1. This appeal is directed against the order, dated 26-9-1990 of learned IVth Senior Civil Judge/Rent'
2. Controller, Karachi (South) passed in Rent Case No,601 of 1985 whereby the ejectment application was dismissed.
3. The facts in brief of the case stipulated in the rent case is that the appellant inducted respondent as tenant by virtue of tenancy agreement, dated 1-12-1974 in respect of office premises measuring 1428 square feets situated at 4th floor of Haji Adam Chambers, Altaf Hussain Road, Karachi at Rs,892.50 per month in addition to lift charges at Rs,28.56 paisa per month and betterment tax of Rs,46.05 per month. The premises were let out to General Rubber Company who changed its name to General Trading Company on 5-7-1977 without seeking any permission from appellant. The case of the appellant further is that the said tenancy agreement highlights a condition whereby respondent shall not sublet, re-let or assign to his rights to the deemed premises or any part thereof without the previous consent of the appellant. It is said that respondent had deposited rent of the premises in Court up to November, 1983 and after the orders of this Court in previous rent case of respondent sent a Cheque No,082688 on 12-12-1983 for Rs,892.50 drawn on Middle East Bank Ltd., Karachi under covering letter to the appellant being the rent for the month of December, 1983. Another Pay Order, dated 9-1-1984 was sent to the appellant by the respondent to which appellant refused to accept as M/s. General Trading Company was not a recognised tenant.
4. Thereafter, they sent several money orders in respect of rent of the premises but appellant did not accept the same. Thereafter, appellant addressed its letter, dated 22-1-1994 to General Trading Company Ltd., stating therein that since the tenancy was not in the name of General Rubber Trading Company; and that appellant had not advised of any change in the status and if the firm have been merged with the Company a copy of Memorandum and Articles of Association of the Company alongwith list of Directors and Certificate of Incorporation be sent to him so as to place them in meetings of Board of Directors for appropriate orders. Consequently M/s. General Trading Company Ltd., supplied copy of Memorandum and Articles of Association alongwith Certificate of Incorporation on 28-2-1984. It is further said that having confirmed about respondent change of status appellant placed the matter in the meeting of its Board of Directors held in January, 1985. It was decided that the above newly incorporated limited Company should not be recognised as a tenant and the rent should not be accepted. Appellant informed the decision of the Board to the abovesaid Company and returned cheque and pay orders without depositing and encashing vide letters, dated 28-1-1985 and 21-2-1985. Respondent was also called upon to vacate the peaceful vacant possession of the demised premises within 60 days. It is lastly mentioned that besides monthly rent respondent also failed to tender service charges of lift and betterment tax.
5. Respondent did not file written statement but representative of General Trading Company Ltd. (not tenant) filed the written statement with general denial of averments and allegations raised in the ejectment application. It is maintained by the respondent that in fact the written rent agreement had expired in the year 1975 and thereafter, it was never renewed in writing and the parties are governed by Rent Restriction Ordinance. About lift charges, it is said that the same are payable only when the lift is in working condition. This aspect and betterment tax are earlier decided against the appellant in Rent Case No,4450 of 1978 filed by him Against this decision, he filed appeals in this Court as well as before Supreme Court but failed. As such he cannot re-open the finally decided case except on new grounds. With regard to subletting it is mentioned in the written statement that General Rubber Trading Company was a partnership concern and all the two partners decided to convert it into a private limited Company with same partners as its Directors.
6. Hence on 5th July, 1977 General Rubber Trading Company was re-named as General Trading Company Ltd., with the knowledge and consent of the appellant and they never raised any objection except enhancing the rent from the Company. It is further mentioned in the written statement that the present case on the ground of subletting has been filed only when the appellant lost ejectment proceedings against respondent on the ground of default and others up to the level of Supreme Court. It is also mentioned that the appellant returned the rent after keeping the same for over one year and after loosing the previous rent case before all the forums.
