014-SLLR-SLLR-2005-V-1-SHELTON-DE-SILVA-SHIRANI-HELEN-FERNANDO.pdf
10SSri Lanka Law Reports(2005) 1 Sri L. R.
SHELTON DE SILVAvsSHIRANI HELEN FERNANDOSUPREME COURTWIGNESWARAN, J.
DE SILVA, J. ANDTILAKAWARDANE, J.
S.C. APPEAL NO. 55/2003
A. 750/90 (F)
C. COLOMBO 6763/RE10th FEBRUARY, 2004
Landlord and Tenant – Classification of one house owner entitled to recover ahouse under section 22 (2) (i) (bb) (ii) of the Rent Act, in the light of section 22(7) of the Act.
Special leave to appeal was granted upon the question whether in the definitionof “specified date” in section 22 (7) of the Rent Act “occupation" means
CAShelton De Silva109-
Us Shirani Helen Fernando
occupation per se or is restricted to occupation as tenant of the lawful owner
of the premises.
Held:
Per Wigneswaran, J
“Section 22 (7) seems to have contemplated in the case falling
within the ambit of section 22 (2) (i) (bb) (ii) only those cases where therewere transfers over the head" as it were of the tenant from one owner
landlord to another owner landlordthat no person shall be able to
purchase a property already in the ownership of an owner landlord over thehead of a tenant in order to oust such tenant. When the interpretation of“specified date” in section 22 (7) refers to “came in to occupation of suchpremises” the word “premises" must be interpreted as premises where.the present owner landlord purchased or inherited or received as gift from•a previous owner landlord. Where there was no such purchase, inheritanceor gift the tenancy in respect of the premises though it was continued as faras the tenant and the premises are concerned it would not prevent the newsingle house owner landlord from ejecting the tenant by depositing fiveyears rent subject to such notices, etc, being given. In other words theprohibition in section 22 (7) would, not apply where there was no nexus inrespect of ownership between the previous landlord and the presentlandlord. It is the single house ownership that gives the new owner landlordthe right of ejectment.
Cases referred to :
Nandadeva v Gulamhussain (1994) Part II BASLJ page 12.
Sumanasekara v Peiris (1993) 3 Sri LR 281
Imbuldeniya v D. De de Silva (1987) I Sri LR 367
Sriani Peiris v Mohamed (1986) 2 Sri LR 384
Devarajah and Another v Ariyatunga (1995)2 Sri LR 34
APPEAL from the judgment of the Court of Appeal.
P. Vimalachandran with A. P. Niles for substituted defendant • respondent –
petitioner
N. S. A. Gunatillaka, P. C. with N. Mahendra for substituted plaintiff – appellant
– respondent
Cur.adv.vult
110Sri Lanka Law Reports(2005) t Sri L. R.
October 19,2004WIGNESWARAN J.
This appeal centres around the interpretation of the phrase “specifieddate" in Section 22 (7) of the Rent Act, No. 7 of 1972 read with itsamendments, in relation to occupation by a tenant. Special leave to appealin this regard was granted on 06.08.2003.
In order to so interpret the phrase, in its context, it is essential to startfrom the beginning setting out the relevant facts of this case.
One Shelton de Silva, husband of the original Defendant Sybil de Silva,was tenant of premises bearing No. 67, Kanatta Road (later D. S.Senanayake Mawatha) Borella from 1938 under one Idris Zadoon (vide P 8& P9).
While the contract of tenancy between Shelton de Silva and Zadoonwas in effect, Partition Case No. 3747/P in the District Court of Colombo,to which Zadoon was not a party, conferred ownership over the premisesabove mentioned, on the original Plaintiff of this case, viz. W. IreneFernando, by Certificate of Sale No. 661 dated 23.09.1959.
After the purchase Shelton de Silva became the tenant of the originalPlaintiff, W. Irene Fernando. This position is not disputed.
Shelton de Silva died on 30.06.1961. Thereafter his widow Sybil deSilva became the tenant as from 01.07.1961. The plaint dated 23.01.1987accepted the said Sybil de Silva, the original Defendant, as the tenant ofthe original Plaintiff, W. Irene Fernando.
The original Plaintiff filed this action on the basis that she had depositedwith the Commissioner of National Flousing the equivalent of 5 years’ rent(at the rate of Rs. 165.66 per month) and had sent notice to quit in termsof the proviso to Section 22 (6), requiring the premises back in terms ofSection 22 (2) (bb) (ii), since she had no other residential premises.
