TMI Blog2015 (9) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... touches the merits of the main application which requires elaborate examination and even considering the impugned order, it cannot be said that there is no consideration by the Tribunal and hence, it cannot be said that there is breach of principles of natural justice as contended by the petitioner and in facts arising out of this petition, such a contention deserves to be negatived while exercising extraordinary discretionary jurisdiction of this Court. The petitioner having failed even before the Apex Court has filed this petition directly under Article 226 of the Constitution of India. The decision of the Apex Court in the case of Keshavlal Khemchand & Sons Pvt. Ltd. (2015 (2) TMI 686 - SUPREME COURT OF INDIA) was rendered in a group of petitions and one of the petitions therein was filed by the present petitioner. - Tribunal was examining the application for stay and not the main Securitization Application under Section 17 of the Act and therefore, the Tribunal was required to consider only the primafacie case of the petitioner. - Tribunal has given its findings on merits and in facts and circumstances of this case, as observed above, the same cannot be termed as breach of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L CIVIL APPLICATION NO. 6331 of 2015 - - - Dated:- 6-5-2015 - MR.JUSTICE R.M.CHHAYA, J. FOR THE PETITIONER : MR AS VAKIL, ADVOCATE FOR THE RESPONDENT : MR INDRAVADAN PARMAR, ADVOCATE ORAL ORDER 1. By way of this petition under Article 226 of the Constitution of India, the petitioner has challenged the order dated 19.3.2015 passed by the Debt Recovery Tribunal1, Ahmedabad on an application for stay in Securitisation Application No.62 of 2014 filed by the petitioner under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the Act ). 2. As the present petition is filed against the interim order and with the consent of the learned advocate for the petitioner and learned advocate for respondent No.1 Bank appearing on caveat, the matter was heard at the admission stage itself. 3. The facts which can be culled out from the record of the petition are as under: 3.1 Respondent No.1 Bank extended financial facilities to the petitioner in the year 199798 and initially sanctioned credit facilities of approximately ₹ 10.80 crores which came to be revised from time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereafter, respondent No.1 Bank issued a statutory demand notice dated 22.2.2012 as provided under Section 13(2) of the Act, whereby a demand of ₹ 28,29,22,224.29 ps. was raised, being amount due and outstanding as on 31.1.2012. The petitioner replied the said notice by its reply dated 17.4.2012. It appears that thereafter, respondent No.1 Bank gave response to the same vide its communication dated 27.4.2012. It further appears that by another notice dated 5.2.2013, respondent No.1 Bank raised a demand of ₹ 11,78,81,338.00 ps. which came to be replied by the petitioner vide its reply dated 3.4.2013. Respondent No.1 Bank replied the same vide its reply dated 20.4.2013. Respondent No.1 Bank thereafter issued a notice as provided under Section 13(4) of the Act dated 21.6.2013. 3.3 The record further indicates that the petitioner thereafter filed a writ petition before this Court being Special Civil Application No.10338 of 2013 challenging the notice under Section 13(4) of the Act and also challenged the Vires of certain provisions of the Act. The record indicates that the Division Bench of this Court protected the petitioner vide order dated 28.6.2013. However, the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter was pending before the Apex Court, the petitioner also submitted an OTS proposal dated 26.5.2014, which was turned down by respondent No.1 Bank vide its reply dated 12.6.2014. 3.7 It appears from the record that the learned District Magistrate issued a notice and on receipt of the notice, the petitioner filed the present Securitization Application as provided under Section 17 of the Act on 4.6.2014 which came to be numbered as Securitization Appeal No.62 of 2014, interalia, challenging the demand notice as well as the notice dated 21.6.2013 issued by respondent No.1 Bank under Section 13(4) of the Act. 3.8 The petitioner has raised various contentions before the Debt Recovery Tribunal in the said application filed under Section 17 of the Act. Respondent No.1 Bank herein filed its reply and a rejoinder is also filed. After hearing the petitioner as well as the Bank by the impugned order dated 19.3.2015, the Tribunal was pleased to reject the same. The record further indicates that respondent No.1 Bank has also filed an Original Application before the Debt Recovery Tribunal under Section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not considered by the Tribunal or no reasons are given by the Tribunal while passing the impugned order. It was therefore contended that the same amounts to breach of principles of natural justice and therefore, the petitioner has approached this Court under Article 226 of the Constitution of India directly. It was contended that the Debt Recovery Tribunal has not passed a reasoned order. It was further contended that none of the judgments lay down a blanket proposition that in matters arising under the Act, no writ should be entertained directly as there is an alternative remedy. It was contended that the petitioner cannot be compelled to avail statutory remedy, on presumption or on allegation that the petitioner has chosen not to avail the statutory remedy, more particularly, on the ground that it provides for appeal fees as well as predeposit that too, against an interim order. 