Principles of Natural Justice not absolute

While holding that the principles of natural justice and the rule of fairness in administrative adjudication require the delinquent to be served with all the documents which are sought to be relied upon against him, the Supreme Court in a recent decision [Kanwar Natwar Singh v. Director of Enforcement] declared that such rules are not one of inflexible operation. Rather, the Supreme Court observed, in the instances where the adjudicating authority at the preliminary stage i.e. at the stage of formation of an opinion as to whether any inquiry at all is required to be held, does not require the authority to provide all the documents relied upon.

The Supreme Court observed, in the context of commencement of inquiry under the Foreign Exchange Management Act and generally about enforcement of laws against economic offences in the country, that “concept of fairness is not a one way street” and that “the principles of natural justice are not intended to operate as roadblocks to obstruct statutory inquiries”. In this background, it was declared that it was sufficient compliance with the law to provide the documents which would set the law in motion.

The Bench took note of the decisions on this aspect and to examine the position of law as under;

19. It is true that rule 4 does not require the Adjudicating Authority to supply copies of any documents along with the show cause notice. The rule does not require the Adjudicating Authority even to furnish any list of documents upon which reliance has been placed by him to set the law in motion. Does it mean that the Adjudicating Authority is not required to furnish the list of documents and copies thereof upon which reliance has been placed  by him to issue notice of show cause to a person against whom a complaint has been made by the authorized officer? Whether the principles of natural justice and doctrine of fairness require supply of documents upon which reliance has been placed at the stage of show cause notice? “It is not possible to lay down rigid rules as to when the principles of natural justice are to apply; nor as to the scope of extent. Everything depends on the subject matter” [see R Vs. Gaming Board for Great Britain ex p. Benaim and Khaida]. Observed Lord Denning MR.: “Their application, resting as it does upon statutory implication, must always be in conformity with the scheme of the Act and with the subject matter of the case”. Even in the application of the doctrine of fair play there must be real flexibility. There must also have some real prejudice to the complainant; there is no such thing as a merely technical infringement of natural justice. The requirements of natural justice must depend on the circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject matter to be dealt with and so forth. Can the Courts supplement the statutory procedures with requirements over and above those specified? In order to ensure a fair 1 (1970) 2 QB 417 hearing, Courts can insist and require additional steps as long a such steps would not frustrate the apparent purpose of the legislation.

20. In Lloyd Vs. McMahon, Lord Bridge observed: 

“My Lords, the so-called rules of natural justice are not engraved on tablets of stone. To use the phrase which better expresses the underlying concept, what the requirements of fairness demand when any body, domestic, administrative or judicial, has to make a decision which will affect the rights of individuals depends on the character of the decision-making body, the kind of decision it has to make and the statutory or other framework in which it operates. In particular, it is well-established that when a statute has conferred on any body the power to make decisions affecting individuals, the courts will not only require the procedure prescribed by the statute to be followed, but will readily imply so much and no more to be introduced by way of additional procedural safeguards as will ensure the attainment of fairness”.

21. As Lord Reid said in Wiseman Vs. Boardman: 

“For a long time the courts have, without objection from Parliament, supplemented procedure laid down in legislation where they have found that to be necessary for this purpose…”

22.It is thus clear that the extent of applicability of principles of natural justice depends upon the nature of inquiry, the consequences that may visit a person after such inquiry from out of the decision pursuant to such inquiry.

23. The right to fair hearing is a guaranteed right. Every person before an Authority exercising the adjudicatory powers has a right to know the evidence to be used against him. This principle is firmly established and recognized by this Court in Dhakeswari Cotton Mills Ltd. Vs. Commissioner of Income Tax, West Bengal. However, disclosure not necessarily involves supply of the material. A person may be allowed to inspect the file and take notes. Whatever mode is used, the fundamental principle remains that nothing should be used against the person which has not brought to his notice. If relevant material is not disclosed to a party, there is prima facie unfairness irrespective of whether the material in question arose before, during or after the hearing. The law is fairly well settled if prejudicial allegations are to be made against a person, he must be given particulars of that before hearing so that he can prepare his defence. However, there are various exceptions to this general rule where disclosure of evidential material might inflict serious harm on the person directly concerned or other persons or where disclosure would be breach of confidence or might be injurious to the public interest because it would involve the revelation of official secrets, inhibit frankness of comment and the detection of crime, might make it impossible to obtain certain clauses of essential information at all in the future [See R Vs. Secretary of State for Home Department, ex. p. H].

