Chogley v East African Bakery (Civil Appeal No. 1025 of 1950) [1953] EACA 11 (1 January 1953)

## APPELLATE CIVIL

## Before HEARNE, C. J., BOURKE and WINDHAM, JJ.

## ISMAIL MOHAMED CHOGLEY, Appellant (Landlord)

## THE EAST AFRICAN BAKERY, Respondent (Tenant) Civil Appeal No. 1025 of 1950

Landlord and Tenant—Increase of Rent (Restriction) Ordinance, 1949—Section 16 (1) (a), (b)—Application by landlord for eviction—Alleged non-payment of rent, wanton waste and letting of business premises for residential purposes— Whether "illegal use" or breach of obligations of tenancy-Section 16 (2)-Whether Board exercised discretion judicially—Section 33B—Board visiting premises to form opinion on alleged waste-Board rejecting evidence and acting on own observations—Whether judicial—Section 5 (1)—Whether Board empowered to make an order for estimated cost of repairs.

The landlord of premises, let for business purposes, purported to determine the tenancy by notice to quit and then applied to the Board for an order for recovery of possession alleging irregular payment of rent, wanton acts of waste and use of premises for residential purposes. The Board decided, in fact, that there had been slight delays in payment of rent, but that the landford had failed to prove that a portion of the premises had been used for residential purposes, and that such damage as had been done did not warrant an order for ejectment. The Board also took the view that even if substantial damage had been done, it had no jurisdiction to try an issue for payment of repairs for which the landlord must pursue his ordinary civil remedy. The Board, having heard evidence by the landlord of alleged acts of waste, had elected to visit the premises and, on its own observations and without other evidence, had rejected the landlord's evidence. The Board rejected the application. The landford appealed. The appeal was set down for hearing before three Judges.

*Held* $(8-1-53)$ .—(1) The Board was correct in finding in fact that there was insufficient evidence of user of the premises for residential purposes, but was in error in considering this an<br>"illegal use" within the meaning of section 16 (1) (b) of the Ordinance. What was alleged was a breach of one of the obligations of tenancy as envisaged by section (1) (a). This misconception did not invalidate the Board's rejection of this allegation.

(2) The irregular payment of rent by the tenants as found by the Board was a<br>breach of one of the obligations of tenancy, but the Board had acted within the discretion afforded by section 16 (2) in deciding that it was not reasonable to make an order for possession.

(3) The Board, in visiting the premises and forming its own opinion as to acts of waste and preferring this opinion, not open to cross-examination, to evidence adduced<br>by the landlord, had cancelled out legal evidence on the strength of its own observations not in evidence. In so doing, the Board had not acted judicially and the application was, upon this ground, remitted to the Board to be reheard.

(4) In construing the Ordinance conferring jurisdiction upon the Board the wording<br>of section 5 (1) (*n*) must be strictly construed. Upon the Board jurisdiction was an<br>express conferment and not a matter of implication. was not entitled to take into account a claim for repairs which did not arise expressly<br>out of any section of the Ordinance. The Board had correctly declined jurisdiction on this issue.

Cases cited: Sheikh Noordin Gulmohamed v. Sheikh Bros. Ltd., (1951) 18 E. A. C. A. 42; Meghji Karman v. Karamshi Devraj, (1953) 20 E. A. C. A. 47.

D. N. Khanna for appellant.

Madan for respondent firm.

JUDGMENT.—Ismail Mahomed Chogley is the landlord of premises to which the Increase of Rent (Restriction) Ordinance, 1949 (hereinafter referred to as the Ordinance), applies. The East African Bakery were the tenants of the premises and the landlord purported to determine the tenancy on 1st November, 1949, by notice dated 23rd September, 1949. The landlord applied on 8th February, 1950, to the Rent Control Board for an order for the recovery of possession on the grounds (a) that the tenants did not pay their rent regularly, (b) that they had committed "wanton acts of waste" on the premises, and (c) that "in breach of covenant" they had used a portion of the premises for residential purposes. The Board was also asked for an order for the payment of Sh. 2,869 as damages in respect of the alleged acts of waste, for mesne profits and for costs.

