Administrative Law [Selective Issues]

The question of Locus standi

In yester-years, and perhaps even in the not too distant a past, the one recurring theme that be devilled administrative-law and judicial review most was the vexed question of locus standi. But there is a much wider concept of locus standi now. It now takes in any one who is not a mere “busy-body” or a “meddle-some interloper” and all that need be shown is a sufficiency of interest in the matter to which the petition relates. We have, “action popular is” by which any citizen can enforce law for the benefit of all, against public authorities touching their statutory duties.

 If  Petitioners are undoubtedly litigating a matter of public interest. Though they have no personal interest, they have a special interest as part of a group. Their concern is deeper than that of a mere busy-body. To say that they have no enforceable rights and that therefore they have no locus standi is to beg the question; and to confuse between locus standi on the one hand and justiciability and meritsMerits Strict legal rights of the parties; a decision “on the merits” is one that reaches the right(s) of a party as distinguished from a disposition of the case on a ground not reaching the rights raised in the action; for example, in a criminal case double jeopardy does not apply if charges are nolle prossed before trial commences, and in a civil action res judicata does not apply if a previous action was dismissed on a preliminary motion raising a technicality such as improper service of process. on the other. Both aspects, no doubt, are in overlapping areas and sufficiency of interest must, of course, be seen against the subject-matter of the proceeding, the nature of the duty sought to be enforced and the nature of the breach. The words of a learned author on the subject may be recalled ‘Administrative LawLaw Positive command of sovereign or divine. One can be ruled either by a Statute, a Statue, or a Statement. Legislation is the rule-making process by a political or religious organisation. Physics governs natural law. Logical thinking is a sign of a healthy brain function. Dharma is eternal for Sanatanis.’ by Craig, 1983 edn. Pp. 442, 443 :

“The approach of the House of Lords to the question of how one determines whether an applicant has sufficient interest or not is one of the most interesting in the whole case.”

“The one matter on which their Lordships agree, albeit with differing degrees of emphasis, is that standing and the merits often cannot be separated in this way. While it may be possible to do so in relatively straightforward cases, in those which are more complex it will be necessary to consider the whole legal and factual context to determine whether an applicant possesses a sufficient interest in the matter. This will include the nature of the power or duties involved and the breach of those allegedly committed. The term merits here is not being used in the sense of a value judgmentJudgment The statement given by the Judge on the grounds of a decree or order - CPC 2(9). It contains a concise statement of the case, points for determination, the decision thereon, and the reasons for such decision - Order 20 Rule 4(2).  Section 354 of CrPC requires that every judgment shall contain points for determination, the decision thereon and the reasons for the decision. Indian Supreme Court Decisions > Law declared by Supreme Court to be binding on all courts (Art 141 Indian Constitution) Civil and judicial authorities to act in aid of the Supreme Court (Art 144) Supreme Court Network On Judiciary – Portal > Denning: “Judges do not speak, as do actors, to please. They do not speak, as do advocates, to persuade. They do not speak, as do historians, to recount the past. They speak to give Judgment. And in their judgments, you will find passages, which are worthy to rank with the greatest literature….” Law Points on Judgment Writing > The judge must write to provide an easy-to-understand analysis of the issues of law and fact which arise for decision. Judgments are primarily meant for those whose cases are decided by judges (State Bank of India and Another Vs Ajay Kumar Sood SC 2022) as to whether the applicant’s claimA Claim A claim is “factually unsustainable” where it could be said with confidence before trial that the factual basis for the claim is entirely without substance, which can be the case if it were clear beyond question that the facts pleaded are contradicted by all the documents or other material on which it is based. is meritorious or good. It means that the court will look to the substance of the allegation in order to determine whether the applicant has standing.”

ContractContract An agreement enforceable by law is a contract. All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void. Indian Contract Act. of Employment at common lawCommon law The legal system that originated in England and is now in use in the United States. It is based on court decisions rather than statutes passed by the legislature.

The rule that an employer can arbitrarily discharge an employee with or without regard to the actuating motive is a rule settled beyond doubt. This is a relic of the Roman institution of pater families. [Sukhdev Singh’s case (supra) at p. 1358]. What arc the incidents of the relationship of master and servant at common law ? These can be conveniently summarised as follows :

(1)No reasons need be given for dismissal. The servant cannot complain of dismissal even had it been decided upon for an inadequate reason or for an erroneous reason or even for no reason.

(2)Principles of natural justice have no part to play.

(3)Power to appoint or dismiss is not a judicial power but an administrative power.

