057-SLLR-SLLR-2005-V-2-SORIS-vs-OFFICE-IN-CHARGE-CRIMINAL-INVESTIGATIONS-DEPARTMENT.pdf
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SORIS
VS
OFFICE IN CHARGE – CRIMINALINVESTIGATIONS DEPARTMENT
COURT OF APPEAL,
ABEYRATNE J,
IMAM J,
CA (PHC) APN 185/2004HC (REV) BADULLA 57/04M. C. BANDARAWELA 36415JANUARY 26, 2005MARCH 1,2005
Debt Recovery (Sp. Pro) Act. No. 2 of 1990 – as amended by No. 9 of 1994-Section 2(1) (2) Section 25 (1) (6), S 30 (a) Scheduled Institution ? – LendingInstitutions – Co-operative Society – is it a Schedule Institution ? – Chequesissued for the society being dishonoured due to tack of funds – Applicability ofthe provisions of the Debt Recovery Law ? – What is a Debt ?
On a complaint made by the General Manager of the Co-operative Society theCriminal Investigations Department commenced investigations, with regardto the allegation that the Petitioner had cheated the Society in a sum of Rs. 5.4Million. The basis of the complaint was that the cheques issued by the Peti-tioner for the purchase of seed potatoes from the Society were dishonoured forlack of funds. The 'B’ Report filed alleges that the petitioner had committed anoffence under Section 25 (1)(a) of the Debt Recovery' Act. The Petitioner ob-jected to the proceedings on the ground that, the Society is not a scheduledinstitution under the Debt Recovery Act. This was over-ruled by learned Magis-trate, and in the Revision Application filed in the High Court, Court refused toissue Notice.
HELD:
The Debt Recovery (Sp. Pro) Act 2 of 1990, is comprised of fiveparts, where parts 1 -4 relate to transactions of a civil nature by andbetween the lending institutions and part 5 deals with the criminalliability attached to the money transactions between the lendinginstitutions and a person or body of persons.
A lending institution is defined in Section 30 of the Act and theUdalapalatha society does not fall within the interpretation of lend-ing institution ; reference to the words lending institution and insti-tution refer to one and the same.
It is manifestly clear that the word “Debt" is used in relation to alending institution and related to transactions in the course of bank-
CA
Son's vs. Officer in Charge Criminal Investigations
Department (Imam, J.)
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ing, lending and financial or other allied business activities. Theword debt cannot be construed to any debt.
APPLICATION in Revision from an Order of the High Court of Bandarawela.Case referred to :
1. C. N. Mackie and Co. vs Translanka Investment ltd., 1995 2 Sri LR 6
H. G. Hussain with Ms. A. M. K. Sepali for Accused Petitioner Petitioner.Buvenaka Aluvihare S. S. C., with Achala Wenagappuli S. C., for theRespondent Respondents.
Cur. adv. vult
March 30, 2005IMAM, J.
This revision application has been made by the Accused-Petitioner-Peti-tioner (hereinafter referred to as the Petitioner) to set aside the order of theLearned High Court Judge of Badulla dated 14.06.2004, amongst otherreliefs, sought for. The facts of this case are briefly as follows. On a com-plaint made by the General Manager of the Udapalatha Multi-purpose Co-operative Society (hereinafter referred to as the MPCS), the Criminal In-vestigation Department commenced investigations with regard to the alle-gation that the petitioner had cheated the MPCS in a sum of approxi-mately Rs. 5.4 million. The basis of the complaint was that cheques is-sued by the Petitioner for the purchase of seed potatoes from the MPCSwere dishonoured for lack of funds. Consequently the CID filed a ‘B’ reportagainst the petitioner in the Magistrate’s Court of Bandarawela allegingthat he had committed an offence under section 25(1 )(a) of the Debt Re-covery (Special provisions) Act, No. 2 of 1990 as amended by Act No. 09of 1994.
Initially counsel who appeared for the petitioner among other groundsraised an objection that the charge cannot be maintained, as the courthad no jurisdiction to hear the case as the MPCS is not a scheduledInstitution as described in section 30 of Act, No. 02 of 1990. Although the
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Learned Magistrate made an order on 23.10.2003 to the prosecution to tilean amended charge, he nevertheless on 05.03.2004 subsequent to anapplication made by the prosecution cancelled his earlier order, therebydisallowing the initial objection raised by Petitioner’s counsel, and tixedthe matter for Trial. The Petitioner aggrieved by this order, preferred arevision application to the High Court of Badulla. The Learned High CourtJudge of Badulla by his order dated 14.06.2004 refused to issue Notice,and dismissed the application. The petitioner aggrieved by this order ofthe learned High Court Judge tendered this revision application to thiscourt.
