THE BANK OF CHETTINAD v. TEA EXPORT CONTROLLER

041-NLR-NLR-V-37-THE-BANK-OF-CHETTINAD-v.-TEA-EXPORT-CONTROLLER.pdf


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The Bank of Chettinad v. Tea Export Controller.
1935Present: Koch J.
THE BANK OF CHETTINAD v. TEA EXPORTCONTROLLER.
In the Matter of an Application for a Writ of Mandamus on theTea Export Controller.
Tea Control—Administrator of estate registered as proprietor—Agreement byBank to finance estate and to receive coupons—Application by heirs tobe registered as proprietors—Decision by Rubber Controller—Writ ofMandamus—Tea (Control of Export) Ordinance, No. 11 of 1933,s. 12 (2) and (.4).
Where the Tea Controller has decided the question who was entitledto be registered as the proprietor of an estate under section 12 (2) of theOrdinance his decision cannot be reviewed by a writ of mandamus.
A person, who has advanced money for the payment of debts and themaintenance of an estate under an arrangement by which he wasappointed agent to receive coupons, is not entitled to notice before adecision is given under the section.
Where a person who is aggrieved by a decision of the Controller failsto appeal to the Board of appeal under section 12 (4) of the Ordinance,the remedy by way of mandamus is not open to him.
T
i HIS was an application for a writ of mandamus on the Tea ExportController to compel him to issue coupons in respect of certain
tea estates to the petitioner, the Bank of Chettinad Ltd. The estatesBelonged to one Muttaiyapillai who died in 1928, leaving a widow andeight children of whom the eldest, Sadayapillai, obtained letters of adminis-
i 37 N. L. fi. 53.
The Bank of Chettinad v. Tea Export Controller.
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tration to the estate of his father. He was duly registered as the proprietorof the estate under the Tea (Control of Export) Ordinance.
Under an agreement with the Bank, the administrator undertook toconsign to the Bank all the tea crops of the estates and to deliver all thetea coupons that may be issued in respect of the estates in considerationof certain moneys advanced by the Bank for the purpose of maintainingthe estates. It was further agreed that the administrator should havethe Bank appointed and registered as the person entitled to the teacoupons under the Ordinance until the liquidation of the moneys due.
The petitioner complained that after the tea coupons had been issuedto him for some time, the Controller without notice to him had altered;the name of the registered proprietor by substituting the other co-heirs ofthe estate in place of the administrator, who’ was entered up to thattime as sole proprietor.
J.E. M. Obeyesekera, Deputy S.-G. (with him Wickramanayake,Acting C.C.), for the respondent.—A party applying for a writ ofmandamus must have a legal right to the performance of a legal dutyon the part of the person on whom the writ is asked (Ex parte Napier,1852, L. J. R. Q. B. 332 at 335). The petitioner to this applicationhas no such legal right. Under section 12 (2) of the Tea (Control ofExport) Ordinance the Controller is under a legal duty to decide whethera person or persons is or are entitled to be registered as proprietor orproprietors. Proprietor is defined in section 2 as the owner or lessee ofan estate and includes for the time being the person in charge of thatestate or any other duly accredited agent of such owner Therefore it isthat class of persons who come within the definition of proprietor in theOrdinance who have a legal right to the performance of the legal dutyimposed upon the Controller by section 12 (2). The petitioner claimsto be assignee of S who was the registered proprietor of the right to receivethe tea coupons. He does not therefore come within the definition of“ proprietor ” in the Ordinance.
The Controller has decided this matter within the meaning of section12 (2), and his decision, no matter however erroneous, cannot be reviewedby process of mandamus. (Samynathan v. Whitehom Board of Educationv. Rice', Rex v. The Mayor of StepneyKing v. Port of London-Authority ‘).
H. V. Perera (with him D. W. Fernando), for the petitioner.—Thepetitioner is the duly appointed agent of the registered proprietorto receive the tea coupons, and as such comes within the definition of“ proprietor ” in the Ordinance. The right to claim the performance of thelegal duty imposed by section 12 (2) of the Ordinance is available notmerely to the proprietor but also to any person interested. The petitionerat the lowest is a party interested. The Controller was aware of hisinterest and had expressly undertaken to issue the tea coupons to him.In these circumstances any decision under section 12 (2) should have beenmade after giving notice to the petitioner. No notice had been given tothe petitioner who had thereby been denied an opportunity of being heard.When the legislature imposes a duty on a person to decide a matter hei 35 N. L. R. 225.3 (1902) 1 K. B. D. 317.
