I.T.C. Ltd. vs Union of India (UOI)

C.J.

This appeal has been preferred against the judgment of a learned Single Judge dismissing a Writ application being CO. No. 6202 (W) of 1992. The facts in brief are as follows:

I.T.C. Ltd., (hereinafter referred to as ''the company'') has been manufacturing cigarettes in India since 1911. The Appellant No. 2 is one of its shareholders. The exicise duty is payable on the manufacture of cigarettes under the Central Excise and Salt Act, 1944 (called ''the Act'' for brevity) at the prescribed rates read with the relevant Exemption Notification in force issued under Rule 8 of the Central Excise Rules, 1944. (Called ''the Rules'' for short).

Between March 1, 1983 and February 28, 1987, excise duty was payable on cigarettes at the rates as specified by means of different notifications issued under Rule 8 of the Rules. The Appellant Company alleged, that excise duty on the cigarettes manufactured by it during the period aforesaid had been paid up. The aggregate amount paid by the Appellant Company during the said period was Rs. 2441 crores.

On March 27, 1987, a notice was issued to the Appellant Company and its Directors by Sri N.K. Bajpai, Director of Anti-Evasion (Central Excise) asking the Company to show cause why a sum of Rs. 803.78 crores should not be recovered as shortfall for the said period and also why orders of penalty and confiscation be not made against the Appellant. The Appellant submitted a reply to the Show Cause Notice asserting that the amount payable under the law had been duly paid to the Central Government. As such, Show Cause Notice was factually not correct. In support and in purported proof of the allegations in the said show cause notice reliance has been placed on.

(a) 88 documents seized from the offices of the Appellant Company and of various wholesale dealers. These documents have been collectively marked as Annexure ''A'' to the Show Cause Notice.

(b) The statements of 45 persons examined by the Excise Authorities u/s 14 of the Act. The statement of 43 persons have been collectively marked as Annexure ''B'' to Show Cause Notice. The statement of one person is annexed to the Corrigendum to the Show Cause Notice, and the statement of one person has been referred to in the Show Cause Notice. Extracts from all the said statements have been incorporated in the body of the Show Cause Notice.

The principal allegations in the said Show Cause Notice are that the Appellant Company clandestinely fixed prices at which cigarettes manufactured by it were to be sold, which were higher than the prices printed on the cigarette packets. These higher specific prices, referred to as effective prices, which are indicated in the Corrigendum to the Show Cause Notice, were clandestinely circulated to the company formations, wholesale dealers, secondary wholesale dealers and retailers for compliance. It has been alleged that the Appellant Company had, with an intent to defraud the Revenue, deliberately printed lower prices on the cigarette packets so as to avail of the lower rate of excise duty payable on such prices. It was, accordingly liable to pay the difference between the amount of duty payable on the basis of the alleged higher prices fixed by the Appellant Company and the actual amount of excise duty paid by it, amounting to Rs. 803.78 crores.

The legality of the said Show Cause Notice dated March 27, 1987, was challenged by the Appellant Company in a writ petition filed by it in this Hon''ble Court on August 11, 1987. The writ application was dismissed by the Hon''ble Mr. Justice Bhagabati Prasad Banerjee by his judgment delivered on December 24, 1987. The appeal preferred from the said judgment was dismissed by a Division Bench consisting of the Hon''ble Mr. Justice S.C. Sen and the Hon''ble Mr. Justice U.C. Banerjee on October 12, 1988. A SLP against the judgment of the Court of Appeal is pending before the Supreme Court.

In the meantime, on March 2, 1988, the Appellant Company filed a written reply to the show cause notice. In it, the Appellant company denied the correctness of the allegations in the show cause notice, as also those contained in the statement of witnesses annexed to and relied upon in the said show cause notice and the corrigendum thereto. In its written reply, it specifically claimed right to cross-examine the persons who had made these statements, and also specifically reserve''d its right to lead its own evidence by way of defence.

Mr. N.K. Bajpai, Director Anti-Evasion was transferred on December 30, 1988. So he ceased to be the Adjudicator. The case was thereafter transferred to Mr. H.M. Singh. After some hearing Mr. H.M. Singh also ceased to be the Adjudicating Authority. Thereafter, Mr. Lalji Ram; Collector of Central Excise of Delhi, was appointed as Adjudicating Authority. He too ceased to hold office of the*adjudicating authority after sometime.

Before each of the aforesaid Adjudicators, the Appellant company filed applications for permission to cross-examine all the 45 persons whose statements had been relied upon in the show cause notice.

On October 25, 1990, G.R. Sharma, Respondent No. 2 Collector of Central Excise, Delhi, was appointed the Adjudicator in fie matter. On January 9, 1991, the Appellant company again filed an application before him for permission to cross-examine the remaining 36 persons whose statements had been relied on in the show cause notice. However, by order dated April 5, 1991 the Respondent No. 2 only allowed in all 5 persons to be cross-examined. Thus, only 14 of the 45 witnesses have been permitted to be cross-examined by the Appellant Company. On March 12, 1992, the Appellant company filed an application before the Respondent No. 2 for permission to examine fifty persons as defence witnesses. However, by order dated May 21, 1992, the Respondent No. 2 rejected the prayer of the Appellant Company for examination of defence witnesses. By the same order, the Respondent No. 2 allowed the individual applications made by twelve Directors to examine themselves in their own defence.

On June 7, 1992, the Appellants filed a writ application in this Hon''ble Court challenging the sad orders dated April 5, 1991 and May 21, 1992 passed by the Respondent No. 2 on the said application made by the Appellant company. The said application was numbered as CO. No. 6202(W) of 1992. Upon the said application being moved on notice before the Hon''ble Mr. Justice Suhas Chandra Sen as His Lordship then was, His Lordship, after hearing the parties, passed an interim order on June 17, 1992 to the effect that no final order should be passed by the Respondent No. 2 in the adjudication proceedings without giving an opportunity to the Appellant company to cross-examine the witnesses whose statements had been relied on in the show cause notice.

During the pendency of the said writ petition the Respondent No. 2 Mr. G.R. Sharma, ceased to be the Adjudicating Authority and with effect from June, 1993 the hearing in connection with show cause notice commenced before Mr. Somnath Pal, the Collector, Central Excise, Delhi. Writ petition being CO. No. 6202 (W) of 1992 was heard by Mr. Justice Umesh Chandra Banerjee for a number of days It was ultimately dismissed by the judgment challenged in this appeal.

Proceeding initiatea against the Company upon show cause notice dated March 27, 1987, following investigation at the level of the Directorate of Anti-Evasion (Central Excise) and Revenue Intelligence, alleging defalcation of large amount of excise duty and envisaging inquiry by the Adjudicating Authority, under Central Act, is without doubt quasi-judicial in character. The enquky is to abide by the principles of natural justice which ordinarily extend also to administrative matters entailing civil consequences A.K. Kraipak v. Union of India AIR 1970 S.G. 150 Natural justice is not contained in strait jacket ; the application of the principles thereof to a case depends largely on its facts and circumstances, ''A great judge once stigmatized the expression (natural justice) as'' sadly lacking in precision and so it is, but most people will probably aeree that the rules which the courts require those who are entrusted with the duty of deciding disputes to observe in the name of ''natural justice'' are rules which every ordinary reasonable man would consider to be fair'' (Philips James: Introduction to English Law. 11th ed. p.146).

''Fairness'' in proceeding is the accepted criterian, ''Fair'' connotes what is just and reasonable. That again is dependent on relevant idets and circumstances of a case, and cannot be defined as a rule of thumb of universal appliation divorced from the ground realities. The audi alteram partem rule of natural justice casts a duty to act fairly and demands that a person should be told of the nature of the charges he is called upon to meet; he should be allowed adequate opportunity to prepare the defence, and that he should be given a fair hearing.... A person is entitled to a fair hearing before a decision adversely affecting his interests is made by a public authority.... '' (The English Legal Process - Terence Mgnam 5th ed, p. 371-72.

What is ''fair'' must vary according to the nature of the proceedings and more stringent standards will be imposed where the consequences resulting are harsh and far reaching. In Kartar Singh Vs. State of Punjab, the Supreme Court has very succinctly described the concept of fairness in the following words:

Appearance of injustice is denial of justice. Built in procedural safeguards assure a feeling of fairness. When the procedure prescribed by the statute offends the principles of fair justice or established judicial ethos or traditions or shocks the conscience, it could be said that it is fundamentally unfair and violative of the fundamental fairness which are essential to the very concept of justice and civilised procedure. Whether such fundamental fairness has been denied is to be determined by an appraisal of the totality of facts, gathered from the setting, the contents and the procedure which feed the end result. The procedure which smacks of the denial of fundamental fairness and shocks the conscience or universal sense of justice is an anathema to just, fair and reasonable procedure. Articles 14 and 21 frown against arbitrary and oppressive procedure.

The settled view is that the courts may review a public body''s decision on the ground of procedural impropriety if the decision maker has failed to meet required standards of fair procedure. The courts in review concerns itself not with a decision on its merits but the process through which it has been arrived at. It is very difficult to define precisely what is covered by the word ''procedure'' in this context, but in essence, it concerns the manner in which the decision is reached rather than the actual decision itself Tata Cellular Vs. Union of India, In reference to the entitlement to call witnesses including the right to cross examine the note appearing in Constitutional and Administrative Law (Lecture Notes): A.P. Lesueue v. Herberg at 239 is illumining. It is extracted below:

The question of entitlement to cross examine witnesses produced by the other side normally (although not always) arises where the parties are legally represented. As a general rule, it can be said that if a witness is allowed to testify orally the other side should be allowed to confront the witnesses by cross examination. But once again, this is a matter of discretion for the tribunal or adjudicator, and if the'' tribunal feels that cross examination will serve no useful purpose, then the court may be slow to disturb that discretion. The celebrated case on this point is Bushell v. Secretary of State for Environment (1980) 2 All E.R.608 where the House of Lords refused to overturn the decision of an inspector at a public inquiry in relation to the proposed motorway not to allow cross examination as to the basis of the Department prediction of the environments future traffic flow. Although the decision can be read to suggest that cross examination should not be allowed on ''Policy'' type issues, it is more accurate to say that the crucial point was that the House of Lords (and the inspector) did not regard the issue of future traffic flow as a relevant question for the inquiry to decide....

