THE PINIKAHANA KAHADUWA CO-OPERATIVE SOCIETY, LTD., Appellant, and P. M. HERATH,

042-NLR-NLR-V-59-THE-PINIKAHANA-KAHADUWA-CO-OPERATIVE-SOCIETY-LTD.-Appellant-and-P.-M.-HERATH.pdf

143
PULT-E, J.—The Pinikahana Kaliaduwa Co-operative
Society, Tjtd. v. Hcrath
Present : Basnayake, C.J., Pulle, J., IOD. de Silva, J., T. S. Fernando,’J., and L. W. de Silva, A.J. .•'*•THE PINTKAHAHAKAHADUWA CO-OPERATIVE SOCIETY-, LTJD.,.Appellant, and P. M. HERATH, Respondent
S. G. 118—D. G. Balapitiya, 220
Co-operative Societies Ordinance (Cap. 107)—Award of arbitrator—Procedure for itsenforcement—Requirement of notice to party against whom the award is enforced—Rule 38 (13)—Validity thereof—Sections 12 12), 45, 46 (1), 46 (2) (l), 46 (2) (w),46 (3), 46 (4)—Rules 38 (1), 3S (9)—Civil Procedure Code, ss. 223, 224, 225.
liulo 38 (13) mado by the Minister of Food and Co-operative Undertakingsunder section 4G, and approved by the Senate and the House of Representativesin terms of section 4G (3), of the Co-operative Societies Ordinance reads asfollows :
“ A decision or an award shall on application to any civil court having juris-diction in the area in which the Society carries on business be enforced in thesame manner as a decree of such court. ”
Held, per Puile, J., IC. D. de Silva, J., and T. S. Fernando, J. (Basnayake,C.J., and L,. W. de Silva, A.J., dissenting), (i) that Rulo 3S (13) was inlra viresof the rule-making powers granted by section 4G of tlio Co-operative SocietiesOrdinance.
Don Kerens v. Halpe Katana Co-operative Stores Ltd. 1 partly overruled.
(ii) that if an award is ex facie regular, the court in which it is sought to executeit as a decree has no jurisdiction, by virtue of section 45 (4) of tho Co-operativeSocieties Ordinance, to test its validity. It is not necessary, therefore, that anotice of an application for execution of an award made by an arbitrator undersection 45 should be given to tho party against whom tho award is sought to boenforced.
Jayasinghc v. Boragodaicallc Co-operative Stores 3 overruled.
^lPPEAL from an order of the District Court, Balapitiya. Thisappeal was reserved for decision by a Bench of five Judges under section51 (1) of the Courts Ordinance.
E. J. Gooray, with E. R. S. R. Coomara-swamy, E. B.T. G. GunascJcnra, for the appellant.,
V. G. Gunalilala, for tho respondent.
Hovember IS, 1957. Pur.r.E, J.—
Vannilamby and
Gttr. adv. vult.
A rule numbered 3S (13) published in Government Gazette Ho. 10,0S6 of24th March, 1950, and'made b}r the Minister of Food and Co-operativoUndertakings under section 46 and approved by the Senate'and thoHouse of Representatives in terms of section 46 (3) of the Co-operativeSocieties Ordinance (Chapter 107) reads as follows :—.
“ A decision or an award shall on application to an3r civil court havingjurisdiction in the area in which tho society carries on business be enforcedin the same manner as a decree of such court. ”.’ . – "L "
1 (1956) 57 K.L.R. 505^.-* (1955) 56 N.L.R. 462.'-[
LTX•
7
2—
'. S. B 2SS—1.503 (12/571
14G
l’ULL,&, J .—U’/ie I'tnikahana Jintiaduica (Jo-operative
■ Society, Ltd. v. Hernth
The principal question which arises for determination on this appealwhich has been reserved for decision by a Bench of five Judges undersection 51 (1) of the Courts Ordinance is whether the rule referred to isultra vires.'■
The award sought to be enforced as a decree of court recites that a disputebetween the appellant, a co-operative society, and one Podiwela MarageHeratli, the respondent to this appeal, as to whether the respondent owesto the society the sum of Rs. 5,GS4-/41 was referred to an arbitrator fordetermination by the Assistant Registrar of Co-operative Societies and thathaving duly considered the matter he (the arbitrator) directed the res-pondent to pay to the appellant the sum ofRs. 4,304/41. The award isdated 17th October, 1953, and is signed by the arbitrator, the respondentand by a representative of the society. The award also bears an endorse-ment by the arbitrator that he informed the parties of his decision and oftheir right of appeal..'
