054-NLR-NLR-V-52-M.-F.-DE-S.-JAYARATNE-Appellant-and-MOHAMED-MIYA-Respondent.pdf
[In tSe Privy Council.]
1950Present: Lord Porter, Lord Oaksey, Lord Radcliffe,'Sir John Beanmont, Sir Lionel LeachM. F. de S. JAYARATNE, Appellant, and MOHAMED MIYA,
Respondent
Privy Council Appeal No. 18 of 1949
S. G. 75—Application for a Writ of Certiorarion the Controller of Textiles
Writ of Certiorari—Courts Ordinance, Section 42—Meaning of " other person ortribunal ”—Defence (Control of Textiles) Regulations, 1945—Regulation 62—•Meaning and effect of “ has reasonable grounds to believe
The appellant, who was” the Controller of Textiles, notified the respondent,who' was a dealer in* textiles, that he found him to he a person unfit to hold atextile licence and that he ordered the revocation of all the textile licencesheld by him. The revocation was made under the powers given to the Controllerof Textiles by Regulation 62, which stated that he could cancel a textile licencewhere he had reasonable grounds to believe that any dealer was unfit to beallowed to continue as a dealer.
In an application made by the respondent for a mandate in the nature of a■writ of certiorari—■
Held, (i) that the appellant was a “ person ” within the meaning of section42 of the Courts Ordinance.
(ii) that although under Regulation 62 there must exist in fact reasonablegrounds of belief, known to the Controller, before he could validly exercisethe power of revocation, the appellant's decision to revoke a licence underthat Regulation was not a judicial or quasi-judicial act to which the remedy ofcertiorari could be applied.
Nakkudo AK v. Jayaratne (1950) 51 N.L.R. 457 followed.
A PPEATj from a decree of the Supreme Court. The judgment ofthe Supreme Court is reported in (2947) 48 N. L. R. 461.
Sir David Maxwell Fyfe, K.G., with Frank Gahan, for the appellant.No appearance for the respondent.
Cur. adv. vult.
June 29, 1950. [Delivered by Lord Radcliffe]—
»
This appeal from a Decree of the Supreme Court of Ceylon datedSeptember 19, 1947, raises what are in effect the same questions asthose which have been dealt with by their Lordships in the appealNo. 17 of 1949, Nakkuda Ali v. M. F. de S. Jayaratne.
The appellant is the Controller of Textiles for Ceylon and is chargedwith the administration of the textile control scheme under the Defence
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(Control of Textiles) Regulations, 1945. The respondent carries onbusiness under the name of H. A. N. Mohamed & Co. at two addresses
in Colombo and was the holder of lieenees issued pursuant to thoseregulations, which authorised him to deal in textiles at those addresses.By a letter dated February 21,1947, the appellant notified the
respondent that he ' found him to be a person unfit to hold a textilelicence and that he ordered the revocation of all the textile licencesheld by him as from the same date. The revocation was made underthe powers given to the Controller of Textiles by regulation 62, whichstates that he may cancel a textile licence where he has reasonable groundsto believe that any dealer is unfit to bo allowed to continue as a dealer.
On February 26, 1947, the respondent obtained from the SupremeCourt an order directing the appellant to show cause why a mandatein the nature of a writ of certiorari should not be issued to him quashingthe cancellation order contained in his letter of February 21. Theappellant duly appeared to show cause before the learned Chief Justiceof Ceylon, Sir John Curtois Howard, and on September 19,1947,
the Chief Justice delivered judgment holding that the rule nisi ought tobe made absolute and the writ of certiorari issued accordingly. Adecree of the same date was drawn up to this effect, quashing theappellant’s order of February 21 and directing him to pay therespondent’s costs. The appellant asks that that decree should bereversed.■
The appellant’s argument raised the same objections to the jurisdictionof the Supreme Court as their Lordships have dealt with in the previousappeal, No. 17 of 1949. Having regard to the decision of the FullBench in the ease of Abdul Thassim v. Edmund Rodrigo, 48 N. L. R. 121,these objections were not open to the consideration of the Chief Justicein the Supreme Court. Their Lordships will not repeat what they havesaid in their Judgment in the other appeal, but the views that theyhave expressed in that case conclude the subject of this appeal. Whilethey hold that the appellant is a “ person ” within the meaning of$. 42 of the Courts Ordinance and while they construe Regulation 62as importing what is called an objective test, namely, that there mustexist in fact reasonable grounds of belief, known to the Controller, beforehe can validly exercise the power of revocation, they do not think:that the appellant’s decision to revoke a licence under that Regulationis a judicial or quasi-judicial act to which the remedy of certiorari canbe applied by the Court.
