STATE LIFE INSURANCE CORPORATION OF PAKISTAN Versus BRITISH HEAD AND FOOTWEAR STORES
ORDER
1. AFTAB AHMED GORAR, J.--- Through this constitutional petition, the petitioner, State Life Insurance Corporation of Pakistan, has impugned the orders dated 17.01.2005 and 15.01.2001 passed in F.R.A. No.26/2001 and Rent Case No.199/1992 by learned VIIth Additional District Judge. Karachi South and VIIth Senior Civil Judge and Rent Controller, Karachi South respectively thereby fixing the fair rent in respect of a shop owned by the petitioner.
2. Brief facts of the case, relevant for the purpose of deciding this petition, are that the petitioner being the owner/landlord of a building situated at Plot bearing Survey No.II-SB-6, Saddar Bazar Quarters, known as State Life Building No.5-A, Zaibunnisa Street, Saddar, Karachi, filed rent application before the learned Rent Controller against their tenant respondent No.1, M/s. British Head and Footwear Stores, under section 8 of Sindh Rented Premises Ordinance, 1979 for fixation of fair rent in respect of Shop No.4, measuring 2412 sq. feet, situated at ground floor of the said building. In the said application the petitioner stated that the rent of Rs.170/50 at the rate of Rs.0.07 per sq. ft. being paid by the respondent/tenant was not according to the prevailing rent in respect of similar premises in the adjoining locality. It was further stated that the rented premises is commercial one and situated in the heart of city and the prevailing rate of rent of the premises situated in the inferior circumstances in the same and adjoining locality is Rs.45/- per sq. ft. per month excluding electricity and other charges. According to the petitioner, after the tenancy the government imposed new taxes in the name of betterment tax, KMC tax, KW & SB tax etc. and there is tremendous increase in the taxes, charges, costs of construction, maintenance and repairs, therefore, the petitioner prayed for fixation of fair rent at the rate of Rs.60/- per sq. ft. per month from the date of institution of rent application.
3. The respondent contested the application by filing written statement wherein they denied the averments made in the rent application and also disputed the area of the rented premises as according to them it was 1200 to 1400 sq. ft. It was further asserted in the written statement that they are very old tenant in respect of the said premises having acquired the same from its previous owner, M/s. India Life Insurance Company. They further stated that there was no facility of water in the premises and that it is about 100 years old premises and huge amount was paid by the respondent as 'Pugri'. According to the respondent, the petitioner never maintained the premises in question and all the maintenance work in the shape of whitewashing, repairs etc. has been done by the respondent from their own pocket. However, the respondent showed their willingness to 10% increase in the rent and prayed for dismissal of the rent application.
4. After completion of proceedings, learned Rent Controller vide order dated 28.05.1998 allowed the rent application under section 8 of the Sindh Rented Premises Ordinance fixing the fair rent at the rate of Rs. 2000/- per month from the date of filing rent application. The said order was challenged by both the parties by filing F.R.A. No. 396/1998 and F.R.A. No.453/1998 in this Court which were disposed of vide judgment dated 16.9.1998 by remanding the case to the Rent Controller for deciding afresh after carrying out the inspection. After remand, inspection was carried out by the learned Rent Controller and in the inspection report dated 22.4.1999 it was mentioned that the width of shop in question was 20'-1" and length was 54'-1" and the total area of the shop in question was shown to be 1084 sq. feet. Thereafter vide order dated 26.7.1999 the learned Rent Controller again fixed the fair rent of the premises in question at the rate of Rs.2000/- per month from the date of institution of the application. Both the parties challenged the said order in F.R.A. Nos.408/99 and 455/99, however vide order dated 16.2.2000 this Court allowed both the appeals and remanded the case to the Rent Controller for deciding the matter afresh after taking into consideration area of the premises in question and the factors required to be considered for determination of fair rent. The learned Rent Controller after framing of issues, recoding of evidence and hearing learned counsel for the parties, vide judgment dated 15.01.2001 allowed the rent application under section 8 of the Sindh Rented Premises Ordinance fixing the fair rent at the rate of Rs.2500/- per month from the date of filing rent application. The petitioner having become dissatisfied with the said order, preferred Frist Rent Appeal No.163/2001 which was disposed of vide order dated 17.01.2005 whereby the order of the Rent Controller was modified to the extent that instead of Rs.2500/-, the fair rent was fixed at the rate of Rs.5000/- per month. The petitioner again being aggrieved by the order of the appellate Court, has filed the instant constitutional petition.
