WEERASOORIA, Appellant, and VANDER POORTEN et al., Respondents

111-NLR-NLR-V-50-WEERASOORIA-Appellant-and-VANDER-POORTEN-et-al.-Respondents.pdf


Weerasooria v. Vander Poor ten
433
1948Present: WijeyewardeneWindham J. andBasnayake J.WEERASOORIA, Appellant, and VANDER POORTEN et al.,Respondents
S. C. 121-122—D. C. Colombo 60Z
Debt Conciliation Ordinance—Meaning of term “ debtor ”—Matter pendingbefore Board—Jurisdiction of District Court to entertain action inrespect of it—Ordinance No. 39 of 1941 as amended by OrdinancesNo. 40 of 1941 and No. 9 of 1943, ss. 14 and 56—Scope of CourtsOrdinance, s. 71—Debt—Payment twice over—Court will never order—Costs—Proctor's fees and charges—Gan be matter of private contract—Civil Procedure Code, ss. 214 and 215.
An application can be made to the Debt Conciliation Board, undersection 14 of the Debt Conciliation Ordinance, only by a debtor who isin debt at the time he makes his application. Where, therefore, amortgagor made application denying that he owed any money underthe mortgage bond and stating that, in fact, a sum of money would befound due to him from the mortgagee on an accounting.
Held, that the Debt Conciliation Board had acted ultra vires inentertaining the application -of the mortgagor.
Held further : (i) The law will never compel a person A to pay asum of money a second time to B when he has already paid it to Cunder the sanction of a court of competent jurisdiction ; but A, whoseeks to benefit by this principle, must have done all that was incumbenton him to resist the payment to C.
Sections 214 and 215 of the Civil Procedure Code do not preventa Proctor from entering into an agreement with his client that he shouldbe paid on a different basis and recovering from his client by an actionat law all fees due to him in terms of such an agreement. Such anagreement need not be in writing under our law, but the burden will beon the Proctor to establish its reasonableness and equity.
(Basnayake J. dissenting) By virtue of section 71 of the CourtsOrdinance a District Court can, with the consent of parties, entertainan action in respect of a matter pending before the Debt ConciliationBoard, notwithstanding the provisions of section 56 of the Debt Concilia-tion Ordinance.
^^.PPEAXi from a judgment of the District Court, Colombo. Thiscase was referred to a Bench of three Judges owing to difference ofopinion between the two Judges before whom it had been previouslylisted.
A. Hayley, K.C., with H. V. Perera, K.G., N. K. GTtoksy, K.C.,and I. Misso, for the 1st defendant, appellant in No. 122 and respondentin No. 121.—The preliminary, question which arises in this case is whetherthe District Court had jurisdiction to entertain this action.
Section 56 of the Debt Conciliation Ordinance, No. 39 of 1941, enactsthat “ no civil court shall entertain any action in respect of any matterpending before the Board ”. This action was instituted, on April 12,1944, and at'that date there can be no doubt that the subject-matterof the plaint was pending before the Debt Conciliation Board. Theapplication to thS Board by the plaintiff was made on May 27, 1943,
19—L.
J, JT. A 89981 (7/49)
434
Weerasooria v. Vander Poorten
and the Board dismissed that application only on August 1, 1945. Underthe provisions of-the Ordinance No. 39 of 1941, the Board could havecancelled its order of dismissal within three months of that order. Thematter of the application of the plaintiff was pending before the Boardup to November 1, 1945. Therefore this action is clearly barred bysection 56 of Ordinance No. 39 of 1941.
The District Judge held that objection to jurisdiction must be taken inthe answer at the earliest opportunity and, as that has not been donein this case, apparently thought that there has been a waiver of theobjection by the first defendant. He therefore rejected the contentionof the 1st defendant that the court had no jurisdiction when it wasput forward later. But the District Judge is clearly wrong in thatrespect. In such cases consent or acquiescence cannot confer juris-diction. A proceeding under the Debt Conciliation Ordinance, No. 39of 1941, is a sort of limited insolvency proceeding. See Lawrence, v.WilcocJc1. See also The British Wagon Company, Limited v. Gra/y1 2,The Queen v. Arundel Rogers and another 3. Where a statute specificallyousts jurisdiction it is not possible for parties to confer jurisdictionby consent or acquiescence. See Norwich Corporation v. Norwich ElectricTramways Company 4 * ; Ledgard v. Bull B.
Section 71 of the Courts Ordinance Code cannot help the plaintiff inthis case. The finding of the District Judge that section 71 appliedto the present case is not correct. It is elementary that the words of astatute must be construed according to the context. In the contextthe word jurisdiction in section 71 means only the particular jurisdictionof a particular District Court as is contemplated by section 63 of theCourts Ordinance and by section 9 of the Civil Procedure Code. Thereis a distinction between absolute want of jurisdiction and an irregularassumption of jurisdiction. In the latter ease objection must be takenin limine litis. Otherwise objection is deemed to be waived. In theformer case objection can be taken at any time. See Malamiar Thambyv. Abdul Coder6; Jusey Appu v. TJkkurala1 ; Fernando v. Fernando8.Counsel also cited Samsudeen Bhai -v. Qunawardane 9 ; Parangoden v.Ramon et al. 10
J.R. V. Ferdinands, with B. H. Aluwihare, P. NavarOtnarajah and
T. Samarawickreme, for the plaintiff, appellant in No. 121 and respon-dent in No. 122.—In regard to the question of the jurisdiction of theDistrict Court being ousted by section 56 of the Debt Conciliation Ordi-nance it is submitted that the whole proceedings before the Board wereultra vires for the following reasons. Proceedings before the Board arecommenced by a debtor going before the Board under section 14 of theOrdinance No. 39 of 1941.“ Debtor ” has been defined in section 63
of the Ordinance as a person who has created a mortgage or charge overan agricultural property and whose debt in respect of such propertyexceeds the prescribed amount. In this matter the plaintiff went before
1(IS40) 11 A. and E. 941.
2L. B. (1896) 1 Q. B. D. 35.
3(1888) 57 L. J. Q'.B. D. 143.
4(1906) 75 L. J. K. B. 636.
(1887) I. L. B, 9 Allahabad 191,
6 (1838) Morgan's Digest 223.2 (1859) 3 Lorenz 280.
(1859) 3 Lorenz 247.
(1935) 36 N. L. M. 367.i° (1936) 39 N. L. B. 47.
WUEYEWAJEtDEISTE A.G.J.—Weerasooria v. Vander Poor ten
435
the Board on the footing that there was no debt due from him on themortgage or on any other transaction. The Board had therefore nojurisdiction to entertain the application of the plaintiff who was nodebtor as required by the Ordinance and consequently all the proceedingsbefore the Board on the plaintiff’s application were ultra vires. See Qumar-Ud-Din v. Krishnan Das1. Even if the Board had jurisdiction to entertainplaintiff’s application the Board’s functions ceased on March 27, 1944,when an order of dismissal should have been made. Proceedings afterMarch 27, 1944, therefore were in any event ultra vires. On the questionof ouster of jurisdiction of the District Court, it is not a question ofabsolute want of jurisdiction because the District^ Court ordinarily hasjurisdiction in respect of that subject-matter but is only an irregularexercise of jurisdiction. But such irregularity can be and was cured bythe conduct of the 1st defendant and specially by the 1st defendantasking for a hypothecary decree, thus submitting to the jurisdictionof the court. See Gfurdeo Singh v. Chandrikah Singh 2 ; Bava v. Thomas 3;Mawindra Chandra Nandi v. Secretary of State for India 4.