The original Defendant denied that the original Plaintiff was entitled tofile this action since the latter had acquired the ownership of the premises,occupied by the original Defendant, on 23.09.1959 which was after thespecified date as contemplated by Section 22 (7) of the Rent Act.
Shelton De Silva111
Vs Shirani Helen Fernando (Wigneswaran, J.)
The District Judge by judgment dated 05.12.1990 upheld the argumentof the original Defendant and dismissed the original Plaintiff’s action. Theoriginal Plaintiff appealed to the Court of Appeal. While it was pendingbefore that Court, both the original Plaintiff and the original Defendantdied, and substitutions were effected. The Court of Appeal reversed theorder of the District Judge and entered judgment in favour of the substitutedPlaintiff-Appellant after setting aside the judgment of the District Judge.
The substituted Defendant-Respondent-Petitioner has appealed to thisCourt.
Basically the question of law to be examined is the meaning of“occupation” in the definition of “specified date” in .terms of Section 22 (7)of the Rent Act.
Let us first examine the relevant Sections.
Section 22 (2) (i) (bb) (ii), under which this action was filed reads thus-
“Notwithstanding anything in any other law, no action or proceedingsfor the ejectment of the tenant of any residential premises the standardrent (determined under Section 4) of which for a month exceeds one hundredrupees shall be instituted in or entertained by any Court unless where inthe case of premises let to a tenant whether before or after the date ofcommencement of this Act and where the landlord is the owner of notmore than one residential premises the landlord of such premises hasdeposited prior to the institution of such action or proceedings a sumequivalent to five years’rent with the Commissioner for National Housingfor payment to the tenant”.
The notice was given under the proviso to Section 22 (6) which readsthus:
“Provided that the landlord of any premises referred to in paragraph(bb) of subsection (1) or paragraph (bb) of subsection (2) may institutean action or proceedings for the ejectment of the tenant of such premisesif such landlord has given to such tenant six month’s notice in writingof the termination of the tenancy”.
The relevant part of Section 22 (7) which needs consideration by thisCourt reads as follows:-
112Sri Lanka Law Reports(2005) J Sri L. R.
“Notwithstanding anything in the preceding provisions of this section,no action or proceedings for the ejectment of the tenant of any premises
referred to in subsection 2 (i) shall be instituted (a)(b) where
the landlord is the owner of not more than one resident'll premises on
the ground that (i) (ii) the landlord of such premises has
deposited prior to the institution of such action or proceedings a sumequivalent to five years’ rent with the Commissioner for National Housingfor payment to the tenant, where the ownership of such premises wasacquired by the landlord on a date subsequent to the specified date bypurchase or by inheritance or gift other than inheritance or gift from aparent or spouse who had acquired ownership of such premises on adate prior to the specified date’’
"In this subsection “specified date” means the date on which thetenant for the time being of the premises or the tenant upon whosedeath the tenant for the time being succeeded to the tenancy underSection 36 of this Act or Section 18 of the Rent Restriction Act (No,29 of 1948) came into occupation of the premises”..
Six months’ notice in terms of the provison to Section 22 (6) had beengiven and five years’ rent in terms of Section 22 (2) (i) (bb) (ii) had beendeposited prior to the institution of this action. That the standard rentexceeds Rs. 100 per month is not disputed. Thus the question that remainsto be answered is whether the bar for the revovery of possession in termsof Section 22 (7) would apply to the substituted Plaintiff-Appellant-Respondent or not.
The substituted Defendant-Respondent-Petitioner’s position is that whathave to be examined in terms of Section 22 (7) are –
When.did the plaintiff become the owner of the premises in suit?
When did the defendant come into occupation?
Since in this case the original Defendant came into occupation as thewife of the original tenant in 1938 and the original Plaintiff became owneronly in 1959, the bar in terms of Section 22 (7) it was argued, must apply.It was further argued that in any event the original Defendant succeeded tothe tenancy of her husband who had continued as a tenant from 1938,after his death in 1961, and therefore the bar would still apply.
SCShelton De Silva113
Ks Shirani Helen Fernando (Wigneswaran, J.)
