Legal Services and Laws of Sri Lanka

SLR-1978-79-80 Vol.1-P278

SLR - 1978-79-80 Vol.1, Page No - 278


S.C. APPEAL NO. 4/79
C.A. NO. 1144/78
JANUARY 22, 23,24,2528,29 AND 30, 1980 and
FEBRUARY 5, 6, 7 AND 8, 1980.

Contempt - Disobedience - Enjoining Order made by the Court of Appeal - Orders of the Court of AppealunderArticle105(3)
of the Constitution - Civil Procedure Code, Chapters XLVIII and LXV.

Enjoining order - Disobedience of an enjoining order - Enjoining order against a juristic person - Parties who must obey.
The appellant Regent International Hotels Ltd., Hong Kong instituted an action against the GalleFaceHotelCompanyLtd.,
and Cyril Gardiner its Chairman and Managing Director and others praying for the specific performance of an agreementmarked
'"A" and filed with the plaint and for a permanent and an interim injunction pending the final determinationoftheaction
restraining the defendants from violating any of the rights of the plaintiff under the said agreement. ThelearnedDistrict
Judge entered an interlocutory order and an enjoining order restraining thedefendantsfromcommittinganyoftheacts
violating the plaintiff's rights under the said agreement. Theorderwasservedonthedefendantsbutthedefendants
disobeyed the said order on a number of occasions when the plaintiff attempted to enforce the provisions of the said order.
Thereafter the "plaintiff" instituted proceedings before the Court of Appeal for contempt of Court undertheprovisionsof
Chapter LXV of the Civil Procedure Code. The Court of Appeal dismissed the application but granted leave to appeal.
It was argued before the Supreme Court :

1. The law does not make the breach of an enjoining order a contempt of court.
2. The Court of Appeal has no power to take cognizance of a disobedience to an enjoining order under Article105(3)ofthe
3. That the enjoining order is bad in law as it does not direct every person concerned to refrain from doing certain acts.
4. A party cannot be brought before court a second time for the breach of the same enjoining order.
5. That the enjoining order was irregularly or wrongly issued

Held :
1. That an enjoining order has all the force of an interim injunction and disobedience of an enjoining orderconstitutesan
offence of contempt of court.

2. That the Court of Appeal has all the powers under Article 105(3) of the Constitution ofpunishingforcontemptwhether
committed in facie curae or ex facie curiae.

3. That the jurisdiction of an inferior court to punishforcontemptisconfinedtopunishmentsforcontemptasare
perpetrated in facie curae and does not extend to those committed out of court unless express statutory powerisgivenfor
that purpose.

4. When an injunction is obtained against a juristic person the parties who mustobeyitarethosein.controlofthe
affairs of the juristic person. There is no requirement in law that they must also be direct. If they failtheyareguilty
of contempt and they are the persons to be charged for contempt.

5. Every act done in contravention of an enjoining order as long as it is operative constitutes a breach of it andtherefore
a contempt of court.

6. As long as an enjoining order is in operation the party who has obtained it is entitled tomakesuccessiveattemptsto
have it obeyed and the obstruction of each of such attempts constitutes a contempt of court.

7. An enjoining order is issued for swift and immediate action and like an injunction must be implicitlyobeyedandobeyed
to the letter. If two views are possible and the court has taken one view it is not open to a party tosaythattheother
view should have been accepted and therefore refuse to obey the enjoining order.

Cases referred to :

(1) In the matter of the application of John Fergusson for a Writ of Prohibition against the District Judge, Colombo - 1NLR

181 at 190.

(2) In Re Cader and another 68 NLR 293.

(3) Pounds v. Ganegama-40 NLR 73.

(4) Gnanamuthu v. Chairman U.C. and U. C. Bandarawela - 43 NLR 366.

(5) Russel v. East Anglican Railway Co. 20 L. J. Ch. at 261.

(6) Eastern Trust Co. v. Mc. Kensie Maan and Company Ltd. [1915] A.C. 750

P.C. [1952] All 2 ER 567.

(7) Hadkinson v. Hadkinson (195212 All ER 567.

(8)Chuck v. Cromer (1846) 1 Coop temp. Cott 339 at 342-343. 47 ER 342-343 appeal for order of Court of Appeal.
H. W Jayewardene, QC with Eric S. Amerasinghe, H. L. de Silva, K N. Choksy and l. S. de Silva for Complainant-Appellant.

C. Thiagalingam, ac., with Dr. Colvin R. de Silva, K Shinya, R. Gooneratne, and K. Kanag-Iswaran for 1st Accused-Respondent.

Dr. Colvin R. de Silva with K. Shinya, R. Gooneratne and K. Kanag-Iswaran for 2nd to 4th and 6th Accused-Respondents.

K. Shinya for 5th Accused-Respondent.
Dr Colvin R. de Silva with K. Shinya, R. Gooneratne and K. Kanag-Iswaran for 9th Accused-Respondent

March 12, 1980
This is an appeal from an order of the Court of Appeal dismissing the charges of contempt of Court laid againstthe1stto
8th respondents. The Court of Appeal has granted the petitioner leave to appealtothisCourt.Abriefhistoryofthe
proceedings is necessary. The petitioner is a corporation doing business as hoteliers underthenameRegentInternational
Hotels Ltd. in Hong Kong (hereinafter referred to as the Petitioner). On a plaint dated10thOctober,1978itinstituted
action No. 1/91821/M in the District Court of Colombo against the Galle FaceHotel Company Limited (9th Respondent inthese
proceedings) and Cyril Gardiner, Chairman and ManagingDirectoroftheCompany(1stRespondentintheseproceedings)
primarily for a decree for specific performance of an agreement marked "C" and filed with the plaint.(Producedandmarked
E1A in these proceedings). In paragraph 6 of the plaint the. petitioner quoted verbatimseveralsectionsofthedocument
'"C" and in particular section 3.01 headed: Use and Operation which reads as follows :-
"Section 3.01. Use and Operation. Regent covenants to use the Hotel solely for the operation of a deluxe hotelandforall
related activities which are customary and usual to such an operation sofarasshallbefeasible,shallconductsuch
operations so as to accord with the character and traditions of the country.

