SCIENCE HOUSE (CEYLON) LTD.
v.IPCA LABORATORIES PRIVATE LTD.
COURT OF APPEAL.
DIAS BANDARANAYAKE, J. AND WIJETUNGA, J.
CA (LA) No. 147/82.
OCTOBER 20, 22 AND 28, 1986.
Civil Procedure – Summary procedure on liquid claims – Chapter 53 of the CivilProcedure Code – Civil Procedure Code. ss. 181, 703 and 705 – S. 34(1) ofCompanies Ordinance – Affidavit of Company – Security.
Section 703 and 705 of the Civil Procedure Code taken together provide the path toreach out to s. 34(1) of the Companies Ordinance of 1938 and this latter section readwith s. 181 of the CPC provides for the making of an affidavit of facts by a company orcorporation. The law as it stands permits a corporation or a company the option ofinstituting an action by way of summary procedure under Chapter 53 of the CivilProcedure Code for recovery on liquid claims.
The order that security in a sum exceeding the pnncipal sum claimed to be deposited asa condition of the grant of leave to appear and defend is not bad in law as interest wasalso being claimed.
Bank of Madras v. Ponnusamy (1891) 9 S.C.C 169 not followed.
Cases referred to:
Bank of Madras v. Ponnusamy – (1891) 9 SCC 169.
Bank of Montreal v. Cameron – 46 LJ. Q.B. 425
Seaford Court Estates Ltd v. Asher – [ 1949] 2 KB 481.
J. L. Petris & Co.. Ltd. v. L. C. H. Peiris-74 NLR 261
Minister of Home Affairs v. Fisher –  3 All ER
Collette‘s Case – [ 1984] 2 SLR 253.
L. Bolton Engineering Co., Ltd. v. Graham – [ 1956] 3 All ER 624.
APPEAL from order of the District Court of Colombo.
P Nagendran. with C. Cadiramanpillai and Mrs. K. S. Ratnavel for petitioner.
K. N. Choksy, P.C. with S. C. Parathalingam. Miss I. R. Rajepakse and Nihal Fernandofor respondent.
Cur. adv. vult
December 18, 1986.
The plaintiff-respondent, a company incorporated in India and based inBombay filed this action in the District Court of Colombo in summaryprocedure under Chapter 53 of the Civil Procedure Code on two Billsof Exchange given by the defendant-appellant company being value fordrugs imported by the defendant-company to Sri Lanka.
Bill of Exchange marked 'A' dated 10.11.78 was for a sum of Rs.54,175 Indian rupees equivalent to Rs. 121,915.42 Sri Lankanrupees with Bank charges and interest thereon at 15% per annum.
Bill of Exchange marked 'B' dated 5.1.79 was for a sum of Rs.86,055 Indian rupees equivalent to Rs. 193,658.17 Sri Lankanrupees with charges and interest as aforesaid. The plaintiff claimedthat an aggregate sum of over Rs. 425,000 Sri Lankan rupees wasnow due and owing on the said transaction.
The defendant-appellant applied for leave to appear and defend theaction unconditionally before the District Court. Two main groundswere urged by the defendant:
that there was a patent want of jurisdiction in the District Courtto proceed with an action by way of summary procedure onliquid claims under Chapter LIN of the Civil Procedure Codebrought by a corporation or company, for the reason that s. 705of the Civil Procedure Code required that a plaintiff seeking toutilise the provisions of Chapter Llll must make affidavit but that,the plaintiff being a juristic person and not a natural personcannot make affidavit as the Civil Procedure Code as it nowstands contains no provision for a corporation etc. to swear oraffirm to an affidavit. There was such a provision in the formerCivil Procedure Code, viz. s.829A which stood in Part XChapter LXVI of the Code regarding actions in the Courts ofRequests which extended the provisions of s.655 relating tothe provisional remedies of arrest and sequestration beforejudgment enabling others to make affidavit in lieu of the plaintiffto affidavits required by s.705 relating to summary procedureon liquid claims; but that Code had been repealed by s. 3 of TheAdministration of Justice (Amendment) Law No. 25 of 1975.The Courts Ordinance had also been repealed. Then by CivilCourts Procedure Special Provisions Law No. 19 of 1977reference to the Civil Procedure Code as a repealed enactmentin s.3 of the Administration of Justice Law was omitted whichresulted in a situation as if the former Civil Procedure Code of1889 had never been repealed. Next came Civil ProcedureCode (Amendment) Law No. 20 of 1977 which by s. 124repealed Chapter LXVI of the parent law dealing with Courts ofRequests. Courts of Requests were not recognised by the newJudicature Act. With it was repealed S.829A aforesaid. Itsprovisions have thus not been revived in the current reprint ofthe Civil Procedure Code.
