P L D 1980 Karachi 92 (PLP)

This second appeal under section 15(4) of the West Pakistan Urban Rent Restriction Ordinance, 1959 (hereinafter referred to as the Ordinance) is directed against the Order of ejectment passed by XVIf Civil Judge and Rent Controller, Karachi, against the present appellant, which was confirmed by II Additional District Judge in appeal. The relevant facts are as follows : The appellant is a tenant in one of the 8 shops built on Plot No. 1/396, Drigh Colony, Karachi. An agreement of tenancy existed between the appellant and the respondent allegedly executed on 3-11-1970. Accordingly to this agreement the rent of the shop was Rs. 60 per month payable by the 7th of every month. There was a clause in the agreement against damage to the property by the tenant as well as against subletting the same. An amount of Rs. 2,000 was deposited with the landlord as security. On 29th February, 1972, the respondent landlord brought an application for the ejectment of appellant on the ground that the tenancy agreement, having been executed for a period of 11 months, had expired and secondly, that the tenant had defaulted for the payment of rent since the month of October, 1971. The appellant in his written statement raised the preliminary objection that he was originally inducted into the shop as such by the respondent landlord, that originally it belonged to Ahmed Din from whom the present respondent had purchased the same, and because the respondent had not served the tenant with notice under section 13-A of the Ordinance, therefore, the application was not maintainable. On merits, it was claimed that the default inasmuch as the rent for the month of October, till January were tendered for each month in the presence of witnesses, but the landlord had refused to accept the same. Ultimately the tenant had remitted the rent for this period through money order dated 12-2-72 which again was refused. Consequently, the tenant had deposited the rent in Court in Application No. 387/72 with effect from 21-2-72. In alternate plea was raised that the deposit of Rs. 2000 was in the nature of an advance which was originally made with Ahmed Din, but which was undertaken by the present landlord to be repaid to the tenant. It was contended that this advance was to be adjusted towards rent. The learned Rent Controller struck a preliminary issue as regards the plea taken taken for the notice under section 13-A of the Ordinance and it was found that it was not necessary to send a notice and-.r that provision of law and that the Rent Controller had jurisdiction to try the dispute, On merits the following issues were framed (1) Whether the tenant has committee default in payment of rent? (2) If so, what is its effect? The learned Rent Controller came to the conclusion that the default was proved and that it was deliberate. The result was that the ejectment was ordered. In appeal before the District Court, in addition to the plea of default being not wilful, it was contended that the amount deposited was in the nature of an advance towards the rent. The learned District Judge found for a fact that default was wilful and as regards the amount of Rs. 2,000 he came to the conclusion, on the basis of the stipulations in the tenancy agreement, that it was in the nature of security and, therefore, could not be adjusted towards rent. The result was that the appeal was dismissed. Hence the present appeal. The learned counsel for the appellant has contended that the fact of the shop in dispute having been sold by Ahmed Din to the present landlord is admitted and, therefore, provisions of section 13-A would automatically come into play. He contends that the language of this section is identical, so far as the manner of giving a notice of transfer of property is concerned, with the one used in S. 30 of the Displaced Persons (Compensation and Rehabilitation) Act, 1958 and that the principles enunciated in Evan's case (1) would apply with full force to the facts of this case. The argument would have been accepted if there was no fresh agreement of tenancy between the new landlord and the tenant. In the present case, an agreement of tenancy dated 3-11-70 is not denied. In actual fact it is the terms of this agreement which are relied upon in other respects, by the appellant. In that event the contention, that the protection provided by S. 13-A will be available in the absence of proper notice, would not be tenable. The existence of tenancy agreement, arrived at between the new landlord and the tenant, after the sale of the property by Ahmed Din, indicates an intention of termination of old relationship of tenancy existing between the old parties; and establishment of a new relatiship between the new landlord and the existing tenant. This agreement has given a fresh start to the tenancy. If the parties wanted they could very well enter into fresh terms of tenancy. It is only in the) absence of an agreement of this nature, and where the new landlord wants to continue to accept the old