CHAPTER - 1

INTRODUCTION

1.1 Introduction

The term "principle of natural justice" is derived from the Latin word "jus

natural," and although it is not codified, it is closely tied to common law and moral principles.

It is a natural law that has nothing to do with any statute or constitution. All inhabitants of

civilised states place the highest value on adherence to the natural justice principle. The

Supreme Court issued its directive with the passage of time and the formation of social, just,

and economic statutory protection for workers during the early days of fair practise, when

industrial regions were governed by a strict and rigid law to hire and fire.

Making an informed and fair judgement regarding a specific matter is known as

natural justice. Sometimes, the reasonable decision is irrelevant; what important is the process

and the participants in arriving at the reasonable decision. It is not constrained by the idea of

"fairness," and it comes in a variety of hues and tones depending on the situation. There are

three rules: -

The first is the "Hearing Rule," which provides that the party or person who will

be impacted by the judgement made by the expert panel shall be given a reasonable opportunity

to present his case and be heard.

Second, the "Bias Rule" generally states that an expert panel should be impartial

while making a judgement. The judgement should be made in a free and impartial manner that

can uphold the natural justice principle.

Thirdly, "Reasoned Decision," which describes an order, judgement, or other

court action made by the presiding authority on a justifiable and valid basis.
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 The principle of natural justice is a very old concept that dates back to ancient

times. This concept was also known to Greek and Roman people. Natural justice was

recognised in the days of Kautilya, arthashastra, and Adam. When Eve and Adam ate the fruit

of knowledge, according to the Bible, they were forbidden by the god. Eve was given a fair

chance to defend herself before the sentence was handed down, and the same procedure was

followed in the case of Adam. The concept of natural justice was later accepted by English

jurists. Natural justice is derived from the Roman words 'jus-naturale' and 'lex-naturale,' which

laid out the principles of natural justice, natural law, and equity.

This concept was introduced in India at an early stage. The court held in

Mohinder Singh Gill vs. Chief Election Commissioner that the concept of fairness should be

present in all actions, whether judicial, quasi-judicial, administrative, or quasi-administrative

in nature.

The doctrine of Natural Justice is no place managed under the Constitution of

India. In any case, the words, Justice Social, Economic and political ‟liberty of thought,

conviction, love is fuse in the Preamble of the constitution. Article 14 ensures equality under

the steady gaze of law and equal protection of law to every one of the citizens of India and

Article 21 ensures the right to life and liberty to every one of the people in India to protect

liberty and guarantee life with dignity, which is the rudimentary provision. Article 22

guarantees the right to natural justice and provision of chance of fair hearing to the captured

individual. Also, constitutional remedies are ensured under Article 32, 226, and 136 in the issue

relating to the violation of any of fundamental rights just as in the instances of hardship of the

principles of natural justice

Natural Justice is a significant concept in administrative law. The principles of

natural justice of fundamental rules of methodology are the preliminary premise of a decent

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administrative set up of any country. The concept and doctrine of Principles of Natural Justice

and its application in Justice conveyance framework isn't new. It has its place since the start of

justice conveyance framework. Natural justice is a statement of English common law, which

includes a procedural prerequisite of decency. It is a significant concept in administrative law.

In the expressions of Justice Krishna Iyer Natural justice is an unavoidable reality of secular

law where an otherworldly touch breathes life into legislation, legislation and adjudication to

make reasonableness an ideology of life. It has numerous shading and shades, numerous

structures and shapes. 1 It is no uncertainty, a procedural necessity yet it guarantees a solid

protect against any Judicial or administrative; order or action, unfavorably influencing the

considerable rights of the people. Various jurists have depicted the principle in an unexpected

way. Some called it as the unwritten law (jus non scriptum) or the law of reason. It has,

nonetheless not been discovered to be equipped for being characterized, yet a few jurists have

depicted the principle as an extraordinary acculturating principle proposed to contribute law

with reasonableness to get justice and to forestall premature delivery of justice. With the entry

of time, some principles have developed and solidified which are all around perceived

principles of natural justice.

Natural Justice is a significant concept in administrative law. The term natural

justice connotes essential principles of justice, which are made accessible to everybody

defendant during preliminary. Principles of natural justice are established on reason and edified

public policy. These principles are embraced to conditions of all cases. Such principles are

materialto choices of every legislative office, councils and decisions of all courts. In the present

world the significance of principle of natural justice has been acquiring its strength and it is

presently the embodiment of any legal framework. Natural justice rules are not codified laws.

It's anything but conceivable to characterize absolutely and deductively the articulation 'natural

justice'. They are essentially common – sense justice which are inherent the soul of individual.
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They are in light of natural beliefs and qualities which are all inclusive in nature. ' Natural

justice' and 'legal justice' are substances of 'justices' which should be gotten by both, and at

whatever point legal justice neglects to accomplish this reason, natural justice must be brought

in guide of legal justice. Rules of natural justice have created with the development of human

progress. It's anything but the creation of Constitution or humankind. It started alongside

mankind's set of experiences. To ensure himself against the overabundance of coordinated

force, man has consistently spoke to somebody which is not been made by him and such

somebody must be God and His laws, Divine law or Natural law, to which all worldly laws

should and actions should adjust. It is of 'higher law of nature' or 'natural law' which suggests

decency, sensibility, equity and fairness.

The main principle is that 'No man will be a judge in his own motivation' for

example to say, the deciding authority should be unprejudiced and without bias. It Implies that

no man can go about as a judge for a reason where act naturally has some Interest, might be

pecuniary or something else. Pecuniary interest manages the cost of the strongest proof against

impartiality. The accentuation is on the objectivity in dealing with and deciding a matter.

Justice Gajendragadkar, as then, at that point he was, observed in a case revealed in M/s

Builders Supply Corporation v. The Union of India and others2 , "clearly pecuniary interest,

howsoever little it could be, in a topic of the proceedings, would completely disqualify a

member from going about as a judge". Ruler Hardwick observed in one of the cases, "In a

question of so delicate a nature, even the presence of evil is to be stayed away from." Yet it has

been set down as principle of law that pecuniary interest would disqualify a Judge to choose

the matter despite the fact that it's anything but demonstrated that the decision was in any way

influenced. This is consequently a question of faith, which a common man should have, in the

deciding authority.

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 The principle is appropriate in such cases additionally where the deciding

authority has a few personal interest in the matter other than pecuniary Interest. This might be

looking like a few personal relationships with one of the parties or hostility against any of them.

In one of the cases orders of punishment was held to be vitiated, as the officer who was in the

situation of a complainant/accuser/witness, couldn't go about as an enquiry officer or punishing

authority. There might be a possibility, consciously or unconsciously to maintain as Enquiry

Officer what he claims against the delinquent officer.

In one of the selections, which was held for the post of Chief Conservator of

Forest, one of the members of the Board was himself a contender for the post. The entire cycle

of selection was held to be vitiated as the member would be a judge in his own cause

For another situation revealed in Manak Lal v. Prem Chand,5 where a

committee was comprised to enquire into the grumbling made against an Advocate, the

Chairman of the Committee was one who had once showed up before as counsel for the

complainant. Constitution of such a committee was held to be terrible and it was noticed, "in

such cases the test isn't whether truth be told the bias has influenced the Judgment; the test

consistently is and should be whether a prosecutor could sensibly capture that a bias credited

to a member of the Tribunal may have worked against him in an official choice of the Tribunal."

However, such objections about the constitution of committees or Tribunals comprising of

members having bias ought to be accepted at the most punctual open door before beginning of

the proceedings in any case, ordinarily, It would be considered as waiver to that complaint.

In the Constitution of India, no place the expression Natural Justice is utilized.

Notwithstanding, golden string of natural justice sagaciously went through the collection of

Indian constitution. Preamble of the constitution includes the words, 'Justice Social, Economic

and political' liberty of thought, belief, worship... What's more, equality of status and of chance,

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which not just guarantees fairness in social and economic exercises of the people yet

additionally goes about as shield to individual’s liberty against the arbitrary activity which is

the base for principles of Natural Justice.

Aside from preamble Article14 guarantees equality under the steady gaze of law

and equal protection of law to the resident of India. Article 14 which strike at the root of

arbitrariness and Article 21 guarantees right to life and liberty which is the fundamental

provision to protect liberty and guarantee life with dignity. Article 22 guarantees natural justice

and provision of fair hearing to the captured individual. Directive principles of state Policy

specially Article39-A deals with social, economic, and politically backward sections of people

and to accomplish this object for example this part guarantee free legal aid to impoverished or

disabled people, and Article 311 of the constitution guarantees constitutional protection to civil

servants. Moreover Article 32, 226, and 136 gives constitutional remedies in cases violation of

any of the fundamental rights including principles of natural justice. With this short

acquaintance creator attempts with analyze a portion of the significant provision containing a

few elements of Principle of Natural Justice.

Natural justice is in an important concept in administrative law. The principles

of natural justice or fundamental rules of procedure for administrative action are neither fixed

nor prescribed in any code. They are better known than described and easier proclaimed than

defined. It has many colours and shades and many forms and shapes. According to De Smith,

the term “natural justice” expresses the close relationship between the common law and moral

principles and it has an impressive ancestry. It is also known as “substantial justice”,

“fundamental justice”, “universe justice” or fair play in action”. It is a great humanizing

principle intended to invest law with fairness, to secure justice and to prevent miscarriage of

justice.

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 Natural Justice has always been an important facet in the subject of

Administrative Law. The term “Natural Justice” stands for basic principles of justice, that a

litigant has access to during trial. It has had a place in the justice system since the beginning of

time. As defined by Lord Esher M.R.- ‘the sense of what is right and wrong’. In a famous

English decision in Abbott vs. Sullivan, it is stated that “the Principles of Natural Justice are

easy to proclaim, but their precise extent is far less easy to define”. It has been stated that there

is no single definition of Natural Justice and it is only possible to enumerate with some certainty

the main principles. During the earlier days, the expression Natural Justice was often used

interchangeably with the expression natural Law, but in the recent times a restricted meaning

has been given to describe certain rules of Judicial Procedure. This paper will talk about the

concept of natural justice, its origin, its principles and more importantly, its evolution from the

beginning of time, and what it stands for now.

In English law, natural justice is technical terminology for the rule against bias

(nemo iudex in causa sua) and the right to a fair hearing (audi alteram partem). While the

term natural justice is often retained as a general concept, it has largely been replaced and

extended by the general "duty to act fairly".

The basis for the rule against bias is the need to maintain public confidence in

the legal system. Bias can take the form of actual bias, imputed bias, or apparent bias. Actual

bias is very difficult to prove in practice whereas imputed bias, once shown, will result in a

decision being void without the need for any investigation into the likelihood or suspicion of

bias. Cases from different jurisdictions currently apply two tests for apparent bias: the

"reasonable suspicion of bias" test and the "real likelihood of bias" test. One view that has been

taken is that the differences between these two tests are largely semantic and that they operate

similarly.

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 The right to a fair hearing requires that individuals should not be penalized by

decisions affecting their rights or legitimate expectations unless they have been given prior

notice of the case, a fair opportunity to answer it, and the opportunity to present their own case.

The mere fact that a decision affects rights or interests is sufficient to subject the decision to

the procedures required by natural justice. In Europe, the right to a fair hearing is guaranteed

by Article 6(1) of the European Convention on Human Rights, which is said to complement

the common law rather than replace it.

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 CHAPTER – 2

ORIGIN AND DEVELOPMENT OF NATURAL JUSTICE

2.1 Origin and Development of Natural Justice

Natural justice has discovered its root in the early Greek and Roman empires,

being recognized even in Kautilya's Arthashastra. In a larger number of ways than other the

Indian concept of dharma is similar to the concept of natural justice. All organs of the State

including executive, legislative and judicial were kept up by the king. In this way the obligation

was on the king to reform and make the Code of law to keep up peace and equality in the State.

Indian emperor Ashok set out the significant rules regarding what nature of justice ought to be.

He had extraordinary worry for reasonableness in the activity of justice, alert and tolerance in

use of sentences, and so forth.

Similarly the great Babylonian king Hammurabi ensured the obligations of

officials by ruling that “any judge who reaches an incorrect decision is to be fined and removed

from the bench permanently”. As it is apparent, principles of natural justice are not a new

invention, but also, it isn’t a product of man either. It originated from our core moral conscience

and has been since built upon by several philosophers, jurists, kings and teachers. Aristotle,

who is considered the biggest proponent of Natural justice, holds that, as support for a virtuous

existence that advances lives of individuals and promotes perfect community, people should

make use of practical wisdom or active reason to be consistent with a virtuous existence. Later

on, the concept of natural justice was accepted by the English jurist. The word natural justice

is derived from the Roman word ‘jus-naturale’ and ‘lex-naturale’ which planned the principles

of natural justice, natural law and equity.

“Natural justice is a sense of what is wrong and what is right.” In India, this

concept was introduced at an early time. In the case of Mohinder Singh Gill vs. Chief Election
9
Commissioner, the court held that the concept of fairness should be in every action whether it

is judicial, quasi-judicial, administrative and or quasi-administrative work.

The term “natural justice” expresses the close relationship between the common

law and moral principles and describes what is right and what is wrong. It has an impressive

history. It has been recognized from the earliest times: it is not judge-made law. In days bygone

the Greeks had accepted the principle that “no man should be condemned unheard”. The

historical and philosophical foundations of the English concept of natural justice may be

insecure, nevertheless they are worthy of preservation. Indeed, from the legendary days of

Adam and of Kautilya’s Arthashastra, the rule of law has had this stamp of natural justice which

makes it social justice. The rules of natural justice were placed so high that it was declared that

“no human laws are of any validity, if contrary to this”, and that a court of law could disregard

an Act of Parliament if it is contrary to natural law. The origin and development of equity in

England owed much to natural law. The concept of natural law and natural rights influenced

the drafting of the US Constitution. It also provided a basis for international law and

international conventions, covenants and declarations.

In India it is said that principles of natural justice are of very ancient origin and

were known to the Greek and Romans. Later on, the principles of natural justice were

strengthened by judges of common law courts in England. After Independence, the same

common law traditions were continued in law courts of India. However, these lofty ideals of

justice were not alien, and are not only proclaimed but well adhered by the judges in ancient

India. In ancient India, foremost duty of a judge was to maintain integrity which included

impartiality and total absence of bias or attachment. The concept of integrity was given very

wide meaning and the judicial code of integrity was very strict, Brihaspati Says: “A judge

should decide cases without any consideration of personal gain or any kind of personal bias;

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his decision should be in accordance with the procedure prescribedby the texts. A judge who

performs his judicial duties in this manner achieves the same spiritual merit as a person

performing a Yajna.” Further, the judges and counsellors guiding the King during the trial of a

case were required to be independent and fearless and prevent him from committing any error

or injustice. Katyayana says, "If the king wants to inflict upon the litigants (vivadinam) an

illegal or unrighteous decision, it is the duty of the judge (samya) to warn the king and prevent

him.”

