1. ' SHAFIUR RAHMAN, J.-- Leave to appeal was granted to the lessee of land vesting in Karachi Port Trust Authority (hereinafter referred to as KPT) to examine the question of law viz., whether the exemption Notification No, VIII(3) S01/75 dated 15-3-1987 under section 3(2) of the Sind Rented Premises Ordinance, 1979 (hereinafter referred to as the Ordinance), has the effect of ousting the jurisdiction of the Rent Controller in disputes arising under Ordinance between the appellant, the lessee of the property and the respondent, the statutory successor of the sub-lessee of the appellant.
2. The land in dispute measures 833.33 sq. Yards and is situate at Agha Khan Road (Haris Road), Karachi. It is a part of an extensive area, belonging at one time to Federal Government but then vesting in KPT. The KPT had leased it out for setting up a Petrol Pump to the appellant with the further right to sublet it. The appellant sublet the land to ESSO Standard Eastern Inc., a corporation duly constituted under the laws of the State of Delaware, United States of America, for the period starting from 28-8-1963. Some of the conditions of the sublease, which was created by an undated, unregistered document, were as follows:--
(i) "The monthly rent of Rs, 1,500 (Rupees one thousand five hundred only) payable monthly in advance. If the lessor is required by the Karachi Port Trust to pay charges mentioned in clause 3 of the K.P.T. Letter No, L/12331 of 1952 dated 10-9-1952, the lessee will reimburse the lessor a sum not exceeding Rs, 750."
(ii) In the event of the lessor securing from the Karachi Port Trust a long term lease in respect of the demised land (at least for a period of ten years) and giving a sub-lease of the demised land to the lessee for the similar period, the rental payable to the lessor shall be Rs, 2,500 (Rupees two thousand five hundred only) per month payable annually in advance from the date of lessor notifying to the lessee the lessor's readiness to execute and register the long term sub-lease.
2. However, on the expiry of every ten years the rental will be increased at the rate of ten per cent.
(iii) In the event that the lessor has not obtained the long term lease as hereinbefore mentioned and there is complete revision in the KPT rental, the rental payable under this agreement will be increased to the extent of the increase in the rental made by the K.P.T.
(iv) If any rent shall be 60 days in arrear (whether legally demanded or not) or if the lessee shall omit to perform or observe any covenant or condition on the part of the lessee herein contained and shall continue for 30 days after notice thereof to the lessee, the lessor may re-enter forthwith upon the demised premises or upon any part thereof in the name of the whole and the tenancy shall thereupon determine but without prejudice to any claim which either of the parties hereto may have against the other in respect of any breach, non-performance of any of the covenants and conditions herein contained.
3. ' The periodical increases in rent made by the K.P.T. Were accepted by the lessee in May, 1976 and May, 1980 in terms of the demand made by the appellant. By Ordinance, XXXII of 1976 (Esso undertakings vesting Ordinance, 1976), the Esso undertaking stood vested in the Federal Government. Section 7 provided that on the expiry of the term of any lease, licence or tenancy, such lease, licence or tenancy shall, if so desired by the Federal Government, be renewed on the same terms and conditions on which the lease, licence or tenancy was held by Esso immediately before the commencing day.
3. The other, a statutory instrument, having bearing on the subject is a gazette notification dated 15th March, 1981, which is reproduced as hereunder:-- "Karachi, the 15th March, 1981.
4. ' No, VIII(3) SOJ/75.--In exercise of the powers conferred by subsection (2) of section 3 of the Sind Rented Premises Ordinance, 1979, and in supersession of all orders issued previously, the Government of Sind are pleased to exempt the premises belonging to Karachi Port Trust Karachi, from the application of the said Ordinance.
5. ' MAZHAR RAFI, Secretary to Government of Sind, Home Department."
4. On the 25th of October, 1982, the appellant filed an application under section 15(2)(ii) of the Ordinance, against the respondent on the ground that the rent for the month of October, 1982 payable in advance by 1540-1982 had not been paid by the respondent, who had committed default which "once committed, cannot at all be wiped off, or erased, or explained away by the tenant or condoned or excused by any Court or authority in any way whatsoever." The appellant sought on this ground its ejectment from the premises. The respondent contested the claim on the ground that "the rent of October, 1982 amounting to Rs, 2,037 was sent to the applicant by Chaque No, 014211 dated 27-9-1982, but the applicant returned the same illegally and without jurisdiction".
