Sathir v. Najeare
4978Present: Pathirana, JM Weeraratne, J., aind
ASUMA LEBBE ABDUL SATHIR, Plaintiff-Appellant
RAFAIJD UMMUM NAJEARE and ANOTHER,
• ' ■ Defendants-Respondents
'S'.C.' 547/75 (F)—D.C. Negombo 387/RE
Ceylon State Mortgage Bank and Finance (Amancbn.^m.) Act, No. 33 of191>8—Vesting Order made under section 70(C)(3) thereof—
Tenant in occupation of premises in respect of which vesting
PATHIKANA, J.—Salhir v. Najearc
order is made—Notice that authorised officer would take thepossession of such premises on behalf of Bank—Is tenant liableto be evicted—Whether protected by provisions of Rent Act andProtection of Tenants (Special Provisions) Act—Title created byvesting order—-Whether rejerable to any previous ownership ornot— Meaning of term “free from sill encumbrances’’ in section70 (C) (3)—Rent Act No. 7 of 1972, sections 16, 17, 22—Protectionof Tenants (.Special Provisions) Act, No. 28 of 1970, sections 2, 4, 5.
Where residential premises are vested in the Ceylon StateMortgage B.mk undei a vesting order published under section 70(C) (3) of the Ceylon State Mortgage Bank and. Finance(Amendment) Act, No. 33 ox 1968, a tenant in occupation of suchpremises under the purchaser in execution of a mortgage decreeagainst the original owner of the premises is not entitled to thenprotection of the Rent Act No. 7 of 1972 and the Protection of Tenants(Special Provisions) Act. No. 28 of 1970. The bank or any personauthorised under the -said Act can take possession of such premisesunder the vesting order which gives the bank a title paramountagainst the whole world.
Cases referred to :
Britto v. Heenatigala, 51 N.L.R. 327.
Jayc.lunga v. RosVm flamy, 78 N.L.R. 214.
Cur. adv. vult.
.A.PPEAL from a judgment of the District Court, Negombo.
E. D. WikTemanayake, for the plaintiff-appellant.
J. A. L. Cooray, with Lalith Gamlath. for the 2nd defendant-respondent.
April 7, 1978. Pathirana, J.
Under section 70 (C) (3) of the Ceylon State Mortgage Bank andFinance (Amendment) Act, No. 33 of 1968 (which will be referredto hereafter as “ The Act ”) consequent to a determination bythe 2nd defendant, the Ceylon State Mortgage Bank, that thepremises in question be acquired for the purposes of Chapter Vaof the Act, a vesting order was published by the Minister in theGazette on 1G.3.73 vesting in the 2nd defendant Bank the premisesin question with effect from 8.3.73. Acting under section 70(C)the Bank gave the required notice that an authorized officerwould take possession of such premises for and on behalf of theBank on a specified date, i.e. on 20.12.73. The plaintiff who wasadmittedly from December 1971 the tenant of the 1st defendantwho was the purchaser in execution of a mortgage decree againstthe owner of the premises in question which are situated withinthe Municipal limits of Negombo and to which the Rent Act No. 7of 1972 applies, resisted the claim of the bank and claimed theprotection of the Rent Act against being evicted.
He instituted the present action for a declaration—
that he is the lawful tenant of the premises in question,
for a permanent injunction restraining the defendants
from evicting him from the premises.
PATHIKA NA, J.—Halhir v. Vajcaio
The 1st defendant to the action was the landlord and the 2nddefendant was the Bank. The learned District Judge rejectedthe plaintiff’s contention and dismissed the action. The plaintiffappeals against this judgment and decree.
At the argument before us it was not disputed that the premisesin suit were sold in execution of a mortgage decree enteredagainst the original owner and was purchased by the 1stdefendant and that the latter after his purchase had rented thepremises to the plaintiff in December 1971. The validity of thevesting order in favour of the Bank under section 70 (C) (3) isalso not disputed. It was also conceded at the argument that thepurpose of the property being acquired was to give possessionthereof to the original owner and that the Bank was satisfiedthat the premises were reasonably required for his occupation asresidence for himself or any member of his family in terms ofsection 70 (B) (2) (d) of the Act.
