' The dispute relates to property (shop) bearing No, S-19-R-57, Shahrahe-Quaid-i-Azam. Lahore.
The respondent is the transferee of the same. He made an application for ejectment of the appellant from the property in question on the ground that he bona fide needed the same for his personal use and the property had been damaged by the appellant. This application was resisted by the appellant who pleaded that the shop in question was not needed bona fide by the respondent for his personal use and that the property had not been damaged in any manner. The following issues were framed on the basis of the pleadings of the parties :-
(1) Whether the present petition is barred by section 14 of the West Pakistan Urban Rent Restriction Ordinance. 1959? OPR.
(2) Whether the petitioner requires the shop in dispute for his personal and bona fide requirements? OPP.
(3) Whether the respondent made alteration in the shop in dispute, and also by this act has impaired the utility and value of the property is dispute ? OPP.
(4) Whether period of six years from the date of notice under section 30 has expired, if so. What is its effect ? OPD.
(4-A) Whether the notice in question is invalid, if so, with what effect ? OPR.
(5) Relief.
' The issues Nos. 1, 2, 4, and 5 were decided in favour of the respondent and issue No, 3 in favour of the appellant. The order of the Rent Controller was challenged in appeal before the Additional District Judge, Lahore, but the same was rejected by him by his order dated 21st May, 197Q.
' The respondent in para. 4 of his ejectment application stated that he was running a limited concern known as "Mian Motors Limited of which he was the Managing Director and that the office of the Limited concern at present was located at 9-B. Temple Road, Lahore, on account of non- availability of any other suitable place. It was submitted that the property in dispute was suitable for maintaining the office of the limited concern for running the sale and purchase business of the cars. The eject ment application was filed by the respondent in his own name being the exclusive transferee of the shop and was apparently made for the benefit of the said limited concern of which he is the Managing Director.
2. It has been contended by the learned counsel for the appellant that the courts below have erred in holding that there is no legal difference between the respondent-landlord in his personal capacity and the private limited concern known as `Mian Motors' which is a juristic person, being Joint Stock Company and in holding that the need of the juristic person is equivalent to that of the individual. It is further contended that it has been illegally held by the Courts below that the respondent requires the shop in question in good faith for his own use whereas he has submitted the ejectment application for the benefit of the limited concern of which he is a partner. It is contended that the need or the benefit of the limited concern cannot be considered under the law to be need or benefit of its shareholder. It is further contended that the Joint Sock Company has a separate legal entity as against its share-holders and under the law can sue and be sued only in its corporate name. It has been argued that even otherwise the shop in question cannot be got vacated for the use of the said limited concern as the same is having its office at 9-B, Temple Road, Lahore, which is quite sufficient for the purposes of its business It is further contended on behalf of the appellant that both the courts below have erred in not dismissing the ejectment application under section 14 of West Pakistan Urban Rent Restriction Ordinance, 1959.
3. The learned counsel for the respondent contends that the provision as contained in section 13(3)
(ii) of West Pakistan Urban Rent Restriction Ordinance, 1959, should be interpreted fairly, liberally and with the sense of objective realization of facts before the Tribunal. According to him the words 'his own use' should be interpreted to cover the business interest of the landlord as well. It is contended that the words own use' in this provision have been used as distinct from the words 'own occupation' used in section 13(3)(a) of the Act which relates to a residential building.
According to the learned counsel by using the words own use'. In relation to a non-residential building, legislature intends that the landlord may not necessarily physically occupy the premises.
It is submitted that since the respondent is the Managing Director of the Limited concern known as `Mian Motors Limited' and has got a close business interest therein, therefore, if he wants vacation of the premises in question for the use of the said concern it will mean that he wants the same for his own benefit and use as in the case of a private limited company, interest and identity of the concern cannot be separated from that of its shareholders It is further submitted on behalf of the respondent that the findings of the lower Courts with regard to suitability or otherwise of the premises in question for running the business of the respondent is a finding of fact and cannot be gone into in second appeal by this Court.
