' The facts leading to this appeal in brief are that the appellant is the tenant, of the shop in question at the monthly rental of Rs,
174. The respondent sled an application for the eviction of the appellant on 16-12-1976 On the ground of non-payment of rent from April, 1976. The application was contested by the appellant. The learned Rent Controller made a direction within the meaning of section 13(6) of Ordinance VI of 1959, on 6-5-1977, to deposit the arrears from April, 1976 to 30-4- 1977 at the rate of Rs, 174 per month amounting to Rs, 2,262 and also to pay future rent before 15th of each succeeding month. The arrears of rent were to be deposited before next date of hearing.
The case was adjourned to 9-6-1977 for framing of issues. The case was adjourned from time to time, and evidence was also recorded by the learned Controller. On 12-11-1980, the respondent/Landlord moved an application for striking off the defence of the appellant, as he had failed to comply with the direction made to him under section 13(6Y of the Ordinance. According to this application, the appellant had not deposited the rent in the Court, as directed by the Controller under section 13(6). This application was resisted by the appellant, and it was stated that the amount having been paid to the applicant/landlord till March 1980 at the rate of Rs, 174 per month and thereafter under fresh agreement, whereby the rent was enhanced to Rs, 217.50 per month, till January 1981. It was further stated that the amount was paid on the request of the landlord that be found it difficult in withdrawing the same from the Court. It was also stated that after the rent was enhanced, the applicant had assured the appellant, that be would withdraw the application for eviction. It is the case of the appellant, that on the request of landlord the rent was directly paid to him, instead of depositing the same in the Court.
2. Before the learned Rent Controller it was conceded by the learned counsel for the respondent landlord that it was agreed by the parties that the appellant may tender the rent direct to the respondent, instead of depositing the same in the Court. It was also admitted by the landlord that the rent for the premises in dispute was enhanced to Rs, 217.50 with effect from April 1980. The appellant had filed 33 receipts issued by the landlord. The learned Rent Controller came to the conclusion that the arrears of rent were paid in time to the applicant, but he bad committed default in respect of the months of June 1977, April 1980 and December 1980 ; as be had not paid the rent, within the stipulated period, as mentioned in the order under section 13(6) of Ordinance, 1959. In such circumstances the learned Controller struck off the defence of the appellant, and made direction for his eviction.
3. I have heard the learned counsel for the parties.
4. The learned counsel for the appellant has stated that the appellant had at the inception of the tenancy kept an amount of Rs, 900 in deposit with the landlord ; which could be adjusted. The appellant has not taken this point either in the written statement, or in the reply to the application made by the respondent for striking off the defence of -the appellant. The learned counsel for the respondent/landlord has stated that this ground was not taken and lease deed has also not been placed on the file, therefore, he is unable to state whether such amount was lying with the landlord and adjustable against the rent. In such circumstances, it is not possible to record any finding in favour of the appellant.
5. The learned counsel for the appellant has stated that the appellant has made payment of the amount through cheques to the landlord and no default has been committed, therefore, the finding of the learned Controller that the appellant has committed the default is not correct. As, stated above the learned Rent Controller came to the conclusion that the appellant had committed default in respect of the months June, 1977, April, 1980 and December 1980. I do not agree with the Controller that such default has been committed. The photostat copies of the receipts issued by the landlord are placed on record. The rent for June, 1977 was paid through cheque dated 5-7-1977 ; but the receipt has been issued on 21-7-1977. The rent for the months of April and May, 1980 was paid through cheque on 14-5-1980, but the receipt is dated 15-5-1980. The rent for the months of December 1980 and January 1980 was paid through cheque dated 9-2-1981 and the receipt was issued on the same day. Before we examine the question whether the payment has been made in accordance with the direction of the Controller, it is necessary to dispose of the objection of the learned counsel for the respondent that the payment through cheques could not be made to the landlord and as such the payments cannot be considered as payment in accordance with section 13(6) of Ordinance. It is contended by the learned counsel for the respondent that it was the duty of the appellant to deposit the rent in the Court of Controller and as he has failed to do so, therefore, the payment through cheques cannot be taken into consideration and the default of the appellant stands established. The learned counsel has referred to Messrs People Steel Mills, Karachi v. Hafizuddin and others (1) wherein it has been observed that "presentation of cheque may be considered a valid payment in contractual liability but not in statutory liability as contemplated under section 13(6) of the Ordinance." The leading case on this point is Sarfaraz Khan v. Muhammad Abdul Rauf (2) wherein the entire case-law was considered by the eminent Judge and it was held :- "If deposit is made in the Controller's Office by cheque and payment on this cheque is received by the Controller, then the tenant cannot be deemed to be in default, unless the deposit of the cheque itself was made after the expiry of the date prescribed in the Controller's order. This would be correct and sensible approach to the question of valid or invalid payments of rent and arrears to the landlord or to the Controller under section 13(6) of the Ordinance."
