Sri Lanka Law Reports
(1981) 1 S.L.R.
J. B. TEXTILES INDUSTRIES LTD.
v.MINISTER OF FINANCE AND PLANNING
SAMARAKOON, C. J.. WANASUNDERA, J. AND VICTOR PERERA, J.S. C. APPEAL No*. 62-65/81 -C. A. APPLICATION Nos. 1137-1140/79.NOVEMBER 19, 20. 23, 24,1981.
Business Undertakings (Acquisition) Act. No. 35 of 1971—Vesting Orders madethereunder for the acquisition of the businesses of two companies-Appeal toMinister—Appeal referred to Advisory Board established under statute—Finding ofBoard that acquisition not made bona fide—Refusal of Ministei to revoke vestingorder-Whether Hansard admissible ft> establish course of proceedings inLegislature-Evidence Ordinance, sections 57 (4) and 78—Finding that vesting ordersnull and void- Writs of certiorari end mandamus.
The Business Undertakings (Acquisition) Act, No. 35 of 1971, provides for the businessundertakings as defined in the said Act to be acquired by the Government, one suchmethod of acquisition being by Order referred to as a primary vesting Order publishedin the Government Gazette. The business of J. B. Textile Industries Ltd. and J. B.Fishing Industries Ltd. were so acquired for the Government by a primary vesting Orderdated 6th September, 1977 (P7). There had also been an earlier primary vesting Orderdated 29th December, 1976 (P2) which, although published in the Gazette, had not beenlaid before the National State Assembly within sixty days as required by the statute andhad therefore lapsed. The political party which formed the Government at the time P2was published was defeated at the polls and at the time vesting Order (P7) was publisheda different political party was in power.
Appeals made by the companies were referred to an Advisory Board established underthe provisions of the Act and the Board advised the Minister that the vesting of thebusinesses was unjustified holding that reasons other than economic reasons hadprompted the earlier Government to issue the vesting Order P2. The Minister, however,despite a request made by the Companies refused to revoke vesting Order P7 and thepresent applications were accordingly made to the Court of Appeal.
The two Companies concerned filed applications for writs of certiorari to quash thevesting Order made by the Minister of Finance who was the authority empowered by theStatute to make such Order and also for writs of mandamus directing the Minister torevoke the vesting Order. In the Court of Appeal these applications were consolidatedand one judgment delivered which covered all applications. In terms of this judgmentthe two applications for writs of certiorari were allowed and those for mandamusdismissed. Appeals were filed in the Supreme Court by the Minister agBinst the quashingby way of certiorari of the vesting Orders and by the companies against the refusal toissue writs of mandamus. These appeals too, were of consent, consolidated and thejudgment delivered by the Supreme Court also covered all four appeals.
The Court of Appeal in quashing the vesting Orders had held that the Minister had incontravention of the rules of natural justice failed to grant the appellant a hearingbefore making the vesting Order which failure vitiated the vesting Order. The Court,however, rejected the argument that the vetting Order was invalid as it was tainted withmala fides. It had been alleged that the first vesting Order was an act of political
J. B. Textiles Industries v. Minister of Finance and Planning
victimization in order to satisfy the private political purposes of the Member ofParliament for the area and the subsequent vesting Order (P7) being in fact a"continuation" of P2 was also tainted with the same mala tides. The petitioners relied,inter alia, on the Hansard which contained reports of statements made in Parliamentby the then Prime Minister on 20th October, 1977 while counsel on behalf of theMinister argued that Hansard (P9) could not be used in evidence in this way. The Courtof Appeal had upheld this objection.
The Court of Appeal had erred in holding that Hansard containing statements madein Parliament could not be used by the petitioner as evidence in support of their case.Hansard is admissible to prove the course of proceedings in the Legislature subject to thequalification that the statement therein must be accepted in toto without question.Accordingly the documents P9 and P11 were admissible to prove the statements of theMinister of Finance and the Prime Minister subject to the above qualification.
The objection to Hansard based on section 78 of the Evidence Ordinance concerningthe mode of proof could not be upheld as these documents were relied on by theCompanies in the Court of Appeal and although the Minister filed objections andaffidavits he did not object to any reference being made to a Hansard nor contradict thewhole or any part of their contents. The position being that statements made inParliament cannot be examined in a Court of Law, the furthei objection that thedocument could not be admitted because the Prime Minister could not be summoned toCourt for the purpose of testing the accuracy of the statement attributed to him couldalso not be sustained.