5.1 Mr. Vakil, elucidating the aforesaid principle, contended that nonrecording of reasons would constitute violation of principles of natural justice. It was contended that the rule of principles of natural justice requires reasons to be given in support of an order and is like the basic principles of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, points raised, issues involved and conclusions recorded in support of the order passed by the authority. It was contended that even while passing a byparte interim order, the administrative as well as quasijudicial authorities cannot bypass the requirement of recording of reasons and in absence of any such reasons, the petitioner cannot be asked to avail an alternative remedy of filing an appeal under Section 18 of the Act. It was further pointed out, more particularly, from the affidavit dated 19.4.2015 that various points were raised as enumerated in the said affidavit; however, the same has not been dealt with and no reasons are given by the Debt Recovery Tribunal while rejecting the application filed by the petitioner for interim relief. It was contended that hearing of the interim relief application went on for 4 days before the Debt Recovery Tribunal. However, the submissions made by the petitioner are not recorded and by simply summarizing the same, the application has been dealt with and rejected. In light of the aforesaid, Mr. Vakil submitted that there is a breach of principles of natural justice by the Debt Recovery Tribunal and as no reasons are recorded in support ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g any further measures under Section 13(4) of the Act. It was also contended that power of the Tribunal under Section 17(3) of the Act to restore possession cannot render the power of the Tribunal to grant interim relief nugatory. It was therefore contended that this Court may entertain this petition, even though the petitioner has not availed the alternative remedy under Section 18 of the Act and grant the interim relief as prayed for before the Tribunal or by quashing and setting aside the impugned order, remand the proceedings back to the Tribunal with a direction to rehear the parties on interim relief. It was therefore submitted that on all these aspects, this Court has jurisdiction to issue a prerogative writ by entertaining the petition as prayed for. 6. Per contra, Mr. Indravadan Parmar, learned advocate for respondent No.1 Bank on caveat submitted that the jurisdiction of this Court under Article 227 of the Constitution of India is a supervisory jurisdiction and the same is regulated by the statute and power of superintendence under Article 227 of the Constitution of India. It was further submitted that this Court in exercise of powers under Article 226 of the Constitut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en if it is presumed that it is not a proper consideration, only the appeal would be maintainable. It is further contended that the same can be done only by an Appellate Court and not by a writ Court and writ Court may not issue any prerogative writ or a writ of certiorari. It was contended that the contentions raised by the petitioner mainly on the plank that as some grounds are not observed in the impugned order, it would not amount to any breach of principles of natural justice. Mr. Parmar has further relied upon the following judgments: (i) United Bank of India Vs. Satyawati Tondon Ors. reported in (2010) 8 SCC 110 (Paragraphs 42 to 45 and 49, 50 and 55) (ii) Kanaiyalal Lalchand Sachdev Ors. Vs. State of Maharashtra Ors., reported in (2011) 2 SCC 782 (Paragraphs 23 and 25) (iii) Easland Combines, Coimbatore Vs. Collector of Central Excise, Coimbatore, reported in (2003) 3 SCC 410 (Paragraph 18) (iv) Ratanlal Vs. Bardi Bai Ors. reported in AIR 2003 Madhya Pradesh 248 (Paragraph 13) (v) Tajender Singh Ghambhir Anr. Vs. Gurpree Singh Ors. reported in (2014) 10 SCC 702 (Paragraph 11) 6.2 It was also contended on behalf of respondent No.1 that it cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter, may make an application alongwith such fee, as may be prescribed to the Debts Recovery Tribunal having jurisdiction in the matter within fortyfive days from the date on which such measure had been taken: PROVIDED that different fees may be prescribed for making the application by the borrower and the person other than the borrower. (2) The Debts Recovery Tribunal shall consider whether any of the measures referred to in subsection (4) of section 13 taken by the secured creditor for enforcement of security are in accordance with the provisions of this Act and the rules made thereunder. (3) If, the Debts Recovery Tribunal, after examining the facts and circumstances of the case and evidence produced by the parties, comes to the conclusion that any of the measures referred to in subsection (4) of section 13, taken by the secured creditor are not in accordance with the provisions of this Act and the rules made thereunder, and require restoration of the management of the business to the borrower or restoration of possession of the secured assets to the borrower, it may by order, declare the recourse to any one or more measures referred to in subsection (4) of section 13 ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrower which shall pass an order on such application. 18. Appeal to Appellate Tribunal(1) Any person aggrieved, by any order made by the Debts Recovery Tribunal under section 17, may prefer an appeal alongwith such fee, as may be prescribed to the Appellate Tribunal within thirty days from the date of receipt of the order of Debts Recovery Tribunal: PROVIDED that different fees may be prescribed for filing an appeal by the borrower or by the person other than the borrower: PROVIDED further that no appeal shall be entertained unless the borrower has deposited with the Appellate Tribunal fifty per cent. of the amount of debt due from him, as claimed by the secured creditors or determined by the Debts Recovery Tribunal, whichever is less: PROVIDED also that the Appellate Tribunal may, for the reasons to be recorded in writing, reduce the amount to not less than twentyfive per cent. of debt referred to in the second proviso. 18A. Validation of fees levied Any fee levied and collected for preferring, before the commencement of the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Act, 2004, an appeal to the Debts Recovery Tribunal or the Appellate Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate Tribunal or the High Court, as the case may be, shall serve a notice of application or appeal filed by the applicant or the appellant on the caveator. (4) Where a notice of any caveat has been served on the applicant or the appellant, he shall periodically furnish the caveator with a copy of the application or the appeal made by him and also with copies of any paper or document which has been or may be filed by him in support of the application or the appeal. (5) Where a caveat has been lodged under subsection (1), such caveat shall not remain in force after the expiry of the period of ninety days from the date on which it was lodged unless the application or appeal referred to in subsection (1) has been made before the expiry of the said period. 