055 - 1970 - Administrative Law PDF

ADMINISTRATIVE LAW
M. P. Jain*
I. Delegated Legislation IV. Judicial Review

II. Quasi-judicial Power: Right of Hearing V. Notice, Estoppel, Gvernment
III. Administrative Function Privilege
VI. Government Enterprises
Since the independence of India, increasingly larger number of cases

have been coming before the courts involving problems of administrative
Jaw. The main reason for this trend is that the State has become very
active and has assumed manifold functions under the impact of the concept
of socialist pattern of society. Expansion in its activities brings the state
increasingly in conflict with the individual and, hence, the larger volume
of case-law. The year 1970 is no exception to this trend. Nearly 150
cases are found reported in the All India Reporter for the year in which
problems concerning one or the other aspect of administrative law have been
raised. An attempt is made here to survey this case-law and bring out
the salient developments in the area during the year.
I. DELEGATED LEGISLATION
Excessive Delegation
It is a well established proposition that a legislature in India cannot

delegate essential legislative functions.1 Accordingly, legislation has been
challenged on the ground of excessive delegation in a number of cases,
but in none except one case has the challenge been sustained by the courts.
In Harakchand v. Union oj India? section 5(2) (b) of the Gold Control Act,
1968, has been held to be invalid on the ground of excessive delegation.
Under this provision, the Administrator could, so far as it appeared to him
to be necessary or expedient for carrying out the provisions of the Act, by
order, regulate by licences, permits or otherwise, the manufacture, distri-
bution, transport, acquisition, possession, transfer, disposal, use or con-
sumption of gold. The Supreme Court held that the power conferred on
* Professor of Law, Banaras Hindu University, Varanasi.

1. See Jain & Jain, Principles of Administrative Law 29-31 (1971).
2. AIR 1970 S.C. 1453.
www.ili.ac.in The Indian Law Institute

Administrative Law 73
the Administrator by the provision in question was 'legislative' in character,
and was constitutionally invalid as, being extremely wide, it suffered from
the vice of excessive delegation. Another reason for this holding was that
the power of subordinate legislation had also been conferred on the Central
Government under section 114 of the Act, subject to the rules being placed
before each House of Parliament, but no stipulation for laying before
Parliament had been made in respect of rules made by the Administrator
under the provision in question.
In J.R.G. Mfg. Association v. Union of India? section 12(2) of the
Rubber Act was challenged on the basis of excessive delegation. This
provision empowers the Rubber Board to levy and collect an excise duty
either from the owner of a rubber estate on which the rubber is produced,
or from the manufacturer by whom such rubber is used. The provision
has been held valid by the Supreme Court on the following considerations:
the Board was a high powered body having representatives of various inte-
rests connected with rubber, and so it could keep in view the interests of
all concerned; the policy of the Act has been enunciated with sufficient
clarity and guidance has been furnished to the Board as to how it should
exercise its powers in the matter of levying and collecting the tax; all acts
of the Board, by virtue of section 22, are subject to the control of the Central
Government which may cancel, suspend, or modify any action taken by it;
the Board is to levy and collect the duty in accordance with the rules made
by the Central Government which are to be placed by it before each House
of Parliament. The Supreme Court has also refused to accept the argu-
ment that uncontrolled power had been conferred on the Board by section
12 (2\ in violation of Article 14, to levy and collect the tax from either
the producer or the manufacturer. Referring to its previous decisions in
M. M. Ipoh v. C.I.T., Madras41 and Raghubar Dayal Jai Prakash v. Union
of India? the Court has pointed out that prior to 1960 the Board had been
finding it extremely difficult to collect the duty from the owners of rubber
estates and, hence, it was empowered to collect the tax from the manufac-
turers as well. The Rules to be made by the Government would indicate
the cases and the circumstances in which the duty is to be collected from
the owner or the manufacturer and the Board could not discriminate in
an arbitrary manner between owners of rubber estates and manufacturers,
or between persons inter se in the same category. The Court referred
to Municipal Corp. of Delhi v. Birla Cotton, Spinning and Weaving Millsf
Delhi? in justification of delegation of taxing power on a local authority
3. AIR 1970 S.C. 1588.

4. AIR 1968 S.C. 317.
5. AIR 1962 S.C. 263.
6. (1968)3S.C.R.251.

74 Annual Survey of Indian Law 1970
subject to such safeguards as subjecting the rates of tax to Government's

approval, providing for consultation of local inhabitants etc.
Section 10 of the Jammu & Kashmir Passenger Taxation Act, 1963,
confers power on the State Government to exempt any person or class of
persons from the operation of all or any of the provisions of the Act in
'public interest'. This provision was challenged in Suchet Singh v. State
of Jammu & Kashmir1 on the ground that it conferred an unfettered power
on the executive to exempt any one from the tax without laying down any
guiding principle for exercising the power. The term 'public interest',
it was argued, was vague, susceptible of various meanings, and left consi-
derable scope for arbitrary exercise of power to exempt. Rejecting the
contention, the High Court held that the power to exempt could be exercis-
ed only in 'public interest' which term has '-well defined meaning and con-
notation and furnishes a safe guide for the exercise of the power..." It
referred to Justice Mudholkar's judgment in Ramdayal v. State of Punjab?
in which it was stated that while the expression public interest' "is of
wide import" yet ' i t is not a vague or definite ground."
Section 9 (3) of the Central Sales Tax Act empowers the State sales
tax authorities to exercise all powers under the concerned State law for
purposes of assessment of sales tax on behalf of the Government of India.
In Auto Pins v. State? the main question considered was whether Parlia-
ment could adopt prospectively all the amendments which may be made
from time to time in the State sales tax laws. Answering in the affirmative,
the Punjab High Court has stated that Parliament having plenary powers
to legislate for purposes of imposition of the central sales tax, could reason-
ably delegate this power to, and utilise the agency of, the relevant State
Legislature to the extent it found it necessary for doing so, as it would be
patently inconvenient for Parliament to legislate separately for each State.
In doing so, Parliament does not abdicate any of its functions nor does
it amount to self-effacement nor to setting up of a parallel legislative body.10
In Maud Tea & Seed Co. v. Agricultural l.T.O.,11 the Assam High Court
has found that section 59 of the Indian Income Tax Act does not suffer from
the vice of excessive delegation as section 59 (3) lays down the policy in
clear terms, namely, the ascertainment and determination of any class of
7. AIR 1970 J &K112.

8. AIR 1965 S.C. 151£. Reference was also made to Butail v. Union of India, AIR
1969 Del. 15 and State of Kerala v. Annam AIR 1969 Ker, 38, in which a similar provision
has been held to be valid.
9. AIR 1970 Punj. 333.
10. In taking this view, the Punjab High Court has dissented from the Madras High
Court, e.g. see, K. A. Ramudu Chettiar v. State of Madras, (1968) 22 S.T.C.283.
11. AIR 1970 A & N 65.

income and, particularly, prescribes the manner in which the income shall
be ascertained in case of incomes derived partly from agriculture and part-
ly from business. Whit has been left to the Central Board of Revenue is
only to work out the details of the proportion, and it is more convenient
and proper to leave matters of detail to the executive to determine. In
NJ. Nayadu & Co. v. Administrator, City of Nagpur?2 the Bombay High
Court has upheld the validity of section 114 (2) (g) of the City of Nagpur
Corporation Act which authorises the Nagpur Corporation to impose any
other tax which the State Legislature has power to impose under the Cons-
titution. The corporation is authorised to impose taxes for the purposes
of the Act which itself is a sufficient guideline according to the Liberty
Cinema Case.13 The corporation is to find funds for efficient and effective
discharge of the multifarious duties assigned to it; it knows, as a representative
body, the needs of the people and how they should be met. Any proposal
to impose tax is subject to objections which the corporation is required
to consider and, further, it is subject to scrutiny by the State Government.
All these safeguards are sufficiently defensive to protect the provision
from being challenged as a piece of excessive delegation.
Ultra Vires
Moving away from the ground of excessive delegation, reference may

now be made to the cases in which delegated legislation has itself been
challenged as ultra vires. Section 27 of the Madhya Pradesh Municipal
Corporation Act, 1956, authorises the corporation to make bye-laws, but,
under section 430, no such bye-law is to be valid unless confirmed by the
State Government. Section 432 empowers the Government to modify or
repeal any bye-law in consultation with the corporation. In 1948, certain
bye-laws made by the Jabalpur Municipality had been confirmed by the
Government. In 1967, the Government issued a notification cancelling
the confirmation of the bye-laws. The Supreme Court has held in Mohd.
Faruk v. State oj U.P.U that the power to confirm the bye-laws vested in the
Government carries with it the power to rescind such confirmation just as
the power to issue bye-laws indisputably includes the power to cancel or
withdraw the bye-laws.
An interesting question has been raised in Jayantilal v. Union of India.15
Under section 3 (1) of the Defence of India Act, 1962, the Central Govern-
ment could make rules "as appear to it necessary or expedient for securing
the defence of India and civil defence. . .or for maintaining supplies and
12. AIR 1970 Bom. 59.

13. Liberty Cinema v. Commr., Calcutta Corp., AIR 1965 S.C. 1107.
14. AIR 1970 S.C. 93.
15. AIR 1970 Guj. 108.

services essential to the life of the community." The Gold Control Rules
were challenged on the ground that they did not subserve the purposes men-
tioned in the Act. It was argued that there should be some real and pro-
ximate connection between the rules and the purposes for which they could
be made. The Gujarat High Court took the position that while consi-
dering the question whether the rules would subserve the purposes for which
they were claimed to have been made, it was not to act as a court of appeal
and examine whether the view taken by the Government that the rules
would subserve the stated purposes was right or wrong, or substitute its own
opinion for that of the Central Government. Having regard to multi-
plicity of factors which are to be taken in to consideration, a certain amount
of latitude and free-play must be allowed to the Central Government, and
the rules cannot be struck down unless it appears clearly that the rules can-
not, on a reasonable view of the matter, subserve the stated purposes. The
test must be whether the rules are reasonably related to the end in view,
namely, the achievement of the stated purposes. It is not necessary that
the connection between the means and the end must be such that the imple-
mentation of the means must directly result in the achievement of the end
without any intervening steps in the chain of causation. It is immaterial
how many links there are in the chain between the rules and the stated pur-
poses for the effectuation of which the rules are made. On the basis of the
affidavits filed, the Court jield that the rules were reasonably related to the
purposes stated.
The Supreme Court has taken the view that it would be beyond the
powers of the rule-making authority to give retrospective effect to the rules
unless it is vested with such a power.16 The same point has again been
emphasized in Income-tax, Alleppey v. M. C. Ponnoose.17 By a notifica-
tion issued in pursuance of section 2(44) (ii), the State Government invest-
ed the Tahsildar with the powers of a tax recovery officer with retros-
pective effect. The Supreme Court held that the notification, being a piece
of delegated legislation, could not be made effective with retrospective
effect. A sovereign legislature may enact laws with retrospective effect,
but whether a delegate may or may not make delegated legislation with
retrospective operation will depend on the language employed in the statu-
tory provision which may in express terms or by necessary implication
empower the authority concerned to make a rule with retrospective effect.
Where, however, no such language is used, the authority exercising sub-
ordinate legislative function cannot make a rule so as to operate with re-
16. S.C.C. Spg. & Wvg. Mills v. Customs Collector, AIR 1970 S.C. 1950.
17. AIR 1970 S.C. 385.

trospective effect.18
In Purxotoma v. Union of India?9 the Gur (Regulation oj Use) Order,
1968, which prohibited use of gur for purposes of distillation of liquor, was
challenged as ultra vires section 3 (2) (d) of the Essential Commodities Act,
1955. The Court agreed that the word 'regulating' in Section 3 (2) (d)
which prima facie would not include prohibiting' should not be interpreted
so widely as to include therein the function of 'prohibition'. There-
fore, the order in question might be treated as going beyond the purview
of section 3 (2) (d). But it could be justified under the parent section 3
(1), which is of general nature, while Section 3 (2) is of particular nature.
The matters enumerated in section 3 (2) are only illustrative, as such enu-
meration is "without prejudice to the generality of the powers conferred"
by section 3 (1). Reference was made in this connection to Emperor v.
Sibnath Banerji*0 and Santosh Kumar Jain v. The State.21
In Sitapur Municipality v. Prayag Narain,2* the Supreme Court consi-
dered the validity of delegated legislation made without observance of all
the prescribed procedural requirements. Section 126(1) (x) of the U.P.
Municipalities Act, 1916, empowers the municipal boards to impose a water
tax on the annual value of buildings or lands or both. Sections 131-135
lay down the procedure for imposing the tax. First, a municipal board
desiring to impose the tax is to pass a special resolution framing the preli-
minary proposal for the tax. The Municipal Board, Sitapur, passed a
special resolution for the purpose. Secondly, a Board is required to prepare
a draft of the rules in respect of the proposed tax. The Sitapur Board
duly prepared a draft of the rules. Thirdly, a Board is required to pub-
lish, in the manner prescribed, the proposal and the draft rules along with
a notice in the prescribed form. The draft rules along with the notice were
published in a local paper by the Sitapur Board, but the proposal was not
published separately, though it was to be found in the draft rules published
in the local paper. Objections filed by the inhabitants were duly consi-
dered by the Sitapur Board and it finally approved the tax proposal in
a modified form. Under section 132 (2), a Board is required to publish
the modified proposal, and the objections to it are to be dealt with in the
manner prescribed. The modified proposal of the Sitapur Board was not
published as required by section 132 (2). The prescribed authority acting
under section 132 (2) duly sanctioned the final proposal made by the Sita-
18. Also see, Subba Rao, J., in Dr. IndramaniPyarelal Gupta v. W. R. Nathu AIR
1963 S.C. 274; Modifood Products v. Commr. Sales TaK, AIR 1956 All. 35; India Sugar
Refineries v. State of Mysore, AIR 1960 Mys. 326; Shivdev Singh v. State of Punjab, AIR
1959 Punj. 453.
19. AIR 1970 Goa 35.
20. AIR 1945 P.C. 156.
21. AIR 1951 S.C. 201.
22. AIR 1970 S.C. 58.

pur Board and made the necessary rules in respect of the tax. Thereafter,
the Sitapur Board acting under section 134 (2) passed a special resolution
directing imposition of the tax but this special resolution was not published
in the manner prescribed. On receipt of the special resolution, the pres-
cribed authority acting under section 135 (2) notified in the official gazette
the imposition of the tax. Section 135 (3) provides that "a notification of
the imposition of a tax under sub-section (2) shall be conclusive proof that
the tax has been imposed in accordance with the provisions of this Act."
The levy of the water-tax was challenged on the ground of non-publication
of the preliminary proposal separately, non-publication of the modified
proposal according to section 132 (2), and non-publication of the special
resolution directing imposition of the tax. Holding the levy valid, the
Supreme Court pointed out that the procedural defects were not of a funda-
mental character as no substantial prejudice had been caused thereby to
the inhabitants of the municipality. Omission to publish the original
proposal separately was a mere irregularity and the object of the publica-
tion, viz., to inform the inhabitants of the proposal so that they could file
their objections to it had been fully achieved. Non-publication of the
modified proposal did not cause any prejudice to the inhabitants as they had
full opportunity to raise objections to the proposed tax and the modified
proposal was to levy the tax at a reduced rate. Non-publication of the
special resolution also did not create an infirmity, and was a mere irregu-
larity as the inhabitants had no right to file any objections against it. What-
ever the procedural defects, they were cured by the issue of the notification
under section 135 (2) which is 'conclusive proof that all necessary steps
for the imposition of the tax have been taken in accordance with the provi-
sions of the Act. Reference was made to Municipal Board, Hapur v. Raghu-
bendra Kripal,23 and Raza Buland Sugar Co. v. M. B. Rampur,^ where similar
questions had been disposed of by the Court earlier.
In Beni Prasad v. Jabalpur Improvement Trust,15 the Madhya Pradesh
High Court has had occasion to consider the effect of the "conclusive evi-
dence" clause in relation to the process of making delegated legislation.
A scheme made under the M.P. Town Improvement Trusts Act, I960, was
sanctioned by the State Government and announced by a notification pub-
lished under section 52 (1) of the Act. The scheme was challenged on the
ground of some procedural irregularities committed in framing it. Section
52 (3) of the Act says that publication of a notification under section 52 (1)
in respect of any scheme "shall be conclusive evidence" that the scheme
has been duly framed and sanctioned. The Court considered the ques-
23. AIR 1966 S.C. 693.

24. AIR 1965 S.C. 895.
25. AIR 1970 M.P. 191.

tion whether the alleged procedural irregularities would be cured by section
52(2). Referring to such Supreme Court cases as Berar Swadeshi Vanaspati
v. Municipal Committee, Shegaon** and Trust Mai Lachmi Sialkot Bradari
v. Chairman, Amritsar Improvement Trusty the Court noted that while in
the Berar case the Supreme Court had observed that the 'inclusive evidence'
clause barred a challenge "on the ground that all the necessary steps had
not been taken", in the Sialkot case, the Supreme Court had said that the
conclusive effect postulated by a clause under discussion "does not touch
a case where there in complete lack of jurisdiction in the authorities to
frame a scheme." In Raza Buland Sugar Co. Ltd., Rampur v. The Munici-
pal Board, Rampur?* the Supreme Court by a majority had taken the view
that such a clause "would not preclude an attack on the validity of imposi-
tion of any tax if there was no compliance with the mandatory provisions
of the procedure for imposition of such tax." In Municipal Board, Hapur
v. Ragnubendra Kirpal*9 the view taken by the Court in the Berar Vanaspati
case was re-affirmed. Hidayatullah, J., who had delivered a dissenting
judgment in the Raza Buland case, stated in the Hapur case that whether
'mandatory' or 'directory' provisions had been complied with or not, in
"either case the agency for seeing to this compliance is the State Govern-
ment". Noting the effect of the earlier pronouncements, he pointed out
that in case of a breach of a 'directory' provision, or "minor departures
from the letter of the law especially in matters not fundamental", once
the Government condones the departure, its decision "it rightly made final"
by the clause in question. He, however, did not deem it ' necessary to
investigate whether a complete lack of observance of the provisions would
be afforded the same protection". Thus, the Judge did not pronounce
his opinion on the question of the extent of immunity afforded by the "con-
clusive evidence" clause when the breach was of a 'mandatory' provision
or the authority concerned acted beyond its jurisdiction. Accordingly,
in the instant case, the M.P. High Court held that the procedural defects
were cured by the conclusive evidence' clause. Reading all the cases, along
with the Sitapur Municipality case, noted above,30 it would appear that
the 'conclusive evidence' clause would certainly give immunity against
any challenge on ground of breach of procedural' requirements, but would
not be effective in case of non-observance of a mandatory provision or
when there is a complete lack of jurisdiction in the rule-making authority.
It does not appear to be proper to give a broader operation to the clause
in question as the courts should have power to intervene in extreme cases
26. AIR 1962 S.C. 42.

27. AIR 1963 S.C. 976.
28. AIR 1965 S.C. 895.
29. AIR 1966 S.C. 693.
30. Note 22 supra.

of non-observance of the provisions of law by the executive. Such a case

would arise when the law gives a right of filing objections against a pro-
posed rule, and the rule-making authority does not afford such an oppor-
tunity. However, it stands to reason that if the "conclusive evidence"
clause were to have only such limited efficacy, then does it really serve
any useful purpose, for even without it, the courts would not quash dele-
gated legislation when only procedural, but not mandatory, provisions
are ignored.
Administrative Directions
It is an established fact of modern life that administration issues not

only 'delegated legislation' in various forms, but also directions through
circulars, letters etc.31 Issue of these instructions is however subject to cer-
tain restrictions, the most significant of which are that these canot be
issued to quasi-judicial bodies and that these cannot modify statutory rights.
These principles have been reiterated by the courts in a few cases during the
year.
In Cooperative Credit Bank v. Industrial Tribunal Hyderabad32 the
Supreme Court has held that the bye-laws made by a cooperative society
in pursuance of statutory provisions cannot be regarded to be 'law' or to
have the force of law. When rule-making power is given to a govern-
ment or other authority, the rules so framed have the force of law, but that
principle does not apply to the bye-laws which a cooperative society is em-
powered to make by an Act. Such bye-laws can be merely those which
govern the internal management, business or administration of a society.
They may be binding between the persons affected by them, but they do
not have the force of a statute. The bye-laws laying down conditions
of service of the employees of a society would be binding between the society
and the employees just as the conditions of service laid down by contract
between the parties. These bye-laws are similar in nature to the articles
of association of a company which do not have the force of law. The
standing orders certified under the Industrial Employment (Standing Orders)
Act, 1946, though binding between the employers and the employees of
the industry, do not have the force of law as to be binding on the indus-
trial tribunal. Accordingly, an industrial tribunal which is not merely
to administer existing laws and enforce existing contracts, but can even vary
contracts of service between the employer and the employee, could alter
the conditions of service of the employees prescribed by the bye-laws of a
co-operative society.
31. Jain & Iain, op. cit., 81-93.

