SAYED NAJAM-UL-HASSAN KAZMI, J. - This second appeal arises from order, dated 20.2.1999 of the learned District Judge, Lahore, by which appeal of respondent was allowed and ah order of ejectment was passed against the appellant.
2. Respondent instituted a petition under Section 13 of the Urban Rent Restriction Ordinance, 1959, against the appellant, claiming that being landlady, she rented out to the appellant land measuring 2910 sq. Ft. Bearing Survey No. 3025 at the McLeod-Napier Road Crossing, Lahore, the appellant was tenant in respect of the said land, the land was rented out vide the Lease Agreement, dated 10.10.1969, for the installation of Petrol Pump and Service Station, the appellant was running the Petrol Pump and Service Station in the name and style of Sultan Bahu Petrol Pump, the monthly rental was payable for each year in advance by 10th of October, on the enforcement of the Punjab Urban Rent Restriction (Amendment) Act of 1991 the appellant was paying rent at the rate of Rs. 2750/- per month and in terms of newly added provision of Section 5-A of the Act, the appellant was duty bound to increase monthly rent By 25% w.e.f. 1.7.1989, the appellant failed to increase the monthly rental as required in law and that the appellant committed wilful default in the payment of -regular rental from October, 1994 to September, 1995 and was thus liable to eviction.
3. The appellant contested the ejectment petition and maintained that the respondent had no cause of action to file the petition, the petition was moved for causing unnecessary harassment to the appellant and to extract money over and above the agreed rent, the petition was mala fide, the respondent had no locus standi to file the petition, the petition was not maintainable under the Ordinance, it was violative of the terms and conditions of agreement, dated 10.10.1969, there being an Arbitration Clause, the proceedings under the Ordinance were not competent, the provisions of Section 5-A of the Ordinance were not applicable and that no arrears of rent were due.
4. Initially, the issue in regard to the applicability of provisions of Section 5-A of the Punjab Urban Rent Restriction Ordinance was framed, but later on the issues were amended and new issues were added. Resultantly, the parties were invited to lead evidence on the following issues:-
(1) Whether the provisions of Section 5-A of the Rent Restriction Ordinance is applicable in the present case? If so, its effect? OPR.
(1-A) Whether the respondent has defaulted in payment of rent? OPA.
(1-B) Whether the petitioner has no cause of action, locus standi and the petition is mala fide and is liable to be dismissed? OPR.
(1-C) Whether the petition is incompetent in view of an arbitration clause in the agreement? OPR.
(1-D) Whether the petition is false, frivolous and vexatious and needs rejection with exemplary cost.
5. The learned Rent Controller vide order, dated 7.9.1998, dismissed the ejectment petition but in appeal, the order was set aside, the appeal was allowed, and in result the eviction order was passed against the appellant.
6. Learned counsel for the appellant argued that initially land measuring 2910 sq. Ft. Was leased out in favour of the appellant but on the widening of road, the appellant was deprived of a portion of the rented land which required rateable reduction in the rent but the appellant continued making payment of the rent on the agreed terms and since now the issue of default has been raised, the appellant is entitled to press for charging of the monthly rental by allowing retable reduction therein, proportionate to the reduction of the leased area. It was contended that the provisions of Section 5-A of the Ordinance were attracted to the non-residential buildings but in this case, no non-residential building was rented out and, in fact, a piece of land was rented out for commercial purposes, and resultantly, the appellant was neither obliged to make any increase in rent by 25% nor can be adjudged as defaulter on account of its non-payment. It was maintained that the provisions of Section 5-A would also be not attracted on account of executed agreement between the parties. It was added that on acquiring the rented land, the appellant gave dealership/licence to the respondent who did run Petrol Pump for some time and later assigned the rights to one Rauf who was attorned by the appellant as dealer, therefore, the dealer who is now running the Petrol Pump as an agent of appellant would be necessary party to the proceedings and the having not been joined, the petition could not proceed. Lastly, it was argued that there was no wilful default, the respondent had admitted that the cheque was not received and that the rent having been subsequently tendered it would not be a case where the discretion could be exercised against the appellant.
7. While defending the impugned order, learned counsel for the respondent strenuously argued that the appeal was barred by time, there was no good ground for condonation of delay. Section 5 of the Limitation Act is not applicable to the second appeal, the time consumed by the appellant by retaining application could not be excluded under Section l2 of the Limitation Act, the appeal itself would not be maintainable if the argument of appellant's counsel as raised is accepted and that there was a wilful default in the payment of rent from October, 1994 to September, 1995, the tender of rent through cheque was not a valid tender under Section 13 of the Rent Restriction Ordinance, the findings of fact recorded by the learned District Judge did suffer from any mis- reading or the evidence on record and that in the peculiar circumstances of the case, the discretion was rightly exercised against the appellant.
