SRI LANKA TRANSPORT BOARD v. COLOMBO METROPOLITAN BUS COMPANY AND OTHERS

001-SLLR-SLLR-2008-V-1-SRI-LANKA-TRANSPORT-BOARD-v.-COLOMBO-METROPOLITAN-BUS-COMPANY-AND-OTHERS.pdf


Sri Lanka Transport Board v Colombo Metropolitan
SCBus Company and others1_
SRI LANKA TRANSPORT BOARDv
COLOMBO METROPOLITAN BUS COMPANY AND OTHERSSUPREME COURTSHIRANI BANDARANAYAKE, J.
FERNANDO, J.
SOMAWANSA, J.
SC SPL. LA 77/2007CA 143/2003JULY 10, 2007SEPTEMBER 4, 2007MARCH 11, 2008
Sri Lanka Transport Board Act 27 of 2005 – S2-S3-S11 (1) a – S17 (1) -S18(1). Is the Sri Lanka Transport Board a body corporate? ~ Characteristic ofa Corporation – Ceylon Tourist Boards Act 10 of 1966 – S31 CeylonBroadcasting Corporation Act – S2 (2). S4 (1) Public Records Ordinance -Shipping Corporation Act S2 (2) ~ Gem Corporation Act S2 (2) – CommonAmenities Board Law 10 of 1973 – S2 Public Trustee Ordinance S3.
Held:
The common characteristics of a corporation are a distinctive name,a common seal and perpetuity of existence. As a Rule the contractsof a corporation must be under seal of the corporation.
Per Shiranee Bandaranayake, J.
"It is evident that for the establishment of an institution as a body corporateclear provision to that effect should be provided in the enactment".
In the absence of any direct provision or any intent to incorporate,it is evident that the Sri Lanka Transport Board under the presentAct cannot be registered as a body Corporate.
APPLICATION for Special Leave to Appeal – preliminary objection.
Case referred to:
(1) The Land Commissioner v Ladamuthu Pillai – 62 NLR 182
2Sri Lanka Law Reports[2008] 1 Sri L.R
Dulindra Weerasuriya with Amila Vithana for petitioner.
Murudu Fernando DSG for 1 st and 2nd respondentsManohara de Silva PC for 3rd respondent.
Percy Wickremaratne with Shanthi Silva for 4th, 5th and 6th respondents.
Cur.adv.vult
July 2, 2008
SHIRANI BANDARANAYAKE, J.
This is an application for Special Leave to Appeal from the 01judgment of the Court of Appeal dated 12.02.2007. By thatjudgment the application of the cluster Companies for a mandate inthe nature of a writ of certiorari to quash the order made by the 1strespondent by his letter dated 03.09.2002 informing the clusterCompanies that they will have to calculate the gratuity payable tothe retiring employees, taking into account the entire period inwhich such employees were in service, including the period thatthey have served at the Regional Transport Boards prior to thecluster Companies being formed (for which period gratuity had 10already been paid by such Regional Transport Boards), subject tothe deduction of the amounts that may have been paid by suchRegional Transport Boards prior to such employees joining thecluster Companies, was dismissed. The petitioner, namely the SriLanka Transport Board, filed an application before this Courtagainst that judgment. When this matter was taken for support forspecial leave to appeal, learned President’s Counsel for the 3rdrespondent took up a preliminary objection that the petitioner,described as the Sri Lanka Transport Board, was not a legalpersona and therefore lacked capacity to institute and maintain this 20application.
All parties were accordingly heard on the preliminaryobjection.
Learned President's Counsel for the 3rd respondentcontended that the petitioner in its application to this Court hadstated that at the time, the application before the Court of Appeal
Sri Lanka Transport Board v Colombo Metropolitan
SCBus Company and others (Shirani Bandaranavake, J.)
was proceeding, the Sri Lanka Transport Board, Act No. 27 of 2005was enacted and thereby the petitioner was established as thelawful successor to the 11 cluster Companies, which instituted theapplication in the Court of Appeal. Accordingly, the petitioner had 30come before this Court in the capacity of being the successor to the11 cluster Companies that instituted action in the Court of Appeal.
The contention of the learned President’s Counsel for the 3rdrespondent was that the said Sri Lanka Transport Board Act, No. 27of 2005, does not contain any provision incorporating the 'SriLanka Transport Board' and therefore the said Board has nocorporate personality.
Learned Counsel for the petitioner contended that theobjection raised by the learned President's Counsel for the 3rdrespondent is based on the fact that the Sri Lanka Transport Board 40Act, No. 27 of 2005 does not contain any provision, which expresslystates that the 'said Board shall be a body-corporate with perpetualsuccession and a common seal and may by its name sue and besued' and therefore the petitioner is not a body corporate.
