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IN THE HIGH COURT OF SINDH, KARACHI

C.P. No. S-964 of 2021

Petitioner : Hascol Petroleum Limited, through

Ms. Amna Salman, advocate.

Respondent No.1 : 3rd Senior Civil Judge/Rent Controller

Malir, Karachi

Respondent No.2 : Shahzaib Rind, through

Mr. Munim Masood, advocate.

Date of hearing : 11.04.2022

Date of order : 11.04.2022

ORDER

ZAFAR AHMED RAJPUT, J:- This Constt. Petition is directed against the

order dated 09.11.2021, whereby the learned Rent Controller-III, Malir

Karachi ( respondent No.1-“Rent Controller”) dismissed the application filed

by the petitioner/opponent under section 34, Arbitration Act, 1940 read

with section 94, C.P.C. in Rent Case No. 03 of 2021.

2. Brief facts of the case are that the respondent No. 2/applicant

filed Rent Case No. 03 of 2021, under section 15 of the Sindh Rent

Control Ordinance, 1979 (“Ordinance, 1979”), before the Rent Controller

against the petitioner, alleging therein that he and the petitioner

executed a registered Lease Deed, dated 16.05.2017, in respect of a plot,

admeasuring 11,049.225 sq. fts., out of an area of 1,227.69 sq. yds.,

bearing Plot No.1, Survey No.443, situated at Main National Highway,

Deh & Tapo Landhi, Taluka Ibrahim Hyderi District Malir, Karachi, for

inter alia, running a petrol pump/CNG station on rent @ Rs.150,000/-

per month with increase at the rate of 10% after every four years, which

would be paid in advance for the initial period of one year from the date

of execution of the Lease Deed and on full adjustment of the advance

rent so paid, the rent for the remaining period shall be paid on monthly

basis by 10th day of every month, during the said lease period and

renewal thereof. It is case of the respondent No. 2 that the petitioner paid

the rent during the year of 2019, for the year 2018 and then it paid the
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rent of February and March, thereafter, till filing of the rent case, it

deliberately and intentionally failed to pay the rent of the last 22 months

and made lame excuses on one pretext to another; therefore, the

respondent No.2 filed aforesaid rent case seeking directions to petitioner

to pay the previous 22 months’ rent alongwith update rent, till the final

disposal of the rent case and handover the physical and peaceful

possession of the demised premises.

3. On being served with the notice of the rent case, the petitioner filed

an application under section 34, Arbitration Act, 1940 r/w section 94,

C.P.C before the Rent Controller, praying therein to stay the proceedings

of the rent case and to refer the parties to arbitration in accordance with

clause-11 of the Lease Deed. Respondent No.2 filed counter affidavit to

the application. The Rent Controller after hearing the parties dismissed

the said application, vide impugned Order. Being aggrieved, the

petitioner has preferred instant Constt. Petition.

4. Learend counsel for the petitioner has contended that the Leased

Deed executed between the parties is coupled with interest; that as per

clause-11 of the Leased Deed, any dispute arisen between the parties

would be referred to the Arbitrator; therefore, the Rent Controller has no

jurisdiction to entertain the rent case filed by the respondent No. 2; that

as per clause-7.4 & 7.5 of the Leased Deed, the respondent No. 2 had to

give 30 days’ notice prior to approaching the Court but no such notice

was issued to the petitioner; that while passing the impugned Order, the

Rent Controller failed to appreciate that, having failed to comply with the

condition of clause-7.4 of the Lease Deed, the respondent No. 2 is barred

from filing rent case; as such, the subject rent case could not have been

instituted; that the Rent Controller failed to appreciate that while

exercising function as a persona designata, it exercises authority as a

Rent Controller and; therefore, it is not debarred from taking guidance

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from the settled principles of law and justice incorporated in the C.P.C.

In support of her contentions, learned counsel has relied upon the case

of Yezdiar Homi Kaikobad and another v. Ferozsons Ltd. through Chief

Executive and 3 others (2005 YLR 783), Central Talkies Ltd., Kanpur v.

Dwarka Prasad (AIR 1961 Supreme Court 606) and Musammat Dirji v.

Srimati Goalin [ILR 1940 (Vol. XX) Patna Series 373].

5. On the other hand, learned counsel for the respondent No. 2 has

maintained that the Rent Controller is competent to try the rent case;

that as per clause-11 of the Lease Deed, the dispute arising between the

parties would be referred to the Arbitrator, whereas the rent case was

filed under clause-7.4 of the Lease Deed; that the petitioner was given

notice prior to filing of the rent case but despite that it committed default

in payment of rent; that as per Lease Deed, the petitioner was under

contractual obligation to pay the rent; however, it committed breach of

obligations leaving the respondent No.2 at no option but to file the

subject rent case and the petitioner after delaying the rent proceedings

for one baseless ground or the other, moved an application under section

34 of the Arbitration Act, 1940 which was rightly dismissed by the Rent

Controller, vide impugned Order. In support of his contentions, learned

counsel has relied upon the case of Ch. Naseer Ahmed and another v.

Rent Controller and others (2018 YLR 29)

6. Heard the learned counsel for the parties and perused the material

available on record with their assistances.