The arguments of the substituted Plaintiff -Appellant- Respondent were :
that the only contract of tenancy which existed between the originalPlaintiff and the original Defendant was that which came into existenceafter the death of Shelton de Silva as held by the Supreme Court inS. C. Case No. 329/70 9F) (D. C. Colombo Case No. 11925/L)
that the original Plaintiff purchased this property on 23.09.1959. Theoriginal Defendant had succeeded to tenancy as per judgment inCase No. S. C. 329/70 F only on 01.07.1961. Thus the tenant hadcome into occupation after 23.09.1959.
According to the judgment in Senerath Nandadeva Vs. Gulamhussairt0)“specified date” in Section 22 (7) can only mean the date on whichthe tenant for the time being came into occupation “qua tenant”.
My judgment in Sumanasekera Vs. Peiris(2) at page 288 in favour ofthe Plaintiff in a similar case was also mentioned.
All these submissions would now be considered.
Quite advisedly the Supreme Court recorded the question of law inissue on 06.08.2003 as follows: ' '
“Special leave to appeal is granted upon the question whether in thedefinition of “ specified date” in Section 22 (7) ofihe Rent Act “occupation”means occupation per se or is restricted to occupation as tenant of thelawful owner of the premises.
It is important to remember that tenancy under the Rent Act does notarise only between the owner of a house and a person to whom the househas been let by such owner. For the purposes of the Rent Act a landlordneed not be an owner. In fact Section 48 interprets a “landlord” as follows-
“Landlord in relation to any premises means the person for the timebeing entitled to receive the rent of such premises and includes anytenant who lets the premises or any part thereof to any subtenant”.
The word “tenant” finds no place for interpretation in Section 48.
114Sri Lanka Law Reports(2005) t Sri L. R.
Section 22 (2) (i) (bb) (ii) mentioned above speaks of a landlord beingan owner. It says “where the landlord is the owner of not more than oneresidential premises", the person who could deposit five years’ rent withthe Commissioner of National Housing must necessarily therefore be anowner. It is only an owner landlord who is the owner of not more than oneresidential premises who is contemplated in the said Section. Thus thelandlord prior to 23.09.59 viz. Idris Zadoon, under the present law.couldnot have deposited five years’ rent and prayed for ejectment because hewas not an owner landlord.
Under Section 22 (6) too, the landlord referred to therein must necessarilybe an owner landlord, since it is the landlord mentioned in Section 22 (2)(i) who is referred to in the said Section.
Thus when we examine the bar under Section 22 (7) we must be mindfulof the said Sections referring to an owner landlord and not a landlord whois “for the time being entitled to receive the rent of such premises”. The barapplies to owner landlords whose ownership was acquired on a datesubsequent to the date on which the tenant'came into occupation. Thatis, the bar applies to those owner landlords who had purchased thepremises over the head, as it were, of the existing tenant. This pre-supposesa prior ownership by the previous landlord and such ownership passingover to the new owner landlord from the earlier owner landlord. But in thiscase the previous landlord was Idris Zadoon who had no ownership andwas not a party to the partition case. The partition case No. 3747/P gaveownership to the original Plaintiff (in this case) and the husband of theoriginal Defendant became the tenant of the owner landlord only after23.09.59 though his tenancy under Idris Zadoon had continued from 1938.In this case the husband of the original Defendant was not a tenant underan owner landlord until after 23.09.59. There was no transfer of ownershipfrom Idris Zadoon to the original Plaintiff. Idris Zadoon was not a party tothe Partition Case in which the original Plaintiff obtained her Certificate ofSale.
But Section 22 (7) does not refer to the nature of transfer. It only refersto ownership being acquired by the landlord. Therefore it might be arguedthat a transfer however acquired by the new landlord owner, falls withinthe ambit of Section 22 (7). But a careful consideration of the entire sectionwould bring out the fact that what is referred to by the Section is a transfer
SCShelton De Silva11 f
Vs Shirani' Helen Fernando (Wigneswaran, J.)
