SAI NOONA v. MAGGIE SILVA AND AND ANOTHER

012-SLLR-SLLR-1989-V-2-SAI-NOONA-v.-MAGGIE-SILVA-AND-AND-ANOTHER.pdf


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SAI NONA
v.MAGGIE SILVA AND ANOTHER
SUPREME COURT
H. A. G. DE SILVA, J„ BANDARANAYAKE. J„ AND KULATUNGA, J.
S.C. No. 33/86SC LA No. 20/86
CA APPLICATION No. 1014/79-
JULY 10, 11, 17, 19, 20, 27 AND AUGUST 01, 1989
Acquisition under the Finance Act by People's Bank – Section .71(1 )(2)(3)of theFinance Act, No. 11 of 1963 amended by Law, No. 16 of 1973 – Natural justice
The premises sought to be acquired by the Bank under section 71 of the FinanceAct No. 11 of 1963 amended by Law No. 16 of T973 were owned by CK the.husbandof the appellant. He by Deed No. 21446 of 05.02.1964 sold it to D subject to the rightto obtain a retransfer of the land upon payment of the sum of Rs. 1,250/- with interestat 16% p.a. within 3 years of 05.02.1964. CK died on 26.04.65 leaving no issue andwithout obtaining a reconveyance. D transferred the land to M a sister of CK by DeedNo. 423 of 17.06.65. The Supreme Court in another case held the transfer to M wassubject to the condition in Deed No. 21446. S the widow of CK made an application
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dated 02.09.76 to the People's Bank (or redemption of the premises by acquisitionunder s. 71(3) of the Finance Act.
M. filed objections to the acquisition and the parties were summoned for an inquiryon 15.11.77. M was present with her lawyers. S was present also but moved for apostponement as her lawyer could not be present. This was refused. The inquiringofficer of the Bank made order that in the event of S's lawyers filing objections theseshould be copied to both Counsel representing M. Thereafter submissions against theacquisition were recorded in the presence of the parties including junior Counsel of Swho had arrived by then. S. then applied for a date for her senior Counsel to appearand make his statement. This was fixed for 14.12.77. On 28.11.77 the Attorney for Ssubmitted written counter objections. There was no proof of service of these coanter-objections on the counsel for M by the lawyers of S or by the Bank. On 14.12.77 thelawyer of M had appeared but S was absent and unrepresented. On 15.12.77 M’slawyer wrote praying for dismissal of S's application. On 14.12.77 the Bank had writtento M's lawyer to call over to make his submissions before 25.02.77. M wrote to theBank nominating her lawyer to attend the Bank for discussions. On 13.10.78 the Bankfound against M and made his determination to proceed with the acquisition.
Held –
The Bank is not compelled to adopt a particular procedure but what procedure itadopts must be made known to the parties. If any party is prejudiced for want of suchknowledge it may result in a denial of natural justice depending on the extent of theprejudice caused.
The notices of the inquiry give the impression that the scheduled inquiry is aformal inquiry. When on 15.12.77 the inquiry was postponed to 14.12.77 the petitioner-respondent (M) was entitled to expect the formal inquiry to continue.
The failure to issue a copy of the objections which the inquiring officer himselfhad ordered to be copied to the lawyer of the other party discloses a lack of thejudicial spirit required of an inquirer.
While seeking the submissions of S’s lawyer the Bank's only contact with M wasfor the purpose of persuading her to amicably settle the dispute.
the duty of making the correct decision was exclusively on the Bank and therewas no burden on the lawyer of the owner to activate the Bank.
Whether or not the failure to permit oral hearings would constitute a denial ofnatural justice will depend on the facts and circumstances and the issue in each case.
Cases referred to:
Perera v. Perera 41 NLR 344, 346
Maggie Silva v: Sai Nona 78 NLR 313
Perera v. People’s Bank [1985] 1 Sri LR 39
Emaliyana Perera v. People’s Bank [1987] 1 Sri LR 181
Morgan, v. United States 298 US 468
SCSai Nona v. Maggie Silva (Kulatunga, J.)113
Goldberg v. Kelly US 397, 254 at 297
Board of Education v. Rice [1911] AC 179
Local Government Board v. Arlidge [1915] AC 120, 140
Wiseman v. Borneman [1969] 3 All ER 274
Shariff v. Commissioner for Registration of Indian and Pakistani Residents 67NLR 433
Pett. v. Greyhound Racing Association Ltd. [1968] 2 AC 545, 549
Board of Trustees of Maradana Mosque v. Minister of Education 68' NLR 217
Kanda v. Government of the Federation of Malaya [1962] AC 322
R v, Wareham Magistrate’s Court, ex parte Seldon [1988] 1 All ER 746, 753
Clayton v. Chief Constable of Norfolk [1983] 1 All ER 984, 992
R v. Assim [1966] 2 All ER 887 – 8881
APPEAL from judgment of the Court of Appeal
N.R.M. Daluwatte, P.C. with J.C. Boange for 1st respondent-appellant (widow oforiginal owner seeking acquisition)
Dr. H.W. Jayewardene, O.C. with Bimal Rajapakse, Harsha Amersekere and H.Cabral for the petitioner-respondent (present owner)
Faiz Mustapha, P.C. with Migel Hatch for 2nd respondent-respondent (Bank)
Cur adv. vult.
