054-SLLR-SLLR-2004-V-1-MACAR-AND-ANOTHER-v.-MOHAMED-ALI.pdf
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Macar and another v Mohamed Aii
(Andrew Somawansa, J.)
393
MACAR AND ANOTHERvMOHAMED ALICOURT OF APPEAL ,DISSANAYAKE, J. ANDSOMAWANSA, J.
A. NO. 604/94 (F)
C. COLOMBO 7820 / REJULY 17 andNOVEMBER 12, 2003
Rent Act, No.7 of 1972 – Excepted premises – Portion of original premisesgiven separate assessment number – Annual value not challenged – Tenantin occupation of entirety – Rent Restriction Act, No. 29 of 1948 – AmendingAct, No. 6 of 1953 compared – Nature of physical alterations – Attractingassessment for the first time – Failure to answer in limine the question whetherpremises are excepted or not – Is it a miscarriage of justice? – Attornment -Municipal Councils Ordinance, section 235.
The plaintiff-appellant sought the eviction of the defendant-respondent frompremises No. 207 and 207B on the basis that they are excepted premises -the two premises being assessed at Rs. 38,720/-' and Rs. 9,280/- for the firsttime in 1990. The defendant-respondent’s position was that he became thetenant in 1975 and that in 1996, a portion of the original premises No. 207, wasgiven a separate No. 2078, though there was no structural alterations, and hecontinued to be the tenant of the entirety of the premises under the same con-tract of tenancy which commenced in 1975 even after he attorned to the plain-tiffs-appellants. The District Court held in favour of the defendant-respondent.
Held:
Evidence reveals that the two separate numbers were given notbecause of a wall being built but because of a request made by theowners who gifted the premises to the present plaintiff-appellant.
A change in the assessment number and an increase in the annualvalue would not take the premises out of the Rent Act despite two num-bers being given.
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Per Somawansa, J.
‘There is no material placed by the plaintiff-appellants to show that a gravemiscarriage of justice has been caused to them as a result of failure or neglecton the part of the trial judge to answer in limine the question whether premis-es are subject to the operation of the Act or excepted premises.”
APPEAL from the judgment of the District Court of Colombo
Cases referred to:-
Muttucumaru v Corea – (1958) 59 NLR 525
Seneviratne v Perera – 63 NLR 509
Wijetunga v Senanayake – 69 NLR 445
Podisingho v Perera – 75 NLR 333
Don Gerald v Fonseka -71 NLR 457
Sally Mohamed v Seyed Mohamed – 64 NLR 486
Chettinad Corporation Ltd. v Gamage and others – 62 NLR 86
Hewavitharane v Rathnapala — (1988) —1 Sri LR 240
Weerasena v A.D.R. Perera – (1991) – 1 Sri LR 121
Imbuldeniya v de Silva – (1987) – 1 Sri LR 367
Ansarv Hussain- (1986) 1 CALR 365
Wakkumbura v Nandawathie – (1998) 2 Sri LR 154
K.S. Tillakaratne for plaintiff-appellant.
N.S.A. Goonetilake, P.C., with N. Mahendran for defendant-respondent.
Cur.adv.vult
March 05, 2004
ANDREW SOMAWANSA, J.The plaintiffs-appellants instituted the instant action in the 01District Court of Colombo seeking ejectment of the defendant-respondent and those under him from premises bearing assess-ment Nos. 207 and 207B Galle Road, Colombo 3 morefullydescribed in the 1st and 2nd schedules to the plaint and for restora-tion to possession thereto and damages at the rate of Rs. 20,000/-per month from 01.02.1992 till possession is restored.
The position taken by the plaintiffs-appellants was that the saidpremises being business premises and excepted premises the pro-tection afforded by the. Rent Act did not apply to the defendant- 10
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Macar and another v Mohamed Ali
(Andrew Somawansa. J.)
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respondent, that by notice to quit dated 12.12.1991 the defendant-respondent’s tenancy had been terminated with effect from 31stJanuary 1992, that the premises in suit Nos. 207 and 207B had forthe first time being assessed at an annual value of Rs. 38,720/- andRs. 9280/- respectively in the year 1990 and were therefore except-ed premises within the meaning of the Rent Act.
