Dissanayake V. Agricultural And Industrial Credit Corporation

1962 Present: H. N. G. Fernando, J., and T. S. Fernando, J.

D. S. DISSANAYAKE, Appellant, and AGRICULTURAL AND
INDUSTRIAL CREDIT CORPORATION and others, Respondents

S. C. 73 Inty.-D. C. Colombo, 802/Z.

Injunction-Power of Court to issue an interim injunction-Scope-Agricultural and Industrial Credit Corporation Ordinance, s. 80-Cicil Procedure Code, s. 667,

In an application for an interim injunction the proper question to decide is " whether there is a serious matter to be tried at the hearing ". If it appears from the pleadings already filed that such a matter does exist, the further question is whether the circumstances are such that a decree which may ultimately be entered in favour of the party seeking the injunction would be nugatory or ineffective if the injunction is not issued.

Where property mortgaged to the Agricultural and Industrial Credit Corporation is sold by the Corporation in pursuance of statutory powers conferred on it, and the mortgagor institutes an action for a declaration that the sale was void on the ground of material irregularity, the mortgagor may apply for an interim injunction restraining the Corporation from confirming the sale.

APPEAL from an order of the District Court, Colombo.

G. T. Samerawickreme, with K. Palakidner, for the Plaintiff-Appellant.

H. W. Jayewardene, Q. C., with N. E. Weerasooria (Jnr.), for the 1st Defendant-Respondent.

Cur. adv. vult.

April 2, 1962. H. N. G. FERNANDO, J.-

The first Defendant, the Agricultural and Industrial Credit Corporation, was the mortgagee of a certain land belonging to some of the other Defendants, and the Plaintiff-Appellant was a secondary mortgagee of the same land. In pursuance of statutory powers conferred on the Corporation, the land was sold for the recovery of moneys due to the Corporation on its mortgage and purchased by the second Defendant.

The Plaintiff thereupon instituted this action for a declaration that the sale was void on the ground of material irregularity, namely that the sale had been held prior to the advertised time, and elsewhere than at the advertised place. The Plaintiff also applied for an interim injunction enjoining the Corporation from confirming the sale. This application was obviously intended as a means of averting the operation of the statutory provision that the validity of such a sale cannot be challenged after the issue of a certificate of sale to the purchaser. (Section 80 of Chapter 402.)

The learned District Judge issued notice of the application to the Defendants, but also issued at the same time an enjoining order effective " until this case is decided ", meaning thereby in the context until the application is determined. Both notices were returnable on a date fixed by the Judge. Thereafter, the Corporation filed proxy, and was given time to file Answer as well as Objections to the application, both of which were duly filed. The matter of the objections was then fixed for inquiry. But when this " inquiry " was held, there was actually (save for the absence of formally-framed issues) a full-scale trial of the substantive dispute in the action, at which each party led evidence with the object of proving when and where the sale had taken place, and after which the Judge delivered an " order " which has all the characteristics of a judgment upon the substantive question. In fact the only matter discussed in the order is the time and place of the sale, and on this matter the Judge reached a conclusion strongly adverse to the Plaintiff's allegations in his plaint. Holding for this reason that the Plaintiff's objections to the confirmation were frivolous, he dismissed the application for the injunction.

The proper question for decision upon an application for an interim injunction is " whether there is a serious matter to be tried at the hearing " (Jinadasa v. Weerasinghe1[1 (1929) 31 N. L. R

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