Sri Lanka Law Reports
 3 Sri LR.
HENDAVITHARANA AND ANOTHER
COURT OF APPEALJAYASINGHE, J.,JAYAWICKREMA, J.
A.LA. NO. 134/97.
C. COLOMBO NO. 8040/RE.NOVEMBER 12. 26, 1999.
Writ pending Appeal – Civil Procedure Code s. 763, s. 763 (2) – Substantial Loss
– Judicature Act, S. 23.
The defendant has been carrying on business in the premises for a periodof nearly 50 years and it is also in evidence that the defendant is in theleather products trade which is localised in the 1st Cross Street, Pettah.
It is hardly necessary to emphasise the loss that would occasion to thedefendant in the event of the defendant being required to move out ofthe locality. The shifting of the business out of the area itself would causesubstantial and irreparable loss.
APPLICATION for Leave to Appeal from an order of the District Court of Colombo.
Cases referred to:
Appuhami v. Fonseka and Another  2 Sri LR. 130.
C.A. 772/82 – D.C. Mt. Lavinia No. 1248/RE.
Cooray v. Illukkumbura – 1996 2 Sri LR. 263.
Mohamed v. Seneviratne –  2 Sri L.R. 389.
Mack v. Shanmugam – 3 Srikantha 89 at 94.
Sokkalal Ram Sait v. Kumaravel Nadar and four Others – 13 CLW 52.
Grindlays Bank Ltd. v. Mackinnon Mackenzie & Co. - 1
Sri L.R. 19.
A. D. H. Perera v. Tilaka Gunawardena – Bar Association Law Journal- 1991 vol. IV parts 1-7.
CAMaleeha v. Hendavitharana and Another (Jayasinghe, J.)267
A K. Premadasa PC with C. E de Silva for petitioner.
P. A. D. Samarasekera, PC with Kirthi Sri Gunawardena for respondent.
Cur. adv. vult.
December 16, 1999JAYASINGHE, J.
The plaintiff-petitioner instituted action on 20.04.1993 in the DistrictCourt of Colombo against the defendant-respondent for ejectment ofthe respondents from the premises in suit.
After trial the learned Additional District Judge delivered judgmentin favour of the plaintiff-petitioner. On or about 20.10.1996 thepetitioner made an application to execute the decree pending appeal.On 19.06.1997 the learned Additional District Judge made orderstaying the execution of the decree pending appeal. The presentapplication is for leave to appeal by the petitioner against the saidorder of the learned Additional District Judge of Colombo. The learnedDistrict Judge in refusing writ pending appeal made order requiringthe 1st defendant to deposit security by way of cash or a bankguarantee in a sum of Rs. 60,000. This requirement has been satisfiedby the 1st defendant. Mr. A. K. Premadasa, President's Counselsubmitted that execution of a decree under appeal can only be stayedif the judgment-debtor satisfies Court that substantial loss may resultto the judgment-debtor unless an order for execution is made in termsof section 763 (2) of the Civil Procedure Code. Mr. Samarasekera,President's counsel objected to leave being granted on the basis thatthe 1st defendant has established that substantial loss and damagewould be caused to the 1 st defendant in the event of writ being issued;that there was no evidence placed before Court that any loss and/or damage would be caused to the plaintiff by reason of having toawait the final determination of the appeal that has been preferredby the respondents and that the District Judge has correctly cometo a finding that there would be substantial loss caused to the 1stdefendant in the event of writ being issued and that there was alsoan important question of law to be decided in appeal as regards thequestion of subletting as set out in section 10 (1).
Sri Lanka Law Reports
 3 Sri LR.
At the inquiry for writ pending appeal the 1st defendant did notgive evidence. It was contended that he was seriously ill and wasunable to be present in Court.
Mr. A. K. Premadasa urged that there was no evidence of sub-stantial loss for the reason that the 1st defendant had not givenevidence. However, the 2nd defendant who claimed to be the con-sultant of the 1st defendant gave evidence and produced “Dr amedical certificate in support of the physical condition of the 1stdefendant. Mr. Samarasekera submitted that his failure to give evi-dence due to his physical condition should not militate against himand relied on Appuhami v. Fonseka and Another where Gunasekara,J. held that "the failure of the defendant-petitioner who was old andfeeble to have personally testified in regard to questions . . . wouldsuffer in the event of a writ being issued cannot be held against him".Mr. Samarasekera also submitted that the defendant has been carryingon business in the premises in suit for over 50 years and that thesaid premises is located at 1st Cross Street, Pettah, where thepredominant business was in leather products and that it was impera-tive to be in such a locality to be engaged in such business activityand that it was almost impossible to obtain alternative premises inthe same locality. He submitted that the defendant's business wouldbe completely ruined in the event of the 1st defendant having to leavethe premises in suit. The plaintiff did not give evidence or call anyevidence. He further submitted that there was sufficient evidence thatconstitute substantial loss as required by section 763 (2).
