Ramanayake v. Sampath Bank Limited and Others
v.SAMPATH BANK LTD. AND OTHERS
COURT OF APPEALWIJEYARATNE, J. ANDWEERASEKERA, J.
CA APPLICATION NO. 962/92.
DC COLOMBO CASE NO. 41/DR.
DECEMBER 15. 1992.
Debt recovery – Debt Recovery (Special Provisions) Act No. 2 of 1990 – Debt
Triable issue – Leave to appear and defend – Civil Procedure Code, sections384 to 389 – An issue or question which ought to be tried – Lending Institution
Failure to make demand – Failure to file answer or objections – Decree absolute
Failure to cure default by summary procedure.
Sri Lanka Law Reports
11993/ 1 SriLR.
The plaintiff respondent Bank sued the 3rd defendant-petitioner and the 1st,2nd and 4th defendants-respondents seeking the recovery of Rs. 1,171,697/73with interest and costs under the provisions of the Debt Recovery (SpecialProvisions) Act No. 2 of 1990. The 1st and 2nd defendants-respondents werethe borrowers and the 3rd defendant-petitioner and 4th defendant-respondentswere the guarantors.
The provisions of the Debt Recovery (Special Provisions) Act, No. 2 of1990 are available to lending institutions as defined in the Act. A commercialbank is such a lending institution. This procedure is however not available wherethe loan or advance is less than Rs. 1,50,000 or where the amount claimed asinterest exceeds the principal sum. No sum of money which constitutes a penaltyfor default or delay in payment of a debt can be recovered under the Act.
A debt recoverable under the Act is a sum of money which is ascertainedor capable of being ascertained at the time of institution of the action and whichis in default and alleged by a lending institution to have arisen from a transactionin the course of banking, lending, financing or other allied business activity ofthe institution but does not include a promise or agreement which is not in writing.
A plaint filed under the provisions of the Act must be accompanied byan affidavit to the effect that the sum claimed is justly due from the defendantas well as the instrument, agreement or document sued upon or relied on. Theaffirmant of the affidavit should be-ta) a director or principal officer of the lending institution or an attomey-at-law duly authorised to bring and conduct the action, and
(b) a person having personal knowledge of the facts of the cause of action;and this fact must be averred in the affidavit.
If the instrument, agreement or document is produced before court andappears to be properly stamped (when required by law to be stamped) and notopen to suspicion by reason of any alteration or erasure or other matter on theface of it, and not barred by prescription, the court being satisfied of the contentsof the affidavit shall enter a decree nisi in the form set out in the first scheduleto the Act and have it served on the defendant for his appearance and showingcause on a day as early as can conveniently be appointed having regard to thedistance of the defendant's residence from the court.
The defendant shall not appear or show cause against the order nisi unlesshe obtains leave from the court. Leave to appear and defend has to be grantedupon the defendant paying into court the sum mentioned in the decree orfurnishing reasonable and sufficient security for satisfying the decree. Leave maybe granted unconditionally where the court is satisfied that the defendant's affidavitand other material raise an issue or question which ought to be tried (section6 (2) (c) of the Act). The purpose of section 6 is to prevent frivolous or untenabledefences and dilatory tactics.
Ramanayake v. Sampath Bank Limited and Others
An issue or question which ought to be tried means a plausible defencewith a triable issue ; that is to say, an issue which cannot be summarily disposedof on the affidavits but requires investigation and trial.
The court has to decide which of the alternatives under section 6 (2) -whether (a), (b) or (c) – has to be followed and the court has to exercise itsdiscretion judicially. The court must briefly examine the facts of the case, setout the substance of the defence and disclose reasons in support of the order.
In this case the 3rd and 4th defendants-petitioners had been givenunconditional leave. The 3rd defendant In his affidavit has not dealt specificallywith the plaintiffs claim and stated his defence and the facts relied on as requiredby section 6(2) (c). He had denied the correctness of the loan account, but hadnot specified in which particulars the loan account was incorrect, neither statingthe reasons for so alleging nor the facts he was relying on to support his claimthat the loan account was incorrect. He had not dealt with the plaintiffs claimon its merits but merely set out objections of a technical nature. If a defendantis granted leave unconditionally on this type of technicality and evasive denial,then the purpose of this Act will be brought to naught.
