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Article 227 in The Constitution Of India 1949
Article 226 in The Constitution Of India 1949
Article 136 in The Constitution Of India 1949
S.N. Mukherjee vs Union Of India on 28 August, 1990
M/S. Harinagar Sugar Mills Ltd vs Shyam Sundar Jhunjhunwala And ... on 25 April, 1961

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Gujarat High Court
Kanco Enterprises Limited vs Authorised Officer Of State Bank ... on 6 May, 2015
     C/SCA/6331/2015                                     ORDER


            SPECIAL CIVIL APPLICATION NO. 6331 of 2015

          KANCO ENTERPRISES LIMITED....Petitioner(s)
MR AS VAKIL, ADVOCATE for the Petitioner(s) No. 1
MR INDRAVADAN PARMAR, ADVOCATE for the Respondent(s) No. 1


                         Date : 06/05/2015

                          ORAL ORDER

1. By   way   of   this   petition   under   Article   226   of  the   Constitution   of   India,   the   petitioner   has  challenged the order dated 19.3.2015 passed by  the   Debt   Recovery   Tribunal­1,   Ahmedabad   on   an  application   for   stay   in   Securitisation  Application   No.62   of   2014   filed   by   the  petitioner   under   Section   17   of   the  Securitisation  and   Reconstruction  of   Financial  Assets   and   Enforcement   of   Security   Interest  Act,   2002   (hereinafter   referred   to   as   "the  Page 1 of 115 C/SCA/6331/2015 ORDER Act").

2. As   the   present   petition   is   filed   against   the  interim   order   and   with   the   consent   of   the  learned advocate for the petitioner and learned  advocate for respondent No.1 Bank appearing on  caveat,  the matter was  heard  at  the admission  stage itself. 

3. The   facts   which   can   be   culled   out   from   the  record of the petition are as under:­  3.1 Respondent   No.1   Bank   extended   financial  facilities to the petitioner in the year 1997­ 98   and   initially   sanctioned   credit   facilities  of approximately Rs.10.80 crores which came to  be   revised   from   time   to   time.   The   record  indicates that an indenture of mortgage came to  be   executed   on   4.4.2005   and   9.6.2006   and   a  master   agreement   was   executed   on   3.4.2008.   As  stated   in   Paragraph   2.3   of   the   petition,  respondent No.1 Bank vide sanction letter dated  20.6.2009,   sanctioned   base   limit   of   Rs.33.85  crores,   total   non­fund   base   limit   of   Rs.3.50  Page 2 of 115 C/SCA/6331/2015 ORDER crores   and   forward   contract   limit   of   Rs.2.80  crores.   It   also   appears   from   the   record   that  movable properties comprising of stocks, stocks  in   trade,   receivable,   entire   current   assets,  plant   and   machineries   of   the   petitioner   were  hypothecated.   Equitable   mortgage   of   land  admeasuring   1,51,353   sq.   mtrs.   situated   at  Village   Waldhera,   Taluka   Dholka,   District  Ahmedabad and so also the building structure as  well as plant and machinery were mortgaged. The  record   indicates   that   in   addition   to   that,  undivided   impartible   right   and   other   non­ agricultural   land   situated   at   Ambavadi,  Ahmedabad   city   and   offices   situated   in   a  building   known   as   Shitiratna   constructed   upon  the said land was also came to be executed. The  record indicates that on 18.11.2009, a deed of  equitable   mortgage   was   executed   in   favour   of  IDBI   Bank   Ltd.   to   secure   its   working   capital  term   loan   of   Rs.300   lacs   and   in   favour   of  respondent   No.1   Bank   to   secure   its   working  capital   term   loan   of   Rs.125   lacs   as   well   as  Page 3 of 115 C/SCA/6331/2015 ORDER funded   interest   term   loan   of   Rs.470   lacs.   It  further   appears   that   again   on   3.1.2011,  respondent   No.1   Bank   enhanced   the   financial  facilities   and   the   existing   forward   contract  limit was reduced to Rs.1.94 crores. The record  further   indicates   that   as   forward   contract  transactions were entered into, the said limit  was reduced. The record further indicates that  the indenture of mortgage was extended further  by   a   document   dated   7.9.2011   and   executed   by  the   petitioner   in   favour   of   respondent   No.1  Bank as well as IDBI Bank Ltd. It appears from  the record  that the  account of the  petitioner  came to be classified as Non­Performing Assets  (NPA) by respondent No.1 Bank on 30.1.2012. The  record   indicates   that   upto   22.2.2012,  respondent   No.1   Bank   debited   a   sum   of  Rs.66,55,000/­   on   account   of   loss   under   the  forward contract transactions and the same were  in   respect   of   forward   contract   transactions  that had taken place after 24.5.2011 i.e. after  the   forward   contract   limit   of   Rs.1.94   crores  Page 4 of 115 C/SCA/6331/2015 ORDER which was already exhausted.

3.2 The   record   indicates   that   thereafter,  respondent No.1 Bank issued a statutory demand  notice   dated   22.2.2012   as   provided   under  Section 13(2) of the Act, whereby a demand of  Rs.28,29,22,224.29 ps. was raised, being amount  due   and   outstanding   as   on   31.1.2012.   The  petitioner replied the said notice by its reply  dated   17.4.2012.   It   appears   that   thereafter,  respondent No.1 Bank gave response to the same  vide   its   communication   dated   27.4.2012.   It  further   appears   that   by   another   notice   dated  5.2.2013, respondent No.1 Bank raised a demand  of   Rs.11,78,81,338.00   ps.   which   came   to   be  replied by the petitioner vide its reply dated  3.4.2013. Respondent No.1 Bank replied the same  vide its reply dated 20.4.2013. Respondent No.1  Bank   thereafter   issued   a   notice   as   provided  under Section 13(4) of the Act dated 21.6.2013.

3.3 The   record   further   indicates   that   the  Page 5 of 115 C/SCA/6331/2015 ORDER petitioner   thereafter   filed   a   writ   petition  before   this   Court   being   Special   Civil  Application   No.10338   of   2013   challenging   the  notice under Section 13(4) of the Act and also  challenged   the   Vires   of   certain   provisions   of  the Act. The record indicates that the Division  Bench   of   this   Court   protected   the   petitioner  vide   order   dated   28.6.2013.   However,   the   same  was discontinued by an order dated 8.7.2013.

3.4 The   record   indicates   that   the   petitioner  challenged   the   said   order   passed   by   the  Division   Bench   of   this   Court   dated   8.7.2013  before the Hon'ble Supreme Court being Special  Leave Petition (C) No.3967 of 2014. The Hon'ble  Supreme   Court   vide   order   dated   28.2.2014  granted the order of status­quo with regard to  secured   assets   and   ultimately,   by   an   order  dated 7.3.2014, the said Special Leave Petition  came   to   be   disposed   of   with   a   direction   that  the status­quo shall be  maintained with regard  to   secured  assets  by   the   Bank   as   well  as  the  owner, till the judgment is delivered  by  this  Page 6 of 115 C/SCA/6331/2015 ORDER Court. The record indicates that ultimately, by  a   common   final   judgment   and   order   dated  24.4.2014,   the   Division   Bench   dismissed   the  matters   including   the   writ   petition   filed   by  the petitioner being Special Civil Application  No.10338   of   2013.   The   petitioner,   being  aggrieved   by   the   same,   preferred   a   Special  Leave Petition before the Hon'ble Supreme Court  in Special Leave Petition (C) No.12588 of 2014  and   it   is   a   matter   of   fact   that   the   said  Special   Leave   Petition   along   with   the   other  allied SLPs came to be dismissed by the Hon'ble  Supreme   Court,   being  Keshavlal   Khemchand   and  Sons   Pvt.   Ltd.   &   Ors.   Vs.   Union   of   India   &  Ors., reported in AIR 2015 SC 1168.

3.5 The record indicates that while the matter was  pending   before   this   Court   and   the   Hon'ble  Supreme   Court,   the   petitioner   filed   a   Civil  Suit being Civil Suit No.269 of 2013 before the  Hon'ble Calcutta High Court against respondent  No.1 Bank. The record indicates that initially,  the   Hon'ble   Calcutta   High   Court   had   granted  Page 7 of 115 C/SCA/6331/2015 ORDER stay.   Thereafter,   as   respondent   No.1   Bank  raised   the   issue  of   jurisdiction,   the   Hon'ble  Calcutta   High   Court   was   pleased   to   pass   an  order of return of plaint, for filing it before  the appropriate Court at Ahmedabad. It further  appears   that   respondent   No.1   Bank   filed   an  application as provided under Order 7  Rule 11  of   the   Code   of   Civil   Procedure,   1908,   inter­ alia,   contending   that   the   Civil   Court   has   no  jurisdiction   and   prayed   that   the   plaint   is  required to be transferred to the Debt Recovery  Tribunal­1, Ahmedabad.

3.6 It   further   appears   that   respondent   No.1   Bank  thereafter   also   filed   an   application   under  Section 14 of the Act which came to be numbered  as Securitization Case No.5 of 2014 before the  learned   District   Magistrate.   It   is   also   a  matter   of   record   that   while   the   matter   was  pending   before   the   Apex   Court,   the   petitioner  also submitted an OTS proposal dated 26.5.2014,  which was turned  down by respondent No.1  Bank  vide its reply dated 12.6.2014. 

Page 8 of 115

C/SCA/6331/2015 ORDER 3.7 It   appears   from   the   record   that   the   learned  District   Magistrate   issued   a   notice   and   on  receipt of the notice, the petitioner filed the  present  Securitization  Application  as  provided  under Section 17 of the Act on 4.6.2014 which  came   to   be   numbered   as   Securitization   Appeal  No.62   of   2014,   inter­alia,   challenging   the  demand   notice   as   well   as   the   notice   dated  21.6.2013 issued by respondent No.1 Bank under  Section 13(4) of the Act.

3.8 The   petitioner   has   raised   various   contentions  before the  Debt Recovery Tribunal in the  said  application filed under Section 17 of the Act. 

Respondent No.1 Bank herein filed its reply and  a   rejoinder   is   also   filed.   After   hearing   the  petitioner as well as the Bank by the impugned  order dated 19.3.2015, the Tribunal was pleased  to   reject   the   same.   The   record   further  indicates   that   respondent   No.1   Bank   has   also  filed   an   Original   Application   before   the   Debt  Recovery   Tribunal   under   Section   19   of   the  Page 9 of 115 C/SCA/6331/2015 ORDER Recovery   of   Debts   due   to   Banks   and   Financial  Institutions   Act,   1993   being   Original  Application   No.402   of   2014   and   the   same   is  pending.   The   record   indicates   that   the  petitioner  has also  approached BIFR by way of  Reference Case No.6 of 2013 which, as per the  record of the  petition, is still pending. The  record   indicates   that   the   petitioner   has   also  filed an application for OTS  before IDBI  Bank  Ltd. and has also initially deposited a sum of  Rs.90   lacs   with   IDBI   Bank   Ltd.   to   show   its  bonafide.   It   further   appears   that   similarly,  the   petitioner   has   also   offered   a   fresh   OTS  proposal   to   respondent   No.1   Bank   on   18.2.2015  and   has   initially   deposited   a   sum   of   Rs.1.10  crores on 25.2.2015. 

3.9 The   impugned   order   passed   upon   an   application  for   stay   in     Securitization   Appeal   No.62   of  2014   is   challenged   by   the   petitioner   in   this  petition.   Respondent   No.1   Bank   has   also   filed  an affidavit­in­reply to the contentions raised  by the petitioner and respondent No.1 Bank has  Page 10 of 115 C/SCA/6331/2015 ORDER raised   preliminary   objection   as   regards   the  very maintainability of the present petition as  predominantly   contended   in   Paragraph   4   of   the  affidavit­in­reply.  The  petitioner  has  further  filed   an   affidavit   dated   19.4.2015   and   has  contended   that   certain   contentions   raised   by  the petitioner are not  considered by the  Debt  Recovery   Tribunal   while   passing   the   impugned  order, more particularly, to canvass that non­ consideration   of   the   same   has   resulted   into  breach of principles of natural justice. 

4. Heard Mr. A.S. Vakil, learned advocate for the  petitioner   and   Mr.   Indravadan   Parmar,   learned  advocate   for   respondent   No.1   Bank   on   caveat. 

The learned advocates appearing for the parties  have   also   submitted   their   written   submissions  as well.

5. Mr.   A.S.   Vakil,   learned   advocate   for   the  petitioner   has   contended   that   even   though   the  petitioner has got a statutory remedy of appeal  as provided under Section 18 of the Act, this  Page 11 of 115 C/SCA/6331/2015 ORDER Court has power to issue prerogative writ under  Article 226 of the Constitution of India which  is plenary in nature and which is not limited  by   any   other   Act.   It   was   contended   that   even  though   there   are   inbuilt   restrictions   and   it  was   further   contended   that   an   alternative  remedy   is   not   a   bar   especially   in  contingencies,   more   particularly,   like  violation of principles of natural justice. It  was   submitted   that   in   facts   of   the   present  case, there is clear violation of principles of  natural   justice,   inasmuch   as,   that   the  contentions raised by the petitioner are either  not   considered   by   the   Tribunal   or   no   reasons  are   given   by   the   Tribunal   while   passing   the  impugned order. It was therefore contended that  the   same   amounts   to   breach   of   principles   of  natural   justice   and   therefore,   the   petitioner  has approached this Court under Article 226 of  the   Constitution   of   India   directly.   It   was  contended   that   the   Debt   Recovery   Tribunal   has  not   passed   a   reasoned   order.   It   was   further  Page 12 of 115 C/SCA/6331/2015 ORDER contended that none of the judgments lay down a  blanket   proposition   that   in   matters   arising  under   the   Act,   no   writ   should   be   entertained  directly as there is an alternative remedy. It  was   contended   that   the   petitioner   cannot   be  compelled   to   avail   statutory   remedy,   on  presumption   or   on   allegation   that   the  petitioner   has   chosen   not   to   avail   the  statutory   remedy,   more   particularly,   on   the  ground that it provides for appeal fees as well  as   pre­deposit   that   too,   against   an   interim  order. 

5.1 Mr. Vakil, elucidating the aforesaid principle,  contended   that   non­recording   of   reasons   would  constitute   violation   of  principles   of   natural  justice.   It   was   contended   that   the   rule   of  principles of natural justice requires reasons  to be given in support of an order and is like  the   basic   principles   of   natural   justice   i.e.  audi  alterem partem. It was contended that it  is the duty of every quasi judicial authority  to observe the same in proper letter and spirit  Page 13 of 115 C/SCA/6331/2015 ORDER and mere pretence of compliance  with it would  not satisfy the requirement of law. It was also  contended   that   requirement   of   recording   the  reasons   is   one   of   the   principles   of   natural  justice. Even in case of administrative orders  and   recording   of   finding   without   any   reasons  much   less   cogent   reasons   would   amount   to  violation of principles of natural justice. Mr. 

Vakil has relied upon the judgment of the Apex  Court in the case of  Kranti Associates Private  Limited & Anr. Vs. Sh. Masood Ahmed Khan & Ors. 

reported in  (2010) 9 SCC 496.  It was contended  that as held by the Apex Court in the case of  Kranti  Associates  Private   Limited  (supra),  recording   of   reason   is   now   virtually   a  component   of   human   right.   It   was   further  submitted that every adjudicating authority is  required to act fairly and fair play in action  and   has   to   give   reasons   in   support   of   the  decisions   taken   by   it.   Mr.   Vakil   has   relied  upon   the   following   judgments   to   buttress   his  contentions:­ Page 14 of 115 C/SCA/6331/2015 ORDER

(a) Siemens Engineering & Manufacturing Company of  India   Limited   Vs.   Union   of   India   &   Anr.,  reported in (1976) 2 SCC 981 = AIR 1976 SC 1785  (Paragraph 6)

(b) S.N. Mukherjee Vs. Union of India, reported in  (1990) 4 SCC 594 = AIR 1990 SC 1984 (Paragraphs  21 to 39)

(c) G.   Vallikumari   Vs.   Andhra   Education   Society   &  Anr. reported in (2010) 2 SCC 497 = AIR 2010 SC  1105. (Paragraphs 13 and 14)

(d) Kranti   Associates   Private   Limited  (supra)  (Paragraphs 14 to 51)

(e) BA   Linga   Reddy   Vs.   Karnataka   State   Transport  Authority,  reported   in  AIR   2015   SC   767  (Paragraphs 18 to 29) 5.2 Mr. Vakil further relying upon the judgments in  the   cases   of   -   (i)  MP   Industries   Limited   Vs.  Union   of   India  reported  in  AIR   1966   SC   671   @  677,  (ii)  Bhagat   Raja   Vs.   Union   of   India  Page 15 of 115 C/SCA/6331/2015 ORDER reported in  AIR 1967 SC 1606, 1610, (iii) Rama  Vilas   Service   (Private)   Limited   Vs.   C. 

Chandrashekharan  reported   in  AIR   1965   SC   107, 

(iv)  Institute   of   Chartered   Accountants   of  India   Vs.   K.L.   Ratna  reported   in  AIR   1987   SC  71,  (v)  State   of   Maharashtra   Vs.   Salem   Hasan  Khan  reported   in  AIR   1990   SC   1984,  has  contended that though no form of recording of  reasons   has   been   provided   or   prescribed   under  any   statute,   such   reasons   should   be   proper,  relevant,   germane,   intelligible   and   deal   with  the   arguments   advanced,   points   raised,   issues  involved and conclusions recorded in support of  the   order   passed   by   the   authority.   It   was  contended   that   even   while   passing   a   by­parte  interim   order,   the   administrative   as   well   as  quasi­judicial   authorities   cannot   by­pass   the  requirement   of   recording   of   reasons   and   in  absence   of   any   such   reasons,   the   petitioner  cannot be asked to avail an alternative remedy  of   filing   an   appeal   under   Section   18   of   the  Act.   It   was   further   pointed   out,   more  Page 16 of 115 C/SCA/6331/2015 ORDER particularly,   from   the   affidavit   dated  19.4.2015   that   various   points   were   raised   as  enumerated in the said affidavit; however, the  same has not been dealt with and no reasons are  given   by   the   Debt   Recovery   Tribunal   while  rejecting   the   application   filed   by   the  petitioner for interim relief. It was contended  that hearing of the interim relief application  went   on   for   4   days   before   the   Debt   Recovery  Tribunal. However, the submissions made by the  petitioner   are   not   recorded   and   by   simply  summarizing the same, the application has been  dealt   with   and   rejected.   In   light   of   the  aforesaid, Mr. Vakil submitted that there  is a  breach of principles of natural justice by the  Debt   Recovery   Tribunal   and   as   no   reasons   are  recorded in support of the order passed by it  and as the  submissions  made by the  petitioner  have   not   been   dealt   with   by   giving   elaborate  reasons, this Court may be pleased to hold that  there   is   a   breach   of   principles   of   natural  justice and entertain this petition by allowing  Page 17 of 115 C/SCA/6331/2015 ORDER the   petition   and/or   remanding   the   proceedings  to Debt Recovery Tribunal for its rehearing on  interim   relief   and   till   the   Tribunal   rehears  the parties, the petitioner may be protected. 

