AI Drafter 
TaxTMI 
TaxTMI 
2015 (9) TMI 82
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....der: 3.1 Respondent No.1 Bank extended financial facilities to the petitioner in the year 199798 and initially sanctioned credit facilities of approximately Rs. 10.80 crores which came to be revised from time to time. The record indicates that an indenture of mortgage came to be executed on 4.4.2005 and 9.6.2006 and a master agreement was executed on 3.4.2008. As stated in Paragraph 2.3 of the petition, respondent No.1 Bank vide sanction letter dated 20.6.2009, sanctioned base limit of Rs. 33.85 crores, total nonfund base limit of Rs. 3.50 crores and forward contract limit of Rs. 2.80 crores. It also appears from the record that movable properties comprising of stocks, stocks in trade, receivable, entire current assets, plant and machineries of the petitioner were hypothecated. Equitable mortgage of land admeasuring 1,51,353 sq. mtrs. situated at Village Waldhera, Taluka Dholka, District Ahmedabad and so also the building structure as well as plant and machinery were mortgaged. The record indicates that in addition to that, undivided impartible right and other nonagricultural land situated at Ambavadi, Ahmedabad city and offices situated in a building known as Shitiratna constru....
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.... Vires of certain provisions of the Act. The record indicates that the Division Bench of this Court protected the petitioner vide order dated 28.6.2013. However, the same was discontinued by an order dated 8.7.2013. 3.4 The record indicates that the petitioner challenged the said order passed by the Division Bench of this Court dated 8.7.2013 before the Hon'ble Supreme Court being Special Leave Petition (c) No.3967 of 2014. The Hon'ble Supreme Court vide order dated 28.2.2014 granted the order of statusquo with regard to secured assets and ultimately, by an order dated 7.3.2014, the said Special Leave Petition came to be disposed of with a direction that the statusquo shall be maintained with regard to secured assets by the Bank as well as the owner, till the judgment is delivered by this Court. The record indicates that ultimately, by a common final judgment and order dated 24.4.2014, the Division Bench dismissed the matters including the writ petition filed by the petitioner being Special Civil Application No.10338 of 2013. The petitioner, being aggrieved by the same, preferred a Special Leave Petition before the Hon'ble Supreme Court in Special Leave Petition (c) No.12588 of ....
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....s also filed an Original Application before the Debt Recovery Tribunal under Section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 being Original Application No.402 of 2014 and the same is pending. The record indicates that the petitioner has also approached BIFR by way of Reference Case No.6 of 2013 which, as per the record of the petition, is still pending. The record indicates that the petitioner has also filed an application for OTS before IDBI Bank Ltd. and has also initially deposited a sum of Rs. 90 lacs with IDBI Bank Ltd. to show its bonafide. It further appears that similarly, the petitioner has also offered a fresh OTS proposal to respondent No.1 Bank on 18.2.2015 and has initially deposited a sum of Rs. 1.10 crores on 25.2.2015. 3.9 The impugned order passed upon an application for stay in Securitization Appeal No.62 of 2014 is challenged by the petitioner in this petition. Respondent No.1 Bank has also filed an affidavitinreply to the contentions raised by the petitioner and respondent No.1 Bank has raised preliminary objection as regards the very maintainability of the present petition as predominantly contended in Paragraph 4 of the....
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....justice. It was contended that the rule of principles of natural justice requires reasons to be given in support of an order and is like the basic principles of natural justice i.e. audi alterem partem. It was contended that it is the duty of every quasi judicial authority to observe the same in proper letter and spirit and mere pretence of compliance with it would not satisfy the requirement of law. It was also contended that requirement of recording the reasons is one of the principles of natural justice. Even in case of administrative orders and recording of finding without any reasons much less cogent reasons would amount to violation of principles of natural justice. Mr. Vakil has relied upon the judgment of the Apex Court in the case of Kranti Associates Private Limited & Anr. Vs. Sh. Masood Ahmed Khan & Ors. reported in (2010) 9 SCC 496. It was contended that as held by the Apex Court in the case of Kranti Associates Private Limited (supra), recording of reason is now virtually a component of human right. It was further submitted that every adjudicating authority is required to act fairly and fair play in action and has to give reasons in support of the decisions taken by it....
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.... aforesaid, Mr. Vakil submitted that there is a breach of principles of natural justice by the Debt Recovery Tribunal and as no reasons are recorded in support of the order passed by it and as the submissions made by the petitioner have not been dealt with by giving elaborate reasons, this Court may be pleased to hold that there is a breach of principles of natural justice and entertain this petition by allowing the petition and/or remanding the proceedings to Debt Recovery Tribunal for its rehearing on interim relief and till the Tribunal rehears the parties, the petitioner may be protected. 5.3 It is also contended by Mr. Vakil that even the basic principles of grant of interim relief namely primafacie case, balance of convenience and irreparable loss are not rightly considered by the Debt Recovery Tribunal. It was contended that the petitioner is a running concern and the forward contracts which were undertaken after the forward contract limit was exhausted is not a secured debt and for such a debt, proceedings under the Act cannot be initiated by respondent No.1 Bank. It was contended that thus, respondent No.1 Bank has no jurisdiction to enforce the demand notices and thus,....
