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Second Rent Appeal No. 472 of 1980, decided on 2nd November, 1982.

---S. 13(2)-Default in payment of rent-Absence of any agreement being proved rent due, held, is to be paid within sixty days from period for which it is payable.

-- S. 13(2)-Default in payment of rent-Contention that plea of claim of default for a certain period premature and not raised before Rent Controller first appellate Court could not consider it---Default in payment of rent having been totally denied first appellate Court, held, can look into fact whether finding with regard to default given by Rent Controller was correctly arrived at.

---- S. 13(2) (i)-Rent-Default-Expiry of tenancy agreement- defendant, made out if rent of any month not paid within sixty days from period for which it was payable.

Muhammad Yousuf v. Abdullah P L D 1980 S C 298 rel. Muhammad Ashraf v. Muhammad Sharif P L D 1971 Lah. 10 ref.,

--- S. 13(2) (l), Explanation (a) 8i ' S. 15 -- Default in payment of rent-Water and electricity charges payable ' by tenant deemed to be rent but these were not paid alongwith monthly rent-Tenant contend ing that they being a limited company could only make payment thereof after detailed bills and supporting documents received by them from landlord-Bills for electricity and water charges received after irregular intervals from billing authorities and their payment along with monthly rent becoming' impracticable and not possible of per formance-Sharing of payment of such bills only possible after same are received and landlord making available account showing share payable-Held, even though there has been technical default Rent Controller considering circumstances of case, should have exercised discre tion in not ordering eviction of tenant and first appellate Court considering facts had authority to adjudge that exercise of discretion by Rent Controller was wrong and to set aside order of eviction.

Appeal against order of first appellate Court setting aside order of eviction, dismissed by High Court.

Nasrullah A wan for Appellant.

I. M. Patel for Respondent.

Date of hearing: 20th October, 1982.

This second appeal under section 15 of the West Pakistan Urban Rent Restriction Ordinance, 1959 (hereinafter referred to as the Ordinance) has boon tiled against the judgment of the V Additional District Judge, Karachi dated 9-11-1980 in Rent Appeal No. 208 of 1978 allowing the appeal and setting aside the order dated 28th February, 1978 of the Sixth Rent Controller, Karachi evicting the respondents and directing them to handover vacant possession of the demised premises within 30 days of the passing of the Order.

The facts of the case as appear from record are that the appellant who is owner/landlord of flat on plot No. 43/1/D, Block VI, P. E. C. H. S., Karachi rented out the same to the respondent-Company in December, 1973 at monthly rent of Rs. 900 had to pay. According to the appellant there was agreement of tenancy in writing which had since expired whereafter the tenancy was from month to month. It was further case of the appellant that under the agreement rent was payable in advance by the Fifth of every month and electric water pumping charges too had to be shared by the tenant.

On 12th September, 1975, the appellant filed before the Rent Controller application under' section 13 of the Ordinance for ejectment of the respon dents on the grounds as under:-

(1) That they were habitual defaulters in payment of rent and had not paid the same for months of July, August and September, 1975.

(2) That they had defaulted in payment . of water, conservancy and electric water and pumping charges from 1-1-1975 amounting to Rs. 482.45.

(3) That they had materially impaired the value and utility of the build ing demolishing a portion of the back compound wall, causing a loss of Rs. 1,200.

(4) that they were undesirable tenants, being quarrelsome and a nuisance for the appellant.

The rent was being paid by crossed cheques and before the time of filing ejectment application the appellant had [received cheque for Rs. 2,700 towards rent for months of April, May and June, 1975. The cheque was dated 24-5-1975 but was presented for encasement a' the Grindlays Bank Ltd. on 13-9-75 and was returned with endorsement "full cover not received" on 15-9-75 and, therefore, the appellant moved an application for amendment of the. ejectment application for showing default of payment of rent for months of April, May and June, 1975 also. He moved the application for amendment on 20-9-1975 which was allowed without notice to the respondents as they had not yet been served with notice of the original application and incidentally were served with copy of the amended application for the first time.

