013-NLR-NLR-V-71-A.-M.-PREMADASA-Appellant-and-V.-ATTAPATTU-Respondent.pdf
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SIRIMANE, J.—Premadaaa v. AUapaliu
1968Present: Sirimane, J., and de Kretser, J.A. M. PREMADASA, Appellant, and V. ATTAPATTU, Respondent, 8. G. 263/66—D. G. Colombo, 50/ R.E.
Rent-controlled previses—Division of the premises into a number of separatepremises—Authorised rent for each of them—Computation—Meaning ofexpression “ premises ”—Rent Restriction (Amendment) Act JO of 1961,s. 11—Rent Restriction Act. (Cap. 274), ss. 5, 7.
Where a rent-con trolled building which was assessed prior to November 1941is subsequently divided into a number of separate premises assessed separately,the number of new premises takes the place of the old and the basis of theauthorised rent for each of them is the amount of the annual value fixed whenthey are assessed as separate promises for the first time.
Ar
PEAL from a judgment of the District Court, Colombo.
Ravoanathan, Q.G., with 8. W. Jayasuriya and W. Karthigesu,for the Defendant Appellant.
E. A. G. de Silva, for the Plaintiff-Respondent.
Gur. adv. vult.
July 22, 1968. Sirimane, J.—
The only question we were called upon to decide in this appeal waswhether the learned District Judge was right in basing his calculationof the “authorised rent” for the premises in question on an assessmentmade in 1948. On that basis the authorised rent (it was conceded) wasRs. 252*72, and the Defendant was in arrears of rent and liable to beejected.
The Defendant’s case is that the premises had been assessed prior toNovember, 1941 and the correct basis for calculation of the authorisedrent was the assessment made in that year. It was conceded againthat had the premises in question been assessed in 1941, the correctauthorised rent would be Rs. 171*92, and the Defendant would not be inarrears. According to Counsel for the Defendant he would have paidrent in excess of the authorised rent calculated on that basis, and aftersetting off the excess so paid for the period during which he was in arrears(1.6.61 to 31.8.63) there would still be due to him from the plaintiff asum of Rs. 723*40 after taking into account various payments he had made.These figures were not disputed.
The premises in respect of which this action has been brought anddescribed in paragraph 2 of the plaint bearing Assessment No. 53, ispart of an old building. Any doubts as to the exact meaning of the word“ premises ”, have now been dispelled by the definition of that word
SIRIMANE, J.—Pretnadaaa v. AUapattu
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in section 11 of the Rent Restriction (Amendment) Act 10 of 1061.“ Premises ” mean any building or part of a building together with theland appertaining thereto.
The evidence led in the case which the learned District Judge hasaccepted shows that the old building consisted of two such premisesNob. 63 and 65, which had been assessed as such for the first time in 1948.(No. 63 had later been sub-divided, but that fact is not material for thedecision of this case.) In fact, an agreement entered into between theparties on 25.2.57 referred to the two different *' premises ” Nos. 63and 66.
The learned District Judge was therefore right, in my opinion, when hereached the conclusion that the subject matter of the present action“ as it exists today was not in existence as a separate entity in1941 ”.
The old building had been assessed prior to 1st November, 1941. Itthen bore the No. 63. The argument for Defendant is that once thishad been done, the standard rent could never be changed by subsequentassessments of different parts of the building. It was submitted thatthe standard rent remained the same as in 1941, for each one of thedifferent parts of the building which were assessed as separate entitiesin 1948. The argument was based entirely on the second proviso tosection 5 of the Rent Restriction Act (Cap. 274) which reads as follows :—
“ Provided, further, that in the case of any such premises whichare first assessed or first separately assessed after the appointed date,the Board may, on the application of the tenant, fix as the standardrent of the premises such amount as may in the opinion of the Board befair and reasonable.”
As the tenant had made no such application, it was submitted that thestandard rent was that of the whole building as it stood in 1941.
I cannot accede to this argument.
If. one applies the proviso in that manner, then, where a building(premises) is first assessed after the appointed date such premiseswould have no standard rent unless the tenant chooses to get that rentfixed.
