' This appeal by landlord under section 21 of the Sindh Rented Premises Ordinance (hereinafter referred to as the Ordinance) is directed against an order dated 11-5-1989 passed by learned Controller, Karachi-East (Syed Gul Muneer Shah) dismissing ejectment application in respect of demised premises.
2. Respondent is the tenant of the appellant in respect of two shops situated on Plots Nos.23 and 24-C, Tariq Road, PECH Society, Karachi at a consolidated rent of Rs,1,350 per month. Appellant sought eviction of the respondent on the grounds, firstly, default in payment of rent w,e,f, April, 1978; secondly, requirement of the premises in good faith for personal bona fide use and thirdly, impairing value and utility of the premises by making additions and alterations without permission of the appellant.
3. Respondent contested eviction proceedings but he admitted the tenancy as well as rate of rent with an averment that the rent payable was exclusive of electricity, water and conservancy charges. He denied default explaining that as per practice rent was tendered to Sher Muhammad Khan, father and the attorney of the appellant, who avoided to accept the rent therefore he deposited rent in Miscellaneous Rent Case No,3032/1978. Other grounds for ejectment were also denied and disputed as false and raised with ulterior motives. It was pleaded that on account of this refusal to increase the rent exhorbitantly and to pay taxes which the respondent was not liable to pay eviction was sought with mala fide intention as a counterblast to Rent Case No,3573/1980 filed by him or restoration of amenities against appellant.
4. In support of his case appellant examined himself and his father as well as attorney Sher Muhammad Khan while the respondent appeared as his own witness.
5. On the above averments, learned Controller formulated the following points:
(1) Whether opponent is wilful defaulter in payment of rent as alleged by applicant?
(2) Whether applicant requires the demised premises for his personal bona fide use?
(3) Whether opponent has caused damage to the demised premises which has impaired the value and the utility of the same?
(4) What should the order be?
6. On assessm ent of evidence and hearing parties counsel he decided all points against the appellant and dismissed the ejectment application as stated earlier.
7. It is pertinent to note that the relationship between the parties was regulated by agreement of tenancy dated 3rd January, 1973, in respect of Shop No,23-C commencing from 1st July, 1972 and valid for a period of five years with a clause for renewal of the tenancy by mutual consent of the parties. The rent for this shop was fixed at Rs,1,000 per month. Rent from 1st July, 1972 to 31st December 1972 was paid in advance and acknowledged by the appellant in the agreement. The tenancy agreement further provided that rent would be payable in advance quarterly by the first of the quarter, i,e, on 1st July, 1st October, 1st January and 1st April of each calendar year. Clause 7 of this agreement stipulates that respondent shall be responsible for payment of electricity power, gas, water and conservancy charges consumed in the said premises in addition to rent directly to the authorities concerned. Agreement further provides that on expiry of tenancy period of five years if the respondent desires renewal for another period of five years rent payable shall be Rs,1,200 per month exclusive of electricity, gas, water and conservancy charges.
8. Tenancy agreement in respect of Shop No,24-C was executed on 5th April, 1973 effective from 1st April 1973 on a monthly rental of Rs,350 with advance payment of three months' rent to the appellant which was duly acknowledged. This agreement was also valid' for five years with effect from commencement of tenancy on similar terms and conditions with the exception that on expiry of five years' period rent payable was to be revised by mutual consent of the parties. It may be observed that both the tenancy agreements were not registered and no agreement renewing the tenancy was executed between the parties and by the time eviction application was filed appellant attained the age of majority whereas premises were let out on rent on his behalf by his father and guardian.