5.3 It is also contended by Mr. Vakil that even the  basic   principles   of   grant   of   interim   relief  namely prima­facie case, balance of convenience  and irreparable loss are not rightly considered  by the Debt Recovery Tribunal. It was contended  that   the   petitioner   is   a   running   concern   and  the   forward   contracts   which   were   undertaken  after the forward contract limit was exhausted  is   not   a   secured   debt   and   for   such   a   debt,  proceedings   under   the   Act   cannot   be   initiated  by respondent No.1 Bank. It was contended that  thus, respondent No.1 Bank has no jurisdiction  to   enforce   the   demand   notices   and   thus,   the  petitioner   has   got   a   prima­facie   case,   which  has   not   been   considered   by   the   Tribunal.   Mr.  Vakil   also   relying   upon   the   additional  affidavit   filed   in   this   proceeding,   contended  that vital contentions raised by the petitioner  Page 18 of 115 C/SCA/6331/2015 ORDER are   not   dealt   with   by   the   Debt   Recovery  Tribunal and the issue which goes to the very  jurisdiction   and   more   particularly,   the  question   whether   respondent   No.1   Bank   can  enforce   two   different   demand   notices   is   not  examined   by   the   Debt   Recovery   Tribunal   and  thus,   Debt   Recovery   Tribunal   has   wrongly   come  to the conclusion that there is no prima­facie  case   and   balance   of   convenience   is   not   in  favour   of   the   petitioner.   Relying   upon   the  averments made in the affidavit­in­reply filed  by respondent No.1 Bank, it was contended that  on the contrary, reply of respondent No.1 Bank  establishes that there is a prima­facie case in  favour   of   the   petitioner   and   balance   of  convenience   is   entirely   in   favour   of   the  petitioner   as   the   petitioner   is   a   running  Company   and   non­grant   of   interim   relief   would  completely   jeopardize   the   petitioner   bringing  it to a grinding halt. It was contended that if  the   interim   relief   is   not   granted,   the  petitioner   would   suffer   irreparable   loss,  Page 19 of 115 C/SCA/6331/2015 ORDER whereas there would not be irreparable loss to  respondent   No.1   Bank   and   therefore,   the  petitioner   is   required   to   be   protected   by  restraining   respondent   No.1   Bank   from   taking  any further measures under Section 13(4) of the  Act.   It   was   also   contended   that   power   of   the  Tribunal   under   Section   17(3)   of   the   Act   to  restore   possession   cannot   render   the   power   of  the Tribunal to grant interim relief nugatory. 

It was therefore contended that this Court may  entertain   this   petition,   even   though   the  petitioner   has   not   availed   the   alternative  remedy   under   Section   18   of   the   Act   and   grant  the   interim   relief   as   prayed   for   before   the  Tribunal or by quashing and setting aside the  impugned order, remand the proceedings back to  the   Tribunal   with   a   direction   to   rehear   the  parties   on   interim   relief.   It   was   therefore  submitted that on all these aspects, this Court  has jurisdiction to issue a prerogative writ by  entertaining the petition as prayed for. 

6. Per   contra,   Mr.   Indravadan   Parmar,   learned  Page 20 of 115 C/SCA/6331/2015 ORDER advocate   for   respondent   No.1   Bank   on   caveat  submitted   that   the   jurisdiction   of   this   Court  under Article 227 of the Constitution of India  is a  supervisory  jurisdiction and the  same is  regulated   by   the   statute   and   power   of  superintendence   under   Article   227   of   the  Constitution of India. It was further submitted  that   this   Court   in   exercise   of   powers   under  Article 226 of the Constitution of India cannot  re­appreciate or evaluate the evidence and this  Court cannot act as an Appellate Court. It was  further submitted that only because easy access  to   justice   may   be   available   by   way   of   a  petition under Article 227 of the Constitution  of India, the same cannot be used as a licence  to by­pass an efficacious statutory remedy. It  was therefore contended that this Court may not  entertain   the   petition   permitting   the  petitioner to by­pass the statutory remedy. Mr. 

Parmar has relied upon the following judgments  on the aforesaid aspect:­

(a) Ranjeet Singh Vs. Ravi Prakash, reported in AIR  Page 21 of 115 C/SCA/6331/2015 ORDER 2004 SC 3892 (Paragraph 4)

(b) State of Haryana  & Ors. Manoj Kumar,  reported  in (2010) 4 SCC 350 (Paragraphs 17 to 23)

(c) Sameer   Suresh   Gupta   Vs.   Rahul   Kumar   Agarwal,  reported in  (2013) 9 SCC 374  (Paragraphs 6 and 


(d) Punjab   National   Bank   Vs.   O.C.   Krishnan,  reported in AIR 2001 SC 3208 (Paragraph 6)

(e) Gujarat   Fisheries   Central   Co­Op.   Association  Ltd. Vs. Union of India & Ors. reported in 2003  (2) GLR 1639 (Paragraphs 4 and 5) 

(f) State   Bank   of   India   Vs.   Allied   Chemical  Laboratories  & Anr.,  reported in  (2006)  9 SCC  252 (Paragraphs 6 and 7) 6.1 It   was   submitted   that   the   petitioner   is   a  defaulter   of   public   financial   system   and  therefore, the petitioner does not deserve any  reliefs   claimed   for   in   this   petition.   It   was  contended   that   the   present   petition   is   filed  Page 22 of 115 C/SCA/6331/2015 ORDER only   to   restrain   respondent   No.1   Bank   from  pursuing   its   action   and   right   as   conferred  under   the   Act.   It   was   contended   that   the  present   petition   is   nothing   but   a   tool   and  device   to   avoid   payment   of   deposit   of   amount  which   is   a   pre­condition   for   approaching   the  appellate forum under Section 18 of the Act and  such   an   attempt   needs   to   be   strongly  discouraged   by   this   Court.   It   was   further  contended   that   any   interference   by   this   Court  would   become   a   precedent   which   may   lead   to  short­circuit   and   circumvent   statutory  procedure   by   every   defaulter   who   will   ignore  and   by­pass   statutory   remedy   of   filing   an  appeal.  Relying upon the judgment of the  Apex  Court in the case of  M/s. Transcore Vs. Union  of India & Anr. reported in AIR 2007 SC 712, it  was   further   contended   that   the   same   would  frustrate the object of the Act. It is further  contended   that   there   is   no   hardship   as  contended by the petitioner and as such in the  impugned order, the Tribunal has dealt with the  Page 23 of 115 C/SCA/6331/2015 ORDER contentions   raised   by   the   petitioner   and   even  if   it   is   presumed   that   it   is   not   a   proper  consideration,   only   the   appeal   would   be  maintainable. It is further contended that the  same can be done only by an Appellate Court and  not   by   a   writ   Court   and   writ   Court   may   not  issue   any   prerogative   writ   or   a   writ   of  certiorari.   It   was   contended   that   the  contentions raised by the petitioner mainly on  the plank that as some grounds are not observed  in the impugned order, it would not amount to  any   breach   of   principles   of   natural   justice. 

Mr.   Parmar   has   further   relied   upon   the  following judgments:­

(i) United   Bank   of   India   Vs.   Satyawati   Tondon   &  Ors.  reported in  (2010) 8  SCC 110  (Paragraphs  42 to 45 and 49, 50 and 55)

(ii) Kanaiyalal Lalchand Sachdev & Ors. Vs. State of  Maharashtra & Ors.,  reported in   (2011) 2 SCC  782 (Paragraphs 23 and 25)

(iii)Easland   Combines,   Coimbatore   Vs.   Collector   of  Page 24 of 115 C/SCA/6331/2015 ORDER Central Excise, Coimbatore,  reported in  (2003)  3 SCC 410 (Paragraph 18)

(iv) Ratanlal Vs. Bardi Bai & Ors.  reported in  AIR  2003 Madhya Pradesh 248 (Paragraph 13)

(v) Tajender   Singh   Ghambhir   &   Anr.   Vs.   Gurpree  Singh   &   Ors.  reported   in  (2014)   10   SCC   702  (Paragraph 11) 6.2 It was also contended on behalf  of  respondent  No.1 that it cannot be said that the impugned  judgment   did   not   record   submissions   that   were  canvassed on behalf  of  the petitioner. It was  contended that recording of evidence cannot be  equated with recording of reasons in an order. 

It was contended that the grounds raised in the  petition itself are self­defeating and it would  require   determination   of   complex   nature   of  disputed   question   of   fact   which   demands  elaborate   inquiry/examination   of   material   and  evidence   to   adjudicate   the  lis  and   such   a  remedy is already provided under Section 18 of  Page 25 of 115 C/SCA/6331/2015 ORDER the Act. It was further submitted that in light  of the ratio laid down by the Apex Court in the  case   of  Kanaiyalal   Lalchand   Sachdev  (supra),  the petition deserves to be dismissed  and the  petitioner   be   relegated   to   the   alternative  remedy   of   filing   an   appeal.   It   was   further  submitted that the Tribunal, after appreciating  the contentions raised by both the parties, did  not find any prima­facie case and/or balance of  convenience. It was contended that the Tribunal  has   rightly   considered   the   material   on   record  and   considering   the   huge   due   payable   by   the  petitioner, has rightly come to the conclusion  that   there   is   no   irreparable   loss.   It   was  therefore submitted that the petition is devoid  of merits and the same deserves to be dismissed  in limine. 

7. Mr.   Apurva   Vakil,   learned   advocate   for   the  petitioner reiterated the contentions which are  raised in the petition and contended that there  is   no   provision   under   the   Act   to   recover  unsecured   debt   and   the   petitioner   has  Page 26 of 115 C/SCA/6331/2015 ORDER specifically   raised   the   contention   that   the  notices   impugned   are   unenforcible   and   the  reasons which are enumerated in Paragraph 5 of  the   petition   clearly   sets   out   the   reason   why  the   present   petition   is   maintainable   under  Article 226 of the Constitution of India and/or  Article 227 of the Constitution of India and as  to   why   this   Court   may   entertain   the   petition  despite existence of remedy under Section 18 of  the Act. 

8. No other or further submissions are made by the  learned advocates appearing for the respective  parties. 

9. Before reverting to the submissions made by the  learned advocates appearing for the parties, it  would be appropriate to quote Sections 17 and  18 of the Act. 

"17. Right to appeal­  (1) Any person  (including   borrower),   aggrieved   by  any   of   the   measures   referred   to   in  sub­section   (4)   of   section   13   taken  by   the   secured   creditor   or   his  authorised   officer   under   this  Chapter,   may   make   an   application  Page 27 of 115 C/SCA/6331/2015 ORDER alongwith   such   fee,   as   may   be  prescribed   to   the   Debts   Recovery  Tribunal   having   jurisdiction   in   the  matter   within   forty­five   days   from  the   date   on   which   such   measure   had  been taken:

PROVIDED   that   different   fees   may   be  prescribed for making the application  by the borrower and the person other  than the borrower.

(2) The   Debts   Recovery   Tribunal  shall   consider   whether   any   of   the  measures   referred   to   in   sub­section  (4)   of   section   13   taken   by   the  secured   creditor   for   enforcement   of  security   are   in   accordance   with   the  provisions of this Act and the rules  made thereunder.

(3) If, the Debts Recovery Tribunal,  after   examining   the   facts   and  circumstances   of   the   case   and  evidence   produced   by   the   parties,  comes  to  the  conclusion  that  any  of  the   measures   referred   to   in   sub­ section  (4)  of   section  13,  taken  by  the   secured   creditor   are   not   in  accordance   with   the   provisions   of  this   Act   and   the   rules   made  thereunder,   and   require   restoration  of the management of the business to  the   borrower   or   restoration   of  possession   of   the   secured   assets   to  the   borrower,   it   may   by   order,  declare   the   recourse   to   any   one   or  more   measures   referred   to   in   sub­ section   (4)   of   section   13   taken   by  the secured creditors as invalid and  restore the possession of the secured  assets to the borrower or restore the  management   of   the   business   to   the  borrower,   as   the   case   may   be,   and  Page 28 of 115 C/SCA/6331/2015 ORDER pass   such   order   as   it   may   consider  appropriate and necessary in relation  to any of the recourse taken by the  secured   creditor   under   sub­section  (4) of section 13.

(4)   If,   the   Debts   Recovery   Tribunal  declares   the   recourse   taken   by   a  secured   creditor   under   sub­section  (4)  of   section  13,  is  in   accordance  with  the  provisions  of  this  Act  and  the   rules   made   thereunder,   then,  notwithstanding anything contained in  any other law for the time being in  force, the secured creditor shall be  entitled  to  take  recourse  to  one  or  more of the measures specified under  sub­section   (4)   of   section   13   to  recover his secured debt.

(5)   Any   application   made   under   sub­ section   (1)   shall   be   dealt   with   by  the   Debts   Recovery   Tribunal   as  expeditiously   as   possible   and  disposed   of   within   sixty   days   from  the date of such application:

PROVIDED   that   the   Debts   Recovery  Tribunal   may,   from   time   to   time,  extend the said period for reasons to  be recorded in writing, so, however,  that the total period of pendency of  the   application   with   the   Debts  Recovery   Tribunal,   shall   not   exceed  four  months  from  the  date  of  making  of   such   application   made   under   sub­ section (1).

(6)   If   the   application   is   not  disposed   of   by   the   Debts   Recovery  Tribunal   within   the   period   of   four  months   as   specified   in   sub­section  (5), any part to the application may  make an application, in such form as  Page 29 of 115 C/SCA/6331/2015 ORDER may   be   prescribed,   to   the   Appellate  Tribunal   for   directing   the   Debts  Recovery   Tribunal   for   expeditious  disposal   of   the   application   pending  before   the   Debts   Recovery   Tribunal  and   the   Appellate   Tribunal   may,   on  such   application,   make   an   order   for  expeditious   disposal   of   the   pending  application   by   the   Debts   Recovery  Tribunal.

(7)   Save   as   otherwise   provided   in  this Act, the Debts Recovery Tribunal  shall, as far as may be, dispose of  the   application   in   accordance   with  the   provisions   of   the   Recovery   of  Debts   Due   to   Banks   and   Financial  Institutions Act, 1993 and the rules  made thereunder.

17A. Making   of   application   to   Court  of   District   Judge   in   certain   cases­  In the case of a borrower residing in  the  State  of  Jammu  and  Kashmir,  the  application under section 17 shall be  made  to  the  Court  of   District  Judge  in   that   State   having   jurisdiction  over the borrower which shall pass an  order on such application.

18. Appeal to Appellate Tribunal­(1)  Any   person   aggrieved,   by   any   order  made   by   the   Debts   Recovery   Tribunal  under   section   17,   may   prefer   an  appeal alongwith such fee, as may be  prescribed to the Appellate Tribunal  within  thirty  days  from  the  date  of  receipt   of   the   order   of   Debts  Recovery Tribunal:

PROVIDED   that   different   fees   may   be  prescribed   for   filing   an   appeal   by  the  borrower  or  by   the  person  other  than the borrower:

Page 30 of 115

C/SCA/6331/2015 ORDER PROVIDED further that no appeal shall  be   entertained   unless   the   borrower  has   deposited   with   the   Appellate  Tribunal   fifty   per   cent.   of   the  amount   of   debt   due   from   him,   as  claimed   by   the   secured   creditors   or  determined   by   the   Debts   Recovery  Tribunal, whichever is less:

PROVIDED   also   that   the   Appellate  Tribunal  may,  for  the  reasons  to  be  recorded   in   writing,   reduce   the  amount   to   not   less   than   twenty­five  per cent. of debt referred to in the  second proviso.

18A. Validation of fees levied ­  Any  fee   levied   and   collected   for  preferring,   before   the   commencement  of   the   Enforcement   of   Security  Interest   and   Recovery   of   Debts   Laws  (Amendment)   Act,   2004,   an   appeal   to  the   Debts   Recovery   Tribunal   or   the  Appellate   Tribunal   under   this   Act,  shall  be  deemed  always  to  have  been  levied   and   collected   in   accordance  with   law   as   if   amendments   made   to  sections   17   and   18   of   this   Act   by  sections   11   and   12   of   the   said   Act  were in force at all material times.

18B. Appeal to High Court in certain  cases ­  Any borrower residing in the  State   of   Jammu   and   Kashmir   and  aggrieved   by   any   order   made   by   the  Court of District Judge under section  17A may prefer an appeal, to the High  Court   having   jurisdiction   over   such  Court,   within   thirty   days   from   the  date of receipt of the order of the  Court of District Judge:

PROVIDED   that   no   appeal   shall   be  Page 31 of 115 C/SCA/6331/2015 ORDER preferred   unless   the   borrower   has  deposited, with the Jammu and Kashmir  High   Court,   fifty   per   cent   of   the  amount   of   the   debt   due   from   him   as  claimed   by   the   secured   creditor   or  determined   by   the   Court   of   District  Judge, whichever is less:

PROVIDED further that the High Court  may,  for  the  reasons  to   be  recorded  in writing, reduce the amount to not  less   than   twenty­five   per   cent.   of  the   debt   referred   to   in   the   first  proviso.

18C. Right   to   lodge   a   caveat   -  (1)  Where an application or an appeal is  expected to be made or has been made  under   sub­section   (1)   of   section   17  or section 17A or sub­section (1) of  section   18   or   section   18B,   the  Secured   Creditor   or   any   person  claiming a right to appear before the  Tribunal   or   the   Court   of   District  Judge   or   the   Appellate   Tribunal   or  the High Court, as the case may be,  on the hearing of such application or  appeal, may lodge a caveat in respect  thereof. 

(2) Where   a   caveat   has   been   lodged  under sub­section (1) ­

(a) the Secured Creditor by whom the  caveat has been lodged (hereafter in  this   section   referred   to   as   the  caveator)   shall   serve   notice   of   the  caveat   by   registered   post,  acknowledgment due, on the person by  whom  the  application  has  been  or  is  expected to be made under sub­section  (1); 

(b) any   person   by   whom   the   caveat  Page 32 of 115 C/SCA/6331/2015 ORDER has   been   lodged   (hereafter   in   this  section referred to as the caveator)  shall  serve  notice  of   the  caveat  by  registered   post,   acknowledgment   due,  on the person by whom the application  has   been   or   is   expected   to   be   made  under sub­section (1). 

(3) Where   after   a   caveat   has   been  lodged   under   sub­section   (1)   any  application or appeal is filed before  the Tribunal or the court of District  Judge   or   the   Appellate   Tribunal   or  the High Court, as the case may be,  the Tribunal or the District Judge or  the   Appellate   Tribunal   or   the   High  Court,   as   the   case   may   be,   shall  serve   a   notice   of   application   or  appeal filed by the applicant or the  appellant on the caveator.

(4) Where a notice of any caveat has  been  served  on   the  applicant  or  the  appellant,   he   shall   periodically  furnish  the  caveator  with  a  copy  of  the application or the appeal made by  him and also with copies of any paper  or document which has been or may be  filed   by   him   in   support   of   the  application or the appeal.

(5) Where   a   caveat   has   been   lodged  under   sub­section   (1),   such   caveat  shall  not  remain  in  force  after  the  expiry  of   the  period  of   ninety  days  from the date on which it was lodged  unless   the   application   or   appeal  referred   to   in   sub­section   (1)   has  been   made   before   the   expiry   of   the  said period."

10. It   is   an   admitted   position   that   the   present  Page 33 of 115 C/SCA/6331/2015 ORDER petition   is   filed   directly   by   the   petitioner  under Article 226 of the Constitution of India  challenging the order dated 19.3.2015 passed by  the   Debt   Recovery   Tribunal­1,   Ahmedabad   on   an  application   for   stay   in   Securitisation  Application   No.62   of   2014   filed   by   the  petitioner,   pending   the   main   application.   The  provisions of Section 18 of the Act are crystal  clear   and   the   same   provides   an   alternative  efficacious   remedy   to   the   petitioner.   The  statutory   appeal   is   provided   under   the   said  provision. The learned advocates appearing for  the parties have  relied upon  the judgments as  enumerated above.

