SC allows Perpetual Treasuries FR petition

Wednesday, 21 June 2017 00:05 -     - {{hitsCtrl.values.hits}}


  • Matter fixed for 26 July for granting of leave to proceed 


By S.S. Selvanayagam

The Supreme Court yesterday accepted the fundamental rights petition filed by the Perpetual Treasuries Group of Companies against the Central Bank.

A bench comprising Chief Justice Priyasath Dep and Justice Priyantha Jayawardane fixed the matter for 26 July for granting of leave to proceed and permitted the respondents to raise preliminary objections at the time of supporting the petition for leave.

When the application was taken up, Deputy Solicitor General Milinda Gunatilake, appearing for the Central Bank, raised a preliminary objection on the maintainability of the application on the basis that the original directive was issued against the petitioning company through a letter dated 7 November 2016 operative till 31 March 2017.

He stated the fundamental rights application was filed on 28 April 2017 and therefore was not within the 30-day time bar. He pleaded that the application should be dismissed in limine.

Counsel S.A. Parathalingam PC, appearing for Perpetual Treasuries Ltd., informed the Court that the document marked P/6 dated 7 November 2016 stated the directives shall remain in force until 31 March 2017 until and unless a directive is issued to the contrary.

He also told court that the extension directives were issued through a letter dated 30 March 2017 marked P/19.

He contended that the document issued was a gross violation of the petitioner’s fundamental rights.

Counsel Nihal Fernando PC, appearing for the other petitioners, said the letter marked P/19 was issued arbitrarily.

He added that the Perpetual company was unable to declare its dividends as a result of the arbitrary act of the Central Bank officers.

Perpetual Treasuries Ltd, Perpetual Asset Management Ltd, Perpetual Capital Holdings Ltd, Perpetual Capital Ltd, Geoffrey Joseph Aloysius and Arjun Joseph Aloysius filed the petition.

They cited Central Bank Governor Dr. Indrajit Coomaraswamy, members of the Monetary Board, Deputy Governors of the Central Bank, Director of the Department of Supervision of Non-Bank Financial Institutions Udeni Prasanga Alawattage, Examiner in Charge of the Public Debt Department W.N.S. Fernando and the Attorney General as respondents.

Instructed by G.G. Arulpragasam, Counsel S. A. Parathalingam PC with Nishkan Parathalingam and Niranjan Arulpragasam appeared for the first petitioner and Counsel Nihal Fernando appeared for the other petitioners.

Deputy Solicitor General Milinda Gunatilake with Senior State Counsel Shahida Barrie appeared for the Monetary Board, Central Bank Governor, members of the Monetary Board and the Attorney General. Faisz Musthapha PC, with Faiza Markar instructed by Gowry Shangary Thavarasha, appeared for the Director of the Department of Supervision of Non-Bank Financial Institutions.

The petitioners challenge the extension of the purported directions dated 7 November 2016 which were subsequently amended on 3 February 2017.

They lament it is done in the guise of a further amendment dated 30 March 2017 which they allege amounts to a continuous and recurring infringement of their fundamental rights.

They state the Director of the Department of Supervision of Non-Bank Financial Institutions forwarded a letter dated 7 November 2016 with various directions issued by the Monetary Board which the first petitioner was required to comply with.

They state that on 19 January 2017, the Governor of the Central Bank Dr. Indrajit Coomaraswamy took part in a discussion with JVP politician Wasantha Samarasinghe on the premises of the Central Bank and that during the discussion the Governor had said to wait and see whether Perpetual would profit in the future.

They claim this demonstrates the motives and true intent of the Central Bank. Furthermore, the petitioners say the directions amount to unprecedented regulatory control over a Primary Dealer and are wholly disproportionate to the alleged violations and regulatory concerns.

They are seeking a declaration from Court that the extension of the operation of the directions through the purported amendment is null and void.

They are also seeking the Court to direct the first to 11th respondents to pay compensation of Rs. 5 million.