P L D 1995 Karachi 393 (PLP)

State Life Insurance Corpn. (Rana Bhagwan Das, J) No.5, Zaibun Nisa Street, Saddar, Karachi. It was pleaded by the State Life that the shop in question was rented out to English Cold Storage for business of wine, chemist and druggist and general merchandise whereas it was being used for running a Shoe Store. Besides, rent had been received from the said tenant up to June, 1988, whereafter respondent No.1 refused to accept the rent tendered by appellants Nos.(i) and (ii) as they were unauthorised occupants. In these circumstances, it was averred that the tenant had failed to pay rent with effect from July, 1988 to November, 1989. In the written statement, appellants pleaded that original partners of the firm, i.e. respondents Nos.2 to 5 retired on 1‑7‑1984 and executed a deed of retirement in favour of appellants firm. A deed of partnership was executed on 2‑7‑1984 which authorised appellant (i) and (ii) to carry on the business in the name of the partnership firm. No appearance was made on behalf of respondents Nos.2 to

5. In support of their case, State Life examined Peer Khan Sajid, Deputy Manager, in real estate whereas appellant Farhat Elahi appeared on behalf of appellant firm and its partners. On the pleadings of the parties, learned Controller settled the following issues:‑‑ (1) Whether the opponent No.l has put the Opponents Nos.2 and 3 in possession of the rented premises without written consent of the applicant and thus they are liable to ejectment? (2) Whether the opponent No. l committed default as alleged? (3) What should the order be? On assessment of oral as well as documentary evidence adduced by the parties, learned Controller held that English Cold Storage Company had put appellants Nos.(i) and (ii) in possession of the rented premises without the written consent of the landlord. He further held that appellant firm had committed default as alleged. Accordingly, he directed eviction of the appellants from the demised premises which has been impugned in this appeal. From the evidence on record it transpires that appellant's partnership was formed on 1st October, 1960 and registered with the Registrar of Firms as far back as 26‑11‑1960. It further appears that appellants (i) and (ii) were taken into partnership firm vide deed of partnership executed on or about 1st September, 1983 whereas respondents Nos.2 to 15 who were the original partners of firm retired from the partnership with effect from 1st July, 1984 and from this date they ceased to have any right, title, interest claim or concern in or over the said firm, its assets, liabilities, tenancy rights and all other privileges, ere. which since this date late vented in the remaining partners, the appellants (i) and (ii) who were authorised to carry on the same in any manner they liked. Although this retirement was notified to the Registrar of Firms, and incorporated in the certificate of registration, no intimation was sent to the landlord/State Life, Who had rented out the premises in favour of English Cold Storage Company consisting of four partners as stated above. After the retirement of the original partners, remaining two partners, namely, appellant: (i j and (ii) entered into a deed of partnership on 2nd of July, 1984 agreeing to continue and carry on business of partnership dealing in provision store, medicines, general merchandise, etc. and/or any other business as may be mutually agreed upon under the name and style of M/s. English Cold Storage Company. It is further admitted that the retiring partners, did, without the consent, of the landlord, assign tenancy rights in favour of new partners i.e. appellants (i) and (ii) and thereby rendered themselves liable to eviction on account of subletting of the premises without written consent of respondent No.l. ' In the case of Premier Mercantile Service and another v. S.M. Younus and others PLD 1982 SC 79 it was held that where a registered partnership firm was dissolved and converted into a private limited company and got registered under Companies Act without informing or getting permission from landlords, a distinct legal entity different from firm came into existence and it remained so whether veil of incorporation was lifted or not. It was further held that such legal entity possessed altogether different rights and subjected to different liabilities with respect to third parties including landlords. Honourable Supreme Court held that such change could not be brought about unilaterally so as to transform very legal existence of partnership firm in a manner affecting their liability. On the other hand, learned counsel for respondent No.l relied upon a Single Bench judgment in the case of Muhammad Hussain v. Zafar Ahmad and another 1985 CLC 2295 in which Saiduuanian Siddiqui, J. (as his Lordship then was') held that where original tenants had retired from firm and a new partner was inducted into premises in his place without consent of landlord and tenants failed to discharge burden of proof that landlord had accepted incoming partners as his tenant, induction of new partner in firm after retirement of original tenant amounted to induction of a new tenant which could not be regularised without consel.. of the landlord. It is evident that there is no contradiction on the principle of law with the view taken by the Supreme Court and the judgment goes against the appellants. Besides there is a historical prunouncement of the Supreme Court in the case of Manek, J Mobed and another v. Shah Behram and others PLD 1974 SC 351 in which it was held as under: "If a person obtains leasehold rights in his own name and subsequently assigns them to a firm or to a private limited company consisting of his family members it cannot be said that no change has taken place in the status of the tenant or that it is not a case of subletting or assignment of leasehold rights." Adverting to the issue relating to default, it would appear from the evidence that landlord's witness has admitted the tender of rent up to June; 19118, whereafter as many as 22 cheques covering rent from July, 1988 to April‑, 191 were sent by the appellants to the State Life alongwith a covering letter, on each occasion. State Life admitted the receipt of these cheques and for the first time returned all these cheques alongwith their letter dated 2nd April, 1990 on the ground that partners of the dissolved firm had infringed the term. and conditions of tenancy on which the premises were let out to then, and also committed default in payment of rent since July, 1988. Moreover, fire rented premises were being used for running a shoe store which would amount to infringement of the terms and conditions of tenancy. They also, complained of subletting and notified institution of a Rent Case against the original tenant, its partners as well as the appellants. Now a question arises whether by receiving cheques under the signatures of one of the appellants and accompanied by covering letters duly signed by appellant‑Farhat Elahi on each occasion was the respondent ivo.1 estopped from taking an exception to the act of the appellants, and whether there was a waiver of their right by conduct. No doubt; State Life haul received these cheques and these were retained by them for quite some period but in my humble view by retaining these cheques for spine. time and returning the same after filing the Rent Case would neither amount to waiver nor estoppel against the landlord. In the first instance there is no estoppel against law and secondly respondent No.l acquired knowledge of change of tenancy at a later stage. By reason of lack of information relating to subletting and mere receipt of rent they had neither changed their position nor waived their right to take exception to an action not warranted by law. In this connection, leas tied counsel for appellants has referred to the case of Hajt cihulam Rasool and others v. Chief Administrator of Auqaf PLD 1971 SC 376 while learned counsel for respondent lvo,l has referred the case of Muhammad Saleh v. Muhammad Shafi 1982 SCML

