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67d7df18-072c-4ebf-8f6a-ed18b3153610
. Very clearly, the Petitioner has only benefitted from these oversights. 50
sc_fr_08_2019.txt
2c7a9c64-c5c6-4891-b97b-3359d1318188
. From the circumstances of the instant case, especially the continued willingness of the Respondent s to process the Petitioner’s pension, I am of the view that Petitioner has failed to establish any unreasonableness, mala fides or any such other wrong known to law on the part of the Respondents which affected him adversely
sc_fr_08_2019.txt
757c65e6-741f-4955-9071-a722905b0d7a
. As such, I am of the view that there is no violation of fundamental rights of the Petitioner guaranteed under Article 12(1) of the Constitution. The Municipal Council and the Department of Pensions shall take necessary steps under the Establishment Code and the Minutes on Pensions to dispense the Petitioner ’s pension. Application Dismissed. JUDGE OF THE SUPREME COURT A.L. SHIRAN GOONERATNE , J
sc_fr_08_2019.txt
a923a770-6bd0-4d19-a6a5-754a0e5bda63
. I agree. JUDGE OF THE SUPREME COURT SC (FR) Application 08/2019 JUDGMENT Page 20 of 20 K. PRIYANTHA FERNANDO , J. I agree. JUDGE OF THE SUPREME COURT
sc_fr_08_2019.txt
a3133ad7-a805-4c5c-aa26-9a41701ff471
ISC Appeat LTglZOtB] - pase 1 of 16 LANKA In the maffer of an appeal in terms of section 5(2) of the High Court of the provinces (Specia/ Provrsions) Act No. l0 of 1996, against an orderpronounced by the High Court exercrsing itsjurisdiction under section 2 of the said Act. SC Appeal No. 17912018 SC HC LA Application No. tLLltT Provincial (Commerclal) High Court Case No
sc_appeal_179_2018.txt
0f2de5b3-4ff1-4d51-99b4-26dfe8ffce80
. 31/2013(CO)In the maffer of an application for winding up by Court under and in terms of part XII of the Companies Act No:Z of 2002. Kurukula Arachchige Don Lenard priyanka Nanayakkara, No. 396/5, Koswatte Rd, Kalapaluwewa, Rajagiriya. PETITIONER G.K. Sudath Kumara, Chartered Accountant, 3'd Floor, yathama Building, Galle Road, Colombo 03. LIQUIDATOR AND THEN BETWEEN Dr
sc_appeal_179_2018.txt
c17f5790-fcef-4232-807e-b459983663d9
. Noel Pratheepan Somasundaram No.727ll, Birds park Residencies, Madinnagoda, Rajagiriya. PARTY NOTICEDISC Appeal 179l}Afi) - page 2 of ]6 G.K. Sudath Kumara, Chartered Accountant, 3'd Floor, Yathama Building, Galle Road, Colombo 03. LrqurpATOR - RESPON DENT AND NOW BEI'I4\IEEN Dr. Noel Pratheepan Somasundaram No.72111, Birds park Residencies, Madinnagoda, Rajagiriya. PARTY NOTICED - APPELLANT 1
sc_appeal_179_2018.txt
ca56017a-40aa-4ab9-b3a8-1156e6db83d3
. G.K. Sudath Kumara, Chartered Accountant, 3'd Floor, yathama Building, Galle Road, Colombo 03. LrqurpATOR - RESPONpENT _ RESPONDENT 2. Kurukula Arachchige Don Lenard priyanka Nanayakkara, No. 39615, KoswatLe Rd, Kalapaluwewa, Rajagiriya. PETITIONER - RESPONDENTVs. Vs.3
sc_appeal_179_2018.txt
90426704-c9fb-4982-8021-5568ebca31d7
. Maddumage Dona Chandani Amarathunga, Commissioner of Labour Department of Labour Narahenpita, Colombo-05 INTERVENIENT - PETITON ER . RESPONDENT - RESPONDENT 4. Mr. Don Raja Elmo Jayamaha \"The Next\", N-104, Niwasipura, Ekala PARTY NOTICED - RESPONDENT Before : P. Padman Surasena J Kumudini Wickremasinghe J A.L
sc_appeal_179_2018.txt
a034759c-7ef7-40c3-8ba1-25240e061975
. Shiran Gooneratne J Counsel : Romesh de Silva, PC with Riad Ameen, Susitha Nawaratne and Rushika Rodrigo instructed by Paul Ratnayake Associates for the Pafi-Noticed- Appellant. Nishkan Parathalingam with Mrs. Upeka Sooriya Patabendige instructed by Sumali costa for the Liquidator-Respondent-Respondent. Susantha Balapatabendi, PC, ASG with Ms
sc_appeal_179_2018.txt
2516353d-0fa1-49b6-bcbf-215b9fa26913
. Indumini Randeny, SC for the Interven ient- petitioner-Respondent-Respondent. Argued on : 31-01-2023 Decided on : 04.04.2024 P. Padman Surasena J The Petitioner-Respondent is a person who had made cerLain investments in 2006 in the Company by the name of Touchwood Investments (Private) Ltd. which had promised him[SC Appeal L79/20181 - page 4 of t6, returns in 20L2
sc_appeal_179_2018.txt
941a7aa9-7a81-4521-a91c-25be5b6779fd
. As Touchwood Investments (Private) Ltd. had informed him of its inability to make payments as promised, the Petitioner-Respondent on or around 24-07-2073 had filed a Petition seeking an order from CourL for the winding up of Touchwood Investments (private) Ltd. It is upon this Petition that the Commercial High Court had made an order dated 05-06- 2074 to wind-up the said Company
