022-SLLR-SLLR-1996-V-2-APPUHAMY-v.-FONSEKA-AND-ANOTHER.pdf
APPUHAMY
V.
FONSEKA AND ANOTHER
COURT OF APPEALGUNASEKARA, J.
ISMAIL, J.
A. 246/96.
C. NEGOMBO 3397/L.
Civil Procedure Code -S.761 and S.763 – Writ pending appeal – Substantialloss – appealable Time – "forthwith’
Plaintiffs-Respondents instituted action seeking a declaration that theywere entitled to the premises in question. The case proceeded to trial andjudgment was entered on 23.4.1990 against the Defendant – Petitioner.The Defendant – Petitioner appealed against the said judgment. Duringthe pendency of the appeal 2nd Plaintiff-Respondent died on 15.8.91; andthe 1st Plaintiff has been substituted as the legal representative of thedeceased 2nd Plaintiff. On 23.3.95, after a lapse of nearly 3 years of thedecree the Plaintiff-Respondent applied for execution of writ pendingappeal under S.761. After inquiry, on 4.4.1996 the Learned District Judgeallowed the Writ of Execution pending appeal.
The Defendant-Petitioner contends that –
The application for writ pending appeal should have been rejected forthe reason that it had not been filed forthwith.
If the judgment debtor at a writ pending inquiry establishes thatsubstantial loss would be caused, Court should not allow the aplicationfor writ.
Held:
(1) If a judgment and decree is entered on the first day of a month, ordinarilyan application for Execution of the Decree shall not be entertained untilafter the expiry of the 14th day of that month, but however if an appeal ispreferred against the said judgment on the second day of the same monththe proviso to S.761 entities a judgment-creditor to make an application forthe execution of decree pending appeal on the third day of the same monthwithout waiting till the expiry of the 14th day.
A right is given to a judgment creditor to apply for writ at any time, after anappeal is preferred, up to the time of the hearing of the appeal.
(2) The question as to whether substantial loss would be caused to ajudgment debtor in the event of writ pending appeal if allowed, is a questionof fact to be determined having regard to the circumstances of each case.Substantial loss to one may not be substantial loss to another dependingon the facts and circumstances of each case. On a consideration of theorder sought to be impugned the learned District Judge had failed toconsider the evidence in finding that no substantial loss had been causedto the Defendant-Petitioner. The only reference to the question of loss inthe order is not a reference to the question of substantial loss but to areference to considerable loss.
The burden to satisfy the Court that substantial loss would be caused ison the debtor. In the instant case the judgment debtor had discharged thisburden on a preponderance of Evidence led on his behalf which the learnedDistrict Judge had failed ta consider in the correct perspective.
v
The failure of the Defendant-Petitioner who was old and feeble to havepersonally testified in regard to the question of he would suffer in the eventof writ being issued cannot be held against him. He had established thisposition by calling his son who is a partner.
APPLICATION in Revision from the order of the learned District Judge ofNegombo.
Cases referred to:
Fernando v. Nikulas Appuhamy 22 NLR 1.
Gunasekera v. Arasakularatne 26 NLR 67.
Rex v. Fareed 29 NLR 206.
Brooke Bond (Ceylon) Ltd., v. Gunasekara 1990 – 1 SLR 71 at 83.
A. J. S. Perera v. Gunawardane -1993 2 SLR 27.
Miss. Maureen Seneviratne P.C. with Hilton Seneviratne for the Defendant-Petitioner
Mr. N.R.M. Daluwatta P.C. with Champaka Ladduwahetty for the Plaintiff-Respondent.
Order – 26.6.96
We have considered the submissions made by the learned Counsel, thecontents of the petition and affidavits, the statement of objections and the
authorities cited and are of the view that the learned District Judge erredwhen she in her Order dated 04.4.1996 held that the Defendant •Respondent Petitioner had failed to establish that substantial loss wouldbe caused in the event of writ pending appeal was issued.
