VISUVALINGAM AND OTHERS v. LIYANAGE AND OTHERS

030-SLLR-SLLR-1983-2-VISUVALINGAM-AND-OTHERS-v.-LIYANAGE-AND-OTHERS.pdf


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Visuvalingam and Others v. Liyanage and Others
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VISUVALINGAM AND OTHERS
v.
LIYANAGE AND OTHERS
SUPREME COURT
WANASUNDERA. J.. RATWATTE. J.. SOZA. J.. RANASINGHE. J. AND RODRIGO. J.
S.Cf APPLICATIONS NOS. 47/83. 53/83 And 61/83
25. 26. 27. 28 AND 31 OCTOBER 1983 AND
2. 3. 7. 8 AND 9 NOVEMBER 1 983.
Fundamental Rights — Emergency Regulations (Miscellaneous Provisions andPowers) under Public Security Ordinance — Prohibition by Competent Authorityto print, publish and distribute newspaper called Saturday Review — Closure ofpress — Violation of fundamental rights guaranteed under Articles 14(1) (a), (c)and (g) and 12(1) and (2) of the Constitution — Locus standi of a company.
New Era Publications Ltd., a company along with its shareholders and directorsin case No. 47/83 complained of infringement of their fundamental right offreedom of speech and expression including publication set out in Article14(1 )(a) and to the right of freedom to engage by themselves or in associationwith others in any lawful occupation, profession, trade, business or enterprisesset out in Article 14(1)(g). The 1st to 6 petitioners are citizens of Sri Lanka andare seeking to vindicate their own fundamental rights as citizens and havemerely utilised the institution of a company (7th petitioner) to exercise theirfundamental right of freedom of speech including publication (Article 14(1)(a)and the fundamental right of freedom to engage with one another in thenewspapers business (Article 14(1)(g). In case No. 53/83 and 63/8 the samepetitioners complain of the infringement of their fundamental rights guaranteedto them under Articles 14(1)(a). 14(1)(g) and 12(1) and 12(2) of theConstitution. Only citizens are endowed with fundamental rights under Articles14(1)’and 1 2(2) but Article 12(1) guarantees equality before the law and equalprotection of the law to all persons.
The 1st respondent made order in terms of Regulation 14 of the EmergencyRegulations that no person shall print, publish or distribute or in any way beconcerned in the printing, publication or distribution of the newspaper SaturdayReview and also that the printing press where the Saturday Review was printedbe closed. The petitioners allege:
that the orders were made mala fide and in abuse of the powers conferredby Regulation 14(3) and not for a legal purpose but for an ulterior purpose;
that they were made mechanically, perfunctorily, unreasonably and withoutaddressing his mind to the relevant facts and circumstances:
the orders were made with the object of masking the true purpose whichwas to prevent the publication of news and views which may lead to criticism ofaspect of government policy despite the fact that much criticism as had beenpublished were made bona fide in respect of public affairs.
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Held —
Although the freedom of speech and expression is an essential prerequisite forthe purpose of successfully preserving democratic institutions and the freedomof the press embraces the freedom to propagate a diversity of views and ideasand the right of free and general discussions of all public matters includingmatters not palatable to the Government or to the majority of people in thecountry, the Saturday Review carried material that must necessarily attract theattention of the authorities at a time when there are unsettled conditions in thecountry as today. It highlights the atrocities and excesses of the police and thearmed services. In general, editorial policy inclines towards the radical groupswaging a struggle against the State and. if not explicitly at least implicitlyeulogises the terrorists and praises the sacrifices they have made. In the presentcontexts it cannot be said that the competent authority (1 st respondent) was sounreasonable or wrong when he said that the impugned orders were made asthe editorial policy of the paper was extremely prejudicial to the security andsafety of the country and its citizens.
The fundamental rights guaranteed by the Constitution cannot by their verynature be interpreted as being absolute rights. There are well recognisedrestrictions and exceptions to the exercise of these rights. Freedom of speech,press and assembly are dependent upon the powers of Constitutionalgovernment to survive. If it is to survive it must have the power to protect itselfagainst unlawful conduct and under certain circumstances against incitementsto commit unlawful acts.
Apart from a fatal prohibition and ban on certain topics offensive to society andorderly government, freedom of speech in other matters may be circumscribedby time, place and circumstances. What is permissible at one place and timemay not be permissible at another place or time.
In dealing with an emergency situation, courts have always been prepared togive the executive sufficient leeway in making decisions affecting the safety ofthe people and the security of the country. These decisions have to be maderapidly and in the light of information then available and under the constraint ofavailable resources. It is not for the Court to substitute its opinion for that of thecompetent authority where the court is satisfied that the material before him wasreasonably capable of supporting the view and opinion formed by him.
(2) Held further (Wanasundera. J. and Ratwatte, J.. dissenting)
The 7th petitioner-company is not merely an institutional device functioning asan agent or trustee for the shareholders. This is not a case where theshareholders' right of publication in'association with others is directly affected.The party directly affected is the company. The company and its shareholdersare in law and even in fact two distinct entities. The company must be treatedlike any other independent person with rights and liabilities approprite to itself
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The impugned orders directly affect the right of speech and expression andpublication of the 7th petitioner-company who is seeking compensation for theloss sustained by it only for itself. The impugned orders at most affect the 1 st to6th petitioners indirectly. Any rights of the 7th petitioner-company that may beaffected are not fundamental rights recognised and enforceable under theprovisions of our Constitution. Hence the applications complaining ofinfringement of the fundamental rights guaranted by Articles 14( 1 )(a), (e) and (g)and 12(2) are not maintainable for want of competence.
Cases referred to :
Bennect Coleman & Co., Ltd., v. Union of India. AIR 1973 SC 106.
The Express Newspapers Ltd., v. Union of India AIR 1958 SC 578.
Sakai Papers Ltd., v. Union of India AIR 1962 SC 305.
R. C. Copper v, Union of India (1970) 35 CR 530 AIR 1970 SC 564 (BankNationalisation case).
Gedhra Electricity Co., v. State of Gujerat AIR 1975 SC 32.
State Trading Corporation of India Ltd., v. the Commercial Tax Officer andothers MR 1963 SC 1811.
Tata Engineering and Locomotive Co.. Ltd., v. State of Bihar (Telco Case)AIR 1965 SC 40.
Termini ello v. Chicago (1949) 93 US Lawyers Edn. 1151.
American Communication Association v. Dodds (1950) 339 US 312.Lawyer Edn. 927.
State of Gujarat v. Shri Ambica Mills AIR 1974 SC 1300.
Colonial Bank v. Whinney 11 AC 426.
Tunstall v. Steigmann 1962 All ER 417.
Gramaphone & Typewriter Ltd., v. Stanley 1908 2 KB 89. 98.
R. v. Chief Immigration Officer. Heathrow Airport. Exparte Bibi 1976 IWLR979.
R. v. Secretary for the Home Department ex parte Fernandes Times LawReport of November 20. 1980.
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Farima Neld v. European Communities Commission (1974) 2 CMLR 338.
Neville Fernando and others v. Liyanage and others — Janatha Press CaseS.C. Application No. 1 34/1982 (S.C. Minutes of 9.2.83.)
Neville Fernando v. Liyanage — S.C. Application No. 116/82 S.C. Minutesof 14.12.82.
Saloman v. Saloman & Co., Ltd., 1897 AC 22
Short v. Treasury Commissioner 1 948 1 KB 116.
Padfield v. Minister of Agriculture, Fisheries and Food 1968 AC 997.
Associated Provincial Picture House Ltd., v. V/ednesbury Corporation1948 1 KB 223.
Secretary of State for Education and Science v. Tameside MetropolitanBorough Council 1976 3 WLR 641.
Hirdaramani v. Ratnavale 75 NLR 67.
Siriwardena and Others v. Liyanage and Others (Aththa Case) — S.C.Application No. 120/82 — S.C. Minutes of 27.1.1985.
In re W. (An Infant) 1 971 AC 682. 700.
Secretary of State for Employment v. ASLEF (No. 2) (1972) All ER 949967 (1972) 1 WLR 1370.
Liversidge v. Anderson (1942) AC 206, 239.
Gunasekera v. Ratnavel 76 NLR 316.
Ras Behari Lai v. King Emperor (1933) 60 Indian Appeals 354. 361.
Anisminic Ltd., v. Foreign Compensation Commission — (1969) 1 All ER208.
I.R.C. v. Rossminster Ltd. 1980 1 All ER 80!
NakkudaAli v. Jayaratne 1951 AC 66.
A.G. of St. Christopher v. Reynolds 1979 3 All ER 129 (P.C.)
A.G. of Canada v. Hallet & Cary Ltd. 1952 AC 427.
SC Visuvalingam and Others v. Liyanage and Others (Wanasundera. J.)315
APPLICATIONS complaining of infringement of fundamental rights.
S. Nadesan. Q.C. with S. Mahenthiran and S. H. M. Reeza for petitioners.
M S. Aziz Deputy Solicitor General with Parakrama Karunaratne State Counselfor respondents.
Cur. adv. vult
18 November, 1983.
WANASUNDERA. J.
The "Saturday Review" is a weekly newspaper in English andwas originally published by a Company called Kalai Nilayam. ThisCompany was formed in January 1982 and had the objectsbroadly described in the publication brochure P1 issued by theCompany —
to establish a two-way communication between allpersons and nationalities in this country;
to stand up against injustice, acts of discrimination andthe violation of the rights of human rights and freedom.
Mr. Nadesan stated that the "Saturday Review" devoted itself toboth political and cultural matters concentrating mostly on thedevelopments and events in the Northern peninsula. A briefsurvey of its back numbers shows that its material which is variedand of a fairly high standard would have catered to the Englishspeaking intelligentsia of this country.
In August 1 982 the "Saturday Review" was bought by theCompany called New Era Publications Ltd., the 7th petitioner.The shareholders, directors, and the New Era Company are, it isalleged, motivated by the same considerations set out in thebrochure referred to. in the conduct of this newspaper. The NewEra Publications Ltd., is a limited liability company without ashare capital but with its liability limited by the guarantee of itsmembers. It consists of seven shareholders, the 1st to 6thpetitioners and one Mr. K. Kandasamy, who is at the momentabroad and not made a party to this application. These seven
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members also constitute the sole directors of the Company. Allof them are citizens of Sri Lanka.
The Company has its registered office at No. 118. FourthCross Street. Jaffna, but the printing of the paper has beenentrusted, on a commercial basis, to the St. Joseph's CatholicPress, which functions at another address in Jaffna and has noother connection with New Era Publications Ltd.
As a general, background to the facts of this case, it should bementioned that on the 18th of May 1983 a state of Emergencywas declared by the Government under the Public SecurityOrdinance. With the declaration of Emergency, there wasbrought into operation from the same date a set of EmergencyRegulations valid for a period of one month, but which could berenewed after debate in Parliament from month to month.
The 1 st respondent, who is the Secretary, to the Ministry ofState, has been appointed Competent Authority under theprovisions of the Emergency Regulations (MiscellaneousProvisions and Powers) Regulation Nos. 1. 2 and 3 of 1983. forthe purpose of the Regulations. The 2nd respondent is theInspector General of Police and the 3rd respondent is theAttorney-General.
On the 1 st of July 1983. the 1 st respondent, acting in terms ofRegulation 14 of the said Regulations, made order (P2) that—
no person shall print, publish or distribute or in any waybe concerned in the printing, publication or distributionof the newspaper " Saturday Review " for a period of onemonth from the date of the order.
the printing press in which the said newspaper wasprinted shall, for a period of one month from the date ofthe order, not be used for any purpose whatsoever.
The Inspector General of Police, acting under and in pursuanceof the authority granted by this order, thereupon sealed the
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office of the " Saturday Review " where only the editorial andadministrative work takes place. The printing press, namely theSt. Joseph's Catholic Press, was however not sealed. Similarorders have been made every time with the renewal of theEmergency.
Mr. Nadesan mentioned two infirmities in connection with thisorder to show that it had not been duly made by the CompetentAuthority as he had not brought his mind to bear on the matterbefore him. First, as regards the period concerned. Since theEmergency operates from the 18th of one month to the 1 7th ofthe succeeding month, the Competent Authority erred when hemade an order on 1 st July 1 983 to operate for a period of onemonth from that date. The second complaint is as regards theorder for the closure of the printing press where the *' SaturdayReview " was printed. It does not appear that the CompetentAuthority was aware that the printing was being done on acommercial basis by another organisation at the St. Joseph'sCatholic Press. This mistake was apparently discovered later and,as stated earlier, the St. Joseph's Catholic Press was not closedand it continued to attend to whatever other business it had.These mistakes however do not sufficiently establish that theCompetent Authority did not give his mind to the need to ban thepublication of this paper.
The petitioners claim that their fundamental rights guaranteedby Article 14(1) (a), (c) and (g) are violated by the above orders ofthe Competent Authority. The respondents however have deniedthat these orders and acts are illegal and have also taken up, byway of defence, two rulings of this Court to the effect that thepetitioners lack locus standi and are precluded from coming intoCourt and obtaining relief. They are the judgments ofSharvananda J. in S.C. 116/82 (S.C. Minutes of 14.12.1982)and S.C. 134/82 (S.C. Minutes of 7.2.1983). Each of thesejudgments is a judgment of a bench of three judges. The veryfact that the Chief Justice has referred this matter tothis larger bench for decision, at the request of counsel,is precisely for the reason that the matter should bereconsidered. Although I myself was a member of the bench inS.C. 134/82.1 found that the issue in that case had already been
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decided in the earlier application which involved the sameparties and the same subject-matter. I was therefore of the viewthat S.C. 1 34/82 could be decided on the ground of res judicataalone. In that view of the matter the legal question that is nowbefore us was not considered' by me. The present larger benchhas specifically assembled to reconsider this matter and,because I had left the issue before us open for future decision, Iam now at liberty to give my mind to this matter.
The petitioners allege that their fundamental rights underArticle 14 have been violated. The relevant provisions. Article14(a), (c) and (g) are worded as follows
"14. (1) Every citizen is entitled to —
(a) the freedom of speech and expression includingpublication ;
the freedom of association ;
the freedom to engage by himself or in associationwith others in any lawful occupation, profession,trade, business or enterprise ; "
Mr. Nadesan drew our attention to certain significant differencesbetween the above provisions and the corresponding provisionsof the Indian Constitution, particularly to the words " inassociation with others " in Article 14(1) (g) and their absence inIndia, which makes our provisions much larger in content thanthe corresponding Indian provision. This item is of the greatestsignificance in this case.
Relying on the provisions of Article 14(1) (a), (c) and (g), Mr.Nadesan submits that every citizen in this country has freedom ofassociation, namely to freely associate with one another and toorganise themselves in such a way as to enable them to engagein any lawful business or enterprise. In this case this right is thecarrying on in association with others the business or enterpriseof a newspaper in furtherance of the fundamental right offreedom of speech and expression, including publication.
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guaranteed by Article 14(1) (a). The petitioners in their capacityas citizens of this country are exercising their fundamental rightthrough the institutional device of a company which they wereentitled in law to bring into existence. This freedom, they say, hasbeen eroded by-the closure of the Saturday Review by executiveor administrative action. Mr. Nadesan stressed particularly theright of a citizen to use an institutional device to enjoy or exercisethe fundamental rights involved in this case. The Constitution, hesays, permits the exercise of such rights in association withothers. The position here is even stronger than the legal positionobtaining in India.
In this case they have utilised the institution of a company,since it gave them certain advantages. For example, their liabilityis limited, they cannot be sued for the debts of the company, andthey are not liable to pay taxes due from the company in respectof its profits. It cannot therefore be said that the petitioners, byresorting to this device, intended to forego their rights as citizenswhen on the other hand they have resorted to this device for thebetter exercise of their fundamental rights. By their acts they didnot intend to transfer, nor have they transferred, theirfundamental rights of freedom of speech to the company whichis in law not entitled to enjoy such a right.