F. A. Hayley, K.C., in reply.—The plaintiff went before the Boardin respect of two mortgages. As far as the mortgage debts were con-cerned there is no doubt that the plaintiff was a debtor. Mortgagesand mortgage debts cannot be wiped out by unliquidated sums due asfees, &c.. Bava v. Thomas (supra) is a single judge case and the law is' notcorrectly stated there. The other cases cited on behalf of the plaintiffon this question are not in point.
Cur. adv. vult.
December 17, 1948. Wijdyewaroine A.C.J.— „
There are two connected appeals—appeal No. 121 by the plaintiffand appeal No. 122 by the first defendant.
The plaintiff is a Proctor and Notary. He practised his professionin Kandy from 1907 to 1916, when he left for Colombo where he hasbeen in active practice up to date.-
The plaintiff instituted this aetion bn April 12, 1944, against thedefendants as the executors of the last will of Mr. A. J. Vander Poorten(hereinafter referred to as Mr. Vander Poorten) who died in December,1937. The third defendant died during the pendency of this action.
As executor of the last will of his father, the plaintiff borrowedEs. 50,000 from Mr. Vander Poorten at 10 per cent, per annum. Theplaintiff bound himself personally and as such executor on mortgagebond P 1 of March 21, 1915, and for the repayment of the loan hypothe-cated a property known as Dangolla Estate belonging to the estate ofhis father.
On February 18, 1922, the plaintiff executed bond P 2, binding himselfpersonally and as executor aforesaid for the repayment of a sum ofEs. 24,630 -50 at 10 per cent, per annum to Henri Vander Poorten(hereinafter referred to as Henri) son of Mr. Vander Poorten. By thatbond the plaintiff effected a secondary mortgage over Dangolla Estate.
1 (1945) 32 A. I. R. (Lahore) 223 at 226.3 (1945) 46 N. L. R. 217.
(1909) 36 I. L. R. Calcutta 193.i (1907) 34 I. L. R. Calcutta 257 at 282.
436
WIJEYEWABiDENE A.C.J.— Weerasooria v. Vander Poorten
In or about June, 1924, Mr. Vander Poorten entered into possessionof Dangolla Estate in pursuance of an arrangement between him andthe plaintiff. The possession of that estate was surrendered to theplaintiff on July 10, 1943, by the defendants.
On August 10, 1924, the plaintiff made in favour of Mr. VanderPoorten a promissory note for Its. 20,037 -53 payable on demand at10 per cent, per annum.
The plaintiff acted as Proctor and Notary for Mr. Vander Poortenfrom about 1916 up to his death. He is still continuing to attend tosome legal work which he had undertaken before Mr- Vander Poorten’sdeath.
In the plaint the plaintiff admitted that he was liable to pay—
on P 1 Rs. 50,000 as principal and Rs. 145,138 -88 as interest up
to April 10, 1944, and
on the promissory note, Rs. 20,037 -50 as principal and Rs. 35,430 16
as interest up to April 10, 1944.
He stated that he was entitled to claim credit in the following sums :—
(а)Rs. 32,265 on account of payments made by him to Mr. Vander
Poorten from April, 1915, to June, 1924 ;
(б)Rs. 120,476 -64 being the amount of nett income received by
Mr. Vander Poorten and the defendants from Dangolla Estatefrom June, 1924, to April, 1943, together with a sum ofRs. 120,338 -86 as interest on such income during that period ;
Rs. 7,500 as estimated nett income received by the defendants
from Dangolla Estate from April, 1943, to July 10, 1943 ;
Rs. 90,223 as fees due to him for work done by him as Proctor
and Notary.
The plaintiff asked for a cancellation of the bond P 1 and for judgmentfor Rs. 120,196 -93.
The first defendant filed answer stating that in addition to the plain-tiff’s liabilities on the bond P 1 and the promissory note, the plaintiffwas liable to pay Mr. Vander Poorten
on bond P 2, the principal, Rs. 24,630 -50, and interest at 10 per
cent, as Henri held the bond P 2 and “ all the rights, interests,claim -and demand thereon as agent of and in trust ” forMr. Vander Poorten, and
Rs. 5,953 -together with interest at 10 per cent, aggregating to
Rs. 8,397 -01 on account of money belonging to Mr. VanderPoorten recovered by the plaintiff as his Proctor and not paidover to' Mr. Vander Poorten. (This account is hereinafterreferred to as the Sundry claims account.)
The first defendant pleaded further :
(a) that the cash payments made by plaintiff to Mr. Vander Poortenfrom April, 1915, to June, 1924, in payment of the interestdue on the bonds P 1 and P 2 amounted to only Rs. 27,588 ;
WIJEYEWAJiJDENE A.C.J.—Weerasooria v. Vander Poorten
437
that the plaintiff was not entitled to claim interest on Rs. 120,476 -64
—the nett income from Dangolla Estate from June, 1924, toApril, 1943—as that income was set off against the debts of theplaintiff;
that the income from Dangolla Estate from April, 1943, to July 10,
1943, was only Rs. 2,993 -12 ;
that the fees due to the plaintiff up to July 31, 1934, were set off
in liquidation of the entirety of the plaintiff’s liabilities onbond P 2', the promissory note and the sundry claims account;
that the plaintiff’s claim for fees prior to April 12, 1941, was pre-
scribed; and
(/) that the plaintiff could not maintain any claifn for fees in respectof his services as a Proctor as he had failed to comply with theprovisions of section 215 of the Civil Procedure Code.
The first defendant asked for the dismissal of the plaintiff’s actionand claimed in reconvention judgment for Rs. 60,291 together withinterest on Rs. 50,000 at 10 per cent, per annum from April 11, 1944,and a hypothecary decree for that sum in terms of bond P 1.
The second and third defendants filed a separate answer in conflictwith the answer of the first defendant/ They stated that they werewilling to cancel the bond P 1 and moved the Court to make an ordertc for the accounts between the plaintiff and the estate of the late Mr. A. J.Vander Poorten to be looked into on the footing of the averments con-tained in (their) answer and that judgment be entered thereafter in termsof the said accounting ”.
Their answer contained the following allegation :—
“ These defendants state that the transactions between the plain-tiff and the said A. J. Vander Poorten were the subject-matter of aninquiry before the Debt Conciliation Board. The Board after lookinginto the accounts between the parties arrived at the conclusion that theobligations of the plaintiff to the estate of the said A. J. Vander Poortenhad been satisfied and that the said estate should pay .the plaintiffa sum of Rs. 60,000 which sum the plaintiff refused to accept asinsufficient, these two defendants being willing to accept the saidconclusion while the first defendant objected thereto.”
The plaintiff filed a replication
(а)denying that Henri held the bond P 2 as agent of or in trust for
Mr. Vander Poorten ;
(б)stating that he signed the bond P 2" without receiving any
consideration under pressure from and by reason of the undueinfluence of the said A. J. Vander Poorten ” ;
denying that he owed any sum at all to Mr. Vander Poorten onthe Sundry claims account.
On August 22, 1945, the plaintiff filed an amended plaint. Thatamended plaint differed from the original plaint only in containing anadditional averment that the defendants were liable in law to rendera full and true account of all moneys received from or on behalf of theplaintiff.