9. In the context of a covenant in the agreement of tenancy to pay rent in advance it was agitated that rent from April, 1978 to June, 1978 was not paid in advance and thereby respondent committed a wilful default and violated the terms of tenancy. In his evidence respondent stated that as per practice he remitted rent for the month of April, 1978 to the attorney of the appellant through cheque at his Lahore address which was refused by him whereafter with the permission of the Controller to deposit rent he has been regularly depositing rent in Miscellaneous Rent Case No,3032/1978. After passing of the rent order under section 16(1) of the Ordinance however he has been depositing rent in Rent Case No,211 of 1985. In view of categorical admission by appellant's father Sher Muhammad Khan during his cross-examination that after his shifting to Lahore in 1965 respondent had been sending rent through cheque or draft in his account and that in April, 1978 he had sent rent through cheque which was refused by him (as it did not include enhanced rent as per tenancy agreement) respondent did not feel it necessary to produce the letter covering the cheque in respect of rent for the month of April, 1978. Despite express admission on the part of the appellant, respondent was subjected to cross-examination with regard to his averment that as per practice he had tendered rent of the premises for the month of April, 1978 through cheque to the attorney of the appellant at the Lahore address which was refused, when he stated that he did not remember if he paid rent on 1st April, 1978 and could not say as to when had he paid rent but he strongly denied the suggestion that he did not pay rent in time. On the strength of these replies by the respondent it was contended on behalf of the appellant that there was a wilful default in payment of rent for the month of April, 1978 because the respondent failed to produce any document to prove the tender of rent as alleged. The argument is untenable on the face of it as after unqualified admission by appellant's attorney and father to the effect that he had refused to accept rent for the month of April, 1978 appellant cannot be allowed to say that rent was not remitted or that respondent failed to produce documentary evidence in support of his assertion. Be that as it may, as the nonpayment of rent is visited with penal consequence of forfeiture of tenancy, evidence given by the parties must be construed strictly and in the event of a probable doubt it must be resolved in favour of the tenant rather than the landlord.
10. It was then submitted that the rent for the quarter commencing from 1st April, 1978 to 30th June, 1978 ought to have been paid on 1st April, 1978 but it was actually deposited in the office of the Controller in Miscellaneous Rent Case on 10-7-1978 i,e, far beyond the agreed date for payment of rent. Indeed appellant's attorney having refused to accept rent sent by cheque, respondent was left with no alternative but to deposit rent in the office of the Controller. Appellant himself having created circumstances to manifest that he was not inclined to accept rent sent through cheque, he is legally not entitled to make a grievance that the rent was not paid. The claim of the appellant for enhancement of rent from Rs,1,000 to Rs,1,200 p.m. After the expiry of agreement cannot be accepted for the reason that with the expiry of tenure agreement came to an end and the same being unregistered could not be legally enforced. Obviously the rent could not be paid in advance in terms of the tenancy agreement because it was adamant attitude and conduct of the appellant's attorney that created problems for the respondent to pay rent in advance. It is a matter of common knowledge that in the month of June, civil Courts including those of the Controller at Karachi are closed for judicial business. In these circumstances if the respondent approached the Controller for permission to deposit rent in the first week of July, 1978 and was able to deposit arrears of rent with effect from 10-7-1978 no fault can be found with him.
11. There is another aspect of the case namely non-payment of water and conservancy charges in respect of premises. Relying on the terms and conditions of tenancy agreement and the definition of word "rent" under section 2(i) of the Ordinance which includes payment of water, conservancy, gas and electricity charges, it was pointed out that non-payment of water charges to the concerned agency would amount to default in payment of rent and since the respondent was constrained to admit that he has not paid water conservancy charges at any time he had committed a default within the ambit of the word. Explanation of the respondent on this point however is to the effect that according to clause 7 of the agreement he was responsible for payment of electricity power, gas and water consumed in the premises according to his share and since two Chowkidars employed by the appellant residing on the first floor of the demised premises were using water and as the appellant did not contribute his share towards the water and conservancy charges in fact the supply of water was disconnected with effect from 5-2-1978.
In this connection, respondent referred to letter dated 13-3-1978 Exh.A/6 and letter dated 13-9-1978 Exh.A/7 addressed to him by appellant's attorney. Vide letter Exh.A/6 appellant had informed the respondent that he had received Letter No,A & C/E/691/78 dated 18-2-1978 for payment of KMC dues in respect of water charges, fire rate and conservancy, etc. It was further stated that the letter showed that dues up to 1971-72 had been paid except the amount of Rs,2,197.20 in respect of general tax. This letter went on to say that balance dues i,e, Rs,17,075.80 minus Rs,2,197.20 i,e, Rs,14,878.60 were payable by him as per clause 7 of the agreement as he was the beneficiary of the said amenities and no body also was sharing the same since there was no other tenant in the premises. He was therefore called upon to arrange to pay the aforesaid dues under intimation to the appellant direct to the KMC. Respondent replied this letter on 22-3-1978 Exh.A/8 stating that sometimes back he had received a demand note from KMC in the name of Mr. Zahoor Ahmed for payment of Rs,11,935 towards water conservancy and fire rate for the years 1972-73, 1973-74, 1974- 75, 1975-76 and 1976-77 so the said demand note was referred to appellant for settlement with KMC. Respondent pointed out that according to the tenancy agreement he was liable to pay only water and conservancy rate as per his share and not liable to pay any amount towards the alleged fire rate. Moreover, KMC had demanded said rates by assessing annual letting value of the property at Rs,18,360 which amount was much in excess of the rent agreed to be paid by him in respect of the premises let out to him. Appellant was advised, in the circumstances to settle the matter with KMC and thereafter to collect the share of water and conservancy rates from the respondent reminding that needful may be done at an early date and to see that the water supply which was shut off on 5-2-1978 was restored without any delay. It seems that instead of responding to the respondent's letter positively appellant sent another letter dated 13-9-1978 Exh.A/7 enclosing therewith photo copy of KMC dues from 1970-71 to 1974-75 in respect of water rate, conservancy and fire rates. According to the appellant share of the respondent with effect from July, 1972 when he occupied the premises under tenancy agreement came to Rs,5,784 and called upon him to send the amount at the earliest as he was the sole beneficiary of the services and facilities. There is nothing in the affidavit in evidence filed by the appellant's attorney with regard to payment of water and conservancy charges whereas aforesaid letters were produced during the cross-examination without explaining the contents or making a positive approach to sort out the payment of water and conservancy charges.
