046-NLR-NLR-V-76-SUBANERIS-Petitioner-and-THE-CEYLON-STATE-MORTGAGE-BANK-and-another-Respon.pdf
Sub&neris v. The Ceylon State Mortgage Bank
ass
1973Present : Deheragoda, J., Wimalaratne, J., and
Sirimane, J.
SUBANERIS, Petitioner, and THE CEYLON STATEMORTGAGE BANK and another, Respondents
S. C. 390/71—Application by way of Certiorari
Ceylon State Mortgage Bank Ordinance (Cap. 398), as amended byCeylon State Mortgage Bank and Finance (Amendment) Act. No. 33 0f 1968—Sections 70 B and 70 C—Conditional tran&fer ofan undivided share of a land—Failure of the transferor to complywith the condition—Vesting of ownership of the undivided sharein the transferee—Right of State Mortgage Bank to acquire-theshare—Effect of a partition action in respect of the land contain-ing the undivided share—Land Acquisition Act, s. 4 (6) —Partition Act, s.48 (1)—Certiorari.
Where, after a conditional transfer of an undivided share of aland is executed, the transferee becomes owner of that share uponthe failure of the transferor to-comply-with the condition, Section70 B (1) (d) of the Ceylon State Mortgage Ordinance authorisesthe State Mortgage Bank to acquire from the transferee (or hissuccessor-in-title) the undivided share on behalf of the transferor.
; Bat if the transferor 'makes his application to the Bank after theland.has "been partitioned and a divided lot int lieu fit the undividedshare has been allotted under the partition decree, -the divided lotcannot be" acquired hi terms of that" Section.
DEHERAGODA, J.— .'Subanena v. The Ceylon State Mortgage Bank
■22b
Application for a writ of certiorari to squash an ordermade by the Ceylon State Mortgage Bank.
On 25th November 1960 an undivided share of a land calledDelgahawatte was transferred by its owner, the 2nd respondentin the present certiorari application, on condition that if the sumof money received by him as consideration was repaid by him tothe transferee within a specified period, the share would be re-transferred to him. As the condition was not fulfilled by thetransferor, the transferee became the owner. On 9th February-1968 the present petitioner, who was a successor-in-title of thetransferee, filed a partition action for the partition of Delgaha-watte. On 25th July 1969, by final decree in that action, Lot 2was allotted to him. Subsequently, on 9th June 1971, he wasinformed by the Ceylon State Mortgage Bank that, upon anapplication made by the transferor after the final decree in thepartition action had been entered, the Bank had determined thatLot 2 would be acquired in terms of the provisions of ChapterVa of the Ceylon State Mortgage Bank Ordinance. The presentapplication was for the quashing of that determination.
K.Shanmugalingam, for the petitioner.
W. D. Gunasekera, for the respondent.
Cur. adv. wilt.
May 24, 1973. Dehebagoda, J.—
This is an application by way of certiorari for the quashing ofdetermination made by the Ceylon State Mortgage Bank, the1st respondent, to acquire from the petitioner, under the provi-sions of Chapter Va of the Ceylon State Mortgage BankOrdinance (Chapter 398 of the 1956 edition of the LegislativeEnactments of Ceylon) as amended by the Ceylon State MortgageBank and Finance (Amendment) Act No. 33 of 1968, (hereinaftersometimes referred to as “the Ordinance”), an allotment ofland marked Lot 2 which had been allotted to the petitionerunder the final decree in partition action No. P 4418 of theDistrict Court of Galle. The person at whose instance theacquisition is sought to be made is cited as the 2nd respondent.