6. The respondent contested the claim that the last date for payment of advance rent was 15-10-1982 on the following reasoning:-- "That the opponent became statutory tenant on the expiry of lease period and the rent of October, 1982 becomes due on 1-11-1982 and thereafter the default would he on the expiry of December, 1982 and as such there is no default on 16-10-1982 and there is no cause of action for the applicant to file the above application on 25-10-1982 for ejectment on the alleged default."
7. ' With regard to the agreement of tenancy, the following statement was made:- "That the lease agreement dated nil but effective from 28-8-1963, Annexure to the application, is not registered due to the failure and negligence of the applicant and it is not admissible in the eye of law, however, the opponent continued to be. Tenant by operation of law under the West Pakistan Urban Rent Restriction Ordinance, 1959, thereafter under Sind Rented. Premises Ordinance 1979 and the rights of the opponent are fully protected under the Ordinance as if there was no date fixed for payment of rent, therefore, the question of default under the law for October, 1982 before the expiry of December 1982 does not arise."
5. After inviting evidence on the issues framed, the Rent Controller dismissed the, application for ejectment. Notwithstanding the notification of exemption of the property, it was held that the Rent Controller had the jurisdiction and the ejectment application was competent, as the period of lease had expired and statutory tenancy had thereafter come in existence. The Rent Controller held that the appellant could not claim a right of ejectment on the basis.Of 15 days' default in payment of rent in terms of the agreement. The tenant was held to be not a defaulter and the application was dismissed.
6. 'The High Court dismissed the regular first appeal filed by the landlord after noting that the agreement of tenancy does not bear the date, the term for which it was executed is also not known and that the agreement is neither registered nor attested. The High Court held that "there exists no agreement between the applicant and present tenant, therefore, no default is committed." The tenant was found to be not in default.
7. The respondent had also gone up in appeal against the finding of the Rent Controller that in spite of the notification exempting the property from the Rent Restriction Ordinance, such an ejectment application was competent before the Controller. The learned Judge in the High Court, after examining the various provisions, recorded the following conclusion:-- "Upshot of the above discussion is that premises belonging to K.P.T. Are exempted. In the present case Mrs. B.S. Khan is lessee of K.P.T. Whereas State Oil is in occupation of land of K.P.T; though it has been given to them by lease. Therefore, lessee cannot invoke the jurisdiction of Rent Controller in respect of land of K.P.T., which stands exempted by virtue of notification dated 15th March, 1981.
8. Moreover, the definition of landlord is given in Sind Rented, Premises Ordinance, 1979 as under:- "2(f) 'landlord' means the owner of the premises and includes a person who is for the time being authorised or entitled to receive rent in respect of such premises."
9. ' The owner of the land is K.P.T. But Mrs. B.S. Khan who is lessee, rented out the premises belonging to K.P.T. To State Oil and his rights are to the extent to recover the rent as such provisions of Sind Rented Premises which include section 2(f) are exempted, therefore, lessee is not competent to file rent case against sub lessee."
10. ' The sub-lessee's appeal challenging the jurisdiction of the Rent Controller was allowed by the learned Judge in the High Court holding that "Rent Controller ceased to have jurisdiction in these cases." The application filed by the appellant-landlord was dismissed. Hence there are now two appeals.
11. ' Mr. SA. Samad Khan, Advocate, the learned counsel for the appellant has on the jurisdictional aspect raised two material points. The first is that according to the law laid down by the Courts in this country even if such an exemption was validly granted and was enjoyed by the K.P.T. It could be availed of only where a relationship of landlord and tenant was established and the controversy had arisen between the K.P.T. And the tenant, and not, as in this case, between the lessee of the K.P.T. And the sub-lessee of the lessee. In a case where the tenant of the K.P.T. Was involved with sub-tenant of his, and the K.P.T. Was not a party to the relationship at all, the exemption granted to the property under section 3 of the Ordinance could be of no avail to either of the parties. The learned counsel has in this extent relied on the decisions in Abdus Salam v. Waheed-ud-Din (PLD 1963 Lah. 517), Assistant Registrar, Co-operative Societies, Mirpurkhas v. Ch. Abdul Jabbar ( PLD 1966 Kar. 214) and Muhammad Nazir Ahmad v. The Lyallpur Improvement Trust, Lyallpur (1979 CLC 170).