24. The concept of fairness may require the Adjudicating Authority to furnish copies of those documents upon which reliance has been placed by him to issue show cause notice requiring the noticee to explain as to why an inquiry under Section 16 of the Act should not be initiated. To this extent, the principles of natural justice and concept of fairness are required to be read into rule 4(1) of the Rules. Fair procedure and the principles of natural justice are in built into the Rules. A noticee is always entitled to satisfy the Adjudicating Authority that those very documents upon which reliance has been placed do not make out even a prima facie case requiring any further inquiry. In such view of the matter, we hold that all such documents relied on by the Authority are required to be furnished to the noticee enabling him to show a proper cause as to why an inquiry should not be held against him though the Rules do not provide for the same. Such a fair reading of the provision would not amount to supplanting the procedure laid down and would in no manner frustrate the apparent purpose of the statute.

PART V : DUTY OF ADEQUATE DISCLOSURE 

25. The real question that arises for consideration is whether the Adjudicating Authority even at the preliminary stage is required to furnish copies of all the documents in his possession to a noticee even for the purposes of forming an opinion as to whether any inquiry at all is required to be held. In this regard, learned senior counsel for the appellant pressed into service the doctrine of duty of adequate disclosure which according to him is an essential part of the principles of natural justice and doctrine of fairness. A bare reading of the provisions of the Act and the Rules do not support the plea taken by the appellants in this regard. Even the principles of natural justice do not require supply of documents upon which no reliance has been placed by the Authority to set the law into motion. Supply of relied on documents based on which the law has been set into motion would meet the requirements of principles of natural justice. No Court can compel the Authority to deviate from the statute and exercise the power in altogether a different manner than the prescribed one. As noticed, a reasonable opportunity of being heard is to be provided by the Adjudicating Authority in the manner prescribed for the purpose of imposing any penalty as provided for in the Act and not at the stage where the Adjudicating Authority is required merely to decide as to whether an inquiry at all be held into the matter. Imposing of penalty after the adjudication is fraught with grave and serious consequences and therefore, the requirement of providing a reasonable opportunity of being heard before imposition of any such penalty is to be met. In contradistinction, the opinion formed by the Adjudicating Authority whether an inquiry should be held into the allegations made in the complaint are not fraught with such grave consequences and therefore the minimum requirement of a show cause notice and consideration of cause shown would meet the ends of justice. A proper hearing always include, no doubt, a fair opportunity to those who are parties in the controversy for correcting or contradicting anything prejudicial to their view. Lord Denning has added: 

“If the right to be heard is to be a real right which is worth anything, it must carry with it a right in the accused man to know the case which is made against him. He must know what evidence is given and what statements have been made affecting him: and then he must be given a fair opportunity to correct or contradict them” [see Kanda Vs. Government of Malaya].

26. In the present case, the inquiry against the noticee is yet to commence. The evidence as may be available upon which the Adjudicating Authority may place reliance, undoubtedly, is required to be furnished to the person proceeded against at the second stage of inquiry into allegations of contravention. It is at that stage, the Adjudicating Authority is not only required to give an opportunity to such person to produce such documents as evidence as he may consider relevant to the inquiry, but also enforce attendance of any person acquainted with the facts of the case to give evidence or to produce any document which in its opinion may be useful for or relevant to the subject matter of the inquiry. It is no doubt true that natural justice often requires the disclosure of the reports and evidence in the possession of the deciding Authority and such reports and evidence relevant to the subject matter of the inquiry may have to be furnished unless the scheme of the Act specifically prohibits such disclosure.

27. However, the learned senior counsel for the appellants in support of his contention that there is a duty cast on the Adjudicating Authority to disclose and supply copies of all the documents that may be available with him to the noticee, placed reliance on State Inspector of Police, Vishakhapatnam Vs. Surya Sankaram Karri which is not an authority for the proposition canvassed. It was a case where the Court found that investigation into an offence punishable under Section 13(1)(e) of the Prevention of Corruption Act was undertaken without the required authorization of the Superintendent of Police. In that context, this Court observed that the manner in which “the investigation was conducted, is condemnable. The least that a court of law would expect from the prosecution is that the investigation would be a fair one. It would not only be carried out from the stand of the prosecution, but also the defence, particularly, in view of the fact that the onus of proof may shift to the accused at a later stage”. Shri Lalit, strongly relied upon the observations so made by this Court which in our considered opinion, are not relevant for our purpose. One cannot pick a sentence from here and there in the Judgment and characterize it to be the ratio of the case. The observations made in that case were in the context of criminal investigation which was found to be unfair and illegal.

