CB bond scam and scams of another kind
Posted on January 8th, 2018

By Neville Ladduwahetty

President Maithripala Sirisena, while outlining the highpoints in the final report of the Presidential Commission of Inquiry (PCoI) into to the issue of Treasury Bonds of the Central Bank of Sri Lanka, also referred to the final report of the Presidential Commission of Inquiry to investigate and inquire into serious acts of Fraud, Corruption and Abuse of Power, State Resources and Privileges (PRECIFAC). Both reports have been handed over to the Attorney General for necessary action.

Judging from the history of previous Commission reports, getting to this point is indeed historic and the President has to be commended for the actions taken by him and all those associated with this unique achievement. However, it has to be acknowledged that Sri Lanka was able to get to this point because it was possible for the President as the Head of the Executive under provisions of separation of powers, permitted to act independent of the government despite the curtailment of executive powers under the 19th Amendment. On the other hand, if it was a Parliamentary system with a Prime Minister who nominates a person of his choice to be the Governor of the Central Bank, the whole issue would have died on the vine.

The curtailment of executive powers under the 19th Amendment was possible because of the belief that Article 4 of the Constitution is not an entrenched article as reflected in the judgment that stated: “It has to be borne in mind that the Sovereign people have chosen not to entrench Article 4. Therefore, it is clear that not all violations of Article 4 will necessarily result in a violation of Article 3”. This is a serious misreading of facts. According to the Hansard (p. 1958) the 3rd Reading of the Bill on the “Constitution of the Democratic Socialist Republic of Sri Lanka” commenced on August 16, 1978. At its conclusion, Mr. R. Premadasa responded in Sinhala and stated: (translated version) “pages 52, line 21, Articles 1,2,3,4 9, 10,11 numbers and words to leave out and instead Articles 1,2,3,4,6,7,8, 9,10,11 numbers should be included (in Sinhala “athul viya yuthui”)”.

Although the Court to its credit declared that Article 4 should be read with Article 3, had the Court been aware that during the 3rd Reading, Parliament had determined that Article 4 should be included in the list of entrenched Articles, it would not have been possible to curtail the powers of the President and the Presidency without a referendum. Had this been the case it is highly unlikely that the Prime Minister’s nominee would have been the Governor of the Central Bank.

SCAM OF ANOTHER KIND

Although the President is free of any involvement with Treasury Bond issues, he is not free of the formation of the National Government since he is a vital component of it, and it is under the watch of this National Government that the Bond Scams occurred. Furthermore, it is under the guise of a self proclaimed “National Government” that this government increased the Executive Branch from the constitutional limit of 70 to 93 through the means of a Parliamentary Resolution.

The resolution that enabled this government to increase the Executive Branch to 93 was tabled in Parliament by the Prime Minister on 3rd September 2015. This resolution states:

“Whereas the United National Party which obtained the highest number of seats in Parliament has formed a National Government, Parliament determines in terms of Article 46 (4) of the Constitution of the Democratic Socialist Republic of Sri Lanka the number of Ministers in the Cabinet of Ministers shall not exceed 48 and the number of Ministers who are not Cabinet Ministers and the number of Deputy Ministers shall not exceed 45” (Hansard p. 98).

Article 46(4) referred to above reads as follows:

“Notwithstanding anything contained in paragraph (1) of this Article, where the recognized political party or independent group which obtains the highest number of seats in Parliament forms a National Government, the number of Ministers in the Cabinet of Ministers, the number of Ministers who are not Cabinet of Ministers and the number of Deputy Ministers shall be determined by Parliament”.

While the above Article gives Parliament the authority to determine the size of the Executive Branch upon the formation of a National Government it is incumbent on the Parliament to meet the criteria of a National Government as stated in Article 46 (5) of the Constitution given below.

Article 46(5) states: “For the purpose of paragraph (4), National Government means, a Government formed by the recognized political party or the independent group which obtains the highest number of seats in Parliament together with the other recognized political parties or the independent groups”.

The issue to be resolved is whether the formation of the present government meets the criterion of a National Government stated above.

FORMATION of the PRESENT GOVERNMENT

According to the Gazette Extraordinary of August 19, 2015 there were a total of six (6) recognized political parties elected to Parliament at the election of August 15, 2015. Of these six political parties the United National Party (UNP) with 106 seats received the highest number of seats in Parliament. The second highest was the United People’s Freedom Alliance (UPFA) with 95 seats. Since no political party received a majority to form a government the formation of a coalition or an understanding between political parties was inevitable for the formation of a government.

