Bosanquet & Co. V. Rahimtulla & Co.,

1931 Present: Macdonell C.J. and Garvin S.P.J.

BOSANQUET & CO. v. RAHIMTULLA & CO.

14-D.C. Colombo, 34,160.

Sequestration of property before judgment-Action for damages-Allegation of fraudulent alienation of goods-No reasonable or probable cause for belief-Malice-Discharge of mandate.

Where property sequestered before judgment has been released from seizure and the writ returned, it is not necessary that the mandate should formally be discharged before an action for damages for wrongful sequestration is instituted.

Where a creditor procures the issue of such a mandate by representing to the Court that his debtor is fraudulenty alienating his property- when in fact the debtor was not doing so-merely for the purpose of enforcing a speedy payment of his debt,-

Held, that the creditor was actuated by malice.

THE plaintiffs sued the defendants by way of summary procedure for the recovery of a sum of Rs. 6,846.73 and interest due on certain promissory notes. When they filed the plaint the plaintiffs applied for and obtained under section 653 of the Civil Procedure Code a mandate of sequestration on the ground that the defendants " are disposing of their stock-in-trade under their market value and appropriating the proceeds for themselves without meeting their engagements with their creditors and have acted fraudulently in disposing of their stock-in-trade in the said manner with a view to avoid payment of their debts due to the plaintiff-company ". The defendants filed answer alleging payment of the moneys due but later they abandoned this plea. They further counter-claimed damages Rs. 50,000 for injury to their credit and reputation by reason of the issue of the mandate and of the (Sequestration of their goods.

On the claim in reconvention, the learned District Judge gave the 4efendants judgment for Rs. 5,000 and costs. The plaintiffs appealed.

F. de Zoysa, K.C. (with him B. F. de Silva), for plaintiffs, appellants

H. V. Perera, for defendants, respondents.

December 18, 1931. MACDONELL C.J.-

In this case plaintiff-appellants sued defendant-respondents by way of summary procedure for Rs. 6,846.73 and interest due on certain promissory notes. On the date, August 23, 1929, when they filed their plaint, they applied for and obtained under section 653 of the Civil Procedure Code a mandate of sequestration of the goods of the defendant-respondents. The latter at first denied that any sum was due to the plaintiffs and they also counter-claimed damages Rs. 50,000 for injury to their credit and reputation by reason of the issue of the mandate and of the sequestration thereunder of their goods. At the hearing of this case defendants did not persist in denial of their indebtedness to plaintiffs in the sum of Rs. 6,846.73 and judgment passed for plaintiffs for that amount with interest. On defendant's claim in reconvention, the learned District Judge gave them judgment and assessed the damages at Rs. 5,000 and costs in that class. It is from this judgment on the claim in reconvention that the plaintiffs now appeal.

The facts were these. The plaintiffs are importers of goods in Colombo and the defendants are and have been for many years vendors of goods in Colombo, selling them to customers in the several shops they have here but also supplying goods to smaller traders at a distance. The course of business between the plaintiffs and the defendants was that defendants would order goods from plaintiffs who would then import them, whereupon defendants would take delivery of the goods imported for them, giving promissory notes at 120 days. Firms so importing goods are in the habit of employing a broker who would guarantee the purchasing firm's transactions. It is in evidence that one Segarajasingham. the guarantee broker of certain other importing firms, had died in May, 1929-the events in this case occurred in August, 1929- and that his death cause

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