DAHANAYAKE v. PIERIS

102-NLR-NLR-V-45-DAHANAYAKE-v.-PIERIS.pdf


Dahanayake tj. Pieris.
cvoo
1944
Present: de Kretser J.DAHANAYAKE v. PIERIS.
In the Matter of the By-Election for the ElectoralDistrict No. 45.—-Bibile.
Electionpetition—Respondent’scontract withGovernment—Disqualification
ofrespondent—Burdenofproof—Transferofcontract—Scope ofproviso
toArticle-—Ceylon (StateCouncil Elections)Order in Council,1931,
Article 9 (d).
Where theelection ofthe respondentto the StateCouncilwas chal-lenged underArticle 9(d) of theCeylon (StateCouncilElections)
Orderin Council onthegroundthathehad entered intocontracts
withthe GovernmentofCeylonandwhere the respondentclaimed
that he had got rid of that disqualification,—
Held,thatthe burden wasontherespondent to prove that he hadgot
rid of the disqualification or that he came within the exception providedby the Article.
Where therespondenthad- enteredinto contracts withGovernment
and had applied to assign the contracts to a Company that was beingincorporated,—
Held,thatthe assignmentofthecontracts should be made withthe
same formality with which the contracts had been effected.
Quaere, whether a private company, which may consist of two members,comes within the proviso to Article 9 of the Order in Council.
I HIS was an election petition in which the respondent’s election to the
X Bibile seat in the State Council was challenged on the groundthat he had entered into contracts with the Government of Ceylon andwas thereby disqualified under Article 9 (d) of the Ceylon (State CouncilElections) Order in Council.
N. Nadarajah, K.C. (with him. C. S. Barr-Kumarakulasingam andH. W. Jayawardene), for petitioner.—-The evidence clearly shows that thecompany floated by the respondent is a sham and had been createdmerely to assist the respondent to get rid of his disqualification. Eventhough the prospectus shows that the company was floated to acquireand run the respondent’s former businesses, there is nothing to showthat they have been acquired. The statutory returns have not beenmade to the Registrar of Companies.
One cannot say that there has been a valid or effectual assignmentof the contracts. Especially in the case of the Bibile Maternity Homecontract, there was in fact no valid assignment till June this year. Themere alteration in- the respondent’s copy is insufficient. The actualcontract, i.e., the one in the possession of the department, must be alteredand signed afresh. The requirements laid down in the Financial Regula-tions must be strictly complied with-—-vide Financial Regulations 765
Even though the contract may not be enforceable, it can still dis-qualify—see Rex v. Francis1.
T
and 766.
1 21 B. J. A.. B. 304.
13J. N. A 93349 (11/49)
Dahanayake v. Pieris.
If there has been a valid and effectual assignment to the company,the disqualification would yet operate. The respondent and the othermembers of the family are together holding and enjoying the benefitsof the contract. They cannot seek to come in under the proviso toArticle 9 (d) of the Order in Council. This provision has been borrowedfrom the English Act 22, Geo. 3, c. 4-5 of the year 1782. The words “ in-corporated trading company ” in the proviso must hence be given the-same meaning as given to it in 1782. At that time the only incorporatedcompanies were companies created by Royal Charter or by Statute.The modern company created under the Companies Ordinance did notcome to be recognized as a corporate body till 1844—vide Palmer'sCompany Law (17th Edition) pages 1-10. See Oakes v. Turquand l.A company created under our Companies Ordinance can only come underthe latter part of the proviso and, then only, if it consists of more thanten persons. The new company which the respondent has formed hasless than ten members.
The disqualification operates on the date of nomination—Cooray v.de Zoysa z.
H. V. Perera, K.C. (with him E. F. N. Gratiaen and G. T. Samara-wickreme), for respondent.—The Roman-Dutch law as to the form ofcontracts is not now in force with us and so any contract may be es-tablished by the consensus of parties unless there is a positive require-ment of statute law, that a particular form should be observed. Acontract of novation need not be in any particular form nor need it evenbe in writing—vide Mohamed v. Warind 3, Rodrigo v. Ebrahim *.Wille’s Principles of South African Law, p. 274. Although the word“ assignment ” is used the parties really contemplated a novation wherebya new party, namely, the company was substituted for the respondent—Vide Lee Introduction to Roman-Dutch Law (3rd Edition), p. 252.
