1998 PLP 997 (CLC)

I propose to dispose of both the abovenoted appeals by this common judgment as facts and question of law involved are common. It is an admitted position that the appellant is the tenant of the respondent in respect of Shops Nos. 1 and 2 situated on the ground floor of the building known as Faran Building on Plot No.A‑8, Block 8, Pechs, Nursery, Karachi. The tenancy commenced by virtue of two identical tenancy agreements, dated 19‑4‑1983 in respect of the aforesaid two shops. The respondent filed Ejectment Case No.627 of 1987 in respect of Shop No. l and Rent Case No.628 of 1987 in respect of Shop No.2. The case of the respondent in the aforesaid two ejectment applications was that by virtue of rent agreement, dated 19‑4‑1983 the shop was rented out to the opponent at the rental of Rs.800 per month for each shop. The rate of rent was increased from May, 1986, from Rs.800 to Rs.1,

200. The opponent failed to pay or tender the monthly rent to the applicant‑landlord since 19‑4‑1983 and had also failed to pay the electric charges amounting to Rs.11,151 in respect of Shop No. l and Rs.25,561.25 in respect of Shop No.2. Further, it was alleged that the opponent‑tenant had been subletting the demised shops to various persons from time .to time. According to the lease agreement, the tenant had to pay security deposit amounting to Rs.1,50,000 in respect of each shop. It is alleged that the tenant paid Rs.50,000 less in respect of Shop No.2. The appellant‑tenant contested both the ejectment applications and filed written‑statement raising preliminary objection that the Rent Controller had no jurisdiction as the premises was a part of hotel known as Faran Hotel. On merits, the appellant‑tenant admitted the tenancy agreement and the rate of rent being Rs.800 per month. He denied that the rent was enhanced from Rs.800 to Rs.1200 per month from May, 1986. It was further stated by the tenant that he had paid a sum of Rs.1,50,000 as deposit at the time of handing over the vacant possession of the shop as provided in clause 2 of the lease agreement, dated 19‑4‑1983. It was further alleged that in the month of May, 1983 he had paid a sum of Rs.40,000 to the Manager of Hotel Faran namely, Mr. Kazi, who had issued the receipt for the said amount. The opponent/ appellant had paid the same amount for the other shop as well and the said amount covered the up‑to‑date period of rent. He also denied that the electric charges as alleged were due and payable by him. According to him, the electric charges has been paid by the tenant to the applicant only twice when the same were demanded vide receipts, dated 23‑12‑1985 and 17‑5‑1987. The further contention was that the landlord could not raise question of default when the security deposit of Rs.1,50,000 was lying with him. The allegation of sub- tenancy was also denied by him by stating that he is in possession of the premises and he is doing his own business and has not parted with the possession of the premises in question to anybody else. On behalf of the landlord‑respondent, he himself filed his affidavit‑in‑evidence while on behalf of the appellant‑tenant, he filed his affidavit and affidavits of two witnesses namely, Najam Ussaqib Mufti and Aleemuddin son of Badeeuddin. The learned Rent Controller framed the following points for determination:‑‑‑ "(1) Whether the opponent has committed a wilful default in payment of rent? (2) Whether the tenant has sub‑let the demised premises to any third party without consent of the applicant? (3) What should the order be?" After hearing the arguments, the Rent Controller decided both the issues in the affirmative and allowed both the ejectment applications by a common judgment with further direction that the ejectment order will be executable after refund of security of Rs.2,50,000 after adjustment of the outstanding rent of electric charges as determined in this judgment. I have heard Mr. Talamiz S. Burney, Advocate for the appellant and M/s. Ali Akbar and Anwar Hussain, Advocate for the respondent. The learned counsel appearing for the appellant raised a preliminary objection that the Rent Controller had no jurisdiction as the premises was a part of the hotel. This objection was raised before the Rent Controller and as a preliminary issue it was decided by the Rent Controller before proceeding further with the case holding that he had the jurisdiction to try the case. In this case, it is an admitted position that the premises were let out to the appellant as "shops" and it is the case of the appellant that he has been running his business in the shop. The shop in question was never used as a hotel nor it was let out as a hotel as such this contention of the learned counsel has no force and is repelled and I hold that the Rent Controller had the jurisdiction to try the ejectment case. The appellant's counsel further contended that through the two receipts Exhs.0/1 and 0/2 for Rs.40,000 each, the appellant had paid the rent to the Manager of Faran Hotel. If these amounts were adjusted then there was no default. He further contended that under two receipts (Exhs. 0/3 and 0/4) he had paid the electricity charges. The record shows that the respondent‑landlord, when confronted with these four receipts in his cross‑examination, he stated that these receipts are forged and the appellant‑tenant never paid these amounts to him. In cross‑examination, he further stated that General Manager of the Faran Hotel, namely Mr. Kazi had not issued these receipts. In cross‑examination, he further stated:‑‑‑

