SIVA StTPftAMANlAM, J.—Platt, Lid. v. Ceylon theatres Ltd,67
[In the Court of Appeal of Sri Lanka]
Present: Fernando, P., Sirimane, J., and SivaSupramaniam, J.
PLAT 15 LIMITED, Appellant, and CEYLON THEATRESLIMITED, Respondents
Appeal No. 7 of 1972
S. C. 326 (F)/66—D. C. Colombo, 56449/M
Rent Restriction Act (Cap. 274)—Sections 2 (4), 2 (5), 5 (2), 7(2)," 9—“ Excepted premises ” under the Schedule—Tenant of a portion ofthe premises-—Whether he can claim protection of the Act-—Mean-ing of word “premises’’-—Rent Restriction (Amendment) ActNo. 10 of 1961, s. 11.
When a portion of certain “ excepted premises ” is let as a separateentity but has not been separately assessed under the provisions ofthe Municipal Councils Ordinance, such portion also falls under thecategory of “ excepted premises ” within the meaning of theSchedule to the Rent Restriction Act (Cap. 274).
Appeal from a judgment of the Supreme Court reported in
75 N. L. R. 128.
H. W. Jayewardene, with M. L. de Silva, Miss Ivy Marasingheand J. C. Ratwatte, for the defendant-appellant.
S. Nadesan, with A. K. Premadasa and W. P. Gunatilake, forthe plaintiffs-respondents.
Cur. adv. vult.
April 5, 1973. Siva Supramaniam, J.—
The question that arises for decision on this appeal is whethera part of larger premises which is let as a separate entity but hasnot been separately assessed falls within the category of “ excep-ted premises ” within the meaning of the Rent Restriction Act(Cap. 274) (hereinafter referred to as the Act) when the largerpremises is “ excepted premises ” by reason of its annual valueas assessed by the local authority.
' The appellant company is the tenant of the ground floor andcertain other portions of premises No. 267, Galle Road, Colombo, "of which the respondent company is the landlord. The appellantcarries on the business of a photographer in that part of thepremises. The upstair portion of the said premises is occupied byan employee of the respondent. It is common ground that the
1*—K 22375—2,808 (73/6)
98SIVA STJPRAMANTAM, J.—Plate Ltd. v. Ceylon Theatres Ltd.
whole of premises No. 267 is excepted premises within the mean-ing of the Act, the annual value of the said premises as assessedby the Colombo Municipality being Rs. 12,000 up to 1962, andRs. 13,500 thereafter. In terms of the Act all premises within theColombo Municipality the annual value of which exceedsRs. 6,000 are “ excepted premises ”, irrespective of whether theyare residential premises or business premises. The portion of thepremises No. 267 let to the appellant has not been separatelyassessed by the Municipality for the purpose of rates.
The respondent, after terminating the tenancy by giving duenotice, instituted this action to eject the appellant from theportion of the premises that had been let to it and to recoverdamages. The trial judge gave judgment in favour of the respon-dent as prayed for. A Divisional Bench of the Supreme Courtconsisting of three judges affirmed the judgment and decree inregard to the ejectment of the appellant but reduced the amountdecreed as damages. The appellant was granted leave to appeal'*to this Court.
It is urged on behalf of the appellant that the portion ofpremises No. 267 let to the appellant is a separate entity which isthe subject matter of the contract of tenancy between theappellant and the respondent and that that separate entity is“ premises to which the Act applies ” within the meaning ofsection 2 (4) of the Act. If that argument is accepted therespondent must fail in this action so far as the ejectment ofthe appellant is concerned.
Section 2 (4) of the Act is as follows :
“ So long as this Act is in operation in any area, theprovisions of this Act shall apply to all premises inthat area not being excepted premises; and theexpression “ premises to which this Act applies ” shallbe construed accordingly. ”
The contention of the appellant is that the word “ premises ”in this section should be construed to mean the “ entity which isthe subject matter of the contract of tenancy ” and where thatentity has not been separately assessed by the local authority forthe purpose of rates, it will not fall within the category of“ excepted premises ” and will therefore be “ premises to whichthe Act applies ”. In such a case, according to counsel, the provi-sions of Section 5 (2) of the Act would become applicable to fixthe standard rent. He cited a large number of decisions of theSupreme Court in which that Court had occasion to examine thecontract of tenancy and the subject matter of the tenancy todetermine whether the Act was applicable or not.
SIVA SUPRAMANIAM, J.—Plali Ltd. v. Ceylon Theatres Ltd.9S
In the cases of Packiadasan v. Marshall1 and Nanayakkara v.lllangakoon*, the Court considered whether the Act applied tobare land or to agricultural land on which there was no building.In Nallathamby v. Leitan3 the question for consideration waswhether in a case where a property consisting of a house andgarden had been let as one unit, it was open to the landlord toclaim subsequently that the standard rent should be calculatedon the basis that the premises let consisted of two parts and thatonly the portion on which the house stood was subject to the Actto the exclusion of the remaining bare land. At the date of thesedecisions there was no definition of the word “ premises ” in theAct and the questions that had to be resolved by the Court arosefrom the absence of a definition. This question was however set atrest by the legislature by enacting section 11 of the AmendingAct No. 10 of 1961 which defined “ premises ” to mean “ anybuilding or part of a building together with the land appertainingthereto.” In Nicholashamy v. Jamis Appuhamy * the Court hadto consider whether what was let under the contract of tenancywas a building or a business. Similar questions arose in the casesof Charles Appuhamy v. Abeysekera6, Peries v. Jafferjee*, andSediris Singho v. Wijesinghe In Hepponstall v. CoreaB, StandardVacuum Oil Co. v. Jayasuriya8 and Hussein v. Ratnaike “ theCourt had to determine whether the subject of the contract oftenancy had been let as a residence or for business purposes.
