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First Rent Appeal No. 572 of 1984, decided on 4th September, 1986

‑‑‑Ss. 2(1) & 13(1)‑‑Word "tenant", connotation of‑‑Contractual tenancy‑‑Effect on termination‑‑Tenant by contract, held, would continue to be tenant after determination of contractual tenancy until evicted therefrom in accordance with law‑‑Contractual tenancy would be extended by operation of law and would adopt form of statutory tenancy.

Abdur Rehman v. Haji Mir Ahmed Khan and another P L D 1983 S C 21; Abdul Wasey Jamil and another v. Mrs. Nasreen Tafazal 1974 C L C 1031; Syed Shafiuddin v. Abdul Hakim Khan P L D 1978 Kar. 149 and Hafiz Dawood v . Abdul Ali Khan 1973 S C M R 598 ref.

‑‑‑S. 13(2)(1)‑‑Ejectment tenant‑‑Default in payment of rent when operative‑‑Default in payment of rent, held, would become operative on expiry of sixty days from period of which rent was payable.

‑‑Ss. 10, 15(2)(ii) & 21(1)‑‑Default in payment of rent‑‑Proof‑‑On expiry of contractual tenancy between landlord and tenant, terms and conditions of tenancy converted into statutory tenancy, held, would be regulated by relevant rent law and not by terms an conditions incorporated in expired tenancy agreement‑‑Default in payment of rent by statutory tenant would become operative only on expiry of permissible period of 60 days from period for which same was due in circumstances.

Alf Din v. Khadim Hussain 1980 S C M R 767; Muhammad Yousuf v. Abdullah P L D 1980 S C 298; Muhammad Ashraf v. Muhammad Sharif and 3 others P L D 1971 Lah. 610; Mrs. Alima Ahmed v. Amir r Ali P L D 1984 S C 32 and Sheikh Abdul Sattar v. Malik Muhammad Afzal and others P L D 1985 S C 148 ref.

‑‑‑Ss. 15 & 21‑‑Appellate jurisdiction, exercise of‑‑Where no case of wilful default in payment of rent was established against tenant, High Court in exercise of appellate jurisdiction set aside order of ejectment passed by Rent Controller against tenant.

Mansoorul Arfeen for Appellant.

Habibur Rehman for Respondent.

Date of hearing: 13th February, 1986, 16th March, 1986 and 4th May of 1986.

This appeal under section 21 of the Sind Rented Premises Ordinance, 1979 is directed against the order of ejectment dated 30‑4‑1984 passed by the learned Xth Senior Civil Judge/ Controller, Karachi in R.C. No. 4952/79.

The appellant Muhammad Yousuf is a tenant of the respondent Mohammad Saghiruddin Qureshi on the Ground Floor of a double‑storeyed building bearing No. 16‑L/2, P.E.C.H.S., Karachi. The tenancy was established by a written agreement dated 1‑12‑1973. The rent of the rented premises was settled at Rs.400 per month exclusive of water and conservancy charges. It was subsequently increased to Rs.450 per month. The respondent filed R.C. No. 4952/79 on 30‑10‑1979 for ejectment of the appellant on the ground that he had not paid/tendered rent for the months of August, September and October, 1979, and, secondly, that he had been a source of nuisance to the applicant and it his family members and also to the neighbour by picking up petty quarrels, and, thirdly, that he had damaged the premises; and, fourthly, that he (the respondent) bona friendly needed the rented premises for his own use. The appellant resisted the ejectment application, denying all the allegations. He contended that the respondent /landlord declined a to accept the rent which was first offered to him and later remitted to him by money orders. He alleged that his ejectment was sought mala fidely as he had not succumbed to the pressure of the respondent/landlord for enhancing the rent. The parties filed their affidavits in evidence. The appellant filed, alongwith his affidavit, number of documents. The learned Controller passed the impugned order of ejectment dated 30‑4‑1984 only on the ground of default in payment of rent, while rejecting the other grounds as not proved.