The appellant on the 22nd October, 1954, filed the award in court andmoved by nay of summary procedure to enforce it. The respondentappeared on order nisi and filed an affidavit and took six different objec-tions. It is not necessary to deal at this stage with those objections,
xcept to state that no objection was taken on the ground that rule38 (13) was ultra vires. The application to execute the award as a decreeof court was refused and the society appealed. The appeal first came onfor hearing before my brothers H. iST. G. Fernando and T. S. Fernando andafter judgment had been reserved their attention was drawn to the deci-sion (then unreported) in S. M. Don Kerens v. Jlnipe Katana Co-operative>Stores Ltd. 1 and they reserved the hearing for a fuller Bench. In thecase cited my Lord, the Chief Justice, gaveasone of the reasons for allowingthe appeal that the power conferred by the Co-operative Societies Ordi-nance to prescribe the procedure to be followed for enforcing the award ofan arbitrator did not enable a procedural rule to be made to give an awardthe legal effect of a decree of a court of law.
0
Before examining the submissions of learned counsel for the appellant,to whom we are indebted for a full argument, it woidd be helpful toreview some of the provisions in the Ordinance to which he called ourattention. Section 45 provides for settlement of disputes by the Registrarof Co-operative Societies or by an arbitrator. The decision of either isinvested with finality and it is expressly provided that it “ shall not becalled in question in any civil court ”. It may here be pertinent toobserve that any decision given by the Registrar or an arbitrator in excessof their jurisdiction would entitle a party interested to have it quashed bya writ of certiorari.
Section 46 (I) confers the power to “make all such rules as may benecessary for the purpose of carrying out or giving effect to the principlesand provisions of this Ordinance ”. Without prejudice to the generalityof the power just referred to, sub-section 2 enumerates specific matters
{10-50) 57 -V. R. 505.
PUT,LE, J.—The- Pinikahana Knh'uhuoa Co-opcjralioe
Society, T.td. v.lteralh
1J7
in regard to which rules can be made. Paragraph (fl of sub-section 2states that rules may
“ prescribe the inode of appointing an arbitrator, and the procedureto be followed in proceedings before the Registrar or such arbitrator orarbitrators, and the enforcement of the decisions of the Registrar or theawards by arbitrators. ”
Section 46 (3) states that no rule shall have effect unless it has beenapproved by the Senate and the House of Representatives and that notifi-cation of such approval shall be published in the Gazette. Sub-section (4)reads,.
“ Every rule shall, upon the publication in the Gazelle of the notifica-tion required by sub section (3), bo as valid and effectual as though itwere herein enacted. ”
In submitting that the rule was in Ira vires learned counsel for theappellant stated that it was not necessary for him to rely on the opinionof Lord Herschell in Institute of Patent Agents v. Lockicood 1, concurredin by two of his colleagues, that where a rule is enacted under provisionsanalogous to section 46 (3) and (4) it is not competent for any court toquestion its validity. Basing his argument on the case of Minister ofHealth v. The King (on the prosecution of Yaffe) 2 which explained anddistinguished Lockwood’s case he submitted that the rule with which woare concerned is not inconsistent with any provision of the Co-operativeSocieties Ordinance and that, therefore, its validity cannot be challenged.Yaffe’s case raised a question of the interpretation of section 40 of theHousing Act, 1925 (15 Geo. 5, c. 14) which empowered the Minister ofHealth to make an order confirming an improvement scheme made underthe Act. It provided that “ t he order of the Minister when made shallhave effect as if enacted in this Act. ” Viscount Dunedin after quotingthe passage from the speech of Lord Herschell in which he dwelt on thedifficulties of interpretation which might result in a rule, regarded asembodied in the Act, conflicting with a provision of the Act said,
” What that comes to is this : The confirmation makes the schemespeak as if it was contained in an Act of Parliament, but the Act ofParliament in which it is contained is the Act which provides for t-heframing of the scheme, not a subsequent Act. If therefore the scheme,,as made, conflicts with the Act, it will have to give way to the Act.The mere confirmation will not save it. It would be otherwise if thescheme had been, per se, embodied in a subsequent Act, for then themaxim to be applied would have been ' Posteriora derogant prioribusBut as it is, if one can find that the scheme is inconsistent with the pro-visions of the Act which authorizes the scheme, the scheme will be bad,and that only can be gone into by way of proceedings in certiorari.”
