Ramprasad vs Principal Secretary
2023 Latest Caselaw 361 MP

                                                           1
                           IN    THE       HIGH COURT OF MADHYA PRADESH
                                                AT JABALPUR
                                                   BEFORE
                                HON'BLE SHRI JUSTICE GURPAL SINGH AHLUWALIA
                                              ON THE 6 th OF JANUARY, 2023
                                             SECOND APPEAL No. 517 of 2018

                          BETWEEN:-
                          RAMPRASAD S/O RAMCHARAN PATEL, AGED ABOUT 34
                          YEAR S , R/O. KANHA RESIDENCY COLONY BHOPAL
                          TIRAHA RAHAT GARH TEH. RAHATGARH, DISTRICT
                          SAGAR (MADHYA PRADESH)

                                                                                       .....APPELLANT
                          (BY SHRI TEEKARAM TANTUVAY - ADVOCATE)

                          AND
                          1.    PRINCIPAL SECRETARY NAGRIYA VIKAS EVAM
                                AWAS    VIBHAGH M.P. STATE MANTRALAYA,
                                BHOPAL (MADHYA PRADESH)

                          2.    RAJEEV SHARMA, JOINT SECRETARY MADHYA
                                PRADESH NAGARIYA VIKAS EVAM AAWAS
                                VI B H AG M.P.STATE MANTRALAYA, BHOPAL
                                (MADHYA PRADESH)

                          3.    ASHOK KUMAR MALVIYA, UNDER SECRETARY
                                MADHYA PRADESH NAGARIYA VIKAS EVAM
                                AAWAS   VIBHAG M.P. STATE MANTRALAYA,
                                BHOPAL (MADHYA PRADESH)
                                AT PRESENT- GENERAL ADMINISTRATION
                                DEPARTMENT VALLABH BHAWAN, BHOPAL
                                (M.P.)

                                                                                    .....RESPONDENTS
                          (NONE FOR THE RESPONDENTS)

                                This appeal coming on for admission this day, th e court passed the
                          following:
                                                            ORDER

This second appeal under Section 100 CPC has been filed against the

Signature Not Verified judgment and decree dated 14.12.2017 passed by the second Additional District Signed by: VINAY KUMAR BURMAN Signing time: 13-Jan-23 6:45:41 PM

Judge Sagar in Civil Appeal No.59/2017 arising out of judgment and decree dated 18.07.2017 passed by the second Additional Civil Judge Class-1 Sagar in RCSA No.3900186/2016 by which the suit filed by the appellant for declaration and permanent injunction has been dismissed.

Facts necessary for disposal of the present appeal in short, are that the appellant claims himself to be the National President/Coordinator of Garib Vikas Santstha having residence and head office in Kanha Residency Colony, Ward No.13, Bhopal Tiraha, Tahsil Rahatgarh, District Sagar.

It is the case of the appellant that the said Firm is registered under Society Registrikaran Adhiniyam. The working area of the society is the entire

country. A resolution was passed by the members of the society to establish a bank in the name of Janhit Bank with an object to carry out the banking activities amongst the members and accordingly a resolution was passed in January, 2016. On 29.07.2016, an application was filed before the respondent No.1 for grant of permission to start Janhit Bank and accordingly by order dated 06.08.2016, permission was granted with a stipulation that the institution on its on can open the Janhit Bank but the entire responsibility of banking operations would be of the president of institution.

Accordingly, the appellant gave an information of making Janhit Bank operational w.e.f. 01.10.2016 and also made a prayer for registration of bank as Janhit Bank. The society also employed the employees and also took a premises on rent and spent Rs.60,000/- towards purchasing of furniture, computer and stationery etc. However, without giving any opportunity of hearing and in violation of the principles of natural justice the defendant No.2 issued a letter dated 05.10.2016 pointing out that the department is not Signature Not Verified Signed by: VINAY KUMAR BURMAN Signing time: 13-Jan-23 6:45:41 PM

competent to issue such a permission and the permission, which was granted on 06.08.2016 is without jurisdiction, therefore it should be treated as ineffective.

It is the case of the appellant that because of the sanction granted by the defendants, the appellant has invested huge amount and the permission should not have been withdrawn/cancelled without following the principles of natural justice.

