Debt Recovery(Special Provinces)

(1) A lending institution (hereinafter referred to as the “institution ‘) may, subject to the provisions of subsection (2) recover debt due to it by an action instituted in terms of the procedure laid down by this Act in the District Court within the local limits of whose jurisdiction-

(2) No action shall be instituted by an institution in terms of the procedure laid down by this Act, ,for the recovery of any loan, where the principal amount lent or advanced was less than one hundred and; fifty, thousand rupees.

(1) The institution suing shall on presenting the plaint, file with the plaint an affidavit to the effect that the sum claimed is lawfully due to the institution from the defendant, a draft decree nisi, the requisite stamps for the decree nisi and for service thereof and shall in addition, file in court, such number of copies of the plaint, affidavit, instrument, agreement or document sued upon, or relied on by the institution, as is equal to the number of defendants in the action. “;

(2) If any instrument, agreement or document is produced to court and the same appears to the court to be properly stamped (where such instrument, agreement or document is required by law to be stamped) and not to be open to suspicion by reason of any alteration or erasure or other matter on the face of it, and not to be baited by prescription, the court being satisfied of the contents contained in the affidavit referred to in subsection (4), shall enter a decree nisi in the form set out in the First Schedule to this Act in a sum not exceeding the sum prayed for in the plaint together with interest upto the date of payment and such costs as the court may allow at the time at making the decree nisi together with such other relief prayed for by the Institution as to the court may seem meet and the decree nisi shall be served on the defendant in the manner hereinafter specified.

(3) The day to be inserted in the decree nisi as the day for the defendant’s appearance and showing cause, if any, against it shall be as early a day as can conveniently be named, regard being had to the distance from the defendants residence to the court, and no further time shall be given to the defendant by court thereafter for appearing and showing cause against such decree nisi.

(4) The affidavit to be filed by the institution under sub section (1) shall be made by any director or a principal officer of such institution or by an attorney-at-law duly authorised to bring and conduct the action on behalf of the institution and which affidavit shall be made by such per son having personal knowledge of the facts of the cause of action and such person shall in his affidavit swear or affirm that he disposes from his own personal knowledge to the matters therein contained and shall be liable to be examined as to the subject matter thereof at the discretion of the judge

(1) The decree nisi shall subject to the provisions of section 5B, be ordinarily served on the defendant by registered post at the address given by the defendant to the institution as the address to which process may be served on him.

(2)

(3) Where the defendant is not a public officer and is in the employment of another person, the court may at its discretion, in addition to sending the decree nisi by registered post to the defendant also forward a copy of the decree nisi in duplicate to the employer of the defendant at his usual place of business or, where the employer is a company or corporation, to any secretary, manager or other like officer of the company or corporation, and it shall be the duty of such employer or officer, as the case may be, to cause a copy of the decree nisi to be served personally on the defendant and to return the other copy of the decree nisi to the court forthwith, with either an acknowledgement of receipt of such decree nisi by the defendant or with a statement of service of the decree nisi endorsed thereon and signed by the person effecting the service and counter signed by the employer of the defendant if such employer has not himself effected the service.

(4) In this section ” head of department “-

(1) Where a decree nisi is served by registered post on any defendant under subsection (1) of section 5 the Advice of Delivery of the registered letter in which the decree is sent, shall be sufficient proof of the service of such decree nisi on the defendant

(2) Where a decree nisi is served by defendant under subsection (2) or (3) section 5, an acknowledgement of the receipt of the decree nisi by the defendant or a statement of the service endorsed on the duplicate of the decree nisi shall be sufficient proof the service of such decree nisi on the defendant.

(3) Where the court is satisfied that decree nisi has been sent to the defendant by registered post but no advice of delivery has been obtained in respect thereof, it shall authorise the Fiscal or any other officer authorized by court in that behalf to affix the decree nisi to some conspicuous part of the house in which the defendant ordinarily resides or in the case of a company or corporation to the usual place of business or office of such company or corporation and in such case the decree nisi shall be deemed to have been duly served on the defendant.

