2026 PLP 842 (YLR)

Mohsin Akhtar Kayani, J.

Through this writ petition, the petitioner Naveed Ahmed has assailed the order dated 04.06.2025 passed by the learned Rent Controller-West, Islamabad, and the order dated 10.09.2025 passed by the Appellate Court whereby the appeal has been dismissed, with regards to two issues raised by the petitioner. The first being that the process of mediation in terms of section 16A of IRRO 2001 is a mandatory process and if any party fails to join the Mediation Council, the petition under Islamabad Rent Restriction Ordinance, 2001 is not proceedable. The second issue raised by the petitioner is with regards to the non-registration of the lease agreement whereby the Rent Controller declares that, in the absence of any penal provision within IRRO 2001, it precludes any adverse inference against the landlord solely on the basis of its non-registration, and this order has been upheld.

2. Brief facts referred in the instant writ petition are that the petitioner is admittedly a tenant of premises i.e. basement measuring (36 x 100), ground floor, front (36 x 100) and backside measuring (36 x 96) of the building constructed over plot No.19 situated at Supermarket, Agha Khan Road, Islamabad for a period of 15 years with effect from 19.04.2018 till 30.04.2033. As such, respondent No.3 is the owner of the premises who filed an eviction petition on the sole ground of rent default on 06.02.2024, notices were issued pursuant thereto; the petitioner initially filed an application for rejection of the eviction petition on the ground of mis-joinder on 25.05.2024, which was contested through a reply, and later on an application for impleadment and amendment was filed by the respondent No.3 on 16.09.2024, which was replied on 30.09.2024, whereafter the amendment application was accordingly allowed, whereas the application for mis-joinder is still pending.

3. The petitioner further filed an application for rejection of the eviction petition which was also dismissed and direction was issued to keep on depositing the monthly rent in terms of section 17(8) of IRRO 2001. However, vide order dated 20.03.2025, parties were referred to mediation in terms of section 16A of the Ordinance while direction was also issued for registration of the lease/rent agreement, whereafter the respondent made a statement before the learned Rent Controller, duly recorded in order dated 22.04.2025, to the effect that no progress had been made in the Mediation Council and consent/willingness for extension was not given; as such issues were framed. The mediator also submitted a report which reveals that the respondent refused to participate in the mediation process by not turning up in appearance. Similarly, the respondent also sought time duly taken note of vide order dated 22.04.2025 to the effect that the process for registration of the lease/rent agreement is underway and further time is required, which was graciously extended by the Rent Controller. The mediation report was part of the record and directions for registration of the rent agreement were reiterated vide order dated 12.05.2025. Respondent/landlord refused to register the agreement, pursuant thereto, learned Rent Controller passed an order in terms of section 28 of IRRO 2001, whereby a fine of Rs.5000/- was imposed, and when the petitioner appeared on 04.06.2025, he raised an objection which was turned down. The petitioner further assailed said order in terms of section 21 of IRRO, 2001, through a rent appeal which was also dismissed. Hence, this writ petition.

4. Learned counsel for the petitioner contends that in terms of section 5(4) of IRRO 2001 it is the obligation of the landlord to enter the particulars of tenancy in the register of tenancy agreement under the law relating to registration of documents and in terms of the Registration Act, 1908 any document which is compulsorily registerable, if not registered, will not create any right, interest, or title in favour of the party. Similarly, he further contends that merely imposing a fine of Rs.5000/- against non-registration of the lease agreement will not absolve the landlord from its lawful duty and the Rent Controller should have dismissed the eviction petition unless the process of registration had been complied with. It is lastly contended that the mandatory requirements of section 17 of the Registration Act, 1908 are required to be applied in a strict manner; otherwise, the effect is to be given in terms of section 49 of the Registration Act, 1908 under the law. It is lastly contended that non-processing of the case through a Mediation Council in terms of section 16A of the Ordinance, will also result into the same effect whereby the eviction petition should have been dismissed accordingly.

5. Conversely, learned counsel for respondent No.3 states that he admits and acknowledges the status of the parties being landlord and tenant, but there is no compulsory registration of the document under the law; even otherwise if the tenant intends to get the document registered, he may choose the course of action by paying the requisite fee under the law and get the instrument registered accordingly, as there is no specific liability of the landlord to pay the registration cost.

