BANK OF CEYLON, Petitioner, and BOGALA GRAPHITE LTD., Respondent

077-NLR-NLR-V-77-BANK-OF-CEYLON-Petitioner-and-BOGALA-GRAPHITE-LTD.-Respondent.pdf


WAX.QAMP4-YA, J.—Bank of Ceylon v. Bogala Graphite Ltd.
385
1973. Present: G. P. A. Silva, S.P.J., and Walgampaya, J.
BANK OF CEYLON, Petitioner, and BOGALA GRAPHITELTD., Respondent
S. C. 547/71—Application for Revision in D. C. Colombo, 75221/M
Revision—Different connected cases between same parties—Validityof certain Emergency Regulations the basic issue in all the cases—Power of Court to order that one case be laid by pending thedecision of the connected cases—Civil Procedure Code, s. 839—Emergency (Requisitioning of Graphite Mines) Regulations No. 1of 1971, Regulations 3, 4, 7, 9—Public Security Ordinance (Cap.40), as amended by Act No. 8 of 1959, ss. 5, 8, 9—Business Under-takings (Acquisitions) Act, No. 35 of 1971, s. 2.
The Emergency (Requisitioning of Graphite Mines) Regulationswere made by the Governor-General in the exercise of the powersvested in him under Section 5 of the Public Security Ordinance. Onthe directions given by the Competent Authority appointed underthose Regulations the defendant-petitioner (Bank of Ceylon)credited to the account of the Competent Authority the moneysbelonging to the plaintiff-respondent (Bogala Graphite Ltd.).Thereupon the plaintiff instituted the present action to recover theaforesaid moneys. The Bank took up the position that it had actedbona fide and only on the orders of the Competent Authority. Therewere two other connected cases. In all three cases the parties weresubstantially the same and the basic issues were the same, namely,whether the Emergency Regulations in question and the ordersof the Competent Authority based thereon were constitutionallyvalid.
Held, that the Supreme Court should exercise its inherentjurisdiction in revision to direct that the trial of the present caseagainst the defendant-petitioner, the Bank of Ceylon, should bestayed pending the decision of the interlocutory appeals from theorders of the District Court in respect of the connected cases againstthe Competent Authority.
Application to revise an order of the District Court,Colombo.
C. Thiagalingam, with P. A. D. Samarasekera, for thedefendant-petitioner.
C. Ranganathan, with H. L. de Silva, S. C. Crosette-Thambiahand R. Sivarajasingham, for the plaintiff-respondent.
Cur. adv. vult.July 30, 1973. Walgampaya, J.—
This is an application for revision made by the defendant-petitioner in respect of two Orders made by the AdditionalDistrict Judge of Colombo.
The petition and affidavit filed states inter alia—
Various regulations called the Emergency (Requisitioningof Graphite Mines) Regulations were made by the Governor-General in the exercise of the .powers vested in him under Sec. 5
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WAX.Gr AMP AY A, J.—Bank of Ceylon v. Bogala Graphite Ltd.
of the Public Security Ordinance (Chapter 40). On the directionsand orders given by the Competent Authority appointed underthe said regulations the defendant petitioner credited to theaccount of the said Competent Authority monies belonging tothe plaintiff-respondent.
In D. C. Colombo Case No. 75221/M the plaintiff-respondentsought to recover the aforesaid monies. The plaint in this actionstates inter alia that the plaintiff-respondent had earlier filedan action in the D. C. of Colombo against the CompetentAuthority challenging the validity of the said Regulations anddirections and that the action against the Competent Authoritywas pending at the date of this plaint. During the argument inthis appeal it transpired that the case is D. C. 75209/M and theamended plaint is dated 25th January, 1972.
Subsequent to the date of the plaint aforesaid against theCompetent Authority, by Sec. 2 of the Business Undertakings(Acquisition) Act, No. 35 of 1971, the Minister of Finance vestedin the Government with effect from the 5th of January 1972 theBusiness Undertakings of the plaintiff-respondent. Before filinganswer in the D. C. Case 75221 the defendant-petitioner movedcourt to reject the plaint or in the alternative to lay the caseby pending the determination of the action challenging thevalidity of the aforesaid regulations and directions. The orderthereon dismissing the application of the defendant-petitionerhas been appealed from on the 1st of June 1972.
