1. ASLAM RIAZ HUSAIN, J; --This order shall dispose of Civil Petitions for Special Leave to Appeal Nos.675 and 720 of 1977, because they are directed against the same judgment of a learned Single Judge of the Lahore High Court dated the 18th of October, 1977.
2. The facts leading to the present petitions, briefly, are that Ch. Noor Muhammad respondent is a transferee of a building (Property No.S-11-27, S-10- New number) in Patiala Ground, McLeod Road, Lahore. The building consists of many portions in one of which Noor Muhammad apparently resides himself. At the time of transfer in 1965 different portions were occupied by different persons.
3. One of the portions was occupied by Abdus Salam and Abdur Rashid (petitioners in C.P.S.L.A.
4. 675/77). In September 1971 Noor Muhammad filed an application for their ejectment under the West Pakistan Urban Rent Restriction Ordinance, 1959, on the ground of non-payment of rent. He contended that he had given a notice under section 30 of the Displaced Persons (Compensation and Rehabilitation) Act, 1958 (hereinafter called the Act), to Abdus Salam (petitioner No.1 in C.P.S.LA.
5. 676/77) on the 27th of February, 1965, informing him of the transfer of the property in his favour and demanding rent at the rate of Rs.60 per month. He contended further that 'Abdus Salam had sublet the property in question to his younger brother Abdur Rashid (petitioner No.2 in C.P.S.L.A. 675/77).
6. Abdur Rashid petitioner filed his written statement on the 18th of November, 1971, while Abdus Salam filed his written statement on the 28th of June, 1972. Subsequently Muhammad Aslam Khan (petitioner in C.P.S.L.A. 720/77), to whom the property in question had been mortgaged, along with spore others, on the 14th of August, 1966, was also impleaded as a respondent. On the basis of the pleading of the parties the learned trial Court framed issues regarding the following questions:----
(1) Whether relationship of landlord -and tenant exists between Noor Muhammad and Abdus Salam etc.
(2) Whether notice under section 30 of the Displaced Persons (Compensation and Rehabilitation)
7. Act, 1958, sent by Noor Muhammad was duly served on Abdus Salam.
(3) Whether Abdur Rashid, the brother of Abdus Salam, is protected under section 30 of the said Act.
8. Noor Muhammad appeared as the sole witness in support of his application and also produced documents supporting his assertions. These included a copy of the notice (Ext.P3) under section 30 of the Act sent by hurl to Abdus Salam and the reply (Ext.P4) sent by Abdus Salam to the above-- mentioned notice. In rebuttal Muhammad Aslam Khan, the mortgagee of the property, appeared as R.W.1., while Abdur Rashid petitioner appeared as R.W.2. Learned trial Court held that on the issuance of the P.T.O. The relationship of landlord and tenant came into being between the parties.
9. On issue No.2 he held that notice under section 30 of the Act was not served on the tenants in accordance with law. On issue No.3 he held that since Abdur Rashid was also in possession of the property in question it was also necessary to serve him with a notice under section 30 of the Act.
10. The learned Rent Controller, therefore dismissed the application.
11. Noor Muhammad filed an appeal against this order which was heard by Ch. Muhammad Nasim, Additional District Judge. Lahore. Relying on Ext p3, the copy of the notice under section 30 of the Act addressed by Noor Muhamr4ad to Abdus Salam and Ext.P4, the reply of the letter, the learned first Appellate Court reversed the findings on issue No.2 and held that the notice under section 30 had, in fact, been properly served 'on Abdus Salam. He also observed that in his reply, Ext.P4, Abdus Salam had not named his brother Abdur Rashid a, a person, in possession of the disputed property, and held with respect to issue No.3 that Abdur Rashid was not in possession in his own right and as such he was not a statutory tenant of the disputed property. Therefore, he was not entitled toy a notice under section 30 of the Act. Consequently the learned first Appellate Court accepted the appeal by its judgment dated the 13th of December, 1975; set aside the judgment of the Rent Controller and ordered the eviction of Abdus Salam and Abdur Rashid from the disputed property.
