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Petitioner: Rana ABDUL HAMEED TALIB VS Respondent: ADDITIONAL DISTRICT JUDGE, LAHORE and JUDGMENT
Court Name: Supreme Court of Pakistan Judge(s): Mian Saqib Nisar, Tasaddaq Hussain Jillani, Muhammad Ather Saeed Title:Rana ABDUL HAMEED TALIB vs ADDITIONAL DISTRICT JUDGE, LAHORE and
JUDGMENT
Reported As: PLD 2013 Supreme Court 775 Result: Appeal dismissed Judgment JUDGMENT MIAN SAQIB NISAR, J.-- The primary proposition(s) involved in this appeal, with the leave of the Court dated 20-12-2012, is about the interpretation and the effect of non-compliance of the provisions of section 9(b), independently, and also when read in the context of section 8 of the Punjab Rented Premises Act, 2009 (the Act, 2009). In relation to the above proposition, the facts of the case are:- that on 18-1-2010, respondent No,3 brought an ejectment petition against the appellant under Act, 2009, on the ground(s), inter alia, of default in the payment of the rent due. The property in dispute is a room bearing No,21 Bashir Mansion, Turner Road, Lahore. The appellant filed an application for leave to contest the ejectment petition, which was dismissed and as a consequence thereof, eviction order dated 28-1-2011 was passed against him; appellant's appeal was disallowed on 20-3-2012, and same is the fate of his constitution petition, which has been discarded by the learned High Court vide impugned judgment dated 9-8-2012. 2. Learned counsel for the appellant has argued, that according to section 8 of the Act, 2009, an existing tenancy has to be brought in conformity with the provisions of the Act and if the needful is not done, the Rent Tribunal, as per the mandate of section 9, ibid shall not "entertain" any application either filed by the landlord or the tenant as the case may be, unless he (petitioner before the Tribunal) deposits a fine envisaged by the section and this has to be done even before an application is moved or at least the Rent Tribunal should pass an order to that effect, before issuing a notice to the other side; as the respondent-landlord of the case has failed to follow the mandatory provisions of law, therefore, his ejectment petition was not entertainable, and thus the Rent Tribunal had no jurisdiction to pass the eviction order against the appellant. It is further
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argued that respondent No,3, during the pendency of the appeal filed by the appellant, before the District Judge, was directed by the said Court to deposit 10% of penalty in terms of section 9 of the Act, 2009, but this was not permissible under the law and the inherent defect in the very 'entertaining' of the application could not be allowed to be cured. In support of his contention that the provisions of section 9 of the Act, 2009 are mandatory and that the eviction application could not be entertained by the Rent Tribunal, reliance has been placed by the appellant's learned counsel upon a judgment dated 25-5-2011 rendered by this Court in Civil Petition No, 349-L of 2010 (Allah Ditta Sajid v. Muhammad Saleem Qureshi and others). It is further submitted that the property in issue vide notification dated 18-1-2010 was taken over by Auqaf Department in terms of section 7 of the West Pakistan Auqaf Ordinance, 1979 and, therefore, the relationship of tenancy between the parties has ceased to exist; and it is for this reason that the appellant had rightly denied the relationship of tenancy between the parties. This aspect of the matter has been totally ignored by all the forums below. 3. On the other hand, learned counsel for respondent No,3 states that the provisions of section 9 of the Act, 2009 have to be read in conjunction and consonance with the provisions of section 8, which provides that the existing tenancies should be brought in conformity with the mandate of the Act within a period of two years, which is the grace period for doing the needful. At the time when the eviction petition was filed by the respondent i.e,. 18-1-2010, the two years' period had not expired as yet, as the Act, 2009 was enforced on 17th November, 2009, thus, when such period matured, while the appeal was pending, the learned Court, was well within its jurisdiction as per the spirit of the Act, 2009, to issue the direction to the respondent/landlord for the deposit of fine under section 9, which was duly paid (deposited) on or before 16-11-2011 and, therefore, respondent No,3 cannot be held to have violated the law. Meeting the argument of the appellant's learned counsel about the Auqaf Department's notification, it is submitted that the notification referred to above by the appellant's counsel was challenged by respondent No,3 vide Writ Petition No, 1474 of 2008, in which the operation of the same has been suspended. Moreover, admittedly the appellant was inducted into possession of the property by the said respondent and, therefore, the appellant is estopped under Article 116 of the Qanun-e-Shahadat Order, 1984 to deny the relationship. 