(4)There cannot be reinstatement as the law does not permit specific performanceSpecific performance The remedy of specific performance is special and extraordinary and is at the court’s discretion, which the court would only exercise “if, under all the circumstances, it is just an equitable to do so”. Factors affecting the court’s discretion include considerations such as: (a) whether damages would be an adequate remedy; and (b) whether the person against whom the relief of specific performance is being sought would suffer substantial hardship. of a contract of service [Specific Relief Act (1963) Ss. 14, 10, 34. 361, 757

(5)Remedy is in damages for breach of contract

Public Employment 

With the growth of public corporations it was soon recognised that the law ought to recognise an obligation, upon the employer to provide a good procedure concerning his right of dismissal. Common law of the contract of employment tailed to impose procedural standards upon the disciplinary process. At common law the master had an absolute right of dismissal subject to a claimA Claim A claim is “factually unsustainable” where it could be said with confidence before trial that the factual basis for the claim is entirely without substance, which can be the case if it were clear beyond question that the facts pleaded are contradicted by all the documents or other material on which it is based. of damages if the servant was able to prove breach of contract. Statute intervened in favor to the employee. As against the master the employee was weaker of the two. The State by statute imposed restrictions on the termination of contracts of employment as it has imposed restrictions on landlords who wish to terminate tenancies.

The principles of public and administrative law have eroded the traditional private law concept of master and servant a great deal in modern times. (See Journal of the Indian Law Institute-Jan.- March 1976 p. 8). The statute restricted the employer’s right of dismissal. If the purported dismissal was in violation of the statutory safeguards it could be declared ultra virus a statutory body. The statute conferred a special status. It conferred a particular security of tenure. Courts both in EnglandEngland In England, the Parliament was originally an advisory body summoned to consult with the monarch, and the courts exercised delegated royal powers, as “lions beneath the throne”. and IndiaIndia Bharat Varsha (Jambu Dvipa) is the name of this land mass. The people of this land are Sanatan Dharmin and they always defeated invaders. Indra (10000 yrs) was the oldest deified King of this land. Manu's jurisprudence enlitened this land. Vedas have been the civilizational literature of this land. Guiding principles of this land are : सत्यं वद । धर्मं चर । स्वाध्यायान्मा प्रमदः । Read more recognised that certain types of employees have the benefit of a specially protected status which justified a declaration of invalidity of wrongful dismissal and in certain types of employment wrongful dismissal may be treated as ultra virus the employing body and void upon that ground.. The result was that the wrongfully dismissed employees were granted declarations that their dismissal was null and void and that they continued to remain in service. Hitherto the entrenched position at common law was that no such declaration will be made, because the wrongful dismissal is effective to terminate the contract of employment. The statute reversed this position. It introduced an important, and apparently widening group of exceptions to the common law rule. The well recognised exceptions so far are :

(I)where a public servant is sought to be removed from service in contravention of Article 311 of the Constitution.

(II)where a worker is sought to be reinstated on being dismissed under the industrial law, and

(III)where a statutory body acts in violation of the mandatory provisions of the statute. [See M. R. Freedland- The Contract of Employment (1976) pp. 279-290].

Applying the public law principles the courts will today grant a declaration holding a wrongful dismissal null and void where the dismissed; person is entitled to a special protection of his security of tenure. By making a declaration the courts enforce and recognise the legal protection of security of employment. The wrongfully dismissed employees remain employed under the contracts of employment. This is as if the contract of employment had never been terminated. The Supreme Court has said :

” THE remedy of declaration should a ready-made instrument to provide reinstatement in public sector,”

(PER Mathew J. in Sukhdev Singh’s case).

The House of Lords showed recently in Malloch v. Abderdeen CorporationCorporation A legally established entity that can enter into contracts, own assets and incur debt, as well as sue and be sued—all separately from its owner(s). The term covers both for-profit and nonprofit corporations and includes nonstock corporations, incorporated membership organizations, incorporated cooperatives, incorporated trade associations, professional corporations and, under certain circumstances, limited liability companies. (1971) 1 Wlr 1578 how fine the dividing line may be between an ordinary contract of employment and a specially protected status.

This case concerned a Scottish teacher employed by a local education authority subject to statutory provisions for prior discussion by the authority of any motion to dismiss a teacher, with three weeks’ notice to the teacher of the meeting at which the dismissal was to be considered. It was held by a bare majority (Lords Reid, Wilberforce and Lord Simon; Lords Morris and Guest dissenting) that these statutory safeguards impliedly conferred upon the teacher the right to a hearing before dismissal, which right in turn conferred a protected status upon the employee, such that a dismissal not complying with that condition was to be invalidated by the remedy of reduction of the dismissal (which is the remedy in Scottish law corresponding to invalidity of dismissal).

A comparative list of situations in which persons have been held entitled or not entitled to a hearing, or to observation of rules of natural justice, according to master and servant test, looks illogical and even bizarre. In England a specialist surgeon has been denied protection which is given to a hospital doctor; a University professor, as a servant, has been denied the right to be heard, a dock labourer and an undergraduate have been granted it. (See Barber v. Manchester Regional Hospital Board (1958) 1 W.L.R. 181 , Palmer v, Inverness Hospitals Board of Management 1963 S.C. 311 , Vidyodaya University Council v. Silva (1965) 1 W.L.R. 77 , Vine v National Dock Labour Board; (1957) A.C. 488 , Glynn v. Keela University (1971) 1 W.L.R. 487.