4. The first question to be seen in this case is as to whether the ejectment application having been filed for the benefit and use of A limited concern known as `Mian Motors Limited' of which the respondent is the Managing Director is competent or not and the relief claimed by the respondent can be granted to him under the provision of section 13(3) (a) (ii) of the Act. In order to appreciate the implications of the said provision it will be better to reproduce the same which reads as follows : 13 (3) (a).-A landlord may apply to the Controller for an order directing the tenant to put the landlord in possession (ii) in the case of a nonresidential building or a scheduled or rented land, if -
(a) he requires it in good faith for his own use or for the use of any of his male children ;
(b) he or his said child is not occupying in the same urban area in which such building is situated for the purpose of his business, any other such building or rented land, as the case may be, suitable for his needs at the time ; and
(c) he has not vacated such a building or rented land, without sufficient cause after the commencement of this Ordinance in the said urban area."
According to law a company is a separate juristic person, distinct and different from its shareholders. It is not a mere alias for its share-holders nor merely an agent for them. Any individual shareholder cannot indemnify the company against debts which it incurred except to the extent of his share in the capital. His liability is limited to that extent and he can only be called upon to contribute in the event of a winding up of the company to the extent of his own share.
Reliance in this respect can be place upon A. Salaman & Cowpony Limited v. Aron Salaman, Aveline Scott Ditcham v. James J. Miller E. B. N. Company Ltd. v. Dominion Bank and Ikram Bus Service and others v. Board of Revenue, West Pakistan etc. In the first case Lord Macnaughten observed as follows : "...The company is at law a different person altogether from the subscribers to the memorandum, and, though it may be that after incorporation the business is precisely the same as it was before, and the same persons are managers, and the same hands receive the profits, the Company is not in law the agent of the subscribers or trustees for them. Nor are the subscribers as members liable, in any shape or form, except to the extent and in the manner provided by the Act."
' This view has been followed in the other authorities referred to above. The facts of the case reported in PLD 1963 SC 564 are that the Regional Transport Authority, Peshawar, invited applications for stage carriage permits for the Naushera-Mardan-Swabi-Topi route. Many persons applied for the grant of route permits but before any decision could be taken by the R. T. A. On their applications the Provincial Government issued instructions that route permits would be given to those persons only who would form public limited companies. The Road Transport Authority ultimately decided that the applications of those persons who had not joined in forming a company stood rejected as applications of individual persons could not be considered in the light of the Government instructions.
' The individuals who did not form any company challenged the decision of the R. T. A. In appeal. It was urged before the appellate authority that the company which had been granted route permits was not an applicant and had not been incorporated till a day after the decision of the R. T. A. The appellate authority, however, allowed six route permits to remain with the newly formed company and the remaining four route permits were given to the individual applicants on the condition that they would form a limited company. The case ultimately came up for hearing before the Supreme Court of Pakistan and it was argued on behalf of the individual applicants that the route permits could not be granted to a company yet to be formed by the individual applicants as the interest of the shareholders is quite distinct from that of a limited company. It was urged on behalf of the route permits holders that in effect the Regional Transport Authority had granted permits to certain individual applicants who had expressed their intention to promote a company and the grant of permits was not to company as such. Arguments advanced on behalf of the route permits holders were not accepted by the Supreme Court, firstly on the ground that the R. T. A. Actually had granted route permits to the company and not to the individuals, secondly the company was a separate juristic person distinct and different from its shareholders. His Lordship Mr. Justice Kaikaus, then Judge of the Supreme Court of Pakistan. In his judgment, held that it was idle to suggest that the grant of the permit in the name of the company was really a grant in favour of the individual applicants who had agreed to promote the company. His Lordship Mr. Justice S. A. Rahman while dealing with this point observed as follows :-1 2 3 4 "It seems open to grave question whether the R. T. A. Could have granted permits as it did, to a company formed out of applicants before it, without the presentation of a formal application by such a company and without going through the procedure envisaged by section 57 of the Act in respect of such an application. There is a distinction between a limited company and its members in law. The promoters of a company may in certain cases act for its benefit even before its incorporation. But in the circumstances of this case it cannot be maintained that some of the applicants before the R. T. A. Were applying on behalf of a company which was incorporated after the date on which the permits was granted to it, especially when some of the members of the company thus formed were non-applicants."