32. AIR 1970 S.C. 245.
33. AIR 1970 Raj. 173.

In Guman Singh v. State,™ the Rajasthan High Court considered the
question of validity of a circular issued by the State Government laying
down a marking system to be followed by the selection committees in the
matter of promotion of government servants from the lower to the higher
posts. After reviewing the various cases in the area,34 the court opined
that while administrative instructions could not be issued to quasi-judicial
bodies, the same may be issued to non-quasi-judicial bodies provided, how-
ever, that the instructions do not impinge on the statutory rules. The court
referred specifically to Sant Ram's case,35 where the Supreme Court has
pointed out that the Government could not amend or supersede statutory
rules by administrative instructions, but if the rules are silent on any parti-
cular point, government can fill up the gaps and supplement the rules by
issuing instructions not inconsistent with the rules. The circular in ques-
tion in the instant case was held bad because of its inconsistency with the
rules, for while the underlying policy of the rules was that merit alone
should be the basis of promotion, the circular provided for promotion on
the principle of seniority-cwm-merit.
To protect the impartiality and objectivity of quasi-judicial bodies,
the judiciary has held that government cannot even issue instructions of
a general nature to quasi-judicial bodies so as to restrict or control their
discretion. As the Supreme Court has held in B. Rajgopala Naidu v. State
Transport Ltd.,ZQ section 43A of the Motor Vehicles Act, which confers
power on the State Government to issue directions to the Transport Autho-
rity refers only to administrative and not to a quasi-judicial function and
that the Transport Authority discharges a quasi-judicial function while
dealing with applications for permits and evaluating the respective claims
of the parties. Similarly, exercise of the power to sanction the transfer
of a permit under section 59(1) is quasi-judicial and, therefore, the govern-
ment is not competent to impose any restrictions upon the exercise of these
powers through executive instructions. Accordingly, in Ravi Roadways
v. Asia,*7 the Supreme Court has declared invalid a government order issu-
ing certain instructions to the Regional Transport Authority in the matter
oi transfer of a permit in respect of state carriage.
II. QUASI-JUDICIAL POWER : RIGHT OF HEARING

For some time past, a tendency may be seen manifesting itself on the
34. State of Punjab v. Suraj Prakash, AIR 1963 S.C. 507; Mannalal Jain v. State of
Assam, AIR 1962 S.C. 386; S. K. Ghosh v. Union of India, AIR 1968 S.C. 1385; B. Raj-
gopala v.S.T\A. Tribunal,AIR 1964 S.C. 1573.
35. AIR 1967 S.C. 19].
36. AIR 1964 S.C. 1573. Supra note 34.
37. AIR 1970 S.C. 1241. See, Sirpttr Paper Mills v. Commr. of W.T., infra, where the
court has interpreted s. 13 of the Wealth Tax Act in a similar manner.

part of the judiciary to hold more and more functions performed by the
administration as quasi-judicial. The reason is that modern legislation
confers vast powers on the administration but no procedural safeguards
are usually laid down for those whose interests are affected by exercise of
those powers. By holding a power as quasi-judicial, the Courts are able
to win some safeguards for affected interests in the name of natural justice.88
The concept of natural justice as such does not apply to what is called
'administrative power' though, at times, the courts have said that 'fair play'
demands that hearing be given to an affected person even when a power
is * administrative' and not 'quasi-judicial'.39 The cases decided in 1970
do show an increasing tendency on the part of the courts to insist on hear-
ing by the administration in discharging its functions. If this trend is
accentuated, a very welcome result will be that 'hearing' will become the
normal norm of administrative process, and there will be no need to charac-
terise a function as 'quasi-judicial'. Non-hearing will then become an ex-
ception and the courts may lay down some tests as to when they would
not insist on hearing in contrast to the present-day position when the courts
have to state as to when they would insist on hearing.
For the present, however, in spite of the judicial trend to dilute the
demarcation between 'quasijudicial' and 'administrative' functions, the
concept of 'quasi-judicial' remains valid and relevant in Indian Administra-
tive Law for the purposes of hearing and when a person complains of
'hearing' not having been given to him, the courts do still go into the ques-
tion whether the function is 'administrative' or * quasi-judicial' to decide
the question of hearing.
Under the Sugarcane (Control) Order, 1966, a minimum price is to be
payable by a sugar factory for the sugarcane purchased by it. Over and
above this, the Order provides for payment of an additional price, for sugar-
cane purchased during 58-62, according to a formula contained in the Order.
The Government appoints an officer to determine the additional price and
an appeal lies to the Central Government from his decision. The Govern-
ment has also been given power to exempt any sugar mill from payment
of the additional price if the Government is satisfied that during any year
a factory has made no profit or has made an inadequate profit. In A.S.
Society v. Union of India,*® the authority concerned quantified the addi-
tional price payable by the Mill in question for sugarcane purchased by it
during the years 61 and 62. On being moved by the mill, thp Central
Government granted exemption to it from payment of the additional price.
Two questions arose for consideration before the Mysore High Court:
(1) was the power to exempt vested in the government arbitrary; (2) should
38. Jain & Jain, op. cit., 93 et sea.

39. Infra, Sec IV.
40. AIR 1970 Mys. 243.

not the government have heard the suppliers of sugarcane before granting
exemption to the mill from payment of the additional price? On the first
question, the court held the power not to be arbitrary. The Central Govern-
ment can grant exemption only when it is satisfied that a factory has nol
made profit or such profit is inadequate. Thus, the absence of profit or
inadequacy of profit form the guide-lines for exercise of power to grant
exemption wholly or partially. On the second question, the Court held that
the supplies of sugarcane must have been given an opportunity of being
heard as they had an accrued right to additional price. As exemption
affects the statutorily accrued right of sugarcane growers to get additional
price, the question whether exemption should be given assumes a quasi-
judicial character and principles of natural justice require that sugarcane
growers should be heard. Referring to the Kraipak case,41 the Court main-
tained that whether the decision of the Government to grant exemption
is regarded as 'quasi-judicial' or 'administrative', the sugarcane suppliers
should have been heard or allowed an opportunity to make their represen-
tation. In the absence of this, the Government's order granting exemption
is void.
In Ama Stores v. Collector*2 the Chief Controlling Revenue 'Authority
functioning under the Stamp Act has been held to act in a quasi-judicial
capacity while hearing an appeal from the Collector.43 The matter came
before the Board of Revenue on a reference by the Collector under section
56(2) of the Stamp Act. It was held that the Board acts quasi-judicially
while determining the reference. Therefore, disposal of an appeal by
the Board without hearing the party concerned is invalid as principles
of natural justice have to be followed by the Board. Accordingly, the
order of the Board was quashed for failure to observe natural justice.
Chitra had appeared at the Intermediate examination of the Board.
The Board cancelled her examination on the ground that she was admi'ted
to it in spite of shortage in attendance. In The Board of High School &
Intermediate Education, U.P., v. Chittra,u the Supreme Court quashed
the order of the Board. The petitioner had appeared in the examination
and answered all the question papers. According to her she had passed.
To deny her the fruits of her labour cannot but be called a penalty. Accord-
ingly, the Board should have followed principles of natural justice. The
Board's order was quashed because "no notice had been given to the peti-
tioner to explain." To the argument that it would cast a heavy burden
on the Board if ''cancellation of examination" was held to be a quasi-
judicial function, the Court said "Principles of natural justice are to some
41. Infra, this section.

42. AIR 1970 Mad. 148.
43. Board of Revenue v. Vidyawaii, AIR 1962 S.C. 121.
44. AIR 1970 S.C. 1039.

minds burdensome but this price, a small price indeed has to be paid if we
desire a society governed by the rule of law." Rejecting the argument
that no useful purpose would have been served by the Board giving a show
cause notice to the petitioner because the facts were not in dispute, the
court replied that a duty to isue a show-cause notice in a particular case
before inflicting a penalty does not depend on the authority's own satis-
faction that the person to be penalised has no defence but on the nature of
the order proposed to be passed.
In Mohd. Ibrahim v. S.T.A. Tribunal, Madras,^ the Supreme Court
considered the nature of the function exercised by the Regional Transport
Authority under section 47 (3) of the Motor Vehicles Act. Under section
47 (3), the Regional Transport Authority can limit the number of stage
carriage permits. The question was whether the Authority was required
to hear persons before doing so. The Court held that the jurisdiction
exercised by the A thority under section 47(3) is very different from that
exercised by it while granting stage carriage permits under section 57. The
Authority is required to dispose of applications for grant of permits at
a public hearing and it has to give reasons in writing for refusal to grant
permits. The procedure for hearing is not, however, applicable when
the Authority limits the number of stage carriage permits, for in doing
so, it does not deal with individual or competing rights of operators but is
required to arrive objectively at its own conclusion independent of any
application or representation by operators.
Cancellation of a permit under section 60 of the Moior Vehicles Act
has been held to be a 'quasi-judicial' function on the part of the R.T.A.46
Similarly, in A. Ditta v. Dy. Supdt. of Policed the power to suspend the
certificate of registration of a vehicle under section 33(1) of the Motor Vehi-
cles Act has been held to be a quasi-judicial act. Therefore, before taking
an action, the Authority concerned has to give sufficient information to the
person concerned on which the order is sought to be based, as in the
absence of adequate information, no effective representation can be made
by the person affected.
In Krishnagopal Dutta v. R. T. A., Burdwan** the question considered
was whether principles of natural justice should be followed in case of
grant of a temporary permit. Should those who are already providing
service on the route in question be given an opportunity to place their point
of view against grant of a temporary permit? Section 47 of the M.V.A.
requires that after taking into consideration the matters set out in clauses
(a), (b), (c), (d) and (f), the Regional Transport Authority shall take into
45. AIR 1970 S.C. 1542.

46. ShibKumarv.S.T. Authority, AIR 1970 Ca! 174,
47. AIR 1970 Goa 116.
43. AIR 1970 Cal. 10.

consideration any representations made by persons already providing
passenger transport facilities by any means along or near the proposed
route or area. It was argued that the procedure prescribed by section 47
should be followed by a Regional Transport Authority in all cases of grant
of a stage carriage permit whether such a permit was for a temporary period
or for the full period of 3 or 5 years and, therefore, the respondent (R.T.A)
was bound to give to the petitioner, who was already providing passenger
transport facilities on the concerned route, a show-cause notice and an
opportunity of making representations against grant of a temporary peimit.
The contention was accepted. There is nothing in section 47 to justify the
conclusion that representations from interested parties would be taken into
consideration in the case of regular stage carriage permits only and not in
case of a temporary permit. A person already providing transport facili-
ties on the route concerned would be vitally affected by the grant of a permit
even though temporary and, therefore, the R.T.A. should follow the prin-
ciples of natural justice, serve a notice upon the party and also hear any
representations from him while considering an application for grant of a
temporary permit. The provision in section 47 for taking into considera-
tion representations from parties likely to be affected by the grant of a per-
mit is mandatory in nature. Under section 62 of the Act, authority to
issue a temporary permit is limited and confined only to the four grounds
mentioned therein. In addition, a few other restrictions have been imposed
by the Act to the grant of a temporary permit. The R.T.A. being a statu-
tory authority derives its powers from the Act and must act within its
limitations. It is, therefore, necessary that the authority makes a state-
ment of the purposes of the grant so that the order authorising issue of a
temporary permit may open to scrutiny having regard to the statutory
restrictions. To the same effect is the decision of the Andhra Pradesh
High Court in G. Madhava Rao v. R.T.A.49
There has been a difference of opinion among the High Courts on the
question whether the power of fixing the time-table under section 48(3)(iii)
of the Motor Vehicles Act is quasi-judicial or administrative. A few High
Courts have characterised it as a quasi-judicial power,60 but in Kalu Singh
v. Tr. App. 7>.,51 the Rajasthan High Court has held it as 'administrative.'
The Act lays down no specific procedure to be followed by the R.T.A.
while drawing up the time-table and the power of fixing the timings is spelt
out from section 48 (3) (iii). The power of the R.T.A. of approving a time-
49. A R 1970 A.P. 419. A number of other High Court cases also support the
same view. Co-op. Society v. Punjab State, AIR 1959 Punj. 1; Prem Bus Service v. R. T. A.,
AIR 1968 Punj. 344; Kota Transport v. R. T. A., AIR 1954 Punj. 33.
50. Kishorilal v. Secy., Regional Transport Authority, AIR 1962 M.P. 7; A. Veda-
chala Mudaliar v. State of Madras, AIR 1952 Mad. 276.
51. AIR 1970 Raj. 159.

table is really one to regulate the running of the vehicles on a particular

route. Although the financial interests of some operators might be affect-
ed to some extent, that by itself is no ground to hold that the R.T.A. acts
in a quasi-judicial manner m fixing the time-table. It does not, therefore,
have to give an opportunity of hearing to the concerned operators.
The petitioner was an authorized dealer under CI. 2 (a) of the Imported
Foodgrains (Prohibition of Unauthorised Sale) Order. The Gujarat High
Court has held that an order cancelling this authorization on the ground
of misconduct being penal in nature can only be passed in accordance with
the principles of natural justice.52
Under section 32 of the Bihar Town Planning and Improvement Trust
Act, 1951, the State Government is empowered to set aside any resolution
of the Improvement Trust if, in its opinion, the resolution or order is in
excess of the power conferred by law. In Surya Vijoy Singh v. State of
Bihar,hz the Government cancelled a resolution passed by the Patna Improve-
ment Trust appointing the petitioner, a temporary Executive Engineer,
as a permanent Engineer on probation. The petitioner's grievance against
the Government's order was that he had not been given any notice before
passing the order. Sustaining the objections, the Court stated that though
it is true that section 32 does not expressly say that notice must be given
to the party who is to be affected prejudicially by the Government's order,
yet it is well established, as a matter of law, that in such a case the Govern-
ment should act according to natural justice and give a notice to the party
concerned.
Under section 17 (3), the licensing authority may revoke a licence of
arms if the licensing authority deems it necessary for the security of the
public peace or for public safety. The authority is to record its reasons
for revoking the licence. From this order, an appeal lies to an appellate
authority. There has been a difference of opinion among the High Courts
on the question whether hearing should be given to a licencee before can-
celling the licence. One view holds that, as the statute makes no provision
lor giving an opportunity to the licencee,54 no such opportunity need be
given to the licencee while cancelling his arms license. The other view
insists on natural justice being observed in such a case. Following the
Kraipak case,55 the Orissa High Court has held in Sisir Kumar v. State**
that natural justice should be followed. Provisions for appeal make it
necessary that principles of natural justice be followed for, otherwise,
52. C. M.Shah v. M.Patial, AIR 1970 Guj. 67.

53. AIR 1970 Pat. 213.
54. Hassan Aliv. Commissioner, AIR 1969, Ass. 50.
55. Infra, note 6.
56. AIR 1970 Ori. 110.

the right of appeal would become wholly illusory if the licensee has no
right of hearing before the revoking authority.
Under section 29 of the Railways Act, 1890, the Central Government
fixes the maximum and minimum rates from time to time applicable to
government and other private railways. By virtue of section 42, the Cen-
tral Government classifies any commodity, which has been classified before,
or re-classifies any commodity and increases or reduces the level of class
rates and other charges applicable to government and other private rail-
ways. In 1962, the Railway Board revised the basic freight rates for goods
etc. in respect of all government railways. The petitioner, a private rail-
way company, also sent a representation requesting for applying the in-
creased freight rates to it. This representation was rejected by the Railway
Board. All other non-government railways were permitted to increase
freights except the petitioner company. The company questioned the
Railway Board's order inter alia on the ground that the power vested by sec-
tions 29 to 42 is quasi-judicial and has to be exercised in conformity with
the principles of natural justice. The Court has pointed out in D.R.L.
Rly. Co. v. Union India,57 that before passing orders under sections 29 and
42, the Central Government has to take into consideration various facts.
Further, such an order affects the right of the company to run its railway
according to its choice. The Governm nt has to pass orders on the mate-
rials placed before it. The order seriously affects the right of the compa-
nies to run railways. Taking all the circumstances into consideration, the
court has held that the government must act judicially in the matter of
regulation of freights etc., applicable to non-government railways, and the
power must bj exercised in confo. mity with the principles of natural jus-
tice.
On the question of hearing, Bihar S.E. Board v. Subhas Chandra?* is
another significant pronouncement of the Supreme Court during the year.
Candidates at the Secondary School Examination of the Board at one centre
indulged in mass copying. Accordingly, the Board cancelled the exami-
nation of all subjects at the centre concerned and permitted the examinees
to re-appear at a supplementary examination. The candidates challenged
the order of the Board on the ground that no opportunity had been given to
them to show cause before passig the order. The Patna High Court
relying upon Board of High School v. Ghanshyam59 held that the Board had
failed to act according to the principles of natural justice and therefore
quashed the order. The Supreme Court admitted the Board's appeal and
reversed the High Court's decision. The Supreme Court rejected the argu-
ment based on natural justice. The court pointed out that it was obvious
57. AIR 1970 Pat. 109.

58. A I R 1970 S.C. 1269.
59. A I R 1962 S.C. 1110.

from the results that candidates at the centre concerned had indulged in
mass copying. While at other centres, the average of successful candidates
was 50%, at this particular centre the percentage reached up to 100 in certain
subjects. These figures spoke for themselves. In the instant case, it was
not any particular individual who was being charged with adoption of un-
fair means but a vast majority of the examinees had indulged in unfair means.
It was a case of condemning the examination as ineffective for the purpose
it was held and in such a situation it was not necessary for the Board to
give an opportunity to the candidates as the examination as a whole was
being cancelled. No single examinee had been charged with unfair means
so that he could claim to defend himself. As the examination had been
vitiated as a whole by adoption of unfair means on a mass scale, it would
be wrong to insist that the Board must hold a detailed inquiry into the
matter and examine each individual case to satisfy itself which of the can-
didates had not adopted unfair means. In the circumstances, the exami-
nation as a whole had to go. Ghanshyam's case applies only when any
particular person is to be proceeded against; he should be given an oppor-
tunity even though the number of persons proceeded against was large.
In that case, the court did not consider the right of an examining body to
cancel the entire examination when it is satisfied that the examination was
not properly conducted or that in the conduct of the examination the majo-
rity of the examinees had not conducted themselves as they should have.
To make such decisions depend upon a full fledged judicial inquiry would
hold up the functioning of such autonomous bodies as universities and
school boards. If there is sufficient material on which it can be demons-
trated that the university was right in its conclusion that the examinations
ought to be cancelled, then academic standards require that the university's
appreciation of the problem must be respected. This decision of the
Supreme Court is based on two grounds, viz., convenience and no stigma
being attached to any particular individual examinee as was the case in the
Ghanshyam Das case. Another notable difference between Ghanshyam
Das and the present case is that in the former not only the result was can-
celled after declaration and admission into the next higher class, but also
he was debarred from appearing at the examination for a year. There was
thus an element of punishment involved in that case. In the instant case,
the results had not been declared; examination as such was cancelled and
no punishment was involved as the examinees were permitted to appear
at a supplementary examination. There was thus no loss to the examinees.
A. K. Kraipak v. Union of lndiaG0 is the most outstanding judicial pro-
nouncement of the year. The facts of the case were that for selection to
the Indian Forest Service from out of the employees of the State of Jammu
60. AIR 1970 S.C. 15