= (1911) A. C. 179.4 (1919) 1 K. B. D. 176.
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KOCH J.—The Bank of Chettinad v. Tea Export Controller.
must give the other side an opportunity of being heard; otherwise thereis no decision or the decision is merely colourable. (Rex v. Housing AppealTribunalBoard of Education v. Rice Local Government Board v.Arlidge*, Spachman v. The Amerstead District Board of Works'. Amandamus will be to compel such person to hear the other side beforemaking his decision.
Obeyesekere, Deputy. S.-G., in reply.—The petitioner cannot makea legal demand for the coupons from the Controller under section26(1); it is only the registered proprietor who is entitled to
receive the coupons. If the Controller undertook to issue thecoupons to the petitioner it was only a concession. If the petitioner is aparty interested and he was aggrieved by the decision of the Controllerhe was entitled to appeal from that decision to the Board of Appealunder the provisions of section 12. The petitioner therefore cannotclaim any relief in an application by way of mandamus.
Cur. adv. vult.
September 24, 1935. Koch J.—
This is an application for a writ of mandamus on the Tea ExportController to compel him to issue tea coupons in respect of three teaestates to the petitioner on the footing of an alleged registration that is. said to have been in operation in the petitioner’s favour prior to May 11,1935. These estates, which are known as Manickawatte, Sinna Golconda,and Sinna Angoda, belonged to one Sadayan Kangany Muttaiyapillai.He died intestate in the year 1928, leaving as his heirs his widow andeight children.
The eldest of these children was S. M. Sadayapillai. He obtainedletters of administration in testamentary case No. 4,666 of the DistrictCourt of Kandy to the estate of his deceased father. All the other heirsconsented to the grant. He was therefore duly registered by the thenTea Export Controller as the proprietor of these estates, under the Tea(Control of Export) Ordinance of 1933.
Under a deed of agreement No. 941 of March 28. 1934, while theadministration in case No. 4,666 was proceeding, the aforesaid Sadaya-pillai in his capacity as administrator covenanted inter alia with thepetitioner, the Bank of Chettinad Ltd., to consign, forward, and deliverto the said Bank all the tea crops of the said estates and tea manufacturedfrom bought leaf in the factory of Manickawatte Group, and to endorseand deliver to them all tea coupons that may be issued in respect of thesaid estates and other tea coupons that the administrator may procure,purchase, or obtain to cover the sale of manufactured tea from bought leaf.The consideration for doing so was that the Bank should advance to theadministrator a sum not exceeding Rs. 30,000 on interest at the rate of8 per cent, per annum. There was a recital in the deed that these advanceswere required for the purpose of maintaining these estates and meetingtestamentary expenses.
In paragraph 4 of this deed it was also stated that * the contract ofagency hereby created shall commence on the date hereof and continuefor a period of not lsss than twelve months and shall not be determined
(1920) 3 K. B. 334.3 (1913) A. C. at 133 and 141.
(1911) A. C. 179 at 182.*10 A. C. 229 at 234 and 240.
KOCH J.—The Bank of Chettinad v. Tea Export Controller.
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until the said sum of Rs. 30,000 and other sums payable under this deedhave been duly recovered by the Bank
Another deed No. 946 of April 11, 1934, followed, which was for allpractical purposes to the same effect, except that after reciting thecovenants of the prior deed provision was made for the advance of furthersums over and beyond the sum of Rs. 30,000 previously stipulated.Paragraph 4 of this deed was to the effect that “ Sadayapillai in con-sideration of the sums lent and advanced doth hereby irrevocably constituteand appoint the said Bank the attorney of the said Sadayapillai for thepurpose of having itself registered as the person entitled to the tea couponsunder the Tea Restriction Ordinance and of having the said couponsissued to the said Bank ”. There was also in paragraph 3 the additionalrecital that the parties mutually agree that the tea coupons to be here-after issued be issued directly in the name of the Bank of Chettinad Ltd.from April 1, 1934, until payment and liquidation of moneys and interestdue.
The manager of the petitioner Bank has in his affidavit affirmed thatthe Bank has from time to time lent and advanced to the said Sadaya-pillai the sum of Rs. 30,000 and that there was due and owing at thedate of this petition a sum of Rs. 12,562.39, futher interest, and commission.
