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Petitioner: SHEZAN LIMITED VS Respondent: ABDUL GHAFFAR and others
Court Name: Supreme Court of Pakistan Judge(s): Sajjad Ali Shah, Saleem Akhter, Ajmal Mian Title: SHEZAN LIMITED vs ABDUL GHAFFAR and others Case No.: Civil Appeal No,258-K of 1991 Date of Judgment:1992-05-05 Reported As: 1992 SCMR 2400 Result: Appeal allowed
JUDGMENT
JUDGMENT ' AJMAL MIAN, J.---This is an appeal, with the leave of this Court, against the judgment dated 11-7- 1991 passed by a learned Single Judge of the High Court of Sindh in F.R.A. No,60 of 1984 filed by the appellant against the order of ejectment dated 6-12-1983 passed by the IInd Senior Civil Judge and Rent Controller at Karachi in Rent Case No,175 of 1982 filed by the respondents on the ground of default, dismissing the same and maintaining the above order of ejectment. 2. Leave was granted to consider the following questions:-- "(i) That since no date for the payment of the rent in advance was specified in the expired tenancy agreement, 60 days grace period was available. Reliance in support of the above contention has been placed on the judgment of one of us (Saleem Akhtar, J.) in the case of Syed Bahauddin v. Mst. Afsar Saeed (1984 CLC 1998). ' Whereas Mr. Rehmani, learned Advocate Supreme Court, appearing for the Caveator, has invited our attention to a Lahore High Court judgment in the case of Khalifa Hussain Alimad v. Mst. Sat Bharai (1980 CLC 648), in which a contrary view was taken to the view taken in the above Karachi case. (ii) That since the notice about the death of Mst. Jameela Khatoon and vesting of her one-third share in respondent No,3, under section 18 of the Ordinance was received by the petitioner on 5-9- 1981, the petitioner could tender rent within 30 days of the receipt of the above notice and factually he tendered rent on 28-9-1981 hence there was no default. Reliance has been placed br him on the judgment in the case of Sk. Abdul Majid v. Akhtar Muhammad and 2 others (PLD 1974 Quetta 13)." 3. The facts have been briefly stated in the leave granting order. Suffice to reproduce the same:-
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"The respondents filed the aforementioned rent 'case on the grounds of default for the above period and personal requirement of respondent No,1. The above application was resisted by the petitioner inasmuch as it was pleaded that there was no default as the rent was tendered within the statutory grace period allowed under the provisions of the Sindh Rented Premises Ordinance, 1979 (hereinafter referred to as 'the Ordinance'). The personal requirement was also denied. The learned Rent Controller, after framing issues, recording evidence and hearing the parties, by the above order, rejected the ground of personal requirement but allowed the ejectment on the ground of default. Against the above order the petitioner filed the above FRA which has been dismissed by the learned Judge in Chamber in which it has been held that since the rent was payable in advance under the terms of the expired tenancy agreement, the grace period available was 15 days and not 60 days, under section 15 of the Ordinance." ' Thereupon, the appellant filed a petition for leave to appeal, which was granted to consider the above questions. 4. We have heard Mr. Fakhruddin G. Ebrahim, learned counsel for the appellant, and Mr. H.A. Rehmani, learned counsel for the respondents. We have also heard Mr. Zahoorul Haq, learned counsel who was appearing in Civil. Petition No,21-K of 1992 and in which one of the points involved in the present appeal was also in issue. 5. The first question which requires consideration is, as to whether the appellant is entitled to grace period of 15 days or 60 days under clause (ii) of subsection (2) of section 15 of the Ordinance. Before proceeding with the above point, it may be pertinent to reproduce clauses 6 and 7 of the lease agreement dated 17-6-1971, hereinafter referred to as 'the agreement', which was initially for a period of 11 months, renewable for ten consecutive periods of 11 months, which read as follows:-- "6. That the rent of the leased premises has been agreed as Rs,1,300 (Rupees one thousand three hundred only) per month, payable by the lessees every month in advance. 7. That the rent for the month of July 1971 amounting to Rs,1,300 (Rupees one thousand three hundred only) is hereby paid by the lessees in advance and the receipt of which is acknowledged by the lessors. Rent for each month will be payable in advance monthly." 6. A perusal of the above-quoted clauses 6 and 7 indicates that clause 6 provides that rent is payable by the lessee every month in advance, whereas, clause 7 reiterates the above proviso by providing that "rent for each month will be payable in advance monthly". 