' SAJJAD ALI SHAH, J.---By this appeal with leave is challenged judgment dated 15-12-1987, whereby F.R.A. No,635 of 1986 is allowed and order of eviction passed by Rent Controller is set aside. Briefly stated the relevant facts giving rise to this appeal are as under:--
2. - Appellant and respondent are landlord and tenant respectively (to be referred hereafter as such) of premises of Plots Nos.764 and 765, "C" Commercial Area, situated in Pakistan Employees Cooperative Housing Society, Karachi. Rent is Rs,2,500 (excluding water and conservancy and fire tax) payable in advance on first of each month. Tenancy came into existence consequent upon execution of agreement dated 1-6-1973.
3. Landlord filed Rent Case No,2021 of 1976 in the Court of 1st Senior Civil Judge and Rent Controller (East), Karachi, seeking eviction on the grounds of subletting by tenant to Hotel Plaza, default in payment of rent from November, 1975 till filing of the rent case, nuisance as premises were being used for promotion of prostitution and impairing value and utility of the said premises.
4. Written statement was filed by tenant Mchromal with admission that he was tenant at monthly rent of Rs,2,500 with denial in respect of remaining allegations. Averment was made that premises were commercial in nature as provided in tenancy agreement and before letting out to the tenant previously premises were being run in the name of Society Hotel and Bar. Default was denied with assertion that landlord stopped accepting rent from November, 1975 with intention of enhancing the rent. Ile was requested by letter Exh.A/2, dated 9th December, 1975 to accept the rent. Stand was taken that on behalf of the tenant, rent was being tendered by his attorney and copy of Power of Attorney was also sent to landlord. On refusal of landlord, rent of three months was sent through money order dated 4-2-1976, which was not accepted. Finally tenant started depositing rent in the Court in Misc. Rent Case No,978 of 1976.
5. Keeping in view pleadings of the parties in the rent case, four issues were framed relating to default, subletting, nuisance and impairing value and utility of premises. In evidence, landlord examined himself and two other witnesses Outubuddin and police constable Muhammad Yousuf.
Tenant examined his attorney Gobind and one other witness Manghan Mal. After consideration of evidence brought on the record by the parties, learned Rent Controller found all the four issues in favour of landlord and in consequence granted ejectment with direction to hand over possession within 30 days. Tenant carried appeal to the High Court which has been accepted and order of eviction is set aside.
6. Leave has been granted in this case expressly to re-examine evidence on issues of default and subletting. Mr. Fakhruddin G. Ebrahim, learned Advocate Supreme Court for appellant/landlord emphatically urged before us that there was wilful and unambiguous default as rent was not paid in advance on first of each month in terms of agreement, but was paid late. Rent of four months, November and December, 1975 and January and February, 1976, was deposited in the Court in Misc.
Rent Case No,978 of 1976 on 4-3-1976. That way rent of November, 1975 was not tendered until 9-12- 1975 and likewise rent for January, February and March, 1976 was not tendered until 4-2-1976, 4-3- 1976 and 12-4-1976 respectively. This contention is to be examined in the light of following circumstances.
7. Firstly that according to the tenant, landlord stopped accepting rent for the month of November, 1975, hence rent was sent by cheque for two months, November and December, 1975, alongwith letter dated 9th December, 1975 Exh.A/2. Landlord refused to accept rent by cheque and vide letter dated 10-12-1975 Exh.A/3 gave reason that he was doing so as rent was being tendered on behalf of his tenant Mehromal in the absence of any legal authority. In reply dated 31st December, 1975 Exh.A/4, Gobindram Perwani informed landlord that he was attorney to Mehromal and enclosed copy of Power of Attorney with further request to accept the cheque. Landlord refused and vide letter dated 16-1-1976 Exh.A/5, demanded meeting with his tenant Mehromal. Mr. Naraindas Motiani, Advocate-on-Record for the tenant vide letter dated 5th February, 1976 Exh.A/6, informed landlord that Mchromal was not residing in Karachi and his business at Karachi was managed by Gobindram Perwani, who was his attorney. Again request was made to the landlord for acceptance of rent which was being refused by him in spite of tendering rent by cheque and money orders.