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....uperintendence under Article 227 of the Constitution of India. It was further submitted that this Court in exercise of powers under Article 226 of the Constitution of India cannot reappreciate or evaluate the evidence and this Court cannot act as an Appellate Court. It was further submitted that only because easy access to justice may be available by way of a petition under Article 227 of the Constitution of India, the same cannot be used as a licence to bypass an efficacious statutory remedy. It was therefore contended that this Court may not entertain the petition permitting the petitioner to bypass the statutory remedy. Mr. Parmar has relied upon the following judgments on the aforesaid aspect:- (a) Ranjeet Singh Vs. Ravi Prakash, reported in AIR 2004 SC 3892 (Paragraph 4) (b) State of Haryana & Ors. Manoj Kumar, reported in (2010) 4 SCC 350 (Paragraphs 17 to 23) (c) Sameer Suresh Gupta Vs. Rahul Kumar Agarwal, reported in (2013) 9 SCC 374 (Paragraphs 6 and 7) (d) Punjab National Bank Vs. O.C. Krishnan, reported in AIR 2001 SC 3208 (Paragraph 6) (e) Gujarat Fisheries Central CoOp. Association Ltd. Vs. Union of India & Ors. reported in 2003 (2) GLR 1639 (Paragraphs....
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....h Ghambhir & Anr. Vs. Gurpree Singh & Ors. reported in (2014) 10 SCC 702 (Paragraph 11) 6.2 It was also contended on behalf of respondent No.1 that it cannot be said that the impugned judgment did not record submissions that were canvassed on behalf of the petitioner. It was contended that recording of evidence cannot be equated with recording of reasons in an order. It was contended that the grounds raised in the petition itself are selfdefeating and it would require determination of complex nature of disputed question of fact which demands elaborate inquiry/examination of material and evidence to adjudicate the lis and such a remedy is already provided under Section 18 of the Act. It was further submitted that in light of the ratio laid down by the Apex Court in the case of Kanaiyalal Lalchand Sachdev (supra), the petition deserves to be dismissed and the petitioner be relegated to the alternative remedy of filing an appeal. It was further submitted that the Tribunal, after appreciating the contentions raised by both the parties, did not find any primafacie case and/or balance of convenience. It was contended that the Tribunal has rightly considered the material on record and ....
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....ssession of the secured assets to the borrower, it may by order, declare the recourse to any one or more measures referred to in subsection (4) of section 13 taken by the secured creditors as invalid and restore the possession of the secured assets to the borrower or restore the management of the business to the borrower, as the case may be, and pass such order as it may consider appropriate and necessary in relation to any of the recourse taken by the secured creditor under subsection (4) of section 13. (4) If, the Debts Recovery Tribunal declares the recourse taken by a secured creditor under subsection (4) of section 13, is in accordance with the provisions of this Act and the rules made thereunder, then, notwithstanding anything contained in any other law for the time being in force, the secured creditor shall be entitled to take recourse to one or more of the measures specified under subsection (4) of section 13 to recover his secured debt. (5) Any application made under subsection (1) shall be dealt with by the Debts Recovery Tribunal as expeditiously as possible and disposed of within sixty days from the date of such application: PROVIDED that the Debts Recovery Tri....
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....cement of the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Act, 2004, an appeal to the Debts Recovery Tribunal or the Appellate Tribunal under this Act, shall be deemed always to have been levied and collected in accordance with law as if amendments made to sections 17 and 18 of this Act by sections 11 and 12 of the said Act were in force at all material times. 18B. Appeal to High Court in certain cases Any borrower residing in the State of Jammu and Kashmir and aggrieved by any order made by the Court of District Judge under section 17A may prefer an appeal, to the High Court having jurisdiction over such Court, within thirty days from the date of receipt of the order of the Court of District Judge: PROVIDED that no appeal shall be preferred unless the borrower has deposited, with the Jammu and Kashmir High Court, fifty per cent of the amount of the debt due from him as claimed by the secured creditor or determined by the Court of District Judge, whichever is less: PROVIDED further that the High Court may, for the reasons to be recorded in writing, reduce the amount to not less than twentyfive per cent. of the debt referred to in the first provi....
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....sation Application No.62 of 2014 filed by the petitioner, pending the main application. The provisions of Section 18 of the Act are crystal clear and the same provides an alternative efficacious remedy to the petitioner. The statutory appeal is provided under the said provision. The learned advocates appearing for the parties have relied upon the judgments as enumerated above. 11. In the case of Siemens Engineering & Manufacturing Company of India Limited (supra), it has been observed as under: "6. Before we part with this appeal, we must express our regret at the manner in which the Assistant Collector, the Collector and the Government of India disposed of the proceedings before them. It is incontrovertible that the proceedings before the Assistant Collector arising from the notices demanding differential duty were quasijudicial proceedings and so also were the proceedings in revision before the Collector and the Government of India. Indeed, this was not disputed by the learned counsel appearing on behalf of the respondents. It is now settled law that where an authority makes an order in exercise of a quasijudicial function, it must record its reasons in support of the order....
