ATAPATTU AND OTHERS v. PEOPLES BANK AND OTHERS

028-SLLR-SLLR-1997-V-1-ATAPATTU-AND-OTHERS-v.-PEOPLES-BANK-AND-OTHERS.pdf


ATAPATTU AND OTHERS
v.
PEOPLE'S BANK AND OTHERS
SUPREME COURTFERNANDO. J.,
DHEERARATNE, J. ANDWADUGODAPITIYA, J.
S.C. APPEAL NOS. 20/96 AND 76/96C.A. APPLICATIONS NOS. 539 AND 814/94SEPTEMBER 23,1996.
Redemption of Land – Finance Act No, 11 of 1963 as amended by Act No. 33 of1968 and Law No. 16 of 1973 – Substitution of successor for a deceasedapplicant- Section 71 of the Finance Act.
Held:
Upon the death ol an applicant for the acquisition of a land under section 71 ofthe Finance Act No. 11 of 1963 as amended, there can be substitution of a"Specified heir" viz. a person mentioned in Section 71(2)(a) – in the prescribedorder of priority – as well as of a testate heir. Whether the application was dulyconstituted, or whether the Bank ought to exercise its discretion to vest thepremises in favour of the substitute, should not be considered at the stage ofsubstitution but only after a substitute has stepped into the shoes of thedeceased and has acquired the necessary status to present his case.
Quaere, whether a testate heir who is entitled to apply for substitution has apreferent right over the “specified heirs”.
Cases referred to:
Emaliyana Perera v. People’s Bank (1985) 1 Sri L.R. 43 (C.A.), (1987) 1 Sri
R. 181 (S.C.)
Kanagasabapathy v. People's Bank S.C. Appeal No. 124/75 S.C. Minutes 27August 1976.
Wickramasinghe v. Sri Lanka State Trading Corporation (1994) 3 Sri L.R. 41.
Ceylon Estates Staffs Union v. Land Reform Commission (1987) 2 Sri L.R.203,207-8.
Amarajeewa v. University of Colombo (1993) 2 Sri L.R. 327,
Muhandiram v. Salam (1947) 49 N.L.R. 80.
Hevavitharane v. De Silva (1961) 63 N.L.R. 68. 72.
Narasingh Das v. Mangel Dubey (1983) 5 Allahabad 163,172.
Setha v. Weerakoon (1948) 49 N.L.R. 225.
Saravanamuttu v. Solamuttu (1924) 26 N.L.R. 385,390.
Wickremabandu v. Herat (1990) 2 Sri L.R. 348,361.
Shanmugam v. Commissioner for Registration of Indian and PakistaniResidents (1962) 64 N.L.R. 29.33.
Jaiiabdeen v. Danina Umma (1962) 64 N.L.R. 419,422.
Wijewardene v. People's Bank, S.C. Appeal No. 3/80 S.C. Minutes 20 May,1981.
APPEAL from the judgment of the Court of Appeal.
In S.C. Appeal No. 20/96
Walter Perera with Nimal Ranmukhaarachchi for appellants.
Anil Obeysekera, P.C. with Sanjeewa Jayawardena for 1st and 2nd respondentsW, D. Weeraratne for 3rd respondent.
In S.C. Appeal No. 76/96.
P A. D. Samarasekara, P.C. with Jayantha de Almeida Gunaratne and Kirthi SriGunawardene for Appellant.
S.Fernando, S.C. for 1st respondent.Bimal Rajapakse for 2nd respondent.
Cur adv. vult.
December 19,1996.
FERNANDO, J.
An important question of law arises in these appeals: whetherthere is a right to substitution, in the place of a deceased applicant,in proceedings for the redemption of land under section 71 of theFinance Act, No. 11 of 1963, as amended by Act No. 33 of 1968 andLaw No. 16 of 1973.
