ADANI EXPORTS LTD VS FA IMPEX (PVT) LTD

• Case Number: 2023SCLR91C2014Y
• Citation: 2023SCLR91C2014Y
• Date: 01 June 2023
• Court: Supreme Court (Sri Lanka)
• Type of Document: Unreported judgment

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ADANI EXPORTS LTD

VS

FA IMPEX (PVT) LTD

S.C. APPEAL NO. 91/2014
SC HCCA LA NO. 32/2014
WP/HCCA/COL/66/2009(F)
D.C. Colombo Case No. 119/CO

In the matter of an Application for Leave under and in terms of Section 5C of the High Court of the Provinces (Special Provisions) Act No. 19 of 1990 as amended by the High Court of Provinces (Special Provisions) (Amendment) Act No. 54 of 2006.

In the matter of the winding up of FA IMPEX (PRIVATE) LIMITED under Part IX of Companies Act No. 17 of 1982, having its registered office at No. 46, Sri Mahindarama Road, Colombo 9 and also a place of business at NO. 213/1, Main Street, Colombo 11 and presently at 23, Sea Street Colombo 11.

Adani Exports Ltd
"Adani House", Near Mithakhali Circle,
Navrangpura,
Ahmedabad, 380 009,
India.

Petitioner

Vs.

1. Fa Impex (Pvt) Ltd having its registered office at No. 46,
Sri Mahindarama Road, Colombo
9 and also a place of business at No. 213/1,
Main Street, Colombo 11 and presently at
23, Sea Street,
Colombo 11.

1st Respondent

2

2. Seylan Bank Ltd, Ceylinco Seylan Tower,
No. 90, Galle Road,
Colombo 03.

Intervenient-Petitioner-2nd Respondent


3. Rahamatulla Abdul Rahuman,
B/04, First Floor,
St. James' Flats,
Colombo 15.

Creditor-Petitioner-3rd Respondent

AND

Fa Impex (Pvt) Ltd having its registered office at
No. 46, Sri Mahindarama Road, Colombo 9 and
also a place of business at No. 213/1, Main Street,
Colombo 11 and presently at 23, Sea
Street, Colombo 11.

1st Respondent- Appellant

Vs.

Adani Exports Ltd
"Adani House", Near Mithakhali Circle,
Navrangpura,
Ahmedabad, 380 009, India.

Petitioner-1st Respondent

3

Seylan Bank Ltd,
Ceylinco Seylan Tower,
No. 90, Galle Road, Colombo 03.

Intervenient-Petitioner-2nd Respondent

Rahamatulla Abdul Rahuman,
B/04, First Floor,
St. James' Flats, Colombo 15.

Creditor-Petitioner-3rd Respondent

AND NOW BETWEEN

Fa Impex (Pvt) Ltd having its registered office at
No. 46, Sri Mahindarama Road, Colombo 9 and also a
place of business at No. 213/1, Main Street,
Colombo 11 and presently at 23, Sea Street, Colombo 11.

1st Respondent- Appellant-Petitioner

Vs.

Adani Exports Ltd
"Adani House", Near Mithakhali Circle,
Navrangpura,
Ahmedabad, 380 009, India.

Petitioner-1st Respondent-Respondent

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Seylan Bank Ltd,
Ceylinco Seylan Tower, No. 90,
Galle Road, Colombo 03.

Intervenient-Petitioner-2nd Respondent-Respondent

Rahamatulla Abdul Rahuman,
B/04, First Floor,
St. James' Flats,
Colombo 15.

Creditor-Petitioner-3rd Respondent-Respondent

Before : Buwaneka Aluwihare, P.C., J.
K.K. Wickremasinghe, J.
Janak De Silva, J.


Counsel : Nilanga Perera for the 1st Respondent-Appellant-Petitioner

A.A.M. Illiyas, PC with Tharindu Rathnayake for the Petitioner-1st Respondent-Respondent

Palitha Kumarasinghe, PC with Chinthaka Mendis for the Intervenient Petitioner-2nd Respondent-Respondent

Written Submissions tendered on : 31.07.2014 and 13.01.2022 by the 1st Respondent-Appellant-Petitioner

22.09.2021 and 26.11.2021 by the Petitioner-1st Respondent-Respondent

13.11.2014 and 24.11.2021 by the Intervenient Petitioner-2nd Respondent-Respondent

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Argued on : 27.10.2021

Decided on : 01.06.2023

Janak De Silva J.

The Petitioner-1st Respondent-Respondent (1st Respondent) filed this application in the District Court of Colombo to wind up the 1st Respondent-Appellant-Petitioner (Petitioner). This application was made on 19th March 2003 in terms of the Companies Act No. 17 of 1982 (Companies Act 1982).

By order dated 16th January 2009 the learned District Judge ordered the winding up of the Petitioner. The Petitioner preferred an appeal to the Provincial High Court of Civil Appeal of the Western Province (Holden in Colombo) (High Court). When this appeal was taken up for hearing, the Intervenient-Petitioner-2nd Respondent (2nd Respondent) raised a preliminary objection that no right of appeal has been given to the Petitioner by Companies Act No. 7 of 2007 (Companies Act 2007) to appeal against the winding up order.