The Privy Council decision in Vidyodaya University case (supra) has come in for severe criticism. The House of Lords refused to follow it. (See the speech of Lord Wilberfuce in Malloch’s case). Mathew J. did not approve of this decision in Shri Vidya Ram Misra Vs. Managing Committee, Shri Jai Narain College, . He preferred to follow Malloch’s case.

In India in S.B. Dutt Vs. University of Delhi, the Supreme Court held that the University professor was not entitled to reinstatement as no specific implement of the contract of employment could be ordered as the law did not permit it. Similarly in Shri Vidya Ram Misra Vs. Managing Committee, Shri Jai Narain College, it was held that the terms contained in the contract of the teachers were purely contractual and had no statutory force. But in Prabhakar Ramakrishna Jodh Vs. A.L. Pande and Another, the court on the other hand held that the University statute had the force of law and this governed the contract of the teacher. A dismissal in contravention of such a provision was held to be ultra vires.

In S.R. Tewari Vs. District Board Agra and Another, the district board passed a resolution terminating the services of the appellant. He challenged the action of the Board. The court emphasised that

” THE powers of a statutory body are always subject to the statute which has constituted it, and must be exercised consistently with the statute and the courts have, in appropriate cases, the power to declare an action of “the body illegal or ultra vires, even if the action relates to determination of employment of a servant.”

It was held that the courts will declare an act of a statutory body invalid

” IF by doing the act the body has acted in breach of a mandatory obligation imposed by statute, even if by making the declaration the body is compelled to do something which it does not desire to do.”

VINE’S case (supra) was followed.

S.R. Tewari Vs. District Board Agra and Another, , Life Insurance Corporation of India Vs. Sunil Kumar Mukherjee and Others, , Calcutta Dock Labour Board Vs. Jaffar Imam and Others, . Mafatlal Naraindas Barot Vs. Divisional Controller, State Transport Corporation and Another, and Sirsi Municipality by its President Sirsi Vs. Cecelia Kom Francis Tellis, establish that the dismissal of a servant by statutory bodies in. breach of the provisions of the statutes or orders or schemes made under the statute which regulate the exercise of their power is invalid or ultra virus and the principle of pure master and servant contractual relationship has no application to such cases.

In Executive Committee of Vaish Degree College, Shamli and Others Vs. Lakshmi Narain and Others, the court held that the college was a non-statutory body and that the plaintiff’s case did not fall within any of three exceptions to the rule of non-enforceability of contract of service. In exercise of discretion the court refused to grant declaration or injunction. This decision was followed by the Supreme Court in Arya Vidya Sabha, Kashi and Another Vs. Krishna Kumar Srivastava and Another, .

The relevant case law was helpfully reviewed by the Supreme Court in Sukhdev Singh’s case (supra). The basic question in each case is

” WHETHER the public authority is acting as an ordinary employer who has the power to dismiss his employees subject to payment of damages for any breach of contract or whether it has only a statutory power of dismissal which is restricted by the statute.”

How do we answer this question ? By examining the legal basis of employment. Is it a pure master and servant case or a case of statutory employment ? The answer to the question will depend on “the framework and the context of employment” as Lord Wilberforce said in Malloch’s case (supra). Natural Justice in statutory corporations

The principles of natural justice apply to corporations. The statutory regulations or procedural safeguards embody the requirements of natural justice. In Calcutta Dock Labour case (supra) Gajendragadkar Cj said :

“IN cases where a statutory body or authority is empowered to terminate the employment of its employees, the said authority or body cannot be heard to say that it will exercise its powers without due regard to the principles of natural justice.” (p. 286)

(35) Similarly in Mafat Lal Barot’s case the termination order against the employee of the State Road Transport Corporation, a statutory body, was held vocative of the principles of natural justice as no opportunity of hearing was given to the employee before dismissal.

It is in statutory employment that the rules of natural justice have a part to play. The legislative enactment itself or the Regulations framed in exercise of delegated power of legislation prescribe that a reasonable opportunity to show causeShow Cause A process directed to a person to appear in court and present reasons why a certain order, judgment, or decree should not be made final. must be given to the employee before he is dismissed. If the statutory corporation is in breach of this mandatory obligation e.g. it does not hear the employes or docs not follow the prescribed procedure the courts will declare the order of dismissal as invalid.

The corporation is the creature of the statute and the statute it must obey. If it disobeys the statute it acts illegally. This is what Ray Cj has said in Sukhdev Singh’s case (supra). Similarly employment in the corporate sector is the theme of Mathew J.

Without the support of the statute the employee cannot appeal to the majestic conception of natural justice. But if he is fortified by statute he can claim a declaratory judgment or a certiorari in defense of his right to be heard. Natural justice is nothing else but fair play In action. The corporation must act fairly towards its employees. The acidAcid A chemical that gives off hydrogen ions in water and forms salts by combining with certain metals. Acids have a sour taste and turn certain dyes red. Some acids made by the body, such as gastric acid, can help organs work the way they should. An example of an acid is hydrochloric acid. Acidity is measured on a scale called the pH scale. On this scale, a value of 7 is neutral, and a pH value of less than 7 to 0 shows increasing acidity. test that has been applied is whether what had been done was fair.

