005-SLLR-SLLR-1999-V-2-DE-WASS-GUNAWARDENA-v.-NATIONAL-SAVINGS-BANK-AND-ANOTHER.pdf
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De Waas Gunawardena v. National Savings Bank and Another 29
DE WAAS GUNAWARDENA
v.NATIONAL SAVINGS BANK AND ANOTHER
SUPREME COURTFERNANDO, J.,
WADUGODAPITIYA, J. ANDGUNASEKERA, J.
SC APPLICATION NO. 408/97OCTOBER 20, 1998
Fundamental rights – Refusal to grant an extension of sendee – Unreasonableand arbitrary decision – Article 12 (1) of the Constitution.
The petitioner joined the public service in 1972. In 1992 she was Deputy Director,Ministry of Agricultural Development and Research. Later that year, the petitionerwas temporarily released to the 1st respondent Bank and appointed as Consultantof its Janasaviya Implementation Division. Thereafter she was absorbed into thepermanent cadre of the 1st respondent and appointed Deputy General Manager(DGM) in view of her experience including in projects for rural uplift and inanticipation of the proposed reorganization of the Bank to assist certain devel-opment programmes. On 04.01.1996 the petitioner had applied for her first extensionof service up to 06.06.1997 and on 03.01.1997 for her second extension. On
the 1 st respondent's involvement in the implementation of the Janasaviyascheme came to an end. On 08.04.1997 the new Chairman submitted a Boardpaper representating that the petitioner had been appointed DGM (Janasaviya),that as the 1st respondent had no connection with the Janasaviya scheme after
there was no longer any work for the petitioner. Hence she shouldnot be granted any extension after 31.12.1996 but that on sympathetic groundsher services should be extended up to 06.06.1997. Consequently the Boardrefused the petitioner's second extension.
Held:
The petitioner had been appointed in 1993 as DGM; that there was no basiswhatever for treating her functions as being limited to ’Janasaviya" activities; thatthe decision of the 1st respondent to refuse her second extension wasunreasonable, arbitrary and perverse and hence violative of her rights under Article12 (1) of the Constitution.
Case referred to:
Madurapperuma v. Junaid SC No. 437/96 SC minutes 26th March, 1997.
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APPLICATION for relief for infringement of fundamental rights.
R. K. W. Goonasekera with G. Alagaratnam for the petitioner.
K. Sripavan, DSG for the respondents.
Cur. adv. vult.
December 2, 1998.
FERNANDO, J.
The petitioner complains that her fundamental right under Article 12
has been infringed by the 1st respondent, the National SavingsBank, by the arbitrary, unreasonable and/or malicious refusal of hersecond extension of service, from 7.6.97 to 6.6.98.
The petitioner joined the public service in 1972. In 1992 she washolding the post of Deputy Director, Ministry of Agricultural Develop-ment and Research. The responsibility of making monthly interestpayments to Janasaviya families was entrusted to the 1st respondent.
The Establishments Code provides in chapter V for the releaseof public officers to other posts in the public service (section 1) aswell as for service outside the public service (section 2):
Release for service outside the Public Service:
2:1 An officer may be released for service outside the PublicService (as for instance in a Public Corporation) only with thesanction of the Appointing Authority and any other authority whoseconcurrence is required by the law under which the Corporationor Board is constituted.
2:2 Every such release requires the concurrence of the Directorof Establishments as well, to ensure the preservation, of pensionrights of a public officer during a period of temporary release toa Public Corporation and, in the case of permanent release, theconferment of benefits under the Minutes on Pensions in respectof services under the Government.
SC De Waas Gunawardena v. National Savings Bank and Another
(Fernando, J.)31^
2:3 An application for release (Temporary or Permanent) shouldbe made on a form as in specimen given at Appendix 6 by theAppointing Authority of the officer's substantive post through theSecretary to his Ministry and the Secretary to the Ministry underwhich (sic) the Public Corporation to which it is proposed to releasethe officer . . .
