Delhi High Court
Andaleeb Sehgal vs Union Of India And Anr. on 28 September, 2010
Author: Dipak Misra,Chief Justice
* HIGH COURT OF DELHI AT NEW DELHI
Judgment Reserved on : 30th July, 2010
% Judgment Pronounced on: 28, September, 2010
+ WP(C) No.9783/2006
ANDALEEB SEHGAL ..... Petitioner
Through: Mr. Rajive Sawhney, Senior Adv.
with Mr. Vineet Jhanji, Adv.
Versus
UNION OF INDIA AND ANR. ..... Respondents
Through: Mr. C.S.Vaidyanathan, Senior Adv.
with Mr. Dalip Mehra, Adv. for R-1.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE A.K. SIKRI
HON'BLE MR. JUSTICE MANMOHAN
1. Whether reporters of the local papers be allowed to see the judgment?Yes
2. To be referred to the Reporter or not? Yes
3. Whether the judgment should be reported in the Digest? Yes
DIPAK MISRA, CJ
The petitioner invoked the jurisdiction of this Court under Article 226
of the Constitution of India for issue of a writ of certiorari for quashment of
the notifications dated 11.11.2005 issued by the respondent No.1, Union of
India, vide Annexures 3 and 4 to the writ petition and further to lancet the
rule framed on 20.1.2006 by the respondent No.2, the same being
unconstitutional. A further prayer was made for restraining the respondent
No.2 from publishing any finding against the petitioner, the same being
violative of Article 14 of the Constitution of India and Section 8 B of the
Commission of Inquiry Act, 1952 (for brevity "the Act").
W.P.(C) No.9783/2006 Page 1 of 35
2. A Division Bench hearing the matter had formulated the following
three questions for consideration:
"(i) Is the Constitution of a fact finding inquiry
commission / authority legally permissible de-hors the
provisions of the Commission of Inquiry Act, 1952?
(ii) Should resort to Section 11 of the Commission of
Inquiry Act, 1952, necessarily result in the application of
Sections 8B and 8C of the said Act to the proceedings
before the Inquiry Authority / Commission?
(iii) Is the right to demand copies of the documents and
affidavits, the right to be represented by a legal
practitioner and the right to cross-examine the witnesses
examined by the Commission available to a noticee
independent of Section 8B and 8C of the Act
aforementioned before an Inquiry Authority /
Commission established otherwise than under the
provisions of the said Act?"
3. As far as the question No.(i) is concerned, the Division Bench, after
hearing the learned counsel for the parties and placing reliance on P.R.
Nayak v. UOI & Ors. ILR 1973 (1) Delhi 747 and Brahma Nand Gupta v.
Delhi Administration & Ors. 41 (1990) DLT 212, concurred with the legal
position stated in the said decisions and eventually did not find any merit in
the contention raised by Mr.Sawhney, learned counsel appearing for the writ
petitioner. As far as the questions No. (ii) and (iii) are concerned, the
Division Bench addressed to certain aspects pertaining to questions No.(ii)
and (iii) and referred to the decisions in State of Bihar v. Lal Krishna
Advani & Ors (2003) 8 SCC 361, Ram Krishna Dalmia v. Justice
Tendulkar AIR 1958 SC 538 and Article 21 of the Constitution of India and
thereafter held thus:
W.P.(C) No.9783/2006 Page 2 of 35
"Need the persons whose conduct is being enquired into
or those likely to be affected, wait till the commission
concludes its proceedings and then challenge the findings
on the ground that the same are violative of the principles
of natural justice?, are matters that need to be examined
and authoritatively answered. This can in our view be
best done by a full bench of this court keeping in view
the importance of the questions that fall for
determination."
4. Because of the aforesaid, a Full Bench has been constituted and the
matter has been placed before us.
5. To appreciate the controversy from a proper perspective, it is
necessary to refer to certain facts in brief. On 11.11.2005, the Government
of India through the Ministry of Finance constituted an Authority named as
"Justice R.S. Pathak Inquiry Commission" to go to the root of certain
matters of definite public importance as set out in the terms of reference
specified in the said Resolution. The Terms of Reference of the Inquiry
Authority were stipulated as follows:
"(1) To inquire into the sources of information,
materials and documents that were available with the
Independent Inquiry Committee (appointed by the
Secretary General of the United Nations to investigate
the administration of the UN Oil-For-Food-Programme)
with reference to the Report (including the Tables) of the
said Committee pertaining to contracts bearing number
M/9/54 and number M/10/57 and to give its opinion on
the authenticity and reliability of the said sources,
materials and documents, and whether, in its opinion, the
purported transactions in oil are genuine or not.
(2) To inquire into the aforesaid information, materials
and documents, and any other material or evidence that
may be obtained by the Inquiry Authority, and to give its
opinion whether the references to Indian entities and
individuals pertaining to contracts bearing number
M/9/54 and number M/10/57 are justified or not.
W.P.(C) No.9783/2006 Page 3 of 35
(3) To inquire into the question whether any Indian
entity or individual received any money or other
consideration from, or paid any money or other
consideration to, any Government, agency, company,
firm or individual in connection with the purported
transactions in oil under the United Nations Oil-For-Food
Programme pertaining to contracts bearing numbers
M/9/54 and number M/10/57.
(4) To inquire into any other aspect or matter relevant
to the Inquiry pertaining to contracts bearing number
M/9/54 and number M/10/57.
(5) To make any recommendations or suggestions that
the Inquiry Authority may consider necessary or proper."
6. As is evident, the Commission issued a notice to M/s Hamdaan
Exports of which the present petitioner is a partner as it thought that he had
the information on such points or matters which may be useful for, or
relevant to, the subject of the inquiry. Be it noted, prior to the same, the
Commission had framed a set of guidelines / order called Justice R.S. Pathak
Inquiry Authority (Regulation of Procedure) Order, 2006 and the petitioner
was required to ensure compliance with the said order. It is worth noting
that after setting up the one-man Commission, the Central Government
issued a notification on 11.11.2005. It is necessary to reproduce the contents
of the said notification:
"MINISTRY OF FINANCE
(Department of Revenue)
NOTIFICATION
New Delhi, the 11th November, 2005
S.O.1593(E). - Whereas in pursuance of the
Resolution of Government of India in the Ministry of
Finance (Department of Revenue) Number 8/35/2005-
E.S., dated the 11th November, 2005, an Authority named
W.P.(C) No.9783/2006 Page 4 of 35
as the Justice R.S. Pathak Inquiry Authority has been set
up to go into the root of the certain matters of definite
public importance as set out in the terms of reference
specified in the said Resolution;
And whereas the Central Government is of the
opinion that the provisions of the Commissions of
Inquiry Act, 1952 (60 of 1952) specified in the Annexure
to this notification should be made applicable to the said
Authority.
Now, therefore, in exercise of powers conferred
under Section 11 of the Commissions of Inquiry Act,
1952 (60 of 1952), the Central Government hereby
directs that the provisions of the said Act specified in the
Annexure to this notification shall apply to the said
Authority.
