CA Ramanayake v.

Sampath Bank Limited and Others 145

RAMANAYAKE
v.
SAMPATH BANK LTD. AND OTHERS

COURT OF APPEAL
WIJEYARATNE, J. AND
WEERASEKERA, J.
CA APPLICATION NO. 962/92.
DC COLOMBO CASE NO. 41/DR.
DECEMBER 15. 1992.

D ebt recovery - D ebt Recovery (Special Provisions) A ct No. 2 o f 1990 - D ebt

- Triable issue - Leave to ap p ear and defend - Civil Procedure Code, sections
38 4 to 3 8 9 - An issue o r question which ought to be tried - Lending Institution
- Failure to m ake dem and - Failure to file answ er or objections - D ecree absolute
- Failure to cure default by sum m ary procedure.
146 Sri Lanka Law Reports 11993/ 1 SriLR.

The plaintiff respondent Bank sued the 3rd defendant-petitioner and the 1st,
2nd and 4th defendants-respondents seeking the recovery o f Rs. 1,171,697/73
with interest and costs under the provisions of the Debt Recovery (Special
Provisions) Act No. 2 of 1990. The 1st and 2nd defendants-respondents were
the borrowers and the 3rd defendant-petitioner and 4th defendant-respondents
were the guarantors.

Held :

(1) The provisions of the Debt Recovery (Special Provisions) Act, No. 2 of
1990 are available to lending institutions as defined in the Act. A commercial
bank is such a lending institution. This procedure is however not available where
the loan or advance is less than Rs. 1,50,000 or where the amount claim ed as
interest exceeds the principal sum. No sum of money which constitutes a penalty
for default or delay in paym ent of a debt can be recovered under the Act.

(2) A debt recoverable under the Act is a sum of money which is ascertained
or capable of being ascertained at the time of institution of the action and which
is in default and alleged by a lending institution to have arisen from a transaction
in the course of banking, lending, financing or other allied business activity of
the institution but does not include a promise or agreem ent which is not in writing.

(3) A plaint filed under the provisions of the Act must be accompanied by
an affidavit to the effect that the sum claimed is justly due from the defendant
as well as the instrument, agreem ent or document sued upon or relied on. The
affirmant of the affidavit should be­

ta) a director or principal officer of the lending institution or an attom ey-at-

law duly authorised to bring and conduct the action, and

(b) a person having personal knowledge of the facts of the cause o f action;
and this fact must be averred in the affidavit.

(4) If the instrument, agreem ent or document is produced before court and
appears to be properly stamped (when required by law to be stamped) and not
open to suspicion by reason of any alteration or erasure or other m atter on the
face of it, and not barred by prescription, the court being satisfied of the contents
of the affidavit shall enter a decree nisi in the form set out in the first schedule
to the Act and have it served on the defendant for his appearance and showing
cause on a day as early as can conveniently be appointed having regard to the
distance of the defendant's residence from the court.

(5) The defendant shall not appear or show cause against the order nisi unless
he obtains leave from the court. Leave to appear and defend has to be granted
upon the defendant paying into court the sum mentioned in the decree or
furnishing reasonable and sufficient security for satisfying the decree. Leave may
be granted unconditionally where the court is satisfied that the defendant's affidavit
and other m aterial raise an issue or question which ought to be tried (section
6 (2) (c) of the Act). The purpose of section 6 is to prevent frivolous or untenable
defences and dilatory tactics.
CA Ramanayake v. Sampath Bank Limited and Others 147

(6) An issue or question which ought to be tried means a plausible defence

with a triable issue ; that is to say, an issue which cannot be sum m arily disposed
o f on the affidavits but requires investigation and trial.

(7) The court has to decide which o f the alternatives under section 6 (2) -
whether (a), (b) or (c) - has to be followed and the court has to exercise its
discretion judicially. The court must briefly exam ine the facts of the case, set
out the substance of the defence and disclose reasons in support of the order.

(8) In this case the 3rd and 4th defendants-petitioners had been given
unconditional leave. The 3rd defendant In his affidavit has not dealt specifically
with the plaintiffs claim and stated his defence and the facts relied on as required
by section 6(2) (c). He had denied the correctness of the loan account, but had
not specified in which particulars the loan account was incorrect, neither stating
the reasons for so alleging nor th e facts he was relying on to support his claim
that the loan account was incorrect. H e had not dealt with the plaintiffs claim
on its merits but merely set out objections of a technical nature. If a defendant
is granted leave unconditionally on this type of technicality and evasive denial,
then the purpose of this Act will be brought to naught.