Accordingly, once these documents become admissible the Vesting Orders P2 and P7are clearly linked and P7 was meant to preserve the status quo as established by P2.
The Advisory Board established under the provisions of this Statue is meant to be asafeguard, though not a wholly effective one, against wrong or capricious vesting ofprivate property by the use of the Statute. It has an important role to play in tire schemeof the Statute and its finding and advice must not be lightly treated, it having beenintended that an impartial and independent -body should inquire and advise on thepropriety or otherwise of a Vesting Order. The findings of fact by the Advisory Boardestablished the allegation of mala tides in regard to the Vesting Order P2 and the Courtof Appeal rightly rejected the documents subsequently tendered in Court to establishbona tides. This material was available to the Minister even before the Advisory Boardbut it was not produced or made use of and it would appear that this wbs because hehimself did not believe in the truthfulness of the contents of these documents.
15) The Vesting Order P7 being linked with the Vesting Order P2 which is tainted by thefinding of mala tides is therefore null and void and the writs of certiorari issued by theCourt of Appeal quashing these orders must stand.
(6) In view of the findings in regard to mala fides it is not necessary to review thedecision of the Court of Appeal based on the violation of the rules of natural justice.
Cases referred to
(1) Church of Scientology v. Johnson Smith, (1972) 1 All £.R. 378; (19711 3 W.L.R.
434; (19721 1 Q.B. 522.
12) Davis v. Johnson. (1978) 1 All E.R. 1132.
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British Railway Board v. Pickin. (1974) 1 All E.R. 609; (1974) A.C. 765; (1974) 2W.L.R. 208.
Stockdale v. Hansard, 9 A.D. & E. 114.
Strickland v. Mifsud Bonnici, (1935) AJ.R. (P.C.) 34.
De Zoysa v. Wijesinghe, (1945) 46 N.L.R. 433.
Wearasinghe v. Samarasingha. (1966) 69 N.L.R. 262.
Schmidt v. Home OHica, (1962) 3 All E.R. 795.
Laker Airways Ltd. v. Department of Trade, (1977) 2 All E.R. 182; (1977) 2 W.L.R.234.
APPEAL from a judgment of the Court of Appeal reported in (1981) 2 Sri L.R. 238.
H. L. de Silva, S.A., with Gomin Dayasiri and V. Nagendran, for the petitioner in62/81 and 63/81 and for the respondent in 64/81 and 65/81.
K. N. Choksy. S.A., with Ben Eliyathamby, Lakshnian de Alwis, A. Soza and AnandaKasturiarachchi, for the respondent in 62/81 and 63/81 and for the petitioner in 64/81and 65/81.
Cur. adv. vult.
SAMARAKOON, C. J.
By a primary Vesting Order dated 6.9.1977 (17), the business ofMessrs J. B. Textile Industries Ltd. and the business of MessrsJ. B. Fishing Industries Ltd. were acquired for the Governmentunder the provisions of the Business Undertakings (Acquisition)Act. No. 35 of 1971 by the Minister of Finance (hereinafterreferred to as the Minister). J. B. Textile Industries filedApplication No. 1137/79 praying for a writ of mandamusdirecting the Minister to revoke the Vesting Order, and ApplicationNo. 1139/79 praying for a writ of certiorari to quash theMinister's Order. Likewise Messrs J. B. Fishing Industries Ltd.filed Application No. 1138/79 praying for a writ of mandamusdirecting the Minister to revoke the Vesting Order, andApplication No. 1140/79 praying fora writ of certiorari to quashthe Minister's Order. The Court of Appeal consolidated theApplications and made one order covering all Applications. Itdismissed the two Applications for writs of mandamus andallowed the two Applications for writs of certiorari. TheCompanies have filed Appeals No. 62/81 and No. 63/81 againstthe order refusing the applications for a writ of mandamus. TheMinister has filed Appeals No. 64/81 and No. 65/81 against theorder allowing writs of certiorari. These appeals were by consent
SC J. B. Textiles Industries v. Minister of Finance and Planning (Semerekoon, CJ.) 159
of counsel appearing for both parties consolidated and this Orderof mine covers all four appeals. At the conclusion of the hearingwe made order dismissing all appeals. I now proceed to givereasons for that order.
