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2015 (9) TMI 82 - GUJARAT HIGH COURT

2015 (9) TMI 82 - GUJARAT HIGH COURT - TMI - Application under Section 17 SARFAESI Act - Loan taken from respondent Bank - Assessee classified as NPA - Petition dismissed by Supreme Court - Respondent also filed an application under section 14 before the District Magistrate - District Magistrate issued a notice and on receipt of the notice, the petitioner filed the instant Securitization Application as provided under section 17 on 4-6-2014, challenging the demand notice as well as the notice dat .....

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s dealing with an application for stay and therefore, prima facie case was to be examined. - contentions raised herein 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 negat .....

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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 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 .....

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as well as the Bank were heard extensively by the Tribunal and therefore, considering the same, when the petitioner has an alternative efficacious remedy, the present petition under Article 226 and/or Article 227 of the Constitution of India does not deserve to be entertained keeping in mind the ratio laid down by the Apex Court in the case of United Bank of India (2010 (7) TMI 829 - SUPREME COURT) and Kanaiyalal Lalchand Sachdev (2011 (2) TMI 1277 - SUPREME COURT OF INDIA).

The aspec .....

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do not fall within the exceptions carved out by the Apex Court in the case of Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbai & Ors. reported in [1998 (10) TMI 510 - SUPREME COURT] and the facts do not lead to the conclusion that there is breach of principles of natural justice, which would enable this Court to exercise its extraordinary jurisdiction under Article 226 of the Constitution of India. - though the learned advocates have also gone into the merits of the application which i .....

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ndia, 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 .....

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d 9.6.2006 and a master agreement was executed on 3.4.2008. As stated in Paragraph 2.3 of the petition, respondent No.1 Bank vide sanction letter dated 20.6.2009, sanctioned base limit of ₹ 33.85 crores, total nonfund base limit of ₹ 3.50 crores and forward contract limit of ₹ 2.80 crores. It also appears from the record that movable properties comprising of stocks, stocks in trade, receivable, entire current assets, plant and machineries of the petitioner were hypothecated. Eq .....

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a deed of equitable mortgage was executed in favour of IDBI Bank Ltd. to secure its working capital term loan of ₹ 300 lacs and in favour of respondent No.1 Bank to secure its working capital term loan of ₹ 125 lacs as well as funded interest term loan of ₹ 470 lacs. It further appears that again on 3.1.2011, respondent No.1 Bank enhanced the financial facilities and the existing forward contract limit was reduced to ₹ 1.94 crores. The record further indicates that as fo .....

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sum of ₹ 66,55,000/on account of loss under the forward contract transactions and the same were in respect of forward contract transactions that had taken place after 24.5.2011 i.e. after the forward contract limit of ₹ 1.94 crores which was already exhausted. 3.2 The record indicates that 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 amou .....

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dent 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 .....

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tatusquo shall be maintained with regard to secured assets by the Bank as well as the owner, till the judgment is delivered by this Court. The record indicates that ultimately, by a common final judgment and order dated 24.4.2014, the Division Bench dismissed the matters including the writ petition filed by the petitioner being Special Civil Application No.10338 of 2013. The petitioner, being aggrieved by the same, preferred a Special Leave Petition before the Hon ble Supreme Court in Special Le .....

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High Court against respondent No.1 Bank. The record indicates that initially, the Hon ble Calcutta High Court had granted stay. Thereafter, as respondent No.1 Bank raised the issue of jurisdiction, the Hon ble Calcutta High Court was pleased to pass an order of return of plaint, for filing it before the appropriate Court at Ahmedabad. It further appears that respondent No.1 Bank filed an application as provided under Order 7 Rule 11 of the Code of Civil Procedure, 1908, interalia, contending th .....

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014, 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 1 .....

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r Section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 being Original Application No.402 of 2014 and the same is pending. The record indicates that the petitioner has also approached BIFR by way of Reference Case No.6 of 2013 which, as per the record of the petition, is still pending. The record indicates that the petitioner has also filed an application for OTS before IDBI Bank Ltd. and has also initially deposited a sum of ₹ 90 lacs with IDBI Bank Ltd. to .....

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preliminary objection as regards the very maintainability of the present petition as predominantly contended in Paragraph 4 of the affidavitinreply. The petitioner has further filed an affidavit dated 19.4.2015 and has contended that certain contentions raised by the petitioner are not considered by the Debt Recovery Tribunal while passing the impugned order, more particularly, to canvass that nonconsideration of the same has resulted into breach of principles of natural justice. 4. Heard Mr. A. .....

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a which is plenary in nature and which is not limited by any other Act. It was contended that even though there are inbuilt restrictions and it was further contended that an alternative remedy is not a bar especially in contingencies, more particularly, like violation of principles of natural justice. It was submitted that in facts of the present case, there is clear violation of principles of natural justice, inasmuch as, that the contentions raised by the petitioner are either not considered b .....

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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 p .....

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he principles of natural justice. Even in case of administrative orders and recording of finding without any reasons much less cogent reasons would amount to violation of principles of natural justice. Mr. Vakil has relied upon the judgment of the Apex Court in the case of Kranti Associates Private Limited & Anr. Vs. Sh. Masood Ahmed Khan & Ors. reported in (2010) 9 SCC 496. It was contended that as held by the Apex Court in the case of Kranti Associates Private Limited (supra), recordin .....

