment section 53-A of the Transfer of Property Act would afford a valid defence against the ejectment.
The agreements clearly show that the Government has intended to divest itself and to vest the lands in the sub-licensees but the latter have apparently mala fide omitted to execute the lease as they were required to do under the terms of the agreement. In these circumstances to accept the appellants' contention is not only to act 'directly against the intention of the Legislature as contained in section 4 of Act V of 1958 but also to help the appellants in their wrongful efforts to evade the payment of tax under the said Act." {{FOOT NOTE}}
(1) PLD 1971 SC 1141 {{FOOT NOTE}} In another case reported as Mst. Ghulam Sakina v. Umar Bakhsh and another (1). Their Lordships of the Supreme Court were pleased to examine the effect of provisions contained in section 17 and section 49 of the Registration Act, 1908 on the protection afforded under section 53-A of the Transfer of Property Act. In this case apart from other considerations the husband conveyed his 1/2 share of the house to his wife by way of Hibba-bil-ewaz in lieu of half portion of the cash dowery amounting to Rs, 5,000. The husband entered to make a conditional sale of half .In the said house in favour of his brother for a sum of Rs, 500. The condition was to the effect that if the amount was paid within two years the husband would reconvey the 1/2 share to his brother. Umar Bakhsh the husband took another wife by the name of Mumtaz Begum and transferred to her by way of dower half share that he had acquired from his brother Ghulam Yasin. Umar Bakhsh the husband paid another Rs, 250 to his *brother and secured the cancellation of condition for re-conveyance.
Ghulam Sakina filed a suit for pre-emption claiming to be a co-owner in the property. The leave was granted in this case to consider as to whether unregistered compromise decree was sufficient in law to defeat the appellant's claim for pre-emption and as to whether Umar Bakhsh could rely on the principles of section 53-A of the Transfer of Property Act and to resist her claim. It was in this connection that their Lordships of the Supreme Court observed as under :- "Lastly the contention that in the absence of registration of the compromise decree-the right of pre-emption could not be defeated, as the compromise could not affect her rights in the property, is also without any force. Section 49 of the Registration Act, no doubt, provides that if a document, which is compulsorily registrable, is not registered, then such a document does not affect any rights in the property dealt with under such a document. But section 53-A of the Transfer of Property Act makes an exception to this and provides that where a person obtains possession of or continues to remain in possession of a property under a document in writing which, though compulsorily registrable, has not been registered, then neither the person transferring the property nor any one claiming under him shall be entitled to enforce against the transferee or any person: claiming under him any right in respect of that property. In the present case Umar Bakhsh was admittedly in possession of the house and, therefore, even if the deed of compromise was not registered, the appellant could not enforce her right in the said property against Umar Bakhsh who continued to remain in possession under the terms of the compromise."
7. The applicability of the principle of section 53-A of the Transfer of Property Act was recognized in the rent cases and reference in this behalf may be made to a case reported as Manzur Hussain v.
Nawazish Nazir Hussain and another (2). In this case the ejectment of the tenant was sought by the landlord on the ground of default in the payment of rent apart from the grounds of personal need and damage to the property. The appellant pleaded before the Rent Controller that after the tenancy started one of the title owners executed an agreement to sell property for Rs, 4,500 and received Rs, 3,000 in advance and that no relationship of landlord and tenant existed between the parties. An issue was framed to that effect but the learned Rent Controller . Without deciding the point whether an {{FOOT NOTE}}
(1) PLD 1964 SC 456 (2) PLD 1976 Lah. 637 {{FOOT NOTE}} agreement to sell has been executed by one of the joint owners in favour of the tenant, decided that even if it be admitted that such an agreement had been executed it did not put an end the relationship of landlord and tenant which has come into existence prior to that. The -learned Rent Controller, therefore decided that the relationship of landlord and tenant existed between the parties and as such passed an order for the deposit of arrears of rent and future rent under subsection (6) of section 13 of the Rent Restriction Ordinance. In this case reliance was placed on the cases reported as Annamali Goundan V. Venkatasami (1), Mst. Ghulam Sakina v. Umar Bakhsh and another and Kalimuddin Ansari v. Director, Excise & Taxation, Karachi and another already discussed above. In this connection it was observed in Manzur Hussain's case as under :- "It is clear from the observations made in the above-cited authorities that after an agreement to sell is execufed, the transferor cannot exercise any other right except a right acquired under the said agreement. All the three cases arise from ejectment petitions. Learned counsel for the respondent has not been able to show that section 53-A in such cases cannot help and that the tenant is still debarred from denying the tenancy."
' This appeal was accepted and the case was remanded to consider whether the relationship of landlord and tenant existed after an opportunity of producing the evidence in this behalf.
