1950 Present: Jayetileke C.J. and Swan J.

DIAS, Appellant, and PERIES, Respondent

S. C. 537-D. C. Mannar, 10,457

Rent Restriction Act, No. 89 of 1948-Sections 1 and 8--Prohibition of excessive advance of rent-Scope of such prohibition.

Rent Restriction Ordinance, No. 60 of 1942-Authorised rent-Section 3-Meaning of " any period ".

(i) The provision in section 8 of the Rent Restriction Act, No. 29 of 1948, that a landlord cannot retain in his hands, as an advance of rent, any amount exceeding the authorised rent for a period of three months is not applicable to an advance of rent received under a contract of tenancy entered into prior to the date of commencement of the operation of the Act, viz., January 1, 1949.

(ii) Where an indenture of lease, which was entered into a few months before the Rent Restriction Ordinance, No. 6Q of 1942, came into operation, provided that the yearly rental should be paid in monthly instalments-

Held, that the provisions of section 3 would be applicable in respect of the period of the lease subsequent to the date when the Ordinance came into operation and the lessor, therefore, was not entitled to recover any rent in excess of the authorised rent from that date.

APPEAL from a judgment of the District Court, Mannar.

H. V. Perera, K.C., with J. M. Jayamanne, for plaintiff appellant.

E. B. Wikramanayake, K.C., with V. K. Kandaswamy, for defendant respondent.

Cur. adv. vult.

August 4, 1950. JAYETILEKE C.J.-

On March 30, 1947, the plaintiff sold by public auction the lease of a tiled boutique for a period of four years commencing from July 1, 1947, and the defendant purchased it at Rs. 2,150 a year. Thereafter the plaintiff and the defendant entered into an indenture of lease bearing No. 360 dated April 7, 1947 (P1). At the execution of P1 the defendant paid to the plaintiff a sum of Rs. 1,433.33 in advance. P1 provides that the yearly rental of Rs. 2,150 should be paid in monthly instalments of Rs. 179.16 and that the 1st instalment should be paid on or before June 30, 1947, and the other instalments on or before the last day of each month. In view of this provision in the lease the advance must be treated as a deposit made to secure the payment of the rent. The defendant paid the instalment that fell due on June 30, 1947, but failed to pay the instalments that fell due thereafter. On June 2, 1948, the plaintiff instituted this action for the recovery of a sum of Rs. 370.76 as balance rent after giving the defendant credit for the deposit, for ejectment and damages.

The defendant resisted the plaintiff's claim for ejectment on the ground (1) that under the Rent Restriction Ordinance, No. 60 of 1942, he was not entitled to recover Rs. 179.16 as rent and (2) that under the Rent Restriction Act, No. 29 of 1948, he was not entitled to retain in his hands more than three months' rent as an advance.

The Rent Restriction Ordinance came into operation in the District of Mannar on July 10, 1947. It is admitted that the authorised rent of the premises is Rs. 50 a month. The learned District Judge held that the plaintiff could not recover more than the authorised rent from July 10, 1947. He held further that under S. 8 of the Rent Restriction Act, No. 29 of 1948, the plaintiff could not retain in his hands as an advance of rent any amount exceeding the authorised rent for a period of three months, and that the defendant was entitled to set off the balance sum of Rs. 1,220 against the rent that accrued between July 30, 1947, and the date of the institution of the action. Giving the plaintiff credit for Rs. 660 being the rent he was entitled to recover from July 1, 1947, up to the date of action he held that there was an excess amount in the plaintiff's hands. He dismissed the plaintiff's action and entered judgment for the defendant in reconvention for a sum of Rs. 788.33. At the argument before us two points were raised by Counsel for