and Kashmir, the Government appointed a selection board consisting of,
among others, the acting Chief Cor servator of Forests of the State, who
himself was a candidate for the selection post. The bond selected a num-
ber of persons from amongst the state employees in the Forest Department,
including the acting Conservator of Forest as well. Some of the unsuccess-
ful candidates challenged the list as finally prepared by the Union Public
Service Commission on the recommendations of the State selection board.
The Supreme Court emphasized that while the list prepared by-the selection
board was not the last word in itself in the matter of selections, nevertheless.
This list must have weighed with the Union Public Service Commission
in making the final selections. The Court refused to characterise the selec-
tion board's function as administrative or quasi-judicial by saying that
the line of demarcation between these functions is quite thin and is being
gradually obliterated. And further that the concept of rule of law would
lose its validity if the instrumentalities of the state are not charged with the
duty of discharging their functions in a fair and just manner. The Court
emphasized that the requirement of acting judicially, in essence, is nothing
but a requirement to act justly and fairly and not arbitrarily and caprici-
ously. The procedures which are considered inherent in the exercise of a
judicial power are merely those which facilitate, if not ensure, a just and
fair decision. The Court noted that in recent years, the concept of ^uasi-
judicial power has been undergoing a radical change and that what was once
considered as an administrative power is now being considered as a quasi-
judicial power. Assuming, for the sake of argument, that the function
involved in the instant case was 'administrative', the Court held that it was
improper to have the Acting Conservator of Forests as a member of the
selection board when he himself was a candidate. There was a reasonable
ground to believe that he was likely to have been biased as he would be
interested in safeguarding his own position while preparing a list of selected
candidates.
The court then considered the question whether principles of natural
justice could be applied to 'administrative' as distinguished from 'quasi-
judicial' proceedings and answered the question in the affirmative. The
rules of natural justice aim at securing justice, or to put it negatively, to
prevent miscarriage of justice. If that is the purpose, one fails to see why
those rules should be made inapplicable to administrative enquiries. After
all, arriving at a just decision is the aim of both quasi-judicial as well as
administrative enquiries. The selections were quashed in the instant case
as the board's decision could not be said to have been taken 'fairly' or
'justly' insofar as one of the members of the board was a judge in his own
case, a circumstance abhorrent to the concept of justice.
The Kraipak case may be regarded as epoch-making in the Indian
Administrative Law insofar as the line of distinction, many a time artificial,
between 'quasi-judicial' and 'administrative' functions is now sought to be

made thinner and principles of natural justice are sought to be made appli-
cable even to what may be characterised as administrative proceedings.
If the right of hearing, which is the core of natural justice, becomes the
universal norm, then there would be much simplification of the law because
the courts would then be spared of the trouble of first characterising a function
as 'quasi-judicial' or 'administrative', to decide whether principles of natural
justice are applicable to the same or not. An immediate impact of the case
on the future growth of administrative law in India has been the increasing
judicial trend of characterising many more functions as 'quasi-judicial' and
thus ensure 'hearing' to the party affected. The High Courts have recognised
that the Kraipak case widens the vista of the concept of natural justice.61
For instance, in C. B. Boarding and Lodging v. State of Mysore,*2, the
Supreme Court has held that it was not necessary to go into the question
whether the power conferred on the government to fix the minimum wages
under section 5(1) of the Minimum Wages Act is 'quasi-judicial' or 'adminis-
trative' power, nevertheless, the government should observe the principles
of natural justice in any case. The court invoked the Kraipak case to state
that the dividing line between an administrative and quasi*judicial power
"is ^uite thin and is being gradually obliterated", and that "principles of
natural justice apply to the exercise of the administrative powers as well."
Natural Justice
Questions concerning infrigement of some aspect of natural justice con-

tinue to be raised before the courts from time to time. The point made
earlier by the courts63 has been re-emphasized by the Supreme Court in
C. B. Boarding & Lodging v. State of Mysore** that the principles of "natural
justice" are not "embodied" rules and what particular rule of natural justice
should apply to a given case must depend, to a great extent, on the facts
and circumstances of that case, the framework of the law under which the
inquiry is held and the constitution of the tribunal or body of persons
appointed for the purpose. Accordingly, in this case, taking into consi-
deration the provisions of the Workmen*s Compensation Act, the objective
behind it, the purposes intended to be achieved by it and the high authority
on whom the power is conferred, the procedure adopted by the Act has
been held to be "adequate and effective."
That personal hearing is not an inevitable part of natural justice has
been the theme of several judicial pronouncements.65 In Jethmal v. Union
61. See, for example, Sisir v. State, supra, note 56

62. AIR 1970 S.C. 2042.
63. Jain& Jain, op. cit., 163-209.
64. Supra note 62. Also see the Kraipak case, supra, on this point.
65. Also see, D.R.L. Rly Co. v. Union of India, supra note 57, on this pioint

of India,*6 proceedings were initiated against the appellant under section
167 (8) of the Sea Customs Act and section 19 of the Foreign Exchange
Regulation Act for smuggling gold into India. A notice was given to the
appellant to show cause as to why the gold should not be confiscated and
further penal action taken against him. He was asked to indicate in his
written explanation as to whether he wished to be heard in person. The
appellant sent no reply to this notice. After sometime, the customs autho-
rities adjudicated upon the matter on the basis of such materials as they
had before them, confiscated the gold and levied a penalty. The Supreme
Court ruled that there was no violation of natural justice. If no reply was
sent to the show-cause notice, the authorities could proceed ex parte. In
Ondal Coal Co. v. Sonepur Coalfields,*1 it has been held that the words "an
opportunity of making a representation against the order proposed" in
rule 39 of the Coal Mines {Conservation and Safety) Rules, do not involve
a personal hearing, but the applicant is entitled to a notice to show cause
before a decision is taken, so that he may make a written representation
before the order is made. Also, if any evidence is being used against him,
he should be supplied with the materials relied upon against him.
It has been reiterated by the court that requirements of natural justice do
not conform to any rigid formula which is universally applicable and that
personal hearing is not an essential ingredient of natural justice in every
case.68
In R. Goenka v. I.T. Officer,® the Assam High Court has held that
cancellation of registration of a partnership firm by the Income-tax Officer
(under rule 63 of the Income Tax Rules) without giving a notice in that
behalf and without affording the firm an opportunity to satisfy the officer
that it is a genuine firm, is bad as being against natural justice. In so hold-
ing, the Court has followed Narayan Chetti v. I.T.O.™
A candidate was debarred from appearing in the B.A. Examination
for two years because he had used unfair means at the examination. The
Calcutta High Court held in S.C. Paul v.Calcutta University,71 that there was
a violation of natural justice insofar as evidence of witnesses was heard
^behind the petitioner's back, who was not given an opportunity of testing
their evidence by cross-examination. Invoking State of Mysore v. Sivaba-
sappa?2 the Court has held that rules of natural justice require that if any
66. AIR 1960 S.C. 1313,

67. AIR 1970 Cal. 391,
68. F. N. Roy v. Collector of Customs, AIR 1957 S.C. 648; N. P. T. Co. v. N.S.T. Ca.
AIR 1957 S.C. 232; General Medical Council v. Spackman, 1943 A.C. 627.
69. AIR 1970 Ass. 84.
70. AIR 1959 S.C. 213.
71. AIR 1970 Cal. 282.
72. AIR 1963 S.C. 375.

evidence is considered against the petitioner he must be given an oppor-

tunity of cross-examining the witnesses.
In Devi Sahai v. T. A. Tribunal,*7* the Rajasthan High Court has con-
sidered the important question whether it is necessary for the authority
concerned to hear witnesses while cancelling a permit under section 60 of
the Motor Vehicles Act. The Court has held that the function is quasi-
judicial because—(1) section 60 itself stipulates that no permit shall be
cancelled unless an opportunity has been given to the holder of the permit
to furnish his explanation; (2) under section 60 (2), the authority cancelling
a permit is required to give to the holder in writing its reasons for the action
taken; (3) under section 64 (b) an appeal lies against an order of revocation
to the Transport Appellate Tribunal. A similar view has been taken in
many other cases.74 In the Devi Sahai case, the authority did not give a rea-
sonable notice to the permit-holder informing him of the case against him.
The Court has characterised it as a flagrant violation of natural justice to
condemn a man without telling him what he is accused of. Further, when
witnesses are produced by the parties they must be heard. On this point,
the Rajasthan High Court has disagreed with the view taken by the Madras
High Court that the authority is not required to hear witnesses in case of
cancellation of a permit under section 60 because it has no authority to
summon witnesses or to enforce attendance and omission in the statute
of such a power suggests that it was not the intention of the legislature that
the authority should examine any witnesses. The Rajasthan High Court
has held that if "there is any factual controversy regarding the facts alleged
for the cancellation of a permit, then the substance of what the witnesses
for and against have deposed must be recorded," and although the autho-
rity may not have any power to summon witnesses, yet from this no infer-
ence can be drawn that witnesses cannot or should not be examined and
that this becomes all the more necessary as an appeal has been provided
for under the Act itself to a tribunal."75
The power to supersede a municipal corporation vested in the Govern-
ment by Section 422 of the M. P. Municipal Corporation Act 1956, has been
held to the quasi-judicial in nature in Suresh v. State.76 Reference was made
in this connection to Durayappah v. Fernando.71 In the instant case, charges
agains- the corporation were framed after a preliminary inquiry by the
73. AIR 1970 Raj. 48.

74. Krishna Gopalv. Regional Transport Authority, 1960 Raj. L. 156; Madan Mohan
v. S.TA. Authority, AIR 1966 M P. 144; S.M. Transport v S.T.A. Tribunal, AIR 1965 Mad.
471.
75. Dhanmalw. R.T.A., AIR 1959 Mad. 531.
75a. Also see, Y. Thirupathi v. Andhra State, AIR 1957 A.P. 608.
76. AIR 1970 M.P. 154.
77. (1967) 2 A.C. 337.

Commissioner. After the explanation of the Corporation was received,
no further inquiry was held and the case was only re-examined resulting
in thet order of supersession. The first report made by the Commissioner
was not shown to the Municipal Corporation. The Court held that on
these facts, the inquiry report made by the Commissioner was an important
material which was taken into account by the government in taking action
against the corporation. If there is a second inquiry, after receipt of the
explanation, and the preliminary inquiry report is not considered in the
second inquiry or in taking the final action, withholding of the preliminary
inquiry report may not result in the infraction of the rules of natural jus-
tice. But, in cases, where there is no fresh inquiry after the show-cause
notice, the explanation furnished is bound to be judged in the light of the
earlier inquiry report on which charges were based. The preliminary
inquiry report was thus an important material to be taken into account in
making the final order and its non-disclosure necessarily results in denial
of adequate opportunity to show cause. Under the Act, the reasons for
making the order of supersession have to be given. This requirement
must be understood to mean that reason for rejection of the explanation
of the corporation must be stated. The statutory requirement of stating
(he reasons is not satisfied simply by narrating the charges and the opinioi}
of the government that the explanation of the corporation has failed to
meet the charges. Reasons for that opinion should be stated.78 The cor-
poration is entitled to know for what reasons the representation submitted
by it in opposition to charges is rejected by the Government. The reasons
must, therefore, deal with points of fact and law raised in the representa-
tion. Such a course will also ensure that the government really applies
its mind to the representation submitted by the Corporation and does not
merely state that it has done so.
It is a well established proposition that bias of the decision-maker
invalidates a quasi-judicial decision or proceeding.79 In P. M. Kurien v.
P. S. Raghavanm, a student was detained in his class by the Principal and
the College Council on the ground of his using unfair means at the promo-
tion examination. The High Court quashed the order on the ground of
violation of natural justice. The Principal again proceeded with the charge,
appointed an inquiry committee and on its recommendation the College
Council again recommended detention. These proceedings were now
questioned again on the ground of bias. It was argued that the Principal
was the initiator of the proceedings and also the judge and that he and the
Council had once decided the matter without hearing and so they had a
78. Reference made to Iveagh v. Minister of Housing faLocal Govt. (1964) Q.B. 395.
79. Jain & Jain, op. cit., 165-180.
80. AIR 1970 Ker. 142.

bias in favour of their earlier decision and, therefore, they were not cap-
able of reaching a fair decision after hearing. The High Court rejected
the ground of bias. Referring to Metropolitan Properties Co. v. Lannon,81
the High Court observed that the true test of bias is the "real likelihood"
test or the "instinctive opposition approach. Any insignificant and re-
mote interest will not be sufficient to invalidate a quasi-judicial decision.
A reasonable person should think it likely "in all the circumstances" that
there was bias. In P. Sreeramulu v. State,** the ground of bias was sustain-
ed by the Andhra Pradesh High Court. The Deputy Superintendent of
Police in his "charge-memo" to a head constable and a police constable
expressed in categorical terms his opinion that the employees "had abused
their position and brought discredit to the department." The question was
whether or not the Deputy Superintendent was disqualified to hold the
inquiry on the ground of bias. Quashing the proceedings, the court stress-
ed the point that there were certain basic principles of natural justice which
applied to such inquiries. For example, a person who has conducted a
preliminary enquiry and found a prima-facie case for a regular enquiry,
would not be permitted to conduct the regular enquiry because he has al-
ready in some way formed an opinion in the case. Similarly, where an officer
has expressed definite views on the conduct of a delinquent officer, he will
not be permitted to hold an enquiry. In the instant case, the Deputy
Superintendent had expressed a categorical opinion which indicated bias;
or, at any rate, a fear or apprehension in the mind of the delinquent that
he had no hope or chance of a fair trial and this would vitiate the proceed-
ings.
It is well settled that a quasi-judicial decision cannot be arbitrary.
In Tribhuban Parkash v. Union of India,sZ an order passed by the Chief
Settlement Commissioner in exercise of his power of revision under section
5(b) of the Displaced Persons (Claims) Supplementary Act, 1954, was quashed
because the Commissioner had "at more places than one based his con-
clusions on pure conjectures and surmises without there being any legal
evidence on the record to support them." In N. Raja Pullaiah v. Dy.
Commissioner Tax Officer** the court had held that assessment of taxes
to the best of judgment has to rest on some relevant dependable data and
cannot be arbitrary. The best judgment assessment is liable to be set aside
where the data relied upon by the assessing authorities as its basis smacks
of arbitrariness. The duty of a tribunal has been very well underlined
by the Supreme Court in Hindustan Steels Ltd. v. A. K. Roy.*5 Speaking
81. (1968) 1 W.L.R 815.

82. AIR 1970 A.P. 114.
83. AIR 1970 S.C. 540.
84. AIR 1970 A.P. 125.
85. AIR 1970 S.C. 140.

in the context of a labour tribunal, the Court has emphasized the point
that a tribunal has to exercise its discretion judicially and in accordance with
well recognised principles. If a Tribunal exercises its discretion mecha-
nically without weighing the circumstances of the case, that would be no
exercise of discretion at all. If a statutory tribunal exercises its discretion
on the basis of irrelavant considerations or without regard to relevant consi-
derations, certiorari may properly issue to quash its order. One such rele-
vant consideration, the disregard of which would render its order amen-
able to interference by the courts, would be the well settled principles laid
down in decisions binding on the Tribunal to whom the discretion is
entrusted.
In a number of cases, the courts have quashed quasi-judicial decisions
on the ground that the concerned authority did not exercise its own mind
in arriving at its decision, or, that it was acting under dictation or direction
of some other agency. Section 8 (1) of the Bengal Excise Act provides
that the Excise Commissioner shall be subject to the control of the State
Government while the Collector shall be subject to the control of the Ex-
cise Commissioner and of the State Government. The Calcutta High Court
has held in State of West Bengal v. Ruttonjee & Co.,*Q that the expression
'control' in this provision "does not authorise the State Government to
make a decision itself or issue a specific direction as to how a case is to be
decided." To the same effect is JR. Dodrigues v. W. G. Ranadive.87 Here,
the court quashed a decision by a Mamlatdar acting under section 7 of the
Goa, Daman and Diu Agricultural Tenancy Act, 1964 on the ground that he
had reached the decision mainly because the Chief Minister had decided
in that way. The court emphasized that as he was acting in a quasi-judicial
manner he should have decided the petitioner's contention without taking
into consideration the alleged decision of the Chief Minister. In the same
line is the Supreme Court's decision inPurtabpur Co. v. Cane Commissioner**
Under cl. 6 of the Sugar Order, the Central Government can reserve any
sugarcane area for a factory for purchase of sugarcane having regard to the
factors laid down therein. The Central Government delegated the power
to the State Government as well as the Cane Commissioner of the State.
The Cane Commissioner, to begin with, made an order reserving 208 villages
for Purtabpur Company, but later modified the order at the instance of the
Chief Minister. The Court quashed the Commissioner's order on the
ground that the proceedings before the Cane Commissioner when he was
seeking to modify his original order on the representation of another mill
86. AIR 1970 Cal. 548, Reference was made to State of Punjab v. Hari Kishan,
AIR 1966 S.C. 1081 and to Purtabpur Co. v. Cane Commissioner, AIR 1970 S.C. 1896;
see infra, note 88.
87. AIR 1970 Goa 94.
88. AIR 1970 S.C. 1896, See note 86.

was quasi-judicial in nature and though the order was purported to have
been made by him, it had, in fact, been made by the Chief Minister and the
Cane Commissioner merely carried out the Chief Minister's orders. Another
ground of the order's invalidity was that the proposal to modify the reserved
area was not made known to the appellant and his objections were not
invited in that regard and, hence, there was a contravention of natural
justice.
In Sirpur Paper Mills v. Commissioner of Wealth Tax,B* the Supreme
Court quashed the order of the Commissioner of Wealth Tax because he
had surrendered his authority and judgment to the Board of Revenue
in deciding questions raised by the company in its revision application to
him against the order of the Appellate Assistant Commissioner of Wealth
Tax. Section 13 of the Wealth Tax Act provides that all officers shall ob-
serve and follow the directions of the Board of Revenue. The Court point-
ed out that these instructions might control the exercise of the power of the
officers in 'administrative', but not 'quasi-judicial', matters. Therefore, the
Board cannot give instructions to the Commissioner in the discharge of
his quasi-judicial function. In the instant case, the Commissioner, from
the very inception of the proceedings before him, put himself in communi-
cation with the Board and sought instructions from it as to how to decide
the company's revision application. The Commissioner exercised no
independent judgment of his own but merely carried out the directions of
the Board. Under section 25 of the Wealth Tax Act, "the Commissioner
may. . .call for the record of any proceeding under this Act in which an
order has been passed by any authority subordinate to him and may make
such inquiry. . .and. . .pass such order thereon. . .as the Commissioner
thinks fit." The Court held that the power conferred by section 25 on the
Commissioner is 'quasi-judicial' and not 'administrative'. The expression
"may make such inquiry and pass such order thereon" does not confer
any absolute discretion on him and in exercising his power, he must bring
to bear an unbiased mind, consider impartially the objections raised by
the aggrieved party, and decide the dispute according to procedure consis-
tent with the principles of natural justice and"cannot permit his judgment
to be influenced by matters not disclosed to the assessee nor by dictation of
another authority."
Reference may be made to cases discussed earlier in which the courts
have quashed administratve instruction of a general nature issued to quasi-
judicial bodies.90 These pronouncements go to show that the courts are
anxious to maintain and promote the concept of impartiality and objectivity
of quasi-judicial bodies. So long as India does not expand the tribunal
system as prevails in England, and relies on quasi-judicial bodies which
89. AIR 1970 S.C. 1520.

90. Ravi Roadways v. Asia, AIR 1970 S.C. 1241; supra, note 37.

have somewhat close affinUy with the administration, the judicial efforts to
omnimize these bodies from administrative pressures to the extent possible
are very welcome.
In a number of cases during the year, the courts have spelt out the
obligation of the quasi-judicial bodies to give reasons for their decisions.
Thus, in Testeels Ltd. v. N M. Desai*1 the Gujarat High Court has consi-
dered the question whether an obligation to give reasons could be imposed
on a conciliation officer acting under the proviso to section 33 (2) (b) of the
Industrai Disputes Act. It was contended that the Supreme Court cases
like the Harinagar Sugar Mills and Bhagat Raja applied only to tribunals
from whose decisions appeals could be heard by the Supreme Court under
article 136, and not to other 'quasi-judicial' bodies. The court, however,
has held that even quasi-judicial bodies were bound to give reasons for their
decisions. Apart from other arguments based on rule of law etc., the
court has placed the obligation to give reasons on the power of judicial
review under articles 226 and 32. Similarly, in Sarju Pel v. Chotanagour
R.T.A.,92 the Patna High Court has required quasi-judicial bodies to give
reasoned decisions. From the R.T.A.'s decision refusing to grant a permit,
the respondent took an appeal to the Appeal Board. The Board dismissed
an appeal without making a speaking order. An appeal was then filed with
the Minister of Transport under section 64A of the Motor Vehicles Act and
the Minister dismissed the appeal without giving reasons for his decision.
The court quashed the Minister's order and remanded the case back to the
government for a fresh hearing, saying that a litigant was entitled to know
the reasons for dismissal of his application so that he might, if so advised,
take necessary steps against the order concerned. The High Court would
be placed under a great disadvantage in the absence of reasons. It would
not be sufficient for the Minister merely to enumerate the claims and counter-
claims of both the parties and then to say that, after hearing the parties
a nd looking into the record, he did not find any substance in the petitioner's
representation. He ought tc have compared the claims of both the parties
and then stated as to why he thought that the claims of the party to which
permit had been granted were superior to those of the petitioner. The
Appeal Board's order was not at all a speaking order and, therefore, when
the petitioner made a representation against the order, it was incumbent
on the Minister, while rejecting the representation, to give sufficient reasons
to ' nable the court to judge whether the reasons for rejection were valid.
The court emphasized that the words "as he thinks fit" in section 64A of
the Motor Vehicles Act (as applicable in Bihar) cannot be equated with the
91. AIR 1970 Guj, 1.

