News
Many clauses of CBSL Bill inconsistent with Constitution: Supreme Court
View(s):- Referendum needed if they are to be passed in their current form
By Ranjith Padmasiri
The three-Judge bench comprising Justices Priyantha Jayawardena, Kumuduni Wickremasinghe and Arjuna Obeyesekere described certain clauses as “arbitrary and capricious” and therefore inconsistent with the Constitution.
The SC has noted that the bill does not contain sufficient provisions to have executive control over the Central Bank. Thus, the Bill is inconsistent with Articles 3 and 4(b) of the Constitution and thereby should be passed in Parliament by a special majority as required by Article 84(2) and approved by the People at a Referendum in terms of Article 83 of the Constitution.
Additionally, the SC noted that Clause 111(2) of the Bill too would need a special parliamentary majority and would also have to be approved at a referendum. Clause 111(2) states that the Central Bank has the power to compound offences and such compounding of offences shall have the effect of an acquittal. The SC however, has noted that this can be done by a competent court. Thus, the Central Bank which has no judicial power cannot compound an offence which has the effect of an acquittal, the Court has stressed.
The SC has observed that Clause 14(16) of the Bill enables the CBSL Governor to accept and hold other positions. Taking into consideration the duties and functions that are required to be performed by the Governor of the Central Bank, such a proviso is “unwarranted. arbitrary, and capricious,” and thereby violates Article 12(1) of the Constitution, the bench states.
Meanwhile, Clause 26(1) does not set out a criterion to resolve a possible deadlock situation between the Central Bank and the Minister. Thus, as Clause 26(1) of the Bill does not provide for a proper criterion to address a possible situation where a difference of opinion arises between the Minister and the Central Bank, the said Clause is arbitrary and capricious.
Clause 5(2) of the Bill restricts the accountability of the CBSL only to the matters specified in the Bill. Thus, it excludes the accountability of the CBSL under the common law and other laws of the country. Thus, Clause 5(2) is arbitrary, capricious, and therefore inconsistent with Article 12(1) of the Constitution, the Court has ruled.
The proviso to Clause 15(9) of the Bill enables the appointment of a Deputy Governor other than an employee of the CBSL. However, the said Clause does not state the requirement to appoint such a person, nor does it specify the criteria that should be followed in appointing such a Deputy Governor. Thus, Clause 15(9) is “unreasonable, arbitrary, capricious, and inconsistent” with Article 12(1) of the Constitution, the Justices also ruled.
The SC has however, proposed amendments to the Clauses that it has found to be inconsistent with the Constitution and observed that the inconsistencies will cease if they are incorporated. Parliament will take up the Second Reading of the CBSL Bill on May 11.
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