12. ' The other contention of the learned counsel on the jurisdictional aspect of the case is that the exemption granted by the Government of Sind under section 3(2) of the Ordinance on its express words extends to premises belonging to K.P.T. And the property of the Central Government vesting in the K.P.T. Does not fall in that category, i.e, of property belonging to K.P.T. In this connection reliance has been placed on Preamble of K.P.T. Act and its section 27(1)(ii) authorizing resumption without compensation.
13. ' According to the learned counsel for the appellant, section 3 of the Ordinance is an exception to the law of the land and for that reason it should be construed strictly against the party claiming exemption. For this proposition the learned counsel for the appellant has relied on Duke of Devonshire and others v. O'Connor 24 Q B D 468 at 474), E.I.Ry., Calcutta v. Jat Ram-Chandra Bhan (AIR 1928 Lah. 162 at 163), Assistant Registrar, Co-operative Societies, Mirpurkhas v. Ch. Abdul Jabbar (PLD 1966 Kar. 214) and Muhammad Nazir Ahmad v. The Lyallpur Improvement Trust, Lyallpur (1979 CLC 170).
14. Section 3 of the Ordinance under which the exemption was granted is reproduced hereunder:-- "3. Applicability.--(1) Notwithstanding anything contained in any law for the time being in force, all premises other than those owned or requisitioned under any law, by or on behalf of the Federal Government or Provincial Government, situated within an urban area, shall be subject to the provisions of this Ordinance:
(2) Government may, by notification, exclude any class of premises, or all premises in any area from operation of all or any of the provisions of this Ordinance."
15. ' The West Pakistan Urban Rent Restriction Ordinance, 1959 (hereinafter referred to as the predecessor Ordinance) had section 3 in the following words:-- "3. Government or an officer authorised by it in this behalf may direct by a notification published in the Gazette that all or any of the provisions of this Ordinance shall not apply to any particular building or rented land or any class of buildings or rented lands."
16. ' The precedents cited by the learned counsel for the appellant relate to notifications of exemptions under section 3 of the predecessor Ordinance.
17. ' The preamble to the predecessor Ordinance was in the following words:-- "Preamble.--Whereas it is expedient in the public interest to restrict the increase of rent of certain premises within the limits of Urban Areas and the eviction of tenants therefrom in the Province of West Pakistan;"
18. ' The notification of exemption now under examination and under the Ordinance, has already been reproduced.
19. The exemption under the Ordinance and the predecessor Ordinance could be granted and was in fact granted to the "premises", "building' or "rented land" and all these terms were defined in respective Ordinances. The common feature of all these definitions is that they all concern immovable property and what is important, none concerns the relationship or interest in such property. In other words the exemption and non-exemption determines the status of the immovable property, that is as an exempted property or as a non-exempted property. Neither the context nor the scope of the law, nor the express language of the provisions of section 3 leave any manner of doubt about what is exempted from the purview of the Ordinance. It is the property itself and not any particular relationship concerning it. Recourse to preamble where the language presents no problem is impermissible.
20. ' It is interesting to examine briefly the history and the background of such a provision. In Halsbury's Laws of England Third Edition, Volume 23, page 721, the following narration of it appears:- "The Rent Restriction Acts are sometimes said to operate in rem or to impose a status on a house.
21. Various propositions are said to flow'from or illustrate this principle. Thus, the standard rent before 1957 was based on the rent at which the premises were let at a particular date, and this standard rent attached to the premises so that it was binding on all subsequent landlords and tenants of.
22. The premises ' Another consequence said to flow from the proposition that the Act impose a status on the house is that if a tenant of controlled premises grants a sub-tenancy to which the Acts do not apply, for example, for business purposes, the Acts cease to apply to the premises and the head tenant himself loses protection. Conversely, it has been held that if the head tenancy is outside the Acts, sub tenancies are also exempt from control."
23. ' Again at page 755, ibid is the following narration:-- "The Rent Restriction Acts do not bind the Crown and accordingly a letting by the Crown is not controlled. Further, it was held, on the principle that the Acts operate in rem, that a subletting by a tenant of the Crown was equally exempt from control."