4. Heard. For the purposes of resolving the key proposition and the ancillary question(s) which may come up for answer(s) in the matter, I find it expedient to briefly touch upon the meaning and concept of a lease/tenancy; how it is created, and in reference thereto, the relevant law in force from time to time and the development thereof; in other words the legislative history and the object of the law on the subject. In this context there can be no two opinion that the lease/tenancy has its genesis (note: except the statutory tenancies) in a contract between two parties, the lessor and the lessee. According to Black's Law Dictionary (Eight Edition) lease is defined as: "a contract by which a rightful possessor of real property conveys the right to use and occupy the A property in exchange for consideration, for a fixed period, or for a period terminable at will". Whereas, the tenancy means "the possession or occupancy of land under a lease; a leasehold interest in real estate". In our law, as per section 105 of the Transfer of Property Act, 1882 (TP Act, 2009), ' the lease is defined as:-- "105. Lease defined.--A lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing or value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms." ' Section 107 of the Act ibid stipulates, as to how a lease is made, and reads as:-- "107. Leases how made.- -A lease of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument.
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' All other leases of immovable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession., ' Where a lease of immovable property is made by a registered instrument, such instrument or, where there are more instruments, than one each such instrument shall be executed by both the lessor and the lessee: ' Provided .................................. ' Section 108 of the Act (supra) provides for the rights and liabilities of the lessor and a lessee and certain other sections stipulates, the effect of the expiry of the lease period, such as the concept of holding over and the tenancy at sufferance. Besides the noted enactment, according to section 17 of the Registration Act, 1908 "leases of immovable property, from year to year, or for any term exceeding one year reserving a yearly rent; " shall be affected through compulsorily registrable document/ instrument and if not so done, as per section 46 of the Act, it (such document) shall not operate to create, etc. Any right, title or interest, whether vested or contingent to or in the immovable property, whether in present or in future. Obviously meaning, that without a registered instrument, no valid lease beyond .The period of one year shall validly be effected. It may be of some interest to mention here, that in the ordinary and common parlance, the terms lease and tenancy, more or less are taken to be analogous, however, if any distinction for the above two concepts/terms is required/ expedient, reference can be made to Ramzan and 5 others v. Member, Board of Revenue and others (1991 CLC 2125); besides, the distinction is also aptly elucidated in a book titled Legal Terms and Phrases (2006 Edition) by M. Ilyas as under:-- "The word, 'lease' would employ a contract of occupation of land for fixed terns, whereas the word 'tenancy' implies that occupier would hold land till same was terminated expressly or by implication." 5. Be that as it may, prior to 1959, the leases/tenancies subject to the aforestated laws were regulated by the terms and conditions of the contract between the lessor and the lessee. And the issues in relation thereto ?Rising between the landlord(s) and tenant(s) were sorted out by the civil courts of plenary jurisdiction or the revenue courts as the case may be. However, vide West Pakistan Urban Rent Restriction Ordinance, 1959 (Ordinance, 1959) enforced on 23-2-1959, a vital and drastic change was brought into the law on the subject of tenancies, inasmuch as, certain urban properties were taken out of the preview of the general law and also the jurisdiction of the civil courts. The tenancies existing at that time, either contractual or statutory, as also the future tenancies/leases coming into being thereafter, were to be governed and regulated in material aspects by the provisions of the 1959 Ordinance as envisaged thereby. The specific contractual terms and conditions of the existing tenancies/leases were almost rendered nugatory and redundant; neither the rent could be increased as per the contract between the parties, nor the landlord could seek the eviction of the tenant in terms of the stipulations of the lease document. A special forum of Rent Controller was established to determine the issues between the landlord(s) and the tenant(s), strictly as provided by the said Ordinance. However, it may be pertinent to mention here, that unlike the Act neither the lease/tenancy was defined nor a mechanism was provided in the Ordinance as to how the future tenancies/leases shall be created or constituted. It was quite obscure and unclear, if the provisions of the TP Act and the Registration Act shall have due and efficacious application in relation to the creation of future tenancies/leases after the enforcement of 1959 Ordinance. And even if, the two noted laws were not strictly adhered to, whether it shall make any difference; this was so because the eviction of a tenant, which emerged to be the main area of dispute (litigation) inter se, the landlord and tenant (under the Ordinance ibid) was no more (in many ways) regulated by the tenancy instrument(s) duly executed between them or TP Act, but the provisions of the said Ordinance. This was so because section 13 of the (supra Ordinance, 1959) categorically mandated that "a tenant in possession of a building or