Mr. Nadesan further submitted that, since the Constitutionenjoins all State organs to secure and advance Jthesefundamental rights, the artificial and purely civil law conceptsassociated with company law, agency or partnership law whichhad taken shape due to the exigencies of trade, commerce andbusiness should not be interposed to prevent the full operationand the realisation of a fundamental right guaranteed to a citizenby the Constitution. On the contrary, he submits that since “infact" (in contradistinction to "in law") a company is only afictitious person and its own rights and interests are in truthowned by and exercised for the benefit of actual human beingswho are its shareholders, there should be no difficulty in the wayof a court which wishes to give full effect to these fundamentalrights from acting accordingly. Mr. Nadesan rightly stressed thatwe are here dealing with one of the most important of thefundamental rights, namely the right of free speech and
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expression, including publication. It embraces not only a naturalinstinct involving the basic need of man to express himself butalso equally important social and political interests, namely theexchange of information and ideas and free discussion betweenmembers of the community for the welfare of society. This wouldbe especially necessary in a Parliamentary democracy. Bruce —" The American Commonwealth ”, page 274 — observes in thisconnection :
" The more completely popular sovereignty prevails in acountry so much the more important is it that the organs ofopinion should be adequate to its expression, prompt, fulland unmistakable in their utterances . . . .The press, andparticularly the newspaper press, stands by commonconsent first among the organs of opinion …. Theconscience and commonsense of the nation as a wholekeep down the evils which have crept into the working ofthe constitution, and may in time extinguish them …. Thatwhich, carrying a once famous phrase we may call thegenius of universal publicity, has some disagreeable results,but the wholesome ones are greater and more numerous.Selfishness, injustice, cruelty, tricks and jobs of all sorts,shun the light; to expose them is to defeat them. No seriousevils, no rankling sore in the body politics, can remain longconcealed, and when disclosed it is half destroyed. So longas the opinion of a nation is sound, the main lines of itspolicy cannot go far wrong."
The decisions of both the U.S. and Indian Supreme Courts arestudded with quotations and statements expressing similarsentiments. It is unnecessary to refer to all those authorities. ButMr. Nadesan brought to our notice two documents — one. theManifesto of the United National Party, and the other, a bookletpublished by our present President Mr. J. R. Jayewardenawhen he was the Leader of the Opposition and Leader in theNational State Assembly of the United National Party. Thisbooklet constitutes the written submissions which he and hislawyers submitted to the Constitutional Court on behalf of theparty when the Sri Lanka Press Council Bill was being
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considered by the Constitutional Court under the previousConstitution. This, Mr. Nadesan submitted, was a mostilluminating and useful document, thoroughly researched,containing references to most of the leading cases including theBennet Coleman's case(1), which is quoted with approval.Having regard to its accuracy and comprehensiveness, Mr.Nadesan said, it relieved him of the necessity of searching for orreferring to other sources. This publication and the Manifestoprovided the background for the drafting of the presentconstitutional provisions relating to fundamental rights.
Mr. Nadesan relied strongly on the first six paragraphs, namelyparagraphs 1.1 to 1.6 set out below which he said contained asfull a statement as one can make of the nature and width of thefundamental right of free speech and expression guaranteed byour Constitution :
The Freedom of thought and expression and the freedomof the Press
The freedom of the Press is the essence of libertyand this is the source of all other liberties. If this freedom issuppressed, restrained or controlled, then the foundation forautocracy is laid. Freedom of speech is the basis of freedom ofthought. Speech is the institution by which man gives expresionto his right to think freely. If therefore the freedom of speech isaffected, it would equally affect the freedom of thought. In such acontext an examination of the structure of the Press would showthat it is an institution created by a developed society to conveythe thoughts of the people. It also provides the material for otherpeople to think and form their own opinion. This is offundamental importance. By the expression "Press" is meantevery media such as newspapers, books, magazines and theradio by which the thoughts of the people and the factual datawhich forms the basis of human thinking is conveyed to thepeople.
It is submitted that there are two priorities involved inthe concept of freedom of speech, namely—
the source from which the communication issues, and
perhaps the more important one. the recipient of thecommunication.
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The freedom to express one's thoughts is confined to a fewcompared to the wider circle to which freedom of expression isextended in so far as the recipient is concerned, namely thecommunity.
It is in the freedom of the recipient that public opinionhas its birth. The Press provides the data by which such opinionsfind their fullest expression. Therefore it is man's right as therecipient of information to look to as many sources- ofinformation as he likes ; and it is equally the duty of the Presswhich provides the information to seek it from as many sourcesas possible. If. however, the sources of information becomeconcentrated in one. or restricted to a few bodies, then theformation of ideas is limited. It is in such circumstances onlyproper that the sources of information available to the publicshould be enlarged rather than restricted; therefore there can beno justification for interference with the freedom of the Press.
Freedom of speech requires courage. If a person whogives information is timid or is reluctant to give facts then theformation of public opinion is restricted. The placing of anyrestrictions on the communication of data and opinion ashitherto communicated to the public is a matter which merits theclosest attention of any tribunal.
It is submitted that in a system of government based onuniversal suffrage both the issues and recipient of informationexpress themselves through the ballot. In such a system there isalways a tendency on the part of those in power who wish tomaintain their position of power to control the publication ofdata and opinion, because it might ultimately affect their tenure.Therefore, it is not uncommon to see those in power hedgingthemselves in with restrictions on the publication of data whichwould be the basis for the formation of public opinion.
It is submitted that in a free society the victory ofpersuasion over force could be ensured and achieved only bypermitting public discussion. A Constitution that seeks toexpress the aspirations of the people and ensures certain
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fundamental rights must therefore be interpreted not onlyagainst the background of the intentions of the framers of theConstitution but the mandate given by the people to suchpersons. It is submitted therefore that the fundamental rule ofinterpretation especially of constitutional documents is toexamine the thoughts which guided the enactors of thefundamental law. the motives and reasons which prompted thedraftsmen of the particular Constitutional instrument. A referencetherefore to the United Front Manifesto which was claimed to bethe basis upon which the Constituent Assembly received amandate from the people to frame a Constitution…."
An independent newspaper would, to a large extent, fulfil thesentiments and aspirations spelt out in the above passages. Therole of such newspapers is to inform the public, to criticisepersons and matters deserving criticism, and also to give anopportunity to the public for the free expression of publicopinion. In the recent contempt case against the Editor of theCeylon Daily News, the judgments of both the majority and theminority were to the effect that the freedom of speech is a mostvital -and valuable asset and that it does not admit of limitation,save.in the most exceptional cases permitted by the law.
For a proper appreciation of this fundamental right. Mr.Nadesan said it would have to be examined in the context of thePreamble and Articles 3 and 4 of the Constitution. He showed usthat the fundamental rights are part and parcel of the rights ofthe People reserved by them to themselves. He drew ourattention to the fact that those rights shall not be abridged,restricted or denied by any organ of Government, but on thecontrary there is an injunction that they should be secured andadvanced by them.—Article 4(d). I
I am of the view that there is substance in Mr. Nadesan'ssubmission that the conjoint effect of Article 14(1) (a), (c) and (g)is to enable the petitioners to act in association with others tocarry on the business of publishing the Saturday Review in theexercise of their fundamental right of free speech, expressionand publication. Unlike under the Indian Constitution, they cancontinue to act in association, notwithstanding the formation ofthe Company. Although the Company is, in the eye of the law a
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separate juristic person (with whom they have the closestcontact being not so much associated but actually integrated), ifwe have to give effect to the fundamental right, then we mustnecessarily regard that company as the medium or vehiclethrough which they are exercising their fundamental rights.
This is adequate to dispose also of the argument that if wewere to allow shareholders of a company to claim relief to whichthe company itself is disentitled since it is not a citizen, would wenot be allowing something to be done indirectly which the lawhas prohibited from being done directly? That argument wouldbe valid in a case where the shareholders are allowed to make aclaim on behalf of the Company. In such a case the shareholderscan only succeed if the court is prepared to " lift the veil " andlook behind the corporate structure. The present case is differentand is based on the distinction drawn in the Indian casesbetween shareholders who claim relief on behalf of the companywhich is impermissible and shareholders who claim in theircapacity as citizens by virtue of a fundamental right vested inthem in their own right. There is no reason why shareholdersclaiming in their own right should be denied relief if theguarantee of freedom of expression is to be protected andadvanced.
An examination of the Indian cases would be helpful at thisstage. In Bennett Coleman & Co. Ltd. v. Union of India (1), anumber of corporations plus the shareholders, the editors andpublishers challenged the Import Policy for Newsprint for 1972-73, declared by the Union Government as being violative ofArticle 19(1) (a) — freedom of speech and expression — andArticle 14 dealing with the equal protection clause. TheAdditional Solicitor-General appearing for this Union pleadedInter alia that “ the petitioners were companies and thereforethey could not invoke fundamental rights ”
The Indian Supreme Court, after referring to two previousdecisions, — The Express Newspapers Ltd. v. Union of India (2),and Sakai Papers Ltd. v. Union of India (3), said that in thosecases relief had been granted to petitioners as shareholders or
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editors of newspaper companies. The court then proceeded tostate as follows :—
" In the present case, the petitioners in each case are inaddition to the company the shareholders, the editors and thepublishers. In the Bennett Coleman group of cases oneshareholder, a reader of the publication and three editors of thethree dailies published by the Bennett Coleman Group are thepetitioners. In the Hindustan Times case a shareholder whohappens to be a Deputy Director, a shareholder, a Deputy Editorof one of the publications, the printer and the publisher of thepublications and a reader are the petitioners. In the ExpressNewspapers case the company and the Chief Editor of the dailiesare the petitioners. In the Hindu case a shareholder, theManaging Editor, the publisher of the company are thepetitioners. One of the important questions in these petitions iswhether the shareholder, the editor, the printer, the DeputyDirector who are all citizens and have the right to freedom underArticle 1 9(2) can invoke those rights for freedom of speech andexpression, claimed by them for freedom of the press in theirdaily publication. The petitioners contend that as a result of theNewsprint Control Policy of 1972-73 their freedom of speechand expression exercised through their editorial staff andthrough the medium of the publication is infringed. Thepetitioners also challenge the fixation of 10 page ceiling and therestriction on circulation and growth on their publications to benot only violative of but also to abridge and take away thefreedom of speech and expression of the shareholders and theeditors. The shareholders, individually and in association withone another represent the medium of newspapers through whichthey disseminate and circulate their views and news. Thenewsprint policy exposes them to heavy financial loss andimpairs their right to carry on the business of printing andpublishing of the dailies through the medium of the companies.
" In R. C. Cooper v. Union of India (4), which is referred to asthe Bank Nationalisation case Shah, J. speaking for the majoritydealt with the contention raised about the maintainability of thepetition. The petitioner there was a shareholder, a Director andholder of deposit of current accounts in the Bank. The locus
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standi of the petitioner was challenged on the ground that nofundamental right of the petitioner there was directly impaired bythe enactment of the Ordinance and the Act or any action takenthereunder. The petitioner in the Bank Nationalisation case,(supra) claimed that the rights guaranteed to him under Articles14, 1 9 and 31 of the Constitution were impaired. The petitioner'sgrievances were these. The Act and the Ordinance were withoutlegislative competence. The Act and the Ordinance intefered withthe guarantee of freedom of trade. They were not made in thepublic interest. The President had no power to promulgate theOrdinance. In consequence of hostile discrimination practised bythe State the value of the petitioner's investment in the shares isreduced. His right to receive dividends ceased. He sufferedfinancial loss. He was deprived of the right as a shareholder tocarry on business through the agency of the company ",
" The ruling of this court in Bank Nationalisation case (4). wasthis:
'A measure executive or legislative may impair the rightsof the company alone and not of its shareholders. It mayimpair the rights of the shareholders and not of theCompany; it may impair the rights of the shareholders aswell as of the company. Jurisdiction of the Court to grantrelief cannot be denied, when by State action the rights ofthe individual shareholder are impaired, if that action,impairs the rights of the Company as well. The test indetermining whether the shareholder's right is impaired isnot formal; it is essentially qualitative; if the State actionimpairs the right of the shareholders as well as of theCompany, the Court will not, concentrating merely upon thetechnical operation of the action, deny itself jurisdiction togrant relief.
" In the Bank Nationalisation case, (supra) this Court heldthe statute to be void for infringing the rights underArticle 19(1) (f) and 19(1) (g) of the Constitution. In theBank Nationalisation case (supra) the petitioner was ashareholder and a director of the company which wasacquired under the statute. As a result of the Bank
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Nationalisation case (supra) it follows that the Court findsout whether the legislative measure directly touches thecompany of which the petitioner is a shareholder. Ashareholder is entitled to protection of Article 19. Thatindividual right is not lost by reason of the fact that he is ashareholder of the company. The Bank Nationalisation case(supra) has established the view that the fundamental rightsof shareholders as citizens are not lost when they associateto form a company. When their fundamental rights asshareholders are impaired by State action their rights asshareholders are protected. The reason is that theshareholders' rights are equally and necessarily affected ifthe rights of the company are affected. The rights ofshareholders with regard to Article 19(1) (a) are projectedand manifested by the newspapers owned and controlled bythe shareholders through the medium of the corporation. Inthe present case, the individual rights of freedom of speechand expresion of editors. Directors and shareholders are allexercised through their newspapers through which theyspeak. The press reaches the public through thenewspapers. The shareholders speak through their editors.The fact that the companies are the petitioners does notprevent this Court from giving relief to the shareholders,editors, printers who have asked for protection of theirfundamental rights by reason of the effect of the law and ofthe action upon their rights. The locus standi of theshareholder petitioners is beyond challenge after the rulingof this Court in the Bank Nationalisation case (supra). Thepresence of the company is on the same ruling not a bar tothe grant of relief ".
It would be observed that the Supreme Court relied to a greatextent on an expression of opinion on this precise matter in /?. C.Cooper v. Union of India (4). popularly called the BankNationalisation case. Seervai in his Constitutional Law of India(2nd Edn) criticises that decision. At page 670 Mr. Seervaistates:
■ " It is clear that the rights of the banks were decided intheir absence and without their being heard. The petitioner
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came to court expressly stating that he did not challengethe Act as violating the Banks' fundamental rights but asviolating his aim and the court ended up by deciding thatthe Act violated the Bank's fundamental rights under Articles14. 19 and 31
Probably Mr. Seervai overlooks the express statement containedin paragraph 14 of that case where it is stated that an executiveor legislative measure " may impair the rights of the shareholdersas well as of the company " and on that ruling it was perfectlylegitimate for the Indian Supreme Court to arrive at theconclusion it did.
Furthermore the bench in the Bennett Coleman case, whichsought to explain the judgment of the Bank Nationalisation caseon this issue, included three of the judges who sat on theprevious bench and two of the judges had actually participatedin the earlier judgment. They are probably in a better positionthan Mr. Seervai to interpret their own judgment.
The rulings on this point, both in the Bank Nationalisation caseand the Bennett Coleman case were again referred to andfollowed in Godhra Electricity Co. v. State of Gujarat (5). This wasdecided by Ray C. J. and Mathew J. Ray J. had not expressed anopinion on this matter in the Bank Nationalisation case (4)though he wrote the leading judgment in the Bennett Colemancase (1). Similarly, Mathew J., who did not express an opinion onthis question in the Bennett Coleman (1) case, now quoted boththe above cases with approval in his judgment. So that we findthat in India there is a consistent line of authority in support ofthe principle contended for by Mr. Nadesan.
In Godhra case the 1st appellant was a company. The 2ndappellant was a shareholder and its Managing Director. Theappellants challenged the validity of a notice issued by theGujarat Electricity Board whereby it purported to exercise theoption of purchasing the electrical undertaking of the 1stappellant under section 6 of the Indian Electricity Act. Theappellants sought a declaration that the provisions of sections 6,7 and 71 of the Act violated the fundamental rights contained
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in Articles 14. 19(1) (f) and 19(1) (g) and 31 of the IndianConstitution.-
Mathew. J.. delivering the order of the court said—
"The undertaking, no doubt, belonged to the 1stappellant, a corporation. Not being a citizen, it has nofundamental right under Article 19. The 2nd appellant is ashareholder and the Managing Director of the Company. Ifhis right to carry on the business through the agency of theCompany is taken away or abridged, or, his right to adivisible share in future of the property of the company isdiminished or abridged in taking delivery of the undertakingwithout payment of the purchase price, there is no reasonwhy he should be disabled from challenging the validity ofthe sub-section ”.
