Bank of Ceylon v Wamakulasuriya
BANK OF CEYLONv
COURT OF APPEALWIMALACHANDRA, J.
CALA 323/2005DC KEGALLE 16/DRMAY 3, 2007
Debt Recovery (Special Provisions) Act 2 of 1990 amended by 9 of 1994 -S6, S7 – Decree nisi entered -Security ordered to be deposited – Who Shouldbegin? Civil Procedure Code – S 384-S389 – Burden of proof.
The plaintiff filed action in terms of the Debt Recovery (Special Provisions) Actas amended to recover a certain sum. Upon institution of the action, Courtentered decree nisi, when the decree nisi was served the respondent soughtunconditional leave to appear and show cause. After inquiry, Court granted therespondent leave to appear and show cause against the decree nisi upon
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deposit of a sum of Rs. 50,000/-. Thereafter the Court directed the defendantto begin the case.
On leave being soughtHeld:
The Debt Recovery (Special Provisions) Act, is a special Actintroduced by the legislature to expedite the process of recovery ofdebts by lending institutions.
In terms of S6 if the Court grants leave to appear and show causeagainst the decree nisi the procedure to followed is laid down inS7of the Debt Recovery Law".
Per Wimalachandra, J.
“Dicta in the burden of proof in my judgment in Bank of Ceylon v Kaleel – 2004- 1 Sri LR 284 have no application to the circumstances under consideration
in the present applicationthe objections with regard to the question 'who
should begin the case' – is obiter dicta, and my observation in the judgment inthe Bank of Ceylon v Kaleel ought to stand rectified".
APPLICATION for leave to appeal from an order of the District Court ofKegalle
Cases referred to:-
Bank of Ceylon v Kaleel – 2004- 1 Sri LR 284. (Not followed)
Peiris v Chairman VC (Medasiya Patu, Matale) -62 NLR 546 at 547M.K. Muthukumar with Sumith Hewage for the plaintiff-petitioner.
Gamini Perera with S.D Piyadasa for the defendant-respondent.
May 3, 2007.
This is an application for leave to appeal filed by the plaintiff-petitioner (petitioner) from the order of learned Additional DistrictJudge of Kegalle dated 5.8.2005. By that order the learned Judgedirected the plaintiff to begin the case.
Briefly, the facts relevant to this application as stated in thepetition are as follows:
The petitioner is a banking corporation duly established by theBank of Ceylon No. 53 of 1938 (Chapter 397 of the Legislative
CABank of Ceylon v Warnakulasuriya (Wimalachandra, J.)
Enactments). The plaintiff is also a lending institution within themeaning of the Debt Recovery (Special Provisions) Act No.2 of1990 as amended by Act No.9 of 1994. The plaintiff filed action inthe District Court of Kegalle against the defendant-respondent(respondent) in terms of the Debt Recovery (Special Provisions) ActNo.9 of 1994 to Recover a sum of Rs. 395,203.59 and interestthereon from 1.3.2003 Upon institution of the action, the learnedDistrict Judge entered decree ms/against the respondent. When thedecree nisi was served on the respondent, he filed a petition andaffidavit and sought unconditional leave to appear and show causeagainst the decree nisi. The Court fixed the matter for inquiry andwhen it was taken up for inquiry both parties agreed to file writtensubmissions and accordingly, written submissions were filed. Thelearned Additional District Judge by his order on 28.1.2004, grantedthe respondent leave to appear and show cause against the decreenisi upon deposit of a sum of Rs. 50,000/=. The respondentdeposited Rs. 50.000/= and the case was fixed for hearing on16.7.2004 on which date the petitioner brought to the notice of theCourt that in terms of section 7 of the Debt Recovery (SpecialProvisions) Act the case should proceed under sections 384 to 389of the Civil Procedure Code. The learned judge, after hearing thesubmission made by the parties made order on 17.8.2004 directingthe defendant to begin the case and fixed the case for hearing on9.11.2004. However, on a subsequent date the counsel for therespondent made submissions on the question as to the party whoshould begin the case. The learned Judge thereafter made order on5.8.2005, that the petitioner should begin the case. It is againstthis order the petitioner has filed this application fOr leave toappeal.