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nion of India, reported in (1990) 4 SCC 594 = AIR 1990 SC 1984 (Paragraphs 21 to 39) (c) G. Vallikumari Vs. Andhra Education Society & Anr. reported in (2010) 2 SCC 497 = AIR 2010 SC 1105. (Paragraphs 13 and 14) (d) Kranti Associates Private Limited (supra) (Paragraphs 14 to 51) (e) BA Linga Reddy Vs. Karnataka State Transport Authority, reported in AIR 2015 SC 767 (Paragraphs 18 to 29) 5.2 Mr. Vakil further relying upon the judgments in the cases of - (i) MP Industries Limited Vs. Union of .....

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hould be proper, relevant, germane, intelligible and deal with the arguments advanced, 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 .....

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oner 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 of the order passed by it and as the submissions made by the petitioner have not been dealt with by giving elaborate reasons, this Court may be pleased to hold that there is a breach of principles of natural justice a .....

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rn and the forward contracts which were undertaken after the forward contract limit was exhausted is not a secured debt and for such a debt, proceedings under the Act cannot be initiated by respondent No.1 Bank. It was contended that thus, respondent No.1 Bank has no jurisdiction to enforce the demand notices and thus, the petitioner has got a primafacie case, which has not been considered by the Tribunal. Mr. Vakil also relying upon the additional affidavit filed in this proceeding, contended t .....

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affidavitinreply filed by respondent No.1 Bank, it was contended that on the contrary, reply of respondent No.1 Bank establishes that there is a primafacie case in favour of the petitioner and balance of convenience is entirely in favour of the petitioner as the petitioner is a running Company and nongrant of interim relief would completely jeopardize the petitioner bringing it to a grinding halt. It was contended that if the interim relief is not granted, the petitioner would suffer irreparabl .....

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etitioner 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 advoc .....

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ubmitted that only because easy access to justice may be available by way of a petition under Article 227 of the Constitution of India, the same cannot be used as a licence to bypass an efficacious statutory remedy. It was therefore contended that this Court may not entertain the petition permitting the petitioner to bypass the statutory remedy. Mr. Parmar has relied upon the following judgments on the aforesaid aspect:- (a) Ranjeet Singh Vs. Ravi Prakash, reported in AIR 2004 SC 3892 (Paragraph .....

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(2006) 9 SCC 252 (Paragraphs 6 and 7) 6.1 It was submitted that the petitioner is a defaulter of public financial system and therefore, the petitioner does not deserve any reliefs claimed for in this petition. It was contended that the present petition is filed only to restrain respondent No.1 Bank from pursuing its action and right as conferred under the Act. It was contended that the present petition is nothing but a tool and device to avoid payment of deposit of amount which is a preconditio .....

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2, it was further contended that the same would frustrate the object of the Act. It is further contended that there is no hardship as contended by the petitioner and as such in the impugned order, the Tribunal has dealt with the contentions raised by the petitioner and even 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 .....

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f 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 be said that the impu .....

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of the Act. It was further submitted that in light of the ratio laid down by the Apex Court in the case of Kanaiyalal Lalchand Sachdev (supra), the petition deserves to be dismissed and the petitioner be relegated to the alternative remedy of filing an appeal. It was further submitted that the Tribunal, after appreciating the contentions raised by both the parties, did not find any primafacie case and/or balance of convenience. It was contended that the Tribunal has rightly considered the mater .....

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ontention that the notices impugned are unenforcible and the reasons which are enumerated in Paragraph 5 of the petition clearly sets out the reason why the present petition is maintainable under Article 226 of the Constitution of India and/or Article 227 of the Constitution of India and as to why this Court may entertain the petition despite existence of remedy under Section 18 of the Act. 8. No other or further submissions are made by the learned advocates appearing for the respective parties. .....

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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, a .....

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measures referred to in subsection (4) of section 13 taken by the secured creditors as invalid and restore the possession of the secured assets to the borrower or restore the management of the business to the borrower, as the case may be, and pass such order as it may consider appropriate and necessary in relation to any of the recourse taken by the secured creditor under subsection (4) of section 13. (4) If, the Debts Recovery Tribunal declares the recourse taken by a secured creditor under su .....

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thin sixty days from the date of such application: PROVIDED that the Debts Recovery Tribunal may, from time to time, extend the said period for reasons to be recorded in writing, so, however, that the total period of pendency of the application with the Debts Recovery Tribunal, shall not exceed four months from the date of making of such application made under subsection (1). (6) If the application is not disposed of by the Debts Recovery Tribunal within the period of four months as specified in .....

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may be, dispose of the application in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and the rules made thereunder. 17A. Making of application to Court of District Judge in certain casesIn the case of a borrower residing in the State of Jammu and Kashmir, the application under section 17 shall be made to the Court of District Judge in that State having jurisdiction over the borrower which shall pass an order on such application. 18. Appe .....

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ed 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 Secur .....