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....the Government of India had given proper and adequate reasons dealing with the arguments advanced on behalf of the appellants while rejecting the revision application. We hope and trust that in future the Customs Authorities will be more careful in adjudicating upon the proceedings which come before them and pass properly reasoned orders, so that those who are affected by such orders are assured that their case has received proper consideration at the hands of the Customs authorities and the validity of the adjudication made by the Custom authorities can also be satisfactorily tested in a superior tribunal or court. In fact in would be desirable that in cases arising under Customs and Excise laws an independent quasijudicial tribunal, like the Incometax Appellate Tribunal or the Foreign Exchange Regulation Appellate Board, is set up which would finally dispose of appeals and revision applications under these laws instead of leaving the determination of such appeals and revision applications to the Government of India. An independent quasijudical tribunal would definitely inspire greater confidence in the public mind." 12. In the case of S.N. Mukherjee (supra), it has been observ....
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....s case (AIR 1961 SC 1669) (supra) was distinguished on the ground that in that case the Central Government had reversed the decision appealed against without giving any reasons and the record did not disclose any apparent ground for the reversal'. According to the learned Judges there is a vital difference between an order of reversal and an order of affirmance. Subba Rao, J., as he then was, did not concur with this view and found that the order of the Central Government was vitiated as it did not disclose any reasons for rejecting the revision application. The learned Judge has observed: "In the context of a welfare State, administrative tribunals have come to stay. Indeed, they are the necessary concomitants of a welfare State. But arbitrariness in their functioning destroys the concept of a welfare State itself. Selfdiscipline and supervision exclude or at any rate minimize arbitrariness. The least a tribunal can do is to disclose its mind. The compulsion of disclosure guarantees consideration. The condition to give reasons introduces clarity and excludes or at any rate minimizes arbitrariness; it gives satisfaction to the party against whom the order is made; and it also en....
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.... (1967 (3) SCR 302: AIR 1967 SC 1606) (supra) where also the order under challenge had been passed by the Central Government in exercise of its revisional powers under Section 30 of the Mines and Minerals (Regulation and Development) Act, 1957 read with rules 54 and 55 of the Mineral Concession Rules, 1960. Dealing with the question as to whether it was incumbent on the Central Government to give any reasons for its decision on review this Court has observed : "The decisions of tribunals in India are subject to the supervisory powers of the High Courts under Art. 227 of the Constitution and of appellate powers of this Court under Art. 136. It goes without saying that both the High Court and this Court are placed under a great disadvantage if no reasons are given and the revision is dismissed curtly by the use of the single word "rejected", or "dismissed." In such a case, this Court can probably only, exercise its appellate jurisdiction satisfactorily by examining the entire records of the case and after giving a hearing come to its conclusion on the merits of the appeal. This will certainly be a very unsatisfactory method of dealing with the appeal." (p. 309) (of SCR): (at p. 16....
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.... opportunity to demonstrate that the reasons which persuaded the authority to reject his case were erroneous; the other, that the obligation to record reasons operates as a deterrent against possible arbitrary action by the executive authority invested with the judicial power." (p. 46) (of SCR) : (at p. 866 of AIR). 29. In Mahabir Prasad Santosh Kumar v. State of U. P. (1970 (1) SCR 201 : AIR 1970 SC 1302) (supra) the District Magistrate had cancelled the. licence granted under the U. P. Sugar Dealers' Licensing Order, 1962 without giving any reason and the State Government had dismissed the appeal against the said order of the District Magistrate without recording the reasons. This Court has held: "The practice of the executive authority dismissing statutory appeal against orders which prima facie seriously prejudice the rights of the aggrieved party without giving reasons is a negation of the rule of law." (p. 204) (of SCR): (at p. 1304 of AIR). "Recording of reasons in support of a decision on a disputed claim by a quasijudicial authority ensures that the decision is reached according to law and is not the result of caprice, whim or fancy or reached on grounds of policy....
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....al order must be supported by reasons." (p. 495) (of SCR) : (at p. 1789 of AIR). "If courts of law are to be replaced by administrative authorities and tribunals, as indeed, in some kinds of cases, with the proliferation of Administrative Law they may have to be so replaced, it is essential that administrative authorities and tribunals should accord fair and proper hearing to the persons sought to be affected by their orders and give sufficiently clear and explicit reasons in support of the orders made by them. Then alone administrative authorities and tribunals, exercising quasijudicial function will be able to justify their existence and carry credibility with the people by inspiring confidence in the adjudicatory process. The rule requiring reasons to be given in support of an order is, like the principle of audi alteram partem, a basic principle of natural justice which must inform every quasijudicial process and this rule must be observed in its proper spirit and mere pretence of compliance with it would not satisfy the requirement of law." (p. 496) (of SCR) : (at p. 1789 of AIR). 32. Tarachand Khatri v. Municipal Corporation of Delhi, (1977) 2 SCR 198 : (AIR 1917 SC 567....