This is the significant advance made in recent years in the field of public corporations. This is the great gain of the statutory servant over a private employee. It cannot be denied that the principles which the phrase “natural justice” enshrines have, particularly in recent years in the field of administrative law, been valiantly and beneficently applied to defeat wrongful and inconsiderate exercises of power. (See 1973 Current Legal Problems p. 4).

Now to sum up: an employee in a corporation cannot be denied appropriate remedies of administrative law and if the dismissal is contrary to the mandatory provisions of the statute or in disregard of the principles of natural justice the dismissal can be declared void for a dismissal without good reasons may vitally affect a man’s career or his pension.

The doctrine of public employment arose because large corporations enjoy vast powers. As Mathew J. said in Sukhdev Singh’s case :

” THE problem posed by the big corporation is the protection of the individual rights of the employees.”

The common law give an absolute right to the employer to dismiss the employee summarily. It was this failure to provide sufficiently adequate protection which led ultimately to the introduction of the procedural safeguards. The doctrine of ultra virus was introduced in order to check the arbitrary action of the corporation. If the purported dismissal was ultra virus a statutory body it would be declared invalid. Thus the employee came to enjoy a special status, that is to say, it gave him am interest of a proprietary nature distinct from the ordinary contractual interest under a contract of employment. The statute conferred a particular security of tenure on him inasmuch as that if the mandatory provisions of the statute were not complied with the court granted a declaration of invalidity of the action of the statutory body. This was laid down in England in the leading case of Vine v. National Dock Labour Board, 1957 A.C. 488. This reasoning is explicit in the judgment of Barry J. in Price v. Sunderland Corporation 1 W.L.R. 1253 where he says :

” A local authority or any statutory body cannot-either employ or dismiss servants except under statutory authority; their powers are derived from the statute or statutes under which they are created, and it is a well known principle of law that statutory powers can only be exercised for the purposes for which they are granted.”

This wide view of the power of the courts to review dismissals of employees of public authorities on the grounds of ultra virus ‘has now been accepted by the Supreme Court. Executive Committee, U.P. Warehousing Corporation Vs. Chandra Kiran Tyagi, which took a narrow view has now happily been overruled.

Natural justice in pure master and servant cases

In a case of a contract of employment between a master and servant the principles of natural justice cannot be invoked. This is settled by a number of decisions. The employer is under no obligation to allow the employee a hearing before the dismissal. In the words of Lord Reid in Bidge v. Baldwin (1964) A.C. 40 ;

” THE question in a pure question of master and servant does not at all depend on whether the master has heard the servant in his own defense, it depends on whether the facts emerging at the trial prove breach of contract;”

(49) In Malloch v. Aberdeen Corporation (1971) 1 W.L.R. 1578 (8) Lord Reid said :

” AT common law a master is not bound to hear his servant before he dismisses him. He can act unreasonably or capriciously if so chooses but the dismissal is valid. The servant has no remedy unless the dismissal is in breach of contract and then the servant’s only remedy is damages for breach of contract.”

(50) In Vasudeva Pillai v. City Council of Singapore, (1968) 1 W.L.R. 1278 the Privy Council said that :

” THE relationship of master and servant or employer and employee gives rise to no application of the principle of audi alteram partemAudi alteram partem Asst. Commissioner Commercial Tax v. M/s Shukla and brothers (2010) 4 SCC 785: “9. The increasing institution of cases in all Courts in India and its resultant burden upon the Courts has invited attention of all concerned in the justice administration system. Despite heavy quantum of cases in Courts, in our view, it would neither be permissible nor possible to state as a principle of law, that while exercising power of judicial review on administrative action and more particularly judgment of courts in appeal before the higher Court, providing of reasons can never be dispensed with. The doctrine of audi alteram partem has three basic essentials. Firstly, a person against whom an order is required to be passed or whose rights are likely to be affected adversely must be granted an opportunity of being heard. Secondly, the concerned authority should provide a fair and transparent procedure and lastly, the authority concerned must apply its mind and dispose of the matter by a reasoned or speaking order. This has been uniformly applied by courts in India and abroad.” on dismissal.”

(51) It appears to me that a dismissal which takes place, assuming it to be in breach of the Service Rules such as are applicable in the present case, cannot be declared null and void because the contract was in a sense nothing more than an ordinary contract between a master and servant despite the statutory flavour attaching to it. The court will refuse to declare invalidity of wrongful dismissal in the ordinary case of employer and employee because a contract of personal service cannot be specifically enforced. An employee cannot be forced upon an unwilling employer. In the leading decision of Vine v. National Dock Labour Board (1957) A.C. 488 Lord Keith brought out the distinction between common law and the statutory employment in these words :

” NORMALLY, and apart from the intervention of statute, there would never be a nullity in terminating an ordinary contract of master and servant. Dismissal might be in breach of contract and so unlawful, but could only ‘ sound in damages.”

