1989 PLP 3505 (MLD)

The appellant Bank is a tenant in these premises since 1-1-1975. On the expiry of the first agreement of tenancy, a second rent agreement was executed on 4-12-1980 for a period of five years beginning from 1-12-1980 and expiring on 31-12-1984. Ejectment of the appellant/Bank was sought on the ground of default in the payment of rent since January, 1985, and on the ground of personal requirement of respondent/landlord who expressed his desire to commence his own business in the premises. Both the allegations of the respondent were denied by the appellants in their written statement. As for the point of default, it was stated that the respondent had a P.L.S. account with the appellant/Bank and the rent for January and February, 1985, was duly credited in this account and the respondent was intimated of the same and thereafter the monthly rent was tendered by pay orders but it was refused by the respondent whereafter the rent was being deposited in the Court since March, 1985. The learned Rent Controller vide impugned order decided both the points against the. appellants and ordered their eviction on both the grounds.

2. The facts of the case are not in dispute in so far as the defence of the appellants on the point of default is concerned. Even the learned Rent Controller has observed that it was not disputed before him by the respondent/landlord that the rent for the months of January and February, 1985, had been deposited in his P.L.S. account with the appellant/bank. Even otherwise this fact cannot be denied. Copy of the bank ledger in respect of the account of the respondent which is on record as Annexure `F' at page 51 shows that a sum of Rs.4,000 was credited in this account on 10-2-1985 towards rent of January and February, 1985. A letter to this effect was sent to the respondent on 9-2-1985 intimating the respondent of this deposit. This letter is Annexure `E' in the record at page

47. The point for determination is as to whether under these circumstances the appellant can be termed as defaulter in respect of the rent for the months of January and February, 1985. It was argued before the learned Rent Controller as well as before this Court that the appellant/bank could not pay or tender the rent by directly crediting the account of the respondent/Landlord because this mode of payment of rent was not permissible under the provisions of law. This contention found favour with the learned Rent Controller. To determine as to whether this tender is valid, it is necessary to look into the circumstances of the case. As stated in the earlier part of the judgment, the agreement was executed between the parties on 24-12-1974 (Annexure `A') and the tenancy period was from 1st January, 1975 to 31st December, 1979, and at the time of execution of this rent agreement the entire rent for the five years of tenancy was paid in advance amounting to Rs.1,05,

000. When fresh rent agreement was executed between the parties on 4-12-1980 for a further period of five years for the period commencing from 1st January, 1980, again the rent for the entire period of five years was paid in advance, amounting to Rs.1,20,

000. Naturally enough the appellant/bank wanted to continue the occupation of the permises as the Branch of the Bank is housed in the demised premises, as evidenced by a renewal clause in the rent agreement Annexure `D' which provides that the rent agreement is renewable at the discretion of the lessees. Since rent was not payable from month to month and there was no agreement or practice between the parties for the payment of monthly rent, the appellant/bank credited the rent for the months of January and' February, 1985, in the account of the respondent. I see nothing wrong with this credit since it was as good as cash and the intimation of this credit had been duly made to the respondent/landlord. No mala fides can be attributed to the appellant/bank for making this deposit. Even the respondent in his evidence did not allege that he had demanded the rent for the months of January and February and the appellant/bank had refused to pay the same. On the contrary, he admitted in his cross-examination that "it is correct that after the expiry of five years' time agreement I stopped to receive or collect rent from the opponent as they had agreed to vacate the premises after five years." There are reasons to believe that the appellant/bank had every intention to exercise their right of renewing the tenancy as per terms and conditions of the last rent agreement and since the respondent did not approach them for executing fresh rent agreement, the appellant/bank waited for some time and then credited the rent of the two months in the account of the respondent. It was argued by the learned counsel for the respondent that there was no such practice between the parties that the rent should be credited directly in the account of the respondent. This is correct but it is also correct that there was no practice between the parties that the appellant/bank shall go and pay the rent to the respondent. The practice between the parties was that the rent agreement was renewed just before the expiry of the last agreement and the appellant/bank thereupon paid the advance rent of five years. In view of the fact that the last rent agreement between the parties contained a renewal clause whereby the tenancy was renewable at the option of the appellant/bank, it was the duty of the respondent to contact the appellant/bank and confirm as to whether they were interested in the renewal of the tenancy. There is no evidence on record that the respondent did this. It is interesting to note that the respondent addressed a letter to the appellant/bank on 4-3-1985 (Annexure `G') and in this letter neither the rent for the months of January and February is demanded nor any allegation of default in the payment of rent is alleged. By the time this letter was sent, the rent for the months of January and February had already been credited in the account of the respondent and an intimation thereof had also been sent to him. This means that on the date of this letter, which is 4th March, 1985, the respondent had acquiesced in the crediting of his account with the rent for the months of January and February, 1985, and had no grudge or complaint in that respect.