In my opinion the contention on behalf of the appellant is entitled tosucceed. It is obvious that once an av^ard is made some machinery is .needed to enforce compliance with it.-. That section 46 (2) (t) empowerssetting up such a machinery is equally obvious. I cannot appreciate
1 (1S94) A. G. 347..-* (1931) A C. 401.'
I4S
PUCLE, J.—1 'he Pinilahana Kahaduica Co-operative "
Society, Ltd. v. licrath
what objection there possibly can be to utilising a m a chin cry already inexistence.- It can be set in motion by just one step and' that is byinvesting the award with the character of a decree. It is well known tothe law that arbitral awards are made into decrees of court and I do notsee anything wong in an arbitral award made under the Co-operativeSocieties Ordinance being equated to a decree of a civil court in the exerciseof a power conferred by the legislature to prescribe a procedure for“ enforcing ” the award. That the legislature in conferring that powermust have had in contemplation the enforcement of an arbitral award asif it were a decree is reasonably plain. The commonest form of anyprocedure that one can think of to compel a person to satisfy a claimlawfully adjudicated aguinst him is to seize and sell his movable andimmovable property. There are instances of this even in the sphere of thejurisdiction of the criminal courts. Seizure of property often gives riseto claims .which can satisfactorily be dealt with only in a court exercisinga civil jurisdiction, because they might involve such questions as pos-session, title, and interpretation of deeds. Equating an arbitral awardto a decree seems to me to be the natural culmination of a dispute whichhas reached the penultimate stage of the award and it must have been wellwithin what the legislature contemplated, when it conferred the powerunder section 4G (2) (£) to lay down a procedure for gathering in the fruitsof the award, that the award should be capable of execution as if it werea decree passed by a civil court.
Mr. Cooray drew our attention to a case recently decided in England,namely, Regina v. Marlow {Bucks) Justices, ex parte Schiller 1 as sup-porting his contentioji that rule 38 (13) is not ultra vires. I have closelyexamined the statutory provision under which this case was decidedand am of opinion that it does not assist us to decide the validity of therule in question.
I do not wish to overlook the argument urged for the respondent thatit is specifically provided in section 42 (2) of the Ordinance that certainorders made in the course of the liquidation of a society shall be enforcedby a civil court as a decree of t-hftt court and that, if it was the intentionof the legislature that the rule making authority should be empowered tomake an arbitral award a decree of court, that intention would have foundexpression in the Ordinance itself. In regard to this difficulty twodistinctions have to be borne in mind.
First, as to proceedings taken in the course of the liquidation of aco-operative society, the power to make rules therefor is contained in sec-tion 4G (2) (it-) which enables no more than the prescribing of a procedureto be followed by a liquidator under section 39. Hence it became essentialto provide in the Ordinance itself how those orders had to be enforced.It is not without significance that orders in liquidation proceedings arcnot given the character of finality and are not protected against beingquestioned in a civil court of law. In my opinion the absence of anexpress provision in section 45 enabling an award to be enforced as adecree of court is not a decisive circumstance pointing to the ultra virescharacter of rule 3S (13). I think it is a legitimate way of interpreting
1 (JO-57) 3 IV. L. Ji. 390.
rCLI-E, J.—The Pinikahana JCahacIuwa Co-operative
Society, Ltd. v. Hcrath…
140
section 45 (4) and (5) that the legislature contemplated the enforcementof an award by a civil court and, when it went on to state that the awarclshall not be questioned, it had almost said by implication that it shall beenforced as a decree. Otherwise, the prohibition against questioningits validity appears to be redundant.
Secondly, once the ambit of the expression " enforced in the samemanner as a decree of such court ” in rule 38 (13) is determined havingregard to its context and the provisions in section 45, it ought not to be'cut down on a consideration of section 42 (2), unless one is compelledto do so to avoid a manifest absurdity or hardship. -•
JFor the reasons which I have given I would hold, as stated earlier,that the submission on behalf of the appellant that rule 38 (13) is infravires succeeds.