The position taken by the defendant-respondent was that hebecame the tenant of premises bearing assessment No. 207 underone M.C.M. Ziyard in 1975, that the plaintiff-appellant became theowner of this property in December 1989 on deed No. 3813 marked 20V3, that the said M.C.M. Ziyard in October 1990 instituted actionNo. 7561/RE against the defendant-respondent on the basis thatthe defendant-respondent was his tenant and as landlord sent aquit notice dated 28.08.1990 to the defendant-respondent, that thesaid case No. 7561/RE was instituted after the said deed of gift No.3813 marked V3, that on the death of the said M.C.M. Ziyard appli-cation for substitution was refused by Court and the said Action No.7561/RE was not proceeded with, that in the year 1990 a portion ofthe original premises bearing assessment No. 207 was given aseparate No. 207B though there were no structural alterations, that 30even thereafter both premises bearing Nos. 207 and 207B contin-ued to be governed by the Rent Act, No. 07 of 1972, that he con-tinued to remain the tenant of the entirety of the premises and wasin occupation of the entirety under one and the same contract oftenancy which commenced in 1975 even after he attorned to theplaintiffs-appellants.
At the commencement of the trial 07 admissions were recordedand 23 issues were raised by both parties. At the conclusion of thetrial the learned District Judge by his judgment dated 06.10.1994held with the defendant-respondent and dismissed the plaintiffs- 40appellants’ action. It is from the said judgment that this appeal hasbeen lodged.
It is contended by the counsel for the plaintiff-appellants that inthe eyes of the law as it stands and interpreted by the highest Courtin the land the judgment of the learned District Judge cannot standfor a moment for the reason that the plaintiffs-appellants base theiraction on the fact that the premises were excepted premises as atthe time of the institution of the action as borne out by paragraph
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02 of the plaint in conformity with the relevant provisions of the RentAct, No. 07 of 1972 operative in the area where the premises weresituated as at the time of the institution of the action. Further hesubmits that certified extracts of the Assessment Book under sec-tion 235 of the Municipal Councils Ordinance which gives the annu-al values for the year 1991 in respect of the two premises in ques-tion as Rs. 38,770/- and Rs. 9280/- speak for themselves to deter-mine as to whether premises are excepted premises or not. He fur-ther submits that the question whether the premises in respect ofwhich the action is brought are to be regarded as premises subjectto the operation of the Act or as excepted premises has to beanswered in limine which cardinal and mandatory rule the learnedtrial Judge has failed or neglected to observe and has caused agrave miscarriage of justice. To substantiate the above submissionphotostat copies of pages 103 to 133 of Professor G.L. Peiris“Landlord and Tenant” Vol. H, have been tendered marked as ‘A’.”
However I am unable to agree with the above submission for thesimple reason that though the above submission would hold waterunder the Amending Act, No. 06 of 1953 but certainly not under theRent Act, No. 07 of 1972. This is explained by Professor G.L. Peirishimself in his book “Landlord and Tenant” Vol. II page 113 onwardswhich I would like to re-produce here:
“As it stood in its original form in the Rent Restriction Act of' 1948, Regulation I of the Schedule stated that “annual value"meant the annual value of the premises as assessed for thepurposes of any rates levied by any local authority under anywritten law during the month of November 1941. ByRegulation 2, premises were declared to be “exceptedpremises” if, being premises of the description mentioned inColumn 2, the annual value thereof exceeded the amountreflected in it. In Column 2, premises were described as (a)residential premises, and (b) business premises.
By Act, No. 6 of 1953, Regulation I, as it appeared in theRent Restriction Act, No. 29 of 1948, was deleted, andregulation 2, in the form in which it is reproduced inChapter 274 of the 1956 edition of the LegislativeEnactments, was adopted. The material change effectedby the Amending Act of 1953 was that the assessment of
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the annual value of the premises ceased to be related toa particular point of time – namely November 1941-but was linked instead to “any rates levied for the timebeing by any local authority under any written law”.
