023-SLLR-SLLR-2001-V-1-MOHINUDEEN-AND-ANOTHER-v.-LANKA-BANKUWA-YORK-STREET-COLOMBO-01.pdf
MOHTNUDEEN AND ANOTHER
v.
LANKA BANKUWA, YORK STREET. COLOMBO 01
SUPREME'COURTAMERASINGHE, J.
ISMAIL, J. ANDYAPA, J.
SC APPEAL (CHC) NO. 23/2000SC (HC) LA NO. 17/2000
C. CIVIL CASE NO. 5/99( 1)
16™ MARCH, 2001
Civil Procedure Code – Section 147 – Discretion of the court to try Issuesof law first – Mixed question of fact and law.
The plaintiff Bank, incorporated under the Bank of Ceylon Ordinance(Cap.302) instituted action against the defendants for the recovery of asum of Rs. 19,811,503.92. on the basis that they being directors of acompany called Mohinudeen Ltd. had guaranteed the repayment of a loan(overdraft facility) granted to the said company. At the trial, parties raised26 issues. On the motion of the defendants two of the said issues weretried as preliminary issues of law.
Issue No. 14 (read with paragraph 7(a) of the answer): whether theplaintiff had locus standi to institute legal proceedings in that nolegal person had been incorporated (in terms of the Bank of CeylonOrdinance) under the name of "Lanka Bankuwa"
Issue No. 16 (read with paragraph 7(c) of the answer): whether theplaint discloses a cause of action against the defendant in that there isno plea to say that the payment has been demanded in writing whichis a condition precedent to the payment by the guarantors. The HighCourt determined issue No. 14 in favour of the plaintiff and decidedto answer issue No. 16 at the end of the trial with the other Issues.
Held :
In view of section 9 of the 1972 Constitution which declared that thelanguage of legislation was Slnbala, the Bank of Ceylon (Amendment)Law No. 10 of 1974 (Sinhala) which referred to the Bank as “LankaBankuwa” and Article 23(1) of the 1978 Constitution which providedinter alia, that all laws shall be in Sinhala and Tamil and Article 23(4)which provided inter alia, that all laws in force Immediately prior to
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Mohtnudeen and Another v. Lanka Bankuwa,
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the commencement of the Constitution shall be published In the GazetteIn Sinhala and Tamil as expeditiously as possible, the plaintiff Bankhas the locus standi to file the action using its Sinhala name “LankaBankuwa." Further, the use of the name "Lanka Bankuwa" did notmislead the defendants. Hence there is no merit in the Is* preliminaryobjection.
In view of the averments in paragraphs 11 and 13 of the plaint that theplaintiff Bank had demanded full payment from the defendants onvarious occasions, the second preliminary issue ceased to be an issueof law only which goes to the root of the case. The question as towhether a demand was made in writing or not could be determinedonly after evidence has been presented.
Per Hector Yapa. J.
“section 147 of the Civil Procedure Code gives a wide discretion
to the trial Judge, so that even if he has decided earlier to try an issue as
a preliminary issue of law, it is open to him to decide such an issue later,
if he is of the view that it cannot be decided without taking evidence.”
Cases referred to :
L.B. Finance Ltd. v. Manchanayake (2000) 2 Sri L.R. 142 (C.A.)
Muthukrishna v. Gomes (1994) 3 Sri L.R. 01
Pure Beverages Ltd. v. Shantl Fernando (1997) 3 Sri L.R. 202 (C.A.)
APPEAL from the judgement of the High Court.
Romesh de Silva, PC. with Palitha Kumarasinghe for appellants.
N.S.A. Gunatillake, EC. with N. Mahendra for respondent.
Cur. adv. vult.
May 15, 2001HECTOR YAPA, J.
The plaintiff, a banking corporation duly incorporatedunder the Bank of Ceylon Ordinance (Cap. 302) instituted actionagainst the 1st and 2nd defendants for the recovery of a sum ofRs. 19,811,503.92 together with Interest thereon, on the basisthat the aforesaid defendants who are the directors of a companycalled M.M. Mohlnudeen Limited had guaranteed the repayment
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of a loan (overdraft facility) granted to the said company. At thecommencement of the trial issues 1-13 were raised on behalfof the plaintiff and issues 14 – 26 on behalf of the defendants.Thereafter the defendants moved that the following issues,namely, issue No. 14 and issue No. 16 be tried as preliminaryissues of law. The said issues are as follows:-
Issue No. 14 : For the reasons set out in paragraph 7 (a) ofthe answer, can the plaintiff have and maintainthis action as presently constituted?
