v.BANK OF CEYLON
COURT OF APPEAL.EDUSSURIYA, J. (P/CA).UDALAGAMA, J.
CALA No. 208/99.
DC COLOMBO 5276/SPL.02nd MARCH. 2000.
Bank of Ceylon Act – Ss. 19, 26 – Business Turnover Tax – Sale by publicauction of mortgaged property – Is the Bank entitled to recover BusinessTurnover Tax?
S. 19 of the Bank of Ceylon Act must be considered with S.26. S.26specifically entitles the Bank to recover in addition to the amount due onany loan, over-draft, advance or any other recommendation all moniesexpended by the Bank relevant to the transaction.
This section is wide enough to include B.T.T. and the Bank is entitledto pass a Resolution in terms of S. 19 to recover dues by way of B.T.T. too.
Per Udalagama, J.
“In Debt Recovery matters it would not be correct for the courts to holdagainst the intention of the legislature on technicalities."
APPLICATION for Leave to appeal from an order of the District Court ofColombo.
Ikram Mohamed P.C.. with T. Wyegunawardena for Plaintiff-Appellant.Ms. M.N.B. Fernando. S.S.C. for Defendant Respondent.
Cur. adv. vull.
April 26, 2000.UDALAGAMA, J.
The plaintiff-appellant mortgaged to the Respondent-Bank the property described in the schedule to the plaint by
Sri Lanka Law Reports
1200012 Sri L.R.
mortgage bond No. 1384 dated 14. 07. 1998 as security for therepayment of over-draft and other financial facilities. Indefault, the Respondent-Bank by resolution of its Board ofDirectors resolved to sell the said property for the recovery ofthe principal sum and interest due on the aforesaid bond.Subsequently the Plaintiff-appellant instituted the aboveaction No. 5276/96 spl, seeking a declaration that theresolution referred to above is unlawful and/or void and thatthe Respondent-Bank is not entitled to sell by public auctionthe said property. The appellant also claimed interim relief.Learned District Judge on 07.09.99 dismissed the applicationfor interim relief. Being aggrieved the appellant seeks from thiscourt leave to appeal against the aforesaid order of the learnedDistrict Judge dated 08. 09. 99 and also interim relief.
This court by its order dated 24. 11. 99 refused interimrelief. This order pertains to the appellant's application forleave to appeal. The sole contention of the learned President'sCounsel who appeared for the appellant was that as stated inparagraph 6 of the objections of the Respondent-Bank dated19. 03. 99 that the Respondent-Bank was not entitled torecover Business Turn Over Tax as per section 19 of the Bankof Ceylon Act. However, on a perusal of the relevant section ofthat Act it is our view that as stated in section 19 the contentstherein must be considered with section 26 of the same Act.Section 26 specifically entities the Bank to recover in additionto the amount due on any loan, over- draft, advance or any-other accomodation, all monies expended by the Bankrelevant to the transaction. Thus it is also our view that thissection is wide enough to include Business Turn over Tax andthat the Bank was entitled in law to pass a resolution in termsof section 19 of.the Bank of Ceylon Act, to recover dues by wayof Business Turn over Tax too. Furthermore, the contents ofparagraph 4 of documents C11, C2 and C3 casts an obligationon the appellant to pay any tax levyable on the amount of theover-draft or other facilities obtained from the Bank.
Zubair v. Bank of Ceylon (Udalagama, J.)
In the aforesaid circumstances, we find no merit in thisapplication of the appellant and accordingly refuse leave toappeal with costs fixed at Rs: 3150/-.
Before parting with this order it would also be appropriateto mention that in Debt Recovery matters it would notbe correct for courts to hold against the intention of theLegislature on technicalities.
EDUSSURIYA, J. (P/CA) -1 agree.