1986 CLC 2229 (PLP)

(4) Was the defendant justified in refusing the offer of the plaintiff to submit the dispute as a special case under Order XXXVI of C . P. C . to a competent Court? If not, what is the effect? (5) Whetherthe defendant is competent to renew the lease on fresh terms and conditions as may be mutually agreed upon, or in the alternative get its plinth vacated? (6) Whether the suit is under valued? (7) Is the plaintiff entitled to the relief s prayed for? (8) What should) be the decree? The learned counsel for the parties while arguing generally, have mainly addressed on issues Nos. 1 and

2. I will, therefore, take issues Nos. 1 and 2 together:‑ ISSUES NOS. 1 AND 2: There is no dispute that the lease ‑expired on 17‑7‑1979 and no fresh lease was executed in favour of the plaintiff. By letter, dated 21‑7‑1979 the defendant intimated the plaintiffs about the rent which they would charge for the renewal of the lease. In the earlier lease the rent was charged at the rate of Rs.3.50 per sq. yard per annum, whereas now the demand was made at the rate of Rs.21.85 per sq. metre per annum and a security of Rs.1,56,000 was also demanded for faithful performance of the agreement. The learned counsel for the plaintiffs has contended that the renewal was to be made on terms and conditions mutually agreed upon, therefore, the demand made by the defendants is illegal as the plaintiffs have never consented to it. Clause 21 (vii) provides for renewal of the lease and reads as follows:‑ "(vii) The Board shall on written request of tenants made six months before the expiration of the term hereby created and on the tenants obtaining from the Chief Engineer a certificate that the premises and all buildings and erections thereon are in good and tentable condition and if there shall not at the time of such request by any existing breach or non‑observance of any of the covenants on the part of the tenants, hereinbefore obtained, provided there be no development scheme affecting the premises at the expense of the tenants grant to them a lease of the premises for a further term of 25 years on such fresh terms, covenants and conditions as may then be mutually agreed upon." Mr. Zari the learned counsel has contended that as the plaintiffs have not consented to the rate of rent neither it can be charged by the defendants, nor on refusal to pay this rent, the plaintiffs can be termed as a trespasser or in unauthorised occupation. In this regard the learned counsel has referred to the provisions of West Pakistan Urban Rent Restriction Ordinance under which notification was issued exempting the land and premises in Karachi Port Trust from the operation of this Ordinance. This Ordinance was repealed on 21‑11‑1979 and Sind Rented Premises Ordinance, 1979 was promulgated, but no notification exempting K.P.T. properties from the operation of this new Ordinance of 1979 was issued till 26‑3‑1981. Therefore, according to the learned counsel for the plaintiffs from 21‑11‑1979 till 25‑3‑1981 the property in dispute was governed by the provisions of Sind Rented Premises Ordinance, 1979. Referring to the definition of the word 'tenant' in the said Ordinance of 1979 the learned counsel contended that after expiry of the lease the plaintiffs have been in possession of the disputed property and are, therefore, tenant. Further, if the plaintiffs cannot be treated as tenant under the Sind Rented Premises Ordinance, they by virtue of section 116 of the Transfer of Property Act and the conduct of the defendants in accepting the plaintiffs as tenant, they cannot be treated in unauthorised occupation. On the other hand Mr. Zaheeruddin Khan, the learned counsel for the defendants has contended that from 7‑7‑1979 when the lease expired till 21‑11‑1979 the notification exempting the K.P.T. property issued under the West Pakistan Urban Rent Restriction Ordinance was in operation, therefore, as contemplated by Ordinance IX of 1962 the plaintiffs remained in unauthorised occupation. Consequently, when Sind Rented Premises Ordinance, 1979 came into force the status of the plaintiffs was of an unauthorised occupant and they cannot be termed as a tenant as provided by the said Ordinance. From the analysis of facts as stated above, which are not disputed it emerges that the defendants had offered for renewal of the lease at a rent of Rs.21.85 per sq. metre per annum, but it was not accepted by the plaintiffs, They all along reiterated that they would pay any, reasonable rent. According to Mr. Zari the new terms of lease ought to have been with mutual consent, but the terms and conditions offered by the defendants were unilateral, arbitrary and exorbitant. The learned counsel has referred to Chambers Dictionary, Law Terms and Phrases by Michal, Warton, Law Laxicon and Stroud's Judicial Dictionary to show the meaning of the word 'mutual' which means 'inter‑change', 'practically common and jointly shared by two or more persons', 'shared in common'. There is no dispute about the meaning of the word 'mutual' but the fact remains that there is no consensus between the parties to the terms and conditions of the new lease. The plaintiffs did not even indicate what would be the reasonable rent for the plot in their possession. It is true that when the terms of lease are to be settled mutually it should be decided with the consensus of the parties, but in the present case they have failed to come to terms jointly. At a time when the lease expired West Pakistan Urban Rent Restriction Ordinance was applicable, therefore, during the intervening period namely from 7‑7‑1979 till 21‑11‑1979 the relationship between the parties was to be governed by the terms of the lease, the provisions of the Transfer of Property Act and the Port Authorities (Land and Building Recovery of Possession) Ordinance, 1962, if applicable. According to Mr. Zari the defendants as by filing Suit No. 339 of 1981 for recovery of rent for the period 1‑7‑1979 to 30‑6‑1980 have consented and accepted the plaintiffs as their tenant. To support this contention the learned counsel has referred to the provisions of section 116 of the Transfer of Property Act which reads as follows:‑ "

