117-NLR-NLR-V-56-D.-C.-JAYASINGHE-Appellant-and-BORAGODAWATTA-CO-OPEARATIVE-STORES-Respondent.pdf
'402
./aynsinghe ». BoraffodnwrilTn Co-operative Stores
1955Present :Gratiaen J., de Silva J. and Fernando J. *C. JAYASINGHE, Appellant, and BORAGODAWATTACO-OPERATIVE STORES, Respondent
S. C. 181—D. C. Negombo 16,248
•Co-operative Societies Ordinance (Cap. 107)—Section 46 (2) (J)— Au-ard of arbitrator—
Procedure for its enforcement—Civil Procedure Code, 8 224.
When a party makes application to Court to enforce an arbitrator’s awardunder the provisions of the Co-operative Societies Ordinance notice must firstbe issued to the party against whom the award is sought to be enforced. Insuch a case an ex parte application under section 224 of the Civil Procedure Codeis inappropriate.
Kandy Co-operative Urban Bank v. Senanayake (1937) 39 N. I.. J{. 352, notfollowed..
.^^.PPEAL fyom an order of the District Court, Negombo. Tl.-is appealwas reserved for adjudication by a Bench of three Judges upon a referencemade by Pulle J. (Weerasooriya J. agreeing) in the following terms :—
“ In this action a Co-operative Society sought to enforce an award inits favour against two debtors. The Proctor for the Society filed a motionon the 28th June, 1951, together with the award, and asked that a writof execution be issued. The motion was allowed ex parte on the 23rdJuly, 1951, and thereafter notices were issued on the debtors to appearfor examination under section 219 of the Civil Procedure Code. The 2nddebtor who is the appellant filed an affidavit dated 3rd December, 1951,in which he stated that he was not possessed of any property exceptinghis share capital in the Society. He was later examined and he undertookto furnish particulars of deeds by which he had sold certain properties.
“ On the 7th October, 1952, the Society moved to take out writ forthe amount of the award and costs. Notice was then ordered to beissued and on the 14th May, 1953, the appellant filed an affidavit statingthat, since the first application for writ in June, 1951, the Society hadfailed to exercise due diligence to procure satisfaction of the decree andhe specifically pleaded the benefits of section 337 of the Code. Pendinginquiry into the objections raised by the appellant, the Society appears tohave been advised, in view of the case of Barnes de Silva v. Galkissa
f.'KATIAEN J.—Jayaainghev. BoragodctoaUa Co-operative Stores
463
WaUarappola Co-operative Stores Society1 which was decided, on the 18thFebruary, 1953, that a fresh application by way of summary procedureshould be made to enforce the award. Accordingly the Society fileda petition and affidavit and prayed for an order nisi on the debtors to shewcause. On the 8th September, 1953, the appellant showed cause byaffidavit and when the matter eventually came for inquiry on the 17thJune, 1954, learned Counsel who appeared for the Society moved towithdraw the application for order nisi and intimated to court that hewould support his application for writ on the original motion of 28th June,
Having, heard counsel the learned District Judge allowed theapplication for writ and the 2nd debtor, Don Carolis Jayasinghe, nowappeals from this order.
“ It is submitted on behalf of the appellant on the authority of Barnes deSilva's case (supra) that unless the award was sought to be enforced eitherby a regular action or by summary procedure the court had no jurisdictionto order the issue of writ and that the fact that the appellant allowed. himself to be examined under section 219 of the Code did not and couldnot have the effect of conferring a jurisdiction which the court did nothave. The Society’s contention was two-fold. First, that Barnes de>Silva’s case (supra) did not lay down that, unless the procedure indicatedtherein was followed a court would exceed its jurisdiction in issuing a writ-of execution to enforce an award. It was also argued that the jurisdictionof the court was not dependent on the applicant following either a regularor summary procedure and the Society relied on the case of KandyCo-operative Urban Bank v. Senanayake et al. 2 in which it was held thatthere was no legul requirement that notice of an application to execute anaward made under the Co-operative Societies Ordinance should be givento the party affected and that the position of a person against whom anaward has been given differs in no way from that of judgment debtorunder a decree. This case does not appear to have been cited during theargument in Barnes de Silva’s case (supra). As the two cases cited are ofequally binding authority and cannot be reconciled we have been invited. bv counsel on both sides to refer the present appeal for decision by a fullercourt. We have also been informed that there are pending other cases in• which the same point has been raised.
“ Let this case be submitted to His Lordship the Chief Justice fordirections as to the constitution of the Bench to hear this appeal. ” II.
II. IV. Tambiah, with P. Somatilakam and //. L. de Silva, for the 2nddebtor-appellant.
K.B. S. R. Coomaraswamy, with Daya Perera, for the respondent.
