H. N. G. FERNANDO, S.P.J.—Ibrahim v. Government Agent, Vavuniya 217
1966 Present: H. N. G. Fernando, S.P.J., Sri Skanda Rajah, J., andG. P. A. Silva, J.M. IBRAHIM and another, Petitioners, and THE GOVERN-MENT AGENT, VAVUNIYA (Licensing Authority appointedunder the Licensing of Traders Act), Respondent
S.C. 77/64—In the matter of an Application for a Writ of Certiorariand/or a Writ of Prohibition
Licensing of Traders Act, No. 62 of 1961—Section 5 (1) (a) (d)—Conferment of judicialpower on licensing authority—Invalidity—Control of Prices Act, No. 29 of 1950—Contravention of Price Control Regulation—Effect of a" punitive order ”—Licensing of Traders Regulations of 1961, Regulation 8 (6)—Constitutional law—Certiorari.
The provisions of the Licensing of Traders Act No. 62 of 1961 are ultra viresin so far as they empower a licensing authority to determine whether a traderhas contravened the Control of Prices Act, No. 29 of 1950, or any LicensingRegulation prohibiting contraventions of the Control of Prices Act.
Where a licensing authority, purporting to act under the provisions of section6 of the Licensing of Traders Act, made a “ punitive order ” requiring a firm oftraders to pay to the Consolidated Fund a sum of Rs. 5,000 for selling a poundof Bombay onions at a price in excess of the maximum price prescribed underthe Control of Prices Act—
Held, that the punitive order was made in respect of an offence which, beinga contravention of the Control of Prices Act, was triable and punishable in theordinary course by a Magistrate even prior to the date when the Ceylon (Con-stitution) Order in Council came into operation. In authorising the licensingauthority to order the payment of money to the Consolidated Fund in thecircumstances of the present case, Parliament conferred judicial power on thelicensing authority. The conferment of such power on an authority other thana Court was in conflict with the provisions of the Constitution in so far as itconstituted an usurpation and infringement of the separate power of theJudicature.
PPLICATION for a writ of certiorari.
S. Nadesan, Q.C. with A. C. Nadarajah and M. D. Jesuratnam, for thePetitioners.
L. de Silva, Crown Counsel, for the Respondent.
Cur. adv. vult.
July 22,1966. H. N. G. Febnando, S.P.J.—
This application is for a Writ of Certiorari quashing an order madeagainst the Petitioners in terms of section 5 of the Licensing of TradersAct, No. 62 of 1961.
2—H 2012 (2/67)
218 H. N. G. FERNANDO, S.P.J.—Ibrahim v. Government Agent, Vavuniya
The Act, according to the long title thereof, was enacted to make pro-vision for the licensing of traders, by ensuring the maintenance of businessstandards and morality, for enabling the maintenance of fair and stableprices in essential consumer commodities, and for connected matters.The Act •first provides for the introduction of a licensing system for suchclass or classes of traders as may be specified by the Minister. Power isthen taken to make regulations as to the grant of lioences and furnishingof stock returns and other statements and declarations by licensedtraders.
Section 5 of the Act enables a licensing authority to make what istermed a “ punitive order ” suspending or cancelling the licence issued toa trader, and requiring the trader to pay to the general revenue, a sumnot exceeding Rs. 5,000. For present purposes, it suffices to refer to twoof the four grounds upon which such an order may be made :—
“ (o) If the authority by whom a licence has been issued to anytrader in any article is satisfied that such trader has contravened anyof the provisions of this Act or of any regulations made thereunder,or
(d) if such authority is satisfied on information supplied by anymember of the public that such trader has acted or is acting in contra-vention of any provision of this Act, the Control of Prices Act, No. 29of 1950, or the Food Control Act, No. 25 of 1950”
Certain regulations referred to as the Licensing of Traders (1) Regula-tions were published in a Gazette of 10th August, 1961. Regulation 8 (6)provides that a licensed trader shall not sell articles specified in theSchedule of the Regulations at a price higher than the maximum pricefixed by Order under the Control of Prices Act, 1950.
The Petitioners are a firm of traders licensed under the Act by theGovernment Agent, Vavuniya. On 24th January, 1964 the Petitionerswere informed by the Government Agent that they had sold a pound ofBombay onions at 60 cts. a pound, when the controlled price was 35 cts.,and have committed an offence in breach of Regulation 8(6? 6) of theRegulations, and that this offence had been reported to the LicensingAuthority by a Food and Price Control Inspector. The Petitioners wererequested to show cause why they should not be punished under theRegulations.
