THE KAHATAGAHA MINES LTD., Petitioner and K. S. P. D. FERNANDO, Chief Valuer, a

035-NLR-NLR-V-78-THE-KAHATAGAHA-MINES-LTD.-Petitioner-and-K.-S.-P.-D.-FERNANDO-Chief-Valuer-a.pdf


TENNEKOON, C.J.—Kahatagaha Mines Ltd. v. Fernando, Chief Valuer 273
1976 Present: Tennekoon, C.J. Rajaratnam, J., and
Wanasundera, J.
THE KAHATAGAHA MINES LTD., Petitioner and K. S. P. D.FERNANDO, Chief Valuer, and another, Respondents
S.C. 758/75—Application for Writs of Certiorari, Prohibition
and Mandamus
Mines and Minerals Law No. 4 of 1973—Sections 58, 64—Pro-cedure under Section 64 (2)—Chief Valuer a one-man tribunal—Judicial or quasi judicial function—Meaning of expression “ adduceevidence”.—Administration of Justice Law Sections 168(5),184 (5), 213 (5), 447 (2), 451 (2)—Oaths Ordinance Section 4.
The procedure contemplated by the Legislature in Section 64subsection (2) of the Mines and Minerals Law No. 4 of 1973 wasthat each side should call witnesses or produce documents and thatthe other side would be entitled to cross-examine such witnesses.
274 TENTsTEKOON, C.J.—Kahatagaha Mines Ltd. v. Fernando, Chief Valuer]
The expression “ adduce evidence ” means testifying subject
to being questioned by the party against whose interest suchevidence may operate in the mind of the Tribunal, and by theperson called upon to make the final determination.
“ There can be no question that the Chief Valuer is requiredby law to act judicially. He must deal with the question referredto him without bias and must give each of the parties the oppor-tunity of adequately presenting his case
A pplication for Writs of Certiorari, Prohibition andMandamus.
H. W. Jayawardena with H. L. de Sjtlva, J. C. Ratwatte andMiss S. Fernando for the Petitioner.
V. C. Gunatilaha, Deputy Solicitor-General with G. E. M. deSilva, State Counsel, for the 1st Respondent.
Niranjan Sinnetamby, Deputy Solicitor-General, with N~„Jayasinghe, State Counsel, for the 2nd Respondent.
Cur. adv. vult.
June 24, 1976. Tennekoon, C.J.—
The question that arises for decision in this case is purelya question of law, and can be considered independently of thefacts of the particular case.
The question relates to the meaning to be given to sub-section(2) of Section 64 of the Mines and Minerals Daw No. 4 of 1973„
A Corporation called the State Graphite Corporation had beenset up by the Minister under Section 2 of the State IndustrialCorporations Act No. 49 of 1957. By a vesting order made on13.9.1973 under Section 52 of the Mines and Minerals Lawcertain property comprising lands and buildings, machineryand equipment, that had been employed by the Petitioner, theKahatagaha Mines Co., Ltd., was vested in the State GraphiteCorporation.
Rules pertaining to the determination of the amount of com-pensation to be paid by the State Graphite Corporation inrespect of property vested in the Corporation are provided forin Section 58, which I reproduce in full—
“ 58. The amount of compensation to be paid under thisLaw in respect of any property vested in the Corporationshall be determined in accordance with the followingprovisions : —
Where such property consists of land, the amount ofcompensation shall be equal to the price which in theopinion of the Chief Valuer such property (excluding
TENNEKOON, C.J.—Kahatagaha Mines Ltd. v. Fernando, Chief Valuer 275
any buildings standing thereon) would have fetchedif it had been sold in the open market on the day onwhich that property was vested in the Corporation.
Where such property consists of any building, anything
attached to the earth or permanently fastened toanything attached to the earth, or any other fixedasset, or any vehicle or furniture, the amount of suchcompensation shall be—
where the owner of the property immediately
prior to its vesting purchased it and the actualamount paid by him for such property, otherthan for any land, can be ascertained, suchamount less any sum which the Chief Valuerconsiders reasonable for the depreciation of theproperty, or
the net book value of such property as shown in
the last audited balance sheet prior to the dateof its vesting in the Corporation, less any sumwhich the Chief Valuer considers reasonablefor the depreciation of the property since thedate of preparation of such audited balancesheet,
whichever is less.
Where such property consists of any movable property
(other than vehicles and furniture) or any currentasset, the amount of such compensation shall be theactual cost incurred in the purchase or production ofthat property or the price which in the opinion ofthe Chief Valuer such property would have fetchedif it had been sold in the open market on the dayon which it was vested in the Corporation, whicheveris less.
Where such property is any right, interest or benefit
in any movable or immovable property derived underthe terms of any arrangement (formal or informal),lease or notarially executed instrument, the amountof such payment shall be the actual price paid bythe holder or his predecessor for the acquisition ofsuch right, interest or benefit :
Provided that a proportionate amount shall bededucted from the compensation on account of theperiod, if any, for which the holder and his prede-cessor, if ajny, has enjoyed such right, interest orbenefit.”
