KARUPPANNAPILLAI AND TWO OTHERS v. VISVANATHAN AND SEVEN OTHERS

019-SLLR-SLLR-2010-V-1-KARUPPANNAPILLAI-AND-TWO-OTHERS-v.-VISVANATHAN-AND-SEVEN-OTHERS.pdf


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KARUPPANNAPILLAI AND TWO OTHERSV. VISVANATHAN AND SEVEN OTHERSSUPREME COURT
DR. SHIRANI A. BANDARANAYAKE, J.
AMARATUNGA, J., ANDSRIPAVAN, J.
S.C. (APPEAL) NO. 10/2007
S.C. (SPL.) L. A. NO. 233/2006
C.A. (WRIT) APPLICATION NO. 679/2003
JULY 8th, 29™ 2009
AUGUST 31™ 2009
Writ of Certiorari – Divesting of a house – Ceiling on Housing PropertyLaw, No. 1 of 1973 – Section 9 – Procedure to be followed by a tenantwho wishes to purchase a surplus house – Section 17A – Divestingthe ownership of houses vested in the Commissioner – Concept oflegitimate expectation.- Locus standii
The Appellants are the Trustees of the Sammangodu Sri KathirvelayuthaSwamy Temple and were the owners of the house which is the subjectmatter of this appeal.
In terms of the Ceiling on Housing Property (CHP) law, the Appellantshad made a declaration to the Commissioner of National Housing. Onthe basis of the said declaration, the said premises was vested as a sur-plus house by the Commissioner of National Housing. The Appellantshad thereafter appealed against that order to the Board of Review ofCeiling on Housing Property. The original Respondent’s (KandiahVisvanathan’s) father had been the tenant of the said premises. At thetime the appeal was taken for hearing before the Board of Review, theRespondent’s father and his mother too had died and their son KandiahVisvanathan appeared before the Board of Review.
The Board of Review by its order dated 26.06.1978 had dismissed theappeal and decided that the Respondent, Kandiah Visvanathan, is thetenant of the said house.
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KaruppannapSlai and two others v. Visvanathan
and seven others (Dr. ShircmiA. Bandaranayake, J.)
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In the meantime, since the Appellants were agitating for the divestingof the said premises as neither compensation was paid nor theCommissioner had transferred the title of the said property to a thirdparty, the Appellants made an application under Section 17A of theCHP Law to the Commissioner, for divesting the ownership of the saidpremises to the Appellants. After an inquiry the Commissioner haddecided to divest the said premises and sought the approval of theMinister. The Minister had granted approval and the divesting orderwas published in the Gazette accordingly.
The Respondent appealed to the Board of Review against the decision ofthe Commissioner and also sought a Writ of Certiorari from the Courtof Appeal to quash the decisions of the Minister of Housing and that ofthe Commissioner of National Housing approving the divesting of theownership of the said premises.
The Court of Appeal by its judgment dated 21.08.2006 set aside theapproval granted by the Minister and the divesting order published inthe Gazette.
The 2nd Respondent – Appellants sought and obtained Special Leave toAppeal.
Held
Since the application to the Commissioner under Section 9 ofthe CHP Law has been made 6 years after the commencementof the said Law, the Respondent has not acted in terms of themandatory time frame laid down in Section 9 of the CHP Law.Therefore as the Respondent had failed to comply with the rel-evant provisions, there had been no valid application before theCommissioner for the purchase of the house in question and insuch circumstances, there is no requirement or a necessity forthe Commissioner to consider such application or inform theRespondent of such decision.
The concept of legitimate expectation could apply only if there wasa valid application filed by the Respondent. In the absence of avalid application, the Respondent had no legitimate expectation.The Court of Appeal was in error in holding that the Respondenthad a legitimate expectation.
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Per Dr. Shirani Bandaranayake, J., –
“Legitimate expectation cannot simply be taken in isolation. It hasto be considered in the light of administrative procedures wherethe legal right or intent is affected.”
