006-SLLR-SLLR-1983-1-CHARLOTTE-PERERA-v.-THEMBIAH-AND-ANOTHER.pdf
K2
[198311 Sn&L
Sri Lenka Law.Reports
CHARLOTTE PEBERAv.-
THAMBIAH AND ANOTHER
supreme court,
WANASUNDERA, J., RATWATTE, J i,
AND ABDUL CADER, J.
S.C.NO. 47/82, S.C.SPECIALLEAVE TO APPEAL NO. 69/82APPLICATION NO. C . A. (L. A. ) NO. 60/81,D.C. MOONT-LAVINIA,
CASE NO. 667/RE.
OCTOBER 10, 1983.
JLandlord and Tenant – Action in ejectiaent on the ground of…sub-letting – S 10 (5) of Rent Act No.7 of 1972 Appeal ,
SC .Charlotte Patera v. Thembfeh (Camarakoon, S. J.)363.
1972- Appeal – Execution pending appeal – S.23 of the
Judicature Act (as amended by Act No.37 of 1979 – S.763 (2) CPC (as amended by Act No. 53 of 1980) – 5, 761C.P.C. – S. 777 C.P.C. – S. 22 (11) of Rent Act.
In an action in ejectment against the. 1stdefendant on the ground of subletting, plaintiffobtained judgment for ejectment of the defendants.The 1st defendant appealed and the appeal waspending in the Court of Appeal.The plaintiffapplied for execution pending appeal.Both defen-dants objected but the District Judge allowedexecution pending appeal.The two defendants appliedto the Court of Appeal for leave to appeal andrevision. The Court of Appeal stayed executionpending determination of the appeal. The plaintiffappealed to the Supreme Court.
Bold (Sharvananda J. dissenting)
For a Court to stay execution pending appealthe judgment- debtor must show that execution mayresult in "substantial loss". Then and only thencan stay be ordered (S. 763(2} C.P.C.). Securitywill have to be given by the judgment-debtor fors.tay. Section 23 of the Judicature Act as amendedby Act Ho. 37 of 197g) permits the Court to stayexecution if it sees fit.
tinder . S. 761 C.P.C. the judgment-creditor'sright to move for execution is postponed till afterthe expiry of the appealable time.
Mo insuperable difficulty exists to restore theevicted judgment-debtor to possession in case hewins the appeal.In Section 777 C.P.C. there isample provision to restore the judgment-debtor topoeetts8ion in the interests ofjustiee.
-354.Sri Lanka Law Reports[1983J1 Sfi LR.
Vethamanicam v. Oawoodbhoy (1962)63 H.L.R. 548
overruled
Cases referred to
Vethamanicam vs. Oawoodbhoy (1962) 63 N.L.R. 548
Wickremanayake vs.SimonAppu(1972)76 N.L.R. 166.
Shell Transport Company vs. Ptssanayake (1924)26N.L.R.363. 365.
Appeal- from judgment of the Court of Appeal
Miss. Maureen Seneviratne with Hiltori Seneviratnefor piaintiff-appellant.
A.C. Gponaratne Q.C. with'S. RtBdras&rthy- for 1st
defendant – respondent.
Cur.6dv.vult.
July 29. 1983*
SAMA8AK0ON, C. J.,
The Appellant Instituted this action on12-07-1978 in the District Court of Mount Laviniaagainst the 1st > Defcndant-Petitioner-Responderit(hereinafter referred to as 1st Respondent) and the2nd Defendant-Respondent (hereinafter referred toas 2nd Respondent) to have than ejected from thepremises, in suit. ‘Die Appellant alleged that the1st Respondent had sublet a part of the premises tothe 2nd Respondent incontraventionof jjthe
provisions Of section 10(5) of the Rent Act No./ Of1972. The 1st Respondent denied the allegetidn.The 2nd Respondent admitted the sub-letting butdenieid that it was in contravention of the lav.After trial the learned District Judge enteredjudgment for the Appellant and ordered inter- aliathe ejectment of the two Respondents. Hie ‘1stRespondent appealed from this order to the Court ofAppeal and that Appeal is pending. On 27-08-1982the Appellant filed anapplicationfor the
. 355
SC ChartoMa Patera v. thambieh (Samarakoon, C. J.)
