IN THE SUPREME COURT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA Commercial Leasing and Finance PLC, (Formerly known and named as Commercial Leasing and Finance Limited)

No. 68, Bauddhaloka Mawatha, Colombo 04.

Plaintiff SC APPEAL NO: SC/APPEAL/23/2021 SC LA NO: SC/CHC/LA/85/2020 CHC CASE NO: HC/CIVIL/175/2013/MR Vs.

Niranjan Canagasooriyam, No. 12, Palm Grove, Colombo 03.

Defendant AND NOW BETWEEN Niranjan Canagasooriyam, No. 12, Palm Grove, Colombo 03.

Defendant-Appellant Vs.

Commercial Leasing and Finance PLC, (Formerly known and named as Commercial Leasing and Finance Limited)

No. 68, Bauddhaloka Mawatha, Colombo 04.

Plaintiff-Respondent Before: Murdu N.B. Fernando, P.C., J.

A.H.M.D. Nawaz, J.

Mahinda Samayawardhena, J.

Counsel: Neomal Pelpola for the Defendant-Appellant.

Hiran De Alwis with Medani Navoda for the Plaintiff-

Respondent.

Argued on : 15.07.2021 Written submissions:

by the Defendant-Appellant on 03.03.2021. by the Plaintiff-Respondent on 04.03.2021.

Further written submissions:

by the Defendant-Appellant on 06.08.2021. by the Plaintiff-Respondent on 20.08.2021.

Decided on: 15.10.2021 Mahinda Samayawardhena, J.

The plaintiff instituted this action against the defendant in the Commercial High Court to recover a sum of Rs. 130,819,394.78 with interest on “the guarantee and/or indemnity and/or agreement dated 30.12.2010” marked B with the plaint. When this document was sought to be marked in evidence as P2, the defendant objected to it on the basis that it is a bond which has not been duly stamped and therefore cannot be admitted in evidence. The Commercial High Court made a vague order when it held on the one hand that it need not be stamped as it is not a bond, but on the other hand allowed the plaintiff to rectify the stamp deficiency, if any. Being aggrieved by this order, the defendant filed this appeal with leave obtained on the following two questions of law:

1. Whether the indemnity furnished to secure a factoring agreement marked as P2 in the brief is subject to stamp fees?

2. If the aforementioned question of law is answered in the affirmative, what is the stamp duty that needs to be paid in respect of the said indemnity?

Section 33(1) of the Stamp Duty Act, No. 43 of 1982, reads as follows:

No instrument chargeable with stamp duty shall be received or admitted in evidence by any person having by law or consent of parties authority to receive evidence or registered or authenticated or acted upon by any person or by any officer in a public office or corporation or bank or approved credit agency unless such instrument is duly stamped:

Provided that any such instrument may—

(a) be admitted in evidence by any person having by law or consent of parties authority to receive evidence; or (b) if the stamp duty chargeable on such instrument is one thousand five hundred rupees or less, be acted upon by the Registrar-General, upon payment of the proper duty with which it is chargeable or the amount required to make up the same and a penalty not exceeding three times the proper duty.

The Stamp Duty (Special Provisions) Act, No. 12 of 2006, did not repeal the Stamp Duty Act, No. 43 of 1982. In terms of section 13 of the Stamp Duty (Special Provisions) Act quoted below, both Acts operate in parallel. If there is any inconsistency between the two with regard to the imposition or exemption of stamp duty or any other matter, the Stamp Duty (Special Provisions) Act prevails.

From and after the date of the coming into operation of this Act, the provisions of the Stamp Duty Act, No. 43 of 1982, relating to the Imposition of Stamp Duty (other than any instrument relating to the transfer of immovable property, the transfer of motor vehicles or documents filed in Court), Exemptions and any other provision in the aforesaid Act, shall, in so far as the same are inconsistent with the provisions of this Act, have no operation and the provisions of this Act shall prevail.

Learned counsel for the plaintiff admits that in terms of section 4(g) of the Stam