Along with the independence and impartiality of the judiciary, procedures

relating to the conduct of proceedings are also well established in ancient India and there was

little or no chance to misuse the provision and decide the matter without giving sufficient

opportunity of being heard.

The idea of Principle of natural justice is not another idea. Natural justice has

an impressive history which has been perceived from the earliest times. The Greeks had

acknowledged theprinciple that 'no man should be denounced unheard'. It was first applied in

'Nursery of Eden' where opportunity to be heard was given to Adam and afterward giving him

punishment. Some of the evidences of natural justice is also found in Roman law. Principle of

natural justice has also been found in the Kautilya's Arthsastra, Manusmriti and unique text.

Aristotle, before the era of Christ, spoke of such principles calling it as universal law. Justinian

in the fifth and sixth Centuries A.D. called it "'juranaturalia" for example natural law.

In India the principle is predominant from the old times. We discover it Invoked

in Kautllya's, Arthashastra. In this unique circumstance, para 43 of the judgment of the Hon'ble

Supreme Court In the case of Mohinder Singh Gill v. Boss Election Commissioner6 , might be

usefully quoted:

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 "Undoubtedly, natural justice is an unavoidable aspect of secular law where an

otherworldly touch charges legislation, organization and adjudication, to make reasonableness

a belief of life. It has numerous tones and shades, numerous structures and shapes and, save

where valid law rejects, it applies at the point when individuals are influenced by acts of

authority. It is the bone of solid government, perceived from most punctual occasions and not

a spiritualist confirmation of judge-made law. Undoubtedly from the legendary long stretches

of Adam and of Kautllya's Arthashastra-the rule of law has had this stamp of natural justice,

which makes it social justice. We need not go into these deeps for the present but to demonstrate

that the roots of natural justice and its foliage are honorable and not modern. Today its

application should be supported by current legislation, case law or other Extant principle, not

the ancient harmonies of legend and history. Our jurisprudence has endorsed its pervasiveness

even like the Anglo-American framework."

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 CHAPTER - 3

OVERVIEW AND PRINCIPLES OF NATURAL JUSTICE

3.1 Judiciary Under Indian Constitution

Judiciary under Indian Constitution plays a star vital job. Its achievement has

been significant in all areas of the nation's life. As it is one of the powerful establishments of

the world, it chooses cases contacting all facts of human life and relationship. It is the guardian

of the human rights, protector of the constitution and promoter of the peace, cordiality and

balance between various organs of the government. The Constitution of India which was

drafted by the Constituent Assembly and which came into power on 26th January 1950 contains

number of provisions that deal with structure, functions and power of the judiciary. It presented

a brought together system in all the States and Union Territories. It's anything but a three-tier

judicial system viz. the Supreme Court, the High Courts in each state and Union Territories.

The level of intercession of judiciary may rely upon the legal system continued

in Different countries of the world. For example, in Britain, as there is no written Constitution,

the Judiciary may practice just restricted powers of judicial review Vis-a Vis the delegated

legislation and ministerial action of the government. In this way, the law of the judiciary in

Britain is of law application and law interpretation.

In USA, the judiciary is considered as the supreme body over the legislature and

executive. The Constitution of USA enables the judiciary to check the other two organs on the

off chance that they enjoy any overabundance.

In any case, in India, the judiciary has come to practice vast powers of Judicial

Review in regard of the legislative and executive functions of the State and of the judicial

actions of the Judiciary. The Supreme Court and High Court in India not just act as the arbiters

13
to decide or resolve the questions that may arise between the Center and State yet it also ensures

and implement the fundamental rights of the residents against arbitrary action of the States.

They also decipher the laws made by the legislature. The decision of the Supreme Court is final

if by any act of the legislature or Executive, any Fundamental rights or human rights are

abridging.

In any case, in India, the judiciary has come to practice vast powers of Judicial

Review in regard of the legislative and executive functions of the State and of the judicial

actions of the Judiciary. The Supreme Court and High Court in India not just act as the arbiters

to decide or resolve the questions that may arise between the Center and State yet it also ensures

and implement the fundamental rights of the residents against arbitrary action of the States.

They also decipher the laws made by the legislature. The decision of the Supreme Court is final

if by any act of the legislature or Executive, any Fundamental rights or human rights are

abridging.

In nutshell, the judiciary by and large performs one or a significant number of

the accompanying functions in constitutional democracies: -

1. Interpreting the constitution with due distinction to the wishes of the framers of the

constitution

2. Upholding the federal principle of keeping up with the harmony between the different

organs of the public authority or among center and the states.

3. Guarding and protecting the fundamental rights of the citizens.

4. Applying and interpreting the laws made by the legislature.

5. To check and equilibrium the legislative or executive actions of the public authority.

6. Under Article 32 and 226 the Supreme Court and the High Court individually has the

power to issue writs or orders for accomplishing the destinations of those articles.

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 7. Through Public Interest Litigations, Judiciary has the power to get some information

about the execution of the schemes run by the public authority. For instance, in

Direction in Common Cause v. Association of India, the Apex Court set down

directions for how blood ought to be gathered, put away and given for bonding and how

blood bonding could be made liberated from risks.

3.2 Principles of Natural Justice: Explained

Nemo debet esse judex in propria causa or rule against bias: means ‘when there

is a dispute between two parties judge shall always be the impartial third party’. It means that

the judge shall not be a relative, a friend, an enemy, or otherwise related to the subject matter

of the litigation. The word ‘bias’ literally means ‘anything which tends or may be regarded as

tending to cause such a person to decide a case otherwise on evidence’. Let us take an

illustration to understand the concept quickly.

Illustration-1: ‘A’ borrowed Rs. 10000/- from ‘B’ on the condition of

repayment within six months, however, after six months ‘B’ refuses to pay. ‘A’ the creditor,

approached civil court for recovery of the said debt. ‘C’ a good friend of ‘A’ happens to be the

judge of that civil court. Do you think that ‘C’ the civil court judge is fit to be a judge in this

case?

Answer is ‘NO’, for the reason that to be a judge one must be impartial and

independent, in this case even though ‘C’ may rightly decide the case but, it is against the

cardinal rule of natural justice i.e. “justice should not only be done but should manifestly and

undoubtedly be seen to be done,” (Lord Chief Justice Hewart: R v Sussex Justices, ex p

McCarthy). Accordingly, “no man can be a judge in his own cause,” (Nemo judex in causa

sua). Therefore, the rule against bias strikes against those influences which may improperly

affect the judge in arriving at a decision which can be considered as fair in all sense of the term.

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So, the minimal requirement of natural justice is that the authority must be composed of

impartial persons acting fairly, without prejudice and bias.

There are four kinds of bias, they are:

(i) Personal bias

(ii) Pecuniary bias

(iii) Subject matter bias, and

(iv) Departmental bias

(i) Personal Bias: This bias arises when the deciding authority/judge is related

to either of the parties to the litigation (which we already discussed in above illustration 1).

Such a relation may be personal, fiduciary, or professional and maybe friendship or hostility.

Illustration-2: ‘B’, a wife filed a divorce petition in family court on the grounds

of cruelty on the part of the husband ‘A’. As the matter was not yet finally decided by the Court

they were living under the common roof. That day, during dinner, a quarrel broke out between

them and the wife in the course of the heated argument told the husband that as the judge of

the family court was her uncle’s friend she is sure to get the divorce!

Now, the question is, whether the judge of the family court is disqualified to be

a judge in this case or can husband ‘A’ set aside such order, if passed, on the ground of bias?

The answer is YES because there is a personal bias. Accordingly, personal bias arises when

there is a relationship between either of the party to the litigation and the deciding authority.

(ii) Pecuniary Bias: Deciding authority is disqualified on the ground of

pecuniary bias if it has a financial interest in the subject matter of the litigation.

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 Illustration-3: ‘A’ multinational company from India has a case pending before

the Supreme Court of India, affecting the financial interest of the company. The matter was

pending before ‘X’ a judge of the Supreme Court, who has 2% shares in the company ‘A’.

In this case, ‘X’ judge of the Supreme Court is not eligible to be a judge (in this

case) because he is having a pecuniary interest in the matter. In this regard, let us take the

Supreme Court judgment in the Jeejeebhoy v. Assistant collector, Thana (AIR 1965 SC 1096),

in the instant case the Chief Justice reconstituted the bench when it was found that one of the

members of the bench was a member of the cooperative society for which the land was

acquired. To understand the pecuniary bias more clearly you may refer to Dr Bonham’s case.

(iii) Subject matter bias: This bias arises, where the judge/deciding authority

is interested in the subject matter of the litigation. When the judge is having an interest in the

subject matter there arises a conflict between his duty and his interest, under the circumstance,

it is difficult to believe that he acted impartially. Accordingly, to save the confidence of people

in the adjudicatory process, such proceedings need to be set aside.

Let us understand the subject matter bias more clearly by analysing the

judgement of the Supreme Court in A. K. Kraipak v. Union of India (AIR 1970 150), in this

case, one Naquishbund, who was the acting Chief Conservator of Forests, was a shortlisted

candidate for selection to the Indian Foreign Service and was also the member of Selection

Board. Naquishbund, did not sit on Board when his name was considered. His name was

recommended and he was selected by the Public Service Commission. Unsuccessful candidates

challenged his selection before the Supreme Court. Quashing the selection of Naquishbund,

the court observed: "it is against all canons of justice to make a man judge in his own case. It

is true that he did not participate in the deliberations of the committee when his name was

considered. But, then the very fact that he was a member of the selection board must have had

17
its own impact on the decision of the selection board... At every stage of his participation in

the deliberations of the selection board, there was a conflict between his interest and his duty."

In this case, the court explicitly held that where conflict arises between his duty and his own

interest the deciding authority should recuse, and such proceedings stand vitiated on the

grounds of bias.

(iv) Departmental or Official Bias: Only rarely will this bias nullify the

proceedings. Because mere general interest in the subject matter of the case, especially in an

administrative proceeding, does not affect the validity of the decision.

Illustration-4: ‘A’ a student misbehaved in the class, and a complaint was made

by the teacher in whose class he misbehaved. The Principal of the College constituted a

committee to inquire into the matter consisting of the three teachers of the same school who

were very good friends of the teacher who complained. Here, the accused (student) cannot

contend that there is a departmental bias.

The reason is very simple, if in administrative cases such contentions were

allowed, it will seriously halt the thousands of departmental/administrative proceedings and

such actions are necessary to enforce requisite institutional discipline and also the efficiency.

However, in extreme cases of departmental bias courts may vitiate the proceedings.

Illustration-5: Let us assume that the state government decided to nationalise

the road transport business, conferring the monopoly rights in favour of the Road Transport

Corporation owned by the state. Thousands of private players will be affected by the decision,

hundreds of objections would be filed with the Secretary of Transport Corporation (who is the

brain behind the plan). If anybody, let us say one ‘X’ is not satisfied with the remedy provided

by the Secretary, he can approach the law courts contending the departmental/official bias. As

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Secretary, as he is the author and executor of the nationalisation scheme and at the same time

acted as judge in resolving the complaints filed against the scheme.

In such situations, the law courts may admit the contention of the petitioner, as

the Secretary was allowed to act as judge in his own cause. The illustration is based on the SC

judgement in the Gullapalli Nageswara Rao v. A. P. S. R. T. C (AIR 1959 SC 308). Thus, in

exceptional cases, even departmental/official bias is a good ground to vitiate the proceedings.

Audi alteram partem or rule of fair hearing: is considered to be the first principle

of rule of law. This principle infers that the person against whom any action affecting his rights

is to be taken should be given a reasonable opportunity to defend himself.

Illustration-6: ‘A’ a student accused of malpractice in the examination was

suspended from appearing in the examination for one year. However, he was not allowed to

prove his innocence by presenting relevant evidence. Can we say that the decision of the

authority is justified? NO, because the rule of natural justice suggests that every person must

be allowed to defend himself, by producing evidence, or by cross-examination of the witnesses

of the other side.

It is very important to note that hearing means ‘fair hearing’ it must not be a

matter of mere formality. Therefore ‘fair hearing’ includes,

(i) Notice

(ii) Hearing

(iii) Cross-examination

(iv) Legal representation

(v) Receiving evidence in the presence of the concerned party

(vi) One who decides must hear, etc.

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 Let us briefly discuss these components of ‘fair hearing’ with the help of

illustration-6 (see above). In this illustration, the first requirement of a fair hearing is ‘notice’,

i.e. the authority must serve a proper notice specifying charges made against the student. Such

notice must contain details of time, place and nature of the hearing, and must provide sufficient

time to prepare his case. If not, such hearing is considered to be unfair.

After serving proper notice, on a specified date, ‘A’ must be heard (either orally

or through a written representation). If any evidence or witnesses were produced by the other

party, ‘A’ shall be allowed to cross-examine such evidence. For the reason that the cross-

examination is a potent weapon to elicit truth or falsity of the statement and trustworthiness of

the witness.

Generally, in law courts, parties may be represented through one’s legal

representative (Advocate) and this right of legal representation is considered to be the

fundamental right in India. Thus, legal representation in relation to a judicial proceeding is a

well established component of natural justice. But, in administrative cases, only where the

matter is too complicated or technical or party is illiterate or does not understand the legal

proceedings, under such exceptional circumstances the party is entitled to legal assistance.

Thus, in the above illustration, ‘A’ may not claim legal representation through a lawyer as a

matter of ‘fair hearing’.

However, all the evidence produced against ‘A’ must be received by the

authority in his presence and the same shall be communicated to him properly. Lastly, ‘A’ shall

be heard by the deciding authority i.e. if the Registrar of the University is vested with the power

to decide the matter, the hearing shall be given by the Registrar, and not by any other authority

like the Registrar (Exams). The reason being ‘one who decides must hear’, anything contrary

to it, especially in judicial proceedings violates ‘fair hearing’.

20
3.3 Reasoned Decisions or Speaking orders:

This is the recent addition to the principles of natural justice. It means, as judges

shall act according to the rule of law, they are duty bound to explain why and on what reasons

he/she decided the matter in a particular way. Along with being impartial and an adherent of

‘fair hearing’ the judge must also provide reasons for his decisions; as reasons are the link

between the order and the mind of the maker. A decision without reasons cannot be accepted

as fair, just and reasonable, and hence, such decision would be violative of Articles 14 (right

to equality) and 21 (right to life and personal liberty) of the Indian Constitution. Therefore, the

established norm of natural justice is that every judicial, quasi-judicial and administrative

authority acting judicially must supply reasons for their decision, which is termed as a reasoned

decision or speaking order.

