' CH. MUSHTAQ AHMAD KHAN, J.---This RSA arises out of a suit filed by respondents against the appellant, their tenant, seeking decree of ejectment and payment of compensation for the period April 1987 to January, 1989 during which period, possession of the appellant was allegedly unauthorised.
2. Briefly stated facts of the case are that building No,5-M, Markaz 0-7, Islamabad was taken on rent by the appellant at the rate of Rs,18,000 p.m. The lease period originally fixed expired on 31-3- 1987. The appellant, however, continued to retain possession of the premises referred to above and continued depositing rent at the rate of Rs,18,000 p.m. in the bank account of the respondents, which rent had been withdrawn by the respondents. On 3-6-1987, the respondents issued a notice to the appellant to vacate the premises contending therein that the lease period has since expired, therefore, the premises should be vacated. The appellant did not vacate the premises even thereafter and continued paying rent at the rate of Rs,18,000 p.m. in the mode referred to above.
The rent deposited was withdrawn by the respondents without oral or written protest. Another notice was issued to the respondents on 1-8-1987 seeking vacation of the premises. Both the notices were not replied to by the appellant who continued depositing Rs, 18,000 in the bank account of the respondent. The respondents on 29-9-1988 filed a suit seeking decree for ejectment of the appellant as well as for payment of compensation for use and occupation of the premises after the expiry of the lease period w.e.f. March, 1987 up to the time of institution of the suit. The compensation has been claimed in the plaint at the rate of Rs,50,000 p.m. The appellant was served in the suit and handed over the vacant possession of the premises in question in January 1989, filed written statement stating the aforementioned fact of vacation of the premises and denied its liability to pay compensation on the ground that as the respondents have been accepting rent without any protest, therefore, their occupation of the premises was not unauthorised, inasmuch as the lease shall be deemed to have been renewed their status will be not that of a tenant-by-sufferance but that of "tenant holding over" with an implied consent of the landlords, therefore, they are not liable to pay compensation. The premises in question were rented out to the Estate Office (Government of Pakistan, Ministry for Housing and Works) in January 1990 at the rate of Rs,34,000 p.m. as rent. On the basis of the pleadings of the parties, learned trial Court settled the following issues:--
(1) Whether the plaintiffs are entitled for the compensation for the use of the disputed property from the defendant from 1-4-1987 and onwards? If so, on what rate, to what extent?
(2) Relief.
' After recording of evidence vide judgment and decree dated 21-12-1991, the learned trial Court held that the amount of compensation shall be at the rate of Rs,34,000 p.m. i.e. the rate for which the premises were rented out in January, 1990 and as the appellant has already paid Rs, 18,000 p.m., the balance amount of Rs, 16,000 p.m., shall be paid by the appellant to the respondent w.e.f.
April 1987 to January, 1989. Aggrieved of this judgment and decree, the defendant has filed this RFA.
2. Mr. Muhammad Saeed Bhatti, Advocate has appeared on behalf of the appellant whereas Khawaja Muhammad Farooq, Advocate has appeared on behalf of the respondents. Learned counsel for the appellant has contended that admittedly the appellant has been paying rent at the rate of Rs,18,000 p.m. through cheques which used to be deposited in the account of the respondents who have been withdrawing the same without any protest for quite a long time, it shall be presumed that the lease stood extended automatically. Hence possession of the appellant being not unauthorized, the respondents are not entitled to the payment of compensation. In support of his argument, learned counsel has placed reliance on case of Haji Yaqoob Khan v.
Murree Cantonment Board, Murree (1987 CLC 108).
3. As against the above arguments addressed by the learned counsel for the appellant, Kh.
Muhammad Farooq, Advocate for the respondents has vehemently argued that the possession of the appellant was that of a tenant at sufferance inasmuch as two notices were issued to the appellant for vacation of premises but the appellant failed to vacate the premises and therefore it is positively established on record that the occupation of the premises by the appellant after expiry of lease period was unauthorized. Learned counsel has however admitted that the appellant has been depositing rent in the account of the respondents who have been withdrawing the same without protest. In support of his arguments, learned counsel has placed reliance on case of Messrs Rehman Cotton Factory v. Messrs Nichiman Co. Ltd., Karachi PLD 1970 Lah. 455 and M/s. Rehman Cotton Factory v. M/s. Nichimen Co. Ltd. (Formerly M/s. Japan Cotton and General Trading Co. Ltd.), Karachi PLD 1976 SC 781.