He concluded by stating :
" We think the second appellant is entitled to challengethe validity of the sub-section on the ground that it abridgedhis fundamental right under Arts. 19(1) (g) and 19(1) (f) ",
In S.C. 116/82. my brother Sharvananda, J., has chosen totake a different view of this matter. After holding that a companycannot take advantage of the provisions of Article 14. headdressed himself to the question as to whether the shareholdersof a company can come forward and ask for relief when theCompetent Authority had sealed the printing press and preventedthe company from carrying on business. The answer to thisquestion my brother said depends on a proper appreciation ofthe relationship in law of shareholders to the company. Hisconclusion was in the following words :—
" I cannot subscribe to the concept that the shareholderscarry on business through the agency of the company ",
This conclusion, as stated earlier, overlooks the vital distinctionreferred to earlier appearing in the law in the BankNationalisation and the Bennett Coleman cases as against thesituation in the State Trading Corporation case (6) and the Tata
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Engineering & Locomotive Co. (7) case where the shareholdersclaimed only on behalf of the company. My brother proceeded asfollows
" I agree with Mr. H. M. Seervai that the decision in theBennett Coleman case with respect to shareholders' rightsvis-a-vis the act against the company is erroneous (videConstitutional Law of India (2nd Edn.) Vol. 1 at page 685) "
I have already dealt with the criticism of Mr. Seervai and shownthat it arises from a misunderstanding of a distinction the IndianSupreme Court has drawn between the case of a shareholdercoming forward on behalf of the company and seeking relief forand on behalf of the company and one where a shareholderpetitions court in his own right as a citizen for a violation of hisown fundamental right. The failure to grasp this distinction hasapparently led this eminent jurist to conclude that the BankNationalisation case and the Bennett Coleman case hadpurported to overrule the State Trading Corporation case and theTata Engineering & Locomotive Co. case.
Mr. Nadesan, who had undertaken a searching analysis ofthose cases, demonstrated to us that the two later cases have inno way affected the two earlier cases. The learned DeputySolicitor General himself confessed that he found it difficult tofollow Mr. Seervai's reasoning on this matter although he agreedwith Mr. Seervai's general conclusions. The Indian SupremeCourt has in the two latter cases proceeded on the basis of thevalidity of the two earlier cases and quite rightly held that,because the State Trading Corporation case and the TataEngineering & Locomotive Co. case dealt with a different aspectof this same matter, they had no controlling effect on the latercases. The Bank Nationalisation case and the Bennett Colemancase contain a refinement or further development of the principlelaid down in the State Trading Corporation case and the TataEngineering & Locomotive Co. case. The later cases proceed ona different legal and factual basis. The reference to propertyrights in the Indian cases is only incidental and has no
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controlling.effect on those decisions. They deal with more thanone fundamental right and my brother Sharvananda J. erredwhen he made the existence of a property right in India the basisfor distinguishing the Indian cases. In my opinion the rulings inS.C. Application No. 116/82 and S.C. Application No. 134/82are erroneous and should be overruled.
Turning to the merits. Mr. Nadesan claimed that the articlespublished in the Saturday Review were innocuous and shouldnot have drawn the intervention of the Competent Authority. TheState however challenges this statement. In the affidavit by theCompetent Authority, he states that the Saturday Review is apolitical newspaper advocating the cause of dividing the countryand the establishment of a separate State to be called Eelam.Many of the articles and items that have been publishedsuggested that the publishers had eschewed democraticprocesses based on non-violence as a means of resolving theproblems facing the Tamil people and openly encouraged theadoption of force and terrorism. The newspaper had also givenample publicity to the acts of the terrorist movements operatingin the North, particularly of the terrorist organisation called theTamil Eelam Liberation Front, and often eulogised such conductwith a view to encouraging the growth of that movement and tocountenance the use of force against the lawfully establishedGovernment of this country. Finally, the Competent Authoritysays that the Saturday Review is blatantly communalistic andconstantly highlighted alleged grievances and injusticescommitted against the Tamil community which were capable ofarousing communal feelings among this community andencouraged conduct prejudicial to the maintenance of publicorder and security. To Mr. Nadesan's statement that this paperalso carried articles of cultural and artistic interest, the learnedDeputy Solicitor-General submitted that interspersed among thepolitical artices. articles of undoubted artistic and cultural valueare sometimes found and this has been done advisedly as a" sugar coating ". to use his own words, or to disguise the highlytendentious material contained in the paper so as to give thenewspaper the appearance of a paper that is balanced and
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moderate in its views. Mr. Aziz also referred to the fact that thisnewspaper was directed to the intelligentsia, which included thestudent population who were in the forefront of this agitation.The newspaper appeared also to have large support from Tamilsubscribers abroad. In fact it has been suggested that theSaturday Review serves as a sort of medium of communicationbetween the various well-organised expatriate groups of Tamilsabroad, keeping them posted with the news and developments inthis country and operating as their mouth-piece fordisseminating radical views.
It would appear to me that, for the most part, the publishershave tried to live up to the objects, and ideals set out in thebrochure P1. Making due allowance for the regional interest andapproach of the publication, the publishers have tried to be asobjective as possible and have sought to produce a weeklynewspaper, which appears to be a cut above the averagenewspaper judged by journalistic standards.
I am in agreement with Mr. Nadesan when he says that thefreedom of speech and expression is an essential prerequisite forthe purpose of successfully preserving democratic institutionsand the freedom of press embraces the freedom to propagate adiversity of views and ideas and the right of free and generaldiscussions of all public' matters. Barring the exceptionscontained in Article 15(2) and (7). the object of freedom ofspeech and expression is " to foreclose public authority fromassuming a guardianship of the public mind through regulatingthe Press and speech ; it rests on the assumption that the widestpossible dissemination of information from diverse andantagonistic sources is essential to the welfare of the publicTermini ello v. Chicago (8).
Some of the material in the Saturday Review may not bepalatable to the Government or to the majority of people in thiscountry, but that by itself is no reason for imposing a sanction onthis paper if the fundamental freedom of free speech has anyworthwhile meaning. Unfortunately there has also crept into thispublication some material that must necessarily attract the
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attention of the authorities at a time when there are unsettledconditions in the country as today. Mr. Nadesan himself admittedthat one of the objects followed by the publishers was to high-light the grievances of the Tamil people by laying bare theatrocities and excesses of the police and the armed services. It isapparent that full rein has been given to this object. It cannotalso be gainsaid that this publication, being intimately concernedwith the aspirations of the Tamil community and under pressuresfrom public opinion in the North, has in its general editorialpolicy, found that it could not but help incline towards the radicalgroups waging a struggle against the State. It has at times, if notexplicitly, at least implicitly eulogised the terrorists and praisedthe sacrifices they have made.
Whether or not this material would pass muster in normaltimes need not concern us now. But in the present context Icannot say that the Competent Authority was so unreasonable orwrong when he was of the view that—
"… this editorial policy, was. in the context of thecircumstances prevailing in the country at the time the twoimpugned orders were made and to date, extremelyprejudicial to the security and safety of the country and itscitizens ".
The fundamental rights guaranteed by the Constitution cannotby its very nature be interpreted as being absolute rights. Thereare well-recognised restrictions and exceptions to the exercise ofthis right. One of the cases relied on by Mr. Nadesan —AmericanCommunication Association v. Dodds. (9) — brings this outclearly
" Freedom of speech, press and assembly are dependentupon the powers of Constitutional Government to survive. Ifit is to survive, it must have power to protect itself againstunlawful conduct and under certain circumstances againstincitements to commit unlawful acts. Freedom of speechdoes not comprehend the right to speak on any subject atany time."
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Apart from a total prohibition and ban on certain topicsoffensive to society and orderly government, freedom of speechin other matters may be circumscribed by time, place andcircumstances. What is permissible at one place may not beappropriate at another. What is considered apposite to one timemay not be so to a different time or period. A statement may beallowed in the context of a particular set of circumstances, butmay be considered undesirable in different circumstances. Thisorder was made by the Competent Authority under Regulation14(3) of the Emergency Miscellaneous Provisions and Powers)Regulations No. 5 of 1983. This provision enables theCompetent Authority to make the order he has made, if he—
" is of opinion that there is or has been or is likely to be inany newspaper, publication of matter which is. in hisopinion, calculated to be prejudicial to the interests ofnational security or the preservation of public order or themaintenance of supplies and services essential to the life ofthe community or matter inciting or encouraging persons tomutiny, riot or civil commotion …"
The Deputy Solicitor-General also submitted that, while a stateof Emergency had been declared as early as 18th May. no actionwas taken to restrict publication of news until 1 st July 1983. Justprior to this date, the terrorist group, Tamil Eelam LiberationFront, had called a Hartal and this led to large-scale violence inthe North resulting in serious loss1 and damage to property. Wewere also told that an order similar to this has been made againstone other Tamil newspaper. A censorship however had beenimposed on all other newspapers. Subsequent to the order madeagainst the petitioners, in late July there had been an outbreak ofcommunal violence, which is unprecedented in recent historyand these subsequent events seem to confirm the wisdom of thetimely action taken by the Competent Authority.
In dealing with an Emergency situation, courts have alwaysbeen prepared to give the Executive sufficient leeway in makingdecisions affecting the safety of the people and the security ofthe country. The decisions have to be made rapidly and in thelight of information then available and under the constraint of the
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available resources. While some of the Emergency Regulationspermit the authorities to apply a system of graduated pressureand restrictions on an errant newspaper, I am not in agreementwith Mr. Nadesan when he says that these provisions precludethe Competent Authority from directly resorting to the provisionsof Regulation 14(3) in a fit case. In the result. I hold that thefundamental rights of the 1st to 6th petitioners have not beenviolated by any executive or administrative action.
I would therefore dismiss all three petitions without costs.RATWATTE, J. I agreeSOZA, J.
New Era Publication Ltd., who is the 7th petitioner inapplication No. 47/83 filed on 22nd July. 1983, and in No.53/83 filed on 25th August, 1983 and the 5th petitioner inapplication No. 61/83 filed on 13th October, 1983, is a dulyregistered private limited liability guarantee company without ashare capital engaged in the publication in the English languageof the newspaper" Saturday Review ". The 1st to 6th petitionersin cases Nos. 47/83 and 53/83 along with one KandiahKandasamy who was unable to join as a petitioner as he wasaway from Sri Lanka are the sole shareholders and sole directorsof the 7th petitioner-company. Only the 1st. 3rd. and 5th and 6thpetitioners in cases Nos. 47/83 and 53/83 were able to join asthe 1 st. 2nd. 3rd and 4th petitioners respectively in case No.61/83 owing to the absence of the others from the Island. The1 st to 6th petitioners, among whom are the 1 st to 4th petitionersin case No. 61/83, are citizens of Sri Lanka. They are persons ofconsiderable wealth and men of high standing in public life. Theyare now engaged in social service and do not belong to anypolitical party. The income and property of the company wereapplied solely towards the objects of the Company and nodividends, bonuses or profits were payable to its members.
The " Saturday Review ” was first published in January, 1982.by a company called Kalai Nilayam Ltd. The objects of the paper
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were to disseminate news and views and information on menand matters, to stand up for human rights and freedom, toprovide a forum for free comment and expression of opinion bymembers of the public, to reflect the ethos and life of the peoplearound Jaffna, to enlighten non-Tamils on Tamil culture andestablish a two-way communication between all peoples andnationalities and break down the barriers of prejudice andemotional antipathies which had built up over the years, to fosterthe humanities and to serve as a link between Sri Lankans hereand abroad. The paper was independent and non-partisan — seebrochure P1.
On 9th August. 1983. the New Era Publications Ltd. whoseobjects accorded with those of Kalai Nilayam Ltd. became theowners of the " Saturday Review ", and from 2nd October 1982.were responsible for its continued publication. The new ownersemployed the necessary staff and continued with the earlierarrangement to have the paper printed at St. Joseph's CatholicPress, Jaffna, on a purely commercial basis. It may be notedthat S. Sivanayagam who is the 2nd petitioner in Cases No.47/83 and No. 53/82 is according to P4 the editor of the" Saturday Review " and in receipt of a monthly salary ofRs. 3,500/-.
Don John Francis Liyanage. Secretary to the Ministry of Stateappointed as Competent Authority under the EmergencyRegulations, Rudra Rajasingham, Inspector-General of Police andthe Attorney-General are the 1st. 2nd and 3rd respondentsrespectively in all three applications. All three applications raisesimilar questions of law and fact but there are differences ofwhich notice would be required. It was agreed that all threeapplications could be dealt with in one judgment.
Application No. 47/83.
I will take Application No. 47/83 first. The grievance here isthat on 1st July, 1983 the 1st respondent acting under thepowers vested in him by Regulation 14 of the Emergency
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(Miscellaneous Provisions and Powers) Regulations promulgatedon 18th June, 1983. made order P2—
that no person shall print, publish or distribute or in anyway be concerned in the printing, publication ordistribution of the " Saturday Review " for a period of onemonth from the date of the order, and
that the printing press in which the said newspaper wasprinted shall for a period of one month from the date of theorder not be used for any purpose whatsoever;
that the Inspector-General of Police is authorised to takesuch steps (including the taking possession of the printingpress or of any part of such printing press or premises) asappear to him to be necesary for ensuring compliance withthe order.
The second respondent Inspector-General of Police thereuponsealed the office of the " Saturday Review" where the editorialand other work in connection with the publication of thisnewspaper was being done and where the documents andpapers including the books of accounts were kept. The 2ndrespondent, however, took no steps to prevent the commercialprinting press in which the " Saturday Review " was printed frombeing used for its commercial purposes.
On the expiry of the Emergency Regulations of June. 19.83,Emergency Regulations were promulgated afresh on 18th July,1983, and in pursuance of these Emergency Regulations a freshorder P3 dated 18th July, 1983. was made by the 1strespondent, the Competent Authority, in terms identical with theorder P2. The 2nd respondent took action similar to what he didon the first occasion and the closure of the " Saturday Review "was thus continued. The basis on which the first respondent hasacted is that he is of opinion that there has been published and islikely to be published in the Saturday Review" mattercalculated to be prejudicial to the interests of national security,the preservation of public order, the maintenance of supplies andservices essential to the life of the community and matter incitingand encouraging persons to mutiny, riot and civil commotion.
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The petitioners state that they are entitled to the fundamentalrights embodied in Article 1 4(1) of the Constitution of Sri Lanka,more particularly to the fundamental right of freedom of speechand expression including publication set out in Article 14(1) (a)and to the right of freedom to engage by themselves or inassociation with others in any lawful occupation, profession,trade, business or enterprise set out in Article 14(1) (g). The twoorders P2 and P3 of 1st July, 1983, and 18th July. 1983,respectively and the acts of the second respondent and hissubordinate police officers violate these fundamental rights ofthe petitioners. The two orders are unlawful and a nullity. Theyhave been made by the 1st respondent-
fa) mala fide and in abuse of the powers conferred byRegulation 14(3) of the Emergency Regulations and notfor a legal purpose but for an ulterior purpose ;
mechanically, perfunctorily, unreasonably and withoutaddressing his mind to the relevant facts andcircumstances as will be seen from the followingconsiderations :
The impugned orders are a verbatim reproduction ofRegulation 14 (3), the only changes being thesubstitution of the conjunctive "and" for everydisjunctive "or" except one, appearing in theRegulation;
The commercial printing press at which the" Saturday Review " was printed was ordered to beclosed for one month without any regard to the factthat the regulations then in force were to lapse onthe 18th July and that this Press was engaged inother commercial printing not deemed to beobnoxious ;
At no time had there been any publication of any
matter which constituted an offence even after theEmergency Regulations came into force nor was anymatter calculated to be prejudicial to the interests of
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national security or the preservation of public orderor maintenance of supplies and services essential tothe life of the community or inciting or encouragingpersons to mutiny, riot or civil commotion everpublished ;
Being on his own admission unaware of theconstitution, objects and other relevant factorspertaining to the 7th petitioner-company and thestanding of its members, and the fact that at no timehad the editor or publisher of the paper beencharged with the commission of any offence andthat no complaint had been made against them tothe Press Council barring one for which there wasan adequate defence and not having had the time toverify them, the 1 st respondent was not possessedof all the information material to a fair assessment ofthe exact situation concerning the paper to enablehim to form the opinion he says he formed ;
There was no material at all to justify making theorders ;
The Emergency was declared on 18th May, 1983,and there were Emergency Regulations in force fromthat date prescribing stringent punishments forcontraventions, yet no charge was preferred orprosecution .launched in respect of any allegedtransgression by the " Saturday Review " nor evenwas the unlikelihood of the petitioners or the Pressitself courting the risk of incurring the dire penaltiesand sanctions prescribed for contraventions, takeninto account.
with the object of masking the true purpose which was toprevent the publication of news and views which maylend to criticism of aspects of Government policy despitethe fact that such criticism as had been published weremade bone fide in respect of public affairs.
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As a result of the closing down of the " Saturday Review " thepetitioners have suffered financially — loss of revenue fromadvertisements and payments to staff. The petitioners seek adeclaration that the said orders of the 1 st respondent are nulland void and/or contravene the Constitution and the issue of adirection to the 2nd respondent to hand back the office togetherwith the equipment, papers, documents and books of accountand an award of Rs. 23070/- per month as compensation from1 st July. 1983. in favour of the 7th petitioner.
Although every front page of the " Saturday Review " carriesthe legend, "The only regional newspaper in Sri Lanka" thecirculation of the paper is not confined to the North of Sri Lanka.