Finally, vide letter dated 17th February, 1976 Exh.A/7, landlord informed Advocate of the tenant that his client had sublet premises to Hotel Plaza without his permission, hence terms of the tenancy agreement were violated and tenant rendered himself liable to ejectment. In such circumstances, rent for four months (November, 1975 to February, 1976) was deposited in Misc. Rent Case No,978 of 1976 on 4-3-1976.
8. In the proceedings before the learned Rent Controller, written statement was filed by tenant Mehromal in which he addmitted that he was tenant of the landlord and rent was being tendered on his behalf by his attorney Gobind. Landlord admitted in cross-examination that rented building was registered as a hotel and lodging in the office of Controller of Hotels, Karachi. To a question he replied that he did not remember if he had been accepting rent under the cheques of Hotel Plaza on behalf of tenant but he said that he had never issued receipt in the name of tenant. In cross- examination, landlord admitted that he rented out building to Mehromal in 1973 and then at the time of executing tenancy agreement Mchromal was not present but the document was taken from him by Mr. Mujeeb, who got it signed from Mehromal and then brought it to him. Evidence of Gobind, who is attorney of tenant, is to the effect that Mehromal is proprietor of Hotel Plaza and he was running it as his attorney. Rent was being tendered on behalf of Mehromal by him as his attorney. He sent copy of Power of Attorney to the landlord to explain to him the position.
Agreement between Mehromal and landlord was for 5 years and it was made known to the landlord that in the premises hotel; and bar would be run.
9. There is no default because landlord suddenly stopped accepting rent from November, 1975. It then appeared that rent was not accepted because landlord was not satisfied whether rent was tendered to him by his tenant Mehromal or some unauthorised person. Position was explained in the letter that rent was being tendered on behalf of tenant and remitter was attorney who was duly authorised by tenant so to do. Even then landlord refused to accept the rent and took flimsy objections that he would not accept rent in the name of Hotel Plaza as he had let out premises to Mchromal. In the tenancy agreement premises arc mentioned as commercial and were let out as such. For what specific purpose premises would be used is not mentioned in the agreement except that premises were let out as commercial building. There is no prohibition mentioned in the agreement expressly or impliedly that premises would not be used as hotel. There are clear indications in the evidence adduced by the parties to the effect that premises were being used as hotel and bar and there was no justification for landlord to refuse to accept rent which was being tendered on behalf of Mchromal by his attorney in the name of Hotel Plaza.
10. Secondly argument advanced with regard to default on behalf of the landlord is untenable for the reason that section 13(2)(i) of West Pakistan Urban Rent Restriction Ordinance, 1959, allows eviction on the ground of default when tenant has not paid or tendered rent due by him in respect of the building or rented land within 15 days after the expiry of time fixed in the agreement of tenancy with his landlord or in the absence of any such agreement on last day of the month next following that for which the rent is payable. In the instant case there was agreement, hence rent due would be after the expiry of the month for which the rent is charged. Therefore, rent for November became due to be paid on 15th December. It appears that after landlord refused to accept rent for November, an attempt was made to pay him rent for November and December and on his refusal, tenant enclosed rent for these two months in his letter to the landlord, which is on the record as Exh.A/2 and that letter is dated 9th December, 1975. This shows that even if previous tender is disputed by landlord, rent for November by cheque was sent to him on 9th December which was quite within time as allowed under the provisions of previous rent law mentioned above. Landlord refused to accept the cheque and stated in his letter dated 10-12-1975 Exh.A/3, that he could not accept the cheque as it was not from his tenant Mehromal. Even after the position was explained that rent was being tendered on behalf of tenant by his duly authorised attorney but landlord persistently refused to accept rent unjustifiably which is apparent from exchange of letters and notices between landlord and tenant as contained in Exh.A/6, A/7 and money order coupons Exhs.A/10 to A/18. Landlord in the evidence in the Court also accepted that he refused to accept the rent for the reason given by him as stated above. In such circumstances, rent of four months was deposited in Misc. Rent Case on 12-4-1976 and during that time efforts were being made to convince the landlord that he should accept the rent as it was being tendered to him on behalf of his tenant Mehromal by his attorney and the cheques were being issued in the name of business which was being run in the said premises by the tenant but landlord was adamant and in such circumstances, it cannot be said that tenant has made a deliberate and wilful default. Tenant used modes of tender of rent which are allowed under the law and he offered rent to the landlord by cheques which were refused and then he offered rent by money orders which were refused and then in the last resort he deposited the rent in the Court.
