D. L. JAYAWARDENE, Petitioner, and V. P. SILVA (Assistant Collector of Customs),

009-NLR-NLR-V-72-D.-L.-JAYAWARDENE-Petitioner-and-V.-P.-SILVA-Assistant-Collector-of-Customs.pdf


Jay a war dene. v. Silva
25.
Present: H. K. G. Fernando, C.J., Samerawiekrame, S.tand Weeramantry, J.D. L. JAYAWARDENE, Petitioner, and V. P. SILVA (AssistantCollector of Customs), and 2 others, Respondents
S. C. 532/CS—In the matter of an Application for a Mandatein the nature of a Writ of Certiorari
O as toms Ordinance—Export of desiccated coconut—Export licence issued by Manager ofCeylon Coconut Board—Specification of Halifax as port of destination—Shipments landed at port of New York—Forfeiture under s. 130 of CustomsOrdinance for exporting restricted goods—Whether Certiorari lies in respect ofsuch forfeiture—-Scope of audi nlt-crnm partem principle—Whether . theforfeiture vas valid—Customs Ordinance [Cap. 255), ss. 7, 8, 0, 12, 33, 43,44. 47, 50, 58, 65, 75, 125, 120 to 133, 142, 144, 145, 151, Schedule B—Coconut Products Ordinance (Cap. ICO), as amended by Act No. 20 of 1962,ss. 18, 20, 20A, 20B, 30, 31 arid Regulations 7, 11, 14, 17 of AmendingRegulations of 1903.
•A
In March 1968 a Company, of which tho petitioner was a Director, madeapplications to the Principal Collector of Customs under section '58 of theCustoms Ordinance for permission to ship certain quantities of desiccatedcoconut to Halifax in Canada. Although tho applications and the ship’smanifesto specified Halifax as tho port of destination, the three shipments ofdesiccated coconut were in fact landed at tho port of New York in tho UnitedStates of America. Tho Collector took the view that the exportation of theseconsignments to New York, instead of to Halifax, was contrary to a restrictionimposed by the Regulations made under the Coconut Products Ordinance. Hetherefore called upon the Directors and the Oflioe Manager of tho Company toshow cause why an order of forfeiture under section 130 of the Customs Ordin-ance, read with the Coconut Products Ordinance, should not bo made. Afteran inquiry was held the Collector elected, in terms of section 130 of .theCustoms Ordinance, to impose a forfeiture of threo time3 the value of thegoods in question, amounting to a total of Rs. 5,010,504. The position of theCollector was that the exportation of tho consignments of desiccated coconutwas in contravention of section 12 of the Cush nn Ordinance, read with thelast paragraph of Schedule B to that Ordinance, and punishable undersection 130.
Tho petitioner sought, in the present application, to havo tho order of theCollector quashed by way of Certiorari. Separate applications for similarwrits were made by the two other Directors end the Office Manager of theCompany.
Held, (i) that section 130 of the Customs Ordinance, so far as was relevantto the present application, should be stated as follows “ Every personwho shall be concerned in exporting any goods tho exportation of whichis restricted contrary to such restriction shall forfeit either treble the valueof tho goods, or be liable to a penalty of Rs. 1,000, at the election of theCollector of Customs.” The forfeiture under this Section is incurred at thomoment a prohibited or restricted exportation takes place. Tho function,and even tho duty, of the Collector is only to make an election as betweenthe two specified amounts of the incurred forfeiture.
LXXII—2 & 3
1*J 4762—2.255 (7/69)
26
JUDGMENT OF THE COURT—Jayatvardene v. Silva
(ii) that a Writ of Certiorari docs not lio to quash an election mado by thoCollector under section 130 of tho Customs Ordinance. Ccr.i.rari does not lioagainst a person unless lie has legal authority to determino a question affectingtho rights of subjects and, at tho snmo timo, has tho duty to act judicially whenhe determines such question. Tho existence of a duty to net judicially is notmade manifest in section 130 and in connected provisions of tho CustomsOrdinance. At tho highest tho Collector’s election may, in a provisionalmanner and to a limited extent, affect tho “ right ” of a subject; but thocircumstances in which tho election is mado nro not such as to require thoCollector to hear tho other sido ; and no sanction in tho proper sense can citherbe imposed by the Collector upon a person liablo to a forfeituro or can elsoattach under the Customs Ordinance to render tho election effective. Unless acompetent Court determines, in a subsequent action instituted by tho Attorney-Gcneral under section 1*15 of tho Customs Ordinance, that a forfeituro wasindeed incurred under section 130, tho Collector’s election is ineffective. Theprinciple audi alteram pattern, as discussed in Durayappah v. Fernando (60N. L. R. 265), does not apply in tho caso of tho election authorised or requiredby section 130 of tho Customs Ordinanco.
Tennckoon v. Principal Collector of Ctistoms (61 N. L. R. 232), ovorruled.
Omer v. Caspcrsz (65 N. L. R. 404), partly overruled.
Quaere, whether, if the petitioner had been *’ concerned in the exportation ”of shipments of desiccated coconut to New York, instead of to Halifax, incontravention of the terms of the export licence issued to tho Company by theManager of the Ceylon Coconut Board, such exportation was an exportation ofrestricted goods contemplated in section 130 and Schedule B of tho CustomsOrdinance, read with the Coconut Boards Ordinance os amended by Act No. 20of 1962 and tho Amending Regulations of 1963 mado undor section 20B of tho• amended Coconut Products Ordinance.
-Application for a writ of certiorari.
E. F. N. Gralitien, Q.C., with Walter Jay award ena, Q.C., N. E. Weera-sooria (Junior) and R. D. O. de Silva, for tho petitioner.
L. de Silva, with Ananda de Silva, Shiva Pas apathy and G. P. S.Silva, Crown Counsel, for the respondents.
Cur. adv. t>ull.
March 30,. 1969. The Judgment of the Court—
The petitioner in this case is a Director of a Company carrying on. business inter alia as exporters of desiccated coconut from Ceylon. Earlyin March I96S the Company made applications to the Principal Collectorof Customs stating its intention to ship contain quantities of desiccatedcoconut to Halifax (Canada). These applications were made unders. 5S of the Customs Ordinance for permission to export the goods priorto the presentation of the Bill of Entry for the goods. Customs dutyand dues having been duly recovered or secured, tho desiccated coconut
JUDGMENT OF THE COURT—Jayawardene v. Silva
27
was exported in April and March, 19GS. Although, however, the appli-cations and the ship’s manifests specified Halifax as the port ofdestination,' the three shipments of desiccated coconut were in factlanded at the port of New York.
On 17th September 196S, the 1st respondent to the present application,an Assistant Collector of Customs, issued a notice to the present petitionerin the following terms :—
" Shipments of D. C. Nuts
An Inquiry will be conducted by me in iny office commencing at9.30 a.m. on 23rd and 24th September, 19GS in regard to the following• shipments of Desiccated Coconuts effected by your establishment incontravention of Sections 5S, 57 and 130 of the Customs Ordinance(Chap. 235), read with the Coconut Products Ordinance (Chap. 160)—
~ – (i) ‘ Jeppessen Maersk ’ sailed-on-22.4.6S. -742,900 lbs.„ D. C. Nutsvalued at Rs. 713,553.
‘ Johannes Maersk ’ sailed 5.4.68.504,400 lbs. D. C. Nuts
valued at Rs. 4S3,780-48.
* Leda Maersk * sailed 14.3.68.499,900 lbs. D. C. Nuts valued
at Rs. 472,835-75
as persons being concerned in the exportation of the above shipmentsof Desiccated Coconuts contrary to restriction, in that the aboveDesiccated Coconuts were shipped to the Port of New York, insteadof the Port of Halifax as stated in your application in respect of eachconsignment. You are requested to be present at this inquiry andshow cause, as to why I should not proceed to make order of forfeitureof three times the value of the said Desiccated Coconuts in each case,on each of you, in terms of Section 130 of the Customs Ordinance,Chap. 235. ”
Similar notices were also issued to two other Directors of the sameCompany and to the Office Manager of the Company.
On 2oth September 1968, the 1st respondent informed the petitionerthat the “ application ” referred to in the above notice was " the intend-to-ship application ” made by the Company under s. 58 of the CustomsOrdinance in respect of the shipments specified in the notice.
The inquiry referred to in the notice was ultimately held on 25th and26th September, at which sworn evidence was recorded of the petitionerand other Directors or employees of the Company, and at which alsosome documents were produced by the Customs. The 1st respondent
28
JUDGMENT OE THE COURT—Jayatcardcnc v. Silva
kept a written record of the evidence. The inquiry was followed by aletter of 30th September 19GS addressed to the petitioner in the followingterms :—
“ Shipments of D.C. Nuts
I have carefully considered the evidence that was led before moat this inquiry, and I hold that Mr. D. L. Jayawardene is guilty ofthe charges made against him and conveyed to him by my noticoNo. EXP. 470 of 17.9.GS.
I elect in terms of Section 130 of the Customs Ordinance (Cap. 235)to impose a forfeiture of three times tho valuo of tho goods inquestion—
viz : («) * Jeppessan Maersk ’ Rs. 2,140,059 00(6) 4 Johannes Maersk ' Rs. 1,451,340 00
* Leda Maersk ? Rs. 1,41S,505 00
amounting to a total of Rs. 5,010,504 00 (Rupees Five Million tenthousand five hundred and four). ”
Letters were addressed in identical terms to the two other Directorsand the Office Manager, subject only to the difference that in the case ofOffice Manager the amount of the forfeiture was mitigated toRs. 1,670,168.