ANNEXURE
The Commission of Inquiry Act, 1952 (60 of 1952)
Serial Provision of the Act
Number
(1) (2)
1. Sub-section (4) of Section 3
2. Section 4
3. Sub-section (2) of Section 5
4. Sub-section (3) of Section 5
5. Sub-section (4) of Section 5
6. Sub-section (5) of Section 5
7. Section 5A
8. Section 6
9. Section 9
10. Section 10
11. Section 10A
[F.No.8/35/2005-E.S.]
RAKESH SINGH, Jt. Secy."
7. As set forth, the respondent No.2 issued notice to the petitioner under
Section 5(2) of the Act directing the petitioner and his firm to furnish a
statement of facts alongwith documents within ten days from the receipt of
W.P.(C) No.9783/2006 Page 5 of 35
the notice. The petitioner filed an application stating therein that he has
neither been allowed any inspection nor has been provided with the copies
of the documents which are in possession of the Enforcement Directorate
and, hence, is not in a position to make a complete and full statement. He
also made a prayer to allow him a personal hearing to make submission
through his counsel. No reply was received by the petitioner but a further
notice was issued on 19.4.2006 directing to file his statement of facts within
ten days failing which it was mentioned that penal consequences would
follow. The petitioner through his counsel filed another application for
extension of time to file the statement of facts. On 3.5.2006, the respondent
No.2 sent a reply stating that the filing of his statement of facts through an
advocate was not permitted under the Rules of Procedure; however,
extension of seven days was granted for filing of his personal statement. On
9.5.2006, the respondent No.2 issued a notice requiring the petitioner to
appear in person alone alongwith all documents either in original or copies
thereof which are in his possession. The petitioner submitted before the
respondent No.2 that since the enquiry which was going to be conducted in
respect of the affairs of the petitioner was likely to affect his reputation by
any adverse comments and findings, he must be granted an opportunity of
hearing as he had the statutory right under Sections 8B and 8C of the Act.
As pleaded, the petitioner filed an affidavit before the Commission and
appeared before the respondent No.2 wherein he was confronted with the
documents.
W.P.(C) No.9783/2006 Page 6 of 35
8. We have only enumerated the facts to appreciate the question No.3
that has been referred to the larger Bench and not for any other purpose for
eventually after the reference is answered, the matter has to be placed before
the Division Bench for adjudication in accordance with law.
9. The crux of the matter is whether the petitioner has any right to be
represented by a legal practitioner and to cross-examine the witnesses
independent of Sections 8B and 8C of the Act. In this context, we may refer
to Sections 8B and 8C of the Act:
"8B. Persons likely to be prejudicially affected to be
heard. - If, at any stage of the inquiry, the Commission,-
(a) considers it necessary to inquire into the conduct
of any person; or
(b) is of opinion that the reputation of any person is
likely to be prejudicially affect by the inquiry,
the Commission shall give to that person a reasonable
opportunity of being heard in the inquiry and to produce
evidence in his defence:
Provided that nothing in this section shall apply
where the credit of a witness is being impeached.
8C. Right of cross-examination and representation
by legal practitioner. - The appropriate Government,
every person referred to in section 8B and, with the
permission of the Commission, any other person whose
evidence is recorded by the Commission, -
(a) may cross-examine a witness other than a witness
produced by it or him;
(b) may address the Commission; and
(c) may be represented before the Commission by a
legal practitioner or, with the permission of the
Commission, by any other person."
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10. The notification issued by the Central Government does not mention /
include the applicability of Sections 8B and 8C of the Act to the Authority in
question. Once the said provisions are not applied to an Authority, the said
provisions indubitably stand excluded.
11. The first question that arises for consideration is whether resort to
Section 11 of the Act necessarily results in the application of Sections 8B
and 8C of the Act to the proceedings before the Inquiry Authority /
Commission. To appreciate the issue raised, it is condign to refer to Section
11 of the Act which reads as under:
"11. Act to apply to other inquiring authorities in
certain cases - Where any authority (by whatever name
called), other than a Commission appointed under section
3, has been or is set up under any resolution or order of
the appropriate Government for the purpose of making an
inquiry into any definite matter of public importance and
that Government is of opinion that all or any of the
provisions of this Act should be made applicable to that
authority, that Government may, subject to the
prohibition contained in the proviso to sub-section (1) of
section 3, by notification in the Official Gazette, direct
that the said provisions of this Act shall apply to that
authority, and on the issue of such a notification that
authority shall be deemed to be a Commission appointed
under section 3 for the purposes of this Act."
[Emphasis added]
12. The submission of the learned counsel for the petitioner is that once
the Government issues the notification in the Official Gazette, the authority
is deemed to be a Commission appointed under Section 3 for the purposes of
the Act and if Section 3 is read in proper perspective, it would become a
Commission for all purposes and would have the power under Sections 8B
and 8C of the Act. Section 3 of the Act deals with the appointment of a
W.P.(C) No.9783/2006 Page 8 of 35
Commission. As there is a reference to the proviso of sub-section (1) of
Section 3, it is thought apt to reproduce sub-section (1) of Section 3 in
entirety. It reads as under:
"3. Appointment of Commission - (1) The
appropriate Government may, if it is of opinion that it is
necessary so to do, and shall, if a resolution in this behalf
is passed by [each House of Parliament or, as the case
may be, the Legislature of the State], by notification in
the Official Gazette, appoint a Commission of Inquiry for
the purpose of making an inquiry into any definite matter
of public importance and performing such functions and
within such time as may be specified in the notification,
and the Commission so appointed shall make the inquiry
and perform the functions accordingly:
Provided that where any such Commission has been
appointed to inquire into any matter -
(a) by the Central Government, no State Government
shall, except with the approval of the Central
Government, appoint another Commission to inquire into
the same matter for so long as the Commission appointed
by the Central Government is functioning;
(b) by a State Government, the Central Government
shall not appoint another Commission to inquire into the
same matter for so long as the Commission appointed by
the State Government is functioning, unless the Central
Government is of opinion that the scope of the inquiry
should be extended to two or more States."
13. The question that emerges for consideration is whether the Authority
(by whatever name called) other than a Commission appointed under
Section 3 becomes a deemed Commission on the issue of a notification and
would all other provisions under the Act get attracted in the case of a
Commission appointed under Section 3 for the purposes of the Act despite
the issue of a notification or which of the provisions would be applicable.
W.P.(C) No.9783/2006 Page 9 of 35
To appreciate the issue, it is apposite to understand the concept „shall be
deemed to be a Commission‟ in proper perspective. The word „deemed‟ has
its own signification. In this context, we may refer with profit to the
observations made by Lord Justice James in Ex Parte Salton, In re, Levy,
1881 (17) Ch D 746 which is follows:
"When a statute enacts that something shall be deemed to
have been done, which, in fact and truth was not done,
the Court is entitled and bound to ascertain for what
purpose and between what persons the statutory fiction is
to be resorted to and full effect must be given to the
statutory fiction and it should be carried to its logical
conclusion."