In paragraph 7(a) of the answer, defendants pleaded that theplaintiff has no locus standi to institute proceedings In that nolegal person has been Incorporated under the name “LankaBankuwa.”
Issue No. 16 : Can the plaintiff have and maintain this action,for the reasons set out in paragraph 7(c) of theanswer?
In paragraph 7(c) of the answer the defendants pleadedthat in any event, the plaint does not disclose a cause of actionagainst the defendants in that there is no plea to say that thepayment has been demanded in writing which is a conditionprecedent to the payment by the guarantors under thepurported guarantee and/or an essential Ingredient of the allegedcause of action against these defendants.
After considering the submissions of Counsel for the plaintiffand the defendants, on 21.07.2000, the learned High CourtJudge made the following order in regard to the said preliminaryissues. With regard to issue No. 14, the High Court Judgeobserved that use of the name “Lanka Bankuwa” had not ledto any doubt or misconception in the mind of any person in SriLanka that the “Bank of Ceylon” is also known in Slnhala as“Lanka Bankuwa” and the translation of a name is permissibleand cited as an example the name, Mt. Lavlnia in English whichis called “Galkissa” in Slnhala. He further observed that no one
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Mohtnudeen and Another a Lanka Bankuwa,
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is misled by the use of the Slnhala name Lanka Bankuwa andespecially the defendants who would have received bankstatements and other documents from the Bank of Ceylon onthe letter-heads giving the name of the Bank in Sinhala as“Lanka Bankuwa.” Hence, the learned High Court Judge heldthat this objection taken by the defendants is without meritand answered the issue No. 14 in favour of the plaintiff. Withregard to the issue No. 16 the High Court- Judge decided toanswer it at the end of the trial together with the other issues,since according to paragraph 11 of the plaint the plaintiff bankhas demanded from the defendants that the money be paidback even though there is no specific mention as to the mannerof demand.
The defendants have now preferred an appeal to this Courtfrom the said order of the learned High Court Judge made inrespect of the two issues referred to above. When the applicationfor special leave was supported on 20.11.2000, this Courthaving considered the submissions made on behalf of thedefendants-appellants, granted leave to appeal with respect tothe following questions
Did the learned Judge of the High Court err in holding thatthe Bank of Ceylon had locus standi to file this action becauseno one is misled by the use of the Sinhala name LankaBankuwa and especially the defendant who would havereceived his bank statements and other documents fromthe Bank of Ceylon on letter heads from the Bank of Ceylongiving the name of the Bank of Ceylon in Sinhala as LankaBankuwa?
Did the learned Judge of the High Court err in deciding tohear the question as to whether there had been compliancewith the agreement with regard to the manner and natureof the demand, at the end of the trial, after deciding to takeup the matter as a preliminary issue?
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At the hearing before us learned President’s Counsel forthe defendants-appellants submitted that an institution calledthe Bank of Ceylon was created by the Bank of CeylonOrdinance. That Sections 2 and 3 of the said Ordinanceprovided that a bank to be called the Bank of Ceylon is herebyestablished (Section 2) and the bank shall be a body corporatewith perpetual succession and a common seal and may sueand be sued in its corporate name. (Section 3) Learned Counselfurther submitted that Sections 2 and 3 of the Bank of CeylonOrdinance, No. 53 of 1938, has not been amended or replacedwith a Sinhala translation and therefore, the incorporated nameBank of Ceylon has not been changed to any other name or toits literal translation in Sinhala. Thus the Institution establishedby the said Ordinance continues to be the Bank of Ceylon andno other. Hence learned Counsel argued that the legislature hasnot permitted any translation, abbreviation or any otherconvenient name instead of the corporate name for the purposeof litigation and therefore all actions by the Bank of Ceylonshould be in its corporate name i. e. Bank of Ceylon and noother name. Accordingly learned Counsel contended that anyproceedings instituted under the name of “Lanka Bankuwa” aname other than the corporate name given in the enactment isbad in law.
There is no doubt that the legislature by the Bank of CeylonOrdinance has created a body corporate called the “Bank ofCeylon” which is empowered to carry on the business of bankingwith the right to sue and be sued in its corporate name.Therefore, when the plaint is filed in Sinhala on behalf of theinstitution called the Bank of Ceylon, it would be fair and logicalto use the name “Lanka Bankuwa” the term used in Sinhala bythe Bank of Ceylon itself. Besides, the Bank of Ceylon over theyears has continued to use the term “Lanka Bankuwa” in theirdealings with the public and today the term “Lanka Bankuwa"is synonymous with the term Bank of Ceylon. Hence it wouldappear that the learned High Court Judge has correctly heldthat the Bank of Ceylon has the locus standi to file actions usingthe Sinhala name of the Bank of Ceylon namely the Lanka
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Mohlnudeen and Another u. Lanka Bankuwa.
