Sri Lanka Law Reports
11Vti21 I S.I..R
COURT OF APPEALAloysiusV.
C.A. (S.C) 72177— LI 1167— M.C. Civil JaffnaRent Act Section 4 (5). 22(2). 34 – Reasonable Requirement – Refusal of tenantto look for alternative accommodation-Determination of authorized rent.
A premises bearing Assmt. No. 32 was described as a tiled house in 1941and its annual value was given as Rs. 720/-.
In 1956. the No. of the premises was changed to 49 and the descriptionof the, premises was changed to tiled boutique. At the same time theannual value was increased to Rs. 1,173/-.
The question that arose was when was the premises first assessed.
It was_also contended on behalf of the Plaintiff Respondent that thepremises which he bought eight months earlier while the tenant was inOccupation was required by him.to commence a new business.
Plaintiff further stated that since the Defendant Appellant had taken nosteps whatsoever to look for alternative accommodation despite the availablyof suitable accommodation in the immediate neighbourhood he was entitledto judgment.
Held I) that the premises were assessed for the first time as residentialpremises in 1941 and as business premises for the first time in 1956.
2) that taking into consideration the defendant appellant's refusalto look for alternative accommodation the requirement of the' plaintiff respondent was reasonable.
l/ov.w7(.v r. /’<//«//>('</> (Ahiliil (h!ir. .1 i
APPLICATION for leave to appeal from the outer of the Magistrateof Jaffna.
Cur. (ulv. vult.
ABDUL CADER. J.
The plaintiff sued the defendant for ejectment from the premisesin suit on the ground that he required the premises for his business.It was admitted that the premises are governed by the Rent Actand that the plaintiff became the owner of the premises when thedefendant was in occupation as a tenant. The learned District Judgeheld that the plaintiff required the premises for his business underSection 22 (6) of Act No. 7 of 1972 and. therefore, gave judgmentfor the plaintiff for ejectment and damages from the date of plainttill ejectment with costs. He also declared that if the plaintiff failedto occupy the premises in terms of Section 22 (8) (9) of Act No.7, of 1972. the defendant would be entitled to take necessarv stepsin terms er the law. It is against this judgment that the defendanthas appealed.
The dispute as regards the validity of the notice to quit was notpursued before us.
Counsel for the plaintiff-respondent conceded that the plaintiffcould not maintain this action in terms of Section 22 (lj as theplaintiff had purchased this land over the head of the defendant whowas then the tenant, but Counsel maintained that this action wasmaintainable and correctly decided in terms of Section 22(2) whichreads as follows:
“Notwithstanding anything in any other law, no action orproceedings for the ejectment of the tenant of-
(') (ii) any business premises the standard rent (determinedunder section 4) of which lor a month exceeds one
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hundred rupees and the annual value of vvhieh doesnot exceed the relevant amount.
shall he instituted in or entertained by any court, unless where -(a)
(h) the premises are, in the opinion of the court, reasonably
required for the purposes of the trade.
business, profession, vocation or employment of thelandlord:"
Counsel for the appellant agreed that in view of Section 22(7),this action falls within subsection (2)(ii) and the plaintiff can succeedonlv if the plaintiff establishes the ingredients in that subsection.
It was common ground that the annual value of the premises docsnot exceed the relevant amount and that these arc business premises.Ihercforc. the two matters in dispute were:-
whether the standard rent of these premises is below orabove Rs. 100/-. Counsel for the respondent agreed thatif the Court holds that the standard rent is below Rs. 100/-.the plaintiff's action will fail.
lias the plaintiff established reasonable requirement forthe purposes of his trade or business?
The plaintiff applied to the Rent Control Board on 14th September.1074. to determine the authorized rent of these premises and theRent Control Hoard determined the standard rent'at Rs. 1310/04 peryear and authorized rent at Rs. 1532/30. Therefore, the authorizedmonthly rent would be Rs. 127/09. The plaintiff appealed against thisorder to the Board of Review, but. unfortunately, the Board ofReview has failed to make its order.
Counsel for the respondent submitted that the application to theRent Board was under Section 4 (5) (it) and that the appellant wasbound bv the decision of the Rent Control Board in terms of thatsubsection which reads its follows:-
(;t) “where any premises the annual value of which docs notexceed the relevant amount are lirst assessed or first
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separately assessed altei the first dav of.lanuarv. I'M'); or
the Hoard may on application made hv the
tenant fix in consultation with the appropriate
local authority, as the standard rent per annum of suchpremises, such amount as in the opinion of the hoard isfair and reasonable: and where an amount has been fixedbv the board as the standard rent under this sub-sectionsuch amount shall hr deemed to he the standard rent ofsuch premises and shall not thereafter he varied."