6. Arguments heard, record perused.

7. Considering the above proposition, this Court is of the view that the lease period between the parties is admitted in the pleadings which is meant for 15 years and the lease is valid up to 30.04.2033, executed on 19.04.2018 with effect from 01.05.2018, for a period of 15 years at the monthly fixed rate of Rs.20,50,000/- with taxes per month, and after expiry of each year, the rent shall automatically increase by 6.5% of the payable for the preceding year. Considering this aspect with regards to section 5 of the IRRO, 2001, pre-amendment which stats that: "Every agreement for letting out a building or rented land 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 the Controller."

8. The plain reading of the above provision of law outrightly expresses the term attestation which has not been explained in the IRRO 2001; even otherwise it is specifically stated in section 5 that "such agreement is not compulsorily registerable under any law for the time being in force, it shall be attested by the Controller", this gives a different meaning that in case the instrument is required to be registered under the Registration Act 1908, it is to be seen based upon the period of the lease, whereas if the notified period is less than 12 months then only attestation will serve the purpose as it depends upon case to case basis, considering the timeline of the lease period referred by the parties or agreed between the parties.

9. Now, adverting towards section 5 of IRRO 2001, which has been substituted vide Islamabad Rent Restriction (Amendment) Act 2021, the following has been stated: "Section 5 (4) IRRO (post-amendment): The entry of particulars of the tenancy shall not absolve the landlord or the tenant of their liability to register the tenancy agreement under the law relating to registration of documents." The plain reading of section 5(4) outrightly confirms that the entire particulars of tenancy shall be recorded in the register under the law relating to registration of documents; hence the post-amendment effect gives rise to a new scenario where compulsory registration has been reflected under the law. Therefore, in this context the Court has to see whether a lease is compulsorily to be registered and same should have been determined on the basis of section 17(d) of the Registration Act, 1908 which provides; "Lease of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent."

10. This aspect outrightly confirms that any lease whose period has been fixed for one year i.e. 12 months or more, then it is compulsorily registerable in terms of section 17(d) of the Registration Act, and such lease agreement if not registered under the law then it should not be considered valid for the purposes of creating any right, assignment, title, or interest vested or contingent in future. With regards to that immovable property, such aspects have clearly been stated in section 49 of the Registration Act, 1908 which is as under: "No document required to be registered under this Act or under any earlier law providing for or relating to registration of documents shall- a. Operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, to or in immovable property, or b. Confer any power to adopt, unless it has been registered."

11. While considering this aspect, one thing is clear that any lease agreement which is for a period more than 12 months is required to be registered compulsorily and the same should have been produced before the learned Rent Controller for the purposes of registration who has also been assigned with the duty to register such instrument in its register.

12. Now the question arises as to what would be the stamp duty with regards to the unregistered 15-year lease agreement which could not be considered for the purposes of evidence to create any right, title, interest, or tenancy relating to the premises. However, the effect of the amendment, if considered strictly in terms of the interpretational question, the amendment should have been applied prospectively and the period started from the amendment date is to be considered for the purposes of registration under the law and any requisite stamp duty should have been paid accordingly including but not limited to the fee imposed in this scenario.

13. At this stage, the question arises as to who will bear the stamp duty and registration expenses; in this regard respondent No.3 asserts that this burden lies upon the petitioner whereas the statutory text contained in section 29(c) of the Stamp Act, 1899 states as under: "In the absence of an agreement to the contrary, the expense of providing the proper stamp shall be borne in the case of a lease or agreement to lease - by the lessee or intended lessee." Thus, unless a written agreement exists that shifts the burden, the statutory default places the liability of stamping squarely on the lessee.

14. It is noted that petitioner has not been confronted with this statutory allocation during the proceedings, nor has an inquiry been made into whether the parties executed an agreement to the contrary. It is further notable that while respondent No.3 has chosen to pay only Rs.5000/- penalty, section 5(4) of IRRO 2001 read with section 17(d) of the Registration Act, 1908 together indicate that such payment does not extinguish the underlying statutory obligation to register the lease.

15. During the course of hearing, this Court has perused the lease/rent agreement dated 19.04.2018 executed between the parties, which reflects that the period of lease has been fixed for fifteen (15) years, (extendable) with effect from 01.05.2018 to 30.04.2033. However, considering the background of this case, as well as the concept referred in section 5 of the Islamabad Rent Restriction Ordinance, 2001, as amended / substituted by Act XLVII of 2021 dated 01.12.2021. Subsection (1) of section 5 reflects that: "A landlord shall not let out a premises to a tenant except by a tenancy agreement in writing." This aspect reflects that it is the obligation of the landlord to get the lease registered in writing. A similar aspect has to be seen in subsection (2) of section 5, which lays that: "A landlord shall present the tenancy agreement before the Controller within thirty days of signing the agreement." Thereafter Subsection (3) of section 5 states that: "The Controller shall enter the particulars of the tenancy in a register, affix his official seal on the tenancy agreement, retain a copy thereof and return the original tenancy agreement to the landlord." Such concept provided in the IRRO, 2001, settled that every obligation and duty has been fixed upon the landlord, as he is the owner of the premises in general. Similarly, sub-clause (6) of section 5 of IRRO 2001, refers that: "Any other agreement which may be executed between the landlord and the tenant in respect of the premises shall be presented before the Controller in the same manner as provided in subsection (2)."