7. The last renewal of the agreement, expired in or about September, 1981. The question, whether the terms of an expired tenancy agreement are binding or not on the parties, stands finally settled inter alia by the judgment of this Court in the case of Mrs. Zarina Khawaja v. Agha Mahbood Shah (PLD 1988 SC 190), wherein Muhammad Afzal Zullah, J. (as his Lordship then was), after referring to the case-law, observed as follows:-- "There is useful discussion on this aspect in the case of Muhammad Yunus Malik v. Mst. Zahida Irshad 1980 SCMR 184. We accordingly answer the 4th question in the negative and hold that the terms of an expired agreement as such, continue in operation, to the extent they are not repugnant to the Rent Law. Indeed same would be the position with an unexpired agreement also." 8. There seems to be conflict of view among the learned Judges of the Sindh High Court on the question, whether 15 days grace period, or 60 days grace period, will be available in a case in which relevant clause of the expired, or current, tenancy agreement provides payment of monthly rent in advance without specifying a date for payment inasmuch as 3 Judges in different cases, including in the present appeal, have taken the view that 15 days grace period will be available, and not 60 days. The other two judgments are rendered in the case of Mst. Rashida Begum v. Muhammad Mubin (1983 CLC 1458) and in the case of Muhammad Arshad Butt v. Mrs. Abida Salahuddin alias Benish Hassan (1986 MLD 1750). The same view was earlier taken by Aftab Hussain, J., of the Lahore High Court in the case of Khalifa Hussain Ahmad (supra), in which it was
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held that when the rent was payable in advance every month, it became due on 1st day of the month and that the tenant had become defaulter in payment of rent after expiry of 15 days period. The above view was reiterated in a subsequent judgment by the Lahore High Court in the case of Muhammad Ali through L. Rs, v. Additional District Judge, Faisalabad and others (1984 CLC 1619). 9. On the other hand, the contrary view was taken by a learned Single Judge of the High Court of Sindh in the case of Jamil Ahmed v. Abdul Karim (1984 CLC 1815) and the case of Syed Bahauddin v. Mst. Afsar Saeed (1984 CLC 1998). It may be advantageous to reproduce the relevant portion of the judgment in the latter case, which reads as follows:-- "If a party wants to limit the period for payment of rent up to 15 days from the date when the rent becomes due, it must specifically establish that there exists a tenancy agreement and under this agreement time for payment of rent has been fixed. The agreement should in clear terms specify a fixed time or date on which the tenant is required. To pay the rent. In the absence of such a clause in the tenancy agreement time limit of 15 days will not be applicable. Mr. Beg has contended that according to the applicant the rent was payable in advance, therefore, time had been fixed. If the rent was payable in advance then it means that either it should be paid before the commencement of the month or before the expiry of the month i.e, up to the last day of the month. When such wide gap has been given it cannot be said that any time has been fixed. As such clause will entail a penalty on the tenant and a shorter period will be allowed for payment of rent failing which he could be ejected, it is necessary that time fixed for payment of rent should be specifically mentioned and it should not be left to the guesswork of either of the parties. The intention of the Legislature is that where the agreement fixes a 'specific time for payment of rent and the rent is not paid within 15 days from that date, the tenant will be a defaulter because the agreement has put him to notice fixing a specific time for payment of rent and in such case a grace period of 15 days is allowed. But where no time for payment of rent has been fixed a grace period of sixty days is allowed. If any party wants to fix a liability on the basis of a statute or agreement then such statute or agreement should be strictly construed. Unless the provisions are clear and squarely cover a party, he cannot be subjected to any penalty. In the present case mere statement that the rent was payable in advance does not lead to the conclusion that a specific time was fixed for payment of rent. The agreement should have specified the date, for payment of rent." 10. It may be pertinent to point put that in the case of Syed Bahauddin (supra), of which judgment the above extract has been quoted, there was no written agreement between the parties containing any clause as to the payment of monthly rent. In that context it has been held that "if a party wants to limit the period for payment of rent up to 15 days from the date when the rent becomes due, it must specifically establish that there exists a tenancy agreement and under this agreement time for payment of rent has been fixed." It has been further held that in order to eliminate the confusion and to give certainty as to the due date for payment of rent, the clause should specify the date for payment. The above view has been followed by another learned Single Judge of the High Court of Sindh in the judgment, which is the subject-matter of C.P. 21-K/92. 