3. As for the rent for the months of March onward, it is an admitted position that it was duly sent to the respondent in the form of pay orders but the respondent had refused to receive the same with the result that the pay orders had been returned. The learned Rent Controller has held that this fact stood admitted by the respondent/landlord. It was, however, held by the learned Rent Controller that the tender of rent through pay order was not in accordance with law and reliance was placed on 1986 C L C 393 wherein it had been held that rent sent by cheque was not a legal tender. Learned Rent Controller has, however, failed to notice that there is difference between a cheque and a pay order and whereas a cheque is issued by a private person under his signature and is drawn on his account, a pay order is issued by a bank on the authority of the bank and whereas a cheque may be dishonoured for various reasons, a pay order is almost never dishonoured. While arguing this point, the learned counsel for the respondent relied on P L D 1982 Kar. 403 and 1987 C L C 1434. They both are to the effect that payment of rent through a cheque is not a proper tender and the word of tenant is not sufficient to prove that the cheque had been sent. Both these authorities are not applicable to the facts of this case since, firstly, distinction should be made between a cheque and pay order and, secondly, that whereas the facts of the two authorities indicated that the tender of rent through cheque was doubtful and denied by the landlord, herein this case this is not so as the tender of the rent through pay orders is an admitted fact. Learned counsel for the appellant has relied upon 1985 C L C 1053 in which the tender of rent through pay order is held to be a valid tender. Interestingly enough, National l Bank of Pakistan was a party in this case as well. It would thus appear that tender, of rent by pay order, specially in a case where the tenant is a bank, is a proper tender.

4. It was also argued by the learned counsel for the respondent that when a rent agreement expires and the tenant continues to remain in possession of the premises, the relationship between the parties is governed by the terms and conditions of the expired rent agreement and reliance in this respect was placed on P L D 1988 S C

190. This is correct and there can be no dispute with this position of the law but the question is as to what are the terms and conditions of the expired rent agreement. The tenancy was renewable at the option of the lessee and the parties were expected to execute fresh rent agreement before the expiry of the last one whereupon the rent for the entire period of fresh tenancy was payable in advance. This was, however, not done. The terms and conditions of the expired rent agreement did not stipulate the payment of rent from month to month. As such, I am of the view that the terms and conditions of the expired rent agreement did not provide a way out for the payment of rent for the period commencing from January, 1985 and under the circumstances the appellant committed no illegality by tendering the rent first by crediting the same in the account of the respondent and thereafter by tendering the same through pay orders.

5. It can also not be stated that the appellant tendered the rent after it became defaulter. In the absence of any terms and conditions for the payment of monthly rent in the expired rent agreement, the parties would be governed by the provisions of the Sind Rented Premises Ordinance, 1979. The rent for the month of January was thus payable by 10th February and it could even have been tendered within 60 days of this date, that is, by 10th of April, 1985. However, it was paid on 10th February, 1985. Rent of February was in fact paid in advance. Same is the position with respect to the tender of rent through pay orders. The finding of the learned Rent Controller on the point of default is clearly perverse and against the spirit of law. In my view, the appellant has not committed any default whatsoever and the allegation of the respondent was patently mala fide.

6. We now come to the bona fides of the personal requirements of the respondent. In para. 3 of the ejectment application the respondent says that in addition to the grounds of default the premises in question are required by him because he wants to start his own business and has no business premises in his possession. Learned counsel for the appellant pointed out that the details of the business were not given in the ejectment application but this objection has no force because there is now sufficient case-law on this point and it is now a settled law that details of the business need not be given in the ejectment application and it is sufficient if such details are later on given in the evidence. It is, therefore, to be seen whether the respondent has brought any evidence in this regard. In para. 4 of his affidavit-in-evidence he explained that he wanted to set up cloth business and he had no premises to start his business and he 4lso gave details of his financial liquidity to show that he was in a position to set up this business. He admitted letter dated 4-3-1985 (Exh. 4) which he had sent to the appellant/bank in which he had offered to renew the lease of the premises for another two years if the rent was enhanced from Rs.2,000 to Rs.4,000 and entire rent for the two years was paid in advance even though he had also stated in the letter that it was only to "accommodate" the appellant and it was not his intention to enhance the rent as he required the premises for his own business. He further stated that he was not doing anything for the last ten years (the statement was recorded in 1986). I also find the following passage in his cross-examination "I invest the amount of Rs.21,00,000, of N.I.T. Units in business". The quoted portion is rather cryptic and it is difficult to adduce its exact meaning but it appears that the figure represents the cash-investment in N.I.T. Units. On the basis of this evidence learned Rent Controller has held that the respondent has proved the bona fides of his requirements. A perusal of the findings under issue No. 2 shows that learned Rent Controller came to this conclusion after taking into account the defence set up by the appellant and after finding it inadequate. As a matter of fact, the case of the respondent must stand or fall on its own merits. The defence set up by the appellant can only be taken into account afterwards.