24. ' Finally at page 761, ibid, the following narration is of importance:-- "The repealed provisions formerly exempting local authority houses from 1939 control were expressed to apply to the dwelling house. It was held, on the principle that the Rent Restriction Acts apply in rem, that subtenants of such premises had no protection against their immediate landlords. The exemption from control now in force in the case of lettings by local authorities, development corporations, housing associations and housing trusts, applies to the tenancy and not to the house, and sub-tenants, though they are not protected against the local authority in a case where the principal tenancy comes to an end, are not deprived of protection against their immediate landlord merely because the head landlord is a local authority, development corporation, housing association or housing trust."
25. ' In the United Kingdom in 1952, the Crown Lessees (Protection of Sub-tenants) Act, 1952 was enacted. The very first section made special provision for bringing under Rent Control Acts the relationships of tenants and sub-tenants, even in respect of exempted properties. The General Note contained in Halsbury's Statutes of England, 2nd Edition, Volume 32, at page 395, is in the following words:-- "The Rent Control Acts do not apply to any property owned by the Crown (Clark v. Downes (1931) 145 L.T. 20; Digest Supp.; Wirral Estates Ltd. v. Shaw (1932) 2 K.B. 247; Digest Supp.; Hobbs v. Weeks (1950), 100 L. JO 178(c), and on the basis that the Acts operate in rem and not in personam, this exemption has hitherto applied not only in the case of a tenant holding direct from the Crown (Territorial Forces Association v. Philpot, (1947) 2 All E.R. 326; 2nd Digest Supp.), but also in the case of a sub- tenant of such a tenant (Rudler v. Franks (1947) K.B. 530, 2nd Digest Supp.), so long as the property in question remained Crown property.
26. ' The effect of this section is to give to sub-tenants of premises in the ownership of the Crown or built on Crown land the benefit of the protection afforded by the Rent Control Acts as if there were in fact no Crown interest involved. Subsection (1) gives to all Crown tenants the benefit of those Acts, but by subsection (2) the provisions of the section are restricted to sub-tenants or assignees from the Crown. By subsection (3) the right of the Crown to require the payment of a premium as a condition of the grant, renewal, continuance or assignment of a tenancy is preserved."
27. ' In India, Bombay Rents, Hotel and Lodging House Rates Control Act, was in force; Section 4(1) whereof provided as follows:-- "The Act shall not apply to any premises belonging to the Government or a local authority or apply as against the Government to any tenancy or other like relationship created by a grant from the Government in respect of premises taken on lease or requisitioned by the Government, but it shall apply in respect of premises let to the Government or a local authority."
28. ' The Indian Supreme Court interpreting the first part of this provision in Messrs Bhatia Co-operative Housing Society Limited v. D.C. Patel (AIR 1953 SC 16) held as follows:-- "The conclusion is, therefore, irresistible that the Legislature did not by the first part intend to exempt the relationship of landlord and tenant but intended to confer on the premises belonging to Government an immunity from the operation of the Act This protection requires that the immunity should be held to attach to the premises itself and the benefit of it should be available not only to the Government or a local authority but also to the lessee deriving title from it."
29. ' In order to nullify the effect of Indian Supreme Court judgment in Messrs Bhatia Co-operative Housing Society Limited, at first an Ordinance and thereafter an Act was passed adding subsection (4)(a) in the Bombay Rents, Hotel and Lodging Housing Rates (Control) Act, to the following effect, noticed in Kanji Manji v. The Trustees of the Port of Bombay (AIR 1963 SC 468):-- "(4) (a). The expression "premises belonging to the Government or a local authority" in subsection
(1) shall, notwithstanding anything contained in the said subsection or in any judgment, decree or order of a Court, not include a building erected on any land held by any person from the Government or a local authority under the agreement of lease or other grant, although having regard to the provisions of such agreement, lease or grant the building so erected may belong or continue to belong to the Government or the local authority, as the case may be; and
(h) notwithstanding anything contained in S. 15 such person shall be entitled to create a tenancy in respect of such building or a part thereof."
