KARACHI STOCK EXCHANGE LTD. Versus MUZAFFAR HUSSAIN SHAH

1. This appeal is directed against the order of the‑learned XIIth Senior Civil Judge /A.S.J./Rent Controller passed in Rent Case No.6380 of 1980, whereby the application for eviction of the respondent from the rooms bearing Nos.412 and 413 of the multi storeyed building known as Stock Exchange Building built on plot of land bearing Survey No.3/2 Sheet R‑Y. 3 and Survey No.l/2 Sheet No.R.Y.4, situated on Kallian Road, off I. I.Chundirgar Road, Karachi (hereinafter called 'the demised premises') has been dismissed with no order as to costs. The facts, briefly stated, giving rise to this appeal are these. The appellants are a limited Company duly incorporated under the Companies Act, 1913 and are the owners of the abovenoted building. On 4‑11‑1980 the appellants filed an application under section 15 of the Sind Rented Premises Ordinance, 1979 (hereinafter referred to as "the Ordinance") for eviction of the respondent stating, inter alia, that the demised premises were let out to the respondent on a monthly rent of Rs.500 per room, exclusive of electricity charges. The respondent had failed to pay the agreed rent of the demised premises from July, 1977 onwards. It was on 3‑6‑1979 that the respondent requested the appellants to allow him to pay the arrears amounting to Rs.20,000 in four equal installments of Rs.5,000 each. The payment, of arrears of rent in the aforesaid manner was accepted by the appellants on 9‑1‑1980, on clear understanding and undertaking that he will vacate and handover vacant possession of the demised premises to the appellants by 23‑1‑1980. Instead of vacating the demised premises, the respondent requested the appellants to allow him to install an air‑conditioner and a door in the adjoining wall of the said two rooms bearing Nos. 4.12 and 413, which the appellants declined to accede vide their letter dated 22‑1‑1980 and called upon the respondent to vacate the demised premises by 31‑1‑1980. It was further mentioned in the ejectment application that the respondent is a wilful and chronicle and habitual defaulter and had failed to pay the monthly rent and electricity charges from February, 1980. He, was also stated to have, without written consent of the appellants, installed ,the air‑conditioner and a door bye breaking the wall in between the aforesaid rooms and damage thereby causing to the property in question,. And lastly, that the respondent had also sublet both the rooms to. M/s. Fair Fax Textile Limited, without the written consent, of the appellants. he respondent tiled written statement denying all the allegations made in the application with regard to default in payment of rent, subletting and impairing the value of the property. It was asserted that the air‑conditioner and the door were installed with the orally accorded permission of the appellants. The alleged undertaking for vacating the demised premises was also denied. It was also stated that the persons signing the application had no lawful authority to ` do so and hence it was liable to be rejected for having been filed by a person having no locus stand. On behalf of appellants Messrs Muhammad Yaqoob Memon and Mohammad Ashraf, the Secretary and the Building Superintendent of the appellants' Company respectively, filed their affidavits in-evidence whereas the respondent examined himself only in 'support of ,his case. The learned Rent Controller framed the following issues out of the pleadings of the parties:‑

(1) Whether the opponent has committed default in payment of rent?

(2) Whether the opponent has committed such acts which have impaired the value and utility of the premises in case?,

(3) Whether the opponent has sublet the premises in case to M/s. Fair Fax Textile Limited?

(4) What should the order be?

