088-NLR-NLR-V-69-M.-A.-M.-SALIM-and-others-Appellants-and-THE-CHARTERED-BANK-COLOMBO-Respond.pdf
ABEYESUNDERE, J.—Salim v. Chartered Bank
427
1967 Present: Abeyesundere, J., and Siva Supramaniam, J.
M. A. M. SALIM and others, Appellants, and THE CHARTEREDBANK, COLOMBO, Respondent
S. C. 646/64—D. C. Colombo, 1104/Spl.
Debt Conciliation Ordinance—Application thereunder—Settlement for sum greater thantwice the amount of principal—Decree absolute in terms of such settlement—Invalidity—Right of appeal to Supreme Court—Sections 33 (6), 43, 44.
The prohibition of an appeal to the Supreme Court contained in the provisoto section 44 (2) of the Debt Conciliation Ordinance does not apply to a decreeabsolute which a District Court purports to enter in terms of section 44 (1) ofthe Ordinance in respect of a settlement under which the creditor i3 allowed agreater amount in satisfaction of both principal and interest due to him thantwice the amount of such principal. Such a settlement contravenes theprovisions of section 33 (6) and cannot be regarded as a settlement underthe Ordinance.
A PREAL against a decree entered by the District Court, Colombo.
H. V. Perera, Q.C., with Hanan Ismail, for the debtors-appellanta.
H. W. Jayewardene, Q.C., with S. J. Kadirgamar and S. S. Basnayake,for the creditor-respondent. •
March 8, 1967. Abeyesundere, J.— .
The appellants in this case made an application to the Debt ConciliationBoard under the Debt Conciliation Ordinance for a settlement of a debtof Rs. 90,270/69 and interest accrued thereon which they owed to therespondent. Upon that application the respondent who was the creditorand the appellants who were the debtors were served with the requisitenotice by the Debt Conciliation Board and after hearing the parties tothe application the Debt Conciliation Board recorded an amicable settle-ment which the respondent entered into with the appellants. Thereafterthe appellants defaulted in complying with the terms of the settlement.Thereupon the respondent made an application under section 43 of theDebt Conciliation Ordinance to the District Court of Colombo for adecree in favour of the respondent in terms of the settlement. TheDistrict Court entered decree nisi upon such application. After inquiringinto whether or not the decree nisi should be made absolute, the DistrictCourt made order on 21st October, 1964, making the decree nisi absolute.The appellants have appealed from that order.
Mr. H. W. Jayewardene, Q.C., appearing for the respondent, raised theobjection'that there was no right of appeal in view of the provisions of theproviso to sub-section (2) of section 44 of the Debt Conciliation Ordinance.That proviso states that no appeal from, or application for revision of, adecree nisi made absolute under sub-section (1) of section 44 shall lie to
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ABEYESUNDERE, J.—Salim v. Chartered Bank
the Supreme Court. Mr. H. V. Perera, Q.C., appearing for the appellants,submitted that the aforesaid proviso applied only to a decree absoluteentered in respect of a settlement under the Debt Conciliation Ordinanceand that the expression “ settlement under the Debt ConciliationOrdinance ” meant a settlement in accordance with the provisions ofthat Ordinance. He stated that the amount allowed in the settlement in theinstant case to the creditor in satisfaction of both principal and interestdue to him was in excess of the maximum amount permitted by section33 (6) of the Debt Conciliation Ordinance. That section provides that inany settlement under that Ordinance no creditor shall be allowed agreater amount in satisfaction of both principal and interest due to himthan twice the amount of such principal. The settlement in this casestates that it is agreed that a sum of Rs. 192,892/45 is due to the creditorup to 31st October, 1962, and then sets out the manner in which thatamount shall be paid by the debtors. It is also indicated in the settle-ment that the principal debt is Rs. 90,420/69 due on mortgage bondNo. 459 dated 7th June, 1954. The principal that was due to therespondent from the appellants was Rs. 90,420/69 and the maximum thatthe respondent could have been allowed in a settlement under the DebtConciliation Ordinance, in accordance with the provisions of section 33(6)of that Ordinance, in satisfaction of the principal and interest due to himwas Rs. 180,841/38, but in the settlement the respondent is allowedRs. 192,892/45. The settlement is therefore in contravention of section33 (6) of the Debt Conciliation Ordinance. Consequently we hold thatthe settlement is not a settlement under the Debt Conciliation Ordinance.
A decree nisi under section 43 of the Debt Conciliation Ordinance mustbe in terms of a settlement under that Ordinance. The settlement in theinstant case is held by us to be not a settlement under the Debt Concilia-tion Ordinance. The learned District Judge could not therefore haveentered a decree nisi under section 43. An appeal from, or an applicationfor revision of, a decree nisi entered in terms of a settlement under theDebt Conciliation Ordinance and made absolute does not lie to theSupreme Court. As the decree nisi made absolute in the instant case isin terms of a settlement which we hold is not a settlement under the DebtConciliation Ordinance, the prohibition of appeal contained in the provisoto sub-section (2) of section 44 of that Ordinance does not apply to thedecree from which the appeal before us is made. A statutory provisiondisallowing the right of appeal must be strictly interpreted. We holdthat the appellants have a right of appeal.
Mr. H. W. Jayewardene, Q.C., submitted that, if it is held that thesettlement provides as the amount due to the respondent a sum which isin excess of the maximum permitted by section 33 (6) of the DebtConciliation jOrdinance, the settlement maybe held to be valid in so far asthe amount specified therein less the impeached excess is concerned andthat this Court may permit a decree to be entered in terms of the settle-ment treating the amount due to the respondent as being the amount
Fernando v. Fernando
429
stated in the settlement minus the impeached excess. If the learnedDistrict Judge is called upon to enter a decree nisi in accordance with thesubmission of Mr. Jayewardene, the learned District Judge will have toenter a decree nisi not in terms of the settlement between the creditorand the debtors but in terms of a settlement varied by him. Section 43of the Debt Conciliation Ordinance requires the decree nisi to be in termsof the settlement entered into by the creditor and the debtors. Wetherefore hold that Mr. Jayewardene’s submission that the settlement betreated as valid up to the amount permitted by section 33 (6) of theDebt Conciliation Ordinance cannot be upheld.
For the aforesaid reasons we set aside the decree nisi made absolute by(he learned District Judge and dismiss with costs the respondent’sapplication to the District Court for the enforcement of the settlement.
The appellants are entitled to their costs of the appeal.
Siva Supra maniam, J.—I agree.
Appeal allowed.