Ceylon Insurance Company Ltd. v. Perera
1971 Present: H. N. G. Fernando, C.J., and Samerawickrame, J.
THE CEYLON INSURANCE COMPANY LTD., Petitioner, andE. V. PERERA and others, Respondents
S. G. S7d-SS0/70—Applications for mandates in the nature of Writs ofCertiorari and Prohibition on E. V. Perera and others
Industrial Disputes Act (Cap. 131)—Section 31 B (3)—Expression “ proceedingsunder any other law" thcreiti—Whethcr proceedings under ChapterXII oj theCriminal Procedure Code Jail under that expression—Criminal ProcedureCode, ss. 121 (2), 126, 127, 129, 131, US (1) (b), 150.
The petitioner-Coinpany terminated the services of some of their workmon(the respondents) on tho ground that certain Police investigations that weropending in regard to their conduct showed that there was reason to suspectthat each of them was “ party to misappropriation of funds belonging to theCompany”. Thereupon the respondents made applications to a LabourTribunal seeking reinstatement or compensation, bock wages, gratuity, etc.Tho Company took objection that the Labour Tribunal had no power to hearthe applications while the investigation which was being conducted by thePolice, presumably by virtuo of on order from a Magistrate under section 129of the Criminal Procedure Code, was still pending. The objection was basedon section 31 B (3) of tho Industrial Disputes Act which reads as follows :—
“Where an application under subsection (1) relates—
to any matter which, in the opinion of the tribunal, is similar to oridentical with a matter constituting or included in an industrial dispute towhich tho omployor to whom that application relates is a party and intowhich an inquiry under this Act is held, or
to any matter the foots affecting which ore, in tho opinion of thetribunal, facts affecting any proceedings under any other law, the tribunalshall make order suspending its proceedings upon that application untilthe conclusion of the said inquiry or the said proceedings under any otherlaw, and upon such conclusion tho tribunal shall resume the proceedingsupon that application and shall, in making an order upon that application,have regard to the award or decision in the said inquiry or tho saidproceedings under any other law. ”
The objection taken by the Company was overruled by the President of theLabour Tribunal. The present application for Writs of Prohibition were madefor the purpose of challenging the correctness of the President’s orders.
Held, that section 31 B (3) of tho Industrial Disputes Act contemplates thatproceedings beforo a Labour Tribunal must be suspended only if there arepending some other proceedings in which an award or decision having legaleffect will or can be made. An investigation under Chapter XII of the CriminalProcedure Code is not a proceeding con'templated in the Section.
APPLICATIONS for Writs of Prohibition directing the Presidentof a Labour Tribunal not to proceed- with the hearing of certainapplications made by workmen to the Tribunal under the IndustrialDisputes Act.
664 H. N. G. FERNANDO, C.J.—Ceylon Insurance Company Ltd. Perera
W. Jayewardene, Q.G., with Neville Samarakoon, Q.C., SamP.G.Fernando and Miss U. J. Kurukulasuriya, for the petitioner in eachApplication.
L. V. R. Fernando, for the 1st respondent in Application No. 874.Priiis Rajasooriya, for the 1st respondent in Application No. 875.
K.Shanmugalingam, for the 1st respondent in Applications Nos. 877and 880.
F. B. Wikranianayake, Senior Crown Counsel, with F. Mustapha,Crown Counsel, on notice.
Our. adv. vult.
November 10, 1971. H. N. G. Fernando, C.J.—
These are applications for Writs of Prohibition directing the Presidentof a Labour Tribunal not to proceed with the hearing of certainapplications made by workmen to the Tribunal under the IndustrialDisputes Act.
These workmen were in the employment of the present petitioner,the Ceylon Insurance Company Limited (hereinafter referred to as“ the Company ”) for periods prior to July 1967. At tha^ stage, it isalleged, the Company discovered a loss of funds in its Life Department,in which these workmen (hereinafter referred to as “the respondents ”)had been employed. On 12th July, 1967, the Company served on therespondents notices stating that investigations into the loss of funds werebeing made and that for the purposes of the inquiry it was necessary tointerdict the respondents from their employment. The notices ofinterdiction stated however that until further notice their salaries wouldbe paid.