7. For the sake of convenience, Clauses-7.4, 7.5 and 11 of the Leased

Deed are reproduced herein under:

Clause-7.4 “If any rent shall be sixty (60) days in arrear the
Lessor shall be on the expiry of sixty (60) days give notice thereof
to the Lessee in writing to pay the arrears in rent to the Lessor
within thirty (30) days of the receipt of notice and
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notwithstanding of the receipt of notice of the Lessee, the Lessee

still fails to tender the rent, the Lessor shall be entitled to seek
redress through Court of Law for payment of rent or any other
remedy available under the law.”

Clause-7.5 “If the Lessee shall omit to perform or observe any

covenant or condition on the part of the Lessee herein, contained
and shall continue for ninety (90) days after notice in writing
thereof to the Lessee, the Lessor shall be entitled to seek redress
through Court of Law for the performance of observance of such
covenant or condition by the Lessee.”

Clause-11 “lf any question, difference or objection whatsoever,

or any other dispute of whatsoever cause and nature shall arise
in any way connected with or arising out of this Deed or the
meaning or operation of any part thereof or the rights, duties or
liabilities of either Party, then every such matter shall be referred
for arbitration to the Company's General Manager Retail or his
nominee or such other officer of the Lessee may designate and
his decision shall be final and binding on both Parties. Arbitration
under this Deed shall be conducted under the Arbitration Act
1940, and shall be held at Karachi.”

8. It appears prima facie that under clause-7.4 of the Lease Deed, the

respondent No. 2 is entitled to seek redress through a Court of law for

delay in payment of rent if rent is due for 60 (sixty) days and he serves

upon the petitioner a notice in writing and the petitioner fails to tender

the rent within 30 (thirty) days of such notice. The above clause is not in

contravention of section 28 of the Contract Act, 1872, for it does not

restrict the respondent No. 2 absolutely from enforcing his rights, rather

implements a mechanism for redress of the said respondent’s grievances;

however, imposes a condition of serving 30 days’ notice upon the

petitioner. The petitioner claims that the respondent No.2 has failed to

comply with said condition, which respondent No.2 denies. Hence, due to

divergent pleadings of the parties, the said factual issue is required to be

determined by the Rent Controller after recording pro and contra

evidence of the parties.

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9. It may be observed that cluses-7.4 and 7.5 are independent

clauses of the Lease Deed, that provide remedy to respondent No.2 to

seek redress through Court of Law for payment of rent or through any

other remedy available under the law in case the petitioner fails to pay

arrears of the rent upon service of requisite notice, and/or the petitioner

omits to perform or observe any covenant or condition on his part and

continues for ninety (90) days after notice in writing thereof, the

respondent No. 2 is entitled to seek redress through Court of Law for the

performance of observance of such covenant or condition by the

petitioner.

10. It may also be observed that expression “arbitration agreement”

within the contemplation of section 2 (a), Arbitration Act, 1940 means a

written agreement to submit present or future differences to arbitration.

The dispute between the parties must be one which is covered by the

arbitration agreement. In the instant case, the nature of disputes which

are to be referred to arbitration have been specified under clause-11 of

the Lease Deed in general terms that in the event of arising any question,

difference or objection or any other dispute in any way connected with

Lease Deed or the rights, duties or liabilities of either party, every such

matter shall be referred to arbitration to the petitioner’s Company's

General Manager Retail, etc. However, in view of clauses-7.4 and 7.5 of

the Lease Deed, the dispute of arrears of rent between the parties

appears to be a matter excluded from disputes referable to Arbitrator.

11. Section 13 of the Ordinance, 1979 provides that “no tenant shall

be evicted from the premises in his possession except in accordance with

the provisions of this Ordinance.” Sections 14 and 15 of the Ordinance

postulate the grounds for the eviction of the tenant. There is, thus, no

manner of doubt that a tenant cannot be ejected except in accordance

with provision of section 13 (ibid) and since said provision does not
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permit a Rent Controller to order or disallow ejectment of a tenant in

terms of an award given in pursuance of an arbitration agreement,

clause 11 of the Lease Deed relied upon by the petitioner is of no

consequence. It may be observed that a Rent Controller exercising

jurisdiction under the Ordinance, 1979 is a Persona designata and not a

Court as such. As a matter of fact, the Controller has to make such

enquiry as deemed necessary by him for his satisfaction that if the

ground or grounds on which eviction of the tenant is sought does/do

exist. Thus within such limited scope of enquiry reference to arbitration

is obviously not contemplated. Moreover, the Controller being not the

civil Court has no jurisdiction to receive an award from the arbitrator

and to make the same as rule of the Court. It, therefore, follows that the

provisions of the Ordinance, 1979 as a whole are clearly intended to

exclude the reference of disputes between the landlord and tenant for

their settlement to arbitration. Reliance in this regard may be placed in

the case of Masood Hussain Anwar v. Sheikh Muhammad Amin (1982 CLC

1777).

12. For the foregoing facts, discussion and reasons, I find no illegality

or infirmity in the impugned Order, requiring any interference of this

Court under its Constitutional jurisdiction; hence, instant petition is

dismissed, with no order as to costs.

Above are the reasons of my short order, dated 11.04.2022,

whereby instant petition was dismissed.

JUDGE

Athar Zai