The impugned order of ejectment rests on the sole ground of default in payment of rent for the months of August, September and October, 1979. Undisputedly, the rent for the aforesaid three months had remained unpaid till the ejectment application was filed on 30‑10‑1979. The contention of the appellant is that he had offered to the respondent rent for the month of August, 1979 but the respondent refused to accept it unless the rent was increased and it was thereafter remitted by money order on 24‑10‑1979 but it was not accepted. His further contention is that the rent for the aforesaid three months was remitted by money orders for each month separately on 29‑11‑1979 but remittances were not accepted and the rent was, therefore, deposited with the Controller on 9‑12‑1979 after obtaining his permission vide his order dated 6‑12‑1979 in Miscellaneous Rent Application Case. The learned Counsel for the appellant has urged that the appellant had become statutory tenant on the expiry of the contractual tenancy for eleven months; and after refusal by the respondent to accept the rent, the appellant had tendered rent by money order remittances within the statutory period of 60 days and there was no default on his part in payment of rent. He relying upon the provisions of section 10 of the Sind Rented Premises Ordinance, 1979 advanced the argument that the rent for the month of August, 1979 was payable by the 10th of the month of September, 1979 and the period of 60 days envisaged under clause 2 of subsection (2) of section 15 of the said Ordinance counted from 11th of September, 1979 had not expired by the time the ejectment application was filed on 30‑10‑1979. According to him, the ejectment application was premature and was liable to be dismissed. On the other hand, the learned Counsel for the respondent had contended that although the tenure of the tenancy under the written agreement was 11 months, yet the continuance of the tenancy beyond that period was deemed to be tenancy on the same terms and conditions as incorporated in the tenancy agreement and the default in payment of rent is to be considered in that context. He has urged that according to the terms Yousuf v. Muhammad (Ally Madad Shah and conditions of the tenancy, as put in writing, the monthly rent was to be paid in advance on the Ist of the tenancy month and the default in payment of rent started on the expiry of 15 days allowed under clause of subsection (2) of section 13 of the Sind Urban Rent Restriction Ordinance, 1959, where under the rent case was filed and, therefore, there was clear default in payment of rent for the months of August, September and October, 1979 and the appellant had thereby made himself liable to ejectment. He had refuted the argument by the learned Counsel for the appellant that the' provisions of section 10 of the Sind Rented Premises Ordinance are attracted in the case by advancing the argument that the rent case was filed under the then existing law viz. the Sind Urban Rent Restriction Ordinance, 1959 and provisions of that law were applicable to the proceedings of the case. In this respect, he has relied upon the cases Abdur Rehman v. Haji Mir Ahmed Khan and another P L D 1983 S C 21 and Abdul Wasey Jamil and another v. Mrs. Nasreen Tafazal 1974 C L C 1031. He has further contended that the rent due was not tendered to the respondent by money order remittances or in any other manner and deposit of rent with the Controller after default had been committed did not save the appellant from the order of ejectment. According to him, the documents relied upon in respect of tender of rent viz. money order coupons and postal receipts have not been proved. He has relied upon the cases Syed Shafiuddin v. Abdul Hakim P L D 1978 Kar. 149 and Hafiz Dawood v. Abdul Ali Khan 1973 S C M R 598.