11. We agree with the High Court that there was no default. Additionally we are of the view that on the basis of evidence brought on the record, no other finding is possible on the issue of default particularly, when explanation given on behalf of the tenant as stated above, is reasonable and convincing, which is not being accepted by the landlord without any justification particularly, when he has failed to substantiate his assertion that rent was not being tendered by tenant Mehronnal and. Hotel Plaza is not being run by tenant Mehromal but by Gobind, who is not attorney of Mehromal.
12. On the issue of default, case-law is cited by learned counsel of both parties for and against the proposition, and it is not necessary, in view of our finding, given above, to go into reported cases cited before us for reason that most of these cases are distinguishable as findings contained therein are given in different sets of circumstances and for different reasons. However, reference to some reported decisions' would be pertinent and relevant as they are consistent with our finding given above.
13. In the case of Altaf Hussain v. Talib Hussain PLD 1977 Lah. 110, learned Single Judge Muhammad Afzal Zullah, J. Of Lahore High Court (as he then was), after considering provisions of section 13(2)(i) and sections 4 and 6(1) of West Pakistan Urban Rent Restriction Ordinance, 1959, has held that tenant may, in order to create goodwill between himself and landlord, stipulate for and pay in advance monthly rent and such tenant cannot be evicted if he fails to pay rent in advance.
Relevant paragraph from the report is reproduced as under:--- "Sub-clause (i) of subsection (2) of section 13 requires the Rent Controller, before directing eviction, to be satisfied that the tenant had not paid or tendered rent "due by him" in respect of the property within the period specified in the said provision; but "after the expiry of the time for which the rent is payable. The rent payable on monthly basis, on general principle, also would become due on the completion of occupancy of the property by the tenant for full month. Thus, it would become "due" from the tenant at the end of the month. Unless the rent is due, the tenant on the same principle cannot be evicted for supposed non-payment. Thus looked at, the rent for the month of November, 1974 would become due after the last day of the said month, i.e, on 1st of December, 1974. This being a monthly tenancy, in accordance with the agreement, fifteen days' time is by law allowed to the tenant to clear the same. He could clear it till the 15th of December, 1974. The appellant failed to do so. Therefore, he was in default qua the month of November, 1974. The rent of December, 1974 was due on 1st of January, 1975. The appellant could clear it on or before 15th of January. He sent the money order on 13-1-1975. Therefore, he was not in default qua the month of December, 1974.
Similarly, the rent' for the month of January 1975 would become due on 1st of February, 1975. It was deposited on 17-1-1976. Therefore, there is no question of default in that behalf."
14. We endorse the view taken in the case of Altaf Hussain (supra) for the reason that in section 13 of West Pakistan Urban Rent RestrictiOn Ordinance, 1959, there is no requirement of payment of rent in advance but the requirement is for payment 'of rent due, which becomes due after occupancy of one month and payable after 15 days of the time fixed in the agreement of tenancy. In such circumstances, if rent is not paid in advance as contained in the agreement but is paid as rent due as permitted under the law as stated above, there will be no default.
15. In the instant case, evidence brought on the record clearly shows that tenant genuinely and sincerely attempted to tender rent to the landlord, which he refused unjustifiably on the grounds which were incorrect and not substantiated, then even if there is default it would be technical in nature and would not be deemed as wilful default making tenant liable to be ejected, if tenant has adopted alternate prescribed mode of tendering rent by way of depositing the same in the Court of Rent Controller. In support of this view, reference can be made to the case of Inayat Ullah v.
Zahoor-ud-Din 1987 SCM R 1313. Additionally, we observe that in this case Rent Controller has held that there is default but in appeal High Court has reversed the finding and in doing so, discretion is exercised judicially in view of the fact that landlord refused to accept rent without justification, hence with such discretionary order interference is not warranted, unless it is shown, which is not done in the instant case, that discretion was exercised by the High Court capriciously and on principles other than those recognised judicially. We are fortified in this view by decision of Supreme- Court in the case of Farooque Ahmad v. Shah Nawab 1985 SCM R 1303.
