Legal Services and Laws of Sri Lanka

SLR - 1989 Vol.2-P230

SLR - 1989 Vol.2, Page No - 230







JUNE 08 AND 15, 1989

Writ of Certiorari - Control of Finance Companies Act, No. 27 of 1979, section 21A-RegulationsunderPublicSecurity
Ordinance - Finance Companies Act. No. 78 of 1988, sections 45(3) and (A)-Maintainabilityofapplication-Ousteror
preclusive clause.
The petitioner sought a writ of certiorari to quash an order dated 7.7.1988 made by the Monetary Board oftheCentralBank
vesting in the Central Bank all the shares owned by himinHidekiInvestmentsLimitedofwhichhewasChairman.The
respondents objected to the maintainability of the application relyingontheimmunityfromcivilorcriminalactions
conferred by sections 45(3) and 45(4) of the Finance Companies Act, No. 78 of 1988.

Held -
The writ is of a supervisory nature and the preliminary objection to the maintainability of the application is not
Cases referred to -
(1) Government of Madras v. Vasappa AIR 1965 SC 1873
(2) Re Goonesinhe 44 NLR 75
(3) Silverline Bus Co. Ltd. et at. v. Kandy Omnibus Co. Ltd. et al 58 NLR 193, 197, 203, 206
(4) Kudakanpillai v. Mudanayake 54 NLR 350
(5) H.E. Tennakoon v. P.K. Duraisamy 59 NLR 481
(6) Colombo Apothecaries Ltd. v. Wijesuriya 71 NLR 258
(7) Maliban Biscuits Manufactories Ltd. v. Subramaniam 74 NLR 76. 78 79.
APPLICATION for writ of certiorari to quash vesting order dated 7.7.1988 made by the Monetary Board of the Central Bank of
Sri Lanka
Faiz Musthapa, P.C., with Mahanama do Silva and G.G. Arulpragasam for petitioner
Dr. H.W. Jayewardene, Q.C. with H.L de Silva. P.C. and M. Amarasekera for respondents.
Cur. adv. vult
August 23, 1989
This is an application for the issue of writs in the nature of writs of certiorari.
The Petitioner is the Chairman of Hideki Finance Investments Ltd. The Petitioner isalsotheChairmanandthePrincipal
share - holder of Hideki Investments Ltd which is a Public Company duly incorporated under the Companies Act. ThePetitioner
is also a share holder of three other Companies namely Hideki Marines Limited, Hideki Group Limited,andHidekiIndustries
Limited which are private Companies.

The Petitioner is seeking to quash an order made by the Monetary Board of the Central Bank, thatisthefirstRespondent,
vesting in the Central Bank all the shares owned by him in Hideki Investments Limited. The order is dated7.7.1988produced
marked "X".
The order purports to be made under Section 21 (A) of the former Control of Finance Companies Act, No. 27 of 1979.
This Section 21 (A) was introduced as an amendment to the Control of Finance Companies Act by Regulationsframedunderthe
Public Security Ordinance by the former President of the Democratic Socialist Republic of Sri Lanka.
The Petitioner filed this application on 21.7.1988. He seeks to impugn the Regulation as ultra vires the Constitution ontwo
Article 155(2) of the Constitution empowers the President tomakeRegulations"over-riding,amendingorsuspendingthe
operation of the provisions of any law, except the provisions of the Constitution". The Petitioner's complaint is .........
(a) that the power to vest shares is punitive in character and partakes of the judicial power and assuchisviolativeof
Article 4(c) of the Constitution which vests judicial power in the Courts
(b) that it is cruel punishment and therefore violative? of Article
11 of the Constitution.
As a preliminary matter the first respondent by an amended statement of objections dated 24.2.1989hastakenobjectionin
the maintainability of this application based on Section 45(4) of the Finance Companies Act No. 78 of1988whichreadsas
"No civil or criminal proceedings shall be instituted or maintained or continued, against the Board or anyofficer,servant
or agent of the Board or any other person or Authority for any act, bona fide, done or omitted to be done by himduringthe
period commencing June 16th, 1988 and ending on the date of commencement of this Act, in pursuance or supposedpursuanceof
the provisions of the Control of Finance Companies Act No. 27 of 1979 read with the Control of Finance Companiesregulations
made under the Public Security Ordinance."
It is submitted on behalf of the Petitioner that these provisions only confer indemnityfromordinarycivilandcriminal
liability and do not affect writ applications for the following reasons:
This is the traditional formula by which immunity from CIVIL AND CRIMINAL LIABILITY has been conferred from timeimmemorial.
The following are some examples:-

