AMERASINGHE v. BOARD OF DIRECTORS, CO-OPERATIVE WHOLESALE ESTABLISHMENT

041-SLLR-SLLR-1998-1-AMERASINGHE-v.-BOARD-OF-DIRECTORS-CO-OPERATIVE-WHOLESALE-ESTABLISHMENT.pdf


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Amerasinghe v. Board of Directors, Co-operative Wholesale
Establishment and Others
367
AMERASINGHE
V.
BOARD OF DIRECTORS, CO-OPERATIVE WHOLESALEESTABLISHMENT AND OTHERS
SUPREME COURTG. P. S. DE SILVA, CJ,
ANANDACOOMARASWAMY, J. ANDGUNASEKERA, J.
S.C. APPLICATION NO. FR. 663/96NOVEMBER 3, 1997
FEBRUARY 12, MARCH 29, APRIL 15. 1998.
Fundamental Rights – Extension of Services – Refusal of the application on theground of adverse observations against the officer – Natural Justice – Right toa due consideration of the application – Article 12 (1) of the Constitution.
The petitioner who had 26 years’ of meritorious service in the Co-operativeWholesale Establishment and who had been its General Manager since 1. 9. 83was refused his second extension of service at the age of 56 years. The Boardof Directors decided against the extension on account of "adverse observations"and "adverse references" made to the petitioner in two reports, namely the reportof the Committee of 9 members of Parliament and the A. L. M. FernandoCommittee. The petitioner was never summoned or questioned by thoseCommittees; nor was he given an opportunity of explaining in respect of whichthe Committees made ‘adverse observations" or "adverse references". He wasnot given any hearing at all on matters which he may well have been in a positionto explain.
Held:
Even though the petitoner cannot claim as of right an extension of servicebeyond 55 years and the extension is a matter of discretion, once he makesan application, he is entitled to have his application properly, duly andfairly considered by the relevant authority.
On the facts and circumstances of the case, the exercise of the discretionwas unfair, arbitrary, devoid of rational basis and violative of Article12 (1) of the Constitution.
Cases referred to:
Cooper v. Wandsworth Board of Works (1863) 14 C. B. (N.S) 180.
Shaughnessy v. United States 345 US 206 (1953).
John v. Rees (1970) Ch. 345 at 402.
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(1998) 1 Sri LR.
Pinnawala v. Sri Lanka Insurance Corporation Ltd. (1997) 3 Sri LR 85.
Dissanayake v. Kaleel (1993) 2 Sri LR 135, 184.
Somipala v. The Board of Directors of the CWE SC Application 694/96 SCMinutes 8 July 1997. – distinguished.
Perera v. The Board of Directors, CWE SC Application 688/96 SC Minutes6 October, 1997. – distinguished.
APPLICATION for relief for infringement of fundamental rights.
S. L Gunasekara with Manohara R. de Silva and W. D. Weeraratne for thepetitioner.
Shibly Azizs, P.C. with S. S. Sahabandu and S. A. C. Sabry for the 1st respondent.S. Fernando S.S.C. with S. Rajaratnam S.C. for 2nd and 3rd respondent.
Cur. adv. vult.
May 4, 1998.
G. P. S. DE SILVA, CJ.
This application relates to the refusal of the 2nd extension of servicesought by the petitioner who was the General Manager of theCo-operative Wholesale Establishment (CWE). He complained that therefusal of the extension of his period of service is violative of thefundamental right guaranteed to him in terms of Article 12 (1) of theConstitution. In his petition he averred that he joined the CWE on1st April, 1970, as an Assistant Accountant; on 1.9.73 he waspromoted to the post of Accountant; he was promoted as SeniorAccountant on 1.9.74 and on 1.1.79 as Chief Internal Auditor. Heassumed office as Finance Manager on 15.7.79 He was appointedto the post of General Manager on 1.9.83, a post which he held untilthe time of the refusal to grant him his 2nd extension of service. Thusit is seen that the petitioner was a career officer of the CWE withabout 26 years' of service. He was a graduate of the University ofCeylon and a fellow of the Chartered Institute of Management ofAccountants, U.K. He reached the age of 55 years on the 6th ofSeptember, 1995. He was granted his 1st extension for a period ofone year from 6.9.95. The 1st extension of his period of service endedon 5.9.96. He had a long period of meritorious service.
On 17.4.96 the then Chairman of the CWE invited the petitionerto apply for his 2nd extension of service in appreciation of the"excellent service" rendered by him (P9). The petitioner submitted hisapplication for the 2nd extension of service on 5.6.96. along with the
SCAmerasinghe v. Board of Directors, Co-operative Wholesale
Establishment and Others (G. P. S. de Silva, CJ)369
recommendation of the Medical Officer and the Acting Chairman ofthe CWE (P10) and (P10A). Despite reminders there was no responseto this application until 2nd September, 1996, when the Chairman ofthe CWE summoned the petitioner to his office at 11.45 a.m.requested him not to insist on his application for an extension ofservice. The Chairman had requested the petitioner to inform him ofhis decision before 2 p.m. the same day. The petitioner by letter dated2nd September, 1996, P11 (c), stated:"… I do not find any reasonwhy I should not ask for an extension or why such extension shouldnot be granted by the Board. In the circumstances. I urge that myapplication be approved/recommended at the Board meeting to beheld at 2.30 p.m. today." On 6.9.96 the petitioner received a letterdated 5.9.96 (P11E) from the Chairman, CWE, stating :
that his application has been forwarded to the Ministryas the Minister is the authority to decide on the questionof extension of service;
that the decision of the Minister has not been receivedas yet;
that the petitioner should hand over the files and all otherpapers and documents, cash, if any, and inventory itemsincluding the car.
