020-NLR-NLR-V-55-VADIVEL-CHETTY-Appellant-and-ABDU-Respondent.pdf
Vadivel Chetty v. Abdu
67
Present: Weerasooriya J.VADIVEL CHETTY, Appellant, and ABDU, RespondentS. G. 254—C. R. Colombo, 37,171
Landlord and tenant—Enhancement of rent—Not effective until there is agreement—
Refusal of landlord to accept rent due—Resulting position—Rent Restriction
Act, No. 29 of 1943, s. 13 (1) (a)..
Where a tender of payment of the rent due was made by the tenant and wasrefused by the landlord on the ground that, as the monthly rent had beenenhanced by him, a larger amount was due—
Held : (i) A landlord’s unilateral act in demanding payment of a higher rentthan that agreed upon does not render the tenant liable to pay the higher rent-demanded.
Where a landlord refuses to accept the rent due when it is tendered to him,and has by his conduct made it clear that he will not, in the future, accept rentat the rate agreed upon, the tenant is not obliged to tender the rents for thesubsequent months as and when they fall due. The tenant must, however,pay all the unpaid rent within a reasonable time if the landlord subsequentlydemands it or signifies his readiness to accept it.
Where the tenant has been given reasonable time to pay all unpaid rent,he cannot be said to be in arrear within the meaning of section 13 (a) of theBent Bestriction Act until one month elapses after the expiry’of such reasonabletime.
68
WEERASOOBJYA J.—Yadivel Chetty v. A-bdu
PPB^ .Court „fJ*T
S. J. V. Ghelvanayakam, Q.C., with S. Canagarayar and A. Sivaguru-nathan, for the plaintiff appellant.
H. W. Jayewardene, with D. R. P. Goonatilleke, for the defendantrespondent.
Cur. adv. vult.
August 3, 1953. Weerasooriya J.—
The defendant in this case, who is the respondent to the present appeal,became the monthly tenant of premises bearing No. 90, Silversmith Lane,Colombo, belonging to the plaintiff, who is the appellant. The tenancycommenced on the 1st January, 1951, and the rent as agreed between theparties was Rs. 18 per month payable on or before the 10th of the monthimmediately following.
On the 7th March, 1951, before the rent for February had fallen due,the appellant through his proctor wrote the letter P4 to the respondentin which certain facts (which for the purpose of this judgment it is notnecessary to set out) were alleged as entitling the appellant to demandfrom the respondent, as from the 1st February, 1951, a sum of Rs. 29-18as the monthly rent in lieu of the Rs. 18 agreed upon.
On the 10th March, 1951, the respondent’s proctor wrote to theappellant’s proctor the letter P5 calling for proof of the facts on the basisof which the demand for enhanced rent had been made, and on the sameday the respondent wrote the letter P6 by which he forwarded a moneyorder for Rs. 37-90, of which Rs. 18 represented the rent for the monthof February in respect of No. 90, Silversmith Lane, and the balance wasrent in respect of certain other premises of which also the respondent wasthe appellant’s tenant.
The sum of Rs. 18 forwarded by the respondent as the February rentfor premises No. 90, Silversmith Lane, was returned to the respondent bythe appellant’s proctor by his letter P7 dated the 14th March, 1951, witha further request that rent should be paid as from February at the rateof Rs. 29'18 per month. On the 9th April, 1951, the respondent wrotethe letter P9 to the appellant forwarding a money order for Rs. 55-90which included a sum of Rs. 36 as the February and March rents forpremises No. 90, Silversmith Lane. The letter also set out the views ofthe respondent as to why the rent of these premises should continueto be Rs. 18 per month, and not Rs. 29' 18 as claimed by ^the appellant.A reply to P9 was sent by the appellant’s proctor by his letter P10 datedthe 23'rd April, 1951. That letter intimated to the respondent that theappellant was not prepared to accept rent at Rs. 18 per month for thepremises, and the sum of Rs. 36 paid as rent for February and March wasreturned to the respondent and he was again called upon to pay rent at
WEERASOORIYA J.—Vadiuel Chelt / v. Abdw
69
the rate of Rs. 29'18. This letter was followed up by letter Pll datedthe 26th April, 1951, from the appellant’s proctor in which the respondentwas informed that as he had failed to pay rent at the rate of Its. 29 • 18 fromFebruary onwards he should quit and deliver vacant possession of thepremises on the 81st May, 1951, and that on his failure to do so an actionwould be instituted against him. A specific issue was raised at the trialwhether this letter had the effect of terminating the contract of tenancybetween the parties, and this issue was answered in the affirmative by thelearned Commissioner. No argument was addressed to me at the hearingof the appeal that this finding of the learned Commissioner was erroneous,and I shall therefore proceed on the footing that wfien this action wasfiled the contract of tenancy between the parties had already beendetermined by Pll.
