Wigneswaran v. Thambipillay and Others
v. .THAMBIPILLAY AND OTHERS
AMERASINGHE, J. ANDDHEERARATNE, J.,
S. C. NO. 35/91.
S. C. SPECIAL L. A. 155/90.
C.A APPLICATION NO 964/85.
APRIL 29 & 30 APRIL 1992
Landlord and Tenant – Settlement in rent and ejectment case – Proceeding beforethe Commissioner of National Housing – Vesting Order – Intention to abandonproceeding before Commissioner of National Housing – Section 13A of the Ceilingon Housing Property Law No. 1 of 1973 * Section 22(2) (bb) of Rent Act.
The plaintiff filed a rent and ejectment case against the 1st respondent on theground of reasonable requirement on 6.11.1978. When the case was pending,Rent Act (Amendment) No. 55 of 1980 was passed and in terms of the newsection 22(2) (bb) the petitioner deposited five years rent and in an amendedplaint filed on 31.3.1984 prayed for ejectment On 2.12.1983 when the case waspending the 1st respondent made an application to the Commissioner of NationalHousing in terms of section 13A of the Ceiling on Housing Property Law No.1 of 1973 (as amended) to purchase the premises which were the subject matterof the tenancy. On 8.3.1984 the rent and ejectment case was settled on thebasis that the 1 st respondent tenant would buy the premises for an agreed figurepayable in instalments. The 1st respondent defaulted payment and the plaintifftook out writ. When the fiscal proceeded to the premises to execute writ, hewas confronted by the 1st respondent with the vesting order dated 18.10.1984published in the Government Gazette dated 30.12.1984 vesting the premises withthe Commissioner of National Housing. There was correspondence which showedthat the 1st respondent had represented to the plaintiff that the application tothe Commissioner of National Housing not be pursued. The case was decidedon the question whether the Minister would have made the vesting order of18.10.1984 had he known of the settlement arrived at in the District Court caseon 8.3.1984 – a fact not disclosed to him.
The conduct of the 1st respondent demonstrated a clear intention to abandonthe application made to the Commissioner of National Housing. 2
(2)Had the Minister of National Housing been aware of the respondentsagreement in court to purchase the property at a price he considered reasonable,he would have demurred from making the vesting order which he did. Theinference that non-disclosure of the settlement arrived at in court would
Sri Lanka Law Reports
 2 Sri LR.
not have affected the application made to the Commissioner was wrong. Thenon-disclosure was a breach of Uberrima tides.
APPEAL from judgment of the Court of Appeal.
Faiz Musthapha, P.C. with Mahanama de Silva for petitioner-appellant.
Mrs. Eva Wanasundera, S.C. for 2nd and 3rd respondents.
H. L. de Silva, P.C. with P. A. D. Samarasekera, P.C. with A P. Niles for 1strespondent.
cur. adv. vult
(Note by Editor : The judgment of the Court of Appeal which was reversedby the above judgment is reported at (1992) 1 Sri L.R.150.)
July 07. 1992.
This is an appeal from a judgment of the Court of Appeal refusingto quash the order (marked C) made by the Minister of NationalHousing on 18.10.1984 in terms of section 13A (6) of the Ceilingon Housing Property Law No 1 of 1973 (as amended) vesting premisesNo 37, Moor Street, Colombo 3, with the Commissioner of NationalHousing.
The petitioner (appellant) is the landlord and the 1st respondent thetenant of premises No 37, Moor Street, Colombo 6. On 26.7.1977the petitioner gave the 1st respondent one year's notice of terminationof the tenancy preparatory to filing action to have the 1st respondentejected. Thereafter, action No. 667/RE was filed by the petitioner inthe District Court of Mt. Lavinia on 6.11.1978 in terms of section22(2) (b) of the Rent Act No. 7 of 1972 on the basis that the premiseswere required by the petitioner on the ground of reasonable require-ment. In consequence of the Rent Act (amendment) No 55 of 1980which came into operation on 12.12.1980, amended plaint was filedon 31.3.1981 in terms of section 22(2)(bb) the petitioner havingdeposited a sum of Rs. 20,374/50 with the Commissioner of NationalHousing to the credit of the 1st respondent which sum represented5 years rent of the premises. "Reasonable requirement" was not aground of ejectment under section 22(1 )(bb).