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rented land shall not be evicted therefrom in execution of a decree passed before or after the commencement of this Ordinance, or otherwise, and whether before or after the termination of the tenancy, except in accordance with the provisions of this section". It may be stated here with emphasis, that for the eviction of a tenant on the grounds mentioned in section 13 of the Ordinance, 1959, the expiry of the period of tenancy as agreed upon between the parties was absolutely irrelevant (emphasis supplied), for example, if the period of lease/tenancy either existing or future, (as agreed upon between the parties) was for a term of three years and such period has expired, the landlord yet was precluded to seek the eviction of his tenant, on account of the expiry of the lease period, rather was only entitled to ask for the eviction on the grounds specifically mentioned in the section 13 ibid (note:- if however the tenancy was for a fixed period the landlord under the said section could not ask for eviction on account of his personal need, till the expiry of that period, which looks quite anomalous). 6. This law remained in vogue for a considerable period and had its own pros and cons, which I do not feel are relevant to be specified and discussed here. But it seems expedient to highlight (even at the cost of repetition), that no particular mechanism/procedure, or form for entering into a lease and was prescribed by the Ordinance 1959, and moreover Section 13 thereof, had an overriding effect in many ways over the laws in force at that time, therefore the above provisions of TP Act, the Registration Act, and the contractual stipulations between the parties, as mentioned earlier had practically lost its efficacy. In the said scenario, as also to avoid the expenses of requisite stamp duty(ies) and registration fee(s) etc. The tenancies through unregistered instrument and oral in nature became rampant, which as experienced subsequently, gave rise to numerous vice(s), and depravity. The foremost being usual and casual denial of the relationship(s) of tenancy by the tenant on number of scores. In this context, the setting up of the defence of adverse title; and being put into the possession of the property on account of some alleged agreement(s) to sell or by some third party etc. Was (were) a common phenomena. Besides, the issues, about the rate of rent; the nature of the property, as also the use for which it was rented out, the subletting, got more and more complexed. There was considerable mess and confusion(s) and grey areas in the field. Above all, it was an eminent public perception that Ordinance, 1959 is a law, which is too pro the tenants. 7. It seems that in order to eliminate the confusions and to sort out the vice(s) which had emerged and surfaced in relation to the disputes, inter se the landlord and tenants under the Ordinance, and with a view to meet the present day exigencies and to draw a balance for regulating the relationship inter se the landlord(s) and the tenant(s), the legislature thought expedient to enforce a new law, which should be self serving and comprehensive in nature, on the subject. Thus, firstly an Ordinance was enforced in 2007, followed by an Act, titled Punjab Rented Premises Act, 2009. In this law(s) inter alia in order to exclude, rather virtually preclude the creation of leases/ tenancies orally or through unregistered instruments, which earlier in practical terms was not impermissible, and such a situation had added, to the flummox and abundance to the rent litigation, and the prolongation thereof, had augmented to the miseries of the litigant, that Section 5 seems to have been introduced, which provides a mechanism, as to how a tenancy for the purpose of the Act ibid (2009) shall be created; the section reads as under:- "5. Agreement between landlord and tenant.- (1) A landlord shall not let out a premises to a tenant except by a tenancy agreement. (2) A landlord shall present the tenancy agreement before the Rent Registrar. (3) The Rent Registrar shall enter the particulars of the tenancy in a register, affix his official seal on the tenancy agreement, retain a copy thereof and return the original tenancy agreement to the landlord.
