SELAN BANK PLC
vs
SAMANELlYA TEAS (PRIVATE) LIMITED AND 3 OTHERS

SUPREME COURT
SHIRANEE TILAKAWARDENE. J.
SALEEM MARSOOF, J AND
BALAPATABENDI, J
SC (C. H. C.) APPEAL NO. 43/2007
SC(HCLA) NO. 36/2007
HC (CIVIL) NO. 159/06/01
OCTOBER 22nd, 2008

Evidence Ordinance - Section 90(e) - Section 130(3) -Inspection of books by order of Court or Judge - Section 65 - Casesin which secondary evidence relating to documents may be given - Section 66 - Rules as to notice to produce documents - Civil Procedure Code - Section 104.

The Respondent had obtained banking facilities amounting to Rs. 29,700,000/= from the Appellant-Bank by entering into four mortgage bonds drawn in favour of the Appellant -Bank. Subsequently, the Respondent defaulted the repayment of the loan facilities. The Appellant -Bank demanded that a sum of Rs. 52,811,385/74 with interest at 22% per annum be paid immediately. The Board of Directors of the Bank also passed a resolution to recover the amount due to the Bank by auctioning the properties mortgaged to the Bank.

The Respondent challenged the correctness of the amount claimed by the Bank by filing action against the Bank in the Commercial High Court of Colombo, seeking inter alia an order from the ourt directing the Bank to produce a Statement of Accounts in respect of the outstanding amount due to the Bank. In the alternative the Respondent also sought an order from Court to obtain a Statement of Accounts in respect of the loan facilities in  terms of Section 90(e) of the Evidence Ordinance. The High Court Judge allowed this application. The Appellant-Bank appealed against this order.

The Supreme Court granted leave on the question of law, namely, whether the judgment of the High Court Judge was in error in permitting the application made under Section 90(e) of the Evidence Ordinance and  consequently, requesting the Bank to produce a Statement of Accounts in respect of the banking facilities obtained by the Respondent.

Held:

(1) The ambit and object of Section 90(e) is clearly, for the original entries in the ledgers to be examined and clearly specifies that the request should refer to an already existing original or primary entry of Banker's Books or business of a Bank.

Per Shiranee Tilakawardena, J. -

"It is important to note, however, that while Section 90(e), as guided by Section 63 of the Evidence Ordinance, affords a great deal of access to the internal documents of a bank, the breadth of this allowance is not without limit. What are noticeably missing from the list of discoverable material in Section 90(e) and from the definition of Secondary Evidence in Section 63 - are any derivative creations, that is, items which have to be created or brought into existence making use of entries in books of accounts which have been maintained by the Bank in the ordinary course of business".

(2) "Statement of Accounts" sought by the Respondent does not fall under  the definition of Primary Evidence, nor is it covered by the definition of Secondary Evidence and therefore the judicial discretion cannot be made under Section 90(e) of the Evidence Ordinance to compel the preparation and delivery of such statement.

(3) Section 65 and 66 of the Evidence Ordinance, taken together, explicitly set out that the access to Secondary Evidence is only possible, inter alia, (1) where the Primary Evidence is not obtainable due to destruction or disappearance or (2) where the party possessing the Primary Evidence fails to produce it despite issuance of a notice of request to such party to do so.

APPEAL from an order of the Commercial High Court, with leave being granted.

Case referred to:

(1) Macdonnell vs. Evans (1852)

(2) Williams vs. Summer Field

Kuvera de Soysa with S. Haleemdeen, Sumedha Mahawanniarachch and Asela Rekawa for Defendant-Petitioner

Gamini Marapana, P.C. with Navin Marapana for the Plaintiff-Respondents.

cur.adv. vult

February 16, 2009

SHIRANEETILAKAWARD