PAN ASIA BANKING CORPORATION VS. RANASINGHE ARACHCHIGE THILANGANI CHANDRASENA PERERA

• Jurisdiction: Sri Lanka
• Case Number: 2017SCLR26C2010Y
• Citation: 2017SCLR26C2010Y
• Date: 06 April 2017
• Court: Supreme Court (Sri Lanka)
• Type of Document: Unreported judgment

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PAN ASIA BANKING CORPORATION

VS.

RANASINGHE ARACHCHIGE THILANGANI CHANDRASENA PERERA

S.C.C.H.C. Appeal No: 26/2010
S.C.(HC) L.A. No:21/2010
HC Civil Case No:421/09/MR

In the matter of an appeal with leave to appeal obtained from this Court.

PAN ASIA BANKING CORPORATION
at No.450, Galle Road, Colombo 03
and a branch office and/or a place of
business called and known as the
"Panchikawatte Branch," at No 221/221A,
Sri Sangaraja Mawatha, Colombo 10.

PLAINTIFF

VS.

RANASINGHE ARACHCHIGE THILANGANI
CHANDRASENA PERERA,
No. 400/60/9, Longdon Avenue,
Colombo 07.

DEFENDANT

AND

PAN ASIA BANKING CORPORATION
at No.450, Galle Road, Colombo 03
and a branch office and/or a place of
business called and known as the
"Panchikawatte Branch," at No 221/221A,
Sri Sangaraja Mawatha, Colombo 10.

PLAINTIFF-PETITIONER

VS.

RANASINGHE ARACHCHIGE THILANGANI
CHANDRASENA PERERA,
No. 400/60/9, Longdon Avenue,
Colombo 07.

DEFENDANT-RESPONDENT

AND RANASINGHE ARACHCHIGE THILANGANI
CHANDRASENA PERERA,
No. 400/60/9, Longdon Avenue,
Colombo 07.

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DEFENDANT-RESPONDENT-PETITIONER

VS.


PAN ASIA BANKING CORPORATION PLC,
at No.450, Galle Road,
Colombo 03 and a branch office and/or a
place of business called "Panchikawatte Branch" at No 221/221A,
Sri Sangaraja Mawatha, Colombo 10.

PLAINTIFF-PETITIONER RESPONDENT

AND NOW BETWEEN

PAN ASIA BANKING CORPORATION PLC,
at No.450, Galle Road, Colombo 03 and a branch office
and/or a place of business called
"Panchikawatte Branch" at No 221/221A,
Sri Sangaraja Mawatha, Colombo 10.

PLAINTIFF-PETITIONER RESPONDENT-PETITIONER/ APPELLANT

VS.

RANASINGHE ARACHCHIGE THILANGANI CHANDRASENA PERERA,
No. 400/60/9, Longdon Avenue, Colombo 07.

DEFENDANT-RESPONDENT- PETITIONER-RESPONDENT

BEFORE: S.E. Wanasundera, PC. J.
Upaly Abeyrathne, J.
Prasanna Jayawardena PC. J.

COUNSEL: S.A. Parathalingam, PC with Varuna Senadhira for the Plaintiff- Petitioner-Respondent-Petitioner/Appellant.

Rasika Dissanayake for the Defendant-Respondent- Petitioner-Respondent

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ARGUED ON: 05th October 2016.

WRITTEN SUBMISSIONS FILED: By the Plaintiff- Petitioner-Respondent-Appellant on 01st September 2010 and 01st November 2016.

By the Defendant- Respondent-Respondent on 08th November 2016.
DECIDED ON: 06th April 2017

Prasanna Jayawardena, PC, J.

The Plaintiff-Petitioner-Respondent-Petitioner/Appellant ["the plaintiff"] is a Licensed Commercial Bank and the Defendant-Respondent-Petitioner-Respondent ["defendant"] is a customer and account holder of the plaintiff bank. The plaintiff instituted this action against the defendant praying for the recovery of a sum of Rs. 16,350,246/13 together with interest thereon, which is said to be due upon an overdraft facility granted by the plaintiff to the defendant.

One month after the plaint was filed, the plaintiff made an application under section 653 of the Civil Procedure Code, praying for the issue of an Order sequestering the car bearing registration number WP GV 7007[ "the car"], before judgment. This application was made by way of a petition supported by an affidavit affirmed to by the Recoveries Manager of the plaintiff bank.

The plaintiff's application was supported ex parte on 07th October 2009. Having heard learned Counsel appearing for the plaintiff, the learned High Court Judge issued the sequestration order by way of a mandate (in Form 104 read with Form 38 of the First Schedule to the Civil Procedure Code) directing the Fiscal to seize and sequester the car and secure it until the further Orders of the Court. In terms of section 654 of the Civil Procedure, the learned High Court Judge also directed the plaintiff to furnish a bond in a sum of Rs.150,000/- to secure the payment of any damages or costs which the defendant may have to bear as a result of the sequestration and which may be awarded by the Court.