4. We have considered the arguments addressed by the learned counsel for the parties and have also gone through the record as well as the judgments cited at Bar. In order to appreciate the respective contentions raised by the learned counsel for the parties, it will be necessary to reproduce the relevant provisions of Transfer of Property Act as well as the relevant portions of the judgments cited at Bar by the learned counsel for the parties. Following provisions of Transfer of Property Act, which are relevant to be considered in order to resolve the controversy, are reproduced as under:--- "Section 105 of T.P.Act:.
' A lease of immovable property is a transfer of a right to enjoy such property made for a certain time, express or implied or in perpetuity in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee who accepts the transfer on such terms.
Lessor, lessee, premium and rent defined.
' The transferor is called the lessor, the transferee is called the lessee, the price is called the premium and the money, share, service or other thing to be so rendered is called the rent.
Section 111.
' A lease of immovable property determines---
(a) by efflux of the time limited thereby;
(b) where such time is limited conditionally, on the happening of some event by the happening of such event;
(c) where the interest of the lessor in the property terminates on, or his power to dispose of the same extends only to the happening of any event;
(d) in case the interests of the lessee and the lessor in the whole of the property become vested at the same time in One person in the same right;
(e) by express surrender; that is to say, in case the lessee yields up his interest under the lease, to the lessor by mutual agreement between them;
(f) by implied surrender;
(g) by forfeiture; that is to say,---
(1) in case the lessee breaks an express condition which provides that, on breach thereof, the lessor may re-enter; or (2) in case the lessee renounces his character as such by setting up a title in a third person or by claiming title in himself; or (3) the lessee is adjudicated an insolvent and the lease provides that the lessor may re-enter on the happening of event; and in any of these cases the lessor or his transferee gives notice in writing to the lessee of his intention to determine the lease;
(h) on the expiration of a notice to determine the lease or to quit, or of intention to quit, the property leased, duly given by one party to the other.
Section 116.
' If a lessee or under-lessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under-lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as specified in section 106."
' A bare perusal of the abovementioned provisions of the Transfer of Property Act clearly establishes that ordinarily the lease of immovable property stands determined by efflux of time fixed in the lease agreement. However, if the tenant remains in possession of the premises after determination of the lease A period, the lease shall stand renewed if the lessor accepts the rent from the lessee or otherwise assents to his continuing in possession of the property. The provisions referred to above have been interpreted in the judgments cited by both the learned counsel for the parties. In case of Haji Yaqoob Khan referred to supra relied upon by the learned counsel for the appellant at pages 117 to 121 of the report, it has been held as under:--- "In clause (a) of the former section 111, it is provided that a lease of immovable property would determine by efflux of time limited thereby and in the latter section 116, it is provided that a tenant remaining in possession of the property after the determination of lease would cause a renewal of his lease on account of the lessor accepting rent from the lessee or otherwise assenting to his continuing in possession of the property. In Kai Khushroo Bezonjee Capadia v. Bai Jerbai Hirjibhoy Warden and another AIR 1949 FC 124, it has been observed at page 127 of the report as under:-- 'It is perfectly right that the tenancy which is created by the 'holding over' of a lessee or under- lessee is new tenancy in law even though many of the terms of the old lease might be continued in it, by implication; and it cannot be disputed that to bring new tenancy into existence, there must be a bilateral act. What section 116, Transfer of Property Act, contemplates is that on one side there should be an offer of taking a renewed or fresh demise evidenced by the lessee's or sub-lessee's continuing in occupation of the property after his interest has ceased and on the other side there must be a definite assent to his continuance of possession by the landlord expressed by acceptance of rent or otherwise.' ' and then, after considering the effect of acceptance of rent and the subsequent repudiation thereof, it has been observed at page 130 of the report as under:--- ` The ordinary legal consequence of accepting payment as indicated by the debtor would follow in such cases, however much the creditor might attempt to repudiate them. This being the position it must be held on the facts of this case that money was not only paid as rent by defendants 2 and 3 but was also received as rent by the plaintiff and consequently a monthly tenancy under the provision of section 116, Transfer of Property Act, did come into existence. So long as this monthly tenancy is not determined in a manner recognized by law, the plaintiff's suit for ejectment must fail.'
