A.K. Sharma vs Director General Of Civil ...
2002 Latest Caselaw 595 Del

JUDGMENT

Madan B. Lokur, J.

1. Appellant No.1 is a shareholder in Appellant No.2 which is an unlisted public limited company incorporated under the Companies Act, 1956. Appellant No.2 (hereinafter referred to as the Appellant Company) is in the aviation business and operates a non-scheduled air transport service, an air taxi service and an agricultural spraying service. It has a fleet of 8 helicopters and 2 planes and carries on its operations from 5 bases located at Mumbai, Delhi, Kolkata, Bhubaneshwar and Shimla. It claims to permanently employ about 200 persons for its operations throughout the year. The investment of the Appellant Company in the aircrafts, equipment and facilities is said to be approximately Rs. 100 crores and its annual overheads for maintaining its operations is said to be Rs. 25-30 crores.

2. The Appellant Company had three licenses or permits for carrying on its aviation business. These permits, issued under the provisions of the Aircraft Act, 1934, and the Aircraft Rules, 1937 read with the Civil Aviation Regulations are as under:

i) Agricultural Aircraft Operators Permit No.1/1993.

ii) Non-scheduled Air Transport Permit No.1/1993.

iii) Air taxi Permit No. 2/1995.

3. The three permits abovementioned were valid from 20th April, 2001 till 19th April, 2002. All of a sudden these permits were cancelled by an order dated 5th September, 2001. It is the correctness of this cancellation which is in issue before us.The cancellation was on the ground that the "competent authority has refused security clearance to the directors of MESCO Airlines Ltd. (the Appellant Company) and the firm itself."

4. Learned counsel for the parties made their submissions on 19th February and 4th April, 2002 when judgment was reserved.

5. During the course of this judgment, reference will be made to the Aircraft Act, 1934 and the Aircraft Rules, 1937 which are hereafter, for convenience, referred to as the Act and the Rules respectively.

The facts

6. The Appellant Company was incorporated sometime in 1991. Its directors from 1993 have been J.K. Singh, Rita Singh, Natasha Singh and Dushyant Kumar Singh. Sometime in June 1995, Air Marshal Denzil Keelor was also inducted in the Board of Directors of the Appellant Company.

7. The permits granted to the Appellant Company in 1993 and 1995, though for a limited period, were renewed by the Respondents from time to time apparently without any objection raised by them. For the first time on 7th January, 2000 the Appellant Company was informed by a letter that the operating permits "cannot be renewed unless all its directors are cleared from security angle." The Appellant Company informed the Respondents that all the its directors have already been granted security clearance since November, 1993 and requested for renewal of its permits.

8. The Appellant Company was thereafter permitted to operate some of the aircrafts till 31st January, 2000 and then till 31st March, 2000. The fleet was completely grounded with effect from 1st April, 2000.

9. On 4th April, 2000, the Appellant Company again requested the Respondents to extend/renew its permits. The Respondents were also informed that three of its directors, namely, J.K. Singh, Rita Singh and Natasha Singh have resigned form the Board of Directors and that the remaining directors, namely, Dushyant Kumar Singh and Air Marshal Denzil Keelor continue to function as directors of the Appellant Company. By another letter dated 25th April, 2000 the Appellant Company informed the Respondents that it was planning to broad base its Board by including new directors, subject to security clearance. The details of the proposed directors Gautam Sinha, Dhruv Singh and Shipra Singh were enclosed for security clearance.

10. In the meanwhile, the aviation permits of the Appellant Company were renewed from 20th April, 2000 up to 19th April, 2001. The Respondents raised no objection to the resignation of three directors of the Appellant Company or to the proposed induction of three new directors, at least from the security aspect, while renewing the permits.

11. Much later, on 16th January, 2001 the Respondents wrote to the Appellant Company to confirm whether the three proposed directors had in fact been appointed as directors of the Appellant Company or not. The Appellant Company was told that if they had not yet been appointed, the proposal may be kept in abeyance till such time security clearance is given by the verification authority. In response, by a letter dated 5th February, 2001 the Appellant Company informed the Respondents that these three persons had not yet been appointed as directors of the Appellant Company. The Respondents were informed, in addition, that the Appellant Company proposed to induct two more directors, namely, Gurinderjit Singh and G.S. Nagi who were said to be connected with the aviation industry for a long time. On being asked to do so, the Appellant Company submitted the details of these two proposed directors on 13th February, 2001.