On 3-12-1975 the respondents filed written statement admitting the tenancy and the rate of rent. They also admitted liability for sharing the water and conservancy charges but denied liability for the electric water pumping charges. They denied having committed default in payment of rent stating that they used to make payment by cheques which they used to issue in favour of the appellant who used to get them encashed sometimes after a number of days together. It was further their stand that appellant never issued any receipt for the rent realised by him despite such demands by them. They had tendered rent amounting to Rs. 2,700 by cheque for months of April, May and June, 1975 on 24-5-1975 which was not acknowledged by the appellant who had even refused to accept money orders sent by them. with the ulterior motive for creating grounds for their ejectment.

With regard to the other charges payable, it was their case that they were not liable for payment of electric pumping charges but as regards water and conservancy charges they had never refused to pay their proper share of the dues after appellant furnished them with detailed bills supported by proper documents which were essential for accounting and auditing purposes as the respondents are a limited company.

They totally denied the allegations with regard to material impairment of the value and utility of the building and also denied allegations with regard to being a nuisance; as false malicious and highly objectionable and defamatory.

On the above pleadings of the parties the Rent Controller settled the following issues

(1) Whether the opponent has committed default within provision under section 13 of the Sind Rent Restriction Ordinance

(2) Whether the opponent has caused damage to the premises in its occupation

(3) Whether the opponent causes nuisance

(4) What should the decree be

He gave his findings only with regard to issue No. 1 ire the affirmative and since there were no cross objections with regard to findings of issues Nos. 2 and 3 only finding with. regard to issue No. 1 has been contested sad argued in the first appeal as well as in the instant appeal.

Eviction of tenant on the ground of default in payment of rent is dealt with in subsection (2) (i) of S. 13 of the Ordinance which reads as under:-

"13(2). A Landlord who seeks to evict his tenant shall apply to the Controller for a direction in that behalf. If the Controller, after giving the tenant a reasonable opportunity of showing cause against the application is satisfied that :--

(i) The tenant has not paid or tendered rent due, by him in respect of the building or rented land, within fifteen days after expiry of the time fixed in the agreement of tenancy with his landlord or in the absence of any such agreement within sixty days from the period for which the rent is payable; . . . the Controller may make an order directing the tenant to put the landlord in possession of the building or rented land and if the Controller is not so satisfied he -shall snake alt order rejecting the application:

Provided that the Controller may give the tenant reasonable time for putting the landlord in possession- of the building or rented land and may extend such time so as not to exceed four months in aggregate:

Explanation.-For the purpose of clause (I);--

(a) where the water charges or electricity charges or both are payable by the tenant to the landlord such charges shall be deemed to be rent.

(b) rent remitted by money order to the landlord or deposited in the office of the Controller having jurisdiction in the area where the build ing or rented land is situated shall be deemed to have been duly tendered."

It is apparent from a perusal of the revision quoted above that default has to be determined differently in case there is an agreement of tenancy fixing the time of payment of rent and when there is no such agreement. The appellant in his application under section 13 of the Ordinance had expressly mentioned that there was agreement of tenancy providing for payment of rent in advance by the fifth day of every calendar month. In fact agreement of tenancy was mentioned as one of the documents relied upon. This assertion of the appellant was totally denied by the respondents in their written statement wherein the plea had been taken that the provisions of the Ordinance applied. The record of the proceedings before the Rent Controller shows that the agreement if any was not produced by the attorney of the appellant who on the contrary stated in his cross-examination that there was agreement of tenancy in writing but the same expired and thereafter the respondent-Company was month to month tenant of the appellant/applicant. Since reliance had been placed on the document to show that rent was payable on advance the same should have been produced especially when there was denial of the fact asserted, by the respondents. It is, therefore, rightly concluded by the Rent Controller and the first appellate Court that in the absence of any such agreement being proved the rent due by the tenant had to be paid within sixty days from the period for which it was payable. Applying test to the period of alleged default which after the amendment of the application was from April to September, 1975 and keeping in mind that the application was presented on 12-9-1975 it is apparent that the rent for the month of April was payable 60 days after the expiry of the month i.e. on 1st July for the month of May on 1st August, and that for the month of June on 1st of September but for the months of July, August and September no default could have been claimed in the application under section 13 of the Ordinance.

