PTXLTjE J.—Thabrew v. Yatawara
1952Present: Pulle J.
THABREW, Petitioner, and S. B. YATAWARA (Acting Registrar,Go-operative Societies), Respondent
S. C. 649—Application for a Writ of Certiorari
Co-operative Societies (Amendment) Act, No. SI of 1949—Section 50A —An officer'sliability to repay money—Bis right to oral hearing.
By the last part of sub-section 1 of section 50a of the Co-operative Societies(Amendment) Act : “ Before making any such order against any person,the Registrar shall give that person an opportunity of, being heard and ofshowing cause why such order should not be made.”
Held, that the person against whom the order is made is entitled to an oralhearing. Where the Registrar fails to grant such oral hearing, he acts inexcess of his jurisdiction and becomes liable to a writ of certiorari.
A PPLICATION for a -writ of certiorari.
H. V. Perera, Q.C., with Sir Ukioatte Jayasundere, Q.C., and H. W.Jayewardene, for the petitioner.
Jansze, Crown Counsel, for the 1st respondent.
B. S. B. Coomaraswamy, for the 2nd respondent.
Cv/r. adv. vult.
July 17, 1952. Pulle J.—
The petitioner who was during the period 3rd April, 1948, to 7thAugust, 1951, the President of a Co-operative Society called the Alut-gama Korales Co-operative Stores Union, Ltd., asks "for a writ of certiorarito quash an order dated the 7th December, 1951, made under section50a of the Co-operative Societies (Amendment) Act, No. 21 of 1949.This order requires the petitioner to pay to the Society referred to abovethe sum of Rs. 25,740 • 88 with interest. The grounds urged by thepetitioner are that he was not given an opportunity of being heard beforethe order was made and that the circumstances in which it was madeamounted to a violation of natural justice.
The arguments adduced on behalf of the petitioner centre round theprovisions of section 50a which came into operation with the amendingAct of 1949. Under sub-section 1 of section 50a the Registrar of Co-operative Societies is empowered to examine into the conduct of anypresent or past officer of a society and to make order requiring him torepay such sum of money as it appears to be due from such officer tothe Society. There is apparently no limit to the sum which an officermay be ordered to repay. The last part of the sub-section provides,“ Before making any such order against any person, the Registrarshall give that person an opportunity of being heard and of showingcause why such order should not be made.”
PXJXjLE J.—'Fhabrew v. Y’atawara
CJpou. an order being made it is competent foT the society under tbeprovisions of sub-section 2 to have the amount recovered as though itwere a fine imposed by a sentence of a Magistrate. Failure to pay orproduce the money alleged to be due after an audit under section 17or after an inquiry under section 35 exposes the officer to a prosecutionfor criminal breach of trust in tbe same way as a public servant whocommits a breach of section 392a of the Penal Code—vide section 50b.
It is, therefore, manifest that having regard to the drastic consequencesof an order made under section 50a ’the procedural steps leading tothe making of the order must be strictly complied with.
The history of this case commences with a notice dated 31st January,1951, under the hand of the Registrar, Co-operative Societies, addressedto the petitioner informing him that according to the books of accountsof the Society a sum of Rs. 25,740-88 was due from him to the Society.The petitioner was required to shew cause, if any, why an order shouldnot be made under section 50a for the payment of the said sum. Aprotracted correspondence then ensued between the petitioner and theRegistrar of the Co-operative Societies which terminated in the order-dated 7th December, 1951, made under section 50a which requiredthe petitioner to pay on or before the 15th January, 1952, the sum ofRs. 25,740-88.
From the outset the petitioner requested the Registrar to state thegrounds on which he sought to be made liable. If the position takenup was that the petitioner had from time to time dishonestly convertedto his use monies which came into his hands, it ought to have beencomparatively easy to prepare a statement of the various sums aggre-gating to Rs. 25,740" 88 showing against each sum the date on which itreached the hands of the petitioner. On the 26th April, 1951, theRegistrar sent to the petitioner the balance sheet of the Society accord-ing to which there was a shortage of cash amounting to Rs. 30,212-30.It is obvious that this single item hi the balance sheet could not assistthe petitioner in the slightest degree to formulate a defence to the orderwhich was proposed to be made against him. Undoubtedly therewere offers to the petitioner that facilities would be provided for anexamination of the accounts, but they were almost valueless, as he wasinformed that at the examination he could not have the assistance ofeven an accountant. Up to July, 1951, the Registrar could not formu-late anything more definite than that, “ according to the informationavailable” the petitioner was “responsible for certain monies”. Inthe same month the petitioner’s Proctor wrote to the Registrar, “ Furtherto the correspondence on the above subject and my Ghent’s interview-with your'Additional Assistant Registrar on 12.7.51 at RuanwellaResthouse, I am instructed to state that the basis of your claim againstmy client remains as obscure as before”. The obscurity persisted, inspite of further correspondence, and w'as partially lifted when by hisletter of the 6th November, 1951, the Registrar informed the petitionerthat the amount claimed was the difference between the cash receivedby him and the amount ccounted for by him. It ended with the words,“If you have anything further to state you will have to do so by the
PtTLLE J.—Thabrew v. Yaiawara
15fch instant the date given in my last letter To this a prompt replywas sent in which the petitioner stated that he had cause to show againstthe proposed order and asked for “ an opportunity of being heard interms of section 50a The Registrar did not reply but proceededto make the order the validity of which is now attacked.
In my opinion when the petitioner made the request to be heard hewas entitled to a hearing before the order was made against him. Thesection makes it clear that it is not sufficient that the officer of a Societyis given an opportunity of showing cause. In the context under dis-cussion “ hearing ”, in my opinion, must be an oral hearing by theRegistrar. The officer may waive his right or he may not avail himselfof the opportunity, in which event he could not be heard to complainthat he was not heard but, if he insists on a hearing, it must be granted.The view I have taken is supported by the judgment of Cozens-Hardy,M.R., in James v. Institute of Chartered Accountants 1 where the words“ the member having first had an opportunity of being heard ” had tobe interpreted. The Master of Rolls said, “ Those words undoubtedlymean this—that if the member is, as I see some members are, at Johannes-burg, a meeting dealing with the contemplated exclusion of the membermust be held at such a date as would give the member a reasonableopportunity of being present there after the receipt of the notice bybim ”. In the case of The King v. Tribunal of Appeal under the HousingAct, 1919, 2 the words that fell to be construed were contained in a ruleof procedure made by the Minister of Health under the Housing (Addi-tional Powers) Act, 1919. That rule reads as follows :
“ If, after considering the notice of appeal and the statement ofthe local authority in reply and any further particulars which mayhave been furnished by either party, the Appeal Tribunal are of opinionthat the case is of such a nature that it can properly be determinedwithout a hearing, they may dispense with a hearing, and may deter-mine the appeal summarily.”
“ Subject as aforesaid the Appeal Tribunal shall fix a date for thehearing of the appeal.”
The Court held that the meaning of the rule was that the Tribunal ofAppeal might dispense with an oral hearing, not that they mightdispense with a hearing of any kind.
In holding that the petitioner was under section 50a entitled to anoral hearing I do not feel that I am placing a strained construction onthe section. The failure of the Registrar to grant a hearing vitiatedthe order he made. It was in excess of his jurisdiction. The rulenisi for certiorari is made absolute with costs.
Rule made absolute.
1 (1908) 98 Law Times Reports 225.* (1920) 3 K.. B. 334.
THABREW Petitioner ,and S.B. YATAWARA (Acting Registrar Co-operative Societies)
PTXLTjE J.—Thabrew v. Yatawara