278 TENNEKOON, C. J.—Kahatagaha Mines Ltd. v. Fernando, Chief Valuer
We now come to Section 64. Subsection (1) thereof provides—
“64 (1). The Board of Directors shall refer to the ChiefValuer the determination of compensation payable in respectof any property, and such Valuer shall submit his deter-mination to the Board of Directors. ”
Pausing at this stage, it seems to me perfectly clear that,having regard to the rules for the determination of compensationthat have been set out in Section 58, that upon reference to theChief Valuer under Section 64 (1), his duty is to make adetermination of the compensation in accordance with thestatutory rules set out in Section 58.
His function, therefore, immediately becomes a judicial or atleast a quasi-judicial function. This must necessarily be so,because the determination of the Chief Valuer is binding on theperson from whom the property was acquired and on the StateGraphite Corporation, and also on any other persons who hadlesser interests in that property. If there was any doubt inregard to that matter, the Legislature made provision in sub-section (2) of Section 64, the text of which is as follows: —
“64(2). The Chief Valuer shall, before making hisdetermination of the compensation payable in respect of anyproperty, give the person from whom that property wasacquired or requisitioned for the Corporation, as well asthe Chairman of the Board of Directors, an opportunity toadduce before such Valuer, by k’mself or by a representativeauthorized by him in that behalf, evidence with regard tothe value of that property.”
It seems to me that the person from whom the property wasacquired would be interested in getting the best figure possiblewithin the rules set out in Section 58; equally, the StateGraphite Corporation would be interested in keeping the figureas low as possible, while still applying the rules in Section 58.The provision which the Legislature has made making itincumbent upon the Chief Valuer to give both sides “ anopportunity to adduce evidence with regard to the value ofthat property,” can only mean that each side can place evidencebefore the Chief Valuer. The expression “to adduce evidence”is one well-known in legislation pertaining to inquiries andtrials in Courts. Without going back to the language used byLegislators of the past one has only to look at the legislationpassed by the first Parliament of the Republic, in order toascertain what meaning the Legislature intended to attach tothe expression, “ adduce evidence Section 213 (5) of the
TENNEKOON, C.J.—Kahatagaha Mines Ltd. v. Fernando, Chief Valuer 277
Administration of Justice Law speaks of the situation thatarises—
“ if the accused announces his intention not to adduceevidence. ”
Similar expression occurs in Section 168 (5) (“ if any evidenceis adduced on behalf of the accused. ”) and in Section 184 (5)(“ if the accused announces his intention not to adduceevidence. ”). In those parts of the Administration of JusticeLaw dealing with trials by Magistrate’s Courts, District Courtsand High Courts, one comes across such expressions as “ produceevidence ” and “ give evidence ”. Similar expressions are to befound in Sections 447 (1) and 451 (2) of the Administration ofJustice Law, Part VI, which deal with procedure in civil trials.There can in my mind be no doubt that the expression “ adduceevidence ” means, testifying subject to being questioned by theparty against whose interest such evidence may operate in themind of the Tribunal, and by the person called upon to makethe final determination. Sub-section (2) of Section 64 of theMines and Minerals Law also contemplates that the person fromwhom the property was acquired, or requisitioned and theChairman of the Board of Directors of the State GraphiteCorporation may be present by himself, or by a representativeauthorized by him for the purpose of adducing evidence. Lawyersare not excluded. It seems to me that the procedure contem-plated by the Legislature was that each side should callwitnesses, or produce documents, and that the other side wouldbe entitled to cross-examine such witnesses. Such proceduresfor the determination of compensation upon compulsoryacquisition are not unknown in our legislation. The fact thatthe Chief Valuer is here made a one-man tribunal seems to meto make no difference to the tribunal’s obligation to act judiciallyand fairly. By designating the Chief Valuer as the tribunal theLegislature has only sought to provide a tribunal less liable tobe led astray by tendentious and partisan expert opinion thateither side may place before him. A fair hearing will includean ascertainment of the nature, quality and condition of thething acquired ; this can be ascertained by oral or documentaryevidence and/or by inspection of the thing itself. A fair hearingwill also include a duty to take account of any acceptableexpert opinion on the value of the particular thing.
A reference to Section 4 of the Oaths Ordinance, Cap. XVIImakes it clear that persons who give evidence before the ChiefValuer in terms of Section 64 (2) will have to do so under oathor affirmation.
278 TENNEKOON, G.J.—Kahatagaha Mines Ltd. v. Fernando, Chief Valuer
It seems to me that what the Legislature contemplated wasthat the Chief Valuer should hold an inquiry before he makeshis determination. The person designated as having the powerto make the determination is the Chief Valuer, and not his wholedepartment, and accordingly it seems to me that if any reportcontaining factual information or opinions prepared by officersof the Valuation Department is proposed to be utilised by theChief Valuer in making his determination, anything ip. suchreport which may operate to the prejudice of either of theparties, i.e. the person from whom the property was acquired,or the State Graphite Corporation, then such report should bedisclosed to the parties, so that they can controvert them ormake submissions thereon.