The salient facts are these. By primary Vesting Order dated29.12.76 marked P2 (published in Gazette No. 245/7A of29.12.1976) made by the then Acting Minister of Finance, interms of the powers vested in him by section 2 (1) (b) read withsection 17 of the Business Undertakings (Acquisition) Act, No. 35of 1971 (hereinafter referred to as 'the Act') he vested in theGovernment the two businesses together with their respectivemovable and immovable property. On 10.1.77 both companiesfiled appeals with the Minister of Finance against the said VestingOrder. In terms of, section 2 (3) of the Act the Vesting Order hadto be laid before the National State Assembly within 60 days butthis was not done. The National State Assembly was prorogued on5.2 77 and was never reconvened. It was dissolved on 18.5.77. On5.7.77 the Companies instituted two actions in the District Courtof Colombo challenging the validity of the Vesting Order. Thoseactions are pending. The political party which formed theGovernment in the National State Assembly was defeated at thepolls by a rival political party and that party formed theGovernment which took power in July 1977. The Minister (whowas the respondent in all four applications before the Court ofAppeal and who holds the portfolio of Finance) then proceeded todeal with this vesting. By an Order dated 5.9,1977 published inGazette No. 281/3 of the same date (P6) he revoked Vesting OrderP2. The next day by a Vesting Order in terms of section 2 (1) (b)of the Act published in Gazette No. 281/6 of 6.9.1977 (P7) heonce again vested in the Government the two businesses togetherwith their movable and immovable property. The companiesappealed against this Order in terms of section 7 of the Act. On4.10.1977 this Vesting Order was laid before the National StateAssembly together with a motion for its approval. By a resolutionof 20.10.1977 (P9) the National State Assembly approved thevesting. The appeals of the companies were referred to theAdvisory Board appointed by the Prime Minister in terms ofsection 7 (2) of the Act. That Board after due inquiry advised theMinister that the acquisition of the businesses was unjustified. Arequest made to the Minister to act on such advice and to revokethe Vesting Order was not acceded to. Hence these applicationsand consequent appeals.
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The Court of Appeal held that the Minister had, in contraventionof rules of natural justice, failed to grant the appellants a hearingbefore making the Vesting Order, which failure vitiated theVesting Order. It however rejected the argument that the vestingwas invalid as it was tainted with mala tides. The mala tides allegedis the mala tides of the Member of Parliament for Kolonnawa whowas also Minister of Trade during the period 1970 to 1977. It wasalleged that the first Vesting Order of 29.12.1976 (P2) was an actof political victimisation to satiate the private political purpose ofthat Member of Parliament. Counsel for the companies arguedthat the subsequent Vesting Order of 6.9.1977 (P7) made by theMinister in 1977 was in fact a "continuation" (that is the word heused) of P2 and was therefore tainted with the same mala tides.P2 was bad in law because of mala tides, he argued, and thereforeP7 was also bad in law because it was a continuation of the malafide vesting made on P2. To establish this link he relied on astatement made in Parliament by the then Prime Minister on the20th October, 1977, which, inter alia, gives the reason for theVesting Order P7. The Hansard containing this statement wasproduced marked P9. There is rio dispute between the parties onthe authenticity of the statement. Counsel for the Minister arguedthat P9 could not be used in evidence and the Court of Appealagreed with him. The Hansard P9 is a vital document in theconsideration of the allegation of mala tides. Ranasinghe J. inhis conclusion on the point stated —"if as is clear a Court cannottake into consideration anything said or done in Parliament to aidin the construction of a provision of a Statute passed byParliament itself still less legitimate would it be for the Court totake into consideration anything so said and done for any otherpurpose”. Ranasinghe J. has referred to three cases. The firstis the case of Church of Scientology v. Johnson—Smith (1).The defendant in that case was a Member of Parliament. He wassued by the plaintiff for libel for defamatory remarks concerningthe plaintiff made by this defendant during a television interview.The defence was one of qualified privilege. To defeat this plea theplaintiff sought to establish express malice by reference to Hansardto prove what the defendant had done and said in Parliament.This attempt was disallowed on the rule that "what is said anddone in the House in the course of proceedings there cannot beexamined outside Parliament for the purpose of supporting acause of action even though the cause of action itself arises out ofsomething done outside the House"—per Browne J. There is nodoubt that the use of the passages in Hansard would have made