The conduct of the parties and the correspondence that passed showclearly that there was offer and acceptance. In the case of the BibileMaternity Home contract there was acceptance of the respondent’s offeron behalf of himself and on behalf of the company as its managingdirector when the decision of the Tender Board was communicated to himby the Sanitary Engineer.
The effect of a novation is to discharge not only the original obligationbut also accessories to it such as suretyships—vide Wille’s Principles ofSouth African Law, p. 274; Voet XXTVI. 2, 10, XX. 4, 32. On novationof the contract therefore the suretyship obligation was also discharged.Even though the respondent was liable as surety for the due executionof the contract after its assignment to the company, there would beno disqualification—vide Maidstone Case (Rogers Elections (12th Edition)Appendix).
The term incorporated trading company cannot be given the meaningcontended for by the petitioner as there are no companies incorporatedby charter in Ceylon and the provision would therefore be nugatory.The distinction is between trading and non-trading companies—videHalsbury, Vol. V., p. 13. Companies registered under the Companies
1 (1867) L. It. 2 H. L. at 358.
3 41 N. L. R. 121.
3 21 N. Z/. R. 225.* 26 C. L. W. 62.
DE KZRETBEB J.—Dahanayake v. Pieris.
387
Ordinance, No. 51 of 1938, are’incorporated companies; section 2 of thatOrdinance sets out the “ mode of forming an incorporated company ”,The other companies referred to in the latter part of the proviso wouldinclude unincorporated companies not registered under the Ordinance—vide section 343, Companies Ordinance and non-trading companies.
Section 16 (1), Companies Ordinance, makes the certificate of incorpora-tion conclusive, inter alia, that " the association is a company authorisedto be registered and duly registered under the Ordinance The factthat all the shares in the company are held by the members of one familycannot affect the question Saloman v. Saloman l.
.Cut. adv. vult.
July 20, 1944. de Kretser J.—
The member for Bibile died on the 2nd October, 1943. A by-electionwas gazetted, nomination day being fixed for the 22nd December, 1943'.On that date five candidates were nominated, viz., the petitioner, the-respondent and three others. Polling was fixed for the 11th March, 1944,.and the respondent was declared elected. The petitioner filed a petition on1the 3rd April challenging the election of the respondent under Article 9>
of the Ceylon (State Council) Order in Council, 1931, on the groundthat the respondent held contracts with the Government of Ceylon.On particulars being called for he stated what the contracts were,and at the trial his objections were further elaborated. The contractwhich he specially emphasized was one for the construction of sc.Maternity Home at Bibile. He also based objections on contracts farthe building of the Guruhella Group School and Schools at Hathakmeand Pussellakanda.
The evidence was to the effect that the respondent was a well-knownGovernment Contractor and that he carried on business under his own.name, also as the Uva Forwarding Agency and as a partner in the firm of
B. Perera & Co. The exact scope of the business done by the respond-ent has not been fully proved, the only evidence besides the writtencontracts coming from the petitioner. The petitioner was more or less;a stranger in the district, and purports to speak partly from information,and partly from what he saw. His capacity to speak was challengedby the respondent but the respondent himself gave no evidence. It isclear, and it is admitted for the respondent, that he was anxious to rid.himself of the disqualification which existed by reason of his havingcontracts with the Government, and he was naturally anxious to dcrso before nomination day. He accordingly decided to have a privatecompany formed, consisting of himself, his two brothers, his sister, hisbrother’s wife, and a first cousin and to transfer all his interests to thiscompany. He seems to have employed one Mr. Mivanapalana, who isalleged to have considerable experience in promoting companies and theresult was that the Memorandum of Association and Articles were handedto the Registrar of Companies on the 7th of December, and he issued hiscertificate the same day. The new company, called the Trading and For-warding Agency, came into existence at once. When it commenced to dobusiness would be quite another thing. According to the Memorandum ofAssociation it was to acquire and carry on besides the Uva Forwarding .