The trial Court after framing issues and recording evidence, dismissed the suit mainly on the ground that it is clear from the sanction order Exhibit P/1, no permission was granted to run Janhit Bank but it was merely mentioned that the institution can open the bank on its own. It was also held that in case if the appellant is interested to carry out any banking activities by opening a bank then a permission from the Reserve Bank of India is required.

Being aggrieved by the said judgment and decree passed by the trial Court, the appellant preferred an appeal, which too has been dismissed by the First Appellate Court.

Challenging the judgment and decree passed by the Court's below, it is submitted by the counsel for the appellant that once a permission was granted then the same could not have been cancelled without giving an opportunity of hearing and accordingly proposed the following substantial questions of law.

"a. "Whether the easement act 1882 is applicable in this case" b. "Whether the learned Trial court must have take adverse inference looking to the circumstances of the case"

c. "Whether the earlier permission was without authority has to be proved by cogent evidence and burden of lies on respondent"

Signature Not Verified Signed by: VINAY KUMAR BURMAN Signing time: 13-Jan-23 6:45:41 PM

The counsel for the appellant could not point out the authority of the respondents to grant sanction to open a bank. Thus, prima facie, the authority had passed an order, which was dehors its jurisdiction. It is well established principle of law that an order passed without jurisdiction is nullity. Further more, in absence of any prejudice, an order cannot be set aside merely on the ground that the opportunity of hearing was not granted.

The Supreme Court in the case of State Bank of Patiala v. S.K. Sharma, reported in (1996) 3 SCC 364 has held as under:-

"33. We may summarise the principles emerging from the above discussion. (These are by no means intended to be exhaustive and are evolved keeping in view the context of disciplinary enquiries and orders of punishment imposed by an employer upon the employee): (1) An order passed imposing a punishment on an employee consequent upon a disciplinary/departmental enquiry in violation of t h e rules/regulations/statutory provisions governing such enquiries should not be set aside automatically. The Court or the Tribunal should enquire whether (a) the provision violated is of a substantive nature or (b) whether it is procedural in character. (2) A substantive provision has normally to be complied with as explained hereinbefore and the theory of substantial compliance or the test of prejudice would not be applicable in such a case.

(3) In the case of violation of a procedural provision, the position is this: procedural provisions are generally meant for affording a reasonable and adequate opportunity to the delinquent officer/employee. They are, generally speaking, conceived in his interest. Violation of any and every procedural provision cannot be Signature Not Verified Signed by: VINAY KUMAR BURMAN Signing time: 13-Jan-23 6:45:41 PM

said to automatically vitiate the enquiry held or order passed. Except cases falling under œno notice, no opportunity and no hearing categories, the complaint of violation of procedural provision should be examined from the point of view of prejudice, viz., whether such violation has prejudiced the delinquent officer/employee in defending himself properly and effectively. If it is found that he has been so prejudiced, appropriate orders have to be made to repair and remedy the prejudice including setting aside the enquiry and/or the order of punishment. If no prejudice is established to have resulted therefrom, it is obvious, no interference is called for. In this connection, it may be remembered that there may be certain procedural provisions which are of a fundamental character, whose violation is by itself proof of prejudice. The Court may not insist on proof of prejudice in such cases. As explained in the body of the judgment, take a case where there is a provision expressly providing that after the evidence of the employer/government is over, the employee shall be given an opportunity to lead defence in his evidence, and in a given case, the enquiry officer does not give that opportunity in spite of the delinquent officer/employee asking for it. The prejudice is self- evident. No proof of prejudice as such need be called for in such a case. To repeat, the test is one of prejudice, i.e., whether the person has received a fair hearing considering all things. Now, this very aspect can also be looked at from the point of view of directory and mandatory provisions, if one is so inclined. The principle stated under (4) hereinbelow is only another way of looking at the same

Signature Not Verified Signed by: VINAY KUMAR BURMAN Signing time: 13-Jan-23 6:45:41 PM

aspect as is dealt with herein and not a different or distinct principle.

