INTRODUCTION

Natural justice says that one who decides should hear the case or he who hears the case should
decide.
In ordinary judicial Proceedings the person who hears decides in the judicial proceeding, thus,
the decision is the decision of the specific authority. But in many of the administrative
proceedings, the decision is not of one man or one authority, i.e., it is not the personal decision of
any designated officer individually. It is treated as the decision of the concerned department.
Such decision is called institutional decision. In such decision, often one person hears and
another person decides. In such decision there may be division in the decision-making process as
one person may hear and another person may decide.
An institutional decision of an administrative agency is a decision made by an organization and
not by solely by agency heads. A trial judges decision is personnel; the judge hears evidence and
arguments and decides the case. The strength of institutional decision springs from superiority of
group works-from internal checks and balances, from cooperations among the specialists in
various disciplines. The weakness of institutional decision is its anonymity, its dissipated
responsibility, its partial or complete rejection of idea that the one pro purports to decide must
consider the record.
In England, in the case of Local Government Board v. Arlidge,1 the Local Government Board
passed an order closing the defendant s dwelling house on the ground that it was unfit for human
habitation. The hearing was given by the Town Planning Inspector and the decision was given by
the Local Government Board. The defendant challenged the decision of the Board on the ground
that the authority who actually decided the case did not hear and, thus, there was violation of the
principle that one who hears must decide, i.e., there was Violation of the rule of fair hearing. The
House of Lords rejected the challenge and held that there was no violation of the rule of fair
hearing and the order was valid, The House of Lords held that in. entrusting the power to
Government department, Parliament must have intended that the department Should act in its
normal manner and should be able to take decision without making public its papers and without
having to conduct itself like a court of law. The minister is entrusted with large volume of works.
Unlike a judge in a court, he is not only at liberty but it is compelled to rely on the assistance of
his staff and , therefore, when a department is directed to dispose of an appeal, that does not
mean that any particular official of the department is to dispose it of.

1 (1915) A.C. 120.

RULE OF NATURAL JUSTICE

Justice can be divided into legal justice and natural justice. Legal justice means that justice,
which is governed by law of state. However, there is no precise definition of natural justice. That
is why, different jurists have given is different definitions. Better explanation of definition of
natural justice can be that natural justice means that justice, which is based on natural ideals and
human values.
Institutional decision is work on the basic principle of natural justice. The aim of the rules of
natural justice is to secure justice or to put it negatively miscarriage of justice. These rules can
operate only in areas not covered by law validity made. In other words, they supplement law. The
rules of natural justice are not embodied rules. What particular rules of natural justice should
apply to a given case must depend to a great extent on the facts and circumstances of the case,
the framework of the law under which the enquiry is held and the constitution of the tribunal
appointed for the purpose.
The principles of natural justice that no man should be condemned unheard intends to prevent
the authority from acting arbitrarily affecting the rights of the concerned person. It is the
fundamental rule of law that no decision should be taken which will affect the right of any person
without first being informed of the case and giving him an opportunity of putting forward his
case.2 Duty to give reasonable opportunity to be heard will be implied from the nature of the
function to be performed by the authority which has the power to take punitive or damaging
action. Even executive authorities which take administrative action involving any deprivation of
or restriction on inherent fundamental rights of a citizen, must take care to see that justice is not
only done but manifestly appears to be done. They have to act in a manner which is patently
impartial and meets the requirements of natural justice. Just, fair and reasonable action is an
essential inbuilt of natural justice. The principles of natural justice are part of Article 14 and
therefore rule of procedures comes as much in the purview of Article 14 as any rule of the
substantive law.3
It is noted that the principles of natural justice do not apply in legislative actions. 4 It is also to be
noted that the natural justice rule can be excluded by statute but if the statute gives such a right, it
cannot be taken away by the Court on the ground of practical convenience.
2 D.K. Yadav v. J.M.A. Industries limited, (1993) 3 SCC 267
3 State of west Bengal v Anwar Ali Sarkar, AIR1952 SC 52; D.K. Yadav vs. J.M.A.
industries ltd, ibid
4 W.B. Electricity Regulatory Commission v. C.E.S.C. Ltd., AIR, 2002 S.C. 3588
(Second suppl)

