P L D 1967 Lahore 1000 (PLP)

This is a second appeal under section 15 of the West Pakistan Urban Rent Restriction Ordinance against the order of the Additional District Judge, Lahore in Civil Miscellaneous Appeal No. 306/64, whereby he upheld the order of the Civil Judge, Lahore passed under section 13 of the Rent Restriction Ordinance directing that the respondent before him should put the petitioner into possession of the premises.

2. The facts are not in dispute and may be briefly stated Muhammad Abdullah, hereinafter referred to as the appellant, as the owner of the property in dispute mortgaged it with the respondent Abdul Jabbar by a registered deed dated 19‑12‑

60. It was described as a mortgage with possession. The sum secured was Rs. 15,000 which the appellant received from the respondent at the time of the registration of the document. Simultaneously there was an agreement whereby the mortgagor purported to take the premises on rent at the rate of Rs. 90 per month from the mortgagee. The document described as the rent deed is dated 20th December 1960 but the fact that the possession had been given to the mortgagee and it had been taken back under a rent deed is stated in clause (1) of the mortgage deed itself. The mortgage was for a term of 3 years, at the expiry of which the mortgagor was entitled to redeem the property and the mortgagee was entitled to give a month's notice demanding the mortgaged amount, etc. and on failure put the property to sale through Court and if the property was not found sufficient for the satisfaction of the dues the balance was recoverable from the other movable and immovable properties of the mortgagor and also from his person. Likewise the rent deed also provided by clause (10) that if the rent was not paid from month to month the mortgagee would be entitled to recover it by a suit from his property as well as from his person. Clause (9) further provided that at the end of 3 years the mortgagor will vacate the premises and deliver vacant possession to the mortgagee or execute a further rent deed on fresh terms and conditions.

3. The appellant continued to be in possession of the mortgaged premises but he did not make any payment towards the rent or interest. The respondent then filed an application under section 13 of the Ordinance in the Court of the Civil Judge claiming to be put into possession on the ground of the appel lant's failure to pay rent. The Civil Judge acting as the Controller under the Ordinance held that the relationship of landlord and tenant did exist between the parties as contemplated by the Ordinance and as the appellant had neither paid nor tendered the rent, the respondent was entitled to be put into possession. The Additional District Judge in appeal substantially upheld these findings. It was urged before him that the amount of rent was in reality the interest payable on the principal mortgage amount and notwithstanding the rent deed and what was contained therein, the appellant was not a tenant as defined under the Ordi nance. He, however, repelled this contention and pointed out that having regard to the terms of the mortgage deed and the rent note itself any oral evidence would be excluded under section 91 of the Evidence Act. In view of these conclusions he dismissed the appeal. The mortgagor then filed the present second appeal.

4. The decision of this appeal would principally depend upon the determination of the question, whether the appellant is a tenant and the respondent is a landlord within the meaning of the term as defined by the Ordinance. But before I proceed to deal with that question it would be necessary to determine the true relationship between the parties with reference to the two docu ments referred to above. Having regard to the terms of the mortgage deed and the fact that there was a simultaneous lease back which, as has been noted, is provided in the document of mortgage itself though also separately evidenced by a rent deed, it must be held that the mortgage and the lease constituted one transaction. The lease was to provide a mode for realising interest payable on the mortgaged amount. Rs. 90 per month having regard to the consideration of the mortgage which was Rs. 15,000 would work out to about 7 % per annum by way of interest. If any authority was needed for the proposition reference may be made to the decision in the case of Mohammad Saeed v. Abdul Alim (A I R 1947 Lah. 40) which was a case decided by a Full Bench of the Lahore High Court. It was held therein that a deed of mortgage purporting to be one of possession and a simultaneous deed of lease of the mortgaged property in favour of the mortgagor should be regarded as making up one transaction. Their Lordships of the Judicial Committee in the case of Panaganti Ramarayanimgar v. Sri Rajah (A I R 1927 P C 32) accepted the contention that the two deeds of mortgage and lease should be read together as forming part of one transaction, the lease being in the nature of machinery for the purposes of realising the interest due on the mortgage. The next question is as to what was the nature off this mortgage. As has been noted earlier the mortgage deed did not merely provide for the usufruct of the property in view of the fact that it was simultaneously leased to the mortgagor but there was a provision in the deed for the recovery of the mortgaged amount plus what was due by way of rent or interest by the sale of other properties of the mortgagor, movable and immovable, and there was a further covenant for the personal liability of the mortgagor. This could not, therefore, be just a usufructuary mortgage as defined by clause (d) of section 58 of the Transfer of Property Act. In such a mortgage the mortgagee has a right to receive the rent and profits accruing from the property in lieu of interest or in payment of the mortgaged money or partly in lieu) of interest or partly in payment of the mortgaged money, but there is no right to sell the property nor is there the right in the mortgagee to enforce the liability under the mortgage against the mortgagor personally. The present transaction would be covered by the new definition of the anomalous mortgage as inserted by clause (f) of section

