P L D 1980 Supreme Court 206 (PLP)

DORAB PATEL., J.-The petitioner is the tenant of a garage in Peshawar City. This garage was evacuee property and was transferred by the Settlement Department to the respondent, who filed an eviction case against the petitioner, on the ground, inter alia, that he waned to rebuild his property. The petitioner resisted his eviction, and her order dated 5-7-1975, the Rent Controller dismissed the respondent's eviction application. The respondent challenged this order in an appeal in the District Court, Peshawar and as the appeal was allowed by an Additional District Judge, the petitioner filed a second appeal in the Peshawar High Court, and as the Additional District Judge had not stated in terms in his order allowing the respondent's appeal that the respondent required the demised premises reasonably and in good faith, by his order dated 9-12-1977 (hereinafter called the said order), the learned Judge of the High Court remanded the case to the First Appellate Court with a direction that it should give a finding about the reasonableness and good faith of the respondent's claim for reconstruction. The learned Judge also observed that the First Appellate Court could decide this finding on the basis of the material on the record, but that if the First Appellate Court was of the view that further evidence was required in order to decide this issue, it was free to record evidence or to remand the case to the Rent Controller for recording further evidence. In compliance with the, direction thus given by the High Court, the Additional District Judge, Peshawar remanded the case to the Rent Controller to record evidence on the issue whether the respondent's desire to rebuild its premises was reasonable and in good faith. The learned Rent Controller recorded evidence, in due course, but although the petitioner's case is that the three Courts have misread this evidence, we have not been supplied with copies of the evidence recorded on remand by the Rent Controller. Be that as it may, it would appear that the respondent proved that the garage was more than fifty years old and was built of kacha material, it would, however, appear that the petitioner had given evidence to the contrary. But, the learned Rent Controller was not impressed by the petitioner's evidence and in deciding the issue in favour of the respondent, she observed in her order of 10-6-1978 that the respondent "gave an undertaking to the effect that in case he fails to reconstruct the suit property after its demolition that suit property may be. confiscated and he may be penalized to the tune of one lac. He further deposed that he would let out the suit property to the respondent at the prevailing market rent if it is not required by him after its reconstruction. He stated that there are two garages which are proposed to be constructed. That about one garage this Court has already passed an ejectment order against the tenant named Mohd. Sharif." The case was forwarded to the Additional District Judge Peshawar with these observations and as the learned Additional District Judge agreed with the view of the learned Rent Controller, he allowed the respondent's appeal and ordered the petitioner's eviction. The petitioner, therefore approached the Peshawar High Court for the second time, but as his appeal was dismissed on 6-6-1979, he has filed this petition for leave. Learned counsel submitted that the Courts below had misread the evidence recorded by the Rent Controller on the remand of the case, but as the evidence has not been filed, no case for misreading of evidence has been made out. However, on this aspect of the case, learned counsel's real grievance appears to be that the evidence recorded by the learned Rent Controller on the remand of the case was contrary. to the directions contained in , the said order. We are unable to agree with this submission because the learned Judge had expressly observed in the said order that the Additional District Judge was free to remand the case to the Rent Controller for further evidence therefore, in remanding the case for evidence to the Rent Controller the learned Additional District Judge merely carried out the direction of the High Court. Learned counsel's next submission was that the evidence recorded on the remand of the case was inadmissible because it was contrary to the) provisions of Order XLI, rule 26 of the Civil Procedure Code. The argument is fallacious, because the provisions of the Civil Procedure Code are not applicable in terms to proceeding before a Rent Controller. Finally, according to learned counsel, section 13(2) (vi) of the West Pakistan Urban Rent Restriction Ordinance, 1959 (hereinafter called the said Ordinance) was to be read with section 13(5-B), and as the garage which the respondent wanted to build does not suit the petitioner's needs. Learned counsel submitted that the respondent was not entitled to evict the petitioner and in support of this sweeping proposition he relied on the observations in Bashir Hussain and another v. Sh. Muhammad Saeed and 2 others (P L D 