P L D 1966 Supreme Court 439 (PLP)

CORNELIUS, C. J.-This appeal is brought before the Court on the strength of a certificate granted by the High Court. It raises a question as to the interpretation and application of section 8 of the Punjab Urban Rent Restriction Act. of 1947, in respect of a claim for restitution of monies paid by way of rent of certain premises, namely, the Capitol Cinema, Lahore. The plaintiff became a lessee by transfer from the original lessee, on the 14th January 1949. The lease was originally granted on the 23rd June 1944, that is before the Act of 1947 came into force, and at a time when the matter was governed by the earlier Act relating to rent restriction of the year 1941. The monthly rent was fixed at Rs. 4,450 with a small supplement for water supply. Under the Act of 1941, this was the "standard rent", that being the norm for fixation of legal rents at that particular time. Under that law, the "standard rent" fell into four different categories, and these premises having been first let on a date in 1944, fell under category 3, viz., "where (the premises) were or shall be first let after the 1st day of January 1939 the rent at which they were or shall be first let." Under the Act of 1941, a lessee was entitled to recover from his landlord an' rent paid in excess of standard rent, subject to the limitation that this could only be done "within a period of six months after the date of payment, or in the case of a payment made before the commencement of this Act, within. six months after the ,commence ment thereof." As will be presently seen, a similar limitation was introduced into the Act of 1947, but so far as concerns payment of rent in respect of the suit premises, there was no excess to be thus recovered at any time during the life of the Act of 1941. Thus, when the Act of 1947 came into force, there was no element of the rent paid up to that date which could be regarded as being recoverable by the tenant under the earlier Act. If, there had been, then since the Act of 1941 was repealed by a provision in the Act of 1947, recovery of such excess would have' been possible, within the limitation af9resaid, with perhaps some extension of time by virtue of section 8 of the latter Act, which provided, with reference to sums in excess paid before the commencement of the new Act, that they should be recoverable by the tenant within six months of the commencement of the new Act. However, that period had expired when the present suit was brought on the 7th June 1949, so that in the limited sense that section 8 of the new Act, in its provision for excess payments, made before the commencement of the Act., was restricted to such payments as were recoverable by the tenant under the old Act, no question of recovery remained, even if there had been such excess. Under the new Act, a new measure of rent legally chargeable was introduced, namely, the concept of "fair rent". Whereas the term "standard rent" was confined, excepting in a very limited category of cases not relevant for the purposes of this case, to rents actually paid or fixed, the fixation of "fair rent" was made a matter for determination by a statutory authority,) namely, the Rent Controller, on application made before him Such an application was made by the lessee in June 1947, and resulted on the 11th June 1948, in a very great reduction in the rent, viz., from Rs. 4,450 to Rs. 1,500 p.m. The Controller also disallowed the water payment. In appeal, this small supplement was allowed by the District Judge, but the reduction to Rs. 1,500 was maintained by an order dated the 30th April 1949. Armed with this order, the transferee of the lease filed the suit out of which this appeal arises claiming the restitution of a sum of Rs.95,200 allegedly paid in excess to the landlord from the 23rd August 1945 to the 30th April 1948. Reliance for recovery of the rent allegedly paid in excess during the life of the earlier. Act was placed upon section 8 of the new Act which read as follows, so far as relevant:- "

8. Rent which should not have been paid may be recovered.-- (1) Where any sum has, whether before or after the commence ment of this Act, been paid which sum is by reason of the provisions of this Act irrecoverable, such sum shall at any time within a period of six months after the date of the payment, or in the case of a payment made before the commencement of this Act, within six months after the commencement thereof be recoverable by the tenant by whom it was paid or his legal representative from the landlord who received the payment or his legal representative and may without prejudice to any other method of recovery be deducted by such tenant from any rent payable within such six months by him to such landlord." In other words, the contention was that the excess over Rs. 1,500 p.m. which had been paid from 23rd August 1945 to the 15th April 1947, was a sum which "by reason of the provisions of this Act (wag) irrecoverable," by the landlord. The trial Judge decreed the suit in full. He