Cases referred to:
Goonewardene and Wijesooriya v. Minister of Local Government,Housing and Contraction – (1999) 2 Sri L.R. 263
DesmondPerera and Others v. Karunaratne, Commisioner of NationalHousing and Others – (1994) 3 Sri L.R. 316 (CA)
Desmond Perera and other vs Karunaratne – 1997 – 1 Sri LR 148(SC)
Attorney General of Hong Kong v. Ng Yuen Shiu – (1983) 2 AC 629
APPEAL from the Judgment of the Court of Appeal.
Wijayadasa Rajapakse, P.C., with Nilantha Kumarage for 2ndRespondent – Appellants.
A. Gnanathasan, A.S.G., P.C., with Nirmala Wigneswaran, S. C. for 3rd,4th, and 5th Respondent – Respondents.
Dr. Sunil Cooray for Substituted Respondents – Petitioners –
Respondents.
Cur.adv.vult.
October 26th 2010
DR. SHIRANI A. BANDARANAYAKE, J.This is an appeal from the judgment of the Court ofAppeal dated 21.08.2006. By that judgment, the Court ofAppeal had decided to set aside the approval granted by theMinister dated 19.02.2003 (3R15a) and the divesting orderpublished in the Gazette on 25.02.2003 (3R16). Accordinglythe application for a writ of certiorari made by the substitutedrespondents-petitioners-respondent (hereinafter referred to asthe substituted respondents) was allowed. The 2nd respondent-appellants (hereinafter referred to as the appellants) came
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KarupparmapUlai and two others v. Visvanathan
and seven others (Dr. Shiram A Bandaranayake, J.)
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before this Court against the judgment of the Court of Appealfor which Special Leave to Appeal was granted.
At the hearing of this appeal it was agreed by all learnedCounsel that the only issue that has to be considered waswhether the original respondent, namely, Kandiah Visvana-than, (hereinafter referred to as the respondent), who wasthe father of the substituted respondents, was entitled to acommunication of the decision of the ’ Commissioner ofNational Housing prior to its publication.
The facts of this appeal as submitted by the appellants,albeit brief, are as follows:
The appellants are the Trustees of Sammangodu SriKathiravelayutha Swamy Temple and were the owners of thehouse bearing No. 27, Lorensz Road, Colombo 04 (herein-after referred to as ‘as said premises’). When the Ceiling onHousing Property Law (hereinafter referred to as the CHPLaw), came into operation, the appellants had made adeclaration as required by the said law to the Commissionerof National Housing (XJ. On the basis of the said declarationmade by the appellants, the said premises, was vested as asurplus house by the Commissioner of National Housing (Xjand X3). The appellants had thereafter appealed against thesaid vesting order to the Board of Review of Ceiling on HousingProperty (hereinafter referred to as the Board of Review). Therespondent’s father, Kanagasabai Kandiah was the tenant ofthe said premises and after his death, his widow SellammaKandiah became the tenant of the said premises. At the timethat appeal was taken for hearing before the Board of Review,the said Sellamma Kandiah had died and her son KandiahVisvanathan, viz., the respondent, appeared before the Boardof Review.
The Board of Review, by its order dated 26.06.1978, haddismissed the appeal and had decided that the respondent,Kandiah Visvanathan, is the tenant of the said House (X4).
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Therefore, one Wigneswarie Kandiah, a sister of KandiahVisvanathan, had challenged the said order of the Boardof Review by instituting action in the District Court ofMt. Lavinia and the said Court had dismissed that action,by its judgment dated 27.03.1995 (X13). Being aggrieved bythat judgment the said sister of Kandiah Visvanathan hadmade a final appeal to the Court of Appeal and by judgmentdated 14.10.1999, the Court of Appeal had affirmed the judg-ment of the District Court (X14). Against the sad judgment ofthe Court of appeal the said Wigneswarie Kandiah had comebefore this Court and by its judgment dated 22.10.2002 thisCourt had dismissed the said appeal (Xl5).