Principles of Natural Justice in Indian Constitution In the Constitution of India,

nowhere is the expression ‘natural justice’ used. However, the golden thread of natural justice

sagaciously passed through the body of the Indian constitution. The preamble of the

constitution includes the words, ‘justice social, economic and political’ liberty of thought,

speech, expression, belief and worship, and equality of status and of opportunity, which not

only ensures fairness in social and economic activities of the people but also, shields individual

liberty against the arbitrary action. Apart from the preamble, Art 14 ensures equality before the

law and equal protection of the law to the citizens of India. Art 14 which strikes at the root of

arbitrariness and Art 21 guarantees right to life and liberty which is the fundamental provision

to protect liberty and ensure life with dignity. Art 22 guarantees natural justice and provision

of a fair hearing to the arrested person. Directive principles of state Policy especially Art 39-A

takes care of the social, economic and the politically backward sections of people and to

accomplish this object i.e. this part ensures free legal aid to indigent or disabled persons, and

21
Art 311 of the constitution ensures constitutional protection to civil servants. Furthermore, Art

32, 226, and 136 provides constitutional remedies in cases where there is a violation of any of

the fundamental rights, including principles of natural justice.

3.4 Article 14 Of Constitution of India:

Article 14 guarantees all citizens equality before law and equal protection of

law. It hinders any form of discrimination and forbids both discriminatory laws and

administrative action. Article 14 of Constitution of India, establishes to be safeguard against

any arbitrary or discriminatory State action. The sphere of equality as embodied in Article 14

has been expanding as a result of the judicial decisions. This Article laid down a general

preposition that all persons in similar circumstance shall be treated in a similar way both in

privileges and liabilities imposed.

Art 14 manifests in the form of following propositions: A law granting freehand

and unhindered power on an authority is dreadful for being arbitrary and discriminatory. Art.

14 illegalize prejudice in the definite exercise of any discretionary power. Art. 14, smacks at

arbitrariness in administrative action and guarantees fairness and equality of treatment.

In Delhi Transport Corporation v. DTC Mazdoor Union, the Apex Court held

that “the audi alteram parterm rule, in essence, enforce the equality clause in Article 14 of the

Constitution, is applicable not only to quasi-judicial bodies but also to an administrative order

adversely affecting the party unless the rule has been excluded by the Act in question.”

Similarly in Maneka Gandhi v. Union of India the Supreme Court had opined that Article 14

is an authority for the proposition that the principles of natural justice are an integral part of

the guarantee of equality assured by Article 14 an order depriving a person of his civil right

passed without affording him an opportunity of being heard suffers from the vice of violation

of natural justice.

22
 There are several cases in which Article 14 of the Constitution of India is

invoked in order to protect the individuals from the violation of natural justice and similarly in

Central Inland Water Transport Corporation Ltd v. Brojo Nath, an order of termination of

service of an permanent employee merely by issuing a three months was held to be invalid and

unconstitutional as being depriving the employee of the right and Protection under Art. 14. The

Court ruled that it would strike down, any unfair and unreasonable clause of a contract entered

into between parties who were not equal in bargaining power. And the Court furthrt held that

such an action was in conformity with the mandate of the “great equality clause in Art. 14.

In Cantonment Board, Dinapore v. Taramani Devi, in this case the Court

observed that the rule of Audi Alteram Parterm is an ingredient of Article 14 of the

Constitution. For the reason that Article 14 states “no order shall be passed at the back of a

person, prejudicial in nature to him, when it entails civil consequences” an in such a manner

Article 14 of the Constitution holds the element of Natural justice into it.

3.5 Article 21 Constitution of India:

The most significant expression under this Article is „procedure established by

law‟ the issue arise whether the above mentioned expression can be read as principles of natural

justice. For which, the Supreme Court of India in majority ruled that the word „law‟ under Art.

21 could not be read as rules of natural justice. Since, the rules of natural justice are vague and

imprecise and thus the Constitution could not be read as laying down an indistinguishable

standard.

Late Mr. Bhagawati J. stated, “the principle of reasonableness which legally as

well as philosophically is an essential element of equality or non-arbitrariness pervades art 14

like a brooding omnipresence”. Therefore, the procedure laid in Article 21 “must be right, just

23
and fair” and shall not be arbitrary, oppressive, otherwise, it would be no procedure at all and

the requirements under Art. 21 would not be fulfilled.

The Supreme Court has taken a massive inventive step forward in improving

the administration of criminal justice by suggesting that free legal support to poor prisoners by

the State undergoing imprisonment. When an accused is sentenced to imprisonment by a Court

and if the Accused is entitled to appeal against the order/judgment/decree, the Accused has the

right to claim legal aid and if he is unable to meet the expense, the State shall make all such

arrangements in order to provide legal aid. “Now, a procedure which does not make available

legal service to an accused person who is too poor to afford a lawyer and who would, therefore,

have to go through the trial without legal assistance, cannot possibly be regarded as

„reasonable, fair and just”. In India free-legal aid to differently able persons are considered to

be significant element of Natural Justice.

3.6 Article 22 Constitution of India:

This Article provides protection to arrested person from arrest and detention in

certain cases which within its sphere contains fundamental element of natural justice, Article

22 (1) and (2) grants the following fundamental rights upon a arrested person: i) Right to be

informed, instantaneously the grounds for arrest. ii) Right to consult and be defended by a legal

practitioner of his choice. iii) Right to be produced before the nearest magistrate within twenty-

four hours from arrest excluding of travel from the place of arrest to the Court of Magistrate.

iv) Right not to be detained in custody without the authority of the Magistrate beyond the period

of twenty-four hours from arrest.

3.7 Right To Be Informed of The Grounds of Arrest:

The primary object of this provision is that the arrested person shall be

communicated the ground for arrest. Since, on the knowledge of the grounds of arrest, the

24
arrested person shall make arrangements for necessary legal remedies and shall also make an

application before an appropriate court with Application for bail or also utilize the remedy of

approaching the High Court with a Writ of Habeas Corpus. The Apex Court observed that

Article 22 (1) of the Constitution of India represents a rule which has at all times regarded as

vital and fundamental for protection of personal liberty in all legal systems where the Rule of

Law prevails. Any such communicated grounds made to the arrested person shall be precise,

defined, clear and unambiguous, in any case if the grounds are not wholly unveiled to accused

than it shall amount to denial of „fair hearing‟ and ultimately shall result into violation of

Natural Justice. In re, Madhu Limaye the facts being; Madhu Limaye, Member of the Lok

Sabha along with several other persons were arrested. Madhu Limaye, one of the arrested

persons addressed a petition in the form of a letter to the Apex Court by invoking Article 32 of

the Constitution and thereby pointing out that he along with several other members had been

arrested but no ground for such an arrest was communicated. The Supreme Court observed that

Article 22 (1) embodies a rule which has always been regarded as vital and fundamental for

safeguarding personal liberty in all legal systems where the Rule of Law prevails. In Joginder

Kumar V. State of U.P. The Supreme Court observed that no arrest can be made because it is

lawful for the Police officer to do so. The existence of the power to arrest is one thing. Arrest

and detention in lock-up of a person can cause incalculable harm to the reputation and self-

esteem of a person. No arrest should be made by Police Officer without reasonable satisfaction

after some investigation as to the genuineness and bona fides of a complaint and a reasonable

belief both as to the person's complicity and even so as to the need to effect arrest. If an Accused

is sentenced to imprisonment, it is nearly unable to exercise the constitutional or statutory right

of appeal of the Accused, inclusive of special leave to appeal for want of legal assistance. The

court may judge the situation and consider from all angles whether it is necessary for the ends

25
of justice to make available legal aid in the particular case. This is the present position

pertaining to legal representation to the arrested person under Article 22(1).

3.8 Article 32, 226 and 227:

Article 32 and 226 of the constitution provides for remedies for violation of

fundamental Rights and as well as other statutory rights, Under Article 32 and Article 226 the

remedies can be exercised by seeking for orders for issuance appropriate Writ, Directions and

Orders. In U.P.Warehousing Corporation V. Vinay Narayan Vajpayee, the Court held that Writ

of certiorari or prohibition usually goes to a body which is bound to act fairly or according to

natural justice and it fails to do so. In the same manner where the decision is affected by bias,

personal, or pecuniary, or subject matter as the case may be considered as violation of principle

of natural justice. In such circumstances also writ of certiorari and prohibition can be issued

both Under Art 32 and 226. In Gullapalli Nageshwar Rao V. APSRTC the SC quashed the

decision of the AP Govt., nationalizing Road transport on the ground that the Secretary of the

Transport Department who was given a hearing was interested in the subject matter. Any order

made in violation of principles of natural justice is void ab-initio and is liable to be annulled

and cancelled. The Supreme Court in Nawabkhan Abbaskhan V.State of Gujarat held that an

order which infringes a fundamental freedom passed in violation of the audi alteram partem

rule is a nullity. When a competent court holds such official act or order invalid or sets it aside,

it operates from nativity i.e. the impugned act or order was never valid. Apart from Art.32 and

226, it is Art 227 which can be used by High Court as another extraordinary weapon to prevent

violation principles of natural justice in any of the lower courts or tribunals.

Art. 311 And Principles of Natural Justice:

Art 311 deals with removal, Dismissal or reduction in rank of persons employed

in civil capacities under the Union or State, though Art. 310 of the constitution adapts „doctrine

26
of Pleasure‟. The expression „reasonable opportunity of being heard‟ includes all the aspects

of the principles of natural justice and accordingly no dismissal, removal, or reduction of rank

of civil servant can be ordered without giving reasonable opportunity of being heard. In Punjab

National Bank vs. Kunj Behari Misra, the following question was raised: when the inquiry

officer, during the course of the disciplinary proceedings, comes to the conclusion that the

charges of misconduct against an official are not proved, then can the disciplinary authority

differ from that view and give a contrary finding without affording and opportunity to the

delinquent officer The Court has ruled that natural justice demands that the authority which

proposes to hold the delinquent officer guilty must give him a hearing. If the inquiry officer

olds the charges to be proved then the report has to be given to the delinquent officer who can

make a representation before the disciplinary authority takes further action prejudicial to the

delinquent officer.

3.9 Role of Judiciary

The Indian Constitution protects the citizens from any halfway judgment. That

is the reason supreme power is given to the Judiciary to settle on choices dependent on the rule

of law. The courts in India nor will be nor constrained by the government and they don't address

any political authority.

A. Separation of Power- This independence of Judiciary calls for 'Separation

of Power'. This fundamentally implies that both the lawmaking body and executive are not

permitted to meddle in the working of the Judiciary. Along these lines, to effectively execute

their free authority, the judges of both the Supreme Court and the High Courts should be

delegated with no impact on impedance from different parts of the government or from private

or partisan interests.

27
 B. Structure of Courts- The Judiciary is one of the three lynchpins of a

democracy, the other two being the legislature and the executive.8 Every one of the three work

in the show to guarantee that the democratic system works productively. Be that as it may, the

executive and the legislature need minds their power. Judiciary has numerous significant roles

to satisfy which incorporates:

1. To go about as guardian and mediator of the constitution.

2. To protect fundamental and different rights of the citizens of India To satisfy the duty

forced on the shoulders of judiciary, the judicial system is partitioned into three degrees

of Courts in India.

3. District Court: It is the most reduced court arranged in each district of each State. This

is the place where most citizens go to for any debate in their city or religion.

4. High Court: Each state has its own High Court, which is unquestionably the highest

judicial authority of the state. Any individual oppressed by the request for the District

Court can appeal to the high Court for its complaints.

5. Supreme Court: This is the Apex Court in a country. Any remaining Courts including

High Courts and the District Courts are subordinate to it. The decisions made by the

Supreme Court remains over any remaining subordinate courts. Decision passed by the

Supreme Court is conclusive and restricting on the parties.

C. Dispute Resolution- The courts additionally reserve the privilege to punish

people for the crimes they perpetrate. Pretty much every social circumstance which needs a

rule is overseen by the Judiciary. Along these lines, at whatever point there is a dispute, the

courts mediate in giving arrangements. Regardless of whether that dispute might be between

citizens, citizens and government or between two governments or even the central and state

government, the State is liable for dispute resolution.

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 D. Judicial Review- The judiciary has the last hang on the Constitution of India.

All things considered, if there is any violation of the fundamentals of the Constitution, the court

can considerably over compose laws passed by the Parliament. This cycle is called Judicial

Review.

E. Enforcing Fundamental Rights- Practically all crucial rights of Indian

Citizens are characterized in our Constitution. On the off chance that, any citizens feel that any

of such rights are violated, they can move toward their local High Courts or the Supreme Court

under Articles 226 or 32 of the Constitution.

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 CHAPTER - 4

EXCEPTIONS OF NATURAL JUSTICE

4.1 Exceptions of Natural Justice

The meaning of the concept of natural justice and the principles it revolves

around. But like many other legal provisions and legal principles, this rule is also not absolute

and contains within itself some restrictions which have developed over the time. Applications

of natural justice have been excluded during various occasions, which would be discussed

further in the article.

Principles of natural justice are procedural safeguards to prevent and protect an

individual from injustice. Where there is no possibility of injustice being accrued to the party,

or where the observance of these principles would cause more injustice, they need not be

observed. For example, in case of war our army shall defend the country, it cannot go on

hearing each and every one affected by their actions, if they are compelled to observe the

principles of natural justice, and it will be suicidal. Where, the very existence of the State in

question, these procedural requirements need not be followed. Likewise, in cases of

impracticability, interim preventive measures etc.the principles of natural justice need not be

observed.

4.2 Doctrine of Necessity and Absolute Necessity

Doctrine of necessity is an exception to the rule of bias under natural justice. It

allows authorities to do certain things which are necessary to be done at the moment, and those

acts which would in a normal situation not be allowed by the law. It is invoked in situations

where there is no definite authority to decide on a matter. The Supreme Court has although

established that the Doctrine of Necessity should not be invoked every now and then for even

small matters, which might lead to absence of rule of law. If there is a choice to whether let a
30
biased person act on a matter or whether to stop the matter itself, the preference will be given

to the biased person to act on it to get definite decisions, although which may be affected by

the bias of that particular person or authority, but nonetheless, the decision of that biased

authority is necessary to come to a conclusion under a said matter.

In Ashok Kumar Yadav and others vs. State of Haryana and others, it was

decided by the court that a member of Public Service Commission can’t exclude himself from

the selection process completely just because they might be related to some of the candidates,

and may exclude themselves only during the selection process of those candidates to whom he

might be related.

In doctrine of necessity, there are options to decide whether a biased person

should be allowed or not. Under the doctrine of absolute necessity, it is absolutely necessary to

let the case of a biased person be decided. In the modern times, there is not much difference

between the two and are overlapped in many circumstances.

4.3 Statutory Exceptions to The Rule of Natural Justice

The principle of natural justice can be excused by certain acts of the parliament.