• It is read in Colombo also and even in the deep South andbeyond our shores. The paper, however, will appeal only to theEnglish educated elite who constitute only a very smallproportion of the people. Its object is to bring matters of publicinterest to the notice of the President and the authorities and tomould public opinion among a responsible readership not likelyto resort to violence.
The 1 st respondent admits he made the orders P2 and P3 butdenies he made them mala fide or for an ulterior purpose or thathe acted unreasonably or failed to give his mind to the facts andcircumstances relating to the publication of the " SaturdayReview " before making the orders in question. He denies toothat his object was merely to stifle criticism of Governmentpolicy. He had on the other hand examined the contents of the"Saturday Reviews" from 30th January. 1982 to 25th June1982. and he was satisfied :
That it was a political newspaper advocating the cause ofdividing the country and the establishment of a Stateknown as Eelam for the Tamils in the North and East ofthe country.
That the tenor of the articles and news items was blatantlycommunalistic and the alleged grievances and injusticescommitted against the Tamils were constantly being
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highlighted and the editorial policy was in the context ofthe circumstances prevailing capable of arousingcommunal feelings among the Tamils, and encouragingconduct which would be prejudicial to the maintenanceof public order and security, and imperilling the safety ofthe country and its citizens.
That many of the articles and items published in thenewspapers suggested that its publishers escheweddemocratic processes, negotiations and campaignsbased on non-violence as a means of resolving theproblems facing the Tamils of Sri Lanka and that theyopenly encouraged the adoption of force and terrorismby giving prominent publicity to and eulogising the actsof terrorist movements operating in the North, particularlythose of the Tamil Eelam Liberation Front;
The conduct of the law enforcement agencies and militaryauthorities and excesses alleged to have been committedby them were given prominent coverage sometimes ingrossly exaggerated form in an endeavour to arousecommunal passions among the people.
Immediately prior to the making of order P2. a Hartalsponsored by the Tamil Eelam Liberation Front led to large-scaleviolence in the North resulting in serious loss and damage toproperty. The sealing of the " Saturday Review " and anotherpaper in Jaffna was necessary to prevent the further escalation ofviolence. In fact, the recent communal disturbances weremotivated, inter alia, by resentment of the population in theSinhalese areas to the separatist tendencies in the North whichthe "Saturday Review" was openly espousing. The 1strespondent has annexed as IR1 to 1R14 random extracts ofarticles and news items which appeared in the " SaturdayReview "
The main questions arise for our determination :
Is this Petition (No. 47/83) maintainable ?
If this question is answered in the affirmative, do the factsjustify the making of the orders P2 and P3 and the actiontaken in pursuance of them ?
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Maintainability
The 1 st to the 6th petitioners are seeking in this application tovindicate their own fundamental rights guaranteed to themunder Articles 14( 1) (a) and 14( 1) (g) of the Constitution, and notof the 7th petitioner-company. The 1st to 6th petitioners havemerely utilised the institution of a company, here the 7thpetitioner, to exercise their fundamental right of freedom ofspeech and expression including publication (Article 14(1) (a))and the fundamental right of freedom to engage with oneanother in the newspaper business (Article 14(1) (g)). The 1st to6th petitioners are citizens of Sri Lanka and they did not intend toforego their fundamental rights when they decided to operatethrough the institutional device of a company.
The argument advanced on behalf of the petitioners goesthus :
In law a company is a fictitious person and an entitydifferent to its shareholders. But this does not mean that the1st to 6th petitioners cannot utilise it as an institutionaldevice to exercise their fundamental rights. In a matter offundamental rights the Courts should adopt a liberalattitude and approach the question from the angle of thefactual relationship between the company and itsshareholders. The factual approach is jurisprudentiallywarranted. Salmond supports this approach in his work onJurisprudence (7th Edition, 1 924).
Although the 7th petitioner-company owns the " SaturdayReview " in fact it owns the paper as a trustee for or otherwise onbehalf of actual human beings, namely, the shareholders whoare citizens of Sri Lanka.
In the way of the petitioners, however, are the two judgmentsof Sharvananda, J. in the applications filed in the SupremeCourt by Dr. S. N. A. Fernando and Others against D. J. F. D.Liyanage and Others (18) and S.C. Application No. 134/82 (17).In the first proceeding. Dr. S. N. A. Fernando and the other
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shareholders of Janatha Finance and Investments Ltd., a dulyincorporated company which was the 6th petitioner in the case,complained of infringement of the fundamental right of freedomof speech and expression including publication guaranteedunder Articles 14(1) (a) and of the fundamental right of freedomto engage in any lawful occupation, profession or trade byhimself or in association with others guaranteed by Article 14(1)
of the Constitution. In the second application the samepetitioners sought a review of the judgment in the firstapplication on the grounds that it had been made per incuriamand that their fundamental'rights guaranteed by Articles 12(1),12(2), 13(2). 13(5). 14(1) (a). 14(1) (b) and 14(1 )(c) of theConstitution had been infringed.
The facts relevant to the question of maintainability of theapplications were that the 6th petitioner, Janatha Finance andInvestments Ltd., was the owner of the business and of the presswhich had been sealed in pursuance of orders made underRegulation 14(7) of the Emergency (Miscellaneous Provisions &Powers) Regulations No. 2/82. The other petitioners wereshareholders of the 6th Petitioner-company.
In case No. 116/82 Sharvananda J. pointed out that inChapter 3 dealing with Fundamental Rights our Constitutiondraws a distinction between persons and citizens. Fie pointed outthat Articles 10 to 13 deal with fundamental rights guaranteed toall persons while Article 14 enumerates fundamental rightsguaranteed to citizens. Perhaps a slight correction is necessaryhere because Article 12 (2) deals with fundamental rightsguaranteed to citizens. But there is no gainsaying that theinference is clear that a distinction is drawn between personsand citizens in the provisions of Chapter 3 of our Constitution.Although a corporate body occupies an important place in theeconomic life of society and is a legal person, it is not a citizenand cannot claim the fundamental rights guaranteed in Article14 of our Constitution. A similar view has been taken bythe Supreme Court of India interpreting Article 19 ofthe Indian Constitution which, with certain differences,corresponds to our Article 14 — see the cases of State of Gujeratv. Shri Ambica Mills. (10). Tata Engineering & LocomotiveCo. Ltd. v. State of Bihar (generally referred to as the
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Telco case) (7) R. C. Cooper v. Union of India (generally referredto as the Bank Nationalisation Case (4) and Bennett Coleman &Co. Ltd. v. Union of India (1).
I might add that even in America, the corporation is not treatedas a citizen — see American Jurisprudence. Vol. 13. paragraph13, p. 168. This proposition then admits of no dispute. In fact,learned Senior Counsel for the petitioners readily conceded thata corporation is in law a separate entity and although it is a legalperson it is not a citizen and cannot, therefore avail itself of thefundamental rights constitutionally guaranteed by Article 14.
Sharvananda, J. proceeds (in case No. 116/82) to point outthat in accordance with the provisions of Articles 1 7 and 1 26 ofour Constitution the Court will grant relief only if theinfringement is by executive or administrative action and thecomplainant is -directly affected by the infringement. Acomplainant cannot seek relief because someone else in whomhe is interested is affected by the act complained of.Sharvananda J. formulated the problem before him as follows inthe case (supra) :
"An answer to the question whether the 1st to the 5thpetitioners qua shareholders of the 6th petitioner-company,can maintain the application depends on a properappreciation of the relationship in law of shareholders to thecompany "
Learned Senior Counsel for the petitioners contended that thisformulation is wrong. The Court should have considered therelationship in fact (and not in law) of the shareholders to thecompany. When fundamental rights are concerned the Courtshould adopt a liberal attitude and approach the question notfrom the angle of the law, but from the angle of the facts. In factthe company is the agent or trustee of the shareholders. Theterms 'agent' and 'trustee' are used in a popular butjurisprudential sense. There is warrant for such use in the highauthority of the great jurist John Salmond and of successiveeditors of his work on Jurisprudence.
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In the seventh edition (1924) which was the last edition,Salmond himself edited, he had this to say on corporatepersonality at page 343 :
" A corporation, having neither soul nor body, cannot actsave through the agency of some representative in theworld of real men. For the same reason it can have nointerests, and therefore no rights, save those which areattributed to it as a trustee for or otherwise on behalf ofactual human beings
It is apposite at this stage to consider the validity of thecontention of learned Senior Counsel for the petitioners. Iwill first take the statement of Salmond that a company canhave no interests and, therefore, no rights save those whichare attributed to it as a trustee for or otherwise on behalf ofactual human beings. To begin with, Salmond himself wasnot without misgivings about the accuracy of his statementand appended the following footnote to it by way ofqualification :
" The relation between a corporation and its beneficiariesmay or may not amount to a trust in the proper sense of theterm. A share in a company is not the beneficial ownershipof a certain proportion of the company's property, but abenefit of a contract made by the shareholder with thecompany, under which he is entitled to be paid a share ofthe profits made by the company, and of the surplus assetson its dissolution. A share is a chose in action — anobligation between the company and the shareholder.Colonial Bank v. Whinney. 11 A.C. 426 "(11).
Salmond's view that a corporation can have no interests, and,therefore, no rights, save those which are attributed to it as atrustee for or otherwise on behalf of actual human beings hasnot. as far as I have been able to gather, been adopted by anyother writer on jurisprudence. In fact. Paton points out to someconfusion is Salmond's approach to the nature of legalpersonality. Salmond said :
" So far as legal theory is concerned, a person is any beingwhom the law regards as capable of rights and duties. Any
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being that is so capable is a person, whether a human being ornot. and no being that is not so capable is a person, even thoughhe be a man (Jurisprudence. 1 2th Ed. p. 299).
And yet a little later Salmond said :
" A legal person is any subject matter other than a humanbeing to which the law attributes personality. This extension,for good and sufficient reasons, of the conception ofpersonality beyond the class of human beings is one of themost noteworthy feats of the legal imagination …" ibid. p.305.
Paton commenting on these two passages says as follows :
" Here are the seeds of confusion. In one passage personrefers to anything recognized by the law as capable ofbearing rights and duties whether human or not. in the•other human beings are persons with personality but non-human beings may be legal persons(Paton onJurisprudence. (1972) 4th Ed. pp. 391-392).
On the basis of Salmond's view, I Would like to point out that atrustee-Company is a fictitious owner having neither soul norbody. But the fact is that the so-called trustee's ownership of thecompany is far from fictitious. It is real apart from being legal. Itexists like human beings, plants, rivers, books, ideas, rules — seeWolff " On the Nature of Legal Persons “ — 54 Law QuarterlyReview, pp. 494-505.
Even if in a popular sense the company can be said to carry onbusiness for and on behalf of its shareholders, we must notoverlook the fact that the corporate capacity for action dependson the majority voting strength of the directors and. .may beultimately, of the shareholders. But what of the corporatecapacity of action which is disapproved by the minorityshareholders ? Their liberty cannot involve a right to paralyse thatcommon action. Further, what if the shareholders of thecompany are themselves companies ? We will then have afictitious trustee for fictitious beneficiaries or a fictitious agentacting for a number of fictitious shareholders. The use of thepopular notion of agency or trusteeship will not help. M. Hauriou.the French Jurist, was prepared to concede to corporate
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institutions a personality in fact as well as in law — see thediscussion of Hauriou's approach to the nature of corporatepersonality by Hallis in his book " The Corporate Personality ",p. 223. Hallis himself put his own view thus at page 240 :
The concept of corporate personality expresses a juristicreality, that is, a reality from the juristic point of view,nothing more and nothing less. While it is not simplydescriptive of an observable fact, its reality is, nevertheless,rooted to the world of empirical fact ”.
On this question, we were referred by the learned DeputySolicitor-General to the decision of the Court of Appeal inEngland in the case of Tunstall v. Steigmann (12). This caseinvolved the application of Sections 24(1) and 30(1) (g) of theLandlord and Tenant Act 1954. Under Section 24(1) of the Act. atenant of premises applied for a renewal of his tenancy at thetermination of his tenancy. The landlord could resist thisapplication under Section 30(1) (g) if he intended to occupy thebuilding for the purposes of a business carried on by him. In thecase however, there was a problem about the identity of thelandlord. The landlord at the time was a company in which a Mrs.Steigmann held all the shares save two held by her nominees.The business was at one time Mrs. Steigmann's and sheassigned it to the company for some reason which sheconsidered to be an advantage to her. In this case. Ormerod L. J.explained the position thus :
".It may be that in practice the landlord will continue tocarry on the business as it has been carried on in the pastwhen she was undoubtedly the proprietor of it. It may bethat she will derive a profit or otherwise from the businessas she has done in the past. But the fact remains that shehas disposed of her business to a limited company. It is thelimited company that will carry on the business in thefuture, and, if she acts as the manager of the business, it isfor and on behalf of the limited company. In my judgmentthe fact that she holds virtually the whole of the shares inthe limited company and has complete control of its affairsmakes no difference to this proposition. . . She cannot say
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that in a case of this kind she is entitled to take the benefitof any advantages that the formation of a company gave toher, without at the same time accepting the liabilities arisingtherefrom
In the same case Willmer L.J. said as follows at page 423 :
" Here the landlord and her company are entirely separateentities. This is no matter of form; it is a matter of substanceand reality. Each can sue and be sued in its own right;indeed, there is nothing to prevent the one from suing theother. Even the holder of one hundred per cent of theshares in a company does not by such holding become soidentified with the company that he or she can be said tocarry on the business of the company.
This clearly appears from Gramaphone & Typewriter. Ltd. v.Stanley " (13). As was pointed out by Fletcher Moulton, L.J.control of a company by a corporator is wholly different in factand law from carrying on the business himself. . . This being so. Ido not see how it is possible for the landlord in the present caseto assert that she intends to occupy the holding for the purposeof a busines to be carried on by her. Her intention, as has beenmade plain, is that the company which she controls shall carryon its business on the holding (emphasis mine)
Senior Counsel for the petitioners submitted that onincorporation the liability of the shareholders became limited.They were not liable for any breach of contract of the company;they could not be sued for the debts of the company, nor werethey liable to pay any taxes in respect of profits made by thecompany. What Ormerod L.J. said in TunstalTs case (supra)becomes very apposite. The 1st to 6th petitioners cannot thensay they are entitled to take the benefit of any advantages thatthe formation of the company gave them without at the sametime accepting the liabilities arising therefrom. Their intentionwas that the company should exercise its own right of speechand its own right to engage in the newspaper business. But ourConstitution has not elevated these rights of companies to theclass of fundamental rights. Only citizens enjoy these rights asfundamental rights. It is clear that unless we treat corporatepersonality as a real thing and apply the fact of that reality as abasic principle, we will find ourselves in an illogical and chaoticmuddle.
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It is only in exceptional and special circumstances that theCourt will lift the veil of corporate personality. The cases revealno consistent principle as to when the Courts will lift the veilbeyond a refusal to apply the logic of the principle of corporatepersonality where it is too flagrantly opposed to justice,convenience or the interests of the revenue. But as Wolff hassaid :
" The persons veiled by corporate personality are. as a rule,
not allowed to pierce the veil themselves ", (ibid. p. 520)
I would add that this statement accords with logic and soundsense.
The fact that we are dealing with a question of fundamentalrights will make no difference. The Court no doubt will be liberalin favour of the citizen when called upon to uphold and protectfundamental rights guaranteed to him by our Constitution.Learned Senior Counsel for the petitioners pointed out that thefundamental rights set out in the Universal Declaration of HumanRights (December 10. 1948) as a common standard ofachievement for all people and all nations have largelyinfluenced the enunciation of fundamental rights in ourConstitution. Article 19 of the Declaration states, inter alia, that" everyone has the right to freedom of opinion and expression ",and Article 22 states " everyone shall have the right of freedomof association with others, including the right to form and jointrade unions for the protection of his interests. " To give effect tothe Declaration the United Nations adopted two InternationalCovenants: the International Covenant on Economic, Social andCultural Rights and the International Covenant on Civil andPolitical Rights. These two Covenants are completed by anOptional Protocol to enable complaints to be made by personswhose rights have been violated. The two Covenants andProtocol came into force in 1976. Sri Lanka has signed theDeclaration and the two Covenants but not the Protocol. TheCourt will respect the Declaration and the Covenants but theirlegal relevance here is only in the field of interpretation. So far asour municipal law goes, they have not the force of law. England,for example, is a signatory to the European Convention on
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Human Rights but the Court of Appeal has held that theConvention did not have the force of law in England — see thecases of R. v. Chief Immigration Officer. Heathrow Airport. Exparte Bibi (14) and R. v. Secretary for the Home Department. Exparte Fernandes (15).
