1989SCMR75 (PLP)

Mr. SA. Samad Khan, Advocate, the learned counsel for the appellant has on the jurisdictional aspect raised two material points. The first is that according to the law laid down by the Courts in this country even if such an exemption was validly granted and was enjoyed by the K.P.T. it could be availed of only where a relationship of landlord and tenant was established and the controversy had arisen between the K.P.T. and the tenant, and not, as in this case, between the lessee of the K.P.T. and the sub‑lessee of the lessee. In a case where the tenant of the K.P.T. was involved with sub‑tenant of his, and the K.P.T. was not a party to the relationship at all, the exemption granted to the property under section 3 of the Ordinance could be of no avail to either of the parties. The learned counsel has in this extent relied on the decisions in Abdus Salam v. Waheed‑ud‑Din (P L D 1963 Lah. 517), Assistant Registrar, Co‑operative Societies, Mirpurkhas v. Ch. Abdul Jabbar ( P L D 1966 Kar. 214) and Muhammad Nazir Ahmad v. The Lyallpur Improvement Trust, Lyallpur (1979 CLC170). The other contention of the learned counsel on the jurisdictional aspect of the case is that the exemption granted by the Government of Sind under section 3(2) of the Ordinance on its express words extends to premises belonging to K.P.T. and the property of the Central Government vesting in the K.P.T. does not fall in that category, i.e. of property belonging to K.P.T. In this connection reliance has been placed on Preamble of K.P.T. Act and its section 27(1)(ii) authorizing resumption without compensation. According to the learned counsel for the appellant, section 3 of the Ordinance is an exception to the law of the land and for that reason it should be construed strictly against the party claiming exemption. For this proposition the learned counsel for the appellant has relied on Duke of Devonshire and others v. O'Connor 24 Q B D 468 at 474), E.1.Ry., Calcutta v. Jat Ram‑Chandra Bhan (AIR 1928 Lah. 162 at 163), Assistant Registrar, Co‑operative Societies, Mirpurkhas v. Ch. Abdul Jabbar (P L, D 1906 Kar. 214) and Muhammad Nazir Ahmad v. The Lyallpur Improvement Trust, Lyallpur (1979 C L C 170). Section 3 of the Ordinance under which the exemption was granted is reproduced hereunder:‑‑ "

3. Applicability.‑‑(1) Notwithstanding anything contained in any law for the time being in force, all premises other than those owned or requisitioned under any law, by or on behalf of the Federal Government or Provincial Government, situated within an urban area, shall be subject to the provisions of this Ordinance: (2) Government may, by notification, exclude any class of premises, or all premises in any area from operation of all or any of the provisions of this Ordinance." The West Pakistan Urban Rent Restriction Ordinance, 1959 (hereinafter referred to as the predecessor Ordinance) had section 3 in the following words:‑‑ "

3. Government or an officer authorised by it in this behalf may direct by a notification published in the Gazette that all or any of the provisions of this Ordinance shall not apply to any particular building or rented land or any class of buildings or rented lands." The precedents cited by the learned counsel for the appellant relate to notifications of exemptions under section 3 of the predecessor Ordinance. The preamble to the predecessor Ordinance was in the following words:‑‑ "Preamble.‑‑Whereas it is expedient in the public interest to restrict the increase of rent of certain premises within the limits of Urban Areas and the eviction of tenants therefrom in the Province of West Pakistan;" The notification of exemption now under examination and under the Ordinance. has already been reproduced. The exemption under the Ordinance and the predecessor Ordinance could be granted and as in fact granted to the "premises", "building" or "rented land" and all these terms were defined in respective Ordinances. The common feature of all these definitions is that they all concern immovable property and what is important, none concerns the relationship or interest in such property. In other words the exemption and non‑exemption determines the status of the immovable property, that is as an exempted property or as a non‑exempted property. Neither the context nor the scope of the law, nor the express language of the provisions of section 3 leave any manner of doubt about what is exempted from the purview of the Ordinance. It is the property itself and not any particular relationship concerning it. Recourse to preamble where the language presents no problem is impermissible. It is interesting to examine briefly the history and the background of such a provision. In Halsbury's Laws of England Third Edition, Volume 23, page 721, the following narration of it appears:‑‑ "The Rent Restriction Acts are sometimes said to operate in rem or to impose a status on a house. Various propositions are said to flow from or illustrate this principle. Thus, the standard rent before 1957 was based on the rent at which the premises were let at a particular date, and this standard rent attached to the premises so that it was binding on all subsequent landlords and tenants of the premises. Another consequence said to flow from the proposition that the Act impose a status on the house is that if a tenant of controlled premises grants a sub‑tenancy to which the Acts do not apply, for example, for business purposes, the Acts