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Supreme Court of Sri Lanka |
] [Hide Context] 156
J. B. TEXTILES INDUSTRIES LTD.
v.
MINISTER OF FINANCE AND PLANNING
SUPREME COURT.
SAMARAKOON, C. J., WANASUNDERA, J. AND VICTOR PERERA, J.
S. C. APPEAL Nos. 62-65/81-C.A. APPLICATION Nos. 1137-1140/79.
NOVEMBER 19,20,23,24,1981.
Business Undertakings (Acquisition) Act, No. 35 of 1971-Vesting orders made
thereunder for the acquisition of the businesses of two
companies-Appeal to
Minister-Appeal referred to Advisory Board established under statute-Finding of
Board that acquisition not
made bona fid-Refusal of Minister to revoke vesting
order-Whether Hansard admissible to establish course of proceedings in
Legislature-Evidence
Ordinance, sections 57 (4) and 78-Finding that vesting
orders null and void-writs of certiorari and mandamus.
The Business- Undertakings (Acquisition) Act, No. 35 of 1971, provides for the
business undertakings as defined in the said Act
to be acquired by the
Government, one such method of acquisition being by Order referred to as a
primary vesting Order Published
in the Government Gazette. The business Of J. B.
Textile Industries Ltd. and J. a. Fishing Industries Ltd. were so acquired for
the Government by a primary vesting Order dated 6th September, 1977 (P7). There
had also been an earlier primary vesting Order
dated 29th December, 1976 (P2)
which, although published in the Gazette, had not been laid before the National
State Assembly within
sixty days as required by the statute and had therefore
lapsed. The political party which formed the Government at the time P2 was
published was defeated at the polls and at the time vesting Order (P7) was
published a different political party was in power.
Appeals made by the companies were referred to an Advisory Board established
under the provisions of the Act and the Board advised
the Minister that the
vesting of the businesses was unjustified holding that reasons other than
economic reasons had prompted the
earlier Government to issue the vesting Order
P2. The Minister, however, despite a request made by the Companies refused to
revoke
vesting Order P7 and the present applications were accordingly made to
the Court of Appeal.
The two Companies concerned filed applications for writs of certiorari to quash
the vesting Order made by the Minister of Finance
who was the authority
empowered by the Statute to make such Order and also for writs of mandamus
directing the Minister to revoke
the vesting Order. In the Court of Appeal these
applications were consolidated and one judgment delivered which covered all
applications.
In terms of this judgment the two applications for writs of
certiorari were allowed and those for mandamus dismissed. Appeals were
filed in
the Supreme Court by the Minister against the quashing by way of certiorari of
the vesting Orders and by the companies
against the refusal to issue writs of
mandamus. These appeals too, were of consent, consolidated and the judgment
delivered by
the Supreme Court also covered all four appeals.
The Court of Appeal in quashing the vesting Orders had held that the Minister
had in contravention of the rules of natural justice
failed to grant the
appellant a hearing before making the vesting Order which failure vitiated the
vesting Order. The Court, however,
rejected the argument that the vesting Order
was invalid as it was tainted with male fides. It had been alleged that the
first
vesting Order was an act of political
157
victimization in order to satisfy
the private Political purposes of the Member of Parliament for the area and the
subsequent vesting
Order (P7) being in fact a "continuation" of P2 was also
tainted with the same male fides. The petitioners relied, inter alia, on
the
Hansard which contained reports of statements made in Parliament by the then
Prime Minister on 20th October, 1977 while counsel
on behalf of the Minister
argued that Hansard (P9) could not be used in evidence in this way. The Court of
Appeal had upheld this
objection.
Held
(1) The Court of Appeal had erred in holding that Hansard containing statements
made in parliament could not be used by the petitioner
as evidence in support of
their case. Hansard is admissible to prove the course of proceedings in the
Legislature subject to the
qualification that the statement therein must be
accepted in to without question. Accordingly the documents P9 and P1 1 were
admissible
to prove the statements of the Minister of Finance and the Prime
Minister subject to the above qualification.