It appears also that sometime before April 196S the Criminal Investi-gation Department (C.I.D.) had conducted inquiries into the allegedloss of funds, and that on 22nd April 1968 the Superintendent of Police,C.I.D., informed the Company that authority from Court had beenobtained to investigate the case. This presumably was a reference toan order from a Magistrate under s. 129 of the Criminal ProcedureCode which was necessary because the offences suspected to have beencommitted were non-cognisable. The Siiperintcndent’s letter alsoinformed the Company that “ inquiries so far conducted disclose that alarge scale fraud has been practised in the Life Department
On 2nd May 1968 the Company informed each of the respondentsthat “ it is clear from the present stage of investigations that you havebeen party to a misappropriation of funds belonging to the Company ”and that his conduct “ amounts in fact and in law to a repudiation byyou of your contract of service with the Company which you have thus
H. >7. G. FEBN'AXDO, C-J.—Ceylon Insurance Company Lid. Pcrcra
terminated”. On 6th May 195S each of the respondents made hisapplication to the Labour Tribunal seeking the relief of reinstatementor compensation, back wages, gratuity, etc.
In its “answers ” filed on 4th July 1968, the Company re iteratedthe position stated on 2nd May 196S that the conduct of the respondentsamounted in fact and in law to a repudiation of their contracts of service,and that the action of the Company was justified. On these and similargrounds the Company prayed for the dismissal of the applications.
I note at this stage however, that in these answers the Company didnot set up an objection which the Company subsequently took when theapplications were taken up for inquiry by the President of the Tribunal,Mr. Rasanajmgam on 1st October 1968. That objection was unders. 31 B (3) :—
“ (3) Where an application under subsection (1) relates—
to any matter which, in the opinion of the tribunal, is
similar to or identical with a matter constituting orincluded in an industrial dispute to which the employerto whom that application relates is a party and intowhich an inquiry under this Act is held, or
to any matter the facts affecting which are, in the opinion
of the tribunal, facts affecting any proceedings underany other law,
the tribunal shall make order suspending its proceedings upon thatapplication until tho conclusion of the said inquiry or the saidproceedings under any other law, and upon such conclusion the tribunalshall resumo the proceedings upon thatjapplication and shall, inmaking an order upon that application, have regard to tho award ordecision in the said inquiry or the said proceedings under anyother law. ”
On 23rd March 1969 Mr. Rasanayagam made order holding that“ the Police Investigations cannot be considered to mean proceedingsunder any other law ” within the meaning of s. 39 (3) and over-ruledthe objections taken up by the Company. Mr. Rasanayagam furtherordered that the applications will be called on 14th April 1969 to fixdates for trial.
It appears that before the applications were again called, Mr. Rasa-nayagam had been transferred from the office of President of this Tribunalbut that he was nevertheless prepared to continue the inquiry. ButCounsel for tho Company then informed the President “ that there was a •large volume of evidenco to be placed before the Tribunal and as such thePresident will have to come down from Kandy several times to inquireinto these applications ”. Thereupon Mr. Rasanayagam made order fortho applications to bo heard de novo before some other President.
55G il. N. G. FERNANDO, C.J.—(jeylon Insurance. Company Ltd. Perertk
On 27th October 1970, the applications were taken up for hearing bythe new President, before whom the same objection which had previouslybeen rejected by Mr. Itasanayagam was again taken, and the newPresident over ruled it. The 'present applications by the Companyto the Supremo Court were made for the purposes of challenging thecorrectness of the new President’s orders.
The questions of law which arise for our determination are whether :—
the investigation which is being conducted by the Police,presumably under Chapter XII of the Criminal Procedure Code,constitutes “ proceedings under any other law ” within tho meaningof s. 31 B (3) of the Industrial Disputes Act, and
the facts affecting these applications to the Labour Tribunalare facts affecting the investigation.
