HASSAN Versus FANCY FOUNDATION

1. MUHAMMAD GUL, J. This judgment deals with 10 civil appeals by special leave, viz. C. A., Nos. K-3 of 1972 to C. A. K-12 of 1972, all of which raise a common question of law relating to the retrospectivity of some of the amendments made by section 5 of West Pakistan Urban Rent Restric tion (Amendment) Ordinance, 1965 (W. P. Ordinance XXI of 1965) herein after called the amending Ordinance).

2. The appellant in each case, is a tenant under the respondent, a charitable institution established under section 26 of the Companies Act, 1913, and in occupation of a portion of a building called Nariman Kothari Chambers, Survey No. 7/3-SR-1, I. I. Chundrigar Road (formerly Mcleod Road), Karachi. The building was purchased by the respondent in June 1963. On 20-5-1964 it applied under section 13 of the West Pakistan Urban Rent Restriction Ordinance, 1959 (W. P. Ordinance VI of 1959) (hereinafter called the principal Ordinance), for the eviction of about 20 tenants in occupation of different portions of the building, on the ground that the building had become dilapidated and the respondent intends to build a multi-storeyed building for which it had obtained sanction from the local authorities. The applications were resisted by the tenants, who denied that the building was dilapidated and further averred that the applications were motivated to force them to pay increased rent.

3. During the pendency of the proceedings before the learned Rent Controller, the amending Ordinance came into force on the 8th of January 1965, which by section 5 made material changes in section 13 of the principal Ordinance including the provisions under which the eviction of its tenants was sought by the respondent. By one of these amendments, clause (vi) of subsection (2) of section 13 was replaced by a new clause (vi), which, along with the relevant substantive provision, before and after its amendment, reads, as set out below:

4. "Section 13

5. ..

(2) A landlord who seeks to evict his tenant shall apply to the Controller for a direction in that behalf. If the Controller, after giving the tenant a reasonable opportunity of showing cause against the application, is satisfied that

6. (prior to amendment)

(vi) the landlord intends to demolish the building for constructing a new building on the same site and has already obtained the necessary sanc t ion for the said construction from the Improvement Trust or the Municipal Corporation, Municipality, Municipal Committee or Notified Area

7. Committee of the area where such building is situated.

8. (as amended)

(vi) the building or rented land is reasonably and in good faith required by the landlord for reconstruction or erection of a building on the site, and the landlord has obtained the necessary sanction for the said reconstruction or erection from the Town Improvement Trust Municipal Corporation, Municipal Committee or

9. Town Committee for the area where such building or rented land is situated. the Controller may make an order directing the tenant to put the landlord in possession of the building or rented land and if the Controller is not so satisfied he shall make an order rejecting the application:

10. By section 5, the amending Ordinance also inserted a new provision as subsection (5-B) to section 13, which read:

11. "Where, in pursuance of an order under clause (v) of subsection (2), a landlord has obtained possession of a building (In this subsection referred to as the old building), and constructed a new building on the same site, the tenant who was evicted from the old building may, before the completion of the new building and its occupation by another person, apply to the Controller for an order directing that he be put in possession of such area in the new building as does not exceed the area of the old building of which he was in occupation, and the Controller shall make an order accordingly in respect of the area applied for or such smaller area, as considering the location and type of the new building and the needs of the tenant, he deems just, and on payment of rent to be determined by him on the basis of rent of similar accommodation in the locality."

12. On the basis of the above amendments, it was also canvassed on behalf of the tenants, that their cases shall fall to be governed by the above amended provisions notwithstanding that the amendments were made during the pendency of proceedings for their eviction.

13. The learned Rent Controller, directed the eviction of all the tenants on the short ground that the respondent having manifested its intention to demolish the existing building and to rebuild a multi-storeyed building on the original site and having secured permission of the local authorities for the erection of the new building, was entitled to the relief sought for under the un-amended provisions of section 13 of the principal Ordinance, and the respondent landlord was not under any further obligation to show that the building was "reasonably and in good faith required" by it, for reconstruction. The Rent Controller took the view that the above two amendments do not operate retrospectively, so as to further abridge respondent's right as landlord in relation to these proceedings. Having said so, the learned Controller also held that the building was required by the respondent "reasonably and in good faith" for reconstruction.

14. Of the 20 tenants, only 15 filed appeals before the learned Additional District Judge, who concurred with the view taken by the learned Rent Controller. On second appeal, a learned Single Judge of the High Court also maintained the findings of the two Courts below on all the points in controversy. For the legal proposition that the aforesaid two amendments did not operate retrospectively the learned Single Judge following his own earlier judgment in Abdul Mannan v. Haji Karam Elahi ( P L D 1971 Quetta 1 ). The same view was upheld by a Letters Patent Bench by its judgment dated 19-10-1971 in ten appeals, against which leave was granted by this Court to consider the following two questions, namely:

(1) whether in these cases, the landlord is also required to prove that the building in question is required "reasonably and in good faith" for its reconstruction; and

(2) whether the benefit of subsection (5-B) of section 13 as inserted by the amending Ordinance is available to appellants ?

