Dr. Zulfiqar Ali vs Adj etc.

Stereo. H C J D A-38.

JUDGMENT SHEET

IN THE LAHORE HIGH COURT, MULTAN BENCH

MULTAN.

JUDICIAL DEPARTMENT

W.P. No.5005 of 2023

Dr. Zulfiqar Ali Khan

Versus

Additional District Judge, etc.

JUDGMENT

Date of hearing: 07.10.2026.

Petitioner by: Mr. Khalid Ashraf Khan, Advocate. Respondents by: Ch. Muhammad Manzoor, Advocate (for respondents No.3 to 5).

Respondents No.6-A to 6-C ex parte.

MUHAMMAD SAJID MEHMOOD SETHI, J.- Through the instant petition, the petitioner has assailed the judgments dated 28.03.2022 and 22.03.2023, passed by the learned Special Judge (Rent), Multan, and learned Additional District Judge, Multan, respectively, whereby the ejectment petition filed by respondents No.3 to 5 was concurrently accepted on the ground of expiry of the tenancy agreement, and the appeal preferred by the petitioner against the said judgment was dismissed.

2.Briefly the facts of the case are that the petitioner and Dr. Muhammad Younus Khan, predecessor of Proforma respondents No.6(a) to 6(e), obtained the property in question on lease in the year 1988 and established a medical center under the name and style of Jinnah Medical Centre situated at Nishtar Hospital Road, Multan. Subsequently, owing to the dilapidated condition of the building, the parties executed a registered lease deed dated 20.07.1998, bearing No.5898, for a period of twenty years, whereby the lessees undertook

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to reconstruct the building at their own expense. The agreement also stipulated, inter alia, that the rent would be enhanced by 25% every three years, that the tenancy would continue after expiry of the initial term at the prevailing market rent, and that disputes would be referred to arbitration. The agreement was binding upon the heirs of the parties. On 19.07.2019, respondents Nos.3 to 5 instituted an ejectment petition under Section 19 of the Punjab Rented Premises Act, 2009, against the petitioner and Dr. Muhammad Younus Khan, inter alia, on the ground that the tenancy agreement had expired. The petitioner filed an application seeking suspension of the ejectment proceedings on account of the arbitration clause contained in the registered lease deed, along with an application for leave to contest the ejectment petition. The learned Special Judge (Rent), Multan vide judgment dated 28.03.2022, dismissed both applications and accepted the ejectment petition on the ground of expiry of the tenancy agreement. Being aggrieved, the petitioner preferred appeal before the learned Additional District Judge, Multan, which was dismissed vide judgment dated 22.03.2023, thereby maintaining the order of ejectment passed by the learned Rent Tribunal. Hence, instant writ petition.

3.Learned counsel for the petitioner contends that the impugned judgments are contrary to law and the facts of the case, as the learned Courts below failed to properly appreciate the terms and conditions of the registered lease deed dated 20.07.1998. He submits that the lease deed provided for the continuation of the tenancy after expiry of the initial term at the prevailing market rent and contained an arbitration clause for the resolution of disputes. He further argues that the application for leave to contest was dismissed without proper consideration of the petitioner’s substantial legal pleas. Learned counsel maintains that the mere expiry of the initial lease period did not justify ejectment without examining the relevant contractual stipulations. He, therefore, prays that the impugned judgments be set aside and the ejectment petition filed by respondents No.3 to 5 be dismissed. He relied upon Muhammad Rafique v. Messrs Habib Bank

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Limited (1994 SCMR 1012), Government of Sindh through Secretary and Director General, Excise and Taxation and another v. Muhammad Shafi and others (PLD 2015 Supreme Court 380), Muhammad Tufail v. Abdul Majeed and 3 others (2009 YLR 2294).

4.Conversely, learned counsel for respondents No.3 to 5 supports the impugned judgments.

5.Arguments heard. Record perused.