sc_appeal_179_2018.txt
786b77a6-9c76-4c5f-9980-8631b8e350fe
. It is in that process that the Court had appointed G.K. Sudath Kumara as the Liquidator. He has been named in this Appeal as the Liquidator- Respondent who will hereinafter sometimes be referred to as the Liquidator. The Liquidator had got to know that Touchwood Investments (Private) Ltd
sc_appeal_179_2018.txt
5f2b9fc7-948c-4e1a-bbc4-fb5ff14e71be
. (hereinafter sometimes referred to as the Company under liquidation) had caused the transfer of its various assets which are immovable properties to the Pafi-Noticed-Appellant. Thereafter, the Liquidator had filed the Motion dated 23-11-2015 in the Commercial High Court under Section 367 read with Section 370(1) of the Companies Act No. 07 of ZOO7. This Motion has been produced, marked Pl
sc_appeal_179_2018.txt
8a9b8dfd-60a5-4c84-8947-18136740b199
. According to this Motion, the Liquidator had informed Court that the Company under liquidation had transferred the five properties referred to in the said Motion under (a), (b), (c), (d), (e) to the Pafi-Noticed, namely Dr. Noel Pratheepan Somasundaram duringthe period specified in Section 373(2) of the CompaniesAct No. 07 of 2007
sc_appeal_179_2018.txt
89f1da0c-e8a2-4adb-9509-1b9a0fba6256
. Itwas in those circumstances that the Liquidator had complained to the Commercial High Court that the said transactions entered into by the company under liquidation are voidable in terms of Section 367 of the Companies Act as the said transactions had taken place at a time when the company under liquidation was unable to pay its debts as they fell due, and within the specified period and
sc_appeal_179_2018.txt
fc794a92-5cef-4b37-b1ee-696cc680a5ba
enabled another person to receive more than the person would otherwise have received or likely to have received in the liquidation proceedings
sc_appeal_179_2018.txt
c14356cc-40b5-477b-9c1f-15e71cd3ba01
. Upon the Motion Pl being filed, the Commercial High Court had issued notice on the party- Noticed' Thereafter the Party-Noticed-Appellan! having come to Court, had sought a dismissal of the relief sought by the Liquidator as per the Motion Pt, and the learned Judge of the Commercial High Court had then fixed the matter for inquiry
sc_appeal_179_2018.txt
adb9d79e-ef64-444f-ac63-045e289cb6a6
. At the commencement of the inquiry, the Pafi-Noticed-Appellant had contended that the burden to prove the matters stated in the Motion Pl must be on the Liquidator and therefore it is the Liquidator who shall commence the leading of evidence in order to prove the matters stated in his Motion pl
sc_appeal_179_2018.txt
8d21387d-19ca-499e-a0f1-3a75b165fe1c
. In contradistinction to the above position, the Liquidator had taken up the position before the Commercial High Court that it murst be the Party-Noticed-Appellant who has the burden of proof and therefore it is he who must satisfy Court that the transactions referred to by the Liquidator are not voidable under the law
sc_appeal_179_2018.txt
b1423997-548c-4889-9433-c7d38cb3812d
.ISC Appeal I79lZOlB] - page 5 of 16 Having considered the material adduced by both parLies, the learned Judge of the commercial High court, by his order dated o2-11-20L7, had held that the party-Noticed-Appellant mustcommence the inquiry. Being dissatisfied with the orderdated o2-Lr-2017 of the commercial High court, the party- Noticed-Appellant had preferred the instant appeal to this court
sc_appeal_179_2018.txt
dc6bce57-34a7-4ae4-b7ea-494ae9165d27
. when the Leave to AppealApplication relevant to the instant Appeal was supporLed, this courL having considered thesubmissions of the learned counsel for both parties, by its order dated 72-77-2orl, hadgranted Leave to Appear on the foilowing questions of raw: 1) whether the court ered in /aw and/or mrsdirected itse/f when it determined the issue of who should commence the inquiry, in respect of
sc_appeal_179_2018.txt
0e019fd1-e274-41d6-b1e6-8efa812b8449
the petitioner, by reference to documents annexed by, and matters p/eaded by, Mr
sc_appeal_179_2018.txt
faee2513-af03-47fd-ba2c-e4cf8f0a5fa4