Wigneswaran v. Thambipillay and Others (Dheeraratne, J.)
On 2.12.1983, when the said case was pending, the 1st respondentmade an application (marked D in these proceedings) to the Com-missioner of National Housing, in terms of section 13A of the Ceilingon Housing Property Law No 1 of 1973 (as amended), to purchasethe demised premises. In column 12 of that application, in answerto the question ; "Can action be instituted under the Rent Act No7 of 1972 on the ground that such house is required for occupationas a residence of the landlord of such house or any member of thelandlord's family"?, the 1st respondent answered : "No ; No actioncan be instituted and maintained on the Rent Act No 7 of 1972 bythe landlord."
On 8.3.1984 case No 667/RE was settled. By the terms of thesettlement (R1), the 1st respondent agreed to purchase the rentedpremises for a sum of Rs. 600,000 from the petitioner ; he agreedto pay Rs. 10,000 on or before 26.3.1983 ; a further sum of Rs.
on or before 30.6.1984 and the balance consideration of Rs.
on or before 31.12.1984. If the 1st respondent failed to paythe total consideration of Rs. 600.000 on or before 31.12.1984, heagreed that the petitioner will be entitled to take out writ to havehim ejected from the premises.
The 1st respondent having deposited the sums of Rs. 10,000 andRs. 40,000. defaulted in depositing the balance consideration asagreed. Consequently, the petitioner took out writ of ejectment. Whenthe fiscal proceeded to the premises to execute the writ, he wasconfronted by the 1st respondent with the vesting order dated18.10.1984 published in the Government Gazette dated 30.11.1984(PI) vesting the premises with the Commissioner of National Housing.It is under those circumstances that the petitioner moved the Courtof Appeal by way of writ to get the vesting order quashed.
Several submissions were made on behalf of the petitioner as towhy we should interfere with the judgment of the Court of Appeal.The first was that the 1st respondent should be a tenant of thepremises both at the point of time he made the application to theCommissioner of National Housing (2.12.1982) and at the time thevesting order was made by the Minister (18.10.1984). It was con-tended that the settlement entered in case No 667/RE on 8.3 1984denuded the 1st respondent of his character of a tenant making hima prospective purchaser and a licensee on the premises. On the other
Sri Lanka Law Reports
 2 Sri LR.
hand, learned counsel for the 1 st respondent contended that the word"tenant", within the meaning of Law No 1 of 1973, covers both acontractual tenant and a statutory tenant, and that a statutory tenantdoes not lose his status of a tenant until he is ejected from thetenanted premises by an order of a competent court. It was alsosubmitted that, inasmuch as this matter was neither urged before norconsidered by the Court of Appeal, grave prejudice would be causedto the 1st respondent if we proceed to consider the matter for thefirst time. Secondly, it was submitted by learned counsel for thepetitioner, that the petitioner was denied a fair hearing, in that sheshould have been given a copy of the report made by the Commis-sioner in terms of section 13A (5) or should have been made awareof its contents prior to the Minister making a decision to vest theproperty. However, in view of the order I propose making on the finalsubmission made by learned counsel for the petitioner, I would refrainfrom expressing any opinion on the first two submissions.
The final submission made on behalf of the petitioner was thatthe Minister failed to consider the equities of the case in making thevesting order which he was obliged in law to consider. The questionwas posed as to whether the Minister would have made that vestingorder had he been aware of the settlement entered in case No 667/RE of the District Court of Mt. Lavinia by which the 1st respondentagreed to purchase the property in question for a sum of Rs. 600,000which sum was far in excess of an amount the petitioner would haveultimately received in the proceedings under the Ceiling on HousingProperty Law. The Court of Appeal was of the view that the non-disclosure of the settlement arrived at in court would not havematerially affected the Minister's decision to make the vesting ordersince the application for the purchase of the house was made priorto the settlement entered in the District Court.
