Sellayah v. Sabapathy
1967Present: H. N. G. Fernando, C.J.A. W. P. SELLAYAH, Petitioner, and
E. J. SABAPATHY (Labour Officer), Respondent
S. G. 40/67—Application for Revision in M. C. Colombo, 32692/A
Employees' Provident Fund Act, No. 15 of 1958, ss. 34, 37, 46 (1) (k), 46 (1) (o)—Employees' Provident Fund Regulations, 1958—Validity of Regulation 65—Money overpaid to an employee—Failure to refund it after notice—Such failureis not punishable as an offence.
1 (1954) 56 N. L. R. 243.
* (1950) 52 N. L. R. 137.
H. N. G. FERNANDO, C.J.—Sellayah v. Sabapathy
An employee to whom the Employees’ Provident Fund Regulations of 195&is applicable i3 not liable to be prosecuted and punished if he fails, after duenotice, to refund any sum overpaid to him by the Commissioner as money lyingto his credit in the Provident Fund. Paragraph 2 of regulation 65 of theEmployees’ Fund Regulations, in so far as it purports to make him so liable, isultra vires of the powers conferred on the Minister to make regulations.
Application to revise an order of the Magistrate’s Court, Colombo.
O.E. Chitty, Q.C., with A. M. Coomarcisivamy, for the Accused-Petitioner.
S. W. B. Wadugodapitiya, Crown Counsel, for the Complainant-Respondent.
Cur. adv. vult.
May 18, 1967. H. N. G. Fernando, C.J.—
Section 34 of The Employees’ Provident Fund Act, No. 15 of 1958*provides that any person who contravenes any regulation made under theAct is guilty of an offence under the Act. Section 37 provides that a personwho is guilty of an offence under the Act is liable on conviction to a finenot exceeding one thousand rupees or to imprisonment of eitherdescription for a term not exceeding six months or to both such fineand imprisonment.
The accused pleaded guilty to the charge framed against him of failingto comply with the requirements of a notice served on him underregulation 65 of The Employees’ Provident Fund Regulations, 1958*published in a Supplement to the Gazette of October 31, 1958.
In this application in revision Counsel has taken the point of law thatregulation 65 in so far as it has the effect of rendering a person liable toprosecution and punishment for an offence, is ultra vires of the powersconferred on the Minister to make Regulations. Regulation 65 reads asfollows :—
“ (1) Where any sum is paid to any person under a determinationmade under the Act or by virtue of any provision of any regulationmade thereunder and it is subsequently decided that such sum wasnot payable to such person, or where any payment has been made underthe Act or under any regulations made thereunder to any person inerror, then, the Commissioner may by written notice served on suchperson require such person to refund such sum within such time asmay be specified in the notice.
H. N. Q. FERNANDO, C.J.—Sellayah v. Sabapathy
No person on whom a notice under paragraph (1) of thisregulation ha3 been served shall fail to comply with the requirementsof such notice.”
This particular Regulation was made under the power conferred byparagraph (o) of s. 4G (1) of the Act to make regulations :—
“ for treating any sum paid to any person under a determinationmade under this Act or by virtue of any provision of any regulation,which it is subsequently decided was not payable, as properly paid,or for the repayment by him and for the recovery from him of that sum ; ”
In this particular case (according to uncontradicted statements in theaffidavit of the accused) the accused had in November 19G3 been paid asum ot its. 1,17G‘89, which sum had then been determined by the Commis-sioner to be tlie amount lying to the credit of the accused in the IrovioentFund. However, in December, 1935, a notice was served on the accusedcalling upon him to refund a sum of Rs. GGf’81 on the ground that therehad been earlier an over-payment of this latter amount. Having regardto the fact that what is paid out to an employee is a sum determined bythe Administrators of the Fund themselves to be due to the employeeand that the payment is made on cessation of employment, it is alarmingto find that an employee can be called upon after the lapse of two years(or indeed after the lapse of even a much longer period) to repay to theFund moneys which he had been led to believe were hi3 own andexpendable at his pleasure. It is surprising to find that the regulationignores the ordinary law of limitation, and that it fails to take account ofan employee’s capacity to meet a quite unexpected liability. Fortunatelythe conclusion of law which I reach is that a failure to make repaymentwill not in addition render a person liable to a fine and imprisonment.
It is quite usual to find in our Statutes and in subsidiary legislationprovisions which enable a Public Authority to recover in a summarymanner debts due from private citizens to the Government, but it ismost unusual that the failure to pay such a debt can give rise to aprosecution in a criminal Court.
The power given by s. 4G (1) (o) of the Act is to make regulations forthe repayment by a person, and for the recovery from him, of a sum notproperly paid. I have italicized the wrord ' and ’ because it seems tome that in conferring this power the Legislature did have in contem-plation the usual provision which is made in a case w here a sum is due toa Public Authority, viz., provision that the sum must be paid and thatif it is not paid it will be recovered in a specified manner. The usual mannerof recovery is by the production of a Certificate to Court stating theamount due, whereupon the Court wall enforce payment either in the samemanner as a sum due under a decree or in the same manner as a fineimposed by Court.
Abdul Coder v. Weeraman
Had the regulation which was made in this case included, as theLegislature contemplated, not only provision for repayment but alsoprovision for the mode of recovery in case of defaulr, the provision forrecovery would by implication have excluded the possibility of a prose-cution in case of default. The argument, based upon paragraph (2)of the Regulation, that there was a breach punishable by prosecutionwould have been negatived if the Minister had in fact prescribed a modeof recovery. I cannot agree that by omitting to provide a mode ofrecovery it was open to the Minister to secure that default in repaymentwould be punishable as an offence.
I would refer in this context to paragraph (£) of s. 46 (1) of the sameAct, under which Regulations may be made :—
“ in respect of the circumstances in which costs may be awardedby such Tribunal against any party to an appeal made to the Tribunaland the manner of recovery of such costs ; ”
I would hold in regard to paragraph (£) that the intention of the Legis-lature is that if Regulations do authorise the aAvard of costs they mustalso provide a mode of recovery of the costs. The Minister cannot byomitting to provide a mode of recovery render a failure to pay costs amatter for a criminal prosecution. Similarly in a regulation made underparagraph (o) it is obligatory on the Minister to prescribe a mode ofrecovery in the event of non-payment. Paragraph 2 of regulation 65is ultra vires in so far as it purports to render a failure to make the paymenta contravention of a regulation made under the Act and therefore anoffence.
For these reasons I would set aside the conviction and sentence.
Conviction and sentence set aside.
A. W. P. SELLAYAH, Petitioner, and E. E. J. SABAPATHY (Labour Officer), Responde