PIYASIRI v. PEOPLES BANK

005-SLLR-SLLR-1989-V-2-PIYASIRI-v.-PEOPLES-BANK.pdf


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Piyaslri v. People's Bank (Wljeratne, J.)
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PIYASIRI
v.PEOPLE’S BANK
COURT OF APPEALWIJEYARATNE. J.
C.A. APPLICATION No. 149/83.
JUNE 19, 1989
Writ of Mandamus – Is People’s Bank a public body? – Effect of Circular – Discretionto call for recommendation.
The Minister of Finance, under section 42A of the People's Bank Act, gave directionsto the Board of Directors to implement the recommendations of a one man commissionrelating to promotion of Bank clerks and in Consequence the Board issued a circular186/82 formulated to implement the said recommendations;
Held-
Mandamus did not lie to. compel the Board to call the petitioner, a Bank- clerk, for aninterview with a view to promotion in terms of the circular as:
the Bank though subject to ministerial control is not a public body butbasically a commercial bank;
the said circular 186/82 does not have statutory force;
in any event, in the implementation of the circular which wsts a private andinternal matter, the Bank has a discretion to call for recommendations from
' a superior officer (which recommendation the petitioner failed to obtain).
Cases referred to:
Wijetunga v. Insurance Corporation 11982) 1 Sri LR 1
Chandrasena v. National Paper. Corporation [1982] 1 iSri LR 19
Ceylon Bank Employees' Union v. Yatawara 64 NLR 49, 58
Gunaratne v. People's Bank [1986] 1 Sri LR 338
Wljeratne v. People's Bank [1984] 1 Sri LR 1
Wijeratne v. Air Lanka Ltd [1987] 2 Sri LR 128
Weligama Multi-purpose Co-operative Society Ltd. vs. Daluwattd. [1984] 1 Sri LR195
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{19891 2SriLR
ft v. East Berkshirs Health Authority, ex parte Walsh [1984] 3 All ER' 425
Malloch v. Aberdeen Corp. [1971] 2 All ER 1278APPLICATION for writ of mandamus.
H. L de Silva P.C. with Gomin Dayasiri for petitioner.
Dr. H. W. Jayewardene, Q.C. with Kanag-tswaran, P.C. Harsha Amarasekera andHarsha Cabraal for the respondent.
Cur. adv. vult.
July 20, 1989.
Amjeyaratne, j.
the petitioner who is a clerk in the respondent Bank has applied foran order in the nature of a Writ of Mandamus directing therespondent to call the petitioner tor an interview in terms of the StaffCircular No. 186/82 dated 27.5.1982 in respect of promotion to GradeIII, Class I.
According to the petitioner, he joined the respondent Bank as aGrade VI clerk on 1.7.1968 and was in Grade III, Class III, at therelevant time. He averred that in or about January 1982, HisExcellency the President appointed one Nihal Wiratunga to inquireinto promotions to Grade III and determine the basis on whichpromotion should be effected. In consequence, the said NihalWiratunga held an inquiry and made certain recommendations.Pursuant to these recommendations the Hon. Minister of Financegave written directions (under section 42A of the People’s Bank Actas amended) to the Board of Directors of the respondent Bank toimplement the said recommendations. Accordingly the Board ofDirectors of the-respondent Bank decided on 22.4.1982 to implementthe said recommendations and the respondent bank called forapplications for. such promotion to Grade II, Class I, from eligiblecandidates in terms of the said Circular 186/82 which had beenformulated. The petitioner made an application, but the respondent,by his letter dated 21.7.1982, informed the petitioner that thepetitioner's application will, not be considered as the petitioner’spromotion had not* been recommended. The petitioner and his tradeunion protested and as a result the petitioner was called for thewritten examination. The petitioner sat for the written examination inwhich he was successful, and in response to his letter the Personnel
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Piyasiri v. People's Bank (Wljeratne, J.)
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Manager of the respondent Bank had informed the petitioner by hisletter dated 6.10.1982 (marked “U") that the Matara RegionalManager of the Bank had not recommended his promotion for thefollowing reasons
Subordinating the interests of the Bank to his own personalinterests;
Bringing discredit to the Bank and Obstructing superiorofficers;
Not carrying out his duties and not maintaining discipline.
