SANGADASA SILVA v. ANURUDDHA RATWATTE AND OTHERS

040-SLLR-SLLR-1998-1-SANGADASA-SILVA-v.-ANURUDDHA-RATWATTE-AND-OTHERS.pdf


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SANGADASA SILVA
v.ANURUDDHA RATWATTE AND OTHERS
SUPREME COURTDHEERARATNE, J„
WADUGODAPITIYA. J. ANDGUNAWARDANE, J.
S.C. APPLICATION NO. 251/95 (F.R.)
JANUARY 22ND AND FEBRUARY 11TH, 1998.
Fundamental Rights – Termination of agreement for dealership in petroleumproducts – Unjust or Arbitrary termination – Political motive – Articles 12 (1) and12 (2) of the Constitution.
The petitioner was a dealer in petroleum products for many years on the basisof an agreement with the Ceylon Petroleum Corporation, the second respondent.On 26.6.95 persons claiming to be from the Corporation visited the petrol stationwith a letter and asked the petitioner's son who was the manager to vacate thepremises and hand it over to them. The petitioner's son declined to do so in
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the absence of the petitioner and temporarily closed the petrol station. The sameevening, according to the petitioner, a group of thugs arrived and took over thepetrol station forcibly. According to the Area Manager of the Corporation, he tookover the premises with the assistance of the Police. Thereafter, the businesswas handed over to the 3rd respondent Company which had been incorporatedonly on 09.06.95 and whose Directors were all government supporters. Thepetitioner had been a close friend of late R. Premadasa, the former Presidentand a strong supporter of the United National Party. The Marketing Managerof the Corporation, who was not a member of the Board of Directors of theCorporation, averred that the petitioner's dealership was cancelled by a letter dated26.6.95 (2R9) issued by him pursuant to a special resolution of the Board ofDirectors of the corporation for alleged violations of the dealership agreement.But the relevant Board paper and the decision of the Board were not producedto Court; nor did the Chairman or any of the Directors file an affidavit explainingthe reasons for the termination of the petitioner's dealership. Besides 2R9 wasnever served on the petitioner, nor was any evidence of a decision to award thedealership of the petrol station to the 3rd respondent company produced to Court.
Held:
The action taken by the respondent Corporation to terminate the petitioner'sdealership amounted "executive or administrative action" within the meaningof Article 126 of the Constitution.
The action of the 2nd respondent Corporation to terminate the petitioner'sagreement and to appoint the 3rd respondent in his place were arbitrary,capricious and discriminatroy; it was also politically motivated and violativeof the petitioner's rights guaranteed by Articles 12 (1) and 12 (2) of theConstitution.
Cases referred to:
Dahanayake v. de Silva (1978 – 79 – 80) 1 Sri LR 47.
Kuruppuge Don Somapala Gunaratne et al v. Ceylon Petroleum Corporationet al SC Application 99/96 SC Minutes 31 July, 1996.
Wickrematunge v. Ceylon Petroleum Corporation et al 1998 1 Sri LR201.
APPLICATION for relief for infringement of fundamental rights.
Romesh de Silva P.C with Geethaka Gunawardane for petitioner.
K. Sripavan D.S.G for 1st and 4th respondents.
P. A. D. Samarasekera, P.C with Keerthi Sri Gunawardana, Sanjeewa Jayawardenaand Palitha Silva for 2nd respondent.
Percy Wickramasekera, with Henry Seneviratne and Mrs. Shanthi Silva for 3rdrespondent
Cur. adv. vult.
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April 3, 1998.
WADUGODAPITIYA, J.
In 1952, the Shell Company of Ceylon Ltd. appointed the petitioneras a dealer in petrol, diesel and other petroleum products at premisesNo. 291, Dr. Dannister de Silva Mawatha, Colombo 9. Although afternationalisation, he continued the said business under the CeylonPetroleum Corporation, the petitioner states that in 1973, the abovepremises was taken over, allegedly due to political reasons, buthanded back to him in late 1977. He thereafter continued to operatethe petrol station at the above premises till 26.6.95, on which dayit was taken over by the 2nd respondent.
