STATE GEM CORPORATION

(1) There shall be established a Corporation which shall be called the ” State Gem Corporation”, in this Act referred to as ” the Corporation”, and which shall consist of the persons who are for the time being members of the Corporation under section 3.

(2) The Corporation shall by the name assigned to it by subsection (1) be a body corporate, and shall have perpetual succession and a common seal and may sue and be sued in such name.

(1 ) The Corporation shall consist of-

The members shall be appointed or nominated from among persons, who are qualified for membership of the Corporation.

(2) A person shall be disqualified for being appointed or continuing as a member of the Corporation-

(3) Where a member of the Corporation is a shareholder (other than a director) in any incorporated company which has entered into any contract with, or is doing any work for, the Corporation, he shall disclose to the Minister in charge of the subject of Finance the nature and extent of the shares held by him in such company.

(4) The appropriate Minister may, without assigning any reason, remove a member of the Corporation from office. Such removal shall be final and conclusive, and shall not be called in question m any court.

(5) A member of the Corporation who has been removed from office shall not be entitled to compensation for any loss or damage suffered by him, directly or indirectly, by reason of such removal.

(6) A member of the Corporation may at any time resign his office by letter addressed to the appropriate Minister.

(7) Where a member of the Corporation is temporarily unable to discharge or perform the functions or duties of his office by reason of illness or other infirmity or absence from Sri Lanka, or for any other cause, the appropriate Minister may appoint or nominate, as the case may be, some other person who is qualified to be a member of the Corporation to act in his place as such member.

(8) A member of the Corporation shall vacate his office by death, removal, resignation or effluxion of time.

(9) A member of the Corporation shall, unless he earlier vacates his office by death or removal or resignation, hold office for a period of five years:

Provided, however, that any such member appointed or nominated in place of a member of the Corporation who has vacated his office otherwise than by effluxion of time shall, unless he earlier vacates his office by death or removal or resignation, hold office only for the unexpired part of the term of office of the member whom he succeeds.

(10) No act or proceeding of the Corporation shall be invalid by reason only of the existence of a vacancy among its members, or any defect in the appointment or nomination of a member thereof.

(11) In this section, “appropriate Minister ” in relation to a member of the Corporation, means the Minister by whom that member was appointed or nominated.

(1) Subject to the provisions Of subsection (3), the Corporation may employ all such persons as may be necessary for carrying out the work of the Corporation.

(2) The employees of the Corporation shall be remunerated in such manner and at such rates, and shall be subject to such conditions of service, as may be determined by the Corporation. Such remuneration shall be paid by the Corporation.

(3) No person shall be employed, or continue to be employed, by the Corporation-

(1) The Corporation may delegate to any member or employee of the’ Corporation any of its powers, functions or duties.

(2) Every delegate appointed under subsection (1) shall exercise, discharge or perform the power, function or duty delegated to him subject to the general or special directions of the Corporation.

(1) The Minister in charge of the subject of Finance shall appoint a Chairman of the Corporation from among the members of the Corporation.

(2) If the Chairman is by reason of illness or other infirmity or absence from Sri Lanka, or for any other cause whatsoever, unable to perform the duties of his office, the Minister in charge of the subject of Finance may appoint one of the members of the Corporation to act in his place.

(3) The Minister in charge of the subject of Finance may, without assigning any reason, terminate the appointment of the Chairman. The termination of the office of the Chairman shall be final and conclusive, and shall not be called in question in any court.

(4) The Chairman may resign the office of Chairman by letter addressed to the Minister in charge of the subject of Finance.

(5) Subject to the provisions of subsection (3) or subsection (4), the term of office of the Chairman shall be the period of his membership of the Corporation.

(1) The seal of the Corporation shall be in the custody of the Corporation.

(2) The seal of the Corporation may be altered in such manner as may be determined by the Corporation.

(3) The seal of the Corporation shall not be affixed to any instrument or document except in the presence of two members of the Corporation both of whom shall sign the instrument or document in token of their presence.

(1) The Minister in charge of the subject of Finance may give the Corporation general or special directions in writing as to the exercise, discharge and performance of the powers, functions and duties of the Corporation, and the Corporation shall give effect to such directions.

(2) The Minister in charge of the subject of Finance may from time to time direct the Corporation to furnish to him in such form as he may require, returns, accounts and other information with respect to the property and business of the Corporation and the Corporation shall carry out every such direction.

(3) The Minister in charge of the subject of Finance may from time to time order all or any of the activities of the Corporation to be investigated and reported on by such person or persons as he may specify, and upon such order being made the Corporation shall afford all such facilities and furnish all such information as may be necessary to carry out the order.