2:5 If the officer is released temporarily, the terms of his releasewill be as follows:
2:5:1 The period of release should not exceed 2 years. Before theexpiry of the period of temporary release he should opt either torevert to his former post or (if the Public Corporation desires toretain his services permanently) to be permanently released to thatPublic Corporation . . .
2:6 If an officer is permanently released for service in a PublicCorporation, the terms and conditions of his release will be gov-erned by the law under which that Public Corporation is constitutedand by the relevant provisions of the Minutes on Pensions.
The then Chairman of the 1st respondent made an application tothe Secretary, Ministry of Agricultural Development and Research,through the Secretary, Ministry of Finance, for the petitioner's tem-porary release "to be attached to Janasaviya Implementation Division".The 1st respondent selected the petitioner "in view of her experiencein the implementation of the Income Support Scheme, which had(similar) features". By letter dated 5.8.92 the Secretary of the Ministryof Agricultural Development and Research informed the Deputy Secretaryto the Treasury that she was released to the 1st respondent “toimplement the Janasaviya programme". The 1st respondent appointedher as Consultant of its Janasaviya Division.
Thereafter the petitioner was absorbed into the permanent cadreof the 1st respondent, with effect from 1.8.93, to a post outside thenormal cadre of the Bank. As I held in Madurapperuma v. Junaid,SC No. 437/96, SCM 26.3.97, a permanent release requires theconcurrence of "the Appointing Authority of the officer's substantive
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post". The 1st respondent has not produced the application forpermanent release (cf. section 2.3), but I assume that the necessarysanction or concurrence had been obtained because the validity orthe regularity of the petitioner's temporary and permanent releaseswas not disputed.
The only point of dispute is whether she was appointed as "DeputyGeneral Manager" (DGM) or as “DGM (Janasaviya)", and I now turnto the documents relating to that appointment.
The then Chairman submitted a Board paper dated 19.7.93, statingthat:
“(The petitioner's) discipline is mainly that of a planner, but shealso possesses wide experience in management and administra-tion. She has been responsible during most part of her career inthe Public Service with the planning of programmes and projectsmeant for the rural uplift, their implementation and review. Herexperience would be of particular use to the NSB in the near futurewhen NSB funds are to be made available for development pro-grammes with direct economic relevance, following the restructuringand reorganisation of the Bank . . .
During the period [the petitioner] has been employed in theBank, she has amply proved her capabilities in organising,implementing and managing the responsibilities entrusted to her.Besides, she has contributed to other work as well." [emphasisadded throughout.)
He recommended to the Board that the petitioner be permanentlyappointed to a post outside the normal cadre of the Bank, andthat “she be designated DGM". At a meeting held on 21.7.93 the Boardgranted approval for that appointment. The following letter ofappointment dated 22.7.93 was issued to her:
"It has been decided to absorb you to the permanent cadreof the National Savings Bank with effect from 1st August, 1993.The terms and conditions applicable to your absorption as statedabove are given hereunder.
SC De Waas Gunawardena v. National Savings Bank and Another
(Fernando, J.)M
Your appointment to the permanent cadre of the NSB will takeeffect from 01.08.93.
You will be designated DGM on the salary scale of . . .
You will be placed on the salary point of . . .
Your post will be outside the normal cadre of the Bank.
You will be subject to the usual conditions of service applicableto the employees of the Bank.
If you are willing to accept the appointment subject to theseconditions, please sign and return to me the copy of the letter sentherewith …"
She accepted:
"I hereby give my consent to be absorbed to the permanent cadreof the National Savings Bank and to be appointed to the post ofDGM, subject to the terms and conditions stated herein."
Shortly thereafter, in a circular dated 8.9.93 the staff were notifiedthat the Rural Credit Section, Matara, had been placed under thesupervision of "Mrs. J. B. de Waas Gunawardena, DGM".