(2) The objection to Hansard based-on section 78 of the Evidence Ordinance
concerning the mode of proof could not be upheld as these
documents were relied
on by the Companies in the Court of Appeal and although the Minister filed
objections and affidavits he did
not object to any reference being made to a
Hansard nor contradict the whole or any part of their contents. The position
being
that statements made in Parliament cannot be examined in a Court of Law,
the further objection that the document could not be admitted
because the Prime
Minister could not be summoned to Court for the purpose of testing the accuracy
of the statement attributed to
him could also not be sustained.
(3) Accordingly, once these documents become admissible the Vesting Orders P2
and P7 are Clearly linked and P7 was meant to preserve
the Status quo as
established by P2 .
(4) The Advisory Board established under the provisions of this Statue is meant
to be a safeguard, though not a wholly effective
one, against wrong or
capricious vesting of private property by the use of the Statute. It has an
important role to play in the
scheme of the Statute and its finding and advice
must not be lightly treated, it having been intended that an impartial and
independent
body should inquire and advise on the propriety or otherwise of a
Vesting Order. The findings of fact by the Advisory Board established
the
allegation of male fides in regard to the Vesting Order P2 and the Court of
Appeal rightly rejected the documents subsequently
tendered in Court to
establish bona fides. This material was available to the Minister even before
the Advisory Board but it was
not produced or made use of and it would appear
that this was because he himself did not believe in the truthfulness of the
contents
of these documents.
(5) The vesting Order P7 being linked with the Vesting Order P2 which is tainted
by the finding of male fides is therefore null
and void and the writs of
certiorari issued by the Court of Appeal quashing these orders must stand.
(6) In view of the findings in regard to male fides it is not necessary to
review the decision of the Court of Appeal based on the
violation of the rules
of natural justice.
Cases referred to
(1) Church of Scientology v. Johnson Smith, (1972) 1 All E. R. 378; (1971) 3
W.L.R. 434; (1972) 1 Q.B. 522.
(2) Davis v. Johnson, (1978) 1 All E.R. 1132.
158
(3) British Railway Board v.
Pickin, (1974) 1 All E.R. 609; (1974) A.C 765; (1974) 2 W.L.R. 208.
(4) Stockdale v. Hansard, 9 A.D. & E. 114.
(5) Strickland v. Mifsud Bonnici, (1935) A. I. R. (P.C.) 34.
(6) De Zoysa v. Wijesinghe, (1945) 46 N. L. R. 433.
(7) Weerasinghe v. Samarasinghe, (1966) 69 N. L. R. 262.
(8) Schmidt v. Home Office, (1962) 3 All E.R. 795.
(9) Laker Airways Ltd. v. Department of Trade, (1977) 2 All E.R. 182; (1977) 2
W.L.R. 234.
APPEAL from a judgment of the Court of Appeal reported in (1981) 2 Sri L. R.
238.
H. L. de Silva, S. A., with Gomin Dayasri and V. Nagendran, for the petitioner
in 62/81 and 63/81 and for the respondent in 64/81
and 65/81.
K. N. Choksy, S. A., with Ben Eliyathamby, Lakshman de Alwis, A. Soza and Ananda
Kasturiarachchi, for the respondent in 62/81 and
63/81 and for the petitioner in
64/81 and 65/81.
Cur. adv. vult.
December 18,1981.
SAMARAKOON, C. J.
By a primary Vesting Order dated 6.9.1977 (17), the business of Messrs J. B.
Textile Industries Ltd. and the business of Messrs
J. B. Fishing Industries Ltd.
were acquired for the Government under the provisions of the Business
Undertakings (Acquisition)
Act. No. 35 of 1971 by the Minister of Finance
(hereinafter referred to as the Minister). J. B. Textile Industries filed
Application
No. 1137/79 praying for a writ of mandamus directing the Minister to
revoke the Vesting Order, and Application No. 1139/79 praying
for a writ of
certiorari to quash the Minister's Order. Likewise Messrs J. B. Fishing
Industries Ltd. filed Application No. 1138/79
praying for a writ of mandamus
directing the Minister to revoke the Vesting Order, and Application No. 1140/79
praying for a writ
of certiorari to quash the Minister's Order. The Court of
Appeal consolidated the Applications and made one order covering all
Applications. It dismissed the two Applications for writs of mandamus and
allowed the two Applications for writs of certiorari.
