WIJENAIKE v. AIR LANKA LIMITED AND OTHERS

036-SLLR-SLLR-1990-V-1-WIJENAIKE-v.-AIR-LANKA-LIMITED-AND-OTHERS.pdf


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Wijenaike v. Air Lanka Limited and Others
293
WIJENAIKE
V.
AIR LANKA LIMITED AND OTHERS
SUPREME COURT.
H. A. G. DE SILVA. J„ KULATUNGA. J. AND RAMANATHAN. J..
S C APPLICATION No. 223/88,
OCTOBER 13 AND 31, NOVEMBER 15 AND 16, 1989.
Fundamental rights – Termination of employment for vacation of post ■ Unequal treatmentand discrimination ■ Article 12(1) of the Constitution – Time Bar – Breach of contract and ■statutory and constitutional rights ■ Jurisdiction.
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The petitioner joined Air Lanka as a Cadet Pilot on 10.06.84. He left the country on 22.12.87with a view to employment with Gull Air having applied on 19.12.87 tor 03 years no payleave. Leave however was refused. On 04.02.88 the petitioner returned and on 22.02.88applied to be rostered for duty. This was not allowed. Air Lanka by letter dated 06.05.88informed petitioner that he had vacated post. The petitioner's position was that he had onlyprospected for foreign employment and he had made a separate application for annualleave (55 days) and left with the assurance of the Chief Pilot that it would be allowed andreturned before the expiry of the annual leave. He also submitted that other officers whosought foreign employment had received favoured treatment. On his appeal to theauthorities, the Chairman, Air Lanka on 23.08.99 wrote that his grievance would be lookedinto. On 08.11.88 the Chairman informed the petitioner he could not be re-employed. Thequestions for determination were,
was the application time barred;
was this only a question of breach of contract not involving statutory andconstitutional rights;
has there been unequal treatment in violation of petitioner's rights under Article
12(1).
Held :
(a) there is no automatic termination of services even for breach of the condition ofservice Cl. 12.2 which is as follows
"A first officer who continues to be guilty of unauthorised absence beyond 48 hours
may be dismissed from service at the discretion of the company';
Or for breach of Cl. 15 which prohibits a first officer against employment in any outsideemployment or aircraft whatsoever without prior written permission of the company
The principles of Roman Dutch Law entitling the employer to repudiate the contract onthe ground of absence of the servant in appropriate circumstances necessarily implies aright in the employee to give his explanation before a final decision is taken to repudiateor revoke the contract. This principle is acknowledged in the Establishments Code inrespect of public officers.
The relevant date is 08.11.88 when the Chairman refused re-employment and hencethe application to the S.C. dated 06.12.88 is not time barred.
In India and Sri Lanka public officers enjoy a status and the rights and liabilities of theiremployment arise from constitutional or statutory provisions. Their relationship with theState goes beyond contract. They are. therefore, competent to invoke the jurisdiction ofthis Court for the enforcement of their right to equality before the law and equal protectionof the law under Article 12(1) of the Constitution However, in the case of a publiccorporation which is an agency of the government, a breach of contract between anemployee and the agency would not per se attract the provisions of Article 12(1). Such anemployee can complain of a violation of that Article only if the rights and obligations underthe contract of employment are imposed by statutory provisions. This is a question thatmust be decided in each case having regard to the conditions of employment and theintention of the relevant statute. If the remedy sought arises purely from the contract basedon the consent of parties Articles 12(1) and 126 have no application in which event the
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dispute must be resolved by an ordinary suit provided by private law, even if the disputeinvolves an allegation of discrimination.
Even though it may be a government agency, Air Lanka is a oompany duly incorporated °under the Companies Ordinance. There is no provision in that Ordinance nor any otherstatute which governs the petitioner's contract of employment with Air Lanka. Thepetitioner's grievance has to be resolved by a private law remedy such as the Applicationhe has already made to the Labour Tribunal.
This Court has no jurisdiction to hear and determine the petitioner's application.
Cases referred to:
Roberts and Another v.Ratnayake and Others [1986] 2 Sri L R36.
Gamaethige v. Siriwardena [1988] 1 Sri L R 384.
Tha Lanka Estate Workers' Union v. The Superintendent. Hewagama Estate 13L TR/1212 decided on 15.01.69 – Appeal dismissed by Supreme Court on 02.02.70(SCM) in S.C. 7- 9/69.
Jayawardena v. Attorney-General FRO (1) 175.
Gunawardena and Others v. E. L. Senanayake and Others FRD (1) 178.
Rajaratne v. Air Lanka Limited [1987] 2 Sri LR 128
Palihawadana v. Attorney-General and Others FRD (1)page 1.
Elmore Perera v. Major Montague Jayawickrema and Others [1985] 1 SriL R285.
Perera v. University Grants Commission FRD (1) 103.
Eheliyagoda v. Janatha Estates Development Board and Others FRD (1) 243.
Jayasinghani v. Union of India AIR 1967 SC 1427.
State of Mysore v. S. R. Jayaram AIR 1968 SC 34.
BalKrishnan Vaidv. The State of Himachal Pradesh and Others AIR 1975HimachalPradesh 30.
Prabhakar Ram Krishna Jodh v. A. L. Pande (1965) 2 SCR 713.
C. K. Achutan v. State of Kerala AIR 1959 S.C..490.
Radhakrishna Agrawa! and Others v. State of Bihar and Others AIR 1977S.C. 1496.
R. V. Berkshire Health Authority, ex parte Walsh 1984 3 All E R 425 C.A.
Ratnakar Visvanath Joshi and Others v. Life Insurance Corporation of India andOthers 1975 Lab. I.C.
Abeywickrema v. Pathirana and Others [1986] 1 Sri LR 120.
Nanayakkara v. The Institute of Chartered Accountants of Sri Lanka and Others[1981] 2 Sri LR 52.
Akbar Ahad v. State of Orissa AIR 1971 Orissa 207.
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APPLICATON for relief for the infringement of the fundamental right of equality.