On the facts and circumstances of this case we are of the view that theDefendant-Petitioner has established on cogent and uncontradictoryevidence that substantial loss would be caused to him in the event writpending appeal was issued. Therefore we set aside the Order of thelearned District Judge dated 04.4.1996. In view of the additional pleadingsfiled by the Defendant-Petitioner disclosing that the Defendant-Petitionerhad been ejected upon execution of the writ we direct that the Defendant-Petitioner be restored to possession in the premises in question forthwithupon the Defendant-Petitioner depositing a sum of Rs. 100,000/- in cash.The Plaintiffs-Respondents are not to hinder the Defendant-Petitioner beingrestored to possession of the premises in question either directly orindirectly. The Defendant-Petitioner will have to bear the costs involved inthe restoration of possession.The Defendant-Petitioner is not to erect anynew buildings in the pemises in question under the guise of restoration ofpossession but is permitted to effect necessary repairs if any to the threebuildings occupied by him before he was ejected.
A Certified copy of this Order is to be forwarded to the learned DistrictJudge of Negombo and certified copies of the same may be issued to theparties on the payment of usual fees.
The reasons for this Order would be pronounced on 03.7.1996.
Cur. adv. vult.
July 15, 1996.
GUNASEKERA, J.
This is an application in Revision filed against the Order of thelearned District Judge of Negombo dated 04.04.1996 by which Orderwrit of execution pending appeal as prayed for by the Plaintiff-Petitionerwas issued on the Plaintiff-Petitioner depositing a sum of Rs. 10,000/- as security to the credit of this case.
The facts relating to this application are as follows:
The Plaintiffs-Respondents instituted action No. 3397/L in theDistrict Court of Negombo against the Defendant-Petitioner for a
declaration that they were entitled to the premises described in theschedule to the plaint and for the ejectment of the Petitioner and allthose holding under the Petitioner. The Petitioner filed answer denyingthe Plaintiff-Respondent’s right to ask ejectment and moved that theRespondent’s action be dismissed and/or in the alternative that theDefendant-Petitioner be awarded a sum of Rs. 95,765/- for improvementseffected by the Defendant-Petitioner and for a jus retentionis until thesaid sum is paid in full.The case proceeded to trial and at the conclusionof the trial judgement was entered against the Defendant-Petitioner on23.4.1990. At the time the judgement was entered the Plaintiffs wereJ. Maureen Rita Fonseka and K.Nicholas Flamidian Fonseka. TheDefendant-Petitioner appealed against the said judgement within theappealable period and the said appeal is numbered CA54/90 F. Duringthe pendency of the appeal the 2nd Plaintiff Flamidian Fonseka diedon 15.8.1991 and the 1st Plaintiff K. Maureen Rita Fonseka has beensubstituted as the Legal representative of the deceased 2nd Plaintiff.On 23.3.1993 after a lapse of nearly 3 years of the decree being enteredthe Plaintiff-Respondent applied to the District Court for execution ofwrit pending appeal in terms of Section 761 of the Civil ProcedureCode.Objections were filed by the Defendant-Respondents to theapplication of the Plaintiff-Petitioner for the execution of the writ pendingappeal. An inquiry was held at which Don Lesley Wanniarachchi a sonof the Defendant-Petitioner and K.S. Ananda Pathirana an officer ofthe Forest Department gave evidence and produced several documentson behalf of the Defendant-Petitioner, whilst the Plaintiff-RespondentMaureen Rita Fonseka gave evidence on her own behalf after which thelearned Disrict Judge made Order on 04.04.1996 allowing the writ ofexecution pending appeal. It is this Order that is being sought to beimpugned in this application.
At the hearing of this application learned President’s Counselappearing for the Defendant-Petitioner contended that the Order of thelearned District Judge dated 04.04.1996 must be set aside on threemain grounds:
(1) Firstly it was submitted by the learned President’s Counselthat the application for writ pending appeal made by the Plaintiff-Respondent should have been rejected for the reason that it had notbeen filed forthwith after the appeal was preferred against the judgementand decree entered in April 1990.
Secondly that when an application for writ pending appeal ismade that if the Judgment debtor establishes that substantial losswould be caused if the writ is executed that the court shall not allowthe application for writ.