2. He answered the first three issues in the negative and, consequently, dismissed the application by his impugned order as stated above. I have heard Mr. I.H. Zaidi, Advocate on behalf of the appellants and Mr. Sohail Muzaffar, Advocate on behalf of the respondent. I have also, with their assistance, perused the relevant record of the lower Court. Before proceeding to consider the submissions made by the learned counsel of the parties, I deem it proper to refer to some of the relevant evidence of the parties as, in my opinion, the fate of this appeal rests upon appreciation of facts rather than the application of the principles of law. During his cross‑examination P:W. Muhammad Yaqoob Memon filed a copy of the Resolution (Exh.A‑1.) adopted by the appellants' Board of Directors, whereby the Secretary was authorised to file ejectment proceedings. He denied the suggestions of the respondent's counsel that the appellants had filed the case in order to pressurize the respondent to enhance the rate of rent as well as to let‑out the demised premises after their vacation by‑ the respondent at higher rent and Pagri to someone else. He also repelled the suggestion that the respondent had not made the door and installed the A.C . in the demised premises. In his affidavit‑in‑evidence P.W. Muhammad Yaqoob Memon has deposed that the respondent, without the written consent of the appellants, has sublet both the rooms to M/s. Fair Fax Textile Limited. No question was put to this witness during his cross examination to assail the correctness of the above statement. The respondent in his affidavit‑in‑evidence, however, denied the alleged fact of the subletting of the demised premises. He further deposed that his name plate of business was displayed outside the rooms. He asserted that he was paying the rent by Pay Orders to the appellants regularly and filed all the copies of the letters bearing therein acknowledgment receipts as well the photostat copies of the Pay Orders which were allegedly sent to the appellants. He further claimed to have paid the rent till December, 1982 in advance through Pay Order No.046508 dated 18‑11‑1982, for Rs.3,000. During his cross‑examination the respondent denied the suggestion that the letters were given in the closed envelopes and nobody opened them in front of him. He also denied that with the letters any cheques for the rent were given. In reply to a question put to him in cross‑examination he stated: "the name of my firm is Fair Fax Textile. It is a limited company. I can produce the Articles of Association and Memorandum. I am one of the partners of the firm." He further deposed that the registered office of Fair Fax is in Hussain Manzil, Saddar. In reply to another question he stated: "My partnership is with Fair Fax Limited. Whatever business I will give to my partner, they will do the same they will give me 50$ of the profits." He further admitted that Fair Fax Textile Limited have given their address of the demised premises in the Annual Report of Chamber of Commerce for 1979‑80 and that it is correct. He also at the same time stated that he was running his partnership business as well as his travel agencies business in the disputed premises. Now taking up the issue of default first, 1 find that while replying to para. 5 of the application wherein it was stated that: the respondent had failed to pay the monthly rent, electric charges from February, 1980, it was mentioned in the written statement as under:‑

5. That para. 5 of the application is denied as false, frivolous and vexatious. The allegations levied by the applicant are very wild and the applicant is put to strict proof thereof There is no mention of the payment of rent having been made through Pay Orders nor the particulars of the Pay Orders are given. However, to prove payment of rent the respondent, for the first time, filed alongwith his affidavit‑in‑evidence copies of certain letters addressed by him to the appellants and also the copies of the Pay Orders (Exhs.0/2 to 017, 0/10 & Ex.0/18) through. which the rent for the periods commencing from February, 1980 to January, 1984 had been paid. These letters or the copies of the Pay Orders were not put to the appellant's witness during his cross‑examination. Hence A these were, even if tendered, had no evidentiary value. Moreover, the payment through Pay Orders is not warranted 'by section 10 of the Ordinance. Neither a single rent receipt has been produced nor even the encashment of the Pay Orders by the appellants has been proved. There is no legal presumption of the acceptance of rent paid through Pay Orders, as is evident from a bare reading of subsection (4) of section 10 of the Ordinance which reads as under:‑

3. 10.‑‑(i) The rent shall, in the absence of any date fixed in this behalf by mutual agreement between the landlord and tenant be paid not later than the tenth of the month next following the month for which it is due.

(ii) The rent shall, as far as may be, be paid to the landlord who shall acknowledge receipt thereof in writing.

(iii) Where the landlord has refused or avoided to accept the rent, it may be sent to him by postal money order or, be deposited with the Controller within whose jurisdiction the premises is situate.

(iv) The written acknowledgment, postal money order receipt or receipt of the Controller, as the case may be, shall be produced and accepted in proof of the payment of the rent Provided that nothing contained in this section shall apply in the cases pending before the Controllers on the commencement of this Ordinance."

4. Moreover, the rubber stamp of the appellants' Company sought to be relied upon by the respondent in proof of the Pay Orders sent to appellant towards payment of monthly rent from time to time also does not advance the case of the respondent inasmuch as the stamps read as follow: Received Contents Not known K.S.E. Ltd."

