Sri Lanka Law-Reports
 2 Sri L.R
SAMSUDEEN AND ANOTHER
COURT OF APPEALDISSANAYAKE, J. ANDSOMAWANSA, J.
A. 644/90 (F)
C. KANDY NO. 1695/REAPRIL 4 AND
JUNE 22, 2001 ANDSEPTEMBER 5,2002
Rent Act, No.7 of 1972, sections 10, 12(1), 12(2), 28 and 48 – Residential orbusiness premises ? – User test – Non occupation of premises – Res judica-ta – Sub-letting – Continuing wrong – Rent Restriction, Act, section 9.
The plaintiff-respondent instituted action seeking ejectment of the 1st defen-dant appellant and the 2nd defendant respondent on the basis of (i) unlawfulsub-letting – (section 10 (2)) and cessation of occupation for a continuous peri-od of 6 months (section 28).
The 1st defendant contended that the premises in suit is business premises,that he is resident and is also carrying on a business at the premises and thatthe plaintiff-respondent's father sought the same reliefs on the same groundsearlier, and the said action was dismissed and contended that the said dis-missal operates as res judicata. The trial court held with the plaintiff-respon-dent.
The uncontested evidence is that the premises in suit was in fact occu-pied within 10 years prior to commencement of the Rent Act which wasin March 1972, wholly for the purpose of residence first by the plaintiff-respondent’s family and thereafter section 12(1) applies. In terms of sec-tion 12(1) the character of the premises in suit must continue to be resi-dential as there is no material placed before court that the Commissionerof National Housing has authorized the use of the premisers wholly ormainly for any purpose other than that of residence. The test for decidingwhether premises are residential or business within the meaning of theRent Act is the user to which the premises are wholly or mainly put by theoccupiers for the time being.
The defendant appellant did not show any reasonable cause for his
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non-occupation. He did not consider it necessary to testify in court inorder to give any reasonable cause for his ceasing to occupy the premisees in suit.
Per Somawansa, J.
“Burden of proving the grounds for ejectment – sub-letting, is with theplaintiff-respondent. However, once the plaintiff-respondent proves thatthe premises had been in the exclusive occupation of a third party otherthan a tenant as in the instant case in the absence of any explanation bythe tenant or the third party showing that there is no sub-letting court hasto draw the presumption that it is a case of sub-letting by the tenant to thesaid third party."
Sub-letting is a continuing wrong, and the plea of res judicata cannothave any application. When sub-letting is continued, there is a continuedbreach by the tenant of the statutory provisions against sub-letting.
APPEAL from the judgment of the District Court of Kandy.
Cases referred to :
Wimalaratne v Linganathan and another- (1989) 1 Sri LR 247
Seyed Mohamed v M.H.M. Meera Pillai- 70 NLR 237
D.E. Edirisinghe v I.A. Patel – 79 NLR 217
PK. Kalandankutty et al v C.W. Wanasinghe – 60 CLW 307 at 308
Faiz Musthapa, P C. with Hemasiri Withanachchi for 1st defendent-appellant.
S.FA. Cooray with inoka Randeny lor plaintiff-respondent
October 11,2002 .
The plaintiff-respondent instituted action in the District Court ofKandy seeking ejectment of the 1st defendant-appellant and the2nd defendant-respondent from premises No.79/12, KatugastotaRoad, Kandy on the basis of –
unlawful sub-letting in violation of section 10 of the RentAct, and
Cessation of occupation of the said premises for a continu-ous period of six months without reasonable cause as
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specified in section 28 of the Rent Act No. 07 of 1972.
She also claimed continuing damages at the rate of Rs.17.10 ioper month from 01.07.1982 until recovery of possession. The 2nddefendant-respondent did not file an answer while the 1st defen-dant-appellant took up the position that the premises in suit is abusiness premises and not a residential premises, that the Rent ActNo.07 of 1972 applies to the said business premises, that he is res-ident and is also carrying on a business at the premises in suit andthat the plaintiff-respondent's father had earlier instituted action No.
RE 1119 in the District Court of Kandy seeking the same reliefs onthe same grounds which was dismissed and the said dismissaloperates as res judicata. In the circumstances the 1st defendant- 20appellant prayed for a dismissal of the plaintiff-respondent's action.
At the trial the following admissions were recorded –
that the 1 st defendant-appellant was the tenant of the plain-tiff-respondent in respect of the said premises.
the receipt of the notice to quit,
that the premises in suit are situated within an area gov-erned by the Rent Act, No.7 of 1972.