12. It appears that in the meanwhile, Air Marshal Keelor also resigned from the Board of Directors. Dushyant Kumar Singh, however, continued to the Board while the Appellant Company awaited security clearance in respect of Gautam Sinha, Dhruv Singh and Shipra Singh. The Appellant Company also awaited a response from the Respondents with regard to security clearance in respect of Gurinderjit Singh and G.S. Nagi. This was the factual position as on 26th March, 2001 as stated by the Appellant Company in its letter of the same date wherein the Respondents were requested for further renewal of its permits for a period of one year with effect from 20th April, 2001 till 19th April, 2002.

13. By a letter dated 10th April, 2001 the Respondents renewed all the permits granted to the Appellant Company for a period of one year that is from 20th April, 2001 to 19th April, 2002.

14. All of a sudden, by a letter dated 5th September, 2001 the Respondents informed the Appellant Company that:

a) The competent authority has refused security clearance to the directive of the Appellant Company and the Appellant Company itself.

b) The Ministry of Civil Aviation has, therefore, decided on cancel the permits issued to the Appellant Company.

15. The Appellant Company was advised to discontinue commercial operations with the aircrafts endorsed on the three permits and to return the permits in original.

16. Immediately thereafter the Appellants filed CW No.5526/2001 challenging the validity of the order dated 5th September, 2001. The writ petition was heard by a learned Single Judge of this Court. In his judgment and order dated 21st December, 2001, the learned Single Judge analysed the case law cited by learned counsel and concluded that:

"..(I)t is manifest that rule audi alterm partem is to be complied with before an administrative order affecting the civil rights of a person is passed. In ordinary circumstances the principles of natural justice has to be followed and hearing is to be provided before the action is taken but there may be some extraordinary circumstances where action brooks no delay a post-decision hearing can then be provided to the affected person.."

17. On the facts of the case it was held by the learned Single Judge that:

"...The cancellation had affected the civil right of the petitioner in carrying on their business. It seems that the license of the petitioner has been cancelled for security clearance reasons, which was not granted to its Directors. The respondent also considered cancellation in public interest and for the public safety and national security. Though, the public security and national security have not been elaborated and explained in the counter affidavit but in case the petitioner (Respondents) had some material or evidence against the respondent (Petitioners) which called for an immediate action brooking no delay, the respondent could have given the opportunity of post decisional hearing to the petitioner. It has not been done. The respondent could not have taken shelter behind an alleged emergent situation for not following principles of natural justice and denying right of hearing to the petitioner. Therefore, the order of the respondent DGCA impugned is not sustainable in law."

18. The learned Single Judge made a reference to the counter affidavit filed on behalf of the Respondents and said:

"However, in the counter affidavit a great deal of emphasis has been given to the existence of some material which justified the cancellation of the permits of the petitioner in public interest, for public safety and for national security. Therefore, in the peculiar facts and circumstances, it does not seem justified to quash the impugned order and then ask the respondent to give reasonable opportunity of hearing to the petitioner before taking appropriate action under law. It seems to be an extraordinary circumstances which justify the grant of at least post-decisional hearing to the petitioner. Accordingly, it is directed that the respondent be given a reasonable opportunity of hearing to the petitioner before taking a decision of affirming the order or recalling the order impugned in this petition within one month."

19. Feeling aggrieved by the order passed by the learned Single Judge, the Appellants preferred an appeal under Clause X of the Letters Patent. During the pendency of the appeal, the Respondents gave a post-decisional hearing to the Appellants and by an order dated 19th February, 2002 affirmed the cancelation order dated 5th September, 2001. The Appellants sought an amendment of the grounds of appeal to impugn the order dated 19th February, 2002 but during the hearing of the appeal, it was submitted that if the judgment and order of the learned Single Judge dated 21st December, 2001 is set aside, the post-decisional hearing and the consequent order would be non est and there would be no reason to challenge the order dated 19th February, 2002. Learned counsel for the Appellants is right in making this submission.

20. Consequently, what we have to first decide is the correctness of the judgment and order dated 21st December, 2001 passed by the learned Single Judge and thereafter, if necessary, the correctness of the order dated 19th February, 2002 will have to be determined.

Case of the Respondents

21. The Respondents filed a short affidavit before us narrating the events which occurred after 5th September and 21st December, 2001. These events are not really relevant so far as the correctness of the impugned judgment and order is concerned or so far as the validity of the order of cancellation is concerned.

