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First-Rent Appeal No. 377 of 1984, decided on 3rd May, 1987.

(a) Sind Rented Premises Ordinance (XVII of 1979)‑‑

‑‑‑Ss. 8(1) & 9(2)‑‑Fair rent‑‑Determination‑‑Fair rent of premises for the first time is to be determined under S. 8(1) after taking into consideration factors as enumerated therein, whereas increase in rent after such determination is to be governed by S. 9 of the Ordinance‑ Two sections of a statute being quite independent cannot be read together for purposes of determining of fair rent‑‑Rent of premises in dispute having been fixed by Rent Controller for the first time taking into consideration conditions enumerated in S. 8(1), contention that in view of S. 9(2), fair rent could not exceed ten per cent per annum of existing rent, was untenable as rent was fixed for the first time and not increased after earlier fixation.

Muhammad Jamil v. Muhammad Rahim 198' CLC 176 ref.

(b) Sind Rented Premises Ordinance (XVII of 1979)‑‑

‑‑S. 8‑‑Fair rent‑‑Determination‑‑Fair rent of premises determined by Rent Controller after taking into consideration rent of similar premises situated in similar circumstances within same locality in accordance with provisions of S. 8(1)(9)‑‑Contention of tenant that Rent Controller could not determine rent unless all four conditions or factors as enumerated in S. 8(1) co‑exist, held, was fallacious and unsustainable as all four clauses of S. 8(1) were disjunctive of each other.

(c) Sind Rented Premises Ordinance (XVII of 1979)‑‑

‑‑‑Ss. 8(1)(c) & 21(1)‑‑Fair rent‑‑Taxes of property whether to be included in fair rent‑‑Landlord neither pleaded nor proved that any new taxes had been imposed after commencement of tenancy and Rent Controller also not giving any reason whatsoever for allowing additional ten per cent of taxes in excess of fair rent of premises‑‑Order of Rent Controller allowing such taxes above fair rent, held, was bad in law and could not be sustained.

Akhtar Ali Mahmud for Appellant. Rehanul Hassan Farooqui for Respondent. Date of hearing: 19th April, 1987.

This appeal under section 21 of the Sind Rented Premises Ordinance, 1979 (hereinafter called the Ordinance) is directed against the order of the learned IX Senior Civil Judge/ASJ/Rent Controller, Karachi, dated 25‑2‑1984 passed in Rent Case No.827/81 whereby she has determined the fair rent of the disputed premises at Rs.175 per month plus 10 per cent of the KMC taxes and has directed the appellant to pay the difference of rent with effect from 18‑2‑1981 at the above mentioned rate after deducting Ra.70 per month already paid by him within sixty days of the order.

2. The appellant is tenant of the respondent in respect of Shop No.40 situated in Chand Cloth Market, Liaquatabad, Karachi, on a monthly rent of Rs.70 with effect from 1‑1‑1975.

On 16‑2‑1981 the respondent made an application under section 8 of the Ordinance praying that the rent of the aforesaid shop be determined at Rs.200 plus 13 per cent of taxes of KMC water, conservancy and fire brigades per shop in appreciation of the fact that the rent of similar shops situated in similar circumstances within Chand Cloth Market was Rs.150 per month per shop, that the cost of construction and repairs charges had increased more than 15 times as compared to the construction and repairs of 1975 and that the taxes and valuation had increased very much since 1975. The appellant denied the correctness of the averments made in the application and stated that he had not deliberately disclosed the gross rental value assessed by the Excise & Taxation Department and that no cause of action had accrued to the respondent.

4. The learned Rent Controller, however, by the impugned order allowed the application as stated above.

5. Mr. Akhtar Ali Mahmud, learned counsel for the appellant, contended that sections 8 and 9 of the Ordinance are to be read together as they are explanatory to each other. He thus sought to urge that in view of subsection (2) of section 9 of the Ordinance the fair rent could not exceed 10 per cent per annum of the existing rent. His next contention was that subsection (1) of section 8 enumerates four factors upon the consideration whereof the Rent Controller has to determine the fair rent but in the instant case he has failed to give consideration to those factors and consequently the impugned order is bad in law. He also submitted that the issue No.l as framed by the learned Rent Controller was wholly improper inasmuch there was no dispute between the parties with regard to the jurisdiction of the Rent Controller to determine the fair rent of the demised premises.

