017-SLLR-SLLR-2007-V-2-SHELL-GAS-LANKA-LTD-v.-CONSUMER-AFFAIRS-AUTHORITY-AND-OTHERS.pdf
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SHELL GAS LANKA LTDV
CONSUMER AFFAIRS AUTHORITY AND OTHERSCOURT OF APPEALSIRIPAVAN, J.
SISIRA DE ABREW. J.
CA 604/2006 (WRIT)
NOVEMBER 6, 2006JANUARY 30, 31,2006MARCH 1,2007
Consumer Affairs Authority Act, No.9 of2003 — Sections 3 (4), 6, 7, 8 (20), 18,52 (2) – Revision of Price – Quorum for any meeting for Members – Absence ofa quorum — Implications — Delegation of power?
The petitioner’s application for an upward revision of L.P. Gas cylinders – pricerevision – was refused by the 1st respondent – The petitioner sought to quash
same.
Held:
Section 3 (4) of the Act contemplates that the quorum for any meeting of theAuthority shall be four members; it is mandatory that in order to have legalforce any decision made by the 1st respondent authority must have beenmade by at least four members.
The Director General cannot act as a member of the Authority – S 3 (1)Held further:
It is essential that to the lawful exercise of power, it should be exercised bythe 1st respondent authority upon which such power is conferred and by noone else. The powers of the Authority cannot be delegated to the PricingCommittee, the Pricing Committee may facilitate the discharge of thefunctions of the Authority, but the Pricing Committee has no jurisdiction toexercise the powers of the Authority.
Application fora Writ of Certiorari.
Cases referred to:
General Medical Council v U.K. Dental Board 1936 Ch 41
R. v Kensington and Chelsea Rent Tribunal ex.p. Mac Fariane -1974 WLR1466 at 1490
CA
Shell Gas Lanka Ltd. v Consumer Affairs Authority and others
(Srioavan. J.)
213
Faiz Musthapha PC with Chanaka de Silva and Javed Mansoor petitioner.Milinda Gunatilleke SSC for respondents.
Cur.adv.vuit.
March 05.2007SRIPAVAN, J.
The petitioner made an application to the 1 st respondent Authorityin terms of section 18 of the Consumer Affairs Authority Act No.9 of2003 seeking an upward revision of LP Gas Cylinders. The 1strespondent by its letter dated 2nd March, 2006 refused to grant theprice revision to the petitioner. The petitioner now seeks a Writ ofCertiorari to quash the said refusal contained in the documentmarked *p108’ on the following grounds, inter alia;
the failure to hold a proper inquiry and acting in violation of theprinciples of natural justice;
the failure to take into account relevant circumstances;
the 1 st respondent has abused its powers conferred upon it bysection 18 of the said Act; and
the violation of the legitimate expectation of the petitioner thatthe petitioner’s application would be determined in accordancewith the agreed pricing formula.
The petitioners in paragraph 74 of the specification averred thatthe decision of the 1st respondent Authority communicated to thepetitioner by its letter dated 2nd March, 2006 marked ‘P108a’ was anabuse of the power conferred upon the said Authority by section 18.Answering the averments contained in paragraph 74 of the petition,the respondents in paragraph 35 of their statement of objectionsreferred to the minutes of the meeting of the Authority and theattendance sheet containing the names of the members who werepresent at the meeting marked *R7’ and 'R8' respectively.
Section 3(4) of Act No. 9 of 2003 in its schedule contemplates thatthe quorum for any meeting of the Authority shall be four members.Thus, it is mandatory that in order to have legal force any decisionmade by the 1st respondent-Authority must have been made at leastby four members. In this back ground, the Court has to consider
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whether the impugned decision marked ‘P108’ was infact made interms of section 3(4) of the said Act read with clause 8(2) of theschedule.
