048-SLLR-SLLR-2006-V-3-OFFICER-IN-CHARGE-CID-vs.-SORIS.pdf
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Officer in Charge, CID vs.Soris
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OFFICER IN CHARGE, CIDVS.SORISSUPREME COURT,
JAYASINGHE. J.
TILAKAWARDANE.J.
UDALAGAMA. J.
SC 52/05.
SC SPL LA 90/05.
CALA (PHC) APN 185/04.
HC BADULLA REV 57/04.
MC BANDARAWELA 236415.
Debt Recovery (Special Provisions) Act, No. 2 of 1990 amended by Act,No. 9 of 1994- Sections 24, 25, 26 -Applicability- Cheques drawn in favourof person other than a lending institution -Can the construction of a statutebe limited by its title- Public Property Act – Lending institution?-Debt?-Anyperson?-Language not ambiguous? – Unreasonable interpretation-intention of the legislature
The respondent-petitioner filed reports in the Magistrate’s Courtalleging that the accused had committed an offence under the PublicProperty Act, in that he issued Cheques without sufficient funds to the Co-operative Society. He was charged in terms of Section 25 of the DebtRecovery Act (DR Act). An objection was raised that the facts disclosed donot warrant presenting a charge in terms of Section 25-DR Act. Theobjection was overruled, and the High Court affirmed the said order of theMagistrate's Court. The High Court in appeal refused to issue notice,holding that it is an offence to draw a cheque without funds or withinsufficient funds and that the nature of the person in whose favour thecheque is drawn is immaterial for a presentation under Section 25 of DRAct. The Court of Appeal acting in revision delivered its order holding thatthe 'Society' does not fall within the interpretation of a ‘lending institution'and held further that the provisions of the Act can be invoked only in relationto transactions involving lending institutions and those that are conductedin the course of recovery of debts.
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In appeal it was contended that the provisions of Part 1 of the Act isnot applicable for a prosecution under Section 25 (I), and where a chequeis drawn in favour of any person or an institution Section 25 (I) is applicable
HELD:
Per Nihal Jayasinghe.J and Udalagama. J
Section 25 (1) is self contained and exists devoid of any ambiguityand given effect to , without resorting to any other provision, andinstitution of an action in Part 1 of the DR Act has no relevancewhatsoever to a prosecution under Section 25. When a cheque isdrawn in favour of any person or institution in terms of Section25 (1) DR Law is applicable.
The construction of any statute cannot be limited by its title, thetrue nature of the law is to be determined not by the name given toit or by its form but by its substance. Where the language of theenactment is clear, its construction cannot be affected in any wayby the consideration of the title of the Act.
The long title of an Act is looked at only to help resolve an ambiguityand may not be looked at to modify the interpretation of plainlanguage.
Per Shiranee Tilakawardane. J (dissenting) :
“I am reticent to accept that “any person" adverted to in Section 25, ofthe Act expands the offence to all persons who would dishonour a cheque,even between private parties”.
It is an unreasonable interpretation to accept that the legislatureintended to confine civil liability to those transactions with lendinginstitutions but to give a wider and expansive criminal liability toinclude ‘all persons'; in the application of the criminal liabilityenvisaged under the said Act as amended.
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The provisions of the DR Act were specially enacted to regulate andrecover debts that were over due to lending institutions and was aspecial procedure for regulating the recovery of debts by lendinginstitutions.
A simple reading of the Act as well as the Bill show that the word“debt” had a specific meaning in terms of the DR Act. It was amendedto give a limited meaning to the word “debt” which was confined tolending Institutions and not to all monetary transactions.
Even if one need not refer to the long title of the Act in its interpretation,in interpreting the provisions of a statute the intention of the legislaturehas to b.e gathered not only from the preamble to the Act but alsothrough the other related provisions of the Act itself and moreparticularly, when the subject matter dealt with is under differentchapters or part of the same statute”.