The decree absolute entered against the 3rd defendant-petitioner fornon-appearance cannot be challenged on the merits in the trial court but couldhave been set aside by curing the default by taking steps under section 389of the Civil Procedure Code by summary procedure within a reasonable time.This was not done and no excuse was given for the default of appearance andfor the delay in filing the present application.
Failure to aver in the affidavit that the amount due is "justly due" is nota fatal defect if the affidavit shows that the amount is rightly and properly due.
Cases referred to :
Ramanathan v. Fernando 31 NLR 495.
Esquire (Garments) Industry Ltd. v. Sadhwani (Japan) Ltd.  2 Sri LR243.
Read v. Samsudin 1 NLR 292.
Soysa v. Soysa 17 NLR 118.
Awa Umma v. Casinaden 24 NLR 199.
Miriam Lawrence v. Amolda  1 Sri LR 232.
Divisional Forest Officer v. Sirisena  1 Sri LR 44.
Wijesinghe v. Perera 2 CLW 506.
Anamalay v. Allien 2 NLR 251.
Paindathan v. Nadar 37 NLR 101.
Jayalath v. Abdul Razak 56 NLR 145.
Marjan v. Rasiah 51 NLR 34.
M. Rajendra (Permanent Secretary to the Ministry of Transport and Works)v. Parakrama Ltd. 63 NLR 554.
Sri Lanka Law Reports
 1 SriLR.
APPLICATION in Revision from the Order of the District Court of Colombo.Romesh de Silva, P.C. with Harsha Amarasekera for 3rd defendant^Ktitioner.S. A. Parathalingam for the plaintiff-respondent.
Cur. adv. vult.
January 21, 1993.
The plaintiff-respondent (Sampath Bank Limited) filed this action underthe Debt Recovery (Special Provisions) Act, No. 2 of 1990 (hereinafterreferred to as the Act) against the 3rd defendant-petitioner and the1st, 2nd and 4th defendants-respondents, seeking recovery of a sumof Rs. 1,171,697.73 together with interest and costs.
The 1st and 2nd defendants-respondents are the borrowers ofthe loan said to have been granted by the plaintiff-respondent on30th June 1989 while the 3rd defendant-petitioner and the 4thdefendant-respondent are the guarantors of the said loan.
Under the Debt Recovery (Special Provisions) Act, No. 2 of 1990,a lending institution (which has been defined to mean a licensedcommercial bank, the State Mortgage and Investment Bank, theNational Development Bank, the National Savings Bank, the Devel-opment Finance Corporation of Ceylon, or a registered financecompany) may recover a debt due to it by an action instituted followingthe procedure laid down in the Act. This procedure is not availablewhere the principal amount lent or advanced is below Rs. 1,50,000.
"Debt" has been defined as a sum of money which is ascertainedor capable of being ascertained at the time of institution of the actionand which is in default and alleged by a lending institution to havearisen from a transaction in the course of banking, lending, financingor other allied business activity of that institution, but does not includea promise or agreement which is not in writing.
The institution presenting the plaint has to file an affidavit to theeffect that the sum claimed is justly due from the defendant and hasin addition to produce to the court the instrument, agreement ordocument sued upon or relied on by the institution. .
CARamanayake v. Sampath Bank Limited and Others (Wijeyaratne, J.)149
The affidavit has to be made by any director or a principal officeror by an Attorney-at-Law duly authorised to bring and conductthe action and such affidavit shall be made by such person havingpersonal knowledge of the. facts of the cause of action and suchperson shall swear or affirm to that effect in the affidavit.
If the instrument, agreement or document is produced to courtand it appears to be properly stamped (when required by law to bestamped) and not open to suspicion by reason of any alteration orerasure or other matter on the face of it, and not barred by pre-scription, the court being satisfied of the contents of the affidavit shallenter a decree nisi in the form set out in the First Schedule to theAct and the decree nisi has to be served on the defendant.
The day to be inserted in the decree nisi as the day for thedefendant's appearance and showing cause, if any, against it shallbe as early a day as can conveniently be named, having regard tothe distance from the defendant's residence to the court.
