IN THE SUPREME COURT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA

In the matter of an application in terms of Article 121 read with Article 120 of the Constitution to determine whether the Bill titled Appropriation or any part thereof is inconsistent with the Constitution.

1. Centre for Policy Alternatives (Guarantee) Limited, No.24/2 28th Lane, Off Flower Road, Colombo 7 2. Dr. Paikiasothy Saravanamuttu No. 03, Ascot Avenue, Colombo 5 Petitioners S.C. (S.D.) No: - VS The Attorney General, Attorney Generals Department, Colombo 12 Respondent On this 25th day of October 2013

TO:

THE CHIEF JUSTICE AND THEIR LORDSHIPS THE OTHER HONOURABLE JUDGES OF THE SUPREME COURT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA

The Petition of the Petitioners above named appearing by Ms. Lilanthi de Silva their Registered Attorney-at-Law states as follows:

1.

The 1st Petitioner is a body incorporated under the laws of Sri Lanka (and duly re-registered in terms of the Companies Act No.7 of 2007) and is made up of members, more than three-fourths of whom are citizens of Sri Lanka and is entitled to make this application in terms of Article 121(1) of the Constitution.
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2.

The primary objects of the 1st Petitioner are inter alia to make inputs into public policy-making and implementation process in constitutional, legislative and administrative spheres to ensure responsible and good governance, and to propose to the government and parliament and all other policy-making bodies and institutions, constructive policy alternatives aimed at strengthening and safeguarding democracy, pluralism, the rule of law, human rights and social justice. True copies of the Certificate of Incorporation and Memorandum and Articles of Association of the 1stPetitioner are annexed hereto marked P1 and P2 respectively and pleaded as part and parcel hereof.

3.

The 2nd Petitioner is a citizen of Sri Lanka and the Executive-Director of the 1st Petitioner above-named.

4.

The Attorney General is made a Respondent under and in terms of the requirements of Article 134(1) of the Constitution.

5.

The Bill titled Appropriation (hereinafter referred to as the Bill) was published in the Gazette of the Democratic Socialist Republic of Sri Lanka Part II of October 04, 2013 issued on 07.10.2013 on the order of the Minister of Finance and Planning and placed on the Order Paper of Parliament on 22nd October 2013. True copies of the said Bill (in Sinhala, Tamil and English) are annexed hereto marked P3a, P3b, P3c and pleaded as part and parcel hereof.

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6. The long title of the said Bill describes it as a Bill to provide for the service of the financial year 2014; to authorize the raising of loans in or outside Sri Lanka, for the purpose of such service ; to make financial provision in respect of certain activities of the Government during that financial year ; to enable the payment by way of advances out of the Consolidated Fund or any other fund or moneys, of or at the disposal of the Government, of moneys required during that financial year for expenditure on such activities ; to provide for the refund of such moneys to the Consolidated Fund and to make provision for matters connected therewith or incidental thereto.

CLAUSES 5 & 6 OF THE BILL 7. The Petitioners respectfully draw Your Lordships attention to the provisions of Clauses 5 and 6 of the aforesaid Bill :

5. (1) Any moneys which by virtue of the provisions of the First Schedule to this Act, have been allocated to Recurrent Expenditure under any Programme appearing under any Head specified in that Schedule, but have not been expended or are not likely to be expended, may be transferred to the allocation of Capital Expenditure within that Programme or to the allocation of Recurrent Expenditure or Capital Expenditure under any other Programme within that Head, by Order of the Secretary to the Treasury or by Order either of a Deputy Secretary to the Treasury or the Director General of the National Budget Department, who may be authorized in that behalf by the Secretary to the Treasury. (emphasis added)

(2)

No moneys allocated to Capital Expenditure under any Programme appearing under any Head specified under the First Schedule to this Act, shall be transferred out of that Programme or to any allocation of Recurrent Expenditure of that Programme.