Mr. Nasrullah Awan the learned counsel for the appellant has contended teat since the plea that the claim of default in respect of payment of rent for months of July, August and September, 1975 was premature had not been raised before the Rent Controller, the first appellate Court could not have considered it. There can be no doubt about the fact that default in the payment of the rent had been totally denied by the respondents and the learned first appellate authority could look into the fact whether the finding with regard to the default given by the Rent Controller was correctly arrived at.

With regard to the contention that rent was payable in advance before the 5^th day of every month in view of the failure of the appellant to produce the agreement of tenancy and further in view of the admission of his attorney that the agreement of tenancy referred to had expired, on expiry of the agreement if any the tenant became a statutory tenant and in tile matter of payment of rent and the mode of such payment he is governed by the provisions of clause (1) of subsection (2) of section 13 of the Sind Urban rent restriction Ordinance, 1959. Reliance in this respect is placed on the full bench decision of the Supreme Court in Muhammad Yousaf v. Abdullah (P. L. D 1980 S C 298). The view that a tenant's liability to pay rent continues to be governed by the terms of the lease agreement even after the expiry of the lease taken in a judgment of the Lahore High Court in Muhammad Ashraf v. Muhammad Sharif (P. L. D 1971 Lah. 10) was considered by the Supreme Court and was dissented from by majority opinion. It was observed as under:

"as, in our opinion, the rights and liabilities of the appellant, in, the instant case, are governed exclusively by the said Ordinance, the question of the amount of rent due from him has to be determined in accordance with the provisions of clause (1) of subsection (2) of section 13 of the said ordinance. Under this clause, a tenant has to pay the rent due from hire "within fifteen days of the expiry of the time fixed in the agreement of tenancy with his landlord or in the absence of any such agreement, within sixty days from the period for which the rent is payable." The words "the agreement of tenancy" mean an agreement which is in force, and not an agreement which has expired and is dead."

It is, therefore, quite clear that as already observed there could be default only if the rent in respect of any month of tenancy is not paid within sixty days from the period for which it was payable.

In respect of the alleged default in payment of rent for the months of April, May and June, 1975 it was the version of the respondents that the appellant himself never realised the rent regularly and then held over encashment of the cheques collected by him on account of rent, sometimes for a number of days together. According to the respondents in one instance the cheque was not cashed for wore than a couple of months. It is further their case that the appellant never issued receipts, despite demands on behalf of the respondents who are a limited company. They had tendered the sum of Rs. 2,700 by a cheque covering the rent for the months of April, May and June, 1975 which they had enclosed alongwith their letter dated 17th flay, 1975. The appellant failed to acknowledge receipt of the same and did not issue any rent receipt.

It is the case of the respondents that since the appellant had failed to acknowledge receipt of the cheque they had sent money orders which were also refused by him, it is further their case that the appellant was all along with mala fide intent manipulating grounds for litigation. At first the respondents did not suspect his ulterior motives but did so only after they were served with notice of the instant case. It is argued on behalf of the respondents that the cheque was accepted as valid tender and that they had been very regular in the payment of rent. It is emphasised that there is no evidence showing any demands for rent at any time and, therefore, there is no basis for the allegation that they were habitual defaulters. It is further pointed out that although the appellant in the application had made allegations about their habitual defaults and their being undesirable tenants and a nuisance, he had not lead any evidence with regard to these points and although he had in his ejectment application shown the lease agreement and rent receipts as documents relied upon, he had not produced the same. It is, therefore, further contended that the presumption under illustration (g) to section 114 of the Evidence Act, 1872, adverse presumption should be drawn that if he had produced the aforesaid documents, the same would not have supported his case. It is also pointed out that after making the allegations he did not enter the witness-box and give an opportunity to them to cross examine him.

