2001 PLP 1681 (MLD)

Date of hearing: 3rd March, 1998. This judgment will dispose of these two appeals under section 24 of the Cantonments Rent Restriction Act of 1963 (hereinafter referred to as the Act XI of 1963) whereby the appellant has challenged he orders dated 29‑6‑1996, 1‑3‑1997 and 9‑8‑1997 passed by the Rent Controller in Rent Cases Nos.26 and 88 of 1995. , The respondents who are landlord/owners of premises/shops Nos.5 and 7, situated on plot bearing No.BC‑10, Block 9, Scheme. No.5, Kehkashan Clifton Defence Housing Authority, Karachi (hereinafter referred to as the demised premises) at the monthly rent of Rs.8,000 excluding electricity, telephone and conservancy charges, sought ejectment of the appellant on the grounds of default in payment of rent, personal bona fide requirement and impairing the utility of the demised premises. The appellant denied all the adverse allegations. The parties filed their affidavits‑in‑evidence. However, the respondents submitted applications under section 17(9) of the Act XI of 1963 for striking off the defence of the appellant on the ground that the appellant had deliberately and intentionally violated the order dated 1‑3‑1997. It was allowed that as per tentative rent order the appellants were directed to deposit the rent for the month of March, 1997 at the rate of Rs.9,680 per month in the Court before 5th April, 1997 and future rent in the same manner before 5th of each succeeding calendar month, till further orders but the rent was not deposited as directed. The appellant filed his objections and ultimately the learned Rent Controller after verification of record and accountants' report came to the following conclusion:‑‑ In the tentative rent order the opponents were specifically directed not to deduct any amount from the monthly rent and to deposit full rent in the sum of Rs.9,680 per month in this case whereas not only the opponents deposited the rent in Miscellaneous rent case but that too at the rate of Rs.9,196 per month. Although the deposit of rent by the tenant in miscellaneous rent case amounts to non‑compliance of tentative rent order but the same would at the best be deemed to be default of a technical nature but depositing rent at the lesser rate clearly amounts to deliberate and willful non? compliance of tentative rent order. As per case‑law laid down by the superior Courts, short deposit by a tenant amounts to default within the meanings of provisions of section 17(9) of the CRR Act, 1963 rendering the tenant's defence liable to be struck off By depositing the rent at the rate of Rs.9,196 instead of Rs.9,680 per month, the opponents have committed willful default which default has been fully established and proved beyond any doubt. I, therefore, feel no hesitation but to allow the application under section 17(9) of the C.R R. Act, 1963 and strike off the defence of the opponents in this case." I have heard Mr. Kamaluddin learned counsel for the appellant and Mr. Iftikhar Javed Qazi, Advocate for respondents and perused the record, and also perused the case‑law cited by the parties. There is no denial of the fact that compliance of the tentative rent order as directed by the learned Rent Controller was not made but according p, to the learned counsel for the appellant at the time of hearing of applications under section 17 of the Act XI of 1963, it was brought to the notice of the learned Rent Controller that deduction of Rs.440 per month out of the agreed rent of Rs.9,680 has always been on account of withholding tax which is required to be deducted under the Income Tax Act. But according to learned counsel while passing the tentative rent order the learned Rent Controller interpreted section 50(7B) read with section 19 of the Income Tax Act in unwarranted manner and directed the appellant not to deduct the withholding taxes, thereby exposing the appellant to be charged with a penalty of 24% of the tax payable by them as well as the criminal prosecution under section 17 of the said Act. Therefore, being afraid of the penalty the appellant continued deduction of withholding tax strictly in accordance with law but the learned Rent Controller by ignoring the provisions of Income Tax Law and the order of lawful authority passed by the impugned order which is void. He placed reliance on Article 112 of the Qanun‑e‑Shahadat Order, 1984. Learned counsel further highlighted that the Nazir's report also indicates that the appellant had deposited all the deductions of withholding tax back in the account of landlord on 19‑5‑1997. Lastly he submitted that at best the alleged non‑compliance being for two months only could be construed as a technical default and for ‑that discretion ought to have been exercised by the learned Rent Controller in favour of the appellant. In support of his submissions the learned counsel cited 1990 CLC 1170 (Habib Bank Limited v. Noor Ahmed), 1993 MLD 862 (Messrs Mother Care Nursing and Maternity Home v. Mrs. Syeda Raisa Fatima); 1985 CLC 2862 (Muhammad Yousaf v. Maqbool Ahmad); 1991 MLD 701 (Anwar Ahmed v. Muhammad Sharif) and PLD 1987 Lahore 47 (Abdul Razzak v. Saleem Hidayat and 4 others). Learned counsel for the respondents supported the impugned orders. On careful consideration I find no force in the submissions of the learned counsel for the appellants. The impugned order particularly the tentative rent orders cannot be termed as void because the learned Rent Controller had the jurisdiction to pass the same and he had not acted in a manner inconsistent with due process. Furthermore in order to avoid the consequences of penal provisions the appellant could have taken advantage of section 85(2) of the Income Tax Ordinance, 1979 by making proper application regarding payment of tax instead of violating the tentative rent order which was binding on them. In the judgment reported as Mrs. Hazarbai Merchant and another v. Muhammad Ismail (1984 SCMR 406) it was held by a Full Bench of the Hon'ble Supreme Court as follows:‑‑ "Without going into other controversies raised by the learned counsel it is sufficient for present purpose to mention that admittedly the petitioners did not deposit all the rent due for a period of three years but deducted an amount of Rs.1,409.68 claimed by them as having been paid towards Government and KMC taxes in respect of the premises. In our view the petitioners were not entitled to deduct this amount and did so at their risk and peril inasmuch as the claim of the petitioners for refund of the amount was subject to adjudication by a competent Court or authority. The law clearly required them to deposit all the rent due in order to escape the consequences of ejectment by the Rent Controller. " In Begum Capt. Mirza Ghulam Sarwar and another v. District Judge, Jhelum and others (1987 SCMR 25) the Hon'ble Supreme Court did not interfere with the decision of striking off the defence of the petitioner/tenant when he failed to comply with the orders of the Rent Controller to deposit rent as directed. (See also Raja Aurangzeb v. The Additional Rent Controller, Lahore Cantonment and 2 others, PLD 1985 SC 876; 1985 SCMR 876). The upshot of the above discussion is that these appeals having no merits are dismissed. The appellants are directed to hand over vacant possession of the demised premises within 90 (ninety) days but that will be subject to payment of rent regularly as directed by the learned Rent Controller.