tenant on old terms that a notice under section 13-Al would be necessary. The next contention raised is that the deposit of Rs. 200) should be deemed to be an advance towards rent. In this context there are difficulties in the way of the learned counsel for the appellant. The agreement has the following to say about this amount: "That the first party has given one shop bearing No. 8 to the IInd party on a monthly rent of Rs. 60 and 1st party has received Rs. two thousand from the 11nd party by way of security." The pleadings indicate that originally this amount was paid to Ahmed Din, the earlier owner of the shop in dispute. The new landlord of the property assumed responsibility for this amount. The nature of the amount has been clearly laid down in the tenancy agreement. Proper execution of this agreement is not denied. It is nowhere written in the agreement that this amount will be adjusted towards the payment of rent. On the other hand, the clear words used for this amount is `security'. A security is always given for due performance of a contract as contended by the learned counsel for the appellant himself. We have to see what were the obligations of the tenant arising out of this contract. Firstly, he was to pay regularly the monthly rent of Rs. 60 secondly, he was to desist from damaging the property, and finally, he was forbidden from subletting the premises in dispute. In the event the tenant was not following any of these conditions this amount was to be (1)P,LD1964SC536 utilised for compensating the landlord for the losses suffered by him. It cannot be argued that this amount in the event of default of payment of rent, was to be adjusted as rent. Default, as and when committed, would stand independent of the purposes for which the security is to be utilised.. The security, as said earlier, was to be utilised for compensation of loss arising out of non-payment of rent, and not for adjustment against the rent due. I am fortified in this 'B view by a ruling of the Lahore High Court, reported in Zubaida Begum v. Mumtaz Hussain, where it was held that a security is for ensuring that the terms of agreement were honoured and duly observed, and that it is not adjustable towards the rent. Another argument put forward in this behalf is that the agreement of tenancy between the parties was only for a period of 11 months which had admittedly expired before the alleged default was committed. In this event, according to the learned counsel, the provisions of section 106 of the Transfer of property Act would come into play and the tenancy would charge to the one from month to month. It is then argued that in such circumstances the security deposit would be converted into an advance towards the payment of rent. This is a very far fetched argument. The change in the nature off tenancy would not change the nature of the amount deposited as security.) This amount will remain security till either the tenancy comes to an end or the amount is utilised for the purpose for which it is deposited. The learned counsel for the appellant further contends that it is always discretionary with the Rent Controller to order ejectment even .in cases where default is proved. In this connection the learned counsel relies upon a string of rulings of this and other High Courts, and a couple of authorities of the Supreme Court. There is no dispute with the proposition that the Rent Controller has always the discretion not to order ejectment of a tenant, even where be comes to a finding that the tenant had defaulted in the payment of rent. But this discretion has to be exercised judicially. On of the grounds, accepted by the superior Courts, for the exercise of such discretion, is where the Rent Controller is satisfied that the default is not wilful. In the present case, therefore, the question would be if the default, which is admitted, was wilful or not. . The appellant has contend6d that he tendered the rent for the months of October, 1971 to January, 1972, in presense of witnesses. But he has failed to examine any of such witnesses, neither are they named. Subsequent tender of through money orders in February, 1972, does not amount to tender in terms of the law. It was the bounden duty of the tenant to tender rent for each month on the due date, which in the present case was to be done between the 1st and 7th of every month. In the event of refusal to. accept rent, tendered in person, the tenant was bound in law to tender it by money order either immediately after such refusal, .or soon after that date it was due to be paid. Delayed tender of rent in the month of February, 1972, would not amount to proper tender and any resultant default can be attributed entirely to the negligence of the tenant in this behalf. Such default would be termed as nothing else but wilful. In view of the foregoing discussion, I find no merit in this appeal and dismiss it with costs. The tenant shall place the landlord in possession of the shop in dispute within a period of two months. M, Y, M, Appeal dismissed.