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1972 (3) TMI 101

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..... ration pursuant to the nationalisation of the former Central Bank of India Ltd., he applied for a passport and he was issued a passport bearing No. 1-797339 dated July 28, 1969 valid upto July 27, 1972. On October 18, 1969 by an Office Order he was appointed as an Accountant in the London Branch of respondent No. 3 (Central Bank of India) ; he joined the London Office in that capacity on October 24, 1969 and worked as such Accountant upto March 31, 1970. On April 1, 1970 he was promoted as Acting Manager of London Office on resignation of one Sami J. Patel, who was till then the Manager of the London Office, and he was confirmed as the Manager of the London Office on May 1, 1970. When he first went to London in October 1969 he had taken his wife and two minor children with him, who are still residing there. By a letter dated December 30, 1970 addressed by one Mr. P. Krishna Iyer, Officer on Special Duty in the Head Office at Bombay of respondent No. 3, the petitioner was called upon to give explanation in respect of certain alleged irregularities and certain unauthorised actions in respect of certain accounts maintained in the London Office; the petitioner gave his explanation abou .....

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..... enquiry was held by one S.R. Tipnis, Regional Manager, Maharashtra into these charges levelled against the petitioner and after completing the enquiry on July 21, 1971, the Enquiry Officer submitted his report on August 9, 1971. It may be stated that the petitioner's explanation regarding the second and third charges was accepted and he was completely exonerated in that behalf but so far as the first charge was concerned, the Enquiry Officer took the view that the decisions in connection with the operation of the account of M/s. Ahmed Bros, had been taken by the petitioner in joint consultation, deliberation and concurrence of his three colleagues as per instructions contained in the Order of Appointment of the petitioner as the Manager of London Branch and as such the petitioner alone could not be held responsible for taking such decisions and for the consequences thereof but that as an executive head of the branch he was responsible for not making adequate arrangements to maintain close follow-up of the advances through controlled checks. However, the Enquiry Officer unhesitatingly came to the conclusion that the actions taken by the petitioner in respect of the account of M .....

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..... ately. Pursuant to this letter the petitioner started working as Joint Superintendent in the Personnel Department from November 22, 1971. While he was so working he received a letter dated November 25, 1971 from respondent No. 2 informing him that it had been decided to impound his passport under Section 10(3)(c) of the Passports Act, 1967 and that he should surrender his passport to the office within a week from the date of receipt of the letter by him. The petitioner was further informed by that letter that as the decision to impound his passport had been taken by the Central Government no appeal would lie against it. By his attorney's letter dated December 16, 1971 addressed to respondent No. 2, copy of which was also forwarded to the Secretary, Ministry of External Affairs, Government of India, New Delhi, the petitioner after setting out the relevant facts challenged the aforesaid decision of the Central Government on various grounds and demanded withdrawal or cancellation of the said decision and in dpault threatened legal action and since the demand for justice was not conceded, he approached this Court on February 4, 1972 with the present petition whereby the decision o .....

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..... was taken or there being any non-application of mind on the part of the Central Government. It was, however, pointed out by me to Mr. Joshi that the original decision or order of the Central Government will have to be produced in the case in order to ascertain whether this particular ground, now set out in the affidavit in reply, was present to the mind of the Central Government when it took the impugned decision and the affidavit in reply did not throw any light on that aspect of the matter. After scrutinising the relevant files Mr. Joshi made a statement from the Bar that the decision to impound the passport of the petitioner had been taken by the Central Government on June 11, 1971 though the same was communicated to the petitioner by letter dated November 25, 1971. In view of this fact stated by Mr. Joshi the question assumed importance as to whether the specific ground as mentioned in the affidavit was present to the mind of the Central Government on June 11, 1971 and when this aspect was specifically Put to him, Mr. Joshi, though with some reluctance, agreed to produce the original decision, and the relevant noting containing the decision from the concerned file was then ext .....