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6. (1) Any money allocated to Recurrent Expenditure or Capital Expenditure under the Development Activities Programme appearing under the Head Department of National Budget specified in the First Schedule, may be transferred subject to guidelines stipulated in printed Budget Estimates approved by Parliament for the relevant year, to any other Programme under any other Head in that Schedule, by Order of the Secretary to the Treasury or by Order either of a Deputy Secretary to the Treasury or the Director General of the National Budget Department, who may be authorized in that behalf by the Secretary to the Treasury. The money so transferred shall be deemed to be a supplementary allocation made to the particular Ministry, and a report containing the amount of money so transferred and the reasons for the transfer, shall be submitted to Parliament within two months of the date of the said transfer. (emphasis added)

(2) Details of all transfers made under subsection (1), including the reasons for such transfers, shall be incorporated in the reports relating to the Governments fiscal performance, which are required to be tabled in Parliament under the Fiscal Management (Responsibility) Act No. 3 of 2003.

8.

The Petitioners respectfully state that the aforesaid Clauses 5 and 6 of the said Bill if enacted, would permit the reallocation of moneys by Order of the Secretary to the Treasury or by Order either of a Deputy Secretary to the Treasury or the Director General of the National Budget Department, who may be authorized in that behalf by the Secretary to the Treasury and would thereby remove such moneys from the effective control of Parliament.

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9.

Thus Clauses 5 and 6 of the Bill amounts to a clear violation and / or circumvention of Article 148 of the Constitution which mandates that Parliament shall have full control over Public Finance.

10.

Article 148 contained in Chapter XVII of the Constitution titled Finance which is relevant in this respect states: 148. Parliament shall have full control over public finance. No tax, rate or any other levy shall be imposed by any local authority or any other public authority, except by or under the authority of a law passed by Parliament or of any existing law.

11.

Clauses 5 and 6 of the said Bill if enacted, would permit reallocation and/or transfer of funds by Order of the Secretary to the Treasury or by Order either of a Deputy Secretary to the Treasury or the Director General of the National Budget Department, who may be authorized in that behalf by the Secretary to the Treasury in respect of the following: (a) Approval for the reallocation of unexpended Recurrent Expenditure to Capital Expenditure within the Programme; (b) Approval for the reallocation of unexpended Recurrent Expenditure to Recurrent Expenditure or Capital Expenditure to any other Programme within that Head; (c) Transfer of Recurrent Expenditure or Capital Expenditure under the Development Activities Programme to any other Programme under any other Head in that schedule.

12.

Further, Clause 6 of the said Bill provides that the money so transferred shall be deemed to be a supplementary allocation to the relevant Ministry.

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13.

In terms of Article 150 (1) and (2) of the Constitution, all withdrawals from the said Consolidated Fund must only be by the Minister of Finance after approval has been duly obtained from Parliament.

14.

The said Clauses 5 and 6 of the Bill therefore permit and / or facilitate the circumvention of these constitutional safeguards and / or the violation of Article 150 of the Constitution.

15.

The provisions of Article 150(1) and (2) of the Constitution are as follows:

150.

(1) Save as otherwise expressly provided in paragraphs (3) and (4) of this Article, no sum shall be withdrawn from the Consolidated Fund except under the authority of a warrant under the hand of the Minister in charge of the subject of Finance.

(2) No such warrant shall be issued unless the sum has by resolution of Parliament or by any law been granted for specified public services for the financial year during which the withdrawal is to take place or is otherwise lawfully, charged on the Consolidated Fund.

16.

The said Clauses 5 and 6 of the Bill would also result in the abdication and / or alienation of the specific powers vested in Parliament in terms of Articles 148, 150(1) and 150(2) of the Constitution.

17.

Clauses 5 and 6 of the Bill expressly violate the provisions contained in Article 3 read with Articles 4(a) of the Constitution, since the said Clauses involve abdication and/or alienation of the powers of Parliament.

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18.

Clause 6 of the Bill also seeks to establish a Contingencies Fund within the Budget and is thus contrary to and violates Article 151 of the Constitution.

19.

Clause 5 and 6 of the Bill are also contrary to and violate Article 152 of the Constitution inasmuch as Public officers are effectively granted power to amend the law (i.e. Appropriation Act) when only a Minister is constitutionally empowered to table a bill effecting Public Finance.

20.