16. However, this aspect confirms that the parties may choose any other term to fix a responsibility, along with the registration cost, upon either party, including but not limited to the tenant, and the law has acknowledged this aspect. It depends upon the negotiation between the landlord and tenant at the time of execution of the rent agreement, considering the rate of rent and other conditions of the market, as well as of the building which has been selected for the purposes of lease. Therefore, the law clearly envisages respect for the voluntarily agreed terms between the parties. However, in case where nothing has been agreed, then the law has to take its own course as referred in the Stamp Act, the Registration Act, and the IRRO, 2001, accordingly.

17. I have confronted the lease agreement to the parties, wherein it is the lessor who hereby agrees to a duty referred to in clause 2 of the lease agreement which reflects that: "The lessor shall pay all taxes and other charges existing or to be assessed against the leased premises and on rental, except future water, telephone, electricity, and gas consumption charges, which shall be paid by the lessee." This aspect outrightly confirms that the obligations referred in subsections (1), (2), and (3) of section 5 of the IRRO, 2001 place the entire onus upon the landlord for registration of the lease agreement. This aspect has to be seen in terms of subsection (6) of section 5 of the IRRO, 2001, whereby, it appears that the phrase "any other agreement", also fixes the responsibility of the landlord to get the instrument registered, and he is also under an obligation to pay the costs, except the electricity, gas, water, or telephone charges, which are to be paid by the tenant as well. While going through the order sheet of the Learned Rent Controller, it appears that the order dated 12.05.2025, passed by the Rent Controller, highlights that: In response to the said order, both parties appeared before the Rent Controller on 29.05.2025, wherein an order has been passed by the Rent Controller in the following manner: But, surprisingly, owner of the premises, landlord/respondent No. 3, Tasneem Javed, has not opted to get the instrument registered; therefore, the Rent Controller imposed a penalty of Rs. 5,000/- upon respondent No. 3 for non-compliance with the order. Pursuant to section 28 of the IRRO, 2001, which gives wide power to the Rent Controller to impose a penalty if any order has not been complied with, or any provision of the Ordinance or the rules made thereunder were not observed, therefore, Rs. 5,000/- was imposed vide the order dated 27.05.2025.