Thirdly that the execution of the writ itself is bad in that
that the writ was executed after sun set in violation of Section365 of the Civil Procedure Code
that police powers were used to execute the writ
that the judgment creditor has actually participated in theexecution of the writ
that unauthorised persons had assisted the fiscal in executingthe writ
that the learned trial Judge had made an illegal Order whenshe had made an Order to break open the padlocks after resistanceby the judgment debtor.
In regard to the first submission made by the learned President’sCounsel that the application for writ pending appeal made by thePlaintiff-Respondent should have been rejected for the reason that ithad not been filed forthwith after the appeal was preferred against thejudgment and decree entered in April 1990, it was the contention of thelearned President’s Counsel that the judgment creditor made anapplication nearly three years later and there is no explanation otherthan the statement in paragraph 3 of the petition dated 23rd March1993 that the Plaintiff-Respondent was away from Sri Lanka and hadreturned on 28.2.1992 and there were no valid reasons given as to whythe Plaintiff-Respondent delayed in filing the application for executionof writ pending appeal.
It was submitted that the second Plaintiff died on 15.8.1991approximately after one year and four months after judgment and decreeand there was no explanation as to why he did not make an applicationfor writ within his life time even though the first Plaintiff was abroad.
Learned Counsel for the Defendant-Petitioner contended that the
word “forthwith” has been interpreted to mean “within a reasonable time”in the case of Fernando v. Nikulas Appuham/^ “without any delay thatcan possibly be avoided” Gunasekera v. ArasakularatneP>. “as soonas possible” in Rex v. Fareed<3) and submitted that the delay of nearlythree years in making the application for a writ execution pending appealwas bad.
Whilst we are in agreement with the interpretation given to the. word “forthwith” in the above decisions cited, the question fordetermination in this application is as to whether a judgment creditorshould make an application for execution of writ pending appeal forthwithafter the expiry of the time allowed for preferring an appeal.
Section 761 of the Civil Procedure Code reads as follows:
“No application for execution of an appealable decree shall beinstituted or entertained until after the expiry of the time allowed forappealing therefrom:
Provided, however, that where an appeal is preferred against sucha decree, the judgment creditor may forthwith apply for execution ofsuch decree under the provisions of section 763.
On a reading of section 761, it is clear that an application forexecution of an appealable decree shall not be instituted or entertaineduntil after the expiry of the time allowed for appealing therefrom.Theproviso however enables a judgment creditor to apply for executionbefore the expiry of the appealable period in the event of an appealbeing preferred earlier. In the case of Brooke Bond (Ceylon) Ltd. v.Gunasekera{A) Athukorala, J. with H. A. G. de Silva, J. andBandaranayaka, J. agreeing held that for the purpose of Section 761 ofthe Civil Procedure Code the time allowed for appealing from anappealable decree is 14 days (the time allowed for giving notice ofappeal) and that an appeal is preferred against such a decree upon thelodging of the notice of appeal within 14 days in terms of Section 754(3).
Therefore it is clear that if a judgment and decree is entered on thefirst day of a month, ordinarily an application for execution of the decreeshall not be entertained until after the expiry of the 14th day of thatmonth, but however, if an appeal is preferred against the said judgmentand decree on the second day of the same month the proviso to Section761 of the Civil Procedure Code entitles a judgment creditor to makean application for the execution of decree pending appeal on the thirdday of the same month without waiting till the expiry of 14th day.
Therefore in our view the first submission of the learned counselthat the application of the Plaintiff -Respondent for writ pending appealmade in this case nearly 3 years after judgment and decree was enteredshould have been rejected by the learned District Judge as untenable.In our view a right is given to a judgment creditor to apply for writ at anytime after an appeal is preferred up to the time of the hearing of theappeal.
