AG’s Discretion to Indict Subject to Review, But Boundaries Apply- SC

Ravi’s Penthouse Case Back On:

The Supreme Court has clarified the circumstances under which courts may review the prosecutorial discretion of the Attorney General (AG). Delivering the judgment, Justice Mahinda Samayawardena stated that while prosecutorial independence is critical to the rule of law, courts are not powerless to intervene when such discretion is abused or improperly exercised.

While affirming the AG’s broad prosecutorial authority under the law, the Supreme Court emphasized that this discretion is not unfettered. It remains reviewable in rare cases, particularly where procedural impropriety or legal irregularity is evident.

“…If the Attorney General exceeds the lawful bounds of his authority, or fails to exercise prosecutorial discretion properly—whether by taking into account irrelevant factors, yielding to political pressure, acting on extraneous considerations, or the like—the Court is not only empowered but duty-bound to intervene. Whether such considerations have in fact tainted the decision, thereby warranting judicial review, must be determined on a case-by-case basis….” – Justice Samayawardena

Nevertheless, the Court set clear limits: when facts are in dispute, as they typically are in complex criminal matters, writ jurisdiction is not appropriate. Courts generally will not second-guess the sufficiency of evidence or substitute their judgment for that of a trial court.

“…In discussing the boundaries of judicial review, Administrative Law by Sir William Wade and Christopher Forsyth, 11th Edition, page 533, citing in particular R v. DPP, ex parte Kebelene [1999] 3 WLR 972, states that “The House of Lords has however held that decisions about prosecutions are not amenable to judicial review where the complaint could equally well be made in the course of trial, since otherwise trials would be unacceptably delayed by collateral proceedings.” This is precisely what has happened in the instant case. The House of Lords in that case affirmed the broad discretion vested in the Director of Public Prosecutions in consenting to prosecutions and recognised that judicial review would only be warranted in instances of dishonesty, bad faith, or other exceptional circumstances…” – Justice Samayawardena

Allegations Against Former Finance Minister

The case involved former Finance Minister Ravi Karunanayake, who was indicted in 2021 before the High Court-at-Bar in connection with the Central Bank bond scandal, a large-scale financial controversy involving Perpetual Treasuries Ltd (PTL).

Here’s what unfolded:

In March 2016, Karunanayake chaired two key meetings with state bank officials at the Ministry of Finance.
Shortly after, those banks made low bids for treasury bonds, allowing PTL to acquire a disproportionately large share.
During this period, Karunanayake and his family took residence in a luxury penthouse, the lease of which was paid by Walt and Row Associates, a company with direct ties to Arjun Aloysius, owner of PTL.
That apartment was later purchased by Global Transportation and Logistics (Pvt) Ltd, a company controlled by Karunanayake’s family.
These facts came to light during the Presidential Commission of Inquiry (COI), with critical testimony from the apartment’s former owner, Anika Wijesuriya.

The Court of Appeal previously quashed the indictment on the basis that the Commission only made “observations,” not “determinations,” and held that there was insufficient evidence to meet the legal threshold under Section 24 of the Commissions of Inquiry Act.

Supreme Court Reverses

The Supreme Court disagreed, holding that the AG had not acted solely on the Commission’s findings, but also relied on a separate investigation conducted by the CID on the basis of a written complaint by then Central Bank Governor Dr. Indrajit Coomaraswamy.

Importantly, the Court noted that Section 24 of the COI Act allows the AG to independently initiate criminal proceedings even in the absence of a formal recommendation by the Commission. The non-obstante clause at the beginning of Section 24 was highlighted as giving the AG independent and overriding authority, provided the decision is backed by material gathered lawfully.

The Court found that the Court of Appeal erred by interpreting the AG’s reliance on the COI report too narrowly, ignoring the broader evidentiary base, including CID reports and statements gathered under the AG’s oversight.

The Supreme Court accordingly set aside the judgment of the Court of Appeal, reinstated the indictment, and allowed the AG to proceed with the case against Karunanayake.

“…It is imperative that the decisions of the Attorney General command the confidence of both the public and the judiciary. If such actions are viewed with suspicion or perceived as arbitrary without compelling and cogent reasons, it may undermine the credibility of the prosecutorial process and erode public confidence in the integrity of the whole justice system. Public confidence is the foundation upon which the legitimacy of the justice system in any country rests. Once it is eroded, anarchy is not far behind….”

“…The main items of material evidence against the petitioner were elicited from the testimony of officials from the three main state banks. This forms the core foundation of the case against the petitioner. Given the above items of evidence presented before the Commission, how can the Court of Appeal, in the exercise of writ jurisdiction, quash the indictment on the ground that there was not “adequate material and evidence particularly against the petitioner”? The question whether the evidence led through these witnesses is reliable and adequate should be left for the Trial Court to determine…” – Justice Samayawardena

Case No: SC/APPEAL/104/2024 [Decided on 03.06.2025]

Before: Hon. Justice S. Thurairaja, P.C. Hon. Justice Janak De Silva Hon. Justice Mahinda Samayawardhena