The respondent No. 1 is the owner and landlord of the premises in dis--pute which was occupied by the respondent No. 2 as a tenant at Rs. 160 per month as rent and carried business of Life Insurance and General Insurance therein. The respondent No. 1 moved an application for the eviction of the appellant and respondent No. 2 on the ground that respondent No. 2 has sublet the premises to the appellant without consent or permission in writing of the applicant and the premises are being used for a purpose other than for which they were let out. The respondent No. 2 Eastern Federal Union Insurance Company filed the written statement on 19-6-1974 and its case was that in the month of March, 1972 by the President's Order 10 of 1972 (Life Insurance (Nationalisation) Order, 1972 (hereinafter referred to as the President's Order), the entire Life Insurance business was nationalized and consequently the State Life Insurance of Pakistan has been created. By the virtue of this Order all business assets etc. Entered into by the Eastern Federal Union Insurance, pertaining to Life Insurance business were transferred to the State Life Insurance Corporation of Pakistan. The portion of the premises where the Life Insurance business was carried out by the respondent was occupied by State Life Insurance Corporation of Pakistan purporting to act r under the provisions of the Order. The possession was resisted by the res--pondent and ultimately the State Life agreed to vacate the premises. The respondent No. 1 has contested the claim of State Insurance even to occupy the portion of the premises temporarily and it is likely that the said portion may be returned to the Eastern Federal Union Corporation. It was denied that subletting in favour of the appellant was made by the respondent No. 1. On 17-5-1976 the appellant moved an application for adjournment to file the written statement. On 17-5-1976 another application for adjourn--ment was moved for filing the written statement. Again an adjournment was sought on 19-6-1976. On 23-7- 1976 an application was moved for adjourn--ment on the ground that negotiation for settlement was going on between the parties. This plea was again taken for seeking adjournment on 7-9-1976.
The Court adjourned the matter on these dates at the request of the appellant; but on 16-10-1976 it refused to adjourn the matter at the request of the appel--lant as many opportunities had been afforded to him. The appellant was not allowed to file the written statement, but it was permitted to contest the application. During the course of proceedings the witnesses have been examined. On 14-5-1979 the respondent No. 2 moved as application that it had vacated the premises on 5-4- 1979, and since then it has no connection with the same. On 24-9-1979 the appellant moved an application that pre--viously both the respondents were contesting the application, but as the respondent No. 2 has left the field and not contested the eviction application the result is obvious that even in the presence of the appellant, the case will be decided ex parte without written statement. It was, therefore, proved that the appellant be allowed to file the written statement. The learned Controller did not allow the prayer and passed an order for eviction, holding that res-- pondent No. 2 has vacated the premises and has handed over the same to respondent without applicant's permission and thus there is nothing to con--trovert. He, therefore, allowed the application moved by the respondent No. 1 and passed the order of eviction.
2. I have beard learned counsel for the parties. It is contended by Mr. Muhammad Muquim Ansari, learned counsel for the appellant that the possession of the appellant over the premises was not in consequence of any act of respondent No. 2 much less subletting ; but by operation of law the business of respondent No. 2 with regard to Life Insurance was succeeded over by the appellant as a component . Of tenant-in-Chief. It is contended that respondent No. 2 was carrying on business of Life Insurance and General Insurance, but after the promulgation of the Order, the business of Life Insu--rance was nationalised and the respondent No. 2 was running the business of General Insurance. The learned counsel for the appellant has referred to sections 2(b), 4(c), 10, 15, 17, and 18(2)(d) in support of his contention that as the Life Insurance was nationalised, therefore, the appellant stepped into the shoes of the respondent No. 2, and, by operation of law became the tenant of respondent No. 1. The respondent No. 2 did not contest the appeal and it was declared ex parte on 9-3-1982. The learned counsel for the respondent No. 1 has submitted that respondent No. 2 was only a Com--pany whereas the appellant is a Corporation. The Company was the tenant of respondent No. 1 and it was carrying on the business of General Insurance in the premises. The appellant and respondent No. 2 are doing two distinct businesses. The Corporation would not become a co-tenant. Even after the enforcement of the Order, the respondent No. 2 was doing its business. He has also stated that this Order could not apply to the property of a third person. The learned counsel has submitted that the provisions of law quoted by the learned counsel for the appellant would in no way support the conten--tion raised by him.