execution of. the decree pending appeal. Each of theRespondents filed objections to this application*After inquiry on 18-01-1983 the District Judge madeorder on 27-01-1983 allowing the application forexecution of writ. The Respondent then made twoapplications to the Court Of Appeal. They arplk>.CA/LA.6/83 being an application for leave toappeal and No^CA.210/83 being an application forrevision of the order of the. District Judge. Theywere heard together and by order delivered on 15thMarch, 1983, the Court of Appeal stayed – executionof the writ till final determination of the appeal.The appellant has appealed against the order inboth Applications and the Appeals in this Court arenumbered S.C.29/83 (Application for leave to■Appeal) and S.C.30/83 {Application for Revision).The two appeals were heard together and this ordercovers both.
At the hearing we had the benefit of anexhaustive argument from opposing Counsel on thelaw applicable to an application of this kind. Onaccount of the seeming confusion that appears tohave been caused by a succession of amendments Idesire to delve into the history of the legalprovisions touching this matter. Since theintroduction of the Civil Procedure Code (Cap.101)of 1889 these applications have been governed bythe provisions of Chapter UX. Section 761 reads asj&Lloun:-
"761. Execution of a decree stuftl not bestayed by reason only of an appeal having beenpreferred against the decree; but, if anyapplication be made for stay of execution ofan appealable decree before the expiry of timeallowed for appealing therefrom, the courtddck passed the decree may for sufficientaanse order that execution be staged:
356
Sri Lanka Law Reports[1983] 1 Sri LR.
Provided that no order, shall be made underthis section unless the court making it issatisfied –
that substantial loss may result to theparty applying for stay of execution unlessthe order is made;
that the.application has been made withoutunreasonable delay; and
that security is given by the applicantfor the due performance of: such decree ororder as may ultimately be binding upon him."
An analysis of this section reveals the following
ingredients:-
The filing of an appeal does not stayexecution of the decree appealed against. Thejudgment – creditor's right to apply for suchexecution was unquestionable.
The Court may stay execution if before, theexpiry of the appealable period the judgment-debtor without unreasonable delay makesapplication for stay of execution.
The court may then stay execution forsufficient cause if and only if –
such cause may result in substantial lossto the judgment-debtor, and
if security is given by the judgment-debtor to honour the ultimate decree or orderof the Supreme Courts
Section 763 stipulates that a sale of immovableproperty in execution of a decree for money which,is the subject of an appeal, shall be stayed on the
Charlotte Perera v. Thambiah iSamarakoon, C. J.)
357
SC
application of the judgment-debtor until the appealis disposed of provided security is furnished. Thejudgment-debtor's right to a stay on furnishingsecurity is absolute.
The above are provisions relating to the relief ofthe judgment-debtor. The rights of the judgment-creditor to execution of the decree pending appealis limited by the provisions of section 763. Therelevant portion of which reads as follows:-
"763. In the case of an application being madeby the judgment-creditor for execution of adecree which is appealed against, thejudgment-debtor shall be made respondent.
If, oa any such application, an order is madefor the execution of a decree against which anappeal is pending, the court which passed thedecree shall, on sufficient cause being shownby the appellant, require security to be givenfor the restitution of any property which maybe taken in execution of the decree, or forthe payment of the value of such property, andfor the due performance -of the decree or orderof the Supreme Court.
In terms of this section – _
The judgment-debtor must be madeRespondent to the application for execution ofthe decree.
If the judgment-debtor shows sufficientcause, then security shall be required of thejudgment-creditor as a pre-requisite for theexecution of the decree.
The Civil Procedure Code was repealed by theprovisions of the Administration of Justice LavNo.25 of 1975 but was revived by section 4(1) ofthe Civil Courts Procedure (Special Provisions) Lav
358
Sri Lanka Law Reports
[1983] 1 Sri LA
No. 19 of 1977 in terms of which "the provisions ofthe Civil Procedure Code shall for all purposes bedeemed to be, and to havet-been, in operation as ifthe same had not been repealed and shall continueto be the lav governing the procedure and thepractice in Civil 'Courts" . By the provisions ofsection 114 of the Civil Procedure Code (Amendment)Lav No.20 of 1977, section 671 and section 672 of,the Code vere repealed. Section 671 vas replaced asfollows:-
"761. No application for. execution of anappealable decree shall be instituted orentertained until after the expiry of the timealloyed for appealing therefrom:
Provided, however, that where an appeal ispreferred against such a decree, the judgment-creditor may forthwith apply for execution ofsuch decree under the provisions of section
763."
