010-NLR-NLR-V-51-SIRIMAL-Appellant-and-DE-SILVA-Respondent.pdf
42
GRATIAEN J.—ffirimol v. De Silva
1949
Present: Gratiaen J.
SfRlMAL, Appellant, and DE SILVA, Respondent
S.C, 34—M. C. Balapiliya 61,631
Urban Councils Ordinance—Sale, oj soap to Council—S/top owned by Chairman—Order signed by Secretary on behalf of Chairman—Payment made later—Commission of offence—Master's liability for act of servant—Continuingoffence—Prescription—Ordinance 61 of 1939—Sections 238 and 230.Accused was Chairman of the Urban Council, Ambalangoda. OnMay 6, 1948, the Secretary of the Council sent a written order to a shopowned by the accused for four dozen packets ofLux soap. The soap wassupplied on the same day by the accused’s salesman to whom the accusedhad delegated the management of the shop. The salesman knew thatthe soap had been ordered for the Council. The bill was paid on June 8,on the express authority of the accused in his capacity as Chairman.Proceedings were instituted on September 7, charging the accusod withthe commission of an offence under Section 238 of Ordinance No. 61of 1939. The Magistrate held that the offence had been committedbut that the prosecution was out of timo in view of the provisions ofSection 230 of the Ordinance.
Held, that the accused had committed an offence punishable underSection 238 of the Ordinance although ho had no personal knowledge of thetransaction at the time when the soap was actually ordered and delivered.
Per Gratiaen J. “ In transactions of this nature the knowledge of aservant acting within the scope of his employment must be regarded as theknowledge of his master unless the master can at least satisfy the Courtthat he took all possible steps to prevent the commission of the offence,if it were otherwise the statutory prohibition would be set at naughtby any employer who leaves the conduct of his business in other hands. ’ ’Held, further, that the offence was a continuing one until the paymentof the price on June 8, and that the prosecution was within time.
Ap
PEAL from a
judgment of the Magistrate, Balapitiya.
S. Jayaunckrama for complainant appellant.
V. Perera, K.C., with U. A. Jay asunder a, K.C., and C. 0.Weeramanlry, for the respondent.
Cur. adv. vnU.
43
GK AT OVEN J.—Sirimal v. D* SiEwApril 6, 1949. Gratiajen J.—
This is an appeal against an acquittal, and has been tiled with thesanction of the Attorney-General.
The accused was throughout the period relevant to the presentproceedings the Chairman of the Urban Council of Ambalangoda. He alsoowned a shop in the town known as the Central Stores. Early in May,1948, supplies of soap in the Council’s resthouse ran short, and theCouncil’s officers bestirred themselves with refreshing promptitude tomake good the deficiency. On May 6 the Secretary of the Council atthe storekeeper's request forwarded a written order PI to the accused’sshop foe the supply of 4 dozen packets of Lux soap to tho Council. Therequisition was signed by the Secretary for and on behalf of “ the Chair-man The order was executed on the same day by the accused’ssalesman, but the storekeeper who actually attended to the transactionadmitted in. evidence that the accused was not personally aware at thetime that the soap had been purchased from the Central Stores. It was acredit sale, and in due course an account P0 was rendered by the shopto the Council for payment. The bill was paid on June 8 on the expressauthority of the accused in his capacity as Chairman of the Council. Hehas stated in his ovidence that he did not approch to that he was in factauthorizing payment to h'mself, but this statement has been rejectedby the loarned Magistrate. The learned Magistrate’s finding to theeffect that the accused read and clearly understood that the hill P6 wasa demand for payment from his own shop has not boen challenged inappoal.
Tho evidence in the case shows that the atmosphere in theAmbalangoda Urban Council was very far from cordial at the time ofthis transaction. Fortunately it is not nocessary for me to examiueand far less to adjudicate upon the merits, if any, of the petty squabbleswhich seem largely to have influenced the actions of the rival parties andtheir respective supporters. Sufficeittosay that on September?, 1948—tho date is important—the complainant, claiming somewhat speciouslyto be actuated by a mission to “ purify ” local politics, instituted thopresent proceedings in the Magistrate’s Court of Balapitiya, chargingthe accused with the commission of an offence punishable undersection 238 (2) of the Urban Councils Ordinance, No, 61 of 1939. Thesubstance of the charge is that, whilst being a member of the Council,he was on or about June 8, 1949, directly or indirectly concerned in acontract made with the said Council—the alleged contract being thecontraot of sale by which the accused’s shop had sold 48 packets of Luxsoap to the Council on May 6,1948.