' Sarfaraz Khan's case was considered in People Steel Mills case, but it was not dissented with. Even otherwise it was not held in this case that payment through cheques is not a legal tender, In this context the following observation is relevant :- "This Ordinance does allow payment of rent by cheque as between landlord and tenants as stated above but does not allow such mode of {{FOOT NOTE}}
(1) PLD 1981 Kar. 739 (2) PLD 1969 Kar. 176 {{FOOT NOTE}} payment under section 13(6). In these circumstances it can be said that in compliance of the tentative rent order if the payment of rent is made by the tenant by way of cheque and that is accepted and the cheque is honoured and no objection is raised then it is valid tender otherwise if the cheque is dishonoured or objection is raised to such mode of payment then the tender will not be considered as valid and the tenant will be liable for default."
' In the present case no objection about the payment of rent through cheques has ever been raised by the respondent :- On the other hand it was at the instance of the respondent that payments have been made through cheques. In my humble view the dictum laid down in the case reported in PLD 1969 Kar.
176 is the correct enunciation of law on this point, and no second view is possible. In Deputy Commissioner of Partabgarh v. Puran Chand Har Narain AIR 1938 All. 15 it has been held :-- "Ordinary payment of money by cheque or voucher need not be a valid tender and the same may be received subject to being honoured later by the bank or the treasury. But where the voucher has been accepted by the creditor and presented at the treasury and would have been cashed but for the mistake in the endorsement due to want of care on the part of the creditor, there is a valid tender by the debtor when the voucher is accepted by the creditor."
In the present case in spite of the fact that a direction was made by the Controller under section 13(6) of the Ordinance to deposit the rent in the Court, but the parties had mutually agreed that the rent would be paid by the appellant direct to the landlord. The contention of the appellant has not been disputed that this practice has been adopted for the convenience of the landlord. The landlord had accepted the payments. Such payments would be deemed to be sufficient compliance of the order of the Rent Controller. Similarly as the respondent/landlord had accepted the payment through cheques without any objection and those cheques have not been dishonoured, therefore, it would be considered a valid and legal tender. The landlord cannot subsequently turn somersault that payment should not have been made through cheques. The respondent is estopped to take objection about the payment of rent direct to him. The order under section 13(6) was passed on 6-5-1977. The appellant started making payment to the respondent after this direction was made. 35 receipts have been issued by the respondent. Most of the payments have been made through cheques.
6. The next question which fails for determination is whether the rent had been paid on the specified date as mentioned in the order of Controller? The learned counsel for the respondent has stated that the payment would be considered from the date of receipts. It has not been disputed by the respondent that the cheques were delivered to the respondent on the dates mentioned in the cheques. If we accept the dates of the cheques, then the rent for the months of June 1977 was paid in time. Similarly the rent for the month of April and May 1980 had been paid in time. The payments would be considered from the date of cheque as held in Commissioner of Income-tax, Bombay v. Messrs Ogal Glass Works Ltd. (1) it has been observed :- "The position, therefore, is that in view of the matter there was, in the circumstances of this case, an implied agreement under which the {{FOOT NOTE}}
(1) AIR 1954 SC 429 {{FOOT NOTE}} cheques were accepted unconditionally as payment and on another view, even if the cheques were taken conditionally, the cheques not having been dishonoured but having been cashed the payment related back to the dates of receipt of the cheques and in law the dates of payments were the dates of the delivery of the cheques."
' The rent for the month of December was to be paid on or before 15-1-1981 but as the Courts were closed for winter vacation it should have been deposited on the opening of the Court i,e, 1-2-1981 ; but the rent has been deposited on 9-2-1981. In view of the fact that there was winter vacation in January and the appellant was regular in making payment, this delay of 8 days in the circumstance is condonable. In this behalf I rely on the case Sarfaraz Khan v. Muhammad Abdul Raul (1) referred to above and it has been observed "I am therefore of the opinion that the tenant should be deemed to have tendered arrears on 25th August, 1964, and the rent for August 1964. On 4th September 1964,' on which dates the cheques were received by the Chief Ministerial Officer, As I have already held, the tender of cheque for arrears on 25th August 1964, instead of before this date, was due 6 a bona fide mistake and this cannot, therefore, be made a ground to hold that the appellant should be deemed to be in default in complying with the Controller's order under section 13(6) of the aforesaid Ordinance."
