The Supreme Court today (1) ruled that the decision of a three-judge High Court bench to release former Finance Minister Ravi Karunanayake, former Central Bank Governor Arjuna Mahendran, Perpetual Treasuries Limited, and its directors without conducting a trial in the Central Bank bond scam case was erroneous.
Accordingly, the Supreme Court held that the case filed under the Public Property Act against the accused and Perpetual Treasuries Limited could proceed. The Court also directed that the trial be heard and concluded expeditiously.
Nature of the Case
The Attorney General filed the case over the alleged misappropriation of more than Rs. 36.98 billion in public funds and criminal breach of trust relating to Treasury bond auctions conducted by the Central Bank of Sri Lanka during 2015 and 2016.
The accused included former Finance Minister Ravi Karunanayake, former Central Bank Governor Arjuna Mahendran, and 11 others, including Arjun Aloysius and Kasun Palisena of Perpetual Treasuries Limited.
They were charged with criminal breach of trust in connection with Treasury bond transactions worth more than Rs. 36 billion conducted through the Central Bank in 2016.
Three-Judge High Court Verdict
The case filed by the Attorney General was taken up before a three-judge High Court bench comprising Justices Damith Thotawatte, Manjula Thilakaratne, and Mohamed Irshadeen on March 4, 2022, to consider preliminary objections raised by the defence regarding the maintainability of the indictment.
In the majority ruling delivered by Justices Damith Thotawatte and Manjula Thilakaratne, the Court held that only natural persons could be prosecuted under Section 7 of the Public Property Act.
Justice Thotawatte stated that since Perpetual Treasuries Limited was not a natural person, charges under the Public Property Act could not be maintained against the company.
The Court further held that the charges filed against the 11 accused under the Public Property Act, which were linked to allegations against the company, could not proceed.
However, Justice Mohamed Irshadeen dissented, holding that the charges filed by the prosecution under the Public Property Act were legally maintainable.
Attorney General’s Request Rejected
Following the ruling, Senior State Counsel Lakmini Girihagama, appearing for the prosecution, requested a short adjournment to study the judgment and determine the next course of action.
President’s Counsel Shavindra Fernando, appearing for former Minister Ravi Karunanayake, opposed the request, arguing that the Court’s ruling rendered the entire indictment unsustainable.
He further contended that the Attorney General lacked the authority to amend the indictment and that it should therefore be withdrawn.
However, Presiding Judge Damith Thotawatte stated that it would be inappropriate to postpone proceedings pending further consideration of the judgment. With the concurrence of the majority of the bench, he ordered that a pre-trial conference be held on May 4, 2022, to proceed with the remaining charges.
Appeal by the Attorney General
The Attorney General’s Department subsequently filed an appeal before the Supreme Court challenging the High Court’s decision, which effectively resulted in the release of the accused without a trial.
Allowing the appeal, the Supreme Court today ruled that the High Court’s conclusions were fundamentally flawed.
With this landmark judgment, the long-stalled Central Bank bond scam trial has been revived, paving the way for the case to proceed against the accused.