“In Muttucumaru v Corea 0) Sinnetamby, J. made the aptcomment: ‘The result of the amendment is that, in orderto determine whether premises are ‘excepted’ or not, onehas not to look for the annual value as on November1941, but to ascertain the annual value ‘as assessed forthe purposes of any rates levied for the time being’. Theeffect of the amendment is two fold: first, it excepts fromthe operation of the Act new construction after a certaindate and secondly, a fixation of the annual value is relat-ed not to November 1941 but to ‘the time being’. The. result is that, if the assessment of the annual value of anypremises which is below the figures in Column 3, is at anystage increased, the premises would become ‘excepted’if the total increased amount in the case of residentialpremises exceeds Rs. 2,000 and, in the case of businesspremises, exceeds Rs. 6,000. It is no longer fixed andinflexible. In order, therefore, to ascertain the annualvalue ‘for the time being’. That expression, it seems tome, must relate to the date of action.”
“However, the law on the subject has been changed onceagain by the Rent Act, No. 7 of 1972, which declares that“the Rent Restriction Act (Chapter 294), as amendedfrom time to time, is hereby repealed”. Regulation 3 of theSchedule to the Rent Act of 1972 now provides that “Anybusiness premises (other than premises referred to inRegulation 1 or Regulation 2) situated in any area speci-fied in Column 1 hereunder shall be excepted premisesfor the purposes of this Act, if the annual value thereof, asspecified in the assessment made as business premisesfor the purposes of any rates levied by any local authori-ty under any written law and in force on the first day ofJanuary, 1968, or where the assessment of the annualvalue thereof as business premises is made for the firsttime the first day of January 1968, the annual value as
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specified in such first assessment, exceeds the amountspecified in the correspondent entry in Column II.”
“It will be noted that the criterion adopted in this regard inthe Rent Act of 1972 is closer to that emerging from theoriginal Rent Restriction Act, No. 29 of 1948, than to theapproach reflected in the Amending Act, No. 6 of 1953, sofar as the method selected is concerned. The initial Act of1948 and the new Act of 1972,. in their respectiveRegulations incorporated in the Schedule, have in com-mon the feature that the annual value of the pemises isrequired to be determined as at an appointed datereferred to in the relevant Regulations. By contrast, theAmending Act of 1953 did not contain reference to anappointed date for this purpose, but enabled the annualvalue of the premises to be ascertained as and wheneach action was instituted".
I might also say that in addition to Muttukumaru v Corea {supra)decisions of Seneviratne v Perera^, Wijetunga v SenanayakeW,
Podisingho v Perera<4> and Don Gerald v Fonsekahave beenhighlighted by the counsel for the plaintiffs-appellants as cogentlyrelevant binding decisions. However these are decisions madeunder the Amending Act, No. 06 of 1953 and has no relevance tothe instant action to which applicable law is to be found in the RentAct, No. 07 of 1972. I might also say that the question whether thepremises in respect of which the action is brought are to be regard-ed as premises subject to the operation of the Act or as exceptedpremises has to be answered in limine is only an opinion expressedby Professor G.L. Peiris. In any event, there is no material placedby the plaintiffs-appellants to show that a grave miscarriage of jus-tice has been caused to them as a result of failure or neglect on thepart of the trial Judge to answer in limine the question whetherpremises are subject to the operation of the Act or exceptedpremises. I might also say that the learned District Judge has verycorrectly answered this question when he answered issue No. 01in the negative and issue No. 19 in the affirmative.
Another matter that was raised by the counsel for the plaintiffs-appellants is that the version of the defendant-respondent that
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there was no attornment is proved false by the documents markedand that this vital and material fact had not been considered orbrushed aside by the learned District Judge in answering theissues. Here again, I am unable to agree with the counsel for theplaintiffs-appellants for by letter dated 08.10,1991 marked P26 theplaintiffs-appellants have informed the defendant-respondent thatthey were the present owners and requested the defendant-respondent to attorn to .them which the defendant-respondent hadcomplied by accepting the plaintiffs-appellants as his landlord by 170letter dated 25.11.1991 marked P25.