The petitioner states that on 31.5.95 the 2nd respondent sent hima letter (marked "A") stopping his credit facility and asking him to makeall payments in cash. He complied, but adds that in the morningof 26.6.95, some unknown persons had come to the premises witha letter saying they were from the 2nd respondent Corporation andhad asked that the premises be vacated and handed over to them.The petitioner's son who was the Manager had said that as his father,the petitioner, had gone out of Colombo, he could not do so, andtemporarily closed the petrol station. He thereafter made a complaintto the Dematagoda Police (marked "C").
However, the petitioner complains that on the same afternoon atabout 3.00 O'clock, a group of thugs armed with crowbars arrivedand forcibly took possession of the premises. Since the DematagodaPolice refused to record his statement saying they had orders from"higher authorities", the petitioner went to the Borella Police stationwith the same result. The petitioner says that he then contacted somehigh Police official and it was only thereafter, that his son was ableto make a complaint (marked 'D') back at the Dematagoda Policestation, at about 7.30 p.m. on the same day.
This complaint sets out that a group of unknown persons hadarrived at the premises, broken open the padlocked office of the petrolstation and were now preventing him from entering it, saying that thepetrol station was taken over.
The petitioner states that he has been informed orally that the 2ndrespondent had on 26.6.95 decided to terminate his dealership and
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take possession of the premises. He adds that this decision has beenpolitically motivated, inasmuch as the Chairman and all the Directorsof the 2nd respondent Corporation are political appointees appointedby the 1 st respondent after the present Government came into power.He says that he is a strong supporter of the opposing United NationalParty (letters marked F1, F2, F3 and G), and a close friend of theformer President, the late R. Premadasa and his wife. He has filedseveral photographs (marked E1 to E4) showing his close associationwith them.
The petitioner further states that the 2nd respondent Corporationfound fault with him for violating the terms and conditions of hisagreement by issuing petrol in bulk contrary to regulations. Thepetitioner's reply is that he did this only in respect of the Departmentof the Government Printer, which Department required petrol in barrelsfor the use of its printing machinery and other equipment. He addsthat after the Government Printer himself made representations to the. 2nd respondent Corporation, the petitioner was given permission bythe 2nd respondent to issue petrol to the Government Printer in barrels.(Letters marked H1, H2 and H3).
The petitioner complains that having terminated his dealership, andhaving forcibly taken over the petrol station on 26.6.95, the 2ndrespondent handed it over on the same day, to the 3rd respondent,which he says is a Company which was incorporated only on 9.6.95solely for the purpose of obtaining his dealership. He says that alleight Directors of the 3rd respondent company are supporters of theGovernment and that one of them was even appointed by the presentGovernment as Chairman of the Gas Company on or about 1.10.94.
The petitioner also states that the 3rd respondent commencedoperations on 29.6.95 with an opening ceremony which was attendedby two Members of Parliament belonging to the People's Alliance.
The petitioner states that he has suffered the followingconsequential loss :
a stock of approximately 500 gallons of diesel; and
a stock of approximately 300 gallons of kerosene oil left in thetanks when the premises was taken over by the 2nd respondenton 26.6.95; and
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a sum of Rs. 259,978.53 which the petitioner had depositedwith the 2nd respondent Corporation on the morning of 26.6.95(the day of the take over), being payment for a consignmentof petrol which was to be delivered to the petitioner by the 2ndrespondent Corporation the same day. This consignment, wasof course, not delivered to the petitioner.
The petitioner's allegation is that the 1st respondent caused the2nd respondent Corporation to terminate his dealership and take overthe premises for political reasons.
Leave to proceed with this application was granted in respectof the alleged infringement of Articles 12 (1) and 12 (2) of theConstitution.
The 1st respondent replied to the petitioner by his affidavit, statingthat he was in no way involved in this matter and that he personallyknows nothing of the incident complained of. This position of the 1strespondent was not challenged or contested in any way by learnedpresident's counsel for the petitioner. In the circumstances, I have noreason to disbelieve the 1st respondent and I therefore accept whathe says. I therefore hold that the 1st respondent is not guilty of anyviolation of the petitioner's fundamental rights.