58. A simple mortgage usufructuary would now be one class of anomalous mortgage being a combination of a simple mortgage and an usufructuary mortgage. In such a mortgage the mortgagee may sue for sale though merely as usufructuary mortgagee he could not have done so. That being the true relationship between the parties the question which now falls for decision is whether the respondent could effectively invoke the provisions of section 13 of the Rent Restriction Ordinance for the purposes of being put into possession on the ground that the appellant had failed to pay rent. Section 13 provides that a landlord who seeks to evict his tenant shall apply to the Controller for a direction in that behalf. A `landlord' has been defined by section 2 (c) to mean any person for the time being entitled to receive rent in respect of any building or rented land. Clause (i) defines a 'tenant' to meat, any person by whom or on whose account rent is payable for a building or rented land. It is true that the rent deed in this case provides for payment of Rs. 90 per month as rent but considering the true relationship between the parties which was that of mortgagor and a mortgagee and the two transactions of mortgage and lease being in substance one and the lease being in the nature of a machinery for the purpose of realising the interest due on the mortgage, I am unable to hold that the amount made payable by the appellant to the landlord can be termed as rent payable by tenant to a landlord. What the respondent was to receive was u certain sum of money and the consideration for this payment was, the fact that he had lent a sum of Rs. 15,000 to the appellant] otherwise the appellant still remained the owner of the property He could not be an owner and a tenant at the same time. A similar question was considered by the Patna High Court in the Indian jurisdiction in the case of Baijnath v. Jung Bahadur (A I R1955 Pat, 357). In that case also the mortgagor had taken back a lease of the mortgaged property by executing a kerayanama in favour of the mortgagee. It was held that the so‑called rent payable under the kerayanama in fact represented the interest payable on the mortgaged money and not rent for use and occupation. That being so, it was held that the mortgagor could not be deemed to be a tenant of the mortgagee so as to be evicted upon an application by the mortgagee under section 11 of the Bihar Buildings Control Act, 1947. In that Act also a tenant was defined to mean any person by whom or on whose account rent was payable for a building.

5. It was urged by Mr. Muhammad Islam, the learned counsel for the respondent, that the contract between the parties should not be lightly interfered with and the Court should lean in favour of enforcing the bargain rather than allowing it to be defeated. He pointed out that in this case the period of 3 years as provided in the rent deed had expired and under clause 9 of that deed the respondent was entitled to possession. I agree that parties to a bargain should be made as far as possible to adhere to it. I am not deciding that the respondent‑mortgagee would not be entitled to obtain possession by a regular suit. Indeed, it was so held even in the Patna case, where with reference to the decision of the Judicial Committee in the case of Mian Feroze Shah v. Sohbat Khan (A I R 1933 P C 178) their Lordships observed that on the authority of this decision it is possible that the mortgagee by virtue of his right as such recover possession of the mortgaged property after the expiry of the lease or on breach of any condition entitling him to recover possession, when he brings an appropriate action. They, however, added that that aspect had no relevancy on the question whether the mortgagors were the tenants of the mortgagee within the meaning of the Bihar Buildings Control Act, 1947. My conclusion, for the reasons given, is that upon an application under section 13 of the West Pakistan Urban Rent Restriction Ordi nance, 1959, the respondent was not entitled to be put into possession of the premises.

6. In view of my conclusions this appeal is allowed so that the respondent's application under section 13 of the Ordinance shall be dismissed. In the circumstances of the case I leave the parties to bear their own costs throughout. A. H. Appeal allowed.