Lord Asquith, in East end Dwellings Co. Ltd. v. Finsbury Borough
Council, 1952 AC 109, had expressed his opinion as follows:
"If you are bidden to treat an imaginary state of affairs as
real, you must surely, unless prohibited from doing so,
also imagine as real the consequences and instances,
which, if the putative state of affairs had in fact existed,
must inevitably have followed from or accompanied
it...... The statute says that you must imagine a certain
state of affairs; it does not say that having done so, you
must cause or permit or imagine to boggle when it comes
to the inevitable corollaries of that state of affairs."
14. In Bengal Immunity Co. Ltd. v. State of Bihar, AIR 1955 SC 661, the
majority in the Constitution Bench have opined that legal fictions are created
only for some definite purpose. Their Lordships referred to the decision
rendered in East End Dwellings Co. Ltd. v. Finsbury Borough Council,
1952 AC 109 to highlight that a legal fiction is to be limited to the purpose
for which it was created and should not be extended beyond that legitimate
field.
W.P.(C) No.9783/2006 Page 10 of 35
15. In Hira H. Advani v. State of Maharashtra, AIR 1971 SC 44, while
dealing with a proceeding under the Customs Act, especially sub-section (4)
of Section 171-A wherein an enquiry by the custom authority is referred to,
and the language employed therein, namely, "to be deemed to be a judicial
proceeding within the meaning of Sections 193 and 228 of the Indian Penal
Code", their Lordships opined as follows:
"It was argued that the Legislature might well have used
the word "deemed" in sub-section (4) of Section 171 not
in the first of the above senses but in the second, if not
the third. In our view the meaning to be attached to the
word "deemed" must depend upon the context in which it
is used."
16. In M.K.Balakrishna Menon v. The Assistant Controller of Estate
Duty-cum-Income-tax Officer, AIR 1971 SC 2392, while interpreting
Section 7 of the Hindu Succession Act, 1956 wherein the words „shall be
deemed‟ are used, their Lordships have relied thus:
"9. ...The legal fiction also which has been introduced
should only be limited to that purpose and there can be
no justification for extending it..."
17. In Consolidated Coffee Ltd. v. Coffee Board, Bangalore, AIR 1980
SC 1468, the purpose of the word „deemed‟ occurring in Section 5(3) of the
Central Sales Tax Act, 1956 came for consideration. The issue that
emanated was whether a legal fiction has been created by use of the word
„deemed‟. Their Lordships noticed that the same word "deemed" has been
used by the legislature in Section 5(1) and Sections 3 and 4 of Chapter II of
the Central Sales Tax Act and opined that no legal fiction has been created
W.P.(C) No.9783/2006 Page 11 of 35
by the use of the word „deemed‟ in Section 5(3) of the Central Sales Tax
Act. It is fruitful to reproduce what has been exposited by their Lordships:
"11. ... It is true that the word "deemed" has been used
in S.5(3) but the same word has been used not merely in
S.5(1) but also in the other two Sections 3 and 4 of
Chapter II of the Central Sales Tax Act which has the
heading "Formulations of Principles for determining
when a sale or purchase of goods takes place in the
course of inter-State trade or commerce or outside a State
or in the course of export or import", the heading of
Chapter II on the face of it suggests that what is done
under Ss. 3, 4 and 5 including sub-s. (3) is formulation of
principles. Secondly, the word "deemed" is used a great
deal in modern legislation in different senses and it is not
that a deeming provision is every time made for the
purpose of creating a fiction. A deeming provision might
be made to include what is obvious or what is uncertain
or to impose for the purpose of a statute an artificial
construction of a word or phrase that would not otherwise
prevail, but in each case it would be a question as to with
what object the legislature has made such a deeming
provision. In St. Aubyn and Ors. v. Attorney General
1952 A.C.15 at p.53 Lord Radcliffe observed thus:
"The word 'deemed' is used a great deal in modern
legislation. Sometimes it is used to impose for the
purposes of a statute an artificial construction of a
word or phrase that would not otherwise prevail.
Sometimes it is used to put beyond doubt a
particular construction that might otherwise be
uncertain. Sometimes it is used to give a
comprehensive description that includes what is
obvious, what is uncertain and what is, in the
ordinary sense, impossible."
After making these observations the learned Law Lord
went on to hold that it was in the last of the three ways
(indicated in the observations) that the deeming provision
was made in S.58(2) of the Finance Act, 1940, which
came for interpretation before the House of Lords.
Similarly in Words and Phrases, Permanent Edition, Vol.
11A at page 181 it is explained that the word "deemed" is
also used to mean "regarded as being"; it is equivalent to
"shall be taken to be" (at page 185). In our view when
sub-sec. (3) of S. 5 uses the word "deemed" and says that
W.P.(C) No.9783/2006 Page 12 of 35
the penultimate sale "shall also be deemed to be in the
course of export" what is intended to be conveyed is that
the penultimate sale shall also be regarded as being in the
course of such export. In other words, no legal fiction is
created..."
[Underlining is ours]
18. In Maganlal v. M/s. Jaiswal Industries, Neemach, AIR 1989 SC
2113, while dealing with the fiction created under the State Financial
Corporations Act, 1951 under Sections 31(1) and 32(8) making the order for
sale a decree in a suit wherein the Financial Corporation was a decree-holder
and the debtor a judgment-debtor, their Lordships opined that the same is not
a decree for the purposes of applying Section 34 of the Code of Civil
Procedure because the legal fiction cannot be extended for treating an
application under Section 31(1) as a plaint for payment of Court fee. In this
regard, we think it apposite to reproduce what their Lordships have stated in
the said decision:
"29. ... Of course, in view of the limited scope of legal
fiction as indicated above the provisions in the Code shall
be applicable to an order of sale under the Act only with
regard to execution of that order as if it was a decree in a
suit and the Financial Corporation was a decree holder
and the debtor a judgment-debtor and this legal fiction
will not be capable of being extended so as to treat an
order of sale passed under the Act to be a decree in a suit
for any other purpose for instance applying Section 34 of
the Code as was sought to be done in the case of M/s.
Everest Industrial Corporation (AIR 1987 SC 1950)
(supra) nor could it be extended for treating the
application made under Section 31(1) of the Act as a
plaint for purposes of payment of court fee as was sought
to be done in the case of Gujarat State Financial
Corporation (AIR 1978 SC 1765)(supra)."
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19. In State of Tamil Nadu v. M/s. Arooran Sugars Ltd. AIR 1997 SC
1815, a Constitution Bench, while dealing with the deeming provision in a
statute, opined that the role of a provision in a statute creating legal fiction is
well settled. Their Lordships referred to the decisions in East End
Dwellings Co. Ltd. (supra), Chief Inspector of Mines v. Karam Chand
Thapar, AIR 1961 SC 838, J.K. Cotton Spinning and Weaving Mills Ltd. v.
