In this case Rent Application No, 1079/72 was filed on 8th May, 1972 by Mst. Alqab Begum, the respondent/landlady, before the Rent Controller, Karachi, against the tenant S. A. Zaman for ejectment on the ground of default in the payment of rent for the months of February, March, April and May, 1972. It may be mentioned here that during the proceedings the tenant S. A. Zaman died and the appellants before this Court are the legal representatives of the tenant S. A. Zaman. In the Rent Application, the respondent/landlady relied upon a rent agreement dated 1st April, 1961 entered into between the parties for 11 months. According to the said Rent Agreement, rent was payable in advance, and although the Rent Agreement was not renewed, according to the respondent, the tenancy continued after expiry of the Rent Agreement, and as the rent was payable in advance, on 8th May, 1972, when the Rent Application was filed, there was a default in the payment of rent for four months i. e. From February to May, 1972 by the tenant. Even otherwise it was averred that there was a default in the payment of rent for the month of February, 1972 if the tenant was treated as a statutory tenant. Written Statement was filed by the tenant on 30th May, 1972 in which the tenancy and the rate of rent was admitted. Default was, however, denied and it was pleaded that the tenancy agreement had ceased after the expiry of the 11 months' period of the lease. It was further pleaded that payment was being 'made in lump sum for several months together and that the landlady did not accept rent for three months. It was further averred that a sum of Rs, 785 was spent on repairs which was liable to be adjusted, and finally that a sum of Rs, 1,125 was lying in deposit with the respondent; landlady which was given to the landlady at the time of the agreement dated 1st April, 1961 and that after adjustment of this amount there was no default at all. The Rent Application was allowed and ejectment of the tenant ordered by order dated 31st August, 1974 of the Rent Controller. The appellants filed a First Rent Appeal No, 474/74 which was dismissed by the learned II Additional District Judge, Karachi by his order dated 1st February, 1979. The appellants then filed the present IInd Appeal which was initially dismissed in limine on 24th March, 1979 by a learned Single Judge of this Court but then a Review Application (C.
M. A. 9 of 1979) was filed on 16th April, 1979 which was admitted and notice was issued to the respondent. After a full hearing, in which counsel for bot parties participated, the Review Application was allowed by order dated 8th March, 1980 and the present IInd appeal was. Admitted to regular hearing.
2. I have heard Mr. Akhtar Mahmud Khan, learned counsel for the appellants and Mr. Naimur Rahman Khan, learned counsel for the respondent. Learned counsel for the appellants first invited my attention to the contents of the Rent Agreement dated 1st April, 1961 and specifically relied upon paragraphs 4, 5 & 9 thereon which are reproduced here :- "(4) That the Lessee has deposited a sum of Rs,-1,125 (Rupees one thousand one hundred twenty- five only) with the Lessor which will remain with the Lessor as Deposit and which is refundable. But the Lessee shall not be entitled to demand this amount during the period of Lease.
(5) That the Lessor shall refund this amount on the expiry of this Lease deed after deducting all her dues, i. e. Any arrears of lease money, major repair charges or any amount due to the Lessor on account of major damages to the property and any other dues.
(9) That the Lessee shall pay the monthly rentals to the Lessors regularly on the first of each month.
In case of default for 3 months the Lessor will be at liberty to eject the Lessee by giving a notice for 30 days and enter into possession of the premises."
