MUHAMMAD NAZIR Versus DISTRICT JUDGE, GUJRANWALA

In this Constitutional Petition Muhammad Nazir the petitioner has called in question the order dated 25‑4‑1988 passed by the learned District Judge, Gujranwala, and the order dated 24‑5‑1988 passed by the learned Rent Controller, Gujranwala.

2. The facts giving rise to this writ petition in brief are that the petitioner took on rent shop in dispute bearing property No. B‑X IS‑19 situated in Kaisers Bazar, Gujranwala from respondents Nos.3 to 10 at the rate of Rs.300 per month. The petitioner also executed rent note in favour of the said respondents on 24‑3‑1973.It is provided in this rent note that the tenancy was to commence from 1‑3‑1973. Subsequently, however, through another agreement executed between the parties on 20‑7‑1976, Respondents Nos:3 to 10 agreed to mortgage the said shop with possession to the petitioner in lieu of loan of Rs.13,000 advanced to respondents Nos.3 to 10 by the petitioner. On 26‑3‑1979 respondents Nos.3 to 10 filed an ejectment petition against the petitioner. This ejectment petition was contested by the petitioner by taking a plea that no relationship of landlord and tenant existed between the parties. This objection was primarily based on the ground that after execution of agreement 20‑7‑1976 the relationship of landlord and tenant between the parties came to an end. This ejectment petition was still pending, when the petitioner himself filed a suit for specific performance of agreement of mortgage dated 20‑7‑1976 seeking a decree that respondents Nos.3 to 10 be directed to execute a registered mortgage deed in favour of the petitioner affecting mortgage of the property in his favour. The learned Rent Controller by order dated 12‑12‑1981 dismissed the ejectment petition of respondents Nos.3 to 10, holding that no relationship of landlord and tenant existed between the parties as no ejectment petition could be maintained till such time an amount of Rs.13,000/ was paid to the petitioner. Through judgment and decree of the same date the said suit of the petitioner for specific performance was decreed. Respondents Nos. 3 to 10 filed two separate appeals, one against the order of the Rent Controller rejecting their application for ejectment and the other against the judgment and decree passed in favour of respondents Nos.3 to 10 for specific performance of agreement to mortgage. The learned District Judge, Gujranwala, by order dated 8‑7‑1984 dismissed the appeal of respondents Nos.3 to 10 against the order of Rent Controller whereas their appeal against the judgment and decree passed in the suit for specific performance was disposed of with the observation that the respondents Nos.3 to 10 could deposit an amount of Rs.13,000/ and on such deposit the relationship of landlord and tenant between the parties would stand restored and if mortgage deed was executed then there would be no relationship of landlord and tenant between the parties. The petitioner feeling aggrieved filed R.S.A. No.185 of 1984 against the said judgment and decree of the :earned District Judge passed in appeal arising from suit for specific performance which was dismissed by this Court by judgment dated 14‑4‑1986. The petitioner was allowed an additional amount of Rs.10,000 on account of repairs of the shop. This Court observed that the remarks of the learned District Judge in his judgment regarding revival of relationship of landlord and tenant between the parties on deposit of the said amount of Rs.13,000, were uncalled for as they did not relate the matter of specific performance of agreement. During the pendency of this R.S.A. respondents Nos.3 to 10 instituted another ejectment petition after deposit of amount of Rs.13,000 in' the Court. According to direction of this Court given in R . S . A . an amount of Rs .10, 000 was also deposited by respondents Nos.3 to 10. This application was also contested by the petitioner who again denied the existence of relation ship of landlord and tenant between the parties. The learned Rent Controller framed an issue regarding existence of relationship of landlord and tenant. The evidence of the parties was recorded. After appraising the evidence the learned Rent Controller by order dated 31‑7‑1986 held that relationship of landlord and tenant existed between the parties and without framing issue on merits he passed an order, for ejectment of the petitioner. The petitioner feeling aggrieved challenged the said order in the Court of learned District Judge, Gujranwala, by filing appeal which was accepted by order dated 2‑12‑1986. The learned District Judge remanded the case to the Rent Controller to decide the question of relationship oaf landlord and tenant uninfluenced by the observation of the learned District Judge in his judgment dated 7‑2‑1984 regarding revival of relationship of landlord and tenant on deposit of an amount of Rs.13,000 by respondents Nos.3 to 10 which remarks as noted above were declared to be uncalled for by this Court in the judgment passed in R.S.A. No. 185 of 1984. After remand the learned Rent Controller by its order dated 22‑4‑1987 held that relationship of landlord and tenant did not exist between the parties as a consequence thereof the ejectment petition was dismissed. Respondents Nos.3 to 10 filed appeal against the said order before the learned District Judge which has been accepted by order dated 25‑4‑1988 and after holding that their exists relationship of landlord and tenant between the parties the case has been remanded to the learned Rent Controller for framing issues on merits and disposal of the ejectment petition in accordance with law. After the remand the learned Rent Controller on 24.5.1988 passed an order under section 13(6) of the West Pakistan Urban Rent Restriction Ordinance, 1959, directing the petitioner to deposit rent during the pendency of the ejectment petition. This order as well as order dated 25‑4‑1988 passed by the learned District Judge have been impugned in this writ petition.

