SJfcLAR. VAJSTANDA, J.—-Wimalasvriya v. Jayaweorasingam
1976Present: Tennekoon, C. J. Weeraratne, J. and*Sharvananda, J.
C. H. WIMALASURIYA, Appellant,and
M. S. JAYAWEERASINGAM and another, Respondents
S.C. 81/71 (F)—D. C. Colombo 1159/Spl.
Debt Conciliation Ordinance—Sections 14, 30, 40, 43, 44—Jurisdictionof District Court to enter hypothecary decree—Exercise of suchjurisdiction.
Waiver—Irregular procedure adopted i?i entering hypothecary
decreeAcquiescene—Validity of such decree—Mortgage Act.
There is a fundamental distinction between the existence ofjurisdiction ana' the exercise of jurisdiction. A challenge to themethod of the exercise of jurisdiction of a court can never, in law,justify a denial of the existence of such jurisdiction. If a courtwhich has general jurisdiction and has in addition local andpersonal jurisdiction, exercises such jurisdiction in an unauthorizedmanner, the wronged party can only take the course prescribedby law for setting matters right, and if that course is not taken,the decision, however wrong, cannot be disturbed.
Case3 referred to :
Sawdoon Umma v. Fernando, 71 N.L.R. 217.
Samarasinghe v. Balasuriya, 69 N.L.R. 205.
Shafeek v. Solomon de SUva, 69 N.L.R. 481.
Kanagasabai v. Velupillai, 54 N.L.R. 241.
V. Arulampalam for the defendant-appellant.
N. S. A. Goonetilleke for the plaintiff-respondent and thepurchaser-respondent.
Cur. adv. vult.
June 25, 1976. Sharvananda, J.
The defendant-appellant executed mortgage bond No. 43 dated18.10.58 in favour of the plaintiff-respondent as security for thepayment of Rs. 1,500 borrowed by him from the plaintiff-respondent. The defendant, as debtor, made an application tothe Debt Conciliation Board under the provisions of section 14 (1)of the Debt Conciliation Ordinance for the settlement of thedebt due from him to the plaintiff. The parties arrived at asettlement before the Board and a settlement was recorded interms of section 30 of the Debt Conciliation Ordinance. Thissettlement required that the defendant should pay and settlethe full sum due to the plaintiff on or before 31.10.64. The defen-dant, however, failed to make the payment in terms of the saidsettlement. It was a term of the settlement that m case ofdefault, the creditor was entitled to all legal rights, including
SHAKY’AN'AN DA, J.—Wimalasuriya v. Jayaweerasingam
the mortgagee’s remedy to sue and recover any sum due on thesettlement. Thus, the settlement conserved the' right of theplaintiff-creditor to seek the remedies available to a mortgagee,and this right included the right to file a suit for a hypothecarydecree. The plaintiff-creditor, thereafter, by his petition dated23.11.65 instituted the present proceedings. Along with hispetition, the plaintiff filed affidavit, mortgage bond and a certi-fied copy of the settlement and prayed that “ as contemplated insection 43 (4) of the Debt Conciliation Ordinance, decree nisibe entered in favour of the petitioner against the respondentfor the surry tof Rs. 2,330 with further interest on Rs. 1,500 at 8per cent per annum from the date hereof till the date of paymentin full The defendant-appellant was cited as respondent to thesaid application. The Court issued decree nisi on the respondent,which was duly served, and, on 29.6.66, as the respondent wasabsent on the said date of inquiry, decree nisi was madeabsolute. On or about 25.7.66, the plaintiff moved the Court tovacate the decree nisi entered and to allow a fresh applicationto be filed embodying the necessary clauses in the prayer to thepetition regarding the sale of the mortgaged property under thedecree. By its order dated 11.8.66, the Court vacated the decreeabsolute already entered and directed the plaintiff to file a freshdecree nisi amend the petition. The plaintiff, thereafter, by hisamended petition dated 27.9.66, amended his prayer to incor-porate a prayer for a hypothecary decree. The Court thereafterentered a fresh decree nisi. Though the fresh decree nisi wasserved on the defendant, he was absent on 5.12.66, the date ofthe inquiry, and hence decree absolute was entered, which was.in terms, a hypothecary decree in favour of the plaintiff for thesale of the property mortgaged on the bond sued upon. Thedefendant did not take any steps to appeal agains^t the saiddecree, nor did he make any complaint against the proceedingsthat eventuated in the said hypothecary decree entered on5.12.66. Thereafter, the plaintiff caused, on 26.2.69, the sale ofthe property in execution of the said hypothecary decree andthe purchaser-respondent purchased the property at the sale.
On 30.9.69. the defendant-appellant moved the District Courtto set aside the hypothecary decree entered in this action on thegrounds:
(a) that the District Court had no power to enter decreenisi, or a hypothecary decree, or to enforce a settle-ment entered under the Debt Conciliation Ordinance ;and
•(b) that the plaintiff-respondent had no legal right to askfor a hypothecary decree, except in terms of the
KTI.VRVA VANDA, .T.—TI~im-nln*>triya v. Jayawecraainyam
Mortgage Act (Chap. 89) and that the hypothecarydectee entered in this case by way of summary proce-dure is of no force or avail in law, and for that reasonthe sale held on 26.2.69 was void.
