P L D 1981 Karachi 739 (PLP)

This Second Appeal is directed against the judgment dated 18‑3‑1978 of learned Additional District Judge. Karachi, whereby appeal filed against the order under section 13 (6) of Sind Rent Restriction Ordinance (hereinafter referred to as the said Ordinance) striking off defence of the tenant with a direction to hand over vacant possession of demised premises, has been dismissed. Shortly stated the relevant facts are that respondents/landlords filed an application under section 13(2) of the said Ordinance for eviction of appellant/ tenant from demised premises on the ground of default in payment of monthly rest in the Court of III Senior Civil Judge and Rent Controller, Karachi. During the pendency of the case, the learned Rent Controller passed tentative rent order on 10‑2‑1975, whereby the tenant was directed to deposit in the Court monthly rent of Rs. 2812‑50 from February 1975 before 15th of each calendar month till final disposal of the case. On 1‑9‑1975 an application was filed on behalf of the landlords under section 13 (6) of the said Ordinance for striking off the defence of the tenant on the ground that rent in respect of May, June and July, 1975 was not deposited by the tenant in compliance of the tentative rent order. This application was contested and counter affidavit was filed on behalf of the tenant in which the allegation was denied and it was stated that rent for the months alleged was deposited by cheques, in the office of Nazir. For the month of May, cheque was deposited on 12th May, 1975. For June cbeque was deposited on 14th June, 1975 and for the month of July cheque was deposited on 12th July 1975. It was further averred on behalf of the tenant that cheques in respect of rent for the months of May and June, 1975 were delayed by the Nazir and were presented in the bank on 9tb July, 1975, which were returned by the bank for the reason that on that date there was insufficient balance in the account of the tenant on account of sudden withdrawal of a large sum of money for commercial purposes? Assertion was made that had the Nazir presented the cheques in time, the same would have been honoured by the Bank. It may be pointed out that on the application filed for striking off the defence, report of the Nazir was called for which is to the effect that the cheques in respect of rent of months stated above were sent by the Nazir to the bank which were sent back with objection "effects not cleared, may be presented again." After hearing the parties the learned Rent Controller came to the conclusion, firstly that for non‑payment of rent responsibility could not be shifted by the tenant to the Nazir because the tenant had failed to prove that there were sufficient funds available in the account of the tenant with the bank in the months of May, June and July 1975, secondly that default was committed when cheques deposited in the court pursuant to the order of the Rent Controller were dishonoured. Thirdly it was not obligatory for the Nazir to present the cheques again for encashment after they were dishonoured and default stood committed when the cheques in question were dishonoured. The learned Rent Controller granted the prayer in the application by holding that default has been committed and directed the tenant to hand over vacant possession of the premises within 30 days, Against this order the tenant went in appeal and the learned Additional District Judge maintained the order passed by the trial Court. Before me in second appeal it was contended on behalf of appellant tenant that deposit of rent in the Court by way of cheque is a valid tender, which should be accepted as such and there was no non‑compliance of the tentative rent order when the tenant presented the cheques in the office of Nazir before the stipulated dates. It was also submitted that in the present modern days all commercial transactions are carried out and the pay?ment is made by cheques, which is universally accepted mode of payment in keeping with advanced banking system, which is not only convenient but also is safe and beneficial. On this promise it was further submitted that when the cheques were presented in the office of Nazir, the liability of the tenant was over as the payment ;vas made by way of valid tender and it was obligatory on the Nazir to have encashed the cheques as expeditiously as possible and further the presentation of cheques was sufficient compliance of the order of Rent Controller for deposit of amount within stipulated time. It was also pointed out that in a cosmopolitan city like Karachi, which is hub of commercial activity in numerable firms, companies and private organizations have acquired rented premises to do their business and are being treated as tenants for the purposes of the said Ordinance. Hence this question needed very careful consideration. In the circumstences stated Messrs Z. U. Ahmed and Mansoorul Arfin were requested to assist the Court as amicus curiae. The question for consideration is whether in compliance with order passed by the Rent Controller. under section 13 (6) of the said Ordinance, if the rent is deposited by way of presenting the cheque before the stipulated date can it be considered as valid tender and sufficient compliance of the tentative rent order irrespective of encashment of cheque subsequent to the stipulated date of its dishonour. Mr. Mahmoodi counsel for the appellant has raised two‑fold contention in support of the proposition stated above. On the factual side it is submitted by him that the cheques in question were presented within the stipulated time specified in the tentative rent order but the Nazir of the Court delayed presentation of these cheques to the Bank by about four weeks, hence they were dishoured for the reason that at that time when the cheques were presented there were no sufficient funds in the account of the appellant as suddenly large amounts had to be withdrawn for commercial reasons. There is no dispute about this fact that the cheques were presented