' In the appeal below, learned Additional District Judge seems to have thought that acceptance of rent by the lessor could be the only mode of attracting the rule of hold-over of the property and he appears to have ignored the words 'or otherwise assents to his continuing in possession', appearing in section 116 of the Act. Such assent need not necessarily be express and it can even be implied from the facts and circumstances. In Ashutosh Basak and others v. S.M. Rahmatullah and others 1970 SCMR 386, their Lordships of the Supreme Court repelled the contention that a landlord could, by merely refusing to accept rent, lawfully terminate a tenancy and it was held that where the relationship of landlord and tenant is established and the tenant holds over the property but the landlord neither takes the rent nor brings a suit for ejectment after the expiry of the lease- period, there a presumption arises that the landlord has assented to holding-over. Learned counsel for the petitioner has also rightly pointed out that even as late as 21-12-1985 the respondent has admitted in Civil Miscellaneous No, 1318/C of 1985 that revision petitioner is paying Rs,3,00,000 per annum and, further that it has through his counsel also prayed for withdrawal of the money deposited in 'its favour by the petitioner and obtained an order on the point from this Court. The reservation then made with regard to such withdrawal being without prejudice to the case of the respondent, does not prevent it from being regarded a voluntary acceptance of rent within the meaning of section 116 ibid. There is ample authority for the view that such collection of rents by the respondent constitutes an act of its assent to the petitioner continuing in possession- of the premises. In Hafiz Muhammad Budha v. Ghulam Qadir and others 112 IC 651 (Lah.), where, after the expiry of the term of a lease for only one year, the tenant had continued in possession and the landlord had after some years of the expiry of the lease-year, sued for recovery of arrears of rent but for ejectment, this Court held:-- ' Institution of a suit merely for arrears of rent amounted to a consent on the part of the landlord to the tenants remaining in possession and attracted the application of section 116 of the Transfer of Property Act.'
' Again in Ramsunder Tewari and another v. Dulhin Bataso Kuer AIR 1935 Pat. 271, it was held that a landlord's intention of recognizing the continuance of the tenancy was sufficiently indicated from the fact that a suit for recovery of rent had been instituted by him. Even in cases of forfeiture of leases under section 111(g) collection of rent accruing due subsequent to forfeiture, after becoming aware of the fact that forfeiture has been incurred, has been held to amount in law to waiver of forfeiture. See, for instance, Banathoor Krishan Namburdripad v. Kunkah Nair AIR 1925 Mad. 914 and Shira Prasad Singh v. Smt. Mandira Kumari Debi AIR 1940 Pat.
478. Again, in Anshutosh Mullick and others v. Secretary of State AIR 1920 Cal. 655 forfeiture of lease due to infringement of the terms of the lease-deed, was held to have been waived on account of realization of rent for the period subsequent to the incurring of forfeiture by the Deputy Commissioner by attachment of movables of the lessee, and, so also, in Chattar Singh and others v. Nand Kishore AIR 1914 All. 460 (2), it has held:- `Where a lease is forfeited for an act done in contravention of the terms of the lease, an acceptance of rent subsequent to forfeiture would amount to waiver.'
' Such acceptance of rent even under protest or conditionally, as without prejudice of forfeiture, has been held to constitute waiver thereof. In Bengal Nagpur Railway Company Limited v. Firm Bal Nukunda Biseswa r Lal AIR 1923 Cal. 663, it was held :--- `The acceptance of rent due after forfeiture from the lessee and this notwithstanding the protest of the lessor that such acceptance is without prejudice to his right to insist upon his forfeiture ... operates as a waiver of the notice to quit.'
' Again, in Raja Sri Krishna Narain Singh v. Sheikh Nazir Hassan and others AIR 1939 Oudh 257, it has been held:-- "If there is any forfeiture under the principle of section 111(g) (2), it is waived by the acceptance of rent by the landlord which became due since the forfeiture even if the acceptance of rent is under protest."