R. K. W. Gunasekera with Colin Senarath Nandadeva for petitioner.
C. Seneviratne, P.C. with M. A. Bastiansz for 1st to 3rd respondents and 5th and 6thadded respondents.
Cur. adv. vult.
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March 14.1990
KULATUNGA, J.
The petitioner joined the 1 st respondent company (hereinafter referred toas ‘Air Lanka’) on 10.06.80 as a Cadet Pilot. He was appointed as a FirstOfficer with effect from 22.06.84. He left the country on 22.12.87 with aview to employment with Gulf Air having made an application on 19.12.87(P1) for 3 years no pay leave for that purpose. The petitioner claims thatpending approval of no pay leave he had been allowed annual leave for55 days which was available to him. However, the respondents deny this.
The petitioner's application for no pay leave was not approved and theAir Lanka administration was considering whether his services should beterminated for joining Gulf Air without obtaining approval therefor. At thisstage, the petitioner returned from abroad on 04.02.88 before the expiryof his annual leave and applied to be rostered for duty. This was notallowed. Thereafter despite the petitioner's request dated 22.02.88 to berostered forduty (P4) and forwarded to the Manager Personnel Air Lankaby the President of the Pilots Guild on 07.03.88 with his recommendation(1R8) Air Lanka by its letter dated 06.05.88 (P6) informed the petitionerthat he had vacated his employment with Air Lanka on 23.12.87 bybecoming an employee of Gulf Air without permission and being absentwithout obtaining prior leave. He was also accused of gross selfishness,disloyalty and ingratitude.
By his letter dated 15.08.88 (P7) the petitioner made representationsto the Chairman and the Board of Directors of Air Lanka against the noticeof vacation of employment. Briefly his position is that he had onlyprospected for foreign employment with notice to Air Lanka utilising for hispurpose his annual leave. He had made a separate application for annualleave and left with the assurance of the Chief Pilot that it would beallowed; that he returned before the expiry of annual leave. He alsosubmitted that other officers who sought foreign employment hadreceived favourable treatment even though their conduct had beenculpable in some aspects. He denied that he had vacated his employmentwith Air Lanka in that his annual leave had been allowed as is evident,inter alia, from entries in the duty roster (P2), Captain Ratnayake'sobservations (P18) and staff and telephone list (P25). He also denied theother accusations made against him. He requested that he be reinstatedin service.
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The Chairman, Air Lanka by his letter dated 23.08.88 (P8) acknowl-edged the petitioner's representations and informed him that his griev-ances will be looked into and a reply will be sent as early as possible.Thereafter by letter dated 08.11.88 (P6A) the Chairman informed thepetitioner that they were unable to re-employ him for the reasons set outin the letter dated 06.05.88 (P6).
The petitioner sought to challenge the termination of his services firstlyby an application dated 01.11.88 under S. 31B of the Industrial Disputes-Act addressed to the Labour Tribunal pursuant to which the Tribunal hascalled upon Air Lanka to transmit its answer to the petitioner’s application(1R3). I n his application to the Tribunal the petitioner seeks reinstatementwith back wages on the ground of unlawful and unjust termination of hiscontract of employment. Secondly, he invoked the jurisdiction of thisCourt by filing this application on 06.12.88 alleging that by reason of theaction taken against him Air Lanka and its officers – the 2nd and 3rdrespondents have subjected him to unequal treatment and unjust dis-crimination. He prays for a declaration that the respondents have violatedhis fundamental rights guaranteed by Article 12(1) of the Constitution,and for compensation in a sum of Two Million Rupees.
The 4th respondent – Attorney .General did not participate in theseproceedings. We have heard submissions of the learned Counsel for thepetitioner and the other respondents. Air Lanka through its Chairman, the2nd respondent and the Chief Operating Officer, the 3rd respondentresisted the application of the petitioner on the following grounds:-
that this application is time barred under Article 126 of the Consti-tution in that it has not been filed within one month from the allegedinfringement or the imminent infringement of the petitioner'sfundamental rights;
that the remedy sought by the petitioner arises from an allegedbreach of contract not involving constitutional or statutory rightsand as such the petitioner is not entitled to invoke the jurisdictionof this Court under Article 126 on the ground of a denial of the equalprotection of the law within the meaning of Article 12 (1) of theConstitution.
that if the petitioner's application is not time barred and the remedysought by him is within the ambit of Article 12 (1), on the facts of
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this case he has not been subjected to any unequal treatment inviolation of his rights under Article 12 (1).
While the first of these grounds is a familiar one, the second groundhas hitherto not been considered in depth except perhaps in Roberts andAnother v. Ratnayake and Others (1). The question whether every act oromission of the government or a corporate body which is an agency ofthe government is liable to challenge for a denial of the right to equality. before the law and equal protection of the law guaranteed by Article 12(1)of the Constitution even if the remedy sought is not founded upon astatutory right but arises from a purely contractual or private right is of theutmost importance. Whilst there are many fundamental rights the viola-tion of which can be established in an application under Article 126without proof of any statutoty base apart from the constitutional provisionwhich guarantees the right, an allegation of the violation of rights underArticle 12(1) requires proof of the denial of equality before the law or theequal protection of the law by executive or administrative action. TheCourt has, therefore, to interpret the meaning of the word ‘law' in Article12(1). The Article guarantees that both at the stage of making a law aswell as at the stage of its application, the right to equality is observed. Allpersons who are similarly circumstanced are entitled to this right and areprotected against unjust discrimination.
A decision on the limit of the jurisdiction of this Court in applicationsbased on Article 12 (1) is very necessary to ensure that the exclusivejurisdiction vested in it by Article 126 is not exceeded. If we were to exceedour constitutional jurisdiction, we would not only be trespassing on thejurisdiction of other courts and tribunals administering justice but alsoinduce aggrieved parties to abandon their lawful and effective remedieselsewhere and to look to this Court for resolution of disputes which, inview of the -summary procedure prescribed by Article 126 and therelevant rules, this Court may be ill-equipped to decide having regard tothe complicated nature of the dispute and the relevant evidence whichcan only be assessed in proceedings which provide for confrontation andcross examination of witnesses.
