Padamshi v Hirji (Civil Appeal No. 32 of 1951) [1952] EACA 15 (1 January 1952)

## COURT OF APPEAL FOR EASTERN AFRICA

Before Sir Barclay Nihill (President), Sir Newnham Worley (Vice-President) and SIR HECTOR HEARNE, C. J. (Kenya)

POPATLAL PADAMSHI, Appellant (Original Appellant)

ν.

SHAH MEGHJI HIRJI, Respondent (Original Respondent) Civil Appeal No. 32 of 1951

(Appeal from the decision of H. M. Supreme Court of Kenya, Bourke, J.)

Landlord and Tenant-Increase of Rent (Restriction) Ordinance, 1949.

The appellant-tenant was required to give possession of a shop and stores the property of the respondent under section 16 (1) (e) (ii) of the Ordinance. At the hearing before the Board the respondent's advocate withdrew his original claim to the living quarters above the shop and asked for possession of the shop and store only. The Board having made an order to give respondent possession the appellant appealed to the Supreme Court and admitted there that he was a statutory tenant. This appeal was dismissed.

On appeal to the Court of Appeal for Eastern Africa the appellant sought to retract his admission and to argue that the determination of the contractual tenancy was a condition precedent to the exercise of its jurisdiction by the Board. The appellant also argued that no evidence of reasonableness was led.

It was further argued that there was one letting of mixed business and residential premises and no separation of the two portions had occurred and neither Board nor the landlord could sever the tenancy without the tenants agreement.

Finally it was argued that the Board failed to consider the question of alternative accommodation.

Held (21-1-52).-(1) The appellant having admitted a statutory tenancy it was perfectly competent for the Board and the Supreme Court to act on that admission and dispense with evidence of the commencing day of the tenancy.

(2) The Board considered the question of reasonableness.

(3) There is nothing contrary to the intention of the Ordinance in a determination which decides that a landlord has made out a good case for recovering a portion of the premises and allowing the tenant to stay on as a statutory tenant in the remainder.

(4) The Board did not put any wrong construction upon the Ordinance or act<br>without jurisdiction when being of the opinion that accommodation was then avail-<br>able to the appellant and if this were not so then it lay in appe it available by the time the order came into effect.

Cases referred to: Aboobakar Noor Mohamed Bokharia v. Hajee Yacoob Hajee<br>Ismail, Civil Appeal No. 48 of 1950 (unreported), Barton v. Fincham, (1921) 2 K. B. 291, Middleton v. Baldock, (1950) 1 K. B. 657, Tendler v. Sproule, (1947) 1 A. E. R. 193.

$D$ : N. Khanna for appellant.

Maini for respondent.

JUDGMENT (delivered by SIR NEWNHAM WORLEY (Vice-President)).—This is an appeal from a judgment of the Supreme Court of Kenya dismissing with costs an appeal from an order of the Central Rent Control Board by which the appellant (the tenant) was required to give the respondent (the landlord) possession of a shop and stores, the property of the respondent, on plots 8 and 9 in the township of Thika.

The material facts are that the appellant has, since 1936, been tenant to the respondent of the shop and store with two living rooms above; he resides in these rooms and carries on in the shop a retail business in general goods, hardware and native produce. The whole of the premises is subject to control by virtue of the Increase of Rent (Restriction) Ordinance, 1949 (Ordinance No. 22 of 1949, hereinafter referred to as the Ordinance). The suit premises are situated at a crossroads in the township, the shop being at the corner, facing both roads. The appellant owns a plot at the same crossroads, having on it an old building at the corner, which is let, and subject to control under the Ordinance. On the remaining portion of his plot, the appellant has erected four shops, facing the side road, each with a living room above. The construction of these shops was begun in February or March, 1950, and they are, therefore, not subject to control (section 1 (2) (b) of the Ordinance): the living rooms above, if let, would be controlled.

In September, 1948, the respondent served the appellant by registered post with notice to quit dated 21st September, 1948, framed in the following terms:—

"We, the undersigned, give you notice on behalf of Shah Meghji Hirji of Thika to quit and deliver up possession of premises (namely, 1 shop, 1 store, 2 rooms and outhouses) on Plot Nos. 8 and 9, section IV, Thika, in respect of which you are now his tenant on the 1st day of November, 1948, or at the end of the month of your tenancy which will expire next after the end of 15 days from the date of the service of this notice."