The 3rd respondent company made answer through its Chairmanand Managing Director, who filed his objections by way of an affidavit.He admits that he and some of the other Directors of the 3rdrespondent company are, in fact, supporters of the People's Alliance,but that they had done nothing whatsoever to oust the petitioner fromhis dealership of the petrol station in question. He adds that theRegional Manager of the 2nd respondent Corporation handed overthe petrol station to the 3rd respondent Company on 26.6.95 inresponse to an application made by it, not for the petitioner's petrolstation, but for a petrol station. He admits that the 3rd respondentcompany was incorporated in June, 1995, but denies that it wasincorporated only for the purpose of obtaining the petitioner'sdealership. Paragraph 2 of the written submissions, filed on behalfof the 3rd respondent Company, says that it is correct that the 3rdrespondent company has, amongst its primary objects, the distributionof fuel and lubricants, but adds that it is also a distributor of gas,and, in addition, has other lines of business. The Chairman of the
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3rd respondent Company has filed an inventory of stocks handed over
to him (marked 3R1) as follows :
2 Star petrol – 454 litres at Rs. 39.59Lanka kerosene – 908 litres at Rs. 9.28Lanka auto diesel – 4,781 litres at Rs. 12.20
Total
The answer on behalf of the 2nd respondent Corporation was madeby Saliya Unamboowe, Manager, Marketing. He says in his affidavitthat, he is "the Manager, Marketing, of the 2nd respondent Corporationon whose behalf I have been authorised to depose to in this affidavit".It should be noted that no affidavit has been filed either by theChairman or by any of the Directors of the 2nd respondent Corporation.These matters become relevant later.
Saliya Unamboowe states in his affidavit that the petitioner wasin fact appointed a dealer on 13.3.78 (letter of appointment marked2R1); that the 2nd respondent entered into a dealership agreementwith the petitioner dated 22.7.82 (2R2), and that on 14.9.82, thepetitioner was granted written authority to “sell, supply and distribute"petroleum products (2R3). Continuing, he states that he "issued aformal letter dated 26.6.95, cancelling the written authority grantedto the petitioner", (marked 2R9). This letter 2R9 stated that theBoard of Directors of the 2nd respondent Corporation had by aspecial resolution decided to terminate the petitioner's dealership withimmediate effect and directed the petitioner to hand over possessionof the petrol station to the bearer of the said letter; forthwith.
The first thing that strikes me, is that in his letter 2R9,Mr. Unamboowe gives no reasons whatsoever for the termination ofthe petitioner's dealership. It is noteworthy also, that the petitioner wasnot warned that his dealership was about to be terminated by the2nd respondent Corporation. The termination was to be with immediateeffect and no notice whatsoever was given to the petitioner to quitand deliver possession. I must also mention that this letter of ter-mination (2R9) was never served on the petitioner.
Most importantly, the letter 2R9 specifically mentions the factthat the Board of Directors of the 2nd respondent Corporation hadpassed a special resolution to terminate the petitioner's dealership.Mr. Unamboowe states in his affidavit that, a Board Paper was
Rs. 17,973.86Rs. 8,426.24Rs. 58.328.20Rs. 84.728.30
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submitted by him to the Board of Directors of the 2nd respondentrecommending the termination of the dealership agreement with thepetitioner. This Board Paper was not produced, and so, this court wasnot apprised of what the actual recommendation was and whatreasons Mr. Unamboowe gave for such recommendation. I shall referto this later. Mr. Unamboowe specifically states, in paragraph 17 ofhis affidavit that the Board of Directors took cognizance of therecommendation made by him and passed a resolution to terminatethe dealership of the petitioner. This resolution too was not produced.
