WA/1088/2005 of Sri A. Sai Kumar, Vs The Govt. of A.P. rep.by its Prl. Secretary, on 26 December 2005

::COMMON JUDGMENT::

Counsel for the Appellant : Ms. N. Shoba Counsel for the Respondents 1 : Government Pleader for Mines &

Geology

Counsel for Respondent No.2 : Mr. P. Veera Reddy.

th26December, 2005

Per G.S. Singhvi, CJ

These appeals are directed against order-dated 19.4.2005 passed by thelearned Single Judge in Writ Petition No.19281 of 2004. While A. Sai Kumar(appellant in Writ Appeal No.1088 of 2005) has prayed for modification of the orderunder challenge in so far as the learned Single Judge did not quash the grant ofmining lease in favour of M/s Ashok Minerals, the latter has filed Writ Appeal No.1699 of 2005 for quashing the order of the learned Single Judge who allowedthe writ petition filed by Sri A. Sai Kumar and remanded the revision filed by him tothe Central Government for fresh adjudication.

For deciding the issues arising in the appeals, we may briefly notice the facts.

In pursuance of notification dated 28.12.1992 issued by the Government of AndhraPradesh, the appellants and one Mr. A. Amarnath submitted their respective applications for grant of mining lease forbaryte in Survey No.288/45 of village V. Kothapalli. After scrutiny, Assistant Directorof Mines and Geology recommended the case of Mr. A. Sai Kumar for grant ofmining lease. Deputy Director of Mines and Geology and Director of Mines andGeology also made similar recommendations. The competent authority acceptedthese recommendations and granted mining lease to Sri A. Sai Kumar vide orderdated 1-12-2000. Simultaneously, the application of M/s. Ashok Minerals wasrejected. The latter challenged that order by filing revision petition before the CentralGovernment under Section 30 of Mines and Minerals (Development and Regulation)Act, 1957 (for short ‘the Act’), which was allowed by the revisional authority and thecase was remanded to the State Government for fresh consideration of theapplications. After hearing the appellants, the State Government vide its order-dated29.11.2003 rejected the application of

A. Sai Kumar and granted mining lease to M/s Ashok Minerals.

A. Sai Kumar challenged that order before the Central Government. The revisionpetition filed by him was dismissed by the Central Government vide order dated5.10.2004, the relevant extract of which is reproduced below:

“Heard the arguments of all the parties and also gone through therecords. It is evident from the impugned order that the petitionerhas been given opportunity of hearing under Rule 26(1) of MCR,1960 before deciding the application of the petitioner. The StateGovt., has statedly taken the decision in accordance with theprovision of Section 11(3) of the Act. We, therefore, upheld theorder of the State Government and Revision Application istherefore rejected.”

Sri A. Sai Kumar then filed Writ Petition No.19281 of 2004 with the prayer that ordersdated 29-11-2003 and 5-10-2004 passed by the State Government and the CentralGovernment respectively be quashed and the former may be directed to grant lease to him.

The learned Single Judge referred to the decisions of the Supreme Court in BhagatRaja v. Union of India, Travancore Rayons v. UOI and of this Court in R.B.SethShreeram Durgaprasad v. Secretary, Government of India and held that thereasonless order passed by the Central Government is liable to be treated asvitiated due to violation of principles of natural justice.

Sri P. Veera Reddy, learned counsel for Sri A. Sai Kumar submitted that inview of the conclusion recorded by him that the revisional order was vitiated due toviolation of the rules of natural justice, the learned Single Judge should havequashed grant of lease in favour of M/s.Ashok Minerals and remanded the matter tothe State Government for fresh consideration of all the applications.

Mrs.N. Shobha, learned counsel for M/s.Ashok Minerals argued that thedecision of the State Government to grant lease in favour of her client was legallycorrect and the revisional order passed by the Central Government could not havebeen nullified only on the ground of lack of reasons.

We have given serious thought to the arguments of the learned counsel. Inour opinion, the order under challenge does not suffer from any error warrantinginterference under Article 226 of the Constitution. It is well settled that every judicial,quasi judicial and even an administrative authority entrusted with the task ofdeciding lis between the parties or passing an order which affects the rights, interestor status of a person must not only record reasons in support of its conclusions, butsuch reasons should be communicated to the affected person. The requirement ofrecording reasons by judicial, quasi-judicial and even administrative authorities andcommunication thereof to the affected persons has been highlighted and reiteratedin various judgments of the Supreme Court including the often referred decisions inHarinagar Sugar Mills v. Shyam Sundar, M.P.Industries Limited v. Union ofIndia, Bhagat Raja v. Union of India, Mahavir Prasad Santoshkumar v. State ofU.P., Travancore Rayons v. UOI, Messrs Ajanta Industries v. Central Board ofDirect Taxes, New Delhi, Messrs Siemens Engineering & ManufacturingCompany v. Union of India, S.N. Mukherjee v. Union of India, Charan Singh v. Healing Touch HospitalState of Punjab v. Bagh Singh, State of Orissa v. Dhaniram Luhar, State ofRajasthan v. Sohan Lal, Cyril Lasrado v. Juliana Maria Lasrado, Mangalore Ganesh Beedi Works v. CIT and Manorama Sachan v. Lucknow Development Authority.