In the mean time the Commissioner of National Housing,by his letter dated 04.04.1997 (Xl6), had informed therespondent to pay a sum of Rs. 96,335/- as the assessedvalue of the said premises and the said respondent hadaccordingly paid the said sum to the National HousingAuthority. Thereafter an inquiry had been held on 20.04.1999and it was decided that no action would be taken in respectof the transfer of the said premises without the conclusion ofall cases relating to said premises.
Since the appellants were agitating for several years forthe divesting of the said premises as neither compensationwas paid nor the Commissioner had transferred title of thesaid property to a third party, they had made an applicationunder section 17A of the CHP Law to the Commissioner, fordivesting the ownership of the said premises to the appellants.On the basis of the inquiry that was held, the Commissionerhad decided to divest the said premises and had soughtapproval of the Minister for the said divestiture in terms ofsection 17(A)(1) of the CHP Law (3R15). The Minister hadgranted approval on 19.09.2003 (3R15a) and the divestingorder was published in the Gazette of 25.02.2003 (3R16).
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Thereafter the Commissioner by his letter dated 12.03.2003had informed the Attomey-at-Law for the respondent thataction had been taken under section 17(A)(1) of the CHP Lawon the application made by the appellant. The respondenthad appealed to the Board of Review on the basis of the saiddecision and had also filed an application seeking for a writof certiorari before the Court of Appeal to quash the decisionsof the Minister of Housing and the Commissioner of NationalHousing, approving the divesting of the ownership of the saidpremises and seeking a writ of mandamus compelling the 3rdrespondent to issue an instrument of disposition transferringthe said premises to the respondent.
During the pendency of the said writ application, thesaid respondent has died find the 1st to 4th respondents weresubstituted in place of the deceased.
The Court of Appeal by its judgment dated 21.08.2006 setaside the approval granted by the Minister on 19.02.2003 andthe divesting order published in the Gazette on 25.02.2003.
Learned Counsel for the substituted respondentscontended that the facts of this appeal are similar to thefacts in Goonewardene and Wijesooriya v Minister of LocalGovernment, Housing and Costruction{1). It was accordinglysubmitted that the respondent, who had participatedat the inquiry, had a legitimate expectation of becomingthe purchaser of the said premises. Therefore learnedCounsel for the substituted respondents contendedthat the Court of appeal had correctly decided that therespondent was a party aggrieved by the decision to divestant therefore had a statutory right of appeal to the Boardof Review in terms of Section 39(1) of the CHP Law. It wasfurther contended on behalf of the substituted respondentsthat the Commissioner had failed to notify the respondent of
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the decision to divest and the reasons for such decision. Thecontention was that the Commissioner, by failing to notify therespondent of his decision had violated the rules of naturaljustice.
The Court of Appeal, having considered the applicationfiled by the respondent had held that he had a legitimateexpectation of purchasing the premises in question and thata decision to divest would have affected him adversely. TheCourt of Appeal had arrived at the aforesaid decision on thebasis of the letter dated 04.06.1997 (X16) referred to earlier, bywhich the Commissioner of National Housing had requestedthe respondent to deposit a sum of Rs. 96,335/-.
It was not disputed that the respondent’s father K. Kandiahwas the tenant of the premises in question until his death inJuly 1952. Thereafter the widow of the said Kandiah becamethe tenant of the said premises. She passed away in July1973.
The said premises in question was regarded as an excesshouse by the Board of Review, by its order dated 26.06.1978(X4). The said Board of Review, by that order had decided thatthe respondent was deemed to be the chief occupant of thepremises.
The CHP Law, which come into operation on 13.01.1973,specifically deals with the procedure that should be followedby a tenant, who may apply to purchase a surplus house.Section 9 of the said Law, which deals with such situations,has clearly stated that,
“The tenant of a surplus house or any person who maysucceed under section 36 of the Rent Act to the tenancy ofsuch house may, within four months from the date of com-mencement of this Law, apply to the Commissioner for thepurchase of such house.”
