De Soysa v. The Attorney-General.
1941Present: Moseley S.P.J. and Keuneman J.
DE SOYSA et al. v. THE ATTORNEY-GENERAL.
101—D. C. (Inty.) Colombo, 490.
Loan Board Ordinance (Cap. 280), s. 20 (2)—Liability to pay interest—Money
credited to revenue—Common law.
There is no liability either under the Loan Board Ordinance or underthe Common Law to pay interest on a sum of money paid to the PublicRevenue under section 20 (2) of the Ordinance from the .date of suchpayment to a person establishing a claim under the proviso to thatsection. '
The words “ claim, as well the principal money as the interest duethereon ” refer to the money originally on deposit and the interestwhich it has earned under the administration of the Board.
Saffra Vmma v. Attorney-General (2 Cur. Law Rep. 1151, referred to.
MOSELEY S.P.J.—De Soysa v. The Attorney-General.
PPEAL* from an order of the District Judge of Colombo. The factsappear from the judgment.
H. H. Basnayake, C.C., for the appellant.—The case of Saffra Umma v.Attorney-General1 is not an authority for the proposition that interest ispayable by the Crown on a deposit after it has been paid over to theDeputy Financial Secretary’ under section 20 (2) of the Loan BoardOrdinance. The question of interest did not arise for decision in that caseand cannot be regarded as a binding authority (Halsbury’s Laws ofEngland, vol. 19, paragraph 556, and Osborne v. Rowlett (13 C. H. Div. 774).
The Ordinance does not prescribe the interest to be paid by the Crownand it is not liable therefore to pay interest. Interest is payable onlywhere there is an express agreement to pay interest or where an agreementto pay interest can be implied. (23 Halsbury’s Laws of England (Hail-sham ed.), paragraph 254, and Vander Leuwen, vol. 11., p. 61 (Kotez) ).
The words “such claim, as well the principal money as the interestdue thereon ” refers to the amount paid under section 18 (2) to the DeputyFinancial Secretary.
H. V. Perera, K.C. (with him N. M. de Silva), for respondent.—Thecase Saffra Umma v. Attorney-General (supra) is completely in point.There the Supreme Court under similar circumstances allowed interest.The matter must have been considered in that case even though there isno note of it in the argument.
The proper section of the Loan Board Ordinance which applies to this*case is not section 20 but section 22.
The money in this case being the balance of some fidei commissummoney was money in Court over which only the Court had power. Itwas under the orders of Court that money went to the Logn Board.Therefore the Loan Board is accountable to the District Court for allmoneys placed in deposit by the orders of Court.
The rules under the Loan Board Ordinance provide for the payment ofdividends and the respondents are entitled to all the dividends whichhave accrued.
Cur. adv. vult.
February 5, 1941. Moseley S.P.J.—
This appeal arises out of an application regarding certain moneysoriginally deposited in the District Court of Colombo being the proceedsof the sale of certain lands subject to a fidei commissum. The bulk oftthese moneys was devoted to the purchase of other properties and onJuly 31, 1916, there remained a balance of Rs. 1,485.40. This sumappears to have been dealt w^th by the Government Agent according tothe provisions of section 19 of-the Loan Board Ordinance (Cap. 280),that is to say, the same “ advantages and interest ” accrued to it as ifthe money had been under the administration of the Loan Board. Thatstate of things continued until November 24, 1926, by which date themoney, assisted by the dividends allotted by the Loan Board, hadincreased to the sum of Rs. 3;301.65. The Government Agent thenappears to have closed the account, by transferring the money to theLoan Board. The Loan Board account, by an entry five days later, viz.,
1 2 Cur}'Law Rep. US.
