044-SLLR-SLLR-1982-2-ALOYSIUS-v.-PILLAIPODY.pdf
.762
Sri Lanka Law Reports
(1982) 2 S L R.
ALOYSIUS
v.
. PILL AIPODY
SUPREME COURT.; , .
WlMALARATNE. J., RATWATTE. J., AND COLIN-THOME. J.
S'.C. 4/82; '
C.A:. 72/77; ’
M.C.: (CJVIL) JAFFNA 167/LNOVEMBER 16, 1982
Landlord and tenant – Rent Act, No. 7 of 1972, sections 4, 22(2) (it) (b) and22(7) – Calculation of standard rent.
The plaintiff was the landlord of premises No. 49, Grand Bazaar Road, Jaffna•haying acquired it in.,1948. The defendant was the tenant of the said premiseshaving,come into occupation of the premises long before 1948,.
The plaintiff sued the defendant for ejectment from the premises on the groundof reasonable requirement.. In order to succeed under 22(2) (ii)(6) and 22(7) ofthe ftent Act he had to prove that the standard rent of the premises exceededRs. lOV- p.m. '
Aloysitis v. Pillaipotly (Wimalaratne. J I
763
iC
No. 49, Grand Bazaar Road. Jaffna was described as a tiled house in 1941 an'das a tiled boutique in 1956 in the Assessment Register. The question, that arosewas whether the annual value of the tiled house in 1941 or whether the annualvalue of the tiled boutique in 1956 was relevant to determine the standard rent.
The District.Court and the Court of Appeal held that the standard rent exceededRs. 1(X)/- on the basis of the annual value of 1956. The defendant appealed tothe Supreme Court on the question'of the calculation of .standard ‘rent;
Held –
The ■ mere.-registration by the- tenant -of-a.'-busTric’ss under the Business NafftesRegistration. Ordinance Jm.l954-wni''not have thc'effect of'-’cdhverting residential.premises tipto^business/ipiemises,…. …
rhe'‘descriptfioh''6f" the property as entered in-the Assessment: Register affordsprima facie evidence as to whether the property has been, assessed as residentialpremises or business premises. It is, not necessary .to call, an officer from theMunicipal Council to prove the fact. The standard rent of the premises shouldbe calculated on tKe -19S6 annual value'as thar&As the'’firsrJtiW{rthat the premiseswere assessed as a business premises.
.-APPEAL fVom’/udg'merit of the Court of Appeal reported at (19X2) 1 Sri L.R. p. 106.
i l.' 4 i.-. / i«« 1., ‘ j4,
H.L.. de Silva, S.A.. with S.C. Crosette Tambiuh and K. Thevarajah for•defe:hdant-hppet1an't:- *•
K.N. Choksy, S.A., with 5. Mahdth'eyun.‘ Harsha Soza. Miss. I.R. Rajapakse. N.Fernando and R. Selvaskandan for plaintiff-respondent.'1
Cur.adv. vult.
December''2. 1982
WIMALARATNE, ,1.
This is an action instituted by the..I.andjo rd,,; wh o jfi^t^ie-Rlaintiff-respondent, for , the ejectment ofvthe: tenant,, . who^-js. , Jfre de-fendant-appellant, from premises NO.-.49:, Grand. Bazzar Roa4, Jaffna,on the ground that the premises..are*,treasonably reqtujrpd,.by theplaintiff for the purposes of his business. Admittedly ,the,tpre,niiseswere, on the date of action, business premises to which;:thfi«.JRentAct, No. 7 of. 1972 applied, and the annual value of which-Airlessthan-the “relevant amount” (Rs. 1500/-). Admittedly also, the plaintiffhad acquired ownership of the premises on a date (Septemb^j- 1973)subsequent to the date, on which the. defendant came into occupation(in 1948). The combined effect of, sections 22(2) (ii.)(b) and.22(7) ofthe Rent Act, is that the landlord could succeed ip,,aji action forthe ejectment of a tenant from business premises on the ground ofreasonable requirement, only if he establishes that the.standard rentfor a -month.;(determine4.undc.t..sectiqn;,4..qf: the Act);,exceeds /Rs.*00/-, besides proving reasonable requirement.
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The trial Judge as well as the Court of Appeal have held withthe plaintiff on both matters, and the Court of Appeal has ex meromotu granted leave to appeal to this Court on the question of thecalculation of the standard rent.