1»J. N. A 89081 (7/49)
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W1JJbi YiH WAKDJfiNJS A.C.J.—Weeraaooria v. Vander Poorten
Before dealing with the facts of the case I shall deal with a question-of law that was argued at some length before us. It was contended onbehalf of the first defendant that in view of section 56 of the Debt Con-ciliation Ordinance, No. 39 of 1941, the District Judge should not haveentertained the present action, as certain proceedings instituted by theplaintiff under that Ordinance were pending at the time. I give in thenext paragraph a brief statement of facts on which this question of lawhas to be decided.
On May 27, 1943, the plaintiff made an application 1 D 20 to the DebtConciliation Board referring to his liabilities on bonds P 1 and P 2 andstating that, though the first defendant was making a claim Rs. 183,384 -85nothing was due from him as the debt had been “ discharged by paymentand appropriation of income of mortgaged premises and set off of remune-ration due for professional services ”. The preliminary hearing beforethe Board was on June 14, 1943, when the applicant filed before theBoard the document 1 D 19 giving certain details of the transactionsbetween him and Mr. Vander Poorten and stating that “ on an accountinga very large sum will be found to be due to the applicantafter the complete satisfaction of the claims against the applicant ”.After making various interim orders and holding a number of sittingsthe Board^suggested on February 16, 1944, that the defendants shouldcancel the “ existing bonds ” and pay the plaintiff Rs. 60,000. Theplaintiff and the first defendant were allowed time till March 6, 1944,to consider the suggestion of the Board. The plaintiff wrote to theBoard on February 28, 1944, that he was unable to accept the “ recom-mendation ” of the Board. It was, however, decided by the Board onMarch 6, 1944, .to give the parties further time till March 27, 1944, toinform the Board “ if they had arrived at a settlement ” {vide 1 D 50).The parties made no such communication on or before March 27, 1944,and the Board took no action until June 13, 1944, when the Board decidedto make no order. On June 22, 1945, the plaintiff moved the Boardto enter an order dismissing his application as on March 27, 1944. OnAugust 1, 1945, the Board made an order dismissing the plaintiff’sapplication for conciliation as from August 1, 1945 {vide 1 D 49).
The suspension of the jurisdiction of the ordinary Civil Courts iseffected by section 56 {a) of the Ordinance only if “ a matter ” is pendingbefore the Conciliation Board. It must necessarily be a matter whichthe Conciliation Board has jurisdiction to consider. It is section 14of the Ordinance which empowers a debtor to invite the Board to exerciseits jurisdiction. That section states that “ a debtor may make an appli-cation to the Board to effect a settlement of the debts owed by him toall his secured creditors or any one or more of them ”. Now section 63defines a “ debtor ” as a person—
who has created a mortgage or charge over an agricultural property
or any part thereof, and
whose debts in respect of such property exceed the prescribed
amount.
The words italicized by me show that the legislature contemplateda “ debtor ” who was in debt at the time he made his application. This
WUE1 Jbi W AEDENE A.C.J.— Weerasooria v. V ander Poorten
439
is made clear by the difference in the tenses of the verbs in (a) and (6)above. When the plaintiff filed his application 1 D 19 he did not admitthat he owed any money at that time, and, in fact, he stated that a largesum of money would be found due to him from the defendants on anaccounting. The plaintiff cannot, therefore, be regarded as a debtorempowered to make an application under section 14 (1). Nor can hisapplication be regarded as an application under section 14 (2) as underthat sub-section only a secured creditor could make an application.Section 37 may, at first sight, appear to be irreconcilable with the viewtaken by me. I think that section 37 refers to a dispute as to theexistence of a debt due to “ a creditor ” who has been brought into theproceedings through an order of the Board and not to a dispute as to theexistence of the debts due to the secured creditor or creditors againstwhom the application was made. Section 17 (c) tends to throw somelight on this as that section requires that “ every application made by adebtor to the Board shall give particulars of the debt or debts in respectof which relief is sought”. The Board, therefore, acted ultra vires inentertaining the application of the plaintiff. The Board is a tribunalof special jurisdiction and its powers are strictly limited by the provisionsof the Ordinance. Moreover, the effect of section 56 being to interferewith the jurisdiction of the ordinary Civil Courts, that section must beconstrued strictly. The view I have expressed derives support fromthe decision in Qwmar- ZJd-Din v. Krishnan Das1.
In that case Qumar-TJd-Din presented an application to a DebtConciliation Board against Krishnan Das in whose favour he had executedtwo mortgage bonds. In the application it was stated that the mortgageehad been receiving the rents of a part of the mortgaged property for anumber of years and had been living in another part of the propertyfre© of rent and that as a result the entire mortgage debts had been wipedout. He asked for a finding that nothing was due from him but addedthat if the Board found any sum was due from him, the mortgagee shouldbe ordered to receive payment of such sum by instalments. In thecourse of their judgment the learned Judges who constituted the FullBench of the Lahore High Court said—-
“ If the applicant states definitely that the entire debt due fromhim has been wiped out by means of repayments made by him hecannot be regarded as a person who owes a debt. If he adds in hisapplication that if the Board comes to the conclusion that any debtis still due from him instalments may be fixed for the payment of sucha debt, it does not make any difference at all. The applicant byasking for instalments does not admit that a* debt is due from him.”
-Even if the Board had jurisdiction to entertain the plaintiff’s appli-cation, it seems to me that the Board acted ultra'vires in continuingthe proceedings after March 27, 1944. On February 16, 1944, “ certaindefinite terms were suggested by the Board as the basis for a settlement ”(vide 1 D 50). The plaintiff and the first defendant wanted time toconsider the proposed suggestion and the Board allowed them time tillMarch 6, 1944. The plaintiff wrote to-the Board on February 28, 1944,
1 (1945) 32 A.I.S. {Lahore) 223.
440 WIJEYBWA!BI>E!lSrE A.C.J.-—Weerasooria v. Vander Poorten
that h© was unable to accept the recommendation of the Board. Atthe meeting of the Board on March 6, 1944, at which the parties wererepresented by their Counsel the ‘ ‘ parties were asked to inform theBoard before 27th instant if they arrived at a settlement ” (vide 1 X) 49).When the parties failed to inform the Board on March 27, 1944, that theyhad reached, an amicable settlement, the Board should have dismissedthe application under section 32 (2) of the Ordinance.
Moreover, this objection to the jurisdiction of the District Court toentertain the present action was neither pleaded in the answers norformulated as an issue. It was raised for the first time by the firstdefendant’s Counsel at the close of his address in the District Court.It was contended before us on behalf of the first defendant that we havehere an absolute want of jurisdiction and not merely an irregular assump-tion of jurisdiction and that therefore consent of parties could not givejurisdiction to the District Court to entertain this action. But it hasto be noted that the District Court has jurisdiction to entertain anaction of this nature and that section 56 of the Debt Conciliation Ordi-nance enacted merely that the District Court should not entertain suchan action if such action was in respect of a matter pending before theDebt Conciliation Board. It is not as if the District Court assumed ajurisdiction which it never possessed. Several English and Indiandecisions were cited by both parties. But it does not appear from thosedecisions that the Judges in those cases had to consider the effect ofa provision similar to section 71 of the Courts Ordinance. That sectionenacts—
“ Whenever any defendant or accused party shall have pleadedin any cause, suit, or action, or in any prosecution brought in anyDistrict Court, without pleading to the jurisdiction of such DistrictCourt, neither party shall be afterwards entitled to object to thejurisdiction of such Court, but such court shall be taken and held tohave jurisdiction over such cause, suit, action, or prosecution :
Provided that where it shall appear in the course of the proceedingsthat the cause, suit, action, or prosecution was brought in a courthaving no jurisdiction intentionally and with previous knowledgeof the want of3 jurisdiction of such court, the Judge shall be entitledat his discretion to refuse to proceed further with the same, and todeclare the proceedings null and void.”