12. Against this judgment Abdus Salam and Abdur Rashid filed an appeal (SA.O. No.572/75).
13. Muhammad Aslam, the mortgagee, also filed an appeal (S.A.O. No.19/76) against that judgment. It is pertinent to note that the same learned counsel, namely, Syed Zamir Hussain, Advocate, filed and argued both the appeals before the High Court. The learned Single Judge of the High Court after hearing the arguments of the learned counsel for the parties dismissed both the appeals by a well-considered and elaborate judgment dated the 18th October, 1977. It is against that judgment of the High Court that two petitions for special leave to appeal under consideration at present have been filed; one by Abdus Salam and Abdur Rashid, who are represented by Syed Zamir Hussain, Advocate, and the other by Muhammad Aslam Khan mortgagee, who is represented by Sh. Munir Ahmad, Advocate.
14. We have heard the learned counsel for petitioners in both the petitions at length and have also heard the learned counsel for Noor Muhammad respondent.
15. The main contention raised on behalf of Muhammad Aslam, mortgagee, was that after the execution of the mortgage-deed on the 14th August, 1966, in accordance with the terms of the said deed he became entitled to realise the rent from the tenants as "mortgagee with possession". It was also contended that he had started receiving rents from Abdus Salam and Abdur Rashid at the rate of Rs.30, each, per month from December, 1972, onward. As such, the relationship of landlord and tenant did not exist between Noor Muhammad on one side and Abdus Salam and Abdur Rashid on the other.
16. Syed Zamir Hussain, learned counsel for Abdus Salam and Abdur Rashid, on the other hand, assailed almost every portion of the judgment of the High Court and urged, inter alia, that the relationship of landlord and tenant did not exist between Noor Muhammad and his clients, namely Abdus Salam and Abdur Rashid, that the notice under section 30 of the Displaced Persons (Compensation and Rehabilitation) Act, 1958, had not been sent to Abdus Salam, through registered post as required by the said section and was, therefore, bad in law, that no notice under section 30 of the Act had been sent to Abdur Rashid at all that after the execution of the mortgage- deed the property in question came under the possession of Muhammad Aslam Khan mortgagee and that the learned Single Judge of the High Court had erred in holding that there was a collusion between the mortgagee and the tenants. He also objected to the learned Judge of the High Court having placed reliance or taking into account the statement at the Bar of Mr. Kamaluddin, the learned counsel for Noor Muhammad before the High Court, to the effect the he had sent the notice under section 30 of the Act to Abdus Salam by registered post on the instructions of his client Noor Muhammad.
17. We have carefully considered all the above-noted contentions raised by the learned counsel for the petitioners.
18. It is not disputed that the building in question was transferred to Noor Muhammad respondent in 1965 and at that time Abdus Salam was residing in the premises in question. As such he became a statutory tenant of Noor Muhammad by virtue of subsection (1) of section 30 of the Displaced Persons (Compensation and Rehabilitation) Act, 1958. It is, however, disputed by Noor Muhammad that Abdur Rashid who was also living in the same portion of the building, was in occupation in his own right. According to him Abdur Rashid was merely residing as a licensee with his elder brother Abdus Salam, who later on went to Jeddah, subletting the premises to Abdur Rashid. The fact that Noor Muhammad sent a notice under section 30 of the Act (Ext.P 3) to Abdus Salam as well as the latter's reply (Ext.P 4) thereto is not disputed. It is, however, contended that since the notice (Ext.P 3) under clause (b) of subsection (1) of section 30 of the Act sent by Noor Muhammad to Abdus Salam had not been sent through registered post as required by the aforementioned subsection, it was, therefore, not competent for him to have filed the ejectment application. Reliance for this proposition was placed on the observations of the majority judgment in EA. Evan v. Muhammad Ashraf PLD 1964 SC 536 at page 548, marked as portion `D".
