Bamaaamy v. Oeylon State Mortgage Bank
1976 Present: Tennekoon. C. J., Thamotheram, J., and
V. RAMASAMY, Petitioner and CEYLON STATE MORTGAGEBANK and others, Respondents
S. C. 443/71—In the matter of an Application for a Mandate in thenature of a Writ of Certiorari
Certiorari—Principle of laches—Addition of Parties—Determinationmade by State Mortgage Bank under Section 70 B (6) oj FinanceAct No. 33 of 1968—Vesting Order made under Section 70 C (2)of the said Act.
An applica'ion for a Writ of Certiorari was filed in August 1971against the Ceylon State Mortgage Bank and one ‘ A ’ to quash adetermination made by the Bank under Section 70 B (6) of theCeylon State Mortgage Bank and Finance (Amendment) Act No. 33of 1968 in respect of the redemption of a land. The Minister whomade the Vesting Order under Section 70 C (2) of the said Act wasnot a par y to the application for the Writ of Certiorari. On objectionbeing taken by the Respondents, that the application was notproperly constituted in the absence of the Minister as a partyrespondent, the petitioner moved in 1975 to add the Minister as aparty to the application. From 1971 till the end of 1974, the matterhad been in abeyance and the record does not indicate the reasonsfor this delay. The Minister objected to being added as a party onthe ground that the Ves ing Order was made as far back as 1970 andthe present application to amend the Petition by adding him as aparty was belated. It was contended on behalf of he Petitioner thatthe Minister was not a necessary party but a useful party for thecomplete and effectual adjudication of the ma ter in issue, inasmuchas the application for certiorari is directed against the determinationof the Bank and not against the Vesting Order as such and noprejudice would be caused by adding the Minister as a party at thisstage.
(1) Although in the scheme of the Act the Minister is interposedmerely for the making of the Vesting Order, it is howeverthat order which affects the rights of par ies and enablesan aggrieved person to come into Court. Accordingly anattack on the determination of the Bank alone is insuffi-cient without the presence of the Minister also as a partyto the application for relief.
(2) The validity of a plea of delay must be fried on principleswhich are substantially of an equitable nature. '
Application lor a Writ of Certiorari.
C. Ranganathan with S. Mahenthiran for the Petitioner.
J. W. Subasinghe for the 1st Respondent.
C. Chellappah for the 2nd Respondent.
G. P. S. de Silva, Deputy Solicitor-General for the 3rd and 4th
Cur, adv. vult
WAN AS UNDER A, J.—Ramaaamy v. Ceylon State Mortgage Bank
March 12, 1976. Wanasundera, J.—
This application for a Writ of Certiorari was filed on
10th August 1971 against the Ceylon State Mortgage Bank andSelladurai Ariara.nam alias Alagaratnam, seeking to quash adetermination made by the State Mortgage Bank under section70(B)(6) of the Finance Act, No. 33 of 1968, in respect of theredemption of a land.
The matter came up before this Court on 11th August 1971and the Court directed the issue of notices on the respondents. Itcame up again on 17th September 1971 after the service of noticeon the respondents and the respondents were given a month’stime to file counter-affidavits. On 28th October 1971 the 2nd res-pondent filed his objections and on 15th November 1971 objec-tions were filed by the 1st respondent.
Among the objections taken by the respondents was that thepetitioner did not challenge the Vesting Order made by theMinister of Finance in respect of this property ; that the Ministerhad not been made a party to the application and accordinglythe petition was not in due form. On 22nd December 1971 thepetitioner filed a further affidavit, the contents of which are notmaterial for the purpose of this Order.
The next entry in the record is dated 26th March 1974, whenthe Attorney-at-Law for the Peoples’ Bank filed his proxy. Bythis time, Law No. 16 of 1973 had come into operation and thepower of acquisition which had been vested in the State Mort-gage Bank was now transferred to the Peoples’ Bank.
There is no minute or entry in the record showing or indica-ting the reason for the inordinate delay from 1971 to 1974. Ithas been alleged by the respondents that prior to 1974 it hasbeen the practice that a petitioner would take steps to have anapplication filed by him brought up for early hearing. It wastheir contention that this long delay was due entirely to remisson the part of the petitioner. Mr. Ranganathan, however did notaccept this position and stated that there has never been anyclear-cut or uniform practice on this question as suggested bythe petitioner.
