EAGLE BREWERIES LTD. v. PEOPLES BANK

020-SLLR-SLLR-2008-V-2-EAGLE-BREWERIES-LTD.-v.-PEOPLES-BANK.pdf


CAEagle Breweries Ltd. v People's Bank199
EAGLE BREWERIES LTD.v
PEOPLE'S BANKCOURT OF APPEAL
ANDREW SOMAWANSA, J. (P/CA)
WIMALACHANDRA, J.
CA 586/2004DC CHILAW 709/MDRFEBRUARY 24, 2006
Debt Recovery (Sp. Pro.) Act No.2 of 1990 Section 4(1), 4(2), 4(5) – Actionbased on cheques – Full sum to be deposited – Notice of appeal filed -Rejection of same by the District Court – Validity – Civil Procedure Code.Section 754(4), 754(3), 755 – a writing or document stipulated under Section4 of the Debt Recovery Act? Revision – Exceptional circumstances.
The plaintiff-respondent instituted action in terms of the Debt Recovery (Sp.Prov.) Act (DR Act) – action being based on 20 cheques. After inquiry on3.12.2003 Court ordered the defendant to deposit the full sum claimed in theplaint to be entitled to file answer.
The petitioner lodged a notice of appeal which was rejected by the DistrictJudge on 26.1.2004. The District Court also rejected the position of thedefendant that, there was no agreement. The petitioner moved in revision andcontended that the District Judge has no jurisdiction to reject the notice ofappeal but could only record his observations as to whether or not there is aright of appeal against the judgment appealed against.
It was also contended that as there was no writing or documents on which therespondent can sue or on which the loan is said to have been granted, – theaction cannot be maintained.
Held:
In terms of the provisions contained in the Civil Procedure Code, withregard to tendering of notice of appeal, the relevant provisions do notpermit or give authority to the District Judge to reject the notice of appealon the basis that the petitioner is not entitled to a final appeal, it was thefunction of the Court of Appeal to look into this aspect of the matter.
200Sri Lanka Law Reports[2008] 2 Sri L.R
Section 754(1) states that “if such conditions are not fulfilled the Court shallrefuse to receive it — it refers to the requirements specified under Section754(3) and 754(4) only and no other. It does not give jurisdiction to theDistrict Judge to refuse the notice of appeal as he is of opinion that theorder in question does not give rise to a final appeal.
Held further:
While it is conceded that statement of accounts and the cheques do notcome within the meaning of instrument or agreement, the restrictedinterpretation sought to be given to an instrument or an agreement as beinga document which contains a contract entered into between two or moreparties is unacceptable. For a cheque or a statement of account from aBank too could be considered to constitute a document that would containa contract entered into between two parlies.
Cheque drawn from a Bank and a statement of accounts from a Bankwould come within the ambit of a document in terms of Section 4(1).
Held further:
Exercise of the revisionary powers of the appellate Court is confined tocases in which exceptional circumstances exist warranting intervention andrevision is a discretionary remedy – No explanation has been given as towhy he did not resort to his statutory right to seek relief from the 2nd orderdated 3.12.2003.
APPLICATION in revision from an order of the District Court of Chilaw.
Case referred to:
(1) Dharmaratne and another v Palm Paradise Company Ltd. and others 20033 Sri LR 24.
Sunil Cooray for petitioner.
Ronald Perera for respondent.
February 24, 2006
ANDREW SOMAWANSA, J. (P/CA)In this revisionary application the defendant-petitioner is seekingto revise and set aside the orders of the learned District Judge ofChilaw dated 03.12.2003 holding that unless the defendant-petitioner deposits in Court the sum claimed in the plaint thedefendant-petitioner is not entitled to file answer and to contest thisaction and the order dated 26.01.2004 rejecting the defendant-petitioner's notice of appeal. Defendant-petitioner further prayed forthe dismissal of the plaintiff-respondent's action or in the alternative
CA Eagle Breweries Ltd. v People’s Bank (Andrew Somawansa, J.) (P/CA) 201
an order granting unconditional leave to the defendant-petitioner tofile answer and contest the action. The defendant-petitioner alsosupported and obtained a stay order staying proceedings in theDistrict Court which have been extended from time to time.
After the pleadings were completed and when this applicationwas taken up for argument both Counsel agreed to resolve thematter by way of written submissions and both parties havetendered their written submissions.
The relevant facts are: the plaintiff-respondent (hereinafter calledthe respondent) instituted the instant action in terms of provisions ofthe Debt Recovery (special provision) Act No. 2 of 1990 as amendedseeking to recover Rs. 928,980/50 and interest at the rate of 32% perannum. The action is based on 20 cheques drawn by the defendant-petitioner (hereinafter called the petitioner) on his current accountmaintained at the respondent’s Bank branch at Madampe and all ofwhich had been honoured by the respondent Bank. The DistrictCourt issued decree nisi on the petitioner and the petitioner filed hisobjections supported by affidavit and moved that he be allowed leaveto appear and defend unconditionally by filing answer to contest thisaction and that the decree nisi be dissolved. At the conclusion of theinquiry into this application made by the petitioner the learned DistrictJudge by his order dated 03.12.2003 held that unless the petitionerdeposits in Court the sum claimed in the plaint the petitioner will notbe entitled to file answer or to contest this action. Being aggrieved bythis order, the petitioner duly filed a notice of appeal in terms ofSection 755(1) of the Civil Procedure Code. The respondent objectedto the said notice of appeal being accepted and moved that the samebe rejected. At the conclusion of the inquiry into the aforesaidobjection the learned District Judge by his order dated 26.01.2004rejected the petitioner's notice of appeal. It is the aforesaid two ordersthat the petitioner is seeking to revise and set aside.
