Attorney-General v. Ranjit Jayalath (Seneviratne, J.)
. glJnawardena and others
COURT OF APPEAL.
SENEVIRATNE. J. (PRESIDENT. C/A) AND JAMEEL, J.
C.A. No. S.C. 229/78 (F)-D.C. GALLE 6951/1.
DECEMBER 2. 1985.
Application for acquisition^and re-transfer of land by transferor on conditionaltransfer-Partition action for land filed by purchaser from transferee-Right to followproperty in the hands of such bona fide purchaser-Law No. 16 of 1973-Wasapplication entertained by People's Bank under s.71 (2A) of Law No. 6 of 1973?
The word "entertain" as used in several sections of the Law No. 16 of 1973 hasthe meaning of the application having been received and accepted by the Bank.
Sri Lanka Law Repons
(1986] I SriL.R.
Law No. 16 of 1973 does not prevent the Bank from following property transferred to abona fide purchaser by the transferee on the conditional transfer. In the partition actionfiled by such bona fide purchaser the rights awarded to him will be subject to the rightsthe original transferor on the conditional transfer may get from the People's Bank on theapplication made to it which preceded the institution of the partition action.
APPEAL from judgment of the District Judge of Galle.
J.W. Subasinghe. P.C. with D. J. Nilanduwa for 8th added defendant-appellant.
K.C. F. Wijewardene for plaintiff-respondent.
Cur. adv. vult.
December 3, 1 985
SENEVIRATNE, J. (President, C/A)
The plaintiff filed this action for partition of a contiguous land called
Ratgampitiyaduwawatta depicted in Preliminary Plan No. 1879 of
21.10.1976 filed of record marked 'X'. According to the pedigree
filed by the plaintiff the title to this land devolved on Oliver Abeysiri
Gunawardene who married Magilin Suriyaarachchi. The said Oliver
died leaving as intestate heirs his wife Magilin Suriyaarachchi and his 7
children, 1 to 7th defendants on whom devolved half of the land
respectively. The contest in this case was for the 1/2 share which
devolved on the widow, Magilin Suriyaarachchi. The plaintiff claimed
title to the half share of Magilin "Suriyaarachchi the 8th added
defendant. Magilin by transfer deed No. 415 of 4.3.1974 gave a
conditional transfer of her interests in th# land to Chandra
Goonatilleke for Rs. 2,000 with the right to obtain a re-transfer within1 1/2 years from the date of execution of the deed. This 1 1/2 yearsexpired on 4.9.1975 but by negotiations with Chandra Goonetillekethe 8th defendant, Magilin obtained a further extension of 6 monthswhich extended the date on or before which re-transfer should havebeen obtained to 4.3.76. The said Chandra Goonetilleke by deed oftransfer 7865 of 10.05.76 (P8) transferred her interests toMahindasoma the plaintiff. Thus on the pedigree filed Mahmdasomaclaimed 1/2 share of the land on deed P8 and set out 1 to 7thdefendants as the owners of the other 1/2 share.
Mahindasoma v. Gunawardena (Seneviratne. J.)209
Magilin Suriyaarachchi intervened in the action as 8th defendant andset up a claim that any rights allotted to Mahindasoma the plaintiffshould be made subject to any rights she may be entitled to on herapplication to the People's Bank Law No. 16 of 1973 to obtain are-transfer of the land to her. Magilin stated that she transferred theland to Chandra Goonatilleke subject to a re-transfer within 2 years(taking into account the extended time) and as Chandra Goonatillekeevaded re-transfer of the land to her though she asked for are-transfer, the time for re-transfer elapsed. Chandra Goonatilleketransferred the land to Mahindasoma. At the trial the title to the land,that Magilin Suriyaarachchi was entitled to' 1/2 share and her childrento other 1/2 share together was admitted. The other contest was asto whether any right should be reserved for Magilin. Thus at the trialonly 2 issues were raised:-'
As stated in paragraph 10 of the defendant's answer has the8th defendant made an application under the Finance Act tothe People's Bank to obtain a re-transfer of her rights in thesubject-matter?
Are all the orders in this case subject to the rights to reliefwhich the defendant is entitled to obtain under the provisions
of the said Act?
