' The appellants are in occupation of Shop No, 250, Block No, 9, Sadder, Jhang. On 31st of July 1973, the respondents filed an ejectment application against them under section 13 (2) (ii) (a) of the West Pakistan Urban Rent Restriction Ordinance, 1959, on the ground that appellant No, 1 who was the tenant had sublet the premises to appellants 2 and 3 and thus made himself liable to ejectment. In their reply the appellants stated that the shop in question had been taken on rent by the appellant No, 1 for the benefit of the partnership. They also relied on Exh. R/1, the partnership deed dated 1st of September 1967 for the purpose.
2. The Rent Controller framed the following Issues
(1) Whether the respondent No, 1 has subletted the disputed shop to respondents Nos. 2 and 3?
(2) Relief.
' The parties led oral evidence in addition to the production of Exh. R/1.
3. After discussing the material available on record, the learned Rent Controller relied on Exh. R/1 and came to the conclusion that the shop in question had in fact been sublet and, therefore, allowed the application for ejectment. An appeal by the appellants also failed for the same reasons and was dismissed. They, therefore, have filed the present second appeal.
4. It is contended by the learned counsel for the appellants that the Rent Controller did not consider the pleadings of the parties before framing the Issues. According to him the Court should have decided if the rent deed had been executed on behalf of or for the benefit of the partnership or was it meant for the appellant No, 1 himself ? Further, the trial Court, it is argued, should have seen if the respondents by accepting rent and for not approaching the Rent Controller for years had waived their right to eject on that ground. The learned counsel pleaded that, in any case, the user of a shop by a partnership, in which the tenant himself was a partner, did of amount to subletting and, therefore, the two Courts below erred in law in bring the ejectment.
' None of the respondents/landlords had appeared as a witness the Rent Controller and the learned counsel assails that strenuously. He contends that the respondents had known the very beginning i,e, at least 6/7 years before the filing of the ejectment application about the user of the shop by the partnership and ha in fact been receiving rent from it before they approached the Rent Controller. The contention of the appellants is supported by the evidence produced by them. Briefly it is to the effect that the shop in question had been taken on rent for the benefit of the partnership and that the landlords had not only known about it for years but had also been receiving rent from the partnership.
6. In their written reply as said above, the appellants categorically and clearly stated that the very tenancy had been secured for the benefit of the partnership though the rent note had been executed by appellant No, I. In this view of the matter, the respondents ought to have produced the rent deed and in case they withheld it, an adverse inference against them could not have been avoided, in view of Messrs Sajjad Nabi Dar & Co. v. The Commissioner of Income-tax, Rawalpindi Zone, Rawalpindi (1).
7. The Rent Controller and the lower Appellate Court have relied on the deed Exh. R/1 to say that the shop had been sublet. They, however, did not go into the question whether the shop had been let out originally for the use of the firm or was it meant to be for the use of appellant No, 1 exclusively.
The assertion in the plaint was that the shop had been let out to appellant No,
1. The reply of the appellants was that though the rent deed had been executed by appellant No, 1 yet the shop had been let out for the firm which carried on business therein. A. W. 1 Muhammad Hafeez stated that the shop was let out to Ghulam Muhammad who sublet it to Khan Muhammad. He did not say that the shop had been sublet to the firm. A. W. 2 Muhammad Anwar stated that his principals/respondents had let out the shop to appellant No, 1 who sublet it to other appellants without permission. He further stated that the entire merchandise in the shop belonged to defendant No,
2. The appellants, according to him, had been conducting their business in the shop for 2.1-2 to 3 years. In cross-examination he professed ignorance that the firm of the appellants had been conducting business since 1967. He, however, stated that only appellants 2 and 3 were carrying on business there. R. W. 1 Abdul Halim deposed that the firm was doing business in the shop since before 1966 which had been let out for it through Ghulam Muhammad appellant. R. W. 2 Abid Hussain deposed that the firm of the appellants had been carrying on business in the premises since 1962-63. According to him the shop was taken on rent by Ghulam Muhammad. He conducted his business there for 1 or 2 years and then entered into a partnership. Khan Muhammad appellant appeared as R. W. 3 and stated that the partnership deed was executed in 1967 and that the appellants as well as Sultan had been doing business in the shop as a firm since 1961. He. Further stated that the respondents knew that the shop was in possession of the firm as their house was quite near to it but they never objected. Ghulam Muhammad appellant appeared as R. W. 4 and stated that the shop was taken originally by him and Sultan while the other appellants joined later.
