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1)990) 1 Sri L.R.
DONA CECILIANA AND OTHERS
KAMALA PIYASEELI AND ANOTHER
COURT OF APPEAL,
S, B. GOONEWARDENE , J. , (P/CA) AND WEERASEKERA . J,
C. A. No. 221/92 — D. C. MATARA No 4497/L.
NOVEMBER 1, 1989.
Appeal ■ Security for costs ■ Civil Procedure Code s. 754 (3), 755 (2) fa), t
– Rules under s. 15 of the Administration of Justice Law. No 44 of 1973hypothecate deposit – Material prejudice.
,57(). 759■ Fai'ure to
CADona Celiliana and Others v. Kamala Piyaseeli and Another
Section 755 (2) ot the Civil Procedure Code requiries that notice of appeal shall (unlesswaived by the respondent or dispensed with) be 'accompanied’ inter alia by security for therespondent's costs of appeal. The word 'accompanied' has the effect of suggesting thatthe validity of the notice of appeal itself cannot be considered as affected by anyshortcomings with respect to the providing of security.
As provided by section 757 (1) of the Code the security to be required from a party appellantin tho case of money is by 'deposit and hypothecation of bond'. Merely depositing suchmoney without hypothecation by bond would then amount to a performance of a part butnot the whole of the act of furnishing security. In fact in every one of the modes of furnishingsecurity it is the act of execution of the bond that provides the security as required by s.755(2). Failure to hypothecate is fatal. Section 759 (2) does not enable the Court to grantrelief in such a case.
In any event 759 (2) does not apply because – (1) there was no explanation for failure tohypothecate the money (2) the time factor involved is 7 years from the date of lodging theappeal (3) the record would have to go back to the District Court for the bond to befurnished, entailing further delay and (4) it can scarcely be said that the respondent willnot be materially prejudiced.
Cases referred to :
Brooke Bond (Ceylon) Ltd. v. Gunasekera S. C. Appeal No. 40/87 – S. C. Minutes ot06. 06. 1989.
Chelliah v. Selvanayagam 59 NLR 119
Vithana v. Weerasinghe and Another [1980 )1 Sri LR 52.
Arulampalam v. Daisy Fernando (1986) 1 Colombo Appellate Law Reports 651.
Thabrew v. Kosgoda Vajiragnana Thero C. A. No. 845/81 -Court of Appeal Minutes ot08. 06. 1989.
PRELIMINARY OBJECTION to prosecution of appeal from judgment of the District Court.
Dr. H. W. Jayewardene Q. C. with Miss. T. Keenawinna and H. Cabraal for plaintiff-appellants.
Bimal Rajapakse with K. S. Tillekeratne tor defendants – respondents.
Cur. adv. vult.
November 30, 1989.
S. B. GOONEWARDENE, J. (P/CA).
This order relates to a preliminary objection taken by Counsel lor thedefendants-respondents prior to the hearing of this appeal.
The plaintiifs-appellants who instituted this action in the District Courtlound the same dismissed by the District Judge by his judgment dated 5thMay, 1982. Being dissatisfied with that result, on 19th May, 1982 they‘Lodged' an appeal by giving notice of appeal to the District Court as
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provided for in section 754 (3) of the Civil Procedure Code (hereinafterreferred to as the Code), within the prescribed period of fourteen days.
As required by section 755 (2) (a) of the Code the notice had inter aliato be accompanied by security (unless waived or dispensed with) lor therespondent's costs of appeal in such amount and nature as is prescribedin the rules made under section 15 of the Administration of Justice Law,No. 44 of 1973. The rule under reference provides in the form of aschedule thus :
Where cause ofUnderRs. 1500/=&Rs.5000/=&Rs.10,000/=
action, title toRs.1500/=underunder& over
land or property,Rs. 5000/= Rs. 10,000/=
value of estate
CashRs.150/=Rs. 250/=Rs. 375/=Rs. 750/=
Mortgage ofRs.300/=Rs. 500/=Rs. 750/=Rs. 1500/=
It would therefore be seen that the security to be furnished in anyparticular case in the present state of the Law, is fixed and clearlyascertainable both in amount and in nature.