late to the bank by the Nazir and they were dishonoured. Even the reason of non‑availability of funds in the account at the time when the cheques were presented to the bank is not disputed. Before the Controller, Nazir had explained that he had presented the cheques late as there was summer vacation for one month. The trial Court came to the conclusion on this point that the tenant failed to produce any evidence to show that in the months of May and June 1975 there was sufficient amount in the account of the tenant in the bank to meet these cheques. In this context Mr. Naimur Rahman has submitted that a cheque is a negotiable instrument and is conditional payment and if the cheque is dishonoured on presentation the creditor may consider it as a waste paper and resort to his original demand. He has further submitted that the payment takes effect from the delivery of the cheque but is defeated by the happening of dishonour. He has relied upon A I R 1954 S C

429. He has further submitted that cheque issued is valid and payable, on demand within 6 months which is reasonable time, during which time it can be cashed at any point of time and during this period it is the duty of the person who issues cheque to keep the amount available in his account in the Bank to see that cheque is honoured. It is further submitted by the counsel that in the instant case the default was complete when the cheques were dishonoured and the tenant has offered no explanation that the funds were available to honour the cheques, as such Rent Controller had no option but to strike off the defence. During the proceedings before me Mr. Mahmoodi counsel for the appellant brought statement of the account of the appellant issued by the bank and made a statement that on 19‑6‑1975 the appellant had withdrawn money from the bank and his account turned to debit which position continued for less than a month and again on 17‑7‑1975 the appellant had an amount of 4 lacs credited to his account. Mr. Naeemur Rehman pointed out that cheques in question were presented by Nazir of the court to the bank on 9.7‑1975 and on that day they were returned as dishonoured as there were no sufficient funds in the account of the appellant. It is thus clear that on 9‑7‑1975 the appellant did not have sufficient funds in his account and for that reason the cheques were dishonoured. In such circumstances it was the duty of the appellant to have seen that cheques issued by him to the court were cashed before he withdrew large amounts from his account or should have left sufficient funds to meet the cbeques when he proposed to withdraw the amounts. The fact remains that on 9‑7‑1975 the cheques were disbonoured because there were no funds in the account and there is no gainsaying about the fact that the cheques should have teen encashed by the Nazir of the Court expeditiously after their presentation in the Court. The next important contention of the learned counsel for the appellant is that presentation of the cheques by the tenant in the office of Nazir should be considered as valid tender and in support of this contention he has relied upon the case Sarfraz Khan v. Mohammad Abdul Rauf (P L D 1969 Kar. 176). In the reported case on this point in question the relevant case‑law has been discussed in detail and the relevant portion from the Judgment is reproduced as under :‑ "The rule that tender should be in current coins or in currency notes rests on the old English decisions which were given at the time when tender of cheques was not the popular or universally recognized mode for discharge of liabilities. It will be noted, however, that with the passage .of time, the Courts, both in England as well as in this sub?continent, evolved important exceptions to this rule. The question is, whether there is no scope to evolve any further exception to the rule now when it has become an established and universally recognized practice to discharge liabilities by tender of cheques. In my opinion, in the context of modern conditions, it will be reasonable to hold that tender of cbeque is valid tender, unless the creditor expressly objects to such tender, or unless there is an express provision in the arrangement between the creditor and the debtor that the latter should discharge his liability only by tender of money in current coins or currency notes issued under the authority of some statute. In adopting this rule, I would venture to say that I am not departing from tbd rules which have been laid down from time to time by the Courts .in England and in this subcontinent on the point under consideration. I feel that I am only extending the scope of the exceptions which have been established by judicial consensus, to the present day conditions. If this view is taken of the question, then tender by the appellant of the arrears of rent and of the rent for August, 1964, by cheque cannot be rejected as invalid tender, because it has not been shown that the landlord, in his dealings with the appellant, ever raised any express objection to payment of rent by cheque, nor has it been shown that the agreement between the parties required that tender of rent Should be only in current coins or currency notes." The facts of the reported case mentioned above are that in the rent case the Rent Controller passed tentative rent order with direction that arrears be deposited before 25th August, 1964 and current monthly rent before 5th of each following month. The tenant sent a cheque covertng amount of arrears to the District Court, Karachi, on 25th August, 1964 and also sent another cheque on 4th September, 1964 for running rent for the month of August. On 7th September 1964 the first cheque was returned by the C. M. O. of the District Court with the direction that the payment may be made in the office of the Controller. Likewise cheque for monthly rent was also returned with the same direction. Subsequently the tenant presented cheques in the office of the Controller on 8.9‑1964 and 12.9‑1964. 