The employment agreement between the 1st respondent and thepetitioner was thus reduced to writing, in the form of that letter ofappointment. That was prepared by the 1st respondent, and musttherefore be interpreted contra proferentem in the event of ambiguity.However, there is not even a hint in the letter of appointment – orin the Board paper and the Board decision which preceded it – thather appointment as "DGM" was in any way limited or restricted to"Janasaviya" functions.
I am of the view, therefore, that the petitioner was appointed as"DGM", without any limitation as to the functions of that post. Thatis supported by an affidavit tendered by the former Chairman. Although
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the present Chairman now asserts the contrary, he had no personalknowledge of the facts and circumstances as he was appointed onlyabout a year later; and indeed, it was only much later, in April, 1997,that he alleged such a limitation.
Two officers of the 1st respondent, filed CA ApplicationNo. 931/93, praying for Certiorari to quash the petitioner's appointmentas "DGM", and for Mandamus to direct the 1st respondent to makea proper appointment. The then Chairman and Board decided to resistthat application, and agreed to reimburse the petitioner the expenseof retaining her own counsel. However, thereafter the Board wasreconstituted, and on 7.11.94, the present Chairman and Board decidednot to contest that application, and to discontinue reimbursement ofthe petitioner's legal expenses. The Court of Appeal made order on17.1.96 quashing her appointment on the ground that the failure toadvertise it was a procedural irregularity. By letter dated 23.1.96 theGeneral Manager of the 1st respondent told the petitioner that thatwas her last working day.
That attitude resulted in a very inequitable position. The petitionerhad given up her employment in the public service by virtue of herpermanent release in August, 1993; and she ceased to function asConsultant upon her appointment – which was in effect a promotion- as DGM. The quashing or annulment of that appointment by theCourt of Appeal ought to have resulted in the reversion to the statusquo. However, the 1st respondent took up the position that upon thequashing of her appointment as DGM, her employment under the 1strespondent came to an end – and that, too, despite the fact thatthe 1st respondent continued to have functions in relation to theJanasaviya scheme.
The petitioner applied for and obtained special leave to appealagainst that order on 3.7.96. This court made an interim order thatthe petitioner would be "entitled to continue to function in the capacitywhich she held immediately prior to her appointment as DeputyGeneral Manager, and to draw the relevant emoluments with effectfrom the date of the Court of Appeal Order". The 1st respondent didnot comply with that order. Instead, the present Chairman made a
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totally irrelevant request to the Ministry of Agricultural Developmentand Research to restore her to the position which she had held inthat Ministry before her permanent appointment as DGM. He claimedthat before that appointment the petitioner held no permanent postin the 1st respondent Bank, and that the Attorney-General’s Depart-ment had advised that in compliance with the order of this Court sheshould be restored to the position she held in the Ministry. That wasa blatant distortion of the order of this court, because that order madeno reference to any previous permanent post, and required that sheshould function "in the capacity which she [previously] held”, whichcapacity, unmistakably, was that of Consultant, Janasaviya. Clearly,the Chairman's request was just an unworthy pretext to delay, if notto circumvent, the implementation of the interim order. It was onlyafter a further order made by . this court on 3.10.96 – three monthslater – that she was allowed to resume duties in her former capacityof Consultant.
On 31.3.97 this court set aside the order of the Court of Appealand upheld the petitioner's appointment as DGM (SC AppealNo. 88/96, SCM 31.3.97).
It would appear from the judgments of the Court of Appeal andof this court that all parties in the writ application proceeded on thebasis that in August, 1993, the petitioner had been appointed as"DGM". No one seems to have suggested that she had been appointedas "DGM (Janasaviya)'1.
In the meantime, on 4.1.96 the petitioner had applied for her firstextension of service, up to 6.6.97, and on 3.1.97 for her secondextension. She received no response. On 31.12.96 the 1st respond-ent's involvement in the implementation of the Janasaviya schemecame to an end.