The proviso, in ray view, was enacted for the benefit of the tenant,who if he finds that the first assessment of a building or a part of it, afterthe appointed date is such, that it compels him to pay a high rent, thenhe may seek the assistance of the Board to obtain relief. It is no authorityfor the proposition that where premises (as defined in the Act) are firstassessed or first separately assessed after the appointed date, and thetenant chooses not to make any application to the Board, then theprovisions of section 5 (1) relating to assessments made efter the appointeddate become inoperative.
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DE KRETSER, J.—Premadata v. Attapattu
Our attention was drawn to two decisions of this Court. The firstis the case of Chettinad Corporation Limited v. damage1. In that casethe subject matter of the action bore assessment No. 273/2 and wasassessed for the first time in November, 1948 at an annual value ofRs. 850/-. There was a tenement adjoining it bearing assessmentNo. 275. In 1951 the two premises were consolidated and assessedtogether at an annual value of Rs. 425/-. The court held that theannual value of premises No. 273/2 remained at Rs. 850/-. It will beseen that (unlike in the present case) these premises existed as a separateentity and were assessed as such when the first assessment was made.Basnayake, C.J., in the course of his judgment said that the annualvalue remained at Rs, 850/- “ as the annual value of the premises inquestion was fixed at that figure when the assessment was made for thefirst time in 1948 ”.
The second is the case of Sali Mohamed v. Syed Mohame.d 2. There,there were three premises bearing three different assessment Nos. 102,104 and 100. They were so numbered and in existence on ist November,1941 and had been assessed together. In 1945 the premises bearingNos. 102 and 104 were assessed together again, but separately fromNo. 100. The subject matter of the action consisted of the premises bearingthese two numbers. In 1955 separate assessments were made for eachof the two premises bearing Nos. 102 and 104. The court expressedthe view that despite the separate assessments in 1945 and 1955 thestandard rent of the premises bearing Nos. 102 and 104 was and is,the amount of the assessment made for the premises jointly withpremises No. 100 in November, 1941. The case was, however, decidedon a different point, and the learned District Judge looked upon thesedicta as obiter.
Though, with respect, I would have been inclined to take a differentview in that case, I think, the facts there can be distinguished from thefacts here. The “ premises in question ” in that case were, in fact, inexistence as separate entities bearing separate assessment numbers, andhad been assessed (though in conjunction with other premises) in 1941.In the present case the premises in question were not in existence as aunit that had been assessed, prior to 1948. They were assessed for thefirst time only in that year.
I would affirm the judgment of the learned District Judge and dismissthe appeal with costs.
de Kbetser, J.—
The facts are set out in the judgment of Sirimane J. with whom I agree.It appears' to me that Section 7 of the Rent Restriction Act throwssome light on the matter in dispute. It says :
“ Where any premises to which this Act applies are let or occupied inseparate parts (whether furnished or unfurnished) which are not separately» (1960 62 N. L. R. 86.«{1962) 64 N. L. R. 486.
DE KRETSER, J.—Prctnodasa v. AttapaUu
65.
assessed for the purpose of rates, and the aggregate of the amount demandedor received as the rent of such separate parts exceeds the authorisedrent of the premises, the landlord shall be deemed to have contravenedthe provisions of Section 3 of this Act ”—in other words there is only• one assessed premises despite several parts of it being let.
Why is there a difference when the several parts are assessed ? Theanswer appears to be that then they become separate premises. Itwould be well to remember that a premises according to the definitionis a building or part of a building. Mr. Renganathan for the Defendantsubmits that what remains of the original premises after parts of itbecome separate premises would still command only a rent in accordancewith the 1941 (or first) assessment. But that appears to me can onlybe correct if what remains has not been assessed at the break up into| units as a separate premises—which would be a question of fact. If abuilding assessed as a premises in, 1941 is divided and each portion isseparately assessed then it appears quite impossible to claim that onesuch division in preference to another remains the original premises.The numbers that each separate unit carried must not be allowed tocloud the issue.