If an award is ex facie regular, the court in which it is sought to executeit as a decree has no jurisdiction to test its validity, for, if it'does so, itwould plainly be in breach of the prohibition contained in section 45 (4).For this reason I do not think it necessai-y to discuss the various grounds. set out in the judgment under appeal for the finding that the awardwas bad.
Before concluding this judgment I desire to refer to a few mattersadverted to in the course of the argument. In the Katana Co-operativeStores Society case 1 the judgment states at p. 509—
“ In declaring that any dispute falling within the ambit of the section‘ shall be referred to the Registrar for decision ’ the section does notprescribe the person who shall make the reference. In the absenceof such provision the proper way to refer a dispute to the Registrar fordecision would be to send to the Registrar an agreed statementsetting out the relevant facts and the matters in dispute signed by bothparties to the dispute. An ex parte statement signed by one of tlieparties alone would not in my opinion be a proper reference under the .section.■•
“ Arbitration is essentially a matter which can take place only whenthe parties are agreed as to the disputes between them and also as tothe person by whom they should be decided. The aw ard is thereforebad not only because there is in fact no dispute between Jayakody andDon Kerens as contemplated in section 45 but also because there hasbeen no agreed reference to the Registrar. ”.
'While section 45 does not Jay dow n the procedure for referring a disputeto the Registrar for decision, it has been prescribed by rule 38 (1).‘
According to this rule a reference may be made by—-
(а)the committee of the society, or-
(б)the society in virtue of a resolution passed at a general meeting of .
the society, or.
any party to a dispute, or
any member of the society, if the dispute concerns a sum duo from'
•a member of the committee or other officer of the society.
■l(1956) 57 'V. L. Ii. 505.-.'. ’.
2*J. X. B 2S3 (12/57)
■ 150 . . BAS2CAY.AKE. C.J.— The Pinikahana Kaliaduwa Co-operative
Society, Ltd. v. Hcrath’.
If tho conclusion which I have reached is correct, that a court lias noalternative but to execute an award, regular on the face of it, as a decreeof court without enteringinto any questions of its validity Ifcel constrained,with the utmost respect for the judgment in D. G. Jayasinghe v. Bora-godaivalta Co-operative Stores x, which followed Barnes de . Silva v.Galkissa Waltarapola Co-operative Stores Society 2, to hold that it is notnecessary for a court before allowing a writ of execution to satisfy itselfby way of summary procedure “ that the purported decision or awardis prima facie a valid decision or award made by a person duly authorisedunder tho Ordinance to determine a dispute which has properly arisen forthe decision of an extra-judicial tribunal under tho Ordinance. ” 2 Itseems to me, on the other hand, that the decision in Kandy Co-operativeUrban Bank v. Scnanayake el al. 3 that it is not necessary that a noticeof an application for execution of an award made by an arbitrator undersection 45 should be given to the party against whom the award is soughtto bo enforced is right in principle and gives full effect to the prohibitionin section 45 (5) that the court shall not sit in judgment on the award.Rule 38 (9) states, inter alia,-
“ The award of the arbitrators shall be reduced to writing announcedto tho parties present and forwarded to the office of the Registrar …
and such award and record to the proceedings shall be available to theparties for the purpose of execution proceedings. ” Unless a partyadversely affected by an award succeeds in getting it quashed—and thishe can do only on an appropriate application to the Supreme Court—he must comply with the direction or face execution proceedings. Ifho has not complied with the direction lie could hardly be heard to com-plain that the machinery of the court has been set in motion to compelhim to do so. Certainly lie requires no notice of that which he ought tohave anticipated.
I would set aside the order appealed from and direct that the awardfiled of record in the case be enforced by the District Court in tho samemanner as a decree of that court. The respondent will pay to theappellant the costs of appeal and the costs in the District Court.
K. D. de Sidva, J.—
I agree with the judgment of my brother Pulle.T. S. Fernando, J.—
I agree with the judgment of my brother Pulle.
Basxavake, C.J.—.