For the determination of the standard rent of business premisesthe formula laid down in section 4(1) is as follows:-
“4(1) The standard rent per annum…. of any business premisesthe annual value of which does not exceed the relevantamount, means –
the. amount of the annual value of such premises asspecified in the assessment in force during the month ofNovement 1941, or if the assessment of the annual valueof such premises is made for the first time after thatmonth, the amount of such annual value as specified insuch assessment, or
if the rates levied in respect of such premises are,under the terms of the tenancy, payable by the landlord,the aggregate of the amount determined under paragraph(a) and of the amount payable per annum- by way ofrates in respect of such premises for the year 1941 or,as the case may be, for the year in which such firstassessment is made”. .
The burden was on the plaintiff to establish that the standard rentexceeded Rs. 100/- per "month. In order to discharge that burdenthe plaintiff relied upon two documents – PI & P13. PI is a decisionof the Rent Control Board of Jaffna made on 28.8.75 fixing theauthorised rent at'Rs. 126.69 p.m. On the basis that the standardrent was Rs. 1319.64 p.a. This fixation was a*s a result of an applicationto the Board by the tenant, apparently under section 34 of thfc Act.An appeal by the tenant to the Board of Review, had not beenconcluded when the trial reached a finality in the Magistrate’s Court.Therefore the fixation by the Rent Board of the authorised rent(and hence of the standard rent) was not final and conclusive. Besides,as the fixation had not been made-under section 4(5) of the Act,the amount determined cannot be deemed to be the standard rentfor the purposes of the Act. So the standard rent has to be determinedunder section 4(1).
P13 is a copy of the Assessment Register produced at the trialwithout objection. This is a Register required to be maintained under
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Aloysius v. Pillaipody (Wimalaratnr. J.)
765
section 235 of the Municipal Councils Ordinance (Cap. 252). Theplaintiff relied upon the change in the entries made in 1956. In 1941these premises bore assessement number 32 and were assessed forthe purposes of rates at an annual value of Rs. 720/-. The premiseswere described as “tiled house". In 1956 a new assessment number49 was given; the annual value was increased from Rs. 960/- to Rs.1173/- and the premises were for the first time described as “tiledbotique”. The Court of Appeal has accepted the contention on behalfof the plaintiff that the premises were for the first time assessed asbusiness premises in 1956 and that the base annual value for the.purpose of calculating the standard rent in terms of section 4(1) isthe 1956 annual value, and not the annual value for any previousyear, even though the premises may have been used for purposesof business.
Mr. de Silva for the appellant has argued before us that –
the definition of “premises" in the Rent Act as meaning “abuilding or part of a building together with the land appertainingthereto” has no relation to any purpose for which the premisesis used; therefore the expression “of such premises” in section4(1) means "of the building in question”, and as the buildingin question was assessed in 1941 for the purposes of rates, itis the 1941 annual value which should be taken as the base value:
the entries in the Assessment Register, other than those inrelation to annual value and rates are, in the absence of provisionin any written law, not conclusive proof, nor even prima facieevidence of what they represent;
the fact that the premises are situated in the grand bazzar ofJaffna and were occupied by “Adam Bhai Stores” in 1941 rebutsany inference- that the premises were assessed as residentialpremises that year.
Mr. Choksy for the respondent has contended that –
when an assessment is made of the annual value of any premisesthat assessment has necessarily to be based on the character ofthe premises, that is whether it is residential or business premises.The description of the property as residential or business premisesin the Assessment Register is therefore intimately linked withthe assessment of the annual value;
if a description of the property assessed is not entered in the• Assessment Register, then it would not be possible to work the
Rent Act. The provisions in the Rent Act such as those relating
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to standard rent, relevant amount and excepted premises cannotbe construed apart from the written laws under which the annualvalue as assessed for the purpose of levying rates;
the description “tiled house” is not equivocal. It could haveonly one meaning, namely, a residential house, as contrastedwith business premises;
the change in the description of the premises in the AssessmentRegister from “tiled house” in 1941 to “tiled botique” in 1956
* is significant, and has to be given a meaning.
Section 48 of the Rent Act defines “annual value.” as-follows: “Annual value of – any premises means the annual – value ofsuch premises “assessed as residential or business premises, asthe case may be, for the purpose of any rates levied by anylocal authorities upd^r^ny written law, and as specified in theassessment under such written law….’(The emphasis is mine).
