MASHRE9 BANK PSC
COURT OF APPEALUDALAGAMA. J.
NANAYAKKARA, J. '
C. COLOMBO 579/DRJUNE 26th, 2001
Debt Recovery Law 2 of 1990 ■ Amendment 9 of 1994 – ConditionalLeave granted – Security to be deposited – Variation of the Security atthe instance of the Defendant – Ex-parte-Audl Alteram Partem Rule
As far as possible and feasible in the interest of justice and fair playa Judge should afford an opportunity to all the parties of being heardbefore making an order or varying an existing order, if this is notdone, a Judge can leave room for allegations of bias by an affectedparty.
APPLICATION for Leave to Appeal from an Order of the District Court ofColombo.
Cases referred to :
Paulusz v. Perera – 34 NLR 438
Ramasamy Pullai v. De Silva – 12 NLR 298
Silva v. Silva – 13 NLR 87
Vantwest v. Gunawardena – 34 NLR 220
In Re M. V. Ayesha – 1986 – 1 Sri LR 314
R.A. Surendran with A. A. M. Illlyas for Plaintiff Petitioner.
S.A. Parathalingam, PC., with C. I. Liyanapatabendl for DefendantRespondent.
Cur. adv. vult.
Mashreq Bank PSC v. Arunachalam –
July 28, 2001.
NANAYAKKARA, J.The plaintiff-petitioner instituted an action against thedefendant-respondent in the District Court of Colombo underthe Debt Recovery Act No. 2 of 1990 as amended by Act No. 9 of1994 claiming, inter alia, a sum of Rs. 2,609,935.25 withinterest thereon. After the institution of the action, the learnedDistrict Judge acting in terms of the provisions of the DebtRecovery Act entered Order Nisi against the respondent, whichorder was served on the respondent. Thereafter on anapplication by the respondent praying for leave to appear andshow cause against the Order Nisi, the court after inquiry, whichwas decided on written submissions, being satisfied with theapplication of the respondent made an order on 28. 06. 2000granting conditional leave in terms of section 6 (2) para C tothe respondent, and directed him to deposit a sum of Rupees12 Million by way of security. Thereafter the respondent filedan application for leave to appeal (174/2000) in this courtagainst the said order of the District Judge praying for anInterim Order staying the operation of the order made on 28.
2000. But this application for leave to appeal (174/2000)against the order of the District Judge was refused by this courton the 18th of July 2000. Thereafter the respondent filed amotion in the District Court of Colombo, giving notice to thepetitioner, seeking relief and variation of the order made on 28.
2000 in regard to the security that the respondent wasdirected to deposit. The said motion was scheduled to come upfor support in the District Court on 24. 07. 2000. Before thismotion was taken up in court, the respondent filed anothermotion without notice to the petitioner on 21. 07. 2000 andfor some inexplicable reasons it was taken up and supportedon the same day in Chambers. The learned District Judge onthis occasion varying his own order of 28th June 2000 in regardto the security, ordered the respondent to deposit a sum of Rs.200,000/- in cash and the balance by way of deed of property.When the petitioner attended court on the day on which theearlier motion was scheduled to have been taken up, and when
Sri Lanka Law Reports
120011 3 Sri L.R.
he became aware of the variation made in the original order bythe learned District Judge on 21. 07. 2000 in respect of thesecurity, filed a motion on 24. 07. 2000 with notice to therespondent to have the said varied order in regard to securityvacated, but this application was refused by court by its orderdated 1 l,h September 2000. On refusal by the District Court toset aside the order, the petitioner filed this application for leaveto appeal seeking relief, inter alia, by way of staying the operationand the setting aside of the order made on 21st July 2000.
When this matter was taken up for hearing in this court, itwas argued by Counsel for the petitioner that the order madeby court.on 21st July 2000 varying the original order was badin law as it was done ex-parte without notice to the petitioner.Counsel also submitted that the court after having made anorder in regard to the security that was to be deposited by therespondent, the court should not have varied that order withoutthe knowledge of the petitioner. It was further argued that thecourt by altering the original order without notice to therespondent had violated the principles of Natural Justice ofaudi alterem partem. The attention of the court was also drawnto the following cases:-
Paulusz v. Perera1”,
Ramasamy Pullai u. De Silva12’,
Silva v. Silva131,
Vantwest v. Gunawardena14’.
in support of his contention.
In response to the argument advanced by Counsel for thepetitioner, Counsel for the respondent submitted that the learnedDistrict Judge had every right and authority to vary an orderwhich he had made in respect of the security, as the variationwas not one of substance but was only in regard to the mannerand mode of furnishing of security that the respondent wasdirected to deposit. It was argued further, that the learnedDistrict Judge was fully satisfied with the averments and defence
Mashreq Bank PSC u. Arunachalam .
set out in the affidavit of the respondent, and variation of theorder has not affected the petitioner in any manner.
At this stage it has become necessary to consider theappropriateness and the validity of the order made by learnedDistrict Judge in the light of the submissions made by bothcounsel in regard to this matter.
When the order made by the learned-District Judge iscarefully examined, it is true that as learned Counsel for therespondent pointed out the subsequent variation made in theoriginal order was not of substantial nature and it was only inregard to the mode of furnishing security. But it should be statedhere, that it is not so much the variation of the order that mattersbut the manner in which it was done without any notice to thepetitioner, particularly when the case was scheduled to comeup on an earlier motion filed for the same purpose. What ismost objectionable is the manner in which the variation wasmade in the order.
I am really perplexed why the learned District Judgeproceeded to make an ex parte order without the knowledge ofthe petitioner in the Chambers on the same day the motion wasfiled by the respondent praying for relief in the matter of security.
It is my considered view as far as possible and feasible inthe interest of justice and fairplay that a judge should afford anopportunity to all the parties, of being heard before making anorder or varying an existing order. If this is not done a judgecan leave room for allegations of bias by an affected party. I amof the opinion, in view of the above mentioned reasons alone,the order made by the learned District Judge should not bepermitted to stand and therefore I set aside the orders of thelearned District Judge dated 21. 07. 2000 and 11. 09. 2000and direct that the order be reconsidered with adequate noticeto the petitioner.
UDALAGAMA, J. I agree.
MASHREQ BANK PSC v. ARUNACHALAM