Sterling Merchant Investment Ltd v. Liyanage
STERLING MERCHANT INVESTMENT LTDv
LIYANAGECOURT OF APPEALWIMALACHANDRA, J.
D.C. NEGOMBO 359/M.
NOVEMBER 8, 2004.
Civil Procedure Code – section 706 – Summary procedure – Leave to appearand defend – Absence of an affidavit – Is it fatal? – Could the discretion undersection 706 be exercised? – Security – Could it exceed the principal sumclaimed?
When the defendant sought leave to appear and defend, the plaintiff raised apreliminary objection that the affidavit sworn by the Manager of the defendantcompany is not a valid affidavit. The court ordered the defendant petitioner todeposit the entire sum along with the legal interest due on the said sum andpermitted the defendant petitioner to appear and defend the action. Thedefendant petitioner moved in revision.
There is no name, date, address or the seal of the Justice of the Peacebefore whom the said affidavit is alleged to have been sworn; further theperson who is alleged to have administered the oath and his capacity toadminister the oath is not known. The resulting position is that there is noproper application before court in the absence of a valid affidavit.
Accordingly, the court cannot exercise its discretion under section 706and allow the defendants to appear and defend the action without beingcalled upon to deposit the entire sum claimed by the plaintiff.
Per Wimalachandra, J.
“It is not illegal to order the defendant to furnish security in a sumexceeding the principal sum claimed by the plaintiff as a condition forbeing allowed to appear and defend, if the sum exceeding the principalsum amounts to the legal interest of the principal sum."
APPLICATION in revision from an order of the District Court of Negombo.
Sri Lanka Law Reports
 3 Sri L.R
Case referred to:
Science House (Ceylon) Ltd., v IPCA Laboratories (Pvt) Ltd – 1987 1 SriLR 185
Chitral Fernando for defendant-petitioner
K. M. Basheer Ahamed with Kunaseelan for plaintiff-respondent.
Cur. adv. vult.
November 19, 2004.
WIMALACHANDRA, J.This is an application in revision to set aside the order dated 014.10.2004 in Case No. 359/MS in the District Court of Negombomade by the learned District Judge, wherein he has permitted thedefendant-petitioner, leave to appear and defend the action(hereinafter referred to as ‘the defendant’) upon depositing in Courta sum of Rs. 500,000/= along with the legal interest due on the saidsum of Rs. 500,000/=.
At the outset the learned counsel for the plaintiff-respondent(hereinafter referred to as ‘the plaintiff’) raised a preliminaryobjection that in the application for leave to appear and defend, the 10affidavit sworn by the Manager of the defendant-company is not avalid affidavit for the following reasons:
There is no name, address or seal of the Justice of Peacebefore whom the purported affidavit is alleged to have beensworn.
The person who is alleged to have administered the oath andhis capacity to administer the oath is not known.
A copy of the affidavit filed by the defendant seeking leave toappear and defend the action in terms of section 706 of the CivilProcedure Code is produced annexed to the petition marked “P4”. 20In “P4” there is no name, address or seal of the Justice of thePeace before whom the said affidavit is alleged to have beensworn. It is seen that the person who is alleged to haveadministered the oath and his capacity to administer the oath isunknown, Furthermore the date of the administration of the oath isnot stated. For these reasons, I am of the view that there is no valid
CASterling Merchant Investment Ltd v. Liyanage55
affidavit supporting the matters averred in the application for leaveto appear and defend the action filed by the plaintiff. The resultantposition is that there is no proper application before court in the
absence of a valid affidavit.
Accordingly, in an application for leave to appear and defend, inthe absence of a valid affidavit, which amounts to no affidavit, thecourt cannot exercise its discretion under section 706 of the CivilProcedure Code and allow the defendant to appear and defend theaction without being called upon to deposit the entire sum claimedby the plaintiff, as there is no way the court can decide whether thedefendant has a prima-facie sustainable defence. In this situationthe defendant should be required to give security as a condition forbeing allowed to appear and defend.
The plaintiff has instituted this action under Chapter 53 of theCivil Procedure Code by way of summary procedure to recovermoney lent and advanced to the defendant on the security of apromissory note dated 3.8.2002, which became due and payable tothe plaintiff on 3.8.2003.
The defendant in its petition marked “P3" (undated) hasadmitted the following facts:
the said promissory note (marked “X2” annexed to the plaint)
the change of name of the defendant from Pramuka
. Merchant Corporation Ltd. to its present corporate name.
Accordingly, the genuiness of the promissory note and theamount due on the said promissory note is admitted by thedefendant. In the absence of a valid affidavit the Court is unable toconsider whether the defendant has a prima-facie sustainabledefence. In this situation the defendant should be required to givesecurity as a condition for being allowed to appear and defend.
It is not illegal for the learned Judge to order the defendant tofurnish security in a sum exceeding the principal sum claimed bythe plaintiff as a condition for being allowed to appear and defendif the sum exceeding the principle sum amounts to the legal interestof the principle sum. [See – Science House (Ceylon) Ltd. v IPCALaboratories (Pvt) Ltd ]
Sri Lanka Law Reports
 3 Sri L.R
Accordingly, this court sees no reason to interfere with the orderof the learned District Judge dated 04.10.2004. The application inrevision is dismissed with costs fixed at Rs. 5000/= payable by thedefendant-petitioner to the plaintiff-respondent.
STERLING MERCHANT INVESTMENT LTD v. LIYANAGE