Al Wakeelo
Your Digital Lawyer, Always on Duty
Initializing Secure Chambers
Your Digital Lawyer, Always on Duty
Initializing Secure Chambers
Petitioner: Messrs KHAWAJA AUTO CARS LIMITED VS Respondent: MUHAMMAD YOUSUF And Other
Court Name: Supreme Court of Pakistan Judge(s): Nasim Hasan Shah, Ajmal Mian, Zaffar Hussain Mirza Title: Messrs KHAWAJA AUTO CARS LIMITED vs MUHAMMAD YOUSUF And Other Case No.: Civil Appeal No.348-K of 1990 Date of Judgment:1991-06-16 Reported As: 1991 SCMR 2223 Result: Appeal dismissed
JUDGMENT
JUDGMENT ZAFFAR HUSSAIN MIRZA, J.-----This appeal by leave of this Court arises out of Suit No.267 of 1968, which was instituted in the Court of the Civil Judge, at Karachi by M/s. Khawaja Auto Cars Limited a company registered under the Companies Act through its Managing Director Ramzan Khan, the appellants herein, against the respondents seeking a decree for a mandatory injunction directing the respondents "to remove the platform and obstruction in front of the gate and passage of compound, and godowns and open the gate forthwith restoring to its original condition". A further prayer for prohibitory permanent injunction against the respondents was also sought to restrain them "from further blocking the gate and passage and to interfere with the free enjoyment of legal rights of the plaintiffs". The dispute in the suit relates to the premises consisting of the entire ground floor with compound of the building erected on Plot No.31/5, Survey Sheet No.PR 2, in the Preedy Quarters, Victoria Road, Karachi. The case of the appellants was that the suit property was purchased by the respondents from the Settlement and Rehabilitation Department, Government of Pakistan, Karachi, and therefore, they were the landlords of the same, whereas the appellants claimed to be the statutory tenants in respect of the same. Giving the background of the facts leading to their acquisition of the rights of statutory tenancy, the appellants pleaded that the suit premises was purchased alongwith the running business by the said Managing Director of the appellants/company on 30th October, 1947, on the terms and conditions reduced into writing in an agreement of the same date entered between Motiram Kerplani of Krips Auto Mobile Company and Ramzan Khan son of Raja Khan on the same terms on which the property was held by the former from the landlords of the building. It was averred that the property comprising the premises in dispute was subsequently
---
## Page 2
allotted in favour of Ramzan Khan on 19th May, 1952. The cause of action for filing the suit described in the plaint was that the respondents blocked the passage and entrance to the compound and godowns being used since 1947 by the appellants. The respondents resisted the suit and denied the claim of the appellants of being statutory tenants of premises in dispute and asserted that Muhammad Ramzan Khan was the statutory tenant of the defendants in the said premises. Some other pleas were also raised but it is not necessary to refer to them. The legal plea raised by the respondents was that the appellants had no locus standi to institute the suit. The main controversy between the parties centred round the question whether the appellants are the statutory tenants of the suit premises which was framed as the first issue by the trial Court. Muhammad Ramzan Khan the Managing Director of the appellant/company himself appeared in evidence and has recounted the antecedent facts whereby he had come into possession of the premises. He deposed that when the running concern was purchased from the Hindu owner it was purchased by the partnership concern in which he was a partner of Khawaja Auto but he had executed the agreement in his personal capacity. Subsequently in 1956, the concern was incorporated as a company. The trial Court held on the first issue that as the appellants are a limited company with Ramzan Khan as its Managing Director, the said company is a distinct entity from Ramzan Khan who had acquired the tenancy rights under the agreement Ex.P.W./1 and in whose favour the allotment order was issued by the Rehabilitation Authorities. From these facts the learned trial Court concluded that the appellants cannot claim to be the tenants and mere acceptance of rent by the landlord did not have the effect of creating tenancy in their favour. Accordingly the suit was dismissed by the IXth Civil Judge, 2nd Class, Karachi, by judgment, dated 18th August, 1969. Being aggrieved the appellants went up in appeal but their appeal was dismissed by the Vth Additional District Judge, Karachi, vide judgment dated 7th August, 1978. Still being dissatisfied the appellants ultimately challenged the judgments and decrees passed by the Courts below in a civil revision before the High Court of Sindh at Karachi, which was also dismissed by the judgment, dated 1st October, 1987. Leave was granted in this case in order to examine inter alia, the contention that the Courts below had failed to appreciate that the appellants/company have been all along in undisputed possession of the premises ever since 2nd September, 1956, much before the target date viz., 20th December, 1958, and were in possession of the property within the meaning of section 2(6) of the Displaced Persons (Compensation and Rehabilitation) Act, 1958 and thus I tenants under the law. Before adverting to the contentions and the arguments of the learned counsel for the parties, it will be useful to refer