It is understood that Regent shall have within the terms and Provisions of thisagreement,forowner'saccount,absolute
control and discretion in the operation of the Hotel".
On the last page of the document appears, written in hand,sixclauses,whichwritinghasbeenreferredtointhese
proceedings as an addendum. Besides theprayerforspecificperformancethepetitioneralsoprayedforapermanent
injunction and also for an interim injunction in these terms :-

"(c) For an interim injunction restraining the defendants and their servants,agentsandsubordinatespendingthefinal
determination of this action"
(i) From preventing or obstructing the plaintiffthroughitsauthorisedrepresentativefromexercisingtherightsof
absolute management and control of the said Galle Face Hotel in terms of the said agreement marked "A"
(ii) from entering into agreements, contracts, and/or arrangementswiththirdpartieshandingoverthemanagementand
control of the said Galle Face Hotel either wholly or partly to third parties in violation of therightsoftheplaintiff
under the agreement marked "A"
(iii) from otherwise interfering with and/or otherwise acting in violation of plaintiff's rights under the agreement marked
.'A" in any manner whatsoever"

The learned Judge "after reading the petition and the affidavit and the annexures" entered an interlocutory orderreturnable
27th October, 1978. He also enjoined the defendant in these terms :-
"I also order that an enjoining order be issued restraining the defendant in terms of para (c) (i) (ii),and(iii)pending
the decision of the application for interim injunction in this Court on the plaintiff depositing a sum ofRs.100,000/-as
The petitioner deposited this security and an enjoining order dated 11th October 1978 was issued. I am setting itoutfully
as a great deal of argument was based on its terms.


To: The defendant abovenamed.
WHEREAS the plaintiff has instituted the above styled action praying, inter alia, foraninteriminjunctionintermsof
prayer (c) contained in the plaint (copies of the plaint, affidavit and documents filed therewith are annexed hereto).
AND WHEREAS the application for an interim injunction was supported in Court on the 10th day ofOctober,.1978byCounsel
appearing for the plaintiff.
AND WHEREAS the Court after reading the plaint, affidavits and documents annexed theretoandhearing.thesubmissionsof
Counsel has ordered that notice of the application for aninteriminjunctionreturnableonthe27thof October1978
together with an enjoining order do issue restraining the defendant abovenamed in the manner prayed for in the prayer (c)of
the plaint pending the hearing and determination of the application for an interim injunction.

AND WHEREAS the plaintiff has deposited a sum of Rs. 100,000/- ordered as security.
YOU the 1st and 2nd defendants abovenamed and your servants, agents andsubordinatesareherebyrestrainedandenjoined
pending the hearing and determination of the application for the interim injunction in this court from :

(i) preventing or obstructing the plaintiff through his authorised representative fromexercisingtherightsofabsolute
management and control of the said Galle Face Hotel in terms of the said agreement marked (A).
(ii) entering into agreements, contracts and/or arrangements with third parties handing over the managementandcontrolof
the said Galle Face Hotel either wholly or partly to third parties in violation of the rightsoftheplaintiffunderthe
agreement marked "A".
(iii) otherwise interfering with and/or otherwise acting in violation of the plaintiff'srightsunderthesaidagreement
marked "A" in any manner whatsoever.
THESE ARE THEREFORE to command you to obey in the manner aforesaid.
HEREIN fail not under the penalty of the law otherwise ensuing.
Additional District Judge
11th October 1978.
This enjoining order was served on the defendants by the Fiscal on the 11th October. At 1.00 p.m.onthesamedayPrarob
Mokaves, Area Director of the petitioner, wrote to the 1st respondent a letter (E5) whichwasdeliveredattheReception
Desk of the Galle Face Hotel at approximately 8.30 p.m. It informed the first respondent that Mokaveswouldbecallingat
the Hotel at 9.00 a.m. the next day12thOctober-"toresumethemanagementandcontroloftheHotelbyRegent
International, Hotels Limited which was unlawfully interrupted"bythe1strespondent.Itspecificallyaskedforthe
restoration of the plaque displaying the name "Galle Face Hotel - Regent of Colombo", for the use oftheManager'soffice,
Secretarial Services and other amenities pertaining to the operation of the Hotel, that the employees be made fully awareof
the terms of the enjoining order and lastly that a Bank be designated for theopeningof"TheOperatingAccountofthe
Hotel" as required by section 4.04 of the agreement.
Mokaves called at the Hotel as indicated on the 12th but was unable to take control of the Hotel as he wasresistedbythe
1st Respondent. He reported this matter to the District Court by affidavit. The 1st Respondent was charged withcontemptof
Court. After inquiry he was found guilty on the 8th November, 1978, and fined Rs. 2500. The reasons for theconvictionwere
delivered by the learned District Judge on 13th November 1978. The 1strespondenthasappealedtotheCourtofAppeal
against this conviction and that appeal is pending in that Court. I do not propose to make any comment onthoseproceedings
as the Court of Appeal has yet to decide it and also because those proceedings are not the subject matter of this appealnow
before this Court.