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of District Judge under section 17A may prefer an appeal, to the High Court having jurisdiction over such Court, within thirty days from the date of receipt of the order of the Court of District Judge: PROVIDED that no appeal shall be preferred unless the borrower has deposited, with the Jammu and Kashmir High Court, fifty per cent of the amount of the debt due from him as claimed by the secured creditor or determined by the Court of District Judge, whichever is less: PROVIDED further that the .....

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ibunal or the High Court, as the case may be, on the hearing of such application or appeal, may lodge a caveat in respect thereof. (2) Where a caveat has been lodged under subsection (1) (a) the Secured Creditor by whom the caveat has been lodged (hereafter in this section referred to as the caveator) shall serve notice of the caveat by registered post, acknowledgment due, on the person by whom the application has been or is expected to be made under subsection (1); (b) any person by whom the ca .....

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Appellate 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 bee .....

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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 provides an alternative efficacious remedy to the petitioner. The statutory appeal is provided under the said provision. The learned advocates appearing for the parties have relied upon the judgments as enumerated above. 11. In the case of Siemens Engineering & Manufacturing Company of India Limited (sup .....

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not disputed by the learned counsel appearing on behalf of the respondents. 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. That has been laid down by a long line of decisions of this Court ending with N. M. Desai v. Testeels Ltd., C. A. No. 245 of 1970 decided on 17121975 (SC). But, unfortunately, the Assistant Collector did .....

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ave made an elaborate order discussing the arguments of the appellants in the manner of a court of law. But the order of the Collector could have been little more explicit and articulate so as to lend assurance that the case of the appellants had been properly considered by him. If courts of law are to be replaced by administrative authorities and tribunals, as indeed, in some kinds of cases, with the proliferation of Administrative law, they may have to be so replaced, it is essential that admi .....

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ike 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. .....

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by such orders are assured that their case has received proper consideration at the hands of the Customs authorities and the validity of the adjudication made by the Custom authorities can also be satisfactorily tested in a superior tribunal or court. In fact in would be desirable that in cases arising under Customs and Excise laws an independent quasijudicial tribunal, like the Incometax Appellate Tribunal or the Foreign Exchange Regulation Appellate Board, is set up which would finally dispos .....

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of cases. 22. In Harinagar Sugar Mills Ltd. v. Shyam Sundar Jhunjhunwala, (1962) 2 SCR 339 : (AIR 1961 SC 1669), a Constitution Bench of this Court, while dealing with an orderpassed by the Central Government in exercise of its appellate powers under Section 114(3) of the Companies Act, 1956 in the matter of refusal by a company to register the transfer of shares, has held that there was no proper trial of the appeals before the Central Governmentsince no reasons had been given in support of the .....

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s Ltd. v. Union of India, (1966) 1 SCR 466: (AIR 1966 SC 671) the order passed by the Central Government dismissing the revision petition under Rule 55 of the Mineral Concession 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 th .....

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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 giving any reasons and the record did not disclose any apparent ground for the reversal . According to the learned Judges there is a .....

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e concept of a welfare State itself. Selfdiscipline and supervision exclude or at any rate minimize arbitrariness. The least a tribunal can do is to disclose its mind. The compulsion of disclosure guarantees consideration. The condition to give reasons introduces clarity and excludes or at any rate minimizes arbitrariness; it gives satisfaction to the party against whom the order is made; and it also enables an appellate or supervisory court to keep the tribunals within bounds. A reasoned order .....

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ng order will at its best be a reasonable and at its worst be at least a plausible one. The public should not be deprived of this only safeguard. (p. 472 of SCR) : (at pp. 67475 of AIR). There is an essential distinction between a court and an administrative tribunal. A Judge is trained to look at things objectively, uninfluenced by considerations of policy or expediency; but an executive officer generally looks at things from the standpoint of policy and expediency. The habit of mind of an exec .....

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oned 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 m .....

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ion and Development) Act, 1957 read with rules 54 and 55 of the Mineral Concession Rules, 1960. Dealing with the question as to whether it was incumbent on the Central Government to give any reasons for its decision on review this Court has observed : The decisions of tribunals in India are subject to the supervisory powers of the High Courts under Art. 227 of the Constitution and of appellate powers of this Court under Art. 136. It goes without saying that both the High Court and this Court are .....

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Court has referred to the decision in Madhya Pradesh Industries case (AIR 1966 SC 671) (supra) and the observations of Subba Rao, J., referred to above, in that decision have been quoted with approval. After taking note of the observations of Bachawat, J., in that case, the learned Judges have held : After all a tribunal which exercises judicial or quasijudicial powers can certainly indicate its mind as to why it acts in a particular way and when important rights of parties of farreaching conseq .....

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Court has held that the confirming authority, while confirming the findings and sentence of .a courtmartial, and the Central Government, while dealing with an appeal under Section 165 of the Act, are not required to record the reasons for their decision and it has been observed that apart from any requirement imposed by the statute 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 statut .....

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igh 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 obliga .....

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strict Magistrate without recording the reasons. This Court has held: The practice of the executive authority dismissing statutory appeal against orders which prima facie seriously prejudice the rights of the aggrieved party without giving reasons is a negation of the rule of law. (p. 204) (of SCR): (at p. 1304 of AIR). Recording of reasons in support of a decision on a disputed claim by a quasijudicial authority ensures that the decision is reached according to law and is not the result of capr .....