'This delay was treated by the landlord as default in compliance with the tentative rent order and application was filed for striking off the defence which was allowed by the Rent Controller on the ground that tender of rent by cheque was not a valid tender and the rent was not deposited in the office of the Controller before the due dates. This decision was maintained in appeal. In second appeal on the factual side it was held, inter alts that deposit was made in the Controller's Office by cheque and payment of this cheque wss received by the Controller, in such circumstances the tenant could not be deemed to be in default unless the deposit of cheque itself was made after expiry of the date proscribed in the Controller's order. It is further held in the reported case that the District Court at Karachi and the Rent Controllers wao are Civil Judges at Karachi have one common Office in the office‑ of Nazir, District Court, as such the Nazir of the District Court should not have sent the cheques back to the tenant for presentation before the Court of Rent Controller. It is also clearly stated in the reported judgment that payment of the cheques was made and accepted. The reported case is distinguishable from the facts of the instant case in two respects. Firstly that in the reported case the cheques were not disbonoured but were cashed after some delay. In the instant case the cheques were dishonoured by the bank. Secondly that in the reported case the allegation for default was only delay in the presentation of cheques, which were presented in the court of Rent Controller after the time stipulated in the tentative rent order. In the instant case the cheques were presented before stipulated time but they were dishonoured and the plea taken is that if an attempt was, made to have the cheques encashed immediately after the presentation, they would have been honoured but the tenant has not produced any evidence that he had sufficient funds in his account at that time to see the cheques through. In the West Pakistan Urban Rent Restriction Ordinance the word "tender" is used at one place in section 13 (2) (i) which is to the effect "that the tenant has not paid or tendered rent due by him in respect of the building or rented land within 1.5 days of the expiry of time fixed in the agreement of tenancy with his landlord or in the absence of any such agreement within 60 days from the period for which the rent is payable." It is very clear that the intention is that as between landlord and tenant "tender of rent" has been allowed as relations between them arise from the terms of the contract or agreement executed by them. It can also be said that the tenant is allowed to tender rent in any other mode such as to send it by money order. This Ordinance clearly manifests its intention when on purpose the words "tender of rent" are not used in section: 13 (6) for the reason that after the application is filed in the court the Rent e Controller is under statutory obligation to pass tentative rent order and direct the tenant to deposit all the rent due from him and also to deposit regularly monthly rent till the decision of the case. Emphasis is undoubtedly on the deposit of rent, as such; in the court and no other mode of payment e is allowed. It is clear that after the tentative rent order is passed the tenant has to comply with the order of the Rent Controller and has to ~ deposit the rent in the court within the time specified in the order of the Controller and if he fails to do so, he loses his right of defence and is liable to eviction straightaway. By bare reading of the language used in section 13 (6) of the said Ordinance it appears that obligatory duty is cast upon the tenant to deposit refit in the Court before the date stipulated in the tentative rent order by the Controller. There is no mention in the language of this provision that the tenant can do so by issuing a cheque. If he chooses to do so, be does so at his own risk because he is to be aware of the fact that he is under statutory duty to see that rent is deposited in the court before the due date. Issue of cheque on the last date as specified in the tentative rent order or for that matter on any date earlier than that date mentioned in the tentative rent order is not safe because if the chaque is dishonoured the default will be deemed to be complete. It will not be fair to expect that the cheque will be encashed on the same day when it is presented or very soon. This Ordinance does allow payment of rent by cheque as between landlord and tenant as stated above but' does not D allow such mode of payment under section 13 (6). In these , circumstances) It can be said that in compliance of the tentative rent order if the payment of rent is made by the tenant by way of cheque and that is accepted and the cheque is bonoured and no objection is raised then it is valid tender otherwise if the cheque is dishonoured or objection is raised to such mode of payment then the tender will not be considered as valid and the tenant will be liable for default. Presentation of cheque may be considered a valid payment in contractual liability but not in statutory liability as contemplated under section 13 (6) of the Ordinance. In view of what is stated above I hold that in the instant case the appellant has committed default because the cheques submitted by him in the office of the Controller were dishonoured, hence the order of the Rent Controller striking off the defence is proper which is hereby maintained. . In the result the appeal is dismissed and the appellant is directed to hand. over possession of the demised premise within four months from the date of this judgment. Parties are left to bear their own costs as important law points were involved in the disposal of this appeal. Before parting with this Judgment I would like to mention that Messrs Z. U. Ahmed and Mansoor?ul Arfin, who were requested to act as amicus curiae and the learned counsel appearing for the parties before me have rendered useful assistance to the Court, which is commenable. Appeal dismissed.