10. It is an admitted position that the present petition is filed directly by the petitioner under Article 226 of the Constitution of India challenging the order dated 19.3.2015 passed by the Debt Recovery Tribunal1, Ahmedabad on an application for stay in Securitisation Application No.62 of 2014 filed by the petitioner, pending the main application. The provisions of Section 18 of the Act are crystal clear and the same p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sought to be affected by their orders and give sufficiently clear and explicit reasons in support of the orders made by them. Then alone administrative authorities and tribunals exercising quasijudicial function will be able to justify their existence and carry credibility with the people by inspiring confidence in the adjudicatory process. The rule requiring reasons to be given in support of an order is, like the principle of audi alteram partem, a basic principle of natural justice which must inform every quasijudicial process and this rule must be observed in its proper spirit and mere pretence of compliance with it would not satisfy the requirement of law. The Government of India also failed to give any reasons in support of its order rejecting the revision application. But we may presume that in rejecting the revision application, it adopted the same reason which prevailed with the Collector. The reason given by the Collector was, as already pointed out, hardly satisfactory and it would, therefore, have been better if the Government of India had given proper and adequate reasons dealing with the arguments advanced on behalf of the appellants while rejecting the revision appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cession Rules, 1960, was challenged before this Court on the ground that it did not contain reasons. Bachawat, J., speaking for himself and Mudholkar, J., rejected this contention on the view that the reason for rejecting the revision application appeared on the face of the order because the Central Government had agreed with the reasons given by the State Government in its order. The learned Judges did not agree with the submission that omission to give reasons for the decision is of itself a sufficient ground for quashing it and held that for the purpose of an appeal under Article 136 orders of courts and tribunals stand on the same footing. The learned Judges pointed out that an order of court dismissing a revision application often gives no reasons but this is not a sufficient ground for quashing it and likewise an order of an administrative tribunal rejecting a revision application cannot be pronounced to be invalid on the sole ground that it does not give reasons for the rejection. The decision in Hari Nagar Sugar Mills case (AIR 1961 SC 1669) (supra) was distinguished on the ground that in that case the Central Government had reversed the decision appealed against without gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should do is to give reasons for their orders. Even in the case of appellate courts invariably reasons are given, except when they dismiss an appeal or revision in limine and that is because the appellate or revisional court agrees with the reasoned judgment of the subordinate court or there are no legally permissible grounds to interfere with it. But the same reasoning cannot apply to an appellate tribunal, for as often as not the order of the first tribunal is laconic and does not give any reasons. (pp. 47273) (of SCR) : (at p. 675 of AIR). 24. With reference to an order of affirmance the learned Judge observed that where the original tribunal gives reasons, the appellate tribunal may dismiss the appeal or the revision, as the case may be, agreeing with those reasons and that what is essential is that reasons shall be given by an appellate or revisional tribunal expressly or by reference to those given by the original tribunal. 25. This matter was considered by a Constitution Bench of this Court in Bhagat Raja case (1967 (3) SCR 302: AIR 1967 SC 1606) (supra) where also the order under challenge had been passed by the Central Government in exercise of its revisional power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatute or statutory rule either expressly or by necessary implication, it could not be said that there is any general principle or any rule of natural justice that a statutory tribunal should always and in every case give reasons in support of its decision. In that case the Court was primarily concerned with the interpretation of the provisions of Act and the Army Rules, 1954. There is no reference to the earlier decisions in Harinagar Sugar Mills case (AIR 1961 SC 1669) (supra) and Bhagat Raja case (AIR 1967 SC 1606) (supra) wherein the duty to record reasons was imposed in view of the appellate jurisdiction of this Court and the supervisory jurisdiction of the High Court under Articles 136 and 227 of the Constitution of India respectively. 28. In Tranvancore Rayon Ltd. v. Union of India, (1970) 3 SCR 40: (AIR 1971 SC 862) this Court has observed: The Court insists upon disclosure of reasons in support of the order on two grounds: one, that the party aggrieved in a proceedings before the High Court or this Court has the opportunity to demonstrate that the reasons which persuaded the authority to reject his case were erroneous; the other, that the obligation to record reasons o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rinciple that justice should not only be done but should also appear to be done. Unreasoned conclusions may be just but they may not appear to be just to those who read them. Reasoned conclusions, on the other hand, will have also the appearance of justice. Third, it should be remembered that an appeal generally lies from the decision of judicial and quasijudicial authorities to this Court by special leave granted under Article 136. A judgment which does not disclose the reasons will be of little assistance to the Court. (p. 507) (of SCR) : (at p. 2761 of AIR). 