What is the importance and significance of cross-examination of a witness in a proceeding? According to Sir Ruport Cross in his celebrated work ''Evidence'' (5th ed., p.256), ''The object of cross-examination is twofold, first, to elicit information concerning facts in issue or relevant to the issue that is favourable to the party on whose behalf the cross-examination is conducted, and secondly, the cast doubt upon the accuracy of the evidence-in-chfef given against the party seeking cross-examination.

in administrative process, these objectives assume even greater significance than they possess in judicial determination - thus observes Flick in his work ''Natural Justice''.

In the United States, the concept of natural justice is the sense known to our constitutional & administration jurisprudence is rather unknown. It subsumed by one process of law. The goals of due process are fairness of procedure, security in relation to the State and individual''s sense of worth and dignity, it is a product of.history.

Initially, the concept was ''a trial according to some settled course of judicial proceedings'' Murray''s Lessee v. Hoboken Land and Imp. Co. 59 U.S. 272. Among other incidents, it included right to confrontation and cross-examination of witnesses Morrisay v. Brewer 408 U.S. 471. It reached its highest Watermark in Goldberg v. Kelly397 U.S. 254.

But making right to confrontation and cross-examination as an inalienable right in an adversarial proceeding proved counterproductive. It made the process tardy, expensive and complex. Thereafter, efforts were made to dilute it. Search was launched for alternative procedures. In Mathews v. Eldridae 424 U.S. 319, the Court observed as below.

The judicial model of an evidentiary hearing is neither a required, nor even the most effective, method of decision making in all circumstances..... In assessing what process is due..... Substantial weight must be given to the good faith Judgments of the individuals charged by congress with the administration of Social Welfare Programmes.

The Court further suggested a three fold test as follows:

First, the private interest that will be affected, by the official action ; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards ; and finally, the government''s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.

Cross-examination might be dispensed within oral hearing where the question concerns public policy or is irrelevant. To the same effect, there are observations in Constitutional & Administrative Law: Brain Thompson (p.365)

Where an oral hearing is held, is there an expectation that it should be conducted like trial, so that parties can call witnesses and carry out cross-examination, so that the general answer appears to be yes, but it is subject to reservations... Cross-examination will be allowed where it is felt to be fair and relevant.

Administrative proceedings in the form of departmental disciplinary enquiry do not require the normal rules of evidence should be followed. Where a hearing is oral, that is, witnesses and produced and examined, and the delinquent is present, or given notice to appeal, normally there can be no denial to him of the right to cross-examine. But where the department has on its satisfaction, after examining witnesses of its choice arrived at a tentative decision and given notice, can the right to cross-examine be asserted as absolute or inherent? It may be right to contend, in particular circumstances that cross-examination is not an essential ingredient of natural justice. The right, in other words, does not inhere and cannot be asserted or upheld on the analogy that the law of evidence provides this adversarial proceedings. The essential difference in the nature of these proceedings in contrast to those of trial court must be kept in view. Adversary proceeding in the trial court is much wider in scope ; there is close scrutiny on facts and lav on both sides ; either side wins or loses in entirety or in part, In Natural Justice: G.A. Flick (second ed.) at p.85 the learned author takes notes of variations to adversarial cross-examination:

... However, whether there is evidence to suggest that the adversary system is an effective means for combating bias, and is a system that implies procedural justice ; it is only too evident that all administrative adjudications cannot be based on an adversary model. Hence, variations to the adversarial safeguard of cross-examination are appropriate in the administrative process.

One variation is that a less formal style of cross-examination than that encountered in the court may be appropriate..... Another variation to formal cross-examination is the simple opportunity to comment on adversary testimony and the submission of rebuttal evidence. A third variation is to put the substance of the adverse testimony to the party and allow him to comment.... A fourth variation of formal cross-examination as to allow a party to submit questions to the witness through the Chairman.

Just as variations to formal cross-examination can be justified by the fact that the administrative procedure need not be modelled on an adversary presentation, restrictions on a right of cross-examination can be similarly justified. Of course some restrictions are inherently bad. If for example, the denial of the opportunity to cross-examine adverse testimony ''might'' have affected the result and a party has to that extent been prejudiced, objection can be taken. Again an adjudicator cannot arbitrarily impose a time limitation on cross-examination on the grounds of personal convenience....

In de Smith''s Judicial Review of Administrative Action, 4th ed. p.214, it is observed:

Refusal to permit cross-examination of witnesses at an administrative hearing will usually be a denial of natural justice. Seldom can such a refusal be justified if a witness has testified orally and a party requests leave to confront and cross-examine him the fact that the proceeding may be inquisitorial and informal is inconclusive - but there may exceptionally be valid grounds for disallowing questions to a witness on a particular matter. If a party to proceedings claims that he has been denied natural justice because the non-appearance of a witness has made it impossible to cross-examine him, an attack on the validity of the proceedings may seem to have a still firmer foundation but may well prove to be abortive....

In India, the Supreme Court has held that decisions in disciplinary proceedings is not liable to be interfered with on the ground that the procedure followed was not in accordance with that which obtains in a Court of Law, but observes that broadly-

...rules of natural justice require that a party should have the opportunity of adducing all relevant evidence on which he relies, that the evidence of the opponent should be taken in his presence, and that he should be given the opportunity of cross-examining the witnesses ex''amined by that party, and that no materials should be relied on against him without his being given an opportunity of explainir g them Union of India (UOI) Vs. T.R. Varma,

In Khem Chand v. Union of India AIR 1955 S.C. 300, in the context of Section 240(3) Government of India Act 35 (Corresponding to Article 311 of the Constitution), another constitution Bench, thus elucidated the concept of reasonable opportunity available to the charged government servant in the following words:

He must not only be given an opportunity but such opportunity must be a reasonable one. If the purpose of the provision is to give the government servant ?n opportunity to exonerate himself from the charge and if this opportunity is to be a reasonable one he should be allowed to show that the evidence against him is not worthy of credence or consideration and that he can only do if he is given a chance to cross-examine the witnesses called against him and to examine himself or any other witness in support of his defence.

Adverting to flexibility in the application of the rule of audi alteram partem, Bhagvati J. speaking for the Bench in State of Kerala Vs. K.T. Shaduli Yusuff etc., laid down-

It is, therefore, not possible to say that in every case the rule of audi alteram partem requires that a particular specified procedure to be followed. It may be that in a given case the rule of audi alteram partem may import a requirement that witnesses whose statements are sought to be relied upon be the authority holding the inquiry should be permitted to be cross-examined by the party affected while in some other case it may not. The procedure required to be adopted for giving an opportunity to a person to be heard must necessarily depend on facts and circumstances of each case.

In K.L. Tripathi Vs. State Bank of India and Others, the principle of natural justice to be applied in an appropriate case was thus laid down --

It is true that all actions against a party which involve penal or adverse consequences must be in accordance with the principles of natural justice but whether any particular principle of natural justice would be applicable to a particular situation or the question whether there has been any infraction of the application of that principle, has to be judged in the light of facts and circumstances of each particular case. The basic requirement is that there must be fair play in action and the decision must be arrived at in a just and objective manner with reference to the relevance of material and reasons. We must reiterate again that the rules of natural justice are flexible and cannot be put in any rigid formula. In order to sustain a complaint of violation of principles of natural justice on the ground of absence of opportunity to cross-examination it has to be established that prejudice has been caused to the Appellant in the procedure followed.

The basic principle is fair play in action -

The basic concept is fair play in action administrative, judicial or quasi-judicial. The concept of fair play in action must depend upon the particular lis, if there be any, between the parties. If the credibility of a person who has testified or given some information is in doubt, or if the version or the statement of the person who has testified, is, in dispute, right of cross-examination must inevitably form part of fair play in action but where there is no lis regarding the facts but certain explanation of the circumstances there is no requirement of cross-examination to be fulfilled to justify fair play in action. When on the question of facts there was no dispute, no real prejudice has been caused to a party aggrieved by an order, by absence of any formal opportunity of cross-examination per se does not invalidate or vitiate the decision arrived at fairly. This is more so when the party against whom an order has been passed does not dispute the facts and does not demand to test the veracity of the version of the credibility of the statement.

The party who does not want to controvert the veracity of the evidence from or testimony gathered behind his back cannot expect to succeed in any subsequent demand that there was no opportunity of cross-examination specially when it was not asked for and there was no dispute about the veracity of the statements. Where there is no dispute as to the facts, or the weight to be attached on disputed facts but only an explanation of the acts, absence of opportunity to cross-examination does not create any prejudice in such cases.

On principle it will be noticed, K.L. Tripathi does not mark a departure from the proposition laid down in T.R. Varma or others earlier. K.L. Tripathi certainly turns on its facts where the delinquent officer did not refute, but was shown on the contrary, to have admitted the basic fact". It would not be safe to assume from what is stated therein that the right to cross-examine witnesses does not from integral part of principles of natural justice where there is no admission of relevant facts, but on the contrary the total denial thereof.

Commenting on T.R. Varma Seervai (Supra) in his famous treatise ''Constitution of India'', Vol. 2. (3rd ed.) p.1450 says -

After the decision of the Supreme Court in Varma''s case, it must be taken as settled that ordinarily where the evidence of witnesses is relied on against a party in a quasi judicial proceeding, natural justice requires that the party affected would have an opportunity of cross examining such witness, because a person cannot be said to have an adequate opportunity unless he has an opportunity of destroying that case by cross-examination.

We have said ordinarily because the cases, discussed in paras 16.362 to 16.364 above show that there are circumstances in which, without violating natural justice, reliance can be placed on statements obtained behind the back of the parties concerned and those who made the statements need not be produced for cross-examination.-

The cases referred to in paras. 16.362 to 16.364 of the treatise stand clearly distinguished. The first in Karnethi''s case pertaining to information gathered by customs authorities and denial to produce witnesses for cross-examination being based on public policy. The other relied on proceeds on ground on decency.

In the recently decided case of Tata Cellular( Supra), the Supreme Court laid stress on the proposition that judicial review is concerned with the decision in support of which the application for judicial review is made out of the decision making process itself. It specified the duty of the court to confine itself to the question of legality, as its concern to be-

(1) Whether a decision making authority exceeded the process?

