P L D 1965 (W (PLP)

FARUQUI, J.

This appeal by the defendant No. 2 Zahir Ahmad is directed against the decree passed by Mr. Shaft Muhammad Akhund, First Class Sub-Judge, Sukkur, in Suit No. 28/1951. The first respondent in this appeal is Seth Sugni Chand who was the plaintiff in the suit. The second respondent Azizuddin, a brother of the appellant Zahir Ahmad, was the defendant No. 1 in the suit and has been impleaded in this appeal as a pro forma respondent.

2. The suit from which this appeal arises was for the specific performance of a contract in respect of the property in suit and for accumulated rent amounting to Rs. 3,080 which was the rent due from 24-3-59 up to the date of the suit. Further rent was claimed at the rate of Rs. 100 per month from the date of the suit till the date of the decree and payment thereof. The claim of the plaintiff as regards the specific performance of the contract and the payment by the defendants of the balance of the purchase price was rejected but a decree was granted to him for the recovery of rent at the rate of Rs. 100 per month from 24-3-49 which was the date on which the possession was given till the date of the decree with costs in respect of that claim only. One of the defendants Zahir Ahmad, as has been stated above, has come up in appeal to this Court.

3. The litigation between the parties has had a long and chequered course but we shall refer only to those facts which are material for the decision of this appeal and the contentions that were raised before us at the hearing. The plaintiff owned Sugni Chand Ice Factory situated in Sukkur. He was also the owner of the premises bearing Nos. C. S. 2017/2 and 2049/3 consisting of land and building wherein the aforesaid ice factory was located. On 24-3-49 the defendants purchased the ice factory from Sugni Chand, the plaintiff, for a sum of Rs. 70,001 which price was paid and possession was taken by the two brothers, the defendants in the present suit. On the same day, an agreement of sale of the building and land was also entered into between Sugni Chand and the defendants for the considera tion of Rs. 38,

000. An earnest money of Rs. 3,800 was paid and the sale was to be completed upon Sugni Chand obtaining a clearance certificate from the Income-tax Department. This was to be done within a fortnight. The agreement of sale is produced in this suit and is marked Exh.

117. On the same day a rent deed was executed between the parties in respect of the building and land which were the subject matter of the agreement of sale. The material part of this rent deed may be conveniently reproduced here :- "Whereas the landlord has rented his building C. S. Nos. 2017/2 and 2049/3 Ward 'B' Registration Sub-District, and District Sukkur and situated at Shaikh Shein Road, Sukkur. The landlord has let out the above-said building to the said tenant on the term and conditions hereafter written :

And now therefore this indenture witnessed as follows :

(1) That the tenant shall pay rent at Rs. 100 p. m. with effect from 24-3-49. (2) That the tenant will pay the rent regularly on the expiry of each month on preservation of receipts. No payment shall be deemed to have been paid in absence of the receipts. (3) This rent deed is valid for a period of four months from 24-3-49. (4) That the tenant will pay water charges to the municipality extra to the rent. (5) That the tenant shall not sublet the premises and on vacating the same, will hand over possession to the owner, his agent or any authorised man in this respect. (6) That the tenant will have full regard of the building and will try to save the same from all kind of damages and destructions. (7) That if the tenant fails to pay the regular rent in due time the building can be vacated of one month's clear calendar notice." This rent deed is marked Exh. 119.

4. The sale in respect of the premises was not completed as there was delay in obtaining clearance from the Income-tax Department and the present defendants Zahir Ahmed and Azizuddin filed a suit in the Court of Sub-Judge, Sukkur, being Suit No. 50/50 on 10-11-50 for the return of the sum of Rs. 3,800 with interest which had been paid by them to Sugni Chand by way of the earnest money. Sugni Chand then filed the present suit being Suit No. 28/51 for the specific performance of the agreement of sale and for rent as stated above. This suit was stayed because of the previously instituted suit by the two brothers. .That suit was in the first instance dismissed by the Sub-Judge in the year 1954 and the appeal to the District Judge also having failed Zahir Ahmed and Azizuddin came to the High Court in second appeal. This was allowed on 27-1-1959 whereby the decree of both the Courts was set aside and the case was remanded for inquiry as to who was liable for the non-performance of the agreement of sale. On remand the case came up before the Sub-Judge who decreed the suit of the two brothers for the refund of the same which they had paid by way of earnest money upon the finding that time was of essence of the contract and Sugni Chand having failed to obtain the clearance certificate within -the specified time was guilty of breach of contract. This decree does not seem to have been challenged any further. In the meantime upon the coming into force of the Ordinance VI of 1959 (West Pakistan Urban Rent Restriction Ordinance), Sugni Chand made an application for arrears of rent and ejectment before the Rent Controller on 8-5-59 against the two brothers. This application was dismissed by the Rent Controller upon the ground that the dispute was already the subject-matter of the suit between the parties. The suit for the refund of the earnest money was eventually decreed as has been shown above on 21-9-59 and it was then that the present suit came up for trial before the learned Sub-Judge First Class.