19. It may be mentioned that the reply (Ext.P 4) to the notice under section 30 of the Act was not produced before us by any of the learned counsel, but apparently it was produced before the learned first and second Appellate Courts, who have relied on its contents. The learned Single Judge of the High Court has observed in paragraph 7 of the impugned judgment that "the reply is a lengthy one and contains all possible objections". The only objection raised about this notice (Ex.P 3) before the High Court and before us, is that Noor Muhammad, the transferee of the building, had not sent the said notice by "registered post". The notice in question had been drafted and sent on behalf of Noor Muhammad by his counsel Mr. Kamaluddin who also appeared for him (Noor Muhammad) before the High Court. It has been observed in the impugned judgment that while making his submissions before that Court as to whether or not the aforementioned notice had been sent through registered post, he offered to withdraw from the case and make a statement on oath to the effect that the notice addressed by, him (i.e. By the learned counsel for Noor Muhammad) to Abdus Salam was sent by him through registered post. The learned Single Judge of the High Court, however, did not consider it necessary for the learned counsel to withdraw from the case and make a statement. He took into consideration the statement of Mr. Kamaluddin, Advocate, as a statement at the Bar and observed that it could be relied upon for coming to the conclusion that the notice had been sent through registered post. We agree with the view taken by the learned Judge, but we are also of the view that there are other strong indications that the notice m question had been sent in the manner prescribed by section 30 of the Act, i.e. Through registered post.
20. In the first place although Abdus Salam had taken all the possible objections in his reply (Ext. P 3), but he did take the objection that the notice was bad in law for not having been sent through registered post; secondly Abdus Salam did not care to appear as a witness before the learned Rent Controller either to deny the receipt/service of the notice (Ext.P3) or to allege that it had not been served on him through registered post; thirdly his brother Abdur Rashid who appeared at R.W.2 did nor even make a bare assertion that the notice received by his brother Abdus Salam had not been sent through registered post, and fourthly when Noor Muhammad appeared as P.W. In support of his application for the ejectment and stated that he had sent a notice under section 30 of the Act to Abdus Salam, not a single question was put to him during cross-examination to suggest that the notice in question had not been sent through registered post.
21. In view of the above discussion we are inclined to agree with the findings of the learned Judge of the High Court that a valid notice was sent by Noor Muhammad to Abdus Salam petitioner (tenant) and was duly received by the latter.
22. The contention that Abdur Rashid petitioner was in possession of the premises in question in his own right and, therefore, should also have been sent a notice under section 30 of the Act, has no force. Abdur Rashid petitioner has admitted in his deposition before the Rent Controller that he was residing in the premises since 1947. He further admitted during the cross-examination that he and his elder brother Abdus Salam were living in the house "jointly". He admitted further that his age on the day when he made his deposition was 30 years. In other words in 1947 he was only 2 years old.
23. Evidently at that tender age he could not possibly have been allotted the premises in question independently. It is, therefore, obvious that at that time Abdur Rashid was residing in the premises in question as a dependent of his elder brother Abdus Salam who was in possession of the same. It is further admitted that after giving up his service Abdus Salam was not doing any business; that his wife was a service woman in Jeddah and that he, namely Abdus Salam, had joined his wife in Jeddah, thus leaving the house with Abdur Rashid. No doubt he came from Jeddah during the pendency of the proceedings and submitted his written statement on the 28th of June, 1972, but he did not care to appear as a witness in the case to rebut the assertion made by Noor Muhammad (landlord) on oath, as P.W.1, to the effect that `Abdus Salam had left for Jeddah after introducing Abdur Rashid as sub-tenant without the consent of the landlord. Moreover, even in the reply (Ext.P 4) sent by Abdus Salam to Noor Muhammad transferee/landlord in 1965 there was no mention of the claim subsequently made that Abdur Rashid was also a tenant in the premises in dispute, in his own right. As such we are inclined to agree with finding of the learned Judge of the High Court that Abdur Rashid had been introduced as a sub-tenant in the property by Abdus Salam without the consent of the landlord and further that Abdur Rashid sub-tenant was not entitled to any protection under section 30 of the Act and the landlord was, therefore, not required to send him a notice under clause (b) of subsection (1) of section 30 of the said Act. It may also be mentioned that it is provided in subsection (3)(ii) of section 30 of the Act that nothing in proviso (b) to subsection (1) (regarding notice) shall apply to a tenant "who after the transfer has sublet or otherwise parted with the possession of the house or shop or any part thereof...". Consequently, as observed by the learned Judge of the High Court, even Abdus Salam lost the protection of section 30 of the Act because he had introduced a sub-tenant in the premises and, as such no notice under section 30 of the Act was required to be sent even to him.