(2) Committed an error of law,

(3) Committed a breach of the rules of natural justice,

(4) Reached a decision which no reasonable tribunal would have reached,

(5) Abused its powers,

(See. p.677)

Thus, the following principles can be deduced from conspectus of the cases referred to above and also deriving advantage from the latest drift in America on this aspect. While doing so, we have to bear in mind the basic purpose and utility of the right to cross-examine witnesses, viz., to elicit correct facts and to destroy the efficacy of the statement-in-chief.

a) According to the Constitution of the Tribunal and the nature of the enquiry as well as the lis involved and the relevant statutory provision, if the facts are admitted, permitting cross-examination will, indeed, be superfluous.

b) If the right involved is mere privilege or refusal to renew such privilege in contradistinction to case involving civil consequences, cross-examination may be dispensed with.

c) If the evidence pertains to the testimony of an expert or the proceeding involves the judgment and discretion of an expert body, cross-examination may also be declined.

d) Cross-examination may also be disallowed in exceptional cases on the ground of public policy or social justice.

e) If permission to cross-examine is granted, it will be fiscally burdensome on the public exchequer or make the proceedings tardy, it may be declined.

f) If the authority is performing purely non-judicial functions.

In Mclnnes v. Onslon Fane (1978) 3 All E.R.211 Megarry, V.C. drew distinction between initial application for grant of licence and cancellation or forfeiture of an existing licence. While former merely involves privilege, the latter entails civil consequence. In the former case, the principles of natural justice may not be said to apply.

In K.L. Tripathiw(Supra), the apex Court accepted the trend prevailing in the United States, when it observed as below:

Whether a particular principle of natural justice has been violated or not has to be judged in the background of the nature of charges, the nature of the investigation conducted in the background of any statutory or relevant rules governing such enquiries.

Such being the broad framework, let us examine the facts- of the case. Crucial facts apparent on fair analysis of the decision making process adopted by the Adjudicating Authority, appear to be-

(1) The proceeding, as stated above, is quasi judicial in character the decision wherein either way might entail, civil consequences of substantial degree;

(2) The Adjudicating Authority to reach his decision would, of necessity, be required to analyse and weigh the voluminous evidence, both oral and documentary, placed before it. The gravity of the charge does not diminish the weight of the evidence necessary to establish it. Rather, it increases it.

(3) The decision although not required to be at par with the verdict of court of law would need reflect conclusions demonstrating application of mind to the points involved.

(4) The witnesses cited by the Directorate are of different variety and belonging to various concerns, such as whole-sale dealers WHO claim to have had dealings of some sort or the other with the Company or its products; they cannot all be tarred with the same brush; cross-examination might reveal something relevant to the point at issue.

In cases where witnesses or such of those as are produced by the Department before the Adjudications Authority (For short ''AA'') to testify, the Company will certainly have a right to cross-examine them. It would be incongruous to suggest that where witnesses were examined behind the back of the Co. they will be reliable, others would be totally undependable and some as worthy of reliance in part only;

(5) The statements referred to in the show cause notice purport to be recorded by the Directorate in the absence of the Company or its representative, there being no question or occasion for its participation therein;

(6) There would need be a probe into the basis or source of the version of each witness depending as well on the genuineness or otherwise of the record, if any, or the transactions referred by him, and the exclusion of hearsay;

(7) Evidence such as is shown to be fabricated, capricious or malicious apart from being irrelevant would of necessity require to be excluded from consideration that which falls within this category cannot certainly be held admissible in clear breach of the principles of natural justice.

(8) Thfe Company cannot be said to be deprived of its right to object on all these scores, because of the A.A. chosing to accord permission to cross examine 5 out of the list of 37 witnesses. The criteria is unspecified; the rest of the 32 witnesses are not given up; there is no basis to assume that the entire lot is governed by the same resoning ; the A.A. would not be precluded from placing reliance on the other 32 witnesses or some of them who are alleged to have been testified; each of them would need be dealt with on his own version, provided, of course, to its veracity. There is no force at all in the contention that the Company stands estopped from seeking to cross-examine the rest of the lot.lt is, indeed, noteworthy that there was no offer by the Company to let it cross-examine the remaining witnesses or undertaking to give up the rest. The A.A. required the Company to submit the names of five witnesses and the Company did so in compliance to his direction, without in any manner diluting its right under the law. Therefore, the attempt to invoke estoppel against the Company on this basis is untenables. To proceed in the manner envisged by the A.A. would be clearly arbitrary and hence incapable to be sustainea. The company at no point abandoned its right to cross-examine the witnesses.

(9) For the other side, it is as well urged, that the A.A in the show cause notice relies on voluminous documentary evidence, reference whereof has been already made.

It is true there is reliance on a mass of documents. But the question is how far do these take us on the point? It cannot be stated that in the ultimate decision, the A.A would rely on these documents alone to the exclusion of the statements of witnesses nor is there an understanding to such effect. The decision might be an amalgam of the entire relevant material, indeed, the documents or some of these might in themselves necessititate clarification or linkage with oral evidence.

(10) In case, the A.A proceeds in manifest breach of the principles of natural justice, as explained above, the prejudice resulting to the Appellants is apperent. The A.A. is not armed with absolute discretion to call or not to call witness to stand cross-examinations. The Company would in that event be denied of an opportunity to exclude what is irrelevant, fabricated, frivolous or of little evidentiary value. The A.A. may disallow questions which relate to or touch upon public policy; the question such as are scandolous, irrelevant or indecent may as well be discarded. On cross-examination some of the witnesses might reveal facts or materials which serve the contention advanced for the side opposite. A blanket denial to cross-examine may negate this too which cannot be regarded as resonable or justified.

In the unreported G.T.C. case decided by the Supreme Court recently, out of a total of 91 witnesses on whose statements reliance had been placed, 79 were permitted to be cross-examined. The Adjudicator sought to disallow the cross-examination of the remaining witnesses. On a writ petition filed by G.T.C. the Bombay High Court directed the Adjudicator not to rely upon the statement of any witness who is not tendered for cross-examination. It was contended before the Supreme Court that the High Court erred in law since all resonable opportunity had been given to the Assessee to plead its case and it was not necessary to allow the cross-examination of the rest of the witnesses. By its order dated January 3, 1995 the Supreme Court rejected the contention of the Excise Authorities and upheld the Hight Court''s order (SLP No. 21831/94).

This decision of the Supreme Court was followed in another case before the Bombay High Court filed by another Tobacco company namely Godfrey Philips India Ltd. That case also related namely Godfrey Philips India Ltd. That case also related to adjudication proceedings under the Excise Act and the charge levelled against that Tobacco Company were similar to those levelled against the Company as we are concerned with. In that case, the G.P.I, was not permitted to cross-examine any of the witness whose statements had been relied upon in the show cause notice. The G.P.I, filed a writ petition asking the Respondent not to "rely upon the statements of witnesses not produced/offered for cross-examination while passing final orders adjudicating the said proceeding". The Bombay High Court following the decision in the G.T.C case referred above held -

Respondent No. 3 viz., the Adjudication Authorities shall not rely upon or take into account the statement of any witness for passing the adjudication order who is not tendered for cross-examination. Petition disposed of in the above terms with no order as to cost.

The company, it may be added, is not required to cross-examine such witnesses too who are in its employment or entrusted with the management of the Company - their statements as such do not bind the Company and their source of knowledge or their authenticity may not said to be free from doubt. If the right or opportunity to cross-examine could not legitimately be denied to the Company in case witnesses of the Excise Deptt. were examined before the A.A. in presence of the parties, it would appear unjust or illogical to maintain that the right stands denied on the basis merely that directorate ohose to record their statements behind the back of the Company and without notice to it.

Grievence put forward by the company then also is that there has been arbitrary or unjustified derailment of its right to produce witnesses in defence. Sri Bajpai, A.A. allowed 12 defence witnesses to be called. To this there was some addition permitted by Sri H.M. Singh, A.A. upon Sri G.R. Sharma coming in as A.A. in October, 1990, the company applied for per-mission to call 50 more defence witnesses mentioned in the application also explaining therein how the evidence of each of these witnesses was relevant. No affidavit in rebuttal there to was put in by the department. There was no material placed on record to contend that the evidence of such witnesses would be irrelevant or amount to abouse of the process or be nonconductive to public interest. The application of the company was, however, rejected by the A.A. not on the ground of irrelevance but on the ground that the Applicant has had a resonable opportunity of defending already. Later, the Directors who are co-notices were on their individual application permitted to examine themselves in defence.

The question arising is, can it be left to the enquiry officer or the A.A. in this case, to pick and choose in his discreation and say, ''enough'' without scrutiny into the rationale for permission sought to examine the remaining witnesses in defence. To produce evidence in rebuttal or defence is implicit and integral to reasonable opportunity emanating from principles of natural justice. The Apex Court upholds this uniformally adopting the criteria of relevance. In T.R. Varma(Supra) it was laid down that the delinquent or the charged officer must have "the opportunity of addu-cing all relevant evidence on which the relies."

To the same effect is the view expressed in Khem Chand, K.L. TripathiSupra. There is no decision to the contrary on the point referred to us. In State of Bombay (Now Maharashtra) Vs. Narul Latif Khan, it was said -

If the officer desires to examine witnesses whose evidence may appear to the enquiry officer to be thoroughly irrelevant the enquiry officer may refuse to examine such witnesses, but in doing so, he will have to record his special and sufficient reasons.

It is, not for the enquiring tribunal to pick and choose witnesses on behalf of the delinquent; the only reason for which evidence which is proposed to be called by a delinquent can be excluded is that it was irrelevant or not proved to be relevant Krishna Gopal Bose v. Director of Telegraphs 60 C.W.N. 692 see also A.R.S. Choudhury Vs. The Union of India (UOI) and Others, or in exceptional circumstances, that it would militate against public interest.

Reference is made also to a decision of the House of Lords reported in General Medical Council v. Spackman 1943 A.C. 627, as appearing from the Head Note -

A registered medical practitioner, who was coRespondent in divorce suit, was found by the Divorce Court to have committed adultery with the Respondent therein to whom he stood in professional relationship and a decree nisi was pronounced which was afterwards made absolute. The General Medical Council gave him notice that a meeting of the Council would be held to decide whether his name should be removed from the medical register for informous conduct in a professional respect. At the hearing he desired to call the issue of adultery evidence which had not been called on the hearing of the petition although it was then available. The Council declined to hear the fresh evidence, but accepted the decree nisi as prima facia proof of adultery and directed that the Petitioner''s name should be erased from the register.

Held, that while the Council was entitled to regard the decree in the divorce suit as prime facie evidence of adultery, it was bound to hear any evidence tendered by the Petitioner, and that having refused to hear such evidence, it had not made "due enquiry u/s 29of the Medical Act, 1858.

