061-NLR-NLR-V-73-D.-P.-JAYASEKERA-and-2-others-Appellants-and-MINUWANGODA-CO-OPERATIVE-SOC.pdf
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JAYASEKERA, v. jlinuwangoda Co-operative Soeie'y Ltd.
1970Present : H. N. G. Fernando, C.J., and Alles, J.
D. P. JAYASEKERA and 2 others, Appellants, andMINUWANGODA CO-OPERATIVE SOCIETY LTD.and others, RespondentsS. O. 130t67 (F)—D. G. Ncgombo, 397{Spl..
Co-operative Societies Ordinance—Claim by a co-operative society for moneys due froma member of its committee—Exclusive jurisdiction of the Courts over suchdispute—Invalidity of reference for arbitration—Ceylon (Constitution) Orderin Council, 1916, s. 88.
Vhero a co-operative socioty claims that a member of' its committee. of management has failed to account for moneys entrusted to him, the jurisdic-tion to adjudicate upon such a dispute is vested by the Constitution in the
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H. N. G. FERNANDO. C.-J.—Jayaaekera v. Minutcangoda
Co-operative Society Ltd.
Courts and is not ousted by the provision of tho original soction 45 of theCo-oporative Societies Ordinance which, before the Constitution Order in Councilof 1946 came into operation, purported to vest it in an arbitrator. The morefact that the original soction 45 of tho Co-operative Societio3 Ordinance was notamondod by a Proclamation undor soction 83 of the Constitution does notjustify an orgtimont that all its provisions continued to bo valid despite thefact that somo of thorn are in conflict with over-riding provisions ofthe Constitution.
.A PPEAL from a judgment of the District Court, Ncgombo.
Bala Nadarajah, for the 1st to 3rd defendants-appellants.
Nimal Senanayake, with Miss Adela P. Abeyratne, for the plaintiff-respondent.
Cur. adv. vult.
June 16, 1070. H. N. G. Fernando, C.J.—
This is an appeal against an order of the District Judge that tho awardof an arbitrator appointed under the Co-opera.tive Societies Ordinancebo enforced as decree of Court. A Bench of three Judges held in thecase of Karunalilleke t>. Abeywira1 that a dispute between a societyand one of its officers concerning a matter arising from a contractualrelationship, 6uch as the entrustment of the society’s funds to theofficer, is not one which 11103’ lawfully be decided b3’ an arbitrator,because the determination of such a dispute involves the exercise of thojudicial power of the State.
Jn the instant case, the jiersons who had custodi’ of the society’sfunds were members of tho committee of management. Learned Counselwho appeared for the society argued that, even before the Ordinancewas amended in 1949, a claim by a society’ against its members for anydebt or demand was deemed b3’ the original Section 45 to be a disputewhich could be referred for arbitration. He sought on this ground todistinguish the case of Karunatilleke v. Abeyirira, which in his contentioncovered onl* cases of claims by a society- against an officer. No doubt thejudgment in that case did take account of the fact that claims againstan officer were not, prior to the amendment of 1949, included in theclasses of disputes specified in the original s. 45. But the judgment,brief though it was, did in two passages express doubts whether theoriginal s. 45 had been intended to appty- to a claim by a society againstits members "not arising by reason of their membership of a society, butarising instead upon transactions involving ordinary contractual rightsand obligations”.
* (I960 cs N. L. Jl. SOX
35CH. N. G. FERXAXDO, C.J.—Jayasckera v. Minuuangoda
Co-operative Society JJd.
Counsel’s contention in the present case' is based on the assumption-that the original s. 45 did contemplate reference of such claims toarbitration ; and the contention was that-, since s. 45 was in operationbefore Ceylon’s present Constitution came into force, references authorisedby the original s. 45 are )*ct valid. But even if that assumption becorrect, Counsel’s contention is in my opinion unsound.
It cannot be denied that an adjudication upon a claim of thi*3 naturedoes involve the exercise of judicial power, and Counsel quite properlymade no such denial. Hence the question is whether, despite thatconflict, the exercise of such jurisdiction by an arbitrator can be regardedas valid because s. 48 of the Ordinance conferred that jurisdiction beforethe Constitution-came into operation.
When the Cej-lon (Constitution) Order in Council of 1946 was enacted*there clearly was contemplation that pre-existing Ordinances did containprovisions which would conflict with provisions of the Order in Council.Accordingly, s. 83 of the Order in Council authorised the Governor tomake proclamations amending, repealing or modifjdng written law inorder to bring such law into conformity with the provisions of theConstitution. Numerous amendments were in fact made in pursuanceof this authority ; but the fact that a particular written law was notthus amended cannot in reason have the consequence that the law doesnot conflict with the Constitution or that it must be regarded as validdespite such conflict.
A single instance suffices to make the position clear. Section 54 ofthe Courts Ordinance, which formerly provided for the appointment ofDistrict Judges and Magistrates by the. Governor was altered by deletingthe reference to the Governor’s power of appointment. That alterationwas made for the quite obvious reason that the power of appointmentof judicial officers was vested by the Constitution in the Judicial ServiceCommission, and that the alteration was necessary to avoid conflictbetween s. 54 and the Constitution. But even if (by accident ordeliberately) no such alteration had been made in s. 54, the Governorwould have ceased to be vested with that power when the Constitutioncame into operat ion. Thus the mere fact that s. 45 of the Co-operativeSocieties Ordinance was not amended by a Proclamation under s. S3of the Constitution does not justify an argument that all its provisionscontinued to be valid despite the fact that some of them were not inconformity with over-riding provisions of the Constitution.
Counsel sought also to rely on judgments, of this Court, A. G.Gunasecla v. A.R. Udugamax, Panagoda v. Budinis Singho3, Xavier v.Wijeyehoon3, upholding the validity of the exercise of judicial power byCourts Martial, Workmen’s Compensation Tribunals and RevenueTribunals. I need only say that those judgments were based on specialconsiderations to which they refer, and not on the mere fact that the
* * (1964) 69 N. L. S. 193. *(.1966) 63 N. L. It. 490.* (1966) 69 If. L. R. 197. •Perera v. de Vos
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Statutes establishing those tribunals were enacted before the presentConstitution came into force. Similar special considerations do notarise in a case where a co-operative Society claims that a member ofits committee of management has failed to account for moneys entrustedto him.
To repeat the language of the judgment in Karunalillalce v. Abeywira,"the liability of the members of the committee in this case arises at theleast upon an implied contract, in the nature of agency, and the disputeconcerning the existence of this liability and the duty to perform itis an ordinary civil dispute within the traditional jurisdiction of thoCourts ”, The jurisdiction to adjudicate upon such a dispute is vestedby the Constitution in the Courts, and that jurisdiction is not ousted byany provision of the Co-operative Societies Ordinance which purportsto vest it in an arbitrator.
For the reasons now stated, we made order allowing this appeal, andquashing the order made by the District Judge on 21st March 1967 forthe enforcement of the award of the arbitrator.
Alles, J.—I agree.Appeal allowed.