(1) The Corporation shall have the following functions:-

(2) The Corporation shall in accordance with by-laws made in that behalf under this Act, be the sole authority responsible for the issue of licenses to carry on the gem industry, whether such industry is or is not carried on in or over any State or private land. The preceding provisions of this subsection shall have effect notwithstanding anything to the contrary in any other written law.

(3) Every licence issued under the Gemming Ordinance, No. 5 of 1890, and in force on the day immediately preceding the appointed date, shall be deemed for all purposes to be a licence issued by the Corporation and the Corporation may amend or modify the terms and conditions of such licence or may, in addition to the terms and conditions of the licence, add further terms and conditions.

(4) Every lease under the State Lands Ordinance of the right to mine or gem in any State land or in any land which has been disposed of by the State with a reservation of mining rights in favour of the State shall, if such lease is in force on the day immediately preceding the appointed date, be deemed for all purposes to be a lease granted by the Corporation and the Corporation may vary the terms and conditions subject to which the lease was granted or may, in addition to the terms and conditions of such lease, add further terms and conditions.

(1) Every person who mines for gems on State land, whether under the authority of a licence issued or deemed to have been issued by the Corporation or under the authority of a lease granted or deemed to have been granted by the Corporation, shall deliver to the Corporation any gems obtained by him from such State land.

(2) Where any gem is delivered to the Corporation under subsection (1), the Corporation may-

(3) Where any gem delivered to the Corporation under subsection (1) is purchased by the Corporation or is sold to any other person as a result of arrangements made by the Corporation, the Corporation shall retain as its ground share a prescribed proportion of the proceeds of the sale of such gem.

(4) Where the Corporation declines to purchase, and to make arrangements to sell, any gem delivered to the Corporation under subsection (1), the Corporation shall return such gem to the person who delivered it to the Corporation together with a document stating that the Corporation has declined to purchase, and to make arrangements for the sale of, such gem.

(5) No person shall purchase from any other person any gem obtained by such other person by mining on State land whether under the authority of a licence issued or deemed to have been issued by the Corporation or under the authority of a lease granted or deemed to have been granted by the Corporation unless the Corporation has declined to purchase such gem and to make arrangements for its sale.

(1) Subject to the provisions of subsection (3), the right to carry on business as an importer or exporter of gems into or from Sri Lanka is hereby vested exclusively in the Corporation, and accordingly-

(2) In the exercise of the exclusive right conferred on it by subsection (1), the Corporation may import or export gems into or from Sri Lanka not merely on its own behalf, but also for or on behalf of any other person.

(3) The import or export of gems into or from Sri Lanka by any person, other than the Corporation, shall be deemed not to be a contravention of the provisions of subsection (1), if, but only if, such import or export is under the authority, and in accordance with the terms or conditions, of any Order which the Minister in charge of the subject of Finance is hereby authorized, from time to time, to make and publish in the Gazette.

(4) No person shall be entitled to compensation for any loss incurred by him, whether directly or indirectly, or by way of business or otherwise, by reason of his licence authorizing him to import or export gems becoming invalid and of no effect by virtue of the operation of the preceding provisions of this section.

(5) Any person who, even on one occasion only, imports or exports any gem into or from Sri Lanka shall, for the purposes of this Act, be deemed to carry on the business of an importer or exporter, as the case may be, of gems into or from Sri Lanka.

(6) The import or export of gems into or from Sri Lanka by any person through the Corporation shall be deemed not to be a contravention of the provisions of subsection (1).

(1) The Minister in charge of the subject of Finance may, subject to provisions of subsection (2), by Order published in the Gazette transfer to the Corporation any immovable property of the State required for the purposes of the Corporation.

(2) No immovable property of the State shall be transferred to the Corporation under subsection (1) without the prior concurrence of the Minister to whom the subject of State Lands is for the time being assigned.

(3) Upon the publication of an Order under subsection (1) in the Gazette, the properties specified in the Order shall vest in and be the properties of the Corporation.

(a) acquire and hold any movable or immovable property, and dispose of any movable or immovable property acquired or held by it so, however, that no such immovable property shall be so disposed of without the prior approval of the Minister in charge of the subject of Finance;

(b) establish its own departments or agencies, or make contracts or other arrangements with Government Departments, local authorities or any other person; and

(c) do all such other acts or things whatsoever as may be necessary for that purpose.

(1) The Corporation may make rules in respect of all or any of the following matters-

(2) No rule made under subsection (1) shall have effect until it has been approved by the Minister in charge of the subject of Finance.