Tho main question that arises for decision on this ajjpeal is whetherRule 38 (13) of the Co-operative Societies Rules, 1950, published inGazelleNo. 10,0S6 of 24th March 1950, is intra vires of tho rule-making powers •
1 (1055) 56 X.L.R. 402.1 (1953) 54 X. L. It. 326.
* (1937) 39 X. L. X. 352.
BASXAYAKE, C.J.— The Pinikahann Knhaditim ^Co-opcrcttive 151
Sovietj, Ltd. v. llcmth
granted by section 46 of the Co-operative Societies Ordinance. The rulereads as follows :—'
“ (13) A decision or an award shall on application to any civil courthaving jurisdiction in the area in which the Society carries on businessbo enforced in the same manner as a decree of such court. ”
Tin's rule seeks to impose an imperative duty on civil courts. Theoperative words are “ a decision or an award shall be enforced as a decreeof court ”. To answer the question whether the enabling sectionempowers the rule-making authority to make such'a rule, it is neces-sary to examine the enabling section. Section 46 (i) of tho Co-operativeSocieties Ordinance empowers the Minister to make all such rules as maybe neeessaiy for the purpose of carrying out or giving effect to the principlesand provisions of this Ordinance, and proceeds to give him twenty-fourparticular powers to be .exorcised without prejudice to the generality ofthe power conferred on him. Of the twenty-four particular powers,we are called upon to consider tho power conferred bjT paragraph (/) ofsub-section (2), which reads as follows :—.
“ (l) prescribe the mode of appointing an arbitrator or arbitrators,and the procedure to be followed in proceedings before the Registraror such arbitrator or arbitrators, and the enforcement of the decisionsof the Registrar or the awards of arbitrators•
Row, when this enabling provision is closely examined we find that theMinister is empowered to—
(а)prescribe the mode of appointing an arbitrator or arbitrators.
(б)prescribe the procedure to be followed in proceedings before the
Registrar or such arbitrator or arbitrators,.
(c) prescribe the procedure to be followed in the enforcement of thedecision of the Registrar or the awards of arbitrators.
It can hardly be said that the imposition of an imperative duty on a civilcourt to enforce an award as if it were a decree of court comes within thepower to prescribe the procedure to be followed in tho enforcement ofawards. The word “enforcement” according to the dictionary means“ compelling the fulfilment of ” 1. The procedure to be prescribed is onethat the party seeking to enforce the award has to follow. The rule giveshim no guidance as to what he is to do with the award. But the Courtis toldthat it must enforce an award as if it were its own decree. Clearly therule maker travelled outside his authority when, instead of prescribing aprocedure to be followed by the successful party in enforcing an.award,he imposed an obligation on the Court. It is an established principle ofinterpretation that distinct and unequivocal words are required, even inan enactment, for the purpose of adding to or taking from the jurisdictionand powers of Courts of law. Learned counsel has not been able to referus to any enactment nor have I been able to find one in which a rule-making authority is empowered to add by rule to the jurisdiction of the
’1 Shorter Oxford English Dictionary.
152
I3ASXAYAKE, C.J.—-The Pinikakana JCahadmca Co-operative
Society, Ltd. v. Ueralh
established Courts of Law. In this country jurisdiction on the Courts:has always been conferred by enactments of the Legislature. When asubordinate rule-making authority claims that the Legislature lias grantedit power to add to the jurisdiction of the Courts it should justify such claimby pointing to the distinct and unequivocal words in which such poweris conferred. Such words are not to be found in paragraph (<)'of section46 (2) or in any other part of that section. The general power containedin sub-section (1) on which learned counsel for the appellant relied in myopinion affords no such authority. ■
An examination of this very Ordinance reveals that the Legislaturewas fully aware of the principle which I have stated above, and where itintended that a duty should be imposed on a Court it did so in the legis-lative enactment itself (section 42 (2)) and did not- leave it to be done bysubordinate legislation. Learned counsel has not referred us to anysimilar rule made under any other enactment. It was urged that the rule 'under discussion had been in existence for a long time without beingsquestioned. An iiltra vires rule though long-standing is nevertheless'ultra vires. The fact that such a rule has not been questioned cannotgive it validity.