28. In Union of India Vs. Ranu Bhandari this Court found that some of the vital documents which have a direct bearing on the detention order, had not been placed before the detaining Authority and the detenu was entitled to question such omission. It was the case of the detenu that if his representation and the writ petition had been placed before the detaining Authority which according to him contained his entire defence to the allegations made against him, the same may have weighed with the detaining Authority as to the necessity of issuing the order of detention at all. It is under those circumstances, this Court expressed its view that on account of non-supply of those documents, the detenu was prevented from making an effective representation against his detention. In fact, the said decision is an authority for the proposition that “when a detention order is passed, copies of all the documents, both against the detenu and in his favour, which had been relied upon by the detaining Authority for reaching the satisfaction that in the interest of the State and its citizens the preventive detention of the detenu is necessary, must be supplied to the detenu to enable him to make an effective representation against the detention order in compliance with Article 22(5) of the Constitution, irrespective of whether he had knowledge of the same or not. 

29. The learned senior counsel further relied upon the following observations made by this Court in Dwarka Prasad Agarwal (Dead) by LRs. & Anr. Vs. B.D. Agarwal & Ors.:

“The very basis upon which a judicial process can be resorted to is reasonableness and fairness in a trial. Under our Constitution as also the International Treaties and Conventions, the right to get a fair trial is a basic fundamental /human right. Any procedure which comes in the way of a party in getting a fair trial would be violative of Article 14 of the Constitution of India. Right to a fair trial by an independent and impartial Tribunal is part of Article 6(1) of the European Convention for the Protection of Human Rights and Fundamental Freedoms 1950.”

We fail to appreciate as to how the above observations are of any relevance to resolve the issue that arises for our consideration in the present case. It is not the case of the appellants that the procedure prescribed under Rule 4 of the Rules comes in their way in getting a fair trail and therefore the said provision is violative of Article 14 of the Constitution of India. It is not the case that the Adjudicating Authority constituted under the present Act is not an independent and impartial tribunal.

30. In Tribhuvandas Bhimji Zaveri & Anr. Vs. Collector of Central Excise, Officers of the Income Tax Department raided the business premises of the appellant and prepared an inventory of the stock of gold and gold ornaments found in the premises. This was followed by a show cause notice as to why penal action should not be taken against the appellants. The appellants by their letter had requested the authorities to furnish a certified copy of the check list prepared at the time of raid with a view to enabling them to check and verify the particulars. In reply thereto, the Income Tax Officer expressed his inability to provide the required documents on the ground that they were not readily available with the Officer. It is under those circumstances, this Court observed that the failure to supply important piece of information to the appellants has prejudiced the appellants and to this extent the principles of natural justice would stand violated. From the facts in that case, it is clear that particular documents containing important piece of information which would have enabled the noticee therein to offer a proper explanation were required to be made available. The nature of the document, its relevancy being a document prepared at the time of raid and its mention in the show cause notice were taken into consideration. It was a basic document based on which the law was set into motion against the appellants therein. It is for that reason this Court was of the view that such an important document could not have been withheld from the appellants therein.

31. In support of his submissions the learned senior counsel has also referred us to the decision of this Court in State of M.P. Vs. Chintaman Sadashiva Vaishampayan. In that case, the charged police officer wanted the documents which were relevant and would have been of invaluable assistance to him in making his defence and cross-examining the witness who gave evidence against him in the Departmental Enquiry. It is in that context this Court observed that 

“it is difficult and inexpedient to lay down any general rules; whether or not the officer in question has had a reasonable opportunity must always depend on the facts in each case. The only general statement that can be safely made in this connection is that the departmental enquiries should observe rules of natural justice, and that if they are fairly and properly conducted the decisions reached by the enquiry officers on the merits are not open to be challenged on the ground that the procedure followed was not exactly in accordance with that which is observed in Courts of law”. 

There is no dispute with this proposition.