The Petitioners thereupon wrote to the licensing authority offeringtheir explanation, but this was apparently not accepted. On 19thFebruary, 1964 the Petitioners were informed that they must pay a fineof Rs. 5,000 to the Consolidated Fund.
The ground upon which we are invited to quash this Order is that inauthorising the licensing authority to order the payment of money to theConsolidated Fund in the circumstances of this case, Parliament has con-ferred judicial power on the licensing authority, and that the exercise of
H. N. G. FERNANDO, S.P.J.—Ibrahim v. Government Agent, Vaouniya 219
such power conflicts with the provisions of the Constitution. The prin-ciple relied on is that declared in the case of Liyanage and othersl,to the eflect that “ there exists a separate power in the judicaturewhich, under the Constitution as it stands, cannot be usurped or infringedby the executive or the Legislature”, which principle is based on theconsideration (among others) that “ the Constitution’s silence as tothe vesting of judicial power is consistent with its remaining, whereit had lain for more than a century, in' the hands of the judicature”.
It will be seen that the act of the Petitioners which provoked themaking against them of this punitive order is that they sold an article ata price in excess of the maximum price prescribed under the Control ofPrices Act, or in other words, that they committed an offence under thatAct which is triable and punishable in the ordinary course by amagistrate. Indeed, paragraph (d) of section 5 of the Act which I havereproduced above specifically refers to a contravention of that Act.Even Regulation 8 (6) of the Licensing of Traders Regulations is an otioseprovision merely reminding traders of their obligation to comply withPrice Control Orders. Price Control is not a new invention of Parliament.Statutory control of prices and statutory provision for the trial andpunishment by the judicature of contraventions of Price Control Orders,existed well before the Constitution came into operation. Moreover, thetrial and punishment of offences of the nature of such contraventions hasalways, under our law, been committed to the judicature. In purportingto empower some authority other than a court, to punish such contra-ventions by the infliction of a penalty which is nothing more nor less thana fine, the Licensing of Traders Act constitutes in the language of thePrivy Council, an usurpation and infringement of the separate power ofthe judicature.
Paragraph (a) of section 5 (1) of the Act empowers the licensingauthority to make a punitive Order for a contravention of Regulationsmade under the Act. The Order actually made in this case purports tohave been in pursuance of such Regulations. But as I have alreadystated the alleged contravention in this case was in fact a contraventionof a Price Control Order, and it constituted also a contravention of theRegulations only for that reason. If it is not lawful for a licensingauthority to try and determine and punish a contravention of a PriceControl Order, the method of authorising that authority to inflict thepunishment on the ground that the Licensing Regulation mentioned thesame contravention, is the method of doing indirectly that which youcannot do directly.
In the judgment which is being concurrently delivered in the case ofXavier v. S. N. B. WijeJcoon and others (application No. 263/65J2, referenceis made to the imposition of penaltiess under Revenue Statutes andsimilar cases, where the penalties have (in the language of the Americanjudgments), the remedial character of sanctions. In some Americandecisions stress is laid on the fact that the object of the penalty is to1 (1965) 68 N. L. B. 265.• (1966) 69 JV. L. B. 197.
Attorney-General v. Sanoon
reimburse the revenue for extra administrative expenditure incurred bythe State on account of false tax returns, false import declarations, etc.But the penalty which has been imposed in the present case is not of sucha character. Having regard to the objects of the Licensing of TradersAct as stated in its long title, the imposition of this penalty cannot beregarded as part of a composite legislative scheme to further thoseobjects. This penalty has the same effect, whether as punitive ordeterrent, as would a fine inflicted by a court for an offence under theControl of Prices Act.
For these reasons I hold that the provisions of the Licensing of TradersAct are ultra vires in so far as they empower a licensing authority todetermine whether a trader has contravened the Control of Prices Act, orany Licensing Regulation prohibiting contraventions of the Control ofPrices Act.
The Order of the licensing authority is quashed. It is unnecessary toorder the further relief prayed for by the Petitioners, but they will beentitled to costs fixed at Rs. 500.
Sri Skanda Rajah, J.—I agree.
"G. P. A. Silva, J.—I agree.
D. M. IBRAHIM and another, Petitioners, and THE GOVERNMENT AGENT, VAVUNIYA (Lic