11. In   the   case   of  Siemens   Engineering   &  Manufacturing Company of India Limited (supra),  it has been observed as under:­ "6. Before we part with this appeal,  we   must   express   our   regret   at   the  manner   in   which   the   Assistant  Collector,   the   Collector   and   the  Government   of   India   disposed   of   the  proceedings   before   them.   It   is  incontrovertible that the proceedings  before the Assistant Collector arising  Page 34 of 115 C/SCA/6331/2015 ORDER from   the   notices   demanding  differential duty were quasi­judicial  proceedings   and   so   also   were   the  proceedings   in   revision   before   the  Collector and the Government of India.  Indeed, this was not disputed by the  learned counsel appearing on behalf of  the respondents. It is now settled law  that where an authority makes an order  in   exercise   of   a   quasi­judicial  function,  it   must   record  its   reasons  in   support   of   the  order   it   makes.  Every   quasi­judicial   order   must   be  supported   by   reasons.   That   has   been  laid down by a long line of decisions  of this Court ending with N. M. Desai  v.   Testeels   Ltd.,   C.   A.   No.   245   of  1970 decided on 17­12­1975 (SC). But,  unfortunately, the Assistant Collector  did not choose to give any reasons in  support   of   the   order   made   by   him  confirming the demand for differential  duty. This was in plain disregard of  the requirement of law. The Collector  in   revision   did   give   some   sort   of  reason but it was hardly satisfactory.  He did not deal in his order with the  arguments   advanced   by   the   appellants  in   their   representation   dated   8th  December, 1961 which were repeated in  the   subsequent   representation   dated  4th   June,   1965.   It   is   not   suggested  that the Collector should have made an  elaborate   order   discussing   the  arguments   of   the   appellants   in   the  manner   of   a   court   of   law.   But   the  order of the Collector could have been  little more explicit and articulate so  as to lend assurance that the case of  the   appellants   had   been   properly  considered   by   him.   If   courts   of   law  are   to   be   replaced  by   administrative  authorities and tribunals, as indeed,  in   some   kinds   of   cases,   with   the  Page 35 of 115 C/SCA/6331/2015 ORDER 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   quasi­judicial  function will be able to justify their  existence   and   carry   credibility   with  the people by inspiring confidence in  the   adjudicatory   process.   The   rule  requiring   reasons   to   be   given   in  support   of   an   order   is,   like   the  principle   of   audi   alteram   partem,   a  basic   principle   of   natural   justice  which must inform every quasi­judicial  process and this rule must be observed  in its proper spirit and mere pretence  of   compliance   with   it   would   not  satisfy   the   requirement   of   law.   The  Government   of   India   also   failed   to  give   any   reasons   in   support   of   its  order   rejecting   the   revision  application.  But   we   may   presume  that  in rejecting the revision application,  it   adopted   the   same   reason   which  prevailed   with   the   Collector.   The  reason given by the Collector was, as  already   pointed   out,   hardly  satisfactory and it would, therefore,  have been better if the Government of  India   had   given   proper   and   adequate  reasons   dealing   with   the   arguments  advanced  on   behalf  of   the   appellants  while   rejecting   the   revision  application. We hope and trust that in  future the Customs Authorities will be  more careful in adjudicating upon the  proceedings which come before them and  pass properly reasoned orders, so that  Page 36 of 115 C/SCA/6331/2015 ORDER those who are affected by such orders  are   assured   that   their   case   has  received   proper   consideration   at   the  hands   of   the   Customs  authorities  and  the validity of the adjudication made  by the Custom authorities can also be  satisfactorily   tested   in   a   superior  tribunal or court. In fact in would be  desirable that in cases arising under  Customs and Excise laws an independent  quasi­judicial   tribunal,   like   the  Income­tax   Appellate   Tribunal   or   the  Foreign Exchange Regulation Appellate  Board, is set up which would finally  dispose   of   appeals   and   revision  applications under these laws instead  of   leaving  the   determination  of   such  appeals   and   revision   applications   to  the   Government   of   India.   An  independent   quasi­judical   tribunal  would   definitely   inspire   greater  confidence in the public mind."

12. In the case of  S.N. Mukherjee  (supra), it has  been observed as under:­ "21.   The   question   as   to   whether   an  administrative authority should record  the reasons for its decision has come  up for consideration before this Court  in a number of cases.

22. In Harinagar Sugar Mills Ltd. v.  Shyam   Sundar   Jhunjhunwala,   (1962)   2  SCR   339   :   (AIR   1961   SC   1669),   a  Constitution   Bench   of   this   Court,  while dealing with an order­passed by  the Central Government in exercise of  its   appellate   powers   under   Section  114(3) of the Companies Act, 1956 in  the matter of refusal by a company to  register  the   transfer  of   shares,  has  held that there was no proper trial of  Page 37 of 115 C/SCA/6331/2015 ORDER the   appeals   before   the   Central  Government­ since no reasons had been  given in support of the order passed  by the Deputy Secretary who heard the  appeals.   In   that   case   it   has   been  observed:

"If the Central Government acts as a  tribunal   exercising   judicial   powers  and   the   exercise   of   that   power   is  subject   to   the   jurisdiction   of   this  Court   under   Article   136   of   the  Constitution   we   fail   to   see   how   the  power of this Court can be effectively  exercised if reasons are not given by  the   Central  Government  in   support  of  its order." (p. 357) (of SCR): (at p.  1678 of AIR)

23. In Madhya Pradesh Industries Ltd.  v. Union of India, (1966) 1 SCR 466:  (AIR 1966 SC 671) the order passed by  the Central Government dismissing the  revision petition under Rule 55 of the  Mineral   Concession   Rules,   1960,   was  challenged   before   this   Court   on   the  ground   that   it   did   not   contain  reasons.   Bachawat,   J.,   speaking   for  himself   and   Mudholkar,   J.,   rejected  this contention on the view that the  reason   for   rejecting   the   revision  application   appeared   on   the   face   of  the   order   because   the   Central  Government had agreed with the reasons  given by the State Government in its  order.   The   learned   Judges   did   not  agree   with   the   submission   that  omission   to   give   reasons   for   the  decision   is   of   itself   a   sufficient  ground for quashing it and held that  for   the   purpose   of   an   appeal   under  Article   136   orders   of   courts   and  tribunals  stand  on   the   same  footing.  The learned Judges pointed out that an  Page 38 of 115 C/SCA/6331/2015 ORDER order   of   court   dismissing  a   revision  application often gives no reasons but  this   is   not   a   sufficient   ground   for  quashing it and likewise an order of  an administrative tribunal rejecting a  revision   application   cannot   be  pronounced to be invalid on the sole  ground that it does not give reasons  for   the   rejection.   The   decision   in  Hari Nagar Sugar Mills case (AIR 1961  SC 1669) (supra) was distinguished on  the   ground   that   in   that   case   the  Central   Government   had   reversed   the  decision   appealed   against   without  giving any reasons and the record did  not   disclose  any   apparent  ground  for  the   reversal'.   According   to   the  learned   Judges   there   is   a   vital  difference   between   an   order   of  reversal  and   an   order  of   affirmance.  Subba Rao, J., as he then was, did not  concur with this view and found that  the   order   of   the   Central   Government  was   vitiated   as   it   did   not   disclose  any reasons for rejecting the revision  application.   The   learned   Judge   has  observed:

"In   the   context   of   a   welfare   State,  administrative tribunals have come to  stay.   Indeed,  they  are   the   necessary  concomitants  of   a   welfare  State.  But  arbitrariness   in   their   functioning  destroys   the   concept   of   a   welfare  State   itself.   Self­discipline   and  supervision   exclude   or   at   any   rate  minimize   arbitrariness.   The   least   a  tribunal   can   do   is   to   disclose   its  mind.   The   compulsion   of   disclosure  guarantees   consideration.   The  condition   to   give   reasons   introduces  clarity   and   excludes   or   at   any   rate  minimizes   arbitrariness;   it   gives  satisfaction to the party against whom  Page 39 of 115 C/SCA/6331/2015 ORDER the order is made; and it also enables  an appellate' or supervisory court to  keep   the   tribunals   within   bounds.   A  reasoned   order   is   a   desirable  condition  of   judicial  disposal  "   (p. 

472) (of SCR) : (at p. 674 of AIR 1966  SC 671).

"If tribunals can make orders without  giving reasons, the said power in the.  hands   of   unscrupulous   or   dishonest  officers may turn out to be a potent  weapon   for   abuse   of   power.   But,   if  reasons for an order are to be given,  it will be an effective restraint on  such   abuse,   as   the   order,   if   it  discloses   extraneous   or   irrelevant  considerations,   will   be   subject   to  judicial   scrutiny   and   correction.   A  speaking order will at its best be a  reasonable   and   at   its   worst   be   at  least   a   plausible   one.   The   public  should   not   be   deprived   of   this   only  safeguard." (p. 472 of SCR) : (at pp.  674­75 of AIR).

"There   is   an   essential   distinction  between a court and an administrative  tribunal. A Judge is trained to look  at things objectively, uninfluenced by  considerations   of   policy   or  expediency;   but   an   executive   officer  generally   looks   at   things   from   the  standpoint   of   policy   and   expediency.  The   habit   of   mind   of   an   executive  officer  so   formed  cannot  be   expected  to change from function to function or  from   act   to   act.   So   it   is   essential  that   some   restrictions   shall   be  imposed on tribunals in the matter of  passing orders affecting the rights of  parties; and the least they should do  is to give reasons for their orders.  Even in the case of appellate courts  Page 40 of 115 C/SCA/6331/2015 ORDER invariably   reasons   are   given,   except  when   they   dismiss   an   appeal   or  revision in limine and that is because  the   appellate   or   revisional   court  agrees  with   the   reasoned  judgment  of  the subordinate court or there are no  legally   permissible   grounds   to  interfere   with   it.   But   the   same  reasoning cannot apply to an appellate  tribunal,   for   as   often   as   not   the  order of the first tribunal is laconic  and does not give any reasons." (pp.  472­73) (of SCR) : (at p. 675 of AIR).

24.   With   reference   to   an   order   of  affirmance the learned Judge observed  that where the original tribunal gives  reasons,   the   appellate   tribunal   may  dismiss the appeal or the revision, as  the case may be, agreeing with those  reasons and that what is essential is  that   reasons   shall   be   given   by   an  appellate   or   revisional   tribunal  expressly   or   by   reference   to   those  given by the original tribunal.

25.   This   matter   was   considered   by   a  Constitution   Bench   of   this   Court   in  Bhagat   Raja   case   (1967   (3)   SCR   302:  AIR 1967 SC 1606) (supra) where also  the   order   under   challenge   had   been  passed   by   the   Central   Government   in  exercise   of   its   revisional   powers  under   Section   30   of   the   Mines   and  Minerals (Regulation and Development)  Act, 1957 read with rules 54 and 55 of  the   Mineral   Concession   Rules,   1960.  Dealing   with   the   question   as   to  whether   it   was   incumbent   on   the  Central Government to give any reasons  for its decision on review this Court  has observed :

"The   decisions  of   tribunals  in   India  Page 41 of 115 C/SCA/6331/2015 ORDER are subject to the supervisory powers  of the High Courts under Art. 227 of  the   Constitution   and   of   appellate  powers of this Court under Art. 136.  It goes without saying that both the  High Court and this Court are placed  under   a   great   disadvantage   if   no  reasons are given and the revision is  dismissed   curtly   by   the   use   of   the  single   word   "rejected",   or  "dismissed."   In   such   a   case,   this  Court can probably only, exercise its  appellate   jurisdiction   satisfactorily  by examining the entire records of the  case and after giving a hearing come  to its conclusion on the merits of the  appeal. This will certainly be a very  unsatisfactory method of dealing with  the appeal." (p. 309) (of SCR): (at p.  1610 of AIR).

26.   This   Court   has   referred   to   the  decision in Madhya Pradesh Industries  case (AIR 1966 SC 671) (supra) and the  observations   of   Subba   Rao,   J.,  referred   to   above,   in   that   decision  have been quoted with approval. After  taking   note   of   the   observations   of  Bachawat,   J.,   in   that   case,   the  learned Judges have held :

"After all a tribunal which exercises  judicial or quasi­judicial powers can  certainly indicate its mind as to why  it acts in a particular way and when  important   rights   of   parties   of   far­ reaching   consequences   to   them   are  adjudicated upon in a summary fashion,  without giving a personal hearing when  proposals   and   counter   proposals   are  made and examined, the least that can  be expected is that the tribunal shall  tell   the   party   why   the   decision   is  going against him in all cases where  Page 42 of 115 C/SCA/6331/2015 ORDER the   law   gives   a   further   right   of  appeal."   (p.   315)   (of   SCR)   :   (at   p.  1613 of AIR 1967 SC 1606).

27. Reference has already been made to  Som   Datt   Datta's   case   (AIR   1969   SC 

414)   (supra)   wherein   a   Constitution  Bench of this Court has held that the  confirming authority, while confirming  the findings and sentence of .a court­ martial,   and   the   Central   Government,  while   dealing   with   an   appeal   under  Section   165   of   the   Act,   are   not  required   to   record   the   reasons   for  their   decision   and   it   has   been  observed   that   apart   from   any  requirement imposed by the statute or  statutory rule either expressly or by  necessary implication, it could not be  said   that   there   is   any   general  principle   or   any   rule   of   natural  justice   that   a   statutory   tribunal  should always and in every case give  reasons in support of its decision. In  that   case   the   Court   was   primarily  concerned   with   the   interpretation   of  the   provisions   of   Act   and   the   Army  Rules, 1954. There is no reference to  the   earlier   decisions   in   Harinagar  Sugar   Mills   case   (AIR   1961   SC   1669)  (supra) and Bhagat Raja case (AIR 1967  SC 1606) (supra) wherein the duty to  record reasons was imposed in view of  the   appellate   jurisdiction   of   this  Court and the supervisory jurisdiction  of the High Court under Articles 136  and 227 of the Constitution of India  respectively.

28. In Tranvancore Rayon Ltd. v. Union  of India, (1970) 3 SCR 40: (AIR 1971  SC 862) this Court has observed: "The Court insists upon disclosure of  reasons in support of the order on two  Page 43 of 115 C/SCA/6331/2015 ORDER grounds: one, that the party aggrieved  in a proceedings before the High Court  or this Court has the opportunity to  demonstrate   that   the   reasons   which  persuaded the authority to reject his  case   were  erroneous;  the   other,  that  the   obligation   to   record   reasons  operates   as   a   deterrent   against  possible   arbitrary   action   by   the  executive authority invested with the  judicial   power."   (p.   46)   (of   SCR)   :  (at p. 866 of AIR).

29. In Mahabir Prasad Santosh Kumar v.  State of U. P. (1970 (1) SCR 201 : AIR  1970   SC   1302)   (supra)   the   District  Magistrate had cancelled the. licence  granted under the U. P. Sugar Dealers'  Licensing   Order,   1962   without   giving  any   reason   and   the   State   Government  had   dismissed  the   appeal  against  the  said order of the District Magistrate  without   recording   the   reasons.   This  Court has held:

"The   practice   of   the   executive  authority dismissing statutory appeal  against   orders   which   prima   facie  seriously prejudice the rights of the  aggrieved party without giving reasons  is a negation of the rule of law." (p. 

204) (of SCR): (at p. 1304 of AIR).

"Recording of reasons in support of a  decision   on   a   disputed   claim   by   a  quasi­judicial authority ensures that  the   decision  is   reached  according  to  law and is not the result of caprice,  whim or fancy or reached on grounds of  policy or expediency. A party to the  dispute is ordinarily entitled to know  the grounds on which the authority has  rejected   his   claim.   If   the   order   is  subject   to   appeal,   the   necessity   to  Page 44 of 115 C/SCA/6331/2015 ORDER record reasons is greater, for without  recorded   reasons   the   appellate  authority has no material on which it  may   determine  whether  the   facts  were  properly ascertained, the relevant law  was correctly applied and the decision  was just.' (p. 205) (of SCR): (at p.  1304 of AIR).

30. In Woolcombers of India Ltd. case  (1974 (1) SCR 504 : AIR 1973 SC 2758)  (supra) this Court was dealing with an  award   of   an   Industrial   Tribunal.   It  was found that the award stated only  the   conclusions   and   it   did   not   give  the supporting reasons. This Court has  observed :

"The giving of reasons in support of  their   conclusions   by   judicial   and  quasi­judicial   authorities   when  exercising   initial   jurisdiction   is  essential for various reasons. First,  it   is   calculated   to   prevent  unconscious,   unfairness   or  arbitrariness   in   reaching   the  conclusions.   The   very   search   for  reasons will put the authority on the  alert   and   minimise   the   chances   of  unconscious   infiltration   of   personal  bias or unfairness in the conclusion.  The   authority   will   adduce   reasons  which   will   be   regarded   as   fair   and  legitimate   by   a   reasonable   man   and  will discard irrelevant or extraneous  considerations. Second, it is a well­ known   principle   that   justice   should  not   only   be   done   but   should   also  appear   to   be   done.   Unreasoned  conclusions may be just but they may  not   appear   to   be   just   to   those   who  read   them.   Reasoned   conclusions,   on  the   other   hand,   will   have   also   the  appearance   of   justice.   Third,   it  Page 45 of 115 C/SCA/6331/2015 ORDER should   be   remembered   that   an   appeal  generally   lies   from   the   decision   of  judicial   and   quasi­judicial  authorities  to   this   Court  by   special  leave   granted   under   Article   136.   A  judgment  which   does   not   disclose  the  reasons  will  be   of   little  assistance  to the Court." (p. 507) (of SCR) : (at  p. 2761 of AIR).

31.   In   Siemens   Engineering   and  Manufacturing   Co.   of   India   Limited  case (1976 Suppl SCR 489: AIR 1976 SC  1785)   (supra)  this  Court  was   dealing  with   an   appeal   against   the   order   of  the   Central  Government  on   a   revision  application under the Sea Customs Act,  1878. This Court has laid down: "It is now settled law that where an  authority  makes  an   order  in   exercise  of   a   quasi­judicial  function  it   must  record its reasons in support of the  order   it   makes.   Every   quasi­judicial  order   must   be   supported  by   reasons."  (p.   495)   (of   SCR)   :   (at   p.   1789   of  AIR).

"If courts of law are to be replaced  by   administrative   authorities   and  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  quasi­judicial   function   will   be   able  to   justify  their  existence  and   carry  credibility   with   the   people   by  Page 46 of 115 C/SCA/6331/2015 ORDER inspiring   confidence   in   the  adjudicatory   process.   The   rule  requiring   reasons   to   be   given   in  support   of   an   order   is,   like   the  principle   of   audi   alteram   partem,   a  basic   principle   of   natural   justice  which must inform every quasi­judicial  process and this rule must be observed  in its proper spirit and mere pretence  of   compliance   with   it   would   not  satisfy  the   requirement  of   law."   (p. 

496) (of SCR) : (at p. 1789 of AIR).

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

"....... while it may be necessary for  a   disciplinary   or   administrative  authority   exercising   quasi­judicial  functions   to   state   the   reasons   in  support   of   its   order   if   it   differs  from   the   conclusions   arrived   at   and  the   recommendations   made   by   the  Inquiry Officer in view of the scheme  of a particular enactment or the rules  made   thereunder,   it   would   be   laying  down   the   proposition   too   broadly   to  say that even an ordinary concurrence  must   be   supported   by   reasons."   (p. 

208) (of SCR) : (at p. 574 of AIR).