By this new section the judgment-creditor:sright to apply for execution of the decree vaspostponed till after the expiry of the appealabletime and such ^application had t-o be considered interms of section 673. The right of the judgment-debtor to apply v for stay of execution therebyceased to exist. He was left high and dry. Thereremained only his limited right in .section 673 ofshoving cause why security should be obtained. Theneame the Judicature Act No.2 of 1978. Section 23 ofChat Act gave the judgment-debtor a right of appealand nothing else. His predicament seems to havebeen noticed in the year 1979 and an attempt vasmade by the Judicature (Amendment) Act No.37 of1979 to give him relief. Section 23 vas repealedand substituted as follows:^
"23. Any party who shall be dissatisfied withany judgment, decree, or order pronounced by a
sc
359
District Court may (excepting where such rightis expressly disallowed) appeal to the Courtof Appeal against any such judgment, decree,or order from any error in law or in factcommitted by such court, but no such appealshall have the effect of staying the executionof such judgment, decree or order, unless the.District Judge shall see fit to make an orderto that ' effect, in which case the partyappellant shall enter into a bond, with orwithout sureties as the District Judge shallconsider necessary, to appear when requiredand abide the judgment of the Court of Appealupon the appeal."
This section did not go to the extent ofpermitting the judgment-debtor to make anapplication for stay of execution. It merely gavethe discretion to Court to stay writ of executionif it thought fit to make such an order. It wasonly in 1980 that the judgment-debtor's right ofapplication to stay of writ was restored, This wasdone by an amendment to section 763 by the CivilProcedure Code (Amendment) Act No.53 of 1980 whichreads as follows:-
"(2) The Court may order execution to bestayed upon such terms and conditions as itmay deem fit, where –
the judgment-debtor satisfies the court■ that substantial loss may result to the
judgment-debtor unless an order for stay ofexecution is made, and.
security is given by the judgment-debtorfor the due performance of such decree ororder as may ultimately be binding upon him."
From 1977 to 1979 the judgment-debtor was,without any remedy and for a further year and a
360Sri Lanka Law Reports[1983J1 Sri L.R.
half he could make no application himself for stayof writ.
It appears to me that the law as it stands todayis somewhat wider than the provisions of section761 of (Cap.86). Under tliat section a Court couldstay writ for "sufficient cause", but whatever thatcduse may be it must be shown to the satisfactionof Court that it may result in "substantial loss".Then, and only then , can the order be made. Todaythe matter is governed by the provisions of section23 of the Judicature Act (as amended by Act No.37of 1979) read with section 763(2) of the CivilProcedure Code (as amended by Act.No.53 of 1980).Section 23 permits the Court to stay writ ofexecution if it sees fit and section 763(2) permitsit to stay writ if the judgment-debtor satisfiesthe Court that substantial loss may result. The twoprovisions are not linked as in section 761.
Judgment in this case was delivered by theDisrict Judge on 21-05-82. On 03-08-82 theAppellant made an application for execution of writpending appeal. On 15-11-82 the 1st Respondentfiled objections pleading that "irreparable damage"will be caused if he is ejected from -the premises.I will refer to this in detail later in thisjudgment. The 2nd Respondent had apparently leftthe premises but he filed objections dn 11-10-82and requested Court to assist him to reoccupy thepremises he vacated. However he did not appear atthe inquiry into these objections. After inquirythe District Judge delivered order on 27-01-83allowing the execution of writ pending appefal. Itis difficult to gather from the order what precisereasons motivated the Judge to allow theapplication. I shall however do the best I cpn toanalyse it as 1 have the benefit of submissionsmade by Counsel for the Respondent as a guide. TheJudge refers to the case of 'Vethamanicam vs.
