IS A PRIVATE COMPANY EXCERCISING STATUTORY POWERS AMENABLE TO WRIT JURISDICTION? By K. V. S. Ganeshan, BA; Attorney-at-Law In terms of the previsions of Articles 140 of the constitution of the Democratic Socialist Republic of Sri Lanka, the Court of Appeal of the Democratic socialist Republic of Sri Lanka has been vested the powers to grant and issue according to law orders in the nature of writs of Certiorari, prohibition, procedendo, mandamus and quo warranto against the judge of any court of first instance or tribunal or other institutions of any other persons. What are the institutions and persons envisaged by this Article of the Constitution The answer is provided by the classic statement of Loard Atkin in R V Electricity Commissioners ex parte London Electricity joint Committee Company Ltd. 1924 1 KB 171 at page 205, any body persons having legal authority to determine questions affecting the rights of the subjects and having the duty to act judicially act in excess of their legal authority As succinctly pointed out by saleem Marsoof J, in Harjani and other Vs Indian Overseas Bank and Others 2014 BLR page 135. ( C.A Application No.1854/2003) Lord Diplock sought to abridge the Atkinian formula further by dropping the words having the duty to act judicially, so that the decisions and determinations of every body of persons having legal authority determine questions affecting the rights of subjects. The first question that arises here is Does this salutary extensions of the writ jurisdiction encompass non statutory bodies as well? The courts in England have assumed this question in the affirmative in very special circumstance, subject to certain conditions. Vide-R V Criminal Injuries compensation Board ex parte Lain 1967 2 all ER 770. However the question whether the writ jurisdiction could be invoked against the decision of a company, has until recently, been answered in the negative by our courts. Vide: Trade Exchange (Ceylon) Ltd. Vs Asian Hotels Corporation 1981 1 SLR page
In this case the petitioner had been running a batik shop in the premises of Hotel Lanks Oberoi.In the company that the owned the hotel Lanka Obera i a public corporation owned s majority of shares. The Hotel Lanka Oberoi decided not to extend the period of lease granted to the petitioner. Thereupon the Petition filed this application sought a writ of certiorari quash the decision taken by the Company. Sharvananda c.j refused to grant the writ sought declaring that the Resondet was a public commercial company incorporated under the companies ordinance and the fact that most of the capital was contributed by the government did not make it an agent of the Government. The incorporated company as recognized by the law is the juristic person separate and distinct from its members. It was an independent body corporate carrying on commercial activities. Its decisions made in the course of its business cannot be reviewed by a superior court by way of writ. Vide also: Mendis Vs seema Sahitha Panadura Janatha Santhaka Pravahana Sevaya and others (1995 2SLR 284) In this case the seema sahitha panadura janatha santhaka pravahana sevaya was registered as a public company in terms of section 15(1) of the Companies Act pursuant to the conversion of the panadura depot of Colombo south Regional Transport Board on a decision of the cabinet. The Petitioner was appointed at the second Annual General Meeting of the company as Managing director and the Secretary to the Treasury removed the Petitioner from the office of the Managing Director. The Petitioner sought a writ of certiorari to quash the said decision. It was contended, inter-alia that the seema sahitha Panadura Janatha santhaka Pravahana Sevaya being a company registered under the Companies Act it was not amenable to the writ jurisdiction. Though it was submitted that the Secretary to the Treasury is a public offer and holds shares on behalf of the Government and therefore his action is subject to review by way of writ of certiorari as coming within the purview of administrative Law, Sarath N Silva as he when was held that writs of certiorari and prohibition are instruments of public law to quash and restrain illegal governmental and administrative action, similarly duty by a public authority. They are instruments of judicial review of administrative action. In the said case it was further held that actions of companies and private individuals and bodies are not subject to judicial review by way of the writ of certiorari and prohibition. Office Equipment Limited Vs Urban Development Authority is another case in point (C.A. application Nos. 1062/03 and 1063/03) In this case the Petitioner was occupying a premises as a tenant and thereafter the Petitioner was allocated stores at Chalmers Granaries by the UDA and thereafter an agreement was entered into between the parties. When the respondent requests the Petitioner to vacate the