7. As such he has no cause of action to agitate the issues which have already been decided in previous proceedings.
8. On the pleadings of the parties the learned Rent Controller framed the following issues: (1)Whether opponent is liable to pay lift charges and betterment tax?
9. (2)Whether opponent has failed negligent default to pay monthly rent to the applicant?
10. (3)Whether applicant has accepted rent from limited Company at any point of time ?
11. (4)Whether applicant had any knowledge about the change of status of opponent prior to opponent's letter, dated 12-12-1983?
12. (5)What should the order be?
13. Learned Rent Controller after answering Issues Nos.1 and 2 in negative and Issues Nos.3 and 4 in affirmative dismissed the rent case.
14. Learned counsel for the appellant requested that he is unable to make verbal arguments as such he may be allowed to file written arguments which he subsequently filed as well as learned counsel for respondent had also filed written arguments.
15. Learned counsel for appellant has nearly taken the same grounds agitated by him in the appeal.
16. He, however, has mentioned that in the first round of litigation, the eviction application was filed by the appellant in 1976 on the ground of default only which was dismissed on the ground that security deposit if adjusted towards the rent due, there will be no default. The litigation had gone up to the level of Supreme Court and the order of dismissal was maintained. It is mentioned that respondent had deposited rent in Court up to November, 1983 and after dismissal of First Rent Appeal he posted a letter on 12-12-1983 enclosing therewith a cheque of rent issued by Limited Company. It is also mentioned that in fact respondent was General Rubber Company and not the General Trading Company Ltd., who had sent the cheque, therefore, the same was not encashed and remained pending for want of appropriate orders from the Board of Directors of appellant's Company. Thereafter, on 9-1-1984 the said company sent another Pay Order with regard to the rent. In the written arguments it is further said that as the rent for the month of December, 1983 and January, 1984 was tendered by the Limited Company which was not the recognised tenant, therefore, after having decision of the Board of Directors the said cheque and pay order were returned without getting them encashed. It is also said that Limited Company had also tried to tender rent through money order but the same was returned. Admittedly Memorandum and Articles of Association of merger of the Firm into Limited Company was not supplied to the appellant. After the service of notice about vacation of rented premises after expiry of written agreement, present rent case was filed as a second round of litigation. According to the written arguments irrespective of default the ground of subletting of the premises to a Private Limited Company by respondent General Rubber Trading Company is also taken. It is mentioned that in the year 1984 Limited Company opened Miscellaneous Rent Case and started depositing the rent in the Court in the name of appellant/landlord. The rent to a sum of Rs,35,700 is lying in the Court of learned IIIrd Senior Civil Judge/Rent Controller, Karachi (South) and the appellant/landlord had not withdrawn the same on the ground that General Trading Company is not the recognised tenant. It is also mentioned that it was never disclosed by the respondent that they formed a Private Limited Company either before the Rent Controller or this Court and Supreme Court as such no findings on any sort with regard to that are taken. About the payment of lift charges and betterment tax the findings were given by the Courts. In the end it is mentioned in the written arguments that the record of IIIrd Senior Civil Judge/Rent Controller shows that M/s. General Trading Company Ltd. had deposited rent from 21-5-1984 till 2-3-1987 and in continuously depositing the same in the Court of IVth Rent Controller, Karachi (South) in the name of appellant. In fact the creation of Limited Company was concealed from the appellant for more than 8 years and the rent was deposited in the name of partnership firm as such the respondent has committed default in payment to rent. In support he placed reliance on the cases of PLD 1974 SC 315, PLD 1982 SC 79, 1994, SCMR 791 and 1507.
17. The respondent-Company refuted the arguments advanced in writing by appellant's counsel and has mentioned that the appeal is liable to be dismissed as he had failed to prove the case.