The next submission of the learned President’s Counsel was thatthe learned District Judge erred in law when she came to a finding thatthe judgment debtor (Defendant-Petitioner) has failed to establish tocourt that substantial loss may result to him unless an order for stay ofexecution is made. In this connection it was submitted by learnedCounsel that the learned District Judge had failed to consider the ob-jections of the Defendant-Petitioner dated 10th August 1993. It wassubmitted by the learned Counsel that in the objections filed and markedG1 that the Defendant-Petitioner stated that due to specialcircumstances existing in this case that grave and irreparable lossand damage would be caused to the Defendant-Petitioner if writ pendingappeal was issued. It was averred that the Defendant-Petitioner wascarrying on a timber business called St.Anthony’s Timber Depot since1950 having obtained the necessary licenses from the relevantauthorities such as Urban Council, the Forest Department and theEnvironmental Authority.The stock in trade in the said business wasworth about Rs.1 million.The Chartered Accountants of the Defendant-Petitioner’s firm namely A. Pathmaperuma & Co. had valued the stocksas at 31.5.93 at Rs. 990,100 in proof of which a certificate marked X12was produced.The Defendant-Petitioner owned a lorry bearing No. 42-4249 and a tractor with trailer which was used in the transportation oftimber to and from their depot.There were about 10 emloyees employedunder the Defendant-Petitioner four of whom were skilled in their tradein manufacturing furniture.The Defendant-Petitioner paid income tax,and business turnover tax in respect of the income derived from thebusiness in proof of which he produced the documents marked X15 -X22 and X23 – X30, further that the Defendant-Petitioner searched foran alternative space to relocate his business after the judgment waspronounced but was unable to secure a suitable place.The Defendant-Petitioner had also installed machinery worth Rs. 300,000 which wereused in his trade and constructed three buildings for which he hadobtained a three phase electricity connection and a water supply. Itwas the case of the Defendant-Petitioner that the above matters referredto in the objections of the Defendant-Petitioner was supported by theoral testimony of the Defendant-Petitioner’s son Lesly Wanniarachchiwho was a partner in the business and that of one Mr. Pathirana arepresentative of the Forest Department. It was contended by thelearned Counsel that the Defendant-Petitioner himself could not giveevidence since at the time of the inquiry he was about 80 years old andhad a loss of memory. This evidence was given by the son and wasuncontroverted. The Plaintiff-Respondent herself testified at the inquiryand admitted that the Defendant-Petitioner was carrying on a lucrativeand substantial business at the premises in question and did not inany way controvert the evidence given on behalf of the Defendant-Petitioner that his business would come to a stand still in the eventwrit was issued pending appeal.
Learned President’s Counsel at the hearing of this applicatonsubmitted that the Defendant-Petitioner had by cogent anduncontroverted evidence led on his behalf established beyond reasonabledoubt that substantial loss would be caused to him in the event writpending appeal was issued, and that the learned District Judge hadmisdirected herself on the facts and law in respect of the finding madeby her in the order dated 4.4.1996.
It was contended by the learned Counsel that in issuing the writthat the learned District Judge failed to consider the evidence placedbefore court on behalf of the Defendant-Petitioner that
every effort has been made by him to find suitable alternativeaccommodation but he had failed to obtain same due to thecondition laid down by law in respect of the area in which a timberdepot could be established.
that the timber stored in the premises in suit requires buildingsof certain specifications to keep out rain and sunlight and thatsuch buildings had to be specially constructed and consequentlythe issue of writ would cause substantial loss and damage to thestock in trade which is valued at approximately Rs. 1 million.
that the business established by the Defendant-Petitioner inabout 1950 had earned a reputation and goodwill in the localityyielding substantial income to the Petitioner and if the writ isallowed would bring the business to a stand still and causesubstantial loss to the petitioner.
that the employees whom the Defendant-Petitioner employedwith special skills would seek employment elsewhere and deprivePetitioner of their skill and expertise in the event writ is issuedand the Petitioner deprived of their services.
the Petitioner would be deprived of his sole source of incomeand would cause tremendous and substantial loss to him.
In dealing with the order learned President’s Counsel contendedthat the learned District Judge had accepted the fact that the businessof the Petitioner brings him a substantial income but had erred in holdingthat “the Court cannot conclude that he be permitted to continue hisbusiness in this place further merely because he is carrying on thebusiness satisfactorily."
The question as to whether substantial loss would be caused to ajudgment debtor in the event of writ pending appeal if allowed in ourview is question of fact to be determined having regard to the circum-stances of each case. Substantial loss to one may not be substantialloss to another depending on the facts and circumstances of eachcase. In the instant case we are of the view that sufficient evidence hasbeen placed on behalf of the Defendant-Petitioner which evidence hasnot been controverted to establish that substantial loss would havebeen caused to the Defendant-Petitioner in the event writ was issued.