31. In Siemens Engineering and Manufacturing Co. of India Limited case (1976 Suppl SCR 489: AIR 1976 SC 1785) (supra) this Court was dealing with an appeal against the order of the Central Government on a revision application under the Sea Customs Act, 1878. This Court has laid down: It is now settled law that where an authority makes an order in exercise of a quasijudicial function it must record its reasons in support of the order it makes. Every quasijudicial order must be supported by reasons. (p. 495) (of SCR) : (at p. 1789 of AIR). If courts of law are to be replaced by administrative authorities and tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tural justice which are also applicable to the award of an arbitrator and reliance was placed on the ,decisions in Bhagat Raja case (AIR 1967 SC 1606) (supra) and Siemens Engineering Co. case (AIR 1976 SC 1785) (supra). The said contention was rejected by this Court. After referring to the decisions in Bhagat Raja case (supra), Som Datt Datta case (AIR 1969 SC 414) (supra) and Siemens Engineering Co. case (supra) this Court has observed: It is no doubt true that in the decisions pertaining to Administrative Law, this Court in some cases has observed that the giving of reasons in an administrative decision is a rule of natural justice by an extension of the prevailing rules. It would be in the interest of the world of commerce that the said rule is confined to the area of Administrative Law ........But at the same time it has to be borne in mind that What applies generally to settlement of disputes by authorities governed by public law need not be extended to all cases arising under private law such as those arising under the law of arbitration which is intended for settlement of private disputes. (pp. 75152) (of SCC) : (at pp. 1444 and 1445 of AIR). 34. The decisions of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the decision is subject to appeal, revision or judicial review. It may, however, be added that it is not required that the reasons should be as elaborate as in the decision of a Court of law. The extent and nature of the reasons would depend on particular facts and circumstances. What is necessary is that the reasons are clear and explicit so as to indicate that the authority has given due consideration to the points in controversy. The need for recording of reasons is greater in a case where the order is passed at the original stage. The appellate or revisional authority, if it affirms such art order, need not give separate reasons if the appellate or revisional authority agrees with the reasons contained in the order under challenge. 36. Having considered the rationale for the requirement to record the reasons for the decision of an administrative authority exercising quasijudicial functions we may now examine the legal basis for imposing this obligation. While considering this aspect the Donoughmore Committee observed that it, may well be argued that there is a third principle of natural justice, namely, that a party is entitled to know the reason for the decision, be it ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erein it has been held that natural justice demands that the decision should be based on so me evidence of probative value. (See R v. Deputy Industrial Injuries Commissioner ex P. Moore, (1965) 1 QB 456; Mohan v. Air New Zealand Ltd., 1984 AC 808). 38. The object underlying the rules of natural justice is to prevent miscarriage of justice and secure fair play in action. As pointed out earlier the requirement about recording of reasons for its decision by an administrative authority exercising quasijudicial functions achieves this object by excluding chances of arbitrariness and ensuring a degree of fairness in the process of decisionmaking. Keeping in view the expanding horizon of the principles of natural justice, we are of the opinion, that the requirement to record reason can be regarded as one of the principles of natural justice which govern exercise of power by administrative authorities. The rules of natural justice are not embodied rules. The extent of their application depends upon the particular statutory framework whereunder jurisdiction has been conferred on the administrative authority. With regard to the exercise of a particular power by an administrative autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shment was passed by the Chairman without complying with the mandate of the relevant statutory rule and the principles of natural justice. The requirement of recording reasons by every quasi judicial or even an administrative authority entrusted with the task of passing an order adversely affecting an individual and communication thereof to the affected person is one of the recognized facets of the rules of natural justice and violation thereof has the effect of vitiating the order passed by the concerned authority. 14. A careful reading of the Tribunal s order shows that though it did not find any procedural infirmity in the inquiry against the appellant, the order passed by the Chairman of the Managing Committee was nullified only on the ground of violation of Section 8(2) of the Act read with Rule 120(2) of the Rules inasmuch as permission of the Director was not obtained before removing the appellant from service. The High Court set aside the order of the Tribunal and indirectly restored the order passed by the Chairman of the Managing Committee because it was of the view that Section 8(2) is not applicable to the minority institutions. Neither the Tribunal nor the Division ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al in exercising judicial powers of the State and such exercise is subject to Article 136 jurisdiction of this Court. Such powers, this Court held, cannot be effectively exercised if reasons are not given by the Central Government in support of the order (AIR pp. 167879, para 23). 