6.The controversy in the instant petition essentially concerns the interpretation and legal effect of Clause No. 17 of the registered lease deed executed between the parties. The questions are whether, notwithstanding the expiry of the stipulated twenty-year term, the petitioner could claim continuation of the tenancy subject to payment of rent at the prevailing market rate and whether, in the peculiar circumstances of the case, the learned Rent Tribunal was justified in declining leave to contest and ordering ejectment merely on the basis of expiry of the initial term of tenancy, without affording the parties an opportunity to substantiate their respective positions concerning the aforesaid contractual stipulation.

7.Admittedly, the parties entered into a registered lease of the property in question, used as a medical centre, for a period of twenty years and that the said period expired on 30.06.2019. Ordinarily, upon expiry of a fixed-term tenancy, the tenant cannot insist on continued possession merely on the strength of the expired instrument. However, the matter does not rest there, as the rights and obligations of the parties are required to be determined in the light of the lease deed read as a whole. Clause No.17, as asserted by the petitioner, contemplated that, after expiry of the stipulated period, the tenant would not be dispossessed if he agreed to pay rent at the prevailing market rate. The petitioner has specifically maintained that he is willing to pay the rent lawfully determined to be the prevailing market rent, whereas the amount claimed by the respondents, stated to be Rs.12,34,220/- per month, is disputed as excessive. The precise scope, enforceability and legal consequences of this clause, therefore, constitute material

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questions which could not appropriately be determined by isolating the stipulation prescribing a twenty-year term from the remaining provisions of the same instrument. In this regard, reference is made to Anwarul Haq v. Federation of Pakistan through Secretary, Establishment Division, Islamabad and 13 others (1995 SCMR 1505), wherein the Honourable Supreme Court of Pakistan reiterated that, in construing a document, the same must be read as a whole rather than by picking and choosing a particular paragraph or portion thereof. The Court emphasized that the interpretation of an instrument requires consideration of its various provisions in their proper context, so that its true scope, object and intended effect may be ascertained. Applying the aforesaid principle to the facts of the present case, the registered lease deed dated 20.07.1998 is required to be examined in its entirety, and Clause No.17 cannot be construed independently of the other provisions governing the duration of the tenancy and the rights and obligations of the parties upon expiry of the initial term. Equally, the stipulation prescribing a fixed period of twenty years cannot, in isolation, be treated as conclusive of the entire controversy without determining the legal effect of the alleged post-expiry arrangement embodied in Clause No.17. The instrument must, therefore, be construed harmoniously, in accordance with its language and the applicable law, to ascertain whether the parties intended to provide for continuation of the tenancy upon payment of the prevailing market rent and, if so, the conditions subject to which such continuation was contemplated. Reference is also made to Saudi Pak Industrial and Agricultural Investment Company (Pvt.) Ltd., Islamabad v. Messrs Allied Bank of Pakistan and another (2003 CLD 596), Mst. Iqbal Begum v. Abdul Ghaffar and others (1995 CLC 105) and Messrs Premium Developers through Chief Executive v. Muhammad Tariq

(2023 MLD 838).

8.The learned appellate Court noticed the existence of Clause No.17 but declined to accept the petitioner's contention, principally on the reasoning that the parties had not mutually agreed upon the amount

