WAHID BAKHSH Versus RUSTAM ALI

The appellant has called in question the order of Mr. Zahir Ahmad Khan Yt!sufi, Additional District Judge, Nnultaa dated the 6th March 1912, dis missing his appeal against the order of his ejectment passed on the 30th October 1971, by the Rent Controller, Multan, under section 13 of the West Pakistan Urban Rent Restriction Ordinance, 1959, from a portion of property No. 1003, Ward No. 10, Tugluq Road, Multan.

2. This property was transferred by the Settlement Department by auc tion in favour of the respondent on the 30th November 1960, and a P. T. O. was issued in his favour on the 21st February 1961. A notice under section 30 of the Displaced Persons (Compensation and Rehabilitation) Act, 1958, dated the 15th September 1961, was served by the respondent upon the appellant. On the 1st April 1962, by a compromise between the parties, the appellant agreed to vacate the portion in his possession and to surrender its possession to the respondent. The respondent on the other hand agreed to rent out two rooms along with the Chaubara and courtyard to the appellant at a rent of Rs. 10 per month.

3. On the 17th November 1965, an application for ejectment of the appellant from the portion about which the rent note was executed was insti tuted on ground of default in payment of rent from the date of execution of the rent note. During the pendency of this petition, however, an application for amendment was submitted by the respondent in order to enable him to set up statutory tenancy under section 30 of the Displaced Persons (Compen sation and Rehabilitation Act, 1958, and to plead default in payment of rent despite the notice dated the 15th September, 1961, within 90 days from the date of its service. This petition was rejected by the learned Rent Controller. The learned Rent Controller found on merits that the appellant had tendered rent from 1-4-1962 (the date of execution of the rent note) and had deposited it before the Rent Controller. He, therefore, dismissed the petition for ejectment.

4. The respondent filed an appeal which was allowed on the ground that the learned Rent Controller ought to have permitted the amendment of the petition. The matter was, therefore, remanded for a fresh decision after allowing the amendment petition.

5. After remand the respondent based his claim upon the alleged default in the payment of rent notwithstanding the service of the notice within the period prescribed by section 30 of the above Act. Ultimately, the following issues were decided by the learned Rent Controller

(1) Whether the relationship of landlord and tenant exists between the parties?

(2) Whether the requisite notice was served on the respondent?

(3) Has the respondent paid or tendered rent to the petitioner in. time?

(4) On proof of issue No. 2 whether the said notice was valid?

(5) Whether the respondent has not paid rent from the date of the P. T. O. and before the execution of the rent deed? If so, what is its effect ?

(6) Relief.

Issue No. 1 was answered in favour of the respondent mainly on the ground that the execution of the rent‑deed was sufficient to prove that relation ship of landlord and tenant existed between the parties. Under issues Nos. 2 and 4 it was held that a notice demanding a rent of Rs. 20 was served upon the appellant and the mere fact that excessive rent was claimed could not invalidate that notice. Issues Nos. 3 and 5 were also taken up together and it was held that after the expiry of three months' period from the date of service of the notice the appellant who had failed to pay rent had become a defaulter. The learned Rent Controller relied upon some observations of the learned appellate Court in the order by which the case was remanded to him. Conse quently, he passed an order of ejectment against the appellant.

6. The appellant filed an appeal which was dismissed. It was held by the learned appellate Court that the appellant had received the notice under section 30 and this notice was valid. Regarding the payment or tender of rent for the period commencing from 1‑4‑1962 to March 1967, the learned Additional District Judge held that this was fully proved by the production of receipts Exits. R. 2 to R.

6. He, however, disbelieved the evidence produced on behalf of the appellant in the form of receipt Exh. R. 12 in proof of payment of arrears of rent within three months of the service of the notice under section 30 of the above Act. He, therefore, found that the appellant had de faulted in the payment of rent prior to the 1st April 1962, within the period prescribed by section 30 and was as such a defaulter.