8. The Courts below relied on the wording of Exh. R/1 to say that there was subletting and therefore, a case for ejectment. None of the however, considered the pleadings or the evidence. As discussed a the evidence led by both the parties is contradictory. The applicants s that the shop had been let out to Ghulam Muhammad but witnesses did not agree if the subletting was to Khan Muhammad
(1) PLD 1977 SC 437 firm. The appellants' witnesses also did not concur if the shop had been let out to Ghulam Muhammad himself or to him for the firm. One thing, however, is clear due to preponderance of evidence that the shop was originally let out to Ghulam Muhammad only. It was, therefore, his duty to L prove that either the user of the shop by the firm did not amount to subletting, or the respondents had waived the breach.
9. The appellants have not been able to prove that originally the lease was for the firm. It is their own evidence that the firm was constituted in 1967 while the shop had been let out earlier in 1961-
63. Ghulam Muhammad stated that to begin with the shop was taken on rent by him and Sultan Muhammad. The other partners joined later. Khan Muhammad stated that the firm carried on business since 1961, though the partnership deed was written in 1967.
10. It was in this setting that the learned counsel for the appellants argued that use of a shop by the firm in which the original tenant is a partner does not amount to subletting.
11. The learned counsel for the respondent supported the orders passed by the two Courts below on the ground that the act of appellant No, 1 amounted to subletting. He relied on Motal Bai v. Abdul Aziz and others (1) to say that if a tenant surrendered a right of tenancy in favour of the partners in a partnership he was liable to be ejected. To support this plea he also referred to the contents of Exh. R/1 relied on by the Courts below.
' Section 13 (2) (ii) (a) which forms the basis of the application for ejectment reads :- "The tenant has, without the written consent of the landlord transferred his right under the lease or sublet the entire building or rented land or any portion thereof."
' The concept of the provision is analogous to the assignment or unletting the lease as known to English law in the present case, the appellant No, 1 assigned 3/4th of his lease-rights to the other two appellants and Sultan vide Exh. R/1. In that situation no one of the partners has an exclusive possessory or tenancy right in the premises though he could claim such a right jointly with others in every inch of the property. The question would be, does it amount to subletting of the entire building or any portion thereof? Halsbury, para. 1374, Vol. XXIII, III Edn., page 656 dealing with a similar situation says that a covenant snot assign or otherwise part with' the premises is not broken if the tenant who retains the legal possession of the whole of the premises at all material times though he allows other people to use the premises. Chaplin v. Smith (2) and Feebles v. Crosswaite
(3) were relied upon. Retention of premises by one partner alone on a dissolution of the partnership was not considered to be breach of covenant against assignment contained in a lease to both. It was held in Cook v. Shoesmith (4) and Grove v. Portal (5) that a covenant not to part with possession is not broken by tenant parting with part of the premises.
12. The Indian Courts' view in respect of user of a premises by a (1) PLD 1968 Kar. 635 (2) (1926) 1 K B 198 (3) (1897) 13 T L R 198 (C A) (4) (1951) 1 K B 752 (C A)
(5) (1902) 1 Ch. 727 partnership is found in Gundalapalli Rangamanner Chetty v. Desu Rangiah and others (1), the Court opined that taking other partners in business did not amount to subletting. The test laid down was that unless lessee parted with legal possession and gave to his sub-lessee exclusive possession and enjoyment of the premises, there was no sub-lease. The mere fact that another is allowed to use the premises while the lessee retains the legal possession is not enough to create a sub-lease. A different view was taken in Tansukhdas Chhaganlal v. Smt. Shambai and another (2). It was held that if a lessee allowed other persons to enter into partnership alongwith himself to carry on business in those premises, he shall be deemed to have sublet the premises to an entity different from the original lessee. A mere licence does not amount to subletting as held in S. Gian Singh v. District Judge, Delhi (3). In that case the tenant had allowed a watch-repairer to keep a show-case for safety during the night.