SC J. B. Textiles Industries v. Minister of Finance and Planning (Samarakoon, C.J.) 161
the defendant liable in damages which he would have otherwiseavoided. Such use would have been a fetter on the freedom ofspeech in Parliament besides clinching the claims for damages bywhat he said or did in the House as a Member of Parliament.Browne, J. added that those paragraphs from Hansard "mustinvolve a suggestion that the defendant was in one way or anotheracting improperly or with improper motive when he did and saidin Parliament the things referred to in the sub-paragraphs". Evenin this case certain excerpts from Hansard were in fact permittedto be admitted in evidence and the Court ruled somewhatinconclusively that it could be read simply as evidence of fact,what was in fact said in the House on a particular day by aparticular person. The next case referred to by Ranasinghe J.is the case of Davis v. Johnson (2) in which Viscount Dilhornereferred to the well established and well known rule that "Counselcannot refer to Hansard as an aid to the construction of theStatute". I do not think that principle has any relevance to thequestion that arises for decision in this case. The next case referredto by Ranasinghe, J. is the case of British Railway Board v. Pickin (3)in which the House of Lords held that a court of law had nopower to examine proceedings in Parliament in order to determinewhether the passing of an Act had been obtained by means offraud or irregularity. No such exercise is necessary in the casebefore us. None of these cases support the conclusion ofRanasinghe J. when he stated that a statement in Hansard couldnot be used "for any other purpose" besides the use of it tointerpret Statutes. This means that the Hansard cannot be used forany purpose whatsoever. I have conie to a different conclusion.For the purpose of setting out my view, I will first refer to thelegal background and then set out the passages in Hansard (P9)relied on and then deal with the use sought to be made of it. TheBusiness Undertakings (Acquisition) Act is one of the most drasticpieces of legislation that was ever placed on our statute book.It provides for the compulsory acquisition by the Governmentof any business undertaking together with the property necessaryfor the undertaking by the mere publication in the Gazette ofa primary Vesting Order. The law does not provide any guidelinesas to when an acquisition should be permissible, such as the needfor a public purpose or even as a sanction for unlawful conductof the owners. No reason whatsoever need be assigned for anacquisition.When this law was debated in Parliament, the spokesmanforthe then Government stated that there would be two safeguardsagainst the misuse or abuse of this law. They are first, that Cabinet
Sri Lanka Law Reports
(1981) 1S. L. R.
approval must be given for an acquisition and, second, that the (awhas cast a mandatory duty on the Minister of Finance to have theprimary Vesting Order laid before Parliament for its approvalwithin a specified period of time thus providing the opportunityfor a full debate on the proposed acquisition. From this it wouldbe seen that Parliamentary intervention is a step in the procedurefor acquisition and is an integral part of the acquisition process.Column 1748 of P9 reports the Minister as having said thus:
"These acquisitions cannot be allowed to lapse once they aregazetted. The correct procedure for me is to bring this beforethe House and get it approved. The Court action can take itsown course. There is the possibility of an appeal to theAdvisory Board. I can assure the Hon. Leader of theOpposition that we will be very fair in this matter. This matterwill be considered purely on the basis of fair play and justice."
Columns 1749 and 1750 reports the Prime Minister (now thePresident of the Republic) as saying:
"May i explain? Jafferjee Brothers had a textile mill inKolonnawa. The previous Government took action under theBusiness Undertakings (Acquisition) Act to acquire it. Beforethat motion was placed before the House and passed Parliamentwas dissolved. The owners went to court. They would havesucceeded in their court proceedings had not our Governmentrenewed that motion. We decided to fight it ourselves. Now,this is sanction for the acquisition. Whether the originalacquisition was victimization or not I cannot say, but ourGovernment will not support any victimization. We havealready released two or three acquisitions thich were made asa result of political victimization, the Ceramics Factory in theSouth and one or two others.