' It was then contended by learned counsel for the appellants that after the expiry of the Rent Agreement dated 1st April, 1961 the tenant became a statutory tenant and the covenants of the Rent Agreement no longer remained applicable to the tenant and that the security deposit of Rs, 1,125 was adjustable against the rent and that if this amount was adjusted against the rent, there would be no default on the part of the tenant, as in that case, the Agreement having expired and the statutory tenancy having commenced. The period of 60 days for payment of the rent due would become applicable. Now this security deposit of Rs, 1,125 is admitted and Mr. Naimur Rehman, learned counsel for the respondent, frankly admitted that this amount was still lying with the respondent. Mr. Akhtar Mahmud Khan, learned counsel for the appellant, relied upon the case of Muhammad Yousaf v. Abdullah decided by the Supreme Court of Pakistan. I find that the facts of the aforesaid Supreme Court case are similar to that of the instant case and the Supreme Court at page 306 of the said report observed as follows :- "As, in our opinion, the rights and liabilities of the appellant, in the instant case, are governed exclusively by the said Ordinance, the question of the amount of rent due from him has to be determined in accordance with the provisions of clause (1) of subsection (2) of section 13 of the Ordinance. Under this clause, a tenant has to pay the rent due from him "within fifteen days of the expiry of the time fixed in the agreement of tenancy with his landlord or in the absence of any such agreement within sixty days from the period for which the rent is payable." The words "the agreement of tenancy" mean an agreement which is in force, and not an agreement which has expired and is dead. Therefore, in the instant case, when the respondent filed his eviction application on the 9th of May, 1970, the appellant was in default in the payment of rent for the month of December, 1969, and for the months of January and February, 1970. The rent thus due from him was Rs, 600. But, as against this, the respondent had failed to return to the appellant the "security deposit" of Rs, 1,000 despite the expiry of the lease agreement. The respondent was no doubt entitled to deduct the electricity charges before returning this amount, but even after deducting these charges, the amount lying with him for exceeded Rs, 600.1 ' It is true that the appellant had not demanded the return of his deposit on the expiry of his lease, and further as the debtor, it was for him to find the creditor, therefore, he should have informed the respondent to adjust the arrears of rent against his deposit with the respondent. This he did not do, but even on the footings that this resulted in a failure to pay rent within the meaning of section 13 of the said Ordinance, it was a very technical default and it would reduce the law to a farce, if the respondent was evicted for being in debt to the respondent (on account of his failure to pay rent) when in fact the overall position was that the respondent was in debt to the appellant. Therefore, there could not be a more appropriate case for the exercise of the Court's discretion under section 13 of the said Ordinance in the tenant's favour. Accordingly, even on the footing that the appellant was in technical default in the payment of rent on the date of eviction application filed against him, we have no hesitation in exercising our discretion in his favour. We, therefore, set aside the eviction order passed by the three Courts below and allow the appellant's appeal. However, as the appeal turned on a question of law which had not been decided by this Court, we leave the parties to bear their own costs."
In my view the facts in the aforesaid Supreme Court case are similar to the instant case and as it is admitted that an amount of Rs, 1,125 is lying' in deposit with the respondent, if that amount is adjusted there would be no default at all. In view of the Supreme Court judgment, after the expiry, of the lease period, the tenant became a statutory tenant and no longer remained a contractual tenant. I may mention here that the two lower Tribunals had relied upon the case of Muhammad Ashraf v. Muhammad Sharif where a Division Bench of the Lahore High Court had held that a tenant holding over after termination of the lease period must be deemed to be governed by terms and conditions applicable under the agreement of tenancy which had terminated. However, in the aforesaid Supreme Court case reported in PLD 1980 SC 298 this decision of the Lahore High Court in PLD 1971 Lah. 610 was specifically overruled. Mr. Naim-ur-Rehman, learned counsel for the respondent, however, relied upon the case of Alif Din v. Khadim Hussain in which the Supreme Court had held that a tenant continuing in occupation of property after termination of the tenancy remains subject to the terms of the lease agreement and approved the aforesaid Division Bench decision reported in PLD 1971 Lah.
610. The position, therefore, is that on the point in question there are two decisions, one reported in PLD 1980 SC 298 relied upon by Mr. Akhtar Mahmud Khan, learned counsel for the appellants, and the other taking a different view reported in 1980 SCMR 767 and relied upon by Mr. Naim-ur- Rehman, learned counsel for the respondent. In this connection 1 may refer to a recent decision of a learned Single Judge of this Court (Ajmal Mian, J.) in the case of Amir Ali v. Alima Ahmed where a similar situation had arisen and the learned Single Judge of this Court came to the following conclusion at page 153 of the report :- "(4) (b) Before taking up the contentions raised by the learned counsel for the appellants, it will be necessary to deal with the contention the learned counsel for the respondent that the appellant under clause (4) of the Tenancy Agreement dated 1st September, 1968 Exh.
6. Was obliged to pay rent in advance by 5th of each month as it will be relevant for the purpose of determining the question, as to whether in the instant case the issue of default is to be dealt with on the basis of the terms of the above agreement or on the basis as if there was no agreement. In support of the above contention Mr. Muhammad Ali Sayeed has referred to the case of Alif Din v.
