KEELLS TOURS (PRIVATE) LIMITED

KEELLS TOURS (PRIVATE) LIMITED

VS.

J.B.DISSANAYAKE

SUPREME COURT
SISIRA J.DE ABREW J.
PRIYANTHA JAYAWARDENA P.C., J.
VIJITH K. MALALGODA P.C., J.
SC APPEAL 50/2014
CA 904/2000 (F)
DC COLOMBO 18292/MR
29.06.2017.

Damages - Lease agreement - Notice of terminating lease - Calendar month - Breach of contract - Vehicle rent.

Plaintiff - Respondent leased his vehicle to Defendant - Appellant for a period of 2 years. Monthly rental was Rs. 30,000/-. One calendar month's notice should be given to either party for handing back or withdrawal of vehicle. The important question is whether the Defendant - Appellant terminated the lease agreement as per clause 10 of the lease agreement.

HELD:

1. When a party to a contract violates the contract, the innocent party cannot be allowed to suffer. The party who violated the contract must pay damages to the innocent party to compensate the loss suffered by him as a result of the violation of the contract. In such a situation the court has the power to award compensation. I have elsewhere in this judgment held the Defendant - Appellant had violated the contract. Considering all these matters I hold that the Defendant - Appellant should pay compensation to the Plaintiff - Respondent.

2. When the Defendant - Appellant without any notice to the Plaintiff-Respondent requested him to take back the vehicle it was not possible for him to find a person who would take the vehicle on rent or lease immediately. But it cannot be said that he would not be able to give the vehicle on rent or lease during the entire period of two years. In my view, rental for five months (Rs. 30,000/-x5 Rs.150,000/-) would be justified. I therefore hold that the Plaintiff - Respondent is entitled to Rs.150,000/-.

Authorities referred to:-

1. The Law of Contracts by CG Weeramanthry Vol. 11 page 925

Harsha Soza PC Rajinda Perera with for the Defendant - Appellant - Appellant Shamir Zavahir for the Plaintiff- Respondent- Respondent.

Cur.adv.vult.

September 14,2017

Sisira J. De Abrew J.

The Plaintiff-Respondent-Respondent (hereinafter referred to as the Plaintiff-Respondent filed action in the District Court to recover a sum of Rs.250,000/ - as damages from the Defendant-Appellant-Appellant (hereinafter referred to as the Defendant-Appellant) on the basis that the Defendant-Appellant violated the lease agreement entered between the Plaintiff-Respondent and the Defendant-Appellant. The learned District Judge, by judgment dated 13.11.2000, held in favour of the Plaintiff-Respondent. Being aggrieved by the said judgment the Defendant-Appellant appealed to the Court of Appeal. The Court of Appeal, by its judgment dated 7.5.2013, dismissed the appeal. Being aggrieved by the said judgment of the Court of Appeal, the Defendant-Appellant has appealed to this court. This Court, by its order dated 27.3.2014, granted leave to appeal on the questions of law set out in paragraphs 14{a),(b),(c),{d) and (e) of the petition of appeal dated 17.6.2013 which are set out below.

1. Has the Court of Appeal erred in failing to consider that there is acceptable evidence in this case which clearly shows that the Defendant has terminated the said Lease Agreement (PI) with one (1) calendar month's notice?

2. Has the Court of Appeal failed to consider that in terms of the provisions of the said lease Agreement (PI) written notice of termination is not necessary to validly terminate the said Lease Agreement (PI)?

3. Has the Court of Appeal erred in failing to appreciate that on the facts and circumstances of this case no damages are payable to the Plaintiff by the Defendant?

4. In any case, has the Court of Appeal erred in failing to appreciate that the maximum damages payable to the Plaintiff is a sum not exceeding Rupees Thirty Thousand [Rs.(LKR)30,0007=]

5. Has the Court of Appeal erred in failing to consider that a clause permitting payment of the monthly lease

Click Here to Read the rest of this document