33. In the first case doctrine of estoppel was defined and it was held that it has been defined in Halsbury's Laws of England (2nd Edition) Volume 13, "as a disability whereby a party is precluded from alleging or proving in legal proceedings that a fact is otherwise than it has been made to appear by the matter giving rise to that disability". It is in this sense that it has often been held that even as a rule of evidence or pleading a party should not be allowed to approbate and reprobate. It is true that to raise an estoppel there must be something in the nature of representation by the party against whom it is pleaded as a result of which the party to whore it is male Eras been induced to take a particular course of conduct. In the second case while dealing with the doctrine of waiver by conduct, their Lordships held as under:‑‑ "Reading the above‑noted definition and quotation together it is evident that in order to establish `waiver by conduct' it must be shown, firstly, that the person entitled to the right had knowledge of the breach, thereof and secondly, that he had acquiesced or failed to act, notwithstanding that knowledge. Therefore, mere failure to object or to take action due to ignorance of the breach of his right cannot be said to give rise to any `waiver by conduct'. Even otherwise mere inaction or allowing an opportunity to pass by does not necessarily amount to waiver because when, for instance, a tenant consistently fails to pay rent, being aware of his obligation to pay it, or where there is a delay by the landlord in filing an ejectment petition out of decency to the tenant or hesitates in going to the Court or for any other reason, the tenant cannot be allowed to take up the plea drat the landlord had, by his conduct in failing to take action, waived his right to receive the rent. It has been held that even gratuitous indulgence shown by one of the parties does not constitute estoppel or waiver. omission to enforce one's legal right strictly cannot give rise to an inference that the right has been abandoned.' In the circumstances of the case in which State Life was kept totally unaware of the change in partners of the firm in the light of retirement of the original partners; induction of new partners and complete replacement by the appellants, it cannot be said that State Life had waived their right to object the receipt of rent from the appellants. Mere inaction or lack of diligence on their part would not amount to abandonment of their right and they cannot be legally estopped from taking an exception to the E attitude and act of the appellants who retained the premises without lawful authority. In view of what has been stated above, there is no merit in this appeal which is hereby dismissed. In view of commercial nature of the premises, I would allow 90 clays period to the appellants to vacate the premises. H.B.T./E‑73 jK Appeal dismissed.