(1) The Corporation may, with the concurrence of the Minister in charge of the subject of Finance, make by-laws for or in respect of all or any of the following matters:-

(2) Without prejudice to the generality of the powers conferred by subsection (1), the Corporation may. with the concurrence of the Minister in charge of the subject of Finance, make by-laws for or in respect of all or any of the following matters :-

(3) In particular, but without prejudice to the generality of the powers conferred by subsection (1) or subsection (2), by-laws made in respect of the issue of licenses may prohibit the issue of such licenses until the prospective licensee has, if called upon so to do by the Corporation, furnished to the Corporation, cash security of such an amount, not exceeding the maximum amount prescribed by by-law, as may be determined by the Corporation to be necessary for the purpose of ensuring his compliance with the terms and conditions of his prospective licence, and the provisions of this Act and the by-laws made thereunder.

Different amounts of cash security may be demanded by the Corporation from prospective licensees of different classes or descriptions so, however, that the amount so demanded shall not exceed the maximum amount hereinbefore referred to.

(4) By-laws made under this Act in respect of the issue of licenses may, inter alia, provide-

(5) By-laws made under this Act in respect of the issue of licenses may, inter alia, provide for the issue of special licenses to carry on only any such trade or business constituting such industry as shall be specified in the licence.

(6) By-laws made under this Act in respect of fees for licenses may provide for the imposition of such fees at different rates in the case of licenses of different classes or descriptions.

(7) Every by-law made by the Corporation, with the concurrence of the Minister in charge of the subject of Finance, shall be published in the Gazette and shall come into operation on the date of such publication, or on such later date as may be specified therein.

(8) Every by-law made by the Corporation with the concurrence of the Minister in charge of the subject of Finance shall, as soon as convenient after its publication in the Gazette, be brought before Parliament for approval. Any by-law which is not so approved shall be deemed to be rescinded as from the date of disapproval, but without prejudice to the validity of anything previously done thereunder.

(1) The initial capital of the Corporation shall be fifty million rupees and such capital shall consist of grants or loans given or made available by the Government on such terms and conditions as may be determined by the Minister in charge of the subject of Finance.

(2) The amount of the initial capital of the Corporation shall be paid to the Corporation in such installments as may be determined by the Minister in charge of the subject of Finance.

(3) The capital of the Corporation may be increased from time to time by such amount as may be authorized by any Appropriation Act or by resolution of Parliament and that amount shall be paid or made available to the Corporation by the Government by way of grant or loan on such terms and conditions as may be determined by the Minister in charge of the subject of Finance.

(4) The capital of the Corporation contributed by the Government by way of grants shall not be reduced except in such manner as may be determined by resolution of Parliament.

(a) the working and establishment expenses of the Corporation in connexion with the exercise and performance of its powers, duties and functions, properly chargeable to revenue account;

(b) allocations to cover the depreciation of the movable and immovable property of the Corporation;

(c) the interest on any loans raised by the Corporation under the provisions of this Act;

(d) any losses incurred in the sale of capital assets;

(e) income tax.

(1) The net surplus revenue for any year, if any, out of the revenue of the Corporation after defraying the charges mentioned in section 25, may be appropriated by the Corporation for any or all of the following purposes with the approval of the Minister in charge of the subject of Finance:-

(2) No debits against or transfers out of the reserves mentioned in subsection (1) shall be made by the Corporation except with the approval of the Minister in charge of the subject of Finance.

(3) All sums remaining out of the net surplus revenue of the Corporation in any year after the appropriations mentioned in subsection (1) have been satisfied shall be paid to the Deputy Secretary to the Treasury to be credited to the Consolidated Fund.

(1) The Corporation shall cause proper accounts of the income and expenditure and of all the other transactions of the Corporation to be kept, and shall prepare an annual statement of accounts and statistics relating to the business of the Corporation in such form and containing such particulars as the Minister in charge of the subject of Finance may from time to time specify. The financial year of the Corporation shall be the period of twelve months commencing on the first day of January,

(2) The books and the accounts of the Corporation shall be kept at the head office of the Corporation.

(1) The accounts of the Corporation for each financial year shall be submitted to the Auditor-General for audit within four months of the close of the financial year. For the purpose of assisting him in the audit of such accounts, the Auditor-General may employ the services of any qualified auditor or auditors who shall act under his direction and control.

(2) For the purpose of meeting the expenses incurred by him in the audit of the accounts of the Corporation, the Auditor- General shall be paid by the Corporation such remuneration as the Minister in charge of the subject of Finance may determine. Any remuneration received from the Corporation by the Auditor-General shall, after deducting any sums paid by him to any qualified auditor or auditors employed by him for the purposes of such audit, be credited to the Consolidated Fund.

