The Court ruled the process of appointment of Deputy Governor of the Central Bank, W.A. Wijewardene to be arbitrary and unreasonable for specific reasons. In the first instance, the appointment of Wijewardene as Assistant to the Governor (AG) in May 2000 (an appointment immediately preceding his appointment as Deputy Governor) was by criteria that was undisclosed, confusing, anomalous and inconsistent with no indication of weightage. The appointments as AGs were from the Heads of Departments and would have effectively amounted to promotion to the rank of Special Grade. The Monetary Board was held to have failed to evaluate the candidates by reference to consistent criteria and also to have failed in complying with the prescribed procedure of obtaining the candidates self- assessments. Instead, what had happened was that the Governor of the Central Bank had submitted a Board Paper which laid down criteria that made objective and uniform evaluation well nigh impossible and then proceeded to appoint three AGs ( of which one was Wijewardene) with the Board promptly concurring with the decision. This inappropriately "indecent hurry", as one is irresistibly led to remark, was despite the fact that the statute required the Board to exercise its own independent discretion and evaluation in the manner of making appointments which could not be delegated to anyone including the Governor. The effective decision to appoint the three AGs however had been the Governor's decision and the Governor's decision alone, thus breaching the rule of non delegation. Compounding the confusion was the fact that while three AGs had been appointed in this manner, two further appointments to the positions of AGs had been made, one before May and the other after May which were by the Board and not by Governor, all five appointments showing in addition distinct differences in the manner in which weightage was given to seniority.
Meanwhile, in a further Board meeting in June, the Board proceeded to make the impugned appointment of Deputy Governor, subject to the concurrence of the Minister of Finance, without recording anything more about the process by which the Board reached its decisions or their reasons. Equally damagingly, the Court found that the subsequent process of obtaining the required concurrence of the Minister of Finance had not been fully and fairly disclosed to and considered by the Minister.

It was for these reasons that the Court found that the petitioner, Somapala Pattiwidana (who was an officer of the Central Bank in the rank of Special Grade) was entitled to a declaration and compensation from Court that his right to a fair selection process had been infringed. This was interestingly, despite a challenge made to the standing of the petitioner as he could not, in any case, have been entitled to complain as he was not entitled to be considered for selection as a Deputy Governor dealing with economic and monetary policy while the officer who could have been directly prejudiced, has preferred not to come before court.

The Supreme Court pointed out that the failure of an affected individual to petition court could be due to factors such as the perils of litigation and the fear of victimisation and that no inference could be drawn from such a failure.

Importantly, it then affirmed that Article 12(1) (which embodies the right to equality before the law), gave any candidate for appointment a right to be duly considered or in other words a right to a fair selection process. The Court, in the judgement of M.D.H. Fernando J. (with Wadugodapitiya and Gunsekera JJ agreeing) on 30th April, then went on to deal with the subject of Pattiwidana's fourth extension of service which was before Court in a connected application. Pattiwidana's extension had been refused to him some months after he had filed the first application challenging the appointment of the Deputy Governor as being unreasonable and arbitrary. The refusal was despite a Board Paper by a Deputy Governor of the Bank in which an extension for a further one year had been recommended and which warned that "the refusal of the extension might be related to the fact that he had filed a fundamental rights application. " The Board Paper also pointed out that Pattiwidana had been granted an extension unconditionally the year before and that there had been no adverse findings against him.

On its part, the Central Bank argued before court that a circular of the Ministry of Finance, which stipulated that extensions beyond the age of fifty eight had to be referred to the Ministry of Finance and would be approved only if clear reasons were given to the Minister as to why the service of such officer was deemed to be essential, applied to the Central Bank. Pattiwidana's services were not considered essential beyond the age of fifty eight and his extension was therefore not recommended to the Minister. The Rules of the Monetary Board dealing with the employment of the officers of the Central Bank did not, however, contain any such stipulations or prescribe referral to the Ministry of Finance. The Court took the view that these Rules, which gave a discretion to the Board with regard to extensions of service and made the decision purely the decision of the Board, prevailed over the Ministry circular. Given the context in which the application for extension was made, it should have been given as a matter of course. Its refusal was thus also ruled to have been a violation of Pattiwidana's right to equality before the law.

What is pertinent for the Central Bank in particular but also heads of all state institutions in general, is the reminder by the Supreme Court in this connection that;
"The views of the Minister, the Ministry or the Secretary are not to be imposed on the Board by directions and circulars; they are only to be made known to the Board through the Secretary at the Boardroom; having considered those views, the ultimate decision is for the Board."

The reason why the Supreme Court took this view is commonsensical. If Ministers had the power to determine conditions of employment, including extensions, public servants would to that extent, be dependant upon the Minister and that would affect their independence as well as the integrity of the institution in question. It is this reasoning that continues to be of immediate relevance to the public service at this moment in time.

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