The institution has to tender with the plaint-fa) the affidavit and the instrument, agreement or document suedupon ;
the draft decree nisi ;
the requisite stamps for the decree nisi and service thereof.
Under section 6 (1), the defendant shall not appear or show causeagainst the decree nisi unless he obtains leave from the court.
Section 6 (2) provides that leave to appear and show causeagainst the decree nisi may be given –
upon the defendant paying into court the sum mentioned in thedecree nisi, or,
upon the defendant furnishing reasonable and sufficient securityfor satisfying the decree, or
upon affidavits satisfactory to the court that there is an issueor a question in dispute which ought to be tried. The affidavitof the defendant has to deal specifically with the plaintiffs claimand state clearly and concisely the defence and the facts reliedon as supporting it.
Sri Lanka Law Reports
[1993) 1 SriLR.
Section 6 (3) provides that in default of the defendant obtainingleave for appearance and showing cause, the court shall make thedecree n/si absolute and the provisions of section 389 of the CivilProcedure Code (hereinafter referred to as the Code) shall, mutatismutandis, apply to such order. For this purpose the judge has toendorse the words “decree nisi made absolute" (or words to the likeeffect) upon the decree nisi and date and sign the endorsement.
Section 7 provides that if the defendant appears and leave toappear and show cause is given, the provisions of sections 384 to389 (inclusive) of the Civil Procedure Code shall, mutatis mutandis,apply to the trial of the action.
Sections 13 to 15 enact special provisions relating to execution.
Sections 16 to 18 provide for the giving of security in the eventof appeals from orders or decrees made under the Act.
Section 21 provides that under certain circumstances the procedureunder the Act cannot be availed of where the amount claimedas interest exceeds the principal sum and section 22 provides thatno sum of money which constitutes a penalty for default or delayin payment of a debt can be recovered under the Act.
Section 24 lays down that nothing in the Debt Conciliation Ordinanceand the Money Lending Ordinance shall apply to, or in relation to,a lending institution.
Section 25 creates new offences for drawing cheques withoutfunds and such like.
Section 27 provides that where a debtor dies before or after institutionof action, where grant of probate or letters of administration has notbeen made, the court' may, in its discretion, after inquiry, appoint aperson to represent the estate of the deceased (which is similar tothe new section 398 of the Code introduced by the Amendment Act,No. 6 of 1990).
The procedure under this Act is very similar to the summaryprocedure on liquid claims provided in Chapter 53 (sections 703 to711) of the Code.
Ramanayake v. Sampath Bank Limited and Others (Wijeyaratne, J.)
Section 704 (2) of the Code provides that the defendant shallnot be required, as a condition of his being allowed to appear anddefend, to pay into court the sum claimed or to give security thereforunless the court thinks his defence not to be prima facie sustainableor feels reasonable doubt as to its good faith.
Section 706 of the Code, inter alia, provides that "the court shall,upon application by the defendant, give leave to appear and to defendthe action upon the defendant paying into court the sum mentionedin the summons or upon affidavits satisfactory to the court, whichdisclose a defence or such facts as would make it incumbent on theholder to prove consideration or such other facts as the court maydeem sufficient to support the application", which may be contrastedwith the wording of section 6 (2) (c) of the Act.
In the case of Ramanathan v. Fernando 0), it was argued thatsection 706 of the Code gives a court discretion whether to grantleave or not even if the defendant brings the money to court. It washeld in this case that it is the right of every person against whoman action is instituted to appear and, unless he admits the claim,to file his answer. It was further held that on deposit of the sumin court the defendant has an unqualified right to appear and defendthe action even though the court finds that no valid or sustainabledefence is disclosed on the affidavits. The court has no discretionin the matter to refuse leave where the money is brought into court.The reason for this decision is that at this stage the court does notgo into the merits of the case and it would offend one's sense ofjustice if the defendant is deprived of an opportunity to contest thecase. The plaintiffs interests are safeguarded by the deposit of themoney in court for which purpose a date is granted and it is directedthat if the defendant fails to deposit the money, leave is refused andjudgment will be entered for the plaintiff.