By his order dated 8.9.70, the learned District Judge dismissedhis application, and the defendant-appellant has now preferredthis appeal against the said dismissal of his application.
The main argument of Counsel for the defendant appellant wasthat, in view of the judgment of the Supreme Court in the caseof Samdoon Umma v. Fernando, 71 N.L.R. 217, the DistrictCourt had, in the premises, no jurisdiction to enter a hypothecarydecree, and since no regular action, as contemplated in theMortgage Act, was instituted by the plaintiff, no hypothecarydecree could have been entered in these proceedings and thatthe Court had no jurisdiction to enter a hypothecary decree onthe plaintiff’s application.
In the case of Sawdoon Umma v. Fernando, the Court expressedthe view that where a debt due on the mortgage of a land hadbecome the Sjubject of a settlement under the Debt ConciliationOrdinance and the settlement contains no provision for the enter-ing of a hypothecary decree, section 43 of the Debt ConciliationOrdinance does not enable the District Court to enter a hypothe-carry decree if the debtor fails to comply with the terms of thesettlement and that a settlement under the Debt ConciliationOrdinance cannot confer judisdiction on a Court, even by expressprovision, to enter a hypothecary decree, otherwise than in anaction instituted in conformity with the special procedureprovided for in the Mortgage Act. The appellant, therefore,submitted that, as the procedure set out in the Mortgage Act wasnot followed by the judgment-creditor in the present case, andalso as no regular mortgage action, as contemplated by theMortgage Act, was instituted, the Court had no jurisdiction toenter a hypothecary decree.
In Samarasinghe v. Balasuriya, 69 N.L.R. 205, the SupremeCourt took the view that where a settlement had been enteredunder the Debt Conciliation Ordinance, the creditor’s right asmortgagee were yet preserved, but the mortgage is deemed tosubsist under the settlement so that the creditor would have tomake an appl' cation in terms of the Debt Conciliation Ordinancefor the entering of a decree. Sansoni C. J. there held thatwhere a debt secured by a mortgage has been settled betweenthe parties in accordance with the provisions of the Debt
SMARVANAN.DA, J.—Wimalasuriya v. Juyauecrasingam
Conciliation Ordinance, the creditor had no right thereafter, inview of the provisions in section 40 (1) of the Ordinance, to sueon the cause of action arising from the mortgage bond and thatif the debtor failed to comply with the terms of the settlement,the creditor’s remedy is to make an application to a competentCourt of jurisdiction and seek execution in terms of sections 43and 44 of the Debt Conciliation Ordinance. The plaintiff hadfollowed, in the present case, the procedure which had receivedthe sanction of the Supreme Court in Samar asinghe v.Balasuriya.
On the facts of the present case, it is not necessary for thisCourt to resolve the conflict between these two judgmentsreported in 69 N.L.R. 205 and 71 N.L.R. 217. For, evenassuming that there is substance in the defendant-appellant’ssubmission, his application and appeal can be disposed of on theground of the defendant-appellant’s waiver, as the defendant-appellant did not seek to show cause against the decree nisi thatwas served on him from being made absolute. The properstage for him to have agitated the question whether ahypothecary decree could have been competently entered againsthim was before the date of entering of the decree absolute. Theappellant had, by his conduct and/or omission, waived anyobjection that could have been taken to the procedure adoptedby the plaintiff in this case.
On the assumption that a hypothecary decree can be enteredonly in an action properly instituted under the provisions of theMortgage Act, it is the District Court of Colombo which, on thefacts of this case, had the general jurisdiction and was alonecompetent to enter a hypothecary decree and grant the reliefclaimed by the plaintiff. In this case, proceedings wereinstituted in the proper Court which had general jurisdiction inthe matter. On the appellant’s submission, the District Court ofColombo, having general jurisdiction, appeared to haveproceeded in an unauthorized manner. The error in theprocedure could have been remedied, but the error did notdeprive the Court of jurisdiction to enter upon the proceedings.Since there was general jurisdiction, lack of objection at theproper stage prevented the appellant from relying upon theirregularity in the proceedings at a late stage. Neither onprinciple, nor on authority can the appellant’s argument thatthe irregularity that he belatedly complained of deprived theCourt of jurisdiction to enter a hypothecary deiree be supported.The decree here in question was voidable only and not void,and the time for avoiding it had long gone by. A challenge to
SHARVANANDA, J.—-Wimalasuriya v. Jayaweerasingam
the method of tfie exercise of jurisdiction of a Court can never,in law, justify a denial of the existence of such jurisdiction. Thedefendant, having acquiesced in or waived the irregularity,cannot complain of it at a later stage. It is a fundamentalprinciple well established, that a decree passed by a Courtwithout jurisdiction is a nullity and that its invalidity could beset up whenever and wherever it is sought to be enforced orrelied upon, even at the stage of execution and even in collateralproceedings. A defect of jurisdiction cannot be cured even bythe consent of parties or by waiver, but there is a fundamentaldistinction between the existence of jurisdiction and the exerciseof jurisdiction. The circumstance that hypothecary jurisdictionof the Court had been exercised in the present case in anirregular manner does not destroy the inherent jurisdiction ofthe Court to grant a hypothecary decree. If the Court hadexercised its jurisdiction in an unauthorized manner, thewronged party can only take the course prescribed by law forsetting matters right, and if that course is not taken, the decision,however wrong, cannot be disturbed. In this case, the Courthad undoubted jurisdiction to be invoked in terms of theprovisions of the Mortgaged Act. The defendant, having hadthe opportunity to contest the regularity of the proceedingsthat consummated in the hypothecary decree entered againsthim and having failed to avail himself of the proper steps tohave the proceedings set aside, cannot now challenge theregularity of the proceedings.