(underline supplied) (4)(a) In the case of a procedural provision which is not of a mandatory character, the complaint of violation has to be examined from the standpoint of substantial compliance. Be that as it may, the order passed in violation of such a provision can be set aside only where such violation has occasioned prejudice to the delinquent employee.

(b) In the case of violation of a procedural provision, which is of a mandatory character, it has to be ascertained whether the provision is conceived in the interest of the person proceeded against or in public interest. If it is found to be the former, then it must be seen whether the delinquent officer has waived the said requirement, either expressly or by his conduct. If he is found to have waived it, then the order of punishment cannot be set aside on the ground of the said

violation. If, on the other hand, it is found that the delinquent officer/employee has not waived it or that the provision could not be waived by him, then the Court or Tribunal should make appropriate directions (include the setting aside of the order of punishment), keeping in mind the approach adopted by the Constitution Bench in B. Karunakar [(1993) 4 SCC 727 : 1993 SCC (LandS) 1184 : (1993) 25 ATC 704] . The ultimate test is always the same, viz., test of prejudice or the test of fair hearing, as it may be called.

(5) Where the enquiry is not governed by any rules/regulations/statutory provisions and the only obligation is to observe the principles of natural justice or, for that matter, wherever Signature Not Verified Signed by: VINAY KUMAR BURMAN Signing time: 13-Jan-23 6:45:41 PM

such principles are held to be implied by the very nature and impact of the order/action the Court or the Tribunal should make a distinction between a total violation of natural justice (rule of audi alteram partem) and violation of a facet of the said rule, as explained in the body of the judgment. In other words, a distinction must be made between no opportunity and no adequate opportunity, i.e., between œno notice œno hearing and no fair hearingÂÂ. (a) In the case of former, the order passed would undoubtedly be invalid (one may call it ˜void or a nullity if one chooses to). In such cases, normally, liberty will be reserved for the Authority to take proceedings afresh according to law, i.e., in accordance with the said rule (audi alteram partem). (b) But in the latter case, the effect of violation (of a facet of the rule of audi alteram partem) has to be examined from the standpoint of prejudice; in other words, what the Court or Tribunal has to see is whether in the totality of the circumstances, the delinquent officer/employee did or did not have a fair hearing and the orders to be made shall depend upon the answer to the said query. [It is made clear that this principle (No. 5) does not apply in the case of rule against bias, the test in which behalf are laid down elsewhere.] (6) While applying the rule of audi alteram partem (the primary principle of natural justice) the Court/Tribunal/Authority must always bear in mind the ultimate and overriding objective underlying the said rule, viz., to ensure a fair hearing and to ensure that there is no failure of justice. It is this objective which should guide them in applying the

Signature Not Verified Signed by: VINAY KUMAR BURMAN Signing time: 13-Jan-23 6:45:41 PM

rule to varying situations that arise before them. (7) There may be situations where the interests of State or public interest may call for a curtailing of the rule of audi alteram partem. In such situations, the Court may have to balance public/State interest with the requirement of natural justice and arrive at an appropriate decision."

The Supreme Court in the case of Indu Bhushan Dwivedi v. State of Jharkhand, reported in (2010) 11 SCC 278 has held as under:-

"24. However, every violation of the rules of natural justice may not be sufficient for invalidating the action taken by the competent authority/employer and the Court may refuse to interfere if it is convinced that such violation has not caused prejudice to the affected person/employee."

Thus, it is clear that mere violation of principle of natural justice is not sufficient to set aside an order and it is for the appellant to plead and prove that such an order has caused prejudice to him. The counsel for the appellant has failed to prove any prejudice as well as jurisdiction of authority to grant permission to open a bank coupled with the fact that the permission was not unconditional and it was merely mentioned that the institution can open the bank on its own.

Accordingly, this Court is of the considered opinion that no substantial question of law arises in the present case.

Accordingly, the appeal fails and is hereby dismissed.

Signature Not Verified Signed by: VINAY KUMAR BURMAN Signing time: 13-Jan-23 6:45:41 PM

(G.S. AHLUWALIA) JUDGE vinay*

Signature Not Verified Signed by: VINAY KUMAR BURMAN Signing time: 13-Jan-23 6:45:41 PM