(i) Section 33 of the Co-operative Employees Commission Act, No. 12 of 1972 is almost identical to the provision reiiedupon
by the Respondent. This Section reads as follows:-
"No action, prosecution or other proceeding, whether civil orcriminal,shallbeinstitutedormaintainedagainstany
individual member of the Commission in respect of any decision taken or act doneoromittedtobedonebyhiminhis
capacity as such member or by the Commission in its corporate capacity".
(ii) Section 18 of the Criminal Justice Commission Act, No. 14 of 1972 reads as follows:-
"No civil or criminal proceedings shall be instituted against any member of a Commission in respectofanyactbonafide
done or omitted to be done by him as such member".
This is obviously not an ouster or preclusive clause barring writ applications as Section 25 of that very actcontainssuch
a clause worded in the customary manner as follows:-
"Any finding made, sentence imposed by a Commission under this Act shall be final and conclusive, and shall not be calledin
question in any court or tribunal, whether by way of action, application inrevision,appeal,writorotherwise",(iii)
Section 58(1) of the Land Reform Law, No. 1 of 1972 reads as follows:-
No suit or prosecution shall lie -
(a) against the Commission for any act which in good faith is done or purported to be done by the Commission under this Law
(b) against any member, officer, servant or agent of the Commission for any act which in goodfaith is done or purported to
be done by him under this Law or on the direction of the Commission.
In order to exclude writ application, there is a well known formula introduced by the amendment effectedtoSection22of
the Interpretation Ordinance by the Interpretation Amendment Act, No. 18 of 1972. Section 22 of the InterpretationAmendment
Act reads as follows:

"Where there appears in any enactment, whether passed or made beforeorafterthecommencementofthisOrdinance,the
expression "shall not be called in question in anyCourt"oranyotherexpressionofsimilarimportwhetherornot
accompanied by the words "whether by way of writ or otherwise" in relation to any order, decision,determination,direction
or finding which any person, authority or tribunal is empowered to make or issue under such enactment,nocourtshall,in
any proceedings and upon any ground whatsoever, have jurisdiction to pronounce upon the validity or legality ofsuchorder,
decision, determination, direction or finding, made or issuedintheexerciseortheapparentexerciseofthepower
conferred on such person, authority or tribunal".

Even here, the proviso specifically provides that the writ jurisdiction vested in the CourtofAppealorintheSupreme
Court is not affected. For the proviso reads as follows:-
Provided, however, that the preceding provisions of this section shall not applytotheSupremeCourtortheCourtof
Appeal, as the case may be, in the exercise of its powers under Article 1 40 of theConstitutionoftheRepublicofSri
Lanka in respect of the following
matters, and the following matters only, that is to say:-
(a) Where such order, decision, determination, direction of finding is ex facienotwithinthepowerconferredonsuch
person, authority or tribunal making or issuing such order, decision, determination, direction or findingand
(b) Where such person, authority or tribunal upon whom the power tomakeorissuesuchorder,decision,determination,
direction or finding is conferred, is bound to conform to the rules of natural justice, orwherethecompliancewithany
mandatory provisions of anylawisaconditionprecedenttothemakingorissuingofanysuchorder,decision,
determination, direction or finding, and the Supreme Court or the Court of Appeal, as the casemaybe,issatisfiedthat
there has been no conformity with such rules of natural justice or no compliancewithsuchmandatoryprovisionsofsuch

It cannot be, that the Legislature which is well acquainted with this formula should have chosen anotherwordingwhichhas
traditionally being construed to mean immunity only from civil and criminal proceedings if it intended toexcludethewrit
jurisdiction. In fact, even where the writ jurisdiction is expressly excluded, the proviso to Section 22referredtoabove
has preserved the writ where the attack is on the ground of ultra vires or natural justice. In this instance, theattackis
even more fundamental namely that the Regulations are ultra vires the Constitution.
An examination of the provisions of the Finance Companies Act, No. 79 of 1988 indicates that the Act itself doesnotregard
Section 45(4) as an ouster clause. For Section 45(4) relates to the period from the 16th of June 1988totheenactmentof
that Act. In respect of the acts done after the enactmentoftheAct,Section44ofthatActexcludesanysuitor
prosecution. It is identical to Section 45(4) except that it relates to thesubsequentperiod.How/everSection43(2)(a)
assumes that notwithstanding Section 44 the writ jurisdictionexistsandonlystatesthatsuchjurisdictionshallbe
exercised by the Supreme Court and not by the Court of Appeal. This shows that it is trite law thatsuchprovisionsconfer
only civil and criminal indemnity and do not exclude the writ jurisdiction.
In India, the Supreme Court has clearly held that such provisions
only exclude suits for damages and compensation and do not shut out other remedies Government of Madras vs. Vasappa (1).
The cases which dealt with the question as to whether a writ of certiorari falls within the ambit oftheexpression"civil
suit or action" in Section 3 of the Appeals (Privy Council) Ordinance were cited only to show the inherent nature ofawrit
application and the decisions themselves have no bearing on the issue before this Court.
In Re Goonesinha (2) the Supreme Court in an application for conditional leave to appeal to the Privy Councilheld(Moseley
S.P.J. with Soertsz, J. agreeing) that an application for a Writ of Certiorari being anapplicationforrelieforremedy
obtainable through the Courts' power or authority, constitutes an action and comes within theambitofSection3ofthe
Appeals (Privy Council) Ordinance.