So much of the Declaration and the two Covenants as havebeen written into our Constitution alone have the force of law inSri Lanka. So far as the Declaration is concerned Dennis Lloyd inhis " The Idea of Law " (1979 revised reprint) p. 181, described itas "little more than a resounding statement of principle, useful,perhaps, in' influencing public opinion, but not likely to havemore than a marginal effect so far as individual grievances areconcerned."
The fundamental rights declared and recognised in ourConstitution and set out in Chapter 3 must, no doubt, evoke thespecial concern of this Court. Yet even fundamental rights fallunder the panoply of legal rights. Fundamental rights form anintegral part of the principles of law which the Court enforces—see the case of Firma Neld v. European CommunitiesCommission (16) (extract reproduced in Lloyd on Jurisprudence(1979) 4th ed. pp. 161 to 164). The test of a legal right is asimple one — is the right recognised and protected by the legalsystem itself ? (Paton — ibid p. 284). There is nothing special, inthe nature of fundamental rights to justify a departure from theusual approach which the Court would adopt in enforcing a legalright. In fact, it should be observed that Article 16 (1) of ourConstitution makes all existing written law and unwritten lawvalid notwithstanding any inconsistency with Articles 10 to 15and this includes even fundamental rights.
Several Indian cases were cited to us, but in applying them wemust remember that the basic norm of our Constitution is thatSovereignty is in the People and is inalienable. Sovereigntyincludes the powers of Government, fundamental rights and thefranchise. Most of the powers of Government of the SovereignPeople are exercised by Their delegates: the President andParliament. The judicial power of the People is exercised by
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Parliament through Courts. Tribunals and Institutions butParliament is empowered to exercise judicial power directly inmatters relating to its own privileges, immunities and powers andthose of its members. Fundamental rights constitute an integralpart of the Sovereignty of the people. Those fundamental rightswhich are declared and recognized by the Constitution must besecured and advanced by all organs of government and may notbe abridged, restricted or denied except in the manner and to theextent provided in the Constitution.
Our Constitution of 1978 was enacted by utilising the legalframework for amendment provided in the first RepublicanConstitution of 1972. The first Republican Constitution was a trulyautochthonous Constitution rooted entirely in Sri Lanka's ownnative soil. In the enactment of the Constitution, the legal andconstitutional link with the past was completely severed thoughWestminister traditions are still being drawn on as backgroundmaterial. The 1972 Constitution effected a break in legalcontinuity, a legal revolution as it has been called. ThisConstitution was structured on the basic norm of the Sovereigntyof the people.
The Indian Constitution does not postulate any such principlesof Sovereignty and distribution of power as does ourConstitution of 1978. There is thus a fundamental difference inthe Constitutional edifice of the Constitutions of the twocountries and this must be borne in mind when applyinginterpretations of the Indian constitutional provisions. Further, informulation, the fundamental rights recognised in Article 19 ofthe Indian Constitution are not cast in terms exactly identical withthose spelt out in our Article 14 which corresponds to it. Add tothis the fact that the Indian Constitution recognizes fundamentalrights to property which our Constitution does not and then it.will be realised that there is every need to be circumspect in.adopting the interpretations found in the Indian decisions.
Of the Indian cases cited I will take first the case of StateTrading Corporation of India Ltd. v. The Commercial Tax Officer
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and Others (6). The case first came up on a reference before theSupreme Court for determination of two preliminary points :
Whether the State Trading Corporation is a citizen withinthe meaning of Article 19 and could ask for theenforcement of fundamental rights ;
Whether the State Trading Corporation is,notwithstanding the formality of incorporation, insubstance a department or organ of the Government ofIndia and hence whether it could claim to enforcefundamental rights.
The first question was answered by Sinha, C.J. who deliveredthe judgment of the majority in the negative. It is not necessary todiscuss the reasons he gave because so far as the instant case isconcerned, the parties concede that a corporation is not a citizenand is not, therefore, endowed with the fundamental rights setout in Article 14 which corresponds to Article 19 of the IndianConstitution. In view of his answer to the first question, Sinha,C.J. did not proceed to consider the second question.Hidayatullah. J. answered both questions against the StateTrading Corporation, but Das Gupta J. answered both questionsin favour. Shah J. answered the first question and the first part ofthe second question in the negative. The second part of thesecond question he answered as follows :
" Even if the State Trading Corporation be regarded as adepartment or organ of the Government of India, it will, if itbe a citizen, be competent to enforce fundamental rightsOn the basis of the majority decision the case was sent backto be heard on the merits.
The decision on the second hearing is reported as TataEngineering & Locomotive Co. Ltd. v. State of Bihar (referred togenerally as the Telco case) (7). There were three petitions. Thefirst was that of Tata Engineering & Locomotive Co. Ltd., thesecond of Automobile Products of India Ltd., and the third wasthat of the State Trading Corporation of India Ltd. The petitioners'
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grievance was that a Sales Tax was being levied against them inrespect of transactions protected by Article 286 (1) (a) whichgrants immunity from Sales Taxes in respect of the sale orpurchase of goods outside the State. This, it was alleged,constituted a breach of their fundamental right under Article 31(1). The majority of the shareholders of the second petitionerwere citizens of India and one of them was impleaded as apetitioner. The shareholders of the third petitioner were thePresident of India and two Additional Secretaries, Ministry ofCommerce and Industry, one of whom joined the petition. It wasargued on behalf of the petitioners that, though the Company orthe Corporation may not be an Indian citizen, in substance it isno more than an instrument or agent appointed by its Indianshareholders. Two preliminary objections were raised one ofthem being that the principle that the State Trading Corporationis not a citizen necessarily means that the fundamental rightsguaranteed by Article 19 cannot be claimed by such acorporation. The petitioners, however, contended that whenfundamental rights are involved the Court should disregard thedoctrinaire approach which recognises the existence ofcompanies as separate juristic or legal persons and should nothesitate to look at the substance of the matter. Where theshareholders of the petitioning Companies are Indian citizens,the Court should look at the substance of the matter by lifting theveil of corporate personality and " give the shareholders the rightto challenge that the contravention of their fundamental rightsshould be prevented Gajendragadkar C.J. observed that whileit is true that the Court as the guardian of the fundamental rightsof the citizens will always attempt to safeguard their fundamentalrights, yet if the Court upholds the petitions before it. " it wouldreally mean that what the corporations or the companies cannotachieve directly, can be achieved by them indirectly by relyingupon the doctrine of lifting the veil. If the corporations andcompanies are not citizens, it means that the Constitutionintended that they should not get the benefit of Art. 19 ". (p. 48).
A second argument was also advanced on behalf of thepetitioners. Under paragraph (c) of Article 19 (1) citizens were
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guaranteed the right " to form associations or unions " whileparagraph (g) guaranteed the right " to practise any profession,or to carry on any occupation, trade or business It was arguedthat the distinction between the two rights enables the Court tolift the veil because by looking at the substance of the matter theCourt would really be giving effect to two fundamental rightsguaranteed by Article 19 (1). Article 19 (1) (c) enables thecitizens to choose their instruments or agents to carry on thebusiness which it is their fundamental right to carry on. TheCourt rejected this argument because the fundamental right toform an association cannot in this manner be coupled with thefundamental right to carry on any trade or business. Therespective rights cannot be combined but must be asserted eachin its own way and within its own limits ". (p. 48). As soon ascitizens form a company, the right guaranteed to them by Article19 (1) (c) has been exercised and no restraint has been placedon that right and no infringement of that right is made. Once acompany or a corporation is formed, the business which iscarried on by the said company or corporation is the business ofthe company or corporation and is not the busines of the citizenswho get the company or corporation formed or incorporated,and the rights of the incorporated body must be judged on that ‘footing and cannot be judged on the assumption that they arethe rights attributable to the business of individual citizens ".(p. 48). The Court then upheld the preliminary objection and thewrit petitions were dismissed as being incompetent.
Learned Senior Counsel for the petitioners has submitted thatthis decision is correct because Sales Tax or Income Tax isimposed by law on transactions of the Company. Theshareholders are not called upon to pay these taxes. But this wasnot the ground on which the petitions were dismissed. The casenever got that far because the suit was dismissed on apreliminary objection. The Court held that the shareholderscannot get behind the fact that the company is not a citizen andnot endowed with fundamental rights. Although dividends of theshareholders are affected by erroneous taxation, it affects themonly indirectly and will not amount to an infringement of theirfundamental rights.
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In our Constitution, too, the freedom of association (Article14(1)(c) is distinct from the freedom to engage in business aloneor in association with others (Article 14( 1 )(g)). The terminology isnot identical with that in the Indian formulation. Our rightextends to the carrying on of business in association with others.But it is obvious that a shareholder of a company cannot be saidto be carrying on business in association with his own companyunless he is in partnership with it. The difference in language willnot affect the applicability of the principles enunciated in theIndian decision to the case before us.
I will now discuss the case of R. C. Cooper v. Union of India(commonly referred to as the Bank Nationalisation Case (4) ). Inthis case, R. C. Cooper, an Indian citizen, was the first petitioner.He held shares in four banks and in addition deposit and currentaccounts in all of them. Further, he was a member of the Boardof Directors in one of the banks. Cooper filed two petitions andone T. M. Gurubaxani filed two others. Seven Indian States joinedas interveners. The Union of India was named as respondent inall the petitions. New legislation- (the Banking Companies(Acquisition and Transfer of Undertakings) Ordinance No. 8 of1969 and the Banking Companies (Acquisition and Transfer ofUndertakings) Act No. 22 of 1969) had been enacted. The effectof the legislation was to transfer the undertaking of each namedbank and to vest it in the corresponding new bank controlled bythe Central Government and its entire capital was vested in andallotted to the Central Government. Fourteen banks including thefour with which Cooper was concerned were to be nationalisedin this way. Payment of compensation was provided for.
The petitioner (Cooper) claimed that by the Act and Ordinancethe rights guaranteed to him under Articles 14. 19 and 31 of theConstitution were impaired. He complained that the acquisitionwas not for a public purpose and the Act and the Ordinance wereinvalid because the subject-matter of the Act and Ordinance waspartially at least within the State List and because they vest theundertaking of the named banks in new corporations without apublic purpose. Further, there were no settled principles for thepayment of compensation. He also complained, inter alia, that in
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consequence of the hostile discrimination practised by the Statethe value of his investment in the shares was substantiallyreduced, his right to receive dividends had ceased, and he hadsuffered great financial loss. He was deprived of his rights as ashareholder to carry on business through the agency of theCompany. In respect of the deposits, the obligations of thecorresponding new banks not of his choice were beingsubstituted without his consent.
Article 14 of the Indian Constitution stipulates that the Stateshall not deny any person equaiity before the law or the equalprotection of the laws within the territory of India. Article 19(1)guarantees to all citizens the right to acquire, hold and disposeof property and to practise any profession or to carry on anyoccupation, trade or business while Article 31 (2) provided thatno property shall be compulsorily acquired save for a publicpurpose and save by the authority of a law.
By way of defence the contention put forward on behalf of theUnion of India was that the petition was not maintainablebecause the undertaking that had been taken over was not anundertaking belonging to Cooper. No fundamental rights of thepetitioner were directly impaired.
Shah J. who delivered the majority judgment enunciated theprinciples applicable thus :
" The shareholder of a Company, it is true, is not the ownerof its assets; he has merely a right to participate in theprofits of the Company subject to the contract contained inthe Articles of Association. But on that account the petitionswill not fail. A measure executive or legislative may impairthe rights of the Company alone, and not of itsshareholders; it may impair the rights of the shareholders aswell as of the Company. Jurisdiction of the Court to grantrelief cannot be denied, when by State action the rights ofthe individual shareholder are impaired, if that actionimpairs the rights of the Company as well. The test indetermining whether the shareholder's right is impaired is
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not formal; it is essentially qualitative; if the State actionimpairs the right of the shareholders as well as of theCompany, the Court will not, concentrating merely upon thetechnical operation of the action, deny itself jurisdiction togrant relief(1970) A.I.R. Vol. 57 p. 585)
A single act may be violative of the rights of the shareholder, butnot of the Company; or it may be violative of the rights of theCompany, but not of the shareholder; or it may be violative of therights of both the shareholder and the Company. In thisconnection, three principles must be emphatically noted asapplicable:
It is the violation of the shareholder's fundamental rightthat must be established regardless of whether theCompany is also affected or not. It must be a violationseparate and distinct from the violation suffered by theCompany ;
The act in question must be directly violative of theshareholder's fundamental right;
Violation of property rights does not amount to aviolation of a fundamental right in Sri Lanka.
It is not without interest that in this case Ray J. wrote a dissentingjudgment and dismissed the petitions. In regard to Shah J'sjudgment, Sharvananda J. who points out very appropriately thatalthough Cooper claimed relief on the ground that his ownfundamental rights had been violated, and Shah J. held he hadlocus standi to maintain his petition, the ultimate finding of theCourt was that the Bank's fundamental rights had been violatedunder Articles 14. 19 and 31. This finding had been reachedwithout any discussion respecting the validity of Cooper's claimthat his fundamental rights under Articles 14 and 19 (1) (g) hadbeen impaired.
Shah J. appears to have treated the Nationalisation Act andOrdinance as having had an adverse impact commercially on the
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shareholders' right to property. As Sharvananda J. said in the caseof Neville Fernando and others v. Liyanage and others (17) —the decision does not support the proposition that when theCompany is nationalised, the shareholder is deprived of his rightto carry on business through the agency of his Company.
I will turn now to the case of Bennett Coleman & Co. Ltd. v.Union of India (1). Three petitions were filed in this case andamong the petitioners were a shareholder, a reader, three editorsand the company itself. The Import Policy for newsprint for theyear April, 1972, to March, 1973, and some provisions of theNewsprint Control Order 1962 were impeached as aninfringement of the fundamental right to freedom of speech andexpression guaranteed by Article 19 (1) (a) and the right toequality guaranteed by Article 14 of the Indian Constitution. RayJ. who delivered the majority judgment in the case said asfollows at page 115:
" As a result of the Bank Nationalisation case (supra) itfollows that the Court finds out whether the legislativemeasure directly touches the company of which thepetitioner is a shareholder. A shareholder is entitled toprotection of Article 19. That individual right is not lost byreason of the fact that he is a shareholder of the company.The Bank Nationalisation case (supra) has established theview that the fundamental rights of shareholders as citizensare not lost when they associate to form a company. Whentheir fundamental rights as shareholders are impaired byState action their rights as shareholders are protected. Thereason is that the shareholders' rights are equally andnecessarily affected if the rights of the company areaffected. The rights of the shareholders with regard toArticle 19 (1) (a) are projected and manifested by thenewspapers owned and controlled by the shareholdersthrough the medium of the corporation. In the present case,the individual rights of freedom of speech and expression ofeditors. Directors and shareholders are all exercised
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through their newspapers through which they speak. Thepress reaches the public through the newspapers. Theshareholders speak through their editors. The fact that thecompanies are the petitioners does not prevent this Courtfrom giving relief to the shareholders, editors, printers whohave asked for protection of their fundamental rights byreason of the effect of the law and of the action upon theirrights. The locus standi of the shareholder petitioners isbeyond challenge after the ruling of this Court in the BankNationalisation case (supra). The presence of the companyis on th'e same ruling not a bar to the grant of relief.
The rulings in Sakai Papers case (3). and ExpressNewspapers case (2) also support the competence of thepetitioners to maintain the proceedings ".
In the first place, the manner in which Ray J. interpreted thedecision in the Bank Nationalisation case does not appear to bejustified. In the Bank Nationalisation case Shah J. considered thedecisions in the State Trading Corporation case and Telco caseas not having any bearing on the case before him and naturallyin that view of the matter did not purport to overrule them. WhatShah J. said in the Bank Nationalisation Case is that where therights of a company are infringed, it does not necessarily followthat the shareholders' rights are also infringed. In fact. Shah J.himself said as follows at page 565 :
" A shareholder, a depositor or a director may not thereforebe entitled to move a petition for infringement of the rightsof the Company, unless by the action impugned by him. hisrights are also infringed ".
The interpretation of Ray J. that " shareholders " rights areequally and necessarily affected if the rights of the company areaffected " must be confined to the particular facts of the casebefore Court. As they stand, the words represent too sweeping ageneralisation which Shah J. obviously did not intend. Ray J.
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apparently failed to appreciate that the infringement of a citizenshareholder's rights and the infringement of a company's rightsare two separate and distinct matters to be evaluated andassessed separately. Moreover, there was no finding in law orfact by Shah J. on the concept of a shareholder carrying onbusiness through the medium or agency of a company.