Section 71 authorises the People’s Bank to acquire the whole orany part of any agricultural, residential or business premises if theconditions specified in subsection (1) are satisfied. Section 71provides further:
"(2) No premises shall be acquired under subsection (1) –
(a) Unless an application in that behalf has been made to theBank by the original owner of such premises or, where suchoriginal owner is dead or is of unsound mind or otherwiseincapable of acting, by the spouse or any descendant of suchperson, or if there is no surviving spouse or descendant of suchperson, by a parent, brother or sister of such person; or…
Unless the Bank is satisfied that the average statutoryincome of the person making the application and of the othermembers of the family of which he is the head, computed underthe provisions of the written law relating to the imposition ofincome tax, for the three years of assessment immediatelypreceding the date on which such application was made by him,does not exceed a sum of ten thousand rupees; or,,,
The question whether any premises which the Bank isauthorised to acquire under this part of this Act should or shouldnot be acquired shall be determined by the Bank and every suchdetermination of the Bank shall be final and conclusive and shallnot be called in question in any court.’’
Section 91 provides:
"Any premises vested in the Bank in consequence of anapplication made to the Bank for the acquisition of such premisesby any person entitled to make such application under thepreceding provisions of this part of this Act may be let by theBank to such person or where such person is dead, to thesurviving spouse, if any, or any descendant of such person uponsuch terms as will enable the person to whom such premises are
let to become the owner thereof after making a certain number ofhalf-yearly payments as rent."
FACTSSC Appeal No. 20/96The material facts are these. In 1972 three persons conditionallytransferred their interests in the land which is the subject-matter ofthe proceedings. On 30.6.83 the transferee conveyed her rights tothe 3rd respondent. One of the transferors had died in the meantime,and her husband {the 1st appellant) and the other two transferorsapplied on 30.6.83 to the People’s Bank, the 1st respondent, for theredemption of that land under section 71. While that application waspending those two transferors also died, and the Attorney-at-law whohad been appearing for the applicants asked that “their heirs” – itdoes not appear from the record whether those heirs were named oridentified in any way – be substituted in their place. He did not claimto be acting on behalf of those heirs. The 3rd respondent objected.On 24.6.92 the 2nd respondent, who was the Bank’s inquiry officer,refused substitution. She reasoned that, although under the law ofsuccession upon the death of a person all his heirs succeeded to hisrights, yet under section 71(2) (a) all the heirs need not apply forredemption: under that section it was enough if one of the heirsspecified therein made the application; and accordingly, thatprovision disclosed no intention that the law of succession shouldapply. Further, in the event of death after an application was filed, thesection itself did not provide for substitution, of any or all the heirs ofa deceased applicant; and since the law of succession wasinapplicable, there was no basis on which substitution could beallowed. In that way the 2nd respondent refused substitution, butwithout giving the heirs or the legal representatives of the deceasedapplicants an opportunity of being heard. Upon substitution beingdisallowed, what was left was only the surviving applicant's claim toan undivided one-third share. The policy of the Bank was not to vestundivided shares; that had been upheld in Emaliyana Perera v.People's Bank and so she therefore recommended to the Board ofDirectors of the Bank that the application be dismissed.
The 1st appellant, together with the 2nd and 3rd appellants(alleging that they were heirs of the two deceased applicants andthat the applicants Attorney-at-law had moved for their substitution)applied to the Court of Appeal for Certiorari to quash the2nd respondent's order and Mandamus to allow substitution. LearnedPresident’s Counsel who then appeared for the Bank tendered writtensubmissions, stressing that the right to apply for redemption ispersonal to an applicant, because section 71(2)(b) refers to hisstatutory income; and also that there was no provision, express orimplied, for substitution. However, in what he termed an "After-thought" to those submissions, he suggested that section 71 gavethe Bank power to acquire property, subject to certain pre-conditions;one was that “an application must be made to the Bank by a personnamed in section 71(2)”; “an application is merely a starter ofacquisition proceedings"; once the application is made, the presenceof the applicant is no longer necessary, because he is not equated toa plaintiff or petitioner; and upon the conclusion of the proceedings,even if the applicant is dead, section 91 enables the Bank to let thevested premises to the surviving spouse or a descendant. Hisconclusion was that the Act sought to introduce a "welfare measure",to remedy a particular mischief, and its purpose would be achieved ifan interpretation was adopted which would permit an application toproceed notwithstanding the death of the applicant.