At present, the Courts give much emphasis on the concept of fairness. The concept of fairness
requires fairness in action of the administration whether the action is judicial, quasi-judicial or
administrative. The administrative inquiry and judicial or quasi-judicial inquiry both intend to
arrive at a just decision and, therefore, both the administrative and judicial or quasi-judicial
authorities are required to observe the principle of fair play or fairness in action, it is now a well
established rule that every power should be exercised reasonably and not arbitrarily.
Consequently, both the administrative and judicial or quasi-judicial powers are required to be
exercised justly and fairly and not arbitrarily and capriciously. Supreme Court has made it clear
that in the absence of contrary indication in statute, procedural fairness is an implied mandatory
requirement to prevent arbitrary action unless the statute confers wide power coupled with wide
discretion on the authority.5 However, the doctrine of fairness cannot be invoked to alter express
term; of contract of statutory nature.6 The terms fairness and natural justice are used
interchangeably.7
In a case8 Supreme court made it clear that even the administrative authorities are bound to act
fairly.
RULE OF FAIR HEARING
The concept of the rule of fair hearing is purely based on the Latin maxim audi alteram partem
i.e., the rule of fair hearing. It lays down that no one should be condemned unheard. It is the first
principle of the civilized jurisprudence that a person facing the charges must be given an
opportunity to be heard, before any decision is taken against him. Hearing means fair hearing.
The norms of reasonableness of opportunity of hearing vary from body to body and even case to
case relating to the same body. The components of fair hearing are not fixed but are variable and
flexible. Their scope and applicability differ from case to case and situation to situation.

In the 1970 case of A. K. Karaipak v. Union of India 9 , the Supreme Court made a statement that
the fine distinction between the quasi-judicial and administrative function needs to be discarded
for giving a hearing to the affected party. Before the Karaipaks case, the court applied the
5 Rash Lal Yadav v. State of Bihar, (1994) 5 SSC 104
6 Assistant excise commissioner v. Issac Peter, (1994) 4 SSC 104
7 Jain & jain, Principles of administrative law, page 146
8 State Financial Corporation v. Jagdamba Oil Mills, AIR 2002 SC 834
9 (1969) 2 SCC 262

natural justice to the quasi-judicial functions only. But after the case, the natural justice could be
applied to the administrative functions as well.
Every individual has the right to be hear before the judging authority. There are such rights given
to an individual in regards of obtaining natural justice because natural justice is a universal
phenomenon which entertain by either of the individual. Thus the institutions before giving
decisions they bounded by the rule of fair hearing by the virtue of natural justice.

SIGNIFICANCE OF INSTITUTIONAL DECISION

In U.S.A., in the Case of Morgan v. U.S.,10 the principle one who decides must hear has been
considered thoroughly. In this case, the statute empowered the Secretary of Agriculture to make
an Order fixing the maximum rate for buying and selling livestock at the Kansas City Stock
Yard. The statute required the Secretary to act after full hearing. The Secretary did not personally
hear or read any of the evidence presented by the petitioner. The hearing was given by the
subordinate officer but the final order fixing the maximum rate came from the Secretary. The
order of the Secretary was quashed by the Court. The court observed that the duty of decision
was that of the Secretary and therefore he was required to have addressed himself to the evidence
and have conscientiously reached the conclusion which he deemed it to justify. The Secretary
was required to consider and appraise the evidence which justified the decision given by him.
The duty to decide as has been observed by the court, cannot be performed by one who has not
considered the evidence or argument. It is not an impersonal obligation. It is a duty akin to that
of a judge. The one who decides must hear. The court has made it clear that the hearing of
evidence and argument. If the one who determine the facts which underlie the order has not
considered the evidence the evidence or argument, manifest that the hearing has not been given.
The Administrative Procedure Act, 1946, makes provisions with respect to the hearing and
decision also. it provides for positive decision from the person who actually receives the
evidence. Where the decision-maker does not himself preside at the reception of the evidence,
then the hearing officer is required to make the initial or recommended decision along with the
reasons therefore. He is required to mention the reason, for giving a particular weight to the
testimony of the witness. Before final decision by the authority, the parties are given the
opportunity to submit written argument. The Act contains several provisions for exercising the
impartiality of the hearing officers. They are called Administrative Law judges.
In India in Gullapalli Nageshwara Rao v. A.P. State Road Transport Corporation 11 , in the
Supreme Court the hearing by one person and decision by another person has been held to be
105. 298 U.S. 468 (1936)

