P L D 1967 Lahore 29 (PLP)

S. A. MAHMOOD, J.‑This is a second appeal from the order of the Additional District Judge, Lahore, as appellate authority, dated the 4th of February 1964, by which he set aside the order of the Rent Controller, dismissing the application made by Mst. Khadeja Hakeem against Mian Rehmat Ali, appellant, for his ejectment from House No. 44, Warris Road, on the ground of default in payment of rent. 2. The facts are these: Mian Rehmat Ali, appellant and Mst. Khadeja Hakeem resided in two separate portions of House No. 44, Warris Road, Lahore, and sought its transfer under the Displaced Persons (Compensation and Rehabilitation) Act, 1958. The appellant occupied 2/5th portion of the house; the respondent occupied the rest of the house. On the 6th of November 1959, a P. T..O. was issued in favour of the respondent, who sent a notice by registered post, acknowledgment due, on the 26th of March 1960, to the appellant intimating to him that the whole house had been transferred to her by the Settlement Department w. e. f. 6th November 1959 and calling upon him to pay her rent of his portion of the house in advance at Rs. 125 p.m. The appellant sent her reply (Exh. P. 3) on the 10th of April 1960, stating that he had paid rent of his portion of the house to the Settlement Department up to the 31st of March 1960, that he had asked the Department to assess the rent of the portion in his possession, and rent would be paid to her w. e. f. 1st April 1960, or receipt of the decision of the Deputy Settlement Commissioner, Lahore. The Deputy Settlement Commissioner wrote (Exh. P. 5) to the appellant on the 3rd of May 1960, that as the house had been transferred to Mst. Khadeja Hakeem, the should pay rent to her of the portion occupied by him w. e. f. the 6th November 1959, and if he had paid rent for any period after the 6th of November 1959, to the Department, he should get it refunded, and pay it to her. She served him with another notice (Exh. P. 1) on the 2nd of May 1960, demanding future rent, enhanced by 50 %, as authorised by a press statement issued by the Chief Settlement Commissioner. 3. The appellant sent her a cheque on the 8th of June 1960, for Rs. 240, as rent for the period from the 1st of April 1960, to the 30th of June 1960, at the rate of Rs. 80 p.m. She refused to accept this cheque on the ground that the rent remitted did not cover the whole period from the 6th of November 1959, the date of transfer of the house to her. The appellant sent her a money order on the 4.th of July 1960, for Rs. 320, as rent from the 1st of April 1960, to the 31st of July 1960, which she also refused to accept for the same reason. , 4. On the 9th of January 1961, she filed an application under section 13 of the West Pakistan Urban Rent Restriction Ordinance VI of 1959 for ejectment of‑ the appellant on the ground that he had defaulted in payment of rent ‑ from the 6th of November 1959 to the 6th of January 1961 at the rate of Rs. 100 p.m. The parties agreed before the Rent Controller that the appellant was in possession of 2/5th of the house. Her application was summarily dismissed by the Rent Controller for the reason that the notice served by her on the appellant was invalid for demanding excessive rent, i.e. rent which was not permitted by, section 30 of the Displaced Persons (Compensation and Rehabilitation) Act 1958. The respondent successfully appealed to the appellate authority, which set aside the order of dismissal for not having framed any issues, and remanded the cases for fresh decision. The Rent Controller framed four issues, and again dismissed the application on the same ground, namely, that the notice was invalid. The respondent again appealed and the appellate authority held the notice to be valid, following a decision of Daud Khan, J. in S. A. O. 142 of 1961 Ghulam Hussain v. Mst. Sardar Begum that demand of excessive rent in a notice of demand did not invalidate it, and remanded the case back to the Rent Controller for decision of the remaining three issues on merits. Out of the four issues framed by the Rent Controller, the only issues relevant for the purpose of this appeal and in contest between the parties are issues Nos. 1 and 2, namely: "(1) Whether the petitioner has complied with the provisions of section 30 of the Displaced Persons (Compensation and Rehabilitation) Act of 1958 and has this Court jurisdiction to entertain the petition? (2) If issue No. I is proved, what rent is payable by the respondent in respect of the premises in his occupation and has he made a default in payment of such rent?" 5. In view of the finding of the appellate authority the Rent Controller decided issue No. 1 against the appellant herein Regarding issue No. 2, he held that the appellant sent a cheque (Exh. R/2) for Rs. 240 for 3 months from 1st April 1960, and money order (coupon Exh. R/4) for Rs. 320 for 4 months for the period "from the 1st of April 1960, to the 31st of July 1960, and as acceptance of both was refused by the respondent, the appellant herein was not bound to continue to tender further rent to the respondent, and his failure to pay rent to the respondent from 6th November 1959, to the 31st of March 1960, was a mere technical default. since he had deposited rent with the Settlement Department for this period. Only the rent for March 1960, was paid to the Department after receipt of notice of transfer. He condoned the default, and dismissed the application. 