The appellant is therefore entitled to have the Decree of the SupremeCourt set aside on the ground that a mandate in the nature of a writof certiorari doesnot liein thiscase.But it is desirable that their
Lordships should indicate very briefly what view they have formedon the merits of the respondent’s application, if only because a questionof the costs of the Supreme Court hearing is involved.
The system governing the surrender of coupons by a dealer to theappellant’s TextileCouponBank isfullyset out in the Judgment of the
Chief Justice. Itis alsoset outin their Lordship’s Judgment in the
previous appeal. It is notr necessary to recite it again. It is sufficientto say that inthis case thetwomaterial dates are November
30 and December 18.1946. In respect of the earlier date the
respondent’s ledger account at the Bank showed a credit of 21,500 points;the foil and counterfoil of the paying-in slips showed a correspondingnumber of coupons surrendered. In respect of the later date, therespondent’s ledger account showed a credit of 22,000 points:the foil
and ' counterfoil of the paying-in slips showed a corresponding numberof coupons surrendered. On the other hand, the registers kept by thereceiving clerk, shroff and chief clerk showed 1,500 and 2,000 pointsonly as surrendered by the respondent on those respective days. More-over, the foils and counterfoils (of which the counterfoils had beenobtained by an inspector from * the respondent’s possession) showedobvious signs of interpolation in respect of the word “ Twenty ” on eachof the two occasions and the appellant in fact obtained a report fromthe Government Examiner of Questioned Documents which made itat any rate very probable that a subsequent interpolation in each casehad been responsible for adding twenty thousand to the number ofcoupons covered by the paying-in slips.
These facts the appellant brought to the respondent’s attention byletter dated February 18, 1947, and after stating them he added: —“ I have reason to believe that you got these interpolations made sendcontrived to obtain in the ledger account credit for a bigger amountthan you were entitled to on the basis of the coupons surrendered byyou. If that is so, I have to regard you as a person unfit to continueto hold a licence to deal in textiles and I propose accordingly to revokeyour licence.” It is plain from what followed in the letter that therespondent had already by that date made some statement to theAssistant Controller who had been deputed by the Controller to hold anenquiry into these matters; but the respondent did not inform theCourt what he had said or what had been said to him on that occasion.The letter concluded by suggesting that if he had any explanation tooffer beyond what he had already said to the Assistant Controller heshould submit it in writing at once, and inspection of documents wasinvited.