On behalf of the plaintiff-respondent 4 issues were raised and10 issues were raised on behalf of the 1st defendant-appellant. Atthe conclusion of the trial the learned District Judge by his judgment sodated 06.03.1990 held in favor of the plaintiff-respondent. It is fromthe said judgment that the 1st defendant-appellant has preferredthis appeal.
At the hearing of this appeal it was contended by the counsel forthe 1st defendant-appellant that the learned District Judge misdi-rected himself in determining the issue whether the premises in suitis residential or business. In that he has failed to appreciate that thetest applicable is the user for the time being as defined in section48 of the Rent Act and by the application of section 12 of the RentAct which prohibits the conversion of residential premises to busi- 40ness premises without the sanction of the Commissioner ofNational Housing. He had in the process over-looked the fact thatat least from 1967 "Ismail Industries" had been run at the premisesin suit. It was also contended that in the light of the finding by the
Samad v Samsudeen and another
learned District Judge that a business was being conducted in thepremises in suit and with the assertion that the 1st defendant-appellant lived at No. 196, Trincomalee Street, the only logical con-clusion is that the premises in suit was mainly or solely used as abusiness premises. In support of this contention he cited the deci-sion in Wimalaratne v Linganathan andAnothet^). In the said casethe short point for decision was whether premises where a guesthouse was being run for profit were business premises or residen-tial premises within the meaning given to these terms in the RentAct. It was held in that case – though the definitions given in theRent Act of "residential premises" and "business premises" excludeeach other the expressions "purposes of residence" and "purposesof business" do not, and in a given case one may include the other.The purpose that is material is the tenant's purpose. The occupa-tion contemplated in the definition of residential premises is notlimited to actual physical occupation. The test for deciding whetherpremises are residential premises or business premises within themeaning of the Rent Act is the user to which the premises are whol-ly or mainly put by the occupiers for the time being. The user towhich a tourist puts the room he occupies in the guest house is thatof residence for how short a period it may be. It is his temporaryresidence. Hence the premises in suit are residential premises. Thefacts as stated on page 248 of the said case are –
"The plaintiff let these premises to the 1st defendant in aboutthe year 1968 at a rental of Rs. 1,000 per month. In about1971 the 1st defendant sub-let the premises to the 2nddefendant. The former tenant of the premises was oneM.S.A. Gaffoor who ran a guest house in the premises andthis business was bought by the 1st defendant, who in turnsold that business to the 2nd defendant."
In the said case it is not clear as to whether the premises inquestion were let to the tenant as residential premises or businesspremises. However in the instant case it transpired in the evidenceof the plaintiff-respondent that the premises were let to the 1stdefendant-appellant as residential premises and not as businesspremises. It is to be noted that the 1st defendant-appellant did notgive evidence but called a clerk from the Kachcheri who producedmarked D1 the Business Registration Certificate according to which
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the business "Ismail Industries" had been first registered on27.05.1967 and the place of business indicated as the premises insuit. Statement of change under section 7 of the Business NamesOrdinance dated 27.05.1967 marked V2, Certificate of Registrationof a firm dated 06.06.1967 marked V3 and Certificate ofRegistration of an individual dated 18.07.1967 marked V4. Thoughthese documents indicate that the business commenced on01.04.1962 there is no evidence forthcoming to establish that thepremises in suit were given on rent to the 1st defendant-appellantto run a business. The only evidence available on this point is thatof the plaintiff-respondent who says that the premises in suit weregiven to the 1st defendant-appellant as residential premises.Hence unlike in the case cited by the 1st defendant-appellant in theinstant case there is evidence that the premises in suit was givento the 1st defendant-appellant as residential premises.
According to the interpretation of section 48 of the Rent Act,No.7 of 1972 "business premises" means any premises other thanresidential premises as hereinafter defined and "residential premis-es" means any premises for the time being occupied wholly ormainly for the purpose of residence. At this point it is pertinent tonote the applicability of section 12(2) of the Rent Act, No. 7 of 1972which defines "residential" premises to mean any premises whichat any time within a period of 10 years prior to the date of com-mencement of this Act had been occupied wholly or mainly for thepurpose of residence.
The plaintiff-respondent has given evidence which conclusivelyestablishes that the premises in suit is residential premises withinthe meaning of the said definition and the said evidence is not chal-lenged by the 1st defendant-appellant. Her evidence revealed thatfrom 1957 her parents and other members of her family resided inthe premises in suit and her younger brother was born in the saidpremises and that in 1963 her father rented out the said premisesto the 1st defendant-appellant who continued to use the same forhis residence. Accordingly the uncontested evidence in this case isthat the premises in suit was in fact occupied within ten years priorto the commencement of the Rent Act which, was in March 1972wholly for the purpose of residence first by the plaintiff-respondent'sfamily and thereafter by the 1st defendant-appellant and therefore
Samad v Samsudeen and another
section 12(1) of the Rent Act, No. 7 of 1972 comes into operation.Section 12(1) of the Rent Act reads thus:
"Notwithstanding anything in any other law, no landlord ortenant of any residential premises shall, unless so authorizedby the Commissioner for National Housing, use or permit anyother person to use such premises wholly or mainly for anypurpose other than that of residence".
