Introduction The case CA/WRIT/146/2018 was adjudicated in the Court of Appeal of the Democratic Socialist Republic of Sri Lanka. The petitioners sought mandates in the nature of Writs of Certiorari, Prohibition, and Mandamus under Article 140 of the Constitution. The petitioners included Forest Glen Hotel and Spa (Pvt) Ltd, Elk Plain Farm (Pvt) Ltd, and their directors, Dr. Tariq Kuraishy and Ms. Melissa Kuraishy. The core issue revolved around the cancellation of lease agreements over state lands by the respondents.
Background The dispute involved three parcels of land depicted in survey plans No. NU1710 and NU236. The petitioners obtained lease rights through Lease No. 4/10/20592 and Lease Approval No. 4/10/20614, respectively, for 30 years. These leases were granted based on business projects involving tourism and agriculture, which were expected to be facilitated by the Board of Investment of Sri Lanka (BOI).
The original leaseholder, Hendavitharanage Dickson Silva, had renounced his rights in favor of the petitioners through Deed of Declaration P9 and Quit Claim Deed P8. The leases were approved and executed, and the petitioners paid their lease rentals regularly until 2014.
Grounds for Cancellation The decision to cancel the leases was conveyed through letter P27, issued by the Commissioner General of Lands. The primary ground cited for cancellation was the termination of the BOI agreements. However, the petitioners were not notified of any inquiry or afforded an opportunity to present their case. Additionally, the exact nature of the breach of lease conditions was not specified.
Legal Analysis
- Breach of Natural Justice:
- The decision to cancel the leases was made without a hearing, violating the Audi Alteram Partem principle. The petitioners were not informed of the allegations or given a chance to respond.
- The presence of the 5th respondent, a rival claimant, at the discussion without the petitioners further undermined the fairness of the process.
- Legitimate Expectation:
- The petitioners had a legitimate expectation to enjoy the leases for the full term, provided they fulfilled their obligations. The unilateral cancellation without inquiry or explanation breached this expectation.
- Statutory Procedure:
- The court noted that Section 17(1) of the State Lands Ordinance mandates that the Government Agent must issue notice before cancelling a lease. The respondents failed to follow this procedure.
- Dependence on BOI Agreements:
- The court rejected the respondents’ claim that the leases were intrinsically linked to the BOI agreements, as no clear terms in the lease instruments supported this assertion.
Judgment The Court of Appeal, presided by Justices Damith Thotawatta and Dhammika Ganepola, ruled in favor of the petitioners. It held that the cancellation was unlawful due to procedural irregularities, violation of natural justice, and breach of legitimate expectation. The court issued Writs of Certiorari to quash the decisions to cancel Lease No. 4/10/20592 and Lease Approval No. 4/10/20614.
Conclusion The judgment underscores the importance of adhering to due process and upholding principles of natural justice in administrative actions. It reaffirms that the state must act fairly and transparently when exercising its powers over public lands. The case sets a significant precedent for protecting leaseholders’ rights against arbitrary administrative decisions.
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