- (1.) BY the Court - This is a plaintiffs' second appeal and arises out of a suit for the recovery of Rs. 1611/1/9 on account of damages, rent and other charges from 6th of April, 45, till 31st of Dec, 46, at Rs. 100/- per mensem. A few facts may be stated in order to show how the points in issue between parties have emerged. Edulji and Rustomji sons of Nowroji were carrying on business at Jodhpur in the name and style of Messrs. Edulji Nowroji & Co. in the shop outside Sojati Gate belonging to Shankerlal Vyas. They also lived on the premises in the upper storey and were paying Rs. 100/- per mensem as rent for the shop as well as the residential portion. On 6th of April, 45, they sold the entire business including the stocks in the shop and the goodwill to Messrs. Mohandass Magharam of Karachi by means of a registered sale deed and delivered the possession of the shop to them. It is contended that the understanding between the parties was that Mohandass and Magharam will vacate the shop, remove the stocks from there and carry on business elsewhere, of course, in the name and style of Edulji Nowroji and Company. The vendors asked them time and again to remove the goods from the shop but the fact remains that they did not do so and continued to be in possession of it. Instead of the vendors taking any action against the vendees for refusing to vacate the shop, it appears that on 3rd of Oct. , 45 vendees instituted a suit against the vendors for a permanent injunction restraining them from continuing to carry on business still in the name and style of Messrs. Edulji Nowroji and Co. , although this business had been sold by them. During the suit, while issuing a temporary injunction against the vendors the following directions were given to them: - (1) that they shall not carry on any business in the name of M/s. Edulji Nowroji & Company; (2) that the electric current supplied to the business premises shall be restored; (3) that the lock of the latrine shall be removed
(2.) INJUNCTION with regard to the last two items was granted subject to the condition that the vendees shall executed an agreement for payment of Rs. 100/- p. m. on account of rent of the business premises plus charges for consumption of electric current. This agreement, which is Ex. P. 1, was duly executed on 13th of Nov. , 45 in favour of Messrs. Edulji & Rustomji Bhajiwala and runs as follows : - "in pursuance of the order of the District Court No. 3 dated 3. 11. 45, we, Mohandass Magharam, proprietors of M/s. Edulji Nowroji execute this rent note in favour of Edulji Rustomji Bhajiwala that we are in possession of the premises near Sojati Gate, where you kept the goo is and carried on business of Edulji Nowroji & Co. as your sub-tenants, that we agree to pay to you a monthly rent of Rs. 100/- only for these premises. This rent has been tentatively fixed as per orders of the district court No. 3 and would be subject to the decision of a competent court as to the proper rent payable for these premises. That we also agree to pay the electric charges in respect of electric current consumed by us. " The vendees continued to pay the rent for five months at Rs. 100/-p. m. and actually paid Rs. 500/- to the vendors from 13th of December, 1945, till 13th of April, 1946. They however stopped paying rent from 13th of May, 46, and there is nothing on record to show that rent was paid by them to any one upto 1st of Jan. , 47, when a rent note was executed by them in favour of Vishnudutt, successor in interest to Shankerlal Vyas agreeing to pay Rs. 90/- per mensem on account of rent for the business premises. It will be clear from the above that the vendees came into possession of the shop at the instance of the vendors from 6th of April, 45, and so far as the vendors are concerned, remained in possession till 31st of December, 46. Therefore according to the agreement exp. 1, rent became due to them from 13th of November, 45, till 31st of Dec, 46 and damages for use and occupation of the business premises from 6th of April, 45 till 13th of Nov. , 45. Since rent was paid only for five months the vendors instituted the suit out of which this appeal arises and claimed Rs. 1611/1/9 as below: - Rs. 2083/5/3 on account of damages from 6th April, 45, till 13th of Nov. , 45, at Rs. 100/- per mensem and rent from 1. 3th of Nov. , 45 till 31st Dec, 46 at Rs. 100]- p. m. Rs. 27/8/- on account of charges for electric current from April, 45 till July, 45. Rs.-/4/6 on account of Notice. Total : 2111/1/9 Rs. 500/- to be deducted on account of rent already paid. Balance : 1611/1/9 The defendant pleaded inter alia: - (i) that no rent whatsoever was due as the relationship of landlord and tenant had not come into existence between the parties. The reason put forward was that the plaintiffs were not the owners of the premises; (2) that the plaintiff did not allow the electric current to be restored and did not open the lock of the latrine. These were essential conditions attached to the injunction issued by the court and therefore the contract suffered from a failure of consideration; (3) that the defendants had been instructed by Shankerlal Vyas not to pay any rent to plaintiffs and therefore no rent was due to them; (4) that in any case the rent agreed upon between the parties at the rate of Rs. 100/- p. m. was excessive and against the spirit of the Rent Control Ordinance and therefore fair rent should be fixed and decree passed accordingly. 7. Trial court after considering the fact that the plaintiffs were paying Rs. 100/- p. m. on account of the rent both of the business premises and the residential portion and other circumstances fixed Rs. 60/- p. m. as a fair rent and decreed the suit both for damages as well as the rent claimed for Rs. 777/12/6 including the charges for electric current and notice. Defendants went up in appeal to the court of the learned district judge and the plaintiffs preferred cross-objections. The learned district judge dismissed the suit holding in effect that the agreement exp. 1 shall be deemed to have been executed in favour of the court and not the plaintiffs and accordingly the plaintiffs had no locus standi to institute the suit. 8. In this appeal the learned counsel for the plaintiffs has urged in the first instance that the view taken by the learned district judge was obviously perverse and could not stand a moment's scrutiny. There is great force in this contention and the learned counsel for the respondents has not been able to satisfy us how the