11. The contrary view has been taken by the above five Judges on the basis of the meaning of the words "monthly rent payable in advance". M/s H.A. Rehmani and Zahoorul Haq have referred . The meaning of the words "monthly in advance", "advance" from the following Dictionaries:-- Stroud's Judicial Dictionary of Words and Phrases; 4th Edition, page 73: "(5) If freight is payable "monthly in advance" the charter is bound to pay the full monthly payment at the beginning of each month -- an obligation which applies even to a time when it is probable that the hire will not continue for a whole month." (ii) Black's Law Dictionary, 5th Edn. "Advance", page 48: ' Advance. To move something forward in position, time or place. To pay money or render other value before it is due; to furnish something before an equivalent is received; to loan; to furnish
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capital in aid of a projected enterprise, in expectation of return from it. To supply before-hand; to furnish on credit or before goods are delivered or work done; to furnish as a part of a stock or fund; to pay money before it is due; to furnish money for a specific purpose understood between the parties, the money or sum equivalent to be returned; furnishing money or goods for others in expectation of reimbursement; money or commodities furnished on credit. A loan or gift or money advanced ,to be repaid conditionally; may be equivalent to "pay". See also "advances." (iii) Ballentine's Law Dictionary, 3rd Edn. "Advance" page 39: "Advance. Noun: A payment made before it is due or by way of a loan. Something supplied as an aid in the performance of a contract or an undertaking such as the growing of a crop on leased premises. 32 Am J 1st L & T 578. To move ahead. To pay before the maturity of the obligation. To make a loan. To supply with goods." ' Webster's New World Dictionary of the American Language, College Edition: "Advance", page 21:-- "Advance. 1. To bring forward, move forward. 2. To suggest. 3. To further, help, promote. 4. To cause to happen earlier. 5. To raise the rate of. 6. To pay (money) before due. 7. To lend. v.i. 1. To go forward; move ahead. 2. To improve, make, progress, develope. 3. To rise in rank, quality, importance, etc. n. 1. a moving forward. 2. An improvement, progress. 3. a rise in value or cost. 4. Pl. Approaches to get favor, become acquainted, etc. Overtures (to someone). 5. a payment made before due, as of wages. 6. a loan. Adj. 1. In front; as, advance guard, 2. Beforehand; as, advance information." ' Mr. Zahoorul Haq has also referred to para. 262 from Halsbury's Laws of England', 4th Edition, Volume 13, which reads as follows:-- "262. Earliest time for distress. A landlord may not distrain until rent is in arrears, that is until it is ascertained, due and unpaid. Rent although previously demandable, is not actually due until the last instant of the due day, so that the earliest period at which a distress for rent may be made is on the day following that on which it falls due. Rent is prima facie not due till the end of each year of a term but in practice the due date is generally provided by agreement and by this means, or by custom rent may be payable in advance, so that in default of payment distress is legitimate at the beginning of each quarter or other period. If rent is only payable on a condition precedent it cannot be distrained for until the condition is fulfilled. Agreement may also postpone the right to distress; but to negative the common law right express words must be inserted; an affirmative special right of distress does not oust the common law right. ' In certain cases the leave of the Court must be obtained before the right of distress can be exercised: namely, in the case of a dwelling house let on a protected tenancy or subject to a statutory tenancy; or, where the landlord is not resident in the same building, a dwelling house let on a protected furnished tenancy or subject to a statutory furnished tenancy, and in certain cases where the tenant is a serviceman not serving under a regular engagement or the dependant of such a serviceman."