Defendant's counsel had in the above context referred to theJudgment of the Supreme Court in Bank of Madras v. Ponnusamy (1)decided in 1891 which held that a corporation could not takeadvantage of summary procedure being incapable of making anaffidavit. This decision resulted in the amendment of the CivilProcedure Code in 1895 and S.829A aforesaid was introduced intothe Code. Affidavits were permitted under the amendment. That
provision does not now exist. Counsel also took objection to thismatter of law being raised for the first time in written submissions as itwas not raised in the defendant's affidavit; and that the Court mustact only on the affidavits filed – vide 58 C.L.W. 106;
that the goods received were of poor quality and were indeterioration and same had to be destroyed.
At an inquiry counsel for the plaintiff urged that in regard to (1)above the judgment in the Bank of Madras Case (supra) (1) cited antehad been delivered at a time when there were no companies in SriLanka and no provision existed to subscribe to documents on behalf ofa company but that by s.34(1) of the Companies Ordinance 1938there was provision made for authentication of a document, whichprovision read with s. 181 of the Civil Procedure Code enabled acorporation to apply for summary procedure. Thus a company couldavail itself of summary procedure. With regard to the other question ofthe quality of the goods supplied referred to in (2) above, the plaintiffrelied on documents C1 to C11 where there was no allegation madeby the defendant that the goods were of poor quality.
The District Court held that:
as the judgment delivered in the 9 S.C.C. case in 1891 wasprior to the Companies Ordinance 1938 it was inapplicable ass. 34 (1) of the latter Ordinance made provision for theauthentication of a corporation's documents and that theplaintiff company therefore had filed a good and valid affidavitdespite the absence of provision similar to s.829A of the CivilProcedure Code and that in any event the court cannot examineanything not averred in the defendant's affidavit;
that the correspondence indicates that the defendant acceptedthe amount due to the plaintiff but that the delay in paymentwas due to reasons such as failure to comply with ExchangeControl Regulations and not because the goods were of poorquality. This affected the bona fides of the defendant. The courttherefore held that the defence was not prima facie sustainableand that the court had a reasonable doubt as to its good faith.
Upon these findings the District Court made order dated 24.9.82that the defendant-appellant deposit a sum of Rs. 400,000 assecurity in the case on deposit of which the defendant was allowedleave to appear and defend the action. This appeal is from that orderwith leave.
The main argument of learned counsel for the defendant-appellantaddressed to this court concerned the right of a public or privatecompany, or a corporation etc., to utilize the existing provisions ofsummary procedure contained in Chapter Llll of the Civil ProcedureCode where the claims related to claims of assets or securities easilyconvertible into cash (liquid claims). If such a company or corporationcould not have recourse to the use of summary procedure, then it wassubmitted, there was a patent lack of jurisdiction in the District Courtto entertain the plaint filed in this case and the appeal must be allowedand the trial judge's order set aside. It was also submitted that the trialjudge has ordered security in a sum in excess of what had beenclaimed and that the order was thus bad in law and unenforceable asthe quantum of security must be restricted to the sum claimed.
I will now deal with the several aspects of the main argument of theappellant. It was contended that in application for summary procedureon liquid claims s. 705 (1) of the Civil Procedure Code requires that theplaintiff—
“who so sues and obtains such summonsmust on presenting
the plaint produce to the Court the instrument on which he sues,and he must make affidavit that the sum which he claims is justlydue to him from the defendant…”
Former s. 829 (A) which was an amendment brought consequent tothe decision of the Supreme Court in Bank of Madras v. Ponnusamy(supra) (1) ante permitting affidavits by a principal officer of acorporation, company etc. in lieu of an affidavit by the plaintiff to beled has been repealed. The sequence of turns the law of CivilProcedure took since 1975 has been recounted earlier in thisjudgment. Since such repeal however there is no other similarprovision available enabling the presentation of an affidavit insubstitution for the affidavit of the plaintiff where the plaintiff is ajuristic person. We are therefore back to the situation prior to June1891 and the decision of the Supreme Court cited is binding on thiscourt. (I shall return to a consideration of that decision in the course ofthis judgment). So upon such liquid claims a corporation or companyetc. must now come by way of regular action. Counsel sought tosupport the above submission with reference to several criteria.