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.... the law of arbitration which is intended for settlement of private disputes." (pp. 75152) (of SCC) : (at pp. 1444 and 1445 of AIR). 34. The decisions of this Court referred to above indicate that with regard to the requirement to record reasons the approach of this Court is more in line with that of the American Courts. An important consideration which has weighed with the Court for holding that an administrative authority exercising quasijudicial functions must record the reasons for its decision, is that such a decision is subject to the appellate jurisdiction of this Court under Article 136 of the Constitution as well as the supervisory jurisdiction of the High Courts under Article 227 of the Constitution and that the reasons, if recorded, would enable this Court or the High Courts to effectively exercise the appellate or supervisory power. But this is not the sole consideration. The other considerations which have also weighed with the Court in taking this view are that the requirement of recording reasons would (i) guarantee consideration by the authority; (ii) introduce clarity in the decisions; and (iii) minimise chances of arbitrariness in decisionmaking. In this regard....
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....d that it, may well be argued that there is a third principle of natural justice, namely, that a party is entitled to know the reason for the decision, be it judicial or quasijudicial. The Committee expressed the opinion that "there are some cases where the refusal to give grounds for a decision may be plainly unfair; and this may be so, even when the decision is final and no further proceedings are open to the disappointed party by way of appeal or otherwise" and that "where further proceedings are open to a disappointed party, it is contrary to natural justice that the silence of the Minister or the Ministerial Tribunal should deprive them of the opportunity." (p. 80) Prof. H. W. R. Wade has also expressed the view that "natural justice may provide the best rubric for it, since the giving of reasons is required by the ordinary man's sense of justice." (see Wade, Administrative Law, 6th Edn. p. 548). In Siemens Engineering Co. case (AIR 1976 SC 1785) (supra) this Court has taken the same view when it observed that "the rule requiring reasons to be given in support of an order is, like the. principles of audi alteram partem, a basic principle of natural justice which must inform ev....
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....amework whereunder jurisdiction has been conferred on the administrative authority. With regard to the exercise of a particular power by an administrative authority including exercise of judicial or quasijudicial functions the legislature, while conferring the said power, may feel that it would not be in the larger public interest that the reasons for the order passed by the administrative authority be recorded in the order and be communicated to the aggrieved party and it may dispense with such a requirement. It may do so by making an express provision to that effect as those contained in the Administrative Procedure Act, 1946 of U. S. A. and the Administrative Decisions (Judicial Review) Act, 1977 of Australia whereby the orders passed by certain specified authorities are excluded from the ambit of the enactment. Such an exclusion can also arise by necessary implication from the nature of the subject matter, the scheme and the provisions of the enactment. The public interest underlying such a provision would outweigh the salutary purpose served by the requirement to record the reasons. The said requirement cannot, therefore, be insisted upon in such a case. 39.For the reasons ....
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....an of the Managing Committee because it was of the view that Section 8(2) is not applicable to the minority institutions. Neither the Tribunal nor the Division Bench of the High Court dealt with and decided the appellant's challenge to the findings recorded by the inquiry officer and her plea that the extreme penalty of removal from service imposed on her was not justified because she was not found guilty of any serious misconduct." 14. In the case of Kranti Associates Private Limited (supra), it has been observed as under: "14. The expression "speaking order" was first coined by Lord Chancellor Earl Cairns in a rather strange context. The Lord Chancellor, while explaining the ambit of the writ of certiorari, referred to orders with errors on the face of the record and pointed out that an order with errors on its face, is a speaking order. (See pp. 187897, Vol. 4, Appeal Cases 30 at 40 of the Report). 15. This Court always opined that the face of an order passed by a quasijudicial authority or even an administrative authority affecting the rights of parties, must speak. It must not be like the "inscrutable face of a sphinx". 16. In Harinagar Sugar Mills Ltd. v. Shyam Su....
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....thout specifying any reason, this Court, exercising its jurisdiction under Article 136, may find it difficult to ascertain which are the grounds on which the Central Government upheld the order of the State Government (see AIR p. 1610, para 9). Therefore, this Court insisted on reasons being given for the order. 20. In Mahabir Prasad Santosh Kumar v. State of U.P., while dealing with the U.P. Sugar Dealers' Licensing Order under which the licence was cancelled, this Court held that such an order of cancellation is quasijudicial and must be a speaking one. This Court further held that merely giving an opportunity of hearing is not enough and further pointed out where the order is subject to appeal, the necessity to record reason is even greater. The learned Judges held that the recording of reasons in support of a decision on a disputed claim ensures that the decision is not a result of caprice, whim or fancy but was arrived at after considering the relevant law and that the decision was just. (See SCC p. 768, para 7 : AIR p. 1304, para 7.) 21. In Travancore Rayon Ltd. v. Union of India, the Court, dealing with the revisional jurisdiction of the Central Government under the th....
