' These appeals arise out of the order dated 15-7-1998 passed by learned IV-Rent Controller, South Karachi whereby the Rent Case No,1883 of 1994 filed by State Life Insurance Corporation of Pakistan.
Hereinafter referred to as the landlord, against M/s. Mermaid Constructions (Pvt.) Limited, herein after referred to as the tenant, for fixarion of rent under section 8 of the Sindh Rented Premises Ordinance, 1979 was allowed.
2. Facts of the case, concisely stated are that M/s. Mermaid Constructions(Pvt.) Limited is tenant in respect of office premises admeasuring 605 sq. Ft. On 3rd Floor, of State Life Building No,6-A, M.A.
Jinnah Road, Karachi on monthly rent of Rs,1,534 i,e, Rs,2.53 per sq. Ft. Per month excluding electricity, telephone and other charges. The landlord namely M/s. State Life Insurance Corporation of Pakistan filed the aforementioned application for fixing the rent at Rs,16 per sq. Ft. Per month on the grounds that (i) rent of similar premises situated in the similar circumstances in the same and adjoining locality is around Rs,16 per sq. Ft per month, (ii) cost of repair and maintenance of the rented premises/building has increased manifold, (iii) the K.M.C. And K.W.S.B. Have enhanced the water conservancy and fire rates/charges, and (iv) annual value of the said premises/building has been assessed by Excise and Taxation Department as Rs,4,39,891 and they have also levied 15% surcharge per annum on the value so assessed since 1-7-1993 thereby increasing the property taxes and betterment tax thereon. The tenant filed his written statement and resisted the case of landlord on all the grounds. He stated that the landlord has taken different positions in different cases, as from one tenant (in Rent Case No,1090/93) he has demanded rent at Rs,6 per sq. Ft. And from another tenant (in Rent Case No,514/93) Rs,8 per sq. Ft and regarding the tenant's own case it was explained that on 18-1-1993 the landlord demanded enhanced rent at Rs,5 per sq. Ft. It was further pleaded that the locality where the tenement is situated and the localities cited by the landlord in the annexures filed to their application have no comparison as the buildings situated at 1.
1. Chundrigar Road are far away and are in the best locality of the city. Regarding the cost of repair of the building the case of landlord was denied and it was stated that there is only 30% increase in maintenance which too has never been carried in the tenement in question. The other two grounds were denied for want of knowledge.
3. The learned Rent Controller, on these pleas, framed the following points for determination :-- "Point No 1: ' What would be the fair rent of the premises ?
' Point No 2: ' What should be the order ?"
4. One Muhammad Arif, Manager, Estate Division of the landlord filed an affidavit-in-evidence on 13-1-1996. He was to be cross-examined by the counsel for tenant but on 3-9-1997 the tenant's side was closed as his advocate failed to make appearance on that date for cross-examining the witness. An application was filed on 13-11-1997 for. Re-opening the tenant's side but the same was dismissed vide order 16-5-1998. Thereafter, the tenant did not file his affidavit-in evidence whereupon his side of evidence was closed on 23-5-1998. The learned Rent Controller, on examining the material available on record, fixed the rent at Rs,7 per sq. Ft. Per month, excluding other charges with effect from the date of passing of the impugned order,. Hence, the tenant challenged the said order by way of F.R.A. No,523/98 praying that the rent be fixed at Rs,4 per sq. Ft.
Per month, while the landlord questioned the same order in F.R.A. No 532/98 praying that the rate of rent be fixed at Rs,16 per sq. Ft. Per month, both these appeals are being disposed of by this common judgment.
5. I have heard learned counsel for the parties and examined the material on record.
6. Mr. Zahid Hussain, learned counsel for the landlord submitted that the tenant neglected to cross- examine landlord's witness Muhammad Arif who had filed his affidavit-in-evidence and, therefore, the Rent Controller closed his side for the purpose of cross-examination whereafter no affidavit-in- evidence could come on record on the side of tenant/opponent, therefore, the evidence led by landlord stood unrebutted as such it was incumbent on the learned Rent Controller to assess the rate of rent on the basis of the tenancy/lease agreements produced alongwith the affidavit-in- evidence wherein the rate of rent in the tenements of the same locality varied from Rs,16 to Rs,32; consequently, according to him, the rent fixed at the rate of Rs,7 per sq. Ft. Was very low. Relying on Muhammad Ilyas Khan v. Hameeda Sultana Begum (1994 CLC 1129) he submitted that the Rent Controller was justified in closing the side of the opponent/tenant who had wilfully neglected to cross-examine the witness. Learned counsel further submitted that the Rent Controller erred in fixing the rent from the date of impugned order, as in view of the law laid down in H. Cooper v. State Life Insurance Corporation of Pakistan (1994 SCM R 2115) the rent is to be fixed from the date of application. He further argued that the landlord has successfully proved his case on all the four factors contained inclauses (a) to (b) of subsection (1) of section 8 of. The S.R.P.O. However, in view of the observations made if Syeda Habiba Rizvi v. Muhammad Yameenullah Pervaz Malik (1995 CLC 1121) he submitted that rate of rent fixed by the learned Rent Controller was very low.