92. AIR 1970 Pat. 288.
92. AIR 970Pat.s288,

words "to its own satisfaction." A Minister may have a wide discretion
to confirm or refuse a permit, but he is under a legal duty to give reasons.93
The law in the area has been further clarified by the Allahabad High
Court in H M. Ahmad v. State** A body whether quasi-judicial or a
tribunal should give its reasons for making an order. A party against
whom the order is made is entitled to know the reasons upon which it has
been made, for justice must not only be done but must also appear to be
done. The obligation to make a reasoned order was placed on two other
grounds: (1) the need to exclude or minimize arbitrariness on the part of the
authority making the order; and (2) the need to make the order amenable to
effective judicial scrutiny by the courts. Pathak, J., in his judgment also
called out a few propositions concerning giving of reasons when an appeal
or revision is taken from an inferior to the superior authority, viz., (1) the
superior authority must give reasons when it interferes with the order of
the inferior authority; (2) the superior authority must also give reasons
when it affirms the order of the inferior authority when the latter has not
given reasons; (3) When the inferior authority sets out its reasons, and
the superior authority agrees with the same, it does not need to specify
reasons in its order but may merely refer to the reasons given by the inferior
authority or give an outline of the process of reasoning by which it finds
itself in agreement with the inferior authority; (4) the superior authority
should give reasons when it finds reasons given by the inferior authority
not acceptable to it.
In Ar. C. Mukherji v. State ofM.P.,95 the Madhya Pradesh High Court
has held that a quasi-judicial body must give reasons when it rejects a repre-
sentation by the party affected by its order. Another interesting point
emphasized by the court is that when a person has a right of representation
against an order, to make the right effective, it was necessary for the govern-
ment to supply to the aggrieved party, on demand, the necessary details and
material on which he could base his representation. This again has been
implied from natural justice for the opportunity has to be 'reasonable' and
not merely an 'empty formality.' This is an unexceptionable position
to nke.
In D. R. Rly. Co. v. U lion of India?* the Patna High Court has taken
the position that it is a rule of prudence for a quasi-judicial authority to
give reasons even when its decision is not subject to appeal or revision and
that failure on its part to do so would not per se render its decision invalid
en the ground of failure of natural justice. Obviously, this position can
93. Other cases in which the same view has been taken are: State v. Bhagat Ram,
AIR 1970 Punj. 9; Ibrahim Kunju v. State, AIR 1970 Ker. 105.
94. AIR 1970 All. 46.
95. AIR 1970 M.P. 132.
96. Supra, note 57.

no longer be supported now in view of the many explicit statements made
by the various High Courts to the contrary.
A significant judicial pronouncement in the area is Mahabir Prasad
Santosh Kumar v. State of U.P.*7 A licence under the U.P. Sugar Dealers'
Licensing Order, 1962, to deal wholesale in sugar was cancelled by the
licensing authroty. The appellant applied for a copy of the order but it
was not supplied to him. An appeal to the State Government was also
rejected and the reasons for the same were not communicated to the appe-
llant. The Supreme Court quashed the order cancelling the licence. It
cricitised both the licensing authorty as well as the State Government for
failure to give reasons. The court emphasized that as the licence could
only be cancelled for "good and adequate" reasons, the licensing authority
should have given reasons for cancelling the license. Only then could the
right of appeal to the State Government be exercised effectively. If the
aggrieved party is not supplied the reasons, the right to appeal becomes
an empty formality. Also, the order made by the State Government, on
appeal, was subject to the High Court's supervisory power under article 227
and the Supreme Court's appellate power under article 136 and these courts
would be placed under a great disadvantage if the Government were to dis-
miss the appeal without giving any reasons. The court stated that recording
of reasons for its decision on a disputed claim by a quasi-judicial authority
ensures that it reaches the decision according to law and not according to
caprice, whim or fancy, or on grounds of policy or expediency. A party
to the dispute is ordinarily entitled to know the grounds on which the autho-
rity has rejected his claim. The necessity to record reasons is however
greater when the order is subject to appeal, for, without recorded reasons,
the appellate authority has no material on which it may determine whether
the facts were properly ascertained, the relevant law was correctly applied
and the decision was just. The court characterised the non-giving of rea-
sons by the quasi-judicial authorities as striking at the very root of the rule
of law.
Institutional Decision
In Labh Singh v. Union of India,98 the Delhi High Court has upheld the
validity of an 'institutional' decision against a challenge on the ground of
sub-delegation. Such a question arises mainly when the power to make
a quasi-judicial decision is conferred on the government or a department
or an organisation. In such a case, the main question is as to who should
exercise such a power. Should it be exercised by a minister, secretary or
97. A I R 1970 S.C. 1302.

98. A I R 1970 Del. 171.

100 Annual Suney of Indian Law 1970
the cabinet? The Displaced Persons {Compensation and Rehabilitation)

Act, 1953, contains a full-fledged adjudicative machinery culminating in the
Chief Settlement Commissioner. Finally, under section 33, the Central
Government is given power to call for the record of any proceeding under
the Act and pass any such orders as are not inconsistent with any provisions
of the Act or the Rules made thereunder. In the Labh Singh case, the peti-
tioner made an appeal to the Government after his petition was dismissed
by the Chief Settlement Commissioner. The Government dismissed his
application on the ground that it saw no reason to interfere with the order
of the Commissioner. The Government's order was challenged on the
ground that it was passed by the Deputy Secretary to the Government who
had no authority to do so under section 34 of the Act. Rejecting the conten-
tion, the court pointed out that under the Transaction of Business Rules,
Government's business can be done by various officers on its behalf. Un-
less a certain item of business is specified to be done by the Minister or by
the Secretary himself, the rest of the business can be done by any of the
officers of usual hierarchy in the Ministry. The Deputy Secretary being an
officers in this hierarchy could transact Government's business without the
Government issuing any separate authorisation to him for transacting any
particular business on its behalf. The Government's decision is an 'insti-
tutional' as dinstinct from a 'personal' decision and,therefore, any authorised
officer may deal with the business in question on behalf of the Government.
The court made two more points in this regard, viz. (1) Deputy Secretary's
decision cannot be questioned on the ground that the decision under appeal
was given by the Chief Settlement Commissioner who was higher in rank
than the Deputy Secretary, for every officer acting for the Government
under the Business Rules acts not for himself but for the Government.
The decision of the Deputy Secretary is that of the Government which is
superior to the Chief Settlement Commissioner; (2) There was no need for
any specific delegation of power on the Deputy Secretary under the statute.
The provision of delegation in the Act is in addition to the usual machinery
established by the Business Rules to act for the Government.
The decision is notable insofar as the Government acts increasingly
as the final appellate or revisory authority in a large number of adjudica-
tions under various laws, and certain issues connected with such institu-
tional decisions are sought to be clarified in the Labh Singh case.
The Applicability of the Limitation Act

In a few cases, questions have been raised regarding the applicability
of the Limitation Act, 1963, to the prosecution of claims through remedies
available under the administrative process. The view has been expressed
that the Limitation Act is a piece of procedural law and not substantive
law, and that rules of procedure are to be applied only to the matters to

which they are made applicable by the legislature either expressly or by
necessary implication and that such rules cannot be extended by analogy
or reference to proceedings to which they do not apply expressly or implied-
ly." Accordingly, it has been held in Sita Devi v. Anna Rao100 that article
182 of the Limitation Act would not apply to proceedings before the tribunal
under the Eastates Abolition Act as it is a special enactment and disputes
thereunder are adjudicated by tribunals and not courts. Similarly, the
Supreme Court has held in State Bank v. Bhide101 that applications under
section 33 (2) of the Industrial Disputes Act are not governed by article 137
of the Limitation Act.102
An interesting case on the applicability of the Limitation Act to quasi-
judicial proceeding is Sales Tax Commissioner v. Parson Tools and Plants.l0Z
Under section 10 of the U.P. Sales Tax Act, T948, a revision petition against
sales tax assessment can be filed in the High Court within eighteen months.
In the instant case, the respondents after prosecuting their remedies before
various Sales Tax authorities filed the revision petition after the prescribed
period of limitation. The question was whether out of the statutory period
of limitation, the period spent on proceedings before the Sales Tax autho-
rities could be excluded. The Allahabad High Court by a majority ans-
wered the question in the affirmative It was held that the matter can be
decided on the basis of the policy underlying section 14 (2) of the Limita-
tion Act which provides that in computing the period of limitation, the time
during which the applicant has been prosecuting with due diligence another
"civil proceeding" in a "court of first instance or in a court of appeal
against the same party for the same relief shall be excluded where such pro-
ceeding is prosecuted in good faith in a "Court" which from defect of juris-
diction, or other cause of a like nature, is unable to entertain it. The pro-
ceeding before the sales tax authorities can be regarded as ' civil proceeding"
which is a term used in contradistinction with a criminal proceeding. It
is a proceeding to vindicate civil rights. However, the sales tax authorities,
though quasi-judicial in nature, are 'Courts' in the strict sense of the term
in view of the Supreme Court's decision in NityanandVs case,104 and, there-
fore, while section 14(2) of the Limitation Act does not apply as such the
principle underlying this section can be applied.
99. A.S.K. Krishnappa v. Somaiah* AIR 1964 S.C. 227, 232.

100. AIR 1970 A.P. 43.
101. AIR 1970 S.C. 196.
102. Also see, Town Municipal Council v. Labour Court, AIR 1969 S.C. 1335.
103. AIR 1970 All. 429.
104. AIR 1970 S.C 209.

Claims Tribunal
Sections 110 to 110 F and 111 A have been added to the Motor Vehicles
Act in 1956 to provide for the creation of claims tribunals. Section 110
authorises the State Government to constitute one or more motor acci-
dents claims tribunals for the purpose of adjudicating upon the claims
for compensation in respect of accidents involving the death of, or bodily
injury to, persons arising out of the use of motor vehicles. Except to the
extent to which the provisions of the Civil Procedure Code have been made
applicable, the matter of procedure has been left to the discretion of the
claims tribunal subject to any rules framed by the State Government under
section 111-A. Qnce a tribunal is established, the jurisdiction of civil
courts to entertain a suit for damages for a motor accident is barred. During
the year under review, the courts have had occasion to clarify a few points
concerning the claims tribunals. In New India Assurance Co. v. Shanti
Misra,105 it has been held that a claims tribunal has jurisdiction to entertain
a claim arising out of an accident which occurred subsequent and not prior
to its constitution. In taking this view, the Allahabad High Court has
differred with a number of other High Courts.106 The Mysore High Court
has held in M Ayyappan v. Moktar Singhw that the compensation in
section 110-A is a comprehensive term and includes a claim for damages as
well. The court has emphasised that section 110-A only provides a speedier
remedy and does not create a new right. Under the pre-existing law, there
was a right to claim damages by a representative of the deceased in respect
of an accident when the death occurred in a civil court. Similarly, the
aggrieved person can make the same claim in the tribunal. Several High
Courts have answered in the negative the question whether a claim for
'compensation' under the Motor Vehicles Act bears any connection with
claims which can be made under the Fatal Accidants Act, 1855. These
courts have held that the claims tribunal need not follow the principles laid
down by the courts for determining compensation under that Act. They
have argued that sections 110 to 110F of the Motor Vehicles Act provide a
self contained code for adjudication of calims for compensation made on
behalf of victims of a motor accident, that these sections make no reference
whatsoever to the Fatal AccidentsAct and that section HOB empowers the
tribunal to award compensation "which appears to it to be just"—words
which are wider in scope than the words used in section 1A and 2 of the
105. AIR 1970 All. 408.

106. Unique Motor and General Insurance Co. v. Kartar Singh, AIR 1965 Punj. 102
C. K. Bus Service v. Sethna, AIR 1965 Mad. 149; Joshi Ratansi Gopalji v. Gujarat State Road
Tr. Corp., 1968 A.CJ. 338.
107. ATR 1970 Mys. 67.

Fatal Accidents Act.10* However, in Kamla Devi v. Kishanchand,im the
M.P. High Court has taken a different stand. Sections 110 to 110F which
constitute the claims tribunals say nothing about the basis and extent of,
or about the persons who can be subjected to, liability. As these sections
do not enter the field of the law of liability, it must be goverrned by the
ordinary law of torts and the Fatal Accidents Act, 1855, and, therefore, the
claims tribunal must award compensation according to the substantive law
of liability already in force. The principles of compensation have been
laid down by the Supreme Court in Gobald Motor Service v. Veluswami110
and Municipal Corporation of DHhi v. Subhagwati.in In the Kamla Devi
case, the tribunal had awarded Rs. 4,000 as damages. Keeping in view
the principles laid down in these two cases, the High Court raised the quan-
tum of compensation to Rs. 27,000.
Is the claims tribunal bound by the judgment of the criminal court
regarding the negligence of the driver of the motor vehicle which is involved
in an accident? A driver was prosecuted for rash and negligent driving but
was acquitted. A claim was then filed in the claims tribunal for injuries
caused by him. The tribunal accepted the claim and awarded damages.
It was sougnt to be argued that the tribunal had no jurisdiction to hold the
driver guilty of any rash or negligent act after his acquittal by the criminal
court. The Punjab High Court delcared in Municipal Committee, Jullundur
City v. Romesh Saggi,11* overruling its earlier decision in Sadhu Singh v.
Punjab Roadwaqs,113 and accepting the views of the Madras and Mysore
High Courts,114 that the claims tribunal was not bound by the decision
of the criminal court. The technical argument advanced for this position
was that the claims tribunal is a 'court' for purposes of section 3 of the
Evidence Act and, therefore, under section 43 of the same Act, the tribunal
is not bound by the findings of fact recorded by the criminal courts on the
merits of the controversy relating to the rashness or negligence of the driver
in a running down accident.
Lastly, in Delhi Municipality v. Kuldin,n5 the question considered
was whether a Otters patent appeal could be taken to the Division Bench
under clause 10 of the Court's letters Patent, from an appeal heard by a
single Judge from an award of the claims tribunal under 110 D of the Motor
108. Mohd. Habibullah v. K. Sitammal, 1966 A.C.N. 349; Veena Kumari Kohli v.
Punjab Roadways, 1967 All. C.J. 297; Ishwar Devi v. Union of India, AIR. 1969 Del. 183.
109. AIR 1970 M.P. 168
110. AIR 1962 S.C. 1.
111. AIR 1966 S.C. 1750.
112. AIR 1970 Punj. 137.
113. AIR 1968 Punj. 466.
114. Indian Mutual Generallnsurance Society w.K. Naidu, AIR 1967 Mad. 54; Seetha-
mma v. Benedict, AIR 1967 Mys. 11.
115. AIR 1970 Delhi 31.

104 Annual Survey of Indian Lau 1970
Vehicles Act. Answering in the affirmative, the Court has pointed out
that although the decision of the claims tribunal is termed as an 'award',
it does not mean that it is an 'arbitration5 tribunal. It is a special tribunal
functioning under the law, and while hearing an appeal from it, the High
Court doe<? not cease to be a court and become a tribunal and hence a
letters patent appeal would lie.
Workmen's Compensation
A question similar to that in the Kiddin case has also been raised in
Rajiyabi v. M. M. & Co.11* in relation to the Workmen's Compensation
Act. Under section 30 of the Act, an appeal can be taken to the High
Court from the decision of the Commissioner. Thus, the question nas
arisen whether from the decision of a single judge in appeal from the Com-
missioner, a further letters patent appeal can be taken to the Division Bench
under clause 15 of the Bombay High Court letters Patent. The argument
against a further appeal was that the Commissioner was not a court, that
nis decision was in the nature of an 'award'; and that the proceedings in
appeal before the High Court were a mere continuation of the proceedings
before the Commissioner and, therefore, the decision of the single judge
would not amount to a 'judgment'. The High Court has held that the pro-
ceedings before the Commissioner are not in the nature of an 'arbitration',
but closely approximate the proceedings in a civil court, that his adjudica-
tion is a judgment, and that an appeal can, therefore, lie under the letters
patent. To this extent, the court may be said to have changed its earlier
view expounded by it in Khairunnissa v. Municipal Corp. of Bombav111 in
which it had ruled, with reference to a statutory provision requiring a notice
to the municipal corporation before a suit is filed against it that the pro-
ceedings before a 'claims tribunal' under the Motor Vehicles Act could not
be regarded as a suit, and, therefore, this provision would not apply to ini-
tiation of proceedings before a 'claims' tribunal. Or, another way to look
at the matter may be that proceedings before a claims tribunal are regarded
neither as a *suit\ nor as 'arbitration' proceedings, but as 'adjudication'
by a quasi-judicial body. If this view were taken, Khairunnisa ruling can
btill apply to proceedings before a claims tribunal.
Contempt of Tribunals
The Supreme Court has held in Jugal Kishore v. Sitamarhi Central
Co-operative Bank11* that a High Court can deal with matters of contempt
116. AIR 1970 Bom. 278

117. ILR 1966 Bom. 460.
118. AIR 1967 S.C 1494.

in respect of a tribunal which falls under its judicial superintendence under
article 227. The view is taken on the basis that for section 3 of the Contempt
of Courts Act, what is necessary is not that the tribunal concerned must fall
within the hierarchy of courts under the Civil Procedure Code and the
Criminal Procedure Code, but that it must be subordinate to the High Court,
i.e., 'subordination' for the purpose of section 3 of the Contempt of Courts
Act means judicial 'subordination' and not 'subordination' within the
hierarchy of the courts. Accordingly, the Calcutta High Court has held
in Nitin v. VS.C. Honarjee119 that the Board of Revenue established in the
State by statute, though not a court under the hierarchy of courts under
the <C.P.€. or the Cr. P.C., yet is a tribunal under the Court's superinten-
dence under article 227, and, therefore, under section 3 of the Contempt
of Courts Act, the High Court can deal with matters of contempt with
respect to this tribunal.
III. ADMINISTRATIVE FUNCTION
Under section 29(1) of the Defence of India Act, 1962. power was
conferred on the Central Government or the State Government to requi-
sition any immovable property if, in its opinion, it is necessary or expedient
to do so for securing the defence of India etc. An order for requisitioning
some property made under this provision was challenged, inter-alia, on
the ground that the appellant had not been given any hearing betore the
order was made. The Court held in Chowgupe R. E. & C. Co., v. Govt.
of Goa™ that it was not necessary to observe principles of natural justice
under section 29 (1) D.I.A. as the order requisitioning the property was
an administrative order. The D.I.A. does not provide for a right of hearing
and for a good reason, viz., in an emergency, such an opportunity may defeat
the very purpose in view.
In several cases,121 the well established proposition has been reiterated
that in making a reference under section 10(1) of the Industrial Disputes
Act, the Government performs an administrative act. There is, therefore,
no bar in the way of the State Government, even if it has once refused to
refer a dispute, to reconsider the matter, change its mind and refer the matter
to a tribunal. It is open to the Government to make or not to make the
reference. Western India Watch Co. v. Its Workers,122 is an important
case in this series. The Government of Uttar Pradesh first refused but,
after some time, it referred the dispute. The question for the Supreme
119. AIR 1970 Cal. 477,

120. AIR 1970 Goa 80.
121. Workman, N.S.V. Tr. v. State, AIR 1970 P & H 412; Antiseptic Employees Unit
State, AIR 1970 Mad. 145,
122. AIR 1970 S.C. 1205.

