Mangulu Charan Pradhan vs State of Odisha & Ors.

“8.

Revocation of certificate of registration- (1) The supervising authority may, without prejudice to any other penalty that may be imposed on the certificate-holder, by order in writing, revoke the certificate of registration in respect of any clinical establishment-

(a)

on any ground which would entitle it to refuse an application for registration under Section 5; or

(b)

if the clinical establishment fails to comply with the requirements prescribed under Section 10 ; or

(c)

if the certificate-holder has been convicted of any offence in respect of that establishment:

Provided that no such order shall be made except after giving the certificate-holder a reasonable opportunity of being heard, and every such order shall set out therein the grounds for the revocation of the certificate of registration and such grounds shall be communicated to the certificate-holder in such manner as may be prescribed.

(2)

Ever order made under Sub-section (1) shall contain a direction that the inpatients of the clinical establishment shall be transferred to such other clinical establishment as the patient or his attendant opts or where, it is not practicable to transfer the inpatient to the clinical establishment so opted, to the neatest Government Hospital, which shall be specified in that order and it shall also contain such provisions (including provisions by way of direction) as to the care and custody of such inpatients pending such transfer.”

“80.

It is thus, well settled that unless a statutory provision, either specifically or by necessary implication excludes the application of principles of natural justice, because in that event the court would not ignore the legislative mandate, the requirement of giving reasonable opportunity of being heard before an order is made, is generally read into the provisions of a statute, particularly when the order has adverse civil consequences which obviously cover infraction of property, personal rights and material deprivations for the party affected. The principle holds good irrespective of whether the power conferred on a statutory body or Tribunal is administrative or quasi-judicial. It is equally trite that the concept of natural justice can neither be put in a straitjacket nor is it a general rule of universal application.”

“4.

Having regard to the contentions raised in the writ application, the short question that arises for consideration is if the petitioners were prejudiced by denial of an enquiry which they specifically sought and prayed for? The petitioners had categorically made the assertions in paragraph 3(m) of the writ application that despite their specific and clear prayer for an enquiry having regard to the contentious issues in the show cause as per Annexure-9, no opportunity was afforded to them for taking part in the hearing. No enquiry was made to ascertain whether there had ever been any violation of the Act. Had an opportunity been given to them, they could have satisfied the prescribed authority that no infringement had been made and no action was called for. There is no traverse of the aforesaid allegations in the return submitted by the opposite parties 2 and 3. In the return the opposite parties have asserted that there were constructions by the petitioners even after the Act came into force. The question is if before an order was passed to the prejudice of the petitioners, they should have been given reasonable opportunity.

Proviso to Section 91(1) of the Act obligates the development authority to give reasonable opportunity to the owner or person concerned to show cause. It reads as under:

"91(1).

"Provided that no such order shall be made unless the owner or the person concerned has been given a reasonable opportunity to show cause why the order should not be made."

It is not disputed that the petitioners were called upon to show cause and show causes were filed. But were the petitioners entitled to personal hearing was the authority obligated to hold an enquiry? No hard and fast rule can be laid down. It would depend on facts and circumstances of each case. But the touch-stone is that the opportunity should be real and reasonable and the owner or person concerned should be dealt with in a manner just and fair In particular case after show cause is filed further enquiry may not be necessary, namely, for example when allegations are admitted. Where the owner or the person concerned has refuted the allegations that any unauthorised development/construction had been done by him as alleged and where disputed questions of fact are Involved upon resolution of Which would turn the decision, it is imperative That such contentious issues, disputed questions are resolved by an enquiry into the questions involved at which the owner or person concerned is given an opportunity to disprove the all questions or to establish his case. It is not enough that an opportunity to show cause, is given and show cause is filed. Where facts and circumstances, cry aloud for any enquiry for (resolution of disputed and contentious, issues of fact, absence of enquiry at the original stage would not be just and fair. Even though the provision does not specifically enjoin an enquiry, depending upon the facts and circumstances, opportunity of hearing at an enquiry would be read into the provision. It should be kept in mind that an order under Section 91(1) has serious consequences for the owner or person concerned.”

“17.

Rules of “natural justice” are not embodied rules. The phrase “natural justice” is also not capable of a precise definition. The underlying principle of natural justice, evolved under the common law, is to check arbitrary exercise of power by the State or its functionaries. Therefore, the principle implies a duty to act fairly i.e. fair play in action. As observed by this Court in A.K. Kraipak & Ors. Vs. Union of India & Ors. the aim of rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice. These rules can operate only in areas not covered by any law validly made. They do not supplant the law but supplement it. (Also see Income Tax Officer & Ors. Vs. M/s Madnani Engineering Works Ltd., Calcutta).

18.