5. I have heard the arguments advanced by learned counsel for the parties and also perused the material available on the record.
6. Learned counsel for the petitioner contended that the two courts below erred in law and on facts while passing the impugned orders. According to him, there is gross misreading and non-reading of the evidence adduced by the parties. He further contended that the appellate Court, while holding that the petitioner has not produced any documentary evidence for fixation of fair rent at the rate of Rs.60/- per sq. ft. per month, ignored the Lease Deed Ex. A/2 produced in the evidence by the petitioner showing the rate of rent @ Rs.45/- per sq. ft. as well as Lease Deed Annexure 'B' to the Memo of Appeal showing the rate of rent @ Rs.70/- per sq. ft. per month and other similar documents available on the record. He stressed on the point that normally the fair rent is determined keeping in view the prevalent market rent of similar premises situated in the similar circumstances in the same or adjoining locality and it is not necessary that all the four factors mentioned in section 8 of SRPO, 1979 are available. He further contended that the appellate Court also failed to make further increase in the fair rent @ 25% after three years from the date on which the Rent Controller had fixed the fair rent as done by honourable Supreme Court in the case reported in 2001 SCMR 671. In support of his contentions, he relied upon the case-law reported in 1987 CLC 2182, 2001 SCMR 1103, PLD 2005 Karachi 554, 2001 SCMR 671, 2010 SCMR 745, 2001 SCMR 1301, unreported judgment of this Court in F.R.A. No.610/1998 and another unreported decision given by the honourable Supreme Court in Civil Petition No.270-K of 2008. He prayed for allowing the petition and fixing the fair rent @ of Rs.60/- per sq. ft. per month from the date of institution of the rent application.
7. Conversely, learned counsel for respondent No.1 contended that the constitutional petition is not maintainable as the same has been filed against the concurrent findings of the two Courts below and also on account of being suffering from laches. He also disputed the area of the premises in question and submitted that the same is 1084 sq. feet. According to him, it is now well-settled that constitutional petition in rent matters can only be entertained when there was jurisdictional error committed by the Courts below. He further submitted that the respondent is very old tenant in respect of the premises in question having acquired the same from its previous owner i.e. M/s. India Life Insurance Company. He further submitted that there was no facility of water in the premises and that it is about 100 years old premises, therefore it cannot be equated with other premises in the same locality/building which contain all modern facilities. In support of his contentions, he relied upon the case-law reported in PLD 1987 Lahore 471, PLD 1994 SC 725, 2001 SCMR 1103, PLD 2007 Karachi 485, 2008 CLC 517 and 1994 SCMR 2115. He also contended that although there was increase in the material, repair charges and the cost of construction but the same was never applied to the premises in question by the petitioner and all the expenses were borne by the respondent from its own pocket. He prayed for dismissal of the petition.
8. In rebuttal, learned counsel for the petitioner contended that there is no hard and fast rule with regard to application of the principle of laches to the constitutional petition, as bar of laches cannot be equated with statutory bar of limitation. In support of this plea, he relied upon the cases reported in PLD 2003 SC 90 and 1988 SCMR 1001. He further contended that where the concurrent findings of fact by the Courts below are based on misreading of relevant provisions of law and misreading or non-reading of the evidence on record, the same could be interfered by the superior courts. In support, he placed reliance on the case reported in 2001 SCMR 1301. He further contended that mere fact that the tenancy is an old one, the tenant would not be entitled to special concession or to be treated differently while fixing the fair rent. To strengthen this assertion, he relied upon an unreported judgment of this Court passed in F.R.As. Nos.176, 177, 216 and 217 of 1997. He further submitted that while considering' an application for fixation of fair rent, the Court would not make any distinction whether the rise in the cost of construction was actually applied in relation to a tenant-hold premises or that repairs were actually made on such basis in the premises in question. For this view, he referred to the case reported in 1990 MLD 1711.
