047-SLLR-SLLR-2002-3-JAFFERJEE-JAFFERJEE-PVT-LTD.-CREDIT-INFORMATION-BUREAU-OF-SRI-LANKA.pdf
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Sri Lanka Law Reports
[2002] 3 Sri L.R.
JAFFERJEE & JAFFERJEE (PVT) LTD.
v.
CREDIT INFORMATION BUREAU OF SRI LANKA
COURT OF APPEALTILAKAWARDANE, J. ANDWIJEYARATNE, J.
CA NO. 1406/2001NOVEMBER 15. 2002
Credit Information Bureau of Sri Lanka Act, No. 18 of 1990 – Amendment Act,No. 8 of 1995, sections 6 (b) and (7) (1) (a) and (b) – Providing credit informationto lending institutions who are shareholders – Should the borrower be informed?
Held:
(1) The intention of the legislature was that not only was the informationregarding the credit worthiness of borrowers should be furnished to lendinginstitutions who are its shareholders but also that the borrowers andprospective borrowers should be simultaneously informed of thisinformation that has been provided.
Per Tilakawardane, J.
"It is dear that by this amending law No. 8 of 1995, where even the longtitle has been amended, that the intention of the legislature was to safeguardthe interests of the borrowers / prospective borrowers from any erroneousinformation being disseminated due to inadvertance which would be adverseto the interests of such persons."
APPLICATION for writs in the nature of certiorari and / or mandamus.
P. Nagendran, PC with C. W. Pannila for petitioner.
Romesh de Silva, PC with Geethaka Gunawardena and Sugath Caldera forrespondent.
Cur. adv. vult.
CA
Jafferjee & Jafferjee (Pvt) Ltd. v. Credit Information Bureau of
Sri Lanka (Shiranee Tilakawardane, J.)
349
February 19, 2003
SHIRANEE TILAKAWARDANE, J.
The petitioner has preferred this application seeking writs of mandamus 01to direct the respondent to disclose to the petitioner the credit informationit has received from the Bank of Ceylon or other lending institutionsrelating to the petitioner and also to disclose the names and addressesof all the lending institutions to which the respondent had furnishedthis credit information relating to the petitioner and the particulars ofthe information so furnished.
The petitioner company is an exporter of tea bags obtaining lettersof credit, discounting of bills and credit facilities for the purpose ofits business. The respondent is a Bureau established under the Credit 10Information Bureau of Sri Lanka Act, No. 18 of 1990, with the capacityto sue and be sued in its name.
In terms of section 7 (1) (a) and (b) of the Credit Information Bureauof Sri Lanka Act, No. 18 of 1990 as amended by the Credit InformationBureau of Sri Lanka (Amendment) Act, No. 8 of 1995, the respondentwas empowered to have and maintain a data base on those whohave made borrowings from several lending institutions in Sri Lankaand to collect and collate trade credit and financial information onborrowers and / or prospective borrowers of lending institutions. Amongits functions and duties in terms of section 6 (b) of the amended Act 20No. 8 of 1995, it was incumbent upon the respondent to also providecredit information to lending institutions who are shareholders of thesaid respondent Bureau and in terms of this section such informationhad to be simultaneously provided to borrowers and prospectiveborrowers to whom such information relates.
The petitioner had made several applications for credit facilities tothe Hatton National Bank (October 1999), the Sampath Bank (January2000) and the Development Finance Corporation of Ceylon, but wasrefused credit facilities.
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Parties agree that the only issue that has to be determined in this 30case is whether when the Credit Information Bureau of Sri Lankaprovides credit information on request to institutions who areshareholders of the Bureau, it is incumbent upon them to inform thepetitioner against whom such information was being given, that suchinformation had been provided to other lending institutions and thenature of the information that had been so given.
It is not in dispute that several applications had been made bythe petitioner to several lending institutions as referred to above andthat credit facilities had been refused by these several lendinginstitutions.40
It is also not in dispute that credit information regarding the petitionerhad been furnished on request to lending institutions, who areshareholders of the respondent Bureau, related to information eitherregarding the lack of creditworthiness of borrowers or information thatadversely affects the creditworthiness of borrowers like the petitioner.