The original rule made in this behalf was Rule 22 of the rules in theSchedule to the repealed Co-operative Societies Ordinance, No. 34 of 1921.As that Schedule, was enacted at the same time as the Ordinance andwas a part of it, there was no question of ultra vires : the rule itself wasenacted by the Legislature. But when the rule was made under and byvirtue of a delegated legislative power it ceased to have the authorit}' ofthe Legislature and had to depend on the rule-making power alone for itsvalidity.
As a second line of argument learned counsel for the appellant contendedthat even if the rule was ultra vires of the enabling power it gained validityfrom sub-sections (3) and (4) of section 46. Those sub-sections read asfollows:—
“ (3) No rule shall have effect unless it has been approved by theSenate and the House of Representatives. Notification of suchapproval shall be published in the Gazette.
(4) Every rule shall, upon publication in the Gazette of the notifica-tion required by sub-section (3), be as valid and effectxial as though itwere herein enacted. ”■
Learned counsel submitted that even an ultra vires rule gained validityfrom the fact that it was approved by the two Houses of Parliament andwas declared by the statute upon publication in the Gazette to be “ asvalid and effectual as though it were ” enacted in the Ordinance. Herelied on Lockwood's case 1 for the proposition that even a rule made inexcess of the authority granted by the statute became a valid rule byvirtue of the provisions of sub-section (4). I find myself unable to upholdthe submission of learned counsel. The enabling section prescribes thepowers that the Legislature has granted to the subordinate law-making *
* Institute oj Patent Agents <b others v. Joseph Lockwood, (IS91) A. G. 34T.
BASXAVAIvE, C.J.—The Pinikahana Kah.iduwa Co-operative
Socicltf, Ltd. v. Heralh’
153
. -authority. It must act within the four corners of those powers if .the- rules are to have the effect given by sub-section (4), for it is in my opiniononly' rules made within the limits of the enabling power that are declaredto be valid and effectual as though they were enacted in the Ordinance.The approval of the two Houses of Parliament has not in my opinionthe effect of making valid, rules which are ultra vires. When Parliamentretains a supervisory control over the making of rules byr a delegated rule-making authority it does so, not for the purpose of giving covering sanc-tion to rules that are made in excess of the authority' conferred by Parlia-ment, but for the inn-pose of controlling the exercise of the power granted.Instead of parting with the legislative power once for all, it retains a super-visor control over the exercise of the power granted, by the enactment'of clauses such as sub-section (3). An examination of our enactmentsreveals that this supervisory control is not retained in every enactment,but in those enactments in which it is retained the form of control is notthe same. In some the rules are required to be approved by a positiveresolution of both Houses, in others they' are valid if no resolution annullingthem is passed within a prescribed period. Although rules may fall withinHie enabling power still as a matter of policy Parliament may decidethat such rules should not be made, byr withholding its approval. Iam not prepared to hold that the effect of sub-sections (3) and (4) of sect ion46 is to make valid, rules which are ultra vires of the powers conferred bysub-sections (1) and (2). H Lock-wood’s case (supra) is regarded as layingdown the dictum that a rule which is clearly outside the enabling powersgranted by the Act is valid despite that fact merely because it is laid on thetable of the two Houses and the statute declares that the rules shall beof the same effect as if they were contained in the Act, I must with thegreatest respect beg to disagree with Lord Herschell’s view and expressmy' respectful agreement with the view taken by Lord Morris in that caseat page 3G5. But I do not regard Lockwood’s case as Iay'ing down such aproposition. All the Law Lords who participated in that decision agreedthat the rules were infra vires, but they went on to consider the furtherquestion whether their validity could be canvassed in the Courts. LordPlerschell in discussing the meaning of the words " in pursuance of thisActsays (at page 35S) :
“ The words ‘ in pursuance of this Act ’ only- become intelligible ifyou read into the section, as the statute provides y'ou shall, the ruleswhich are made under sub-section 2. But if you read into the section,as shewing how he is to be registered in pursuance of the Act, the rulesmade under sub-section 2, then of course every rule which is inlravires, at all events (putting aside for the moment-the other question),is to be read into the section, and have just the same effect as if it hadbeen contained in the Act itself ;… So far I have dealt with the