12. It is admitted by the appellant's attorney that his two Chowkidars used to reside on first floor of the premises and the reasonable inference drawn from this circumstance is that both Chowkidars were using water made available in the premises and thus the appellant was liable to share the water and conservancy charges with the respondent which was not bifurcated. No doubt, there is a categorical admission by the respondent in his cross-examination that he had never paid water and conservancy charges either to the landlord or to the department concerned right from the inception of the tenancy the fact remains that non-payment of water and conservancy charges was explained by the respondent that the appellant did not bifurcate the bill payable by him as well as the appellant. In fact water supply was disconnected with effect from 5-2-1978 whereafter respondent was obliged to file Rent Case No,3573/1980 for restoration of the amenities which is stated to be pending before the Controller. Notwithstanding the controversy with regard to liability for payment of water and conservancy charges or non-payment thereof by the respondent it would neither be fair nor equitable to find any fault with him for non-payment of these charges in the absence of specific and concrete evidence tending to show a deliberate and intentional default. It has come in the evidence that in fact he had paid a huge amount by way of property tax to the Excise and Taxation Department which would adversely reflect on the indifferent attitude to perform his lawful obligations on the part of the appellant.
13. In the case reported as Muhammad Yousuf v. Abdullah (PLD 1980 SC 298) it was ruled that as the lessee is entitled under the said Ordinance to remain in possession of the demised premises, after the expiry of the lease on payment of statutory rent, prima facie, tender of rent by him to the lessor after the expiry of the lease is in the discharge of his statutory obligation to pay rent under the said Ordinance. Similarly as the lessor has been deprived by the said Ordinance of his right to evict the lessee on the determination of the lease, his acceptance of the rent tendered by the lessee after the expiry of the lease, usually reflects his inability to evict the lessee and will not amount prima facie to acceptance of any implied offer by the lessee to continue the lease. In the reported case as the period of tenancy in the agreement had expired, their Lordships observed that an agreement can only be made by the consent of the parties, and if an agreement is for a fixed period it comes to an end on the expiry of the agreed period unless it is renewed by both the parties.
14. Aforesaid view was followed in the case of Abdul Sattar v. Muhammad Afzal (PLD 1985 SC 148) endorsing the view taken by the Lahore High Court laying down that after the expiry of the agreement the rights and liabilities of the tenant fell to be governed by the provisions of the West Pakistan Urban Rent Restrictions Ordinance, 1959 which regulate the terms as to ejectment.
15. In the subsequent case of Mrs. Zarina Khawaja v. Agha Mehboob Shah (PLD 1988 SC 190) dealing with question relating to continuance of the terms of tenancy agreement after its termination Hon'ble Supreme Court was of the view that notwithstanding the enactment of the rent laws the relationship of landlord and tenant would continue to be determined and regulated in accordance with (a) the general law; but, subject to a very important condition that in case of repugnance of either of these two elements to any of the provisions of the rent law, the latter shall prevail; meaning thereby that the provisions of the general law and/or the covenant in the agreement to the contrary, shall have no effect. Their Lordships explained further by observing that during the continuance and subsistence of the agreement of tenancy the question of relationship of landlord and tenant, the regulation of that relationship particularly vis-a-vis the determination and payment of rent; as also the eviction shall be governed by the covenant contained in the agreement; provided that those covenants do not come in conflict with the provisions of rent law and in case of conflict the provisions of that law will prevail notwithstanding any terms of agreement to the contrary. The reason for this proposition is that after the expiry of the agreement of tenancy the general law of holding over by the tenant has not been repealed or modified by the rent laws except to the extent that it comes in conflict with the provisions of rent restriction law.