The petitioner had denied these charges and claimed that in anyevent the recommendation of the Regional Manager was not anecessary pre-condition for his promotion and made protestspersonally and through his Trade Union, the Ceylon BankEmployees’ Union. The General Manager of the respondent hadthereupon appointed a committee of three senior officers to inquireinto the matter and they had rejected the appeal of the petitioner.
The petitioner avers that under the circumstances the respondentis under a legal duty to call him for an interview and prays for a Writof Mandamus accordingly.
The respondent has filed certain preliminary objections dated26.2.1983 to the grant of this application.
Briefly the respondent states that it is not a public authority nor adepartment of the State amenable to the supervisory jurisdiction ofthis Court, but is ah independent corporate, body engaged in thepurely commercial activity of the business of banking, and that thepetition does not disclose a legal right to the performance of a legalduty by the respondent imposed by statute. This right is granted onlyto compel the performance of duties of a public nature and not forenforcement of private rights and that the petitioner’s claim ismisconceived in law and, his remedy, if any, is in another forum, notin public law.
At the argument into the preliminary objections, various authoritieswere cited by Dr. H. W. Jayewardene, Q.C., on behalf of therespondent Bank arid by Mr. H. L. De Silva, P.C., on behalf of thepetitioner.
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119891 2 Sri LR
The Writ of Mandamus lies to compel a*person or body to performpublic duties imposed on them by law. Such duties may be imposedby statute, charter, common law or custom. It will not issue for theenforcement of merely private rights.
In England it has been held that the courts will not interfere incases of dispute between members of private corporations eventhough carrying on business under a Royal Charter (R v. Bank ofEngland (1818-2B & Aid.624). However, Mandamus will lie to compela company to perform its statutory duties.
Therefore the question arises whether the respondent (People'sBank) is a public body performing public duties or statutory duties.
Learned counsel for the petitioner quoted the People's Bank Act,No.29 of 1961, as amended. He relied on section 4, which lays downthe purposes of the Bank, namely, to develop the co-operativemovement, rural banking and agricultural credit. He also cited section34, which states that the accounts of the respondent were to besubmitted annually to the Auditor General, and section 42A whichempowers the Minister to give general directions in writing to theBoard of the respondent.
He also cited sections 8 and 10 which give the Minister the powerto appoint the. Chairman and the Directors. He argued that thePeople’s Bank is a public body and it is the duty of the Board tocomply with the Minister’s directions under section 42A.
In our country the position of statutory corporations like thePeople's Bank has been considered in several decided cases.
In the case of Wijetunga vs. Insurance Corporation (1), which wasa case of infringement of fundamental rights under the Constitution, itwas held that the question whether the Insurance Corporation is or isnot a department of the State would be dependent on the InsuranceCorporation Act, No. 2 of 1961. In that case certain tests were laiddown to decide whether any public corporation set up by statute was.an agency of the Government.
These include –
Is the body performing a task formerly carried on by privateenterprise?
To what extent is it subject to Ministerial control, for example,
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Piyasiri v. People's Bank (Wijeratne, J.)
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has it independent discretionary powers?
Must it consult a Minister before it acts?
Can a Minister give directions?
Is its function one which has historically been regarded as
governmental?1
Is it incorporated?
Is it subject to government audit?
Is its authority general or local?
Is it a mere domestic body?
Is execution against its property allowed?
In this case it was held that whether the functional test or thegovernment control test was. applied, the' Insurance Corporationcannot be identified With the government and hence its action cannotbe designated as "executive or administrative action".
For similar reasons, in the case Chandrasena v. National PaperCorporation (2), the Supreme Court held, that the acts of the NationalPaper Corporation did not amount to executive or administrativeaction and dismissed the application, of the petitioner for allegedinfringement of fundamental rights under. Articles 12(2) and 426 of theConstitution.
In another context Sansoni J. (as he then was) in the case ofCeylon Bank Employees' Onion vs. Yatawara (3) held that the Bankof Ceylon (Which was nationalised by the Finance’ Act, No.65 of1961) was not a Government'department.
However, in Guharatne vs. .People’s Bank (4) where the Banksought to lay down a condition that’the appellant (Gunaratne) wasnot to-join or continue as a'member of the trade union if he was to.gain promotion’and. where, the appellant brought an action in theDistrict Court that the. conditions were null and void as they were adenial, of his fundamental right of freedom of association undersection, 18(1)(f) of the 1972 Constitution, the Supreme Court held thatthe Bank would constitute the State or the Government within themeaning of that section.
