1. ' This second appeal under section 15(4) of the West Pakistan Urban Rent Restriction Ordinance, 1959, is filed by the appellant/landlord against the two concurrent judgments of the Courts below, rejecting the ejectment application filed by the appellant on grounds of default, wrongful conversion of premises, denial of title, subletting and unauthorized construction against the respondents. The grounds of denial of title and conversion of the premises were not pressed before the Courts below as is apparent from the record. However, the Courts below also rejected the application on merits in so far the grounds of subletting, non-payment of rent and unauthorized construction are concerned. Mr. Khalid Ishaque the learned counsel for appellant on the hearing of appeal conceded that unauthorized by itself is not available as a ground for ejectment under the provisions of section 13 of the West Pakistan Urban Rent Restriction Ordinance, 1959, unless such unauthorized construction had the effect of impairing the value and utility of the premises. He accordingly, contended that he will argue the ground of unauthorized construction as if it affected the value and utility of the demised premises adversely. Before examining the contention of the learned counsel for the appellant it is necessary to clarify here that the appellant originally got in exchange from a Hindu evacuee Plot No. RY 16/2 which was allegedly shown in the exchange documents as measuring 8,000 Sq. Yds. However, after exchange it transpired that Plot No. RY 16/2 measured only 3,157 Sq. Yds . while the remaining area was treated as an evacuee property in the record of custodian and was assigned No. RY 16/3. The appellant obtained transfer of plot No. RY 16/3 through Settlement Department under the provisions of Displaced Persons (Compensation and Rehabilitation) Act, 1958 and a P.T.D. in respect thereof was separately issued to him. It is an admitted position that the total area of both these plots which comes to 7,593 Sq. Yds was in occupation of Messrs James Finlay & Co. as tenant of the appellant and tenancy rights in respect thereof was transferred to respondent No. 1 in the year 1958 with the consent of appellant. It is also admitted that at the time of creation of tenancy in favour of respondent No.1, respondents 2 and 3 were its partners. It is also common ground between the parties that the terms and conditions of lease between M/s. James Finlay & Co. and the appellant were made applicable to lease between appellant and respondents although no formal deed of lease was executed between the parties.
2. The appellant filed eviction application against the respondents alleging default, subletting and impairment of the value and utility of the premises and other grounds (which were not pressed).
3. The respondents objected to the maintainability of the application on the ground that no notice under section 30 of Displaced Persons Act was served on them in respect of Plot No. R.Y. 16/3 which was transferred to appellant by the Settlement Department whereupon the appellant clarified before the Courts below that their application is only in respect of Plot No. R.Y. 16/2 measuring 3,157 Sq. Yds. The learned counsel for the appellant also confirmed this position before me. I will, therefore, while considering the contention of the learned counsel for the appellant in this appeal consider it only with reference to Plot No. R.Y. 16/2 measuring 3,157 square yards.
4. ' The allegation with regard to default in payment of rent in the ejectment application is from August, 1959 while the case was filed in April 1965. However, it is clear from the record that the default was pressed only from November 1964 onward. Mr. Khalid Ishaq, the learned counsel for the appellant also addressed me on the issue of default having occurred from November 1964. With regard to allegation of default from November 1964 the respondents alleged in their written statement, that on 26th January, 1965 they moved a miscellaneous rent application before the Controller seeking permission to deposit rent for the months of November and December, 1964 which was granted on 18-10-1965 and they deposited the entire arrears of rent up to October 1965 on 2-11-1965 and as such there was no default on their part. Both the Courts below accepted the above explanation of respondents and condoned the delay of 26 days in moving the application for deposit of rent for November and December 1964 on the assumption that the rent was payable within 60 days of the rent becoming due and payable and accordingly exercised the discretion in favour of the appellant and refused to pass an order of ejectment against the respondents.. The learned counsel for the respondents contends that the two Courts below having exercised the discretion vested in them under law, this Court as a Second Appellate Authority could not interfere with the exercise of such discretion. It is true that a Second Appellate Court would not normally interfere with a discretionary order passed by the Courts below in lawful exercise of their power but where such discretion is exercised in a capricious, arbitrary and perverse manner in disregard or upon misreading of the evidence on the record the Second Appellate Court can always interfere with such orders. In the present case, it was common ground between the parties that the lease between them was on the same terms and conditions on which the premises were leased out by the appellant to Messrs James Finlay & Co (the previous tenant of the premises). The lease deed executed between the appellant and M/s. James Finlay & Co. is produced on record as Exh.37 and paragraph 1 thereof recites that the monthly rent of Rs.2,150 is payable on the first day of each month. It is, therefore, quite clear that the question of default in the case was to be resolved with reference to date on which monthly rent was payable. Under section 13 (2)(i) of the Ordinance of 1959 if the rent is payable by a specified date, then the tenant must pay the rent within fifteen days of such specified time. It is, therefore, quite clear that rent for November and December, 1964 should have been paid by 16th of December 1964 and 16th of January 1965 respectively. In these circumstances there was complete misreading of evidence on the part of Courts below in holding that the application filed by the respondents on 26th January, 1965 seeking permission for deposit of rent for the month of November and December, 1964 was late by only 26 days. There was clear default on the part of respondent in respect of the months of November and December 1964 when they moved application before the Controller for deposit of rent for these months on 26-1-1965.