Per Shiranee Tilakawardane. J :
“I am reticent to give Section 25 such a wide or unrestricted meaningon the purposive interpretation of the Act which was for the purpose ofaffirmatively supporting the lending institutions to recover bad debts. Itis my opinion that to give such a wide meaning to those provisionsgoes beyond the spirit, scope and ambit of the Act. It is also my opinionthat the intention of the legislature was clearly to assist the lendinginstitutions to have a more effective recovery procedure and to deal withsuch defaulters who committed offences under the Act and was speciallyenacted to assist lending institutions dealing with defaulters".
Casereferred to :
Re Wykes R vs. Wilkes (1769) 4 Burr. 2527
Mahijibahai Mohanbahai Barot v Patel Manibahai AIR 1965
SC 1477.
APPEAL from a judgment of the Court of Appeal.
Buwaneka Aluvihare DSG for appellant
H.G. Hussain for accused-petitioner-respondent
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October 12, 2005NIH AL JAYASINGHE. J
• The Respondent-Petitioners filed reports in the Magistrate’s Court ofBandarawela alleging that the accused had committed an offence underthe Public Property Act, in that the Petitioner-Respondent issuedcheques to the value of Rs. 4.6 Million without sufficient funds toUdapalatha Multipurpose Co-operative Society. The said cheques hadbeen issued by the accused as payment for the purchase of seedpotatoes and the said cheques had been dishonoured. The Respondent-Petitioners having obtained advice from the Attorney -General filedcharges in terms of section 25 of the Debt Recovery Act No.2 of 1990as amended. When the matter came up for trial before the Magistrate,a preliminary objection was raised on behalf of the accused that theaction filed by the Respondent-Petitioners cannot be maintained andmoved for the discharge of the accused from further proceedings. Itwas urged on behalf of the accused that the facts disclosed, does notwarrant presenting a charge in terms of Section 25 of the Debt RecoveryAct.
After hearing submissions, the learned Magistrate overruled theobjection and accordingly fixed the trial for 11.6.2004. Aggrieved bythe said order of the learned Magistrate, the accused invoked therevisionary jurisdiction of the Provincial High Court of Uva Province tohave the said order of the learned Magistrate set aside. The learnedHigh Court Judge after hearing submissions refused notice. TheRespondent-Petitioners submit that whilst refusing to issue notice,the learned High Court Judge held that in terms of Section 25 (1) (a) ofthe Debt Recovery Act, it is an offence to draw a cheque without fundsor with insufficient funds and that the “nature’’ of the person in whosefavour the cheque was drawn is immaterial for a prosecution underthat Section. Aggrieved by the said order of the learned High CourtJudge, the accused invoked the revisionary jurisdiction of the Court ofAppeal. On 01.4 .2005, the Court of Appeal delivered order holdingthat Udapalatha MPCS does not fall within the interpretation of a “lendinginstitution' and held further that the provisions of the Act can be invokedonly in relation to transactions involving lending institutions and those
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that are conducted in the course of recovery of debts. The Court ofAppeal also specifically held that Udapalatha MPQS does not fall withinthe interpretation of the meaning of “institution of action” and thereforehas no relevance to prosecutions instituted in terms of the provisionsof the Act
Aggrieved by this order, the Respondent-Petitioners filed SpecialLeave to Appeal and the Court after hearing submissions granted leaveon the following questions of law:
Where an offence has been committed in terms of Section 25of the Debt Recovery Act, are the provisions of Part I of thesaid Act applicable ?
Where, a cheque is drawn in favour of any person oran institution, is Section 25 (I) of the Debt Recovery Actapplicable ?