Lord Atkin in his concurrent opinion observed-

The practitioner charged is entitled to a judgment the result of the considered deliberation of his fellow practitioners. They must, therefore, hear him and all relevant witnesses and other evidence that he may wish to adduce before them.... the very conception of prima facie evidence involves the opportunity of controverting it and entertain no doubt that the Council are bound, if requested to hear all the evidence that the practitioner charged brings before them to refute the prima facie case made from the previous evidence. If this is inconvenient it cannot be helped. It is much more inconvenient that a medical practitioner should be judged guilty of an infamous offence by any other than the statutory body. Convenience and justice are often not on speaking terms.

37, In my considered opinion, therefore, the approach adopted by the Adjudicating Authority was not in accordance with law. This smacks of arbitrariness. It does not withstand scrutiny on the settled principles of fair play in action. It is neither just nor reasonable. The discretion exercised is devoid of acceptable rationale, apart from being discriminatory, casual, omnibus and whimsical. The rules adopted were in breach rather then observance of the settled principles. It may be said to result in miscarriage of justice.

More then eight years have elapsed since the enquiry was initiated and the end is still not is sight. This certainly should be a cause for concern. In part, the delay may be attributable to the frequent changes in the personnel of the Adjudicating Authority. But more than that this may be primarily due to lack of objective application of mind to the crux of the controversy. The Adjudicating Authority is not suposed to be a mute spectator to the conduct of the proceedings by the parties before it. It is not that it has merely to hear or record whatever the parties urge or desire. The question of judicial authority in it comprehends independent and due consideration on proper analyasis of the submissions made, it has the power to control and regulate.

In Nurul Latif Khan(Supra) the observation made, inter alia, are -

In other words, the right given to the charge sheeted officer was to examine the departmental witnesses or examine his own witness can be legitimately examined and controlled by enquiry officer. He would be justified in conducting the enquiry in such a way that its proceedings are not allowed to be unduly or deliberately prolonged.

The Adjudicating Authority would be competent to ask for relevance to cross-examination of witnesses examined by the directorate. It may be sorting out what is family, merely repetitive, unrelated, scandalous or the like. Indeed sometimes, entering into technicalities is more time consuming and less fruitful than otherwise. Tact and a Itttle foresight is needed. If there be undue or unreasonable delay to make a particular witness available for cross-examination, he may be scored out. Likewise, the Adjudicating Authority would be justified to pin down in advance the relevancy in examining witnesses in defence. Those who are merely repetitive or irrelevant or whose attendance cannot be procured within reasonable time allowed can be elimjnated. G.A. Plick in ''Natural Justice'' has suggested some of the ways, referred above to regulate or control the proceedings. These and such other methodology (not to be considered exhaustive) might be helpful. All that would certainly necessitate application of mind to what is relevant or otherwise.

Joint deliberation with bonafides on both sides may serve to exclude the superfluous. It may narrow down the gap to some extent. Parties may realize that eight years of battle over triffles have led to no tangible result. The continuing procedural wrangle must after all stop forthwith; it may not be overlooked that it would be a long way to go still to reach the finale.

For the reasons aforesaid we feel it necessary to give certain directions to the adjudicating authority on the question of permitting cross-examination of the witnesses whose statements have been annexed to the show cause notice. If the Adjudicating Authority intends to rely on the statements made by the witnesses which have been annexed to the show cause notice then the Adjudicating Authority shall permit the company to cross-examine those witnesses. If the Adjudicating Authority does not rely on any of the statements made by the persons whose statements have been attached to the show cause notice the question of permitting cross-examination of such witnesses cannot arise at all. So far as leading of evidence by the Company in support of its defence case is concerned, Mr. Ghosh appearing on behalf of the company has stated before us that instead of placing their witnesses before the Adjudicating Authority for examination, as it is a time consuming method, the company shall file affidavits of their witnesses before the Adjudicating Authority. In that view of the matter we direct that the Company shall file affidavits of their witnesses before the Adjudicating authority and if the department feels that it is necessary to cross-examine the aforesaid defence witnesses the Adjudicating Authority shall allow them to cross-examine the witnesses of the Company. Since the matter is pending for about 8 years it would be in the interest of justice to issue a direction on the Adjudicating Authority to dispose of the Adjudicating Proceeding within four months from the date of communication of this order without granting unnecessary adjournments to either of the parties. However, it would be open to the parties to apply for extension of time to complete the Adjudication proceeding if occasion arises.

For the reasons aforesaid the order of the Trial Judge, which is impugned in this appeal, is set aside. The appeal is allowed to the extent indicated above.

There will be no order as to costs.

Chatterjee, J.

I have had the advantage of reading the judgment just delivered by my Lord the Chief Justice before-hand. Although I entirely agree with the reasons and the conclusions reached by my Lord the Chief Justice but I feel that I will be failing in my duties if the grounds on which the writ petition was rejected by the trial court are not dealt with. Accordingly in this judgment I only confine myself on the grounds on which the learned trial judge rejected the prayer of the writ Petitioner to allow cross-examination of all the witnesses who had made statements which have been made a part of the show cause notice and also to lead evidence in support of the case of the company.

The principal ground on which the learned trial judge rejected the writ petition is that the company has had a reasonable or sufficient opportunity of defending itself before the Adjudicating Authority as the Adjudicating Authority has permitted (a) the company to file 306 documents and also 480 affidavits (80 affidavits by the wholesale dealers, 200 affidavits by SWDS and 200 affidavits of retailers) and to rely on 61 statements received by the department but not relied by it out of the 329 statements made available to it and also permitted the company; (b) to cross examine some witnesses out of 45 witnesses on whose statements and or evidence reliance have been placed by the department in its show cause notice which is in the adjudicating proceeding and to lead evidence of its own by allowing some persons to be cross examined on behalf of the company and therefore it would be near absurdity to allow the company to call anybody and everybody to prove their case. Therefore, on the aforesaid ground the learned trial judge found that the company had been given sufficient opportunity of defending itself.

The relevant portion of the judgment regarding the reasons given in the judgment of the learned Judge can be found at internal pages 17 to 19 of the judgment. From the reasons given it is therefore clear that the learned judge rejected the complaint of the company by holding that disallowance of the cross examination of 32 witnesses relied by the department in the show cause notice and the disallowance of the prayer fgr calling 50 defence witnesses did not amount to denial of natural justice or denial of a sufficient opportunity and/or reasonable opportunity of defending itself, because the company had been given to cross-examine 13 witnesses out of 45 witnesses whose statements have been relied on in the show cause notice and also the company had been given opportunity to lead their evidence by allowing them to file 306 documents and 480 affidavits and also to permit some persons to give evidence on their behalf. On the aforesaid grounds, in my view, it was not correct on the part of the learned trial judge to reject the writ application and the prayer for cross-examination of all the witnesses whose statements have been annexed and relied in the show cause notice and to lead their own evidence in support of their defence case.

Let me therefore first consider as to whether the reasons given by the learned trial judge on the question of refusal to allow cross-examination of all witnesses relied upon by the other side amount to denial of adequate or resonable opportunity to defend before a quasi judicial authority. The question, is therefore, that when the company had been allowed to cross-examine 13 out of 45 witnesses, the rejection of the prayer of the company to allow cross-examination of all witnesses relied on would amount to a denial of an adequate or reasonable opportunity to defend the adjudicating proceeding. It is now well settled that the expression "natural justice" and "reasonable opportunity of showing cause" are synonimous. They cannot denial of rights, which include inter alia, (a) to cross-examine persons whose testimony/evidence is relied upon against the party affected by issuance of show cause notice and (b) an opportunity to lead relevant evidence by way of defence.

In Union of Indial v. T.R. Verma( Supra) at paragraph 10 the Supreme Court observed as follows -

Stating it broadly and without intending it to be exhaustive it may be observed that rules of natural justice require that a party should have the opportunity of adducing all relevant evidence on which he relies that the evidence of the opponent should be taken in his presence, and that he should be given the opportunity of cross-examining the witnesses examined by that party and that no materials snould be relied on against him without being given an opportunity of explaining them.

Again in Khemchand v. Union of India ( Supra) at para. 19 of the said decision S.R. Das, Chief Justice, speaking for the bench, summarised at para. 19 of the said decision that the resonable opportunity envisaged by the provision under Constitution includes the following:

(a) an opportunity to deny his guilt and establish his innocence which he can only do if he is told what the charges levelled against him are and the allegations on which such charges are based:

(b) an opportunity to defend himself by cross-examining the witnesses produced against him and by examining himself or any other witnesses in support of his defence, and finally

c) an opportunity to make his representation as to why the proposed punishment should not be inflicted on him which he can only do if the competent authority, after the enquiry is over and after applying his mind to the gravity or otherwise of the charges proved against the government servant tentatively proposes to inflict one of the three punishments and communications of the same to the government servant.

From the aforesaid observations of the Supreme Court in Verma''s case and in Khemchand''s case it "is-therefore, clear that the rights comprised in the expression ''natural justice'' (explained in Verma''s case) and the, expression "reasonable opportunity to show cause considered in Khemchand case are separate and distinct rights. Therefore, denial of any of those rights shall result in a failure of natural justice.

Therefore, form the decision of the Supreme Court in Verma''s case it must be taken as settled law that ordinarily where the evidence of witness is relied on against a party in quasi judicial proceeding natural justice demands that a party affected must have an opportunity of cross-examining those witnesses on whose evidence reliance is placed because the affected person cannot be said to have had reasonable opportunity unless he has an opportunity to destroy that case by cross-examination. Therefore, a witness on whose evidence the department has relied and annexed to the show eause notice must be offered for cross-examination. It is inconceivable in the field of disputes guided by the CPC that a party against whom the evidence has been laid to prove that he would not be entitled to cross-examine the witnesses who have deposed against such party.

In this appeal we are, however, concerned with a proceeding before an Adjudicating Authority who is conferred with powers to adjudicate certain disputes under the Central Excise Act (hereinafter referred to as the ''Act'') and the Rules framed thereunder. The Adjudicating Authority acting under the Act is a quasi judicial authority which was not disputed by the learned Counsel for the parties, it is true that there are some exceptional circumstances where quasi judical authority can dispense with the requirement of such cross-examination of a witness whose evidence is relied against an affected party. Some of the exceptional circumstances where the principle of natural justice may be dispensed with, have been elaborately discussed in'' the well known book of Sreev''ai Third edition. In the aforesaid page of the said book the author has given specific instances where reliance can be placed on statements obtained behind the back of the parties affected and where those who made statements need not be produced for cross-examination.

in the aforesaid page of the aforesaid book the author has also given certain exceptional circumstances which would dispense with the requirement of ordinary rule that reliance cannot be placed on a statement affecting a party unless that witness is produced for cross-examination. The examples cited in the aforesaid book of the auhtor cannot be said to be exhaustive. There may be also other instances where exceptional circumstances exist. The decision of the Supreme Court in the case of Tripathi v. State Bank of India and Ors.( Supra) is one of such exception. In that case the facts alleged are that the bank manager did not ask for an opportunity to cross-examine and it is only when the hearing of the case was taken up by the Hon''ble Supreme Court it was urged for the first time that the denial of the opportunity to cross-examine rendered the dismissal order bad. The Supreme Court, in the background of the facts alleged in the aforesaid case held that there was no breach of natural justice. The Supreme Court is that decision, however, inter alia laid down the basic propositions of law regarding application of the principle of natural justice in a quasi judicial proceeding which may be stated as follows.