(4) Where the court is satisfied that decree nisi has been sent to the defendant by registered post under subsection (2) or (3) of section 5 but no acknowledgment of receipt by the defendant or statement of service on the defendant has been received in respect thereof it shall authorise the Fiscal or other officer authorized by court in that behalf to affix the decree nisi lo some conspicuous part of the house in which the defendant ordinarily resides, and in such case, the decree nisi shall be deemed to have been duly served on the defendant.

(1) The court may, on application being made to that behalf immediately after decree nisi is entered, and in its discretion, order that in lieu of serving the decree nisi by registered post, the decree nisi be served by tendering or delivering the same on the defendant personally through a process officer,

(2) If the service referred to in subsection (1) cannot by the exercise of due diligence be effected, the process officer shall affix the decree nisi to some conspicuous part of the house in which the defendant ordinarily resides or in the case of a corporation or company, to the usual place of business or office of such corporation or company, and in every such case the decree nisi shall be deemed to have been duly served on the defendant.

(3) It shall be the duty of the process officer, on decree nisi being served on the defendant or any other person on his behalf, to require the signature or the thumb impression or both of such defendants or person to be made to an acknowledgement of the service of the decree nisi, on the original.

(4) The process officer shall return the precept to court setting out in detail the manner, the person, place and other particulars relating to the identity of the person on whom, the date on which, and the time at which, the decree nisi was served and also state in the report, whether the person on whom it was served placed his signature or thumb impression or both, or refused to place the signature or thumb impression or both, on the original, in acknowledgement of such service.

(5) Refusal to place the signature or thumb impression or both, as the case may be, on the original shall not invalidate the service of the decree nisi.

(6) For the purpose of this section-

“process officer ” means the Fiscal Official of the court of Fiscal of a court of like jurisdiction within the local limits of whose jurisdiction the decree nisi is served or any officer specially authorised in exceptional circumstances by court to serve the decree nisi or any process officer of a court or Grama Niladhari or a private process server ;

“private process server” means a person employed by an Attorney-at-law or any institution, and who is registered as a private process server by the Fiscal under any written law.

(1) In an action instituted under this Act the defendant shall not appear or show cause against the decree nisi unless he obtains leave from the court to appear and show cause.

(2) The court shall upon the filing by the defendant of an application for leave to appear and show cause supported by affidavit which shall deal specifically with the plaintiff claim and state clearly and concisely what the defence to the claim is and what facts are relied upon to support it, and after giving the defendant an opportunity of being heard, grant leave to appear and show cause against the decree nisi, either-

(3) Where the defendant either falls to appear and show cause or having appeared, his application to show cause is refused, the court shall make the decree nisi absolute. For this purpose, the judge shall endorse the words ” Decree nisi made absolute” (or words to the like effect) upon the decree nisi and shall date and sign such endorsement:

Provided that a decree nisi, if it consists of separate parts, may be discharged in part and made absolute in part and nothing herein enacted shall prevent my order being made by consent of the plaintiff and the defendant on the footing of the decree nisi”

(1) No appeal by a defendant shall lie against the decree nisi which has been made absolute under subsection (3) of section 6, on the ground of the defendants non appearance, but it shall be competent to the court within a reasonable time after the decree absolute was entered, to entertain an application by way of summary procedure instituted by any defendant against such order absolute was entered, to have it set aside on the ground that, the applicant was prevented from appearing the decree nisi was served on him by reason of accident or misfortune, or that such decree nisi was not served on him.

(2) Where the ground on which an application is made under subsection (1) is duly established to the satisfaction, of as against the plaintiff, the court may set aside the decree absolute upon such terms and conditions as the court shall consider it just and right to Impose upon the applicant and upon the decree absolute being so set aside, the court shall proceed with the hearing and determination of the matter in accordance with the provisions of this Act.

(3) Where an application by way of summary procedure is instituted by any defendant under subsection (1) of this section the provisions of the Civil Procedure Code (Chapter 101) relating to the applications by way of summary procedure shall apply in respect of such application.

(1) Where it appears to the Court that a decree nisi entered in an action instituted under this Act was obtained by wilful suppression or non-disclosure of any relevant facts or, if after the entering of the decree nisi, the decree nisi is discharged and the action is dismissed, the court may in the same action, on the application of the party against whom the decree nisi was entered, award against the institution obtaining the same, such sum as it deems reasonable compensation for the expense or injury caused to such party by the entering of the decree nisi, and an award under this subsection shall bar any action for compensation in respect of the entering of the decree nisi.