' Their Lordships laid emphasis on the definition of "tenant" in section 2 of the Ordinance, 1959 that a tenant would include a tenant continuing in possession after the termination of the tenancy in his favour. In fact similar words are used in the definition of tenant in the Sindh law contained in Ordinance, 1979.
16. The view taken in Asghar Ali v. Muhammad Ali (PLD 1988 SC 228) was that in a case where rent agreement indicated that tenant would pay a further sum of amount as rent in advance 15 days before the commencing of another term of six months and in case of non-compliance, tenancy would be terminable at the option of the landlord, agreement in question as to security in such a case would continue to operate notwithstanding its expiry. This case however is hardly applicable to the facts of the case in hand because the case involved a prayer for adjustment of advance rent towards future rent in respect of which there was a default.
17. On these premises it was contended on behalf of the appellant that notwithstanding expiry of the agreement of tenancy, in the present case terms and conditions and relationship between the parties would be governed by the terms of tenancy. It was further agitated that the terms and conditions of tenancy agreement being not in conflict with the provisions of the Rent Ordinance, relationship between the parties shall continue to be governed by the terms of the tenancy.
18. On the other hand Mr. Safdar Hussain Fani, learned counsel for the respondent urged with vehemence that after the expiry of tenancy agreement between the parties relationship with regard to payment of rent and other terms shall be governed by the provisions of Ordinance, 1979.
He further contended that initial tenancy agreements for a period of five years being unregistered could not be legally enforced for want of registration under section 17 of the Registration Act.
Learned counsel relied upon Muhammad Rafiq v. Habib Bank Limited (1994 SCM R 1012) as well as judgment by Mukhtar Ahmed, J. (as he then was) reported as Mukhtar Begum v. Dildar Ahmed (1994 CLC 1210).
19. In Muhammad Rafiq's case leave to appeal was granted to consider the question as to whether ratio in the case of Mrs. Zehra Begum v. Pakistan Burmah Shell Ltd. (PLD 1984 Supreme Court 38) had been rightly applied to the case or whether the case of Habib Bank Limited v. Munawar Ali Siddiqui (1991 SCM R 1185) was applicable. In this case building had been rented out to Habib Bank Limited under an unregistered tenancy agreement for a period of five years in May, 1971. Last tenancy agreement between the parties was executed on 1-8-1981 with effect from 19-5-1981 stipulating that the lease shall be initially for a period of five years but on expiry of initial period the lease shall not determine by efflux of time, but the Bank shall have option, without being bound to do so to renew the same for further period of five years and thereafter to further renew the same from time to time after expiry of such renewed period or periods. There was a further stipulation that the owner expressly waived all statutory and other rights of the ejectment of the Bank from the demised premises and it was expressly agreed that the owner will be entitled to eject the Bank only if rent for two consecutive months had become due and remained unpaid despite a notice demanding such payment, or the Bank had sublet the premises in contravention of the agreement.
There was a further clause in the agreement stipulating that after expiry of the initial period of lease owner shall renew the same on the terms and conditions mutually agreed upon between the parties for such period or periods as may be required by the Bank in the exercise of its option of renewal. It so happened that before the expiry of above five years period Habib Bank Limited requested for the renewal of the tenancy agreement but the owner did not respond to the above request and consequently there was no mutual agreement as to the terms and conditions of the tenancy agreement, on which it was to be renewed. In fact upon expiry of the period on 18-5-1986 landlord stopped accepting rent from the Bank and on or about 23-12-1987 filed rent case against the Bank for ejectment on the ground of his personal requirement. In these circumstances it was held by the Supreme Court that since the tenancy agreement purported in fact to create a lease in perpetuity and as the same was not registered, a statutory tenancy came into existence under the provisions of the Ordinance, 1979 as admittedly the appellant accepted rent from the respondent from time to time. A reference was made to the case of Hakim Ali v. Muhammad Salim 1992 SCM R 46 and it was observed that the rights of the parties are to be regulated under the provisions of the Ordinance and not under the tenancy agreement as it was not a legal and enforceable document.