. Don Raja Elmo Jayamaha. 2) Whether the court ered in /aw and/or misdirected itself in /aw when it failed to appreciate that it is the Liquidator who should commence an inquiry under section 370 of the companies Act No. 07 of 2007 in relation to an application by the Liquidator under Section 362
sc_appeal_179_2018.txt
1784736d-f19e-416d-ab22-84dee45edd98
. Since the Liquidator had filed the Motion Pl under Section 367 read with section 370(1), letme at the outset reproduce below the said sections of the companies Act No. 07 of 2007
sc_appeal_179_2018.txt
847e6791-23eb-48ae-b693-59284f410773
. 367' (1) A transaction by a company s voidab/e on the application of the /iquidator,if the transaction - (a) took p/ace- (r) at a time when the company was unable to pay its debts as they fe// due; and (ir) within the specified period; and (b) enabled another person to receive more towards satisfaction of a debt than theperson wou/d otherwise have received or be like/y to have received in the
sc_appeal_179_2018.txt
5aeb8d5c-02de-48fa-8d93-8f49cd13aa25
/iquidation
sc_appeal_179_2018.txt
685ece8d-e3ae-4a96-835a-ffbf49ae024a
. (2) unless the contrary is proved, for the purposes of subsection (1), a transaction that took p/ace within the restricted period is presumed to have been made at a time when the company was unable to pay its debts as they fe// due
sc_appeal_179_2018.txt
61aed7a6-c7c2-46c3-833b-fa7470aa9df8
.ISC Appeat 779/2}rc] _ page 6 of 16 (3) A transaction with a person sha/l not be set aside under this section, un/ess the company was influenced in entering into the transaction by a desire to produce in re/ation to that person, the effect mentioned in paragraph (b) of subsection (r)
sc_appeal_179_2018.txt
19b26cc5-0d89-46f9-8f3d-bd9e58bd914e
. (4) A company which has entered into a transaction with any connected person ispresuneQ unless the contrary is shown, to have been influenced by a desire toproduce in relation to that person, the effect mentioned in paragraph (b) of subsection (1)
sc_appeal_179_2018.txt
780bfc90-5450-431b-952c-c49ec5a05de2
. 37o' (1) A /iquidator who wrshes to set aside a transaction that is voidable under section 367 or section 369 or a charge that is voidab/e under section 368 sha//- (a) frle in the court a notice by way of a motion to that effect specity'ing the transaction or charge to be set aside and, in the case of a transaction, the property or ua/ue which the /iquidator wrshes to recover, and setting out
sc_appeal_179_2018.txt
874372f8-784d-4001-a469-5fed8ae0ea36
the effect of subsections (2), (3) and (4) of this section ; and (b) serue a copy of the notice as filed in court under paragraph (a), on the other party to the transaction or the grantee of the charge and or every other person from whom the /iquidator wishes to recover the property or ualue
sc_appeal_179_2018.txt
db77d7ed-d896-4297-9842-e20304dc491a
. 373 (2) For the purposes of sections 362 36s and 369 ,,specified period,, means- (a) in the case of a transaction entered into with or a charge granted to a connectedperson- (r) the period of two years before the commencement of the winding up; and (ir) in the case of a company that is being wound up by the coufi the period of two years before the frling of the petition in the court, together
sc_appeal_179_2018.txt
0de5d92c-59da-472e-b452-c1f9dc3bb849
with the period commencing on the date of the fi/ing of that petition and ending on the date on which the order of the court was made
sc_appeal_179_2018.txt
d2e5af8f-de16-472a-97c7-72237266e708
. in any other case- (r) the period of ane year before the commencement of the winding up; and[SC Appeal 779PAB] - page 7 of t6 (ii) in the case of a company that is being wound up by the court, the period of one year before the fr/ing of the petition in the court, together with the period commencing on the date of the frling of that petition and ending on the date on which the order of the court
sc_appeal_179_2018.txt
f49c0f83-a1ab-4f77-ba99-076c31865a59
was made
sc_appeal_179_2018.txt
da6c91ff-dd25-4623-a32f-4b27b018ae0e
. Let me next briefly set out the five impugned transactions mentioned in the Motion produced, marked P1 by the Liquidator. They are as follows: a) By Deed No: 974 affested by Mr. V.G
sc_appeal_179_2018.txt
7c55d303-5b51-4b86-a6a6-d361af1fbed6