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..... 0(5)(c) was within the subjective satisfaction of the Central Government, to file a supplementary affidavit indicating material on the basis of which the impugned decision had been taken and accordingly a supplemental affidavit of Shri Kazi dated March 4, 1972 has been filed in the case. Since such material was disclosed for the first time by way of supplemental affidavit dated March 4, 1972, the petitioner has filed an affidavit in rejoinder dated March 10, 1972 setting forth his contentions in regard to such material so disclosed. 6. In view of what has been stated above, Mr. Sorabjee confined his challenge to the impugned decision to four grounds: (a) that the impugned decision or order was arrived at or passed in breach of the principles of natural justice and fair play, inasmuch as, no hearing or opportunity to have his say was given to the petitioner and since the impugned decision or order is fraught with civil consequences, the non-observance of the principles of natural justice and fair play must lead to quashing of the same; (b) that there was no material before the Central Government justifying the impounding of the petitioner's passport in the interests of the ge .....

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..... n passport-holders similarly situated discrimination was implicit and, therefore, the relevant provision was clearly violative of Article 14. He, however, made it clear that he was not interested in pressing the point of vires of Section 10(5)(e) of the Act if the Court was inclined to hold that principles of natural justice had to be followed before ordering the impounding of the passport and that the decision of the authority was subject to a judicial scrutiny in the manner indicated above. 7. On the other hand, Mr. Joshi appearing for respondents Nos. 1 and 2 contended that the decision required to be taken by the Passport Authority under Section 10(3) of the Act was an administrative decision guided by consideration of policy and as such the principles of natural justice or fair play were not. attracted and therefore it was not incumbent on the part of the Central Government to give any hearing to the petitioner before taking the impugned decision and as such the same could not be challenged on that ground. Mr. Joshi further contended that the entire matter covered by Section 10(5)(c) of the Passports Act, 1967 was within subjective satisfaction of the passport authority and .....

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..... st ground on which the impugned decision has been challenged by Mr. Sorabjee has been that the same was arrived at in breach of the principles of natural justice and fair play, inasmuch as, admittedly before arriving at that decision, no hearing was given to the petitioner nor was any opportunity given to him to have his say in the matter by the Central Government and according to Mr. Sorabjee, this was not a case where a passport was to be initially granted or refused to be granted but this was a case of impounding a passport which had been already granted to the petitioner which was valid upto July 27, 1972 and since the impugned decision entailed very serious civil consequences it was absolutely essential on the part of the Central Government to have given the petitioner prior notice and an opportunity to have his say in the matter before his passport was decided to be impounded and as such the non-observance of the principles of natural justice and fair play should render the impugned decision invalid or void. Mr. Sorabjee assumed for the purpose of argument that the decision to be taken by the Central Government under Section 10(5)(c) of the Act was an administrative decision, .....

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..... ity exercising quasi judicial or judicial power. The English decision on which Mr. Sorabjee has relied was a case under the Gaming Act, 1968 which required the Gaming Board for Great Britain to have regard to certain matters specified in Schudle 2, para. 4(5) before issuing or refusing to issue a certificate of consent for the purpose of application for licence and the question raised was whether the Board was obliged to observe the rules of natural justice and Lord Denning, Master of Kolls, held that the Board was bound to observe the rules of natural justice. On p. 534 of the Report the learned Law Lord observed as follows: ...The Act provides in terras that, in determining whether to grant a certificate, the board 'shall have regard only' to the matters specified. It follows, I think, that the board have a duty to act fairly. They must give the applicant an opportunity of satisfying them of the matters specified in Schudle 2, para 4 (5). They must let him know what their impressions are so that he can disabuse them. But I do not think that they need quote chapter and verse against him as if they were dismissing him from an office (Ridge v. Jialdwin [1963] 2 All E.R. 6 .....

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..... hi for respondents Nos. 1 and 2 did not seriously dispute that the impugned decision has entailed civil consequences qua the petitioner, inasmuch as, the same has prejudicially affected the personal liberty guaranteed to the petitioner under Article 21 of the Constitution and has made it impossible for him to leave this country. But he contended that even so it was not as if that in the case of every administrative decision involving civil consequences, principles of natural justice were required to be followed. In the first place, according to him, rules of natural justice are not precise rules of unchanging content, their scope varies according to the context and secondly these rules can operate in areas not covered by any law validly made i.e. these cannot supplant the law but supplement it. In other words, in areas covered by any law the particular enactment may cast a duty to apply the principles of natural justice or it may exclude either expressly or by necessary implication the applicability of principles of natural justice. In support of his submission he relied upon the following passage occurring under the heading 'Natural Justice' in S.A. de Smith's Constitu .....