The owners can go before Business Undertakings (Acquisition)Act Advisory Board, which was created when the Act wasbrought. As a result of pressure by the then Opposition thatthis Act may be misused, the Prime Minister of the day andMr. Felix R. D. Bandaranaike said that they would set upthis Business Undertakings (Acquisition) Act Advisory Board.I do not know whether any appeal has gone before the Boardduring that period but during our period one appeal has gonebefore it and they have allowed it. I think in the case of Ceylon
SC J. 8. Textiles Industries v. Minister of Finance and Planning ISamarakoon, C.JJ 163
Silks they appealed on the ground of victimization. We havenot acted on that decision yet. That Board considered ofmembers appointed by the previous Government. So theycannot say that we are in any way tampering with them.
Now, this owner cannot go before this Board unless thismotion is passed. It is open to him to go before the Board andshow that the acquisition was victimization. It is not ouracquisition. We are only following the previous acquisition.If that Board holds that it is victimization we will release it.Otherwise, we do not wish to be the target of attack that weare supporting capitalists. We do not intend to do that—noteven in regard to capitalists who were running behind theprevious Government and who are now running behind ourGovernment We will be fair to them all. So, to help the ownerto go before the Business Undertakings (Acquisition)Act Advisory Board, we must pass this motion first; otherwiseeverything will be in the air."
Counsel for the Minister first made reference to the provisionsof section 78 of the Evidence Ordinance. This concerns the modeof proof. Hansard P9, P10 and P11 each state that it is an"Official Report" of "Parliamentary Debates". These documentsand their contents were relied on by the companies. They werepleaded in the petitions and affidavits filed in each case. TheMinister filed objections and affidavits in each case. In neitherof them did he object to any reference being made to the Hansardnor did he contradict the whole or any part of their contents.I cannot see how he can now ask that they be rejected for wantof proof.
Counsel next submitted that the contents of these Hansardsshould not be admitted in evidence because the Prime Ministercould not be summoned to Court for the purpose of testing theaccuracy of the statements attributed to him. Counsel stated thathe could establish that the statements were mistakenly made butthat he was in no position to demonstrate this without questioningthe Prime Minister in Court as he ran the risk of committing abreach of Privilege of Parliament. I cannot accede to thisargument. He presumes that the Prime Minister if summoned andquestioned, would admit that he was mistaken. Such apresumption cannot support his contention.If he was possessed offacts which showed that he Prime Minister was mistaken it is open
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to him to prove such facts by adducing the evidence upon whichhe relied to make the allegation. However it must be borne inmind that statements made in Parliament cannot be examined in aCourt of Law. "Whatever is done or said in either House shouldnot be liable to examination elsewhere"— per Patteson, J. inStockdale v. Hansard (4) at 209. This was said of the House ofParliament in the United Kingdom and it holds good in thiscountry too.
Hansards are admissible to prove the course of proceedings inthe Legislature (section 57 (4) Evidence Ordinance). They areevidence of what was stated by any speaker in the Legislature:Strickland v. Mifsud Bonnici (5) at 35, De Zoysa v. Wijesinghe (6)at 437, Weerasinghe v. Samarasinghe (7) at 264. However eventhis use of statements is subject to some qualification. One such isthat the statements must be accepted in toto — without question.
The privilege of having debates in Parliament unquestionedis indispensable. "By consequence whatever is done within thewalls of either Assembly must pass without question in any otherplace"-pet Denman, C.J. in Stuckdaie v. Hansard (4). So it mustpass here. Parliamentary reports have been used in this way inmany reported cases. In Schmidt v. Home Office (8) at 798, awritten answer by the Home Minister to a Parliamentary questionwas used to judge the Home Minister's conduct. In Laker AirwaysLtd v. Department of Trade (9) an announcement in the Houseof Commons on Civil Aviation Policy was used for the purpose ofthe deciding the dispute in the case. In an action for defamationth6 best, and I believe the only, method of judging whether areport in a newspaper of paliamentary proceedings is a fair andaccurate report of what was said in Parliament is by examinationof the relevant proceedings in the Hansard. Such use of Hansardwithout in anyway committing a breach of privilege is permissibleand necessary in the administration of justice. The Hansard is theofficial publication of Parliament. It is published to keep thepublic informed of what takes place in Parliament. It is neithersacrosant nor untouchable. Comment and criticism are on adifferent plane which might give rise to a breach of privilege. Thataspect does not arise for decision here. I am of the view thatdocuments P9 and P11 are admissible to prove statements of theMinister and Prime Minister subject to the rules limiting their useas hereinbefore stated.
