TMI Blog2008 (10) TMI 686X X X X Extracts X X X X X X X X Extracts X X X X ..... t report of the material and without any authority to do so - Government could not have ignored the test and analyst report of the Department of Civil Engineering and Soil Mechanics Division of Andhra Pradesh University which was a relevant piece of evidence. HELD THAT:- In the instant case the expression earth is missing. The actual clause reads as follows: ''The material used for constructing embankment by earth filling shall be earth, morrum, gravel and mixture of these or any other material approved by the engineers. The materials shall be free from lumps, clouds, boulders or rock pieces roots and vegetations, harmful salts and chemicals, organic material, silt, fine sand expansive clays in order to provide stable embankment. Further, in the said specification, it is clearly mentioned that the material for embankment shall be as obtained from a particular source with the preference given to material becoming available from nearby road excavation under the same contract or any other excavation under the same contract.'' It is noticed the High Court has relied on certain records which purportedly contain the inspection notes of the sites from where the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stand to reason. The report was available on record and was not by an ordinary authority, and was by the Department of Andhra Pradesh University. The High Court did not accept the view expressed by a ld Single Judge while disposing of writ petition filed by one of the sub contractors M/s Gayatri Projects Ltd. Though that order was not challenged by the Department, the Division Bench thought that the decision was not proper. In any event, that question is of no relevance in the present case. The High Court rightly observed that since the amendments referred to, were introduced after the expiry of the contract period they were really of non consequence. The basic principles of natural justice seem to have been disregarded by the State Government while revising the order. It acted on materials which were not supplied to the appellants. Additionally the High Court for the first time made reference to the report/inspection notes which was not even referred to by the State Government while exercising revisional power. The expressions natural justice and legal justice do not present a water-tight classification. It is the substance of justice which is to be secured by b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant, the material required for the purpose of execution of the contract in terms of the specifications prescribed under the contract is earth, morrow gravel and mixture of these or any other material approved by the BHEL. The appellant had obtained rights for excavation of good earth from the ryots of patta lands in the vicinity as well as from the quarry lease holders. Each appellant was supplying the materials from the source in which they obtained right of excavation of materials. Huge quantity of these materials was supplied under the contract. The Assistant Director of Mines and Geology required BHEL to show cause as to why action should not be initiated to realize a sum of money towards seigniorage fee which includes five times penalty over and above the normal seigniorage fee. The Assistant Director required BHEL to produce documentary evidence, if any, with regard to the source from where the materials had been procured alongwith the permits issued by the Department. BHEL filed a detailed reply disputing the liability in the matter. It was indicated that the requisite application for allotment of quarries and other formalities were to be done directly by the sub contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the High Court. 5. The first stand was that the Government ought not to have passed the impugned order clubbing the companies with the other sub contractors inasmuch as demands raised by the Deputy Director in respect of each party were totally different. Quantity and the nature of materials supplied by each of them and the sources were different and merits of each case was to be gone into separately and it was also submitted that the order of the State Government was passed on surmises and assumptions and indicated non application of mind. 6. It was also submitted that seigniorage fee on the total quantity of earth materials supplied by the company was levied in utter disregard of the analyst report of the material and without any authority to do so. Finally, it was submitted that copy of the report submitted by the Deputy Director of Mines and Geology who was purportedly instructed to inspect the area to ascertain the nomenclature of the materials supplied by the sub contractors to the BHEL was not at point of time supplied to the affected parties. It was submitted that the Government could not have ignored the test and analyst report of the Department of Civil Eng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hem under the agreement with BHEL. 11. Stand of the appellants was that the bulk of the materials used by the appellants-companies was earth and the same was not subject to seigniorage fee. It was therefore contended that the initiation of suo motu revisional power and the orders passed are illegal as the order ignored the materials available on record. 12. It was pointed out that what was supplied was gravel from the quarry and the ordinary earth from the patta land and therefore the argument that the total material received by BHEL was partly gravel from sources of foot hills and partly ordinary clay from the tank beds and, therefore, the material is subject to seigniorage fee was vitiated for the reason that there was no material supplied by one of the appellants i.e. M/s Nagarjuna Construction Co. Ltd. from the foothills and the tank bed lands. 13. The State's stand as highlighted before the High Court was about the so-called collusion between the concerned Deputy Director and the appellants and his giving No Objection for the release of the amounts by BHEL. The High Court referred to para 3.03.01 of the specifications of the contract. We will deal with this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order cannot be set aside on that score. 16. The High Court also did not find any substance in the plea relating to non consideration of the test and analysis report of the Civil Engineering Department of Andhra University. It was held that it was a self service devise adopted by the appellant. Therefore, it was held that since the Government had arrived at to its decision after hearing the parties no interference is called for. 17. So far as the question of penalty is concerned, it was held that though mens rea is an essential ingredient but the factual position left no manner of doubt that the appellant was not acting bona fide. The High Court did not also attach importance to the stand taken by the Department in the earlier writ petitions. Accordingly, all the writ petitions were dismissed. 18. The basic stand of the appellants in the appeals is that the basic principles of natural justice have not been followed in the present case. The authorities have acted on certain materials which were collected behind the back of the appellants and the reports submitted by certain authorities. The High Court's conclusion that no prejudice was caused by non supply is real ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hardly any earth which does not contain fine particles or other minerals in respect of which seigniorage fee is liable to be charged. 