1987 PLP 2149 (MLD)

(2) That the learned Controller has gravely erred in law to hold that mere intimation of change of ownership is sufficient to hold in case of non-payment. On the other hand Mr.Rehmat Elahi the learned counsel for the respondents, has submitted that notice is not necessary. The learned counsel further contends that the property has only been vested and only the management has been changed. It is an admitted position that National Shipping Corporation was the owner of Muhammadi House I.I.Chundrigar Road, Karachi and the said Corporation let out room No.605 of the said building to the appellants at the monthly rent of Rs.610.08. Pakistan National Shipping Corporation Ordinance, 1979 was promulgated on 29-3-1979. By virtue of this Ordinance the National Shipping Corporation and the Pakistan Shipping Corporation were amalgamated and now Corporation to be called the Pakistan National Shipping Corporation was established. This Ordinance was given retrospective effect from 1st of January 1979. It is advantageous to reproduce the relevant Sections 4, 5 and 7 of the Act which are reproduced below:

"4 . Dissolution and amalgamation of N . S . C . and P . S . C . -Notwithstanding anything contained in the National Shipping Corporation Ordinance, 1963 (IV of 1963) , or the Pakistan Shipping Corporation Act, 1976 (LIV of 1976), or in any other law for the time being in force, the two Corporations respectively established under the said Ordinance and Act, shall, as at the close of the thirty-first day of December, 1978, stand dissolved and shall be amalgamated in accordance with the provisions of this Ordinance."

5. Establishment and incorporation of Pakistan N.S.C. (1) As from the first day of January, 1979, there shall be established by virtue of this Ordinance a new Corporation, to be called Pakistan National Shipping Corporation, (2) the Corporation shall be a body corporate having perpetual succession and a common seal, with power, subject to the provisions of this Ordinance, to acquire, hold and dispose of property, both movable and immovable, and shall by the name assigned to it by subsection (1) sue and be sued."

7. Transfer and vesting of N.S..C. and P.S.C. (1) On and from the first day of January, 1979 the entire undertakings of N.S.C. and P.S.C. shall stand transferred to and vest in the Corporation. (2) the undertakings transferred and vested by subsection (1) shall include all assets, rights, powers, authorities and privileges and all property, movable and immovable, including lands, works, workshops, ships and crafts, by whatever name called, all vehicles, cash balances reserve funds, shares and other investment and book-debts, and all other rights and interests arising out of such property as were immediately before the aforesaid day in the ownership, possession or power of N.S.C. or P. S. C. in relation to their respective undertakings, whether in or outside Pakistan and all books of account and documents relating thereto, and all borrowings, liabilities and obligations of whatever kind then subsisting of N. S. C. ox P. S. C. in relation to such undertakings. (3) subject to the other provisions of this Ordinance all contracts and working arrangements subsisting immediately before the aforesaid day as affecting N.S.C. or P.S.C. shall, in so far as they relate to their undertakings cease as from that day to have effect or to be enforceable against them shall be enforceable and of effect against or in favour of the Corporation, as if instead of N.S.C. or P.S.C. the corporation had been named therein. (4) subject to the other provisions of this Ordinance, any proceedings of cause of action pending or existing immediately before the aforesaid date by or against N.S.C. or P.S.C. in relation to their respective undertakings, may as from the aforesaid day, he continued by or against the corporation as it might have been continued or enforced by or against them as if this Ordinance had not been in operation. (5) subject to the other provisions of this Ordinance and the rules and regulations of this, all officers, consultants, advisers and other employees of N.S.C. and P. S.C. shall, notwithstanding- anything contained in any law or in any agreement, deed, document or other instrument, stand transferred to the corporation, and shall be deemed to have been appointed or engaged by the Corporation in accordance with the terms and conditions of service applicable to them immediately before the aforesaid day; and no officer, consultant, adviser or other employee whose services are so transferred shall be entitled to any compensation because of transfer." Section 5 provides that as from the first day of January 1979, there shall be established by virtue of this Ordinance a new Corporation, to be called the Pakistan National Shipping Corporation. Subsection (1) of Section 6 provides that it shall be the function of the Corporation to assume full and effective control of the entire undertakings of N . S. C . and P. S. C . as transferred in it by section