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33. In Raipur Development Authority v.  M/s.   Chokhamal   Contractors   (1989)   2  SCC   721   :   (AIR   1990   SC   1426)   a  Constitution. Bench of this Court was  considering the question whether it is  obligatory for an arbitrator under the  Arbitration Act, 1940 to give reasons  for the award. It was argued that the  requirement of giving reasons for the  decision   is   a   part   of   the   rules   of  natural   justice   which   are   also  applicable   to   the   award   of   an  arbitrator and reliance was placed on  the   ,decisions   in   Bhagat   Raja   case  (AIR 1967 SC 1606) (supra) and Siemens  Engineering   Co.   case   (AIR   1976   SC  1785) (supra). The said contention was  rejected   by   this   Court.   After  referring  to   the   decisions  in   Bhagat  Raja case (supra), Som Datt Datta case  (AIR 1969 SC 414) (supra) and Siemens  Engineering   Co.   case   (supra)   this  Court has observed:

"It   is   no   doubt   true   that   in   the  decisions pertaining to Administrative  Law,   this   Court   in   some   cases   has  observed that the giving of reasons in  an   administrative  decision  is   a   rule  of natural justice by an extension of  the prevailing rules. It would be in  the interest of the world of commerce  that the said rule is confined to the  area of Administrative Law ........But  at the same time it has to be borne in  mind   that   What   applies   generally   to  settlement of disputes by authorities  governed   by   public   law   need   not   be  extended   to   all   cases   arising   under  private   law   such   as   those   arising  under the law of arbitration which is  intended   for   settlement   of   private  disputes." (pp. 751­52) (of SCC) : (at  Page 48 of 115 C/SCA/6331/2015 ORDER pp. 1444 and 1445 of AIR).

34.   The   decisions   of   this   Court  referred  to   above   indicate  that   with  regard   to   the   requirement   to   record  reasons the approach of this Court is  more in line with that of the American  Courts.   An   important   consideration  which has weighed with the Court for  holding   that   an   administrative  authority   exercising   quasi­judicial  functions must record the reasons for  its decision, is that such a decision  is   subject   to   the   appellate  jurisdiction   of   this   Court   under  Article   136   of   the   Constitution   as  well   as   the   supervisory   jurisdiction  of the High Courts under Article 227  of   the   Constitution   and   that   the  reasons,   if   recorded,   would   enable  this   Court   or   the   High   Courts   to  effectively exercise the appellate or  supervisory power. But this is not the  sole   consideration.   The   other  considerations which have also weighed  with the Court in taking this view are  that   the   requirement   of   recording  reasons   would   (i)   guarantee  consideration   by   the   authority;   (ii)  introduce   clarity   in   the   decisions;  and   (iii)   minimise   chances   of  arbitrariness   in   decision­making.   In  this   regard   a   distinction   has   been  drawn   between  ordinary  Courts  of   law  and   tribunals   and   authorities  exercising   judicial   functions   on   the  ground that a Judge is trained to look  at things objectively uninfluenced by  considerations of policy or expediency  whereas an executive officer generally  looks at things from the stand point  of policy and expediency.

35.   Reasons,   when   recorded   by   an  Page 49 of 115 C/SCA/6331/2015 ORDER administrative   authority   in   an   order  passed  by   it   while  exercising  quasi­ judicial   functions,   would   no   doubt  facilitate   the   exercise   of   its  jurisdiction   by   the   appellate   or  supervisory. authority. But the other  considerations,referred   to   above,  which   have   also   weighed   with   this  Court   in   holding   that   an  administrative   authority   must   record  reasons   for   its   decision   are   of   no  less   significance.   These  considerations show that the recording  of   reasons   by   an   administrative  authority   serves   a   salutary   purpose,  namely,   it   excludes   chances   of  arbitrariness and ensures a degree of  fairness in the process of decisions­ making. 'The said purpose would apply  equally   to   all   decisions   and   its  application   cannot   be   confined   to  decisions which are subject to appeal,  revision   or   judicial   review.   In   our  opinion,   therefore,   the   requirement  that reasons be recorded should govern  the   decisions   of   an   administrative  authority   exercising   quasi­judicial  functions   irrespective   of   the   fact  whether   the   decision   is   subject   to  appeal,   revision   or   judicial   review.  It may, however, be added that it is  not   required  that   the   reasons  should  be as elaborate as in the decision of  a Court of law. The extent and nature  of   the   reasons   would   depend   on  particular   facts   and   circumstances.  What is necessary is that the reasons  are   clear   and   explicit   so   as   to  indicate that the authority has given  due   consideration   to   the   points   in  controversy. The need for recording of  reasons is greater in a case where the  order is passed at the original stage.  The appellate or revisional authority,  Page 50 of 115 C/SCA/6331/2015 ORDER if it affirms such art order, need not  give separate reasons if the appellate  or   revisional   authority   agrees   with  the   reasons   contained   in   the   order  under challenge.

36.   Having   considered   the   rationale  for   the   requirement   to   record   the  reasons   for   the   decision   of   an  administrative   authority   exercising  quasi­judicial   functions   we   may   now  examine  the   legal   basis   for   imposing  this   obligation.   While   considering  this aspect the Donoughmore Committee  observed that it, may well be argued  that   there   is   a   third   principle   of  natural justice, namely, that a party  is entitled to know the reason for the  decision,   be   it   judicial   or   quasi­ judicial. The Committee expressed the  opinion   that   "there   are   some   cases  where the refusal to give grounds for  a decision may be plainly unfair; and  this may be so, even when the decision  is   final   and   no   further   proceedings  are open to the disappointed party by  way of appeal or otherwise" and that  "where further proceedings are open to  a   disappointed  party,  it   is   contrary  to natural justice that the silence of  the   Minister   or   the   Ministerial  Tribunal   should   deprive   them   of   the  opportunity." (p. 80) Prof. H. W. R.  Wade has also expressed the view that  "natural justice may provide the best  rubric   for   it,   since   the   giving   of  reasons   is   required   by   the   ordinary  man's   sense   of   justice."   (see   Wade,  Administrative Law, 6th Edn. p. 548).  In   Siemens  Engineering  Co.   case   (AIR  1976 SC 1785) (supra) this Court has  taken the same view when it observed  that "the rule requiring reasons to be  given in support of an order is, like  Page 51 of 115 C/SCA/6331/2015 ORDER the.   principles   of   audi   alteram  partem,  a   basic  principle  of   natural  justice which must inform every quasi­ judicial   process."   This   decision  proceeds   on   the   basis   that   the   two  well­known   principles   of   natural  justice, namely (i) that no man should  be a Judge in his own cause and (ii)  that   no   person   should   be   judged  without a hearing, are not exhaustive'  and   that   in   addition   to   these   two  principles  there  may   be   .rules  which  seek to ensure fairness in the process  of decision­making and can be regarded  as part of the principles of natural  justice.   This   view   is   in   consonance  with the law laid down by this Court  in   A.   K.   Kraipak   v.   Union   of   India,  (1970) 1 SCR 457: (AIR 1970 SC 150),  wherein it has been held:

"The   concept   of   natural   justice   has  undergone   a   great   deal   of   change   in  recent   years.   In   the   past   it   Was  thought   that   it   included   just   two  rules,   namely   (i)   no   one   shall   be   a  Judge in his own cause (nemo debetesse  judex   propria   causa)   and   (ii)   no  decision   shall   be   given   against   a  party   without   affording   him   a  reasonable   hearing   (audi   alteram  partem). Very soon thereafter a third  rule   was   envisaged   and   that   is   that  quasi­judicial enquiries must be held  in­good   faith,   without   bias   and   not  arbitrarily   or   unreasonably.   But   in  the   course   of   years   many   more  subsidiary rules came to be added to  the   rules   of   natural   justice."   (pp.  468­69)   (of   SCR):   (at   pp.   156­57   Of  AIR).

37. A similar trend is discernible in  the   decisions   of   English   Courts  Page 52 of 115 C/SCA/6331/2015 ORDER wherein it has been held that natural  justice   demands   that   the   decision  should be based on so me evidence of  probative   value.   (See   R   v.   Deputy  Industrial Injuries Commissioner ex P.  Moore, (1965) 1 QB 456; Mohan v. Air  New Zealand Ltd., 1984 AC 808).

38. The object underlying the rules of  natural   justice   "is   to   prevent  miscarriage   of   justice"   and   secure  "fair play in action." As pointed out  earlier   the   requirement   about  recording of reasons for its decision  by   an   administrative   authority  exercising   quasijudicial   functions  achieves   this   object   by   excluding  chances of arbitrariness and ensuring  a degree of fairness in the process of  decision­making.   Keeping   in   view   the  expanding horizon of the principles of  natural   justice,   we   are   of   the  opinion,   that   the   requirement   to  record reason can be regarded as one  of   the   principles  of   natural  justice  which   govern   exercise   of   power   by  administrative authorities. The rules  of   natural   justice   are   not   embodied  rules. The extent of their application  depends upon the particular statutory  framework whereunder jurisdiction has  been   conferred   on   the   administrative  authority. With regard to the exercise  of   a   particular   power   by   an  administrative   authority   including  exercise of judicial or quasi­judicial  functions   the   legislature,   while  conferring   the   said   power,   may   feel  that   it   would   not   be   in   the   larger  public  interest  that   the   reasons  for  the order passed by the administrative  authority be recorded in the order and  be communicated to the aggrieved party  and   it   may   dispense   with   such   a  Page 53 of 115 C/SCA/6331/2015 ORDER requirement. It may do so by making an  express   provision   to   that   effect   as  those contained in the Administrative  Procedure   Act,   1946   of   U.   S.   A.   and  the Administrative Decisions (Judicial  Review) Act, 1977 of Australia whereby  the orders passed by certain specified  authorities   are   excluded   from   the  ambit   of   the   enactment.   Such   an  exclusion can also arise by necessary  implication   from   the   nature   of   the  subject   matter,   the   scheme   and   the  provisions   of   the   enactment.   The  public   interest   underlying   such   a  provision would outweigh the salutary  purpose  served  by   the   requirement  to  record   the   reasons.   The   said  requirement   cannot,   therefore,   be  insisted upon in such a case.

39.For the reasons aforesaid, it must  be   concluded   that   except   in   cases  where   the   requirement   has   been  dispensed   with   expressly   or   by  necessary   implication,   an  administrative   authority   exercising  judicial   or   quasi­judicial   functions  is required to record the reasons for  its decision."

13. In the case of  G. Vallikumari  (supra), it has  been observed as under:­ "13.   We   shall   now   deal   with   the  question   whether   the   Division   Bench  of   the   High   Court   was   justified   in  setting  aside  the direction  given  by  the Tribunal for reinstatement of the  appellant   with   consequential  benefits.   Shri   Y.   S.   Rao,   who  conducted   inquiry   against   the  appellant   submitted   report   dated  Page 54 of 115 C/SCA/6331/2015 ORDER 4.7.1999   with   the   findings   that   all  the   charges   except   charge   No.4   have  been   proved   against   the   appellant.  She   was   given  a   copy   of   the   inquiry  report   along   with   show   cause   notice  to   which   she   filed   reply   dated  20.11.1995.In his order, the Chairman  of   the   Managing   Committee   did   refer  to   the   allegations   levelled   against  the   appellant   and   representation  submitted by her in the light of the  findings   recorded   by   the   inquiry  officer but without even adverting to  the   contents   of   her   representation  and  giving  a  semblance  of  indication  of application of mind in the context  of   Rule   120(1)(iv)   of   the   Rules,   he  directed   her   removal   from   service.  Therefore,   there   is   no   escape   from  the   conclusion   that   the   order   of  punishment was passed by the Chairman  without complying with the mandate of  the   relevant   statutory   rule   and   the  principles   of   natural   justice.   The  requirement   of   recording   reasons   by  every   quasi   judicial   or   even   an  administrative   authority   entrusted  with   the   task   of   passing   an   order  adversely affecting an individual and  communication thereof to the affected  person   is   one   of   the   recognized  facets   of   the   rules   of   natural  justice and violation thereof has the  effect  of  vitiating  the order passed  by the concerned authority.

14.   A   careful   reading   of   the  Tribunal's order shows that though it  did not find any procedural infirmity  in the inquiry against the appellant,  the   order   passed   by   the   Chairman   of  the   Managing   Committee   was   nullified  only   on   the   ground   of   violation   of  Section   8(2)   of   the   Act   read   with  Page 55 of 115 C/SCA/6331/2015 ORDER Rule 120(2) of the Rules inasmuch as  permission   of   the   Director   was   not  obtained   before   removing   the  appellant   from   service.   The   High  Court   set   aside   the   order   of   the  Tribunal   and   indirectly   restored   the  order   passed   by   the   Chairman   of   the  Managing Committee  because it  was  of  the   view   that   Section   8(2)   is   not  applicable   to   the   minority  institutions.   Neither   the   Tribunal  nor   the   Division   Bench   of   the   High  Court   dealt   with   and   decided   the  appellant's challenge to the findings  recorded   by   the   inquiry   officer   and  her plea that the extreme penalty of  removal   from   service   imposed   on   her  was not justified because she was not  found   guilty   of   any   serious  misconduct."

14. In   the   case   of  Kranti   Associates   Private  Limited  (supra),   it   has   been   observed   as  under:­ "14.  The   expression   "speaking   order"  was   first   coined   by   Lord   Chancellor  Earl   Cairns   in   a   rather   strange  context.   The   Lord   Chancellor,   while  explaining   the   ambit   of   the   writ   of  certiorari,   referred   to   orders   with  errors on the face of the record and  pointed out that an order with errors  on   its   face,   is   a   speaking   order.  (See   pp.   1878­97,   Vol.   4,   Appeal  Cases 30 at 40 of the Report).

15. This Court always opined that the  face   of   an   order  passed  by   a   quasi­ judicial   authority   or   even   an  administrative   authority   affecting  the rights of parties, must speak. It  Page 56 of 115 C/SCA/6331/2015 ORDER must   not   be   like   the   "inscrutable  face of a sphinx".

16.  In  Harinagar Sugar Mills Ltd.  v.  Shyam   Sunder   Jhunjhunwala,   the  question of recording reasons came up  for consideration in the context of a  refusal   by   Harinagar   to   transfer,  without   giving   reasons,   shares   held  by   Shyam   Sunder.   Challenging   such  refusal,   the   transferee   moved   the  High   Court   contending,   inter   alia,  that   the   refusal   is   mala   fide,  arbitrary   and   capricious.   The   High  Court   rejected   such   pleas   and   the  transferee was asked to file a suit.  The transferee filed an appeal to the  Central   Government   under   Section  111(3)   of   the   Companies   Act,   1956  which   was   dismissed.   Thereafter,   the  son of  the  original  transferee filed  another   application   for   transfer   of  his   shares   which   was   similarly  refused   by   the   Company.   On   appeal,  the   Central   Government   quashed   the  resolution  passed by  the  Company  and  directed  the  Company  to register  the  transfer.   However,   in   passing   the  said   order,   the   Government   did   not  give   any   reason.   The   Company  challenged   the   said   decision   before  this Court.

17. The other question which arose in  Harinagar  was   whether   the   Central  Government,   in   passing   the   appellate  order   acted   as   a   tribunal   and   is  amenable   to   Article   136   jurisdiction  of this Court.

18.  Even   though   in  Harinagar  the  decision   was   administrative,   this  Court  insisted on  the  requirement of  recording   reason   and   further   held  that   in   exercising   appellate   powers,  Page 57 of 115 C/SCA/6331/2015 ORDER the   Central   Government   acted   as   a  tribunal   in   exercising   judicial  powers of the State and such exercise  is   subject   to   Article   136  jurisdiction   of   this   Court.   Such  powers,   this   Court   held,   cannot   be  effectively   exercised   if   reasons   are  not   given   by   the   Central   Government  in   support   of   the   order   (AIR   pp.  1678­79, para 23).

19.  Again in  Bhagat Raja  v.  Union of  India  the  Constitution Bench  of this  Court   examined   the   question   whether  the   Central   Government   was   bound   to  pass   a   speaking   order   while  dismissing   a   revision   and   confirming  the order of the State Government in  the context of the Mines and Minerals  (Development   and   Regulation)   Act,  1957,   and   having   regard   to   the  provision   of   Rule   55   of   the   Mineral  Concession   Rules.   The   Constitution  Bench   held   that   in   exercising   its  power of revision under the aforesaid  Rule the Central Government acts in a  quasi­judicial   capacity   (see   AIR   p.  1610,   para   8).   Where   the   State  Government  gives  a number  of  reasons  some   of   which  are   good   and   some   are  not,   and   the   Central   Government  merely   endorses   the   order   of   the  State   Government   without   specifying  any   reason,   this   Court,   exercising  its   jurisdiction   under   Article   136,  may   find   it   difficult   to   ascertain  which   are   the   grounds   on   which   the  Central   Government   upheld   the   order  of   the   State   Government   (see   AIR   p.  1610,  para  9).  Therefore,  this Court  insisted   on   reasons   being   given   for  the order.

20.  In  Mahabir   Prasad   Santosh   Kumar  v.  State of U.P., while dealing with  the   U.P.   Sugar   Dealers'   Licensing  Page 58 of 115 C/SCA/6331/2015 ORDER Order   under   which   the   licence   was  cancelled,  this  Court held that  such  an   order   of   cancellation   is   quasi­ judicial and must be a speaking one.  This   Court   further   held   that   merely  giving   an   opportunity   of   hearing   is  not   enough   and   further   pointed   out  where the order is subject to appeal,  the   necessity   to   record   reason   is  even greater. The learned Judges held  that   the   recording   of   reasons   in  support   of   a   decision   on   a   disputed  claim   ensures   that   the   decision   is  not   a   result   of   caprice,   whim   or  fancy   but   was   arrived   at   after  considering the relevant law and that  the   decision   was   just.   (See   SCC   p.  768, para 7 : AIR p. 1304, para 7.)

21. In Travancore Rayon Ltd. v. Union  of India, the Court, dealing with the  revisional   jurisdiction   of   the  Central   Government   under   the   then  Section 36 of the Central Excises and  Salt Act, 1944, held that the Central  Government   was   actually   exercising  judicial   power   of   the   State   and   in  exercising   judicial   power   reasons   in  support   of   the   order   must   be  disclosed   on   two   grounds.   The   first  is that the person aggrieved gets an  opportunity   to  demonstrate   that   the  reasons   are   erroneous   and   secondly,  the   obligation   to   record   reasons  operates   as   a   deterrent   against  possible   arbitrary   action   by   the  executive authority invested with the  judicial power (see SCC p. 874, para  11 : AIR pp. 865­66, para 11).

22.  In  Woolcombers   of   India   Ltd.  v.  Workers   Union  this   Court   while  considering an award under Section 11  of   the   Industrial   Disputes   Act  Page 59 of 115 C/SCA/6331/2015 ORDER insisted   on   the   need   of   giving  reasons  in  support of  conclusions in  the   award.   The   Court   held   that   the  very  requirement  of  giving reason is  to   prevent   unfairness   or  arbitrariness   in   reaching  conclusions.   The   second   principle   is  based on the jurisprudential doctrine  that justice should not only be done,  it   should  also   appear  to   be   done   as  well. The learned Judges said that a  just   but   unreasoned   conclusion   does  not   appear   to   be   just   to   those   who  read   the   same.   Reasoned   and   just  conclusion   on   the   other   hand   will  also  have  the  appearance  of justice.  The third ground is that such awards  are   subject   to   Article   136  jurisdiction of this Court and in the  absence   of   reasons,   it   is   difficult  for   this   Court   to   ascertain   whether  the   decision   is   right   or   wrong   (see  SCC pp. 320­21, para 5 : AIR p. 2761,  para 5).

23.  In  Union   of   India  v.  Mohan   Lal  Capoor  this Court  while dealing  with  the   question   of   selection   under   the  Indian   Administrative   Service/Indian  Police   Service   (Appointment   by  Promotion)   Regulations   held   that   the  expression   "reasons   for   the   proposed  supersession"   should   not   be   mere  rubber­stamp   reasons.   Such   reasons  must disclose how mind was applied to  the   subject­matter   for   a   decision  regardless of the fact whether such a  decision   is   purely   administrative   or  quasi­judicial.   This   Court   held   that  the   reasons   in   such   context   would  mean the link between materials which  are   considered   and   the   conclusions  which   are   reached.   Reasons   must  reveal   a   rational   nexus   between   the  Page 60 of 115 C/SCA/6331/2015 ORDER two   (see   SCC   pp.   853­54,   paras   27­ 28 : AIR pp. 97­98, paras 27­28).