In Silverline Bus Co. Ltd., et at.. Petitioner, Kandy Omnibus Co., Ltd., et a/.,(3) a Bench of fiveJudgesconsideredthis
issue and overruled the cases of In re Goonesinha (2) and Kudakanpillai vs. Mudanayake(4).Thiswasanapplicationfor
conditional leave to appeal to the Privy Council from the judgment of the Supreme Court. The Supreme Court(BasnayakeC.J.,
with Gunasekara, J., Pulle, J., de Silva, J., agreeing and Sansoni, J., dissenting) held that an appeal to the PrivyCouncil
does not lie from a decision of the Supreme Court in an application for writ of certiorari.Suchanapplicationdoesnot
fall within the ambit of the expression "civil suit or action" in Section 3 of the Appeals (PrivyCouncil)Ordinance,even
when the application is made by a party aggrieved who has suffered damage by an unwarranted exercise of jurisdiction.
The words "civil suit or action" in Section 3 of the Appeals (Privy Council) Ordinance should be construed in theirordinary
sense of a proceeding in which one party sues for or claims something from another in regular civil proceedings.
Basnayake, C.J., gave three reasons for his view:-

(a) Proceedings for certiorari are not suits or actions as in them the Court exercises its supervisory functions andisnot
called upon to pronounce judgments on the merits of the dispute between the parties before the inferior tribunal - page197,
2nd paragraph
(b) Such an application does not fall within the definition of action in section 6 of the Civil Procedure Code - page 203,
3rd paragraph
(c) a "civil suit or action" must be construed to be a proceeding in which one party suesforandobtainssomethingfrom
another in regular civil proceedings and an application for certiorari therefore does not fall within that expression -page
206, 2nd paragraph.

In H.E. Tennekoon (Commissioner for Registration of Indian andPakistaniResidents)vs.P.K.Duraisamy (5)thePrivy
Council (Lord Morton of Henryton, Lord Tucker, Lord Cohen, Lord Denning, and Mr. L.M.D. de Silva) held that the words"civil
suits or action" in Section 3 of the Appeals (Privy Council) Ordinance are not limited toproceedingsinwhichoneparty
sues for or claims something from another in regular civil proceedings. The case ofSilverlineBusCo.,Ltd.,vs.Kandy
Omnibus Co., Ltd.,(3) was partly overruled. That was the case of an appeal to the Supreme Court from an order made underthe
Indian and Pakistani Citizenship Registration Act and not a writ application. The Court pointed out that BasnayakeC.J.was
wrong in holding that the term "action" in the Charter of Justice bore a different meaning from that in theAppealstothe
Privy Council Ordinance - (Vide page 494, 2nd paragraph), but did not decide the point as to whether a writ applicationcame
within the definition of a "civil suit or action" within the meaning of the Appeals to the Privy Council Ordinanceandleft
this question which had been decided in the Silverline case open - (vide page 494 last paragraph to 495).