SCCharlotte Perera v. Thambiah (Samarakoon, C. J.)36J
Dawoodbhoy cited to him but makes only a passingreference to it. Counsel submits that this being atenancy case the oft quoted dictum of T.S.Fernando;
J.should have been accepted and followed by theJudge. The Court of Appeal was of the opinion thatin assessing whether substantial loss will resultto the tenant a primary consideration that wouldweigh against the issue of a writ was that set outin the dictum of Fernando, J. in the said case.That case was also a tenancy case in which thejudgment-creditor made an application to executewrit pending appeal in terms of section 763 CivilProcedure Code. Holding that the Judge should haverefused the application Fernando,J. reasoned thus:-
"What kind of security a landlord can offerwill compensate a tenant ejected from rent-controlled premises in the event of theSupreme Court in appeal holding against thelandlord and refusing ejectment? The most law-abiding landlord who has ejected one tenantand rented his premises to another may findhimself physically and legally incapable ofejecting the new tenant so that he may complywith the order of the Court of Appeal. I am ofopinion that, having regard to the nature ofthe suit and the relief available to asuccessful tenant-applicant, the learnedCommissioner should have refused thelandlord's application made for execution ofdecree."
There is no doubt that a landlord who letspremises governed by the Rent Act cannot eject thetenant in order to comply with the order of Court.But that is not the be all and end all of thematter. The law is not powerless to act in suchcases. If the Supreme Court reverses the decreeentered in favour of the judgment-creditor than thejudgment-debtor is entitled in law to a restoration
Sri Lanka Law Reports
[1983]l Sri L.R.
362
of the status quo. There is no longer a validdecree under which the judgment-creditor or anyoneclaiming under him could continue to occupy thepremises. "Justice therefore requires that thePlaintiff, who had been placed in possession inexecution of a decree which had turned out to beinvalid, should no longer be allowed to continue inpossession of the land." per H.N.G.Fernando, C.J.in Wickremanayake vs. Simon Appu (2). I would gofurther, where the process of Court has beenutilised to deprive a judgment-debtor of hisoccupation of premises pending appeal andsubsequently the decree upon which that process wasissued is invalidated by the order of the Supreme■ Court, justice requires that the judgment-debtor berestored to occupation by the removal of all thosein occupation, irrespective of the means by which,or the . rights upon which, they entered intooccupation. It is the duty of the Courts of Law toprovide such relief to the displaced judgment-debtor. Section 777 Civil Procedure Code is ampleprovision forsuch procedure.Fernando, J.
expressed his final conclusion thus –
"I am of opinion that, having regard to thenature of the suit and the relief available toa successful tenant-applicant, the learnedCommissioner should have refused thelandlord's application made for execution ofdecree."
Nature of the suit? Nowhere in his judgment-does he categorically state that in tenancy actionsby reason of their very- nature, applications forexecution of decrees pending appeals should not beentertained. As for "the relief available to asuccessful tenant-applicant" I have already indi-cated that he is not without adequate remedy. In. the result I am unable to agree with either thereasoning or the conclusion of Fernando, J. I amtherfore of the view that the decision in
SCCharlotte Perera v. Thambiah (Samarakoon, C. JJ363
; , >
Vethamanickam vs.. Dawoodbhoy (supra) is wrong, inlaw and must be overruled.
Counsel for the 1st Respondent submitted that aperson who enters into occupation of these premisespending appeal in ignorance of the fact that adecree in ejectment had been entered against theformer tenant of the premises cannot be ejectedunder the provisions of section 777 of the CivilProcedure Code. He cited the provisions of section22(11) of the Rent Act No.7 of 1972. This is aspecial provision made for cases in which a decreefor ejectment has been entered on the ground ofreasonable requirement, and therefore has norelevance to this case. In any. event I believe thisprovision became necessary because the provisionsof section 77/ of the Civil Procedure Code wouldotherwise have applied and the occupant would havebeen ejected.
