MADURAPPERUMA AND OTHERS
M. N. JUNAID AND OTHERS
• WADUGODAPITIYA, J. ANDDR. GUNAWARDANA, J.
S.C. APPLICATION NO. 437/96FEBRUARY 06, 1997.
Fundamental Rights – Article 12(1) of the Constitution – Development LotteryTrust – Transfer of officers of the Ministry of Finance to the staff of theDevelopment Lottery Trust – Establishments Code – Release for service -Exercise of option – Status of the Trust – Was the Trust a legal entity?
In 1982 the Development Lottery was established and run as a unit of the Ministryof Finance. The net proceeds of the Lottery were paid to the President’s Fundestablished by Act No. 7 of 1978. On 25.5.93 the Government of Sri Lanka actingby R. Paskaralingam, as Secretary to the Treasury as “settlor” purported toestablish the Development Lottery Trust which was to be Trust to run theDevelopment Lottery for the purpose of raising funds for the President's Fund.
A. Abhayagunawardhana as Deputy Secretary to the Treasury was describedas.the Trustee in the Deed. Both settlor and trustee were defined to includesuccessors in the said office for the time being. The Trustee had power to appointstaff. The Deed also provided for a six member Board of Management and the 1strespondent was the Chairman and 2 to 5 respondents were four of the membersof the said Board. The trustee was empowered to delegate any of his functions,powers and duties to the said Board.
The Trust was not a legal entity. The petitioners who were already public officerscontinued to be public officers even when they purported to be temporarilyreleased to the Trust. They were not therefore exempt from transfer to the Ministryof Finance.
Further since they failed to change their status by a proper exercise of theiroption under the Establishment Code Section 2.5.1. Their status quo continuedand they remained as public officers. The Establishment Code did not permit anyrelease temporary or permanent to the Trust. The Trust cannot be treated asbeing a public corporation or board or analogous thereto.
APPLICATION for relief for alleged violation of fundamental rights.
Elmore Perera for petitioner.
D. P. Kumarasinghe, A.S.G. for respondents.
R. K. W. Goonasekera with J. C. Weliamuna for intervenient-respondents.
'Cur. adv. vult.
March 26, 1997.
The 25 petitioners allege actual and imminent infringements oftheir fundamental rights under Article 12(1) by reason of theirtransfers – some actual, some anticipated – contrary to theEstablishments Code.
In 1982 the Development Lottery was established and run as a unitof the Ministry of Finance. The petitioners had been working in thatunit, as public officers, some from the inception itself. The netproceeds of that Lottery have throughout been paid to thePresident’s Fund established by Act No. 7 of 1978.
The problem that arises in this case resulted from a "Deed of Trust”entered into, on 25.5.93, between the Government of Sri Lanka,acting by R. Paskaralingam, “as Secretary to the Treasury", as“settlor", and H. A. Abhayagunawardhana, “as Deputy Secretary tothe Treasury”, as “trustee”. Both “settlor" and “trustee” were definedto include “successors in the said office for the time being". The 6thand 7th respondents are the present Secretary and Deputy Secretaryto the Treasury.
That Deed purported to establish the "Development Lottery Trust”(“the Trust”), the object of which was to take over and continue theadministration, control and functions of the said Development Lotteryfor the purpose of raising funds for the President’s Fund. The trusteehad, inter alia, the power “to appoint such officers and servants asare considered necessary for the conducting of lotteries and theachievement of the objectives of the Trust”.
That Deed also provided for a six-member “Board ofManagement” of the Trust (“the Board”), and the 1st to 5threspondents are the Chairman and four of the members of thatBoard. The trustee was empowered “to delegate any functions,powers and duties of the office of trustee to the said Board ofManagement”, and it is not disputed that the 7th respondent astrustee did delegate his powers of appointment to the Board. Theservices of all the petitioners were utilised to run the DevelopmentLottery under the Trust, and the question which we have now todecide is whether they are entitled to continue with the Trust, aspermanent employees, or are liable to be transferred or revertedback to the Ministry of Finance.
It is the Establishments Code which provides in chapter V for therelease of public officers to other posts in the public service (section 1),as well as for service outside the public service (section 2).
2. Release for Service outside the Public ServiceAn officer may be released for service outside the PublicService (as for instance in a Public Corporation, only with thesanction of the Appointing Authority and any other authority whoseconcurrence is required by the law under which the Corporation orBoard is constituted.