On 1960.11.25 by deed No. 4475 the 2nd respondent transferredan undivided 3/8+5/32 share of a land called Delgahawatte toone Babun reserving to himself the right to obtain a re-transfer
230
DEHBRAGODA, J.—Subaneria v. The Ceylon State Mortgage Bank
within, a period of 1 1/2 years from that date. The 2nd respondentfailed to obtain a re-conveyance within the stipulated 11/2 yearsand thereafter Babun transferred his undivided 17/32 share ofthe land to one Arnolis by deed No. 13427 dated 1962.05.28, reserv-ing to himself the right to re-purchase-within a period of oneyear from the date of transfer. Babun having failed to exercisethe option to re-purchase within the stipulated time, Arnolistransferred the said undivided-share of the land to the petitionerby deed No. 5526 dated 1964.01.18. Four years later, on 1968.02.09,the petitioner filed a partition action, No. P 4418 in the DistrictCourt of Galle, for the partition of Delgahawatta. On 1969.07.25,by final decree in that action, Lot 2 in extent 1 acre 1 rood and28.17 perches was allotted to the petitioner.
The 2nd respondent had thereafter applied to the 1strespondent Bank for the acquisition under Chapter Va of theCeylon State Mortgage Bank Ordinance of the premises whichhad been transferred by the 2nd respondent with the reservationof a right of re-transfer by deed No. 4475 dated 1960.11.25 alreadyreferred to. The 1st respondent Bank thereupon informed thepetitioner of its intention to acquire Lot 2 in the final partitionplan, which had been allotted to the petitioner by the finaldecree. The petitioner sent in his written objections to theproposed acquisition and the 1st respondent Bank, after aninquiry, informed the petitioner by letter dated 1971.06.09 thatthe Ceylon State Mortgage Bank had determined that thepremises described in the Schedule to that letter, namely, “Lot2 of the land called Delgahawatte,” shall be acquired in termsof the provisions of Chapter Va of the Ceylon State MortgageBank Ordinance. The present application is for the quashing ofthat determination.
Learned counsel for the petitioner raised the following threepoints of law, which, according to him, arise on the abovefa6ts : —
The 1st respondent cannot acquire an undivided portion
of the premises in terms of section 70B of the CeylonState Mortgage Bank Ordinance, particularly becausepossession cannot be taken or handed over of an un-divided portion of a land under section 70C subsections
, (5) and (7) of that Ordinance.
The final decree in partition action No. P 4418 of the
District Court of Galle creates a new title in the peti-tioner to Lot 2 in the final partition plan and wipes outany previous-right, title and encumbrance on that lapd;and therefore the 1st respondent has no power~toacquire that lot under the Ordinance.
DEHERAGODA, J.—Subaneris v. The Ceylon Stale Mortgage Bank231
The premises transferred by the 2nd respondent on deed
No. 4475 dated 1960.11.25 were an undivided share ofDelgahawatta and the 1st respondent Bank cannot nowseek to acquire a divided portion of Delgahawatta interms of section 70B (1) (d) of the said Mortgage BankOrdinance.
Section 70B (1) (d) of the Ceylon State Mortgage BankOrdinance runs as follows :■—
“70B. (1) Subject to the provisions of subsection (2), thebank is hereby authorized to acquire the whole or any partor share of any agricultural, residential or business premises,if the bank is satisfied that those premises were, at any timenot earlier than the first day of January, 1952,—
transferred by the owner of such premises to any other
person after receiving from such other person a sumof money as consideration for such transfer and uponthe condition that, on the repayment by the transferor(hereinafter in this Chapter referred to as the“ original owner ”) of that sum with or withoutinterest thereon within a specified period, such otherperson will re-transfer those premises to the original' owner.”