. Karunasena Notary public of Colombo the /and known Touchwood Kent Estate ii situated at Ambokka and Maningomuwa in Udasiya Pattuwa in the Grama Sewake division No E422D within the Galhitiyagama Divisional Secretariat in the extent of srx acres [A6J was sold by the Company being wound up by Court on the 1? March 2014, for a consideration of Rupees Seven Hundred and Twenty Thousand (Rs
sc_appeal_179_2018.txt
3fcba3b5-54cb-457a-88ba-1fa1518c0db1
. 724000/) to Noe/ Pratheepan Somasundraram bearer of National ldentity Card No. 681910174V of No. 721/51, Birds park Residencies, Madinnagoda, Rajagiriya. b) By Deed No' 975 attested by Mr. V.G
sc_appeal_179_2018.txt
a1d929e5-144e-410f-bbd8-f5460a536954
. Karunasena Notary public of Colombo the land known as Touchwood Kent Estate ii situated atAmbokka and Maningomuwa in (Jdasiya Paffuwa in the Grama Sewaka division No E422D within the Galhitiyagama Divisional Secretariat in the extent of Twenty Acres one Rood and Four point Forty Two perches [A20 Rl P4'42J was so/d by the Company being wound up by Court in ljh March 2014, for a consideration of
sc_appeal_179_2018.txt
3c3c884c-f24a-4ae0-a5fc-1a6570f66555
Rupees Two Million Four Hundred and Forty Thousand (Rs
sc_appeal_179_2018.txt
bb3512da-eb91-410e-a47a-1c211bcaae95
. 2,440,000/-) to Noe/ Pratheepan Somasundraram bearer of Nationa/ Identity Card No' 681910174V of No. 721/51, Birds Park Residencies Madinnagoda, Rajagiriya. c) By Deed No. 976 affested by Mr. V.G
sc_appeal_179_2018.txt
2cb635f6-da68-49a6-904a-560ce04f0e02
. Karunasena Notary pub/ic of Co/ombo the /and known as Touchwood Kent Estate ii situated atAmbokka and Maningomuwa in udasiya Pattuwa in the Grama Sewaka division No E422D within the Galhitiyagama Divisional Secretariat in the extent of One Acre [AlJ was sold by the Company being wound up by Court on 13h March 2014, for consideration of Rupees one Hundred and Twenty Thousand (Rs
sc_appeal_179_2018.txt
46847cba-bcb3-4651-a742-25f64cbad986
. 12Q000/-) to Noel Pratheepan Somasundraram bearer of National Identity Card No. 681910174V of No. 721/51, Birds Park Residencies Madinnagoda, Rajagiriya.[SC Appeal 179120781 - page B of 16 d) By the Deed No. 977 by Mr. V.G. Karunasena Notary Public of Colombo the land known as Dodangaspitiyehena situated at Bopitiya in Wiya/uwa Korale in the Grama Sewaka division No
sc_appeal_179_2018.txt
047441fc-5fcb-404f-a0e4-6ae80c4c364d
. 30 within the Kandeketiya Divisional Secretariat in the ertent of Six Acres [A6J was so/d by the Company being wound up by Court on l7h March 2014, for a consideration of Rupees Seven Hundred and Twenty Thousand (Rs. ZZq000/) to Noe/ Pratheepan Somasundraram bearer of Nationa/ Identity Card No. 6Blgl7t44V of No. 721/51, Birds Park Residencies Madinnagoda, Rajagiriya. e) By the Deed No. 978 by Mr
sc_appeal_179_2018.txt
aefe3c74-ab46-4bf1-ac85-4e65f0cb19d7
. V.G. Karunasena Notary Public of Colombo the land known as Dodangaspitiyehena situated at Bopitiya in Wyaluwa Korale in the Grama Sewaka division No. 30 within the Kandeketiya Divisional Secretariat in the extent of Twenty Six Acres One Rood and Thirty Two point Seventy Eight [426 Rl PJ2
sc_appeal_179_2018.txt
3be839de-8d3e-4246-8864-ee8474819da2
.ZSJ was so/d by the Company being wound up by Court on 13h March 2014, for a consideration of Rupees One Mi/lion Eight Hundred and Fifty Four Thousand (Rs. 1,554,000/) to Noe/ Pratheepan Somasundraram bearer of National ldentity Card No. 6B1910lZ4V of No. 721/51, Birds Park Residencies Madinnagoda, Rajagiriya
sc_appeal_179_2018.txt
62be8858-079f-4a89-a620-56929fb68023
. For the five reasons I shall henceforLh set out below, I am of the view that it must be the Party-Noticed-Appellant who must commence the inquiry. The first reason is the existence of a presumption in terms of Section 367(2) of the Companies Act
sc_appeal_179_2018.txt
1a35c57a-6424-4511-b84f-5f2194156c61
. At the same time, one must not forget the legal burden set out in Section 101 of the Evidence Ordinance which states thus: \"Whoever desires any court to give judgment as to any lega/ right or liability dependent on the existence of facts which he asserts must prove that those facts exist
sc_appeal_179_2018.txt
594738a8-dd4b-40de-a719-69167434811e
. As it is the Liquidator who had made the initial application under Section 367 read with Section 370(1) of the Companies Act, in terms of Section i01 of the Evidence ordinance, the legal burden is on the Liquidator to establish the fact he asserts
