023-SLLR-SLLR-2004-V-1-UKWATTE-v.-D.F.C.C-BANK.pdf
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UKWATTEv
D.F.C.C. BANKCOURT OF APPEALSRIPAVAN, J„
C.A. 1824/03NOVEMBER 19 ANDDECEMBER 3, 2003
Recovery of Loans by Banks, (Special Provisions) Act, No. 4 of 1990, sections 4and 7-D.F.C.C. Bank – Development Finance Corporation of Ceylon Act, No. 35of 1955, section 10-Default-Resolution to sell – Parate execution – Writ of exe-cution – Should the Directors of the Bank be made parties? – Could parate exe-cution powers be extended to properties of non borrowers? – Constitutional juris-diction and appellate jurisdiction – Difference – Interpretation.
Held:
The Board of Directors of the Bank are necessary parties and the failureto make them parties is fatal.
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Per Sripavan, J.,
“General supervision, control and administration of the affairs of the Bankis vested in the Board of Directors in terms of section 10. Accordingly theBoard of Directors are distinct from the Bank”
The words “any property” and “for any loan” in section 4 of Act, No. 4 of1990 declare the intention of Parliament. It is not limited to the propertyof the borrower.
Per Sripavan, J.,
“In SC Spl.. Determination 22/03 what was examined by the Supreme Courtwas the constitutionality of the Bill and not the constitutionality or provisionscontained in Act, No. 4 of 1990 already in force.
The constitutional jurisdiction of the Supreme Court is distinct from appellatejurisdiction it exercises.”
The legislative function is the prime responsibility of Parliament. If the wordsof an Act are clear and plain, a Court must follow them and leave it to thelegislature to set it right rather than to change those words according to thejudge’s notion Of injustice and inconvenience.
APPLICATION for a writ of certiorari.
1. Jalima Umma vMohamed- 50 NLR 15 at 17.
Dissanayake v Cooperative Stores Union – 60 NLR 140
Kamnaratne v Commissioner of Cooperative Development and others – 79NLR Vol. 11-193
S.C. Spl. Determination 22/03
Sirisena v Kobbekaduwa – 80 NLR 177
S.C.SpI LA 14/2001 – SCM23.7.2001
M.A. Sumanthiran with Viran Corea and Deepthi Madanayake for petitioners.Romesh de Silva, PC., with M.E. Wickremasinghe for 1st respondent.
Cur.adv.vult
January 14,2004
SRIPAVAN, J.The only question to be considered is whether the petitioners areentitled to an interim relief sought in paragraph (b) of the prayer to thepetition, namely, the resolutions marked P4 & P7 be stayed until thefinal determination of this application.
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The final relief sought by the petitioners is a writ of certiorari toquash the said resolutions marked P4 & P7. It is common groundthat the said resolutions were passed by the Board of Directors ofthe first respondent Bank in terms of section 8 of the Recovery ofLoans by Banks (Special Provisions) Act, No.4 of 1990. The firstrespondent Bank was established under the Development FinanceCorporation of Ceylon Act, No. 35 of 1955 as amended and is abody corporate with perpetual succession and a common seal withcapacity to sue and be sued in its corporate name. The generalsupervision, control and administration of the affairs of the firstrespondent Bank is vested in the Board of Directors constituted inaccordance with section 10 of the said Act. Accordingly, the Boardof Directors are distinct from the first respondent Bank.
It has been constantly held that the party or parties againstwhom relief is sought must be identified clearly and no room left foruncertainty. In the case in hand, the resolutions sought to bequashed are that of the Board of Directors of the first respondentBank and none of the Directors have been made parties to thisapplication.
In Jalima Umma v Mohammed (1) 17 Nagalingam, J., held that“if the order complained of cannot be quashed in the absence of theproper party who made the order, then the relief applied for againstthe first respondent too necessarily fails.”