(9) T he decree absolute entered against the 3rd defendant-petitioner for

non-appearance cannot be challenged on the merits in the trial court but could
have been set aside by curing the default by taking steps under section 389
of the Civil Procedure Code by summ ary procedure within a reasonable tim e.
This was not done and no excuse w as given for the default of appearance and
for the delay in filing the present application.

(10) Failure to aver in the affidavit that the amount due is "justly due" is not
a fatal defect if the affidavit shows that the amount is rightly and properly due.

Cases referred to :

1. Ram anathan v. Fernando 31 NLR 495.

2. Esquire (Garm ents) Industry Ltd. v. Sadhwani (Japan) Ltd. [1983] 2 Sri LR
243.
3. R ead v. Samsudin 1 NLR 292.
4. Soysa v. Soysa 17 NLR 118.
5. A w a Umma v. Casinaden 24 NLR 199.
6. M iriam Lawrence v. Am olda [1991] 1 Sri LR 232.
7. Divisional Forest O fficer v. Sirisena [1990] 1 Sri LR 44.
8. W ijesinghe v. Perera 2 CLW 506.
9. Anam alay v. Allien 2 NLR 251.
10. Paindathan v. N adar 37 NLR 101.
11. Jayalath v. Abdul R azak 56 NLR 145.
12. M arjan v. Rasiah 51 NLR 34.
13. M . Rajendra (Perm anent Secretary to the M inistry o f Transport and Works)
v. Parakram a Ltd. 63 NLR 554.
148 Sri Lanka Law Reports [1993] 1 SriLR .

APPLICATIO N in Revision from the O rder of the District Court of Colombo.

Romesh de Silva, P.C. with Harsha Am arasekera for 3rd defendant^Ktitioner.

S. A. Parathalingam for the plaintiff-respondent.

Cur. adv. vult.

January 21, 1993.

WIJEYARATNE, J.

The plaintiff-respondent (Sampath Bank Limited) filed this action under

the Debt Recovery (Special Provisions) Act, No. 2 of 1990 (hereinafter
referred to as the Act) against the 3rd defendant-petitioner and the
1st, 2nd and 4th defendants-respondents, seeking recovery of a sum
of Rs. 1,171,697.73 together with interest and costs.

The 1st and 2nd defendants-respondents are the borrowers of

the loan said to have been granted by the plaintiff-respondent on
30th June 1989 while the 3rd defendant-petitioner and the 4th
defendant-respondent are the guarantors of the said loan.

Under the Debt Recovery (Special Provisions) Act, No. 2 of 1990,

a lending institution (which has been defined to mean a licensed
commercial bank, the State Mortgage and Investment Bank, the
National Development Bank, the National Savings Bank, the Devel­
opment Finance Corporation of Ceylon, or a registered finance
company) may recover a debt due to it by an action instituted following
the procedure laid down in the Act. This procedure is not available
where the principal amount lent or advanced is below Rs. 1,50,000.

"Debt" has been defined as a sum o f money which is ascertained

or capable of being ascertained at the time of institution of the action
and which is in default and alleged by a lending institution to have
arisen from a transaction in the course of banking, lending, financing
or other allied business activity of that institution, but does not include
a promise or agreement which is not in writing.

The institution presenting the plaint has to file an affidavit to the

effect that the sum claimed is justly due from the defendant and has
in addition to produce to the court the instrument, agreement or
document sued upon or relied on by the institution. .
CA______ Ramanayake v. Sampath Bank Limited and Others (Wijeyaratne, J.) 149

The affidavit has to be made by any director or a principal officer

or by an Attorney-at-Law duly authorised to bring and conduct
the action and such affidavit shall be made by such person having
personal knowledge of the. facts of the cause of action and such
person shall swear or affirm to that effect in the affidavit.

If the instrument, agreement or document is produced to court

and it appears to be properly stamped (when required by law to be
stamped) and not open to suspicion by reason of any alteration or
erasure or other matter on the face of it, and not barred by pre­
scription, the court being satisfied of the contents of the affidavit shall
enter a decree nisi in the form set out in the First Schedule to the
Act and the decree nisi has to be served on the defendant.

