How Key Figures Held Accountable
SC Decision on 2022 Economic Crisis:
The Supreme Court recently delivered a significant judgment on two Fundamental Rights applications concerning the 2022 economic crisis. These public interest litigations highlighted allegations of arbitrary and irrational decisions by several high-ranking individuals and institutions, leading to economic collapse and violations of fundamental rights.
The Allegations
Petitioners contended that the popular decisions of the Gotabaya Rajapakse government such as unexamined tax reductions, artificial exchange rate controls, failure to maintain official reserves, and when it was evident that the economy was in dire straits, the delays in seeking assistance from the International Monetary Fund (IMF) were the primary causes of the crisis. They further contended that despite clear warnings, no remedial actions were taken, exacerbating the situation. The default on foreign debt in May 2022, they alleged, was the inevitable outcome of these failures. Furthermore, they claimed these actions breached public trust and undermined the Rule of Law.
Key Respondents
The respondents included prominent figures such as former President Gotabaya Rajapaksa, former Finance Ministers Mahinda Rajapaksa and Basil Rajapaksa, former Central Bank Governors W. D. Lakshman and Ajith Nivard Cabraal, former Secretary to the President P. B. Jayasundara, former Secretary to the Treasury S. R. Attygalle, and the Monetary Board of the Central Bank.
Court’s Rejection of Objections
The respondents raised several objections to the maintainability of the applications, arguing that the petitions were filed beyond the constitutional time limit of one month. However, the Court recognized the ongoing nature of the economic mismanagement and ruled that the time limit should be calculated from when the public became aware of the issues, including Parliamentary admissions on May 4, 2022.
The respondents also claimed that the Monetary Board’s collective decision-making process shielded individual members from accountability. While the Court acknowledged the principle of collective responsibility, it emphasized that members could still be held accountable for negligence or statutory violations.
Additionally, the Attorney General argued that the Court lacked jurisdiction to review economic policy decisions. The Court rejected this, affirming its jurisdiction to review the reasonableness and constitutionality of executive actions, especially when fundamental rights were at stake.
The Court held that economic decisions made by the government are not immune from judicial review, especially when such decisions have a direct and adverse impact on the fundamental rights of citizens. The Court emphasized that the government’s economic policies must adhere to principles of reasonableness, accountability, and non-arbitrariness. Any action or inaction in fiscal or monetary policy that breaches public trust or violates constitutional rights is subject to scrutiny under fundamental rights jurisdiction. This landmark clarification reinforced the role of the judiciary in safeguarding public interest even in complex matters of economic governance.
The judgment reflects a significant affirmation of judicial oversight in the context of governmental economic policy. The ratio underscores that when public officials fail to act reasonably and within the bounds of their duties, especially in circumstances impacting citizens’ fundamental rights, the judiciary is empowered to intervene. The Court clarified that actions or inactions that are arbitrary, irrational, or in breach of public trust can be scrutinized under fundamental rights jurisdiction, setting a precedent for accountability in governance.
Findings of Breach of Duty
The Court found that public officials, including former Central Bank Governors Ajith Nivard Cabraal and W. D. Lakshman, former Treasury Secretary S. R. Attygalle, and former Monetary Board member Samantha Kumarasinghe, failed to take timely remedial measures such as seeking IMF assistance. This inaction was deemed manifestly unreasonable, irrational, and arbitrary, constituting a breach of public trust.
The Court also scrutinized the actions of S. R. Attygalle and P. B. Jayasundara, highlighting their roles in obstructing the Monetary Board from making decisions that could have improved the fiscal situation. Jayasundara’s undue influence on the Monetary Board’s decision-making process was particularly criticized.
The judgment extensively discussed the principles of the public trust doctrine and the Rule of Law. The Court emphasized that public officials hold their positions as trustees of the people and are obligated to act in the best interest of the public. Any deviation from this responsibility, particularly when decisions or inactions harm the nation’s economic stability, constitutes a breach of trust. Furthermore, the Court reaffirmed that adherence to the Rule of Law is essential to maintaining accountability and transparency in governance. Arbitrary actions or neglect that undermine these principles erode the trust reposed in public officials and damage the democratic framework of the nation.
The Court’s judgment underscored that public officeholders must act with due diligence, reasonableness, and accountability. The decisions and inactions of the former political leaders, including Mahinda Rajapaksa, Basil Rajapaksa, and Gotabaya Rajapaksa, were deemed arbitrary and irrational, further breaching public trust.
(Chandana Boteju AAL)