Mr. Daluwatta P.C. appearing for the Plaintiff-Respondent submittedthat the main question for determination in this application is as towhether the Defendant-Petitioner had placed material before the learnedDistrict Judge to satisfy court that substantial loss would result to himunless an order for stay of execution was made. He contended that thewording of subsection 2 of Section 763 of the Civil Procedure Code asamended by Act No. 53 of 1980 makes it quite clear that the burden ofsatisfying that substantial loss would result to a judgment debtor unlessan order for stay of execution is made is on him. He submitted that inthe instant case the judgment debtor (Defendant-Petitioner) did nothimself give evidence but chose to call one of his sons and arepresentative of the Forest Department. It was contended on behalf ofthe Plaintiff-Respondent that substantial loss does not necessarily relateto the substantial nature of the business carried on by the Defendant-Petitioner. It was his contention that the fact that judgment debtor hasto relocate his business in another place after removal of his machineryand stock in trade in the event of decree being issued may causesome inconvenience to him but that by itself does not cause substantialloss.
He drew attention of court to the evidence of the Plaintiff-Respondentthat the Defendant-Petitioner had owned properties at Puttalam andMunnakkarya close to the place where he was carrying on businessand could have without much difficulty shifted his business to one ofthose properties. It was submitted that although the Defendant-Petitioner’s son in his evidence stated that the Defendant-Petitionerlooked out for an alternative accommodation and made inquiries fromthe customers that came to his establishment to look out for an alternateplace to locate his business, the learned Disrict Judge had not beensatisfied on that evidence that the Defendant-petitioner had dischargedthe burden that substantial loss would be caused to him in the eventwrit was issued. It is in evidence that the Defendant-Petitioner was oleand feeble and had a loss of memory which fact is uncontradicted.Thus in our view the failure of the Defendant-Petitioner to have personallytestified in regard to the question of he would suffer in the event of writbeing issued cannot be held against him. He had established thisposition by calling his son who is a partner in the business and thelearned District Judge in our view, has failed to consider the evidenceled on behalf of the Defendant-Petitioner in its correct perspective. Thuswe are unable to agree with the contention of the learned President’sCounsel for the Plaintiff-Respondent that the Defendant-Petitioner hasfailed to satisfy the District Judge that substantial loss would be causedto him in the event writ pending appeal was issued.
On a consideration of the order sought to be impugned in theseproceedings in our view the learned District Judge had failed to considerthe evidence in finding that, no substantial loss had been caused tothe Defendant-Petitioner. The only reference to the question of loss inthe order which appears at page 7 is not a reference to the question ofsubstantial loss but to a reference to considerable loss. Question ofsubstantial loss has been considered in several cases the last of whichis A.J.S. Perera v. Gunawardena (5) where Mark Fernando, J. withAmerasinghe, J. and Wadugodapitiya, J. held that the burden to satisfythe court that substantial loss would be caused is on the debtor. In theinstant case we are of the view that the judgment debtor had dischargedthis burden on a preponderance of evidence led on his behalf which thelearned District Judge had failed to consider in the correct perspective.
In view of our finding in regard to this submission of the learnedPresident’s Counsel it is not necessary for us to consider the thirdsubmission made on behalf of the Defendant-Petitioner that theexecution of writ is bad for the reasons set out earlier.
Therefore we set aside the order of the District Judge dated 4.4.96and made order dated 26.6.96 allowing this application-petition anddirecting that the Defendant-Petitioner restored to possession of thepremises in question forthwith upon the Defendant-Petitioner depositinga sum of Rs. 100,000 in cash.
We have set out our reasons for the order pronounced on 26.6.1996.Thus the application in revision is allowed and with costs in sum ofRs. 2,500/- in cash.
AMEER ISMAIL, J. -1 agree
Application allowed Defendant-Petitioner restored topossession forthwith upon depositing Rs. 100,000/- in cash.
Note by Ed. Special leave was refused by the Supreme Court inSC. Spl. L 343/96.