In regard to the first and principal question, Counsel appearing for theCompany has not referred to any other statutory provision in our lawwhereby a Police investigation into some suspected offence is regardedas “ a proceeding ”, nor has my own research revealed that such aninvestigation has been held in any English case to be a “ proceeding ”.But it may yet be that s.31 B (3)is an exceptional provision which requiresthat a Police investigation is to have priority before the proceedingsof a Labour Tribunal, and it is necessary to examine the provisions ofiaiig sub-section to ascertain whether such is indeed the case.
It will be seen that the ground for suspension first set out in -paragraph(a) of sub-seclion (3) is that a matter to which an application relates issimilar to or identical with a matter constituting or included in anindustrial dispute into which another inquiry is being held. In otherwords, a Labour Tribunal’s proceedings have to be suspended, becauseof the likelihood that an award will be made in the industrial disputeon a similar or identical matter; and after that award is made the LabourTribunal is required to have regard to that award when the Tribunalmakes its own order on the application. Thus ■paragraph (a) appearsto be based on the familiar concept that different Tribunals should notcontemporaneously adjudicate upon similar or identical matters, and thatthe adjudications made by ono tribunal should ordinarily receive somerecognition by another tribunal.
This same concept however is not clearly expressed in the terms ofparagraph (b) of sub-section (3). But in this connection also, when aLabour Tribunal suspends its proceedings because there are “ proceedingsunder any other law ”, the Tribunal is required subsequently when makingits own order, to have regard to the decision in the other proceedings.Assuming then for the moment that a Labour Tribunal’s proceedingsmust be suspended during a Police investigation under Chapter XII ofthe Criminal Procedure Code, what will be “ the decision ” in theinvestigation to which the Tribunal must subsequently have regard ?
H. N. G. FERXAMO, C.J.—Ceylon Insurance Company Ltd. v. Pcrcra
Section 131 of the Code requires that as soon as an investigation iscompleted, the officer-in-eharge shall forward to the Magistrate's Court areport in the prescribed form. It does not appear that the form of thisreport has been in fact prescribed ; but Sections 126 and 127 appear toprovide for the action to be taken upon the completion of a Policeinvestigation. If there is no sufficient evidence or reasonable ground ofsuspicion to justifj' the forwarding of the accused to a Magistrate’s Court,then no action is taken, except presumably to report according)}' to aMagistrate. If on the other hand there is sufficient evidence or reasonableground as aforesaid the accused is forwarded to the Magistrate’s Courtor security is taken from him for his appearance at such Court, and thereport under s. 131 will allege that he has committed some offence, andwill in terms of s. 148 constitute the institution of proceedings in theCourt. When, in this second eventuality, proceedings are institutedin terms of s. 14S (1) (d) of the Code, then undoubtedly, at that stage,there will be “ proceedings ” in a Magistrate’s Court, and if the factsaffecting those proceedings are similar to or identical with a matterbefore a Labour Tribunal, s. 31 B (3) (b) will commence to operate, andthe Tribunal must suspend its own proceedings.
But the fact that, at this stage, “ proceedings ” are or are about to bocommenced in a Court, has no bearing on the question whether a Policeinvestigation is also a proceeding, and whether there can he in such aninvestigation any “ decision ” to which a Labour Tribunal must haveregard.
Let me now consider a case in which the investigation terminates,and the Police do not institute jiroceeclings in Court.
Counsel appearing for the Company argued that even if the ultimatedecision in a Police investigation is that there is no sufficient evidenceupon which to institute a prosecution, a Labour Tribunal would haveregard to such a decision. With great respect I am quite unable to seein what way a Tribunal can take account of the fact that no prosecutionis launched after a Police investigation.
In the instant case for example, can the Labour Tribunal, withouthearing evidence, ultimately hold that the respondents were not concernedin a fraud on the Company, on the ground that the Police “ decided ”not to prosecute them ? So to hold would be for the Tribunal to abandonits jurisdiction and its duty to decide a question of fact. Again, if thereis evidence before the Tribunal which would ordinarily compel it to holdthat the respondents were guilty of a fraud, can the Tribunal neverthelessdecide that they are not guilty, because the Police did not think themguilty ? That would be to reach a decision because of an extraneousfact, which is not relevant upon the question of the guilt of th6respondents.