The position then is that neither the Board Paper said to havebeen submitted by Mr. Unamboowe to the Board of Directors of the2nd respondent Corporation, and said to contain the recommendationof Mr. Unamboowe, nor the special resolution said to have beenpassed by the Board of Directors of the 2nd respondent Corporation,nor, at the lowest, any minute made by the Board of Directors inconnection with its decision to terminate the petitioner's dealership hasbeen produced before us. Nor has the Chairman or any of themembers of the Board of Directors filed an affidavit in this case settingout the reasons which moved the Board to terminate the petitioner'sdealership, and what the resolution, if any, was that they are saidto have passed. Mr. Unamboowe is not a member of the Board ofDirectors of the 2nd respondent Corporation and therefore cannot giveevidence as to why the Board in fact as it did. In the circumstances,this Court has been kept totally in the dark, and is therefore quiteunaware as to what material, if any, was placed before the Boardof Directors to enable it to arrive at a decision to terminate thepetitioner's dealership, and what reasons the Board in fact hadfor deciding that the petitioner's dealership should be terminated.Although this Court repeatedly drew attention to this serious short-coming, learned President's counsel for the 2nd respondent wasunable to furnish the requisite material to this Court. Thus, no oneknows why the 2nd respondent passed its special resolution or whatthe transgression was, that led to and resulted in the extreme penaltyof termination of the dealership of the petitioner. I
I must here make mention of the fact that both Mr. Unamboowe(in his affidavit), and learned President's counsel for the 2ndrespondent (in his submissions made before us), have referred toseveral transgressions alleged to have been committed by thepetitioner, since the commencement of his dealership on 13.3.78.
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Besides the fact that they have been explained and/or rectified and/or settled by negotiation, it does not appear that any of them actuallyoccasioned the ultimate penalty of termination, for, as I mentionedearlier, not a word is forthcoming from the Board of Directors of the2nd respondent Corporation, as to what material, if any, was placedbefore it for its consideration and what reason it had for terminatingthe dealership. One is therefore not able to ascertain whether anysingle one of the alleged transgressions was even brought to the noticeof the Board of Directors of the 2nd respondent Corporation. Mr.Unamboowe has very painstakingly listed in his affidavit, in great detail,a series of transgressions alleged to have been committed by thepetitioner over the years, but has significantly failed to produce theBoard Paper said to contain the recommendation he made to theBoard of Directors of the 2nd respondent Corporation or the reasonshe gave for making such recommendation. Nor has he mentioned,in his lengthy affidavit the material which he placed before the Boardor the material, if any, the Board had before it. The only conclusionpossible in the circumstances, is that the alleged transgressions ofthe petitioner enumerated by Mr. Unamboowe as being the reasonfor the termination of the petitioner's dealership, merely constitutematerial painstakingly collected and set out for the purpose of meetingthe averments of the petitioner and for the purpose of defending thisaction. It is not possible to conclude, in the absence of any materialto the contrary, that these alleged transgressions of the petitioner wereever brought to the notice of the Board of Directors of the 2ndrespondent Corporation when it passed its special resolution,Mr. Unamboowe says it passed, terminating the petitioner's dealer-ship. This material now presented before us cannot be said, on theevidence before us, to constitute the material which moved theBoard of the 2nd respondent to act as it did, and is therefore notrelevant. It is therefore not necessary for me to repeat here, the listof alleged transgressions said to have been committed by thepetitioner since the commencement of his dealership. WhatMr. Urtamboowe seems to be attempting to do by setting outthe series of alleged transgressions of the petitioner, is in fact toask this Court to consider and, assess them and arrive at a decisionas to whether the termination was justified or not. I do not think itis our function at all, to hold such an inquiry. What this Court wantedto know, and made repeated requests for, was the material upon whichthe Board acted when it passed its special resolution terminating thepetitioner's dealership. No answer was forthcoming and no materialat all was made available to this Court, and so, necessarily, the
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question as to why this Court has been deprived of such materiallooms large in our deliberations, for, is it not reasonable to supposethat the Board of Directors did act on material placed before it, andif such material is not forthcoming, is it not reasonable to concludethat the Board of Directors of the 2nd respondent Corporation arbitrarilycancelled the petitioner's dealership, thus violating the fundamentalrights?
In this connection, I must also reiterate that Mr. Unamboowe himself(despite filing a lengthy affidavit) has failed to produce the Board Paper.containing his recommendation which he says he submitted to theBoard. Nor has he given any explanation as to his inability to havedone so. To my mind it would have been the easiest thing for himto have produced a copy of his own Board Paper, which presumablywould have contained his recommendation and all the material insupport. His not doing so leads to serious doubts as to whether suchBoard Paper in fact exists.