question whether the rules are inlra vires ; but there is no doubt anothervery important question which has been argued before y'our Lordships,namely', whether this question can be canvassed in the courts, when oncethe rules have been made by the Board of Trade and laid as providedon the tables of both Houses of Parliament. ”'
154
J3ASXAYAICE, C.J.—The Tinikahar.a Knhadmca Co-operative
~ Society, Ltd. v. Hcralh
He then proceeds to consider the "words of sub-section 2 and says :•
" The effect of a statutory rule if validly made is precisely the samethat every person must conform himself to its provisions, and, if ineach case a penalty be imposed, an}' person who does not comply withthe provisions whether of the enactment or of the rule becomes equallysubject to the penalty. But there is this difference between a ruleand an enactment, that whereas apart from some such provision aswe arc considering, you may canvass a rule and determine whether ornot it was within the power of those who made it, yon cannot canvassin that way the provisions of an Act of Parliament. Therefore thereis that difference between the rule and the statute. …
“ I own I feel very great difficulty in giving to this provision, that the}'‘ shall be of the same effect as if they were contained in this Act anyother meajiing than this, that you shall for all purposes of constructionor obligation or otherwise treat them exactly as if they were in the Act.No doubt there might be some conflict between a rule and a provision,of the Act. Well, there is a conflict sometimes between two sectionsto be found in the same Act. You have to try and reconcile them asbest you may. ”
I have quoted the words of Lord Herschell at length in order to showthat his opinion docs not apply to rules which are outside the powersgranted to the rule-making authority. He was dealing with a validrule which was inconsistent or in conflict with the Act. In Yaffe’s case 1,Viscount Dunedin explains the ratio decidendi of Lockwood's case thus :
“ I think the real clue to the solution of the problem is to be found inthe opinion of Lord Herschell L. C. who says this : ‘ No doubt ther emight be some conflict between a rule and a jrrovision of the Act. Well,there is a conflict sometimes between two sections to be found in thesame Act. You have to try and reconcile them as best you may.If you cannot, you have to determine which is the leading provisionand which the subordinate provision, and which must give way to theother. That would be so with regard to the enactment, and with regardto rules which are to be treated as if within the enactment. In that-case, probably the enactment itself would be treated as the governingconsideration and the rule as subordinate to it. ”.
In discussing the majority judgments of Lord Herschell and LordWatson, Lord Warrington of Clyffe said in Yaffe’s case (supra) at page 515:
“ It was held that the validity of a rule imposing fees on registrationcould not be questioned. But this was on the footing that the ruleswere within the statutory authority, as being rules which the Board ofTrade thought reasonable and necessary for giving effect to thesection in question : see per Lord Herschell L. C. (p. 35G).' But thesame learned Lord points out (p. 3G0) that there is a difference betweena rule anti a statute, inasmuch as 1 you may canvass a rule and deter-mine whether or not it is within the power of these who made it, you
1 Minister of Health v. The King (on the Trosccr.tion of YaJJc) (1031) A. C. 40J
13 ASXAYAKE, C.J.—The Pinikahana Kahaduica.. Co-operative
Society, Ltd. v. Hcrnth
155
cannot canvass in that way an Act of Parliament Lord Watson also(p. 365) while coming to the conclusion that the validity of the rules couldnot be questioned, did so on the assumption that they were made in pur-suance of the section in question. So far, therefore, from being anauthority against the proposition stated above it is in favour of it, andI therefore proceed to consider whether or not the conditions givingauthority to the Minister were in this case fulfilled. ”
I have quoted in extenso both from Lockwood's case (supra) and Yajfe’scase (supra) because there appears to be a great deal of misconceptionas to the ratio decidendi of Lockwood's case. Before I part with these twocases I think I should quote a passage from the speech of Lord Morris inLock-wood's case (p. 366). Referring to the words “ and shall (subjectas hereinafter mentioned) be of the same effect as if they were containedin this Act and shall be judicially noticed ”, he said :—..
