IHSAN-UL-HAQ CHAUDHARYJ.- The relevant facts for the decision qf this Constitutional petition are that the petitioner is owner of House No.28-M, Oulbcrg-lll, Inhere, The same was let out to respondent No.2 through Asgd Shujah vide rent note dated 10.2.1981 at a monthly rent of Rs.3000/-; Th# petitioner on 4th September, 1990 Hied an ejectment petition against respondents No.2 and 3 on (He ground of personnel need, default in payment of rent since May, 1990 to September, 1990 and subletting. Respondents No.2 and 3 resisted the application. The learned Rent Controller on 5.10.1991 passed an order under section 13(0) of the Punjab Rent Restriction Ordinance, whereby respondent No.2 was directed to clear the arrears from May, 1990 and deposit the future monthly rent by 15th 6f each month. Thereafter he framed following issues on 17.11.1991:-
(1) Whether the petition is bad for non-joinder of parties, if so, to what effect? OPR.
(2) Whether the petition has been liled with malafide intention? OPR
(3) Whether the respondent had carried out repair of the disputed property with the consent of the petitioner, if so, to what effect? OPR
(4) Whether the plea of enhancement of rent has been made mala fide intention? OPR
(5) Whether the disputed property has not been correctly described, if so, * what is its correct description and to what effect? OPR.
(6) Whether the garage was not let out by the petitioner to the respondent No.l, if so, to what effect? OPR.
(7) Whether the amendment allowed by the Coyrt has not been carried out in accordaif with law?
OPR.
(8) Whether the respondent No. 1 wilfully failed to pay or tender the due rent to the petitioner? OPA.
(9) Whether the respondent No.l violated the terms of the rent agreement by not enhancing the rate of rent, if so, to what effect? OPA.
(10) Whether the respondent No.l has sublet a portion of disputed property to the respondent No. 2 without the written consent of the petitioner? OPA.
(11) Whether the respondent No.l has corrected a portion of the disputed property into commercial, if so, to what effect? OPA.
(12) Whether the respondent No.l has made additions and alternations in the disputed property thereby caused damage to the disputed properly? OPA.
(13) Whether the petitioner requires the disputed property in go ; ; >ih apd bona J'uiefy for his own use and occupation OPA.(14) Relief.
The petitioner examined Muhammad Mushtaq as AW1, Rehmat Ali as AW2, Ngsir Mehmood Mustafa as A W.3 while the petitioner himself appeared as AW4. On the other .Hand, respondents No.2 and 3 examined Iqbal Jhazzaq as RWl> Muhammad Hussain as RW2, Sana UUah Chcema as RW3, Ghulam Rasul as RW4, Muhammad Arif as RW5, Muhammad Habib ur Rehman as RW6, Muhammad Saleern Butt as RW7, Muhammad Zaman as RW8, Asad Shujah appeared on behalf of respondent No.2 as RW9. Respondent No.2 closed thi side on 4.12.1993. While respondent No.3 closed his side on 5.12.1993. Thereafter the petition was adjourned for 8.12.1993 for final arguments. The pajries on this date notified that they have arrived at compromise according to which respondent No.2 was to pay rent at the rate of Rs.9(XX)/- per month and was to remain in possession till 30.6.1990. The Rent Controller recorded the statement of the parties and their learned counsel.
Thereafter accepted the ejectment petition vide order dated 9.12.1993 in terms of the compromise.
This order was, however, assailed by respondent No.2 through an appeal before respondent No.l. It was maintained that Asad Shujah was not competent to enter into compromise on behalf of respondent No.2. It was added that in fact there was no compromise and Asad Shujah has colluded with petitioner. The appellant also placed reliance on resolution dated 1.1.1994 according to which Asad Shujah was removed from Directorship of company for this alleged misconduct.
Respondent No.l accepted the appeal vide order dated 31.1.1995 remanded the matter to the Rent Controller with the direction to hold an inquiry about the competency of Asad Shujah and Shahid Kaleem Ahmad, Advocate to make a consenting statement on behalf of respondent No.2. It was added that in case they have the authority then the ejectment would Hold field otherwise the ejectment petition shall be decided on merit. The petitioner has challenged the order of appellate authority-respondent No.l through present writ petition, which was admitted to bearing and notice was issued to the respondents. Respondent No.2 alone has appeared and contested the petition while the other were proceeded ex parte.