In the course of the argument the case of S. N. Gulmohamed v. Sheikh Brothers Limited, 18 E. A. C. A. 42 was repeatedly referred to. In that case the landlord sought an order for possession on the grounds that the tenants were in arrears of rent and had committed acts of waste. He also asked for "judgment for Sh. 10,000 being the cost of labour and material required to put the buildings in its original state". The Rent Board declined to give the applicant the relief he claimed and dismissed his application without costs. The Court of Appeal dismissed the appeal taken by the landlord and adopted the view of the Supreme Court that as the Board did not entertain the application at all, there was in fact "no determination by the Board of the question which they were required to determine". It was suggested in the judgment of Lockhart-Smith, J. A., with which Nihill (President), agreed, that proceedings by way of prerogative writ could appropriately be taken.

The instant case is very different from Civil Appeal 18 E. A. C. A. 42. In the instant case the Board, so far from refusing to entertain the application, adjudicated upon the merits of it. The Board decided, as was admitted by the tenants, that there had been slight delays in the payment of rent, that the landlord had failed to prove or even to raise a presumption that a portion of the premises had been used for residential purposes and that "such damage" as had been done "did not warrant an order for ejectment". The Board also took the view that even if substantial damage had been done, it had no jurisdiction "to try the issue of payment for repairs". "Failure of a tenant", it was said "to maintain the premises is an obligation under the ordinary law (except where agreement otherwise provides) and the Board considers that if the landlord considers himself aggrieved by the condition of the premises, he can pursue his ordinary civil remedy". That means, or we take it to mean, that the Board would not make an order for the payment of the cost of repairs, even if the damage to the premises went beyond fair wear and tear. It is to be noted that this view of the Board was not pronounced upon in Civil Appeal 18 E. A. C. A. 42 where, as we have said, "judgment" for the cost of repairs was asked for by the landlord. As the Court of Appeal decided that no appeal lay, it was not even considered. Upon its findings of fact in the instant case the Board dismissed the application of the landlord in its entirety and made no order as to costs. The landlord has now appealed.

Two of the questions decided by the Board may be dealt with shortly. On the question of whether the premises had been used for residential purposes, the only evidence of the landlord was "when I rented the premises I informed the tenant he must not use any part of the premises for residential purposes. I haven't seen anybody residing there but from the bed in the stores I think somebody must be sleeping there at night". The Board appears to have been wrong in thinking that an "illegal use" had been alleged (section 16 (1) (b) of the Ordinance). What was alleged was a breach of one of the obligations of the tenancy (section 16 (1) $(a)$ ). But the Board held that there was insufficient evidence to call on the

tenants to rebut the allegation of fact that a portion of the premises was being used for residential purposes, and with this we entirely agree It was also found by the Board, as we have said, that the tenants did not pay the rent regularly. This may be regarded as a breach of one of the obligations of the tenancy but no order for possession may be made by reason of this breach, unless the Board considers it reasonable to make such an order (section 16 (2)). This was an overriding requirement, so that even if the tenants were in breach of one of the obligations of the tenancy, no order for possession may properly be made, unless the Board, exercising its discretion in a judicial manner, thinks it a reasonable order to make. The Board exercised its discretion, it has not been argued that it did not do so in a judicial manner and we have no reason to think that it did not do so.

There remains the finding of the Board that such damage as had been done to the premises "did not warrant an order for ejectment". The reasons for this finding as set out by the deputy chairman, are these. "The Board heard the evidence of an architect regarding the alleged damage and visited the premises. The Board then decided that such damage as they had seen would not warrant consideration of an order for ejectment of the tenant, the damage being very slight; and the sum total not more than could reasonably be expected where such a business is carried on. The Board considers that the architect's valuation of the cost of repairs is very high."