There is a remarkable similarity in the opening lines of section706 of the Code and those of section 6 (2) of the Act. Both thesesections begin with the words: "The court shall upon (the) applicationby (of) the defendant give leave to appear and to defend(show cause)"
As stated in Bindra's "Interpretation of Statutes" (7th Edn.1984) at page 400 :
Sri Lanka Law Reports
11993} 1 Sri L.R.
"it is conducive to judicial discipline to interpret identical provisions
in two Acts which are in pari materia, in a similar manner."
Hence, following the decision in Ramanathan v. Fernando (supra),
I am of the view that a defendant is entitled as of right under theAct to appear and show cause against the decree nisi –
by paying into court the sum under section 6 (2) (a), or
by furnishing reasonable and sufficient security for same undersection 6 (2)(b), even though his affidavit does not disclose anissue or question which ought to be tried.
Leave may be granted unconditionally under section 6 (2) (c) wherethe court is satisfied that the defendant's affidavit raises an issueor question which ought to be tried.
The court has to decide which of the alternatives under section6 (2) – whether (a), (b) or (c) – is to be followed when grantingleave. The court has to exercise its discretion judicially in the matter.The court must briefly examine the facts of the case before it, setout the substance of the defence, and disclose reasons in supportof the order.
In the case of Esquire (Garments) Industry Ltd. v. Sadhwani(Japan) Ltd.(2) it was held that sections 704 and 706 of the Codewere relevant to the question of granting leave to appear and defendand the correct question was whether a triable issue arose in theaffidavits and documents before court.
Now what is a triable issue? The matter has come up forconsideration in India where Order 37 Rule 3 (old section 553) ofthe Indian Civil Procedure Code is similar to section 706 of our Codeand the law has been set out as follows
"A triable issue can only mean that a defence is revealed ordisclosed in the affidavit of the defendant which cannot besummarily disposed of on the affidavits and which requires afurther trial or investigation. It also means that if the trialand further investigation resulted in the defendant's contentionbeing found to be correct the defendant would be entitled tosucceed. “ -1959 I.L.R. (Bombay) 496 at 499 quoted in Chitaleyand Rao's “Code of Civil Procedure", Vol. 3, 7th Edn. 1963, atpage 3951.
CARamanayake v. Sampath Bank Limited and Others (Wijeyaratne, J.)153
It is significant that this concept of a triable issue is found insection 6 (2)(c) of the Act which states that the court shall, uponthe application of the defendant, give leave to appear and show causeagainst the decree nisi inter alia, "upon affidavits satisfactory to thecourt that there is an issue or a question in dispute which oughtto be tried.”
The principles applicable to the granting of leave to defend or toshow cause under the two procedures are somewhat similar. Howeversection 6 (2)(c) of the Act expressly provides for the affidavit of thedefendant to deal specifically with the plaintiffs claim and his defencethereto and what facts are being relied on in support thereof. Thedefendant has to deal with the plaintiffs claim on its merits ; it isnot competent for the defendant to merely set out technical objections.It is also incumbent on the defendant to reveal his defence, if hehas any.
Then the important question arises as to what is meant by thewords "an issue or question which ought to be tried".
I am of the view that they mean nothing more than a plausibledefence with a triable issue ; that is to say an issue which cannotbe summarily disposed of on the affidavits, but requires investigationand trial. For this purpose the defendant is bound under section6 (2)(c) to deal specifically with the plaintiff's claim on its merits andhis defence thereto and what facts are relied on as supporting suchdefence. Hence the court is in an advantageous position to examinethe defendant's affidavit and any other material to find out whethera plausible defence with a triable issue is disclosed, in which eventleave may be granted unconditionally under section 6 (2)(c).
On the other hand, mere technical objections and evasive denialswill not suffice.
If no plausible defence with a triable issue is set up, the judgecan give the defendant leave to appear and show cause against thedecree nisi by placing him on terms either under section 6 (2)(a)or section 6 (2)(b).
The purpose of section 6 of the Act (and also sections 704 and706 of the Code) is to prevent frivolous or untenable defences beingset up and to avoid the lengthening of proceedings by dilatory tactics.
Sri Lanka Law Reports
 1 SriLR.
This Act provides an expeditious method for the recovery of debtsdue to lending institutions, in the larger interest of the economy.