15. Mr. Khalid M. Ishaque, learned counsel for the appellants submitted that having regard to the nature and object of the law as adumberated in the preamble of the principal Ordinance and the terms of subsection (1) of section 13 ibid, any future amendment in the law will necessarily operate retrospectively and will therefore, govern the instant cases. In support of that proposition, he relied upon the judgments of this Court in the cases of Muhammad Jamil v. The State ( P L D 1965 S C 681 ) and Rafiuddin v. Chief Settlement Commissioner PLD 1972 SC 252. Accordingly, it was submitted that it was incumbent upon the respondent to show, besides relying upon the mere sanction of the local authorities for the reconstruction of the building, that its plans for reconstruction of the building was reasonable and in good faith. It was further submitted that for the relevant purpose in adjudging reasonableness, the nature of new construction and its suitability for the requirement of the tenants for the time being, were also relevant factors.

16. Mr. Khalid M. Ishaque argued in the alternative that in any event the advantage under the new subsection (5-B) will be available to the appellants herein even if it were to operate prospectively. The argument was that the question of the application of the subsection would arise only after the ejectment of the appellants and reconstruction of the building following their ejectment which events have yet to take place. Therefore, it was submitted that even on the prospective operation of the subsection, the appellants would be fully entitled to benefits accruing thereunder.

17. Dealing with the first limb of the argument of the appellants' learned counsel, it is not controverted that the two amendments to section 13 of the principal Ordinance set out above, are matters of substantive law as distinguished from mere procedural matters. And it is well established principle, that in general when substantive law is altered during the pendency of an action, the rights of the parties are decided according C to the law as it existed when the action was begun, unless the new statute shows a clear intention to vary such rights. On this proposition, the law is succinctly stated in Maxwell on the Interpretation of Statutes, 12th Edition at p. 215 in the following words:

18. Upon the presumption that the Legislature does not intend what is unjust rests the leaning against giving certain statutes a retrospective operation. They are construed as operating only in cases or on facts which come into existence after the statutes were passed unless a retrospective effect is clearly intended"

19. It may be, that sometimes, it is permissible to have recourse to the preamble of a statute as an aid to construing the enacting provisions. The preamble, however, has not the same weight as the enacting provision themselves; it is only in exceptional cases where the enacting provision are equivocal that the Courts sometimes refer to the preamble as an aid to finding out the true legislative intendment which the draftsman ha failed to demonstrate. In the instant case, according to its preamble, a object of the principal Ordinance is to restrict the increase of rent of certain premises and the eviction of tenants therefrom .." Subsection (1) of section 13 of the principal Ordinance, on which the appellants' learned counsel particularly relied as covering the whole gamut of the section, reads:

20. "A tenant in possession of a building or a rented land shall not be evicted therefrom in execution of a decree passed before or after the commencement of this Ordinance or otherwise ..except in accordance with the provisions of this section."

21. The expression "the provision of this section" in the absence of any further qualification signifies section as enacted on the commencement of the principal Ordinance on the 23 rd February 1959. The above expres sion cannot be construed, to mean as the section as amended from time to time. Had that been the intention, the Legislature would have used the words "the provisions of this section as may be amended from time to time" to demonstrate its intendment with irresistible clarity. In the absence of any such qualifying words, there can be no doubt that the reference to "the provisions of this section" means the section as originally enacted.

22. The same conclusion is reached when we look to the provision of the amending Ordinance. Clause (b) of section 5 of the amending Ordinance replaced clause (vi) of section 13(2) of the principal Ordinance by the following words:

23. In section 13 of the principal Ordinance in subsection (2)

24. For clause (vi), the following shall be substituted namely. . .

25. Then followed the new clause (vi) set out above.

26. It is plain that clause (b) of the amending Ordinance merely substitute new clause and did not go on to say that the new clause "shall be deemed always to have been so substituted." In the absence of these or similar words, it will be wholly wrong to give retrospective effect to the new clause, so as to apply to the pending cases.

27. The two cases relied upon by the appellants' learned counsel do not advance his argument. The case of Muhammad Jamil concerned amend ments in sections 256 and 257 of the Code of Criminal Procedure, 1898, which related purely to procedural matters and it was held by this Court that the amendments applied to the pending cases notwithstanding that the action had commenced much before the amendments came into force.

28. The case of Rafiuddin also proceeded on its own peculiar facts. The point under examination in that case was whether an order made pursuant to paragraph 15-A in the Schedule to the Displaced Persons (Compensation and Rehabilitation) Act, 1958 would affect the right of a claimant who had merely applied for the transfer of a cinema house under the un-amended paragraph. The argument that a claimant applying under a particular scheme acquires a "vested right" for the transfer of the property under that scheme was repelled and it was held that the appellants' case would be governed by the provisions of the amended paragraph. That conclusion was reached on the basis of earlier decisions of this Court that there was no question of displaced persons coming to Pakistan from territories which now constitute India being "entitled as of right" to get properties in Pakistan in lieu of the properties left by them in India. It was observed that evacuee laws were designed purely "to alliviate the hardships and misery" of as large a number of displaced persons as possible, who had been uprooted, as a result of the setting up of two dominions of India and Pakistan by rehabilitating them. Therefore, it was ruled that it was "fallacious to conceive of a claim as being in the nature of a right or interest in the property. It was rather a question of "purely granting a benefit or a privilege" and therefore, it was perfectly competent to the authorities concerned to determine who were the persons best fitted for the grant of such benefits. It is plain that the ratio decidendi of that case would hardly be applicable to these appeals. Here the two amendments under examination make serious inroads in the common law rights of general use of property and its enjoyment by the landlord and do not withhold from him a mere privilege as in the precedent case.