Parliament may through its powers get rid of the procedures that are otherwise necessary for

any administrative action. It must also be noted here that any action of the parliament which

does not permit the individuals certain rights during the time period of the act, such act is bound

to come under the scrutiny of the courts and may be challenged under Article 14 of the

Constitution. A statute may exclude natural justice either expressly or by necessary implication

In Charan Lal Sahu vs. Union of India, the central government, under

the Bhopal Gas Disaster Act (Processing of Claims) Act, 1985, authorized itself to represent

all the victims. This was challenged on the fact that the govt. held 22% share in the Union

Carbide Company, and the interests of the government and the company overlapped while
31
there was a conflict of interests between the victims and the government. The court said that

even though the agreement might be true, no other body can represent the victims. Statutory

exception to natural justice might not be expressed but it is implied in the application, along

with the doctrine of necessity.

4.4 Exception During Situations of Emergency

India has witnessed its share in situations of emergencies. It is generally

observed in India that during a situation of emergency, in those cases where the right to be

heard will affect the government process, it will be excluded by the law for the time being. This

means that any hearing or any process which may jeopardize the interest of the public at large

would not be needed under the principle of natural justice and any such right would be obviated

for the time being. It is necessary in those situations where the process of fair hearing may take

too much and in consequence put the society in trouble either due to any external force, natural

force or any internal troubles.

In Mohinder Singh Gill vs. CEC, there were constituency elections going on in

Ferozpur, which were interrupted by mob violence, which caused some ballot papers and boxes

to be destroyed, while the elections were still underway in some places. The ECI ignored the

right to be heard and without any notice ordered re-elections. The court did not interrupt the

work of the ECI and dismissed the claims for notice by saying that the said act was necessary

in an emergency situation and Audi alteram partem can be ignored can be excluded in this

situation.

4.5 Exception Where No Right of An Individual Has Been Infringed

Where a person does not have any right, and neither can he derive any right

from any statute or any common law provision, he cannot ask for a remedy in that case under

the principles of natural justice, and he may in such case forfeit procedural fairness. The Latin

32
principle Ebi Jus ebiremedium stands for where there is a right, there is a remedy. So naturally,

in cases where there arises no right, no remedy can be granted.

In J.R Vohra vs. Indian Export House (P) Ltd. Provisions for termination and

creation for limited tenancies were made under the Delhi Rent Control Act. The result of these

provisions was that after the end of the term of the limited tenancy, it can be terminated by the

authorized office and can serve warrant of possession to the landlord without notifying the

tenant. The Supreme Court of India, upholding the validity of these warrants, said that once the

term of tenancy is over, the said person has no right to possession over that particular place and

that such a warrant will not affect any of the rights conferred on him. Hence, in this case the

exception is explained very well by the court, that no right can be infringed if it was not

available to a particular individual or an office in the first place.

4.6 Exceptions in Cases Where Public Interest Is of Importance

In those situations, considering the welfare of the public at large, it is important

to not dispense any such information which may put the safety of the public at threat. State

must make sure that it should not compromise the security of its territory, and that it should

protect all the information that it has which is of public importance. In Balco Employees Union

vs. UOI, the Supreme Court established that the principles of natural justice had no role to play

in those situations where policies considering the public at large were to be undertaken.

It was held by the court in this case that unless any action of the government is

arbitrary, illegal or unenforceable due to any valid reason, the decision of the government

cannot be challenged as a violation of the principles of natural justice. In this particular case,

the employees had challenged the decision of the government regarding disinvestment in PSUs.

The petition was dismissed on the basis of the reasoning given above.

33
4.7 Exception in Cases of Impracticality

This is one of the simplest exceptions to the rule of natural justice. Natural

justice can be applied only when it is practical in nature to apply it. But natural justice can be

excluded when there is no practicality to the situation in it. In Bihar School Examination Board

vs. Subhash Chandra, the examination board conducted class X board exams. But it was alleged

that there was mass copying in the exams, and during the checking it was on first view found

that there has been mass copying.

Following this, the board issued a fresh notice which directed the students to

appear for fresh exams again, without giving any chance to the students to have themselves

heard. This was challenged in the High Court by students, and the High Court quashed the

boards’ notice saying that the principle of Audi Alteram Partem has been violated and the

students have not been heard. In response to this decree, the board approached the Supreme

Court, and the Supreme Court struck down the order of the High Court, saying that it is

impractical to hear issues of all students in such a small time and it was held that on the grounds

of impracticality, the principle can be excluded in this particular case.

This case may also be read in the context of another exception, i.e. exception in

case of academic evaluation.

4.8 Exception in Cases of Academic Evaluation

In cases where the authority involved is academic in nature, or if the authority

is of complete administrative nature, in such cases, their evaluations may be excluded from the

ambit of the rule of natural justice. In JNU vs. B.S. Narwal, the respondent was a student of

Jawaharlal Nehru University. The student was removed from the university on the basis of his

academic performances, without being given any hearing prior to the notice. The case reached

the Supreme Court where the court observed that the nature of the decision is academic

34
authority in nature and that decisions from such an authority automatically declines any right

to be heard, and it was held that if the assessment of the authority is competent and it decides

that the work of the particular student is unsatisfactory, then the rule of natural justice may not

be applied.

4.9 Exclusion in Cases of Emergency

In a case the Supreme Court held that the maintenance of surveillance register

by the police is a confidential document. Neither the person whose name is entered in the

register nor any other member of the public can have access to it. Furthermore, the court

observed that the observance of the principles of natural justice in such situation may defeat

the very purpose of surveillance and there is every possibility of the ends of justice being

defeated instead of being served.

Same principle was followed in S.P. Gupta v. Union of India, where the

Supreme Court held that no opportunity of being heard can be given to an Additional Judge of

a High Court before his name is dropped from being confirmed.

It may be pointed out that in a country like India surveillance may provide a

very serious constraint on the liberty of the people, therefore, the maintenance of the

surveillance register cannot be so utterly administrative and non-judicial that it is difficult to

conceive the application of the rules of natural justice.

4.10 Exclusion in Cases of Routine Matters

A student of the university was removed from the rolls for unsatisfactory

academic performance without giving any pre-decisional hearing. The Supreme Court held that

the very nature of academic adjudication appears to negative any right of an opportunity to be

heard. Therefore, if the competent academic authorities examine and assess the work of a

35
student over a period of time and declare his work unsatisfactory, the rules of natural justice

may be excluded.

In the same manner when the Commission cancelled the examination of the

candidate because, in violation of rules, the candidate wrote his roll number on every page of

the answer, the Supreme Court held that the principles of natural justice are not attracted.

The Court observed that the rule of hearing is strictly construed in academic

discipline as if this is ignored it will not only be against public interest but would also erode

social sense of fairness. However, this exclusion shall not apply in case of disciplinary matters

or where the academic body permits non-academic circumstances.

4.11 Exclusion in Cases of Interim Preventive Action

If the action of the administrative authority is a suspension order in the nature

of a preventive action and not a final order, the application of the principles of natural justice

may be excluded. In a case where the institution passed an order debarring the student from

entering the premises of the institution and from attending classes till the pendency of a

criminal case against him for stabbing a co-student.

The Delhi High Court held that such an order could be compared with an order

of suspension pending enquiry which is preventive in nature in order to maintain campus peace

and hence the principles of natural justice shall not apply. Therefore, natural justice may be

excluded if its effect would be to stultify the action sought to be taken or would defeat and

paralyse the administration of the law.

The Supreme Court in Maneka Gandhi v. Union of India observed : “Where an

obligation to give notice and opportunity to be heard would obstruct the taking of prompt

36
action, especially action of a preventive or remedial nature, right of prior notice and opportunity

to be heard may be excluded by implication.”

4.12 Exception in Cases of Confidentiality

In a case the Supreme Court held that the maintenance of surveillance register

by the police is a confidential document. Neither the person whose name is entered in the

register nor any other member of the public can have access to it. Furthermore, the court

observed that the observance of the principles of natural justice in such situation may defeat

the very purpose of surveillance and there is every possibility of the ends of justice being

defeated instead of being served.

Same principle was followed in S.P. Gupta v. Union of India, where the

Supreme Court held that no opportunity of being heard can be given to an Additional Judge of

a High Court before his name is dropped from being confirmed.

It may be pointed out that in a country like India surveillance may provide a

very serious constraint on the liberty of the people, therefore, the maintenance of the

surveillance register cannot be so utterly administrative and non-judicial that it is difficult to

conceive the application of the rules of natural justice.

4.13 Exclusion in Cases of Legislative Actions

Legislative action, may be plenary or subordinate, is not subjected to the rules

of natural justice because these rules lay down a policy without reference to a particular

individual. On the same logic principles of natural justice can also be excluded by a provision

of the Constitution also. Constitution of India excludes the principles of natural justice in

Articles 22, 31(A), (B), (C) and 311(2) as a matter of policy. Nevertheless if the legislative

action is arbitrary, unreasonable and unfair, courts may quash such a provision under Articles

14 and 21 of the Constitution. In a case the Supreme Court held that no principles of natural
37
justice have been violated when the government issued notification fixing the prices of certain

drugs. The Court reasoned that since notification flowed from a legislative act and not an

administrative one so the principles of natural justice do not apply.

4.14 Exclusion in Case of Contractual Arrangement

In a case the Supreme Court held the principles of natural justice are not

attracted in case of termination of an arrangement in any contractual field. Termination of an

arrangement/agreement is neither a quasi-judicial or an administrative act so that the duty to

act judicially is not attracted.

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 CHAPTER - 5

JUDICIAL CASES

5.1 K. L. Tripathi vs State Bank of India and Others: 1984 AIR 273, 1984 SCR (1) 184

The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.

Shri K.L.Tripathi, the appellant herein joined the State Bank of India in 1955. At the relevant

time, he was working as Branch Manager, State Bank of India, Deoria.

Certain complaints were received about his conduct from Gorakhpur Branch Manager, Shri

R.S. Kapoor, Staff Officer Grade II, who reported to the Head Office on 5th May, 1974 that,

from the information given to him by some members of the staff of Deoria Branch, namely,

Shri M.R. Sharma, Head Clerk, M.S. Gupta, Field Officer and from other inquiries made by

him he found that the bills negotiated by the Gorakhpur Branch under a Revolving Letter of

Credit No. 20/1 dated 21st March, 1974 established by the Deoria Branch on Gorakhpur Branch

for Rs. 2 lakhs at a time subject to maximum of Rs. 17 lahks had remained unpaid to the extent

of Rs. 12 lakhs and that the openers of the Letter of Credit, M/s Jamuna Prasad Munni Lal

Jaiswal, Deoria were unable to meet their obligations. In the same letter, he also informed that

Deoria Branch had opened another Revolving Letter of Credit No. 20/2 dated 3rd April, 1974

for Rs. 50,000 per day subject to a maximum of Rs. 10 lakhs and that because the clauses of

the credit had not been drawn properly, the bills were not negotiated thereunder by his Branch,

and were instead, sent on collection basis.

Certain other allegations giving the particulars of the bills and records were

mentioned. In those circumstances, the head office ordered a preliminary enquiry which was

conducted by Shri R.P. Srivastava, Staff Officer, Grade II and having considered his report,

the head office directed Shri B.D. Sharma, Chief Manager to carry out investigation under the

rules governing the services of the officers of the State Bank.

39
 Shri Sharma conducted the investigation between 9th June to 23rd June, 1974

and in the course of the investigation, he visited Deoria and Gorakhpur. On 9th September,

1974, charges were framed. The information Shri Sharma could gather was that M/s Jamuna

Prasad Muni Lal Jaiswal, Station Road, Deoria was a sole proprietorship concern with Shri

Jamuna Prasad Jaiswal as the sole proprietor. Their business was to deal in scrap iron which

they purchased from Sugar Mills around Deoria and from other sources. The firm maintained

a current account only with an average balance of Rs. 10,000. There was no opinion report on

record with the Branch. It appeared that the firm had no experience in oil business. Shri Sharma

enquired from Mr. Tripathi. From the report of Shri Sharma, it appears that in respect of all

relevant entries upon which he has based his conclusion, he asked Shri Tripathi after giving

him the gist of the relevant materials gathered from other persons in the absence of the appellant

and asked his pinion or explanation in respect of those. We have examined the report of Shri

Sharma and find that at all stages in respect of all the matters mentioned in the report the

appellant was associated with the preliminary investigation and his versions or explanations

were sought for and recorded.

He admitted that amount of Draft No. BS001560 dated 12th January, 1974 for

Rs. 75,000 was not credited to "Margin on Documentary Credits Account" before issuing the

Letters of Credit. He however stated that margin amount of Rs. 75,000 was lying with the Bank

as security by means of a draft and the Bank's interests were not jeopardised and were fully

protected to that extent. The draft was, however, not duly discharged. He admitted that there

was delay in retiring of bills but he gave certain explanation to the show cause notice.

Thereafter on this basis, on 19th June, 1975, the appellant was issued a show

cause notice. In the said show cause notice, the appellant was communicated of three charges.

These charges were mainly based on the report of Shri Sharma as mentioned hereinbefore First

40
charge was furnishing of opinion report to the Fertilizer Corporation of India in an unauthorised

manner. Second charge was about the appellant's conduct in opening two clean revolving

Letters of credit Nos. 20/1 dated 21st March, 1974 and the other 20/2 dated 3rd April, 1974.

The third charge was about irregularities in respect of the opening of Letters of Credit and

payment of bills negotiated thereunder. Sufficient particulars of these charges were mentioned

and these appear in the charge-sheet which we need not set out in extenso.

It is thus evident that as the Branch Manager you had failed miserably to

safeguard the Bank's interest; on the contrary, you had wilfully/knowingly committed gross

irregularities in the opening of the aforesaid Letters of Credit and payment of bills drawn

thereunder and attempted to defraud the Bank. Your actions, which have seriously jeopardised

the Bank's interests and exposed the Bank to grave financial risks, cast grave doubts on your

integrity and bonafides. It is, therefore, proposed to proceed against you in terms of Rule 49

read with Rule 50 of the State Bank of India (Officers & Assistants) Service Rules. You are,

therefore, required to submit to us your written statement in defence in terms of Rule 50 (2)

ibid in respect of the aforesaid charges within 15 days of the receipt hereof; also, if you so

desire, you may apply for a hearing in person with the undersigned. Please note that in the

event of your failure to submit the reply within this period, it will be understood that you have

no defence to offer."

It may be mentioned that regarding Charge number (ii), his reply was that the

words which ought to have been there 'accompanied by once used and unidentified plant

lubricating oil in 200 litres each drum' which were safeguard for encashments pursuant to the

letters of credit, were important and significant. He accepted that those words were not properly

placed in the letters of credit. As would appear from the report of Shri Sharma that the appellant

had admitted that he had changed the words "at a time" and had used the words 'per day'. The

41
appellant's defence was that he meant the same thing. In respect of these charges, he admitted

the facts and used expressions like these "I regret that due to inadvertence-was not credited".