Counsel for the plaintiffs-appellants also submits that the defen-dant-respondent has not challenged the annual value as providedfor by the Municipal, Councils Ordinance and as such the annualvalue stands as it is and as such the premises are exceptedpremises in the eyes of the law and as such the trial Judge shouldhave answered the issue with regard to excepted premises in theaffirmative and then there would not arise any necessity to answerthe rest of the issues. However in view of the Regulation 3 of theSchedule to the Rent Act, No. 07 of 1972 this argument cannot hold 180water.
According to the evidence of the plaintiffs-appellants the premis-es in suit earlier bore only one number, viz. Assessment No. 207but that thereafter owing to a structural alteration carried out by thedefendant-respondent, it became divided into two partitions and asa result of which for the first time two Nos. 207 and 207B came intoexistence. Though the 1st plaintiff-appellant in his evidence statedthat a dividing wall was built in the middle of the premises thus giv-ing rise to two units and two assessment numbers being given forthe first time. However cross-examination revealed that he knew lit- 190tie or nothing about the defendant-respondent or tenancy of thepremises or anything of the earlier history of the premises in suit.However evidence of the representative of the Colombo MunicipalCouncil from the Municipal Assessor’s Department revealed thattwo separate numbers have been given not because of a wall beingbuilt but because of a request made by the co-owner M.C.M. Ziyardand another who gifted the premises to the present plaintiffs-appel-lants. The letter marked V6 was never referred to by the plaintiffs-appellants which was addressed to the Municipal Assessor
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requesting that premises No. 207 be separately assessed as two 200units and be given two separate assessment numbers as there aretwo co-owners so that they could pay the rates separately.Evidence revealed that accordingly two numbers came into being.
It is to be seen that the letter V6 is dated 13.02.1990 by which datethe deed of gift No. 3813 dated 14.03.1983 marked V3 had beenexecuted. Thus the two signatories to V6 were uttering a blatantfalsehood.
On the other hand, according to the recital on the second pageof deed of gift marked V3, the premises are subject to the provi-sions of the Rent Restriction Act. It is to be noted that the premis- 210es themselves have not changed but then it had got two numbers,viz. 207 and 207B. Accordingly a change in the assessment num-ber and an increase in the annual value would not take the premis-es out of the Rent Act despite two numbers being given. In the caseof Sally Mohamed v Seyed Mohamed the facts were:-
“In November 1941, premises Nos. 102 and 104 wereassessed jointly with premises No. 100. In 1945premises Nos. 102 and 104 were assessed togetherbut separately from premises No. 100. In 1955 sepa-rate assessments were made for each of the two 220premises Nos. 102 and 104”.
It was held in that case:
“That under section 5(1) of the Rent Restriction Act,the standard rent of premises Nos. 102 and 104 .wasand is the amount of the assessment made for thepremises jointly with premises No. 100 in November1941, and that will remain unchanged, despite the sep-arate assessments made in 1945 and 1955, unless theboard in the exercise of the power given by the provi-so introduces an alteration by fixing separate standard 230rents for the two numbers. In the absence of such a fix-ation by the board, the 1941 assessment still holdsgood, and the standard rent has to be calculated onthat basis”.
In the case of The Chettinad Corporation Ltd. v Gamage andanother the facts were:
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“Tenement No. 273/2 was assessed in November 1948 atan annual value of Rs. 850. In 1951 the same tenementand the adjoining tenement No. 275 were consolidatedand assessed together at the annual value of Rs. 425’’.240
It was held:
“That under section 5(1) of the Rent 'Restriction Act,whatever may have been the result of the consolidatedassessment and the alteration of the number of thepremises, the annual value of premises No. 273/2 for thepurposes of the Rent Restriction Act remained at Rs. 850inasmuch as it was fixed at that figure when the assess-ment was made for the first time in 1948”.