65S H. N. G. FERNANDO, C.J.—Ceylon Insurance Company Ltd. v. Perera
Even in a case in which the Police, after investigation, do institute aprosecution, the “ decision ” to prosecute is in reality the consequence ofan opinion “ that there is sufficient evidence or reasonable ground ofsuspicion to justify the forwarding of the accused to a Magistrate'sCourt But the “ decision ” has no legal effect in relation to the accused.He is not in law accused of an offence, unless and until a report is actuallymade to the Court in terms of s. 14S of the Code. I have already triedto show that in this event a Labour Tribunal’s proceedings may haveto bo suspended, but only for the reason that there are proceedingspending in the Magistrate’s Court, and not for the reason that there hasbeen an earlier Police investigation. When a Tribunal’s proceedingsare thus suspended, the Tribunal must subsequently have regard to the“ decision ” in the proceedings in the Court, i.e., to the ultimate orderof conviction, acquittal or discharge.
To meet the considerations to which I have just referred, Counsel forthe Company made the surprising submission that, when a Policeinvestigation is followed by a written report under s. 14S, and there isultimately a conviction of the accused, the functions respectivelyperformed by the Police and by the Court together constitute one“proceeding ”, and that thus the conviction entered by a Magistrate isa “ decision ” in the “ proceeding ” of investigation by the Police. Butour system of criminal procedure is not the Conti?icntal, in which tosome extent the functions of investigation and committal are bothvested in a Magistrate, and the times when a Magistrate in Ceylon was.also Superintendent of Police are now happily no more.
Some apparent justification for_this submission of Counsel is affordedby the opinion of a Bench of 3 Judges of this Court, in tTrc Trial at Barin the case of The Queen v. Gna/iaseeha Thero and others 1 (73 1ST. L. R. 154atp. 141) : —
“ Proceedings in a Magistrate’s Court can be commenced in one orother of the ways set out in section 14S (1) (a) to (/). It is unnecessaryto refer in detail to these di.Terent way3 of instituting proceedings ;it is important to note however that a -written report made by anofficer-in-chnrgo of a Police Station or by an enquirer under section121 (2) can amount to the institution of criminal proceedings in theMagistrate’s Court within the meaning of section 14S (1) (5) ; thiswould be so even though at that stage the offender is unknown—see section 150 (1).”
A report under s. 121 (2) is mado when a police officer or inquirer“ has reason to suspect the commission of a cognisable offenco ” ;whereas the written report referred jto in s. 14S (1) (5) is one “ to the likeeffect ” as in s. 1-iS (1) (a), i.e. containing “a complaint that an offencehas been committed ”. The sharp differences in the language of tho
.‘ (IOCS) 73 X. L n. 154 .1 p. 101.
H. N. G. FERNANDO, C.J.—Ceylon Insurance Company Ltd. v. Pcrcra 559
two sections sufficiently emphasise the difference in the purport of thereports ; a report under s. 121 (2) that there is reason to suspect that Ahas been murdered is very far removed from a report under s. 14S thatX has committed the murder of A. . Even if there may be cases in which," from information furnished ” to a Police officer, he is justified inimmediately making a report that A has been murdered by X or by aperson unknown, in such a case the report will indeed be one under8.148 (1) (6). It seems to me the better view that, even in such an unusualcase, the report to Court is legally made under s. 148, and not unders. 121. The terms of s. 150 (which is referred to in the cited opinion)give jurisdiction to the Magistrate, not because there has been a reportunder s. 121, but because proceedings have been instituted under s. 14S
. Although I have taken this opportunity to express some doubt regardingthe correctness of the opinion cited from the judgment in Gnanaseeha’scase, that opinion does not really support the arguments of Counsel forthe Company in the instant case. Even if a report under s. 121 (2)of the Code can properl}'- “ amount to the institution of criminalproceedings in a Magistrate’s Court”, it docs not follow that any Policeinvestigation carried out thereafter is part of those criminal proceedings.
