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SWAMI SIVAGNANDA v. BISHOP OF KANDY
NLR55V130
1953 Present: Gratiaen
J. and K. D. de Silva J.
SWAMI SIVAGNANANDA, Appellant, and THE BISHOP OF
KANDY, Respondent
S. C. 51, with Application 95-D. C. Kandy, L 3,444
Rent Restriction
Act-Distinction between tenancy and licence-Test of exclusive possession.
When a prospective purchaser of certain premises is permitted, pending his
purchase, to occupy the premises on payment of a stipulated sum of money, his
occupation is, at best, that of a licensee and not that of a contractual tenant
entitled to claim the protection of the Rent Restriction Act. If the
contemplated sale does not take place, the duration of the licence expires and
the licensee becomes a trespasser liable to be ejected at the instance of the
owner of the property.
"Although a person who is let into exclusive possession is prima facie to be
considered to be a tenant, nevertheless he will not be held to be so if the
circumstances negative any intention to create a tenancy. "
APPEAL
from a judgment of the District Court, Kandy.
S. J. V. Chelvanayakam, Q .C., with K. C. Kamalanadan and G. Candappa,
for the defendant appellant.
H. V. Perera, Q. C., with Cyril E .S . Perera, Q. C., and P.
Somatilakam for the plaintiff respondent.
Cur. adv. vult.
July 22, 1953. GRATIAEN J.-
This is a rei vindicatio action. The plaintiff purchased certain premises which
are situated within the Municipal limits of Kandy, from their previous owners in
June, 1951. Shortly afterwards he sued the defendant, who is the Manager of a
school, for, inter alia, declaration of title and for ejectment on the footing
that he was a trespasser on the premises. After trial, the learned District
Judge entered judgment in the plaintiff's favour as prayed for with costs.
The basis on which the defendant contested the plaintiff's claim in the lower
Court had not been very clearly defined in his pleadings, but the relevant facts
which form the background of his defence are not in dispute. The previous owners
of the premises had for some time been anxious to sell them in the open market,
and on 29th November, 1950, they entered into an informal agreement (P 6) with
the defendant whereby he undertook inter alia to purchase the premises for a sum
of Rs. 80,000 within a period of 90 days, or in the alternative to deposit
within that period a sum of Rs. 50,000 in part payment of the purchase price, in
which latter event he would enter into a formal notarial agreement binding
himself to complete the purchase not later than 30th April, 1951. A
contemporaneous, ancillary agreement was entered into whereby he was to be
permitted by the owners to occupy the premises immediately in anticipation of
his purchase " during the time preceding the first instalment ", paying a sum
calculated at the rate of Rs. 200 per mensem as consideration '"' for the usage
of the property " during the interim period. The defendant entered into
occupation in pursuance of this ancillary agreement, which made no express
provision, however, for the eventuality of his defaulting in his principal
obligation to complete the purchase within the stipulated period.
As events turned out, the defendant had been over-optimistic as to his prospects
of collecting sufficient funds to implement his promise to purchase the
property. He was granted one or two short postponements of the date for
completion, but ultimately the owners informed him that, unless the sale was
concluded on or before 2nd March, 1951, they would sell the premises to some one
else. He failed to make payment within that time, and it was in these
circumstances that the plaintiff became the purchaser. The defendant refused to
vacate the premises. In his correspondence with the previous owners before the
action commenced, he took up the untenable position that the non-notarial
agreement of sale in his favour (which was of no force or avail in law quite
apart from the expiry of the stipul