(52) Supreme Court Case of Sukhdev Singh, Oil and Natural Gas Commission, Life Insurance Corporation, Industrial Finance Corporation Employees Associations Vs. Bhagat Ram, Association of Clause II. Officers, Shyam Lal, Industrial Finance Corporation, . In Sukhdev Singh’s case the Regulations provided inter alias for the terms and conditions of employment, scales of pay etc. of the employees of the corporation concerned. It was held that in the case of corporations (Oil and Natural Gas Commission, Life Insurance Corporation and Industrial Finance Corporation) these Regulations were imperative. Since the Regulations were framed under the parent statute which gave it the power to frame Regulations defining the terms and conditions of employment, the Regulations were “prescriptive and statutory”. As Ray Cj said :

” THE employees of these statutory bodies have a statutory status and they are entitled to a declaration of being in employment when their dismissal or removal is in contravention of statutory provisions.”

(53) In the course of his judgment the learned Chief Justice said:

” THE noticeable feature is that these statutory bodies have no free hand in framing the terms and conditions of service of their employees. These statutory bodies are bound to apply the terms and conditions as laid down in the regulations. The statutory bodies are not free to make such terms as they think fit and proper. Regulations prescribe the terms of appointment, conditions of service and procedure for dismissing employees.”

(54) A little later he said :

“…a regulation is not an agreementContract An agreement enforceable by law is a contract. All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void. Indian Contract Act. or contract but a law binding the corporation, its officers, servants and the members of the public who come within the sphere of the operations. The doctrine of ultra virus as applied to statutes, rules and orders should equally apply to the regulations and any other subordinate legislation.”

Cases Referred

Sukhdev Singh, Oil and Natural Gas Commission, Life Insurance Corporation, Industrial Finance Corporation Employees Associations Vs. Bhagat Ram, Association of Clause II. Officers, Shyam Lal, Industrial Finance Corporation, AIR 1975 SC 1331 : (1975) 30 FLR 283 : (1975) LabIC 881 : (1975) 1 LLJ 399 : (1975) 1 SCC 421 : (1975) 3 SCR 619
Executive Committee, U.P. Warehousing Corporation Vs. Chandra Kiran Tyagi, AIR 1970 SC 1244 : (1970) 20 FLR 17 : (1970) 1 LLJ 32 : (1969) 2 SCC 838 : (1970) 2 SCR 250
The Commissioner of Coal Mines Provident Fund, Dhanbad and Others Vs. J.P. Lalla and Sons, AIR 1976 SC 676 : (1976) LabIC 482 : (1976) 2 LLJ 91 : (1976) 1 SCC 964 : (1976) 3 SCR 365 : (1976) 8 UJ 263
The D.F.O., South Kheri and Others Vs. Ram Sanehi Singh, AIR 1973 SC 205 : (1971) 3 SCC 864
Prabhakar Ramakrishna Jodh Vs. A.L. Pande and Another, (1965) 2 SCR 713
Calcutta Dock Labour Board Vs. Jaffar Imam and Others, AIR 1966 SC 282 : (1966) CriLJ 189 : (1965) 11 FLR 72 : (1965) 2 LLJ 112 : (1965) 3 SCR 453
S.R. Tewari Vs. District Board Agra and Another, AIR 1964 SC 1680 : (1973) LabIC 1607 : (1964) 1 LLJ 1 : (1964) 3 SCR 55
Life Insurance Corporation of India Vs. Sunil Kumar Mukherjee and Others, AIR 1964 SC 847 : (1964) 8 FLR 158 : (1964) 1 LLJ 442 : (1964) 5 SCR 528
Executive Committee of Vaish Degree College, Shamli and Others Vs. Lakshmi Narain and Others, AIR 1976 SC 888 : (1976) 2 LLJ 163 : (1976) 2 SCC 58
S.B. Dutt Vs. University of Delhi, AIR 1958 SC 1050 : (1959) 61 PLR 1 : (1959) 1 SCR 1236
Sayeedur Rehman Vs. The State of Bihar and Others, AIR 1973 SC 239 : (1973) 3 SCC 333 : (1973) 2 SCR 1043 : (1973) 1 SLJ 162 : (1973) 5 UJ 452
Sirsi Municipality by its President Sirsi Vs. Cecelia Kom Francis Tellis, AIR 1973 SC 855 : (1973) 26 FLR 150 : (1973) 1 LLJ 226 : (1973) 1 SCC 409 : (1973) 3 SCR 348 : (1973) 1 SLJ 525
Mafatlal Naraindas Barot Vs. Divisional Controller, State Transport Corporation and Another, AIR 1966 SC 1364 : (1966) 1 LLJ 437 : (1966) 3 SCR 40
Shri Bhagwan and Another Vs. Ram Chand and Another, AIR 1965 SC 1767 : (1965) 3 SCR 218
State of Orissa Vs. Dr. (Miss) Binapani Dei and Others, AIR 1967 SC 1269 : (1967) 15 FLR 209 : (1967) 2 LLJ 266 : (1967) 2 SCR 625
Arya Vidya Sabha, Kashi and Another Vs. Krishna Kumar Srivastava and Another, AIR 1976 SC 1073 : (1976) LabIC 698 : (1976) 2 LLJ 95 : (1976) 3 SCC 83 : (1976) 8 UJ 282
Kulchhinder Singh and Others Vs. Hardayal Singh Brar and Others, AIR 1976 SC 2216 : (1977) 34 FLR 53 : (1976) 2 LLJ 204 : (1976) 3 SCC 828 : (1976) 3 SCR 680 : (1976) 8 UJ 350
Shri Vidya Ram Misra Vs. Managing Committee, Shri Jai Narain College, AIR 1972 SC 1450 : (1973) 26 FLR 182 : (1972) LabIC 829 : (1972) 1 LLJ 442 : (1972) 1 SCC 623 : (1972) 3 SCR 320