September 21, 1989.
.KULATUNGA, J.
This is an appeal by the 1st respondent-appellant (hereinafterreferred to as the appellant) from a judgment of the Court of Appealdated 31.01.86 by which that Court quashed a determination dated
made by the 2nd respondent-respondent (The People’sBank) for the acquisition of certain premises owned by thepetitioner-respondent in terms of Section 71(1) of the Finance ActNo.11 of 1963 as amended by Law No. 16 of 1973. The Court ofAppeal held that the petitioner-respondent was entitled to a writ ofcertiorari quashing the said determination on the ground that it hadbfeen made without giving a fair hearing to the petitioner-respondent,in violation of the principles of natural justice.
the premises sought to be acquired by virtue of the impugneddetermination consist of a land called Paragahawatte aliasKosgahawatte (2 Acres. OR. 36P.) which was originally owned by oneCornells de Silva Karunaratne, the husband of the appellant who by
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deed No. 21446 of 05.02.64 sold it to Daniel Fernando subject to thecondition that if the vendor repaid the vendee the sum of Rs. 1250/-with interest thereon at the rate of 16% per annum within a period of3 years from 05.02.64, the vendee would reconvey the premises tothe vendor. The vendor Karunaratne died on 26.04.65 withoutobtaining the reconveyance. Daniel Fernando transferred the saidland to the petitioner-respondent, a sister of the said Karunaratne bydeed No. 423 dated 17.06.65.
Dr. H.W. Jayewardene, QC, learned Counsel for the peti-tioner-respondent submitted that by this Deed No. 423, thepetitioner-respondent redeemed the premises from Daniel Fernandoand became the absolute owner thereof. He argued that theobligation on the heirs of the original owner Karunaratne is joint andseveral and hence it was competent for the petitioner-respondent toredeem the entirety of the premises.
Mr. Daluwatte, PC, learned Counsel for the appellant contendedthat the obligation on the heirs of Karunaratne is joint and hence thedischarge of the obligation and the Deed had to be joint. He citedWeeramantry Vol. I parts III & IV (1967) Sections 543 and 559 andthe decision in Perera v. Perera (1) in support.
These submissions are relevant to the question as to the extent ofthe said premises which the appellant was entitled to redeem throughthe People's Bank by an acquisition under the Finance Act No. 11 df1963 as amended by Law No. 16 of 1973 and the jurisdiction of thePeople's Bank in that regard, an issue which thepetitioner-respondent raised both before the said Bank and in herapplication to the Court of Appeal but in respect of which we do nothave a finding either by the Bank or- by the Court of Appeal.
I am of the view that in the absence of a finding by the Court belowor by the People’s Bank it would not be appropriate for this Court todetemine the aforesaid issue for the first time. However, as I shalldiscuss later in this judgment, the submissions of Counsel on thisissue are of relevance in considering whether the Court of Appealwas right in its opinion that the impugned determination for theacquisition of the property was made without giving a fair hearing tothe petitioner-respondent, in violation of the principles of naturaljustice.
According to the amended answer filed by the appellant in DCNegombo 1208/L (exhibit ‘B’) and th« decision in Maggie Silva v. Sai
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Nona (2) the transfer of the said premises by Daniel Fernando to thepetitioner-respondent on deed No. 423 was subject to the conditioncontained in deed No. 21446 whereby the original owner Karunaratnereserved for himself, his heirs, executors, administrators'and assignsthe right to obtain a reconveyance of the same before 05.02.67.
According to the pleadings before the Court of Appeal, the saidKarunaratne died issueless and without leaving a last will and leavingas his heirs the appellant (his wife) who would be entitled to 1/2 ofhis estate and other heirs including the petitioner-respondent (hissister) who would be entitled to the balance 1/2.
None of the heirs including the appellant on whom the right toobtain a reconveyance of the said premises had devolved upon thedemise of the said Karunaratne applied for any reconveyance fromthe petitioner-respondent within the stipulated period ending on05.02.67. Consequently, the petitioner-respondent became theabsolute owner of the said premises. As the appellant continued'topossess the premises even after 05.02.67 the petitioner-respondentsued her for a declaration of title, ejectment and damages in DCNegombo 1208/L and succeeded in appeal to the Supreme Court.Maggie Silva v. Sai Nona (Supra).
Pursuant to the order of the Supreme Court, the appellant wasejected from the said premises and possession thereof was given tothe petitioner-respondent. Thereafter, the appellant made anapplication dated 02.09.76 to the People’s Bank for the redemption ofthe premises by acquisition in terms of the provisions of the FinanceAct No. 11 of 1963 as amended.
The People’s Bank inquired into the appellant’s application and on
made its determination under Section 71(3) of the Act forthe acquisition of the premises under reference (exhibit 'K1'). This wascommunicated to the petitioner-respondent on 19.01.79 (exhibit ‘K’).The petitioner-respondent challenged the said determination in theCourt below on two grounds namely want or excess of jurisdictionand violation of the principles of natural justice.