6. The learned counsel for the appellant also urged that all the four factors mentioned in sub‑section (1) of section 8 Should co‑exist and be considered by the Rent Controller while determining the fair rent. According to him, no evidence was available on record to attract clause (a) of subsection(1) of section 8 which contemplates that the rent of similar premises situated in similar circumstances, in the same or adjoining locality is to be taken into consideration. He further submitted that no construction or repairs was done of the demised premises and hence clause (b) was not attracted to the facts of the instant case. Likewise it was neither pleaded nor proved by the respondent that any new taxes were imposed on the demised premises after commencement of the tenancy. The counsel then contended that the counter‑foils of the receipts Ex.A/1 to A/4 were not signed by any body and hence these were wrongly brought on record and taken into consideration by the learned Rent Controller. This fact, the counsel so contended, was admitted by the respondent in his cross‑examination. The counsel further urged that even otherwise shop No.7 which is stated to have been let out on a monthly rent of Rs.150 was not covered by the expression "similar premises situated in similar circumstances" as used in subsection (1) (a) of the Ordinance. Lastly, the counsel vehemently urged that the impugned order is capricious and arbitrary and that the assessment of Excise & Taxation Department has for no valid reasons, been omitted from consideration.

7. Mr. Rehanul Hasan Farooqi, learned counsel for the respondent, submitted that section 8 is quite independent of section 9 and the two cannot be read together for the purposes of determining of fair rent. In support of his contention the learned counsel for the ' respondent placed reliace on the following cases of this court:

(1) Muhammad Jamil v. Muhammad Rahim reported in 1987 CLC 176.

In this case Saeeduzzaman Siddiqi, J. held:

It is quite clear from the language of section 8 (2) of the Ordinance. Section 9 of the Ordinance that the determination of fair rent in the circumstances mentioned in this subsection is uncontrolled by the provision of section 9 of the Ordinance. Section 9 of the Ordinance which comes after section 8 of the Ordinance begins as follows: ---

"Where the fair rent of any premises has been fixed .......

It is, therefore, quite clear that section 9 is applicable only where fair rent of any premises has already been fixed by the Controller. It is also clear that fair rent when once fixed cannot be further increased except as provided in section.

9. It is settled rule of interpretation that ordinarily the proviso or subsection should be governed by the operative portion of the section. A subsection will, therefore, ordinarily embrace the field which is covered by the main provision. There is nothing in the language of subsection (2) of section 9 of the Ordinance, to suggest that it was intended to deal with the subject‑matter outside the scope of main enacting part. There is equally no indication in the language of this subsection to justify the inference that although it is enacted as a subsection of section 9, but. it should be read as an independent provision applicable to rest of the Ordinance. The expression "in any case" in section 9 (2) in my humble opinion did not apply to fixation of fair rent tinder section 8 of the Ordinance. The increase in rent referred to in subsection (2) of section 9 has reference only to cases where fair rent has already been fixed by the Rent Controller and the landlord again applied for increase of such fair rent. It cannot be overlooked that the rental value of many premises let out some 15 to 20 years ago have become highly disproportionate to the existing rental value of these premises. The legislature was aware of this situation while enacting Ordinance XVII of 1979. It is, therefore, quite clear that in order to give relief against such disparities in the rental values of premises, the Rent Controller were authorised to fix fair rent of premises in accordance with the existing rent of the premises situated in similar circumstances in the same or adjoining localities. The rise in the cost of construction, imposition of new taxes and annual values of the premises assessed by the property tax. If the argument of the learned counsel for the respondent is accepted, then in spite of the fact that on consideration of the circumstances mentioned in sub‑clauses (a) to (d) of subsection (1) of section 8 of the Ordinance, the Controller may reach the conclusion in a given case that the "fair rent" should be fixed three or four times of the existing rent but he will not be able to do so. This clearly could not be the object of legislature. I, therefore, find no substance in the submission of the learned counsel for the appellant that the fair rent to be fixed by the Rent Controller under section 8 could not in any case exceed 10 of the existing rent."