(3) The Auditor-General and any person assisting the Auditor-General in the audit of the accounts of the Corporation shall have access to all such books, deeds, contracts, accounts, vouchers and other documents of the Corporation as the Auditor-General may consider necessary for the purposes of the audit, and shall be furnished by the Corporation and officers of the Corporation with such information within their knowledge as may be required for such purposes.

(4) The Auditor-General shall examine the accounts of the Corporation and furnish a report-

(5) The Auditor-General shall transmit his report to the Corporation within four months of the receipt of the accounts of the Corporation.

(6) For the purposes of this section, the expression ” qualified auditor” means-

(1) The Corporation shall, as soon as possible after the end of each financial year of the Corporation, prepare a report on the exercise, discharge and performance by the Corporation of its powers, functions and duties during that year and on its policy and programme. Such report for any year shall set out any direction given by the Minister in charge of the subject of Finance to the Corporation during that year.

(2) The Corporation shall, on receipt of the Auditor-General’s report in respect of any year, cause a copy of each of the following documents relating to that year to be transmitted to the Minister in charge of the subject of Finance :-

(3) The Minister in charge of the subject of Finance shall lay copies of the documents transmitted to him under subsection (2) before Parliament before the end of the year next following the year to which such report and accounts relate.

(4) The Corporation shall cause copies of the report of the Corporation and of the Auditor-General’s report and statement of accounts and statistics referred to in subsection (2) to be printed at the expense of the Corporation and to be made available for purchase by the public at such price as shall be determined by the Corporation.

(1) There shall be a fund which shall be called the Gem Reward Fund (in this Act referred to as ” the reward fund “).

(2) The Corporation shall be responsible for the administration of the reward fund.

(3) There shall be credited to the reward fund all fines and penalties paid or recovered under this Act, the proceeds of the sale of all articles which are forfeited to the Republic under this Act, and all donations made to such fund.

(4) The Corporation may, from time to time, pay out of the reward fund a reward-

except with the prior concurrence of the Minister in charge of the subject of Finance, exceed the sum fixed as the maximum limit of rewards by by-laws which are hereby authorized to be made for that purpose under this Act.

(5) Such amounts, out of the balance moneys remaining in the reward fund after the payments referred to in subsection (4) have been made, as may be determined from time to time by the Minister in charge of the subject or Finance, may be transferred by the Corporation from that fund to the funds of the Corporation.

(6) The accounts of the reward fund shall be audited annually by the Auditor-General-

(a) enter and inspect any place in which the gem industry is being carried on under the authority of a licence issued under this Act, or in which he has reason to believe such industry is being carried on without the authority of such licence; or

(b) stop, enter and inspect any vehicle or vessel in which he has reason to believe any gems are being transported or imported or exported in contravention of the provisions of this Act or any bylaws made thereunder,

(c) search for gems in such place, vehicle or vessel;

(d) examine any records maintained under this Act and take copies of such records; and

(e) search for any books, registers, records or other documents which in his opinion will be necessary or useful for the prosecution of any person for an offence under this Act, to examine and place marks of identification on such books, registers, records or other documents and to make extracts or copies therefrom.

(1) Any authorized officer of the Corporation may, if he has reason to believe that any offence under this Act has been or is committed, seize and detain-

(2) Where any authorized officer of the Corporation seizes any article under subsection (1), such article shall be kept in the custody and control of the Corporation pending its disposal as hereinafter provided.

(3) Any person aggrieved by the seizure of any article by any authorized officer of the Corporation under subsection (1) may, within a period of thirty days after the date of such seizure, make an application in writing against such seizure to any District Court within the local limits of whose jurisdiction such seizure was effected.

(4) Where-

(a) the name of the District Court and the date of the making of the application to the Court;

(b) the name and address of the authorized officer of the Corporation;

(c) a plain and concise statement of the matter which has to be determined by the Court, namely, that the seizure of the article, which is the subject-matter of the application, by such officer under subsection (1) of section 32 was unlawful as there was no ground for such seizure under that subsection,

and accordingly that the Court shall determine-

(1) The proceedings in any District Court on any application made to it under section 32 shall be subject to the procedure provided by the Civil Procedure Code for civil suits.

(2) No stamp duty shall be required for any proceedings referred to in subsection (1).

(3) All such proceedings in any District Court as are referred to in subsection (1) shall be taken up before any other business of that Court unless special circumstances of urgency in such other business render it impossible to do so.

(4) In making any determination allowing an application under section 32 in respect of any article a District Court shall direct the Corporation to forthwith return such article to the plaintiff, and it shall be the duty of the Corporation to comply with that direction.