However, for such a coalition or understanding between recognized political parties to be legitimate, it is absolutely vital that the formation is between recognized political parties that contested the August 2015 election and not between constituents of the UNP or the UPFA, if the franchise of the people is not to be violated. Furthermore, since franchise is part of the sovereignty of the people under Article 3, a coalition or an understanding between constituent parties of the UNP or the UPFA is a violation of the sovereignty of the people as well. Article 46(5): For the purpose of paragraph (4), National Government means, a Government formed by the recognized political party or the independent group which obtains the highest number of seats in Parliament together with the other recognized political PARTIES or the independent GROUPS” (emphasis added).

What is reported is that there was a Memorandum of Understanding between the UNP and the SLFP, signed by the respective secretaries of the SLFP and the UNP on August 21 2015 for a period of two years which is supposed to have been extended up to December 31, 2017. This means that at this point in time there is no understanding whatsoever between the UNP and the SLFP other than a media report to the effect that any future understandings would be after the Local Government elections. Since the SLFP is only a constituent political party of the UPFA, this understanding should be not be treated as a coalition but only as a temporary pact for the SLFP to support the UNP in the formation of a working government without any constitutionally recognized status.

Under the circumstances cited above, what was the basis for the Parliamentary resolution of September 3, 2015 to state “the United National Party which obtained the highest number of seats in Parliament has formed a National Government …”? The obvious question that arises is, with which recognized political party or parties did the UNP form the National Government, which it claims as justification to increase the Executive Branch to 93? Furthermore, since the entirety of neither the SLFP nor the UPFA is with the Government, it cannot be claimed that the current formation is even a “coalition” government, leave alone a National Government. Therefore, the current formation of the government is in violation of the Constitution, the Franchise of the people, the people’s Fundamental Rights and consequently the Sovereignty of the People.

CHALLENGING the CURRENT FORMATION

A Fundamental Rights Petition was filed in the Supreme Court (SC. FR. No. 116/2016 challenging the legitimacy of the claim that the current formation of the government is that of a National Government as defined in Article 46 (5) of the Constitution. The determination of the Supreme Court on October 3, 2016 was:

“Having heard the submissions of all Counsel, we find that the matters referred to in the amended petition dated 11th May 2016 have been taken up before the Parliament on 3rd September 2015”.

“The Court further observes that the said matters have been debated in Parliament as evidenced by the Parliamentary Hansard dated 03rd September 2015 marked R1. In terms of Article 67 of the Constitution read with Section 03 of the Parliament (Powers and Privileges) Act No 21 of 1953as amended, the speech, debate and proceedings in the House shall not be liable to be impeached or questioned in any Court or place out of the House””.

Based on this determination the Petitioner’s right to proceed was denied despite the existence of an earlier case, Fernandopulle v. Premachandra de Silva [1996] 1 Sri L.R., wherein a panel of five judges of the Supreme Court headed by the Chief Justice upheld the decision of an earlier Court of three judges that using extracts from the Hansard was acceptable when it comes to issues of general and public importance. Furthermore, the House of Lords, UK, had unanimously determined in Pepper v. Hart 1993 that “One of the uses the courts now make of parliamentary proceedings is as an aid when interpreting Acts of Parliament”.

Thus it is crystal clear that the determination of the Supreme Court needs to be revisited since the judgment was given per incuriam. Furthermore, had the Court used the debates in Parliament as guide, it would have been apparent to the Court from the variety of interpretations given by Members of Parliament during the September 2015 debate, of the need for the Court to interpret the meaning of a “National Government”.

CONCLUSION

From the material presented above it should be clear that the current formation of the Government cannot by any stretch of imagination be claimed as a National Government. Therefore, expanding the Executive Branch beyond the 70 called for by Article 46 (1) of the Constitution is a violation. Interpreting what a National Government is, should NOT be left to Parliament. Instead it is the “sole and exclusive” responsibility of the Supreme Court as per Article 125 of the Constitution.

There are two approaches to get to this point. One approach is for the President to seek an opinion from the Supreme Court as to whether the current formation of the government is that of a National Government as per Article 129 of the Constitution. The other approach is to petition the Supreme Court for the violation of the Constitution, Fundamental Rights, Franchise and the Sovereignty of the people, thus giving the Court an opportunity to revisit its earlier judgments made per incuriam and fulfill its responsibilities as the sole and exclusive authority to interpret the Constitution in respect of the claim stated in Resolution of September 3, 2015 that the UNP has formed a National Government.

If neither takes place, expanding the Executive Branch to 93 on the basis that the formation of the government is that of a National Government would remain a scam of another kind.

One Response to “CB bond scam and scams of another kind”

  1. Fran Diaz Says:

    Our thanks to Mr Ladduwahetty for pointing out the further breaking of the Law of Land.

    ————-

    Questions to ask :

    When will this parody of fake governance by Yahap end ?

    Is Lanka a Sovereign Democracy or a neo-Colonised country ?

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