7. On the other hand, Mr. Dherani, learned counsel for the tenant, submitted that the scheme of section 8 is such that all the factors enumerated in clauses (a), (b), (c) and (d) of subsection (1) thereof shall collectively be considered, while in the impugned order the learned Rent Controller has examined the case in the light of only two factors i,e, cost of repair and maintenance and the rent fetched by tenements situated in similar conditions and localities, therefore, according to him, in the light of law laid down in Mst. Mehrunnisa v. Muhammad Rafiullah (1995 CLC 202) the finding of learned Rent Controller is defective. As regards the closing of his side he argued that the landlord's witness filed his affidavit-in-evidence on 15-1-1996 but the Court of learned Rent Controller was lying vacant up to 29-4-1997 and when the Presiding Officer took over, the first date of hearing was 10-7-1997, but since the opponent/tenant had changed their Advocate who filed his power on 8-10-1997, the order of closing the side in the intervening time i,e, on 3-9-1997 4, as such, not proper and the tenant/opponent should have been afforded an opportunity to contest the case on merits. Regarding the order passed on application for re-opening of the side he submitted that Article 181 to the Limitation Act will come into play and not Article 164 as it was an adjourned date and not a date fixed in the summons.
8. I have carefully considered these contentions in the light of material on record.
9. The evidence placed before the learned Rent Controller comprised the affidavit-in-evidence of Muhammad Arif and the documents produced as annexures to this affidavit which the learned Rent Controller examined in the light of the main application and the written statement. The annexures Exhs."A/1" , "A/2" and "A/3" show that in the adjoining locality the rate of rent on the ground floor was Rs,25 per sq. Ft. Per month. The annexures "A/4" to "A/10" also relate to premises on ground floor in an adjoining locality and the rent thereof varies from Rs,16 to Rs,25 per sq. Ft.
Exh."A/11" is a rent deed wherein rate of rent is Rs,16 per sq. Ft. In respect of a tenement on 1st floor.
Exh."A/12" relates to a tenement on second floor and the rent thereof is Rs,16 per sq. Ft. Per month.
Lastly, Exh."A/13" indicates that Rs,32 per sq. Ft. Is being charged for a tenement on the first floor.
Thus, the evidence on record was enough to call for an assessment of the rate of rent keeping in view the range of Rs,16 to Rs,32 per sq. Ft. Charged as rent in the tenements of the same locality. At the most there could be a concession looking to the floor of the tenements.
10. Regarding the cost of repair and maintenance para.16 of the affidavit-in evidence shows that landlord had incurred heavy amount on security, maintenance/repair of the building, its lifts, fixtures and other accessories attached to the building. Similarly, in para. 17 of the affidavit-in- evidence PT/1 Exh."A/17" has been referred to in respect of the annual value of the building. Exh."A/18" is a document relating to new tax imposed under the name of surcharge. Likewise, the documents Exhs."A/19" to "A/31" relate to payment of taxes made to K.M.C. And K.W.S.B. Indicating the enhanced rate charged.
11. In view of such overwhelming evidence on record the Rent Controller, before whom the evidence stood unrebutted, had no reason to estimate the rate of rent at Rs,7 per sq. Ft. Only. He has, no doubt, considered the letter dated 18-1-1993 of Manager Real Estate of the landlord wherein Rs,5 per sq. Ft. Was agreed as rent, but this document was not tendered in evidence as the side of opponent had already been closed, therefore, the landlord had no opportunity to rebut the same or put forth an explanation as to under what circumstances, such offer, if any, was made and how under the rent application filed after 23 months thereof his own claim of rent at Rs,16 per sq. Ft. Was justified.
12. In these circumstances the principles laid down by this Court in 1995 CLC 1121 are fully attracted.
In that case the Rent Controller had though agreed with the landlord that the rent in the same building for similar premises was being paid at the rate of Rs,1,000 per month but without assigning any reason he had fixed the rent at Rs,700 per month. In the instant case, too, there was unrebutted evidence before the learned Rent Controller, showing a wide range of rate of rent starting from Rs,16 and onwards per sq. Ft. And apparently there was no reasonable ground to estimate the rent at Rs,7 only per sq. Ft. Hence, I am inclined to follow the principle laid down in the said authority that in such circumstances the case be remanded to the Rent Controller for fresh disposal.
13. On the second point with regard to the date of commencement of rent so fixed, the law laid down by the Hon'ble Supreme Court in 1994 SCM R 2115 leaves no room for further discussion as it was concluded therein that the fixation of rent from the date of application was justified and not from the date of order passed by the Rent Controller.
14. As regards the closing of side of opponent, on perusal of record of the lower Court, it transpires that the affidavit-in-evidence of Muhammad Arif was filed on 12-12-1995 when the Court was lying vacant, which position continued up to 29-4-1997. However, when the Presiding Officer took over.