The above discussion would show that' the status and interest of the company is quite distinct from that of its shareholders. The same view was taken in Rai Bahadur.Mohan Singh Oberoi v. Rai Bahadur Jodhar. Mal Kuthalia. It has been held in that case that it is highly queationable whether any share holder of a company can claim to have an interest in any particular piece of property in which the company has an interest unless the company itself is brought into liquidation, and even then the interest is not of a direct nature. The judgment in that case established that howsoever the shareholders may be close to the company, they have no direct interest therein.
6. The learned counsel. For the respondent has relied upon Ladli Prasad Jaiswal v. The Karnal Distillery Co., Ltd., in order to show that a private limited company is in substance a partnership and since in the present case the ejectment application has been made for the benefit of the private limited company of which the respondent is the Managing Director, therefore, his interest is not as such different from that of company. His Lordship Mr. Justice Hamoodur Rahman while .
Dealing with the question of winding up of a private limited company observed that in the case of private limited company the tendency of the Court has uniformaly been to treat it more or less as a partnership and to apply the same principles in the winding up of a private limited company as would entitle a partner to have a partnership firm dissolved. His Lordship further observed that commonly the exclusion of a partner from the management of the firm, the existence of a state of deadlock between the partners or the justifiable lack of confidence in the management have been regarded as just and proper grounds for dissolving a private limited company. The question as to whether a private limited company is a separate juristic person or not and whether its interest is distinct from that of its shareholders was not under discussion in this case. The main question under discussion was at to whether the same principles are applicable or not for the dissolution of a private limited company which are applied for the dissolution of a partnership. As such the observations of the Supreme Court made in this case are not helpful to the respondent. The same point was involved in the case titled Sh. Maqbool Ellahi and two others v. Rasul & Co. Ltd. And two others. The subject-matter of the case relates to winding up of a private limited company. Serious disputes and differences had arisen between the parties and the mutual trust and reliance essential for the smooth running of a company did not exist so much so that directors of the company could not meet for about a year in spite of the three successive meetings of the Board summoned by some of the Directors. In these circumstances the learned Judge of the High Court held that the circumstances were such that prima facie:- "we ought to apply the analogy of the partnership law and to say that this company is now in a state which could not have been contemplated by the parties when the company was formed and which ought to be terminated as soon as possible".
' The question under discussion in the present case did not arise in the case referred to above, and as such this authority also does not lend any support to the respondent.
6-A. The contention of the learned counsel for the respondent that since a shareholder has close identity with the interest of the company and their interests are interlinked with each other, therefore, irrespective of the fact c that a company is a separate juristic person, interest of its5 6 7 shareholders cannot be separated from that, has no substance. The ejectment application in the present case has been admittedly filed for the benefit of the limited concern of which the respondent is the Managing Director. The learned counsel for the respondent has contended that the words "his own use" incorporated in Section 13 (3) (ii) (z.) do not debar the respondent from getting the premises in question vacated for the use of the company whose interests are closely linked with that of the respondent. It is contended that the word 'use' as incorporated in this provision does not contemplate the physical occupation, rather on the contrary if the premises are used by another person for the benefit of the respondent it will not mean that they are not being used by him, himself. I am afraid the arguments raised; above have no force. The word 'use' incorporated in sub-para. 'a', asi mentioned above, in relation to a non-residential building cannot be read! Separately from the word 'occupying' incorporated in sub-para 'b' of the D said para and further from the word 'possession' incorporated in the proviso to the sub-para. A landlord cannot be said to require in good faith for his own use any non-residential building if he or any of his male children is occupying in the same urban area in which such non-residential building is situated any other such building for the purpose of his business. It means that incorporation of the words 'use' and 'occupation' in the said sub-paras contemplate occupation on personal level and not for the benefit of any other person. The word 'use' read with the words 'his own' in section 13 (3) (ii) (a) means that a landlord should require a non-residential building for his own person and not for the person of any body else. In the present case the vacation of the premises in question is sought for accommodating E another person i,e, Mian Motors Limited and not the respondent himself. As