The question for decisioif of this appeal is whether a tenant ofresidential premises who is entitled to the protection of the RentAct and the Protection of Tenants (Special.Provisions) Act, No. 28of 1970, is liable to be evicted or his occupation interfered withwhen a vesting order in respect of the premises is made undersection 70 (C) (3) vesting “ absolutely in the Bank, free from allencumbrances ” the premises in question and an authorized officerof the Bank thereafter takes steps to take possession of thepremises for and on behalf of the Bank under section 70 (C) of theAct. In other words, whether the tenant’s “ statutory right ofirremovability ” in respect of the said premises under the RentAct is automatically extinguished when the premises are acquiredfor the purpose of the Act followed by a vesting order which veststhe premises “ absolutely in the Bank free from allencumbrances” in terms of section 70(C) (3) of the Act. Undersection 70 (C) any person specially or generaly authorized by theBank is entitled to take possession of any premises vested in theBank by a vesting order by giving notice to the person inoccupation or in possesion of such premises that such authorizedofficer intends to take possession of such premises for ahd bnbehalf of the Bank. Any person interested or his authorized agentis required to allow and assist such authorized officer to takepossession of such premises for and on behalf of the Bank.
The main submission of Mr. Wikremanayake, learned Counselfor the plaintiff-appellant, was that under section 22 of the RentAct except on certain permitted grounds (which do not apply inthis case) no action or proceedings for the ejectment of the
PATHIKAKA, J.—Sathir v. Nujcare
tenant of any premises shall be instituted in or entertained byany Court “ notwithstanding anyt hin'* in any other law.” There-fore he contended that notwithstanding the provisions of the Actthe plaintiff who is a tenant protected by the Rent Act cannot beevicted from the premises or his occupation interfered with.
1 do not. think this argument merits any consideration if itis confined exclusively to section 22 of the Rent Act. Even if Iwere to assume that the Bank after the vesting order steppedinto the shoes of the plaintiff’s landlord, the 1st defendant, theproceedings contemplated in the Act whereby the authorizedofficer is entitled to take possession of the premises vested in theBank are not proceedings for the ejectment of the tenantconsequent to an action instituted in or entertained by Courtunder section 22 of the Rent Act. The proceedings contemplatedin section 70(C) of the Act at this stage are extra-judicialproceedings and the order that is sought to be enforced is not anorder of the Court but an order made by the Bank, after thepremises are vested in the Bank, directing the specially orgenerally authorized person to take possession of the premises forand on behalf of the Bank.
It could, however, be argued that if a tenant who is entitled tothe protection of the Rent Act contravenes under section 70 (C)
of the Act any requirements of any notice given to him undersubsection (5) or obstructs, or resists whether directly orindirectly any other person from taking possession of thepremises, on a charge before a Magistrate for having committedan offence under that subsection, he is entitled to take up thedefence that he is a protected tenant under the Rent Act andas such he is entitled to obstruct and resist any invasion of hisright of occupation. It is therefore open to the argument that atthis stage these proceedings are in effect proceeding for theejectment of the tenant instituted in or entertained by a Courtor which seek to interfere with his right of occupation of thepremises. •
In order to consider learned Counsel's submission it is alsonecessary to take into consideration sections 16 and 17 of theRent Act and certain provisions of the Protection of Tenants(Special Provisions) Act particularly as the plaintiff has prayedfor a permanent injunction restraining the defendants fromevicting him from the said premises.
Under section 16 of the Rent Act no landlord of any premises orother person shall, either by himself or through any other person,directly or indirectly, make use of or threaten to make use of
PATH IRAN A, J.—SalUir v ifajearc
siny force, violence, or restraint, or inflict or threaten to inflict,any damage, any harm, or loss upon or against the tenant of, orany person in occupation of such premises in order to induce,compel, or prevail upon, such tenant or person to vacate suchpremises.
Under section 17 of the Rent Act no landlord of any premisesor other person shall, either by himself or through any otherperson interfere or attempt to interfere in any manner in theoccupation or use; of any premises by the tenant of, or the personin occupation of such premises, or in any manner prevent accessto such premises by such tenant cr person. In section 17 (2) thewords “ person in occupation ” in relation to any premises meana person in occupation of the premises with the consent, expressor implied, of the landlord of the premises.
Sections 16 and 17 of the Rent Act are in fact similar to sections2 and 4 respectively of the Protection of Tenants (SpecialProvisions) Act, No. 28 of 1970.
Section 5(c) of the Protection of Tenants (Special Provisions)Act further enacts that no landlord of any premises or otherperson, by himself or through any other person, shall eject orcause to be ejected from such premises, otherwise than on anorder of a competent Court, the tenant of, or the person inoccupation of, such premises notwithstanding anything to thecontrary in any oral or written agreement by which such premiseswere let.