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' He has also referred to the case of Tonnelier v. Smith and Weatherill & Company (1897) 13 TLR 560)) and the case of French Marine v. Compagnie Napolitaine D' Eclairage Et De Chauffage Park Gaz (1921 LTR Vol. 125 833). In the above cases, the Court of Appeal and the House of Lords, respectively, while construing relevant clauses of the Charter Parties, wherein freight was payable monthly in advance, held that the freight was payable on the first day of the commencement of the month as specified in the Charter party. 12. Reference has also been made to the case of George Dibble v. Thomas Bowater and Issac Morgan (1853) 2.E.B. 564 = 118 E.R. 879, the case of Lee and another, Assignees of J. Pollit, a Bankrupt v. Smith (1854) 9 Exchquer 662 (1854) 156 E.R.284 and the case of London and Westminster Loan and Discount Company v. London and North Western Railway Company (1893) LR 2 Q.B.49, in which the term "rent payable quarterly in advance" has been construed with reference to a landlord's right of distress and it has been held that it means "rent payable at the beginning of each quarter". 13. The expressions "in advance", "monthly rent payable in advance" and "rent payable every month in advance" have definite connotations. They do not suffer from any ambiguity as to cause any difficulty in their interpretation. ' From the above dictionaries meanings and the case-law, it is evident that the expression "in advance" has been judicially construed as means, "something which is to be done before it is due". In other words, if monthly rent is payable in advance, it means that it is payable before it is due i.e, either on the last day of the preceding month or on the first day of the relevant month. The ratio of the judgments of the Court of Appeal and of the House of Lords in the case of Tenneelier v. Smith and Weatherill & Company and the case of French Marine v. Compagnie Napotitaine Eclairage Et De Chauffage Pule Gaz respectively (supra) wherein it has been held that the clause in the charter party providing that freight is payable monthly in advance means that the freight was payable on the first day of the commencement of the month specified in the charter party, is very much applicable to the present case. It may be pointed out that the Rent Laws place clog on the rights of landlords inasmuch as they cannot cause ejectment of tenants on any other ground than the grounds specified in the Rent Restriction Ordinance, hereinafter referred to as 'the Ordinance', nor they can increase rent more than what has been provided for in the Ordinance. The above rights they had enjoyed under the Transfer of Property Act, 1882, before the enforcement of the Rent Laws. In consideration of the curtailment or the landlords' above 'rights, the Ordinance ensures payment of rent to them. Keeping in view the above factum, this Court has consistently held that the provisions relating to payment of rent in the Ordinance should be strictly construed in favour of the landlord. In this regard reference may be made to the following observation from the judgment of this Court in the case of Mrs. Alima Ahmad v. Amir All PLD 1984 SC 32 (decided by a Bench of 5 H.J.J. Headed by the then Hon'ble C.J.) at page 37: "The alleged practice of the attorney of the landlady of collecting accumulated rents is of no avail in explaining these delays and defaults as held by this Court in Tirmizi's case. Even this explanation cannot be advanced for the default for the period from October to December, 1970, after receipt of the notice (Exh.P.10). The Rent Controller was clearly in error in holding that there was no "persistent" or "wilful" default and in ignoring the law laid down by this Court in Tirmizi's case. It was not the exercise of discretion by the Rent Controller but a finding of fact which is demonstrably incorrect that the, ejectment of the respondent was disallowed by him. The first appellate authority reversed the finding on default and discovering no mitigating circumstances directed the ejectment of the tenant. The learned Judge was, with utmost respect, under a misapprehension that it was a case of exercise of discretion by Controller which was proper one and the first appellate Court interfered in the exercise of that discretion in second appeal. Further from the supposed hardship of the law, the learned Judge should not have superimposed a procedure of two notices, extraneous to the
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statute whose provisions were to be interpreted and applied. The Ordinance protects the tenants against eviction and enhancement of rent, thereby curtailing the plenary power of the landlord to deal with his property and tenant thereof. If promptness in payment of rent, with option to the tenant to deposit it with the Rent Controller, is a condition precedent for enjoying such protection it cannot be relaxed or diluted on grounds of economic well-being, fairness or in the name of justice. (The above underlining is mine). ' The above observations clearly support the view, which I am inclined to take. The clause relating to payment of rent in a lease deed or tenancy agreement is a very important clause for a landlord which can be equated with a