8. The learned Rent Controller, on appraisal of the evidence, observed that the provisions of Section 5-A of the Punjab Urban Rent Restriction Ordinance, 1959 was applicable to non-residential building and that the property in dispute was a rented land, therefore, the appellant was not obliged to increase rent by 25 % nor could be held to be defaulter on account of non-increase of rent by 25%. To the contrary, the learned District Judge took the view that the property in dispute was a non- residential building, the provisions of Section 5-A of the Ordinance were attracted and that the appellant having failed to increase the rent in terms thereof was liable to eviction.
9. The first and foremost question which requires attention is as to what is the nature of the premises in dispute. In the ejectment application, respondent claimed that she had rented out land measuring 2910 sq. Ft. Bearing Survey No. 3025 at the McLeod-Napier Road Crossing, Lahore. Lease Agreement has been tendered in evidence as Exh. R/I. Recital of Agreement (Exh. R/I) is to the following effect:- "Whereas the Lessor is in rightful possession of the plot of land (more particularly described in the schedule 'A' attached) hereto and hereinafter called ''The Land" and has agreed with the Company for the grant of a lease of the land to the Company as hereinafter provided."
10. From the recital of the Lease Agreement and also various covenants therein, one gets an irresistible impression that the plot of land was given on rental basis for the use of business and for commercial purpose, with permission to raise construction of a Petrol Pump and Service Station.
The subject-matter of lease was land "without structure" though there was express permission to raise construction for running a Petrol Pump.
11. Section 2 (f) of the Ordinance defines "rented land" as "any land" let separately for the purpose of being used principally for "business or trade". The word "building" has been defined in clause (a) of Section 2 of the Ordinance as "any building or part of a building", let for any purpose, whether being actually used for that purpose or not, including any land, godowns, out-houses, together with furniture let therewith but does not include a room in a "sarai", hotel, hostel or boarding house.
Similarly, "non-residential building" has been defined in Section 2 (d) of the Ordinance as "a building being used solely for the purpose of business or trade". From the definition of the term "non-residential building" and "rented land", it is obvious that the rented land is one which was let separately for the purpose of business or trade while non-residential building is a building which is being solely used for the purpose of business or trade. In Muhammad Khan and 18 others Vs. Mst.
Alamtab and 8 others (PLD 1973 Quetta 28), it was observed that the land not let out chiefly or mainly for purposes of business or trade would not fall in the definition of "rented land". In M.
Imamuddin Vs. Mst. Surriya Khanum (PLD 1991 SC 317), it was ruled that the land would fall within the definition of "rented land" if used for commercial purpose. In Mistri Ahmad Hassan Vs. Abdur Rauf Khan and others (1986 SCM R 494), it was observed that the tenant of rented land and superstructure thereon without any machinery would be a tenant at most of either rented land or non-residential building which comes within ambit of Ordinance falling within the jurisdiction of Rent Controller.
12. From the rule in the precedent case, and keeping in view the definitions of words "rented land", "building" and "non-residential building", if the facts of the present case are examined, one finds that no building was rented out and all that was given on rental basis was a plot which was acquired by the tenant for principal use of business. It is thus a case in which the rented land was subject-matter in issue. Mere fact that the tenant raised construction with the implied or express consent of the landlord, on a plot of land and rent of the land acquired on rental basis, would not bring the premises within the definition of non-residential building as no structure along with the land was ever given on rental basis.
To bring the premises within the definition of building/non-residential building, one needs to prove that the building or building along with the land was let out for commercial use. If the tenant raised construction with the express or implied consent of the landlord, then he accepts the responsibility to remove the same at the time of eviction and any breach thereof empowers the Rent Controller to direct the removal of the superstructure, for enforcing eviction order. Reference can be made to Noor Muhammad Khan Vs. Haji Muhammad Ali Khan and 24 others (PLD 1973. SC 218) where it was ruled that "eviction" in Section 13 of the Urban Rent Restriction Ordinance, includes ordering removal of superstructure. This being so, the learned Rent Controller, in the cases of eviction from the rented land, on which the superstructure is raised by the tenant with the permission of the landlord will be empowered to direct eviction by removing the superstructure existing thereon.
13. Having found that the property in dispute in this case, was a "rented land" within the meaning of term as understood in the Ordinance. The next question would be as to whether Section 5-A of the Ordinance VI of 1959 was attracted and if not so, whether the tenant could be held to be defaulter due to non-payment of rent by making 25% increase after every three years. The provisions of Section 5-A of the Ordinance, make it obvious that the same are applicable to non-residential building and not to the rented land or to the residential building. In terms of this provision, the rent of non-residential building stands automatically increased at the end of every three years of tenancy by 25% of the rent already being paid by the tenant, and this provision of law was made applicable w.e.f. 1st of July, 1989. Since in this case, the rented land was involved and no non- residential building was rented out, therefore, the respondent could not possibly expect automatic increase of rent by 25 %. Reference was made to sub-clause (6) of Section 5-A of the Ordinance which contemplates that the provisions of subsections (1) to (5) of Section 5-A shall not apply if the landlord and a tenant agree to increase the rent by an agreement in writing executed before the Controller. Of course, this situation does not exist in the present case as it is nobody's case that by an agreement before the Rent Controller, rent was mutually agreed by the parties.