Briefly, the position taken by the petitioner-respondent in the Courtbelow was that after the Supreme Court declared her rights to thepremises under reference as the absolute owner the provisions of theFinance Act had no application and the appellant had no rightswhatsoever against her; that in any event in view of the fact that the
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appellant's entitlement as an heir being only to 1/2 of the estate ofKarunaratne, the original owner of the premises, she could not claimany rights to the entirety of the said premises. Thepetitioner-respondent also urged that the Bank had denied her a fairhearing before making the impugned determination in that whilst itwas her expectation, induced by the conduct of the Bank, that aformal inquiry in the presence of both parties would be held beforemaking the final decision, the Bank failed to make such inquiry.
A determination under Section 71(3) of the Act is reviewable forwant of or excess of jurisdiction either if the bank is not authorised bySection 71(1) to acquire the same or if Section 71(2) restricts theright of the Bank to acquire the same. The finality clause contained inSection 71(3) immunes a termination which conforms to the said.provisions – Perera v. People's Bank (3), Emaliyana Perera vs.People’s Bank (4). However the judgment of the Court of Appealshows that Counsel for the People’s Bank had contended that in viewof the finality clauses and the provisions of Section 22 of theInterpretation Ordinance as amended by Act No. 18 of 1972, thedetermination of the Bank can be challenged only on the ground thatit is'contrary to the rules of natural justice. Counsel for the appellanthad made some submissions relevant to the issue of want of orexcess of jurisdiction but the Counsel for the petitioner-respondentappears to have been content to present his case only on the groundthat the impugned decision is not in accordance with the principles ofnatural justice; and the Court decided the case only on-that ground.
I shall now proceed to consider the facts relevant to the impugnedinquiry.
In her written objections to the proposed acquisition forwarded tothe Bank, the petitioner-respondent set .out the background factsending with the consolidation of her title to the premises in dispute interms of the Supreme Court judgment in 78 NLR 313 and contendedthat the provisions of Section 71 of the Finance Act have noapplication and that in any event in view of the devolution of rights ofthe original owner on his heirs, the applicant may claim interests onlyin respect of a half share of the premises; and as such theappellant’s application (for an acquisition of the entire property) is nottenable (exhibit ’E’).
Thereafter, the parties were summoned for an inquiry on 15.11.77.They were also informed that in default of appearance, a decision willbe taken on the available material (exhibit H ). On 15.11.77, the
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petitioner-respondent was present with messrs J.L. Fernandopillaiand E.B.K. de Zoysa, Attorneys-at-law. The appellant was alsopresent and applied for a date as her lawyer was not free on thatday. This was refused. The inquiring officer also made an order thatin the event of the appellant’s lawyer filing any submissions it shouldbe copied to both Counsel representing the petitioner-respondent.Thereafter, submissions against the acquisition were recorded in thepresence of the parties including the junior Counsel for the appellantwho had arrived by this time.
/
The record of the proceedings had on 1'5.11.77 (exhibit ‘X’) showsthat on that day, Counsel for the petitioner-respondent had confinedhis submissions to an outline of the background facts of the case atthe end of which he urged that the petitioner-respondent be permittedto retain the property sought to be acquired and strongly objected tothe proposed acquisition. The appellant was not ready to makesubmissions and applied for a date for her Senior Counsel to appearand to make his statement; this was fixed for 14.12.77 at 2.00 p.m..
On 28.11.77, Mr. Nagahawatte, Attorney-at-Law submitted writtencounter objections on behalf of the appellant (exhibit ‘Y’) and by acovering letter which is in the Bank file of papers applied for a dateto support the same. The Bank’s file which had been submitted onthe directions of the Court of Appeal shows that on 08.12.77 the, Bank had written to Mr. Nagahawatte fixing 19.12.77 to support thecounter objections on which Mr. Nagahawatte failed to appear. Thisis also admitted in the affidavits filed on behalf of the Bank in theCourt of Appeal.
There is no evidence to establish that the counter objections filedby Mr. Nagahawatte had been copied to the petitioner-respondent’slawyers as ordered by the inquiring officer on 15.11.77. The saidobjections allege that Daniel Fernando was not competent .to transferthe property until after 05.02.67 and as such the transfer to thepetitioner-respondent on deed No.473 dated 17.06.6^ is invalid. Thesaid objections do not answer the challange to the proposedacquisition based on the ground of the devolution of interests of theoriginal owner Karunaratne on his heirs and assume that theappellant is competent to redeem the entirety of the premises throughthe Bank.
It is significant that despite the lapse of Mr. Nagahawatte to copythe appellant’s counter objections to the lawyers for the
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petitioner-respondent in terms of the inquiring officer's order on
the Bank failed to cause the same to be served on them oron the petitioner-respondent or to summon the petitioner-respondentor her representative to appear on 19.12.77 for which date Mr.Nagahawatte had been specially noticed.
