Thus the lease money at the rate of Rs. 10,000/- per month hadbeen fixed and deeds written without even finding out the incomeparticulars of the coir mill. The plantations hardly brought in anyincome.
It is significant to note that the transaction took place with thedefendant-appellant going over to meet plaintiff-respondent and notvice versa. (Vide bottom of page 231 of the Brief) in a case ofpurchase the buyer would go over to the property, examine itssuitability for purchase, its price etc. and come to a decision. Notnecessarily so with regard to a mortgage or raising of a loan. It is theborrower who is dominant in such a transaction trying to persuadethe investor to part with his money. Here was a case of the“purchaser” not going to the property but the owner or “seller" goingover to Dankotuwa to see the plaintiff-respondent. Presumably theother person who accompanied the owner (defendant-appellant) wasan intermediary.
In any case after the deeds P2 and P3 were written the defendant-appellant was left severely alone. Even after the so called lease
Piyasena v. Don Vansue (C. V. Wigneswaran, J.)

a0£ S^Sca e®©a)©oc35) 88.03.15 oSS gmO e@o0S ox3©0®6i SSefl oa5a>©oesgSoO «x®£0©©eJ ®0 qpiS ©0 oooes). 6® djJM)©g© osoousoOd o@® o£e@ @gejEiS Sei^ ©0 canoes) ax5 ovo. c£o@ ©go efSS ©0a5, o^o0S eB&BOfflOiOetoJ ©£®D©ca 87.10.9 Opened qdesa ©0e4 e@o0S ODtSQ©®0£ 6® egsai sx5 qaes. 88.01.03SO e©o0S O3tio0mc5j o®@ o£c@0@ cgffi6Sec5 SSa s©0eS. 88.03.15 ®g egsSSooedoeDC5g ©6055 <5© ei®^©3© ea^saS ea0 wo. o®@ ot®$©<3© q?Kg©G5 esdjsg 0§a5 ooSoaioai g£g0S o&sQoduxA ©g ®j©o 87.10.09 ^oeoa) <$0sa5 §0aS ©g £©0® cgriSedC5C^ S3 ©0 S®0 O©O0S oj&SQoCxJO Q0S3 Q ©00.
At the end of the order the learned Primary Court Judge held thatthe plaintiff-respondent in this case was never handed overpossession of the property by the defendant-appellant in this case.
The learned Counsel for the plaintiff-respondent referred to section43 of the Evidence Ordinance under which the Primary Courtproceedings were irrelevant. This is not so. Read inter alia withsection 11 of the Evidence Ordinance the provisions of section 43 arerelevant to this case. The finding of the learned Primary Court Judgereferred to the police statement made by the plaintiff-respondent on15.03.1988 (V2) where the fact of currently being in possession ofthe property in question was never referred to. This fact is relevant inthat the conduct of the plaintiff-respondent even after the leaseperiod was over is relevant in coming to a conclusion with regard tothe attendant circumstances.
Thus the behaviour of the plaintiff-appellant with Samagi Mudalaliin the background and the defendant-appellant, just before and afterthe signing of P2 and P3 and even after the end of the period oflease, show them to be that of rapacious investors and persecutedborrower respectively rather than a genuine purchaser and anoverholding lessee.
Sri Lanka Law Reports
[1997] 2 Sri LR.
Rs. 10,000/- per month as lease rent seems to be an interestcovertly claimed. All evidence points to Samagi Mudalali as thepuppeteer and the plaintiff-respondent a mere marionette. Eveninforming the Grama Sevaka of a purchase sans possession gives apredatory dimension to the whole episode. (Vide items 1, 2, 6, 7, and8 above under submissions made by Counsel for defendant-appellant).
Thus when the attendant circumstances point to a loan transactionand not a genuine sale transaction does the provisions of section 83of the Trust Ordinance apply, seems to be the question to answer.
