Counsel for CB indisposed; CA defers proceeds for 10 March in Perpetual Treasuries vs. Monetary Boar

By S.S. Selvanayagam

The Court of Appeal yesterday (8) deferred for 10 March the resumption of supporting the Writ Petition filed by Perpetual Treasuries as the Counsel for the Central Bank was indisposed.

When the matter came up before the Bench comprising Justices Vijith K. Malalgoda (President/CA) and S. Thurairaja, Junior Counsel Faiza Markar made application that Senior Counsel Faisz Musthapha PC who is appearing for the Central Bank is indisposed and moved for the postponement. Counsels for Perpetual Treasuries did not oppose the motion.

Senior Counsel Faisz Musthapha PC appeared for the Central Bank on 3 March raised preliminary objections on the maintainability of the Writ Application the purported grounds of futility, delay, acquiesce and suppression.

President’s Counsel S.A. Parathalingam appearing for Perpetual Treasuries had responded the so-called Objections are not preliminary objections but are defences that could be taken up after having heard his submission.

The Court having heard all parties had decided to permit the Counsel for the Petitioner Perpetual Treasuries to continue to support the Petition.

President’s Counsel Parathalingam appearing for Perpetual Treasuries had contended that the actions of the Central Bank of Sri Lanka were ultra vires (beyond its legal power or authority) and unreasonable in the issuance of the Directives under the purported Regulation.

He had submitted the position of his client Perpetual Treasuries has been disproportionally and unreasonably victimised in the issuance of the Central Bank of Sri Lanka and it is a matter of grave urgency as his client will be driven to bankruptcy as a result of the severe conditions imposed by the Monetary Board.

By the purported Directives of the Monetary Board, his client’s functions has come to standstill and therefore there is a grave urgency, he had underlined.

Petitioner company claims that in the absence of no formal violation of procedure by it in the purported bond scandal, the true intentions of behind the issuing of the said Directions are mala fide and ultra vires of the regulatory powers of the Respondents.

It bemoans that the impugned Directions are issued for extraneous reasons in order to satisfy the media and political agendas.

It laments that if the said impugned Directions are in force Perpetual Group of Companies will suffer grave and irremediable financial loss and will be driven to bankruptcy.

The Petition was filed by Perpetual Treasuries Ltd., Perpetual Asset Management Ltd. and Perpetual Capital Holdings Ltd.m citing the Central Bank, Monetary Board and 11 others as Respondents.

Instructed by G.G. Arulpragasam, S.A. Parathalingam PC with Nishkan Parathalingam and Niranjan Arulpragasam appeared for Perpetual Treasuries Ltd. and Nihal Fernando PC with Romali Tudawe and Maduka Perera appeared for the other two Petitioner companies. 

Faisz Musthapha PC with Faiza Markar instructed by Gowry Shangary Thavarasha appeared for the Central Bank. Deputy Solicitor General Milinda Gunatilake appeared for the Monetary Board and the Attorney General. Some of the Directions are that (1) Perpetual Treasuries Ltd. shall not bid at any primary auctions exceeding 12.5% of the total amount offered at such auction and shall not bid exceeding 20% of the offered amount of each item representing different maturities; (2) the daily aggregate of the secondary market transactions by it in Government securities shall not exceed Rs. 1 billion; (3) It shall not, except with the prior written approval of the Monetary Board distribute its profits, retained earnings or reserves; (4) It shall not enter into any transaction for consideration or otherwise, except with prior written approval of the Monetary Board, in respect of anything not connected with the activities of a primary dealer.