Coming to the facts of this case, this action was filed on 11.7.91.On that day, in the journal entry, the order of the learned AdditionalDistrict Judge is recorded as follows
The plaint and the relevant annexures are accepted.
(a) The documents relied on by the plaintiff are duly stamped
and not open to suspicion.
The claim is not prescribed.
The court is satisfied of the averments in the affidavit.
No penal sum has been included in the claim.
In terms of the prayer in the plaint a decree nisi is entered.
If the defendants have cause to show against this decree nisi,they are given an opportunity to appear in court and to sodo on 91.09.30.
Enter decree nisi accordingly and issue the same on thedefendants for 91.09.30.
The learned Additional District Judge has signed the said journalentry.
The journal entry of 30.9.91 shows that the decree nisi had beenserved on all four defendants and that they had filed their respectivepetitions and affidavits.
After this an inquiry was held and written submissions weretendered to court.
Thereafter by his order dated 13.3.92 the learned Additional DistrictJudge made order rejecting the applications of the 1st and 2nddefendants to show cause against the decree nisi and made itabsolute against them and had made an endorsement to that effectthereon.
He had permitted the 3rd and 4th defendants to show causeagainst the decree nisi and granted a date, namely 26.3.92, for thefiling of objections.
CARamanayake v. Sampath Bank Limited and Others (Wijeyaratne, J.)155
In the course of the said order dated 13.3.92 the learnedAdditional District Judge has said that in terms of paragraph 2 ofthe document produced marked P1, it appears that no demand hasbeen made by the plaintiff from the guarantors. Accordingly it appearsprima facie that the 3rd and 4th defendants have sufficientgrounds to satisfy the court that they have a defence and they weregranted unconditional leave to show cause against the decree nisi.Presumably the court was satisfied under section 6 (2)(c) of the Act.
On 26.3.92 the 3rd and 4th defendants were absent, nor werethey represented by Attorneys-at-Law ; they failed to file objectionsor any answer.
Accordingly the learned Additional District Judge made order thatunder section 7 of the Act sections 384 to 391 of the Civil ProcedureCode are made applicable and that the 3rd and 4th defendants havefailed to show any cause against the decree nisi entered againstthem being made absolute. He therefore entered order absoluteagainst the 3rd and 4th defendants too.
More than 3 -1/2 months later, by a motion dated 20.7.92, the3rd defendant-petitioner has stated that the decree nisi has beenmade absolute per incuriam, in that –
there is no valid affidavit of the plaintiff ;
the plaint does not disclose a valid cause of action.
Consequently the matter was fixed for inquiry. Written submissionswere tendered by parties and the learned Additional District Judgemade his order dated 19.11.92 rejecting this application of the 3rddefendant-petitioner. In the course of his order the learned AdditionalDistrict Judge has stated that the 3rd defendant has failed to curehis default of appearance on 26.3.92 and hence he has no legal statusto make this application. He compared the position of the 3rddefendant to that of a defendant who was absent and a decree hasbeen entered against him in his absence under section 85 of theCivil Procedure Code. Such a person has first to cure his defaultunder section 86 of the Civil Procedure Code. Without curing hisdefault he cannot now challenge any orders made in the course ofthe proceedings.
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 1 Sri LR.
The present application has been filed by the 3rd defendant-petitioner on 9.12.92 in this court to revise and set aside the saidorder dated 19.11.92 and to stay all proceedings in consequence ofthe decree nisi being made absolute.
At the hearing of this application Mr. Romesh de Silva, P.C., forthe 3rd defendant-petitioner, submitted that the plaint does notdisclose a cause of action, because in paragraph 2 of the guaranteebond (P7) it is stated that the guarantors "hereby agree to pay theBank in Colombo moneys herein mentioned ten days after demandin writing is made on us". Nowhere in the plaint or afffidavit is itaverred that the money had been demanded from the 3rd defendant-petitioner. He relied on the decisions in Read v. Samsudin (3), Soysav. Soysa<4), Awa Umma v. Casinaden(5), Miriam Lawrence v. Arnolda
, and Divisional Forest Officer v. Sirisena (7).