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....rder in exercise of its quasijudicial function, must record reasons in support of the order it makes. The learned Judges emphatically said that every quasijudicial order must be supported by reasons. The rule requiring reasons in support of a quasijudicial order is, this Court held, as basic as following the principles of natural justice. And the rule must be observed in its proper spirit. A mere pretence of compliance would not satisfy the requirement of law (see SCC p. 986, para 6 : AIR p. 1789, para 6). 25. In Maneka Gandhi v. Union of India which is a decision of great jurisprudential significance in our constitutional law, Beg, C.J. in a concurring but different opinion held that an order impounding a passport is a quasijudicial decision (SCC p. 311, para 34 : AIR p. 612, para 34). The learned Chief Justice also held, when an administrative action involving any deprivation of or restriction on fundamental rights is taken, the authorities must see that justice is not only done but manifestly appears to be done as well. This principle would obviously demand disclosure of reasons for the decision. 26. Y.V. Chandrachud, J. (as His Lordship then was) in a concurring but a sep....
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....istrative tribunals can be sustained only if the tribunals act fairly and dispose of the matters before them by wellconsidered orders. In saying so, this Court relied on its previous decisions in Capoor and Siemens Engg. discussed above. 32. In Ram Chander v. Union of India this Court was dealing with the appellate provisions under the Railway Servants (Discipline and Appeal) Rules, 1968 condemned the mechanical way of dismissal of appeal in the context of requirement of Rule 22(2) of the aforesaid Rules. This Court held that the word "consider" occurring in Rule 22(2) must mean that the Railway Board shall duly apply its mind and give reasons for its decision. The learned Judges held that the duty to give reason is an incident of the judicial process and emphasised that in discharging quasijudicial functions the appellate authority must act in accordance with natural justice and give reasons for its decision (SCC pp. 10607, para 4 : AIR p. 1176, para 4). 33. In Star Enterprises v. City and Industrial Development Corpn. of Maharashtra Ltd. a threeJudge Bench of this Court held that in the present day setup judicial review of administrative action has become expansive and is b....
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....which was rendered in Som Datt Datta v. Union of India where Ramaswami, J. delivering the judgment for the unanimous Constitution Bench held that provisions of Sections 164 and 165 of the Army Act do not require an order confirming proceedings of Court Martial to be supported by reasons. This Court held that an order confirming such proceedings does not become illegal if it does not record reasons. (AIR pp. 42122, para 10 of the Report.) 38. About two decades thereafter, a similar question cropped up before this Court in S.N. Mukherjee v. Union of India. A unanimous Constitution Bench speaking through S.C. Agrawal, J. confirmed its earlier decision in Som Datt in S.N. Mukherjee case, SCC p. 619, para 47 : AIR para 47 at p. 2000 of the Report and held that reasons are not required to be recorded for an order confirming the finding and sentence recorded by the Court Martial. 39. It must be remembered in this connection that the court martial as a proceeding is sui generis in nature and the Court of Court Martial is different, being called a court of honour and the proceedings therein are slightly different from other proceedings. About the nature of Court Martial and its procee....
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....lls further clarified by saying: (Civil Service Appeal Board case, All ER p. 317) "... '... Thus, in the particular circumstances of this case, and without wishing to establish any precedent whatsoever, I am prepared to spell out an obligation on this Board to give succinct reasons, if only to put the mind of Mr Cunningham at rest. I would therefore allow this application.' " 44. But, however, the present trend of the law has been towards an increasing recognition of the duty of court to give reasons (see North Range Shipping Ltd. v. Seatrans Shipping Corpn.). It has been acknowledged that this trend is consistent with the development towards openness in the Government and judicial administration. 45. In English v. Emery Reimbold and Strick Ltd. it has been held that justice will not be done if it is not apparent to the parties why one has won and the other has lost. The House of Lords in Cullen v. Chief Constable of the Royal Ulster Constabulary, Lord Bingham of Cornhill and Lord Steyn, on the requirement of reason held: (WLR p. 1769, para 7) "7. ... First, they impose a discipline ... which may contribute to such refusals being considered with care. Secondly, reasons ....
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....ant factors have been objectively considered. This is important for sustaining the litigants' faith in the justice delivery system. (j) Insistence on reason is a requirement for both judicial accountability and transparency. (k) If a judge or a quasijudicial authority is not candid enough about his/her decisionmaking process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism. (l) Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or "rubberstamp reasons" is not to be equated with a valid decisionmaking process. (m) It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decisionmaking not only makes the judges and decisionmakers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial Candor.) (n) Since the requirement to record reasons emanates from the broad doctrine of fairness in decisionmaking, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See Ruiz Torija v....