to the conclusions arrived at by the learned Single Judge in the High Court and the reasons that prevailed with him. It was urged before the learned Judge on behalf of the present appellants that they had acquired the tenancy rights under section 30 of the Displaced Persons (Compensation and Rehabilitation) Act, 1958 (hereinafter referred to as the Act), because they were in possession of the premises since 1956, from the time when the appellants were incorporated as a company, therefore, they had the locus standi to file the suit. Referring to the evidence on the record learned Judge observed that there appears no dispute that Ram7an Khan was carrying on business in the premises under the name and style of Khawaja Auto Cars. He was, therefore, the tenant of the respondents in the year 1956. He subsequently converted his business into a limited company under the name and style of Khawaja Auto Cars Limited of which he was the Managing Director. On behalf of the respondents it was conceded that cheques for rent issued by the appellants/company were accepted but at no point of time, the appellants, were acknowledged as tenants, and therefore, tenancy rights cannot be claimed on the basis of the acceptance of rent cheques issued by the appellants. A further argument was advanced on behalf
---
## Page 3
of the respondents that in any event the right of statutory tenancy under section 30 did not devolve upon the appellants by operation of law because their possession was not in terms of section 2(6) of the Act. Learned Single Judge accepted the argument advanced on behalf of the respondents and recorded his conclusion which is reproduced in his own words hereinunder:-- "It is thus clear that as the applicants claim to be the tenants by virtue of section 30 of the Act, they should have established that they are in possession of the premises in terms of section 2(6). Their claim is that they are in possession through their Managing Director who was Ramzan Khan at the time when the suit was filed. Independent of Ramzan's right the applicants have not filed any document to establish their claim. From the applicants' own assertion it is evident that their possession does not fall within the ambit of section 2(6)." The alternate argument on behalf of the present appellants before the learned Single Judge was that as the rent was paid by the appellants through cheques which were accepted by the respondents, tenancy rights were created in their favour. This argument was also repelled by the learned Single Judge on the line of reasoning which appears from the following passage of the judgment:-------- "In this regard certain facts may be mentioned. Ramzan Khan was the tenant and carried on business under the name and style of Khawaja Auto Cars. He converted his business into a limited company in the year 1956 under the name and style Khawaja Auto Cars Limited. The contention of the respondents is that even after incorporation of the company, Ramzan Khan remained in possession and carried on the business. The learned counsel for the respondents has referred to the written statement filed by Ramzan Khan in Suit No.173 of 1964 in which he admitted that he was the tenant of the premises and that he was in possession of the premises. No assertion was made that Khawaja Auto Cars Limited are the tenants. In reply to a notice of the respondents, dated 20th April, 1964; Ramzan Khan asserted that he was in actual possession of the premises from the year 1947, and that he has changed the name of his business as Khawaja Auto Cars Limited. No plea was taken that the applicants are in possession and have become statutory or contractual tenant. This shows that before the riling of the suit by the plaintiffs Ramzan Khan has been treated to be the tenant and in possession of the premises. In these circumstances the learned counsel for the respondents contended that mere occupation by the applicants and payment of rent through cheques will not confer any right of tenancy on them. The learned counsel referred to Boman Abadan Irani and others v. Jahangir J. Mobed and others (PLD 1960 Kar. 276) where it was observed that mere payment of rent by lessee or friend of lessee does not constitute sub-lease or assignment of lease. This judgment was challenged in appeal in Boman Abadan Irani v. Jahangir J. Mobed (PLD 1967 Kar. 449) where Division Bench held that mere accepting cheques issued by the company could not signify consent to a sub-lease." The final conclusion reached by the learned Judge was summed up in the following words:------ "From the facts and circumstances of this case it is apparent that the respondents had not signified their consent for assignment of lease or subletting or transfer of lease in favour of the applicants. It was Ramzan Khan who was the tenant and was treated as such. Merely because letters were written by the Accountant and rent was sent and accepted does not confirm that the respondents had consciously acknowledged the applicants as their tenant. As the applicants are not the tenant they had no right to file the suit." Mr. S. Sharifuddin Pirzada has raised the following contentions:----- (i) That the meaning and scope of the word `possession' in section 30 of the Act has not been properly construed by the learned Judge, in the light of the definition of the term `possession' in section 2(6) of the Act read with notification issued by the Central Government under the second proviso thereof.
