Monday, 23 November 2015

Personal Bonafide Need

PLJ 2005 Lahore 1107
[Rawalpindi Bench Rawalpindi]
Present: Abdul Shakoor Paracha, J.
ALLIED BANK OF PAKISTAN LTD. through its MANAGER/ATTORNEY--Petitioner
versus
ADDITIONAL DISTRICT JUDGE ISLAMABAD and 2 others--Respondents
W.P. No. 1698 of 2004, decided on 3.12.2004.

(i)            Islamabad Rent Restriction Ordinance, 2001 (IV of 2001)—


----S. 10--Ejectment--Personal bonafide need of landlord--Evidence on record indicated that just in order to enhance monthly rent at exorbitant and unjustified rate, ejectment application was filed--Such aspect having escaped notice of Courts below resulted in misreading of contents of ejectment application and non-reading of evidence of landlord--Finding recorded by Courts below on bonafide personal need of landlord was thus, not maintainable and was reversed.      [P. 1112] B

(ii)        Islamabad Rent Restriction Ordinance, 2001 (IV of 2001)—

----S. 10--Enhancement of Rent--Default in payment of enhanced rent--No notice for enhancement of rent was served upon tenant--Default in payment of rent to justify ejectment of tenant was thus not proved.
      [P. 1113] C
(iii)  Partnership Act, 1932 (IX of 1932)--
----S. 69--Islamabad Rent Restriction Ordinance, (IV of 2001), S. 10--Ejectment application filed by un-registered firm in the name of firm--Maintainability--Un-registered firm cannot file ejectment application against tenant.      [P. 1112] A
PLD 1997 SC 564; 2000 CLC 126; 1985 CLC 2514; 1996 CLC 1205; PLD 1976 Karachi 808; PLD 1965 S.C. 459; 1982 CLC 1241; PLD 1997 SC 564 and 2000 CLC 126 ref.
Mr. Tariq Mehmood Jahangiri, Advocate for Petitioner.
Ch. Ghazanfar Ali, Advocate for Respondents.
Date of hearing : 3.12.2004.
Order
Petitioner Allied Bank of Pakistan Limited through this petition under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973, impugns the judgments and decrees dated 31.7.2003 and 20.4.2004, respectively passed by the Rent Controller and Additional District Judge, Islamabad, Respondents Nos. 2 and 1 herein. Through the former order the ejectment petition filed by Respondent No. 3, Al-Hadeed Enterprises, Islamabad, against the petitioner-Bank was accepted, whereas through the latter order the appeal of the petitioner before the Additional District Judge was dismissed.
2.  Brief facts of the case are that Respondent No. 3 Al-Hadeed Enterprises, Islamabad, through its seven partners, executed a lease agreement regarding Shops Nos. 10, 11, 12 and 14, measuring 1666.25 sq. ft alongwith basement measuring 979 sq.ft., on 16.12.1998, for establishment of the Branch of the Bank (Allied Bank of Pakistan Limited). The lease agreement was executed for a period of three years w.e.f. 1.12.1998 to 30.12.2001 at the rate of Rs. 31,000/- per month as rent. After the expiry of the above stated period, Respondent No. 3 initially agreed to extend the lease period with the enhanced rent at the rate of Rs. 38000/- per month but subsequently the respondent-landlord did not agree to the said enhanced rent and filed an ejectment petition on 21.9.2003 in the Court of Rent Controller against the Bank on the ground of personal use with bonafide intention and default in payment of rent by non-deposit of statutory increase of rent in violation of Section 10 of the Islamabad Rent Restriction Ordinance, 2001.
The said petition as resisted by the petitioner by filing the written statement. The allegations leveled in the petition were denied and it was contended that the petition was hit by the provisions of Partnership Act.
3.  The learned Rent Controller proceeded to frame the following issues:--
1.    Whether the building is required to the petitioner for his personal use with bonafide intention? OPA
2.    Whether the respondent has violated the Section 10 of the Islamabad Rent Restriction Ordinance, 2001? OPA.
3.    Whether the respondent has estopped depositing rent in his account without notice? OPA
4.    Whether the petitioner is entitled to get vacate the premises in dispute? OPA.
5.    Whether the petitioner is estopped by his words and conduct to file this petition? OPR.
6.    Whether the petition is hit by the provisions of Partnership Act, if so, its effect? OPR.
7.    Relief.
4.  The parties produced evidence in support of their respective contentions. Regarding violation of Section 10 of the Islamabad Rent Restriction Ordinance, 2001, and deposit of enhanced statutory rent under Issues Nos. 2 and 3, the learned Rent Controller observed that,"......the respondent is in possession of suit premises, but he has not increased the rent in accordance with Section 10 of Islamabad Rent Restriction Ordinance, 2001. When the respondent has not vacated the suit property as per demand of the petitioner, the respondent was required to pay the increased rent after lapse of three years of tenancy which has not been done by the respondent. So it may be concluded that the respondent has violated the Section 10 of Islamabad Rent Restriction Ordinance, 2001." Finding on Issue No. 1 was also recorded in favour of the landlord-Respondent No. 3 holding that the suit property was required by the Respondents-landlords for their personal need. Under Issue No. 6 the trial Court observed that, ".......seven persons are co-owners of the suit property and further the lease agreement Ex-A/2 was also executed by all the seven persons and instant suit has been instituted by Muhammad Aslam Yaseen as