13. The discussion in the above two paras. Concerns the covenant against subletting the entire demised land or premises. However, in Bristol Corporation v. West Colt (4) as given in para. 1336 (f) of Halsbury referred to above it was held that if the covenant prohibits subletting of the entire premises or any part thereof to an under-tenant, the under letting of lodgings or parting with exclusive possession will amount to breach of the covenant.
14. The view expressed in Motal Bars case referred to in para. 10 above, is that where the shop was not brought into the firm as the part of partnership property, the other tenants became only licensees and no interest passed on to them so as to make them co-lessees, sub-lessees or transferees. Therefore, the tenant was not liable to eviction.
14-A. The wording of the relevant clause as reproduced above is very, clear. It prohibits subletting of any portion of the tenancy without the written consent of the landlord. The portion of the tenancy does not mean a clear cut portion of which an exclusive possession could be given to the sub- tenant but would mean that the tenant deprives himself of the right of the exclusive possession so as to part with a portion of his right as a tenant. The evidence, as discussed above, makes it quite clear that originally the shop had been let out to Ghulam Muhammad or in the words of Ghulam Muhammad to him and Sultan. In any case, other partners were inducted later and, therefore, the tenant did part with a portion of the tenancy right. After the firm got into the premises every partner according to, Exh. R/1 became entitled to a share in the tenancy and so the original tenant lost his exclusive possession. The action, therefore, falls within the mischief of the above provision and denudes the tenant of the legal protection against ejectment.
15. The last question raised was of waiver or estoppel. It was contended that the landlords who live at a short distance from the shop in question knew from the very beginning that it is the firm constituted of more partners alongwith the original tenant or tenants that was carrying on business there. Muhammad Hafeez A. W. 1 and Muhammad Anwar A. W. 2 stated that the shop had been sublet to Khan Muhammad appellant. In his cross-examination Muhammad Anwar stated that Khan Muhammad and Muhammad Shafi had been carrying on business in the shop for 2.1-2 years.
(1) (1952) 1 M L J 652
(2) AIR 1954 Nag. 160
(3) AIR 1959 Pb. 508
(4) (1879) 12 Ch. D 461 (C A)
' Tax as laid down in Rules duly followed--Imposition of tax, held, not defective on such score, ' [p. 1024IG & H
(1) AIR 1952 Ajmer 35
18. As discussed above, there is ample evidence on the record to show that the respondents did have the knowledge after the user of the shop by the firm at least since 1967 (Exh. R/1) though according to the evidence on record the firm had been doing its business in the shop since 1961/63.
There is no allegation of default in payment of rent. This fact supports the contention of the appellants that the respondents have been accepting rent from the firm throughout.
19. Admittedly the respondents had an unfettered right to treat the appellants as their tenants and waive their right to eject them on account of subletting. This view applies both to contractual as well as statutory right. Reference be made to Halsbury, Vol. 14, III Edn., page 637 : "A person who is entitled to the benefit of a stipulation in a contract or of a statutory provision may waive it, Waiver of this kind depends upon consent and the fact that the other party has acted upon it is sufficient consideration. Where the waiver is not express, it may be implied from conduct which is inconsistent with the continuance of the right. It seems that, in general, where one party has, by his words or conduct, made to the other a promise or assurance which was intended to affect the legal relations between them and to be acted on accordingly, then, once the other party has taken him at his word and acted on it, the party who gave the promise or assurance cannot afterwards be allowed to revert to the previous legal relationship $9 ' The Privy Council in Dawsons Bank Ltd. v. Nipyon Menkwa Kabushihi Kaish Japanese Cotton Trading Co. Ltd. (1) dealt with as "waiver is contractual and may constitute a cause of action ; it is an agreement to release or not to assert a right."
' This could be express or may be inferred from circumstances 'Waiver' Is an implied agreement not to assert one's contractual or a statutory right.
20. In view of the above, the act of the respondents to go on receiving rent for years knowing that it is the firm and not Ghulam Muhammad, who was doing business there, amounts to waiver. They, therefore, shall be estopped to turn round and invoke their right which they abandoned by their conduct and accepted the firm as their tenant.
' This appeal is, therefore, accepted. The orders of the two Courts below are set aside. The parties are, however, left to bear their own costs.
(1) AIR 1935 P C 79 (82)