In the meantime there is no record in the Bank file of theproceedings had on 14.12.77 to which date the inquiry had beenpostponed on 15.11.77.. However, according to a letter dated15.12.77 addressed to the Bank by Mr. E.B.K. de ZoysaAttorney-at-Law for the petitioner-respondent (exhibit T) Mr. M.K.D.S.Gunatilake had appeared for the petitioner-respondent on 14.12.77for the inquiry but the appellant was absent. In the said letter Mr. deZoysa states that on 15.11.77, Counsel had made submissionsagainst the appellant's application and prays for a dismissal of theapplication on the ground of the failure of the appellant to appear on
14.12.77,
According to the Bank file, on 14.12.77 the Bank had written to thepetitioner-respondent to come for a discussion and Mr. Nagahawatteto call over to make his submissions, before 25.02.77. The affidavitsfiled by the Bank in the Court of Appeal state that Mr. Nagahawattefailed to call over as requested. On 02.03.78, thepetitioner-respondent sent a letter to the Bank through Mr. M.K.D.S.Gunatilake in reply to the Bank's letter of 14.12.77 authorising him to.hold discussions and reminding the Bank that her Counsel had madesubmissions on her behalf on 15.11.77. She also renewed herrequest for a dismissal of the appellant's application for default ofappearance on 14.12.77 (exhibit ‘J’).
Official minutes on folio 51 of the Bank file indicate that on
the inquiring officer acting on the instructions of theManager, Land Redemption Branch had endeavoured to persuadethe representative of the petitioner-respondent to amicably settle thedispute but that the representative was not agreeable to enter into asettlement. Thereafter, on 09.03.77, Mr. M.K.D.S. Gunatilake wrote tothe Bank applying for a copy of the written statement which had beensubmitted with reference to the proposed acquisition by the appellantor by her lawyer on payment of the usual charges. This shows thathe had now become aware of the existence of the counter objectionswhich had been made in support of the acquisition. However, there isno evidence in the Bank file that a copy of the counter objections hadbeen issued as requested.
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On the other hand, according to an undated letter written by thebank to Mr. Nagahawatte, Attorney-at-Law enclosing a copy of theobjections made by the petitioner-respondent (folio 61 of the Bankfile) the Bank had called for counter submissions more particularlyregarding Clause 13 i.e. on the legal issue.s arising from thedevolution of title consequent to the death of the original owner of theland. Mr. Nagahawatte’s undated counter submissions had beenreceived and filed at folio 63 of the Bank file. These facts are alsoadmitted in the affidavits filed on behalf of the Bank in the Court ofAppeal.
On 13.10.78, the Manager Land Redemption Branch made his finalreport on the proposed acquisition wherein he states inter alia, “theobjection based on the interests of heirs cannot be maintained underthe provisions of the Finance Act as Law No. 16 of 1973 considersthe wife stepping into the shoes of the husband to redeem a land loston a conditional transfer and therefore matters of testamentarydispositions are not taken into consideration”. He thereforerecommends that, a determination be made to acquire the property(folio 66 of the Bank file). On 08.12.78,.the Board of Directors of theBank, acting on the said report, decided to acquire the property: '
During the argument, the learned Queen’s Counsel objected to theCounsel for the appellant reading from the Bank file any documents •other than those which have been formally produced. I haveexamined the entire Bank file as this Court is not affected by the saidobjection in that firstly, the material I have discovered merelyconfirms or clarifies the case for the parties to this appeal; secondly,it is within the power of a Court exercising review jurisdiction to callfor and examine the record, in the interests of justice and for theeffectual exercise of such jurisdiction; thirdly, I also venture toadvance the criticism that with all respect to the Court of Appeal, weare hampered by the fact that the judgment in appeal has failed toexamine the issues in some depth but for which, failure this appealmay not have presented so much difficulty as appeared to exist atthe hearing; fourthly, it would be impossible to properly apply therelevant legal principles to the case without a thorough ascertainmentof the facts.
Mr. Daluwatte, PC in support of the appeal submitted that theCourt of Appeal was in error in quashing the impugned determinationon the ground that it had been made in violation of the rules of
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natural justice; that in deciding the question, each case must beconsidered on its own facts and circumstances; that no rigid rule canbe laid down; that the view taken by the Court of Appeal is technical;and the conclusion that the bank failed to hold a fair inquiry wasreached without a proper application of the relevant legal principles tothe facts of this case.
The learned President’s Counsel contended that thepetitioner-respondent was given an adequate opportunity ofpresenting her case; that no hindrance or impediment was placed bythe Bank in that regard; that consequently she submitted her writtenobjection to the acquisition (exhibit ‘E’); that on 15.11.77 her Counselmade oral submissions (exhibit ‘X’); that her submission based onintestate succession has no relevance; that in any event the saidsubmission in respect of which the Bank obtained the submissions ofthe appellant’s Counsel is a matter of law and such consultation didnot prejudice the petitioner-respondent; that the failure to issue acopy of the appellant’s counter submissions (exhibit Y’) caused noprejudice to the petitioner-respondent; that no legal bar to theacquisition has been shown to exist; that the grounds urged againstthe acquisition only go to the discretion of the Bank which cannot bequestioned by certiorari; that the only ground adduced in the Court ofAppeal was the alleged denial of natural justice; that a fair hearingwas given at the inquiry on 15.11.77; and that the admissions in theexhibits 'X' and 'J' rebut the complaint as to the lack of a sufficient*inquiry.