Is the Petitioner’s Application Time Barred?
Mr. Gunasekera, learned Counsel for the petitioner submitted that therelevant date for computing time is 08.11.88 which is the date of the letter
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of the Chairman, Air Lanka (P6A) informing the petitioner in reply to hisrepresentations that the company was unable to re-employ him. Hecontended that the notice of vacation of employment dated 06.05.88 (P6)was not final and does not constitute the infringement of the petitioner'sfundamental rights; that as is evidenced by the Air Lanka letter dated23.08.88 (P8) a decision on the subject was pending even according toAir Lanka;, and that the decision which constitutes the infringement offundamental rights is the one contained in the letter dated 08.11.88(P6A). In his further affidavit dated 29.05.89 the petitioner states that itis shortly after 08.11.88 that he became aware for the first time of theaction by Air Lanka that was violative of his rights under Article'12(1) ofthe Constitution. Mr. Gunasekera submitted that the decision in Ga-maethige v. Siriwardena (2) has no application to the facts and circum-stances of this case.
Mr. L. C. Seneviratne, PC, learned Counsel for the respondentssubmitted that on 04.02.88 when the petitioner returned and requestedto be rostered for duty the respondents took up the position that thepetitioner was not in the service of the company and could not be rosteredfor duty. On 04.02.88 the petitioner had got the Crew Scheduling OfficerMr. Olagama to make a log entry to the effect that he had reported for duty(3R20). On 09.02.88 he had sent a telegram to the Personnel Manager,Mr. Wickremasinghe stating that he was reporting for duty that day(1R12). However, he was not rostered. Subsequently, the President ofthe Pilots Guild interviewed the Personnel Manager and arranged for thepetitioner to make his representations dated 22.02.88 (P4) in reply towhich Air Lanka informed him by their letter dated 06.05.88 that he hadvacated his employment on 23.12.87 (P6).
On the foregoing facts, learned President’s Counsel submits that thepetitioner became aware of the infringement of his rights from 04.02.88and certainly by 06.05.88. He did not protest against it but made hisappeal on 15.8.88. This was considered and refused on 08.11.88 (P 6 A).Counsel contends, that the said appeal was made in consequence of aninfringement which the petitioner himself says had occurred much earlier;but the petitioner filed his application only on 06.12.88 which is outside theone month prescribed by Article 126; and that he has not explained hisdelay.
In his further affidavit, the petitioner takes up the position that there isprovision in the Establishments Code for an officer on whom an order of
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vacation has been served to volunteer an explanation, within a reason-able time and for the appropriate disciplinary authority to consider theexplanation and to allow or refuse permission to resume duties: ChapterV – S. 7.4; there is further provision in the Establishments Code where anofficer is so refused permission for the officer’s appeal to be referred tothe Public Service Commission within three months of the order of suchrefusal. Vol. 11 Chapter XLV111 S.27.1. Accordingly, the administrativeprocess for the termination of his services was completed only on08.11.88.
However, the 3rd respondent in his further affidavit has stated that theEstablishments Code does not apply to employees of Air Lanka which isa company incorporated under the Companies Ordinance, and that theseemployees are not members of the Public Service and hence are notgoverned by the Establishments Code. The petitioner has not placed anymaterial which would establish the applicability of the EstablishmentsCode to employees of Air Lanka. As such, I shall proceed to consider thepreliminary objection on the footing that the Establishments Code doesnot apply to them.
In my view, the answer to the issue on the time bar is to be found in theprinciples of law applicable to termination of employment by vacation. InEnglish Law, absence of an employee from his place of work in circum-stances which make the performance of the contract of employmentimpossible automatically terminates the contract on the ground of frustra-tion – Unger v. Preston Corporation. In Roman Dutch Law, the contractof employment is not automatically terminated by the servant's absence.Such absence only entitles the employer to terminate the contractforthwith. However, mere absence will not warrant dismissal in everycase. See Maasdorp’s Institutes of South African Law, Vol. (3) 6th ed.pages 215-217 where it is also stated –
"The decision in each case depends on its own circumstances andamongst others, upon the nature of employment and the length of theabsence and upon the question whether the employer was prejudicedby the absence or not".
Roman Dutch Law which is the Common Law of Sri Lanka applies totermination of employment by vacation. S.R. de Silva ‘Legal Frameworkof Industrial Relations in Ceylon’ p. 579 cites the order of the LabourTribunal in The Lanka Estate Workers' Union v. The Superintendent,
SCWijenaike v. Air Lanka Limited and Others (Kulatunga, J.)301
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Hewagama Estate (3). In that case, a workman who had been in policecustody was released about two years later. On his return he reported forwork but was refused employment. The employer's position was that theworkman had abandoned his employment or that the contract of employ-ment ceased to exist by the operation of the doctrine of frustration. TheTribunal held that there was no abandonment as the workman had nointention of abandoning his employment. S.R. de Silva cites the followingpassage from the order of the Tribunal.
“Since the doctrine of frustration does not apply the arrest of the
workman andsubsequent imprisonment may have in law
entitled the respondent to determine the contract of employment whichwas not been done. The Roman Dutch Law does not recognise theinvoluntary frustration of contract but acknowledges that superveningcircumstances may make it impossible forthe contractto be performedin which event either party could take steps to revoke or repudiate thecontract” (S.R. de Silva pp. 579 – 580).
The above principle of Roman Dutch Law has not been excluded bythe petitioner s contract of employment and the conditions of service withAir Lanka (3R1.3R2). Thus, Cl. 12.2 of the conditions of service states-
“A First Officer who continues to be guilty of unauthorised absencebeyond 48 hours may be dismissed from service at the discretion ofthe company”.
It follows that the termination of employment by vacation is not automatic.
Cl. 15 prohibits a First Officer against employment in any outsideemployment or aircraft whatsoever without prior written permission ofthe company.
Breach of this condition would constitute misconduct within the meaning
of Cl. 7.2. for which a First Officer “may be dismissedwithout
notice". The services of a First Officer for breach of Cl. 15 can beterminated only after due inquiry although in exceptional circumstanceswhere it is necessary in the interest of the service to do so the order ofdismissal may be made without notice . It is implicit that even in such acase the officer would have a right to make representations on beinginformed of the dismissal and to obtain relief if he can. There is thus noautomatic termination of services even for a breach of Cl. '15.