We reserve for explanation at a later stage, the references in thenotice of 17th September to ss. 57 and 5S of the Customs Ordinance,because they do not appear to be of relevance to the questions we havefirstly to decide.
Some explanation is here necessary of the reference in the Collector’snotice of 17th September 19GS to the Coconut Products Ordinance,Cap. 1G0. It is sufficient to state for the present that the position ofthe Collector lias been that the export of desiccated coconut from Ceylonis subject to a licensing scheme established by Regulations made underthat Ordinance, that the scheme requires an export licence to authorisethe export of desiccated coconut, that the licence actually issued to thoCompany is one which authorised export only to Halifax (Canada),that the exportation of these consignments to New York was thereforecontrary to a restriction imposed by those Regulations, and that thepetitioner was a person concerned in such exportation.
If the position of the Controller as just explained be correct, then thoexportation of these consignments of desiccated coconut was incontravention of s. 12 of the Customs Ordinance, read with the lastparagraph of Schedule B to that Ordinance. The penalty for such acontravention is set- out in s. 130 of that Ordinance, which we nowproceed to examino.
JUDGMENT OF THE COURT—Jayauardcnc v. Silva
29
The relevant provision of section 130 which has to be consideredfor present purposes may be stated as follows :—
“ Ever}' person who shall bo concerned in exporting any goodsthe exportation of which is restricted contrary to such restrictionshall forfeit either treble t lie value of the goods, or be liable to a penaltyof Rs. 1,000, at the election of the Collector of Customs. ”
It is necessary at this stage to point out that sections 33, 129, 132 and133 of the Customs Ordinance also provide for a similar election by theCollector as between the same two alternative penalties. But in theseSections, the language emplojed is slightly different from that used ins. 130, and the forfeiture is expressed ns :—“ shall forfeit treble thevalue thereof, or the penalty of Rs. 1,000, at the election of the Collectorof Customs. ” It is clear that this is the language ajiproprintc to expressthe apparent'intention, that is to say, that the offender will forfeit asum equal to treble the value of the goods or the sum of Rs. 1;000, thechoice between the two sums being made at the election of theCollector.
It will be seen that this intention was not accurately stated in thelanguago of the section 130. That language is in fact ungrammatical.The use of i he words “ shall forfeit either ” obviously indicates an intentionto impose one of two alternative forfeitures ; but that intention is notproperly carried out in the phrases which follow. Reference to the EnglishCustoms Statutes est a bl is lies -hat the imposition of a forfeiture of one oftwo alternative sums was i doptccl into our Law fiom '.lie English Law,and tint in corresponding sections of tho English Statutes the languagowas the same as lhat employed in our sections 33, 129, 132 and 133.
It is therefore clearJy necessary to correct tho grammar of s. 130 and toafsu nc its intention to be that a person concern'd in airy of <ho actsreferred to in tho section “ shall forfeit treble the value of thn goods, orthopenalty of Rs. 1,000, at tho election of tho Collector of Customs Thepropriety of this assuz»2>lion was not questioned by Counsel at thohearing.
In tho ease of Palasamy Nadar v. LartHrec 1 this Court considered thoeffect of a provision in s. 40 (now s. 44) of tho Customs Ordinance thatany goods exportod or taken out of tho Island contrary to certain spccifiodprohibitions and restrictions shall be forfeited, and construed thisprovision to mean that on tho happening of somo event “ the owner oftho goods is automat ically and by operation of law divest cd of his pi open yin tho goods as soon as tho event occurs Tho Couit further held that“ no adjudication declaring tho forfeituic to have taken place is roquiicdto implement tho automatic incident of forfeiture”. Tho docision inthis case followed the constiucl ion placed in De Kc.yzcr v. British BailvayTrr JffizCo.2, on tho languago of s. 202 of tho English Customs ConsolidationAct of IS7G, which states that all conveyances used for the convo3*ar.co
* (1949) 51 N. L. R. 520 at p. 523.
* (1930) 1 K. B. 224.
30
JUDGMENT OF THE COURT—Jayawardene v. Silva '
of any goods liable to forfoituro undor the Customs Acts snail be forfeited.The judgments in the English case state that “ whero certain eventshave happened the property in quostion is labelled ‘forfeited' unders. 202 ”, and that “ as soon as it is ascertained that a conveyance hasboon used for tho conveyance of goods liablo to forfeiture, ipso factothat conveyance is forfeited
Wo can sec no sensible distinction between the languago in s. 130,and tho language of tho two soctions which were construed in tlie twodecisions to which we have just referred, and much of the argumentbefore us proceeded on tho basis that tho forfeiture under s. 130 is incurredat tho moment a prohibited or restricted exportation takes place. Itthus appears that tho function, and even the duty, of tho Collectorunder s. 130, is only to make an olection as between tho two specifiedamounts of tho incurred forfeiture.
Consideration of tho matters to which wc have thus far. referred shows,despite some indications to the contrary in tho Collector’s notice of17th September and his letter of 30th September, that tho action whichthe Collector intended to take Mas to elect “treblo tho value of the goodsexported ”, and not a sum of one thousand rupees, as being tho sumforfeited under s. 130 in the instant case. It is this action, purportingto have been taken under s. 130, which the petitioner seeks to havequashed by means of a Mandato in tho nature of a Writ of Certiorariissuing from this Court. Applications for similar Mandates were madeto this Court by tho two other Directors and the Office Manager of thoCompany, and the arguments wc have heard covered all the fourapplications.
Tho first quostion which arises for our decision is whethor a Writ ofCertiorari will lie to quash action taken by the Collector of Customs undors. 130 of the Ordinance.
Undoubtedly tho Collector cannot claim that the occasion for theexercise of his function or duty of election under s. 130 has arisen, unless,at the least, ho has reason for forming an opinion that goods have beenoxporlrd contrary to one of the statutory prohibitions or restrictionscontemplated in the section; but the argument for tho petitioner hasbeen that I ho election cannot lawfully bo made unless the Collector hasfirst determined that the facts by reason of which the statutory forfeitureis incurred do actually exist. On this ground it was argued that such adetermination is one which affects the rights of tho person concernedin the exportation, in that the consequence of the election can be thatthe person will have to pay the larger of two alternative sums. Havingregard to tho magnitude of the difference between the two alternativesums which may have to be paid in the instant case, it was further arguedthat a determination which precedes an election, which can have soserious a consequence, must, be reached in a quasi-judicial manner.
JUDGMENT OF THE COURT—Jayawardcnc v. Silva
31
It was ako submitted by one Counsel in the course of his argumentthat Iho application of s. 130 may well involve two stages of quasi-judicial decision, namely, the stage at which the Collector satisfied himsolfin regard to the existence of what were described as the jurisdictionalfacts, and secondly, tho stage at which he brings his mind to boaron tho question of electing between the alternative statutory forfeitures.
Another similar argument was that, because there are two 6tages inthis process of election and because tho e!e_i.on made at the second stagecan seriously affect the rights of snbjoc.s, iho quasi-judicial characterattaches to both stages of the consideration which tho Collector mustgivo to tho matter.
We have had the benefit of full and helpful arguments from both sidesupon the question whether'a Writ will lie in this case, and Counsel havevery properly referred us to numerous decisions, of British, Cc3'lon andother Courts. But we find after considerations that it .will suffice to referonly to some of those decisions which in our opinion help to resolve theproblem which we have to decide.
We ask no excuse for citing the celebrated dictum of Atkin L.J. in thecase of It. v. Electricity Commissioner 1:—
“ Wherever any body of persons having legal authority to determinequestions affecting the rights of subjects, and having the duty to actjudicially, act in excess of their legal authority they are subject to thecontrolling jurisdiction of the King’s Bench Division exercised in theseWrits.”
This dictum was amplified in the judgment of Lord Hewart, C.J. in Bexv. Legislative Committee of the Church Assembly 2 as follows :—
“ The question therefore which we have to ask ourselves in this caseis whether it is true to say in this matter, either of the Church Assemblyas a whole, or of the Legislative Committee of the Church Assembly,that it is a body of persons having legal authority to determinequestions affecting the rights of subjects, and having the duty to actjudicially. It is to be observed that in the last sentence of Atkin L.J.the word is not “ or ”, but “ and ”. In order that a body may satisfythe required test it is not enough that it should have legal authority todetermine questions affecting the rights of subjects; there must besuperadded to that characteristic the further characteristic that thebody has the dut3r to act judicialh*. The duty to act judicially is aningredient which, if the test is to be satisfied, must be present. Asthese writs in the earlier da3'S were issued only to bodies whichwithout anv harshness of construction could be called, and naturallvwould be called Courts, so also today these Writs do not issueexcept to bodies which act or are under the duty to act in a judicialcapacity .”
1 (1924) 1 K. B. 171 at 205.* (1928) 1 K. B. 411 at 415.
32
JUDGMENT OF THE COURT—Jayawardeue v. Silva
Acting upon the dicta which we have just cited, what wc have toconsider is whether, in making an election under s. 130 of the CustomsOrdinance, the Collector firstly has to determine a question affecting therights of subjects, and secondly has to act judicially in making theelection.
