4. The following new sections are hereby inserted immediately after section 29, of the principal enactment and shall have effect as sections 29A, 29B, 29c, 29D, 29E, 29F, 29G, 29H, 29J, 29K, 29L, 29M, 29N, 29P, 29Q, 29R, 29S, and 29T, of that enactment :
| 29A. Whenever default is made in the payment of any sum due on any loan, whether on account of principal or of interest or of both, default shall be deemed to have been made in respect of the whole of the unpaid portion of the loan and the interest due thereon up to date; and the Board may, in its discretion, take action as specified either in section 29B or in section 29D : |
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| 29B.
| | (1) Subject to the provisions of section 29E the Board may by resolution to be recorded in writing authorize , any person specified in the resolution to enter upon any immovable property mortgaged to the Bank as security for any loan in respect of which default has been made or where the terms of any loan agreements are contravened in respect of such property to take possession of and to manage and maintain such property, and to exercise the same powers in the control and management of such property as might have been exercised by the mortgager if he had not made default, or contravened the terms of such agreement. | | |
| | (2) Whenever any sum of money due on any loan granted for any agricultural or Industrial undertaking on the security of any plant, machinery or other movable property to the Bank is in default, or where the terms of any loan agreements are contravened in respect of such property, the Board may authorize any person specified in writing to enter and take possession of such agricultural or industrial undertaking in which such plant, machinery or other movable property is situate, and exercise the same power in the control and management of such undertaking as might have been exercised if such immovable property had been pledged or mortgaged. | | |
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| 29C.
| | (1) Any person authorized by resolution of the Board under section 29B in respect of any property shall be entitled generally to take action in terms of the resolution and in particular
| | | (a) to sell the produce of such property; |
| (b) to sell the goods manufactured wholly or partly from any plant or machinery, on the security of which any loan was granted, if default has been made in respect of such loan ; |
| (c) to receive the rents, profits or other income from such property; |
| (d) to pay the expenses incurred in the control and management of such property; out of the income from such property; |
| (e) to appropriate to himself out of such income such sum (if any) as the Board may deem fit to fix as remuneration for his services; |
| (f) to remain in possession of such property until all moneys due to the bank under the mortgage on such property have been fully paid or until he is directed by the Board to yield possession of such property under subsection (2). |
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| | (2) Every person authorized by resolution of the Board under section 29B in respect of any property shall
| | | (a) pay monthly, out of the income of such property such sum (if any) as the Board may in its discretion fix, to the mortgager for his maintenance; |
| (b) pay quarterly or as otherwise directed by the Board to such person or persons and in such manner as the Board may direct the balance of the income from such property remaining after the payments herein before authorized have been made; |
| (c) keep and render to the Board at such intervals as the Board may determine, clear and accurate records of all sums received or paid out by him in respect of such property; |
| (d) yield possession of such property to the mortgagor or some other person as directed by the Board and pay to the Board any balance of the income from such property remaining in his hands after the payments herein before authorized have been made, |
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| | (3) The Board shall when all sums due to the Bank under the mortgage have been fully paid surrender possession of the mortgaged property to the mortgager and return to him. any balance remaining of the income from such property. | | |
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| 29D. Subject to the provisions of section 29E, the Board may by resolution to be recorded in writing authorize any person specified in the resolution to sell by public auction any immovable or movable property mortgaged to the Bank as security for any loan in respect of which default has been made in order to recover the whole of the unpaid portion of such loan, and the interest due thereon up to the date of the sale" together with the moneys and costs recoverable under section 29L and thereafter it shall not be competent for the borrower or any person claiming through or under any disposition whatsoever of the right, title or interest of the borrower to and in the property made or registered subsequent to the date of the mortgage to the Bank, in any court to move to invalidate the said resolution for any cause whatsoever, and no court shall entertain any such application. |
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| 29E.
