H. R. MUNASINGHE, Appellant, and THE PEOPLE’ S BANK, Respondent

067-NLR-NLR-V-73-H.-R.-MUNASINGHE-Appellant-and-THE-PEOPLE’-S-BANK-Respondent.pdf


H. N. O. FERNAXDO, C.J.—Munasinghe v. The People's Bank
3S5
1970 Present: H. N. G. Fernando, C.J., and Thamotheram, J.
H. R. MUNASINGHE, Appellant, and THE PEOPLE’SBANK, Respondent
S.C. 551165 (F)—D. C. Colombo, 12S9IZL
Finance Act, Ko. 11 of 1963—Application for redemption of land thereunder—Acqui-sition by People's Bank—Bight oj recourse to the Courts—Scope—Section 71 (/)and (3).
Where, in consequence of an application for redemption of land under theFinance Act Xo. 11 of 1963, tho People's Bank proposes, but has not yet decided,to acquire certain premises in terms of section 71 (1) of the Act, the person who isthe present owner of tho premises is not entitled to attempt to forestall theBank’s decision by seeking an adjudication from a Court on the question whetheror not the cose docs fall within the scope of any of tho paragraphs (a), (6), (c)and (d) of section 71 (I). –
Appeal from a judgment of the District Court, Colombo.
C. Ranganathan, QiC., with N. S. A. Goonetilleke, for the plaintiff*appellant.
II. W. Jayeuardene, Q.C., with J. A. L. Cooray, D. C. Amerasingheand Mrs. S. Gunasekera, for the defendant-respondent.
Cur. adv. vult.
July 27, 1970. H. N. G. Febxasdo, C.J.—
The plaintiff purchased the property which is the subject of this actionby a deed of 26th May 196S for a sum of Rs. 35,000. The attestationclause states that the consideration was paid as follows :—
Rs. 8,000 by a cheque in discharge of Bond No. 0S53,
by cheque for Rs. 17,700 in discharge of Bond No. 2200 and
by cash for Rs. 9,300 acknowledged to have been paid prior to the
execution of the deed.
On 2nd June 1964 the Secretary of the Land Redemption Departmentof the People’s Bank wrote a letter (P7) to the plaintiff stating that “theformer owners of the land had applied in terms of s. 71 of the FinanceAct No.ll of 1963 to redeem the premises described in appended Schedulepresently owned by you as they became dispossessed of such premisesdue to their inability to redeem a mortgage/conditional transfer to whichthe premises are subjected ”. P7 further stated that an inquiry willbe held on 12th June 1964 “ to decide whether these premises should beacquired by the Bank to bo settled on him
L XXIII—17V3 18701— 3.3M (U/70)
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H. X. O. FERXAXDO, C.J.—Mtmashighe v. The People's Bank
It appears that the plaintiff did attend the inquiry and maderepresentations that the land did not appear to bo covered by any ofthe sub-sections [a) to (d) of s. 71 (1) of the Act. Thereafter on 27thJune the plaintiff’s Proctor wrote the letter PS inquiring from the Bank" under what provision of the Act they arc seeking to acquire my client’sproperty”. To this letter the Bank replied by P9 of 1st July 1964informing the plaintiff " that the proposed acquisition of the premisescomes under s. 71 (1) (c) of the Act ”.
Sub-section (1) of s. 71 of the Act provides that th'c Bank is authorised
to acquire any premises —“ (c) if the Bank is satisfied that those
premises were transferred by the owner of those premises or his heirs,executors or administrators to any other person, at the request of amortgagee of those premises, in satisfaction or part satisfaction of adebt which was due from the original owner or his predecessor in title tothat mortgagee and which was secured by a mortgage of those premisessubsisting immediately prior to the transfer”.
On July 8, 1964, the plaintiff’s Proctor wrote to the Bank the letterP10. He there explained all the details concerning the transaction ofthe purchase of the land by the plaintiff. He emphatically stated thatthe property was not transferred to the plaintiff at the request ofany mortgagee in satisfaction or part satisfaction of a mortgage. Heexplained also that the sum of Rs. 9,300 acknowledged to have beenreceived prior to the execution of the deed represented money paid bythe plaintiff’s brother to the former owners as an advance against thepurchase price of the property, and maintained that the case did notcome within the scope of s. 71 (1) (c).- The Proctor added a request tothe Bank “ to reply early and let me know what you propose to do inthe matter
On 14th July the Bank wrote the letter PI 1 asking for some documentsreferred to in certain earlier letters (which letters are not in the record).Pll had the following postscript:—
‘‘•In reply to your letter dated 13.7.1964 and the connected letters.
There is nothing further than what was informed by the letjter from
the Bank dated 1.7.1964. ”
On 24th July 1964 the plaintiff instituted the present action seeking adeclaration inter alia that the said land and premises are not premiseswhich the Bank is authorised to acquire under the provisions of theFinance Act, and a permanent injunction restraining the Bank fromacquiring or attempting to acquire the land and premises. Paragraph 7of the plaint expressly averred that the land and premises do notfall within any of the categories of the premises which the Bank isauthorised to-acquire-under the Finance Act of 1963, and that the.Bank was wrongfully and unlawfully asserting that the premises' fallwithin, s. 71 (1) (e) of the Act.
fi. N. O. FERNANDO, C.J.—Munaexnghe v. The People's Bank
SST
The answer filed by the defendant Bank included denials of theaverments in paragraph 7 of the claim, and denied the right of theplaintiff to seek the declaration claimed in the plaint.
At the trial Counsel for the plaintiff raised the issue " do the premisesfall within the categories of premises set out in s. 71 (l)(c) of the Act?”.Counsel for the defendant raised as preliminary issues the questionswhether an}’ cause of action accrued to the plaintiff and if not whetherthe plaintiff is entitled to seek the relief prayed for.