It is to be noted that this is an action instituted under the DebtRecovery (Special Provisions) Act. This Act is a special ActIntroduced by the legislature to expedite the process of recoveringdebt by lending institutions. In terms of section 6 of the Act, if theCourt grants leave to appear and show cause against the decreenisi to a respondent, the procedure to be followed is laid down insection 7 of the Debt Recovery (Special Provisions) Act. Section 7of the Debt Recovery (Special Provisions) Act No. 9 of 1994 statesas follows:
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"If the respondent appears and leave to appear and showcause is given the provisions of section 384, 385, 386,
387, 388, 390, and 391 of the Civil Procedure Code(Chapter 101) shall mutatis mutandis apply to the trial ofthe action".
The learned Counsel for the respondent has placed reliance onthe judgment in Bank of Ceylon v Kaleel and others') I agree withthe submission of the learned counsel for the petitioner that the dictaon burden of proof in my judgment in that case have no applicationto the circumstances under consideration in the present application.In Bank of Ceylon v Kaleel and others, the application for revisionwas refused upholding the preliminary objection that the petitioner inthat application was not entitled to invoke the revisionary jurisdictionof this Court without having recourse to the remedy of leave toappeal. The petitioner in that case had not set out materialamounting to exceptional circumstances. Having refused theapplication on the aforementioned basis, I have made certainobservations on the burden of proof which are applicable to actionsof regular procedure.
Section 7 of the Debt Recovery (Special Provisions) Act No.2of 1990 as amended by Act No. 9 of 1994 read with sections 384,385, 386, 387, 390 and 391 of the Civil Procedure Code provides forthe procedure after the grant of leave to appear and show causeagainst the decree nisi. Section 384 of the Civil Procedure Codespells out the manner and the sequence in which the respondentmay make his objections and adduce evidence, and section 385 ofthe Civil Procedure Code provides for the petitioner to reply, so thatthere cannot arise any dispute on the burden of proof. It is only inthe event of the court acting under section 386 of the CivilProcedure Code and, in its discretion, framing issues andadjourning the matter for trial that the rules prescribed in the CivilProcedure Code for the taking of evidence at the trial of a regularaction, as nearly as may be become applicable.
In Bank of Ceylon v Kaleel & Others (supra), after refusing theapplication in revision, I have made certain observations with regardto the question who should begin the case, This observation is obiterdicta: though the decision in dismissing the revision application was
Bank of Ceylon v Warnakulasuriya (Wimalachandra, J.)
correct, on the facts and circumstances of that case, the saidobservations I made in the aforesaid case of Bank of Ceylon vKaleel and Others (supra), were incorrect. It is apt to refer to thefollowing expression made by H.N.G. Fernando, J. (later C.J) in thecase of Peiris v Chairman V.C. (Medasiya Pattu, Matalep) at 547,"While it is disappointing to realize that my judgment was erroneous.
I welcome the opportunity now given me to employ the language of 90Baron Bramwell in a similar situation: The matter does not appear tome now as it appears to have appeared to me before."
Accordingly, my observations in the judgment in the Bank ofCeylon v Kaleel and Others (supra) ought to stand rectified.
For these reasons, leave to appeal is granted against the orderof the learned Additional District Judge of Kegalle dated 5.8.2005and I allow the appeal and set aside the aforesaid order. Thelearned Additional District judge is directed to conduct theproceeding in terms of section 7 of the Debt Recovery (SpecialProvisions) Act No. 2 of 1990 as amended by Act No. 9 of 1994 read 100with sections 384, 385, 386, 387, 388, 390 and 391 of the CivilProcedure Code.
BASNAYAKE, J. – I agree.
BANK OF CEYLON v. WARNAKULASURIYA