I n S.N. Mukherjee v. Union of India ([8] supra) the Constitution Bench of theSupreme Court noticed the legal position obtaining in Australia, England, UnitedStates of America, referred to a large number of judicial precedents on the subjectand laid down the following proposition:

“… Keeping in view the expanding horizon of the principles of natural justice,we are of the opinion, that the requirement to record reason can be regardedas one of the principles of natural justice which govern exercise of power byadministrative authorities. The rules of natural justice are not embodied rules.The extent of their application depends upon the particular statutoryframework whereunder jurisdiction has been conferred on the administrativeauthority. With regard to the exercise of a particular power by anadministrative authority including exercise of judicial or quasi-judicialfunctions the legislature, while conferring the said power, may feel that itwould not be in the larger public interest that the reasons for the order passedby the administrative authority be recorded in the order and be communicatedto the aggrieved party and it may dispense with such a requirement. It may doso by making an express provision to that effect as those contained in theAdministrative Procedure Act, 1946 of U. S. A. and the AdministrativeDecisions (Judicial Review) Act, 1977 of Australia whereby the orderspassed by certain specified authorities are excluded from the ambit of theenactment. Such an exclusion can also arise by necessary implication fromthe nature of the subject matter, the scheme and the provisions of theenactment. The public interest underlying such a provision would outweighthe salutary purpose served by the requirement to record the reasons. Thesaid requirement cannot, therefore, be insisted upon in such a case.”

In State of Punjab v. Bagh Singh[10 ](supra) the Supreme Court observed:

“Reasons introduce clarity in an order. Reasons substitute subjectivity byobjectivity. The emphasis on recording reasons is that if the decision revealsthe “inscrutable face of the sphinx”, it can, by its silence, render it virtuallyimpossible for the courts to perform their appellate function or exercise thepower of judicial review in adjudging the validity of the decision. Right toreasons is an indispensable part of a sound judicial system, reasons at leastsufficient to indicate an application of mind to the matter before court. Anotherrationale is that the affected party can know why the decision has goneagainst him. One of the salutary requirements of natural justice is spelling outreasons for the order made, in other words, a speaking-out. The “inscrutableface of a sphinx” is ordinarily incongruous with a judicial or quasi-judicialperformance.”

I n State of Rajasthan v. Sohan Lal[12] (supra) the Supreme Court whiledealing with the question whether the High Court was required to assign reasons forrecording reasons while disposing of petitions filed under Section 378 (3) Cr.P.C.observed:

“The hallmark of a judgment/order and exercise of judicial power by a judicialforum is to disclose the reasons for its decision and giving of reasons hasbeen always insisted upon as one of the fundamentals of soundadministration justice-delivery system, to make known that there had beenproper and due application of mind to the issue before the Court and also asan essential requisite of principles of natural justice. … The giving of reasonsfor a decision is an essential attribute of judicial and judicious disposal of amatter before courts, and which is the only indication to know of the mannerand quality of exercise undertaken, as also the fact that the court concernedhad really applied its mind. All the more so, when refusal of leave to appealhas the effect of foreclosing once and for all a scope for scrutiny of thejudgment of the trial court even at the instance and hands of the first appellatecourt. …”

I n Cyril Lasrado v. Juliana Maria Lasrado[13] (supra) the Supreme Courtconsidered the same question and held as under:

“… Reasons substitute subjectivity by objectivity. The emphasis on recordingreasons is that if the decision reveals the “inscrutable face of the sphinx”, itcan, by its silence, render it virtually impossible for the courts to perform theirappellate function or exercise the power of judicial review in adjudging thevalidity of the decision. Right to reason is an indispensable part of a soundjudicial system, reasons at least sufficient to indicate an application of mind tothe matter before court. Another rationale is that the affected party can knowwhy the decision has gone against him. One of the salutary requirements ofnatural justice is spelling out reasons for the order made, in other words, aspeaking out. The “inscrutable face of the sphinx” is ordinarily incongruouswith a judicial or quasi-judicial performance.”

In Testeels Limited v. N.M. Desai, Conciliation Officer and another, a FullBench of the Gujarat High Court speaking through P.N. Bhagwati,CJ, as hisLordship then was, made a lucid exposition of law on the subject and highlighted thenecessity of passing a speaking order by quasi judicial authorities in the following

1.

2.