Union of India, AIR 1988 SC 191, M. Venugopal v. Divisional Manager,
Life Insurance Corporation of India, (1994) 2 SCC 323 and Harish
Tandon v. Addl. District Magistrate, Allahabad, (1995) 1 SCC 537 and
came to hold that when a statute creates a legal fiction saying that something
shall be deemed to have been done which in fact and truth has not been
done, the Court has to examine and ascertain as to for what purpose and
between which persons such a statutory fiction is to be resorted to and
thereafter the courts have to give full effect to such a statutory fiction and it
has to be carried to its logical conclusion.
20. In State of Maharashtra v. Laljit Rajshi Shah & Ors., AIR 2000 SC
937, it has been held as follows:
"6. ... It is a well known principle of construction that
in interpreting a provision creating a legal fiction, the
Court is to ascertain for what purpose the fiction is
created, and after ascertaining this, the Court is to assume
all those facts and consequences which are incidental or
inevitable corollaries to giving effect to the fiction. But
in so construing the fiction it is not to be extended
beyond the purpose for which it is created, or beyond the
language of the Section by which it is created..."
[Emphasis supplied]
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21. From the aforesaid pronouncements, the principle that can be culled
out is that it is the bounden duty of the court to ascertain for what purpose
the legal fiction has been created. It is also the duty of the court to imagine
the fiction with all real consequences and instances unless prohibited from
doing so. That apart, the use of the term „deemed‟ has to be read in its
context and further the fullest logical purpose and import are to be
understood. It is because in modern legislation, the term „deemed‟ has been
used for manifold purposes. The object of the legislature has to be kept in
mind. On a scanning of the language employed in Section 11 of the Act, it
is clear as day that once the notification comes into existence in respect of an
Authority, it becomes a Commission under Section 3 for the purposes of the
Act because of the use of the term „deemed‟. At the same time, the
government has been conferred the power, a significant and a pregnant one,
to form an opinion whether all or any of the provisions of the Act should be
made applicable to that Authority and direct that only those provisions of the
Act shall be applied to that Authority. To elaborate, the appropriate
government has been bestowed with the power to exclude the applicability
of certain provisions of the Act while appointing an Authority other than a
Commission under Section 3 of the Act and at that point of time it can
exclude certain provisions not to be made applicable. Thus, though the
authority becomes a deemed Commission appointed under Section 3 for the
purposes of the Act, it has to be read in the context keeping in view the
intendment of the legislature. It has to be construed that the term „deemed‟
W.P.(C) No.9783/2006 Page 15 of 35
does not clothe the said authority, to be a Commission under the Act which
has all the powers as the competent government has the power/authority to
exercise the exclusion for certain provisions while issuing a notification.
22. In this context, we may also profitably state that the language
employed in Section 11 has to be read in a holistic and purposeful manner.
The court has a sacrosanct duty to understand the intention of the legislature
while interpreting a provision. In Lt. Col. Prithi Pal Singh Bedi v. Union of
India & Ors., AIR 1982 SC 1413, the Apex Court has expressed the view as
follows:
"The dominant purpose in construing a statute is to
ascertain the intention of the Parliament. One of the well
recognised canons of construction is that the legislature
speaks its mind by use of correct expression and unless
there is any ambiguity in the language of the provision
the Court should adopt literal construction if it does not
lead to an absurdity. The first question to be posed is
whether there is any ambiguity in the language used in
Rule 40. If there is none, it would mean the language
used speaks the mind of Parliament and there is no need
to look somewhere else to discover the intention or
meaning. If the literal construction leads to an absurdity,
external aids to construction can be resorted to. To
ascertain the literal meaning it is equally necessary first
to ascertain the juxtaposition in which the rule is placed,
the purpose for which it is enacted and the object which it
is required to subserve and the authority by which the
rule is framed. This necessitates examination of the broad
features of the Act."
23. In Reserve Bank of India v. Peerless General Finance and
Investment Co. Ltd. and others (1987) 1 SCC 424, their Lordships have
ruled thus:
"Interpretation must depend on the text and the context.
They are the bases of interpretation. One may well say if
W.P.(C) No.9783/2006 Page 16 of 35
the text is the texture, context is what gives the colour.
Neither can be ignored. Both are important. That
interpretation is best which makes the textual
interpretation match the contextual. A statute is best
interpreted when we know why it was enacted. With this
knowledge, the statute must be read, first as a whole and
then section by section, clause by clause, phrase by
phrase and word by word. If a statute is looked at, in the
context of its enactment, with the glasses of the statute-
maker, provided by such context, its scheme, the
sections, clauses, phrases and words may take colour and
appear different than when the statute is looked at
without the glasses provided by the context. With these
glasses we must look at the Act as a whole and discover
what each section, each clause, each phrase and each
word is meant and designed to say as to fit into the
scheme of the entire Act. No part of a statute and no
word of a statute can be construed in isolation. Statutes
have to be construed so that every word has a place and
everything is in its place..."
24. While keeping in view the aforesaid principle when the anatomy of
Section 11 is scanned, it becomes vivid that the competent government has
been empowered subject to the prohibition contained in the proviso to sub-
section (1) of Section 3 to direct that all or any of the provisions of the Act
should be made applicable to the Authority. The said words as employed by
the legislature have to be given its effective meaning.
25. Quite apart from that the said words precede the terms „shall be
deemed to be a commission appointed under Section 3 for the purposes of
this Act‟. In Mahadeolal Kanodia v. The Administrator General of West
Bengal, AIR 1960 SCC 936, a three-Judge Bench of the Apex Court was
considering an amending provision which was incorporated in Calcutta
Thika Tenancy Act, 1949. A proviso was added to sub-section (1) of sub-
section (2) of the said Act which provided that the provisions of the Calcutta
W.P.(C) No.9783/2006 Page 17 of 35
Thika Tenancy Act, 1949, as amended by this Act, shall, subject to the
provisions of Section 9, also apply and be deemed to have always applied to
all suits, appeals and proceedings pending before any Court, or before the
Controller, or before a person deciding an appeal under Section 27 of the
Act on the date of the commencement of the Act. A contention was
advanced that "as amended by this Act" qualifies the word or term
"provisions". Their Lordships posed the question whether the tenant who
had applied for relief under Section 28 when that Section was in force would
be entitled to have the application disposed of in accordance with the
provision of that Section though it remained undisposed of on the date the
Amendment Act came into force. In that context, their Lordships referred to
the principles of statutory interpretation and opined thus:
"8. The principles that have to be applied for
interpretation of statutory provisions of this nature are
well established. The first of these is that statutory
provisions creating substantive rights or taking away
substantive rights are ordinarily prospective; they are
retrospective only if by express words or by necessary
implication the Legislature has made them retrospective;
and the retrospective operation will be limited only to the
extent to which it has been so made by express words, or
necessary implication. The second rule is that the
intention of the Legislature has always to be gathered
from the words used by it, giving to the words their plain,
normal, grammatical meaning. The third rule is that if in
any legislation, the general object of which is to benefit a
particular class of persons, any provision is ambiguous so
that it is capable of two meanings, one which would
preserve the benefit and another which would take it
away, the meaning which preserves it should be adopted.