5. Further, as already pointed out, no witness of the appellants was confronted with the copies of those letters, so as to provide him a chance either to accept or deny their receipts by the plaintiffs and/or offer. any explanation in their behalf. Neither the peon, who delivered the said letters, as per deposition of the respondent, nor the person who received the said letters on behalf of the appellant was examined .The appellant, on the contrary, while cross‑examining the respondent put it to him that no Pay Order/cheque for the rent was given to the appellants vide respondent's letters sent in covered envelopes, which were not opened before the person delivering them. The respondent also did not make any effort to prove the encashment of the said Pay Orders by the appellants by summoning the relevant record of respective Banks. The appellants did not admittedly acknowledge the receipt of rent in writing. Hence the only legal course open to the respondent was to pay the rent either by postal money order or by depositing it with the Controller having the jurisdiction with reference to demised premises. Hence even if it is assumed for the sake of argument that the appellants received the Pay Orders but did not encash them than too no legal presumption of payment of rent as envisaged by section 10 could be drawn. It was for the respondent to prove the payment of rent by tendering requisite B evidence to show that the appellants had in fact encashed the said Pay Orders. He definitely failed to do so. Hence I do not feel hesitant to hold that the finding on this issue as recorded by the learned Rent Controller is based on presumptions and conjuctures and hence it cannot be sustained. For the foregoing reasons, therefore, the finding of the learned Rent Controller on the issue of default is reversed and consequently it stands decided in the affirmative, in favour of the appellant and against the respondent.

6. With regard to issue No.2, namely, whether the respondent committed such acts as had impaired the value and utility of the demised premises, I do not find any justification to interfere with the impugned order. The law makes only such acts of the tenant as are likely to impair the material value or utility of the premises, ground for seeking his eviction. On this vital aspect there is no material evidence available on record save the simple statement of the appellants' witness to the effect that the respondent has damaged the property by installing the air‑conditioner and a door by breaking the walls in between the two rooms. The appellants neither alleged nor proved as to how and in what manner the said acts of the respondent were likely to impair the material value or utility of the premises. The appeal, therefore, fails on this issue.

7. It takes me now to issue No.3 concerning the alleged subletting of the demised premises. Here it is observed that in reply to the allegations of subletting of the demised premises to M/s. Fair Fax L Textile Limited without the written consent of the appellants, it was pleaded by the respondent in the written statement as follows:‑

8. "7. That the para. 7 is denied as false. No question of any subletting arise. The opponent is in occupation of the demised premises and the name of the business played on the office wall by no mean of imagination can be said to be subletting. There is no bar on doing the business by name other than one's own name. The para. is denied in toto. In para. 7 of his affidavit‑in‑evidence A.W. Muhammad Yakoob Memon deposed the facts of the alleged subletting. He was, however, not cross‑examined by the respondent in this behalf. His statement thus remained uncontroverted. In his affidavit‑in‑evidence the respondent deposed that he has neither sublet the premises nor had got the sub‑tenant as alleged. He further averred that his name‑plate of business is displayed outside the room and that the appellants' witness Muhammad Yakoob Memon had objection to that for the reasons best known to him. During his cross‑examination, however, as rightly pleaded by Mr. I . H . Zaidi, the learned counsel for the appellants, the respondent took a turn, and in the first instance, to a question he replied, as already stated above, that "the name of my firm is Fair Fax. It is a limited Company." He then later on stated "I am one of the partners of this firm." During his further cross‑examination he produced the Memorandum and Articles of Association of the above said Company and also a partnership deed (Exh.0/19) executed between him and the Fair Fax Textile Limited on first day of January, 1980. In reply to yet another question he stated that he did not know whether the Memorandum of Association produced by him was complete as he had no concern with it. He then again stated that he was running his partnership business as well as his Travel Agencies' business in the disputed premises.

9. In the aforesaid facts and circumstances of the case and the presence of the evidence of the parties as stated above there is no escape from the conclusion that this issue should also be decided against the respondent and in favour of the appellants. In the first instance the uncontroverted statement of the appellants' witness in this behalf is by itself sufficient to decide this issue in the affirmative. Besides, the respondent during his cross‑examination is found to have been changing his version frequently which clearly indicates that he is not straightforward in his defence. The admitted position is that the office of M/s. Fair Fax Textile Limited is admittedly situated at the demised premises. It is mentioned even in the Annual Report of Chamber of Commerce 1979‑80 and the respondent has admitted it to be correct. It goes to show that the respondent has parted with the possession of the demised premises and has handed over its possession to the above named Company. The mere fact that his name‑plate is still placed at the door of the demised premises on the office wall would not save him of the consequences of handing over the possession of the demised premises to M/s. Fair Fax Textile Limited. The falsity of the respondent's stand as pleaded in the written statement that he was doing business in some other name is proved to the hilt by his subsequent admissions made during his cross‑examination. Under the foregoing reasons I would set aside the order of the learned trial Court on this issue. In the result, the appeal succeeds and is allowed with no order as to costs. These are the reasons for the short order passed on 29‑9‑1988

10. H.B.T./K‑1‑35/K Appeal allowed