7. The learned counsel for the appellant contended that in the present case the appellant had entered into a fresh contractual tenancy after surrendering a portion of the original lease‑hold, and as such he was not governed by section 30 of the above Act. The landlord had foregone his rights by accepting surrender of a portion of the property and as such the new tenancy which came into existence was outside the pale of that section. He further argued that the respondent had paid rent by receipt Exh. R. 1 2 but even if it is held that the finding of the learned Additional District Judge about this document is a finding of fact, it should be held on the basis of new tenancy that the default, if any, made earlier, was waived. He also argued that according to the evidence, the rent of the portion in possession of the appellant on the date of transfer of the same in favour of the respondent was Rs. 6 only. The appellant had deposited before the Rent Controller the following sums vide Exhs. R. 2 to R. 6:‑

Receipt Amount Date

Exh. R/2 Rs. 90. 00 2‑5‑1962

Exh. R/3 Rs. 120. 00 December 1962

Exh. R/4 Rs. 120 00 4‑1‑1964

Exh. R/5 Rs.120. 00 12‑3‑1965

Exh. R/6 Rs. 150. 00 13‑1‑1966

He contended that even if the last receipt which relates to deposit of rent during the pendency of the petition for ejectment is left out of consideration, the appellant had deposited a sum of Rs. 450 as rent up to the 31st of December 1965. If it is held that the appellant is a statutory tenant whose tenancy is regulated by section 30 of the Displaced Persons (Compensation and Reha bilitation) Act, 1958, the appellant would be liable to pay only Rs. 6 per month as rent and a total sum of Rs. 350 from the date of P. T. O. to the 31st of December 1965. He had thus paid a sum in excess of the above amount. Lastly, he urged that this was a case in which assuming that there was a default, the discretion should have been exercised in favour of the appellant as this default was to,) technical or in any case it should be deemed to have been waived.

8. The learned counsel for the respondent on the other hand relied upon the principle of law as declared by their Lordships of the Supreme Court in E. A. Evans v. Muhammad Ashraf (PLD 1964 SC 536) and argued that the tenancy being a statutory one, the execution of the rent note would rot turn it into a cont ractual tenancy. In regard to the question of default, however, in reply to the argument of the learned counsel that the entire amount had been paid at the rate of Rs 6 per month, he contended that firstly the appellant became defaulter no sooner he failed to comply with the direction in the notice under section 30 of the above Act to pay rent within three months of the service there of and secondly the rent should be calculated at the rate of Rs. 10 per month which is the rent agreed upon in the rent note. He further argued that the question of waiver in the present case is not material since this is a statutory right of the respondent to declare the appellant a defaulter when he failed to pay the rent as stated above in accordance with section 30 and just as it was not possible for the parties to contract out of the rights statutorily given by section 30, it was not possible for them to waive non‑compliance with those provisions.

9. It would be seen that the argument of the learned counsel for the respondent is self‑contradictory. On the one band he has placed reliance upon the principle laid down in Evan's case that the parties for whose benefit the statutory provisions bad been made cannot contract out of it, and such a contract being one which renders the provisions of the Act ineffective is bad on account of the provisions of section 23 of the Contract Act. On the other hand, when dealing with the payment of rent, he relied upon the contractual rent agreed upon between the parties in the rent note.

10. 1 do not agree with the argument that despite the contract dated the 1st April 1962, and the rent note executed in consequence thereof, the tenancy of the appellant remains statutory. In view of the finding of the learned Additional District Judge that no rent was paid by the appellant within three months of the date of service of the notice under section 30 of the above Act, the appellant had forfeited six years' protection conferred upon him by proviso (b) to subsection (1). Subsection (3) provides that nothing in proviso (b) to subsection (1) shall apply to a tenant who has not paid or tendered rent or arrears of rent due for any period after transfer within three months from the date of receipt of notice of demand sent to him by the transferee by a registered post (acknowledgment due). Subsection (4) provides that in such circumstances the relationship of landlord and tenant between the transferee and the tenant shall be regulated in accordance with law for the tithe being in force relating to such relationship. The relationship between the parties came to be regulated after expiry of 3 months from the date of service of notice by the West Pakistan Urban Rent Restriction Ordinance, 1959. It cannot be doubted that under these provisions the landlord can waive the default and enter into a fresh contract of tenancy or can regulate the same tenancy by fresh terms. The contractual tenancy was therefore legal and binding between the parties. Evan's case is clearly distinguishable.

11. The principle laid down in Evan's case is that a contract which takes away the benefit and protection given to a tenant by section 30, will not relieve the landlord of his duties towards the tenant and if this is done it will amount to evasion of the statute. It was for this reason that it was first found cut that the section provided for protection to the tenants.