19. Again in Bhagat Raja v. Union of India the Constitution Bench of this Court examined the question whether the Central Government was bound to pass a speaking order while dismissing a revision and confirming the order of the State Government in the context of the Mines and Minerals (Development and Regulation) Act, 1957, and having regard to the provision of Rule 55 of the Mineral Concession Rules. The Constitution Bench held that in exercising its power of revision under the aforesaid Rule the Central Government acts in a quasijudicial capacity (see AIR p. 1610, para 8). Where the State Government gives a number of reasons some of which are good and some are not, and the Central Government merely endorses the order of the State Government without specifying any reason, this Court, exercising its jurisdiction under Article 136, may find it difficult to ascertain which are the grounds on which the Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of reasons, it is difficult for this Court to ascertain whether the decision is right or wrong (see SCC pp. 32021, para 5 : AIR p. 2761, para 5). 23. In Union of India v. Mohan Lal Capoor this Court while dealing with the question of selection under the Indian Administrative Service/Indian Police Service (Appointment by Promotion) Regulations held that the expression reasons for the proposed supersession should not be mere rubberstamp reasons. Such reasons must disclose how mind was applied to the subjectmatter for a decision regardless of the fact whether such a decision is purely administrative or quasijudicial. This Court held that the reasons in such context would mean the link between materials which are considered and the conclusions which are reached. Reasons must reveal a rational nexus between the two (see SCC pp. 85354, paras 2728 : AIR pp. 9798, paras 2728). 24. In Siemens Engg. and Mfg. Co. of India Ltd. v. Union of India this Court held that it is far too well settled that an authority in making an order in exercise of its quasijudicial function, must record reasons in support of the order it makes. The learned Judges emphatically said that every quasijudic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h certain conclusions are based and the actual conclusions. (See AIR p. 377, para 18.) 29. In a Constitution Bench decision of this Court in H.H. Shri Swamiji of Shri Amar Mutt v. Commr., Hindu Religious and Charitable Endowments Deptt. while giving the majority judgment Y.V. Chandrachud, C.J. referred to (SCC p. 658, para 29) Broom s Legal Maxims (1939 Edn., p. 97) where the principle in Latin runs as follows: Cessante ratione legis cessat ipsa lex. 30. The English version of the said principle given by the Chief Justice is that: (H.H. Shri Swamiji case, SCC p. 658, para 29) 29. reason is the soul of the law, and when the reason of any particular law ceases, so does the law itself . (See AIR p. 11, para 29.) 31. In Bombay Oil Industries (P) Ltd. v. Union of India this Court held that while disposing of applications under the Monopolies and Restrictive Trade Practices Act the duty of the Government is to give reasons for its order. This Court made it very clear that the faith of the people in administrative tribunals can be sustained only if the tribunals act fairly and dispose of the matters before them by wellconsidered orders. In saying so, this Court reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23, para 8.) 36. In Charan Singh v. Healing Touch Hospital a threeJudge Bench of this Court, dealing with a grievance under the CP Act, held that the authorities under the Act exercise quasijudicial powers for redressal of consumer disputes and it is, therefore, imperative that such a body should arrive at conclusions based on reasons. This Court held that the said Act, being one of the benevolent pieces of legislation, is intended to protect a large body of consumers from exploitation as the said Act provides for an alternative mode for consumer justice by the process of a summary trial. The powers which are exercised are definitely quasijudicial in nature and in such a situation the conclusions must be based on reasons and held that requirement of recording reasons is too obvious to be reiterated and needs no emphasising . (See SCC p. 673, para 11 : AIR p. 3141, para 11 of the Report.) 37. Only in cases of Court Martial, this Court struck a different note in two of its Constitution Bench decisions, the first of which was rendered in Som Datt Datta v. Union of India where Ramaswami, J. delivering the judgment for the unanimous Constitution Bench held that provisions of Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned very strongly in favour of disclosing of reasons in a case where the Court is acting in its discretion. The learned Master of Rolls said: (All ER p. 317) it is a corollary of the discretion conferred upon the Board that it is their duty to set out their reasoning in sufficient form to show the principles on which they have proceeded. Adopting Lord Lane, C.J. s observations [in R. v. Immigration Appeal Tribunal, ex p Khan (Mahmud) All ER at p. 423, QB at pp. 79495], the reasons for the lower amount is not obvious. Mr Cunningham is entitled to know, either expressly or inferentially stated, what it was to which the Board were addressing their mind in arriving at their conclusion. It must be obvious to the Board that Mr Cunningham is left with a burning sense of grievance. They should be sensitive to the fact that he is left with a real feeling of injustice, that having been found to have been unfairly dismissed, he has been deprived of his just desserts (as he sees them). 