(a) Whether a particular principle of natural justic has been violated or not has to be judged in the background of the nature of the charges, the nature of the investigation conducted in the background of any statutory or relevant rules governing such enquiries.

(b) If the facts are disputed the affected party has a right to cross-examine the witnesses on whose evidence reliance has been placed against him. Failure to give an opportunity to cross-examine in such a case would vitiate natural justice and result in fatal infirmity.

(c) If on the other hand the facts alleged against the affected party are admitted by him and he does not ask for an opportunity to cross-examine there is no failure of natural justice.

In so far as the first requirement as laid down in the Tripathi''s case is concerned, it appears from the judgment of the trial court that the learned trial judge himself had drawn an inspiration from the first principle as laid down in the Tripathi''s case indicated hereinaboveand held that natural justice is inbuilt in the provisions of Section 11A of the Act and Rule 233 A of the Central Excise Rules. Therefore, the first requirement as laid down in the Tripathi''s case as noted hereinabove was clearly satisfied. Mr. Naranarayan Gooptu the learned Advocate General could not also make any grivance as to the observation of the learned judge on the question of applicability of the principle of natural juctice being inbuilt in the provisions of Section 11Aof the Act and the Rule 233A of the Central Excise Rules. In so far as the second requirement is concerned as laid down in Tripathi''s case I am of the view that the said second requirement has also been fulfiled by the company in this case. it was not disputed by the learned Counsel for the Union of India that the facts alleged in the show casue notice have been specifically and clearly denied by the company in its reply to the show cause notice.

In view of the fact that the company disputed the facts as alleged in the show cause notice by filing a reply to it must be held that the second requirment as laid down in Tripathi''s case has also been fulfilled. The exception to the application of the principle of natural justice has been noted by the Supreme Court in Tripathi''s case. The Supreme Court observed that if the facts alleged against a person are admitted by him and he does not ask for an opportunity to cross-examine, there is no failure of natural justice. So far as this principle, as laid down in Tripathi''s case, is concerned, it is an admitted position that the company by filing a reply to the show cause notice clearly denied the allegations made against it in the show cause notice and times without number asked for an opportunity to cross-examine the witnesses on whose statements/evidence reliance have been placed in the show cause notice. From the aforesaid principles laid down in Tripathi''s case it is therefore pellucid that ordinarily the company against whom charges have been made in the show cause notice on the basis of certain statements of persons is entitled to cross-examination of those witnesses who have made statements which have been formed a part of the show cause notice. As noted hereinabove, there are some exceptional circumstances, when the authorities have the right to dispense with the application of the principle of natural justice that the persons proceeded against who have the right to cross-examine the persons on whose statements reliance have been placed by the authorities which has initiated the proceedings against such persons shall loose right of cross-examination.

From the aforesaid discussions and on consideration of the principles laid down by the Supreme Court in the decisions as mentioned hereinabove I am of the opinion that this cause does not fall in the category of cases where exceptional circumstances exist. The show cause notice and corrigendum to the said show cause notice were issued in the exercise of pwoer conferred on the authority by Section 11A of the Act and Rule 233A of the Central Excise Rules as framed under the Act. It is not in dispute that the show cause notice shows that it has been issued on the basis of the statements of 45 witnesses and the allegations in the show cause notice and the correctness of the statements of the witnesses relied upon by the Union of India in the said show cause notice have been spepifically challenged by the company in the reply to the show cause notice filed before the Adjudicating Authority. The learned trial judge although noted the principles laid down in Tripathi''s case did not come to a finding that the right of the company to cross-examine all the witnesses has been distinguished by any exceptional circumstances of this case. Therefore, in the absence of any exceptional circumstances existing in this case and considering the principles laid down by the Supreme Court in the aforesaid decision as mentioned hereinabove and in view of my discussions made hereinabove I am unable to agree with the observations of the learned trial judge that the company having been permitted to cross-examine 13 witnesses out of 45 witnesses have been afforded a resonable opportunity of defending the case before the adjudicating authority and therefore the principle of natural justice has not been violated in this case.

From the judgment of the learned trial judge it also appears that the learned trial judge held that in order to interfere with the discretionary orders of the adjudicating authority in the matter of allowing the company to cross-examine the witnesses when some of have been permitted to be cross-examined, the company must show prejudice against such orders of the Adjudicating Authority. It appears from the record that in a petition before the adjudicator it had been alleged that denial of right to cross-examine the remaining witnesses relied on the show cause notice by the department would casue serious prejudice and those averments of the company were not controverted by the Union of India. It is also not the finding of the learned judge himself that no prejudice had been caused by reason of denial of cross-examination of the witnesses. Even assumming that the company could not satisfy the learned trial judge that any prejudice had been caused by reason of denial of cross-examination of the remaining witnesses even then in view of the later decision of the Supreme Court in the case of Olga Tellis and Others Vs. Bombay Municipal Corporation and Others, wherein it was held that if there was breach of natural justice that itself was prejudice and no further prejudice need be shown. I cannot be in agreement with the learned trial judge that the orders of the Adjudicating Authority, although the aforesaid decisioin of the Supreme Court was noted in the judgment of the trial court but no conclusion was arrived at'' by the learned trial judge on this point.

It is difficult to appreciate that the learned judge was correct in his approach that even if legal right to cross-examine the remaining witnesses was infringed by refusal to afford opportunity to cross-examine, the orders of the Adjudicating Authority cannot be interferred with by the writ Court in the exercise of the power under Article 226 of the Constitution on the ground of prejudice against such orders of the Adjudicating Authority. In my view, when a legal right is infringed, prejudice shall not be a ground for refusal to enterfere with the orders of the Adjudicating Authority by the writ court.

In so far as the legal right to cross-examine the witnesses is concerned, it is not the case of the Union of India that the company has no legal right to cross-examine the witnesses on whose statements reliance have been placed by the department. Therefore, if there is a legal right, how ''prejudice'' would come into play when the right or cross-examination of the witnesses is accepted. There is another aspect of the matter in this record. It is not the case of the department that the company is not at all entitled to cross-examination of the witnesses on whose statements the department relied in the show cause notice. This right to cross-examination has been accepted by the department, the adjudicator and also the trial court.

Therefore, only question that need to be determined by this Court is not whether the Petitioner has the right to cross-examine but whether that right can be curtailed by allowing some persons to the cross-examination. The question therefore arises is ''can adjudicator lawfully disallow some witnesses to be cross-examined whose statement have also been relied upon in the show cause notice.'' In other words can the department rely on the statement of any witness without allowing the company an opportunity to cross-examine him. The fundamental principle in the field of civil disputes is that reliance cannot be placed on the statement of evidence of any witness, unless the party proceeded against is given the opportunity to cross-examine him. In my view in the field of quasi judicial proceeding there cannot be any departure from the aforesaid basic rule of fair play. This question, in my view, is concluded by the decision of the Hon''ble Supreme Court in the G.T.C. case referred to hereinafter and also by the decisions of the Supreme Court as referred to hereinearlier.

In the unreported judgment of the Supreme Court in the G.T.C. case the Supreme Court was dealing with a case which is similar to the present case. In that case 79 witnesses out of a total of 91 witnesses (on whose statements reliance had been placed) were summoned and finally altogether 44 witnesses were permitted to be cross-examined. The adjudicator disallowed the cross-examination of the remaining 47 witnesses. On a writ application filed by the G.T.C. the Bombay High Court directed the adjudicator not to rely upon the statement of any witness who was not tendered for cross-examination. The Excise authorities in its SLP to the Supreme Court urged that the Bombay High Court was wrong as reasonable opportunity was given to the Assessee to prove its case and it was not necessary to allow cross-examination of the remaining 47 witnesses in a proceeding under the Act which was quasi judicial in nature. The Supreme Court rejected this contention of the Excise Authorities and upheld the judgment of the Bombay High Court.

The aforesaid unreported judgment of the Supreme Court delivered in the G.T.C. case has recently been followed in another case by the Bombay High Court filed by another Tobacco Company. That case also relates to adjudication proceedings under the Act and the charges levelled against that Tobacco Company are practically similar to those levelled against the company in the present case. In the aforesaid case the Bombay High Court followed the decision of the G.T.C. case delivered by the Hon''ble Supreme Court and held that the adjudicating authority shall not rely on or take into account the statement of any witness for passing the adjudication order who is not tendered for cross-examination.

At this juncture an argument of Mr. Mullick who assisted the learned advocate general in this matter may be considered. Mr. Mullick submitted that some of remaining witnesses whose cross-examination was asked for by the company are the ''company''s own witnesses'' and therefore there was no need for their cross-examination. After carefully considering such submission of Mr. Mullick I am unable to agree with him. From the record it would be evident that the witnesses who remained to be cross-examined not only included the company officers and also many whole sale dealers. The whole sale dealers are not the men of the company. As regards the officials of the company are concerned, the statements made by the officials of the company cannot ordinarily and necessarily bind the company because the company is a distinct legal entity. Secondly, this is a matter which goes to the weight of the evidence and not to its admissibility. It well known that the object of cross-examination is not only to try to and demolish that part of the statement of a witness which militates against the party proceeded against but also to elicit facts which will assist to build up and substantiate defence of the company. At para. 41 in Sat Paul Vs. Delhi Administration, the Supreme Court observed as follows:

In short the rule prohibiting a party to put questions in the manner of cross-examiantion or in a leading from to his own witness is relaxed not because the witness has already forfeited all right to credit but because from his antipathetic attitude or otherwise, the court feels that for doing justic, his evidence will be more fully given, the truth more effectively extricated and his credit more adequately tested by questions put in a more pointed, penetrating and searching way.

