RAJGOPALCOURT OF APPEAL,
A. NO.95/2004 (LG)
C. COLOMBO 36067/MSAUGUST 26, 2004
Civil Procedure Code, sections 705(2) and 706-Summary procedure on liquidclaims – Conditions precedent to issue of summons – Prescription Ordinance,No. 22 of 1871, section 6 – Defence prima facie sustainable—Security
42Sri Lanka Law Reports(2005) 1 Sri L. R.
QfySivapalanthan v. Raj Gopal53
necessary? – Can a claim for unjust enrichment be joined ? —Application forleave to appear and defend – Is a petition necessary ?
The petitioner contended that he' has a valid ground to appear and defendunconditionally as the respondent’s action is prescribed. The District Courtordered the defendant to defend with security.
The petitioner sought leave to appeal against the said order
A condition precedent to the issue of summons is that the documenton which the action is based should not appear to be prescribed ; theplaintiff’s action based on the 2 cheques is clearly prescribed.
It if appears to Court that the plaintiff respondent’s action is barred bysome provision of a statute the defendant petitioner should be allowedto appear and defend without being ordered to furnish security.
In an action under Summary Procedure, a claim for unjust enrichmentis not a liquid claim arising upon the two cheques and is not a propersubject for Summary Procedure.
The Court should have amended the plaint by striking out the claim fordamages based on unjust enrichment and then proceeded to issuesummons.
The manner of making the application is found in section 706 – it onlyspeaks of an affidavit and not petition and affidavit
Cases referred to :
Ramasamy Chetty vs Uduma Lebbe Marikkar – 5 NLR 350
Natchiappa Chetty vs Thambyah – 6 NLR 205
APPLrCATION for leave to appeal from an order of the District Court of Colombowith leave being granted.
M. A. O. M. Ghazzali with M. Somasundaram for defendant respondentV. K. Choksy with M. P. N. N. Swarnakanthi for plaintiff respondents
Cur. adv. vult.
64Sri Lanka Law Reports(2005) 1 Sri L. R.
October 5, 2004WIMALACHANDRA, J.,
The defendant-petitioner filed this leave to appeal application against theorder made by the Additional District Judge of Colombo, dated 20.02.2004.The Court granted leave and the matter was fixed for argument.
The learned counsel for the petitioner urged that the petitioner has avalid ground to appear and defend unconditionally, as the respondent’saction based on the said two cheques has been prescribed. The learnedcounsel further submitted that under Section 705(2) of the Civil ProcedureCode summons should not have been issued in the first instance as theplaintiff-respondent’s action has been prescribed.
Section 705(2) of the Civil Procedure Code states that if the insturmentappears to be properly stamped and not open to suspicion on the face ofit, and not barred by prescription, the Court may order service of summonson the defendant. Therefore a condition precedent to the issue of summonsis that the document on which the action is based does not appear to beprescribed.
The two cheques marked A and C had been executed on 26.05.1997and 20.05.1997 respectively. The plaintiff-respondent filed this action on12.06.2003. The law relating to prescription in Sri Lanka is governed bythe Prescription Ordinance, No. 22 of 1871. In respect of any bill ofexchange, promissory note or cheque, action for recovery shall be filedwithin six years from the date when such promissory note, cheque or billof exchange shall have become due or from the date of the last payment ofinterest thereon (vide-Section 6 of the Prescription Ordinance). In thecircumstances, the plaintiff-respondent’s action based upon the aforesaidtwo cheques is clearly prescribed.
I cannot agree with the submissions made by the learned counsel forthe respondent that the defendant cannot be heard or be allowed to takeany objection as to the prescription before obtaining the leave of Court toappear and defend. If it appears to Court that the plaintiff-respondent’saction is barred by some provisons of a statute, the defendant-petitionershould be allowed to appear and defend without being ordered to furnishsecurity. Morever, in terms of Section 705(2) of the Civil Procedure Code,it is a condition precedent to the issue of summons that the instrumentsued upon should not be barred by prescription.
CASivapalanthan v. Raj Gopal65
In the c.ase of Ramasamy Chetty Vs. Uduma Lebbe Marikkar<'> theSupreme Court held that, where the defence set up by the defendant in anaction on a promissory note appears on the face of his affidavit to be goodin law, and no reasonable doubt exists as to the bona fides of the defence,it is the duty of the District Court to permit him to appear arid defendwithout security.