Every such release requires the concurrence of the Director ofEstablishments as well, to ensure the preservation of pensionrights of a public officer during a period of temporary release to aPublic Corporation and, in the case of permanent release, theconferment of benefits under the Minutes on Pensions in respect ofservices under the Government.
An application for release (Temporary or Permanent) shouldbe made on a form as in specimen given at Appendix 6 by theAppointing Authority of the officer’s substantive post through theSecretary to his Ministry and the Secretary to the Ministry underwhich [comes ?] the Public Corporation to which it is proposed torelease the officer.
2.5 If the officer is released temporarily, the terms of his releasewill be as follows:-2.5.1 The period of release should not exceed 2 years. Before theexpiry of the period of temporary release he should opt either torevert to his former post or (if the Public Corporation desires toretain his services permanently) to be permanently released to thatPublic Corporation.
2.6 If an officer is permanently released for service in a PublicCorporation, the terms and conditions of his release will begoverned by the law under which that Public Corporation isconstituted and by the relevant provisions of the Minutes onPensions.
It is not disputed that until 1993 the petitioners were public officersserving in the public service. Their case is that they were temporarilyreleased (under section 2.1) from 25.5.93 for service in the Trust fortwo years; that the 1st respondent called the petitioners to exercise,on or before 1.9.93, this option to join the Trust on a permanent basison the expiration of the period of temporary release, and that they didso; that on 28.7.94 the Board decided “to issue letters to all membersof the staff who requested that they be absorbed into the permanentcadre and to inform the Director/Combined Services accordingly”;that by letters date 8.8.94, addressed to the Director/CombinedServices through the 1st respondent, they expressed their desire tojoin the staff of the Trust permanently and asked for permanentrelease; that the whole matter was reviewed by the new Boardappointed after the General Elections, and it was found that some ofthe petitioners would not complete 10 years service even by 24.5.95;that the petitioners appealed to the 1 st respondent for a further two-year extension; that the 1st respondent recommended a one-yearextension; and that by letter dated 16.11.95 he informed thepetitioners that Cabinet approval had been obtained for suchextension. That decision was not produced. In the meantime, on
the Board had decided to absorb staff members whowished to join the permanent cadre of the Trust, and on 12.10.95issued fresh option forms, which the petitioners duly completed. Byletter dated 16.10.95, addressed to the Director/Combined Services(the 9th respondent) through the 7th respondent, the 1st respondentrequested the release of 25 employees (including 24 petitioners) forpermanent employment in the Trust; the 7th respondent replied on
requesting some particulars as to their period of service, andthe reasons for recommending their absorption; and this informationwas furnished by the 1st respondent on 16.11.95.
in or about December 1995 the Cabinet decided to establish aDevelopment Lottery Board to replace the Trust. By letters dated
and 28.12.95 the 7th respondent informed the 1strespondent and ten of the petitioners that those ten petitioners weretransferred to the Ministry of Finance with effect from 1.1.96, and thatten other officers were transferred to the Trust; however, thepetitioners were permitted to remain with the Trust. (Those ten officerswere permitted to intervene as intervenient-respondents.) Thereafter,ten of the petitioners received letters dated 9.5.96 purporting totransfer them to the Ministry on 25/5/96 on the expiration of theirperiod of release.
The petitioners’ case is that upon being called upon by the Trust(through the Board) to exercise their option under section 2.5.1,not only did they opt to remain with the Trust, but the Trust alsodecided to retain them in service permanently. Consequently theyceased to be public officers, and became permanent employees ofthe Trust.
Mr. Kumarasinghe, PC, ASG, on behalf of the 1st to 10threspondents contended that the purported exercise by the petitionersof their option, under section 2.5.1, not to revert to the public servicewas not effective to make them permanent employees of the Trust fortwo reasons. First, the exercise of that option by a temporarilyreleased public officer (even if his present employer concurs)becomes effective only if and when the appointing authority of hissubstantive post consents. He submitted that if this Court heldotherwise, that would result in the State losing the services of usefulpublic officers without its consent. Second, the petitioners had notcomplied with the requirements for a permanent release, in that theyhad not used the form prescribed by section 2.3. In that connection,it must be noted that in his affidavit the 7th respondent has pointedout that under the Establishments Code the period of temporaryrelease should not exceed two years, and that there is no provision toextend that period in order to enable employees to earn pensionrights.