24.  In  Siemens Engg. and Mfg. Co. of  India   Ltd.  v.  Union   of   India  this  Court   held   that   it   is   far   too   well  settled   that   an   authority   in   making  an   order   in   exercise   of   its   quasi­ judicial   function,   must   record  reasons   in   support   of   the   order   it  makes.   The   learned   Judges  emphatically   said   that   every   quasi­ judicial   order   must   be   supported   by  reasons.   The   rule   requiring   reasons  in  support  of  a  quasi­judicial order  is,   this   Court   held,   as   basic   as  following   the   principles   of   natural  justice.   And   the   rule   must   be  observed in its proper spirit. A mere  pretence   of   compliance   would   not  satisfy   the   requirement   of   law   (see  SCC   p.   986,   para   6   :   AIR   p.   1789,  para 6).

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

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26.  Y.V.   Chandrachud,   J.   (as   His  Lordship   then   was)   in   a   concurring  but   a   separate   opinion   in  Maneka  Gandhi  also   held   that   refusal   to  disclose   reasons   for   impounding   a  passport   is   an   exercise   of   an  exceptional nature and is to be done  very   sparingly   and   only   when   it   is  fully  justified  by the  exigencies of  an   uncommon   situation.   The   learned  Judge   further   held   that   law   cannot  permit   any   exercise   of   power   by   an  executive   to   keep   the   reasons  undisclosed   if   the   only   motive   for  doing so is to keep the reasons away  from   judicial   scrutiny.   (See   SCC   p.  317, para 39 : AIR p. 613, para 39.)

27. In Rama Varma Bharathan Thampuram  v. State of Kerala V.R. Krishna Iyer,  J.   speaking   for   a   three­Judge   Bench  held   that   the   functioning   of   the  Board   was   quasi­judicial   in  character.   One   of   the   attributes   of  quasi­judicial   functioning   is   the  recording   of   reasons   in   support   of  decisions   taken   and   the   other  requirement   is   following   the  principles   of   natural   justice.   The  learned   Judge   held   that   natural  justice   requires   reasons   to  be  written for the conclusions made (see  SCC   p.   788,   para   14   :   AIR   p.   1922,  para 14).

28.  In  Gurdial   Singh   Fijji  v.  State  of Punjab  this Court, dealing with a  service  matter,  relying  on the ratio  in  Capoor,   held   that   "rubber­stamp  reason"   is   not   enough   and   virtually  quoted   the   observation   in  Capoor  to  the extent that: (Capoor case, SCC p. 

       854, para 28)

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"28. ... Reasons are the links between  the   materials   on   which   certain  conclusions  are  based and  the  actual  conclusions."   (See   AIR   p.   377,   para 


29.  In  a  Constitution  Bench decision  of this Court in H.H. Shri Swamiji of  Shri   Amar   Mutt  v.  Commr.,   Hindu  Religious   and   Charitable   Endowments  Deptt.  while   giving   the   majority  judgment   Y.V.   Chandrachud,   C.J.  referred   to   (SCC   p.   658,   para   29)  Broom's   Legal   Maxims  (1939   Edn.,   p. 

97) where the principle in Latin runs  as follows:

"Cessante   ratione   legis   cessat   ipsa  lex."

30.  The   English   version   of   the   said  principle given  by the  Chief  Justice  is that: (H.H. Shri Swamiji case, SCC  p. 658, para 29) "29.   ...   'reason   is   the   soul   of   the  law,   and   when   the   reason   of   any  particular   law   ceases,   so   does   the  law   itself'."   (See   AIR   p.   11,   para 


31. In Bombay Oil Industries (P) Ltd.  v.  Union   of   India  this   Court   held  that   while   disposing   of   applications  under   the   Monopolies   and   Restrictive  Trade   Practices   Act   the   duty   of   the  Government is to give reasons for its  order. This Court made it very clear  that   the   faith   of   the   people   in  administrative   tribunals   can   be  sustained   only   if   the   tribunals   act  fairly   and   dispose   of   the   matters  Page 63 of 115 C/SCA/6331/2015 ORDER before   them   by   well­considered  orders.   In   saying   so,   this   Court  relied   on   its   previous   decisions   in  Capoor  and  Siemens   Engg.   discussed  above.

32.  In  Ram Chander  v.  Union of India  this   Court   was   dealing   with   the  appellate   provisions   under   the  Railway   Servants   (Discipline   and  Appeal)   Rules,   1968   condemned   the  mechanical way of dismissal of appeal  in the context of requirement of Rule  22(2)   of   the   aforesaid   Rules.   This  Court   held   that   the   word   "consider"  occurring   in   Rule   22(2)   must   mean  that   the   Railway   Board   shall   duly  apply   its   mind   and   give   reasons   for  its decision. The learned Judges held  that   the   duty   to   give   reason   is   an  incident  of the judicial  process  and  emphasised that in discharging quasi­ judicial   functions   the   appellate  authority must act in accordance with  natural  justice  and  give  reasons  for  its   decision   (SCC   pp.   106­07,   para  4 : AIR p. 1176, para 4).

33.  In  Star   Enterprises  v.  City   and  Industrial   Development   Corpn.   of  Maharashtra   Ltd.  a   three­Judge   Bench  of   this   Court   held   that   in   the  present day set­up judicial review of  administrative   action   has   become  expansive   and   is   becoming   wider   day  by   day   and   the   State   has   to   justify  its   action   in   various   fields   of  public   law.   All   these   necessitate  recording   of   reason   for   executive  actions   including   the   rejection   of  the   highest   offer.   This   Court   held  that disclosure of reasons in matters  of   such   rejection   provides   an  opportunity   for   an   objective   review  Page 64 of 115 C/SCA/6331/2015 ORDER both by superior administrative heads  and   for   judicial   process   and   opined  that   such   reasons   should   be  communicated   unless   there   are  specific justifications for not doing  so (see SCC pp. 284­85, para 10).

34.  In  Maharashtra   State   Board   of  Secondary   and   Higher   Secondary  Education  v.  K.S.   Gandhi  this   Court  held that even in domestic enquiry if  the   facts   are   not   in   dispute   non­ recording   of   reason   may   not   be  violative   of   the   principles   of  natural   justice   but   where   facts   are  disputed necessarily the authority or  the enquiry officer, on consideration  of   the   materials   on   record,   should  record   reasons   in   support   of   the  conclusion  reached  (see  SCC  pp.  738­ 39, para 22).

35.  In  M.L. Jaggi  v.  MTNL  this Court  dealt   with   an   award   under   Section   7  of   the   Telegraph   Act   and   held   that  since   the   said   award   affects  public  interest, reasons must be recorded in  the award. It was also held that such  reasons are to be recorded so that it  enables   the   High   Court   to   exercise  its   power   of   judicial   review   on   the  validity   of   the   award.   (See   SCC   p.  123, para 8.)

36.  In  Charan Singh  v.  Healing Touch  Hospital  a  three­Judge Bench  of this  Court, dealing with a grievance under  the CP Act, held that the authorities  under the Act exercise quasi­judicial  powers   for   redressal   of   consumer  disputes   and   it   is,   therefore,  imperative   that   such   a   body   should  arrive   at   conclusions   based   on  Page 65 of 115 C/SCA/6331/2015 ORDER reasons.   This   Court   held   that   the  said Act, being one of the benevolent  pieces of legislation, is intended to  protect   a   large   body   of   consumers  from   exploitation   as   the   said   Act  provides  for  an alternative  mode  for  consumer justice by the process of a  summary   trial.   The   powers   which   are  exercised   are   definitely   quasi­ judicial   in   nature   and   in   such   a  situation   the   conclusions   must   be  based   on   reasons   and   held   that  requirement   of   recording   reasons   is  "too   obvious   to   be   reiterated   and  needs   no   emphasising".   (See   SCC   p.  673, para 11 : AIR p. 3141, para 11  of the Report.)

37.  Only   in   cases   of   Court   Martial,  this Court struck a different note in  two   of   its   Constitution   Bench  decisions,   the   first   of   which   was  rendered   in  Som   Datt   Datta  v.  Union  of   India  where   Ramaswami,   J.  delivering   the   judgment   for   the  unanimous   Constitution   Bench   held  that   provisions   of   Sections   164   and  165 of the Army Act do not require an  order confirming proceedings of Court  Martial   to   be   supported   by   reasons.  This   Court   held   that   an   order  confirming   such   proceedings   does   not  become illegal if it does not record  reasons. (AIR pp. 421­22, para 10 of  the Report.)

38.  About   two   decades   thereafter,   a  similar   question   cropped   up   before  this Court in S.N. Mukherjee v. Union  of   India.   A   unanimous   Constitution  Bench   speaking   through   S.C.   Agrawal,  J.  confirmed  its  earlier  decision in  Som Datt  in  S.N. Mukherjee case, SCC  p. 619, para 47 : AIR para 47 at p. 

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39.  It   must   be   remembered   in   this  connection  that  the  court  martial as  a proceeding is sui generis in nature  and   the   Court   of   Court   Martial   is  different,   being   called   a   court   of  honour   and   the   proceedings   therein  are   slightly   different   from   other  proceedings.   About   the   nature   of  Court Martial and its proceedings the  observations   of  Winthrop  in   Military  Law and Precedents are very pertinent  and are extracted hereinbelow:

"Not belonging to the judicial branch  of   the   Government,   it   follows   that  Courts   Martial   must   pertain   to   the  executive department; and they are in  fact   simply   instrumentalities   of   the  executive power, provided by Congress  for   the   President   as   Commander­in­ Chief,   to   aid   him   in   properly  commanding   the   Army   and   Navy   and  enforcing   discipline   therein,   and  utilised under his orders or those of  his   authorised   military  representatives."

40.  Our  Constitution  also  deals  with  court­martial   proceedings   differently  as is clear from Articles 33, 136(2)  and 227(4) of the Constitution.

41.  In   England   there   was   no   common  law duty of recording of reasons. In  Stefan  v.  General  Medical Council  it  has been held: (WLR p. 1300) Page 67 of 115 C/SCA/6331/2015 ORDER the   established   position   of   the  common   law   is   that   there   is   no  general  duty  imposed  on our decision  makers to record reasons.

It   has   been   acknowledged   in   the  Justice   Report,   Administration   Under  Law (1971) at p. 23 that:

"No   single   factor   has   inhibited   the  development of English administrative  law   as   seriously   as   the   absence   of  any   general   obligation   upon   public  authorities to give reasons for their  decisions."

42.  Even then in  R.  v.  Civil Service  Appeal   Board,   ex   p   Cunningham,   Lord  Donaldson,   Master   of   Rolls,   opined  very strongly in favour of disclosing  of reasons in a case where the Court  is   acting   in   its   discretion.   The  learned Master of Rolls said: (All ER  p. 317) "...   '...   it   is   a   corollary   of   the  discretion   conferred   upon   the   Board  that   it   is   their   duty   to   set   out  their reasoning in sufficient form to  show   the   principles   on   which   they  have   proceeded.   Adopting   Lord   Lane,  C.J.'s   observations   [in  R.  v.  Immigration   Appeal   Tribunal,   ex   p  Khan (Mahmud) All ER at p. 423, QB at  pp.   794­95],   the   reasons   for   the  lower   amount   is   not   obvious.   Mr  Cunningham   is   entitled   to   know,  either   expressly   or   inferentially  stated,   what   it   was   to   which   the  Board   were   addressing   their   mind   in  arriving at their conclusion. It must  be   obvious   to   the   Board   that   Mr  Page 68 of 115 C/SCA/6331/2015 ORDER Cunningham   is   left   with   a   burning  sense   of   grievance.   They   should   be  sensitive to the fact that he is left  with   a   real   feeling   of   injustice,  that   having   been   found   to   have   been  unfairly   dismissed,   he   has   been  deprived of his just desserts (as he  sees them).' "

43.  The   learned   Master   of   Rolls  further   clarified   by   saying:   (Civil  Service Appeal Board case, All ER p. 

317) "...   '...   Thus,   in   the   particular  circumstances   of   this   case,   and  without   wishing   to   establish   any  precedent   whatsoever,   I   am   prepared  to   spell   out   an   obligation   on   this  Board   to   give   succinct   reasons,   if  only to put the mind of Mr Cunningham  at rest. I would therefore allow this  application.' "

44.  But,   however,   the   present   trend  of   the   law   has   been   towards   an  increasing recognition of the duty of  court   to   give   reasons   (see  North  Range  Shipping   Ltd.  v.  Seatrans  Shipping   Corpn.).   It   has   been  acknowledged   that   this   trend   is  consistent   with   the   development  towards   openness   in   the   Government  and judicial administration.

45.  In  English  v.  Emery Reimbold and  Strick   Ltd.  it   has   been   held   that  justice will not be done if it is not  apparent   to   the   parties   why   one   has  won and the other has lost. The House  of Lords in Cullen v. Chief Constable  of   the   Royal   Ulster   Constabulary,  Lord   Bingham   of   Cornhill   and   Lord  Page 69 of 115 C/SCA/6331/2015 ORDER Steyn,   on   the   requirement   of   reason  held: (WLR p. 1769, para 7) "7. ... First, they impose a discipline  ...   which   may   contribute   to   such  refusals   being   considered   with   care.  Secondly,   reasons   encourage  transparency   ...   Thirdly,   they   assist  the   courts   in   performing   their  supervisory   function   if   judicial  review proceedings are launched."

46. The position in the United States  has   been   indicated   by   this   Court   in  S.N. Mukherjee in SCC p. 602, para 11  :   AIR   para   11   at   p.   1988   of   the  judgment. This Court held that in the  United States  the  courts  have  always  insisted  on the recording  of  reasons  by   administrative   authorities   in  exercise   of   their   powers.   It   was  further   held   that   such   recording   of  reasons   is   required   as   "the   courts  cannot exercise  their duty of  review  unless   they   are   advised   of   the  considerations   underlying   the   action  under review". In S.N. Mukherjee this  Court relied on the decisions of the  US   Court   in  Securities   and   Exchange  Commission  v.  Chenery   Corpn.  and  Dunlop v. Bachowski in support of its  opinion discussed above.

47.  Summarising the above discussion,  this Court holds:

(a)   In   India   the   judicial   trend   has  always   been   to   record   reasons,   even  in   administrative   decisions,   if   such  decisions   affect   anyone  prejudicially.

(b)   A   quasi­judicial   authority   must  record   reasons   in   support   of   its  Page 70 of 115 C/SCA/6331/2015 ORDER conclusions.

(c)   Insistence   on   recording   of  reasons   is   meant   to   serve   the   wider  principle   of   justice   that   justice  must   not   only   be   done   it   must   also  appear to be done as well.

(d)   Recording   of   reasons   also  operates as a valid restraint on any  possible   arbitrary   exercise   of  judicial   and   quasi­judicial   or   even  administrative power.

(e)   Reasons   reassure   that   discretion  has   been   exercised   by   the   decision­ maker   on   relevant   grounds   and   by  disregarding   extraneous  considerations.

(f)  Reasons  have  virtually  become  as  indispensable   a   component   of   a  decision­making   process   as   observing  principles   of   natural   justice   by  judicial,   quasi­judicial   and   even   by  administrative bodies.

(g) Reasons facilitate the process of  judicial review by superior courts.

(h) The ongoing judicial trend in all  countries   committed   to   rule   of   law  and   constitutional   governance   is   in  favour of reasoned decisions based on  relevant facts. This is virtually the  lifeblood of judicial decision­making  justifying   the   principle   that   reason  is the soul of justice.

(i)   Judicial   or   even   quasi­judicial  opinions   these   days   can   be   as  different   as   the   judges   and  authorities   who   deliver   them.   All  these   decisions   serve   one   common  purpose   which   is   to   demonstrate   by  reason that the relevant factors have  been   objectively   considered.   This   is  important   for   sustaining   the  litigants'   faith   in   the   justice  delivery system.

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(j)   Insistence   on   reason   is   a  requirement   for   both   judicial  accountability and transparency.

(k)   If   a   judge   or   a   quasi­judicial  authority is  not  candid enough about  his/her   decision­making   process   then  it is impossible to know whether the  person   deciding   is   faithful   to   the  doctrine   of   precedent   or   to  principles of incrementalism.

(l)   Reasons   in   support   of   decisions  must be cogent, clear and succinct. A  pretence   of   reasons   or   "rubber­stamp  reasons" is not to be equated with a  valid decision­making process.

(m)   It   cannot   be   doubted   that  transparency   is   the   sine   qua   non   of  restraint   on   abuse   of   judicial  powers.   Transparency   in   decision­ making not only makes the judges and  decision­makers   less   prone   to   errors  but   also   makes   them   subject   to  broader   scrutiny.   (See   David   Shapiro  in Defence of Judicial Candor.)

(n)   Since   the   requirement   to   record  reasons   emanates   from   the   broad  doctrine   of   fairness   in   decision­ making,   the   said   requirement   is   now  virtually a component of human rights  and was considered part of Strasbourg  Jurisprudence.   See  Ruiz   Torija  v.  Spain  EHRR,  at   562   para   29   and  Anya  v.  University  of  Oxford,  wherein  the  Court   referred   to   Article   6   of   the  European   Convention   of   Human   Rights  which requires, "adequate   and   intelligent   reasons  must   be   given   for   judicial  decisions".

(o)   In   all   common   law   jurisdictions  judgments   play   a   vital   role   in  setting up precedents for the future.  Therefore,   for   development   of   law,   Page 72 of 115 C/SCA/6331/2015 ORDER requirement of giving reasons for the  decision   is   of   the   essence   and   is  virtually a part of "due process".

48. For the reasons aforesaid, we set  aside   the   order   of   the   National  Consumer   Disputes   Redressal  Commission   and   remand   the   matter   to  the   said   forum   for   deciding   the  matter by passing a reasoned order in  the   light   of   the   observations   made  above.   Since   some   time   has   elapsed,  this   Court   requests   the   forum   to  decide   the   matter   as   early   as  possible,   preferably   within   a   period  of six weeks from the date of service  of this order upon it.

49.  Insofar   as   the   appeal   filed   by  the   Bank   is   concerned,   this   Court  finds   that   the   National   Consumer  Disputes   Redressal   Commission   in   its  order   dated   4­4­2008   has   given   some  reasons  in  its  finding. The reasons,  inter alia, are as under:

"We   have   gone   through   the   orders   of  the   District   Forum   and   the   State  Commission, perused the record placed  before   us   and   heard   the   parties   at  length.   The   State   Commission   has  rightly   confirmed   the   order   of   the  District   Forum   after   coming   to   the  conclusion   that   the   petitioner   and  the builder, Respondents 3 and 4 have  colluded   with   each   other   and   hence,  directed   them   to   compensate   the  complainant for the harassment caused  to them."

50.  From   the   order   of   the   State  Commission   dated   26­7­2007   in  connection   with   the   appeal   filed   by  Page 73 of 115 C/SCA/6331/2015 ORDER the   Bank,   we   do   not   find   that   the  State   Commission   has   independently  considered   the   Bank's   appeal.   The  State Commission dismissed the Bank's  appeal   for   the   reasons   given   in   its  order   dated   6­7­2007   in   connection  with the appeal of the builders.

51.  This   Court   is   of   the   view   that  since   the   Bank   has   filed   a   separate  appeal,   it   has   a   right   to   be   heard  independently   in   support   of   its  appeal. That right has been denied by  the State Commission. In that view of  the   matter,   this   Court   quashes   the  order   dated   26­7­2007   passed   by   the  State Commission as also the order of  the   National   Commission   dated   4­4­ 2008 which has affirmed the order of  the State Commission."