6. On appeal, the Appellate Authority found no justification for the appellant to pay rent for the month of March 1960, to the Department, when he had received a notice of. Demand from the respondent. Under the provisions of the Displaced Persons (Compensation and Rehabilitation) Act, 1958, a transferee was entitled to receive rent from the date of issue of P. T. O. but in spite of demand of rent by her from the 6th of November 1959, the appellant herein had not tendered rent to her for the period upto the 31st of March 1960, though he was bound to pay it to her under the law. The payment of rent to the Department did not excuse him from tendering rent to her, as he could have got a refund of the rent from the Department. The refusal of the respondent to accept the cheque and the money order was justified as rent for the whole period was not tendered to her by the appellant herein The appellate authority also disagreed with the view of the Rent Controller that the appellant was not bound to continue to tender rent to her because of her refusal to accept the cheque and the money order, because in its view the tender was not of the full amount ‑ due from him, and, this being the case, the two cases relied upon by the Rent Controller Shrikishanlal and others v. Ramnath Jankiprasad Ahir and others (A I R 1944 Nag. 229) and Ram Krishna Prasad v. Muhammad Yahya (A I R 1960 All. 482) were of no help to him. The appellant had thus defaulted in payment of rent at the rate of 80 p.m. for the period from the 6th of November 1959, to the 6th of November 1961, and it was not a technical default. The word `may' occurring in subsection (2) of section 13 was interpreted as meaning `shall', so that the Rent Controller had no option but to evict the appellant herein. The appellate authority ordered the appellant to put the respondent in possession of the suit premises by the end of February 1964, for in its opinion, once, the Rent Controller had come to the conclusion that there ,had been, a default in payment of rent by the tenant, he had to be ordered to restore possession of the premises to the landlord. 7. In this second appeal by Mian Rehmat Ali, it is argued before us that the appellant having deposited rent of the premises with the Settlement Department and tendered rent twice, first by cheque and then by money order for the period from the 1st of March 1960, to the 1st of July 1960, there was no default in tendering of rent by him, so as to deprive him of the protection in proviso (b) to subsection (2) of section 30 of the Displaced Persons (Compensation and Rehabilitation) Act, 1958. It is further urged that the word `may' in subsection (2) of section 30 means `may' and not shall and confers a discretion on the Rent Controller, but does not compel him to order a ejectment of the tenant from the premises as held in Kh. Ghulam Qadir v. Tajammal Hussain (P L D 1964 Lah: 329). It is also contended that once discretion has been exercised by the Rent Controller, it should not have been interfered with by the appellate authority. The notice served by the respondent on the appellant is also claimed to be invalid on the ground that rent demanded in it was in excess of what was permitted by proviso (a) to subsection (1) of section 30. Reliance is placed on Malik Abdul Aziz v. West Pakistan Publishing Company (Private) Ltd. (P L D 1965 Lah. 82). 8. This case came up for hearing before a learned single Judge, and the question being raised whether in a case where in a notice under section 30 of the Displaced Persons Act, 1958, if the landlord demands rent at a higher rate than the latest assessment, it is obligatory on the part of the tenant to comply with such a notice, the case was referred to a larger Bench for final disposal. 9. The existing rent of the portion of the house in the possession of the appellant herein was Rs. 80, p.m. This is clear from the fact that on a rebate of 33 per cent. of the rent allowed to refugees, he was paying Rs. 54 p.m. to the Department. His liability to pay rent to the transferee at Rs. 80 p.m. was admitted before the appellate, authority, and it was at this rate rent was remitted by him twice to the respondent from 1st April 1960. 10. Apart from producing some documents, the parties have led no evidence, but it is apparent from the pleadings of the parties that there has been a contest between them from the transfer of the house. He filed an appeal against the transfer of the house to the respondent. It cannot, therefore, be believed that the appellant was unaware of the order of transfer of the house in her favour or of the issue of P.