held that until the "fair rent" was fixed, no cause of action arose to the plaintiff to sue for the excess, therefore, the cause of action remained suspended till 30th April 1949, when the District Judge fixed the "fair rent". The period of limitation fixed by section 8 of the new Act was, therefore, to be extended by the period during which the cause of action remained suspended. ,In arriving at this view, the- trial Judge placed reliance on three earlier decisions of the Courts at Calcutta, Allahabad and Madras where similar extensions had been allowed but in different circumstances. Some of these judgments will be considered presently. The matter going up in appeal before the High Court, two learned Judges for different reasons came to the conclusion that the requirements for extension of limitation were not satisfied in the case. Provisions in the Limitation Act fixing periods of limitation had no application in view of the special Act having fixed specific periods of limitation for assertion of the right claimed in the suit, which was itself a creature of the new Act. Time having commenced to run could not be suspended arbitrarily until the cause of action should be ascertained. With regard to the interpretations to be placed upon the relevant provisions in the old and the new law, the learned Judges expressed views which were at variance from each other. It is not necessary to examine these views in detail, for on a plain reading of section 8 of the new Act, it is clear that the technique of restriction of legal rents by reference to the concept of "fair rent" was a totally different technique from that which had been adopted in the Act of 1941. Therefore, the reference in section 8 of the new Act to sum which had become irrecoverable "by reason of the provisions of this Act", could not be applied in respect of sums in excess of "fair rent" paid before the new Act came into force. But, the provision in the new Act repealing the old Act did, by the force of the General Clauses Act, preserve "the previous operation" of the repealed Act, in respect of sums paid to excess of "standard rent". Power to recover such sum was B derivable from section 8 of the new Act, within six months of its commencement. It is impossible, however, to understand these words as making the new technique effective in relation to the period before the Act, by which it was brought into existence, came into force, for that would be in effect to avoid the earlier provisions of the Act of 1941, and to render them ineffective by retrospective operation at a time when that Act was in full force. Very clear words would be necessary in the new enactment to produce so extraordinary a result. That is a sufficient ground for holding that by the fixation of fair rent under the new Act, no effect could be produced in respect of the rents paid in the period before 15th August 1947. Consequently the suit must be held to have been wholly incompetent in respect of rent paid up to the latter date. It remains for consideration whether it was competent in relation to rents paid after the 15th April 1947, and if so to what extent. Limitation for a suit for recovery of payments in excess of fair rent would, under section 8 of the new Act be six months from the date of each such payment. Section 8 also made a provision which was in terms similar to those included in section 13 of the earlier Act, namely, that rent which was in excess of the legal rent and which had already been paid, could C "without prejudice to any other method of recovery be deducted by (the tenant) from any rent payable within such six months by him to such landlord." The expression "such six months" would mean six months from the date of the excess payment. It is clear that in a suit brought on the 7th of June 1949, extension of limitation would be needed to cover excess payments made at any time prior to the 7th December 1948, and the present suit was brought in relation to rents for the period ending the 30th April 1948. It was clearly too late for any restitution to be secured by short-payment of future rent. It is obvious that for the implementation of the rule of restitution laid down in section 8, re-opening of the contract and re-fixation of the contractual rent in terms of legal rent, is involved. The sanctity of contracts freely made between persons competent to act who are fully conscious of their rights is a basic principle of law. Where a contract has actually been performed, it is only in the most exceptional circumstances that the law permits a re-opening and reversal of what has already been done on the basis of mutual agreement. Thus, for instance, it is on the ground of the initial contract having been uncon scionable that a contract of loan with interest thereon is rendered liable to re-opening and a fresh determination of the amount legally due, by the terms of the Usurious Loans Act. There is no hint of anything in the way of undue influence or mistake of fact or law or other similar circumstance in relation to