SEYLAN BANK LTD., vs PIYASENA AND ANOTHER

026-SLLR-SLLR-2005-V-2-SEYLAN-BANK-LTD.-vs-PIYASENA-AND-ANOTHER.pdf


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Seylan Bank ltd., vs Piyasena and Another
131
SEYLAN BANK LTD.,VSPIYASENA AND ANOTHERCOURT OF APPEALWIMALACHANDRA J
A.L.A. 326/03
C. EMBILIPITIYA 7713/LJANUARY 27, 28, 2005
Civil Procedure Code – Interim Injunction – Ingredients – Cause of action – quiatimet actions * person in possession – No title ~ Is he entitled to injunctive relief?Recovery of Loans by Bank (Sp. Pro) Act, and 4 of 1990 – Cause of Action
The plaintiff – respondent mortgaged a certain land to the 1st DefendantPetitioner Bank, and as he had defaulted the repayment of the loan, the Banksought to recover same by invoking the Provisions of Act No. 4 of 1990.
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The plaintiff Respondent had stated that the corpus belonged to the 2ndDefendant Land Reform Commission and that the Land Reform Commissionis taking steps to transfer the property to him, and that the Bank has no authorityto parate – execute the property. The Court granted the injunction sought by thePlaintiff restraining the Defendant Petitioner Bank from parate execution of theproperty.
On leave being sought by the Defendant Bank :
It appears that the boundaries of the land mortgaged are differentfrom that of the land which is the corpus. Even if the Plaintiff has notitle to the property, the facts placed before Court show that at thetime of filing action he was in possession of the land.
It may be possible to file action against a person who hasthreatened to disturb the possession of the Plaintiff and to use theevidence which he has at hand to establish his possession againstthe person who only threatens and does not so far disturb hispossession.
An interim injunction will be granted quia-timet to restrain anapprehended or threatened injury, if in addition to the otherrequirements necessary to qualify for an interim injunction, it isestablished that firstly the injury is certain or very imminent andsecondly that the likely mischief will be of a very substantial nature.
The land belongs to the Land Reform Commission and the LandReform Commission was taking steps to transfer it to the Plaintiff.The Plaintiff had established that there is a strong possibility thatthe apprehended mischief will in fact arise, the Defendant-Bankhas already taken steps to auction the land in question.
If the wrong land is auctioned the inconvenience which the Plaintiffwill suffer by the refusal of the injunction is greater than that whichthe 1st Defendant will suffer if it is granted, the balance ofconvenience favours the Plaintiff.
The relief claimed by the Plaintiff is founded on the violation of hisright to possession of the land described in the plaint by the 1stDefendant Petitioner. A person in possession is entitled to possessit without fear of unjustifiable interference from outsiders.
Application for Leave to Appeal from an Order of the District Courtof Embilipitiya.
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Seylan Bank Limited vs Piyasena and Another
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Cases referred to :
Preston vs Luck – 1887 27 ch. 497 at p. 505 and 506.
Jinadasa vs Weerasinghe – 1929 – 31NLR 33
Montgomery vs Montgomery – 1964 2 AER 22
Gouriet vs Union of Post Office Workers – 1978 AC 435, 1977 3WLR 300, 1977 3 AER 70 HL (E)
Richard Perera vs Albert Perera 1963 67 NLR 443 at 448.
Jackson vs Spittel – 1880 LR 5 CA 542.
Lowe vs Fernando – 16 NLR 398.
Ceylon Land and Produce Co. Ltd. vs. Malcolmsori – 12 NLR 16 at 19.
Fernando vs Silva – 1878 – 1 SCC 28
Tilaka Bandara Waduressa for 1st Defendant Petitioner.
Rohan Sahabandu for 2nd Defendant Respondent.
Plaintiff Respondent absent and unrepresented.
cur. adv. vult.
May 12, 2005WIMALACHANDRA, J.
This is an application for leave to appeal from the order of the DistrictJudge of Embilipitiya dated 19.08.2003. By that order the learned judgehas granted the interim injunction sought by the plaintiff-respondent (plaintiff)prayed for in the prayer to the plaint, restraining the 1st defendant -respondent (1st defendant) from auctioning the land described in theschedule to the plaint.
The petitioner states that the land described in the schedule to thestatement of objections of the petitioner filed in the District Court, at onestage belonged to D.D. Sepala Ratnayake and he had transferred it toImiyage Don Gunaratne by deed No ,34858 dated 28.02.1968 attested byD.M.A. Diyagama N.P.
