043-SLLR-SLLR-2002-V-2-DAINTEE-LTD-v.-WILLIAM-AND-OTHERS.pdf
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Daintee Ltd. v. William and Others
315
DAINTEE LTD
v.WILLIAM AND OTHERS
COURT OF APPEALUDALAGAMA, J. ANDNANAYAKKARA, J. .
CALA NO. 338/2000
DC COLOMBO NO. 5171/Spl
MAY 18, 2001
JUNE 26, 2001
JULY 12, 2001
Winding up proceedings – Companies Act s. 278 (6) — Intervention – Seekingdeclaratory relief – Application dismissed – Is the Order a final Order? – CivilProcedure Code s. 754 (1), 754 (2), 759 (3) – SC Rules – Certified copies notfiled – Fatal.
The intervenient petitioner-petitioner intervening in a winding up proceedingsinstituted by the petitioners-respondents-respondents against the respondent-respondent-respondent claimed a declaratory judgment and interim relief by wayof restraining orders against the added respondents.
Interim relief was granted but after inquiry the application was dismissed. On leavebeing sought the respondents raised 3 preliminary objections, viz :
The order complained of is a final order, therefore, the petitioner oughtto have preferred a final appeal;
(if) Failure to comply with SC Rules;
(iii) That the petitioner has sought ‘Special Leave to Appeal’ and not leaveto appeal.
Held:
(1) The intervenient petitioner in the present case claimed certain reliefs unders. 278 (b) of the Companies Act against the liquidators and the 3rd addedrespondent. The interim relief that the intervenient petitioner obtained, waslater withdrawn and his entire application in respect of all the other claimswere dismissed by Court.
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Although the intervenient petitioner states that the impugned order isincidental or subordinate to the main cause of action, an analysis of thefactual position confirm, it has finally disposed of the rights of the intervenientpetitioner and the 1st, 2nd and 3rd added respondents and has not leftthem to be determined by Court in the ordinary way and there is finalityin relation to the suit, further after the impugned order there is no livesuit in which the rights of the intervenient petitioner and the 1, 2, 3 addedrespondents have still to be delivered. It is a final order.
The failure to file certified copies of the necessary documents is fatal tothe application.
The respondents are fully aware what the intervenient petitioner has askedfor in the application as the caption of the petition and the affidavit clearlyand unambiguously indicate that the application is for leave to appeal, ifthe Court is to uphold such an overly technical objection, the whole judicialprocess would be reduced to an absurdity.
APPLICATION for leave to appeal from the order of the District Court of Colombo.
Cases referred to :
1.
2.
3.
4.
5.
6.
7.
9.
10.
11.
12.
Siriwardene v. Air Ceylon Ltd.
Salaman v. Warner and Others – (1891) 1 QB 734 (CA).
Bozson v. Altrincham Urban District Council – (1903) 1 KB 547 (CA).Issac and Sons v. Saibeteen – (1916) 2 KB 139.
Abdul Rahman and Others v. Cassim & Sons – (1933) AIR.Ramchand Mangimal v. Goverdhand Vishandas Ratashand and Others- 1920 AIR.
Settlement Officer v. Vander Poorten – (1942) 43 NLR 436.
Fernando v. Chittambaran Chettiar – (1949) 49 NLR 217.
Usoof v. The National Bank of India Ltd. – (1958) 60 NLR 381.
M. M. Imamdeen v. People’s Bank – CALA No. 150/97.
V. M. S. Wijesinghe and Another v. Metalix Engineering Co., Ltd. -CALA No. 173/99.
Caderamanpulle v. Ceylon Paper Seeds Ltd. – (Case No. 1) 2001 -3 SriLR 1.
B. Ahamed with M. Adamally for intervenient petitioner.
Nihal Fernando with Rajinika Jayasinghe for 1st and 2nd added respondents.N. R. Sivendran for 3rd added respondent-respondent.
Cur. adv. vult.
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Daintee Ltd. v. William and Others (Nanayakkara, J.)
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October 04, 2001NANAYAKKARA, J.
