KRISHNA MINING CO. (CEYLON) LTD.
JANATHA ESTATES DEVELOPMENT BOARD AND OTHERS
DHEERARATNE ,J„ ANDWIJETUNGA J.
S.C. APPLICATION NO. 515/922nd AND 3rd JULY, 1996.
Fundamental rights – Article 12(1) of the Constitution-Time Bar-Private saleof land vested in the Land Reform Commission – Failure to call for publictenders – Infringement of the right to equality.
The Petitioner company was engaged in mining and quarrying silica quartzon a land five acres in extent from Ambalamana Estate, having purchasedthe same from the Land Reform Commission, by private treaty. A request byhim to purchase an eight acre block adjoining the said land was refused bythe Minister of Plantation Industries as it had been decided to “tender theland by advertisement". However, shortly prior to that decision, the Ministerhad approved the sale by private treaty of an extent of 10 acres of land fromAmbalamana Estate to the 5th Respondent Company, for silica quartz min-ing. Pursuant to such approval the 5th Respondent Company made a planfor 10 acres of land and entered into business commitments with Japanesebuyers, pending the purchase of the land. The said land did not includeany portion of the eight acres which the Petitioner Company had sought topurchase. The proposed sale to the 5th Respondent Company was there-after suspended; but a Cabinet decision approved the sale pursuant towhich a block of 10 acres was sold to the 5th Respondent Company, byprivate treaty. An extent of 4A 3R 15P out of the said 10 acres formed a partof the eight acre block which the Petitioner Company had wanted to buy.
The application is not time-barred by reason of the failure of the Peti-tioner to challenge an imminent infringement of his right. The Petitionerwas entitled to wait until there was an actual infringement. The sale to the5th Respondent constituted such infringement; and the Petitioner chal-lenged it within the prescribed period.
The sale of the land to the 5th Respondent by private treaty, includingan extent of land which the Petitioner wanted to buy is contrary to the
Cabinet decision and violative of the Petitioner's right to equality underArticle 12(1) of the Constitution.
APPLICATION for relief for infringement of fundamental rights.
E.D.Wickramanayake with S. Mahenthiran and Anil Tittawella for Peti-tioner.
Saleem Marsoof, D.S.G. with Miss. Demuni, S.C. for 1st, 2nd, 3rd, 4th and6th Respondents.
R.K.W. Goonesekera for 5th Respondent.
Cur. adv. vult.
12th September, 1996.
ORDER OF COURT [READ BY WIJETUNGA, J.]
The Petitioner Company purchased by private treaty two allotmentsof land five acres in extent out of Ambalamana Estate from the LandReform Commission in 1985 and 1986, and was engaged in mining andquarrying silica quartz, having obtained the necessary statutory li-cences. Between December, 1987 and October, 1989, the Petitionerrepeatedly asked for another eight acre block adjoining the land it al-ready owned. This request was refused by the Minister of PlantationIndustries who, by his letter dated 11.11.90 addressed personally tothe Deputy Chairman of the Petitioner Company, stated that "there areseveral applicants for this land and I have decided to tender the landby advertisement. You may therefore request Krishna Mining Co.(Ceylon) Ltd., to respond to the Advertisement."
General Metals Ltd., the 5th Respondent, was also interested insilica quartz mining, and applied for land from Ambalamana Estate;first for 25 acres in 1986, and thereafter for 10 acres in 1989. By letterdated 19.9.89 (5R3), the 3rd Respondent, Secretary to the Ministry ofState for Plantations, informed the Chairman of the 1st Respondent,the Janatha Estates Development Board, (JEDB) that “the Hon. Minis-ter of Plantation Industries has approved the sale of 10 acres ofAmbalamana Estate including the abandonedTea Factory with ac-cess road of 30‘ width, to Mr. P.B.S. Dissanayaka and Mr. K.G.C.Wickramawardana of General Metals Ltd., No. 241, Sri SangarajaMawatha, Colombo 10, on the basis of a valuation by the Chief Valuer.
A copy of the Sketch Plan of the 10 Acres requested for is annexed."This was communicated by the Property Development Unit of the JEDBby letter dated 20.9.89 to the 5th Respondent who was asked to "getthe above extent of land including the area on which the abandonedTea Factory is situated providing an access road 30' wide, surveyed bya Licensed Surveyor at your expense and forward to us the OriginalSurvey Plan along with 3 certified copies thereof." This land was sur-veyed, and a Survey Plan No. 86 dated 24.10.89 prepared by W.M.E.Uduwawala, Licensed Surveyor, was submitted by the 5th Respondentto the Property Development Unit of the JEDB, which in turn forwardedit on 26.10.89 to the Senior Asst. Valuer, Valuation Department, Kandywith a request for valuation. (It appears from a subsequent CabinetMemorandum that allotment was then valued at Rs. 100,000/-).