sc_appeal_179_2018.txt
5119d79a-05f6-44bf-b1b6-35959b609d81
. Although the legal burden according to Section 101 of the Evidence Ordinance is on the Liquidator to establish the fact he asserts, I must also take into account that according to Section 367(2) of the Companies Act, unless the contrary is proved, a transaction that took place within the restricted period is presumed to have been made at a time when the company was unable to pay its debts as
sc_appeal_179_2018.txt
f60aaf13-98c0-4aec-a7bc-e4c683d228e8
they fell due fforthe purposes of subsection (1)]
sc_appeal_179_2018.txt
90060d10-d971-4088-897b-aedff692dbea
.ISC Appeal t79l20t9] - page 9 of 16 Thus, all what the Liquidator needs to establish at the outset to discharge its legal burden, is the fact that the questionable transactions had taken place within the restricted period referred to in Section 373(2) of the Companies Act
sc_appeal_179_2018.txt
00ef11cb-cb5c-493f-b61f-3854309bea3f
. Once that fact is established by the Liquidator, then the relevant questionable transactions which had taken place within the restricted period are presumed to have been made at a time when the company was unable to pay its debts as they fell due. This presumption is drawn unless the contrary is proved. The next question is as to who must prove the contrary
sc_appeal_179_2018.txt
4eb6194b-3323-4d7e-9210-e64ffcc9d345
. The next set of reasons would show that it must be the Party-Noticed-Appellant who must then prove the contrary. The second reason is that it would be the Pafi-Noticed-Appellant who would fail if no evidence at all were given and hence it must be the Party-Noticed-Appellant who must commence the inquiry
sc_appeal_179_2018.txt
4ad47dee-1322-4d12-a25e-a48df02542a1
. According to Section 370(3), after the Liquidator had filed the motion with notice to the parLy, notice under section 370(1) of the Act, the party-Noticed will have 20 working days to make an application under Section 370(3) of the Act. Section 370(3) also provides that if no such application is made, then the questionable transaction will automatically stand set aside
sc_appeal_179_2018.txt
bed4149f-3f00-4aa0-8086-4a4255feba80
. One could draw support for this proposition from Section 102 of the Evidence Ordinance which states thus: \"the burden of proof in a suit or proceeding lies on that person who wou/d fail if no evidence at all were given on either side,, E' R' S. R' Coomaraswamy states on Section t02 of the Evidence ordinance, as follows: \"This section deals with the incidence of the burden
sc_appeal_179_2018.txt
21e78774-ade2-4189-9556-f14cafd6b734
. It places the burden of proof on the party who desires the court to intervene and to determine the rights of the partres in a manner different from the position that wou/d arise if matters were left in status quo. It regulates the incidence of the overa/l burden\"
sc_appeal_179_2018.txt
d2bc1a71-009f-4e28-a0af-7159f3f8566b
.1 Section 370(3) has provided that the questionable transaction will automatically stand set aside in the absence of any such application. Not providing any evidence; not pursuing the application made under Section 370(3) of the Act; are all as good as not making any such application. Therefore Section 102 of the Evidence Ordinance will apply to the case at hand
sc_appeal_179_2018.txt
4f1bf4fb-e18f-4bc6-b0e2-5ca47ba4645a
. The third reason is because the essential facts necessary for the determination by Court under the circumstances at hand are especially within the knowledge of the pafi-Noticed-Appellant. 1 E' R' S' R. Coomaraswamy; The Law of Evidence; Stamford Lake 2013; at page 255 of Volume II(Book I)
sc_appeal_179_2018.txt
fc0ae434-2f74-4403-b146-386b225e3901
.fSC Appeal 779120781 - pase 10 of 16 Looking at the above several transactions which are said to have taken place during the relevant time, it is clear that the questionable transfers of immovable property have been effected by way of notarially executed deeds of transfer the beneficiary of which is Dr
sc_appeal_179_2018.txt
0db635a8-6b7f-475e-9008-0a1ff990209c
. Noel Somasundaram who stands as the Party-Noticed-Appellant in this case, In all six transfers, the beneficiary is the Party-Noticed-Appellant. The consideration mentioned in all those Deeds of Transfer have been paid by the Party-Noticed-Appellant