32. In our opinion, these decisions do not assist the appellants’ case in any manner whatsoever because the documents which the appellants wanted in the present case are the documents upon which no reliance was placed by the Authority for setting the law into motion. Observations of the Courts are not to be read as Euclid’s theorems nor as provisions of the statute. The observations must be read in the context in which they appear. A line or a word in a judgment cannot be read in isolation or as if interpreting a statutory provision to impute a different meaning to the observations [see Haryana Financial Corporation Vs. Jagdamba Oil Mills].

33. One more decision upon which heavy reliance has been placed by the learned senior counsel is RvH/RvC13. We fail to appreciate as to how the said judgment would render any assistance and support the case set up by the appellants in the present proceedings. In that case, the defendants were charged with criminal conspiracy to supply a class A drug. The prosecution case was based on police surveillance evidence. In pre-trial proceedings the defendants made far-reaching requests for disclosure, including all material relating to any covert human intelligence sources involved in the investigation. At a preliminary hearing, it appeared that a public interest immunity inquiry would be necessary as the prosecution wished to withhold documents from disclosure to the defence on that ground. The Judge ruled, without having looked in detail at the documents provided by the prosecution, that unless independent counsel were appointed, so as to introduce an adversarial element into the public interest immunity inquiry, there was a risk that the trial would be perceived to be unfair and therefore violate Article 6(1) of the European Convention for the Protection of Human Rights and Fundamental Freedoms, 1950 (as set out in Schedule 1 to the Human Rights Act 1998) (the convention), which provided for the right to a fair trial. The Judge, therefore, ordered that special counsel should be appointed. The Crown’s appeal against the Judge’s ruling was successful. The defendants appealed to the House of Lords contending inter alia that it was incompatible with Article 6 of the convention for a Judge to rule on a claim to public interest immunity in the absence of adversarial argument on behalf of the accused where the material which the prosecution was seeking to withhold was or might be relevant to a disputed issue of fact which the Judge had to decide in order to rule on an application which would effectively determine the outcome of the proceedings. The House of Lords held that there is a golden rule that full disclosure of any material held by the prosecution which weakened its case or strengthened that of the defendants should be disclosed to the defence. In circumstances where such material could not be disclosed to the defence, fully or even at all, without the risk of serious prejudice to an important public interest, some derogation from the golden rule could be justified, but such derogation was always to be the minimum necessary to protect the public interest in question and had never to imperil the overall fairness of the trial.

34. This decision was followed by Attorney General’s guidelines and disclosure in which it is clearly explained that disclosure is one of the most important aspects in the criminal justice system and the application of proper and fair disclosure is a vital component of a fair criminal justice system. This amounts to no more and no less than a proper application of the Criminal Procedure and Investigations Act, 1996 (CPIA), recently amended by the Criminal Justice Act, 2003. The scheme set out in the Criminal Procedure and Investigations Act, 1996 is held to be designed to ensure that there is fair disclosure and material which may be relevant to an investigation and which does not form part of the prosecution case. The disclosure under the Act should assist the accused in the timely preparation and presentation of their case and assist the case to focus on all the relevant issues in the trial.

35. It appears that those Acts recognize rights of accused persons in a criminal case to a fair trial. It is clear that disclosure of unused material in criminal proceedings in United Kingdom is regulated by the provisions of those Acts and applicable to criminal trials where the accused are charged with criminal offences. Duty of disclosure of unused material is not a definite concept to be applied in any and every case in this country. There is no such Act or law as in United Kingdom, nor any procedure prescribed for disclosure of unused material in criminal proceedings. In the present case, the appellants are not defendants in any criminal trial. The judgment has no application as to the fact situation and the law applicable in United Kingdom is not applicable to either the adjudicatory proceedings or even criminal trials in this country.

36. On a fair reading of the statute and the Rules suggests that there is no duty of disclosure of all the documents in possession of the Adjudicating Authority before forming an opinion that an inquiry is required to be held into the alleged contraventions by a noticee. Even the principles of natural justice and concept of fairness do not require the statute and the Rules to be so read. Any other interpretation may result in defeat of the very object of the Act. Concept of fairness is not a one way street. The principles of natural justice are not intended to operate as roadblocks to obstruct statutory inquiries. Duty of adequate disclosure is only an additional procedural safeguard in order to ensure the attainment of the fairness and it has its own limitations. The extent of its applicability depends upon the statutory framework. Hegde, J. speaking for the Supreme Court propounded: 

“In other words, they (principles of natural justice) do not supplant the law of the land but supplement it” [see A.K. Kraipak Vs. Union of India]. Its essence is good conscience in a given situation; nothing more but nothing less [see Mohinder Singh Gill Vs. Chief Election Commissioner].