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R). 30. In Woolcombers of India Ltd. case (1974 (1) SCR 504 : AIR 1973 SC 2758) (supra) this Court was dealing with an award of an Industrial Tribunal. It was found that the award stated only the conclusions and it did not give the supporting reasons. This Court has observed : The giving of reasons in support of their conclusions by judicial and quasijudicial authorities when exercising initial jurisdiction is essential for various reasons. First, it is calculated to prevent unconscious, unfairn .....

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sions 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 .....

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1789 of AIR). If courts of law are to be replaced by administrative authorities and tribunals, as indeed, in some kinds of cases, with the proliferation 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 .....

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) (of SCR) : (at p. 1789 of AIR). 32. Tarachand Khatri v. Municipal Corporation of Delhi, (1977) 2 SCR 198 : (AIR 1917 SC 567) was a case where an inquiry was conducted into charges of .misconduct and the disciplinary authority, agreeing with the findings of the Inquiry Officer, had imposed the penalty of dismissal. The said order of dismissal was challenged on the ground that the disciplinary authority had not given its reasons for passing the order. The said contention was negatived by this Co .....

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that even an ordinary concurrence must be supported by reasons. (p. 208) (of SCR) : (at p. 574 of AIR). 33. In Raipur Development Authority v. M/s. Chokhamal Contractors (1989) 2 SCC 721 : (AIR 1990 SC 1426) a Constitution. Bench of this Court was considering the question whether it is obligatory for an arbitrator under the Arbitration Act, 1940 to give reasons for the award. It was argued that the requirement of giving reasons for the decision is a part of the rules of natural justice which are .....

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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 .....

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or its decision, is that such a decision is subject to the appellate jurisdiction of this Court under Article 136 of the Constitution as well as the supervisory jurisdiction of the High Courts under Article 227 of the Constitution and that the reasons, if recorded, would enable this Court or the High Courts to effectively exercise the appellate or supervisory power. But this is not the sole consideration. The other considerations which have also weighed with the Court in taking this view are tha .....

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things from the stand point of policy and expediency. 35. Reasons, when recorded by an administrative authority in an order passed by it while exercising quasijudicial functions, would no doubt facilitate the exercise of its jurisdiction by the appellate or supervisory. authority. But the other considerations,referred to above, which have also weighed with this Court in holding that an administrative authority must record reasons for its decision are of no less significance. These consideration .....

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xercising quasijudicial functions irrespective of the fact whether 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 controver .....

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al 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 judicial or quasijudicial. The Committee expressed the opinion that there are some cases where the refusal to give grounds for a decision may be plainly unfair; and this may be so, even when the decision is final and no further proceedings .....

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. p. 548). In Siemens Engineering Co. case (AIR 1976 SC 1785) (supra) this Court has taken the same view when it observed that the rule requiring reasons to be given in support of an order is, like the. principles of audi alteram partem, a basic principle of natural justice which must inform every quasijudicial process. This decision proceeds on the basis that the two wellknown principles of natural justice, namely (i) that no man should be a Judge in his own cause and (ii) that no person should .....

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st it Was thought that it included just two rules, namely (i) no one shall be a Judge in his own cause (nemo debetesse judex propria causa) and (ii) no decision shall be given against a party without affording him a reasonable hearing (audi alteram partem). Very soon thereafter a third rule was envisaged and that is that quasijudicial enquiries must be held ingood faith, without bias and not arbitrarily or unreasonably. But in the course of years many more subsidiary rules came to be added to th .....

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r 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 gov .....

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c interest that the reasons for the order passed by the administrative authority be recorded in the order and be communicated to the aggrieved party and it may dispense with such a requirement. It may do so by making an express provision to that effect as those contained in the Administrative Procedure Act, 1946 of U. S. A. and the Administrative Decisions (Judicial Review) Act, 1977 of Australia whereby the orders passed by certain specified authorities are excluded from the ambit of the enactm .....

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implication, an administrative authority exercising judicial or quasijudicial functions is required to record the reasons for its decision. 13. In the case of G. Vallikumari (supra), it has been observed as under: 13. We shall now deal with the question whether the Division Bench of the High Court was justified in setting aside the direction given by the Tribunal for reinstatement of the appellant with consequential benefits. Shri Y. S. Rao, who conducted inquiry against the appellant submitted .....

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entation and giving a semblance of indication of application of mind in the context of Rule 120(1)(iv) of the Rules, he directed her removal from service. Therefore, there is no escape from the conclusion that the order of punishment 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 .....

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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 Bench of the High Court dealt with and decided the appellant s challenge to .....

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th errors on the face of the record and pointed out that an order with errors on its face, is a speaking order. (See pp. 187897, Vol. 4, Appeal Cases 30 at 40 of the Report). 15. This Court always opined that the face of an order passed by a quasijudicial authority or even an administrative authority affecting the rights of parties, must speak. It must not be like the inscrutable face of a sphinx . 16. In Harinagar Sugar Mills Ltd. v. Shyam Sunder Jhunjhunwala, the question of recording reasons .....