The fourth rule is that if the strict grammatical
interpretation gives rise to an absurdity or inconsistency
such interpretation should be discarded and an
interpretation which will give effect to the purpose the
W.P.(C) No.9783/2006 Page 18 of 35
Legislature may reasonably be considered to have had
will be put on the words, if necessary, even by
modification of the language used."
26. After so stating, the Apex Court took note of the submission that if the
word "amended" is interpreted to include omissions, it would become
meaningless because it makes no sense to say that a provision which has
been omitted shall apply. After noting the submission, their Lordships
opined thus:
"10. We are unable to see how it is possible, unless rules
of grammar are totally disregarded to read the words "as
amended by this Act" as to qualify the word "provisions".
If ordinary grammatical rules are applied there is no
escape from the conclusion that the adjectival phrase "as
amended by this Act" qualifies the proximate substantive,
viz., the Calcutta Thika Tenancy Act, 1949. There is no
escape from the conclusion therefore that what the
Legislature was saying by this was nothing more or less
than that the provisions of the amended Thika Tenancy
Act shall apply."
27. In this regard, it is apt to refer to the decision in The Regional
Provident Fund Commissioner, Bombay v. Shree Krishna Metal
Manufacturing Co. & Anr., AIR 1962 SC 1536, wherein it has been held as
follows:
"The ordinary rule of grammar on which a construction is
based cannot be treated as an invariable rule which must
always and in every case be accepted without regard to
the context. If the context definitely suggests that the
relevant rule of grammar is inapplicable, then the
requirement of the context must prevail over the rule of
grammar."
[Quoted from the placitum]
28. We have referred to the aforesaid decisions only to appreciate that
rule of last antecedent, unless the context otherwise suggests, should not be
W.P.(C) No.9783/2006 Page 19 of 35
ignored. In the case at hand, the phrases used in the Section has to be given
due weightage.
29. In view of the aforesaid analysis, we have no scintilla of doubt that
when resort is taken to Section 11 of the Act, it does not necessarily result in
the application of Sections 8B and 8C of the Act to the proceedings before
the enquiry authority / commission when the power of exclusion or non-
inclusion has been specifically exercised by the competent government.
30. The next question that requires to be dwelled upon is as to whether
any right to demand to be represented by a legal practitioner and to cross-
examine the witnesses examined by the Commission is available to a noticee
independent of Sections 8B and 8C of the Act before an Inquiry Authority.
There can be no trace of doubt that Sections 8B and 8C fundamentally
pertain to the applicability of the rules of natural justice. By virtue of the
notification issued under Section 11, the said provisions have not been made
applicable to the Authority / Commission. Thus, there is a deliberate
exclusion. The question that emanates for consideration is when there is an
exclusion of this nature, whether the doctrine of audi alteram partem would
get attracted. In this regard, we think it seemly to notice few citations in the
field.
31. In Maneka Gandhi v. Union of India and another (1978) 1 SCC 248,
the Apex Court, while posing the question as to how far natural justice is an
essential element of „procedure established by law‟, has held thus:
"..... There are certain well recognised exceptions to the
audi alteram partem rule established by judicial decisions
W.P.(C) No.9783/2006 Page 20 of 35
and they are summarised by S.A. de Smith in Judicial
Review of Administrative Action, 2nd ed., at pages 168
to 179. If we analyse these exceptions a little closely, it
will be apparent that they do not in any way militate
against the principle which requires fair play in
administrative action. The word 'exception' is really a
misnomer because in these exclusionary cases, the audi
alteram partem rule is held inapplicable not by way of an
exception to "fair play in action", but because nothing
unfair can be inferred by not affording an opportunity to
present or meet a case. The audi alteram partem rule is
intended to inject justice into the law and it cannot be
applied to defeat the ends of justice, or to make the law
'lifeless, absurd, stultifying, self-defeating or plainly
contrary to the common sense of the situation'. Since the
life of the law is not logic but experience and every legal
proposition must, in the ultimate analysis, be tested on
the touchstone of pragmatic realism, the audi alteram
partem rule would, by the experiential test, be excluded,
if importing the right to be heard has the effect of
paralysing the administrative process or the need for
promptitude or the urgency of the situation so demands.
But at the same time it must be remembered that this is a
rule of vital importance in the field of administrative law
and it must not be jettisoned save in very exceptional
circumstances where compulsive necessity so demands.
It is a wholesome rule designed to secure the rule of law
and the Court should not be too ready to eschew it in its
application to a given case. True it is that in questions of
this kind a fanatical or doctrinaire approach should be
avoided, but that does not mean that merely because the
traditional methodology of a formalised hearing may
have the effect of stultifying the exercise of the statutory
power, the audi alteram partem should be wholly
excluded. The Court must make every effort to salvage
this cardinal rule to the maximum extent permissible in a
given case. It must not be forgotten that "natural justice is
pragmatically flexible and is amenable to capsulation
under the compulsive pressure of circumstances". The
audi alteram partem rule is not cast in a rigid mould and
judicial decisions establish that it may suffer situational
modifications. The core of it must, however, remain,
namely, that the person affected must have a reasonable
opportunity of being heard and the hearing must be a
genuine hearing and not an empty public relations
exercise. That is why Tucker, L.J., emphasised in Russel
W.P.(C) No.9783/2006 Page 21 of 35
v. Duke of Norfolk [1949] 1 All Eng. Reports 109 that
"whatever standard of natural justice is adopted, one
essential is that the person concerned should have a
reasonable opportunity of presenting his case".
In the said case, Kailasm, J, while dealing with the concept of
applicability of natural justice, referred to the decision in Union of India v.
J. N. Sinha (1970) 2 SCC 458 and held as follows:
".... Rules of natural justice cannot be equated with the
fundamental rights. As held by the Supreme Court in
Union of India v. J. N. Sinha (1970) I SCR 791, that
"Rules of natural justice are not embodied rules nor can
they be elevated to the position of Fundamental Rights.
Their aim is to secure justice or to prevent miscarriage of
justice. These rules can operate only in areas not covered
by any law validly made. They do not supplant the law
but supplement it. If a statutory provision can be read
consistently with the principles of natural justice, the
courts should do so. But if a statutory provision either
specifically or by necessary implication excludes the
application of any rules of natural justice then the court
cannot ignore the mandate of the legislature or the
statutory authority and read into the concerned provision
the principles of natural justice." So also the right to be
heard cannot be presumed when in the circumstances of
the case, there is paramount need for secrecy or when a
decision will have to be taken in emergency or when
promptness of action is called for where delay would
defeat the very purpose or where it is expected that the
person affected would take an obstructive attitude. To a
limited extent it may be necessary to revoke or to
impound a passport without notice if there is real
apprehension that the holder of the passport may leave
the country if he becomes aware of any intention on the
part of the passport authority or the Government to
revoke or impound the passport. But that by itself would
not justify denial of an opportunity to the holder of the
passport to state his case before a final order is passed. It
cannot be disputed that the legislature has not by express
provision excluded the right to be heard...."