found in the above discussion a private limited company is a separate juristic person and that being so the premises in question cannot be got vacated for the use of another person i,e, Mian Motors Limited. According to the Chambers 20th Century Dictionary the word 'own' means belonging to oneself or transferring the sense of self to the subject, and according to the same dictionary the word 'use' means an act of using or putting to a purpose. Thus it would mean that the landlord would use the premises himself and will not allow the same to be used by any other person. The provision as referred to above does not contemplate the use of a residential building by a person other than the landlord himself or by his male children. Similarly the law does not allow the use of a non-residential building except by the landlord himself or by his male children. If any F other interpretation is put on this provision then the same will lead to confusion. The 'use' contemplated by the provision is either the personal use of the landlord or for the beneficiaries of the premises as provided in the law. As discussed above the beneficiaries in context of the present case would be the male children of the respondent. This view gains strength from Rust am Khudadad v. Arakan Furniture Mart According to the facts of the case two nephews of the landlord had lost their father and his anxiety was to make provision for their livelihood. He, therefore, made an application under section 10 of Karachi Rent Restriction Act (VIII of 1953), a corresponding provision to the present one under discussion, for the ejectment of the tenant so that his two nephews could be accommodated in the business premises. Section 10 of the Karachi Rent Restriction Act provided that a landlord may reasonably and in good faith require the premises for his own use or for the use of any person for whose benefit the premises are held. The case of the landlord before the High Court was that the desire of settling his nephews could reasonably construe as requiring the premises for his own use. The contention was repelled and it was held that it would be straining the language of the provision to produce any such result as the use contemplated by the provision was either the personal use of the landlord or for the beneficiaries of the premises. The learned Judges held that the case of the landlord fell in neither of these two categories.
6. It has been argued that if the use of the business premises is allowed to be made only by the landlord or by his male children in the case of eject ment of a tenant then the scope of the word8 'use' as contemplated by law would be narrowed down. It is contended that after the ejectment of a tenant under the present provision, a landlord is not debarred from entering into partnership with another person for carrying on the business in the premises. It may be so as in that case the landlord would get the tenant ejected in order to personally use the premises and if he while using or occupying the premises enters into partnership with another person it would not mean that he has given up the use of the premises. In the present case the ejectment is sought for the sake of another person who will occupy the business premises and not the respondent himself in his individual capacity. The learned counsel for the respondent has relied upon Adamali Hasanali v.
Mst. Rubab Bai and the decision of this case in Letters Patent Appeal in order to show that the words for his own occupation' which occur in paragraph (a) of Section 13 of West Pakistan Urban Rent Restriction Ordinance, 1959, include all genuine requirements of the landlord and should not be resticted to the requirement of a shelter for his own body and the body of his children. It is argued that the needs may differ from landlord to landlord and some of those which may be genuine in one case may not be so in another case. According to the learned counsel the words 'for his own use' should be similarly construed liberally and must be interpreted to include not only the need of family dependants and persons essential for such occupation but also all other genuine requirements of landlord. According to him the genuine needs of landlord depends on the circumstances and facts of each case. It is contended that the genuine needs and requirements of the respondent for getting the premises in question vacated for the benefit of the limited concern of which he is the Managing Director should be taken into consideration. There may not be any dispute with regard to the fact that the genuineness or otherwise of the need and requirements of the landlord may be examined in context of the circumstances of each case.
The facts of the case relied upon by the learned counsel show that the landlady had applied for getting the residential building vacated on the ground that she needed the same for herself and her ailing husband. It was not the case of the landlady that her ailing husband alone would reside in the building. Her case was that she being the owner of the building would move to the same and live there with her ailing husband so that she may properly look after him, as the accommodation in the building where she was putting up already was too small and was not good for the health of her ailing husband. This is not the position in the present case. The landlord, himself does not want to use the premises in question but wants the vacation of the same for the benefit of another person which is not permissible in law. This view also gains strength from Mumtaz Humayun v.