9. I deem it proper to deal with, in the first instance, the point of maintainability of the constitutional petition before adverting to the merits of the case. Learned counsel for the respondent has challenged the maintainability of the instant petition on two grounds i.e. the petition has been filed against the concurrent findings of the two Courts below and that it suffers from laches. So far as the issue of concurrent findings is concerned, it may be observed that normally concurrent finding of fact cannot be interfered with in exercise of constitutional jurisdiction of this Court, however, such finding could be interfered if the court below has either misread the evidence on record or while assessing or evaluating the evidence had omitted from consideration some important piece of evidence which had direct bearing on the issues involved in the case. Such finding would also be open to interference where approach of the courts below was perverse. In this context if any authority is needed, reference can be made to 2006 SCMR 1304, 2006 SCMR 1410, 2004 SCMR 59, 2005 YLR 2535 and PLD 2007 Karachi 347.
10. As regards the point of laches, it would be advantageous to reproduce the observations made by the honourable Supreme Court on this issue in the case of Masooda Begum v. Government of Punjab and others (PLD 2003 SC 90):
11. "This is the settled principle of law that the bar of laches cannot be equated with statutory bar of limitation as the laches operate in equity and in case of laches, the dictates of justice and equity are to be weighed as the legitimate rights cannot be denied on the ground of laches unless it is found that it will cause injustice to the opposite party but a person can be non-suited on the basis of laches if due to his negligence, rights were created in favour of opposite-party. The order affecting the rights of a person besides being illegal if is also found unjust and improper notwithstanding the laches, can be set aside by the High Court in writ jurisdiction as the injustice cannot be allowed to be perpetuated on the technical grounds."
12. In the instant case, it appears that the impugned order was passed by the appellate Court on 17.01.2005 and the certified copy of the order was received by the petitioner on 29.01.2005, whereas the petition was filed on 19.5.2005 i.e. after about three and a half months. I am of the view, that it would not be proper to knock out the petitioner on the ground that he has filed the constitutional petition after about 3-1/2 months as in such an event, valuable rights of the petitioner may be adversely affected.
13. Adverting to the merits of the case, before venturing into the controversies of the parties, it would be appropriate to reproduce hereunder the provisions of section 8 of the Sindh Rented Premises Ordinance, 1979 which read as under:-
14. "Fair rent .---(1) The Controller shall, on application by the tenant or landlord determine fair rent of the premises after taking into consideration the following factors:-
(a) the rent of similar premises situated in the similar circumstances, in the same or adjoining locality.
(b) the rise in cost of construction and repair charges.
(c) the imposition of new taxes, if any, after commencement of the tenancy; and
(d) the annual value of the premises, if any, on which property tax is levied."
15. During the course of evidence, the petitioner produced following documents in support of his plea that the prevailing market rent of the similar premises situated in the similar circumstances in the same/adjoining locality is much higher than the one being paid by the respondent in respect of the premises in question as provided in clause (a) of section 8 of the SRPO, 1979: i) Lease Deed (Ex. A/2) in respect of a shop situated on ground floor, State Life Building No.5, Abdullah Haroon Road, Karachi let out to one Mohammad Ilyas who was paying rent at the rate of Rs.45/- per sq. ft. per month, excluding electricity charges. ii) Lease Deed (Ex. A/3) in respect of a premises situated at ground floor, State Life Building No.11, Abdullah Haroon Road, Karachi let out to one M/s. Prime Commercial Bank Ltd. who were paying rent at the rate of Rs.25/- per sq. ft. per month, excluding electricity and other charges. iii) Lease Deed (Ex. A/6) in respect of a premises situated at ground floor, State Life Building No.11, Abdullah Haroon Road; Karachi let out to one M/s. Habib Bank Bank Ltd. who were paying rent at the rate of Rs.25/- per sq. ft. per month, excluding electricity and other charges. iv) Lease Deed (Ex. A/7) in respect of a premises situated at ground floor, State Life Building No.11, Abdullah Haroon Road, Karachi let out to one M/s. Bankers Equity Ltd. who were paying rent at the rate of Rs.23.40 per sq. ft. per month, excluding electricity and other charges. v) Lease Deed (Ex. A/8) in respect of a premises situated at ground, State Life Building No.11, Abdullah Haroon Road, Karachi let out to one M/s. Industrial Development Bank of Pakistan, who were paying rent at the rate of Rs.21.45 per sq. ft. per month, excluding electricity and other charges.