W.P.(C) No.9783/2006 Page 22 of 35
32. In Swadeshi Cotton Mills v. Union of India, (1981) 1 SCC 664, the
majority speaking through Sarkaria, J. adverted to the concept of basic facets
of natural justice, the twin principles, namely, audi alteram partem and
nemo judex in re sua, the decisions rendered in Maneka Gandhi (supra),
State of Orissa v. Dr. Bina Pani Dei, AIR 1967 SC 1269 and A.K. Kraipak
v. Union of India, (1969) 2 SCC 262 and eventually held thus:
"31. The rules of natural justice can operate only in
areas not covered by any law validly made. They can
supplement the law but cannot supplant it (Per Hegde, J.
in A.K. Kraipak, (1969) 2 SCC 262. If a statutory
provision either specifically or by inevitable implication
excludes the application of the rules of natural justice,
then the court cannot ignore the mandate of the
legislature. Whether or not the application of the
principles of natural justice in a given case has been
excluded, wholly or in part, in the exercise of statutory
power, depends upon the language and basic scheme of
the provision conferring the power, the nature of the
power, the purpose for which it is conferred and the
effect of the exercise of that power. (See Union of India
v. Col. J.N. Sinha, (1970) 2 SCC 458.
33. The next general aspect to be considered is : Are
there any exceptions to the application of the principles
of natural justice, particularly the audi alteram partem
rule ? We have already noticed that the statute conferring
the power, can by express language exclude its
application. Such cases do not present any difficulty.
However, difficulties arise when the statute conferring
the power does not expressly exclude this rule but its
exclusion is sought by implication due to the presence of
certain factors : such as, urgency, where the obligation to
give notice and opportunity to be heard would obstruct
the taking of prompt action of a preventive or remedial
nature......."
[Emphasis added]
33. In Liberty Oil Mills & Ors. v. Union of India & Ors., (1984) 3 SCC
465, a three-Judge Bench of the Apex Court has held thus:
"15. ...We do not think that it is permissible to
interpret any statutory instrument so as to exclude
natural justice, unless the language of the instrument
leaves no option to the Court."
34. In Union of India & Anr. v. Tulsiram Patel, (1985) 3 SCC 398 =
AIR 1985 SC 1416, the Apex Court has expressed thus:
100. In Swadeshi Cotton Mills v. Union of India, (1981)
1 SCC 664 Chinnappa Reddy, J., in his dissenting
judgment summarized the position in law on this point as
follows (at page 591): (SCC p.712, para 106)
The principles of natural justice have taken deep
root in the judicial conscience of our people,
nurtured by Binapani, Kraipak, Mohinder Singh
Gill, Maneka Gandhi etc. etc. They are now
considered so fundamental as to be 'implicit in the
concept of ordered liberty' and, therefore, implicit
in every decision-making function, call it judicial,
quasi-judicial or administrative. Where authority
functions under a statute and the statute provides
for the observance of the principles of natural
justice in a particular manner, natural justice will
have to be observed in that manner and in no other.
No wider right than that provided by statute can be
claimed nor can the right be narrowed. Where the
statute is silent about the observance of the
principles of natural justice, such statutory silence
is taken to imply compliance with the principles of
natural justice. The implication of natural justice
being presumptive it may be excluded by express
words of statute or by necessary intendment.
Where the conflict is between the public interest
and the private interest, the presumption must
necessarily be weak and may, therefore, be readily
displaced.
(Emphasis supplied.)
101. Not only, therefore, can the principles of natural
justice be modified but in exceptional cases they can
even be excluded. There are well-defined exceptions to
the nemo judex in causa sua rule as also to the audi
alteram partem rule. The nemo judex in causa sua rule is
subject to the doctrine of necessity and yields to it as
pointed out by this Court in J. Mohapatra and Co. v.
State of Orissa, (1984) 4 SCC 103. So far as the audi
alteram partem rule is concerned, both in England and in
India, it is well established that where a right to a prior
notice and an opportunity to be heard before an order is
passed would obstruct the taking of prompt action, such a
right can be excluded. This right can also be excluded
where the nature of the action to be taken, its object and
purpose and the scheme of the relevant statutory
provisions warrant its exclusion; nor can the audi alteram
partem rule be invoked if importing it would have the
effect of paralysing the administrative process or where
the need for promptitude or the urgency of taking action
so demands, as pointed out in Maneka Gandhi's case at
page 681. If legislation and the necessities of a situation
can exclude the principles of natural justice including the
audi alteram partem rule, a fortiori so can a provision of
the Constitution, for a Constitutional provision has a far
greater and all-pervading sanctity than a statutory
provision...."
[Underlining is ours]
35. In S.N. Mukherjee v. Union of India (1990) 4 SCC 594: AIR 1990
SC 1984, the Constitution Bench, while dealing with the applicability of the
principles of natural justice, has opined thus:
"39. .... The rules of natural justice are not embodied
rules. The extent of their application depends upon the
particular statutory framework whereunder jurisdiction
has been conferred on the administrative authority. With
regard to the exercise of a particular power by an
administrative authority including exercise of judicial or
quasi-judicial functions the legislature, while conferring
the said power, may feel that it would not be in the larger
public interest that the reasons for the order passed by the
administrative authority be recorded in the order and be
communicated to the aggrieved party and it may dispense
with such a requirement. It may do so by making an
express provision to that affect as those contained in the
Administrative Procedure Act, 1946 of U.S.A. and the
Administrative Decisions (Judicial Review) Act, 1977 of
Australia whereby the orders passed by certain specified
authorities are excluded from the ambit of the enactment.
Such an exclusion can also arise by necessary implication
from the nature of the subject matter, the scheme and the
provisions of the enactment. The public interest
underlying such a provision would outweigh the salutary
purpose served by the requirement to record the reasons.
The said requirement cannot, therefore, be insisted upon
in such a case.
40. For the reasons aforesaid, it must be concluded that
except in cases where the requirement has been
dispensed with expressly or by necessary implication, an
administrative authority exercising judicial or quasi-
judicial functions is required to record the reasons for its
decision."
[Emphasis supplied]
36. In Union of India and another v. W.N. Chadha 1993 Supp. (4) SCC
260 their Lordships, while adverting to the issue of applicability of the
doctrine of natural justice, have ruled thus:
"80. The rule of audi alteram partem is a rule of justice
and its application is excluded where the rule will itself
lead to injustice. In S.A. Smith‟s Judicial Review of
Administrative Action, (4th Edn.) at page 184, it is stated
that in administrative law, a prima facie right to prior
notice and opportunity to be heard may be held to be
excluded by implication in the presence of some factors,
singly or in combination with another. Those special
factors are mentioned under items (1) to (10) under the
heading "Exclusion of the audi alteram partem rule".