1 (1897) A.. C. 22.
388
DE XSETSER J.—Dahanayake v. Pierig.
Agency and the business carried on by S. A. Pieris, the respondent,the business originally carried on by D. L. Perera & Co., and later carriedon by the respondent and his brothers, Sirisena and Bandusena. TheMemorandum further contemplated contracts with Government depart-ments, Local councils, the business of importers and dealers in rice,eurrystuffs, &c., clothing, millinery and the taking over of other businesses.Clause 8 to which the petitioner draws attention provided that thecompany could “amalgamate, unite, or co-operate, either generallyor to any limited extent for any period (determinable, continuous orotherwise) with any corporation, company, person or persons alreadyor hereafter to be established for or engaged in objects all of which areor shall be within the scope of or connected with any of the objects ofthis Company and to purchase or acquire the business or any interestin the business, or in any branch of the business, carried on by any suchcorporation, company, person or persons, and being a business whichthis Company is authorised to carry on, and for any such purpose to makeand enter into any contracts, agreements, or arrangements and to under-take any liabilitiesI pause to note that in this document, the Uva
Forwarding Agency is said to be carried on by both the respondentand his brother, Sirisena, whereas P 4 which is the certificate of registra-tion of the business name mentioned only the respondent, and P 5 which isthe registration of the business name X). L. Perera & Co., includes besidesthe three names mentioned in P 12, the names of six females. Both P 4and P 5 were declarations made in 1935. The Memorandum P 12 issigned by two of the females named and we know that Celina Pieris wasthe sister and that the other was the wife of the respondent’s brother,Bandusena. The parties to the Memorandum, therefore, with theexception of William Daniel (the cousin) were interested in the threebusinesses earlier existing. The contracts in question, however,, do notaffect D. L. Perera & Co.
By the Articles of Association the three brothers were to be directorsof the company, the respondent being the Managing Director “ so longas he may choose to remain and function as such Managing Director ”.The remuneration of the Directors was to be determined by the directorsin meeting or in terms of any agreement entered into between thecompany and a director or directors with the consent of the companyin general meeting. The Articles do not provide whether this remunera-tion was to be in the form of a fixed salary or be on a commission basis,and there is no evidence on the point. It is a matter of some importance.Mr. Nadar a jah for the petitioner argued that in view of Clause 8 of theMemorandum it was open to the company through its Managing Directorto enter into an agreement with the respondent by which the profitsunder the contracts with the Government would be shared, and that thewhole position would be obscure until the contracts had not merelybeen changed in the eyes of the Government but until due provisionhad been made as between the respondent and the new company. Thereis no evidence as to what the terms were on which his business was orwould be taken over. There is a letter from the respondent on behalfof the new company to the Sanitary Engineer undertaking to carry on thecontract on behalf of the new company. The contract for the Maternity
X>E KRETSEB J.—Dahanayake v. Pieris.
389
Some was entered into on the 8th of May, 1942, and the work was to becompleted by the 20th of September. The time was-extended till the 31stof March, 1943, so that-the work, which was estimated to cost Es. 8,834.43should have been well advanced in December and the respondent shouldhave received a fair percentage of its price, provision having been madefor monthly payments. The respondent was the Managing Directorand as such would have the main burden of the contract and the familycompany may well have been generous in their treatment of him. Adirector who receives a monthly salary stands on quite different footingfrom a director who is paid on a commission basis. There might wellbe no profit to the new company from the contracts.