Another explanation was that he was awfully busy in inspection of agricultural

loans. Another charge was that he did not ensure prompt payment of the bill on receipt. He

admitted in his reply that this was so but stated that the Gorakhpur branch "created

complications and he was put to harassment". He admitted that the furnished in respect of

charge (iii) (d) in the show cause notice, incorrect particulars regarding payment of bills

negotiated but stated that he was regretting these things.

Another explanation for these matters was that he had to leave office frequently

and early during the day for inspection. He admitted in reply to charge (iii) (e) that he used to

receive covers and passed these on to Shri Srivastava. In respect of charge.

Thereafter on 1st May, 1976, the appellant received a letter from the Chief

General Manager intimating to him that in accordance with the independent investigation

conducted under Rule 50(1) of the State Bank of India (Officers & Assistants) Service Rules

governing the appellant's service in the Bank, the statement of charges served dated 19th June,

1975 and the appellant's reply thereto dated 5th November, 1975 were submitted to the Local

Board at its meeting held on the 28th April, 1976 and it was resolved that the appellant be

dismissed from the service in terms of Rule 49 (f) of the aforesaid service rules. Thereafter the

appellant by the said rule was required to submit his written statement showing cause why the

penalty proposed should not be imposed upon the appellant.

The appellant was further informed that if no reply was received, the State Bank

of India's authority will presume that the appellant had no submissions to make. Along with

the said letter, a copy of the statement of charges and a copy of the report of the Investigating

Officer who investigated, consisting of investigation in respect of each of the allegations and
42
the appellant's explanations to the allegations during the time of the preliminary investigation

and the facts and materials gathered during the preliminary investigation in which the appellant

participated as mentioned thereinbefore was sent.

The appellant on 18th June, 1976 submitted a reply. These have been set out in

pages 107 to 129 (of the Paper Book)-Annexure 4 to the affidavit of Shri K. P. Rau filed in

these proceedings. Apart from the detailed reply which had already been submitted by the

appellant, a reading of the explanation submitted by the appellant made it clear according to

the appellant that none of the charges could be made the basis of any disciplinary action

specially action of dismissal.

He referred to his excellent record from 1967 to 1973 in which he stated that

the entry of appellant's performance was 'excellent' in 1970; that he was an asset to the

institution. He further stated that even if there was some technical fault on account of certain

interpretation of rules mentioned in the report, the appellant had sought guidance of the Field

Officer and further submitted that on account of technical mistake where the Bank has not

suffered any monetary loss or any other type of loss and in view of his long service for more

than 20 years during which the appellant's service as Officer Grade I was excellent, no action

could or should be taken against the appellant.

It may be mentioned that the facts in that case were different. In the instant case

though reasons have not been expressly stated, these reasons were implicit namely, the nature

of the charges, the explanation offered and the reply of the appellant to the show cause notice.

These appear from a fair reading of the order impugned in this case. It, further, appears that

there was consideration of those facts and the decision was arrived at after consideration of

those reasons. It is manifest, therefore, that absence of any denial by the appellant, indeed

admissions of the factual basis and nature of the explanation offered by the appellant were

43
considered by the authority to merit the imposition of the penalty of dismissal. Such a

conclusion could not, in the facts and circumstances of the case, be considered to be

unreasonable or one which no reasonable man could make.

Counsel relied on the observations of this Court in the case of Union of India v.

H. C. Goel at pages 723-726 of the report. These observations were made again in the context

of jurisdiction of the High Court to interfere with the orders passed under Article 311 (2) read

along with Civil Service (Classification, Control and Appeal) Rules. The Court rejected the

plea made in that case that even if the enquiry officer made findings against the public servant,

the Government could never re-examine the matter so that even if the Government was

satisfied that the findings against the public servant were erroneous, the Government must

proceed on the basis that the public servant was guilty and impose some punishment on him.

That is not the position here. In this case, there is no evidence that the disciplinary authority

was not satisfied with the findings arrived at in the investigation. This case, therefore, is of no

assistance in deciding the controversy before us.

Another decision of this Court was relied on by counsel for the appellant,

namely, the decision in the case of The Barium Chemicals Ltd. and Anr. v. The Company Law

Board and Others. That case arose under proceedings in respect of an order passed by the

Company Law Board under Section 237 (b) of the Companies Act appointing four inspectors

to investigate the affairs of the appellant company, on the ground that the Board was of the

opinion that there were circumstances suggesting that the business of the appellant company

was being conducted with intent to defraud its creditors, members or any other persons and that

the persons concerned in the management of the affairs of the company having connection

therewith were guilty of fraud, misfeasence and other misconduct towards the company and its

members. Bachawat, J., at page 342 of the report was of the opinion that in view of the

44
circumstances disclosed therein, without more, could not reasonably suggest that the business

of the company was being conducted to defraud the creditors, members and other persons or

that the management was guilty of fraud towards the company and its members. From the

observations of Shelat J. in that decision, it appears that he was also inclined to take the same

view. The facts of the instant case are, however, different. It has to be emphasised that the

appellant was not charged for defrauding the Bank. He was charged mainly for the conduct

which suggested that he acted improperly and in violation of the principles on which sound

banking business should be conducted. The charge against the appellant was that he had acted

in violation of procedure of the Bank, he had disregarded all safeguards in sanctioning the

overdrafts, encashing bills and his conduct had exposed the bank to grave risks and that he had

flagrantly violated the bank rules and instructions with a view to cover up attempts to

misappropriate bank's money after defrauding the bank. Whether actual misappropriation had

been caused or bank defrauded or not were not relevant in respect of the charges against him.

For the reasons aforesaid, this appeal fails, but for reasons different from those

given by the High Court, and is accordingly dismissed but without any order as to costs. We

must, however, observe in conclusion that having regard to the record of the service of the

appellant prior to the conduct revealed in this case and further in view of the fact that actually

no loss has been occasioned to the Bank by the improper conduct of the appellant, if the Bank

considers in the interest of justice that the appellant should be given some job or employment

in some capacity which might mitigate or compensate in some measure the grave loss suffered

by the appellant consequent on the dismissal order, the Bank might consider taking such a

course of action.

45
5.2 Thressiamma vs Union of India (Uoi): 2000 (120) ELT 602 Ker

The above Writ Appeal is filed by the petitioner in O.P. No. 14526 of 1993. The

Original Petition was dismissed by judgment dated 23-12-1998. In the Original Petition, the

petitioner had prayed for a writ of certiorari or other appropriate writ and set aside Ext. P7 order

dated 21-7-1993 of the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi

(hereinafter referred to as 'the Tribunal'.

The Original Petition came up for admission on 25-10-1993. Thereafter it is

seen that it was posted on 24-11-1993. On that date on behalf of the fourth respondent, an

objection was filed. In the paragraph 2 of the objection, the contention raised is that the Original

Petition was not maintainable, since an appeal lies to the Supreme Court under Section 35L of

the Act. The objection also deals with other contentions raised in the Original Petition. To the

objection, a reply statement was filed by the petitioner on 10-12-1993. It is seen that on 3-2-

1994 the Original Petition was admitted and notice was ordered. Thereafter it was posted on 7-

10-1998 before the learned Judge. On 7-10-1998 the learned Judge posted the case to 12-10-

1998 for argument regarding the maintainability of the Original Petition. Thereafter, it is seen

that the case was posted on various dates and it was finally heard on 8-12-1998 and judgment

was delivered on 23-12-1998. The learned single Judge dismissed the Original Petition.

In paragraph 3 of the judgment the learned Judge posed the question whether

the petition under Article 226 of the Constitution of India is maintainable, since an appeal lies

under Section 35L of the Central Excises and Salt Act to the Supreme Court. In paragraph 6 of

the judgment, the learned Judge held as follows : "All the authorities below found that

Glucovita Glucose D manufactured by the petitioner comes under Heading 1702.21 of the

Central Excises Tariff as preparation of other sugars. Thereafter, this Original Petition

under Article 226 of the Constitution raising the said question cannot be maintained when there

46
is a specific provision for appeal under Section 35L of the Central Excises and Salt Act".

However, the learned Judge thereafter went on to examine the question whether there was any

violation of the principles of natural justice and concluded that there was no violation. It is

against the above judgment that the Writ Appeal is filed.

We heard Sri A. Hidyatulla, Senior Counsel for the appellant and Sri. K. Rama

Kumar, Senior Standing Counsel on behalf of the respondents. Learned counsel for the

appellant raised three points. The Learned single Judge went wrong in holding that the Original

Petition was not maintainable. The Learned single Judge was not correct in going to the

question whether there was violation of the principles of natural justice after finding that the

Original Petition was not maintainable. The Original Petition ought to have been allowed on

the ground that there was violation of the principles of natural justice by the Tribunal. On the

other hand, Sri Rama Kumar contended that The Original Petition was not maintainable, since

there was an effective alternative remedy under Section 35L of the Act. There was

no violation of Rule 23 of the Appellate Tribunal Rules or violation of

the principles of natural justice and In any event, the learned single Judge and exercised a

discretion, which is based on sound legal principles and hence should not be interferred in

appeal. In the second place, the doctrine has no application in a case where the impugned order

has been made in violation of the principles of natural justice".

In that case even though violation of fundamental right

and principles of natural justice were alleged in the Writ Petition, the Writ Petition was

dismissed in limine. In paragraph 4 of the judgment, the Supreme Court held as follows: "It is

manifest in the present case that the appellant had alleged in the Writ Petition that the Taxing

Officer has no authority to impose the tax and there was no validity constituted Antarim Zila

47
Parishad after December 31,1959. It was further alleged that Sections 114 & 124 of the U.P.

District Boards Act No. X of 1922 violated Article 14 of the Constitution.

There is also an allegation that the imposition of the tax violated the provisions

of Article 276 of the Constitution... It was further contended on behalf of the appellant that the

procedure for assessment of the tax was not followed and there was violation of

the principles of natural justice." Thereafter, the Supreme Court observed as follows : "In view

of the allegations of the appellant that the taxing provisions are ultra vires and that there

was violation of the principles of natural justice, we think that the High Court was in error in

summarily dismissing the Writ Petition on the ground that the appellant had an alternative

remedy of statutory appeal".

On a perusal of the above decisions, it is clear that the existence of an alternate

remedy is not a bar to the maintainability of a Writ Petition, if there is violation of the

fundamental right or violation of any Act or rule or violation of

the principles of natural justice. A perusal of the Original Petition shows that the petitioner has

attacked the order of the Tribunal on the ground of violation of Rule 23 of the Tribunal

Procedure Rules and also violation of the principles of natural justice. As held by the Supreme

Court in the decision in AIR 1969 SC 556, if there is allegation of violation of

the principles of natural justice or violation of any Rule or Act, the dismissal of the Writ

Petition on the ground of alternate remedy is not proper. Hence, we don't agree with the learned

single Judge in holding that the Original Petition is not maintainable.

So far as the present case is concerned, the learned single Judge went into the

question whether there is any violation of the principles of natural justice and gave a finding

that there is no violation of any Rule or the principles of natural justice. Certainly in appeal we

can go into the question whether the finding on this issue is correct or not, even though the

48
learned single Judge has taken the view that alternate remedy is available. Since such a finding

has been entered by the learned single Judge we went into the question and whether the view

that Ext. P7 order has been passed in violation of Rule 23 of the Appellate Tribunal (Procedure)

Rules and in violation of the principles of natural justice.

In the above view of the matter, we quash Ext. P7 and direct the second

respondent to reconsider Appeal No, E/3118/91-D afresh. If the Department wishes to raise the

contention that the addition of Tricalcium Phosphate and Vitamin D will amount to nutrient

supplement and also wishes to rely on any authority for proving the above case, it has to file a

petition under Rule 23 of the Appellate Tribunal (Procedure) Rules. Then the appellant will be

given an opportunity to file objection to it including the objection that the contention cannot be

raised, since admittedly it was not raised before the first two authorities. The Tribunal may

dispose of the appeal as expeditiously as possible. The judgment of the learned single Judge is

set aside.

5.3 Monga Metals (P) Ltd. vs Assistant Commissioner of Income Tax: (2000) 67 TTJ All

247

This is an appeal by the assessee in which the assessee has challenged the

assessment for the block period completed under the provisions of Chapter XIV-B of the

Income Tax Act, 1961 (hereinafter referred to as `the Act) on various grounds. Hearing of this

appeal has been fixed on priority basis as directed by the Hon'ble High Court of Allahabad vide

order dated 16-3-1999.

The counsel for the assessee first of all submitted that the notice required to be

served upon the assessee as per the provisions of section 158BC is analogous/within the

parameter of the requirements for a notice under section 148 of the Income Tax Act and,

therefore, the law relating to the requirements for the validity of the notice under section

49
148 and the case laws thereof, are fully applicable, so far as the requirements for a valid notice

under section 158BC of the Act are concerned.

According to the definition given as per section 158BA of Act, the block period

is defined to be consisting of previous years relevant to 10 assessment years preceding the

previous year in which the search had been conducted and period upto the date of

commencement of search in the previous year in which search was conducted. According to

the counsel, the definition of block period specifies the maximum number of previous

assessment years which can be covered in assessment for the block period and it is not

necessary that in each and every case the previous 10 assessment years are to be covered.

Explaining his point the assessee's counsel submitted that if assessee's business had been in

existence, say for only 3 previous assessment years, then the block period in that case will

include only 3 assessment years and not 10 assessment years. From this interpretation of the

provisions the assessee's counsel made out a case that in the notice under reference the exact

period falling within the block period i.e. assessment years; has not been mentioned and since

non mentioning of assessment year in a notice under section 148 of the Act has been held to

have rendered the notice under section 148 of the Act as a vague notice, the present notice

alleged to have been issued under section 158BC of the Act is also rendered vague and invalid.

He further submitted that the business of the assessee's company was started during the

previous year relevant to assessment year 1993-94 and since this fact was well within the

knowledge of the assessing officer, mentioning of the block period as "the previous years

relevant to 10 assessment years preceding the previous year 1996-97 and including the period

upto the last date of search warrant executed in the case as defined under section 158BA upto

the 3-9-1996", clearly goes to show that the assessing officer has simply mentioned the

definition of block period given under section 158BA of the Act and not the assessment year

which are requirement for a valid notice asking for the return of undisclosed income.
50
 Explaining the illegalities further, the counsel submitted that since the assessing

officer has mentioned various status such as individual/HUF/firm/company/assessing

officer/BOI/local authority in the notice, it is clear that the assessing officer was not satisfied

as to from whom he was going to ask for a return and in whose case was going to make

assessment for block period. The assessee's counsel further submitted that simply addressing

the notice in the name of company cannot be interpreted as a notice asking the company to

furnish its return in the status of the company and for the period during which it existed. Giving

an example, the assessee's counsel submitted that if a notice is addressed as per the provisions

of section 282(2)(b) of the Act to the principal officer, it cannot be interpreted as a notice asking

the addressed person i.e. the principal officer to furnish his return in the individual status.