It will be convenient if I set out in chronological order the events leading up to the charges of contemptreferredtothe
Court of Appeal. On the 22nd October, 1978, by letterE7theAttorneysforthepetitionerwrotetothe2ndto7th
respondents and to one W. Tennekoon (also a Director of the 9th respondent Company though not apartytotheseproceeding
pointing out that each of them as directors of the Hotel Company was disobeying the Enjoining Order issuedbytheDistrict
Court and informing them that in the event of continued disobedienceeach would be reported to Courtforcontemptofits
authority. By letter dated 10th November (E8) the petitioner's lawyers drew the attention of the 2nd to7threspondentsto
their letter E7 and informed that Mokaves "will once again calloveronMonday13thNovemberat8.00a.m.toresume
management of the Galle Face Hotel". By ESA of the same date the 1st respondent was given thesamenotice.Mokavescalled
over at the Hotel at 9.00 a.m. on the 13th. He was met by the 8th respondent who handed to him twoletters(markedE9and
E10 in these proceedings).MokaveshasstatedinhispetitionthathehadtoleavetheHotelwithhismission
unaccomplished. These two letters make interesting reading in the background of the controversy. Letter E9 is dated13.11.78
and is signed by the 8th respondent. It states that Document "A" was "exploratory in nature"andsubsequentlyaltered.It
refers to and quotes clause 6 of the addendum. While stating that the Chairman and Directors of the Hotel Companywillobey
the Enjoining Order it states ultimately as follows :

If Mr. Mokaves is the authorised representative of Regent there is no objection to his visiting theHotel.IfhoweverMr.
Mokaves wishes to function as Manager or in any other executive capacity hemustfirsthavetheapprovaloftheabove
authorities and of the Development Finance Corporation of Ceylon (DFCC) - leave alone the GFH Board".

Letter E10 is dated 12.11.78 and is signed by the 1st Respondent. It informs Mokaves that Regent, by institutingactionNo.
1/8182/M of the District Court of Colombo, and by its "subsequent conduct, asserting and seekingtoobtaintoitselfthe
right to absolute management and control of the Galle Face Hotel has repudiated the agreementbetweenRegentInternational
Hotels Limited and the Galle Face Hotel Company Limited as modified by the minutes of the meeting of the BoardofDirectors
of the Galle Face Hotel Company Limited dated 30th October 1976." It adds that the Galle Face Hotel Company Limited"accepts
the repudiation and from date thereof elects to treat the saidagreement as cancelled and as having come toanend."(the
underlining is mine). It is a case of the left hand not knowing what the right hand was doing. Two responsible officers ofa
reputed Company each attempting to justify a differentandconflictingstand.OneassertingthattheAgreementstood
repudiated and cancelled on the 12th November and the other, on the very next day, insisting on thestrictadherencetoa
term of the Agreement. The former acknowledges an agreement while thelatterreferstoitasanexploratoryexercise.
Counsel for the 1st respondent on the first day of his argument stated that he was unhappy aboutE10butashisargument
progressed into the third day he stated that he was now happy about E10. He had in. the meantime discovered that E10hadno
express reference to document ElA. ,discovered happiness was short lived because his subsequent reading of the record ofhis
client's evidence (El 8) clearly indicated that the Agreement referred to byhimwasElAandthattherewasnoother
document in writing containing an agreement. E9 and E10 undoubtedly refer to ElA and I so hold. The final result of allthis
was that Mokaves failed to get management and control of the Hotel on the 13th November.

Mokaves would not give up his attempt to get control of the Hotel. By letter dated the 15th November (El 1)thelawyersof
the petitioner informed the 8th respondent that another endeavour would be made to have the EnjoiningOrderobeyedbyall
who are bound by it and "accordingly Mr. P. Mokaves, accompanied by his nominees will call at the Hotel on Thursday the16th
instant at 8.00 a.m. to resume management and control of the Hotel'". A copy ofitwasforwardedtoeachoftheother
Directors of the Hotel Company by express post (El 2). Mokaves entered the Galle Face Hotel at about 9.00 a.m.onthe16th
November and was met by Victor Rodrigo (referred to in these proceedings as the Manager of the Hotel) whohandedtohima
copy of a letter dated 16.11.78 (El 3) addressed to the petitioner's lawyers and signed by the 8th respondent.Mokavesmade
a request to speak to the 8th respondent but was told that the 8th respondent did not desire to speak to him.Havingwaited
in the Hotel till about 10.00 a.m. Mokaves left the premises his mission once againafailure.Thereafterbyapetition
dated 27th November, 1978, the petitioner invoked the jurisdiction of the Court of Appeal praying that the1sttothe8th
respondents be punished for contempt of the authority of the District CourtofColombocommittedonthe13thand16th
November. The Court of Appeal dismissed the application. These are the salient facts:Ishalldealwithdetailsinthe
course of this order.
Counsel appearing for the respondents have taken several objections to the legal validity of the Enjoining Order andtothe
legal validity of these proceedings. Dr. de Silva contended that the law does not make abreachofanEnjoiningOrdera
contempt of Court and in any event it is not one that the Court of Appeal can takecognizanceof-undertheprovisionsof
Article 105(3) of the Constitution of the Democratic Socialist Republic of Sri Lanka 1978 (hereinafterreferredtoasthe
Constitution). Section 664 of the Civil Procedure Code prevents a District Court from issuing an injunction, commonlycalled
an interim injunction, without prior notice to the opposite party "except when it appears that theobjectofgrantingthe
injunction would be defeated by the delay". However, it is given a discretion to enjoy in the defendant until the hearingof
the application for an interim injunction. Such an order is commonly referred to as an "Enjoining Order". It is notalegal
term used in the Civil Procedure. It is merely a judicial order prohibiting the doing of an act or restraining thedefendant
from doing an act until the Court has had the opportunity ofhearinganddisposingoftheapplicationforaninterim
injunction. Such an order must also conform to the law. Section 662 of the Civil Procedure Code (which wasdeemedneverto
have been repealed vide section 4 of the Law No. 19 of 1977) refers to sectionsoftheCourtsOrdinance(Cap.6).This
corresponds to section 43 of the Administration of JusticeLaw No. 44 of 1973 whichwas operativeattherelevanttime.
The law prevailing at the time empowered a District Court to issue an interim injunction pending the finaldeterminationof
the case. When a defendant is enjoined in terms of the law it is an order which must necessarily be of the nature ofandin
the form of the interim injunction. Such an enjoining order therefore has all the force of an interim injunction and mustbe
obeyed as such. The Enjoining Order (E3) issued in this case which has been issued intermsofparagraphC(i),(ii)and
(iii) of the prayer to the plaint (E1) has such force and effect in law.
The petitioner has invoked the jurisdiction oftheCourtofAppealconferredonitbyArticle105(3)ofthe1978
Constitution whicharticle reads as follows -