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....a), it has been observed as under: "18. It is apparent from the provisions that the scheme is framed for providing efficient, adequate, economical and properly coordinated road transport service in public interest. Section 102 of the Act of 1988 does not lay down the requirement of recording any express finding on any particular aspect; whereas the duty is to hear and consider the objections. It requires the State Government to act in public interest to cancel or modify a scheme after giving the State Transport Undertaking or any other affected person by the proposed modification an opportunity of hearing. The State is supposed to be acting in public interest while exercising the power under the provision. However, that does not dispense with the requirement to record reasons while dealing with objections. 19. Modification of the scheme is a quasijudicial function while modifying or cancelling a scheme. The State Government is dutybound to consider the objections and to give reasons either to accept or reject them. The rule of reason is antithesis to arbitrariness in action and is a necessary concomitant of the principles of natural justice. 20. In Siemens Engineering & Ma....
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.... "8. The purpose of disclosure of reasons, as held by a Constitution Bench of this Court in S.N. Mukherjee v. Union of India (1990 (4) SCC 594), is that people must have confidence in the judicial or quasijudicial authorities. Unless reasons are disclosed, how can a person know whether the authority has applied its mind or not? Also, giving of reasons minimises the chances of arbitrariness. Hence, it is an essential requirement of the rule of law that some reasons, at least in brief, must be disclosed in a judicial or quasijudicial order, even if it is an order of affirmation." 22. A Constitution Bench of this Court has laid down in Krishna Swami v. Union of India & Ors. [1992 (4) SCC 605] that if a statutory or public authority/functionary does not record the reasons, its decision would be rendered arbitrary, unfair, unjust and violating Articles 14 and 21 of the Constitution. This Court has laid down thus : "Undoubtedly, in a parliamentary democracy governed by rule of law, any action, decision or order of any statutory/public authority/functionary must be founded upon reasons stated in the order or staring from the record. Reasons are the links between the material, the....
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....ee of fairness in the process of decisionmaking." 24. In Divisional Forest Officer, Kothagudem & Ors. v. Madhusudhan Rao [2008 (3) SCC 469], this Court has laid down thus : "20. It is no doubt also true that an appellate or revisional authority is not required to give detailed reasons for agreeing and confirming an order passed by the lower forum but, in our view, in the interests of justice, the delinquent officer is entitled to know at least the mind of the appellate or revisional authority in dismissing his appeal and/or revision. It is true that no detailed reasons are required to be given, but some brief reasons should be indicated even in an order affirming the views of the lower forum." 25. In Chairman, Disciplinary Authority, Rani Lakshmi Bai Kshetriya Gramin Bank v. Jagdish Sharan Varshney & Ors. [2009 (4) SCC 240], it was observed that : "8. The purpose of disclosure of reasons, as held by a Constitution Bench of this Court in S.N. Mukherjee v. Union of India (supra), is that people must have confidence in the judicial or quasijudicial authorities. Unless reasons are disclosed, how can a person know whether the authority has applied its mind or not? Also, givi....
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....t for modifying the scheme is that it should be in the public interest. The modification now proposed is necessitated in view of the stand taken by the Hon'ble Supreme Court of India in Ashrafulla Khan's case reported in AIR 2002 SC 629. During the period from 04.12.1995 and 14.01.2002, considering the interpretation with regard to the words "overlapping", "intersection" and "corridor restriction" of the Hon'ble High Court of Karnataka, the Transport Authorities have granted the permits to the private operators in accordance with the provisions of M.V.Act, 1988 and rules made thereunder considering the need of the travelling public, as these operators are meeting the genuine demands of the travelling public in excess of the services provided by the STUs. Hence, it has become necessary to save all the permits, granted by the RTAs which were in operation as on 1.4.2002 in the interest of the travelling public. Therefore, on the facts and averments made before me, I do not find the sufficient grounds is established to support the objections and representations received and made in person opposing the modification of the approved Bellary and Raichur schemes published in Notification No....
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....ri. If it is reasonably possible to form two opinions on the same material, the finding arrived at one way or the other, cannot be called a patent error. As to the exercise of supervisory jurisdiction of the High Court under Art. 227 of the Constitution also,it has been held in Surya Dev Rai (supra) that the jurisdiction was not available to be exercised for indulging into rePage appreciation or evaluation of evidence or correcting the errors in drawing inferences like a Court of appeal. The High Court has itself recorded in its judgment that " considering the evidence on the record carefully" it was inclined not to sustain the judgment of the appellate Court. On its own showing, the High Court has acted like an appellate Court which was not permissible for it to do under Art. 226 or Art. 227 of the Constitution." 17. In the case of State of Haryana (supra), it has been observed as under: 17. The appellants urged that the jurisdiction of the High Court under Article 227 is very limited and the High Court, while exercising the jurisdiction under Article 227, has to ensure that the courts below work within the bounds of their authority. More than half a century ago, the Constit....