| | (1) Save as otherwise provided in subsection (2), the provisions of section 29B and 29D shall apply in the case of any default notwithstanding that the borrower may have died or that any right, title or interest whatsoever in the property mortgaged to the Bank as security for the loan may have passed by the voluntary conveyance or operation of law to any other person. | | |
| | (2) Where a borrower is dead and probate of his will or letters of administration to his estate have not been issued to any person, the District Court of Colombo or the District Court of the district in which the property, mortgaged to the Bank by the borrower, is situate, may, upon application made in that behalf by the Board and after service of notice of the application on such persons, if any, as the court may order, and if satisfied that the grant of probate or the issue of letters of administration is likely to be unduly delayed, appoint a person to represent the estate of the borrower for the purposes of this section; and the provisions of sections 29B and 29D shall not apply in the case of any default made by such borrower unless and until a person is appointed under this subsection to represent the estate of such borrower. | | |
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| 29F. Notice of every resolution under section 29D authorizing the sale of any property shall be published in the Gazette and in a daily newspaper, and copies of such notice shall be dispatched to the borrower, if he is alive, and to every person who has, in respect of that property, registered his address as required by law and, if that property consists of the interest of a lessee under a lease from the State, to the Land Commissioner. |
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| 29G. Notice of the date, time and place of every sale shall, not less than fourteen days before the date fixed for the sale be published in the Gazette and copies of such notice shall be-
| | (a) dispatched to the borrower, if he is alive, and to every person to whom notice of any resolution is required to be dispatched under section 29F ; | | |
| | (b) posted on or near the property which is to be sold. | | |
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| 29H.
| | (1) If the amount of the whole of the unpaid portion of the loan, together with interest including any penal or other interest payable, (under the proviso to subsection (2) of section 29 due thereon) and of the moneys and costs if any, recoverable by the Board under section 29L is tendered to the ..board at any time before the date fixed for the sale, the property shall not be sold, and no further steps shall be taken in pursuance of the resolution under section 29D for the sale of that property. | | |
| | (2) If the amount of the instalment or equated payment or other payment n respect of which default has been made. together with any penal or other interest payable, (under the proviso to subsection (2) of section 29 due thereon) and of the moneys and costs, if any recoverable by the board under section 29L is tendered to the Board at any time before the date fixed for the sale, the Bank may in its discretion direct that the property shall not be sold and that no further steps shall be taken in pursuance of the resolution under section 29D for the sale of that property. | | |
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| 29J. The Board may fix an upset price below which the property shall not be sold to any person other than the Bank. |
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| 29K.
| | (1) In any case where two or more loans have been granted by the Bank on the security of the same property and default is made in the payment of any sum due upon anyone or more of such loans, the foregoing provisions of this Act shall apply notwithstanding that default may not have been made in respect of the other loan or any of the other loans, and the Board may, in any such case, by resolution under section 29D authorize the sale of the property for the recovery of the total amount due to the bank in respect of both or all of the loans, as the case may be, and the provisions of this Part . of this Act shall apply accordingly. | | |
| | (2) Nothing in sections 29A to 29K (both sections inclusive) shall preclude the Board from recovering the amount due on a mortgage bond in accordance with the provisions of any other written Law. | | |
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| 29L. Besides the amount due on any loan, the Board may recover from the debtor, or any person acting on his behalf
| | (a) all moneys expended by the Bank, in accordance with the covenants contained in the mortgage bond executed by the person to whom the loan was granted, in the payment of premiums and other charges in respect of any policy of insurance effected on the property mortgaged to the Bank, and in the payment of all other costs and charges authorized to be incurred by the Bank, under the covenants contained in such mortgage bond and executed by the debtor; | | |
| | (b) the costs of advertising the sale and of selling the mortgaged property; and | | |
| | (c) in any case where the property mortgaged as security for the loan consists of the interest of the debtor under a lease from the State, and such property has been surrendered to the State in accordance with the provisions of section 29s, all moneys paid to the State by the Board on such surrender as moneys due to the State by the Board on such surrender as moneys due to the State by the debtor under the said lease: | | |
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| 29M. If the mortgaged property is sold, the Bank shall, after deducting from the proceeds of the sale the amount due on the mortgage and the moneys and costs recoverable under section 29L, pay the balance remaining, if any, either to the debtor or any person legally entitled to accept the payments due to the debtor or where the Board is in doubt as to whom the money should be paid into the District Court of the district in which the mortgaged property is situate. |
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| 29N.