In Swadeshi Cotton Mills Vs. Union of India R.S. Sarkaria, J., speaking for the majority in a three-Judge Bench, lucidly explained the meaning and scope of the concept of “natural justice”. Referring to a catena of decisions, his Lordship observed thus:

“Rules of natural justice are not embodied rules. Being means to an end and not an end in themselves, it is not possible to make an exhaustive catalogue of such rules. But there are two fundamental maxims of natural justice viz. (i) audi alteram partem and (ii) nemo judex in re sua. The audi alteram partem rule has many facets, two of them being (a) notice of the case to be met; and (b) opportunity to explain. This rule cannot be sacrificed at the altar of administrative convenience or celerity. The general principle--as distinguished from an absolute rule of uniform application—seems to be that where a statute does not, in terms, exclude this rule of prior hearing but contemplates a post-decisional hearing amounting to a full review of the original order on merits, then such a statute would be construed as excluding the audi alteram partem rule at the pre-decisional stage. Conversely if the statute conferring the power is silent with regard to the giving of a pre-decisional hearing to the person affected and the administrative decision taken by the authority involves civil consequences of a grave nature, and no full review or appeal on merits against that decision is provided, courts will be extremely reluctant to construe such a statute as excluding the duty of affording even a minimal hearing, shorn of all its formal trappings and dilatory features at the pre-decisional stage, unless, viewed pragmatically, it would paralyse the administrative process or frustrate the need for utmost promptitude. In short, this rule of fair play must not be jettisoned save in very exceptional circumstances where compulsive necessity so demands. The court must make every effort to salvage this cardinal rule to the maximum extent possible, with situational modifications. But, the core of it must, however, remain, namely, that the person affected must have reasonable opportunity of being heard and the hearing must be a genuine hearing and not an empty public relations exercise.”

19.

In Canara Bank Vs. V.K. Awasthy the concept, scope, history of development and significance of principles of natural justice have been discussed in extenso, with reference to earlier cases on the subject. Inter alia, observing that the principles of natural justice are those rules which have been laid down by the courts as being the minimum protection of the rights of the individual against the arbitrary procedure that may be adopted by a judicial, quasi-judicial and administrative authority while making an order affecting those rights, the court said:

“Concept of natural justice has undergone a great deal of change in recent years. Rules of natural justice are not rules embodied always expressly in a statute or in rules framed thereunder. They may be implied from the nature of the duty to be performed under a statute. What particular rule of natural justice should be implied and what its context should be in a given case must depend to a great extent on the fact and circumstances of that case, the framework of the statute under which the enquiry is held.”

20.

The question with regard to the requirement of an opportunity of being heard in a particular case, even in the absence of provisions for such hearing, has been considered by this Court in a catena of cases. However, for the sake of brevity, we do not propose to refer to all these decisions. Reference to a recent decision of this Court in Sahara India (Firm), Lucknow Vs. Commissioner of Income Tax, Central-I & Anr. would suffice. In that case, the question for adjudication was whether in the absence of a provision in the Income Tax Act, 1961, an opportunity of hearing was required to be given to an assessee before an order under Section 142(2-A) of the said Act, directing special audit of his accounts was passed? A Bench of three Judges, speaking through one of us (D.K. Jain, J.), explaining the concept of “natural justice” and the principles governing its application, summed up the legal position as under :

“Thus, it is trite that unless a statutory provision either specifically or by necessary implication excludes the application of principles of natural justice, because in that event the court would not ignore the legislative mandate, the requirement of giving reasonable opportunity of being heard before an order is made, is generally read into the provisions of a statute, particularly when the order has adverse civil consequences for the party affected. The principle will hold good irrespective of whether the power conferred on a statutory body or tribunal is administrative or quasi-judicial.

We may, however, hasten to add that no general rule of universal application can be laid down as to the applicability of the principle audi alteram partem, in addition to the language of the provision. Undoubtedly, there can be exceptions to the said doctrine. Therefore, we refrain from giving an exhaustive catalogue of the cases where the said principle should be applied. The question whether the principle has to be applied or not is to be considered bearing in mind the express language and the basic scheme of the provision conferring the power; the nature of the power conferred and the purpose for which the power is conferred and the final effect of the exercise of that power. It is only upon a consideration of all these matters that the question of application of the said principle can be properly determined.”

21.

Having considered the issue, framed in para 12 supra, on the touchstone of the afore-noted legal principles in regard to the applicability of the principles of natural justice, we are of the opinion that keeping in view the nature, scope and consequences of direction under sub-rule (7) of Rule 633 of the Excise Manual, the principles of natural justice demand that a show-cause notice should be issued and an opportunity of hearing should be afforded to the person concerned before an order under the said Rule is made, notwithstanding the fact that the said Rule does not contain any express provision for the affected party being given an opportunity of being heard. Undoubtedly, action under the said Rule is a quasi-judicial function which involves due application of mind to the facts as well as to the requirements of law. Therefore, it is plain that before raising any demand and initiating any step to recover from the executant of the bond any amount by way of penalty, there has to be an adjudication as regards the breach of condition(s) of the bond or the failure to produce the discharge certificate within the time mentioned in the bond on the basis of the explanation as also the material which may be adduced by the person concerned denying the liability to pay such penalty. Moreover, the penalty amount has also to be quantified before proceedings for recovery of the amount so determined are taken. In our view, therefore, if the requirement of an opportunity to show-cause is not read into the said Rule, an action thereunder would be open to challenge as violative of Article 14 of the Constitution of India on the ground that the power conferred on the competent authority under the provision is arbitrary.”