Both counsel invited this court to make an order with regard to theapplicability of section 25(1 )(a) of the Debt Recovery Act, No. 02 of 1990.It was submitted on behalf of the petitioner that the aforesaid sectiondeals with debts in relation to the institutions referred to in section 30 ofAct, No. 02 of 1990. However learned Senior State Counsel appearing forthe respondents submitted that the relevant section cannot be narrowlyconstrued, but has to be examined independently, from the other provi-sions of the aforesaid Act. Section 25(1 )(a) of the said Act refers to “Anyperson who (a) draws a cheque knowing that there are no funds or not
sufficient funds in the bank to honour such cheque or’’ The Learned
High Court Judge in his order referred to this section and further held thatthe type of person who receives the cheque (payee) is immaterial for aprosecution in terms of the section. Counsel for the petitioner submitted inthis Court that section 25 can only be invoked where the cheque con-cerned was drawn in favour of a “Scheduled Institution” within the mean-ing of the Act, and that the objective of the legislature was to streamlinethe procedure with regard to the recovery of debts by “lending institutions"and thus any transaction which does not involve a lending institution isoutside the parameters of the Act.
Learned Senior State Counsel who appeared for the respondents didnot agree with this view.
It is clear on a perusal of section 25(1 )(a) and (b) that no reference ismade to “lending Institutions” nor to “Recovery of Debts”, but refers to asituation where “a person draws a cheque (a) Knowingly witho.ut or insuf-ficient funds to meet the cheque and thereby causes the same to be
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Department (Imam, J.)
dishonoured or (b) countermand a cheque with a dishonest intention
Bindra on Interpretation of Statutes (9th edition, p 38) states The “Con-struction of the Statute cannot be limited by its title. The true nature of thelaw is to be determined not by the name given to it or by its form , but byits substance. Where the language of the enactment is clear, its con-struction cannot be affected in any way by the consideration of the title ofthe Act.” Thus section 25 of the Act is clearly not ambiguous.
In the case of C. W. Machie and Co. vs Translanka Investment Ltd.(l)Ranaraja. J. in reference to certain dishonoured cheques issued by therespondent, observed that section 25 of the Act makes such conduct onthe part of the drawer an offence. It is noted that neither party in this caseis a lending institution.
However on perusal of the Debt Recovery (Special Provisions) Act, No.02 of 1990 section 2(1) Part 1 which refers to institution of Action, statesthat “A Lending institution (hereinafter referred to as the institution” maysubject to the provisions of sub-section (2) recover debt due to it by anaction instituted in terms of the procedure laid down by this Act, in the
District Court” Section 2(2) states that ‘No action shall be instituted
by an institution in terms of the procedure laid down by this Act for the
recovery of any loan or debt as amended by Act No. 09 of 1994”
Section 4(1) states that “The Institution suing shall on presenting the plaintfile an affidavit to the effect that the sum claimed is justly due to theinstitution from the defendant and shall in addition produce to the Courtthe instrument, agreement or document sued upon or relied on by theinstitution” Thus from the institution of action onwards under the aforesaidAct, certain procedures are set out which have to be fulfilled for the reliefobtained. Moreover the charge sheet presented inthe Magistrate’s Courtagainst the Petitioner specifically refers to section 25(1 )(a) of the DebtRecovery (Special Provisions) Act No. 02 of 1990 as amended by Act No.09 of 1994. Hence the procedures of the aforesaid Act have to be followed.The Debt recovery (Special Provisions) Act, No. 02 of 1990 is comprisedof five parts where parts 1 to 4 relate to transactions of a civil nature by andbetween the lending institutions, and part 5 deals with the criminal liabilityattached to the money transactions between the said lending institution,and a person or body of persons. A lending institution is defined in section30 of the aforesaid Act, and the “Udapalatha MPCS’ does not fall within
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the interpretation of Lending Institution. Furthermore the reference to thewords Lending Institution anc institution refer to one and the same. It ismanifestly clear that the word ‘Debt’ is used in relation to a lending Institu-tion and related to transactions in the course of banking, lending, andfinancial or other allied business activities. Hence the word debt cannot beconstrued to any debt. The terms “Any Person” is described in detail inStroud’s Judicial Dictionery
For the aforesaid reasons this Court permits the revision applicationand sets aside the order of the Learned High Court Judge of Badulla dated
in Application No. 57/2004. Furthermore the Petitioner is per-mitted to issue notice on the Respondents, and is entitled to the reliefssought for in the prayer to the Petition presented to this Court.
Abeyratne, J. I agree.Application dismissed.