attorney of all the co-owners, therefore the instant petition is not hit by Section 69 of the Partnership Act and is maintainable." Regarding default in payment of rent-Issue No. 3, the learned trial Court concluded that, "....the applicant has failed to prove this issue through cogent evidence. Further petitioner has also failed to prove default on the part of the respondent, hence this issue is decided in favour of the respondent and against the petitioner." On the basis of the findings on Issues Nos. 1, 2 and 4, the ejectment petition was accepted vide order dated 31.7.2003 and the petitioner--Bank was directed to vacate the suit premises within a period of two months. The appeal filed by the petitioner-Bank against the aforesaid judgment of the Rent Controller dated 31.7.2003 failed and the same was dismissed through the impugned judgment of the learned Additional District Judge dated 20.4.2004, hence this petition.
5.  The learned counsel for the petitioner contends that the finding of the learned Rent Controller on Issue No. 1 regarding personal use with bonafide intention of the respondent landlord qua the property in dispute is result of complete misreading of evidence on the record. Further contends that the petitioner has not violated the provisions of Section 10 of the Islamabad Rent Restriction Ordinance, 2001; nothing was brought on the record to suggest that the landlord in consequence of statutory increase in rate of rent had sent any notice of such increase to tenant therefore the finding of the Courts below that the tenant had become defaulter by mere non-payment of rent according to enhanced rate was not warranted. Reliance has been placed on the cases reported as National Development Finance Corporation, Shahrah-e-Quaid -e-Azam, Lahore vs. Shaikh Naseem-ud-Din and 4 others (PLD 1997 SC 564) and Javed Iqbal vs. S.M. Khurram Wasti, Advocate (2000 CLC 126). It is further contended that the ejectment petition brought by Respondent No. 3 being an un-registered firm was hit by Section 69 of the of the Partnership Act and was not maintainable. To substantiate his argument the learned counsel has made reference to the cases reported as M. Aslam Awan vs. Ras Tariq Chaudhary (1985 CLC 2514) and Province of Sindh through Secretary, Public Works Department, Government of Sindh, Karachi and 6 others vs. M/s. Royal Contractors (1996 CLC 1205).
6.  On the other hand, the learned counsel for the respondent contends that concurrent findings of facts recorded by the two competent Courts of jurisdiction on the basis of evidence cannot be interfered with by this Court in exercise of Constitutional jurisdiction. Further contends that the respondent has successfully proved the personal bonafide use therefore the finding on Issue No. 1 has been correctly recorded by the Rent Controller which has been maintained in appeal. Adds that the rent of the non-residential building stands automatically increased at the end of every three years of tenancy by 25 percent of rent; the rent was fixed at the rate of
Rs. 31,000/- per month for three years which was for the fixed period of lease but the petitioner did not vacate the suit property and further he deposited Rs. 31000/- as rent per month and did not pay or deposited the increased rent therefore the petitioner Bank has violated the Islamabad Rent Restriction Ordinance, 2001 and eviction was rightly ordered by the Court. Further contends that Section 69 of the Partnership Act pertains to the suit for dissolution of partnership by a registered or un-registered firm; section ibid has no bearing on the ejectment petition. Moreover all the partners of the firm have filed the ejectment petition therefore the same was not hit by Section 69 of the Partnership Act.
7.  I have considered the arguments of the learned counsel for the parties and perused the record with their assistance. Before I advert to the question of personal bonafide need and violation of Section 10 of the Islamabad Rent Restriction Ordinance, 2001 by non-payment of 25 percent of the enhanced rent by the petitioner-Bank to the Respondent, I would deal with the question of maintainability of the ejectment petition, filed by Respondent No. 3 Al-Hadeed Enterprises, Islamabad, an un-registered firm, against the Bank, and would see whether the petition was barred under Section 69 of the Partnership Act. Section 69 of the Partnership Act reads as under:--
"69.  (1) No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm.
(2)   No suit to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered and the person suing are or have been shown in the Register of Firms as partners in the firm.
(3)   The provisions of sub-sections (1) and (2) shall apply also to a claim of set-off or other proceeding to enforce a right arising from a contract."
