1986 PLP 872 (CLC)

"The parties of the above noted appeal have compromised the appeal on the following terms:‑ (1) That the appellant undertakes to re‑induct the respondents the new building sought to be constructed in place of the existing building in accordance with subsection (5‑B) of section 13, of West Pakistan Urban Rent Restriction Ordinance No. VI of 1959 as it stands today. The respondents shall vacate the premises in their occupation by 31‑7‑1968. It is further prayed by the parties that the decree be passed in the terms of the compromise mentioned above, and the appeal may be disposed of accordingly with no order as to costs. Karachi: Sd/‑ M. Shahabuddin. Dated 23rd February, 1968. Attorney of the appellant Sd/‑Tanzilur Rehman, Advocate for the Sd/‑A. Rehman Appellant. M.A. Rehman Attorney of the Respondents Sd/‑S.J. Alam Advocate for Respondents". The Court then passed the following order on 23‑2‑1968:‑ "Parties have filed an application compromising the disputes in the present matter, with the request that the appeal be disposed of in terms of this compromise. The application is accepted and it is directed that the appeal stands disposed of in terms of the compromise. No order as costs." Muhammad Aslam alongwith other tenants filed an application under section 13(5‑B) on 15‑6‑1973. It was alleged that the respondent has constructed new tenements on the ground floor and on first floor and other tenements are being constructed on other floors, but it has not given possession to them in the new building in terms of the order passed by the Court. This appeal has been filed only by Muhammad Aslam and, therefore, I will mention the facts relating to him alone. The appellant Muhammad Aslam was occupying two tenements bearing Nos. 3 and

4. On the ground floor tenement he had a shop and on the first floor tenement he had a flat. The total area in his occupation was 3400 sq.ft. The respondent filed its written statement on 19‑9‑1973 in which it was pleaded that the application is premature. It was denied that the construction work was delayed for more than two years with mala fide intentions, and that the construction was in progress. It was further pleaded that the respondent never refused to reinduct the appellant in accordance with the compromise between the parties and that no floor including the ground floor was complete and the tenements on the ground floor which are completed are not in a position to be delivered to the appellant. It was further stated that a suit bearing No. 890/70 filed by the appellant was pending in the Court of 15th Civil Judge, where the respondent has given an undertaking not to transfer the tenements for which the appellant is entitled and in view of such undertaking the application under section 13 (5‑B) has become infructuous. It was pleaded that as the respondent has never refused to hand over the possession of the building to the appellant, the application should be dismissed. The learned Controller after recording the evidence, by the impugned order, dated 9‑3‑1981 dismissed the application. The evidence was recorded in the year 1980‑81 and it was asserted that the respondent has sold out most of the tenements on ownership basis and no portion of the building was vacant. It was also stated in evidence that the respondent is not the owner of the building. The real owner is Abdul Majid & Sons Ltd. The Rent Controller took the view that the initial burden was on the appellant to prove that some of the tenements on the ground floor and first floor are lying vacant and ready to be delivered, but this burden has not been discharged. It was further observed that the nature and character, as well as size, area and dimension of the new tenements are quite different than the tenements of the old building, and as the appellant has failed to prove that any shop is lying vacant in the new building, he cannot be reinducted. The impugned order was pronounced on 9‑3‑1981 and after obtaining the copy of 18‑3‑1981, the appeal was filed on 11‑4‑1981. On 31‑5‑1981 while admitting the appeal the respondent was ordered to maintain status quo and not to "let out any premises if any lying vacant". The appellant's application for restraining the respondent from transferring the property came up for hearing on 20‑9‑1981 when the Nazir was ordered to inspect the premises and "find out whether they are lying vacant or occupied and if they are occupied by whom". On 3‑1‑1983 Nazir's report was considered in which he had given a list of shops and flats which were occupied or were locked without any sign board or were vacant. The Shop No. 1 on the ground floor was found in possession of the respondent. Flat No. 5 on the fourth floor was also found vacant. In these circumstances the following order was passed:‑ "Adinterim order in the case was passed on 31‑5‑1981 an,' thereafter Nazir was appointed to inspect the premises and submit his report which was submitted on 14‑10‑1981. According to the report of Nazir some of the shops on the ground floor were found locked while other were found to be in possession of several persons whose names are mentioned in the report. It is also stated in the above report of Nazir that at the time of inspection several flats on fourth floor were found to be under construction and un‑occupied. The learned counsel for the appellant contends that the Shop No. 1 on the ground floor is in possession of the landlord and they may be restrained from transferring the shop until disposal of the appeal. Similarly the appellant requests that Flat No. B‑5 on the fourth floor may also be directed not to be parted with or disposed of until further order of this Court. With regard to Shop No. 1 on the ground floor, the Nazir's report states that it is in possession of Moin Mineral Products, owned by Abdul Wahid. Learned counsel contends that Abdul Wahid is one of the owners of the building and this fact is not disputed. Similarly, according to the report of Nazir, Flat No. B‑5, was under construction at the time of inspection by the Nazir and was unoccupied. In these circumstances, I direct that until decision of this appeal, the respondent shall not part with the possession of Shop No. 1 on the ground floor and Flat No. B‑5 on the fourth floor, nor will transfer or create any incumberances thereon in any manner. The injunction application is accordingly disposed of in the terms stated