The intervenient petitioner-petitioner (Daintee Ltd. hereinafter referred ito as the intervenient petitioner) which is a duly incorporated Companyunder the Companies Act, intervening in a winding up proceedinginstituted in the District Court of Colombo by the petitioner-respondents-respondents, against the respondent-respondent-respondent(respondent) which is also a Company duly incorporated under theCompanies Act, claimed a declaratory judgment and interim reliefsby way of restraining orders against the added respondents-respondents,(liquidators and Kingsway Food Product (Pvt) Ltd.)
Thereafter, on an ex parte application made on 05. 04. 2000 10intervenient-petitioner obtained, inter alia, an interim order restrainingthe 1st and 2nd respondents from disposing of a plant used in themanufacture of toffees, accepting any payment of money in respectof the sale of the said plant from any other person other than theintervenient petitioner, and certain other relief.
On objections being lodged by the 1st, 2nd and 3rd respondentsto the grant of restraining order, the Court having held an inquiry intothe matter on the basis of written submissions tendered by parties,made an order on 27. 10. 2000, dismissing the application of theintervenient petitioner. It is against that order that the intervenient 20petitioner has come by way of leave, seeking the relief claimed inthis petition.
When this matter was taken up for hearing on the 23rd of January,and 18th of May, 2001, Counsel for the 3rd added respondent taking3 preliminary objections in regard to the maintainability of this applicationmoved that the intervenient petitioner’s application be dismissedin limine.
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The three objections raised were briefly as follows :
The intervenient petitioner is not entitled to invoke the jurisdiction
of the Court by way of leave to appeal, as the order sought to be 30canvassed in these proceedings is a final order disposing the applicationof the intervenient petitioner in the District Court and as such theintervenient petitioner should have preferred a final appeal in lieuof leave to appeal.
The intervenient petitioner has failed to comply with themandatory requirements of the provisions of the Supreme Court Rulesin preferring this application to this Court.
That the matters urged, particularly in para 9 of the petition,are grounds for Special Leave to appeal and not for leave to appeal.
Before I deal with the question of validity of the objections raised, <oI wish to make a brief reference to the argument advanced by therespective Counsel representing the parties in respect of preliminaryobjections taken at the commencement of the hearing.
Counsel for the 3rd added respondent developing his argumenton the question of finality of the order against which the intervenientpetitioner has sought relief, by this application, said as far as theintervenient petitioner’s application to the District Court is concerned,the intervenient petitioner’s application has been finally and fullyadjudicated upon and determined by the learned District Judge andthat the order made in respect of the intervenient petitioner’s application 50reached a final stage when the impugned order was issued and thesaid order is not of an interlocutory nature.
The fact that the intervenient petitioner has also preferred a noticeof appeal, the copy of which had been served on the registeredAttorney of the 3rd added respondent, is indicative of the fact thatthe intervenient petitioner has now realized that the impugned order
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Daintee Ltd. v. William and Others (Nanayakkara, J.)
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is a final order, and it is not of interlocutory nature. Therefore, hisapplication for leave to appeal is misconceived and cannot bemaintained.
Counsel further submitted, the fact that the final appeal that has 60been preferred has been suppressed from Court in the petition andthe intervenient petitioner cannot blow hot and cold at the same timeby making a leave to appeal application and also preferring a finalappeal. In respect of this preliminary objection, Counsel for the 1stand 2nd added respondents also advanced argument on the samelines.
Responding to this argument, the Counsel for the intervenientpetitioner contended that the intervenient petitioner was not originallya party to the winding up action but sought to intervene only afterthe order for winding up was made, and the liquidators appointed. ?oThe petitioner sought relief from the District Court in terms of section278 (6) of the Companies Act when the 1st and 2nd respondentshave acted unfairly and wrongfully in awarding the 3rd added respondenta tender for the sale of a plant belonging to the Company underliquidation.
