2006 PLP 140 (SCMR)

RANA BHAGWANDAS, J.

Question of law raised in this petition for leave to appeal is whether Sindh High Court judgment, dated 17-2-2005 allowing respondent No.1's writ petition against the judgment of the Appellate Authority in proceedings under Sindh Rented Premises Ordinance, 1979 (hereinafter referred to as the Ordinance, 1979) can be sustained at law?

2. Fate of the issues raised in this petition revolves around the interpretation of section 3(2) of the Ordinance, 1979 and the scope of expression "premises" as defined in section 2(h) of the Ordinance, 1979. Facts leading to the controversy between the parties appear to be that Plots Nos.10 and 11 "C" Group, Warehouse Area opposite Moulvi Tameezuddin Khan Road, Karachi, belonging to Karachi Port Trust were leased out to the petitioner enterprises for a period of 25 years. On expiry of such period, lease was renewed for another period of 25 years. Petitioner, after raising certain constructions on the piece of land, let out a warehouse with floor area of 4200 square feet to the respondent. In 1999, Karachi Port Trust increased the ground rent charges from Rs.67.55 per square meter to Rs.321.60 per square meter per annum with an annual increase of 7%. Furthermore, additional Municipal Tax, calculated at 7.5% was levied by Karachi Port Trust. Consequently, petitioner, vide letter dated 16-9-1999 called upon the respondent to increase the rate of monthly rent from Rs.1.25 per square feet to Rs. 15 per square feet. Moreover, Gross Annual Rental Value of the entire premises was raised from Rs. 18,360 to Rs.983,250 vide assessment carried out by property tax authorities on 30-6-2000. Petitioner was, therefore, liable to pay property tax at the rate of Rs. 1,59,286 per annum after making necessary reductions. Petitioner pleaded that rent of similar adjacent properties on ground floor on plots Nos.8 and 9 "C" Group was Rs. 15 per square feet per month with 10% increase in rent per annum. It was also averred that there had been enormous increase in the cost of construction, repairs, maintenance, renovation and upkeep of urban property, hence the prayer for determination of fair rent of the premises at the rate of Rs.20 per square feet per month from the date of application with 10% increase per annum. An application in terms of section 8 of the Ordinance, 1979 was filed before the concerned Rent Controller on or about 4-8-2003 which was resisted by the respondent.

3. At the hearing of the rent case, question of jurisdiction of the Rent Controller, in the perspective of the provisions of section 3(2) of the Ordinance, 1979, read with notification issued by the Government of Sindh dated 15-3-1981 was raised. The Controller, therefore, vide order, dated 26-4-2004, dismissed the above application for want of jurisdiction. In First Rent Appeal, preferred by the petitioner, appellate authority, in the light of interpretation of section 3(2) of the Ordinance, 1979, took a contrary view and held that, while the plots belonging to Karachi Port Trust, were exempt from the operation of the Ordinance, 1979, neither the warehouse was owned by Karachi Port Trust nor the respondent-Company was tenant of the open plot. Learned Additional District Judge considering the circumstance that petitioner had raised a building used as warehouse in terms of the conditions prescribed by Karachi Port Trust, the notification issued by the Government of Sindh exempting the premises belonging to Karachi Port Trust from operation of the Ordinance, 1979 would not apply to the case of the petitioner. Consequently, on acceptance of appeal, order of the Rent Controller was set aside and the case remanded for decision afresh on merits.

4. Being dissatisfied with and aggrieved by conflicting finding of the Appellate Authority, the respondent called into question the correctness and validity of the judgment in Constitution petition before the High Court, which has been allowed through the impugned judgment.

5. In order to fully comprehend the matter in issue, it would be advantageous to reproduce section 3 of the Ordinance, 1979, which reads as under:-- "

3. Applicability.

(1) Notwithstanding anything contained in any law for the time being in force, all premises other than those owned or requisitioned under any law, by or on behalf of the Federal Government or Provincial Government, situated within an urban area shall be subject to the provisions of this Ordinance. (2) Government may by notification, exclude any class of premises or all premises in any area from operation of all or any of the provisions of the Ordinance."

6. In exercise of the powers under the above quoted provision of law, Government of Sindh issued notification dated 15-3-1981 exempting the premises belonging to Karachi Port Trust, Karachi from the application of the Ordinance, 1979. This notification reads as under:-- "Karachi, the 15th March, 1981 No.VIII(3)SOJ/75.

In exercise of the powers conferred by subsection (2) of section 3 of the Sindh Rented Premises Ordinance, 1979, and in supersession of all orders issued previously, the Government of Sindh are pleased to exempt the premises belonging to Karachi Port Trust, Karachi from the application of the said Ordinance."