22. In the counter affidavit filed by the Respondents before the learned Single Judge, it was stated that one of the essential requirements for obtaining a license/permission to operate an air transport service is a prior security clearance by the Central Government in respect of the directors, chairman and the firm itself. Reliance in this regard was placed on Rule 133A and Rule 134 of the Rules. It was stated that this requirement of a prior security clearance is due to the nature of service provided by air transport operators and its implications on matters of national security, public safety and other considerations of a like nature.

23. Insofar as the Appellants are concerned, it was stated that initially security clearance had been granted with respect to the directors of the Appellant Company. Later on.

"...various adverse reports were received with respect to them. It had been revealed that Shri J.K. Singh and Ms. Natasha Singh were involved in case NO. RC-SIG-98/E-00 registered on the allegations that during the period 1992-97 they were parties to a Criminal conspiracy with an object to cheat the Insurance Company, banks, financial institutions, share-holders etc. Further various instances of forgery, falsification of accounts etc. were revealed against them. It was further revealed that Shri J.K. Singh Chairman and Ms. Natasha Singh Director of the petitioner company were also involved in case No. RC-11A/97-MUM registered on the allegations that they had conspired with others in the matter and allowed hanger No.10 and 35,000 sq. feet of land at Juhu Aerodrom Mumbai thereby causing wrongful loss to the Airport Authority of India to the tune of Rs.20.94 lacs (sic).

That the subsequently a request was received from the petitioner company informing that Shri J.K Singh, Mrs. Rita Singh, Ms. Natasha Singh and Air Marshal (Retd) Denzil Keelor had resigned and it was proposed to induct Ms. Shipra Singh and Mr. Gautam Sinha as Directors of the petitioner company. On enquiries it was revealed that the offices of the petitioner company were lying sealed by the CBI on charges of forgery and falsification or accounts involved crores of rupees. The Director of MESCO Group and other Senior Executives of the said group had been arrested in this connection. Ms. Shipra Singh whose name had been proposed had been released on bail, Mr. Gautam Singha whose name was proposed was wanted by the CBI for questioning. It was further observed that these three persons were belonging to the same family and had been brought in merely to circumvent the non-grant of clearance with respect to the other named Directors. Various other allegations of fraud and other criminal nature were revealed against the Director of the petitioner company."

24. According to the Respondents, it was revealed on investigation that:

"The company itself was involved in various cases of forgery and falsification of accounts to the tune of crores of rupees. The Director of MESCO Group was arrested in July 2000 and one of the Director, namely Ms. Shipra Singh was arrested and subsequently released on bail. Another Director namely Shri Gurinder Jeet Singh was in fact evading arrest. The office of the petitioner company was also found locked and not working at the given place. The conduct of the company itself was under investigation and criminal cases were also pending against the firm as also its Directors. It was, therefore, opined that it would not be advisable to grant security clearance not only to the Directors of the firm but also to the firm itself.

That as the Directors of the firm as also the petitioner company itself had failed to obtain the necessary security clearance, the respondent No.1 exercising its power under Rule 19(3)(c) of the Air Craft Rules, 1937 cancelled the permit issued to the petitioner company."

(Emphasis given)

25. Quite clearly, the allegedly dubious background of the directors and the proposed directors of the Appellant Company as well as their alleged financial irregularities led the Respondents to cancel the permits granted to the Appellant Company and its directors "in public interest and in the interest of public safety and National Security." This action was taken under the provisions of Rule 19(3)(c) of the Rules.

26. In the counter affidavit, the Respondents have also made a reference to Section 6 of the Act which deals with the emergency power to cancel a license or a permit. It is not specifically stated anywhere in the affidavit filed by the Respondents that action was taken under this Section to cancel the permits granted to the Appellant Company. Infact what has been stated in the counter affidavit is that:

"...The circumstances found against the petitioner company warranted an immediate action on the part of respondent No. 1 without any further delay on its part. Grant of a show cause notice or hearing apart from being expressly ruled out by the Air Craft Act and the Rules framed there under, would further have resulted in totally negation of the power jeopardizing the public safety and national security. It was under these emergent circumstances that the power to cancel the approval granted in favor of the petitioner company was exercised by respondent No. 1"

It is further stated that:

"...While the exercise of power to cancel in the case of violation of any of the terms of the permit does require issuance of a show cause notice to be heard, the exercise of power which are in the nature of sovereign power entitling the respondent No. 1 to cancel the permit on the ground of public safety and national interest do not envisage any grant of show cause notice or hearing before exercise of such power. The power vested in respondent No. 1 in cases to breach of conditions of permit are contained in Clause 15 of the Schedule XI to Air Craft Rules, 1937 while the power to determine the permit on grounds of national security and public safety are, apart from being inherited from the authority itself are contained in Section 6 of the Air Craft Act read with Rule 19(3)(c) of the Air Craft Rules."