Have a look at the decision.

Post Script Rejoinder

Having written this post we came across a recently reported decision of a Full Bench of the Delhi High Court wherein similar principle has been reiterated. In as much as this decision in ANDALEEB SEHGAL v. UNION OF INDIA [2010 173 DLT 296] is on the same lines of this post, we are adding the same in this post itself for the benefit of our readers. The High Court therein held that the principles of natural justice could be regulated or restricted by statute in the following terms;

27. In this regard, it is apt to refer to the decision in The Regional Provident Fund Commissioner, Bombay v. Shree Krishna Metal Manufacturing Co. & Anr., AIR 1962 SC 1536, wherein it has been held as follows:

“The ordinary rule of grammar on which a construction is based cannot be treated as an invariable rule which must always and in every case be accepted without regard to the context. If the context definitely suggests that the relevant rule of grammar is inapplicable, then the requirement of the context must prevail over the rule of grammar.” [Quoted from the placitum]

28. We have referred to the aforesaid decisions only to appreciate that rule of last antecedent, unless the context otherwise suggests, should not be ignored. In the case at hand, the phrases used in the Section has to be given due weightage.

29. In view of the aforesaid analysis, we have no scintilla of doubt that when resort is taken to Section 11 of the Act, it does not necessarily result in the application of Sections 8B and 8C of the Act to the proceedings before the enquiry authority / commission when the power of exclusion or non-inclusion has been specifically exercised by the competent government. 30. The next question that requires to be dwelled upon is as to whether any right to demand to be represented by a legal practitioner and to cross-examine the witnesses examined by the Commission is available to a noticee independent of Sections 8B and 8C of the Act before an Inquiry Authority. There can be no trace of doubt that Sections 8B and 8C fundamentally pertain to the applicability of the rules of natural justice. By virtue of the notification issued under Section 11, the said provisions have not been made applicable to the Authority / Commission. Thus, there is a deliberate exclusion. The question that emanates for consideration is when there is an exclusion of this nature, whether the doctrine of audi alteram partem would get attracted. In this regard, we think it seemly to notice few citations in the field.

31. In Maneka Gandhi v. Union of India and another (1978) 1 SCC 248, the Apex Court, while posing the question as to how far natural justice is an essential element of "procedure established by law", has held thus:

“….. There are certain well recognised exceptions to the audi alteram partem rule established by judicial decisions and they are summarised by S.A. de Smith in Judicial Review of Administrative Action, 2nd ed., at pages 168 to 179. If we analyse these exceptions a little closely, it will be apparent that they do not in any way militate against the principle which requires fair play in administrative action. The word 'exception' is really a misnomer because in these exclusionary cases, the audi alteram partem rule is held inapplicable not by way of an exception to "fair play in action", but because nothing unfair can be inferred by not affording an opportunity to present or meet a case. The audi alteram partem rule is intended to inject justice into the law and it cannot be applied to defeat the ends of justice, or to make the law 'lifeless, absurd, stultifying, self-defeating or plainly contrary to the common sense of the situation'. Since the life of the law is not logic but experience and every legal proposition must, in the ultimate analysis, be tested on the touchstone of pragmatic realism, the audi alteram partem rule would, by the experiential test, be excluded, if importing the right to be heard has the effect of paralysing the administrative process or the need for promptitude or the urgency of the situation so demands. But at the same time it must be remembered that this is a rule of vital importance in the field of administrative law and it must not be jettisoned save in very exceptional circumstances where compulsive necessity so demands. It is a wholesome rule designed to secure the rule of law and the Court should not be too ready to eschew it in its application to a given case. True it is that in questions of this kind a fanatical or doctrinaire approach should be avoided, but that does not mean that merely because the traditional methodology of a formalised hearing may have the effect of stultifying the exercise of the statutory power, the audi alteram partem should be wholly excluded. The Court must make every effort to salvage this cardinal rule to the maximum extent permissible in a given case. It must not be forgotten that "natural justice is pragmatically flexible and is amenable to capsulation under the compulsive pressure of circumstances". The audi alteram partem rule is not cast in a rigid mould and judicial decisions establish that it may suffer situational modifications. The core of it must, however, remain, namely, that the person affected must have a reasonable opportunity of being heard and the hearing must be a genuine hearing and not an empty public relations exercise. That is why Tucker, L.J., emphasised in Russel v. Duke of Norfolk [1949] 1 All Eng. Reports 109 that "whatever standard of natural justice is adopted, one essential is that the person concerned should have a reasonable opportunity of presenting his case".