Thus in April, 1997, the 1st respondent had to decide what actionit would take to comply with the order of this court upholding herappointment as DGM, and in respect of the petitioner's applicationsfor extensions of service.
With otherwise commendable promptitude, the Chairman of the 1strespondent submitted a Board paper dated 8.4.97, with the manifestintention of inducing the Board to believe that in August, 1993, thepetitioner had been appointed as "DGM (Janasaviya)", and not as
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"DGM"; that her 1993 appointment had been made solely becauseof her experience with the “Income Support Scheme0; that since herfunctions were thereby confined to the Janasaviya scheme, with whichthe 1st respondent had no connection after 31.12.96, there was nolonger any work for her; and that therefore she should not be grantedany extension after 31.12.96 – but that on sympathetic grounds herservices should be extended up to 6.6.97. That Board paper concealedthe facts and circumstances and completely distorted the truth as tothe petitioner's appointment, in two important respects.
First, as to the appointment itself, the Chairman alleged:
“The post to which she was appointed, ie DGM (Janasaviya)was categorized as a post outside the normal cadre of the Bank.This was also stated in the letter of appointment issued to [thepetitioner] dated 22nd July, 1993". [emphasis added]
That was a manifest misrepresentation of the 1993 Board paperand Board decision, and the letter of appointment, all of which neitherdescribed the petitioner's appointment as "DGM {Janasaviya)", norlimited her post or her functions to "Janasaviya" matters.
Second, as to the reasons for that appointment, the Chairmanrepresented that:
". . . the Board of Directors approved the absorption of [thepetitioner] on a permanent basis as a DGM with effect from 1.8.93.In the recommendation made to the Board by the then Chairmanthe reason for the appointment was stated as follows:
[The petitioner] was engaged as Consultant, JanasaviyaDivision with effect from August 10, 1992, in view of herexperience in implementing many rural based developmentprogrammes and particularly the Income Support Scheme forUnemployed Youth . . ."
". . . She was absorbed to the permanent cadre of the Bankon 1.8.93 in view of the experience she is alleged to have hadin the Income Support Scheme which was familiar to the JanasaviyaInterest Payment Scheme."
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That was a flagrant distortion of the facts. The petitioner's "IncomeSupport Scheme" experience was the reason for her 1992 temporaryappointment as Consultant. Quite plainly, that that was not the reasonfor her 1993 permanent appointment. The Chairman, inexcusably,withheld the very specific reasons which the former Chairman hadgiven the former Board when recommending her permanentappointment:
". . . Her experience would be of particular use to the NSBin the near future when NSB funds are to be made available fordevelopment programmes with direct economic relevance, followingthe restructuring and reorganisation of the Bank . . .
During the period [the petitioner] has been employed in theBank, she has amply proved her capabilities in organising,implementing and managing the responsibilities entrusted to her.Besides, she has contributed to other work as well".
The very next day, on 9.4.97, the Board considered that Boardpaper, and for the reasons stated in that paper (nothing else ismentioned) refused the petitioner's second extension. The Board minutedoes not indicate that the 1993 Board paper and Board decision, orthe letter of appointment, had been made available to, or consideredby, the other Board members. That decision was thus one procuredby concealment and misrepresentation of facts. Had the facts beenfully and accurately disclosed, and fairly considered, no reasonableBoard could possibly have come to the conclusion that the petitionerhad been appointed as DGM (Janasaviya), and that consequentlythere was no longer any work for her, compelling the refusal of anyfurther extension of service – despite the practice of giving seniorofficers of comparable rank extensions upto the age of sixty.