The further questions that arise are, if such a Board Paper doesexist, was it in fact submitted to the Board of Directors byMr. Unamboowe? Did the Board in fact act on it, or is it possiblethat the Board may have acted on some other criteria or on no criteriaat all? It is quite clear that from the material available from theaffidavit of Mr. Unamboowe, that no presumption can be drawn thathe in fact submitted his Board Paper (mentioned therein) to the Boardof Directors; neither can any presumption be drawn that the Boardof Directors actually acted upon it, for as I just said before, the Boardcould have acted on some other criteria or on none at all.
Further, if the Board Paper mentioned in Mr. Unamboowe's affidavit,which must necessarily incorporate its supportive material, was in factsubmitted to the Board and was in its possession, the presumptionthat may be drawn in terms off illustration; to section 114 of theEvidence Ordinance (where material said to be in the possession ofthe Board is not produced by the Board) would, in the circumstancesof this case, be adverse to the 2nd respondent. Illustration (/) to section114 of the Evidence Ordinance states :
“The Court may presume that evidence which could be and isnot produced would if produced, be unfavourable to the personwho withholds it."
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Thus, it appears that if the Board did have in its possession anyBoard minutes, and/or the Board Paper, and/or the special resolutionof the Board relating to the termination of the petitioner’s dealershipand did not produce any of the said documents, it would be legitimateto draw the presumption that any such material, if produced, wouldbe unfavourable to the 2nd respondent Corporation.
On the other hand, if there is, in fact, no such material in thepossession of the Board, it would substantiate the position of thepetitioner, that the termination of his dealership was entirely arbitrary,and thus violative of the petitioner's fundamental rights.
At this point I must consider the other half of this incident, whichis the handing over of the petitioner’s dealership to the 3rd respondent,immediately upon the petrol station in question being taken over bythe 2nd respondent. Mr. Unamboowe has annexed to his affidavit,a copy of the report (marked 2R11) made by the Area Manager whowas sent to take over the petitioner's petrol station. In 2R11, the AreaManager says, inter alia, that he went to the premises with 3 otherofficers; that he "would like to stress the fact that we went unarmed,without carrying any implements such as crowbars, iron rods, etc.;that the dealer was not present, but four of his sons were; that thelatter were “very co-operative and cordial" but "refused to take overthe letter (of termination, 2R9) in the absence of the dealer"; that thesons locked up the buildings on the premises and left; that havingmade an entry at the Dematagoda Police Station, he returned to thepetitioner's petrol station with a posse' of policemen including a Sub-Inspector of Police who “supervised the opening of the sales room,compressor room and the other room by a locksmith“, and that, "thenthe outlet was handed over to 'Slipto Agencies (Pvt) Ltd." (i.e. the3rd respondent).
A preliminary matter which aroused my curiosity was, why the AreaManager should "stress in fact that we went unarmed without carryingany implements such as crowbars, iron rods, etc." I This apart, thefirst important matter to be noted is that the letter of termination (2R9)was never served on the petitioner who was in fact the dealer whosedealership was to be terminated. It seems quite natural that thedealer's sons refused to accept 2R9. It also does not appear thatthis letter of termination 2R9 was served on the petitioner evensubsequently. The petitioner himself states in paragraph 24 of his
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petition that he "has now been orally informed that the 2nd respond-ent had decided on or about 26th June, 1995, to terminate thepetitioner as a dealer and to take possession of the premises".Therefore the situation appears to be that the petitioner's dealershipwas terminated and his petrol station taken over by the officers ofthe 2nd respondent without his ever being served with any letter oftermination, and further, that having done so, the officers of the 2ndrespondent immediately handed over the petrol station to the 3rdrespondent.