In the case of the Electricity Commissioners, what was claimed to bovitro, vires was a Scheme purporting to be adopted under Statute by theCommissioners. The Attorney-General relied on provisions in theStatute which required the Scheme to be submitted to a Minister forconfirmation and to both Houses of Parliament for approval, and underwhich the Scheme might be altered or even rejected. In view of theseprovisions, it was argued that the Scheme as adopted by the Commissionersdid not aifec-t the rights of subjects, and that the Writ therefore wouldnot lie. Once this objection to the issue of a Writ of Prohibition wasoverruled, the fact that the provisions of the Scheme did affect the rightsof subjects could no longer be disputed. There then remained thequestion whether the Commissioners had a duty to act judicially. Inregard to this question, the judgment, of Bankes, h.J. 1 points out thatthe Act imposed upon the Commissioners very wide and responsibleduties and powers in reference to the approval or formulation of schemesand that “ at every stage they are required to hold local inquiries for thepurpose of giving interested parties the opportunity of being heard ”.There is a further statement in the judgment that the Cour- should hold“ that powers so far-reaching, affecting as they do individuals as well asproperty, are powers to be exercised judicially and not ministerially ”.It appears therefore that- in the circumstances of the ease it was manifestto the Court that the Commissioners did indeed have a duty to actjudicially. For the present wc must say that the existence of such aduty is not made manifest in s. 130 and in connected provisions of ourCustoms Ordinance.
Mr. Gratiaen relied on a dictum of their Lordships of the Privy Councilin a recent appeal from Ceylon, Durtiyappah v. Fernando where thematter for consideration was whether a Minister, in making an order forthe dissolution of a Municipal Council, had a duty to observe the principleawli alteram partem. The dictum in this judgment, which wc find ofgreat assistance, reads thus :—
• “ In Their Lordships’ opinion there are three matters which mustalways bo borne in mind when considering whether the principleshould be applied or not. Those three matters arc :—
First what is the nature of the property, the office held, status
enjoyed or services to be performed by the complainant of
. injustice.
1 {10-21) / A', n. JOS.
(10CC) 69 N. L. R. 266.
JUDGMENT OF THE COURTTayawardent v. Silva
33^
Secondly in what circumstances or upon what occasions is theperson claiming to be entitled to exercise the measure of controlentitled to intervene.
Thirdly when a right to intervene is proved what sanctions in factis the latter entitled to impose upon the other.
It is only upon a consideration of all these matters that the questionof the application of the principle can properly be determined. ”
It is convenient at this stage to consider the third of the matters whichTheir Lordships in 1Durayappah’s case regarded as of importance indeciding whether the principle audi alteram partem does or does notapply, namely what sanctions the authority is entitled under the Statute-to impose upon the complainant of injustice. We pass therefore to-discuss the consequences which will or can flow from the Collector'selection under s. 130. No doubt (as is apparent from the letter of 30th.September 196S addressed to the petitioner) the Collector will^when hemakes an election under s. 130, proceed to make a demand of payment ofthe forfeiture; but no liability to pay the amount demanded arisesmerely by reason of the demand. The Collector has no right under theOrdinance, by any executive act to seize or take any sum of money froma person to whom such a demand is addressed. Unless of course a personvoluntarily complies with such a demand, there is only one means bywhich he can be compelled to pay the amount of the demand, and this is*>y a decree of a competent Court entered in an action instituted by theAttorney-General and referred to in s. 145 of the Ordinance, which:provides as follows :—
“ All penalties and forfeiture which shall be incurred under this.Ordinance shall and may be sued for and recovered in the name of theAttorney-General in the respective courts of Ceylon, in like manner asother revenue cases. ”
It was common ground at the argument that in such an action the-Attorney-General cannot succeed in obtaining a decree unless he is ableto establish the relevant cause of action, namely, that a person has beenconcerned in an exportation falling within the scope of s. 130. Once theexistence of the cause of action is established in the action, the furtherelement that he forfeits a sum of money is automatically established bythe operation of s. 130 itself. It is thus clear that the fact that theCollector makes an election of one of the two alternative sums whichsection 130 declares to be forfeit, does not and must not in any wayaffect the duty of a competent Court to decide whether or not thestatutory forfeiture was actually incurred in a particular case. Indeed thejudgment in the case of Palasamy Nadar v. Lanklree 1 makes it clear thatthe Collector makes no adjudication when he elects to seize goods whichs. 46 declares to be forfeited. We are satisfied that similarly there is noadjudication on the facts by the Collector when he makes his election
1 {1919) 51 N. L. R. 520.
J 4762 (7/69)
.34
JUDGMENT 0I-’ THE COURT—Jayatvardcne v. Silva
under s. 130, and that the only determination having (he legal effect ofan adjudication is that which a Court will make in an action brought l>ythe Attorney-General. There is thus no sanction attached to theCollector’s election in the nature of anj- compulsion to make payment.What is effective in the Collector’s election is that, if a Court does holdthat the liability to make payment has arisen in law, the amount of thepayment (as between the two alternative sums specified in s. 120) hasbeen pro-determined by the Collector’s election. We cannot think thatthis fixation of one of two alternative sums is a sanction imposed uponthe petitioner in the sense in which that term is used in the judgment inDu'rayuppah’s case. With respect to this point, Their Lordships observedas follows :—
“ The third matter can be dealt with quite shortly. The sanctionwhich the Minister can impose and indeed, if he is satisfied of the■ necessary premise, must impose iqion the erring Council is as completeas could be imagined ; it involves the dissolution of the Council andtherefore the confiscation of all its properties. ”
In regard to the first matter enumerated by Their Lordships inDnrayappah's case, the precise question for us is “ what is the nature ofthe property held by t he petitioner ? ” He certainly has a right to keephis money, which right can clearly be affected, but only because theStatute, and not the Collector, imposes a forfeiture of money against aperson who has in fact contravened s. 130. By reason of that ferfeiture,ho incurs under the Statute a liability to pay money, which i f courseplaces in jeopardy his right to keep his money. In making this observa-tion we are appreciative of the principle that the rights affected need notnecessarily be “ rights ” from a jurisprudential point of view. Theelection of the Collector under s. 130, however, does riot create a r.eicjeopardy to the petitioners right ; the election serves only to fix theextent of the statutory jeopardy to one of two alternative amountsarbitrarily imposed by s. 130. The election will have validity orly if aCourt holds, in an action instituted u; der s. 145, that there has been acontravention of s. 130; and if a Court, does so hold, we much doubtwhether a person so found to have contravened the section can properl j*bc regarded as having any “right” to suffer the lesser of the twoalternntivo forfeitures.
It is significant that in s. 130, as well as in a few other sections of theOrdinance, .the Legislature compels the Collector to make a choicebetween what manifestly appear to be two arbitrary alternatives. The. sections give no guidance to lIre Collector as to the considerations whichmight affect his choice between these two alternatives, and they do notleave it open for him at the snsge of election to demand no forfeiture atall or to demand a stun lower than cither of the two arbitrary sumsspecified in these sections. In the absence of any standard prescr bed inthe Statute by reference to which the Collector might decide to recovera sum which lie might consider appropriate in a particular case, it is
JUDGMHXT OF THE COURT—Jayairanlcnc v. Silva
35
unreasonable to infer that the Legislature had any intention that theCollector should in making tills election act otherwise than in his absolute,discretion. In Pritchard's case 1 Parker J., as he then was, observed thatit cannot be too clearly understood that the remedy by way of Certiorarionly lies to bring up to this Court and quash something which, is adetermination or a decision. (The italics are ours.) This description of thecharacter of the matter which may be quashed can scarcely be said toapply to an election between two arbitrary alternatives, one or other ofwhich must necessarily be chosen under s. ISO.
It was submitted for the petitioner that the duty of election imposedon the Collector must necessarily carry with it the duty to have dueregard to the extent- of the participation of the offender in any of. the actsreferred to in s. 130, to the question whether his participation was withguilty knowledge of the breach of any relevant law, and also to thequestion whether his blameworthiness was such as to render more-appropriate the one penalty or-the-other:—Gnc-pnictical-exampie -of-a..case which in this submission might deserve special consideration of aquasi-judicial nature would be that of a clerk employed in the peti-tioner’s Company who had merely been concerned upon instructions fromhis employers in tilling up application forms in a misleading manner. Itwas submitted, of course on the assumption that a clerk who had actedin that manner comes within the scope of s. 130, that the penalty ofRs. 1,000 would be more appropriate and that the Collector, despite thelack of any indication to this effect in the Section, would nevertheless beunder a duty to take all the circumstances into consideration and imposethe lesser penalty. In our opinion the answer to this submission istwofold ; firstly, that the Legislature has nowhere indicated the principleon which the Collector is to be guided in making his election ; second!}',that the Legislature has not expressly contemplated the process of a-quasi-judicial determination of this matter by the Collector. Moreoverthe possibility that the lesser penalty ma}' appear to a Court to be themore appropriate in a particular case is not in our opinion a considerationupon which to base an inference that the Legislature intended theCollector to act quasi-judicially. While it is true that one can contem-plate cases in which the milder choice may appear moro appropriate, onecan also contemplate cases in which either choice which the Collectormay make would be harsh in the particular circumstances. If forinstance a messenger of the petitioner’s Company who delivered to theCustoms authorities documents effective to promote the exportation ofthese shipments of desiccated coconut is assumed to fall within the scopeof s. 130, even the lesser penalty of Rs. 1,000 appears to us to be somewhatfantastic. In any event if the election actuall}' made by a Collector unders. 130, whether of the graver or less grave forfeiture specified in s. 130, isexcessive, the matter does not end there. The Ordinance provides ins. 103 for mitigation by the Collector of an}r forfeiture incurred under theOrdinance and for appeals to the Minister. We have no doubt that itwas tho intention of the Legislature that the provisions of s. 163 will be
M1953) 1 W. X. R. JJ5S.