Certain certified copies of documents and correspondence that passedbetween the Tea Export Controller and the petitioner have been annexedto this application and are relied on to show that the position of thepetitioner had been recognized by the respondent, and that tea couponson this footing had been duly issued to the petitioner until the end ofApril, 1935. One letter (H) in particular has been emphasized by thepetitioner, whereunder the Tea Export Controller on February 16, 1935,in writing to the petitioner informed him that the writer had noted “toissue to you (petitioner) whatever coupons I (the Tea Export Controller)may issue between the period January 1, 1935, and December 31, 1936,in respect of the above estates ”.
The complaint of the petitioner is that in these circumstances, andafter tea coupons had been duly issued to him for some time, the Controllerwithout noticing him or holding an investigation wrote to him on May 11,1935 (letter I), informing him that Sadayapillai had been registered asthe proprietor of a 1/16 share only of the said estates, and that futurecoupons would therefore be issued to him for the said share only. This1/16 share, it will be noted, is- the precise share of the deceased’s estatethat Sadayapillai would be entitled to legally under the intestacy.
It is common ground that the administration of the intestate’s estatehad not been, and is still not, formally concluded.
Mr. H. V. Perera, counsel for the petitioner, argues that as his clientwas irrevocably appointed an agent by the administrator Sadayapillai toreceive tea coupons and to have them issued to him by the Controller,and as his client was entitled to these issues under a legal agreementwhereunder moneys were advanced to the administrator by his client forthe payment of the debts of the estate and for the maintenance of theaforesaid estates, and as the administrator was legally entitled to enterinto this agreement on behalf of the heirs of the estate, the Controller had
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KOCH J.—The Bank of Chettinad v. Tea Export Controller.
no authority to alter the register and substitute the names of the otherheirs as co-proprietors in the place of the name of the administrator whowas up to that time entered as sole proprietor.
On behalf of the Tea Export Controller objection is taken to the appli-cation on three grounds, which I briefly summarize from the argumentsaddressed to me by the learned Deputy Solicitor-General. They are: —
That under section 12 (2) of the Tea (Control of Export) Ordinance,
No. 11 of 1933, the Tea Export Controller had the right to alterthe name of the proprietors, that this was a matter in hisdiscretion, that he exercised this discretion, and whether right orwrong, his decision cannot be questioned by a proceeding suchas this.
That a grievance, if any, suffered by the petitioner should have
been made the subject of an appeal to the Board of Appealunder section 12 (4) of the Ordinance, and no relief thereforcan be claimed in an application by way of mandamus.
That the petitioner cannot be considered, as the result of the
agreement such as is pleaded, a “ proprietor ” under the defini-tion set out in section 2 of the Ordinance, and is therefore notvested with the necessary legal interest to make this application.
I am of opinion that the grounds of objection must prevail and the rulebe discharged with costs.
To deal with the first objection first, section 10 (1) provides for theController keeping a register of estates in prescribed form. Section 12 (1)lays down that the forms prescribed for the registers under section 10shall provide for the registration of the proprietor of each estate. The“ proprietor ” of an estate is defined in section 2, and section 12 (2)demands that when any question does arise as to whether a person orpersons is or are entitled to be registered as proprietor or proprietors,such question shall be decided by the Controller.
I think it is clear that such questions may arise in respect of estatesfrom time to time as the result of altered circumstances, e.g., on the deathof a registered proprietor, and decisions can correspondingly be made asoccasions arise.
Now, “ proprietor ” has been defined to mean the owner or lessee of anestate and includes for the time being the person in charge of that estateor any other duly accredited agent of such owner. To my mind, theperson in charge of an estate therefore means a person in the. characterof an agent in possession, e.g., a superintendent.
It follows that once the Controller is satisfied who the owners or thelessees are, he will have the right to register the name of an accreditedagent as proprietor, if satisfied that the owners or lessees have appointedthe latter an agent and are willing to have such agent’s name registered.accordingly. Finding that Sadayapillai was the legally appointedadministrator of Muttaiyapillai’s intestate estate, and that he was adminis-tering the said estate presumably with the consent of all the intestateheirs, the Controller had the right to enter Sadayapillai’s name in theregister as “ proprietor ”, which he did.
KOCH J.—The Bank of Chettinad v. Tea Export Controller.
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Under section 26 (1) of the Ordinance such registered proprietor wouldalone be entitled to receive from the Controller the tea coupons in respectof the estate of which he has been registered proprietor.