Court's consideration was whether the Government could do so. The

Court has held that from the words of the provision,123 viz. section 10(1)
of the Industrial Disputs Act, there is no doubt that the question of mak-
ing or refusing to make a reference for adjudication has been left to the
Government's discretion. The discretion, however, is neither unfettered
nor arbitrary, for the provision clearly stipulates that there must exist an
industrial dispute as defined by the Act, or such a dispute must be appre-
hended when the government decides to refer it for adjudication. No
reference can thus be made unless at the time when the Government decides
to make it, an industrial dispute between the employer and his employees
either exists or is apprehended. The function of the government has been
held to be an administrative function,124 presumably, because the govern-
ment cannot go into the merits of the dispute, its function being only to
refer it for adjudication so that the employer-employee relations may not
remain disturbed and the dispute may be resolved through a judicial pro-
cess as speedily as possible. In the light of the nature of the government's
function, and the object for which the power is conferred on it, it would
be difficult to hold that once the government has refused to refer, it can-
not change its mind on a reconsideration of the matter either because new
facts have come to light or because it had misunderstood the existing facts,
or for any other relevant consideration, and decide to make the reference.
The function of the government being administrative, principle of res judi-
cata applicable to judicial acts cannot be applied when the goevernment
first refuses to refer and later changes its mind.
The judicial review of administrative function constitutes a very com-
plex segment of the present-day Administrative Law in India. For long,
the courts have been reluctant to review discretionary decisions on merits,
and this proposition holds good even now. But it is also a fact that, for
sometime past, there have been evidence of the emergence of a judicial
trend to somewhat increasingly control the exercise of discretionary admi-
nistrative power, and many a time this review reaches the fringes of review
on merits.125 A realisation appears to have dawned on the courts that
under the impact of the concept of a socialist state, vast discretionary powers
are being conferred on the administration, putting in jeopardy individual's
person or property or business. This feeling has led the courts to find
ways and means to see that the administrative power is properly exercised.
While not interfering with the mer its of the exercise of discretion directly,
the courts do seek to satisfy themselve that the power has been properly
exercised for the purposes for which it is conferred on the administration
123. Sec. A K of the U.P. Industrial Disputes Act, 1947, which is similar to S. 10(1)
of the Industrial Disputes Act.
124. State of Madras v. C.P. Parathy, AIR 1953 S.C 53, 57.
125. Jain & Jain, op. cit., 355 et seq.

and that discretion has not been misused or abused. This trend which
became apparent in 1969 in such cases as Barium Chemicals1** and Rohtas
Industries12*1 has been maintained through 1970 as well.
Under rule 45 of the Defence of India Rules, 1962, action can be taken
by way of prohibiting the sale or distribution of a book if, in the opinion
of the Central Government or the State Government, it contains any confi-
dential information or any prejudicial report. The Allahabad High Court
has held in A. J. Faridi v. Union of India12* that from the language of the
rule it is clear that the government is competent to take action thereunder
once it forms an opinion that the document contains the matters stated in
the rule. The action is thus to be taken on the subjective satisfaction of
the government and its opinion is not reviewable by any authority.
Under section 110(2) of the Customs Act, 1962, an order was made
whereby the period of six months within which show-cause notice was to
be served on the petitioner was extended by two months. The impugned
order of extension was passed ex-parte. The order was challenged on the
ground that under section 110(2), the customs officer acts quasi-judicially
and that the petitioner had not been given an opportunity to show cause
against the said extension. In Mohammed v. Asstt. Collector of Customs,129
the Calcutta High Court posed the question whether the phrase "on suffi-
cient cause being shown" in section 110(2) requires an objective analysis of
the grounds made out for extension of time or merely postulates a subjective
satisfaction of the Collector. After reviewing several cases130 in which
the phrases 'reasonable belief or 'reason to believe' in the Sea Customs
Act, 1878, had been considered, the Court came to the conclusion that the
phrase 'on sufficient cause being shown' used in section 110(2), sufficient
cause is to be shown to the Collector of Customs, and it is he who is to be
satisfied about the sufficiency of the cause shown by the department for an
extension of time. Whether the cause shown is sufficient or not is a matter
of subjective satisfaction of the collector and it is not for the Court to sit in
appeal over his decision. With regard to the nature and sufficiency of the
cause, it is the satisfaction of the collector of customs that provides the
ground and justification for an order extending the time to complete the in-
quiry. Extension of time cannot be challenged on the ground that notice
to show cause, or an opportunity of being heard, was not provided to the
affected party. For the exercise of the power under section 110(2), no
conditions precedent have been laid down and so the case of Barium Chemi-
126. Barium Chemicals v.'Company Law Board, AIR 1967 S.C. 295.
127. Rohtas Industries v. S. D. Agarwal, AIR 1969 S.C. 707.
128. AIR 1970 All. 383.
129. AIR 1970 Cal. 135.
130. Collector of Customs, Madras v. Chetty, AIR 1962 S.C. 316; Babulal Amthalal
v. Collector ofCustoms, AIR 1957 S.C. 877;Pakhrajv. Kohli, AIR 1962S.C. 1559; Nath-
mall Man v. Addl Collector of Customs, 70 C.W.N. 349.

cats v. Company Law Board1*1 is not applicable. Similarly, Bhagwan v.
Ram Cftand1*2 does not apply as the order under section 110(2) does not
affect the rights of the petitioner. The order merely enlarge the time with-
in which the Department is to complete its investigation.
Power to be Exercised in Accordance With Law

An exercise of administrative power to be valid must, however, be
exercised within the terms of law conferring the power. This principle
can be illustrated very forcefully with the help of the cases in which courts
have sought to control, to some extent, the exercise of administrative power
to order preventive detention by keeping it strictly within the confines of
law; In Pankaj Kumar v. State of West Bengal,1™ for example preventive
detention of the detenue was held bad because the State Government had
not considered his representation at any stage, but had simply forwarded
the same to the advisory board. In Abdul Karim v. State of W.B.,1U the
Supreme Court has held that under article 22 (5) there was, by necessary
implication, a constitutional right in the petitioner and a corresponding
constitutional obligation on the government to consider representation
irrespective of whether it was made before or after his case was referred
to the advisory board and if that is not done, the order of detention
against him cannot be sustained. To the same effect is Jaya Narayan v.
State of West Bengal™* The petitioner, detained on the 7 June 1969,
made a representation against his detention on the 23 June 1969. Without
considering the representation, the State Government placed his case be-
fore the advisory board which held that there was sufficient cause for the
petitioner's detention. Thereafter, the State Government rejected the
petitioner's representation and confirmed his detention. The Supreme
Court quashed the order of detention on the ground that the State Govern-
ment had not considered the petitioner's representation as soon as possible.
The court took the view that the representation ought to have been con-
sidered by the Government before sending the case to the Board. If the
Government were to accept the representation and release the detenue, the
matter would not be sent to the advisory board. In this case, the Govern-
ment was guilty of infraction of the constitutional provisions not only by
inordinate delay in considering the representation but also by putting off
its consideration till after the receipt of the opinion of the advisory board.
A person was detained on 3 January 1968, and he remained in detention
131. AIR 1967 S.C. 295; Rohtas Industries v. Agarwal, AIR 1969 S.C. 707; Also sec
Calcutta Discount Co. v. I.T.O., AIR 1961 S.C. 372.
132. AIR 1965 S.C. 1767.
133. AIR 1970 S.C. 97.
134. AIR 1969 S.C. 1028.
135. AIR 1970 S.C. 675.

till 25 August 1969 when the order was revoked and afresh order of deten-
tion was served on him. This order was challenged in Mohd. ShaH v. State
of Jammu & Kashmir™6 and was held illegal. The power to make fresh
order of detention was subject to fresh facts having arisen after the revoca-
tion or expiry of the former order so as to lead to the satisfaction of the
detaining authority that a fresh order was needed. In the Hadibandhu
case,137 the court had held that in view of the provisions of sections 11-A
and 13-(2) of the Preventive Detention Act, a fresh order of detention could
be made only if fresh grounds came into existence after the expiry or revo-
cation of the earlier order of detention. No such fresh order could be made
on grounds which existed prior to the revocation or expiry of the earlier
order of detention. Thus, the court held that, in the instant case, a valid
fresh order could have been made only if that order was based on fresh
facts coming into existence after the revocation of the earlier order. But
prima facie, no such grounds could possibly come into existence because
the detenue was in jail under detention, and, hence, the fresh order was
illegal.
In Commr. of Income-tax v. Jawaharlal Rastogi,13S search was held under
section 132 of the Income-tax Act. Documents seized in search were retain-
ed by the authorities for a period of 9 months without recording any
reasons for retaining the same beyond the statutory period of 180 days and
without obtaining approval of the Commissioner as required by section
132 (8). It was held by the Supreme Court that such retention is without
authority of law and the documents should be released. Referring to
the Seth Brothers case139, the Supreme Court observed that in the present
case the High Court had noticed two important circumstances: (1) that
whereas the notice dated September 14, 1964, required the assessee to furnish
statements relating to the four assessment years ending on March 31, 1960,
the Commissioner of Income-tax authorised search for a period of nine
assessment years e\en before the period fixed by the notice had expired;
and (2) that contrary to the plain terms of section 132 (8), the Income-tax
Officer retained with him the books of account for a period exceeding 180
davs. According to section 132(3) documents seized could not be retained
for more than 180 days without recording reasons for retaining the same.
In the present case, the documents had been retained for a period of 19
months. There was no order recording reasons for retaiuing the docu-
ments seized after the expiry of 180 days, nor was there any approval of
the Commissioner for retaining such documents. The retention of the docu-
136. AIR 1970 S.C. 688.

137. Hadibandhu Das v.Dist. \h^.,C it/tack, AIR 1969$ CA3.
138. AIR 1970 SC 1971.
139. Infra, note 144.

ments without complying with the requirements of the statute after the
expiry of the stipulated period was plainly contrary to law.
Mala fide and Irrelevant Considerations
In several cases, the courts have reiterated the principle that exercise of
administrative power mala <ide, or on extraneous or irrelevant ground, or
for a collateral purpose, would be invalid.140 For example, in S. N. Sharma
v. Bipin Kumar,ui the Supreme Court has pointed out that though the Code
of Criminal Procedure gives to the police unfettered power to investigate
all cases where it suspects that a cognisable crime has been committed,
an aggrieved person can seek appropriate remedy under article 226, and
the High Court can issue a writ of mandamus to restrain the police officer
from misusing his legal powers, if it is convinced that the power of investi-
gation is being exercised by the police officer mala fide.
The accused was arrested and charge sheeted before a magistrate for
his unlawful dealings and movement of rice without any licence therefor.
Later, the police recommended discharge of the accused on the ground
that he had, in the meantime, been detained under the Preventive Detention
Act, 1950. One of the questions raised in Kalqanmbl v. Dist. Magistrate1**
before the Calcutta High Court was whether the detention of the accused
could be quashed on the ground of mala *ides. The argument was that
after specific case had been started against the detenue, he was not allowed
to prove his innocence and was later detained on the self-same allegations.
The Court rejected the argument. The district magistrate was competent
under the Preventive Detention Act to take the allegations made against
the detenue in the charge sheet into his consideration for arriving at his
subjective, satisfaction, even if the case was not continued against the dete-
nue. Merely because the detenue was discharged from the criminal case,
the order of preventive detention could not be regarded as mala *ide. The
trial was for what the detenue is alleged to have done. The detention is with
a view to prevent him from acting in similar manner.
In P. Mukherjee v. State of W.B.,UZ detenue's detention was quashed
by the Supreme Court because some of the grounds served on him for his
detention were found to have no relevance or proximate connection with
the maintenance of public order. Their Lordships observed:
"even if any one of the grounds or reasons that led to the satisfaction is irrele-
vant, the order of detention would be invalid even if there were other relevant
grounds, because it can never be certain to what extent the bad reasons operated
140. D.S.Senanv. Union of India, AIR 1970 Punj. 75; State ofAssam v. The Amal-
gamatedTea Estates Co., AIR 1970 S.C. 2072,
141. AIR 1970 S.C. 786.
142. AIR 1970 Cal. 12.
143. AIR 1970 S.C. 852.

on the mind of the authority concerned or whether the detention order would
have been made at all if any one or two good reasons had been before them. "
Similarly, if one of the grounds served on the detenue is vague, the detention
becomes invalid.
Tn Income-tax Officer, Meerut v. Seth Bros.lu was raised the question
of the scope of power of search and seizure under section 132 of the Income-
tax Act. A search having been held in the respondents' premises and cer-
tain account books and documents having been seized by income-tax offi-
cers, the respondents moved the Allahabad High Court for writ of certiorari
to quash the letters authorising search of the premises and a writ of man-
damus directing the income tax officers to return all the seized account books
etc. The High Court held that the extent of seizure was far beyond the
limits of section 132 of the Income-tax Act, and that there was abuse of
power by the income-tax officers. The matter then came before the Supreme
Court in appeal. Analysing section 132, the Supreme Court has pointed
out that the Commissioner or the Director of Inspection may, after record-
ing reasons, order a search of premises, if he has reason to believe that one
or more of the conditions in section 132 (1) exist. The order is in the
form of an authorization in favour of a subordinate departmental officer
authorising him to enter and search any building or place specified in the
order, and to exercise the power and perform the functions mentioned
in section 132(1). The authorized officer may enter any building or place
and make a search where he has reason to believe that any books of account
or other documents which in his opinion will be useful for, or relevant to,
any proceeding under the Act, may be found. He may seize any books of
account or other documents and place marks of identification on any such
books of account or other documents, make or cause to be made extracts
or copies therefrom and may make an inventory of any articles or things
found in the course of any search which in his opinion will be useful for,
or relevant to any proceeding under the Act, and remove them to the income-
tax office or prohibit the person in possession from removing them. He
may also examine on oath any person in possession or control of any
books of account, documents or assets. The secton does not confer
any arbitrary authority upon the revenue officers. The Commissioner
or the Director of Inspection must have, in consequence of information,
reason to believe that the statutory conditions for the exercise of the power
to order search exist. He must record reasons for the belief and he must
issue an authorization in favour of a designated officer to search the pre-
mises and exercise the powers set out therein. The condition for entry into
and making search of any building or place is the reason to believe that any
144. AIR 1970 S.C. 292. See for further discussion on this case, M.P. Jain, Power
of Search and Seizure, XI J.I.L.I., 535.

bookc of account or other documents which will be useful for, or relevant

to, any proceeding under the Act may be found. Since by the exercise of
the power a serious invasion is made upon the rights, privacy and freedom
of the tax-payer, the power must be exercised strictly in accordance with
the law and only for the purposes for which the law authorizes it to be
exercised. If the action of the officer issuing the authorization, or of the
designated officer is challenged, the officer concerned must satisfy the court
about the regularity of his action. If the action is maliciously taken, or
power under the section is exercised for a collateral purpose, it is liable to
be struck down by the court. If the conditions for exercise of the power
are not satisfied, the proceeding is liable to be quashed. But, where power
is exercised bona fide, and in furtherance of the statutory duties of the tax
officers, any error of judgment on the part of the officers will not vitiate the
exercise of the power. Where the Commissioner entertains the requisite
belief and for reasons recorded by him authorises a designated officer to
enter and search premises for books of account and documents relevant to,
or useful for, any proceeding under the Act, the court in a petition by an
aggrieved person cannot be asked to substitute its own opinion whether an
order authorising search should have been issued. Again, any irregularity
in the course of entry, search and seizure committed by the officer acting in
pursuance of the authorisation will not be sufficient to vitiate the action taken,
provided the officer has in executing the authorisation acted bona fide. The
Act and the rules do not require tha: the warrant of authorisation should
specify the particulars of documents and books of account: a general autho-
risation to search for and seize documents and books of account relevant
to or useful for any proceeding complies with the requirements of the Act
and the rules. It is for the officer making the search to exercise his judg-
ment and seize or not to seize any documents or books of account. In
error committed by the officer in seizing documents which may ultimately
be found not to be useful for or relevant to the proceeding under the Act
will not by itself vitiate the search, nor will it entitle the aggrieved person
to an omnibus order releasing all documents seized. The aggrieved party
may undoubtedly move a competent court for an order releasing the docu-
ments seized. In such a proceeding the officer who has made the search
will be called upon to prove how the documents seized are likely to be use-
ful for or relevant to a proceeding under the Act. If he is unable to do
so, the court may order that those documents be released. But the cir-
cumstance that a large number of documents have been seized is not by
itself a ground for holding that all documents seized are irrelevant or that
the action of the officer is mala fide. The mere fact that it may ultimately
be found that some document seized was not directly relevant to any pro-
ceeding uuder the Act or that another officer with more information at his
disposal may have come to a different conclusion will not be a ground for

setting aside the order and the proceeding for search and seizure.
By the express terms of the Act and the rules, the Income-tax officei
may obtain the assistance of a police officer. By section 132(13), the pro-
visions of the Code of Crin dual Procedure, 1898, relating to searches, apply
so far as may be, to searches under section 132. Thereby it is only intend-
ed that the officer concerned shall issue the necessary warrant, keep pre-
sent respectable persons of the locality to witness the search and, generally,
carry out the search in the manner provided by the Code of Criminal Pro-
cedure. But section 132 (2) does not imply that the limitations prescribed by
section 165 of the Code of Criminal Procedure are also incorporated therein.
However, the Supreme Court has not explained a^ to why it regards section
165, Cr. P.C., inapplicable to searches and seizures under section 132 ot
trie Income-tax Act. The view adopted by the court in the Seth case appears
to be inconsistent with the \iew expressed by it in the Jha\er case-1 5 The
High Court, in the instant case, had inferred mala fides and abuse of authority
on the part of the Income-Tax Officer searching the premires froir the fact
that a large number of documents had been seized. In the opinion of the
Supreme Court, however, seizure of a large number of documents "has by
itself no direct bearing on the question whether the Income-tax Officer
acted mala fide" If the T.R.O. in making a search had reason to believe
that any books of accounts or other documents useful for, or relevant to,
any proceeding under the Act may be ioiuid, he may make a search and
seize those books of account and other documents. It would be impossible
merely from the circumstance that some of tnc documents may be shown to
have no clear or diiect relevance t o any proceeding under the Act that the
entire search and seizure was made not in bona fide discharge of official
duty but for a collateral purpose.
Under section 15 (1) of the Suppression oj Immoral Traffic in Women
and Girls Act, 1956, a special police officer, whenever he "has reasonable
grounds for believing that an ofence punishable under this Act has been
committed", may after recording the grounds, enter and search such pre-
mises without a search warrant. In Boi Radha v. State of Gujarat1*** the
necessary document was prepared by the officer concerned long after the
search and it hardly contained any ground on which he had formed the
belief with regard to the matters stated in the provision in question. It
was therefore argued that the search was illegal and without jurisdiction.
The Supreme Court, however, rejected the contention saying that recording
of reasons did not confer jurisdiction on the officer to make search though
it was a necessary condition for doing so. The jurisdiction or power to
145. Board of Revenue, Madias v. R. S. Bhavei, AIR 1968 S.C. 59. Also see Jain,
note 144 at 540.
145a AIR 1960 S C 1396

make a search was conferred by the statute and not derived from the re-
cording of reasons.
The proceedings initiated against the appellants under section 34 of
the Income-tax Act, 1922, were challenged in M.P. Industries Ltd. v I.T.Ou*.
The Supreme Court pointed out that two conditions must be fulfilled before
an l.T.O. could issue a notice under section 34 (1) (a), viz., the I.T.O. must
have reason to believe—(1) that income had been under-assessed, and (2)
that such underassessment was due to non-disclosure of material facts by
the assessee. Where the I.T.O. has prima facie reasonable grounds for
believing that there has been a non-disclosure of a primary material fact,
that by itself gives him the jurisdiction to issue a notice under section 34
and the adequacy or otherwise of the grounds of such belief is not open to
investigation by the court. It is for the assessee who wants to challenge
such jurisdiction to establish that the I.T.O. had no material for such belief.
These are conditions precedent and must be satisfied before the I.T.O.
acquires jurisdiction to issue a notice under the section. The sufficiency
of the grounds which induced the I.T.O. to act is not a justiciable issue
though the assessee can contend that the I.T.O. did not hold the belief that
there had been such non-disclosure. Thus, the existence of the belief can
be challenged by the assessee but not the sufficiency of the reasons for the
belief. The court has, however, warned that the expression "reason to
believe" in section 34 does not mean purely subjective satisfaction on the
part of the I.T.O. The belief must be held in good faith; it cannot be
merely a pretence. It is open to the court to examine whether the reasons for
the belief have a rational connection with, or a relevant bearing on, the for-
mation of the belief and are not extraneous or irrelevant to the purpose of
the section.147 In the instant case, the comapany in its writ petition had
repudiated the assertion of the I.T.O. that he had reason to believe that due
to the omission or failure on the part of the company to give material facts,
some income had escaped assessement. The I.T.O. filed no affidavit sett-
ing out the circumstances under which he formed the necessary belief.
Hence, the court concluded that it was not possible to hold that the I.T.O.
had any reason to form the belief in question or that the reasons before him
were relevant for the purpose. Accordingly, the I.T.O. had no jurisdic-
tion to issue the impugned notices and, therefore, the proceedings taken by
him were quashed.
Under section 326 of the Companies Act, 1956, in respect of certain
categories of companies, approval of the Central Government has to
obtained for appointment or re-appointment of managing agents. Section
326 (2) lays down certain grounds which the Government has to keep in
146. AIR 1970 S.C. 1011.
147. S. Narayanappy v. Commr. of income-tax, AIR 1967 S.C. 523; K.V. Narayana
v'.First Addl. I.T.O. AIR 1967 S.C. 587.