36
JUDGMENT OF THE COURT—Jayawardene v. Siha
utilized with due regard to particular circumstances and to any mitigatingfactors, and to soften the strictness of the arbitrary forfeitures imposedby various Sections of the Ordinance. Sections 131 and 142, for instance,impose automatic forfeitures which might be harsh and unreasonablein the circumstances of a particular case. In enacting s. 163, theLegislature took account of the fact that the penalties which it itselfarbitrarily imposed, or which it compelled a Collector to select, may boarbitrary and should as a matter of policy be mitigated in appropriate-circumstances.
Some stress was laid during the argument on cases in which it has beenheld that the need for confirmation or the possibility of alteration orabandonment of some determination does not have the effect that thereis no duty to act judicially in reaching the stage of determination. Two•such cases were those of Carmichael1 and Boycott3 in which the groundfor the issue of a Writ was that the certifying officer in those cases madeadjudications which virtually decided facts upon which another authoritycould make an order affecting the rights of a subject. This view ofthose cases was expressed in the case of I?, v. Manchester Legal Aid•Committee 3.
“ The certifjdng surgeon in the former case and the Board ofEducation certifying medical officer in the latter case were concernedsolely with the facts of the particular case, facts presented to themex parte, and it was not for them to take into consideration anyquestions of policy' or expediency.”
It suffices to point out that there is no indication in s. 130 of the Customs'Ordinance that the Collector need consider any matters other than matters•o/ policy or expediency.
With reference to the second matter specified in the dictum inVurayappah's case, Their Lordships directed attention to the statutorygrounds upon which the Minister was empowered to dissolve a MunicipalCouncil. With reference to two of these specified grounds, it appearedmanifest to them that a Council must be entitled as a matter of the mostelementary justice to be heard before the Minister decided to dissolve aCouncil on such grounds. That being so, and looking at the Section as awhole, it was not possible to single out for different treatment the thirdground of dissolution, which was incompetence on the part of a Council.Their Lordships thought that if the sole ground for dissolution had beenonly the vague ground of incompetence, there might bo some force inthe argument that the principle audi alteram partem is not applicable.
In the instant case, the Legislature has not specified even a vague groundupon which the election of the Collector is to be based. Thus thecircumstances or occasions on which the Collector intervenes do notappear to bo such as require that a party be heard before an electionunfavourable to him is made.
* (1923) 1 K. B. 29.* [1939) 2 A. E. It. 626.
* (1952) 1 A. E. B. ISO at 190.
JUDGMENT OF THE COURT—Jayaurardene v. Silva
37
Our consideration, in the context of s. 130, of the matters mentionedin the dictum in Durayappah’s case thus leads us to these conclusions :at the highest the Collector’s election may, in a provisional manner andto a limited extent, affect a “ right ” of the petitioner; but thecircumstances in which the election is made are not such as to require theCollector to hear the other side ; and no sanction in the proper sensecan either be imposed by the Collector upon a person liable to a forfeitureor can else attach under the Ordinance to render the election effective.We hold therefore that the principle audi alteram, partem does notapply in the case of the making of the election authorised or requiredby s. 130.
ftlr. Gratiaen cited a decision of the Supreme Court of India in EastIndia Commercial Co. Ltd. v. Collector of Customs in which it was heldthat certain proceedings taken under the Indian Sea Customs Act arequasi judicial, and that a Writ of Prohibition will lie in respect of them.It is not necessary to discuss the circumstances oh this particular casebecause there is a decisive distinction between the structure of the IndianAct and that of our own. Section 167 of the Indian Act, which wasconstrued in the case mentioned, uses the language that goods "shall beliable to confiscation”, and that a person “shall be liable to a penalty”.Section 1S8 provides that" where goods are under any other provision soliable to confiscation, or a person so liable to a penalty, an appropriateCustoms officer may adjudge the confiscation or penalty ”, and Section 1SS• provides for an appeal from such an adjudication. Further there isprovision for remission of such penalties or confiscations and for the reviewby the Central Government of any decision or order passed under the Act.What is most important is s. 193 which provides that an adjudgedpenalty may be levied by the sale of goods of the offender, and that whereit cannot be realised by such a levy, a Magistrate will, upon notificationto him of the penalty, proceed to enforce payment thereof in like manneras if it were a fine imposed by the Magistrate.
It will be seen therefore that v'hen a penalty is adjudged by a CustomsOfficer under s. 182 of the Indian Act, and it is not set aside or varied in asubsequent proceeding, a Customs Officer has power to recover thepenalty and a Magistrate acting as a Court of execution has a duty tolevy that penalty. This is a procedure significantly different from thatcontemplated in our Ordinance : unless a competent Court determinesthat a forfeiture was indeed incurred under our s. 130, the Collector’selection is ineffective. The adjudication of an Indian Customs Officerhas effect in its own virtue and constitutes a determination as againstan alleged offender that he is in fact an offender ; whereas in our Ordinancesuch an adjudication is committed solely to a Court, which will manifestlyact judicially and independently of any opinion of the Collector upoDwhich his election of a penalty may have been based.
1 {1962) A. I. B. S. G. 1893.
38
JUDGMENT OF THE CO URT—Jay a warden e v. Silva
Relying upon the provisions in ss. 7, S and 9 of the Customs Ordinanceas to the power of Customs Officers to administer oaths, to hold inquiries,to examine witnesses on oath, and to call for and inspect documents, andas to the punishment of persons giving false evidence at such inquiries,it was argued for the petitioner that an inference properly arises fromthese provisions that an election under s. 130 must be made in a quasi-judicial manner. Having regard however to the wide scope of variousprovisions of the Customs Ordinance, there appear to be many purposesin connection with which inquiries by Customs Officers may be necessary,such for instance as the jmrpose of determining the appropriate scalo ofduties applicable to goods, imported or exported ; and it was not arguedthat in regard to inquiries held for such purposes a duty arises for CustomsOfficers to act judicially. There arc many Statutes which require thatreturns, statements and declarations furnished to a statutory authoritymust be made or verified under oath, but this circumstance by itselfdocs not justify an inference that in the consideration of such returns,statements or declarations for the purpose of reaching some decisionthereon, the statutor}' authority has a duty to act judicially.
Jn connection with tho argument just considered, Counsel referred totho fact that in tho instant case the Collector, by giving the notico of 17thSeptember 196S, appears himself to have conceded that it was his duty toact judicially. Tho procedure which tho Collector purported to followwas apparently tiro consequence of two decisions of this Court to whichwo will now rofor.
In Tennekoon v. Principal Collector of Customs 1, tho version of thofacts presented by tho Customs was that tho petitioner in tho case hadbeen concerned in unshipping of two bars of gold unlawfully imported,or had knowingly concealed them. On this ground tho petitioner wascalled upon to pay a penalty of Rs. 10,000 under s. 127 of the CustomsOrdinance, which is now s. 129. This section provides just as does s. 130for tho automatic forfeiture of either treble tho value of the goods, or thopenalty of Rs. 1,000, at tho election of tho Collector. Weerasooriya J.referred to the Collector’s order as being one “ calling upon tho petitionerto pay a penalty of Rs. 10,000 Relying principally upon dicta in thoease of It. v. Manchester Legal Aid Committee, tho learned Judge hold thatthe Collector was under a duty to act judicially. Having regard to aconcession by tho Crown that no opportunity was given to the petitionerto moot tlie caso against him, a Writ of Certiorari was issued to 'quash’the Collector’s order. This judgment was followed in the ease of Omcr v.Caspers:'1, without any fresh consideration oF tho question whetherCertiorari would lie*. There was in this latter judgment criticism of theCustoms Officers who had dealt with tho matter’under review to (lieeffect that, because of the earlier decision in Tcnnckoon’s case, theyshould have known (hat it was their duty to conduct a proper inejuirybefore imposing a forfeiture. It appears that this criticism has led totho form of procedure (notico and inquin*) which tho Collector adopted.
1 (1939) G l A L. R. 232.(1903) G 't A*. L. Jl. 491.
JUDGMENT OF THE COURT—Jayawardcne v. Silva39
in the instant c.aso. Despito our opinion that tho Collector has no dutyto act judicially in electing between the two allernativo forfeitures, wowould encourage rather than discountenance the procoduro of a noticeand inquiry.