SC J.B. Textiles Industries v. Minister of Finance and Planning (Samarakoon, CJ.) 165
P9 contains an important statement made by no less a personthan the Prime Minister of the country, setting out the reasonsfor the second vesting of these enterprises. He states quitecategorically that the Vesting Order P7 is being placed before theHouse to deal with a situtation that arose during the period of theprevious regime. He states also that the whole exercise is for thepurpose of giving the owners a right of appeal and for the purposeof avoiding undue criticism of the Government. Lastly he makes itabundantly clear that the acquisition resulting from the VestingOrder P7 is not their acquistion. His words are "It is not ouracquisition. We are only following the previous acquisition. If thatBoard holds that it is victimisation. We will release it." This links itto the acquisition on Vesting Order P2. It is therefore manifestlyclear that P7 was meant to preserve the status quo of P2. It wasleft to the Advisory Board to decide whether P2 was victimisation.
I have no doubt that the Government was wedded to the fact thatif the Advisory Board found that mala tides attached to P2 thensuch infirmity would fall upon P7 also. I therefore hold that P2must be linked with P7 and that if P2 was tainted with mala tidessuch mala tides attaches to P7. I
I will now deal with the question of mala tides. In the appealsto the Minister the companies state that P2 was "instigated by
T.B. Illangaratne, the former Member of Parliament forKolonnawa, as an act of political and personal revenge" againstthe management of the Companies. This allegation, though indifferent form was repealed in ali the petitions and affidavits filedin the Court of Appeal. The Companies led evidence before theAdvisory Board to support the allegation of mala fides. It consistedmainly of the oral evidence of Anura Weeraratne who wasSecretary to the Ministry of Industries and Scientific Affairs from1st March, 1972 to 16th May, 1977, and was therefore personallyconcerned in the steps leading to the vesting on P2 The TextileIndustry was a subject of this Ministry. His evidence shows thatthe vesting was made at the request of the said Illangaratne whohad pressurised the Prime Minister and Minister of Industries,when they showed reluctance to agree to the vesting. Some ofthe reasons given by the said Illangaratne were that "Jafferjeeswere politically against him in his electorate and all recruits andall vacancies were not being filled up from Kolonnawa but peoplewere being brought in from Batticaloa to fill the vacancies".Weeraratne also stated that the economic reasons for VestingOrder were insufficient to justify the take over. Nevertheless it was
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done because lllangaratne insisted on it. This evidence wasuncontradicted. In fact the Deputy Solictor General who appearedfor the Minister at the inquiry, consulting the Attorney-General,who in turn had consulted the Minister, stated that the Ministerhad considered the evidence led through Weeraratne and that hehad no material "to contradict or controvert material placedbefore the Board" up to and including the evidence of Weeraratne.The Deputy Solicitor General stated he was not possessed ofmaterial to cross-examine the three witnesses. The Minister didnot lead any evidence. In this state of the case the Board had noalternative but to hold that reasons other than economic reasonsprompted the Government to issue Vesting Order P2. The Boardfurther observed that the reasons given by the then Governmentdo not justify the take over. In the result the Board advised theMinister that the vesting of the businesses was unjustified. It issignificant that the vesting in respect of which the Board advisedthe Minister included the vesting on both P2 and P7 although P7was the only Vesting Order referred to it for advice.
Consequent on this advice of the Board the companies requestedthe Minister to revoke the Vesting Order P7 but this the Ministerrefused to do and the companies therefore made these applicationswhich are the subject of this appeal. The Minister now states thathe is not bound to act upon such advice. Perhaps he is correctbut I do not need to decide that question. The Minister has in hispleadings before the Court of Appeal sought to justify the vestingon P2 (not P7). In paragraph 70 of his objections he states asfollows: —
"20. (a) A primary vesting order under section 2(1)(b) ofthe Business Undertakings (Acquisition) Act No. 35 of 1971 hadbeen made by the respondent's predecessor in office on 29thDecember 1976.