' It will also be in point to notice that in the King v. Paulson and others AIR 1920 PC 190, where there was a clause in the lease-deed itself providing that waiver of forfeiture on account of breach of conditions will not be operative unless expressed in writing, while considering the effect of receipt of rent be the landlord subsequent to the arising of the liability for forfeiture, it was observed at page 195 of the report:-- "The authorities appear to their Lordships to establish that the landlord, by the receipt of rent under such circumstances, shows a definite intention to treat the lease or contract as subsisting has made an irrevocable election so to do, and can no longer avoid the lease or contract on account of the breach of which he had knowledge."
' In Sripada Satyanarayana Sarma v. Ravikanti Venkataramamurthy and others AIR 1935 Mad. 454, it was held that a conditional acceptance of rent by the lessor after default involving a forfeiture is nonetheless a waiver. To the same effect is also Matookdhari Skukul v. Jugdip Narain Singh and others AIR 1915 Cal. 454 (D.B.) wherein rent deposited had been received under protest and it was held that acceptance of rent even under protest would operate in favour of the payer as a waiver of any forfeiture incurred because protest does not make the receipt anything else than the receipt of rent.
9. Thus, in accepting the rent from the petitioner up to 31-10-1983 respondent had not merely made an irrevocable choice in the petitioner continuing in possession of the property as a tenant holding over but had also waived the forfeiture incurred under clause 16 of the lease-deed of 1979 due to his failure to peacefully hand over the possession, in accordance with its clause 14. Even the subsequent withdrawal by the respondent of rent on the basis of the order secured from this Court on (?)-5-1985, though with reservation, has the same effect. Such receiving of rents would not be otherwise than as voluntary and would not convert the money so received into anything other than rent and has to be regarded to have invested a right in the petitioner to continue as a tenant holding over in the minimum, as a year to year lessee because by agreement of the parties rent was determined to be payable on yearly basis and has all along been so paid, which, as has been held in Durgi Nikarini v. Goberdhan Bose AIR 1915 Cal. 64 and Mst. Bevi Umma v. Thekkiniyedath Allath Shamu Memon and another AIR 1917 Mad. 141, raised a presumption about the tenancy being from year to year and constitutes a contract to the contrary within the contemplation of section 106 of the Transfer of Property Act, as has been held in the above-cited Allahabad and Calcutta cases of 1914 and 1915. Again, in Adinath Bhattacharjee v. Krishna Chandra Bhattacharjee and others AIR 1943 Cal. 474, a Division Bench of Calcutta High Court held:-- `The reservation of yearly rent raises a presumption that lease is from year to year, in the absence of anything to the contrary.'
10. Acceptance of rents aforenoted is only one of the factors indicating the assent of the respondent to the petitioner continuing in possession of the premises and since it has not been asserted by the learned counsel for the respondent that it has taken any step under the law for dispossession of the petitioner, therefore, a further presumption to that effect arises in favour of the petitioner within the scope of the wards 'or otherwise assents', appearing in section 116 of the Transfer of Property Act. In the above-cited case of Ashutosh Basak 1970 SCMR 386, the tenant was found to be continuing in possession of the property after the expiry of the period of lease but the landlord had neither taken rent nor filed a suit for his ejectment, their Lordships of the Supreme Court did not accept the contention that a landlord could, by merely refusing to accept rent, lawfully terminate a tenancy and declared the law as under:--- ' When the existence of the relationship of landlord and tenant has once been proved and the landlord after the expiry of the lease neither takes rent nor brings a suit for ejectment for so long a period as six years, as in the present case, it might well be presumed that he had assented to the holding-over.'
11. Most of the arguments of the respondent's learned counsel stand answered in the above discussion. As regards his contention about the forfeiture due to the violation of the terms of the lease-deed entitling the respondent to act under rule 9(iv) of the Pakistan Cantonment Property Rules, 1957, forfeiture was no doubt incurred in not handing over the possession of the premises upon the determination of the lease towards the end of the year 1982 but it stood waived in the respondent having thereafter accepted rent from the petitioner and hence it is not open to the respondent to thereafter take cognizance of it. Moreover, in Habibullah Shah v. Surji 15 Indian Cases 857, it was held:--- ` If a lease reserves to the lessor the right of entry in case of a breach of a covenant, the result of the breach is at best to confer upon the lessor the right of re-entry, and not to entitle the lessor to make a forcible entry. If the lessee resists the exercise of the right to re-enter the lessor's only remedy is to enforce his right to re-enter by a suit in ejectment'."