2. The learned counsel for the petitioner argued that respondent No.2 was estopped to dispute authority of Asad Shujah^ its Director to enter into a compromise on behalf of Company, It is added that there was no indication whatsoever on record from any document that Asad Shujah was not competent to enter into a compromise. On the other hand, the rent note dated JO.2.1981 was executed by him, the written reply dated 6.7.1991 was filed by him, the Power of Attorney to the learned counsel was also executed by him and it was he, who was defending the ejectment petition throughout and as lates as 4th December, 1993 he appeared on behalf of Company as RW9. It is added that the petitioner, who is a stranger cannot be made to suffer for internal matters of the company in view of principle of in door management. The learned counsel in this behalf has placed reliance on the judgments reported as Dehara Dun Mussorie Electric Tramway Ca, lid and another Vs. Jagmandar Das and others (AIR 1932 Allahabad 141), P.V. Damondara Teddi and another Vs. Indian National Agencies, Ltd.(AIR 1964 Madras 35) and Muhammad Azaim Vs.Pakistan Employees Cooperative Housing Society Ltd. Karachi and 4 others (PLD 19tj Karachi 481). It is added that the respondent was estoped by its own conduct to file an appeal and'to challenger the compromise ejectment order. In this behalf reliance is placed on the judgment reported as Sh: Dawood Vs. District Judge, Lahorc and others (f985 CLC 2658), Attiqullah Vs. Kafayatullah (1981 SCMR 162), Zakauddin alias Billa Vs. Muhammad Ismail (1982 SCMR .1197 (2), and Muhammad Afzal and 10 others Vs. Muhammad Afzal and another (1979 CLC 782). It is added that it is cardinal principle of dispensation of justice that no party should lake advantage of its own fraud. It is added that*thesc are 4 brothers living under the same roof and running business jointly, In this behalf reliance is placed on the judgment reported as Muhammad Saeed Vs. Province of West Pakistan (PLD 1964 SC 572).
3. It is argued that np appeal was competent against the consent order bui respondent No.l even failed to note this basic legal proposition while accepting the appeal of respondent No.2. The next argument is that compromise statement was not only signed by Asad Shujah but also by Shahid Kaleem, Advocate, counsel for respondent No.2, therefore, it was bound by the same. The learned counsel in this behalf his referred to the judgments reported as Dr. Ansar Hasson Rizvi Vs. Sved Mazahir Hussain Zaidi and 3 others (1971 SCMR 634), Mrs. I. Khan Vs. Controller of Rents and others (1976 SGMR 457)HKamal Din and others Vs. Nazir Ahmad (1987 cc 1208) and Noor Muhammad and others Vs. Muhammad Siddiqueand others (1994 SGMR 1248). The arguments are summed up with (he submission that the resolution heavily relied by the appellate authority is dated 1.1.1994 subsequent to the compromise dated 9.12.1993, therefore, it was not relevant and in any case the same lias not been proved.
4. On the other hand, the learned counsel for respondent No.2 argued that the writ petition is not competent and is had for misjoinder of respondents No.4 to 6. It is added that the petitioner could implied only the parties as arrayed by him in ejectment petition and not other persons without specific order of the court. It is added that respondent No.2 filed an appeal through Asif Shujah, which was accepted by respondent No.l but the petitioner mala fide impleaded respondent No.2 again through Asad Shujah. This was clearly mala fide and the purpose was to get consent order without notice and knowledge of respondent No.2, It is argued that no compromise could be affected by a Director of the Company without specific resolution authorizing him to do so. The learned counsel in this behalf has referred to sections 196 and 214 of the Companies Ordinance, 1969.
5. The next argument is that the Power of Attorney in favour of Mr. Shahid Kalecm. Advocate w^s dated 6.1.1990 while the ejectment petition was fill'd OH 4.9.1990. It is, therefore, argued that the Power of Attorney was secured beforehand, ip qJpr IP get a collusive ejectment ordcf. It is argued that the evidence, was denied by Mr. Jahangir A. Jhojha, Advocate oh 4.12.1993 onbebpjf of respondent No.2 while the alleged compromise was signed by Mr. Shahid Kalcem, Advocate, It is argued that it was the petitioner, who played fraud to secure the ejcctmet of his client and not vice versa as alleged by the learned counsel for the petitioner, It is argued that the compromise was illegal and product of fraud, therefore, could not furnish any legal basis. The learned counsel in this behalf has referred to the case of Walton Tabacco Company (Pvt.) Ltd. And others Vs. Azad Govemment of the State of Jammu & Kashmir and others) (1993 CLC 66).. It is added that the law favours the decisions on merit. In this behalf rcl ance is made to the case of M.Shahid Saigol and I6 others Us.M/s. Kohinoor Mills Ltd. And 7 others (PLD 1995 Lahorc 264).
6. I have given my anxious consideration to the arguments of the learned counsel for the parties and gone through the record, relevant provisions of Rent Restriction Ordinance, 1959, Companies Ordinance, 1969 and the precedent cases relied by the parties, It is clear from the agreement of lease dated 10.2.1981 that respondent No.2 was represented by Asad Shujah while ejectment petition was filed in September, 1990 when notices were issued to the respondents. The petitioner has placed on record copies of interim orders, which start from 5th September,199 when 1he ejectment petition was received By the Rent Controller. The same was entertained and notices were issued to respondents No.2 and 3.1t was Asad Shaujh, who signed the Power of Attorney as well as written reply on behalf of respondent No.2. He continued to defend the ejectment petition throtagh said Asad Shujah, who as late as 4th December, 1993 appeared as RW9 when Mr. Jahangir A. Jhojha, Advocate closed side of respondent No.2. Thereafter.The ejectment petition was adjourned to 5.12.1993 for vidence of respondents No.3 and then to 9.12.1993 for final arguments. It is clear from the record that Asad Shujah represented respondent No.2 throughout the proceedings.