It was argued for the first defendant that this section so far as it appliedto civil cases should be restricted to actions which have been broughtin a particular District Court when the Court having territorial juris-diction over the actions is another District Court. It was said that,if the section was not given a restrictive interpretation as indicated above,it would be possible for parties to obtain a decree for divorce in a Courtof Requests by the defendant acquiescing in the action being entertainedby the Commissioner of Requests. That argument however ignoresthe fact that section 71 is one of the sections in Chapter 6 of the CourtsOrdinance dealing with District Courts and does not refer to an actionin a Court of Requests. Nor do I think that Samsudeen Bhai v. Guna-wardene (1935) 37 New Law Reports 367 and Parangoden v. Raman et al.
WIJE YE WAliDENE A.C. J.—Weerasooria v. Vander Poor ten
441
(1936) 39 New Law Reports 47 are helpful in construing section 71,as the decisions in those cases depended on the stringent provisions ofsection 3 of the Public Servants Liabilities Ordinance.
For the reasons given by me I answer the preliminary question raisedby the first defendant’s Counsel in favour of the plaintiff.
I shall now proceed to consider the questions that arise between theparties with regard to (i) the secondary bond P2, (ii) the promissorynote, (iii) the sundry claims account, and (iv) the fees due to plaintiffup to 1934. I shall then consider the question whether the plaintiffdid or did not accept the arrangement of Mr. van der Poorten to set offhis claim (iv) against Mr. van der Poorten’s claims (i), (ii) and (iii).I may add that the pages referred to in the course of my judgment arethe pages as numbered in the typed copy of Judge’s brief given to me.There are two questions regarding the secondary bond P2—
(а)What was the extent of the plaintiff’s liability on the bond ?
(б)To whom was he liable on the bond ?
As regards consideration P2 states—
“ Whereas I the said Obligor as such Executor as aforesaid havingno funds to pay a certain portion of the interest payable upon thesaid Bond No. 1484 (PI) due up to December 31, 1921, to the saidAntonie Joseph van der Poorten have requested Henri van der Poortenof Greenwood Galagedera aforesaid to lend and advance to me thesaid Obligor as such Executor the sum of Rupees Twenty-four thousandsix hundred and thirty and cents fifty, for the purpose hereinbeforementioned”.
It will be noted that P2 does not state that the arrears of interestat that time on PI amount to Rs. 24,630 50. At the execution of P2,a cheque P24 issued by Henri in favour of the plaintiff and endorsedby the plaintiff was delivered to Mr. van der Poorten. That chequewas never cashed but on receipt of the cheque Mr. van der Poortenmade entries in his books—(i) giving plaintiff credit in a sum ofRs. 20,077-98 said to be due from the plaintiff at the date as arrears ofinterest on PI and (ii) cancelling an alleged liability of the plaintiff to payRs. 4,552-52 on account of a debt of Mr. F. L. Goonewardene. Theplaintiff’s case, when he was giving evidence in chief, was (i) that thearrears of interest due on PI at the time of execution of P2 amounted toonly Rs. 8,004 {vide page 74) and (ii) that he never undertook to pay thedebt of Mr. F. L. Goonewardene. According to that contention theonly extent of his principal obligation on P2 would be Rs. 8,004 and notRs. 24,630-50. With regard to the arrears of interest the plaintiff’sposition was that the interest on Pi up to February 18, 1922 (the date ofexecution of P2) would amount to Rs. 34,470 approximately at 10 percent, simple interest and that he paid Mr. van der Poorten various sumsaggregating to Rs. 25,815 in part payment of that interest. Even onthese facts the arrears of interest at the time of the execution of P2would be Rs. 8,655 and not Rs. 8,004 as stated by the plaintiff. Thebooks of Mr. van der Poorten show that the plaintiff made paymentsamounting to Rs. 25,815 but only a sum of Rs. 21,138-20 was credited
442
WXJE’XEWAKDENE A.C..T.— Weeraaooria v. Vander Poorten
on account of interest on PI and that the balance Rs. 4,676-80 wascredited on account of a separate transaction called the Ismail trans-action (vide P 21). The dispute between the parties on this point wasthat Mr. van der Poorten -acted wrongly and against the clear directionsof the plaintiff in appropriating only a sum of Rs. 10,323 "20 out of asum of Rs. 15,000 paid by plaintiff on June 17, 1920, towards theliquidation of interest on PI. Though he took up this position in hisevidence-in-chief, he was compelled to «dmit under cross-examinationthat he had been “rightly credited in his account with Rs. 10,323-20as a cash payment instead of Rs. 15,000 (Vide page 103). I shall dealin greater detail with the plaintiff’s evidence on this point when I considerthe question how far I could rely on the unaided memory of the plaintiffas a safe guide in deciding any material question in dispute between theparties. On the evidence, therefore, of the plaintiff which I havereferred to, the balance arrears of interest on PI on February 18, 1922,would be Rs. 13,331*80 (Rs. 8,655 Rs. 4,676*80) and not Rs. 8,004as originally stated by him. According to the defendants the balancearrears of interest amounted to Rs. 20,077-98. That difference is dueto the fact that Mr. van der Poorten has calculated the interest on PIup to February 18, 1924, at 10 per cent, compound interest and not at10 per cent, simple interest as set out in PI. The question we haveto consider at this stage is whether in spite of PI the plaintiff agreed topay compound interest for the period ending February 18, 1924. NowMr. van der Poorten’s books show unmistakably that he calculated theinterest regularly as compound interest when the plaintiff made defaultin payment of interest on the due dates. It is not denied that the plaintiffreceived statements of account from time to time (vide page 89). In facthe knew that Mr. van der Poorten “ got back his investments withcompound interest ” when the interest was not paid regularly (videpage 91). There is nothing to show that at any time before the executionof P2 the plaintiff objected to his being charged compound interest.Above all, there is the fact that the plaintiff executed the bond P2. Theplaintiff was at the time a lawyer with a great deal of experience andhad then been practising for nearly seventeen years. Apart from hiswork for other clients his professional work for Mr. van der Poortenwas in respect of important matters involving large sums “ runninginto lacs ” (vide page 82). He was not only a practising lawyer but was agentleman who was personally dealing in large land transactions involvinglarge sums of money, e.g., purchase and subsequent sale of WeveltalawaEstate (vide page 72). The evidence given by him and especially theanswers given by him when closely cross-examined show him to be notonly very intelligent but one who is not easily ruffled (vide for instancepages 91, 92, and 93). It is admitted by him that “ a few days must havepassed between that date Mh. van der Poorten suggested the secondary-bond and the dates of its preparation and actual execution ” (vide page 85)-The Notary attesting the bond was Mr. F. L. Goonewardene a “ goodfriend ” of his whom he describes as a “ good man ” having a “ verygood reputation ” as a lawyer (vide page 84). It was not a bond whichwas drafted in a hurry and submitted for plaintiff’s signature. It hadbeen prepared by a well-known Counsel in Colombo, Mr. Advocate Samara-
WXXEYEWARDEISrE A.C.J.—Weerasooria v. Vander Poorten
443
wickrema, for Mr. Goonewardene (vide page 84). When he was asked incross-examination how in all these circumstances he came to executebond P2 for a sum much larger than what according to him was duefrom him, his answer was—
“ In the course of those days (i.e., the days between the suggestionthat a bond should be executed and the date of execution) I did notlook up my cheque counterfoils to find out how much interest I hadpaid and how much I was in arrears. I took it for granted thatMr. van der Poorten would not get me to sign a bond for a largersum than was due. I did not address my mind to the matter. Thebond was put before me and I signed”. (Vide page 85).
