1. ' This appeal has arisen from a rent dispute between the parties in respect of the tenement No.3 of the building constructed on plot No.8, Survey Sheet No. GK-9, West Wharf Road, opposite Custom House, Karachi. The appellant Tahir AU Sheikha is said to be landlord and the respondent Ahmed A.
2. Dama, Proprietor, Dama Clearing Agencies is stated to be the tenant of the disputed tenement. On 24th November, 1980, the appellant filed an ejectment application seeking ejectment of the respondent from the disputed premises on two grounds: namely, default in payment of rent for _four months from 1-7-1980 to 31-10-1980 and subletting of the said premises.
3. ' The ejectment application was resisted by the respondent Ahmed A.Dama who took the plea that he is not the tenant of appellant but real tenants are a firm known as "Dama Clearing Agencies" who have never defaulted in paying the rent. It was further averred by the respondent that the rent for the disputed period was offered to the appellant by cheque as per usual practice but he declined to accept the same. According to him the rent was therefore remitted to the appellant by money order but that too was returned undelivered. Consequently, the respondent has added, the tenants were constrained to deposit the rent in the Court and the rent has been deposited up to 30-6-1981 including the disputed period.
4. ' The parties have examined themselves and have produced several documents in support of their respective pleas. The learned Rent Controller, after considering the entire material brought on record by both the parties, dismissed the application with costs vide his order, dated 13th May, 1981.
5. Aggrieved by this order, the appellant has come in the present appeal.
6. ' I have heard the learned counsel for the parties at length and with their assistance have gone through the written material available on record.
7. ' It goes without saying that the issue of default in payment of rent is inter/inked with the question as to who is the tenant? If the respondent Ahmed A. Dania is held as tenant in his individual capacity or as a sole proprietor of the Dama Clearing Agencies then on his own showing it will follow that he is defaulter liable to eviction from the disputed premises. Therefore the crucial point to be determined is whether Ahmed A. Dama either in individual capacity or as sole proprietor of Dama Clearing Agencies is the tenant or the said Agencies as a Firm are tenants of the appellant.
8. Admittedly there is no written agreements of tenancy to throw light on the above controversy.
9. Therefore the said controversy can only be resolved in the light of material on record. The case of the appellant-landlord, as disclosed in the ejectment application, is that the opponent mentioned therein is the tenant. The opponent as described in the ejectment application is: "Ahmed A. Dama, Muslim Adult, Proprietor Dama Clearing Agencies Custom House Agents, Arab House, Bohri Road, Opp. Custom House, Karachi."
10. ' Refuting the above plea, the respondent has taken a stand in the objections filed in reply to the ejectment application that "opponent is not a tenant of the applicant. In fact the firm Dama Clearing Agencies are the tenants."
11. ' In view of the respondent's denial that he is the tenant of the appellant, the burden was on the latter to prove his case. The appellant has examined himself besides producing several documents. Although he has stated in his affidavit-in-evidence that Ahmed A. Dama is his tenant, he has admitted in the same breath that "Ahmed A.Dama was sole proprietor of the firm of the Clearing Agents run in the name and style of Dama Clearing Agencies". The appellant has produced three letters Exhs. A, B & C by which the cheques covering amounts of rent payable by the tenants were forwarded to him. They clearly show that they are addressed to him by Dama Clearing Agencies and are signed by Ahmed A. Dama as the proprietor of the said Agencies. Apart from this, it is also admitted by the appellant in his cross-examination that in 1966 he had filed a rent case in respect of the same premises against Dama Clearing Agencies which was disposed of on 3-4-1967 as a result of non-prosecution. Proceeding further he has admitted in unambiguous language that "Dama Clearing Agencies" are his tenant and the lease was created through Ahmed A. Dama for the said Agencies. These admissions on the part of the appellant should set at restall doubts as to who is actually the tenant of the appellant. On the other hand the respondent Ahmed A. Dama has also stated in his affidavit-in-evidence that the tenancy is in the name firm Messrs Dama Clearing Agencies and not in his own name. In support of his assertion to this effect he has referred to documents from Exh.2 to Exh.
11. They are the rent receipts issued by the appellant himself acknowledging the receipt of rent from Messrs Dama Clearing Agencies.
12. From the above evidence it is proved that "Dama Clearing Agencies" are the tenants of the appellant and not the respondent Ahmed A. Dama in his individual capacity.
13. ' Having arrived at the above conclusion it is to be seen if any subletting of the disputed premises has taken plea. According to the appellant's case, Ahmed A. Dama who is his tenant in his individual capacity had sublet the disputed premises. Since he has failed to prove the individual tenancy of the respondent Ahmed A. Dame, the question of the latter having sublet the disputed premises would not arise. The next point to be examined is if Messrs Dama Clearing Agencies who are held to be the appellant's tenants have resorted to subletting of the rented premises in their occupation. The learned counsel for the appellant has argued that since the Dama Clearing Agencies have changed from sole proprietorship to partnership, the change in status of the tenant would amount to subletting.