24. It may be recalled that Noor Muhammad had mortgaged the building on the 14th of August, 1966, to Muhammad Aslam Khan and four others. Muhammad Aslam Khan was impleaded as a party sometime after the ejectment application had been filed and is also a petitioner before us in C.P.S.L.A. 720 of 1977. It was argued on his behalf that because he had become a "mortgagee with possession" by virtue of the mortgage-deed, Noor Muhammad had no locus standi to file the ejectment application. This, argument was based on the contention that after Noor Muhammad mortgaged the premises, the relationship of landlord and tenant no longer subsisted between him and Abdus Salam, etc. In support of this contention it was asserted that Abdus Salam and Abdur Rashid were paying the rent to Muhammad Aslam Khan (mortgagee) since December, 1972. It was also urged that Noor Muhammad had filed a suit against Muhammad Aslam Khan for redemption of mortgage on the ground that latter had received more rents than the principal amount advanced by the mortgagees. This was intended to show that the mortgagees had been accepted by Noor Muhammad as being landlords.
25. In support of the contention that Muhammad Aslam Khan was mortgagee with possession the learned counsel for the petitioner drew our attention to the terms of the mortgage deed wherein it is stated, inter alia, that mortgagor (Noor Muhammad); ---------hereby transfers by way of mortgage with possession to the mortgagees, jointly, all the property described above to the intent that the sold premises shall remain in possession of the mortgagees as security for the payment to the mortgagees jointly of the said sum of Rs.40,000 (rupees forty thousand only) in accordance with the provisions hereinafter contained."
26. It was submitted that the words (underlined by us) of the above-noted portion of paragraph 1 of the `terms' of the mortgage-deed show that the mortgagees had obtained the possession of the building. But we are not inclined to agree with this submission. The learned Judge of the High Court has considered this contention at length in paragraphs 9, 10 and 11 of his judgment. As observed by him, it is not uncommon for the parties to a mortgage to formulate the covenants in such a manner as to avoid the rigours of certain restrictive law and to secure interest at a very high rate without appearing to do so. A caution to this effect has also been given by the Supreme Court in Samandar Khan v. Mst. Maqbool and others (1974 SCM R 388), which has also been referred to by the learned High Court Judge in the impugned judgment. It is pointed out by their Lordships in that case that where exorbitant interests are intended to be obtained by the mortgagees on the money advanced by them, the terms are so couched as to enable them to collect the rents, etc, towards interest which ultimately may yield a high percentage of interest to money-lenders. In most such cases possession is in fact not delivered although it is so mentioned in the terms of the mortgage- deed. It would be noticed on a reading of the mortgage deed in the present case that although payment of interest on the principal amount is envisaged no rate of interest has been mentioned.
27. In the last portion of the opening part it is stated:----- "AND WHEREAS the mortgagees have agreed with the mortgagor to lend him the sum of Rs.40,000 (rupees forty thousand only) (in equal shares inter se) upon having the repayment thereof with interest hereinafter appearing."
28. Then, after saying that the mortgage "shall be with possession" it is stipulated in paragraph 11(ii) that: henceforth the rents and profits of the mortgaged property collected by the mortgagee will, after paying the Government revenue, etc . Be appropriated by the mortgagees in lieu of interest on the said sum of Rs.40,000."