The appellant has not contested the receipt of this notice nor that he held the suit premises on a monthly tenancy. The respondent's uncontradicted evidence was that the rent was Sh. 155 per month plus the increases permitted by section 13 (1) (a) of the Ordinance as amended by section 4 of Ordinance No. 20 $\frac{1}{2}$ of 1951, which came into force on 7th April, 1951; namely, 10 per cent in respect of the dwelling rooms and 20 per cent in respect of the business premises. No details are given of the apportionment between the two parts of the premises.

The appellant remained in occupation of the suit premises and on 2nd March, 1950, the respondent's advocates wrote him as follows: -

"We are instructed by Shah Meghji Hirji that you are erecting your own building and hence to advise you that on completion of your building to vacate the premises in your occupation in the building on the above plots and hand over vacant possession to our client.

Unless we receive your reply within a week from the date hereof that you will comply with this notice, our client will be obliged to apply to the Rent Control Board for its sanction for recovery of vacant possession."

On 6th March the appellant replied, through his advocates, that he would not be able to vacate and hand over possession as requested and that any proceedings before the Rent Control Board would be resisted.

On 6th July, 1950, the respondent applied to the Board for an order for possession of the suit premises described therein as "shops and living rooms" under section 16 (e) (ii) of the Ordinance on the grounds that: (1) he needed the premises for his own use and occupation; (2) the tenant had constructed his own new building comprising shops and living rooms and the accommodation there was much more spacious than that which he had in the suit premises.

Section 16 (1) (e) (ii) permits the Board to make an order for the recovery of premises to which the Ordinance applies if-

"the business premises are reasonably required by the landlord and (except as otherwise provided by this sub-section) the Central Board, the Coast Board or the court, as the case may be, is satisfied that alternative

accommodation, reasonably equivalent as regards rent and suitability in all respects is available or will be available at the time that the order takes effect;"

No such order shall be made unless the Board considers it reasonable to make such an order (section $16(2)$ ).

The appellant filed a "reply" to the application raising five grounds of objection of which I need only refer at present to the first, in which he objected that the application did not aver that the contractual tenancy was ever determined by a valid notice to quit and submitted that his contractual tenancy was still in existence and that the Board therefore had no jurisdiction to make an order for possession.

The application was heard by the Board on 19th October, 1950, both appellant and respondent being represented by advocates, and sworn evidence was offered by both sides. Mr. Maini, advocate for the respondent, then referred to the sub-section under which the application was made and informed the Board that the application was for the business premises only and that his client did not want the living quarters. On the following day, the Board having reserved its decision, the appellant was ordered to give the respondent vacant possession of the shop and store on or before 31st December, 1950, and to pay Sh. 150 as costs. A stay of execution was granted pending appeal.

An appeal to the Supreme Court having failed, the appellant now appeals to this Court alleging that the order of the Board was ultra vires and without jurisdiction for that the respondent had failed to bring himself within the scope of the provisions of section 16 of the Ordinance; the particulars of this alleged failure are set out under eight heads.

The first of these reads "the beginning or the end of a month of the tenancy was not established, so as to show that Ex. 2 (the notice to quit) had in fact operated to terminate the tenancy". This point was not taken in the appeal to the Supreme Court; indeed the memorandum in that appeal refers to the contractual tenancy as having been converted into a statutory tenancy and Mr. Mandavia, who argued the appeal and who had represented the appellant before the Board, opened his argument with an admission that his client was a statutory tenant.

Before us, however, Mr. Khanna who appeared for the appellant, sought to go back on this admission. He argued, firstly, that the determination of the contractual tenancy was a condition precedent to the exercise of the jurisdiction of the Board and that the Board must satisfy itself on this point before it could assume jurisdiction. He further contended that the appellant was not estopped at any stage from taking a point which goes to the jurisdiction, and referred to a number of reported cases in which it has been held that a tenant cannot "contract out" of the Ordinance and that it is the duty of the Court to see that any order under the Rent Restriction legislation is properly made. All these as general propositions of law are unimpeachable but I fail to see how they advance the appellant's case in the present instance. Mr. Khanna perforce had to admit that there could be no objection to the form of the notice which the appellant admittedly received in this case, but he has argued that the Board should have had before it evidence of the starting day of the tenancy, so that the Board could calculate for itself the day on which the notice expired and determine whether there was a valid notice. He relied strongly upon the judgment in Aboobakar Noor Mohamed Bokharia v. Hajee Yacoob Hajee Ismail

$\mathcal{L}$

(Civil Appeal No. 48 of 1950), in which this Court took cognizance of the question as to whether there had ever been a valid notice to quit although the question had not been raised by either party in the Court of trial, nor by the appellant in his memorandum of appeal. The facts of that case, however, differed greatly from those in the present instance and in my view the decision does not assist the present appellant. In Aboobakar's case, the landlord had served and the tenant admitted having received, a "notice to vacate" under the provisions of section 10 (1) (d) of the Rent Restrictions Ordinance, 1947, of the Colony of Aden.