7. Upon a glance at the above quoted provision of law as well as the notification issued by the Government of Sindh, it would appear that all premises belonging to the Federal Government or the Provincial Government whether owned or requisitioned under any law, by or on behalf of any of the Governments, situated within an urban area are exempted from the operation of the provisions of the Ordinance, 1979. .subsection (2) empowers and authorizes the Government to exempt any class of premises or all premises form the operation of the Ordinance, 1979. Much would, therefore, depend upon correct and true interpretation of the terms "premises" used in the provision of law as well as the notification. The expression "premises" has been defined in section 2(h) of the Ordinance, 1979 to mean a building or land, let out on rent but does not include a hotel. As there is no dispute with regard to the relationship of landlord and the tenant between the parties because petitioner is admittedly the owner of the building constructed on land and the respondent has already attroned as tenant by regularly depositing rent in the name of petitioner, there would be no occasion to dilate upon the terms landlord and the tenant, as used in the Ordinance, 1979. Undoubtedly, open Plots Nos.10 and 11 in "C" Group, belonging to Karachi Port Trust were leased out to the petitioner. Furthermore, the A construction raised thereon admittedly belongs to him, which was carried on with the written consent of the lessor and out of the funds and expenses borne by the petitioner. As noted hereinabove, the term "premises" means and includes the land and building. The expression "building" as defined in clause (a) of section 2 of the Ordinance, 1979 means any building or part thereof together with all fittings and fixtures therein, if any, and includes any garden, garage, out house and open space attached or appurtenant thereto. The meaning of the expression "land" has been defined in clause (e) of section 2 of the Ordinance, 1979, which means land or open space, not being agricultural land or land or open space attached or appurtenant to any building. It is, however, eminently clear in the facts and circumstances of the case that while land in the shape of plots was leased out to the petitioner in terns of the conditions of lease, he had raised the construction of building, consisting of warehouse, which was rented out to the respondent for storage purposes. By any stretch of imagination and in the light of definition of the terms "building" and "land" included within the purview of the term "premises", the warehouse being the subject-matter of the rent case does not belong to Karachi Port Trust. Since the term "premises" includes laird as well as building and the property let out to the respondent was not open piece of land, a portion of the plot or the open ground belonging to Karachi Port Trust, we are of the considered opinion that the exemption from the operation of the provisions of the Ordinance, 1979 would not extend to such kind of buildings. The view taken by Appellate Authority, therefore, in the circumstances, appears to be more rational, logical and in consonance with the spirit and object of law. The object of law behind the enactment of section 3 and, the notification issued thereunder appears to he to exclude properties owned by or belonging to the Federal Government or the Provincial Government from the operation of the provisions of the Ordinance, 1979 but in case a building has been constructed by a third party and it has been let out to a private person and neither requisitioned by the Federal Government nor by the Provincial Government, exemption from operation in favour of such premises, would not arise under any circumstance.

8. Mr. Farogh Nasim, learned counsel appearing on caveat on behalf of the respondents relied upon judgment reported as B.S. Khan v. Pakistan State Oil Company Ltd. 1989 SCMR 75 in order to defend the judgment of the High Court but we are unable to agree with his submission as in the reported case, open piece of land had been leased out by Karachi Port Trust to the Pakistan State Oil for setting up a petrol pump. The case is evidently distinguishable on facts and exemption from the operation of the provisions of the Ordinance, 1979 would not extend to the facts of this case. Learned counsel also cited Director of Schools v. Zaheeruddin 1996 SCMR 1767. In our view, this case also does not advance the cause of the respondent, as all buildings of the Private Schools and Colleges, taken over by the Federal Government, were exempted from the operation of the provisions of the Ordinance, 1979.

9. Conversely, learned counsel for the petitioner has referred to Azmatullah Ltd. v. S.N.K. Trading Company Ltd. 1989 CLC 877, which is a Division Bench judgment authored by Saleem Akhtar, J. (as his Lordship then was) of the Sindh High Court, distinguishing the case of B.S. Khan (supra) as decided by the High Court by that time. Learned counsel also referred to Khaliq Raza Khan v. Pakistan State Oil Co. Ltd. 1998 SCMR 2092 authored by Ajmal Mian, J. (as his Lordship then was), which fully fortifies the view taken by us in this petition.

10. Needless to observe, the view taken by the Controller as well as the High Court runs contrary to the view expressed by this Court in the earlier cases and offend the provisions of section 3(2) of the Ordinance, 1979 because the term premises has not been correctly identified and interpreted in both the judgments.

11. For these reasons, impugned judgment of the High Court cannot be sustained at law. We, therefore, convert this petition into appeal and on acceptance, set aside the judgments of the Controller as well as the High Court and remand the case to the Controller for decision afresh in the light of the observations, as indicated above. Hopefully the case would be decided within a period of 90 days. M.B.A./L-13/S Case remanded.