against the rule of fair hearing. ln this case, the Andhra State Transport Undertaking prepared and
published a scheme for nationalization of the Motor Transport. The Transport Department invited
the objections against the scheme. The objections were heard by the Secretary of the Transport
Department and the Scheme was approved by the Chief Minister, The order of the Chief Minister
approving the scheme was quashed by the Supreme Court on the ground that the divided
responsibility of hearing and deciding violated the rule of fair hearing. The Act involved in the
Case of Gullapulli I was amended and under this Amendment Act the Minister was required to
take decision upon the scheme. In Gullupalli II case 12 of the objections were feared by the
Minister and not by the secretary. The Court held that the Minister was competent to hear the
objection, although he was formal head of the Department.

ADVANTAGES OF INSTITUTIONAL DECISION

Some issues are complex requiring special skills, expertise, opinions and
views of a number of people rather than just one individual.
Ministers responsible to take decisions function through officers of his
department.
DISADVANTAGES OF INSTITUTIONAL DECISION

Decision making process becomes complex.

Clouds responsibility.
Makes decision making difficult to evaluate.

EFFECT OF BREACH OF NATURAL JUSTICE

Effect of Breach of Natural justice when the authority is required to observe the principles of
natural justice in passing an order but fails to do so, the general judicial opinion is that the order
is void. In England, in the case of Ridge v. Baldwin13, the Court held the decision of the authority
void on the ground of the breach of the rule of fair hearing, However, in Durayappah v.
Fernando,14 the order passed without observing the principle of natural justice was held to be
11 AIR 1959 SC 308
12 Gullapalli Nagesghwar Rao v. AP State Road Corporation, AIR 1959 SC 1376
13 (1994) A.C. 40

voidable and not void. In decision in Durayappah has been much criticized. Griffith and Street 15
have expressed the view that the failure to give a hearing renders a decision void and not merely
voidable and the contrary decision in Durayappah case cannot be regarded as a good English law.
At present, even in England, the judicial opinion appears to be in favor of the view that the order
passed or the decision given by the authority without observing the rule of natural justice will be
void.
In India, the position is well settled that the order passed in violation of the principles of natural
justice is void.

FAILURE TO GIVE REASONS

Where the reasons for the decision are not given to the person concerned reasons are not given to
the court, the order is quashed and the authority is directed by the court to examine the matter
afresh.
Where the reasons are not communicated to the person concerned that They are on record, in
some cases,16 the court has upheld the action but in some other cases, the court has not upheld it.
In Ajantha Industries v. Central Board of Direct Taxes,17 the Court has held that recording of
reasons on the file is not sufficient. It is necessary to give reasons to the person concerned. In this
case, the order was quashed on the ground that the reasons were not communicated to the person
concerned. The view expressed in this case appears to be better view. Reasons are for the benefit
of the party concerned and, therefore, they should be communicated to the person concerned and
they should not be confined to the record or file.