The learned High Court Judge directed that, the case be called on 05th November 2009. Since the petitioner has failed to annex the journal entries of the case in the High Court, this Court is unable to ascertain what occurred on that day. Further, in its application to this Court seeking leave to appeal, the plaintiff has stated that, the sequestration order could not be executed since the car was not located. As the journal entries are not before us, we are unable to gather any further information regarding the efforts to seize and sequester the car. Also, since the journal entries are not before us, we are not aware whether the defendant has filed answer.

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In any event, on 03rd February 2010, the defendant made an application, by way of a petition and supporting affidavit, praying that, the Order for sequestration be vacated. The plaintiff filed its statement of objections to the defendant's application, with a supporting affidavit. The parties agreed that, the defendant's application to vacate the Order for sequestration, be decided upon written submissions. On 09th March 2010, both parties tendered their written submissions to the High Court. By his Order dated 22nd April 2010, the learned High Court Judge vacated the Order for sequestration which had been issued ex parte. Since the car had not been sequestered and seized, the learned Judge discharged the bond furnished by the plaintiff.

The plaintiff made an application to this Court seeking leave to appeal from the Order of the High Court. This Court has granted leave to appeal on the following three questions of law, which are set out verbatim:

(i) The learned Judge of the Commercial High Court in his said order having held that the Petitioner has complied with the requirements set out in the said section 653 of the Civil Procedure Code has misdirected himself on the case law applicable to the said section ?

(ii) In a situation where the Petitioner on the information given by the Respondent has stated in the Petition (marked 'P2') and the Affidavit (marked 'P3') that the Petitioner verily believes that the only valuable asset that the Respondent is possessed with is the said vehicle, the learned Judge of the Commercial High Court in his said order has gravely misdirected himself in holding that the Petitioner has failed to establish that the Respondent is not possessed with any other assets ?

(iii) The learned Judge of the Commercial High Court in his said order has not properly drawn his attention and/or misdirected himself with regard to the documents marked 'P2c' and 'P5i' already annexed to this Petition ?

At this point, it is pertinent to mention that, Section 653 of the Civil Procedure under and in terms of which the plaintiff has made the application to sequester the car and under and of which this appeal has to be decided, is contained in Part V of the Civil Procedure Code which provides for and governs the issue of the "Provisional Remedies" of 'arrest before judgment', 'sequestration before judgment', 'injunctions', interim orders' and the 'appointment of receivers'. Part V of the Civil Procedure Code consists of four Chapters. Chapter 47 makes provisions with regard to the "Provisional Remedies" of 'arrest before judgment' and 'sequestration before judgment'. Chapters 48, 49 and 50 make provisions regarding the other three "Provisional Remedies" of 'interim injunctions', interim orders' and the 'appointment of receivers'.

These "Provisional Remedies" provided by our Civil Procedure Code are referred to as "Interim Orders" and sometimes "Interlocutory Orders" in the India and England.

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Such Orders may be issued by a Court during the pendency of an action where the Court is satisfied that the interests of justice require the issue of an Order granting one or more of these "Provisional Remedies" before the Court makes a final determination of the action.. As observed in Halsbury's Laws of England [4th ed. Vo. 37 para 326], "Interlocutory applications are almost invariably necessary in order to deal with the rights of the parties in the interval between the commencement of the proceedings and their final determination. Their function is to enable the court to grant such interim relief or remedy as may be just or convenient. Such relief or remedy may be designed to achieve one or more of several objectives, for example to maintain the status quo ante, to prevent hardship or prejudice to one or other of the parties, to preclude one party from overreaching or outwitting the opposite party, to preserve a fair balance between the parties and to give them due protection while awaiting the final outcome of the proceedings, and to prevent any abuse of process during this period.".

In the case of an Order for sequestration of property before judgment, which is the subject of the present case, section 653 of the Civil Procedure Code provides this "Provisional Remedy" to protect the interests of a plaintiff faced with the prospect of a defendant who is about to fraudulently dispose of his property, during the pendency of the action, in order to escape paying the monies which he will have to pay to the plaintiff, if a decree is entered against him. Thus, a sequestration order is issued to prevent a decree which may be entered in favour of the plaintiff being rendered nugatory, by the fraudulent disposal of property by the defendant.

In view of the circumstances in which a sequestration order is issued and its effect, a sequestration order may be described as an extraordinary remedy issued on a just and equitable basis.

A sequestration order can be issued at the commencement of the action or at any time before judgment. Due to the nature of the circumstances which give rise to a need to seek a sequestration order, such Orders are, usually, issued ex parte. That is because, a defendant who has ample notice of an application for an Order sequestering his property, is likely to then have equally ample opportunity to complete a fraudulent alienation of his property before the plaintiff can obtain a sequestration order and,...