8. In connection with the leases the question whether a person was entitled to file a suit for specific performance of the contract or to continue in possession in pursuance to the agreement to lease though not registered, the observations of Mr. Justice Aftab Hussain in a case reported as Carrier Telephone Industries Ltd., Islamabad v. Messrs Sohail Brothers and another (2) need reproduction :- "The argument that section 53-A of the Transfer of Property Act is relatable only to agreements to self, is not correct. It applies to all contracts to transfer immovable property for consideration. It cannot be doubted that a lease is a transfer of interest in immovable property. The case of the appellant is, therefore, also covered by section 53-A of the above section. There. Was not only a written agreement between the parties, but possession had also been delivered to him. Moreover this is a case in which the appellant had performed his part of the contract and only the C. D. A.
Was required to execute a registered lease deed in his favour to perform its part.
' Section 53-A also furnishes an answer to the argument about the non-registration of the contract of lease since it provides in the' same manner as section 27-A of the Specific Relief Act that the transferee will have a right to the protection of his possession notwithstanding that the contract though liable to be registered, has not been registered, or, where there is an instrument for transfer, that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force. It is within the discretion of the party to file a suit for specific performance of such contract or to remain in possession of the area promised to be leased out to him under section 53- A."
9. Another judgment of the learned Supreme Court reported as Haji Jan {{FOOT NOTE}}
(1) AIR 1969 Mad. 354 (2) PLD 1978 Lah. 1116 {{FOOT NOTE}} Muhammad v. Ghulam Ghaus and others (1), may also be examined. In this case their Lordships of the Supreme Court had to examine an important point. In this case also the transferee had filed an application for eviction. The statutory tenant had taken shelter behind an agreement to sell the premises in favour of the tenant, but the said agreement did not contain any stipulation exempting the transferee from payment of the rent till the completion of the same. On the admission cf the petitioner that he had paid no rent, the Rent Controller made an order of ejectment against him. In appeal, the District Judge took the view that the principle of part performance as contained in section 53-A of the Transfer of Property Act was attracted and therefore allowed the appeal. This position was however reversed in second appeal by the High Court. In this connection the learned Supreme Court observed as under :- "Lastly, the learned counsel tried to challenge the findings of the High Court on the non- applicability of section 53-A of the Transfer of Property Act which embodies the principle of part performance. In support of his plea of part performance, learned counsel raised a novel argument that his clients continued occupation of the premises coupled with the admitted non-payment of rent, which constituted the ground of petitioner's ejectment, were the two overt acts on his part towards part performance of the contract. As observed earlier, agreement of sale, Exh. R. 1 which formed the sheet-anchor of the petitioner's case did not exempt him from payment of rent and therefore, his continued occupation of the premises in violation of the law could hardly be put forth as a defence or a step towards part performance when admittedly the petitioner had never paid the consideration. The authority relied upon in this behalf by the learned counsel namely, Karimuddin Ansari v. Director Excise & Taxation L D 1971 SC 114), has there-fore, no relevancy as it proceeds on entirely different and distinguishable facts." (Underlining* is mine).
10. The conclusion can therefore be safely drawn: That the protection under section 53-A of the Transfer of Property Act is available to a tenant if he proves that such an agreement was executed and that he had paid a considerable amount towards the sale price and that there is a stipulatior. In the agreement for the exemption of the payment of rent.
' This defence can be taken irrespective of the suit for specific performance of the contract or a declaratory suit. The Rent Controller would be competent to determine the facts relating to the question of such an agreement in the exercise of his jurisdiction to hold whether the relationship of landlord and tenant subsisted between the parties or not. If the agreement is proved but there is no exception from the payment of the rent the learned Rent Controller shall hold the existence of the relationship as in that case the liability to pay rent continues. In nutshell the question to be decided in such cases when an agreement to sell is put forward as a defence is whether the tenant is liable to pay the rent or not and for no other purpose. Admittedly, the question of title cannot be gone into by the Rent Controller in eviction proceedings. The liability to pay the rent may also be determined on the question of the return of the money advanced as has been observed in Manzur Hussain v. Nawazish Nazir Hussain etc. Quoted above.
11. Point No, (O.-After the determination of point No, (i) it is easier {{FOOT NOTE}}
(1) 1976 SCM R 141 *[Here in italics) {{FOOT NOTE}} to answer the question No, (ii). My reply is that the tenant is not obliged in all eventualities to file a suit for the specific performance of the contract. If the liability to pay the rent has not been exempted, it would be essential for the tenant to complete his title by way of filing a suit for the specific performance of the contract and in case he is granted a decree and proprietary rights are conferred on him, the relationship of landlord and tenant will cease to exist from that date even in case the Rent Controller holds that no such agreement does exist. It may be under same circumstances that a tenant may be compelled to file a declaratory suit as to the protection under section 53-A of the Transfer of Property Act on, the basis of the agreement and the Court dealing with the same shall decide the case on its own merits and ultimately the civil Courts may hold that he was entitled to such a protection. One of such situations may be if the landlord wants to cause the eviction save under the due process of law or otherwise denies the existence of an agreement that the landlord may file 'a declaratory suit. It was under these circumstances that the question of filing of such a declaratory suit was decided in Mst. Shankri v. Milkha Singh. In this case the plaintiff instituted a suit against the defendant for a declaration that he was the owner of land in suit and as such entitled to maintain his possession thereof. In the alternative, he claimed a decree of possession of the same land. The defence was that the plaintiff had acquired the land in suit by exchange from the defendants and that the transaction had been reduced to writing which however was not registered. The Senior Subordinate Judge held as a finding of fact that the document was executed by the defendant. In the High Court it was urged that the plaintiff could not base his claim on an unregistered document and consequently the document being inadmissible in evidence the judgment of the Senior Subordinate Judge could not be maintained.