Mr. Buvaneka Aluwihare, D. S. G., submitted that the DebtRecovery Act contained five parts and that the 1 st to 4th parts referredto the recovery procedure in respect of -moneys lent and advanced bylending institutions and that Part 5 constitutes criminal responsibilityin respect of “any person" who knowingly draws up a cheque which isdishonoured by a bank for want of funds. Learned Deputy SolicitorGeneral further submitted that the long title ought not to be lookedinto if the section is unambiguous and clear and submitted that thereis no ambiguity as set out in Part 5, section 25(1) (a) where criminalresponsibility is cast on any person who transacts business with anyinstitution or person and that if it was within the contemplation of thelegislature that “person” should include only those transactions orfinancial business with a lending institution, Section 25(1 )(a) wouldhave made it clear and in unambiguous terms that the personcontemplated in section 25(1 )(a) is only a person who has transactionswith a lending institution. Learned Deputy Solicitor General went on tosubmit that there is no link between Parts I to 4 and Part 5 and thatPart 5 stands alone, and that the sole purpose of Part 5 is to visitcriminal liability on a person who knowingly draws a cheque which isdishonoured by a bank for want of funds.
2 – CM 008439
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Learned Deputy Solicitor General also referred to Interpretationof Statutes by Bindra (9th Edition, page 38), where it is stated that“The construction of the statute cannot be limited by its title. The truenature of the law is to be determined not by the name given to it or byits form, but by its substance, where the language of the enactment isclear, its construction cannot be affected in any way by theconsideration of the title of the Act.” Thus Section 25 of the Act isclearly not ambiguous. It is further stated in the same book “if thelanguage of the Act is plain, Courts cannot refuse to give effect to itgenerally because it happens to go beyond the matters mentioned inthe title". When there is no doubt as to the construction to be put uponthe words of a section, Court cannot limit it’s construction because ofthe Title of the Act, though the said construction clearly exceeds thescope of both the title and the preamble.
Buckley J in the case of Re-Wykes<1> declared, “The long title ofan Act is looked at only to help resolve an ambiguity and may not belooked at to modify the interpretation of plain language.’
It is significant to note that section 25 is placed under the heading“Miscellaneous”. In the case of Mahijibahai Mohanbahai V. PatelManibahaP> the Indian Supreme Court held “The placing of a particularsection in a part of the Code dealing with a specific subject mattermay support the contention that, that section deals with a part of thesubject dealt with by that part, but that cannot be said when a particularsection appears under a part dealing with Miscellaneous matters. Thepart under the heading “Miscellaneous” indicates that the section inthat part cannot be allocated wholly to a part dealing with a specificsubject, for the reason that the section entirely falls outside the otherpart or for the reason that they cannot entirely fall within a particularpart.”
Mr. Hussain for the accused submitted that section 25 appliesonly in situations where transactions are between lending institutionsand a “person” and section 25 has no application in respect oftransactions entered into between two private persons or “a person”which is not a lending institution. Mr. Hussain submitted that if onelooks at the definition of “debt”, it clearly envisages an instance where
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money had been obtained from a lending institution and not from anyother source. Mr. Hussain sought to give a very restricted interpretationto the application of section 25(1) and confines the said provisions toan ambit where the transactions were purely between a borrower anda lending institution. He submitted that Act No. 2 of 1990 was broughtin to speedily recover money by lending institutions and to punishthose who defrauded lending institutions and not to deal withtransactions between persons or institutions outside the scope of theAct. He submits further that “any person” should be understood andinterpreted (in helping) with the spirit of the Act and not independentlyas used in common parlance; that section 25 framed underMiscellaneous deals with officers and officer referred to therein normallyrelated to transactions referred to in the statute and not to transactionsoutside the scope of the statute and that the person should beunderstood in that spirit.
We have considered the submissions of the learned DeputySolicitor General and Mr. Hussain. We are of the view that section 25(1 )(a) is self-contained and exists devoid of any ambiguity and giveneffect to, without resorting to any other provision. We are also of theview that “institution of an action” in Part I of the Debt Recovery Acthas no relevance whatsoever to a prosecution instituted under section25 (1) of the Act. We, accordingly, are mindful of the fact that theDebt Recovery Act as amended, was necessitated by the expansionof commercial transactions and that a prosecution under the normallaw was highly time consuming and protracted.