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....nterferes. 21. A threeJudge Bench of this court in Rena Drego (Mrs.) v. Lalchand Soni and Others (1998) 3 SCC 341 : (AIR 1998 SC 1990 : 1998 AIR SCW 1840) again abundantly made it clear that the High Court cannot interfere with the findings of fact recorded by the subordinate court or the tribunal while exercising its jurisdiction under Article 227. Its function is limited to seeing that the subordinate court or the tribunal functions within the limits of its authority. It cannot correct mere errors of fact by examining the evidence and reappreciating it. 22. In Virendra Kashinath Ravat and Another v. Vinayak N. Joshi and Others (1999) 1 SCC 47 : (AIR 1999 SC 162 : 1998 AIR SCW 3521) this court held that the limited power under Article 227 cannot be invoked except for ensuring that the subordinate courts function within its limits. 23. This court over 50 years has been consistently observing that limited jurisdiction of the High Court under Article 227 cannot be exercised by interfering with the findings of fact and set aside the judgments of the courts below on merit. 18. In the case of Sameer Suresh Gupta (supra), it has been observed as under: "6. In our view, the....
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....based on clear ignorance or utter disregard of the provisions of law, and (ii) a grave injustice or gross failure of justice has occasioned thereby. (6) A patent error is an error which is selfevident i.e. which can be perceived or demonstrated without involving into any lengthy or complicated argument or a longdrawn process of reasoning. Where two inferences are reasonably possible and the subordinate court has chosen to take one view, the error cannot be called gross or patent. (7) The power to issue a writ of certiorari and the supervisory jurisdiction are to be exercised sparingly and only in appropriate cases where the judicial conscience of the High Court dictates it to act lest a gross failure of justice or grave injustice should occasion. Care, caution and circumspection need to be exercised, when any of the abovesaid two jurisdictions is sought to be invoked during the pendency of any suit or proceedings in a subordinate court and the error though calling for correction is yet capable of being corrected at the conclusion of the proceedings in an appeal or revision preferred thereagainst and entertaining a petition invoking certiorari or supervisory jurisdiction of th....
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.... interfere with the orders of tribunals or courts inferior to it. Nor can it, in exercise of this power, act as a court of appeal over the orders of the court or tribunal subordinate to it. In cases where an alternative statutory mode of redressal has been provided, that would also operate as a restrain on the exercise of this power by the High Court. (d) The parameters of interference by High Courts in exercise of their power of superintendence have been repeatedly laid down by this Court. In this regard the High Court must be guided by the principles laid down by the Constitution Bench of this Court in Waryam Singh5 and the principles in Waryam Singh5 have been repeatedly followed by subsequent Constitution Benches and various other decisions of this Court. (e) According to the ratio in Waryam Singh5, followed in subsequent cases, the High Court in exercise of its jurisdiction of superintendence can interfere in order only to keep the tribunals and courts subordinate to it, 'within the bounds of their authority'. (f) In order to ensure that law is followed by such tribunals and courts by exercising jurisdiction which is vested in them and by not declining to exercise the....
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.... (n) This reserve and exceptional power of judicial intervention is not to be exercised just for grant of relief in individual cases but should be directed for promotion of public confidence in the administration of justice in the larger public interest whereas Article 226 is meant for protection of individual grievance. Therefore, the power under Article 227 may be unfettered but its exercise is subject to high degree of judicial discipline pointed out above. (o) An improper and a frequent exercise of this power will be counterproductive and will divest this extraordinary power of its strength and vitality." 19. In the case of Punjab National Bank (supra), it has been observed as under: "6. The Act has been enacted with a view to provide a special procedure for recovery of debts due to the banks and the financial institutions. There is hierarchy of appeal provided in the Act, namely, filing of an appeal under S. 20 and this fast track procedure cannot be allowed to be derailed either by taking recourse to proceedings under Arts. 226 and 227 of the Constitution or by filing a civil suit, which is expressly barred. Even though a provision under an Act cannot expressly oust....
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....ngs under Articles 226 and 227 of the Constitution or by filing a civil suit under Section 9 of the Code of Civil Procedure. It is in this context it has been succinctly observed in the said decision by the Hon'ble Apex Court, that, "Even though a provision under an Act cannot expressly oust the jurisdiction of the court under Articles 226 and 227 of the Constitution, nevertheless, when there is an alternative remedy available, judicial prudence demands that the Court refrains from exercising its jurisdiction under the constitutional writ provisions. In this connection, it would also be interesting to refer the Division Bench decision of this Court delivered by us [Coram: J.N. Bhatt and K.A. Puj, JJ.] in Letters Patent Appeal No. 685 of 2002 on 1922003, wherein, in a similar case, we have taken the same view and we find no reason to make a departure from our earlier view. 5. The learned Advocate for the appellant has taken us through following Judgments in course of his submissions before us and in support of his version that the impugned order is without jurisdiction and that despite the provision of appeal into the Act, the jurisdiction of the Court, under Article 226/227, is ....