cease to apply to the premises and the head tenant himself loses protection. Conversely, it has been held that if the head tenancy is outside the Acts, sub tenancies are also exempt from control." Again at page 755, ibid is the following narration:‑‑ "The Rent Restriction Acts do not bind the Crown and accordingly a letting by the Crown is not controlled. Further, it was held, on the principle that the Acts operate in rem, that a subletting by a tenant of the Crown was equally exempt from control." Finally at page 761, ibid, the following narration is of importance:‑‑ "The repealed provisions formerly exempting local authority houses from 1939 control were expressed to apply to the dwelling house. It was held, on the principle that the Rent Restriction Acts apply in rem, that sub‑tenants of such premises had no protection against their immediate landlords. The exemption from control now in force in the case of lettings by local authorities, development corporations, housing associations and housing trusts, applies to the tenancy and not to the house, and sub‑tenants, though they are not protected against the local authority in a case where the principal tenancy comes to an end, are not deprived of protection against their immediate landlord merely because the head landlord is a local authority, development corporation, housing association sir housing trust." In the United Kingdom in 1952, the Crown Lessees (Protection of Sub‑tenants) Act, 1952. was enacted. The very first section made special provision for bringing under Rent Control Acts the relationships of tenants and sub‑tenants, even in respect of exempted properties. The General Note contained in Halsbury's Statutes of England, 2nd Edition, Volume 32, at page 395, is in the following words:‑ 'The Rent Control Acts do not apply to any property owned by the Crown (Clark v. Downes (1931) 145 L.T. 20; Digest Supp.; Wirral Estates Ltd. v. Shaw (1932) 2 K.B. 247; Digest Supp.; Hobbs v. Weeks (1950), 100 L. JO 178(c), and on the basis that the Acts operate in rem and not in personam, this exemption has hitherto applied not only. in the case of a tenant holding direct from the Crown (Territorial Forces Association v. Philpot, (1947) 2 All E.R. 326; 2nd Digest Supp.), but also in the case of a sub‑tenant of such a tenant (Rudler v. Franks (1947) K.B. 530, 2nd Digest Supp.), so long as the property in question remained Crown property. The effect of this section is to give to sub‑tenants of premises in the ownership of the Crown or built on Crown land the benefit of the protection afforded by the Rent Control Acts as if there were in fact no Crown interest involved. Subsection (1) gives to all Crown tenants the benefit of those Acts, but by subsection (2) the provisions of the section are restricted to sub‑tenants or assignees from the Crown. By subsection (3) the right of the Crown to require the payment of a premium as a condition of the grant, renewal, continuance or assignment of a tenancy is preserved. In India, Bombay Rents, Hotel and Lodging House Rates Control Act, was in ‑ force; Section 4(1) whereof provided as follows:‑‑ "The Act shall not apply to any premises belonging to the Government or a local authority or apply as against the Government to any tenancy or other like relationship created by a grant from the Government in respect of premises taken on lease or requisitioned by the Government, but it shall apply in respect of premises let to the Government or a local authority." The Indian Supreme Court interpreting the first part of this provision in Messrs Bhatia Co‑operative Housing Society Limited v. D.C. Patel (A I R 1953 S C 16) held as follows:‑‑ "The conclusion is, therefore, irresistible that the Legislature did not by the first part intend to exempt the relationship of landlord and tenant but intended to confer on the premises belonging to Government immunity from the operation of the Act. This protection requires that the immunity should be held to attach to the premises itself and the benefit of it should be available not only to the Government or a local authority but also to the lessee deriving title from it." In order to nullify the effect of Indian Supreme Court judgment in Messrs Bhatia Co‑operative Housing Society Limited, at first an Ordinance and thereafter an Act was passed adding subsection (4)(a) in the Bombay Rents, Hotel and Lodging Housing Rates (Control) Act, to the following effect, noticed in Kanji Manji v. The Trustees of the Port of Bombay (A I R 1963 S C 468):‑‑ "(4) (a). The expression "premises belonging to the Government or a local authority" in subsection (1) shall, notwithstanding anything contained in the said subsection or in any judgment, decree or order of a Court, not include a building erected on any land held by any person from the Government or a local authority under the agreement of lease or other grant, although having regard to the provisions of such agreement, lease or grant the building so erected may belong or continue to belong to the Government or the .local authority, as the case may be; and (b) notwithstanding anything contained in.S.15 such person shall be entitled to create a tenancy in respect of such building or a part thereof." In Abdus Salam v. Waheed‑ud‑Din (P L D 1963 Lah. 517), Assistant Registrar, Co‑operative Societies, Mirpurkhas v. Ch. Abdul jabar (P L D 1966 Kar. 214) and Rahim Bakhsh v. Ch. Ahmad Bakhsh and others (P L D 1964 S C 189) properties which had been acquired by the Provincial Governments under section 3 of the Displaced Persons (Compensation and Rehabilitation) Act, were involved. It was contended that as neither the Federal nor the Provincial Governments were the lessors or the landlords, the exemption did not operate. The decision in Rahim Bakhsh's case proceeds on the following reasoning:‑‑ "The notification under section 3 of the Ordinance is apparently designed to cover only those properties which vest in the Central Government, absolutely, as owners. The Central Government in the present case is under a statutory duty to dispose of the properties for the purposes of the Act, by its transfer to claimants and others. Undoubtedly, certain rights have been conferred by and under the Act on the P.T.O.