The Counsel has also submitted that the cause of action set outin the application to the District Court by the intervenient petitioneris not same as the cause of action set out in the principal case. Theprincipal case was instituted for one purpose and the intervenientpetitioner’s application was another purpose. The intervenient petitioner’s 80application resulted from a wrong done by the liquidators in the courseof winding up of the Company. It is the wrongful acts done by theliquidators which prompted the intervenient petitioner to seek relieffrom the District Court. Therefore, the intervenient petitioner’s applicationto the District Court is only a step arising in the course of a pendingcase in Court, and the intervenient petitioner’s relief is no way associatedor connected with the relief claimed in the main case but only incidentalto the main case.
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Counsel further argued that the District Court case No. 5171/Spl.is still not concluded and the process of winding up is not over and 9othe rights of the parties have not been fully determined by Court yet.
In regard to the 2nd objection raised, the Counsel for the addedrespondent submitted, that out of the documents tendered to Courtby the intervenient petitioner, only the impugned order dated 27thOctober, 2000, is certified and the rest are uncertified, thereby theintervenient petitioner has failed to comply with the mandatoryrequirements of the provisions of the Rules of procedure of theSupreme Court. Moreover, the intervenient petitioner has not soughtthe permission of the Court to tender them even at a subsequentdate. Therefore, the Counsel argued, non compliance with the procedural toorequirements of the Rules of procedure is fatal to his application.
Responding to this argument, the Counsel for the intervenientpetitioner submitted thtat the requirements to be observed in makingan application to the Court of Appeal are contained in Rule 3 of theCourt of Appeal (Appellate Procedure) Rules of 1990 and Rule 3 (1)
(a) of the Rules of procedure deals with the manner of preferring anapplication in terms of Article 140 or 141 of the Constitution in mattersinvolving the writ jurisdiction of the Court of Appeal.
The counsel argued that Rule 3 (1) (a) is of a mandatory natureand strict compliance is required, while Rule 3 (1) (b) of the Rules 110deals with the applications made by way of revision or restitutio inintegrum in terms of Article 130 of the Constitution. The proceduralrequiremetns to be complied with are distinctly different from thoserelating to writs. It requires applications to be made in like mannertogether with copies of the relevant proceedings. Therefore, Counselcontended that in regard to the applications made to the Court ofAppeal, two different sets of requirements apply, one in respect ofapplications made under Articles 140 and 141 and one in respect ofapplications made under Article 138 of the Constitution.
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Counsel argued that it would be more appropriate and in keeping 120with the spirit of the Rules, that applications for leave to appeal shouldbe guided by and conformed to Rule 3 (1) (6) and tendering copiesalong with the petition are in conformity with Rule 3 (1) (6) and shouldbe allowed.
Counsel further argued that there is no specific provision madein respect of applications for leave to appeal and in the case of leaveto appeal, such applications are governed by Rule 15 of the Rulesof Procedure which states thus : ‘These rules shall also apply, mutatismutandis, to applications made to the Court under any provision oflaw, other than Articles 138, 140 and 141 of the Constitution, subject 130to any directions as may be given by the Court in any particular case”.
Regarding the 3rd objection raised, Counsel for the 3rd respondentsubmitted as the grounds urged are for special leave, and the intervenientpetitioner has sought only special leave to appeal, this Court has nopower of jurisdiction to entertain or grant leave. Responding to theargument, Counsel for the intervenient petitioner submitted that theappearance of the words “special leave to appeal” in para 9 of thepetition is merely a typographical error and has no significance andthe caption of the petition and affidavit decribe the nature of theapplication as leave to appeal.120
At this stage it is necessary to determine the question of validityof the preliminary objections taken, in the light of the submissions,authorities and relevant law cited at the hearing.
For the purpose of determining the question whether the intervenientpetitioner has the right to invoke the jurisdiction of this Court by wayof leave to appeal or by preferring a final appeal, an analysis ofsections 754 (1) and 754 (2) of the Civil Procedure Code, whichgoverns the institution of final appeal and leave to appeal would benecessary.
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Section 754 (1) provides thus :130
“Any person who shall be dissatisfied with any judgmentpronounced by any original court in any civil action, proceedingor matter to which he is a party may prefer an appeal to the Courtof Appeal against such judgment for any error in fact or in law.”