The Companies have filed
Appeals No. 62/81 and No. 63/81 against the order refusing the applications for
a writ of mandamus. The
Minister has filed Appeals No. 64/81 and No. 65/81
against the order allowing writs of certiorari. These appeals were by consent
159
of counsel appearing for both
parties consolidated and this Order of mine covers all four appeals. At the
conclusion of the hearing
we made order dismissing all appeals. I now proceed
to give reasons for that order.
The salient facts are these. By primary Vesting Order dated 29.12.76 marked P2
(published in Gazette No. 245/7A of 29.12.1976) made
by the then Acting Minister
of Finance, in terms of the powers vested in him by section 2 (1) (b) read with
section 17 of the Business
Undertakings (Acquisition) Act, No. 35 of 1971
(hereinafter referred to as 'the Act') he vested in the Government the two
businesses
together with their respective movable and immovable property. On
10.1.77 both companies filed appeals with the Minister of Finance
against the
said Vesting Order. In terms of, section 2 (3) of the Act the Vesting Order had
to be laid before the. National State
Assembly within 60 days but this was not
done. The National State Assembly was prorogued on 5.2.77 and was never
reconvened. It
was dissolved on 18.5.77. On 5.7.77 the Companies instituted two
actions in the District Court of Colombo challenging the validity
of the Vesting
Order. Those actions are pending. The political party which formed the
Government in the National State Assembly
was defeated at the polls by a rival
political party and that party formed the Government which took power in July
1977. The Minister
(who was the respondent in all four applications before the
Court of Appeal and who holds the portfolio of Finance) then proceeded
to deal
with this vesting. By an Order dated 5.9.1977 published in Gazette No. 281/3 of
the same date (P6) he revoked Vesting Order
P2. The next day by a Vesting Order
in terms of section 2 (1) (b) of the Act published in Gazette No. 281/6 of
6.9.1977 (P7) he
once again vested in the Government the two businesses together
with their movable and immovable property. The companies appealed
against this
Order in terms of section 7 of the Act. On 4.10.1977 this Vesting Order was laid
before the National State Assembly
together with a motion for its approval. By a
resolution of 20.10.1977 (P9) the National State Assembly approved the vesting.
The
appeals of the companies were referred to the Advisory Board appointed by
the Prime Minister in terms of section 7 (2) of the Act.
That Board after due
inquiry advised the Minister that the acquisition of the businesses was
unjustified. A request made to the
Minister to act on such advice and to revoke
the Vesting Order was not acceded to. Hence these applications and consequent
appeals.
160
The Court of Appeal held that the Minister had, in contravention of rules of natural justice, failed to grant the appellants a hearing before making the Vesting Order, which failure vitiated the Vesting Order. It however rejected the argument that the vesting was invalid as it was tainted with mala fides. The mala fides alleged is the mala fides of the Member of Parliament for Kolonnawa who was also Minister of Trade during the period 1970 to 1977. It was alleged that the first Vesting Order of 29.12.1976 (P2) was an act of political victimisation to satiate the private political purpose of that Member of Parliament. Counsel for the companies argued that the subsequent Vesting Order of 6.9.1977 (P7) made by the Minister in 1977 was in fact a "continuation" (that is the word he used) of P2 and was therefore tainted with the same mala fides. P2 was bad in law because of mala fides, he argued, and therefore P7 was also bad in law because it was a continuation of the mala fide vesting made on P2. To establish this link he relied on a statement made in Parliament by the then Prime Minister on the 20th October, 1977, which, inter alia, gives the reason for the Vesting Order P7. The Hansard containing this statement was produced marked P9. There is no dispute between the parties on the authenticity of the statement. Counsel for the Minister argued that P9 could not be used in evidence and the Court of Appeal agreed with him. The Hansard P9 is a vital document in the consideration of the allegation of mala fides. Ranasinghe J. in his conclusion on the point stated - "if as is clear a Court cannot take into consideration anything said or done in Parliament to aid in the construction of a provision of a Statute passed by Parliament itself still less legitimate would it be for the Court to take into consideration anything so said and done for any other purpose". Ranasinghe J. has referred to three cases. The first is the case of Church of Scientology v. Johnson-Smith (1). The defendant in that case was a Member of Parliament. He was sued by the plaintiff for libel for defamatory remarks concerning the plaintiff made by this defendant during a television interview. The defence was-one of qualified privilege. To defeat this plea the plaintiff sought to establish express malice by reference to Hansard to prove what the defendant had done and said in Parliament. This attempt was disallowed on the rule that "what I is said and done in the House in the course of proceedings there cannot be examined outside Parliament for the purpose of supporting a cause of action even though the cause of action itself arises out of something done outside the House"-Per Brown J. There is no doubt that the use of the passages in Hansard should have made
