TRANS ORBIT GLOBAL LOGISTICS (PVT) LTD VS. PEOPLE'S BANK
2021 SLR 1 204
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