"(3) The Supreme Court of the Republic of Sri Lanka and the Court of Appeal of the Republic of SriLankashalleachbea
superior court of record and shall have all the powers of such court including the power to punish forcontemptofitself,
whether committed in the court itself or elsewhere with imprisonment or fine or both as the court may deem fit. The powerof
the Court of Appeal shall include the power to punish for contempt of any other court, tribunal orinstitutionreferredto
in paragraph 1 (a) of this Article whether committed in the presence of such court or elsewhere."
The Supreme Court "being the highest and final Superior Court of Record in the Republic" and theCourtofAppealbeinga
Superior Court of Record with appellate jurisdiction have all the powers of punishing forcontempt,wherevercommittedin
the Island in facie curiae or ex facie curiae. (I N.L.R. 181 at 190). (1) Counselhoweverarguesthatthereisavital
difference between the power to "punish for contempt'" and the power to "punish as for a contempt'". Whereas Article 105(3)
confers the power to punish for contempt section 663 of the Civil Procedure Code states that where an injunction hasissued,
disobedience to it may "be enforced as for a contempt of Court". In the case of the former,sotheargumentgoes,itis
punishment for the offence ofcontempt whereas in the latter case it is mere disobedience that attracts the punishmentthat
is ordinarily meted out for the offence of contempt-there being no contempt in fact or in Law. Counsel citedtheprovisions
of section 792 Civil Procedure Code which refers to.' offences of contempt of Court" and offences declared by thisOrdinance
to be punishable as contempts of Court ? An examinationoftheprovisionsoftheCivilProcedureCodedisclosesthe
following sections which declare certain acts as offences of contempt.
Section 109 - Any person failing to comply withanordertoanswerinterrogatories,orfordiscovery,productionor
inspection is "deemed guilty of the offence of contempt"
Section 137 - Non-compliance with summons without lawful excuse "shall be deemed to be guilty of the offence ofcontemptof
Court and punishable therefore."

These sections create offences of contempt of Court by means of legal fiction. There is also anomnibuscategoryvariously
expressed in the following sections :
Section 140 - Where a party to an action refuses to give evidence or to produce a document the Court may punish him"asfor
a contempt".
Section 294 - Section 295 - Person violating an order not to commit what may be punished"inmannerprovidedbylawfor
punishment of contempt of court".
Section 372 - An officer making a false statement in any affidavit "commits an offence which ispunishableascontemptof
Section 650 - A plaintiff failing to disclose security in his possession may be punished "as for a contempt of court".
Section 656 - Any person making a will fully false statement by affidavit or otherwise may be punished "as for a contemptof
Section 663 - Disobedience of an injunction may be enforced by punishment of the offender "as for a contempt of court".
Section 713 - Failure to attend upon citation may be punished "as for a contempt of court".
Section 717 - Disobedience to a decree "may be punished "as for a contempt of court".
Section 718 - A delinquent in filing inventory or valuation and accounts may be dealt with "as for a contempt of court".
The terms used vary. They are "as for a contempt", asforcontempt"punishableascontempt","asacontempt""fora
contempt" and in one instance "in manner provided for punishment of contempt of court". Counselcontendedthatthesecond
category of sections do not empower the Court to punish for contempt. He cited the case of In re Cader(2).BasnayakeC.J.
in the course of his judgment in that case (vide page 299) observed as follows :-
"They do not empower the Court to punish for contempt but they vest in the court the power to enforce its order bypunishing
as for contempt of court the offences briefly described above".
He was considering the wording of the identical sections. This statement is not strictly correct because section137(which
Basnayake C.J. was considering) and section 109 each creates an offence of contempt of court, and the courtcanpunishthe
offender for contempt of court. While section 372 refers to an "offence" the other sections I have cited do not refer tothe
particular act or acts set out in the section as an "offence" or "offences". However section 792 refers to thiscategoryas
'"offences declared by this Ordinance to be punishable as contempts of Court". (Vide also Section799)Section793states
that the Court shall issue a summons to the accused in form No. 132 in the first schedule. The heading of the Form is -