I now proceed to consider the question as to whether the District Judgeerred in holding that the defendant-petitioner did not raise a valid defencefor the defendant to be allowed to appear and defend the action withoutbeing called upon to furnish any security. Upon a consideration of theshort order made by the learned Judge it is obvious that she has notcarefully considered the validity of the defence. A careful consideration ofthe two cheques, which is the subject matter of this action, reveals thatthe plaintiff’s action is prescribed.
The defendant is entitled to be allowed to appear and defend withoutbeing called upon to furnish security in a case where a prima faciesustainable defence is disclosed. The learned Judge has not consideredat all the defence disclosed by the defendant-petitioner. It is my consideredview that the aforesaid defence in itself, disclosed by the defendant-petitioner, is one prima-facie sustainable, and the defence set up by himappears on the face of the affidavit to be good in law and no reasonabledoubt exists as to the bona fides of the defence. In those circumstancesit is duty of the Court to permit him to appear and defend the action withoutbeing called upon to furnish any security. .
The defendant-petitioner has also joined other claims that do not comeunder the summary procedure. He has claimed Rs. 50,000 from the plaintiff-respondent on the basis that the defendant-petitioner has been unjustlyenriched in a sum of Rs. 50,000 at the expense of the defendant-petitioner,In this action filed under the summary procedure, a claim of unjustenrichment is not a liquid claim arising upon the two cheques and it is nota proper subject for the summary procedure.
This question is not without authority in our Courts. I draw my attentionto the case of.Natchiappa ChettyVs. Tambyaff) where the plaintiff broughtan action on a promissory note payable on demand, claiming principaland interest, and was allowed summons under chapter 53, and thedefendant was given leave to defend on terms. It was held that to include
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the claim for interest was illegal and was not a proper subject for thesummary procedure of chapter 53 of the Civil Procedure Code, and it wasfurther held (at page 207) that the Court ought to have refused to issuespecial summons except on the condition that the claim for interest wasstruck out.
Accordingly in the instant case the Court should have amended theplaint by striking out the claim for damages based on unjust enrichmentand then proceeded to issue special summons under chapter 53 of theCivil Procedure Code.
The learned Counsel for the plaintiff-respondent submitted that thedefendant-petitioner has filed the application for leave to appear and defendonly by filing an affidavit without a petition and as such the defendent-petitioner’s application for leave to appear and to defend the action is badin law. The manner of making the application is found in Section 706 of theCivil Procedure Code, Section 706 states that, upon an application by thedefendant, the Court shall give leave to appear and to defend the actionupon the defendant paying into Court the sum mentioned in the summons,
or upon affidavits satsisfactory to Court, which disclose a defence
or such other facts as the Court may deem sufficient to support the
application and on such terms as to security orotherwise, as the
Court thinks fit.
Thus it is seen that Section 706 speaks only of an affidavit and notpetition and affidavit. In the circumstances, in an action by summaryprocedure on a liquid claim, if he has sworn an affidavit to facts, which ifproved will be a good defence, he should be allowed to defendunconditionally. The Section 706 clearly states that, in an application bythe defendant, the Court must give leave to appear and defend the actionupon the affidavit being satisfactory to the Court on such terms as theCourt thinks fit.
The next submission of the learned counsel for the plaintiff-respondentis that the plaintiff-respondent was convicted in the Magistrate’s Court ofColombo in Case No. 3550/1 for the dishonour of the two cheques. Insupport of his contention he relied on the proceedings dated 14.03.2002 ofthe Magistrate’s Court of Colombo Case No. 3550/1, produced marked B.It is to be noted that the document marked B does not show that the
Vs Raj Gopal (Wimalachandra, J.)
defendent-petitioner was convicted for the dishonour of the aforesaid twocheques, which is the subject matter of this action. In any event thissubmission made by the learned counsel has no relevance to the matterbefore this Court.
It appears that in the impugned order the learned Judge has notconsidered the defence set up by the defendent-petitioner that the plaintiff-respondent’s action is barred by prescription. It is my considered viewthat the defence set up by the defendent-petitioner appears on the face ofhis affidavit and upon a perusal of the aforesaid two cheques to be good inlaw. When the defendent-petitioner has placed before Court a prima-faciesustainable defence, the defendant cannot be required to give security asa condition of being allowed to appear and defend.
For these reasons, I set aside the order made by the learned Judgedated 02.02.2004 and direct the learned Additional District Judge ofColombo to permit the defendant to appear and defend without security.
Appeal allowed; Defendertt permitted to appear and defend withoutsecurity.
SIVAPALANATHAN vs. RAJGOPAL