43. The learned Master of Rolls further clarified by saying: (Civil Service Appeal Board case, All ER p. 317) Thus, in the particular circumstances of this case, and without wishing to es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n any possible arbitrary exercise of judicial and quasijudicial or even administrative power. (e) Reasons reassure that discretion has been exercised by the decisionmaker on relevant grounds and by disregarding extraneous considerations. (f) Reasons have virtually become as indispensable a component of a decisionmaking process as observing principles of natural justice by judicial, quasijudicial and even by administrative bodies. (g) Reasons facilitate the process of judicial review by superior courts. (h) The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is virtually the lifeblood of judicial decisionmaking justifying the principle that reason is the soul of justice. (i) Judicial or even quasijudicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants faith in the justice delivery system. (j) Insistence on reason is a requirement f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strict Forum after coming to the conclusion that the petitioner and the builder, Respondents 3 and 4 have colluded with each other and hence, directed them to compensate the complainant for the harassment caused to them. 50. From the order of the State Commission dated 2672007 in connection with the appeal filed by the Bank, we do not find that the State Commission has independently considered the Bank s appeal. The State Commission dismissed the Bank s appeal for the reasons given in its order dated 672007 in connection with the appeal of the builders. 51. This Court is of the view that since the Bank has filed a separate appeal, it has a right to be heard independently in support of its appeal. That right has been denied by the State Commission. In that view of the matter, this Court quashes the order dated 2672007 passed by the State Commission as also the order of the National Commission dated 442008 which has affirmed the order of the State Commission. 15. In the case of BA Linga Reddy (supra), it has been observed as under: 18. It is apparent from the provisions that the scheme is framed for providing efficient, adequate, economical and properly coordinated roa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration of Administrative Law, they may have to be so replaced, it is essential that administrative authorities and tribunals should accord fair and proper hearing to the persons sought to be affected by their orders and give sufficiently clear and explicit reasons in support of the orders made by them. Then alone administrative authorities and tribunals exercising quasijudicial function will be able to justify their existence and carry credibility with the people by inspiring confidence in the adjudicatory process. The rule requiring reasons to be given in support of an order is, like the principle of audi alteram partem, a basic principle of natural justice which must inform every quasijudicial process and this rule must be observed in its proper spirit and mere pretence of compliance with it would not satisfy the requirement of law. x x x. 21. This Court in Rani Lakshmi Bai Kshetriya Gramin Bank s case (supra) while relying upon S.N. Mukherjee v. Union of India [1990 (4) SCC 594] has laid down thus : 8. The purpose of disclosure of reasons, as held by a Constitution Bench of this Court in S.N. Mukherjee v. Union of India (1990 (4) SCC 594), is that people must have confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... control the exercise of discretion conferred by the statute. There is need for such principles or guidelines when the discretionary power is purely administrative in character to be exercised on the subjective opinion of the authority. The same is, however, not true when the power is required to be exercised on objective considerations by a speaking order after affording the parties an opportunity to put forward their respective points of view. x x x x x We are also unable to agree with the submission that the requirement of passing a speaking order containing reasons as laid down in subsection (2) of Section 25N does not provide sufficient safeguard against arbitrary action. In S.N. Mukherjee v. Union of India [1990 (4) SCC 594], it has been held that irrespective of the fact whether the decision is subject to appeal, revision or judicial review, the recording of reasons by an administrative authority by itself serves a salutary purpose, viz., it excludes chances of arbitrariness and ensures a degree of fairness in the process of decisionmaking. 24. In Divisional Forest Officer, Kothagudem Ors. v. Madhusudhan Rao [2008 (3) SCC 469], this Court has laid down thus : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of mind and recording of reasoned decision are the basic elements of natural justice. It is not expected of the Commission to breach any of these principles, particularly when its orders are open to judicial review. Much less to Tribunals or such Commissions, the courts have even made compliance with the principle of rule of natural justice obligatory in the class of administrative matters as well. 27. Now we come to the order passed in the instant case with respect to the Bellary Scheme which is to the following effect : The objections and representations received in this regard is examined and the arguments advanced by the representatives of the STUs and private operators for and against the modification proposed by the State Government is considered in the light of the provisions of the Motor Vehicles Act, 1988. Sec. 102 of the M.V.Act, 1988 empowers the State Government, at any time, if it consider necessary in the public interest so to do, modify any approved scheme. Therefore, what is paramount for modifying the scheme is that it should be in the public interest. The modification now proposed is necessitated in view of the stand taken by the Hon ble Supreme Court of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned single Judge of the High Court. The High Court has set aside the judgment of the appellate Court and restored that of the trial Court. A perusal of the judgment of the High Court shows that the High Court has clearly exceeded its jurisdiction in setting aside the judgment of the appellate Court. Though not specifically stated, the phraseology employed by the High Court in its judgment, goes to show that the High Court has exercised its certiorari jurisdiction for correcting the judgment of the appellate Court. In Surya Dev Rai v. Ram Chander Rai and others (2003) 6 SCC 675, this Court has ruled that to be amenable to correction in certiorari jurisdiction, the error committed by the Court or authority on whose judgment the High