Conceptually he submitted the Civil Procedure Code dealt withnatural persons. Thus regular action is commenced under s. 39 of theCivil Procedure Code. By s. 40(h) the residence of the plaintiff must begiven in the plaint. In the case of a corporation there is no place ofresidence but only a place of business. Again by s.46(1) in theabsence of a Proctor the plaint must be subscribed and signed by theplaintiff A company cannot sign; it only has an official seal. Again anaffidavit requires an oath or affirmation which can only be done by ananimate or natural person and not by a corporation or company. Sothe Code whilst dealing with natural persons made specific provisionfor juristic persons under s.470 and s.471 in Chapter 33. But thesesections apply only to plaint and answer and not to any other step. Acompany being a juristic person could not make or swear an affidavit.
Appellant's counsel also contended that s. 34(1) of the CompaniesOrdinance 1938 has nothing to do with the question in hand as thesection says only that a document or proceeding requiringauthentication may be signed by those persons mentioned therein.Mere signing he submitted does not authenticate such a document asan affidavit wherever that is required. Section 34(1) does notenvisage an affidavit. Authenticate there meant nothing more thanconfirming that the document is genuine. Affidavit means not onlysigning but something more. There must also be a 'swearing' on oathor an affirmation-a solemn acknowledgement of truth. That takes theplace of evidence on oath. That is what distinguishes 'affidavit' from amere authentication by signature under s. 34(1) of the CompaniesOrdinance, which provision is applicable in a different context toanother class of documents meant for that Ordinance to deal with,e.g. minutes of a company, Register of Members, company contracts.But when a company has to come to court it must comply with theCivil Procedure Code. The specific rule of procedure in summaryactions was that the plaintiff must file an affidavit. The word hasacquired a legal meaning and is used in a special sense. "Where wordsused have acquired a legal meaning then prima facie, the legislationhas intended to use them with that meaning"-Bindra, 7th Ed.,Interpretation of Statutes, p. 323.
It was also contended that the decision of the Supreme Court inBank of Madras v. Ponnusamy (supra) (1) (ante) that a corporationcould not swear an affidavit was correctly decided. At that time therewas the Joint Stock Companies Act No. 4 of 1861 (see LegislativeEnactments of Ceylon 1856-1879-Vol. 1) p. 11. Sections 16 and
65 of that Ordinance contained provisions similar to s. 34(1) of theCompanies Ordinance 1938. Section 16 dealt with the effect ofregistration Tiat-
"Upon the declaration of incorporation being registered the
subscribersshall be a body corporate—and the declaration of
incorporation shall be conclusive evidence that all the requisitionshave been complied with…."
Section 65 dealt with authenticating of Notes of Company thus:
"Any summons, notices, writ or proceeding requiringauthentication by the company may be signed by any Director,
Secretary or other authorised officerand need not be under the
common sealand may be in writing or in print etc."
It was therefore wrong to say that there was no company law inexistence in the country at the time. These sections were apparentlynot cited in the 1891 case and there is no reference to them in thejudgment either, probably because they were not considered relevantto the question for decision. Legal luminaries of the day participated inthat appeal. It would be too simplistic to say that they all casuallyoverlooked s. 16 and s. 65 of the Joint Stock Companies Ordinance1861.
In Bank of Madras v. Ponnusamy (supra) (1) the judges adopted theprinciples set out by the English Court of Appeal in Bank of Montreal v.Cameron (2) which held that-
" … .when the plaintiffs are a Corporation, an order calling uponthe defendant to show cause why final judgment should not besigned under Order 14 Rule 1 of the (English) Rules cannot beobtained because that rule requires an affidavit to be made by theplaintiff himself as to his own belief that there is no defence to theaction; and an affidavit by an officer of the Corporation was notsufficient."
It is appropriate that I set down the provisions of Order 14 Rule 1. Itreads thus:
"… .where the defendant appears on a writ of summons speciallyendorsed under Ord. 3 Rule 6, the plantiff may, on affidavit verifyingthe cause of action, and swearing that in his belief there is nodefence to the action, call upon the defendant, etc"
Bramwell, L.J. in the course of his judgment stated that:
"The words are simply 'the plaintiff may upon affidavit swearingthat in his belief do so and so; that may well mean only a plaintiffwho is capable of swearing to his belief-lt may excludeCorporations if the context does not admit of that construction; or itmay include them if the context will admit it. The only way it caninclude Corporations is by construing the words 'in his belief' tomean 'his, the deponent's belief….' In such an event, however, itcould mean that a plaintiff might make his affidavit by his clerk… .butthat is not a possible (construction) reading this rule in its plainmeaning. Therefore it should be left to the legislature. It is very muchbetter to abide by the meaning of the words than to stretch them tomeet a case which they obviously do not suit. He preferred to let theoversight, if it be one, be set right by the proper authority. Brett, L.J.said 'a Corporation cannot swear to belief. It was thus contendedthat three different matters emerge from the opinions expressed bythe Court in Cameron's Case and adopted by our Supreme Court in1891, viz.:
that where there is a casus omissus in the law the Court shouldnot fill in the gap but leave it to the legislature to do so;
it pointed to the perils ahead if the Courts were to write inwords into a statute;
where the legislature has provided for the filing of affidavits byCorporations in other situations (as in regular actions), what isthe inference to be drawn from omission of the legislature toprovide for it in this situation? Submission-apply themaxim -expressio unius personae vet rei, est exclusio alterius.Thus it must be presumed that the legislature did not intend toprovide for an affidavit by a Corporation as far as summaryprocedure is concerned. Referring to the judgment of theSupreme Court itself given in 1891 counsel referred inparticular to two passages in Clarence, J's judgment, to wit:-
"(a) The Bank of Montreal v. Cameron which like the presentcase was touching special summary procedure;.. .here asin that case the question concerns a special summaryprocedure on bills and notes….
