Financial Times

Onus on defendant to begin case under Debt Recovery laws

The District Court of Colombo recently issued an order that the onus is on the defendant to begin the case under the Debt Recovery (Special Provisions) Act No.2 of 1990.

The order, made by Additional District Judge M.R.C. Fernando, is of great significance with regard to actions instituted by Banks and other lending institutions under the Debt Recovery Act, lawyers say.
The case had been filed by the Union Bank of Colombo Ltd. against Vajira Kalinga Wijewardena and Captain Virasinghe (Case No. Debt Recovery 969) under the Debt Recovery Act of 1990 as amended by Act No.9 of 1994 for the recovery of a sum of Rs. 50,763,293.66 with interest.

The main question before the Court was which party should commence the case in a context where the defendants had filed answer. The related issue whether the filing of answers by the defendants converted an action filed under the special procedure laid down in the Debt Recovery Act, to a procedure followed in a regular action was also a matter to be decided.

In the present action the defendants had filed answers pursuant to a direction by the Supreme Court in a consent order. The Plaintiff Bank thereafter challenged the defendants right to file Answer in the District Court and in the Court of Appeal. However, the Court of Appeal dismissed these applications. The Supreme Court refused Leave to Appeal there from.

When the case came up for trial Nigel Hatch P.C. for the Plaintiff Bank submitted that under this law the defendant should begin the case. He also objected to the defendants tendering issues as it was premature.

The defendants submitted that since they have filed answers, this action had been converted into regular action and as such the Plaintiff should begin the case. Their contention was that the mere filing of answers automatically converts the procedure to a regular action.

The District Court held that the Debt Recovery Act was introduced in 1990 with the sole purpose of assuring speedy recovery of the amounts due to lending institutions in the large interest of the economy of the country.

The Act lays down a special jurisdiction and procedure relating to debt recovery by lending institution. Accordingly the lending institutions are allowed to follow a summary procedure which is distinct from the normal regular action in recovering their debts.

The District Court upheld the Plaintiff Bank’s submission that under the scheme of the Debt Recovery Act once leave is granted to a defendant section 384 of the CPC applies and the defendant should begin the case.

Nigel Hatch P.C. appeared for the Plaintiff Bank with Mrs. K. Geekiyanage and Ms. P. Abeywickrema. Nihal Fernando P.C. with R. Jayasinghe appeared for the first Defendant and A.R. Surendran P.C. with S. Ganesharajan appeared for the second Defendant.


 
Top to the page  |  E-mail  |  views[1]
 
Other Financial Times Articles
LMSL-land clearly belonged to SLPA
Sampath says capital adequacy enough
EU probe begins on Lanka’s GSP+
JKH share falls on rumours, foreign selling
Best times still ahead for investors in capital markets
Crude oil hits lowest in two years
Hard times for coir workers
Garment crisis, JKH on the hop
Revival: “We can do it”- Meegoda
Global crisis will take a minimum of 12 to 15 months to stabilise
PBJ affidavit to be accepted once all letters are filed-Court
Adverse comments against judiciary may be to stifle its independence
Cargills using Jayasuriya to woo public support for its products
Brandix takes Gold at National Cleaner Production Awards
Domestic workers in local households push for rights
Regional business leaders to meet at BPA AGM
Chairman and CEO must be two separate posts
Sri Lankan psychologists come together to form asssociation
Commercial Bank in world’s top 1000 banks
BOI promoting regional development
Sri Lanka takes historic step in evidence through video conferencing
Seylan Merchant Leasing’s deposit base tops Rs 1.5 billion
Lower consumption of lubricants-Chevron Lanka
Voice-based phone directory from Suntel
Colombo, Gampaha and Kalutara most competitive Sri Lankan cities
58% of low grown teas unsold at auctions this week
HSBC unveils world’s longest golf cart
Garment factory closures points to unviable industry-report
Arab airlines urged to focus on efficiency
Abdul Rahims – 136 years of trading
Dave Ulrich’s ‘Future Proof Your HR’ draws crowds to Water’s Edge
Sparks fly at SPAACS launch
Harry J-controlled parties restricted to 10% on ComBank voting
Veteran insurance consultant urges Code of Conduct for insurance
Onus on defendant to begin case under Debt Recovery laws
Renton to spearhead World Bank tourism project
Lankan banker wins ‘Woman of the Year in Finance’
Minimum wage for workers under consideration – outgoing EFC Chairman
Financial scandals : Who takes responsibility?
ADB, Sri Lanka agree on partnership strategy
JKH: Treatment of LMSL Land
Sri Lankan Actuaries form professional body
US$150 mln rescue package to tackle loss of GSP+ benefit
Interest rates to come down
Security experts stress importance of private security agencies

 

 
Reproduction of articles permitted when used without any alterations to contents and a link to the source page.
© Copyright 2008 | Wijeya Newspapers Ltd.Colombo. Sri Lanka. All Rights Reserved.| Site best viewed in IE ver 6.0 @ 1024 x 768 resolution