1. ' Appellant State Life Insurance Corporation has called in question the judgment dated 20-8-1990 delivered by IIIrd Senior Civil Judge and Rent Controller, Karachi, South in Rent Case No, 197/1987.
2. ' Said rent case was filed by respondent Pakistan National Shipping Corporation, for determination of the fair rent of the premises in litigation mentioned in Para. 3 of the application. Admittedly respondent is owner of the premises in litigation viz. Room No, 421/431, Room No, 712/718, Room No, 821/826 and Room No,830, situated at 4th, 6th, 7th and 8th Floor respectively of Mohammadi House, I.I. Chundrigar Road, Karachi. Said premises are in possession of the appellant. In his rent application the respondent requested the Rent Controller to determine fair rent of the premises in litigation. According to the rent application the total monthly rent for the premises in litigation being paid was Rs,2,897.95 per month. It was contended in the rent application that increase in the rate of rent was necessitated by the facts that the Government of Sindh has imposed betterment tax at the rate of 5% of the monthly rent, that there was increase in water charges from time to time and that the cost of maintenance had increased due to inflation and heavy expenses had to be incurred for maintenance of the premsies in question. It was added that in the same building some of the tenants were paying rent at the rate of Rs,6.25 per sq.Ft and others were paying rent at the rate of Rs,3.10 per sq.Foot.
3. ' The rent application was contested by the appellant, who in his written statement raised legal objections against enhancement of rent by invoking section 7 of Sindh Rented Premise Ordinance (hereinafter to be mentioned as the Ordinance). It was averred by the appellant that none of the grounds envisaged by section 8 of the Ordinance existed.
4. ' Competency of one Mahboob-ur-Rab, Secretary, respondent-Corporation to sign the rent application, was challenged. It was admitted that the Government of Sindh had imposed betterment tax but it was added that the same was imposed at the rate of 5% of the net annual rental value of the property in question. Appellant contended that filing of the rent case for fixation of fair rent by the respondent was in counterblast of another rent case filed by the appellant against the respondent for eviction from some other property, where Rs,289.50 per month were paid as rent for the premises measuring 1,237 sq.Ft.
5. ' After recording evidence of the parties the trial Court under the impugned judgment dated 20-8- 1990 fixed fair rent of the premises in litigation at the rate of Rs,2.50 per sq.Ft. For the premises at 4th floor, Rs,2 per sq.Ft for the premises at 6th floor and Rs,1.50 per sq.Ft for the premises at 7th and 8th floor. Hence this appeal.
6. ' Mian Mushtaq Ahmed, learned counsel for the appellant argued that appellant was paying Rs,2,897.50 per month for occupying covered area of 7,391 sq. Feet and that respondent/landlord was demanding the rent at Rs,6.25 per Sq. Foot which was unreasonable. In respect of the premises occupied by the United Bank Ltd. It was argued that said bank was on the ground floor where the rate of rent was more than the rate payable on upper grounds. Similarly it was argued that M/s. Nayabuddin Iqbaluddin, M/s. Indosuez Bank and Iqbal Stationers were occupying the ground floor premises while M/s. Adamjee Insurance Company were occupying the premises at first floor.
7. Learned counsel next argued that the documents were produced in respect of 30 tenants only. It was also argued that if rent for the first floor was Rs,2 per sq. Ft., it cannot be Rs,3 per sq.Ft. For 4th, 7th and 8th flooRs, It was also argued that there was no evidence, as to what was the rent in the neighbouring buildings.
8. ' Mr. Rizwan Ahmed Siddiqui, learned counsel for the respondent controverted the contentions raised on behalf of the appellant and argued that there was justification for enhancement of the rent. It was argued that rent of similar premises in the same locality had enhanced as there was rise in cost of construction and in repairing charges and new taxes were imposed and the Government had imposed betterment tax at the rate of 5% of the monthly rent. That the water rates had gone up from 6-1/2% to 9%.