view while according its approval. The Government is enjoined not to

accord its approval unless it is satisfied that it is not against public interest
to allow the company to have a managing agent, that the managing agent
proposed is, in the Government's opinion, a fit and proper person to be
appointed or re-appoined as such, and that the conditions proposed foi
the managing agency agreement are fair and reasonable. Discussing the
nature and scope of the Government's power, the Supreme Court has held
in R. D. & Chemical Co. v. Company Law Board,U8 that the words "in its
opinion' * in section 326 (2) (b) do not mean that the "subjective satis-
faction" of the government "is determinative of the question wether the pro-
posed person is fit and proper to be appointed managing agent" and that
the existence of the satisfaction as well as the decision reached on that
satisfaction are immune from the court's scrutiny. The investment of
the power in the Government by section 326 (2) carries with it a duty to act
judicially, i.e., to hold an enquiry in a manner consistent with natural jus-
tice, to consider all relevant matters, to ignore irrelevant matters and to
reach a conclusion without bias and prejudice. The satisfaction contem-
plated by section 326 must be the result of an objective appraisal of the
relevant materials, for the order made under section 326 may result in seri-
ous detriment to the company or the proposed managing agent. While
the court is not concerned with the sufficiency of the grounds on which the
satisfaction is reached, the satisfaction of the Government has to be about
the existence of the conditions mentioned in section 326 (2). The enquiry
before the court, therefore, is whether the government was satisfied as to
the existence of the stipulated conditions. The existence of the satisfaction
cannot be challenged except probably on the ground that the authority
acted mala fide. But, if in reaching its satisfaction, the Central Government
misapprehends the nature of the conditions, or proceeds upon irrelevant
material, or ignores relevant materials, the jurisdiction of the courts to
examine the satisfaction is not excluded. The court refused to agree with
the proposition that because the exercise of the power depends upon satis-
faction, its exercise cannot be subjected to judicial review and the govern-
ment is the final arbiter of the conditions in which the power may be exer-
cised. However, it has also cautioned that in dealing with a petition against
an order made by the government under section 326, the court is not cons-
tituted a court of appeal over the Government's judgment. The function
of the court is merely to consider whether in arriving at its decision, the
Government has restricted itself to the enquiry contemplated to be made
and has faken into consideration all the relevant circumstances and that its
decision is not vitiated by irrelevant or extraneous matters.
In this case, the instance of the court to hold an inquiry according to
148. AIR 1970 S.C. 1789.

natural justice, when the function to be discharged is 'subjective', amounts

to breaking new ground in the area of Administrative Law.
Relevant Considerations
If in exercising its power, the concerned administrative authority does
not take into cosideration relevant considerations, or acts mechanically,
then its action is invalid. This proposition is illustrated by several cases.
In Thiruvengadam v. Muthu,U9 the Madras High Court has held that
the grant of a licence under section 5 (4) of the Rice Milling Industry
(Regulation) Act, 1958, is not a quasi-judicial but an administrative func-
tion and, therefore, the order granting the licence, does not have to set out
the reasons for making it. In case of an administrative order, the court
can look into the relevant records to satisfy itself that the authority exer-
cising the power in deciding the matter in question has reasonably applied
its mind to the appropriate statutory provisions and the facts. In another
licensing case, Bhorlchand Narendra Kumar v. State of M.P.1™ the Madhya
Pradesh High Court has analysed the limits of power of renewal of a trad-
ing licence. The appellant partnership firm was a licensee under the M.P.
Foodgrains Dealer's Licensing Order, 1965 issued under the Essential Com-
modities Act, 1955. Under the Order, no person could carry on business
as a dealer in foodgrains except in accordance with the terms of a licence
issued by the collector. The collector refused to renew the appellant's
licence for the year 1969 on the ground that licences could not be issued to
two partnership firms having common partners. The High Court quashed
the collector's order. The Foodgrains Order no where furnishes the
grounds upon which the licensing authority can refuse to renew a licence.
The Order must be interpreted in the light of article 19(1) (g) otherwise the
licensing clause therein would be bad as conferring unguided discretion to
the collector in the matter of grant or refusal of licences and their renewal.
The grant of a licence or its renewal under the Order should be the normal
rule as it is, undoubtedly, a restraint on the freedom of trade guaranteed
under article 19 '1) (g). The relevant clause in the Order, therefore, does
not confer an absolute discretion on the collector to grant or revoke a licence
just as he pleases. The p3wer has to be exercised in a reasonable manner,
keeping all relevant considerations in view. The court further empha-
sized that executive instructions issued by the State Government for the
guidance of collector in the matter of grant or refusal of licences under the
Order, cannot be so framed, or utilized in a manner, as to override the
provisions of the law. In the instant case, the licence had been revoked,
held the Court, on a ground which was wholly extraneous to the require-
ments of the Order in question.
149. AIR 1970 Mad. 34.

150. AIR 1970 M.P. 71.

A dmin istrative Law 117
Under section 47 (3) of the Motor Vehicles Act, the Regional Transport
Authority has power to increase or decrease the number of stage carriages
running on a route. The R.T.A., by a resolution, revoked the limit on issue
of permits on all routes in the Lucknow region. It was argued that the
Authority must give notice to the existing operators whenever it chooses
to revise strength on any route under section 47(3). The Allahabad High
Court rejected the contention in B. D. Tondon. v. State151 Nevertheless,
the resolution was quashed by the Court because the reasons for revoking
the limit "are obviously such as appear to have nothing to do with the
matters which are to be taken into consideration for determining strength
under section 47(3)" There was nothing on record to show as to what
material was before the R.T.O. to entitle it to say that some of the permit
holders after obtaining permits misused them. None of the considerations
mentioned in clauses (a) to (d) to section 43(1) which are relevant for deter-
mination of strength of buses under section 47 (3) had been taken into
account while passing the impugned resolution. Matters for the factual
existence of which there was presumably no evidence whatsoever before
the R.T.A., and which appear to have hardly anything to do with the deter-
mination of strength on a route, had been made a basis for revoking strength
on all routes in the Lucknow region irrespective of varying factors obtain-
ing on different routes. The R.T.A. acted in the matter mechanically and
not by applying its mind to relevant factors.
Section 6(3) of the Land Acquisition Act makes the declaration under
section 6 'conclusive' evidence that the lands being acquired were required
for a public purpose. Even then the Calcutta High Court has held in
Jadhar v. State1^2 that the validity of the entire acquisition proceedings
can be challenged on such grounds as that the proceedings are colourable,
or are in fraud of the statutory power,153 because the real object is to acquire
the lands for some 'private purpose'.154 Where a composite notification
acquiring land is made, and some of the purpose is found to be non-public
purpose, the entire notification will have to fail if it is not known what
particular parcel is required for the public purpose and what for non-public
purposes. The court has further held that under section 17(4) of the Act,
read with section 17 (1), Government's satisfaction as to the urgency for
acquisition is a matter for its subjective satisfaction but whether the land in
question is 'waste or arable' is an objective condition. Section 17(4) can-
not be applied to any land which is shown not to be arable or waste.155
151. AIR1970A11.215.
152. AIR 1970 Cal. 90.
153. Somawati, v. State of Punjab, AIR 1963 S. C. 251; State of W. B. v. Talukdar,
AIR 1965 S.C. 646.
154. Agarwala v. State of W.B., AIR 1965 S.C. 995.
155. Raja Anand v. State of U.P., AIR 1967 S.C. 1081; Abdul Jabbar v. State of
W.B.. 71 C.W.N. 129.

Applying the test laid down by the Bombay High Court in Navnit Lai v.
State of Bombay}™ that so far as lands in the urban area are concerned,
the expression 'waste lands* may be used with reference to pieces of land
which are desolate and not fit ordinarily for any use as building sites etc.
and that a building site which is quite suitable to be built upon cannot be
regarded as a 'wasteland simply because it is not put to any present use, the
Calcutta High Court has held in the instant case that the lands which are fit
for habitation after constructing buildings cannot be classified as waste.
Accordingly, the land situated within the residential area and sought to
be acquired for building residential accommodation is not waste as it is
possible to build houses on it. Consequently, with respect to such land, an
enquiry under section 5 A could not lawfully be dispensed with and, there-
fore, the declaration under section 6 must be struck down. Further,
according to Raja Anand v. State of C7.P. and Jaichand v. State of JF.2?.157
while the court cannot inquire into the sufficiency of the grounds which led
to the formation of the Government's opinion that the need for acquisition
was urgent, the court can interfere if it is shown that the Government never
applied its mind to the matteror that its action is mala fide. In the instant
case, the court held that the circumstances disclosed did not show that
the Government had applied its mind to the particular question, viz., whether
proceedings under section 5A should be dispensed with.
Under section 72 (1) (a) of the Madras Co-operative Societies Act, if,
in the opinion of the Registrar, the committee of any registered society is
not functioning properly or wilfully disobeys or wilfully fails to comply
with any direction issued by the Registrar, he may, after giving the com-
mittee an opportunity of making its representations, by order in writing,
dissolve the committee. The Supreme Court has held in Joint Registrar,
Co.-op. Societies v. Rajagopal1^ that although the opinion of the Registrar
may be purely subjective, there must be cogent material on which the Regis-
trar has to form his opinion that the society is not functioning properly in
order to supersede the committee. The requisite opinion has indisputably
to be formed honestly and after applying his mind by the Registrar to the
relevant materials before him. In a case of this nature, the High Court
does not act, under article 226 as an appellate court and reappraise and
re-examine the relevant facts and circumstances which led to the making
of the orders of supersession as if the matter before it had been brought by
way of appeal.
Under section 3 (2) (e) of the Indian Electricity Act, 1910, as amended
156. AIR 1961 Bom. 89.

157. AIR 1967 S.C. 1081. Also see M.P. Jain, Administrative Process in Land
Acquisition: Proceeedings of the Seminar on Urbanisation and the Law in India, 173-202
(Pub. I.L.I., 1968).
158. AIR 1970 SC 992

by the U.P. Act 30 of 1961 the electrical energy may be supplied by the
State Government or the State Electricity Board within the same area in
respect of which a licence has been granted if the State Government deems
such supply "necessary in public interest.'' The case was filed by the
Eastern U.P. Electric Power and Supply Co. (a licensee under the Act for
certain areas of U.P.) challenging the decision of the U.P. Government to
supply electricity directly to the Hind Lamps. Formerly, Hind Lamps
were receiving energy from the company but it made sev ral representation
to the State Government to the effect that the supply of energy by the com-
pany was inadequate and was often "interrupted and fluctuating." There-
upon, the Government, decided to supply electricity direct to the Hind
Lamps. The question was whether the decision of the Government under
section 3(2) (e) to supply electricity direct to a consumer was "justiciable'.
The Allahabad High Court had taken the view that the words "necessary
in public interest" in section 3(2) (e) indicated that the ''State Government
was the sole judge of the question whether direct supply of energy to the
Hind Lamps was or was not in the pubic interest. The test was of a sub-
jective, and not of an objective nature, and thus a court could not examine
whether it was necessary in the 'public interest'; and that the subjective
opinion of the Government was final in the matter, and was not justiciable
or subject to judicial scrutiny as to sufficiency of the grounds on which the
State Government had formed its opinion. However, in keeping with
the new trend, manifest for sometime now, to bring the area of adminis-
trative .discretion somewhat under judicial serveilance, the Supreme Court
has expressed its inability in {/.P. Electric Co. v. State of U.P.159 to agree
with the High Court's view. It has taken the view that under the section
in question, the Government is authorised to supply energy to consumers
within the area of the licensee in certain conditions: exercise of the power
is conditioned by the Government deeming it necessary in public interest
to make such supply. If challenged, the Government must show that
exercise of the power was necessary in public interest. In this connection
the court has observed
The Court is not thereby intended to sit in appeal over the satisfaction of the
Government. If there be prima facie evidence on which a reasonable body of
persons may hold that it is in the public interest to supply energy directly to the
consumers the requirement of the statute are fulfilled In our judgment,
the satisfaction of the Govrnment that the supply is necessary in the public
interest is in appropriate cases not excluded from judicial review.
However, even after this formulation of the proposition, the Supreme Court
has upheld the validity of the Government order in the instant case on two
grounds: (1) There was ample evidence on record to show that uninterrupt-
159. AIR 1970 S.C. 21.

120 Annual Suney of Indian Law 1970
ed supply of electricity was necessary in public interest to Hind Lamps

and the Company was unable to ensure it; (2) Adequate opportunity had
been afforded to the company to satisfy the Government that it was not in
the public interest to supply electrical energy directly to the Hind Lamps.
The proviso to section 23D(1) of the Foreign Exchange Regulaton Act,
1947, authorises the Director of Enforcement to send the case to the court
for trial when during the course of the enquiry by him he is of opinion that,
having regard to the circumstances of the case, the penalty which he is
empowered to impose would not be adequate. Commenting on the provi-
sion, the Supreme Court has stated in Raala Corpn. v. Director of Enforce-
ment1^ that it lays down the only manner in which the Director of Enforce-
ment can make a complaint and this provision lays down a safeguard to en-
sure that a person, who is being proceeded against for a contravention under
section 23 (1) of the Foreign Exchange Regulation Act, is not put in danger of
higher and severer punishment merely at the choice and sweet will of the
Director of Enforcement. If the Director sends the case to the court for trial
without himself initiating the inquiry, then he infringes section 23 D. There
should be material before the Director on which he could have formed the
opinion that the penalty which he was empowered to impose would not be
adequate. In the instant case, an enquiry had been instituted by the issue
of the show cause notice. However, even after the issue of the notice, no
material came before the Director which could be relevant for forming an
opinion by him that the penalty which he was empowered to impose for the
contravention would not be adequate. After the issue of the notice, the
party concerned had not shown any cause and there was thus no material
at all available to the Director in the course of enquiry under section 23(D)
(1) on the basis of which he could form the opinion that it was a fit case to
refer to the courts. The order of the Director referring the appellant's case
to the court for trial was thus quashed by the Supreme Court.
Sub-delegation
In K. Mohan v. District Controller, Stores, E. Railway,1*1 an interesting

question concerning sub-delegation of administrative power was raised.
Under rule 15 (4) of the Railway Service {Conduct) Rules, 1956, the Govern-
ment or any Authority empowered by it may require a railway servant to
submit a complete statement of his property. In the instant case, the
Controller of Stores asked for the statement from the petitioner. He
challenged it is on the ground that the Government had, under rule 154,
empowered the General Manager to call for the statement, and the latter
had delegated this power to the Controller and this was invalid as a delegate
160. AIR 1970 S.C. 494.

361 AIR 1970 Cal. m .

cannot further delegate his power according to the maxim, delegatus non
potest delegare. The court overruled the objection as the word 'Govern-
ment' had itself been defined in rule 2 (i) as meaning the 'General Manager'
in respect of non-gazetted staff. Therefore, there was nothing wrong
in the General Manager, as 'the Government', to authorise the Controller
to exercise his power.
The Madras Government promulgated the Madras Paddy and Rice
{Licensing and Regulation) Order, 1966, under section 3 (1) of the Essential
Commodities Act, 1955. In Palaniswami v. State,152 the High Court declar-
ed the order invalid because it was not proved that before the order had
been passed, the State Government, as required under section 3, had formed
the opinion that it was necessary or expedient to pass such an order. Neither
the preamble to the order, nor any material placed before the court showed
that such opinion had been formed by the State Government. An affi-
davit filed by the Secretary to Government, Food Department, Govern-
ment of Madras was, however, held to be insufficient or inadequate as it
did not give full information. The court referred to its earlier decision
in State of Madras v. Vanamali Mutt163 in which the Madras Paddy Order.
1966, was held invalid on a similar ground. The court has emphasized
that the State was acquiring vast power and entrusting its enforcement
to a whole hierarchy of officials and this makes it necessary that the Govern-
ment considers at the highest level to its subjective satisfaction whether
the situation demanded assumption of such power. In the Mutt case,
the court expressed the view that the matter should have gone to the minis-
terial level for consultation as the matter is important and affects the rights
and liberties of the people. Instead, the order appears to have been issued
as a routine matter.
But much of what the Madras High Court has said in the above case
appears to have been diluted by the Supreme Court decision in A. Sanjeevi
v. State of Madras.1*1 Under section 68 (c) of the Motor Vehicles Act, a
draft scheme of nationalisation was prepared and published. The validity
of the scheme was challenged under article 226 mainly on ground that the
opinion requisite under section 68 (c) of the Act was not formed by the
State Government but by the Secretary of Labour to the Government acting
in pursuance of Rule 23 (A) of the Madras Government Business Rules.
Section 68 (2) requires that the State Transport Undertaking must form the
opinion contemplated therein. The functions under the Mdtor Vehicles
Act relate to Transport Department and the State Transport undertaking
was being run by the Transport Ministry. Under Rule 23A, functions of
the State Transport Undertaking under section 68(c) shall be exercised
162. AIR 1970 Mad. 343.

163. (1969) 2 Mad. L.J. 324.
164. AIR 1970 S.C. 1102.

and discharged on behalf of the State Government by the Secretary to the
Government in the Department of Industries. The powers and functions
of the Government under section 68 (D) are to be exercised by the Secretary
to the Home Department. In Tamil Nadu, the State Transport Undertak-
ing is a dependent of the State Government. Tt was argued that the requi-
site opinion could have been formed either by the Council of Ministers
or the Minister to whom the business in question had been allocated under
the 'Rules' and not by the Secretary and that too by one who is not the head
of the department to which the functions under the Act had been assigned.
The Court rejected the argument that the Parliament has conferred
powers under section 68 (c) to a designated authority and that auothrity,
viz., the State Government, could not have delegated its statutory functions
to any one else. The term Government means the Governor aided and
advised by his ministers and, therefore, the required opinion is to be formed
by the Minister to which the department concerned had been allocated.
The Court pointed out that under the Indian Constitution, the Governor
is essentially a constitutional head, the administration of State is run by
the Council of Ministers. In the very nature of things, it is impossible for
the Council of Ministers to deal with each and every matter that comes
before the government. To obviate this difficulty, article 166 (3) authoris-
es the making of Business Rules. Barring the matters in which the Governor
has to act in his discretion, he can allocate business not only among the
Ministers but even designate a particular official to discharge any particular
function. He can, however, do so on the advice of the Council of Ministers.
Joint responsibility does not mean that each and every decision must
be taken by the cabinet. Nor can a Minister attend to every business in
the Department. Most of the decisions are taken by civil servants who
are likely to be experts and not subject to political pressure. Minister's
function is not to look after day to day admnistration but to lay down the
policies and programmes of his ministry. When a civil servant takes a deci-
sion, he does not do it as delegate of his Minister. He does it on behalf
of his Minister. It is always open to a Minister to call for any file in his
ministry and pass orders. He may also issue directions to the officers in
his Ministry regarding the disposal of government business either gene-
rally or as regards any specific case, subject to that over all power, the
officers designated by the "Rules' or the standing orders, can take decisions
on behalf of the Government,
These officers are the limbs of the government and not its delegates.165
When officials at various levels discharge the functions allotted to them by
the Business Rules, they are doing so as limbs of the government and not as
persons to whom the power of the government has been delegated, where
165. Also see, Emperor v. Sibnath Banerjee, 721 A. 241; Ishwarlal GirdhariLai Joshi
v. State of Gujarat, AIR 1968 S.C. 870.

functions entrusted to a Minister are performed by an official employed in
the Minister's department there is in law no delegation because constitu-
tionally the act or decision of the official is that of the Minister.
IV. JUDICIAL REVIEW
Laches
A petition filed under article 226 challenging an order of supersession

of the Tripura municipality made by the Administrator of Tripura was dis-
missed by the Judicial Commissioner in Saroj v. Union of India1** on the
ground of laches. Under article 120 of the Limitation Act, the period of limi-
tation for challenging such an order is 6 years but here the application was
filed beyond that period. Following the Bhailal Bhai case,167 the court
has pointed out in the instant case that:
the outside limit within which an aggrieved party can come to the High Court
by way of writ is the period prescribed by law for seeking the relief in question
by the normal remedies from the tribunals including courts,
The court may consider the delay unreasonable even when it is less than
the period of limitation prescribed for a civil action for the remedy, but
where the delay is more than this period, it will almost always be proper
for the court to hold that it is unreasonable.
In Durga Prasad v. Chief Controller,168 a petition filed under article 226
after live years of arising of the cause of action was dismissed because
of laches. The Supreme Court has pointed out that if a party moving the
High Court under article 226 for a writ is, in substance, claiming a relief
which under the law of limitation was barred at the time when the writ
petition was filed, the High Court would refuse to exercise its jurisdiction
and grant relief. Even in case of breach of a fundamental right, a petition-
er guilty of laches can be refused relief. No hard and fast rule can, however,
be laid down as to when the court should refuse to exercise its jurisdiction
' in favour of a party guilty of laches. That matter is left to the court's
discretion which must be exercised judiciously and reasonably.
A writ petition was moved in the Supreme Court under article 32 to
challenge the validity of the Metal Corporation of India (Acquisition of
Undertaking) Act, 1966 on 23 February, 1967 which was dismissed in limine
on 20 March, 1968. After delay of a year and a half, a writ petition was
moved in the Calcutta High Court under article 226. The court has held
166. AIR 1970 Trip. 37.