The requirement of substantial loss has come up for interpretationin a number of cases. Ranasinghe, J. in CA No. 772/82(2) stated that". . . the defendant-petitioner is one who has admittedly been inoccupation of the premises in question as a tenant … for severalyears prior to the commencement of these proceedings. It, therefore,seems to us having regard to the difficulty experienced by tenantsin rent-controlled premises in finding alternative accommodations thatit would be far more equitable to permit the defendant-petitioner tobe in occupation until the appeal which has been filed by him isdisposed of'. It is in evidence that the defendant has been carryingon business in the premises in dispute for a period of nearly 50 yearsand it is also in evidence that the defendant is in the leather productstrade which is localized in the 1st Cross Street, Pettah. It is hardlynecessary to emphasise the loss that would occasion to the defendant
CAMaleeha v. Hendavitharana and Another (Jayasinghe, J.)269
in the event of the defendant being required to move out of this locality.Wijetunga, J. in Cooray v. IllukkumburaP1 held that the advantageof continuing to occupy the same premises and the proportionatedisadvantage suffered by being forced to leave them are not mattersthat should be regarded lightly . . . "The value of a business suchas this would depend to a large extent on the length of time thatit has been carried on in the same premises for it is to those premisesthat their customers would naturally have acquired the habit of going".In Mohamed v. Seneviratnd41 the Court held that, the lodging of anappeal from the judgment of the District Court by an aggrieved partydoes not, ipso facto, have the effect of staying the execution of thejudgment or decree during the pending of the appeal. The DistrictJudge, however, has the power to stay the execution of a decreepending appeal if he "shall see fit" as in section 23 of the JudicatureAct, as where the judgment-debtor "satisfies" the District Judge that"substantial loss" may result to the judgment-debtor, unless an orderfor stay of execution is made. The defendant had four schoolgoingchildren. Eviction in the circumstances would result in considerableloss or damage to the defendant. In Mack v. ShanmugarrP SivaSelliah, J. stated that, "the defendant-petitioner is a widow 72 yearsof age living on her sons' help without any alternative accommodation. . . she would be rendered homeless and suffer severe hardshipsand substantial and irreparable loss unless execution was stayedpending appeal . . . The only reason for eviction was, that hercontractual rights as a tenant has ceased with death of the previouslandlord and the District Judge had held that she was a trespasser.These were substantial questions of law to be decided in appeal whichthe District Judge has refused to consider as being irrelevant to theapplication … I am of the view that substantial loss does notnecessarily carry with it a monetary connotation; such an interpretationmay well be in relation to business premises. The word substantialloss must have a relative meaning that must vary with the facts ofeach case". In Sokkalal Ram Sait v. Kumaravel Nadar & Four Otherd6)it was held that stay of execution pending appeal is ordinarily grantedonly when the proceedings would cause irreparable injury to theappellant and when the damages suffered by the appellant by theexecution pending appeal would be substantial. Here, the evidencein support of the contention that the loss was substantial and damages
Sri Lanka Law Reports
 3 Sri LR.
irreparable was not strong. In Grindlays Bank Ltd. v. MackinnonMackenzie & Co.m it was held that if the judgment-debtor desires stayof execution pending appeal, he should establish substantial loss.There appears to be no quarrel on this requirement. Substantial lossis a question of fact which the defendant must establish. It may notalways be quantifiable may not have a monetary connotation. Yet,substantial and substantial considering the circumstances of the case.In A. D. H. Perera v. Tilaka Gunawardenaf81 Fernando, J. held thatwhile ejectment from any premises, residential or business wouldcause loss, the burden is on the judgment-debtor to satisfy the Courtthat such loss would be substantial. In any event, mere assertionsof the judgment-debtor's opinion that serious loss would result, un-supported by averments of fact in regard to the nature of the business,its turnover and profits (or losses), the difficulties and expenses whichrelocation would occasion, and similar matters, are insufficient. Thematerial upon which such assertions were based should have beenmade available to enable the Court to assess the loss, and todetermine, in relation to the judgment-debtor, whether such loss wassubstantial; and also to determine the quantum of security.
The 2nd respondent's evidence was that the respondents areengaged in the leather products trade which is localised in the 1stCross Street, Pettah, area. That the respondents did not even considerrelocating their business in the same locality as such an endeavourwould require an investment as much as 4 or 5 million by way ofa deposit and that it was impossible to raise such an amount of capital.His evidence was that the shifting of the business out of that areaitself would cause substantial and irreparable loss. I am satisfied thatthese are not mere assertions, but very valid grounds to object tothe issuance of writ. Since, there is also a substantial question oflaw that is required to be determined by this Court, we are not inclinedto grant leave to appeal against the order of the learned AdditionalDistrict Judge. Application for leave is refused with costs fixed atRs. 2,100.
JAYAWICKREMA, J. – I agree.
Application for leave refused.
MALEEHA v. HANDAVITHARANA AND ANOTHER