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KaruppannapUkd and two others v. Visvanathan
and seven others (Dr. Shirani A Bandamnayake, J.)
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Reference was made to the applicability of Section 9 ofthe CHP Law in Desmond Perera and Others v. Karunaratne,Commissioner of National Housing and Others,2), where it washeld that,
“Section 9 of the CHP Law is precise, clear and unambigu-ous. A tenant who wishes to purchase a surplus houseshould make an application to the Commissionerwithin 4 months from the date of commencement ofthe CHP Law which was 13.01.1973" (emphasis added).
It was not disputed that the respondent had made anapplication to the Commissioner of National Housing in termsof section 9 of the CHP Law only on 06.03.1979. The date ofcommencement of the CHP Law as defined in section 47 of thesaid Law, was 13.01.1973 and the respondent had made hisapplication, six (6) years after the relevant date of commence-ment. Considering the provisions contained in section 9 ofthe CHP Law, the application of the respondent to purchasethe premises in question therefore is clearly out of time.
In Desmond Perera and Others v Karunaratne, Commis-sioner of National Housing and Others (supra), the Courthad taken pains to consider whether there was any obscu-rity and/or ambiguity in the wording of section 9 of the CHPLaw. In that case, the 1st petitioner had made his applicationfor the purchase of the premises on 27.03.1981, which was8 years after the CHP Law coming into effect. Consideringthe application made by the 1st petitioner in 1981 and theapplicability of the provisions contained is section 9 of theCHP Law, Grero, J. had stated that,
“The Court is of the view, that there is no obscurity andambiguity in the wording of section 9 of the CHP Law.. . . Therefore this Court has to give effect to the plain
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meaning of this section. In doing so this Court is of theview, that a tenant who wishes to purchase a surplushouse should make an application to the Commissionerwithin 4 months (four) from the date of commencementof the CHP Law. Much prominence was given to this Law,when it came into force. Petitioners who are the tenantsof the 3rd respondent should be or ought to be vigilantabout the laws enacted and published regarding theirrights and duties. They may make full use of them if theyso desire. Failure in their part to comply with section 9 ofthe CHP Law is not a ground to make a complaint againstdraftsmen of the said Law. When the wording of thesection is so clear and precise, they should have madeapplications to the Commissioner within four monthsafter the commencement of the Law to purchase thehouses as stated in that section. This Law came intooperation on 13.01.1973. The 1st petitioner (but notthe other petitioners) made his application to theCommissioner on 27.03.81, i.e., 8 years after thecommencement of this Law.”
The applicability of the provisions contained inSection 9 of the CHP Law was again considered in DesmondPerera and Others v. Karunaratne, Commissioner for NationalHousing (3), where G.R.T.D. Bandaranayake, J., had statedthat,
“Section 9 . . . . creates the opportunity for the tenantto opt to purchase the house he lives in. So the sectioncategorically requires him to do only one single thing -namely, to apply to the Commissioner for the purchaseof a house. This he must do within the stipulated periodof four months from the date of commencement of thelaw – which was 13.01.73.”
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In Desmond Perera and Others (supra) Court had heldthat the 1st petitioner had failed to comply with the provisionsof section 9 of the CHP Law.
As could be clearly seen, the facts of the presentappeal as regards the application made to the Commissioner ofNational Housing in terms of section 9 of the CHP Law, issimilar to the facts in Desmond Perera and Others (supra). Asstated earlier it is not disputed that the original respondenthad made his application 6 years after the commencementof the said Law and therefore the respondent has not actedin terms of the time frame laid down in section 9 of the CHPLaw.
The next issue that should be considered is as to whetherthe respondent had a legitimate expectation as was held bythe Court of Appeal on the basis of the request made by theCommissioner of National Housing on 04.06.1997 to deposita sum of Rs. 96,335/- (X16).