116. If a lessee or underlessee of the property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or underlessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as specified in section 106." In this regard the learned counsel has referred to Zahir Ahmed v. Seth Sugnichand P L D 1965 Kar.

195. In this case the plaintiff had entered to sell the property to the appellant and sale‑deed was to be executed within four months during which period the appellant was to remain as tenant. The transaction did not materialise and the appellant continued in possession for about two years. When the respondent filed suit for specific performance of the contract as well as for recovery of rent for the period during which the appellant was in occupation of the premises the appellant raised objection that as the tenancy was for four months the respondent was not entitled to claim rent at the specified rate after the expiry of four months. After referring the section 116 of the Transfer of Property Act the following observation (sic):‑ " In the present case it is true the monthly lease was for a period of four months and that was because it was contemplated that during this period the property would be conveyed to the defendants under the agreement of sale. But this slid not take place and the defendants continued in possession anti the plaintiff had, in our opinion, assented to the continuing in possession of the defendants of the leased premises. The four months of the lease expired on 24‑7‑1949 and the defendants continued in possession without any objection by the plaintiff. Years passed and the plaintiff claimed rent.' In these circumstances it must be held that the plaintiff had assented to the defendants continuing in possession, and, therefore, the lease must be held to have been renewed from month to month because that was the purpose of it as specified in section 106 of the Transfer of Property Act. it was held in the case of Dougal v. McCarthy that a demand for rent or a suit for rent are circumstances from which such an assent of the lessor can be inferred. The same view was taken in the case of Balaji. v. Ramchandra. Both these decisions were relied upon by a Division Bench of the Lahore High Court in the case of Muhammad Saeed v , Khushi Muhammad. It was held that the landlord can be said to have 'otherwise assented' to the tenant's continuing in possession if from time to time, as the situation required, they had filed a suit for rent. It was held in this case that the provisions of section 116, Transfer of Property Act, were attracted in this case. We are in respectful agreement with the view taken in these cases and hold that the lease in the present case was renewed from month to month as from 24th July, 19$9 after the expiry of the period of four months which was originally agreed between the parties. That being so the defendants are liable for rent to the plaintiff at the rate of Rs.100 per month from 24‑3‑1949, till the date of the suit and till the date of the decree as ordered by the Court below." It is thus authoritatively laid down that where a person has entered into the premises as a tenant and after expiry of the lease continues in possession without any objection by the landlord and if suit for recovery of rent is filed against the tenant it implies that the landlord has consented to his continuing in possession as tenant. Section 116 of the Transfer of Property Act contemplates that where after expiry of lease rent is accepted by the landlord from the lessee or he does not object to the continuance of the possession of the tenant, or demands or recovers rent from such lessee then the landlord shall be deemed to have accepted him as a tenant. Not raising any objection to the possession and filing a suit for recovery of rent has been held to be covered by the term "otherwise assents to his continuing in possession". It is pertinent to note that in the referred case no issue was raised by the tenant about the quantum of rent or agreement to) pay rent as mentioned in the deed. The learned counsel has referred to Mustaqeem Ali and 3 others v. Shafiquddin and 5 others P L D 1971 SC 170 where a person after the termination or the lease held over the property for about 33 years without break or interception, it was held that there is a presumption of holding over of tenancy by the tenant. In this regard reference can be made to Muhammad saeed v. Khushi Muhammad P L D 1965 Lah.

