Dissanayake v. Agricultural and Industrial Credit Corporation
1962 Present:H. N. G. Fernando, J., and T. S. Fernando, J.
D. S. DISSANAYAKE, Appellant, and AGRICULTURAL AND• INDUSTRIAL CREDIT CORPORATION and others, Respondents
S. C. 73 Inty.—D. C. Colombo, 802JZ.
Injunction—Power of Court to issue an interim injunction—Scope—Agricultural andIndustrial Credit Corporation Ordinance, s. 80—Civil Procedure Code, s. 667,
In an application for an interim injunction the proper question to decide is“ whether there is a serious matter to be tried at the hearing ”. If it appearsfrom the pleadings already hied that such a matter does exist, the further
question is whether the circumstances are such that a decree which mayo ultimately be entered in favour of the party seeking the injunction would be
nugatory or ineffective if the injunction is not issued.
Where property mortgaged to the Agricultural and Industrial Credit Cor-poration is sold by the Corporation in pursuance of statutory powers conferred
on it, and the mortgagor institutes an action for a declaration that the sale wasvoid on the ground of material irregularity, the mortgagor may apply for aninterim injunction restraining the Corporation from confirming the sale.
1 (1959) Scot's Law Times 161.* (1959) 17 D. L. R. 178 at 192.
284 H. N. Q. FERNANDO, J.—Dissanayake v. Agricultural and Industrial
PEAL from an order of the District Court, Colombo.
T. Samerawickreme, with K. Palakidner, for the Plaintiff-Appellant.
W. Jayewardene, Q.C., with N. E. Weerasooria (Jnr.), for the1st Defendant-Respondent.
Cur. adv. vult.
April 2, 1962. H. N. G. Fernando, J.—
The first Defendant, the Agricultural and Industrial Credit Corporation,was the mortgagee of a certain land belonging to some of the otherDefendants, and the Plaintiff-Appellant was a secondary mortgagee ofthe same land. In pursuance of statutory powers conferred on theCorporation, the land was sold for the recovery of moneys due to theCorporation on its mortgage and purchased by the second Defendant.
The Plaintiff thereupon instituted this action for a declaration that thesale was void on the ground of material irregularity, namely that the salehad been held prior to the advertised time, and elsewhere than ‘at theadvertised place. The Plaintiff also applied for an interim injunctionenjoining the Corporation from confirming the sale. This applicationwas obviously intended as a means of averting the operation of thestatutory provision that the validity of such a sale cannot be challengedafter the issue of a certificate of sale to the purchaser. (Section 80 ofChapter 402.)
The learned District Judge issued notice of the application to theDefendants, but also issued at the same time an enjoining order effective“ until this case is decided ”, meaning thereby in the context until theapplication is determined. Both notices were returnable on a date fixedby the Judge. Thereafter, the Corporation filed proxy, and was giventime to file Answer as well as Objections to the application, both of whichwere duly filed. The matter of the objections was then fixed for inquiry.But when this ** inquiry ” was held, there was actually (save for theabsence of formally-framed issues) a full-scale trial of the substantivedispute in the action, at which each party led evidence with the objectof proving when and where the sale had taken place, and after which theJudge delivered an “ order ” which has all the characteristics of a judg-ment upon the substantive question. In fact the only matter discusseain the order is the time and place of the sale, and on this matter theJudge reached a conclusion strongly adverse to the Plaintiff’s allegationsin his plaint. Holding for this reason that the Plaintiff’s objectionsto the confirmation were frivolous, he dismissed the application for theinjunction.
H- N. G. FERNANDO, J.—DissanayaJce v. Agricultural and Industrial 285
The proper question for decision upon an application for an interiminjunction is “ whether there is a serious matter to be tried at thehearing ” (Jinadasa v. Weerasinghe 1). If it appears from the pleadingsalready filed that such a matter does exist, the fuither question is whetherthe circumstances are such that a decree which may ultimately beentered in favour of the party seeking the injunction would be nugatoryor ineffective if the injunction is not issued.
The matter in dispute in the present case is a serious one, for the sale,which according to the plaint was not validly conducted, would neverthe-less extinguish the Plaintiff’s mortgage. He alleged that if the sale hadbeen duly held he would have bid for the land at its true value, and thatin the circumstances he was prevented from doing so. The issue by theCorporation of the statutory certificate of sale during the pendency ofthe action would have been fatally prejudicial, for in that event successin the substantive claim would secure no benefit for him. This is nottherefore a case of the kind referred to by Dalton J., in the decision Ihave cited, where the facts stated in the plaint show that there is noground for an injunction.
The learned Judge thought on the evidence that this was a case wherethe Plaintiff could not succeed in his substantive action. But thatopinion, by itself, is not a ground for refusing an interim injunction-The Legislature has not been unmindful of a situation where a partywho puts forward a futile claim harasses his opponent by securing aninjunction. If the action is ultimately dismissed, compensation fordamage which may have resulted from the grant of the injunction canbe awarded under Section 667 of the Code.
, The plaintiff is chiefly to blame for his failure to make the appropriatesubmission to the Court as to the proper scope of the inquiry, or, to movethat the trial be held expeditiously, which could , quite obviously havebeen done. But since his application has been dismissed on groundswhich are not relevant, the order of dismissal must be set aside.
The District Judge will issue an interim injunction as prayed for inthe plaint. But I trust that a very early date will be fixed for the trialof the action. The costs of the past proceedings in the District Courtwill abide the ultimate event. I would make no order as to the costa ofthis appeal.
T. S. Fernando, J.—I agree.
Order set aside.
1 (1929) 31 N. L. R. 33.
D. S. DISSANAYAKE, Appellant, and AGRICULTURAL AND INDUSTRIAL CREDIT CORPORATI