3. Learned counsel for the petitioner argued that the agreement to mortgage dated 20‑7‑1976 executed between the parties put an end to the previous contract of tenancy dated 24‑3‑1973, therefore, after 20‑7‑1976 the parties were no longer governed by the previous contract of tenancy, as such, the petitioner could not have been held to be the tenant of the respondents in the shop in dispute. According to him the legal effect of agreement dated 20‑7‑1976 was that the parties mutually agreed to substitute a new contract for the previous contract of tenancy by which the said contract of tenancy stood rescinded or altered, therefore, the previous contract need not be performed. Reliance has been placed in support of this argument on section 62 of the Contract Act.

4. On the other hand learned counsel for respondents Nos.3 to 10 argued that in order to avail of the plea of novation, substitution, alteration and recision of a contract by a subsequent contract as based on section 62 of the Contract Act, it is necessary that subsequent contract must be a completed contract and not merely an agreement which has to be specifically enforced to procure the contract. Therefore, according to him section 62 of the Contract Act, is not applicable. According to the learned counsel even otherwise agreement dated 20‑7‑1976 as per its terms does not have the effect of substitution, alteration or recision of previous contract of tenancy between the parties.

5. The main question is whether the contract of tenancy dated 20‑3‑1973 entered into between the parties subsists notwithstanding the subsequent agreement to mortgage dated 20‑7‑1976, by virtue of the doctrine of novation etc. laid down in section 62 of the Contract Act. In order to determine this question it would be relevant to mention here the: relevant terms and conditions of agreement dated 20‑7‑1976 as the decision of this question centres around the true construction and scope of this agreement. It is provided in this agreement that respondents were obtaining an amount of Rs.13,000 from the petitioner as they were in need of it. In lieu thereof they agreed to mortgage the shop in dispute to the petitioner with possession. It was also agreed that the said amount would be returned within one year i.e. June 1977 which could be returned even before the expiry of the said one year. It has also been provided that with the payment of the said amount the said agreement would stand rescinded and if the said agreement was not rescinded only in that event there would be a mortgage in favour of the petitioner and simultaneously the monthly rent of Rs.300 would cease to be payable only with the happening of this eventuality. It has also been provided that the petitioner would be entitled to get the mortgage deed executed through suit for specific performance if the respondents Nos.3 to 10 refused to mortgage the shop in his favour. It has also been expressly provided therein that respondents Nos.3 to 10 shall regularly issue receipts of monthly rent of Rs.300 and the rent up‑to‑date of the said agreement stood paid.