(b) The words of the English rule ' swearing that'
' in his belief' do not occur in our s. 705. The words
of s. 705 are 'he must make affidavit that' etc. ACorporation cannot make affidavit. It is capable ofsatisfying a Court by the affidavit of some individual personwhere the Court is at liberty to accept such an affidavit, butit is not capable itself of making affidavit. Therefore if weare to give the words of s. 705 their plain and ordinarymeaning the affidavit… offered in the present case doesnot satisfy the requirement."
Dias, J. also stated "the case of the Bank of Montreal v. Cameron is onpoint". Several references to rules of construction found in "Bindra'sInterpretations of Statutes"-7th Ed. dealing with omissions were alsomade. I will give the references to the more important ones. They areat pages 33, 358, 360 and 354. In this background Counsel alsocontrasted the provisions of Chapter 53 with those of Chapter 47 ofthe Civil Procedure Code dealing with arrest and sequestration beforeJudgment. In the earlier Chapter in both sections 650 and 653 therewas a reference to the plaintiff being required by his own affidavit tosupport a motion for the arrest of a defendant about to quit Ceylon orsequester the property of the defendant in the circumstances set out.The words "his own" excluded a Corporation. Therefore that Chaptercatered for the situation by special provision (i.e.) s. 655-whichenabled the Court to allow another person (a principal officer) to makeaffidavit in lieu of the plaintiff where the action was brought by aCorporation, Company, etc. It highlighted the fact an affidavit has tobe sworn by a person. Swearing a false affidavit is punishable. Theperson had to be a principal officer not any officer. So there was aspecial rule of procedure to be complied with. So what is sufficient forpurposes of the Companies Ordinance was not sufficient for litigationunder the Civil Procedure Code. It was observed that there was nosuch special provision making such substitution possible in actions insummary procedure on liquid claims. This omission was intentionaland the Court was without power to fill the gap.
Yet another submission of petitioner's counsel was that thepronoun 'he' as used in s.705 (1) must be confined to a naturalperson of either masculine or feminine gender and must not extend toinclude a juristic person by extension to the neuter gender. "He"cannot be construed to mean "it". That would do violence to the
section. This submission and all that went before in regard to 'casusomissus' and rules of statutory construction was to meet asubmission of Mr. Choksy for the respondent that the pronoun 'he' ins.705 (1) must be given a contextual interpretation as s. 705 isimmediately referable to s. 703 so that 'he' must mean the 'plaintiff' ins.703 and that a plaintiff could be a natural or juristic person.
Submission: There was thus a lacuna in the law. Chapter Llll did notcater for claims by juristic persons as such a juristic person could notmake an affidavit as required. The Judges in 1891 recognised this..They correctly followed Cameron's Case (supra) (2) which besides,correctly set out the rules of statutory interpretation. If the Court werenow to give a contextual meaning to s. 705 (1) and extend it to juristicpersons and after doing so solicit the application of s. 34 (1) of theCompanies Ordinance the Court would be filling in a legislative gapwithout justification and the Court is not at liberty to do so. The Courtshould rather limit itself to giving the words of s. 705 (1) simply theirgrammatical and literal meaning and confine the language to naturalpersons. That was the intention of Parliament. The provisions of theCompanies Ordinance thus do not fit into the scheme of the ProcedureCode. It has nothing to do with it. The reference to s. 34 (1) isirrelevant.
A further submission concerned the relevance of the Supreme Courtdecision in the Bank of Madras Case (supra) (1). That decision was thedecision of a coeval Court. There was no appeal preferred against it tothe Privy Council. There could have been as appeals to the PrivyCouncil were allowed since 1 799 by Proclamation dated14.10.1 799. The decision stood as recognised authority ever since.