161
the defendant liable in damages which he would have otherwise avoided. Such use would have been a fetter on the freedom of speech in Parliament besides clinching the claims for damages by what he said or did in the House as a Member of Parliament. Browne, J. added that those paragraphs from Hansard "must involve a suggestion that the defendant was in one way or another acting improperly or with improper motive when he did and said in Parliament the things referred to in the sub-paragraphs". Even in this case certain excerpts from Hansard were in fact permitted to be admitted in evidence and the Court ruled somewhat inconclusively that it could be read simply as evidence of fact, what was in fact said in the House on a particular day by a particular person. The next case referred to by Ranasinghe J. is the case of Davis v. Johnson (2) in which Viscount Dilhorne referred to the well established and well known rule that "Counsel cannot refer to Hansard as an aid to the construction of the Statute". I do not think that principle has any relevance to the question that arises for decision in this case. The next case referred to by Ranasinghe, J. is the case of British Railway Board v. Pickin (3) in which the House of Lords held that a court of law had no power to examine proceedings in Parliament in order to determine whether the passing of an Act had been obtained by means of fraud or irregularity. No such exercise is necessary in the case before us. None of these cases support the conclusion of Ranasinghe J. when he stated that a statement in Hansard could not be used "for any other purpose" besides the use of it to interpret Statutes. This means that the Hansard cannot be used for any purpose whatsoever. I have come to a different conclusion. For the purpose of setting out my view, I will first refer to the legal background and then set out the passages in Hansard (P9) relied on and then deal with the use sought to be made of it. The Business Undertakings (Acquisition) Act is one of the most drastic pieces of legislation that was ever placed on our statute book. It provides for the compulsory acquisition by the Government of any business undertaking together with the property necessary for the undertaking by the mere publication in the Gazette of a primary Vesting Order. The law does not provide any guidelines as to when an acquisition should be permissible, such as the need for a public purpose or even as a sanction for unlawful conduct of the owners. No reason whatsoever need be assigned for an acquisition. When this law was debated in Parliament, the spokesman for the then Government stated that there would be two safeguards against the misuse or abuse of this law. They are first, that Cabinet
162
approval must be given for an
acquisition and, second, that the law has cast a mandatory duty on the Minister
of Finance to have
the primary Vesting Order laid before Parliament for its
approval within a specified period of time thus providing the opportunity
for a
full debate on the proposed acquisition. From this it would be seen that
Parliamentary intervention is a step in the procedure
for acquisition and is an
integral part of the acquisition process. Column 1748 of P9 reports the Minister
as having said thus:
"These acquisitions cannot be allowed to lapse once they are gazetted. The
correct procedure for me is to bring this before
the House and get it approved.
The Court action can take its own course. There is the possibility of an appeal
to the Advisory
Board. I can assure the Hon. Leader of the Opposition that we
will be very fair in this matter. This matter will be considered purely
on the
basis of fair play and justice."
Columns 1749 and 1750 reports the Prime Minister (now the President of the
Republic) as saying:
"May I explain? Jafferjee Brothers had a textile mill in Kolonnawa. The previous
Government took action under the Business
Undertakings (Acquisition) Act to
acquire it. Before that motion was placed before the House and passed Parliament
was dissolved.
The owners went to court. They would have succeeded in their
court proceedings had not our Government renewed that motion. We decided
to
fight it ourselves. Now, this is sanction for the acquisition. Whether the
original acquisition was victimization or not I cannot
say, but our Government
will not support any victimization. We have already released two or three
acquisitions which were made
as a result of political victimization, the
Ceramics Factory in the South and one or two others.