In considering the character of tho forfeiture which is incurred unders. ISO and the nature of tho function performed by tho Collector underthis section, it is useful to compare tho character of other forfeitures forwhich tho Ordinance provides. Section 44 which was considered in thecaso of Palasamy Nadar v. Lanklrce 1 provides that goods exportedcontrary to tho restrictions in Schcdulo B " shall bo forfeited and shall bodestroyed or disposed of as tho Principal Collector of Customs inaydirect.” Section 43 has identical provision for tho case of goods importedcontrary to certain prohibitions or restrictions. Sections 47, 50, G5 and75, for example, also provido for tho forfeiture of goods in certain events.As was held in the case just mentioned, the forfeiture is “ automatic ” in■ alh these casos, and tho character of tho forfeiture was .thus explained inthat caso (idem at p. 523):—•
“ A forfeiture of goods by operation of law would, of courso, bo ofpurely academic interest until tho owner is in fact doprived of hisproperty by some official intervention. Section 123 (now s. 125) oftho Ordinance provides tho machinery for this purposo. It empoworsany officer of the Customs to seize any goods which are “ declared to beforfeited ” by the Ordinance. When that is done, the goods “ shall bedeemed and taken to be condemned ” and may be dealt with in themanner directed by law un-ess the person from whom they have beenseized or their owner "shall, within one month from the date of
seizuregive notice in writing to the Collector that he
intends to enter a claim to thogoodsand shall further
give security to prosecute such claim before the Court having juris-diction to entertain tho same.” (Section 14G, now s. 154.) If noticeis given and security tendered within tho prescribed time, thoCollector is required to deliver up tho goods to tho claimant, who isgivon a further thirty da3’s within which to prosecute his claimin tho appropriate Court. Unless notico and security are so given,and the action filed within the proscribed period, the owner no longerretains a right to claim property in the goods and is also precludedfrom challenging the validity of tho seizure and alleged forfeiturein judicial proceedings. In that event he may only hopo for but homay not demand as of right from tho appropriate authority a mercifulmitigation of tho full rigours of the forfeiture. (Sections 155, 15Gand 157—now Sections 1G3, 1G4 and 1G5.) ”
Wo agree entirely with this explanation. It follows that when goodsare declared by the Ordinance to be forfeited, and are seized as providodin s. 125, the property in tho goods will bo lost to their owner unless thevalidity of the seizure is challenged by an action instituted in a•competent Court within a strictly limited period.
1 {1949) 51 N. L. B. 520.
40JUDGMENT OF THE CO U RT—J ay a tcardene v. Silva
Counsel did nob attompt to argue before us that soizuros under s. 125need bo preceded by any quasi-judicial proceedings ; and the explanationwhich wo have just cited confirms our own opinion that no suchproceeding need bo hold, for instance, when Customs Officers seize goodsbecause of an opinion that they are forfeit under s. 43 or s. 44 or anyotlior of tho Sections wo have mentioned. In othor words, such a seizureis puroly an executive act, which will render effective in practice thestatutory forfeiture of goods, unless of course an action is brought bytheir owner as provided in s. 154.
It readily appears that the restrictions contemplated in ss. 44 and 130are identical or substantially similar. The broach of such an exportrestriction entails (if tho goods are within roach) a physicial forfeiture oftho goods undor s. 44, and entails also a monetary forfeiture under s. 130against persons concerned in the exportation. Thoro is a correspondingrelationship between ss. 43 and 129 in tho case of imports. The physicalseizure of goods undor s. 125, which conclusively deprives their ownerof his property unless he is vigilant to prosecute his claim to them byaction in the Court, creates a real and present peril. Far slightor is thoperil, if any, created by the more election and demand of tho monetaryforfeiture incurred under s. 130, which may or may not bo sued for bytho Attorney-General and will be recoverable only if a Court determinesthat it was indeed incurred. If then a quasi-judicial proceeding need notprecede so grave an action as a seizure of goods, far less is there thoneed of such a proceeding before an election is made under s. 130.
In the case of Omcr v. Ca^crsz, customs officers had taken threodifferent actions, because of an opinion that certain goods had beenimported contrary to restrictions :—
The goods were seized in March 19G2 and the importer was later
informed that the goods were forfeited. This action Aas referableto s. 43 road with Section 125.
In Octobor 19G2 the Principal Collector informed tho importer
that an additional forfeiture of Rs. 149,S50 (treblo tho valueof tho goods) had been i: imposed ” on him under s. 129, andho was called upon to pay this sum.
In NoA'cmber 1962 the Principal Collector informed tho importer
that under s. 144 steps woro to bo taken to stop all his importsor exports until tho additional forfeiture Avas paid.
The application made by the importer to this Court was for a Writ ofMandamus to compel tho Collector to pass ontrios for subsequent importsby tho importer, and this Writ was issued by the Court.
Tho Crown at tho present hearing has not questioned the correctnessof tho issue of tho Writ of Mandamus in that case, although CrownCounsel has argued that tho Wrh ::hould have been issued on a ground
JUDGMENT OF THE COURTtayaivardene v. Silva
41
different from that set out in tho judgment. Ho conceded that s. 144applies only if and after a forfeiture is adjudged due by a Court in anaction under S. 145.
In addition however, the loarned Judge in that case either did, orthought that he could, issue a Writ of Certiorari to quash tho orderof November 1962 in so far as it related to tho additional forfeiturereferred to at (2) above ; and tho ground for tho issue of tho Writ ortho opinion that it could issue, was that tho Collector had a duty toact quasi judicially boforo “ imposing a forfeiture ”.
Tho circumstances of that case reveal tho inconsistency which canarise from tho opinion which tho learned Judge in that case obviouslyheld.
Tho seizure and forfeiture of tho goods alleged to have been unlawfullyimported in March 1962 was referable to s. 43, under which unlawfullyimported goods are automatically forfeited. In fact tho importer hadivctually resorted to the remedy against a seizure afforded by s. 154,for he had instituted an action in tho District Court to challenge thevalidity of tho seizure. The Crown had in tho samo action made a claimin roconvention for tho forfeiture of Rs. 149,S50.
As w© have already pointed out above, the physical forfeiture andtho monetary forfeiture both automatically applied on the assumptionthat tho importation in March 1962 had been unlawful. In the actionfiled by the importer, tho District Judge would have had to decidewhether in fact the importation was unlawful ; and if he so decided,then the consequences would be that both tho physical forfeiture andthe monetary forfeiture wore legally effective ; but the quashing by thisCourt of the monetary forfeiture had tho effect of nullifying the physicalforfeiture, and of thus preventing tho District Court from upholding thecounter claim by the Crown which in law should have been perfectlyvalid.
It seems to us that the circumstances of tho case of Omer v. Cosperszillustrate the error of admitting a distinction between s. 43 and s. 129,based on an opinion that a quasi-judicial proceeding is required in tholatter case although such a proceeding is not required in the former.
The presont Bench is not bound by the two decisions, each of a singloJudge, to which we have just referred. The docision in Tennekoon's caseappears to have been reached without consideration of the LegislativeScheme in the Customs Ordinance providing for the incidence andrecovery of forfeitures, and without the advantage of applying, to thecircumstances and effect of the Collector’s election, tests of tho naturewhich were subsequently laid down by the Privy Council in Durayappah’scase. In view of the conclusion which we now roach, tho decision inTennekoon's case must be overruled; so also the decision in Omer y.Cospersz, in so far as it is inconsistent with the present judgment.
42
JUDGMENT OF THE COURT—Jayaicardent v. Silva
For tho reasons now stated wo uphold Iho objection to tlic issuo oftho Writ which was taken by the youthful Counsel who led for tho Crown,and wo express our appreciation of tho assistance which Ave havo derivedfront his able and lucid arguments. We hold that tho Writ of Certioraridoes not lie to quash an election ntado by tho Collector under s. 130 oftho Ordinance, and we must accordingly dismiss this application.
At the conclusion of the arguments pertaining to tho question whichwe have just decided, Mr. Gratiacn, referring to certain obser'ations madeb}' tho Privy Council in the case of Kariapper i. Wijesinghe l, invitedus to express our vicAvs on the merits of the petitioner’s implication,even if avo Aiere to decide that tho Writ Avould not lie in this ease.
. Counsel appearing for the petitioners in tho other applications endorsedthis invitation. Learned Crown Counsel did tho samo; but avo mustnote that at a later stage of tho hearing he did express tho fear that thoposition of tho Crown might be prejudiced if, Avhilo dismissing thisapplication on tho ground upon Avhich avc have now decided to do so, avc. Avero to express obiter any opinion on tho merits of tho petitioner's case.His fear Avas that if tho proceedings in. tho present applications arc notat this stage taken before tho PriYy Council by Avay of an appeal againstour judgment, a District Judge may in any further action taken by tho.Attorney-General under s. 115 of tho Ordinance, quite naturally boinfluenced by any opinion avo express adverse to tho Crown’s case. Evena Bench of this Court hearing an appeal in such an action ma3r, CroAATiCounsel thought, at tho least be embarrassed b}' opinions expressed bythe present Bench. Wo shall bear in mind tho considerations whichCrown Counsel has urged, especially as opinions Avhich avc may nowexpress may also place at a di$ad'antago the petitioners in these fourapplications. At the same time avc must record Sir. Gratiaon’s statementfrom the Bar that the legal advisers of the petitioners in tlioso applicationswould be anxious to recommend that an appeal bo taken front a decisionof this Bench holding that Certiorari does not lie in this ease. Woinvited Counsel avIio led for the petitioner in Application No. 535 of 196Sto mako sxich statements from the Bar as ho might Avish in relation tothis matter, and avo understood that his silence meant acquicsccnco in thestatement made by Mr. Gratiacn.