These are prohibitions and restrictions placed on the landlordof any premises or on any other person from taking the law intohis own hands in order to interfere with the occupation of thetenant of the premises without resort to the Courts. Underthe Protection of Tenants (Special Provisions) Act, theCommissioner of National Housing is empowered to investigateinto a complaint of the tenant or the person in occupation if thelandlord or any other person interferes with his occupation.Summary procedure is available for the Commissioner to restorean ejected tenant or person in occupation to the occupation ofthe premises through the Magistrate’s Court. This Act in additionprovides for penal consequences.
The question therefore arises whether despite the provisions ofthe Protection of Tenants (Special Provisions) Act and the RentAct, the Bank after the vesting order under the Act is entitledthrough an authorized person to take possession of the premiseswhich are in the occupation of the tenant who is entitled to theprotection of these Acts.
l’ATlITRA-XA, J.—Sulhir v. Najcart,
Mr. J. A. L. Cooray, learned Counsel who appeared for the Banksubmitted that when a vesting order is made under section 70(C),
i.s effect is to vest the premises absolutely in the bank freefrom all encumbrances. The words “absolutely” and “freefromall encumbrancer ’’ are words of wide amplitude and will coverthe rights, privileges and immunities of a tenant who is inoccupation of premises subject to the Rent Act, notably the rightagainst eviction or interference with his occupation. The effect ofa vesting order in the result would be to wipe out all rights ofsuch a person occupying the premises.
Mr. V ikremanayake for the plaintiff-appellant, however,submitted that the words “ free from all encumbrances ” do notrefer to the rights of a protected tenant to whom the Rent Actapplies. Although the word “ encumbrances ” is not defined inthe Act, he argued by a devious process, that the word“ encumbrances ” would not include the rights of a protectedtenant under the Rent Act. For this purpose he drew our attention,to section 70(E) which relates to persons who are entitled tomake claims for compensation payable under the Act in respeclof any premises vested in the Bank. Under this section where thepremises are vested in the Bank, the Bank shall by noticepublished in the Gazette “ direct every person who was interested nin such premises immediately before the date on which suchpremises were vested to make claims for compensation. He nextreferred to the definition of “person who was- interested” insection 70(E) (e) as a person who “has an. interest in suchpremises as owner, co-owner, mortgagee, lessee or otherwisewhether absolutely for himself or in trust for any other personHis argument was that as these are the only persons who areentitled ' lo claim compensation, therefore, the word“ encumbrances ” would exclude all other categories of person*and would therefore exclude a tenant of premises who is entitledto the protection of the Rent Act and the Protection of Tenants(Special Provisions) Act, against eviction or interference withhis occupation.
While appreciating the ability and force with which thisargument was presented, I am far from convinced of its soundness.An examination of an analogous statute, the Land Acquisition Act,which enables I he Minister on behalf of the State to acquireproperty for a public purpose, which also contain provisionssimilar to section (70) (C) (3) of the Act that the vesting order inrespect of the property acquired vests the property “ absolutely ”in the State “ free from all encumbrances ”, would demonstratethat if ibis argument is accepted it would fail to achieve themanifest purpose of the Act and reduce it to a futility.
1'AT HI It ANA, JSatUir v. Xajon.ro
Section 40 of the Land Acquisition Act states that when theorder of the Minister called a “ vesting order ” is published inthe Gazette and where that order is in regard to the taking ofpossession of a particular land, that land shall by virtue of thatorder vest “ absolutely ” in the State “ free from allencumbrances”. The Land Acquisition Act also does not definethe word “ encumbrances ” unlike for example the Partition ActNo. 16 of 1951 which by section 48(1) gives finality to, a partitiondecree “free from all encumbrances whasoever other than thosespecified in the decree“ Encumbrances ” is defined to mean“ any mortgage, lease, usufruct, servitude, fidei commissum, lifeInterest, trust, or any other interest whatsoever, however, arisingexcept a constructive or charitable trust, a lease at will or fora period not exceeding one month, and the rights of a proprietorof a nindagarna ”. In the result under the Partition Act the word“ encumbrances ” will exclude a monthly tenant who is protectedby the Rent Act or the Protection of. Tenants (Special Provisions)Act.