Laws of the procedure are grounded on the principle ofnatural justice which requires that a person should not becondemned unheard, that decisions should not be reached behinda person’s back, that proceedings that affect the rights of a partyshould not be conducted in that person’s absence. Since thedefendant had notice of the proceedings against him, he cannotcomplain of denial or violation of natural justice. Tnere was adeviation from the proper procedure, but the Court hadjurisdiction over the subject, and by the deviation the Court didnot assume the jurisdiction of another tribunal. There was noattempt to give the Coort a jurisdiction which it did not have.If the defendant chose to waive objection to the procedure, hecannot, afterwards, make any complaint. The defendant, in theciicumstances, is debarred from asserting a substantive rightwhich he once possessed, or from raising a particular defencewhich would otherwise have been available to him.
The Court had undoubted jurisdiction to enter a hypothecarydecree. It had, in addition, local and personal jurisdiction in
SHARVANA5TDA, J.—- Wimalaeuriya t>. Jayaweerasingam
terms of the provisions of the Civil Procedure Code. It also hadjurisdiction over the subject matter. It was thus properly seizedof the case. The irregularity of the procedure adopted did notdivest the Court of its inherent jurisdiction and the hypothecarydecree entered by it was not void consequently for want ofjurisdiction. The judgment was, at most, irregular only andvoidable, and since the defendant had failed to complain of itsirregularity at the proper stage, it is not open to the defendantafter the hypothecary sale envisaged by the decree to questionthe validity of the decree. He is bound by the decree and thesale. The appellant took no steps on the decree nisi being servedon him. He is therefore bound by the proceedings and thedecree.
Counsel for the appellant fell back on the fact that theprovisions of section 8 of the Mortgage Act have not beencomplied with. He contended that the failure to comply withthe said provisions divested the Court of jurisdiction to enter ahypothecary decree. In support of his submission, he relied onShafcek v. Solomon de Silva. 69 N.L.R. 481. True, certainexpressions in the judgment lend support to Counsel’s submission.But, Fernando. C.J., in that case, did not have in contemplationthe facts of this case where the mortgagor himself was servedwith notice of the proceedings and hence had ampleopportunity to canvass, at the proper stage, the regularity ofproceedings. As observed by him at nage 488 :The purpose
of section 8 of the Mortgage Act, considered in the context ofthe Act, is to secure that, persons other than the mortgagor willbe bound by the hypothecary decree. That purpose would notbe achieved if the requirement of this section can be waived bythe mortgagor, who is not a person in the category which thissection is designed to reach. And on general principles it seemsclear that the breach of the positive requirement cannot be curedby waiver on the part of a person who is intended to be affectedor protected by the requirement. ” In the scheme of theMortgage Act, section 8 was not designed for the benefit of thedefendant-mortgagor. It is only persons who are intended tohe affected or protected by the requirements of that section thatcan comnlain of non-compliance with the provisions of thatsection. It does not lie in the mouth of the defendant-mortgagor,who was a party to the proceedings and who had notice of thesteps taken in the action, to complain that the plaintiff had, byhis omission to comply with section 8 of the Mortgage Act,obtained a decree that is voidable by persons falling in thecategory of “ persons entitled to notice ” referred to therein.
SHAK AX AXDA, .1.1 yiniulnnuriiio >'■ Juyauterasimuain
(See Kanagasabhai v. Velupillai—54 N.L.R. 241). The decree soobtained is not* null and void, but is binding on the defendantwho was a party to the proceedings. Irregularity of proceduredid not deprive the Court of its general jurisdiction to enter ahypothecary decree in this case.
The defendant, having been in a position to show that theproceedings had against him were not in terms of' the provisionsof the Mortgage Act,, deliberately did not seek to have the decreenisi and/or decree absolute set aside and thereby elected towa.'ve the objection, if any, and he cannot now be allowed toset up that the Court had exercised its jurisdiction to enter ahypothecary decree in an unauthorized way.
The appeal is accordingly dismissed with costs.
Tennekoon, C.J.—I agree.
Weeraratne, J,—I agree.
C. H. WIMALASURIYA, Appellant, and M. S. JAYAWEERASINGHAM and another, Respond