350MOSELEY S.P.J.—De Soysa v. The Attorney-General
November 29, 1926, appears to have paid the money to revenue. TheBoard apparently acted in accordance with the provisions of section 20 (2)of the Loan Board Ordinance which is as follows: —
“If any money now or which may hereafter come under the adminis-ration of the Loan Board shall have been in deposit for any period lessthan one-third of a century to the credit of any person or estate, andshall not have been claimed by any person having just and lawful right)thereto for ten years and upwards, or having been claimed such claimshall have been abandoned, withdrawn or not prosecuted within oneyear from the date of claim, or if such claim has been set aside, thenand in every such case (after the expiration of ten years and upwardsaforesaid) every account with such person or estate shall be closed ;and all such money shall, owing to the lapse of time, be paid over bythe Commissioners of the Loan Board to the Deputy Financial Secretaryto be carried to the account of the public revenue, but to be appropri-ated for such purposes cognate to or connected with the administrationof justice as the Governor shall from time to time determine:
Provided, however, that if any person shall within one-third of acentury from the date of such deposit establish a claim to any portionof the said last-mentioned moneys to the satisfaction of a competentCourt of Justice, such claim, as well the principal money as theinterest due thereon, shall be paid by the Government out of thegeneral revenue, which is hereby declared liable to meet all suchclaims. ”
Until February 23, 1940, when the petitioners moved the Court, noclaim had been made in respect of the moneys for nearly twenty-fouryears. On that date the petitioners applied for an order that the sum ofEs. 3,301.65 should be paid out of revenue to the credit of the action,with further interest upon the original sum of Rs. 1,485.48 until date ofpayment. The Court issued notice on the Attorney-General and theCommissioners of the Loan Board calling upon them to show cause whythe application should not be allowed. The case for the petitioners wasthat they had established their claim to the money in accordance with theterms of the proviso to section 20 (2) and that “ the claim, as well theprincipal money as the interest due thereon ” should be paid by theGovernment out of the general revenue.
The learned District Judge held that the amount of interest which the)petitioners was entitled to receive in respect of the original sum ofRs. 1,485.40 was limited by section 21 of the Loan Board Ordinance toan amount equal to that of the principal sum. He therefore held thatthe sum of Rs. 2,970.80 should be paid out of general revenue to thecredit of the action, and that the petitioners should receive interest on)the sum of Rs. 2,970.80 from November 24, 1926, up to the date' ofpayment. For the latter part of this order in regard to interest up to"date of payment he found authority in the case of So.ffra Umma v. TheAttorney-General
The Attorney-General admits that the sum of Rs. 3,301.65 is due tothe petitioners but appeals against the order for payment of further
1 2 Cur. Lac. Rep. 115•
MOSELEY S.P.J.—De Soysa v. The Attorney-General.
interest up to date of payment, on the ground that the Ordinance does notprovide for payment by the Crown of interest on money paid into revenueby the Commissioners under the provisions of section 20 (2) of theOrdinance.
It seems to me that the decision of this appeal turns upon a properinterpretation of the words “ the claim, as well the principal moneyas the interest due thereon ” contained in the proviso to section 20 (2).
In the first place the Loan Board Ordinance does not expressely providefor the payment of interest on money which has been deposited with theBoard or has come under its administration. The references to interestin the proviso to section 20 (2) and in section 19 imply that such moneysshall bear interest. Moreover, section 9 invests the Commissioners withpower to make rules, inter alia “ (c) for determining the rates of intereston loans and deposits; (d) for determining the distribution of interestrealized upon the loans …. ”. In exercise of this power rules
were framed which provided for the rates of interest to be paid on loansin various circumstances. The rules, however, do not provide for thepayment of interest on deposits. In lieu thereof, no doubt rule 24provides for the allotment “ in respect of all sums in deposit on whichinterest is due a dividend on the interest received by the Board duringthe previous half-year ”. The rule proceeds to lay down that “ nointerest or dividend shall be declared on sums under One hundredRupees . . . .”.
Counsel for the appellant argued that, since the Board has not prescribeda rate of interest to be paid on deposits, the petitioners are, strictlyspeaking, entitled only to the amount of the original deposit, viz.,Rs. 1,485140. He referred us to the definition of interest in Halsbui~y’sLaws of England (Hailsham ed.), vol. 23, paragraph 253, which is asfollows :—-
“ Interest, when considered in relation to 'money, denotes the returnor consideration, or compensation for the use or retention by one partyof a sum of money or other property belonging to another, and mayarise from a loan, or investment of money, or as a result of money orproperty belonging to one party being retained or unrepaid by another.”It seems to me, however, that the distribution provided for by rule 24of the Loan Board Rules may well be said to come within this definition.Moreover, the concluding words of the rule embracing the expression“ interest or dividend ” indicate that the Commissioners regarded thewords “ interest ” and “ dividend ” as, in this connection, synonymous.Further, in view of the manner in which the amount of the dividend isarrived at, it would be a simple matter for the Board to express theamount of the dividend in terms of a rate of interest. It appears to me,therefore, that, when the Board declares the half-yearly dividend, it doesin fact determine the rate of interest on deposits.