In the said case, Kailasm, J, while dealing with the concept of applicability of natural justice, referred to the decision in Union of India v. J. N. Sinha (1970) 2 SCC 458 and held as follows:

“…. Rules of natural justice cannot be equated with the fundamental rights. As held by the Supreme Court in Union of India v. J. N. Sinha (1970) I SCR 791, that "Rules of natural justice are not embodied rules nor can they be elevated to the position of Fundamental Rights. Their aim is to secure justice or 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. If a statutory provision can be read consistently with the principles of natural justice, the courts should do so. But if a statutory provision either specifically or by necessary implication excludes the application of any rules of natural justice then the court cannot ignore the mandate of the legislature or the statutory authority and read into the concerned provision the principles of natural justice." So also the right to be heard cannot be presumed when in the circumstances of the case, there is paramount need for secrecy or when a decision will have to be taken in emergency or when promptness of action is called for where delay would defeat the very purpose or where it is expected that the person affected would take an obstructive attitude. To a limited extent it may be necessary to revoke or to impound a passport without notice if there is real apprehension that the holder of the passport may leave the country if he becomes aware of any intention on the part of the passport authority or the Government to revoke or impound the passport. But that by itself would not justify denial of an opportunity to the holder of the passport to state his case before a final order is passed. It cannot be disputed that the legislature has not by express provision excluded the right to be heard….”

32. In Swadeshi Cotton Mills v. Union of India, (1981) 1 SCC 664, the majority speaking through Sarkaria, J. adverted to the concept of basic facets of natural justice, the twin principles, namely, audi alteram partem and nemo judex in re sua, the decisions rendered in Maneka Gandhi (supra), State of Orissa v. Dr. Bina Pani Dei, AIR 1967 SC 1269 and A.K. Kraipak v. Union of India, (1969) 2 SCC 262 and eventually held thus:

“31. The rules of natural justice can operate only in areas not covered by any law validly made. They can supplement the law but cannot supplant it (Per Hegde, J. in A.K. Kraipak, (1969) 2 SCC 262. If a statutory provision either specifically or by inevitable implication excludes the application of the rules of natural justice, then the court cannot ignore the mandate of the legislature. Whether or not the application of the principles of natural justice in a given case has been excluded, wholly or in part, in the exercise of statutory power, depends upon the language and basic scheme of the provision conferring the power, the nature of the power, the purpose for which it is conferred and the effect of the exercise of that power. (See Union of India v. Col. J.N. Sinha, (1970) 2 SCC 458.

33. The next general aspect to be considered is : Are there any exceptions to the application of the principles of natural justice, particularly the audi alteram partem rule ? We have already noticed that the statute conferring the power, can by express language exclude its application. Such cases do not present any difficulty. However, difficulties arise when the statute conferring the power does not expressly exclude this rule but its exclusion is sought by implication due to the presence of certain factors : such as, urgency, where the obligation to give notice and opportunity to be heard would obstruct the taking of prompt action of a preventive or remedial nature…….” [Emphasis added]

33. In Liberty Oil Mills & Ors. v. Union of India & Ors., (1984) 3 SCC 465, a three-Judge Bench of the Apex Court has held thus:

“15. …We do not think that it is permissible to interpret any statutory instrument so as to exclude natural justice, unless the language of the instrument leaves no option to the Court.”

34. In Union of India & Anr. v. Tulsiram Patel, (1985) 3 SCC 398 = AIR 1985 SC 1416, the Apex Court has expressed thus:

100. In Swadeshi Cotton Mills v. Union of India, (1981) 1 SCC 664 Chinnappa Reddy, J., in his dissenting judgment summarized the position in law on this point as follows (at page 591): (SCC p.712, para 106)

The principles of natural justice have taken deep root in the judicial conscience of our people, nurtured by Binapani, Kraipak, Mohinder Singh Gill, Maneka Gandhi etc. etc. They are now considered so fundamental as to be 'implicit in the concept of ordered liberty' and, therefore, implicit in every decision-making function, call it judicial, quasi-judicial or administrative. Where authority functions under a statute and the statute provides for the observance of the principles of natural justice in a particular manner, natural justice will have to be observed in that manner and in no other. No wider right than that provided by statute can be claimed nor can the right be narrowed. Where the statute is silent about the observance of the principles of natural justice, such statutory silence is taken to imply compliance with the principles of natural justice. The implication of natural justice being presumptive it may be excluded by express words of statute or by necessary intendment. Where the conflict is between the public interest and the private interest, the presumption must necessarily be weak and may, therefore, be readily displaced.