7. An examination of the evidence on record shows that the finding of learned Rent Controller on issue No. 2 cannot be sustained. The respondent says that he wants to set up cloth business but admits that since 1976 he is doing no business. It is not clarified why the respondent now desires to set up business when during the last ten years (prior to 1986) he had no financial compulsion to do so. And there are reasons to believe that the respondent was not carrying on any business and was not in occupation of any commercial premises at any time even prior to 1976 as he has not made any averment to that effect even m his affidavit-in-evidence or in cross-examination. At the same time he also says that he has experience of cloth business. He has not disclosed where and when he got this experience. He does not even say that prior to 1976 he was doing any business. It therefore follows that he has no experience whatsoever for setting up cloth business or for setting up any other business. As would appear from para. 4 of his affidavit and from his cross-examination in which he stated to be owning N.I.T. Units worth about 21 lakhs, he is living on the profits of his investments. That is why he says he has not been doing anything for the last ten years (i.e. prior to 1976, since his statement was recorded in 1980). His letter of 4-3-1985 must be seen in the background of these facts. This is a very beautifully worded letter in which the respondent makes clear his willingness to renew the lease if the rent is enhanced from Rs.2,000 to Rs.4,000 although the facade of personal requirements is still maintained and the appellant are told that although the respondent requires the premises for establishing his own business, he condescends to agreeing to the renewal of the lease only for the sake of the convenience of the appellants themselves provided an increase in rent is accepted. One cannot help reading between the lines. Learned counsel for the respondent relies on 1985 S C M R 1996 to show that mala fides cannot be inferred from the letter Exh. 4 regarding the personal requirements of the respondent. I do not agree with him. The background in which this letter is written (and which has already been discussed) definitely leads to a contrary conclusion. Learned counsel for the appellant had relied on a number of authorities. 1986 C L C 1100 Akhlaq un-Nabi v. Nawab Ahmed Shamsi gives the gist of all of them. It is held that the word "required" signifies something more than a desire and includes the "element of need and genuine requirement". I must say that the respondent has failed to prove his genuine requirements. He is well-settled in his investment business which he is carrying on since time immemorial and at any rate since at least 1976 and is earning handsome profits and he does not need any premises for this business. He has never been in the cloth business of which he has no experience. He is willing to the renewal of tenancy if the rent is enhanced from Rs.2,000 to Rs.4,(l0(l (even though for the `sake of appellants' own convenience' and ostensibly only for two years). He receives letters dated 9-2-1985 (Exh. 5) and dated 3-3-1985 (Exh. 6) whereby he was informed that rent for January and February, 1985, had been deposited in his account and rent for March was sent by pay order and yet he had the audacity to allege default in payment of rent since January 1985 and to say in his cross-examination that "I do not remember whether the opponent credited the two months' rent for January and February 1985 in my account." All this shows that the respondent has no genuine desire to set up cloth business or any other business and he is content with the income from his investments. He knows that the appellant/bank will be anxious to renew the lease because it is running its Kaghzi Bazar Branch in the premises and would like to stay in the premises and he is, therefore, merely coercing the appellant/bank into agreeing to exorbitantly excessive increase in the rent. As the respondent has not discharged the onus of proving his bona fides, there is no necessity to discuss the defence set up by the appellant/bank. I would, therefore, set aside the findings of learned Rent Controller under issue No. 2 as well.

8. As a result, the appeal succeeds, the impugned order is set aside and the, ejectment application stands dismissed. The appellants shall have their costs throughout and may deduct the same from the monthly rent. M.Y.H./N-208/K Appeal allowed.