The day to be inserted in the decree nisi as the day for the
defendant's appearance and showing cause, if any, against it shall
be as early a day as can conveniently be named, having regard to
the distance from the defendant's residence to the court.

The institution has to tender with the plaint-

fa) the affidavit and the instrument, agreement or document sued
upon ;
(b) the draft decree nisi ;
(c) the requisite stamps for the decree nisi and service thereof.

Under section 6 (1), the defendant shall not appear or show cause
against the decree nisi unless he obtains leave from the court.

Section 6 (2) provides that leave to appear and show cause

against the decree nisi may be given -

(a) upon the defendant paying into court the sum mentioned in the
decree nisi, or,

(b) upon the defendant furnishing reasonable and sufficient security

for satisfying the decree, or

(c) upon affidavits satisfactory to the court that there is an issue

or a question in dispute which ought to be tried. The affidavit
of the defendant has to deal specifically with the plaintiffs claim
and state clearly and concisely the defence and the facts relied
on as supporting it.
150 Sri Lanka Law Reports [1993) 1 SriLR .

Section 6 (3) provides that in default of the defendant obtaining

leave for appearance and showing cause, the court shall make the
decree n/si absolute and the provisions of section 389 of the Civil
Procedure Code (hereinafter referred to as the Code) shall, mutatis
mutandis, apply to such order. For this purpose the judge has to
endorse the words “decree nisi made absolute" (or words to the like
effect) upon the decree nisi and date and sign the endorsement.

Section 7 provides that if the defendant appears and leave to

appear and show cause is given, the provisions of sections 384 to
389 (inclusive) of the Civil Procedure Code shall, mutatis mutandis,
apply to the trial of the action.

Sections 13 to 15 enact special provisions relating to execution.

Sections 16 to 18 provide for the giving of security in the event

of appeals from orders or decrees made under the Act.

Section 21 provides that under certain circumstances the procedure

under the Act cannot be availed of where the amount claimed
as interest exceeds the principal sum and section 22 provides that
no sum of money which constitutes a penalty for default or delay
in payment of a debt can be recovered under the Act.

Section 24 lays down that nothing in the Debt Conciliation Ordinance

and the Money Lending Ordinance shall apply to, or in relation to,
a lending institution.

Section 25 creates new offences for drawing cheques without

funds and such like.

Section 27 provides that where a debtor dies before or after institution

of action, where grant of probate or letters of administration has not
been made, the court' may, in its discretion, after inquiry, appoint a
person to represent the estate of the deceased (which is similar to
the new section 398 of the Code introduced by the Amendment Act,
No. 6 of 1990).

The procedure under this Act is very similar to the summary

procedure on liquid claims provided in Chapter 53 (sections 703 to
711) of the Code.
CA Ramanayake v. Sampath Bank Limited and Others (Wijeyaratne, J.) 151

Section 704 (2) of the Code provides that the defendant shall
not be required, as a condition of his being allowed to appear and
defend, to pay into court the sum claimed or to give security therefor
unless the court thinks his defence not to be prima facie sustainable
or feels reasonable doubt as to its good faith.

Section 706 of the Code, inter alia, provides that "the court shall,
upon application by the defendant, give leave to appear and to defend
the action upon the defendant paying into court the sum mentioned
in the summons or upon affidavits satisfactory to the court, which
disclose a defence or such facts as would make it incumbent on the
holder to prove consideration or such other facts as the court may
deem sufficient to support the application", which may be contrasted
with the wording of section 6 (2) (c) of the Act.

In the case of Ramanathan v. Fernando 0), it was argued that

section 706 of the Code gives a court discretion whether to grant
leave or not even if the defendant brings the money to court. It was
held in this case that it is the right of every person against whom
an action is instituted to appear and, unless he admits the claim,
to file his answer. It was further held that on deposit of the sum
in court the defendant has an unqualified right to appear and defend
the action even though the court finds that no valid or sustainable
defence is disclosed on the affidavits. The court has no discretion
in the matter to refuse leave where the money is brought into court.
The reason for this decision is that at this stage the court does not
go into the merits of the case and it would offend one's sense of
justice if the defendant is deprived of an opportunity to contest the
case. The plaintiffs interests are safeguarded by the deposit of the
money in court for which purpose a date is granted and it is directed
that if the defendant fails to deposit the money, leave is refused and
judgment will be entered for the plaintiff.