It had the effect of compelling the legislature to amend the law fouryears later in 1895. It therefore assumes the status of a cursus curiae.At least it must have great persuasive effect. Finally counsel made apassing reference to a recent report of a Committee appointed by theMinister of Justice to examine and report on the law and practicerelating to debt recovery. It was the recommendation of theCommittee that there was a lacuna in the law which precluded aCompany or an unincorporated association from coming into Courtunder Chapter 53.
For all these reasons the decision of the Court below must be struckdown and the plaintiff's action dismissed.
I will now turn to the main contentions of President's Counsel for theplaintiff-respondent who supported the trial judge's decision. It wasthe assertion of learned counsel that a company can in the presentstate of the law maintain an action by way of summary procedureunder the Civil Procedure Code and that the present action is goodunder Chapter 53. The amendment to the Code by the inclusion of s.829(A) in 1895 consequent to the Court's decision in Bank of Madrasv. Ponnusamy (supra) (1) (ante) was an unnecessary amendment. Thedecision of the Supreme Court in the Bank of Madras Case (supra) (1)is not binding on this Court as that Supreme Court was not the finalCourt. There was an appeal available to the Privy Council.
The judgment in the Bank of Madras Case (supra) (1) neverthelessrequires reconsideration as it-
did not take into account the provisions of s. 703 (of the CivilProcedure Code.) It dealt with s. 705 by itself and not inconjunction with the other sections in its setting as it shouldhave. Section 703 was the governing provision in relation tosummary actions;
it failed to consider the provisions of ss. 16 and 65 of the JointStock Companies Ordinance No. 4 of 1861 which was arelevant provision at the time;
it is based on the decision in Cameron's case in which anEnglish statutory procedural provision to wit: Order 14 Rule I -"the plaintiff himself should swear that "in his own belief" . .wasapplicable which is different to our provisions of s. 705 whichdoes not have those words but should be read as "the plaintiffwho so sues must make affidavit". This difference thoughcursorily seen in Clarence, J's judgment quoted however failedto make proper impact on the Judges who should have realisedthat our law admitted juristic persons as plaintiffs by s. 703 andtherefore the complementary provisions contained in theCompanies Ordinance, to wit: s.34 (1) which enabled theaffidavit required by s. 705 (1) to be made couid have beenavailed of. They had not because they construed s. 705 as theempowering Section leaving no room to admit of the possibilitythat by s. 703 a juristic person was being recognised as aperson entitled to sue in summaiy procedure.
To expand the argument reference was made to regular actions.Section 470 was a complementary provision dealing with actions byCorporations and Companies etc. The name and style of theCorporation may be inserted as the name and style of the plaintiff ordefendant; and the plaint and answer may be subscribed by amember, director, secretary, manager or other principal officer able tospeak to the facts of the case. Now s. 703 gives the right to a plaintiffto file an action in summary procedure-
"All actions may in case the plaintiff desires to proceed under thisChapter be instituted by presenting a plaint — etc—" So howdoes a Company file a plaint?
Answer: Through a principal officer.
So a Company can file a plaint. Section 470 is a general section whichapplies equally to regular as well as summary procedure. There is nodifficulty here.
So we come to s.705 (1).
How does a Company file an affidavit? Is there an analogoussection provided for the making of an affidavit? There is. It is s.34(1)of the Companies Ordinance-Cap. 145. Now the questionarises-how does one get to it. Is there something in the Code whichenables the Court to reach for s.34(1) of the Companies Act? Thereis. It is by looking at the intention or purpose or the context ofs.705(1). Give s.705 a contextual interpretation and not the singularnarrow one that was given in 1891. Counsel cited 'StatutoryInterpretation' by Francis Bennion, 1st Edition—(1984) pp. 657-659,and Lord Denning in "Discipline of the Law" where his Lordshipcomplained that his judgment in 1948 applying purposiveconstruction rules in Seaford Court Estates Ltd. v. Asher (3) wasstruck down by Lord Simmonds-pp. 11-14. What justifies suchan exercise? It is the fact that the governing section inChapter 53 is s.703 (i.e.) the recognition of the right of a Corporationor Company to sue in summary procedure as plaintiff. Once that isunderstood the reference to the words "who so sues" in s.705(1)must be seen in its context (i.e.) it must refer to the plaintiff who suesin summary procedure by s. 703. So it is that plaintiff that must makeaffidavit under s. 705 be it a natural person or a juristic person.Therefore the pronoun 'he' in s.705(1) in the sentence "he must makeaffidavit" should not be used in a literal sense only meaning an