30. ' In Abdus Salam v. Waheed-ud-Din (PLD 1963 Lah. 517), Assistant Registrar, Co-operative Societies, Mirpurkhas v. Ch. Abdul Jabar (PLD 1966 Kar. 214) and Rahim Bakhsh v. Ch. Ahmad Bakhsh and others (PLD 1964 SC 189) properties which had been acquired by the Provincial Governments under section 3 of the Displaced Persons (Compensation and Rehabilitation) Act, were involved. It was contended that as neither the Federal nor the Provincial Governments were the lessors or the landlords, the exemption did not operate. The decision in Rahim Bakhsh's case proceeds on the following reasoning:- "The notification under section 3 of the Ordinance is apparently designed to cover only those properties which vest in the Central Government, absolutely, as owners. The Central Government in the present case is under a statutory duty to dispose of the properties for the purposes of the Act, by its transfer to claimants and others. Undoubtedly, certain rights have been conferred by and under the Act on the P.T.O.-holder. Section 30 of the Act declares that persons in possession of any evacuee property and those who have been declared to be tenants occupying such property, from a certain date, would be deemed to be tenants of the transferee on the same terms and conditions as to payment of rent or otherwise, on which they held it immediately before the transfer. Moreover, paragraph 37 of the Settlement Scheme No, 1, framed under section 16(1)(6) and (c) of the Act, gives express right to lease out and mortgage the property, to a transferee. No doubt, he is not allowed to alienate the property otherwise and may even forfeit his right of possession if he fails to pay off the sums due to the Department. That however does not detract from the rights that he possesses so long as he observes the conditions of the transfer. It is not therefore correct to say that all rights in the property still vest in the Central Government and that consequently, the case is taken out of the purview of the Ordinance, in pursuance of the notification issued under section 3 thereof."
31. ' It will be seen that the Supreme Court denied the exemption not on the ground or for the reasons given by the High Court but on a different ground quite consistent with the language of section 3 of the predecessor Ordinance and the notification thereunder. No such restriction relatable to relationship between the parties, as was pointed out by the High Court, was made the basis of the decision.
32. ' The contention of the learned counsel for the appellant with regard to the nature of vesting depends only on the preamble to the Act and section 27(1)(2) but the impression sought to be gathered from these is dispelled from very compulsive language used in the enacted part. For example, section 27 reads as hereunder:- "27.-41) The property specified in Schedule A shall vest in the Board: Provided that--
(i) if any question arises between the Federal Government and the Board as to the boundaries of any portion of such property, Government may define and demarcate such boundaries, and the decision of Government in respect of such boundaries shall be conclusive.
(ii) any portion of the land specified in the said schedule which shall be required by the Federal Government for a public purpose may be resumed by the Federal Government without claim to compensation on the part of the Board, except for buildings or other permanent structures erected thereon.
(2) Nothing in clause (ii) of the proviso of subsection (1) shall apply to land reclaimed from harbour waters, and the Board shall be compensated for any improvements effected by it on any land resumed under that clause.
(3) The railway now under construction between the Bander station and the Keamari station may be constructed by Government along the fore share or on reclaimed land and any other work which the Federal Government, may consider necessary in the public interest may be excluded by Government in or upon any of the property specified in the said schedule, wihtout claim to compensation on the part of the Board except for buildings or other permanent structures which it shall be necessary to clear away for the purposes of such railway or work."
33. ' Schedule A, while describing the property in its title mentions as follows: "PROPERTY VESTED IN THE BOARD"
34. "All the rights, title and interest of the Secretary of State for India in Council in the following lands, buildings, workshops, piers, break-waters, groynes embankments, bridges, light-houses, signal- stations, jettey, quay, graving-dock and railway-lines, together with all the fittings and other appurtenances thereof (namely):--"
35. The Schedule being part of the Act will imply transfer of all rights, title and interest. The reservation contained in clause (ii) subsection (1) of section 27 is indeed of a different character than is in sub- section (2), but that by itself is not of any consequence in the context, because even in subsection
(2) it is not the cost of the reclaimed land which is liable to be paid but the compensation is for any improvements effected by it on any land resumed under that clause. The common feature of both is that no compensation is payable even for the re-claimed land but it is payable for the structure and improvements in both. For this reason the property does come to vest in title in the K P T and belongs to it and the exemption covers the property as well as the structures on it and the exemption ensures for the sub-tenants as well.
36. There is no merit in the appeals and both are dismissed with costs. As the very jurisdiction of the Rent Controller has been found to be wanting, the questions raised on merits of the case have not been attended to in these appeals.