He submitted that these premises were "first assessed" or firstseparately assessed in Ifi56 on a change of character from residentialto business premises.
It is clear from P2 that the appellant wanted the Hoard "todetermine the authorized rent of the said premises” – paragraphs 7and «S of P2. and it is the authorized rent that the Hoard determined
(PI) in terms of Section 34.
Counsel for the respondent referred us to the information containedin PI ;ts regards the standard rent. He submitted, therefore, thatthe .Board "fixed" this figure its the standard rent on that application.Hut that was incidental to the determination of the authorized rent,which could be done only after the determination of the standardrent. In terms of Section 34. the Hoard is empowered "to determinethe amount of authorized rent of the premises." Neither the appellantnor the Hoard had been in any misapprehension as regards fire Sectionunder which the application was made and the determination wasmade bv the Hoard. I hold, therefore, that Section 4 (5) (a) willnot apply and. therefore, there is no binding order against thedefendant. In any event. 1 do not agree that the Rent Hoard fixedthe standard rent of these premises on a first assessment of thesepremises. It appears to me that this Section is intended for someother circumstances as.for instance, where the premises are assessedfor the first time when the tenant is in occupation and he complainsto the Hoard that the annual value assessed is excessive. Thai is thereason for the rent to be fixed "in consultation with the appropriatelocal authority." I also lake the view that a "first separate asscsscmcnt
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takes place when the premises are “sub-let or occupied in separateparts.” In this case, there was no question of any separate assessment.The premises remain one undivided whole.
The respondent having failed in respect of his submission thatSection 4 (5)(a) applies and the assessment by the Board binds thedefendant, it has now become necessary for me to decide what thestandard rent is. Section 4 (1) of the Rent Act reads as follows:-
“The standard rent per annum of any residential premises and of any buisiness premises .• means-
the amount of the annual value of such premises as
specified in the assessment in force during the monthof November, 1941, or ;or
if the rates are payable by
the landlord, the aggregate of the amount determinedunder paragraph (a) and of the amount payable perannum by way of rates.”
Subsections 2, 3 and 4 of section 4 refer to residential premises.Section 2(4) expressly distinguishes residential from business premises.Business premises are defined as premises other than residentialpremises. This is a substantial distinction that runs through the entireAct, residential premises receiving greater protection than businesspremises.
In 1941. these premises bore No. 32 and was described as a tiledhouse with the annual value assessed at Rs.720/-. The situation didnot change till 1949, when against the description of the property,there is an entry “Obj. 95" which indicates that there has been anobjection as regards the description of the property, but the annualvalue remains the same. In 1951, the annual value was increased toRs.960/-. There is no column for the description of property. In1952, 1953 and 1954, the description of property is left blank andthe annual value is the same, and the assessment Nos are 32 and34. In 1956, there was a substantial change in several respects. 32and 34 is described as an obsolete number. 49 is given as the Streetnumber. The property is describied for the first time as a tiledboutique and the annual value is increased to Rs. 1173/- and there
Aloysios r. I’illaiptulv lAbilol ( oiler. .1.)
is a proportionate increase in the rates. I do not attach any weightto the change of assessment number because as new buildings startcoming up in between existing. numbers. the numbers are changedwhen a revision takes place. Hut the description from tiled house totiled boutique and the increase in the annual value are very significantand the Rent Act makes a substantial distinction between businesspremises and residential premises .as I have pointed out earlier. . .
Taking all these into consideration, there has been a change ofcharacter from one to the other which would necessarily involve the“first assessment” referred to in Section 4(1). When the assessmentregister refers to these premises as. residential premises in 1941. thefirst assessment of these premises as residential premises would bethe 1941 assessment. When the assessment register refers .to. thesepremises as business premises in 1956 for the first time., the firstassessment of these premises as business premises would be the 1956assessment. It is true that the defendant had. used these premises,,for business even,prior to 1946, but. in my view, that makes nodifference on the question of determining..the standard rent, whichthe Rent Act provides for determination by. reference to annual valueand rates only.
Therefore, 1 am of the view that for the purpose of determiningthe authorized rent of these premises, it is the 1956 assessment thatshould be taken as the start i pg ^ poi n t ..J'h e re to re. the standard rentof thss.e premises would..be, hQ, .1)73/-plus J$s. 1t<J6/46. totalling toRs. 1319/64 which is the figure that, was arrived „at by the RentControl Hoard! too.