Referring to the view taken by the learned Commissioner that the assessing

officer had condoned the defect, with reference to section 292B of the Act, we have no

hesitation in saying that this provision of law is not a panacea, pulling the assessing officer out

of any and all sort of statutory non-compliances by him. Section 292B only says that a return,

assessment notice, summons or other proceedings shall not become invalid merely by reasons

of any mistake, defect or omission in such return assessment notice, summons or other

proceedings if these are in substance and effect in conformity with or according to the intent

and purpose of this Act. Even a plain reading of this provision conveys that the heart of the

matter is that it is only a technical or venial sort of defect in any return, assessment notice,

summons or other proceedings that is capable of being cured under this provision. In this

connection a reference may be made to Departmental Circular No. 179, dated 30-9- 1975,

which, as found at p. 6928 of Chaturvedi and Pithisaria's Commentary, 4th Edn. Vol. VI, also

states that section 292B was enacted to provide against purely technical objections without

substance coming the way of the validity of assessment proceedings, etc. We are certain that

to treat a return as, valid for the purposes of the completion of an assessment which as per
51
unambiguous provisions of law, namely, section 139(9)" shall be treated as valid return and the

provisions of this Act shall apply as if the assessee had failed to furnish the return" is not at all

a technical or venial matter. In our considered opinion it does in nowhere come even within

the legal vicinity of section 292B of the Act.

Income escaping assessmentIf the assessing officer has reason to believe that

any income chargeable to tax has escaped assessment for any assessment year, he may, subject

to the provisions of sections 148 to 153, assess or reassess such income and also any other

income chargeable to tax which has escaped assessment and which comes to his notice

subsequently in the course of the proceedings under this section, or recompute the loss or the

depreciation allowance or any other allowance, as the case may be, for assessment year

concerned (hereinafter in this section and in sections 148 to 153 referred to as the relevant

assessment year;) Provided that where an assessment under sub-section (3) of section 143 or

this section has been made for the relevant assessment year, no action shall be taken under this

section after the expiry of four years from the end of the relevant assessment year, unless any

income chargeable to tax has escaped assessment for such assessment year by reason of the

failure on the part of the assessee to make a return under section 139 or in response to a notice

issued under sub-section (1) of section 142 or section 148 or to disclose fully and trully all

material facts necessary for the assessment for that assessment year."

From the indepth analysis of aforesaid scheme of provisions relevant for making

of a regular assessment, assessment of escaped income and assessment of search cases what

we have been able to understand is that so far as the regular assessment is concerned, the

assessing officer is to complete the same after serving on the assessee a notice under section

143(2) and on the date specified in such notice or as soon as afterwards, as may be, on the basis

of evidence which the assessee may like to produce or such other evidence which the assessing

52
officer may require the assessee to furnish on specified points and after taking into account the

relevant material which he has gathered. Under this scheme of assessment the requirement of

service of notice under section 143(2) has been held to be a procedural irregularity and non-

compliance of this requirement has resulted in setting aside of the assessment for proceeding

from the stage of irregularity and it is so because after furnishing of a valid return the assessing

officer issues a valid jurisdiction to proceed for making a regular assessment but as far as the

other two schemes i.e. the scheme provided for 'assessment of escaped income contained in

provisions of sections 147, 148 and 149 and the scheme of special procedure for assessment in

search cases" as provided under Chapter XIV-B i.e. under the provisions of sections

158B, 158BA, 158BB and 158BC etc. are concerned these go to show that : object of both the

schemes is same i.e. object is to tax the income which has not already been taxed. Under the

former scheme the requirement is that in the opinion of the assessing officer the income should

have escaped the assessment and search is not necessary and the prerequisite conditions to

assume jurisdiction to tax the escaped income limits are with respect to the quantum of escaped

income as provided under section 147 and service of a valid notice under section 148 has to be

served upon the person and within the limitation prescribed under section 149, whereas in the

later scheme the prerequisite mandatory requirements before the assessing officer can assume

jurisdiction to make assessment of undisclosed income are that: there should have been a search

action under section 132 of the Act or a requisition for books or documents under section

132A of the Act, which is analogous to the requirement of taxing of escaped income in the

earlier scheme. It is only on fulfilment of this condition that the assessing officer gets clothed

with the jurisdiction to proceed for making a block assessment of undisclosed income, meaning

thereby that the assessing officer is said have jurisdiction to proceed with under the provisions

of Chapter XIV-B of the Act.

53
 The second required prerequisite condition, before proceeding to make

assessment under section XIV-B i.e, and assessment of block period is that the assessing officer

has to serve a notice in confirmity with the requirement of section 158BC of the Act upon the

person in whose case search has been conducted and in whose case the assessing officer wants

to make an assessment under Chapter XIV-B, meaning thereby that as in the case of assessment

of escaped income, the assessing officer can proceed to assess the escaped income only after

the fulfilment of requirements upto the stage of service of a valid notice in confirmity with the

provisions of section 148, in case of search i.e. in case of assessment of block period to be

made under Chapter XIV-B of the Act the assessing officer can proceed to assess the

undisclosed income after satisfaction of the requirements up to the stage of service of a valid

notice in confirmity with the provisions of section 158BC of the Act. Since under both these

schemes the requirement of service of a notice, before proceeding to make assessment, is a

must, the requirement cannot be said to be a procedural and different one.

As far as first question is concerned, now the law is well settled that when the

finding of the quasi-judicial authority are found to have been influenced by the

advice/information/evidence which have been obtained from 3rd party and brought on record

without the knowledge of the assessee or without allowing the assessee an opportunity to

controvert or disapprove the information, evidence or statement of fact contained in such

information or without allowing the assessee to cross-examine such 3rd party.

As far as first question is concerned, now the law is well settled that when the

finding of the quasi-judicial authority are found to have been influenced by the

advice/information/evidence which have been obtained from 3rd party and brought on record

without the knowledge of the assessee or without allowing the assessee an opportunity to

controvert or disapprove the information, evidence or statement of fact contained in such

54
information or without allowing the assessee to cross-examine such 3rd party, the order has to

be found violative of principle of natural justice i.e. such an order is an order

in violation of principle of natural justice.

As far as the assessment before us is concerned since we have already held in

para 19 the assessment to be in violation of principle of natural justice, we respectfully

following the decision of various courts including Hon'ble Supreme Court and also the decision

of Tribunal (supra), have no hesitation in holding that the assessing officer's action refusing the

permission to the assessee for cross-examination of Mr. Madan Hada and others not only

constituted infraction of right conferred gross violation of the principle of natural justice and

has vitiated the assessment on the issues relating to the undisclosed income referred to in the

assessee's arguments and also with respect to the undisclosed income on account of so-called

excess stock of scrap alleged to be available on the date of search and the assessment order to

that extent has to be declared as bad-in-law, a nullity and void. We, subject to the direction that

assessing officer may proceed with the matter afresh if the law so permits, hold accordingly.

5.4 U.N. Pandey vs Eastern Coalfields Ltd. And Ors.: 2000 (86) FLR 595, (2000) ILLJ

1397 Cal

While the petitioner was working as Despatch Clerk in Sodepur Colliery under

Eastern Coalfields Ltd. by virtue of a charge-sheet dated September 13, 1998 some charges

were levelled against the writ petitioner.

In a case where workman's employer is not a "state" within the meaning

of Article 12 of the Constitution of India, if the enquiry against the workman is held arbitrarily

or in violation of the principles of natural justice, then the employer can produce fresh

evidence before.

55
 Tribunal to bring home (sic) the charges. In my opinion such would not be the

position in a case where a workman's employer is a "state" within the meaning of Article 12 of

the Constitution of India. Because in a case where the employer is a "state" within the meaning

of Article 12 of the Constitution of India then such violation of principles of natural justice is

a violation of Article 14 of the Constitution.

But when the employer is not a "state" within the meaning of Article 12 of the

Constitution of India question of violation of Article 14 does not arise. In this connection

reference may be made to a decision of Supreme Court in Union of India v. Tulsiram

Patel reported in (1985-II-LLJ-206) (SC). In Tulsiram Patel case (supra) majority view of a

Bench of five Judges of Supreme Court in paragraph 86 of the reported decision laid down

the principle of law as follows at p. 245. "The principles of natural justice have thus come to

be recognised, as being a part of the guarantee contained in Article 14 because of the new and

dynamic interpretation given by this Court to the concept of equality which is the subject-

matter of that Article. Shortly put, the syllogism runs thus: violation of a rule

of natural justice results in arbitrariness which is the same as discrimination; where

discrimination is the result of State action. it is a violation of Article 14: therefore,

a violation of a principle of natural justice by a State action is a violation of Article 14. Article

14, however, is not the sole repository of the principles of natural justice.

What it does is to guarantee that any law or State action violating them will be

struck down. The principles of natural justice, however, apply not only to legislation and State

action but also where any Tribunal, authority or body of men, not coming within the definition

of "State" in Article 12, is charged with the duty of deciding a matter. In such a case,

the principles of natural justice require that it must decide such matter fairly and impartially."

56
 From the above quoted majority view in Tulsiram Patel case (supra) it is

apparent that violation of principles of natural justice by an employer who is a "state" within

the meaning of Article 12 of the Constitution of India is a violation of Article 14 and such

action is liable to be struck down by the Court. Principles of natural justice when violated in

case of an employer who is not a "state" within the meaning of Article 12 of the Constitution

question of violation of Article 14 does not arise. "In such case" meaning thereby when the

employer is not a "state" within the meaning of Article 12 of the Constitution,

the principles of natural justice require that it must decide such matter fairly and impartially.

Therefore, in a case when a disciplinary action taken by an employer who is not a "state" within

the meaning of Article 12 of the Constitution of India is called in question by an employee who

is a workman within Section 2(s) of Industrial Disputes Act, 1947 then the only forum available

to the workman is the forum under Industrial Disputes Act, 1947. But in a case where a

disciplinary action taken by an employer who is a "state" within the meaning of Article 12 of

the Constitution of India is called in question by an employer is a "state" within the meaning

of Article 12 of the Constitution of India is called in question by an employee who is workman

within the meaning of Section 2(s) of the Industrial Disputes Act, 1947 the workman can, in

my opinion, initiate a writ proceeding before the High Court provided his fundamental rights

guaranteed by Part-Ill of Constitution of India have been violated by such action of the

employer.

Both the findings of the enquiry officer and the report of the enquiry officer

were furnished to the writ petitioner and the writ petitioner submitted a representation in respect

of the findings of the enquiry officer to Chief General Manager on November 5, 1998. In the

said representation the writ petitioner raised various objections in respect of the enquiry report

and stated that he cannot be held responsible on the strength of such enquiry proceeding and

findings which has lost its relevance due to clearing manipulation, unwarranted and motivated
57
addition by the enquiry officer. I have already recorded earlier that the Chief General Manager

by his letter dated November 7, 1998 communicated his order to the Agent, Sodepur R, Colliery

directing that the writ petitioner be dismissed from service with immediate effect. The relevant

lines of the said letter dated November 7, 1998 have been quoted in the earlier part of this

judgment. It is apparent from the said letter dated November 7, 1998 of the Chief General

Manager that there is no mention that the Chief General Manager considered the representation

preferred by the writ petitioner which was submitted to the Chief General Manager on

November 5, 1998.

The learned Advocate for the petitioner argued that on the face of the record it

shows that the Chief General Manager, the authority who took the decision to dismiss the writ

petitioner from the service, did not consider the points raised by the writ petitioner in his

representation submitted by the writ petitioner to the Chief General Manager on November 5,

1998 raising several questions about the enquiry report. The learned Advocate for the petitioner

submits that this has violated the principles of natural justice.

The learned Advocate for the respondents on the other hand argued that such

non-consideration of representation of the writ petitioner by the Chief General Manager by

itself does not violate the principles of natural justice. The learned Advocate for the

respondents argued that it has been laid down by Supreme Court in Managing Director, ECIL

v. B. Karunakar reported in (1994-I-LLJ-162) (SC) even when the enquiry report is not

furnished to the concerned employee the Court should first direct the employer to furnish the

enquiry report to the employee and employee should be asked to show how he is prejudiced

for non-furnishing of the enquiry report if the employee fails to show any prejudice then non-

furnishing of the enquiry report would not violate principles of natural justice. The learned

Advocate for the respondents argued that on the same analogy even after the enquiry report is

58
furnished to an employee and employee makes a representation, if the employer does not

consider the representation so made by the employee then that does not by

itself violate principles of natural justice. The learned Advocate for the respondents argued that

the employee has to satisfy the Court that for such non-consideration of his representation he

has been prejudiced. I do not accept the proposition of the learned Advocate for the respondents

in B. Karunakar case (supra) it has, inter alia, been observed as follows at page 176:

5.5 Chandrama Tewari vs Union Of India, Through General Manager, Eastern Railways:

1988 AIR 117, 1988 SCR (1)1102

The Judgment of the Court was delivered by SINGH, J. The short question

which arises in this appeal is whether the disciplinary proceedings taken against the appellant

resulting in his dismissal are null and void as the Enquiry Officer failed to comply with the

principles of natural justice in holding the enquiry. The question relating to the non-compliance

of principles of natural justice is founded on the grievance that a copy of paper No. 5 although

mentioned in the memo of charges was not supplied to the appellant, and that he was not

permitted to inspect the same. A learned single Judge of the High Court has answered the

question against the appellant. Hence this appeal.

The appellant was posted as fireman at Moghulsarai in Northern Railway in

May, 1964. On 28th May 1964 coal lying at Pusauli Station was fraudulently removed by some

person giving out his name as Shambhu Tiwari. A criminal case was registered, but on account

of absence of reliable evidence, a final report was submitted. It appears that during the

preliminary enquiry held by the Department it was found that Chandrama Tewari, the appellant

had removed the coal lying at Pusauli Station posing himself as Shambhu Tiwari, a coal

contractor. On completion of the preliminary enquiry a charge sheet was issued to the appellant

on 6.2.1967. The appellant filed reply to the charges denying the same. An Enquiry Officer

59
was appointed before whom evidence was recorded and the appellant was afforded full

opportunity of cross-examining the witnesses. The Enquiry Officer submitted his report

holding the appellant guilty of charges framed against him. The punishing authority accepted

the enquiry report and issued orders on 27.6.1969 dismissing the appellant from the service.

The appellant filed a civil suit in the Trial Court for a declaration that the punishment of

dismissal awarded to him was illegal and unconstitutional mainly on the ground that the

enquiry had been held in violation of the principles of natural justice and he was denied

reasonable opportunity of defence. A number of other grounds were also raised in the suit

which need not be adverted as the controversy now is confined to the question of violation of

the principles of natural justice alone. The trial court decreed the appellant's suit on 31.1.1974.