16. The case of the respondent is that the premises in question is more than 100 years old and there is no facility of water, what about other modern facilities, whereas other buildings which have been quoted as instances/precedents by the petitioner for the purpose of determination of fair rent, have modern facilities, therefore, the premises in question cannot be equated with the said premises in the locality and it cannot be said that the said premises in the adjoining buildings are similar premises situated in the similar circumstances as provided in clause (a) of section 8 of the Sindh Rented Premises Ordinance. As stated above, while disposing of F.R.A. No. 396/1998 and F.R.A. No. 453/1998 filed by both the parties vide judgment dated 16.9.1998, this Court remanded the case to the Rent Controller for deciding afresh after carrying out the inspection. After, remand, inspection was carried out by the learned Rent Controller and in the inspection report dated 22.4.1999 it was mentioned as under:
17. "The undersigned reached at shop in question bearing No.4, situated at ground floor of the building standing at the plot of land bearing Survey No.11-SB-6, Saddar Bazar Quarters, known as State Life Building No.5-A, Zaibunnisa Street, Saddar Karachi at about 1.00 p.m. for front side of the shop in question in good condition and the Building is old one and constructed during British time. The roof of the shop from inner side is of wooden planks........ The Bath room having a wooden door from shop side, the roof of bath room is of broken wooden plank. There is no water facility in Bath room except a tap without water. The undersigned saw two cans/Bottles and one Water Tanky/just Tanky.
18. The store room from inside is in dilapidated condition and the roof of the building from back side of shop which was using for residential purpose for upper floors is also in very dilapidated condition. On the back side one stair case of wooden was available which looks that the same has not been in use of any body."
19. The petitioner, at no point of time, disputed the abovesaid Inspection Report by filing any objections, therefore, the averments stated therein attained finality.
20. In his cross-examination, Peer Khan Sajid, Deputy Manager of the petitioner, admitted as under:
21. "It is correct that building No.11 was completed in the year 1999. It is incorrect building No.11 is centrally air-conditioned. It is correct that doors of the building No.11 are automatic. It is correct that several lifts are available in building No.11. It is correct that building No.11 is fully filed (sic) [tiled] which are imported.........It is correct that lift facilities are not available in buildings in question and there are no tiles or automatic doors. It is correct that we compare that building No. 11 with good buildings. It is correct building No. 11 standby refigator (sic.) facility is available. I do not know whether 30 persons staff is maintain the building No. 11, however it is maintained by our staff."
22. While dealing with the aforesaid lease deeds produced by the petitioner in support of his plea that rent of the premises in question is lesser than similar premises situated in the similar circumstances, in the same or adjoining locality, it was held by the learned Rent Controller as under:
23. "In the light of above I am of the view that applicant has filed lease deed in regards to factor (a) of section 8 of Ordinance firstly to Building No.11 which is admittedly completed in the year 1999 and the lease deed as Exh. A/2 and A/3 executed just 6 and 27 days prior to filing of this Application and other lease deed A/6 is also relating to Building No.11 and was executed in the month of May 1993 after filing of this application. Exh. A/8 lease deed is also relating to newly constructed building No.11 in the year 1990 and the building in question is / was constructed about than 100 years (sic)."
24. The appellate Court did not agree to increase the fair rent at the rate of 60/- per square foot holding that respondent is an old tenant; that the rent was mutually agreed between the parties; that there are no modern facilities available in the premises in question such as lifts, tiles and automatic doors as provided in adjoining building No.11; that the construction of the premises in question is old one and no construction or repair/maintenance work was carried out by the petitioner/landlord; that the petitioner did not produce any documentary evidence in support of its case. However, the appellate Court increased the fair rent from Rs.2,500/- to Rs.5000/-.
25. A bare perusal of clause (a) of section 8 of the Sindh Rented Premises Ordinance, 1979 would reveal that while fixing the fair rent, amongst other factors, the Rent Controller would take into consideration the rent of similar premises situated in the similar circumstances, in the same or adjoining locality. It would be seen that it is not enough that rent of any premises situated in the same or adjoining locality is to be taken into consideration by the Rent Controller but only those specific premises situated in the same or adjoining locality would be considered which have similarity to the premises in question, and so also which are situated in the similar circumstances. In the instant case, although the premises, which were quoted as instances precedents by the petitioner for the purpose of clause (a) of section 8, are situated in the same locality but from the perusal of inspection report and keeping in view the admissions made by the petitioner's witness in his cross-examination, while putting the said premises in juxtaposition to the premises in question, the same cannot, at all, be said to be similar premises or being situated in similar circumstances, as required by clause (a) of section 8 of SRPO, 1979. However, keeping in view the fact that premises in question is situated in the heart of city, the fair rent fixed by the appellate Court also seems to be on lower side. Accordingly the same is enhanced from Rs.5,000/- to Rs.10,000/- (Rupees ten thousand only) per month.
