LIQUIDATOR - SUN CORNEL LTD

LIQUIDATOR - SUN CORNEL LTD

Vs.

BRAN DIX APPAREL SOLUTIONS LTD

COURT OF APPEAL
DE SILVA, J.
CA 627/2000(F)
DC NEGOMBO 5139/L
MARCH 15, 2019

Companies Act, No. 17 of 1982, sections 260, 276-lnstitution of action by the liquidator-Res judicata

The plaintiff liquidator instituted action against the defendant under section 276 of the Companies Act, No. 17 of 1982, seeking inter alia a declaration of title to the allotments of land in question. The defendant claimed to be the owner of the property on the basis that it was mortgaged to the People's Bank by the company wound up and, due to default in

payment, the bank had sold the property at a public auction to a nominee who later transferred the property to the defendant. The defendant also took up the position that the matter is res judicata, as there was previous litigation between the two parties. The District Court decided the plea of res judicata as a preliminary issue in favour of the defendant and dismissed the action. The plaintiff appealed to the Court of Appeal.

Held:

In order to succeed on a plea of res judicata the defendant inter a/ia shall satisfy the court that the former action was a regular action, it was between the same parties or their privies, the cause of action was identical in both actions and the previous judgment was a final judgment. On the facts and circumstances of the case, the District Judge was correct in holding that the matter is res judicata.

Cases referred to:

1. Subramaniam Chetty v. Soysa 25 NLR 344
2. D.H.S. Jayawardene v. R.K. Obeyesekere and others (SC/ APPEAL/21-23/2009, SC Minutes of 21.03.2011)
3. Dharmadasa v. Piyadasa Perera 64 NLR 249
4. Jujjuvarapu Kotamma v. Pappala Simhachalam and others AIR 1969 AP 76
5. Siriwardena v. Air Ceylon Ltd [1984] 1 Sri LR 286
6. Lowe v. Fernando et al 16 NLR 398
7. Dingiri Menika v. Punchi Mahatmaya et al 13 NLR 59
8. Allagasamy v. The Kalutara Co Ltd et al 14 NLR 262
9. Kitchen v. Campbell 2 W. Bl. 827

APPEAL from the Judgment of the District Court of Negombo.

M. U. M. Ali Sabry, P.C., with Ruwantha Cooray for the Substituted Plaintiff· Appellant.

Sanjeewa Jayawardena, P.C., with Rajeev Amarasuriya and P. Galappaththi for the Defendant-Respondent.

cur. adv. vult.

October 2, 2019

J. DE SILVA, J.

This is an appeal against the judgment of the learned District Judge of Negombo dated 01.06.2000.

The Plaintiff-Appellant (Plaintiff) instituted the above styled action in his capacity as a liquidator under Section 276 of the Companies Act No. 17 of 1982 in the District Court of Negombo seeking inter alia a declaration of title to the allotments of land more fully described in the schedule to the plaint dated 10.10.1995.

The Defendant-Respondent (Defendant) filed answer dated 16.05.1997 and claimed that the said property was mortgaged by the Plaintiff to the People's Bank under 3 mortgage bonds and due to the default of payment of the Plaintiff, the People's Bank sold the property in a public auction to a nominee (as there were no bidders) who later transferred the property to the Defendant (by endorsing the certificate of sale issued to the nominee), who then became the owner of the said property.

Further, it was claimed that there has already been a lawsuit (D.C. Colombo Case No. 2576/SPL) relating to the same matters sought to be canvassed by the above styled action, the judgment of which was appealed in C.A. Revision Application No. 584/93, Leave to Appeal Application No. L.A. 172/93 and S.C. Spl. L.A. Application No. 144/94. The Defendant took up the position that the proceedings and the judgment of the said lawsuit operate as resjudicata between the parties and that the Plaintiff has not followed the procedure laid down in C.A. Revision Application No. 584/93 when instituting the above styled action.

When the matter was taken up for trial on 18.11.1998, both parties inter alia admitted that the late K. Sachithananda, the former liquidator (the

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