Along with the notice of appeal the plaintiffs filed a receipt in proof ofdeposit of a sum of Rs. 750/= as such security.
Section 757 (1) of the Code provides that the security to be requiredfrom a party appellant should take one of three forms namely (a) by bondwith one or more good and sufficient surety or sureties or (b) by way ofmortgage of immovable property or (c) by deposit and hypothecation bybond of a sum of money sufficient to cover the costs of appeal.
It was agreed during argument before us that in the instant casealthough there was a deposit in money of a sum of Rs. 750/= by the
CADona Cedliana and Others v. Kamala Piyaseeli and Another229
(S. B. Goonewardene, J.)
plaintiffs, there was however no hypothecation of it and therefore thepreliminary objection raised by Counsel for the respondents was basedupon such admitted failure to hypothecate this money. He contendedtherefore as I understood him that the very notice of appeal contemplatedby section 754(3) was defective and that there was thus no proper appealbefore this Court capable of being heard.
On the other hand the rival contention of Counsel for the appellantswas that this was clearly an instance in which relief should be grantedunder the provisions of section 759 (2) of the Code on the basis that nomaterial prejudice has been shown to have been caused to the defendants-respondents and that therefore a constitutionally granted right of appealmust not be withheld from the plaintiffs for failure to comply with what he(Counsel) termed a more technical requirement.
Section 759 (2) of the Code reads thus “In the case of any mistake,omission or defect on the part of any appellant in complying with theprovisions of the foregoing sections, the Supreme Court (here one mustread Court of Appeal) may if it should be of opinion that the respondenthas not been materially prejudiced, grant relief on such terms as it maydeem just”.
I would be slow to go along with the argument of Counsel for therespondents that the notice of appeal itself was tainted by this defect offailure of hypothecation but at the same time I cannot agree that suchfailure to hypothecate was no more than a failure to comply with atechnical requirement.
To advert first to the contention of Counsel for the respondents, as Ihave already pointed out section 755 (2) of the Code requires that thenotice of appeal shall (unless waived by the respondent or dispensedwith) be accompanied’inter alia by security for the respondent’s costsof appeal. The word here used is ‘accompanied’and this has the effectof suggesting to my mind that the validity of the notice of appeal itselfcannot be considered as affected by any shortcomings with respectto the providing of security.
If the notice of appeal itself is thus unaffected what then is the result.In the instant case the plaintiffs elected to furnish such security whosenature was cash' or ‘money ‘ and the amount whereof was Rs. 750/- as
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fixed by the relevant rule. As I said earlier it is provided in section 757(1) of the Code that “ the security to be required from a party appellant“in the case of money is by‘deposit and hypothecation of bond’. Merelydepositing such money without hypothecation by bond would thenamount to a performance of a part but not the whole of the act of furnishingsecurity. To elaborate, when section 755(2) requires that “the notice
of appeal shall be accompanied bysecurity lor the respondent's
costs of appeal “ and when section 757(1) demands that “the security
tobe required from a party appellantshallbeby deposit
and hypothecation by bond of a sum of money sufficient to cover thecosts of the appeal", upon any true reading of those provisions to saythat security for the respondent's costs of appeal has been furnished bymerely depositing a sum of money without hypothecation thereof wouldI think be to do violence to the language of these provisions.
The law envisages a completed act of depositing and hypothecationof the sum of money in question when that is the method adopted ofproviding security. If on the other hand the choice adopted is to providesecurity through a good and sufficient surety (or sureties) once again theact of providing such security is by bond. Yet again if the third methodcontemplated by section 757 (1) is the choice, that is by mortgage ofimmovable property, that also has to be by bond. In every one of thesecases therefore it will be seen that it is the act of execution of the bond thatprovides the security as required by section 755 (2), and the impact ofwhat I say will be seen if one considers a case where an appellant electsto furnish security adopting one of the other methods than depositing andhypothecation of money and there is a failure to execute the bond. Justas much as in that situation there would be no security furnished at all,here too although the money was deposited there was no securityfurnished.