5. A number of issues had been framed in this suit which, as has been noticed, was both for the specific performance of the contract and a claim for the balance of the price as well as for rent at the rate of Rs. ICO per month from 24-3-49. However, upon the decision of Suit No. 50/50 in favour of the two brothers where the finding was that the breach in respect of the agreement of sale was by Sugni Chand, which finding was not challenged in appeal, the learned Sub-Judge First Class, who tried the present suit, rightly Held that the issues Nos. 7 to 9 which related to the question as to who was in breach, had been disposed of as the result of the previous suit and, therefore, lie gave no finding on these issues. There were six more issues, that is issues 2 to 6 and 13 which were raised by the defendants upon the assertion that the plaintiff Sugni Chand had become an evacuee as the result of declarations on 7-9-49 and 5-11-51. However, Sugni Chand was declared non-evacuee by the order of the Custodian dated 6-9-57 and that order having become final, the learned trial Judge rightly held that the issues 2 to 6 and 13 did not require any further decision by him. In effect the contention of the defendants on the ground of Sugni Chand being an evacuee became ineffective. The only question which then remained before the learned Judge was whether the plaintiff was entitled to the claim of rent at the rate of Rs. 100 per month which was made in this suit. Upon this question the learned Sub-Judge found that the defendants had agreed to pay the rent at the rate of Rs. 100 per month of the premises in suit and that admittedly they had been in possession from 24-3-49 "till the resent day" and admittedly they had not paid any rent to the plaintiff. He, therefore, held that they were liable to pay this rent. The defendants had alleged that the rent was excessive but the learned Sub-Judge rejected that plea and observed that even the defendant Zahir Ahmed who had come in the witness box had not said anything as to the rent being excessive. There was an assertion by Zahir Ahmed that he had paid rent to the Custodian but he neither produced any proof of such payment nor was he able to remember the period from which this alleged rent had been paid and the learned Sub-Judge, therefore, rejected this plea of payment of any rent to the Custodian. Another contention was raised that the claim for rent could only be made in the Court of the Controller under the West Pakistan Urban Rent Restriction Ordinance and that the trial Judge had no jurisdiction in the suit to pass a decree for rent. This was repelled by the learned trial Judge upon the ground that this was a pending action and the Ordinance did not affect the jurisdiction of the Court to grant a decree of rent in this case. None of these findings have been challenged before us by Mr. Castellino, the learned counsel for the appellant. He has raised only two points before us and with them we shall now proceed to deal.

6. The first point urged by Mr. Castellino was that the rent deed, Exh. 119, reproduced above, was ineffective for want of registration and was also inadmissible in evidence for the same reason. The argument was that having regard to the provisions of section 107 of the Transfer of Property Act the lease in this case having been brought about by a written instrument and that instrument not having been registered, no rights passed to the lessee so as to entitle him to claim rent up to the basis of that lease. The material part of section 107 may be reproduced. "107.-A lease of immovable property from year to year,' or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument. All other leases of immovable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession." The further contention with regard to the inadmissibility of this document was based upon section 49 of the Registration Act which, as stood before its amendment, had provided that no document required to be registered under section 17 of the. Registration Act or by any provisions of the Transfer of Property Act could be received as evidence of any transaction affecting any such property or conferring such rights. Mr. Castellino evidently was not aware of the amendment to this section brought about by Ordinance XLY of 1962. The effect of this amendment in so far as it is material for the present case is that sub-clause (c) of section 49 which excludes such document from being received in A evidence, has been deleted. When this amendment was brought to the notice of Mr. Casteltino he did not press the point of admissibility any further. This question was dealt with by Qadeeruddin Ahmed, J. in his judgment in the case of Anwar Sultana v. Pakistan Co-operative Housing Society (P L D 1964 Kar. 116). Exh. 119 is, therefore, admissible. The further argument, however, is that for want of registration the rent deed does not create a lease. The short answer to that argument is that the monthly lease in the present case was not created by this document. A perusal of it would clearly shoe- that it is merely a memo. containing the terms as to rent and other allied matters. This document, the material portion of which has been reproduced above, starts by saying that the landlord has rented his building in question to the defendants. The second paragraph reiterates the same position wherein it is said that "the landlord has let out the above said building to the said tenants on the terms and conditions hereafter written." It is, therefore, plain that the letting out had already been done and this document is merely a memo of the terms which had already been agreed. The agreement to let must therefore be held to be an oral one. It may be observed that in para. 4 of the plaint it had been expressly pleaded that the defendants had agreed to pay Rs. 100 per month as the rent of the aforesaid premises and there was no denial of it in para. 6 of the written statement which contained a reply to para. 4 of the plaint. Indeed, in para. 9 of the written statement it is stated that the rent deed was executed to cover the period of the fortnight preceding- the execution of the sale deed. There is thus an admission in the pleading with regard to the agreement to pay Rs. 100 per month as rent. No issue was raised by the defendants on this point in the Court below and, therefore, it was rightly contended by Mr. Mohan Lal before us that the plaintiff did not consider it necessary to give further evidence with regard to the oral agreement whereby the monthly lease was granted to the defendants. However, it is plain from rent note itself that the lease had already been granted and in the circumstances it must follow that it was by an oral agreement accompanied by possession. Such a lease does not require to be registered as is provided by section 107, Transfer of Property Act. It was held by a Full' Bench of the Lahore High Court in the case of Mohanlal v. Gandal Singh (I L R 1943 Lah. 695) that a rent deed not compulsorily registrable under the Registration Act, executed by a tenant in favour of a landlord, if C not registered can be relied upon to establish the relationship existing between the parties. That difficulty has now been obviated by the amendment to section 49 by Ordinance XLV of 1962. We, therefore, hold that there was a valid monthly lease between the parties which was brought about by an oral agreement accompanied by delivery of possession and the terms of which were as has been set out in the rent deed reproduced above. It follows that the defendants became liable to pay rent at the rate of Rs. 100 per month to the plaintiff as from 24-3-49.