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Bankuwa. Besides, the appellants would have received theirhank statements and other documents from the Bank of Ceylonon the letter heads giving the name of the Bank of Ceylon inSinhala as Lanka Bankuwa and therefore there is no questionof the appellants or any one else for that matter being misledthat the reference was not to the Bank of Ceylon.
Flirther as submitted by learned President’s Counsel forthe plaintiff-respondent the language of legislation under the1972 Constitution was Sinhala and there had to be a Tamiltranslation of every law so enacted or made (Vide Section 9).Hence the Sinhala statute of the Bank of Ceylon (Amendment)Law, No. 10 of 1974, has referred to the Bank of Ceylon asLanka Bankuwa. The said amendment law while repealingseveral sections of the Bank of Ceylon Ordinance has substitutednew sections In their place. The Sinhala version of the saidamendment Law, No. 10 of 1974 refers to the Bank of Ceylonas the Lanka Bankuwa which is a clear Indication that thelegislature has recognized that the corporate name of the Bankof Ceylon in Sinhala would be the Lanka Bankuwa. It is alsorelevant to note that Article 23 of the present 1978 Constitutionhas made the following provisions regard to the language oflegislation.
23. (1) All laws and subordinate legislation shall be enacted ormade, and published. In Sinhala and Tamil, together witha translation thereof In English:
Provided that Parliament shall, at the stage of enactment ofany law determine which text shall prevail In the event ofany Inconsistency between the texts.
Provided further that In respect of all other written lawsand the text in which such written laws was enacted oradopted or made, shall prevail in the event of anyInconsistency between such texts :
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All Orders, Proclamations, rules, by-laws, regulations andnotifications made or Issued under any written law otherthan by a Provincial Council or a local authority, and theGazette shall be published In Sinhala and Tamil togetherwith a translation thereof in English.
All Orders, Proclamations, rules, by-laws, regulations andnotifications made or issued under any written law by anyProvincial Council or local authority, and all documents,including circulars and forms issued by such body or anypublic institution shall be published in the Language usedin the administration in the respective areas in which theyfunction, together with a translation thereof in English.
All laws and subordinate legislation in force immediatelyprior to the commencement of the Constitution, shall bepublished in the Gazette in the Sinhala and Tamil Languageas expeditiously as possible.
Section 10 of the 1972 Constitution also contained similarprovisions. Having regard to these provisions contained in the1972 and 1978 Constitutions, the Bank of Ceylon (Amendment)Law, No. 10 of 1974 enacted in Sinhala should be given dueweight, since it was provided in the 1972 Constitution that thelaw published in Sinhala shall be deemed to be the law whichsupersedes the corresponding law in English. (Vide Section10(3)). Further as referred to above Sinhala was the languageof legislation under the 1972 Constitution. The 1978Constitution provided that all laws be enacted and publishedin Sinhala and Tamil, together with a translation in Englishand in the event of any inconsistency between such texts, thetext in which such written laws was enacted shall prevail.Therefore even though the Bank of Ceylon Ordinance has notbeen translated into Sinhala or Tamil, it is clear that in view ofthe Bank of Ceylon (Amendment) Law, No. 10 of 1974 enactedin Sinhala, the Lanka Bankuwa referred to in that law was noneother than the Bank of Ceylon. Under these circumstances therecan be no doubt that the Bank of Ceylon has the locus standi
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to file this action using its Slnhala name Lanka Bankuwa.Besides it should be re-iterated that the defendants-appellantshave not been misled to think that the Lanka Bankuwa is notthe Bank of Ceylon. Hence, I see no merit in this objection raisedby the learned Counsel for defendants-appellants andaccordingly it should fail.
The other question to be considered here is whether thelearned High Court Judge was correct in deciding to considerthe issue No. 16 at the end of the trial, after having decidedearlier to take it as a preliminary issue. According to learnedCounsel for the defendants-appellants a demand in writing wasan essential ingredient of the cause of action and the failure ofthe respondent bank to plead in the plaint such a demand inwriting was fatal. In support of this proposition he cited thecase of L.B. Finance Ltd. Vs. Manchanayake111 where the Courtof Appeal held that there ought to be an averment in the plaintthat the demand was made (consequent to such termination)and that such demand was not honoured. Therefore Counselargued that since the plaintiff-respondent has not pleaded inthe plaint that payment had been demanded in writing, it wasincumbent on the part of the High Court Judge to have decidedthe issue No. 16 as a preliminary issue of law. Hence Counselsubmitted that the learned High Court Judge has erred inholding that the said issue could be considered at the end ofthe trial.