The owners can go before Business Undertakings (Acquisition) Act Advisory Board,
which was created when the Act was brought. As
a result of pressure by the then
Opposition that this Act may be misused, the Prime Minister of the day and Mr.
Felix R. D. Bandaranaike
said that they would set up this Business Undertakings
(Acquisition) Act Advisory Board. I do not Know whether any appeal has gone
before the Board during that period but during our period one appeal has gone
before it and they have allowed it. I think in the
case of Ceylon
163
Silks they
appealed on the ground of victimization. We have not acted on that decision yet.
That Board considered of members appointed
by the previous Government. So they
cannot say that we are in any way tampering with them.
Now, this owner cannot go before this Board unless this motion is passed. It is
open to him to go before the Board and show that
the acquisition was
victimization. It is not our acquisition. We are only following the previous
acquisition. If that Board holds
that it is victimization we will release it.
Otherwise, we do not wish to be the target of attack that we are supporting
capitalists.
We do not intend to do that-not even in regard to capitalists who
were running behind the previous Government and who are now running
behind our
Government. We will be fair to them all. So, to help the owner to go before the
Business Undertakings (Acquisition)
Act Advisory Board, we must pass this motion
first; otherwise everything will be in the air."
Counsel for the Minister first made reference to the provisions of section 78 of
the Evidence Ordinance. This concerns the mode
of proof. Hansard P9, P10 and P11
each state that it is an "Official Report" of "Parliamentary Debates". These
documents and their contents were relied on by the companies. They were pleaded
in the petitions and affidavits filed in each case.
The Minister filed
objections and affidavits in each case. In neither of them did he object to any
reference being made to the
Hansard nor did he contradict the whole or any part
of their contents. I cannot see how he can now ask that they be rejected for
want of proof.
Counsel next submitted that the contents of these Hansards should not be
admitted in evidence because the Prime Minister could not
be summoned to Court
for the purpose of testing the accuracy of the statements attributed to him.
Counsel stated that he could
establish that the statements were mistakenly made
but that he was in no position to demonstrate this without questioning the Prime
Minister in Court as he ran the risk of committing a breach of Privilege of
Parliament. I cannot accede to this argument. He presumes
that the Prime
Minister if summoned and questioned, would admit that he was mistaken. Such a
presumption cannot support his contention.
If he was possessed of facts which
showed that he was mistaken. Such a presumption cannot support his contention.
If he was possessed
of facts which showed that the Prime Minister was mistaken
it is open
164
to him to prove such facts by adducing the evidence upon which he
relied to make the allegation. However it must be borne in mind
that statements
made in Parliament cannot be examined in a Court of Law. "Whatever is done or
said in either House should
not be liable to examination elsewhere"- per
Patteson, J. in Stockdale v. Hansard (4) at 209. This was said of the House of
Parliament in the United Kingdom and it holds good in this country too.
Hansards are admissible to prove the course of proceedings in the Legislature
(section 57 (4) Evidence Ordinance). They are evidence
of what was stated by any
speaker in the Legislature: Strickland v. Mi/sud Bonnici (5) at 35, De Zoysa v.
Wijesinghe (6) at 437,
Weerasinghe v. Samarasinghe (7) at 264. However even this
use of statements is subject to some qualification. One such is that the
statements must be accepted in toto -without question.
The privilege of having debates in Parliament unquestioned is indispensable. "By
consequence whatever is done within the walls
of either Assembly must pass
without question in any other place"-per Denman, C.J. in Stockdale v. Hansard
(4). So it must
pass here. Parliamentary reports have been used in this way in
many reported cases. In Schmidt v. Home Office (8) at 798, a written
answer by
the Home Minister to a Parliamentary question was used to judge the Home
Minister's conduct. In Laker Airways Ltd v.