7. The second point urged by Mr. Castellino was that considering that the tenancy was for four months only as shown by the rent deed, the plaintiff was not entitled to claim rent at the specified rate after the expiry of the four months from 24-3-49. It was urged that the only relief open to the plaintiff was to claim mesne profits for the period commencing from the date when the four months expired up to the date of the suit. Reliance was placed upon Order XX, rule 12, C. P. C. which provides that where a suit is for the recovery of possession of immovable property and for rent or mesne profits, the Court may pass a decree for the rent or mesne profits which may have accrued prior to the, institution of the shit or an inquiry may be directed as to such rent or mesne profits from the institution of the suit until the delivery of possession. The argument was that as this suit was essentially for specific performance and not for possession, it was not open to tile Court to grant any money decree to the plaintiff on account of rent or mesne profits It was further pointed out that after the expiry of the period of four months the defendants' possession must be held to be wrongful and, therefore, the plaintiff could only claim mesne profits and not rent. We are unable to accept this contention. Rule 12 of Order XX has no application to the present case. This provision merely enables the Court to pass a decree as contained in this rule in the circumstances set out therein. In our opinion, the present case is covered by section 116 of the Transfer of Property Act. This section reads as follows :-

116. If a lessee or under-lessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under-lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as specified in section 106". In the present case, it is true the monthly lease was for a period of four months and that was because it was contemplated that during this period the property would be conveyed to the defendants under the agreement of sale. But this did not take place and the defendants continued in possession and the plaintiff had, in our opinion, assented to the continuing in possession of the defendants of the leased premises. The four months of the lease expired on 24-7-49 and the defendants continued in possession without any objection by the plaintiff. Years passed and the plaintiff claimed rent. In these circumstances it must be held that the plaintiff had assented to the defendants continuing in possession and, therefore, the lease must be held to have been renewed from month to month because that was the purpose of it as specified in section 106 of the Transfer of Property Act. It was D held in the case of Dougal v. McCarthy ((1893) 1 Q B 736), that a demand for rent or a suit for rent are circumstances from which such an assent of the lessor can be inferred. The same view was taken in the case of Balaji v. Ramchandra ((1903) 27 Bom. 262). Both these decisions were relied upon by a Division Bench of the Lahore High Court in the case of Muhammad Saeed v. Khushi Muhammad (P L D 1954 Lah. 796). It was held that the landlord can be said to have "otherwise assented" to the tenant's continuing in possession if from time to time, as the situation required, they had filed a suit for rent. It was held in this case that the provisions of section 116, Transfer of Property Act, were attracted in this case. We are in respectful agreement with the view taken in these cases and hold that the lease in the present case was renewed from month to month as from 24th July 1949 after the expiry of the period of four months which was originally agreed between the parties. That being so, the defendants are liable for rent to the plaintiff at the rate of Rs. 100 per month from 24-3-49, till the date of the suit and till the date of the decree as ordered by the Court below.

8. No other point was urged before us and in view of our conclusion upon the points urged we dismiss this appeal with costs. K.B.A. Appeal dismissed.