5. Apart from it the application filed by the respondents before the Rent Controller seeking permission to deposit rent on 26-1-1965 related only for 2 months rents namely November and December, 1964, and there is nothing on record to show that they made any effort to pay or tender the rent from January 1965 to October 1965 either to the appellant or to Rent Controller until 2-11-1965 when they deposited a sum of Rs.40,800. Both the Rent Controller and the 1st Appellate Authority were, therefore, clearly in error and wholly misconstrued the legal position when they held that the deposit of rent on 2-11-1965 was a valid deposit for the entire period covering from November, 1964 to October, 1965, and as such the discretion exercised by them in favour of respondent was not in accordance with the law. Mr. Khalid Ishaque, the learned counsel for the appellant referred to the case of Mst. Maqbool Jan and another v. Begum Nargis Jan and another 1968 SCMR 111 wherein the following observations were made by the Court in similar circumstances:-- "Learned counsel then tried to maintain that there had been actually no default in the payment of rent on the part of the petitioners. The District Judge as well as the High Court have concurred in finding that there was initially default in the payment of rent for the months of May, June, July and August 1963. The petitioners had deposited the rent for these months, amounting to Rs.1,375 in the respondents' Bank account, on the 27th November 1963. It was further held that there was default in payment of rent for the months of May to November 1964. The rent for this period was deposited in the Rent Controller's Court as late as the 15th February 1965, even though there had been no refusal by the respondent's Bank to accept payment of any rent tendered by the petitioners. After hearing Mr. Saeed Hasan Malik, we are convinced that the findings are correct. At least in regard to the later default, there was apparently no excuse why the petitioners could not go on paying into the account of the respondent in her Bank, if they were desirous of paying the rent. The learned counsel mentions that his clients had put in an application before the Rent Controller on the 6th June 1964, seeking his permission to deposit the rent for May 1964 and that orders were not passed on it by the Rent Controller till the 26th January, 1965. There is however, no provision in the relevant law requiring notice to parties on such a petition. All that the petitioners had to do was to deposit the rent in the Rent Controller's Court if the landlord was refusing to accept the rent. In any event, the petition was only directed towards payment of rent for May 1966 and no further application or attempt seems to have been made to pay the rent for the subsequent period. The putting in of application before the Rent Controller and not obtaining his permission till the 26th January, 1965, for deposit of the rent, on the face of it, appears to have been a device adopted for defeating the landlord's claim. Even a money order could have been sent every month to the landlord for the purpose of payment of the rent. We are, therefore, satisfied that the petitioners were in default with regard to the payment of rent and therefore, ejectment was properly ordered."
6. 'I am, therefore, of the view that on 2-11-1965 when a sum of Rs.40,800 was deposited by the respondents covering rent from November, 1964 upto October 1965 default had already taken place for the months of November and December 1964 and. January, 1965 to September 1965 and therefore, the Rent Controller and the 1st Appellate Authority should have ordered ejectment of respondents on the ground of default. I accordingly reverse the findings of the two Courts below on the issue) of default.
7. ' The second ground urged in the application relates to subletting of the premises by the respondents without written consent of the appellant. Learned counsel for the appellant in support of the ground of subletting relied on the statements of Mehar Ellahi (appellant), Siddique Ahmed (witness No.5), Abdul Ghani (witness No.2), Haroon Ahmed (witness No.3) and Zubair Ahmed (witness No. 4). In paragraph 19 of the ejectment application the appellant alleged subletting of a portion of the premises to Pakistan Shipping Agency, International Forwarding Ageney and others.