said Premises and refused to provide alternate accommodation the Petitioner filed this application. Srivavan J held that both certiorari and prohibition in their modern applications are issued for the control of administrative decisions are lie primarily only to statutory authorities. The activities of private person, whether natural or juristic are outside the bounds of administrative law. His Lordship also observed that Professor Wade in his book on Administrative Law, Eight Edition, proclaimed that certiorari and prohibition have become general remedies, which may be granted in respect of any decisive exercise of discretion by an authority having public functions whether individual or collective. He also cited De Smith s Judicial Review of Administrative Action fourth Edition. At Page 364 which states, the orders will issue against inferior courts, against administrative tribunals, against local authorities and other statutory bodies and also against individual officers discharging public functions. Thus until recently our courts were not repaired to expand the writ jurisdiction to companies which could not be described as public authorities (vide Saheer and Others Vs Board of Governors Zahra College and Others (2002 3 SLR 405) where S.N Jayasinghe J defined that that a public authority may be described as a person or administrative body entrusted with function to perform for the benefit of the public and not for private profit) PRESENT POSITION UNDER THE ENGLISH LAW However as pointed out by the court of Appeal ( Saleem Marsoof J with Sripavan J agreeing) in the case of Harjani and Others Vs Indian Overseas Bank 2004BLR page 135) the English courts have gone far beyond these limitations. In the lank mark case of R Vs Panel on Take-over and Mergers, ex-parte Datafin plc and another (Norton Opax plc and another intervening) 1987 1 All ER page 564 a writ sought against the Respondent, a company limited by guarantee was strongly resisted on the basic that it was not amendable to writ jurisdiction, the court Appeal, held that, in determining whether the decisions of a particular body were subject to indicial review, the court was not confined to considering the source of that body s powers and duties but could also look to their nature.accordingngly, if the duty imposed on a body, whether expressly or by implication, was a public duty and the body was exercising public law functions the court had jurisdiction to entertain an application for judicial review of that body s decision. Having regard to the wide ranging nature and importance of the matters covered by the City Code on Take Overs and Mergers and to the public consequences of non compliance with the code, the pane on take overs and Mergers was performing a public duty when Prescribing and administering the code
and its rules and was subject to public law remedies. Accordingly an application for judicial review of its decision would lie in an appropriate case In the case of governor and Company of the Bank of Scotland 1989 BCLC page 700it was held that the investment Management Regulatory Organization (IMRO) were subject to the supervisory jurisdiction of the Court of Appeal Session in a petition for judicial review.; em of self regulation under the Financial Services Act. It was further held that, the Respondent was performing public duties as an integral part of the system set up under the Act and what mattered was the function of the Respondent rather than its constitution or legal character THE VIEWS OF PROFESSOR DE SMITH Commenting on these cases De Smith points out that Even where the courts do employ the broad test based on the existence of public functions, it is not always clear, what criteria are relevant to that test. In the leading case of R V Panel on Takeovers and Mergers ex- p. Datafin plc, Sir Jhon Donaldson M.R. suggested that possibly, the only essential elements are what can be described as a public element, which can take many different forms, and the exclusion from jurisdiction of bodies where the sole source of power is the consensual submissions to its jurisdiction. He warned that even as the law then stood, in the law reports it was possible to find enumerations of factors giving rise to the jurisdiction, but it was a fatal error to regard the presence of all those factors as essential or as being exclusive of others factors. In the subsequent cases, the courts have gone on to elaborate a variety of overlapping criteria designed to particularize the broad-based functional approach of the Master for the Rolls in Datafin. (5 th Edition) The recent decision in Harjani and Others Vs Indian Overseas Bank It is in this context, that the judgment of the Court of Appeal (Saleem Marsoof J with Sripavan J agreeing) in Harjani and Others Vs Indian Overseas Bank 2004 BLR at page 135 stand out as an important milstone in expending the frontiers of judicial review. In this case the Indian Overseas Bank a legal entity incorporated under the Banking Companies (Acquisition and Transfer Undertaking) Act of India and engaged in the business of banking and a licensed commercial bank within the meaning of the Banking Act 30 of 1988 was cited as the Respondent in an application under and in terms of article 140 of Constitution seeking inter-alia mandates in the nature of writs of certiorari and prohibition quashing the resolution passed by the Bank to sell by auction the property of the petitioners. On behalf of the Bank an objection was raised on the basis that a writ of certiorari would not be made against a private bank which is not amenable to writ jurisdiction the Court of Appeal. The contention on behalf of the Bank was summarized by the court in the following words:
It has been submitted by Learned President s Counsel for the 1 st Respondent that it is trite law that the prerogative writs of certiorari and prohibition will lie only against statutory authorities exercising administrative functions. Learned Counsel relies on what he describes as a classic exposition of the law by Prof. Wade wherein it is proclaimed that, certiorari and prohibition have become general remedies which may be granted in respect of any decisive exercise of discretion by an authority having public functions, whether individual or collective He also relies heavily on the ecision ofnteh Queens Bench Division in the case of Regina Vs National Joint Council for the Craft of Dental Technicians. 1953 2 WLR 342 holding that the prerogative writs are only issued to inferior courts, bodies set up by statute which have been entrusted by parliament with duties of an administrative and judicial nature and whose jurisdiction might affect the rights of subjects, and to statutory arbitrators to whom by statute the parties must resort. The court also distinguished another decision relied on behalf of the Bank and observed that Learned President s Counsel for the Respondent has also invited attention to the decision of this court in Saheer and Others Vs Board of Governors Zahira College and Others Vs Board of Governors Zahira College and Others (2002 3 SLR 405) In this case on or about 21.08.1961 the school was vested in the Government and the vesting was challenged by the board of trustees of the Maradana mosque and the Privy Council reverted the ownership of the school to the Board of Trustees of the Maradana Mosque and the school was administered by the Bard of Trustees of Maradana MOsque untill the enacment of Zahira College Board of Governors (Incorporation)Act No. 18 of 1982 and continued to adminster by the Board of Govenors. In this case the Petitioner sought a writ of certiorari against the decision taken by the Board of Governors to run an international school in premises of Zahira college. the Respondents resisted the application on the basis that the petitioners had contractual relationship with the scholl for the enforcement of which certiorari and other prerogative writs would not lie. The issue before the court was whether the writs of certiorari and prohibition lie against against Board of governors Zahira College. The Court held that, despite the private ownership and contractual nexus that the petitioners had with the school, the court extended the reach of judicial review on the basis that the Board of Governors of Zahira College was exercising public functions. It was further held that within the scheme of national education, the Board of governors is a statutory public authority receving and spending state funds. Being subject to Government regulations in the admissions of students, employment of teachers ect. As wade says certiorari and prohibition are designed to prevent excess or abuse of powers. It was held that an application for the prerogative remedy of writ of certiorari is a proceeding calling some public authority to show legal justification for its action and to account for exceeding and abusing its powers.it was further held that a public authority may be described
as a person or administrative body entrusted with function to perform for the benefit of the public and not for private profit. Similary the court also distinguished the trade Exchanging case and Mendis s case in the light of important development that have taken place in England in the field of Administrative Law. His Lordship Justice Saleem Marsoof in an erudite judgment (with His Lordship Justice Sripavan agreeing) after an exhaustive analysis of the relevant case law inter-alia held, In the light of the decisions it is necessary to consider whether the writ of certiorari is available against a private banking company such as the 1st Respondent (Indian Bank). The gist of the 1st Respondent s submission is that writ would not lie against a company which is not a statutory body. The said Respondent sought to take advantage of the provisions of the Recovery of Loans (Special Provisions)Act, relating to parate execution. In fact in terms of the said Act the 1st Respondent had the option of wither adopting a resolution under section 4 to sell by public auction the property mortgaged to it or authorized a person by resolution in terms of section 5 of the Act to take over possession to manage the said property and utilize its produce or prrofits for the settlement of the loan. These powers have been conferred by the statute on any bank as defined in section 22 of the Act. the Act lays down special procedures for the exercise of the powers conferred on such bank and I am of the opinion that this court is bound to exercise supervisory jurisdiction over the exercise of such powers despite the fact that some at least of these banks are Logan or foreign banking companies. From the above it could be observed that our courts have showed their willingness to break away from the self in forced shackles which hitherto inhibited in certain respects the expansion of the writ jurisdiction. The functional approach ( vide Lord Cullen- Governor and Company of the Bank of Scotland 1989 BCLC page 700at page 706) has brought about sweeping changes in the enforcement of the rights of the citizens.in this context the judgement of our Court of Appeal in Harjani s case constitutes a high watermark in the field of Administrative Law asit has been correctly recognized perhaps for the first time that even where the body concerned cannot be said to be performing public functions in the strict sense of the words, the exercise of wide ranging statutory powers by such body though private in nature and not performing public functions would still render it amenable to the writ jurisdiction. It is submitted that these great stride taken in the field of adminstrative law by the addition of the new dimension of wide statutory powers approach will augur well for the protection of citizens from exercise of draconian statutory powers.