81. Thus, there is exclusion of the application of audi
alteram partem rule to cases where nothing unfair can be
inferred by not affording an opportunity to present and
meet a case. This rule cannot be applied to defeat the
ends of justice or to make the law "lifeless, absurd,
stultifying and self-defeating or plainly contrary to the
common sense of the situation" and this rule may be
jettisoned in very exceptional circumstances where
compulsive necessity so demands.
82. Bhagwati, J. (as the learned Chief Justice then
was) in Maneka Gandhi speaking for himself, Untawalia
and Murtaza Fazal Ali, JJ. has stated thus: (SCC p. 290,
para 14)
".... Now, it is true that since the right to
prior notice and opportunity of hearing
arises only by implication from the duty to
act fairly, or to use the words of Lord Morris
of Borth-y-Gest, from „fair play in action‟, it
may equally be excluded where, having
regard to the nature of the action to be taken,
its object and purpose and the scheme of the
relevant statutory provision, fairness in
action does not demand its implication and
even warrants its exclusion."
83. Thus, it is seen from the decision in Maneka
Gandhi that there are certain exceptional circumstances
and situations whereunder the application of the rule of
audi alteram partem is not attracted."
37. After so stating, their Lordships referred to a passage from Paul
Jackson in Natural Justice and various other decisions and opined as
follows:
"89. Applying the above principle, it may be held that
when the investigating officer is not deciding any matter
except collecting the materials for ascertaining whether a
prima facie case is made out or not and a full enquiry in
case of filing a report under Section 173(2) follows in a
trial before the Court or Tribunal pursuant to the filing of
the report, it cannot be said that at that stage rule of audi
alteram partem superimposes an obligation to issue a
prior notice and hear the accused which the statute does
not expressly recognize. The question is not whether
audi alteram partem is implicit, but whether the occasion
for its attraction exists at all."
38. In D.K. Yadav v. J.M.A. Industries Ltd. (1993) 3 SCC 259, the Apex
Court has held as follows:
"7. ...Particular statute or statutory rules or orders
having statutory flavour may also exclude the application
of the principles of natural justice expressly or by
necessary implication. In other respects the principles of
natural justice would apply unless the employer should
justify its exclusion on given special and exceptional
exigencies."
39. In Dr. Rash Lal Yadav v. State of Bihar & Ors., (1994) 5 SCC 267,
the Apex Court, after referring to the decisions in A.K. Kraipak (supra), Dr.
Bina Pani Dei (supra), J. N. Sinha (supra), Swadeshi Cotton Mills (supra)
and Mohinder Singh Gill v. Chief Election Commissioner, (1978) 1 SCC
405, 439, held as follows:
"9. What emerges from the above discussion is that
unless the law expressly or by necessary implication
excludes the application of the rule of natural justice,
courts will read the said requirement in enactments that
are silent and insist on its application even in cases of
administrative action having civil consequences.
However, in this case, the High Court has, having regard
to the legislative history, concluded that the deliberate
omission of the proviso that existed in sub-section (7) of
Section 10 of the Ordinance (1980) while re-enacting the
said sub-section in the Act, unmistakably reveals the
legislature's intendment to exclude the rule of giving an
opportunity to be heard before the exercise of power of
removal. The legislative history leaves nothing to doubt
that the legislature did not expect the State Government
to seek the incumbent's explanation before exercising the
power of removal under the said provision. We are in
complete agreement with the High Court's view in this
behalf."
40. In Mangilal v. State of M.P., (2004) 2 SCC 447, while dealing with
the principle of applicability of natural justice in awarding compensation
under Section 357(4) of the Code of Criminal Procedure, 1973, their
Lordships have observed thus:
"10. ...It has always been a cherished principle. Where
the statute is silent about the observance of the principles
of natural justice, such statutory silence is taken to imply
compliance with the principles of natural justice where
substantial rights of parties are considerably affected.
The application of natural justice becomes presumptive,
unless found excluded by express words of statute or
necessary intendment..."
41. The learned counsel for the petitioner has submitted that when his
reputation is likely to be affected, the doctrine of audi alteram partem has to
be made applicable, otherwise he would be condemned unheard. It is urged
by him that Article 21 of the Constitution of India in its expanse includes
reputation. In this regard, he has drawn inspiration from the decision in
Board of Trustees of the Port of Bombay v. Dilipkumar Raghavendranath
Nadkarni, (1983) 1 SCC 124. The learned counsel has also commended us
to the decision in Lal Krishna Advani (supra) wherein it has been held thus:
"8. It may be noticed that the amendment was brought
about, about 20 years after passing of the main Act itself.
The experience during past two decades must have made
the legislature realize that it would be necessary to notice
a person whose conduct the Commission considers
necessary to inquire into during the course of the inquiry
or whose reputation is likely to be prejudicially affected
by the inquiry. It is further provides that such a person
would have a reasonable opportunity of being heard and
to adduce evidence in his defence. Thus the principles of
natural justice were got inducted in the shape of a
statutory provision. It is thus incumbent upon the
Commission to give an opportunity to a person, before
any comment is made or opinion is expressed which is
likely to prejudicially affect that person. Needless to
emphasise that failure to comply with principles of
natural justice renders the action non est as well as the
consequences thereof."
42. To buttress the submission that the violation of the rules of natural
justice in any sphere would destroy the marrow of justice dispensation
system, he has placed reliance upon the decisions rendered in A.K. Kraipak
(supra), Mohinder Singh Gill (supra), Dr. Bina Pani Dei (supra), State of
Kerala v. K.T. Shaduli Grocery Dealer, AIR 1977 SC 1627, S.L. Kapoor v.
Jagmohan & Ors., (1980) 4 SCC 379 and Canara Bank & Ors. v. Debasis
Das & Ors., (2003) 4 SCC 557. In Debasis Das (supra), the Apex Court,
while dealing with the concept of natural justice, has held thus:
"20. Natural justice has been variously defined by
different Judges. A few instances will suffice. In Drew v.
Drew and Lebura (1855) 2 Macq. 1, Lord Cranworth
defined it as "universal justice". In James Dunber Smith
v. Her Majesty the Queen (1877-78) 3 AC 614 (PC) Sir
Robort P. Collier, speaking for the Judicial Committee of
Privy Council, used the phrase "the requirements of
substantial justice", while in Arthur John Spackman v.
Plumstead District Board of Works (1885) 10 AC 229
(AC at p.240), the Earl of Selbourne, S.C. preferred the
phrase "the substantial requirement of justice". In Vionet
v. Barrett (1885) 55 LJRD 39 (LJRD at p.41), Lord
Esher, M.R. defined natural justice as "the natural sense
of what is right and wrong". While, however, deciding
Hookings v. Smethwick Local Board of Health (1890) 24
QBD 712, Lord Esher, M.R. instead of using the
definition given earlier by him in Vionet case (supra)
chose to define natural justice as "fundamental justice".