On the 3rd April, 1951, the respondent had made an application to theRent Control Board praying, inter alia, for an order on the appellant toaccept rent for premises No. 90, Silversmith Lane, at the rate of Rs. 18per month. On the 7th June, 1951, the appellant also made an applicationto the Board, the object of which was to obtain an order on the respondentto pay on or before a date to be specified all arrears of rent from the1st February, 1951, at the rate of Rs. 29’ 18 per month and, in default ofsuch payment, the authority of the Board to institute an action forejectment against the respondent.
Pending the determination of his application to the Board therespondent made no tender of payment of rent, even at Rs. 18 per mensem,for the months following March, 1951. On the 5th February, 1952, theappellant’s proctor wrote to the respondent the letter P12. At the dateof that letter no final determination had been given by the Board oneither of the applications made by the appellant and the respondent.In P12 the respondent was informed that as any order made by the Boardwould not have retrospective effect he should remit to the appellantvithin 7 days all arrears of rent at the rate of Rs. 18 per month. Therent then outstanding was the rent for the period February, 1951, toJanuary, 1952. The respondent’s proctor replied to P12 by letter P14dated the 12th February, 1952. In that letter particulars were called foras regards the aggregate amount of the appellant’s claim and the periodin respect of which it was made, and the appellant was informed thata remittance would be sent on receipt of these particulars.
On the 14th February, 1952, the appellant filed action against therespondent praying for his ejectment from premises No. 90, SilversmithLane, and for the recovery from him of arrears of rent at Rs. 18 per monthfor the period February, 1951—January, 1952, and damages at the samerate from February, 1952, until the date of ejectment. "
For the institution of this action no authority was obtained from theRent Control Board. Paragraph 6 of the plaint averred that therespondent was in arrears of rent for more than one month after it hadbeeome due “ within the meaning of section 13 (1) (a), of the RentRestriction Act, No. 29 of 1948 ” (hereinafter referred to as “ the Act ”)and the question that arises for decision in this appeal is whether in the
70AAiEERASOORIYA J.—Vadivel Chetty v. Abdu
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circumstances stated that averment has been made out, and theappellant’s action is maintainable. The decision of that questioninvolves a consideration of the legal position when a tender of paymentof the rent is made by the tenant and is refused by the landlord on theground that a larger amount is due.
It might be stated here that the agreed rate of rent when the tenancycommenced being Rs. 18 per month, even assuming that anythingsubsequently happened as a result of which the view could be taken thatthe sum of Rs. 29’ 18 per month represented no more than the authorisedrent recoverable under the Act, the appellant could not. in my opinion,by his unilateral act in demanding payment of rent at that rate change anessential term of the contract of tenancy. It was held in the case ofDe. Silva et al. v. Pe.re.ra, 1 that a mere demand made by a landlord for thepayment of a higher rent than that agreed upon did not render the tenantliable to pay the higher .rent demanded. The decision in that case wouldapply to the present case notwithstanding that the tenancy underconsideration is governed by the provisions of the Act. This appeal must,therefore, be decided on the basis that at all material times the rent of thepremises was Rs. 18 per month.
It was conceded by Mr. Chelvanayagam, who appeared for theappellant, that there was a valid tender by the respondent of the rentsthat fell due for February and March, 1951. Where a tenant has madea valid tender of the rent due, while the non-acceptance of it by thelandlord would not place the tenant in default or in mora in the paymentof that rent, the tenant is not thereafter entirely discharged from theobligation to pay the amount tendered if the landlord subsequentlydemands it or signifies his readiness to accept it. Wessels in his treatiseon the Law of Contract in South Africa 1 2, in dealing with a tender of moneyin the attempted performance of a contract, states as folio1.vs :—
Para■ 2339 (3) : “ It is submitted that in the case of a money debt,the tender of the money does not liberate the debtor, and lie does nothold the money after tender at the risk of the creditor …. ”
Para 2340 : “ The debtor must always continue ready and willingto pay the money due, and if sued upon the debt, can plead his tenderand payment of the money into Court …. If this plea is provedthe plaintiff will be entitled to the money paid into Court, but thedefendant will be entitled to the costs of the action ”.
The position in English Law is similar, as appears from the followingpassage in Anson on the Law of Contract 3 :■—
“ If the creditor will not take payment when tendered, the debtormust nevertheless continue always ready ancl willing t<i- pay the debt.Then, when he is sued upon it, he can plead that he tendered it, but hemust also pay the money into Court.
1(192S) 29 Nj L. R. 506.
2Wessels on the Law of Contract in South Africa (1937 edition), Vo'. 1, pp. 703—4.
3Anson on the Lau> of Contract (1937 edition), p. 329.