Such a notice would not necessarily operate as a valid notice to quit terminating the contractual tenancy which this Court considered a necessary pre-requisite to give jurisdiction to make an order of ejectment. There was no admission by the tenant that the contractual tenancy had been terminated.

In the instant case, Mr. Maini informed us that the appellant's advocate in the proceedings before the Board abandoned the first point in his reply and conceded that his client was a statutory tenant. This is borne out by the same advocate's admissions in the memorandum of appeal to the Supreme Court and in the course of the hearing of the first appeal, and, in my view, it was perfectly competent for the Board and the Supreme Court to act upon that admission and dispense with the evidence of the commencing day of the tenancy. I find support for this view in the case of *Barton v. Fincham* (1921) 2 K. B. (C. A.) 291, a rent restriction case, in which Atkin, L. J. said at page 299 of the report:—

"If the parties before the Court admit that one of the events has happened which give the Court jurisdiction, and there is no reason to doubt the bona fides of the admission, the Court is under no obligation to make further inquiry as to the question of fact: but apart from such admission the Court cannot give effect to an agreement, whether by way of compromise or otherwise, inconsistent with the provisions of the Act.'

Barton v. Fincham was applied in Middleton v. Baldock (1950) 1 K. B. (C. A.) 657, also a rent restriction case, in which Denning, L. J. said (at page 669):

"This matter (sci. the question of jurisdiction) was discussed at length in Barton v. Fincham (supra) and was also discussed in Thorne v. Smith (1947) K. B. 307. I think that the principles deducible from these cases are these: under the acts the Court only has jurisdiction to order possession on one or other of the statutory grounds. It is not, however, always obliged to hear a case out; for, if the tenant appears and admits that the landlord is entitled to possession on one of the statutory grounds, the Court may act on that admission and make the appropriate order."

It has been said that rent restriction legislation is for the protection of tenants but is not to be used to penalize landlords, and landlords would be put in an intolerable position if tenants were at liberty to go back on admissions freely and honestly made before the tribunal of first instance and to attack orders made on the basis of such admissions. In my view therefore there is no merit in the appellant's first ground of appeal.

The second ground of appeal alleges that no evidence was led directed to the question of reasonableness and the Board failed to apply its mind to that question and confused this issue with the separate and distinct issue of the premises being reasonably required by the respondent under section 16 (1) $(e)$ (ii) of the Ordinance. It is of course well settled that in considering these applications the tribunal of first instance has first to consider whether the premises are "reasonably required" by the landlord and then to consider whether, in all the circumstances it is reasonable to make the order: but the reasonableness of the landlord's requirement is again taken into account as a circumstance affecting the reasonableness of making the order. On this point, the Board said: —

"The evidence is clear that possession of his premises would be of great advantage to the landlord for the carrying on of a trade which is of advantage to the country and, as he suggests, the Commonwealth."

There was also evidence, which I shall have to refer to later in this judgment, of alternative accommodation available to the appellant. It is therefore not correct to allege that no evidence was led directed to the question of reasonableness and, although the Board does not in terms express its determination that it was reasonable to make the order for ejectment, where there is evidence relevant to this question, the Court will assume that the Board considered it (see Tendler v. Sproule (1947) 1 All E. R. (C. A.) 193). Moreover, I consider that on the true construction of the Board's decision it is clear that they did consider the question of reasonableness. In paragraph 8 they say that they consider the landlord's request for his premises to be reasonable and then, in paragraph 9, they say:-

"We do not consider the tenant's opposition to the landlord's request to be reasonable especially as the terrant was made aware that the landlord wanted the premises when he (the tenant) commenced to build. It is not reasonable to suggest that he should have made provision for himself and he should not have put the landlord to the expense of coming to the Board."

It is evident from this passage that the Board considered the appellant's opposition to the respondent's application to be entirely unreasonable in the circumstances, and, that being so, I do not see that they could come to any other conclusion than that it was reasonable to make the order.