---
## Page 4
(ii) That the learned Single Judge had erred in holding that acceptance of rent in the facts and circumstances of this case did not rate the tenancy in favour of the appellants. (iii) That the learned Single Judge had erred in law in relying upon the written statement of Ramzan Khan in Suit No.173 of 1964 and the reply to the notice sent by the respondent on 20th April, 1964, as these two documents were not admissible in evidence and their contents could not be looked into. In order to appreciate the argument of the learned counsel it will be advantageous to refer to the relevant part of section 30 of the Act which reads as follows:------ "Section 30. Protection of certain occupants.--(1) Where any person is in possession of any evacuee house or shop or has been declared on or before the twentieth day of December, 1958, by a Custodian to have tenancy rights from a date prior to the fourteenth day of August, 1947, in any industrial concern,, cinema house or printing press which is transferred to any other person under the provisions of this Act, then, notwithstanding anything contained in any other law such person shall, without prejudice to any other right which he may have in that house, shop, industrial concern, cinema house or printing press, be deemed to be a tenant of the transferee on the same terms and conditions as to payment of rent or otherwise on which he held it immediately before transfer: Provided that:------ (a) . ......................................................... (b). ......................................................... (2) ......................................................... (3) .......................................................... (4). .......................................................... Clause (6) of section 2 of the Act which defines the word "possession' reads as follows:-- `possession' means possession obtained in pursuance of an order passed on or before the twentieth day of December, 1958, by a Rehabilitation Authority or a Custodian or any other officer authorised or permitted by the Central or Provincial Government: Provided that if a question arises whether an officer was so authorised or permitted, decision of the Chief Settlement Commissioner in that behalf shall be final: Provided further that the Central Government may, by order in writing direct that a class or classes of such persons as have not obtained possession as aforesaid shall, subject to such conditions as may be specified in the order, be deemed to be in possession for the purpose of this Act:" It may be pointed out that the second proviso to the definition of the term "possession" was inserted by Ordinance No.LIII of 1959 with effect from 28th September, 1959. In pursuance of the power conferred on the Central Government under the said second proviso Notification, dated 13th October, 1959, was issued which is in the following terms: "No.F.l. (27)/59-SI, 13th October, 1959 (Gazette, Extraordinary, 26 October, 1959)--In exercise of the powers conferred by the second proviso to clause (6) of section 2 of the Displaced Persons (Compensation and Rehabilitation) Act, 1958 (XXVIII of 1958), the Central Government is pleased to direct that a claimant, a non-claimant displaced person or a local who has not obtained possession of a house or a shop in pursuance of an order passed by a competent authority on or before the twentieth day of December, 1958, shall, for the purpose of the aforesaid Act, be deemed to be in possession thereof, if he has been in undisputed occupation of the house or the shop since before the twenty-first day of December, 1958, and no other person is otherwise entitled to the transfer of such house or shop in pursuance of a anal order passed by a competent authority before that day: Provided that the rent and other public dues in respect of such house or shop have been paid by the occupant from the date of his occupation and, if he is a claimant, such amount is adjusted against his claim."th
---
## Page 5
The consideration of the contentions raised on behalf of the appellants may now be taken up in seriatim. Referring to the first contention advanced on behalf of the appellants the question is whether the appellants as an incorporated company were in possession of the disputed premises within the meaning of section 30 of the Act. The grievance on behalf of the appellants was that the word "possession" as used in the said section 30 has not been properly construed in the light of the definition of the said term in section 2(6) of the Act read with the notification issued by the Central Government, dated 13th October, 1959. It as argued that the High Court was not justified in holding that the appellants were not in possession within the meaning of section 2(6) on the basis of Ayoob and another v. Masjid-e-Noman (1973 SCMR 604), the facts of which were distinguishable. In that case the appellants were claiming statutory tenancy, in respect of a building site, and the claim was rejected on the ground that section 30 of the Act extends protection to a person in possession of any evacuee house or shop and more importantly the case considered the definition of "possession" under section 2(6) with respect to the enacting part of those provisions without reference to the Central Government Notification, dated 13th October. 