While the 1st Respondent argues as evidence for the normality of this transaction that "it is an everyday commercial reality that the very basis of commercial transactions is to make a profit", the sale of a development company after obtaining state-subsidized assets and inordinately favourable tax incentives, before significant investment into the company or the commencement of development is anything but an "everyday commercial reality". Given the fact that the 1st Respondent actively and successfully lobbied the Cabinet for concessions for Asia Pacific beyond and in excess of the guidelines she herself had promulgated in her capacity as President, it is patently disingenuous for the 1st Respondent to now abdicate responsibility and claim ignorance of the nefariousness of the transaction. Quite simply, it is unacceptable and reprehensible for the 1st Respondent to have made use of the power conferred upon her by the People to advance this Project, and now distance herself from the responsibilities inherent to such power.

Notably, this is not the only instance in which she has interceded in land alienation procedures for the purpose of "actively facilitating," if not seeking to bypass the appropriate approval process. According to a Report of Committee of Inquiry delivered on 6th November 2002 regarding, in part, the propriety of alienation of land in Narahenpita to Lifestyle Health Services (Private) Limited, the 1st Respondent issued several pieces of correspondence through which she, inter alia, expressed repeated concern over procedural delays and instructed the BOI to expedite the process of vesting of the land by "eliminating some of the steps outlined or by accelerating the same." (Document EE of the BOI Affidavit page 9 paragraph ix) From the documentation presented to this court it appears this transaction too was another ‘favour’ granted – and as submitted by the petitioner, according to some in the media, a favour to her masseur. This court directs the BOI and the SLLR & DC to immediately investigate this dubious alienation and to act forthwith to restore the public purpose for which the said land was acquired especially as the affidavit of the SLLR & DC reveals that several instalments amounting to approximately Rs. 25 Million have not yet been paid. This is of particular importance given the pressing problem of the lack of housing for middle class government officials who reside in Colombo, since no development whatsoever has taken place on this land.

In her written submission for the instant case, the 1st Respondent advanced as reasons for her submission of such extensive concessions (i) the fact that the country had faced low levels of foreign investment due to the country’s extensive political strife and terrorist violence, (ii) the fact that a significant portion of the property was to be preserved as undeveloped marsh, and (iii) the success of the Digana golf project.

However, the concessions the 1st Respondent sought do not accord with the guidelines she herself had promulgated earlier on in her Presidency, and the reasons provided in defence of such action do not accord with the facts then available to her and of which she was reasonably expected to be aware of even if she had only superficially scrutinised this transaction. In the Cabinet Memorandum P3 advanced by the 1st Respondent to obtain cabinet approval of the project, the 1st Respondent put forth the use of a rental rate based at 2% of the market value of the project, excluding the land value. Such rate, however, pursuant to her own Special Projects Memorandum, was only available to projects costing in excess of Rs. 1 billion, a project size Rs. 490 million more than the proposed project cost at the time the 1st Respondent issued the Cabinet Memorandum P3. In addition to this concession, the 1st Respondent also saw fit to seek a Rs. 90 Million offset against the CV’s Valuation of the land in consideration of the fact that the property was not to be developed, and because the "promoters" had suggested that the CV’s Valuation would make the project untenable.

However, the 1st Respondent’s request for a Rs. 90 million offset evidences her deliberate dismissal of the UDA-issued terms – enumerated supra – by which the Chief Valuer had already downwardly adjusted his valuation for this very issue.

Why this desire to violate her own guidelines and offer concessions in excess of those she saw fit to earlier promulgate as "special concessions" for select projects? Furthermore, despite a suggestion that the Country was in great need of foreign investment due to the unstable political climate of the country and that her enthusiasm for such project was fuelled by the success of the Victoria Golf Course in Digana, the UDA and BOI have revealed, respectively, the interest by multiple golf course companies with respect to land at the Battaramulla location and the fact that, at the time of the Cabinet Memorandum P3 was issued, the Digana project was only at most 50% complete. In light of such evidence, the legitimacy and purpose of the 1st Respondent’s request for such extensive and noncompliant concessions is based on falsehood and is called into question.