Department of Trade (9) an
announcement in the House of Commons on Civil Aviation Policy was used for the
purpose of the deciding
the dispute in the case. In an action for defamation the
best, and I believe the only, method of judging whether a report in a newspaper
of parliamentary proceedings is a fair and accurate report of what was said in
Parliament is by examination of the relevant proceedings
in the Hansard. Such
use of Hansard without in anyway committing a breach of privilege is permissible
and necessary in the administration
of justice. The Hansard is the official
publication of Parliament. It is published to keep the public informed of what
takes place
in Parliament. It is neither sacrosant nor untouchable. Comment and
criticism are on a different plane which might give rise to
a breach of
privilege. That aspect does not arise for decision here. I am of the view that
documents P9 and P11 are admissible
to prove statements of the Minister and
Prime Minister subject to the rules limiting their use as hereinbefore stated.
165
P9 contains an important statement made by no less a person than the Prime
Minister of the country, setting out the reasons for the
second vesting of these
enterprises. He states quite categorically that the Vesting Order P7 is being
placed before the House to
deal with a situation that arose during the period
of the previous regime. He states also that the whole exercise is for the
purpose
of giving the owners a right of appeal and for the purpose of avoiding
undue criticism of the Government. Lastly he makes it abundantly
clear that the
acquisition resulting from the Vesting Order P7 is not their acquisition. His
words are "it is not our acquisition.
We are only following the previous
acquisition. If that Board holds that it is victimisation. We will release it."
This links
it to the acquisition on Vesting Order P2. It is therefore manifestly
clear that P7 was meant to preserve the status quo of P2.
It was left to the
Advisory Board to decide whether P2 was victimisation. I have no doubt that the
Government was wedded to the
fact that if the Advisory Board found that mala
fides attached to P2 then such infirmity would fall upon P7 also. I therefore
hold
that P2 must be linked with P7 and that if P2 was tainted with mala fides
such mala fides attaches to P7.
I will now deal with the question of mala fides. In the appeals to the Minister
the companies state that P2 was "instigated
by T. B. Illangaratne, the former
Member of Parliament for Kolonnawa, as an act of political and personal revenge"
against
the management of the Companies. This allegation, though in different
form was repeated in all the petitions and affidavits filed
in the Court of
Appeal. The Companies led evidence before the Advisory Board to support the
allegation of mala fides. It consisted
mainly of the oral evidence of Anura
Weeraratne who was Secretary to the Ministry of Industries and Scientific
Affairs from 1st
March, 1972 to 16th May, 1977, and was therefore personally
concerned in the steps leading to the vesting on P2. The Textile Industry
was a
subject of this Ministry. His evidence shows that the vesting was made at the
request of the said Illangaratne who had pressurised
the Prime Minister and
Minister of Industries, when they showed reluctance to agree to the vesting.
Some of the reasons given by
the said Illangaratne were that "Jafferjees were
politically against him in his electorate and all recruits and all vacancies
were not being filled up from Kolonnawa but people were being brought in from
Batticaloa to fill the vacancies". Weeraratne
also stated that the economic
reasons for Vesting Order were insufficient to justify the take over.
Nevertheless it was
166
done because Illangaratne insisted on it. This evidence was
uncontradicted. In fact the Deputy Solictor General who appeared for
the
Minister at the inquiry, consulting the Attorney- General, who in turn had
consulted the Minister, stated that the Minister
had considered the evidence led
through Weeraratne and that he had no material "to contradict or controvert
material placed
before the Board" up to and including the evidence of Weeraratne.
The Deputy Solicitor General stated he was not possessed
of material to
cross-examine the three witnesses. The Minister did not lead any evidence. In
this state of the case the Board had
no alternative but to hold that reasons
other than economic reasons prompted the Government to issue Vesting Order P2.
The Board
further observed that the reasons given by the then Government do not
justify the take over. In the result the Board advised the
Minister that the
vesting of the businesses was unjustified. It is significant that the vesting in
respect of which the Board advised
the Minister included the vesting on both P2
and P7 although P7 was the only Vesting Order referred to it for advice.
Consequent on this advice of the Board the companies requested the Minister to
revoke the Vesting Order P7 but this the Minister
refused to do and the
companies therefore made these applications which are the subject of this
appeal. The Minister now states
that he is not bound to act upon such advice.
Perhaps he is correct but I do not need to decide that question. The Minister
has
in his pleadings before the Court of Appeal sought to justify the vesting on
P2 (not P7). In paragraph 20 of his objections he states
as follows: -
" 20 . (a) A primary vesting order under section 2 (1) (b) of the Business
Undertakings (Acquisition) Act No. 35 of 1971 had
been made by the respondent's
predecessor in office on 29th December 1976.