On grounds of convenience or otherwise the proprietor may deputesome other person to receive the coupons on his behalf. If the Controlleris satisfied with the authority he can make a note to issue the couponsthereafter to this person, but this is a concession. The “ proprietor ”may at any time direct the Controller to the contrary and request acessation of the issue to this other person. The Controller in that eventwould be obliged to act accordingly. It is no part of the duty of the Con-troller, nor has he the power, to enter into the equities of the countermand.
Therefore so long as the petitioner had authority from the adminis-trator—the registered owner—to receive the coupons, the Controllerunder the note he made saw to the issue of coupons to him as they fell due.' Exhibit C, dated April 11, 1934, is the letter whereunder the TeaController was informed that the petitioner “ had been appointed nomineefor the purpose of receiving further tea coupons to be issued hereafter inrespect of the above estates ”. This request was made to the Controllereven before copies of the agreements I have already referred to wereforwarded to him. The very next day, to wit, April 12, the Controllerreplied as follows:—“In reference to your letter dated April 11, 1934,I have to inform you that I have noted to issue future coupons in respectof the above estates to the Bank of Chettinad Ltd., Colombo ” (Exhibit D).
It will be seen that there is no reference to the receipt of the agreementspromised, and from the immediate reply of acquiescence that followed itwould transpire that the Controller exercised no discretion in the matterof a claim to receive coupons on the part of the Bank but merely agreedto obey the directions of the “ proprietor ”. Later in early 1935 copiesof the deeds of agreement were forwarded and also a letter (Exhibit E)informing the Controller that the petitioner “ was appointed by theproprietor his agent entitled to receive tea coupons ”. A letter ofauthority (F) containing an undertaking not to revoke the authoritysigned by the administrator was also forwarded to the Controller. There-after the petitioner received the letter H, which I have referred to before.
In the following month Mr. K. Namasivayam, Proctor, on behalf of hisclients eight in number, the co-owners of 15/16 of these estates, informedthe Tea Controller by letter, dated March 31, 1935, that these co-ownerswere entitled to have 15/16 of the tea coupons for these estates issued tothem (Exhibit J). He also mentioned that if necessary he would obtainand send in a declaration from Court that his clients were entitled to a15/16 share. This letter was accompanied by other letters, one of whichwas by the manager of these estates who was in actual charge of them onbehalf of the co-owners (Exhibit L). Exhibit L desired the Controllerin the event of rival claims to decide as to who the party entitled to thecoupons was after notice to the writer.
The Controller on April 3 (Exhibit M) wrote to Mr. Namasivayamthat the first provisional coupons for the year 1935 had already beenissued to Sadayapillai and the Bank of Chettinad. He desired to havethe declaration promised to enable him to take action. Sadayapillaiwas duly informed of this claim and further correspondence with
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KOCH .T.—The Bank oj Chettinad v. Tea Export Controller.
interviews followed which culminated in'the letter I. by the Controller to thepetitioner already referred to. It must be stated that Sadayapillai hadno objection to the claim of Mr. Namasivayam’s clients.
Mr. Perera argues that the Controller, in acting as he did, did not decidein the manner contemplated by the Ordinance, that is to say, he exercisedno discretion but automatically so to speak substituted one set of namesfor another; that his client the petitioner was not even noticed and theassent of Sadayapillai to the Controller’s recognition of the claims of theoutstanding co-owners was a fraudulent act.