In pursuance of the order of the District Judge referredto in the last paragraph defendant-petitioner filed answer andmoved that this action be laid by and stayed pending,
(c) the decision of this court in respect of the appeal filedon 1st June 1972 by the defendant-petitioner.
(b) the hearing and final determination of cases Nos. 75209,75211, 75212 of the D. C. of Colombo filed by theplaintiff-respondent against the Competent Authority.
By his order dated 28th July 1972 the District Judge refusedthat application.
In this revision application the prayer is—
to call for and examine the record in D. C. Colombo
No. 75221/M,
to quash the orders of the District Judge dated 19th
May 1972 and 28th July 1972.
to direct that proceedings be stayed pending the decision
by this court in the appeal filed by the defendant-petitioner.
WALGAMPAYA, J. -Bank of Ceylon v. Bogala Graphite Ltd.
387
(d) to make order directing that pending the hearing anddetermination of this application no further proceed-ings be had on the footing of the said order dated28th July 1972.
The order of the District Judge dated 19th May 1972 statesinter alia—
“This court has without doubt the inherent power in termsof the provisions of Section 839 of the Civil Procedure Code todirect that a case before it do stand over pending the decisionof a connected case. The appropriate stage at which such a direc-tion should be made however is in my opinion only after thedefendant has filed answer and all the matters on which theparties at variance have been brought out fully and clearly.”
The defendant appellant appealed from that order andprayed—
to set aside and reverse the said order,
to direct the District Court of Colombo either to rejectthe plaint in this case in terms of Section 46 (2) (1) of the CivilProcedure Code (Chapter 101) read with Section 9 of the PublicSecurity Ordinance (Chapter 40) as amended by Section 4 ofthe Public Security (Amendment) Act, No. 8 of 1959, or in thealternative to lay this case by pending the final determination ofD. C. Colombo case 75209/M filed against the CompetentAuthority.
The order of the District Court dated 28th July 1972 states
inter alia “it appears to me in the circumstances of this
case the discretion that is vested in this court should not beexercised to direct that further proceedings in this case do standover pending the decision of the said interlocutory appealand/or the decision of any one of the 3 cases referred to earlier.”
The 3 cases referred to are D. C. Colombo 75209/M, 75211/M,and 75212/M filed by the present plaintiff against the CompetentAuthority. They are referred to in the answer of the defendantpetitioner filed on 19.6.1972. The defendant Bank has also statedin that answer that it at all times acted in good faith in com-pliance with the directions given and orders made under theEmergency Regulations.
The plaint in the action No. 75221/M questions—
the validity of the Emergency Regulations,
appointment of a Competent Authority thereunder,
directions issued by the said Competent Authority to
the Bank of Ceylon.
38S
WALGAMPAYA, J.-—Bank of Ceylon v. Bogota Graphite Ltd.
The position of the defendant is that under Sections 3, 6, 7 and8 of the Public Security Ordinance (Chapter 40) the plaintreferred to is barred by a positive rule of law from canvassingthe legality and correctness of—
The Emergency Regulations,
the appointment of a Competent Authority thereunder,
the directions issued by the said Competent Authority
to the Bank.
In 68 N.L.R. page 361 the question whether the Governor-General had the right to make the regulations under Section 5of the Public Security Ordinance was considered and Sansoni,C.J. held that “ Section 5 of the Public Security Ordinancecertainly purports to vest legislative authority in the Governor-General to make such regulations as appeared to him to benecessary or expedient in the interest of Public Security andthe preservation of public order and the suppression of mutiny,riot or civil commotion or for the maintenance of supplies andservices essential to the life of the community. Two conditionsare laid down by the Ordinance for the exercise of this authorityby the Governor-General. One is ‘ the existence or imminence of astate or public emergency ’ of which the Governor-General is thesole Judge ; and the other is that the Regulations he makesmust be such as appear to him to be necessary or expedient.”