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Abusive Discretion

It is a settled principle of administrative law that power which is discretionary is abused or misused if relevant considerations are disregarded and irrelevant considerations are taken into account. Even where natural justice does not apply, administrators must act fairly.

More serious the error becomes when findings are reached on no evidenceEvidence All the means by which a matter of fact, the truth of which is submitted for investigation, is established or disproved. Bharatiya Sakshya (Second) Adhiniyam 2023 .

Lord Atkinson said in FOLKESTONE CORPORATION v. BROCKMAN, 1914 AC 338. that:

“An order made without evidence to support it, is in truth, in my view, made without jurisdictionJurisdiction Authority by which courts receive and decide cases. Limited Jurisdiction: the authority over only particular types of cases, or cases under a prescribed amount in controversy, or seeking only certain types of relief, the District Court is a court of limited jurisdiction. Original Jurisdiction: Jurisdiction of the first court to hear a case..”

“No evidence” rule supports judicial review and the ancient view to the contrary has become obsolete and it may well be said that immunity to judicial review despite no evidence rule according to modern trends has been despatched to the limbo of history. Such a rule is a new dimension of the principle of ultra virus so that statutes which invest powers of determination will be taken to imply that the determination must be based upon at least some acceptable evidence as otherwise it will be treated as arbitrary, capricious and obviously unauthorised. Equally well settled is the legal principle that powers given for public purpose are as it were, held upon trust, and they embroil themselves with the policy, motives and merits of administrative action.

Lord Denning M.R. observed in BREEN v. AMALGAMATED ENGINEERING UNION (1917) 2 QB 175:

“The discretion of a statutory body is never unfettered It is a discretion which is to be exercised according to law. That means at least this the statutory body must be guided by relevant considerations and not by irrelevant . If its decision is influenced by extraneous considerations which it ought not to have taken into account, then the decision cannot stand. No matter that the statutory body may have acted in good faith; nevertheless the decision will be set aside. That is established by ‘Padfield v. Minister of Agriculture, Fisheries and Food which is a landmark in modern administrative law.”

Fair administrative procedure involves procedural fairness and regularity which are indispensable attributes of liberty. Stringent substantive laws can be endured only if they are fairly and impartially applied.

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The scope of judicial review

“The system of judicial review is radically different from the system of appeals. When hearing an appeal the court is concerned with the merits of a decision: is it correct? When subjecting some administrative act or order to judicial review, the court is concerned with its legality: is it within the limits of the powers granted? On an appeal the question is `right or wrong?’ On review the question is `lawful or unlawful?”

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 The act of Administrative authorities

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 exercising quasi-judicial function will be able to justify their existence and carry credibility with the people by inspiring confidence in the ad judicatory process. The rule requiring reasons to be given in support of an order is, like the principle of audi alteram partem, a basic principle of natural justice which must inform every quasi-judicial 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.

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The principle of legitimate expectation

Principle of legitimate expectation has come to be recorded as a valid ground for Judicial Review of administrative action. The focus is on the conduct of the decision maker. The expectation is the one created by the conduct of the Decision Making Authority the Non-fulfillment of which engenders judicial intervention. In some cases, legitimate expectation is an expectation and not a mere pious hope that a substantial benefit, privilege or other advantage will be either conferred or continued. In other cases, it will be the mere limited expectation that no adverse decision affecting an individual will be taken without first affording the person likely to be affected an opportunity to make a representation about it. The expectation may arise either by an express promise or by implication from past practice or existing practice or conduct.

29. In R v. Secretary of State For Human Department 1985 (1) All E.R. 40 it was held:-

“Where a member of the public affected by a decision of a public authority, had a legitimate expectation based on a statement or undertaking by the authority that it would apply certain criteria or follow certain procedures in making its decision, the authority was under a duty to follow these criteria or procedures in reaching its decision, provided that the statement or undertaking in question did not conflict with the authority’s statutory duty ………… In the circumstances, the Secretary had acted unfairly and unreasonably in deciding the applicant’s application …………………”

In O’Reilly v. Mackman 1982 (3) All E.R. 1124 Lord Diplock observed:

“But even where a person claiming some benefit or privilege has no legal right to it as a matter of private law, he may have a legitimate expectation of receiving the benefit or privilege, and if so, the Courts will protect his expectation by judicial review as a matter of public law”.