The resulting position is then that a number of new premises take theplace of the old and the basis of the authorised rent for each of them is theamount of annual value fixed when they are assessed as separate premisesfor the first time. The proviso to Section 5 (1) allows a tenant to applyto the Board to fix a standard rent for any such premises if the Boardagrees with the tenant’s submission that the authorised rent of such aseparate premises that has come into being is unfair and unreasonable.It therefore appears to me that the object of the Rent RestrictionAct which is to safeguard the tenant is in no way thwarted when apremises dies in giving birth to others.
Mr. Renganathan cited the case of the Chettinad Coip., Ltd. v. Gamage l.There a tenement which bore the number 273/2 was assessed for the timein 1948 at an annual value of Rs. 850/00. In 1951 the same tenementwith the adjoining tenement No. 275 were consolidated and assessedtogether at the annual value of Rs 425/00 and given the number 56.Basnayake C.J. with whom H. N. G. Fernando J. agreed said : “ whatevermay have been the result of the consolidated assessment and the alterationof the number of the premises, the annual value of the premises for thepurposes of the Rent Restriction Act remains Rs. 850 00 as the annualvalue of the premises in question was fixed at. that figure when theassessment was made for the first time in 1948.” Here it is to be notedthat what was let to the Defendant was old number 273/2- now bearinga new number 53 and sharing an assessment with No. 275. It seemsclear that in terms of Section 5 the amount of the annual value of thisbuilding as specified in the assessment of November 1941 must govern theauthorised rent. This decision then hardly helps at all in.the solution of
* {J960) 62 N. L. R. 86.
11 – PP 006137 (98/08)
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DE KRETSER, J.—Premadaaa v. AUapattu
the present problem. Mr. Renganathan invited our attention to thecase of Sally Mohammed v. Seyd Mohammedl. The facts as gatheredfrom the judgment are as follows :—
Premises 100, 102 and 104 in 2nd Cross Street, Pettah, in 1941 wereassessed together in a single assessment. In 1945 No. 100 was assessedseparately but Nos. 102 and 104 were assessed together. In 1955Nos. 102 and 104 were each separately assessed. The question that arosefor determination was what was the authorised rent the defendant whohad-taken both on rent would have to pay. In appeal, the case turnedon another matter which is not relevant to the present case but in itH. N. G. Fernando J. with whom L. B. de Silva J. agreed, in an obiterdictum gave their opinion on what should be the correct authorisedrent and how it should be arrived at. I regret to find that I cannotagree with them. It is correct that the proviso to Section 5 (1) does notstate that any assessment is to determine the standard rent on which theauthorised rent is based. It does not need to, for that is found in Section 6itself and the proviso only helps a tenant with regard to a premisesassessed after 1941 or first separately assessed after 1941 to ask theBoard to fix a standard rent which is fair and reasonable if they consideredthe authorised rent calculated on the basis of the assessment, too high.I entirely agree that if two parts have been assessed jointly whetherbefore or after 1941, that the authorised rent would have to be calculatedin terms of Section 5 (1) (a) by reference to that assessment. But Icannot agree that if thereafter separate assessments are made for eachpart that it is the Board that would have to fix a standard rent for eachor both parts. It will be seen that the proviso makes provision only forapplication by a tenant for the fixing of a fair rent. That presupposesthat otherwise the tenant will have to pay a rent which is in accordancewith the new assessment. If he thinks that rent unfair and unreasonablehe can apply to the Board and if the Board agrees with him, the Boardwill fix a rent which it thinks is fair and reasonable in lieu of the rentcalculated on the basis of the assessment now made for the first time.It will be noted no provision is made for a reference to the Board by alandlord—presumably because he has been heard by the assessors and isthereafter bound by the assessment made for the premises. It is myview that when a premises, that is in terms of the definition of premises,a building or part of a building, has been assessed in 1941 that theauthorised rental has to be calculated in terms of that assessment. If itis assessed for the first time after 1941 then that first assessment is the onewhich governs the authorised rent, but that is subject to the right of atenant to get a rent which is in the opinion of the Board fair and reasonablefixed in lieu of such authorised rent.
In the instant case for the reasons I have already set out, I am of theopinion that the Trial Judge has correctly decided that judgmentshould be for the plaintiff as prayed for and I dismiss the appealwith costs.
Appeal dismissed.
1 {1962) 64 N. L. R. 486.