Fair Rent Determination of Rent Controller

In M/s Haque Traders and Others vs. Sheikh Abid & Co. (Pvt) Ltd. (2024 SCP 300), the Supreme Court of Pakistan examined whether the fixation of fair rent by the Rent Controller, as affirmed by the Appellate Court and the High Court of Sindh, was correctly adjudicated under Section 8 of the Sindh Rented Premises Ordinance, 1979. The petitions involved a challenge to the concurrent findings of three courts regarding rent fixation for commercial premises in Karachi.

Background:

The respondent, Sheikh Abid & Co. (Pvt) Ltd., as the owner of Abid Chamber, filed individual rent cases for the fixation of fair rent under Section 8 of the Ordinance. The Rent Controller fixed the rent at Rs. 9 per square foot based on evidence, including the rise in taxes, water charges, and repair costs. The petitioners, being tenants, challenged the order, but their appeals were dismissed by both the Appellate Court and the High Court of Sindh. They further appealed to the Supreme Court, alleging that the fixation was unreasonable and the evidence was not properly weighed.

Key Issues:

Fair Rent Determination under Section 8 of the Sindh Rented Premises Ordinance: Whether the Rent Controller correctly applied the criteria for determining fair rent under Section 8 of the Ordinance, taking into account the rise in construction costs, taxes, and similar rents in the locality.

Burden of Proof in Rent Cases: Whether the landlord provided sufficient evidence to justify the increase in rent and whether the tenants were able to rebut the landlord's claims.

Concurrent Findings of Fact: Whether the High Court of Sindh, along with the lower courts, properly evaluated the evidence presented and whether their concurrent findings could be disturbed on appeal.

Court’s Analysis:

Fair Rent Determination: The Supreme Court analyzed the requirements under Section 8 of the Ordinance, which allows the Rent Controller to determine fair rent based on multiple factors: the rent of similar premises, the rise in construction costs, repair charges, and any imposition of taxes. The Court found that the Rent Controller had duly considered these factors and that the rent of Rs. 9 per square foot was reasonable in light of the evidence presented. The Court further held that the evidence of the landlord regarding the increase in taxes and repair costs remained unrebutted by the tenants during cross-examination.

Burden of Proof: The Court noted that the burden of proving the rise in rent was initially on the landlord, who presented sufficient evidence, including details of similar rented premises, renovation work, and tax increases. The petitioners failed to present any substantial evidence or documentation to challenge the landlord's claims, particularly regarding the payment of goodwill (pugri) and the fixed rent since 1997.

Concurrent Findings of Fact: The Supreme Court reaffirmed the principle that concurrent findings of fact by the lower courts are not to be disturbed unless there is a clear misreading of evidence or a legal error. In this case, the Court found no such error. The Rent Controller’s decision was based on solid evidence, and both the Appellate Court and the High Court of Sindh had properly upheld the Rent Controller’s order. The Supreme Court ruled that the concurrent findings were supported by a thorough evaluation of the facts and law.

Court's Conclusion: The Supreme Court dismissed the petitions, upholding the rent fixed by the Rent Controller at Rs. 9 per square foot. The Court found that the Rent Controller had correctly applied the law under the Sindh Rented Premises Ordinance, and the petitioners had failed to provide any valid basis for overturning the concurrent findings of the lower courts. The petitioners were advised to resolve any issues related to arrears of rent with the landlord directly, as these matters would now be handled by the Rent Controller under Section 22 of the Ordinance.

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