WEERASOORIYA J.—Vadivel Ohetty v. Abdu
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If he proves his plea, the plaintiff gets nothing but the money thatwas originally tendered to him, while the defendant gets judgment forIds costs of defence, and so is placed in as good a position as he held atthe time of the tender
It will be seen that while the respondent tendered to the appellant therents for February and March, 1951, as they fell due, no tender was madeof the rents for April—December, 1951, and January, 1952. Mr. Chelvana-yagam did not, however, contend that despite the refusal of the appellantto accept the rents for February and March, 1951, and bis having returnedto the respondent the sums tendered, the respondent was under anobligation to tender the rents for the subsequent months as and when theyfell due. Up to the time when the letter P12 was written to therespondent by the appellant’s proctor, the appellant by his conduct hadmade it clear that he would not accept rent at Rs. 18 per month, andapplying the maxim lex non cogit ad inutilia I would hold on the admittedfacts that the respondent was not obliged to tender the rents for thesubsequent months as and when they fell due. The position is analogousto the case where although a land has been transferred subject to thecondition that if the transferor pays a certain sum within a specifiedperiod he would be entitled to a re-transfer of it, the transferee subse-quently, at a point of time prior to the expiry of the period of the option,repudiates the agreement to re-transfer. It was held in Muthuvel et al.v. Markandu 1 that in those circumstances it was unnecessary for theparty entitled to ask for the re-transfer to allege or prove tender of thepurchase price within the specified period in an action subsequentlyinstituted for specific performance of the agreement.
S. 13 (1) of the Act provides that no action for the ejectment of a tenantshall be instituted in or entertained by any Court except with the writtenauthorisation of the Rent Control Board. Under the proviso to thatsub-section an action for ejectment may, however, be instituted withoutthe authorisation of the Board on the grounds set out in paragraphs (a)—(d) of the proviso, of which paragraph (a) requires as a condition precedentthat the rent has been in arrear for one month after it has become due.The words “ in arrear ” in that paragraph are not used in any special senseand their ordinary meaning is that the payment of the rent has been indefault. Now a tenant who has tendered to the landlord the rent as itfell due and has taken all reasonable steps towards the landlord’sacceptance of it cannot be regarded as in default in paying that rent; norcan it be said that the tenant has been in default in paying the rentwhere as a result of the landlord’s conduct in refusing acceptance of therent for a previous month he did not tender the rent for a subsequentmonth on the ground that the tender would have been useless. It isonly of the rei^t outstanding from a tenant who is behind in the dischargeof his liability to pay rent punctually that it may be said that the rent isin arrear. Whether in a given case the rent has been in arrear wouldlargely be a question of fact.
Mr. Chelvanayagam while conceding that the respondent cannot besaid to have been in default in the payment of the rent up to the time of1 (1952) 54 N. L. R. 462.
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WEERASOORIYA*J.—Vadivel v. Abdu
the receipt by him of P12, submitted that on the respondent failing toremit to the appellant, within the period specified in P12, all the rentthat was then outstanding at the rate of Its. 18 per month, he was indefault in the payment of that rent. Mr. Chelvanayagam also concededthat where a creditor makes a subsequent demand for payment of moneypreviously tendered, but refused by him, the debtor must be alloweda reasonable time for the payment of the money, but he contended thatthe period of seven days specified in P12 was a reasonable time. Whata reasonable time is is, however, a question of fact. In this case thereis a finding by the learned Commissioner that the time limit imposed by theappellant in P12 was neither adequate nor reasonable, and that therespondent was not in arrear in the payment of the rent, and I see noreason to disturb that finding ; but even assuming that such time limitwas reasonable the respondent would have commenced to be in default(or in arrear) only on the expiry of that period. This action wasinstituted on the 14th February, 1951 ; that is to say one day, or at themost two days, after the expiry of the specified period, and even if therespondent was in arrear for one day, or two days, at the time of theinstitution of the action, that fact alone would not have entitled theappellant to dispense with the authority of the Rent Control Board,as, in terms of s. 13 (1) (a) of the Act, such authority is unnecessary onlywhen the rent has been in arrear for one month after it has become due,and in my opinion on no view of the matter could it be said that whenthe action was instituted the rent was in arrear for one month after it hadbecome due.
In the result the order of the learned Commissioner dismissing so muchof the appellant’s action as relates to the ejectment of the respondent iscorrect and the appeal from that order is dismissed. With regard to thatpart of the action which relates to the recovery of the rent outstandingat the date of action, the respondent in his answer admitted that it wasdue, and. pleaded tender of the rent for February and March,1951, and hisreadiness at all times to pay that rent as well as the other rents whichwere outstanding, and although he did not, as required by s. 414 of theCivil Procedure Code, at the time that the answer was filed pay themoney into Court or take the requisite steps for the purpose of suchpayment, the money was in fact paid into Court on or about the 15thSeptember, 1952, and before the actual trial of the case, along with therent for the months of February—May, 1952.
The order of the learned Commissioner dismissing that part of theappellant’s action for the recovery of the sum of Rs. 216 as representingthe rent outstanding for the months of February—December, 1951, andJanuary, 1952, is set aside, and judgment will be entered for the appellantfor that amount. The appellant will be entitled to withdraw thatamount from the sum deposited in Court. The respondent will, however,be entitled to his costs of the trial which will have to be paid by theappellant. .Each party will bear his own costs of appeal.
Order varied.