"It is incorrect to suggest that General Manager Mr. Kazi was dealing with the tenants and that I was not dealing with the tenants. It is incorrect to suggest that Mr. Kazi used to receive the rent from the tenants. I am shown four receipts two of which are, dated 7th May, 1983 for Rs.40,000 each, one receipt is, dated 3‑12‑1985 for Rs.6,850 and other receipt, dated 17‑5‑1987 is for Rs.5,

230. All these receipts have been fabricated by the opponent. It is incorrect to suggest that Exhs.0/1 to 0/4 bear the signature of our Manager Mr. Kazi." The respondent‑landlord produced a letter written by the appellant/ tenant to him, dated 5‑10‑1983 as Exh.A/13. The appellant admitted this letter as having been signed by him. According to the appellant, by paying Rs.40,000 he has paid rent in advance for four years and two months. The letter, dated 5‑10‑1983 written by the appellant is silent about the payment of advance rent of four years and two months. The question arises that if the appellant would have paid the rent amounting to Rs.40,000 then why he did not mention the same in his letter, dated 5‑10‑1983. The explanation of the appellant was that at the instance of the respondent he wrote this letter. The appellant mentioned in the said letter that he paid a sum of Rs.2,50,000 to the respondent as Security deposit and that he wants to surrender the tenancy and demanded refund of security deposit. It is not believable that the appellant was ready to surrender the tenancy on refund of Rs.2,50,000 the amount of security deposit and foregoing the advance rent paid by him through two receipts Exhs.0‑/1 and 0/2 amounting to Rs.80,

000. It is pertinent to note that the appellant's counsel has filed a Miscellaneous Application bearing Civil Miscellaneous Application No.351 of 1993 under section 21(3) of the Sindh Rented Premises Ordinance, 1979. Arguing the said application, the learned counsel contended that the appellant paid Rs.40,000 on 12‑4‑1983 and also paid a slim of Rs.6,850 towards the electricity bills. Both the aforesaid receipts were issued by the cashier of the respondent on the letter head of the hotel. According to the learned counsel, the burden to prove that the said receipts were forged was shifted upon the respondent. The appellant in his application prayed that "this Hon'ble Court be pleased after perusing the record of the case, to direct further iniquity in the matter or pass such order as this Hon'ble Court may deem fit in the circumstances of the case." The respondent filed counter‑affidavit to which an affidavit‑in‑rejoinder has also been filed. In the counter‑affidavit, the respondent denied having received the amounts as alleged by, the appellant vide the receipt filed by him. The respondent also stated in the counter‑affidavit that the receipt: produced by the appellant are forged, printed and fabricated by appellant and the same do not bear the signature of the then Manager and cashier nor have been signed by them. It is not correct as alleged by the appellant's counsel that the burden was upon the respondent to disprove the receipts. The appellant had filed these receipts and the burden to prove the same lay upon the appellant to prove the genuineness of these receipts. The appellant did not file any application before the Rent Controller to summon the person who according to him, had signed the receipts. Subsection (3) of section 21 of Sindh Rented Premises Ordinance is re‑produced as under:‑‑‑

"The appellate authority shall, after perusing the record of the case and giving the parties an opportunity of being heard and, if necessary, after making such further inquiry either by himself or by the Controller, make an appropriate order which shall be final. " According to this provision of law, any further inquiry could be made only if the appellate authority after perusing the record of the case and giving the parties an opportunity of being heard, feels that such further inquiry is necessary. Considering the facts of the case and the evidence already led by the respective parties who had full opportunity to lead their respective evidence before the Trial Court, I do not find any necessity in this case for making any further inquiry. The appellant had full opportunity to lead evidence before the Trial Court and now he cannot be allowed to fill up the lacuna and weakness of his case for not producing sufficient evidence to prove the alleged receipts as such the Miscellaneous Application is dismissed. In view of the above discussion, the findings of Rent Controller on Issue No. l are upheld. With regard to Issue No.2, the respondent‑landlord in ejectment application stated that the opponent has been subletting the premises to other persons on rent without written consent of the applicant. In evidence he stated that Shop No. l has been handed over to Delsec (Pvt.) Ltd. and Shop No. 2 to Pinger Travels (Pvt.) Ltd. before the filing of the cases and now again the Shop No. l has been handed over to "Property Board Co. (Pvt.) Limited and Shop No.2 to Saad Travels (Pvt.) Ltd." It is stated in the affidavit‑in‑evidence that the shops were, by two separate agreements, let out to the appellant and not to any firm or limited company. He has filed photographs of the shops showing the names Delsec (Pvt.) Ltd. and Pingar Travels (Pvt.) Ltd. and other photographs of the shops showing the name of Property Board and Saad Travels (Pvt.) Ltd. The appellant in his affidavit in evidence stated that:‑‑‑