Referring to the said letter dated 04.06.1997 (X16), theCourt of Appeal had held that although the application topurchase the house was made out of time and the respondenthas no right to purchase the house under section 9 of theCHP Law, the Commissioner had used his discretion andhad elected to sell the house to the tenant by requesting therespondent to pay the assessed value of the property,survey fees and the fees for the deed. Accordingly the Court ofAppeal had proceeded on the premise that although therespondent had no legal right to purchase the property interms of section 9 of the CHP Law, since the Commissionerhad used his discretion to sell the house to the respondent,that exercise of discretion could confer legitimate expecta-tion to the respondent. In deciding that the respondent had alegitimate expectation in purchasing the premises in questionthe Court of Appeal had referred to the decision inGoonawardene and Wijesooriya v. Minister of Local Govern-
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merit, Housing and Construction and Other (supra). Referringto the questions that had to be considered by the Court inthat case, the Court of Appeal had held that on the applicationmade to divest the premises in question, the Commissioner,after holding an inquiry on 09.04.2002 had decided to divestthe said premises. Thereafter the Commissioner had soughtapproval from the 4th respondent-respondent (hereinafterreferred to as the 4th respondent) to divest the premisesin question in terms of section 17A(1) on the basis of hisrecommendation dated 06.01.2003 (3R15). The Court ofAppeal had further held that although the divesting orderwas published in the Gazette of 25.02.2003 (3R16). TheCommissioner had failed to communicate his decision ofdivesting, to the respondent, before obtaining the approval ofthe Minister.
Section 17A( 1) of the CHP Law refers to divesting theownership of houses vested in the Commissioner and thesection reads as follows:
"Notwithstanding that any house is vested in theCommissioner under this Law, the Commissioner may,with the prior approval in writing of the Minister, byOrder published in the Gazette, divest himself of theownership of such house, and on publication in theGazette of such Order, such house shall be deemed neverto have vested in the Commissioner.”
Learned President’s Counsel for the appellant contendedthat the appellant’s position was that the Trustees of theTemple had written several letters requesting the releaseof the premises in question to the Temple, as the premisesin question is situated within the Courtyard of the Temple.Accordingly, the appellant had made an application in termsof section 17A(1) of the CHP Law to the Commissioner fordivesting the ownership of the premises in question to theappellant.
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On the basis of the said application, the Commissioner,after holding an inquiry on 09.04.2002 had decided to divestthe premises in question. The Commissioner thereafter hadtaken necessaty steps to obtain the approval of the Ministerin terms of section 17A(1) of the CHP Law and the divestingorder was published in the Gazette on 25.02.2003. (3R16).
Learned President’s Counsel for the appellant, referringto the aforementioned decision taken by the Commissioner,contended that as the respondent had not made anyapplication to the Commissioner for the purchase of thepremises in question within the time period prescribedin section 9 of the CHP Law, the Commissioner was notbound to communicate the decision of such divesting to therespondent.
It is to be noted that section 17A(1) of the CHP Law, doesnot stipulate a time limit within which an application mustbe made in terms of that section. However, the provisioncontained in section 9 of the CHP Law is different in thatcontext, since a mandatory time frame is clearly prescribedin that section. Considering the provisions contained insections 9 and 17A(1) of the CHP Law it is clear that, if atenant is to make complaints against the Commissionerregarding these decisions, it would be necessary for him tofollow the procedure laid down in the respective provisions ofCHP Law, prior to making such complaints.
In Desmond Perera and Others v. Karunaratne,Commissioner for National Housing (supra), the tenants hadfailed to make applications to purchase the relevant houseswithin the time prescribed by section 9 of the CHP Law as inthis appeal. Considering the question as to the need for theCommissioner to have notified the tenants, this Court hadstated that,
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“In the absence of applications to purchase housestenanted by them in terms of the law, these appellantscannot be heard to complain of dereliction of duty bythe 1“ respondent. In the aforesaid situation, thereis no administrative duty to notice the tenants ofhouses vested that those houses are to be divested”(emphasis added).