Learned Senior State Counsel appearing for the respondentssubmitted that the Pricing Committee "which met on 27th February,2006 made its decision marked *R7 It was further submitted that themembers of the Pricing Committee were also members of the 1strespondent Authority and in any event the powers of the 1strespondent Authority could be delegated to the Pricing Committee interms of section 8(n). It is apparent from the minutes of the meetingand the attendance sheet marked *R7* and ‘RS’, the Chairman of the1st respondent Authority was not present at the meeting. Othermembers present were as follows:
Mr. Jude Fernando
Mr. Neville Jayawardena and
Ms. Rajes Nonis.
The 4th person who was present at the meeting was Ms. R.K.Jayasooriya, Director-General/Chief Executive Officer of the 1strespondent Authority.
In terms of section 52(2) of the said Act, the Director-General is theChief Executive Officer of the Authority and acts under the direction ofthe Authority. Further, section 5 provides that the Director-Generalacts as the Secretary of the Authority. Therefore, the Director-Generalcannot act as a member of the Authority appointed in terms of section3(1). Thus, the Court can safely conclude that the impugned decisionwas taken only by three members of the Authority.
It is essential that for the lawful exercise of power, it should beexercised by the 1 st respondent Authority upon whom such power isconferred and by no one else. The extent of permissible delegationwill, of course, have to be determined with reference to the terms ofthe statute, because if the delegation exceeds the limits set out by thestatute it will be ultra vires leading to the invalidity of the act done bythe delegate. I am unable to agree with the learned Senior StateCounsel that the powers of the Authority can be delegated to thePricing Committee. The Pricing Committee may facilitate thedischarge of the functions of the Authority. But, the Pricing Committeehas no jurisdiction to exercise the powers of the Authority. The Act
CA
Shell Ges Lanka Ltd. v Consumer Affairs Authority and others
(Srbavan. J.)
215
section 6 provides the delegation of powers to Public Officers only. Astatutory power to delegate functions will not necessarily extend toeverything. Thus, it has been held in the case of General MedicalCouncils U.K. Dental Boards that the General Medical Council mustitself exercise its disciplinary powers over Dentists and cannotdelegate them on to a Executive Committee for the purpose of itsfunctions under Dentists Act.
There is no doubt that the actual participation of a non member ofthe Authority in the taking of a decision involves want of jurisdiction,conversely, the mere presence of the Director-General does notinvalidate the decision if she did not participate in the decision makingprocess. It is indeed the Duty of the Courts to ensure that powersshall not be exercised in an unlawful and arbitrary manner, when theexercise of such powers affect the basic rights of individuals. Thecourt should be alert to see that such powers conferred by the statuteare not exceeded or abused. Once it is established who constitute theAuthority, it is clear that all members must participate in its decision.In R v Kensington and Chelsea Rent Tribunal ex.p. Mac. FarianeP>Lord Widgery, C.J. recognized this principle when he said "Counselhas given us a timely reminder that under the Act, tribunal consists ofa Chairman and 2 other members; he submitted quite rightly that nodecision can be taken except by the tribunal so constituted."
In the absence of a quorum for the meeting of the members of the1st respondent Authority, I hold that the decision contained in thedocument marked ‘P108’ is devoid of any legal effect. Accordingly, aWrit of Certiorari is issued quashing the said document marked■P108
The objectives of the Consumer Affairs Authority Act No.9 of 2003as shown in its long title is the promotion of effective competition andthe protection of the consumers. Thus, the Court is duty bound toconsider the general legislative policy underlying the provisionscontained the Act. While the Act protects traders and manufacturersagainst unfair trade practices, the consumer interest shall also begiven due consideration as provided in section 7 of the said Act. Oneof the objects of the 1st respondents Authority is to ensure thatconsumers have adequate access to goods and services atcompetitive prices. Its function includes the protection of rights and
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interest of consumers and other users of goods and services andavailability of quality goods and services at reasonable prices.
Therefore, exercising the discretionary powers vested in this Court,I direct the 1st Respondent to consider the Petitioner’s application forthe increase of the LP Gas prices in terms of the provisions containedin Act No.9 of 2003 and to take a decision in terms of the law within onemonth from today. The petitioner is entitled for costs in a sum ofRs.10,000/= payable by the first respondent Authority.
SISIRA DE ABREW, J. – I agree.
Application allowed.