•Section 70B (2) lays down a number of conditions in para-graph (a) to (e), upon which the Bank has to be satisfied beforea decision is taken to acquire such premises. Of these, paragraph(b) ..runs as follows : —
_ “ 70B. (2) No premises shall be acquired under subsection
–
'(b) unless an application in that behalf has been made tothe bank by the original owner of such premises orhis spouse or children ; I
I shall now proceed to consider the points of law raised bylearned Counsel. Regarding the point raised at (a), learnedCounsel for the petitioner points out that the provisions of section70C (4), (5)- and (7) speak of taking possession from a personin occupation or in possession of the premises after the making ofa vesting order, and that such an act in relation to undividedshares – is meaningless. I cannot see any difficulty in eitherhanding over or taking over possession of an undivided share ofa land. Such taking over and handing over possession need notbe physical; there can be a notional handing over of the rightswhich in law may be enjoyed by a co-owner of property. Section70B (1) clearly authorises the acquisition of “ the whole or any
DEHERAGrODA, J.—Subaneria v. 'the Ceylon Slate Mortgage
iJ,2
part or share of any agricultural, residential or businesspremises ”, and section 70C (4), (5) and (7) must be-deemed^bapply to an acquisition of a sharp as weU 22 fee whole of anyland. In any event, even if any difficulties might arise in givingeffect to the provisions of section 70C (4), (5) and (7) that byitself cannot negative the express intention jpf fep legislaturecontained in section 70B (1)- Learned Counsel also referred tothe case of Karunanayahe v. C. P. de Silva1 (70 N. L. R. 39J8) findtp section 4 (6) of the Land Acquisition Act in support of his viewthat an undivided interest in a land cannot be acquired underthe provisions of that Act. The acquisition under that Act is fora public purpose and unless a land within defined metes andbounds is acquired, it is not possible to fulfil that public purpose ;hence the necessity to acquire only a defined portion of landunder that Act. There is therefore no necessity to follow, in thecase of an acquisition under the Ceylon State Mortgage BankOrdinance, the same procedure as that prescribed for the acqui-sition of a defined portion of land under the Land AcquisitionAct.
Regarding the point raised at (b), there is considerable doubtas to whether the “ interests ” which the 2nd respondent claimsto have had at the time of the partition action are such as couldhave been asserted in such an action or could have been preservedintact either by being specified in the partition decree, as forexample in the case of a mortgagee’s interest, or notwithstandingit, as for example in the case of a monthly tenancy. Section7OB <2) (b) of the Ordinance states that no premises shall beacquired under that section unless an application is made in thatbehalf to the Bank by the original owner of such premises or hisspouse or children, and on the facts of this case as recited earlier,such an application had been made by the 2nd respondent onlyafter the final decree in the partition action had hgen enteredSection 48 (1) of the Partition Act (Cap. 69 pf the 1956 Editionof the Legislative Enactments) rashes .partition .decrees final andconclusive against all persons whomsoever, whatever right, titleor interest they have, or claim to have, to or in the land to whichsuch decrees relate. At the time the partition action was filed fee2nd respondent had a right only to make an application -to theBank for the exercise of its powers of acquisition of the undividedinterests in Delgahawatta end not a right to the land or aninterest in the land within the meaning of those expressions asused if section 48 (1) of the Partition Act. I am of the viewthat such a right or interest that might have accrued to fee 2ndrespondent could not have accrued to him. -until. at least, uponan application for acquisition in terms of section 70B, a vgsjgipg
4 {1068) 7.0 N.L.H. 438.
DEHERAGODA, J.—Subaneria v. The. Ceylon State Mortgage Bank
233
older uihder section 70C (2) had been made by the Bank. If thisvi&fr is correct, then the 2nd respondent had no interests whatso-ever in the land at the time of the partition action. The questionas to whether the “ interests ” of the 2nd respondent have beenwiped out by the final decree in the partition action does not,therefore, arise. If it was the intention of the Legislature toconserve in a partition decree, such a right as that claimed bythe 13t and 2nd respondents, I should have expected thatifit&fttion to have been expressed in no uncertain terms.
Regarding the point raised at (c), upon a perusal of deedNo. 4475 dated 1960.11.25 by which the 2nd respondent trans-ferred an undivided 3/84-5/32 share of Delgahawatta, it becomesclear that the premises transferred by that deed was only anundivided share of Delgahawatta, and the premises which were.undertaken to be re-transferred consist also of the same un-divided share of that land. Learned Counsel for the 1st respondentBank argues that Lot 2 is a divided portion of the land whichthe 2nd respondent originally owned in common with the othereo-ewners, having a right to a 17/32 share of every grain ofsand' on it, and therefore Lot 2 can now be equated to thatundivided share. I do not agree. Lot 2 is a new and separateentity that has emerged as a result of the final decree with itsown new boundaries and extent. It has nothing in common withthe original land though it is no doubt a part of it. The originalland partitioned—its boundaries, extent and the various un-divided interests held by co-owners—ceases to exist on theentering of the final decree. The identity of the original premiseshas been lost in the process of partition.