9. ' Respondent's only witness Manzoor Ali was their Assistant Manager (Estate). He stated in his evidence that United Bank Ltd., Nayabuddin Iqbaluddin, Indosuez Bank, M/s. Iqbal Stationers, M/s. Adamjee Insurance Company, M/s. Fauji Foundation, M/s. International Operation (Pak.) Ltd., M/s. Lucky Impex, M/s. Pakistan Fumigation, M/s. Tijarat Agencies, M/s. English Sweets Ltd, M/s. National Food, Marry Time Agencies, Tawakal Textile (Pvt.), Pakistan General Insurance and Marine Hadlers were occupying various premises in the same building namely Muhammadi House, as tenants of the respondent. Out of them Nayabuddin Iqbaluddin were paying rent at rate of Rs,6.69 per sq. Foot per month. Next higher rent was paid by United Bank Ltd. At rate of Rs,6.25 per sq. Foot per month.
10. M/s. Iqbal Stationers and M/s. Adamjee Insurance Company were paying Rs,5 per sq. Foot per month. M/s. International Operation (Pak.) Ltd. Were paying Rs,3.36 per sq. Foot per month. Rest of the firms mentioned above were paying rent either at Rs,3.00 per sq. Foot p.m or Rs,2.70 per sq. Foot per month. Indo-Suez Bank was said to be occupying 967 sq. Feett and 710 sq.Feet on ground floor and 2,011 sq.Feet on first floor and for all that Rs,69,448.18 were being paid as monthly rent. An elaborate affidavit is filed by respondent's witness.
11. ' In support of the ocular evidence of Manzoor Ali, there is documentary evidence. There is photo copy Exh. A-3 of a lease deed between the respondent and M/s. Nayabuddin Iqbaluddin showing that the rent was payable to the respondent at rate of Rs,6 per sq. Foot per month. This was in respect of premises of the respondent rented out to M/s. Nayabuddin on ground floor of Mohammadi House. Photo Copy Exh.A-4 of another lease deed between the respondent and Indo- Suez Bank shows that rent agreed between the parties was Rs,6.25 per sq.Foot per month for the premises on ground floor, Rs,3.38 per sq.Foot per month for the premises on first floor, Rs,3.10 per sq.Foot per month for the space used for air-conditioning plant. Photo copy Exh. A-5 of lease deed between the respondent and M/s. Iqbal Stationers shows that agreed rate of rent was Rs,5 per sq.
12. Foot per month for the premises on first floor of said building. Photo copy Exh. A-6 of lease deed between the respondent and Adamjee Insurance Company Ltd. Mentions the rate of rent to be Rs,5.50 per sq. Foot per month for first year of lease, and Rs,6.05 per sq. Foot per month for second year of lease, and Rs,6.65 per sq. Foot per month for third year of lease. This was in respect of premises on first floor. Photo copy ExhA-10 of lease deed between the respondent and M/s. Fauji Foundation gives the rate of rent to be Rs,3 per sq. Foot per month for the premises situated on 9th Floor. Photo copy ExhA-11 of lease deed between the respondent and M/s. International Operations
(Pak) Ltd., shows that for the premises situated on 5th Floor the rate of rent was Rs,3.30 per sq. Foot per month for first year of lease, Rs,3.63 per sq. Foot for second year of lease, and Rs,3.99 per sq.
13. Foot per month for third year of lease. Photo copy Exh-12 of lease deed between the respondent and M/s. Lucky Impex shows that the rent settled was at the rate of Rs,4.25 per sq. Foot per month for the premises on 5th Floor of said building. Photo copy Exh. A-13 of a lease deed between the respondent and M/s. Pakistan Fumigation Corporation Ltd. Shows that rent for the premises on 6th Floor of said building was settled at rate of Rs,2.70 per sq. Foot per month. Same rate was fixed in the premsies of 6th Floor of said building leased out by the respondent to M/s. Tijarat Agencies Ltd.