6. Subsection (1) of section 7 provides that undertakings of N.S.C. and P.S.C, shall stand transferred to and vested in the Corporation. Subsection (2) provides that the undertakings transferred and vested by subsection (1) shall include all assets, rights, powers, authorities and privileges and all property movable and immovable, including lands etc. It will be seen that even though under subsection (1) of section 7 , the entire undertakings of N . S. C . and P . S. C , shall stand transferred to and vested in Corporation, yet subsection (2) of section 7 makes it clear that the provisions of this Ordinance and the vesting of the undertakings shall include all assets, rights, powers, authorities anal privileges and all property movable and immovable, including lands, works, workshops, ships and crafts, by whatever name called, all vehicles, cash balances, reserve funds, shares and other investments and book debts, and all other rights and interests arising out of such property as same, immediately before the aforesaid day in, the ownership, possession or power of N.S.C. or P.S.C. in relation to their respective undertakings, whether in or outside Pakistan and all books of account and documents relating thereto, and all borrowings, liabilities and obligations of whatever kind then subsisting of N.S.C. or P.S.C. in relation to such undertakings. Subsection (3) provides that all contracts and working arrangements subsisting immediately before the aforesaid day as affecting N.S. C. and P.S. C. shall in so far as they relate to their undertakings, cease as from the 1st day to have effect or to be enforceable against them, and shall be enforceable and of effect against or in favour of the Corporation, as if instead of N . S. C . or P. S. C . the Corporation had been named therein. In the present case, the Ordinance contemplates that N.S.C. and P.S.C. that is, both the undertakings stand dissolved with effect from 1st day of January, 1979 and the entire undertakings shall stand transferred to and vested in the Corporation. Both the companies ceased to exist with effect from 1st day of January, 1979 and both the undertaking stood transferred to and vested in the new corporation. The finding of the learned Controller is that there was no change of ownership of the property in dispute from N . S. C . to P.N,S.C. and it was merely a statutory change in the management of the Corporation and as such there was no change of the property in dispute in favour of any person. This view of the Controller is based on a misconceived notion of law. The word 'undertakings' is inserted, I think, in order to make it plain that the business will be transferred as a going concern. It seems to me that the intention of the legislature in enacting the said Ordinance was to dissolve N.S.C. and P.S.C. and amalgamate in accordance with the provisions of the Ordinance. In re South African Supply and Cold Storage Company (1904) 2 Ch.268, Bucklay, J. interpreted word 'Amalgamation': "Now what is an amalgamation? An Amalgamation involves, I think, a different idea. There you must have the rolling, somehow or other of two concerns into one. You must mould two things together and arrive at an amalgam-a blending of two undertakings. It does not necessarily follow that the whole of the two undertakings should pass--substantially they must pass--nor need all the corporators be parties, although substantially all must be parties. The difference between reconstruction and amalgamation is that in the latter is involved the blending of two concerns one with the other, but not merely the continuance of one concern. An amalgamation may take place, it seems to me, either by the transfer of undertakings A and B to a new Corporation C, or by the continuance of A and B by B upon terms that the share-holders of A shall become shareholders in B. It is not necessary that you should have a new company. You may have a continuance of one of the two companies upon the terms that the undertakings of both corporations shall substantially be merged in one corporation only." I am, therefore, of the view that the Minding was not at all justified. I do not agree with the contention of the learned counsel for the respondent, that the respondent Corporation did not take over the rights and liabilities of the N : S. C . The case reported in 1979 C L C -913 and cited by the learned counsel is distinguishable. In the present case both the undertakings dissolved with effect from 1-1-1979 and were amalgamated in a new corporation. The new corporation took over the rights and liabilities of both the undertakings. Amalgamation is a state of things under which two companies are so joined as to form a third company or one is absorbed into or blended with another. In my view transfer from one person or corporation to another contemplated by the section, irrespective of its mode, is between an existing tenant's landlord to a new landlord: Reverting to the last contention of the learned counsel for the appellants that the learned Controller gravely erred in law to hold that mere intimation of change of ownership is sufficient to hold in case of non-payment. I am of the view that notice under section 13-A of the repealed Ordinance or under section 18 of the Ordinance has nothing to do with the creation of relationship of landlord and tenant between the parties. It is simply a shield against eviction of the tenant on the ground of default in payment of rent. It is well settled that on the purchase of the property or change of name or amalgamation of two companies blended with another under the occupation of a tenant from the original landlord, the relationship of landlord and tenant between the purchaser or blended company and the tenant stands automatically created but the landlord or the blended company cannot evict the tenant for default unless he gives him a valid notice under section 13-A of the repealed Ordinance or section 18 of the Ordinance. The respondent's eviction application filed by the respondents is absolutely silent about service of notice as required by the provisions of sections 13-A or

18. The respondents annexed copy of letter of attornment dated 7-6-1979 to the affidavit-in-evidence. This will not serve the purpose. Mr. Rehmat Elahi has contended that the appellant admitted about receiving intimation of transfer of ownership. This contention has not impressed me because the mode of service of a notice under section 18 is clearly prescribed there, to be through registered post. The language of the section clearly contemplates an express notice and that implied notice or information alone cannot be sufficient compliance with the section. The provisions of the section were required to be observed very strictly and an express notice addressed to the person in possession of the premises in dispute was to be issued. Thus no notice as required by section 13-A or 18 of the Ordinance was served upon the appellants and therefore the application under section 15(2)(ii) of the Ordinance itself was not maintainable. There mere sending of reminders or bills will not serve the purpose. In view of my finding that the notice as required by section 18 of the Ordinance was not given, I allow the appeal and set aside the impugned order and dismiss the eviction application with no order as to costs. H. B. T./G-36/K Appeal allowed.