Ghouse v. Mercantile Credit Limited
MERCANTILE CREDIT LIMITED
G. P.S. DE SILVA, C.J.,
DHEERARATNE, J. ANDRAMANATHAN, J.
S.C. APPEAL NO. 108/94.
A. REVISION NO. 870/91.
C. COLOMBO NO. 93243/M.
JUNE 23, 1995.
Civil Procedure Code – Money Decree – Writ of Execution – Seizure of exemptproperty – Claim by Judgment Debtor – Court having jurisdiction to investigateclaim – Civil Procedure Code sections 218, 244, 245, 343 and 344.
The fiscal executing a decree of the District Court of Colombo seized certainpremises situated at Yatiyantota within the local limits of the jurisdiction of theDistrict Court of Avissawella. The judgment-debtor, relying on the proviso tosection 241 of the Civil Procedure Code, claimed before the District Court ofAvissawella that the premises seized was his actual residence and it was notliable to seizure.
The judgment-debtor was not entitled to prefer the claim in terms of section 241of the Code and that the District Court of Avissawella has no jurisdiction to holdan inquiry and order the release of the property seized.
Case referred to:
1. Karuppan Chetty v. Anthonayake Hamine, 5 N.L.R. 300.
APPEAL from judgment of the Court of appeal.
S. Edirisinghe with Luxman Amarasinghe for claimant-respondent.
Geoffrey Alagaratnam with Nazli Buharyior plaintiff-respondent.
Cur. adv. vult.
Sri Lanka Law Reports
 2 Sri L.R.
July 7, 1995.
G. P. S. DE SILVA, C.J.
The respondent instituted proceedings in the District Court ofColombo against the claimant for the recovery of certain sums ofmoney and for the return of the vehicle in terms of the hire purchaseagreement entered into between the respondent and the claimant.The claimant consented to judgment and agreed to make paymentby instalments. He, however, failed to make the due payments asagreed upon, and the respondent took out writ of execution andseized certain premises at Yatiyantota, which according to theclaimant, was his actual residence. These premises were situatedwithin the local limits of the jurisdiction of the District Court ofAvissawella.
The claimant filed a petition in the District Court of Avissawellaseeking the release of the property from seizure on the ground that itwas his actual residence, and therefore exempt from seizure underthe provisions of section 218(n) of the Civil Procedure Code. Theclaimant purported to prefer his claim to the property seized undersection 241 of the Civil Procedure Code. The District Court ofAvissawella, after inquiry, held in favour of the claimant and releasedthe property from seizure. Thereupon the respondent moved theCourt of Appeal by way of revision and the Court of Appeal set asidethe order of the District Court of Avissawella dated 6.9.91 releasingthe property from seizure. Dissatisfied with the judgment of the Courtof Appeal, the claimant has now preferred an appeal to this court.
The short point that arises for decision in this appeal is whether theclaimant, who was himself the judgment-debtor, is entitled to prefer aclaim to the property seized in terms of section 241 of the CivilProcedure Code. It was the contention of Mr. Edirisinghe for theclaimant that the District Court of Avissawella had jurisdiction toinvestigate the claim in terms of the first proviso to section 241 of theCivil Procedure Code. On the other hand, Mr. Alagaratnam for therespondent submitted that the District Court of Avissawella had nojurisdiction to hold the inquiry as the judgment debtor is not a person
Ghouse v. Mercantile Credit Limited (G. P. S. De Silva, C.J.)
contemplated by the provisions of section 241 as one entitled toprefer a claim to property seized by the Fiscal.
Sections 227 to 240 of the Civil Procedure Code deal with themodes of seizure and matters connected with seizure. The seizure ofparticular property is the first overt act which would signify that aparticular property would in due course be sold to satisfy thejudgment debt. Section 218 enacts that the judgment-creditor has thepower to “to seize, and to sell or realise in money by the hands of theFiscal … all saleable property … belonging to the judgment-debtor,or over which or the profits of which or the profits of which thejudgment-debtor has a disposing power, which he may exercise forhis own benefit, and whether the same may be held by or in thename of the judgment-debtor or by another person in trust for him oron his behalf.” Thus it is seen that it is necessary to safeguard therights of a third party who owns the property or claims an interest inthe property seized. It is section 241 which sets out the procedure fora third party to prefer a claim to the property and for the court toinvestigate such claim. As submitted by Mr. Alagaratnam the words“in section 241 … and the Court shall thereupon proceed in asummary manner to investigate such claim or objection with the likepower as regards the examination of the claimant or objector, and inall other respects, as if he were a party to the action …,” areindicative of the fact that the judgment-debtor is not a personcontemplated by the section. The powers of the court upon aninvestigation of a claim preferred in terms of section 241 are set out insections 244 and 245 of the Civil Procedure Code; these provisionslend further support to the view that a judgment-debtor is not entitledto have recourse to section 241. Mr. Alagaratnam also referred us tothe case of Karuppan Chetty v. Anthonayake Hamine, whereinBonser C.J, made the observation that the judgment-debtor is not anecessary party to an inquiry under section 241.
On a consideration of the matters set out above, I hold that thejudgment-debtor is not a person who is entitled to prefer a claim tothe property seized under the provisions of section 241 of the Civil-Procedure Code. Consequently, the District Court of Avissawella hadno jurisdiction to hold an inquiry and order the release of the propertyseized. It is the District Court of Colombo which passed the decree
Sri Lanka Law Reports
 2 Sri L.R.
that has jurisdiction in this matter-vide sections 343 and 344 of theCivil Procedure Code. The language of section 344 is wide enough toinclude a claim by the judgment-debtor that the property is exemptfrom seizure.
In the result, the judgment of the Court of Appeal is affirmed andthe appeal is dismissed with costs fixed at Rs. 750/-.
DHEERARATNE, J. – I agree.
RAMANATHAN, J. -1 agree.
GHOUSE v. MERCANTILE CREDIT LIMITED