sc_appeal_179_2018.txt
d8adb1a6-8163-4bc5-9b2b-f6c6e3474588
. Therefore, it is clear that it is the Pafi-Noticed-Appellant who knows best, the real nature and the circumstances under which he had purchased these properties from the company under liquidation
sc_appeal_179_2018.txt
b3aa448e-a03c-4106-b5be-3e275aeb4b10
. The above position is furLher buttressed by Section 106 of the Evidence ordinance which states \"when any fact is especia//y within the know/edge of any person, the burden of proving that fact is upon him.\"The provision in section 106 of the Evidence Ordinance is further explained by its two illustrations which are reproduced below: Il/ustration (a
sc_appeal_179_2018.txt
f32ecf3e-1e18-4199-96d5-ae9956f99471
.t: when a person does an act with some intention other than that which the character and circumstances of the act suggest, the burden of proving that intention is upon him. Illustration (b-): A is charged with travelling on a railway without a ticket. The burden of proving that he had a ticket is on him
sc_appeal_179_2018.txt
7ad38399-92fa-43eb-8750-7230f7c8bd50
. Thus, one must note that the term 'burden of proof'could operate in two forms: firstly, as a general burden of proof which would not generally shift; secondly, as a particular burden which may shift during the proceedings in Court
sc_appeal_179_2018.txt
7cf9f14d-e0a5-426f-a2af-641ae1a1123a
. The fourth reason is that it would be the Par[y-Noticed-Appellant who would wish the court to believe that the five transactions relevant to the inquiry at hand are not questionable transactions falling under Section 367 of the Companies Act and therefore the proof thereof shall lie on the Party-Noticed-Appellant
sc_appeal_179_2018.txt
be17a2e8-0779-470b-8e27-c040754133dc
. In this regard, the provision in Section 103 of the Evidence ordinance would be relevant. It states that the burden of proof as to any particular fact lies on that person who wishes the court to believe in its existence unless it is provided by any law the proof shall lie on any particular person
sc_appeal_179_2018.txt
e41e3249-9ab4-4231-95f4-f244d7fbb198
. It is true that it is the Liquidator who had made the initial application under Section 367 read with Section 370(1) of the Companies Act. As has been stated in Section 103 of the Evidence ordinance, the relevant law in this case is the companies Act No. 07 of 2oo7 which does not provide that the proof of this fact shall lie on any particular person
sc_appeal_179_2018.txt
1fc99765-1c7e-4af0-b65b-0e23f182de10
. Therefore, according to[Sl Appeal 179/2}fi] - Page 11 of i6 Section 103 of the Evidence Qrdinance, the burden of proof of such fact m ust lle on the person who wishes cor;ft to believe in its existence\" It is the Party:Noticed-Appellant who wishes the court to believe lhat the conrplained transactions are of such a nature that they would not fali under Section 370 and Section 357 of the
sc_appeal_179_2018.txt
b620d072-40df-4836-bf9d-ee122f6e2951
Cornpanies Act
sc_appeal_179_2018.txt
300d6124-d20c-4eb4-ad3d-6662fde89376
. If the Party-Noticed-Appellant did not make this application on this basis, the Liquidator wouid not be called upon to establish that the conrplained transactions would fail under the relevant sections. This is ecause the law had provided for autornatic setting aside of the complained transactions in the absence f any such application from the noticed party
sc_appeal_179_2018.txt
356b97b2-9324-46b3-bf71-1202512eeebf
. On the other hand, if an appiication is rnade under Section 370(2) of the Act, then the questlonable transaction can only be set aside after hearing and deterrnining that application (the application here rneans the application made under Section 370{3) of the Act)
sc_appeal_179_2018.txt
69f702d9-0754-4d57-bea0-4d02a8dfbcff
. Therefore, despite the fact that the lnitial application under Section 370{2) of the Act is made to court by the Liquidator, for further proceedings upon the application nrade by the Party-Noticed- Appellant under Section 370(3) of the Act would switch the said further proceedings from \"automatic setting aside procedureo'to one in which the Court would make a determination of the application
sc_appeal_179_2018.txt
ae7bc397-f3c8-4275-aa83-ffe390c12702
made by the Pafi-Noticed-Appellant r,rnder S*ction 370{3) of the Act