Interestingly, as part of a plea of propriety, the 1st Respondent blames the issuance of the Cabinet Memorandum approving the construction of villas and apartments as an action taken while she was out of the country and a result of the shift of government control to the UNF in 2001, and further submits that she moved to terminate the transaction "no sooner" than when "it took a different turn during the period of the UNF Government." Several peculiarities arise, however, when viewing this abdication of responsibility in light of the submitted evidence.

Apart from the fact that such an assertion implies that the position of Executive President was essentially powerless during the latter part of her Presidency – an assertion belied by the inordinate constitutional power held by the President as Head of the Cabinet that remained unchanged from prior to that period and, frankly, a statement unbecoming of a former holder of such post – the assertion ignores the fact that the Memorandum she issued to seek cancellation of the transaction (Document U46 of the UDA’s written submission), by her own words, states that the "substantial changes" at the basis of her objection had, in fact, been approved prior to this alleged shift in power, a time in which she, by her own logic, was in control.

Furthermore, the need to issue such a cancellation appears to have been obviated by the fact that the CEA had already issued an order one year earlier to cease activity pending CEA approval of the environmental impact of the proposed villas and the SLLR & DC had subsequently given its approval to the revised master plan (Document U45 of the UDA’s written submission) – apparently, a resolution for which the 1st Respondent felt unnecessary when declaring without substantiation that the villas posed a flooding hazard. Even assuming the legitimacy of the above suggestions, a question remains as to why the 1st Respondent waited till the end of 2004 to act upon the results of an investigation she reinstated and which were delivered in late 2002 (Documents EE and FF of the BOI’s Affidavit) revealing, inter alia, the inconsistency in the use of the CV’s Valuation with respect to the freehold sale of the luxury villas and associated land. Given, then, her presumed awareness in 2002 of the "substantial change" to the plan to include villa construction, such a delay to cancel the transaction belies the 1st Respondent’s assertion that she took action "no sooner" than she found out about such change, and gives rise to the idea that the cancellation sought was for reasons other than a newly-found appreciation of environmental protection.

The irregularities of the above actions cannot be dismissed. Such actions can be seen to be, at best, revealing an incompetence and an unacceptable abdication of responsibility of the most powerful state official of Sri Lanka, and at worst, a pattern of behaviour evidencing an agenda at odds with ensuring optimal use of public lands (the Court at this stage will not deal with the submission of Counsel for the Petitioner that her "lapses" were deliberate, merely to secure a favour to her friend, the 5th Respondent, Mr. Ronnie Peiris). His Lordship, Sarath N. Silva in Senerath v. Kumaratunga [2007] SCFR 503/2005 SCM, espoused in the context of inappropriate action by the 1st Respondent, that:

The case of the Petitioners is that the 1st Respondent and the Cabinet of Ministers of which she was the head, being the custodian of executive power should exercise that power in trust for the People and where in the purported exercise of such power a benefit or advantage is wrongfully secured there is an entitlement in the public interest to seek a declaration from this Court as to the infringement of the fundamental right to equality before the law.

I am in full agreement with the spirit of his Lordship’s characterisation of the 1st Respondent’s responsibility. The expectation of the 1st Respondent as a custodian of executive power places upon the 1st Respondent a burden of the highest level to act in a way that evinces propriety of all her actions. Furthermore, although no attempt was made by the 1st Respondent to argue such point, we take opportunity to emphatically note that the constitutional immunity preventing actions being instituted against an incumbent President cannot indefinitely shield those who serve as President from punishment for violations made while in office, and as such, should not be a motivating factor for Presidents – present and future – to engage in corrupt practices or in abuse of their legitimate powers.

That the President, like all other members of the citizenry, is subject to the Rule of Law, and consequently subject to the jurisdiction of the courts, is made crystal clear by a plain reading of the Constitution, a point conclusively established in Karunathilaka v. Dissanayaka [1999] 1 Sri.L.R. 157 by Justice Fernando:

The immunity conferred by Article 35 is neither absolute nor perpetual. While Article 35(1) appears to prohibit the institution or continuation of legal proceedings against the President, in respect of all acts and omissions (official and private), Article 35(3) excludes immunity in respect of the acts therein described. It does so in two ways. First, it completely removes immunity in respect of one category of acts (by permitting the institution of proceedings against the President personally); and second, it partially removes Presidential immunity in respect of another category of acts, but requires the proceedings be instituted against the Attorney-General... It is also relevant that immunity endures only "while any person holds office as President". It is a necessary consequence that immunity ceases immediately thereafter, indeed it would be anomalous in the extreme if immunity for private acts were to continue.