796. Distinction has to be drawn between a tenant continuing in possession after the determination of the lease without the consent of the landlord and a tenant doing so with landlord's consent. Reference can be made to Rehman Cotton Factory v. Nichimen Co. Ltd. P L D 1976 S C

781. A tenant occupying without the consent of the landlord is a tenant by sufference and his status is no better than a trespasser and can be elected at any time without any notice to him. Reference can be made to Noor v. M. Singh 53 IC 18 (PC), and Punjab National Bank v. S.B. Chaudhry 1943 Oudh

392. It may be noted that this rule applies where the provision of the Rent Restriction Ordinance do not override Transfer of Property Act. Under section 116 if after termination of the lease, the tenant continues in possession and the landlord accepts rent or otherwise consents, to his remaining in possession such action has the effect of converting the tenant by sufferance into a tenant at will. In order to justify the holding over with the landlord's consent it just be proved that the landlord has either accepted or otherwise assented to the tenant's continuing in possession. This is subject to the condition that the lease‑deed does not contain the terms of holding over. In section 116 the term "in the absence of agreement to the contrary" have been held to mean an agreement to the terms of the holding over. Reference can be made to Gobinda v . Dwerka 26 I C 962 and Dasreted v . Barat A I R 1934 Cal. 135 in which reliance was placed on (1905) 32 Cal.

