v.LANKA TYRELANDS COMPANY (PVT) LTD AND OTHERS
COURT OF APPEALWEERASURIYA, J.
C. HOMAGAMA 1454/SPLMAY 10, 2000
JUNE 9. 2000
Companies Act No 17 of 1982 – Winding up – Procedure – Winding upRules 1939 – Subsidiary Legislation Vol. II Rules 8, 9 No. 43 of 1982Stamp Duty Act S.71 – Rules framed thereunder.
The Petitioner- Appellant sought to wind up the 1st Respondent – Respondent- Company on the ground that the said Company Is unable to pay Its debts.
The Petitioner tendered to Court, the Petition, documents in support andthe affidavit of verification.
The Respondent contended that –
the Petition was not served on the 1st Respondent Company;
the affidavit of verification was not served on the 1st Respondentcompany;
the affidavit of verification was not duly stamped;
The District Court held with the Respondent. On Appeal –
In terms of Rules 8 and 9 of the winding up Rules, there is norequirement that verifying affidavit should be served on the Is*Respondent Company;
If the verifying affidavit contains a 'class' stamp, there is no requirementto affix Rs. 1A stamp on the verifying affidavit.
The Fiscal has reported that the Petition was served on the Company.APPEAL from the Judgment of the District Court of Homagama.
Sri Lanka Law Reports
120011 3 Sri L.R.
Nthal Fernando with Ms. Nilani Somadasa, for Petitioner Appellant.
R. K. W. Gunasekera with C. V. Vluekanandan. for 1st Respondent -Respondent company.
Cur. adu. uult.
September 15, 2000.
WEERASURIYA, J.The petitioner – appellant instituted action in the DistrictCourt of Homagama, seeking to wind up the Is' respondent -respondent company in terms of the Companies Act No. 17 of1982 on the ground that the said company is unable to pay itsdebts and it is just and equitable that in the circumstancesthat the said company should be wound up.
The petition relating to the winding up application togetherwith the documents XI-XI2 was filed in the District Court on17. 09. 1991. The affidavit of verification was affirmed by thepetitioner – appellant on 19th September which was tendered toCourt on the same day when the application was supportedand the Court fixed the inquiry for 10.12.1991. Upon proof ofservice of the petition and the documents on 24. 09. 1991 asevidenced by the report of the fiscal, on 04. 10. 1991 the 1strespondent-respondent (company) filed its proxy and movedfor time to file objections.
Thereafter, when this matter came up for inquiry, 1strespondent-respondent (company) raised the followingpreliminary objections as to the maintainability of the action.
That the petition was not served on the 1st respondent -respondent company:
that the affidavit of verification was not served on the lslrespondent-respondent;
That the affidavit of verification was not duly stamped.
CA Kotalawela u. Lanka Tyrelands Company (pot) Ltd and other 279(Weerasurlya, J. )
Learned District Judge, by her order dated 06. 10. 1992,upheld the preliminary objections and dismissed the application.It is from the aforesaid order that this appeal has been lodged.
At the hearing of this appeal, learned Counsel appearingfor the petitioner-appellant contended that learned District Judgehad erred in law in holding-
la) that the affidavit of verification has to be served on the
(b) that the said affidavit has not been duly stamped.
The procedure relating to winding up applications are setout in the Companies Winding up Rules 1939 SubsidiaryLegislation Vol. II. Rule 9 thereof states that verifying affidavitshould be filed within 4 days after the petition is presented.Rule 8 which requires the petition to be served on the companymakes no provision for the service of verifying affidavit on thecompany. Therefore, there is no requirement that verifyingaffidavit should be served on the 1st respondent-respondentcompany.
It is to be observed that the fiscal has made explicit referencein his report to the serving of petition and documents XI-XI2on the 1st respondent-respondent company.
The Companies Act and the Rules framed thereunder makeno reference to the requirement of stamping of affidavits filed inwinding up proceedings. Nevertheless, Section 71 of the StampDuty Act No. 43 of 1982 (as amended) in its interpretation ofdocuments includes affidavits as chargeable with stamp dutyin legal proceedings. Rules framed under Stamps Duty Act werepublished in Gazette Extraordinary of the Democratic SocialistRepublic of Sri Lanka bearing No. 224/3 dated 20. 12. 1982. Itis to be observed that item No. 2 thereof states that affidavit oraffirmation not otherwise provided for in part 11 of the Scheduleshould bear a stamp of Rs. 1/-.
Sri Lanka Lain Reports
12001) 3 Sri L.R.
Item No. 2 of part 11 of the aforesaid schedule providesthat documents filed in civil proceedings in District Court shallcontain for every Rs. 1000/- or part thereof stamps to the valueof Rs. 3/- subject to a maximum duty of Rs. 1000/= on eachdocument chargeable with duty. In the circumstances, there isno requirement to affix Rs. l/= stamp on the verifying affidavit,when it contains a 'class’ stamp. It is to be noted that the verifyingaffidavit in this case contains a 'class' stamp of Rs. 50/=.
In the circumstances, it seems to me that the learned DistrictJudge has erred in dismissing the winding up application ofthe petitioner- appellant.
Therefore, the order of the District Judge dated 06. 10. 1992is set aside and this appeal is allowed with costs.
DISSANAYAKE, J. – I agree.
KOTALAWELA v. LANKA TYRELANDS COMPANY (PVT) LTD AND OTHERS