001-SLLR-SLLR-1991-V2-GUNARATNE-vs.-TRANSLANKA-INVESTMENTS-LTD.-AND-ANOTHER.pdf
GUNARATNE
VS.
TRANSLANKA INVESTMENTS LTD. AND ANOTHER
SUPREME COURT.
FERNANDO J., AMERASINGHE J. AND GOONEWARDENA, J.
S.C. APPEAL NO. 34/91.
A, NO. 45/91-
C. COLOMBO 14918/MB.
09 OCTOBER, 1991.
Mortgage – Sale in execution of hypothecary decree – Material irregularity-Publication – Civil Procedure Code S. 282 – Refusal to issue notice – Issummary procedure mandatory?
The appellant consented to judgment in a hypothecary suit on a fhort-gagc bond. He was given the facility of paying the decreed sum in instal-ments but defaulted. The property was sold in execution of the decree. The.appellant moved to have the sale set aside on the ground of material irregu-larity.
Held:
Section 282(2) of the Civil Procedure Code requires an applicant to not-ify to Court the grounds and not the particulars or evidence of such groundsof material irregularity.
Summary procedure is not mandatory.
Although ordinarily notice should have issued, here one of the prayerswas that the mortgaged property be sold after such publication as the aucti-oneer considered adequate. The defendant had consented to judgment asprayed for. The adequacy of the publication cannot be tested objectively inview of the consent. Publication which the auctioneer considered adequateviewed subjectively, meets the requirements.
2
Sri Lanka Law Reports
[1991] 2 Sri L. R.
Cases referred to:
Muttvkvmaraswamy v. Nannitamby (1904) 4 Tamb. Rep. 34
Pitche Bawa v, Meera Lebbe (1393) 2 Cey. LR 174
Re Abdul Ads (1895) 1 NLR 196, 199
Silva r. Seiohamy (1923) 25 NLR 113
APPEAL from the judgment of the Court of Appeal.
A.K. Premadasa P.C. with Ikram Mohamed and C.E. de SUvb for defendant- appellant.
Komesh de Silva P.C. with S.C.B. Walgampaya for plaintiff – respondent.
F.C. Perera with S. Curugalgoda and Upali Ponnamperuma for 2ndrespondent.
Cur. adv. vult.
23 October, 1991.
FERNANDO, J.
The Plaintiff-Respondent (“the Plaintiff’) instituted thismortgage bond action against the Defendant-Appellant (“theDefendant”) in 1983. It is not denied that the Defendantresorted to various dilatory tactics; finally he consented tojudgement on 26.7.89; thereafter he failed to make payments interras of the decree, but succeeded in delaying the sale of theproperty until 19.1.91. On that day the property was sold forRs. 2,050,000/- to the 2nd Respondent (“the Purchaser”). On15.2.91 the Appellant made an application under section 282of the Code to set aside the sale, alleging that the property wasworth Rs. 8 million, on the ground of a material irregularity in
sc
Gillian u» v*. Tnaslaaka bmiiuoli Ltd and Aaoikr^iniiinto, J.)3
publishing the sale: that the sale had not been duly published,in that adequate publicity had not been given, resulting in onlytwo or three bidders attending the sale. Several other groundswere also set out in the petition, (that the auctioneer had notnotified the date of sale to the Court, that the perfected condi-tions of sale were neither stamped nor duly attested, that thePurchaser had not paid the required deposit of 10% etc.) but itis common ground that these were patently untenable, in thelight of material already before the Court.
When the Defendant moved that notice of the applicationbe issued on the Respondents, learned President’s Counsel forthe Plaintiff submitted that notice could be issued only if theCourt was satisfied that the facts alleged in the petition estab-lished that there was a material irregularity in publishing orconducting the sale; he then referred in some detail to theDefendant’s dilatory tactics. The learned trial* Judge refused toissue notice; the Defendant filed applications for leave toappeal and for revision in the Court of Appeal; notice wasrefused. The Defendant then appealed to this Court with spe-cial leave.
Learned Presidents Counsel for the Defendant submittedthat upon an application being made under section 282, noticemust be issued almost as of right, or as a matter of course. Hewas forced to concede, however, that there were situations inwhich the Court could legitimately conclude that there was nomerit whatever in the application, and refuse notice; forinstance, where the application involved a pure question of lawwhich had been long settled, or a question of fact dependentsolely on matters already contained in the record. He submit-ted that the adequacy of the publicity given was a question offact which could not be determined by reference to the docu-ments and other material in the record.
