P L D 1988 Supreme Court 190 (PLP)

MUHAMMAD AFZAL ZULLAH, J.‑‑This appeal through leave of the Court is directed against judgment dated 18‑12‑1984 of the High Court of Sind; whereby the Rent Appeal. filed by the respondent/ tenant against order of his eviction in consequence of striking off of his defence, was allowed. The appellant had sought eviction of the respondent on grounds of default and personal requirement. The order passed by the Rent Controller for deposit of arrears and current/future rent was complied with by the respondent regarding the arrears but he defaulted in respect of the other rent. Consequently. an order was passed against him under section 16(2) of The Sind Rented Premises Ordinance (No. XVII) of 1979 striking off of his defence and directing his eviction. It led to an appeal before the High Court, which was allowed on the ground that the security deposit lying with the landlady (appellant) should have been adjusted against the outstanding amount. If done it would have obviated the striking off of the defence on default in depositing the rent under section 16(2). Reliance was placed on Muhammad Yousif v. Abdullah P L D 1980 S C

298. Another decision of the Supreme Court in Mirza Abdul Aziz Beg v. Mushtaq Ahmed Sheikh 1980 S C M R 834 relied upon by the appellant was treated as distinguishable. Leave to appeal was granted to examine whether in the facts of this case, the security deposit could be adjusted against the amount A to be paid/deposited by the tenant, as rent. Learned counsel for the appellant, has tried to distinguish the case of Muhammad Yousif and has besides citing other cases, relied on the decision in Mirza Abdul Aziz Beg's case. Learned counsel for the respondent has in addition to the reiteration of the point which prevailed with the High Court, has also contended that there being a need for final determination of the due rent under section 16(1), the learned Rent Controller fixed only tentative rent, therefore, the default in payment thereof was not fatal for the defence of the tenant. In any case, he further argued, the rent need not have been 'deposited' with the Rent Controller as the same has been permitted to be 'paid' to the landlady by subsection (2) of section

16. And because an amount representing security was already with the landlady, the same could be adjusted against this payment. After hearing both the learned counsel at length we think that the following questions need to be resolved in this case:‑ (1) Whether under section 16(1) of the Sind Rented Premises Ordinance, 1979, rent is to be determined finally or tentatively and approximately? (2) Whether such determined rent when it related to current payment as distinguished from arrears has to be or can be paid, to the landlord/ landlady and is not to be deposited necessarily with Rent Controller? (3) Whether the question regarding propriety/ validity of the order of deposit under section 16(1) can be examined in an appeal against final order of eviction of the tenant? (4) Whether on termination of an agreement of tenancy when the tenant remains in occupation as of right subject to liability under the Rent Restriction Law, the terms of agreement become irrelevant for regulating the tenancy? (5) If not whether a security amount with the landlord in pursuance of stipulation in the expired agreement, can be and should be dealt with in any manner other than that provided in the agreement? (6) Whether the use of security amount by the High Court for absolving the tenant in this case from liability of eviction for non‑compliance with the order of deposit, is permissible in law? (7) If not, whether it would be permissible if the case is not of the above described default but is of a default in payment of rent to the landlord/ landlady. Learned counsel for the appellant and our research assistant brought to our notice the following cases also besides the two noted by the High Court: Karamat Hussain v. Kazi Ali Muhammad 1986 S C M R 441; Wali Muhammad v. Abdul Karim 1984 C L C 2554; Sheikh Abdus Sattar v. Malik Muhammad Afzal P L D 1985 S C 148; M. Nazir v. S. Shaukat All 1982 S C M R 985; Mst. Zohra Irshad v. Messrs S. K.& F. Company P L D 1981 S C 598; Alif Din v. Khadim Hussain 1980 S C M R 767; Mian Muhammad Abdullah v. Sheikh Nawab Din 1971 S C M R 336; Ghulam Muhammad Khan Lundkhor v. Safdar Ali P L D 1967 S C 530; Miss Gul Jessa v. Mst. Jainah Bai 1984 C L C 497; Muhammad Younis v . Mst. Salma Khatoon 1984 C L C 1981; Saeedud Din v . Muhammad Saleem P L D 1980 Kar. 92; Sh. Bashir Ahmed v. Nisar Ahmad P L D 1980 Lah. 302; West Pakistan Co‑operative Consumer Society, Lahore v. Messrs Mian Muhammad Farooq Bros. P L D 1978 Lah. 28; Mst. Zubaidah Begum v. Mirza Mumtaz Hassan P L D 1975 Lah. 1504 and M. Ashraf v.