It was further observed as follows:‑

"The Schemes framed under the Act gave a preferential right to claimant displaced persons to obtain transfers of evacuee premises in their occupation. This would inevitably affect a large number of displaced persons occupying such premises who had not been successful in obtain ing their transfer. The legislature could not possibly have intended to leave theca at the mercy of the transferee or to give them no protec tion even fun a reasonable period during which they might be able to find alternative accommodation or rehabilitate themselves other wise."

It was then found that this section "was not intended to protect private rights, for, mere allottees did not by the allotment alone acquire any right in the property but were designed as a matter of public policy to give general protec tion to such occupants not only as to irremovability for a reasonable period but also as to occupation upon payment of a reasonable rent." The section being for the protection of the tenants only, it is only the tenants, who can claim in a Court of law that the contract contrary to that section is void and not the landlord. However, a landlord who had taken an undue advantage under that contract cannot be allowed to depend upon the void nature of the contract in any other respect.

12. The case of E. A. Evans is distinguishable for another reason also. In that case no notice had at all been given by the landlord to the statutory tenant and without any consideration the tenant had executed a rent note making himself liable to pay enhanced rent. It was not only a case of contract ing out of the protection afforded by section 30 but also entering into such a contract without consideration. This aspect of the case was also consi dered by their Lordships of the Supreme Court and it was held that assuming that contracting out was possible the contract could not be enforced for the reason that there was no consideration moving, from the landlord for which the tenant would pay a! double the premises. The respondent landlord in that case had admitted that when the appellant agreed to pay the enhanced rent he said that he should not he evicted even after the expiry of the period of statutory protection which was thin three, years but he did not say whether fie agreed to this condition. It was, therefore, observed that if he did not by express words or by tacit conduct, accept this condition of the appellant. there was no consideration at all for payment of the enhanced rent. On the other hand, if he tacitly did accede to this request. then by giving notice before the expiry of the period of statutory protection of three years he withdrew the consideration and the same became wholly non‑existent. In such circum stances, section 72 of the Contract Act would apply and the other contracting party would be absolved from performing his part of the contract and if he :has done anything or paid anything in pursuance of that contract then he would be entitled to ask for restitution and reversion to the position quo ante. It was observed that the respondent landlord cannot be allowed to claim ,inconsistent rights and "if he accepts the higher rent and treats the tenant as not a statutory tenant but a contractual one, then he must abide by his con tract. He cannot unilaterally resile back to the position under section 30 and treat the tenant as a person woo has bean deprived of the protection there under and thus become liable to eviction." This observation applies with full force to the facts of the present case also.

13. Regarding the question of waiver also it was held that the provi sions under section 30 cannot be construed to prevent a tenant from giving up ‑the possession of the premises in his occupation of his own wish. Similarly, even there may be nothing in the Act to prevent a tenant from voluntarily paying more than the rent chargeable under the Act but he cannot enforce this agreement in a Court of law. In this connection it was observed hat .

"The provisions in the section that it shall be lawful for the transferee to charge rent on the basis of the last assessment by‑ necessary implication makes it unlawful for him to charge rent at a different rate upon the well known principle of expressum facit cessare taciturn . . . . . . "

14. Reference was made to the following passage from the Maxwell's Interpretation of Statutes, 11th Edition, page 376:‑

"Everyone has a right to waive and to agree to waive the advantage of a law or rule made solely for the benefit and protection of the indivi dual in his private capacity, which may be dispensed with without infringing any public right or public policy. Where in an Act there is no express prohibition against contracting out of it, it is necessary to consider whether the Act is one which is intended to deal with private rights only, or whether it is an Act which is intended, as a matter of policy, to have a ;pore extensive operation," and it was held that section 30 was not intended to protect private rights but as a matter of public policy to give general protection to occupants in regard to eviction and payment of rent.

15. The principle laid down therefore in this authority about the waiver will not apply when the waiver is by a landlord. It will apply to the benefits of the occupant for whose protection section 30 makes provisions. Looked 3n this context. the principle laid down in Maxwell's Interpretation of Statutes will apply and it will be open to the landlord to waive the payment of arrears of rent. This waiver is also with consideration since the landlord has taken possession of portion of the property under lease from the tenant. That this had been waived by the landlord is also clear from the fact that the landlord based his petition for ejectment initially on the default in payment in accordance with the contract dated the 1st April 1962. It was only later that he applied for the amendment of his petition. The right to the arrears of rent within time having been waived, it is too late in the day for the respondent to rely upon that right.