Magilin Suriyaarachchi led evidence to the effect that she had made anapplication to the People's Bank on 20.6.76 (8D1) to get a re-transferof the land. An Officer of the People's Bank gave evidence and statedthat the application of Magilin under Law No. 16 of 1973 wasreceived by the Beetle's Bank and an officer was sent to the LandsRegistr*to do a search regardine this land. Then it uas discovered thata lis pendens in this partition action has been registered and as suchthe People's Bank did not take any further steps. At the trial the mainquestion which arose and which the learned Judge discussed waswhether at the time this action was filed by the plaintiff the Bank had interms of amendment Law No. 16 of 1973, "entertained" anapplication for the acquisition of the premises in terms of provisions2A (a) and 2A (b) of the said act or any one of them. The learnedjudge held that his view was that the Bank had not "entertained", theapplication for acquisition made by Magilin in terms of the said section71 (2A) and as such there was no application of Magilin for theacquisition of the land pending in the People's Bank at the time theaction was filed.
Sri Lanka Law Reports
119861 I SriLfi
The plaintiff further took up the position that he was the bona fidepurchaser of the 1/2 share for valuable’consideration and was entitledto the said 1/2 share free of any rights of Magilin to have the landacquired for her'by the People's Bank. At the hearing of this appealbefore this court, learned counsel for the plaintiff-respondent made afurther submission that the plaintiff Mahindasoma was a third partywho had obtained a transfer from Chandra Goonatilleke for valuableconsideration without notice of Magilin's application to the People'sBank that there was no provision in the said Law for Magilin to followthe land to Mahindasmma and get it acquired through the Bank.
We will first consider whether at the time of this action the People'sBank had entertained Magilin's application. We do not agree with thelearned District Judge that the application to the People's Bank interms of section 71 of the Finance Act and Ceylon State MortgageBank (Amendment) Law, No. 16 of 1973 is entertained by the Bankwhen one or more provisions of section 71 (2A) are taken intoaccount. We hold that the word "entertain" as used in this act inseveral sections has the meaning of the application having beenreceived and accepted by the Bank. At that stage the Bank can be saidto have entertained the application. It is after receiving and acceptingan application that the Bank can take steps under section 72 (2A). Onthe facts of this case the Bank has received and accepted theapplication of Magilin as shown by the fact that an officer was sent tothe Land Registry of Galle to make a search. The Bank quite rightly didnot take steps as a lis pendens in this partition action has beenregistered. In any case Magilin had forwarded the application dated20.6.76 before the plaint was filed which abdication has beenreceived by the Bank on 23.6.76.«.
We will now consider the 2nd submission that there is no provisionin law for the People's Bank to follow the transfer to Mahindasoma forthe purpose of acquisition. Regarding the issues raised in thissubmission the relevant provision of Law, No. 1 6 of 1 973 is silent oneway or the other. Learned President's Counsel for appellant submittedthat it is the policy of the law to acquire the lands, for those who havelost their lands. In terms of this Finance Act and in the execution of thispolicy even the transfer to a third party (as in the case of the plaintiff inthis case) must be caught up. Some light is thrown on this issue whenwe consider the provisions of the Finance Act, No. 1 1 of 1963 section71 (2) (c) (ii) which deals with the acquisition under this Act of a land
Mahindasoma v. Gunawardena (Seneviratne J I
purchased bona fide for valuable consideration by a purchaser of suchpremises from the person to whom such premises were sold ortransferred. Section 71 (2) specifically lays down a provision for landto be acquired if the Bank is satisfied of the conditions set out abovethat is-section 71 (2) (c) (ii). This provision has been dropped from thecurrent law that is .Law No. 16 of 1973. There-is no doubt that thelegislature has done this with a purpose that is not to permit even abona fide purchaser to deprft/e the transferee who gave a land on aconditional transfer of the land. We hold that the relevant Law No. 1 6of 1973 does not prevent the Bank from following the propertytransferred to the plaintiff in this case for acquisition on the applicationmade by Suriyaarachchi who gave the conditional transfer. WhetherMagilin is entitled to relief from the People's Bank is the matter for thedecision of the Bank.
We accordingly agree with the submissions made on behalf of the8th added defendant-appellant and set aside the judgment of thelearned District Judge dated 20.7.78, to the extent.that a directionshould be made in the decree that.the interests which the plaintiff willbecome entitled to will be subject to any rights the 8th interveningdefendant-appellant may get from her application to the People's Bank(8D1) on 20.6.76. The appeal is allowed with costs of contest in bothcourts fixed,at Rs. 250.
JAMEEL, J. – I agree.