"I am doing the business of Travel Agency for which I had got registered a Company known as Pingar Travels Ltd., in the year 1985. 1 was a Director in the said Company and later on I had become the Chairman of the said Company. The said Company was closed by me in the year 1989 and thereafter I started the business of Estate Agency in the name of 'Property Board' of which I am the proprietor. A copy of the Memorandum and Article of Association of Pingar Travels (Private) Ltd. has also been filed." In cross‑examination, the appellant stated:‑‑‑ "I am shown photographs Exh.A/2 they are the photographs of both the shops. I am shown photograph A/3, the photograph of Shop No. l . It is correct, while another photograph does not pertain to Shop No.2. In the year 1983 when I had taken both the shops on rent I had an intention to start the business in the name and style of Zakaria Travels. This Company was never formed. It is a fact that in the year 1985 we started business in Shop No.2 in the name and style of Pingar Travel (Pvt.) Limited. In the year 1986 I was agent Delsec (Pvt.) Ltd. in Shop No.

1. It is not mentioned in the Sign Board that I had agency of Delsec (Pvt.) Ltd." ' He further stated in cross‑examination that:‑‑‑ "It is incorrect to suggest that at present in Shop No.2 Saad Travels (Pvt.) Ltd. is functioning." It is admitted that shops were let out to the appellant in his personal name. It is also admitted that the shops were handed over to Pingar Travels (Pvt.) Ltd. and Delsec (Pvt.) Limited, which comprised of 9 directors alongwith the applicant and his wife. It is proved on record that the lease hold rights of the shops were assigned to the private limited companies which had separate legal entity which clearly proves that in the present case there was subletting and assignment of lease hold rights without the permission of the respondent /landlord. It has been observed by the Hon'ble Supreme Court in case of Manek J. Mobed and another v. Shah Behram and others reported in PLD 1974 SC page 351 that 'if a person obtains lease hold rights in his own name and subsequently assigns them to a firm or to a private limited company consisting of his family members it cannot be said that no change has taken place in the status of the tenant or that it is not a case of subletting or assignment of lease hold rights'. In another case reported in PLD 1982 SC page 79 (Messrs Premier Mercantile Service and another v. S.M. Younus and 2 others) it was observed that:‑‑‑ "We agree with the learned counsel for the petitioners that it is necessary and appropriate in certain cases to lift the veil of incorporation with a view to find out the true state of affairs and to determine the rights and liabilities of the parties. Nonetheless on doing so in this case we find that the result is not to the advantage of the petitioners. A distinct legal entity different from the firm had come into existence. It was so whether the veil of incorporation was lifted or not. Such a legal entity had an altogether different rights and liabilities with respect to third parties including the landlords. Such a change could not be unilaterally brought about by the tenants so as to transform their very legal existence in a manner to effect their liability. The landlords could object. They could make it a ground for proceedings under the Rent laws. Such a tenant as had permitted itself to be dissolved and then effaced and substituted by a different legal entity could be ejected for this act alone, having not taken the landlord into confidence. " The Rent Controller decided issue with regard to sub‑tenancy, considering the facts, circumstances and the law as such it does not require any interference by this Court. The last contention of appellant's counsel was that the order passed by the Rent Controller is bad as the alleged sub‑tenants were not made party to the proceedings and that they were necessary party. He relied upon PLD 1957 Karachi page 790 (Ahmed Ali Noorbhoy v. Sakhawat Hussain). The facts and the law discussed in the reported case do not apply to the case in hand. In the reported case sections 2(7) and 10 of Karachi Rent Restriction Act and section 18 of the Karachi Small Causes Court Act were under consideration. The definition of tenant in section 2(7) of the Karachi Rent Restriction Act included"‑‑‑every person from time to time deriving title under a tenant‑‑ "whereas this is not the position under the Sindh Rented Premises Ordinance of 1979. The aforesaid words do not find place in the definition of "Tenant" in the present rent Ordinance. In view of the above, the aforesaid case decided under the Karachi Rent Restriction Act, does not apply to the present case which is governed under the previsions of the Sindh Rented Premises Ordinance. For the foregoing reasons, I see no merits in the appeals as such both the appeals ate dismissed. However, the appellant is granted sixty days' time from the date of the judgment to vacate the shops and hand over vacant possession to the respondent subject to refund of security deposit of Rs.2,50,000 as ordered by the Rent Controller. A.A./Z‑26/K Appeals dismissed.