The first date of hearing was 10-7-1997, but on that date the opponent's advocate was absent. He remained absent on the subsequent date i,e, 8-8-1997 and the position remained the same on 3- 9-1997, on which date the matter was adjourned for affidavit-in-evidence of opponent and the side of opponent for the purpose of cross-examination was closed. Thereafter on 13-11-1997 the application for restoration of the side of opponent was filed which was dismissed by the learned Rent Controller observing that the rent application was three years old and there was no reason to allow the opposite-party a chance to linger on the matter for an indefinite period.
15. The case diary of the Rent Controller shows that the Court was vacant from 16-4-1995 to 29-4- 1997 that is to say, for a period of two years, therefore, it is hardly conceivable to accept the observation that the opponent had contributed towards prolonging the disposal of the rent case.
The tenant/opponent has explained that there was change of advocate, therefore, the party was not able to apply for restoration of the side of the opponent immediately. The record shows that the new advocate for opponent/tenant had filed power on 8-10-1997 and thereafter on 13-11-1997 the application for restoration was filed. The learned Rent Controller while dismissing the application for restoration of the side of tenant has not given any finding if the application was barred by time, therefore, it is needless to enter into the controversy if Article 164 or 181 of the Schedule to Limitation Act was applicable. But on merits there was adequate justification for re- opening of the side of tenant as major portion of delay in conclusion,of the trial essentially falls within the period when the Court remained vacant. Thereafter, there was change of advocate yet the matter was promptly prosecuted.
16. Learned counsel for landlord contended that in view of the principle laid down in the authority 1994 CLC 1129 the tenant, who is responsible for negligence, is not justified to challenge the impugned order I have gone through the reported case. In that case, the tenant after filing written statement had remained continuqusly absent and therefore ex parte decree was passed against him and he had applied for setting aside the ex parte decree before the Rent Controller after eight months, whereas, in the instant case the new advocate for tenant approached the Rent Controller within a short period and in a way efforts were made on behalf of the tenant at the earliest to contest the matter but his side was closed and he was not allowed to cross-examine the witness.
This authority would, therefore, not improve the case of landlord.
17. I am of the considered view that in the aforestated circumstances the tenant/opponent deserved an opportunity to cross-examine the witness and to file an affidavit-in-evidence on his side. Hence, the rational conclusion would be that when reasonable opportunity to contest the proceedings, leading to a decision on merits has been disallowed to the tenant, impugned order is liable to be set aside on this ground,, as well.
18. Next, it was contended that all the four factors provided in subsection (1) of section 8 of the Ordinance have not been considered by the learned Rent Controller while passing the impugned order, therefore, the order is improper. The position appears to be correct but in an unusual situation like that of the instant case the benefit thereof shall go to both sides. The law laid down in 1995 CLC 202 is based on an unreported judgment of the Hon'ble Supreme Court the relevant portion whereof is as under:-- "In the present case, we have noticed that the learned Rent Controller solely determined the question of fair rent on the basis of the alleged prevalent rent, which was not warranted by law. In this regard, reference may be made to the case of Banarsi Silk Cloth v. Mst. Amna Bai (1986 CLC 1570), wherein one of us (Saleem Akhtar, J.) has held that it is incumbent on the Rent Controller to take into consideration all the four factors specified in section 8 of the Ordinance. However, we may observe that the failure of the landlord to bring on record material in respect of any of the above four elements to show increase, would not necessarily lead to the rejection of an application, but it may affect the quantum of fair rent."
19. In view of the above, the learned Rent Controller is required to take into consideration all four factors specified in subsection (1) of section 8 of the Ordinance, but in the impugned order despite the fact that landlord produced evidence on all four factors the learned Rent Controller laid stress on the rent fetched by the tenements in the adjoining localities in similar circumstances and fixed the rate of rent according to his assessment. On this score also the impugned order is liable to be set aside.
' The upshot of the above discussion is that the finding of the learned Rent Controller that fair rent of the premises would be Rs,7 per square foot in the light of evidence so far available on record does not appear to be reasonable. All the same, setting down the date of passing of the order as the terminus a quo for payment of fair rent so fixed is also not legal in view of the 'law laid down by the Hon'ble Supreme Court that payment of fair rent shall commence from the date of application made for the purpose. The learned Rent Controller while fixing the fair rent failed to consider the evidence led on all the four factors specified in subsection (1) of section 8 of the Sindh Rented Premises Ordinance although at that moment sufficient material on those points was available before him. On the other hand, he has stopped the tenant from cross-examining the witness of the landlord though there was sufficient justification for affording such opportunity to the counsel for tenant. There was also no justification for disallowing the tenant from filing affidavit-in-evidence on his side. On all these grounds, the impugned order is set aside and in principle both appeals stand allowed partly. The costs shall be borne by the parties themselves. The case is remanded to the learned Rent Controller for fresh trial, in particular, allowing the tenant/opponent to cross-examine the witness of applicant as also to file affidavit-in-evidence on his behalf.
' Ordered accordingly.