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The principle of Roman Dutch Law which only entitles the employer torepudiate the contract on the ground of the absence of the servant inappropriate circumstances would necessarily imply a right in the employeeto give his explanation before a final decision is taken to repudiate orrevoke the contract. This is the principle which has been acknowledgedin respect of public officers by the relevant sections of the EstablishmentsCode relied upon by the petitioner. Even if that Code does not apply to AirLanka employees, the petitioner is entitled to the benefit of the principleof Roman Dutch Law as determined above. In this view of the matter theinfringement of the petitioner’s rights would arise upon the final decisiondated 08.11.88 refusing to re-employ him after considering hisrepresentations.
The decisions cited by the learned President 's Counsel do not raise thekind of issue which arises here and have no application to the case beforeus. Thus in Gamaethigs v. Siriwardena (supra) the petitioner did not cometo Court within one month either from the date on which he was informedthat his request for restoration of his place in the waiting list for govern-ment quarters cannot be granted or from the date on which his appealtherefromto the Secretary/ Ministry of Public Administration was refused.In Jayawardena v. Attorney- General (4) the petitioner, the holder of apermit under the Crown Lands Ordinance renewable annually came toCourt long after steps to cancel the permit were taken and only afterreceiving summons to appear in the Magistrate’s Court in proceedingsunder the State Lands (Recovery of Possession) Act. It was held that hisapplication was out of time in that it had not been made within one monthfrom the date on which he became aware of the infringement or theimminent infringement of his fundamental rights. In Gunawardena andOthers v. E. L. Senanayake and Others (5) the allegation was that thepetitioners were not allowed lands for their children whilst similar claimsof others had been allowed. It was held that the petitioners had failed tofile their petition until long after becoming aware of such discrimination.The application was dismissed as it had not been filed within one monthfrom the date of the alleged violation of the fundamental right claimed bythem.
Accordingly, I hold that the petitioner has filed his application withintime and reject the preliminary objection raised in that regard. This takesme to the second ground urged against the application.
SCWijenaike v. Air Lanka Limited and Others (Kulatunga, J.)303
Mr. Gunasekera concedes that there are cases in which a right with apublic corporation could be purely contractual but submits that if Air Lankais an agency of the Government (it has been so held in Rajaratne v. AirLanka Limited (6) equality follows; that Air Lanka officials are entitled toequality at all points in their career; that Article 16 of the Indian Constitu-tion (which guarantees equality of opportunity for all citizens In mattersof employment or appointments to any office under the State) is builtinto our Article 12 (1) ; that in order to found a violation of the right toequality before the law or the equal protection of the law, administrativeacts of discrimination need not be referable to law in the sense of statuteor subordinate legislation; that laws, regulations, rules, schemes and anyadministrative action are all caught up by Article 12 (1); that fairnessof theprinciple of equality must apply to all administrative action; and that whatshould control administrative discretion is not the existence of a statutorybase but that it should be fair between equals. He seeks to distinguish thedecision in Roberts case (supra) on the basis that it is a case involving thetermination of a contract entered into by the Municipal Council of Kandy(an organ of the government) with an outsider and that the party affectedwas not an officer of the Council. In support of his submissions, learnedCounsel also cited dicta from several decisions of this Court, which I shalllater examine.
Mr. L.C. Seneviratne , PC, in reply cited a series of decisions andsubmitted as follows
Merely because a public authority which is an organ of govern-ment (even if established by statute) performs functions within thefield of public law, it does not perse result in its contracts of em-ployment as falling within the ambit of public law.
It is only if those contracts are underpinned by statutory provisionsthat they could be regarded as falling within the ambit of public law.
Otherwise such contracts are purely private law transactions andrights of parties are governed by contractual terms.
These principles apply to all contracts – employment or otherwise.
Rights arising from private contracts should not be confused withpublic duties which public bodies have to perform which fall withinthe field of public law.
Employees of public corporations or bodies or an organ of Statedo not ipso facto acquire status which government servants or
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public officers acquire by reason of employment in the governmentservice.
The dispute raised by the petitioner arises from contract; it is outof the domain of public law and hence the petitioner cannot invokethe jurisdiction of this Court under Article 126 read with Article 12(1).
Mr. Gunasekera referred us to several dicta appearing in certainfundamental rights cases involving the right to equality under Article 12.He cited Palihawadana v. Attorney – General and Others (7) (Job Bankcase) Sharvananda, J. (as he then was) said (p.6).
“What is postulated is equality of treatment to all persons in utterdisregard of every conceivable circumstance of the difference, such asage, sex, education and so on and so forth as may be found amongstpeople in general. Indeed, while the object of the Article is to ensurethat invidious distinction or arbitrary discrimination shall not be madeby the State between citizen ‘A’ and citizen 'B' who answer the samedescription and the differences which may obtain between them are ofno relevance for the purpose of applying a particular law or operatingan administrative scheme, reasonable classification is possible and acertain measure of inequality is permitted. The State is permitted tomake unequal laws ortake unequal administrative action if it is dealingwith individuals or groups whose circumstances and situations aredifferent".
Wanasundera, J. said (p.27):
“ In my view there is implicit in this scheme the duty on the Memberof Parliament to exercise the powers reposed in him in a fair andrational manner so that there will be no inequality in the administrationof the scheme”.
The use of the expressions “scheme” and “administrative action” in theabove passages would not support the wide meaning which Mr.Gunasekera seeks to give to the word ‘law’ in Article 12 of the Constitutionin that the Job Bank Scheme under attack in that case was not a merescheme or administrative action having no statutory force. It is a schemewhich providesforthe select ionof persons to be considered forappointmentas public officers or as employees of other bodies including appointments
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giving rise to a status or rights and obligations imposed by constitutionalor statutory provisions.