As I read these provisions therefore the plaintiffs in eflect have notfurnished security as required and for all resulting purposes it is as thoughthere had not been even a deposit of this sum of money. If therefore it isfatal to the continuance of an appeal in a case where there has been nosecurity furnished at all, it is equally fatal if there has been no hypothecation,and that done before a point of time when the appeal is ‘lodged' by givingnotice of appeal which has to be accompanied by such security ascontemplated by section 755 (3) of the Code.
CADona Ceciliana and Others v. Kamala Piyaseeli and Another231
(S. B. Goonewardene, J.)
In the case of Brooke Bond (Ceylon) Ltd. v. A.M. Gunasekera (1),Atukorale, J. in dealing with a question relating to execution proceedingspending appeal, had occasion to trace the history of certain aspects ofchanges in the law relating to appeals procedure. He pointed out that theAdministration of Justice Law, No. 44 of 1973, repealed the provisions ofthe Civil Procedure Code relating to appeals procedure which were inforce before it became law on 1st January, 1974, but that the CivilProcedure Code that had been replaced in its entirety by the Administrationof Justice Law, No. 25 of 1975, was again revived and brought back intooperation by the Civil Courts Procedure (Special Provisions) Law, No. 19of 1977which came into operation on 15th December, 1977, although onthe same day the Civil Procedure Code (Amendment) Law, No. 20 of1977-, also became law and brought about changes in the Civil ProcedureCode to embody the concept of preferring an appeal by lodging a noticeof appeal, a concept contained in the Administration of Justice Law, No.44 of 1973.
It would be useful perhaps at this point to refer, albeit very briefly, to therelevant provisions of the Civil Procedure Code as they stood on 31stDecember, 1973, that is before the change brought about by the CivilProcedure Code (Amendment) Law, No. 20 of 1977. The provisionsbefore such amendment contemplated an appeal being made bypresenting a written petition to the original Court within a period of 10 daysof the date of delivery of the judgment or order appealed against in thecase of an appeal from the District Court. (Section 754 (1)). By contrastwith the present provisions with respect to security, the appellant wasunder those provisions (s.756 (1)) required forthwith to give notice to therespondent that he would on a date specified therein within a period oftwenty days of the date of the delivery of the judgment or order (by aDistrict Court) tender security for the respondent's costs of appeal whichupon being accepted had to be given by bond. Atukorale, J. in BrookeBond (Ceylon) Ltd. v. A.M. Gunasekera (supra) with respect to theseprovisions said as follows
“ Thus, in my view, under the 1973 Code an appeal was preferredagainst the judgment, decree or order of the District Court only uponcompliance with the aforesaid provisions. There had, therefore, to becompliance with two time-limits before an appeal could be held to havebeen preferred to the Supreme Court, namely, the presentation of thepetition of appeal within 10 days as required by s. 754 (2) and the
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furnishing of security and the making of the deposit within 20 days asrequired by s. 756 (1). Both such periods were to be computed fromthe date when the decree or order appealed against was pronouncedin the manner set out in these two sub sections. Hence a would-beappellant who complied initially with s. 754 (2) was allowed time up toa total period of 20 days for compliance with s. 756 (1). It is only whenthere had been compliance with both time limits that notice of appealis ordered by Court to be served on the respondent. If there wascompliance with s. 754 (2) but ‘ the petitioner’ failed or omitted tocomply with s. 756 (1) then * the petition of appeal' must be held to haveabated and no further steps were necessary – s. 756 (2). The schemeof the 1973 Code therefore shows that an appeal was preferred to theSupreme Court only where there was due compliance with the stepsenumerated by sections 754 (2) and 756(1) within the periods oflimitations prescribed therein".