Cur. adv. vult.
dime 3, 1955. Gratiaen J.—
This appeal was referred to a Bench of three Judges in view of a conflictof authority as to the procedure to be followed for the enforcement ofa purported decision or award under the provisions of the Co-operative1 (1953) 54 X. L. R. 326.* (1937) 39 N. L. R. 352.
464
GRATIAEN J.—Jayaainghe v. Roragodawotta Co-operative Store*
Societies Ordinance. Section 46 (2) (/) empowers the appropriateauthority (namely the Minister of Food and Co-operative Undertakings) tomake'statutory rules for, inter alia, “ the enforcement of decisions of theRegistrar or tho"award of arbitrators”, and the relevant rule is in thefollowing terms :—
“ A decision or an award shall on application to any civil Courthaving jurisdiction in the area in which the Society carries on businessbe enforced in the same manner as a decree of such Court.”
In Kandy Co-operative Urban Bank v. Senanaya.ke 1 a Bench of two•Judges had ruled that there war no legal requirement that notice of suchan application should be is ued to the'party against whom it was soughtto be enforced. It was also decided that an ex parte application,substantially in the form prescribed for the execution of a decree of Courtunder Section 224 of the Civil Procedure Code, would suffice to invoke thejurisdiction of the Court.
In the later case of Barnes de Silva v. Galki-ssa Wattarappola Co-operative Stores Society2 however, a Bench of two Judges ruledthat Section 224 was inappropriate to the preliminary applicationintended in due course to secure the enforcement of an “ extra-judicialdecision which a Court of law was empowered, upon proof of its validity,to recognise and enforce as if it were a judicial decree ”. The judgmentcontinues at page 328 :—
“ The rule made under Section 46 (2) (/) of the Co-operative SocietiesOrdinance docs not lay down the procedure for making such appli-cations, but it is the clear duty of a Court of law whose machinery asa Court of execution is involved to satisfy itself, before allowing writto issue, that the purported decision or award is prima facie a validdecision or award made by a person duly authorised under the Ordinanceto determine a dispute which has properly arisen for the decision of anextra-judicial tribunal under the Ordinance. In that event alonewould the Court be justified in holding that the decision or award isentitled to recognition and capable, under the appropriate rule, ofenforcement as if it were a decree of Court. To achieve that end,a person seeking to enforce an award should be required to apply eitherin a regular action or at least by petition and affidavit (in proceedingsby way of summary procedure) setting but facts which prove thatthe purported award is prima facie entitled to such recognition. TheCourt should in the latter event enter an order nisi or interlocutoryorder granting the application, and notice thereof should be servedon the opposite party so that he may be given an opportunity of showingcause against the proposed enforcement of the award. Then, and onlythen, -would the Court be justified in permitting execution proceedingsunder the Civil Procedure Code. ”
Having considered the matter afresh, we are satisfied that the rule laiddown in this later decision is correct, and we respectfully think that theearlier authority (in which the Court did not enjoy the advantage of anargument at which both parties were represented) ought not to be followed.
1 (1937) 39 N. L. R. 352.* (1953) 54 N. L. R. 326.
Kanagaletchumy v. Martkair
465
In our opinion, the most convenient and satisfactory procedure to bofollowed would be for a party seeking to enforce an award to make hispreliminary application for recognition of the award by way of summaryprocedure on the lines indicated in Barnes de Silva v. Qalkissa WaUarappolaCo-operative Stores Society (supra).
The principle involved is one of substance and not merely of form.Justice requires that a party who invokes the aid of a Court to obtain theenforcement of an extra-judicial decision purporting to grant him reliefagainst someone else should proceed in two stages : (1) he must in thefirst instance place sufficient material before the Court to establish that thedecision in question had been validly mado by a person vested withjurisdiction over the dispute ; and (2) it is only after he has obtainedjudicial recognition of the extra-judicial decision that he may proceed totake steps to have it carried into execution. It would be quite improperfor the Court to grant final recognition to an extra-judicial decisionwithout giving the party alleged to be affected by it an opportunity ofchallenging its validity.
Applying these principles to the facts of the present case, we are satisfiedthat the learned Judge should not have ordered execution of the arbitra-tor’s award because the respondent Society had placed no evidencebefore him to establish its validity. The application was thereforeirregular ab initio. We accordingly set aside the order under appeal, andsend tho ease back to enable the Society to make a proper applicationby way of summary procedure, if it so desires, in accordance with theprocedure laid down by this Court in Barnes de Silva v. Galkissa Watlarap-]>ola Co-operative Stores Society (supra). The appellant is entitled to thecosts of the appeal and of the inquiry in the Court below.
he Silva J.—I agree.
Feknanihi J.—I agree.'
Order set aside.