013-SLLR-SLLR-2008-V-1-SHELL-GAS-LANKA-LTD.-v.-CONSUMER-AFFAIRS-AUTHORITY-AND-OTHERS.pdf
128Sri Lanka Law Reports[2008] 1 Sri L.R
SHELL GAS LANKA LTD.v
CONSUMER AFFAIRS AUTHORITY AND OTh £RSCOURT OF APPEALSRISKANDARAJAH, J.
CA 1495/2005FEBRUARY 25, 2008MARCH 24, 2008.
Consumer Affairs Act No. 9 of 2003 – Section 3 (4), section 13 (1) – Leakinggas cylinder – Complaint to Authority – Compensation ordered – Quorum -Authority not property constituted – Legality of the award?
The 3rd respondent complained to the 1st respondent in relation to the sale ofLPG as the gas cylinders were leaking and it is dangerous and not suitable foruse, and claimed compensation. After inquiry the Authority awardedcompensation.
QA Shell Gas Lanka Ltd. v Consumer Affairs Authority and others- 29
(Sriskandarajah, J)
The petitioner company sought to quash the order on the basis that the orderwas made by the 1st respondent Authority which was not properly constitutedas there was no quorum. The order was made by three members when thequorum was four. .
Held
The power to inquire into complaints and to make an order under section13 is vested in the Consumer Affairs Authority. The lawful exercise of thepower of the Authority has to be made according to the provisions of thesaid Act.
Section 3 (4) in its schedule contemplates that the quorum for any meetingof the authority shall be four members. This is mandatory and in order tohave legal force of any decision made by the 1st respondent Authority musthave been made at least by four members of the Authority.
The inquiry was held by three inquiring officers and the order was madeby them and they have signed the said order. In the absence of a quorumthe order is devoid of any legal effect.
APPLICATION fora writ of certiorari.
Cases referred to>
Moosajees Ltd v Eksath Engineru Saha Samanya Kamkaru Samithiya -79 (1) NLR 1285 at 288.
Sarath Hulangamuwa v Siriwardene, Principal Vishaka Vidyalaya,Colombo and five others – 1981 – 1 Sri LR 275 at 281.
Shell Gas Lanka Ltd v Consumer Affairs Authority and two others – CA604/2006 – CAM 05.03.2007.
Chanaka de Silva for petitioner.
Vikum de Abrew SC for 1st and 2nd respondents.
Kuvera de Soysa with Dilumi de Alwis for 3rd respondent.
Cur.adv.vult.
May 15, 2008SRISKANDARAJAH, J.
The petitioner is a body corporate incorporated in Sri Lanka. Thepetitioner supplies and distributes Liquid Petroleum Gas (LPG) inSri Lanka. The LPG is sold in Sri Lanka for domestic consumptionin cylinders of two categories, namely, 12.5 Kg and 2.3 Kg. The gascylinders are imported by the petitioners from internationallyreputed manufacturers.
130Sri Lanka Law Reports[2008] 1 Sri L.R
The 1st respondent is a body corporate incorporated by theConsumer Affairs Authority Act, No.9 of 2003. The 3rd respondenthad made a complaint to the 1st respondent in relation to the saleof LPG as it was leaking and it is dangerous and not suitable foruse. The said complaint was made under section 13 of theConsumer Affairs Authority Act.
It provides:
13.(1) The Authority may inquire into complaints regarding:
the production, manufacture, supply, storage, transportationor sale of any goods and to the supply of any services whichdoes not conform to the standards and specificationsdetermined under section 12; and
the manufacture or sale of any goods which does notconform to the warranty or guarantee given by implication orotherwise, by the manufacturer or trader.
A complaint under subsection (1) which relates to the sale ofany goods or to the provision of any service shall be made to theAuthority in writing within three months of the sale of such goods orthe provisions of such service, as the case may be.
At any inquiry held in to a complaint under subsection (1), theAuthority shall give the manufacturer or trader against whom suchcomplaint is made an opportunity of being heard either in person orby an agent nominated in that behalf.
Where after an inquiry into a complaint, the Authority is ofopinion that a manufacture or sale of any goods or the provision ofany services has been made which does not conform to thestandards or specifications determined or deemed to bedetermined by the Authority, or that a manufacture or sale has beenmade of any goods not conforming to any warranty or guaranteegiven by implication or otherwise by the manufacturer or trader, itshall order the manufacturer or trader to pay compensation to theaggrieved party or to replace such goods or to refund the amountpaid for such goods or the provision of such service, as the casemay be.
…
…QA Shell Gas Lanka Ltd. v Consumer Affairs Authority and others-| 31
(Sriskandarajah, J.)
The 1st respondent held a preliminary discussion on 15thDecember 2004 in the presence of the parties. At the discussionthe said gas cylinder was examined in the presence of thepetitioner’s representatives and the statements were recorded.When the 3rd respondent gave her statement she claimed forcompensation. The statement is marked as 2R1.
The 1st respondent laid down certain conditions and the stepsthat have to be taken by the petitioner before 21st December 2004namely:
Improve the quality of consumer service,
Implement a dealer training programme,
Initiate action to protect the quality of the product (inform therelevant authorities on illegal import and filling of cylinder)
Publish an advertisement on the safe use of gas by theconsumer.
On the 22nd of January 2005 the petitioner provided areplacement cylinder to the 3rd respondent.