These words with which I am in agreement show the requirement torproviding security as an essential step in the process of preferring anappeal, a view expressed by Atukorale, J. notwithstanding the presenceof the provision in section 756 (3), in terms identical with section 759 (2)of the present Code called in aid by Counsel for the appellant, permittingan appellate Court to grant relief in the case of any mistake, omission ordefect, It also strikes me as significant that although the presence of thisprovision in the Code as it stood in 1973 permitted this relief to be grantedby an appellate Tribunal when the appeal was before it, there was adirection in the provision just preceding it at section 756 (2) that if theperson presenting the petition of appeal failed to give security the petitionof appeal was to be held to have abated (by the District Court and beforethe record was sent up to the appellate tribunal). What is required to benoted is that with such an order of abatement the record will haveremained in the District Court while relief if at all under section 756 (3) onthe basis of any correctable mistake, omission or defect could have beengranted by the appellate tribunal only when the record was before it inappeal, a position lending support to a view that the provisions of section756 (3) had no application to a situation where the failure was to furnishsecurity. This aspect of it is perhaps supportive of a view that has beentaken with respect to the earlier provisions that the providing of securitywas an essential step in the appeals procedure (videfor example the caseof Chelliah v. Selvanayagam (2) a view which I think has equalapplication to the present provisions.
CADona Cedliana and Others v. Kamala Piyaseeli and Another233
(S. B. Goonewardene. J.)
I would therefore venture to say that at the time the plaintiffs presentedtheirnoticeof appeal on 19th May, 1982, it should have been accompaniedby security for the respondent’s costs of appeal, that is in the instant casehaving regard to the choice adopted by the plaintiffs to deposit a sum ofRs. 750/=, with a hypothecation of that money and that the failure to dothat was a failure to take an essential step in perfecting this appeal, itbeing too late now, over seven years after the notice of appeal waspresented, to endeavour to do what should have been done on or before19th May, 1982.
Much reliance was placed by Counsel for the appellants on thejudgment of Wanasundera, J. in the case of Vithana v. Weerasinghe andAnother (3) where there is a reference to the power of the Court to grantrelief under section 759 (2) of the Code. I do not see anything there whichwith any degree of specificity, has the effect of saying that a failure toprovide security as has happened in the instant case by non hypothecationis something correctable at a later stage when the appeal is before thisCourt.
To my mind the conclusion is inescapable that the failure to givesecurity which is as I perceive the effect of the failure to hypothecate themoney deposited as has happened in the instant case, is not somethingcorrectable at a later stage when the appeal is before this Court by theinvocation of the provisions of section 759 (2) of the Code. If such ispermissible, there is no step in the appeals procedure that would not becorrectable under this provision. The view I thus take of these provisionsis consonant with the view taken by this Court in the cases of Arulampalamv. Daisy Fernando (4) (1986) 1 Colombo Appellate Law Reports 651 andThabrew v. Kosgoda Vajiragnana Thera (5).
Before I pass I would like to say something in regard to the practicaleffect of allowing an application of this kind. Counsel for the appellantcontended that the Registrarof the District Court could be required to takea bond and forward it to this Court in hypothecation of the moneydeposited. To prepare and perfect such a bond demands that theRegistrar must be in a position to examine the original record which thusrequires that such record should go back from here to the trial Court, andthat in the instant case after more than seven years. Apart from creatinga bad precedent which would encourage this kind of conduct lacking indiligence on the part of appellants, and apart also from the injustice
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caused to the respondent, ai a time when we are faced with a livingproblem of the laws delays this is scarcely the kind oi action that must becountenanced.
One final question i would wish to address my mind to. Assuming forthat purpose that the provisions of section 759 (2) of the Code hadapplication and that relief could have been granted to the plaintiffs, isthere justification for doing so in the instance case ? I think not. Firstlythere has been no explanation of any kind forthcoming for this failure tohypothecate this money. Secondly the time factor involved that it issought to cure this defect over seven years later as I have pointed out.Thirdly permitting such an application would, as I have again pointed out,result in the record having to go back to the original Court for the bond tobe perfected with the inevitable delay that process would involve inconcluding this appeal. Fourthly it can scarcely be said that the respondentwill not be materially prejudiced by allowing such a step. As Counsel forthe respondent pointed out the continuance of a suit itself is irksome andtherefore prejudicial and the very advantage to be gained by therespondents by the appeal being rejected would be lost to them whichnecessarily means that he will be materially prejudiced. I would thereforewithhold this relief from the plaintiffs even if this Court had the power togrant it.
For these reasons I would sustain the preliminary objection taken andreject this appeal. The appellants will pay the respondents Rs. 315/= ascosts in this Court.
WEERASEKERE, J. -1 agree.
Preliminary Objections overruled.