In Colombo Apothecaries Ltd., vs. Wijesuriya (6) the Supreme Court in an application for conditional leave to appeaitothe
Privy Council held that an application for a writ of prohibition, or even an application for certiorari is acivilsuitor
action within the meaning of Section 3 of the Appeals (Privy Council) Ordinance. The decision of a Bench offiveJudgesto
the contrary in Silverline Bus Co., Ltd., vs. Kandy Omnibus Co., Ltd.,(3) was overruled by thePrivyCouncilinTennekoon
vs. Duraisamy (5) Tennekoon J (with Siva Supramaniam, J., agreeing) took the view that although thePrivyCouncildidnot
expressly overrule the Silverline case, the reasoning had been rejectedandthatthereforeitshouldbeconsideredas
In Maliban BiscuitsManufactoriesLtd.,vs.Subrarnaniam(7)theSupremeCourt(Samarawickreme,J.,withPanditha
Gunawardene, J. agreeing) held that an application to the Supreme Court for a writ of certiorariisnotacivilsuitor
action. Accordingly, the Supreme Court
will not grant leave to appeal to Her Majesty-in-Council for an order refusing an application forWritsofCertiorariand
Prohibition. Colombo Apothecaries Co., Ltd, vs. Wijesuriya (6) was not followed. That was thecaseofanapplicationfor
conditional leave to appeal to the Privy Council. Samarawickrema J., pointed out at page78thatBasnayakeC.J.,inthe
Silverline case had given three reasons for his view and that although the Privy Council in the Tennekoon vs. Duraisamycase
had dissented from his view of the definition of "civil suit ofaction",theothertworeasonsgivenbyhim-(Vide
paragraph 4 at page 6 above) were unaffected and as such that case could not be regarded as overruled (vide page 79).

However the Privy Council (Lord Morris of Borth-y-Gest, Lord Quest, Viscount Dilhorne, Lord SimonofGlaisdaleandLord
Cross of Chelsea) held that an application to the Supreme Court for a writ of certiorari in a civil matter is a"civilsuit
or action" within the meaning of Section 3 of the Appeals (Privy Council) Ordinance. The reasoning whichwasthebasisof
the decision of the Supreme Court in the Silverline Bus Co.,Ltd.,vs.KandyOmnibusCo.,Ltd.,(3)cannotstand.The
decisions in Tennekoon vs Duraisamy (5) and Colomb G Apothecaries Co., Ltd., vs. 'vVijesuriya (6) were approved.

The Privy Council took the view that the reasoning in the SilverlineBuscasehadbeenrejectedintheTennekoonvs.
Duraisamy case and as such held that that decision should be considered overruled. Their Lordships based theirreasoningon
the footing that since in Tennekoon's case the Privy Council had heldthattheviewofBasnayakeCJexpressedinthe
Silverline Bus Company case that the words "Civil suit or action" in the Privy Council AppealsOrdinanceboreadifferent
meaning from the same words appearing in the Charter of Justice was wrong, that decision was overruled -vide 74NLR343at
paragraphs 1, 2, 3 and 4.
However, this decision has no bearing on the present matter inasmuch as:-
The Court was construing the particular words appearing in particular statutes, namelytheCharterofJusticeandPrivy
Council Ordinance and gave a wide definition having regard to the historical sequence. Ontheotherhandinthepresent
instance, these words have been traditionally used as conferring only civil and criminal immunity and notoustingthewrit
In any event, the other reason given by Basnayake CJ namely that
the writ is of a supervisory nature stands unaffected - (vide 74 NLR 78, 3rd paragraph to page 79).
The first Respondent not only relied on Section 45(4) of the Finance Companies Act but also Section 45(3) of the said Act.
This sub-section reads as follows:-
"Any action taken, order made or direction given under the Control of Finance Companies Act. No. 27 of1979readwiththe
Control of Finance Companies regulations made under the Public Security Ordinance during the period commencingonJune16,
1988 and ending on the date of commencement of this Act shall be valid and effectual as if the Public Security Ordinancehad
authorised the making of those regulations".
This sub-section has no application. It purports to validate acts "as if the Public SecurityOrdinancehadauthorisedthe
making of those regulations". It is intended to confer validity even if the Public Security Ordinance did not in factconfer
such validity. The Petitioner does not contest the validity of the regulations from the stand point ofthePublicSecurity
Ordinance but the Constitution. Even if Section 45(3) would render theregulationsvalid,eveniftheywereoriginally
invalid as being ultra vires the Public Security Ordinance, it would not validate the Regulations iftheyareultravires
the Constitution and the Petitioner bases his case on the footing that they are ultra vires the Constitution.

The Petitioner bases his application on the ground that the regulations are ultra vires theConstitutionfortworeasons.
They are violation of Article 4(c) and Article 11 of the Constitution. According to the Petitionerthepowertoimposea
punishment is an exercise of judicial power. Article 4(c) of the Constitution vests judicial power in "Courts, Tribunalsand
The Petitioner alleges that the punishment inflicted is cruel or inhuman and therefore constitutes a violation of Article11
of the Constitution. The first Respondent denies that the said order amounts to infliction of punishmentonthePetitioner
and that the punishment is cruel or inhuman. This question had not been canvassed beforemeandassuchanorderunder
Article 125 of the Constitution to refer this question to the Supreme Court does not arise now.
For the foregoing reasons I overrule the Preliminary Objection.
Preliminary objections overruled.

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