024-NLR-NLR-V-72-M-ATHANBAWA-Appellant-and-I.-P.-BEE-BEE-Respondent.pdf
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SIRIMANE, J.—Athnmbawa v. Bee Bee
1969Present : Sirimane, J., and Samerawickrame, J.
M. ATHAMBAWA, Appellant, and I. P. BEE BEE, DespondentS. C. 27J/G6 (F)—D. C. Batticaloci, dSGSJM
JJcU'Ccncilialion Ordinance {Cap. SI), as amended by Act No. 5 of 1050—Applicationto effect a settlement thereunder—Bar of subsequent civil action—Inapplicabilityto an unsecured debt—"Debtor”—"Debt”—Sections 14 (1), 17 (c), 24 (2)(c), 26 (/), 64.
Though the term “ debt ”, according to section 04 of tho Debt ConciliationOrdinance, '* includes nil liabilities owing to a creditor in cash or kind, secured orunsecured . . section 14 (1) docs not perm it n debtor to make nn applicationto tho Board for the settlement of an unsecured debt owed to a securedcreditor.
Where n debtor makes an application to the Board for the settlement of nSecured debt, tho disclosure under section 17 (c) of nn unsecured debt due to .tho snmo creditor on a promissory noto does not have the effect of making theunsecured debt ” a mat tor pending before tho Board ” within tho meaningof section f>G so as to debar the creditor from instituting action subsequentlyin a civil court to recover tho amount of tho unsecured debt.
.A.PPEAL from a judgment of the District Court, Battiealoa.
C. Ranganathan, Q.C., with A. R. Manzoor, for the plaintiff-appellant.S. Sharvananda, for the defendant-respondent.
Cur. ode. volt.
May 17, 10G9. S humane, J.—
The plaintiff filed this action against the defendant, by way of summaryprocedure, for tho recovery of a sum of 11s. 1,500 and interest due to himon a promissory note.
The learned District Judge made order staying proceedings as he wasof the view that this matter was pending before the Debt Conciliation.Board, and in accordance wilh tho provisions of section 5G of the DebtConciliation Ordinance (Cap. SI) lie had no jurisdiction to entertain theaction.
Section 14 (1) of that Ordinance enables a debtor to “ make nnapplication to the Board to effect a settlement of the debts owed by himto all his secured creditors or any one or more of them. ”
For the purposes of this ease, it is sufficient to note that the term" debtor ” in the Ordinance as amended by Ordinance Is’o. 5 of 1959means a person
“ who has created a mortgage or charge over any immovable propertyor any part thereof”
SIRIMAXE, J.—A fhambaica i*. Bee Bee
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Though the term “debt”, according to section 64, “includes allliabilities owing to a creditor in cash or kind, secured or unsecuredI am of the view that in the context of section 14 (1) the words '‘debts
owed by him to his secured creditors” refer only to secured
debts.
I am unable to accept the argument that a debtor could, under section14 (1) make air application to the Board for the settlement of anunsecured debt owed to a secured creditor.
fn tin’s case the defendant also owed another debt to the plaintiffon a mortgage bond. The defendant could undoubtedly make an appli-cation to the Board in respect of that debt-, as in fact lie has done. 'Whensuch an application is made, section 17 (e) requires that the debtor shouldalso furnish “particulars of all debts due b}' the applicant to unsecured
creditors”. This information is obviously needed to assist the
Board in making a just and equitable ordcr in respect of the “sccureddebt. The disclosure (as in this case) under section 17 (e) of an unsecureddebt due to the same creditor does not have the effect of making thatunsecured debt, “a matter pending before the Board”. The learnedDistrict Judge, in my opinion, was wrong in taking the view thathe had no jurisdiction to entertain an action in respect of the unsecureddebt.
Unsecured debts can be reviewed by the Board only in certain instances,e.g., under section 24 (2) (c), where an application has been made by acreditor, and the debtor desires that the Board should attempt to effect asettlement between him a nd all his creditors whether secured or unsecured.The debtor in such a case must make a written request. Or again, undersection 26 (1), if, after the examination of an applicant, the Board itselfis of opinion that it is desirable to attempt to effect a settlement betweena debtor and all his creditors, whether secured or unsecured, a certainprocedure has to be followed. But the unsecured debt in the present casewas not considered under those provisions.
The appeal is allowed, and the order of the District Judge stayingproceedings is set aside.
The case is sent back to the District Court for further hearingin compliance with the provisions of chapter 53 of the Civil ProcedureCode.
The appellant is entitled to costs of this appeal.
Samerawickrame, J.—-I agree.
Appeal allowed*