15. In the case of  BA Linga Reddy  (supra), it has  been observed as under:­ "18.   It   is   apparent   from   the  provisions that the scheme is framed  for   providing   efficient,   adequate,  economical   and   properly   co­ordinated  road   transport   service   in   public  interest.  Section  102   of   the   Act   of  1988   does   not   lay   down   the  requirement of recording any  express  finding   on   any   particular   aspect;  whereas   the   duty   is   to   hear   and  consider the objections. It requires  the State Government to act in public  interest to cancel or modify a scheme  after   giving   the   State   Transport  Undertaking   or   any   other   affected  person   by   the   proposed   modification  an opportunity of hearing. The State  is   supposed   to   be   acting   in   public  Page 74 of 115 C/SCA/6331/2015 ORDER interest   while   exercising   the   power  under   the   provision.   However,   that  does   not   dispense   with   the  requirement   to   record   reasons   while  dealing with objections.

19.   Modification  of   the   scheme  is   a  quasi­judicial   function   while  modifying or cancelling a scheme. The  State   Government   is   duty­bound   to  consider   the   objections   and   to   give  reasons   either   to   accept   or   reject  them.   The   rule   of   reason   is   anti­ thesis to arbitrariness in action and  is   a   necessary   concomitant   of   the  principles of natural justice.

20.   In   Siemens   Engineering   &  Manufacturing   Co.   of   India   Ltd.   v.  Union of India [1976 (2) SCC 981], it  was held :

"6. x x x It is now settled law that  where an authority makes an order in  exercise   of   a   quasi­judicial  function, it must record its reasons  in   support   of   the   order   it   makes.  Every   quasi­judicial   order   must   be  supported   by   reasons.   That   has   been  laid down by a long line of decisions  of this Court ending with N.M. Desai  v. Testeels Ltd.. But, unfortunately,  the   Assistant   Collector   did   not  choose to give any reasons in support  of   the   order  made   by   him   confirming  the   demand   for   differential   duty.  This   was   in   plain   disregard   of   the  requirement of law. The Collector in  revision did give some sort of reason  but   it   was   hardly   satisfactory.   He  did   not   deal   in   his   order   with   the  arguments advanced by the  appellants  in   their   representation   dated  December 8, 1961 which were repeated  Page 75 of 115 C/SCA/6331/2015 ORDER in   the   subsequent   representation  dated   June   4,   1965.   It   is   not  suggested   that   the   Collector   should  have   made   an   elaborate   order  discussing   the   arguments   of   the  appellants  in   the   manner  of   a   Court  of   law.   But   the   order   of   the  Collector   could   have   been   a   little  more explicit and articulate so as to  lend   assurance  that   the   case   of   the  appellants   had   been   properly  considered  by   him.  If   courts  of   law  are to be replaced by administrative  authorities and tribunals, as indeed,  in   some   kinds   of   cases,   with   the  proliferation   of   Administrative   Law,  they may have to be so replaced, it  is   essential   that   administrative  authorities   and   tribunals   should  accord fair and proper hearing to the  persons   sought   to   be   affected   by  their   orders   and   give   sufficiently  clear and explicit reasons in support  of   the   orders   made   by   them.   Then  alone   administrative   authorities   and  tribunals   exercising   quasi­judicial  function   will   be   able   to   justify  their existence and carry credibility  with   the   people   by   inspiring  confidence   in   the   adjudicatory  process.   The   rule   requiring   reasons  to   be   given   in   support   of   an   order  is,   like   the   principle   of   audi  alteram partem, a basic principle of  natural   justice   which   must   inform  every quasi­judicial process and this  rule   must   be   observed  in   its   proper  spirit   and   mere   pretence   of  compliance with it would not satisfy  the requirement of law. x x x."

21.   This   Court   in   Rani   Lakshmi   Bai  Kshetriya Gramin  Bank's case (supra)  while relying upon S.N. Mukherjee v. 

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C/SCA/6331/2015 ORDER Union of India [1990 (4) SCC 594] has  laid down thus :

"8.   The   purpose   of   disclosure   of  reasons,   as   held   by   a   Constitution  Bench of this Court in S.N. Mukherjee  v. Union of India (1990 (4) SCC 594),  is   that   people   must   have   confidence  in   the   judicial   or   quasi­judicial  authorities.   Unless   reasons   are  disclosed,   how   can   a   person   know  whether the authority has applied its  mind or not? Also, giving of reasons  minimises   the   chances   of  arbitrariness.   Hence,   it   is   an  essential requirement of the rule of  law   that   some   reasons,   at   least   in  brief,   must   be   disclosed   in   a  judicial   or   quasi­judicial   order,  even   if   it   is   an   order   of  affirmation."

22.   A   Constitution   Bench   of   this  Court has laid down in Krishna Swami  v.   Union   of   India   &   Ors.   [1992   (4)  SCC   605]   that   if   a   statutory   or  public authority/functionary does not  record   the   reasons,   its   decision  would be rendered arbitrary,  unfair,  unjust and violating Articles 14 and  21   of   the   Constitution.   This   Court  has laid down thus :

"Undoubtedly,   in   a   parliamentary  democracy   governed   by   rule   of   law,  any action, decision or order of any  statutory/public  authority/functionary must be founded  upon   reasons  stated  in   the   order  or  staring from the record. Reasons are  the   links   between   the   material,   the  foundation for their erection and the  actual   conclusions.   They   would   also  demonstrate how the mind of the maker  Page 77 of 115 C/SCA/6331/2015 ORDER was activated and actuated and their  rational nexus and synthesis with the  facts considered  and the conclusions  reached. Lest it would be arbitrary,  unfair and  unjust, violating  Article  14   or   unfair   procedure   offending  Article   21.   But   exceptions   are  envisaged   keeping   institutional  pragmatism into play, conscious as we  are of each other's limitations.

23.   In   Workmen   of   Meenakshi   Mills  Ltd. & Ors. v. Meenakshi Mills Ltd. &  Anr.   [1992   (3)   SCC   336]   while  considering the principles of natural  justice, it has been observed that it  is   the   duty   to   give   reasons   and   to  pass a speaking order; that excludes  arbitrariness   in   action   as   the   same  is   necessary   to   exclude  arbitrariness.   This   Court   has  observed thus :

"We   have   already   dealt   with   the  nature of the power that is exercised  by the appropriate Government or the  authority while refusing or granting  permission  under  sub­section  (2) and  have found that the said power is not  purely   administrative   in   character  but   partakes   of   exercise   of   a  function which is judicial in nature.  The   exercise   of   the   said   power  envisages passing of a speaking order  on   an   objective   consideration   of  relevant   facts   after   affording   an  opportunity to the concerned parties.  Principles or guidelines are insisted  on   with   a   view   to   control   the  exercise   of   discretion   conferred   by  the   statute.  There  is   need   for   such  principles   or   guidelines   when   the  discretionary   power   is   purely  administrative   in   character   to   be  Page 78 of 115 C/SCA/6331/2015 ORDER exercised   on   the   subjective   opinion  of   the   authority.   The   same   is,  however,  not   true   when  the   power  is  required to be exercised on objective  considerations   by   a   speaking   order  after   affording   the   parties   an  opportunity   to   put   forward   their  respective points of view.

x x x x x We are also unable to agree with the  submission   that   the   requirement   of  passing   a   speaking   order   containing  reasons   as   laid   down   in   sub­section  (2) of Section 25­N does not provide  sufficient   safeguard   against  arbitrary   action.   In   S.N.   Mukherjee  v. Union of India [1990 (4) SCC 594],  it has been held that irrespective of  the   fact   whether   the   decision   is  subject   to   appeal,   revision   or  judicial   review,   the   recording   of  reasons   by   an   administrative  authority by itself serves a salutary  purpose,   viz.,   "it   excludes   chances  of arbitrariness and ensures a degree  of   fairness   in   the   process   of  decision­making."

24.   In   Divisional   Forest   Officer,  Kothagudem & Ors. v. Madhusudhan Rao  [2008   (3)   SCC   469],   this   Court   has  laid down thus :

"20. It is no doubt also true that an  appellate or revisional authority is  not required to give detailed reasons  for agreeing and confirming an order  passed by the lower forum but, in our  view,   in   the   interests   of   justice,  the delinquent officer is entitled to  know   at   least   the   mind   of   the  appellate or revisional authority in  dismissing   his   appeal   and/or  revision. It is true that no detailed  Page 79 of 115 C/SCA/6331/2015 ORDER reasons are required to be given, but  some   brief   reasons   should   be  indicated even in an order affirming  the views of the lower forum."

25.   In   Chairman,   Disciplinary  Authority, Rani Lakshmi Bai Kshetriya  Gramin   Bank   v.   Jagdish   Sharan  Varshney  &   Ors.  [2009   (4)   SCC   240],  it was observed that :

"8.   The   purpose   of   disclosure   of  reasons,   as   held   by   a   Constitution  Bench of this Court in S.N. Mukherjee  v.   Union   of   India   (supra),   is   that  people   must   have   confidence   in   the  judicial   or   quasi­judicial  authorities.   Unless   reasons   are  disclosed,   how   can   a   person   know  whether the authority has applied its  mind or not? Also, giving of  reasons  minimises   the   chances   of  arbitrariness.   Hence,   it   is   an  essential requirement of the rule of  law   that   some   reasons,   at   least   in  brief,   must   be   disclosed   in   a  judicial   or   quasi­judicial   order,  even   if   it   is   an   order   of  affirmation."

26.   In   Manohar   v.   State   of  Maharashtra & Anr. [2012 (13) SCC 14]  it   has   been   laid   down   that   in   the  context   of   State   Information  Commission,   it   has   to   hear   the  parties,   apply   its   mind   and   record  the   reasons   as   they   are   the   basic  elements   of   natural   justice.   This  Court has laid down thus:

"17. The State Information Commission  is   performing   adjudicatory   functions  where   two   parties   raise   their  respective issues to which the State  Page 80 of 115 C/SCA/6331/2015 ORDER Information Commission is expected to  apply   its   mind   and   pass   an   order  directing   disclosure   of   the  information   asked   for   or   declining  the same. Either way, it affects the  rights of the parties who have raised  rival   contentions   before   the  Commission.   If   there   were   no   rival  contentions, the matter would rest at  the   level   of   the   designated   Public  Information   Officer   or   immediately  thereafter.   It   comes   to   the   State  Information   Commission   only   at   the  appellate   stage   when   rights   and  contentions require adjudication. The  adjudicatory   process   essentially   has  to   be   in   consonance   with   the  principles   of   natural   justice,  including   the   doctrine   of   audi  alteram  partem.  Hearing the parties,  application of mind and recording of  reasoned   decision   are   the   basic  elements   of   natural   justice.   It   is  not   expected   of   the   Commission   to  breach   any   of   these   principles,  particularly when its orders are open  to   judicial   review.   Much   less   to  Tribunals   or   such   Commissions,   the  courts have even made compliance with  the   principle   of   rule   of   natural  justice   obligatory   in   the   class   of  administrative matters as well."

27. Now we come to the order passed  in   the   instant  case  with  respect  to  the   Bellary   Scheme   which   is   to   the  following effect :

"The   objections   and   representations  received   in   this   regard   is   examined  and   the   arguments   advanced   by   the  representatives   of   the   STUs   and  private operators for and against the  modification   proposed   by   the   State  Page 81 of 115 C/SCA/6331/2015 ORDER Government is considered in the light  of   the   provisions   of   the   Motor  Vehicles  Act,  1988.  Sec.   102   of   the  M.V.Act,   1988   empowers   the   State  Government,   at   any   time,   if   it  consider   necessary   in   the   public  interest   so   to   do,   modify   any  approved   scheme.   Therefore,   what   is  paramount for modifying the scheme is  that   it   should   be   in   the   public  interest.   The   modification   now  proposed   is   necessitated   in   view   of  the   stand   taken   by   the   Hon'ble  Supreme Court of India in Ashrafulla  Khan's   case  reported  in   AIR   2002  SC 

629.   During   the   period   from  04.12.1995   and   14.01.2002,  considering   the   interpretation   with  regard   to   the   words   "overlapping",  "intersection"   and   "corridor  restriction"   of   the   Hon'ble   High  Court   of   Karnataka,   the   Transport  Authorities have  granted the  permits  to   the   private   operators   in  accordance   with   the   provisions   of  M.V.Act,   1988   and   rules   made  thereunder   considering   the   need   of  the   travelling   public,   as   these  operators   are   meeting   the   genuine  demands   of   the   travelling   public   in  excess   of   the   services   provided   by  the   STUs.   Hence,   it   has   become  necessary   to   save   all   the   permits,  granted   by   the   RTAs   which   were   in  operation   as   on   1.4.2002   in   the  interest   of   the   travelling   public.  Therefore, on the facts and averments  made   before   me,   I   do   not   find   the  sufficient  grounds is established to  support   the   objections   and  representations received and  made in  person   opposing   the   modification   of  the   approved   Bellary   and   Raichur  schemes   published   in   Notification  Page 82 of 115 C/SCA/6331/2015 ORDER No.HD/22/TMP/64   Dated   18.4.64   and  TD/140/TMI/82,   dated   03.11.1987.  Hence,   the   draft   notification  modifying the above schemes published  in   Notification   No.HTD/122/TMA97  dated   25.10.2002   is   upheld   and  approved. All the permits held as on  1.4.2002 are saved with the condition  that   they   shall   not   pick   up   of   set  down   passengers   except   in   the   bus  stands."

28. It is apparent that there is no  consideration   of   the   objections  except   mentioning   the   arguments   of  the   rival   parties.   Objections   both  factual   and   legal   have   not   been  considered much less reasons assigned  to   overrule   them.   Even   in   brief,  reasons   have   not   been   assigned  indicating   how   objections   are  disposed of.

29. Situation is worse in the orders  modifying   other   schemes.   Thus,  modification of the Schemes could not  be said to be in accordance with the  principles of natural justice in the  absence of reasons so as to reach the  conclusion that private operators are  meeting   the   genuine   demands   of   the  public   in   excess   of   the   service  provided   by   the   STOs.,   hence,   it  cannot be said to be sustainable."

16. In   the   case   of  Ranjeet   Singh  (supra),   it   has  been observed as under:­ "4.Feeling   aggrieved   by   the   judgment  of   the   appellate   Court,   the  respondent   preferred   a   writ   petition  in   the   High   Court   of   Judicature   at  Page 83 of 115 C/SCA/6331/2015 ORDER Allahabad   under   Art.   226   and  alternatively   under   Art.   227   of   the  Constitution.   It   was   heard   by   a  learned   single   Judge   of   the   High  Court.   The   High   Court   has   set   aside  the   judgment   of   the   appellate   Court  and restored that of the trial Court.  A perusal of the judgment of the High  Court   shows   that   the   High   Court   has  clearly   exceeded   its   jurisdiction   in  setting   aside   the   judgment   of   the  appellate   Court.   Though   not  specifically   stated,   the   phraseology  employed   by   the   High   Court   in   its  judgment, goes to show that the High  Court   has   exercised   its   certiorari  jurisdiction   for   correcting   the  judgment   of   the   appellate   Court.   In  Surya Dev Rai v. Ram Chander Rai and  others   (2003)   6   SCC   675,   this   Court  has   ruled   that   to   be   amenable   to  correction   in   certiorari  jurisdiction,   the   error   committed   by  the   Court   or   authority   on   whose  judgment   the   High   Court   was  exercising jurisdiction, should be an  error which is self­evident. An error  which   needs   to   be   established   by  lengthy   and   complicated   arguments   or  by   indulging   into   a   long   drawn  process of reasoning, cannot possibly  be  an  error available  for  correction  by   writ   of   certiorari.   If   it   is  reasonably   possible   to   form   two  opinions   on   the   same   material,   the  finding   arrived   at   one   way   or   the  other,   cannot   be   called   a   patent  error.   As   to   the   exercise   of  supervisory   jurisdiction   of   the   High  Court   under   Art.   227   of   the  Constitution also,it has been held in  Surya   Dev   Rai   (supra)   that   the  jurisdiction  was  not available  to  be  exercised   for   indulging   into   re­ Page 84 of 115 C/SCA/6331/2015 ORDER appreciation   or   evaluation   of  evidence or  correcting  the errors  in  drawing   inferences   like   a   Court   of  appeal.   The   High   Court   has   itself  recorded   in   its   judgment   that   ­  "considering   the   evidence   on   the  record carefully" it was inclined not  to   sustain   the   judgment   of   the  appellate  Court.  On  its own  showing,  the   High   Court   has   acted   like   an  appellate   Court   which   was   not  permissible   for   it   to   do   under   Art.  226 or Art. 227 of the Constitution."

17. In the case of State of Haryana (supra), it has  been observed as under:­

17.   The   appellants   urged   that   the  jurisdiction  of   the  High  Court  under  Article   227   is   very   limited   and   the  High   Court,   while   exercising   the  jurisdiction   under   Article   227,   has  to ensure that the courts below work  within the bounds of their authority.  More   than   half   a   century   ago,   the  Constitution   Bench   of   this   court   in  Nagendra   Nath   Bora   and   Another   v.  Commissioner   of   Hills   Division   and  Appeals,   Assam   and   Others,   AIR   1958  SC   398   settled   that   power   under  Article 227 is limited to seeing that  the   courts  below  function  within  the  limit   of   its   authority   or  jurisdiction.

18.   This   court   placed   reliance   on  Nagendra  Nath's  case  in   a   subsequent  judgment   in   Nibaran   Chandra   Bag   v.  Mahendra   Nath   Ghughu,   AIR   1963   SC  1895. The court observed that:­ "12. ...   jurisdiction   conferred  Page 85 of 115 C/SCA/6331/2015 ORDER under Article 227 is not by any means  appellate   in   its   nature   for  correcting errors in the decisions of  subordinate   courts   or   tribunals   but  is   merely  a   power  of   superintendence  to   be   used   to   keep   them   within   the  bounds of their authority..."

19.   This   court   had   an   occasion   to  examine this aspect of the matter in  the   case   of   Mohd.   Yunus   v.   Mohd.  Mustaqim   and   Others   (1983)   4   SCC  566   :   (AIR   1984   SC   38).   The   court  observed as under :­ "7. The   supervisory   jurisdiction  conferred   on   the   High   Courts   under  Article   227   of   the   Constitution   is  limited   "to   seeing   that   an   inferior  Court   or   Tribunal   functions   within  the limits of its authority," and not  to   correct   an   error   apparent   on   the  face   of   the   record,   much   less   an  error   of   law.   for   this   case   there  was, in our opinion, no error of law  much   less   an   error   apparent   on   the  face   of   the   record.   There   was   no  failure   on   the   part   of   the   learned  Subordinate   Judge   to   exercise  jurisdiction   nor   did   he   act   in  disregard   of   principles   of   natural  justice.   Nor   was   the   procedure  adopted by him not in consonance with  the   procedure  established  by  law.  In  exercising   the   supervisory   power  under   Article   227,   the   High   Court  does not act as an Appellate Court or  Tribunal.   It   will   not   review   or  reweigh   the   evidence   upon   which   the  determination   of   the   inferior   court  or   tribunal   purports   to   be   based   or  to   correct   errors   of   law   in   the  decision."

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20.   This   court   again   clearly  reiterated   the   legal   position   in  Laxmikant   Revchand   Bhojwani   and  Another   v.   Pratapsing   Mohansingh  Pardeshi (1995) 6 SCC 576. The court  again cautioned that:

"9. ...The   High   Court   under   Article  227 of the Constitution cannot assume  unlimited   prerogative   to   correct   all  species   of   hardship   or   wrong  decisions.   It   must   be   restricted   to  cases   of   grave   dereliction   of   duty  and   flagrant   abuse   of   fundamental  principles   of   law   or   justice,   where  grave  injustice  would  be   done  unless  the High Court interferes.