‑ T: O. to her on or about the 6th of November 1951 We are not, therefore, willing to accept‑the contention raised on behalf of the appellant that the payment of rent for the months of November and December 1959 and January, February and March 1960, by the appellant to the Department was made bona fide. It appears to us that the payment was deliberately made to the Department, firstly, in order to obtain the benefit of 33 per cent rebate in rent, for payment was made at the reduced rate, and secondly, to spite the respondent, because there had been a dispute with her about the transfer of the house. It is significant that despite the receipt of a notice from her that a P. T. O. had been issued in her favour, he deposited the rent for the month of March 1960. with the Department. In law, he was liable to pay rent to the transferee under section 30 of the Displaced Persons (Compensation and Rehabilitation) Act from the date of transfer, but he did not tender rent to her for this period. His payment of rent at the rare of Rs. 54 to the Department did not absolve him from his liability to tender the rent due to the transferee at the existing rate of rent, or on the basis of the latest assessment of the Municipality or local Authority, as the case may be. As already stated, the existing rent of the house was Rs. 80 p.m. The payment at the rate of Rs. 54 per month to the department still left him a defaulter in the payment of the due rent for over a month. 11. The respondent in her first notice sent to the appellant demanded rent at the rate of Rs. 125 per month, which was in excess of the rent which it was lawful for her to demand, and the question raised is whether it was obligatory on' the part of the tenant to comply with such a notice. The simple answer to this question is that as under Proviso (a) to subsection (1) of section 30, it shall be lawful for the transferee to charge the rent on the basis of the latest Assessment of the Municipality or local Authority, as the case may be, there was no obligation on the tenant to pay rent in excess of this amount. 12. Section 30 of the Displaced Persons (Compensation and Rehabilitation) Act provides as under:‑ . 30.‑(1) Where any person is in possession of any evacuee house, or shop, or has been declared on or before the twentieth day of December 1958, by a Custodian to have tenancy rights from a date prior to the fourteenth day of August 1947, in any industrial concern, cinema house or printing press which is transferred to any other person under the provisions of this Act, then, notwithstanding anything contained 1n any other law, such person shall, without prejudice to any other right which he may have in that house, shop, industrial concern, cinema house or printing press, be deemed to be a tenant of the transferee on the same terms and conditions as to payment of rent or otherwise on which he held it immediately before transfer: Provided that:‑ (a) it shall be lawful for the transferee to charge a rent on the basis of the latest assessment carried out by the municipality or local authority, as the case may be, for other properties in the locality generally; and (b) it shall not be lawful for the transferee to eject such person from the house or shop for a period of six years, and from the industrial‑concern, cinema house or printing press for a period of three years from the date, of transfer, notice of which shall be given by the transferee to the tenant within one month of such transfer by registered post (acknowledgment due). (2) Where the transferee does not give notice within one month, as required by proviso (b) to subsection (1) the period mentioned in that proviso shall count from the date of receipt of such notice by the tenant. (3) Nothing in proviso (b) to, subsection (1) shall apply to a tenant‑ (i) who has not, within three months from the date of receipt of a notice of demand sent to him by the transferee by registered post (acknowledgment due), paid or tendered the amount of rent or arrears of rent due for any period after the transfer; (ii) who, after the transfer, has sublet or otherwise parted with the possession of the house or shop, industrial concern, cinema house or printing press, or any part thereof, or has committed acts which are destructive of or injurious to the property; 'nor shall anything therein apply to the tenant of any house or shop who, in any urban area within the same town or city, owns a house or shop, as the case may be. (4) On the expiry of the period mentioned in proviso (b) to subsection (1) or on the contravention of any of the provisions of subsection (3), whichever is earlier, the relationship of landlord and tenant between the transferee and the tenant shall be regulated in accordance with the law for the time being in force relating to such relationship." Subsection (1) of section 30 makes the person in possession a statutory tenant of