1997 PLP 1004 (MLD)

After recording evidence and hearing of the learned counsel for parties, the impugned judgment was passed whereby the application under section 8 of the said Ordinance was dismissed. I have heard learned counsel for parties and perused the record and proceedings of the case and case‑law cited by the respective counsel. Learned counsel Mr. Khalid Habibullah contends that the learned Rent Controller has erred in holding that the appellants/landlords have failed to prove their entitlement for fixation of fair rent in respect of said premises. He has referred to para. 2 of the affidavit of Nazir Hassan Sabzwari wherein he has stated that the rent of similar premises situated in similar circumstances in the same or adjoining locality has increased more than 100% or more to the rent being paid by the respondents and in para. 3 of the affidavit he has stated that plot of land bearing No.D/98, admeasuring 112,575.2 sq.ft., situated in Sindh Industrial Trading Estate Limited in Trans Lyari Quarters, Karachi, was on lease with the Phillips Electrical Co. of Pakistan as per agreement dated 5‑7‑1987 at the rate of Rs.2 per sq.ft. and further that there has been rise to the extent of 200 % in the cost of construction and repairs charges since 1984. He has argued that the above evidence of Nazir Hassan has not been rebutted by the respondents, therefore, the Rent Controller ought to have fixed the fair rent at least with rise of 100 % in the agreed rate of rent. He has further contended that the learned Rent Controller ought to have taken notice of the rise in the cost of living during the last seven years and rise in the cost of construction and repairs charges over 200 % so also appreciation in the value of property and trend of increase in the rental value of the estate property. Mr. Raghib Baqi for respondents has argued that the appellants have failed to produce reliable and sufficient evidence to entitle them to the enhanced rate of rent to be fixed as fair rent in respect of premises. He has placed reliance upon Abdul Hamid v. Abdul Ghani reported in 1992 MLD 1588. Learned Rent Controller can fix fair rent under section 8 of the said Ordinance after considering the following factors: (i) Rent of similar premises/building situated in the same or adjoining locality with similar accommodation, amenities, facilities and environment. (ii) Any rise in the cost of construction and of repairs charges. (iii) Imposition of new taxes and rise of taxes, if any. (iv) Annual value of premises assessed by concerned department. (v) Any improvement in the premises or amenities made and provided. (vi) Withdrawal of any tax or charge in respect of such premises. Perusal of evidence on record would show that the appellants have not produced the agreement of tenancy from which it could be seen as to what was the built‑up or uncovered area and what were the amenities provided to the respondents/tenants. The appellants have only produced a photostat copy of an agreement of tenancy executed between Siemens Pakistan Engineering Company Limited and Philips Electrical Co. of Pakistan in respect of plot of land bearing No.D/98, admeasuring 2.55 acres situated in Industrial Trading Estate Limited in Trans Lyari Quarters, Karachi. Evidence on record would show that the respondents have admitted that they were prepared to increase the rent of the premises as provided under section 9 of the said Ordinance. Section 9 of the said Ordinance has provided that when fair rent of any premises has been fixed no further increase thereof shall be effected unless a period of three years has elapsed from the date of such fixation or commencement of the Ordinance but the said increase in rent in any case would not to exceed ten per cent. per annum on the existing rent. Section 9 of the Ordinance would be attracted only after the fair rent of premises has already been fixed by the Controller and increase in rent could be effected only as provided in section 9 of the said Ordinance. It is also admitted position that since the date of inception of tenancy, i.e. 1‑2‑1984, between the parties, there has been no enhancement or increase in the rate of rent. The respondents have stated in the written statement as well as in their affidavit that they were prepared to the increase of rent as provided by section 9 of the said Ordinance. Nazir Hassan Sabzwari, Director Engineering of the appellants in his affidavit‑ in‑evidence in para. 2 has stated that the rent of similar premises situated in similar circumstances in the same adjoining locality was hundred per cent. or more in excess of rent being paid by the respondents and in para. 3 he has stated that plot of land bearing No.D‑98, admeasuring 112,575.2 sq. ft. situated in Sindh Industrial Trading Estate Limited in Trans‑Lyari Quarters, Karachi, has been sublet by M/s. Siemens Pakistan Engineering Company Limited to Phillips Electrical Co. of Pakistan by agreement dated 5‑7‑1987 at the rate of Rs.2 per sq. ft. of the built up area, and further in para. 4 has stated that there has been rise in the cost of construction and repairs charges since 1984 till this date by over 200%. It would be seen that in the entire cross‑examination not a single question has been suggested