(b) The official documents and other material available to the respondent show
that the said business undertaking had been vested
upon a policy and
administrative decision made by his predecessor in office at the request of the
then Minister of Industries and
Scientific Affairs (Hon. T. B. Subasinghe) and
the then Minister of Fisheries (Hon. S. D. R. Jayaratne), in consultation with
the
then Cabinet of Ministers, in furtherance of governmental policy.
(c) The said decision had been made after a consideration by the respondent's
predecessor in office and the aforesaid two
167
Ministers and the then Cabinet of
Ministers of, inter alia, Ministerial Memorandum and Reports of administrative
officials, including
Secretaries to the relevant Ministries.
(d) Upon the respondent assuming office after the last general election in July
1977, the respondent and the relevant Ministers
reviewed and reconsidered
whether or not the vesting of the business undertaking in the State should
continue, and. decided that
it should.
22. The respondent states that he had material upon which to so act, and annexes
hereto true copies of the undernoted documents
which were available to him
amongst other material in the making of the decision not to revoke the primary
vesting order of the
6th September, 1977. This material contradicts the
petitioner's allegation that the first primary vesting order made on 29th
December,
1976, had been made "mala fide and for extraneous reasons and to
achieve certain partisan political objectives of the then
Member of Parliament
for Kolonnawa in which electorate the petitioner's business undertaking was
situated":
(i) Decision of the Cabinet made on 1.12.1976, (marked R. 1)
(ii) Report of E. G. Goonewardena, Secretary, Ministry of Fisheries, dated
7.12.1976, (marked R. 2);
(iii) Memorandum submitted by Hon. S. D. R. Jayaratne, Minister of Fisheries,
and Hon. T. B. Subasinghe, Minister of Industries
and Scientific Affairs, dated
28.12.1 976, (marked R. 3);
(iv) Decision of the Cabinet made on 29.12.1976, (marked R. 4);
(v) Memorandum submitted by Hon. S. D. R. Jayaratne, Minister of Fisheries,
dated 17.2.1977, (marked R. 5);
(vi) Decision of the Cabinet made on 16th March, 1977, (marked R. 6);
(vii) Copy of letter dated 16.8.1977 sent by the respondent to Hon. Wijepala
Mendis, Minister of Textile Industries (marked R.7);
(viii) Reply dated 19.8.1977 received by the respondent, (marked R.8);
168
(ix) Minute dated 19.8.1977 made by the Hon. Minister of Industries, Hon.
Minister of Textile Industries and the Respondent, (marked
R. 9);
(x) Report dated 24.8.1977 submitted by G. A. de Zoysa, Competent Authority
(marked R. 10);
(xi) Report of A. B. Elkaduwa, Secretary, Ministry of Textile Industries dated
14.10.1977 addressed to the Secretary to the Prime
Minister, (marked R. 11);
(xii) Decision of the Cabinet made on 29.3.1978, (marked R. 12);
(xiii) Decision of the Cabinet made on 3.5.1978, (marked R. 13);
(xiv) Memorandum dated 10.5.1978 submitted to the respondent by Hon. Wijepala
Mendis, Minister of Textile Industries, (marked R.
14);
(xv) Decision of the Cabinet made on 10.5.1978 (marked R. 15);
(xvi) Decision of the Cabinet made on 24.5.1978 (marked R. 16)".