It clearly meant that he was competent and there is nothing on record whatsoever to show that the authority exercised by Asad Shujah was revoked at any sftge during the proceedings before the Rent Controller. The learned counsel rightly referred to doctrine of indoor management and placed reliance on the judgment in the cases of Dhradirii and Muhammad Azim'(Supra). A company is liable for all acts done by his Directors even though unauthorized by it provided such acts were within their apparent authority, This is not all. Respondent No.2 was directed by the Rent Controller vide order dated 5.10.1991 to deposit the arrears of rent as well as future rent as required under section 13(6) of the Rent Restriction Ordinance, The learned counsel for the respondent on query from Court as to payment or tender of rent submitted that the rent was being deposited in pursuance of the order of the Rent Controller. This fact alone is sufficient to prove that the proceedings were to the enfire knowledge of respondent No.2 and it allowed Asad Shujah to contest the proceedings. The petitioner as well as the Rent Controller rightly took him duly that he was authorised to act as such.
7. Now coming to the next that the statement of compromise was also signed by advocate of respondent No.2, who would be relevant for the decision of next point that even if the consent of Asad Shujah was ignored still the statement of compromise was signed by the learned counsel for respondent No.2, therefore, binding on it. The learned counsel for the petitioner reightly referred to the cases of 'Dr. Ansar Hassan Rizvi, Mrs.l.Khan, Kamal Din and qjhers and Noor Muhammad and others'(supra) ifi this behalf.
8. The learned counsel for the respondent argued that Mr. Shahid Kalcem, Advocate was not the counsel engaged by respondent No.2 and added that the Power of Attorney is dated 10.1.1990. The same was manoeuvred even before the institution of ejectment petition in order to have a favourable decision through under hand means. The argument is without any merit for the simple reason that the entries in the Power of Attorney as to dates were made on 6.1.1991 and instead of given the year as 1991, the year was mentioned as 1990. This is normal human error, which is not uncommon specially during the first few weeks of new year. It is clear from the'Court fee on the Power of Attorney that itwas fixed on 7.1.1991. The p'erusal of 1he interim order would show that the Power of Attorney was filed on this dale when the ejectment petition was adjourned to 3.2.1991 for submission of written reply. The learned counsel for respondent No.2 was asked as to refer to Power of Attorney, which according to him executed on behalf of respondent No.2 and submitted in the Court but he could refer to none. This is not all. Mr. Jahangir A. Jhojha, Advocate appeared on behalf of respondent No.2 when he after recording the statement of Asad Shujah, RW9 the evidence was closed. The ejectment petition was adjourned to the next date and then to 9th December, 1993 when compromise was recorded- If Mr. Shahid Kalcem, was not the counsel as argued by the learned counsel for respondent No.2 then the ejectment order passed on the basis of compromise was to come to the notice of respondent No.2 immediately on the same date. If there was grain of truth whatever was convcssed in the appeal before the appellate authority and argumennts addressed on behalf of respondennt No.2 today them the natural course was that the application was to be filed forthwith before the Rent Controller. This fact alone is sufficient to prove that the fraud was not committed in the Court of Rent Controller but before the Appellate Authority.
The appeal against the compromise decree was not competent and the remedy available to respondennt No.2 was th ough an application under scctionn 12(2) CPC but as it was fully aware of the merits, therefore, the correct remedy was nnot pursued. The learned counsel .Lor the petitioner has rightly referred to the case of hf/a, Arokey (supra)., The learned counsel for respondent No.2 referred to tho Judgment in the case Of 'Walton Tobacco Company (Pvt.) Ltd. And others and Shahid Siagol and othcrs'(supra) but same do not strengthen the arguuments of the learned counsel for respondent No.2 in any manner.
9.. The learned counsel for respondent No.2 vehemently argued that Asad Shujah connot have entered into agreement without there being a specific resolution and authority. The learned counsel wa asked to refer to the resolution on the basis of which Asad Shujah entered into lease agreement with the petitioner. He could refer to none. The petitioner if believed,that Asad Shujah was competent to compromise then he was fully justified and his right could only be defeated unless it could be shown that he lenew that the transaction was fraudulent. The company is also bound by acts of its agents, if it has actually authorised or what an agent would normally have authority to do. The Rent Controller has rightly proceeded to decided on the ejectment petition on the basis of compromise.
10. Now coming to the objection of misjoinder. The law is contained in Order I, Rule 10 CPC that no caus is to be defeated by misjoinder or non-joinder of the parties. It is held that respondents No.4 to 6 were impleaded unnecessarily, therefore, their names are struck off.
11. The upshot of the above discussion is that this writ petition is accepted with costs. The result is that the order of responndcnt No.l is declared without lawful authority and jurisdiction and the ejectment order of Rent Controller restored.