the making of the lease in 1944, in accordance with which the benefits of the lease were enjoyed and the contractual rent duly paid up to the end of April 1948. The sole ground for the re-opening of the contract in this case is that by virtue of afresh determination of the appropriate rent, in the form of "fair rent", and by the effect of the provisions in section 8 of the new Act, a measure of restitution became due to the tenant. The concept of "fair rent" being a creation of the new Act, the right to restitution in relation to such determination was a new right which, but for the new Act would have had no existence, and the extent to which that right, being one unknown to the general law of contract, was capable of enforcement is to be ascertained from the express provisions of that Act. The periods " of limitation within which restitution could be secured, by recourse to the Courts, with or without direct recovery by short payment of future rent, have been fixed with exactness in the statute, and there need therefore be no hesitation-in agreeing with the views of the learned Judges in the High Court that these periods of limitation had expired, in relation to the whole claim put forward by the Plaintiff, at the time this suit was filed. Mr. Ghias Muhammad appearing for the appellant has placed reliance on four precedent cases, two of which have been cited in-the judgment of the trial Court. These may be briefly dealt with. The case of Raja Rangayya Appa Rao Bahadur v. Bobba Sriramulu ( 31 1 A 17) was one of a suit for recovery of arrears of rent, and it was held that time began to run from the date when the arrears had been definitely ascertained. The claim in that case was based on the inherent right of the landlord to recover rent for his premises from the tenant. That was not a new right conferred upon him by a statute, and it was not a case of a new right being controlled by a specific period of limitation provided by the same statute. Badruddin v. Mahyar Khan (A I R 1939 All. 660) was a case arising out of a suit for specific performance of a contract of sale. The suit had been dismissed and costs awarded against the plaintiff, which he duly paid, but at the same time moved an appeal and after protracted proceedings, succeeded in obtaining a decree. He applied for restitution under section 144, C. P. C., in respect of the sum paid by him as costs in the interim, at a time when limitation for recovery of that amount had expired, but the Court held that he should be allowed the time between the date of dismissal of his suit, and the date when in appeal; his suit was finally decreed. Here again, all the equities were in favour of the plaintiff, whose suit was based not on any statutory right, but on the inherent right of a promisee to a contract to have that contract specifically performed, and in the course of exercising that right through the Courts, he eventually had secured reversal of an intermediate order in compliance with which he bad made a payment, which was not due from him, in the light of the final result. Ranee Surno Moyee v. Shooshee Mokhee Burmonia (3) 12 M I A 244 is a case where the right sought to be exercised was the right of a landlord to recover rents from his tenants. There had been a dispute as to the person who was in law the landlord so entitled, and it was only after that dispute was decided that the suit for recovery of rents was brought. The time occupied in obtaining a determination of the landlord's title was excluded, and here again it is clear that the case was not one of a new statutory right being enforced, but. of the enforcement of the inherent right of a landlord to recover rent for his land from the tenant of such land. The fourth case cited was a decision of this Court in the case of F. A. Khan v. Pakistan (4) P L D 1964 S C 520 where the suit brought was one to challenge dismissal of a Government servant. Having been brought within six years of the appellate order made by the departmental authorities, it was held to be within time, the period between the original order of dismissal and the appellate order confirming that dismissal being allowed. The right to the office claimed in the suit was not a creation of any new law nor was it governed by any special period of limitation. The provisions of section 8 of the Act here in question in this respect, are to be understood as laying a restriction, upon the operation, on things already done and suffered under a contract of tenancy of a new law enabling a statutory authority to interfere to revise such contract, which was in all respects legal when it was entered into, in an essential respect. Such a restriction had existed under the earlier law as well, and no doubt need be entertained that it was entirely reasonable. To allow extension would be a violation of the Act, in an essential respect. There is no force in this appeal, which we hereby dismiss, but as there was no representation on behalf of the respondents, we make no order as to costs. K. B. A. Appeal dismissed.