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11989] 2 Sri LR
In the case of Wijeratne vs. People's Bank (5) where thepetitioners who were security officers in the Bank sought relief undersection 126 of the Constitution on the ground that the new grading oftheir posts constituted an infringement of their fundamental right toequality (under Articles 12, 4(c) and (d) of the Constitution), it washeld by the Supreme Court that there was no State action orexecutive or administrative action, and the application was dismissedon this preliminary objection.
Sharvananda J. (as he then was) dealt exhaustively with theprovisions of the People’s Bank Act, No.29 of 1961 as amended, andheld that the Bank's main role is that of a commercial bank and itscommercial activities cannot qualify as State action. In the case ofRajaratne vs. Air Lanka Ltd. (6), where the petitioner complained ofunequal treatment in breach of Article 12(1) of the Constitution andsought relief under section 126, it-was held that Air Lanka Ltd. couldbe considered an agent or organ of the Government and hence itsaction can therefore be properly designated as executive oradministrative action within the meaning of Articles 17 and 126 of theConstitution.
It should be mentioned that all these cases (except that of CeylonBank Employees’ Union vs. Yatawara (3) deal with breach offundamental rights under the Constitution. But this is an applicationfor a Writ of Mandamus and. the question to be decided here iswhether the respondent bank is a public body performing statutoryduties and no doubt these judgments are helpful to arrive at adecision.
The People's Bank and other State corporations were set up in thiscountry within the last 50 years or so- Their.purpose was to enablethe State to venture into business undertakings. They strike a meanbetween the rigid. bureaucratic control of civil servants and theflexibility of the private sector. Though the respondent bank was setup to assist and develop the co-operative movement and is subject toministerial control, it does not thereby become a public body It isprimarily a commercial bank engaged in the business of banking. Tobe amenable to Mandamus, there must be an exercise of statutorypowers by a public body and it is this quality which injects theelement of public law.
. In the case of Weligama Multi-purpose Co-operative Society Ltd.
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Plyaslri v. People's Bank (Wi/eratne, J.)
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vs. Daluwatta (7) where the petitioner-respondent, the Manager ofthe appellant society, was interdicted and served with a charge sheet,sought a Writ of Mandamus to compel the appellant society to payhim half a month’s salary after the sixth month of interdiction in termsof Circular No.18 of 1975 dated 23.7.75 issued by the Secretary ofthe Co-operative Employees' Commission, it was held by five Judgesof the Supreme Court that there was no public or statutory duty caston the appellant society and dismissed the application.
In the recent English case of R. vs. East Berkshire HealthAuthority, ex parte Walsh (8), which was relied on-by learned counselfor the respondent, it was held that the question whether a dismissalfrom employment by a public, authority was subject to public lawremedies depended on whether there were special statutoryrestrictions on dismissal which underpinned the employee’s position.It was held that the remedy otjudicial review is only available whenan issue of public law is involved. In the said case reference wasmade to the case of Malloch vs. Aberdeen Corp. (9) where LordWilberforce said that it was the existence of statutory provisionswhich injects the element of public law necessary to attract theremedies of administrative law. .
Having regard to the constitution arid functions of the respondentBank, I hold that there is no public duty or statutory duty in this caseto call the petitioner for this interview. As is well known, this Writ willnot issue for private purposes.
Staff Circular 186/82 (which adopts the Nihal Wiratunga Report onthe Minister's directions) is only a circular and not a regulation havingstatutory force. The said circular lays down the policy and does notpurport to provide for every step. The implementation of this circularis a private and internal matter of the respondent Bank. To call forrecommendations from superior officers before a promotion iseffected is a common practice based on prudence prevalenteverywhere in the world and is nothing unusual. I am of the view thatin the implementation of the circular the respondent Bank has amodicum of discretion as to whether recommendations should besought from superior officers before effecting promotions.
For these reasons I uphold the preliminary objections of therespondent and I am of the view that the petitioner has no right in lawfor the reliefs claimed in his application.
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l dismiss this application with costs payable to the respondent.
Application dismissed.