In view of the contrary judgment of a Division Bench the matter was referred to the Full Bench. After the review of the entire case-law it was held that where the position of the plaintiff is that of a purchaser of the property of the value of Rs, 100 or upwards who has been let into possession by his vendor under an unregistered and consequently inoperative sale-deed after there has been first an oral agreement to sell and after the whole of the consideration has been made good under the mistaken belief on both sides that the transaction is complete, whereas in fact it has remained incomplete for want of registration of the instrument purporting to effect the transfer, the plaintiff would not be entitled to a declaration of ownership, notwithstanding part performance, but might be granted a declaration that he was legally in possession of the property in dispute which was delivered to him by the defendant and over which he had a lien for the value of the property which the plaintiff handed Over to the defendant in exchange and for the money paid by the plaintiff to the defendant.
12. In view of the Full Bench judgment of this Court it is held that a declaratory suit is maintainable and one of the situations in which it may be filed has already been examined above. A similar point was also considered in Tnayatullah and others v. Shah Muhammad and others (1). The question examined. Was whether a transferee is entitled to protection under section 53-A of the Transfer of Property Act and whether a transferee by means of an unregistered deed was debarred from enforcing any right in respect 'of the property if the transferee has in part performance of the contract taken possession of it. It was observed that such a transferee when comes to the Court as a plaintiff and bases his claim on part performance of contract he uses the part performance of the contract as shield and not as {{FOOT NOTE}}
(1) P L p 1961 Lab. 372 {{FOOT NOTE}} a sword and his object is only to defend his own title and not to attack the title of anyone else. Suit for the specific performance by a transferee of property in the absence of registered sale deed was therefore held to be competent. It was further observed that section 53-A of the Transfer of Property Act debars a transferor from enforcing any right against a transferee in possession, but does not prevent a transferee from seeking relief which must, in its very nature, be by way of defence.
13. From the above discussion it becomes abundantly clear that filing of such a declaratory suit is not barred as held by the Courts below. Respectfully following the dictum of law as laid down by the Full Bench of this Court referred to above, a declaratory suit was legally competent. The question whether such an agreement was executed or not and whether such a declaration ought to have been granted in the circumstances of the case are the questions which are to be decided during the trial on merits.
14. In view of the above discussion this appeal is accepted and the judgment and decree of the learned trial Court, Kharian dated 29-11-1972 and the learned District Judge, Gujrat dated 28-11-1973 are set aside and the suit filed by the plaintiff was legally competent. This shall however have no effect on the powers of the Rent Controller to determine the question whether the relationship of landlord and tenant subsisted biween the parties and whether such an agreement was executed or the liability to pay the rent continued.
15. As regards S. A.
0. No, 48 of 1978 both the Rent Controller as well as the Appellate Authority have held that the respondent had not executed the rent-note. The contention of the appellant that the agreement dated 27-8-1965 Exh. R. 1 was exhibited and therefore shall be deemed to be proved cannot be legally sustained. This agreement was not put to the respondent appearing as his own witness. The other circumstances taken into consideration for holding that the execution of Exh. R. 1 is doubtful need not be reproduced. This being a concurrent finding of fact cannot be disturbed in second appeal. It is not the case of the appellant that the findings are vitiated on account of misreading of evidence or non consideration of any important evidence on .Record. The only point urged, in this appeal was that the appellant had , filed a civil suit and on that score the proceedings ought to have stayed or the Rent Controller should not have determined the question of existence of relationship of landlor and tenant. The argument is not legally tenable. The proceedings before the civil Court in either a declaratory suit or in a suit for specific performance which I have held both are maintainable but have nothing to do with the determination of the question of relationship of landlord and tenant by a Rent Controller which question the Rent Controller has to determine before proceeding further under section 13 of the Rent Restriction Ordinance as laid down in a Full Bench judgment of this Court in Akhtar Ali Pervaiz v. Attafur Rehman (1). In case otherwise any dishonest tenant can by producing a forged agreement of sale may resist the rent proceedings by wing a declaratory suit or suit for the performance of contract in civil Court. However, after the eviction orders are passed by the Rent Controller the question of protection of possession of such a tenant shall, be decided by the civil Court on its own merits keeping in view the consideration recognized under the law for the grant of temporary injunction as contained in Order XXXIX, rules 1 and 2, C. P. C. {{FOOT NOTE}}
(1) PLD 1963 Lah, 39() {{FOOT NOTE}}
16. In view of the above circumstances S. A.
0. No, 48 of 1978 is dismissed with no order as to costs.