individual. The draftsman has used 'he' at this point in the sense of the'plaintiff in s.703. So the pronoun must be understood in its legalsense as including a juristic person. If the pronoun 'he' is understoodonly in its literal sense and a Company regarded as incapable of. offering an affidavit it would result in for instance-
the doctrine of res judicata being rendered inoperable against acompany;
under s. 102 of the Civil Procedure Code a company can saythey are not obliged to make discovery;
a company will not be able to come within the Rules of theSupreme Court requiring a petition to be supported by affidavitwhen asking the Court of Appeal for a writ or revision underChapter XVI of the Constitution; or special leave to appeal tothe Supreme Court in fundamental rights cases;
-all or any of which would result in mischief. So when Clarence, J.says that a company cannot swear an affidavit, in its literal senseyes-but not in a legal sense where legal concepts come into play. Soif the plaintiff is a natural person he himself will make affidavit. If on theother hand, the plaintiff is a juristic person, then is there provision for ajuristic person to make affidavit? There is in s. 34(1) of the CompaniesOrdinance. There is no rule that such provision must be in theProcedural Code itself. So we come to consider the meaning of theword 'affidavit' in s. 705(1). The Oxford Dictionary defines 'affidavit'as a written statement confirmed by oath to be used as judicial proof.Osborne's Concise Law Dictionary-7th Edition defines it as a writtenstatement voluntarily made by the deponent (mostly) from his personalknowledge and signed by him and confirmed by oath or affirmation tobe used as judicial proof. Affidavits are of infinite variety. Now, doess. 34(1) of the Companies Ordinance satisfy this definition of affidavit?Or is it something less than proof of truth. It uses the word'authenticate'. The section runs:- A document or proceedingrequiring authentication by a company may be signed by a director,secretary or other authorised officer of the company and need not beunder its common seal; Submission: Authenticate means to establishthe truth of; it must be noted that the section refers to a 'proceeding'requiring authentication. 'Discovery' is a proceeding. Summaryprocedure is a proceeding. Reference s. 5 of the Civil Procedure Codean 'action' is a proceeding. So a 'proceeding' is authenticated unders.34. Authentication does not mean mere 'subscription'. Unders.470 of the Civil Procedure Code a 'plaint' may be subscribed. Thereyou require merely a signature. The legal term for signing issubscribing. But 'authenticate' means something more. It establishestruth-not mere signing. You establish truth by giving sworn testimonyor swearing an affidavit. So authenticate means to sign and swear oraffirm. So when one authenticates it is sufficient to comply with theOaths Ordinance. Contrast s. 34 with ss. 30, 31,32 of the CompaniesOrdinance where mere signing of simple documents is enough.
So distinguish 'authenticate' in s.34 of the Companies Ordinancewith subscribing in s.470 of the Civil Procedure Code. When the CivilProcedure Code speaks of affidavit it means authenticate. 'Affidavit'and 'authenticate' mean just the same thing. Authentication can bedone by a director, secretary or authorised officer. This has been donein the instant case. The affidavit has been sworn by an authorisedofficer. In the case of L J. Peiris & Co., Ltd. v. L. C. H. Peiris (4) theword 'authenticate' in s.34 was construed to mean "establish thetruth of". So verification by affidavit can be done under this section.There was analogous provision in 1891 to be found in s. 16 and s. 65of the Joint Stock Companies Ordinance which the Supreme Courtcould have considered and applied. But it was never even raised as the .influence of Cameron's case (supra) (2) dealing with Order 14 Rule 1was apparently overpowering and the court failed to consider our CivilProcedure Code in its own terms. Clarence, J. also treated s.655 asan empowering section which it is not. That Chapter 47 dealt withextreme remedies of arrest and sequestration of property. WhenS.829A attracted its use to Chapter 53 it did not mean that s.655became an empowering section to s. 705. Sections 650 and 653speak of the plaintiff's own affidavit. That is why in the case of acompany the authentication needs to be made by a principal officer.Section 655 is a restrictive provision in view of the extreme nature ofthe remedy it provided for. Chapter 53 can exist quite independentlyof Chapter 47. So that learned appellant’s counsel's submissionsaforementioned contrasting the two sections is not an aid tointerpretation in this case. Clarence, J. has not addressed his mind tothis aspect of s.655. Therefore the 9 S.C.C. Judgment is lacking inthat it has not analysed s.703 which is the dominant provision or theenabling provision of law making it possible for companies to swear anaffidavit as aforesaid.