Mr. Daluwatte, PC complained that the finding of the Court ofAppeal was due to the erroneous opinion it entertained namely thatthe bank was obliged to continue the oral hearing after 15.11.77 andto dismiss the application for default of appearance on the part of theappellant on 14.12.77 whereas the law does not require suchhearings. He submitted that the Court of Appeal thought in terms ofan inquiry in that sense and not an adequate opportunity to be heard,which is all that the law requires. He urged that the procedureadopted by the Bank was neither unreasonable nor unfair.
Dr. H.W. Jayewardene, QC opposing the appeal contended thatthe Court of Appeal reached the correct conclusion on a review of therelevant facts and its judgment is fully justified in the light of theapplicable law. He submitted that the scope of the audi alterampartem rule is now wider and means the right to a fair hearing anddetermination of the broadest amplitude; that it is a principle of justice
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rooted in the Common Law in England and embedded in the dueprocess clause (14th Amendment) in the American Constitution; andaccordingly the State shall not deprive any person of life, liberty orproperty, without an opportunity to be heard in defence of his rights.He drew our attention to Section 22 of the . Interpretation Ordinance(Cap.2) as amended by Act No. 18 of 1972 which, has codified theprinciple relating to natural justice.
The learned Queen’s Counsel argued that under Section 71(1) ofthe Finance Act No. 11 of 1963 as amended by Law No. 16 of 1973the People’s Bank has to be satisfied of the case for acquisition aftergiving a fair opportunity to the party affected to be heard which is afundamental requirement of the common law in such cases. Hecontended that the Bank had failed to give a fair' hearing to thepetitioner-respondent before making its decision in that-
it failed to provide the petitioner-respondent with a copy ofthe application for acquisition;
it misled the petitioner-respondent to the belief that theformal inquiry which commenced on 15.11.77 would becontinued when it was postponed for 14.12.77 but failed tocontinue the inquiry or to dismiss the application for.acquisition for default of appearance by the appellant or tomake a decision on the available material as stated in thenotices of inquiry (exhibits ’P’ and ‘H’);
it failed to provide the petitioner-respondent with a copy ofthe appellant’s counter objections (exhibit ‘Y’j;
it heard the Attorney-at-Law for the appellant behind the backof the petitioner-respondent on the very issue raised by thelatter, namely, the legal issue arising from the devolution oftitle consequent to the death of the original owner of theland. Neither the petitioner-respondent nor her lawyer wasinformed of such further inquiry.
It was also submitted that the statements of thepetitioner-respondent in exhibits T and ‘J’ that her lawyers had madesubmissions on all the matters should be considered in the contexti.e. those statements were made when she was unaware of thehearing which the Bank was giving to the appellant and that in anyevent even if her lawyers had been remiss in stating her case or inpursuing steps she was entitled to a fair hearing at the hands of the
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Bank having regard to the consequences ot a decision to acquire herland. Our attention was also drawn to the fact that the bank has notappealed against the judgment of the Court below. This, it wassubmitted, is another ground against interfering with that judgment.
Learned Counsel cited a large number of authorities all of whichare no doubt very helpful for a full appreciation of the legal principlesinvolved in this sphere. However, I shall refer only to those authoritieswhich are immediately relevant to the issues before us.
Both in Britain and America, the right to a hearing connotes muchthe same opportunities and formalities such as the right to an oralhearing; to be apprised of the case on the other side; to presentevidence and argument; to rebut adverse evidence by, cross-examination and other appropriate means; to have a reasoneddecision; to have a transcribed record of the hearing; and to appearwith Counsel. Legal Control of Government (Administrative Law inBritain and the United States): Schwartz and Wade (1972) 249.
However, in both systems there are no rigid rules as to which ofthose opportunities and formalities should be conformed to ensure afair hearing except that in the United States, in view of the fact thatthis right is rooted in the Constitution. Courts tend to narrow down thedistinction between the procedure in Courts and before administrativetribunals which distinction is evident in Britian, e.g. as regards theneed for personal hearings by the decision making authority -Morgan .v. United States (5). The opportunity to be heard must betailored to the capacities and circumstances of those who are to beheard – Goldberg v. Kelly (6).
The Courts in Sri lanka have invariably resorted to Englishdecisions for elucidation. The following dicta of the Lord Chancellor inBoard of Education v. Rice (7) are in point.
“In such cases the Board of Education will have to ascertain thelaw and ascertain the facts. I need not add that in doing eitherthey must act in good faith and fairly listen to both sides, for thatis the duty lying upon anyone who decides anything. But I donot think they are bound to treat such a question as though itwere a trial. They have no power to administer an oath andneed not examine witnesses. They can obtain information in anyway they think best, always giving a (air opportunity to thosewho are parties in the controversy for correcting or contradictingany relevant statement prejudicial to their view’’.