If the report does amount to the institution of criminal proceedings,then s. 31 B (3) of the Industrial Disputes Act may api>Iy because thoseproceedings are pending in the Court, but not because some Policeinvestigation may be pending.
Counsel also argued that, because the Police investigation in this caseis being carried out upon an order from a Magistrate under s. 129 ofthe Code, that investigation is a proceeding in the Magistrate’s Court.
It is clear that Chapter XII of the Code authorises a Police investigationinto a cognisable offence without authority from a Magistrate. If suchan investigation is not a proceeding of the Court, then an investigationinto a non-cognisable offence docs not become a proceeding of the Courtmerely because this investigation .cannot be carried out without aMagistrate’s order. There are many acts, which a public officer or aprivate citizen cannot lawfully do without the authority of a Court orother public official; but it does not follow that when the act is done,it is a “ proceeding ” of the Court or official which permits it. If aPolice permit is granted for holding a public meeting, or if a search warrantis issued by a Court, or if a competent authority permits food to be servedat a function for more than 150 persons, it does not follow that themeeting is held by- the Police, or that the search is conducted by theCourt, or that the competent authority is host at the function.
In considering the question whether a Police investigation is a“ proceeding ” contemplated in s. 31B (3) of the Industrial DisputesAct, it is relevant to note certain features of Chapter XII of the Code.Section 122 (1) provides that no oath or affirmation shall be administeredto a person so examined, and sub-section (3) severely restricts the use ,,
660 H. N. G. FERNANDO, C.J.—Ceylon Insurance Company Lid. v. Perera
which may be made of a statement recorded in the investigation. It isclear that the sole purpose of the investigation is only to enable the
Polico to gather evidence and to form an opinion whether or not theevidence justifies the institution of proceedings. A comparison of theprovisions of the Commissions of Inquiry Act, for instance reveals thatin the latter Act, unlike in Chapter XII of the Code, there is provisionfor the sanction of an oath or affirmation for a penalty for false evidenceand for punishment for contempt. Even if it be correct that the pendencyof proceedings before a Commission of Inquiry may be a ground for thesuspension of proceedings before a Labour Tribunal, the possibilitythat the pendency of a Police investigation is also a contemplated ground
for such suspension, is extremely remote.
For these reasons, I reach the conclusion that s. 31B (3) of the IndustrialDisputes Act contemplates that proceedings before a Labour Tribunalmust be suspended only if there are pending some other proceedings in•which an award or decision having legal effect will or can be made, andthat an investigation under Chapter XII of the Criminal Procedure Codeis not a proceeding contemplated in the Section.
I cannot conclude this judgment without reference to the circumstancesin which the Company has made these applications. The President,Mr. Rasanayagam, had made order on 23rd March 1969 rejecting theCompany’s objection that the Labour Tribunal must suspend itsproceedings pending the Police investigation into an alleged fraud. Ifthe Company thought in good faith that the order should be challenged,the proper course was to have made an application to tin's Court in orabout April I960. By their desisting from that course, and by insteadrepresenting to Mr. Rasanayagam that a large volume of evidence hadto be led, the Company impliedly expressed its agreement that the inquiryby the Labour Tribunal should proceed without suspension, althoughbefore a different President. Nevertheless, the Companj- again raisedthe same objection under s. 31B (3) before the new President in October1970, and thereafter made the present applications. The Companyhas in this way contrived to delay for nearly 3 years the inquiry by theLabour Tribunal. Even if my construction of s. 31B (3) had beendifferent, I would have refused these applications on the ground that thereprehensible “ tactics ” employed by the Company justifies a denialof thc discretionary relief which it sought from this Court.
The applications of the Petitioner are dismissed. The Petitioner willpay Rs. 105 as’ costs to each respondent who was represented in thisCourt.
SaMEBAWiCKRA-VE, J.—I agree.
THE CEYLON INSURANCE COMPANY LTD., and E. V. PERERA and others, Respondents