This material was available to the Minister even before the Vesting Order P7. On
the 16th August, 1977, the Minister addressed letter
R7 to the Minister of
Textile Industries. In it he draws the attention of the Minister of Textile
Industries to the Joint Memorandum
(133) by the then Minister of Industries and
the then Minister of Fisheries to the Cabinet (pleaded in para 22 of his
objection)
and the decision of the Cabinet to acquire these two businesses. He
requests his colleague to "examine the reasons for the
take over and advise the
Cabinet very early whether a fresh Vesting Order should be made". There seems to
have been a discussion
between the two Ministers subsequently and the Minister
of Textile Industries wrote R8 stating that "it was agreed" that
a fresh Vesting
Order should be made. A joint declaration by the Minister of Textile Industries
and the Minister of Industries
addressed to the Minister Wide R9 of 19.8.77)
informed him that they agreed that "J. B. Textiles should continue under
government
control". (This did not refer to J. B. Fishing Industries Ltd.). This
has been placed before the Cabinet and approved by it
on the same day. Vesting
Order P7 followed. These and other documents referred to in para 22 of the
objections were available to,
and were within the knowledge of, the Minister
before the issue of Vesting
169
Order P7. Now he states that they negatived the plea of mala fides. If that were
so it is passing strange why he did not use them
to refute the allegations made
before the Advisory Board. On the contrary he advised his Counsel that no
material was available
to him to contradict the allegations of the Companies
which specifically included an allegation of mala fides. He either deliberately
kept them away from the Board or he did not at the time believe in the
truthfulness of the contents of those documents. Perhaps
it is the latter. I am
inclined to this view because of the evidence of Weeraratne before the Board
which suggested that the joint
report P3 was merely a cover for the real reason
and the. fact that. the Minister had in his possession and was aware of and even
discussed with his colleagues the documents he. now relies on. Furthermore no
party to a proceeding should be allowed to play fast
and loose in this manner.
The Board is a statutory body meant to be a safeguard, though not a wholly
effective one, against wrong
or capricious vesting of private property by the.
use of. the Statute. It has an important role to play in the scheme of the
Statute
and its findings and its advice must not be lightly treated. The
legislature's intention in establishing this Board is a salutary
one. It-
intended that an impartial and independent body should inquire and advise on
the propriety or otherwise of a Vesting
Order. The findings of fact by the
Board impel one to the conclusion that the documents tendered in. support of the
bona fides
of the vesting on P2 are in fact a cover for the real reason as
stated by Weeraratne. The Court of Appeal has rejected them for
the reason that
they were not produced by the Minister when the first opportunity, presented
itself-that is before the Board -
and therefore they were not subject to
scrutiny by the Companies and the Board. This is an added reason for not
accepting them
now. The material placed before the Court establishes the
allegation of mala fides in the vesting on P2. The vesting on P7, linked
as it
is to P2, is therefore null and void. Courts have always acted to grant redress
in cases such as this (See De Smith's Judicial
Review of Administrative Action"
Edn 4 pages 335-337 and the cases cited therein.) The Writs of Certiorari issued
by the Court
of Appeal must stand. .
A clue to the volte face of the Minister is to be found in Hansard P11 of the
4th January, 1979. In the course of a debate in Parliament
on the Land
Acquisition (Amendment) Bill the Member
170
of Parliament for Kankesanturai queries
why these businesses had not been handed back to the previous owners in spite of
the Board's
finding that the takeover "was an unfair act of political
victimization". The Minister of Irrigation, Power and Highways gave
the reason
thus:
"The Government has to decide as a matter of public policy whether it should
implement the findings of the committee, In this
particular case, we had a
problem. The entire labour union was against the handing over of this particular
business enterprise
back to the former owners. Besides, the Hon Minister
concerned was able to satisfy the Government that this business was better
under
public management than under private management. On that there was a difference
of opinion, I think. As to whether it should
be handed back-or not, ultimately
the Government decided that it was not going to hand it back. But, of course,
the owners would
get compensation in full for the take-over of this business. In
fact, the Government offered to the former owners an opportunity
of
collaboration on the basis of 49 per cent and 51 per cent, which they rejected."
The Minister gives a different reason. In paragraph 21 of his objections he
gives his reasons as follows:
"The said decision not to revoke the said primary vesting order dated 6th
September 1977 was necessitated by reason, inter
alia, of the government's
policy of industrial direction, the co-ordination of the production and supply
of necessary commodities,
furtherance of governmental policy relating to the
manner of utilisation of industrial labour, the maintenance of reasonable price
levels, and in the fulfillment of the public interests."
The two reasons do not tally. I need say no more.
In view of my findings on the allegation of mala fides I do not consider it
necessary to review the decision of the Court of Appeal
based on the allegation
that natural justice had not been done. That matter will remain open.
WANASUNDERA, J. - I agree
VICTOR PERERA , J. - I agree
Appeal dismissed.
] [Hide Context]
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