21. A three­Judge Bench of this court  in Rena Drego (Mrs.) v. Lalchand Soni  and   Others   (1998)   3   SCC   341   :   (AIR  1998   SC   1990   :   1998   AIR   SCW   1840)  again   abundantly   made   it   clear   that  the   High  Court  cannot  interfere  with  the findings of fact recorded by the  subordinate   court   or   the   tribunal  while   exercising   its   jurisdiction  under   Article   227.   Its   function   is  limited   to   seeing   that   the  subordinate   court   or   the   tribunal  functions   within   the   limits   of   its  authority.   It   cannot   correct   mere  errors   of   fact   by   examining   the  evidence and re­appreciating it.

22.   In   Virendra   Kashinath   Ravat   and  Another   v.   Vinayak   N.   Joshi   and  Others (1999) 1 SCC 47 : (AIR 1999 SC  162   :   1998   AIR   SCW   3521)   this   court  held   that   the   limited   power   under  Article  227  cannot  be   invoked  except  for   ensuring   that   the   subordinate  courts function within its limits.

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23. This court over 50 years has been  consistently   observing   that   limited  jurisdiction  of   the  High  Court  under  Article   227   cannot   be   exercised   by  interfering with the findings of fact  and   set   aside   the   judgments   of   the  courts below on merit.

18. In the case of  Sameer Suresh Gupta  (supra), it  has been observed as under:­ "6. In our view, the impugned order is  liable   to   be   set   aside   because   while  deciding   the   writ   petition   filed   by  the   respondent   the   learned  Single  Judge   ignored   the   limitations   of   the  High   Court's   jurisdiction   under  Article   227   of   the   Constitution.   The  parameters   for   exercise   of   power   by  the High Court under that article were  considered   by   the   two­Judge   Bench   of  this   Court   in  Surya   Dev   Rai  v.  Ram  Chander Rai. After considering various  facets   of   the   issue,   the   two­Judge  Bench   culled   out   the   following  principles: (SCC pp. 694­96, para 38) "(1) Amendment by Act 46 of 1999 with  effect from 1­7­2002 in Section 115 of  the Code of Civil Procedure cannot and  does   not   affect   in   any   manner   the  jurisdiction   of   the   High   Court   under  Articles   226   and   227   of   the  Constitution.

(2)   Interlocutory   orders,   passed   by  the   courts   subordinate   to   the   High  Court,   against   which   remedy   of  revision   has   been   excluded   by   CPC  Amendment   Act   46   of   1999   are  Page 88 of 115 C/SCA/6331/2015 ORDER nevertheless open to challenge in, and  continue to be subject to, certiorari  and   supervisory   jurisdiction   of   the  High Court.

(3)   Certiorari,   under   Article   226   of  the   Constitution,   is   issued   for  correcting   gross   errors   of  jurisdiction   i.e.   when   a   subordinate  court   is   found   to   have   acted   (i)  without   jurisdiction   --   by   assuming  jurisdiction where there exists none,  or (ii) in excess of its jurisdiction 

--   by   overstepping   or   crossing   the  limits   of   jurisdiction,   or   (iii)  acting in flagrant disregard of law or  the   rules   of   procedure   or   acting  in  violation   of   principles   of   natural  justice   where   there   is   no   procedure  specified,   and   thereby   occasioning  failure of justice.

(4)   Supervisory   jurisdiction   under  Article   227   of   the   Constitution   is  exercised for keeping the subordinate  courts   within   the   bounds   of   their  jurisdiction. When a subordinate court  has   assumed   a   jurisdiction   which   it  does   not   have   or   has   failed   to  exercise a jurisdiction which it does  have  or   the   jurisdiction   though  available   is   being   exercised   by   the  court in a manner not permitted by law  and   failure   of   justice   or   grave  injustice has occasioned thereby, the  High Court may step in to exercise its  supervisory jurisdiction.

(5) Be it a writ of certiorari or the  exercise   of   supervisory   jurisdiction,  none   is   available   to   correct   mere  errors   of   fact   or   of   law   unless   the  following   requirements   are   satisfied: 

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(i) the error is manifest and apparent  on the face of the proceedings such as  when it is based on clear ignorance or  utter   disregard   of   the   provisions   of  law,   and   (ii)   a   grave   injustice   or  gross   failure   of   justice   has  occasioned thereby.

(6) A patent error is an error which  is   self­evident   i.e.   which   can   be  perceived   or   demonstrated   without  involving   into   any   lengthy   or  complicated   argument   or   a   long­drawn  process   of   reasoning.   Where   two  inferences are reasonably possible and  the   subordinate   court   has   chosen   to  take   one   view,   the   error   cannot   be  called gross or patent.

(7)   The   power   to   issue   a   writ   of  certiorari   and   the   supervisory  jurisdiction   are   to   be   exercised  sparingly   and   only   in   appropriate  cases where the judicial conscience of  the High Court dictates it to act lest  a   gross   failure   of   justice   or   grave  injustice   should   occasion.   Care,  caution and circumspection need to be  exercised,   when   any   of   the   abovesaid  two   jurisdictions   is   sought   to   be  invoked   during   the   pendency   of   any  suit   or   proceedings   in   a   subordinate  court and the error though calling for  correction   is   yet   capable   of   being  corrected   at   the   conclusion   of   the  proceedings   in   an   appeal   or   revision  preferred   thereagainst   and  entertaining   a   petition   invoking  certiorari or supervisory jurisdiction  of  the   High  Court  would  obstruct  the  smooth   flow   and/or   early   disposal   of  the   suit   or   proceedings.   The   High  Court   may   feel   inclined   to   intervene  where   the   error   is   such,   as,   if   not  Page 90 of 115 C/SCA/6331/2015 ORDER corrected   at   that   very   moment,   may  become   incapable   of   correction   at   a  later   stage   and   refusal   to   intervene  would result in travesty of justice or  where such refusal itself would result  in prolonging of the lis.

(8)   The   High   Court   in   exercise   of  certiorari or supervisory jurisdiction  will   not  convert   itself  into   a  court  of   appeal   and   indulge   in  reappreciation   or   evaluation   of  evidence or correct errors in drawing  inferences   or   correct   errors   of   mere  formal or technical character.

(9)   In   practice,   the   parameters   for  exercising   jurisdiction   to   issue   a  writ   of   certiorari   and   those   calling  for   exercise   of   supervisory  jurisdiction   are   almost   similar   and  the width of jurisdiction exercised by  the   High   Courts   in   India   unlike  English courts has almost obliterated  the   distinction   between   the   two  jurisdictions.   While   exercising  jurisdiction   to   issue   a   writ   of  certiorari,   the   High   Court   may   annul  or   set   aside   the   act,   order   or  proceedings of the subordinate courts  but cannot substitute its own decision  in   place   thereof.   In   exercise   of  supervisory   jurisdiction   the   High  Court   may   not   only   give   suitable  directions   so   as   to   guide   the  subordinate court as to the manner in  which   it   would   act   or   proceed  thereafter   or   afresh,   the   High   Court  may in appropriate cases itself make   an   order   in   supersession   or  substitution   of   the   order   of   the  subordinate court as the court should  have   made   in   the   facts   and  circumstances of the case."

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7. The same question was considered by  another Bench in  Shalini Shyam Shetty  v.  Rajendra Shankar Patil, and it was  held: (SCC pp. 347­49, para 49) "(a)  A petition  under  Article  226  of  the   Constitution   is   different   from   a  petition   under   Article   227.   The   mode  of exercise of power by the High Court  under   these   two   articles   is   also  different.

(b)   In   any   event,   a   petition   under  Article   227   cannot   be   called   a   writ  petition.   The   history   of   the  conferment   of   writ   jurisdiction   on  High Courts is substantially different  from the history of conferment of the  power   of   superintendence   on   the   High  Courts under Article 227 and have been  discussed above.

(c) High Courts cannot, at the drop of  a   hat,   in   exercise   of   its   power   of  superintendence   under   Article   227   of  the   Constitution,   interfere   with   the  orders of tribunals or courts inferior  to it. Nor can it, in exercise of this  power, act as a court of appeal over  the   orders   of   the   court   or   tribunal  subordinate  to  it.   In   cases   where   an  alternative   statutory   mode   of  redressal   has   been   provided,   that  would   also   operate   as   a   restrain   on  the exercise of this power by the High  Court.

(d) The parameters of interference by  High Courts in exercise of their power  of   superintendence   have   been  repeatedly laid down by this Court. In  this   regard   the   High   Court   must   be  Page 92 of 115 C/SCA/6331/2015 ORDER guided by the principles laid down by  the   Constitution   Bench   of   this   Court  in Waryam Singh5 and the principles in  Waryam   Singh5  have   been   repeatedly  followed   by   subsequent   Constitution  Benches and various other decisions of  this Court.

(e) According to the ratio in  Waryam  Singh5, followed in subsequent cases,  the   High   Court   in   exercise   of   its  jurisdiction   of   superintendence   can  interfere   in   order   only   to   keep   the  tribunals   and   courts   subordinate   to  it,   'within   the   bounds   of   their  authority'.

(f)   In   order   to   ensure   that   law   is  followed by such tribunals and courts  by   exercising   jurisdiction   which   is  vested in them and by not declining to  exercise   the   jurisdiction   which   is  vested in them.

(g) Apart from the situations pointed  in   (e)   and   (f),   High   Court   can  interfere in exercise of its power of  superintendence when there has been a  patent perversity in the orders of the  tribunals and courts subordinate to it  or   where   there   has   been   a   gross   and  manifest   failure   of   justice   or   the  basic   principles   of   natural   justice  have been flouted.

(h)   In   exercise   of   its   power   of  superintendence   High   Court   cannot  interfere   to   correct   mere   errors   of  law   or   fact   or   just   because   another  view   than   the   one   taken   by   the  tribunals or courts subordinate to it,  is a possible view. In other words the  Page 93 of 115 C/SCA/6331/2015 ORDER jurisdiction has to be very sparingly  exercised.

(i)   The   High   Court's   power   of  superintendence   under   Article   227  cannot be curtailed by any statute. It  has been declared a part of the basic  structure   of   the   Constitution   by   the  Constitution Bench of this Court in L.  Chandra   Kumar  v.  Union   of   India6  and  therefore   abridgment   by   a  constitutional amendment is also very  doubtful.

(j)   It   may   be   true   that   a   statutory  amendment   of   a   rather   cognate  provision,   like   Section   115   of   the  Civil   Procedure   Code   by   the   Civil  Procedure   Code   (Amendment)   Act,   1999  does not and cannot cut down the ambit  of   High   Court's   power   under   Article 

227.   At   the   same   time,   it   must   be  remembered   that   such   statutory  amendment   does   not   correspondingly  expand   the   High   Court's   jurisdiction  of superintendence under Article 227.

(k) The power is discretionary and has  to   be   exercised   on   equitable  principle. In an appropriate case, the  power can be exercised suo motu.

(l)   On   a   proper   appreciation   of   the  wide and unfettered power of the High  Court under Article 227, it transpires  that   the  main   object  of  this   article  is   to   keep   strict   administrative   and  judicial control by the High Court on  the   administration   of   justice   within  its territory.

(m)   The   object   of   superintendence,  both   administrative   and   judicial,   is  Page 94 of 115 C/SCA/6331/2015 ORDER to   maintain   efficiency,   smooth   and  orderly   functioning   of   the   entire  machinery of justice in such a way as  it   does   not   bring   it   into   any  disrepute.   The   power   of   interference  under   this   article   is   to   be   kept   to  the   minimum  to  ensure   that  the   wheel  of justice does not come to a halt and  the   fountain   of   justice   remains   pure  and   unpolluted   in   order   to   maintain  public   confidence   in   the  functioning  of   the   tribunals   and   courts  subordinate to the High Court.

(n) This reserve and exceptional power  of judicial intervention is not to be  exercised just for grant of relief in  individual   cases   but   should   be  directed   for   promotion   of   public  confidence   in   the   administration   of  justice in the larger public interest  whereas   Article   226   is   meant   for  protection   of   individual   grievance.  Therefore, the power under Article 227  may be unfettered but its exercise is  subject   to   high   degree   of   judicial  discipline pointed out above.

(o)   An   improper   and   a   frequent  exercise   of   this   power   will   be  counterproductive and will divest this  extraordinary   power   of   its   strength  and vitality."

19. In the case of Punjab National Bank (supra), it  has been observed as under:­ "6. The   Act   has   been   enacted  with   a  view   to   provide   a   special   procedure  for   recovery   of   debts   due   to   the  banks and the financial institutions. 

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C/SCA/6331/2015 ORDER There is hierarchy of appeal provided  in   the   Act,   namely,   filing   of   an  appeal   under   S.   20   and   this   fast  track  procedure  cannot  be  allowed  to  be derailed either by taking recourse  to   proceedings   under   Arts.   226   and  227 of the Constitution or by filing  a   civil   suit,   which   is   expressly  barred. Even though a provision under  an   Act   cannot   expressly   oust   the  jurisdiction of the Court under Arts.  226   and   227   of   the   Constitution,  nevertheless   when   there   is   an  alternative remedy available judicial  prudence   demands   that   the   Court  refrains   from   exercising   its  jurisdiction   under   the   said  constitutional provisions. This was a  case where the High Court should not  have   entertained   the   petition   under  Art.   227   of   the   Constitution   and  should   have   directed   the   respondent  to   take   recourse   to   the   appeal  mechanism provided by the Act."

20. In the case of Gujarat Fisheries Central Co­Op. 

Association Ltd.  (supra), it has been observed  as under:­ "4. While   providing   the   statutory  Appellate   Forum   in   Section   20   and  making   some   safeguards,   and  additionally   statutorily   prescribing  75   per   cent   of   the   amount,   to   be  deposited   as   a   condition   precedent  for filing an appeal, evidently, aims  at   to   discourage   the   unscrupulous  persons   and   to   encourage   the  bonafide,   honest   people   to   take   the  orders   for   further   judicial   scrutiny  in   the   Appellate   Forum.   With   a   view  to   obviate   the   depositing   of   75   per  Page 96 of 115 C/SCA/6331/2015 ORDER cent   of   amount   as   prescribed   under  Section  21   and   with  a   view   to   avail  the   statutory   appellate   provision,  the   parties   cannot   be   permitted   to  invoke   extraordinary,   plenary,  equitable,   discretionary   writ  jurisdiction   under   Article   226   and  227   of   the   Constitution   of   India.  Though   there   is   no   ban   and   bar   to  entertain   the   petition,   the   prudence  and   the   practice   would,   undoubtedly,  command   that   ordinarily   when  alternative   efficacious   remedy   is  available,   and,   more   so,   when  statutory   appellate   mechanism   is  available in the Statute, no petition  should   be   entertained.   The   view,  which   we   are   inclined   take,   is   very  reinforced   by   the   decision   of   the  Hon'ble Apex Court rendered in Punjab  National   Bank   Vs.   O.C.   Krishnan   and  Others - (2001) 6 Supreme Court Cases 

569.   In   a   similar  case,   it   has   been  clearly  propounded  and  held  that the  High   Court   ought   not   to   have  exercised   its   jurisdiction   under  Article 227, in view of the provision  for   alternative   remedy   contained   in  the Act. It will also be interesting  to note that the Act has been enacted  with   a   view   to   provide   a   special  procedure   for   recovery   of   debts   due  to   the   banks   and   financial  institutions. There is a hierarchy of  appeal   provided   in   the   Act.   The  appeal is provided in Section 20 and  obviously   therefore   such   an   fast­ track procedure  cannot  be  allowed  to  be derailed either by taking recourse  to proceedings under Articles 226 and  227 of the Constitution or by filing  a   civil  suit  under   Section  9   of   the  Code   of   Civil   Procedure.   It   is   in  this   context   it   has   been   succinctly  Page 97 of 115 C/SCA/6331/2015 ORDER observed in the said decision by the  Hon'ble   Apex   Court,   that,   "Even  though   a   provision   under   an   Act  cannot   expressly   oust   the  jurisdiction   of   the   court   under  Articles   226   and   227   of   the  Constitution,   nevertheless,   when  there   is   an   alternative   remedy  available,   judicial   prudence   demands  that   the   Court   refrains   from  exercising its jurisdiction under the  constitutional   writ   provisions.   In  this   connection,   it   would   also   be  interesting   to   refer   the   Division  Bench   decision   of   this   Court  delivered   by   us   [Coram:   J.N.   Bhatt  and K.A. Puj, JJ.] in Letters Patent  Appeal No. 685 of 2002 on 19­2­2003,  wherein,   in   a   similar   case,   we   have  taken   the   same   view   and   we   find   no  reason   to   make   a   departure   from   our  earlier view.

5.   The   learned   Advocate   for   the  appellant   has   taken   us   through  following  Judgments  in  course of  his  submissions before  us  and  in  support  of   his   version   that   the   impugned  order   is   without   jurisdiction   and  that  despite  the  provision of  appeal  into the Act, the jurisdiction of the  Court,  under  Article 226/227, is  not  barred.   The   proposition,   which   is  advanced   and   sought   to   be   supported  by the following decisions, cannot be  questioned.   Therefore,   without  entering   into   the   meticulous   details  of   the   entire   hosts   of   case   law,  relied on by the learned advocate for  the   appellant,   we   would   just  highlight   the   cases   relied   on   and  through which we are taken in course  of the submissions, but they are not  attracted and applicable to the facts  Page 98 of 115 C/SCA/6331/2015 ORDER of this case:

1.   Whirlpool   Corporation   Vs.  Registrar   of   Trade   Marks,   Mumbai   &  Others ­ (1998) 8 Supreme Court Cases 


2.   Dr.   Smt.   Kuntesh   Gupta   Vs.  Management   of   Hindu   Kanya  Mahavidyalaya,   Sitapur   (U.P.)   and  Others ­ AIR 1987 S.C. 2186.

3.   Harbanslal   Sahnia   &   Anr.   Vs.  Indian Oil Corporation Ltd & Others ­  2002 (9) SCALE 724.

4.   Rohtas   Industries   Ltd   Vs.   Rohtas  Industries   Staff   Union   and   Others   ­  AIR 1976 SC 425.

5.   Union   of   India   and   Another   Vs.  State of Haryana and Another ­ (2000)  10 SCC 482.

6.   State   of   West   Bengal   Vs.   North  Adjai Coal Co. Ltd. 1971 (1) SCC 309.

7.   State   of   U.P.&   Ors.   Vs.   M/s.  Indian   Hume   Pipe   Co.Ltd.   ­   AIR   1977  SC 1132.

8.  Himmatlal  Harilal Mehta Vs.  State  of M.P. & Others ­ AIR 1954 SC 403.

9.   T.C.   Basappa   Vs.   T.   Nagappa   and  Another ­ AIR 1954 SC 440.

10. State of U.P. Vs. Mohammad Nooh ­  AIR 1958 SC 86.

11.   Calcutta   Discount   Co.   Ltd  vs.Income­tax   Officer,   Companies  District & Another ­ AIR 1961 SC 372.

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12.   A.V.   Venkateswaran   Collector   of  Customs,   Bombay   Vs.   Ramchand   Sobhraj  Wadhwani   and   Another   ­   AIR   1961   SC  1506.

13.   M.G.   Abrol,   Additional   Collector  of   Customs,   Bombay   and   another   Vs.  M/s.   Shantilal   Chhotalal   and   Co.   ­  AIR 1966 SC 197."