Major Habib-ur-Rehman. In this case the landlord sought the ejectment of the tenant on the ground that he required the house for the benefit of his widowed mother who was disabled and whom he wanted to put up in a separate premises. It was held that the tenant could not be ejected for the purpose as advanced by the landlord as the widowed mother was. Not one of the beneficiaries as provided by law for whose benefit the house can be gDt vacated by a landlord.
Reliance can also be placed in this respect upon Abdullha Baloch v. Adam Ali. In that case it was held by the Supreme Court that the requirement for the use of the brother of the landlord would not satisfy the provision of section 10 (2) (c) (ii) of Karachi Rent Restriction Act of 1958.
8. The learned counsel has further relied upon Agha Muhammad Ilyas v. Masjid Committee, Rahimyar Khan, in order to show that the word 'occupation' as used in the relevant provision as discussed above, is not synonymous with the word 'residence' as a warehouse in which the goods belonging to a person may be stored wilt be considered to be in his occupation though he need not necessarily be residing in it. The learned counsel contends while relying upon this authority that the expression `for his own use' employed in section 13 of the Ordinance has got to be interpreted fairly liberally and with a sense of objective realization of the facts. The facts of the case are that the Masjid Committee, Canal Colony, Rahimyar Khan through its President filed an application under section 13 of the West Pakistan Urban Rent Restriction Ordinance, 1959, for the ejectment of9 10 3 12 the tenant from the house in dispute. It was alleged in the application that the house belonged to the Mosque, its management vested in the Masjid Committee, the house was let out on rent to the tenant and was in good faith required for the use by the Khatib of the mosque. It was contended before the High Court that under the law the tenant could not be ejected from the residential portion to be used by the Imam of the mosque as the house could be got vacated by the landlord for his own occupation or for the occupation of his children alone. It was held by the learned Judge that a premises genuinely needed by an association in order to fulfil the aims and objects for which it is established, may be considered, to be required for his own occupation. It was further held that where ejectment of a person from residential part of a mosque was sought for the purpose of using the same by the Khatib of the mosque, the house was wanted by the mosque for its purposes and must be considered to be required by the mosque and its Managing Committee for its own occupation. In that case the Masjid Committee being the landlord had sought eviction of the tenant for accommodating Khatib of the mosque. The application had been filed on behalf of the mosque and Khatib being integral part of the same could not be separated from it as held by the learned Judge in the case. In the present case the ejectment application has been made for the benefit of another person. This was not the position in the case cited above where the ejectment application had been made for benefit of the mosque which owned the property.
Another case relied upon by the respondent is Abdul Majid v. State. The meanings of the word .Use' as given in para 4 of the judgment of the case with reference to page 469 of "A New English Dictionary of Historical Principle, Volume 10, Part I" is as follows :- "...The a of employing a thing for and (especially a preamble) purpose, the fact, state or condition or being so employed utilization or employment for or with some aim or purpose, application or conversion to some (especially good or useful) end, the character, property or quality which makes a thing useful or suitable for some purpose, capability for securing some end, usefulness, utility advantage, benefit."
' The learned counsel by citing this authority has tried to show that if the premises in question are used after vacation for the benefit, advantage and utility of the respondent landlord then it would mean that they are being used by him himself. I an afraid his argument has no force. Here the, meanings of the word 'use' alone have been given without taking into consideration the significance of the words 'his own' as prefixed in the relevant provision of the Ordinance before the word 'use'. The words 'his own' as discussed above would show that it is the personal use of the landlord on the basis of which ejectment of a tenant can be sought. As such this authority does not help the respondent.
9. The significance and interpretation of the words 'for his own use' occurring in section 13 (3) (a)
(ii) of the Ordinance came under discussion in Dr. Miss 1. Ali Muhammad v. Muhammad Shafiq.