Respondent's counsel submitted that summary procedure was notintended to leave out a large and vital segment of the community suchas the world of business, finance and commerce. In support of his pleafor a contextual interpretation Counsel further cited a constitutionallaw case from Bermuda – Minister of Home Affairs v. Fisher (5) wherethe word 'child' was given a contextual interpretation where the PrivyCouncil was influenced by the doctrine of purposive construction. Yetanother justification for the application of a contextual interpretationwas the modern view of Lord Denning that the Directors of a Companyare the ego of the company itself. The company can therefore swearan affidavit. Collette's case (6) also set a new line of thinking. Othercases cited were Lord Denning's judgment in L. Bolton Engineering'Co., Ltd. v. Graham (7) adopted by Lord Reid in a subsequent case,that a company is not vicariously liable. He is the company. His mind isthe mind of company and if it is a guilty mind then the company has aguilty mind.-1971. 2 A.E.R. 127. Above is the current view inEngland and adopted by the Supreme Court in Sri Lanka in Collette'scase (supra) (6). Therefore a contextual interpretation is valid.Therefore it was submitted the statement of Clarence, J. that acompany cannot swear an affidavit needs rethinking in the light of newjudicial thinking. Counsel submitted that the District Judge's order is inaccordance with the law and in conclusion urged that the appeal bedismissed.
The point of contest between the parties is whether a juristic personsuch as a corporation or company can make the affidavit required foran action in summary procedure to commence.
The view that was expressed by the Judges in the Bank of Madrascase (supra) (1) cited was a binding decision and in 1895 resulted inlegislation to bring the code in accordance with that decision andsupply what was thought to be necessary to permit a fairly largesegment of society to take advantage of what was intended to besimplified procedure.
Learned counsel for the appellant have sought to support thepremises on which the decision in Bank of Madras case (supra) (1)rested-that Chapter 53 of the Civil Procedure Code and no otherdetermines and requires an affidavit to be tendered and thus wherethe plaintiff is a body corporate it is not possible for such to tender anaffidavit.
This Court is however attracted to the guidelines suggested bycounsel for the respondents. He submitted that s. 703 is the dominantand governing section in that chapter dealing with summaryprocedure. That section sets out the manner in which such an actioncan commence by the presentation of a plaint. It provides the meansfor an application to a Court for relief or remedy obtainable through theexercise of the Court's power or authority. Summary procedure is aspecial procedure provided by the Court. So any person recognised bylaw has access to such special procedure. Thus section 703 entitlesany person whether natural or juristic to seek his remedy underChapter 53 by filing plaint. Thus a juristic person is recognised by theCode as competent to seek a remedy in summary procedure by filing aplaint. He would thus be the plaintiff. There was no argument to thecontrary adduced at this hearing. But that plaint must be accompaniedby an affidavit. Section 705 requires that both must co-exist. So aperson cannot have the plaint he presents accepted under Chapter 53procedure unless an affidavt is also presented together with the plaintverifying the claim. So section 703 provides for a beginning of anaction but it must be supported by the requirements of section 705 atthe same time. The two sections are therefore co-related; they areinseparable and must co-exist; they either exist together or not at all.Both provide the context in which summary procedure is madepossible. That they stand together must hence be presumed to be theintent of the legislature. This is doubtless because the affidavit is at thefoundation of the action. It provides the 'truths' upon which theplaintiff petitions the Court. Thus it is the affidavit which governs theplaint. When they stand together the words of each section mustrelate to the other. In this sense what I have just said would amount toa 'purposeful construction’. In section 703 the only reference to aparty is "plaintiff". There are no pronouns used with reference to aparty in that section. Having settled on the plaintiff seeking tointroduce a plaint in s. 703 the other legal requirements prescribed bythe Code expected to be fulfilled by the plaintiff before institution of hisaction are contained in s. 705. Institution has a special legal meaning.It means acceptance by a Court of an action. So in spelling out thoseother requirements to be fulfilled before acceptance of the plaints. 705, avoiding repetition of the word 'plaintiff' uses the pronoun 'he'instead. This is permissible draftsmanship. It is quite regular.Otherwise everywhere, the pronoun 'he' is used in s. 705 the word'plaintiff' would have had to be used That would result in monotonous