The Court of appeal held, however, the Bank could only entertainan application made by the original owner or a person specified inthe section; that in Kanagasabapathy v. People's Bank ®, it had beenheld that an application could not be made by a transferee orassignee; that in the absence of any provision enabling substitution,the refusal to substitute was justified. The Court also upheld therejection of the 1st appellant’s application (citing Emaliyana Perera v.People’s Bank) (supra) on the ground that the policy decision not toacquire undivided interests was within jurisdiction, and could not bechallenged because of the ouster clause in section 71(3), read withsection 22 of the Interpretation Ordinance.
SC Appeal 76/96The position in this appeal is somewhat different. The originaltransfer in 1958 was by two persons, mother and son, of anundivided three-fourths share in five lands; thereafter the motherdied; and in 1969 the son applied for the redemption of all five lands.That application was made to the State Mortgage Bank (in terms ofthe Act as it stood then), and was transferred to the People's Bank interms of Law No. 16 of 1973. The proceedings in respect of fourlands resulted in vesting orders, but there was a delay in respect ofthe fifth. The original transferees instituted a partition action in respectof that land; the son died in 1991, leaving a Last Will under which thesole beneficiary was the appellant, his sister’s son; the partitiondecree allotted a one-fourth share to the appellant, and the remainingthree-fourths to the original transferees or their heirs, expresslysubject to the pending application made to the Bank for redemption.The appellant then asked the Bank to re-open that application, butwas told that the matter had been laid by because of certain casespending in the Court of Appeal. Later the Bank informed theappellant that since the partition decree made the three-fourths sharesubject to the pending application for redemption, that applicationcould be proceeded with. But on 9.8.94 the Bank told the appellantthat, following the decision of the Court of Appeal in a similar matter(CA Application No. 927/85, CAM 10.6.94) that substitution cannot beeffected, the Bank had dismissed the application for redemption.
The appellant applied to the Court of Appeal for Certiorari toquash the decision of 9.8.1994 and Mandamus to direct substitution.The Court of Appeal dismissed that application holding that upon thedeath of an applicant, the spouse or descendant could notautomatically be substituted, but must make a further application;and that the appellant being neither the spouse nor a descendant,but only the heir under a Last Will, had no right to make anapplication for redemption under section 71.
Since both appeals involved the interpretation of the sameprovisions, they were heard together.
SubmissionsMr. Waiter Perera and Mr P. A. D. Samarasekera, PC, on behalf ofthe respective appellant submitted that the right to make anapplication for redemption was not purely personal, that section71 (2)(a) recognised that if the transferor had died before making theapplication, certain other persons – namely, the surviving spouse, andfailing a surviving spouse, any descendant, and failing a survivingspouse or descendants, a parent, brother or sister (whom I will refer toas the “specified heirs") – could make that application; and that if thetransferor died after he made the application, one of the “specifiedheirs"could be substituted. If they had the greater right of making theapplication itself, they must necessarily have – so it was argued – thelesser right of being substituted. Mr. Samarasekera went one stepfurther, that a testate heir was also entitled to substitution.
Mr. Sanjeewa Jayawardena, on behalf of the 1st and 2ndrespondents in SC Appeal 20/96 submitted that although thespecified heirs were entitled to make an application for redemption,where the original transferor was already dead, the Legislature hadintentionally refrained from making similar provision in the event ofdeath pendente life. He contended that section 71(2)(c) made thefinancial circumstances of the applicant and the members of hisfamily a condition precedent to the exercise of the jurisdiction to vestthe premises, and that that provision could not be applied to theperson substituted – because it could result in difficulties andanomalies; thus even where that condition was satisfied in relation tothe original (deceased) applicant, it might happen that the substitutewas a wealthy person with an income exceeding the specifiedamount. The Legislature never intended that premises should bevested for the benefit of such persons. He contended also that theCourt of Appeal had no jurisdiction to review orders made inredemption proceedings, because of the ouster clause.