(5) The determination of a District Court on any application made to it under section 32 shall be final,

(1) The District Court to which an application is made under section 32 may award to any party to the application an amount determined by that Court as the costs of the proceedings relating to that application.

(2) All such costs awarded to any authorized officer of the Corporation under subsection (1) may be recovered in like manner as if they were costs incurred in a civil suit.

(a) any authorized officer of the Corporation in the exercise of his power of entry, inspection, search or seizure conferred on him by this Act, or

(b) any employee of the Corporation in the exercise, discharge or performance of any power, function or duty conferred or imposed on him by this Act or any by-law or regulation made thereunder.

(1) The Minister in charge of the subject of Finance may make regulations for or in respect of any matter for which regulations are authorized to be made.

(2) Every regulation made by the Minister in charge of the subject of Finance shall be published in the Gazette and shall come into operation on the date of such publication, or on such later date as may be specified in the regulation.

(3) Every regulation made by the Minister in charge of the subject of Finance shall, as soon as convenient after its publication in the Gazette, be brought before Parliament for approval.

(1) Any offence under this Act committed by any person may be compounded by the Corporation upon the payment by such person of a penalty not exceeding such amount as may be determined by the Corporation, being an amount not exceeding five times and not less than twice the maximum fine which may be imposed for that offence.

(2) Where an offence under this Act committed by any person is compounded by the Corporation under subsection (1), no prosecution for that offence shall be instituted or maintained against that person.

(1) Any person who contravenes the provisions of this Act or any by-law or regulation made thereunder shall be guilty of an offence under this Act and, if no other punishment is expressly provided by or under this Act for such offence, shall, on conviction after summary trial before a Magistrate, be liable to imprisonment of either description for a period of not less than one month or to a fine of not less than five hundred rupees, or to both such imprisonment and fine.

(2) By-laws may be made under this Act prescribing the punishments, other than the punishments referred to in subsection (1), which may be imposed in respect of offences under this Act committed by reason of a contravention of any of the provisions of any by-law.

(1) Any article forfeited to the Republic under this Act or under any by-law or regulation made thereunder shall be delivered to the Corporation.

(2) Any article delivered to the Corporation under subsection (1) shall be disposed of as soon as conveniently may be after the delivery thereof, in accordance with such directions as may be issued in that behalf by the Minister in charge of the subject of Finance.

(1) In any proceedings under this Act in respect of any article purporting to be a gem of any particular class or description, a document purporting to be a certificate issued under the hand of the Chairman of the Corporation, or any other member or officer of the Corporation authorized in that behalf by such Chairman, to the effect that such article is a gem of that class or description and that such proceedings are in respect of such article may be used as evidence in such proceedings, and shall be prima facie evidence of the facts stated therein until the contrary is proved.

(2) A court may presume that the signature of the document referred to in subsection (1) is genuine and that the person signing it held the office he professed to hold at the time of signing it, and accordingly such person need not be called as a witness to prove such document.

(1) No Suit or prosecution shall lie-

(2) Any expenses incurred by the Corporation in any suit or prosecution brought by or against the Corporation before any court shall be paid out of the moneys of the Corporation, and any costs paid to, or recovered by, the Corporation in any such suit or prosecution shall form part of the moneys of the Corporation.

(3) Any expenses incurred by any such person as is referred to in paragraph (b) of subsection (1) in any suit or prosecution brought against him before any court in respect of any act which is done or purports to be done by him under this Act or on the direction of the Corporation shall be paid out of the moneys of the Corporation, unless such expenses are recovered by. him in such suit or prosecution.

(1) In this Act, unless the context otherwise requires-

” appointed date ” means the 1st day of November, 1971;

” Chairman ” means the Chairman of the Corporation;

” company ” has the same meaning as in the Companies Ordinance *;

“gem” includes a precious stone or a semi-precious stone, and a product of any gem or any such stone;

” gem industry” means any trade or business of all or any of the following classes or descriptions:-

” local authorities” includes Municipal Councils, Urban Councils, Town Councils or Village Councils;

” public officer” means any person holding a paid office under the Republic in respect of the Government of Sri Lanka;

” scheduled written law” means the provisions of written law for the time being specified in the Schedule to this Act.

(2) For the purposes of this Act, a person shall be deemed to carry on the gem industry if he carries on all or any of the trades or businesses of the classes or descriptions which constitute that industry within the meaning of this Act.

(3) For the purposes of this Act, the expression ” officer authorized by the Corporation”, in relation to either or both sections 31 and 32 or any context connected therewith or incidental thereto, means any officer of the Corporation authorized by the Corporation to act under either or both such sections, as the case may be.