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In the case of Local Government Board v. Arlidge (8), Lord Parmooradded the following refinement as a guide to the application of theprinciple of natural justice:
“Where, however, the question of propriety of procedure israised in a hearing before some tribunal other than a Court of.Law there is no obligation to adopt the regular forms of legalprocedure. It is sufficient if the case has been heard in a judicialspirit and in accordance with the principles of substantial justice.
In determining whether the principles of substantial justicehave been complied with in matters of procedure, regard mustbe had necessarily to the nature of the.issue to be determinedand the constitution of the tribunal’’.
Lord Morris in Wiseman v: Borneman (9) stated –
“We often speak of the rules of natural justice. But there 'isnothing rigid or mechanical about them. What they comprehendhas been analysed and described in many authorities. But’ thisanalysis must bring into relief rather their spirit and theirinspiration than any precision of definition or precision as toapplication. We do not search for prescriptions which will laydown exactly what must, in various divergent situations be done.The principles and procedures are to be applied which, in anyparticular situation or set of circumstances, are right and justand fair. Natural justice, it has been said, is only “fair'play inaction".
These decisions lay down the principle that a tribunal acting in aquasi judicial capacity must ascertain the iaw and the facts hearing thecase in a judicial spirit. In the absence of specific provision, it mayadopt its own procedure provided that such procedure is substantiallyfair by the parties to the controversy having regard .to the nature ofthe issues involved, and the constitution of the tribunal. Theprocedure to be applied would depend on the circumstances of eachcase. It is apparent that the flexibility of procedure is permitted not forthe convenience of the tribunal but in the interest of efficiency andjustice to the affected parties.
It follows that apart from reiterating the general principles anddeciding the case before us in conformity with such principles, itwould not be advisable to lay down any rigid procedure which maybe followed by the People's Bank in making a determination under
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Section 71 of the Finance Act No. 11 of 1963 as amended. Thus, ina particular case, the issues may be limited to the ascertainment ofthe existence of the requisite preconditions under section 71 of theAct in which event each party would be aware of the case for theother side without the necessity for deep research or acute legalcontroversy; and the procedure appropriate to such a case may bedetermined accordingly. The instant case is different in that it involvesa complicated question of law consequent upon the devolution ofinterests on the heirs of the original owner of the premises sought tobe acquired. Whether the procedure adopted by the bank has beenfair has to be decided in that context and in the light of the conductof the bank which came in for considerable criticism by the learnedCounsel for the petitioner-respondent.
I now proceed to examine the submissions of learned Counsel. Ido not agree that the failure to issue a copy of the application foracquisition to the petitioner-respondent can be subject to seriouscriticism even though it might have been helpful if the same weremade available. As required by Section 71(2A)(a) of the Act, theBank has notified her of the fact of such application (exhibit C’).There is no legal requirement as to the form in which an applicationmay be made; nor is there any provision which enjoins the bank tofurnish a copy of the application to the owner of the premises. In itsnotice under Section 71 (2A) the bank has referred to the relevantprovisions of the law under which the applicant's application was •being entertained which in my view is sufficient compliance with thelaw. The said’ notice was followed up by a request to thepetitioner-respondent to forward her objections if any to the proposedacquisition (exhibit ‘D’) which she did by exhibit E
I do not agree with the submission that the objections of the ownerPnly go to the discretion of the bank and that the issue based onintestate succession to the original owner of the premises isirrelevant. The decision of the Supreme Court in 78 NLR 313declaring the petitioner-respondent to be the owner of the premisesunder deed no.473 is not open to challenge. However, that decisionmay not be an absolute bar to an application for acquisition of suchpremises. In the context, the intestate succession to the originalowner is relevant in that it raises the issue as to whether theappellant is entitled to seek to redeem the entirety of such premiseswhich issue was raised in the objections of the petitioner-respondent.
The complaint that the bank has failed to continue the formal
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inquiry which was commenced on 15.11.77 ancf thereafter entertainedsubmissions for the appellant behind the back of thepetitioner-respondent is worthy of examination. No doubt the bank isnot compelled to adopt a particular procedure but what procedure itadopts should be made known to the parties. If any party isprejudiced for want of such knowledge, it may result in a denial ofnatural justice depending on the extent of the prejudice caused.
The notices of inquiry (exhibit ‘P’ and ‘H’) give the impression thatthe scheduled inquiry is a formal inquiry. The notices require theparties to attend, and inform that in default a decision would be madeon the available material. I therefore agree that when on 15.11:77 theinquiry was postponed to 14.12.77, the petitioner-respondent wasentitled to expect the formal inquiry to continue. In the absence ofinformation to her of any change of the procedure and notice of thecounter objections (exhibit ‘Y’) filed on behalf of the appellant, thepetitioner-respondent had reason to apply for dismissal of theapplication for default of the appellant’s appearance on 1.4.12.77 onthe assumption that her objections to the proposed acquisition hadnot been answered.