In Elmore Perera v. Major Montague Jayawickrema and Others (8),Sharvananda, C.J .said (pp. 301-302):
'The concept of equality permeates the whole spectrum of a publicservant’s employment from appointment through promotion and termi-nation to the payment of his pension and other benefits”.
At page 321 he said :
'The principle of equality before the law embodied in Article 12 is anecessary corollary to the high concept of the Rule of Law underlyingthe Constitution”.
These passages which have relation to public officers who enjoyconstitutional rights as opposed to mere contractual rights do not contem-plate the employees of institutions such as Air Lanka; and hence the dictarelied upon cannot be used to advance Mr. Gunasekera’s submission onthe interpretation of Article 12 (1).
In Perera v. University Grants Commission (9) Sharvananda, J. (ashe then was) said (p. 111) ;
“Equality of opportunity is only an instance of the general rule ofequality laid down in Article 12".
This case determined an application for the enforcement of the right ofstudents to be considered for admission to the University by selectionmade in the exercise of the powers of the University conferred by theUniversities Act, No. 14 of 1978. The remedy sought arose out of statute.As such it does not advance the construction which Mr. Gunasekeraseeks to place on Article 12 (1) of the Constitution.
In Eheliyagoda v. Janatha Estates Development Board and Others(10). (consolidated with two other similar petitions) the petitioners chal-lenged an offer by the JEDB to appoint them as Asst. Field Officers in theJEDB by way of absorbing them into the Board’s service from theirprevious employment in the Dehiovita Electorate Land Reform Co-
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operative Society Ltd. where they held positions falling within the Execu-tive Grade. The position taken by the respondents was that the offer wasmade pursuant to a scheme of reorganization in terms of which thepetitioners have been offered alternative employment. Wanasundera, J.said (p.249): –
“We are not satisfied that the determinations relating to
these petitioners are based on just and reasonable criteria. Thediscretion that has been exercised in these cases is one that isunfettered, unregulated and without guidelines. There is also nothingin the material to show that the cases of petitioners were consideredon their merits and how their cases compared with those of the otherswho obtained appointment and vice versa".
This judgment makes no express reference to Article 12 of the Constitu-tion; but it is very clear both from the subject considered and theauthorities cited that the remedy sought was on account of an allegeddenial of the right to equality before the law and the equal protection of thelaw under Article 12. The decision does not examine the question whetherthe remedy sought is founded on law within the meaning of Article 12(1)or whether it falls purely into the field of private law. At the same time thetwo decisions cited, Jayasinghani v. Union of India (11) and State ofMysore v. S.R. Jayaram(i2) are in respect of alleged violations of Article14 and 16 (1) of the Indian Constitution in respect of appointments in thegovernment service. In the context, this decision also is of no assistancein determining the specific issue raised before us as to the applicability ofArticle 12(1).
I shall now examine the decisions cited by Mr. L. C. Seneviratne, PC.The learned President’s Counsel first cited authority for the propositionthat even within the public service there can be contracts which have nostatutory base. He cited Bal Krishnan Vaid v. The State of HimachalPreadesh and Others (13).,a decision of the Himachal Pradesh HighCourt. This was a writ petition under Article 226 of the Indian Constitutionto quash an order made by the Himachal Pradesh Government terminat-ing a quarrying contract held by the petitioner in terms of which thepetitioner supplied sand, stone and bajri required for a project. Thegrounds of invalidity urged against the order included an allegation thatthe petitioners had been discriminated against in as much as no such
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action had been taken in respect of two other contractors supplyingmaterial to the project. This allegation was based on Article 14 (our Article12) of the Constitution.
The issue before the Court was whether the petitioner had establisheda right or obligation founded in statute or that the State had acted in thecontext of law entitling the petitioner to the writ sought or it was a merebreach of contract in respect of which the petitioner was not entitled to awrit or to invoke Article 14.
The petitioner's claim to relief was based inter alia on the submissionthat Cl. 3D of the contract which empowered its termination in the publicinterest was statutory in that the contract was signed in form ‘K’ asrequired by Rule 33 of the rules made under the Mines and Minerals(Research and Development) Act 1S57. Pathak, C.J. giving reasons fordismissing the writ petition said (pp. 32, 33):
“If the term or condition which creates the right or obligation iscontained in the statute then the violation of the term or condition is,a
violation of statuteBut if the term or condition has legal force
only when it is incorporated in a contract between the parties, thenviolation of that term or condition amounts to a mere breach of contractand that is so even if that term or condition is required by the statuteto be incorporated in a contract. The question always is;
Does the term or condition upon which the grievance is founded,have legal force because it is a provision of the statute or only becauseit is a clause of the contract ?"
By way of illustration Pathak, C.J. cited Prabhakar Ram Krishna Jodhv. A.L. Pande (14) in which the Supreme Court held that an order oftermination of services of the appellant, a teacher of a college affiliatedto the University of Saugar was violative of his statutory rights under Cl.8 of the Ordinance relating to the security of the tenure of teachers madeunder the University of Saugar Act and which was part and parcel of theTeachers’ Service Conditions. The Supreme Court held that Cl. 8 of theOrdinance gave the appellant a right to apply under Article 226 for reliefand the consideration that he had entered into a contract was immaterial.
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Pathak, C.J. analysed the termination clause in the case before himthus (p.33) :
‘The provision for such termination is to be found in the agreement.
It is not a provision of the Act or RulesTo be more specific, the
rules do not mention that the contract can be terminated by thegovernment in the public interest. Authority for the termination of thecontract on that ground is to be found in the contract alone. It is a rightfounded in contract, it is not a power issuing from the statute".
Considering the allegation of discrimination based on Article 226Pathak, C.J. said (p.34):
“Had the discrimination been applied in the course of granting a
contractthe discriminatory action of the Government would be
referable to its statutory authority because the statute empowers thegovernment to enter into such contracts. But once the contract has beenconcluded between the government and an individual any action taken bythe government in the application of a term or condition of contract mustbe attributable to the capacity of the government as a contracting party.When the government passes from the stage of granting the contract tothe stage of exercising rights under it, it passes from the domain ofstatutory rights into the realm of contract. And as was observed by theSupreme Court in C.K. Achutanv. State of Kerala AIR 1959 SC 490 “(15)a contract which is held from the government stands on no differentfooting from a private party”. In my view Article 14 of the Constitutioncannot be invoked by the petitioner”.