101. Not only, therefore, can the principles of natural justice be modified but in exceptional cases they can even be excluded. There are well-defined exceptions to the nemo judex in causa sua rule as also to the audi alteram partem rule. The nemo judex in causa sua rule is subject to the doctrine of necessity and yields to it as pointed out by this Court in J. Mohapatra and Co. v. State of Orissa, (1984) 4 SCC 103. So far as the audi alteram partem rule is concerned, both in England and in India, it is well established that where a right to a prior notice and an opportunity to be heard before an order is passed would obstruct the taking of prompt action, such a right can be excluded. This right can also be excluded where the nature of the action to be taken, its object and purpose and the scheme of the relevant statutory provisions warrant its exclusion; nor can the audi alteram partem rule be invoked if importing it would have the effect of paralysing the administrative process or where the need for promptitude or the urgency of taking action so demands, as pointed out in Maneka Gandhi's case at page 681. If legislation and the necessities of a situation can exclude the principles of natural justice including the audi alteram partem rule, a fortiori so can a provision of the Constitution, for a Constitutional provision has a far greater and all-pervading sanctity than a statutory provision….”

35. In S.N. Mukherjee v. Union of India (1990) 4 SCC 594: AIR 1990 SC 1984, the Constitution Bench, while dealing with the applicability of the principles of natural justice, has opined thus:

“39. …. The rules of natural justice are not embodied rules. The extent of their application depends upon the particular statutory framework whereunder jurisdiction has been conferred on the administrative authority. With regard to the exercise of a particular power by an administrative authority including exercise of judicial or quasi-judicial 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 affect 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.

40. For the reasons aforesaid, it must be concluded that except in cases where the requirement has been dispensed with expressly or by necessary implication, an administrative authority exercising judicial or quasi-judicial functions is required to record the reasons for its decision.” [Emphasis supplied]

36. In Union of India and another v. W.N. Chadha 1993 Supp. (4) SCC 260 their Lordships, while adverting to the issue of applicability of the doctrine of natural justice, have ruled thus:

“80. The rule of audi alteram partem is a rule of justice and its application is excluded where the rule will itself lead to injustice. In S.A. Smith‟s Judicial Review of Administrative Action, (4th Edn.) at page 184, it is stated that in administrative law, a prima facie right to prior notice and opportunity to be heard may be held to be excluded by implication in the presence of some factors, singly or in combination with another. Those special factors are mentioned under items (1) to (10) under the heading “Exclusion of the audi alteram partem rule”.

81. Thus, there is exclusion of the application of audi alteram partem rule to cases where nothing unfair can be inferred by not affording an opportunity to present and meet a case. This rule cannot be applied to defeat the ends of justice or to make the law “lifeless, absurd, stultifying and self-defeating or plainly contrary to the common sense of the situation” and this rule may be jettisoned in very exceptional circumstances where compulsive necessity so demands. 82. Bhagwati, J. (as the learned Chief Justice then was) in Maneka Gandhi speaking for himself, Untawalia and Murtaza Fazal Ali, JJ. has stated thus: (SCC p. 290, para 14)

“…. Now, it is true that since the right to prior notice and opportunity of hearing arises only by implication from the duty to act fairly, or to use the words of Lord Morris of Borth-y-Gest, from "fair play in action", it may equally be excluded where, having regard to the nature of the action to be taken, its object and purpose and the scheme of the relevant statutory provision, fairness in action does not demand its implication and even warrants its exclusion.”

83. Thus, it is seen from the decision in Maneka Gandhi that there are certain exceptional circumstances and situations whereunder the application of the rule of audi alteram partem is not attracted.”