1976 Lah. 1095). As the question is of the proper construction of section 13(2)(vi) of the said Ordinance, it is necessary to examine this clause, and we would first observe that under this clause as enacted in 1959, a landlord could eject a tenant for the purpose of reconstructing his property if he proved that he intended to demolish the building for constructing a new building on the same site and already obtained the necessary sanction for the said construction from the Town Improvement Trust or the Municipal Corporation. This clause, to which we will refer as the said clause, was amended by Ordinance XXI of 1965, and after this amendment a landlord can evict his tenant for the purpose of rebuilding his property if the building is reasonably and in good faith required by the landlord for the reconstruction or erection of the building on the site and the landlord has obtained the/ necessary sanction for the said reconstruction." The obvious effect of this amendment is that a landlord cannot evict a tenant merely because he wants to rebuild his property. He has to prove that .his requirement is both reasonable and bona fide. Now, there is ambiguity about the words "reasonable" and "bona fide and if, for example, the effect of the reconstruction is substantially to develop and improve a property, the landlord's requirement is bona fide and reasonable, as held in B. D. Pudumji v. Sir Dinshaw Manekji Petit (1), in Hasan Ali v. Ahmad Khan (2), and in Maula Dad v. Sardar Khan (3). On the other hand, if the Legislature had intended to relate the reconstruction of a building to the tenant's requirements, as submitted by learned counsel, it would have enacted accordingly, but it has not. On the contrary, subsection (5-B) which was also inserted in section 13 by West Pakistan Ordinance XXI of 1965, reads "(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. . . and the Controller shall make an order accordingly in respect of the area applied for or such smaller area, as, considering the location and types 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." (1) 22 Bom. L R $$0 (2) P L D 1960 Kar. 23 (3) P L D 1972 Quetta 39 This subsection only confers a right on a tenant to a lease of the demised premises after their reconstruction, and as the Controller is empowered to lease to the tenant in the new building a smaller area than the premises originally demised to him, this express provision is inconsistent with the ` proposition that a landlord can reconstruct his property only in accordance with the needs of his tenant. Secondly, the option conferred on the tenant by this subsection continues until the completion of the new building and, its occupation by another person. In view of the laws delays, this can only be many years after the landlord's reconstruction plan has been approved by the local Municipality, therefore, the plea that the landlord's rebuilding plan must conform to his tenant's requirements would lead to absurdity. Thirdly, whilst a landlord cannot evict his tenant except on the grounds prescribed in the said Ordinance, a tenant is free to vacate the demised premises after giving the contractual or statutory notice. As a tenants can terminate his lease unilaterally, it would be extremely unjust and unreasonable if the landlord's right to rebuild and develop his property was subject to the tenant's veto, and injustice is not to be lightly attributed to the Legislature. . Looking at the matter from another angle, it must be borne in mind that the said clause was amended during the pendency of Fundamental Reghts and Fundamental Right No. 13 of the 1962 Constitution guaranteed to every citizen the right to acquire, hold and dispose of property subject only to reasonable restrictions in the public interest. Now, a restriction that a landlord can evict. his tenant for the purpose of reconstruction only if the effect of the reconstruction is substantially to develop and improve his property is a reasonable restriction on the right to hold property. But, if the landlord's right to rebuild his property is subject to the veto of a tenant, who can vacate the demised premises at any time by giving notice, this would be an extremely unreasonable restriction on the landlord's right to hold, acquire and dispose of property, and a law containing such a restriction would have been void in view of Article 6 of the Constitution. Therefore, even on the assumption that the words "reasonable" and "bona fide" are capable of the construction sought to be placed upon them by learned counsel, we should prefer that construction which avoids any unconstitutionality in legislation. Accordingly, on this ground also we are unable to accept learned counsel's submission. We now turn to the Lahore judgment on which Mr. Saeed Baig relied. As, in the instant case, the respondent in this case had obtained an order from the Rent Controller for the appellant's eviction on the ground that he required the demised premises reasonably and in good faith for rebuilding them. As the appellant's appeal against this order was dismissed, he filed a second