Learned President’s Counsel for the Plaintiff submitted thatthe Court had a discretion under section 282 in regard to the
4
Sri Lanka Law Reports
[1991] 2 Sri L. R.
issue of notice, and that notice should not be issued unless theCourt is convinced that there had been a material irregularityand that substantial injury had been caused. When it waspointed out that section 282(2) prohibited the setting aside of asale on the ground of irregularity unless the applicant provedto the satisfaction of the Court that he has sustained substan-tial injury, and that therefore there was no similar burden atthe time notice was sought, he submitted that the Court mustbe satisfied prima facie at that stage. His attention was drawnto section 377 which required the Court to be so satisfied inapplications by way of summary procedure, whereupon hesubmitted that summary procedure applied to section 282 aswell. The only authority he cited was Muttukumaraswamy v.Nannitamby (1). There the District Judge had proceeded underChapter XXIV, and although Middleton, J., inclined to theview that summary procedure applied, that was obiter, becausehe expressly stated that the form of the proceedings did notaffect the point for decision, namely that substantial injuryhad not been proved. Section 8 of the Code makes summaryprocedure applicable where the Code or other statute “spe-cially provides”. Learned President's Counsel was unable todraw our attention to any other decision either as to theapplicability of summary procedure to applications under sec-tion 282 or as to the need for the trial Judge to be prima faciesatisfied that there had been a material irregularity. He furthersubmitted that the Defendant had filed papers in the DistrictCourt on 9.1.91 in an abortive attempt to stay the sale fixedfor 19.1.91 on various grounds, but had not made this com-plaint of inadequate publication: this, he said, indicated thatthe complaint lacked merit. There was no other material in theCourt record indicating the extent of publication. The learnedtriai Judge was strongly influenced by this omission and theundoubtedly dilatory tactics adopted by the Defendant, in ref-using to issue notice.
Section 282(2) requires an applicant to notify to the Courtthe grounds, and not the particulars or evidence of such
sc
Gunaratae vs. Traaalanka Investments Ltd. and Anothe^Femando, J.j 5
grounds; it was therefore sufficient to state that adequate pub-licity had not been given. If the Court was of the view thatsufficient particulars had not been given, a direction may wellhave been given to furnish such particulars; the time limit of30 days applies only to the notification of the grounds, andnot to furnishing particulars thereof. As to whether summaryprocedure applies, in Pitche Bawa v Meera Lebbe (2), the pur-chaser applied by way of motion to confirm the sale (undersection 283); this was allowed. On appeal it was contendedthat the application should have been by petition by summaryprocedure. Lawrier-J-, held that application by motion waspermissible, but thought it would have been better by sum-mary procedure. Withers, J., however, considered the proce-dure to be correct and that summary procedure was approp-riate only in cases expressly provided for by the Code (a viewwhich he re iterated in Re Abdul Azis (3). Thus in regard tosection 283 summary procedure is not mandatory. Further,section 284 expressly provides for “a petition on summaryprocedure”, and it must be presumed that the omission of thisrequirement in section 282 was deliberate. I therefore cannotaccede to the proposition that this is mandatory for section282, There is, in my view, sufficient compliance where the peti-tion states the particular ground constituting a “materialirregularity”. A statement of the facts and circumstances(unlike section 374(d), is not required, nor does the Court haveto be satisfied that the material facts are prima facie estab-lished (unlike section 377), though it may call for further par-ticulars. The Court is not required to make an order nisi or aninterlocutory order, but only to issue notice. Even in applica-tions of summary procedure, the Court has a discretion undersection 376 to direct or permit the Petitioner to adduce oralevidence. I must mention also Silva v Selohamy, (4)t where itwas held that summary procedure was applicable under section276 – which merely provided that “no irregularity in publish-ing or conducting the sale of movable property shall vitiate thesale unless substantial damage has been caused to the personimpeaching the sale thereby". Schneider, J., observed that it
6
Sri Lanka Law Reports
[1991] 2 Sri L. R.
was not the policy of the Code to throw out applications forrelief on account of defects in pleadings, and if the trial Judgethought that particulars should have been furnished, it was hisduty to direct that particulars be submitted.
The reasons given by the learned trial Judge thus do notjustify a summary rejection of the Defendant’s application,and I would have been inclined to direct him to issue noticeand to hear and determine the application on its merits. How-ever, learned Counsel for the Purchaser has drawn our atten-tion to the following, which were matters of record; one prayerin the plaint was that the mortgaged property be sold aftersuch publication as the auctioneer considered adequate; theDefendant consented to judgement as prayed for; the decreeincluded the identical provision as to publication. Accordingly,the only grounds of complaint legitimately available to theDefendant were either that there was no publication or thatthe publication was less than that which the auctioneer (sub-jectively) considered adequate. Admittedly, some publicity wasgiven, and the Defendant’s only complaint was that, objec-tively, it was not adequate. That is a different ground alto-gether on which, by reason of the consent decree, the Defend-ant was not entitled to rely. The issue of notice wouldtherefore have been futile, for even if the Defendant provedthat there had been inadequate publicity, the sale could nothave been set aside in view of the express provision in theconsent decree; and as he bad not duly notified the groundthat there had not been such publicity as the auctioneer consi-dered adequate, he could not have been allowed to prove thatground.
I therefore dismiss the appeal. The 2nd Respondent (Pur-cnaser) will be entitled to costs in this Court in a sum of Rs.5,000/- payable by the Defendant-Appellant.
AMERASINGHE, J — I agree.
GOONEWARDENE, J — I agree.
Appeal dismissed