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n of the original transferee filed another application for transfer of his shares which was similarly refused by the Company. On appeal, the Central Government quashed the resolution passed by the Company and directed the Company to register the transfer. However, in passing the said order, the Government did not give any reason. The Company challenged the said decision before this Court. 17. The other question which arose in Harinagar was whether the Central Government, in passing the appellate .....

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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 Constitu .....

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ral Government upheld the order of the State Government (see AIR p. 1610, para 9). Therefore, this Court insisted on reasons being given for the order. 20. In Mahabir Prasad Santosh Kumar v. State of U.P., while dealing with the U.P. Sugar Dealers Licensing Order under which the licence was cancelled, this Court held that such an order of cancellation is quasijudicial and must be a speaking one. This Court further held that merely giving an opportunity of hearing is not enough and further pointe .....

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Central Government under the then Section 36 of the Central Excises and Salt Act, 1944, held that the Central Government was actually exercising judicial power of the State and in exercising judicial power reasons in support of the order must be disclosed on two grounds. The first is that the person aggrieved gets an opportunity to demonstrate that the reasons are erroneous and secondly, the obligation to record reasons operates as a deterrent against possible arbitrary action by the executive a .....

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justice should not only be done, it should also appear to be done as well. The learned Judges said that a just but unreasoned conclusion does not appear to be just to those who read the same. Reasoned and just conclusion on the other hand will also have the appearance of justice. The third ground is that such awards are subject to Article 136 jurisdiction of this Court and in the absence of reasons, it is difficult for this Court to ascertain whether the decision is right or wrong (see SCC pp. .....

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uasijudicial. 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 o .....

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jurisprudential significance in our constitutional law, Beg, C.J. in a concurring but different opinion held that an order impounding a passport is a quasijudicial decision (SCC p. 311, para 34 : AIR p. 612, para 34). The learned Chief Justice also held, when an administrative action involving any deprivation of or restriction on fundamental rights is taken, the authorities must see that justice is not only done but manifestly appears to be done as well. This principle would obviously demand dis .....

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ly motive for doing so is to keep the reasons away from judicial scrutiny. (See SCC p. 317, para 39 : AIR p. 613, para 39.) 27. In Rama Varma Bharathan Thampuram v. State of Kerala V.R. Krishna Iyer, J. speaking for a threeJudge Bench held that the functioning of the Board was quasijudicial in character. One of the attributes of quasijudicial functioning is the recording of reasons in support of decisions taken and the other requirement is following the principles of natural justice. The learned .....

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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 .....

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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 relied on its previous decisions in Capoor and Siemens Engg. discussed above. 32. In Ram Chander v. Union of India this Court was dealing with the appellate provisions under the Railway Servants (Discipline and Appeal) Rules, 1968 condemned the mechanical way of dismissal of appeal in the context of requirement of Rule 22(2) of the aforesaid Rules .....

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trial Development Corpn. of Maharashtra Ltd. a threeJudge Bench of this Court held that in the present day setup judicial review of administrative action has become expansive and is becoming wider day by day and the State has to justify its action in various fields of public law. All these necessitate recording of reason for executive actions including the rejection of the highest offer. This Court held that disclosure of reasons in matters of such rejection provides an opportunity for an object .....

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ily the authority or the enquiry officer, on consideration of the materials on record, should record reasons in support of the conclusion reached (see SCC pp. 73839, para 22). 35. In M.L. Jaggi v. MTNL this Court dealt with an award under Section 7 of the Telegraph Act and held that since the said award affects public interest, reasons must be recorded in the award. It was also held that such reasons are to be recorded so that it enables the High Court to exercise its power of judicial review on .....

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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 di .....

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he Report.) 38. About two decades thereafter, a similar question cropped up before this Court in S.N. Mukherjee v. Union of India. A unanimous Constitution Bench speaking through S.C. Agrawal, J. confirmed its earlier decision in Som Datt in S.N. Mukherjee case, SCC p. 619, para 47 : AIR para 47 at p. 2000 of the Report and held that reasons are not required to be recorded for an order confirming the finding and sentence recorded by the Court Martial. 39. It must be remembered in this connection .....

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artment; and they are in fact simply instrumentalities of the executive power, provided by Congress for the President as CommanderinChief, to aid him in properly commanding the Army and Navy and enforcing discipline therein, and utilised under his orders or those of his authorised military representatives. 40. Our Constitution also deals with courtmartial proceedings differently as is clear from Articles 33, 136(2) and 227(4) of the Constitution. 41. In England there was no common law duty of re .....

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. 42. Even then in R. v. Civil Service Appeal Board, ex p Cunningham, Lord Donaldson, Master of Rolls, opined 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 observati .....

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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 establish any precedent whatsoever, I am prepared to spell out an obligation on this Board to give succinct reasons, if only to put the mind of Mr Cunningham at rest. I would therefore .....

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n and the other has lost. The House of Lords in Cullen v. Chief Constable of the Royal Ulster Constabulary, Lord Bingham of Cornhill and Lord Steyn, on the requirement of reason held: (WLR p. 1769, para 7) 7. … First, they impose a discipline … which may contribute to such refusals being considered with care. Secondly, reasons encourage transparency … Thirdly, they assist the courts in performing their supervisory function if judicial review proceedings are launched. 46. The .....