position assumed by the learned district judge c an be said to be tenable in law. It is plain that when a court brings the parties together and succeeds in inducing them to enter into a compromise the resultant agreement is an agreement between the parties and not between the court and one of the parties. It is unthinkable how the learned district judge came to take this view of the matter. Apart from this, the language of exp. 1 the document executed by Mohandass Magha-ram also shows that although it was the result of a compromise it had been executed between them and M/s. Edulji and Rustomji In this agreement they have definitely stated that they were in possession of the premises a; the sub-tenants of Edulji Rustomji Bhajiwala and that they had agreed to pay to them a monthly rent of Rs. 100/- for these premises. This agreement also contains an important clause, reference to which will be necessary in connection with an argument of the learned counsel for the appellant and that is that the rent had been tentatively fixed and would be subject to the decision of a competent court as to the proper rent payable for these premises. Now, after a perusal of exp. 1, how can it be held that the agreement had not been arrived at between the parties and had, on the other hand, been executed between the court on the one hand and Mohandass Magharam on the other. The learned district judge has observed that no transfer of right to enjoy any immovable property had been made by exp. 1 and that until this was done relationship of lessor and lessee could not be established between the parties. The learned district judge has conveniently ignored the important fact that possession of the premises had already been delivered to the defendants on the date when sale of the business took place in their favour and that they continued to remain in possession even without the execution of a rent note. 9. It was on 13th of November, 1945 that on the intervention of the learned district judge, the rent note came into existence. Accordingly so far as the relationship of the landlord and tenant is concerned, the transfer which had already taken place came to be recognised by the parties as a transfer by the lessor in favour of the lessee. 10. It is further observed by the learned district judge that the agreement was between the court and the defendants, because the terms were offered by the judge and accepted by the defendants. Hardly any observations are required for rejecting this view. We may repeat that when an agreement is executed between the parties, even if it is on a direction by the court, the terms are offered and accepted between the parties and even if the court suggests the terms the court does not become a party to the agreement. Now if it be held that Ex. P. I was a perfectly valid agreement between the parties, there is no escape from the conclusion that the plaintiff had locus standi to institute the present suit an J claim the rent for the period of the agreement and damages for the term preceding it, from the defendants. The important question which has been raised by the learned counsel for the appellants is with regard to the amount of rent or damages fixed by the trial court for these premises. The learned counsel for the appellant has urged in the first instance that the trial court was not a competent court for purpose of fixing the rent between the parties. We must say that we are wholly unable to follow this contention. The court was seized of the case at the instance of the plaintiffs and the defendants has raised a plea to the effect that excessive rent had been fixed and that it should be reduced to a fair rent. This became the subject matter of an issue. The plaintiffs never objected to this issue being framed at any stage of this litigation. Apart from this, according to the very agreement between the parties which was the basis of the suit, it was stipulated that the sum of Rs. 100/- on account of rent had been tentatively the proper rent payable for the premises in question. It is not open to the plaintiff to adopt the favourable part of this agreement and reject the convenient portion. 11. The defendants complained that the rent fixed was too high and the reason for this obviously was that the plaintiffs were paying Rs. 100/- p. m. to the landlord both for residential portion and the shop, whereas they had charged the defendants this amount for the shop alone. Not much argument is needed for coming to the conclusion that the rent fixed for the shop was not fair. The defendants agreed to pay this rent in the first instance, probably not knowing that this was the rent both for the shop and the residential portion and most probably they stopped paying it as soon as they became apprised of the correct position. Be that as it may, having agreed that it would be open to a competent court to fix a proper rent for the premises, it does not lie in the mouth of the plaintiffs to urge that this could not be done or that the court going into this question was not a competent court. The learned counsel has not been able to satisfy us by any argument worthy of the name how the trial court was not a competent court for the purpose of going into this question. He next urged that there was no basis on the record for the purpose of fixing Rs. 6o/- on account of the rent of the shop. During the course of his arguments however, he made a statement at the Bar that fresh agreement had been executed by the defendants in favour of the landlord for the shop and that Rs. 90/- p. m. had been fixed on account of the rent. It also turned out that the rent of the residential portion occupied by the plaintiffs had been raised to Rs. 100/- p. m. This only tends to show that since the agreement between the parties was executed, rent rose enormously and accordingly, what took place in 1947 would not be a criteria for fixing a fair rent in 1945. The learned judge of the trial court fixed Rs. 60/- as fair rent considering the fact that the rent for the entire building was Rs. 100/- and so far as the business premises are concerned, it should be a little more than what would be payable for the residential portion. When the learned counsel for the appellant was fixed with this portion he had no alternative but to concede that the rent fixed at Rs. 60/- p. m. was indeed fair. The result is that this appeal succeeds and is hereby accepted, the decree of the lower appellate court is set aside and that of the trial court restored with costs throughout. .;