MRS. ALIMA AHMAD vs AMIR ALI
This matter involves a petition for leave to appeal against a judgment of the High Court of Sind, which had set aside an eviction order against a tenant. The petitioner, a landlady, sought the tenant's ejectment on grounds of default in rent payment for the period between April 1970 and February 1971. While the Rent Controller initially refused eviction due to the landlady's history of accepting accumulated rent, the first appellate authority reversed this, finding no change in the tenancy terms. However, the High Court subsequently held that because the original tenancy agreement had expired, the specific stipulations regarding the time and manner of rent payment were no longer binding, allowing the tenant to pay within sixty days. The Supreme Court granted leave to appeal, noting that the High Court's reasoning regarding the expiration of tenancy terms required a more authoritative pronouncement. The core issue concerns whether the terms of a tenancy agreement, specifically regarding the time and manner of rent payment, persist when a tenant continues to hold over after the expiry of the original agreement.
- Does a tenancy agreement's stipulation regarding the time and manner of rent payment continue to apply when a tenant holds over after the agreement expires?
- Can a landlord's practice of accepting accumulated rent be used to excuse a tenant's default in payment?
- Is judicial discretion in rent matters exercised arbitrarily if it ignores the express terms of a tenancy agreement?
ORDER
SHAFIUR RAHMAN, J.-The Petitioner, a landlady, seeks leave to Appeal against the judgment of the High Court of Sind, dated 23rd November, 1980 whereby the tenant's second Appeal was accepted and the order of the Rent Controller, refusing ejectment of the tenant in spite of holding him, to be a defaulter was restored.
2. A written tenancy agreement was executed by the Respondent on 1 st August, 1968 whereby he became tenant of a portion of shop at rent of Rs. 175 p. m. Payable in advance by the 5th of the calendar month. Another sum of Rs. 175 was deposited by the tenant which was refundable on vacating the premises. The tenancy agreement was for eleven months but the tenant continued holding over.
3. The Petitioner sought eviction of the Respondent on the ground of default for the period April, 1970, to February, 1971. The Rent Controller refused ejectment on the ground that "The conduct of the Appellant shows that she has been accepting accumulated rent from the Appellant sometimes in cash and sometimes in cheques and therefore there is no wilful or deliberate default committed by the Appellant in payment of rent to the Applicant."
4. That first appellate authority reversed the order of the Rent Con--troller holding that "The mere fact that on certain occasions the Appellant/landlord accepted accumulated rent does neither alter the legal position nor the terms and conditions of the agreement are altered thereby automatically."
5. In Second Appeal the learned Judge of the High Court held that as the tenancy agreement had expired the stipulation of payment of advance rent and by the 5th of the calendar months had become archaic and the tenant could pay the rent within sixty days of the -rent becoming due.
When. Even by that formula the tenant was found to be a defaulter, it was held that the discretion could still be exercised in his favour because of landlady's practice of accepting accumulated runt.
6. The learned counsel for the Petitioner contends that it is not possible to argue that a tenant holding over continues on the same rate of rent but not with regard to the manner and the time of its payment. With the rent goes not only the rate but also the manner and the time of its payments.
Further, the learned counsel submits that judicial discretion has always to be exercised on sound equitable principles in conformity with the law conferring discretion as opposed .To its arbitrary or fanciful exercise.
7. We find that a more authoritative pronouncement of this Court is called for and leave to appeal is therefore granted. Security for cost to be furnished in the sum of rupees two thousand. The Appeal to be made ready on the present record with liberty to the parties to file addi--tional documents.