It is also equally well settled in law that if a witness turns out to be hostile then the party calling him can cross-examine that witness. In this connection it must be remembered that the witnesses proposed to be cross-examined by the company are witnesses produced by the department relied by it against the company. Therefore there cannot be any dispute that since the statements of these witnesses have been attached to the show cause notice these witnesses are relevant. The Supreme Court held in Verma''s case as noted hereinearlier that in order to allow the party to lead evidence by production of witnesses or to cross-examine the witness, the authorities must consider that the witnesses are relevant for the purpose of disposal of the proceeding. At the risk of repetition I must say that as the statements made by the witnesses have been relied on by the department and incorporated in the show cause notice itself, there is no reason why the company should not be allowed to cross-examine them. For the reasons aforesaid the argument of Mr. Mullick that as some of the remaining witnesses was the men of the company need not be produced for cross-examination is not acceptable to us.

The other ground on which the learned trial judge rejected the writ application is that the order of the adjudicator cannot be said to be perverse and therefore the writ court should not interfere with the discretionary orders of the adjudicator unless it is perverse. With great respect to the learned trial judge I am unable to agree with him. If it is the principle of natural justice that the department cannot rely on a statement of a witness unless the witness is offered for cross-examination then the company had and has a legal right to cross-examine the witnesses on whose evidence/statement reliance was placed in the show cause notice. This right to cross-examine or adduce defence evidence, being a legal right, denial of that legal right makes the decision illegal and is amenable to judicial review, that being the position I am of the view that the adjudicator cannot take away a legal right which is vested in the company either to adduce relevant evidence in support of his defence or to cross-examine the witnesses on whose evidence/statements reliance has been placed in the show cause notice.

It is difficult to appreciate that the adjudicator has any discretion to say that the defence has no legal right to adduce relevant evidence in support of his case or not to allow the defence to cross-examine the witnesses on whose evidence/statements reliance has been placed in the show cause notice. Question of discretion of the adjudicator does not aries as the adjudicator being a quasi judicial authority is not authorised to pick and choose if the statements/ evidence of the witnesses are relied by the adjudicator for the purpose of disposal of the adjudication proceeding. The adjudicator has discretion, in the case of adducing evidence from the side of defence not to permit the defence to lead any irrelevant evidence but he has no right to discard the prayer of the defence to lead relevant evidence in support of his defence in the adjudication proceeding. Therefore, in my view an order disallowing the company an opportunity of cross-examining the remaining witnesses is not therefore a discretionary order. Even if it is held that the adjudicator has a discrertion eithor to permit or refuse the defence to lead its own evidence or to cross-examine the witnesses on whose statements/evidence reliance has been placed in the show cause notice it is well settled now that such discretion must be exercised in accordance with law.

In my view, requisite of a prayer for adducing relevant evidence in support of the defence case and refusal to permit cross-examination of witnesses whose statements/evidence were relied by the department would not be in accordance with law and would also lead to us to hold that the same is a perverse. Mr. Mullick appearing on behalf of the Union of India also conceded before us that a quasi judicial Authority can not in its discretion refuse such prayer of the company by following the wrong principle of law and in that case the decision can be interfered with by the writ court. There is another aspect which may be considered. The trial judge also on the question of perversity in the orders of the adjudicator which had been challenged in the writ petition by the company held that the finding arrived at by the adjudicator in his discretion disallowed the company to cross-examine all the witnesses and disallowed the company to lead its relevant evidence in defence. It is well settled by various judicial pronouncements of the Hon''ble Supreme Court and also of this Court the word ''perverse'' is applicable to a case (a) where a finding arrived at on no evidence at all or (b) to a finding made in an order no prudent person can arrive at.

In Hind Trading Company Vs. Union of India (UOI) and Another, it was observed as follows:

The conclusion is irresistible that due to the inadvertence of the carriers the permits were interchanged and that application No. 34 was sent with H.N. bags and application No. 32 was with H.D. bags. No inference of smuggling could be drawn from the fact that H.D. bags were found with application No. 32. In the circumstances the finding that the Appellant had smuggled the goods and was guilty of an offence u/s 7(1) of the Land Customs Act must be characterised as perverse.

It is evident from the aforesaid decision of the Supreme Court that the Supreme Court held that the finding of the tribunal was liable to be quashed by a writ of certiorari by relying on an observation made by Lord Denningl. J. The said observation of Lord Denning has been quoted by the Supreme Court with approval which is as follows:

No reasonable person, who had proper regard to Regulation 2(5) could have come to such a conclusion. It is now well settled that when a Tribunal come to a conclusion which could not reasonably be entertained by them if they properly understood the relevant enactment, then they fall into error in point of law see Edwards Inspector of Taxes v. Bairstow ( 1956 A.C. 14) When the primary facts appear on the record, the error of this kind is sufficiently apparent for it to be regarded as an error on the face of the record such as to warrant the intervention o this Court by certiorari.

From the aforesaid observation of Lord Denning which has been, in my view, the finding of the adjudicator as to the right of the company quoted with by the Supreme Court in the case of Hind Trading Co.(Supra) to cross-examine the remaining witnesses or to lead relevant evidence in support of its case was perverse one and therefore, it was open to the writ court to interfere with the orders passed by the adjudicating authority on such question of perversity as it must be held to be the orders passed by the adjudicator within the category of (b) of the perversity mentioned above. Such being the position I am unable to agree with the observation of the learned trial judge that since the orders of the adjudicating authorities are not perverse, the writ jurisdiction of this Court cannot be brought into action by the company against such orders of adjudicating authority. In the judgment under challenge in this appeal the learned judge has also made certain observations disapproving of the facts that successive applications were made by the company before successive adjudicators for permitting the company to cross-examine all the witnesses whose evidence/ statements have been relied by the department in the show cause notice and also for leading evidence in support of its defence case. The company had taken advantage of the orders passed by the adjudicators ''without demur''.

It appears from the record that the said ground was not taken by the Union of India either before the adjudicating authority or the adjudicating authority rejected the claim of the Petitioner to cross-examine the remaining witnesses whose evidence have been relied in the show cause notice or lead its own evidence in support of its defence case. What had been found by the learned trial judge that by reason of cross-examination and examination of witnesses permitted by the orders of the adjudicating authority, the company was estopped from contending that it was entitled to cross-examination of further witnesses and examination of further witnesses. On behalf of the company it was pointed out, in my view, correctly, that right from the beginning that is when the order dated October 14,1988 was passed by the adjudicating authority the company had recorded its protest and stated that it would continue to appear under protest and without prejudice to its rights to challenge the said orders.

In the subsequent applications filed before the adjudicating authority the company clearly stated that this was without prejudice to its right to challenge the previous orders. Therefore, it was not correct on the part of the learned trial judge to say that the company accepted the adverse orders ''without demur''. Apart from that the company continued to claim its rights of cross-examination and examination before successive adjudicators, which shows that the company did not accept the curtailment of its rights by previous orders. Therefore, I am not in"agreement with the learned trial judge when he held that ''it is correct to say that the company was content with the orders''.

Therefore from the discussions made hereinabove it is difficult to accept the reasonings given by the learned trial judge that although the conduct of the Petitioner did not raise any estoppel even then the conduct of the Petitioner amounted to rejection of their claim for cross-examination of the remaining witnesses. Before ending I repeat that the Union of India had also not raised any dispute before the Adjudicator as to the maintainability of the successive applications filed by the company before the successive adjudicators for leading evidence and also for cross-examination of the witness on whose evidence/statements have been relied on in the show cause notice nor the adjudicators rejected the claim of the Petitioner company regarding cross-examination of the remaining witnesses and leading of evidence by the company on that score.

Therefore, I am of the view that the learned judge erred in holding that although there was no case of estoppel the conduct of the writ Petitioner was such that they were not entitled to cross-examine the remaining witnesses or to lead further relevant evidence in support of the defence case. The learned trial judge made a comment in its order that the company was taking advantage of the orders passed by the different adjudicators regarding the claim of the company either to cross-examine the remaining witnesses or to lead evidence by production of their own witnesses. I have carefully perused all the orders passed by the adjudicating authority and also the applications filed by the company before the different adjudicators. From a plain reading of the orders passed by the adjudicating authority from time to time in this regard it is clear that there was no whisper in any of the orders passed by the adjudicators that the applications made by the company were in abuse of process or that the company was estopped of making successive application because of earlier rejection of such prayer by the adjudicating authority. As noted hereinabove the Union of India also did not raise any such objection either in their objection before the adjudicating authority or before the adjudicating authority at the time of argument. From the discussions made hereinabove it is very much clear that the company on protest and by keeping their right to cross-examination of remaining witnesses by keeping their right to produce further relevant evidence, participated in the adjudication proceeding before the adjudicating authority.

For the reasons aforesaid it is difficult to accept the reasonings of the learned trial judge that it was not open to the company to file successive applications to the same relief when such relief was refused by the adjudicator more than one.

Before proceeding further at this stage a further argument of the learned Advocate General may be considered. The learned Advocate General contended that since an appeal lies against the orders of the adjudicating authority the writ application ought not to have been entertained by the writ court in view of the availability of an alternative by way of an appeal. In my view this argument of the Advocate General is not acceptable to me for reasons more than one. It is admitted that an appeal lies before the C.E.G.A.T. against the final order of the adjudicating authority under the provisions of the Act. By the orders challenged in the writ application the Adjudicating Authority only considered as to whether a company was entitled to cross-examine the remaining witnesses and also to lead further relevant evidence in support of its defence case. No final order has yet been passed by the adjudicating authority on the adjudication proceeding. Therefore, the question of filing an appeal at this stage under the Act against the orders of the adjudicating authority cannot arise at all. Assuming that there is an alternative remedy by way of an appeal against the orders impugned in the writ application even then the writ application was maintainable in law as in the present case the writ Petitioner had complained of violation of principle of natural justice. It is well settled law now that even if there is an alternative remedy for appeal against any order even in a case where it is seen that the principle of natural justice has not been followed, the writ court can very well entertain a writ application on the ground that there has been a violation of principle of natural justice.

This principle has been enunciated by the Supreme Court in the case of State of U.P. v. Mohd. Noor AIR 1958 S.C. 86. In the aforesaid decision of the Supreme Court the Supreme Court observed at para. 10 in page 93 as follows. If, therefore, the existence of other adequate legal remedies is not per se a bar to the issue of certiorari and if in a proper case it may be the duty of the superior Court to issue a writ of certiorari to correct the errors of an inferior Court or tribunal called upon to exercise judicial or quasi-judicial functions and not to relegate the Petitioner to other legal remedies available to him and if the superior Court can in a proper case exercise its jurisdiction in favour of a Petitioner who has allowed the time to appeal to expire or has not perfected his appeal e.g., by furnishing security required by the statute, should it then be laid down as an inflexible rule of law that the superior Court must deny the writ when an inferior Court or tribunal by discarding all principles of natural justice and all accepted rules of procedure arrived at a conclusion which shocks the sense of justice and fair play merely because such decision has been upheld by another inferior Court or tribunal on appeal or revision.