Legitimate expectation cannot simply be taken inisolation. It has to be considered in the light of administrativeprocedures where the legal right or intent is affected. Thisposition was carefully considered in Attorney-General of HongKong v. Ng Yue Shiu,4>, where it was stated that,
“. . . . When a public authority has promised to follow acertain procedure, it is in the interest of good adminis-tration that it should act fairly and should implementits promise, so long as implementation does not interferewith its statutory duty.”
As stated earlier the Court of Appeal in this matter hadreferred to the decision in Goonawardene and Wijesooriya v.Minister of Local Government, Housing and Construction andOthers (supra) in support of the position that the respondenthad a legitimate expectation of purchasing the premises andthat a decision to divest would have affected him adversely.
In Goonawardena and Wijesooriya v. Minister of LocalGovernment, Housing and Construction and Others (supra)the tenants had submitted their applications in terms of therelevant applicable procedure, and considering the saidposition, the Court had correctly come to the finding thatthe said tenants had a legitimate expectation. When a partyhad tendered applications as per the provisions of theapplicable statute they do have a legitimate expectation toreceive instructions thereafter as to the relevant procedurethat they should follow on the basis of the relevant provisionsand the applications they had made.
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KaruppannapUIai and two others v. Visvanathan
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In Goonawardene and Wijesooriya (supra) the Court hadcarefully considered this position and had stated that,
“What appears to have happened seems to be that thelearned Judge of the Court of Appeal, having erroneouslyfound as a fact that “Admittedly they (the appellants)have not made applications to purchase the premisesunder section 9 of the Law”. Proceeded to base himselfon the decision in Perera v. Karunaratrve (supra) and heldagainst the appellants. It appears that the facts in theabove case (otherwise known as the Baur’s case) werequite different to those in the instant case. In the Baur’scase, the tenants of the Flats in question had not madeapplications to the Commissioner of National Housing topurchase any of the Flats (except for one who applied, notto the Commissioner, but to the Board of Review nearly8 years after the stipulated four months) …. In thecircumstances the Court rightly held that the ten-ants had no locus standi to question the validity of theCommissioner’s decision.
…. They had no legitimate expectation of becomingowners of the Flats, It is thus clear that Baur’s case isquite different, and has no application to the two appealsbefore us.”
In the present appeal as has been stated earlier, there wasno valid application filed by the respondent in terms of section9 of the CHP Law. The concept of legitimate expectationcould apply only if there was a valid application filed by therespondent. Accordingly, the Court of Appeal was in error inholding that the respondent had a legitimate expectation.
Learned Counsel for the substituted respondentssubmitted that the respondent had made an application todivest the said premises and the Commissioner after holding
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an inquiry on 09.04.2002 had directed to divest the premisesin question. The Commissioner had sought the approval ofthe 4th respondent to divest the premises in question in termsof section 17A(1) of the CHP Law. The Minister had grantedhis approval on 19.02.2003 (3R15a) and the divesting orderwas published in the Gazette dated 25.02.2003 (3R16). Thecontention of the learned Counsel for the respondent was thatthe Commissioner had not communicated the said decisionto the respondent and that had been a failure in observingthe rules of natural justice.
As has been stated earlier, section 9 of the CHP Lawclearly states that the application for the purchase of asurplus house must be made within four months from thedate of commencement of the CHP Law. As has been statedearlier, it is not disputed that the respondent had not madean application within the stipulated time frame describedin section 9 of the CHP Law. When the respondent had notcomplied with the relevant provisions, there had been no validapplication before the Commissioner for the purchase of thehouse in question and in such circumstances, there is norequirement or a necessity for the Commissioner to considersuch application or inform the respondent of such decision.
For the reason aforesaid it is evident that the respondentwas not entitled to a communication of the decision of theCommissioner of National Housing prior to its publication.
This appeal is accordingly allowed and the judgment ofthe Court of Appeal dated 21.08.2006 is therefore set aside.
I make no order as to costs.
AMARATUNGA, J. – I agree.
SRIPAVAN, J. – I agree.
Appeal allowed.