008-NLR-NLR-V-75-G.-P.-C.-DE-SILVA-Appellant-and-S.-R.-V.-REDDIYAR-and-others-Respondents.pdf
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dt Silva v. Reddiyar
1971Present: Sirlmane, J., and Weeramantry, J.G. P. C. DE SILVA, Appellant, andS. R. V. REDDIYAR and others, Respondents
3. G. 426/68 {F)—D. G. Matale, 1410/LLjase—Condition therein prohibiting subletting of the leased premises—Subsequentsale, by lessee, o) the business carried on by him in the premises—Rights ofparties.
Where e building is leased to a person to carry on a business and the leasecontains a condition that the lessee shall not sublet the premises, the lessee isnot entitled to circumvent the condition by purporting to sell the businessto a third party.
SIRIMANE, J.—de Silva v. Seddiyar
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ApPEAL from a judgment of the District Court, Matale.
T.B. Dissanayake, for the plaintiff-appellant.
Sambandan, for the defendant-respondent.
Car. aim. mU.
June 16,1971. Shumans, J.—
On a deed of lease (PI) dated 27.5.66, the plaintiff had leased premisesNo. 217, Trincomalee Street, Matale, to one Natchiappen for a periodof two years commencing from 7.6.66. Natchiappen was not in Ceylonon the day PI was executed, and his Attorney contracted on his behalf.
The plaintiff stated in evidence that he hnew Natchiappen, who hadhad dealings with his father during the latter’s life time. Though theplaintiff was prepared to lease his building to Natchiappen to carry on abusiness, one could infer from his evidence and conduct, that he wasnot prepared to lease it to other traders.
The first condition in the lease reads as follows
“That the lessee shall not assign this lease or sublet the said
premises without the consent in writing of the lessor.”
By deed P2 dated 1.6.66, Natchiappen (through .his Attorney)purported to sell “ the business presently carried on at premises No. 217,Trincomalee Street ” to the defendants. It is the plaintiff’s case thatP2 was a mere “ blind ” and that Natchiappen had in reality subletthe premises, contrary to the conditions in PI.
The plaintiff had apparently learnt that an effort was being madeto oiroumvent the provisions in PI; and he says in evidence (which isnot contradicted) that he wrote to Natchiappen on 27.7.66 not tosublet the premises. The certificate issued under the Business NamesRegistration Ordinance (P3) shows that Natchiappen was the sole ownerof the business from 1959, that the defendants were registered as theowners from 1.6.66, and that on 28.7.66 (t.e. the day alter the plaintiffwrote to Natchiappen) a change in ownership was notified by addingNatchiappen also as one of the owners. Natchiappen in fact was inIndia, and had no occupation at all of the premises. It was thedefendants who went into occupation of the premises and were incomplete control thereof. The plaintiff treated them as trespassers,and when they refused to quit on being asked to do so, filed this actionfor a declaration of title, ejeotment, and damages.
It is of some significance that, when the case came up for trial in thetower court after the period of two years in PI had elapsed, the defendantswere still in occupation of the premises and though none of them gaVa10- Volume LXXV
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Panawal Korale Multi-purpose Co-operative Societies Union Ltd.,
Eheliyagoda v. Herath
evidence at the trial, they were still resisting the plaintiff’s claim. Theappeal is still being argued on their behalf nearly three years later.
I think it is clear from the evidence that P2 was written in the formof a deed of sale merely to conceal the true nature of the transactionbetween Natchiappen and the defendants. In construingya documentlike P2, the Court should take into account its true intent aiTd purposeand the effect it has on the rights of parties.
I do not think that the case of Charles Appuhamy v. Abeysekera1(56 N.L.R. 243) relied on by the District Judge is of any assistance tothe respondents. In that case the management, control and conductof the business was “ leased " by A to B for a certain term of years.It was held that at the end of the specified period, B could not claimto be a tenant, entitled to protection under the Rent Restriction Act.The question of subletting or breach of a condition did not arise in thatcase.„r
I set aside the judgment and decree entered in this case, and enterjudgment for the plaintiff as prayed for with costs both here andbelow.
Weebamahtby, J.—I agree.
Appeal allowed.