The next question of no less importance is, on what authority wasthe petrol station handed over to the 3rd respondent? Mr. Unamboowemakes answer on behalf of the 2nd respondent and says that in ordernot to deprive the public of petrol and petroleum products, it wasimperative, upon termination of the petitioner's dealership, for the 2ndrespondent to resume operation of the petrol station; that the 3rdrespondent "had been desirous of obtaining a dealership, and hadsatisfied the 2nd respondent of its wherewithal and capacity to conductthe operation successfully," and that, "the awarding of the dealershipto the 3rd respondent was not motivated by political considerations".The important consideration here is that once again, this Court is facedwith the situation where the 2nd respondent has not produced anymaterial at all to substantiate or support its actions. The 2nd respond-ent has failed to produce any material showing how it satisfied itselfof the “wherewithal and capacity" of the 3rd respondent to run thepetrol station successfully. More importantly, the 2nd respondent hasfailed to produce the Board minutes and/or the Board Paper and/orthe resolution of the Board of Directors regarding its decision to awardthe dealership to the 3rd respondent. In this connection, it must notbe forgotten that the petitioner avers (and this is not denied byMr. Unamboowe) that the 3rd respondent was incorporated only on9.6.95 and the dealership was handed over to the 3rd respondenton 26.6.95. It is, in fact, not known how the 3rd respondentarrived on the scene. Neither learned President's Counsel for the 2ndrespondent nor learned Counsel for the 3rd respondent was able toassist Court on this matter with any substantial material.
The Chairman and Managing Director of the 3rd respondent companyhas filed an affidavit in which, inter alia, he says, that it is correctthat the 3rd respondent company was incorporated in June, 1995, butnot for the sole purpose of obtaining the dealership in question; thatthe dealership was handed over to the 3rd respondent on 26.6.95
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"in response to an application made by the company not for thisparticular petrol station, but for a petrol filling station; that he andsome of the other Directors of the 3rd respondent are, in fact,supporters of the People's Alliance, but that the 3rd respondent didnothing whatsoever to oust the petitioner from his dealership. He hasfiled (marked 3R1) a copy of an entry he made at the DematagodaPolice Station together with handwritten copies of the inventory ofgoods and products taken over by him, but significantly, has failedto file a copy of the application which he says he made to the 2ndrespondent for the grant of a dealership to him. This he could wellhave done at least to show his bona tides. Then again, he mighthave told this Court as to what documents he produced to show hisworth and whether he was even interviewed by the Board or anyoneon its behalf before he was found suitable.
Thus, where the 3rd respondent is concerned, this Court does nothave the benefit of either the application said to have been madeto the 2nd respondent by the 3rd respondent for a dealership, or anyminute or Board Paper or resolution of the Board of Directors of the2nd respondent containing or referring to any decision regarding thecapability and suitability of the 3rd respondent to handle a dealershipand containing any decision to award the dealership in question tothe 3rd respondent. The presumption to be drawn in termsof Illustration (/) to section 114 of the Evidence Ordinancemust necessarily be drawn in this instance too.
The basis of the relationship between the petitioner and the 2ndrespondent is the agreement (marked 2R2) entered into on 22.7.82.The relationship between them is thus contractual. Nevertheless, theaction taken by the Board of the 2nd respondent Corporation (toterminate the petitioner's dealership and to appoint the 3rd respondentin his place) constitutes "executive or administrative action" within themeaning of Article 126 of the Constitution, and is not contractual incharacter. This is now well settled – vide Dahanayake v. de Silvaf11per Samarakoon, C.J., where His Lordship said : “I hold that thetermination of the petitioner's dealership by the 2nd respondent was'executive or administration action' although it involved a contract, andwas in violation of Article 12 (1)." This was followed in KuruppugeDon Sompala Gunaratne et al v. Ceylon Petroleum Corporation eteP> and in Wickrematunga v. Ceylon Petroleum Corporation et aPKIn this connection we must not be unmindful of the fact that the 2ndrespondent Corporation enjoys the exclusive monopoly of carrying on
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the business, inter alia, of supplier and distributor of petrol, diesel andpetroleum products as agent of the State.
Clause 12B of the said agreement (2R2) enumerates three ways- in which a dealership can be terminated. The first is where the GeneralManager of the Corporation is of opinion that the petitioner hasdefaulted in the ways set down. The second is after giving threemonths' notice either way. The third method is the one adopted bythe 2nd respondent, and this method states that, "the Board ofDirectors may by a resolution passed at a meeting of the Board ofDirectors terminate the agreement without notice and withoutassigning any reason whatsoever".