The official documents and other material available to therespondent show that the said business undertaking had beenvested upon a policy and administrative decision made by hispredecessor in office at the request of the then Minister ofIndustries and Scientific Affairs (Hon. T. B. Subasinghe) andthe then Minister of Fisheries (Hon. S. D. R. Jayaratne), inconsultation with the then Cabinet of Ministers, in furtheranceof governmental policy.
The said decision had been made after a considerationby the respondent's predecessor in office and the aforesaid two
SC J. 8. Taxti/ts Industrial k Ministar of Finance and Manning (Samankoon, CJ.) 167
Ministers and the then Cabinet of Ministers of, inter alia.Ministerial Memorandum and Reports of administrativeofficials, including Secretaries to the relevant Ministries.
Upon the respondent assuming office after the lastgeneral election in July 1977, the respondent and the relevantMinisters reviewed and reconsidered whether or not the vestingof the business undertaking in the State should continue, anddecided that it should.
22. The respondent states that he had material upon whichto so act, and annexes hereto true copies of the undernoteddocuments which were available to him amongst other materialin the making of the decision not to revoke the primary vestingorder of the 6th September, 1977. This material contradictsthe petitioner's allegation that the first primary vesting ordermade on 29th December, 1976, had been made "mala fideand for extraneous reasons and to achieve certain partisanpolitical objectives of the then Member of Parliament forKolonnawa in which electorate the petitioner's businessundertaking was situated":
Decision of the Cabinet made on 1.12.1976, (markedR. 1)
(ii> Report of E. G, Goonewardena, Secretary, Ministry ofFisheries, dated 7.12.1976, (marked R. 2);
Memorandum submitted by Hon. S. D. R. Jayaratne,Minister of Fisheries, and Hon. T. B. Subasinghe,Minister of Industries and Scientific Affairs, dated
(marked R. 3);
Decision of the Cabinet made on 29.12.1976, (markedR. 4);
Memorandum submitted by Hon. S. D. R. Jayaratne,Minister of Fisheries, dated 17.2.1977, (marked R. 5);
Decision of the Cabinet made on 16th March, 1977,(marked R. 6);
Copy of letter dated 16.8.1977 sent by the respondentto Hon. Wijepaia Mendis, Minister of Textile Industries(marked R. 7);
Reply dated 19.8.1977 received by the respondent,(marked R. 8);
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Minute dated 19.8.1977 made by the Hon. Minister ofIndustries, Hon. Minister of Textile Industries and theRespondent, (marked R. 9);
Report dated 24.8.1977 submitted by G. A. de Zoysa,Competent Authority (marked R. 10);
Report of A. B. Elkaduwa, Secretary, Ministry of TextileIndustries dated 14.10.1977 addressed to the Secretaryto the Prime Minister, (marked R. 11);
Decision of the Cabinet made on 29.3.1978, (markedR. 12);
Decision of the Cabinet made on 3.5.1978, (markedR. 13);
Memorandum dated 10.5.1978 submitted to therespondent by Hon. Wijepala Mendis, Minister of TextileIndustries, (marked R. 14);
Decision of the Cabinet made on 10.5.1978 (markedR. 15);
Decision of the Cabinet made on 24.5.1978 (markedR. 16)".