Section 2.5.1 permits a temporary release for a period notexceeding two years. An authority which makes a rule is bound by itunless and until duly amended, because legem patere quern ipsefecisti. While the enactment of a rule inconsistent with an existing rulewould operate as an implied amendment, a decision contrary to theexisting rule, even though it is by the authority which made it in thefirst place, is not a valid amendment of that rule, and would inevitablyresult in unequal treatment. Accordingly, the petitioners should haveexercised their option within that period of two years. Sections 2.2and 2.3 specify the manner in which that option should be exercised.If section 2.2 is not observed, benefits under the Minutes on Pensionmay be affected. Section 2.5.1 grants a public officer an option -either to revert to the public service or to become a permanentemployee of his new employer – and for the first alternative, no pre-condition is stipulated; and at first sight it seems that the only pre-condition for the second is the concurrence of his new employer.Expressio unius, exclusio alteris, and so this suggests that theconcurrence of his substantive employer, the State, is unnecessary.However, the context prevents such an interpretation: the requirementin section 2.3, that the application for permanent release should bemade “by the appointing authority of the officer’s substantive post”through the Secretaries to the two Ministries concerned, indicatesthat the option which section 2.5.1 gives an officer is not entirelyunfettered. Here no such application was made, and while the failureto use the prescribed form may not have been fatal by itself, yet herethere has been substantial non-compliance with section 2.2. and 2.3.
Thus at the end of the maximum permissible period of temporaryrelease, the petitioners had not duly exercised their option undersection 2.5.1. Did they continue as public officers, or did theybecome employees of the Trust? Quite apart from the submissionwhich I have to consider in the succeeding part of this judgment, Ihold that since they failed to change their status by a proper exerciseof their option, the status quo continued, and they remained as publicofficers.
However, a more fundamental question was raised byMr. Goonasekera, on behalf of the intervenient-respondents, who
submitted that in ahy event the Establishments,Code did not permitany release, temporary or permanent, to the Trust.
Although section 2 is captioned “Release for service outside thePublic Service”, an examination of its provisions shows that it isapplicable only to service in public corporations and boardsestablished by or under statute. It is true that section 2.1 says "as forinstance in a public corporation”, and thereby suggests that a varietyof other employments is permissible. However that section goes on torefer to concurrence “required by the law under which thecorporation or board is established", and thus shows an intention topermit release to such bodies only (see also sections 2.2, 2.3, 2.5.1and 2.6, and Appendix 6). None of those provisions would beapplicable, for instance, to release for service in the private sector.The context therefore requires me to consider whether the Trust couldbe treated as being a public corporation or board, or analogousthereto.
Learned Counsel for the Petitioners submitted that the Trust was a"public institution” which came within the Constitutional definition of a“public corporation":
"Any corporation, board or other body which was or is establishedby or under any written law other than the Companies Ordinance,with funds or capital wholly or partly provided by the Governmentby way of grant, loan or otherwise."
This includes not only any “other body” but even a bodyestablished under any written law, while sections 2.1 and 2.6 referonly to corporations and boards constituted “by" law, andaccordingly I am of the view that chapter V contemplates release onlyto corporations and boards constituted by statute. One characteristicof such corporations and boards is that they have a legal personality,distinct from the State.
I will assume that the Trust deed created a valid trust, for a publicpurpose. The definition of a trust in our Trusts Ordinance is that it isan obligation annexed to the ownership of property, and arising out ofa confidence reposed in the trustee and in this instance, not in thetrustee in his personal capacity, but nomine officii. Thus the Trustdeed did not create a legal entity, and the trustee was notincorporated under section 114 of the Trusts Ordinance, and henceneither the Trust nor the trustee has legal personality. Further, theTrust was set up by the Government acting through the Secretary tothe Treasury (and his successors in office), and the Trustee was theDeputy Secretary to the Treasury (and his successors in office), andthus cannot be regarded as distinct from the Government.
If the Trustee had recruited persons from outside, they would havebecome his employees, in his capacity as trustee; whether suchpersons became "public officers”, we do not have to decide. I hold,however, that the petitioners who were already public officers, whenthey purported to be temporarily released to the Trust, continued tobe public officers. They were not thereby exempted from transfer tothe Ministry of Finance.
For these reasons the petitioners’ application is dismissed. It is theconduct of the officials of the Trust which induced the petitioners tobelieve that they had a right to permanent release, and compelledthe Intervenient respondents to intervene. In these circumstances wedirect the Trust to pay two sets of costs, of Rs. 5,000 each, one to thepetitioners (although unsuccessful) and other to the Intervenientrespondents.
WADUGODAPITIYA, J. -1 agree.
DR. GUNAWARDANA, J. -1 agree.
– MADURAPPERUMA AND OTHERS v. M. N. JUNAID AND OTHERS