Now, it is the law that where the proper office or tribunal determinesa matter within his jurisdiction and in doing so exercises his discretion,his decision, no matter however erroneous, cannot be reviewed by processof mandamus, but if there is a refusal to perform his duty or exercise hisjurisdiction or discretion on the question before him, the case would bedifferent. (Vide Samynathan v. WhitehomBoard oj Education v. Riceet al. *, Rex v. The Mayor of Stepney *, King v. Port of London Authority
It is contested on behalf of the petitioner that he was a party interestedand that he should have been noticed and given a hearing before the ordercomplained of was made. The case of Local Government Board v. Arlidge *was cited in support. In this case the borough council made a closingorder under section 17 of the Housing and Town Planning Act, 1909.The respondent was the assignee of a lease of the house, the use forhabitation of which was prohibited. The respondent thereupon appealedto the Local Government Board. The Board deputed an Inspector tohold a local inquiry. The respondent was noticed to appear before theInspector. The Inspector duly submitted to the Board his report.The Board thereupon decided the appeal on the report of the Inspectorand on other documents before it. The respondent was not given anopportunity of being heard orally before the Board. The respondentnext applied to the King’s Bench Division for a writ to quash this decisionon the ground that the appeal, had not been determined in mannerprovided by law. The Divisional Bench held against the respondent whoappealed to the Court of Appeal. The Court of Appeal took a differentview and reversed this decision of the Divisional Bench. The Boardthereupon appealed to the House of Lords. _The House of Lords was ofopinion that the Court of Appeal was wrong, reversed its decision andrestored the order of the Divisional Bench. The House of Lords wentparticularly into the provisions of the Housing Act and decided that theBoard acted in order in deputing the Inspector to hold an inquiry, beforewhom the respondent had the opportunity of presenting his case, andthat the Board was also justified in determining the appeal before itwithout hearing the respondent orally. Viscount Haldane said “ I donot think the Board was bound to hear the respondent orally, providedit gave him the opportunities he actually had ”. It would appear thatthe respondent in this case was an interested party under the Housing Actand that he had a right to be heard at some stage of the proceedings.
Is the present petitioner in a similar position? It is argued that theadministrator had the right to borrow money for the purpose of paying
35 N. R. 225.3 11902) 1 K. B. D. 317.
(1911) A. C. 179.* 11919) 1 K. B. D. 176.
(1915) A. C. 120.
KOCH J.—The Bank of Chettinad v. Tea Export Controller.
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off the debts of the estate even without consent of Court and the creditorwould in the circumstances have a right to recover from the estate. Iagree. The deed No. 941 recites that money was to be lent for thispurpose, but the deed also recites that money was to be lent for the mainte-nance of the estates. In regard to a borrowing on this latter accountI am not so sure that the borrowing could be effected without permissionof Court. However this may be, does such an agreement constitute thelender of money a party interested in the contemplation of the Tea(Control of Export) Ordinance for the purposes of a decision under section12 (2) ? I am of opinion not, even though under the agreement the lenderwas appointed an agent irrevocably to receive the tea coupons of the estate.
The Tea Controller is concerned—under the definition of “ proprietor ”in the Ordinance—with owners, lessees, and agents in possession. Thepetitioner is not such a person and was therefore not entitled to notice.To apply for a writ of mandamus a party must have a right and the rightmust be a legal right—Exparte Napier (1852) L. J. R. Q. B. 332 at p. 335.
If there is substance in the argument that he was a person legallyinterested and therefore aggrieved by the Controller’s decision, he shouldhave appealed to the Board of Appeal under section 12 (4) of the Ordi-nance. The notification No. 7,993 published in the Government Gazetteof July 21, 1933, rule 2 says that in the case of any assessment, decision, ororder an appeal may be preferred to this Board. This he failed to do,and having failed to take advantage of the remedy prescribed, he isdebarred from proceeding by way of mandamus. There is ample author-ity for this proposition (Samynathan v. Whitehom (supra), King v. Port ofLondon Authority Rex v. The Mayor of Stepney ’).
The Controller before he altered the register had material before himon which he acted. He had previously issued tea coupons to the peti-tioner on the directions of the administrator, who was prima faciecontrolling the intestate estate for the purposes of administration andsupposed to be in possession. The title nevertheless to estate propertyis in the heirs subject to the payment of the debts of the estate. Theadministrator was not in physical possession of the properties of theestate. The documents and affidavits show that one T. L. S. Sunderamwas in actual possession on behalf of the heirs. The Controller under theOrdinance is concerned with possession and incidentally ownership—Samynathan v. Whitehom*. In his affidavit the Controller says that“ after due inquiry he was satisfied that Sadayapillai was only entitledto a 1/16 share and that the other co-owners were entitled to the balance15/16 and he thereupon altered his register ”. It is no part of his dutyto enter upon the legal intricacies of the rights of third parties who havebrought themselves into financial contractual relations with the partieslegally entitled. Such questions must be settled in a Court of law ofproper jurisdiction.
The Controller has not failed to exercise his discretion, nor has herefused to perform a duty he was legally bound to do.
I discharge the rule with costs.
Rule discharged.
1 (1919) 1 K. B. D. 170 at 187 and 188.a (.1902) 1 K. B. D. 317.
* 35 .V. I.. /?. 223 at p. 230.