The respondent sent a reply through his proctor on February 20.Certainly the letter opened with a formal denial of “ all and singularthe allegations made against him ”. But it is not easy to extract fromthe rest of the letter what was the attitude of the respondent to matterswhich, after all, came very close to him personally. His main themewas that there must have been a “ colossal fraud ” in the appellant’sDepartment, made possible by the faulty system operated there, and thatthe right thing to do was to have an investigation of the alleged forgeriesof the paying-in slips before any question of cancelling his licence arose.He declined to admit that there were any interpolations in the foilsor counterfoils or that additions had been made to them after theyhad been signed or initialled in the Department. In view of theextremely suspicious appearance of those documents it would have beenmore helpful towards an explanation if the respondent had made somestatement as to one thing that must have been within his own knowledge:Were the foils and counterfoils wholly or in part in the handwriting ofhimself or one of his employees? The letter finally contained statementsthat an employee of the respondent, Peter Fernando, who had apparently
been responsible for the work of surrendering the firm’s coupons to theBank, had disappeared after questioning:and that the firm’s hooks
were in order and showed that the full amount of coupons, as recordedin the ledger account, had in fact been surrendered on the two impugnedoccasions. This was supported, it was said, by the signatures and initialsof the appellant’s officers on the counterfoils of the paying-in slips whichhad been returned to the respondent from the Bank. Thus, in theend, the respondent appeared to be relying on the correctness of thepaying-in slips despite their suspicious appearance.•
If the appellant did not regard this letter as discharging the respondentfrom the suspicion which inevitably attached to him in view of thediscrepancies in the books and the appearance of the paying-in slips, itcannot be said that he came to any unreasonable conclusion. He mayhave been right or wrong. The respondent may have been the innocentemployer of a currupt servant. But that is not a question that wouldarise in these proceedings, even supposing that the appellant were to betreated as under a duty to act judicially in arriving at his decision. Onno view could he be required by that duty to treat the respondent’scase as if he were conducting a criminal trial with the prosecution putto. strict proof of what was charged.i The passage from Lord Haldane’sspeech in Local Government Board v. Arlidge, 1915 A. C. 120, which isquoted in the Chief Justice’s judgment in the Supreme Court makes thatplain. Nor is it perilaps out of place to recall that that passage, classicas 'it is in its appropriate field, relates to the duty of those upon whom“ the duty of deciding an appeal is imposed ”. It only leads to confusionto seek to apply it literally to a case such as the present in which nothingthat fairly resembles an appeal or a lis inter partes is taking place:in which, on the contrary, the foundation of the Controller’s jurisdictionto exercise his power is only that he should have reasonable groundsof belief.
These, as their Lordships see it, the appellant, did indeed possess:Putting aside what may have been contained in the statements of therespondent and Peter Fernando that were made to the Assistant Controllerwho held the enquiry, there were the foils and counterfoils, the evidenceof the Department’s own books, and the information of the receivingclerks, assistant shroff and shroff of the Coupon Bank itself. Thisinformation, presented in the form of affidavits 'at the hearing beforethe Chief Justice, was all to the effect that at the time when therespondent’s coupons had been surrendered on the two relevant occasionsonly the smaller number had been 'brought in and surrendered and thatthe paying-in slips to which they had respectively put their signaturesand initials had been altered subsequently to cover 21,500 and 22,000points- This was directly in contradiction with the respondent’s story,and there was no reason why, of the two accounts of what bad takenplace, the appellant should not decide to accept that of his own officials.There would be nothing to violate natural justice in doing so. He hadtaken care to let the respondent know with precision what were thediscrepancies in the Department’s books that related to his account;be had told him that he regarded the paying-in slips as having beentempered with, and that he considered himself to have reason to believethat the respondent had got the interpolations made so as to procurefor himself a false ledger credit; and he had invited an explanation.The respondent had given as much explanation as he would or could,apart from what he had already stated at the Assistant Controller senquiry. The learned Chief Justice, in his full and careful judgment,decided against the appellant on the ground that he “ condemned thepetitioner merely on suspicion ”. That was the basis of his view thatthe appellant had not acted judicially. It is here that their Lordshipsfeel compelled to differ from the Chief Justice in his appreciation ofthe merits of the case. In a sellse it is indeed true that the appellantcondemned the respondent on suspicion. But it does not adequatelyappreciate the situation to describe^ the respondent as acting merely onsuspicion. The suspicion which he entertained arose reasonably out ofthe facts that were before him, and nothing appears in the explanationwhich the respondent added to those facts that made it unreasonablefor the appellant to decide that his suspicion had not been removed andthat he was justified in regarding the respondent as unfit to retain adealer’s licence.
The respondent did not appear on the argument before the Board. Forthe reasons which have been given their Lordships will humblyadvise His Majesty that the Decree of the Supreme Court datedSeptember 19, 1947, should be set aside and that in place thereof anOrder should be made that the rule nisi obtained by the respondent bedischarged with costs. The respondent must pay the appellant’s costs ofthe appeal to the Board.'
Appeal allowed.