“ How, I admit that the words are very strong : the general rules arcto have the same effect as if they were embodied in the Act. I accedeto that. But what general rules ? General rules which are madefor ‘ giving effect ’ to that section ; not all general rules—there is nosuch power in imr opinion given to the Board of Trade. What are thegeneral rules which are to have the same effect as if they were containedin the Act ? The general rules made under the section—general rulessuch as the legislature has, under section 101, delegated to the Boardof Trade the authority of making. But if a Court of Justice (beforewhom all these questions must ultimately come) considers that certainrules are rules which do not come within this section, in my opinionthey would be ultra vires, and it would be the duty of the Court not toregard them as operative. As regards the question of their receivinganj' further sanction from the fact of their being laid before both Housesof Parliament. That is a matter of precaution, they do not receive anyimprimatur from having been laid before both Houses of Parliament ;it is only that an opportunity. is given to somebody or other, if hechooses to take advantage of it, of moving that they be annulled. ”
Ho decision of the English Courts which holds that a rule which is outsidethe scope of the enabling power gains validity when the Act declares thatrules made under it shall be as valid and effectual as if they had beeninserted in the Act itself, has been cited to us, nor have X been able to findany. I have examined the evidence of and the memoranda placed by theeminent men who appeared before the Committee on Ministers’ Powersand no such protection has been claimed for rules which are outside theambit of the enabling power. It is not disputed that rides which aredeclared to be a part of the enactment cannot be challenged on the groundof unreasonableness even as an Act cannot be challenged on that ground.
It would be relevant to this discussion to quote a passage from thememorandum presented by Sir William Graham-Harrison, First Parlia-mentary Counsel to the Ministers’ Powers Committee1 on 26th February1930 (page 37 of the Minutes of Evidence) :,-
” As_regards the decision in Institute of Patent Agents v. Locktcood,it is perhaps only necessary to say that, whether the case was rightly1 Committee on J1 linisters' Powers, Minnies ojEvidence, 1932.’
] 50BASNAYAK S, (C.J.—The FinUzahana Kohaduvcei Co-operative
'Society, Ltd. v. Hcrath
or wrongly decided, what it lays down is the law of the land, which canonly be altered by an Act of Parliament.- I believe, however, that itcould be shown conclusively that the reasons on which Lord Hcrschellbased his decision are historically wrong, that the words “ shall haveeffect as if enacted in this Act” were never meant to touch the questionof vires, and that, until at any rate quite recent years, Parliament neverhad any idea that the words in question had the effect which the lawnow ascribes to them. … In connection with the questionof vires, I should like to add, that as far as my own experience goes,Rules very rarely contain any matter which is ultra vires the statutorypower, but this, of course, is no argument for saying that rule-makingauthorities should be given a blank cheque. ”.
It will be seen from the foregoing that Lockwood’s case is not regardedas deciding that rules which are outside the scope of the rule-making powercannot be questioned in a Court of law merely because the enablingstatute has words to the effect that such rules shall be as valid and effec-tual as if they had been inserted in the statute itselfand provision is madefor laying them before Parliament. Even if it can be regarded as layingdown such a proposition I do not think it is binding on this Court norshould we follow it.
There is another aspect of the matter that calls for examination. Therule as I have said before imposes on the Court the duty of enforcing theaward as if it were a decree. Assuming that the decree is brought to theappropriate Court by the successful party, how is he to more the Court ?Clearly lie must do so in the manner prescribed in the Civil ProcedureCode and the Court Mould be bound to proceed in the manner prescribedb}’ the Code as if the award were a decree. Assuming that the awardis clear and declares the unsuccessful party to pay a sum of money to thesuccessful one, the latter must first apply for execution of the awardunder section 223 and in the form prescribed in section 224. Upon theapplication being filed the Court is under an imperative duty to exercisethe functions vested in it under section 225. If the Court is satisfiedthat the application is substantially in conformity with the requirementsof section 224 and that the applicant is entitled to obtain execution of theaward it is bound to direct a writ of execution to issue to the Fiscal.Thereafter the Fiscal Mill proceed in the manner directed by the Codeand all the provisions of the Code that govern seizure and sale and claimsto property seized will apply. I do not sec how the Court can satisfyitself that the applicant is entitled to obtain execution of the aM-ard asit is required to do by section 225 without notice to the other side. Iam in agreement M-ith the vieur expressed by the Judges of this Court inJayasingTie v. Loragodawalta Co-operative Stores 1 that the other sideshould have an opportunity of being heard before the Court directs a writof execution to" issue to the Fiscal.
In my opinion this appeal should be dismissed with costs.
W. do Silva, A.J.—I agree M-ith my Lord the Chief Justice.
.Appcal allowed.
{1055) 5G X. L. Jt. 402.