Once the new company was formed on the 7th of December, promptsteps were naturally taken. By letter dated the' 9th of December therespondent informed the Sanitary Engineer, who had entered into the con-tract for the Maternity Home at Bibile on behalf of the Government, that he•desired the contract to be “altered” into the name of the new company,undertaking on behalf of the new company as its Managing Director tocarry out the contract. On the Sanitary Engineer receiving this letter onthe 10th of December, he acted with commendable quickness, examinedthe Memorandum and the Articles and sent a letter by hand to theDirector of Medical and Sanitary Services recommending the transfer.That department referred him to the Deputy Financial Secretary, byreply of the same date, and on the same day the Sanitary Engineerwrote to the Deputy Financial Secretary. On the 11th the DeputyFinancial Secretary replied inviting the Sanitary Engineer or his re-presentative to be present at a meeting of the Tender Board on the 14th.Mr. David, an assistant, attended, and, on his return, minuted as follows-to the Sanitary Engineer “recommendation approved subject to amend-ment of contracts, &e.” The Sanitary Engineer says he saw this minute.The meeting of the Tender Board had been fixed for 2.30 p.m. and the•chances are that he saw the minute on the 15th. He says he gaveinstructions that the contract should be called for from the office of theDirector of Medical and Sanitary Services so that it may be altered andInitialled by the parties and he left on circuit on the 16th, returning viaBadulla to Colombo on the 22nd or 23rd of December. Meanwhile on the18th of December his office had called for the contract and on the 18th hereceived a letter from the Deputy Financial Secretary stating that theTender Board had no objection to the transfer of the contracts. Thisletter made no specific requirement that a fresh contract should be enteredinto and confined itself to its proper scope. It did, however, contemplatea subsequent transfer of the contracts and Mr. David could hardly havemade the minute he did unless it had been made clear at the meetingof the Tender Board that he was not to assume that all formalities had beencomplied with. On this letter Mr. Alwis endorsed “inform contractor, pi.”.Now, as he was away on the 18th this endorsement could only havebeen made after his return. A letter was sent, dated the 24th of December•to the Trading and Forwarding Agency, Ltd., informing them thatthe Deputy Financial Secretary and the Tender Board had agreed that"there was no objection to the transfer. These documents are of im-portance since Mr. Alwis alleges that he took with him on circuit a copy
390
EE KBBTSBE J.—Dahanayake- v. Pieris.
of the contract and had requested the respondent to meet him on the19th'at- Bibile, bringing his copy of the contract with him. He alleges-that after lunch at the Resthouse they duly “altered” the contractsboth of them initialling the two copies. Mr. Alwis’ copy has dis-appeared. The respondent has produced his copy, marked R 6, pur-porting to be initialled by Mr. Alwis and himself and bearing the date19th December, 1943. The petitioner strongly contests this allegedinitialling of documents but admits there may have been a meeting,as the entry in the Resthouse book indicates that. He points to thefact that Mr. Alwis is not likely to have taken upon himself to makeany change till he had received official sanction and that his letter ofthe 24th December negatives any previous intimation to the contractor.Mr. Alwis himself spoke of the document which was filed in the officeof the Director of Medical and Sanitary Services as being the contraet.
It was the document which was stamped and to which was annexed thesecurity bond and the specifications. Junior Counsel for the respondentwas anxious to speak of five “originals” and Mr. Alwis was anxious to-oblige, but it is quite clear that there was only one original and Mr. Alwis-himself said so. Mr. Alwis states that at the present time three copies-besides the original contract are made, making four documents in all.But he alleges that at “that time” there used to be five documents.He can quote no rule nor give any reasons for five copies. When thecontract was made, he forwarded it with a “duplicate” to the Directorof Medical and Sanitary Services, who returned it to Mr. Alwis’ Officewhere it remains still. It has been produced and marked P 6D.
Now the question whether there was a fifth copy is important. Therebeing one copy with the contractor and one with the Auditor-General asrequired by the Financial Regulations, and four copies being available andall but the contractor’s copy not being initialled on the 19th of Decemberthere had to be a fifth copy which Mr. Alwis could take on circuit. Thisfifth copy has disappeared. Mr. Alwis did not impress me at all as awitness- I expected the respondent would go into the box to supporthim, but he abstained from doing so. The respondent’s Counsel invitesattention to a loose slip of paper now to be found in the file in which someclerk is alleged to have noted on the 15th of December that the agreementhad been taken by the Sanitary Engineer on circuit. This clerk has notbeen called. The petitioner challenges the document. The file, accordingto Mr. Alwis, was paged only when it became necessary to produce it in'Court, and it is quite clear that even then some of the paging was altered.It was, therefore, quite easy to slip in a bit of paper to support a theorywhich was being put forward by the respondent. I cannot, on theevidence before me, hold that any of the copies was altered or initialledon the 19th of December. This renders it- unnecessary for me to do-more than make a passing reference to R 6.