In a very short time the 5th Respondent then entered into certainbusiness commitments with Japanese buyers in the expectation thatit would receive this land. However, on 20.11.89, the 5th Respondentwas informed by the Property Development Unit of the JEDB that ithad been instructed by the Ministry to stay action with regard to theproposed sale of the 10 acres, since the sale would be reviewed bythe Ministry shortly, and that it would not pursue the matter until fur-ther instructions were received.
Thus, the position as at 30.6.91 (the date of the Cabinet Memoran-dum) was that, on the one hand, the Petitioner had purchased fiveacres of land for silica quartz mining and its request for another 8acres had been refused. The 5th Respondent had not purchased anyland, and the approval granted for the purchase of a 10 acre block,which had been surveyed and valued, had been suspended. Govern-ment policy was repeatedly stated to be that such land would not bealienated by private treaty and would be sold only by public tender.
There is no doubt that the 5th Respondent had thereby suffered aninjustice, because the approval granted, presumably after due consid-eration, in September, 1989, was stayed just two months later. Con-scious of that injustice, a Cabinet Memorandum dated 30.6.91 waspresented by the Minister of Plantation Industries in which it was statedinter alia that –
*on the instructions of the JEDB, the General Metals
Ltd., had got the 10 acres of land surveyed and valued at theirown cost, as a pre-requisite for the sale… [subsequently] thethen Hon. Minister decided in 1990 to call for tenders for the saleof Silica Quartz land in the Ambalamana Estate. In view of thisdecision, the JEDB had to stop the sale of 10 acres of land to theGeneral Metals Ltd.
Therefore the General Metals Ltd. had made several appeals tothe Ministry of Plantation Industries requesting to honour the writ-ten assurance given by the JEDB to sell 10 acres of land to them
the following facts need consideration :
"(a) When Krishna Mining Co., Ltd., made an application duringthe same period in which the General Metals Ltd., made a re-quest for a portion of land, the former Company had been allowedto purchase lands for Silica Quartz Mining while General MetalsLtd., had been denied this facility.
The J.E.D.B. had given a written assurance in 1989 that 10acres of land will be sold to the General Metals Ltd.
On the instructions of the J.E.D.B., the General Metals Lim-ited has got this land surveyed and valued at their expense.
On the assurance given by the J.E.D.B. this company hascontracted with an importer in Japan for the supply of silica andhad incurred expenses for the importation of mining equipment ata cost of approximately Rs. 8 million." (emphasis added)
The Cabinet, on 21.8.91, granted approval –
"(i) to sell not exceeding 10 acres of silica Quartz Lands fromAmbalamana Estate to General Metals Ltd., at afresh valuationby the Chief Valuer. The mining and export of silica Quartz to besubject to the approval of the Ministry of Industries, Science andTechnology; and
(ii) to dispose the balance silica Quartz Lands of the AmbalamanaEstate by calling for public tenders." (emphasis added)
The Petitioner's complaint is that thereafter the 5th Respondentwas allocated, not the original ten-acre block already approved butanother ten-acre block adjacent to the Petitioner's land, which includea portion that the Petitioner had asked for. The Petitioner was informedby the J.E.D.B. by letter dated 17.7.92, that this allotment had beensold. The present application was filed on 17.8.92, within one monththereafter. It now transpires that the sale was by Deed No. 4631 at-tested by Prosper de Costa, Notary Public dated 20.7.92. The landtransferred is depicted as Lots 1 to 3 in Plan 618, made by S.M.Abeyratne, Licensed Surveyor (5R34), which is undated, although itrefers to three dates of survey, viz. 10.11.90,25.4.91 and 17.5.92.
Learned counsel for the Petitioner contends that the transfer wasin violation of Article 12(1) because Government policy in regard toalienation of land for silica Quartz mining was that public tenders wouldbe called for; that when the Petitioner requested 8 acres out of suchland, it was refused on the basis that tenders would be called for; andthat thereafter to allow the 5th Respondent to purchase by private treatythe very block which the Petitioner had asked for, was a denial of equaltreatment. Learned counsel, however, concedes that an exception couldfairly and properly have been made in respect of the 10 acre allotmentwhich had been approved for the 5th Respondent in September, 1989;but he argues that the Cabinet decision of 21.8.91 did make that ex-ception, and only that exception, and did not authorize the sale byprivate treaty to the 5th Respondent of any other allotment, whetheralready identified or to be thereafter identified.