6. It is manifest from the language employed in the agreement dated 20‑7‑1976 that it was not intended by the parties to substitute the previous agreement of tenancy or to rescind or alter the same inasmuch as the provisions were made therein on the subject of issuance of receipts regarding monthly rent. In this connection the provision in the agreement dated 20‑7‑1976 as noticed above with regard to issuance of receipt by the landlord regarding rent is of no. small significance when considered that the condition in the said agreement that it , will be only on the actual mortgage of the property that monthly rent would cease to be payable which eventuality was to occur either if there was no cancellation of the said agreement due to non‑payment of Rs.13,000 or on specific performance of the agreement in consequence of which the mortgage was to take place. Thus, section 62 ibid in terms is not attracted in the absence of intention to rescind, alter or substitute the previous contract of tenancy. In the above view of the matter, the term "revival of tenancy" as a matter of fact is misconceived because the previous contract of tenancy was never intended to be substituted, rescinded or altered. The other argument of the learned counsel for respondents Nos.3 to 10 that the subsequent agreement must be a completed or executed contract and not merely an agreement has also considerable force. It has consistently been held by higher Courts that to avail of the plea of novation of contract under section 62 of the Contract Act there must be present substitution of another contract for the original contract and. not merely an agreement to substitute one in future, Reference in this connection may be made to the judgments reported as Guranditta Mat‑Sant Ram and another v. Labhu Ram Lachman Das A I R 1936 Lah. 476, Angan Lal and others v. Saran Behari Lal and others A I R 1929 All. 503, and Raja Ram v. Mihar Khan 1888 P R No.66. According to agreement dated 20‑7‑1976 the mortgage itself was to take place only if the agreement was not rescinded or on its specific performance. The eventuality in which the said agreement was to stand rescinded is the payment of an amount of Rs.13,000 with a right to the petitioner to enforce the same through suit for specific performance which remedy he availed but failed. It is clear that the agreement dated 20‑7‑1976 was merely executory in nature and having been refused to be specifically enforced became unenforceable and with the deposit of amount as directed by the Court the same stood cancelled as per its terms. Faced with this situation learned counsel for the petitioner argued that under section 10 of the Contract Act, every agreement has been treated to be a contract, therefore, for the application of provisions of section 62, agreement dated 20‑7‑1976 was a contract.

7. I am afraid the contention has no force. No doubt all agreements are contracts according to section 10 of the Contract Act, but as has been held by the judicial pronouncements, for the application of section 62 the subsequent contract must be a complete contract as against an executory contract. The contracts are of different kinds. The agreement dated 20‑7‑1976 may be a contract within the meaning of section 10 of the Contract Act, but it is executory in nature and the kind of contract envisaged by section 62 is that it should be a completed contract, therefore, this argument does not advance the case of the petitioner in this respect.

Before parting with the case, however, it seems necessary to deal with the argument raised on behalf of the learned counsel for the petitioner to the effect that the order dated 12‑12‑1981 passed by the Rent Controller in the previous round of litigation dismissing the ejectment petition of respondents Nos.3 to 10 after deciding issue of existence of relationship of landlord and tenant between the parties in favour of the petitioner operates as res judicata. This argument is effectively met by the contention put forward on behalf of respondents Nos.3 to 10 by his learned counsel to the effect that the said previous order holding the absence of relationship of landlord and tenant between the parties was not absolute in terms but was made to rest on the ground that until the payment of Rs.13,000 the respondents Nos.3 to 10 could not 'maintain the ejectment petition. Thus, it was held therein that on the payment of Rs.13,000 the respondents Nos.3 to 10 could maintain the ejectment petition. On the basis of well‑recognized principles of interpretation of such a document it is obvious that the said previous finding cannot be allowed to operate as res judicata. It is a firmly established. rule that for the purpose of applicability of rule of res judicata it is not only the ultimate conclusion but also the reasons, therefor, that have to be seen as a determining factor. It may be added that if the petitioner thought that an absolute finding should have been recorded that the previous contract of tenancy stood rescinded irrespective of payment of Rs.13,000 and no ejectment petition could be maintained in any circumstances, it was for him to have challenged the said finding recorded in the previous round of litigation inasmuch as he failed to do so, therefore, he is precluded under the law from maintaining that the present ejectment petition is not maintainable which has been admittedly instituted after the deposit of the amount of Rs.13,000 and Rs.10,000 as ordered also stood deposited.

8. Lastly learned counsel for the petitioner vaguely argued that even if the specific performance of agreement dated 20‑7‑1976 was refused by the Court in the suit filed by the petitioner, the rights of the petitioner are still safeguarded under section 53‑A of the Transfer of Property Act and the petitioner could resist the claim of respondents Nos.3 to 10 if they seek to enforce any right contrary to the right created in favour of the petitioner by the said agreement.

9. The argument has no substance. No right has been created under agreement dated 20‑7‑1976 in part performance of the said agreement which could be resisted , by the. petitioner. As has been held above the intention of the parties was not put to an end to the previous contract of tenancy.

10. For the foregoing reasons the impugned orders dated 25‑4‑1988 and 24‑5‑1988 passed by respondents Nos.l and 2 respectively suffer from no illegality or jurisdictional defect. The writ petition is found to have no force which is hereby dismissed with no order as to costs.

A. A /M‑940/L Petition dismissed.