Accordingly the learned trial Judge tried only the preliminary issues,and having regard to the decision in Singho Mahatmaya v. The LandCommissioner J, held that certiorari is the only remedy available in thecircumstances of this case. On this ground, he dismissed plaintiff’saction with costs.
Counsel for the plaintiff in appeal submitted that the decision of thisCourt upon which the trial Judge relied should be reviewed, because inhis submission the decision had not correctly construed the judgment ofthe Privy Council in The Land Commissioner v. Ladumvllu Pillai2. Imust frankly say that although I concurred in the decision in the casoreported in GC N. L. It. p. 94, there appears to be some substance inCounsel's criticism of that decision. For reasons which will presentlyappear, however, the instant case does not provide a suitable opportunityfor the review of that decision.
Counsel appearing for the Bank in appeal has maintained that in theinstant case the Bank has not yet made a determination to acquire theplaintiff’s land, ancl that the present action is premature, because theproper stage for recourse to the Courts, whether for a declaration orinjunction or an order of Certiorari, is only after there lias been a deter-mination by the Bank under sub-sect ion (3) of s.71. The Bank’s officerwho gave evidence at the trial has categorically stated that no decisionhas been taken one way or another with regard to the acquisition of theplaintiff’s land.
I am in agreement with the submission that when an application forredemption of land under the Act is made to the Bank, it is for the Bankto decide whether the land is one which the Act authorises the Bank toacquire, that is to say, whether the ease falls within the scope of any ofthe paragraphs (a), (b), (c) and (rf) of s. 71 (1) of the Act. AccordinglyI must also agree that it is not open to a person in the plaintiff’s positionto attempt to forestall the Bank’s decision by seeking an adjudicationfrom a Court on the question whether or not the case does fall within thescope of- any of these paragraphs.
The Act docs not in terms require the Bank to hold any inquiry beforereaching a determination to acquire a land; nor does the Act providethat a decision as to the applicability of s. 71 (1) in a particular case
1 {.1964) CO N. L. R. 94.» {i960) 62 N. L. R. 169
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H. N. G. FERXAXDO, C.J.—Munasinghe v. The People'* Panic
should bo reached prior to and independently of a determination toacquire the land. The only provision in the Act concerning these mattersis contained in sub-section (3) of s. 71.
“ The question whether any premises which the Bank is authorisedto acquire under this Part of this Act should or should not be acquiredshall bo determined by the Bank and every such determination of theBank shall be final and conclusive and shall not be called in questionin any Court-. ”
There are really 3 questions for decision by the Bank in the case of anapplication for redemption. The first question is whether sub-section (1)of s. 71 authorizes the Bank to acquire the land in respect of which theapplication is made. The second question is whether sub-section (2)restricts the right of the Bank to acquire the land. If the Board issatisfied that sub-section (1) authorizes the Bank to acquire the land,and if the restrictions in sub-scction (2) do not prevent the acquisition,then the third question is whether the land should be acquired ; and if theBoard decides to acquire the land, it will under sub-secti.on (3) make thedetermination accordingly. I agree with Counsel for the plaintiff thatell these questions may be decided together in the discretion of the Bank,although it would be open to the Bank'to consider at different stagesthe questions which arise.
As I have pointed out already, the Act does not state that the Bankmust hold ail inquiry and consider evidence or representations byinterested parties before making a determination under sub-section (3):Nevertheless the rules of natural justice must be observed, and thedocuments to which I have referred to indicate that these rules are beingobserved by the Bank. The plaintiff had the opportunity, and was infact able, to state the grounds upon which he urged that this case doesnot fall within the scope of s. 71 (1). In the circumstances to which Ihave referred, it is clear that in law the plaintiff resorted prematurelyto the Courts. If as stated by the Bank’s officer at the trial, no decisionhas yet been reached on the question whether sub-section (1) of s. 71applies in this case, the Court has no power to adjudicate upon thatquestion. Indeed it may well be the case that the ultimate decision onthat question which the Bank reaches may be favourable to the plaintiff.In fairness to him I should point out that it does not appear from thefirst paragraph of the Bank’s letter P7 that the applicants for theredemption of this land have claimed that the land was transferredto the plaintiff “ at the request of a mortgagee of the land ”.
Although the plaintiff’s action turns out to have been premature,the correspondence shows that he may well have been misled into thebelief that the Bank had in fact decided that sub-section (c) of s. 71 (1)did apply in this case. When the plaintiff’s Proctor fully explained in.P10 his reasons for the claims that sub-section (c) does not apply, andrequested an early reply as to the Bank’s proposed action, the Bankcategorically affirmed in the letter Pll of 14th July 1964 what had been
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previously stated in his letter of 1st July (P9) namely that “ the proposedacquisition comes under s. 71 (1) (c) Moreover even in the answersubsequently filed by the Bank there was a denial of the plaintiff’s aver-ments that paragraph (c) does not apply in this case. Even the firstletter P7 only stated that an inquiry will be held “ to decide whether thepremises should be acquired ”. While sub-section (3) of s. 71 did notrequire tho Bank to stale any further matter as being the subject of theinquiry, the matters stated in P7 may have created the impression thatthe question whether sub section (1) authorized the acquisition of theplaintiff’s land was not to be considered at the inquiry. The possibilityof such an incorrect impression being formed can perhaps be avoidedin future if the owner of land, in respect of which an application forredemption made, is more fully informed of the grounds of theapplication and of the matters to be considered by the Bank at itsinquiry.
The appeal is dismissed; but for reasons which are mentioned in theconcluding part of this judgment, the decree under appeal is alteredby the deletion of the order against tho plaintiff for costs, and I makeno order as to the costs of this appeal.
Thamothekam, J.—I agree.
Appeal dismissed.