16. So far issue of subletting is concerned, it is very closely linked with issue of default because common reason is assigned by the landlord that his tenant is Mehromal, who stopped tendering rent which was attempted to be tendered in the name of Hotel Plaza by Gobind; who had no such authority. We have already held on the issue of default that rent was being tendered by tenant Mehromal through his attorney Gobind in the name of Hotel Plaza, which business is being conducted by the tenant through his attorney. As per tenancy agreement, demised premises have been let out as commercial building. There is no prohibition in the said agreement that premises could not be used as hotel. When objection was taken by the landlord that rent was not being tendered by the tenant, letter was written to him explaining the position that Gobind was attorney of tenant and power of attorney was also produced. Tenant Mehromal filed written statement and claimed in it that rent was being tendered by him by cash as well as by cheques drawn on Australasia Bank Limited, Tariq Road Branch, Karachi, and he continued to pay rent in that manner until landlord refused to acceept rent for the month of November, 1975. It was also claimed in the written statement that rented building was registered as hotel and lodging in the office of Controller of Hotels, Karachi. To a question landlord replied that he did not remember if he had been accepting rent under the cheques of Hotel Plaza on behalf of tenant but he said that he had never issued receipt in the name of tenant. In such circumstances, it was incumbent upon the landlord to have substantiated his assertion that there was subletting particularly, when tenant denies allegation of subletting and claims that Gobind looked after the business as his attorney. In the circumstances, we hold that evidence brought on the record shows that possession was not parted with by the tenant. We are also of the view that landlord knew that tenement was being run as commercial proposition in the name of Hotel Plaza by the tenant. If landlord was surprised when rent for the month of November, 1975 was sent to him in the name of Hotel Plaza and if earlier than that rent was tendered by Mehromal in his own name, then landlord was unable to produce any material in support of that allegation and he could have produced rent receipts or any other evidence to show that tenant was paying rent in his own name and then had sublet the premises to Hotel Plaza, which landlord has failed to do. On the other hand, tenant has produced satisfactory evidence and documents to show that premises were not sublet and Gobind was looking after business of the tenant and paying rent on his behalf in the name of Hotel Plaza.
17. We agree with the finding of the High Court that learned Rent Controller on account of slight discrepancy in the evidence of Gobind was led to think that there was subletting when Gobind stated in the cross-examination that he was running the hotel and bar from 1973 to July, 1975 as partner in the business being relative of tenant. It appears that mention of "as partner in the business" is a slip of tongue because it is inconsistent with remaining evidence of Gobind which is to the effect that Power of Attorney was executed in which he is not shown as partner. Secondly, if it is assumed that Gobind was partner in the business of tenant, then also this statement does not show that tenant had sublet the premises to Gobind and has permanently severed his connections with the said business. In paragraph 10 of the affidavit, Gobind has categorically stated that premises were not sublet to Hotel Plaza and Mehromal is proprietor of Hotel Plaza and it makes no difference if there is change of name of business.
18. Learned counsel for the appellant/landlord has drawn our attention to auction notice published in daily "Dawn" which was on 19-5-1978, showing that income-tax amounting to Rs,19,700 was due against Mr. Gobind Ram owner of Plaza Hotel and Bar. When Gobind was in the box giving his evidence in the Court of Rent Controller, he was confronted with this auction notice and he replied as under:--- "I had never filed income-tax return form in respect of Hotel Plaza. I do not know if opponent (tenant) had filed income-tax return. I do not know whether in the year 1978, sum of Rs,19,700 was due against Hotel Plaza towards income-tax. It is incorrect to suggest that I was running Hotel Plaza being owner. I do not know about notice published in daily "Dawn" dated 19-5-1978, in which I was shown as owner of Hotel Plaza."
19. Cross-examination on the point mentioned above, was left at that without any further question.
Gobind denied having filed income-tax return and further categorically denied to be owner of Hotel Plaza. This he said on oath. In the case landlord could have examined any person from Income Tax Depatment in support of contention that Hotel Plaza was owned by Gobind and whatever was stated in the auction notice was factually correct. Record also could have been produced. In such circumstances, it can be said that allegation in auction notice is not substantiated and is, therefore, not proved. It was not necessary for the tenant to have appeared before the Rent Controller because his attorney had appeared and documents were produced which were sufficient to support the case of the tenant. No application was filed by the landlord and no reasons were assigned to satisfy the learned Rent Controller that examination of tenant was essential for just decision of the dispute.
20. For the facts and reasons stated above, we hold that no interference is warranted with the impugned judgment, which is upheld, and appeal is dismissed. However, there will be no order as to costs.