As for the order rejecting the notice of appeal the same cannotstand for the learned District Judge has no jurisdiction to reject eithera notice of appeal or a petition of appeal but could only record hisobservations as to whether or not there is a right of appeal againstthe judgment or decree appealed against.
202Sri Lanka Law Reports[2008] 2 Sri L.R
At this stage it is useful to consider the relevant provisions in theCivil Procedure Code,
Section 754(3) "Every appeal to the Court of Appeal from anyjudgment or decree of any original Court, shall be lodged bygiving notice of appeal to the original Court within such timeand in the form and manner hereinafter provided
“The notice of appeal shall be presented to the Court of firstinstance for this purpose by the party appellant or hisregistered attorney within a period of fourteen days from thedate when the decree or order appealed against waspronounced, exclusive of the day of that date itself and of theday when the petition is presented and of public holidays, andthe Court to which the notice is so presented shall receive itand deal with it as hereinafter provided. If such conditions arenot fulfilled, the Court shall refuse to receive it".
It is to be noted that the last sentence in 754(4) of the CivilProcedure Code which reads
'If such conditions are not fulfilled the Court shall refuse toreceive it' refers to the requirement spelt out in Sections 754(3) and
only and no other. It does not give jurisdiction to the DistrictJudge to refuse notice as he is of opinion that the order in questiondoes not give rise to a final appeal as in the instant action.
Thereafter Section 755(4) and (5) comes into operations whichreads as follows:
755(4) "Upon the petition of appeal being filed, the court shallforward the petition of appeal together with all the papers andproceedings of the case relevant to the judgment or decreeappealed against, as speedily as possible to the Court ofAppeal retaining however an office copy of the judgment ordecree appealed against, for the purposes of execution ifnecessary. Such proceedings shall be accompanied by acertificate from the Registrar of the Court of Appeal stating thedates of the institution of the decision of the case, in whosefavour it was decided and the dates on which the notice andthe petition of appeal were filed, and the opinion of the Judgeas to whether or not there is a right of appeal against the
CA Eagle Breweries Ltd. v People's Bank (Andrew Somawansa, J.) (P/CA) 203
judgment or decree appealed against"
"On receipt of the petition of appeal, the Registrar of the Courtof Appeal shall forthwith number the petition and shall entersuch number in the Register of Appeals and notify the partiesconcerned by registered post
Provided that when the judge of the original court hasexpressed an opinion that there is no right of appeal againstthe judgment or decree appealed against, the Registrar shallsubmit the petition of appeal to the President of the Court ofAppeal or any other Judge nominated by the President of theCourt of Appeal who shall require the petition to be supportedin open court by the petitioner or an attorney on his behalf ona day to be fixed by such Judge, and the court having heardthe petitioner or his attorney, may, reject such petition or fix adate for the hearing of the petition and order notice thereafterto be issued on the respondent or respondents;
Provided further, that, when a petition is rejected under thissection the Court shall record the reasons for such rejection"
In terms of the provisions contained in the Civil ProcedureCode with regard to the tendering of notice of appeal the relevantprovisions do not permit or give authority to the learned DistrictJudge to reject the notice of appeal on the basis that the petitioneris not entitled to a final appeal. On this point of law, I would saythe learned District Judge has misdirected himself as havingauthority to do so when in fact he did not have such authority andit was the function of the Court of Appeal to look into this aspectof the matter.
In the circumstances, I would hold that the order dated
is palpably wrong and could be considered asexceptional circumstances warranting the interference andexercise of the extraordinary powers of this Court to set aside thesaid impugned order. In this respect, I would also consider the factthat when the notice of appeal was rejected on 26.01.2004 the onlymeans by which he could obtain relief was by way of revision forthere was no other alternative means of relief that he could resortto.
204Sri Lanka Law Reports[2008} 2 Sri L.R
In respect of the other order dated 03.12.2003 Counsel for thepetitioner contends that the question of law raised by him at theinquiry in the original Court is that this action cannot be maintainedin terms of Debt Recovery (Special Provisions) Act No. 2 of 1990as there was no writing or documents on which the respondent cansue in this action. He submits that there was no written agreementor document on which the loan is said to have been given and isnow sought to be recovered. For the above submission thedefendant relies on the express provisions of Section 4(1), Section4(2) and Section 4(5) of the Debt Recovery (Special Provisions) ActNo. 2 of 1990, which reads as follows:
"4(1) The institution suing shall on presenting the plaint…. produceto the court the instrument, agreement or document sued upon orrelied on by the institution".