from an owner landlord to another person who would become ah ownerlandlord himself or herself. The relevant portion of the Section is as follows:
“where the ownership of such premises was acquired by the
landlord on a date subsequent to the specified date by purchase or by•inheritance or gift other than inheritance or gift from a parent or spousewho had acquired ownership of such premises on a date prior to the specified
dateThe proviso pertaining to inheritance or gift from a parent
or spouse applies only if such parent or spouse had acquired ownershipprior to the specified date. That is, if from a date anterior to the time thetenant came into occupation of the premises the parent or spouse wasthe owner of the premises and had thereafter gifted or by his or her demisethe property devolved on a plaintiff then such proviso to Section 22 (7)
• would apply. This reference in respect of parent or spouse in respect ofinheritance or gift should explain the nature of purchase or inheritance orgift referred to in the Section. Because Section 22 (7) seems to havecontemplated in the context of cases falling within the ambit of Section22 (2) (i) (bb) (ii) only those cases where there were transfers “ over the. head”, as it were, of the tenant from one owner landlord to another ownerlandlord. As such the ownership of the previous landlord which getstransferred to the present landlord seems to be the basis of the effect ofSection 22 (7) on Section 22 (2) (i) (bb) (ii). That is, no person should beable to purchase a property already in the ownership of an owner landlordover the head of a tenant in order to evict such tenant. When theinterpretation of “specified date” in Section 22 (7) refers to ‘came intooccupation of the premises” the word “premises” must be interpreted aspremises where the present owner landlord purchased or inherited orreceived as gift from a previous owner landlord. Where there was no suchpurchase, inheritance or gift,.the tenncy in respect of the premises thoughit has continued as far as the tenant and the premises are concerned itwould not prevent or prohibit the new single house owner landlord fromejecting the tenant by depositing five years’ rent subject to such noticesetc. being given. In other words the prohibition under Section 22 (7) wouldnot apply where there was no nexus in respect of ownership between theprevious landlord and present landlord. It is the single house ownershipthat gives the new owner landlord the right of ejectment. Thus occupationby the original Defendant’s husband prior to the purchase by the originalPlaintiff under a non – owner landlord was not a bar under Section 22 (7) ofthe Rent Act to institute action under Section 22 (2) (i) (bb) (ii) of the saidAct. Section 22(2) (i)(bb)(ii) read with Section 22 (7) of the Rent Act deals
116
Sri Lanka Law Reports
(2005) 1 Sri L. R
with a special class of cases where in addition to the basic requirementspertaining to standard rent, notice, deposit of five years’ rent and singleownership, the current owner landlord must not have purchased, inheritedor received in gift the premises in suit from a previous owner landlord whohimself owned the premises when the tenant came into occupation.' If thenexus of owner landlordship between the previous landlord and the laterlandlord was missing the provisions of Section 22 (7) would not precludethe institution of action against the tenant because the tenancy under thenew owner landlord must be deemed to have been a fresh contract oftenancy. In other words, tenancy under a owner landlord which is thebasis of an action under Section 22(2)(i)(bb)(ii) came into being for thefirst time under the new single house owner landlord. Thus even thoughthe tenancy of the original tenant in this case continued from 1938, itscharacter changed as soon as an owner landlord took over from a non -owner landlord. This change of character gave the new owner landlord theright to accept the original tenant in occupation, as a tenant afresh, considerhim as a new tenant and file action under Section 22(2)(i)(bb)(ii) if theother ingredients were fulfilled. This would not have been possible if theprevious landlord was himself an owner landlord, in which event the nexusop the basis of ownership between both of them would have precluded thenew owner landlord f rdm admitting the tenant on a new contract of tenancy.Section 22 (7) would then have barred the new owner landlord from bringingan action under Section 22(2)(i)(bb)(ii).
Section -22(1 )(bb), Section 22(2)(bb) of the Rent Act must bedistinguished. The question of ownership does not come into reckoning ina case falling under Section 22(1 )(bb). Premises let to the tenant prior to01.03.1972 reasonably required by the landlord for occupation is what isrelevant under Section 22(1 )(bb). On the other hand under Section 22(2)(bb)there are two limbs viz (i) premises reasonably required and (ii) premisesin respect of which five years’ rent has been deposited with theCommissioner of National Housing. In both cases the landlord must bethe owner of not more than one residential premises and the premisesmay have been let prior to or after 01.03.1972.
Section 22 (7) refers to cases falling under Section 22(1) and Section22(2)(i). The above said interpretation with regard to the provisions of Section22 (7) in respect of ownership by the landlord applies to only that smallcategory falling within Section 22(2)(i)(bb) and may not apply to other
SCShelton De Silva111
Vs Shirani Helen ■ Fernando (Wigneswaran, J.)
cases. Therefore the interpretation of “specified date” in Section 22 (7)must take into consideration such special category of cases where singleowner landlords have been given the right of ejectment. Such single ownerlandlords should not have been persons who had purchased or inherited orreceived as gift from other owner landlords their properties “ over the head”of the tenant. If the previous landlord was not an owner landlord, for thepurposes of Section 22(2)(i)(bb)(ii) read with Section 22(7) the tenancy ofthe person continuing in occupation of the premises would get faulted inthat the new owner landlord would bring into being a new tenancy. Thetenancy under the non – owner landlord would cease to be while a newtenancy under the owner landlord would then come into being for thepurposes enumerated in Section 22(2)(i) (bb)(ii). This is because of thefact that ownership of the new landlord is the basis for ejectment underSection 22(2)(i)(bb)(ii) and that qualification he did not receive from theprevious landlord.