14. Under lease deed Exh. A-14.Under lease deed Exh.A-15 the respondent leased out certain premises to M/s. English Sweets Ltd. On 6th Floor for which rent was fixed at rate of Rs,3 per sq. Foot per month. Similar rent was fixed for the premises let out by the respondent to M/s. International Food Limited under lease deed copy Exh. A-16. This was also on 6th Floor of same building. Particulars of these deeds and other leases have been summarized in the list Exh.18, which shows, as to what rent is being paid by each tenant.
15. ' Witness Manzoor All was subjected to a very lengthy cross-examination. He stated that there were about 94 tenants of the respondent in Muhammadi House and that he had prepared statement ExhA-18 from a huge record which cannot be produced in Court. Manzoor Ali admitted that Baker Sons were paying lesser rent. He admitted that no rent case was filed against Ravi and Sons, Perwez Trading Co., Rafhan Maize Products Co, Saif International, Khairullah & Co., Tawakkul Textile (Pvt.) Ltd., Khaja Wakil Ahmed Abdul Qadus and Mason Trading Co. P.W. Manzoor Ali stated that rent cases were filed against Muhammad Ashraf Khan (being No,1313/85), Khyber Insurance, Majid & Co., Khyber Insurance Progressive Associates Ltd. And Vellani & Vellani. P.W. Manzoor Ali denied that no rent case was filed against Baker Sons, Adil Brothers and Akbar Agencies. He said that rent case No,914/87 was filed against Baker Sons. P.W. Manzoor Ali failed to state if any rent case was filed against Pakistan Banaspati Manufacturers and Razzak Engineering & Co.
16. ' P.W. Manzoor Ali admitted that the lease deeds copies Exh.3, Exh.4, Exh.5 had expired. P.W. Manzoor Ali said in his cross-examination that he did not remember the annual rent value of the premises in litigation as assessed by the Excise & Taxation Department. He added that 5% betterment tax was levied in 1975 on the annual rental value. Manzoor Ali denied suggestion that some of the tenants were pressurised to enter into lease deed. He admitted that respondent was tenant of the appellant in a godown in old annexe of building No,2 Wallace Road from where eviction of the respondent was ordered and such order was challenged in FRA No,1192 of 1987. He denied if this case was in counterblast of the ejectment case. Manzoor Ali failed to give the actual rate of rent in the neighbouring buildings. Non-filing of cases for fixation of fair rent against some of the tenants by a landlord would not stand in his way to claim fixation of fair rent in respect of other tenants.
17. ' As against oral and documentary evidence produced by the respondent, the appellant examined Hameedullah who is Deputy Manager in the appellant's corporation. He did not agree that rent of the similar premises in the same building was ranging between Rs,3.5 to Rs,6.25 per sq.Foot per month. He relied on the summarized statement Exh.18 produced by the respondent's witness.
18. Hamidullah gave particulars of the rent being paid by 78 tenants of the respondent in Muhammadi House. According to him highest rent at the rate of 89 paisas per sq. Foot per month, was being paid by tenant of Room No,831. Next highest rent was 77 paisas per sq. Foot per month for Room No,828/829. Then he gave rent at rate of 75 paisas per sq.Foot per month being charged for Rooms No, 305 (3rd Floor), No,402 (4th Floor), No, 604 (6th Floor) and No,730. He mentioned rent being charged at rate of 74 paisas and 69 paisa per sq. Foot per month for Room No,201/203 (2nd Floor) and Room No,702 respectively. He mentioned rent being charged at the rate of 62 paisas per sq.