26. So far as the date from which the fair rent fixed would be applicable is concerned, the superior Courts, time and again, have held that the Rent Controller is competent to order the payment of fair rent either from the date of institution of application or from the date of order fixing the fair rent or even from the date in between the above two dates keeping in view circumstances of the particular case. Reference may be made to 1994 SCMR 2115 and PLD 1994 SC 725. However, in the case of Volkart (Pakistan) Ltd., Karachi reported in 2001 SCMR 671, Honourable Supreme Court held that though the Rent Controller under the law has the power to fix any date for payment of fair rent keeping in view the circumstances of each case, yet ordinarily it is payable from the date of application. In the instant case learned Rent Controller ordered the payment of fair rent from the date of institution of application for fixation of fair rent which was also maintained by the appellate Court. Learned counsel for the respondent could not show any justification for modifying such order so far as the date of payment of fair rent is concerned. In the circumstances, the fair rent of Rs.10,000/- would be payable by the respondent/tenant from the date of filing the application for fixation of fair rent.
27. So far as other three clauses (b), (c) and (d) of section 8 of the Ordinance, 1979 are concerned, not a single ground has been taken in the entire petition in respect thereof, therefore, the findings of the learned Rent Controller to such extent, in my humble view, have attained finality and could not be reopened and even otherwise the same appear to be proper and justified.
28. Yet there is another point which was, at all, not touched by the two Courts below i.e. the application for fixation of fair rent was filed by the petitioner in February, 1992 which remained pending for more than six years and was ultimately decided by the Rent Controller on 28.5.1998. Thereafter on appeals filed by the parties, matter was remanded to the learned Rent Controller for fresh decision and vide impugned judgment dated 15.01.2001 fair rent was fixed at the rate of Rs.2500/- per month. In this process it took further period of about three years. Then the appellate Court took about four years in deciding the appeal. In this manner a total period of about thirteen (13) years was consumed till the passing of the order by the appellate Court. It may be noted that further time of more than ten (10) years has elapsed from the date of the order of the appellate Court till date. The two Courts below while passing the impugned orders, did not take into consideration the provisions of section 9 of the Sindh Rented Premises Ordinance, 1979 which provides as under:-
29. "9. Limit of fair rent:-
(1) Where the fair rent of any premises has been fixed no further increase thereof shall be effected unless a period of three years has elapsed from the date of such fixation or commencement of this Ordinance whichever is later.
(2) The increase in rent shall not, in any case, exceed ten percent per annum on the existing rent."
30. Admittedly, the fair rent was made applicable by the Rent Controller in her order dated 15.01.2001 from the date of institution of the application and a period of about 9 years had already elapsed till the passing of the order but no recourse was made to section 9 of SRPO, 1979 by the Rent Controller. Similarly, the appellate Court while passing the order on 17.01.2005 also ignored this legal aspect. In the case reported as Volkart (Pakistan) Ltd., Karachi v. Interavia Pakistan Limited, Karachi (2001 SCMR 671) Honourable Supreme Court held as under:
31. "In order to bring the rent of the premises at part to the prevailing rental value of the premises in the locality and keeping in view inflationary condition in the country, recourse to section 9 of the Ordinance has to be made whereby increase in rent can be made after a period of three years from the fixation of fair rent and such increase cannot be more than 10% per annum of the existing rent. The fair rent of Rs.2.00 per square foot would remain operative for three years from April, 1981 and keeping in view the changed circumstances, after three years it shall be increased by 25% and after every three years up to April, 1999 existing rent shall be increased by 25%."
32. In view of above legal position, I also order that fair rent of Rs.10,000/- per month would remain operative for three years from 06.2.1992 viz. the date of the rent application, and keeping in view the changed circumstances, after three years from the date of expiry of first three years, it would be deemed to have been increased by 25% and in like manner after every three years up to the date respondent No.1 remains in possession of the premises in question the rent then existing shall be increased by 25%.
33. With above modification, the instant petition stands disposed of.
34. ZC/S-41/Sindh Order accordingly.