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ew . In S.N. Mukherjee this Court relied on the decisions of the US Court in Securities and Exchange Commission v. Chenery Corpn. and Dunlop v. Bachowski in support of its opinion discussed above. 47. Summarising the above discussion, this Court holds: (a) In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially. (b) A quasijudicial authority must record reasons in support of its conclusions. (c) Insistence on .....

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ponent 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) .....

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h about his/her decisionmaking process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism. (l) Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or rubberstamp reasons is not to be equated with a valid decisionmaking process. (m) It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decisionmaking not only makes .....

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the European Convention of Human Rights which requires, adequate and intelligent reasons must be given for judicial decisions . (o) In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of due process . 48. For the reasons aforesaid, we set aside the order of the National Consumer Disputes Redressal Commission and remand the m .....

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inding. The reasons, inter alia, are as under: We have gone through the orders of the District Forum and the State Commission, perused the record placed before us and heard the parties at length. The State Commission has rightly confirmed the order of the District 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 .....

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ate 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 road transport service in public interest. Section 102 of th .....

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es not dispense with the requirement to record reasons while dealing with objections. 19. Modification of the scheme is a quasijudicial function while modifying or cancelling a scheme. The State Government is dutybound to consider the objections and to give reasons either to accept or reject them. The rule of reason is antithesis to arbitrariness in action and is a necessary concomitant of the principles of natural justice. 20. In Siemens Engineering & Manufacturing Co. of India Ltd. v. Unio .....

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rming the demand for differential duty. This was in plain disregard of the requirement of law. The Collector in revision did give some sort of reason but it was hardly satisfactory. He did not deal in his order with the arguments advanced by the appellants in their representation dated December 8, 1961 which were repeated in the subsequent representation dated June 4, 1965. It is not suggested that the Collector should have made an elaborate order discussing the arguments of the appellants in th .....

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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 jus .....

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s that people must have confidence in the judicial or quasijudicial authorities. Unless reasons are disclosed, how can a person know whether the authority has applied its mind or not? Also, giving of reasons minimises the chances of arbitrariness. Hence, it is an essential requirement of the rule of law that some reasons, at least in brief, must be disclosed in a judicial or quasijudicial order, even if it is an order of affirmation. 22. A Constitution Bench of this Court has laid down in Krishn .....

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Reasons are the links between the material, the foundation for their erection and the actual conclusions. They would also demonstrate how the mind of the maker was activated and actuated and their rational nexus and synthesis with the facts considered and the conclusions reached. Lest it would be arbitrary, unfair and unjust, violating Article 14 or unfair procedure offending Article 21. But exceptions are envisaged keeping institutional pragmatism into play, conscious as we are of each other s .....

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efusing or granting permission under subsection (2) and have found that the said power is not purely administrative in character but partakes of exercise of a function which is judicial in nature. The exercise of the said power envisages passing of a speaking order on an objective consideration of relevant facts after affording an opportunity to the concerned parties. Principles or guidelines are insisted on with a view to control the exercise of discretion conferred by the statute. There is nee .....

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s 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 Div .....

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o detailed reasons are required to be given, but some brief reasons should be indicated even in an order affirming the views of the lower forum. 25. In Chairman, Disciplinary Authority, Rani Lakshmi Bai Kshetriya Gramin Bank v. Jagdish Sharan Varshney & Ors. [2009 (4) SCC 240], it was observed that : 8. The purpose of disclosure of reasons, as held by a Constitution Bench of this Court in S.N. Mukherjee v. Union of India (supra), is that people must have confidence in the judicial or quasiju .....

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ormation Commission, it has to hear the parties, apply its mind and record the reasons as they are the basic elements of natural justice. This Court has laid down thus: 17. The State Information Commission is performing adjudicatory functions where two parties raise their respective issues to which the State Information Commission is expected to apply its mind and pass an order directing disclosure of the information asked for or declining the same. Either way, it affects the rights of the parti .....

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cation 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 .....

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ore, 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 India in Ashrafulla Khan s case reported in AIR 2002 SC 629. During the period from 04.12.1995 and 14.01.2002, considering the interpretation with regard to the words overlapping , intersection and corridor restriction of the Hon ble High Court of Karnataka, the Transport Authorities have granted the .....

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find the sufficient grounds is established to support the objections and representations received and made in person opposing the modification of the approved Bellary and Raichur schemes published in Notification No.HD/22/TMP/64 Dated 18.4.64 and TD/140/TMI/82, dated 03.11.1987. Hence, the draft notification modifying the above schemes published in Notification No.HTD/122/TMA97 dated 25.10.2002 is upheld and approved. All the permits held as on 1.4.2002 are saved with the condition that they sh .....

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in accordance with the principles of natural justice in the absence of reasons so as to reach the conclusion that private operators are meeting the genuine demands of the public in excess of the service provided by the STOs., hence, it cannot be said to be sustainable. 16. In the case of Ranjeet Singh (supra), it has been observed as under: 4.Feeling aggrieved by the judgment of the appellate Court, the respondent preferred a writ petition in the High Court of Judicature at Allahabad under Art. .....