Continuing his evidence he said—
“ It did not strike me that the arrears of interest was half of theprimary bond. I know now that it was not anything like that figure.I cannot recollect what my state of mind at that time was. I washaving a strong bout of malaria and I signed this. I will not sayany more ”. (Vide page 86).
He had further stated earlier—
“ We did not discuss what the arrears of interest were (Vide page 83).
As regards the debt of Rs. 4,552-52 due by Mr. F. L. Goonewardenewhich is a part of the consideration in bond P2, the plaintiff’s positionis that he did not take over the debt. There is, as stated above, the factthat the plaintiff signed the bond P2 for Rs. 24,630 ‘50 which includedthis sum. Mr. van der Poorten himself has made a contemporaneousentry in his books crediting Mr. F. L. Goonewardene with this sum asfollows :—
“ By remit, a/c. int. by Mr. D. E. Weerasuriya—Rs. 4,552 50”.
Mr. van der Poorten who is referred to as-“the old gent” in thejudgment of the District Judge has, no doubt, been described as a “ hardman ”. But there has not been the slightest suggestion that he was adishonest man. No reason has been given why he should have trans-ferred the liability of Mr. F. L. Goonewardene to the plaintiff dishonestly.Of course it is argued for the plaintiff that there was no reason for theplaintiff to take over his debt. But the plaintiff’s own evidence showsthat he has taken over other persons’ debts on other occasions. In thecourse of the various complicated transactions in which he was personallyinterested the plaintiff has admittedly signed a promissory note forRs. 20,037 -53 in 1924 “ in respect of a friend’s liability ” (vide page 66).
In seeking to explain his action in signing P2 for Rs. 24,630-50 theplaintiff said in examination-in-chief'—
“ (a) He (Mr. van der Poorten) pressed me to sign that bond on thefooting that a large sum of money was due by way of arrears of interest.At that time my payments of interest had not been regular and Ithought it wise not to refuse to sign the bond ”. (Vide page 63.)
444
WIJiyYEWAJRDJEjSJbi A.C.J.—Weerasooria v. Vunder Poorten
“ As far as I can remember the secondary bond was not takenseriously by me …. I gave a secondary bond for arrears ofinterest. I bad to accept his dictation in the matter …. I didnot refuse to sign the bond …. as he would have sold me up ”.
(Vide page 64.)
“I signed the bond for Rs. 24,630 at his request to placate the
old gentleman (Mr. van der Poorten) as he was insisting on having asecond bond ”.(Vide page 74.)
“ There was no force or compulsion. I signed it voluntarilybecause I thought it was the wisest thing to do ”. (Vide page 86.)
I am unable to assent to the finding of the District Judge that theevidence of the plaintiff raises a strong presumption of fraud againstMr. van der Poorten. I have no hesitation in holding that the plaintiff .was well aware of the contents of the bond P2 before he signed it. Therewas nothing extraordinary in his holding himself answerable for Mr. P. L.Go one war dene’s debt. He had received account particulars showingthat he was being charged compound interest. He knew that otherdebtors were paying compound interest. The additional amount he hadto pay on account of compound interest was something like Rs. 6,500over a period of seven years. He was “ doing a considerable amount ofwork” for Mr. van der Poorten at the time, involving large sums ofmoney. (Vide page 74.) He expected to earn a substantial sum as feesby attesting bonds and appearing for him in the many land suits ofMr. van der Poorten. (Vide page 75.) A large number of persons wereseeking his assistance in raising loans and paying him for it, as he wasin touch with Mr. van der Poorten who was prepared to lend considerablesums of money (e.g., Tanketiya transaction referred to later). He wasable to get what he called accommodation loans of large sums fromMr. van der Poorten for his own dealings in land and thereby make largeprofits. (Vide page 72.) With all these advantages accruing to him inhaving Mr. van der Poorten as a client he 'chose to acquiesce in thepractice of Mr. van der Poorten—well known to him—of chargingcompound interest from debtors who failed to pay interest regularly.He knew that Mr. van der Poorten could not easily break away fromhim, as he was Mr. van der Poorten’s lawyer in many complicated andprotracted law suits. He felt that as time went he Would getMr. van der Poorten more and more under his -influence and that ata final settlement he would be able to get terms very favourable to him.Many passages in his evidence show this—
“I always thought I could come to some arrangement with himwith regard to a fair settlement of these matters ”. (Vide page 64.)
“ I signed the bond fully well knowing that I and Mr. van derPoorten can settle the account later on a correct footing ”. (Fidepage75).
In fact, the plaintiff formed a correct estimate of his influence overMr. van der Poorten as will be seen when I proceed to discuss the adjust-ment of Mr. van der Poorten’s claims on the bond P2, promissory noteand the sundry claims account.
VIJJ5YEWABDENTS A.O.J.— Weerasooria v. Vander Poorten
445
The plaintiff’s evidence on this point could be tested in another way.After 1924, he got several statements of accounts from Mr. van derPoorten showing his liability on bond P2 [vide page 89 and 1D6 of April26, 1930). He never wrote to Mr. van der Poorten challenging thecorrectness of the liability. He failed to do this even after 1929, whenaccording to him all his liabilities to Mr. van der Poorten had been dis-charged. He did not question Mr. van der Poorten even on occasionswhen he was “ very good ” (vide page 86). He did not question his“ good friend ” Mr. F. L. Goonewardene why he was made to sign a bondfor Rs. 24330"50. (Fide page 86).
I am of opinion that by bond P2 the plaintiff -assumed liability forthe sum of Rs. 24,630'50 with a full knowledge of all the facts andwithout being in any way induced to do so by any undue influence on thepart of Mr. van der Poorten.
The second point that has to be considered regarding the bond P2is whether Henri held the bond in trust for and as agent of Mr. van derPoorten. In support of the plaintiff’s contention that Henri was, in fact,the real mortgagee we have—
the bond P2 which mentions Henri as the mortgagee ;
the statements of account P52 and P53 prepared in 1923 and 1926,
respectively, giving Henri as the creditor ; and
the letter 1D17 of 1932.
As against these,-there is a volume of evidence showing that the partiesconcerned, including the plaintiff, regarded Mr. van der Poorten as theactual mortgagee.
Though the bond was in the name of Henri, no consideration passedfrom him. Henri’s cheque P24 in favour of the plaintiff and endorsedby the latter and given to Mr. van der Poorten remains uncashed up todate. That cheque was probably handed before the Notary in order toenable the Notary to make his statement in the attestation clause thatthe consideration was paid in his presence by a cheque. It seems to methat for some reason or other Mr. van der Poorten was advised to havethis bond written in the name of Henri. But Henri does not appearto have taken any part in the negotiations for the bond or interestedhimself in anyway about the execution of the bond. The plaintiffsays, “ there was no talk between me and Henri van der Poorten inregard to this transaction at any time prior to its execution ” (vide page 85)and that Henri “ did not figure in the matter ” (vide page 75). So faras the plaintiff remembers Henri was^not present at the time of theexecution of P2 (vide page 85). Though he says he made payments- amounting to Rs. 4,250 to Henri in payment of bond P2 (vide pages 64,73 and 74), yet in this case he asks that he should be credited with thatsum as against his liabilities to Mr. van der Poorten (vide para 4 of theplaint and page 96). The following account particulars all refer toMr. van der Poorten as the creditor On the bond P2 :—1D1 and 1D3 of1929, 1D6 of 1930, 1D8 (b) of 1931. When he received these accountparticulars the plaintiff did not write to Mr. van der Poorten that theclaim on P2 should be, deleted from Mr. van der Poorten’s claim againsthim (vide pages 94 and 95). In reply to 11)17 mentioned by me earlier
446
WXJBYEWARDENE A.C. J.—Weeraaooria Vj^Vander Poorten
the plaintiff wrote 1D18 to Mr. van der Poorten and in that letter hesaid—
“ Henri is fortunate in getting advances from you on the securityof the secondary mortgage over Dangolla. You have forgotten thatthis secondary mortgage was taken by you in Henri’s name for interestdue to you on the-primary mortgage”.
