Rex v Naranji and Dwarkadas (Criminal Appeals Nos. 286 and 287 of 1947) [1948] EACA 17 (1 January 1948)

## COURT OF APPEAL FOR EASTERN AFRICA

Before Sir G. GRAHAM PAUL, C. J. (Tanganyika), EDWARDS, C. J. (Uganda), and DE LESTANG, J. (Kenya)

## REX, Respondent (Original Prosecutor) $\overline{1}$

## (1) KANJI NARANJI, (2) DWARKADAS KANJI, Appellants (Original Accused)

Criminal Appeals Nos. 286 and 287 of 1947

(Appeals from decision of H. M. Supreme Court of Kenva)

Criminal law-Section 13 (2) Increase of Rent and Mortgage Interest (Restrictions) Ordinance, 1940-Whether grant or assignment of a tenancy.

The appellants were convicted under section 13 (2) of the Increase of Rent and Mortgage Interest (Restrictions) Ordinance, 1940, for having obtained Sh. $3,000$ as a premium and as a condition of the grant of a monthly tenancy of business premises in Nairobi. The only issue at the trial was whether the transaction was a grant of a monthly tenancy (in which case an offence would have been proved) or an assignment (when no offence would have taken place). The Supreme Court dismissed the appeals.

Held (26-1-48).—(1) That the Resident Magistrate had found that there was a part of a tenancy and not an assignment by reason of a letter written by the solicitor of the accused. He had wrongly assumed this letter to have been written on the instructions of the accused.

(2) That the Supreme Court had wrongly held that there was no assignment as the existing tenant was only a statutory tenant and could not assign. But that the date of the notice to quit (which would make him a statutory tenant) had not been strictly proved.

Convictions quashed.

Nazareth for the Appellant.

Salter for the Respondent.

JUDGMENT (delivered by SIR G. GRAHAM PAUL, C. J.).—These appeals were consolidated in this Court, the appellants having been jointly tried in the Court of the Resident Magistrate, Nairobi, and having jointly appealed from the judgment of the Resident Magistrate to the Supreme Court. The Supreme Court dismissed the appeals of both appellants from their convictions in the Resident Magistrate's Court. The convictions in question were under section 13 (2) of the Increase of Rent and Mortgage Interest (Restrictions) Ordinance, 1940, the particulars being that the appellant on or about 8th June, 1947, at Nairobi did require from Abdul Wahid the payment of Sh. 3,000 in money as a premium or consideration in addition to the rent as a condition of the grant of a monthly tenancy to the said Abdul Wahid of premises to be used for trade purposes.

There were other charges before the Magistrate, of theft and obtaining money by false pretences, but on these charges both appellants were acquitted and we are not in any way concerned with them.

The issue between the prosecution and the defence at the trial was whether on the evidence the transaction in question was an assignment by Shah to Abdul Wahid of his monthly tenancy with the consent of the landlord (who is the second appellant, Dwarkadas Kanji) or the grant of a monthly tenancy by the landlord direct to Abdul Wahid. The prosecution contended that it was a grant of a monthly tenancy by the second appellant direct to Abdul Wahid and for the defence it was contended that it was an assignment by Shah to Abdul Wahid of his monthly tenancy with the consent of the landlord.

The issue is the same in this Court. It was common ground at the trial, as it was in this Court, that if it were a grant direct by the landlord to Abduf Wahid an offence under section 13 (2) had been committed by the landlord<br>in requiring payment of the Sh. 3,000 in addition to the rent and that, on the other hand, if the Sh. 3,000 had been received by the landlord in consideration for his consent to an assignment by Shah to Abdul Wahid of his monthly tenancy no offence had been committed by the landlord. With that statement of the legal position we agree, anomalous as it may appear. It comes to this, that the landlord and the occupying tenant agreeing together can extract whatever premium they like for an assignment without committing any offence. There is a very thin line in fact and in law between the two cases, a tenant assigning with the landlord's consent and a tenant quitting so that the landlord can grant a new tenancy. This case is a striking example of the thinness of that line. But such is the law.

The learned Resident Magistrate found that the second appellant, Dwarkadas Kanji, "was the landlord of the premises and that he granted a monthly tenancy to Abdul Wahid and took a premium of Sh. 3,000 as consideration for doing so and that accused (1) (the first appellant) was with him during all the transactions and actually took more active part in the negotiations, actually accepting the money". The Resident Magistrate convicted both appellants under section 13 (2) and from these convictions they appealed to the Supreme Court, which upheld both convictions. From the Supreme Court judgment they have appealed to this Court.

It has been argued for the respondent before this Court that this being a second appeal this Court is bound by the concurrent findings of fact of the two lower courts and that this appeal for that reason should be dismissed. Against that contention it has been argued for the appellants that there was no evidence to justify the findings of the two lower courts, and that the lower courts came to their findings owing to a misdirection in law. If either of these countercontentions is made out a question of law arises and this Court can and must reject the findings of the two lower courts.

There can be no doubt that the decision of the Supreme Court was based mainly upon three findings: —

- (1) "By a letter of 25th November, 1946 (Ex. 13), the landlord, accused (2), determined the tenancy by giving the required month's notice to quit."; - (2) that by reason of (1) the tenant Shah became a statutory tenant and was a statutory tenant at the material dates; and - (3) that as a statutory tenant Shah had nothing capable of assignment.