Mr. Khanna's next point, which covered the substance of the third and fourth particulars in his memorandum, was that there was one letting of mixed (i.e. business and residential) premises, that there had been no separation of the two portions, and no application for the apportionment of the rent and that neither the landlord nor the Board could sever the tenancy except with the agreement of the tenant. Here again the appellant is seeking to go back on an admission made by the advocate who represented him before the Board. The application for possession was, as I have pointed out, for the whole of the premises but in the course of the proceedings before the Board Mr. Maini stated that his client wanted the business premises only and not the living quarters, and offered to allow the appellant to remain in these. Mr. Maini has informed us that his concession was made after the evidence had been led, that it was accepted by the appellant's advocate and thereafter the application was considered by the Board as regards the business premises only. This is again borne out by the following passage in the judgment of Bourke, J. in the Supreme Court: —

$\mathbf{f}^{\prime}$

"But at the end of the case when it came to address, the applicant's Counsel informed the Board that his client was prepared to leave the two living rooms with the tenant. Mr. Maini states here that his instructions to make this concession sprang from generosity and Mr. Mandavia for the appellant says that his client was at the time glad to avail himself of this concession. No objection was taken before the Board as is now sought to be raised before this Court, and it is plain enough to my mind that the parties and the Board viewed the case, from the stage I have mentioned, as one concerning the shop and store to the exclusion of the two living rooms that were to remain by consent with the tenant. It is too late now to seek to make capital in law out of the attitude of the landlord in not pressing his application in respect of the two living rooms, an attitude which was, I have no doubt, appreciated and tacitly acquiesced in at the time by the present appellant."

Mr. Maini has further pointed out that there was in fact an apportionment of the rent in respect of the two portions of the tenancy as the result of the coming into force of Ordinance No. 20 of 1951. The respondent gave evidence to this effect but without going into details of the figures because, Mr. Maini says, the point was not contested.

Mr. Khanna has sought to call in aid against decision that a tenant cannot "contract out" of the Ordinance but in my opinion they do not help him here. It was only prudent for the landlord to serve a notice to quit in respect of the whole of the premises and to apply for possession of the whole, but I can see no good reason, either on a consideration of the provisions of the Ordinance or of the reported cases, why a landlord should not make such a concession as this during the hearing of his application. The intention of this legislation is to give tenants security of tenure and to ensure that they are not<br>evicted except for good cause and I can see nothing contrary to that intention in a determination which decides that the landlord has made out a good case for recovering possession of a portion of the premises and allowing the tenant to stay on as a statutory tenant in the remainder. Indeed it seems to me that to hold otherwise would be to work hardship in many cases on either the landlord or the tenant.

Mr. Khanna's next point (paragraph $(e)$ of his memorandum) is that there was no material relevant to nor did the Board apply its mind to the question of the alternative accommodation being reasonably equivalent to the respondent's shop and store. There is no substance in this. Bourke, J. was of opinion that there was sufficient evidence and on the view it took of it the Board reached certain findings and conclusions with which he could not interfere. It is indeed apparent from the record that the Board had before it ample evidence as to the relative positions, size and character of the appellant's new shops and the respondent's shop and store and the Court will assume that the Board had in contemplation their relative suitability.

The proceedings before the Board turned, as they say in their decision, mainly on the question of the availability of this alternative accommodation, and Mr. Khanna has contended that the Board erred in holding that the requirements of the Order are satisfied if the alternative premises "can be available" for the tenant by the date the order for possession will take effect.

The circumstances of this case are peculiar in that the alternative accommodation is the appellant's own property consisting of four newly built and uncontrolled shops. The respondent gave evidence, which, the Board accepted, that these shops were unoccupied and kept locked up. The appellant admitted that one of them was vacant at the date of the hearing before the Board but alleged that the others were let. He did not give any particulars of these lettings nor call any of the tenants, and the Board rejected this evidence, characterizing him as an unreliable witness. Whether the shops were let or not or, if let, could not be made available by 31st December, 1950, the date on which the Board's order was to take effect, was a matter peculiarly within the knowledge of the appellant and under section 106 of the Indian Evidence Act, which applies in Kenya, the burden of proving this lay on him. He failed to discharge that burden. The requirement of section 16 (1) $(e)$ (ii) of the order is that the alternative accommodation either "is available" when the order is made or "will be available" at the time the order takes effect. In the present case it appears that

the Board was of opinion from the evidence which they accepted that the accommodation was then available to the appellant, but that, if this were not so, then it lay in his power to make them available by the time the order came into effect. I am unable to see that in so holding they put any wrong construction upon the Ordinance or acted without jurisdiction.

In the last two paragraphs of his memorandum the appellant seeks to attack the judgment of Bourke, J. in the High Court. In my view these paragraphs seek to put upon the judgment an unwarranted construction and there is no substance in either of them.

My conclusion therefore is that this appeal fails on all points and should be dismissed with costs.