clause in a charter party for payment of freight and the ratio of the above English cases will be very much applicable. Since the above expressions have received judicial interpretation, they are to be given same meaning as it is done, while construing provisions of a statute. In this regard reference may be made to the case of Shamroz Khan and another v. Muhammad Amin and others PLD 1978 SC 89, wherein the following pertinent observations have been made: "While we agree with the view of the Full Bench we have referred to this judgment because it is not disputed that it has been consistently followed thereafter by the Courts. Now when a Legislature uses in a statute a legal term which has received a judicial interpretation, it is to be presumed that the term has been used in the sense in which it has been judicially interpreted, unless a contrary intention appears from the statute. There is no intention to the contrary either in Order VII, Rule 19 or in Order XII, Rule 8 and further nothing turns on the fact that Karo's case related to the Penal Code whilst the said words are to be found in the Civil Procedure Code. Accordingly, on this ground also, we agree with the view taken by the High Court." ' The above judgment has been followed inter alia in the case of Syed Zeeshan Akhtar Zaidi v. The State (1988 PCr.LJ 843) and the case of Malik Ghulam Mustafa Khar v. Pakistan and others PLD 1988 Lah. 49., ' In my view, there seems to be no reason to place a different construction on the expressions, "payable by lessees every month in advance" and "Rent for each month will be payable in advance monthly employed in above-quoted clauses 6 and 7 of the lease agreement in hand. 14. Reverting to the present case, it may be pertinent to refer to section 10 and above clause (ii) of subsection (2) of section 15 of the Ordinance, which read as follows:- "Section 10 of the Ordinance: 10. Payment of rent.--(1) 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. (2) The rent shall, as far as may be, be paid to the landlord, who shall acknowledge receipt thereof in writing. (3) 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 situated. (4) The written acknowledgement, 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 Controller on the commencement of this Ordinance." ' Clause OD of subsection (2) of section 15 of the Ordinance. "15. --(1)............................................................... (2) The Controller shall make an order directing the tenant to put the landlord in possession of the premises within such period as may be specified in the order, if he is satisfied that-
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' the tenant has failed to pay rent in respect of the premises in his possession within fifteen days after the expiry of the period fixed by mutual agreement between the tenant and landlord for payment of the rent, or in the absence of such agreement, within sixty days after the rent has become due for payment...." A perusal of the above-quoted subsection (1) of section 10 of the Ordinance indicates that it lays down that in the absence of any date fixed in this behalf by the mutual agreement between the landlord and the tenant, the rent shall be paid not later than the 10th of the next following the month for which it is due. Whereas, clause (ii) of subsection (2) of section 15 of the Ordinance, deals with the ground of default as a ground for ejectment by providing that the above ground would be available if the tenant has failed to pay rent in respect of the premises in his possession within 15 days after the expiry of the period fixed by mutual agreement between the landlord and the tenant for payment of rent, or, in the absence of such agreement, within 60 days after the rent has become due for payment. ' Both the above provisions of the Ordinance reserve the right of the parties to provide for a date or period for the payment of rent by mutual agreement. The above mutual agreement between the parties may be reflected in a lease deed or in a tenancy agreement or in a rent note. 15. In the present case, the above clauses 6 and 7 of the agreement provide for the payment of monthly rent in advance. The agreement had expired as far back as on 31-5-1972. It was executed on a non-judicial stamp paper of Rs,4. Since it contained a clause for renewal of 10 consecutive periods of 11 months, it needed proper stamping and registration. ' Even if I were to ignore the above technical aspect, it has come on record that the mutual agreed mode of payment of the rent acted upon between the parties was that the respondents used to send bill for the relevant month and in response thereof, the appellant tenant used to pay rent. In this regard, it may be pertinent to reproduce the following extract from respondent No,1's statement in the cross-examination from page 90 of the paper-book: "It is a fact that the opponent used to pay rent through cheques against our bills. Voluntarily says that bills were some times issued in advance and some times were issued at the time when the cheque of the rent was received by us. Some times we used to issue our bills after receipt of cheque of rent." 16. I am inclined to hold that though a clause as to…
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