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..... ision or not must depend upon whether the rule audi alteram partem could be consistently read with the provision contained in Section 10(3)(c) or whether the application of that rule has been either expressly or by necessary implication excluded by the enactment and, according to him, having regard to the language of the relevant provision and the subject-matter dealt with by it, it will have to be held in this case that the rules of natural justice have been excluded and if they were so excluded the impugned decision could not be challenged on the ground that hearing had not been given to the petitioner before the same was arrived at. 13. There could be no dispute about the propositions that have been enunciated by the Supreme Court in the aforesaid decision in J.N. Sinha's case but the question is whether the rules of natural justice, particularly the rule audi alteram partem has been excluded by the provisions of the Passports Act especially when the passport authority is exercising the power conferred on it to impound a passport already issued under Section 10(3) of the Act. Mr. Joshi fairly stated that there was no exclusion of the rules of natural justice in express te .....

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..... holder of the passport or other travel document has been made by any such Court and the passport authority is satisfied that a warrant or summons has been so issued or an order has been so made. Sub-section (4) provides for cancellation or revocation of a passport or travel document on the application of the holder thereof; and Sub-section (5) on which, some reliance was placed by Mr. Joshi runs as follows: (5) Where the passport authority makes an order varying or cancelling the endorsements on, or varying the conditions of, a passport or travel document under Sub-section (1) or an order impounding or revoking a passport or travel document under Sub-section (3), it shall record in writing a brief statement of the reasons for making such order and furnish to the holder of the passport or travel document on demand a copy of the same unless in any case, the passport authority is of the opinion that it will not be in the interests of the sovereignty and integrity of India, the security of India, friendly relations of India with any foreign country or in the interests of the general public to furnish such a copy. The other material provision which may be noticed at this stage .....

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..... e subject-matter dealt with by this provision pertains to aspects like sovereignty and integrity of India, the security of India and friendly relations of India with any foreign country and when the decision to impound a passport is to be taken having regard to one or the other of such aspects how could a hearing be given to the holder before taking the decision? He thus urged that application of the rule of audi alterant partem has been excluded. He further derived strength to his aforesaid argument by relying upon Sub-section (5) of Section 10 in which the same phraseology has been used as in Clause (o) of Sub-section (3) and the same aspects had to be borne in mind by the authority while deciding the question as to whether the statement of reasons recorded for impounding of a passport should be furnished to the party concerned or not. He pointed out that under Section 10(5) the passport authority making an order of impounding or revoking a passport under Section 10(J) is required to record in writing a brief statement of the reasons for making such order and to furnish to the holder of the passport on demand a copy of the same unless the passport authority is of the opinion that .....

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..... ot apply and was excluded by necessary implication and as such in the same way having regard to the subject-matter dealt with by Section 10(5)(c) it should be held that the application of the said rule has been excluded by necessary implication. 15. Apart from decided cases to which I will come a little later, the question whether the rules of natural justice are excluded by necessary implication or not must depend upon the true and proper construction of the relevant provision of the enactment. As has been observed by the Supreme Court in J.N. Sinha's case whether the exercise of a power conferred should be made in accordance with any of the principles of natural justice or not depends upon the express words of the provision conferring the power, the nature of the power conferred, the purpose for which it is conferred and the effect of the exercise of that power. In the present case the express words of the relevant provision admittedly do not exclude the operation of audi alterant partem rule; the nature of the power conferred on the passport authority is to impound or revoke a passport already granted; the purpose for which it is conferred is to prevent a holder of the pa .....

