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First Rent Appeal No. 715 of 1980, decided on z4-5-1984

---S. 3--Sind Rented Premises Ordinance (XVII of 1979), S. 21(1)--Hydrogenated Vegetable Oil Industry (Control and Development) Act (LXV of 1973), Ss. 2(f) & 5--Taking over of company by Government--Effect on rented property--By taking over company by Government, property of which company was tenant, held, would not vest in Government--Federal Government after taking over could only discharge rights and liabilities of tenant and rented property could not be deemed to have vested in it. P L D 1966 Kar. 214 and P L D 1963 Lah. 517 rel.

---S. 14--Bar to fresh ejectment petition--Previous ejectment petition was finally not decided on merits but dismissed for default--Previous petition dismissed on technical ground or for non-prosecution without deciding matter on merits, held, no bar to file fresh application on same ground.

---Ss. 15(2)(ii) & 21(1)--Hydrogenated Vegetable Oil Industry (Control and Development) Act (LXV of 1973), Ss. 2(f) & 5--Default in payment of rent--Responsibility of Government--Tenant admittedly failed to pay rent of property in dispute--Plea of tenant that rent could not be paid as record had been taken over by Government after taken over company--No document was produced to show that record had been taken away by Government--Held, even if record had been taken over by Government, it did not absolve tenant to pay rent to landlord--Held further, even after taking over, Government was bound to discharge obligation under law as a tenant--Default established--Ejectment order of Rent Controller, upheld in circumstances.

---S. 15(2)(iii)(a)--Subletting-Evidence of subletting being contradictory--Subletting not fully established--Ejectment not ordered.

Hassan Jaffar for Appellant.

Mubarak Husain Siddiqui for Respondents.

Dates of hearing: 10th, 11th and 12th April, 1984.