‑holder. Section 30 of the Act declares that persons in possession of any evacuee property and those who have been declared to be tenants occupying such property, from a certain date, would be deemed to be tenants of the transferee on the same terms and conditions as to payment of rent or otherwise, on which they held it immediately before the transfer. Moreover, paragraph 37 of the Settlement Scheme No. 1, framed under section 16(1)(b) and (c) of the Act, gives express right to lease out and mortgage the property, to a transferee. No doubt, he is not allowed to alienate the property otherwise and may even forfeit his right of possession if he fails to pay off the sums due to the Department. That however does not detract from the rights that he possesses so long as he observes the conditions of the transfer. It is not therefore correct to say that all rights in the property still vest in the Central Government and that consequently, the case is taken out, of the purview of the Ordinance, in pursuance of the notification issued under section 3 thereof." It will be seen that the Supreme Court denied the exemption not on the ground or for the reasons given by the High Court but on a different ground quite consistent with the language of section 3 of the predecessor Ordinance and the notification thereunder. No such restriction relatable to relationship between the parties, as was pointed out by the High Court, was made the basis of the decision. The contention of the learned counsel for the appellant with regard to the nature of vesting depends only on the preamble t6 the Act and section 27(1)(2) but the impression sought to be gathered from these is dispelled from very compulsive language used in the enacted part. For example, section 27 reads as hereunder:‑‑ "27.‑‑(1) The property specified in Schedule A shall vest in the Board: Provided that‑‑ (i) if any question arises between the Federal Government and the Board as to the boundaries of any portion of such property, Government may define and demarcate such boundaries, and the decision of Government in respect of such boundaries shall be conclusive. (ii) any portion of the land specified in the said schedule which shall be required by the Federal Government for a public purpose may be resumed by the Federal Government without clam to compensation on the part of the Board, except for buildings or other permanent structures erected thereon. (2) Nothing in clause (ii) of the proviso of subsection (1) shall apply to land reclaimed from harbour waters, and the Board shall be compensated for any improvements effected by it on any land resumed under that clause. (3) The railway now under construction between the Bander station and the Keamari station may be constructed by Government along the foreshare or on reclaimed land and any other work which the Federal Government, may consider necessary in the public interest may be excluded by Government in or upon any of the property specified in the said schedule, without claim to compensation on the part of the Board except for buildings or other permanent structures which it shall be necessary to clear away for the purposes of such railway or work." Schedule A, while describing the property in its title mentions as follows: "All the rights, title and interest of the Secretary of State for India in Council in the following lands, buildings, workshops, piers, break‑waters, groynes embankments, bridges, light‑houses, signal stations, jettey, quay, graving‑dock and railway‑lines, together with all the fittings and other appurtenances thereof (namely):‑‑" The Schedule being part of the Act will imply transfer of all rights, title and interest. The reservation contained in clause (ii) subsection (1) of section 27 is indeed of a different character than is in sub‑section (2), but that by itself is not of any consequence in the context, because even in subsection (2) it is not the cost of the reclaimed land which is liable to be paid but the compensation is for any improvements effected by it on any land resumed under that clause. The common feature of both is that no compensation is payable even for the re‑claimed land but it is payable for the structure and improvements in both. For this reason the property does come to vest in title in the K P T and belongs to it and the exemption covers the property as well as the structures on it and the exemption ensures for the sub‑tenants as well. There is no merit in the appeals and both are dismissed with costs. As the very jurisdiction of the Rent Controller has been found to be wanting, the questions raised on merits of the case have not been attended to in these appeals. M.Y.H./M‑602/S Appeals dismissed.