In Imbuldeniya Vs. D. de Silva (3) a Full Bench of 5 Judges of theSupreme Court held as follows:
“A person without any title to a particular piece of property may granta tenancy thereof to another person. Such a tenancy is valid betweenthe landlord and tenant but is not binding on the true owner. It is not avalid letting and is ineffectual against him”. (Chief Justice Sharvanandaat page 371).
In the present case tenancy before 23.09.1959 was a tenancy under alandlord who had no title. That contract of tenancy though binding asbetween that landlord and tenant was not binding on the true owner/owners or any successor/successors of the true owner/owners. The originalPlaintiff in this case was not a successor in title to the previous landlord.She did not step into the shoes of the previous landlord.
It is in the light of the above said interpretations and comments that thematters set out by the learned Counsel for the Subsituted Defendant-Respondent- Petitioner have to be viewed.
The original Plaintiff no doubt became owner of premises in suit onlyon 23.909.59 and the husband of the original Defendant had come intooccupation as far back as in 1938. But on the original Plaintiff becoming
118Sri Lanka Law Reports(2005) 1 Sri L. R.
owner of the premises by virtue of the Certificate of Sale dated 23.09.59the husband of the original Defendant was per force brought into a newtenancy. It was a tenancy under the new owner landlord whose ownerlandlordship did not come about on account of a transfer, inheritance norgift from the previous landlord. Thus the tenancy of the late husband of thelate original Defendant must be deemed to have started after 23.09.1959.
There is no doubt that in the definition of the expression “specified
date” the words”the date on which the tenant for the time being
came into occupation of the premises” can only mean the date on whichthe tenant for the time being came into occupation qua tenant and notmere occupation (Vide W. B. C. Senerat Nandadewa Vs. Z. NGulamhussein (Supra). The phrase “tenant for the time being came intooccupation” must be understood to mean a tenant and not a personclaiming tenancy subsequently.
The question whether the original Defendant was occupying the premisesin suit as from 1938 continuously even before and after 23.09.1959, isirrelevant since her late husband’s tenancy started anew as from23.09.1959, as stated above. On the death of Shelton de Silva on 30.06.1961the original Defendant succeeded to the tenancy of her late husband interms of Section 18 of the Rent Restriction Act, as from 01.07.1961. Sheisucceeded to the rights and liabilities of her late husband. Since her latehusband was not entitled to plead the bar under Section 22(7) the originalDefendant too could not have pleaded such bar. The Supreme Court in anyevent in S. C. Case No. 329/70 F (D. C. Colombo Case No. 11925/L) hadconfirmed that the only contract of tenancy which existed between theoriginal Plaintiff and original Defendant was that which came into existenceafter the death of Shelton de Silva and such contract of tenancy only from01.07.1961 (vide also Sriani Pieris Vs. Mohamedw and Devarajah andanotherVs. Ariyatunga(5). The occupation of the original Defendant as anoccupier of the premises as from 1938 therefore does not come into focusin interpreting the provisions of Section 22(7) of the Rent Act. Therefore Iwould hold that the husband of the original Defendant started a new tenancyafter 23.09.1959 and the Supreme Court has held that on his death afresh contract of tenancy with the original Defendant came into existenceas from 01.07.1961. Thus the bar under Section 22 (7) would not apply tothe facts of this case.
SCSamarakoon and Others119
VS University Grants Commission and Others
I would therefore conclude that even though the Court of Appeal had notdealt with the question as to whether the occupation by the originalDefendant’s late husband prior to 23.09.59 as from 1938 would precludethe operation of Section 22(2)(i)(bb)(ii) in the light of the provisions of Section22 (7), yet the conclusion of the Court of Appeal must be accepted ascorrect. We dismiss the appeal. Parties shall bear their own costs.
DE SILVA, J.—I agree.
TILAKAWARDANE, J.— I agree.
Application dismissed.