When he was cross-examined about this letter, the plaintiff’s replywas not at all helpful (vide page 92). Even when he went before the DebtConciliation Board the plaintiff stated unambiguously in. paragraph 1of 1D19 that he was asking “ for a settlement of the claims of the lateMr. A. J. van der Poorten and his executors in respect of the mortgagebond 1484 (PI) dated March 26, 1915, for Rs. 50,000 and 2276 (P2) datedFebruary 18, 1922, for Rs. 24,630-50 ”.
Mr. van der Poorten’s books show that the-last item credited to theplaintiff in respect of his liability on P2 was in 1931. The bond wouldtherefore have been prescribed in 1941. If Henri regarded himselfas the mortgagee it is strange that Henri did not sue all these yearson the bond.
If the plaintiff regarded Henri as the mortgagee on P2 he should havementioned the name of Henri in his application to the Debt ConciliationBoard as required by section 17 (c)’ of the Debt Conciliation Ordinance.The plaintiff did not do so and so far as plaintiff remembers Henri madeno claim against him before the Board.
I find that on bond P2 the plaintiff was liable to the estate.of Mr. vander Poorten and he became liable for the full sum of Rs. 24,630 • 50mentioned in P2.
Whilst arguing that the plaintiff’s indebtedness on P2 was to Henriand not to Mr. van der Poorten, the plaintiff’s Counsel put forward as anirrefutable proposition of law that, even if this Court held that theplaintiff’s creditor on P2 was Mr. van der Poorten, the plaintiff could becompelled by Henri to pay again the debt on P2 to him, as Henri was nota party to this action. I think it more correct to regard it as a startlingproposition. In this case the plaintiff has done all he could to preventcredit being given to Mr. van der Poorten on P 2. If in spite of theseefforts this Court decides that the debt on P2 was due to Mr. van derPoorten, no Court of Law will hold the plaintiff answerable for the debta second time to Henri. As Bonser C.J. remarked in Mohamadu v.Ibrahim1—m
“ No authority is needed to establish the proposition that the lawwill never compel a person to pay a sum of money a second" time whichhe has already paid under the sanction of a Court of competent juris-diction ; but the person seeking to benefit by this principle musthave done all that was incumbent on him to resist the payment”.(See also Appuhamy v. Tinanhamy2) .
As regards the claim on the promissory note the plaintiff does notdispute his liability for Rs. 20,037 -53 and interest at 9 per cent, on thenote made on August 19, 1924. Nothing was paid by the plaintiff
1 (1895) 2 N. L.R. 36.
(1919) 6 C. W. R. 33.
WIJ JS VBWARDENE A.C. J.—Weerasooria v. Vander Poor ten
447
on that note. The plaintiff admitted his liability on that note inparagraph 16 (b) of the plaint.
[His Lordship then discussed the sundry claims account, andcontinued :—]
I shall now consider the question of fees. The plaintiff’s claim for feesis in respect of work done by him—
as a Proctor in connection with actions in Court ;
as a Proctor in some other matters ; and
as a Notary in attesting deeds, &c.
Sections 214 and 215 of the Civil Procedure Code 'deal with claimsby a Proctor for fees due to him in respect of actions in Court and enact—
Section 214 : “ All bills of costs, whether between party and partyor between Proctor and client, shall be taxed by the Registrar orSecretary or Chief Clerk of the Court, as the case may be, according tothe rates specified in the Second Schedule ; and if either party isdissatisfied with this taxation, the matter in dispute shall be referredto the Court for its decision, and the decision of the Court in reviewof taxation of costs shall (except when it is the decision of the SupremeCourt) be liable to an appeal to the Supreme Court ”.
Section 215 : “ No Proctor shall commence or maintain any actionfor the recovery of any fees, charges or disbursements at law until theexpiration of one month or more after he shall have delivered unto theparty charged therewith, or left with him at his dwelling house or lastknown place of abode, a bill of such fees, charges and disbursementssubscribed by such Proctor. And after such delivery or service thereof,either the Proctor or party charged therewith may obtain an appoint-ment from the taxing officer for the taxation thereof ; and if eitherparty shall fail to attend, and the taxing officer is satisfied that suchparty has received due notice of the appointment, the taxation shallproceed in his absence ”.
Those sections, however, do not prevent a Proctor from entering intoan agreement with his client that he should be paid on a different basisand recovering from his client by an action at law all fees due to him interms of such an agreement. Such an agreement need not be in writingunder our law but the burden will be on flhe Proctor concerned to establishits reasonableness and equity in view of the fact that a Proctor occupiesa position of active confidence in relation to his clients (vide Gantlay v.Tanks1 and In re two Proctors2 and Evidence Ordinance, Section 111).
The fees chargeable for notarial work are those specified in the ThirdSchedule to the Notaries Ordinance. Section 36 of the Ordinance makesit competent for a Notary to charge higher fees on the basis of anagreement between him and the client, but the section enacts that such anagreement will not be enforceable in a Court of law unless it is in writing
and signed by the parties.
1 (1915) 1 C. W. R. 141.a
(1935) 37 N. L. R. 352.
448
BASNAYAKE J.—Weeraaooria v. Vander Poorten
[His Lordship then discussed, the question, of fees due to the plaintiffand, after holding- that Mr. van der Poorten made a settlement in July,1934, with the full knowledge of the plaintiff and that the plaintiffaccepted that adjustment, continued :—]
For the reasons given by me I have considered the indebtedness ofthe plaintiff on the following basis :—
The principal due by the plaintiff on PI was Rs. 50,000 on February
18, 1922 ;
The defendants could claim only simple interest on PI.
The plaintiff should be given credit for cash payments made by
him after February 18, 1922. The total income from DangollaEstate up to February 28, 1927, and part of the income there-after up to February 28, 1931 (as appropriated by Mr. VanderPoorten) and the total incomes after February 28, 1931, shouldbe set apart yearly against the indebtedness on P 1. To thesemust be added the various items mentioned in P 51 N.
The plaintiff should be given credit in a sum of Rs. 16,951 • 50 for
fees as at the time of the institution of the action.
I find on calculation (see annexed sheet A*) that the plaintiff’s indebted-ness to the defendants at the time he filed the plaint was Rs. 17,412-28.
I set aside the decree entered in the District Court and I direct theDistrict Judge to enter a hypothecary decree on bond P 1 in favourof the defendants for Rs. 17,412-28 together with interest at 10 per cent,from the date of action to the date of decree and interest thereafterat 5 per cent, less half costs in the District Coui-t which I award to theplaintiff.
There will be no order as to the costs here.
As I apprehend some delay in delivering the judgment of this CourtI wish to add that I completed this judgment on August 18, 1948.