If this argument is upheld it must follow that when residentialpremises subject to these Acts with a protected tenant in occupa-tion are acquired under the Land Acquisition Act for a publicpurpose, e.g. to run a Hojne for Elders, then the State is power-less to give effect to the acquisition and thereby realize thepurpose for which the premises were acquired as the rights of•the protected tenant must prevail and the person authorized totake possession cannot do so on behalf of the State. The answerto this contention is that the legislature has advisedly both in theAct and the Land Acquisition Act not defined the word“ encumbrances ” but has instead invested the vesting orderwith title of the widest amplitude possible, viz. “ absolutely ” and“ free from all encumbrances ”. In the context of the Act in■considering the purpose for which it has been enacted the word“ encumbrances ” must be construed in its widest possibleamplitude so as to include all persons in occupation or in posses-sion of the premises by whatever right or otherwise and this-will include a tenant in occupation protected by the Rent Actand the Protection of Tenants (Special Provisions) Act.
A further examination of the Act supports the conclusion Ihave reached. To begin with, the word “ absolutely ” is associated.with the words “ free from all encumbrances ”. “ Absolutely ”means without condition or limitation. Vide the followingcomment in Stroud’s Judical Dictionary, 4th Edition, Volume 1 atpage 13 on the word “ absolutely ”.
PATilIXlA.NA, .J.—Scilhir v. Najeurc
“ The ordinary meaning is “ without condition or
limitation.” Andit is commonly used with regard to
vesting as meaning “ indefeasibility. ”
Secondly, I find that under section 70 (C) (5) the personauthorized to take possession on behalf of the bank can do so bynotice given to the “person in occupation or in possession” ofsuch premises informing him that such authorized officer intendsto take possession of such premises for and on behalf of the Bankon a specified date. Thereafter section 70 (C) (7) reads :
“ (7) Every person—
who contravenes any requirement of any notice
given to him under subsection (5) ; or
prevents, obstructs or resists, or
directly or indirectly causes anyone to
prevent, obstruct or resist,any other person from or in taking possessionunder the preceding provisions of this sectionof any premises for and on behalf of the bank,
shall be guilty of an offence under this Chapter andshall, on conviction after summary trial before aMagistrate, be liable to imprisonment of either des-cription for a period not exceeding one year or to afine not exceeding one thousand rupees or to both suchimprisonment and fine.”
“ Every person ” would include any person who is “ inoccupation or in possession of the premises ” referred to insection 70 (C) (5) and therefore would include even a tenant inoccupation entitled to the protection of the Bent Act and theProtection of Tenants (Special Provisions) Act.
If one considers the purpose for which the Act has been enactedthe restricted interpretation sought to be placed on the word“ encumbrances ” to exclude a protected tenant would defeat themanifest purpose of the Act and fail to bring about an effectiveresult. Under the Act, the Bank is authorized to acquire residen-tial premises, as in the present case, for the purpose of the Actif only the Bank is satisfied that the premises are reasonablyrequired for occupation as a residence for the original owner ofthose premises or any member of the family of such owner. Theoriginal owner is the person whose property was sold or trans-ferred in terms of section 70 (B) (1) (a), or (b) or (c) (d)of the Act. The legislature in enacting this Act had a social object
PATHIRA'NA, J.—Salhir v. ttojearc
in view, viz. to redeem lands which had been sold in execution oia mortgage decree or which had been transferred or sold in satis-faction of such a decree or which had been transferred or soldunder circumstances which indicated that it was done for thepurpose of obtaining S loan of money. After such property isvested in the Bank provision is made in the Act for restoringpossession of such property to the person who is entitled tomake an application to the Bank for the acquisition of suchpremises or where such person is dead, to the surviving spouse,if any. or any descendant of such person.
The object of the legislature will be defeated if a tenant whoclaims protection under the two Acts I have mentioned is entitledto resist the taking of possession of such premises after thevesting order made under the Act.
In my view the narrow restricted construction that is soughtto be put on the word “ encumbrances ” would fail to achievethe manifest purpose of the Act. In dealing with statutes of thisnature a construction should be avoided which would reduce thelegislation to a futility and in order to do so we should accepta bolder construction based on the view that the parliament onlylegislates for the purpose of bringing about an effective result inorder to achivc the manifest purpose for which the Act wasenacted and not reduce it to a futility. The words “absolutely”and “ free from all encumbrances ” would therefore include therights of a tenant who is entitled to the protection of the RentAct and the Protection of Tenants (Special Provisions) Act.