The landlady Dr. Miss I. Ali Muhammad had sought ejectment of the tenant from the shop owned by her in Shah Alam Market, Lahore, on the ground that she required it in good faith for her own use to run a clinic therein. This application was opposed by the tenant but the Rent Controller gave the finding that the shop in dispute was required in good faith by the landlord for her own use and accordingly ejectment order was passed against the tenant. This order was, however, reversed in appeal by the learned District Judge, Lahore. The second appeal filed by the landlady also failed.
However, after the judgment of the High Court in the Second Appeal the landlady created a trust in respect of her properties including the shop in question by a registered deed dated 20th of November, 1969, and appointed herself as the first trustee. The fact with regard to the creation of this trust and the consequential change in her status was not disclosed in the petition for special leave to appeal before the Supreme Court. It was contended by the learned counsel for the tenant before the Supreme Court that with the creation of the trust the sole ground for ejectment of the tenant namely the requirement of the shop in question in good faith for landlady's own use13 14 disappeared for the reason that the establishment and running of a clinic by the landlady in the said shop would not be a purpose of the trust or enure to its benefit. It was further contended by the counsel that the words `for his own use' mean the landlord's own use. i,e, the use by the landlord as such. Since Dr. Miss I. Ali Muhammad in her capacity as trustee became the landlady with the creation of the trust, the requirement of the disputed shop for running the second clinic by her for her own purpose cannot be said to be the requirement of the shop for the trustee as landlady. This contention of the learned counsel was accepted. The Supreme Court held as follows :- "The running of a second clinic in the disputed shop by the appellant in her individual capacity will benefit herself alone and will not enure to the benefit of the trust. Nor can the running of a clinic in the disputed shop be a purpose of the trust. Far from augmenting the trust to any extent, the use of the disputed shop for the appellant's personal use as a clinic will rather cause harm to the trust in that the trust would be deprived of the monthly rental of Rs, 150 payable by the tenant for the shop.
It is conceivable that the trustee, as landlord, may require the disputed shop for the use of the trust, say, for setting up of an office of the trust, itself. In such a case, the use of the shop will be the trustee-landlord's own use. Here, however, the appellant, in her individual capacity, required the disputed shop for her own use as a clinic and that requirement is still the basis for claiming ejectment. The trust is not, in any way, concerned with the running of a clinic by the appellant in her individual capacity. Accordingly although the appellant as trustee is still the landlord, the requirement of the shop for her use as a clinic cannot be said to be a requirement of the shop for the use of the trustee as landlord."
' The above discussion would show that since the status of the landlady was changed during the pendency of the litigation and the vacation of the shop in question could not be deemed for her own use or benefit, therefore. The ejectment of the tenant was refused on this ground. It was urged on behalf of the landlady before the Supreme Court that the ground for ejectment being bona fide requirement of the disputed shop for the landlady's own use and trustee being covered by the definition of landlord in section 2 (c) of the Ordinance the requirement of the shop either for the appellant's personal use or for the use of the shop by the trustee as such will be a valid ground for ejectment. This argument was not accepted by the Supreme Court mainly on the ground that the status of the landlady had since changed and she no more required the shop for her own use in her individual capacity.
10. In the present case since the ejectment application has been filed by the respondent for the benefit of another person and he himself is not to use the shop in question, therefore, the application being not maintainable in law is liable to be dismissed. The learned counsel for both the parties have raised many other contentions but I do not consider it necessary to deal with them at this stage as the fate of the case has been decided without taking them into consideration.
12. As a result of the above discussion the appeal is accepted and the impugned orders are hereby set aside being illegal and of no legal effect. The costs of the case will be borne by the respondent.
1897 A C 22 AIR 1931 P C 203 AIR 1937 P C 279 p L D 1963 SC 564 P D 1961 SC 6 PLD 1965 SC 221 PLD 1970 Lah. 539 PLD 1962 Kar. 791 2 3 4 5 6 7 8 PLD 1965 Kar. 408 PLD 1969 Lah. 886 PLD 1961 SC 28 PLD 1968 Lah. 863 PLD 1963 Lah. 292 PLD 1971 SC 494