He also submitted that the original transferees had sold theproperty to a bona fide purchaser, that therefore the originalapplication was not properly constituted, and that accordingly therecould be no substitution. We indicated to him, however, that thequestions for determination in appeal related to substitution and thejurisdiction of the Court of Appeal; and not the merits of theapplication for redemption, which would have to be determined bythe Bank only if substitution was allowed, and only after hearing theperson substituted.
Mr. S. Fernando, SC, and Mr. Bimal Rajapakse, for therespondents in SC Appeal 76/96 also contended that in the absenceof any enabling provision in the statute, the presumption is thatsubstitution is not permissible. They also urged that in any eventthere could be no substitution of the appellant, who did not fall intothe class of “specified heirs".
SUBSTITUTIONSection 71 creates a (contingent) right of redemption in favour of atransferor of land. Such a right seriously derogates from thecontractual and proprietary right of the transferee. However, suchstatutory interference with common law rights is by no means unique.Sometimes the law allows one person to enjoy a right in derogation ofthe legal rights of another. Thus a beneficiary under an express orconstructive trust has rights in respect of property vested in anotherbecause the statute considers it equitable. Our Rent laws confer on atenant the right to continue in occupation of the rented premises,despite the termination of the contract of tenancy, and sometimeseven contrary to its terms; and to that right certain of the tenant'sheirs may succeed on his death (see section 36 of the Rent Act).Under the Industrial Disputes Act, a Labour Tribunal is empowered tore-instate an employee in his employment, even though his serviceshad been lawfully terminated by the employer in strict compliancewith the contract of employment and the common law. (I mustmention in passing that although there is no express provision in theIndustrial Disputes Act, permitting substitution upon the death of aparty, the precedents favour substitution: see Wickremesinghe v. SriLanka State Trading Corporation,3), Ceylon Estates Staffs Union v.Land Reform Commission «*, Amarajeewa v. University of Colombo(il.
Section 71 is thus just one more instance in which the Legislature hasempowered a statutory Tribunal create rights in derogation of theexpress terms of a contract and the common law. The decision ofthat Tribunal recognises, or perhaps creates, a statutory, as distinctfrom a contractual, right to a re-transfer (compare the “equity ofredemption" which a mortgagor has in English law despite expresscontrary provision in the mortgage: see Halsbury, Laws of England's,4th ed, vol. 32, para 407).
There is no doubt that the right to make an application forredemption is not "personal" to the original transferor in the sensethat he alone can apply, and that it terminates upon his death:section 71(2) empowers a successor to make an application if he fellwithin the category of the “specified heirs", and thus demonstratesthat at least to that extent it survives. Section 71 therefore manifestsan undeniable legislative intention not to make the right of redemptionpersonal to the transferor. That right is of the same nature as a right toclaim a re-transfer, which has been held not to be personal:Muhandiram v. Salam <*>, Further, the fact that section 91 empowersthe Bank to let (on rent-purchase terms) the vested premises to thesurviving spouse, if any, or a descendant, where the applicant isdead also tends to exclude a legislative intent to make the rightpersonal.
If then section 71(2) is to be interpreted as not permittingsubstitution, the result would be that upon the death of the applicantthe application would abate. However, since that was without anadjudication on the merits, a “specified heir" would be entitled tomake a fresh application; and if that applicant were then to die, yetanother “specified heir" could make a third application; and so on. Inother words, that interpretation would mean that although a “specifiedheir" could not be substituted, yet an indefinite number of furtherapplications could be made by “specified heirs", one after the other. Idoubt whether the Legislature intended that land redemption shouldinvolve such technicality. Since the right to apply is not personal, Iwould hesitate to hold that the right of an applicant, just because hetook an extra step on the road to getting back the land which he had
transferred, suddenly deteriorated in quality, and became exclusivelypersonal to him, rib sooner he made his application, if at all his rightdid change in any way, it only became stronger or greater. In theabsence of express contrary provision therefore, “specified heirs"continue to enjoy at least the same right of succession upon deathafter an application was filed, as they did before it was filed.