27. The Respondents have concluded in their counter affidavit that:

"The facts which have gone into the refusal of security clearance to the petitioner company can also not be termed as totally irrelevant or extraneous. Involvement in various and criminal cases, financial irregularities, forgery, falsification of accounts and other complaints of like nature are relevant and cogent circumstances which the respondents were entitled to take into consideration while granting or refusing to grant security clearance to the petitioner company.."

28. Section 6 of the Act to which reference has beeb made by the Respondents reads as under:-

6. Power of Central Government to make orders in emergency, - (1) If the Central Government is of opinion that in the interest of the public safety or tranquillity the issue of all or any of the following orders is expedient, it may, by notification in the official Gazette,-

(a) cancel or suspend, either absolutely or subject to such conditions as it may think fit to specify in the order, all or any license or certificate issued under this Act;

(b) prohibit either absolutely or subject to such conditions as it may think fit to specify in the order, or regulate in such manner as may be contained in the order, the flight of all or any aircraft or class or aircraft over the whole or any portion of India;

(c) prohibit, either absolutely or conditionally, or regulate the erection, maintenance or use of any aerodrome, aircraft factory, flying-school or club, or place where aircraft are manufactured, repaired or kept, or any class or description thereof: and

(d) direct that any aircraft or class of aircraft, or any aerodrome, aircraft factory, flying school or club, or place where aircraft are manufactured, repaired or kept, together with any machinery, plant, material or things used for the operation, manufacture, repair or maintenance of aircraft shall be delivered, either forthwith or within a specified time, to such authority and in such manner as it may specify in the order, to be at the disposal of Government for the public service.

(1A) xxx xxx xxx

(2) xxx xxx xxx

(3) xxx xxx xxx

(4) xxx xxx xxx

29. Rule 19(3)(c) of the Rules, in exercise of which the permits granted to the Appellant Company were cancelled, reads as under:-

19. Cancellation, suspension or endorsement of licenses, certificates, authorisation and approval.-

(1) xx xx xx

(2) xx xx xx

(3) If the Central Government is satisfied that there is sufficient ground for doing so or, in the case of suspension during investigation that suspension is necessary in the public interest, it may, for reasons to be recorded in writing,-

(a) xx xx xx

(b) xx xx xx

(c) cancel any certificate, rating or license, authorisation and approval; or

(d) xx xx xx

Decision of the issues that arise

30. The learned Single Judge proceeded, with respect on the erroneous basis that some emergent situation had arisen which warranted the immediate cancellation of the permits granted to the Appellants. This was clearly not so for two reasons. Firstly, the categorical statement of the Respondents on affidavit is that action was taken against the Appellant Company in terms of Rule 19(3)(c) of the Rules. This Rule does not deal with any emergent situation unlike Section 6 of the Act. Therefore, on the statement of the Respondents it is clear that no emergent situation had arisen which necessitated the immediate cancellation of the permits granted to the Appellant Company and its directors.

31. Secondly, Section 6 of the Act requires the order of cancellation to be notified in the Official Gazette. It is not the case of the Respondents that the cancellation of the permits granted to the Appellant Company was ever notified in the Official Gazette. Therefore, there was no emergency in cancelling the permits granted to the Appellant Company and action prejudicial to the interests of the Appellants was taken only in exercise of power conferred by Rule 19(3)(c) of the Rules.