The inquiring officer himself was aware of the need to hold a fairinquiry. This is borne out by the fact that he directed that anysubmissions which may be made by the appellant’s lawyer should be• copied to the petitioner-respondent’s lawyers. Written counterobjections (exhibit 'Y') were made but not copieckas directed: nor didthe Bank issue a copy thereof to the petitioner-respondent or herlawyers. It does not appear to have been done even after herrepresentative M.K.D.S. Gunatilake made a written request for it on09.03.78.-
In the meantime, on 08.12.77, the Bank fixed 19.12.77 for theappellant’s lawyer to support the counter objections when he couldhave been heard in the presence of the petitioner-respondent on14.12.77 to which date the inquiry had been postponed on 15.11.77.Even thereafter the inquiring officer was well aware of the need tohold a fair inquiry. This is borne out by the fact that he called uponboth parties to call over on 25.02.78. Mr. Nagahawatte failed to turnup whilst the petitioner-respondent’s representative met the inquiringofficer on 02.03.78 and confirmed the opposition to the proposedacquisition.
By letters T and ‘J’, the petitioner had clearly requested the bank
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to reject the appellant’s application on the ground of the latter'sdefault of appearance on 14.12.77. If the Bank wished to entertainwritten submissions the Bank should have informed thepetitioner-respondent of the fact that the inquiry was not completeand given her the opportunity of countering any further submissionsin favour of the acquisition. However, the Bank kept her in the dark.On the other hand, Mr. Nagahawatte was supplied with a copy of thepetitioner-respondent’s objections and was requested to make hissubmissions particularly on the legal issue consequent upon thedevolution of title on the death of the original owner. It was thereforenatural that the petitioner-respondent was completely taken bysurprise when she received the impugned determination (exhibit ‘K1’)on 19.01.79.
Mr. Daluwatte, PC argued that the failure to give a copy of thecounter objections of the appellant to the petitioner-respondent didnot prejudice the latter as these objections did not add to the relevantmaterial known to both parties and that any additions only comprisedmere legal submissions. Considered in isolation this may be correct.Even on the law, I find that these counter objections do not touch thevital issue of law which the petitioner-respondent raised. Yet it is notpossible to exonerate the Bank on this lapse. Firstly, the failure toissue a copy of the objections which the inquiring officer himself hadordered to be copied to the lawyers of the other party discloses alack of the judicial spirit required of an inquirer. Secondly, the Bankdid not stop with this lapse but continued to seek the submissions ofthe appellant’s lawyer in favour of the acquisition whilst the onlycontact with the petitioner-respondent on 02.03.78 was for thepurpose of persuading her to amicably settle the dispute.
It is true that the non-disclosure of a report or a legal opinion maynot prejudice a party in a particular case. Thus in Local GovernmentBoard v. Arlidge (Supra) it was held that the non-disclosure of thereport of the inquiring inspector to the Board which made theimpugned order was not material. Lord Parmoor was of the opinionthat the view of the inspector on a matter of law would not bematerial and proceeded to illustrate it thus at page 148:
“If the respondent was desirous of raising, as a matter of law,any question as to the constitution of the tribunal, thenon-disclosure of the report, or the right to give oral testimony,all the material to raise any of these questions was open to himquite apart from any information to be obtained from an
sc
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inspection of the inspector’s report. Any opinion expressed bythe inspector on such matters could in no way have altered thelegal obligation”.
' The said report was made after a public inquiry into the appeal ofArlidge against a closing order attended by Arlidge and his solicitorwho led evidence on behalf of Arlidge and after an inspection of thehouse affected by the order.
In Shariff v. Commissioner for Registration of Indian and PakistaniResidents (10) in which the Privy Council directed the quashing of arefusal to register the appellant as a citizen of Ceylon, the facts andfindings were as follows: The appellant’s application was investigatedby the Deputy Commissioner. An inquiry, was held with theattendance of the appellant and his Counsel. At various stages Of theinquiry, the Deputy Commissioner obtained reports on the issue ofthe genuineness of an education certificate produced by the appellantbut without a full disclosure of such reports to the appellant., Onesuch report was favourable to the appellant. This he eventuallyrejected and held the education certificate to be a fabrication withoutadequate inquiry and in circumstances in which, appellant’s Counselmight have been made to believe that his submission in favour of theacceptance of the certificate as genuine would be upheld. TheDeputy Commissioner also failed to give adequate notice to theappellant or his Counsel as to the case against the appellant. It washeld that the principles of natural justice were not complied with by
the Deputy Commissioner.
'
In the instant case, the inquiring officer engaged in obtaining
submissions and clarifications from the appellant’s lawybr whilst thepetitioner-respondent would have continued to rely on the case putforward by her, confidently hoping that the application for theacquisition of her property would be rejected, an attitude induced bythe fact that she was not informed of ,the case for the other side. Inthe end, the inquiring officer adopted the submissions of heropponent without any opportunity being given to her to comment orcorrect such submissions, on the most vital issue in the case,
Another unsatisfactory feature of this inquiry is that whilst theinquiring officer was throughout dealing with the appellant’s lawyer,he always communicated with the petitioner-respondent and'failed toseek the advice of her lawyer. The dutyt of making the correct
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decision is exclusively on the Bank and as such the contention thatthe burden was on the owner of the land to activate her lawyer is nottenable. Having regard to the complicated issues in the case, theinquiring officer, if he was keen to make a correct decision, ought tohave obtained further submissions from the petitioner-respondent'slawyer also. Alternatively, if she was informed about the consultationswhich were taking place it is probable that she too would havecontinued to engage the services of her lawyer.