To set out the facts now upon which this application for awrit of certiorari and prohibition is made ; certain propertybelonging to the Petitioner, the Kahatagaha Mines Co. Ltd.,was vested in the State Graphite Corporation by a noticepublished in the Ceylon Daily News of 28.4.1975. The ChiefValuer, the 1st Respondent, announced that he would hold aninquiry to determine the compensation payable in respect of theproperty vested in the State Graphite Corporation under Section64(2) of the Mines and Minerals Law. At a preliminary hearingheld on 13.6.1975, there was some discussion among the lawyerswho appeared for either side, and the Chief Valuer, as to theprocedure he adopted. There was some discussion as to whethera witness called by the Petitioner should be subjected to cross-examination by the lawyer who appeared for the State GraphiteCorporation. Counsel for the Petitioner expressed the view thateach side had the right to cross-examine any witness producedby the other side. Counsel for the State Graphite Corporationexpressed the view that while he agreed that the opportunityto adduce evidence includes also the opportunity to test andevaluate that evidence, he denied that Counsel for the Petitionerhad a right to cross-examine witnesses who may be tenderedon behalf of the State Graphite Corporation. He further wenton to say that the State Graphite Corporation had no obligationto place any witnesses before the Chief Valuer in this manner.
Having adjourned further hearing for the 13th of August, 1975the Chief Valuer made an order on that date. The effect of thatorder is that he would permit each side to call witnesses beforehim in the presence of each other. Such witnesses would bepermitted to make statements, but whether they speak to factsor expert opinions, would not be permitted to be cross-examinedby the opposite side ; each side would be given an opportunityto make submissions on the other’s evidence. He further wenton to state.
TENNEKOON, C.J.—Kahatagaha Mines Ltd. v. Fernando, Chief Valuer 279
“ This is not a formal inquiry or a quasi-judicial proceed-ings, and in my view it is therefore not necessary to giveany opportunity for cross-examination. ”
When this order was made Counsel for the Petitioner inquiredfrom the Chief Valuer whether he would be given an oppor-tunity of commenting on or rebutting by other evidence anymaterial which the Chief Valuer might himself procure or obtainthrough his own officials or other machinery available to himwhich in the view of the claimant might be prejudicial to hiscase. The Chief Valuer reserved his order for the next date,and ruled that no opportunity as asked for by Counsel for thePetitioner would be given to either party to make submissionsor to controvert any material which the Chief Valuer might,unknown to the parties, obtain and utilise in making hisdetermination.
These orders have been brought up before this Court forcertiorari and prohibition.
Counsel for the Petitioner in his argument before us hasreferred us to a number of cases, and to certain passages inHalsbury dealing with judicial review of administrative action.The propositions which they support have become so much partof our law that I do not think it necessary to reproduce themin this judgment. It seems perfectly clear to me that there aretwo parties contending in this case—that is, the Petitioner, theKahatagaha Mines Co. Ltd., on the one side, and the StateGraphite Corporation, on the other. The Chief Valuer has beendesignated by the Legislature as the person to make adetermination, and in doing so each party has been given theright to adduce evidence. There can be no question that theChief Valuer is required by law to act judicially. He must dealwith the question referred to him without bias and must giveeach of the parties the opportunity of adequately presenting hiscase. To refuse permission to one party or the other, a right toquestion any witness produced by the other, is to deny a fairopportunity of adequately presenting his case. The Chief Valuermust come to his determination in the spirit of fairness and asense of responsibility of a Tribunal whose duty it is to mete,out justice.
Counsel for the 1st Respondent referred us to the case, In rePERGAMON PRESS LTD., (1971) 1 Chancery Division, 388 inwhich it was held that in the course of an investigation underSection 165 of the Companies Act of 1948, the Inspector holdingthe investigation was not obliged to submit witnesses to cross-examination. Lord Denning, MR. in the course of his judgmentmakes it quite clear that the Inspector’s investigation under
280
STT A RV AJsT AN DA J.—Kanagasabai v. Mylvaganam
Section 165 of the Companies Act was not a judicial proceeding,but only an investigation, and that therefore no question ofcross-examination of witnesses arose. This case has no relevanceto the question that is before us.
I would accordingly quash both orders made by the ChiefValuer on the ground that they both contain errors of law on’the face of them. I would also direct the issue of a Mandate inthe nature of a Writ of Prohibition prohibiting the Chief Valuerfrom proceeding in accordance with the views expressed in thosetwo orders. He will of course continue the inquiry in accordancewith the principles of procedure outlined in this judgment.
The 2nd Respondent as representing the State GraphiteCorporation will pay to the Petitioner a sum of Rs. 210 as costs.
Rajaratnam, J.—I agree.
Wanasundera, J.—I agree.
Application allowed.