The next case cited is Radhakrishna Agrawal and Others v. State ofBihar and Others (16) which considered certain appeals concerning writpetitions under Article 226 challenging the revision of royalty payable bythe petitioners-appellants under a lease and the subsequent cancella-tions of the lease. The petitioners claimed constitutional rights based onArticles 298 and 14 of the Constitution. Under Article 298 executive powerof the Union and each State shall extend inter alia to the making ofcontracts for any purpose. Counsel for the petitioners urged that the Stateacting in its executive capacity, even in the contractual field, cannotescape the obligations imposed by Part 111 of the Constitution includingArticle 14 which guarantees equal protection of the laws. Beg, C.J.expressed his opinion on the Counsel’s submission thus (p. 1501)-
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“Learned Counsel contends that in the cases before us breaches ofpublic duty are involved. The submission made before us is that,whenever a State or its agents or officers deal with the citizen, eitherwhen making a transaction or, after making it, acting in the exercise ofpowers under the terms of a contract between the parties, there is adealing between the State and the citizen which involves performanceof “certain legal and public duties”. If we were to accept this very wideproposition every case of a breach of contract by the State or its agentsor its officers would call for interference under Article 226 of theConstitution. We do not consider this to be a sound proposition at all”.
The Court reiterated the position that at the threshold stage or at thestage of granting the contract, acts of the State would be governed byconstitutional provisions but subsequent acts in the field of contract arenot so governed unless the power or obligation is statutory. Beg, C.J. said(p.1500)-
"At this (threshold) stage, no doubt the State acts purely in itsexecutive capacity and is bound by the obligations which dealings ofthe State with the individual citizens import into every transactionentered into in exercise of its constitutional powers. But after the Stateor its agents have entered into the field of ordinary contract, therelations are no longer governed by the constitutional provisions but bythe legally valid contract which determines rights and obligations of theparties inter se. No question arises of violation of Article 14 or of anyother constitutional provision when the state or its agents purporting toact within this field perform any act. In this sphere, they can only claimrights conferred upon them by contract and are bound by the terms ofthe contract only unless some statute steps in and confers somespecial statutory power or obligation on the State in the contractualfield which is apart from contract”.
In Roberts and Another v. Ratnayake and Others (1) this Court heardan application arising from the termination of a lease of 3 stalls and 2 sitesof bare lands held by the 2nd petitioner from the Muncipal Council, Kandy.The petitioners complained that the termination was violativ< ■ of Article 12(1). Ranasinghe, J. (as he then was) having considered the decisions inBatKrishnan Vaid (13) and Agrawa I (16) cases (supra) and tne relevantprovisions of our Constitution said (p.44):
“On a consideration of the principles contained in the judgmentsreferred to above, and the provisions of both Articles 12 (1) and 170 of
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the Constitution, the principles that govern the question, which calls tordetermination, are, in my opinion, that the ‘law', equality before whichand equal protection of which is guaranteed by Article 12 (1) of theConstitution, constitutes only those statutory provisions contained inActs of Parliament, and in any enactment passed by a legislature ofthis Island at any time before the Constitution was promulgated inSeptember, 1978, including all orders in Council promulgated beforethe Constitution came into operation, and also those by-laws which, asset out earlier, are also as valid and effectual as if enacted in the mainstatute; that where the State enters into a contract with a citizen inpursuance of statutory power, the State or such agency is, at the“threshold stage" or at the stage at which such contract.is beingentered into, bound by the operation of the provisions of Article 12(1)of the Constitution; that once such agreement is validly entered into allparties to such agreement – the State, the state agency, and thecitizen – are all ordinarily bound only by the terms and conditions setout in such agreement; that, if, however, there exists a statutoryprovision which, whether included expressly or impliedly, as a term orcondition of such agreement or not, confers some special power evenin the field of contract, then such provision affects the rights andobligations of the parties under such agreement; that if the term orcondition, which creates rights or obligations of the parlies under theagreement, has legal force only because it is incorporated in suchagreement, then any violation even by the State amounts only to abreach of contract, even where such term or condition has beenincorporated because a statutory provision requires it to be so incor-porated; that where the rights and obligations of parties to suchagreement have to be determined according to the law of contract,then even the State has to be treated in the same way as any otherordinary party to a legally binding contract; that where the rights andobligations of the parties to such contract fall to be determined by theordinary law of contract, then the provisions of Article 12 (1) of theConstitution have no application, and cannot be invoked".
Learned President's Counsel also cited certain cases dealing withemployment. Ido not consider it necessary to examine all the cases cited.Of them the case of R.v.Berkshire Health Authority, ex parte Walsh (17)(Court of Appeal) – although it is only concerned with the question whetheran order terminating the employment of the petitioner is subject to judicialreview by the issue of a writ of certiorari – is very instructive on some
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aspects which are relevant even in the field of fundamental rightsguaranteed by the Constitution. These are rights which are as much in thesphere of public law as are statutory rights enforceable through writs.
The petitioner Mr. Walsh was employed by the East Berkshire AreaHealth Authority as a Senior Nursing Officer at Wexham Park Hospital.His services were terminated whereupon he applied to an IndustrialTribunal alleging that he had been unfairly dismissed and seekingcompensation. He also applied for judicial review to quash the order ofdismissal. The question for decision was whether the remedy sought byMr. Walsh arose solely out of his contract of employment with the healthauthority as opposed to any public duty imposed on the authority, thelegal position being that it is only in the latter case that a writ of certioraricould be sought.
In terms of the regulations made under the National Health Service Act•conditions of service of nursing officers had to be negotiated by theWhitley Counsel and approved by the Secretary of State. Such conditionswere included in Mr. Walsh’s contract of employment. Hodgson, J. whodecided the case in the Divisional Court approached the question thus(p.429) –
“The public may have no interest in the relationship between theservant and master in an "ordinary case, but where the servant holdsoffice in a great public service the' public is properly concerned to seethat the authority employing him acts towards him lawfully and fairly.It is not a pure question of contract. The public is concerned that nurseswho serve the public should be treated lawfully and fairly by the public
authority employing themIt follows that, if in the exercise of
my discretion I conclude that the remedy of certiorari is appropriate, itcan properly go against the respondent authority”.
