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1930 Supreme(SC) 80
Privy Council At Ceylon
Macmillan, Russell of Killowen , Justice Lords Atkin, JJ.
Ramanathan Chetty -Appellant
Versus
Mira Saibo Marikar -Resopndent
Privy Council Appeal No. 96 of 1929
Decided On : 18-11-1930
A. Majid, J.M. Parikh , A.M. Dunne, J.P. Hallett, Hugh, L.dc Gruyther
A person who causes the seizure of goods under a warrant that does not authorize the seizure of those specific goods is liable for damages without proof of malice. Malice is only required if the warrant authorized the seizure but was improperly obtained.
Headnote:(A) Insolvent Ordinance - Wrongful seizure of goods - Liability for damages - Where a search warrant authorizes the seizure of property belonging to an insolvent firm, but goods belonging to a third party are seized, the person who caused the seizure is liable for damages regardless of whether malice is proved.
(B) Judicial sanction - Distinction between acts done under a warrant improperly obtained and acts where the warrant did not authorize the seizure of the goods actually seized - If goods are seized under a warrant that authorized the seizure, no action lies unless the complainant establishes malice, similar to malicious prosecution; however, if the warrant did not authorize the seizure of the specific goods seized, an action for damages lies without proof of malice.
Facts of the case:
Two creditors of an insolvent firm were involved. One creditor obtained a search warrant to seize the firm's property. Based on information provided by this creditor, an official seized goods from the premises of the other creditor. It was subsequently determined that the seized goods were the property of the other creditor and not the insolvent firm. The goods were sold, leading to an action for damages for wrongful seizure.
Findings of Court:
The respondent was the cause of the appellant's property being seized under a warrant that only directed the seizure of property belonging to the insolvent firm.
Issues: Whether the appellant must establish malice on the part of the respondent to recover damages for the wrongful seizure of goods when the warrant did not authorize the seizure of those specific goods.
Ratio Decidendi: The court held that if a warrant does not authorize the seizure of the goods actually seized, an action for damages lies without proof of malice. This differs from cases where a warrant is improperly obtained but authorizes the seizure of the goods taken, in which case malice must be proven to establish a remedy.
Result: Appeal allowed.
Legal Category Hierarchy
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tort
- wrongful seizure
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practice and procedure
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insolvency
- search warrants
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insolvency
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civil law
- damages
Lord Russell of Killowen—
This is an appeal from a decree of the Supreme Court of the Island of Ceylon reversing a decree of the District Court of Colombo. The relevant facts can be briefly stated. The parties to the action were both of them creditors of Nana Moona Mahamado Rawther and Co., who carried on business as ten merchants at Nos. 35 and 65, Second Cross Street, Colombo, and who may be conveniently referred to as "the firm." On 18th June 1925, the firm filed their petition in insolvency.
The respondent, who carried on business at No. 69, Second Cross Street, and had heard of the insolvency, observed that ten was, on 2lst June 1925, being removed from the firm's premises at 65, Second Cross Street.
The tea was on that day being removed in pursuance of an agreement which had been come to between the firm and the appellant on 16th June 192S whereby tea. and other goods were invoiced by the firm to the appellant at a sum of Rs. 21,700, the appellant being debited with that amount in account.
In fact, large quantities of tea had already in pursuance of this arrangement, bean re novel on 16th and 17th June from the firm's premises to the appellant's premises No. 102, Sea Street.
The respondent and certain other creditors of the firm became, not unnaturally suspicious, and on 21st June 1925, they entered into an agreement to take the necessary Court proceedings, by appointing one of themselves as "leading person." The respondent appears to have bean selected for this purpose.
Before referring to the Court proceedings which were taken by the respondent it is convenient to state at once, that by a judgment delivered in the District Court of Colombo on 14th September 1925, it was decided (and the matter is res judicata, between the parties to this appeal) that the ten in question was sold by the firm to the appellant on 16th June 1925 and was the property of the appellant.
On 22nd June 1925 the respondent presented a petition to the District Court of Colombo asking (amongst other reliefs) that the Fiscal might be ordered to seize the goods specified in the petition at the respective places therein specified. The petition specified the goods and places in the following words :
"The insolvents have after their insolvency removed the following goods and deposited them in the several places set out hereinafter. Tea of the approximate value of Rs. 5,000 has been removed by the insolvents to No.42, Prince Street, Colombo, the store of K. M. S. Sego Mohamado. Nana Rawanna Mana Nana Suppiah has from 19th to 21st June removed tea of the value of about Rs. 30,000 to his store at Sea Street. Colombo; flour, sugar and Mal-dive fish were removed to Gamoola on 18th June, and I understand that M. S. H. Abdul Ally was handed over 29 bags of flour, tea and Maldive fish."
An affidavit sworn by the respondent in support of the petition contained an allegation in identical words. The reference to Nana Rawanna Mana Nana Suppiah is a reference to the appellant's agent, Supranamian, who had removed the ten to 102, Sea Street.
As a result of his application, the respondent obtained the issue of a search warrant to the Fiscal on 22nd June 19'25. The warrant, after reciting that there was reason to suspect and believe that property of the firm was concealed
"at Nos. 65 and 35. Second Cross Street, No. 42. Prince St. Skinners Road, and at Sea
Street,"
proceeded in the following terms :
"These are therefore by virtue of the Insolvent Ordinance, 183 , to authorize and require you with necessary and proper assistants to enter in the day-time into the premises aforesaid and there diligently to search for the said property and if any property of the said insolvents shall be there found by you on such search, that you seize the same to be disposed of and dealt with according to the provisions of the said Ordinance."
The Fiscal executed the said warrant by entering No. 102, Sea Street and seizing large quantities of tea there, which tea must, as hereinbefore mentioned, be tak