The matter appears to have been listed again on the 22nd ofNovember 1974, when it was postponed on an application madeby counsel for the petitioner, Mr. Ranganathan, who had beenretained in the case for the first time. A minute of the day’sproceedings shows that the Court directed that this applicationbe listed on a date convenient to counsel.
WANASTJKDEBA, J.—Ramasamy v. Ceylon State Atortgage Sank
The matter came up again on 23rd January 1975 and whattranspired on that date can be gathered from the order made bySamerawicKrame J., which is as follows : —
“ Counsel for the respondent submits that the Minister ofFinance should be a party to this application in as much asthe petitioner is questioning the validity of the vesting ordermade by him. In view of this objection Mr. Ranganathanstates that he will amend his petition by adding the Minis-ter of Finance as a party and formally seeking the reliefthat the vesting order should be quashed. Counsel for therespondents have no objection to the amendment but learn-ed Counsel for the 2nd respondent states that he has takenthe objection in the papers filed by him and that he isentitled to costs. The question of an order for any costs infavour of the 2nd respondent by reason of the adjournmentmay be considered at the final stage when the order is madeon the application.
The application to stand out for papers to be filed by thepetitioner. ”
Thereafter this application has come up before Court on anumber of occasions. The Minister of Finance, Dr. N. M.Perera, was then added as a party and on his vacating office, thepresent holder of that post was substituted in his place. Boththese persons appear on the record as the 3rd and 4th added-respondents.
Objections were filed on behalf of the then Minister ofFinance stating that he objected to being added a respondenton the ground that the Minister’s Vesting Order was made asfar back as 1970 and the present application to amend the peti-tion by adding him as a party was belated. The present Minis-ter of Finance has filed a statement to the effect that he abidesby the objections already filed on behalf of his predecessor.
This application was listed before us for a discussion of thelimited question of whether the addition of the Minister ofFinance at this stage should be allowed. The Court does notintend to go into the merits of the petition at this preliminaryhearing.
Counsel appearing for the Minister referred to a number ofauthorities and submitted that due to the excessive delay orlaches of the petitioner, the Minister should not be added as apart.v. Apart from the normal principles relating to delayedapplications, Mr. de Silva argued that certainty, associated withpublic and official acts, would be seriously affected if persons
WANASUNDERA, J.—Ramaaamy v. Ceylon Slate Mortgage Bank 613
who have slept over their rights are permitted to come and un-settle transactions after the lapse of a long period of time. Heargued that the Minister was a necessary party to the applica-tion and he ought to have been on the record from its inception.The application to add him in 1975 in respect of an order hemade in 1970 is too late and should be refused.
Mr. Ranganathan argued that the Minister was not a neces-sary party to the application, but would be a useful party forthe complete and effectual adjudication of the matter in issue.He states that his application is directed against the determina-tion made by the State Mortgage Bank and not against theVesting Order as such. He further states that if the determi-nation of the Bank is a nullity, owing to a want of jurisdictionover the subject-matter, all subsequent actions and orders found-ed and based on that determination are likewise nullities andwould fall to the ground along with the determination. Hestated that, since the attack is only on the determination madeby the Bank, there is no contribution that the Minister can use-fully make in disposing of the actual issue now before theCourt.
1 am unable to agree with Mr. Ranganathan in respect ofsome of these submissions. I am of the view that the Ministershould properly have been a party to the application from thevery outset. I cannot also agree with him when he says that theattack on the determination of the Bank is alone adequate toenable him to obtain the necessary relief in the case.
An examination of the scheme of the relevant law is helpfulin placing these arguments in their correct perspective. Itwould appear that the State Mortgage Bank has taken over thepowers that were at one time vested in the Government for re-demption of lands under the Bunds Redemption Ordinance. Ina proceeding under these provisions, the relevant determinationis made by the Bank. Once a determination is made, it isbrought to the notice of the Minister of Finance, and it is theMinister who is vested with the power to make the actual Vest-ing Order. Although the Minister makes the order, the Vest-ing Order vests the property in the Bank and it is also the Bankthat thereafter takes the necessary steps to obtain possession ofthe land. It will be apparent from this scheme that the Minis-ter is internosed merely to make the Vesting Order, though heappears to have a discretion in making this Order. In my view,
WANASTXNUERA, J.—Itarmanamy v. Ceylon Slate Mortgage Bank
once the stage of a Vesting Order is reached and a VestingOrder is made by the Minister, it is that order which will affectthe rights of the parties and enable an aggrieved party to comeinto Court.