Sir John Donaldson, M.R. disagreeing with this approach said -(p. 430) –
“Employment by a public authority does not per se inject anyelement of public law. Nor does the fact that the employee is in a ‘highergrade' or is an 'officer'. This only makes it more likely that there will bespecial statutory restrictions on dismissal or other underpinning of his
employmentIt will be this underpinning and not the seniority
which injects the element of public law. Still less can I find any warrant
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for equating public law with the interest of the public. If the publicthrough Parliament gives effect to that interest by means of statutoryprovisions that is quite different, but the interest of the public per se isnot sufficient”.
May, L.J. said – (p. 434) :
“Further, I think that at the present time, in at least the great majorityof cases involving disputes about the dismissal of an employee by hisemployer, the most appropriate forum for their resolution is an indus-trial tribunal. In my opinion the Courts should not be astute to hold thatany particular dispute is appropriate for consideration under thejudicial review procedure provided for by R.S.C. Ord. 53”. He thoughtthat Hodgson, J. had stated the test “in far too wide terms" (p.435). Healso said – (p.436)” I doubt however, whether one should properly say,in the present context, that as a senior nursing officer Mr. Walsh held
a public positionHaving regard to the detailed terms of Mr. Walsh's
contract with the authority, I do not think that considerations whichdetermine whether he was validly dismissed do go beyond thatcontract”.
Purchas, L.J. said – (p. 442) :
“However, in my judgment the relationship between Mr. Walsh andthe health authority was one which fell within the category of puremaster and servant' although the powers of the authority to negotiateterms with its employees were limited indirectly by statute and subor-dinate legislation. Any breach of those terms of which Mr. Walshcomplained related solely to the private contractual relationship be-tween the health authority and him and did not involve any wrongfuldischarge by the health authority of rights or duties imposed on it quahealth authority”.
In Ratnakar Visvanath Joshiand Others v. Life Insurance Corporationof India and Others (18) Delhi High Court, the question was whether ascheme of benefits for payment of special pay to employees of theCorporation was available to the petitioners only as a term of theircontract of service with the Corporation or whether it was available tothem by law. The petitioners sought to quash the withdrawal of thescheme by the Chairman of the Corporation by means of a writ under
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Article 226 on the ground that the scheme was law or an order having theforce of law.
The Corporation was established by the Life Insurance CorporationAct 1956. Its power included the power to make regulations. However,Deshpande, J. observed (p. 472) "the Corporation need not wait for theframing of rules and regulations before it can start working under the Act”.In view of this and certain regulations made by the Corporation, inparticular regulation 59 relied upon by the petitioners, Deshpande, J.proceeded to state thus – (p. 472) :
"It is essential for the petitioners, therefore, to show that there is astatutory obligation imposed on the Corporation either by the Act or bythe rules or by the regulations to give the petitioner the benefit of thescheme”.
On the merits the Court thought that the withdrawal of the scheme bythe Chairman was invalid in that he did not have the authority of theCorporation to do so. However, the Court held that this was a questionconcerning the validity of the internal administration of the Corporationwhich could not be inquired into under Article 226; that the special payunder the scheme is a matter of grace which could not be claimed by theemployees as a matter of right; and that the withdrawal of the schemecannot be said to have been contrary to Articles 14 and 15 of theConstitution in that it did not discriminate against the petitioners becauseit did not favour other employees of the Corporation to the detriment of thepetitioners.
On the law, the Court held that the scheme is not covered byRegulation 59; that it consisted of mere administrative instructionscompetent under Regulation 27 (b) or 23 but did not constitute law or adirection having the force of law given in the exercise of the legislativepower of the Constitution; that if it is remuneration payable to theemployee for work done by them, then the employee can enforcepayment of the remuneration as a part of the contract of service in a suitand that such conditions of service are not enforceable by a writ petitionunder Article 226.
In view of its conclusion that the petitioners had no statutory rightsenforceable under Article 226, the Court found it unnecessary to decide
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whetherthe Corporation is a ‘State' within the meaning of Article 12. Evenif it is assumed to be a 'State' the Court held that its employees do notobtain the constitutional status of government employees. The followingpassage from the judgment sets out the position more clearly, (pp. 470
471).
"Under Article 310 of the Constitution an employee under govern-ment holds his office during the pleasure of the President or theGovernor. Under the proviso to Article 309 the President or theGovernor may frame rules governing the conditions of service of theGovernment servants. A Government servant has. therefore, in theoryno security of tenure and no equality of position as a contracting party.On the other hand constitutional obligations are cast on the govern-ment by Article 311 of the Constitution. This is why a contract of serviceunder the Government is regarded as a status under the Constitution.A corollary of the above position is that even if no rules are framedunder Article 309 the Government may determine the conditions ofservice of its employees by executive action. The executive power ofthe union may be exercised by the President under Articles 53 and 73and by the Governor under Articles 154 and 162. The constitutionalconditions of service could be changed by the mere exercise of suchexecutive power”.
The Court ruled on the rights of the employee of the Corporation thus
(P- 472) :
“ There are no provisions in the Act of 1956 or in the rules andregulations framed thereunder which transform the relationship betweenthe Corporation and its employees into status as distinguished fromcontract. The result is that the relationship between the petitioners andthe Corporation is governed either by the service contract with theCorporation for the unilateral benefit which the Corporation may giveas a matter of grace or the regulations governing certain conditions ofservice framed under section 49. It is only those conditions of servicewhich are governed by the regulations that have become a matter ofstatutory rights and obligations between the petitioners and theCorporation. The rest of the conditions of service are not a statutoryright or obligation enforceable by a writ petition under Article 226".