Learned Counsel’s argument was that the above decisionsshowed that the Courts in Ceylon had consistently applied whathe described as “ the contract of tenancy test ” to determinewhether a particular premises was subject to the operation of theAct or exempt therefrom. Section 2 (5) of the Act provides that“ the Regulations in the Schedule shall have effect for thepurpose of determining the premises which shall be exceptedpremises for the purposes of the Act. ” He submitted that inapplying the regulations in the Schedule, in terms of the afore-said subsection, to determine whether any entity let is exceptedpremises, the Court should not proceed to apply the test ofannual value under column 3 before deciding upon the nature ofthe premises under column 2 and that this can be done only withreference to the entity let.
1 (1951) 52 N. L. R. 335.
(1959) 61 N. L. R. 211.8 (1956) 58 N. L. R. 56.
(1950) 52 N. L. R. 137.8 (1954) 56 N. L. R. 243.
• (1959) 57 O. L. W. 30.
’ (1965) 70 N. L. R. 185.8 (1952) 54 N. L. R. 214.» (1951) 53 N. L. R. 22.»° (1967) 69 N. L. R. 421.
100SIVA SUPRAMANIAM, J.—Platt Ltd. v. Ceylon Theatres Ltd.
A tenancy action must necessarily relate to the subject matterof the tenancy and in order to decide whether the entity let isexcepted premises or not the Court must, of course, consider thenature of the premises let. But it does not follow that the word“ premises ” in the Act is equivalent to “ the entity let ”. Noneof the cases cited is authority for such a proposition. On the otherhand, the provisions of section 7 (1) as well as the whole schemeof the Act militate against such a construction.
Section 7 (1) is in the following terms :
“ Where any premises to which this Act applies arelet or occupied in separate parts (whether furnishedor unfurnished), which are not separately assessed forthe purpose of rates, and the aggregate of the amountdemanded or received as the rent for such separateparts exceeds the authorised rent of the premises, thelandlord shall be deemed to have contravened theprovisions of Section 3 of this Act. ”
It will be seen that this section envisages parts of “ anypremises ” being let separately and where such premises is oneto which the Act applies a prohibition is imposed on the landlordagainst recovering as rent from the tenants of the various partsa total sum in excess of the authorised rent of the wholepremises. It would follow by implication that where the premisesare “ excepted premises ” the landlord is entitled to charge anyrent from the tenants of parts of the-premises. Section 9 of theAct envisages any premises to which the Act applies being subletin separate parts by a tenant and provides that, where such sub-letting is with the landlord’s written consent, the tenant shall,in relation to each of the subtenants, be deemed for all purposesof the Act to be the landlord of the premises. The provisions ofthis section have no application where the premises are outsidethe ambit of the Act. If it was the intention of the Legislaturethat where any premises whether excepted premises or not, arelet in parts not separately assessed, each such part should bedeemed to be premises to which the Act applies, one would haveexpected express provision to be made to that effect.
Where the Act refers to “ premises to which the Act applies ”and to those which are “ excepted premises ”, it does so withreference to the annual value as assessed by the local authorityfor the purpose of levying rates. In respect of premises situatedin any area which is not under a local authority, the questionwhether the Act applies to those premises or not is determinedwith reference to the rent paid for the premises, subject to the
SIVA SUPRAMANIAM, 3.—Platt Ltd, v. Ceylon Theatres Ltd.101
right of the rent board to declare any premises not excepted onthe ground that the fair rental for the premises is below theprescribed limit.|
In the case of premises situated within a Municipal area, the'assessment of the annual value is done in terms of the provisionsof the Municipal Councils Ordinance (Cap. 252). Under thatOrdinance, “ annual value ” is the “ annual rent which a tenant
might reasonably be expected to pay for any house,
buildings, land or tenement ”.
The contention of learned counsel for the appellant that theentity which was let to the appellant was “ separate premises ”which should be treated as premises which had not been assessedby a local authority for the purpose of rates, is untenable sincewhat was let to the appellant was a portion of premises No. 267and that portion had been included in the assessment for rateswhen premises No. 267 was assessed for rates. Section 5 (2) ofthe Act would therefore have no application to the entity let tothe appellant, as no part of premises No. 267 remained un-assessed. If the portion let to the appellant had been separatelyassessed by the Municipality, there would have been aproportionate reduction of the annual value of the premises No.267. If the appellant company had desired to treat the portion letto it as separate premises it was open to it to have applied to theMunicipality under the provisions of the Municipal CouncilsOrdinance to assess it separately on the basis of the use to whichthat part was put, namely, whether it was used for residentialor business purposes. So long as the appellant failed to pursuethat course, it was the main use to which the premises as awhole was put that would have determined the character of thepremises for the purpose of column 2 under Regulation 2 of theschedule to the Act. In terms of column 3 the annual value ofthe premises would determine whether the premises is one towhich the Act applies or not. In the'* instant case, it wasimmaterial whether premises No. 267 was used for the purposeof residence or for business purposes, since in either event, itwas excepted premises as the annual value exceeded Rs. 6,000.Every part of premises No. 267, inclusive of the portion occupiedby the appellant, was therefore excepted premises.
We are of opinion that the trial judge as well as the SupremeCourt correctly decided that the entity let to the appellant wasexcepted premises. We dismiss the appeal with costs.
Appeal dismissed. •
1** X22375 (5/73)
PLATE LIMITED, Appellant, and CEYLON THEATRES LIMITED, Respondents