In this context the prior determination made by the Board—however important it may be—is a step in the proceedings andmust be regarded, along with the Minister’s Order, as twophases of one single operation. Although I take the view thatthe Minister’s Vesting Order must also be brought up in thisapplication, there is, however, much substance in Mr. Ranga-nathan’s submissions that the real matter in issue in this appli-cation is the determination made by the Bank and not theMinister’s Vesting Order. It may be true that the Ministercan make little or no contribution to the issue now oefore theCourt, but that would not, in my view, absolve the petitionerfrom making him a party and giving him notice of this appli-cation.^
The next question I have to decide is whether due to lacheson the part of the petitioner the Court should uphold the objec-tion of the added-respondents to his being added as a party.
“ Delay defeats equity ” is one of the main principles ofequity and constitutes the foundation of the defence of laches.This defence corresponds to the statutory law of limitations inthe common law. It has been adopted by the common lawcourts, but it seems that the factors that should govern theapplication of this principle in the common law courts may besomewhat different from that under equity jurisdiction.
The principles of laches have not been applied automaticallyor arbitrarily or in a technical manner by Courts of Equitythemselves. The Privy Council in the case of Lindsay PetroleumCompany vs. Hurd, 1974 Law Reports, 5 P.C. 221 at 239, slatedin the clearest terms the manner in which the Courts of Equityhave applied this doctrine :
“ The doctrine of laches in Court of Equity is not anarbitrary or. a technical doctrine. Where it would bepractically unjust to give a remedy, either because the partyhas, by his conduct, done that which might fairly be re-garded as equivalent to a waiver of it, or where by his con-duct and neglect he has. though perhaps not waiving thatremedy, yet put the other party in a situation in which it
WAKASTXNDERA, J.—Ramasamy v. Ceylon State Mortgage Bank 510
would not be reasonable to place him if the remedy wereafterwards to be asserted, in either of these cases, lapse oftime and delay are most material. But in every case, if anargument against relief, which otherwise should be unjust,is founded upon mere delay, that delay of course notamounting to a bar by any Statute of Limitations, thevalidity of that defence must be tried upon principles sub-stantially equitable. Two circumstances, always importantin such cases, are, the length of the delay and the nature ofthe acts done during the interval which might affect eitherparty and cause a balance of justice or injustice in taki ngthe one course or the other, so far as relates to the remedy. ”
It may be noted that where the Courts of Equity were con-cerned, one defeated in equity by reason of this defence, maystill have his remedy in common law. As for the common lawcourts they have invariably taken into consideration such factorsas the availability of an alternative remedy along with acquie-scence and the existence of facts such as the conduct of theparties and any developments which may render it inequitableto grant relief, when applying this doctrine. In India, how-ever, we find, since the inception of the Republican Constitution,laches has become a defence by itself to applications containingan element of delay.
The cases which have been cited to us show that the Courtshave considered the question of delay and laches in a variety ofsituations. In the English case, Rex vs. Stafford Justices, (1940)2 K. B. 33, relied on by Mr. de Silva, it is clear that delay wasnot the sole ground for the refusal of the appl cation. The judg-ment shows that the property concerned had not only been builtupon subsequent to the issue of the impugned certificate, butthe houses so constructed had even been sold to third persons.In the local case of Gunasekera vs. Weerzkoon, 73 N.L.R. at 262,the delay referred to in the judgment was not the sole groundfor the refusal of writ. The Court stated that an alternativeremedy was available to the petitioner. In the case of Gooneti-leke vs. Government Agent, Galle, reported in 47 N.L.R. 550,the petitioner applied for a Writ of Certiorari or Mandamus todeclare void an election to a Village Committee. When thematter came up for hearing, the respondents took up a prelimi-nary objection to the petition that the successful candidate hadnot been made a party to the application. It would appear thatthe petitioner then made an application to add the successful
WANASUNJDERA. J.—Ramasamy v. Ceylon State Mortgage Bank
candidate as a party-respondent. Keuneman, J. said that theapplication came at too late a s.age in the proceedings. The delayin this case is of a different nature from that now under consi-deration. The delay there has no substantive element in it and^eemsr purely procedural in kind. It is like a case where a judgewould resist patting back the case to an earlier point in theproceedings when once the trial has commenced. Further, it isalso a case where the objection was taken by the original partiesto the application.