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of market rent and that the Court could not determine such rent in the absence of consensus between them. Such an approach does not adequately address the nature of the controversy raised before it. Where the parties have allegedly agreed upon a contractual mechanism under which continuation of possession is linked with payment of market-rate rent, a subsequent disagreement regarding the quantum of such rent does not, by itself, conclusively establish that the stipulation has become inoperative. Otherwise, the operation of the clause would, in practical terms, be left entirely dependent upon the willingness of the parties to agree upon an amount, thereby potentially defeating the very object for which the stipulation was incorporated. The principle enunciated in Saudi-Pak Industrial and Agricultural Investment Company (Pvt.) Ltd., Islamabad v. Messrs Allied Bank of Pakistan and another (PLD 2003 SC 215), read with Haji Naimatullah v. Federation of Pakistan through Secretary, Ministry of Defence and another (PLD 2013 Sindh 406), requires the Court to ascertain the parties’ intention from the instrument as a whole and to prefer a construction that gives effect to the agreement, rather than one that renders a material stipulation ineffective without proper examination. Similarly, the approach adopted in Messrs Premium Developers through Chief Executive v. Muhammad Tariq (2023 MLD 838) underscores the importance of determining contractual rights and obligations in the context of the complete agreement and the reciprocal obligations undertaken by the parties. This, however, is not to hold that Clause No.17 necessarily confers an indefeasible or perpetual right of occupation upon the petitioner, nor that the respondents are bound to accept any amount unilaterally proposed by him. The precise nature of the right, the conditions attached to its exercise and the legal consequences of non-agreement regarding market rent must be determined in accordance with the actual language of the lease deed and the applicable law. The observation is confined to the proposition that, in the circumstances pleaded, the mere absence of consensus regarding the quantum of rent could not, without further examination,

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furnish a sufficient basis for rejecting the petitioner's claim at the threshold. The aforesaid aspect assumes further importance in view of the petitioner's specific assertion that he is ready and willing to pay rent according to the prevailing market rate and that the principal disagreement between the parties concerns the determination of the amount payable. Such a plea, when examined in conjunction with an express contractual stipulation relied upon by the petitioner, cannot be characterized as a mere denial of the respondents' entitlement to seek ejectment. Rather, it raises a substantive question concerning the interpretation and enforceability of the agreement, which has a direct bearing upon the controversy. Whether the petitioner has fulfilled, or is capable of fulfilling, the conditions contemplated by Clause No.17 is a separate matter requiring determination on the basis of the pleadings, the terms of the instrument and such evidence as may lawfully be received.

9.The Rent Tribunal was considering an application for leave to contest. At that stage the question was not whether the petitioner had conclusively established an indefeasible right to remain, but whether his grounds disclosed a bona fide and legally material controversy that warranted adjudication. The distinction between ultimate entitlement and the existence of a triable issue is fundamental in summary proceedings of this kind. A summary procedure that dispenses with a full trial is an exception to the ordinary course, and shutting out a defence at the threshold is a grave step: it ends a party’s opportunity to be heard (audi alteram partem) and should be taken only where the defence is plainly unarguable. Where a tenant relies on an admitted registered instrument containing a stipulation that allegedly governs the parties’ rights after the initial term, its effect cannot be foreclosed merely by pointing to the date on which that term ended.

10.The Rent Tribunal appears to have attached decisive significance to the expiry of the twenty-year period. The Appellate Court, despite referring to Clause No.17, did not resolve whether the clause created a contractual arrangement capable of operating beyond

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the initial term, subject to fulfilment of its conditions. The failure to examine that aspect in its proper contractual and legal setting materially affected the consideration of the petitioner’s defence, and his grievance that a material term of the registered deed was not given due effect cannot be brushed aside.

11.The Appellate Court also apprehended that the petitioner’s interpretation might enable him to retain possession indefinitely. That consequence cannot be presumed merely because the deed contains a stipulation on market rent after the initial term; nor, conversely, does the stipulation by itself establish that the tenancy stood automatically extended or that the petitioner acquired an unrestricted right to remain. Both propositions require examination in light of the complete instrument and the applicable statutory framework. A court must construe the agreement before it and decide the controversy on its merits, not dispose of it on a feared consequence. Whether market rent can be determined by the competent forum, on what material, and whether that determination bears on the petitioner’s entitlement to remain are matters to be examined in accordance with law. It would be premature for this Court, in constitutional jurisdiction, which is not suited to a factual inquiry of this kind, to determine the quantum of rent or pronounce on the ultimate entitlement of either party without proper adjudication of the underlying issues.