Accordingly, the contention of the learned Counsel for thepetitioner was that when examining or interpreting a statute, itshould be considered as a whole and an interpretation should begiven to that statute preserving the spirit and the object for what itwas enacted. Further, it was submitted that when one examines thePreamble of the statute in question there is reference that the sopresent Act was enacted to achieve similar objectives of theprevious enactments and as the earlier Acts had specific referenceof those Boards being body corporates, that position should applyto the present Act as well. Learned Counsel for the petitioner alsomade reference to Sections 11(1)a, 17(1) and 18(1) of the Act tostress the point that the Board has the legal status of a bodycorporate. His contention with regard to the aforementionedsections were as follows:
Section 11(1) makes provision for the Board to acquire,hold, give on lease, mortgage, pledge and sell etc. of 60immovable property;
Section 17(1) states that where any land is required forthe purpose of the business of the Board, such land can
4-Sri Lanka Law Reports(2008J 1 Sri L.R
be acquired under the Land Acquisition Act and betransferred to the Board; and
Section 18(1) makes provision that where any immovableproperty of the State is required for the purpose of thebusiness of the Board, such land can be given to theBoard by a special grant or lease.
Accordingly, learned Counsel for the petitioner took up the 70position that for the implementation of the aforementionedprovisions, the Board has to have the legal status of a bodycorporate and therefore the statute in question has by implicationrecognized the said Board as a body corporate.
Considering the contentions of the learned President'sCounsel for the 3rd respondent and the learned Counsel for thepetitioner, it is evident that, the question that has to be examined iswhether a Board such as the Sri Lanka Transport Boardestablished in terms of Act, No. 27 of 2005 would have the statusof a body corporate even if there is no specific provision to that 80effect, under the said Act.
The common characteristics of a Corporation, as generallyknown, are a distinctive name, a common seal and perpetuity ofexistence. Almost all enactments dealing with Public Corporationscontain similar provisions, which provide for the establishment ofthe institutions as bodies corporate, having perpetual successionand a common seal. Referring to the basic features of a PublicCorporation, Dr. A.R.B. Amerasinghe (Public Corporations, pgs. 22-23) has stated that,
"Every Public Corporation in Ceylon is a separate9C
legal person. Substantially similar provisions in all theActs provide for the establishment of the institutionsas bodies corporate,having perpetual succession and acommon seal, (emphasis added)"
In his discussion, on the common characteristics of aCorporation, Dr. Amerasinghe had referred to several enactments,which had clearly made provision to state that they are bodiescorporate, having perpetual succession and a common seal(Section 3 of the Tourist Board Act, Section 2(2) of Ceylon
Sri Lanka Transport Board v Colombo Metropolitan
SCBus Company and others (Shirani Bandaranayake, J.)
Broadcasting Corporation Act, Section 4(1) of the Rubber 100Research Ordinance, Section 2(2) of the Shipping Corporation Act,Section 2(2) of the Gem Corporation Act).
The salient features of a body corporate was considered byProfessor C.G. Weeramantry (The Law of Contracts, Vol.l, pg. SIT-SIS), where he had clearly made reference to the necessity of theexistence of common characteristics for that to be incorporated.Professor Weeramantry had stated thus:
+
"The common characteristics of a corporation are adistinctive name, a common seal and perpetuity of
existence As a rule the contracts of a corporation110
must be under the seal of a corporation. So important isa seal in the existence of a body corporate that the non-existence of a seal in the case of a body alleged to be acorporation, though not conclusive, is cogent evidenceagainst corporation.”
It is therefore evident that for the establishment of aninstitution as a body corporate, clear provision to that effect shouldbe provided in the enactment. The provisions specified in theUniversities Act, No. 16 of 1978, as correctly submitted by thelearned President’s Counsel for the 3rd respondent, clearly 12°demonstrate the necessity for specific provisions to be contained inthe statute in order to establish legal personality. Section 2(2) of theUniversities Act, No. 16 of 1978 refers to the University GrantsCommission and states as follows:
"The Commission shall by the name assigned to it bysubsection (1) be a body corporate, with perpetualsuccession and a common seal and with full powerand authority to
in such name to sue and be sued in all courts;to alter the seal at its pleasure …." (emphasis added).130
Section 24(a) of the Universities Act, also confers legalpersonality on the University College and this section reads asfollows:
6Sri Lanka Law Reports(2008] 1 Sri L.R
’….establish a University College, which shall be a body
corporate with perpetual succession and a common seal
for the purpose of providing, promoting …."
However, although the University Grants Commission and theUniversity Colleges are incorporated with perpetual succession anda common seal in such name to sue and to be sued in terms ofSections 40 to 51 of the Universities Act, the University Court,Council, the Senate, the Campus or Boards, or the Faculties are notconferred with any legal personality on them. Accordingly, in termsof the Universities Act only the University Grants Commission andthe University Colleges would be regarded as bodies corporate andthe University Council, the Senate or the Faculties of theUniversities would not have such status under the said Act.