32. The law is now very well settled that even in respect of an administrative action which affects the civil rights of a citizen (as in the present case and as held by the learned Single Judge) the principles of natural justice would automatically come into play unless they are specifically excluded or excluded by necessary implication. (See for example Smt. Maneka Gandhi v. Union of India and Another) , Mohinder Singh Gill and another v. the Chief Election Commissioner, , Swadeshi Cotton Mills v. Union of India, , Liberty Oil Mills and others v. Union of India and others, and Raghunath Thakur v. State of Bihar and Ors., `JT 1998(4) SC 728). Rule 19(3)(c) of the Rules does not specifically, or even by implication, exclude the principles of natural justice. This being so, the least that the Respondents could have done was to issue a show cause notice to the Appellants indicating the facts on the basis of which it was proposed to cancel all their permits which were valid till 19th April, 2002. Admittedly, no show cause notice was issued to the Appellants. In fact, the Appellants were not even given a hint of the possibility of a cancellation of the permits. For this reason, we hold that the order of cancellation dated 5th September, 2001 was illegal and it was rightly held by the learned Single Judge as being "not sustainable in law."

33. Even otherwise, the Respondents have shown absolutely no urgency or any emergency having arisen for cancelling the permits granted to the Appellant Company. We say this because the Respondents twice renewed the permits granted to the Appellant Company after three of its directors, namely, J.K. Singh, Rita Singh and Natasha Singh had resigned with effect from 3rd April, 2000. The Appellant Company had proposed to induct Gautam Sinha, Dhruv Singh and Shipra Singh as its directors (letter dated 25th April, 2000) and Gurinder jit Singh and G.S. Nagi (letters dated 5th and 13th February, 2001). These persons had not been granted clearance from the security point of view by the Respondents. Nevertheless, the Respondents extended the validity of the permits granted to the Appellant Company first for a period of one year from 20th April, 2000 to 19th April, 2001 and then again from 20th April, 2001 to 19th April, 2002.

34. Why the extension was twice granted in the absence of any security clearance has not been explained by the Respondents. It appears that the grant of security clearance is a red herring or a necessary but empty formality rather than a sine qua non for the renewal of a permit, otherwise two successive renewals would not have been granted to the Appellants. It is one thing for the Respondents to say that they are concerned about public safety and national security and another thing to use these phrases as stic and a club to bring to heel those over whom they exercise administrative suzerainty.

35. Insofar as the question of a post-decisional hearing is concerned, the learned Singh Judge analysed the case law and rightly concluded that the question of a post-decisional hearing is relevant only if an action is taken on an emergency basis and in extraordinary circumstances where the action brooks no delay. In the present case, we have already held that no emergent situation was brought out by the Respondents inasmuch as power under Section 6 of the Act was not exercised by issuing a notification in the official Gazette. Therefore, the question of a post-decisional hearing did not arise. The result is that the order passed by the Respondents on 19th February, 2002 (which is consequential in nature)

cannot have any affect whatsoever.

36. For all these reasons we are of the view that the order dated 5th September, 2001 passed by the Respondents cannot be upheld and is liable to be set aside. It is so ordered. The order of the learned Single Judge dated 21st December, 2001 in so far as it directs a post-decisional hearing to the Appellants is also se aside.

Additional issue

37. Learned counsel for the Appellants submitted that the action of the Respondents has severely damaged their reputation and has brought their business to a complete stand still. He submitted that the Appellants are entitled to compensation from the Respondents for loss of business. It was submitted that out of a period of 12 months fro which the permits were granted, the Appellants have not been able to utilise them for at least 7 months. In this view of the matter, the Appellants pray for three alternative reliefs:-

i) A direction permitting the Appellants to exploit the permits for a full period of 12 months;

ii) The Appellants be paid some compensation for the illegal cancellation of the permits and the quantum of the compensation may be determined by a commission to assess the loss suffered by the Appellants; and

iii) A direction to the Respondents to expeditiously decide, within a period of two weeks, any application made by the Applicants for renewal of their permits which are due to expire on 20th April, 2002.

38. In so far as the first two reliefs are concerned, the Appellants did not make any such prayer in the writ petition filed by them. No such prayer was made by the Appellants in the grounds of appeal. These prayers were made for the first time by the Appellants only when they filed the amended grounds of appeal wherein the order dated 19th February, 2002 was challenged, As such, both these prayers cannot be entertained at this stage by enlarging the scope of the relief prayed for in the writ petition as well as in the instant appeal.