Now section 20 (2), as has been seen, provides that if any money hasbeen under the administration of the Loan Board for less than one-thirdof a century and has not been claimed for ten years or more the accountdealing with such money shall be closed and that “all such money”shall be paid by the Commissioners into public revenue. The proviso to
MOSELEY S-P.J.—De Soysa v. The Attorney-General.
the sub-section refers to a claim to the “ last-mentioned moneys ” andprovides for the payment of the claim “ as well the principal money asthe interest due thereon The words “ last-mentioned moneys ”Clearly refer to “ all such money ” mentioned in the body of the sub-section, that is to say, the amount which has been paid by the Commis-sioners into revenue, which amount comprises the principal moneyoriginally on deposit and the interest which has accrued to it by way ofdividends while the money has been under the administration of theBoard. When, therefore, in the proviso the Legislature adds to the words“ claim ” the words “ as well the principal money as the interest duethereon ” in my view the last-mentioned words refer back to the principalmoney originally on deposit and the interest which it has earned whileunder the administration of the Board.
Learned Counsel for the petitioners, however, contends that section 20of the Ordinance is inapplicable to this case. He relies on section 22which is as follows: —
“ Nothing herein contained shall be deemed to affect the liability ofthe Loan Board to account to the different Courts for the moneysplaced in deposit by the orders of such Courts, or to conform to andcomply with such orders as it has lieretofo're done.”
It may well be, as argued Counsel for the appellant that this sectionapplies to moneys in deposit in the Loan Board at the commencement ofthe Ordinance, but in any case it seems to me that the section deals withthe liability of the Loan Board to account to a Court which has orderedmoney to be placed in deposit. In this case it is not the Court which isasking the Loan Board to account.
Counsel for the petitioners then relies on the case of Saffra U-mma v.The Attorney-General (supra) in which this Court ordered the payment ofinterest up to the date of payment. The facts of that case, according toWood-Kenton J. brought the case under the provisions of section 20 (2)(then section 18 (2)) of the Ordinance. In that case, however, theapplicant in respect of the money in deposit had on three occasionsestablished her claim to the money, but not until the last occasion didshe take any steps to obtain payment. The Judge at the District Courthad held that she had abandoned her claim, or not prosecuted it withinone year of making it. The judgment of this Court was to the effectthat, when such a claim had been established, an application to withdrawthe money might be made at any time. The only point which appearsto have been argued on appeal, and the only point dealt with either bythe District Judge or by Wood-Renton J. was whether the applicant wasentitled to the money at all. There is not the slightest suggestion thatthe question of interest was touched upon.
Counsel for the respondents referred us to paragraph 556 in 19 Hals-bury’s Laws of England (Hailsham’s ed.) which is as follows: —
“ It may be laid down as a general rule that that part alone of adecision of a Court of law is binding upon Courts of co-ordinate juris-diction and inferior Courts which consists of the enunciation of thereason or principle upon which the question before the Court has reallybeen determined”.
Wanigaratne v. Selohamy.
The learned commentator refers to Osborne v. Rowlett1 in whichJessel MJrt. said that “ the only thing in a Judge’s decision bindingas an authority upon a subsequent Judge is the principle upon whichthe case is decided". In these circumstances I do not, with respect,consider that Saffra Umma v. The Attorney-General (supra) can be viewedas an authority on the liability of the Government in regard to thepayment of interest.
Since I hold the view that there is no provision in the Ordinance whichrequires the Government to pay interest on such moneys after they havepassed into revenue, the only point for consideration is whether there isany such liability at common law. In 23 Halsbury’s Laws of England(Hailsham ed.). paragraph 254, the circumstances in which interest ispayable at common law are set,out. The only conditions which mightconceivably apply to the present case, are (1) where there is expressagreement to pay interest, and (2) where an agreement to pay interestcan be implied from the 'course of dealing between the parties. Neitherof these conditions does in fact apply to the present case.
I would therefore allow the appeal. There is only one further pointfor consideration. The amount which was actually transferred by theLoan Board to revenue is Rs. 3,301.65- That sum is made up by theoriginal amount in deposit, viz., Rs. 1,485.40 and dividends amountingto Rs. 1,816.25. The learned District Judge however held that, bysection 21 of the Ordinance, the amount of interest payable must notexceed the principal, and declared the petitioners entitled to a sum ofRs. 2,970.80 with interest thereon to date of payment. Counsel for theappellant did not seek to take advantage of section 21 in view of the fact- that while the money was with the Loan Board a sum exceeding theprincipal had actually earned.
The order of the District Judge is set aside. The petitioners areentitled to a declaration that a sum of Rs. 3,301.65 be transferred fromgeneral revenue to the credit of the action. The appeal is allowed withcosts. The District Judge’s direction that the petitioners shall find aninvestment for the money within six months, that is to say, six monthsfrom the date of this judgment, failing which the District Court will takesteps to have it done, is affirmed.
Keuneman J.—I agree.Appeal allowed.
DE SOYSA et al. v. THE ATTORNEY-GENERAL