Accordingly there is no merit in the argument of the learned Advocate General that in view of availability of an alternative remedy by way of an appeal against the orders of the Adjudicating Authority, writ petition ought not to have been entertained at all.

Before I proceed further, I may be permitted to take up another argument of the learned Advocate General who had appeared for the Union of India. It was argued by the learned Advocate General that out of 45 witnesses whose statements have been relied in the show cause notice 22 were ''given up'' by the company when the matter was being heard by the first adjudicator and therefore the cross-examination of the remaining witnesses had been rightly disallowed. We have carefully perused the entire records of this case and on such perusal I am of the view that the submission of the learned Advocate General is factually not correct. It appears that the show cause notice read with corrigendum relied on the statements of 45 witnesses in all. In the written reply to the said show cause notice cross-examination of all the witnesses whose statements have been relied upon in the show cause notice was prayed for. On October 5, 1988 an application was made before the first adjudicator for permission to cross-examine the 45 witnesses on whose statement reliance was placed in the show cause notice. On that application the first adjudicator on October 14, 1988 permitted four witnesses to be cross-examined and disallowed cross-examination of the remaining 41 witnesses.. Out of the four witnesses who were permitted to be cross-examined, three were cross-examined. The fourth witness did not turn up and therefore he could.not be cross-examined.

On October 24, 1988 the company made an application before the adjudicator relating to the question of cross-examination of witnesses. At that stage the company also prayed before the adjudicator to reconsider the earlier order dated October 14, 1988 refusing to permit the company to cross-examine the remaining 42 witnesses. The second prayer of the Petitioner related to the question of examination of defence witnesses. The company prayed before the adjudicator to allow them to examine 511 witnesses as defence witnesses. On the direction of the adjudicator the said number of 511 witnesses was reduced.

The company filed a list of the minimum number of witnesses that it had felt necessary to rebut the allegations made in the show cause notice. This list contained three parts. Part-I lists the minimum number of 20 wholesale dealers whom the company wanted to cross-examine. Part-ll says that if the adjudicator disallows the company''s request for cross-examination of the company''s witnesses, it should at least be allowed, in the interest of justice to produce them for examination by the company. Part-Ill dealt with the reduced number of 60 wholesale dealers and 40 company officials whom the company wished to examine as defence witnesses. On this application dated October 24, 1988 the learned adjudicator passed an order on November 2, 1988. From a perusal of the said order of November 2, 1988 it appears that the learned adjudicator stated that the prayers had been made by the company in the following manner;

a) that he should reconsider his earlier order dated October 14, 1988 in the interest of justice and allow the company to cross-examine 45 witnesses whose testimony has been relied on in support of the allegations made in the show cause notice, and

b) that the company should be allowed to examine the witnesses mentioned in the application. As regards the prayer relating to cross-ex? mination the learned adjudicator observed in his order dated November 2, 1988 that as regards cross-examination a different order had been passed by him on October 14, 1988. But ultimately the learned adjudicator held that in the absence of any specific statutory provision, he was not legally empowered to review his earlier order. As regards the prayer for examination of defence witnesses, the order dated November 2, 1988 noted that the company had decided to request the adjudicator to allow them to examine the witnesses mentioned in para (b) of the application dated October 24, 1988. The said order also noted that the minimum number of persons whom the company wished to examine were 60 wholesale dealers and 40 company officials. But ultimately in the order dated November 2, 1988 the learned adjudicator permitted 12 persons to be called as defence witnesses.

Therefore there is nothing in the order dated November 2, 1988 to support the contention that the company had given up its right to cross-examine 22 out of 45 witnesses whose statements have been relied on in the show cause notice. I am also in agreement with the argument of Mr. Dipankar Ghosh appearing on behalf of the company that a party can ''give up'' its right to cross-examine some witnesses only if it had a right to call those witnesses. If it had that right, it could relinquish or give up that right. After the adjudicator passed the order on October 14, 1988 the company was no longer at liberty to call 42 persons whose cross-examination had been disallowed. As long as that order was in force, question of giving up witnesses so far as cross-examination is concerned by the company cannot arise at all. Apart from that in the application dated October 24, 1988 the Appellant made a prayer before the learned adjudicator to reconsider the order dated October 14, 1988. If this prayer was allowed, the right to cross-examine the witnesses by the company would revive. The learned adjudicator held that he had no power of reconsideration of the earlier orders passed by him relating to allowing the company to lead its own evidence or to cross-examine the remaining witnesses. But one thing is clear from all the earlier orders of the successive adjudicators that although they were making observations relating to their power to reconsider earlier orders passed by them even then they allowed the Petitioner to cross-examine some more witnesses and also to lead evidence by allowing more witnesses to be examined on behalf of the company. Such being the position it cannot be said now that in view of the earlier orders passed by the Adjudicator, the question of allowing the company to cross-examine the remaining witnesses cannot arise at all as such prayer was rejected earlier.

Apart from that as it also appears from the record that such a case was also not made out by Union of India in their objection to the application filed by the Petitioner. Therefore I am unable to agree with the learned trial judge that in view of rejection made by the adjudicators in their earlier orders relating to permission to cross-examine the remaining witnesses on whose

General we felt it necessary to look into the records including the subsequent orders passed by the previous adjudicators and also by the present adjudicator who has passed the orders against which the writ application has been moved. From a perusal of the orders passed by the previous adjudicators and the present adjudicator it would show that five company officials were subsequently allowed to be cross-examined. Therefore, from this it is also clear that the company has never given up its right of cross-examination of 22 witnesses. Out of the 45 witnesses, on whose statements reliance have been placed in the show cause notice, the first adjudicator allowed four witnesses to be examined. As noted earlier out of this four witnesses to be cross-examined, three were actually cross-examined. In subsequent applications before the other adjudicators the company asked for leave to cross-examine the remaining witnesses. One adjudicator allowed five more to be cross-examined. Therefore that left 37. The petition filed by the company on January 9, 1991 before the present adjudicator was for permission to cross-examine the remaining 37 witnesses.

The present adjudicator allowed five more to be cross-examined. If the case of giving up is accepted then there was no reason by the successive adjudicators to allow the Petitioner to cross-examine 13 witnesses. Apart from that if the company had in fact given up its right to cross-examine 22 witnesses, that fact ought to have been brought to the notice of the adjudicator by the Union of India and the Union of India would have contended that only 15 witnesses remained to be cross-examined and therefore the prayer for cross-examination of 37 witnesses was not justified. It also appears from the record that the Union of India did not file any affidavit-in-opposition controverting the statement that 37 witnesses remained to be cross-examined. It does not appear from the orders of the adjudicators that the Union of India also raised such contention before any of the adjudicators. In the orders passed by the adjudicators there is any reference that the company had given up their right to cross-examine the remaining witnesses. That apart it does not appear from the affidavit-in-opposition filed against the writ application by the Union of India that the Union of India had taken the point that the company had given up its claim of cross-examination of the remaining 22 witnesses. Even in the judgment of the trial court there is no finding that the company had given up its right to cross-examine 22 witnesses and therefore it was not entitled to cross-examine the remaining witnesses.

For the reasons aforesaid I am unable to agree with the learned advocate general that the Appellant had given up their right to cross-examine the remaining "witnesses. On behalf of the Union of India an argument was advanced by the learned advocate general that denial of right of cross-examination did not amount to denial of natural justice.

In support of this contention a decision of this Court reported in Kishanlal Agarwalla Vs. Collector of Land Customs, was cited. In that case it was held that natural justice does not require that there should be any formal cross-examination and it suffices that the party charged must have reasonable opportunity to see comment and criticise the evidence on which the charge was made against him to satisfy the test of natural justice. The subsequent division bench decision of this Court reported in Graphite India Ltd. v. Srare of West Bengal 84 C.W.N. 239 has held that in view of the Supreme Court decision, Kishenlal''s case must be held to be contrary to the principles of law laid down by the Supreme Court. The Division Bench at para. 11 in page 245 has observed as follows:

In view of the decision in the case of Sur Enamel and Stamping Works Ltd. v. The workmen where it has been clearly laid down that giving to the employee a fair opportunity to cross-examine the witnesses examined against him is one of the principles of natural justice, the decision in Kishenlal''s case in so far as it holds that no natural justice requires that there should be a kind of formal cross-examination and the decision in Haripada Moitra Vs. President, Calcutta Improvement Tribunal, which followed Kishenlal''s case, are contrary to the principles of law laid down by the Supreme Court in the above cases. Therefore in view of my observation made hereinabove, Kishenlal''s case cannot be relied. State of Jammu and Kashmir Vs. Bakshi Ghulam Mohammad, was also relied on this issue by the learned Counsel for the Union of India. It appears that this decision was cited in support of the proposition that natural justice requires that the party affected should be given ''hearing'' but it does not include the right to cross-examine which was dependent on the circumstances of each case.

In the facts of that case the Supreme Court held that refusal of the right to cross-examine a witness who had sworn affidavits supporting the allegations against the Respondent did not amount to denial of natural justice. In my view this case is clearly distinguishable on facts. This decision of the Supreme Court was passed in respect of an enquiry held under the provisions of Commissions of Enquiry Act. Section 10(2) specifically gives the right to cross-examine witnesses who had given evidence. But Section 4(c) of the Act however, specifically includes such right of cross-examination with respect of persons who had already sworn affidavits supporting allegations made in the charge levelled against such persons. Therefore in view of the specific exclusion with respect to persons who had sworn affidavits supporting allegations in respect of the charges having been made in the Commissions of Enquiry Act, the Supreme Court held that natural justice to cross-examine a witness does not arise at all.

Therefore, the decision of the Supreme Court as referred to hereinabove is not the authority for the proposition that the right to cross-examination can be refused if a ''hearing'' as otherwise has been given to the party affected. The next decision on which the learned Counsel for the Union of India relied is the decision reported in Kanungo and Company Vs. Collector of Customs and Others, In that case the Supreme Court held that there was no right to cross-examine an informant in the customs case. In my view this case falls within the exceptional category as noted by me earlier. One of the basis for exception is also for public policy. The public importance of keeping the sources of information of the customs authority secret, outweighed the importance of a right of a private party to cross-examination.