Further, Ray J.'s statement that Sakai and Express Newspaperssupport the competence of the petitioners to maintain theproceedings is incorrect. In these two cases the question ofwhether a company not being a citizen is entitled to fundamentalrights was not raised and, therefore, those two cases cannot betreated as authority for such a proposition.
Seervai in his well-known work on the Constitutional Law ofIndia (1 975) 2nd Ed. Vol. 1 pp. 634 to 636 takes the view thatBennett Coleman was wrongly decided. Learned Senior Counseldisputed the validity of the reasons Seervai gives for his view.The reasons Seervai gives are anchored to the doctrine of staredecisis. I am unable to agree that these reasons are irrelevant orinvalid.
In his decision in the case of Neville Fernando v. Liyanage (18)Sharvananda J. did not accept the correctness of BennettColeman. On that occasion. I agreed with Sharvananda J. andeven now I do not see any ground on which I could take adifferent view. I might add that the petitioners in Application No.116/82 made a second application (Application No. 134/82 —S.C. Minute of 9.2.83) inviting the Court to treat the earlierdecision as one given per incuriam. Sharvananda J. then wrote asecond judgment discussing the Bank Nationalisation case indetail. In his second judgment. Sharvananda J. affirmed hisearlier view. In my opinion, both decisions of Sharvananda J. arecorrect.
In a case involving fundamental rights, the Court, no doubt,will be liberal in its interpretation, but this does not mean that itshould abandon the legal approach in favour of a factualapproach. Such a course can be fraught with danger. It couldresult in uncertainty and even confusion.
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In the first case of Neville Fernando v. Liyanage (18)Sharvananda J. quite rightly considered the question before himon the basis of the relationship in law of the shareholders to thecompany and supported himself with, some very apt dicta fromthe case of Saloman v. Sa/oman & Co. Ltd (19) and Short v.Treasury Commissioner (20), which it is not necessary toreproduce.
I am unable to agree that the 7th petitioner-company is merelyan institutional device functioning as an agent or trustee for theshareholders. This is not a case where the shareholders' right ofpublication in association with others is directly affected. Theparty directly affected is the company. The company and itsshareholders are in law and even in fact two distinct entities. Thecompany must be treated like any other independent person withrights and liabilities appropriate to itself. The objects and designsof the shareholders in incorporating are irrelevant in discussingwhat those rights and liabilities are.
In the instant case, the impugned orders P2 and P3 directlyaffected the right of speech and expression and publication ofthe 7th petitioner-company who, it must be reiterated, is seekingcompensation for the loss sustained by it only for itself. Theimpugned orders at most affect the 1st to 6th petitionersindirectly. Any rights of the 7th petitioner that may be affectedare not in any event fundamental rights recognised andenforceable under the provisions of our Constitution. Hence, theapplication (No. 47/83) is not maintainable for want ofcompetence.
In view of my conclusions on the question of maintainability, itis not necessary to go into the question of whether the impugnedorders P2 and P3 and the action taken in pursuance of them arejustified.
For the reasons I have given, application No. 47/83 must bedismissed. I so order.
I will now turn to consider application No. 53/83 and No.61/83 where the infringements complained of cover a widerground.
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Applications No. 53/83 and No. 61 /83
In these two cases the petitioners complain of infringement oftheir fundamental rights guaranteed to them under Articles 14(1)particularly 14(1) (a).-14(1) (g) and 12(1) and 12(2) of theConstitution. Only citizens are endowed with fundamental rightsunder Articles 14(1) and 12(2) of the Constitution. In thesecircumstances what I have already said on the question ofcompetency applies with equal force to the question ofmaintainability of these two applications also insofar as reliefunder Articles 14( 1) and 1 2(-2) are concerned.
There remains however for consideration the question whetherthere has been an infringement of the fundamental rightguaranteed under Article 12(1) of the Constitution. This Articlereads as follows :
" All persons are equal before the law and are entitled to theequal protection of the law ". " By equal protection of the law " ofcourse is meant the protection of equal laws, that is. laws thatoperate alike on all persons under like circumstances.
A company is a legal person and hence has locus standi toclaim the fundamental right of equality guaranteed under Article12(1). By virtue of the provisions of Article 15(7) the exerciseand operation of the fundamental right declared and recognizedby Article 12(1) are subject to such restrictions as may beprescribed by law (including regulations relating to publicsecurity) in the interests of national security, public order and theprotection of public health or morality, or for the purpose ofsecuring due recognition and respect for the right and freedomsof others, or of meeting the just requirements of the generalwelfare of a democratic society.
The first respondent seeks to justify his action and in thecircumstances of these cases it is preferable to examine thequestion whether the first respondent has established his plea ofjustification rather than to embark upon on analysis of Article1 2(1) with a view to ascertaining whether there are grounds for acomplaint under that Article.
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The first respondent placed before this Court random extractsof news and views that were published in the " SaturdayReview", Learned senior counsel for the petitioners has verykindly made available to this Court copies of all the issues of the" Saturday Review" and also copies of all the editorials thatappeared in this paper.
I will first examine the extracts tendered by the 1strespondent:
1R1 : This presents the views of the Nava Lanka SamaSamaja Party that the actions of the Government havemade Eelam a fait accompli but if the liberation of theTamil speaking people takes place with a revolutionarychange in the South, then separation would not benecessary. This is interpreted as meaning that theliberation of the Tamils and revolutionary change in theSouth should go hand in hand and then separatismwould not be necessary.
1R3 : Bold headlines announce Massachusetts StateLegislature support for Eelam and the Sri LankanTamils. The news item opens with the comment : " TheThamil Eelam lobby in the United States of Americascored another triumph this week
1 R4 : On this page of the issue of 18.6.1 983 there are twoArticles. One is captioned " Appearances aredangerously deceptive in Sri Lanka " and is by a Hindureader from Ooty. ft decries the fact that the identity ofthe Tamils as a separate ethnic, cultural and linguisticminority and their right to live with dignity and self-respect as equal citizens with the Sinhalese isjeopardised by the Enoch Powells of the Sinhaleseruling clique.
Hinduism has suffered as a result of Buddhism beingelevated as the state religion. Even the famous Murugaat Kataragama has been converted into a Sinhalesedeity.
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The second article is on " Cultural Racism inVavuniya It describes cultural racism as being arecognized technique of oppression. Statues of theTamils are demolished, libraries are burnt, temples seton fire, Buddha statues are erected and culturalmuseums are built in their homelands.
1R5 : An article by one Ariyadurai speaks of change in theTamil mood. Ahimsa, satyagraha and Gandhian styleleadership has not moved the hearts of the Pharaohs.The army stationed in the North has unleashed acampaign of terror, persecution and intimidation.
1R6 : This is a letter to the editor written by one Samudranfrom Tokyo. A caption has been provided for it: " StateTerrorism and TULF opportunism ", It refers to a displayof barbarism and savagery by the Army in attackingKantharmadam. It accuses the TULF of politicalimpotence.
1R7 : This is the front page of the issue of 11.6.1983. Itrefers to bomb-throwing, violence and armed attacksat Trincomalee despite the curfew being on. Anothernews item refers to posters coming up in Jaffna callingupon the people to take up arms.
1R9 : From the issue of June 11. 1983, N. Sanmuganathanis reported as having said that the new law whichenables the disposal of bodies without an inquestamounts to a declaration of war against the Tamils. Onthe same page there is a report of 4 Tamils killed inracial violence. Another report speaks of the fact thatthe Tamil Eelam cause was being canvassed at aninternational conference in Paris.
1R10 : This publication emphasises the futility of non-violence. Bhagavat Singh who shot a crufel whiteSuperintendent of Police was called a courageous manby Gandhi himself.
Another news report describes the death ofSivakumaran was a turning-point in the Tamil liberationstruggle.
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Navaratnarajan was killed in the Army camp and thebody of Sriskandarajah was brought by Armypersonnel to the hospital. Both were cases ofhomicide.
1R11 : (1) Bold headlines — Armed forces attack Gandhiyamfarm :
Vavuniya-shops burnt.
Sabaratnam Vadivel a young van driver ofValvettiturai Army Camp shot dead, and an Armytruck driven over his body.
1R12 : An anonymous Post Card from Sri Kotha addressdemands that the Tamils should leave all the nineprovinces of Sinhala Sri Lanka soon and go back totheir traditional homeland — Tamil Nadu. A civil war todrive away the Tamil menace is threatened.
1R13 : Report of support in Australia for Tamil Eelam.
1R14 : Editorial comment that failure of the Government tosolve the Tamil problem has resulted in a movement ofmilitant youth rooted in the soil of Jaffna andnourished by material frustration, a feeling ofhumiliation and bitterness.
Issue of 6.2.1982 : The editorial comment poses a rhetoricalquestion in the penultimate paragraph :
" Where is the logic in talking of Tigers and bemoaning thespectre of Eelam when the Government appears not to beconcerned about the needs of one section of its own citizens ? "
At page 3 a staff writer gives a grim account of the Army attackat the Cement Factory.
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At page 7 a foreign correspondent's views are published. Thedemand for separation is the final rung on a ladder of steadilyescalating demands. The " extremist Sinhalas " including thoseat various levels in the administration, are unwittinglystrengthening the case for Eelam. Too little has been given, toolate.
At page 1 2 of this issue there appears news of an EelamDeclaration in New York and the text of the unilaterel declaration.
The foreign correspondent also states :
" A Tamil intellectual in state service (assured of anonymity)told the REVIEW: " We may finally agree to remain part of SriLanka but nothing short of a separate administration completewith flag and national anthem is going to satisfy our people ",One of the secessionist leaders, interviewed separately,remarked: " If only 10,000 of our young men can be trainedabroad militarily,-we can chase out of the northern and easternprovinces not only the police but also the army which weconsider as an army of occupation. ”
" FOREIGN SUPPORT
There have been charges made already in parliament thatsome Tamil youths are training abroad. "
Issue of May 21, 1983: Refers to the Army running amok.About 64 houses. 3 mini buses. 9 cars. 3 motorcycles and36 bicyces were set on fire by the Army on rampagp atKantharmadam. A 100 strong gang in civils who were tryingto set fire to the Jaffna Co-operative Stores opposite theJaffna General Hospital suddenly turned their fury on thehospital itself when they realised that they were beingobserved from the House Officers' quarters. They fired wildlyin the air and at the hospital building and in the process apump operator attached to the hospital got wounded in thethigh. Both the House Officers' quarters and theadministration block were shot at. while doctors and otherstaff scampered for safety.
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Issue of January 1. 1983: The editorial says a wrong move onthe part of the Army Commanders and intelligenceofficers could ignite a fuse that could leave behind achain-effect of cumulative damage, and accelerate ahistorical process that could change the face of .thiscountry's history.
Issue of May. 7, 1983: Publicity is given to a report in theTimes of India that tension is again mounting in themainly Tamil Northern parts of Sri Lanka in the wake ofsurprise attacks by militant youths who have put thesecurity forces on the defence. The freedom fighters havelaunched a new phase in th,eir struggle for independencefor the Tamils from the major Sinhalese community.
Issue of 25th June. 1983: A front page article with a boldheadline reading " Regional autonomy as an alternativeto Tamil Eelam " states —
" A draft plan for a form of regional autonomy as analternative to TAMIL EELAM is being given the finaltouches by a 3-man Ministerial team.
The trio-Fisheries Minister Festus Perera. Trade MinisterLalith Athulathmudali and Transport Minister M. H.Mohamed — will submit their proposals to the Cabinetwhen it meets on the 28th of this month, after PresidentJayewardene's return.
The TULF MP for Vaddukoddai. Dr. Neelan Tiruchelvam, isbelieved to have been in constant touch with the 3Ministers drafting the proposals.
The regional autonomy move comes against a backdrop ofpeace feelers being put out in various quarters. A U.S.based group of Sri Lanka expatriates, both Sinhalese andTamils, has formulated a 12-point peace plan (see Page2) and TULF Secretary General A. Amirthalingam is
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reported to have told SUN'S Ranil Weerasinghe that theTULF is ready to go before the Tamil people and seek itsmandate for a 'genuine alternative*.
The concluding portion reads thus:
" Whether the Ministers' draft proposals envisage revampedDistrict Development Councils with more 'teeth' or aremore far-reaching is still not known. A key issue in anyregional autonomy plan is colonisation: the TULF has allalong stressed this. This issue could prove a stumblingblock to any negotiated settlement.
Militant Tamil youths have yet to make known their stand onthese peace plans and regional autonomy moves. So farthe only reaction has been from the THAMIL EELAMLIBERATION ARMY (TELA). This group, believed to bealigned to Kuttimani and Thangathurai, distributed a 4-pagepamphlet on Thursday (23 June) categorically declaringits opposition to any peace talks which rule out TamilEelam. The TELA pamphlet is also critical ofAmirthalingam. who had hush-hush talks with Kuttimani.Thangathurai and Jegan at Welikade Prison about afortnight ago ".
It was submitted that the fact that the " Saturday Review "enjoys a circulation only among a small circle of the Englisheducated elite should have been taken into consideration inassessing its potential for mischief and harm. On this it must beremembered that terrorist groups'count in their ranks a sizeablepercentage of University educated intelligent young men andwomen. This is so specially in Jaffna. They employ very modernsophisticated techniques which often baffle the law enforcementauthorities. It must be expected that this paper has a circulationamong the educated youth bent on wrecking the establishment.Terrorism thrives on propaganda and publicity and high morale.The news of acceptance of Eelam by groups in the great capitalsof the world and the reports of successful terrorist activities in
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the Jaffna district, no doubt, can be regarded as serving as anencouragement to the terrorist youth.
I will now take up the submission that the Competent Authorityhas chosen the most oppressive line of action when lessoppressive action might have served just as well. The control ofpublications is dealt with by Regulation 14 of the Emergency(Miscellaneous Provisions and Powers) Regulations.
Under Regulation 14 (1), the Competent Authority may takemuch measures and give such directions as he may considernecessary for preventing or restricting the publication of matterwhich would or might be prejudicial to the interests of nationalsecurity or the preservation of public order or the maintenance ofsupplies and services essential to the life of the community or ofmatter inciting or encouraging persons to mutiny, riot or civilcommotion, and the directions may contain such incidental andsupplementary provisions as appear to the Competent Authorityto be necessary or expedient.
The Competent Authority can act in terms of Regulation 14(1)if he is of the view that the publication will produce the resultcontemplated in the Regulation. He can act even if thepublication might produce such a result. That is, even if he hasdoubts, he can avoid the risk of such result. He could impose aprecensorship to ensure the deletion of prejudicial matter beforepublication. Other newspapers have been subject to censorshipand the same step could have been taken in regard to the" Saturday Review ",
Contravention of a direction given under Regulation 14 (1) isan offence (Regulation 14 (2) (a) and can be dealt with in twoways (Regulation (2) (a) and (b) :
(1) If any person is convicted of such an offence by reason ofhis having published a newspaper, the President may byorder direct that, during such period as may be specifiedin that order, that person shall not publish any newspaperin Sri Lanka — Regulation 14 (2) (a).
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(2) If the contravention is in respect of any publication in anynewspaper, the Competent Authority may, after issuingone or two warnings as he may consider reasonable,order—
that no person shall print, publish or distribute or in
any way be concerned in the printing, publication ordistribution of such newspaper for such period asmay be specified in the order; or
that the printing press in which such newspaper was
printed shall, for such period as may be specified inthe order, not be used for any purpose whatsoeveror only for such purpose as may be specified in theorder.
The term 'newspaper' as used in Regulation 14 includes "anyjournal, magazine, pamphlet or other publication " — Regulation14 (13) (c). It was submitted that the words 'other publication'are wide enough to include a book or other single publication. Infact, 'pamphlet' also refers to a single publication. In my view, thewords " other publication " must be interpreted euisdem generis.They will not refer to a single publication like a book, but ratherto a periodical publication. So also I do not think the expression"pamphlet" is used in the sense of a single publication.Pamphlets are a well-known literary medium and have beenused very effectively for exposition and criticism, for pungentinvective and trenchant rejoinder as, for example, during theMartin Marprelate controversy of old or in more modern timesduring Bernard Shaw's agitation for alphabet reform. Perhaps, itis not inappropriate to mention that during the Marprelatecontroversy even the seizure of the Puritan press failed to abatethe flow of pamphlets. Pamphlets in a series are common literaryform. As I understand it, the expression " pamphlet" and " otherpublications " as used in the definition refer to periodicalpublications. To say that the expression " newspaper " inparagraph (2) of Regulation 14 refers to newspapers strictly socalled and so to argue that as the freedom of the press is
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involved action against a newspaper should be taken only underparagraph 2 (a) or (b). but not under paragraph 3 of Regulation14 would be to ignore the definition given in paragraph 1 3 forapplication throughout the Regulation. The fact that theCompetent Authority acted under Regulation 14 (3) rather thanunder Regulation 14 (2) by itself does not support any inferenceof failure on hjs part to give his mind to the nature of andjustification for the order he had to make.