The 1 st respondent in terms of section 13(1) of the said Act heldan inquiry on the 16th of February 2005 on the said complaint of the3rd respondent. The inquiry was taken up on several dates andwhen the inquiry was finally taken up on 18th July 2005 thepetitioner reiterated its position that it was not agreeable to make amoney payment as it did not accept liability for the alleged leak ofthe cylinder. Thereafter written submissions were tendered by bothparties and the 1st respondent Authority by its letter dated 31stAugust 2005 communicated its decision to the petitioner. The 1strespondent Authority in the said decision has made the followingorder:
“Having taken into consideration the above facts and the natureof seriousness, the Authority is of the view that the replacement orthe refund of the price is not adequate. Therefore, the relevantrespondent company, namely, Shell Gas (Lanka) Ltd is ordered topay a sum of Rs. 75,000/- by way of compensation to the aggrievedparty, namely Mrs. Devika Perera, and it is further ordered that therespondent company shall arrange to pay the said sum ofRs. 75,000/- to her on or before the 10th of September 2005.”
132Sri Lanka Law Reports[2008] 1 Sri L.R
The petitioner in this application is seeking a writ of certiorari toquash the aforesaid order on the basis that:
The Order was made by the 1st respondent Authority whichwas not properly constituted as there was no quorum.
The 1st respondent Authority in making the said Order hasacted out side the scope and ambit of Consumer AffairsAuthority Act and it is ultra vires.
That the Authority has not taken relevant facts intoconsideration in arriving at the said decision.
The 1st respondent raised a preliminary objection in thisapplication that the petitioner in this application has suppressedmaterial facts to this court and therefore this application has to bedismissed. The respondent contended that the petitioner inparagraph 17 of the petition and in the corresponding paragraph inthe affidavit has stated that at the discussion on 15th December2004 there is no reference to the compensation being sought by the3rd respondent. The respondent marked the inquiry notes of thesaid discussion as 2R1 and the statement made by the 3rdrespondent requesting for compensation is marked as 2R1 (a) andsubmitted that the petitioner has suppressed this material fact.
In Moosajees Limited v Eksath Engineru Saha Samanya
Kamkaru Samithiya (1) at 288 the court held that suppression ofmaterial facts is fatal to an application and observed:
‘The pleadings in their petition and affidavit do not contain a fulldisclosure of the real facts of the case and to say the least thepetitioner has not observed the utmost good faith and has beenguilty of a lack of uberrima tides by suppression of material facts inthe pleadings. It was neither fair by this court nor by his counselthat there was no full disclosure of material facts.”
The court took a similar view in Sarath Hulangamuwa vSiriwardena, Principal, Visakha Vidyafaya, Colombo 5 and
Others(2) at 282 it was held:
“A petitioner who seeks relief by writ which is an extraordinaryremedy must in fairness to this court, bare every material fact sothat the discretion of this court is not wrongly invoked or exercised.
Ca Shell Gas Lanka Ltd. v Consumer Affairs Authority and others133
(Sriskandarajah, J.)
In the instant case the fact that the petitioner had a residence atDehiwela is indeed a material fact which has an important bearingon the question of the genuineness of the residence of thepetitioner at the annexe and on whether this court should exerciseits discretion to quash the order complained of as unjust anddiscriminatory.”
The suppression of facts has to be material to the determinationof the application. This application is to quash an order to paycompensation which the petitioner contends is ultra vires. Thechallenge is not on the basis that the 3rd respondent has not madea request for compensation but on the vires of the powers of the 1 strespondent Authority to grant such a relief. The compensation wassought by the 3rd respondent in the preliminary inquiry, eventhough the representative of the petitioner was present in the saidpreliminary inquiry the proceedings of the said inquiry was notmade available to the petitioner. In these circumstances the claimmade by the 3rd respondent for compensation in the said inquiry isnot correctly stated in the petition cannot be considered assuppression or misrepresentation of material fact. Therefore Ioverrule the preliminary objection of the respondents.
The petitioner submitted that the impugned order marked2R3(a) was made by three members of the said Authority. Thequorum of any meeting of the Authority shall be four members andhence the said order was made without jurisdiction.
The power to inquire into complaints and to make an orderunder section 13 of the said Act is vested in the Consumer AffairsAuthority. The lawful exercise of the power of the said Authority hasto be made according to the provisions of the said Act. Section 3(4)of Act, No.9 of 2003 in its Schedule contemplates that the quorumfor any meeting of the Authority shall be four members. Thus, it ismandatory that in order to have legal force of any decision made bythe 1st respondent-Authority must have been made at least by fourmembers of the Authority; Shall Gas Lanka Limited v Consumer
Affairs Authority and two othersS3)
It is an admitted fact that the inquiry was held by three inquiringofficers and the impugned order marked 2R3(a) was made by themand they have signed the said Order which was communicated by
134Sri Lanka Law Reports[2008] 1 Sri L.R
the letter dated 31.08.2005 P14. The duty of the court is to see thatpower shall not be exercised in unlawful and arbitrary manner,when exercise of such powers affects the basic rights ofindividuals. The courts should be alert to see that such powersconferred by the statute are not exceeded or abused. The Authorityis constituted by at least four members sitting together (thequorum). In the absence of a quorum for the meeting of themembers of the Authority to hold and inquiry and to make an Orderis devoid of any legal effect. Hence this court issues a writ ofcertiorari to quash the said order communicated to the petitioner byletter dated 31.08.2004 marked P14.
The application for writ of certiorari is allowed without costs.Application allowed.