14. ' First of all it has to be seen if the alleged change has actually been effected. There is no documentary evidence seeking to establish such change. Nevertheless reference has been made to several documents to show that the change in status of the tenant has taken place. In this connection the first document referred to is the letter dated 6th July, 1980 which was addressed to the appellant, enclosing a cheque of Rs.
15. 552.50 being payment of rent and betterment tax. This was issued by Dama Clearing Agencies and was signed by Ahmed A. Dama not as proprietor as before but as partner. Similarly another letter Exh. 12 issued by the same Agencies and addressed to the appellant was signed by Arif A. Dama as partner. There is also third document (Exh. 16) which is also a letter emanating from the Dama Clearing Agencies. It is addressed to the counsel of the appellant and is signed by Ahmed A. Dama as partner. The cheque, dated 7th July, 1980 produced at Exh. 21 which has been issued by Dama Clearing Agencies also carries the signature of Ahmed. A. Dama as partner. Relying on these documents, the learned counsel for the appellant has urged that the Dama Clearing Agencies which initially was sole proprietorship had converted into Firm. So far the respondent is concerned, his stand right from commencement of the litigation has been that Dama Clearing Agencies is a firm and in that capacity the said firm are the tenants of the appellant. However it is admitted by the respondent in his cross-examination that he was sole proprietor of the Dama Clearing Agencies. Referring to the letters Exh.17, Exh. 18, Exh.19 he has further admittted that he signed those letters on behalf of the said Agencies as Proprietor. In view of the admissions of the respondent Ahmed A. Dama referred to above, it becomes clear that the Dama Clearing Agencies before converting into a firm with Ahmed A. Dama and his son and wife as partners, was a sole proprietorship and Ahmed A. Dama was the sole proprietor. Thus the said Agencies which, as has been held above, had held the disputed premises as tenants had subsequently undergone a change in its status as it was transferred from sole proprietorship to partnership.
16. ' The argument of the learned counsel for the appellant was that since the aforesaid tenants continued in possession of the disputed premises even after the transformation in their status without permission of the appellant, it amounted to subletting. In this connection the learned counsel has placed reliance on Motal Bai v. Abdul Aziz and others PLD 1968 Kar.
635. In this case the appellant landlady had given the disputed shop on rent to the respondent No.
1. In the proceedings instituted by the landlady for eviction of the said respondent it was alleged by the landlady that the respondent No. 1 had sublet the premises. This allegation was denied and it was averred that the respondent No. 1 had entered into partnership with respondents Nos.4 and 5 for running cloth business in the disputed shop. It was held: "In cases where a lessee enters into a partnership with others and lets the firm into possession of the premises held on lease by the lessee, the question would be what was the intention of the parties with regard to the demised premises when they entered into the legal relationship of partnership and, further, whether the lessee had parted with, or divested himself of, the legal possession of the demised premises in favour of the firm. This parting with legal possession should be such as to create an interest in immovable property, a right in rem in all the partners, so as to create in them unity of title, unity of interest, unity of possession as well as every part as of the whole demised premises, so that all the partners become co-lessees. Further, parting with possession and letting the firm into use as tenant of the demised, premises, or creation of interest in immovable property by way of lease, should not be readily construed, particularly in cases of premises subject to Rent Restriction Laws, if the facts can be held to be consistent with some other relationship or arrangement."
17. ' The other case relied upon by the learned counsel for the appellant is of Manek. J. Mobed and another v. Shah Behram and others PLD 1974 SC 351 wherein it was held: "If a person obtains leasehold rights in his own name and subsequently assigns them to a firm or to a private limited company consisting of family members it cannot be said that no change has taken place in the status of the tenant or that it is not a case of subletting or assignment of leasehold rights."
18. 'In the instant case there is no evidence to show that the original tenants namely Dama Clearing Agencies as Sole Proprietorship had taken any concrete step to assign or transfer the tenancy rights vested in the said Agencies to the newly-formed partnership with the same nomenclature.
19. Nevertheless it is the respondent's own case that Dama Clearing Agencies as partnership are the tenants and have also dealt with the appellant/landlord in that capacity so much that they have even issued Cheques on behalf of the partnership for payment of rent in favour of the appellant.
20. Thus the said Agencies as partnership have stepped into shoes of the original tenants, on the respondent's own showing. The aforesaid Agencies as sole proprietorship have obviously ceased to exist and in its place the partnership with the same nomenclature has come into being. Therefore it is now the latter who are enjoying all the tenancy rights.
21. ' It is an admitted position that the above change which clearly amounts to subletting has come about without the express permission of the appellant/landlord. However the learned counsel for respondent vehemently argued that although no express permission was obtained from the appellant, the latter had acquiesced in the said partnership's continuing in possession of the disputed premises and as such he has accepted them as his tenants and has consequently waived his right of evicting them on the above ground.In support of this argument reference has been made to letter Lxh. 12 by which a cheque for a sum of Rs.360 being the rent for the year 1979 was sent to the appellant by Arif A. Dama as a partner of the Dama Clearing Agencies. This has been acknowledged by the appellant by his rent receipt, dated 1-1-1979 produced as Exh.