1959, issued under the second proviso to section 2(6) which extended the definition by a deeming provision to a person in unauthorized occupation since before the target date It may be pointed out that in this case the respondents admittedly purchased the property in dispute from the Settlement Department in the year, 1959. It is quite plain from the reading of section 30 that statutory tenancy is created by operation of law on the happening of the event of transfer of evacuee property of the nature described therein in favour of any person under the provisions of the Act. If, therefore, the premises in dispute were transferred in favour of the respondents in October, 1959, the extended meaning of possession as envisaged in the Notification, dated 13th October, 1959, would be directly attracted in this case if it is shown that the property comprising the premises was transferred in favour of the respondents after the date of the notification. From the copies of the evidence on the record, all that appears is that the respondents had purchased the property in the year 1959. There appears nothing on the record to indicate as to on what date the transfer was actually effected in their favour by the Settlement Department. However, reference has been made to a document placed on record (page 78 of the paper book) which is a photostat copy of a letter, dated 2nd December, 1959, by the Deputy Settlement Commissioner (Auction) addressed to (illegible) wherein it has been stated that the property was purchased by Muhammad Yousaf and others in public auction, which has been confirmed by the Chief Settlement Commissioner. Therefore, the letter advised that the rent may be paid to the auction-purchasers with effect from 13th November, 1959 (forenoon) the date on which the possession of the building had been handed over to the auction-purchaser. A copy of the names of tenants was also attached with regard to each tenement in the building to the auction purchasers for their information. Mr. H.A. Rahmani, learned counsel for the respondents objected to the consideration of this document on the ground that this document was not produced in the evidence or exhibited in the proceedings of the suit but was produced in the ejectment proceedings between the parties. In the list attached with the documents the name "Mr. Ramzan Khan, Khawaja Auto Cars Limited", is shown as the tenant and allottee in respect of tenement G/1. However, this document also does not give the date of the transfer of the property, although rent has been said to be payable with effect from 30th November, 1959. The question is whether this document be relied upon for the purpose of deciding the legal question whether the extended meaning of the term "possession" can be applied in this case, and since the authenticity of the document has not been challenged and no argument was advanced that the notification was not applicable because the transfer had taken place on an earlier date, it will be reasonable to hold that the transfer was effected after the Notification, dated 13th October, 1959. Clearly the learned Judge in the High Court did not take into
---
## Page 6
consideration the said notification, while determining the question as to the possession of the appellants in the premises and relied upon the case of Ayoob and another v. Masjid-e-Noman (1.973 SCMR 604), which was also decided without reference to the said notification. The submission to the extent that the definition of "possession" in section 2(6) was applied without reference to the notification is, therefore, well founded. However, on behalf of the appellants reliance was placed on three judgments which need to be considered, namely Muhammad Iqbal v. Mehraj Din and another (PLD 1976 Lah. 831), Muhammad Moosa and others v. Shabbir Ahmad and another (1984 CLC 3227) and Barkat Ali v. Muhammad Sharif (PLD 1966 SC 817). The Lahore case was referred to show that the rule laid down in Ayoob's case was not applied to the case of premises raised on a plot of land which was transferred as a plot under the Settlement Scheme, but for purpose of section 30 was treated as a house. In this case also, view