18. Now, the question arises as to whether this penalty is sufficient to conclude the non-registration with no further consequence; the answer is in the negative. As other laws are also in the field, including the Registration Act, 1908, and the Stamp Act, 1899, though section 4 of the IRRO, 2001, has an overriding effect notwithstanding anything contained in any other law for the time being in force, or in any instrument or document. However, this will not give rise to an interpretation that when any person contravenes the provision or order of a Controller, he can only be liable to pay a penalty in terms of section 28; rather, the other laws, which are equally applicable in the specific position stated above, are also in the field, and their applicability has not been excluded by any provision of the IRRO, 2001. In this regard, I have already discussed the effect of section 17(d) read with section 49 of the Registration Act, 1908, as well as section 29(c) read with section 35 of the Stamp Act 1899, which states that if an instrument is not duly stamped, it is inadmissible in evidence, and no instrument chargeable with duty shall be admitted in evidence for any purpose by any person having, by law or consent of parties, authority to receive evidence, or shall be acted upon, registered, or authenticated by any such person or by a public officer, unless such instrument is duly stamped. Therefore, this Court is of the view that lease agreements of more than eleven (11) months are compulsorily registerable under section 5 of the IRRO, 2001, read with section 17(d) of the Registration Act, as well as in terms of section 35 of the Stamp Act, 1899, accordingly, and there is no cavil to the proposition that a document which is required to be registered and stamped could not be admitted in evidence under the law, and section 35 has provided a clear consequence of non-registration. The onus of showing that a document is not duly stamped is on the party impeaching the document under the Stamp Act. No doubt, the payment of stamp duty is not a question between the parties; rather, it is between the State/Government and the party who is to pay the stamp duty. In terms of 2012 CLC [Lahore] 1679 (Muhammad Hussain v. Malik Allahyar Khan), the Court cannot give effect to an agreement between the parties to waive objection as to stamp, and the proviso (a) to section 35 of the Stamp Act, 1899, is curative and covers situations according to which any instrument not stamped or insufficiently stamped would be admitted in evidence on payment of penalty. Therefore, in this backdrop, if objection is taken to the admissibility of a document on the ground that it is not stamped and registered, the Court must first decide both questions. If it finds that the document requires registration and therefore is inadmissible for being unregistered, the document itself will have to be rejected first, and the Court cannot first ask the document to be stamped and thereafter decide whether it would require registration. There are eventualities when a document is not duly stamped; the party must be alert and ensure that it is not admitted. However, it is the duty of the Court to determine the question of admissibility judicially as soon as it is tendered and before it is marked as exhibit as held in AIR 1961 [Supreme Court] 1655 (Javer Chand and others v. Pukhraj Surana). It is also trite law that an insufficiently stamped document cannot be acted upon, in terms of PLD 1984 [Peshawar] 2 (Mian Sher Rehman v. Muhammad Sharif Khan), but it is not invalid, as held in 1996 SCMR 575 (Sirbaland v. Allah Loke), or void, as held in 2003 CLD 232 (DB) (M/s ICEPAC Limited through Chief Executive and 6 others v. Asian Leasing Corporation Limited through Attorney and 2 others). Insufficiency of stamp, per se, could not be fatal to the suit, as held in PLD 1986 [Lahore] 29 (Allah Wasaya v. Irshad Hussain); therefore, an instrument not duly stamped, or not admissible in evidence for any purpose, such instrument being not invalid, could be admissible in evidence subject to the condition imposed by section 35 of the Stamp Act, 1899, i.e., on payment of deficient duty and penalty, as held in PLD 2002 [SC] 310 (M/s James Construction Company (PVT.) Ltd v. Province of Punjab). This Court has also been guided by the principle settled in 2021 CLD [Sindh} 629, Pakistan Mobile Communication Limited (Mobilink) and another v. Province of Sindh), wherein the Court held that: "Section 3 of the Act delineates instruments that are chargeable with stamp duty. The term "instrument" was defined to include every document by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished, or recorded. Section 29 of the Act determines the obligation to pay stamp duty and, inter alia, specifies that in the absence of an agreement to the contrary, the expense of providing the proper stamp duty shall be borne by the executant of the instrument. The term "executed" has been defined in the Act, with reference to an instrument, to mean "signed." Resultantly, if the parties agree to specific terms with regard to the cost of stamp duty or any fee to be borne by any party to the agreement, then that provision of the agreement shall prevail. However, in the absence of an agreement to the contrary, the pertinent duty is to be borne by the executant of the instrument.

19. Considering the above discussion it is evident that the parties are given preference to fix the duty of payment of the stamp fee or taxes accordingly. In the absence of the same, section 35 of the Stamp Act, 1899, read with section 17(d) of the Registration Act, 1908, provides that the lessee is to pay the duty or fee, as the case may be, for registration of the lease agreement.

20. Now, adverting towards the second important question raised in this case, wherein the amendment in section 5 of IRRO, has been made through Act XLVII of 2021 dated 01.12.2021, whereas the lease agreement was already in the field and a part period of the lease agreement had already expired, as the lease agreement was admittedly executed on 19.04.2018. That reflects that after 2021, the clauses of registration, in terms of section 5 of the IRRO, 2001, or in terms of the Registration Act 1908, read with the Stamp Act, 1899, are equally applicable. Therefore, the question arises as to whether the same has to be applied retrospectively or prospectively. This aspect has to be seen in the light of 2024 SCMR 700 (Commissioner Inland Revenue, Lahore v. Millat Tractors Limited Lahore), wherein this Court has been guided by the principle that a change in substantive law, which divests and adversely affects the vested rights of the parties, shall always have prospective application unless by express words of legislation and/or by necessary intendment/implication, such law has been made applicable retrospectively. The similar principle has also been upheld in the judgment reported as 2023 SCMR 111 (Controller General Accounts v. Abdul Waheed), 2013 SCMR 314 (Muhammad Tariq Baddar v. National Bank of Pakistan), and, 2009 SCMR 1279 (Commissioner of Income Tax v. Eli Lilly Pakistan). As a cardinal principle of interpretation of statutes, tax statutes operate prospectively and not retrospectively unless clearly indicated by the legislature; retrospectively cannot be presumed, as held in 2023 SCMR 1407 (Rajby Industries Karachi v. Federation of Pakistan) 2019 SCMR 446, (Member (Taxes), Board of Revenue v. Qaiser Abbas), and PLD 2016 [SC] 398 (Zilla Council, Jhelum v. Pakistan Tobacco Company), wherein insertion or deletion of any provision in the rules or the law, if merely procedural in nature, would apply retrospectively, but not if it affects substantive rights which had already accrued at the time when the un-amended rule or provision was in vogue, as held in (Abdul Waheed) case supra.