The only other reason given by the DistrictJudge is that it is "unjustifiable to deprive" thePlaintiff of his success. This is hardly a reasonand I do not need to consider it. The Court ofAppeal has however given another reason besidesthat given in the judgment of Fernando, J. It tookinto account the fact that "the loss that mayresult to thePetitioner (1stRespondent) if
ejected at thisstage consistsof the
deprivation ofa residence forhisimmediate
occupation", asit "is a well knownfactthat there
is a shortage of residential houses in' the area."Perhaps there is a shortage of residential housesin that area. Perhaps he is unable to find one forhis immediate use in the same area. But why confineit to the same area? The 1st Respondent is apensioner drawing a pension of Rs.600/= per mensem.His financial resources are such that it would beimpossible to find alternative accommodation in thesame area. There is no evidence whatsoever that helooked for alternative accommodation within his
-364
Sri Lanka Law Reports
[1983J1 Sri LR.
means in any other area. The 1st Respondent did nothimself urge the reason given by the Court ofAppeal. He sought to take advantage of theprovisions of section 763(2) of the Civil ProcedureCode and endeavoured to prove substantial loss. Infact he pleaded irreparable loss. For this purposehe pleaded that if he is ejected he cannot findalternative accommodation. At the inquiry hemodified this plea and stated that it was difficultto find another, house ”all of a sudden on thisoccasion".He pleaded in his objections that he wasa pensioner paid Rs600/= per mensem and had noother source of income. Yet upon the Court makingorder allowing the issueof writ the1st
Respondent's Counsel promptly moved that the issueof the writ be delayed by one week and offered todeposit security in Rs.36000/= as security for suchdelay. He has failed to satisfy the Court thatsubstantial loss will result.
For the above reasons I would set aside theorder of the Court of Appeal and allow bothappeals. The Appellant will be entitled to one setof costs in this Court and in the Court of Appeal.
Wanasundera, J. I agree.
Wimalaratne, J. I agree.
Ratwatte, J. I agree.
sharvananda,j.
I regret my inability to agree with thejudgment of the Hon. Chief Justice. I
I agree with • the judgment of ..the Court ofAppeal that substantial loss will result to the 1stdefendant if Writ of Execution is not stayedpending the final decision of his appeal againstthe s'.Jgment of the District Judge, holding that
SC Charlotte Perera v, Thamoiah (Sharvananda, J.)365j
the 2nd defendant was a sub-tenant bf the 1stdefendant and that the plaintiff was entitled tohave the 1st defendant ejected from the premises insuit.
The premises in suit, namely No.l, CampbellPlace, Dehiwela, are rent-controlled and aresubject to Rent Act No. 7 of 1972. The 1stDefendant had been a tenant of the premises underthe plaintiff from March 1968. The plaintiffinstituted this action on 12.7.1978 for theejectment of the defendant on the ground that the"1st defendant on or about 1.5.78, in contraventionof section 10(5) of the Rent Act No. 7 of 1972,sub-let a part of the premises to the 2nddefendant." The 1st defendant denied the allegationand stated that the 2nd defendant was only aboarder and not a tenant. After trial the DistrictJudge entered judgment for the' plaintiff andordered that the defendant be evicted from thepremises in suit. The 1st defendant duly preferredan appeal to the Court of Appeal and that appeal ispending. On 27.8.82 the plaintiff filed anapplication for execution of the Decree in herfavour, pending appeal. The 1st defendant filedobjection to this application. In his affidavitfiled alon8 with his objections, the 1st defendantstated, loiter alia, that he, his wife and unmarrieddaughter ate the occupants of the house in suit,that he does not have any sub-tenants or baardecsin his house; and that if he was ejected from thepremises he could not find alternative acconmoda-tion; that he was a pensioner receiving an incomeof Rs. 600/- a month and.that h$ does not have anyother source of income and that if an order is notmade for the stay1* of execution of the Writ,irreparable damage would*' be caused to him. Theplaintiff did not file 'any 'counter affidavittraversing the facts stated by the-1st defendant inhis affidavit, nor did she choose to cross-examine
366
Sri Lanka Law Reports
[1983]1 Sri LB.
the 1st defendant on the truth of the avermentsstated by him in his affidavit.