123. In the present case the renewal clause of the lease provides the terms of holding over. The main condition is that the terms and conditions shall be decided with mutual consent. The parties have not reached to any mutual consent and the claim made by the defendants for renewing the lease has not been accepted by the plaintiffs. Therefore, unless there is a mutual consent between the parties settling the terms and conditions of the lease, it cannot be presumed that both the parties have agreed to complied with the renewal clause. To show that the defendants have consented to the plaintiff's holding over they have mainly relied on Suit No. 339 of 1981 filed by the defendants claiming rent from 1‑7‑1979 to 30‑6‑1980. This suit was filed on 10‑5‑1981 is which it has been alleged that the plaintiffs have failed to pay rental dues in spite of reminders and when notice under section 84 of the Karachi Port Trust Act was served the plaintiff filed the present suit which does not debar them from claiming rental dues. In paragraph 6 it is alleged that an amount of Rs.65,380 is outstanding against the plaintiffs as rent and in the prayer clause also relief has been sought for recovery of this amount as rent for the use and occupation of the plot subject to the plaintiff's right to recover further rent for the period commencing 1‑7‑1980. By referring to these averments in the plaint Mr. Zari contended that although an objection was raised that in view of the demand of the defendants in this suit the Court has no jurisdiction as the matter is governed by the Sind Rented Premises Ordinance, 1979, no amendment were sought in the plaint, 1 have heard the suit filed by the defendants with ?he present suit and at stage the defendants sought permission to convert the suit into a suit for recovery of charges/damages for use and occupation of the premises. The maintainability of such a claim will be considered in that suit but for the purpose of the present suit I have to consider whether such a suit filed by the defendants amounts to a consent for holding k over the premises. From the evidence it is clear that from the very beginning when the lease had expired the defendants had been protesting against the plaintiff's possession and demanding rent which was not acceptable to the plaintiffs. The defendant's Board passed a resolution for taking action against the plaintiffs served a notice under section 84, and even threatened the plaintiffs to take action under the Criminal Procedure Code and Ordinance IX of 1962. As is clear, in the year 1981 even a case for ejectment and recovery for the dues was filed under Ordinance 1X of 1962 and the plaintiffs hal to rush to the Court to file an application under Order XXXIX, rules 1 and 2, C.P.C. and order was passed in September, 1984 whereby the plaintiffs were ordered to pay rent at the previous rate to the defendants and the balance of the enhanced rent was to be deposited in Court. This shows that although the defendants filed a suit in 1981, from 1979 till the suit was filed, and, thereafter, they had been protesting and asking the plaintiffs to pay the rent as demanded by them and on that condition they were agreeable to accept the plaintiffs as tenant to which the plaintiffs never agreed. In these circumstances, I am of the view that mere filing of suit No. 339 of 1981 does not imply that the defendants have otherwise assented to the continuance of possession of the plaintiffs as tenant. Demand made in the suit is at a rate which the plaintiffs are not agreeable to pay. Filing of suit would have amounted to defendants' consent for holding over if the plaintiffs would have accepted the rent claimed by the defendants. I am strengthened in my views by the observations made in Bachu Narain Singh and others v. Muhammad Umrao and others A I R 1940 Pat. 555 where after the expiry of the lease the landlord served a notice on the tenant to pay rent at higher rate or quit the land. The landlord filed suit for recovery of rent. It was observed as follows:‑ "Where there is nothing to indicate that landlord has declined to consent to the tenant holding over after the expiry of the lease, the institution of a suit for rent may well be deemed to be an expression of assent to his holding over. But when the landlord, according to his own admission, has for four or five years t protested against the defendant holding over and then has instituted a suit for rent, 1 do not consider that the amount to a consent to his holding over from the expiry of the period of the Thike. It is consistently with the landlord's conduct and can merely be evidence that after a period of years the landlord himself changed his mind with regard to what he wanted to do. I would, therefore, hold that in the present case the plaintiff is not entitled to recover rent from the defendants." My finding is that the defendants have not consented to the holding over by the plaintiffs and, therefore, they cannot be termed as tenant. During the period 7‑7‑1979 to 21‑11‑1979 the relationship was governed by the terms of the lease and the provisions of the Transfer of Property Act and such other legislations which were applicable to the case. As the plaintiffs were not tenant, the question of restoration of their status as tenant on implementation of Sind Rented Premises Ordinance does not arise. The learned counsel for the plaintiffs has relied on the definition of tenant in the Sind Rented Premises Ordinance which provides that tenant means any person who undertakes 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 any person who continues to be in possession or occupation of the premises after the termination of his tenancy. Therefore, in order to attract this provision, on the promulgation of Sind Rented Premises) Ordinance a person claiming to be a tenant under it should been in occupation or possession of the interpretation of the learned counsel for the plaintiff is accepted then even a trespasser, if he undertakes to pay rent shall automatically become a tenant. The status of the plaintiffs had changed on 7‑7‑1979, because from that