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..... y so to do occurring in Clause (c) which according to him suggest that the entire matter covered by Clause (c) has been left to the subjective decision of the passport authority; in other words, these words suggest that not merely the necessity or expediency to impound a passport has been left to the subjective satisfaction of the passport authority but even the question whether it is necessary to do so on the grounds mentioned therein has also been left to the subjective satisfaction of the passport authority and as such no question of giving a hearing arises. In the first place, as will be pointed out later while discussing the second contention of Mr. Sorabjee, it is not possible in view of the Supreme Court's decisions in Barium Chemical's case and Rohtas Industries' case to accept the submission that the words relied upon have the effect of leaving the entire matter covered by el. (c) to the subjective satisfaction or subjective decision of the passport authority; these words undoubtedly show that the aspect of necessity or expediency to impound a passport has been left to the subjective satisfaction of the passport authority but the exercise of the power is condi .....

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..... es of the Supreme Court upon the same section and upon the same issue, namely, -whether a council was not competent to perform its duties. That decision laid down As a general rule that words such as 'where it appears to...'or 'if it appears to the satisfaction of...'or 'if the...considers it expedient that...' or'if the... is satisfied that...' standing by themselves without other words or circumstances of qualification, exclude a duty to act judicially.' Their Lordships disagree with this approach. These various formulae are introductory of the matter to be considered and are given little guidance upon the question of audi alteram partem. The statute can make itself clear upon this point and if it does cadit quaestio. If it does not then the principle stated by Byles J. in Cooper v. Wandsworth Board of Works must be applied. He said : A long course of decision, beginning with Dr. Bentley's case (1723) 1 Str. 557; 8 Mod. Rep. 148 and ending with some very recent oases, establish, that, although there are no positive words in the statute requiring that the party shall be heard, yet the justice of the common law will supply the omissi .....

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..... acticable because of a paramount need for secrecy, or because the number of persons affected is so large, or because delay would make it impossible to take urgent remedial on preventive action; or there may be adequate substitutes (for example, inspection, tests, interviews) for a hearing. Again, it may be impossible to obtain certain information at all (for example, highly confidential reports) if it is known that disclosure to the person concerned (for example, an applicant for a licence or a company tendering for a contract) will take place. Even where a duty to observe natural justice is applicable, the scope of the obligation imported may be modified in the public interest or the interests of the parties -- for example, where it would be harmful to an applicant for social security benefit to have a distressing medical report disclosed to him, or where the interests of infants would suffer if a psychiatric report made to the court were to be publicized. I may also refer to a decision of the Privy Council in the case of De Verteuil v. Knaggs [1918] A.C. 557 where observations to the similar effect have been made by Lord Parmoor. In that case under Section 203 of the Immigrati .....

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..... S.A. de Smith's 'Constitutional and Administrative Law', which I have quoted above, and having regard to the observations of Lord Parmoor in I)e Yerteuil v. Knaggs it seems to me clear that unless special circumstances are made out, such as where there is a paramount need for secrecy or where a decision may have to be given on an emergency, when promptitude is of great importance, or where delay would make it impossible to take urgent remedial or preventive action or where obstructive conduct on the part of the person affected is apprehended or where there may be adequate substitutes (such as inspection, tests, interviews) for a hearing, etc. the normal rule of audi alter am partem will be attracted and will have to be followed, especially when the authority concerned is taking a decision prejudicially affecting the fundamental right of the person concerned. In the instant case, there is no suggestion, whatsoever that there existed any such special circumstances; in fact, though the impugned decision was taken on June 11, 1971 the same was communicated to the petitioner on November 25, 1971, a circumstance which negatives the element of urgency or emergency. Therefore, .....

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..... for further extension of their stay until November and December, 1968 to complete their studies, the Home Secretary rejected the applications and the Court of Appeal held that as the plaintiffs had no right to an extension of their stay, the Home Secretary was under no duty to give them a hearing or to hear their representation and by rejecting their applications had not infringed the precepts of natural justice. However, it will be interesting to note that on the question as to whether it would be obligatory on the part of the Home Secretary to give a hearing if the permission to stay already granted were to be revoked before the time mentioned therein were to expire, this is what Lord Denning has observed (p. 171) : ...He (alien) has no right to enter this country except by leaves and, if he is given leave to come for a limited period, he has no right to stay for a day longer than the permitted time.If his permit is revoked before the time limit expires, he ought, I think, to be given an opportunity of making representations: for he would have a legitimate expectation of being allowed to stay for the permitted time. Except in such a case, a foreign alien has no right -- and, .....