167. AIR 1964 S.C. 1006.
168. AIR 1970S.C. 769.

124 Annual Suney of Indian Law 191Q
in Metal Cot p. of India v. Union of India169 that the delay was not fatal to the
application. It has cautioned that the court should be very slow and cau-
tious in denying relief to the petitioner on the ground of laches when the
complaint is that of breach of funamental rights. In the instant case, the
delay was not so enormous as to disentitle the petitioner from relief under
article 226.
Res Judicata
More interesting than the argument based on laches was the accept-
ance by the High Court in the Metal Corporation case of the plea that rejec-
tion of the earlier petition by the Supreme Court under article 32 barred
the subsequent petition in the High Court under article 226. It has been
held in the Daryao Singh case,170 that rejection of a writ petition by a High
Court on the ground of laches or an alternative remedy does not constitute
res judicata for a subsequent petition moved in the Supreme Court under
article 32. It has also been held in the Kharak Singh case171 that the Supreme
Court would not dismiss a writ petition under article 32 on the ground of
existence of an alternative remedy. The situation presented in the Metal
Corp. case was, however, converse as here the petition had been dimissed
by the Supreme Court in limine, and then later a petition was moved in the
High Court. It was argued that the petition was barred by res judicata
as it raised the same question as had been raised in the earlier petition.
Though the Supreme Court's order was not a speaking order, yet it was
argued that the dismissal by it should be treated as being on merits on
the ground that no fundamental right of the petitioner was involved for
the Supreme Court does not reject such a petition on any other ground like
laches or alternative remedy. The Calcutta High Court found the argument
acceptable and held that the petition before it was hit by res judicata. The
court has stated that the only ground on which the earlier petition could
have been rejected by the Supreme Court was the non-existence of a fun-
damental right—the point raised in the latter petition as well.
There are three notable features of the case. Firstly, res judicata
has been applied for the first time to a petition in the High Court after dis-
missal of a petition by the Supreme Court. In all other cases so far, res
judciata has been invoked to bar a petition before the Supreme Court after
dismissal of a petition by the High Court. Secondly, res judicata has been
applied in the instant case even when the Supreme Court had not made a
speaking order. Thirdly, the High Court presumed that there; could be no
other ground of dismissal by the Supreme Court except the non-existence
169. AIR 1970 Cal. 15.

170. AIR 1961 S.C. 1457
171. AIR 1963 S C 1295.

of a fundamental right. This, however, is not correct as according to the

latest judicial trend, the Supreme Court may dismiss a writ petition under
article 32 even on the ground of laches.172
Alternative Remedy
Ordinarily, a High Court dismisses a writ petition (other than for

enforcement of a fundamental right) if an alternative remedy is available.
This principle has been applied by the courts in a few cases during the
year. Under section 4 (2) of the Orissa Khadi and Village Industries Board
Act, 1956, the State Government has power to dissolve the board in case
it is satisfied that it does not function properly. The State Government
dissolved the board and terminated the service of a clerk of the board.
He challenged his termination of service through a writ petition
under article 226. In Slsir Kumar v. State173, the Orissa High Court dismis-
sed the petition pointing out that the petitioner was entitled to the benefits
arising out of closure of an undertaking under section 25 FFF of the Indus-
trial Disputes Act. To work out these benefits, he must resort to the
machinery provided by the Act for the purpose and it would be difficult to
go into this question on a writ petition. S.S. Das v. Land Acquisition
Collector,1741 is another case from the same High Court on the same point.
By an amendment of the Land Acquisition Act, 1894, the State of Orissa
has provided that on refusal by the collector to make a reference to the
court under section 18 of the Act, a revision application can be filed in the
High Court under section 115, C.P.C. The High Court has held this to be
an efficacious statutory remedy and hence no writ petition could be main-
tained to challenge collector's refusal to refer the matter to the court.
In J. K. Manufacturers v. Sales Tax Officer,175 the assessee challenged
the validity of rule 12A of the U.P. Sales Tax Rules framed under the U.P.
Sales Tax Act, 1948. The High Court rejected that argument that the peti-
tion was not maintainable as an alternative remedy was available under the
Act for the purpose, viz., challenging the rule before the tribunal functioning
under the Act. Referring to the several Supreme Court cases,176 on the
point, the High Court has pointed out that a statutory tribunal cannot go
into the vires of the Act and a writ petition could not be thrown out chal-
lenging the validity of the Act. Although there is no Supreme Court case
172. Tilokchand Motichand v. H. B. Munshi, AIR 1960 S C. 898, Jain& Jam, op.
tit., 319.
173. AIR 1970 Ori. 113
174. AIR 1970 Ori. 197.
175. AIR 1970 All. 362.
176. K.S. Venkataraman & Co. v. State of Madias, AIR 1966 S.C. 18S9; Ore's
Coffee Co. v. State of Mysore, 19 STC 66 (S.C) (1967); Dhulabhai v. State of M.P., AIR
1969 S.C. 28.

specifically holding that a statutory tribunal cannot question the validity
of a rule made under the Act, yet the wide terms of the Supreme Court's
pronouncements would indicate that that would be the position and, there-
fore, in the instant case no alternative legal remedy would be available.
The Supreme Court has further discussed the point in Champalal v.
Income Tax Commissioner177 An income-tax assessee received notice from
the Commissioner of Income-tax under section 33-B of the Income-Tax
Act, 1922, to show cause as to why the order of assessment be not revised.
On the date fixed for hearing, the assessee was not present. The Com-
missioner set aside the order and directed the income-tax officer to make
fresh assessments according to law after making proper enquiries and inves-
tigation. Against this order, an appeal lay to the Income-tax Appellate
Tribunal within 60 days [section 33-B(3)]. Instead of filing an appeal
the assessee moved the Calcutta High Court under article 226 for a writ
quashing the Commissioner's order on the ground of violation of natural
justice. The High Court dismissed the petition. On appeal, the Supreme
Court also held that there was no violation of natural justice. But the
court also emphasized that the Income-tax Act provides a complete and
self-contained machinery for obtaining relief against improper action taken
by the departmental authorities, and normally the party feeling aggrieved by
such action cannot be permitted to approach the High Court directly against
the action without taking recourse to that machinery. The assessee had an
adequate remedy under the Income-tax Act which he should have availed of.
A writ of certiorari being discretionary, is not issued merely because it is
lawful to do so. Where the party feeling aggrieved by an order of an Autho-
rity under the Income tax Act has an adequate alternative remedy which he
may resort to against the improper action of the authority, and he does
not avail himself of that remedy, the High Court will require a strong case
to be made out for entertaining a petition for a writ, for challenging an order
of a taxing authority which is ex-facie with jurisdiction. A petition for cer-
tiorari may however lie where hthe order is on the fact of it erroneous or
raises question of jurisdiction or infringement of fundamental rights of
the petitioner.
Quo Warranto
A petition seeking the writ of quo warranto against the Chief Minister
and Council of West Bengal, was dismissed by a single Judge of the High
Court. The petitioner then came before the division bench in appeal.
In the meantime, the Council of Ministers had ceased to hold office in con-
sequence of the President's proclamation under art. 356. Dismissing the
177. AIR 1960 S.C. 645.

appeal in Puranlal v. P. C. Ghosh178 the Calcutta High Court pointed out
that relief by quo warranto cannot be granted after the usurper ceased to
hold the office in question except when he resigned after the issue of the
rule nisi. The obvious reason for this is that a person cannot avoid a deci-
sion in a pending proceeding by an unilateral act. The writ of quo warranto
cannot be used to quash acts already done by the usurper; its purpose is
to prevent a continued exercise of authority unlawfully asserted, and not
to correct what has already been done under it to vindicate private rights.
The court has further pointed out that claim for refund of salaries from a
usurper to a public office is not to be determined in a proceeding for quo
warranto. A separate action may be brought for the same after the issue of
quo warranto by a person having a right to maintain such an action.
In Mohambaram v. Jayavelu,-™ the office of the public prosecutor has
been held to be a substantive public office as it involves duties of public
nature and of vital interest to the public, as for example, under section
417, 422, 493, 494 Cr. P.C* Accordingly, if an appointment is made to
the office in contravention of statutory rules applicable to the post, the same
can be quashed by issuing a writ of quo warranto. But an appointment
made against the G.O. cannot be questioned according to the Kerala High
Court's pronouncement in Alex Beets v. M.A. Urmese180 The reason is
that the G.O. is only an administrative instruction having been issued under
the government's executive power and does not have the force of law.181
In Satish Chander Sharma v. The University of Rajasthan,182 the High Court
has considered the somewhat important question of legal standing to ask
for a writ of quo warranto. Elections were held to the University Syndi-
cate. The question was whether registered graduate, who was neither a
voter for the election nor a candidate, could challenge the election through
a writ application. It was argued on the basis of G. Venkateswara Rao
v. Government of Andhra Pradesh183 that a person can file a writ petition only
when his legal right has been violated. Rejecting the contention, the High
Court has stated in the Rao case, that the Supreme Court has very clearly
observed that ordinarily the right that can be enforced in a writ proeeding
is the 'personal or individual' right of the petitioner himself but this rule
does not apply to writs of habeas corpus or quo warranto. It is not neces-
sary in the case of quo warranto that the petitioner should have suffered a
personal injury himself or should seek to redress a personal grievance.184
178. AIR 1970 Cal. 118.

179. AIR 1970 Mad. 63.
180. AIR 1970 Ker. 312.
181. Supra,
182. AIR 1970 Raj. 184.
183. AIR 1966 S.C. 828.
184. Also see, Bindra Ban v. Sham Sunder, AIR 1959 Punj., 83; Dr. S. C. Barat v.
H. V.Pataskar, AIR 1962 M.P. 180; Aex v. Speyer,(1916)1. K.B. 595.

Analysing the University Act, the court has held that a registered graduate
is interested in the university functioning according to law and, as such, he
can maintain a petition for a writ of quo warranto. The court has also held
that membership of the University syndicate is a public office and falls
within the ambit of quo warranto.18^
Certiorari
In Parry & Co. v. Judge, 2nd I.T. Cal,m the Supreme Court has reiterat-
ed the well-established principles underlying judicial review of quasi-judicial
decisions under article 226. Under article 226, a High Court can inter-
fere withNa tribunal's decision when it has acted without or in excess of its
jurisdiction, or acts in flagrant disregard of the rules of procedure, or vio-
lates the principles of natural justice where no particular procedure is pres-
cribed. A mere wrong decision cannot be corrected by a writ of certiorari
as that would be using it as the clock of an appeal in disguise, but a manifest
error apparent on the face of the proceedings based on a clear ignorance
pr disregard of the provisions of law, or absence of, or excess of, jurisdic-
tion, can be so corrected.187 Where the tribunal having jurisdiction to de-
cide a question comes to a finding of fact, such a finding is not open to
question under article 226 unless it could be shown to be wholly unwarrant-
ed by the evidence.188 Where the tribunal has disabled itself from reaching
a fair decision by some considerations extraneous to the evidence and the
merits of the case, or where its conclusion on the very face of it is so wholly
arbitrary and capricious that no reasonable person can have arrived at that
conclusion, interference under article 226 would be justified. The tribunal
should confine itself to the pleadings and the issues arising therefrom, and
it is not open to it to fly off at a tangent disregarding the pleadings and
reach any conclusion that it thought as just and proper.189
In the instant case, the Supreme Court held that some of the findings
arrived at by the Industrial Tribunal were beyond its competence. The
rest were either speculative or contrary to the evidence on record and were
consequently liable to be set aside in a writ petition for certiorari
Chetkar v. Viswanath^0 furnishes an illustration of wrongful assump
tion of jurisdiction. The Chancellor of the University of Patna annulled
185. Also, In re G.A. Natesan, AIR 1918 Mad. 763. Shashi Bhushan Ray v. Pramath
Math Bandopadyyay, 70 CWN 892 (1966) was held not applicable lo the fact situation of
the present case.
186. AIR 1970 S.C. 1334.
187. Basappa v. Nagappa, AIR 1954 S.C 440.
188. Dharangadhara Chemical Works Ltd. v. State of Saurashtui, AIR 1957 S.C.
264.
189. / . K. Iron & Steel & Co. v. Iron & Steel Mazdoor Union, AIR 1956 S.Y. 23J.
190. AIR 1970 S.C. 1832,

a resolution of the Syndicate. The High Court set aside the Chancellor's
order by issuing certiorari, and the decision was affirmed on appeal by the
Supreme Court on the ground that it was without jurisdiction as it was
passed on a wrong assumption of jurisdiction made on a misinterpretation
of the Act and the University statutes. The Chancellor had appropriated
to himself a jurisdiction which he did not have. Similarly, in Hind Trading
Co. v. Union of India,191 the Supreme Court has quashed an order of the
Collector of Customs (which had been confirmed on appeal by the Board
of Revenue and the Government of India) by granting certiorari. It held
that when "a tribunal comes to a conclusion which could not reasonably
be entertained by them if they properly understood the relevant enactment
then they fall into error in point of law."192 Shauqin Singh v. Desa Singh193
is another Supreme Court case where a decision of a quasi-judicial body
has been set aside on the grounds of lack of jurisdiction and 'no evidence'.
Section 24 (2) of the Displaced Persons (Compensation and Rehabilitation)
Act,1954, confers authority on the Chief Settlement Commissioner to revise
the orders of subordinate authorities if he is "satisfied" that the displaced
person has obtained any order by means of fraud, false representation or
concealment of any material fact. The power of the Commissioner has
been held to be 'judicial'. The use of the expression "is satisfied" does not
make him the final arbiter of the facts on which the conclusion is reached.
His jurisdiction arises only if an allotment is obtained by means of fraud etc.
The relevant satisfaction is a jurisdictional fact on the existence of which
alone his power may be exercised. The High Court would, therefore, be
entitled to consider in a writ petition whether there was due 'satisfaction'
by the Chief Settlement Commissioner on materials placed before him and
that the order was not made arbitrarily, capriciously or perversely. Fur-
ther, the Commissioner in cancelling the lease has acted without consider-
ing the relevant evidence. In his order he has made no reference to any
evidence which may support his conclusion. As his conclusion that the
respondent was guilty of fraud was based on no evidence, it is liable to be
set aside.
In Commissioner of Gift Tax v. Madan1^ has been reitereted the pro-
position already well established195 that a statutory body is^not concerned
with the validity of the statute itself and the question of ultra vires is foreign
to their jurisdiction.
191. AIR 1970 S.C. 1858.

192. Questions of error of law have been raised in the following cases during the
year: G. Raghavareddiv. Govt. A.P., AIR 1970 A.P. 217; A.A. Singh v. union of India,
AIR 1970 Man. 16; Harnam Singh v. State, AIR 1970 Del. 66.
193. AIR 1970 SC 672.
194. AIR 1970 Raj. 219
195. C.T.S. Chettiar v. State of Madras (1968) 671TR 102 (SC); K. S. Venkataraman
v. State of Madras, AIR. ..S.C. 1089; C.LT. v. Straw Products, AIR 1966 S.C. 1113.

Habeas Corpus
The petitioner was convicted by a General Court Martial on charges

of criminal misappropriation of monies belonging to the Air Force and was
sentenced to a term of imprisonment. He moved a petition for writ of
habeas corpus under article 226 through his wife on the ground that his
detention and conviction was illegal. The Delhi High Court in S. Sunda-
rajan v. Union of India196 dismissed the petition on the ground that a writ of
habeas corpus is not available to question the correctness of a decision by
a legally constituted court of competent jurisdiction. A writ of habeas
corpus is not a writ of error nor does a High Court in habeas corpus proceed-
ings strictly speaking, sit as a court of appeal or of general superintendence
to review the order of conviction. In a habeas corpus proceeding, the juris-
diction of a court martial could be challenged; the court could always go
into the question whether the person in custody was subject to military law
or whether the court martial itself has been properly constituted and con-
vened. If there was such an irregularity or illegality as would go to the
jurisdicton of the court-martial, then the question can be taken up in a
habeas corpus petition. In the instant case, the court found that there was
no procedural irregularity so as to vitiate the trial and ultimate conviction
of the prisoner concerned. In Som Dutta v. Union of India197 the court
pointed out, the petition was for a writ of certiorari and there the Supreme
Court went into the question of jurisdiction and dismissed the petition as
there was neither any error of jurisdiction nor any error of law apparent
on the face of the record. The High Court refused to treat that case as an
authority for the proposition that while dealing with a petition for a writ of
habeas corpus, the court should call for the record and proceedings of every
case in which a duly constituted and convened court-martial has recorded
a finding of guilt and passed a sentence of imprisonment and examine the
legality of conviction and sentence.
An interesting question referred to by the court in the Sundarajan
case, but not finally decided, was whether the wife of the person aggrieved
had any locus standi to a petition for certiorari. The question arose out
of the plea that the petition may be treated as being one for certiorari. The
court pointed out that a petition for habeas corpus could be brought on behalf
of a person illegally imprisoned by some one other than the prisoner, who
might have some interest in him. In Cobbet v. Hudson19* a wife was held
entitled to apply for the writ on behalf of his husband and In re Thompson,199
a father was held entitled to apply on behalf of his son. But the position
196. AIR 1970Del. 29.

197. AIR 1969 S.C. 414.
198. (1850) 15 Q.B. 988.
199. (1860) 30 L.J. M.C. 19.

regarding maintainability of a petition for certiorari by a person other than the
one directly affected or aggrieved was more complex and the court left the
question open.200
Mandamus : K. L. Modi v. Union of India,201 is a case on mandamus.
Under section 9(2) of the Citizenship Act read with Rule 30 of the Citizen-
ship Rules, it is for the Central Government to decide the question as to
whether, when and how the petitioner acquired the citizenship of a foreign
country. It is not for a High Court to adjudicate on this question in writ
proceedings, but it can direct the government to consider and adjudicate
upon the question of petitioner's citizenship under section 9.
Article 226
The Supreme Court has held in Engineering Mazdoor Sabha v. Hind

Cycles202 that an arbitarator appointed under section 10A of the Industrial
Disputes Act is not a tribunal for purposes of article 136. In N. C. Maz-
door Sangh v. Jeejeebhoy,20- the Madhya Pradesh High Court has con-
sidered the question whether a writ could be issued to such an arbitrator
under article 226. The court has held that proceedings before him are
quasi-judicial in nature; he must function within the limits of his powers
as defined by the Act and the Rules; he is not a private arbitrator in the
ordinary sense of the term as is made clear by section 10A itself. The
Arbitration Act is not applicable to arbitration under section 10A and
there is, therefore, no other appropriate and efficacious remedy against an
award under section 10A. The court has held that such an arbitrator is
'person' within the meaning of article 226 and is thus amenable to the
High Court's writ jurisdiction.204
The Supreme Court has in Gunwant Kaur v. Bhatinda Municipality205
thrown light on some aspects of the High Courts' writ jurisdiction under
article 226. A High Court is not deprived of its jurisdiction to entertain
a petition under article 226 merely because in considering the petitioner's
right to relief, questions of fact may fall to be determined. A High Court
has jurisdiction to try issues both of fact and law in a petition under article
226. Fxercise of jurisdiction under article 226 is discretionary, but the dis-
cretion must be exercised on sound judicial principles. If, however, a
200. Reference has been made to: Calcutta Gas Co. v. State of West Bengal, AIR
1962 S.C. 1044; Venkataswamy Setty v. University of Mysore, AIR 1964 Mys. 159; de
Smith, Judicial Review of Administrative Action, 1968 ed.
201. AIR 1970 Del. 76.
202. AIR 1963 S.C. 874.
203. A*R 1970 M.P. 63.
204. Also see, Rohtas Industries Staff Union v. State of Bihar AIR 1963 Pat. 170;
K. P. Singh v. S. K. Gokhale, 1969 Lab L.C. 725.
205. AIR 1970 S.C. 805.

petition under article 226 raises questions of fact of a complex nature
requiring oral evidence for their determination, and on that account the
High Court is of the view that the dispute may not be tried appropriately
in a writ petition, then the court may decline to try a petition. Further,
rejection of such a petition in limine may be justified if the High Court is of
the view that the petition is frivolous, or because of the nature of the claim
made, dispute sought to be agitated, or that the petition against the party
against whom relief is claimed is not maintainable, or that the dispute
raised thereby is such that it would be inappropriate to try it in the writ
jurisdiction, or for analogous reasons.
Article 227
The power of superintendence conferred on the High Court by article

227 involves a duty to keep all courts and tribunals within the bounds of
their authority and to see that they do what the duty requires, and further
that they do it in a legal manner. Therefore, the High Court can interfere
if there is an error apparent on the face of the record. The power under
article 227 may, in proper cases, be exercised suo moto by the High Court.206
Under section 115, C.P.C> the High Court has jurisdiction to revise,
under the circumstances mentioned therein, of orders passed by courts
subordinate to it. In District Transport Manager v. Satrughan Guru,207
the Orissa High Court has taken the view that the 'authority' under the Pay-
ment of Wages Act is not a court subordinate to the High Court for pur-
poses of section 115, "CP.C On this question, there has been a dfference
of opinion among the High Courts. Some regard the 'authority' under the
Act as a court subordinate to the High Court for purposes of section 115
on the ground that it decides the matter judicially after hearing the parties
and on materials produced before it according to certain definite and speci-
fied rules of procedure laid down in the Wages Act.208 A large number
of High Courts, on the other hand, have taken a contrary view.309 The
•authority' will, nevertheless, fall under the High Court's supervision under
article 227. A claim for over-time wages falls with the jurisdiction of the
'authority'. In deciding upon such a claim, the *authority' does not act
without jursidiction and so the High Court cannot interfere under article
227
206. Suresh Chandra v. M. B. Dutta, AIR 1970 Tri. 51.