Khadim Hussain 1980 SCMR 767, in which Anwarul Haq, C. J. And Nasim Hasan Shah, J. Held that a tenant continuing to occupation of property after termination of the tenancy remains subject to the terms of the lease deed/agreement, and approved a D. B. Lahore case, namely, Muhammad Ashraf v. Muhammad Sharif and 3 others PLD 1971 Lah. 610 in which the same view found favour with a Division Bench comprising of the present Chief Justice of Pakistan and Mr. Justice Sardar Muhammad Iqbal. The above rulings support the contention of Mr. Muhammad Ali Sayeed.2 3 4 However, a larger Bench of the Supreme Court has recently taken a contrary view in the case of Muhammad Yousuf v. Abdullah PLD 1980 SC 298, in Civil Appeal No, K-90 of 1978 (decided on 30th August, 1980), wherein the majority view comprising of Dorab Patel, Muhammad Haleem and Abdul Kadir Shaikh, JJ. Was that upon the expiry of the period of lease/tenancy agreement the tenant becomes a statutory tenant under the Rent Restriction Ordinance and that the terms and conditions of the lease/tenancy agreement cease to apply. Whereas, Naseem Hasan Shah, J.
Concurred with the conclusion arrived at on merits, but dissented from majority view on the question of correctness of the aforesaid Lahore case of 1971 and held that the same was correctly decided. In other words Mr. Justice Naseem Hasan Shah, J. Adhered to the view taken in the aforesaid earlier Supreme Court, case, namely Alif Din v. Khadim Hussain. Since the case of Muhammad Yousuf v. Abdullah has been decided subsequently by a larger Bench, I am bound to follow the latter case. In fact I had followed the aforesaid judgment of the Supreme Court recently in first Rent Appeal No, 23 of 1980, decided by me on 8th November, 1980. In this view of the matter the contention of the learned counsel for the respondent that the appellant was obliged to pay monthly rent in advance by 5th of each month because of clause (4) of the expired agreement dated 1st September, 1968 Exh. 6 is untenable."
' The learned Single Judge of this Court in the aforesaid case followed the view of the Supreme Court in PLD 1980 SC 298 in preference to the other view taken in 1980 SCMR 854 for two reasons, namely, the first case was decided later and that it was decided by a larger Bench than the second case. I am in respectful agreement with Ajmal Mian, J. That the view that prevails and that has to be followed is that taken in PLD 1980 SC 298.
3. Even otherwise the respondent has no case for default in the payment of rent on the part of the appellant. Even if it is presumed that the terms and conditions contained in the Agreement dated 1st April, 1961 continued to bind the parties, clause 9 of the Rent Agreement would give a cause to the respondent for filing a case for ejectment of the tenant only if there was a default for three months followed by a notice for 30 days given by the respondent to the tenant. As observed earlier, the Rent Application was filed on 8th May, 1972 and it was alleged that there was a default for February, March, April and May, 1972. If this was the case then three months' default would be for February, March and April and then 30 days' notice would expire on the last day of May, 1972, whereas the Rent Application was filed earlier on 8th May, 1972. In this view of the matter also there would be no default on the part of the appellants. However, as held earlier, the tenant no longer remained a contractual tenant after expiry of the Rent Agreement.
4. Lastly an objection was taken by learned counsel for the respondent that the learned Single Judge who had earlier dismissed the Second Appeal in limine on 24th March, 1979 could not review that order and allow the Review Application by his order dated 8th March, 1980 and reliance has been placed on a judgment of the Supreme Court reported in Muzaffar Ali v. Muhammad Shafi. In that case the Supreme Court has decided that the High Court has no jurisdiction to review its order passed in Second Appeal under section 15(4) of the 1959 Rent Ordinance. For three reasons I am not inclined to accept the contention of learned counsel for the respondent. Firstly, the order in review had been passed by the learned Single Judge in this matter as far back as 8th March, 1980 and the respondent did not file any petition for leave to appeal to the Supreme Court to challenge the said order. From this it follows that the respondent had accepted the order in review. Secondly, at the time the order in review was passed, learned Single Judge had decided that he had the power to review his earlie order dismissing the Second Appeal in limine on the basis of two judgments of the Lahore High Court reported in PLD 1966 Lah. 53 and PLD 1973 Lah.95. At the time the judgment in review was passed by the learned Single Judge (on 8th March, 1980) the judgment of the Supreme Court now being relied upon by learned counsel for the respondent had not been5 pronounced. Thirdly the judgment in review having been passed by the learned Single Judge, I cannot sit in review again and set aside that order.
5. In the circumstances this Second Appeal No, 112 of 1979 is allowed and the impugned orders of ejectment passed by the lower Tribunals are set aside. However, in the circumstances of this case, there will be no order as to costs.
PLD 1980 SC 298 PLD 1971 Lah. 610 1980 SC MR 767 PLD 1981 Kar. 150 PLD 1981 SC 94