Regulation 14 (3) empowers the Competent Authority by orderto direct that no person shall print, publish, distribute or in anyway be concerned in the printing, publication or distribution of anewspaper for the period specified in the order when he is of theopinion that there has been or is likely to be in any newspaper,publication of matter which is. in his opinion, calculated to beprejudicial to the interests of national security or the preservationof public order or the maintenance of supplies and servicesessential to the life of the community, or matter inciting orencouraging persons to mutiny, riot or civil commotion. Theorder may direct that the printing press in which such newspaperwas printed shall, for the period specified in the order not beused for any purpose whatsoever or only for such purpose as isspecified in the order. He may also “authorise any personspecified therein to take such steps (including the takingpossession of any printing press with respect to which the orderis made or of any premises in which it is contained or of any partof such printing press or premises) as may appear to him (theperson authorised) to be necessary for securing compliance withthe order.
Alternatively, the Competent Authority may make an order asprovided in paragraphs (1)-and (2) of Regulation 14. as forexample, censorship.
The Competent Authority had the discretion and the choice ofother courses of action. But it is complained, he chose the mostoppressive course of action.
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It was well established that judicial .eview of the exercise of adiscretion is permissible, but within limits. Ranasinghe J. hasdealt with this question fully in his judgment in the case ofJanatha Finance and Investments Ltd. v. Liyanage andOthers (17)—andhis decision constitutes thelatest
pronouncement on the subject.
In England, the House of Lords has rejected the theory ofunfettered and uncontrolled discretion. When a discretion isvested in a statutory body, it is never unfettered. It must beexercised according to law. The statutory body must be guidedby relevant considerations and exclude from considerationmatters that are irrelevant. (See Padfield v. Minister ofAgriculture. Fisheries and Food (21) and Associated ProvincialPicture Houses Ltd. v. Wednesbury Corporation (22). The Courtwill assert its powers to scrutinise the factual basis upon whichdiscretionary powers have been exercised. The decision must befound to be reasonable, that is, one that can be supported withgood reasons or one which a reasonable person might reach —Secretary of State for Education' and Science v. TamesideMetropolitan Borough Council (23) ; see also Hirdaramani v.Ratnavel (24) ; and the case of Siriwardena and others v.Liyanage and others (commonly known as the Aththa case) (25).
Wade in his work on Administrative Law (1977 — 4th ed.)after pointing out that a statute which confers a variety ofdiscretionary powers may confer a wider or a narrowerdiscretion according to the context and the general scheme ofthe Act, adds at p. 344 :
" Translated into terms of the traditional rule that powersmust be exercised reasonably, this means that the standardof reasonableness varies with the situation. The pitfallswhich must always be avoided are those of literal verbalinterpretation and of rigid standards ".
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Equally it has to be borne in mind that in reviewing the exerciseof discretion, the Court must not usurp the discretion of thepublic authority. If the decision is within the bounds ofreasonableness, it is not part of the Court's function to lookfurther into the merits — Wade (ibid) p. 348. Lord Hailshamexplained how the Court should approach the question in thecase of In Re IN. (An Infant) (26) :
" Two reasonable parents can perfectly reasonably come toopposite conclusions on the same set of facts without
forfeiting their title to be regarded as reasonableNot
every reasonable exercise of judgment is right, and notevery mistaken exercise of judgment is unreasonable. Thereis a band of decisions within which no Court should seek toreplace the individual's judgment with his own ".
In the Tameside case (supra). Lord Salmon cited the abovedictum of Lord Hailsham with approval while Lord Diplock in hisspeech observed as follows at page 681 :
" The very concept of administrative discretion involves aright to choose between more than one possible course ofaction upon which there is room for reasonable people tohold differing opinions as to which is to be preferred ".
When the Tameside case was before the Court of Appeal. LordDenning said at page 652 :
" No one can properly be labelled as being unreasonableunless he is not only wrong but unreasonably wrong, aswrong that no reasonable person could sensibly take thatview".
At times of crisis, the question of reasonableness must beevaluated against the subject-matter dealt with and thecircumstances of the situation in which the authority is calledupon to act and to act quickly. This aspect of the matter was considered
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by Lord Denning in the case of Secretary of State forEmployment v. ASLEF (No. 2) (N.t.R.C.) (27). At page 1390 hesaid as follows :
" What is the effect of the words " If it appears to theSecretary of State ” ? This, in my opinion, does not meanthat the Minister's decision is put beyond challenge. Thescope available to the challenger depends very much on thesubject-matter with which the Minister is dealing. In thiscase I would think that, if the Minister does not act in goodfaith, or if he acts on extraneous considerations whichought not to influence him, or if he plainly misdirectshimself in fact or in law. it may well be that a court wouldinterfere; but when he honestly takes a view of the facts orthe law which could reasonably be entertained, then hisdecision is not to be set aside simply because thereaftersomeone thinks that his vievv was wrong. After all, this is anemergency procedure. It has to be set in motion quickly,when there is no time for minute analysis of facts or of law.The whole process would be made of no effect if theMinister’s decision was afterwards to be conned over wordby word, letter by letter, to see if he has in any waymisdirected himself. That cannot be right
As de Smith points out in his book ’’ Judicial Review ofAdministrative Action" (1980) 4th Ed. p. 349, the scope ofreview is determined by practical realities, the nature of thesubject-matter and the surrounding circumstances, as forexample, the necessity for taking quick action for thepreservation of public order. In dealing with a newspaper theeffect on the reader's mind must receive the highestconsideration. Further, what is not obnoxious at one time may beobnoxious at another time. It would be difficult for anyone butthe repository of power to form an opinion as to the occasion forits exercise. He is entrusted with the maintenance of publicsecurity. He has a better "feel" of the crisis with the intelligenceservices at his command than anyone else. When it is publicorder that is involved, the authority should not afterwards beblamed if it is found he has committed an error of judgment orerred on the side of being over-cautious.
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As Lord Atkin said in Liversidge v. Anderson (28). " If there arereasonable grounds, the judge has no further duty of decidingwhether he would have formed the same beliefI might add thatthis was the test adopted by Ranasinghe J. (Sharvananda J. andVictor Perera J. agreeing) in the case of Janatha Finance andInvestments Ltd. v. Liyanage and others (17).
I have already referred to some of the matters that hadappeared in the " Saturday Review It is reasonable to expectthat the 1st respondent was aware of what was being publishedin this newspaper over a period of time. It is not suggested thathe read the issues of this newspaper only immediately beforemaking his first order P2. No doubt, the Competent Authority wasunaware of the constitution of the " Saturday Review" anddetails of the internal arrangements pertaining to it or the statusof the Directors. To do his duty, it was sufficient for him to beconversant with the contents of the newspaper.
The fact that no action was taken against the newspaper earlieror even after the Emergency Regulations came into force on18th May. 1983, is hardly relevant. The Government, too.undoubtedly values the freedom of the Press and believes thatdemocracy will sustain itself best, as has been said, in the freemarket of ideas, and when the channels of communication areleft open, the newspapers give ideas. The newspapers givepeople the freedom to find out what ideas are correct. TheCourts, too. will always uphold the freedom of speech andexpression and publication enshrined in the Constitution.
But at times of national crisis, the safety of the nation becomesparamount and some inroads have of necessity to be made intothe freedom of the Press. This is provided for in the Constitutionitself.
I will turn to the argument that the Competent Authority shouldhave addressed his mind to the fact that the severity of thepunishments prescribed would make it unlikely that anyresponsible newspaper will run the gauntlet of thepunitive restrictions imposed during the Emergency. Direpenalties, however, are no bar to those fighting for a cause. The
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" Saturday Review " was fighting the cause of the Tamils. Thepaper highlighted the grievances of the Tamils. Of cause, no onewill deny them that right. But at times when ethnic hatreds aremounting, curbs become necessary. At times of grave nationalemergency headline exposure of Army and Police atrocities willnot help the cause of peace and public security. It can causedeep resentment, fan passions, provoke defiance. It can set off achain-reaction of violence. And violence begets violence. Ithappened before our very eyes. There are very few issues of the" Saturday Review ” which do not carry some grim account ofArmy or Police brutality. The object may have been to mouldpublic opinion and get the authorities to take remedial action.But in the context of race dissensions, it could be counter-productive. Prominent coverage was given to the activities of theEelamists. News of the'activities of supporters of the Eelammovement in foreign countries appeared regularly. One issuecarried news of an unilateral declaration of Eelam. Surveys ofopinions were published in several issues. A Tamil intellectual inState service had said that nothing short of a separteadministration complete with flag and national anthem wouldsatisfy the Tamils. Another secessionist leader felt a force of10,000 young men trained abroad militarily would suffice to ridthe North and East of the Army and Police. One cannot fault theCompetent Authority if he thought these publicationsinflammatory especially after the Hartal. The very last issue of the" Saturday Review" carries the bold headline " RegionalAutonomy as an alternative to Tamil Eelam " ? ". The prepositionis posed as a question, but the article that follows ends on apessimistic note. The issue of colonisation could prove to be astumbling-block to any negotiated settlement and in any eventthe militant Tamil Youth of the " Thamil Eelam Liberation Army(TELA) " will settle for nothing less than Eelam — no peace talkswithout Eelam. Although the paper advocates RegionalAutonomy, between the lines it is possible to discern a definitetilt towards, the Eelam cause. The Competent Authority was notbeing unreasonable if he took such a view. The reasons he givesin his affidavit are borne out by the contents of the paper.
No doubt, the first order P2 contains an error when it wasmade operative for a month. But that does not mean that
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clamping down the paper was unjustified or that the order wasmade without due consideration. There is also the complaint thatthe order is a mere verbatim reproduction of the Regulation.Perhaps, the Competent Authority may have said the same thingin different words. It would then be a question of semantics. Onthe other hand the form in which the order is drawn could alsoshow that the Competent Authority gave his mind to therequirements of the Regulation and it was only on being satisfiedthat the requirements were strictly fulfilled that he made hisorder.
Learned Senior Counsel for the petitioners submitted thatcensorship would have sufficed. But even with censorship,newspapers have been known to publish matter that could beharmful. More than one newspaper in this country had occasionto publish apologies for violating the censor's directions. It is truetransgressions of censorship could be visited with extremesanctions. But the object is to prevent and mot to punish. Thepaper always devoted a very large proportion of its column tospotlighting the hardships and the discrimination which theTamil people were being forced to endure. No doubt these weregarnished with articles covering a wide range of subjects: thefine arts, literature, science and agriculture. But the CompetentAuthority may have felt, not unreasonably, that censorship wasinadequate to deal with a newspaper whose editorial policy wassuch that accounts of the harassments and indignities sufferedby the Tamil people filled most of its pages. At times of tensionand strife, much publications can be very damaging andprovocative. Therefore, one cannot say that the CompetentAuthority was unreasonable in deciding to act under Regulation14 (3) of the Emergency Regulations. He acted on grounds thatwere reasonable.
On the facts, therefore, there has been no infringement.Applications No. 47/83, No. 53/83 and No. 61/83 aretherefore, dismissed without costs.
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RANASINGHE J-
I agree. Even after further consideration. I am of opinion thatthe views expressed by Sharvananda J. in the case of Dr. S.N. A. Fernando and others v. Liyanage and others (18). withwhich I have concurred, are correct.
RODRIGO. J.
I join i.n the opinion of my brother Soza, J. whosejudgment I have seen in draft that this application should bedismissed for the reasons that he has expressed but I wouldadd a few words of my own on account of the injection ofwide issues of law into the submissions. This judgmentcomes in' the third lap of the course of this application in itspursuit of a just and equitable order relating to the clampdown put under the Emergency Regulations promulgated inthe recent phase of domestic violence, on the " SaturdayReview" which, it is said, and not wholly withoutjustification is a forum for intellectual dialogue andexchange on, among others stated in an admirablebrochure, the ethnic political problems that simmer andsometimes erupt into violence. I shall return to this later. Fora start I wish to take a second look at s'. 8 of the PublicSecurity Ordinance and Regulation No. 2(2) of theEmergency Regulations No. 3 of 1983, now in force, for thereason that the view I took in the "Aththa "case (25) in linewith the views expressed by Fernando, C.J. and Alles. J. intheir leading judgments expressing the majority view ofthese provisions in Hirdaramani's (24) and Gunasekera'scase (29) respectively, it is said, is now out of line with thepresent trends of judicial thinking on the subject. In theHirdaramani case the matter was formulated as follows
1. Where a power cannot be exercised unless certain physicalfacts exist. In such a case if the validity of the exercise ofthe power is disputed, then the executive must prove thatthe requisite facts actually existed.
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Where a power may be exercised by some authority if he issatisfied of the existence of certain facts. In such a case aCourt can inquire into the circumstances, in order toascertain whether it was reasonable for the authority to besatisfied of the existence of the facts.
Where, as in the instant case, the power can be exercisedmerely because of an opinion that it is necessary to exerciseit. In such a case the mere production of the instrument exfacie valid whereby the power is exercised, concludes thematter, unless good faith is negatived.
Section 8 of the Public Security Ordinance reads :—
" No emergency Regulation, and no order, rule or directionmade or given thereunder shall be called in question in anyCourt. "
Emergency Regulation 2(2) reads
" The Interpretation Ordinance shall apply to theinterpretation of an emergency regulation and of any ordersor rules made thereunder as it applies to the interpretationof an Act or Ordinance or Law. "
The relevant section, that is, s. 22 of the Interpretation
(Amendment) Act No. 18 of 1972 states :
" 22. Where there appears in any enactment whetherpassed or made before or after the commencement of thisOrdinance, the expression " shall not be called in questionin any Court " or any other expression of similar importwhether or not accompanied by the words " whether by wayof writ or otherwise " in relation to any order, decision,determination, direction or finding which any person,authority or Tribunal is empowered to make or issueunder such enactment, no Court shall in any proceedingand upon any ground whatsoever have jurisdictionto pronounce upon the validity or legality of
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such order, decision, determination, direction or finding,made or issued in the exercise or . . . exercise of the powerconferred on such person, authority or Tribunal. "
The leading judgment in xheAththa case (supra) expressing itsview on these provisions, has stated :
'' Section 8 of the Public Security Ordinance ordains that noemergency regulation, and no order, rule or direction madeor given thereunder shall be called in question in any Court.The effect of such finality clause has been stated asfollows
' The Courts have made it a rule that such clauses cannothamper operation of judicial control . . . there is a firmjudicial policy against allowing the rule of law to beundermined by weakening the powers of the Courts.Statutory restrictions on judicial remedies are given thenarrowest possible construction sometimes even againstthe plain meaning of the words. This is a sound policy sinceotherwise administrative authorities and tribunals would begiven uncontrollable power which could violate the law atwill.' Finality is a good thing but justice is a better " quotingLord Atkin in Ras Behari Lai v. King Emperor (30)— Wade,Administrative Law (4th Ed.) 566. I am of the view that theabove section 8 does not prevent the petitioners fromobtaining relief if they are entitled to any ".
The judgment delivered in the Janatha Press case (17) hasthese paragraphs
" In times of grave emergency it is unlikely that thetheoretical judicial control will be able to come to play asthe ingredient of policy is so large by comparison with theingredient of ascertainable and relevant fact — Wade —(supra) pp. 375-6. "
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It continues
" In regard to the exercise of a discretion in an emergencysituation Lord Denning M. R. expressed himself in Secretaryof State v. ABLEF (27) as follows
" Butwhen he honestly takes a view of the facts or the
law which would reasonably be entertained then hisdecision is not to be set aside simply because thereaftersomeone thinks that his view is wrong. After all this is anemergency proceeding. It has to be set in motion quickly.Where there is no time for minute analysis of fact or of lawthe whole process would be made of no effect if theMinister's decision was afterwards to be conned over wordby word, letter by letter to see if he has in any waymisdirected himself. That cannot be right. Take this verycase. He has made a mistake in . .. but. that, in my opinion,was not sufficient to invalidate the application or the basison which he acts. "
Then in the majority judgments (Bench of 9 Judges) inRevision Application APN/GEN 10/74 — D.C. Kandy —L/10569 et cetera — S.C. Minutes of 3rd September. 1974. acase which dealt with prohibition on Courts to grant injunctionsagainst the State introduced by s. 24 of the Interpretation(Amendment) Act No. 18 of 1972. the view expressed by LordReid in the case of Anisminic Ltd. (31) when he said.