IN Council of Civil Service Unions and Ors. v. Minister For The Civil Service 1984 (3) All E.R. 935 it was held:-

“… Legitimate, or reasonable expectation may arise either from an express promise given on behalf of a public authority or free from the existence of a regular practice which the claimant can reasonably expect to continue…”

The criterion in the instant case is whether the decision on which the instruction was based was reached by a process which was fair to the petitioners.

In Chief Constable of The North Wales Police v. Evans 1982 (3) All E.R. 141 commenting on Judicial Review, Lord Brightman said “Judicial Review, as the words imply, is not an appeal from a decision, but a review of the manner in which the decision was made.”

The origin of the principle of legitimate expectation could be traced to the innovative Lord Denning, M.R. in Schmidt and Another v. Secretary of State 1969 (1) All E.R. 904

For Home Affairs, when he used the phrase of ‘reasonable expectation”. Its judicial evaluation made further progress in HONG KONG’S CASE contributed by Lord Frazer. ‘Reasonable expectation’ used by Lord Denning was transformed into ‘legitimate expectation’ by Lord Fraser breaking a new ground and paving the way for Judicial Review. The principle is firmly entrenched in English Administrative Law and it is identified as closely allied to the ‘right to be heard’.

The expectation takes several forms. One may be an expectation of prior consultation. Another may be an expectation of being allowed timeTime Where any expression of it occurs in any Rules, or any judgment, order or direction, and whenever the doing or not doing of anything at a certain time of the day or night or during a certain part of the day or night has an effect in law, that time is, unless it is otherwise specifically stated, held to be standard time as used in a particular country or state. (In Physics, time and Space never exist actually-“quantum entanglement”) to make representations especially where the aggrieved is seeking to persuade an authority not to depart from a lawfully established policy adopted in connection with the exercise of a particular power because of some suggested exceptional reasons justifying such a departure.

The orthodox view which was prevailing at one time that the remedy for abuse of policy of the State lay in the political field and not in the judicial realm is not rigidly in vogue with the changing trends which are manifest in modern Administrative Law. The upsurge of judicial activism has rendered the age old concept elastic if when a Court is confronted with the exercise of a discretionary power, inquiry is not altogether excluded.

In a well known letter addressed to Dicey, the great historian Maitland said :-

“The only direct utility of legal history (I say nothing of its thrilling interest) lies in the lesson that each generation has an enormous power of shaping its own Law”.

(Cosgrove – The Rule of Law ; Albert Venn Dicey: Victorian Jurist 1980 P. 177).

It is a well recognised position that where there is a residue of miscellaneous fields of law in which the executive Government retains decision making powers which are not dependent on any statutory authority but nevertheless have consequences on the private rights of legitimate expectations of other persons which would render the decision subject to. Judicial Review if the power of the decision maker to make them were statutory in origin. Such a decision, in my opinionOpinion A judge's written explanation of a decision of the court. In an appeal, multiple opinions may be written. The court’s ruling comes from a majority of judges and forms the majority opinion. A dissenting opinion disagrees with the majority because of the reasoning and/or the principles of law on which the decision is based. A concurring opinion agrees with the end result of the court but offers further comment possibly because they disagree with how the court reached its conclusion., is not immune to the test of legality, rationality and procedural propriety.

In Council of Civil Service Unions and others v. Minister for the Civil Service, it was held:-

“An aggrieved person was entitled to invoke judicial review if he showed that a decision of a public authority affected him by depriving him of some benefit or advantage which in the past he had been permitted to enjoy and which he could legitimately expect to be permitted to continue to enjoy either until he was given reasons for its withdrawal and the opportunity to comment on those reasons or because he had received an assurance that it would not be withdrawn before he had been given the opportunity of making representations against the withdrawal. The applicant’s legitimate expectation arising from the existence of a regular practice of consultation which the appellants could reasonably expect to continue gave rise to an implied limitation on the minister’s exercise of the power contained in Article 4 of the 1982 order, namely an obligation to act fairly by consulting the GCHQ staff before withdrawing the benefit of trade union membership. The minister’s failure to consult prima facie entitled the appellants to judicial review of the minister’s instruction [A.G. of Hong Kong v. Ng. Yuen Shiu 1983 (2) All E.R. 346 : 1983 (2) AC 629 : (1983) 2 ALL ER 346 considered]”.

In Kio v. West (1986) 60 ALJR 113 it was held:-

“Circumstances are identified which give raise to a legitimate expectation as either an express promise given on behalf of the State or the public authority of the existence of a regular practice which the claimant can reasonably expect to continue. Whenever the doctrine of legitimate expectation is pressed into service it is in effect used for invoking principles of natural justice”.