The, written laws under which, local authorities are authorised toassess the annual, value.of..premises for the purpose of any rateslevied by such local, authorities are the Municipal Councils Ordinance(Cap, 252) the Urban Councils.,Ordinance (Cap. 255) and the TownCouncils Ordinance. (Cap. 256). The provisions relating to assessmentof annual vajue, of property in the Municipal Councils Ordinanceapply to Urban Councils and Town Councils as well. Now “annualvalue” is defined in section 327 of the Municipal Councils Ordinanceas meaning ‘‘the annual rent which a tenant might reasonably beexpected, faking one year with another, to pay‘ for any house,building, land or tenement….” .It is common knowledge that therent of-business- premises are generally higher than those of residentialpremises?fSection 234'of the Municipal Councils Ordinance empowersthe-Council- to recfuire the owner and occupier of each house, building,land and tenement to furnish returns of the rent and' 'annual valuethereof, and empower^.,also .an authorised officer to enter, inspectand survey such premises for a like purpose. The entries in the 'Assessment Register required to be maintained under section 235are made only upon receipt of information obtained under section234'! Oh such' infofmatiori th’6 'Council is able to assess the premises. as business or residential "premises, ahd prior to assessment of theannual value the character of tAe'premises is known to the MunicjpalCouncil. When the assessment ’register’is compiled the descriptionof the premises as well ds its annual value. assessed for thfe purpose’of rates are entered TTierefore the annual" Value .entered in the
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register is necessarily linked with the description of the property.The description of the property as entered in the register thus affordsprima facie evidence as to whether the property has been assessedas residential premises or as business premisesIt is not necessary,as contended by Mr. de Silva, to call as a witness an officer fromthe Municipal Council to prove that fact.
As section 48 of the Rent Act defines annual value as the valueof the premises assessed as residential or business premises for* thepurpose of the rates levied by the local authority, and as such ratesare levied and assessment made under the authority of the MunicipalCouncils Ordinance, the Urban Councils Ordinance and the TownCouncils Ordinance, the Rent Act cannot be construed withoutreference to these laws. As the standard rent under the Rent Actis based upon the annual value, and as the annual value is determinedunder the written laws relating to local authorities, the standard rentcannot be determined without reference to those laws. Therefore notonly the annual value and the rates, but also the description of theproperty as entered in the assessment register afford proof of thematters represented therein. The entries also afford material fordetermining the ‘relevant amount” and also whether premises are orare not “excepted premises”.
The next question is whether the description of the property in1941 as “tiled house” is evidence that the premises were assessedas residential premises that year. Mr. de Silva contends that the termtiled house is equivocal because it could mean either a ‘tiled residentialhouse or a tiled business house. Mr. Choksy invites us; fd”give ameaning to the change in description to ‘tiled botique' in i956. alongwith the increase in the annual value. The change,, in my view, .issignificant. If means that the premises were first assessed by theMunicipal Council as business premises in 19567 Prior to that thepremises has been assessed as residential premises.
The inference to be drawn, if at all, from the description of thepremises as “tiled house” in 1941, has been rebutted according toMr. de Silva, by the fact that the premises are situated in the grandbazzar of Jaffna and that the name of occupier, appeal? ip the Registeras “Adam Bhai Stores”. It seems to me that these two factors bythemselves do not rebut the inference, in the absence of evidencethat there were no residential houses in Grand Bazzar Road, and thatthe premises were not used wholly or mainly for purposes of residence.
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Then there is evidence (Dl) that the defendant registered hisbusiness as a dealer in textiles and toilet requisites in 19S4. Mr. deSilva invites us to treat the year 1954 as the year in which thepreifiises were first assessed as business premises, in which event thestandard rent would still be less than Rs. 100/- p.m. The mereregistration by a tenant of a business under the Business NamdsRegistration Ordinance (Cap. 149) will not have the effect of convertingresidential premises into business premises. If the tenant desired tohavg the premises described in the Assessment Register as businesspremises and assessed as business premises in 1954, then there wasample provision in sections 235 to 239 of the Municipal CouncilsOrdinance for him to have taken the necessary steps. He had not done so.
The landlord has therefore discharged the burden of establishingthat the premises in question were assessed as business premises forthe first time in 1956, and that the standard rent on the date ofinstitutiori of action exceeded Rs. 100/- per month. This appeal isaccordingly dismissed with costs. ■
RATWATTE, J. – 1 agree.
COLIN-THOMfi, J. – 1 agree.