We accordingly answer, question (1) as follows: that theprovisions of Part I of the Act is not applicable for a prosecution undersection 25 (I) of the Act. We also hold that in respect of the 2nd questionof law, the cheque drawn in favour of any person or institution in section25 (I) of the Debt Recovery Act is applicable in respect of therespondents. We accordingly allow the appeal and set aside the orderof the Court of Appeal dated 30.3.2005. No costs.
UDALAGAMA J -1 agree.
Appeal allowed.
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Shiranee Tilakawardane, J (Dissenting)I have had the privilege of listening to the Judgment dictated by mybrother Judges but respectfully have to dictate a differing opinion. I willnot deal with the facts, which have been succinctly set out by mybrother Judges. Also since this is a dictated judgment I wish to dealwith the matter only in a summary and concise manner. Partiesconceded that the essence of the case dealt with the recovery ofmoneys between two parties namely the Udapalatha MultipurposeCorporative Society on the one hand and the accused-petitioner onthe other in a sum of Rs. 5,467,100 Million (approximately Rs. 5.4Million) which had arisen as a result of the dishonoring of severalcheques.
At the outset of his argument, learned Deputy Solicitor Generalunequivocally and specifically stated that he conceded that the chargespertained to a transaction between two persons, and did not involve arecovery by a lending institution. The charge which had been preferredagainst the accused-petitioner-petitioner-respondent, on specific advicegiven by the Attorney-General was under Section 25 (1) (a) of the DebtRecovery (Special Provisions) Act No.2 of 1990 as amended by ActNo. 9 of 1994.
Special leave was granted on 19.7.2005 on the following questionsof law:-
The matter to be determined is whether the charge under section25 (1) (a) which had been preferred against the accused-respondentcould be extended to include a situation where the drawee of the chequeis not a lending institution.
The provisions of the Debt Recovery Act No. 2 of 1990 werespecially enacted to regulate and recover debts that were overdue tolending institutions and was a special procedure for regulating therecovery of debts by lending institutions. Even though the learnedDeputy Solicitor General argued that one need not refer to a long titleof an Act in its interpretation, in interpreting the provisions of a statutethe intention of the legislature has to be gathered not only from the
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preamble to the Act but also through the other related provisions in theAct itself and more particularly, when the subject matter dealt with isunder different chapters or parts of the same statute.
In considering the nature of the recovery of the debt that isenvisaged under the Act, it is set out with clarity and defined undersection 21 of the amending Act No. 9 of 1994 in the following manner:-
“debt” means a sum of money which is ascertained or capable ofbeing ascertained at the time of the institution of the action, and whichis in default, whether the same be secured or not, or owed by anyperson or persons, jointly or severally or as principal borrower orguarantor or in any other capacity, ,and alleged by a lending institutionto have arisen, from a transaction in the course of banking, lending,financial or other alleged business activity of that institution, but doesnot include a sum of money owed under a promise or agreement whichis not in writing;”
Whilst it is clear that according to the provisions of the aforesaidAct, recovery procedures for the recovery of a debt, are only availableto lending institutions, the question that arises for determination, inmy view is whether the penal consequences and the creation of anoffence in terms of section 25(1) extends beyond a cheque that hasbeen dishonored to a lending institution.
It appears that all parties to this case are in agreement that theprovisions relating to recovery of a debt are confined to debts that areowed only to lending institutions. This procedure therefore replacedthe existing recovery procedure under the Civil Procedure Code.
Clearly therefore the provisions relating to Debt Recovery in thesaid Act are confined to recovery of loans by lending institutions
A simple reading of the Act as well as the Bill which has beenprovided by the learned Deputy Solicitor General shows that-the word“debt" had a specific meaning in terms of this Act. Indeed the Bill wasspecifically amended to give a limited meaning to the word “debt” which
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was confined to lending institutions and not to all monetarytransactions.
The draft Bill, which was proposed on 23.01.1990 has restrictedthe meaning of the word debt as it existed, a fact that was concededby the learned Deputy Solicitor General. Admittedly therefore a muchmore restrictive definition was given, even by the amendment Act 9 of1994 of the aforesaid Act by section 21, where recovery was restrictedto the banking activity of a lending institution. Such amendment to theoriginal Bill would not have been needed if the Act was proposed tohave a wider application as argued by the learned Deputy SolicitorGeneral.