The Partnership Act, 1932 (Act No. IX of 1932) was enacted to define and amend the law relating to partnership. Provisions of Section 15 of the Partnership Act show that the assets of the firm are only to be held and used by the partners exclusively for the purposes of the business. It is to be noted that the rent case is to be filed against a tenant, who may be a living person or a juristic person. A registered firm is a juristic person which can sue and be sued. The above principle applicable to the Civil Courts can be pressed into service in rent proceedings. In the case reported as Cooperative Development Funds and Projects through its Project Manager, Karachi vs. Glimmer Textile Printing Industries, Karachi (PLD 1976 Karachi 808) while interpreting Section 69 of the Partnership Act (IX of 1932) in the case in which the tenant had claimed the right of fixation of fair rent conferred by Section 4 of the Ordinance ibid, it was held that, "Such right does not arise out of contract--Provisions of S. 69 of the Partnership Act do not apply to the proceedings before Rent Controller." By relying on the judgment of Khadim Hussain Mohy-ud-Din and another vs. Ch. Rehmat Ali Nagra and another (PLD 1965 SC 459) it was held that the Court of Rent Controller is not a Court. Further, on the mandate of Sections 2(1) and 4 of West Pakistan Urban Rent Restriction Ordinance (VI of 1959), where `tenant' has been defined, it was held that this definition extends even to body of persons acting as firm, whether registered or not. In the case reported as Messrs Construction Services (Pakistan) vs. Ali Hussain (1982 CLC 1241) it has been ruled that even an unregistered firm can be sued but cannot sue itself. This being so, I observe that the un-registered firm (Al-Hadeed Enterprises, Respondent No. 3), could have not filed the ejectment petition against the petitioner. Suffice to say that the cases of M. Aslam Awan (1985 CLC 2514) and Province of Sindh through Secretary, Public Works Department Government (1996 CLC 1205) (supra) are not attracted to the facts and circumstances of the present case.
8.  Now I come to the merits of the case. Respondent No. 3 has mentioned in ground (A) of the ejectment petition that the premises is required for personal use because the plaintiff-Respondent No. 3 wanted to have his office in the disputed building, but in the evidence Muhammad Aslam, AW-1, has negated his own case, and stated that he wanted to establish hotel business in the premises. Further AW-1, one of the landlords, has admitted in his statement that if the petitioner pays the monthly rent at the rate of Rs. 1 lac per month then the landlord will extend the lease agreement. These facts clearly show that just in order to enhance the monthly rent at exorbitant and unjustified rate the ejectment petition was filed. This aspect had escaped notice of the two Courts below. The finding of the learned Rent Controller, which was maintained by the appellate Court, was result of misreading of the contents of the ejectment petition and non-reading of the evidence of AW-1 Muhammad Aslam. The said findings are not sustainable and are hereby reversed.
9.  Now coming to the question of consequence of statutory increase in the rate of rent and non-payment as envisaged in Section 10 of the Islamabad Rent Restriction Ordinance, 2001, it is observed that it was held by the two Courts below that the petitioner had committed the default by non-depositing the monthly rent at the enhanced rate. Section 10 of the Ordinance ibid is identical and pari materia to the provisions of Section 5-A (as added by the Punjab Urban Rent Restriction (Amendment) Ordinance XIII of 1990). While interpreting the provisions of Section 5-A of the Ordinance ibid the Hon'ble Supreme Court in the case reported as National Development Finance Corporation, Shahrah-e-Quaid-e-Azam, Lahore vs. Shaikh Naseem-ud-Din and 4 others (PLD 1997 SC 564) has ruled that:--
"Word `default' would denote something more than mere non-payment of rent--Nothing was brought on record to suggest that landlord in consequence of statutory increase in rate of rent sent any notice of such increase to tenant--Findings of High Court that tenant had become  defaulter  by  mere  non-payment  of  rent  according  to enhanced rated, was not warranted--Default in payment of rent to justify rejectment of tenant was not proved in circumstances."
The above ruling was followed by this Court in the case of Javed Iqbal (2000 CLC 126), supra, and it was held that:
"Though 25% enhanced rent in terms of S. 5-A of West Pakistan Urban Rent Restriction Ordinance, 1959, would become automatically due, but for seeking ejectment of tenant on that ground on plea of non-payment of 25% enhanced amount of rent, landlord had to allege that tenant was served with a noticed and that despite noticed tenant had failed to increase rent--In absence of any notice, willful default could not be assumed--Mere non-payment of statutory increase of 25% rent without notice, could not per se result in increase of willful default."
It is an admitted position on the record that the landlord had not alleged that the tenant had been served with a notice and despite that the tenant failed to pay the increased rent. No notice has been placed on the record. This being so, the finding of the learned Rent Controller on Issue
No. 2 is result of mis-interpretation of Section 10 of the Islamabad Rent Restriction Ordinance, 2001, the same is, therefore, not sustainable. Issue No. 3 regarding default has been decided in favour of the petitioner and against which no cross-objection was filed by the landlord, Respondent
No. 3.
For what has been discussed above, this writ petition is allowed. The judgments dated 20.4.2004 and 31.7.2003 passed by Additional District Judge and Rent Controller, Respondents Nos. 1 and 2, are set aside. Consequently, the ejectment petition filed by Respondent No. 3 against the petitioner-Bank is dismissed. Parties to bear their own costs.
(A.A.)      Petition accepted.

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