above." Mr. Mustafa Siddiqui the learned counsel for the appellant has contended that as the respondent is legally bound to reinduct the appellant in one shop and one flat in terms of section 13(5‑B) and a; one shop and one flat are still available the appellant should have beer inducted in the same. The main contention of the learned counsel for the respondent is that the Controller has to see the need of the tenant while accommodating in the new building, and there is no absolute obligation on the landlord to accommodate such tenant in an unqualified manner. The Controller according to the learned counsel for the respondent can induct only if the need of the tenant is established. Section 13(5‑B) reads as follows:‑ "13. (5‑B). Where, in pursuance of an order under clause (vi) of subsection (2), a landlord has obtained possession of a building (in this subsection referred to as the old building), and constructs a new building on the same site, the tenant who was evicted from the old building may, before the completion of the new building and its occupation by another person, apply to the Controller for an order directing that he be put in possession of such area in the new building as does not exceed the area of the old building of which he was in occupation, and the Controller shall make an order accordingly in respect of the area applied for or such smaller area, as considering the location and type of the new building and the needs of the tenant, he deems just, and on payment of rent to be determined by him on the basis of rent of similar accommodation in the locality." The right of a tenant to obtain possession in the newly constructed building as contemplated by this section is absolute. The only discretion left with the Controller is that by looking into the nature of building, the area available, the location and type of the new building, he may make adjustment in respect of the area to be allocated to the tenant and to give him even lesser or an area which should not exceed the area which had been in his occupation and fix the rent. The Controller is not required to determine whether the tenant requires the premises in the new building. The right to occupy or to be inducted in the newly constructed building is not subject to any inquiry as suggested by the learned counsel for the respondent. The investigation is limited for making such adjustments as may be necessary for the purposes of allocating lesser or similar area to the tenant. In the present case in the written statement filed by the respondent it has not been stated anywhere that the appellant does not need the premises. Such plea was, introduced in the evidence and raised during arguments. Even if this plea would have been raised in the written statement it was not tenable in law. It was pleaded by the respondent that offer was made to the appellant, but it was refused because he was not interested. No cogent evidence to establish this fact has been produced on record. In fact this plea of not being interested is completely contrary to the plea raised in the written statement, because according to the respondent the application was premature and delivery of the shop at that time could not be given. The respondent has not led any evidence to prove that the offer was made and not accepted by the appellant as he was not interested in it. This is a dishonest plea raised merely to deprive the appellant of his right. The plea that the appellant was not interested because he has taken a shop, and therefore, he does not need the shop in the newly constructed building seems to be a concocted story. No doubt the appellant has purchased the shop where he is carrying on his business but this fact by itself does not mean that he does not require a shop in the new building or has given up his right to occupy or being inducted in the building. The order of ejectment was passed as far back as in the year 1968, and the respondent admittedly did not start construction for more than two years. In the year 1973 when the application was made only a part of the ground floor and first floor, were constructed. In the circumstances a person who has been uprooted from his business on the assurance that he would be reinducted in the new building cannot be expected to sit idle, deprived of his livelihood in the hope that in the new building a shop will be given to him, and then he will start his business. For his living and maintenance it was necessary for the appellant to carry on business. In these circumstances, I do not find any force in the contention of the learned counsel for the appellant. If his contention is accepted, then perhaps no tenant can be inducted in the newly constructed building as during the period when the building is under construction, the tenant will have to make some provision for his business or living. The learned counsel also pointed out that the real owners of the building are Abdul Majeed & Sons Ltd. and not A. Majeed and Sons, a partnership firm which is the respondent and had obtained ejectment order. No document has been produced to show in what manner the limited company was incorporated. However, in his evidence the respondent has stated that all the partners of the firm are the Directors of the newly incorporated Company, which is the owner of the premises. It, therefore, seems clear that the partners of the respondent firm have converted themselves into a limited Company and want to take advantage of this change for their own benefit. Such a conversion is intended to deprive the tenants of their vested right, frustrate the order of the Court and to wriggle out of the commitments. The incorporation of the Company lacks bona fides, and cannot be allowed to perpetuate in complete disregard of the undertaking given by the respondent, and also flout the orders of the Courts passed from time to time. In such circumstances, the Court is empowered to tear the veil of incorporation and see the real thing behind the scene. It is obvious that it is merely a change of name, but the persons behind the scene are the same. Even otherwise the respondent has not produced any documents on what terms and conditions the ownership was transferred to the said Company. The existence of the said Company in the manner as adopted by the respondent cannot defeat the right of the appellant. The right of the appellant is vested in the property by virtue of law and the commitment made by the respondent from time to time before the Court, and such right cannot be defeated merely by transferring the property in its own name under the style of a limited Company. Such incorporation if properly investigated would amount to fraud upon the statute, order of the Court, and the tenant, and cannot deprive the appellant of his rights. Section 13(5‑B) was considered in several authorities of the Supreme Court. However, reference can be made to Zoiab and 5 others v. Akbar Hussain 1983 S C M R 391:‑ "It was an appeal filed against the judgment of the Sind High Court reported in 1981 C L C