I must not be understood to lay down that in every case of anacquisition the Bank is required to ensure that the issues are arguedby lawyers or that they must hold oral hearings. Section 41(2) of theJudicature Act No. 2 of 1978 gives the right of representation by anAttorney-at-Law in such cases. However, whether the failure to permitoral hearings would constitute a denial of natural justice will dependon the facts and circumstances and the issues in each case. TheBank may exercise its discretion as to the form of inquiry; whereappropriate they may send for the lawyer for one of the parties toobtain any clarification provided that the case for the other party isnot prejudiced and the parties are not kept in the dark as to thegeneral procedure adopted in the particular case. Subject to theseremarks, I quote the following observations of Lord Denning in thecase of Pett v. Greyhound Racing Association Ltd. (11) at 549.
“It is not every man who has the ability to defend himself on hisown. He cannot bring out the points in his own favour or theweakness in the other side.. He may be tongue-tied or nervous,
confused or wanting in intelligence If justice is to be done, he
ought to have someone to speak for him; and who better than alawyer who has been trained for the task?”
In the case of Board of Trustees of Maradana Mosque v. Ministerof Education (12) where an order under Section 11 of the AssistedSchools and Training Colleges (Special Provisions) Act No.5 of 1960placing Zahira College, an unaided school, under the management ofthe Director of Education on the ground of certain contraventions ofthe provisions Of the Act was challenged, the Privy Council held thatthe impugned order had been made without a fair hearing, inter alia,for the reason that the Director had failed to inform the Board ofTrustees of the observations on the point made by a group ofteachers in their letter to him.
In the case of Kanday. Government of the Federation of Malaya
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(13), Kanda, an Inspector of Police who had been dismissed,appealed to the Privy Council. One of his complaints was that theinquiring officer had been provided with the report of the Board ofInquiry which held the preliminary inquiry which contained statementshighly prejudicial to him which report was not available to him.Although the facts of this case have no similarity to the case beforeus, the following observations of Lord Denning in declaring thedismissal to be void for lack of opportunity to Kanda to correct andcontradict the report are appropriate for an application of the scope ofthe principle of fairness.
“If the right to be heard is to be a real right which is worthanything, it must carry with it the right in'the accused man toknow the case which is made against him. He must know whatevidence has been given and what statements have been madeagainst him; and then he must be given a fair opportunity, tocorrect or contradict them. This appears in all cases from thecelebrated judgment of Lord Loreburn, LC in Board of Educationv. Rice down to the decision of their Lordships in CeylonUniversity v. Fernando. It follows, of course, that the. Judge orwhoever has to adjudicate must not hear evidence pr receiverepresentations from one side behind the back of the other”.
The frontiers of the audi alteram partem rule are ever widening.Thus in R. v. Wareham Magistrate’s Court, ex parte Seldon (14)McCullough, J. said –
“Thus the question is not one- of the implication into theprovisions under consideration of a rigid requirement applicablein every case. It is one Of fairness. In some cases fairness willrequire steps to be taken which in other cases it will not
require”.
In the same case McCullough, J. proceeded to cite a passage fromClayton v. Chief Constable of Norfolk (15) in which Lord Roskillsaid –
“As Sachs J. said in R. v. Assim (1966) 2 AER at-,887-888 it isimpossible to lay down a general, rule applicable to every .casewhich may arise, but if justices ask themselves, before finallyruling, the single question, what is the fairest thing to do in allthe circumstances in the interest of every one concerned?, theyare unlikely to err in their conclusion, for the aim of judicialprocess is to secure a fair trial and rules of practice and
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procedure are designed to that end and not otherwise".
So if the inquiring officer of the People's Bank asked himself whatis the fairest thing to do in all the circumstances in the interest ofevery one concerned?,he might have given the peti-
tioner-respondent an opportunity of meeting Mr. Nagahawatte'sundated submissions which are in the Bank file and which werenever disclosed to the petitioner-respondent. In the light of his failureto do so and the other circumstances which I have assessed, I am ofthe opinion that the impugned determination is void as it has beenmade without giving a fair hearing to the petitioner-respondent.Accordingly, I affirm the judgement of the Court of Appeal anddismiss the appeal with costs payable by the appellant.
The People’s Bank did not appeal but was made the 2ndrespondent to this appeal by the appellant. Although the 2ndrespondent filed written submissions in support of the appeal, Mr.Faiz Musthapa, PC for the 2nd respondent very properly decided thatthe 2nd respondent will not participate in the hearing of the appeal.
H.A.G. DE SILVA, J., – I agree.
BANDARANAYAKE, J., – I agree.
Appeal dismissed.