While section 754 (2) provides :
“Any person who shall be dissatisfied with any order made byany original Court in the course of any civil action, proceeding,or matter to which he is or seeks to be a party, may prefer anappeal to the Court of Appeal against such order for the correctionof any error in fact or in law, with the leave of the Court of Appeal nofirst had and obtained.”
Section 754 (5) which provides a definition of judgment and orderreads thus :
“Notwithstanding anything to the contrary in this Ordinance, for thepurposes of this Chapter –
“judgment” means any judgment or order having the effect ofa final judgment made by any civil court; and
“order” means the final expression of any decision in any civilaction, proceeding or matter which is not a judgment."
A careful examination of the definition of the word “judgment” given 150in the section will disclose, the word judgment encompass not onlyjudgment which finally disposes of the rights of the parties but alsoall those orders made in the course of civil proceedings which havethe effect of a final judgment.
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Daintee Ltd. v. William and Others (Nanayakkara, J.)
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The matter for determination now is whether, the impugned orderagainst which relief has been sought by this application, is a finaljudgment or order which has the effect of a final judgment within themeaning given in the definition to section 754 (5) of the Civil ProcedureCode. In this connection, reasoning adopted in the case of Siriwardenav. Air Ceylon Limited1> by Chief Justice S. Sharvananda, then as a 160Judge of the Supreme Court, on an examination of some importantEnglish, Indian and local cases would serve as a useful guidance inresolving the matter in issue.
Justice Sharvananda after analysing the following English cases,Salaman v. Warner and Others,® Bozson v. Altrincham Urban DistrictCouncil,® Isaacs and Sons v. Salbstein,(4> and the reasoning of thePrivy Council cases in Abdul Rahman and Others v. Cassim andSons,® Ramchand Mangimal v. Goverdhands Vishandas Ratanchandand Others,® which in turn influenced the decisions in SettlementOfficer v. Vander Poorten,® Fernando v. Chittambaram Chettiar,® itoUsoof v. The National Bank of India Ltd.® laid down the followingguidelines which would help in determining whether a particular orderhas the effect of a final judgment which falls into the category ofjudgment under section 754 (5) of the Civil Procedure Code :
It must be an order finally disposing of the rigts of the parties.
The order cannot be treated to be a final order if the suitor action is still left a live suit or action for the purposeof determining the rights and liabilities of the parties in theordinary way.
The finality of the order must be determined in relation to isothe suit.
The mere fact that a cardinal point in the suit has beendecided or even a vital and important issue determined inthe case, is not enough to make an order, a final one.
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Now let us examine the factual position of the present case inthe light of guidelines set out by Justice Sharvananda in the caseof Siriwardena v. Air Ceylon Limited {supra). The intervenient petitionerin the present case claimed certain reliefs under section 278 (6) ofthe Companies Act against the liquidators (1st and 2nd addedrespondents) and the 3rd added respondent. In the first instance, the 190intervenient petitioner on an ex parte application obtained an interimrelief, which was not only subsequently withdrawn, but his entireapplication in respect of all the other claims were dismissed by Courton objection being lodged by the added respondents. The intervenientpetitioner thus, not only lost what he gained initially, but also whathe expected to achieve by his application to the District Court. In thecircumstances, the intervenient petitioner cannot expect the DistrictCourt to take up his claim again. As far as he is concerned, theimpugned order is final and conclusive as it is not canvassed in ahigher forum. It can be safely assumed so far as his rights in the 200District Court case are concerned, his rights against the addedrespondents against whom the intervenient petitioner has claimedrelief have been finally disposed of.
The intervenient petitioner claims, that the relief he has claimedis not in any way associated with or connected to the relief claimedby the petitioner who institued winding up proceedings but incidentalor subordinate to the main case, and that he has not sought interventionin the District Court case in respect of the substantive cause of action.