3. In order to appreciate the respective contentions raised by the learned counsel for the parties, it would be necessary to refer to certain provisions of law. According to section 4 the management of Insurance transacting Life Insurance business shall vest in the Central Government and all the persons vested with such management immediately before the specified date shall be divested of such management. According to section 5, the Central Government may appoint a trustee for the management of the affairs of in--surers transacting life insurance business. Under section 2(b) "assets" include all rights and powers and all properties, whether movable or immovable, cash business, reserve funds, investments, deposits, and all other interests and rights in or arising out of any such property and the books of account and documents. Section 10 contemplates that every whole time employee of an insurer the management of whose life insurance business vests in the Central Government shall continue to hold his office. By means of section 11 the Central Government shall establish one or more Corporations for the purpose of carrying on life insurance business. Under section 15 all the assets and liabilities appertaining to the Life Insurance in Pakistan of all insurers shall, on the appointed date stand transferred to and vested in Corporation. Under section 17 all contracts, agreements and other instruments of whatever nature subsisting or having effect immediate before the pointed date shall be of full force and effect against or in favour of the Corporation, as the case may be, and may be enforced or acted upon as fully and effectually as if, instead of the insurer, the Corporation bad been party thereto or as if they had been entered into or issued in favour of the Corporation. Under section 18(2) the Central Government is empowered to frame rules providing for the seve--rance of leases comprising of which part only is transferred to and vested in Corporation and for appointments making of financial adjustments with respect to any debts, liabilities or obligations. The cumulative effect of sec--tions 17 and 18(2) (d) and (e) is that all contracts and agreements still subsist by operation of law. The Rules have been framed under section 18(2) on 27-9-1972. Under rule 3(2) all premises rented specifically for the purpose of Life Insurance business shall be deemed appertain to life insurance business. Under sub-rule (3) if any premises are used jointly for life insurance business and other classes of insurance business, the trustee shall within a period of three months of the transfer of life insurance business to the Corporation determine the total area of the premises needed for the conduct of life insurance business. Under sub-rule (4) rent and tax for the part of the pre--mises taken over for the use of life insurance business shall be proportionate to the total area-of the premises. Under rule 5(1) if any agreement is entered into by the insurer transacting both life and general insurance business for the purpose of leasing and renting any property for use as office premises for conducting the business of the insurer, the lease or agreement shall be deemed to be that of the insurer and shall continue to be in the name of the insurer. Under sub-rule 5 (2) a trustee shall notify the insurer whether the office premises will also be used for the conduct of the life insurance business. Under rule 7 no lease entered into for office premises shall be severed by the insurer transacting both life and general .Insurance business without the written consent of the trustee. Under sub-rule (3) of rule 7 if it is determined that any premises are required for the purpose of life insurance business, the trustee may enter into a fresh lease for the premises from the date of the lease expires.
4. The overall conclusion from the aforesaid Presidential Order and the rules framed thereunder is that the appellant had taken over the business of life insurance by operation of law and they were entitled to take the occu--pation of the premises. Under section 17 all contracts and agreements shall be of full force and effect. Therefore, the agreement with the landlord for the grant of lease subsists by virtue of this provision and the question of subletting does not arise. Similarly the rules framed under this Order would clearly indicate that no lease shall be severed without written consent of the' trustee. In case the premises are used jointly for life insurance business and other classes of insurance business, the trustee shall determine the total area of the premises needed for conducting of life insurance business and the rent and tax shall be shared between them. About the apportionment of the rent it was between the appellant and respondent No. 2, the respondent No. 2 does not figure in the picture. It was not the case of respondent No. 1, that no rent is being paid to him. The perusal of the record shows that an appli--cation was moved by the respondent No. 1 himself on 8-3-1979. In this application it is stated", the ground urged in the application is that the premises have been sublet by the respondent No. 2 to the appellant and the proof of the same is that the rent payable by the tenant/respondent No. 1 (respondent No. 2, in this appeal) is actually paid by the respondent No. 2, i.e. The, appellant. Such fact is recorded in the Accounts Books of the respondent No. 2. This was actually so affirmed when Mr. Zaidi an official of the appellant met the applicant. It is thus necessary that Mr. Zaidi to be summoned along with the Accounts Books from the year 1976to date so as his statement be recorded on the basis of those books. Thus the rent was being paid by the appellant to the respondent No. 1 and it was received by the respondent No. 1 without any objection or protest. In view of the fact that tenancy in favour of the appellant; had been created by operation of law, then only concern of the respondent No. 1 was to receive the rent.
The apportionment of the rent between the appellant and respondent of the rent between the appellant and respondent No. 2 was their concern. If the entire amount is being paid by the appellant, there is no ground for filing the application for eviction.
5. Another aspect of the case is that during the continuance of tenancy proceedings on 14-5-1979 they moved an application that they had vacated the premises on 5-4-1979 and since then they had no connection with the same. On the basis of this application it cannot be said that the appellant is occupying the premises without any legal right. They are occupying the same in their own right and by fiction of law. In view of the stated facts, I accept this appeal, set aside the order of eviction passed against the appellant and hold that the application for eviction on the ground of subletting does not lie against the appellant. In view of the legal question involved m the appeal, there would be no order as to cost.