It is necessary to consider whether the 10 acre allotment depictedin Plan 86 is the same, or substantially the same, as the 10 acreallotment shown in Plan 618. Plan 86 was prepared at the instance ofthe 5th Respondent who forwarded it to the 1 st Respondent, but it wasnot produced by the 1 st or the 5th Respondent; nor the "Sketch Plan".The submission of learned counsel for the 5th Respondent in that re-gard was that the 5th Respondent had not insisted on a particular blockof land.
This submission is negated by what the 5th Respondent stated inits petition to the Court of Appeal dated 13.11.91, praying for the issueof a Writ of Mandamus in the same connection, wherein it averred interalia as follows:-
"9. Thereafter the Petitioner Company had the land surveyed andby letter dated 26th October, 1989 addressed to the Manager ofthe Property Development Unit the Petitioner forwarded SurveyPlan bearing No. 86 made by W.M.E. Uduwawala, Licensed Sur-veyor
10. By letter dated 27th October, 1989, the said Manager of theProperty Development Unit inquired from the Managing Directorof the Petitioner Company whether he was prepared to purchasethe said 10 acres and the Managing Director of the PetitionerCompany for and on behalf of the Petitioner Company by letterdated 1 st November, 1989 replied stating that he was prepared topurchase the said land — By letter dated 26th October, 1989the said Manager of the Property Development Unit requestedthe Senior Assistant Valuer of the Valuation Department to valuethe land allocated to the Petitioner Company" (Empha-
There is no material to show that any other allotment had beenidentified for allocation to the 5th Respondent before the Cabinet decisonof 21.8.91.
The Cabinet Memorandum of 30.6.91 refers to "the 10 acres ofland surveyed and valued at their [the 5th Respondent's ] own cost, asa pre-requisite for the sale." The only land which met that descriptionwas that depicted in Plan 86. No other land, even if under considera-tion for allocation to the 5th Respondent had been surveyed and val-ued. Further, the Cabinet Memorandum referred to, and the Cabinetdecision required, a "fresh" valuation; that meant that the entity to betransferred had already been valued but that a second valuation wasrequired. If the Cabinet had contemplated the sale of a new allotment,not yet identified, It would have required "a valuation", and not afreshvaluation.
The letter to the 5th Respondent from the Ministry of PlantationIndustries dated 4.9.91 makes the position even more explicit when itstates that "although the land has been earlier surveyed and valued,the Cabinet decision directs us to obtain a new valuation from theChiefValuer."
Learned counsel for the 5th Respondent submitted that the Cabi-net decision authorized the sale of 10 acres, leaving the selection ofthe land to be done at a future date. However, the Cabinet decision,considered together with the Memorandum dated 30.6.91, and the otheravailable material does not permit that interpretation. The Memoran-dum highlighted a particular grievance or injustice, that a specific salealready approved, had been stayed as a result of the decision to insiston public tenders ; and the remedy was to make one exception inregard to the particular land in respect of which a commitment hadpreviously been made.
The resulting position is that all sales of silica quartz land fromAmbalamana Estate were required to be by public tender, with a singleexception only, in the case of the land previously approved for alloca-tion to the 5th Respondent and shown in Plan 86. Consequently, the 8acre block requested by the Petitioner had to be offered for sale bypublic tender.
But the 10-acre block transferred to the 5th Respondent by DeedNo. 4631 dated 20.7.92 depicted in Plan 618, seemed to be quite dis-tinct from that shown in Plan 86; the “abandoned Tea Factory” did notappear in Plan 618; and the sale thus appeared to be contrary to whatwas decided by the Cabinet on 21.8.91. Such a sale was undoubtedlydiscriminatory, and in violation of the petitioner's fundamental right toequality before the law and the equal protection of the law, guaranteedby Article 12(1) of the Constitution.
However, it appeared equitable, if the 10 acre block of land in Plan86 still remains unalienated, that the 5th Respondent should be al-lowed, if so advised, to purchase that allotment in terms of the Cabinetdecision of 21.8.91. Accordingly at the conclusion of the oral argu-ment, we asked learned Deputy Solictor General to clarify the positionas to the land originally allocated to the 5th Respondent, the land actu-ally transferred, and the land now available. The 1 st to 4th respond-ents thereafter tendered a copy of Plan No. 86, and it was then agreedthat the position was as follows:
The land originally allocated, depicted in plan No. 86, con-sisted of five allotments, namely
Lot 1 – 2A OR 20P
Lot 2 – 1A 2R 02P
Lot 3 – 1A 1R 20P
Lot 4 – 4A OR OOP
Lot 5 – 1A OR OOP (including the factory)
10A OR 02P
The land actually transferred, depicted in Plan 618 did notinclude the factory and consisted of three allotments, namely.