17. Sharif P L D 1971 Lah.

610. The tenancy agreement which was executed in 1977 and had admittedly expired after one year (prior to the filing of the eviction application in 1982) contained the following averments for the security which admittedly was with the landlady when the' eviction of the respondent was ordered and at the time of default in payment of rent as also at the time of default under section 16 of the Ordinance: "The landlady hereby acknowledges the receipts of six months advance rent aggregating to Rs.8,100 out of the above advance Rs.2,700 shall remain as deposit with the landlady and the balance of Rs.5,400 is the advance for the months of August, September, October and November, 1977."......... "The tenant hereby undertakes not to damages the property and also undertakes to take good care of fittings and fixtures and at the time of the expiry of the lease will hand over the possession with all fittings in tact."........ The landlady will return the deposit on the termination of lease agreement after adjustment of all the outstanding dues, if any." It needs to be noted here that Rs.2,700 mentioned in the agreement as deposit with the landlady was sufficient to meet the requirement of deposit, for the default in the payment of which the respondent's defence was struck off. It is also necessary to notice here the relevant provisions of the Rent Restriction Law: "

2. Definitions.‑ In this Ordinance, unless there is anything repugnant in the subject or context.‑‑ (j) 'tenant' means any person who undertakes or is bound to pay rent as consideration for the possession or occupation of any premises by him or by any other person on his behalf and includes‑‑ (i) any person who continues to be in possession or occupation of the premises after the termination of his tenancy; (ii) heirs of the tenant in possession or occupation of the premises after the death of the tenant; and "

5. Agreement between landlord and tenant.‑ (1) The agreement by which a landlord lets out any premises to a tenant shall be in writing and if such agreement is not compulsorily registerable under any law for the time being in force, it shall be attested by, signed by and sealed with the seal of, the Controller within whose jurisdiction the premises is situated or, any Civil Judge or First Class Magistrate. (2) Where any agreement by which a landlord lets out any premises to a tenant is compulsorily registerable under any law for the time being in force, a certified copy of the registered deed and where the agreement is not so registerable, the original deed duly attested under subsection (1), shall be produced and accepted in proof of the relationship of the landlord and tenant: Provided that nothing in this section shall affect any agreement between the landlord and tenant immediately before coming into force of this Ordinance. "6. (This section has since been omitted by Sind Rented Premises (Amendment) Ordinance 1984. Sind Government Gazettee Extraordinary, dated July 30, 1984). "

13. Eviction.‑ No tenant shall be evicted from the premises in his possession except in accordance with the provisions of the Ordinance. "

15. Application to Controller. (1) . (2) The Controller shall, make an order directing the tenant to put the landlord in possession of the premises within such period as may be specified in the order, if he is satisfied that: ‑ (i) ....................... ............. (Omitted) (ii) the tenant has failed to pay rent in respect of the premises in his possession within fifteen days after the expiry of the period fixed by mutual agreement between the tenant and landlord for payment of the rent, or in the absence of such agreement, within sixty days after the rent has become due for payment; (iii) ......................... (iv) ......................... (v) ......................... _ (vi) ............................................................... (vii) .. (3) ................................. ......................... (4) ................................. ......................... (15‑A)............................. "

16. Arrears of rent.‑ (1) Where a case for eviction of the tenant has been filed, the Controller shall, on application by the landlord and after such summary inquiry as he deems fit to make, determine the arrears of the rent due and order the tenant to deposit the same within such period as the Controller may fix in this behalf and further direct the tenant to deposit monthly rent regularly on or before the tenth of every month, until final disposal of the case. (2) Where the tenant has failed to deposit the arrears of rent or to pay monthly rent under subsection (1), his defence shall be struck off and the landlord shall be put into possession of the premises within such period as may be specified by the Controller in the order made in this behalf. (3) Where the rent has been deposited under this section, it shall, subject to such order as the Controller may make in this behalf, be paid to the landlord at the conclusion of the case or on such earlier date as may be specified by the Controller. "

21. Appeal.‑ (1) Any party aggrieved by an order, not being an interim order, made by the Controller may within thirty days of such order, prefer an appeal to the High Court. (2) ..................................................... :........ ................. (3) The appellate authority shall, after 'perusing the record of the case and giving the parties an opportunity of being heard and, if necessary, after making such further enquiry either by himself or by the Controller, make an appropriate order, which shall be final." It is true that some unnecessary change has been made in the use of words in section 16 of the Sind Rented Premises Ordinance, 1979, via‑a‑via section 13(6) of the repealed Sind Rent Restriction Ordinance, 1959, but for the present discussion no practical difference has been made in the re‑enacted law. The determination of the rent under section 16 also has to be tentative and approximate. Firstly, it is for a temporary purpose of the Controller regulating rent payment during the proceedings only. It has no effect on the prior period or the period after the rent proceedings including the appeal stages. Secondly, its determination is in a summary manner. Thirdly, if the Controller embarks upon the full trial of the issue regarding rate/ arrears of rent without which final determination would not be fair or even possible, it would frustrate one of the purposes of this provision of the law itself, via., the speedy disposal of the cases. In that event a considerable time would be consumed on this issue without in the meanwhile the Controller having any power to regulate the payment of rent by the tenant. And lastly, the final determination of the rent has been made possible by subsection (3) of section