21. Considering the mandate of these provisions, as well as the judgments of the Supreme Court of Pakistan, this Court is of the view that the respondent No.3 / landlord is under an obligation to get the instrument registered by all means in terms of the stamp duty, pursuant to section 35 of the Stamp Act, 1899, and to get the instrument registered before the Rent Controller in terms of section 5 of the IRRO, 2001, from the date of the amendment, i.e., 01.12.2021, which is prospective in nature. For the purpose of clarity following principles shall be considered for registration of a lease agreement: i. All leases of any commercial property for a lease period exceeding 12 months are required to be registered with the Rent Controller at the specified rate under the Stamp Act, 1899. ii. The cost of registration of the lease agreement is to be paid by either party, i.e., the landlord or the tenant, as the case may be, against whom the responsibility has been fixed with the mutual consent of both sides in the lease agreement. iii. In case the responsibility for registration of the lease agreement has not been fixed in the lease agreement between the landlord and the tenant, then a lease document exceeding 12 months is required to be registered by the landlord under the law, and he is liable to bear the registration fee and charges of registration. iv. In case the landlord and the tenant acknowledge the relationship, as well as the period of the lease and other terms, during the proceedings under IRRO, 2001, before the Rent Controller, but the lease instrument is not registered, then in that eventuality the Rent Controller shall stay the proceedings and direct the party upon whom the obligation of registration has been fixed in the lease agreement, or under the law shall direct the landlord, to get the instrument registered accordingly. v. If the landlord or the tenant, as the case may be, fails to comply with the registration of the lease instrument despite the direction of the Rent Controller, the Rent Controller may impose a penalty under section 28 of IRRO, 2001, and even, in case of non-compliance with further directions, refer the lease document/instrument to the relevant office for calculation of its lease charges/fee/duty payable under the law, and shall pass a direction to the tenant to pay such cost, which shall stand deducted from the due rent, if the tenant is paying the rent on the direction of the Rent Controller in terms of section 17(8) of IRRO, 2001. vi. If the landlord refuses to pay those charges and the tenant has nothing to pay with regard to the rent liability, then the Rent Controller shall not proceed with the application for eviction or any other application pending before the Rent Controller unless the lease document is registered, and till such time the proceedings shall remain stayed. vii. If the Rent Controller issues a direction for registration of the instrument/lease agreement and the landlord fails to proceed, the Controller may continue with the pending proceedings at the cost of the landlord after receiving the rent, and the instrument shall be registered without the presence of the landlord or the tenant, as the case may be, and may pass a final judgment under the law after extending due rights to the parties under IRRO, 2001, and the effect of the judgment shall commence subject to the registration of the lease. viii. In the eventuality where the lease agreement was not registered and the same was tendered as evidence before the Rent Controller, the Rent Controller at the first instance shall ask the parties for its registration and payment of duties in terms of the principles settled here in above. ix. Any lease agreement which was not registered under the law prior to 01.12.2021 (the date of amendment of section 5 of IRRO 2001) is presented for registration then the lease period for registration has to be considered prospectively w.e.f 01.12.2021 for the remaining period of lease under the law." x. Despite provision of opportunity to the party for registration of lease agreement, if the party fails to do so, the Rent Controller shall in terms of section 33 of the stamp act immediately impound the instrument and proceed under the law including but not limited to the action under section 38 of Stamp Act, 1899.

22. Resultantly, instant writ petition is ALLOWED, with direction to the respondent No.3 to get the lease agreement registered accordingly. However, till its registration, the Rent Controller shall not proceed in the eviction proceedings filed under section 17 of the IRRO, 2001, till the instrument has been registered under the law. In alternate the Rent Controller shall impound the instrument in terms of section 33 of the Stamp Act, 1899, the instrument shall be referred for the purposes of registration, with or without the presence of the landlord, at his cost or in case of non-payment of stamp duty, etc. the Rent Controller may receive the due payment from the rent received from the tenant / petitioner and get the requisite duty paid accordingly and thereafter, proceed with the eviction application in accordance with the law within period of two months. MH/11/Isl. Petition allowe