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..... holder of the passport if in its opinion it was not in the interests of sovereignty and integrity of India, security of India, friendly relations of India with any foreign country or in the interests of general public to do so; he urged that if reasons could not be disclosed on grounds mentioned in Section 10(5), then obviously no hearing could be given to the holder whose passport was sought to be impounded under Section 10(3)(c). According to him, identical phraseology having been used in the two provisions it was clearly intended that no hearing was to be given in a case falling under Section 10(5)(c). It is not possible to accept this submission for more than one reason. If the provision contained in Section 10(5) is carefully scrutinized two aspects stand out very clearly. In the first place, the matter dealt with by Sub-section (5) is entirely different from the matter dealt with by Clause (c) of Sub-section (3). In Clause (c) of Sub-section (3) four grounds have been set out for which a passport authority can impound a passport if that authority deems it necessary so to do, while under Sub-section (5) the very grounds have been mentioned in the latter part thereof, as being .....

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..... usion by necessary implication, the normal rule of giving a hearing will apply. 19. I may now refer to the provisions of Section 11 of the Act which deal with appeals, which, in my view, have a bearing on the question which I am considering at the moment. As already pointed out Section 11 provides for an appeal being preferred by any person aggrieved by an order passed by the passport authority under Section 10(5) of the Act to the prescribed appellate authority, subject to the proviso that no appeal shall lie against any order made by the Central Government. The material provision occurs in Sub-section (5) of Section 11 and the proviso thereto. Section 11(5) provides as follows: In disposing of an appeal, the appellate authority shall follow such procedure as may be prescribed: Provided that no appeal shall be disposed of unless the appellant has been given a reasonable opportunity of representing his case. Rule 12 of the Passports Rules, 1967 indicates the appellate authorities under the Act and from the table given under that rule, it will appear clear that against an order made by the passport authority, other than the Central Government, under Sub-section (5) of Se .....

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..... limited judicial scrutiny, namely the Court could see whether the condition upon which power was being exercised existed, in the sense that the material on the basis of which power was sought to be exercised had rational connection with the ground on which the decision was to he taken and he urged that in this case the material on the basis of which Government took the impugned decision, which material has now been disclosed in the supplemental affidavit dated March 4, 1972, was such that no reasonable body of persons could come to the conclusion that it was in the interests of general public to impound the petitioner's passport. In other words, the material disclosed had no rational nexus with the ground on which the impugned decision was taken and as such the same was liable to be quashed. On the other hand, Mr. Joshi contended that the entire matter covered under Clause (c) of Sub-section (5) of Section 10 has been left to the subjective satisfaction of the Central Government and that such subjective decision of the Central Government could not be called in question by any Court of law. In the alternative he contended that if the Court came to the conclusion that such decisi .....

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..... y was given to Hind Lamps notwithstanding the licence that had been granted to the petitioner company which action was challenged. With regard to the aforesaid provision the High Court had taken a view that the State Government was the sole judge of the question whether direct supply of energy to Hind Lamps was: or was not in the public interest and that the test was of a subjective nature and no objective test was contemplated. This view of the High Court was expressly disapproved by the Supreme Court in para. 10 and the correct position was set out in para. 11 of the judgment. The relevant paras. 10 and 11 run as follows (p. 25) : By the amendment made by U. P, Act 80 of 1961 electrical energy may be supplied by the State Government or the State Electricity Board within the same area in respect of which a license is granted only if the State 'Government deems such supply 'necessary in public interest'. The High Court observed that 'the State Government was the sole judge of the question whether direct supply of energy to Hind Lamps was or was not in the public interest, The test is of a subjective nature, no objective test being contemplated. Thus it is not ope .....

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..... there be prima facie evidence on which a reasonable body of persons may hold that it is in public interest to impound the passport, the requirements of the statute could be said to have been fulfilled, but the satisfaction of the Government that impounding of a passport is necessary in the interests of general public would in appropriate eases be not excluded from judicial review in a limited sense that is to say, if challenged the Government will have to show prima facie that the exercise of the power was necessary in public interest by giving some clue as to the material on the basis of which the decision was taken and by further showing that such material was prima facie relevant and germane and had rational nexus with that ground. It is further well settled that if the nexus or connection between such material and the ground is problematic or fanciful or too remote, it is no real nexus at all and the decision will be liable to be set aside (vide Anant Janardhan v. M.A. Deshmukh (1965) 68 Bom. L.R. 256). That being the position in law, it will be necessary for me to consider the material that has been disclosed by the respondents in Shri Kazi's supplemental affidavit dated .....