16. It is not Correct to say that this provision deals only with the disposal of the deposits of rent. Its extended meanings are not only possible but also beneficial to the parties. There are no barring words indicating that the Controller will not be able to determine the due rent finally, after the stage of the tentative determination. The use of the words like: 'determine' and 'due' in the above light do not lead to the conclusion that it is in the context of finality necessarily and not "tentativeness". The omission in this behalf can legitimately be supplied as the intention is very clear and the omission seems to be inadvertent. First question is answered accordingly. Similarly, the use in subsection (2) of section 16 of the word "pay" regarding monthly rent and 'deposit' regarding arrears thereof, is also without significance. The deposit is also a payment. Moreover, the payment has to be under subsection (1) wherein the word deposit has been used for both the payments. And subsection (3) also repeats the word 'deposit'. Hence, nothing would turn on the use of the words like pay and payment in this context. Therefore, whether it is the monthly rent or the arrears, the payment has to be made through a 'deposit' under subsection (1). The disbursal to the landlord is possible only under subsection (3) at a later stage, after the deposit has already been made under subsection (1). No payment oradjustment in any other form directly to the landlord has been made possible by section

16. The second question is answered in the negative. There is no serious difference on question No.3. It is not denied that under the present law also there is no provision for filing an appeal against an interim order under section 16 fixing the rent tentatively and making direction for its deposit. It cannot, however, be said that the tenant is remedyless with regard to the tentative determination under this section. He can obviously challenge the same when filing an appeal against the final order if it is passed against him. Therefore, when an appellate Court is examining the validity of an order of striking off of the defence of the tenant under section 16, the questions relating to the determination of the tentative rent and the direction to make the deposit, can be examined with a view to affirming or setting aside the order striking off of the defence. We have carefully considered the implication of various judgments of the Supreme Court which deal with the question of continuance of the terms of agreement of tenancy, after its termination. Leaving aside the theoretical possibilities all of them can be interpreted consistently on the following lines: ONE: notwithstanding the enactment of the rent laws the relationship of landlord and tenant would continue to be determined and regulated in accordance with: (a) the general law; and, (b) the terms of tenancy between the parties,‑ But, subject to a very important condition that in case of repugnancy of either of these two elements to any of the provisions of the rent law the latter shall prevail; meaning thereby that the provisions of the general law and/or the covenants, in the agreement to the contrary, shall have no effect; TWO: during the continuance and subsistence of the agreement of tenancy, the question of relationship of landlord and tenant, the regulation of that relationship particularly via‑a‑via the determination and payment of rent; as also the eviction, shall be governed by the covenants contained in the agreement; provided that those covenants do not come in conflict with the provisions of the rent law and in case of conflict the provisions of that law will prevail notwithstanding any term of agreement to the contrary; THREE: after the expiry of the agreement of tenancy the general law of holding over by the tenant has not been repealed or modified by the rent laws except to the extent that it comes in conflict with the provisions of the Rent Restriction Law. On the contrary, it was specifically provided in the definition of a 'tenant' in section 2 of the West Pakistan Urban Rent Restriction Ordinance, 1959, that a tenant would include "a tenant continuing in possession after the termination of the tenancy in his favour". The definition of tenant in the present Sin d Law also provides that a tenant would s include "any person who continues to be in possession or occupation of the premises after the termination of his tenancy". Not only this, the present Sind Law made it more clear when the provisions contained in sections 6 and 15 (2)(i) of the Sind Rented Premises Ordinance, 1979, providing that no tenancy would remain valid beyond the mutually agreed period and that a tenant would be liable to be evicted on termination of such period, were repealed. The obvious reason was that the pre‑existing law before the re‑enactment was kept intact; namely, that the previous tenancy arrangements between the parties will continue to operate notwithstanding the termination of the period and will govern the continuance of tenancy as visualised in the definition of the tenant holding over. However, notwithstanding the continued operation of the terms of the agreement after the termination of the agreement; by process of law as aforesaid, its provisions whenever they are in conflict with the rent law, shall not be operative. For example, if a special method of eviction of the tenant is provided in the terms of the agreement which are repugnant to the provision contained in the relevant Rent Restriction Law, the latter shall prevail to the extent of repugnancy. Section 15 of the Sind Law is explicit on this point. Same was the position in the repealed Law. Similar would be the case relating to some other situations, for example, the determination of the fair rent. Similarly the vice versa position would also be correct. The terms of the so‑called expired agreement which are not repugnant to the rent law shall continue to operate. For example, the rate of rent, the mode of payment thereof including its; advance payment or deposit, provision for agreed increase in rent' provided it is not after the determination of fair rent, provision for re‑entry of a tenant after he vacates the premises for re‑construction, all covenants which support the conditions in section 15 of the Sind Law and section 13 of the Law repealed by it, and similar other conditions and comments. There is useful discussion on this aspect in the case of Muhammad Yunus Malik v . Mst. Zahida Irshad 1980 SCMR