16. Independent of the provisions of section 30 of the' above Act also the landlord cannot rely upon the default, if any committed before the contractual tenancy came into being on the 1st April 1962. The original tenancy ceased with the creation of the later tenancy on the principle of surrender.

17. Surrender has been defined in 'Woodfall's Law of Landlord and Tenant, 23rd Edn. at page 373 as follows:‑

"A surrender is the yielding up an estate for life or years to him who has the immediate estate in reversion or remainder, wherein the estate for life or years may merge, by mutual agreement."

In Muhammad Sohrab Ali v. Bazlur Rahman (1968 SCMR 314) this word is defined as "an yielding up of the term by the lessee to the person who has the right to surren der, or, in whom the immediate reversion expectent on the term is vested. The Transfer of Property Act in its section 111 (e) and (f) provided for deter mination of lease by surrender express or implied. The relevant portion of this section is as follows:‑

"A lease of immovable property determines:‑

(a)

(b)

(c)

(d)

(e) by express surrender; that is to say; in case the lessee yields up his interest under the lease, to the lessor by mutual agreement between them;.

(f) by implied surrender;

(g)

(h)

Illustration to clause (f) :

A lessee accepts from his lessor a new lease of the property leased, to take effect during the continuance of the existing lease. This is an, implied surrender of the former lease, and such lease determines there upon."

18. According to Woodfall's Law of Landlord and Tenant (pages 376 & 377), the reason why such acceptance of a new lease operates as a surrender of the first is, because the lessee, by accepting the new lease, has been party to an act, the validity of which be is afterwards estopped from disputing, and which would not be valid if the first lease continued to exist, for he would be estopped from saying that the lessor had no power to make the new lease; and as the lessor could not grant the new lease until the first lease was surrendered the. acceptance o; a nevvN lease is of itself a surrender of the first. Applying this principle to the present case it will be manifest that the parties are bound by the new lease and just as the tenant is estopped from disputing the validity of surrender, so the landlord is also estopped for relying upon the surrendered lease. The landlord could not, therefore, filed the petition for ejectment an the basis of default prior to the creation of the new lease.

19. During the arguments I enquired from the learned counsel for the respondent whether the respondent would be willing to restore the benefits which he had received under the contract dated the 1st April 1962, and to give back the possession of the portion of the lease hold taken by him. This question apparently surprised him, and re argued that this was not within the jurisdiction of this Court to order restoration of these benefits. But I am not inclined to pass such an order. This question was meant to show to the learned counsel that he was insistent upon taking advantage of the contract elated 1st April 1962 where it suited him. The contract in the present case is inseparable. It is either bad in toto or absolutely innocuous. It stands or fails as a whole. In the latter case the tenancy becomes contractual. In the former case the respondent cannot be allowed to rely upon a part only while resiling from the rest. Moreover, no Court can help the respondent in view of the principle of pari defcto.

20. When a transaction is entered into for an unlawful purpose and, that purpose has been achieved, the Court will not interfere at the instance of the particeps criminis to relieve him from the legal effect of the transaction'. For this reason it was held in‑

Dip Narain Singh v. Nageshar Prasad and others (A I R 1930 All. 1 (F B))

Defvanayaga Padayachi v. Muthu Reddi and 2 others (1 L R 44 Mad. 329) that if a void contract has been carried out and consideration has been passed the promisor may not in equity be allowed to go back upon it without restr ing the benefit which he has received. But if the promisee comes to Court to enforce it he would receive no help from a Court of law. This is based on the principle that when the parties to a contract are themselves in pari delicto neither of them is entitled to ask relief from a Court of Law and the Court will not come to the aid of either party to retrieve his position., This principle has received recognition from the Supreme Court of Pakistan in Muhammad Hayat Khan v. Yar Muhammad Khan.( PLD 1966 SC 612)

21. For all these reasons, I find myself unable to maintain or endorse the findings of the learned Additional District Judge and the Rent Controller on issues Nos. 3 and 5. I hold that the appellant had tendered rent to the respondent in time and had also been depositing advance rent for each year. The parties were governed by the contract between them and no question arose of there being any default in rent from the period prior to the 1st April 1962. I allow the appeal with costs throughout and dismiss the ejectment. petition filed by the respondent.

K. B. A. Appeal accepted.