Both the above cases were decided in terms of the Rent Restriction
Act, No. 29 of 1948. Again in Hewavitharana v RathnapalaW the 250
facts were as follows:
‘Two adjacent business premises Nos. 350 and 356,admittedly governed by the provisions of the Rent Act upto October 1975, were occupied by one tenant under thesame landlord. The tenant had connected the twopremises by an intercommunication door, At the requestof the landlord, in October 1975, the Municipal Councilgave one assessment number to both premises and fixedthe annual value at Rs. 8310 by addition of the two pre-vious annual values increased by Rs. 10. The landlord 260filed action against the tenant for ejectment'on the basisthat the premises were excepted premises. The questionarose as to whether for the purpose of regulation No. 3 asto excepted premises, the annual value of January 1968or the annual value fixed in October 1975, should beapplied. If the annual value of October 1975 is applicablethe premises become excepted premises.”
It was held:
“That the nature of the physical alterations done to thepremises is such that assessment of October 1975 did 270not give birth to new premises, attracting an assessmentfor the first time and therefore the January 1968 annual
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value should be applied to determine whether the premis-es were excepted premises or not.”
In Weerasena v A.D.R. PereraW the facts were as follows:
‘The plaintiff let premises No. 97, Stanley TillekeratneMawatha, Nugegoda to the defendants in 1972, whichpremises were excepted premises. The rear portion ofthe premises, a store room was later separatelyassessed as 97B. The plaintiff’s action for ejectmentfailed as premises No. 97B was alleged to be covered bythe Rent Act and there being no valid termination. TheCourt of Appeal reversed the judgment and directedejectment from the full premises.”
It was held:
“(i) Where there has been one contract of letting, themere assessment and sub-division of a part of thatpremises does not give rise to a separate letting orgive birth to a new premises, when the sub-divisionis an adjunct of the former.
The entity of protection is not the premises, but thecontract – Imbuldeniya v de S/'/va<10) applied.
Applying the test in Ansar v Husseirt11) in theabsence of any physical alteration to the premises97B it cannot be said that a new premises has comeinto existence.”
In Wakkumbura v Nandawathie (12) the facts were as follows:
“The respondent was the tenant in respect of 3 adjacentpremises Nos. 83, 82, 83/1, during the period 1958-1987.The premises were subjected to 4 assessments, twice asthree separate units and twice as a single consolidatedunit.
The plaintiff-appellant instituted action against the defen-dant-respondent to have her ejected from businesspremises formerly bearing assessment Nos. 83,81,83/1,and presently assessment No. 81. It was contended bythe plaintiff that the premises No. 81 is a business pemis-
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es, that it was first assessed as No. 81 in 1983, and thesaid premises are excepted premises. The defendant’s■ position was that the first assessment of the premises as 310a single unit and that as business premises was in 1970,and therefore the premises are not excepted premises.
The District Court held that, the premises are not except-ed premises which was affirmed by the Court of Appeal."
It was held in that case:
“(1) For the purpose of the existence of a new premisesit is essential that some kind of physical alteration tothe premises was carried out. In a situation wherethere is a physical alteration to a premises the extentand significance of that physical alteration would 320certainly, have to be taken into consideration.
(2) The premises are business premises. The first timethe premises were assessed as one unit as busi-ness premises after January 1, 1968, was in 1970.
There is no evidence of substantial physical alter-ation to the building thereafter; in this circumstance,it cannot be said that a new premises have comeinto existence and therefore the assessment in 1970will continue to govern the premises.”
The above 3 cases were decided with reference to the provi- 330sions of Rent Act, No. 7 of 1972.
it appears that the learned Distsrict Judge having consideredthe evidence placed before Court on a balance of probability hascome to a correct finding and the principles as laid down in theabove decisions would certainly substantiate his findings.
In the circumstances, I see no basis to interfere with the judg-ment of the learned District Judge. Accordingly the appeal of theplaintiffs-appellants will stand dismissed with costs fixed at Rs.10,000/-
DISSANAYAKE, J. – I agree.340
Appeal dismissed.