in the negative to the appellant's witness Nazir Hassan Sabzwari by the respondents' learned counsel that there has been no increase in the rate of rent of similar premises situated in similar circumstances in the same adjoining locality by hundred per cent. or more in excess of rent being paid by respondents and there has been no rise in the cost of construction and repairs charges since 1984 to this date by over 200 % . The only question which has been asked was that the agreement between Siemens Pakistan Engineering Company Ltd. and Phillips Electrical Co. of Pakistan was forged and fabricated. The respondent S.M.H. Bukhari in his affidavit‑in‑evidence has stated that as per clause 11 of the tenancy agreement negotiations were to be made for the increase of rent after the expiry of three years buy the respondents never agreed to increase rate of rent by three hundred per cent. in violation of rent laws and further, respondents denied that there has been increase in the rental value in the adjoining locality and the agreement executed between Siemens Pakistan Engineering Company Limited and Phillips Electrical Co. of Pakistan pertained to the premise: for industrial purposes and not for commercial purposes and further that there has been no increase in the cost of construction and so far the repairs, it has been stated that the same has never been carried out by the appellants. However, respondent's witness admitted in the cross that there has been no increase in rent for the said premises after 1984. Respondent's witness has stated in the affidavit that they were willing to increase rent to the extent of 10 % . Evidence on record would show that the respondents have failed to suggest any question in negative to the appellant's witness Nazir Hassan Sabzwari that there has been no increase to the extent of hundred per cent. in the rental value of the premises in the locality and increase in the cost of construction and repairs charges to the extent of 200 % , therefore it would be deemed that statement made by the appellant's witness has been admitted by the respondents The respondents themselves admitted that they were prepared to increase rent of premises to the extent of 10% and that they have not increased rent since 1984 which would mean that 11 years have passed but there has been no increase. The respondents have been paying Rs.14,400 as rent per annum since 1984 which would mean that they have been paying rent at the rate of Rs.1,200 per month since 1984. The appellants have not brought any other evidence except on the point that there has been increase in the rent of premises in the same locality or in adjoining locality and that there has been rise in the cost of construction and repairs. There is no evidence as regards to other factors which are to be considered for the fixation of fair rent under section 8 of the said Ordinance. The principle laid down in 1992 MLD 1588, has not been followed in the cases reported in PLD 1993 Karachi 9, M/s. Eastern Automobiles (Private) Ltd., Karachi v. Pakistan National Shipping Corporation, Karachi, 1992 CLC 739, Amanullah Khan v. Mehar Ellahi and 14 others, 1990 ALD 190, M/s. Fayaz Sons v. M/s. Pakistan Industrial Development Corporation, 1994 SCMR 2115, H. Cooper and others v. State Life Insurance Corporation of Pakistan. Keeping in view the evidence on record and the admission on the part of the respondents as regards the increase of rent, it would appear that 11 years have passed but the respondents still considered no justification to increase the rent of the premises in their occupation. It is correct that law has been laid down to safeguard the interest of the tenants from the unscrupulous landlords but at the same time the tenants have also to be considerate so as to give reasonable return to the landlords. Keeping in view the appreciation in the rate of rent, cost of construction and repairs in view of the above evidence and admission of the respondents it cannot be said that there is absolutely no evidence for the fixation of the fair rent considering also the agreement executed between Siemens Pakistan Engineering Company Ltd., and Phillips Electrical Co. of Pakistan where the rate of rent was Rs.2 per sq. ft. in the year 1987. One should not be unmindful of the realities in day to day life in respect of increase in the rental value of the properties as well as cost of the construction because of the rise in the labour charges as well as rise in costs of material and the fact that statement made by appellant's witness was not challenged in the cross by the learned counsel for respondents. In the said circumstances, at least appellant would be entitled to the increase in rent to hundred per cent. In view of the abovesaid reasoning the impugned order is set aside and the appeal is allowed. An amount of Rs.28,000 is fixed as a fair rent per annum, i.e. Rs.2,400 per month from the date of filing of this application and the difference in the rent from the date of filing of application under section 8 of the said Ordinance shall be paid within 12 months in equal instalments alongwith future rent of the premises. H.B.T./S‑3/K ????????????????????????????????????????????????????????????????????????????????????? Appeal allowed.