The argument was also preferred by the learned Deputy SolicitorGeneral that Part 5 relates to "a stand alone section’ and does nothave any connection with the recovery of debts by a lending institutionand therefore the words “any person’ that has been used mean anyperson within the jurisdiction of Sri Lanka who has entered into anyfinancial transaction with any other person and who draws a chequeunder the following circumstances:-
knowingly draws a cheque which is dishonored by a bank,for want of funds.
gives an order to a banker to pay a sum of money,which payment is not made or there being no obligation onsuch banker to make payment or the order givenbeing subsequently countermanded, with a dishonestintention, or… ”
Whilst this liability clearly circumscribes “any person” to includeany drawer of a cheque the Act as amended is seemingly silent as towho the drawee of the cheque should be. So that where the Act clearlybroadly defines the liability of the offender or perpetrator as any person,the drawee has not been set out with equal clarity. I am reticent to givethis section such a wide and unrestricted meaning on the purposiveinterpretation of the Act which was for the purpose of affirmativelysupporting the lending institutions to recover their bad debts. It is my
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opinion that to give such a wide meaning to those provisions goesagainst the spirit, scope and ambit of this Act.
In this context. Part I of the Act deals with the institution of aCivil action, a fact conceded even by the learned Deputy SolicitorGeneral, for the recovery of a debt which must necessarily be to alending institution. His argument is that the criminal matters institutedunder these provisions of section 25 are not precluded to, and goesbeyond the lending institutions and would include a\ persons whoenter into transactions by way of cheques. To give such a meaning, itwould in my opinion mean that the intention of the legislature was togive a confined meaning under the civil law, confining debt recovery tolending institutions, but to give an expansive and liberal applicationunder criminal law, to include all persons who entered into such atransaction and defaulted on a cheque.
Furthermore, even Part 5 itself specifically in sections 24 and 26refer to ‘‘institutions’’. It is my opinion, that this section must becautiously interpreted under the whole spirit of the Act to mean thatthe procedure was optional to the lending institution, and whether theprocedure was civil or criminal it was one that was restricted totransactions involving the lending institutions. That is a lendinginstitution was entitled to proceed to recover by way of the newexpeditious recovery procedure set out under the Act or to proceedagainst the defaulter by way of criminal prosecution, but in all suchactions the drawee was restricted to lending institutions.
I am reticent to accept that “any person” adverted to in terms ofsection 25 of the said Act, expands the offence to all persons whowould dishonor a cheque, even between private parties. The normalprocedure and practice in commercial transactions involve post datedcheques, and this procedure would be precluded if the interpretationwas to be given in the wide sense that was argued by the State Counsel.To give this meaning would attract a wider jurisdiction, beyond thejurisdiction that has been envisaged both in terms of the preamble tothe Act and to other sections in the Act. An amendment to the PenalCode could have served the purpose better, had such been the realintention of the legislature.
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It would also be in my opinion an unreasonable interpretation toaccept that the legislature intended to confine civil liability to thosetransactions with lending institutions but to give a wider and expansivecriminal.liability to include “all persons” in the application of the criminalliability envisaged under the said Act as amended.
The interpretation that the learned Deputy Solicitor Generalrequires from this Court is to take the simple words “any person” inisolation from both the preamble of the Act and the other sectionsreferred to in other parts and even in this part of the Act, which hereferred to as “a stand alone section”.
It is my opinion that the intention of the legislature was clearly toassist the lending institution to have a more effective recovery procedureand to deal with such defaulters who committed offences under theAct and was specifically enacted to assist lending institutions dealingwith defaulters.
Accordingly, I see no merit in the argument of the learned DeputySolicitor General. The appeal is dismissed. No costs.
Appeal dismissed.
By majority decision appeal allowed.