the transferee of the building on the same terms and conditions as to payment of rent or. otherwise, on which he had held it immediately before the transfer. This creates in unmistakable terms a statutory tenancy. There are two provisos to this subsection. The first proviso makes it lawful for the transferee to charge the rent on the basis of the latest assessment carried out by the municipality or local authority, In other words if a rent is assessed at a higher rate by the shade a municipality or local authority in the latest assessment, carried out in the locality, the transferee may charge the higher rent. The option lies with him. It is not unlawful for him to charge rent according to the latest assessment. The proviso (b) places a restriction on the ejectment of the persons in possession for the period specified therein, and subsection (2) prescribes the date, from which the period is to count. The period of restriction on ejectment of the person in possession is to count from the date of service of notice sent by registered post (A. D.). The service of notice contemplated by subsection (2) relates purely to the period of protection afforded to the person in possession by proviso (b) to subsection (1). Subsection (3) is an exception to proviso (b) to subsection (1) The protection to the person in possession afforded by proviso (b) is not available to a person whose case falls within clause (i) of subsection (3), i.e. who has not within three months from the date of receipt of a notice of demand sent to him by the transferee by registered post (acknowledgment due), paid or tendered the rent or arrears of rent due from him for any period after the transfer. (This clause is material for the case in hand) Clause (ii) also takes away the protection from a person who submits or otherwise parts with possession of the building or commits acts destructive of or injurious to property. The protection does not also apply to a person who owns a house or a shop in any urban area within the same town or city. Subsection (4) provides that after the lapse of the period in proviso (b) read with subsection (2) or in case of contravention of subsection (3) whichever is earlier, the relationship of landlord and tenant between the transferee and the person in possession shall be regulated by the law for the time being in force relating to such relationship. 13. From the above analysis of section 30 it would appear that to enable the transferee to eject a person before the expiry of the period of protection, it is necessary for him to show that the person in possession has not within three months from the date of receipt of notice of demand sent to him by the transfer by registered post (A. D.), paid or tendered the amount of rent or arrears of rent due for any period after the transfer. It is non‑payment of the rent due, and not the rent, which is demanded by the transferee in his notice, that takes away the protection afforded by this section to the person in possession. Therefore, the person in possession can disregard the sum mentioned in the notice, but he must pay the rent, which is due. The rent which is due is the rent, which he was paying immediately before transfer or which the transferee can lawfully charge on the basis of the latest assessment carried out by the municipality or the local authority. If the landlord demands rent in his notice, which is in accordance with proviso (a), the person in possession must pay the rent due within three months of the date of the receipt of the notice, but if the landlord does not mention the rate of rent at the time of transfer or the rate of rent according to the latest assessment, then the person in possession is not placed on inquiry to find out what the latest assessment is, and he need only pay or tender the rent due at the is not, however, absolved of the liability to pay the rent he was paying immediately before the transfer, as was held in Malik Aziz v. Abdul West Pakistan Publishing Company (Private) Limited (P L D 1965 Lah. 82). He is liable in any event to pay the rent, which he was paying before the transfer. He will not, however, be entitled to the rebate of 33 %, which the refugees were allowed to deduct from the rent in paying rent to the Rehabilitation Department. In the present case, despite the notice by the respondent to the appellant to pay rent at the excessive rate of Rs. 125 per month, he was under an obligation to pay rent at p the rate of Rs. 80 per month from the date of transfer in order not to lose the protection in proviso (b) to subsection (1) of section 30. There is nothing in section 30, which invalidates the notice, because the rent demanded in it is excessive. 