What happened in SC Appeal 20/96 illustrates the anomalies thatthe contrary view would perpetuate. Because two applicants died,the 2nd respondent held that the third could not proceed, becausehis application, considered in isolation became one in respect of anundivided interest; thereafter, even if “specified heirs" of the twodeceased applicants made fresh applications, they too would fail forthe same reason. However, if ail three applicants had died, their“specified heirs" could collectively have made a fresh application.And, arguably, If the surviving applicant withdrew his application and •joined the “specified heirs'1 of the other two in making a freshapplication, that too might have been entertained. I do not thinksection 71 was intended to be a minefield through which applicantscould emerge unscathed only through such tactical manoeuvres.
The absence of statutory provision expressly permittingsubstitution has been stressed. But to give undue weight to that is toignore fundamental assumptions which underlie legislation conferringjudicial and administrative remedies: that the Legislature intendedthat disputes should be determined, rather than avoided orpostponed, that they should be decided after hearing both sides,rather than with one side unrepresented and therefore unheard, andthat fair procedures should be respected. In relation to proceduralissues of this kind, in choosing between two interpretations – onewhich would allow the dispute to be heard and determined interpartes, and the other which would either prevent it being decided, orresult. In effect, in a decision being made ex parte – Courts andTribunals must not:
"… act upon the principle that every procedure is to be taken as
prohibited unless it is expressly provided for by the Code, but on
the converse principle that every procedure is to be understood as
permissible till it is shown to be prohibited by the law. As a matterof general principle prohibitions cannot be presumed"(Hewavitharane v. de Silva m; citing Narasingh Das v. MangaIDubeym).
Although those observations were made in reference to the CivilProcedure Code, the principle is one of the fundamentals of fairprocedure which all Tribunals should respect.
There is another aspect of the matter which is crucial toSC Appeal 76/96. Even a right which is purely personal oftenchanges its character after litigation for its enforcement hascommenced: there may then arise a right in respect of the subject-matter of the litigation itself, which can, in the event of the death of aparty, devolve on his legal representative. An example from the law ofdelict is illustrative:
"Although the Aquilian action passes to the executor, it is to benoted that he can recover only for actual loss suffered by theestate. In an action for personal injuries, therefore, although hecan claim for the deceased’s medical and hospital expenses, hehas no claim in respect of the pain and suffering caused to thedeceased by his injuries. And if the deceased dies from hisinjuries, although he can claim for the deceased's funeralexpenses as well as for his medical and hospital expenses, hehas no claim in respect of future loss to the estate by reason ofthe death.,.
It should be observed that the above mentioned rules aresubject to the qualification that there has not been litiscontestatio before the death. For the effect of litis contestatio,which in the modern law is deemed to take place at the momentthe pleadings are closed, is to freeze the plaintiff’s rights as atthat moment, and thus, in the event of his dying before the actionis heard, to confer upon his executor all the rights which hehimself would have had if he had lived." (McKerron, Law ofDelict, 6th ed, p.132)
As for when litis contestatio takes place in our law, see Setha v.Weerakoort(9). In the law of contract, Weeramantry (Law of Contracts,vol. 2, p,871) observes:
“In certain limited classes of contracts death brings about atermination of contractual rights by operation of law. These arecontracts involving rights and duties of a purely personal character… in all other cases, all contractual rights and duties pass upondeath to the representative of the deceased person, and theobligation is therefore not extinguished, but survives in favour of oragainst the representative of the estate of the deceased."