After trial the learned Magistrate came to the conclusion “ that thecommission of the offence complained of had been established beyondall reasonable doubt, but that the accused was not liable to any fineor penalty by reason of the provisions of section 230 of tho UrbanCouncils Ordinance of 1939 The accused was accordingly acquitted.
In appeal it was argued on behalf of the accused that the learnedMagistrate had wrongly decided that tho evidence disclosed the com-mission of an offence. Counsel for the complainant, on the other hand,
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GRATIAEK J—Sirimai t. Ito SUm
supports this part of the judgment, but challenges the finding that theaccused was protected by the provision of section 230 from the conse-quences of his offence. The facts of the case as decided by the learnedMagistrate are not in dispute, and, as far as they are relevant to thisappeal, are substantially as I have set out earlier in ray judgment.
The main questions for consideration are whether the transaction,by which the accused’s salesman sold a quantity of soap to the UrbanCouncil of which the accused was admittedly a member at the relevant-date constituted a “ contract ” of the kind which is prohibited bysection 23ft (I) of the Ordinance, and if so, whether the accused was“ concerned or had any financial interest in ” such contract within themeaning of the section. It is only if these questions are answered inthe affirmative that the operation of section 230 would require to beconsidered.
Section 238 (1) of the Ordinance prohibits any member, officer orservant of the Council from directly or indirectly being concerned orhaving any financial interest in any contracts or work made, done orexecuted for the Council. Section 238 (2) declares that a person soconcerned or interested shall (subject to a proviso which is inapplicablehere) ho guilty of &d offence, and shall also be subject to a disqualificationto which I shall later refer. Legislation of this kind is not unfamiliarin the case of local bodies, and, notwithstanding differences in languagewhich sometimes creates additional problems, tho intention, as LordKuher said in button v. Wilson1 “is clearly to prevent members of localbodies, which may have occasion to enter into contracts, from beingexposed to temptation or even to the semblance of temptation ”. Lindleyh.J. said in the same case that “ the object obvious)]’ was to preventthe conflict between interest and duty that might otherwise inevitablyarise In Holden v. Southwark Borough Council? Astbury J. consideredthe scope and object of analogous legislation and decided that the enact-ment had to be construed as referring to bargains or contracts enteredinto for profit between the person in question and the corporation,when the interest and duty of the member might come into conflict-He took the view, which I readily and respectfully adopt, that“•some limitation must be put upon the general ivords of the SectionThe difficult problem which arises, however, is the legitimate extent towhich limitations can be placed upon the words without doing violenceto their plain meaning and to the accepted canons of construction..Moreover, the right to limit must itself bo limited if tho mischief aimed atis to be avoided. Clearly, an actual and conscious conflict between-interest and duty need not be established in each particular case, forproof of such a conflict would seldom bo forthcoming. Rather is itsufficient to prove a possible conflict or. in the words of Lindley L.J.r
the semblance of temptation Indeed, it seems to me that themischief which the legislature seeks to avoid is the risk of temptationnot only in the way of the member concerned in the contract but alsoin tho way of other officers of the local authority who may, in theory,be less disposed to scrutinise transactions in which an influential member1 UMS) 68 L. J. Q. S. 445.» [1921) 1 Ch. SS7.