Most certainly the issues did centre around the nature of thetransaction. Issue 7 referred to a loan transaction though SamagiMudalali was not mentioned. Issue 8 referred to interest atRs. 10,000/- per month. Issue 9(a) referred to Deed 424 being a.security for a loan. Issue 9(b) referred to the behaviour of the plaintiffas a “constructive trustee". No doubt the wording of issue 9(b) inSinhala may not have been the best way to have put across the ideaof a constructive trust. But the transaction was adequately referred toin order to bring it under the provisions of section 83 of the TrustOrdinance. In fact the issue 9(b) raised in Sinhala relating to thebehaviour as a "constructive trustee” seems to owe its origin to thewording of section 83 which says “the transferee or legatee musthold such property for the benefit of the owner or his legalrepresentative". May be the Sinhala translation of section 83 (or theOriginal in Law?) would throw more light on this peculiar wording ofthe issue. Therefore there is no doubt that throughout the case thedefendant-appellant put in issue the question of a constructive trust.Thus even though a transfer is in the form of an outright sale, it ispossible to lead parole evidence to show that facts exist from which itcould be inferred that the real transaction was either, (i) moneylending where the land is transferred as a security as in this case, or(ii) a transfer in trust. In such cases section 83 would apply. (Vide 48NLR 357 and Weeramantry on Contracts Vol. 11 page 647).
The learned Counsel for the plaintiff-respondent seems to confuse atransfer in trust with a transfer as security for a loan. A security for
Piyasena v. Don Vansue (C. V. Wigneswaran, J.)
repayment of a loan does not get forfeited on failure to repay loan orviolate conditions. It only gives rights to the investor to put the matterin suit and claim his dues. He cannot indulge in some form of parateexecution resorted to by Hire Purchase Companies.
A trust is inferred from attendant circumstances. The trust is anobligation imposed by law on those who try to camouflage the actualnature of a transaction. The facts of this case seem to confirm that P3(lease bond) was a cover for the loan transaction that took place.Firstly the investor seems to have wanted adequate security for hiscapital sum not in the form of a mortgage but a transfer. Next he hadwanted to ensure a high rate of interest which if it had been insertedin the documents of transaction would have appeared exorbitant andunreasonable. Thus the Lease Bond was innovated. It is apparentthat through this transaction Samagi Mudalali with the help of theplaintiff-respondent was also setting his sights on a long termsecurement. That was why a statement to the Grama Sevaka about asimple "purchase” had been made. Placing of Somaratne as watcherand wanting to get his name registered etc. were steps taken notqua owner but to assert ownership furtively where in fact it did notexist.
The answer to the question raised by the learned Counsel for theplaintiff-respondent as to how the plaintiff-respondent could becomea constructive trustee of the defendant-appellant if money wasinvested by Samagi Mudalali is simple.
If property passed to the plaintiff-respondent and he let downSamagi Mudalali the latter had a cause of action against the plaintiff-respondent. (Vide section 84 Trusts Ordinance). But so long asmoney was paid ostensibly by the plaintiff-respondent (though mostprobably helped by Samagi Mudalali) and paper title was shown tobe in his favour the cause of action lay for the defendant-appellantagainst the plaintiff-respondent. Though the action in this instancewas by the plaintiff-respondent, it was open to the defendant-appellant at the end of the period of lease to file an action to declarehim as the owner on payment of all dues to plaintiff-respondent.
Sri Lanka Law Reports
[1997] 2 Sri LR.
This Court has not the slightest doubt despite the defendant-appellant not giving evidence that the transaction between theplaintiff-respondent and Samagi Mudalali on the one hand and thedefendant-appellant on the other was one from which “it cannotreasonably be inferred consistently with the attendant circumstancesthat he (the defendant-appellant) intended to dispose of thebeneficial interest” to the property in question. This Court thereforeholds that such property was held for the benefit of the defendant-appellant subject to the payment of plaintiff-respondent's dues.
This Court therefore sets aside the judgment dated 04.10.91 anddeclares that the plaintiff-respondent holds the property in dispute intrust for the defendant-appellant subject to the payment ofRs. 150,000/- together with legal interest at 18% per annum from10.09..1987 until date of payment. On payment of this sum of moneywithin 6- months of the record reaching the District Court ofKuliyapitiya by the defendant-appellant, the plaintiff-respondent shallretransfer the property in suit to the defendant-appellant at theexpense of the defendant-appellant. If the plaintiff-respondentneglects or refuses to retransfer the property in suit the Registrar ofthe District Court of Kuliyapitiya is hereby authorised to do so.
If the defendant-appellant fails to pay the sum of money due to theplaintiff-respondent within 6 months as aforesaid the trust herebydeclared would come to an end and the plaintiff-respondent wouldthen be entitled to take out writ of possession as if he had beendeclared owner.
The appeal is allowed with taxed costs payable by the plaintiff-respondent to the defendant-appellant.