This material was available to the Minister even before the VestingOrder P7. On the 16th August, 1977, the Minister addressed letterR7 to the Minister of Textile Industries. In it he draws theattention of the Minister of Textile Industries to the JointMemorandum (R3) by the then Minister of Industries and the thenMinister of Fisheries to the Cabinet (pleaded in para 22 of hisobjection) and the decision of the Cabinet to acquire these twobusinesses. He requests his colleague to "examine the reasons forthe take over and advise the Cabinet very early whether a freshVesting Order should be made". There seems to have been adiscussion between the two Ministers subsequently and theMinister of Textile Industries wrote R8 stating that "it was agreed"that a fresh Vesting Order should be made. A joint declaration bythe Minister of Textile Industries and the Minister of Industriesaddressed to the Minister (Vide R9 of 19.8.77) informed him thatthey agreed that "J.B. Textiles should continue under governmentcontrol". (This did not refer to J. B. Fishing Industries Ltd.). Thishas been placed before the Cabinet and approved by it on thesame day. Vesting Order P7 followed. These and other documentsreferred to in para 22 of the objections were available to, and werewithin the knowledge of, the Minister before the issue of Vesting
J. B. Textiles Industries Ltd. v. Minister of Finance and Planning 169
Order P7. Now he states that they negatived the plea of mala fides.If that were so it is passing strange why he did not use them torefute the allegations made before the Advisory Board. On thecontrary he advised his Counsel that no material was available tohim to contradict the allegations of the Companies which specifical-ly included an allegation of mala fides. He either deliberately keptthem away from the Board or he did not at the time believe inthe truthfulness of-the contents of those documents. Perhaps it isthe latter. I am inclined to this view because of the evidence ofWeeraratne before the Board which suggested that the joint reportP3 was merely a cover for the real reason and the .fact that theMinister had in his possession and was aware of and even discussedwith his colleagues the documents he now relies on. Furthermoreno party to a proceeding should be allowed to play fast and loose inthis manner. The Board is a statutory body meant to be a safe-guard, though not a wholly effective one, against wrong or caprici-ous vesting of private property by the use of the Statute. It has animportant role to play in the scheme of the Statute and its findingsand its advice must not be lightly treated. The legislature's intentionin establishing this Board is a salutary one. It intended that an im-partial and independent body should inquire and advise on the pro-priety or otherwise of a Vesting Order. The findings of fact by theBoard impel one to the conclusion that the documents tendered insupport of the bona fides of the vesting on P2 are in fact a cover forthe real reason as stated by Weeraratne. The Court of Appeal hasrejected them for the reason that they were not produced by theMinister when the first opportunity presented itself—that is before. the Board — and therefore they were not subject to scrutiny by theCompanies and the Board. This is an added reason for not acceptingthem now. The material placed before the Court establishes theallegation of mala fides in the vesting on P2„ The vesting on P7,‘linked as it is to P2, is therefore null and void. Courts have always. acted to grant redress in cases such as this (See De Smith's JudicialReview of Administrative Action” Edn 4 pages 335-337 and thecases cited therein.) The Writs of Certiorari issued by the Courtof Appeal must stand.
A clue to the volte face of the Minister is to be found in Han-sard P11 of the 4th January, 1979. In the course of a debate inParliament on the Land Acquisition (Amendment) Bill the Member
Sri Lanka Law Reports
(1981j 1 S.L.R.
of Parliament for Kankesanturai queries why these businesses hadnot been handed back to the previous owners in spite of the Board'sfinding that the take-over "was an unfair act of political victimiza-tion". The Minister of Irrigation, Power and Highways gave thereason thus:
"The Government has to decide as a matter of public policywhether it should implement the findings of the committee.In this particular case, we had a problem. The entire labourunion was against the handing over of this particular businessenterprise back to the former owners. Besides, the Hon Minis-ter concerned was able to satisfy the Government that this,business was better under public management than under pri-vate management. On that there was a difference of opinion,I think. As to whether it should be handed back or not, ulti-mately the Government decided that it was not going to handit back. But, of course, the owners would get compensation infull for the take-over of this business. In fact, the Governmentoffered to the former owners an opportunity of collaborationon the basis of 49 per cent and 51 per cent, which theyrejected."
The Minister gives a different reason. In paragraph 21 of hisobjections he gives his reasons as follows:
"The said decision not to revoke the said primary vestingorder dated 6th September 1977 was necessitated by reason,inter alia, of the government's policy of industrial direction, theco-ordination of the production and supply of necessary com-modities, furtherance of governmental policy relating to themanner of utilisation of industrial labour, the maintenance ofreasonable price levels, and in the fulfilment of the publicinterests."
The two reasons do not tally. I need say no more.
In view of my findings on the allegation of mala tides I do notconsider it necessary to review the decision of the Court of Appealbased on the allegation that natural justice had not been done. Thatmatter will remain open.
Wanasundera, J.-| agree
Victor Perera, J.—I agree
J. B. TEXTILES INDUSTRIES LTD v. MINISTER OF FINANCE AND PLANNING