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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 .....

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evaluation of evidence or correcting the errors in drawing inferences like a Court of appeal. The High Court has itself recorded in its judgment that considering the evidence on the record carefully it was inclined not to sustain the judgment of the appellate Court. On its own showing, the High Court has acted like an appellate Court which was not permissible for it to do under Art. 226 or Art. 227 of the Constitution. 17. In the case of State of Haryana (supra), it has been observed as under: 1 .....

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ourts below function within the limit of its authority or jurisdiction. 18. This court placed reliance on Nagendra Nath s case in a subsequent judgment in Nibaran Chandra Bag v. Mahendra Nath Ghughu, AIR 1963 SC 1895. The court observed that: 12. ... jurisdiction conferred under Article 227 is not by any means appellate in its nature for correcting errors in the decisions of subordinate courts or tribunals but is merely a power of superintendence to be used to keep them within the bounds of thei .....

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r this case there was, in our opinion, no error of law much less an error apparent on the face of the record. There was no failure on the part of the learned 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 rew .....

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cted 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 made it clear that the High Court cannot interfere with the findings of fact recorded by the subordinate court or the tribunal while exercising its jurisdiction u .....

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s limits. 23. This court over 50 years has been consistently observing that limited jurisdiction of the High Court under Article 227 cannot be exercised by interfering with the findings of fact and set aside the judgments of the courts below on merit. 18. In the case of Sameer Suresh Gupta (supra), it has been observed as under: 6. In our view, the impugned order is liable to be set aside because while deciding the writ petition filed by the respondent the learned Single Judge ignored the limita .....

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any manner the jurisdiction of the High Court under Articles 226 and 227 of the Constitution. (2) Interlocutory orders, passed by the courts subordinate to the High Court, against which remedy of revision has been excluded by CPC Amendment Act 46 of 1999 are nevertheless open to challenge in, and continue to be subject to, certiorari and supervisory jurisdiction of the High Court. (3) Certiorari, under Article 226 of the Constitution, is issued for correcting gross errors of jurisdiction i.e. w .....

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n 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 .....

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nto any lengthy or complicated argument or a longdrawn process of reasoning. Where two inferences are reasonably possible and the subordinate court has chosen to take one view, the error cannot be called gross or patent. (7) The power to issue a writ of certiorari and the supervisory jurisdiction are to be exercised sparingly and only in appropriate cases where the judicial conscience of the High Court dictates it to act lest a gross failure of justice or grave injustice should occasion. Care, c .....

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he suit or proceedings. The High Court may feel inclined to intervene where the error is such, as, if not corrected at that very moment, may become incapable of correction at a later stage and refusal to intervene would result in travesty of justice or where such refusal itself would result in prolonging of the lis. (8) The High Court in exercise of certiorari or supervisory jurisdiction will not convert itself into a court of appeal and indulge in reappreciation or evaluation of evidence or cor .....

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nnul or set aside the act, order or proceedings of the subordinate courts but cannot substitute its own decision in place thereof. In exercise of supervisory jurisdiction the High Court may not only give suitable directions so as to guide the subordinate court as to the manner in which it would act or 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 .....

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sdiction 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 subordinate to it. .....

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d by subsequent Constitution Benches and various other decisions of this Court. (e) According to the ratio in Waryam Singh5, followed in subsequent cases, the High Court in exercise of its jurisdiction of superintendence can interfere in order only to keep the tribunals and courts subordinate to it, within the bounds of their authority . (f) In order to ensure that law is followed by such tribunals and courts by exercising jurisdiction which is vested in them and by not declining to exercise the .....

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t or just because another view than the one taken by the tribunals or courts subordinate to it, is a possible view. In other words the jurisdiction has to be very sparingly exercised. (i) The High Court s power of superintendence under Article 227 cannot be curtailed by any statute. It has been declared a part of the basic structure of the Constitution by the Constitution Bench of this Court in L. Chandra Kumar v. Union of India6 and therefore abridgment by a constitutional amendment is also ver .....

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e 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 machiner .....

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ual cases but should be directed for promotion of public confidence in the administration of justice in the larger public interest whereas Article 226 is meant for protection of individual grievance. Therefore, the power under Article 227 may be unfettered but its exercise is subject to high degree of judicial discipline pointed out above. (o) An improper and a frequent exercise of this power will be counterproductive and will divest this extraordinary power of its strength and vitality. 19. In .....

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arred. Even though a provision under an Act cannot expressly oust the jurisdiction of the Court under Arts. 226 and 227 of the Constitution, nevertheless when there is an alternative remedy available judicial prudence demands that the Court refrains from exercising its jurisdiction under the said constitutional provisions. This was a case where the High Court should not have entertained the petition under Art. 227 of the Constitution and should have directed the respondent to take recourse to th .....

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her judicial scrutiny in the Appellate Forum. With a view to obviate the depositing of 75 per cent of amount as prescribed under Section 21 and with a view to avail the statutory appellate provision, the parties cannot be permitted to invoke extraordinary, plenary, equitable, discretionary writ jurisdiction under Article 226 and 227 of the Constitution of India. Though there is no ban and bar to entertain the petition, the prudence and the practice would, undoubtedly, command that ordinarily whe .....