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(4) The entry of particulars of the tenancy shall not absolve the landlord or the tenant of their liability to register the tenancy agreement under the law relating to registration of documents. (5) A tenancy agreement entered in the office of a Rent Registrar or a certified copy thereof shall be a proof of the relationship of landlord and tenant. (6) Any agreement which may be executed between the landlord and the tenant in respect of the premises shall be presented before the Rent Registrar in the same manner as provided in subsection (2)." ' It is expedient to mention here, that in all the erstwhile laws on the subject, such a stipulation was never the requirement of the law. Anyhow, it is clear from the language of subsection (1) that a specific command has been given to the landlord that he "shall not let out a premises to a tenant except by a tenancy agreement", and as per definition clause section 2(m) "a tenancy agreement means an agreement in writing by which landlords let out a premises to a tenant" meaning thereby, that the very creation and the subsistence of a valid tenancy has been made subservient and subject to the execution of a written tenancy agreement, which agreement the landlord is obliged to present before the Rent Registrar for the registration [see Section 5(2)]. The above mandate of law, is fortified by the factum that the certified copy of the tenancy agreement has been made the proof of relationship of tenancy [see section 5(5)]. In my opinion, through this mechanism an effort has been made, to do away with the possibility of any grey areas and the confusions in regard to the creation of tenancies and the issues related and having nexus thereto. 8. Further, in line with the above stated object and with a view to ensure precision, leaving wee room for uncertainty, even in regard to the contents of such tenancy agreement(s), section 6 of the Act, 2009 stipulates as under:- "6. Contents of tenancy agreement.-(1) A tenancy agreement shall contain, as far as possible, the following: (a) particulars of the landlord and the tenant; (b) description of the premises; (c) period of the tenancy; (d) rate of rent, rate of enhancement, due date and mode of payment of rent; (e) particulars of the bank account of the landlord, if the rent is to be paid through a bank; (f) the purpose for which the premises is let out; and (g) amount of advance rent, security or pagri, if any. (2) If the tenure of the tenancy is fixed but a rent is fixed only for a part of the tenure, in the absence of any stipulation to the contrary in the tenancy agreement, the rent shall be deemed to remain the same for the whole of the tenure." ' Be that as it may, pursuant to the resolution of the proposition herein involved- (note: mentioned in the opening para of the judgment), I would also like to add here that both, Ordinance, 2007 and Act, 2009 were given immediate effect in the words "it shall come into force at once" and on the enforcement of the latter enactment, as per section 35 of the Act, 2009 (section 35 of the Ordinance, 2007 also), the Punjab Urban Rent Restriction Ordinance was repealed, besides according to section 4 of the Act, 2009, this law has an overriding effect on any law for the time being in force. However, all the matters which were pending adjudication under the repealed law were preserved and saved to be decided according to the earlier law, but (such matters) were transferred to the forum i.e,. Rent Tribunal, constituted under the new enactment (note:- see section 35). From the object clause of these two new legislations and from the parts/ sections thereof (note: which have been mentioned above or shall be referred in the succeeding part of the judgment), it is clear that all the existing tenancies, may be oral or the one constituted vide registered or unregistered instruments, or for that matter, even statutory tenancies, in respect of which the disputes between the landlord and tenant had not yet even arisen, were also brought
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into the net and purview of Act, 2009 and made amenable to the jurisdiction of the Rent Tribunal with immediate effect (a specific forum created under the Act, 2009 for that purpose). In other words the existing tenancies were not set apart or separated or saved to be dealt with under the repealed law, except the pending matters. Rather in relation to the disputes in respect of the existing tenancies arising in future, were to be adjudged under the provisions of Act, 2009, from the date of its enforcement. Resultantly in order to keep the conformity and parity with respect to the class/category of cases which might come before the Rent Tribunal in future, (obviously under Act 2009 now), and for the purposes of catering for and for securing the rights and liabilities of the landlord(s) and the