Learned Counsel for the petitioner submitted that there arestatutes, which are similar to the Sri Lanka Transport Board Act,
No. 27 of 2005. He referred to Section 2 of the Ceylon Tourist BoardAct, No. 10 of 1906, Section 2 of the Common Amenities Board 150Law, No. 10 of 1973 and Section 2(1) of the Ceylon ElectricityBoard Act, No. 17 of 1969 and stated that they have established theCeylon Tourist Board, Common Amenities Board and the CeylonElectricity Board, respectively. Learned Counsel for the petitioneraccordingly submitted that Section 2(1) of the statute in question,similarly established the Sri Lanka Transport Board and as thestructure of the aforementioned Boards are almost similar to thestructure of the Sri Lanka Transport Board and as those threeBoards under their respective statutes are bodies corporate, the SriLanka Transport Board also should be considered as a body 160corporate.
Section 2 of the Sri Lanka Transport Board Act refers to theestablishment of the Sri Lanka Transport Board and Section 3 ofthe said Act deals with the quorum for and procedure at themeetings of the Board. However, the Ceylon Transport Board Actand the Common Amenities Board Law are evidently quite different.
Sections 2 and 3 of the Ceylon Tourist Board Act, read as follows:
"2. There shall be established a public authority whichshall be called the Ceylon Tourist Board, and which
Sri Lanka Transport Board v Colombo Metropolitan
SCBus Company and others (Shirani Bandaranayake, J.)7
shall consist of the persons who are for the time170
being members of that Board under Section 6.
3. The Board shall, by the name assigned to it bySection 2, be a body corporate and shall haveperpetual succession and a common seal andmay sue and be sued in that name."
Sections 2 and 3 of the Common Amenities Board Law, toocontain similar provisions which are reproduced below.
"2. There shall be established a public authority whichshall be called the Common Amenities Board(hereinafter referred to as 'the Board') and which180
shall consist of the persons who are for the timebeing members of the Board under Section 8.
3. The Board shall by the name assigned to it bySection 2 be a body corporate and shall haveperpetual succession and a common seal andmay sue and be sued in such name."
The Ceylon Electricity Board Act also contains similarprovisions as in the Ceylon Tourist Board Act and the CommonAmenities Board Law.
Accordingly it is apparent that unlike the Sri Lanka Transport 190Board Act, the other enactments have specific provisions, whichhad created the respective Boards, as bodies corporate andtherefore it is evident that a Corporation and / or a Board cannot beregarded as a legal personality, if it is not expressly created by law.
Considering the basic principles which deals with bodiescorporate, it is thus apparent that, for the purpose of incorporation,there should be express provisions, which would reveal suchdesire for incorporation. This position was specifically stated byLord Morris in the Privy Council decision in The LandCommissioner v Ladamuttu PillaP), where the Privy Council had 200considered the Land Commissioner's liability to be sued and hadheld that,
"In the interpretation section (Section 2) it is laid down
that 'Land Commissioner means' the officer appointed
JiSri Lanka Law Reports[2008] 1 Sri L.R
by the Governor under Section 3 of this Ordinance andincludes any officer of this Department authorized byhim in writing in respect of any particular matter orprovision of this Ordinance." The Land Com-missioner is not expressly created a CorporationSole by any legislative enactment nor is it laid210
down that he may sue or be sued in a corporatename. Futhermore no legislative enactment seemsto reveal any intention to incorporate …. If therehad been a desire to incorporate the LandCommissioner there could have been expresswords of incorporation. Thus in the case of thePublic Trustee it is enacted by Section 3 of thePublic Trustee Ordinance of 1930 as follows:
"The Public Trustee shall be a Corporation sole underthat name with perpetual succession and an official220
seal and may sue and be sued under the above namelike any other Corporation sole."
All these considerations including the absence of anyevident intent to incorporate lead their Lordships toregret the submission that the Land Commissioner canbe regarded as a Corporation sole." (emphasisadded)
The contention of the learned Counsel for the petitionerregarding the objection raised by the learned President’s Counselfor the 3rd respondent was that under the present Sri Lanka 230Transport Board Act, a Board was established and the said Boardshould have the legal status of a body corporate in order toachieve the objects and purpose of the Act and that this objectivecould be achieved, on a consideration of the provisions containedin the previous enactments dealing with the Sri Lanka TransportBoard. It is however not disputed that the learned Counsel for thepetitioner made no reference to any direct provisions or to anyother provisions, which reveal the intention of the Sri LankaTransport Board to be a body corporate under the present Act. Inthe absence of any direct provisions or any intent to incorporate, it 240is evident that the Sri Lanka Transport Board, under the presentAct cannot be regarded as a body corporate.
Somasekaram v Lanka Bell (Pvt) Ltd.
SC1
Accordingly for the reasons aforementioned, I uphold thepreliminary objection raised by the learned President's Counsel forthe 3rd respondent and dismiss this application for special leave toappeal.
I make no order as to costs.
RAJA FERNANDO, J.- I agree.
ANDREW SOMAWANSA, J. – I agree.
Preliminary Objection upheld.
Application dismissed.