Sri Lanka Law Reports
(19811 1 S. L. R.
ISMAIL J.. WEERARATNE J. ANDSHARVANANDA J.,
D.C. COLOMBO 13388/L,
Landlord and tenant — Lease of Partnership business — Subletting – Ss. 10(7) and 28 ofRent Act.-
The 1st defendant Haniffa was the tenant of the premises in suit under Akbar AM whowas the owner. In 1971 Akbar AM transferred the premises to the plaintiff who thusbecame the landlord. Prior to this sale the 1st defendant who was carrying on a hardwarebusiness in the premises in suit in 1970 leased the business to the 2nd defendant fortwo years from 1.1.1970. On the expiry of the lease, the 1st and 2nd defendants bydeed entered into a partnership in respect of the business. The plaintiff's contention wasthat the partnership agreement regarding the hardware business was a cover for subletting without his consent Further the tenant had ceased to occupy the premises formore than 6 month?.
Section 10(7) of the Rent Act is a bar to a suit on sub letting where the premiseshad been sublet prior to the date of commencement of the Rent Act (13.1.1972)so long as that person continues to be a subtenant of the premises so sub-let. Theword "that person” in s. 10(7) of the Rent Act mean the sub-tenant and not thetenant.
Section 28 of the Rent Act provides for the ejectment of a tenant of any residentialpremises who has ceased to occupy same for six months.This section does not applyto business premises as here.
Cases referred to :
Walles v. Hector Silva (1978) 70 NLR 308
Thaha v. Sadeen (1968) 72 NLR 142
Paranavithane v. Themanis (1970) 77 NLR 185
Seyed Mohamed v. Meera Pillai (1967) 70 NLR 237
Samsudeen v. Ibrahim Marikkar S. C. 88/72 – SC minutes of 10.6.1978
Appeal from judgment of the Court of Appeal
H. L. de Silva, Senior Attorney-at-Law, with S. Mahenthiran for Defendants-Appellants.K. N. Choksy, Senior Attorney-at-Law with Ronald Peiris for Plaintiff-Rspondent.
Cur. adv. vult.
Haniffa v. Razick
November 20, 1981
The Plaintiff-Respondent instituted this action seeking toeject the Defendants-Appellants from premises No. 236,Bandaranaike Mawatha, Colombo 12, on the ground that the1st Defendant-Appellant had without the written consent orauthority of the landlord sub-let the premises in suit to the2nd Defendant-Appellant in contravention of the provisionsof the Rent Act, No. 7 of 1972. The Defendants filed answerdenying the several averments in the plaint.
It is common ground that the premises in suit are governedby the provisions of the Rent Act, No. 7 of 1972, and that thepremises are "business premises".
Long prior to December 1971, one Akbar Ali, who was theowner of the premises in suit, had let the premises to the 1stDefendant and the 1st Defendant was carrying on a hardwarebusiness in the premises. By deed No. 1719 dated 3rd Decem-ber 1971, Akbar Ali sold and transferred the premises to thePlaintiff and the Plaintiff thus became the owner and landlordof the said premises.
By indenture of lease No. 2797 dated 5th December 1969,the 1st Defendant leased the hardware business that he wascarrying on in the premises to the 2nd Defendant for a periodof two years, commencing from 1st January 1970, on a monthlycommission of Rs. 150/-. On the expiry of the said lease, the 1stand 2nd Defendants entered into partnership agreement No. 3194dated 25th January 1972 to carry on the said business of hardwaremerchants in partnership in the premises in suit.
The contention of the Plaintiff was that the aforesaid deedsNos. 2797 and 3194 were a cover for sub-letting of the premisesby the 1st Defendant to the 2nd Defendant and that the said sub-letting of the premises was in contravention of the relevant pro-visions of the Rent Act of 1972, in that the written consent of theformer landlord Akbar Ali or of the present landlord, namely thePlaintiff, had not been obtained.
After trial, the learned District Judge by his judgment held –
(a) that the partnership agreement No. 3194 between the 1stand 2nd Defendants was a ruse to evade the prohibitionagainst sub-letting;
Sri Lanka Law Reports
(1981) 1 S. L. R.
that the Plaintiff at the time of his purchase knew thatthe premises had already been sub-let;
that since the 1st Defendant had already sub-let the pre-mises without the permission of his landlord Akbar AMprior to the purchase of the premises by the Plaintiff,the Plaintiff was not entitled to eject the 1st Defendanton the ground of the sub-letting, which had been donewhen he was not the landlord. — Vide Judgment of Siri-mane J. in Walles v. Hector Silva ^
that in any event, the Defendant was protected by theprovisions of section 10(7) of the Rent Act.
The Plaintiff appealed from the said judgment to the Courtof Appeal and the Court of Appeal by its judgment dated 15thJanuary 1981 allowed the appeal.
The Court of Appeal had two questions to decide, viz:
Whether a purchaser is entitled to maintain an actionfor sub letting prior to his purchase.
Whether section 10(7) of the Rent Act was a bar to thePlaintiff maintaining his action.
On the first question there is a conflict of views. As against theview of Sirimane J. a contrary view has been taken in Thaha v.Sadeen ^ and in Paranavithane v. Themanis . it has also beenheld that sub-letting is a continuing breach of a statutory pro-vision. (Seyed Mohamed v. Meera Pi//ai_ ^ and Samsudeen v.Ibrahim Marikkar ^) In view of our decision on the second ques-tion, it is not necessary for us to go into the controversy involvedin the first question and hence we do not express any view on thefirst question.
Section 10(7) of the Rent Act reads as follows:
"Nothing in sub-section (2), sub-section (5) or sub-section
shall apply to the sub letting of any premises or part thereofwithout the prior consent in writing of the landlord, where suchpremises or part thereof had been sub-let prior to the date ofcommencement of this Act to any person, so long as that personcontinues to be a sub-tenant of the permises or part thereof."
The Court of Appeal has erred in taking the view that the aboveprovision does not apply to the facts of the present case as the
Hartiffa v. Razick
tenant had already vacated the premises after putting his sub-te-nant into occupation thereof. This construction of this section isnot tenable. The condition precedent for the applicability of thissection is that "that person continues to be the sub-tenant of thepremises or part thereof. "That person" in this context meansthe sub-tenant and not the tenant. It is not disputed that at allrelevant times, the 2nd defendant, the alleged sub-tenant, hasbeen in occupation of the premises in suit. In our view, the judg-ment of the Court of Appeal on this question cannot be sustained.
The Court of Appeal has further invoked section 28 of the RentAct and has held that that section applies to the facts of this case.Section 28 provides for the ejectment of a tenant of any residen-tial premises who has ceased to occupy such premises for sixmonths. This section has, ex-facie, no application to "businesspremises”. Since the premises in question are 'business premises",section 28 has-no application to the facts of this case.
The appeal is allowed. The judgment of the Court of Appeal isset aside and the plaintiff's action is dismissed with costs in allthree Courts.
Ismail, J.I agree.
Weeraratne, J.I agree.
HANIFFA v. RAZICK