He also submitted that the learned Additional District Judge inhis order dated 13.3.92 had already come to the conclusion thatthere was no cause of action set out in the plaint as there is noaverment that a demand was made. Therefore, acting on the basisnunc pro tunc, the claim should be dismissed as against the 3rddpfendant-petitioner.
He also submitted that the affidavit was defective, in that-
the jurat does not state whether the affidavit was sworn oraffirmed ;
there was no averment that the amounts were justly due to theplaintiff as required by section 4 (1) of the Act.
Mr. Romesh de Silva also submitted that the failure of the 3rddefendant-petitioner to appear or to file objections on 26.3.92 onlyresults in the 3rd defendant-petitioner being precluded from relyingon any additional evidence contained in those objections and annexuresthereto. The court had to exercise its independent discretion on theavailable material whether the plaintiff is entitled to maintain his claimagainst the 3rd defendant-petitioner. He submitted that in view of thefact that the court has already accepted the position that there wasno cause of action disclosed against the 3rd (and 4th) defendants,the plaint should have been dismissed. Therefore he submitted thatacting in revision this court should set aside the order absolute dated19.11.92.
CARamanayake v. Sampath Bank Limited and Others (Wijeyaratne J.)157
Mr. S. A. Parathalingam (for the plaintiff-respondent who had beennoticed as a stay order has been sought) submitted that the 3rd (and4th) defendants were in default in failing to state or file objectionsunder section 384 on 26.3.92 and the court acted correctly in makingthe order absolute.
He also submitted that the order absolute cannot now be set asideon its merits, but it could have been set aside under section 389of the Civil Procedure Code on the grounds stated therein (namelyaccident, misfortune or non-service of order nisi). He also submittedthat the court cannot at this stage look into the question whetherthe plaint disclosed a cause of action.
I have carefully considered these submissions.
In the affidavit filed it is specifically stated that the deponent isa Buddhist. Presumably this affidavit would have been affirmed toand not sworn though the jurat does not say so. In any event thisobjection does not appear to have been taken up before the learnedAdditional District Judge, and it is not open to the 3rd defendant tourge it now.
In section 705 (1> of the Civil Procedure Code dealing with thesummary procedure on liquid claims, it is laid down that the plaintiffmust make affidavit that the sum which he claims is "justly due" tohim from the defendant, which is similar to the wording in section4 (1) of the Act. The question has been considered whether the useof the words "justly due" is imperative in an affidavit filed under section705 (1).
On this point there have been conflicting decisions of the SupremeCourt in the cases of Wijesinghe v. Perera (B), and Anamalay v.Allien (9).
However it was held finally by a bench of three judges of theSupreme Court in the case of Paindathan v. Nadar (10) that it is notessential that the plaintiff should use the word "justly" in the affidavitif the facts set out therein show that the sum was rightly or properlydue. So too in this case the affidavit shows that the amount is rightlyand properly due, and hence this is only a technical objection whichshould not be allowed to prevail. However, I would stress on the
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necessity of compliance with the wording of the section by the affidavitstating that the sum claimed is "justly due".
It has also been held in the court below that the total liabilityenforceable against the guarantors (i.e. the 3rd and 4th defendants)shall not exceed Rupees One Million together with all interest thereoncomputed from the date on which the demand in writing shall bemade by the Bank, and there is no averment that such a demandwas made in writing.
If the 3rd defendant-petitioner had filed his objections and thematter was fixed for inquiry, it would have been open for the plaintiffto meet this argument by showing specifically how the amount claimed,namely, Rs. 1,171,697/73 was arrived at, whether it includes interestand if so from what date, and also whether a demand in writing wasin fact made, though not pleaded in the plaint.
Mr. Romesh de Silva's main submission was that the learnedAdditional District Judge by his order dated 13.3.92 has held thatthe plaint does not disclose a cause of action against the 3rd and4th defendants. For this purpose I have carefully perused the order.
In the course of the order the learned Additional District Judgestates that it appears that in terms of paragraph 2 of P7 (the bond)no demand has been made from the guarantors. Accordingly theaffidavit discloses that, prima facie (belu belmata) the 3rd and 4thdefendants have grounds to set up a defence, as there is a questionof law arising out of this dispute. He has not stated that the plaintdoes not disclose a cause of action. If he had so held, I have nodoubt that he would have dismissed the plaint immediately thereafter.