As soon as it was handed to me, I remarked that only one person had'initialled it. I was then pointed out the lower portion of a configurationand told by the respondent’s Counsel that it was the respondent’s initials'.I remarked that there must have been wonderful unity of mind for thetwo initials to so run into each other as to present one pen-stroke. WhenMr. Alwis was in the box, I asked whether he could tell me where his-
DE KJRETSEB J.—■Daha.na.yake o. Pieris.
391
initials ended him and the other began, and he could not. Counsel thenexamined the initials under a magnifying glass and Mr. Perera remarkedthat there was a tear, but thathad nothing to do withthematter for that
came right at the top and notwhere the twoinitialsarealleged to join.
Even under a magnifying glassI could see nokind ofpenpause or break
in the line. What is more, Mr. Pieris, whenhe puthisinitials in other
places always sloped his letters from left to right and wrote in a thin andspidery way, whereas in R 6 not only is the uniting firm, but, quite unlikehis other initials, he starts with a downward slope from right to left andit is this slope which runs so extraordinarily into the upward stroke ofMr. Alwis’ “A”, Mr. Alwis himself initialling much more clearly thanhe did on ’other occasions. The petitioner’s Counsel was content to makeno point of it. I myself could not believe Mr. -Alwis and accordinglythis matter was not pursued further, nor do J take it more into accountthan to say that it does not remove the impression created by Mr. Alwis’evidence. In my opinion there was no fifth copy ever in existence.If it was, some clerk in the office must have known of it. It must havebeen kept for some purpose, and what the purpose is one cannot seesince on what is called the “duplicate”, P 6D, appears the first alterationof the date for completion initialled by the respondent and Mr. Alwis.A further extension to the 30th of June, 1944, was initialled by Mr. Alwisin the original without a date but his initials were copied into the officecopy by some clerk over the date 14th June 1944, the clerk also copyingthe initials over the same date to the alteration from ‘The Uva ForwardingAgency’ into ‘The Trading and Forwarding Agency’. P 6D was, therefore,not only termed the “ duplicate ” but was the office copy, and thatwas the copy which Mr. Alwis should have taken on circuit if he was soanxious to have the alterations made and initialled with expedition.
The main questions that arise are—
Was the company merely a camouflage and a pretence, there
being no change whatever ?
Were the contracts transferred to the company before nomination
day and the respondent’s disqualification removed ?
Did the company come within the proviso to Article 9 (d) of the
Order in Council ?
With the issue of the Registrar’s certificate of incorporation activityof the company consisted only in the exchange of a few letters between.the respondent, the Managing Director, and Mr. Alwis. None of thesubsequent steps required by the Companies Ordinance were taken tillMay and even then some were not in due form. No nameboard wasput up, as required, on its place of business, no certificate of commence-ment of business, no meeting of directors, no fixing of the remuneration,no allotment of shares. By April the present petition had been filedand then came the steps taken to show the existence of a company andthen only did Mr. Alwis become urgent about the alteration and initial-ling of the original contract. The respondent was clearly disqualified,unless he could bring himself within the proviso, and this he has failedto do. It is noteworthy that no evidence has been produced of thetransfer of the contracts and other business from the previous ownersto the company. The report of the allotment of shares in May is not
392
DE KRETSER J.—Dahanayake v. Pieris.
what is required by section 43. Appropriate forms are provided butwere not used. Form 7 is used where the shares are paid for in cash,and Form 8 where they are allotted for other consideration.In the
latter case contracts in writing duly stamped are required by the section.