39. Quite apart from this, whether the Appellants have suffered any loss and if so to what extent, is a matter which can only be decided after evidence is led by both the parties, particularly the Appellants. In writ jurisdiction we do not propose to record any evidence or give any finding with regard to the quantum of loss said to have been suffered by the Appellants. In their written submissions, the Appellants have admitted that we may not a in a position to assess the loss suffered by them and for this reason we should constitute a commission to assess and determine their loss. This is well beyond the jurisdiction conferred on us under Article 226 of the Constitution. It is not possible for us to direct the Respondents to constitute some kind of a commission of enquiry to ascertain how much loss, if any, has been suffered by the Appellants merely because they fell that invoking the writ jurisdiction of this Court may expeditiously remedy their problem. They have available to them the recourse of filing a civil suit for damages or loss of business. There is no valid reason why the Appellants should not resort to the available civil remedy like everbody else and instead ask for the constitution of a commission. We cannot permit them to bypass the remedy provided by law or create a new forum for adjudication. We, therefore, reject this contention raised by the Appellants.

40. Learned counsel for the Appellants, in his written submission, placed reliance on Comptroller and Auditor-General of India, Gian Prakash, New Delhi and Anr. v. K.S. Jagannathan and Anr. , B.C.

Chaturvedi v. Union of India and Ors. and Badrinath v. Government of Tamil Nadu and Ors. . The contention of learned counsel was that in extraordinary cases, the Court can suitably mould the relief to dispense justice.

41. In Jagannathan the Supreme Court considered the power of a High Court to issue a writ of mandamus under Article 226 of the Constitution "to reach injustice wherever it is found." The Supreme Court considered its earlier decisions rendered in Dwarkanath v. ITO, and Hochtief Gammon v. State of Orissa, . Reference was also made to Mayor of Rochester v. Regina, 1858 EB&E 1024 and King v. Revising Barrister for the Borough of Hanley, [1912] 3 KB 518 which approved and followed the principle in Mayor of Rochester. The Supreme Court also referred to Padfield v. Minister of Agriculture, Fisheries and Food, [1968] AC 997 and in paragraph 20 of the Report held:

"There is thus no doubt that the High Courts in India exercising their jurisdiction under Article 226 have the power to issue a writ of mandamus or a writ in the nature of mandamus or to pass orders and give necessary directions where the government or a public authority has failed to exercise or has wrongly exercised the discretion conferred upon it by a statute or a rule or a policy decision of the government or has exercised such discretion mala fide or on irrelevant considerations or by ignoring the relevant considerations and materials or in such a manner as to frustrate the object of conferring such discretion or the policy for implementing which such discretion has been conferred. In all such cases and in any other fit and proper case a High Court can, in the exercise of its jurisdiction under Article 226, issue a writ of mandamus or a writ in the nature of mandamus or pass orders and give directions to compel the performance in a proper and lawful manner of the discretion conferred upon the government or a public authority, and in a proper case, in order to prevent injustice resulting to the concerned parties, the court may itself pass an order or give directions which the government or the public authority should have passed or given had it properly and lawfully exercised its discretion."

42. Chaturvedi dealt with the power of the Administrative Tribunal in reducing the punishment awarded by the Government. In his concurring opinion, Hansaria J referred to Bhagat Ram v. State of H.P, and said in paragraphs 25 of the Report that:

"No doubt while exercising power under Article 226 of the Constitution, the High Courts have to bear in mind the restraints inherent in exercising power of judicial review. It is because of this that substitution of the High Court's view regarding appropriate punishment is not permissible. But for this constraint, I would have thought that the law-makers do desire application of judicial mind to the question of even proportionality of punishment/penalty. ..... I would, therefore, think that but for the self-imposed limitation while exercising power under Article 226 of the Constitution, there is no inherent reason to disallow application of judicial mind to the question of proportionality of punishment/penalty. But then, while seized with this question as a writ court interference is permissible only when the punishment/penalty is shockingly disproportionate."

43. In Badrinath the contention urged was that the Supreme Court would not issue a mandamus to promote the appellant therein to the super-time scale nor to assess his grading. The Supreme Court considered the various decisions mentioned above and in paragraph 90 of the Report held:

"In the light of the above precedents, we have considered whether this is a fit case where this Court should issue a mandamus or remit the matter back to the State Government. After giving our anxious consideration to the facts of the case, we are of the view that having regard to our findings on Points 1 to 5 and to the continuous unfair treatment meted out to the Appellants by the State of Tamil Nadu - even as accepted by the Central Government in its comments - this is a pre-eminently fit case requiring the issue of a mandamus. We are, therefore, constrained to exercise all the powers of this Court for rendering justice and to cut short further proceedings."