21. In the case of State Bank of India (supra), it  has been observed as under:­ "6. We have heard learned counsel for  the parties. We fail to understand how  the   High   Court   could   have   exercised  its   jurisdiction   under   Articles   226  and   2327   of   the   Constitution   to   set  aside   a   decree/final  order   passed  by  the DRT on 9.4.2003, in a collateral  proceeding   wherein   the   decree/final  order was challenged indirectly on the  ground   that   the   application   of   the  respondent   for   cross­examining   the  deponent   had   earlier   been   wrongly  rejected.   We   have   no   hesitation   in  holding   that   when   the   DRT   did   not  accede   to   the   request   of   the  respondent   to   cross­examine   the  deponent, it could have, in the appeal  preferred   by   it,   assailed   the  decree/final order on that ground and  the   Appellate   Authority   would   have  passed   appropriate   orders.   The   mere  fact that the respondent had not been  given an opportunity to cross­examine  the   deponent   did   not   enable   the  respondent to bypass the provision for  appeal   and   approach   the   High   Court  directly   by   a   writ   petition   under  Articles   226   and   227   of   the  Page 100 of 115 C/SCA/6331/2015 ORDER Constitution,   challenging   the  decree/final order on the ground that  the order earlier passed, refusing to  permit   the   cross­examination   of   the  deponent, was erroneous.

7. In the facts and circumstances of  this case, we hold that the respondent  ought   to   have   availed   the   remedy  provided under Section 20 of the Act  and   preferred   an   appeal   before   the  Appellate   Tribunal   wherein   he   could  have   urged   all   his   grievances   and  challenged   the   decree/final   order  passed by the DRT. The order passed by  the   High   Court   in   exercise   of   writ  jurisdiction is wholly unjustified and  it is accordingly set aside." 

22. In the case of United Bank of India (supra), it  has been observed as under:­ "42. There   is   another   reason   why   the  impugned   order   should   be   set   aside.  If   respondent   No.1   had   any   tangible  grievance   against   the   notice   issued  under   Section   13(4)   or   action   taken  under Section 14, then she could have  availed   remedy   by   filing   an  application   under   Section   17(1).   The  expression   'any   person'   used   in  Section   17(1)   is   of   wide   import.   It  takes   within   its   fold,   not   only   the  borrower   but   also   guarantor   or   any  other   person   who   may   be   affected   by  the   action  taken  under  Section  13(4)  or Section 14. Both, the Tribunal and  the   Appellate   Tribunal   are   empowered  to pass interim orders under Sections  17 and 18 and are required to decide  the   matters   within   a   fixed   time  Page 101 of 115 C/SCA/6331/2015 ORDER schedule. It is thus evident that the  remedies   available   to   an   aggrieved  person   under   the   SARFAESI   Act   are  both expeditious and effective.

43. Unfortunately,   the   High   Court  overlooked   the   settled   law   that   the  High   Court   will   ordinarily   not  entertain   a   petition   under   Article  226   of   the   Constitution   if   an  effective  remedy  is  available  to   the  aggrieved   person   and   that   this   rule  applies   with   greater   rigour   in  matters   involving   recovery   of   taxes,  cess,   fees,   other   types   of   public  money and the dues of banks and other  financial   institutions.   In   our   view,  while   dealing   with   the   petitions  involving   challenge   to   the   action  taken   for   recovery   of   the   public  dues, etc., the High Court must keep  in mind that the legislations enacted  by   Parliament   and   State   Legislatures  for   recovery   of   such   dues   are   code  unto  themselves  inasmuch  as   they  not  only   contain   comprehensive   procedure  for   recovery   of   the   dues   but   also  envisage   constitution   of   quasi­ judicial  bodies  for  redressal  of   the  grievance   of   any   aggrieved   person.  Therefore,   in   all   such   cases,   High  Court   must   insist   that   before  availing  remedy  under  Article  226   of  the   Constitution,   a   person   must  exhaust   the   remedies   available   under  the relevant statute.

44.   While   expressing   the   aforesaid  view,   we   are   conscious   that   the  powers  conferred  upon  the  High  Court  under Article 226 of the Constitution  to issue to any person or authority,  including   in   appropriate   cases,   any  Government,   directions,   orders   or  Page 102 of 115 C/SCA/6331/2015 ORDER writs   including   the   five   prerogative  writs   for   the   enforcement   of   any   of  the   rights   conferred   by   Part   III   or  for   any   other   purpose   are   very   wide  and there is no express limitation on  exercise   of   that   power   but,   at   the  same time, we cannot be oblivious of  the   rules   of   self­imposed   restraint  evolved   by   this   Court,   which   every  High   Court   is   bound   to   keep   in   view  while   exercising   power   under   Article  226 of the Constitution.

45. It   is   true   that   the   rule   of  exhaustion of alternative remedy is a  rule   of   discretion   and   not   one   of  compulsion,   but   it   is   difficult   to  fathom any reason why the High Court  should   entertain   a   petition   filed  under Article 226 of the Constitution  and   pass   interim   order   ignoring   the  fact   that   the   petitioner   can   avail  effective   alternative   remedy   by  filing application, appeal, revision,  etc.   and   the   particular   legislation  contains   a   detailed   mechanism   for  redressal of his grievance.

49. The   views   expressed   in   Titaghur  Paper   Mills   Co.   Ltd.   v.   State   of  Orissa (AIR 1983 SC 603) (supra) were  echoed   in   Assistant   Collector   of  Central   Excise,   Chandan   Nagar,   West  Bengal   v.   Dunlop   India   Ltd.   and  others   (1985)   1   SCC   260   :   (AIR   1985  SC 330) in the following words:

"Article   226   is   not   meant   to   short­ circuit   or   circumvent   statutory  procedures.   It   is   only   where  statutory   remedies   are   entirely   ill­ suited   to   meet   the   demands   of  extraordinary   situations,   as   for  instance where the very vires of the  Page 103 of 115 C/SCA/6331/2015 ORDER statute   is   in   question   or   where  private   or   public   wrongs   are   so  inextricably   mixed   up   and   the  prevention   of   public   injury   and   the  vindication of public justice require  it   that   recourse   may   be   had   to  Article  226  of   the   Constitution.  But  then   the   Court   must   have   good   and  sufficient   reason   to   bypass   the  alternative   remedy   provided   by  statute. Surely matters involving the  revenue   where   statutory   remedies   are  available   are   not   such   matters.   We  can also take judicial notice of the  fact   that   the   vast   majority   of   the  petitions   under   Article   226   of   the  Constitution are filed solely for the  purpose   of   obtaining   interim   orders  and   thereafter   prolong   the  proceedings   by   one   device   or   the  other.   The   practice   certainly   needs  to be strongly discouraged."

50. In Punjab National Bank v. O. C.  Krishnan   and   others   (2001)   6   SCC  569   :   (AIR   2001   SC   3208   :   2001   AIR  SCW   2993),  this  Court  considered  the  question   whether   a   petition   under  Article   227   of   the   Constitution   was  maintainable   against   an   order   passed  by   the   Tribunal   under   Section   19   of  the DRT Act and observed:

"5.   In   our   opinion,   the   order   which  was   passed  by  the  Tribunal  directing  sale   of   mortgaged   property   was  appealable   under   Section   20   of   the  Recovery   of   Debts   Due   to   Banks   and  Financial Institutions Act, 1993 (for  short   "the   Act").   The   High   Court  ought   not   to   have   exercised   its  jurisdiction   under   Article   227   in  view of the provision for alternative  remedy   contained   in   the   Act.   We   do  Page 104 of 115 C/SCA/6331/2015 ORDER not   propose   to   go   into   the  correctness   of   the   decision   of   the  High   Court   and   whether   the   order  passed by the Tribunal was correct or  not   has   to   be   decided   before   an  appropriate forum.

55. It is a matter of serious concern  that   despite   repeated   pronouncement  of   this   Court,   the   High   Courts  continue   to   ignore   the   availability  of   statutory   remedies   under   the   DRT  Act   and   SARFAESI   Act   and   exercise  jurisdiction   under   Article   226   for  passing   orders   which   have   serious  adverse impact on the right of banks  and   other   financial   institutions   to  recover their dues. We hope and trust  that   in   future   the   High   Courts   will  exercise   their   discretion   in   such  matters   with   greater   caution,   care  and circumspection."

23. In   the   case   of  Kanaiyalal   Lalchand   Sachdev  (supra), it has been observed as under:­ "23. In   our   opinion,   therefore,   the  High   Court   rightly   dismissed   the  petition   on   the   ground   that   an  efficacious   remedy   was   available   to  the   appellants   under   Section   17   of  the   Act.   It   is   well­settled   that  ordinarily   relief   under   Articles  226/227 of the Constitution of India  is   not   available   if   an   efficacious  alternative   remedy   is   available   to  any   aggrieved   person.   (See:   Sadhana  Lodh Vs. National Insurance Co. Ltd.  &   Anr.5;   Surya   Dev   Rai   Vs.   Ram  Chander   Rai   &   Ors.6;   State   Bank   of  India   Vs.   Allied   Chemical  Laboratories & Anr.) Page 105 of 115 C/SCA/6331/2015 ORDER

25. In the instant case, apart from  the   fact   that   admittedly   certain  disputed questions of fact viz. non­ receipt of notice under Section 13(2)  of the Act, non­communication of the  order   of   the   Chief   Judicial  Magistrate   etc.   are   involved,   an  efficacious   statutory   remedy   of  appeal   under   Section   17   of   the   Act  was available to the appellants, who  ultimately   availed   of   the   same.  Therefore, having regard to the facts  obtaining in the case, the High Court  was   fully   justified   in   declining   to  exercise   its   jurisdiction   under  Articles   226   and   227   of   the  Constitution."

24. In   the   case   of  Easland   Combines,   Coimbatore  (supra), it has been observed as under:­ "18. In   our   view,   it   would   be  difficult   to   accept   the   aforesaid  contention.   It   is   well   settled   law  that   merely   because   a   law   causes  hardship, it cannot be interpreted in  a manner so as to defeat its object.  It is also to be remembered that the  Courts   are   not   concerned   with   the  legislative   policy   or   with   the  result,   whether   injurious   or  otherwise,   by   giving   effect   to   the  language used nor it is the function  of   the   Court   where   the   meaning   is  clear not to give effect to it merely  because   it   would   lead   to   some  hardship.   It   is   the   duty   imposed   on  the   Courts   in   interpreting   a  particular   provision   of   law   to  ascertain   the   meaning   and   intendment  of   the   Legislature   and   in   doing   so,  Page 106 of 115 C/SCA/6331/2015 ORDER it  should  presume that  the provision  was   designed   to   effectuate   a  particular   object   or   to   meet   a  particular requirement. Re: Firm Amar  Nath   Basheshar   Dass   v.   Tek   Chand,  [1972] 1 SCC 893."

25. In   the   case   of  Ratanlal  (supra),   it   has   been  observed as under:­ "13. The   various   decisions   cited   by  the learned counsel for applicant only  lay   down   that   even   when   a   case   is  disposed   of   in   motion   hearing,   the  Court is  required to  record  in  brief  its ground for doing so. However, non­ supply   of   grounds   cannot   be  characterized as "error apparent". It  could be a ground for the applicant to  assail the order in appeal, but not to  invoke   review   jurisdiction   of   this  Court.   Recourse   to   Order   41(47),   R.1  of   CPC   by   the   applicant   is   wholly  misconceived   and   his   application  deserves dismissal with costs."

26. In the case of Tajender Singh Ghambhir (supra),  it has been observed as under:­ "11. The High Court was also in error  in   holding   that   the   deficiency   in  court­fee in respect of plaint cannot  be   made   good   during   the   appellate  stage.   In   this   regard,   the   High  Court,   overlooked   well   known   legal  position that  appeal is  continuation  of   suit   and   the   power   of   the  appellate  court  is  co­extensive  with  that of the trial court. It failed to  Page 107 of 115 C/SCA/6331/2015 ORDER bear in mind that what could be done  by the trial court in the proceeding  of   the   suit,   can   always   be   done   by  the   appellate   court   in   the   interest  of justice."

27. Considering   the   impugned   order   in   this  petition, though at first blush, the contention  put   forth   by   the   learned   advocate   for   the  petitioner appears to be appealing, however, on  going through the impugned order, it cannot be  said   that   no   reasons   are   assigned   by   the  Tribunal.   In   the   present   case,   it   cannot   be  said  that the  Tribunal  has just  dismissed the  application for stay by merely stating that it  is dismissed. Even if it is presumed as stated  in   the   additional   affidavit   filed   by   the  petitioner   that   certain   contentions   raised   by  the   Tribunal,   though   recorded,   are   not   dealt  with,   is   examined,   it   cannot   be   said   that   no  reasons   are   given.   The   Tribunal   was   dealing  with   an   application   for   stay   and   therefore,  prima facie case was to be examined. In opinion  of   this   Court,   the   contentions   raised   herein  Page 108 of 115 C/SCA/6331/2015 ORDER touches   the   merits   of   the   main   application  which   requires   elaborate   examination   and   even  considering   the   impugned   order,   it   cannot   be  said   that   there  is   no   consideration   by   the  Tribunal   and   hence,   it   cannot   be   said   that  there   is   breach   of   principles   of   natural  justice  as  contended by the petitioner and in  facts   arising   out   of   this   petition,   such   a  contention   deserves   to   be   negatived   while  exercising   extraordinary   discretionary  jurisdiction of this Court.

28. The   petitioner   having   failed   even   before   the  Apex   Court   has   filed   this   petition   directly  under Article 226 of the Constitution of India. 

The decision of the Apex Court in the case of  Keshavlal   Khemchand   &   Sons   Pvt.   Ltd.  (supra)  was rendered in a group of petitions and one of  the petitions therein was filed by the present  petitioner.   In   the   said   judgment,   the   Apex  Court has observed thus:­ "74. Before closing these matters, we  may also deal with one aspect of the  Page 109 of 115 C/SCA/6331/2015 ORDER judgment   of   the   Gujarat   High   Court.  The  Gujarat High  Court  recorded  that  the impugned amendment is ultra vires  the object of the Act. We presume for  the   sake   of   this   judgment   that   the  impugned amendment is not strictly in  consonance   with   the   objects  enunciated when the Act was initially  made. We fail to understand as to how  such   inconsistency   will   render   the  Act unconstitutional. The objects and  reasons   are   not   voted   upon   by   the  legislature.   If   the   enactment   is  otherwise within the constitutionally  permissible   limits,   the   fact   that  there   is   a   divergence   between   the  objects appended to the Bill and the  tenor   of   the   Act,   in   our   opinion,  cannot be a ground for declaring the  law unconstitutional.

75.   In   view   of   our   abovementioned  conclusions,   we   do   not   propose   to  examine   other   submissions   regarding  the   correctness   of   the   Gujarat   High  Court's   declaration   that   the  unamended   definition   of   the  expression   "NPA"   would   continue   to  govern   the   situation   in   view   of   the  Gujarat   High   Court's   conclusion   that  the   amended   definition   of   NPA   is  unconstitutional.

76.   All   the   writ   petitions   and   the  appeals   are   disposed   of   declaring  that   the   amended   definition   of   the  expression   "NPA"   under   Section   2(1)

(o)   of   the   Act   is   constitutionally  valid.

77.   In   the   result,   all   the   writ  petitions   either   filed   before   this  Court or filed before the Madras and  Gujarat   High   Courts   and   the   appeals  Page 110 of 115 C/SCA/6331/2015 ORDER of the borrowers stand dismissed. The  appeals of the CREDITORS are allowed. 

Each   of   the   writ  petitioners/borrowers shall pay costs  to   the   respective   CREDITORS  calculated   at   1%   of   the   amount  outstanding on the date of the notice  under   Section   13(2)   of   the   Act   in  each of the cases."

29. It requires to be noted that the Tribunal was  examining the application for stay and not the  main   Securitization   Application   under   Section  17 of the Act and therefore, the Tribunal was  required to consider only the prima­facie case  of the petitioner. This Court is conscious of  the fact that dismissal of applicant's petition  before the Apex Court does not take away right  of   the   petitioner   to   raise   grievance   against  respondent   No.1­Bank   in   the   legal   proceedings  of the Securitization Application filed by the  petitioner   under   Section   17   of   the   Act. 

However,   in   light   of   the   fact   that   while  examining   prima­facie   case,   the   Tribunal   has  given its findings on merits and in facts and  circumstances of this case, as observed above,  the   same   cannot   be   termed   as   breach   of  Page 111 of 115 C/SCA/6331/2015 ORDER principles of natural justice and in opinion of  this Court, permitting the petitioner to bypass  the statutory remedy of filing an appeal would  be  against the very purpose and object of the  Act as held by the Apex Court in the case of  United   Bank   of   India  (supra).  As   per   the  principles enunciated by the Apex Court in the  case of  Keshavlal Khemchand and Sons Pvt. Ltd. 

(supra),   this   is   not   a   fit   case   for  entertaining the present petition under Article  226   by   bypassing   the   statutory   remedy   of  appeal.  It  is  true that alternative remedy is  not an absolute bar; however, in facts of this  case, the same does  not warrant  bypassing the  statutory remedy. Even considering the facts of  this   case,   the   petitioner   has   been   litigating  before   different   forums   including   this   Court  and also the Apex Court and the points in issue  raised by the petitioner even in this petition  are   entirely   on   merits   of   the   main  Securitization   Application.   The   record  indicates   that   the   petitioner   as   well   as   the  Page 112 of 115 C/SCA/6331/2015 ORDER Bank were heard extensively by the Tribunal and  therefore,   considering   the   same,   when   the  petitioner   has   an   alternative   efficacious  remedy, the present petition under Article 226  and/or Article 227 of the Constitution of India  does  not deserve  to  be  entertained  keeping in  mind the ratio laid down by the Apex Court in  the   case   of  United   Bank   of   India  (supra)  and  Kanaiyalal Lalchand Sachdev (supra).

30. The   judgments   relied   upon   by   the   learned  advocate for the petitioner therefore would not  be applicable in facts of the present case and  as observed hereinabove, it cannot be said that  no   reasons   are   given.   The   aspect   which   would  touch   the   merit   of   the   main   application,   in  facts of this case, needs to be examined in a  full­fledged   appeal   as   provided   under   Section  18   of   the   Act.   The   petitioner   has   got   an  alternative efficacious remedy by way of filing  an   appeal   and   the   petitioner   deserves   to   be  relegated   to   such   an   alternative   remedy,  leaving it open for the appellate authority to  Page 113 of 115 C/SCA/6331/2015 ORDER examine the same in accordance with law if any  appeal   is   filed   by   the   petitioner.   The   facts  and   circumstances   of   the   case   on   hand   do   not  fall   within   the   exceptions   carved   out   by   the  Apex Court in the case of Whirlpool Corporation  Vs.   Registrar   of   Trade   Marks,   Mumbai   &   Ors. 

reported in (1998) 8 SCC 1 and the facts do not  lead to the conclusion that there is breach of  principles   of   natural   justice,   which   would  enable this Court to exercise its extraordinary  jurisdiction   under   Article   226   of   the  Constitution of India. 

31. The impugned order is dated 19.3.2015  and the  present   petition   is   filed   on   8.4.2015   and   is  being disposed of today and therefore, if any  application   of   delay   is   filed   by   the  petitioner, the appellate authority namely DRAT  shall   consider   the   same   sympathetically   and  hear   the   appeal,   if   any,   filed   by   the  petitioner, on merits. 

32. Even at the cost of repetition, it is provided  Page 114 of 115 C/SCA/6331/2015 ORDER that   though   the   learned   advocates   have   also  gone  into the  merits of the application which  is   decided   by   the   Tribunal   by   the   impugned  order, the same is not examined by this Court  in   view  of  the   fact  that  the  petition  is  not  being entertained on the ground of availability  of alternative remedy.

33. Resultantly,   the   petition   deserves   to   be  dismissed   and   is   hereby   dismissed.   Parties   to  bear their own costs.

(R.M.CHHAYA, J.) mrp Page 115 of 115