19. Foot per month for Rooms Nos,301 (3rd Floor), No,503/504, 506, 523/524, 529 of 5th Floor and Rooms No,605 (6th Floor), No,703 and 704. He mentioned rent at rates of 58 paisas and 52 paisas per sq.Foot per month being charged for Room No,405 (4th Floor) and Room No,509/511 (5th Floor) respectively. He gave monthly rent being charged at rate of 50 paisas per sq. Foot for Rooms No,127/A (1st Floor), No,205/226, No,304 (3rd Floor), No,606 (6th Floor), No, 620/623 (6th Floor), No,705/711, No,727, No,728, No,801, No, 803, No,804 and No,901/931. He gave monthly rent being charged at rate of 49 paisas, 46 paisas, 45 paisas, 44 paisas, 43 paisas and 39 paisas for Rooms No,114/123, No,701, No,802, No,630, No,406/411 and No,601 respectively. Rent of Rooms No,319/326 and No,615/617 was mentioned to be 38 paisas per sq. Foot for a month. He disclosed monthly rent at 37 paisas per sq yard, being paid by tenants of Rooms Nos, 227, 228, 230 (both 2nd Floor), rooms Nos, 303, 311/314, 315/317, 318, 330/331 (all 3rd Floor) Rooms Nos, 401, 404, 427, 429 (all 4th Floor), Rooms Nos, 521/522, 528, 530, 531 (all 5th Floor), Rooms Nos, 602, 603, 612/614, 631 (all 6th Floor), Rooms No,719/726, 729, 815/820 and 827. Hamidullah mentioned monthly. Rent of Rooms Nos, 805, 512/520, 806/809, 128/131 and 302 to be paisas 35, 34, 30, 26 and 23 per sq. Foot respectively. He gave minimum rate of rent to be 20 paisas per sq. Foot per month for Rooms Nos,328 and 329. Rate of rent of Rooms Nos,102, 231 and 327 was mentioned to be 25 paisas per sq. Foot per month.
20. Hamidullah admitted in cross that since 1972 he was not in service of the appellant. He admitted that the appellant was paying rent to the respondent since 1972 at the rate of 37 paisas per sq.Foot per month. He admitted that the ratio of cost of construction had increased ten times more than what it was in 1972. He admitted that rent of the disputed premises had been enhacned as per rules. He admitted that there were commercial offices situated near the building in question.
21. Hameedullah admitted that rent of Coffee Club was fixed by the Court at the rate of Rs,2.00 per sq.
22. Foot per month. Hameedullah has not done an outstanding job by mentioning the rent being paid by tenants of the respondent for the premises occupied by each in Muhammadi House for the preceding ten years or more. His evidence shows that the tenants are continuing to pay rent at a rate at which they paid rent over ten years ago.
23. ' It is difficult to believe that in this age and at a city like Karachi any body can be pressurized to enter into a fresh agreement of lease, as was suggested to witness Manzoor Ali. A Rent Controller while determining fair rent has to take into consideration the rate of rent in the adjoining rented premises if such rate is equitable and just. The occupants of the premises in Muhammadi House except those who have entered into fresh agreements of lease with the respondent, appear to be oblivious of the inflation since the preceding decade. Rates at which they paid rent ten years ago cannot be guideline for the Rent Controller charged with fixing fair rent of the premises in litigation.
24. The Rent Controller rightly referred to the lease deeds ExhA/2 to ExhA/6, ExhA/10 to Exh.A/16 for considering determination of fair rent. A Rent Controller determining fair rent is also required to consider the overall inflation which is reducing value of the money with each passing month.
25. Appellant's own witness conceded that during last ten years the cost of construction has increased ten times. This cannot be ignored while determining fair rent.
26. ' The appellant does not appear to have made out a case for unsettling the impugned order, by which fair rent has been fixed at Rs,2.50 per sq. Foot per month for the premises in litigation at 4th floor, at Rs,2.00 per sq.Foot per month for premises in litigation at 6th Floor and at Rs,1.50 per sq.
27. Foot per month for the premises in litigation at 8th Floor. This appeal therefore stands dismissed with no order as to costs.