Under section 33B of the Ordinance "the Board ... may, for the purpose of carrying out its duties and functions ... enter upon and inspect any dwellinghouse or business premises". Under section 5 (2) "the Central Board... may appoint and employ officers, valuers, etc., for the better carrying out of the provisions of this Ordinance: Provided that when the Central Board... has deputed a valuer, inspector, etc., to inspect or view any premises, any report made in that behalf shall be communicated to the landlord or tenant or their representatives." But neither of these sections nor any other section of the Ordinances empowers the Board to found its decision exclusively on observations it has made. In S. N. Gulmohamed v. Sheikh Bros., 18 E. A. C. A. 42 it was said there "the power of the Board to act on less than legal evidence has disappeared" and what the Board in the instant case did was to cancel out legal evidence by its own observations which were not evidence and to found its decision exclusively on those observations which, so far as we are aware, were not even communicated to the landlord-appellant. We are satisfied that the order of the Board must be set aside and that the case must be remitted to the Board for it to be reheard as if it had been an application which was founded solely upon the ground that the tenants had committed wanton acts of waste on the premises. The respondents (the tenants) who resisted the appeal must pay the appellant (the landlord) his costs of the appeal.

Assuming that at the rehearing the Board finds that the tenants did commit wanton acts of waste, can the Board order them to pay the landlord a sum of money equivalent to the estimated cost of repairs, accepted by the Board, of the said acts of waste? In Meghji Karman v. Karamshi Devraj, 20 E. A. C. A. 47 it was held that the Board has jurisdiction to hear a claim for the recovery of key-money paid contrary to section 18 of the Ordinance for the reason that "a claim for the recovery of money illegally received by a landlord under section 18 was a claim arising under the Ordinance". The decision does not help us in the instant case. It was founded on the view taken of a particular section which is not relevant in the case before us. Section 5 (1) $(n)$ of the Ordinance reads "The Central Board... shall have power to do all the things which it is required or empowered to do by or under the provisions of this Ordinance and in particular

shall have power $\ldots$ (*n*) to exercise jurisdiction in all Civil matters and questions arising under this Ordinance". The power is expressly conferred on the Board to make an order for the recovery of rent, mesne profits and service charges. but the power is not expressly conferred to make an order for the recovery of the costs of repairs. In the course of the judgment of the court in Civil Appeal No. 8/52 it was said: "We agree with Mr. Khanna that in testing whether a statute has conferred jurisdiction on an inferior court or a tribunal such as a Rent Control Board, the wording must be strictly construed: It must in fact be an express conferment and not a matter of implication." If we follow this dictum, then, as the Rent Board has not expressly been given the power to make an order for the recovery of the cost of repairs necessitated by "wanton waste", it has no jurisdiction to make the order. In the view we take of section 5 (1) $(n)$ , in the exercise of the Board's functions under the Ordinance several matters of a civil nature, ancillary to the discharge of its main functions, must necessarily arise. To give just one example was the notice given by a landlord legal notice? The Board has power to decide those matters or questions. Indeed it must be empowered to decide those matters or questions, "to exercise jurisdiction over them", in order adequately to discharge its main functions, but to say that is not to say it can exercise jurisdiction to make an order for the estimated cost of repairs, when no such jurisdiction has been expressly conferred. In the argument of Mr. Khanna, for the appellant, the law administered by the Rent Board is the law relating to landlord and tenant and the law contained in the Indian Transfer of Property Act on which the Rent Ordinance has been superimposed. The Board would certainly take into account principles of law which have been enacted by the Indian Transfer of Property Act if they were applicable in a case coming before the Board. The Board would take into account, for instance, that a lessee is liable for permissive waste and must keep the property in as good a condition as he found it and must yield up the property in the same condition subject only to fair wear and tear and irresistible force. But the jurisdiction in effect to pass a decree for permissive waste cannot arise out of the Indian Transfer of Property Act, it can only arise out of the Rent Ordinance. In Meghij Karman v. Karamshi Devraj, 20 E. A. C. A. 47 it was held that a claim for key-money was a claim which expressly arose out of section 18 of the Ordinance. A claim for repairs cannot be said to arise expressly out of any section of the Ordinance. In our opinion the view taken by the Rent **Board** in this matter is right. $\mathbf{F}$