The decree of the trial court was confirmed in appeal by the District Judge by his order dated

2.11.1974. On a second appeal being filed by the Union of India the High Court set aside the

judgment and decree of the subordinate courts on the findings that the appellant had been

afforded reasonable opportunity of defence and there was no violation of any principles of

natural justice in the enquiry.

Learned counsel for the appellant Shri M.K. Ramamurthy contended that the

memo of charges issued to the appellant expressly mentioned that paper No. 5 was proposed

to be relied by the Department against the appellant but in spite of demand being made by the

appellant a copy of that document was not supplied to him nor was he permitted to inspect the

same. In the absence of that document the appellant was handicapped in cross-examining Shri

A.C. Das, Dy. S.P., S.P.E. He further urged that failure to supply the copy of paper No. 5 was

in violation of the principles of natural justice rendering the proceedings, resulting in the order

of dismissal as void.

60
 We have given our anxious consideration to the submissions made on behalf of

the appellant and we have further considered the aforesaid authorities referred to by the learned

counsel for the appellant but we do not find any merit in the appellant's submissions to justify

interference with the High Court's judgment. Article 311 of the Constitution requires that

reasonable opportunity of defence must be afforded to a government servant before he is

awarded major punishment of dismissal. It further contemplates that disciplinary enquiry must

be held in accordance with the Rules in a just and fair manner. The procedure at the enquiry

must be consistent with the principles of natural justice. Principles of natural justice require

that the copy of the document if any relied upon against the party charged should be given to

him and he should be afforded opportunity to cross-examine the witnesses and to produce his

own witnesses in his defence.

If findings are recorded against the government servant placing reliance on a

document which may not have been disclosed to him or the copy whereof may not have been

supplied to him during the enquiry when demanded would contravene principles of natural

justice rendering the enquiry, and the consequential order of punishment illegal and void. These

principles are well settled by a catena of decisions of this Court. We need not refer to them.

However, it is not necessary that each and every document must be supplied to the delinquent

government servant facing the charges instead only material and relevant documents are

necessary to be supplied to him. If a document even though mentioned in the memo of charges

is not relevant to the charges or if it is not referred to or relied upon by the enquiry officer or

the punishing authority in holding the charges proved against the government servant, no

exception can be taken to the validity of the proceedings or the order. If the document is not

used against the party charged the ground of violation of principles of natural justice cannot

successfully be raised. The violation of principles of natural justice arises only when a

document, copy of which may not have been supplied to the party charged when demanded is
61
used in recording finding of guilt against him. On a careful consideration of the authorities

cited on behalf of the appellant we find that the obligation to supply copies of documents is

confined only to material and relevant documents and the enquiry would be vitiated only if the

non- supply of material and relevant documents when demanded may have caused prejudice to

the delinquent officer.

In State of Madhya Pradesh v. Chintaman, the respondent who was a police

officer was dismissed from service on certain charges. The High Court of Madhya Pradesh

quashed the order of dismissal on the finding that the enquiry was held in violation of the

principles of natural justice in as much as the statement of witnesses recorded in the preliminary

enquiry were not supplied to the concerned officer as a result of which he could not effectively

cross- examine the witnesses produced before the enquiry officer. This Court while upholding

the view taken by the High Court, observed that the departmental enquiries should observe

rules of natural justice. The Court referred to the observations of Venkatarama Aiyar, J.

in Union of India v. T.R. Verma, [1958] SCR 499 "stating it broadly and without intending it

to be exhaustive it may be observed that rules of natural justice require that a party should have

the opportunity of adducing all relevant evidence on which he relies, that the evidence of the

opponent should be taken in his presence, and that he should be given the opportunity of cross-

examining the witnesses examined by that party, and that no material should be relied on

against him without his being given an opportunity of explaining them". Relying on the

aforesaid observations the Court held that right to cross-examine witnesses who give evidence

against a delinquent officer is a very valuable right and if effective exercise of that right is

prevented by the enquiry officer by not giving to officer relevant document to which he is

entitled, the enquiry cannot be said to have been held in accordance with the principles of

natural justice. In Triloki Nath v. Union of India, it was held that if a public servant facing

enquiry was not supplied copies of documents it would amount to denial of reasonable
62
opportunity. In that case the statement of witnesses recorded during the investigation of the

criminal case registered against the delinquent officer prior to the departmental proceedings

had not been supplied to him, as a result of which the delinquent officer was prejudiced in his

defence at the enquiry.

In State of Assam and Anr. v. Mahendra Kumar Das & ors.J dismissal of a

police sub-inspector in pursuance of a disciplinary enquiry held against him had been set aside

by the High Court on the ground that the enquiry officer had during the course of the enquiry

consulted the Superintendent of Police, Anti-Corruption Branch and had taken into

consideration certain material gathered from the AntiCorruption Branch, without making the

said material available to the sub-inspector. On appeal by the State of Assam this Court held

that it was improper for an enquiry officer during the conduct of an enquiry to collect any

material from outside sources and in not making that material available to the delinquent

officer. The Court observed that if the enquiry officer collects material behind the back of the

delinquent officer and such material is relied upon by the enquiry officer without being

disclosed to the delinquent officer, the enquiry proceedings would be vitiated. After making

these observations this Court recorded a finding that the enquiry officer had not taken into

consideration the material contained in the records of Anti-Corruption Branch, and therefore

failure to supply the material of the AntiCorruption Branch to the delinquent officer was of no

consequence and it could not vitiate the enquiry. The Court set aside the order of the High

Court on the finding that there had been no violation of principles of natural justice.

In State of Punjab v. Bhagat Ram, copies of statement of witnesses recorded

during investigation and produced at the disciplinary enquiry in support of the charges framed

against the delinquent officer were not supplied, instead a synopsis of the statements had been

supplied to him. This Court upheld the order of the High Court on the finding that it was unjust

63
and unfair to deny the government servant copies of statement of witnesses recorded during

investigation and produced in support of the charges levelled against the government servant.

In the absence of the copies of the statement of witnesses the government servant could not

have opportunity of effective and useful cross-examine of the witnesses produced during the

disciplinary enquiry. The Court observed that synopsis of statement did not satisfy the

requirement of giving the government servant a reasonable opportunity. Same view was taken

by this Court in State of Uttar Pradesh v. Mohd. Sharif, as in that case also copies of the

statement of witnesses recorded at the preliminary enquiry were not furnished to the delinquent

government officer, as a result of which the delinquent officer could not effectively cross-

examine the witnesses before the enquiry officer.

In Kashinath Dikshita v. Union of India & ors., this Court set aside the order of

dismissal of a police officer on the finding that during the departmental proceedings the officer

concerned was not supplied the copies of statements made by the witnesses at a pre-enquiry

stage and also the copies of the documents on which reliance was placed in support of the

charges, in spite of specific request being made by the officer. The Court held that the order of

dismissal was violative of Article 311 (2) in as much as the officer had been denied reasonable

opportunity of defending himself. While setting aside the order of dismissal the Court observed

that whether or not refusal to supply copies of documents or statements has resulted in prejudice

to an officer facing the departmental enquiry depends on the facts of each case. After making

this observation the Court examined the circumstances of that case and concluded that since 38

witnesses were examined against the officer and a large number of documents were relied upon

against him and the disciplinary authority should have supplied the copies of the statement of

witnesses recorded during the preliminary enquiry as we as the copies of the documents.

Wherein agreement with the view taken in this decision It is now well settled that if copies of

relevant and material documents including the statement of witnesses recorded in the
64
preliminary enquiry or during investigation are not supplied to the delinquent officer facing the

enquiry and if such documents are relied in holding the charges proved against the officer, the

enquiry would be vitiated for the violation of principles of natural justice. Similarly, if the

statement of witnesses recorded during the investigation of a criminal case or in the preliminary

enquiry is not supplied to the delinquent officer, as that would amount to denial of opportunity

of effective cross- examination. It is difficult to comprehend exhaustively the facts and

circumstances which may lead to violation of principles of natural justice or denial of

reasonable opportunity of defence.

This question must be determined on the facts and circumstances of each case.

While considering this question it has to be borne in mind that a delinquent officer is entitled

to have copies of material and relevant documents only which may include the copy of

statement of witnesses recorded during the investigation or preliminary enquiry or the copy of

any other document which may have been relied in support of the charges. If a document has

no bearing on the charges or if it is not relied by the enquiry officer to support the charges, or

if such document or material was not necessary for the cross-examination of witnesses during

the enquiry, the officer cannot insist upon the supply of copies of such documents, as the

absence of copy of such document will not prejudice the delinquent officer. The decision of

the question whether a document is material or not will depend upon the facts and

circumstances of each case.

In the instant case there is no denying the fact that a copy of paper No. 5 as

mentioned in the charge sheet was not supplied to the appellant and he was not permitted to

inspect the same. It appears that paper No. 5 was the report submitted by the Special Police

Establishment in respect of the criminal case of theft of coal, in which final report had been

submitted. After submission of final report in the criminal case disciplinary enquiry was

65
initiated against the appellant. Paper No. 5 (the report) was, however, not considered or relied

by the enquiry officer in recording findings against the appellant. We have perused the copy of

the report of the enquiry officer furnished to the Court by the appellant but we do not find any

reference to paper No. 5 therein. The enquiry officer has not either referred to nor relied upon

that report in recording findings on the charges framed against the appellant. In this view the

report (paper No. 5) was not a material or relevant document and denial of copy of that

document could not and did not prejudice the appellant and there was no violation of principles

of natural justice. The appellant's grievance that in the absence of report he could not effectively

cross-examine Shri A.C. Das, Dy. S.P. Of Special Police Establishment, the investigating

officer, is not sustainable. A copy of the statement as recorded by the enquiry officer has been

placed before us by the appellant on a perusal of the same we find that Shri A.C. Das, was

cross-examined at length in detail. His examination-in-chief is confined to one page while his

cross-examination runs into six full scape typed pages. The appellant has failed to point out as

to how he was prejudiced. In our opinion the appellant was not handicapped in cross-examining

Shri A.C. Das, his grievance that he was not afforded reasonable opportunity of defence is

without any merit.

In view of the above discussion we hold that the High Court was right, in

holding that the enquiry was fair and the principles of natural justice had not been violated. The

appeal fails and is accordingly dismissed. There will be no order to costs.

5.6 Colonisers vs Assistant Commissioner of Income Tax: 1992 41 ITD 57 Hyd

The assessee is a firm carrying on business as developers of land. During the

course of assessment for the assessment year 1985-86, the Income-tax Officer found that there

were 8 cash credits to the extent of Rs. 3.50 lakhs on different dates of the accounting year.

The assessee filed confirmation letters from all the seven persons concerned. In the

66
confirmation letter, the address of a creditor Sri A. Ravi Gopal was shown as 10-1 -462, West

Marredpalli, Secunderabad. The enquiries conducted by the Income-tax Officer through his

Inspector revealed that this house belonged to another gentleman Sri A.Rammohan and this

person denied any knowledge of the alleged creditor Sri A.Ravi Gopal. The Income-tax Officer

also found that Sri Ravi Gopal had opened a bank account with Bank of Tamilnadu on 8-4-

1985 with a sum of Rs. 50 and on 18-5-1985 the cheque issued by the assessee in repayment

of the debt at credit was encashed. This account was eventually closed on 19-11-1985. The

Income-tax Officer further found that the amount credited to his account was withdrawn by

self cheque and on the reverse side of the self cheque, Sri M. A.Qayyum, Accountant of the

assessee- firm, signed in token of having received cash of Rs. 2 lakhs from the bank. When Sri

Qayyum was examined on 1-3-1988, he stated that the amount withdrawn by him by signing

the self cheque was handed over to Sri G. Aravinda Reddy, partner of the firm. In a statement

recorded from Sri Aravinda Reddy, he stated that the sum of Rs. 2 lakhs received from Sri

Qayyum was immediately passed on to one Sri Udayabhanu, who is said to be an accountant

of Babu Khan Estate, and at that time the creditor was also present in the room. Sri Udyabhanu

is stated to have paid the money to the creditors. Though he said that he could remember the

face of this creditor, he was not sure whether he could produce the person. The Income-tax

Officer also found that the creditor was introduced to the bank by Sri M.A.R. Krishnam Raju,

Chartered Accountant. When the Income-tax Officer asked the assessee to produce Sri Ravi

Gopal, the assessee expressed inability to do so. During the course of assessment, certain

statements were recorded from the partner Sri Aravinda Reddy and also one or two witnesses

like Sri Qayyum, Accountant of the assessee-firm, and Sri M.A.R. Krishnam Raju, Chartered

Accountant who introduced one of the creditors, Sri Ravi Gopal, to the Bank of Tamilnadu.

On the above facts, the Income-tax Officer was of the opinion that the mere

filing of confirmation letters did not discharge the onus that lay on the assessee. When the
67
credit is in the name of a third party, the burden still lay on the assessee to establish the identity

of the third party. The assessee did not prove the transaction by establishing the identity of the

creditor, the capacity of such creditor and the genuineness of the transaction. Since the assessee

did not know the whereabouts of this creditor, he could not produce him before the Income-tax

Officer. The Inspector's enquiries also showed that the above person did not stay at Marredpally

at any time. During the course of recording statement on 21-3-1988, the Managing Partner was

informed that on verification at the address given of Sri Ravi Gopal and another creditor Sri A.

Suman Kumar, it came to light that the above persons never stayed at Marredpally address

given by them. These and other creditors were also not produced before the Income-tax Officer

and so he was of the opinion that the assessee did not discharge the responsibility of proving

the credits in the names of the above persons. The Income-tax Officer also found that in the

repayments of loans said to have been made by the assessee to M/s Coastal Engineers, Sri G.

Subba Rao and M/s Everest Enterprises, the same were transferred to Moghal Estates with

whom the assessee had entered into an agreement to develop the land. Similarly, in respect of

the credit in the name of Sri N. Srinivas, the Income-tax Officer found that the assessee-firm

returned the amount on 12-2-1985, and on the same day when the amount was transferred, it

was withdrawn by self cheque.

The learned First Appellate Authority ought to have deleted the additions made

by the Assessing Officer under Section 68 since the (Assessing Officer) failed to issue

summons and examine the lenders under Section 131 of the Act. This tantamounts

to violation of essential rules of Natural Justice and the additions ought to have been deleted

by the First Appellate Authority.