The appellant is tenant of godown situated at W.O.3/20 IIC 82G/l, Nazimuddin Street, Nanakwara, Karachi and the respondents are its co-owners. The respondents filed an ejectment application on 31-10-1977 against the appellant on the ground of default in the payment of rent from July 1973 till the filing of the case, subletting and personal bona fide requirement. The appellant denied all these allegations. The appellant admitted the tenancy by stating that the agreement of tenancy was between the respondent and its previous management. It was further pleaded that the appellant has not committed default in payment of rent. The respondents had filed Rent Case No. 2856/73 which was disposed of on 19-7-1977 by the Controller and therefore, they cannot file the application for ejectment on ground of default in respect of the same period. The learned Controller, granted the application holding that the appellant is a defaulter, and further that the premises has been sublet. The appellant has challenged this order in this appeal. Mr. Hassan Jaffar, the learned counsel for the appellant contended that under the provision of Hydrogenated Vegetable Oil Industry (Control and Development) Act, LXV of 1973, hereinafter referred as 'the Act', the appellant company including its godown, stock and stores have been taken over by the Federal Government, therefore, the Urban Rent Restriction Ordinance is not applicable. In other words the learned counsel has attempted to challenge the jurisdiction of the learned Controller on the ground that as the industry has been taken over by the Government the premises are excluded from the operation of the Rent Restriction Ordinance. At the time when the ejectment case was filed Sind Urban Rent Restriction Ordinance, 1959 was in operation. Thereafter from November, 1979 Sind Rented Premises Ordinance, was enforced. It may be mentioned at the outset that such a plea was not taken in the written statement, and has been raised for the first time in this appeal. However, as the plea requires consideration of purely question of law, I have allowed the learned counsel to argue on this point. The learned counsel has referred to section 2, subsection (f) of the Act which defines the word 'establishment' as any company, firm, concern or enterprise, or any part of undertaking which pertains to the industry and includes any related office, shop, factory, godown, store and stock. The learned counsel, therefore, contended that the godown is an establishment which has been taken over by the Government, therefore, the godown vests in the Government. The learned counsel contended that the disputed property is thus exempted from the operation of the Urban Rent Restriction Ordinance. In this regard reference has been made to section 3 of the Urban Rent Restriction Ordinance under which Notification was issued, whereby buildings and rented lands which vest in the Federal Government and the Provincial Government were exempted from the operation of the Ordinance. The argument of the learned counsel does not seem to be correct. Firstly, the godown is the property of the respondents. Secondly, by taking over the appellant Company, its management and proprietary interest vests in the Government. Under section 5 of the Act the Federal Government may by an order take over the management of any establishment. On such taking over, the management of the company shall vest in the Government. If a company has been taken over then the Government can acquire its shares and proprietary interest. The object of giving word 'Establishment' a wide meaning is to bring under the control of Federal Government all such stores, godowns and shops which are attached with the taken over company. By taking over a company the property, of which such Company is a tenant, will not vest in the Government. The Federal Government after taking over can only discharge the rights and liabilities of a tenant and the rented property cannot be deemed to have vested in it. Reference can be made to PLD 1966 Kar. 214 and P L D 1963 Lah. 517. Therefore under the provisions of Urban Rent Restriction Ordinance no exemption can be claimed. Even under the provision of Sind Rented Premises Ordinance, 1979 the operation of the Ordinance, cannot be said to have been excluded. Section 3 of the Sind Rented Premises Ordinance, 1979 provides that all those premises which are owned or acquired under law by or on behalf of the Central Government or the Provincial Government shall be subject to the provision of the Ordinance, provided that by Notification the Government can exclude any class of the premises or all premises in the area from operation of any provision of the Ordinance. No Notification has been produced to show that such godown has been excluded from the operation of this Ordinance. The next question for consideration is whether the appeelant has committed any default. The learned counsel for the appellant submitted that earlier the respondent had filed an application ejectment which was dismissed on 18-8-1975. The restoration application was also dismissed on 19-7-1977, and thereafter the present application was filed on 31-7-1977 on the basis of default in respect of the period which was included in the previous application as well as upto the date of filing the second ejectment-application. The learned counsel then contended that as the dispute has been decided earlier, in view of section 14 of the Urban Rent Restriction Ordinance, the respondent cannot agitate the same issue again. Mr. Mubarak Hussain Siddiqui, the learned counsel for the respondent has contended that as the previous ejectment application was not finally decided on merit and was dismissed for default, the bar under section 14 is not applicable. Section 14 clearly provides that an application raising substantially the same issue which has been finallyE decided in a former proceeding shall be rejected. This provision contemplates decision on merits. Where the order of dismissal is on technical ground or for non-prosecution, without deciding the matter on merits it cannot be a bar to filing a fresh application on the same ground. Now coming to the question of default, the respondent has stated that from July, 1973 till the date of filing the ejectment application in July, 1977 the rent was not paid. The appellant in their written statement have stated that the Government took over the Company and succeeded to the old management on 2-9-1973,^- and thereafter, the record was taken away by the Government. The witness was unable to show that from July, 1973 onwards the rent has been paid. He, however, stated that deposits were made in earlier rent cases, and that the appellant continued to deposit rent upto December, 1979. He produced a receipt, dated 14-7-1979 depositing Rs.360 which seems to be rent in advance upto December, 1979. In cross-examination he admitted, that for the first time, the appellant deposited the rent on 14-5-1975 for 2 months. Such deposit would have been in the previous rent case after the rent order had been passed. Thereafter, the rent seems to have been deposited by the appellant with the Controller, and the last receipt is upto December, 1979. The learned counsel for the appellant has contended that after the Company was taken over by the Government, rent could not be paid as all the records had been taken away and therefore, there is no wilful default. The default has been claimed from November, 1973 onwards. According to the appellant's own admission no rent upto April, 1975 was paid till 14-5-1975. Thereafter there is no evidence to show that the rent has been paid by the appellant but it seems that the appellant has been depositing the rent. The second ejectment application was filed in July, 1977 but except the statement of the respondent there is nothing on the record to show that he has regularly deposited the rent. By producing Exh. 13 which is rent receipt for July to December, 1979 the appellant wants to draw the presumption that all previous rents have been paid. Even if for argument sake this is accepted the question remains whether default has been committede from July, 1973 or April, 1975 when the appellant started depositing rent. The admitted position is that from July 1973 to October, 1973 no rent has been paid. The only defence seems to be that record had been taken away by the Government, and therefore it was not possible to pay the rent. No document has been produced to show that the records had been taken away and whether any person was appointed to

run the business of the appellant-Company. It is not the case of the

appellant that the company has been closed. Even if the record had

been taken away by the Government it did not absolve the appellant to

pay the rent to the respondents. Even after taking over the Government

was bound to discharge the obligation under the law as a tenant. No

other facts have been brought on record on the basis of which the

Controller could have exercised discretion in favour of the appellant.

In view of these facts the default is established and the conclusion of the Controller is correct.

The second ground on which the learned Controller has granted the ejectment application is that the appellant has sublet the premises to Sarmast Company. The learned Controller has considered the evidence of the appellant which is contradictory with regard to possession of Sarmast Company. From this evidence it is not fully established that the appellant has sublet the premises. On this ground no ejectment can be ordered. In the result the appeal is dismissed.

H.B.T. Eviction maintained.