Accordingly in terms of section 12(1) of the Rent Act characterof the premises in suit must continue to be residential as there is nomaterial placed before Court that the Commissioner for National 130Housing has authorized to use the premises in suit wholly or main-ly for any purpose other than that of residence.The finding of thelearned District Judge that the premises in suit was residentialpremises in which a business had been carried out coupled with theassertion that the 1st defendant-appellant lived at No. 196,Trincomalee Street will not be a sufficient factor to come to a find-ing that the character of the premises in suit has changed from res-idential to business, for premises in suit being residential premiseswithin 10 years prior to the coming into operation of the Rent Act isin law considered to be residential premises.uo
The 1st defendant-appellant did not give evidence and he didnot dispute the fact that he ceased to occupy the premises for acontinuous period of over six months prior to the filing of this action.
The statement of the 1 st defendant-appellant to the police dated
marked P7 also supports this contention. In fact in thesaid statement the 1st defendant-appellant had asserted that heceased to occupy the premises in suit six years prior to the date ofthe said statement which would be in 1976.
It should also be noted here that the defendant-appellant did notshow any reasonable cause for his non occupation. He did not con- isosider it necessary to testify in Court in order to give any reasonablecause for his ceasing to occupy the premises in suit. In the absenceof such reasonable cause being shown it is clear that the plaintiff-respondent would be entitled to avail herself of the provisions con-tained in section 28(1) of the Rent Act to eject the 1st defendant-appellant. Section 28 (1) of the Rent Act reads as follows :
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"Notwithstanding anything in any other provisions of this Act,where the tenant of any residential premises has ceased tooccupy such premises,without reasonable cause, for a continu-ous period of not less than six months, the landlord of suchpremises shall be entitled in an action instituted in a court ofcompetent jurisdiction to a decree for the ejectment of such ten-ant from such premises."
On a consideration of the above facts I am inclined to take theview that the plaintiff-respondent is entitled to have the 1 st defen-dant-appellant ejected from the premises in suit in terms of section28 (1) of the Rent Act.
It was also contended by the counsel for the 1st defendant-appellant that the learned District Judge erred when he came to thefinding that the ground of ejectment based on sub-letting had beenestablished beyond any doubt by the plaint in case N0.1119/REdated 13.06.1979 marked P1. I am inclined to agree that thelearned District Judge has misdirected himself on this point.However on an examination of the evidence led in this case, I aminclined to take the view that on a balance of probability there is evi-dence to establish that there has been sub-letting by the 1st defen-dant-appellant to the 2nd defendant-respondent in violation of sec-tion 10 (5) of the Rent Act, No. 7 of 1972. Section 10 (5) of the RentAct reads as follows :
"Where the tenant of any premises sublets such premises orany part thereof without the prior consent in writing of thelandlord, the landlord of such premises shall, notwithstandingthe provisions of section 22, be entitled in a court of compe-tent jurisdiction to a decree for the ejectment of such tenantfrom such premises, and also for the ejectment of the personor each of the persons to whom the premises or any partthereof had been sublet".
It is the evidence of the plaintiff-respondent that when this actionwas instituted in 1982 it was the 2nd defendant-respondent whowas occupying the premises in suit and not the 1st defendant-appellant and that by about 1971 the 1st defendant-appellant leftthe premises in suit and went to occupy premises No. 196,Trincomalee Street and thereafter the premises were kept closed
Samad v Samsudeen and another
for some time. The fact that the 1st defendant-appellant went intooccupation of No.196, Trincomalee Street is established by theplaint in case No.1119/RE marked P1 and the answer of the 1stdefendant-appellant in that case is marked P2. The statementmade by the 1st defendant-appellant to the police on 15.03.1982marked P7 also confirms this fact. In the said statement to thepolice marked P7 the 1st defendent-appellant admitted that about 200six years ago he handed over the business that he carried on at thepremises in suit to the 2nd defendant-respondent, that on
he along with his wife came back to the premises insuit, that the 2nd defendant-respondent objected to his coming tostay in the premises and asked him to leave and that he accord-ingly agreed to leave the premises before 6.00 p.m. This cannot bethe attitude of a person who as a tenant had possession of thepremises let and is in control of even a portion of the premises andis a clear admission that it is. the 2nd defendant-respondent whowas in exclusive occupation of the premises and the 1st defendant- 210appellant had no occupation whatsoever.
