K. V. K. THEIVENDRARAJAH, Appellant, and A. L. M. SANOON, Respondent

003-NLR-NLR-V-71-K.-V.-K.-THEIVENDRARAJAH-Appellant-and-A.-L.-M.-SANOON-Respondent.pdf


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Theivendrarajah v. JSanoon
Present: Slrlmane, J.IC. V. K. THEIVENDRARAJAH, Appellant, and A. L. M. SANOON,Respondent
S. C. 1 of 1966—C. R. Colombo, 87698j RE
.Rent-controlled premises—Termination oj nctarially executed lease—Continuationof occupation by the tenant—Bight oj landlord to demand authorised rent—RentRestriction Act (Cap. 274), ss.3 (1), 14.
Where, after the termination of a notarially executed lease, the tenantcontinues to remain in occupation of the premises by virtue of the RentRestriction Act, the landlord is entitled to raise the rent to the full amountpermitted by the statute. Accordingly, if the tenant fails to pay the authorisedrent, he is liable to be ejected on the ground of arrears of rent.
SIRTMANE, J.—Theivendrarojah v. Sanocn
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PPEAL from a judgment of the Court of Requests, Colombo.
•*r
C. Ranganathan, Q.C., with 8. Sharvananda and C. Chakradaran, for ,/the Defendant-Appellant.
H. W. Jayewardene, Q.C., with H. D. Tambiah and N. 8. A. GoonetiUeke»for the Plaintiff-Respondent.
Cur. adv. vuli.
August 21,1967. Sibimane, J.—
The defendant was the lessee of the premises in question on deed oflease, P4, for a period of 5 years from 1.1.1957 to 31.12.1961. Theplaintiff purchased these premises during the subsistence of the leaseand tire defendant thus became the. lessee of the plaintiff. The defendantdid not leave the premises on the expiry of the lease, but, seeking theprotection of the Rent Restriction Act, remained in occupation as theplaintiff’s “ statutory tenant ”. (I use this term for the sake ofconvenience, though it has been looked upon with disfavour at times.)
The rent payable according to the terms of the lease was Rs. 45 permonth (the lessee had also to pay the rates).
By P14, dated 9.4.1962, the plaintiff requested the defendant to payRs. 86‘GG per month (which the learned Commissioner has found to bethe authorised rent of the premises) as damages. He was informed thathe should not pay the rates. The defendant, however, did not pay therent demanded by the plaintiff, but continued to pay at the rate stipulatedin the lease, i.e. Rs. 45 per month. The plaintiff sued him for ejectmentboth on the ground of arrears of rent and on the ground that the premiseswere reasonably required by him for the purposes of his business. Hehas succeeded on both grounds and the defendant has appealed.
In view of the provisions of the amending Ordinance No. 12 of 1966,it is admitted that the decree is unenforceable in so far as it is based on“ reasonable requirement ”.
The only question is whether the defendant has been in arrears ofrent.
It was conceded that if the rent or damages which the defendantwas liable to pay was Rs. 45 per month he was not in arrear, but thathe was in default if his liability was to pay Rs. 86‘GG per month. Thequestion for decision therefore is this—Is a landlord entitled to demandtiie authorised rent from a tenant after the original contract hasterminated ?
For -the defendant, reliance was placed mainly on the decisions inthree cases. The first of these was Sideek v. Sainambu Natchiya l, whereGratiaen J. in the course of his judgment said, that the tenant enjoysthe statutory right of occupation (after the expiry of a lease) so long as
*(1964) 65 N. L. B. 3G7.
14Si Kl MANE. J.- —Theivendmrajfth v. Simoon
he |lavs the montlily rent t; at the criminal contractual rate But inthat case the present question did not arise. In fact tile tenant hadoffered to pay rent even at a higher rate than the contractual rate, butthe landlord refused to accept any rent uhat.soe.ver. In thosecircumstances the learned .Judge held that the lenant was protected ifhe pi?i«l at the contractual rate.
In the next ease. JJrlUn r. llornnlirjn.hi ', it was decided that a decreefor sale under the old Partition Ordinance did not affect a month tomonth tenancy, and the tenant could not be ejected if he continued topay rent, at the old contractual rate io the purchaser at the partitionsale. There again the present question did not arise.