At the inquiry held into the application forexecution» Counsel of the plaintiff appears to haveconfined her submissions to the question thataccording to the Judicature Act, the Court had noauthority to suspend the Writ of Execution and thatthe facts relied on by the 1st defendant were "notrequired for the Writ of Execution" and that muchdamage would be caused to the plaintiff if the Writof Execution was not issued., though the nature orextent of the damages was nowhere specified orindicated. After inquiry,, by his order dated27.1.83, the District Judge allowed the plaintiff’sapplication for the issue of Writ. The 1stdefendant then moved the Court of Appeal by way ofan application for Leave to Appeal and by way ofRevision to have the order of the District Judgeset aside. The Court by its order delivered on15.3.1983 set aside, the order of the District Judgeand directed Stay of Execution of the Writ tillfinal determination of the 1st defendants appeal.From the said order the plaintiff has preferredthis appeal.
I agree with the comment of _the Court ofAppeal, respecting the order of the District Judgeallowing execution that "there is no attempt.whatsoever by the learned District Judge to assessthe loss (which I think is very substantial) thatmay result to the petitioner, if he were ejectedpending the appeal that has been filed by him.There has thus been a failure on the part of theJudge to properly exercise the discretion vested inhim."
In my view the District Judge has completelyfailed to address his mind to the relevantquestions involved in an inquiry into Stay ofExecution pending appeal. There is not even a
SC.'Charlotte Perera v. Thambiah (Sharvananda, J.)367
-i■———■—-—
reference in his order to the relevant provisionsof law – section 763(2) of the Civil Procedure Codeor to section 23 of the Judicature Act. The onlyreason that appears to have motivated the District. Judge to allow the plaintiff's application is to 1>egathered from the following excerpt:
"today no one can say what its (appeal's)results will be. Sometimes the defendant mightsucceed, sometimes he may lose, why should theplaintiff be deprived of his present successor victory. I am of the opinion that it isunjustified to deprive the plaintiff of hissuccess. I hold that it is highly unfair todeprive the plaintiff of his success which heachieved after having fought for such a longtime on the presumption that he will ' lose inthe end, in the circumstances I allow theapplication".
In my view, no value whatsoever can be attachedto this judgment of the District Judge.
Prior to the coming into operation of theAdministration of Justice Law No. 44 of 1973, on1,1.74, the provisions of law relating to 'theexecution of a decree under appeal and to the Staythereof are to be found in sections 761 to 764 ofthe Civil Procedure Code. (Chap. 101' .of the 1956Legislative Enactments) and section 73 of theCourts Ordinance (Chap.6). It is not necessary forme to refer to the subsequent legislative repealsand amendments of these provisions as .they havebeen set out fully in the judgment of the ChiefJustice. In my view the law today relating, to thejurisdiction■of the District Court, to. stay execu-tion of judgments pending appeals are to be foundin section 23 of the Judicature Act No,2 of 1978,as amended by section 2 of the Judicature Amendment.Act No. .37 of 1979 and sections 761 and 763(1) &(2) of the present Civil Procedure Code, Chap. 101
368Sri Lanka Law Reports[198311 Sri LR.
as amended by Civil Procedure Code Amendment No. 53of 1980.
Section 23 of the Judicature Act No.2 of 1978as amended by Judicature Amendment Act. No. 37 of1979 provides as follows :
"Any party who shall be dissatisfied with anyjudgment, decree or order pronounced by aDistrict Court may (excepting where such rightis expressly disallowed) appeal to the Courtof Appeal against any such judgment, decree ororder from any error in law or in factcommitted by such Court, but no such appealshall have the effect of staying.the executionof such judgment or decree or order, . unlessthe District Judge shall see fit to make anorder to that effect. In which case the partyappellant shall enter into a bond, with orwithout sureties as the District Judge shallconsider necesssary, to appear when requiredand abide by the judgment of the Court ofAppeal, upon the appeal."
Section 763 of the Civil Procedure Code, asamended by Act No.53 of I960 reads as follows;
763 (1) "In the case of an application beingmade by the judgment-creditor for execution ofa decree which is appealed against, thejudgment-debtor shall be made respondent. If,on any such application, an order is made forthe execution of a decree against which anappeal is pending, the Court which passed thedecree shall, on sufficient cause being shownby the appellant, require security to be givenfor the restitution of any property which maybe taken in execution of the decree, or forthe payment of the value of such property, andfor the due performance of the decree or orderof the Supreme Court".