14. The first question, which falls for determination in this case is whether the appellant has lost the protection in proviso (b) to subsection (1) of section 30 or not. The respondent served him with a notice of demand by registered post (acknowledgment due) on the 26th of March 1960 to pay her rent from the date of transfer, namely, 6th of November 1959. She served, him with another notice of demand on the 2nd of May 1960. The appellant sent her a cheque on the 8th of June 1960 (within three months) for Rs. 240 as rent from the 1st of April 1960 to the 30th of June 1960 at the rate of Rs. 80 per month, which she refused to accept. He again sent her a money order on the 4th of July 1960, for Rs 320 as rent from the 1st of April 1960 to the 30th of July 1960, which she also refused to accept. Both the remittances were refused on the ground that rent was not tendered to her from the date of transfer. It is obvious, therefore, that the appellant did not tender her rent from the period 6th November 1959, to the 31st March 1960, at any time. This rent had to be tendered to her within 3 months of the receipt of the notice. Consequently, the protection in proviso (b) against his ejectment is not available to him, and the Rent Controller had jurisdiction to entertain the petition. 15. The appellant having become a statutory tenant of the respondent as transferee, and having contravened subsection 3(i) the question arises whether he is liable to ejectment under section 13 of the West Pakistan Urban Rent Restriction Ordinance VI of 1959. Under its subsection (1) a tenant in possession of a building shall not be ejected therefrom, except in accordance with the provisions of the section. Under its subsection (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 the expiry of the time fixed in the agreement of the tenancy with the 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 make an order rejecting the‑ application. If the tenant has not paid or tendered rent due from him in respect of the building, there is a discretion given to the Controller, and he may direct him to put the landlord in possession as held in Kh. Ghulam Qadir v. Tajammal Hussain. The appellate Authority was not right in holding that the Rent Controller was bound to eject the tenant in possession. As already held, there is default on the part of the appellant to pay or tender the rent to her from the date of transfer. This being the case, are the circumstances‑ of the case such that the appellant should not have been ordered to be ejected, and whether the appellate Authority was not justified in interfering with the discretion exercised by the Rent Controller, in refusing to eject him? 16. In deciding whether the appellant be ejected or not, the whole period of default in paying rent and. the surrounding circumstances have to be borne in mind. In case, there has been a deliberate default in payment of rent, a tenant is no entitled to be saved from the consequences of his default, namely, his ejectment. Where there has been. default, on his part, there must be good reasons for the exercise of discretion in his favour and in not directing him to put the landlord in possession. The one circumstance relied upon by the learned counsel for the appellant in his favour is that the appellant had paid rent to the Department for the months of November and December 1959 and January and February 1960, before receipt of notice of transfer from the' respondent. We have already held that the appellant could ‑not have been unaware of the issue of the P. T. O. in favour of the respondent but even if he was unaware of it, it was his obligation to tender rent to the transferee on being informed of it in which case he also protects himself against ejectment). He did not tender any rent to the respondent for the period from the 6th of November 1959, to the 31st of March 1960 and even though he was told by the Deputy. Settlement Commissioner that he should have the rent of this period refunded from the Department and pay it to her, he altogether failed to do so. The tender of rent by him was only for the period 1st of April 1960 to the 31st of July 1960. Thereafter; he paid no rent at all. He never tendered the whole rent due to her, and her refusal to accept the tendered rent was not unjustified. In these circumstances the default could no be held to be technical. There is a deliberate and contumacious failure on his part to pay her rent up to the 31st of March 1960. There is also failure to pay rent from the 1st of August 1960, to 6th January 1961, unless we can hold that there was no obligation in law on him to tender further rent. 17. Rent falls due at the end of every month and there is liability in the tenant to pay rent at the end of every month. Under clause (i) of subsection (2) a Rent Controller may direct the tenant to put the landlord in possession, if the tenant has not paid or tendered rent due by him in respect of the building within sixty days from the period for which rent is payable. The liability to ejectment accrues for non‑payment of rent within sixty days of the date from which the rent is due. If, a tenant does not pay rent for sixty days from the date of its falling due, then the power vests in the Controller to order his ejectment. Therefore, under