The subject-matter of the litigation, the res litigiosa, is evencapable of being ceded or assigned (Lee, Roman-Dutch Law, 5th ed,p. 238; Saravanamuttu v. Solamuttu'0'1).
As I have noted earlier, under the Industrial Disputes Act toosubstitution is possible.
In that background, it cannot be said that the rights which adeceased applicant had in respect of pending redemptionproceedings were not capable of devolving upon his legalrepresentatives.
section 91, to an heir who did not satisfy that condition. Further, thatanomaly cannot be taken in isolation: the converse case must also beconsidered. If a desperately poor transferor, the sole breadwinner ofa family consisting of an invalid spouse and several minor children,dies after application was filed, was it the legislative intent that hisfamily, now benefit of its sole support, be denied the benefits ofredemption? Why should an interpretation be adopted which woulddeny both the undeserving and the deserving? Of course, in the lattercase it can be urged that an heir could make a fresh application. Butthat would not be possible if prescriptive period of ten years (section71(2) (aa)) had elapsed. In these circumstances, I do not think thatfundamental principles which make substitution just and equitableshould give way to the possibility of such anomalies, particularlybecause there is another factor which reconciles all these conflictingconsiderations – which is consistent with the fundamental principlesinvolved, whilst advancing the remedy and suppressing the mischief,and dispensing with the need for successive applications. Section 71does not compel the Bank to acquire premises simply because thepre-conditions in subsection (2) are satisfied, and the fact that theBank has a discretion has been recognised in Emaliyana Perera v.Peopled Bank, (supra) One matter which the Bank may legitimatelytake into account is the relative financial position of the parties: thus ifduring the pendency of the proceedings, a destitute applicantbecomes wealthy, and a once-affluent transferee becomes poor, theBank may – having regard to the purpose of the statute – decline tovest the premises, thus excluding redemption for the benefit of the"Undeserving*. That same discretion will apply to a substitutedapplicant (see also section 71(2)(e)).
any opinion as to whether the 2nd and 3rd appellants in SC Appeal20/96 and the appellant in SC Appeal 76/96, are the proper personsto be susbtituted, because that is a matter to be determined afternotice to all those who may have the right to succeed to the interestsof the deceased. All that I do decide is that the Bank and the Court ofAppeal erred in law in holding that there could not be substitution of‘specified heirs' and testate heirs.
OUSTER CLAUSESince section 71 (3) enacts that every determination of the Bankshall be final and conclusive and shall not be called in question inany court, it was contended that the effect of section 22 of theInterpretation Ordinance, as amended by Act No. 18 of 1972, wasthat a decision by the Bank refusing substitution could not bereviewed by the Court of Appeal in the exercise of its writ jurisdictionunder Article 140,
There is an apparent conflict between the ouster clause (which ispre-Constitution legislation), and Article 140. While generally aConstitutional provision,being the higher norm, must prevail overstatutory provision, there are some constitutional provisions whichenable pre-Constitution written law to continue to apply. The first isArticle 16(1), which is inapplicable here, because that deals only withinconsistency with fundamental rights. The second is Article 168(1),which provides:
'Unless Parliament otherwise provides, all laws, written laws andunwritten laws, in force immediately before the Constitution, shall,mutatls mutandis, and except as otherwise expressly providedin the Constitution, continue in force."
However, this would make the ouster clause operative only “exceptas otherwise expressly provided" in Article 140. The meaning of thatphrase was considered by a bench of five Judges inWickremabandu v. Herath <1, in relation to a similar question, whetherthe ouster clause in section 8 of the Public Security Ordinance
derogated from the Jurisdiction of this Court under Article 17 and126. H. A. G. de Silva, J, and I held that the conferment of jurisdictionof this Court by those Articles was express contrary provision, withthe result that Article 168(1) did not make the ouster clause operativevis-a-vis the fundamental rights jurisdiction. The Privy Council held inShanmugam v. Commissioner for Registration of Indian and PakistaniResidents v2 that
“to be express provision with regard to something it is notnecessary that that thing should be specially mentioned; it issufficient that it is directly covered by the language howeverbroad the language may be which covers it so long as theapplicability arises directly from the language used and not byinference from it”
Articles 17 and 126 constitute “express provision", because theydirectly confer jurisdiction; although they make no specific mention ofthe ouster clause in section 8, the language used is broad enough toconfer an unfettered jurisdiction. The position is the same in regard toArticle 140: the language used is broad enough to give the Court ofAppeal authority to review, even on grounds excluded by the ousterclause.