sc_appeal_179_2018.txt
1e975b81-8216-41df-85ca-e26d2ebeccc5
. This is because it is the Party-Noticed- Appellant who seeks an order from Court that the questionable tnansactions should not be set aside
sc_appeal_179_2018.txt
ac0b0cc8-9797-4ead-93ab-633621d16742
. Thus, the Court proceedings from that polnt onwards would be to deterrnine the appiication made by the par1ry-Noticed-Appellant, The Farty=Noticed-Appellant had primarily relied on the following paragraph taken fron'r cempany Law by Kanaganayagam Kanag-isvaran and Dilshani wijayawardana2, \"it is inrpo*ant to note that section 370 does not operate to shift the onus of proof for establishing that
sc_appeal_179_2018.txt
f04685c6-e745-4ccc-964c-91476dfc5f09
a transaction comes within section 357 or 369 or that a charge comes within sectlon 368
sc_appeal_179_2018.txt
74355e47-203c-4c8a-acd8-9d2fdb49a43c
. The onus remains with the liquidator. The secticn is oniy a convenient way of disposing of the need for court proceedinEs where there is no contest. However, if the posltion is contesled liquidator still bears the onr\":s of proof.\" The learned authors of the above work, in con:ing to this conclusion had relied on three cases referred to in its footnotes 29 and 30
sc_appeal_179_2018.txt
92366b19-0d7e-4b4b-88c3-39ac74217450
. These cases appear to have been decided on the provisions in New Zealand's Companies Act of 1955 and 1993. Flowever, in vlew of the clear provisions in our Evidence Ordinance coupled with the fact that the Corr'lpanies Act No 07 of '{2014} ar page 590
sc_appeal_179_2018.txt
f7082fbe-cd04-477c-89b8-01c2b4a07412
.ISC Appeal L79l2ALt{ - page 12 of i6 2007 had not speeified thrat the Broof of this fact shall lie an any particslar pers,on, our courts are bound to stick to the law of Evidence in our law. On the other hand, to rny rnind, what the authors of the above work may haye intended ls not what the learned e-ounsel who appeared for the Party-Floticed-Appellant subnnits as a{
sc_appeal_179_2018.txt
f9ee323c-52d2-493d-b054-b42f3850b144
.} argument before us' While tr ann unable to eonirnent as to the intention behind the absve statement nrade by the writers of the absve book, it may well be an assentisn of the position that the legal burderr rernaiRs sn the Liquidator to establish the faet he assergs in teryns of Seet[on 101 of the Evidence Ordinanee, as it is the Liquidater who had made the ic
sc_appeal_179_2018.txt
befb5d0d-65e0-4e3b-90c5-b937e002e123
?itial applieatior: under Section 367 read with Section 370{1} of the Companies Aet
sc_appeal_179_2018.txt
a8b6315c-0916-4326-a00e-187d28ffa23f
. However, In rny view, it must not be understsod that the said authors have negated the effect of ff
sc_appeal_179_2018.txt
6c16eee7-2dc3-4126-ac93-aab7237e9597
.le existence of the presurnption in ten'ns sf Section 367{2) of the Companies Affi by vlrtue of which presunrpfioR, the evidentiary burden should stand shifted to_she party-fitotieed- ApBellant to establlsh the position taken up by him that these questionahle transacriens ds not fall uRder Sectiom 370 and Seetion 367 of the Companies Act. This is exactly what tr have adverted to above
sc_appeal_179_2018.txt
6d26a080-5056-4a3b-af89-b2fca6f74b18
. Thus, I am unable to aceept the absve argumeRt advaneed by the learned CsLInse[ who appeared far the Party-Noticed:ABpeX lant. For the foregoing reasons, I answer the questions of law in respect of which this fourt has granted Leave tc Appea!, in the negative
sc_appeal_179_2018.txt
e4ff861d-ddda-4a9c-b04a-e698646c94ac
. I proceed to affirrn the order dated AZ-Lt-Z*t7 pronouneed by the Cornn\"lercial High Court whieh had held that the Fariy-hloticed-Appellan.t musf eornrnence the inquirry as the burden of proving that the complained transactions are sf such a nature that they r,vould nst fall under Seetion 370 and Section 362 of the Ccmpanles Act is upon the PartT-Ncticed-Appellant
sc_appeal_179_2018.txt
2e5cc0b4-4c5d-4151-8734-e52f52b124df
. Thls Appeal is therefore dismissed with cCIsts. JUDGE OF THE SUPR,EME COURT[SC Appeal 179120L8] - Page 13 of 16 A. L
sc_appeal_179_2018.txt
b77f87d6-a4f7-4c17-aeb0-aba7944d7712