20. In Mukhtar Begum's case learned Single Judge of this Court relying on earlier judgments of this Court, Lahore High Court as well as Supreme Court expressed the view that where agreement of rent was for a fixed period, after expiry of such period rights and liabilities of parties in respect of payment of rent, would be regulated in terms of provisions of Ordinance, 1979.
21. With regard to the personal requirement of the shop premises by the appellant it is pertinent to note that this ground was urged in the ejectment application in addition to the grounds of default in payment of rent as well as impairment to utility and value of the shop premises. It may, however, be observed that on the date of making application for ejectment, appellant himself was studying in U.S.A. And it could not be reasonably and legitimately anticipated that he would need the shop premises for running his business on his return from U.S.A. After completing his education in Electronics Engineering. It is true that in his evidence, appellant's father and attorney stated about the requirement of the premises for bona fide use of his son who intended to occupy the same and start his own business. It may further be pointed out that affidavit-in-evidence was filed by appellant's father on 13-2-1983 when the appellant was still in America in connection with his higher education and he came to Pakistan only in August, 1987. Ordinarily a landlord is entitled to use his property to the best of the discretion and choice and without any restraint as the right to hold, acquire and possess a property is even guaranteed under the Constitution there are exceptional circumstances tending to show that requirement of the premises for personal use was not coupled with good faith. For instance it may be seen that after the expiry of the period of tenancy appellant's father by his letter Exh.A/5 had called upon the respondent to increase the rate of rent as rent of similar premises adjacent to the disputed premises i,e, Allied Bank Limited was Rs,2,000 per month to which also landlord had objected as being too low. In his letter he went on to say that prices had also shot up about 5-6 times since the two agreements were signed. He had, therefore, proposed that the matter of revised rent be decided w,e,f, 1-7-1977 and 1-4-1978 as per clauses 11 and 12 of the two agreements respectively. While the appellant in his evidence dishonestly denied that he filed this case falsely as the respondent refused to pay enhanced rent, appellant himself conceded that there was a dispute between his father and the respondent over the enhancement of rent.
22. Respondent's stand from the commencement of the proceedings has been that his eviction was sought on his refusal to agree to exhorbitant rate of rent and after the disconnection of water supply he having approached the Controller for restoration of amenities appellant had filed this case as a counterblast. It is a matter of record that the appellant took no steps for restoration of the water supply disconnected in February, 1978 for non-payment of dues on account of the circumstances-created by him including non-payment for the period prior to the commencement of tenancy in favour of the respondent. I am conscious of the legal position that mere demand of higher rent does not by itself disentitle a landlord to seek ejectment of his tenant on. The ground of personal requirement but this circumstance coupled with other facts and grounds would give rise to a reasonable inference that the desire of the landlord was not justified and was rather tainted with malice and ulterior motives.
23.. There is another aspect of the case. Admittedly appellant's father who was serving as Income Tax Officer at Karachi finally shifted to Lahore which is his home place in 1965. It is also in evidence that the appellant himself after his return from U.S.A. Has been residing together with his father at Lahore and has no place to live or any other attachment or activity at Karachi. The normal presumption therefore is that he would in all probability and fairness continue to stay at Lahore rather than start a new business of Electronic goods at Karachi. On his own showing he has never conducted any business after his return from America or prior to that. Even his father has no business experience as admitted by him. In law, he is not debarred from establishing a business at Karachi but factually it seems that his desire to have the premises vacated is neither in good faith nor for bona fide occupation. Assuming for the sake of argument that he is serious to start his business in the demised premises he can conveniently use the upper storey of the shop premises for the said business after minor adjustments in the structure available thereon. It is wrong to say that the Electronic business cannot be run on the first floor or second floor of the shop premises in a commercial locality of Tariq Road in P.E.C.H. Society where a lot of commercial establishments and shops are flourishing without any handicap.
24. Urging as many as possible grounds for eviction of the respondent after a dispute over the enhancement of rent and in the peculiar circumstances of the case I am of the considered view that learned Controller rightly rejected the prayer for eviction on this ground as well. Learned counsel for the appellant has referred to the judgments in Saira Bai v. Anisur Rehman (1989 SCM R 1366) and Raj Muhammad v. Muhammad Zarin (1980 SCM R 339) but both the cases are completely distinguishable on facts.
25. For the aforesaid facts and reasons there is no merit in this appeal which is accordingly dismissed with no order as to costs.