And it requires him to answer a "charge of contempt committed against the authority" of the court. Similarwordsappearin
the Form of Warrant No. 133. The charge itself refers to "a contempt of Court". The Court must record aconvictioninForm
134 which is also for "having committed contempt of the authority of (this) Court". (Vide Section 797 of the CivilProcedure
Code). The sentence of fine or imprisonment are "for contempt"' under Chapter LXV.Itisthereforeclearthatwhenthe
offender comes to be dealt with under Chapter LXV of the Civil Procedure Code he is charged with the offence ofcontemptof
court and punished for contempt. The act or acts referred to in the section then"constitutetheoffenceofcontemptof
court". (Vide Section 797). Disobedience of an injunction (Section 663) therefore, constitutesanoffenceofcontemptof
court. I have analysed these provisions to show that in any event the distinction sought to be drawnbyCounselisnota
valid one. It arises from a misapprehension of the real meaningofthese provisions.Theseprovisionsareundoubtedly
modelled on the U.K. Law and English Law shown in so far as an inferior court is concerned, contempt of court can arisefrom
two different situations. The jurisdiction of an inferior Court to punish for contempt is confined to such contemptsasare
perpetrated in facie curiae and does not extend to such as those committed out of Court unlessexpressstatutorypoweris
given for that purpose. When such power is given, the offence would be assimilated to contempt proceedings and regarded asa
contempt. But generally speaking the power to punish for contempt for acts committed notinfaciecuriaeofaninferior
tribunal, is given to a superior court. In the U.K., the Queen's Bench Division watchesovertheproceedingsofinferior
courts and is vested with power topreventpersonsinterferingwiththecourseofjusticeinsuchinferiorCourts
(Halsbury's Law of England, 3rd Edn. Vol. VII p. 19. Oswald contempt, 3rd Edn. p. 11).

A careful examination of Basnayake, C.J.'s judgment does not appear to: be at variance with the aboveposition.Herightly
draws attention to the distinction between contempts ex facie curiae and offences punishable as for contempt in thecaseof
inferior tribunals. He recognises the right of the Supreme Court as a superior court of record to punish forcontemptwhere
the order of an inferior court has been defied'. This would be the case of contempt taking place not ex faciecuriae.After
referring to the powers of an inferior court to punish in case of offences declared as contempts, he says :-

"The powers are given to the Court for enforcing its orders and not to affect the power of the Supreme Courttopunishfor
contempt under Section 47 of the Courts Ordinance".
The power given to the Supreme Court under Section 47 was the power to punish for the offence of contempt and not inrespect
of an offence punishable as a contempt. The material part of Section 47 reads -
The Supreme Court ...shall have full power ..... to try in a summary manner any offence of contempt committed againstorin
disrespect of the authority of itself or any offence of contempt committed against or in disrespect of the authorityofany
other court and which such court has no jurisdiction underSection 37 to ...... punish".

Although this section contemplates only the offence ofcontemptBasnayake,C.J.,held.thatthedisobediencetoan
injunction granted by a District Court (which was punishable as a contempt), and falling within Section 663oftheCivil
Procedure Code, was nevertheless a contempt punishable by the Supreme Court. Superior Courts therefore havejurisdictionin
terms of Article 105(3) of the Constitution to deal with this case.
The next contention is that the charges are meaningless and are therefore bad in law. Each charge recited in paragraph3is
that despite the directions given in the Enjoining Order the 1st defendant Company, that is, theGalleFaceHotelCompany
Limited, has failed, refused and neglected to obey and comply with the Enjoining Order. Theactsoffailure,neglectand
refusal are thereafter set out in detail. The charge of contempt is against each individual Director namedineachcharge.
Section 665 of the Civil Procedure Code provides that an injunction directed against a Company is binding on all itsmembers
and officers whose personal action it seeks to restrain. Counsel arguedthatasnoinjunctionhadbeenservedonthe
respondents to restrain their personal actions they could not be bound by the injunction. I donot think this is in anyway
necessary. When an injunction is obtained against a juristic person the parties who must obey it are those in control ofthe
affairs of the juristic person. In this case the injunction must necessarily be honoured primarilyby the Directorsofthe
Company. They are the persons whom the plaintiff sought to bind. There was no requirement inlawthattheymustalsobe
directed. Thesection requires only a direction on the Corporation and then the officers of the Corporationwhosedutyit
is to do or refrain from doing the acts set out in the order are the persons who are automaticallyboundbytheEnjoining
Order. If they fail they are guilty of contempt and they are the persons to be charged. Thechargeshavebeeninelegantly
drafted in that the word "you" has been omittedinthefirstlineofthepenultimateparagraphonthecharge.The
respondents could not have been misled by this omission and no prejudice has been caused to them. All particularsthatthey
needed to know were to be found in Document E1 to E1 5 copies of which' were served with the summons. I therefore rejectthe
contention that the charges are bad in law.