He also states that the relief claimed by his application is not in anyway associated with the principal cause of action in the main case, 210and the main action in respect of winding up proceedings has notbeen finally disposed of. I
I am not in a position to accept the argument advanced in thisrespect by the intervenient petitioner. Can it be said that the intervenientpetitioner’s application after the impugned order will ever be considered
CADaintee Ltd, v. William and Others (Nanayakkata, J.)325
again by the District Court? Therefore, it can be safely said that finalityis attached to the impugned order whether the intervenient petitionerhas sought relief by this application or not. Although the intervenientpetitioner states that the impugned order is incidental or subordinateto the main cause of action, an analysis of the factual position confirm 220it has finally disposed of the rights of the intervenient petitioner andthe 1st, 2nd and 3rd added respondents, but has not left them tobe determined by Court in the ordinary way and-there is a finalityin relation to the suit. Further, after the impugned order, there is nolive suit in which the rights of the intervenient petitioner and the 1st,
2nd and 3rd added respondents have still to be determined. It shouldalso be mentioned that even assuming the impugned order isincidental or subordinate to the main cause of action, there can bean order which has the effect of final judgment within the meaningof section of the civil proceedings whether the proceedings are between 230the parties to the action or not. Finality can be attached not only tojudgments delivered in terms of section 754 (5) of the Civil Procedure,but also to certain orders delivered in the course of civil proceedingswhich has the effect of final judgment.
Therefore, taking into consideration all the circumstances, I am ofthe view that the said impugned order against which the intervenientpetitioner has sought relief by this application is of a final natureagainst which no leave to appeal should lie. Therefore, the objectionin regard to this issue could succeed.
In regard to the second objection that the mandatory requirement 240of the provisions of the Supreme Court Rules have not been compliedwith, the importance of compliance with the mandatory rules of theSupreme Court has been emphasized in more than one case by thisCourt. In the case of M. M. Imamdeen v. People’s Bank,m JusticeUdalagama adverting to the importance of compliance with the Rulesin preferring an application has said :
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“Perusing the brief we have no alternative but to uphold thisobjection. Except for a certified copy of the order of the learnedDistrict Judge dated 08. 07. 97 the other copies of the necessarydocuments filed are not certified. If certified copies could not have 250been obtained in time it was the bounden duty of the petitionerto mention that fact in his petition and obtain leave of Court totender them subsequently. The petitioner has failed to abide bythis provision.”
Reasoning given in this case has subsequenlty been followed inV. M. S. Wijesinghe & Another v. Metalix Engineering Co., Lfaf.,(,1)Cadiramanpulle v. Ceylon Paper Sacks Ltd{'2) and a host of othercases.
Therefore, I am of the opinion that the intervenient petitioner’sfailure to file the certified copies of the necessary documents other 260than the impugned order is fatal to this application. In this, theintervenient petitioner has not only failed to tender certified copies ofdocuments, but has also failed to adduce convincing explanation asto why he failed to do so or sought permission to submit them later.
The intervenient petitioner’s attempt to make a distinction betweenRules 3 (1) (a) and 3 (1) (b) and show that Rule 3 (1) (a) is ofmandatory nature and the Rule 3 (1) (to) is not of such strict natureis not tenable as the cases decided so far insisted on strict complianceunder both Rules. Therefore, I am in agreement with the submissionof learned Counsel for the respondent when he submits that the 270intervenient petitioner has failed to comply with the mandatoryrequirements of the Rules in preferring this application. Therefore, hissecond objection should also prevail in view of the above-mentionedreasons.
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In regard to the 3rd preliminary objection taken it should be stated,that it is of such high technical nature, and an aggrieved person shouldnot be denied justice on sole basis of such technical irregularities.The respondents who raised objections cannot say that they wereprejudiced or misled in any manner by the use of an additional word“special" in the petition. The respondents are fully aware of what the 280intervenient petitioner has asked for in the application as the captionof the petition and the affidavit clearly and unambiguously indicatethat the intervenient petitioner’s application is for leave to appealagainst an order made the learned District Judge of the Court is touphold such an overly technical objection, it is my view that the wholejudicial process would be reduced to an absurdity. Therefore, I rejectthe 3rd preliminary objection raised by the respondents. Nevertheless,as I have upheld the 1st and 2nd objections of the respondents, thisapplication for leave on that ground alone cannot be maintained andtherefore I dismiss this application. The 1st, 2nd and 3rd respondents 290are entitled to costs fixed at Rs. 5,000 each.
UDALAGAMA, J. – I agree.
Application dismissed.