was taken that although Department transferred the property as open plot since at the time of transfer, permanent constructions were raised, and were being used as shop and house, they were held to be properties within the purview of section 30, whereby the relationship of landlord and tenant was created by the statute. In the case of Moosa from the Sindh High Court, similarly tenant had raised constructions over plot transferred to the landlord and was using them for commercial and residential purposes. The question whether tenancy right was created under section 30 of the Act, was decided in favour of the tenant. It was, however, held in this case that the connotation of the term "possession" under section 2(6) was different in scope from the said word used in section 30 because the former provision is intended to determine the eligibility of an applicant for transfer of a particular unit of property whereas under section 30 "possession" is intended "to ensure .a safe and peaceful continuity of occupation by the occupant tenant for a period of six years". This construction was fortified by reference to section 30(3)(ii) of the Act where the word "possession" has been used and it was held that there it cannot be read as possession as defined in section 2(6) of the Act. Supreme Court cases of Barkat Ali cited by the learned counsel for the appellants is relevant for interpretation of the words "final order" in the Notification, dated 13th October, 1959. It was held in this case as under:----- (i) `It is true that unless the occupation of a person falls within the definition of `possession', as extended by the notification in question, he would have no right to claim transfer of the property under the Schedule to the Act. An essential condition of entitlement under the Schedule is `possession'. It seems to me, however, that the idea behind the extended definition of `possession', contained in the notification, was to confer a benefit on those who were in undisputed occupation of the property before the twenty-first day of December, 1958, even though they held no allotment order in their favour. It would amount to taking away with one hand what is given by the other, if the notification is interpreted to mean that, although the person concerned may be in undisputed occupation of a part of the premises since before the relevant date, he could be defeated by another person in possession albeit a local, provided he relied on an allotment order. This does not appear to be in consonance with the scheme of the Act and the Schedule which evinces a distinct solicitude for claimants as against non-claimant displaced persons and locals. (ii) The condition, mentioned in the notification, that there should be no person in existence holding a final order passed by a competent authority' entitling him to transfer of the property in question, may be intended to refer to such possible cases or it may even have been inserted therein by way of abundant caution. If the intention, as is suggested, was to protect the alleged rights of allottees alone, it is unintelligible why a simpler and a clearer formula could not have been adopted to achieve that result. It would have been sufficient to say in that case; `arid no other person is otherwise satisfied to the transfer of such a house or shop in pursuance of an allotment order passed by a competent authority before that date'. That would have removed all ambiguity from this clause and placed the matter beyond doubt."
---
## Page 7
From the cases cited on behalf of the appellants it would appear that the question whether the appellants were in possession of the disputed premises at the time of their transfer in favour of the respondents, can either be decided in the light of the definition of the term "possession" under section 2(6) as a term of art or the said term in its ordinary dictionary meaning. It was urged on behalf of the respondents that possession of the appellants was not in terms of section 2(6) of the Act and that the notification, dated 13th October, 1959, issued under the second proviso to the aforesaid provisions was not applicable to the case of the appellants. The submission was that the second proviso to section 2(6) has to be construed as a proviso in the light of the enacting provisions of section 2, clause (6), so as to conform with the principles postulated in this behalf by this Court in M/s. East and West Steamship Company v. Pakistan (PLD 1958 SC 41), as under: "In principle also, the words of a proviso are to be construed strictly and confined to the special case which its words enact; it would be wrong to construe those words as being…
Read the unabridged text and precedent citation network on Al Wakeelo Legal Research Platform.