CONCLUSION
Administrative Law must allow institutional process to meld all of the skills, experience and
values in order to take full advantage of the administrative process but in must create order and
14 (1997) 2A.C. 337
15 ibid
16 Ahmedabad Municipality v. Ramanlal, AIR 1975 SC 1187; J.M.A. Industries v.
Union of India, AIR 1980 Delhi 200; Woolcombers of India v. Their Workmen, AIR
1973 SC 2758
17 ibid

awareness within the institutional making process. An institutional decision of an administrative

agency is a decision made by an organization and not by solely by agency heads, so people
should aware of the facts that they have right to hear their case. It is the rule of Natural Justice
and It is also legal right.

CASE LAWS
Local Government Board v. Arlidge
Reference -[1915] AC 120, [1914-15] All ER 1, 30 TLR 672
Coram: Lord Shaw
A right of appeal against the exercise of a statutory authority requires no general right to an oral
hearing before an administrative decision maker, and a hearing on the papers may be perfectly
fair for legal purposes.
Lord Shaw said:
The words natural justice occurs in arguments and sometimes in judicial pronouncements in
such cases. My Lords, when a central administrative board deals with an appeal from a local
authority it must do its best to act justly, and to reach just ends by just means. If a statute
prescribes the means it must employ them. If it is left without express guidance it must still act
honestly and by honest means. In regard to these certain ways and methods of judicial procedure
may very likely be imitated; and lawyer-like methods may find especial favor from lawyers. But
that the judiciary should presume to impose its own methods on administrative or executive
officers is usurpation. And the assumption that the methods of natural justice are ex necessitate
those of Courts of justice is wholly unfounded. This is expressly applicable to steps of procedure
or forms of pleading. In so far as the term natural justice means that a result or process should

be just, it is a harmless though it may be a high-sounding expression; in so far as it attempts to

reflect the old jus natural it is a confused and unwarranted transfer into the ethical sphere of term
employed for other distinctions; and, in so far as it is resorted to for other purposes, it is
vacuous.

Gullapalli Nageshwara Rao v. A.P. State Road Transport Corporation

Equivalent citations: 1959 AIR 308, 1959 SCR Supl. (1) 319
Facts:
In India, the SC dealt with the question of official bias in this case. The facts of Gullapalli
Nageshwara Rao v AP State Road Transport Corporation , which is known as first Gullapalli
case, are as follows: the petitioners were carrying on motor transport business for several years in
Krishna district of Andhra Pradesh. The state transport undertaking published a scheme for
nationalization of motor transport in the state from the date to be notified by the state
government. It invited objections to the scheme. The petitioners, among others filed their
objection to the scheme. The secretary of transport department gave a personal hearing to the
objections and heard the representations made on behalf of the state transport undertaking. The
entire material gathered by him was placed before the Chief Minister who approved the scheme.
The approved scheme was subsequently published.
Issues
1. Whether a statute confers power on authority and imposes a duty on it to be a judge of its own
cause or decide a dispute, which has official bias, the doctrine of bias is qualified to the extent of
the statutory authorization?

2. Whether the State Government, in the present case, acted in violation of the principles of
Natural Justice?
3. Whether the Chief Minister by his acts and speeches disqualified himself to act for the State
Government in deciding the dispute?

This case is noteworthy as the Supreme Court made an exception by rejecting official bias and
impliedly applied the doctrine of necessity. The doctrine of necessity got express approval in the
case Ashok Kumar Yadav v State of Haryana, 1987. Further, the doctrine of absolute necessity
was applied in the case Election Commission of India v. Dr. Subramaniam Swamy, 1996.
Since Gullapalli I, the SC has continuously diluted the stance, which it has adopted in this case.
For instance in Gullapalli II the court didnt object to the procedure that the minister heard the
objections in place of secretary, as he was not a part and parcel of the department, which is
concerned in making the policy. According to the court, secretary is a part of department while
the minister is only primarily responsible for the disposal of the business pertaining to that
department. In subsequent cases the Supreme Court appears to have further relaxed its attitude
on matters regarding disqualification, which arises from policy bias, and the court has shown a
further liberal approach in this respect from the departmental point of view.