18. According to him, appellant has brought the same case in the second round of litigation having failed earlier up to the level of Supreme Court. He maintained that the ground of default in payment of rent as well as services charges of lift and betterment tax were elaborated taken into consideration in the first round of litigation and appellant failed to prove the same, hence he cannot take the same grounds again in these proceedings. This fact was also admitted by one Muhammad Iqbal examined on behalf of the appellant in his cross-examination. In reply to the contention of subletting of premises by the respondent by converting into a Private Limited Company, it is stated by respondent's counsel that respondent had never sublet the premises. In fact the premises were let out to respondent viz. General Rubber Trading Company in 1974 and such tenancy agreement was got written and was signed by Naseer Vohra on behalf of respondent. The respondent was consisting of two partners, namely, Muhammad Naseer Vohra and his mother Mst. Bakhtan Begum and they converted the same into General Trading Company Ltd., with both as its Directors, such agreement and Memorandum of Articles of Association was produced in the evidence of the respondent. It is mentioned that this was done with the consent and knowledge of Ghulam Muhammad Adam, Managing Director of appellant. Even the nature of business was not changed by the above conversion of the name which fact is borne out from letter Annexure A/46 annexed by the appellant with his affidavit-in-evidence. He further submitted in writing that appellant did not raise any grievance or protest either in letter dated 3-8-1986 or 20-9- 1986 and accepted the rent for the month of January, 1984 though the Pay Order was in the name of Naseer Vohra on behalf of General Trading Company Ltd. Even Ghulam Muhammad Adam, Managing Director of appellant's Company did not raise any denial that he did not give any consent. So much so he did not file any affidavit-in-evidence nor appeared before the Court to depose to that extent. He has further described that the abovesaid conversion, took place in the year 1977 and according to appellant he came to know in 1983 but filed case in July, 1985 after a lapse of nine (9) years for which no explanation is furnished. According to him, this shows that appellant has cooked a false ground of subletting and started with second round of litigation having lost his case up to the level of Supreme Court. Appellant otherwise is regularly withdrawing the rent from the Court being deposited by the respondent. He has lastly mentioned that respondent Muhammad Iqbal examined on behalf of the appellant is neither its Director nor authorised in any manner by the appellant to depose on its behalf and has also not filed or signed ejectment application as such he is not a concerned party and his evidence should not be relied upon. With regard to the citations referred by appellant's counsel Mr. Munawar Malik stated that the same are not, applicable to the facts of the present case.
19. I have given anxious thought to the arguments advanced in writing by the learned counsel for the parties and have gone through the orders passed in the first round of litigation available in R & Ps.
20. Admittedly appellant started the first round of litigation by filing Rent Case No,4450 of 1976 for ejectment against respondent in 1976 on the ground of default in payment of rent and lift charges as well as betterment tax. The appellant could not prove the case and same were dismissed up to the level of Supreme Court. This period of litigation continued up to November, 1984. The appellant started the second set of litigation in the year 1985 by filing application under section 15 of Sindh Rented Premises Ordinance agitating the grounds of default in payment of rent betterment tax, service charges of lift aril that of subletting of the premises. He failed to prove the same before the learned Rent Controller and filed the present appeal against the impugned order.
21. Appellant examined one Muhammad Iqbal in support of the contentions. He in his cross- examination with regard to the default has said as under: "It is correct earlier to this ejectment application a Rent Case No,4450 of 1976 was filed for default of lift charges @ Rs,28.56 per month w,e,f, 1-7-1976 and betterment tax @ Rs,46.05 per month w,e,f, 1- 7-1975 as well as monthly rent. It is on record as Annexure 43. Against the decision we filed First Revision Appeal No,689 of 1980 in the High Court which was also dismissed and copy of order Annexure A:44 is on record. Against High Court order we went in Supreme Court K-95 of 1984 'which was also decided against us. Copy of order as Annexure A-45 is on record. After that we filed present case of subletting and default. It is correct that we have claimed the default of betterment tax and lift charges for the. same period."