The original Act, the Credit Information Bureau of Sri Lanka Act,No. 18 of 1990, did not provide as a function of the Bureau, the dutyto furnish information to the borrowers, regarding any credit informationthat was given to lending institutions who are shareholders of the 50Bureau, in relation to these borrowers. However, section 2 of theamending Act, No. 8 of 1995 amended the long title of the said CreditInformation Bureau of Sri Lanka Act, No. 18 of 1990 to read as follows:
“For the provision of such information on request to theshareholders of the Bureau and simultaneously to any borroweror prospective borrower to whom such information relates" in placeof the words “for the provision of such information to the shareholdersof the Bureau".
CA
Jafferjee & Jafferjee (Pvt) Ltd. v. Credit Information Bureau of
Sri Lanka (Shiranee Tilakawardane, J.)
351
This also has to be taken in the context that even section 6 ofthe Credit Information Bureau of Sri Lanka Act, No. 18 of 1990 wasamended to conform with the long title. Section 6 of the parent Actstates that:
The functions of the Bureau shall be to collect and collate,trade, credit and financial information on borrowers and prospectiveborrowers of lending institutions and to provide credit information,on request, to shareholders of the Bureau which are lendinginstitutions."
This section was repealed and the new section 6 (b) included, readsas follows:
”To provide credit information, on request, to lendinginstitutions who are shareholders of the Bureau andsimultaneously to borrowers and prospective borrowers to whomsuch information relate. . .".
It is clear therefore, that by this amendment, that the intention ofthe legislature was that not only was the information regarding thecreditworthiness of borrowers to be furnished to lending institutionsbut also that the borrowers and prospective borrowers should be. simultaneously informed of this information that has been so furnished.It is obvious that such information given will cause incalculable harmto a person who is involved in a business, where even inadvertently,wrong information was furnished by the respondent Bureau, eventhough the lending institutions may bona fide believe the veracity ofsuch information at the time it was furnished by them. Especially inth,e current operative, established procedures of the banks, there canbe mistakes made inadvertently or even due to negligence due tocomputer errors and account errors, and such erroneous informationcan adversely affect the creditworthiness of borrowers and prospectiveborrowers. Therefore, it is of paramount importance, that the borrowersand prospective borrowers be given the earliest opportunity to rectifyany such errors and thereby prevent wrongful information relating to
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their creditworthiness being disseminated in the business world andespecially to other lending institutions with the consequential irreparablerepercussions in relation to their business operations which wouldinevitably fall upon to the borrower or prospective borrower. It is clearthat by this amending Act, No. 8 of 1995, where even the long titleof the Act itself has been amended, the intention of the legislaturewas to safeguard the interests of the borrowers and prospectiveborrowers from any erroneous information being disseminated due toinadvertence, which would be adverse to the interest of such persons.
The petitioner therefore has a valid claim that he has not beenafforded the opportunity that was granted by the amended provisionsof law, which make it incumbent upon the respondent, who admitsfurnishing information regarding the creditworthiness of the petitionerto lending institutions, to simultaneously provide the petitioner a copyof the information so furnished. This becomes all the more importantin the context of the allegation of the petitioner that erroneous informationof a bank had been given against him due to accounting errors ofthe bank. He could then be given a reasonable opportunity to rectifyany errors that may have been given from the originating bank, sothat he could prevent any unfair, and erroneous information regardinghis creditworthiness being disseminated, which would have drasticconsequences against the operation of his business, especially in therelatively small business community that exists in Sri Lanka.
In all these circumstances, this Court therefore issues a writ ofmandamus directing the respondent to discolse to the petitioner thecredit information that it has provided to lending institutions and thenature of the information that has been so furnished. Therefore, theapplication relating to prayer "b" is granted. This Court does not havepowers to issue relief prayed for in paragraph "a" as the Bank hasnot been made a party to this case. The application is thereforeallowed, but relief is limited to prayer "b". No costs.
WIJEYARATNE, J. – I agree.
Writ of mandamus granted.
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