tenant(s) qua previous (existing) tenancy(ies), section 8 of Act, 2009 mandates as:-- "8. Existing tenancy. - An existing landlord and tenant shall, as soon as possible but not later than two years from the date of coming into force of this Act, bring the tenancy in conformity with the provisions of this Act." 9. Thus, from the above stated legal position and the factual backdrop, it is my candid opinion that the nature, the interpretation and the effect of section 9' in relation to the proposition in hand, (note: stated at the very outset of this judgment) has to be reckoned and made, keeping in view the aforementioned object(s) of the law, not only with respect to those tenancies coming in being in future, but also those existing (prior to the new law). And this has to be done on account of the collective reading of sections 9, as also the other provisions of the Act mentioned earlier, including 5, 6, 7 ibid, and thus it should be determined and adjudged, as to whether the said Section (9) is a mandatory or a directory provision of law and the effect thereof. ' Before proceeding further with the matter, it may be expedient to state here, that sections 12 and 13 of the Act, 2009, also have an important bearing and nexus to the proposition of this case, which sections define and prescribe the statutory obligations of the landlord and a tenant towards each other, including, for example, the duty of the landlord to provide the copy of the tenancy agreement to the tenant [see section 12(1)(a)] and the obligation of the tenant to hand over vacant possession of the premises to the landlord on the determination (expiry) of the tenancy [see section 13(1)(d)]. Besides, these two provisions also envisage the remedies available to both the above named (landlord and tenant), if there is any breach of such obligation on either of their parts. In this context reference can also be made to another important provision of the Act, 2009 i.e,. Section 10, which provides that no agreement to sell etc., after the execution of the tenancy agreement (emphasis supplied) between the parties (landlord and tenant) shall affect, the relationship of tenancy, unless the tenancy is revoked by a written agreement entered before the sub-Registrar in accordance with the provisions of Section 5 of the Act, 2009. Moreover, in section 15 of the Act, 2009 which prescribes the grounds for the eviction of a tenant, the expiry of period is now a new addition, which is one of the grounds of eviction, and this is in sharp contrast to the earlier law (1959 Ordinance), because the expiry of period of tenancy was irrelevant, as the express provisions of section 13 thereof, provided that no tenant shall be evicted except as per the provisions of the said Section (13 ibid) and the expiry of tenancy period was not one of the grounds stipulated therein. 10. Reverting to the proposition in hand, it seems expedient at this stage to reproduce section 9 of the Act 2009, which reads as under:-- "9. Effect of non-compliance.- If a tenancy does not conform to the provisions of this Act, the Rent Tribunal shall not entertain an application under this Act--- (a) on behalf of the tenant, unless he deposits a fine equivalent to five percent of the annual value of the rent of the premises in the Government treasury; and (b) on behalf of the landlord, unless he deposits a fine equivalent to ten percent of the annual value of the rent of the premises in the Government treasury."
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' Upon the unmistakable reading of the Section and especially when conjointly read with all other relevant provisions (referred to supra) it seems that all these are integrated provisions, having nexus to the very purpose of the Act as described above, and the palpable object of the law is to compel the parties to enter into a tenancy agreement within the purview and scope of the provisions of sections 5, 6 and 7 of the Act, 2009 (read together). Therefore, a penalty has been provided by the law for the breach of the obligations, envisaged thereby, in that, where the tenancy agreement is not so entered and registered and a D landlord or the tenant approach the Tribunal for the enforcement of his right(s) under the Act, 2009 he has to pay a fine. The definition (of fine) whereof is "a sum of money as a penalty by a Court of law" OR "a punishment to pay a sum of money for the breach of the law". As it is a penalty and a punishment which has been imposed by the law itself, thus the Tribunal is left with no discretion to waive it off, exonerate or absolve a party coming before it, from such a fine. Anyhow for the present, the fundamental and critical moot points are:- (a) what is the point of time when such fine is to be imposed by the Rent Tribunal? (b) What is the effect if the fine is not deposited 'as imposed by the…
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