On tho assumption that tho Writ Avill lie in an appropriate ease toquash the election of the Collector of Customs under s. 130 of theOrdinance, Mr. Gratiacn argued that OA'on if the petitioner had been“ concerned in the exportation ” of shipments of desiccated coconut toNew York, instead of to Halifax, such exportation Avas not within therestrictions contemplated in s. 130 read Avith Schedule B to tho CustomsOrdinance, and that accordingly there did not exist the jurisdictionalfacts upon which the Collector could lawfully elect the forfeiture of treblotho Anluo of the consignments. This argument calls for considerationof tho history.of tho control of the export of desiccated coconut, whichwould in Mr. Gratiacn’s submission establish that there have been onlyineffective attompts to regulate and control such exports.
1(1007) 70 N. L. 11. 40.
JUDGMENT OF THE COURT—J ay a warden e v. Silva
43
It is perfectly correct that until 4th June, 1962 Parliament had not■directly imposed any control of such exportation. In April 19G1 a setof regulations, which wo Mill refer to as the ** 19G1 Regulations ”, worepublished in tho Gazelle after approval by the Senate and tho House ofRepresentatives. Those regulations purported to bo mado under thopowers conferred by s. 30 of tho Coconut Products Ordrnanco (Cap. 160).Tho schomo of control embodied in these regulations can be brieflysummarised thus :
(а)persons engaged in the manufacture or export of desiccated coconut
wero required to register themselves with the Manager of theCeylon Coconut Board as “ manufacturers ” or “ shippors ”,as the case may bo ;
(б)the right to registration was mado dependent upon tho availability
to an ajjplicant of a factory at which tho process of manufactureis in accordance with certain specified requirements, whereregistration as a manufacturer is sought, or the "availability ofa place of business suitable for tho storage and shipment ofdesiccated coconut, in tho case of a person socking registrationas a shipper ;
■(c) a registered shipper Avould be entitled freo of chargo to an exportpermit, but such a shippor was prohibited from exporting anydesiccated coconut not manufactured by a registeredmanufacturer;
certain standards of quality as to tho manufacture of desiccatedcoconut were prescribed and comprehensive requirementswere enforced as to tho factories and processing bywhich desiccated coconut may be manufactured.
Counsel for the Crown did not argue that tho 1961 Regulations were •intra vires the powers conferred by s. 30 of tho Coconut Products Ordinance.Although desiccated coconut is a “ coconut product ” as dofinod in s. 31,it is fairly clear that s. 30 did not onable tho Minister to make Regulationsfor tho control of the export of desiccated coconut. In tho case of copraand coconut oil, which also are “ coconut products ”, ss. 18 and 20respectively did cnablo tho Executive to introduce a schomo of controlfor exportation whether by liconco or by permit; but there wa3 nocorresponding provision for tho case of desiccated coconut. This apparontdeficiency in tho Ordinance was provided for in tho Amending Act,No. 20 of 1962, which inserted in tho principal Ordinance tho followingnow section :—
“ 20 A. On and after such dato as may bo fixed in that behalfby tho Minister by notification published in the Gazelle, no personshall export any desiccated coconut from Ceylon except undor thoauthority of a desiccated coconut general oxport licence or desiccated•coconut special export licence issued by the Board. ”
44JUDGMENT OF THE COURT—Jayauardenc v. Silva
At the same time a new section 20B was also so inserted whichauthorised Regulations to be made for—
“ (a) the regulation, inspection, supervision, and control of the manu-facture, packing, transport, storing and export of desiccatedcoconut;
(6) prescribing standards of quality to which all desiccated coconutmanufactured shall confirm ;
(c) ensuring that desiccated coconut exported from Ceylon is freefrom impurities or foreign matter, and is of good quality ;
the issue, renewal, suspension and cancellation of desiccatedcoconut general export licences and desiccated coconutspecial export licences, and the terms and conditions subjectto which such general or special licences shall be issued, andthe manner of disposal of desiccated coconut in respect ofwhich such licences are refused. ”
Li addition, power was taken for regulations to be made in regard tonumerous matters affecting the manufacture of desiccated coconut, andthe registration of manufactures and shippers. Sub-section (2) of thenew' section 20B further provided as follows :—
“ (2) Section 20B, inserted in the principal enactment by sub-section
of this section, shall be deemed to have come into force on the dateof commencement of the principal enactment and accordingly, theDesiccated Coconut (Manufacture and Export) Regulations, 1961,published in Gazette No. 12.400 of May 5, 1961, shall be deemed tohave been duly made under the said section 20B, and to have beenvalid and effectual for all the purposes for which they w'ere made. ”
As matters have turned out, it appears that Parliament's intention tocontrol the export of desiccated coconut by means of a licensing system,has to this day not been directly implemented. The simple mode ofimplementation contemplated in the new section 20A was that theMinister should fix a date as envisaged in that section, having previouslyobtained the approval of Parliament for regulations made under thenew s. 20B, embodying details of the procedure for the issue, renewal,suspension and cancellation of licences to exporters of desiccatedcoconut. Instead of taking the obvious course of rendering the newsection 20Aeffectivebyfixinga date,the Ministcrin April 1963 was content,only to obtain the approval of Parliament for a set of Regulations which.amended the 1961 Regulations. The principal amendment for presentpurposes was the introduction of a new Regulation 7, which includes thefollowing provisions : —
“ 7. (1) No desiccated coconut shall be exported from the Islandexcept on a general export licence issued in that behalf by the Manageron a payment of a fee at the rate of 15 cents per hundredweight orpart thereof.
JUDGMENT OF THE COURT—Jayaurardene v. Silva
45-
Every applicat ion for a Desiccated Coconut General Export Licenceshall be substantially in such Form as may be approved for the purposeby the Board, and shall be accompanied by a declaration that thestatements contained therein are true and accurate.
If the Manager is satisfied that the particulars given in theapplication are correct and if the bacteriological reports relating tothe production of the mill on or about the date or dates of manufacturehave consistently been satisfactory up to the date of application inthat they do not indicate contamination with pathogenic organismsor other organisms to a harmful extent, the Manager shall issue aDesiccated Coconut General Export Licence to the applicant.”
It is unhelpful to speculate about the reason why the Minister did notin 1963 think fit to fix a date as envisaged in new section 20A; but hisfailure so to do has given rise to doubts and difficulties which might wellhave been avoided. The -petitioner relies, on jthat failurefop thesubmission that there is not in force any lawful provision which restrictsthe exportation of desiccated coconut. The submission in brief hasbeen that the only lawful provision which can require an export licenceas a condition precedent to the export of desiccated coconut is section 20Abut that this requirement in s. 20A is not effective in the absenceof the notification referred to therein. The new regulation 7 purportsto impose such a requirement, but it is submitted that the regulation isultra vires.
The answer of Crown Counsel has been that the power given byparagraph (a) of s. 20B, to make regulations for the regulation, supervision
and controlof the export of desiccated coconut, when read with
s.l7(l) (d) of the Interpretation Ordinance, includes the power to providefor an export licensing system. What is involved in the answerof Crown Counsel is that paragraph (a) of s. 20B conferred on the Minister,independently of s. 20A and as an alternative to enforcing its provisions,power to make regulations for an export licensing system.
"We agree of courso that had paragraph (a) of s. 20B been, the only-provision of the Ordinance relevant to this question, tho general provisionin s. 17 of the Litorpretation Ordinance would havo the effect of conferring-the independent and general power contended for by Crown Counsel..But s. 17 of tho Interpretation Ordinance applios in tho case of an enact-ment u?iless the contrary intention appears ; and we must therefore consider-whether a contrary intention does appear. Tho Legislature undoubtedlyintondod that from a date to bo fixed by the Minister, the requirement offexport licences which Parliament had in prospect would become operative..The powers to make regulations which will make that requirementworkable and effective and which will be ancillary to that requirementwere expressly conferred by Parliament in paragraph (6), (c) and (e^of 8. 20B ; and the descriptions “ general oxport licence ” and “ specialexport licence ” which are used in s. 20A recur in paragraph (e) of 8. 20H.
JUDGMENT OF THE COURT—-Ja’jauarJene v. Silva
46
Moreover, tho Logislaturo specified llio Board as iho authority competentto grant tho licences, and no aro unable to agree that tho apparont generalpoucr which paragrajih (a) of s. 20B confers would enable tho Ministerto commit tho function of granting licences to some other authority chosenby the Minister. Wo note also that, if Crown Counsel's argument becorrect, s. 20A and paragraph (e) of s. 20B bocomc mero surplusage if theMinister elects to oxorciso his alleged alternative powers. Our conclusionis therefore that Parliament did not intend to confer such alternativepowors. (An explanation for tho subject of “ oxport ” being mentionedin paragraph (a) of s. 20B can bo found in sub-section (2) of s. 20B.That sub-section validated tho 1001 Regulations, which viler alia didcontrol export; and since “ cover ” was boinggiven to those Regulationsunder tho powers in s. 20B (2), it was perhaps thought expedient thatthose powers should (in paragraph (a) ) include the regulation …. ofoxport.)
Tho conclusion wo havo stated abovo is not however decisive in favourof the petitioner. Wo havo to take note of tho fact that tho Regulationswhich tho Minister did mako in 1003, and which introduced the newRegulation 7, had the approval of both Houses of Parliament. In sofar therefore as tho Amending Regulations purport to require a GeneralExport Licence as a condition for tho exportation of desiccated coconut,wo cannot shut our ej’os to tho fact of Parliament's approval of thisRegulations and wo aro compelled to tho conclusion that Parliamentdid thus approvo what was in substance a proposal of (ho Minister tobring into effect tho intention of Parliament evidenced in s. 20A thatdosiccatcd coconut may only bo exported under the autlioritj* of a licence.Wo hold in other words that Parliament's approval of tho Regulationsrelioved tho Ministor of Iho duty to fix a date under s. 20A, and that thecoming into forco of Iho Regulations as so approved was tantamount tothe requisite fixation of the date by tho Minister.