' It has been laid down in M. Ghani v. MA. Mulick and Brothers and 3 others 1973 SCMR 90 that unless and until a tenant is ejected in due process of law he has a right to remain on the premises, and- no one can dispossess him. Then, in Rudrappa Bin Sankappa v. Ramchandra Hablikar and another ILR 29 Born. 213, where a tenant holding-over after the expiry of the period of tenancy was dispossessed without his consent by the landlord, on the tenant's claim to recover possession from the landlord with reference to section. 9 of the Specific Relief Act, it was held by a Division Bench of the Bombay High Court that "the words 'due course of law' do not have to be taken merely as equivalent to the word 'legally' but have to be generally regarded as indicating that the thing should have been submitted to the consideration and pronouncement of the law and it was declared that thereby is meant the regular normal process and effect of the law operating on a matter which has been laid before a Court for adjudication".
The resume of the law declared in the aforementioned judgment is that the lease stands renewed by acceptance of rent by the landlords even if the same is received with some reservation and at any rate collection of rent by the landlord does constitute assent to the tenant to continue in possession of the premises and further that such acceptance of rent will amount to waiver of the forfeiture of the tenancy by efflux of time. The above view is also supported by the law declared in case of M/s. Rehman Cotton Factory v. M/s. Nichiman Co. Ltd. PLD 1976 SC 781, at page 784 in which report their Lordships of the Supreme Court have held as under:-- "As to the submission that the appellant's position after the 30th June, 1956 continued to be that of a tenant 'holding over' within the meaning of section 116 of the Transfer of Property Act there is clear distinction between a tenant continuing in possession after the determination of the lease with the consent of the lessor whether express or tacit and a tenant continuing in possession without the consent of his lessor. In the latter case, the lessee's position is that of a 'tenant by sufferance' in the language 'of the English Law'. Under section 116 of the Transfer of Property Act, the essential condition for treating a lessee, as tenant 'holding over' is that the lessor accepts rent or otherwise assents to the lessee's continuing in possession."
' There is no cavil with the legal proposition laid down in case of Messrs Rehman Cotton Factory v.
Messrs Nichimen Co. Ltd., Karachi PLD 1970 Lah. 455 that it is the tenant who is to prove consent of the landlord to hold over. The law declared in case of Mrs Zarina Khawaja v. Agha Mehboob Shah PLD 1988 SC 190 is to the effect that in cases arising out of Rent Restriction Ordinance the tenant shall be governed by terms and conditions with regard to payment of rent by which he was governed prior to the expiry of the lease period inasmuch as his vacation is only possible through an order of eviction passed by the learned Rent Controller. This judgment is although not directly applicable to the facts and circumstances of this case, yet the principles laid down therein are definitely attracted to the facts and circumstances of the case in hand by anology.
5. Keeping in view the law declared in the aforementioned judgments as well as the statutory provisions of law on the subject and admitted facts of the case in hand, it stands established that the possession of the appellant was not unauthorized. For quite a long time the landlords have been accepting rent and withdrawing the same from their account. In spite of the fact that they have twice issued notice seeking vacation of the premises firstly in June, 1987 and secondly in December 1987, they continued receiving rent without any protest or objection for fairly a long period of time, and it is only in September 1988 that they took real overt act by filing of a suit seeking ejectment of appellant as well as the payment of compensation. On service, the appellant immediately vacated the premises and therefore, it cannot be said that the respondents were entitled to the grant of compensation for use and occupation of the premises by the appellant as the appellant could not be held to be a tenant by sufferance. Even otherwise, the compensation granted by the learned trial Court is arbitrary and without any lawful basis and justification and the premises in question have been let out to the Government of the Pakistan at the rate of Rs,34,000 p.m. in January, 1989. There is absolutely nothing in evidence to show as to what was the rate of rent during the period prior thereto. There is no basis for the learned trial Court to determine the rate of compensation as Rs,34,000 p.m. At any rate as it has been held that the appellant was not liable to pay compensation and there is no cogent evidence to prove the rate of compensation at the rate of Rs, 34,000. Hence finding rendered by the learned trial Court on issue is set aside and the said issue is decided against the plaintiff.
' As a result of our findings on issue No, 1, the suit filed by the respondents is dismissed, with no order as to costs.