SCCharlotte Perera v. Thambiah fSharvananda, J.)369 s
i 1—■ . »
(2) The Court may order execution to bestayed upon such terms and conditions as itmay deem fit, where –
the judgment-debtor satisfies the courtthat substantial loss may result to thejudgment-debtor unless an order for stay ofexecution is made and
security is given by the judgment-debtorfor the due performance of such decree ororder as may ultimately be binding upon him"
Garvin J. pointed out in Shell Transport. Companyvs. Dissanayake .(3)
"The leading principle relating to the issueof an execution of decree under appeal is thatit shall not be stayed by reason only of anappeal having been preferred against thedecree. These are the opening words of ChapterLIX of the Civil Procedure Code, which dealswith the execution of decrees under appeal"
Though the opening words of Chap.LIX (section 761)are not present in the current amended CivilProcedure Code, this principle is in my view keptalive by section 23 of the Judicature Act, asamended by Act No.37 of 1979, and applies generallyto executions of decrees pending appeal. Thisprinciple is however subordinated in its appli-cation to another fundamental principle, that isenshrined in section 763(2) of the Code, thatexecution may be stayed if the appellant satisfiesthe Court that substantial loss may result to himthereby. It is thus competent for the Court toorder stay of execution on the application of theparty appealing, on its being satisfied of theprobability of substantial loss resulting to theappellant and on his giving the necessary security.The District Court, thus may make order staying
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Sri Lanka Law Reports
[1983] 1 Sri LR.
execution "when it shall see fit to make an – orderto that effect"-vide section 23 of the JudicatureAct, as amended by Act No. 39 of 1979 or when it issatisfied that substantial loss may result to himunless an order for stay of execution is made andhe gives security for the due performance. of such
decree or order as may ultimately be binding uponhim – vide section 763(2) of the Code.
Today's legal position thus appears to me to bethat it is not competentfor theCourttostay.
execution of the decree merely on the ground thatthe judgment-debtor has preferred an appeal againstit, but it is competentfor, theCourttostay
execution of a decree against which an appeal ispending, if the judgment-debtor satisfies the Courtthat substantial loss may result to him unless anorder for stay of execution is made and furnishesthe necessary security for the due performance ofsuch decree, as may ultimately be binding upon him.It is significant that the words used in section763(2) are "the .Court may order execution to bestayed." It is not absolutely obligatory to makethe stay order even if the judgment-debtorsatisfies the conditions prescribed by section763(2), (a)&(b). If such an order would operategrave injustice to the judgment-creditor, if on abalance of the claims of judgment-debtor andjudgment-creditor, the judgment-creditor wouldsuffer substantial loss in equal or greater measurethan the judgment-debtor the Court may be justifiedin refusing to make a stay order under section763(2); a discretion to make such an order isvested in the Court to be Exercised not arbitrarilybut judicially As the justice of the case maydefnand. In a case where decree for ejectment isentered in favour of the plaintiff on the ground ofhis reasonable requirement, the Court may well bejustified in refusing Stay of Execution undersection 763(2).*
-SC— — . Charlotte Perera v. thambiah (Sharvananda, J.). 371;
'- i
In the present case, the plaintiff came intoCourt seeking ejectment of :the defendant on thealleged ground that the latter had sub-let a partof the rented premises, which he had been occupyingfrom 1968. The plaintiff resides in her ownseparate house and dbes not require the premises insuit for her own occupation or for the occupationof any member of her family. She will suffer nohardship or loss by execution being stayed pendingappeal. On the other hand the 1st defendant-tenantwill suffer grave hardship and loss, by beingdislodged from the premises and- deprived of theroof which the Rent Act had secured for him from1968. The 1st defendant has in his affidavitpraying for stay of execution stated that he couldnot find alternative accommodation.-. The plaintiffappellant has not traversed this statement, may be,for the good reason which the Court can take notice,of, namely, that it is well nigh impossible for aperson of the limited financial means of the 1stdefendant to find alternative acconmodation. Thenon-availability of housing acconmodation to aperson of the class of the 1st defendant within hispurse strings is a notorious fact. It is in thisperspective that the loss which will result to the1st defendant by the issue of execution will, haveto be viewed.