There is a remarkable similarity in the opening lines of section

706 of the Code and those of section 6 (2) of the Act. Both these
sections begin with the words: "The court shall upon (the) application
by (of) the defendant give leave to appear and to defend
(show cause)...... "

As stated in Bindra's "Interpretation of Statutes" (7th Edn.

1984) at page 400 :
152 Sri Lanka Law Reports 11993} 1 Sri L.R.

"it is conducive to judicial discipline to interpret identical provisions

in two Acts which are in pari materia, in a similar manner."

Hence, following the decision in Ramanathan v. Fernando (supra),

I am of the view that a defendant is entitled as o f right under the
Act to appear and show cause against the decree nisi -

(a) by paying into court the sum under section 6 (2) (a), or
(b) by furnishing reasonable and sufficient security for same under
section 6 (2)(b), even though his affidavit does not disclose an
issue or question which ought to be tried.

Leave may be granted unconditionally under section 6 (2) (c) where

the court is satisfied that the defendant's affidavit raises an issue
or question which ought to be tried.

The court has to decide which of the alternatives under section

6 (2) - whether (a), (b) or (c) - is to be followed when granting
leave. The court has to exercise its discretion judicially in the matter.
The court must briefly examine the facts of the case before it, set
out the substance of the defence, and disclose reasons in support
of the order.

In the case of Esquire (Garments) Industry Ltd. v. Sadhwani

(Japan) Ltd.(2) it was held that sections 704 and 706 of the Code
were relevant to the question of granting leave to appear and defend
and the correct question was whether a triable issue arose in the
affidavits and documents before court.

Now what is a triable issue? The matter has come up for

consideration in India where Order 37 Rule 3 (old section 553) of
the Indian Civil Procedure Code is similar to section 706 of our Code
and the law has been set out as follows
"A triable issue can only mean that a defence is revealed or
disclosed in the affidavit of the defendant which cannot be
summarily disposed of on the affidavits and which requires a
further trial or investigation. It also means that if the trial
and further investigation resulted in the defendant's contention
being found to be correct the defendant would be entitled to
succeed. “ -1959 I.L.R. (Bombay) 496 at 499 quoted in Chitaley
and Rao's “Code of Civil Procedure", Vol. 3, 7th Edn. 1963, at
page 3951.
CA______Ramanayake v. Sampath Bank Limited and Others (Wijeyaratne, J.) 153

It is significant that this concept of a triable issue is found in

section 6 (2)(c) of the Act which states that the court shall, upon
the application of the defendant, give leave to appear and show cause
against the decree nisi inter alia, "upon affidavits satisfactory to the
court that there is an issue or a question in dispute which ought
to be tried.”

The principles applicable to the granting of leave to defend or to

show cause under the two procedures are somewhat similar. However
section 6 (2)(c) of the Act expressly provides for the affidavit of the
defendant to deal specifically with the plaintiffs claim and his defence
thereto and what facts are being relied on in support thereof. The
defendant has to deal with the plaintiffs claim on its merits ; it is
not competent for the defendant to merely set out technical objections.
It is also incumbent on the defendant to reveal his defence, if he
has any.

Then the important question arises as to what is meant by the

words "an issue or question which ought to be tried".

I am of the view that they mean nothing more than a plausible

defence with a triable issue ; that is to say an issue which cannot
be summarily disposed of on the affidavits, but requires investigation
and trial. For this purpose the defendant is bound under section
6 (2)(c) to deal specifically with the plaintiff's claim on its merits and
his defence thereto and what facts are relied on as supporting such
defence. Hence the court is in an advantageous position to examine
the defendant's affidavit and any other material to find out whether
a plausible defence with a triable issue is disclosed, in which event
leave may be granted unconditionally under section 6 (2)(c).

On the other hand, mere technical objections and evasive denials

will not suffice.

If no plausible defence with a triable issue is set up, the judge

can give the defendant leave to appear and show cause against the
decree nisi by placing him on terms either under section 6 (2)(a)
or section 6 (2)(b).

The purpose of section 6 of the Act (and also sections 704 and
706 of the Code) is to prevent frivolous or untenable defences being
set up and to avoid the lengthening of proceedings by dilatory tactics.
154 Sri Lanka Law Reports [1993] 1 S riL R .