' The learned counsel for the respondent has referred to Sh. Maqbool Ahmed v. Muhammad Akbar Ali (2), but this authority does not support the contention of the respondent that the payment could not be made directly to the landlord. It has been observed that tender of rent by the tenant directly to the landlord before specified date is not a default in compliance of order of Rent Controller. In the same authority it has been observed "failure simpliciter without any such implication of the fault, itself may not be treated in the given circumstances as a default. In the present case the appellant did not commit any default by tendering rent to the landlord instead of depositing it with the Controller. The facts narrated above would clearly indicate that the appellant was not negligent and the respondent had accepted the payment without any objection or protest.
Therefore, the reasonable conclusion is that the appellant had not committed any default for the month of December 1980.
6. There is another aspect of the case. During pendency of the proceedings, there was a fresh agreement between the parties, whereby, the appellant agreed to enhance the rent in the first week of July 1980 at the rate of Rs, 217.50 per month, in place of Rs, 170, with effect from April, 1980.
The respondent received the balance amount at the rate of Rs, 43.50 for the months of April and May and the full rent of Rs, 217.50 for the month of June 1980 by one receipt dated 8-7-1980.
Thereafter the appellant paid the rent regularly to the respondent at the revised rate of Rs, 217.50.
The learned counsel for the respondent had admitted that the rent was increased to Rs, 217.0 with effect from April 1980 and the rent at the increased rate had been received by the respondent. The learned counsel for the respondent has stated that as per agreement the appellant was liable to pay the rent at the enhanced rate, but he was also liable to deposit the rent with the Controller at the rate of Rs, 174.00 per month, as per his directions. The learned counsel conceded that there would be non-compliance of the order, {{FOOT NOTE}}
(1) PLD 1969 Kar. 176 (2) PLD 1978 Lab. 28 {{FOOT NOTE}} in case the appellant did not deposit the rent at the rate of Rs, 174.00, and his defence had to be struck off if he has failed to comply with the order of Controller ; but nevertheless the payment received by the landlord at the rate of Rs, 217.50 is a valid payment and this amount cannot be adjusted. This contention has no substance. The respondent cannot be allowed to take double benefit. According to this contention the tenant had to deposit the rent with the Controller at the rate of Rs, 174.50 and at the same time he ha to make payment to the landlord at the increased rate. This would amount to be a double jeopardy. The respondent had received the rent at the enhanced rate of Rs, 43.50 per month with effect from April 1980 to November, 1980 which comes to Rs, 348. Thus the appellant had complied with the order of Controller by making payments in advance. The rent for the months of November and December 1980 and January 1980 had been paid in advance, at the rate of Rs, 174 p.m. In view of the above facts his defence cannot be struck off.
8. After the rent was increased from Rs, 174 to Rs, 217.50 with effect from 1980, the direction of the Controller at the rate of Rs, 174 was no more D effectual and has been rendered redundant by the conduct of the parties.
9. The learned counsel for the appellant has stated that the application moved by the respondent for the eviction of the appellant was liable to be dismissed in view of the settlement made between the parties whereby the rent was enhanced and fresh tenancy created. The learned counsel for the respondent has disputed that the fresh tenancy was created ; but it is an accepted proposition that the rent was enhanced. The legal position is that the rent may be fixed by the agreement of the parties, and in case there is a dispute the fair rent is to be determined by the Controller under section 4 of the Urban Rent Restriction Ordinance. No landlord is entitled to claim anything in excess of fair rent. In the present case the parties mutually agreed to increase rent and thus the cause of action accrued to the respondent no more subsisted. The application had become infructuous after the E parties entered into fresh tenancy and the landlord received the rent at the enhanced rate. The attorney of the appellant A/3 in his statement states that the notices had been issued to tenants for increase of rent, at the rate of 25%, in accordance with the notification made in the Baluchistan Gazette. By the substitution of section 4 in the Ordinance VI of 1959 (Vide Ordinance No, III of 1980) a maximum increase of the rent payable by the tenant was not to be more than 25% of the rent already being paid. But this increase can only be done by the Controller on the application of landlord. This increase cannot be made by the landlord of his own accord. He has to move the F Controller for such relief. In case the parties themselves entered into an agreement to enhance the rent, then it is a valid agreement ; because it has been done without the intervention of the Court. The respondent started receiving rent at the enhanced rent, therefore, fresh tenancy has started. The application for the eviction of the appellant on the ground of non- payment of rent does not subsist. The cause of action has ended after the execution of the fresh tenancy between the parties. The contention of the appellant has not been repudiated that the respondent had assured that he would withdraw the application.
' The upshot of the above discussion is that application for eviction was liable to be dismissed after the parties had entered into fresh agreement of tenancy. On this count also the appeal has to be accepted, ' In the result, the appeal is accepted, the order of Rent Controller is set aside and the application was not maintainable after the fresh tenancy had started. There would be no order as to costs.