The said Gunaratne had transferred the said land to KekunawalaPathirage Piyasena, who is the plaintiff, by deed No. 883 dated 04.12.1979 attested by B. Vithanage N.P.
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The Plaintiff had mortgaged the said land to the 1st defendant bynotarial deeds No. 1012 dated 1.7.1992, and No. 1152 dated 16.11.1993,both attested by K.S. Abeyratne N.P. He had also executed mortgagebonds No. 7213 dated 13.5.1996 and No. 6656 dated 28.04.1995, bothattested by S.E. Weeraratne, N.P. The Plaintiff had obtainedRs. 2058981/73 from the 1 st defendant by keeping the aforesaid land assecurity. The plaintiff had defaulted the repayment of the loan facilities heobtained from the 1 st defendant and the 1st defendant had taken steps torecover the defaulted sum as at 29.2.2000, amounting to Rs. 2,058.981/73, in terms of the provisions of the recovery of Loans by Banks (SpecialProvisions) Act No. 4 of 1990.
It is the position of the plaintiff that the said land depicted as lot 1 inplan No. 1193 LR 6/204dated 10.04.2001 prepared by the licensed Surveyor
W.K. Manamperi belongs to the Land Reform Commission, the 2nddefendant, and the 2nd defendant is in the process of taking steps totransfer the said land to the plaintiff. Accordingly, the plaintiff states thatthe petitioner has no right to auction the land by way of parate-executionunder the Recovery of Loans by Banks (Special) Act. This position isconfirmed by the 2nd defendant – Respondent (defendant), the LandReform Commission. The 2nd defendant has taken up the position in itsanswer filed in the District Court that the land mortgaged to the 1 st defendantBank belongs to the 2nd defendant and the 2nd defendant was takingsteps to transfer the property, which is the subject matter of this action, tothe plaintiff.
The learned Judge in his order has granted the interim injunctionprayed for by the plaintiff mainly on the ground that the main question thathas to be decided is whether the land in question belongs to the 2nddefendant, the Land Reform Commission.
In deciding the question whether to issue an interim injunction, thefirst requirement that has to be established is whether the plaintiff has aprima facie case. The plaintiff filed this action for a judgment, that he bedeclared as the possessor of the land described in the schedule to theplaint and to prevent the 1 st defendant-bank from selling the land by publicauction.
In issuing an injunction, it is settled law that there must be a primafacie case, meaning that there is a serious question to be tried at thehearing, and that on the facts of the case before Court there is a probability
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that the plaintiff is entitled to relief. Preston vs Luck(1) at 505 and 506,Jinadasa Vs. Weerasinghe (2). Moreover, on the face of the plaint theperson applying for an injunction must show that he is not bound to fail byvirtue of some apparent defect. (Row on Injunctions 6th edition at page247)
The Court will issue an interim injunction only to protect a legal right(Montgomery Vs. Montgomery) (3) where the plaintiff has no legal rightrecognisable by the Courts, an interim injunction should not be issued(Gouriet Vs. Union of Post Office Workers) (4) " There must be someapparent violation of rights to which the plaintiff appears to be entitled andnot merely of rights which he claims” per H.N.G. Fernando, J. in RichardPerera Vs Albert Pereraf5) per Justice Soza, at page 84 of Judges Journal,Volume I.
In the light of the above discussion it is appropriate to examinewhether there is a cause of action against the 1 st defendant. The plaintiffhas not prayed for a declaration of title to the property described in theschedule to the plaint. His main reliefs are ; that
the plaintiffs possession to the (and described in the scheduleto the plaint be confirmed.
the 1 st defendant – bank has no legal right to auction the landdescribed in the schedule to the plaint.
Every action is based on a cause of action. A cause of action meansa particular act on the part of the defendant-which gives the plaintiff hiscause of action (Jackson Vs. Spittel(6))
A question arises as to whether a cause of action is fully accrued tothe plaintiff as at the date of the institution of this action. It appears thatthe relief claimed by the plaintiff in paragraph (1) of the prayer to the plaintis founded on the violation of his right to possession of the land describedin the plaint by the 1 st defendant.
It was held in the case of Lowe Vs. Fernando(7) that the expression“cause of action” generally imparts two things, viz. a right in the plaintiffand a violation of it by the defendant and cause of action means the wholecause of action i.e. all the facts which together constitute the plaintiff’sright to maintain the action.