This Act provides an expeditious method for the recovery of debts

due to lending institutions, in the larger interest of the economy.

Coming to the facts of this case, this action was filed on 11.7.91.
On that day, in the journal entry, the order of the learned Additional
District Judge is recorded as follows

1. The plaint and the relevant annexures are accepted.

2. (a) The documents relied on by the plaintiff are duly stamped
and not open to suspicion.
(b) The claim is not prescribed.
(c) The court is satisfied of the averments in the affidavit.
3. No penal sum has been included in the claim.
In terms of the prayer in the plaint a decree nisi is entered.
4. If the defendants have cause to show against this decree nisi,
they are given an opportunity to appear in court and to so
do on 91.09.30.
5. Enter decree nisi accordingly and issue the same on the
defendants for 91.09.30.

The learned Additional District Judge has signed the said journal
entry.

The journal entry of 30.9.91 shows that the decree nisi had been
served on all four defendants and that they had filed their respective
petitions and affidavits.

After this an inquiry was held and written submissions were

tendered to court.

Thereafter by his order dated 13.3.92 the learned Additional District

Judge made order rejecting the applications of the 1st and 2nd
defendants to show cause against the decree nisi and made it
absolute against them and had made an endorsement to that effect
thereon.

He had permitted the 3rd and 4th defendants to show cause

against the decree nisi and granted a date, namely 26.3.92, for the
filing of objections.
CA_____ Ramanayake v. Sampath Bank Limited and Others (Wijeyaratne, J.)_____ 155

In the course of the said order dated 13.3.92 the learned

Additional District Judge has said that in terms of paragraph 2 of
the document produced marked P1, it appears that no demand has
been made by the plaintiff from the guarantors. Accordingly it appears
prima facie that the 3rd and 4th defendants have sufficient
grounds to satisfy the court that they have a defence and they were
granted unconditional leave to show cause against the decree nisi.
Presumably the court was satisfied under section 6 (2)(c) of the Act.

On 26.3.92 the 3rd and 4th defendants were absent, nor were
they represented by Attorneys-at-Law ; they failed to file objections
or any answer.

Accordingly the learned Additional District Judge made order that

under section 7 of the Act sections 384 to 391 of the Civil Procedure
Code are made applicable and that the 3rd and 4th defendants have
failed to show any cause against the decree nisi entered against
them being made absolute. He therefore entered order absolute
against the 3rd and 4th defendants too.

More than 3 -1 /2 months later, by a motion dated 20.7.92, the

3rd defendant-petitioner has stated that the decree nisi has been
made absolute per incuriam, in that -

(a) there is no valid affidavit of the plaintiff ;

(b) the plaint does not disclose a valid cause of action.

Consequently the matter was fixed for inquiry. Written submissions

were tendered by parties and the learned Additional District Judge
made his order dated 19.11.92 rejecting this application of the 3rd
defendant-petitioner. In the course of his order the learned Additional
District Judge has stated that the 3rd defendant has failed to cure
his default of appearance on 26.3.92 and hence he has no legal status
to make this application. He compared the position of the 3rd
defendant to that of a defendant who was absent and a decree has
been entered against him in his absence under section 85 of the
Civil Procedure Code. Such a person has first to cure his default
under section 86 of the Civil Procedure Code. Without curing his
default he cannot now challenge any orders made in the course of
the proceedings.
156 Sri Lanka Law Reports [1993] 1 Sri LR.

The present application has been filed by the 3rd defendant-

petitioner on 9.12.92 in this court to revise and set aside the said
order dated 19.11.92 and to stay all proceedings in consequence of
the decree nisi being made absolute.

At the hearing of this application Mr. Romesh de Silva, P.C., for

the 3rd defendant-petitioner, submitted that the plaint does not
disclose a cause of action, because in paragraph 2 of the guarantee
bond (P7) it is stated that the guarantors "hereby agree to pay the
Bank in Colombo moneys herein mentioned ten days after demand
in writing is made on us". Nowhere in the plaint or afffidavit is it
averred that the money had been demanded from the 3rd defendant-
petitioner. He relied on the decisions in Read v. Samsudin (3), Soysa
v. Soysa<4), A w a Umma v. Casinaden(5), Miriam Lawrence v. Arnolda
(6), and Divisional Forest Officer v. Sirisena (7).