Court was exercising jurisdiction, should be an error which is selfevident. An error which needs to be established by lengthy and complicated arguments or by indulging into a long drawn process of reasoning, cannot possibly be an error available for correction by writ of certiorari. If it is reasonably possible to form two opinions on the same material, the finding arrived at one way or the other, cannot be called a patent error. As to the exercise of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned Subordinate Judge to exercise jurisdiction nor did he act in disregard of principles of natural justice. Nor was the procedure adopted by him not in consonance with the procedure established by law. In exercising the supervisory power under Article 227, the High Court does not act as an Appellate Court or Tribunal. It will not review or reweigh the evidence upon which the determination of the inferior court or tribunal purports to be based or to correct errors of law in the decision. 20. This court again clearly reiterated the legal position in Laxmikant Revchand Bhojwani and Another v. Pratapsing Mohansingh Pardeshi (1995) 6 SCC 576. The court again cautioned that: 9. ...The High Court under Article 227 of the Constitution cannot assume unlimited prerogative to correct all species of hardship or wrong decisions. It must be restricted to cases of grave dereliction of duty and flagrant abuse of fundamental principles of law or justice, where grave injustice would be done unless the High Court interferes. 21. A threeJudge Bench of this court in Rena Drego (Mrs.) v. Lalchand Soni and Others (1998) 3 SCC 341 : (AIR 1998 SC 1990 : 1998 AIR SCW 1840) again abundantly mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , or (iii) acting in flagrant disregard of law or the rules of procedure or acting in violation of principles of natural justice where there is no procedure specified, and thereby occasioning failure of justice. (4) Supervisory jurisdiction under Article 227 of the Constitution is exercised for keeping the subordinate courts within the bounds of their jurisdiction. When a subordinate court has assumed a jurisdiction which it does not have or has failed to exercise a jurisdiction which it does have or the jurisdiction though available is being exercised by the court in a manner not permitted by law and failure of justice or grave injustice has occasioned thereby, the High Court may step in to exercise its supervisory jurisdiction. (5) Be it a writ of certiorari or the exercise of supervisory jurisdiction, none is available to correct mere errors of fact or of law unless the following requirements are satisfied: (i) the error is manifest and apparent on the face of the proceedings such as when it is based on clear ignorance or utter disregard of the provisions of law, and (ii) a grave injustice or gross failure of justice has occasioned thereby. (6) A patent error is an e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceed thereafter or afresh, the High Court may in appropriate cases itself make an order in supersession or substitution of the order of the subordinate court as the court should have made in the facts and circumstances of the case. 7. The same question was considered by another Bench in Shalini Shyam Shetty v. Rajendra Shankar Patil, and it was held: (SCC pp. 34749, para 49) (a) A petition under Article 226 of the Constitution is different from a petition under Article 227. The mode of exercise of power by the High Court under these two articles is also different. (b) In any event, a petition under Article 227 cannot be called a writ petition. The history of the conferment of writ jurisdiction on High Courts is substantially different from the history of conferment of the power of superintendence on the High Courts under Article 227 and have been discussed above. (c) High Courts cannot, at the drop of a hat, in exercise of its power of superintendence under Article 227 of the Constitution, interfere with the orders of tribunals or courts inferior to it. Nor can it, in exercise of this power, act as a court of appeal over the orders of the court or tribunal subordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the High Court s jurisdiction of superintendence under Article 227. (k) The power is discretionary and has to be exercised on equitable principle. In an appropriate case, the power can be exercised suo motu. (l) On a proper appreciation of the wide and unfettered power of the High Court under Article 227, it transpires that the main object of this article is to keep strict administrative and judicial control by the High Court on the administration of justice within its territory. (m) The object of superintendence, both administrative and judicial, is to maintain efficiency, smooth and orderly functioning of the entire machinery of justice in such a way as it does not bring it into any disrepute. The power of interference under this article is to be kept to the minimum to ensure that the wheel of justice does not come to a halt and the fountain of justice remains pure and unpolluted in order to maintain public confidence in the functioning of the tribunals and courts subordinate to the High Court. (n) This reserve and exceptional power of judicial intervention is not to be exercised just for grant of relief in individual cases but should be directed for promotion of publ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the practice would, undoubtedly, command that ordinarily when alternative efficacious remedy is available, and, more so, when statutory appellate mechanism is available in the Statute, no petition should be entertained. The view, which we are inclined take, is very reinforced by the decision of the Hon ble Apex Court rendered in Punjab National Bank Vs. O.C. Krishnan and Others (2001) 6 Supreme Court Cases 569. In a similar case, it has been clearly propounded and held that the High Court ought not to have exercised its jurisdiction under Article 227, in view of the provision for alternative remedy contained in the Act. It will also be interesting to note that the Act has been enacted with a view to provide a special procedure for recovery of debts due to the banks and financial institutions. There is a hierarchy of appeal provided in the Act. The appeal is provided in Section 20 and obviously therefore such an fasttrack procedure cannot be allowed to be derailed either by taking recourse to proceedings under Articles 226 and 227 of the Constitution or by filing a civil suit under Section 9 of the Code of Civil Procedure. It is in this context it has been succinctly observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. A.V. Venkateswaran Collector of Customs, Bombay Vs. Ramchand Sobhraj Wadhwani and Another AIR 1961 SC 1506. 