Article 3 declares that sovereignty, which includes the powers of government, fundamental rights and the franchise, is in the People and is inalienable. The removal of specific public funds from within the legislative control of Parliament and the executive control of the Cabinet is directly inconsistent with the provisions of Article 3 (read with Article 4) of the Constitution and amounts to a grave violation of the inalienable sovereignty and constitutional rights of the People.

21.

The Sovereignty of the People, must be exercised in the manner described in Article 4(a) to (e) of the Constitution. Any diminution of the right to exercise and / or enjoy the sovereignty as provided for by Article 4 of the Constitution and / or the attempt to circumvent the provisions thereof is also directly inconsistent with the provisions of Article 3 of the Constitution.

22.

Articles 3 and 4 of the Constitution are as follows:

3.

In the Republic of Sri Lanka sovereignty is in the people and is inalienable. Sovereignty includes the powers of government,

fundamental rights and the franchise.

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4.

The Sovereignty of the People shall be exercised and enjoyed in the following manner:(a) The legislative power of the People shall be exercised by Parliament, consisting of elected representatives of the People and by the People at a Referendum;

(b) The executive power of the People including the defence of Sri Lanka, shall be exercised by the President of the Republic elected by the People;

(c) The judicial power of the People shall be exercised by Parliament through courts, tribunals and institutions created and established, or recognized, by the Constitution, or created and established by law, except in regard to matters relating to the privileges, immunities and powers of Parliament and of its Members, wherein the judicial power of the People may be exercised directly by Parliament according to law;

(d) The fundamental rights which are by the Constitution declared and recognized shall be respected, secured and advanced by all the organs of government, and shall not be abridged, restricted or denied, save in the manner and to the extent hereinafter provided; and

(e) The franchise shall be exercisable at the election of the President of the Republic and of the Members of Parliament, and at every Referendum by every citizen who has attained the age of eighteen years, and who being qualified to be an elector as hereinafter provided, has his name entered in the register of electors.

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23.

The Petitioners state that thus and otherwise the provisions of Clauses 5 and 6 of the said Bill are inconsistent with the provisions of Articles 3, 4, 148, 150, 151 and 152 of the Constitution and hence cannot be enacted into law except if approved by the People at a Referendum in addition to a two-thirds vote of the whole number of the members of Parliament in favour as required by Article 83(a) of the Constitution.

CLAUSE 7 OF THE BILL 24. Clause 7 of the Bill provides that: Where the Minister is satisfied (a) that receipts from taxes and other source will be less than the amounts anticipated to finance authorized expenditure; or (b) that amounts originally appropriated for a particular purpose or purposes are no longer required, he may with the approval of the Government, withdraw in whole or in part any amounts previously released for expenditure under the authority of a warrant issued by him, from the Consolidated Fund or from any other fund or moneys of or at the disposal of the Government, to meet any authorized expenditure and the details of all such withdrawals shall be incorporated in the Final Budget Position Report which is required to be tabled in Parliament under section 13 of the Fiscal Management (Responsibility) Act, No. 3 of 2003 .

25.

Clause 7 of the Bill is thus inconsistent with and / or in contravention of Article 148 of the Constitution, inasmuch as the said Clause seeks to vest in the Minister, acting in his discretion, with the approval of the Government the power to withdraw funds released in terms of the First Schedule to the Bill.

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26.

The said Clause 7 of the Bill would also result in the abdication and / or alienation of the specific powers vested in Parliament in terms of Article 148 of the Constitution.

27.

The Petitioners state further that the said Clauses 7 of the Bill expressly violate the provisions contained in Article 3 read with Articles 4(a) of the Constitution, since the said Clauses involve abdication and / or alienation of the powers of Parliament.

28.

The Petitioners states that thus and otherwise the provisions of Clause 7 of the said Bill are inconsistent with the provisions of Articles 3, 4 and 148 of the Constitution and hence cannot be enacted into law except if approved by the People at a Referendum in addition to a two-thirds vote of the whole number of the members of Parliament in favour as required by Article 83(a) of the Constitution.