6. The learned counsel for respondenr has also referred to the covering letter Exh.1-E and cheque Exh.1-F to show that the appellant has sent the cheque for the rent for the period from July, 1980 to June 1981 which had also been accepted by the appellant. Both the letter and the cheque are signed by Ahmed A. Dama as partner of the said Agencies. Both these documents were produced by the appellant with his affidavit-in-evidence dated 17th January, 1981. It proves that even though they were received by the appellant on 6th July, 1980 they were not returned to the sender namely Ahmed A. Dama, the partner of the Dama Clearing Agencies but instead were retained by the appellant for over six months when they were produced by him in his evidence. As for the cheque, dated 1-1-1979, the learned counsel for the appellant submitted that it was accepted by the appellant through oversight. So far the other cheque covering the period from July, 1980 to June, 1981, the explanation of the learned counsel was that it was not encashed and as such the appellant had no intention to recognise the sender thereof as his tenant by accepting rent from him. The explanation does not appear to be convincing. After having accepted the cheque, dated 1-1-1979, it was the second time that the appellant received the cheque for the aforesaid period (July, 1980 to June, 1981) from the same source namely partner of the Dama Clearing Agencies. If the earlier cheque was received by him through oversight, he should have returned the second cheque to its sender without any loss of time making it clear to him that he had no intention of accepting the rent from the said Agencies as partnership. If it was not to be accepted the appellant had no reason to retain the same though without its encashment for over six months.
22. Since it was not promptly returned back to the sender of the cheque, the appellant owed an explanation for its retention and such explanation is not forthcoming. Moreover the change in the status of the tenants was of technical nature as Ahmed A. Dama and his son Arif A.Dama who were respectively the sole proprietor and manager of the original tenants had, subsequent to formation of the partnership, were representing it as its partners. Thus in both the cases it was a family affair.
23. This seems to be the reason for the appellant to have acquiesced in the said Agencies continuing as tenants with new name.
24. ' The learned counsel for the appellant has placed reliance on Abdul Hamid v. Mrs. Parvin Faredoon and 8 others PLD 1983 Kar. 168 in an attempt to enforce his argument that the knowledge of subletting on the part of landlord does not amount to waiver of his right to evict the tenants. In the above-reported case the First Appellate Court's finding that the landlord was aware of subletting but he failed to take notice for 20 years was reversed on the ground that the said finding was not supported by evidence. But that is not the case here. In the instant case there is ample evidence to show that at least on two occasions the appellant had received rent from the Agencies tenants as being partnership. Therefore the above authority is not helpful to the appellant.
25. ' Another case cited by the learned counsel for the appellant on the point of waiver is of Messrs Premier Mercantile Service and another v. S.M. Younus and 2 others PLD 1982 SC 79. The facts of this case are totally different from the facts of the case under consideration. In the above-reported case the landlords had expressed themselves unequivocally that they were not accepting the change of partnership firm into a limited liability company and solicited" clarifications about the change. Issuing of receipts in the meantime by the landlords in favour of one of the partners was therefore not held as acceptance of the change by the landlords. In the instant case the appellant- landlord has not brought on record anything to indicate that on any occasion he had expressed himself either verbally or in writing that the change of status of the aforesaid Agencies, his tenants was not acceptable to him. Therefore his acceptance of the rent from newly-formed partnership cannot be placed at par with the issuing of receipt by landlords in favour of one of the partners in the above-reported case. As such the said Supreme Court authority is not applicable.
26. ' The upshot of the above discusssion is that though the appellant had not given his express approval to accepting the Dama Clearing Agencies with the new status of partnership as his tenants, he had impliedly allowed them to continue in possession of the disputed premises and pay rent in respect thereof. Consequently he would be regarded to have waived his right of seeking eviction of the Agencies with the status of partnership on the ground of subletting.
27. ' Coming to the question of default it would appear that it is attributed to Ahmed A.Dama in his individual capacity or as sole proprietor of the Dama Clearing Agencies. But as has been held above, the said Ahmed A. Dama neither in his individual capacity nor as sole proprietor of the aforesaid Agencies is tenant of the appellant. It is the above Agencies with new status of partnership who have been accepted by appellant as his tenants as he has not only allowed them to continue in possession but has also accepted rent from them. Therefore if any default is committed, it will be attributable to the said new tenants. It may be noted that the allegation of the landlord is that the rent for four months from 1-7-1980 to 31-10-1980 has not been paid. But as pointed above the said tenants had sent the cheque dated 7th July, 1980 to the appellant for Rs.
28. 552.50 being the rent for the period from July, 1980 to June, 1981 which obviously includes the disputed period. The receipt of the said cheque has not been denied. Thus, no default has been committed by the tenants in respect of the disputed period.
29. ' For above reasons the appeal must fail and it is dismissed with no order as to costs.