A perusal of the record of the Rent Controller would show that one Ali Jami Nusrat, attorney of the appellant was examined on behalf of the appellant and gave evidence on 8-10-1977. He admitted that he is attorney of the appellant since June, 1977 and had not signed the application for ejectment which had been signed by the appellant himself. He also admitted that he is the son-in-law of the appellant and had married the appellant's daughter in October, 1976. It is, therefore, contended on behalf of the respondents that the attorney could not have known about the facts of the case as the respondent-Company had rented out the premises in question in December, 1973 and even the application for their ejectment was filed long before the attorney was appointed as such. It is, therefore, their case that his evidence is nothing short of hearsay evidence,

Mr. I. M. Patel, the learned counsel for the respondents has pointed out that 'crossed cheque for Rs. 2,700. towards the rent of months of April, May and June was issued when only the rent for month of April was due and the payment for months of May and June was being made in advance. The cheque was despatched by registered post on 24-5-1975, which was a Saturday and since 25th was Sunday, the earliest it could have reached the ' appellant was 26th. On behalf of respondents Mr. Ikramul Haq, their managing director, gave evidence before the Rent Controller, he produced Bank Certificates regarding payment of rent made by him which were Exhs. 6/A, 6/B and 6/C on the record of the Rent Controller to show that the respondent could not be considered as habitual defaulter. He also produced Bank statements showing balance with the Bank. It is the case of the respondents that the appellant did not present the cheque sent to him alongwith their letter dated 24-6-1975, for encashment in the normal course, or even within reasonable time, as he held it over for about 4 months, waiting for au opportunity to catch the respondents on the wrong foot, and just for one day only when the bank balance fell short due to delay in realisation of up-country draft receipts which were already in clearance, the appellant, with mala fide intent to create grounds for the litigation presented the cheque when it was dishonoured by the Bank. It was an unexceptionally long delay for presentation of the cheque for encashment, and, therefore, even if it is considered to be default on their part, it was technical.

On the point of default, the learned first appellate Court considered all the evidence on record and observed that on going through the statement of current accounts Exhs. 6J/1 to 10, it was found that since 26th May, 1975, the respondents had plenty of amount in their balance and it was a strange co-incidence that only on the 15th of September, 1975, the balance was not sufficient to cover the cheque. He, therefore, was of the view, that the respondent had made a faithful and valid tender for rent -by way of cheque for the months of May, June and July, 1975. And it was the appellant who by his conduct neglected to present, the cheque for realising the amount within reasonable time.

He was of the view that the tender of rent was proper and, therefore, there was no wilful default on the part of the respondents.

On the behalf of the appellant it has been contended that in view o explanation (a) to clause 1 of subsection (2) of section 13 of the Ordinance, the water and electricity charges which were payable by the tenant and has not been paid are to be deemed to be rent. It is, therefore, further argued p that undoubtedly there was default in payment of rent in respect of the charges. It may here be stated that in para. 5 of the application for ejectment the appellant had taken the stand that such charges were liable to be paid alongwith the monthly rent. On the other hand it has been the stand of the respondent that they being a limited company, it is essential for them to make payment only after detailed bills and supporting docu ments are received by them from the appellant, It has further been argued by Mr. 1. M. Patel for the respondents, that it is common experience that the very bills for electricity and water are received after irregular interval from billing authorities, therefore, the very contention that these charge' are to be paid alongwith the monthly rent is impractical and not possible of performance: He further pointed out that the sharing of payment of such bills is possible only after the same are received and the landlord makes available the same alongwith account showing the share payable.

In the circumstances, stated even though there has been technical default, the learned Rent Controller considering all the circumstances of the ca should have exercised his discretion in not ordering the eviction of the respondents and the learned 5th Additional District Judge, Karachi, considering all the facts, had, therefore, the authority to adjudge that exercise of the discretion on the part of the learned Rent Controller was wrong and to set aside the order of eviction.

I, therefore, see no weight in this appeal which is accordingly dismissed but under the circumstances there shall be no order as to costs.

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