CLAUSE 2 OF THE BILL 29. The Petitioners respectfully draw the attention of Your Lordships Court to Clause 2(1)(b) of the Bill which is as follows: (1) Without prejudice to any other law authorizing any expenditure, and subject to the provisions of subsection (4) of this section, the expenditure of the Government which it is estimated will be rupees one thousand five hundred and forty two billion two hundred and fifty two million five hundred and eighteen thousand for the service of the period beginning on January 1, 2014 and ending on December 31, 2014 (in this Act referred to as the financial year 2014), shall be met (b) from the proceeds of loans which are hereby authorized in terms of relevant laws to be raised, whether in or outside Sri Lanka, for and on behalf of the Government, so however that the aggregate of such proceeds does not exceed rupees one thousand one hundred billion
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30.

Clause 2(1)(b) of the Bill, if enacted, will result in the authorising and / or permitting of the raising of loans, including foreign loans, subject to a maximum limit of rupees one thousand one hundred billion.

31.

The vague provisions of Clause 2(1)(b) do not impose a specific requirement of Parliamentary approval for the raising of the loans envisaged, and also do no not impose a requirement for Parliament to scrutinize and approve the terms related to the raising of each of such loans.

32.

Thus Clause 2(1)(b) of the Bill, especially given the vague and imprecise nature of the wording contained therein, permits and / or facilitates the circumvention and / or violation of Article 148 of the Constitution which inter alia requires that Parliament shall have full control over Public Finance.

33.

The said provisions of Clause 2 of the Bill would also result in the abdication and / or alienation of the specific powers vested in Parliament in terms of Article 148 of the Constitution.

34.

The Petitioners thus state that the provisions of Clause 2(1)(b) of the Bill are inconsistent with and / or amount to a clear violation / contravention of Article 148 of the Constitution.

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35.

The provisions of Clause 2(1)(b) of the said Bill also amount to an abdication and / or alienation of Parliamentary control over Public Finance and are thus also inconsistent with and in contravention of the provisions of Article 4 (which provides for the manner in which the Sovereignty of the People is to be exercised), and consequently Article 3 of the Constitution and hence cannot be enacted into law except if approved by the People at a Referendum in addition to a two-thirds vote of the whole number of the members of Parliament in favour as required by Article 83(a) of the Constitution.

36.

The Petitioners respectfully urge that Your Lordships be pleased to consider the need to address and redress the matters and concerns urged through this application, given the reality that the Sovereignty of the People, the Rule of Law and the Supremacy of the Constitution would be imperiled through the provisions of the said Bill that are inconsistent with and / or in contravention of the provisions of the Constitution, and thus ought not be permitted to pass validly into law through a simple majority in Parliament alone.

37.

The Petitioners have not previously invoked the jurisdiction of Your Lordships Court in respect of this matter.

38.

The Petitioners respectfully reserve the right to furnish such further facts and documents in support of the matters set out herein at the Hearing should the Petitioners become possessed of any such material.

39.

An affidavit of the 2nd Petitioner, Dr. Paikiasothy Saravanamuttu, Executive Director of the 1st Petitioner is appended hereto in support of the averments contained herein.

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WHEREFORE the Petitioners Pray that Your Lordships Court be pleased to:

(a) Determine that the provisions of Clauses 5 and 6 of the said Bill are inconsistent with and / or in contravention of the provisions of Articles 3, 4, 148, 150, 151 and 152 of the Constitution and cannot be enacted into law except if approved by the People at a Referendum in addition to a two-thirds vote of the whole number of the members of Parliament in favour as required by Article 83(a) of the Constitution;

(b) Determine that the provisions of Clause 7 of the said Bill are inconsistent with and / or in contravention of the provisions of Articles 3, 4 and 148 of the Constitution and cannot be enacted into law except if approved by the People at a Referendum in addition to a two-thirds vote of the whole number of the members of Parliament in favour as required by Article 83(a) of the Constitution;

(c) Determine that the provisions of Clause 2(1)(b) of the said Bill are inconsistent with and / or in contravention of the provisions of Articles 3, 4 and 148 of the Constitution and cannot be enacted into law except if approved by the People at a Referendum in addition to a two-thirds vote of the whole number of the members of Parliament in favour as required by Article 83(a) of the Constitution;

(d) Grant such further and other reliefs as to Your Lordships Court shall seem meet.

Registered Attorney-at-Law for the Petitioners

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