In the last case. Ywiirc] Chetty r. Abdu 2. the agreed rent was Its. 18per month. The landlord raised it to Its. _!V1S during the subsistence ofthe contract, and the tenant refused to agree to pay this amount. Wcera-sooriya J. held that the landlord could not unilaterally raise the rentto a sum higher than that agreed upon. The landlord had thereaftergiven the tenant a notice to quit thus terminating the contract. Anissue had been raised in the lower Court whether there was a valid termi-nation of tlie contract, which issue had been answered in the affirmative..No argument had been addressed in appeal on that point and in the coureeof the judgment Weeiasooriya J. said that he would decide the case onthe footing that there was a valid termination of the contract. But,there is nothing in the judgment to indicate that the learned Judgeaddressed his mind to the question whether the landlord could haveincreased the rent (if such increase was legally permissible) after thetermination of the contract. In fact that question did not arise at all,and the appeal was decided on an entirely different ground. Thelandlord in that ease having consistently refused to accept Rs. 18 permonth as rent had later called upon the tenant to pay for a number ofmonths at that rate, within a very short time and filed the action acouple of days after the period granted to the tenant had expired. Inthose circumstances it was held that the tenant, was not in arrears ofrent for a month after it had become due.
Section 3 (1) of the Rent Restriction Act (Chap. 274) empowers alandlord to increase the rent up to the authorised rent, but there is nosection in the Act which is applicable to the present question. Section14 is not helpful in dealing with this problem as it only provides for thecontinuance of the original contract of tenancy where an action forejectment has been dismissed by reason of the provisions of the Act.
Section 15 of the English Increase of Rent and Mortgage Interest(Restriction) Act, 1920, and the decisions thereon are helpful. Therelevant part of that section reads as follows :—
Section 15 (1) “ A tenant who by virtue of the provisions of this Actretains possession of any dwelling house to which this Act appliesshall, so long as he retains possession, observe and be entitled to the1 (1956) 67 N. L. B. 327.„ ■ (1953) 65 N. L. B. 67.
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SIRIMANE, J.—Thrivendrarajah v. Sattoon
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benefit of all the terms and conditions of the original contract of
tenancy, so far as the same are consistent with the provisions of thisAct . .
In PhiUips v. Copping 1 it was held that the landlord of a dwellinghouse may raise the rent to the standard rent, provided that on terrai*noting the tenancy due notice of his intention to do so has been given tothe tenant. In the course of his judgment Manghan, L.J. said, “ Sincethe permitted increases are additions to the standard rent tlicro is nothing-to show that the common law right of the landlord to terminate anexisting tenancy and to fix the rent for the now tenancy at the staudardrent is interfered with
In Dean v. Bruce 2. Denning L.J. said at page 928, *' Once thecontractual tenancy is at an end and the tenant remains in possessionby virtue of the statute, the rent of the house is regulated by thestatute and is not affected by terms or conditions or estopjxds. Ongiving proper notice the landlord can raise the rent to the full amountpermitted by the statute ”,
In the local case, Nadarajak w. Naidu 3, it was held that where a landlord,before claiming from his tenaut a permitted increase of rent in terms ofsection 0 (1) (b) of the Kent Restriction Act, sells the premises, thepurchaser is entitled to claim the permitted increase from the tenant.An argument advanced in that case that a permitted increase must beagreed upon between the new landlord and the tenant was rejected.
After a contract of tenancy is terminated, a tenant who wishes toremain in possession must pay the rent which the landlord may lawfullydemand. He cannot be permitted, in my view, to seek the protectionof the Rent Restriction Act and remain in possession, and deny thelandlord the latter’s right under that same Act to charge the authorisedrent. If, for instance, a lease for a long period is ended by effluxion oftime, when rental values of properties are very different from thosethat prevailed at the time the lease was entered into, it M ould be manifestlyunfair to permit the tenant to remain in possession and insist on thelandlord accepting the rent payable under the defunct contract, anddeny the landlord the right to claim the rent which the law authoriseshim to chaige.
At a late stage of the argument, in fact, in his reply to Counsel forthe plaintiff-respondent, Counsel for the defendant-appellant submittedthat the landlord could not ask the tenant not to pay the rates and paythem himself, and further that as the tenant hod, at a certain stage,sent Rs. 85 per month to the landlord, the arrears were very small, andthat the sum of Rs. 540 paid at the commencement of the lease shouldbe taken into account to cover this sum.
* 152 Lmo T imea Reports, page 175.1 (1951) 2 A. E. R. page 026.
_ • [1905) 68 N. L. R. 2S0.
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Nadaraji*A v. Na>farajah
Once the lease expired the defendant was in the position of a monthlytenant. There was nothing to prevent the landlord from deciding topay the rates himself and there can be several good reasons for thelandlord choosing to do so. The tenant took a risk when he decided toignore the landlord’s directions.
I might state that on the question as to whether the tenant was entitledto set off any rent due against the sum of Rs. 540, it seems to me fromthe terms of the lease that this sum was a “ deposit ” by way of securityfor the due performance of the terms of the lease, and that such a depositdid not, in the absence of an express agreement, relieve the tenant of hisobligation to pay the current rent for each month. (See Kanapalhypillaiv. Dharmadasa *). However that may be, even having given credit forthis sum, the learned Commissioner has correctly found that the tenantwas still in arrears of rent within the meaning of the Act.
The appeal is dismissed with costs.
Appeal dismissed.