592. In this case the tenant had vacated a shop on the front side on an agreed arrangement that he will be put in possession of a shop in the new building. A reasonable premises was available in which tenant could have been fairly and justly accommodated but the landlord manoeuvred in such a way as to gain advantage for himself. Therefore, the High Court did not allow the landlord to occupy the front portion and given the back portion to the tenant who was a shopkeeper. The Supreme Court upheld the judgment and it was observed as follows: ‑ "There can be no cavil against the dictum laid down in the case of Abdul Bari, Abdul Marian and Ghulam Nabi cited by the learned counsel, that the landlord is in no way required by law to reconstruct the new building so as to provide the evicted tenant exactly the same type of building or accommodation as occupied by him earlier or in any way to keep his needs into consideration. However, as pointed out in Ghulam Haider's case, the landlord is required to take into consideration the rights conferred by subsection (5‑B) of section 13 of the Ordinance on the tenant so that the new construction is capable of accommodating the tenant. Subject to this restriction the landlord is free in the matter of nature and type of construction for the purpose of new building." In Ghulam Haider v. Muhammad Haji, 1979 S C M R 396, the tenant who was occupying a shop in the old building measuring 11 x 13 on the ground floor having failed to obtain re‑instatement applied under section 13 (5‑B). The Controller ordered that the tenant be put in possession of one of the shops equal in area to his previous shop. The landlord contended that if this area is separated the remaining area of 70 sq. ft. would be unsuitable for commercial purpose. It was held as follows‑‑ "Now by advancing this contention the learned counsel seems to have raised a moral than a legal question. The petitioner should have realized, that ignorance of law is no excuse, that under section 13(5‑B) of the Ordinance, late Muhammad Siddique who was his tenant in the old shop since 1914, would have naturally expected to be put into possession of the new shop constructed on the old site or else of the corresponding area in any other shop. In this view of the matter he should have either constructed a new shop of the same size or else big enough which would have been conveniently partitioned so that both the portions of it could be used as a feasible commercial enterprise." It is, therefore, clear that while reconstructing the building, the landlord has to keep in view the fact that tenants who had been in the old building are to be accommodated. If the new building does not change its character and similar premises in nature as occupied by the tenant are constructed the tenants having right under section 13(5‑B) are entitled to be justly and fairly accommodated in the new building. The respondent has constructed shops and flats and nature of the building has not been changed. The observation of the learned Controller in this regard is without any basis. In the present case from the year 1968 till the evidence was recorded in the year 1981 in proceedings instituted under section 13(5‑B) the respondent did not deny the right of the appellant to be inducted in the premises. It was only, when the application was filed that he objected on the ground that it was premature. The respondent was bound to deliver to the appellant a shop on the ground floor and a flat on the upper floor which he is entitled to get. The responder dishonest means tried to avoid the execution of the order and wriggle out of his own commitment. This is clear case where the respondent has purposely delayed the Proceedings and construction and disposed of building merely to deprive the appellant of his right and to frustrate the order of the Court. The respondent could not have not have sold away, transferred or rented out the premises in the new building in complete disregard of the appellant's right. If at all the respondent was keen to sell the new premises, it should have been done subject to the right of the appellant The admitted position emerging from the orders dated, 31‑5‑1981 and 3‑4‑1983 is that shop No. 1 on the ground floor of the new building is in possession of the respondent who in its words are A. Majeed 6 Sons Ltd., and flat No. B‑5 on the fourth floor of the new building is vacant. As observed earlier the change of the name will not change the liability which was cast on the respondent. In fact if during the pendency of the ejectment case such a change has been made, the transferee is liable to honour the commitment made by the transferor as he steps in the shoes of the landlord. Therefore, the impugned order of the learned Rent Controller is set aside. The appellant should be put in possession of shop No, 1 on the ground floor and flat No. B‑5 on the fourth floor of the new building forthwith. The respondent has not produced any evidence necessary for determination of rent of the shop and flat. In these circumstances, the case is remanded to the Controller to determine the rent of Shop No. 4 on the ground floor and flat No. B‑5 on the fourth floor of the building. The appellant shall, however, be put in possession of the Shop No.1 and flat No. B‑5 forthwith and shall start paying rent to the respondent, after it has been determined by the Controller. However, to safeguard the interest of the respondent, the appellant is directed to deposit in Court within four weeks which will be adjusted towards the rent according to the rate determined by the Controller. The learned Controller, is directed to dispose of the matter within three months. A progress report in the matter should be sent to this Court every month. The appeal is allowed.