(2) Notwithstanding the dismissal of any action instituted under this Act where an application is made for compensation under subsection (1)in respect of a decree nisi entered in such action, the action so dismissed shall be deemed to continue until the determination of such application”.

(1) Subject to order of court where a decree nisi entered in an action instituted under this Act is made absolute, it shall be deemed to be a writ of execution duly issued to the Fiscal in terms of section 225(3) of the Civil Procedure Code (Chapter 101), and not withstanding anything to the contrary in any other written law, the execution of the same shall not be stayed.

(2) The writ of execution referred to in subsection (1) shall be valid for a period of three years from the date on which the decree nisi was made absolute, and it shall be the duty of the Fiscal to execute the same in the manner prescribed in the Civil Procedure Code (Chapter 101) for the execution of writs.”.

(1) If the Fiscal be resisted by any person, while executing a writ referred to in section 13 the Fiscal shall within fourteen days of the execution report such resistance to the court and the court shall thereupon issue a notice against the person resisting requiring him to show cause as to why he should not be dealt with for contempt of court occasioned by such resistance.

(2) Any person resisting the Fiscal while executing a writ under this Act shall be deemed to be guilty of contempt of Court and shall be liable to a fine not exceeding two thousand five hundred rupees or to imprisonment for a term not exceeding two years unless he proves that the property sought to be seized belonged to a person other than the judgment debtor

(1) Whenever an action is instituted under this Act the same shall be entered in a special register maintained by court substantially in the form set out in the Second Schedule to this Act.

(2) Where the defendant or his representative in interest alienates any movable or immovable property or otherwise disposes of same in any manner whatsoever after the decree nisi such alienation shall be null and void and of no force or effect in law and shall be open to seizure in whosever hands such property may be :

Provided that such alienation shall be valid if the action is dismissed or the decree nisi is discharged : and

Provided (further that such alienation shall also be valid, if the decree absolute is satisfied, but only in respect of such of the property alienated as has not been seized and applied in satisfaction of the decree absolute: and

Provided further that such alienation shall also be valid property in the hands of an alienee who has come by such property in good faith for consideration without having notice of the decree nisi either of the time the purchase money was paid, or when the conveyance was executed nor to an alienee from such an alliance, the burden of proof of which facts shall be on such alienee.

(2A) It shall not be a contravention of the provisions of subsection (2) for a defendant to alienate any movable or immovable property or otherwise dispose of the same in any manner whatsoever after the service of the decree nisi on him where” (a) the defendant has paid into court, the sum mentioned in the decree nisi; or (b) the action on which the decree nisi is entered is dismissed, or the decree nisi is discharged; (c) the decree absolute is satisfied, but only in respect of such of the property alienated as has not been seized and applied in satisfaction of the decree absolute; and (d) the alienation is undertaken with the approval of the court and subject to such terms and conditions as may be imposed by court.

(2B) Where any property is alienated or otherwise disposed of in contravention of the preceding (a) such alienation shall be null and wild and of no force or effect in law and shall be open to seizure In whosever hands such property may be: Provided that where the property alienated is in the hands of an alliance who has come by such property in good faith for consideration without having notice of the decree nisi either at the time the purchase money was paid or when the conveyance was executed or is in the hands of an alliance from such an alliance, such alienation shall not be null and void and the property shall not be open to seizure; and (b) the person who alienated the property shall be guilty of an offence and shall on conviction after summary trial by a Magistrate be liable to a fine not less than fifty thousand rupee or to a term of imprisonment of not less than two years.

(2C) The provisions of section 303 of the Code of Criminal Procedure Act, No. 15 of 1979, shall not be applicable in respect of an offender on whom a sentence of imprisonment is imposed under subsection (2B) ” ; and

(3) The Registrar of the court shall in addition to the register to be maintained under this section maintain also an index of the names of the defendants against whom actions have been filed under this Act and such index shall be in alphabetical order.

(4) Such register and index shall be open to public inspection and entries therein shall constitute prima facie notice to the public.