Counsel next contended that the charges could not be maintained as the Enjoining Order hadalreadybeendisobeyedonthe
12th October, and therefore there could not be disobedience to it on the 13th and 16th November generating two newoffences.
It was, Counsel argued, a continuing offence and not a repetition of an offence. Therefore, he states, the 1st respondentis
doubly vexed and the 2nd to 8th respondents cannot in any event be charged for disobedience on the13thand16thNovember
because the Enjoining Order had been disobeyed on the 12th October by the Companyandthe1strespondent.TheEnjoining
Order had not been dissolved and was operative, because the interim injunction issued is, I understand, subject to appealto
the Court of Appeal and therefore not final. The fundamental rule is that an injunction remains operative until dissolvedby
the Court and the duty of obedience to it continues till it is dissolved.UntiltheEnjoiningOrderisdissolvedona
proper application to Court the duty of obedience exists. Any party who disregards it does so at his peril.Everyactdone
in contravention of the Enjoining Order as long as it is operative constitutes a breach of it andthereforeacontemptof
Court. No doubt there may be a series of such acts after the initial disobedience but this is amatterthatmaybetaken
into account in mitigation of sentence. As long as the Enjoining Order exists the party who has obtained itisentitledto
make successive attempts to have it obeyed and obstructions ofeachofsuchattemptsconstitutesanoffence.Tohold
otherwise would in effect be, to hold that the enjoining order ceases to have any force after theinitialdisobedienceand
thereby the law and the Court that issue it will be brought to naught. If the contemnor is doubly vested he has onlyhimself
to blame.

Counsel for the 1st respondent, in dealing with the Enjoining Order, stated it was "not inorder",itwas"impossibleof
obedience", that "two views are possible" and that it was "bad on account of duplicity". He also statedthattheAgreement
was not capable of specific performance. This last argument is not a matter for decision by this Court and I donotpropose
to go into the matters which are not relevant to the main case only. These proceedings are onlyconcernedwithwhetheror
not the Enjoining Order should have been obeyed. At this stage I desire to refer to the plaint filed intheDistrictCourt
upon which the Enjoining Order was obtained. It had annexed to it the Agreement (El A), a copy of the appointment inwriting
of Allan Wade, and copies of certain correspondence between parties. It reproduced verbatim eight clauses' of theagreement.
It referred to the "purported termination" of the services of the said Allan Wade which it states was illegalandalsothe
fact that he had to temporarily vacate the hotel as he apprehended risk to personal health and safety in view of thehostile
attitude of the 1st respondent. It specifically states that the "purported terminationisillegal,unlawfulandagross
violation of the terms of the Agreement. The document produced as the Agreementcontainedtheaddendum.Itistherefore
futile to state that the Court was not aware of the addendum. Clause 6 of the addendum reads as follows :
GFH veto employees. Senior employees approved by DFCC & GFH"
Counsel argued
1. That when the Enjoining Order directed the defendants to give "absolute management and control in terms of the agreement"
it must be read with clause 6.

2. That when Mokaves sought to resume management of the Hotel he could not do so because helackedthepermissionofthe
DFCC and the GFH which was a condition precedent to taking control.

3. That Mokaves could not in any event resume management because he, being a non-national was forbidden bytheLawofSri
Lanka to engage in any work or employment in Sri Lanka without a permit from the proper Governmental authority.

4. That the provisions of section 1.04 and section 4.04 of the agreement had vital blanks andthereforewasimpossibleof
5. That the Bank account stipulated in section 4.04 had never been opened and therefore fundsofthehotelcouldnotbe
depositedin a designated bank.

6. The Enjoining Order is not definite in terms. It calls for interpretation.

At the outset it is necessary to note that reasons 4, 5 and 6 were not reasons given by the 1st to8threspondentsinthe
month of November 1978, in letters E9, E10. They seemtobeanafterthought.WhateverinfirmitiestheAgreementhad,
including blank and lack of a designated Bank, the Agreement was honoured for two and a half yearsandthepetitionerran
the Hotel during that period. In evidence the 1st respondent conceded that it was only After1stOctober,1978,thatis,
after Wade ceased to work in the Hotelthat the GalleFaceHotelCompanytookcontrolthroughtheChairmanandthe

Much use has been sought to be made of the words "absolute management and control in terms of the agreement"indefenceof
the respondents. Dr. Silva quite rightly pointed out that theagreementnowhererefersto"absolutemanagement".But
"management is referred to. expressly in some of the sections of the agreement and it is necessary to examineitindetail
to find out what is meant by the term "management" in the context of the agreement. Under the heading "Recitals ofFact"it
is stated that Regent is willing to render assistance to the owner"inthemanagement,operationandmarketingofthe
Hotel". Section 3.01 provides that Regent shall have absolute control and discretion in the operation of the Hotel andshall
retain control and management of all properties andfundsrelatingtothehotel.UpontakingovertheHotelRegent
covenanted to use the hotel solely for the operation of a de luxe hotel forthepurposeofperforming"allthegeneral
management service of the Hotel'". Regent was empowered, inter alia to enter into service contracts "including employmentof
all personnel on the pay-roll of the Hotel". The owner also authorised Regent, "as part ofthegeneralmanagementofthe
Hotel to settle on terms and conditions a Regent shall deem in the best interest of the Hotel, any and all claims ordemands
arising out of the operation of the Hotel irrespective of whether or not legal action has been instituted".(Section3.03).
Regent was given wide powers in matters of repairs and maintenance, alterations, structural repairs and changes whichpowers
a hotelier should necessarily have for the purpose of providing that high standard of service that goes with adeluxehotel
(Vide Article VI). For the purpose of providing these management services Regent is given "absolute controlanddiscretion"
which includes and extends to among others, "the use of the Hotel for all customary purposes, the charges to be made forand
the terms of admittance to the Hotel for rooms, for commercial space, for privileges forentertainmentandamusement,for
food and beverages, the right to employ, train,discipline,transferandselecttheemployeesoftheHotelandthe
advertising and promotion of the Hotel. -(Section3.01).RegentundertooktooperateandprovideintheHotel"all
facilities and services normally operated or provided directly by operators ofhotelsofcomparableclassandstanding"
(Section 3.03) and the owner covenanted that "Regent shall and may peaceably and quietly manageandoperatetheHotelin
accordance with the terms of (this) Agreement for the entire period stipulated (therein)" (Section 1.03). For good measurea
Restrictive Clause stipulated that the owner's right of entry upon any part of the Hotel for the purpose ofexaminingBooks
and Accounts "or for any other necessary or desirable purpose" shall be done "upon notice" and "withaslittledisturbance
to the business of the Hotel" (Section 7.02) and Galle Face Hotel took on the Trade name of Regent "Galle Face" -Regentof
Colombo" (Section 11.01).