22. In the cross-examination he has admitted that his Company received an amount of Rs,892.50 from the M/s. General Trading Company Ltd., the respondent's Company on 12-12-1983. Before receiving the cheque the appellant Company had not gone in appeal before Hon'ble Supreme Court. He has further said that the above cheque was returned to the respondent's Company on 29-1-1985 after decision of Suprethe Court. He has further admitted in his cross-examination that it is within his knowledge that the respondent-Company deposited the rent in Court. He has further said that he does not know as to who are the partners and Directors of respondent-Company. From the statement of Muhammad Iqbal, it transpired that he is not the proper person examined by the appellant. Respondent has been paying rent to the appellant after dismissal of earlier rent appeal on 4-12-1983. He sent the rent for the month of December, 1983 vide Cross Cheque No,082688, dated 12-12-1983 alongwith the letter, dated of even date produced by the respondent in his evidence. Again on 9-1-1984 he sent Pay Order No,936 of 1991 for the value of Rs,892.50 as well as rent for the month of January, 1984 which too he produced alongwith his affidavit-in-evidence.
23. Both the Cheque and Pay Order were returned by the appellant on 21-1-1985 after one year and such letter is produced by the appellant in his evidence. This admittedly has been done by the appellant after he lost his case in the earlier proceedings up to the level of Supreme Court.
24. Thereafter, the respondent sent so many money orders and started depositing rent in Court since December, 1983. The rent receipts showing the deposit of rent have been filed by the appellant alongwith his affidavit-in-evidence from above all, I am of the considered opinion that the issue of default about rental amount, lift charges and betterment tax were thoroughly examined and decided in the first round of litigation and no new default has been shown in the second round of litigation. Even according to appellant's own saying that he has claimed default of betterment tax and lift charges for the same period as was taken in the earlier litigation. The contention that the premises were let out to General Rubber and Trading Company a partnership concern and the same has been converted into General Trading Company, a Private Limited Company, hence it is a case of subletting, has no force. In my opinion, it is mainly for the reasons that according to the pleadings above conversion took place on 2-7-1977 well within the knowledge and consent of appellant and its Managing Director Ghulam Muhammad Adam yet he did not raise this issue in the first round of litigation which admittedly continued up to the level of Supreme Court till December, 1984. By this way he has apparently waived his right in this respect and the law of Principle of Acquiescence or Waiver would apply and his case is hit by the Law of Estoppel. On this aspect reference may be made to the case of Yakoob Ali v. Ismail, 1987 CLC 520 wherein this Court in sub-clause (c) has held as under: "S.15(2)(ii)---Qanune Shahadat (10 of 1984) Art. 114---Default--Effect---Forfeiture of tenancy on commission of default---Waiver--- Default in payment of rent, held, could not be waived by mere acceptance of rent by landlord as Act XVII of 1979 itself had provided forfeiture of tenancy on commission of default---Where landlord had accepted rent fully knowing that default had been committed and kept quiet for unreasonable period---Landlord would be deemed to have waived default.
25. Art.114.---Waiver, connotation of---A person in spite of having full knowledge of violation of his rights of personal nature, remained quiet for unreasonable long time without raising any objection or protest, such person, held, would be deemed to have acquiesced in offending act or had waived it."
26. Moreso it has also come on the record that appellant has been accepting rent from General Rubber & Trading Company and in that way also he accepted him as his tenant. According to his case he kept the pay order and cheque for over one year with regard to the rented amount and returned the same thereafter is not the legal requirement and on the contrary it shows that he accepted the amount and then returned the same with intention to create a ground of default and that of subletting. I find it appropriate to cite case of Shahid Latif Avon v. Hafiz Manzoor 1989 CLC 1128, wherein it has been held as under:-- "S. 15(2)(ii)---Default in payment of rent---Proof---Failure of rent collector to collect rent according to practice---Tenant tendered rent through money order, but on refusal by landlord to receive same tenant deposited rent in Court---Tenant by depositing rent in Court, thus, had not committed default in payment of rent. ----S.15(2)(iii)(a)---Subletting---Proof---Tenant was the same person who being a Secretary and Organiser of the Firm had for the time being placed' his office in the premises---No evidence on record was available to show as to what were the terms and conditions of tenancy---Letter produced on record showed that tenant was permitted by previous landlord to use premises for any lawful purpose or for any firm, association or organization that he might be interested in---No sub-letting, held, could be alleged in circumstances."