The Emergency (Requisitioning of Graphite Mines) Regula-tions No. 1 of 1971 made by the Governor-General in the exerciseof the powers vested in him under Section 5 of the Public Secu-rity Ordinance (Chapter 40) and the said regulations werepublished in the Ceylon Government Gazette ExtraordinaryNo. 14958/34 dated 17th May, 1971.
Section 3 of those regulations (which were made upon therecommendation of the Prime Minister) states the PrimeMinister may appoint a Competent Authority for the purpose ofthese regulations.
Section 4 empowers the Competent Authority by a notice ofrequisition addressed to a person or persons in possession orcontrol of any graphite mine whether such mine be in operationor not to requisition of such graphite mine.
Section 7 empowers the Competent Authority by the notice ofrequisition issued under paragraph 4 or by a subsequent noticeto direct

that no person who at the time of requisition has in thepossession, custody or control any stocks of graphite alreadymined shall remove or cause or permit to be removed such
WAJLGAMPAYA, J.—Bank oj Ceylon v. Boqala Graphite Ltd.
389
stocks without the permission in writing of the person specifiedin the notice of requisition.

<d) • •
Paragraph 9 of the said regulations states “ it shall be the dutyof the person who is in possession or control of the graphitemine which is requisitioned to make available to the CompetentAuthority or to the person mentioned in the notice of requisitionall books and documents relating to the sale 'and export ofgraphite of that mine.
Section 8 of the Public Security Ordinance reads as follows : —
“ No Emergency Regulation and no order, rule or direction
made or given thereunder shall be called in question in any
Court. ”
Section 2 of the Interpretation (Amendment) Act, No. 18 of1972 (enacted on 11.5.1972) states that “where there appears inany enactment whether passed or made before or after thecommencement of this Ordinance the expression ‘ shall not becalled in question in any court ’”
This section appears to apply to section 8 of the EmergencyRegulations referred to above.
Under Section 9 of the Public Security Ordinance (as amendedby Act 8 of 1959) the defence should be available to the defend-ant Bank to state that it is not liable for acts done by it in goodfaith in obedience to the Emergency Regulations Orders anddirections given thereunder especially because there is no expressaverment of mala fides in the plaint.
The only order asked for is for a stay of proceedings. Thereversal, if any, of the District Judge’s orders is a matter for theappeal pending in this court. The position of the Bank is thatthe plaint discloses no cause of action and is barred by a posi-tive rule of law.
In the present case an important question that comes up forconsideration is the validity of the Emergency Regulations andthe right of the Competent Authority to act in the way it acted.The defendant Bank has merely acted on the directions given bythe Competent Authority and to be asked to defend the validityof such directions is tantamount to defending the acts of a thirdparty.
If it be that the Bank has acted in good faith in acting on thedirections given by the Competent Authority the question that
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De Silva v. Isurupala
must be decided first is the validity of the Emergency Regula-tions, the appointment of the Competent Authority and thedirections given by it.
These 3 matters will come up for decision in the 3 casesagainst the Competent Authority. In all those cases the partiesare the same and the issues are the same.
I consider that it will be appropriate that one of those casesshould be decided first. I agree with Counsel who appeared forthe defendant Bank that multiplicity of actions in reference toa single constitutional issue would be undesirable and that theappropriate action in which this matter could be properly deci-ded would be one against the Competent Authority. It is there-fore desirable that this case should await the decision of anyone of the cases filed against the Competent Authority. Hadthis case been confined to a claim against the Bank of Ceylonwithout any involvement regarding the validity of the saidRegulations the position would have been different.
This is therefore an appropriate case where the court shouldexercise its inherent jurisdiction in revision to direct that thetrial of this case against the defendant petitioner, the Bank ofCeylon, should be stayed pending the decision of theinterlocutory appeals filed against the decisions of the learnedDistrict Judge dated 19.5.1972 and 28.7.1972.
The application in revision is allowed with costs.
G. P. A. Silva, S.P.J.—I agree.
Application allowed.