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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 Const .....

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provisions. In this connection, it would also be interesting to refer the Division Bench decision of this Court delivered by us [Coram: J.N. Bhatt and K.A. Puj, JJ.] in Letters Patent Appeal No. 685 of 2002 on 1922003, wherein, in a similar case, we have taken the same view and we find no reason to make a departure from our earlier view. 5. The learned Advocate for the appellant has taken us through following Judgments in course of his submissions before us and in support of his version that th .....

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rse of the submissions, but they are not attracted and applicable to the facts of this case: 1. Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbai & Others (1998) 8 Supreme Court Cases 1. 2. Dr. Smt. Kuntesh Gupta Vs. Management of Hindu Kanya Mahavidyalaya, Sitapur (U.P.) and Others AIR 1987 S.C. 2186. 3. Harbanslal Sahnia & Anr. Vs. Indian Oil Corporation Ltd & Others 2002 (9) SCALE 724. 4. Rohtas Industries Ltd Vs. Rohtas Industries Staff Union and Others AIR 1976 SC 425. .....

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ther AIR 1961 SC 372. 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 C .....

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nd 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 the provision for appeal and approach the High Court directly by a writ petition under Articles 226 and 227 of the Constitution, challenging the decree/final order on the ground that the order earlier passed, refusing to permit the crossexamination of the deponent, was erroneous. 7. In the fac .....

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ere is another reason why the impugned order should be set aside. If respondent No.1 had any tangible grievance against the notice issued under Section 13(4) or action taken under Section 14, then she could have availed remedy by filing an application under Section 17(1). The expression any person used in Section 17(1) is of wide import. It takes within its fold, not only the borrower but also guarantor or any other person who may be affected by the action taken under Section 13(4) or Section 14 .....

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ble to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc., the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are code unto themselves inasmuch as t .....

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he 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 .....

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for redressal of his grievance. 49. The views expressed in Titaghur Paper Mills Co. Ltd. v. State of Orissa (AIR 1983 SC 603) (supra) were echoed in Assistant Collector of Central Excise, Chandan Nagar, West Bengal v. Dunlop India Ltd. and others (1985) 1 SCC 260 : (AIR 1985 SC 330) in the following words: Article 226 is not meant to shortcircuit or circumvent statutory procedures. It is only where statutory remedies are entirely illsuited to meet the demands of extraordinary situations, as for .....

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ial notice of the fact that the vast majority of the petitions under Article 226 of the Constitution are filed solely for the purpose of obtaining interim orders and thereafter prolong the proceedings by one device or the other. The practice certainly needs to be strongly discouraged. 50. In Punjab National Bank v. O. C. Krishnan and others (2001) 6 SCC 569 : (AIR 2001 SC 3208 : 2001 AIR SCW 2993), this Court considered the question whether a petition under Article 227 of the Constitution was ma .....

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o the correctness of the decision of the High Court and whether the order passed by the Tribunal was correct or not has to be decided before an appropriate forum. 55. 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 .....

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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 certain disputed questions of fact viz. nonreceipt of notice under Section 13(2) of the Act, noncommunication of the order of the Chi .....

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ept the aforesaid contention. It is well settled law that merely because a law causes hardship, it cannot be interpreted in a manner so as to defeat its object. It is also to be remembered that the Courts are not concerned with the legislative policy or with the result, whether injurious or otherwise, by giving effect to the language used nor it is the function of the Court where the meaning is clear not to give effect to it merely because it would lead to some hardship. It is the duty imposed o .....

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sposed of in motion hearing, the Court is required to record in brief its ground for doing so. However, nonsupply of grounds cannot be characterized as error apparent . It could be a ground for the applicant to assail the order in appeal, but not to invoke review jurisdiction of this Court. Recourse to Order 41(47), R.1 of CPC by the applicant is wholly misconceived and his application deserves dismissal with costs. 26. In the case of Tajender Singh Ghambhir (supra), it has been observed as unde .....

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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 t .....

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bunal 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. 28. 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 .....

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s enunciated when the Act was initially made. We fail to understand as to how such inconsistency will render the Act unconstitutional. The objects and reasons are not voted upon by the legislature. If the enactment is otherwise within the constitutionally permissible limits, the fact that there is a divergence between the objects appended to the Bill and the tenor of the Act, in our opinion, cannot be a ground for declaring the law unconstitutional. 75. In view of our abovementioned conclusions, .....

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esult, all the writ petitions either filed before this Court or filed before the Madras and Gujarat High Courts and the appeals of the borrowers stand dismissed. The appeals of the CREDITORS are allowed. Each of the writ petitioners/borrowers shall pay costs to the respective CREDITORS calculated at 1% of the amount outstanding 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 no .....

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le 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 .....

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aised by the petitioner even in this petition are entirely on merits of the main Securitization Application. The record indicates that the petitioner as well as the Bank were heard extensively by the Tribunal and therefore, considering the same, when the petitioner has an alternative efficacious remedy, the present petition under Article 226 and/or Article 227 of the Constitution of India does not deserve to be entertained keeping in mind the ratio laid down by the Apex Court in the case of Unit .....

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