appeal in the Lahore High Court, and the learned Judge, who heard the appeal, found that the respondent had entered into an agreement to let the demised premises after their reconstruction to the Habib Bank Limited. Therefore, on this sole ground, the learned Judge set aside the concurrent findings of the lower Courts, and in allowing the appeal, he observed : "If, according to the record, it is proved that the object of the application for ejectment is to totally oust the tenants from the property, reference to subsection (5-B) becomes relevant for the purpose of interpreting the provisions of subsection (2) (vi) of section 13 which, as stated above, provides that ejectment can be only for bona fide reconstruction. A reconstruction the object of which is to override the provisions of subsection 1'5-B) cannot be deemed to be bona fide." . Although the judgment is distinguishable on the facts, Mr. Saeed Baig was right when he stated that the ratio of the case supported his submission, therefore, it is necessary to examine the judgment in some detail. We examined subsection (5-B) earlier, and, as we explained, it merelyconfers a right on a tenant to be re-instated in the demised premises after their reconstruction, therefore, the effect of the subsection in the case cited was that the respondent's agreement to let the demised premises to the Habib Bank Limited was subject to the option conferred on the appellant under the subsection. But, could this provision necessarily lead to the conclusion that the respondent's desire to develop his property was not bona fide. The provision does not say so, and, on the other hand, the words reasonable and bona fide in rent control legislation have acquired a definite meaning and have to be determined by an objective test, and by this test two Courts had held that the respondent's desire to rebuild his property was bona fide. Could this desire cease to be bona fide, merely because the respondent had entered into an agreement with a third party which the appellant was entitled, at his option, to. challenge many years latter, we would not like to be dogmatic on a question which will always turn on the evidence in each case. Therefore, we would only observe that whilst there may be cases in which a landlord's desire to rebuild his premises may not bona fide on account of his desire to evict his tenant illegally, there will, for example. be cases in which a landlord may not even be aware of the provisions of subsection (5-B). Secondly, as we explained earlier, a tenant is entitled to exercise his option under subsection (5-B) until the building has been constructed and is ready for occupation. As this would be many years after the institution of eviction proceedings against him, there will be cases in which a tenant may not be interested in exercising his option under subsection (5-B) nor is this too remote a possibility in a period of galloping inflation. In any event, it takes several years to evict a tenant, and as it also takes several years to rebuild a property, how is a landlord to anticipate when he is preparing his building plans, that his tenant will, many years later, claim his option under subsection (5-B). Additionally, at the point of being tedious, we would repeat that the words reasonably and in good faith in rent legislation have. been construed by the Courts over a period of more than half a century, and the tests for determining the reasonableness and the bona fide of a landlord's claim to rebuild his property are objective tests. Thus, for example, if a property is in a dilapidated condition, the landlord's desire to rebuild it will necessarily be reasonable and bona fide, and this desire would not cease to be bona fide merely because the landlord tried to defeat his tenant's rights. No doubt, a landlord's refusal to give a fresh lease to the tenant is illegal, but this cannnot alter the fact that the desire to rebuild a dilapidated property is a bona fide desire. Again to take another example, if a bungalow is replaced by block of multistoreyed flats is not possibly be argued that the landlord's desire to replace a bungalow by a multistoreyed block of flats is not reasonable and bona fide. Now, in such a situation, even if a landlord tries to defeat the tenant's rights under subsection (5-B) the strong arm of the law is strong enough to prevent him from defeating his tenant rights but this would not by itself convert a bona fide claim into a mala fide claim, the moreso, as the interests of the tenant are protected by subsection (5-B), whilst the development of property is in the national interest and is in no way inconsistent with the objects of the rent laws. Therefore, with all respect to the learned Judge we are unable to agree with the observations on the scope of subsection (5-B) and we see no merit in learned counsel's submission. The petition is without merit and is dismissed, but we give the petitioner four months' time to hand over vacant possession of the demised premises to the respondent provided he continues to pay monthly rent. s. A. x. Petition dismissed