In Vinnasithamby vs. Joseph, reported in 65 N.L.R. 359, theCourt purported to follow the above case. The facts of this caseare similar to the present one. Here too, the parties noticedobjected to their being added on the ground of delay.Weerasuriya, J. said :
“ If all the preliminary steps had already been taken(such as the filing of objections and affidavits by the res-pondents) and the matter was ready for inqu'ry into thesubstantive application before the Court, I would respect-fully agree that it was too late for ihe petitioner to havemoved that further parties be added.”
With all respect to the learned Judge, it seems that he hadnot tried the validity of the defence on its own merits. The testhe has adopted is one of maturity or ripeness of the case forhearing. It would have been more satisfactory if in these cir-cumstances the question answered by him was formulated interms of delay or laches and not as a narrow procedural matter.
In the case of Wijegoonewardena vs. Kularatne. reported in51 N.L.R. 453, Swan, J. refused to grant a Writ of Quo Warrantowhich was brought five months after an election. There was nodispute in the case that the respondent had sat and voted as amember during this period. The Court held that the successfulcandidate had a right to expect that the issue of the validityof his elect;on should be disposed of as quickly as possible. Incoming to the conclus'on, the learned Judge has not gone into adiscussion of the law on this matter.
The facts of the present case are substantially different fromthese cases. As shown earlier, the ma'n attack is on the deter-mination made bv the State Mortgage Bank. Gn"e the determi-nation of the Bank is put in issue, the Vesting Order is itself,from th^t noint of time, put in jeopardy and the application toadd the Minister at this stage should not therefore cause any
WANASUNDERA, J.—Ramcmamy v. Ceylon Stale Mortgage Bank 517
undue prejudice to him or anyone else. For the purpose of thisorder, I have assumed that there has been no delay in the■original application filed in 1971.
Mr. Ranganathan has also stated that there is no materialbefore Court to indicate that the property concerned has in anyway undergone a change since the date of the determinationwhich might make it inequitable for this Court to make an orderin favour of the petitioner.
It is also a matter of some significance that the 1st and 2ndrespondents, who are the parties most concerned in this matter,now have no objection to the addition of the M'nister. In thesecircumstances the stand taken by the State is a little surprising,particularly when the matter in issue is whether or not therehas been a usurpation of jurisdiction by a statutory body at theexpense of the citizen. The argument that there should be cer-tainty about official acts is a statement that a court readilyunderstands, but such a principle cannot be applied indiscrimi-nately, but should be done carefully and only in appropriatecases. The ac s involved here do not have that pubi c charactergenerally associated with official acts. The present transactionrelates to the redemption of a land for the benefit of an indivi-dual, namely the original mortgagor.
It may also be mentioned that the learned Deputy Solicitor-General has based all his arguments on the assumption that thislong delay should be attributable to the petitioner, and thepetitioner alone. I have referred in the early part of tlrs judg-ment. to the sequence of dates show ng the progress of the appli-cation after it was filed in Court. According to these entries thepetitioner may not be responsible or may not be ent.rely res-ponsible for the present state of affairs.
Finally, it is my view that when we are dealing with a matterconcerning the extent of the powers and juried c ion, wh ch isreoosed in us, to be exercised for the public good, we shouldhesitate to fetter ourselves with arb trary nfes, unless such acourse of action is absolu elv necessary. The principles of lachesmust, in my v'ew, be applied carefully and discr’minat ngly andnot automatically and as a mere mechanical device.
For these reasons, I am of the view that, in the circumstancesset but above, the Minister of Finance should be added as aparty respondent. In coming to this conc1us:on, I have not in anyway considered the merits of this application.
‘Tennekoon, C.J.—I agree.
Thamotheram, J.—I agree.
Application to add party allowed.