207. AIR 1970 Ori. 221.
208. Works Manager, Carriage and Wagon Shops, Mahalpur v. K. G. Hashmat, AIR
1964 Lah. 316; A. Hasan v. Mohd. Shamsuddin, AIR 1951 Pat. 140.
209. H.CD.Mathurs.E.LRly., AIR 1960 All. 80; Sitaram Ramcharans.M. N.
Nagrashna, AIR 1954 Nag. 537; Div. Supdt., Delhi Divl. Northern Rly. v. Satyendra Nath,
AIR 1964 Punj. 242. Also, Rameshwarlal Jogendra Das, AIR 1970 Ori. 76.

In H. Moitra v. Calcutta Improvement Tribunal210 the Calcutta High
Court has considered the question whether it can exercise a supervisory
jurisdiction under article 227 over dismissal of a servant by the President,
Calcutta Improvement Tribunal. Answering in the negative, the court
has held that the President is an ad*ninistrative head and is empowered
to take the decision. Although he is bound to follow principles of natural
justice while holding an inquiry prior to dismissing an employee, yet, as
such, he does not act as a tribunal and does not become subject to the
court's jurisdiction under article 227.211 He might be subject to the writ
jurisdiction under article 226 which is more extensive than the power of
superintendence under article 227 as it can be exercised only over courts
and tribunals under certain circumstances.
Article 136
No new principle has been evolved in this area during the year under
review. In State Bank, Hyderabad v. V. A. Bhide,212 in an appeal from a
labour court, the Supreme Court has stated that a pure question of law,
to decide which no fresh facts need to be investigated, such as a question
of limitation, can be raised before it in appeal even when it had not been
raised earlier at any stage. Further, in exercising its discretion under
article 136, the Supreme Court does not normally enter upon pleas on
questions of facts and is also generally reluctant to interfere with findings of
fact recorded in a decision under appeal. The court can, however, go into
question of law inferred from the facts found and can consider whether the
tribunal has drawn the correct legal inference from the facts found by it.
In Gaziabad Engineering Co. v. Its workmen 2m the industrial tribunal
had on appreciation of evidence come to the conclusion that the financial
position of the company was sound. Even assuming that the tribunal is
governed by strict rules prescribed by the Evidence Act, the Supreme Court
would not, sitting in appeal under article 136, be justified in interfering with
the tribunal's finding even if it be open to the criticism that a part of the
evidence relied upon is not in law relevant.
Finality Clause
Section 102 of the Bengal Cess Act makes the decision of the com-
missioner 'final' in all cases of valuation under the Act. In State of West
210. AIR 1970 Cal. 154.

211. See, Indo-China S.N. Co. v. Jasjit, AIR 1964 S.C. 1140.
212. AIR 1970 S.C. 196.
213. AIR 1970 S.C. 390.

Bengal v. The Indian Iron & Steel Co. Ltd.,2U the effect of such a finality
clause has been considered by the Supreme Court. The company challenged
certain levies on it under the Act as invalid in a suit in a civil court. The
question was whether the suit was maintainable. The Supreme Court has
pointed out that the liability to pay tax is one thing and the mode of com-
putation of the net profits is another. The mode of computation is a
matter for the assessing authorities except where it is done in violation of
any provision of law. If there was any mistake in the computation, that
mistake should have been got rectified by following the procedure prescribed
in the Act. Having not done so, the company cannot be permitted to
raise that question in the present suit, otherwise the finality contemplated
by section 102 of the Act would become illusory. In Secretary of State
v. Mask & Co.,215 it has been held that the exclusion of jurisdiction of a
civil court is not to be readily inferred but that such exclusion must either
be explicitly expressed or clearly implied. It is also well settled that e\en
if the jurisdiction is so excluded, the civil courts have jurisdiction to examine
into cases where the provisions of the Act have not been complied with,
or the statutory tribunal has not acted in conformity with the fundamental
principles of judicial procedure. In this case, what is being contended
is not that any provision in the Act had been ignored by the assessing
authority but that a particular provision therein has not been properly
interpreted by that authority. If the provisions of the Act form a precise,
self-contained code, the plaintiff cannot be permitted to challenge the levy
on the ground that the levy imposed on him is excessive. When a special
law creates a liability and provides a special or particular remedy for correct-
ing any mistake that may occur in its enforcement, the aggrieved party
must adopt the form of remedy given to him by the State and no other.
In Dhulabhai v. State of M.P.21* Chief Justice Hidayatullah formulated
the circumstances under which the jurisdiction of the civil court can be in-
voked in the matter of a levy of tax. Therein it has been laid down that
where the statute gives a finality to the orders of the special tribunals, the
civil courts' jurisdiction must be held to be excluded, if there is adequate
remedy to do what the civil court would normally do in a suit. It has
further been laid down in that case that question of the correctness of the
assessment apart from their constitutionality are for the decision of the
authorities and a civil suit does not lie if the orders of the authority are de-
clared final or there is an express prohibition under the particular Act.
The civil courts do not have jurisdiction to examine the correctness of the
214. AIR 1970 S.C. 1298. On this point refer to notes 22, 25 and 152 supra.
215. AIR 1940 P.C. 105.
216. AIR 1969 P.C. 78. Also see State v. Sri Ramakrishna Mills, AIR 1970 Mad.
316.

computation of the net profits made by the authorities for purposes of tax
under the Act.
V. NOTICE, ESTOPPEL, GOVERNMENT PRIVILEGES
Notice
Section 80, C.P.C-, stipulates a notice to the Government before a suit

is brought against it. In Chandrakant v. State211 a suit was brought against
the Registrar of Public Trusts challenging his decision that a trust was a
public and not a private trust. It was argued that the suit was not maintian-
able inasmuch as notice as required by section 80, C.P.C-, had not been
given. Analysing the provisions of section 80, the court found that each
public trust is to be registered with the Registrar; it is for him to decide
whether the trust is a public trust or not and after giving his findings he be-
comes functus officio in the matter. It is not within his power to change
his decision or to alter the entries in the register. That can be achieved by
filing a civil suit in a court. When a suit is filed, no relief is asked per-
sonally against the Register or the Government, and, therefore, section 80
does not apply. If relief is asked personally against the Government or a
public officer, then notice under section 80 is necessary; if no relief is ask-
ed personally against them, no notice is necessary.218
Estoppel
Rule 28 (1-A) of the Mineral Concession Rules prescribes that every

application for grant of a mining lease shall be disposed of by the State
Government within 9 months from the date of the receipt of the application.
Rule 57 (2) lays down that where such an application is not disposed of with-
in the prescribed time limit, it shall be deemed to be a refusal to grant the
same. In N. Setharamiah v. Kotaiah,n9 the Supreme Court has held by a
majority that these two rules read together are mandatory and after the
prescribed period, the State Governmert would not be competent to deal
with the applications pending before it. There can be no estoppel against
a statute or statutory rule; they bind the government as much as they bind
others and the requirements of these rules cannot be waived by the State
Government.
In Union of India v. Rasul Ahmed,220 the railway authorities charged
with the duty of delivering the consignments represented to the plaintiff
217. AIR 1970 Bom. 301.

218. See, Revati Mohan v. Jatindra Mohan, 34 P.C. 36.
2J* AIR 1970 S.C. 1354.
220. ATR 1970 ori. 157.

that his consignment had not arrived. The court has held that once, in a
particular case, the authorised officer makes the representation that the
consignment has not arrived and the consignee acts on the basis of such
representation, a plea of estoppel will be available to the consignee against
the railway administration. In the instant case, a clear case of estoppel
is made out in relation to the non-receipt of the consignment and it is not
open to the Railway Administration to establish later that this very con-
signment had arrived earlier. The Supreme Court in Boota Mai v. Union
of India221 has not negatived the plea of estoppel in such cases or in such
circumstances.
Government's Privilege not to Produce Documents
In S. K. Neogi v. Union of India,222 the Assam High Court has gone,

into the question of government's privilege not to produce documents.
The court has stated that the law in India is now clear that when privilege
is claimed with regard to a certain document, it is for the court to deter-
mine at the first instance whether the document relates to the affairs of the
State. This decision rests entirely with the court. How that decision will
be arrived at by the court is however a ticklish matter. The court under
Section 162 of the Evidence Act will not inspect the document, although
it is brought to court, in order to determine whether it relates to the affairs
of the State. It will, however, have power to determine the point by enter-
taining collateral evidence or evidence aliunde. As the Supreme Court has
observed in Sodhi Sukhdeo Singh's case;223
If the document cannot be inspected, its contents cannot indirectly be proved,
but that is not to say that other collateral evidence cannot be produced which
may assist the Court in determining the validity of objection.
This view is in accord with the decision of the Privy Council in Henry Greer
Robinson v. Stat? of South Australia22* The court is only debarred under
section 162 from inspecting the document in order to determine whether it
relates to the affairs of the State; but is not prevented from arriving at its
decision by entertaining other appropriate and relevant evidence. The law
in England has undergone a change after the House of Lords decision in
Duncan v. Cammell Laird and Co. Ltd.,22^ wherein it has been held that
once the Crown makes the claim supported by the affidavit of the appro-
221. AIR 1962 S.C. 1716.

222. AIR 1970 A &N130.
223. AIR 1961 S.C. 493.
224. AIR 1934 P.C. 254.
225. AIR 1942 A.C. 624.

priate Minister, it is the Judge's duty to reject the evidence even if the party
who wants to prove it has it in possession. Once the Minister affirms that
production of the evedence is against national interest the Judge cannot
question whether the claim of privilege is justified or not. A decision of
the House of Lords in Glasgow Corpn. v. Central Land Board,22* referring
to Duncan's case, has observed that the Scottish law has always reserved
to the courts the inherent power to inspect the documents and to override
the certificate of the head of the department that production would be
against the public interest. It has been held that impartial administration
of justice in the courts of law is also a matter of a public interest, and that
indeed it is of a higher order. The practice in the United States is in accord
with the principles laid down in the Privy Council case. Even after the
passing of the Crown Proceedings Act in England in 1947, the powers in
England are much narrower than those conferred under section 162 of the
Evidence Act.
As regards section 123, the concept of 'state' has undergone a tremend-
ous change. Besides, the 'state' is a dynamic organisation. A democratic
'state' being the creature of a written Constitution, holds out the picture of
a welfare State. The affairs in the welfare state of today cannot be com-
pared with those which were obtaining prior to independence, and even
during that period, as days rolled on. State activities were expanding.
It is no longer the regal functions alone which the state exercises. Its acti-
vities permeate through various fields and aspects of the body politic.
The court has, therefore, held that administrative instructions and
guidance notes secretly given to various authorities at different levels and the
subordinate officers in the departments would be regarded as documents
relating to the affairs of the State under section 123 of the Evidence Act.
The officers are entitled to such advice and instructions from time to time
in dealing with matters involving law and order and discipline in the entire
organisation. No objection can be taken to such instructions and guidance
being given and no one can be allowed to make capital out of such confi-
dential instructions which are not intended for outsiders or for publication.
As observed by the House of Lords in Duncan's case: "Practice of keeping
a class of documents secret is necessary for the proper functioning of the
public service."227
VI. GOVERNMENT ENTERPRISES
A number of judicial pronouncements have been made during the year

on some of the aspects of the functioning of government companies. The
226. 1956 S.C. (HL) 1.

227. For further discussion of the point see, Jain & Jain, op. cit., 47.

common theme in all these decisions is to underline the separate entity of the
government company as distinguished from the government itself.
In Aftab Ram v. State,228 the High Court of Jammu and Kashmir has
held that no writ can be issued against a government company which is
registered under the Indian Companies Act, even though it may be a company
wholly owned, managed and run by the government. Referring to Rajas-
than State lectricity Board's case,229 the court has pointed out that the autho-
rity to be subject to writ jurisdiction should be statutory. No writ can be
issued against corporations, associations, individuals or limited companies
or companies not created under a statute and not invested with powers to
issue directions and partaking something of the sovereign powers of the
state.
In State of Bihar v. Union of India,2Z0 it was argued before the Supreme
Court that the Hindustan Steel Ltd. is a 'state' and, therefore, the suits in
which the Government of India along with the Hindustan Steel have been
impleaded can properly be filed under Article 131 on the original side of the
Supreme Court. Rejecting the argument, the Court has held that the Hin-
dustan Steel may be 'state' for purposes of article 12 of the Constitution,
but there is no reason why the enlarged definition of 'state' given in Parts
Til and TV of the Constitution would be attracted to article 131. The
Hindustan Steel cannot be considered as a 'State' for purposes of article 131.
Tn S. L. Aggarwal v. General Manager,231 the Supreme Court has held
that an employee of a government company such as the Hindustan Steel
ltd. does not hold a civil post under the Union, nor does he belong to the
civil service of the Union or the State for the purposes of Article 311. The
court refused to accept the argument that since the Hindustan Steel is en-
tirely financed by the Government, and its management is directly the res-
ponsibility of the President, the post under it is virtually under the Govern-
ment of India. This argument, the court has said, ignores some fundamental
concepts relating to incorporated companies. A company whose major
proportion of the capital has been subscribed by the Government, could
not be regarded as equivalent to the Government because being registered
under the Companies Act, it has a separate existence and could not be held
to be either a government corporation or an industry run by or under the
authority of the Government.332 A government company has its indepen-
dent existence and is distinct from its members. Its employees cannot,
therefore, be regarded as holding civil posts under the Government and so
are not entitled to the protection of article 311. It may be noted that while
228. AIR 1970 J & K 132.

229. AIR 1967 S.C. 1857.
230. AIR 1970 S.C. 1446.
231. AIR 1970 S.C. 1150.
232. PragaTools Corp. v. C. V. Imanual, AIR 1969 S.C. 1306.

there were several High Court cases on this point, 233 there was no Supreme
Court case so far. This is the first case in which the point has been settled
by the highest court in the land.
The Heavy Engineering Corporation Ltd. is a government company
incorporated under the Companies Act. Its entire capital is contributed'
by the Central Government; all its shares are registered in the name of the
President and certain officers of the Central Government. The Company's
memorandum and articles of association confer large powers on the Cen-
tral Government including the power of giving directions as regards com-
pany's functioning and its directors are appointed by the Government.
Nevertheless, in H. F. M. Union v. State of Bihar,2U the Supreme Court has
negatived the contention that the company can be regarded as an "industry"
carried on by or under the authority of the Central Government in terms of
section 2 (a) of the Industrial Disputes Act, 1947. The court held that the
fact that the President holds all its shares, or that it is controlled wholly or
partially by the Government or such other features do not make the com-
pany an agent of the Government. The bone of contention in the case was
that an industrial dispute concerning the company had been referred to an
industrial tribunal by the State Government under section 10 of the Industrial
Disputes Act. The Mazdoor Union in a writ petition under Article 226
disputed the validity of the reference and contended that only the Central
Government could make such a reference as it was an industry being carried
on under the Central Government's authority. The Supreme Court rejected
the contention.
Raja Ram v. State235 is a case under the Land Acquisition Act. The
State of Punjab sought to acquire some land for a public purpose, viz., for
construction of godowns for storage of foodgrains for the Food Corpo-
ration of India—a government company. The court held the acquisition
bad. The Food Corporation constituted under the Food Corporation Act,
1964, cannot be regarded as a department of the Government. 236 The next
question was whether land could be acquired for it as a 'company' within
the definition of that expression contained in section 3 (e) ofthe Land Acqui-
sition Ad. On this point, the court took the position that to be a 'com-
pany' under the Act. two conditions must be fulfilled : (1) it should be a
company as understood in ordinary law; and (//) it should be registered under
an Indian Act. The corporation fulfils the second test as it is registered
under the Companies Act. But it does not fulfil the first test. The expres-
sion 'company' used in section 3 (e) means a juristic person composed of a
233. Subodh RanjanGhosv. SindhriFertilizers,AIR 1957Pat.10;RamBabuRathaur

v. L.I.C., AIR 1961 All. 502; D.V.C. v. Provat Roy, 60 CWN 1023.
234. AIR 1970 S.C. 82.
235. AIR 1970 Punj. 361.
236. A.P. State RoadTransport Corp. v. LT.O., AIR 1964 S.C. 1486.

fluctuating body of persons. It is an association of individuals and its

members hold shares in it which they can freely transfer. The corporation
does not satisfy any of these ingredients. It has no shareholders who may
have subscribed to its capital as its entire capital has been provided by the
Government after due appropriations made by Parliament by law. The
management of the affairs of the corporation vests in a government-nomi-
nated board which is bound by Government's instructions on matters of
policy. No private person can have any interest in the corporation and,
accordingly, it cannot be regarded as a 'company' under section 3 (e). There-
fore, it was necessary to follow the provisions of Part VII of the Land Acqui-
sition Act. The corporation cannot also be regarded as a Central Govern-
ment undertaking; it is a separate juristic person than the Central Govern-
ment. As the state was not contributing anything towards the compen-
sation payable for the property sought to be acquired, the acquisition can-
not be regarded for a public purpose237 and hence it was bad.
In Fertilizer Corporation v. Their Workmen,2** the Supreme Court has
referred to the binding nature of government instructions issued to govern-
ment companies from time to time. The Fertilizer Corporation, a govern-
ment company is, no doubt, an autonomous unit. But several articles of
association empower the President of India and the Central Government
to give directions in its working. For example, under article 67, the Board
of Directors has the necessary power to carry out the purposes of the corpo-
ration, but subject to the directives issued by the President from time to
time under article 110 which provides that the President may, from time
to time, issue such directives as he may consider necessary in regard to the
conduct of the company's business. The directors are to give immediate
effect to the directives so issued. Reading these articles together, the court
has held that the position is that the exercise of powers of the Board of Direc-
tors of the company is, apart from other restrictions, subject to the direc-
tives ond the directors are bound to give immediate effect to the direc-
tives so issued. In the instant case, however, the Court did not find it neces-
sary to investigate the nature of the power exercised by the President or the
Central Government when giving directions to the company under its articles
of association.
237 .Valji Bhai Muljil Bhai SonjTs case, AIR 1963 S.C. 1890.
238. Jh%ndu LaVs case, AIR 1961 S.C. 343, Shyam Behari v. State of M.P., AIR
1965 S.C. 427.

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ADMINISTRATIVE LAW

I. Delegated Legislation IV. Judicial Review

Since the independence of India, increasingly larger number of cases

It is a well established proposition that a legislature in India cannot

* Professor of Law, Banaras Hindu University, Varanasi.

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3. AIR 1970 S.C. 1588.

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subject to such safeguards as subjecting the rates of tax to Government's

7. AIR 1970 J &K112.

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Moving away from the ground of excessive delegation, reference may

12. AIR 1970 Bom. 59.

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23. AIR 1966 S.C. 693.

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26. AIR 1962 S.C. 42.

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of non-observance of the provisions of law by the executive. Such a case

It is an established fact of modern life that administration issues not

31. Jain & Iain, op. cit., 81-93.

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II. QUASI-JUDICIAL POWER : RIGHT OF HEARING

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38. Jain & Jain, op. cit., 93 et sea.

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41. Infra, this section.

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45. AIR 1970 S.C. 1542.

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table is really one to regulate the running of the vehicles on a particular

52. C. M.Shah v. M.Patial, AIR 1970 Guj. 67.

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57. AIR 1970 Pat. 109.

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60. AIR 1970 S.C. 15

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Questions concerning infrigement of some aspect of natural justice con-

61. See, for example, Sisir v. State, supra, note 56

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66. AIR 1960 S.C. 1313,

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evidence is considered against the petitioner he must be given an oppor-

73. AIR 1970 Raj. 48.

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81. (1968) 1 W.L.R 815.

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89. AIR 1970 S.C. 1520.

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91. AIR 1970 Guj, 1.

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97. A I R 1970 S.C. 1302.