In this case, one cannot overlook the fact that the HighCourt Judge decided to postpone the determination of the saidissue at the end of the trial with other issues for a good reason,namely, that in paragraph 11 of the plaint, it has been pleadedthat the plaintiff bank has demanded from the defendants thatthe money be paid back even though the manner of suchdemand has not been specifically mentioned. It is the demandthat is material and the writing may be one form in which sucha demand can be made and that is a matter of evidence as towhether such a demand was made orally or in writing. In thecase of L.B. Finance Ltd. Vs. Manchanayake (supra) which
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was cited by learned Counsel for the defendants-appellants, theplaintiff had not pleaded the demand at all and accordingly theCourt held that the plaintiff’s action was bad in law. In thepresent case, however, it has been clearly stated in the plaintthat the demand had been made by the plaintiff-respondent.Fhrther it is to be observed that in paragraph 13 of the plaint, ithas been pleaded that “in terms of the guarantee bond dated14.02.1985, despite the plaintiff bank having demanded fullpayment from the defendants on various occasions, they havefailed and defaulted in payment.” When paragraph 13 of theplaint stated that the plaintiff bank “in terms of the guaranteebond” demanded payment from the defendants, it is more likelythat such demand was made in wridng. Anyway, the avermentscontained in paragraphs 11 and 13 of the plaint, is indicativeof the fact that the plaintiff bank had demanded payment fromthe defendants. Whether it was in writing or not is a matter ofevidence and it is clearly a question of fact to be decided at theend of the trial. On this matter as to how the demand was made,it would appear that the parties are at variance.
In relation to this question it is worth considering theprovisions contained in section 147 of the Civil Procedure Code.This section provides as follows:-
“When issues both of law and of fact arise in the same action,and the court is of opinion that the case may be disposed ofon the issues of law only, it shall try those issues first, andfor that purpose may, if it thinks fit, postpone the settlementof the issues of fact until after the issues of law have beendetermined.”
It would appear from this section that a discretion hasbeen vested in the Court to try the issues of law first, if the Courtis of the opinion that the case may be disposed of on the issuesof law only. In the case of Muthukrtshna Vs. Gomes121 it washeld that under section 147 of the Civil Procedure Code for acase to be disposed of on a preliminary issue, it should be apure question of law which goes to the root of the case. In that
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case it was observed by Wijeyaratne, J. that ‘Judges of originalcourts should, as far as practicable, go through the entire trialand answer all the issues unless they are certain that a purequestion of law without the leading of evidence (apart fromformal evidence) can dispose of the case.”
In the case of Pure Beverages Ltd. Vs. Shanil Fernando{3]It was held that if an issue of law arises in relation to a fact orfactual position in regard to which parties are at variance, thatissue cannot and ought not to be tried first as a preliminaryissue of law. In that case Gunawardena, J. made the followingobservation. “It also needs to be stressed that in a trial of anaction the question as to how or in what manner the issueshave to be dealt with or tried is primarily a matter best left tothe discretion of the trial Judge, and a Court exercising appellateor revisionary powers ought to be slow to interfere with thatdiscretion except perhaps, in a case where it is patent or obviousthat the discretion has been exercised by the tried Judge notaccording to reason but according to caprice.”
In the present case the question as to whether a demandwas made in writing or not could be determined only after theevidence has been presented. Further it is a question of fact inregard to which the parties appear to be at variance. Hence itwould cause serious prejudice to the plaintiff bank if the saidissue No. 16 is tried as a preliminary issue without permittingevidence to be led on the matter. As observed above section 147of the Civil Procedure Code gives a wide discretion to the trialJudge, so that even if he has decided earlier to try an issue as apreliminary issue of law, it is open to him to decide such anissue later, if he is of the view that it cannot be decided withouttaking evidence. Having regard to the circumstances of this case,undoubtedly serious prejudice would have been caused to theplaintiff bank if the said issue No. 16, was tried as a preliminaryissue of law without permitting evidence to be led on the matter.Besides it is now clear that the said issue is not purely an issueof law. Thus the learned High Court Judge was correct indeciding to answer the said issue at the end of the trial.
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For the aforesaid reasons, the two questions of law areanswered In the negative. Accordingly the appeal Is dismissedwith costs fixed at Rs. 5,000/=.
AMERASINGHE, J.- I agree.
ISMAIL, J.- 1 agree.
Appeal dismissed.