The High Court ruled that the issue must be decided by reference to section 532(1) of the Companies Act 2007. It concluded that the provisions of the Companies Act 1982 were applicable to the present case only for the purposes of winding up and that section 307 of the Companies Act 1982, which conferred a right of appeal against any order or decision made up in winding up proceedings, was not open to the Petitioner. Accordingly, the High Court upheld the preliminary objection and dismissed the appeal. The Petitioner
appealed.

Leave to appeal was granted on the following questions of law:

(1) Whether the impugned order is erroneous and incorrect in that, the conclusion that no appeal would lie against a winding up order in the particular circumstances
of this case?

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(2) Whether the impugned order is erroneous and incorrect in that, the conclusion that no appeal would lie against a winding up order in the particular circumstances of this case on the basis that the Company law is a special law?

During the hearing, a further question of law was raised, namely:

(3) Assuming that the winding up "order" dated 16th January 2009 is appealable, is the proper remedy a Leave to Appeal application?

Questions of Law No. 1 and 2

Learned counsel for the Petitioner submitted that section 532(1) of the Companies Act 2007 preserved the application of section 307 of the Companies Act 1982 to winding up proceedings commenced under the said Act. Therefore, any order or decision made in such winding up proceedings was subject to appeal.

In response, the learned counsel for the 1st Respondent and the Intervenient Petitioner- 2nd Respondent-Respondent (2nd Respondent) submitted that an appeal is a statutory right and must be expressly created. Reliance was placed on the decisions in Mar tin v. Wijewardena [(1989) 2 Sri.L.R. 409], Dassanayake v. Sampath Bank [(2002) 3 Sri.L.R. 268], Sang arapillai v. Chairman, Municipal Council of Colombo (32 NLR 92) Vanderpoorten et al. v. The Settlement Officer (43 NLR 230), Kanagasunderam v. Podihamine (42 NLR 97), Bakmeewewa, Authorized Officer of People's Bank v. Konarage Raja [(1989) 1 Sri.L.R. 231], Gunaratne v. Thambinayagam and Others [(1993) 2 Sri.L.R.355]. It was further contended that the Companies Law is a special law and that any right of appeal should have been granted by the same law. In support of this proposition reliance was placed upon the decision in Siri sena Perera and another v. Vinson Perera [(2005) 1 Sri.L.R. 270]. It was contended that section 532(1) of the Companies Act 2007 did not keep alive all sections in the Companies Act 1982 and in particular did not provide for the application of section 307 therein to the present case.

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There is no dispute that these winding up proceedings commenced in terms of the Companies Act 1982 which provided a right of appeal against any order or decision made in a winding up proceeding. The dispute is over the legal effect of the repeal of the Companies Act 1982 by the Companies Act 2007.

The analysis must first take into account paragraph 6(3)(c) of the Interpretation Ordinance, which reads as follows:

"6(3)Whenever any written law repeals either in whole or part a former written law, such repeal shall not, in the absence of any express provision to that effect, affect or be deemed to have affected -

...

(c) any action, proceeding, or thing pending or incompleted when the repealing written law comes into operation, but every such action, proceeding, or thing may be carried on and completed as if there had been no such repeal."

The interpretation of this section raises two questions. First, we have to determine what is meant by an action, procedure or thing, and whether winding up proceedings falls under these words.

There is a divergence of opinion in some jurisdictions on whether a winding up proceeding is an action in the context of the relevant legal provisions even though the same legal provision was the subject of interpretation.

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Section 4(4) of the Limitation Ordinance, Cap. 347 of Hong Kong provided that:

"An action shall not be brought upon any judgment after the expiration of 12 years from the date on which the judgment became enforceable, and no arrears of interest in respect of any judgment debt shall be recovered after the expiration of 6 years from the date on which the interest became due"

"Action" is defined in section 2 of the said Ordinance as including "any proceeding in a court of law". In Re: Li Man Hoo [2013] 4 HKLRD 247 the Hong Kong Court of Appeal held that a winding up petition falls within this definition. However, in England and Australia, which has similar provisions, a more restrictive meaning has been adopted and it has been held that the relevant limitation provision does not bar the presentation of a winding-up petition. [See Ridgeway Motors (Isleworth) Ltd v ALTS Ltd [2005] 1 WLR 2871, Dennehy v Reasonable Endeavours Pty Ltd (2003) 130 FCR 494, O' Mara Constructions Pty Ltd v Avery (2006) 230 ALR 581].

In Collett v. Priest [(1931) A. D. 290 at 298] De Villers, C. J., held that that the essential feature of a 'suit or action' under section 50 of the Charter of Justice or under section 39 of Transvaal Proclamation 14 of 1902, or of a 'suit ' under section 24 of Cape Act 35 of 1896, is that it is a proceeding in which one party sues for or claims something from another, and that no proceeding which lacks this feature, such as sequestration proceedings, an application for winding up of a company etc., can be properly described as a 'suit or action' or as a 'suit' under any of these sections.

The Interpretation Ordinance does not define what constitutes an action. According to section 5 of the Civil Procedure Code, an action is a proceeding for the prevention or redress of a wrong. One may ask whether this definition should be used to define the word action in the Interpretation Ordinance.

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However, I do not...