The focus on the nature of interest is evident in Durayappah v. Fernando 1967 (2) AC 337 The Privy Council laid down that in determining whether or not the principle of natural justice would apply to the protection of individual’s interest, factors to be reckoned are (i) the nature of the complainant’s interest ; (ii) the circumstances in which it would be interfered with; and (iii) the sanction which might be imposed on the decision maker.

What is relevant is the nature of the interest and not the enjoyment permitted by the decision maker which warrants judicial protection.

In Hong Kong case, it was only the legitimate expectation arising from the assurance given by the Government that enabled the Court to intervene on behalf of the illegal immigrant; his status as an illegal immigrant would not of itself have created any entitlement to a hearing (Attorney-General v. No Yuen Shiu)

The doctrine of legitimate expectation and its limited scope has been pointed out by the Supreme Court in Union of India and others Vs. Hindustan Development Corpn. and others, . It is unnecessary to repeat the observations here, as we find the same referred in detail in the above said Karnataka decision.

 In the same decision, the Supreme Court pointed out that the decision in Kumari Shrilekha Vidyarthi’s case was based on the fact that the petitioner was holding a public office and the action terminating the holding of the public office was under consideration. The Supreme Court, in this connection held :-

“WE are, therefore ,of the opinion that in case of contracts freely entered into with the State, like the present ones, there is no room for invoking the doctrine of fairness and reasonableness against one party to the contract (State), for the purpose of altering of adding to the terms and conditions of the contract, merely because it happens to be the State. In such cases, the mutual rights and liabilities of the parties are governed by the terms of the contracts (which may be statutory in some cases) and the laws relating to contracts.”

In Gujarat State Financial Corporation Vs. M/s. Lotus Hotels Pvt. Ltd. : Air 1983 Sc 818. In the said case, writ jurisdiction was involved to enforce a provision to advance a loan. The court upheld the issuance of the writ because, the court held that there was a statutory duty to perform the terms of the contract to advance the loan.

 In Assistant Excise Commissioner and Others Vs. Issac Peter and Others, the Supreme Court had an occasion to consider the doctrine relied upon by the learned counsel for the petitioner. The earlier decision of the Supreme Court in Kumari Shrilekha Vidyarthi and Others Vs. State of U.P. and Others, as well as the decision rendered in Mahabir Auto Stores and Others Vs Indian Oil Corporation and others; Jt 1990 (1) Sc 363 were referred and distinguished at paras 26 & 27. The exercise of the contractual power by the State in an alleged arbitrary way was the subject matter before the Supreme Court, arising under the Kerala Abkari Act, 1902. At page 156 the Supreme Court dealt with the principle thus

“IN short, the duty of act fairly is sought to be imported into the contract to modify and alter its terms and to create an obligation upon the State which is not there in the contract. We must confess. We are not aware of any such doctrine of fairness or reasonableness. Nor could the learned counsel bring to our notice any decision laying down such a proposition. Doctrine of fairness or the duty to act fairly and reasonably is a doctrine developed in the administrative law filed to ensure the Rule of Law and to prevent failure of justice where the action is administrative in nature. Just as principles of natural justice ensure fair decision where the function is quasi judicial, the doctrine of fairness is evolved to amend, alter or vary the express terms of the contract between the parties. This is so, even if the contract is governed by statutory provisions, i.e. where it is a statutory contract or rather more so……”

Authority Created by Legislation

It is basic that the authorities created under the Act have to function within the four corners of the powers and duties assigned to them under the Act. They cannot claim to themselves any inherent power howsoever benevolent or plausible the purpose it is intended to serve. The power to issue clarifications of purportedly ambiguous statutory provisions lies only with the Legislature or its delegate under specified conditions. In the absence of any such delegation, such a power cannot be exercised by any person and if it so exercised then it will be nothing but a nullity binding none on the earth.

 In the case of Jalan Trading Co. (Private Ltd.) Vs. Mill Mazdoor Union, , it has been held by the Supreme Court that “a provision authorising the Central Government to provide by order for removal of doubts or difficulties in giving effect to the provisions of the Act amounts to delegation of legislative power”. As a matter of fact u/s 298 of the Act, such a power has been specifically conferred upon the Central Government subject to various limitations. The said section reads thus :

“Power to remove difficulties. – (1) If any difficulty arises in giving effect to the provisions of this Act the Central Government may, by general or special order, do anything not inconsistent with such provisions which appears to it to be necessary or expedient for the purpose of removing the difficulty.

(2) In particular, and without prejudice to the generality of the foregoing power, any such order may provide for the adaptations or modifications subject to which the repealed Act shall apply in relation to the assessments for the assessment year ending on the 31st day of March, 1962, or any earlier year.

(3) If any difficulty arises in giving effect to the provisions of this Act as amended by the Direct Tax Laws (Amendment) Act, 1987, the Central Government may, by order, do anything not inconsistent with such provisions for the purpose of removing the difficulty :

Provided that no such order shall be made after the expiration of three years from the 1st day of April, 1988.

(4) Every order made under sub-section (3) shall be laid before each House of Parliament.”

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