P L D 1969 Karachi 12 (PLP)

Percy Ramchandani for Respondent. Dates of hearing : 25th January, 15th and 22nd February 1968. The respondent, Gobind Singh Shahani, is owner of house No. C. S 356, situated in Ward `A', New Town, Mirpur Khas. This house has been in occupation of the appellant since 1948. In 1959 the respondent made an application under the West Pakistan Urban Rent Restriction Ordinance, 1959, for eviction of the appellant on the ground of default made by him in payment of rent since January 1948. An additional ground taken by respondent for the appellant's eviction was that the former required the premises in dispute for his own personal use. The appellant took up various defences, including the defence that his possession of the house was adverse to the respondent. However, by order dated 27th January 1961, the Controller ordered the appellant to vacate the said premises, but this order was reversed in appeal by the District Judge, Mirpurkhas, on the ground that the respondent's remedy against the appellant was by way of regular suit for possession. The respondent then came in second appeal to this Court, in the course of which the parties filed the following compromise application:‑ "Respondent admits that he is the tenant of the appellant and undertakes to pay the arrears of rent In the sum of Rs. 2,202 (rupees two thousand two hundred and two) only after adjustment of Rs. 500 (rupees five hundred) towards repairs calculated at Rs. 14 (fourteen) per month from 1st January 1948 upto the end of February 1964 by the 31st of May 1964. He further agrees that the appeal may be allowed and a decree for ejectment in respect of the house may be passed on condition that if ht fails to pay the above‑mentioned amount by 31st May 1964 the appellant will be entitled to execute the decree and evict him from the property in dispute. The appellant has also accepted these terms." This compromise was recorded by Wahiduddin Ahmed, J. (as he then was) on 2nd March 1964, who in his order gave a decree for ejectment in the respondent's favour on the conditions stated in the compromise application, that is, that if the appellant failed to pay the arrears mentioned in this application by 31st May 1964, he will be evicted from the premises in dispute. The 31st day of May 1964 was a Sunday and, therefore, the appellant deposited Rs. 1,702 on the next day, that is, 1st June 1964, in the executing Court. On 13‑11‑1964, the respondent made an application for the execution of the ejectment decree, stating that the appellant had failed to deposit Rs. 2,202 by the stipulated date. On receiving notice of this execution application, the appellant made an application to the executing Court to the effect that he had calculated the arrears at Rs. 1,702 due to a genuine mistake in the construction of the compromise decree, and that he now be allowed to pay the balance of Rs.

500. The executing Court, by order dated 7‑12‑1965, held that the amount payable by the appellant under the compromise decree was not expressly and clearly fixed in the decree, and, therefore, the appellant had made a bona fide mistake in calculating the arrears at Rs. 1,

702. On this finding, the executing Court permitted the appellant to deposit the balance of Rs. 500, and on his doing so, rejected the execution application of the respondent. This order was reversed in appeal by the District Judge on 12‑11‑1966, on the ground, as it appears to me, that the executing Court was not competent to relieve the appellant against his default in payment of the full amount of Rs.2,

202. It is this order which is challenged in this second appeal.

2. The question arises whether in cases coming under the West Pakistan Urban Rent Restriction Ordinance, 1959, if an order is made directing the eviction of the tenant if he fails to pay the arrears of rent by a stipulated date, can the executing Court relieve the tenant against default in such payment. Under section 17 of this Ordinance, every order made under sections 10, 13 and 15, including an order of eviction, is executable by a civil Court as if it was a decree of that Court, with the result that the Court executing these orders will apply the principles which are applicable in the execution of decrees given under the Code of Civil Procedure. The question then is whether, the executing Court can relieve the tenant against his default. This question has been discussed in several decisions of various High Courts. I would first refer to the Full Bench decision of the Bombay High Court in Krishanbai v. Hari Govind ((1907)31 Bom.15), in which Jenkins,"C. J., delivering the judgment of the Full Bench, stated that when a plaintiff seeks to enforce by original suit a right to forfeiture contained in a consent decree whereby the status of landlord and tenant was established between the plaintiff and the defendant, the Court , in the exercise of its equitable (1) (1907) 31 Bom. 15 jurisdiction is not precluded from granting, such relief against forfeiture. The learned Chief Justice referred to an earlier decision of the same Court in Shirekuli Timapa Hegda v. Mahablya (10 Bom. 435), in which it was held that the executing Court could not give relief to the judgment‑debtor against penalties. This view, however, was held to be unsound in the latter Full Bench decision. In another case, Balambhat Bin Ravjibhat and others v. Vinayak Ganpatrav Patvardhan ((1911) 35 Bom. 239), the same Court held that the principle laid down in Krishanbai v. Haro Govind, was equally applicable in execution proceedings taken by a landlord against the tenant for non‑payment of rent. In Krishnarao Pandurang Barve v. Balvant Keshav Patil (A I R 1925 Bom. 404), Macleod, C. J. held that though an executing Court cannot modify or vary the terms of a decree, it has power to relieve a party to a decree against the consequences of his default in not observing the obligation imposed upon him by the decree. These views were followed by the Bombay High Court in Gajanan Govind Pathak v. Pandurang Keshav Puntambekar (A I R 1951 Bom. 290), in which execution proceedings had been taken by the landlord against the tenant, who was obliged under a consent decree to pay the arrears of rent by a certain date, failing which, it was provided, the tenant would render himself liable to eviction.