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Admittedly the plaintiff is in possession of the property which is thesubject matter of this action. A person who is in possession is entitled topossess it without fear of unjustifiable interference from outsiders.
The 2nd defendant, the Land Reform Commission filed answer andhas taken the position that the land belongs to the Land ReformCommission. The 2nd defendant in its answer states that the 2nd defendantwas taking steps to transfer the property in question to the plaintiff. Itappears that the plaintiff is in possession of the property in anticipation ofthe transfer of title deeds in his favour.
The 1st defendant’s position is that the plaintiff mortgaged the saidland to the 1st defendant as security for the repayment of the bankingfacilities obtained from the 1st defendant. However it appears that theboundaries of the land mortgaged to the bank are different from that of theland which is subject matter of this action. The 2nd defendant, the LandReform Commission claims to be the owner of this land. In thesecircumstances, it is important to ascertain and identify the land mortgagedto the 1st defendant by the plaintiff. In these circumstances, it appearsthat there is a serious question to be tried at the hearing, and that on thefacts before this Court the plaintiff has a fair question to raise to theexistence of a legal right. Moreover, the 2nd defendant in no uncertainterms has stated that the land, which is the subject matter, belongs to the2nd defendant and was taking steps to transfer the land to the plaintiff andit was the 2nd defendant who placed the plaintiff in possession of the saidland.
Even if the plaintiff has no title to the property, the facts placed beforeCourt show that at the time of filing action he was in possession of theland. It may be possible to file action against a person who has threatenedto disturb the possession of the plaintiff and to use the evidence which hehas at hand to establish his possession against the person who onlythreatens and does not so far disturb his possession.
With regard to this type of action, Wood Renter) J. in the case of theCeylon Land and Produce Co. Ltd. l/s. Malcolmson{8) 19, cited with approvalthe following passage in the Judgment of Phear, C.J. in Fernando Vs.Silva(9)
“ If nothing has yet happened to prevent, or to interfere with,the plaintiff’s present enjoyment of his property, where no cause
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has yet occurred to render it necessary for him to have actualrecourse to a Court of Justice for remedy, yet it may sometimesbe right that he should be afforded an opportunity of making debene esse use of that evidence which he has at hand to establishtitle against a person who only threatens and does not yet disturbit.”
At page 20, Wood Renten, J. said:
“ The necessary ingredients in an action quia timet are, (a)actual or imminent injury; (b) prospective damage of a substantial,if not, irreparable kind”
Justice Soza, in his article “ the Interim Injunction in Sri Lanka”published in the Judges Journal Vol. 1 at page 89 states as follows :
“An interim injunction will be granted quia timet to restrain anapprehended or threatened injury if in addition to the otherrequirements necessary to qualify for an interim injunction, it is.established that firstly the injury is certain or very imminent andsecondly that the likely miscjiief will be of a very substantialnature.”
In the instant case that plaintiff has established that there is a strong'probability that the apprehended mischief will in fact arise. The 1stdefendant- bank has already taken steps to auction the land which is thesubject matter of this action.
According to the documents marked P3(b) P3(c), P3(d) and P3(e) itappears that the plaintiff has obtained banking facilities from the 1stdefendant- bank and as security for repayment he has mortgaged a propertycalled and known as Kirilawel-Katuwa depicted as lot 247 in V.P. 779which is in extent of 2A. 00R. OOP. The land described in the schedule tothe plaint is a portion of Kiralawel – Katuwa Nindagama depicted as Lot 1in Plan No. 1193 prepared by Licensed Surveyor G.W.K. Manamperi dated
and L.R.C. No. 6/204 which is in extent of 00A. 03R. 17.6 P. Inthe circumstances the correct identification of the land is necessary, whichcan only be ascertained at the trial and not at this stage.
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As regards the balance of convenience, the Court will have todetermine whether the harm which the 1st defendant will suffer if theinjunction is granted be greater than the harm which the plaintiff will sufferif it is refused. In the instant case, it appears that if the wrong land isauctioned the inconvenience which the plaintiff will suffer by the refusal ofthe injunction is greater than that which the 1 st defendant will suffer, if it isgranted. Accordingly, the balance of convenience favours the plaintiff.
For these reasons, I see no necessity to interfere with the ordermade by the learned District Judge dated 19.08.2003. Accordingly, leaveto appeal is refused and the 1 st defendant’s application is dismissed withoutcosts.
Application dismissed