8. Both the appellant and his son categori cally stated before the Rent Controller that portions of the demised premises were sublet by the respondents to the above-named companies alongwith others. The appellant further examined . Abdul Ghani, Accountant of Pakistan Shipping Agency, Haroon Ahmed, Accountant, Assistant of Muller and Phillips Pak. Ltd., and Zubair Ahmad, Accounts Clerk of Amin Agency. These witnesses admitted in their evidence that they were paying rent to the respondents for godowns in their respective possession. Learned counsel for the respondents contended that in accordance with the terms of lease between the appellant and M/s. James Finlay & Co. , and which is applicable to respondent, they were entitled to sublet the premises. It is also contended by the learned counsel, that the respondents are admittedly, in possession of an area of 7,517 Sq. Yds. , but the appellant has failed to lead any evidence to show that the alleged portions which were sublet by the respondents fell within the area of 3,157 Sq. Yds. (RY 16/2) which is the subject-matter of the rent application. It is lastly contended by the learned counsel that the subletting if any was much prior to the transfer of tenancy to the respondents and therefore, the respondents could not be evicted on the ground of subletting. None of the contentions of learned counsel has any force. The relevant clause of lease deed relied by the learned counsel reads as follows:-- B. "To permit the Lessee to erect such structures and buildings on the premises and alter the existing buildings as the lessee may require for the purpose of its business having first submitted plans of such structures and buildings or alterations to the lessor and obtained his approval thereto.
9. C. To permit the lessee to assign or sublet the whole or any part of the demised land or premises."
10. ' A reading of the above paragraph will show that no doubt subletting was permitted under the lease but the requirement of obtaining permission from the landlord was not dispensed with. It is not the case of respondents that they at any time sought permission from the appellant for subletting these premises. The evidence of Abdul Ghani, Haroon Ahmed and Zubair Ahmed, examined in the case clearly show that subletting was after transfer of tenancy right in favour of the respondents. In these circumstances it was incumbent on the respondents to have established on record that they had applied and obtained permission from the landlord/appellant at the time or after subletting these premises. In addition to it, the appellant also led evidence before the Rent Controller to show that respondent No. 1 which is the tenant of premises was a partnership firm consisting of respondents 2 and 3 at the time of creation of tenancy but during the pendency of rent case respondent No. 1 was taken over by a Limited Company and articles of association of the company were produced in evidence as Exh.P-66. The opening paragraph of the articles of association of Mandviwala Motors Limited clearly shotvs that the entire business and interest of respondent No. 1 was taken over by the above limited company. Learned counsel for the respondent contended that the limited company was formed during the pendency of ejectment proceedings, therefore, no cause of action had accrued to the appellant on the date of filing of application and as such the same could not be availed against them. It is also contended by the learned counsel that although respondent No. 1 was taken over by a limited company, the constituent members of the limited company are the same who were partners of respondent No. 1 and as such there was no subletting. In the case of Manek J. Mobed v. Shah Behram PLD 1974 SC 351 it is held that where the original tenant assigned the tenancy rights to a firm or a private limited company consisting of his family it cannot be said that no change has taken place in the status of the tenant. In the present case although the constituent members of the limited company as contended by the learned counsel for the respondents, may be the same, who were partners of the firm, but it cannot be disputed that a limited company under the law has its legal own entity, which is separate and distinct from its shareholders. I am, therefore, of the view that apart from the fact that the respondents had sublet the premises to several persons for which they obtained no permission from the appellant as required under the law, there was another factor which could justify their eviction, namely, that the original tenant (respondent No.1) was taken over by a limited company which amounted to change in the status of tenant to which appellant did not consent. I, therefore, grant the application on the ground of subletting as well.
11. ' The last contention urged by the learned counsel for the appellant relates to the impairment of the value and utility of the premises on account of unauthorized construction in the premises. The evidence on record show that before raising construction which is alleged to be unauthorized the respondent had approached the appellant for permission and such permission was accorded by the appellant though with the rider that the respondents should also obtain permission/sanction from K.M.C/K.D.A. This amounted to substantial compliance of the terms of sub-clause (b) of the lease reproduced above. There is nothing on record to show that the alleged unauthorized construction in any manner impaired the value and utility of the premises let out to respondents. In fact neither the applicant nor any of his witnesses stated so in their evidence. I, therefore, hold that the appellant has failed to prove this ground.
12. ' As a result of above discussion the application for eviction is granted on the grounds of default and subletting only. The respondents are allowed four months time to vacate the premises. There will be no order as to costs.