He also submitted that the learned Additional District Judge in

his order dated 13.3.92 had already come to the conclusion that
there was no cause of action set out in the plaint as there is no
averment that a demand was made. Therefore, acting on the basis
nunc pro tunc, the claim should be dismissed as against the 3rd
dpfendant-petitioner.

He also submitted that the affidavit was defective, in that-

(a) the jurat does not state whether the affidavit was sworn or
affirmed ;
(b) there was no averment that the amounts were justly due to the
plaintiff as required by section 4 (1) of the Act.

Mr. Romesh de Silva also submitted that the failure of the 3rd
defendant-petitioner to appear or to file objections on 26.3.92 only
results in the 3rd defendant-petitioner being precluded from relying
on any additional evidence contained in those objections and annexures
thereto. The court had to exercise its independent discretion on the
available material whether the plaintiff is entitled to maintain his claim
against the 3rd defendant-petitioner. He submitted that in view of the
fact that the court has already accepted the position that there was
no cause of action disclosed against the 3rd (and 4th) defendants,
the plaint should have been dismissed. Therefore he submitted that
acting in revision this court should set aside the order absolute dated
19.11.92.
CA _____ Ramanayake v. Sampath Bank Limited and Others (Wijeyaratne J.)______ 157

Mr. S. A. Parathalingam (for the plaintiff-respondent who had been

noticed as a stay order has been sought) submitted that the 3rd (and
4th) defendants were in default in failing to state or file objections
under section 384 on 26.3.92 and the court acted correctly in making
the order absolute.

He also submitted that the order absolute cannot now be set aside
on its merits, but it could have been set aside under section 389
of the Civil Procedure Code on the grounds stated therein (namely
accident, misfortune or non-service of order nisi). He also submitted
that the court cannot at this stage look into the question whether
the plaint disclosed a cause of action.

I have carefully considered these submissions.

In the affidavit filed it is specifically stated that the deponent is

a Buddhist. Presumably this affidavit would have been affirmed to
and not sworn though the jurat does not say so. In any event this
objection does not appear to have been taken up before the learned
Additional District Judge, and it is not open to the 3rd defendant to
urge it now.

In section 705 (1> of the Civil Procedure Code dealing with the
summary procedure on liquid claims, it is laid down that the plaintiff
must make affidavit that the sum which he claims is "justly due" to
him from the defendant, which is similar to the wording in section
4 (1) of the Act. The question has been considered whether the use
of the words "justly due" is imperative in an affidavit filed under section
705 (1).

On this point there have been conflicting decisions of the Supreme

Court in the cases of Wijesinghe v. Perera (B), and Anamalay v.
Allien (9).

However it was held finally by a bench of three judges of the

Supreme Court in the case of Paindathan v. Nadar (10) that it is not
essential that the plaintiff should use the word "justly" in the affidavit
if the facts set out therein show that the sum was rightly or properly
due. So too in this case the affidavit shows that the amount is rightly
and properly due, and hence this is only a technical objection which
should not be allowed to prevail. However, I would stress on the
158 Sri Lanka Law Reports [1993] 1 S riL R .

necessity of compliance with the wording of the section by the affidavit

stating that the sum claimed is "justly due".

It has also been held in the court below that the total liability
enforceable against the guarantors (i.e. the 3rd and 4th defendants)
shall not exceed Rupees One Million together with all interest thereon
computed from the date on which the demand in writing shall be
made by the Bank, and there is no averment that such a demand
was made in writing.

If the 3rd defendant-petitioner had filed his objections and the

matter was fixed for inquiry, it would have been open for the plaintiff
to meet this argument by showing specifically how the amount claimed,
namely, Rs. 1,171,697/73 was arrived at, whether it includes interest
and if so from what date, and also whether a demand in writing was
in fact made, though not pleaded in the plaint.

Mr. Romesh de Silva's main submission was that the learned

Additional District Judge by his order dated 13.3.92 has held that
the plaint does not disclose a cause of action against the 3rd and
4th defendants. For this purpose I have carefully perused the order.

In the course of the order the learned Additional District Judge

states that it appears that in terms of paragraph 2 of P7 (the bond)
no demand has been made from the guarantors. Accordingly the
affidavit discloses that, prima facie (belu belmata) the 3rd and 4th
defendants have grounds to set up a defence, as there is a question
of law arising out of this dispute. He has not stated that the plaint
does not disclose a cause of action. If he had so held, I have no
doubt that he would have dismissed the plaint immediately thereafter.