In the return made shares have been allotted to 14 persons. The firstfive were interested in the existing businesses and it is scarcely likely thevalue of their rights did not form part of the consideration. The otherswere probably employees since they got a few shares. The vaguenessof the return, with the Ordinance staring them in the face and Mr. Mivana-palana at least to guide them, seems to be deliberate and the return amere cloak and a pretence. The respondent ought to have, and couldhave produced the contracts made with the shareholders, and I amentitled to infer he did not do so either because there was no transferor the alleged transfer was made after the election or because an agreementexists by which he was to keep the whole or greater part of the profits-of the existing contracts. While, therefore, the relatives were willingto provide the goat’s skin for the deception to be practised by Jacob,Jacob remained Jacob and was not regenerate. As the Privy Councilobserved in Norton and Allan Arthur Taylor l, no device to conceal thetrue nature of the transaction is entitled to prevail and Courts of Justicemust be vigilant on this point. In my opinion the first question must beanswered in the affirmative.
All Government officers and .Government departments are governedby the Financial Regulations, which are published by the Governmentand are available to the public and all contractors with the Governmentare aware of their existence. Certainly the respondent must have beenaware of them not only because he was a well-known Government con-tractor, but also because the evidence in this case indicates that the coursepursued was that laid down in the Financial Regulations. In accordancewith them, tenders are called for on a prescribed form of notice in theGovernment Gazette and three times in one or more newspapers likelyto be read by tenderers. The notice gives full information to the tenderersand requires them among other things to make a deposit in cash before atender form is issued. On a tender being accepted, the tenderer isnotified and if he fails to enter into the contract and to furnish securitywithin 10 days, the deposit is forfeited. On the contract being signed-the deposit is returned. It is clear, therefore, that the tenderer maywithdraw and forfeit his deposit, and that no binding contract existsat that date but only an agreement to enter into a contract. The notice-also states that no contract may be assigned or sublet without theauthority of the Tender Board. The written contracts are on printedforms with blanks for the details to be filled in. The Financial Regula-tions require the head of the department making the contract to takesteps for the completion of the contract and to take a security bond,and provides that the letter from the .tenderer, the schedule of prices andthe bond with the conditions of the contract would then form the com-plete contract, the complete contract being retained by the head of the-department and a copy thereof being at once forwarded to the Auditor-General. Mr. Alwis was, therefore, quite correct in saying that the;
1 L. R. {1906), A. C. 378.
DE EEETSEE J.—Dahanayahe v. Pieris.
393
document lodged with the Director of Medical and Sanitary Serviceswas the contract. He would naturally keep a copy for his own guidanceand the contractor might well require one for reference. These wouldform the four documents which Mr. Alwis states are now being used.It is true that on a tender being accepted, a contract may come intobeing. Building contracts need not be in writing but, where the specifica-tions are many and the sums involved considerable, common sensewould indicate a written contract. Experience endorses this view,and if need be there is the authority of 3 Halsbury, section 340. Govern-ment contracts must be in writing and the tenderer has ample notice ofthe fact £hat there is no contract complete in form until he has signed oneand givensecurity. Insuch circumstances the written contract is
alone the contract which can be recognized. Section 91 of the EvidenceOrdinance enacts that when parties put their contract, into writing,then that writing alone is evidence of the contract. This disposes of theingenious argument raised by Mr. H. V. Perera that on the Tender Boardexpressingits approvaltherespondent'scontract formed on the
tender being accepted, ceasedto exist anda new contract had come
into being,operating bywayof novationto release the respondent,
who thus ceased to be disqualified. He argued that the minute madeby Mr. David should not be considered but only the letter from theDeputy Financial Secretary. I eannot agree. But even if we takethat letter alone, it had expressed the Board's approval of the transfer.A transfer had, therefore, to be made. Tt was what the respondenthimself had asked for and he himself realized that till the transfer wasmade, he would not be released.The notice calling for fenders had
informed him that no assignment would be recognized without theprevious authority of the Board. Both he and Mr. Alwis quite under-stood the position. It was nomination day on which objections werefeared. Once that hurdle was cleared the persons concerned seemedto have lapsed into a feeling of security and directed attention only to theelection and no steps were taken both as regards the steps to be takenby the new company under the Ordinance and the formation of a newcontract. The Registrar of Companies had to call repeated attentionbefore he was informed regarding the registered office of thecompany or a return made of its directors and of its allotment of shares.