"4(2) If any instrument, agreement or document is produced to thecourt and the same appears to the court to be properly stamped(where such instrument, agreement or document is required by lawto be stamped) and not be open to suspicion by reason of anyalteration or erasure or other matter on the face of it, and not to bebarred by prescription, the court…. shall enter a decree nisi in theform set out in the First Schedule".
"4(5) The institution shall tender with the plaint – (a) the …instrument, agreement or document referred to in subsection (1) ofthis section …"
Counsel submits that an action under the said Act No. 2 of 1990cannot be instituted by an institution unless it has, and it producesin court, an instrument, agreement or document sued upon or reliedon by the institution and the petitioner had shown, in applying forunconditional leave to appear and defend this action, that there isan issue or a question in dispute which ought to be tried within themeaning of Section 6(2)(c) of the said Act, No. 2 of 1990. Thereforethe Court was obliged under Section 6(2) of the said Act to "giveleave to appear and show cause".
He further submits that the contention of the plaintiff bank is thatthe several cheques which it has produced with the plaint, and/orthe statement of accounts which it has produced with the plaint,amounts to an instrument, agreement or document sued upon or
CA Eagle Breweries Ltd. v People's Bank (Andrew Somawansa, J.) (P/CA) 205
relied on by the plaintiff bank. This contention of the plaintiff bank iswholly incorrect and untenable and the statement of accounts andthe cheques produced do not come within the meaning of"instrument" or "agreement". An "instrument or agreement" is clearlya document which contains a contract entered into between two ormore parties. The word "document1 in Section 4(1) must be given ameaning ejusdem generis and must mean some document by whichthe loan was granted by the plaintiff to the defendant. This is clearly
seen by the words "sued upon or relied on" in Section 4(1).
♦
For the above reasons Counsel submitted that the plaintiff is notentitled to institute this action under the provisions of the said ActNo. 2 of 1990, and that the defendant has shown that he has anarguable defence in this action, the Court was bound to havegranted unconditional leave to appear and defend under Section6(2)(c) of the Act No. 2 of 1990.
I am not impressed with the aforesaid submissions for therelevant provisions state that on presenting the plaint … producedto the Court the instrument, agreement or document sued upon orrelied upon by the institution. While it is conceded that statement ofaccounts and the cheques produced do not come within themeaning of instrument or agreement. However, the restrictedinterpretation sought to be given by Counsel to an instrument or anagreement as being a document which contains a contract enteredinto between two or more parties is unacceptable. For a cheque ora statement of accounts from a Bank too could be considered toconstitute a document that would contain a contract entered intobetween two parties. My considered view is that a cheque drawnfrom a Bank and a statement of accounts from a Bank would comewithin the ambit of a document in terms of Section 4(1) of Act No.2 of 1990. In any event the objection taken by the petitioner wasrejected and journal entry dated 03.12.2003 reads asfollows:

The petitioner was given time til! 10.03.2004 to deposit the money.It appears that he did not take any steps to have this order dated
vacated or set aside or stay the proceedings when he hada statutory right of appeal with the leave of the Court of Appeal firsthad and obtained. However it appears that without resorting to hisstatutory right or depositing the money he had proceeded to tender anotice of appeal on 19.12.2003. Ultimately after an inquiry as perjournal entry dated 26.01.2004 petitioner’s notice of appeal wasrejected and the instant revision application has been tendered on
04.03.2004.
It is to be noted that no explanation at all has been given as to whyhe did not resort to his statutory right to seek relief from the orderdated 03.12.2003. No explanation given as to the delay in coming tothis Court by way of revision.
It is well settled law that the exercise of the revisionary powers ofthe Appellate Court is confined to cases in which exceptionalcircumstances exist warranting its intervention and that the revision isa discretionary remedy and will not be available unless the applicationdiscloses circumstances which shock the conscience of the Court andis certainly not available to a party who for reasons best known to himsleeps over his rights without asserting them.
In Dharmaratne and Another v Palm Paradise Cabanas Ltd. andOthers^) Gamini Amaratunga, J. having considered 19 judgmentsheld as follows:
Per Gamini Amaratunga, J.
Existence of exceptional circumstances is the process by whichthe court selects the cases in respect of which the extraordinarymethod or rectification should be adopted. If such a selectionprocess is not there revisionary jurisdiction of this court willbecome a gateway of every litigant to make a second appeal in

206Sri Lanka Law Reports[2008} 2 Sri L.R
SC Priyadarshana and Two others v Sri Lanka Ports Authority 207
the garb of a Revision Application or to make an appeal insituations where the legislature has not given a right of appeal.”
.The practice of Court is to insist in the exercise of exceptionalcircumstances for the exercise of revisionary powers has takendeep root in our law and has got hardened into a rule whichshould not be lightly disturbed.
The petitioner has not pleaded or established exceptionalcircumstances warranting the exercise of revisionary powers.”
For the foregoing reasons, whilst I would revise and set aside theorder dated 26.01.2004, I would refuse the application to revise andset aside the order dated 03.12.2003. In all the circumstances I makeno order as to costs.
WIMALACHANDRA, J.- I agree.
Application dismissed.
Order rejecting notice of appeal held to be void.