The Supreme Court, last week, concluded hearings into the petitions filed challenging the constitutionality of the Divineguma Bill. The Bench comprising Chief Justice Dr. Shirani Bandaranayake and Justice Nimal Gamini Amaratunga and Justice K. Sripavan said the court determination would be sent to the President and the Speaker. Counsel for several intervenient petitioners, both supporting and [...]


Divineguma Bill: Counsel stress supremacy of parliament; petitioners query clarity


The Supreme Court, last week, concluded hearings into the petitions filed challenging the constitutionality of the Divineguma Bill. The Bench comprising Chief Justice Dr. Shirani Bandaranayake and Justice Nimal Gamini Amaratunga and Justice K. Sripavan said the court determination would be sent to the President and the Speaker.

Counsel for several intervenient petitioners, both supporting and opposing the Bill, made representations before Court. Faisz Musthapha PC., counsel for the intervenient petitioners in support of the Bill argued that the Divineguma Department could administer its own fund just as much as the Rubber Control Department and Customs Department Departments have their funds.

Senior Counsel S.L. Gunasekera too took the line that the court has no power to look into whether due compliance was observed when placing the Bill in the Order Paper of Parliament. The Supreme Court has no jurisdiction to look into it.

He contended no provision of the Bill was inconsistent with the Constitution. There may be shortcomings in the Bill as some petitioners argued. But these shortcomings are matters for Parliament to consider.

President’s Counsel Romesh de Silva who also appeared for an intervenient petitioner supporting the Bill said Parliament was supreme and supremacy emanated from the sovereignty of the people. Therefore it could pass any Bill into law with a two-thirds majority and the approval of the people at a referendum, he contended.

The banking societies that are to be set up do not come within the definition of a bank. Therefore, the Banking Act would not apply to the Divineguma Banks, he contended.

President’s Counsel Manohara de Silva appearing for the JHU Leader Ven. Omalpe Sobitha Thera and Economic Development Minister Basil Rajapaksa, the second respondent in two petitions, took up the position that the legislative procedure followed in presenting the Bill to Parliament could not be questioned by Court.

Divineguma Banks and Divineguma Community based Banks are not commercial banks but these banks have limited access only to those who are qualified as beneficiaries. Still, nothing in the Bill will take away the powers of the Banking Act and the Financial Business Act, he said, arguing that if there was an internal arrangement in the Bill for the supervision of these banks that did not mean the Monetary Law would not apply. “This is a better arrangement because there is a double safeguard,” he said.

He said there was no bar for the supervision by the Central Bank. If the Monetary Board (MB) of the Central Bank (CB) gives a direction these banks could be supervised. A representative of the CB is on the Board, therefore, if there was any irregularity the CB could intervene, he argued.

The monies of the Department could not be used for purposes outside the Act, and if that occurred it could be ultra vires, he added. He pointed out that the Customs Department did not transfer revenue into the Consolidated Fund but 40% of its revenue is remitted to its own fund to be disbursed among Customs officers.

“This is not unusual. The allegation that departments cannot have their own funds is baseless,” he said. The petitioners pointed out no government department could have its own fund.

“Nothing in this country is secret. That is even true for the Cabinet,” he remarked. The intention of the secrecy clause in respect all matters in the Bill was to protect the information regarding the beneficiaries, the poor people. If there is any concern, the jurisdiction of the court could be extended to make suggestions.

“There is room for those kinds of adjustments,” he said. The secrecy clause does not prevent Divineguma officials from filing affidavits in courts if they are made respondents in courts.
He suggested that clause 39, which empowers department officers to elicit information from any person, could be restricted to the beneficiaries.

Counsel J.C. Weliamuna, appearing for a petitioner challenging the Bill, told court according to Articles 79 and 80 of the Constitution, the court should strictly follow the Constitution when passing a Bill.

The jurisdiction of the Supreme Court in respect of Constitutional matters is not restricted. In the lower courts, their jurisdictions are explicitly stated whereas the jurisdiction of the Supreme Court is preserved unless specifically excluded. The Constitution never wanted to take away the jurisdiction of the Supreme Court, he argued.

The Court could make a ruling on Article 154 (g) (3) of the Constitution. This constitutional provision needed certain procedures to be followed and the SC could make note of that, he said. There was no clarity in the Bill. This fact was well demonstrated by counsel speaking in support of the Bill, Counsel M.A. Sumanthiran said appearing for a petitioner challenging the Bill.

Some Counsel argued that Divineguma Banks and Banking Societies would come under the Banking Act and others argued they are not but the Monetary Law does. The kind of confusion among the counsel themselves shows the Bill lacks clarity which is important. For that very reason the court could determine that the Bill could not become law, Mr. Sumanthiran argued.

He also pointed that the Constitution has provided for remedies in terms of Articles 154 (k) and (l) when there is a breakdown in the provincial councils. “The North Province Governor should have acted on these provisions,” without saying that the NPC approved the Bill, he contended.

Counsel Viran Corea appearing for a petitioner challenging the Bill, said the Governor of a Province appointed by the President cannot express views on behalf of the Provincial Council, which requires to be elected by the people of such a province in terms of the 13th Amendment to the Constitution.

Counsel Senani Dayaratne appearing for P. B. D. J. W. Nanayakkara said there are not enough safeguards and there is no clarity as to who runs the bank. He told court that a department could not run a bank,

“They can’t have phantoms running the banks,” he said. He argued that the regulatory and supervisory protection of the Central Bank had been negated, in relation to the Divineguma community based banks and banking societies.

These activities fall completely within the definition of ‘Banking Activity’ thus should come under the Banking Act, although the Attorney General otherwise argued, he pointed out. He said  egulatory and supervisory protection of the Central Bank of Sri Lanka should be given to these banks which deal with the heard earned money of the poorest of the poor.

At this point the Chief Justice questioned the role of the Central Bank. Mr. Dayaratne said in answer that provision of safeguards in the Finance and Business Act has been taken away.

“Why is the protection given to the investors in the other financial institutions not given to the poorest of the poor? Why are the phantoms running the banks and not public officers? The Community Based Organisations (CBOs) cannot be vested with statutory powers as statutory powers can only be vested in public officers.

As these members of the proposed CBOs are all volunteers, they could not hold public office and cannot be vested with statutory powers,” she said.

If SC says ok, debate on Nov. 6
The parliamentary debate on the controversial Divineguma Bill will be rescheduled for November 6, if the Supreme Court gives the go ahead for its enactment, Chief Government Whip Dinesh Gunawardena told the Sunday Times.Parliament will sit on Tuesday November 6, ahead of the presentation of the Budget on November 8 by President Mahinda Rajapaksa.

The Supreme Court ruling on several petitions on the Divineguma Bill is expected to be sent to the Speaker Chamal Rajapaksa by next Tuesday.

“If the Supreme Court determines the Bill can go ahead, we will pass it on November 6 after a full day’s debate,” the minister said.

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