In any event it is well settled that even if the order of the learnedAdditional District Judge was wrong, it is valid and binding uponthe parties until it is reversed by an appellate tribunal and cannotbe challenged in collateral proceedings. See the decisions ofthe Supreme Court in Jayalath v. Abdul Razak (1,> and Marjan v.Rasiah (12).
Section 7 of the Act says that if leave to appear and showcause is given, the provisions of sections 384, 385, 386, 387, 388,390 and 391 of the Civil Procedure Code are applicable. In the caseof M. Rajendra (Permanent Secretary to the Ministry of Transport andWorks) v. Parakrama Ltd. (,3) it was held that under section 384 the
Ramanayake v. Sampath Bank Limited and Others (Wijeyaratne, J.)
respondent could appear by a lawyer and obtain a date to file orstate his objections. This has not been done by the 3rd defendant-petitioner and he is in default.
Thereafter the 3rd defendant-petitioner has taken no steps undersection 389 to have this order set aside on any of the grounds statedtherein. In these circumstances it is not open to him to raise objectionsregarding the validity of the order dated 26.3.92 three and a halfmonths later by a motion dated 20th July 1992. To set aside theorder dated 26.3.92 he should have acted under section 389 of theCivil Procedure Code by way of summary procedure to cure hisdefault, which he has failed to do.
Section 389 specifically provides that the application to set asidea final order made in the case of a respondent's non-appearanceshall be by way of summary procedure and that too within areasonable time. Therefore a petition and affidavit along with otherexhibits, if any, should have been filed instead of a motion. Theprocedure followed has been wroing and on that ground too themotion should have been disallowed.
In his application he has not given any reason for his failureto appear on 26.3.92 except to st^te in paragraph 8 of the petitionfiled in this court that the petitioner was unaware of what steps hadto be taken due to some confusion that prevailed between thepetitioner and his lawyers. No acceptable excuse has been statedfor the default of appearance on 26.3.92 . The 3rd defendant-petitioneralso adduced no reason why he delayed more than 3-1/2 monthsto make the present application.
For all these reasons the 3rd defendant-petitioner's application hasno merit and has to be dismissed.
Before concluding this case I wish to state that I have perusedthe affidavit dated 30.9.91 filed by the 3rd defendant in this case.In the affidavit he has admitted signing the guarantee bond but deniedthe correctness of the particulars of the loan account (marked P9)filed by the plaintiff Bank.
The 3rd defendant has gone on to state some objections whichare of a technical nature, namely,
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The plaint and affidavit do not conform to section 4 (1) ofthe Act.
No cause of action against him is disclosed.
The plaintiff has not complied with paragraph 2 of theguarantee bond (P7).
The plaint does not disclose whether any demand either orallyor in writing was made against him.
The 3rd defendant in his affidavit has not dealt specifically withthe plaintiff's claim and stated his defence, apart from denying thecorrectness of the loan account (P9). He has not specified in whichparticulars the loan account is incorrect, nor the reasons for soalleging. He has not stated on what facts he is relying to supporthis claim that the l(^an account is incorrect.
He has not set out the grounds for stating that the plaint andaffidavit do not conform to section 4 (1) of the Act. One could onlyinfer that it was because the words "justly due" were not used inthe affidavit. However, as hereinbefore stated, this is not fatal defect.
He has not dealt with the plaintiffs claim on its merits, but merelyset out objections of a technical nature.
I am of the view that the affidavit does not disclose a plausibledefence and a triable issue and the 3rd defendant should havebeen given leave to show cause against the decree nisi only onterms either under section 6 (2) (a) or section 6 (2)(b) of the Act.If a defendant is granted leave unconditionally to show cause againstthe decree nisi on this type of technicality, then the purpose of thisAct will be brought to naught.
I affirm the order of the learned Additional District Judge dated26.3.92 and 19.11.92.
The application is dismissed with costs payable by the 3rd defendant-petitioner to the plaintiff-respondent.
WEERASEKERA, J. – I agree.
RAMANAYAKE v. SAMPATH BANK LTD. AND OTHERS