GRATIAEN J.—Sirimal v. De Silva
46
of the local authority is known to have some financial interest. Again,it would not be legitimate to construe the section so as to limit its operationto contracts which are proved to have been corruptly entered into. InNutton v. Wilson (supra) a member was expressly absolved from thestigma of corrupt intention but was nevertheless held to be disqualified.I am also satisfied that, as learned Counsel themselves concede, the priceof the goods which form the subject-matter of ^contract of sale cannotby itself turn the scales one way or the other. “ That”, said Cave J. inNell v. Longbottom1, “ is a matter into which we cannot enter, as theLegislature has not entrusted us with any dispensing power”. It isnoteworthy that in that particulardecisionone of the grounds for holdinga member to be disqualified was that he had sold half a gallon of oil tothe local authority for only four-pence. Indeed, it would be very difficult,without a clear direction from the language of the enactment itself, todraw the line with any confidence between contracts which arc clearlymischievous at one end and others which, when regarded as isolatedtransactions, seem to be of trivial consequence. Nor am I satisfied thatthe circumstance that a particular contract represents a single transac-tion can necessarily make a difference. It seems to me that certainobiter dicta of Low J. in Tranton v. Aston2 go too far. If the only contractswhich are prohibited are those of a continuing character, the decision inRoyse v. Birley8 which he purported to follow and to which I shall shortlyrefer might well have been disposed of on that simple ground. If thatwere the law, a member could with impunity derive a very considerableprofit from an isolated transaction whereas another would be disqualifiedfor entering with less profit into a serios of transactions. I cannot con-ceive that the Legislature did not necessarily intend to bring both suchmembers within the ambit of the prohibition.
For the purpose of deciding whether the sale of soap on May 6, 194$,renders the accused liable under section 238 (2) I am content to acceptthe submission of Mr. H. V. Perera that this transaction representednothing more than a sale by the accused’s salesman over the counter inthe ordinary way of business. The question is whether such transactionsmust always, upon a reasonable interpretation, be excluded from theoperation of the Section. In Royse . v. Birley (supra) the Court ofCommon Pleas considered the case of a Member of Parliamentwhose election was challenged on the ground that he “heldor enjoyed ” an interest in two contracts with the Government.The second of these contracts was very similar in nature tothe transaction with which we are now concerned. Shortly afterMr. Birley’s election an officer of a Government establishmentpurchased certain goods for the establishment from a shop in whichMr. Birley had a proprietory interest. The officer making thepurchase however did not inform the salesman that he was contractingfor the Government “ nor did he supply the means of ascertaining thathe was so or not The salesman therefore who supplied the goods wasnot aware that he was dealing with the Government. In these circums-tances Willes J. held that the contract did not disqualify Mr. Birley
1 (1894) 1 Q. B. 764.
» (1898) 3 Q. B. 306.
• (JSCS) 4 C. P. 311.
46
GRATIAEN J.—Striatal v. Dt Silva
“ because there was a total absence of knowledge that the contract waswith the Government”. Having regard to the highly penal provisionof the statute, ho took the view that “ knowledge or at least means ofknowledge should be a condition of the penal consequences which are tofollow Montague Smith J. agreed that “ there must be a contractwhich is known or which at least ought reasonably be known by the personsought to be disqualified to be a contract with the Government Iwould with great respect adopt in the present case the test which com*mended itself to the learned Judges in Royse v. Birley. The principleappears to have been regarded in England as settled ever since. InNniton v. Wilson it was conceded by Counsel during the argument atpage 445 that the cases “ where trivial articles are purchased at the shopof a local member without his knowledge ” fell outside the scope of thestatute under consideration.
The test then to be applied is whether in the present case the appellanthad the knowledge or at least the means of knowledge that the Councilwas tho other contracting party to the contract for the ealo of 48 packetsof soap on May 6, 1948. If the answer to this question be in theaffirmative, I think that however innocent the transaction may havebeen, it was within the mischief which section 238 seeks to avoid.
In the present case the accused had no personal knowledge of thetransaction when tho soap was actually ordered and delivered. Butunfortunately that circumstance is not in itself sufficient to entitle him t-oan acquittal. He had so arranged the affairs of his shop that, as is usualin such cases, he delegated its management largely to someone else. Thatperson not only possessed the means of knowledge but knew in fact thatthe soap was being ordered for the Urban Council of which the accused,his master, was Chairman. The requisition PI and the subsequentbill P6 establish this beyond doubt. In transactions of this nature theknowledge of a servant acting within the scope of his employment must1 think be regarded as the knowledge of his master unless the mastercan at least satisfy the Court that he took all possible steps to preventthe commission of the offence. If it were otherwise, the statutory pro-hibition could be set at naught by any employer who leaves the conductof his business in another’s hands. Coppen v. Moore1. In the presentcase tho fact that the accused later adopted the transaction and knowinglyauthorised the payment of the price makes the strict application of thelegal principles involved less disagroeable than it would otherwise havebeen.