14. This brings the case to the third limb of the issue which pertains to the maintainability of the second appeal. Sub-section (6) of Section 15 of the Ordinance was inserted by the Punjab Act, III of 1991. In terms thereof, in case of non-residential building, the person aggrieved by an order passed on appeal was given a right to prefer a second appeal before the High Court within 30 days from the date of the order of the appellate authority. The provision makes it obvious that the right of second appeal has been extended in cases of eviction from 'lion-residential building", while no right of second appeal is available in the cases pertaining to the non-residential building or rented land. Reference can be made to Muhammad Ali Bhatti Vs. State Life Insurance Corporation of Pakistan (PLJ 1991 Lahore 93) where it was observed that a tenant of rented land cannot maintain a second appeal before the High Court on the force of amended sub-section (6) of Section 15 of the Ordinance. In view of the findings that the appellant was leased out rented land and the order of ejectment has been passed in regard to such land, the present second appeal will not be competent or maintainable.
15. In the course of hearing of this appeal, the learned counsel for the appellant, faced with the argument as to the competency of the appeal, had maintained that if the appeal would not be found to be competent, the same should be decided on merits by treating it as writ petition. On account of the findings herein above, the appeal has been found to be incompetent which is being treated as writ petition and is being disposed of accordingly, as it will be too harsh if the appellant is non-suited at this stage on the simple ground that the appeal would not lie and that writ petition should have been filed in the first instance.
16. Since the appeal has been treated as writ petition, therefore, the objection of the learned counsel for the respondent that the appeal was not filed within time and the period consumed by the appellant by withholding application form for the supply of certified copy could not be excluded, will not remain material. Had it been a case of appeal or the appeal had been found to be maintainable, then it would have been difficult for the appellant to explain the delay which occurred, due to the withdrawal of application for supply of .Certified copy and refiling the same after the expiry of limitation.
17. As to the merits of this case, the objection of learned counsel for the petitioner was two fold viz the rent should be reduced in proportion to the reduction of the leased area and secondly the cheque having been refused, the petitioner should not be treated to be wilful defaulter and that the dealer (Rauf) should' have been impleaded as a party. Insofar as the implemented of Dealer (Rauf) is concerned, it is observed that at the initial stage, he did make effort tg become a party which could not succeed and not accepted the fate of his application, and did not agitate the matter any further. No appeal was filed by the Dealer against the order of ejectment, before the learned District Judge nor he made effort to become party in the proceedings of first appeal and, therefore, the impugned order cannot be challenged on the ground of his non-implemented. Even otherwise the rented land was leased out to the appellant who for all intents and purposes was a tenant and, if, being tenant it allowed its agent/dealer to run the business, the agent or dealer cannot claim any interest in the lease-hold rights nor seek entry in the proceedings for eviction initiated by the landlady against the tenant. The objection raised is, therefore, devoid of substance.
18. As regards the reduction in lease area, the appellant never claimed reduction in the rate of monthly rental at any stage before the filing of ejectment proceedings and instead admits to have opted to pay rent at the agreed rate under the lease. It is also observed that the plea of rateable reduction of rent was never raised before the learned Rent Controller and in view thereof, it would be too late in the day to raise such objection. By its own conduct, the appellant will not be entitled to ask for any reduction in the monthly rental of the rented land.
19. The next question which needs determination is as to whether a wilful default was committed by the petitioner, if so, for what period. The default claimed is under Section 5-A of the Ordinance and also in the payment of regular rent. Insofar as the plea of default under Section 5-A of the Ordinance is concerned, the same is untenable in view of the findings that the provisions of Section 5-A of Ordinance were not attracted in this case.