Tho doubt to which wo have so far dealt is not however tho only doubtwhich has arisen becauso of tho Minister’s failuro to act in tho mannerprecisely contemplated by Parliament.. Wo have thus far hold that thoapproval and publication of tho Amending Regulations of 10G3 wastantamount to tho fixation of the date from which s. 20A was effective.But s. 20A contemplated Export Licences to bo issued by tho Coy IonCoconut Board, whereas Regulation 7 of tho Amending Regulationsprovides for licciiccs to be issued by the Manager of tho Board. Hereagain, wo aro quite unable to understand why tho Ministor and thoDraftsman of tho Regulations apparently failed to road s. 20A and toframo tho Regulations so as to accord with that- section. Neverthelesswo think that tho defect in Regulation?, (hat it committed to the Manager,and not to tho Board, the function of issuing export licences is not sofundamental as to render tho Regulation ultra vires. The Manager is asubordinate officer appointed by (ho Coconut Board, and no doubtacts under tho Board’s supervision. Moreover, undor paragraph (8)
.JUDGMENT OF THE COURT—Jayauardcne v. Silva
47
of Regulation 7 tho refusal by tho Manager to grant an export liccnco issubject to an appeal to tho Board, which may then allow tho liceneo.Tho Regulation thus complies in substance with the intention of s. 20Athat licences bo issued by tho Board.
Wo pass now to material relevant for tho consideration of Mr. Gratiacn'ssecond submission upon the question whether tho exportation in thiscase was contrary to a valid legal restriction contemplated, in scheduleB to tho Customs Ordinance. Regulation 7 (2) of tho 1SG1 Regulationsas amend'd in 19(33 provides that an application for an export liccncoshall bo in a form approved by tho Board, and it has been assumed onall sides that tho form upon which the petitioner mr.do this applicationfor a licence was ono so approved by tho Board. This form requiredtho petitioner's Company to specify tho port of discharge and tho finaldestination of tho consignments in respect of which tho Compan}7 soughtexport licences and tho company specified respectively “ Halifax and
Canada ’. Similarly, tho-form of tho licences issued to tho Companyspecified " Halifax ” as tho port of discharge.
From certain averments in an affidavit of tho 1st responclont and fromtho contents of copies of certain notices which have been produced, itwould appear that the Coconut Board had decided and notified to shippersthat shipments of desiccated coconut to the United Stales would bo autho-rised by licence only if officers of tho Board had first exercised certainspecial precautions in tho matter of tho supervision of the manufactureand tho inspection and testing of desiccated coconut intended for exportto tho United States. In order that those special precautions may betaken, it was important that tho Manager should have notico in advanceof a shipper’s ntention to export desiccated coconut to tho United States.Two Circulars to Shippers, dated 29fh November, 1963, and 21st July,196G, accordingly requested shippers to notify tho Board immediatelyupon their entering into contracts with American buyers, and to furnishparticulars of the mill from which desiccated coconut would bo purchasedfor shipment under such contracts. In tho instant case, the Companydid not furnish any such notification or particulars to tho Board althoughtho petitioner docs not deny that his Company had received the twonotices, to which wc have referred. Tho position for tho Crown, has boonthat tho potitioiuT was aware that tho exportation of theso threo consign-ments to Now York would not havo boon authorised bj' oxport licenceif tho Company’s applications of March 19GS had specified tho UnitedStatos, and not Canada, as tho final destination of tho sh’pmonts.
One point in Mr. Gratiacn’s second submission is that the licences,issued to the Company, while specifying Halifax as the port of destination,did not in terms state, either that they authorised exportation only tothat port or that the shipments must not be exported to any port in theUnited States. We should add that there is nothing in the Regulationswhich might indicate to a shipper that the specification of a destination,
43
JUDGMENT OF THE COURT—Jayawardene v. Silva
whether in a shipper's application or in the Manager’s licence, is restrictivein the sense that exportation to any other destination would constitutea breach of a fundamental condition of the licence. We were referredin this connection to paragraph (o) of s. 30 (2) of the Ordinance whichgave power to maintain statistics relating to the coconut industry ;the specification of the destination of shipments, it was'contended, mayhave been required merely for statistical purposes, and not for the purposeof controlling the destination of exports. It was further urged that thespecification of a destination in an export licence is no more restrictivethan is the specification of the name of the vessel in which a shipmentis to be made ; learned Crown Counsel did not argue that the specification.of the vessel was intended to be restrictive.
~We understand that the Board's decision to exercise special precautions•'and control in relation to the export of desiccated coconut to the UnitedStates was one of much importance for the maintenance of the reputationin that country of Ceylon’s product and for the promotion of our exportsto that country. It is surprising therefore that neither the Regulations;nor the Forms employed were altered in order to give clear effect to that'decision, and to avoid the possibility of objections that export to theUnited States was not in contravention of the Board’s licences. Jsever-theless, but with some hesitation, we think that in all the circumstancesthese objections must be overruled. The Company was aware of thecontents of the Board’s circulars and of the intention to prevent exportsto the United States of desiccated coconut, in respect of which the specialprecautions therein mentioned had not been taken. The Company wasthus aware that, had the United States been specified in its applicationsas the final destination, the licences either would not have been grantedor else would have been granted only after a special investigation as tothe source and quality of the proposed shipments. In these circumstances,when the Company specified Canada as the final destination, it representedto the Board that the shipments were not destined for the United States ;and the Company was further aware that the Board’s licence was notintended to authorise exportation to a destination in the United States.The Company cannot rely on the lack of clarity in the four licences inorder to disclaim knowledge of the fact that the licences did not authoriseexportation to the United States. We hold therefore that the exportationto that country was in contravention of the terms of the licence. Weshould add that we were not invited to consider whether or not thepetitioner himself had knowledge of the matters of which we hold theCompany to have been aware.
For the reasons we have stated, we must now assume that the licencesissued in this ease did purport to restrict or prohibit exportation of thethree consignments to the United States. This means in effect that wehave to read the entry in the licences of the destination as being “ Halifax,and not any destination in the United States ”. The further questionwhich now arises is whether the Manager had power in law to make suchan entry, or in any other manner to prevent the exportation of these
JUDGMENT OF THE COURT—Jay a warden e v. Silva49
shipments to the United States. The question, framed somewhatdifferently, is : if the Company had in its three applications specifiedthe United States as the final destination, did the Manager have powerto refuse the licences solely on the ground that there had not beencompliance with the requirements set out in the Board's circulars ?
Upon this question, it was submitted for tho Crown that Parliament’sintention in enacting provisions for a scheme of licensing must boconstrued in tho light of prosont-day economic conditions and of thoneed to rcgulato trading with any country in particular products byreference to tho special requirements of the county of importation. Forexample, it was suggested, the authorisation of exports from Co}i on toparticular countries only m#3r bo desirable in order to redross an adversebalance of our trade with those countries, or because the exports mightfetch higher prices in thoso countries than in others ; again, as is tho casewith rubbor produced in Coj'lon much of which is tho subject of a“ barter ” agreement, it maybe" desirable-to “ channel-’’-Ceylon-exportsto those countries which supply some of our essential requirements. Asto the particular restriction in the present case, we have no doubt thatthe Coconut Board decided to take special precautions before authorisingoxports of desiccated coconut to the United States, for tho very goodreason that the Health authorities of that country insist on highstandards of quality and purity.
Crown Counsel argued that the provisions of S. 20A and of S. 20B (inparticular paragraphs (a) and (e) ) are wide enough to authorise theBoard or its Manager to impose what was described as a system of“ destination control ”. He submitted that the word “ export ” carrieswith it tho connotation of “ sending out to another country ” ; thissubmission is undoubtedly correct, being borne out by the fact that somesections of the Customs Ordinance distinguish between “ exporting ” and“ taking out ” of goods. Relying on tho considerations mentioned in thepreceding paragraph of this judgment, Crown Counsel further submittedthat s. 20A of the Ordinance, and/or paragraph (a) of s. 20B,contemplate that it is not only exportation from Ceylon generally, butalso exportation to any particular country, which may be regulated by alicensing scheme.
It was urged that the purpose of the Board, in deciding that specialprecautions must be taken in the case of desiccated coconut intended forshipment to the United States, was not to impose a higher standard ofquality or purity in such a case, but only to make investigations andinspections which should eliminate as completely as possible tho risk thatsuch shipments do not attain the prescribed standards. In this view ifthe special precautions thus taken reveal deficiencies in standard orquality, then the Board would refuse a licence for exportation, not only
50
JUDGMENT OF THE COURT—Jayawardtne v. Silva
to (ho United States, but to any country whatsoever. But this viow oftlio matter is not readily roconcilablo with a relevant paragraph in thoBoard’s Circular of 21st July I960 :—
" Tho Board’s inspectoi's will then pay sjiccial attention to thomanufacture of tho material destinod for America, and will carry outbag by bag sampling. If tho material is likely to satisfy Americanrequirements, licences for shipment to America will be issued. Liccncoswill not bo granted in respect of material that does not reach thorequired standard.”
