S.C. (FR) Application No. 58/99 - Case of Emil Franklin Kronemberg

S.C. Application FR No. No. 58/99

In the Supreme Court of the Democratic Socialist Republic of Sri Lanka

Colombo 12.

In the matter of an application under Article 126 of the Constitution

Petitioner:
Emil Franklin Kronemberg, 122, St. Mary's Lane, Mattakkuliya.

Vs.

Respondents:
1. V. Kandasamy, (Senior Superintendent of Police), Director, Colombo Fraud Investigation Bureau, 5, Dharmarama Road, Colombo 6.
2. P. S. Gunaratne, (Sergeant No. 10746), Colombo Fraud Investigation Bureau, 5 Dharmarama Road, Colombo 6.
3. R. A. A. G. de Alwis, (Inspector of Police), OIC (Unit 1), Colombo Fraud Investigation Bureau, 5, Dharmarama Road, Colombo 6.
4. M. P. Cyril Perera, 51 / 14A, St. Mary's Lane, Colombo 15.
5. The Attorney General, Attorney General's Department, Colombo 12.

Before:
S. N. SILVA, C. J.
SHIRANI A. BANDARANAYAKE, J.
EDUSSURIYA, J.

Counsel:
D. S. Wijesinghe, PC with J. C. Weliamuna, For the petitioner
Mohan Peiris, For the 4 th. respondent
Sanjay Rajaratnam, SSC, For the 1 st. to 3 rd. and 5 th. respondent

Argued on: 05. 02. 2001

WRITTEN SUBMISSIONS ON

For the petitioner : 20. 02. 2001
For the 4 th. respondent: 22. 03. 2001
For the 1 st. to 3 rd. and 5 th. respondent: 02. 05. 2001

Decided on: 11. 06. 2001

SHIRANI A. BANDARANAYAKE, J.

The petitioner, who is a Sri Lankan, is also a permanent resident of Australia. He and his wife are the sole Directors of a limited liability Company known as E. C. D. Transporters (Pvt.) Ltd. The petitioner left for Australia on 07. 08. 1997 and prior to his departure, he gave special power of Attorney to one P. E. Harold Fernando, who is the Accountant of his Company and one D. N. Aloysious Todd, the General Manager of the Company (hereinafter referred to as Attorneys) authorizing them to deal with banking transactions of the Company (P2 and P3). The petitioner returned to Sri Lanka on 17. 06. 1998. On his return he found that the said two Attorneys had obtained a loan of Rs. 450,000/-, without any authority from the Company or its Directors, from the 4 th. respondent, who is not known to the petitioner. On 23. 12. 1998, the 2 nd. respondent informed the petitioner that the said Attorneys had been taken into custody by the Colombo Fraud Investigation Bureau and wanted him to come to the said Police Station in order to release them on bail. When the petitioner met the 2 nd. respondent, he took him to the 1 st. respondent, who accused the petitioner for obtaining a loan of Rs. 450,000/- from the 4 th. respondent and wanted him to pay Rs. 250,000/- immediately and the balance amount on or before 31. 12. 1998. The petitioner was told that his passport would be impounded and that he would be remanded unless the payments were not made as suggested by the 1 st. respondent. The petitioner and the two Attorneys were kept in a cell in the Police Station. Meanwhile the petitioner instructed one R. A. Shantha, a Clerk attached to his Company to make arrangements to obtain Rs. 450.000/- by the following morning. According to the petitioner, from the time the petitioner went to the Police Station, the 4 th. respondent was present there and it appeared from the conduct of the 4 th. respondent that he was known to the 1 st. and 2 nd. respondents.

The petitioner and the two Attorneys were taken by the 2 nd. respondent to the Magistrate's Court, Hulftsdorp on 24. 12. 1998 around 1.00 p.m. Before taking them to the Courts, the jeep was parked near a Bo-tree close to the Courts and the said Shantha was waiting there with the money. The petitioner handed over the money to the 2 nd. respondent who in turn gave it to the 4 th. respondent. The 2 nd. respondent, thereafter dictated a letter on which the 4 th. respondent signed on a stamp. Two of those who were present also signed as witnesses. The 2 nd. respondent took the letter and informed the petitioner not to try " to be smart " before the Magistrate. The petitioner was produced before the Acting Magistrate and the 2 nd. respondent informed the Magistrate that the suspect had settled the money due to the complainant and therefore it was not necessary to remand him. Thereafter the petitioner and the two Attorneys were discharged.

The petitioner alleged that due to the acts of the 1 st. and 2 nd. respondents, his fundamental rights guaranteed by Articles 11, 12 (1) , 13 (1) and 13 (2) were violated. The petitioner alleged he was subjected to humiliation and degrading treatment contrary to Article 11 of the Constitution, was arrested arbitrarily and maliciously without any reason, and was unfairly detained without any reason contrary to Articles 12 (1), 13 (1) and 13 (2) of the Constitution. This Court granted leave to proceed in respect of the alleged infringement of Articles 13 (1) and 13 (2) of the Constitution.