date they could be treated as tenant if terms and conditions of renewal had been mutually agreed upon. The learned counsel for the plaintiffs contended that the rent claimed by the defendants is arbitrary, exorbitant and unconscionable. The plaintiffs have not led any evidence to prove the prevalent rent for similar properties in the locality. They only stated that in 1964 the rent was Rs.3.21 per sq. yard per annum and now the plaintiffs are demanding Rs.21.85. On the other hand the plaintiffs have led evidence that almost all the tenants are paying rent at the rate demanded by them. The defence witnesses have produced the resolution of the Board as well as the documents to show that before fixing this rent the defendants had examined all the aspects of the case and had undertaken reasonable exercise to arrive at this conclusion. The plaintiffs have named some tenants to establish that they are not paying rent @ Rs.21.85 per sq. metre per annum. None of them have been produced nor any specific evidence has been led to establish that the defendants are not charging rent at the rate they have demanded from the plaintiffs. From the evidence on record it seems that the demand of the defendants is not unreasonable or arbitrary. The next contention of the learned counsel for the plaintiffs is that the defendants cannot press into service the provisions of Ordinance IX of 1962 as the land is not held for the purpose of working and administration of the port. This has a direct reference to the definition of the words "land or building" given in Ordinance IX of 1962 which reads as follows:‑ "(c) 'Land or building' means land or building or part thereof, which vests in, or is in the possession or under the management or control of a Port Authority, and is used or held for purposes connected with the administration and working of the port." The learned counsel has referred to various legal dictionaries and contended that the words 'administration' and 'working' exclusively relate to the powers and functions exercised by the Board within the limit of the Karachi Port Trust Act. There can be no dispute with the meaning of the words 'administration and working' of the port. The definition is wide enough and is not restricted to land used or held for the administration and working of the port. If the land or building is held for any purpose connected with' the administration and working of the port it will be covered by this definition. The words 'purposes connected with' have wide meaning and the definition cannot be limited to the land and building which are used exclusively for the purposes of administration of working of the port. The word 'connected' means tied or fastned together, established, linked, related or attached." Therefore, if the land is held for any purpose which is in any manner connected or concerned with the administration and working of the port it will be covered by the definition. A perusal of the provision of the Karachi Port Trust Act will show that the Board of Trustees has to employ servants and engage employees. It has to carry out the work with regard to wharfs, jetties, ware‑houses, light houses, light ships, pilot boats, reclamation of shores and many other works specified in sections 29 to 39 of the Karachi Port Trust Act. The Board derives its income from dues and charges recovered by it and also from the rents of the properties. Section 61 of the Act provides that the moneys belonging to the Board shall be held in trust and will be applied as provided by law which amongst others include payment of salaries, fee, allowances, pensions, gratuities, compensation, provident funds, interest on the installments of capital due in respect of loan, charges payable by the Board, contribution in connection with harbour, police, security staff, cost of repairing and maintenance of the properties, cost of work, plants, vessels or applicant. Therefore, the entire fund is available for carrying out the management and administration of the port. The lands, therefore, have connection with the management and administration of the port as the funds realised from letting them out are spent on its maintenance, development, administration and management. My finding on issue No. 1 is that the defendants' demand is reasonable. My finding on issue No. 2 is in the affirmative. ISSUE No. 3: The admitted position is that the lease has expired and there is no mutual agreement for its renewal. The defendants are agreeable to renew the lease provided the plaintiffs pay the rent at the rate demanded by them which they have refused to pay. Therefore, in terms of lease deed no renewal of the lease can be spelt out. The lease‑deed provides that if the lease is not renewed the plaintiffs will vacate the premises and remove their structure, offices and buildings. In these circumstances as the lease has expired the defendants are entitled to eject the plaintiffs. The question, of breach of terms of lease does not arise as after the expiry of lease no fresh lease has been executed between the parties. ISSUE No. 4: The plaintiffs had offered the defendants to refer the matter for the opinion of the Court under Order XXXVI, Rule 1, C.P.C. but it seems that the defendants did not agree. The provisions of Order XXXVI, Rule 1 can be invoked if both the parties agree to refer the dispute in the form of a case for the opinion of the Court. There is no agreement between the parties, therefore, the question of reference does not arise. No party can be forced to refer the matter to the Court for opinion and mere refusal to accept such an offer does not affect the merits of the case. The defendant's refusal has no hearing on the present case. ISSUE No. 5: In view of the discussion under issues Nos. 1 and 2 the lease can be renewed only on the terms and conditions, which may be mutually agreed upon. In case there is no mutual agreement, the plaintiffs have to vacate the premises. ISSUE No. 6: Not pressed. ISSUE No. 7: In view of the above discussion my finding is in the negative. ISSUE No.

8. The suit is dismissed with cost M . B . A Suit dismissed.