(5) All claims to property seized by whomsoever made shall be disposed of in the same action and a decision on such claim shall be a bar to the institution of any other action for the recovery of any property seized or to establish any right to such property or to have the same declared liable to be sold in execution of the decree in favour of the institution.

(6) Nothing in subsection (2B) applies to money or currency notes in the hands of a bona fide holder to whom they have passed in circulation, or to negotiable instrument in the hands of bona fide holder for value or shall be deemed to effect section 22 and 23 of the Sale of Goods Ordinance, of the rights of any holder in good faith for consideration of any document of title which by law passes the ownership of goods to which it relates by endorsement or delivery of the liability of a person to whom a debt or charge is transferred, or the right of a person who holds property under a title declared indefeasible by statute or of his successor in title.

(1) where the Court of Appeal allows and appeal preferred to it against an order made under subsection (3) of section 6 making a decree nisi absolute and where the writ has been executed under section 13 of this Act, the Court of Appeal shall enter decree in favour of the appellant awarding damages in such sum as it may consider appropriate.

(2) The decree entered by the Court of Appeal under subsection (1) shall be deemed to be a writ of execution duly issued to the Fiscal in terms of subsection (3) of section 225 of the Civil Procedure Code (Chapter l01) but the execution of the same shall be stayed-

(3) Where leave to appeal to the Supreme Court against a decree absolute is granted by the Court of Appeal, the appellant shall be required to furnish security in cash or by a guarantee from a banker for the full amount of the decreed sum or such part thereof as the court deem fit in all the circumstances of the case.

(4) Where the Supreme Court allows the appeal preferred to it under paragraph (a) or (b) of subsection (1) the decree entered by the Supreme Court shall notwithstanding the preceding provisions be deemed to be a writ of execution duly issued to the Fiscal in terms of subsection (3) of section 225 of the Civil Procedure Code. (Chapter 101) and it shall be the duty of the Fiscal to execute the same in the manner prescribed in the Civil Procedure Code (Chapter 101) for the execution of writs.

(1) Any person who-

(2) The expressions “cheque”, “dishonoured”, “banker”, “Inland Bill” and “Bill” shall have the respective meanings assigned to them in the BILLS of Exchange Ordinance (Chapter 32), and the term “dishonest” shall have the same meaning as in section 22 of the Penal Coda (Chapter 19).

(a) if that body of persons is a body corporate, every director, manager or secretary of that body corporate;

(b) if that body of persons is a firm every partner of that firm, and

(c) if that body of persons is an unincorporated body, every individual who is a member of such body.

(1) Where any debtor of an institution die:-; before the institution of an action under this Act in respect of any debt owed to the institution or and debtor of 3n institution or any person who is or becomes a party to an- action instituted under this Art dies after the institution of the action and grant of probate of the wilt or issue of letters of administration to the estate of the deceased has not been made, the court in which the action is to be or has been instituted may in its discretion, after the service of notice on such persons, ii any, and after such inquiry as the court may consider necessary, make order appointing a person to represent the estate of the deceased for the purposes of the action and such person may be made or added as a party to the action.

(2) In making any appointment under subsection (2) the court shall appoint as representative a person who, after summary Inquiry, appears to the court to be the person to whom probate of the will or letters of administration to the estate of the deceased would ordinarily be issued;

Provided, however, that in the event of a dispute between persons claiming to be entitled to be so appointed, the court shall make such an appointment (whether of one of those persons or of any other person) as appropriate in 1he opinion of the court, in the interests of the estate of the deceased,

(a) a licensed Commercial Bank within the meaning of the Banking Act, No, 30 of 1988;

(b) the State Mortgage and Investment Bank establish- ed by the State Mortgage and Investment Bank Act, No. 13 of 1975 ;

(c) the National Development Rank established by the National Development Bank of Sri Lanka Act, No. 2 of 1979 ;

(d) the National Savings Bark established by the National Savings Bank Act, No. 30 of 1971;

(e) the Development Finance Corporation of Ceylon established by the Development Finance Corporation of Ceylon Act (Chapter 165) ; and

(f) a company registered under the Finance Companies Act, No. 78 of 1988, to carry on finance business