The same aspect has been considered by the Supreme Court in A.K. Roy and Others Vs. Union of India (UOI) and Others, which has also been relied by the learned Counsel for the Respondent in support of this contention. A K. Roy''s case was a case of detention under the National Security Act and one of the questions that arose for consideration was relating to the procedure to be followed before the Advisory Board. The Supreme Court held in that decision that the detenue had the right of leading evidence in rebuttal of the allegations made against him. But at the same time it also held that fie could not claim the right of cross-examination before the Advisory Board. In paras. 99 and 100 at page 749 of the said decision the following reason was given by the Supreme Court.

The principle that witnesses must be confronted and offered for cross-examination applies generally to proceedings in which witnesses are examined or documents are adduced in evidence in order to prove the point. Cross-examination then becomes a powerful weapon for showing the untruthfulness of that evidence. In proceedings before the Advisory Board the question for consideration is not whether detenue is guilty of any charge but whether there is sufficient cause for the detention of the person concerned. The detention, it must be kept in mind, is based not on facts proved either by applying the test of preponderance of probabilities or of reasonable doubt. The detention is based on the subjective satisfaction of the detaining authority that it is necessary to detain a particular person in order to prevent him from acting in a manner to certain stated objects. The proceeding before the advisory board has therefore to be considered differently from the proceeding of judicial or quasi judicial tribunal before which there is a lis to adjudicate upon. On this consideration the Supreme Court observed that the disclosure of the identity of the informant may abort the very process of preventive detention because no one will be willing to come forward to give information of any prejudicial activity. It is, therefore, difficult in the very nature of things to give detenu the full rights which an accused is entitled to disapprove the charges against him.

From the discussions made hereinabove I am therefore of the view that the aforesaid decisions of the Supreme Court cannot be applied in any manner to the present case. As the present case concerns the proceedings before a quasi judicial authority, the liability of the company, if" any, must be based on evidence adduced and there is a lis to adjudicate upon. Therefore, there cannot be any doubt in my mind that the company is entitled to all the rights to disprove the charges levelled against it and those rights include the right of cross-examination. The Chairman, Board of Mining Examination and Chief Inspector of Mines and Another Vs. Ramjee, is another decision on which the learned Counsel for the Respondent relied on in support of their contention.

I fail to appreciate how the said decision can be shown for the purpose of satisfying us that there was no necessity of allowing the party affected to cross-examine the witnesses or to lead their own evidence when the fact of that case was that the person proceeded against had full opportunity before the regional inspector of mines. In the background of this fact as stated hereinabove the Supreme Court held that there was no necessity of going through the procedure over again before the Board of Mining examinations. Another decision reported in Manindra Nath Chatterjee v. Collector of Central Excise 1977 ILR 1754 was relied by the learned Counsel for the Respondents on the question that the principle of natural justice had not been violated, because there has no cross-examination.

From a reading of the said judgment it appears to me that no reason was cited in that judgment for this conclusion. But it appears from a thorough reading of this judgment that the reasoning is the same as enunciated in Tripathis case (Supra). As stated earlier in Tripathi''s case the Supreme Court held that there was no violation of natural justice because the facts were admitted and the writ Petitioner had not prayed for cross-examination or the opportunity to lead evidence at the relevant point of time.

For the reasons aforesaid I am therefore unable to rely on the decisions cited by the learned Counsel for the Respondent on the question that the right to cross-examination is not an integral part of the natural justice and therefore the company is not entitled to cross-examine the remaining witnesses.

In so far as the right to produce evidence in support of the defence case is concerned the decision of the Supreme Court which is reported in Laxmi Shankar Pandey Vs. Union of India and others, cited on behalf of the Union of India was relied. In that case before the Supreme Court there was a departmental enquiry against the delinquent. The principal grievance of the delinquent was that venue of the enquiry had been changed and all the witnesses cited by him were not examined, excepting the witness of the Union of India. The Supreme Court in the facts of that case held that full opportunity was given to the Petitioner to produce defence witnesses and notices were also served on them but they did not appear. Having regard to the details of enquiry conducted in the case the Supreme Court was unable to hold that there was violation of natural justice.

In my view there is no controversy on the proposition of law enunciated in that decision by the Supreme Court. In that case also the Supreme Court preferred and applied the principles laid down in Khemchand''s case (Supra). The facts of that case are clearly distinguishable because the officer proceeded against did not himself call all his defence witnesses even though he was given full opportunity to produce the witnesses and notices were served on them but they did not appear. A.K. Roy v. Union of lndia (Supra) was cited on behalf of the Respondent but in my view the said decision really goes in favour of the company as to the right of the company to. lead defence evidence. Paragraph 105 at P.751 of the A.K. Roy''s case may be quoted below:

The last of the three rights for which Shri Jethmalani contends is the right of the detenu to lead evidence in rebuttal before the Advisory Board. We do not see any objection to this right granted to the detenue. Neither the constitution nor the National Security Act contains any provision denying to the detenu the right to present his own evidence in rebuttal of the allegations made against him. The detenu may therefore offer oral and documentary evidence before the Advisory Board in order to rebut the allegations which are made against him.

From the aforesaid observations of the Supreme Court it is therefore clear that the Supreme Court also accepted the position that even in proceedings before the Advisory Board under the National Security Act there cannot be any reason to deny the detenu to lead his evidence in rebuttal to the charges levelled against him. Therefore there cannot be any denial of the right of an affected party to lead relevant evidence in rebuttal of the charges levelled against such person. The learned Advocate General then relied on a decision of the Supreme Court reported in C.B. Gautam Vs. Union of India and Others, In the said decision the Supreme Court was considering the effect of Section 269 of the Income Tax Act, and also considered the question as to whether the provisions of Chapter XX9c were bad in law as there was no provision for giving the affected parties an opportunity of being heard before an order of compulsory purchase can be passed by the authority u/s 269 U.D. of the Income Tax Act.

From the above I can safely conclude that this section does not contain any provision for giving such an opportunity. However, in the said decision the Supreme Court referred to its earlier decision that is in Union of India (UOI) Vs. Col. J.N. Sinha and Another, that the principle of natural justice should be read into a statutory provision unless that is excluded espressly by necessary indication. In the said decision reference was also made to Olga Tillis case Supra in which it was held that the ordinary rule was that the person affected should be given an opportunity of being heard unless there were some factors which would exclude it. It appears from paras. 29 and 30 of the aforesaid decision that it rejected the argument because a compulsory purchase order u/s 269 U.D. of the Income Tax Act had to be made in a fixed time schedule and for that it did not include the necessity of giving a reasonable opportunity of being heard to the seller a.nd buyer who had entered into agreement for sale and purchase of the plots in question. Accordingly, the Supreme Court in para. 30 held that such a requirement must be read into Section 269 U.D. of the Income Tax Act and it was immaterial that chapter XX(c) of the Income Tax Act did not contain any express provision for the affected parties of being given an opportunity of being heard before an order for purchase u/s 269 U.D. of the Income Tax Act was made.

From the above it is therefore clear that the aforesaid decision is in favour of the company and it goes against the contention of the learned Counsel that the Excise Act and the Rules provided thereunder did not contemplates a reasonable opportunity of being heard to the Assessee. Apart from that the said deision of the Supreme Court does not deal with the Central Excise Act and the Rules framed thereunder and therefore does not express any opinion as to the ambit of such rights in the context of the Excise Act but by the various pronouncements of the Supreme Court it has now been made clear that the principle of natural justice is applied to such an Act.

At the risk of repetition I must say that the principle of natural justice is violated if the affected party is not allowed to adduce relevant evidence. What is important in the case of giving evidence by an affected party in support of its defence case is whether such evidence is relevant or not. If it finds that such an evidence is relevant for the purpose of disposal of the adjudication proceeding it shall permit the defence to lead such relevant evidence. If not, permitted to lead evidence can be easily refused.

Before parting with this judgment another argument advanced by Mr. Mullick appearing on behalf of the Union of India needs to be discussed. Mr. Mullick has contended that it is no part of natural justice to allow cross-examination of all the persons whose statements are annexed to the show cause notice. Relying on the principles laid down in the case of Fedco (P) Ltd. and Another Vs. S.N. Bilgrami and Others, Mr. Mullick has sumitted that the reasonable opportuhity of being heard have two elements. The first is that an opportunity of being heard must be given and the other such opportunity must be reasonable. He has contended that both these elements are justiceable and it is for the writ court to decide whether an opportunity has been given and whether the opportunity having been given is reasonable or not. Some other decisions of the Supreme Court regarding the extent of application of the principle of natural justice were also cited by Mr. Mullick in support of his contention" that by allowing the company to cross-examine some of the witnesses and by permitting it to lead evidence of some of the company amounted to a resonable opportunity having been given to the company to defend the adjudication proceeding.

I have carefully examined all the aforesaid decisions of the Supreme Court cited on behalf of the Respondents. After carefully examining the said decisions I have no hesitation in my mind to hold that the decisions have enunciated any contrary principle to what has been enunciated in this case. The Supreme Court decision nowhere said that an affected party will not be entitled to lead any relevant evidence in support of his defence case. In State of Mysore v. Shivadasappa AIR 1963 S.C. 373 which was relied by the learneu counsel for the Respondent in support of his contention, also enunciated the same principle that when oral evidence is tendered against a person such person must be allowed to cross-examine the person giving the evidence. In State of Bombay v. Nurul Khan (Supra) the Supreme Court has also enunciated the principles that we have laid down in this appeal that a defence witness can be excluded only if his evidence is irrelevant and not on any other ground. Therefore, there is no escape from nor allowing the defence to leas such relevant evidence. As noted hereinearlier, in Union of India v. T.R. Verma( Supra) the Supreme Court observed that the rules of natural justice require that an affected party must get the opportunity of adducing relevant evidence on which he relies. Therefore, from the discussions made hereinabove and relying on the principles laid down in the aforesaid decisions of the Supreme Court it is absolutely clear that the defence witness cannot be excluded if his evidence is relevant. The same can be excluded only if the same is irrelevant. Therefore there was no scope for the adjudicator not to allow the company to lead relevant evidence in support of its defence case. Accordingly, I cannot be in agreement with the reasonings given by the learned trial judge on the question decided by the learned trial judge as referred to hereinabove.

As I respectfully agree with the conclusions reached by my Lord the Chief. Justice in his Lordship''s judgment this appeal must be allowed and the impugned order of the learned trial judge must be set aside.

Accordingly, the appeal is allowed to the extent indicated above.

The adjudicator shall follow the directions given by my Lord the Chief Justice in the operative part of his Lordship''s judgment.

There will be no order as to costs.