The tenancy between the parties was established by a written agreement, dated 1st December, 1973 put in evidence as Exh. 2/1. The contents thereof bear out that the tenancy was established initially for a period of eleven months commencing from 1st December, 1973 on terms and conditions set out therein. Another clause in the tenancy agreement was "that after the expiry of this lease it will be the option of the lessee to extend the lease for a further period on monthly rental basis". As regards the mode of payment of rent, it was covenanted that the lessee (tenant) had to "pay the monthly advance rent on the lst of each following English calendar month". It is an admitted position that the tenancy was continued after the expiry of contractual period of tenancy for eleven months and the only variation subsequently brought in the terms of the tenancy was that of increase in the rate of rent from Rs.400 to 450 per month and this variation seems to have been done orally. The law at the relevant time regulating the relationship between the tenants and the landlords was "the Sind Urban Rent Restriction Ordinance, 1959 (Since repealed and hereinafter mentioned as the said Ordinance). By virtue of definition of the term "tenant" contained in clause (i) of section 2 and the provisions of subsection (1) of section 13 of the said Ordinance, a tenant by contract continues to be a tenant after determination of contractual tenancy until evicted from rented premises in accordance with law and the contractual tenancy is extended by operation of law and it adopts the form of statutory tenancy. It follows that the contractual tenancy extinguished by efflux of specified time stood transformed into statutory tenancy. Accordingly, the contractual tenancy established between the appellant and the respondent terminated on the expiry of eleven months from 1st December, 1979 and statutory tenancy came into being by operation of law. It was provided under clause 1 of subsection (2) of section 13 of the said Ordinance that the landlord could seek ejectment of a tenant who did E not pay or tender rent due from him in respect of the rented premises within 15 days after the expiry of the rime fixed in the agreement of tenancy with his landlord, or, in the absence of any such agreement, not I within 60 days from the period for which the rent was payable. Applying of the provisions of clause 1 of subsection (2) of section 13 of the said good Ordinance, referred to above, to the instant case, the default in payment from of rent became operative on the expiry of 60 days from the period for held which the rent was payable. However, a question has arisen as to when the monthly rent had become due. According to the learned Counsel for the appellant, the rent became payable after the expiry of the calendar month for which the rent was to be paid, whereas the contention writ of the learned Counsel for the respondent is that the monthly rent was mus, to be paid in advance as was stipulated in the agreement of tenancy. The question of terms and conditions of statutory tenancy coming into operation on the termination of contractual tenancy was considered by the Supreme Court in the following three cases referred to by the risk learned Counsel for the parties.

Alf Din v. Khadim Hussain 1980 S C M R 767, Muhammad Yousuf of v. Abdullah P L D 1980 S C 298 and Mrs. Alima Ahmed v. Amir Ali Exh PLD 1984 S C 32.

In the case at serial No. 1 viz. Alf Din v. Khadim Hussain decided by a Bench of two learned Judges on 2nd April, 1980 the view adopted by‑‑a Division Bench of the Lahore High Court in a case Muhammad Ashraf v. Muhammad Sharif and 3 others P L D 1971 Lah. 610 that a tenant continuing in possession after the termination of the lease must be held to be governed by the same terms and conditions as were applicable to him under the agreement of tenancy which had terminated was approved with the following observations:

"The learned Counsel had no instance to the argument that if there was no agreement in existence between the parties how could he contend that the rate of rent remained the same, as that contained in the original agreement but that only the mode of payment was no longer operative. Other anomalies would also arise if this interpretation was accepted. It is to avoid all such anomalies and the absurdities that the rule has been laid down in the case of Muhammad Ashraf v. Muhammad Sharif and others that all the terms continue when a tenant continues to remain in occupation of the property in spite of the termination of the tenancy by efflux of time. We, therefore, consider that no modification in the rule laid down therein is called for."

In the second case cited as Muhammad Yousuf v. Abdullah, decided by four learned Judges, on 30th August, 1980, the view taken in the aforesaid case Muhammad Ashraf v. Muhammad Sharif P L D 1971 Lah. 610 was not approved of and their Lordships made following observations:

"The respondent's case, however, is supported by a judgment of the Lahore High Court in Muhammad Ashraf v. Muhammad Sharif and Mr. Rahimtoola relied on it, because the view taken by the Court was 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. And in dismissing the tenant's appeal, on facts almost identical to those in the instant case, the Court observed at page 614 that the said Ordinance:

"Itself does not specify the terms and conditions on which such a tenant shall continue in possession; and, therefore, we must of necessity presume that the intention of the law is that he shall continue on the old terms and conditions. By according statutory recognition to the position of a tenant who continue in possession of the demised property after termination of the lease, the statute does not seek to introduce new terms and conditions of tenancy except continuing it beyond the stipulated period."

We pointed out that the provisions of the said Ordinance are of an overriding nature, and they regulate in considerable detail the rights and liabilities of lessors and lessees. Therefore, in our humble opinion, the proposition that the said Ordinance "does not seek to introduce new terms and conditions of tenancy except continuing it beyond the stipulated period", is much too wide. There may be lease agreements which are not inconsistent with the provisions of the said Ordinance, but such cases would be the exception rather than the rule. Therefore, with the utmost respect, for the reasons, which we have given, we are unable to agree with the view taken by the Lahore High Court in Muhammad Ashraf's case."