A point was made of the fact that the 1stdefendant was ready and willing to -deposit a sum ofRs.36000/- as security. This circumstance shouldnot be counted against him. It drives home thedesperate plight of the tenant. It is nof proof ofthe fact that with this sum! of Rs. 36000/-, the 1stdefendant could have found alternative accommoda-tion. Section 9 of the Rent Act makes it unlawfulfor anyone to pay any premium or any amount asadvance of rent exceeding the authorised rent for aperiod of three months. It may be that the 1stdefendant may -be able to raise a loan of Rs.36000/-
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[1983] 1 Sri LR.
and give the security, as condition for the dueperformance of the decree that may be ultimatelybinding upon him. That sum is not lost to him.ltwill be released to him when his security bond isdischarged; but a premium given for alternativeaccommodation will invariably be lost to him. Inany event no evidence has been placed before theCoiirt that this premium of Rs. 36000/- will besufficient today to secure alternative accommoda-tion, leave alone the question of purchasing anypremises for that amount.
In any view the dispossession and thedisturbance of the status quo ante which the issueof execution will involve, will inevitably resultin substantial loss to the 1st defendant – he andhis family will be turned out of their home and beleft without a roof over their head. On the otherhand the plaintiff-landlord will not loose anythingif the Writ is stayed pending appeal. I agree thatthe fact that the decree-holder will suffer noloss, if the execution is stayed, is not sufficientground for the stay of execution, but, on the otherhand the fact that the judgement-debtor will suffergrave loss if the execution is not stayed is veryrelevant – it makes a vital difference to thesituation. The legislature has, in the interests ofjustice, provided that such a circumstance is asufficient ground for stay of execution pendingappeal. Hence I agree with the conclusion of theCourt of Appeal that on the undisputed facts ofthis case the 1st defendant-tenant has. establishedthat he will suffer substantial loss if the Writ isnot stayed.
Reference was made in the course of theargument to the judgment of T.S.Fernando, J.,inVedajnani ckam vs. Dawoodbhoy (1) . In that case thelandlord made an application under section 763 ofthe o1d Civil Procedure Code (which correspondsto ~tion 763(1) of the present code as amended by
SC Charlotte Perera v. Thambiah (Sharvananda, J.) .373 . -t
Act No 53 of 1980) to execute the decree. Eventhough considerations arising under section 763 (2)of the Code were not agitated in that case and theonly question was the adequacy of security, T.S.Fernando, J. refused the application for execution,stating,
"what kind of security a landlord can offerwill compensate a tenant ejected from rentcontrolled premises, in the event of theSupreme Court in appeal holding against thelandlord and refusing ejectment. The most lawabiding landlord who had ejected one tenantand rented his premises to another, may findhimself physically and legally incapable ofejecting that new tenant, so that he maycomply with the order of the Court of Appeal.I am of the opinion that having regard to thenature of the suit and the relief available tothe successful tenant-applicant the learnedCommissioner should have refused the land-lord's application made for the execution ofdecree".' I
I agree with the Chief Justice that the lawis not powerless to act in the cases referred to byT.S.Fernando, J., and that if the Supreme 'Courtreverses the decree entered in favour of thejudgment-creditor then the judgment-debtor isentitled in law to the restoration . of the statusquo ante. But one cannot overlook the fact that therestoration remedy, in the nature of thingsinvolves long frustrating delay that will renderthe relief largely illusory and discourage adisplaced tenant from pursuing his appeal as theappeal will be purposeless. A tenant cannotreasonably be expected to make short-shiftarrangments in the meantime without suffering gravehardships. In my view the probability that thelandlord may rent out his premises to another or
ISrr Lanka Law Reports
[1983] 1 Sri LR,
374
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1 • :that the landlord may demolish the premises are notconsiderations irrelevant to the inquiry, whethersubstantial loss may'result to the tenant unless an1order for stay of.execution was made under section763(2);
I dismiss the appeal No, 29/83 with costsand dismiss appeal No.30/83 without costs.
. Appeal allowed.