It is conceded that the burden of proving the grounds for eject-ment including unlawful sub-letting is with the plaintiff-respondent.However once the plaintiff-respondent proves that the premiseshad been in the exclusive occupation of a third party other than atenant as in the instant case in the absence of any explanation bythe tenant or the third party showing that there is no sub-lettingCourt has to draw the presumption that it is a case of sub-letting bythe tenant to such third party. In the instant case no evidence wasled to give any explanation to the effect that the 2nd defendant- 220appellant is not paying any rent to the 1st defendant-appellant foroccupation by him of the premises in suit. It should be noted thatthe 1st defendant-appellant for reasons best known to him did notconsider it necessary to give any reasonable explanation.
In Seyed Mohamed v M.H.M. Meera PillaH2) the question waswhether the defendant had, in contravention of section 9 of theRent Restriction Act, sub-let a part of the premises rented to him bythe plaintiff. The evidence disclosed that one A.C. was in sole andexclusive occupation of a room of the premises and that he carriedon business in that room. The defendant took up the position that 230no rent was paid to him by A.C. and that the latter had been let into
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occupation of the room before the defendant became the tenant ofthe premises. It was held, that, in the absence of acceptable evi-dence to explain A.C.'s occupation, the only inference was that A.C.was in occupation as a sub-tenant paying rent to the defendant.
In D.E. Edirisinghe v I.A. Patefi) the head note reads as follows :
"Although proof by a landlord that someone other than histenant is in exclusive possession of the rented premiseswould generally lead to the inference of sub-letting, no suchinference of sub-letting can be drawn if the tenant explains 240satisfactorily the occupation of the premises by the third partyon some footing other than a sub-letting. Accordingly, wherethere is an agreement between the landlord and another per-son that the latter is the tenant of certain premises and a fur-ther agreement between the landlord and a third party thatthe third party is to carry on a business in the same premis-es under the name of the tenant and to pay rent, it cannot beinferred that the tenant sub-let the premises to the thirdparty".
In that case at page 226 Sirimanne, J, observed :250
■in most cases of sub-letting as it would be almost impos-
sible to prove an actual payment of rent by a sub-tenant to atenant. This is undoubtedly so and the proof by a plaintiff thatsomeone other than his tenant is in exclusive possession ofthe rented premises, would in the absence of an acceptableexplanation lead to the necessary inference of a sub-letting.
This is what has been held in the case relied on by learnedcounsel for the respondent reported in 70 NLR 237. It mustbe remembered however that the burden of proving a sub-letting rests with the plaintiffs and that the inference of sub- 260letting above referred to can be drawn only where there is noexplanation of the third party's possession or where an expla-nation is given which is found to be unsatisfactory or reject-ed as being false. If the defendant (as in this case) gives anexplanation which is accepted by the Court as it explains theoccupation of the rented premises by a third party on somefooting other than a sub-letting, then no inference of sub-let-ting can be drawn and in such circumstances it means thatthe plaintiffs have failed to discharge the burden of proving asub-letting."270
Samad v Samsudeen and another
In passing I might also refer to the plea of res judicata relied onby the 1st defendant-appellant. It is conceded that the earlier actionNo.1119/RE marked P1 was filed by the father of the plaintiff-respondent. However this action was withdrawn as it is evidentfrom the proceedings dated 13.02.1981 marked P3, with liberty tofile a fresh action and as the 1 st defendant-appellant did not objectto this application to withdraw the action the said application wasallowed. Hence the question of res judicata cannot arise. In anyevent sub-letting is a continuing wrong and the plea of res judicatacannot have any application as was observed by Sansoni, J. in PK. 280Kalandankutty et al v C.W. Wanasinghe^:
"The plea of res judicata would have been a good one if thesub-letting had ceased with the termination of action No.5498in October 1955. It would not have been open to the plaintiff,in that event, to sue again on the earlier sub-letting. But thesub-letting has been shown to have continued in spite of theearlier decree. There was thus a continuing breach by the 1stdefendant of the statutory prohibition against sub-letting,which enabled the plaintiff to institute a fresh action in respectof the subsequent breach, for such breach constituted a new 290cause of action".
Also in M. Seyed Mohamed v M.H.M. Meera PillaH2) it was heldthat, where the subletting is continued, there is a continued breachby the tenant of the statutory provision against sub-letting.
In the light of the above reasoning I see no reason to interferewith the judgment of the learned District Judge. Accordingly I dis-miss the appeal of the 1st defendant-appellant with costs.
DISSANAYAKE, J.I agree.