In view of the conclusion I have reached nothing turns there-fore on the contention put forward by Counsel for the appellantthat under section 22 of the Rent Act no action or proceedingfor the ejectment of the tenant of any premises to which theRent Act applies shall be instituted in or entertained by anyCourt except under the permitted grounds “ notwithstandingany thing in any other law. ” The submission is that this shouldbe construed to mean “notwithstanding anything in the CeylonState Mortgage Bank and Finance (Amendment) Act, No. 33of 1968.”
The decisions of this Court have laid down that the Rent Actdoes not give any protection to a tenant against a person who isnot his landlord. The Rent Act only applies if a landlord or aperson in the position of a landlord brings an action against thetenant. Gratiaen, J. in Britto v. Heenatigala, 57 N.L.R. 327 at 330,states:
“it would be quite wrong to include within the
definition of a “ landlord ” any.person other than the original
PATH1RANA, J.—Sathir v. Najeare
lessor or someone who derives his title from the originallessor. If, therefore, the true owner of the leased premisesvindicates his title against the tenant’s contractual lessor, thestatutory protection which the tenant enjoyed against thelessor would not be available against the true owner.”
Tennekoon, C.J. in Jayatunga v. Rosalinhamy, 78 N.L.R. 214,following Britto v. Heenatigala states at page 215 :
“Under the common law applicable in this branch of ourlaw, the relationship between a landlord and a tenant is acontractual one ; the landlord and the tenant, each enjoysunder such contract certain rights and obligations. Thecontract of letting is ordinarily unrelated to the ownershipof the r.roperty being in the landlord, for a valid lease maybe granted by the owner or by a person having no right tothe property. It seems to me therefore that when the RentRestriction Act defines the term “ landlord ” as the person forihe time being entitled to receive the rent of such premises,it is referring in the first place to the person entitled underthe contract of tenancy to receive the rent and not necessarilyto the true owner who may not, in, relation to a particulartenancy of the premises in question, have been the personwho let the premises.’’
The only basis, therefore, on which the argument of Counselfor the appellant can succeed is that notwithstanding the vestingorder made by the Minister in favour of the Bank under section70 (C) (3) of the Act, the title that the Bank is vested with is aderivative title from the 1st defendant who was the owner andthe landlord of the premises prior to the vesting order andtherefore by operation of law the Bank had stepped into theshoes of the 1st defendant as landlord receiving all his rights andbecome subject to all his obligations so that the Bank is boundto the tenant and the tenant is bound to the Bank in the relationof landlord and tenant. This contention is not well founded as thetitle of the Bank is not a derivative title from the 1st defendant.The Bank claims the premises against the 1st defendant free fromany encumbrances created by him.
In view of the conclusion I have reached that the Bank getstitle “ absolutely ” and “ free from all encumbrances ” the vestingorder in favour of the Bank snaps the link of ownershm withpersons who were entitled to the land prior to the acquisition orwho cl n'm lights thereto. It creates a new independent title in theBank not referable to any previous owoersh'p or right at thesame time wiping out all other rights, title and interests in theland. The title of the Bank to the premises in question is clearly
liannwccra u. Solomon Singfto
a title paramount. Therefore there can be no conflict between theRent Act and this Act for the reason that the Bank is not thelandlord of the premises in question. Section 22 of the Rent Actcannot therefore be construed to prevail over the provisions ofthis Act on the ground urged that section 22 of the Rent Actcontains the words “ notwithstanding anything in any other law.”
In the result as the bank is not the landlord of the premisesin question the prohibitions and restrictions which app’y to thelandlord under the Protection of Tenants (Special Provisions)Act and the Rent Act will not apply to the Bank which has beenvested with title to the premises by a vesting order under theAct It must also follow that the words “ other persons ” in sec-tions 16 and 17 of the Rent Act and sections 2,4 and 5(1) of theProtection of Tenants (Special Provisions) Act would not includethe Bank or any person authorized under the Act to takepossession of such premises under the vesting order in terms ofsection 70(C) (3) of the Act which gives the Bank a titleparamount against the whole world.
The plaintiff-appellant’s appeal is, therefore, dismissed withcosts.
Weeraratne, J.—I agree.
Sharvananda, J.—I agree.
ASUMA LEBBE ABDUL SATHIR, Plaintiff- Appellant and RAFAID UMMUM NAJEARE an