Lot 1 – 4A 3R 15P
Lot 2 – 4A 1R 05P
Lot 3 – 0A 3R 20P
10A OR OOP
The corpus covered by Lots 1,2, and 3 in Plan 86 (aggregatingto 5A OR 02P) was almost the same as Lots 2 and 3 (5A OR25P) in Plan 618.
Lots 4 and 5 in Plan No.86 had been transferred to a thirdparty " and were no longer available for transfer to the 5thRespondent.
Lot 1 in plan 618 was part of the 8-acre block which thePetitioner had wanted to buy, but which it had been decided(according to letter dated 11.11.90) to sell by public tender.
When it decided that land should only be sold by public tender,the only exception which the Cabinet made was in respect of lots1 to 5 in Plan No. 86. It is true that this may have included a part ofthe 8-acre block which the Petitioner wished to buy, and which the
Petitioner was told would be sold by public tender, but it is notnecessary to consider whether the 5th Respondent should havebeen denied that portion, because learned counsel for the Petitionerconceded that he was not objecting to the transfer of the landdepicted in Plan 86. His challenge is therefore restricted to Lot 1 inPlan No. 618, (4A 3R 15P in extent). That Lot was not covered by theCabinet decision, and its alienation to the 5th Respondent was inviolation of the petitioner's right to equal treatment – namely an equalopportunity to purchase by public tender – and the transfer must bepro tanto set aside, and the consideration, pro tanto refunded.
The Respondents took a preliminary objection that the applica-tion had been filed out of time. This objection had two limbs. Firstly,it was said that the Petitioner's complaint was in respect of a decisionto allocate or sell the land depicted in Plan 618 to the 5th Respondent,and that the Petitioner had been aware of this in November, 1990, orat the latest in October, 1991. Secondly, it was said that if the sale tothe 5th Respondent was an infringement, the Petitioner had beenaware of that, as an imminent infringement long before 17.8.92.
A decision to allocate the land to the 5th Respondent shouldnecessarily have been in writing, and communicated to the 5th Re-spondent. No such decision or communication has been alleged orproved. To sustain an objection of this nature that a decision was notchallenged within one month, it is necessary for the Respondentsto prove that there was such a decision and that the Petitioner hadknowledge of it more than one month before making the applicationto this Court. In the absence of such proof, the mere fact that thePetitioner had some fear or anticipation of such a decision is insuf-ficient.
As for the imminent infringement, the facts of this case showthat a change of mind was always a possibility. Although the Peti-tioner must have realized that an infringement was possible, it couldonly have complained if it could have shown that it was also immi-nent. In the absence of any such official communication, it is notpossible to hold that the Petitioner had knowledge that an infringe-
ment was then imminent. However, it is unnecessary to decide thatquestion because the Petitioner, although entitled to challenge animminent infringement, was nevertheless entitled to wait until therewas an actual infringement. The facts show that the land was trans-ferred on 20.7.92 and that three days earlier the Petitioner had beeninformed that it had already been sold. It was that sale which thePetitioner challenged, and he did so within the prescribed period ofone month, and hence the preliminary objection fails.
For the foregoing reasons, we grant the Petitioner a declarationthat the 1 st Respondent, by the sale of Lot 1 in Plan No. 618 to the 5thRespondent, violated the petitioner's fundamental rights guaranteedby Article 12(1) of the Constitution. We further hold and declare thatthe sale or alienation of that Lot effected by Deed No. 4631 dated20.7.92, attested by Prosper de Costa, Notary Public is null and void,and that the 5th Respondent is entitled to a refund, pro tanto, of thepurchase consideration. The 1st Respondent is directed, within sixmonths, to put up the said lot 1 for sale by public tender, and thePetitioner and the 5th Respondent will also be entitled to bid. In view ofthe fact that the Petitioner had possession of that Lot for a considerableperiod of time before 1992, we do not consider it equitable to award thePetitioner compensation.
On 27.8.92, learned President's Counsel who then appeared forthe 5th Respondent brought to the notice of Court that the land inrespect of which the Petitioner claims rights had already been trans-ferred by Deed No. 4631. He gave an undertaking that the 5th Re-spondent would submit to Court, on or before the last day of eachmonth, a statement setting out the quantities of silica quartz minedfrom the portion of land purchased on that Deed and that the state-ment would be certified by the Directors of the 5th RespondentCompany. In view of that undertaking, learned counsel for the Petitionerdid not pursue his application for an interim order. The 5th Respondenthas accordingly submitted such statements commencing fromSeptember, 1992.
In all the circumstances of this case, we do not consider it equita-ble either to direct the 5th Respondent to account to the JEDB for thesilica quartz mined, or for the proceeds of sale, or to direct the JEDBto pay interest on the refund of the purchase price.
We award the Petitioner costs in a sum of Rs. 15,000/- payable bythe 1st Respondent.