In the case at serial No. 3, Mrs. Alima Ahmed v. Amir Ali, leave to appeal was granted to the landlord to examine whether the tenant continuing in possession of the demised premises after the expiry of the written agreement of tenancy was not controlled Stricto Sensu by the terms of the agreement particularly with regard to the payment of rent by a particular date and whether Controller's discretion not to eject a tenant on his being found in default as to be based on recognised equitable principles. The appeal was decided by five learned Judges. Both the cases namely Alf Din v. Khadim Hussain 1980 S C M R 767 and Muhammad Yousuf v. Abdullah P L D 1980 S C 298, mentioned above, were referred to in that case. Their Lordships made following observations on the question of default in payment of rent in the circumstances of the case:

"The appellant alleged non‑payment, default and neglect on the part of the respondent to pay monthly rent from April, 1970 to February, 1971. The respondent in his written statement admitted payment of rent from April, 1970 to September, 1970 by cheque, dated 20‑8‑1970 for the rent of October, 1970 to March, 1971. On this admission itself and even after allowing him the benefit of law laid down in Muhammad Yousuf's case, the tenant was clearly in default for April and May, 1970 and October to December, 1970."

As stated above, the case Alf Din v. Khadim Hussain 1980 SCMR 767 was decided by two Judges on 2nd April, 1980, and the case Muhammad Yousuf v. Abdullah P L D 1980 S C 298 was decided by four Judges on 30th August, 1980 i.e. subsequent to the decision in Alf Din's case. The law laid down in the latter case was referred to in considering default in payment of rent by the tenant in the case Mrs. Alima Ahmed v. Amir Ali P L D 1984 S C 32. Similar question of payment of rent under statutory tenancy following contractual tenancy was considered also in the case Sheikh Abdul Sattar v. Malik Muhammad Afzal and others, reported in P L D 1985 S C 148 and the view adopted in the case Muhammad Yousuf v. Abdullah P L D 1980 S C 298 was endorsed. The consensus of the view propounded in the aforesaid cases, therefore, is that the terms and conditions of the statutory tenancy following the extinguished contractual tenancy are regulated by the relevant Law. Accordingly, the contentions of the parties in the instant case are to be considered in that perspective. The ejectment in the instant case has been sought on the ground of default in payment of rent for the months of August, September and October, 1979. The statutory tenancy between the parties was on monthly basis. The rent for the months of August, September and October, 1979 became due on the expiry of each month. Thus the rent for the month of August. 1979 fell due on 1st of September, 1979 and the period of sixty days expired on 30th of October, 1979, while the rent due for the month of September had not reached the stage of default, and the rent for the month of October, 1979, had not even become due by the time the ejectment case was filed on 30th October, 1979. The appellant's case is that the rent for the month of August, 1979 was offered to the respondent in time but he had declined to accept it and it was remitted to him by money order, on 24‑10‑1979 but he did not accept it. The learned counsel for the appellant has urged that the rent was tendered within permissible time limit of 60 days from the day it had become due in accordance with the law and no default was committed. He has referred to money order coupons and M.O. remittance fee receipt, Exh. As regards rent for the months of September and October, 1979, his contention is that rent for those months and also for the months of August, 1979 was remitted by separate money orders, on 29‑11‑1979 but it was not accepted. He has made reference to photostat copies of money order coupons Exhs. 0 2(iv), 0 2(v), 0 2(vi) and 0 2(vii), remittance commission receipts Exhs. 0 1(iv), 0 1(v), 0 1(vi) and 0 1(vii). Original documents have not been put in evidence. The photostat copies filed alongwith affidavit of the appellant, referred to above, are hardly decipherable. The dates and the postal stamps thereon are confusing. However, it follows from the facts discussed above that there was hardly any wilful default in payment of rent as the period of sixty days allowed by law for payment of rent for the month of August, 1979 was to expire on 30th October, 1979, when the ejectment case was filed and payment of rent for the month of September, 1979 was within the range of permissible period of sixty days, and the rent for the month of October, 1979 had not become due. In the circumstances, no case of wilful default in payment of rent stands established against the appellant. Accordingly, the appeal is allowed and the impugned order of the Controller, dated 30‑4‑1984 is set aside. Since the matter involved, legal questions, the parties are to bear their own costs.

H . B . T . Appeal allowed.

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