" I would have expected to find something more specificthan the bald statement that a determination shall not becalled in question in any Court of law. Undoubtedly such aprovision protects every determination which is not a nullitybut I do not think that it is necessary or even reasonable toconstrue the word 'determination' as including everythingwhich purports to be a determination but which is in effectno determination at all and there are no degrees of nullity.There are a number of reasons why the law will hold apurported decision to be a nullity … I have come without
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hesitation to the conclusion that in this case we are notprevented from inquiring whether the order of theCommission was a nullity "
was adopted with approval.
Again in /. R. C. v. Rossminster Ltd. (32) Lord Diplock
observed
" The words 'which he has reasonable cause to believe’appearing in the statute do not make conclusive. . .that hehas reasonable cause for the prescribed belief. The groundson which the officer acted must be sufficient to induce in areasonable person the required belief. . .This was affirmed inNakkuda AH v. Jayaratna (33) a decision of the Privy Councilin which Lord Radcliffe writing for the Board expressed theview that the majority speeches in Liversidge v.Anderson (28) — in which a contrary construction hadbeen placed on similar words . . . should be regarded as anauthority for the meaning of that phrase in that particularregulation alone. For my part, I think the time has come toacknowledge openly that the majority of this House inLiversidge v. Anderson were expediently and, at that time,perhaps excusably wrong and the dissenting speech of LordAtkin was right. "
Having said this, however. Lord Diplock continues later,
" The decision-making power is conferred by the statute onthe officer of the Board. He is not required to give anyreasons for his decision and the public interest immunityprovides justifications for any refusal to do so. Since hedoes not disclose his reasons there can be no question ofsetting aside this decision for any error of law on the face ofthe record and the only ground on which it can be attackedon judicial review is that it was ultra vires because thecondition precedent to its forming the belief which thestatute prescribes, viz. that it should be based on reasonablegrounds was not satisfied. Where Parliament hasdesignated a public officer as decision-maker for aparticular class of decision, the High Court, acting as a
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reviewing Court … is not a Court of Appeal. It mustproceed on the omnia praesumuntur rite esse acta until thatpresumption can be displaced by the applicant for reviewon whom the onus lies of doing so. Since no reasons havebeen given by the decision-maker and no unfavourableinference can be drawn for this fact because there isobvious justification for his failure to do so. the presumptionthat he. acted intra vires can only be displaced by evidenceof facts which cannot be reconciled with there having beenreasonable cause for its belief…."
Then in A-G of St. Christopher v. Reynolds (34) Lord Salmon inthe Privy Council stated
" The facts and background of the Tameside case (23).Liversidge v. Anderson (28) the Nakkuda AH case (33) andthe present, case are. of course, all very different from eachother. This is why their_ Lordships have reached theirconclusion as to the true construction of reg 3(1) of theEmergency Powers Regulations 1967. in reliance chiefly onthe light shed by the Constitution rather than on such lightas may be thrown on that regulation by the authorities towhich reference has been made. "
While some challenge therefore can be offered in the first andsecond situations formulated above what is the worthwhilechallenge that can be made in the third situation applying themaxim omnia praesumuntur rite esse acta and that male fidescannot be made out on affidavit evidence alone without cross-examination of the respondents, an opportunity which is notpermitted? In Nakkuda Aii's case (supra) Lord Radcliffe had thisto say
" If the question whether the condition had been satisfied isto be conclusively decided by the man who wields thepower then the value of the intended restraint is in effectnothing. No doubt he must not exercise the power in badfaith, but the field in which this kind of question arises issuch that the reservation for the case of bad faith is hardlymore than a formality. "
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So that when the passages quoted above from Lord Radcliffe.Lord Denning, Lord Diplock and Lord Salmon are read, thepassage in Wade (supra) at pages 375-6, " In times of graveemergency it is unlikely that the theoretical judicial control willbe able to come to play as the ingredient of policy is so large bycomparison with the ingredient of ascertainable and relevantfact" is amply borne out. In judicial practice, therefore, thepreposition " that the orders of the competent authority are notjusticiable if they are ex facie valid and that the Court isprecluded from considering the only possible issue which can beraised when a detention order valid on the face of it is producedbefore the Court, namely the issue of good faith '' still holds goodwhen construing emergency law provisions in the third situationformulated above not because the statutory injunction isconsidered a letter on Courts but because it is the only practicalway of deciding the whole matter. The liberty claimed andasserted by the Courts to look behind the order is onlytheoretical.
In this instance, however. Counsel for the respondents hasplaced material before Court upon which he says the CompetentAuthority reached his opinion and invited us to test thereasonableness of his opinion. I, therefore, express my view onthat aspect of the matter but later in the judgment.
The substantial point of law argued in this application is thatthe shareholders of a limited liability company — the 7thpetitioner is an incorporated company limited by guarantee andthe rest are shareholders — continued to be engaged in doingthe selfsame business in fact that the company has been formedand incorporated to do in law so that when the company'sbusiness closed down by order of the competent authority theselfsame business of the shareholders was also closed down.That is to say, the prohibiton of the publication of the 'SaturdayReview' is not only a prohibition imposed on the company butalso a prohibition imposed jointly and severally on the petitionersfrom publishing the newspaper. Support for this is sought by reliance
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on Bennett Coleman & Co. v. Union of India (1) and the orderdelivered on representations against the Press Council Bill in1973 by the then Constitutional Court of Sri Lanka. It is sufficientfor me to refer to the judgment of Sharvananda, J. deliveredin this Court in Dr. Neville Fernando's case (18) and theconnected application No. S.C. 134/82 (2) — and 11.2.83 (17)respectively — wherein Sharvananda J. has expressed the viewfor the reasons given by him that he cannot accept the reasoningof Ray, J. in the Bennett Coleman case that the shareholderscarry on business through the agency.of the company and thatthe shareholders' rights are equally and necessarily affected ifthe rights of the company are affected. Sharvananda. J. wasmindful that there is in India a difference in the fundamentalrights of a shareholder from that of a shareholder in Sri Lanka inas much as the fundamental right of a shareholder in Indiaincludes a right to acquire, hold and dispose of property and it isenacted there that no person shall be deprived of his propertysave by the authority of law. He reached the conclusion that thefundamental right of the petitioners therein, like here, to engagein business by themselves or in association with others, is not inany way infringed by the closure of the press of which they areshareholders. I respectfully agree with the reasons given thereinand add a few words here, since it is submitted that the decisionof Sharvananda, J. on both those applications is an erroneousinterpretation of the Constitution. It is argued that the rights of ashareholder of a company viewed only from the angle of acompany as a legal person, a concept founded on the principlesof common law of England cannot be equated to thefundamental rights of a shareholder viewed from the angle of ourConstitution and that the systems of common law obtaining inEngland, America or India afford no correct guide. The twoArticles of the Constitution invoked to support this argument areArt. 12(1) and Art. 14(1) (g) read with Art. 14(1) (a). It is Art.14(1) (g) that is pressed into argument. When distilled. Counsel'sargument is that it is the factual position of the shareholders thatis protected. To appreciate the factual position, it is said, one
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must keep in mind that a shareholder is an " alter ego " or the" head and brains " of the company and that in fact it is theshareholders who pull and control the strings as real visiblehuman beings. Such human beings are citizens of this country. Itis said that the petitioners are also Directors of this company andthat there is no gainsaying the physical fact that it is they who arerunning this newspaper.
What is contended for here is the Realist theory ofjurisprudence — the group-person. Paton says :
" With a little skill (and a lack of scruple) we can reach anypractical result from any particular theory; so complicatedare the issues that arise. "
But the judicial approach to the problem in English CommonLaw is exemplified by Solomon v. Solomon & Company (19) andthe Gramophone and Typewriter Company Ltd. v. Stanley. (13)Solomon v. Solomon & Co. (19) can be reconciled. Duff suggests,with any theory but is authority for none. " While theories haveprovided shells for the attack, the decision as to where theammunition was to be shot has been the result of the economicand social desires of those who use the artillery. *' See Paton onJurisprudence (3rd Ed.) 367. See also M. Wolff — 54 L.Q.R.(1938) 496. No doubt the Articles invoked — Art. 12(1) andArt. 14(1) (a) (g) — are Constitutional provisions designed toprotect the personal rights therein declared to be fundamentalrights of Sri Lankan citizens and these Articles are also declaredsubject to all existing written and unwritten laws, which in theevent of inconsistency, prevail over the Articles. Judge made lawis unwritten law and the legal rights of shareholders, in any case,vis-a-vis the company are settled by Judge made law. This is notdisputed. Did they have any rights by reason of shareholdingother than those that are rights of the company per se. Authorityand principle are against a view that they have such rights.To say that they have such rights independently of the rightsof the company is a dangerous doctrine, to borrow the languageof Ormerod. L.J. in Tunstally v. Strigmann (1 2) a case which is
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destructive of the arguments of the petitioner's Counsel. In thatcase, the company and the landlord were one in the realisticsense. The landlord held all the shares of the company barringtwo held by nominees and she had the sole control of thecompany. In an application under the Rent Acts a preliminarypoint was decided against her that though she in fact intended tooccupy the premises to do her business she was not entitled tooccupy it as the busines in law was that of her company. All theartillery of the Realist theory was pressed into service but to noavail. The submissions of Cousel for landlord in that case areidentical with .the submissions that have been made here. Toquote from Ormerod, L.J
" It has been contended in this case that a realistic viewshould be taken into consideration. It is submitted that anyperson in the street would say that the business was thelandlord's business, notwithstanding that it was beingcarried on by the limited company."
He continues :
" It has been argued in the course of this case that therehad been a number of departures from the principle ofSolomon v. Solomon & Co. Ltd. (19) in order that theCourts may give effect to what has been described as thereality of the situation and it is submitted in thesecircumstances that the Court should look at the realities ofthe situation and that those realities that the business will infuture be carried on by the landlord as it has been carriedon in the past. "
Then he continues :
" Whilst it may be arguedthat the Courts have departed
from a strict observation of the principle laid down inSolomon's case, it is true to say that any departure, if indeedany of the instances given can be treated as a departure,has been made to deal with special circumstances when alimited company might well be a facade concealing the realfacts."
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In the same case Willmer, L.J. had this to say :
" The business was in substance her business, the companybeing a mere piece of mechanism to enable the landlord'sbusiness to be carried on. This, it is said was the reality andwe were invited to look at the reality and substance of theproposed occupation rather than at its form. As relevant tothis argument I ventured to direct attention to Leonard'sCarrying Company Ltd. v. Asiatic Petroleum Co.. Ltd. andsome reliance was placed on what was said by LordHaldane in that case. He described the managing director ofthe appellant company as one who was " really the directingmind and will of the corporation, the very ego and centre ofthe personality of the corporation ".
Willmer, L.J. has later observed :
" I have certainly felt the force of the argument on behalf ofthe landlord but in the end I am satisfied that it cannotprevail. There is no escape from the fact that a company is alegal entity entirely separate from its corporators — seeSolomon v. Solomon & Co. Ltd. (19) Here the landlord andthe corporation are entirely separte entities. This is nomatter of form. It is a matter of substance and reality. . . .Even the holder of 100 per cent of the shares in a companydoes not by such holding become so identified with thecompany that he or she can be said to carry on the businessof the company. The individual corporator does not carryout the business of the corporation. "
Danckwerts, L.J. having endorsed what had been said earlier by
his brothers said this
" As Ormerod, L.J. pointed out, if persons choose toconduct their operations through the medium of a limitedcompany with the advantages in respect of responsibility fordebts thereby conferred, they cannot really complain if theyhave to face some disadvantages also. "
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As I have said already the Articles in question must be readsubject to existing law. In my judgment therefore theshareholder — petitioners have no rights in the circumstances ofthis case independently of the company's that can be said tohave been infringed by the order or orders that are impugned.
On the facts — We have been invited to review the order on thematerial placed before us. Virtually all the issues of the" Saturday Review" from its inception to the date of the firstorder have been placed before us.
The test to be applied as found in judgments in reviewing anexecutive order is,
whether grounds exist which are capable of supportingthe order or decision, and,
whether the executive has misdirected himself on the lawin arriving at his decision.
This test really is applied where an executive is required to be'satisfied' of the existence of a condition precedent to his makinga decision. But where the order could be made merely on theopinion of the executive the test is less exacting. For instance,where an executive is empowered to make an order where he" deems it necessary " to make such order, it has been held thatsuch words give the executive the amplest possible discretion inthe choice of method. See A-G of Canada v. Hallet & CarryLtd. (35) per Lord Radcliffe,; A-G of St. Christopher v.Reynold — per Lord Salmon (supra).
The Competent Authority has averred in his affidavit justifyinghis order that
16. Many of the articles and items published in the newspapersuggested that its publishers eschewed democratic processes,negotiations and campaigns based on non-violence as a meansof resolving the problems facing the Tamils of Sri Lanka and thatthey openly encouraged the adoption of force and terrorism asthe only means.
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1 7. The said newspaper gave prominent publicity to the acts ofterrorist movements operating in the North, particularly to thoseof the movement which called itself the Tamil Eeelam LiberationFront (T.E.L.F.).and often eulogised such conduct with a view toencouraging the growth of such movements and the use of forceagainst the lawfully established Government.
18. The conduct and excesses alleged to be committed in theNorth by the law enforcement agencies and military authoritieswas given prominent coverage (often in bold type) and effortswere made to describe such conduct in detail in an endeavour toarouse communal passions and to create unrest among thepopulace. In some instances grossly exaggerated versions ofcertain incidents were given to serve a similar objective.
I also wish to bring to the attention of Your Lordship'sCourt that immediately prior to my order of 1 st July 1983' anHartal sponsored by a terrorist movement referred to above,namely Tamil Eelam Liberation Front, led to large-scale violencein the North resulting in serious loss and damage to property. Iwas of the view that the sealing of the 'Saturday Review' (andanother newspaper in Jaffna) was a measure which wasnecessary to prevent further escalation of the violence.
I state that the two orders made by me were made bonafide and on being satisfied that upon a consideration of thecontents of the " Saturday Review " newspapers published priorto the date of order of 1 st July 1983 that they contained matterwhich was calculated to be prejudicial to the interest of nationalsecurity, preservation of public order and matter likely toencourage or cause unrest, communal disharmony and civilcommotion in the country.
23. I annex hereto marked " 1R1 " to " 1R14 random extractsof articles and news items which appeared in the SaturdayReview in its recent publication prior to its orders dated 1.7.83and 18.7.83 by me.
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The petitioners in their petition denied in advance theaverments of the respondents-petitioners, particularly inparagraph 24. In paragraph 35 thereof they have stated that" Saturday Review" has been critical of some aspects ofgovernment policy. These criticisms were made bona fide inrespect of public affairs. In Paragraph 36 they say that the orderof the Competent Authority is a cover and a sham to achieve thepurpose of preventing the " Saturday Review " in carrying viewsand news which may lead to criticism of the actions of theGovernment.
Counsel for the petitioners was at pains to satisfy us that adaily censorship of the offending news, if any, could have metthe exigencies of the moment and the closure of the newspaperoutright was apart from it being an infringement of Art. 12(1)was an act done in excess of jurisdiction in the circumstances.
I have already cited passages from judgments which lay downthat it is not for a Court to substitute its opinion for that of theCompetent Authority where the Court is satisfied that thematerial before the Competent Authority was capable, ofsupporting the views and the opinion formed by the CompetentAuthority when making the order. All the issues of the newspaperhave been placed before us and I have gone through practicallyevery one of them and I find it difficult to take the view that theorders impugned are so unreasonable that no reasonable personin the shoes of the Competent Authority could reasonably haveacted otherwise in the circumstances of grave domestic disorderagainst which such orders had been made. I must, however,confess that this newspaper in its earlier issues had more or lessapproximated to the laudable objectives of the brochure which ithad published as its philosophy. It will be tedious to giveexcerpts of the news items and articles that must, in their impact,provoke and incite the readers to violence as also to giveexcerpts of articles and editorials which looked at the problemsfrom an intellectual angle suggestive of reaching solutions tothose problems. It has been said that this is an Englishnewspaper and its readers are not drawn from the mob.
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It is clear, however, from the paper itself that undergraduates inthe Universities in the North and the East are some of theintended readers, and it is common knowledge that they are veryagitated over these problems.
In all the circumstances, it is my view that the petitioners havefailed to satisfy the legal test required by judgments to besufficient to set aside the impugned order made during anEmergency in the exercise of our jurisdiction to review suchorders.
I, therefore, dismiss these applications without costs.
Applications dismissed.