Taking the first of these findings we may quote the letter in question which is in the following terms:—

$\ddot{\phantom{0}}$

"I hereby give notice that your contract (or statutory) tenancy (if any) of the premises leased to you by me on the above plot is hereby determined as from the end of your next month of tenancy which may occur on the 31st December or 1st January, 1947, and you are hereby called upon to deliver up possession of the premises you now occupy to me on the determination of the tenancy.

Notice is further given that as from one week after the said determination of the tenancy, it is my intention to increase the rent of the said premises let to you to Sh. 155/85 being Sh. 128/25 the standard rent of the said premises let to you plus Sh. 27/60 the latter sum representing your share of the monthly proportion of the increase of rates payable by me in respect of the premises from Sh. 40/70 on the prescribed date to Sh. 371/83. for 1947 rating period.

Accordingly on the determination of the tenancy as aforesaid the rent of the said premises let to you will be Sh. 155/85 per month and if you continue in occupation you will be deemed to be a statutory tenant at the said increased rent of Sh. 155/85 per month.'

It is in evidence that Ex. 13 was received by Shah, but nowhere in the evidence is it stated on what date Ex. 13 was received by Shah. Ex. 13 would be ineffective in law as a notice to quit unless it were received by Shah at the latest on 1st December, 1946. So far as the evidence goes it may have been received before or after that date. It was an essential part of the prosecution case that Ex. 13 effectually terminated the contractual tenancy of Shah, but by reason of the failure to prove that Ex. 13 was served on Shah on a date which would make it effective the prosecution have failed to prove an essential part of their case. It does not appear that the Supreme Court realized the necessity for proving the date of service of the notice to quit in order to prove that it was effective to terminate the contractual tenancy and that, in our opinion, was a misdirection in law so serious and vital as to vitiate the material finding by the Supreme Court that the contractual tenancy of Shah was terminated by Ex. 13. We cannot therefore accept that finding, and as it is the very foundation of the judgment of the Supreme Court we are unable to accept that judgment.

The only answer offered on this point in this Court by the respondent's advocate was that Shah in his evidence admitted that he received Ex. 13 and that there was no cross-examination of him as to the date on which he received it. But as no date of receipt was given by Shah or anyone else in evidence there was no reason for the accused or their advocate to cross-examine on that point. This was a criminal prosecution and the Court had, of course, no right to presume any essential fact against the accused. If the prosecution omits to prove a fact essential to the prosecution case it does not assist the prosecution to suggest that if a prosecution witness had been cross-examined by the accused's advocate as to the omitted fact the gap in the prosecution case might have been filled. We are unable to find any substance in the answer of the respondent's advocate to this point.

Having dealt with the basis of the Supreme Court decision we must now consider the basis of the judgment of the learned Magistrate for the reason that it would be our duty to uphold the decision of the learned Magistrate if we were satisfied that it was sound, even though we have rejected the decision of the Supreme Court for the reasons we have given. In paragraph 10 of his judgment is to be found the main basis of the learned Magistrate's finding that it was a grant of a tenancy by the landlord and not a consent to an assignment in respect of which the Sh. $3,000$ was paid.

The material part of paragraph 10 is as follows: -

"10. In this present case both the accused, by their advocate (see Ex. 12) clearly recognized that Shah was (and apparently still is) only a statutory tenant, and had no power to assign anything-in fact he had nothing to assign, except perhaps the unexpired portion of any one month, as he was only a monthly tenant. Neither of accused has gone into the witness-box to deny that they gave their advocate these instructions so I am entitled to assume that the letter was in accord therewith."

In our view the learned Magistrate was wrong in law in assuming against an accused person, in the absence of evidence, that a letter written by a solicitor was written on the instructions of the accused. If that were an essential part of the prosecution case the writer of the letter should have been called as a witness and the accused given an opportunity to cross-examine him. This was not done. It is true that the accused did not go into the witness-box to disprove

a fact that had not been proved by the prosecution, but that of course does not entitle a Court to assume against the accused the fact which the prosecution failed to prove. In our view the learned Magistrate misdirected himself in law in saying that for that reason he was entitled to assume an essential fact against the accused. This misdirection strikes right at the root of the reasoning of the learned Magistrate upon which he based his conviction of the accused and therefore because of the misdirection we find ourselves unable to support the conviction by the learned Magistrate.

In the result we find that the basis of the judgment of each of the lower courts embodied a vital misdirection in law. We are unable to say on a consideration of all the evidence that apart from the basic points to which we have referred the learned Magistrate would have convicted or that the Supreme Court would have upheld the convictions. For that reason we must allow the appeals. of both appellants and quash the convictions and sentences, and it is so ordered.

Questions were raised in this appeal as to the date when the war ended for the purpose of the Ordinance under which the prosecution was brought; as to whether the notice to quit was given by a person having authority from the landlord; as to the assignability of a "statutory tenant's" rights; and as to the effect of section 3 of the Penal Code on section 22 of the same Code, but in the view we take of this case it is unnecessary for us to consider any of these questions.