| | (1) If the mortgaged property is sold, the Board shall issue a certificate of sale and thereupon all the rights, title, and interest of the debtor to and in the property shall vest in the purchaser; and thereafter it shall not be competent for any person claiming through or under any disposition, whatsoever, of the right, title or interest of the debtor to and in the property made or registered subsequent to the date of the mortgage of the property to the Bank, in any court to move or invalidate the sale for any cause whatsoever, or to maintain any right title or interest to or in the property as against the purchaser. | | |
| | (2) A certificate signed by the Board under subsection (1) shall be conclusive proof, with respect of the sale of any property, that all the provisions of this Act relating to the sale of that property have been complied with. | | |
| | (3) If the purchaser is some person other than the Bank, the certificate shall be substantially in the prescribed form and, if the purchaser is the Bank, the certificate shall be: substantially in such other form as may be prescribed. | | |
| | (4) Every certificate of sale shall be liable to stamp duty and charges as if it were a conveyance of immovable property and to any registration and other charges authorized by law, all of which shall be payable by the purchaser. | | |
| | (5) Where the property sold consists of the interest of a lessee under a lease from the State, then, if the purchaser of the property is some person other than the Bank, the certificate of sale shall not be signed by the Board unless the Land Commissioner, in the exercise of his discretion, has approved the purchaser. | | |
| | (6) Whenever the Land Commissioner refuses, under subsection (5), to approve any purchaser of the interest of a lessee under a lease from the State
| | | (a) all sums paid to the Bank by the purchaser in respect of the sale shall be repaid to him by the Board; |
| (b) the costs of advertising and holding such sale shall be deemed to be costs recoverable by the Board under section 29L ; and |
| (c) the property shall be resold in accordance with the provisions of this Act. |
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| 29p.
| | (1) The purchaser of any immovable property sold in pursuance of the preceding provisions of this Act shall, upon application made to the District Court of Colombo or the District Court having jurisdiction over the place where that property is situate, and upon production of the certificate of sale issued in respect of that property under section 29 N, be entitled to obtain an order for delivery of possession of that property. | | |
| | (2) Every application under subsection (1) shall be made, and shall be disposed of, by way of summary procedure in accordance with the provisions of Chapter XXIV of the Civil Procedure Code; and on all documents field for the purpose of each such application and on all proceedings held thereupon. stamp duties and other charges shall be payable at the respective rates payable under any written law for the time being in force, on application for, and proceedings connected with or incidental to, the execution of a decree of a District Court for the delivery of possession of any immovable property of the same value as the property to which such application relates. | | |
| | (3) Where any immovable property sold in pursuance of the preceding provision:; of this Act in the occupancy of the debtor or of some person on his behalf or of some person claiming under a title created by the debtor subsequently to the mortgage of the property to the Bank, the District Court shall order delivery to be made by putting the purchaser or any person whom he may appoint to receive possession on his behalf, in possession of the property. | | |
| | (4) Where any immovable property sold in pursuance of the preceding provisions of this Act is in the occupancy of a tenant or other person entitled to occupancy same, the District Court, shall order delivery to be made by affixing a notice that the sale has taken place, in the Sinhala, Tamil and English languages, in some conspicuous place on the property, and proclaiming to the occupant in the customary mode or in such manner as the court may direct, at some convenient place, that the interest of the debtor has been transferred to the purchaser. The cost of such proclamation shall be fixed by the court and shall in every case be prepaid by the purchaser. | | |
| | (5) Every order under subsection (3) or subsection (4) shall be deemed, as the case may be, to be an order for delivery of possession made under section 287 or section 288 of the Civil Procedure Code, and may be enforced in like manner as an order so made, the debtor and the purchaser being deemed, for the purpose of the application of any provision of that Code, to be the judgment-debtor and judgment-creditor, respectively. | | |
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| 29Q. Where the property sold has been purchased on behalf of the Bank, the Board may at any time before it resells that property, cancel the sale by an endorsement to that effect on a certified copy of the certificate of sale, upon the debtor or any person on his behalf paying the amount due in respect of the loan for which the property was sold (including the costs of seizure and sale) and interest on the aggregate sum at a rate not exceeding the prescribed rate per annum. Such an endorsement shall, upon registration in the office of the Registrar of Lands, revest the said property in the debtor as though the sale under this Act had never been made. |
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| 29R. If the property so sold has been purchased on behalf of the Bank, and the sale is not cancelled under section 29Q, the Board may, at any time, re-sell the. property and transfer to the purchaser by endorsement on a certified copy of the certificate referred to in subsection (3) of section 29N, all the right title and interest which would have been acquired by the purchaser at the original sale. The endorsement shall be liable to the same stamp duty and charges as a certificate to a purchaser at the original sale, and shall, when it is registered in the office of the :Registrar of Lands, vest such right, title and interest as aforesaid in the purchaser. |
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| 29S. If at any sale in pursuance of the preceding provisions of this Act, the Bank has purchased any property sold !or default in the payment of a loan, the Bank shall not hold such property for a longer period than it is necessary to enable the Bank to re-sell the property for such a sum as will cover the total amount due to the Bank on account of loan, interest, expenses and costs:' |
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| 29T. In this Part, unless the context otherwise requires, .. property" in any case where a loan is secured by a mortgage of the interest of a lessee under a lease from the State, means the right. title and interest of the lessee under the lease.'. |
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Sri Lanka Consolidated Acts