Turning to another aspect of the matter it was clearly intended to■effect the release of the respondent by bringing in a new contractingparty and it is clear that until the new contracting party came in, therespondent was not released. Willingness to accept a new partyis not the same as a new party being accepted. Mr- Alwis was theagent of the Government and could only act in terms of the instructionsgiven him. At no time had he before him evidence of an assignmentto the company. The new contract between the company and theGovernment dr the contract of assignment from the respondent to thecompany could only be effected with the same formality that the previouscontract had been effected. A fresh security bond was required.Whether one considered it an assignment of the contract to the newcompany or a new contract by the company which took the place of theold contract, tbe transfer of obligations ought to be evidenced by a
394
DE KBETSBR J.—Dalianayake v. Pieris.
contract duly stamped and binding on the new party. I do not thinkthat merely scoring out the name of the Uva Forwarding Agency andwriting the name of the new company was sufficient. Even if this be so,this was not done till the 14th of June on which date as a result of an urgentletter from Mr. Alwis, and also probably because the petitioner’s Proctornad applied for certified copies, the respondent and the petitioner’s-Proctor were present in Mr. Alwis’ office and only then was the alterationin the document made. In my opinion there was no change prior tothat date, and such a change as was made was quite inadequate. At thebeginning of the contract the words “Uva Forwarding Agency, Badulla’’were scored off and the words “Trading and Forwarding Agency,Badxdla” substituted. 'The date of the contract remained unalteredthereby making it read that the company had entered into this contracteven before it was formed. No fresh stamp was used and the old sig-nature was utilized so that the document still remained signed by the'
“ Uva Forwarding Agency ”. It may be noted in passing that even thecontractor’s copy, It 6, made no other change than the name at thestart of the contract.The contractor clearly did not attach much
importance to this document. Ordinarily his copy of the specificationwould be sufficient for purposes of inspection. As a result the date for thecompletion of the contract still remains the 20th of September, 1942, i.e.,a date almost exactly three months earlier than the alleged transferof the contract. It is not surprising that Mr. Perera was driven toabandon these documents and to emphasize that- it did not matter'whether the new company was or was not bound by the contract so long"as the contracting parties had agreed to release the respondent fromhis contract.Mr. Alwis, according to the contract itself, was acting"
on behalf of the Government of Ceylon, and it was his duty to see that areal novation took place.
In the view, therefore, which I have taken the respondent was clearly"disqualified both at the date of nomination and of election. It is ac-cordingly unnecessary to pursue the interesting argument raised byMr. Nadarajah that section 9 (d) of the Order in Council was taken fromthe English Statute XXII Geo. 3., c. 45, and that at that date by an“incorporated trading company” wak meant a- corporation created byRoyal Charter, such as the East India Company, or one created by Act ofParliament and that therefore the same meaning should be attachedto those words in the Order in Council. It is quite clear from Palmeron Company Law that private companies were recognized in theStatute dealing with companies only at a much later date. In-1782, besides the incorporated trading companies already referred to,there were companies in the sense that they were voluntary associationsof persons, but the Statute only exempted where the company had morethan 10 members, thus minimizing the interest of the candidate. Itmight be interesting when the occasion arises to consider whether membersof private companies, which might consist of two members, come withinthe terms of the exception. The observations of Viscount Cave E.C.in Lapish and Braithwaite 1 are not without value on this point. The-provision in Britain aims at securing the independence of members of
1 L. Jt. A. C. (1926) p. 275.
Baronchi and Ariyadasa.
396
the Legislature and their freedom from any conflict between their dutyto the public and their private interests. In Geylon it may have awider significance.
It is unnecessary for me to deal with the contracts in respect of thethree schools, for the same observations apply.
Undoubtedly the respondent comes within the general disqualificationand the burden was on him to prove that he had got rid of that dis-qualification, and he has failed to bring himself within the exception.I hold the respondent’s election was void and shall certify accordinglyto the Governor. The petitioner is entitled to his costs and thesewill be fixed by me after consultation with Counsel.
Election declared void.