12.The contention that the proceedings were not maintainable because of the arbitration clause cannot be accepted merely on the existence of that clause. Its effect must be assessed in light of the nature of the dispute, the language of the agreement and the governing statutory provisions. In Haji Naimatullah v. Federation of Pakistan through Secretary, Ministry of Defence and another (PLD 2013 Sindh 406), the High Court held, in the context of Section 20 of the Arbitration Act, 1940, that the arbitration agreement must be construed according to its terms and the intention of the parties, and that the agreed mechanism for appointment of an arbitrator should not be bypassed merely because of a subsequent change in the constitution or

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structure of the designated authority. The judgment further emphasizes that contractual arrangements should be interpreted so as to give effect to the parties’ intention, subject to the applicable law. Nevertheless, the said authority does not establish that every arbitration clause excludes the jurisdiction of a statutory forum. The existence of an arbitration agreement does not, without more, deprive a statutory rent forum of jurisdiction to adjudicate proceedings falling within its lawful competence. Equally, the proposition that the clause necessarily ceased to have effect on expiry of the initial term cannot be accepted without examining its scope and the nature of the dispute. Since the principal controversy can be resolved on the basis of the contractual stipulation discussed above, it is neither necessary nor appropriate at this stage to record a conclusive finding on the independent effect of the arbitration clause. The competent forum shall consider the objection to the extent it remains legally relevant and within its jurisdiction.

13.I have considered the authorities cited by learned counsel for the petitioner. A decision is authority for the question of law it decides in its own factual and statutory context, and a citation does not dispense with examining the instrument and the nature of the controversy in the case at hand. In this case the decisive consideration is whether the material stipulation relied on by the petitioner was properly examined before his defence was shut out, and it is on this limited but material ground that the impugned judgments require reconsideration.

14.The Courts below did not adequately examine a material aspect of the controversy, namely the legal effect of Clause No.17 of the registered lease deed and its relationship with the provision prescribing the initial term. The petitioner’s assertion of willingness to pay market rent, read with that stipulation, raised an issue that required consideration before a final order of ejectment could be maintained. The omission left the petitioner’s defence incompletely examined and renders the impugned judgments unsustainable to that extent. At the same time, it would be neither appropriate nor legally justified for this Court to declare at this stage that the petitioner is entitled to continue

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in possession or that the tenancy stood automatically extended beyond 30.06.2019. That requires determination of the true construction and enforceability of Clause No.17, the conditions of its operation and the effect of the applicable law, by the competent forum after hearing the parties. The remand is not an expression of opinion in favour of either party on the ultimate merits.

15.Consequently, this constitutional petition is allowed to the extent indicated above. The application for leave to contest is also accepted. The impugned judgments dated 28.03.2022 and 22.03.2023 are set aside, and the matter is remitted to the Rent Tribunal for fresh consideration in accordance with law, subject to the following directions:

(i)The petitioner shall be afforded an opportunity to contest the ejectment petition, and the parties may place on record such admissible material as is necessary to determine the controversy.

(ii)The Rent Tribunal shall examine the relevant provisions of the registered lease deed, particularly Clause No.17, together with the other terms of the instrument, and determine the legal effect, if any, of that clause after expiry of the initial term.

(iii)It shall consider the question of prevailing market rent, insofar as it arises for determination and is within its lawful competence.

(iv)The objection founded on the arbitration clause shall be considered to the extent necessary and in accordance with the applicable law.

16.Nothing herein is a final determination of the petitioner’s entitlement to continue in possession, the enforceability of Clause No.17 or the amount of rent payable. The Rent Tribunal shall decide these questions independently, through a reasoned order, uninfluenced by any observation herein beyond the legal principles discussed above. The proceedings shall be concluded expeditiously, preferably within sixty days of receipt of a certified copy of this order. The compliance

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report shall be submitted to this Court through the Deputy Registrar (Judicial). No order as to costs.

(Muhammad Sajid Mehmood Sethi) Judge

Approved for reporting.

Judge *Waseem.*