20. The default claimed in the payment of regular rent was with respect to period covering October, 1994 to September, 1995. The ejectment petition was filed on 25.7.1995. This being so', the default could be claimed for the period before the filing of ejectment petition and not thereafter. Defence of the appellant was that cheque dated 2.10.1994 in the sum of Rs. 33,000/- was presented which was not received on the ground that it did not include 25% increased amount of rent. Reliance was placed on the statement of landlady who did not deny that she had not received the cheque as it did not cover the entire rental of the property. In terms of the lease agreement, the yearly rental was payable in advance. Even if the mode of advance payment is ignored yet, in law, the tenant is expected to make regular payment of the monthly rental. The rent for the month of October, 1994 was due on the 1st of November, 1994 which appellant was expected to pay within 15 days from the date fixed for the payment of rent. In the absence of any such date, the rent should be paid within 60 days from the period for which the same would be due. The rent for the month of November, 1994 would be due on the 1st of December, 1994 while the rent for the month of December, 1994 would be due on the 1st of January, 1995. Similarly, the rent for January and February, 1995 would become due on the 1st of each succeeding month. The cheque which was statedly presented has been produced as Mark-R/I while forwarding letter, dated 19.3.1995 is Exh. R/7. Exh. R/7 would show that along with this forwarding letter, cheque, Mark-R/I, dated 2.10.1994 No. 226635, was allegedly presented. Thus as per the appellant's own showing, the cheque, dated 2.10.1994 was presented for the first time in March, 1995. The appellant was duty bound to prove that the rent for the month of October, 1994 was tendered or paid in November, 1994 and similarly, the rent for the month of November, 1994 was tendered or paid in December, 1994. In the like manner, the appellant had to prove that the rent for subsequent months was tendered or paid within the stipulated date in the succeeding months. As per own showing of the appellant, the rent from October, 1994 to February, 1995 was not tendered for payment within the stipulated period as provided in the Ordinance and instead, for the first time, the tender was allegedly made on 9.4.1995. There was no use for preparing cheque, dated 2.10.1994, retaining it in one's pocket and not presenting it in time. The presentation of cheque after 5 months was neither understandable nor would wash away the effect of default already committed. It was also not proved if the appellant had the money in the account in March, 1995 when the cheque, dated 2.10.1994 was allegedly presented. The perusal of the oral. Evidence would show that the appellant did not claim either sending of money order or deposit of rent from October, 1994 to February, 1995 during the stipulated period. Rather RW-1 (representative/employee of the appellant) admitted in his testimony that the rent was neither tendered by money order nor deposited, and except the presentation of the cheque, which, of course, was presented after five months, no efforts were made to tender the rent in time. Insofar as the other cheque is concerned, a copy of the same is produced as Mark-R/II. This cheque was, dated 17.8.1995 which was purportedly presented through Exh. R/8, forwarding letter which is, dated 12.9.1995. This cannot help the appellant/petitioner for the reasons that on 25.7.1995, ejectment petition had already been filed. Even otherwise, the petitioner/appellant failed to prove that this cheque was ever presented to the respondent as the reference in the statement is to the presentation of one cheque. Be that as it may, the alleged tender after the commission of default and that too during the pendency of ejectment, petitioner could not wash away the default already committed which cannot over-looked. In law the tender is acceptable through money order or by deposit in the treasury. None of the two modes was ever adopted. The matter would have been otherwise if, the cheque had been received of deposited in the account of the landlady and encashed, and in such situation, the tenant could pleaded that the cheque stood credited in the account of. The respondent-landlady. Therefore, the plea of default would not be available.
However, in a case where according to the appellant/petitioner, the cheque was not received nor credited in the account of respondent, it was necessary to either tender the rent through money ^order within time or to deposit it in the Treasury with the permission of the learned Rent Controller with notice to the landlady but this course was never adopted.
21. Another aspect relevant for deciding the question of default will be that after the alleged refusal to accept the cheque, dated 2.10.1994 in March, 1995, the appellant/petitioner never deposited the rent in the Treasury till such time, the Rent Controller passed the order under Section 13 (6) of the Ordinance. The amount is claimed to have been deposited, during the pendency of the ejectment petition, on 11.2.1996. If the cheque was not accepted as the appellant/petitioner had not increased the rent by 25%, it would not exonerate the petitioner from making regular tender in the subsequent months or to deposit rent regularly in the Treasury. It is a settled rule that the demand of excessive rent does not absolve the tenant of his obligation to pay or tender rent due. It is also a rule that if the landlord did not accept rent on one occasion, it would not exonerate the tenant of his liability to tender or deposit the same for the successive period. Reference can be made to Khurshid Alam Vs. Sh. Fazal Karim (1983 CLC 2538) and Yousaf Shah through his brother (represented by 9 legal heirs)
1A. Haji Ghulam Jan Khan (1975 SCM R 464).
22. From the facts noted supra, it is thus discernible that in the first instance the rent for the month of October, 1994 to February, 1995 was never tendered in time nor deposited within the stipulated period and thereafter the petitioner failed to tender or deposit the monthly rental for the successive period within the stipulated time and that the disputed rent was allegedly deposited in February, 1996. In this way, wilful default was committed which would make the appellant/petitioner liable to ejectment. The ejectment was allowed in appeal on the ground of default. In view of the above circumstances/the tenant having been found to be a wilful defaulter, therefore, no ground exists for interference in the order of ejectment.
23. For the reasons above, this appeal (treated as writ petition) is dismissed. The petitioner/appellant is allowed for months time to deliver the vacant possession to the respondent.