IN THE SUPREME COURT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA In the matter of an appeal in terms of Section 5 (1) of the High Court of the Provinces (Special Provisions) Act No. 10 of 1996 as amended by High Court of the Provinces (Special Provisions) (Amendment) Act No. 54 of 2006 read with Section 6 of the Act No. 10 of 1996 and provisions contained in Chapter LVIII of the Civil Procedure Code. Kanthi Fernando, No. 10, Wijesekara Place, Kalutara South.

S.C. Appeal (CHC) No. 84/2014 Petitioner H.C. (Civil) No. 57/2012/CO Vs.

W. Leo Fernando (Maddagedara) Estates Company Limited, No. 01, Castle Terrace, Colombo 08. Respondents AND NOW BETWEEN Kanthi Fernando, No. 10, Wijesekara Place, Kalutara South.

Petitioner-Appellant Vs.

W. Leo Fernando (Maddagedara) Estates Company Limited, No. 01, Castle Terrace, Colombo 08.

Respondent-Respondent Before: Hon. Vijith K. Malalgoda, PC, J.

Hon. Janak De Silva, J.

Hon. K. Priyantha Fernando, J.

Counsel:

Dr. Romesh De Silva, PC with Ranil Samarasooriya and Shanaka Cooray for Petitioner-

Appellant Chrishmal Warnasooriya with Prabuddha HetÝarachchi and M.I.M. Iynullah for Respondent-Respondent Written Submissions:

Petitioner-Petitioner on 27.10.2023 Respondent-Respondent on 07.07.2017 Argued on: 18.10.2023 Decided on: 24.01.2024 Janak De Silva, J.

The Petitioner-Appellant (“Appellant”) instituted this action in the Provincial High Court of the Western Province (Exercising Civil Jurisdiction) Holden in Colombo (“Commercial High Court”) seeking an order to wind up the Respondent-Respondent (“Respondent”).

The learned Judge of the Commercial High Court dismissed the application with costs.

Aggrieved by the dismissal, the Appellant has preferred this appeal.

The Appellant has also filed a leave to appeal application bearing No. SC/HC/LA/46/2014. Parties agreed that they will abide by one judgment given in S.C.

Appeal (CHC) No. 84/2014 which is the statutory appeal.

The learned Judge of the Commercial High Court dismissed the application to wind up on the following grounds:

1. The Appellant has failed to submit any documents to corroborate the matters pleaded in the petition seeking the winding up of the Respondent.

2. The Appellant has failed to exhaust alternative remedies prior to the institution of this application.

3. It is not just and equitable to wind up the Respondent Company since the Appellant has not exhausted alternative remedies.

Ground for Winding Up The winding up application was made pursuant to Section 270 (f) of the Companies Act No. 07 of 2007 (“Act”) which reads:

“270. A company may be wound up by the court, if-

(f) the Court is of the opinion that it is just and equitable that the Company should be wound up”

The Appellant sought a winding up order on the basis that there is a deadlock in the Respondent Company and/or in the management of the said Company and/or the ownership of the said Company.

In Ceylon Textiles Ltd. v. Chittampalam Gardiner (54 N.L.R. 313) it was held that the words "a company may be wound up by the court if the court is of the opinion that it is just and equitable that the company should be wound up" in Section 162 (6) of the Companies Ordinance No. 51 of 1938 is extremely wide and includes a situation where there is a deadlock. However, L. M. D. De Silva J. added a word of caution in stating (at page 316):

“In the decided cases the deadlock has been complete. In fact no deadlock can truly be called a deadlock unless it is complete but the word "complete" serves to direct attention to the true nature of the deadlock that must be shown to exist before a liquidation can be ordered. It must be complete not only at any given moment but it must appear reasonably that no remedy can be hoped for by recourse to the courts or otherwise.”

It is an established rule of interpretation that where there are statutes made in pari materia, whatever has been determined in the construction of one of them is a sound rule of construction for the other [Craies on Statute Law, 7th Ed., page 139]