44. So far as the facts of the present appeal are concerned, since no show cause notice was issued by the Respondents to the Appellants, we do not even know why the permits were cancelled. The allegation that the directors of the Appellant Company and the Appellant Company itself did not get security clearance, in the circumstances, means nothing at all. What was the nature of the security clearance required, why was security clearance not necessary for two years and t hen suddenly became necessary and was thereafter not given is not at all clear. It is also not clear whether the security clearance is expected to be concerned with the aviation business or whether it can relate to criminal cases and financial transactions which the directors of the Appellants Company are said to have illegally indulged in. From the averments made in the counter affidavit filed by the Respondents, it appears that the denial of "security clearance" is with reference to the misdemeanours and irregular financial transactions. What nexus, if any, does this have with aviation is not very clear. In other words, the factual basis and the reasons for the sudden cancellation of the permits granted to the Appellant Company raise too many questions. Notwithstanding this, case is not one out of the ordinary so as to warrant our giving any positive direction to the Respondents to permit the Appellants to carry on their aviation business, without any security clearance, whatever that might mean.

45. It cannot also be said that the Respondents have been victims of a "continuous unfair treatment". The cancellation of the permits granted to the Appellants was effected for the first and only time on 5th September, 2001. That the Respondents re-affirmed the decision after giving a post-decisional hearing to the Appellants was only to be expected since the Appellants were not told the specific allegations against them and, therefore, could not reply to them. This does not amount to a "continuous unfair treatment" meted out to the Appellants by the Respondents. Under the circumstances, we are of the view that none of the decisions cited by learned counsel for the Appellants assist us in charting a new course.

46. Reliance was also placed on Nilabati Behera (Smt.) Alias Lalita Behera (through the Supreme Court Legal Aid Committee) v. State of Orissa and Ors. . This case falls in a completely different genre inasmuch as it deals with custodial death and payment of compensation in that event. The principle laid down by the Supreme Court in grant of compensation in cases of custodial death can have no relevance to cases such as the present which deal with the cancellation of a permit granted to a citizen.

47. Similarly, in M.S. Grewal and Anr. v. Deep Chand Sood and Ors. , the Supreme Court was dealing with the loss of lives, in this case of school children who had gone on a picnic. Two of the teachers escorting the children were found guilty of negligence by the Central Bureau of Investigation and by the concerned District Court. In this background, among other things, the Supreme Court upheld the award of Compensation for loss of life. This case again has absolutely no relevance to the facts of the present case. The "justice oriented approach" referred to in Grewal is not intended to supplant the normal civil remedy available to a citizen in a case where an erroneous administrative decision is taken by the State, which decision may impact on the business activity of a citizen.

Conclusions and relief

48. Consequently, having considered the cases cited by learned counsel for the Appellants, we are of the view that we cannot enlarge the scope of Article 226 of the Constitution to the extent suggested nor can we determine monetary compensation, if any, which is said to be payable to the Appellants by way of loss of business nor can our jurisdiction be stretched to the extent of creating a new adjudicatory forum for the assessment of loss allegedly incurred by the Appellants.

49. In so far as the third prayer made by the Appellants in concerned, we are of the view that the request is reasonable. Moreover, since the Appellants have succeeded in the appeal, they are entitled to ask for this or a similar consequential relief particularly in view of the huge investments made by the Appellants, which have not been denied by the Respondents. We feel that the Appellants have been somewhat harshly treated and arbitrarily dealt with by the Respondents without any sense of accountability. Consequently, it would be in the fitness of things if the Respondents are directed to decide any application made by the Appellants for renewal of the permits granted to them within a reasonable time. We, therefore, direct that in the event the Appellants make applications for renewal of the permits granted to them, the Respondents shall take a decision thereon within four weeks from the date of receipt of the applications. In case the Respondents decide to reject the applications for renewal of the permits, it shall be by a speaking order and after giving a hearing to the Appellants.

50. We may mention that the learned Additional Solicitor General had handed over certain official files concerning this case with the relevant pages being flagged. We have gone through these documents but find that they do not add anything to what has already been stated in the counter affidavit of the Respondents.

51. The appeal is allowed. Considering that both the parties were represented by eminent senior counsel, we award costs to the Appellants which the assess at Rs. 25,000/-. This will be payable by the Respondents to the Appellants within four weeks.