I accordingly hold that, as the law stands at present, it is onlythe premises consisting of the undivided share of the land whichhad been transferred by the 2nd respondent that the 1st respon-dent Bank is authorised to acquire in terms of section 70B (1) (d)of the Ordinance, and that the divided Lot 2 allotted to thepetitioner in partition action No. P 4418 of the District Court ofGalle is not the premises so transferred, and that it cannot beacquired in terms of that section.
It is interesting to note that in this case, deed No. 4475 was. executed on 1960.11.25 and the petitioner was not informed ofan application made by the 2nd respondent for the acquisition ofthe land under section 70B of the Ordinance until more thanten years later ; there does not appear to be any time-limitimposed by the Ordinance for making such an application, thusenabling such an application to be entertained by the Bank evenafter a considerably longer period has elapsed.
234WIMALARATNE, J.—Subaneria v. The Ceylon State Mortgage Bank
I make order quashing the determination of the 1st respondentBank to acquire Lot 2 in the final partition decree in case No. P4418 of the District Court of Galle. In the special circumstancesof this case I make no order for costs against the respondents.
WlMALARATNEj J.—
I have had the advantage of reading the judgment ofDeheragoda J. and I am in agreement with the order proposedby him. I wish, however, to add my own observations on ground(6) relied upon by learned Counsel for the appellant—namely,the effect of the final partition decree on the rights of therespondents.
Section 48 (1) of the Partition Act of 1951 has the effect ofmaking a final decree conclusive against all persons whomsoever,whatever right, title or interest they have or claim to have inthe land partitioned.
Section 9 of the repealed Partition Ordinance No. 10 of 1863made the decree for partition good and conclusive against allpersons whomsoever, whatever right or title they had or claimedto have had in the property partitioned.
The words “ right or title ” under the Partition Ordinance havebeen the subject of judicial interpretation on numerous occasions.Two decided cases seem to me to be relevant to the questionunder consideration. In Seedin v. Thediyas,1 53 New Law Reportsp. 63, a husband was held to have lost the “ interest ” which hehad in his wife’s property under the Married Women’s PropertyOrdinance (No. 18 of 1923). Where, therefore, a woman whopossessed an undivided share of a land prior to the commence-ment of that Ordinance was awarded in a partition decreeentered after the commencement of the Ordinance a divided lotin lieu of her undivided share she was held entitled to disposeof that divided lot without the consent of her husband.
In Sivapiragasam v. Vellaiyan,1 55 New Law Reports,p. 298, aco-owner’s right of pre-emption under the Thesawalamai washeld to have been extinguished by a decree for partition kirespect of the co-owned property. Gratiaen J. considered itpertinent to quote certain observations of Voet (18.3.9) on thescope of the jus retractus legalis (i.e., a right created by law or
* {1961} 55 N. L. B. 63.* {196i} 65 V. L.B-29S,
liaaamanickam v. Alfred
236
custom and not by agreement) whereby, in the Rhineland andin Delft, a co-owner’s right to pre-empt shares sold to a strangerwas recognised in former times:—
“Undoubtedly this right of superseding another who hasobtained the ownership in a legitimate mode, being adeviation from the common law and contrary also tofreedom of contractmust receive a strict- interpreta-
tion. ’’
Section 70B (1) of the Ceylon State Mortgage Bank Ordinance,as amended, must, in my view, be interpreted strictly. Thepremises the Bank is authorised to acquire is, therefore, theundivided 17/32 shares of Delgahawatte transferred by the 2ndrespondent on deed No. 4475 of 25.11.60. That share ceased toexist after the decree in the partition action was entered. Theshare allotted to the co-owner in lieu of that undivided share,namely Lot 2 of Delgahawatte, is not premises the Bank isauthorised to acquire under the statute.
Such an interpretation has also the advantage of giving effectto the. conclusiveness of partition decrees, based on the principlethat such decrees create a new title in the party absolutely goodagainst ail other persons whomsoever.
Sirimane, J.—I agree.
Application allowed.