23. Learned counsel for the State, on the other hand, supported the judgment of the High Court and stated that the conduct of the appellants disentitled them from getting inequitable relief. Further more, there was no foundation in the plea that what the State Government had stated earlier would act as an estoppel. 24. We shall first deal with the plea relating to incorrect reflection of the conditions in the contract. The High Court has referred to para 3.03.01 of the specifications of the contract. It reads as follows: The material used for constructing the embankment by earth filling shall be Morram, Gravel, a mixture of these or any other material approved by the Engineer. 25. This is not the correct quotation. In the instant case the expression earth is missing. The actual clause reads as follows: The material used for constructing embankment by earth filling shall be earth, morrum, gravel and mixture of these or any other material approved by the engineers. The materials shall be free from lumps, clouds, boulders or rock ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t simply earth but gravel and clay. The High Court found the explanation to be convincing. What the High Court seems to have overlooked is that there was a specific admission in the earlier cases. It is also not borne out from the records as to when the so called inspection notes of the Deputy Director and the Assistant Director were made and what was the nature of their report. The High Court's observation that the counter affidavit earlier was on account of inadvertence is without any basis. The observations of the High Court that there was no question of sending the samples to the Department of Civil Engineering are also unsustainable. As a matter of fact it is not a case that the appellants themselves had sent the samples. In fact, the samples were sent by the Department apart from the samples being sent by the appellants. The High Court's observations that they were rightly ignored by Government do not stand to reason. The report was available on record and was not by an ordinary authority, and was by the Department of Andhra Pradesh University. 28. The High Court did not accept the view expressed by a learned Single Judge while disposing of writ petition No. 4579 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fair or unreasonable that no reasonable person would have taken that action, can the court intervene. To quote the classic passage from the judgment of Lord Greene, M.R. in Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation 1947 (2) all All ER pp.682H-683A) It is true the discretion must be exercised reasonably. Now what does that mean? Lawyers familiar with the phraseology commonly used in relation to exercise of statutory discretions often use the word 'unreasonable' in a rather comprehensive sense. It has frequently been used and is frequently used as a general description of the things that must not be done. For instance, a person entrusted with the discretion must, so to speak, direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may truly be said, and often is said, to be acting 'unreasonably'. Similarly, there may be something so absurd that no sensible person could ever dream that it lay within the powers of the authority. 32. The conclusions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utory recognition of this principle found its way into the Magna Carta . The classic exposition of Sir Edward Coke of natural justice requires to vocate interrogate and adjudicate . In the celebrated case of Cooper v. Wandsworth Board of Works 1963 (143) ER 414, the principle was thus stated: Even God did not pass a sentence upon Adam, before he was called upon to make his defence. Adam says God, where art thou has thou not eaten of the tree whereof I commanded thee that though should not eat. Since then the principle has been chiselled, honed and refined, enriching its content. Judicial treatment has added light and luminosity to the concept, like polishing of a diamond. 36. Principles of natural justice are those rules which have been laid down by the Courts as being the minimum protection of the rights of the individual against the arbitrary procedure that may be adopted by a judicial, quasi-judicial and administrative authority while making an order affecting those rights. These rules are intended to prevent such authority from doing injustice. 37. What is meant by the term 'principles of natural justice' is not easy to determine. Lord Summer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... JMC 81, where the learned and noble Lord Chancellor observed as follows: No doubt, in the absence of special provisions as to how the person who is to decide is to proceed, law will imply no more than that the substantial requirements of justice shall not be violated. He is not a judge in the proper sense of the word; but he must give the parties an opportunity of being heard before him and stating their case and their view. He must give notice when he will proceed with the matter and he must act honestly and impartially and not under the dictation of some other person or persons to whom the authority is not given by law. There must be no malversation of any kind. There would be no decision within the meaning of the statute if there were anything of that sort done contrary to the essence of justice. Lord Selbourne also added that the essence of justice consisted in requiring that all parties should have an opportunity of submitting to the person by whose decision they are to be bound, such considerations as in their judgment ought to be brought before him. All these cases lay down the very important rule of natural justice contained in the oft-quoted phrase 'justice shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scribe natural justice as 'a duty to act fairly'. In fairmount Investments Ltd. v. Secretary to State for Environment 1976 WLR 1255 Lord Russell of Willowan somewhat picturesquely described natural justice as 'a fair crack of the whip' while Geoffrey Lane, LJ. In Regina v. Secretary of State for Home Affairs Ex Parte Hosenball 1977 (1) WLR 766 preferred the homely phrase 'common fairness'. 41. How then have the principles of natural justice been interpreted in the Courts and within what limits are they to be confined? Over the years by a process of judicial interpretation two rules have been evolved as representing the principles of natural justice in judicial process, including therein quasi-judicial and administrative process. They constitute the basic elements of a fair hearing, having their roots in the innate sense of man for fair-play and justice which is not the preserve of any particular race or country but is shared in common by all men. The first rule is 'nemo judex in causa sua' or 'nemo debet esse judex in propria causa sua' as stated in (1605) 12 Co.Rep.114 that is, 'no man shall be a judge in his own cause&# ..... X X X X Extracts X X X X X X X X Extracts X X X X
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