In any event it is well settled that even if the order of the learned
Additional District Judge was wrong, it is valid and binding upon
the parties until it is reversed by an appellate tribunal and cannot
be challenged in collateral proceedings. See the decisions of
the Supreme Court in Jayalath v. Abdul Razak (1,> and Marjan v.
Rasiah (12).

Section 7 of the Act says that if leave to appear and show

cause is given, the provisions of sections 384, 385, 386, 387, 388,
390 and 391 of the Civil Procedure Code are applicable. In the case
of M. Rajendra (Permanent Secretary to the Ministry of Transport and
Works) v. Parakrama Ltd. (,3) it was held that under section 384 the
CA Ram anayake v. Sampath Bank Limited and Others (Wijeyaratne, J.) 159

respondent could appear by a lawyer and obtain a date to file or

state his objections. This has not been done by the 3rd defendant-
petitioner and he is in default.

Thereafter the 3rd defendant-petitioner has taken no steps under

section 389 to have this order set aside on any of the grounds stated
therein. In these circumstances it is not open to him to raise objections
regarding the validity of the order dated 26.3.92 three and a half
months later by a motion dated 20th July 1992. To set aside the
order dated 26.3.92 he should have acted under section 389 of the
Civil Procedure Code by way of summary procedure to cure his
default, which he has failed to do.

Section 389 specifically provides that the application to set aside

a final order made in the case of a respondent's non-appearance
shall be by way of summary procedure and that too within a
reasonable time. Therefore a petition and affidavit along with other
exhibits, if any, should have been filed instead of a motion. The
procedure followed has been wroing and on that ground too the
motion should have been disallowed.

In his application he has not given any reason for his failure
to appear on 26.3.92 except to st^te in paragraph 8 of the petition
filed in this court that the petitioner was unaware of what steps had
to be taken due to some confusion that prevailed between the
petitioner and his lawyers. No acceptable excuse has been stated
for the default of appearance on 26.3.92 . The 3rd defendant-petitioner
also adduced no reason why he delayed more than 3-1/2 months
to make the present application.

For all these reasons the 3rd defendant-petitioner's application has

no merit and has to be dismissed.

Before concluding this case I wish to state that I have perused

the affidavit dated 30.9.91 filed by the 3rd defendant in this case.
In the affidavit he has admitted signing the guarantee bond but denied
the correctness of the particulars of the loan account (marked P9)
filed by the plaintiff Bank.

The 3rd defendant has gone on to state some objections which

are of a technical nature, namely,
160 Sri Lanka Law Reports [1993J 1 Sri L R .

(1) The plaint and affidavit do not conform to section 4 (1) of

the Act.
(2) No cause of action against him is disclosed.
(3) The plaintiff has not complied with paragraph 2 of the
guarantee bond (P7).
(4) The plaint does not disclose whether any demand either orally
or in writing was made against him.

The 3rd defendant in his affidavit has not dealt specifically with
the plaintiff's claim and stated his defence, apart from denying the
correctness of the loan account (P9). He has not specified in which
particulars the loan account is incorrect, nor the reasons for so
alleging. He has not stated on what facts he is relying to support
his claim that the l(^an account is incorrect.

He has not set out the grounds for stating that the plaint and
affidavit do not conform to section 4 (1) of the Act. One could only
infer that it was because the words "justly due" were not used in
the affidavit. However, as hereinbefore stated, this is not fatal defect.

He has not dealt with the plaintiffs claim on its merits, but merely
set out objections of a technical nature.

I am of the view that the affidavit does not disclose a plausible

defence and a triable issue and the 3rd defendant should have
been given leave to show cause against the decree nisi only on
terms either under section 6 (2) (a) or section 6 (2)(b) of the Act.
If a defendant is granted leave unconditionally to show cause against
the decree nisi on this type of technicality, then the purpose of this
Act will be brought to naught.

I affirm the order of the learned Additional District Judge dated

26.3.92 and 19.11.92.

The application is dismissed with costs payable by the 3rd defendant-

petitioner to the plaintiff-respondent.

WEERASEKERA, J. - I agree.

Application dismissed.