29. It will be noticed that rate of interest is not specified and all the rents are to be appropriated towards the payment of interest. Therefore, it is evident from these terms that the mortgage was, in fact, only a device of obtaining interest on an exorbitant and unconscionable rate. We notice further that neither Abdus Salam nor Abdur Rashid petitioners have asserted in their written statements that after the execution of the aforementioned mortgage-deed in August, 1966, they had started paying the rent to Muhammad Aslam Khan. Even Muhammad Aslam Khan petitioner/mortgagee, who has claimed that he started receiving rent from them, at the rate of Rs.30 each, in December, 1972, has not mentioned anything in his statement about having made any claim or demand from the tenants for the arrears of rent for the period between August, 1966 anal December, 1972. Nor did he make any effort to collect the same. This fact alone would be sufficient to show that, in fact, the mortgagees were not in possession of the property in question. It is interesting to note that Noor Muhammad filed the ejectment application in December, 1971 against Abdus Salam and Abdur Rashid. Abdur Rashid filed his written statement on the 18-11-1971 while Abdus Salam on his return from Jeddah, filed his written statement on 28-6-1972. Since both of them had not mentioned the payment of any rent to Muhammad Aslam or any other mortgagee, Muhammad Aslam could not, in his own written statement, or deposition, assert that he had received any rent from the tenants-petitioners before June, 1972. It is for this reason that he asserted that he started receiving rents from them after that date, i.e. In December, 1972.
30. Mr. Zamir Hussain learned counsel for the petitioners in C.P.S.L.A. 675/77 also admitted before us that his clients had accepted Muhammad Aslam Khan as landlord and had been paying rent to him from December, 1972, onward. The learned Judge of the High Court has observed that there was a collusion between the tenants and the mortgagee. He has mentioned the reasons for this view in paragraph 11 of his judgment. From the tenor of the argument of the learned counsel for Muhammad Aslam Khan and the counsel for Abdus Salam, etc. Before us we have also gathered the same impression. The collusion between the parties is, in fact, demonstrated by the fact that the same counsel, namely, Syed Zamir Hussain, Advocate, had filed the two appeals, i.e. SA.O.
31. No.572 of 1975 on behalf of Abdus Salam, etc. (the tenants) and S.A.O. No.19 of 1976 on behalf of Muhammad Aslam Khan (mortgagee) and also appeared in and argued both the aforementioned appeals.
32. From the above discussion we conclude that Muhammad Aslam Khan and other mortgagees were not in possession of the building and that the tenants, namely, Abdus Salam and Abdur Rashid had belatedly colluded with Muhammad Aslam Khan; accepted him as the landlord (and also probably made payment of rent to him), while Muhammad Aslam Khan stood to gain by establishing his position as the "landlord" and receiving rents from the tenants.
33. We have also carefully considered the question as to whether or not the relationship of the landlord and tenant continued to exist between Noor Muhammad and Abdus Salam, after the execution of the mortgage-deed. As already observed by us, the provision in the mortgage-deed for the payment of rent to the mortgagees was merely a device for obtaining interest at a high rate. As correctly observed by the learned Judge of the High Court the rent to be collected by Muhammad Aslam Khan under the terms of the mortgage deed was not in fact, payable to them as "rent". Nor was it payable to them "in respect of any building". If at all, it was payable as interest in respect of the loan advanced by Muhammad Aslam Khan mortgagee to Noor Muhammad. As such, according to the definition of the terms of the "landlord" and "tenant" as given in sections 2(c) and 2(i) of tie West Pakistan Urban Rent Restriction Ordinance, 1959; neither is Muhammad Aslam Khan mortgagee the landlord nor are Abdus Salam and Abdur Rashid his tenants in respect of the premises in question. The tenancy created between Noor Muhammad and Abdus Salam was a statutory one and could not be taken away by the execution of such a mortgage-deed. It could also be argued that by the terms of this mortgage-deed Noor Muhammad had merely authorised Muhammad Aslam Khan, etc. (mortgagees) to collect the rents from the tenants and this did not, irrevocably take away his own right to collect the rent from the tenants under the Urban Rent Restriction Ordinance. Supposing the mortgagee failed to collect the rent, the liability of the tenants to pay rent to the owner-mortgagor would not come to an end merely because he had authorised some one else to collect the same. As such we are of the view that the relationship of landlord and tenant continued to subsist between Noor Muhammad and Abdus Salam notwithstanding the terms of the mortgage-deed with regard to "possession".
34. The learned Judge of the High Court has recorded a very well reasoned and elaborate judgment.
35. All the contentions raised by the learned counsel for the petitioners during the oral submissions as well as the contentions tabulated and handed over to us by Syed Zamir Hussain, Advocate, stand answered in his judgment, which we fully endorse and uphold by the present order.
36. The petitions are consequently dismissed.