In Dissanayakev Co-operative Stores Union (2) Weerasuriya, J.,refused to grant a writ of certiorari to quash the proceedings beforean arbitrator on the basis that the arbitrator is a necessary partyand must be made a respondent.
In Karunaratne v Commissioner of Co-operative Developmentand another^3) the Supreme Court dismissed a claim for certiorariobserving that T.D.J.Vitharana, Deputy Commissioner who madethe award which was sought to be quashed has not been made aparty to the application.
The authorities cited above show that the Board of Directors ofthe first respondent Bank are necessary parties to these proceed-ings and the failure to make them respondents does not entitle thepetitioners to the final relief prayed for. If the petitioners cannot suc-ceed in obtaining the final relief, certainly they are not entitled for
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an interim relief asked for in paragraph (b) of the prayer to the peti-tion.
Learned Counsel for the petitioners submitted that the words“any property mortgaged to the bank as security for any loarf foundin section 4 of Act, No. 4 of 1990 could not be interpreted so wide-ly in order to extend parate execution even to properties of non-bor-rowers. In this context, Counsel contended that a Divisional Benchof the Supreme Court in S.C. Spl Determination 22/03(4) held thatthe proper interpretation to Act, No. 4 of 1990 is a restrictive one soconfining its unconscionable procedure to “borrower^’ alone with-out extending it to “non-borrowers'1. I am unable to agree with thissubmission for the following reasons :-
The Supreme Court while exercising its constitutional juris-diction in terms of Article 121 (1) of the Constitution considered a Bill(emphasis added) titled "Recovery of loans by Banks (SpecialProvisions) Amendment, in the aforesaid special determination.
What was examined by the Supreme Court was the consti-
tutionality of the Bill and not the constitutionality or the provisionscontained in Act, No 4 of 1990 already in force.eo
(C) The constitutional jurisdiction of the Supreme Court is dis-tinct and different from the appellate jurisdiction it exercises.
The legislative function is the prime responsibility of parliamentas the elected body representing the people. If the words of an Actare clear and plain, a Court must follow them and leave it to the leg-islature to set it right rather than to change those words accordingto the judge’s notion of injustice and inconvenience. The function ofa Court is to give effect to the express intention of Parliament.Section 4 of Act, No. 4 of 1990 reads as follows:
“Subject to the provisions of section 7 the Board may by resolu- 70tion to be recorded in writing authorise any person specified in theresolution to sell by public auction any property mortgaged to theBank as security for any loan in respect of which default has beenmade in order to recover the whole of the unpaid portion of suchloan and the interest thereon after the date of the sale together withthe moneys and costs recoverable under section 13”. (emphasisadded)
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The words “any property” and “for any loarf, in the above men-tioned section declare the intention of Parliament. It is not limited tothe property of the borrower. “If the words properly construed admit soof only one meaning, the Court is not entitled to deny to the wordsthat meaning, merely because the Court feels that the result is notin accordance with the intention of the Legal Draftsman or theMinister” – per Sharvananda, J. in Sirisena & others vKobbekaduwaW. In fact in a High Court case CHC/Civil/199/2000/1 the learned Commercial High Court Judge observedthat "in the absence of any restrictions under section 4 of the Act, itis not conceivable or practicable to use section 15(1) as a prohibi-tion against the bank from adopting resolutions in case of mort-gages given by any person other than the actual borrower.” An 90application for Special Leave made to the Supreme Court againstthis order of the High Court was refused<6) on the ground that therewas no basis to grant Special Leave to Appeal. Accordingly, thereis no prohibition on the first respondent Bank in adopting a resolu-tion in respect of a mortgage given by any other person other thanthe actual borrower.
For the reasons stated above, the interim relief sought by thepetitioners in terms of paragraph (b) of the prayer to the petition isrefused. As agreed by both Counsel on 19.11.2003 the decision inthis application would bind the parties in C.A. Application No. 1001825/2003 as well.
Interim relief refused.