But there is one difference between those Articles and Article 140.Article 140 (unlike Article 126) is “subject to the provisions of theConstitution”. Is that enough to reverse the position, so as to makearticle 140 subject to the written laws which Article 168(1) keeps inforce? Apart from any other consideration, if it became necessary todecide which was to prevail – an ouster clause in an ordinary law ora Constitutional provision conferring writ jurisdiction on a SuperiorCourt, "subject to the provisions of the Constitution” – I wouldunhesitatingly hold that the latter prevails, because the presumptionmust always be in favour of a jurisdiction which enhances theprotection of the Rule of Law, and against an ouster clause whichtends to undermine it (see also Jailabdeen v. Danina Umma "3I). Butno such presumption is needed, because it is clear that the phrase"subject to the provisions of the Constitution” was necessary to avoidconflicts between Article 140 and other Constitutional provisions -such as Article 80(3), 120, 124, 125, and 126(3), That phrase refersonly to contrary provisions in the Constitution itself,and does notextend to provisions of other written laws, which are kept alive byArticle 168(1), Where the Constitution contemplated that itsprovisions may be restricted by the provisions of Article 138 which issubject to “any law”.
There is another reason why this particular ouster clause is of noavail in these appeals. It purports to protect from review only adetermination by the Bank whether any premises should or shouldnot be acquired; it does not purport to apply to distinct preliminary orincidental matters, such as the substitution of parties.
UNDIVIDED INTERESTSSince the policy decision of the Bank, upheld in Emaliyana Pererav People's Bank, has been referred to by the Court of Appeal, I mustadd that no policy decision of that kind can be inflexible. As held inWijewardene v. People's Bank ,u cited in Emaliyana Perera v.People's Bank (supra), the power conferred on the Bank, by section71(1), to acquire property includes the power to acquire undividedinterests. While it is true that practical difficulties may often justify adecision not to acquire undivided interests, that policy cannot beapplied when there are no such difficulties. Thus the Bank may bejustified in refusing to vest an undivided half-share, where the otherhalf-share remains vested in the original transferee, because of thepractical difficulty of giving possession. But that same justificationwould not exist where the balance share is vested in, say, theapplicant for redemption himself, or a member of his family; or whereduring the pendency of the redemption proceedings a partitiondecree transforms the undivided share of the original transferee, towhich the application relates, into a divided lot, so what the Bank isasked to vest is no longer an undivided share. In the circumstances,the dismissal (in SC Appeal 20/96) of the 1st Appellant's applicationwas wrong in law,
CONCLUSIONI therefore set aside the judgment of the Court of Appeal in bothappeals, and quash the orders dated 24.6.92 and 9.8.94 made bythe Bank, and its inquiring officer, refusing substitution anddismissing the application for redemption. However I do not directthe Bank to effect substitution for the respective applicants, but onlyto consider the applications for substitution giving notice to the‘specified heirs'* of the deceased applicants. Further, in SC Appeal76/96, while holding that the testate heir was entitled to apply forsubstitution, l refrain from expressing any opinion as to whether hehad a preferent right over the “specified heirs", as the latter wereneither noticed nor heard.
In each appeal I direct the Bank to pay appellants sum ofRs. 5,000/- as costs in both Courts.
DHEERARATNE, J. -1 agree.WADUGODAPITIYA, J. -1 agree.
Appeals allowed.