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.... would have passed appropriate orders. The mere fact that the respondent had not been given an opportunity to crossexamine the deponent did not enable the respondent to bypass the provision for appeal and approach the High Court directly by a writ petition under Articles 226 and 227 of the Constitution, challenging the decree/final order on the ground that the order earlier passed, refusing to permit the crossexamination of the deponent, was erroneous. 7. In the facts and circumstances of this case, we hold that the respondent ought to have availed the remedy provided under Section 20 of the Act and preferred an appeal before the Appellate Tribunal wherein he could have urged all his grievances and challenged the decree/final order passed by the DRT. The order passed by the High Court in exercise of writ jurisdiction is wholly unjustified and it is accordingly set aside." 22. In the case of United Bank of India (supra), it has been observed as under: "42. There is another reason why the impugned order should be set aside. If respondent No.1 had any tangible grievance against the notice issued under Section 13(4) or action taken under Section 14, then she could have availed....
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....dy is a rule of discretion and not one of compulsion, but it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution and pass interim order ignoring the fact that the petitioner can avail effective alternative remedy by filing application, appeal, revision, etc. and the particular legislation contains a detailed mechanism for redressal of his grievance. 49. The views expressed in Titaghur Paper Mills Co. Ltd. v. State of Orissa (AIR 1983 SC 603) (supra) were echoed in Assistant Collector of Central Excise, Chandan Nagar, West Bengal v. Dunlop India Ltd. and others (1985) 1 SCC 260 : (AIR 1985 SC 330) in the following words: "Article 226 is not meant to shortcircuit or circumvent statutory procedures. It is only where statutory remedies are entirely illsuited to meet the demands of extraordinary situations, as for instance where the very vires of the statute is in question or where private or public wrongs are so inextricably mixed up and the prevention of public injury and the vindication of public justice require it that recourse may be had to Article 226 of the Constitution. But then the Court must have go....
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....& Anr.5; Surya Dev Rai Vs. Ram Chander Rai & Ors.6; State Bank of India Vs. Allied Chemical Laboratories & Anr.) 25. In the instant case, apart from the fact that admittedly certain disputed questions of fact viz. nonreceipt of notice under Section 13(2) of the Act, noncommunication of the order of the Chief Judicial Magistrate etc. are involved, an efficacious statutory remedy of appeal under Section 17 of the Act was available to the appellants, who ultimately availed of the same. Therefore, having regard to the facts obtaining in the case, the High Court was fully justified in declining to exercise its jurisdiction under Articles 226 and 227 of the Constitution." 24. In the case of Easland Combines, Coimbatore (supra), it has been observed as under: "18. In our view, it would be difficult to accept the aforesaid contention. It is well settled law that merely because a law causes hardship, it cannot be interpreted in a manner so as to defeat its object. It is also to be remembered that the Courts are not concerned with the legislative policy or with the result, whether injurious or otherwise, by giving effect to the language used nor it is the function of the Court where....
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....d. In opinion of this Court, the contentions raised herein touches the merits of the main application which requires elaborate examination and even considering the impugned order, it cannot be said that there is no consideration by the Tribunal and hence, it cannot be said that there is breach of principles of natural justice as contended by the petitioner and in facts arising out of this petition, such a contention deserves to be negatived while exercising extraordinary discretionary jurisdiction of this Court. 28. The petitioner having failed even before the Apex Court has filed this petition directly under Article 226 of the Constitution of India. The decision of the Apex Court in the case of Keshavlal Khemchand & Sons Pvt. Ltd. (supra) was rendered in a group of petitions and one of the petitions therein was filed by the present petitioner. In the said judgment, the Apex Court has observed thus: "74. Before closing these matters, we may also deal with one aspect of the judgment of the Gujarat High Court. The Gujarat High Court recorded that the impugned amendment is ultra vires the object of the Act. We presume for the sake of this judgment that the impugned amendment is ....
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.... purpose and object of the Act as held by the Apex Court in the case of United Bank of India (supra). As per the principles enunciated by the Apex Court in the case of Keshavlal Khemchand and Sons Pvt. Ltd. (supra), this is not a fit case for entertaining the present petition under Article 226 by bypassing the statutory remedy of appeal. It is true that alternative remedy is not an absolute bar; however, in facts of this case, the same does not warrant bypassing the statutory remedy. Even considering the facts of this case, the petitioner has been litigating before different forums including this Court and also the Apex Court and the points in issue raised by the petitioner even in this petition are entirely on merits of the main Securitization Application. The record indicates that the petitioner as well as the Bank were heard extensively by the Tribunal and therefore, considering the same, when the petitioner has an alternative efficacious remedy, the present petition under Article 226 and/or Article 227 of the Constitution of India does not deserve to be entertained keeping in mind the ratio laid down by the Apex Court in the case of United Bank of India (supra) and Kanaiyalal L....