TRANS ORBIT GLOBAL LOGISTICS (PVT) LTD

TRANS ORBIT GLOBAL LOGISTICS (PVT) LTD

VS.

PEOPLE'S BANK

SUPREME COURT
THURAIRAJA, J.
GOONERATNE, J.
DE SILVA, J.
SC/APPEAL/92/2020
SC/HCLA/5/2020
HC/CIVIL/640/17/MR
JULY 14, 2021

High Court of the Provinces (Special Provisions) Act, No. 10 of 1996, section 2(1), item (1) of the First Schedule to the Act-Civil Law Ordinance, No. 5 of 1852, section 3-Delictual liability and contractual liability-Jurisdiction of the Commercial High Court

The plaintiff customer filed action against the defendant bank in the Commercial High Court seeking damages in a sum of Rs.25 million for negligence on the part of the defendant bank in carrying out the transfer of a certain sum of money from the plaintiffs account in the defendant bank to an account in a different bank. The Commercial High Court upheld a preliminary objection and dismissed the plaintiffs action on lack of jurisdiction on the premise that there was no commercial transaction and the cause of action was based on negligence and/or breach of duty of care and not on contract. The plaintiff appealed to the Supreme Court.

Held :

1. The jurisdiction of the Commercial High Court has two components: subject matter jurisdiction and territorial jurisdiction. The subject matter jurisdiction is set out in the First Schedule to the Act while the territorial jurisdiction is set out in section 2(1) of the Act. The resulting jurisdiction lies exclusively with the Commercial High Court.

2. The fundamental requirement for the exercise of the jurisdiction of the Commercial High Court is that the cause of action must have arisen out of a commercial transaction. The term "commercial" shall be interpreted in a broad sense having regard to the many activities which are an integral part of banking and commerce..

3. The genus of item ( 1) in the First Schedule to the Act is a commercial transaction. This item sets out certain classes of causes of action that fall within it. It is not intended to be comprehensive, as the word used therein is "including". One such class of cause of action relates to banking. When the cause of action relates to banking by definition, it becomes a cause of action arising out of a commercial transaction.

4. The pertinent question is whether the cause of action relates to banking and not whether the cause of action is dellctual. In answering this question, the court will look not to the mere form but to the grounds given in the plaint and to the media on which the plaintiff seeks judgment. The media upon which the plaintiff instituted the action is no doubt a banking transaction.

5. Applying a broader interpretation to item (1), all causes of action relating to banking, in which the debt, damage or demand is for a sum exceeding Rs.20 million or such other amount as may be fixed by the Minister from time to time by notification published in the Gazette, are within the subject matter jurisdiction of the Commercial High Court, except for actions instituted under the Debt Recovery (Special Provisions) Act, No. 2 of 1990.

Cases referred to :

1. Union of India v. Elphinstone Spinning and Waving Co Ltd and others AIR (2001) SC 724

2. DAD. Engineering (Pvt) Ltd v. Subhasinghe (SC/APPEAL/45/2015, SC Minutes of 15.12.2017)

3. Cornel and Company Limited v. Mitsui and Company Ltd and others [2000] 1 Sri LR 57

4. Seneviratne and another v. State Bank of India (SC/APPEAL/53/2006, SC Minutes of 17.12.2014)

5. Tennant v. Union Bank of Canada [1894] AC 31

6. Indian Bank v. Acuity Stock Brokers (Pvt) Ltd [2011] 2 Sri LR 149 at 155-6

7. Henderson v. Merrett Syndicates Ltd [1995] 2 AC 145 at 193-4

8. Barclays Bank PLC v. Quincecare Ltd and another [1992] 4 All ER 363 at 375-6

9. Shannon Realties Ltd v. Ville de St. Michel [1924] AC 185 at 192-3

APPEAL from the Judgment of the Commercial High Court of Colombo.

Sumedha Mahawanniarachchi with lndika Weerasingh

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