Tho only explicit provisions in tho regulations which refer to tho issueof export licences are found in regulation 7. Paragraph (3) of thatregulation refers to certain “ bacteriological reports lolatiug to thoproduction of tlio mill”. Having regard to tho form provided by thoBoard for tho'making of applications for oxport licences, this roferenco isto the mill at which is manufactured tho desiccated coconut which anai^plicant intends to oxport. If tho reports relating to the production atthat mill havo consistently been satisfactory, paragraph (3) requires thattho Manager “ shall issue ” tho oxport licence. This paragraph byimplication empowers the Manager io refuse a licence if tho relevantbacteriological reports arc not satisfactorj'. Thereafter paragraph (9) .also empowers tho Manager to refuse a licence if tho packages intendedfor oxport do not boar labels issued b3r lum. It is not tho position of thoCrown that the company’s applications could havo been refused oncither of those groiuids, or that, tho Manager was dc-ccivcd into issuing tholicences to tho Company despite tho existence of one or other of thosegrounds for refusal.
Regulation 1L prosc-ribo:? standards of quality for tho manufacture ofdesiccated coconut, and legu'ations 14. 17 and 19 contain clahoratoprovisions regarding the packing of dciicoaUd coconut for export, thoconditions with which a shipper’s store and packing room must conform,and tho inspection of such s;orc and packing rooms by the Board’sofficers. Despite tho absence of any link between Regulation 7 andthese other regulations, it may havo bei-n open to the Crown to argue thatthese other r–gi;l»lions qualify tlio apparently peioinptorv provision inregulation 7 (3). which omitles an applicant <o an export licence if tliocondition sprM.'Md in that regulation is satisfied. But such an argumentwas not prosiu'ed by tii<; Ciown in this ease., because there is no a Vermontthat there was any breach of any of thf-se regulations.
Onr consideration of tho relevant regulations shows that there is noprovision in the regulations, uliich requires a shipper to give notice tothe Boa id at the stage when ho enters into a contract with any foreignbuyer or with a buyer in any particular foreign country, or whichempowers the Manager to refuse a licence for export to any particularcountry on tho ground that spocial precautions could not bo taken tosirperviso tho manufacture of tho product intended to be oxported.
JUDGMENT OF THE COURT—Jayatcardene r. SilvaCl
It thus appears that tho Manager’s alleged power to control thedestination of a shipment of desiccated, coconut oxists, if at all, only byimplication ; namely that any statutory requirement, of a licence toexport goods implies that the authority issuing tho liccnco has power toimpose a restriction as to tho countries to which they may bo exported.In considering whether such a power ruay bo implied, wo havo to bear inmind tho following observations of Lord Halsbmy L.C. in Eossi v.Edinburgh Corporation 1:—
“ What is sought to bo done, whether by by'-Iaws, or indirectly bythe language of tho liccnco that is issued, is something that can only bodono by tho Legislature. It is a restraint of a common right which allHis Majesty’s subjects havo—tho right to open their shops and to sellwhat they plcaso subject to legislative restriction—and, if there is nolegislative restriction which is apjwopriato to tho particular thing indispute, it seems to mo it would bo a very serious inroad upon tholiberty of tho subject if it could be supposed that a more singlerestriction which tho Legislature-lias imposed could bo-enlarged and -applied to things and circumstances other than that which thoLegislature has contemplated. ”
Wo have unfortunately not been ablo to reach imaniruity upon thoquestion whether or not tho Manager doe3 have tho implied or inherentpower which learned Crown Counsel claimed that he has. That being so,wo do not consider it appropriate, in tho circumstances of this case, toexpress by way of an obiter the opinion of tho majority of us on thisquestion. Wo shall only set out therefor© tlio substance of the opposingarguments.
Tho position of the Crown was that it is implicit in any system of .licensing of exports that goods aro not to bo sent out of tho country toany other country except upon tho authority of a liccnco authorising thosending of tho goods to that other country. Tho fact that exportlicences are and may bo issued which aro silent as to destination, in thisview really creates no difficulty. A liccnco may expressly or impliedlygrant wido authority to export to any part of the world, and where alicence is silont as to destination, it implied y gives authority to do so. Intho ordinary case, a liccnco would give authority for tho export to aparticular country or place. In such a case, tho authority to export tothat particular country or place is tho pith and substance of tho licenceand s not a condition or restriction attached to it.
If the Coconut Board had reason to think that it was in the interests ofthe industry that more stringent stops than wero ordinarily taken shouldbo taken to ensure that desiccated coconut to bo exported to Americanports was free of contamination and conformed to tho standards laiddown by tho regulations, there was no reason why it should not issueexport licences after such export only after such stops wore taken. Tho
1 1905 A. O. 21 at page 26.
52
JUDGMENT OF THE COURT—Jayawardene v. Silva
regulations provide for sampling, for inspection of the factory and thoshipper's placo of work whoro tho packing is done. It was submittedthat one of tho purposes which was served by tho special precautionstaken by tho Board was to ensure that shipments to American ports donot fail to attain to the prescribed standards of quality and purity, andthat this was a legitimate purpose.
Crown Counsel further urged that, even if the Board had no power torequire for exports to American ports standards higher than thosegenerally prescribed, the petitioner’s Company nevertheless took animproper course in failing to disclose its intention to export these ship-ments to tho United States. If the company had been refused a licenceon the ground that tho shipments did not conform to such a highorstandard, it could have insisted on its rights and, if necessary, sought itslegal remedy against a wrongful refusal to issue tho licence. It was,however, not open to the company to resort to the device of applying foran'export licence to send desiccated coconut to Halifax and thereafter tosend that desiccated coconut to How York, for an export licence to sendgoods to Halifax gives no authority to send them to any other placo.
Tho arguments for the petitioner on this question directed attention tothe context of the Ordinanco, particularly j>aragraphs (6) and (c) ofs. 20B, and of the regulations themselves.
In tho case of the oxport of desiccated coconut, both the Ordinanco andtho Regulations enter into comprehensive details indicative of tho natureand oxtent of the contemplated scheme of export licensing : standards andmethods of manufacture, quality and purity, sampling, storage, packingand labelling of tho product to bo exported—all these matters aro thosubject of express regulation. It was contended that if a particidar intendedshipment of the product satisfies all these detailed express requirements,it would bo unreasonable to suppose that tho Legislature or the Ministerhad in contemplation a further unspecified restriction on export, namelythat the Manager may refuse to authorise oxport to a particular countryif ho is of opinion that tho shipment “ does not satisfy tho requirements ”of that country. Had such an additional restraint boon in contemplation,on© would expect ovon a passing or indirect reference to it in the regu-lations. Instead, and on tho contrary, regulation 7 (3) provides that thoManager shall issue the licence if the condition stated in that regulationis satisfied.
IMr. Gratiaen further submitted that if tho regulations could properlyhavo introduced “destination control ”, the power to do so is reforabloto paragraph (e) of s. 20B, which enables regulations to bo mado for“ tho issuo ” of oxport licences and for “ tho terms and conditions subjectto which ” licences shall bo issued. A specification " Halifax, and nottho United States ”, or a restriction “ any destination other than thoUnited States ”, would be, in his submission, a condition of a licenco, and
JUDGMENT OF THE COURT—Jayawardene v. Silva
53
the insertion of such a condition would bo lawful only if it is cloarlyauthorised by the regulations. In the absence of such an empoweringregulation, the proper conclusion, he argued, is that the Manager had noauthority to impose such a condition.
Learned Crown Counsel also relied on something in the nature of an“ estoppel Ho contended that since the Company accepted and hadthe benefit of an export licenco, the validity of a restriction or conditioncontained or implied therein cannot now bo challenged. We adopt• -with respect the answer given by Sankoy J. (as ho thon was) to a similarcontention which was made in the case of Ellis v. Dubowski 1.
We need refer only to one further point raised on behalf of the petitioner.It was contended that the only “ offence ” referred to in the notice of17th September 1968 was that of making a false statement in the “ intendto ship ” applications, and that the notice did not inform the petitionerof the much more serious charge that thcrc had bcon cxportation contraryto a restriction referred to in s. 130 of the Customs Ordinance. Wearo satisfied, however, that there is no substance in this contention.The notice refers to a contravention of s. 130 of the Customs Ordinance,read with the Coconut Products Ordinance ; it uses the languago ofs. 130 “ persons concerned in the exportation ” ; it states that the Desic-cated Coconut were shipped to the port of New York, instead of the portof Halifax ; and it refers to a forfeiture of three times the value in termsof s. 130. Moreover the arguments of Counsel who appeared for thepetitioner at the inquiry held by the Collector show clearly Counsel’sknowledge that the charge was one of exportation to an unauthoriseddestination. No grounds were made out, in our opinion, for an objectionthat the petitioner did not have notice of the “ charge ” against him,or that in any other respect the Collector failed to observe the principlesof natural justice.
These applications to this Court were probably made in reliance uponthe two earlier cases which wo have held to have been wrongly decided-While the application is dismissed, we make no order as to costs.
(Sgd.) H. N. G. Fernando,Chief Justice.
(Sgd.) Saaierawickeame, j.
Puisne Justice.
(Sgd.) Weeramantby,
Puisne Justice.
Application dismissed*
1 {1921) 3 K. B. 621 at p. 627.