29. On facts, the nearest precedent in point is the King's Bench Division case, National Real Estate and Finance Co. Ltd. v. Hassan (1939) 2 K B 61. In that case, a landlord served on a tenant a notice to repair under section 146(1) of the Law of Property Act, 1925 and subsequently issued a writ claiming possession of the premises on the ground of repair. Between the issue of the writ and the trial of the action, the Leasehold Property (Repairs) Act, 1938 came into operation, its effect being that, after service of a counter-notice by the tenant, the landlord could proceed to enforce the forfeiture provisions of the lease only with the leave of the Court which could be granted only in the circumstances specified in the Act. The Court of appeal held that the 1938 Act did not affect the rights which the landlord had acquired by proceeding under the Law of Property Act.

30. Accordingly, the High Court and the Courts below, were entirely right to treat the amended clause (vi) of subsection (2) of section 13, as prospective in operation so as not to govern the present cases. Therefore, the respondent is entitled to rebuild its property under the un-amended clause (vi). A fortiori, the appellants cannot question the nature of reconstruction of the building, on the ground that when re-built, it will not suit their requirement.

31. There however, appears to be substance in the second limb of the argument of the appellants' learned counsel, namely that in the circumstances of the case, the advantage under newly inserted subsection (5-B) will be available to the appellants. The subsection will come into operation in these cases after the ejectment of the appellants and re-construction of the building which have yet to take place. In that sense, the application of subsection (5-B) in favour of the appellants in these cases would be prospective even though some of the events, namely the initiation of the proceedings for eviction of the appellants had already taken place prior to enactment of the subsection. The following English cases are in point.

32. Section 2 of the Poor Removal Act, 1846 provided:

33. "No woman residing in any parish with her husband at the time of his death would be removed ..from such parish for 12 calendar months next after his death, if she so long continues a widow."

34. In R v. Inhabitants of St. Marry, White Shappel (1848) 12 Q B 120, it was sought to remove within 12 months' period, a woman, whose husband had died before the Act passed, on the ground that to make the section apply in such a case was to construe it retrospectively, the right to remove being vested right which had occurred on the man's death. Lord Chief Justice Denman however, observed "that the statute is in direct operation, prospec tive, as it relates to future removals only and that it is not properly called a retrospective statute because a part of the requisites for its action is drawn from time antecedent to its passing".

35. The case of Re: (A Solicitor's Clerk) (1957) 1 W R 1219, Is even more instructive. In that case, the clerk was convicted in 1953 on four charges of larceny, but the charges did not relate to money or property of his employer or his employer's client and so an order prohibiting the solicitor from employing him could not be made under the provisions of section 16 of the Solicitor's Act, 1941. The Solicitor's (Amendment) Act, 1957 by section 11 amended section 16, so as to include convictions of larceny irrespective of ownership. Lord Chief Justice Goddard held in that case that the amendment was not a true retrospective provision. With reference to the amendment, it was observed: "it enables an order to be made disqualifying a person acting as a solicitor's clerk in the future and what happened in the past is cause or reason for the making of the order but the order has no retrospective effect " This Act simply enables a disqualification to be imposed for the future and in no way affects anything done by the appellants in the past.

36. With respect, we accept the above statement of law as correct and it would be fair to say that the learned counsel for the respondent, Mr. Ali Ahmad Fazeel also frankly conceded that the benefits of subsection (5-B) would be available to the appellants on the reconstruction of the building subject to the limitations contained in that provision.

37. The learned Single Judge in the High Court, as pointed out earlier, merely relied upon his earlier judgment in the case of Abdul Mannan in which the discussion mainly centered round the effect of the amendment in clause (vi) of section 13(2) of the Act and on a priory reasoning but without noticing the distinction, that there was no occasion for the application of subsection (5-B) treated it on a par with the amended clause (vi) apparently because, both provisions were inserted by section 5 of the Amending Ordinance. The learned Judges of the Letters Patent Bench fell in the same error and disposed of the point by the following brief observation:

38. "As we are of the opinion that the amendment was prospective, the appellants, cannot rely on the provisions of subsection (5-B) of the West Pakistan Rent Restriction (Amendment) Ordinance, XXI of 1965.

39. However that may be the operation of subsection (5-B) is presently not a live issue. It will become a live issue only after the appellate eviction and construction of the new multi-storeyed building.

40. On the above interpretation, the ten appeals fail and are hereby dismissed. The appellants shall vacate the premises within four months; nevertheless at the appropriate time it will be open to them to apply to the Rent Controller for relief under subsection (5-B).

41. In the circumstances of the case, we leave the parties to bear their own costs.

42. K. B. A. Appeals dismissed.