Firstly, in terms of the agreement (2R2) it was the Board of Directorsthat was vested with the power to arrive at a decision to terminatethe agreement with the petitioner, and this was to be done by aresolution passed at a meeting of the Board of Directors. As set outearlier, no resolution by the Board was produced before us and so,it is not possible for this Court to speculate whether any resolutionwas ever passed by the Board in respect of this petitioner, or whether,if passed, the contents of such resolution would if produced, haveturned out to be unfavourable to the Board, if it is the former, thenthe 2nd respondent is in breach of clause 12B of the agreement andis guilty of a wholly arbitrary act. If the latter, then this Court isentitled to draw a presumption adverse to the 2nd respondent in termsof illustration (/) to section 114 of the Evidence Ordinance. Accordingto the affidavit of Mr. Unamboowe there was a resolution, which forsome undisclosed reason, we have not been shown. The questionthat arises is, why was this method of summary termination of thepetitioner's agreement resorted to in such haste? Did this amount tothe arbitrary use of a power vested in the State?
As Fernando. J, stated in Kuruppuge Gunaratne's case (supra),"it is now well settled that powers vested in the State, public officersand public authorities are not absolute or unfettered, but are held intrust for the public, to be used for the public benefit, and not forimproper purposes. Even assuming that the Board of the 1st respond-ent was not obliged initially to disclose the reasons for its decision,nevertheless when that decision is being reviewed in the exercise ofthe fundamental rights jurisdiction of this Court, the burden is on therespondents to establish sufficient cause to justify that decision, andthis Court can scrutinize the grounds for the decision."
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On a consideration of the entirety of the evidence placed beforeus, it is clear, as set out above, that there is no material whatsoeverto indicate why the Board had decided to terminate the petitioner'sagreement and appoint the 3rd respondent in his place. In thesecircumstances no conclusion is possible other than the action .of the Board of the 2nd respondent is violative of the petitioner'sfundamental rights under Article 12 (1) which prohibits arbitrary,capricious and/or discriminatory action.
The petitioner's complaint is that the sudden termination of hisdealership without warning or notice and without reasons being given,was on account of discrimination on the grounds of political opinion.Thus he alleges that he was treated the way he was, on accountof political opinion, because, firstly, the Chairman and all the Directorsof the 2nd respondent Corporation are appointed by the 1st respond-ent, the Minister of Irrigation, Power and Energy, (which fact only isadmitted by Mr. Unamboowe in his affidavit) and secondly, the Chairmanand all the Directors are all political appointees who are politicallyaligned to the present Government of the People's Alliance. Thepetitioner also alleges that the Chairman and some of the Directorsof the 3rd respondent company to whom the petitioner's petrol stationwas handed over are themselves supporters of the People's Alliance.
This is in fact admitted by the Chairman of the 3rd respondentcompany in his affidavit. In addition the petitioner says that one ofthe Directors of the 3rd respondent Company was appointed Chairmanof the Gas Company by the present Government on or around 1.10.94.
On the other hand, the petitioner says that he is a strong andlong serving supporter of the opposition United National Party (lettersmarked F1, F2, F3 and G) and that he has been a close friend ofthe former President, the late R. Premadasa. The petitioner adds thatone of his children was a flower girl at the wedding of the lateR. Premadasa. He has produced several photographs marked Elto E4 in which he is shown in close association with the late President.Further, the petitioner states in paragraph 35 of his petition, that thewidow of the late President, Mrs. Hema Premadasa, had been employedby the petitioner prior to her marriage. He therefore states that hisdealership was terminated solely on political grounds.
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If I may repeat myself, it is seen that there is no Board Paperor resolution by the Board to counter this allegation, and I am of theview that these facts taken in their entirety would lead to the conclusionthat the Board of the 2nd respondent Corporation was motivated bypolitical considerations when it terminated the petitioner’s dealership.The arbitrariness with which the Board acted also lends credence tothis view.
Taking into consideration all the circumstances of this case, I amof the view that it has been established that the agreement withthe petitioner was terminated by the Board of the 2nd respondentCorporation on account of political opinion and therefore, I hold thatthe 2nd respondent has violated the petitioner's fundamental rightguaranteed by Article 12 (2) of the Constitution.