(2) Abdul Ghafoor v. The Hasni Academy (F.R.A. No.361 of 83) an unreported decision in which Salim Akhtar J, held as under:

".. As section 9 has not been made applicable to increase in the existing fair rent under Section 8 (2), it cannot be applied to proceeding under section 8 (1) which is only for determination of fair rent. Section 9 provides that if fair rent has been fixed no further increase shall be made within a period of three years. However, this provision is not applicable to cases which are covered by section 8 subsection (2) where in given circumstances increase is permissible even within a period of three years. Section 9 comes into play after the fair rent has been determined. The first limitation is that no increase can be made for three year, from the date of fixation of fair rent. The second limitation is that in no case the increase in the existing rent shall exceed 10 per annum. Sections 8 and 9 therefore cover two different areas and spheres. Section 8 provides for fixation of fair rent while section 9 governs he increase in the existing rent which is not covered by section 8 (2). In my view the limitation provided under Section 9 (2) does not control the power of Controller to fix the fair rent."

8. The learned counsel for the respondent then contended that the respondent has satisfied the requirements of clause (a) of subsection (1) of section 8 of the Ordinance and hence the determination of fair rent by the Rent controller at Rs.175 plus 10 per cent of KMC taxes is justified. Referring to clause (b) of section 8 (1) the learned counsel further submitted that the law does not say that the construction or repairs are actually to be carried out in order to attract the said clause. According to him, all the four factors given subsection (1) of section 8 of the Ordinance need not co‑exist so to make these provisions applicable. In his submission all the four clauses are disjunctive of each other and may be co‑herent but not in- herent. The counsel then submitted that no objection was taken to the admission of the counter‑foils of the receipts Ex.A/1 to A/5 nor was any evidence adduced in rebuttal. Their genuineness was not even doubted during the cross‑examination of the respondent.

9. I have given due consideration to the submissions made by the learned counsel for the parties. Before proceeding further I deem it proper to reproduce both the said two sections. ‑They read as under:‑

"8. Fair rent.‑‑(1) The Controller shall, on application by the tenant or landlord determine fair rent of the premises after taking into consideration the following factors:‑

(a) the rent of similar premises situated in the similar circumstances, in the same or adjoining locality;

(b) the rise in cost of construction and repair charges;

(c) the imposition of new taxes, if any, after commencement of the tenancy; and

(d) the annual value of the premises, if any on which property tax is levied.

(2) where any addition to, or improvement in any premises has been made or any tax or other public charge has been levied, enhanced, reduced or withdrawn in respect thereof, or any fixtures such as lifts or electric or other fittings have been provided thereon subsequent to the determination of the fair rent of such premises, the fair rent shall, notwithstanding the provisions of the section 9 be determined or, as the case may be, revised after taking such changes into consideration.

9. Limit of Fair Rent.‑‑(1) Where the fair rent or any premises has been fixed no further increase thereof shall be effected unless a period of three years has elapsed from the date of such fixation or commencement of this Ordinance whichever is later.

(2) The increase in rent shall not in any case, exceed ten per cent per annum of the existing rent."

10. A bare reading of the above reproduced two sections makes it absolutely clear that section 8 (1) of the Ordinance envisages the determination of fair rent for the first time after taking into consideration the factors as enumerated therein. Subsection (2) of section 8 further provides that if after determination of fair rent, any one or more of the events or changes as enlisted therein take place then the Rent Controller shall determine or revise the fair rent after taking such changes into consideration irrespective of the limits provided for in section 9 of the Ordinance. But once the fair rent is determined under either of subsection (1) or (2) of section 8 and thereafter any further increase therein is desired then recourse will have to be made to section 9 of the Ordinance. Section 8 of the Ordinance entitles both the tenant as well as the landlord to get the fixing of fair rent done by the Rent Controller, whereas section 9, on the one hand, forbids the landlord to effect any increase in rent where the fair rent of any premises has been fixed, for a period of three years from the date of fixing or revision of fair Rent by the Rent Controller or if no fair rent has been determined then the existing rent could not be increased for a period of three years from the commencement of the Ordinance; whereas, on the other hand, it also confers a right in the landlord to the increase of rent but with a clog that the increase in rent shall not in any case, exceed ten percent per annum on the existing rent. The legislature has thus provided that once fair rent of any premises is determined or revised either under subsection (1) or (2) of section 8 then no further increase in rent shall be effected before the expiry of three years from the date of such fixation and that too would not exceed the limit as provided in subsection (2) of section 9 ibid.

11. Following the abovenoted two decisions of this Court as well as for the reasons recorded hereinabove I have no hesitation to hold that the contention of the learned counsel for the appellant that in A view of subsection (2) of section 9 of the Ordinance the fair rent could not exceed ten per cent per annum of the existing rent is untenable.