184. We accordingly answer the 4th question in the negative and hold that the terms of an expired agreement as such, continue in operation, to the extent they are not repugnant to the Rent Law. Indeed same would be the position with an unexpired agreement also. It needs to be clarified that the four judgments of this Court reported in 1980 Law Journals and one in 1985, though seemingly containing some elements requiring further explanation, are not mutually exclusive. They are in the cases of Muhammad Yousuf PLD 1980 S C 298; Muhammad Yunus Malik 1980 S C M R 184; Alif Din 1980 S C M R 767; Mirza Abdul Aziz Beg 1980 S C M R 834 and Sheikh Abdus Sattar P L D 1985 S C

148. One case of 1981 viz., Muhammad Baqar Qureshi v. Mst. Razia Begum 1981 S C M R 18 may also be included. In the first case the concept of holding over in the general law of Transfer of Property Act (No.IV of 1882) was accepted, as lawful vehicle of keeping the terms of an expired agreement alive subject of course to repugnancy with any provision of the rent law to the contrary. In particular, the covenants as to advance rent and date of payment in the expired agreement were enforced and thus, the agreement was continued. Same is the position in the third case. In both of them, Muhammad Ashraf v. Muhammad Sharif P L D 1971 Lah. 610, a case of Lahore High Court, was approved. In the second case though the tenancy, after expiry of the agreement, was termed as 'statutory' and holding over concept was kept excluded but the terms of tenancy as to rate of rent were nevertheless taken from the so‑called expired agreement. Its naming as "statutory rent" was not meant to obliterate its source being the same agreement. And, it is important to emphasise, that at page 306 the possibility of expired agreements having terms not inconsistent with the rent law, has been visualised, though stated to be exceptional. Thus, such terms, would continue to operate. We may add that in the ultimate analysis such tenancies which are controlled by rent law are in any case composite; having both statutory and mutually agreed terms; and, when an expired agreement is kept alive, this composite nature does not change, though law of holding over is added to the rent law and the agreement. The fourth case recognises advance rent and security deposit as possible subjects of an agreement enforced by the rent law. The fifth case goes in line with the third case and not beyond it but in a different context. The remaining cases also do not change the position. Thus, it can safely be said that the rent laws permit all covenants in agreements, alive or expired; which, are permissible under the general law and not inconsistent with or repugnant to that special law; and enforces the same accordingly whenever it is so required under that law. In addition, they also remain operative for other purposes permitted by the general law. The fourth question is answered in the negative. The answer to the fifth question has already been rendered. A provision in the expired agreement regarding security deposit for protecting the landlord's interest, if otherwise lawful under the general law, cannot be varied under the rent law and has to be applied for the purpose provided in the agreement and not otherwise. The next question (sixth) is to be answered in the light of the foregoing discussion, in the negative. The security deposit in this case is to be applied by the landlord, according to the terms quoted earlier, to compensate himself at the time of the tenant handing over possession to him, for unpaid rent and/or damages caused by the tenant to the property at any time. Its application by the High Court for absolving the tenant‑respondent from liability to make a deposit under section 16(2) and old 13(6) is impermissible and unlawful. The default remained intact notwithstanding the security deposit. It is clarified that the covenant in each agreement as to security will be construed according to the agreement itself. The same would have been the result if the default would have been in the payment of rent to the landlord and not a deposit under section 16(2) or 13(6) of the relevant laws. The security deposit will be applied in the manner provided in the agreement and not otherwise. In this case it could not be applied to adjust the general default alleged against the respondent; because the tenancy agreement between the parties did not permit it. In the result this appeal is allowed, the impugned judgment is set aside. The order of the Rent Controller is restored with no order as to costs. The respondent is allowed 4 months time to hand over vacant possession to the appellant failing which warrant of possession shall issue without notice. The appellant shall deposit Rs.2,700 the security amount, with High Court's Nazir. This payment will be subject to the further orders of this Court. M.B.A./Z‑24/S Appeal allowed.