13. M.G. Abrol, Additional Collector of Customs, Bombay and another Vs. M/s. Shantilal Chhotalal and Co. AIR 1966 SC 197. 21. In the case of State Bank of India (supra), it has been observed as under: 6. We have heard learned counsel for the parties. We fail to understand how the High Court could have exercised its jurisdiction under Articles 226 and 2327 of the Constitution to set aside a decree/final order passed by the DRT on 9.4.2003, in a collateral proceeding wherein the decree/final order was challenged indirectly on the ground that the application of the respondent for crossexamining the deponent had earlier been wrongly rejected. We have no hesitation in holding that when the DRT did not accede to the request of the respondent to crossexamine the deponent, it could have, in the appeal preferred by it, assailed the decree/final order on that ground and the Appellate Authority would have passed appropriate orders. The mere fact that the respondent had not been given an opportunity to crossexamine the deponent did not enable the respondent to bypass th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titution of quasijudicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute. 44. While expressing the aforesaid view, we are conscious that the powers conferred upon the High Court under Article 226 of the Constitution to issue to any person or authority, including in appropriate cases, any Government, directions, orders or writs including the five prerogative writs for the enforcement of any of the rights conferred by Part III or for any other purpose are very wide and there is no express limitation on exercise of that power but, at the same time, we cannot be oblivious of the rules of selfimposed restraint evolved by this Court, which every High Court is bound to keep in view while exercising power under Article 226 of the Constitution. 45. It is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Const ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is a matter of serious concern that despite repeated pronouncement of this Court, the High Courts continue to ignore the availability of statutory remedies under the DRT Act and SARFAESI Act and exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on the right of banks and other financial institutions to recover their dues. We hope and trust that in future the High Courts will exercise their discretion in such matters with greater caution, care and circumspection. 23. In the case of Kanaiyalal Lalchand Sachdev (supra), it has been observed as under: 23. In our opinion, therefore, the High Court rightly dismissed the petition on the ground that an efficacious remedy was available to the appellants under Section 17 of the Act. It is wellsettled that ordinarily relief under Articles 226/227 of the Constitution of India is not available if an efficacious alternative remedy is available to any aggrieved person. (See: Sadhana Lodh Vs. National Insurance Co. Ltd. Anr.5; Surya Dev Rai Vs. Ram Chander Rai Ors.6; State Bank of India Vs. Allied Chemical Laboratories Anr.) 25. In the instant case, apart from the fact that admittedly c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of suit and the power of the appellate court is coextensive with that of the trial court. It failed to bear in mind that what could be done by the trial court in the proceeding of the suit, can always be done by the appellate court in the interest of justice. 27. Considering the impugned order in this petition, though at first blush, the contention put forth by the learned advocate for the petitioner appears to be appealing, however, on going through the impugned order, it cannot be said that no reasons are assigned by the Tribunal. In the present case, it cannot be said that the Tribunal has just dismissed the application for stay by merely stating that it is dismissed. Even if it is presumed as stated in the additional affidavit filed by the petitioner that certain contentions raised by the Tribunal, though recorded, are not dealt with, is examined, it cannot be said that no reasons are given. The Tribunal was dealing with an application for stay and therefore, prima facie case was to be examined. In opinion of this Court, the contentions raised herein touches the merits of the main application which requires elaborate examination and even considering the impugned order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anding on the date of the notice under Section 13(2) of the Act in each of the cases. 29. It requires to be noted that the Tribunal was examining the application for stay and not the main Securitization Application under Section 17 of the Act and therefore, the Tribunal was required to consider only the primafacie case of the petitioner. This Court is conscious of the fact that dismissal of applicant s petition before the Apex Court does not take away right of the petitioner to raise grievance against respondent No.1Bank in the legal proceedings of the Securitization Application filed by the petitioner under Section 17 of the Act. However, in light of the fact that while examining primafacie case, the Tribunal has given its findings on merits and in facts and circumstances of this case, as observed above, the same cannot be termed as breach of principles of natural justice and in opinion of this Court, permitting the petitioner to bypass the statutory remedy of filing an appeal would be against the very purpose and object of the Act as held by the Apex Court in the case of United Bank of India (supra). As per the principles enunciated by the Apex Court in the case of Keshavlal ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