As at 2.12.1983 when the application was made by the 1strespondent to the Commissioner of National Housing, the 1st respond-ent had received notice of the termination of his tenancy : plaint andamended plaint were filed in case No 667/RE and none of thesematters were brought to the notice of the Commissioner. Even if the1st respondent was under no legal obligation to disclose those facts,the Commissioner would have been more circumspect in consideringwhether to recommend vesting or not, had he known that there waspending litigation over the same subject matter. Furthermore, the
Wigneswaran v. Thambipillay and Others (Oheeraratne, J.)
prospective actions by the Commissioner and the Minister in respectof such an application, are capable of rendering nugatory steps takenby a competent court in the exercise of its ordinary jurisdiction overthe subject matter, which that court was already seized of.
It is material to consider the attitude of the 1st respondent towardsprosecuting his application to the Commissioner. On the same dayon which he made the application, viz. 2.12.1983, he wrote a letter(A) to the attorney of the petitioner in Sri Lanka, the petitioner beingaway in the U.S.A. at that time. The receipt of this letter was deniedby the attorney : but since the registered article was produced, I shallassume that the letter was received. The material parts of the letterread
"Today I signed an application at the instance of my son, tothe Commissioner of National Housing asking that the house bevested and transferred to me under the Ceiling on Housing PropertyLaw.
But I do not wish to litigate, and have ill feelings with neigh-bours. We have seen these cases going on for years with suchtrouble to both sides."
“I still wish to buy this house at a reasonable price".
On 8.3.1984 case No 667/RE was settled as mentioned earlier,the 1st respondent agreeing to purchase the property by depositinga sum of Rs. 600,000 to the credit of the case. On the same daythe 1st respondent wrote the letter marked C to the petitioner to heraddress in Sri Lanka. Although the petitioner denies having receivedthis letter, since the posted article of registration was produced, I shallassume that the petitioner received the same. That letter reads
“Now that the case was settled, you must remember to informand do something at the Housing Commissioner's end. You toldme that you can speak to your friend there. Please attend tothis, as my sons are not here at present. I am sick and it is 'inconvenient for me to go about to the Housing Commissioner'soffice. Housing Commissioner's reference is CH/1A/47/49591/245."
Sri Lanka Law Reports
 2 Sri LR.
Subsequently, the 1st respondent proceeded to act on the basisof the settlement R1 by paying to court a sum of Rs. 10,000 before26.3.1984 and Rs. 40,000 before 30.6.1984 quite ignoring hisapplication to the Commissioner. The conduct of the 1st respondentis tantamount to representing to the petitioner unequivocally that hewas not interested in prosecuting his application to the Commissionerwhich he was quite specific he “ signed at the instance “ of his son.He wanted the petitioner to do " something about it as his sons wereaway ". He had expressed his desire to purchase the property ata "reasonable price"; and it may be inferred that this reasonableprice was what he agreed upon when he came to a settlement inthe District Court.
The advertisement in the Ceylon Daily News (XI) calling forobjections from the petitioner who was named as the owner for theproposed vesting was published on 28.2.1984. The petitioner statesthat she did not see the advertisement. This is quite probable,because when the settlement was reached on 8.3.1984, nothing wasmentioned to court about a pending application before the Commis-sioner. The conduct of the 1st respondent demostrated a clearintention to abandon the application made to the Commissioner ofNational Housing.
I am of the view that, had the Minister of National Housing beenaware of the respondent's agreement in court to purchase the propertyat a price he considered reasonable, he would have'demurred frommaking the vesting order which he did. I am unable to agree withthe opinion expressed by the Court of Appeal that non-disclosure ofthe settlement arrived at the court would not have affected theapplication made to the Commissioner and that this non-disclosurecannot be treated as a breach of Uberrima tides.
For the above reasons the appeal is allowed with costs fixed atRs. 3000 payable by the 1st respondent to the petitioner. The applicationfor writ is allowed.
BANDARANAYAKE, J. – I agree.
AMERASINGHE, J. – I agree.
WIGNESWARAN v. THAMBIPILLAY AND OTHERS