3. “There are two strong and cogent reasons why we must insist that everyquasi-judicial order must disclose reasons in support of it. The necessity ofgiving reasons flows as a necessary corollary from the rule of law whichconstitutes one of the basic principles of our constitutional set-up. OurConstitution posits a welfare State in which every citizen must have justice—social, economic and political and in order to achieve the ideal of welfareState, the State has to perform several functions involving acts ofinterferences with the free and unrestricted exercise of private rights. TheState is called upon to regulate and control the social and economic life of thecitizen in order to establish socio-economic justice and remove the existingimbalance in the socio-economic structure. The State has, therefore,necessarily to entrust diverse functions to administrative authorities whichinvolve making of orders and decisions and performance of acts affecting therights of individual members of the public. In exercise of some thesefunctions, the administrative authorities are required to act judicially. Nowwhat is involved in a judicial process is well settled and as pointed out byShah J. in Jaswant Sugar Mills’s case, AIR 1963 SC 677 supra, a quasi-judicial decision involves the following three elements:

It is in substance a determination upon investigation of aquestion by the application of objective standards to factsfound in the light of pre-existing legal rules;question by the application of objective standards to factsfound in the light of pre-existing legal rules;

Issues

It declares rights or imposes upon parties obligations affectingtheir civil rights; andtheir civil rights; and The investigation is subject to certain procedural attributescontemplating an opportunity of presenting its case to aparty, ascertainment of facts by means of material if adispute be on question of fact, and if the dispute be onquestion of law, on the presentation, of legal argument,and a decision resulting in the disposal of the matter onfindings based upon those questions of law and fact.contemplating an opportunity of presenting its case to aparty, ascertainment of facts by means of material if adispute be on question of fact, and if the dispute be onquestion of law, on the presentation, of legal argument,and a decision resulting in the disposal of the matter onfindings based upon those questions of law and fact.

Another reason of equal cogency which weighs with us in spelling outthe necessity for giving reasons is based on the power of judicial reviewwhich is possessed by the High Court under Article 226 and the SupremeCourt under Article 32. The High Court under Article 226 and the SupremeCourt under Article 32 have the power to quash by certiorari a quasi-judicialorder made by an administrative officer and this power of review exercisableby issue of certiorari can be effectively exercised only if the order is aspeaking order and reasons are given in support of it. If no reasons are given,it would not be possible for the High Court or the Supreme Court exercisingits power of judicial review to examine whether the administrative officer has made any error of law in making the order. It would be the easiest thing for anadministrative officer to avoid judicial scrutiny and correction by omitting togive reasons in support of his order. The High Court and the Supreme Courtwould be powerless to interfere so as to keep the administrative officer withinthe limits of the law. The result would be that the power of judicial reviewwould be stultified and no redress being available to the citizen, there wouldbe insidious encouragement to arbitrariness and caprice. The power ofjudicial review is a necessary concomitant of the rule of law and if judicialreview is to be made an effective instrument for maintenance of the rule oflaw, it is necessary that administrative officers discharging quasi-judicialfunctions must be required to give reasons in support of their orders so thatthey can be subject to judicial scrutiny and correction.”

Although, the learned Single Judge did not refer to the aforementionedjudgment of the Full Bench of Gujarat High Court, he rightly relied on two judgmentsof the Supreme Court in Bhagat Raja’s case (cited supra-1) and TravancoreRayons’case (cited supra-2) and one judgment of this Court in R.B. Seth ShreeramDurgaprasad’s case (Cited supra-3), for coming to the conclusion that the orderpassed by the Central Government was totally devoid of reasons and did not satisfythe test of a speaking order. The use of the stock phrases and expressions in therevisional order passed by the Central Government cannot be a substitute of therequirement of recording of reasons. In our view, the failure of the revisional authorityto direct its attention to the points raised in the revision petition filed by Sri A. SaiKumar afflicted the revisional order with a patent illegality and the learned SingleJudge did not commit any error by quashing the same.

However, we do not find any merit in the argument of

However, we do not find any merit in the argument of Sri P. Veera Reddy that the lease granted in favour of M/s. Ashok Minerals shouldbe nullified by the learned Single Judge. Once the learned Single Judge came to theconclusion that the order passed by the revisional authority was vitiated due toviolation of the rules of natural justice, the only course open to him is to nullify thatorder and remit the case for fresh decision. This is precisely what has been done bythe impugned order. Therefore, we do not see any reason to issue a direction forcancellation of the lease of M/s.Ashok Minerals.

For the reasons mentioned above, the appeals are dismissed.

At this stage, learned counsel for the parties jointly made a request that theCourt may direct the revisional authority to decide the revision within a specified time frame. This request of the learned counsel is reasonable and is accepted.Accordingly, the revisional authority is directed to decide the revision petition of Sri A. Sai Kumar within two months from the date of submission/receipt of certifiedcopy after giving reasonable opportunity of hearing to both sides.

Date: 26[th] December, 2005

G.S. SINGHVI, CJ

R. SUBHASH REDDY, J

Pnb / vtv / svs