Thangadorai Nadar V. Esmailjee

1954 Present: Gratiaen J. and Fernando A.J.

THANGADORAI NADAR et al, Appellants, and G. H. ESMAILJEE et al.,
Respondents

S. C. 393-D. C. Colombo, 22,990M

Rent Restriction Act-Payment of rent by cheque-Return of cheque after it becomes " stale "-Effect on question of rent being " in arrear "-Tender of rent.

When a landlord accepts payment of rent by cheque but does not present the cheque at the bank and returns it to the tenant after it becomes " stale ", the failure of the tenant to make a fresh payment within a reasonable time after the stale cheque is returned does not have the effect of a forfeiture of the tenant's statutory protection. Rent for any particular month is not " in arrear " within the meaning of the Rent Restriction if it was paid or tendered by the tenant within the stipulated period.

APPEAL from a judgment of the District Court, Colombo.

H. V. Perera, Q.C., with H. W. Tambiah and S. Sharvananda, for the defendants appellants.

N. E. Weerasooria, Q.C., with V. A. Kandiah and F. Arulambalam, for the plaintiffs respondents.

Cur. adv. vult.

July 20, 1954. GRATIAEN J.-

This is an appeal against a decree for the ejectment of two statutory tenants (who are partners) from business premises protected by the Rent Restriction Act, No. 29 of 1948. The grounds for ejectment upheld by the learned District Judge were :

(a) that their rent had been " in arrears for one month after it became due ", and

(b) that the premises were "reasonably required" by the landlords for the purposes of their own business.

In my opinion, neither of these allegations was established at the trial.

The practice during the relevant period was for the tenants to pay Tent by cheque at the end of each quarter. Accordingly on 4th July, 1949 they forwarded a cheque to the landlords' proctor in payment of rent for April, May and June. Similar cheques were forwarded on 28th September, 1949 (for July, August and September) and on 24th January, 1950 (for October, November and December).

Throughout this period, an earlier tenancy action was pending between the landlords and one of the tenants. For that reason, the cheques referred to were accepted " without prejudice to the rights of the plaintiffs in these proceedings ". This was no doubt a wise precaution to take but, instead of presenting the cheques for payment without unreasonable delay as they should have done, the landlords retained them in their proctor's custody without reference to the tenants until the conclusion of the trial.

The earlier action was dismissed early in February, 1950 owing to an irregularity resulting from non-joinder of a necessary party. Immediately thereafter; the cheques dated 28th September, 1949 and 24th January, 1950 were belatedly presented for payment and were realised. The earlier cheque dated 4th July, 1949 was however not presented to the bank because the landlords' proctor assumed (perhaps correctly) that it had become " stale " during the long period when it had been retained in his hands. This cheque was returned to the tenants on 23rd February, 1950 without any request that a fresh cheque should be forwarded in place of it. Four days later, a formal notice was sent to the tenants terminating the contractual tenancy with effect from 31st March 1950. The landlords no doubt hoped that the tenants (whose ability and anxiety to avoid the statutory consequences of falling into arrears of rent cannot be disputed) would make some tactical blunder and thereby lose the protection of the Act. This (it is now submitted) is precisely what did occur. No further payments were made until the present action was instituted in May, 1950.

The tenants are admittedly also entitled to credit in a sum of Rs. 269.51 representing rent previously paid in excess of the authorised rate, and a further sum of Rs. 400 paid by way of advance at the commencement of the contract of tenancy in 1945. Th

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