Counsel for the defendant ..stated that there is no evidence thatthe plaintiff paid the rates and.,therefore, the rates should..not. be.,added to the annual value. H.e submitted that if the .rates are not:added, even on-the basis of the annua), value in. 1,956 (Rs. 11,73/-),.the standard rent of the premises wjjl be less,.than.,Rsv 100/-.permonth,. It is true,;that there is no evidence that the plaintiff paid-therates. But (1) before the Rent Control Board, the dc.fendant.djd notcontend that he paid the rates; and the Board made order on thebasis that the plaintiff paid the rates. (2) Thc defendant did notclaim iti. reconvention the rates he had paid. (3) The, defendant, didl.not. give evidence that he paid the rates, and (4) I find that in .thelast written .submissions tendered by the appellant, his Counsel hgs.
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computed the standard rent on the basis that the plaintiff paid therates. I hold that the plaintiff paid the rates, and. therefore, thestandard rent for these premises is over Rs.100/-.
As regards reasonable requirement on the part of the plaintiff.Counsel for the appellant conceded that the plaintiff would be entitledto maintain this action even though he was attempting to commencea new business, but submitted that the hardships caused to thedefendiint would be considerable and the defendant's needs shouldprevail over the plaintiffs needs. The question now is as to whoserequirement should prevail, weighing in the balance the plaintiff'srequirement and the defendant's requirement.
In Ahdcen v. Niller & Co. Ltd. reported in 50. N.I..R. 43.Nagalingam. J.
held:“Where a landlord wants a premises for the purpose of his
business and the tenant has made no effort to secure otheraccommodation which might have been available, the landlordis entitled to a decree for ejectment”
In Thamby l.ebbe v. Ratnasamy reported in 68N.L.R. 356. C>.P.A.Silva.
held: “Where, in regard to the issue of “reasonable requirement”,it is shown that the hardship of the landlord is equally balancedwith that of the tenant, the landlord's claim must prevail.”
That was also a case where the landlord wanted the premises fora prospective business. His decision in favour of the landlord thathis requirement prevails over that of the tenant was for the reasonthat the defendant had admitted in cross-examination that he didnot make any attempt to find out whether there were alternatepremises, available and that he did not propose to shift even ifalternate premises were available as the premises that he occupiedwere more suitable to him.
Counsel for the plaintiff has drawn our attention to the evidenceof the defendant. The defendant admitted in evidence that thepremises which belonged to the business firm known as “Crown"was vacant. He also stated that he did not wish to rent out any
Aloysius v. Pillaipody (Abdul Coder, J.)
premises on Kankasanturai road; and that he did not make anyattempt to rent out boutiques on Kankasanturai road; that there are,in fact, textile boutiques on that road; and that even if premiseswere available on Kankasanturai road, he would not take thosepremises. He admitted that there were shops vacant on Kankasanturairoad which were once textile boutiques. He agreed that GaneshanSaree Emporium, Cheapside, Razeen boutiques were all once textileboutiques which now remain vacant, and in all there were as manyas 20 shops vacant on that road. He agreed that one of thosepremises, the Saree Emporium on Kankasanturai Road was just 200yards away from his premises. He told Court that he is doing businessin these premises in the belief that the shop belonged to him andthat so long as he gave the rent he was entitled to remain in thesepremises for all time.
Later on in cross-examination, he admitted that even in GrandBazaar where these premises are situated, there were two shopsclosed and that he had not made an attempt to find out who theowners of these two shops were and that one of these shops is ver-close to his shoo.
Counsel for the appellant pointed our to the hardship that woulhbe caused to the appellant if he is ejected.
The defendant has been in occupation from 1948,
This is the only shop that the appellant has to conduct hisbusiness.
The plaintiff can carry.on with his itinerant business,
The plaintiff knew that the defendant was in the premiseswhen he purchased the premises,
For 8 months after purchase, the plaintiff did not call uponthe defendant to attorn to him,
The plaintiff has no children while the defendant has 14children.
Notwithstanding all these circumstances, the learned Magistratedecided in favour of the plaintiff. I think he was right. The decisionof C.P.A. Silva, J. referred to above makes it quite clear that atenant's refusal to make an effort to obtain alternate premises willtilt the scales in favour of the landlord and I agree, with all respect,with that decision.
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The appeal is dismissed with costs.
The question whether it is the 1956 assessment or theassesssment that will apply in the circumstances of this case,not appear to be covered by authority. Therefore, we grantto appeal ex morn motu on this question only.
SENEVJRATNE. J. — I agree
Leave to appeal granted.