It was submitted on behalf of the 1st rspondent that the petitionerhad been appointed to a post "outside the normal cadre of the Bank".This court has already held that appointment to be valid. From thefact that it was outside the normal cadre it does not follow that itsfunctions were limited to Janasaviya activities: on the contrary, thedocuments relating to the appointment confirm that it was intended
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that the functions of that post should be more extensive. Reliancewas also placed on the description of her post as “DGM (Janasaviya)"in various subsequent documents. Those documents cannot be usedto contradict or vary the terms of the August, 1993, Board paper, Boarddecision, and letter of appointment. Finally, it was argued that becausethe petitioner's temporary release was to implement the Janasaviyaprogram and/or because she was attached to the 1st respondent'sJanasaviya implementation division, necessarily her permanent releasecould only have been for that same purpose; and that upon thatpurpose ceasing to exist, her employment must come to an end.chapter V, section 2, of the Establishments Code contains no suchprovision, express or implied, although section 2.6 refers to other termsand conditions. Even assuming that the relevant authorities mightlawfully have refused the permanent release of the petitioner for apurpose other than Janasaviya activities, yet there is no evidence thatthey granted sanction for release only upon that condition – sincethe documents relating to the release have not been produced it mustbe presumed that they do not contain such a condition. In the absenceof express provision, I must decline to introduce into the Establish-ments Code, by means of interpretation, a condition which would causesuch manifest hardship and injustice. Further, had the petitioner beentold in August, 1993, that the seemingly permanent employmentoffered to her was – contrary to the Board paper – dependent onthe 1st respondent continuing its Janasaviya activities, she may wellhave opted instead to revert to the public service. I am therefore notprepared to impose upon her permanent release terms and conditionswhich neither the Establishments Code nor the 1st respondentstipulated. I
I hold that the petitioner had been appointed in 1993 as "DGM";that there was no basis whatever for treating her functions as beinglimited to the 1st respondent's “Janasaviya" activities; that the decisionof the Board of the 1st respondent to refuse her second extensionof service was unreasonable, arbitrary and perverse, and procuredby concealment and distortion of the truth. I grant her a declarationthat her fundamental right under Article 12 (1) has been violated bythe 1 st respondent, and that she was entitled to her second extensionof service with all the attendant rights and privileges.
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The petitioner must therefore be put back, as far as possible, inthe position in which she would have been but for that violation.Normally, that means reinstatement with full back wages. However,her second extension was due to expire on 6.6.98, and she did notmake a timely application for any further extension while theseproceedings were pending: and so she cannot now be reinstated.Nevertheless, this court has to make a just and equitable order, andthat requires that she be granted all the benefits which she wouldhave received upon a notional reinstatement from 7.6.97 to 6.6.98.I have therefore to assess the benefits she would have received ifshe had been allowed to carry out the duties of her post from 7.6.97to 6.6.98. First, she would have received her salary and otheremployment benefits (including bonus, concessionary loan facilities,and medical, EPF and ETF benefits) during that period. Accordingto the Chairman's affidavit, her gross salary inclusive of all allowancesas at 1.1.94 was Rs. 27,669; increments and increases thereafterwould have resulted in a higher figure by 7.6.97. Having regard tothe shabby treatment meted out to the petitioner, to leave thecomputation of salary and employment benefits to the 1 st respondentis to invite further delay and evasion. I assess their value atRs. 550,000. Second, she would have had the right to apply for herthird and subsequent extensions of service; and the value to be placedon the expectation of such extensions must take account of thepractice of the 1st respondent of granting extensions, even upto theage of sixty. I would equitably assess that at Rs. 550,000. She willbe treated for all purposes as having been in employment until 6.6.98.
For the above reasons, I direct the 1st respondent to pay thepetitioner, on or before 31st December, 1998, the aforesaid sum ofRs. 1,100,000, as well as a sum of Rs. 30,000 as costs; and to submitproof of payment to the Registrar of this court on or before 7.1.99,failing which the Registrar will list this case or an order regardingenforcement.
WADUGODAPITIYA, J. – I agree.
GUNASEKERA, J. – I agree.
Relief granted.