As regards the violation of Article 12 (1) of the Constitution, I muststress once again, that the Board of the 2nd respondent Corporationhas placed no material whatsoever before us to justify termination.As set out in detail earlier in this judgment, the several transgressionsset out in detail by Mr. Unamboowe, in his affidavit, were actuallymeant for the purposes of the 2nd respondent's defence in this courtand there is nothing whatever to suggest that this material was everpresented before the Board. I am therefore of the view that the Boardcould not have taken into consideration the litany of transgressionssaid to have been committed by the petitioner, as enumerated byMr. Unamboowe.
In the result, this Court is totally unaware of the Board’s reasonsfor the termination, and I can therefore discover no basis at all forthe termination of the petitioner's dealership other than political con-siderations. The 2nd respondent has totally failed to establish that itsdecision to terminate was in conformity with the terms of the Agree-ment (2R2). On the contrary, it was in total violation of clause 12Bof the agreement. Therefore, the allegation made by the petitionerthat the 2nd respondent had not only acted in a wholly arbitrarymanner, but also that it had discriminated against him on accountof political opinion has not been countered by the 2nd respondent. I
I would therefore hold that the Board of the 2nd respondentCorporation was not entitled to terminate and not justified in terminatingthe petitioner's dealership, and therefore the petitioner is entitled to
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a declaration that his fundamental right under Article 12 (1) has beeninfringed by the abritrary termination of his dealership.
I therefore grant the petitioner a declaration that his fundamentalrights under Article 12 (1) as well as under Article 12 (2) have beenviolated by the 2nd respondent.
In his prayer the petitioner prays for damages and/or compensationin a sum of Rs. 25 million. He also claims a large sum of moneyas commission which he lost as a result of the termination. He addsthat he ran no other business, and had ho income other than whathe earned from the petrol station. As set out earlier in my judgment,the petitioner says that when he vacated the petrol station, he leftbehind a stock of approximately 500 gallons of diesel and 300 gallonsof kerosene oil. In addition, on the very morning of the take over,he had deposited Rs. 259,978.53 with the 2nd respondent Corporationfor a consignment of petrol, which payment is admitted.
On the other hand according to the written submissions on behalfof the 2nd respondent, the stocks left behind were, 454 litres of petrol,4,781 litres of diesel and 908 litres of kerosene all of which were valuedat Rs. 84,728.00 and this together with the abovementioned deposit,totals to Rs. 344,706.53. However, the 2nd respondent says that thepetitioner owes the 2nd respondent Rs. 360,702.27 in respect ofpurchases made, and outstanding electricity and water bills, and thattherefore, a balance is still due to the 2nd respondent from thepetitioner.
I am of the view that these are accounting matters which mustbe checked by persons competent to do so and the account settledaccordingly. It is not the function of this Court to audit accounts, soto speak.
In conclusion, for the reasons set out in this judgment, I declare:
that the 1st respondent has not violated any of the petitioner'sfundamental rights ;
that the 2nd respondent has violated the fundamental rightsguaranteed to the petitioner under Articles 12 (1) and 12 (2)of the Constitution; and
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that the Order dated 26.6.95 terminating the petitioner'sdealership of the petrol station situated at No. 291, Danisterde Silva Mawatha, Colombo 9, and contained in the lettermarked 2R9 is null and void and of no effect in law.
I make order and direct the 2nd respondent Corporaton to reinstateand take all such steps as are necessary to reinstate the petitioneras dealer of the petrol station situated at No. 291, Dr. Danister deSilva Mawatha, Colombo 9, under and in terms of the agreementbetween the 2nd respondent Corporation and the petitioner dated22.7.82 and marked 2R2 in these proceedings, within one month ofthe date of this order. The implementation and carrying out of thisorder, would necessarily mean that the 3rd respondent will have tobe displaced.
Taking into consideration all the facts and circumstances of thiscase, I would consider it just and equitable that the 2nd respondentCorporation should pay to the petitioner a sum of Rs. 100,000 ascompensation together with Rs. 25,000 as costs.
I make order accordingly.
DHEERARATNE, J. – I agree.
GUNAWARDANA, J. – I agree.
Relief granted.