It was submitted before the Tribunal that a prayer was made before the Income-

tax Officer to compel the production of the creditors as the assessee has no power to compel

68
their presence. It accordingly requested the Income-tax Officer to issue summons to the

creditors concerned so that they could be examined. It was submitted that it was the duty of the

Income-tax Officer to enforce the attendance of a witness if his evidence is material. The

Income-tax Officer did not carry out this exercise. While making the addition, the Income-tax

Officer relied upon, without affording a reasonable opportunity to the assessee of meeting or

explaining the materials contained in the Inspector's report and so the resultant assessment

would be violative of principles of natural justice. While it may be open to the Income-tax

Officer to collect materials behind the back of the assessee, if he desires to use the material so

collected against the assessee, the assessee must be informed of the material and must be given

adequate opportunity of explaining it. In the light of the above arguments, it was submitted by

the assessee's representative that since the enquiry report and the sworn statements were not

given to the assessee, the Inspector's report relied on in the order was not provided to the

assessee and the request for the issuance of summons under Section 131 was not complied

with, the order of the Income-tax Officer was violative of principles of natural justice. The

learned departmental representative, on the other hand, defended the Income-tax Officer's

order. He claimed that adequate opportunity was provided to the assessee.

Now, the question next to be answered by us is as to whether additions made by

the Assessing Officer in violation of the principles of natural justice should be set aside as void

ab initio thus deleting it or should the case be restored to the Income-tax Officer with direction

for redoing. From a perusal of the orders of both the learned Members, it appears that both the

Members agree that there is failure to observe the principles of natural justice. While so, the

learned Judicial Member goes on to give a direction to the Income-tax Officer to re-examine

the matter, whereas the learned Accountant Member stops short of such direction to the

Income-tax Officer and also does not say that giving such direction is wrong. Even after

declaring that the additions made without affording adequate opportunity to the assessee is
69
liable to be quashed, he goes on to decide the issue on merits and gives his verdict for deletion

only after considering the merits and not before. In this view of the matter, we find that the

second question referred to us for our answer has two segments. The first segment is as to

whether the additions made in violation of the principles of natural justice should be set aside

as void ab initio. The second segment is as to whether the addition should be deleted or should

the case be restored to the Income-tax Officer with a direction for redoing. Now, let us take the

first segment of the second question.

As it has been discussed in the earlier paragraphs, there is plethora of cases

holding that violation of principles of natural justice makes the decision void as in every other

case ultra vires. The rules of natural justice operate as implied mandatory requirement, non-

observance of which amounts to arbitrariness and discrimination.

The principles of natural justice have been elevated to the status of Fundamental Rights

guaranteed in the Constitution of India as is evident from the decision of the Full Bench of the

Honourable Supreme Court in the case of Union of India v. Tulsiram Patel AIR 1985 SC 1416

at 1460, holding that the principles of natural justice have thus come to be recognised as being

a part of the guarantee contained in Article 14 of the Constitution of India because of the new

and dynamic interpretation given by the Supreme Court to the concept of equality which is the

subject matter of that Article and that violation of principles of natural justice by a State action

is a violation of Article 14. In fact, the principles of natural justice, in the realm of life and

liberty, would ipso facto even be read into Article 21 of the Constitution because any procedure

which affected life or liberty had to be a just, fair and reasonable procedure which necessarily

meant the principles of natural justice. That is why these principles have been called as part of

the universal law, as part of the rule of law and have also been termed as fair play in action.

Audi alteram partem is one of the fundamental principles of natural justice. A quasi-judicial or

administrative decision rendered or an order made in violation of the rule of audi alteram

70
partern is null and void and the order made in such a case can be struck down as invalid on that

score alone-Maneka Gandhi v. Union of India AIR 1978 SC 597, P. Gangadharan Filial v.

ACED [1980] 126 ITR 356 at pp. 365 to 367 (Ker.). In other words, the order which infringes

the fundamental principles, passed in violation of audi alteram partem rule, is a nullity. When

a competent court or authority holds such as order as invalid or sets it aside, the impugned

order becomes null and void-Navabkhan Abbaskhan v. State of Gujarat AIR 1974 SC 1471 at

1479. In the light of these decisions, we do opine that the addition made by the Assessing

Officer in violation of the principles of natural justice has to be set aside as void only in so far

as the additions by way of cash credits alone are concerned, which are separable from the other

additions in the order that are not challenged, and consequently becoming non est in the eye of

law.

There is a serious danger in making the ultra vires principle, or any part of it,

discretionary. Administrative inconvenience should not normally be allowed to distort the law.

This decision of the single Judge of the High Court of Kerala was confirmed by the decision

of a Division Bench of the same High Court in Addl. ITO v. Ponkunnam Traders [1976] 102

ITR 366.

In Tulsiram Patel' s case (supra) AIR 1985 SC 1416 the Five Member Constitution Bench of

the Supreme Court had to deal with the principles of natural justice and at para 95 at page

1460 Justice D.P. Madon for himself and on behalf of Y.V. Chandrachud, CJ., Tulzapurkar,

Pathak, JJ (Majority view) held that "the principles of natural justice have thus come to be

recognised as being a part of the guarantee contained in Article 14 because of the new and

dynamic interpretation given by this Court to the concept of equality which is the subject matter

of that Article. Shortly put, the syllogism runs thus: violation of anile of natural justice results

in arbitrariness which is the same as discrimination; where discrimination is the result of a State

71
action, it is a violation of Article 14,: therefore, a violation of a principle of natural justice by

a State action is a violation of Article 14. Article 14, however, is not the sole repository of

the principles of natural justice. What it does is to guarantee that any law or State

action violating them will be struck down. The principles of natural justice, however, apply not

only to legislation and State action but also where any Tribunal, authority or body of men, not

coming within the definition of 'State' in Article 12, is charged with the duty of deciding a

matter. In such a case, the principles of natural justice require that it must decide such matter

fairly and impartially".

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 CHAPTER - 6

CONCLUSION

6.1 Conclusion

In a social welfare State like India, the State has to perform a manifold function

to realize the constitutional dream of social, political and economic justice. ‘Justice’ is an ideal,

which cannot be attained without following the due process in every state action. Thus, every

judicial, quasi-judicial and administrative authority should adopt such practices and arrive at

decisions which are fair, just and reasonable. Principles of natural justice are the guiding

procedural norms, which aim at the prevention of miscarriage of justice, by providing

independent, impartial and unbiased adjudicatory body, guided by fair procedure and

accompanied by justifiable reasons.

The responsibility of administrative agencies is escalating at a rapid pace and

with rapid growth of state liability and civic needs of the people. Under Article 14 & Article

21 of the Constitution of India, the articles firmly deal with the principles of natural justice.

The violation of principles of natural justice shall results in arbitrariness; therefore, violation

of natural justice is also a violation of Right to Equality under Article 14. Natural Justice has

its foundation on good conscience and human values that follows a fair procedure. If the state

doesn‟t discharge its function in a just and fair manner the Rule of Law would lose its validity.

The administrative power in a democratic set-up is not allergic to fairness in

action and discretionary executive justice cannot degenerate into unilateral injustice. Nor is

there ground to be frightened of delay, inconvenience and expense, if natural justice gains

access. For fairness itself is a flexible, pragmatic and relative concept, not a rigid, ritualistic or

sophisticated abstraction. Its essence is good conscience in a given situation; nothing more-but

nothing less. “In modern times opinions have sometimes been expressed to the effect that
73
natural justice is so vague as to be practically meaningless. But I would regard these as tainted

by the perennial fallacy that because something cannot be cut and dried nicely weighed or

measured therefore it does not exist. The idea of negligence is equally insusceptible of exact

definition, but what a reasonable man would regard as fair procedure in particular

circumstances and what he would regard as negligence in particular circumstances are equally

capable of serving as tests in law, and natural justice as it has been interpreted in the court is

much more definite than that”.

Essentially, it can be seen that earlier the principles of natural justice were

applied to courts of law only but later on it has extended, to the tribunals exercising quasi-

judicial functions and then to the statutory authorities and the administrative authorities, who

have upon them, the responsibility of determining the rights, liberties and obligations of the

people.

In normal conditions, an action or a decision, judicial, quasi-judicial or

administrative, is affecting the rights of an individual is unthinkable. Currently, there can be

no process without affording both the parties a chance of fair hearing before an impartial,

rational judge. This is necessary for a society, which is governed by rule of law; and the

principles of natural justice promote the notion of the rule of law. The principles of natural

justice are great humanizing tools with endows law with fairness and secure justice to prevent

miscarriage of justice.

The main objective behind the reconciliation between the inclusion and

exclusion of protection of principles of Natural Justice is to harmoniously construe individual’s

natural rights of being heard and fair procedure as well as the public interest. Larger public

interest is to be allowed to override the individual’s interest where the justice demands. Thus,

exclusion of natural justice should not be readily made unless it is inevitable since the courts

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act on the presumption that the legislature intends to observe the principles of natural justice

and those Principles do not supplant but supplement the law of the land. Therefore, all statutory

provisions must be read, interpreted and applied so as to be consistent with the principles of

Natural justice, as more time passes.

The fundamental objective behind the compromise between the inclusion and

exclusion of protection of Principles of Natural Justice is to agreeably understand individual's

natural rights of being heard and fair procedure just as the public interest. Bigger public interest

is to be permitted to supersede the individual's interest where the justice demands After the

conversation of the principles of natural justice it could be concluded that the Courts both in

India and England according to administrative proceedings made different exception to the

necessity of Natural Justice Principles and procedure there off.

Be that as it may, these exceptions are altogether incidental and not indisputable,

each exception to be declared permissible or in any case solely after investigating the facts and

conditions of each case. The exceptions to the principles of natural justice in UK and India

mostly relate to administrative proceedings. The Courts in both these countries particularly in

India made different exceptions to the requirement of natural justice principles and procedures

considering different circumstances like time, place, and the captured risk, etc. winning at that

point of decision-making. It should be noticed that this load of exceptions is conditional and

not conclusive. They don't matter in similar way to situations which are not the same. They are

not rigid yet flexible.

These rules can be adopted and changed by rules and statutory rules additionally

by the Constitution of the Tribunal which needs to choose a specific matter and the rules by

which such council is represented. Each action of the authorities to be viewed as an special

case should be examined by the Courts relying on the common circumstances. The cases where

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natural justice principles have been prohibited by suggestion recommend that the Courts have

acknowledged the doctrine despite the fact that the assembly has not adopted express words

with that impact yet those cases seem to depend so intensely on their specific circumstances

that they don't yield an unmistakable general standard.

There are various exceptions to the rule of Natural Justice, courts in India have

applied the exceptions in various situations where the principles of Natural Justice can be put

aside. However, these exceptions are completely circumstantial and not definite in nature.

There are no documents or legislatures that regulate natural justice or its exceptions. The list

itself is not exhaustive in nature. Exceptions to the rule of natural justice can be studied from

other dimensions which may give us even more situations where other exceptions may arise.

In cases where natural justice principles are excluded by the judiciary, it implies

that the courts have adopted that particular notion regarding the dimension of the exception of

natural justice even if the law-making bodies have not adopted it. It is also an important point

to be noted that the principles of natural justice should not be overruled unless it is absolutely

necessary to do so. It is necessary to make sure that these exceptions don’t take over the actual

law of the land.

With this understanding of the debate between natural lawyers and legal

positivists in mind, let us turn to lawfulness conception of the virtue of justice. It might be

argued that my account of natural justice is radically inconsistent with the natural law tradition.

At the center of that tradition, the argument might go, is the idea that unjust laws are not true

laws—lex injusta non est lex.

From this, it might be argued that the natural law tradition is committed to the

fairness conception of the virtue of justice. That is, it might be thought that each human is

obligated to act in accord with her own first-order private judgments of fairness. If this were
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so, it would not establish that the idea of a virtue jurisprudence or of a natural virtue of justice

is inconsistent with the natural law tradition. Rather, it would establish that the versions of

virtue jurisprudence that are compatible with the natural law tradition are ones that incorporates

the fairness conception of the virtue of justice.

Nonetheless, I shall claim that a virtue jurisprudence that incorporates the

lawfulness conception of the virtue of justice can be reconciled with the natural law tradition.

There are two steps to this reconciliation. The first step focuses on the relationship between the

social norms and positive law. The second step focuses on the relationship between the status

of a norm as a nomos and the relationship of the norm to human flourishing.

The virtue of justice as lawfulness is a disposition to act lawfully—to internalize

the nomoi the social and legal norms of a given human society. Up to this point, I haven’t said

much about the relationship between social norms and legal norms. There are at least three

possible relationships that are relevant to the issue at hand:

1. First, the content of a legal norm can be congruent with content of a social norm (or set

of norms).

2. Second, a legal norm can be supported by a social norm (or set of norms) that recognizes

the legitimate authority of institutions with the power to create, modify, or extinguish

legal rules.

3. Third, a legal norm can be inconsistent with a social norm (or set of norms), either

because of conflict between the content of the two norms or because the institutions

that are the source of the legal norm lack legitimate authority given relevant social

norms.

With these three relationships in mind, let’s return to the natural-law-slogan,

“an unjust law is not a true law.” On the lawfulness interpretation of the virtue of justice, it
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might appear that this slogan expresses a very odd idea. If we substitute “unlawful” for

“unjust,” we get “an unlawful law is not a true law.” Is the notion of an “unlawful law” an

oxymoron? Not necessarily, that expression could refer to a statute that was not enacted through

the processes prescribed by law or a statute that was inconsistent with the constitution. But this

is not what natural lawyers mean by their slogan. There is, however, another way in which we

can interpret the slogan, once we recall that the lawfulness conception of the virtue of justice

is based on the nomoi rather than positive law. On this interpretation, the phrase “true law”

refers to positive laws that stand in one of the two right relationships to social norms—either

congruence or socially recognized legitimate authority. Positive laws that have content that is

inconsistent with the content of social norms or that are promulgated by institutes that lack

legitimate authority are not true laws.

There is another sense in which a virtue jurisprudence that embraces the

lawfulness conception of the virtue of justice can incorporate the natural law slogan that an

unjust law is not a true law. This sense derives from the notion that it is a condition for a norm

to count as a nomos that the norm must be such that it could be internalized by any fully virtuous

human. That is, the norm must be internalizeable by any fully virtuous agent—in possession

of the intellectual and moral virtues. For short, we can might say that for a norm to be a nomos

it must be such that it could be embraced by the phronimoi—by those humans in full possession

of the human excellences. Social norms or positive laws that clearly hinder rather that enable

human flourishing could not be internalized by a fully virtuous agent who has grasped the telos

or proper end that nomoi serve.

Our investigation of natural justice has been expressed in three movements.

From virtue ethics, we have developed the idea of virtue jurisprudence. From natural goodness,

we have derived the notion of natural justice. And from natural justice, we have come around

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to natural law. Let me conclude with a confident but controversial assertion. This movement,

from virtue ethics to a distinctive interpretation of the natural law tradition is no coincidence,

no mere “happy accident.” Thinking about natural law is rooted in Aristotle’s ethics. There is

a “natural” fit between natural law and natural justice—a match made explicit by the virtue of

justice as lawfulness. In normative legal theory, it is virtue jurisprudence that can provide the

best contemporary expression of the natural law thesis that there is an essential connection

between law and justice.

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