Windham J.—I agree.
Basnatake J.-—
The plaintiff is a proctor and the defendants are the executors of theestate of one A. J. Vander Poorten.
By bond No. 1484 dated March 26, 1915 (hereinafter referred to asP 1), the plaintiff mortgaged the deceased A. J. Vander Poorten, assecurity for a loan of Rs. 50,000 with interest at ten per centum perannum, a plantation known as Dangolle Estate in extent about 200acres planted in rubber and coconut. The present action in respect ofthe mortgage bond P 1 and fees claimed by the plaintiff as the deceased’sproctor, was instituted on April 12, 1944. The relief claimed by theplaintiff is stated in the prayer of his plaint thus :
“ (a) That the Court do order the defendants as executors as aforesaid
to cancel and discharge the said bond 1484 dated March 26, 1915,
* Not reproduced in this report.—Ed.
BASNAYAKE J.— Weeraeooria v. Vander Poorten.
449
and to deliver the said bond and the title deeds and other documentsof the said property called Dangolle to the plaintiff, or in the alternative
That the Court do declare the said bond cancelled and dischargedand order the defendants as such executors to deliver the said bondand the title deeds and documents to the plaintiff.
That the Court do order the defendants as executors of thosaid A. J. Vander Poorten to pay to the plaintiff from the estate ofthe said A. J. Vander Poorten the said balance sum of Rs. 120,196 -93with interest thereon at the legal rate of nine per cent, per annumfrom the date hereof till payment in full,
or in the alternative the Court do order the defendants to file a fulland true account of all moneys lent, all moneys received and/orcollected, and all credits given and that an account be taken of sameafter the plaintiff has surcharged and falsified same and that theplaintiff be awarded such sum as the Court may deem just and properunder the circumstances.”
The first defendant resisted the plaintiff’s action and claimed inreconvention the sum of Rs. 60,291 with interest at 10 per cent, perannum on Rs. 50,000 from April 11, 1944, to date of decree. The secondand third defendants did not contest the action although they filed ananswer in which they asked that an order be made by the Court for theaccounts between the plaintiff and the late A. J. Vander Poorten to belooked into on the footing of the allegations in their answer and thatjudgment be entered thereafter in terms of the said accounting. Theyalso referred to certain proceedings before the Debt Conciliation Boardand expressed their willingness to abide by the conclusion of the Boardthat the obligations of the plaintiff to the late A. J. Vander Poorten hadbeen satisfied and that his executors should pay the plaintiff a sum ofRs. 60,000, which sum the plaintiff refused to accept.
The learned District Judge entered judgment for the plaintiff asprayed for in paragraphs (a) and (b) of his prayer and for Rs. 42,508 -51plus the surplus income from Dangolle after a certain date with legalinterest thereon till payment in full. The first defendant’s claim inreconvention was dismissed and, as the second and third defendants tookno part in the contest, he alone was ordered to pay costs. The plaintiffand the first defendant have both appealed against the judgment.
Apart from the arguments on the -questions of fact learned counsel forthe first defendant contended that the plaintiff’s action was not maintain-able in view of section 56 of the Debt Conciliation Ordinance, No. 39of 1941, as amended by Ordinances No. 40 of 1941 and No. 9 of 1943,(hereinafter referred to as the Ordinance). That section reads :
“ No civil court shall entertain—
(a) any action in respect of—
(i) any matter pending before the Board ; or(ii) the validity of any procedure before the Boardor the legality of any settlement;
450
BASNAYAKLE J.—Weeraaooria v. Vander Poorten
(b) any application to execute a decree, the execution of whichis suspended under section 55. ”
The first question that arises for decision on the above submissionof counsel is whether the plaintiff’s action is in respect of any matterpending before the Debt Conciliation Board at the time of its institution.
In May, 1943, the plaintiff made his application to the Board undersection 14 of the Ordinance. The particulars of that application areas follows :—
Name of Applicant
Date of Receipt of Application . .
Name and Address of Creditor . .
Amount due on date of ApplicationPrincipal :
Interest :
Nature of Property, e.g., agricul-tural, building, &c., and interesthypothecated
Rate of Interest per annum
Extent, Boundaries and Situationof Property
No. and Date of Mortgage Bondand Name of attesting Notary
E. Weeraaooria.
May 27, 1943.
Executors of A. J. Vander Poorten,deceased, original creditor (wholent Rs. 50,000 only on bonddated March 26, 1915), JosephVander Poorten of 10, de KretserPlace, Colombo, Benjamin VanderPoorten of Galagedera, GeorgeBemalmans of Wattarantenne,Katugastota.
: Nothing due. Debt discharged by
payment and appropriation ofincome of mortgaged premisesand set off of remuneration duefor professional services of debtor,but claim made of Rs. 183,384 -85on account of principal andinterest.
Coconut andrubber estate in bearing.140 acres in coconut and 60 acresin rubber, with bungalow, coolylines, factory, machinery, &e.,cattle, &c.
Ten in bond but compound interestcharged.
200 acres situated at Helamada inGandolahapattu, Beligal Koralein four No rales in Kegalla District.
Primary Bond No. 1484 datedMarch 26, 1915, attested by F. L.Goonewardene of Kandy, N.P.Secondary Bond No. 2276 datedFebruary 18, 1922, attested bythe same Notary.
After taking the steps prescribed by sections 23 and 24 of the Ordinance,"the Board on June 21, 1943, acting under section 25 noticed the creditors,
BASNAYA ICE J.—Weerasooria v. Vcinder Poorten
451
who submitted a statement setting out the particulars of the debt owedto them by the debtor. Their claim, omitting all details, is as follows :
jRs. 6.
On account of Primary Mortgage of Dangolle [Estate, No. 1484
dated March 26, 1916. …. . 124,093 36
On account of Secondary Mortgage of Dangolle 'Estate,
No. 2276 dated February 18, 1922- . .". . 54,874 76
Due on promissory note dated August 19, 1924. . 53,902 41
Claim in respect of moneys recovered by the debtor as Proctor
of the deceased and retained in bis hands. .15,260 08
Credit in a sum of Rs. 70,108 *52. Of this sum Es. 65,108 -52is income of Dangolle Estate and Rs. 5,000 fees for pro-fessional services.
The Board thereafter heard the application under section 28 of theOrdinance. The hearing lasted a number of days, both the debtor andthe creditors being represented by counsel. At the conclusion of thehearing the following decision was recorded ;—
“ The Board decided that the executors should cancel and dischargethe existing bonds and pay the applicant a sum of Rs. 60,000 in fulland final settlement of the applicant’s claim against the Estate ofthe late Mr. Vander Pooiten.
“ Mr. Amarasekera stated that his client would accept the decisionof the Board. Mr. Choksy and the applicant asked for time to considerthe decision of the Board and were allowed time till March 6, 1944,to inform the Board of their decision.”