unnecessary dull repetition at the expense of a proper use oflanguage. In the result I hold that the word 'he' as used in s.705cannot be given any meaning in isolation. The word cannot even referto a natural person in isolation. In other words, s. 705 cannot stand inthe Code in isolation as no meaning can be given it in suchcircumstances. But some meaning has to be given as it is there. Clarityis achieved by considering it beside s.703 taking both together. Itherefore hold that the pronoun 'he' wherever it is used in s.705refers to the plaintiff recognised in s.703. Such a plaintiff under ourlaw can either be a natural person or a person created by law. So theword 'he' in s.705 must be used in that broad legal sense. It mustinclude a juristic person. One has next to consider whether there isprovision for such a juristic person tendering a plaint to make affidavitand thus comply with s. 705 and have his plaint accepted. The Courthas been referred to s.34(1) of the Companies Ordinance whichspeaks of authentication of a pleading. Pleading there must again betaken in a legal sense. It relates to a document. What sort ofdocument could be taken in a legal sense to constitute a pleading? Iwould venture to say the filing of a plaint would constitute such apleading. So s. 34(1) provides for such a pleading to be authenticated.Authentication according to the Oxford Dictionary means to establishthe truth of, or make valid, or prove to be genuine, prove beyonddoubt the origin or authorship by oath. It recognises, confirms,establishes or proves. It is reduced to writing, signed and sworn. Itthus has all the attributes of an affidavit. An affidavit is also a writtenstatement, signed and confirmed by oath. They both mean the samething. So I say that the provision for 'authentication' of a documentmade by the Companies Ordinance fulfills the requirements of Chapter53 of the Civil Procedure Code and could provide the affidavit insistedupon for the institution of a plaint in summary procedure. I say with thegreatest respect that the construction put on the language of s. 705 ofthe Civil Procedure Code by their Lordships in the Bank of Madras case(supra) (1) is unacceptable. That Court has not considered theimplications of s. 703 and 705 taken together. It was probably not soargued. The consideration of s.705 in isolation in that case isunwarranted. Reliance on Cameron's case (supra) (2) as being in pointwas misleading. Influenced by the findings in Cameron's case (supra)(2) and in the English Rule and in the absence of argument the Courtmay have been misled into contrasting the provisions of s. 655 of theCivil Procedure Code which required an affidavit in summary
proceedings to be made in the deponent's belief thus introducing thebelief of the deponent as having a bearing on the affidavit thusexcluding a juristic person as one capable of making an affidavit insummary proceedings, under s. 705 and thus looking for a provisionwithin the code itself which would permit the making of an affidavit onbehalf of a corporation not realising that s.655 provided for extremesituations but that the general rule lay elsewhere. That Court wasobviously not directed to the provisions of the Joint Stock CompaniesOrdinance and to the connection of s. 703 which could have broughtthings into a proper perspective. I accordingly do not accept thefindings of the Supreme Court in the 9 S.C.C. case as binding on thisCourt or that they have any persuasive effect. I reject the argumentsraised by appellant's counsel that s. 705 should be considered by itselfand the pronoun 'he' given its literal meaning; that would be a wrongconstruction quite without justification. I also reject his arguments thatconsequently there is a gap in the law and that the Court should not tryto fill that gap by bringing in the provisions of the CompaniesOrdinance. There is no gap in our law in this context. Sections 703and 705 of the Civil Procedure Code taken together provide the pathto reach out to s. 34(1) aforesaid and this latter section read withs. 181 provides for the making of an affidavit of facts. The English Ruleregarding the making of an affidavit is thus irrelevant.
Those references to statutory construction made by the learnedJudges in Cameron's case (supra) (2) when faced with the EnglishRule have no application or relevance to construing the provisions ofthe Civil Procedure Code under discussion. The decision in Cameron'scase (supra) (2) has no bearing on the instant case. Nor do thecontents of the report of the Committee appointed by the Minister ofJustice in regard to the law and practice of debt recovery where theyhave stated that there is a lacuna in the law which precludes acompany or an unincorporated association from coming into Courtunder that chapter and referred to in the course of submissions byappellant's counsel make any difference. The Committee's reasons forits recommendations are unknown. Nor is it known whether thatCommittee considered the several matters in depth as were thearguments urged by counsel at this hearing. Whilst I disagree with theCommittee's recommendations they are in any event irrelevant. TheCourt in recognition of the importance of the matter has given earnestconsideration to the submissions of counsel and recognises theassistance they have rendered.
In conclusion I say that the law as it stands permits a Corporation ora Company etc. to the option of instituting action by way of summaryprocedure under Chapter 53 of the Civil Procedure Code for recoveryon liquid claims. An amendment to the Civil Procedure Code by aprovision similar to repealed S.829A is in my view unnecessary.
On the other question of the quantum of security that has beenordered to be deposited by the trial judge, the said sum ofRs. 400,000 is not in excess of the claim as interest has also beenclaimed on the principal amount. That part of the order is therefore notbad in law.
The order of the learned District Judge is affirmed and the appeal isdismissed with costs fixed at Rs. 525.
WIJETUNGA, J. – I agree.
SCIENCE HOUSE (CEYLON) LTD. v. IPCA LABORATORIES PRIVATE LTD.