Although P11E states that no decision has been arrived at in regardto the petitioner's application for his 2nd extension of service, yetP12 clearly shows that at the Board meeting held on 2.9.96 thepetitioner’s application was considered and refused. It is of the utmostimportance to note that the reason for the refusal of the petitioner'sapplication is set out in P12 and it reads thus: "Application forextension was considered by the Board and in view of the adverseobservations made by the Parliamentary Committee appointed by theHon. Minister of Internal and External Trade, Commerce and Foodand the A. L M. Fernando Committee, the Board regretted its inabilityto recommend the extension of service”.
The Chairman of the CWE produced along with his affidavit thedocument 1R5 which is described as an "addendum to the minutesof the meeting held on 2.9.96". 1R5, however, is dated 16.9.96 andit reads thus: "the Board decided as a matter of general policy notto grant any extension of service after the 55th year and also not
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to recommend such extension of service to the Ministry of Internaland External Trade, Commerce and Food in respect of the employeesof the CWE in regard to whom any adverse reference had been madeeither by the Committee of the Hon. Members of Parliament or bythe A. L. M. Fernando Committee and also by any other Committeeof inquiry appointed in respect of the CWE by the Hon. Minister…. In view of the above decision the Board decided not to recommend… the extension of service of Mr. G. K. J. Amarasinghe (petitioner)”.Thus on a consideration of P12 and 1R5 it is clear that the Boarddecided not to recommend the extension of the period of service ofthe petitioner on account of the “adverse observations" and the “adversereferences” made to the petitioner in the two reports, namely, thereport of the Committee of 9 Members of Parliament and the reportof the Committee headed by Mr. A. L. M. Fernando. However, it isnot disputed that neither the Committee consisting of 9 Members ofParliament nor the A. L. M. Fernando Committee ever summoned thepetitoner as a witness or in any other capacity; he was neverquestioned in regard to any allegation made against him; at no timewas he made aware of any allegation against him; at no stage wasthe petitioner given an opportunity to explain matters in respect ofwhich the Committee made "adverse observations" or "adversereferences". In short he was given no hearing at all on matters whichhe may well have been in a position to explain.
While it is true, and contended for by Mr. Aziz, counsel for the1st respondent, that the petitioner cannot claim as of right an extensionof service beyond the 55th year, yet, in my view, once he makesan application he is entitled to have his application properly, duly andfairly considered by the relevant authority. Extension of service is nodoubt a matter which falls within the discretion of the authority concerned,yet the discretion must be exercised reasonably, fairly and onlegitimate grounds. On a consideration of the totality of thematerial on record, the conclusion is irresistible that the refusal of thepetitioner's application for an extension of his period of service (onthe basis of "adverse observations” and "adverse references” madeby the two Committees of Inquiry) was in violation of the audi alterampartem rule. It was submitted by Mr. Aziz that the audi alteram partemrule would have applied only if disciplinary proceedings were takenagainst the petitioner and the refusal of his extension of the periodof service was based on the findings reached against him at suchdisciplinary proceedings. With this submission I do not agree. In the
SC Amerasinghe v. Board of Directors. Co-operative Wholesale
Establishment and Others (G. P. S. de Silva, CJ)371
words of Willes, J. in Cooper v. Wandsworth Board of Works'1* .. the rule is of universal application, and founded on the plainestprinciples of justice". Again, as observed by Jackson, J. in Shaughnessyv. United States<*>. “Procedural fairness and regularity are of theindispensable essence of liberty . . Megarry, J. in John v. Reesat 402 stated. “As everybody who has anything to do with the lawwell knows, the path of the law is strewn with examples of openand shut cases which, somehow, were not; of unanswerable chargeswhich, in the event, were completely answered; of inexplicable conductwhich was fully explained. . . ".
Mr. Aziz emphasised that the question of granting or refusing anextension of service is entirely a matter that falls within the discretionof the Board and the Minister. But what is relevant and important inthe facts and circumstances of the present case is that the discretionhas not been fairly, properly and duly exercised. The petitioner havingbeen denied altogether a hearing before the Committees of Inquiry,
I hold that the exercise of the discretion by the authorities was unfair,arbitrary, devoid of a rational basis, and was violative of Article 12(1) (Pinnawela v. The Sri Lanka Insurance Corporation Ltd. andothers)<*>. As observed by Fernando, J. in Dissanayake v. KaleeP5* at184, “An expansive rather than a restrictive interpretation of theprotection afforded by the principles of natural justice is demandedby the equality provisions in Article 12 of the Constitution; fairnesslies at the root of equality and equal protection".
Mr. Aziz relied on the case of Somipala v. The Board of Directorsof the CWB6>- This decision was followed in Perera v. The Boardof Directors, CWE<7). The petitioners in both these fundamental rightsapplications were officers of the CWE and their applications for thesecond extension of service were refused by the Board at its meeting. held on 2.9.96. While the facts are the same as in the case beforeus, yet the point considered in the instant case, namely, the total denialof a hearing and the consequent arbitrary exercise of the discretion,was not raised in those two applications. I am, therefore, of the opinionthat the ruling in the earlier applications can be clearly distinguishedfrom the present case.
For these reasons I hold that the petitioner is entitled to adeclaration that the fundamental right guaranteed to him in terms of
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Article 12 (1) has been infringed. I direct the first respondent (C.W.E)to pay the petitioner a sum of Rs. 80,000/- (eighty thousand) ascompensation and a sum of Rs. 20,000/- (twenty thousand) as costs.
ANANDACOOMARASWAMY, J. – I agree.
GUNASEKERA, J. – I agree.
Relief granted.