For tho reasons which I have given I hold, though with little enthusiasm,that the evidence in the case disclosed the commission of an offenceprohibited by section 238 of the Ordinance. I cannot accept the sub-mission that, on the analogy of tho judgments of tho Court in Royse v.Birley regarding the earlier of the two contracts proved in that case,section 238 does not apply to contracts of sale where tho member con-cerned has already fulfilled his obligations under the contract, so thatall that romains is for him to receive payment of the price from tho localauthority. In Royse v. Birley the defendant had entered into a contract1 (JSS3) 58 L. J. Q. B. 445.
GBATIAEN J.—Sirimal v. De Silva
47
with the Government and had performed his obligations under it beforethe date of his election to Parliament, and it would clearly have beeninequitable to hold him disqualified by reason only of the Government'sdelay in paying him what was his due. In that case the contract wasat its inception unobjectionable, and no disqualification could attachto a contractor who secured election to Parliament thereafter unless atthat later date the contract still remained unperformed by him in anyrespect. But in the present case the contract of sale was entered intoat a time when the accused was already a member of the Council. Ifthe view that the section aimed only at executory contracts was intendedby Willes J. to be of general application, he would not have found itnecessary to insist upon “ knowledge ° as a condition, of Mr. Birley’sguilt in the case of the later contract executed and instantaneouslyperformed by his agents after the date of his election to Parliament.
It remains only to consider whether the learned Magistrate wasjustified in holding that the accused is protected by the provisions ofsection 230 of the Ordinance. Section 230 declares that “ no personshall be liablo to any fine or penalty under this Ordinance …. forany offence triable by a Magistrate unless the complaint respecting suchoffence shall have been made three months next after the commission ofsuch offence The learned Magistrate took the view that the contractwas concluded on May 0, 1948, when delivery of the soap was effected,and that the institution of proceedings on September 7,1948, was there-fore out of time. I think that this was taking too narrow a view of thetransaction. Payment of the price was not made by the Council untilJ line 8 (which date falls within the prescribed period) and the contractwas dearly subsisting until that date in so far as the Council’s obligationswere ooncemed. The contract had not till then been finally dischargedin any of the ways recognised by law, and the accused had a financialinterest therein which was very real. I hold that section 230 does notapply because there was a continuing offence punishable under section238 (2) until the contract was finally discharged by payment on .Tune 8,1948. It was not the making of the contract but “ being concerned orhaving a financial interest ” in it which constituted the offencecomplained of.
Tho verdict of acquittal recorded by the learned Magistrate must bequashed. It is with much regret that I have come to this conclusion.The transaction proved against the accused is of a trivial nature, butthat is a circumstance which I am powerless to consider except on thequestion of sentence. It is very likely—although this affords no defence—that he was unaware that transactions of this nature were in fact prohi-bited by law. I would use as my own in this connection the concludingwords of Lord Esher in Nutton v. Wilson (supra). “ I do not find that theaccused acted with any corrupt motive. But he has made a blunder,and brought himself within the provisions of this act ”. I think thatit would meet the ends of justice if, in setting aside the order appealedfrom, I record ray finding that the accused is guilty and, without pro-ceeding to conviction, make order under section 325 of the CriminalProcedure Code discharging him with an admonition. I make orderaccordingly.
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QRATIAEN J.—Sirimcd v. Da Silva
As I do not proceed to conviction, it is not necessary to considerwhether I have the power to order, by way of “ punishment ”, that theaccused be declared disqualified from sitting in Council. Whether ornot any statutory consequenoes follow from the transaction which Ihave held, for the purposes of the present appeal, to constitute an offence,it is not for me to say. Learned Counsel had invited me to hold in thisconnection that Qalapathy v. Martin1 was wrongly decided. It is notnecessary for me to consider this question in view of the order which Ihave made.
The appeal is now disposed of, and the appellant is entitled to hisvictory for what it is worth. It is only to be hoped that what hastranspired will not in any way discourage the praiseworthy aspirations ofany resthome-keeper to provide soap for the customer.
Acquittal set aside.
Accused discharged with warning.
1 {1948) SO N. L. R. 17