27. Applying the principles laid down in this case the appellant admittedly has failed to prove that the demised premises has been handed over to someone else as subtenant. On the contrary it has come on the record that tenants are the same partners who simply converted them as Directors.
28. From the above discussion, it is also observed that appellant rented the tenement to General Rubber & Trading Company, a partnership concern with Naseer Vohra and his mother Mst. Bakhtan Begum is partners. The same was converted into a Private Limited Company and got the same registered as such Memorandum of Articles of Association has been placed on the record of this case. From which it transpires that the above two partners have only become its Directors otherwise neither its character nor status has changed. It will be very much appropriate here to refer the words (subletting and ' conversion' which is defined in section 15(2)(iii) of Sindh Rented Premises Ordinance, 1979: "Sub-clause (iii) of clause (2) of section 15 is reproduced (iii) the tenant has, without the written consent of the landlord--- (a)handed over the possession of the premises to some other persons; (b)used the premises for the purpose other than that for which it was let out; (c)infringed the conditions on which the premises was let out."
29. The appellant has not been able to lead evidence on any of the above three ingredients.
30. Apparently the appellant has created this ground of subletting after loosing his case at the level of Supreme Court up to November, 1984. Admittedly Ghulam Muhammad Adam, Managing Director of appellant has never denied to the consent to abovementioned conversion of partnership into a Limited Company nor filed any affidavit-in-evidence or appeared before the Court. Moreover, the conversion took place in the year 1977 and according to the appellant he came to know in 1983 but filed the rent case in July, 1985 after a gap of 8 years. This shows that appellant after loosing first round of litigation has attempted to create a false ground of subletting. Otherwise he is regularly withdrawing the rent from the Court which is being deposited by M/s. General Trading Company Limited (a private limited Company) which fact appellant has admitted in para.8 of his affidavit- in-evidence. From this, it appears that he has entirely failed to prove the case of eviction on any of the grounds. The authorities referred by appellant's counsel are not applicable to the facts of the present case but are on different facts and circumstances. In the case reported in PLD 1974 SC 351 it is held that if a person holds lease-hold rights in his own name and subsequently assigns them to a Firm or Private Limited Company consistent of family members it cannot be said that no change has been taken place in the status of tenant. Here in this case the lease was in the name of one person who subsequently introduced other persons and formed a Company which is not the case in case in hand as the very agreement is in the name of Company having two partners who got it registered as a limited Company by becoming as its Directors. So, no new person was introduced. PLD 1982 SC 79. This case also does not apply in the present case as because in the decided case although there was conversion but the same was without informing or getting permission from the landlord or taking the landlord in confidence. In the present case the conversion was made with the consent and knowledge of Ghulam Muhammad Adam, Managing Director of the appellant. Moreover, this conversion took place in 1977 admittedly during the pendency of previous litigation and according to the appellant's own saying that he came to know in 1983 yet no action was taken by him which implies as well as knowledge in such way waived the right. In the case of 1994 SCM R 791, 1507 and 1995 SCM R 330. These cases are not applicable with the facts of the present case as in the decided cases, tenancy was in the name of an individual who subsequently introduced new partners by creating a firm or tenant handed over possession to some other persons.
31. For the reasons discussed above and in view of the case-law, I am of the considered opinion that appellant has failed to prove the case of eviction or respondent and has not been able to show any illegality, misreading or non-appraisal of evidence from the judgment of learned Rent Controller. Accordingly the order of Rent Controller is maintained and appeal is dismissed.
32. However, in the circumstances of the case I left the parties to bear their own costs.