In Ridge v. Baldwin (1963) 1 WB 539 (QB at p.578),
Harman L.J., in the Court of Appeal countered natural
justice with "fair-play in action", a phrase favoured by
Bhagawati, J. in Maneka Gandhi (supra). In H.K. (An
infant), Re (1967) 2 QB 617 (QB at p.630), Lord Parker,
C.J. preferred to describe natural justice as "a duty to act
fairly". In Fairmount Investments Ltd. v. Secy. to State
for Environment (1976) 1 WLR 1255 Lord Russell of
Killowen somewhat picturesquely described natural
justice as "a fair crack of the whip" while Geoffrey Lane,
L.J. in R. v. Secy. of State for Home Affairs, ex p
Hosenball (1977) 1 WLR 766 preferred the homely
phrase "common fairness".
21. How then have the principles of natural justice
been interpreted in the courts and within what limits are
they to be confined? Over the years by a process of
judicial interpretation two rules have been evolved as
representing the principles of natural justice in judicial
process, including therein quasi judicial and
administrative process. They constitute the basic
elements of a fair hearing, having their roots in the innate
sense of man for fair play and justice which is not the
preserve of any particular race or country but is shared in
common by all men. The first rule is "nemo judex in
causa sua" or "nemo debet esse judex in propria causa
sua" as stated in Earl of Derby's case (1605) 12
Co.Rep.114 that is, "no man shall be a judge in his own
cause". Coke used the form "aliquis non debet esse
judex in propria causa quia non protest esse judex et
pars" (Co. Litt. 1418), that is, "no man ought to be a
judge in his own case, because he cannot act as judge and
at the same time be a party". The form "nemo potest esse
simul actor et judex", that is, "no one can be at once
suitor and judge" is also at times used. The second rule is
"audi alteram partem", that is, "hear the other side". At
times and particularly in continental countries, the form
"audietur et altera par"' is used, meaning very much the
same thing. A corollary has been deduced from the above
two rules and particularly the audi alteram partem rule,
namely "qui a liquid statuerit, parte inaudita altera
acquum licet dixerit, haud acquum fecerit" that is, "he
who shall decide anything without the other side having
been heard, although he may have said what is right, will
not have been what is right" [See Boswel's case (1605) 6
Co.Rep. 48b, (Co Rep at p.52-a) or in other words, as it is
now expressed, "justice should not only be done but
should manifestly be seen to be done". whenever an
order is struck down as invalid being in violation of
principles of natural justice, there is no final decision of
the case and fresh proceedings are left upon (sic open).
All that is done is to vacate the order assailed by virtue of
its inherent defect, but the proceedings are not
terminated."
43. The learned counsel has also placed heavy reliance on the decision in
Vallimayil Ammal v. The Commission of Inquiry, Chidambaram, [1968]
ILR (Madras) 188. In the said case, the learned Single Judge, while
interpreting Section 11 of the Commissions of Inquiry Act, 1952 with all the
powers conferred by Sections 4, 5 and 8 of the Act for submitting the report
with its findings, held that when the authority making a decision which
might affect the rights of the parties was required to adopt a judicial
approach even though the decision by itself might not take effect, the
proceeding would be quasi-judicial. The principles of natural justice would
be applicable also to authorities who are called upon to submit a report for
further consideration by some other body. The learned single Judge further
held that when the interest of a person is likely to be affected and when the
reputation is likely to be affected, fair opportunity had to be granted.
44. On a studied scrutiny of the enunciation of law in the field, it is clear
as crystal that the principles of natural justice are presumed to be attracted
unless they are expressly excluded or its exclusion can be inferred or
deduced by necessary implication. In the case at hand, Sections 8B and 8C
were incorporated in the statute book in the year 1971. It has a flavour and
fragrance of the applicability of the principles of natural justice or to put it
differently, the principles of natural justice have been statutorily embodied.
The submission of Mr. Vaidyanathan, learned senior counsel, is that when
the statute introduces or specifically incorporates the principles of natural
justice, it has the power and the authority to exclude the same and once the
provisions are not made applicable by a specific notification, there can be no
shadow of doubt that the principles of natural justice stand excluded.
Combating the said submission, it is proponed by Mr. Sawhney, learned
senior counsel appearing for the petitioner, that if the decisions in Vallimayil
Ammal (supra) and Lal Krishna Advani (supra) are properly appreciated, it
would clearly convey that in such situations the doctrine of audi alteram
partem cannot be excluded and the basic facets of natural justice would
come into play despite the exclusion by Sections 8B and 8C of the Act.
45. The aforesaid submission of the learned counsel for the petitioner
does not impress us on two counts, namely, when a statutory provision has
been introduced into the statute book including the doctrine of natural justice
and there is an authority conferred on the competent government to apply
certain provisions and the said provisions have deliberately not been
included which amounts to its exclusion, the principles of natural justice
which, in law, is excludable cannot be brought in by taking recourse to the
factum of presumptive applicability. Quite apart from the above, we are
disposed to think that when Sections 8B and 8C of the Act specifically
provide for grant of reasonable opportunity of being heard and grant of
permission for cross-examination and representation by the legal
practitioner, in view of the exclusion of the said provisions, it is
inconceivable to incorporate the same.
46. The issue No.2 is also required to be tested in the obtaining factual
backdrop. Mr. Vaidyanathan, learned senior counsel has submitted that the
Authority or the Commission that has been constituted is basically a
preliminary fact finding inquiry equivalent to investigation or a preliminary
inquiry in a disciplinary proceeding. It is contended by him that the
Commission is required to collect materials for ascertaining whether there is
a prima facie case to proceed further in that regard. We find the said
submission has substantial force inasmuch as on a studied scrutiny of the
terms of the reference it is demonstrable that it is actually a fact finding or
preliminary inquiry.
47. In view of our preceding analysis, we proceed to record our
conclusions in seriatim:
(i) When an authority is constituted by the competent government
and resort is taken to Section 11 of the Commissions of Inquiry
Act, 1952, it does not necessarily result in the application of
Sections 8B and 8C of the Act to the proceedings before the
Inquiry Authority / Commission.
(ii) The legislature has the power to exclude the applicability of the
principles of natural justice either expressly or impliedly and
when Sections 8B and 8C of the Act have not been made
applicable to the Inquiry Authority / Commission while issuing
a notification under Section 11 of the Act, the doctrine of audi
alteram partem stands excluded.
(iii) Once the applicability of Sections 8B and 8C of the Act have
not been made applicable to the Inquiry Authority /
Commission which actually tantamounts to exclusion of the
said provisions, a noticee, especially in an inquiry of the present
nature which is a fact finding or preliminary inquiry, has no
right to demand copies of the documents and affidavits or to be
represented by legal practitioner or to cross-examine the
witnesses examined by the Commission in the inquiry.
(iv) Whether the opinion formed by the Government for not
applying Sections 8B and 8C of the Act to an Authority /
Commission is justified or not can be questioned in a court of
law on permissible grounds, namely, arbitrariness, unfairness,
unreasonability, irrationality, etc.
48. The reference is answered accordingly. Matter be placed before the
appropriate Division Bench.
CHIEF JUSTICE
A.K. SIKRI, J.
MANMOHAN, J.
SEPTEMBER 28, 2010
dk