subsection (2) of section 13 the tenant incurs a liability to be ejected from the premises if he commits default of two months in paying rent. This default occurred in the present case. This section does not provide that in case the landlord refused to accept rent there is no further obligation on the tenant to tender rent or that he does not commit a default, if he does not tender rent due within sixty days of the date on which it becomes due. The learned counsel for the appellant however relied on Shiri Krishan Lal and others v. Ram Nath Janki Parshad Air and others (A I R 1944 Nag. 229) which holds that after the landlord has refused to receive rent, it is useless for the tenant to tender any more. But this was a case in which the rent of 1930 and 1931 was in default, and it was found that the respondent's predecessor had endeavored to pay rent both in 1930 and in 1931, but its acceptance was refused by the landlord. This is not the case here. Learned counsel for the appellant also relied on Ram Krishna Parshad v. Muhammad Yahya (A I R 1960 All. 482) which holds that if a landlord, without lawful excuse, refuses to accept rent tendered by the tenant, he cannot afterwards treat the tenant as a defaulter or serve a notice of demand under section 3(1) (a) of the U. P. (Temporary) Control of Rent and Eviction Act, as an excuse for filing a suit for ejectment. This case, is also distinguishable, because the Court held that the appellant had explained in his defence that he had been unable to make payment, because the landlord would not accept it, whenever it was tendered, and it was observed that if this explanation was true, it was obvious that he was never in default, and the landlord was deliberately manoeuvring him into a position, where he could be accused of being a defaulter. Therefore, in both these cases the rent due was tendered, but its acceptance was refused by the landlord, which is not the case before us. In the case before us, the appellant did tender rent for the months of April, May, June and July 1960, but thereafter made no tended of rent. In cases where rent is tendered by the tenant once of twice, but is refused by the landlord, and no further payment of to rent is made by the tenant, the real question is whether the tender of further rent was not made in the belief that rent would not be accepted by the landlord; because if that be the position and it be clear that the landlord is not willing in any circumstances to accept the rent, if it is tendered to him, then the Court must incline in favour of the tenant, and exercising its discretion in his favour, decline to eject him. It is, however, in the interest of the tenant, to protect himself from an order of ejectment, by tendering rent to the landlord periodically, so as not to run the risk of being declared a defaulter, even if he does not accept the rent. This is not, however, a case in which the appellant tendered the whole rent due, and it was refused by the respondent: Her refusal to accept the rent remitted to her has been held to be justified on the ground that the whole of the rent due to her was not sent to her. The payment of some rent to the Department cannot be of any avail to the appellant, because he was told to withdraw it and has not shown that he endeavoured to obtain its refund, but failed to do so, and that he without its refund, he was in a position to pay the rent to her. If the appellant had remitted the whole rent due and had merely defaulted in payment of rent for the period after the 1st of August 1960, we may have exercised our discretion in his favour, but we find that there has, been no genuine attempt whatever on his part to tender the rent due to the respondent. Her refusal to accept the tendered rent has been explained and it cannot be said that she would have refused the to accept rent if it had been remitted to her for the whole period at Rs. 80 p.m. We cannot therefore deny to the respondent possession of the premises, to which she is entitled as landlord. 18. The argument that the appellate Authority should , not have interfered with the discretion of the Rent Controller, is attractive, but it, is by now well settled that exercise of discretion is subject to appellate jurisdiction, and the appellate Court has power to interfere with the exercise of discretion in suitable cases, if the exigencies of the case so require. There is, therefore, no force in the contention that the appellate Authority could not interfere with the discretion exercised by the Rent Controller. It cannot be said in the instant case that the default on the part of the appellant was merely technical as the Rent Controller assumed. There has been long drawn litigation between the parties and the circumstances of the case are not such as call for our interference in the direction to the appellant to put the landlord in possession. 19. For the reasons given above, we would dismiss this appeal, but make no order as to costs. K. M. A. Appeal dismissed. \