On February 28, 1944, the applicant wrote (P 56) to the Chairman ofthe Debt Conciliation Board making certain counter proposals andinforming the Board of his inability to accept the decision of the Board.On March 6, 1944, the parties were given further time till March 27, 1944,to see whether a settlement could be reached. Although up to June 13,* 1944, no settlement had been possible the Board decided to leave thematter open without making an order. On June 22, 1945, the applicantmade an application to the Board asking that this application be dismissedas on March 27, 1944. The Board gave its decision on August 1, 1945,and expressly declined to make its order effective as from March 27, 1944,nunc pro tunc. In the concluding paragraph of its order (1 D 50) theBoard says :
“ Nevertheless, we regret that the absence of a formal entry ofa formal order in this matter should in any way prejudice the validityof the institution of the applicant’s action in a Court of Law, and ifwe had the power we should have unhesitatingly been disposed toallow the applicant’s present application ; however this may be, thefact remains that the final order had not been entered designedly andis not on any account attributable to a delay or omission on the partof this Board or any of its officers. The spirit in which the work ofthis Board is carried out necessitates the opportunity for a settlementbeing kept open as long as the parties desire it, while this period canbe immediately determined the moment the parties jointly desire its
452
B ASNA YAKE J.—Weerasooria v. Vander Poorten
termination. The parties have not jointly desired a determiningorder being made and the Board cannot therefore see its way to allowthis application. But as stress has now been brought to bear in regardto a termination of these proceedings and much time has lapsed sincethe parties agreed to inform us of a settlement if arrived at, the Boardat this stage enters an order dismissing the original application.
The application of Mr. X>. E. Weerasooria is hereby dismissed.”
It is clear from the order of the Board that the plaintiff’s applicationwas pending before the Board on the date he instituted this action.The District Court is prohibited by section 56 of the Ordinance fromentertaining any action in respect of any matter pending before theBoard. The language of the prohibition is absolute. The DistrictCourt therefore had no power to entertain the present action. Theobjection to the trial of this action by the District Court was not raisedtill a late stage in the proceedings. The learned District’ Judge, whileexpressing the view that if the objection had been taken in the answerhe might have upheld it, accepts the contention of the plaintiff’s counselthat section 71 of the Courts Ordinance is a bar to the matter beingraised at the stage at which it was. He says : "I must hold that thisobjection of Mr. Choksy’s comes too late as I do not think that this actionwas brought with previous knowledge of the want of jurisdiction of thisCourt especially having regard to the plaintiff’s letter to the Debt Concilia-tion Board (P 56).”
Section 71 of the Courts Ordinance reads :
“ Whenever any defendant or accused party shall have pleaded inany cause, suit, or action, or in any prosecution brought in any DistrictCourt, without pleading to the jurisdiction of such District Court,neither party shall be afterwards entitled to object to the jurisdictionof such court, but such court shall be taken and held to have jurisdictionover such cause, suit, action, or prosecution.
“ Provided that where it shall appear in the course of the proceedings *that the cause, suit, action, or prosecution was brought in a courthaving no jurisdiction intentionally and with previous knowledgeof the want of jurisdiction of such court, the Judge shall be entitledat his discretion to refuse to proceed further with the same, and todeclare the proceedings null and void.”
That section deals with both civil and criminal proceedings. Forthe purposes of this ease it is sufficient to consider section 71 of the CourtsOrdinance in relation to civil proceedings. Section 45 of the CivilProcedure Code requires that every plaint shall contain a statementof facts setting out the jurisdiction of the court to try and determinethe claim in respect of which the action is brought, and section 76requires the defendant, if he intends to dispute the averment in the plaintas to the jurisdiction of the court, to do so by a separate and distinctplea, expressly traversing such averment. Now in order to ascertainthe jurisdiction that has to be averred and pleaded, one must turn tothe section or sections which confer jurisdiction. They are to be found
BASNAYAKLE J.—Weerasooria v. Vander Poorten
453
in Chapter VI of the Courts Ordinance, section 63 of which alone needbe quoted here. It reads :
“ Every District Court shall have cognizance of and full power tohear and determine all pleas, suits, and actions in which a partydefendant shall he resident within the district in which any such suitor action shall be brought, or in which the cause of action shall havearisen within such district, or where the land in respect of which theaction is brought lies, or is situate wholly or partly, within such district.”
Under our law each District Court has its own territorial limits whichare prescribed in the Schedule to the Courts Ordinance. Section 63empowers every District Court to hear and determine all actions—
in which a party defendant shall be resident within the district
in which any action is brought, or
in which the cause of action shall have arisen, or
where the land in respect of which the action is brought lies.
Section 9 of the Civil Procedure Code, while repeating the above matterswhich give a District Court jurisdiction, adds another to the list by-providing that, an action may be brought in the District Court withinwhose limits the contract sought to be enforced was made. An examina-tion of section 45 of the Civil Procedure Code to my mind reveals thatthe averment as to jurisdiction in the plaint must be founded on any oneor more of the above matters. The averment which a defendant isrequired by section 76 of the Civil Procedure Code to traverse where hedisputes the statement as to jurisdiction .can in this context refer onlyto the averment under section 45. In the instant case the plaintiffhas averred that the first defendant resides within the limits of thejurisdiction of the District Court of Colombo. That averment the firstdefendant admits. There is therefore no dispute on the ground ofterritorial jurisdiction. Questions as to monetary jurisdiction do notarise as the District Court is entitled to entertain an action regardlessof the value of the claim.
The words “ whenever any defendant …. shall have pleadedin any cause, suit, or action, …. brought in any District Court,without pleading to the jurisdiction of such District Court ”, to mymind, suggest that the pleading to the jurisdiction contemplated in section -71 of the Courts Ordinance is the denial of the averment made by theplaintiff under section 45 of the Civil Procedure Code which the defendantmust under section 76 of that Code expressly traverse. Although theword “ jurisdiction ” by itself is a word of wide import, its meaning islimited by the context. Section 71 cannot be regarded as authorisinga court to ignore the provisions of a positive enactment prohibitingit from entertaining an action in certain circumstances. Proceedingstaken in contravention of a statutory prohibition are a nullity andcannot result in an effective decree even with consent of parties. Forif by consent or waiver the parties to a dispute can overcome the prohi-bition, they will be able to negative by agreement the express intentionof the Legislature.
4:54
Attorney-General v. Johar
The reported decisions 1 of this Court do not deal with a case suchas the one now before me. The whole scheme of the Debt ConciliationOrdinance is that the courts are deprived of the right to try matterswhich are ordinarily within their competence while such matters arepending before the Debt Conciliation Board. The prohibition in section56 has been imposed in such sweeping terms in order to make the schemeof the Ordinance effective. Otherwise a party who anticipates that theBoard will not award all he has asked for will be able to resort to thecourts while the dispute is still pending before the Board and therebythwart the aim and object of the Ordinance.
Apart from that, where a court has no power to entertain a suit, noaction or inaction upon the part of parties can invest the court withjurisdiction, nor can acquiescence of parties at the initial stage of thisaction affect the express prohibition of the Legislature. As was observedby Lord Watson in the case of Ledgard v. Bull 2 : " When the Judge hasno inherent jurisdiction over the subject-matter of a suit, the partiescannot, by their mutual- consent, convert it into a proper judicial process,although they may constitute the Judge their arbiter, and be bound byhis decision on the merits when these are submitted to him.” I amtherefore of opinion that the contention of counsel for the first defendantis entitled to succeed. His appeal is allowed and the plaintiff’s actionis rejected with costs.
In this view of the matter it is unnecessary to discuss the other questionsarising on these appeals.
The appeal of the plaintiff will accordingly stand dismissed.
Decree varied.
The King v. Silva, (1911) 14 N. L. R. 336.
The King v. Fernando et al., (1905) 8 N. L. R. 354.
Don Simon v. Mendris Kumar alinga, (1908) 2 Leader Law Reports 69.
Jusey Appoo v. XJhkwrala and another, (1859) 3 Lorensz 280.
Malemiar Tamby v. Abdul Coder, (1838) Morgan's Digest, 223.
13 L. R. I. A. 134 at 145.