On 10. 11. 1998, the 4 th. respondent had lodged a complaint at the Colombo Fraud Investigation Bureau (4R6) which stated that the petitioner, who is well known to the 4 th. respondent, had told him that the petitioner had authorized the said Attorneys to attend to the Bank transactions of the Company and to borrow money from the 4 th. respondent for Company purposes, if and when it becomes necessary. In April 1998 both Attorneys visited the 4 th. respondent and requested a loan of Rs. 400,000/-, as the Company had financial difficulties. Based on the trust he had on the petitioner, the 4 th. respondent had readily given the said amount to the two Attorneys. A further sum of Rs. 5o,ooo/- was again requested and this was given on 16. 05. 1998. The money was to be returned in two weeks time. The 4th. respondent visited the petitioner, who had returned to the island, on 31. 07. 1998 in his Company and requested him to re pay the loan of Rs. 50,000/- . The petitioner then instructed Harold Fernando , (one of the Attorneys) to issue a cheque for that amount. When the 4 th. respondent inquired as to why the petitioner is not the signatory to the cheque, he was told that the two Attorneys are still the authorized signatories of the Company. When this cheque was presented for payment, it was returned by the Bank and on the request of the petitioner it was presented again for payment. However, the Bank did not honor the cheque. The 4 th. respondent became concerned in the financial stability of the Company and requested the petitioner to return the Rs. 400,000/- borrowed by them. The petitioner got Harold Fernando to issue a cheque for Rs. 400.000/-, but the 4 th. respondent refused to accept a cheque and demanded a cash payment. The petitioner reassured him that the cheque for Rs. 400,000/- would be honored and also promised to re pay the loan of Rs. 50,000/- by cash. When the 4 th. respondent presented the cheque for payment, it was returned by the Bank. Thereafter, the 4 th. respondent made several attempts to recover the money from the petitioner, to no avail. A complaint was lodged by the 4 th. respondent as a last resort to obtain his money given to the petitioner.

The position taken up by the petitioner is that, the two Attorneys on 30. 04. 1998, borrowed a sum of Rs. 400,000/- on interest from from the 4 th. respondent. This amount was to be paid within 6 months and the interest rate was 8%. The possession of a " Pajero " jeep was given as security for this loan. The petitioner contended that the complaint of the 4 th. respondent (4R6) does not disclose a criminal offence and does not warrant the arrest and detention of the petitioner.

Learned Senior State Counsel for 1 st. to 3 rd. and 5 th. respondents, contended that during the investigations conducted on the complaint made by the 4 th. respondent, it was revealed that the petitioner had advertised the sale of a motor vehicle belonging to him in the Sunday Observer dated 06. 12. 1998 and also the sale of his business concern, E. C. D. Transporters (Pvt.) Ltd., through an Agency, in the Daily News dated 10. 12. 1998 (2R2 and 2R3). Accordingly the 2 nd. respondent had apprised the 1 st. respondent that based on the Newspaper advertisements inserted by the petitioner, there was a reasonable apprehension that the petitioner was proposing to migrate or leave the country.

The 4 th. respondent lodged his complaint only after making several efforts to obtain the money he had given on loan to the two Attorneys. He was in doubt whether he would ever be able to get his money given to the two Attorneys, when he realized that there was insufficient funds in the Bank and the complaint was against the petitioner for cheating him. The 2 nd. respondent recorded the complaint of the 4 th. respondent on 10. 11. 1998. The two Attorneys were arrested on 23. 12. 1998. The petitioner met the 2 nd. respondent around 1.00 p.m. on 23. 12. 1998 at the Fraud Investigation Bureau at which time he was taken into custody. The petitioner and the two Attorneys were taken to Courts around 10.20 a.m. on 24. 12. 1998. The B report filed by the 3 rd. respondent on 24. 12. 1998 contained charges under 386 (criminal breach of trust) and 403 (cheating). Both of these are offences, where a suspect could be taken into custody without a warrant.

The petitioner in his affidavit has averred that he gave a special power of Attorney to the two Attorneys authorizing them to deal with banking transactions of the Company. Even on his return to the country, the petitioner had not cancelled the special power of Attorney given to the two Attorneys, as one of them had signed the cheques , which were given to the 4 th. respondent. It is common ground that the two Attorneys had borrowed Rs. 450,000/- from the 4 th. respondent as a loan. It is also common ground that the two Attorneys were authorised to deal with financial transactions of the Company. It is conceded that this authority was given to them by the petitioner. It may be contended that upto this point it is a civil transaction which does not warrant investigations being conducted by the Police and the arrest of any person. However, when the two cheques given with the intervention of the petitioner were dishonored, the 4 th. respondent had reasonable grounds to complain of the commission of criminal offences. These grounds are supported by the matters revealed in the Police investigations regarding the sale of the motor vehicle and the business establishment.

In these circumstances I hold that the petitioner had failed to establish the alleged violation of his fundamental rights guaranteed by Articles 13 (1) and 13 (2) of the Constitution. This application is accordingly dismissed, but in all the circumstances without
costs.


JUDGE OF THE SUPREME COURT

S. N. SILVA, C. J.
I agree.
JUDGE OF THE SUPREME COURT

EDUSSURIYA, J.
I agree.
JUDGE OF THE SUPREME COURT