3. The Lahore High Court has also accepted the view that an executing Court can interfere with the terms of a compromise decree by giving relief to the judgment‑debtor against penalties. Reference in this connection may be made to Chunnamal v. Hanuman Baksh (A I R 1927 Lah. 659), and Jwalaram v. Mathradas (A I R 1931 Lah. 696). The same view was taken by the Madras High Court in M. Latchayya v. S. Kottamma and others (A I R 1925 Mad. 264) and by the Calcutta High Court in Secretary of State v. Saminatha Goundan (A I R 1920 Cal. 716).

4. There is also a Full Bench decision of the Allahabad High Court on this point, which is reported in Mohfuddin v. Mst. Kashmiro Bibi (A I R 1933 All. 252), in which it was held that section 74 of the Contract Act does apply to a compromise decree, and it is open to an executing Court to go behind it so as to interfere with a stipulation by way of a penalty contained in the compromise. Niamatullah, J., who was one of the Judges constituting this Full Bench, stated this principle as follows;‑‑ "Parties to every contract containing a stipulation by way of penalty have rights and are subject to obligations mentioned in section 74, which are part and parcel of every such contract which should be deemed to include a proviso, imported by section 74 to the effect that the party complaining of the breach is entitled to reasonable compensation not exceeding the penalty but is not entitled to enforce the penalty stipulated for in the contract. Where such a contract is embodied in a compromise which is recorded under Order XXIII, rule 3, Civil P. C., the decree should be deemed to be giving effect to the compromise with the legal incident arising from section 74 namely, that the party complaining of the breach is not entitled to enforce the penal clause but is entitled only to reasonable compensation not exceeding the penalty stipulated for." Lastly there is an Orissa case, Shyam Sunder Padoi and others v. Indramoni Das and another (A I R 1951 Orissa 46), in which, again, it was held that a compromise decree merely embodies the agreement arrived at between the parties and is no more than any other contract between the parties and, accordingly, an executing Court has got the power to apply the equitable principle embodied in section 74 of the Contract Act and to relieve one of the parties to the contract against any term which operates as a penalty, although the contract may have been embodied in a decree of the Court.

5. Turning to the present case, it has already been noted that the order of this Court made on 2nd March 1964 embodies the compromise between the parties, this compromise being that the appellant would be ejected from the premises in dispute if he failed to pay the arrears by 31st May 1964. On the authority of the decisions referred to above, I would say that the executing Court was competent to give relief to the appellant against the penalty of eviction for his failure to pay the arrears by the date fixed in the decree. It is next to be considered whether the executing Court acted properly and was justified in granting the relief to the appellant against the penalty of eviction. The application containing the compromise provided that the tenant "undertakes to pay the arrears of rent in the sum of Rs. 2,202 (rupees two thousand two hundred and two) only after the adjustment of Rs. 500 (five hundred) towards repairs . . . . .". The appellant says that he understands this provision to mean that Rs. 500 would be deducted from the sum of Rs. 2,202 and that he would pay only Rs. 1,702 by 31st May 1964. I think that the language in which the tenant's undertaken was embodied is such that the construction which the tenant put on the decree could reasonably be adopted. It cannot be held that the tenant's mistake in calculating the arrears was not bona fide or genuine. The first impression which I myself formed on reading the application for compromise was that Rs. 500 should be deducted from Rs. 2,

202. In these circumstances, the executing Court acted rightly in permitting the appellant to deposit the balance of Rs. 500 even after the expiry of the date fixed in the decree, and to relieve the tenant against the penalty of eviction. As regards the contention that even the sum of Rs. 1,702 was not deposited by 31st May 1964, it is enough to be stated that this date fell on a Sunday, and the appellant deposited the amount on the next day, that is, 1st June 1964. This act cannot be treated as default on the appellant's part in complying with the terms of the decree.

6. For the foregoing reasons I am of the view that the lower appellate Court did not correctly appreciate the legal position and acted erroneously in reversing the order of the executing Court. I would therefore accept this appeal and set aside the order of the District Judge and restore that of the executing Court made on 7‑12‑1965. However, each party is left to bear its own costs. A. E /S. A. H. Appeal accepted.