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SIMON SILVA v. DEBT CONCILIATION BOARD
NLR65V138
1963 Present : T. S.
Fernando, J.
H. W. SIMON SILVA, Petitioner, and THE DEBT
CONCILIATION BOARD and others, Respondents
S. C. 212 of 1963-Application for the, grant and issue of Mandates in the
nature of Certiorari and Prohibition in terms of Section 42 of the
Courts Ordinance
Debt
Conciliation Ordinance (Cap. 81), as amended by Debt Conciliation (Amendment)
Act, No. 5 of 1959-Sections 19A, 19B, 49, 62-Application for settlement in
respect of debt secured by conditional transfer of immovable property-Procedure
for " entertaining " and giving notice of it-Incapacity of Board to delegate its
functions to Secretary-Effect of invalid notice issued by Secretary-Certiorari
and Prohibition.
Where a debt has been secured by such a conditional transfer of immovable
property as is a mortgage within the meaning of the Debt Conciliation Ordinance
(as amended by Act No. 5 of 1959), the act of " entertaining " an application
for settlement under section 19 A of the Ordinance must be effected by the Debt
Conciliation Board itself and cannot be delegated by the Board to the Secretary.
Accordingly, if the Secretary purports to issue to the creditor, under section
19A (2) of the Ordinance, a notice of the application made by the debtor, before
the application is entertained by the Board, the prohibition on alienation or
other disposition imposed by section 19B (1) would not be operative.
Where the Debt Conciliation Board in excess of its jurisdiction purports to
declare as null and void under section 19B (2) of the Ordinance a sale validly
executed by the creditor, Certiorari would lie.
APPLICATION
for writs of certiorari and prohibition.
H. W. Jayewardene, Q. C., with L. C. Seneviratne, for the petitioner.
M. T. M. Sivardeen, for the 8th respondent.
M. M. Kumarakulasingham, with U. A. S. Perera, for the 7th respondent.
Cur. adv. vult.
June 11, 1963. T. S. FERNANDO,
J.-
The following are the reasons for the order made by me at the conclusion of the
argument on this application whereby I quashed the order made on 20th February
1962 by the Debt Conciliation Board.
By deed No. 353 of 18th March 1957 the 7th respondent sold an allotment of land
to the 8th respondent for a sum of Rs. 6,000 subject to the condition that if
the said sum was repaid within a period of three years from the date of the sale
together with interest at 15% the 8th respondent was to retransfer the land to
him. The powers of the Debt Conciliation Ordinance of 1941 (Cap. 81) to effect
settlements of debts owed by a person to his secured creditors were extended by
the (Amendment) Act, No. 5 of 1959, to cover settlements of debts purporting to
be secured " by any such conditional transfer as is a mortgage within the
meaning of the Ordinance ". To give effect to this extension of the Board's
powers certain new sections were enacted by the (Amendment) Act, and two of
these-Sections 19A and 19B-require examination upon this application.
These two Sections are reproduced below :-
19A. (1) The Board shall not entertain any application by a debtor or creditor
in respect of a debt purporting to be secured by any such conditional transfer
as is a mortgage within the meaning of this Ordinance unless that application is
made at least thirty days before the expiry of the period within which that
property may be redeemed by the debtor by virtue of any legally enforceable
agreement between him and his creditor.
(2) Where the Board entertains an application of a debtor in respect of such a
debt as is referred to in sub-section (1) the Board shall cause notice of that
fact signed by the Secretary to be sent together with a copy of the application
by registered post to the creditor to whom the application relates.
19B. (1) Where a creditor receives a notice under sub-section (2) of section 19A
relating to an application of a debtor of his in respect of such a debt as is
referred to in sub-se