The above analysis indicates that "management" in the Agreement and in the Enjoining Order is not the work of aManagerwho
controls and conducts the day to day affairs of the Hotel. Management here means the provision of expertise in directingand
controlling the running of the business of the Hotel, including policy matters which Hoteliers such asRegentprovide.The
Agreement refers to the aggregate of them as management services. These are services that could berenderedbyajuristic
person. Such a person will find it impossible to do the day to day workofaManager.Theuseofthewords"absolute
management" has little practical consequence. When "absolute control" is given, then management follows and theuseofthe
word "absolute" cannot justify disobedience to the Enjoining Order. The evidence of Mokaves was that managementandcontrol
was in his employer and as area Director and authorised representative of Regenthewasentitledtothemanagementand
control of the Hotel in terms of the Enjoining Order. The evidence of the 1st respondent given incross-examinationinthe
District Court on 3rd November, 1978 indicates that he understood it as such. His statement with regardto,themanagement
of the Hotel after the 1st October, 1978, reveals this. His evidence is as follows:

Q. You were Managing Director of the G.F.H.?

A. Yes. I am.

Q. How often did your Board of Directors meet in an year ?

A. About once in 6 weeks, it all depends, in this year we have met often, about 10 or 12 times in the year.

Q. How often did you have a meeting round about this period ? Did you meet twice or thrice a month ?

A. May be three times during the last month.

Q. After Wade left, who was in sole management and control of the Hotel ?

A: Wade was not in sole control.

Q. My question is, after Wade left who was in sole management and control of the Hotel A. Through its Chairman and
Directors, through me.

Q. So would it be correct to say that you were actually in control ?

A. In the operation of the hotel I was in sole control but there were many things in which I had to consult the Directors.

Q. You were actually the instrument of the Board of Directors in the management and control of the hotel ?

A. Yes

Q. But you were subject to the directions of the Board of Directors, and you were yourself a member of the Management too ?
A. Yes.
Q. So that anything that happened at the G.F. from and after the 1st October 1978 regarding management and controlwasyour
A. Yes.
It is clear that he was merely directing operations on behalf of the Board. He was not working as Manager of the Hotel.

How then did the controversy with regard to MokavesasManagerarise?ByE5of11.10.1978Mokavesinformedthe1st
respondent and 9th respondent that he would be coming on the 12th October to "resume management and control of theHotelby
Regent International Hotels Limited which was unlawfully interrupted." Allan Wade went with him. He had a right to enterthe
Hotel because he was on contract with the Hotel till December that year. The 1st respondent says he asked fortimeanddid
not hand over the Hotel on that occasion. Mokaves says the 1st respondent flatly refused to hand over.ByE8andE8Athe
lawyers for the petitioner informed the respondents that Mokaves would come on the 13th November to resume management ofthe
Hotel. Letters E9 and E10 were delivered to him when he arrived at theHotel on the 13th. By E9 the 8th respondent states-
"If Mr. Mokaves wishes to function as Manager or in any other executive capacity he must have the aboveauthoritiesandof
the Development Finance Corporation of Ceylon (DFCC) - leave alone with G.F.H. Board". He repeats this standinhisletter
E13 of 16.11.78. He seems to have assumed that all the rights claimed by Mokaves on behalf of Regents fell withintheambit
of the Addendum and he was therefore- entitled to take the stand he took. But it appears to me thatthisassumptioncannot
be justified in law, whether or not the Addendum - on the validity or application of which, Imakenopronouncement-is
brought into the picture.
The matter referred to by the respondents appears to us to be subsidiary or collateral- to the actual issuebeforeus.The
matter before us is the limited issue as to whether or not the specific directive of the Enjoining Ordercouldbecomplied
with and not a question as to the feasibility of running the hotel in its total operations and services.Itwillbenoted
that the appointment of staff whether national or non-national, and the necessity to obtainapprovalfortheiremployment
are matters that would arise subsequently after the delivery of control. They arise in the course of management andevenin
this regard the agreement states that the GalleFaceHotelCompanyLimitedisexpectedtogiveitscooperationand
assistance (Section 20.02(1) and (2). Similarly the absence of a designated Bank may not by itself stand in thewayofthe
functioning of the Hotel, as the petitioner is empowered to use income for operating the hotel (Section 5.02). Iftheterms
relating to such subsidiary matters are unworkable or imprecise, this is attributable to imperfections of theAgreementand
it should not be a matter for surprise if the cracks are now beginning to show under pressure. Buttheagreementhasbeen
operated for well nigh two and a half years and this was possible because there had been goodwill and cooperationonboth
sides. During this period, each party had been content with the situation, and has assigned to eachothertheirrespective
share of the rights and obligations. The material before us shows that the petitioner hasbeeningeneralmanagementand
control of the hotel during such period.

