027-NLR-NLR-V-57-M.-D.-MUNIDASA-Appellant-and-G.-D.-RICHARD-APPUHAMY-Respondent.pdf
1955Present :K. D. de Silva, J.M. D. aiUjSiJJJASA, Appellant, and G. D. RICHARD'APPUHAMY, RespondentS. C. 111—C. B. Colombo, 40,133
Rent Restriction Act, Ko. 29 of 1948—Sections 13 (2) (a) and 15—Overpaid rents—■ Scl-ojf against rent in arrear—Appropriation of the overpayments—Prescription- Ordinance (Cap. 55), s. 10.' '- v
. Under section 15 of the Bent Restriction Act any rent paid in'excess of theauthorised rent must be appropriated by tho landlord in the way which is tnost .favourable to" the tenant for the purposes of prescription. Therefore, “if over- ‘payments of rent were made by the tenant during a period-of three : yearsimmediately preceding- tho date when he fails to pay rent for a particularxnonth/tho sum duo as rent for such month should be deducted from tho earliestoverpayment in the hands of the landlord.'
-A-PPEAIj from a judgment of the Court of Requests, Colombo.-
S. J. V. Chelvanayakarn, Q.G., with K. Bajaratnam, for the defendant-appellant.-
II. IF. Tambiah, with Felix B. Dias, for the plaintiff-respondent.
Cur. adv. vult. .
July 22, 1055. de Silva, J.—
The plaintiff who is the landlord of premises bearing assessment No. 102,Armour Street, Colombo, instituted this action on 23.7.’52 to eject thedefendant his tenant from the said premises and to recover arrears ofrent. The ejectment was claimed on two grounds, namely, (l)that theTent had been in arrear for one month after it became due, and (2) thatthe premises wore reasonably required for his use and occupation as aplace of business within the meaning of Section 13 (1) (c) of the RentRestriction Act of 194S (hereinafter referred to as the Act). The defen-dant filod answer on 29.9.’52 denying the plaintiff’s right to eject himon either ground. The learned Commissioner held that the plaintiffhad failed to establish Jiis claim to eject the defendant on the secondground. He has given valid and cogent reasons for his decision on thatpoint, and it must be upheld. In fact, his finding on this point was notcanvassed in appeal. The learned Commissioner however held that thedefendant was in arrear of rent for a month after it became due andentered judgment for plaintiff as prayed for. The defendant has appealedfrom that judgment.
That he failed to pay any rent after the end of February, 1950, isadmitted by him. So that at the institution of the action ho owed theplaintiff a sum of Rs. 3SG • 10 as rent. The authorized rent for the premisesfor the whole of the year 194S was Rs. 15'60 a month, and from 1949onwards it was Rs. 14-30. The plaintiff however recovered rent fromthe defendant at the rate of Rs. 40 a month from 1.1.’4S to 2S.2.’50.Thus between 1.1.’4S and 2S.2.’50 there had been an overpaymentof Rs. 652-00. The defendant in his answer averred, inter alia-, thatin view of the fact that the plaintiff had recovered from him a sum ofRs. 652-60 in excess of the authorized rent he was not in arrear at thetime of t-lio institution of the action. Tho learned Commissioner, however, 'held that the defendant was entitled to set-off only overpayments madeduring a period of threo years immediately preceding the date on whichthe deduction was claimed. He further held that the defendant claimedthe deduction for the first time in his answer which was filed on 29.9. ’52.Consequently he was entitled to credit only in respect of the- overpay-ments from September, 1949, to February, 1950, that is to say, for a peiiodof six months. The excess payment during that period amounts to onlyRs. 154-20 hut as the arrears amounted to Rs. 3S6* 10 the learned Commis-sioner decided that the defendant was in arrear within the moaning ofSection 13 (I) (a) of tho Act. It was argued on behalf of the defendant^
that the learned Commissioner had erred in holding that the three-yearperiod during -which the overpayments can be recovered should bereckoned from the date that the deduction is claimed. Tho learnedCommissioner’s view however finds support in the judgment of Pulle,
J., in Wijesekera v. Kanapathipillai 1. In that case it was held that anyoverpayment made prior to three years of claiming the deduction wasbarred by prescription.* Section 15 of tho Act enacts “ where any tenantof any premises to which this Act applies has paid by way of rent to thelandlord,- in respect of any period commencing on or after the appointeddate, any amount in excess of tho authorized rent of those promises,such tenant shall bo entitled to recover the oxcess amount from the land-lord, and may without prejudice to any other method of recovery, deductsuch oxcess amount from tho rent payable to the landlord This Actcame into operation in December, 194S, but Section 9 of tho corre-sponding Ordinance of 1912 was identical with Section 15 of this Act.Tho Act itself does not set out the period within which overpaid rentcan be recovered or deducted. In the English Act howover tho periodduring which that can be done is fixed at two years. The learned Counselfor the defendant was not prepared to concede that the PrescriptionOrdinance (Cap. 55) applied in the matter of recovery or deduction ofoverpaid rent. But, he argued that even if Section 10 of that Ordinancedid apply his client was entitled to deduct the excess rent paid duringthe period of three years immediately preceding 1.3.’50. If that argu-ment is sound tho defendant could not have been in arrear at tho time ofthe institution of this action. Tho judgment of Soertsz, J.,in Wijemannecb Co. Ltd. v. Fernando 2 lends support to that contention. In that casetoo it was argued on behalf of the landlord that as the tenant had notpleaded a set-off or a counter claim he was not entitled to creditjn respectof ovorpaid rent. That argument the learned Judge summarily rejectedin the following words :—“ But the answer to that is that the overpaidamount in the hands of tho respondent overpaid as rent and not for anyother purpose, extinguished pro ianto by operation of law, the rent as itfell duo. In other words tho law secured for tho appellant what, inother circumstances, the appellant would have had to achieve for himself. ”There is no reason why this principle enunciated by Soertsz, S. P. J.,should not apply to the facts in the instant case. Hero too the defendantmade tho overpajment of Us. G52-60 to tho plaintiff as rent and not forany other purpose. Thorefore, the defendant in March, 1950, was ontitlcd.to deduct any overpayment in tho hands of tho landlord which had notbeen prescribed. That is to say the defendant was entitled to the benefitof the overpayments made by him in tho way of rent during a period ofthree years immediately preceding 1.3. ’50. The appropriation of theoverpaid rent must be made by tho landlord in tho way which is mostfavourable to the tenant. That is to say, when tho defendant failed topay rent for March, 1950, that amount should have been deducted fromthe earliest overpayment in tho hands of tho plaintiff and likewise in thecase of rent which fell due during the subsequent months. Appropriationof overpayments would take effect on that principle. This principleis referred to by Mcgarry in his book “ Tho Rent Acts ” at page 299, as
'(lQod) 55 27. L. R. 575.' (10JC) il 2s. L. R. 62.
follows :—" In a case of deduction, any overpayment may bo set againstany sums due for rent within the following two years. So that, by-setting tho earliest of such overpayments against the next paymentdue for rent, the tonant may leave the liability for later payments forrent available for satisfaction by the later overpayments. ” Thisstatement is based on tho English caso Go lee v. *Burgener 1. Thereforeif the overpayments of rent mado by the defendant during the threo yearsimmediately preceding 1.3.’50 were appropriated by tho landlord onthe principles set out above, the defendant would not have been in arroarof rent at the time of the institution of the action. Accordingly theplaintiff’s action must fail. Thcreforo, I sot aside the judgment of thelearned Commissioner and dismiss tho plaintiff’s action with costs in:both Courts.
Appeal alloived.