In Abeywickrema v. Pathirana and Others (19) the validity of theelection of the respondent as a Member of Parliament was challenged on
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the ground that at the time of his election he held public office as thePrincipal of a school and as such he was disqualified for election in termsof Article 91 (1) (d) (V11) of the Constitution. The respondent’s positionwas that he had resigned from his post on 21.04.83, a day before thenomination date. The petitioner argued that the respondent’s resignationwas not validly made in that he had failed to comply with the prescribedprocedure for resignation in that the letter of resignation was not ad-dressed to nor accepted by the appointing authority as required by s.4Chapter V of the Establishments Code which had been approved by theCabinet of Ministers under Article 55(4) of the Constitution. It was heldthat s. 4 of the Code has statutory force and is binding; that a public officeracquires a status; that his relations are governed by status and not bycontract; and that in view of non-compliance with the mandatory provi-sions of s.4, the respondant had not ceased to be a public officer on thedate of his election and was therefore a person disqualified for electionas a Member. Sharvananda, C.J. said – (p. 143) –
“ If rules made under Article 309 of the Indian Constitution attractstatutory force, in my view by a parity of argument the rules made underArticle 55 (4) also should be held to have statutory force".
In Nanayakkara v. The Institute of Chartered Accountants of Sri Lankaand Others (20) in which an employee of the Institute sought to challengedisciplinary proceedings against him by certiorari, the Court of Appealconsidered the nature of the relationship between the Institute and itsemployees. The Institute was established under Act No. 23 of 1959, s. 12of which empowered the Institute to make regulations including in respectof disciplinary control over officers. Such regulations were contained inthe Manual of Procedure, paragraph 2 of which stipulates that they maybe amended; repealed or substituted by new regulations made by theInstitute when necessary. Thambiah, J. said – (p. 61 – 62) –
“The petitioner's employment has a statutory flavour,
which differentiates his employment from the ordinary relationship ofmaster and servant. The Manual of Procedure (R1) gives rights to theemployees and imposes obligations on the employer, which go
beyond the ordinary contract of serviceIf an employee is
dismissed for unspecified reasons or if there is a breach of theseessential principles of natural justice, then the order of dismissal maybecome liable to be controlled by certiorari".
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In Akbar Ahad v. State of Orissa (21) where the government termi-nated the lease of the petitioner under C1.12 of the lease deed whilst inrespect of similar leasehold, resort had been made to the provisions of theLand Acquisition Act, it was held that from the fact that on some occa-sions, the State as lessor had waived its rights reserved under Cl. 12 ofthe lease deed, it cannot be said that the petitioners had been discrimi-nated against simply because the benefit of such a waiver had not beenextended to them. Enforcement of a contractual obligation against oneand waiver of a similar obligation under an independent contract in thecase of another does not amount to denial of equal protection envisagedin Article 14 of the Constitution.
The forgoing authorities establish that in India and Sri Lanka publicofficers enjoy a status and the rights and liabilities of their employmentarise from constitutional or statutory provisions. Their relationship withthe State goes beyond contract. They are, therefore, competent to invokethe jurisdiction of this Court for the enforcement of their right to equalitybefore the law and equal protection of the law under Article 12 (1) of theConstitution. However, in the case of a public corporation which is anagency of the government a breach of contract between an employee andthe agency would not perse attract the provisions of Article 12 (1). Suchan employee can complain of a violation of that Article only if the rights andobligations under the contract of employment are imposed by statutoryprovisions. This is a question which must be decided in each case havingregard to the conditions of employment and the intention of the relevantstatute. If the remedy sought arises purely from the contract based on theconsent of parties Articles 12 (1) and 126 have no application, in whichevent the dispute must be resolved by an ordinary suit provided by privatelaw, even if the dispute involves an allegation of discrimination.
Even though it may be a government agency, Air Lanka is a companyduly incorporated under the Companies Ordinance. Ourattentionhas notbeen drawn to any provision of that Ordinance or of any other statutoryprovision which govern the petitioner's contract of employment with AirLanka; nor have I been able to discover any such provision. I am,therefore, of the view that the petitioner's grievance has to be resolved bya private law remedy such as the application he has already made to theLabour Tribunal. An inquiry by the Labour Tribunal is also beneficial toboth parties who are entitled to the rights of an ordinary suit, of calling'witnesses and of confrontation and cross-examination of testimony at
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such inquiry on all the points in dispute. I am also of the view that thiswould promote the due and orderly administration of justice by Courts andTribunals established by law. Any other view would encourage theprolification of applications before the Supreme Court which are notwithin its jurisdiction merely because the aggrieved parties or Counseladvising them may feel that the remedy under Article 126 is convenientor expeditious.
Aggrieved parties may themselves not be able to distinguish the casesof arbitrary treatment ordiscrimination falling within the ambit of Article 12(1). It is therefore, the duty of Counsel to examine each case and to adviseclients accordingly and to dissuade them from coming to this Court in thehope of obtaining relief here even in cases of doubt. This would also helpin some measure in solving the problem of laws delays. I do not agree withthe submission of the learned Counsel for the petitioner that where aperson complains of treatment violative of Article 12 (1) of the Constitutionby a body which is a government agency such as Air Lanka what shouldcontrol administrative discretion for the purpose of the exercise of ourjurisdiction under Article 126 is not the existence of a statutory base butwhether the treatment in issue has been fair between equals even if theapplication is based on an alleged breach of contractual rights; and thatthe word ‘law' in Article 12 (1) should be construed accordingly to includeany scheme or administrative action. In my view such a construction is fartoo wide and is not supported by the relevant provisions of the Constitu-tion or authority.
In view of my findings above, this Court has no jurisdiction to hear anddetermine the petitioner’s application. As such, I do not propose toconsider the question whether the termination of the petitioner's employ-ment with Air Lanka is discriminatory in particular for the reason that anyopinion expressed by us on that matter can only prejudice either party, inthe hearing and determination of the dispute by the Labour Tribunal.Accordingly, I dismiss the petitioner's application with costs whiph I fix atRs. 1575/=.
H.A.G. DE SILVA, J. -1 agree.RAMANATHAN, J. – I agree.Application dismissed.