The next submission of Counsel was based on the decision in the case of Pounds vs. Ganegama (3) in whichtheSupremeCourt
held that a person in possession of a business upon a claim of right and of the premlses in which it wasruncouldnotbe
deprived of such possession by means of an interim injunction. That was an appeal from an order in proceedingsinitiatedto
dissolve the injunction, in which application, the applicant succeeded. Any application to dissolve an Enjoining Orderwhich
has been issued by a Court must first be made to the Court that issued it. This Court is only concerned with theallegations
of disobedience to an Enjoining Order that still exists and I cannot accede to the request todeclaretheEnjoiningOrder
invalid in law.

One last contention of Dr. de Silva needs consideration. He stated that there is no evidence that there was anydisobedience
to the Enjoining Order on the 13th and 16th November. I do not agree. Apartfrom the evidenceofMokaves,whichhasnot
been contradicted by the evidence of any of the respondents, there is the evidence disclosed by E9, E10 and E13. In E9while
stating that he will obey the Enjoining Order he also states, "there is no objection to his (Mokaves)visitingtheHotel."
In El 3 toohe states "I will obey'", but postpone obedience "a day or two" as he wishes toconsultlawyers.Heprotests
too much. If it was his genuine desire to obey the Enjoining Order the simplest thing for him to do wastogivechargeof
the hotel. This he did not do. The conduct of the1st respondent appears to havebeenoneofrecklessindifference.He
decided that he required legal advice. This he has not received up to the-time he gave evidence in the District Court onthe
3rd November, 1978. He did nothing in the meantime in regard to the Enjoining Order. There was no response from2ndto7th
respondents to the letters E7 and E8. They seem to have ignored their contents. Being the majority in the Board ofDirectors
they had the power to have the Enjoining Order obeyed but they seem to have taken no steps at all towards that end. Itseems
clear to me that the 1st to 8th respondents had no intention whatsoever of obeying the Enjoining Order.

An Enjoining Order is issued for swift and immediate action and like an injunction must be implicitly obeyedandobeyedto
the letter. Gnanamuthu v. Chairman U.C. and U. C. Bandarawala (4). If two views are possible and the Court has takenoneof
them it is not open to a party to say that the other view shouldhavebeenacceptedandthereforerefusetoobeythe
Enjoining Order. He cannot set himself up as a Judge over the orders of Court.InthecaseofRusselv.EastAnglican
Railway Co. (5), the Lord Chancellor stated as follows :-

"My opinion of the result is that it is an established rule of this Court, that it is not open to any party toquestionthe
orders of this Court, or any process issued under the authority of the Court, by disobedience. I know of noactwhichthis
court will do which may not be questioned in a proper form and on a proper applicationbut I think it is notcompetentfor
any one to interfere with the possession of a receiver, to disobey an injunction, ortodisobeyanyotherorderofthe
Court, on the ground that such orders were improvidently made. They must take a proper course toquestionthem butwhile
they exist, they must obey them. I consider the rule to be of such importance to the interests and to thepeaceandsafety
of the public and to the due administration of the justiceofthisCourt,thatisaruleIholdinflexibleonall

If any party is of the opinion that the Enjoining Order was irregularly or wrongly issued it isopentohimtomovethe
Court that issued it to dissolve or vary the Enjoining Order. Till such time, the Enjoining Order. exists, and existstobe
obeyed. Eastern Trust Company v. Mc Kensie Maan & Company Ltd. (6) A.C. 750 P.C.). This is a principle strictlyfollowedas
contemnors in the past have found to their cost. In Hadkinson v. Hadkinson (7). the petitioner who hadremovedachildof
the marriage in defiance of the Court's Order was not heard in appeal because the Court of Appeal declined toentertainthe
appeal. Homer L. J. stated the principle thus :-

"It is the plain and unqualified obligation of every person against, or in respect of whom an order is madebyaCourtof
competent jurisdiction to obey it unless and until that order is discharged. The uncompromising nature of this obligationis
shown by the fact that it extends even to cases where the person affected by an order believes it tobeirregularoreven
void. Lord Cottenham, L.C., said in Chuck v. Cromer (8). "A party, who knows of an order, whether null orvoid,regularor
irregular, cannot be permitted to disobey it. It would be most dangerous to hold that the suitors or their solicitors,could
themselves judge whether an order was null or void whether it was regular or irregular. For thattheyshouldcometothe
Court and not take upon themselves to determine such question. The course of a party knowing of an order whichwasnullor
irregular, and who might be, effected by it, was plain. He should apply to the Court that it might be discharged. As longas
it existed it must not be disobeyed." Such being the nature of this obligation, the consequenceswill,ingeneral,follow
from its breach. The first is that anyone who disobeys an order of the court (and I am not nowconsideringdisobedienceof
orders relating merely to matters of procedure) is in contempt and maybe punished by committal orattachmentorotherwise.
The second is that no application to the court by such a person will be entertained until heis has purgedhimselfofhis

I find myself unable to agree with the order of the Court of Appeal. Ithereforesetasidetheorderofacquittaland
convict the 1st to 8th respondents on the charges laid against each of them. The mode of enforcing an Enjoining Orderisby
committal, I therefore order that the 1st to 8th respondents be committed to jailandbeincarceratedthereuntiltheir
contempt has been purged. In addition I sentence the 1st respondent to pay a fine of Rs. 25,000/- and indefault12months
rigorous imprisonment. I impose a fine of Rs. 2,500/- on each of the 2nd to7thRespondentsandindefaultonemonth's
rigorous imprisonment and fine of Rs. 12,500/- on the 8th respondent and in default6months'rigorousimprisonment.The
default sentence shall commence to run after the contempt has been purged.

ISMAIL, J. - I agree


Order of acquittal set aside

Conviction for contempt entered.

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