Any lingering doubt that is completely removed by Article 35(2), which excludes such period of office, when calculating whether any proceedings have been brought within the prescriptive period. The need for such exclusion arises only because legal proceedings can be instituted or continued thereafter. If immunity protected a President even out of office, it was unnecessary to provide how prescription was to be reckoned.

I hold that Article 35 only prohibits the institution (or continuation) of legal proceedings against the President while in office; it imposes no bar whatsoever on proceedings (a) against him when he is no longer in office, and (b) other persons at any time. That is a consequence of the very nature of immunity: immunity is a shield for the doer, not the act. Very different language is used when it is intended to exclude legal proceedings which seek to impugn the act.

Article 35, therefore, neither transforms an unlawful act into a lawful one, nor renders it one which shall not be questioned in any Court. It does not exclude judicial review of the lawfulness or propriety of an impugned act or omission, in appropriate proceedings against some other person who does not enjoy immunity from suit; as, for instance, a defendant or a respondent who relies on an act done by the President, in order to justify his own conduct.

Such a conclusion is unequivocal. To hold otherwise would suggest that the President is, in essence, above the law and beyond the reach of its restrictions. Such a monarchical/dictatorial position is at variance with (i) the Democratic Socialist Republic that the preamble of the Constitution defines Sri Lanka to be, and (ii) the spirit implicit in the Constitution that sovereignty reposes in the People and not in any single person. As His Lordship G.P.S. De Silva explained in Premachandra v. Major Montague Jayawickrema [1994] 2 S.L.R. 90 (quoting Wade):

Statutory power conferred for public purposes is conferred as it were upon trust, not absolutely – that is to say, it can validly be used only in the right and proper way which Parliament when conferring it is presumed to have intended.

Although the Crown’s lawyers have argued in numerous cases that unrestricted permissive language confers unfettered discretion, the truth is that, in a system based on the rule of law, unfettered governmental discretion is a contradiction in terms.

In light of the foregoing, which has given much credibility to the emphatic allegations of Counsel for the Petitioners, I can say without reservation that the 1st Respondent has failed to act with the requisite level of responsibility warranted by her position, abused her power and has acted in a manner that reveals a desire to accommodate an interest or interests other than that of the People of Sri Lanka.

Accordingly, the Court finds that the 1st Respondent has failed to further the Public Trust, has betrayed such trust and stands in infringement of Article 12(1) of the Constitution.

The next issue to be dealt with is the role of the Original Shareholders of Asia Pacific, as well as the company itself. As gathered from the various documentation provided – including the original and amended BOI application – the Original Shareholders apparently had experience on several company boards, were active in golf and headed several golf clubs both in Sri Lanka and abroad. Based upon their belief that Golf was "the passport to International Business" and the means by which tourism and investment could be drawn to Sri Lanka, they suggested a project to build a golf course with little more than their proposed personal investment, that of "a Japanese Individual" and the collection of more collaborators. Asia Pacific was the vehicle by which their desire to build a golf course was to be achieved.

A review, however, of the financial aspects of the corporation reveal that though lofty aims were sought, there was not, in fact, much in the way of actual investment during the period the Original Shareholders owned the company – in fact, despite requesting and obtaining a BOI agreement based upon a project cost of 1.96 billion dollars, at the time Access Holdings bought into the company in 2002, the company had a paid-up capital amount of only Rs. 15 Million (vide Para. 7 of the 6th Respondent’s written submission). The Court notes and understands the realities of business, namely that projects of this scope require significant investment, often much of which is not immediately available upon the project’s commencement.

It is precisely for this reason that BOI agreements contemplate a grace period for which project completion is to be completed (and precisely for this reason that the BOI, as mentioned above, needed – but failed – to take great pains in assessing the realistic expectation that such promoters would be able to obtain the financing necessary for such an endeavor before issuing approval).