. SHIRAN GOONERATNE, J The Party-Noticed-Appellant is before this court aggrieved by the impugned order dated 02/ltl20t5 where the Commercial High Court of the Western Province holden in Colombo, held that in an application made under section 370 (2) of the Companies Act, the burden was on the Pafi-Noticed-Appellant to prove his case and accordingly to commence the case
sc_appeal_179_2018.txt
f25a6128-c02c-43b6-85c1-5a0c692041ba
. I have had the privilege of reading the judgment of my brother Hon. Justice P. Padman Surasena in draft and to consider the views expressed therein,land I disagree that for the reasons to be set out hereinafter, the appeal should be allowed. To avoid any repetition, I will refrain from a detailed discussion of the facts relevant to the original application
sc_appeal_179_2018.txt
fb09094f-3510-4014-8021-1690ff9b8aa4
. The Liquidator had filed a notice by way of a motion under section 370(1). The Party-Noticed- Appellant had applied to Court under section 370(2) within the specified time period
sc_appeal_179_2018.txt
e7ad1451-6d8f-4c33-a612-c8056e4edfe4
. Had the Pafi-Noticed-Appellant not applied to Court under section 370(2) or not applied to Coutt within the specified time period, then section 370(3) would have applied and the presumption in favor of the Liquidator under section 370(3) would have come into operation in having the transaction deemed to be set aside. That is, however, not the case here
sc_appeal_179_2018.txt
691fbba5-cc88-49ac-9c36-66752e668caf
. The fact that the Pafi-Noticed-Appellant had applied to Cout within the specified time period under section 37Ae) indicates their intention to argue that the transaction is not void. The Liquidator is relying on section 367 to have the transactions relating to the transfers of lands (described in the Commercial High Court Order) set aside as void
sc_appeal_179_2018.txt
b99a95ed-d665-4a71-8327-8b5c766f57e5
. The presumptions applicable to sections 367 land 369, although not applicable in this instancel apply only in respect to the time period at which the transactions in question took place
sc_appeal_179_2018.txt
8fd2ed8e-eb59-4e35-a70c-1a1641d32404
. That is, in respect to section 367, section 367(2) states \" lJnless the contrary is proved, for the purposes of subsection (1), a transaction that took place within the restricted period is presumed to have been made at a time when the company was unable to pay its debts as they fell dLte
sc_appeal_179_2018.txt
0b9d933b-d506-47e9-8334-375b40236fb0
.\", [and in respect to section 369, section 369(4) states \"(Jnless the contrary is proved for the purposes of subsection (1), a transaction that took place within the restricted period is presumed to have been made at a time when the company was unable to pay its debits as they fe// due.'1
sc_appeal_179_2018.txt
44f34315-9a51-46e7-a187-887a483d5988
. It is important to note that although the Liquidator can rely on the presumptions described above, sections 367 [and 369] require the Liquidator to prove additional matters to succeed in establishing a claim to have the transactions declared voidable under these sections
sc_appeal_179_2018.txt
6ad63f42-5e37-402b-9fb5-2ce389c58e98
.fSC Appeal tTglZOtB) _ page t4 of t6 That is' with respect to section 367, section 367(1)(b) requires the Liquidator to establish thatthe transactions in question \"entit/ed anotherperson to receive more towards satisfaction ofa debt that the person wou/d otherwse have received or be /ike/y to have received in the/iquidation'\", section 367(3) requires the Liquidator to establish that,,.......
sc_appeal_179_2018.txt
a2e1ca68-76a4-44a3-a6ed-c39e4358bf50
. unless the companywas inf/uenced in entering into the transaction by a desire to produce in re/ation to thatperson/ the effect mentioned in paragraph (b) of subsection (l),i fsimilarly' with respect to section 369, section 369(b) requires the Liquidator to establish that \" the transaction was an uncommercial transactior'l\" section 36g(c) requires the Liquidator toestablish that\" when the
sc_appeal_179_2018.txt
6453663c-f00c-4adc-975c-2ab0d8f76a02
transaction took place, the company - (i) was unable to pay its duedebts; (ii) was engaged in or about to engage in business for which its financial resourceswere grossly inadequate; or (iir) incurred an obligation knowrng that the company wou/d notbe able to perform the ob/igation when required to do so, J In the New Zealand case of Mike Hastie Handcraft wools Limited (in voluntary
sc_appeal_179_2018.txt