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..... ill appear clear that in the first place it has been stated that during the regime of Sami J. Patel, who was the Manager of London Branch upto March 31, 1970, very serious frauds were detected in the London Branch in or about April 1970 and that the transactions involved in the said frauds related to unauthorised and fraudulent guarantees issued by Sami J. Patel to the tune of ₹ 2.15 crores; secondly, fraud cases (meaning presumably prosecutions) have been launched in London Courts in respect of the said frauds allegedly committed by Sami J. Patel and thirdly, the Central Government is interested in successfully prosecuting the said fraud cases and that is in the interests of general public, inasmuch as, the alleged frauds pertain to the funds of a nationalised bank. There could be no dispute that the successful prosecution of the fraud cases in London would be in the interests of the general public, inasmuch as, the funds involved in these fraud cases pertain to one of the nationalised banks like the Central Bank. So far there is no difficulty, but the question is whether the petitioner's connection with the said successful prosecution of fraud cases against Sami J. Pate .....

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..... ndue favour were reported to be friends of Sami J. Patel whom Sami J. Patel had himself favoured cannot carry the ease against the petitioner any further. It is thus clear that the so-called irregularities or unauthorised dealings noted by the Reserve Bank to which a reference is made in the supplemental affidavit being unconnected with the alleged frauds committed by Sami J. Patel, would become irrelevant in the context of successful prosecution of fraud cases against Sami J. Patel. The only other factor is that at the material time i.e. when the alleged frauds were committed by Sami J. Patel the petitioner was an Accountant in London office which could only mean that he might have or at the most must have come to know of the fraudulent dealings of Sami J. Patel, but surely his having knowledge thereof -- a feature which would be common to several subordinate officers who were then and are even now working in that branch -- cannot render his presence in United Kingdom such as would prejudicially affect or jeopardise the successful prosecution of fraud cases against Sami J. Patel. In view of this position which emerges from the examination of the material that has been placed by S .....

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..... eedings pending in London Courts and such evidence may adversely affect the successful prosecution of the fraud cases, then certainly the petitioner's detention in this country would rather be contrary to public interests, for such detention would amount to interference with administration of justice and consequently would be undermining general public interests. However, as stated earlier, no material has been placed before the Court as to how and in what manner the petitioner's continued presence in the United Kingdom is likely to jeopardise or prejudicially affect the successful prosecution of the fraud cases in London, that is to say, what kind of activities the petitioner is likely to indulge in if he is allowed to go and stay in the United Kingdom has not been stated anywhere in the affidavit and therefore it is clear to my mind that apprehended consequences are problematic, fanciful and too remote and as such the nexus is unreal. In other words, the material on which the impugned decision was taken by the Central Government was such that no reasonable body of persons could come to the conclusion that it was necessary in the interests of the general public to impound .....

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..... to the aforesaid discussion, I am clearly of the view that the material disclosed in Shri Kazi's supplemental affidavit dated March 4, 1972 on the basis of which the impugned decision was taken has no possible rational connection with the ground of general public interests to serve which the petitioner's passport was impounded; in other words, the material was such that no reasonable body of persons could come to a conclusion that it was necessary in the interests of general publie to impound the petitioner's passport. In this view of the matter the impugned decision will have to be quashed. Since the petitioner is entitled to succeed on these two points, it is unnecessary to deal with and I do not propose to deal with the other points on the basis of which the impugned decision has also been challenged. 26. In the result, I feel, that the impugned decision of the Central Government to impound the petitioner's passport taken on June 11, 1971 and which was communicated to the petitioner by respondent No. 2 in his letter dated November 25, 1971 should be quashed. 27. I further direct respondents Nos. 1 and 2 to forbear from taking any further steps or action in .....

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