37. After so stating, their Lordships referred to a passage from Paul Jackson in Natural Justice and various other decisions and opined as follows: “

89. Applying the above principle, it may be held that when the investigating officer is not deciding any matter except collecting the materials for ascertaining whether a prima facie case is made out or not and a full enquiry in case of filing a report under Section 173(2) follows in a trial before the Court or Tribunal pursuant to the filing of the report, it cannot be said that at that stage rule of audi alteram partem superimposes an obligation to issue a prior notice and hear the accused which the statute does not expressly recognize. The question is not whether audi alteram partem is implicit, but whether the occasion for its attraction exists at all.”

38. In D.K. Yadav v. J.M.A. Industries Ltd. (1993) 3 SCC 259, the Apex Court has held as follows:

“7. …Particular statute or statutory rules or orders having statutory flavour may also exclude the application of the principles of natural justice expressly or by necessary implication. In other respects the principles of natural justice would apply unless the employer should justify its exclusion on given special and exceptional exigencies.”

39. In Dr. Rash Lal Yadav v. State of Bihar & Ors., (1994) 5 SCC 267, the Apex Court, after referring to the decisions in A.K. Kraipak (supra), Dr. Bina Pani Dei (supra), J. N. Sinha (supra), Swadeshi Cotton Mills (supra) and Mohinder Singh Gill v. Chief Election Commissioner, (1978) 1 SCC 405, 439, held as follows:

“9. What emerges from the above discussion is that unless the law expressly or by necessary implication excludes the application of the rule of natural justice, courts will read the said requirement in enactments that are silent and insist on its application even in cases of administrative action having civil consequences. However, in this case, the High Court has, having regard to the legislative history, concluded that the deliberate omission of the proviso that existed in sub-section (7) of Section 10 of the Ordinance (1980) while re-enacting the said sub-section in the Act, unmistakably reveals the legislature's intendment to exclude the rule of giving an opportunity to be heard before the exercise of power of removal. The legislative history leaves nothing to doubt that the legislature did not expect the State Government to seek the incumbent's explanation before exercising the power of removal under the said provision. We are in complete agreement with the High Court's view in this behalf.”

40. In Mangilal v. State of M.P., (2004) 2 SCC 447, while dealing with the principle of applicability of natural justice in awarding compensation under Section 357(4) of the Code of Criminal Procedure, 1973, their Lordships have observed thus:

“10. ...It has always been a cherished principle. Where the statute is silent about the observance of the principles of natural justice, such statutory silence is taken to imply compliance with the principles of natural justice where substantial rights of parties are considerably affected. The application of natural justice becomes presumptive, unless found excluded by express words of statute or necessary intendment…”

41. The learned counsel for the petitioner has submitted that when his reputation is likely to be affected, the doctrine of audi alteram partem has to be made applicable, otherwise he would be condemned unheard. It is urged by him that Article 21 of the Constitution of India in its expanse includes reputation. In this regard, he has drawn inspiration from the decision in Board of Trustees of the Port of Bombay v. Dilipkumar Raghavendranath Nadkarni, (1983) 1 SCC 124. The learned counsel has also commended us to the decision in Lal Krishna Advani (supra) wherein it has been held thus:

“8. It may be noticed that the amendment was brought about, about 20 years after passing of the main Act itself. The experience during past two decades must have made the legislature realize that it would be necessary to notice a person whose conduct the Commission considers necessary to inquire into during the course of the inquiry or whose reputation is likely to be prejudicially affected by the inquiry. It is further provides that such a person would have a reasonable opportunity of being heard and to adduce evidence in his defence. Thus the principles of natural justice were got inducted in the shape of a statutory provision. It is thus incumbent upon the Commission to give an opportunity to a person, before any comment is made or opinion is expressed which is likely to prejudicially affect that person. Needless to emphasise that failure to comply with principles of natural justice renders the action non est as well as the consequences thereof.”

42. To buttress the submission that the violation of the rules of natural justice in any sphere would destroy the marrow of justice dispensation system, he has placed reliance upon the decisions rendered in A.K. Kraipak (supra), Mohinder Singh Gill (supra), Dr. Bina Pani Dei (supra), State of Kerala v. K.T. Shaduli Grocery Dealer, AIR 1977 SC 1627, S.L. Kapoor v. Jagmohan & Ors., (1980) 4 SCC 379 and Canara Bank & Ors. v. Debasis Das & Ors., (2003) 4 SCC 557. In Debasis Das (supra), the Apex Court, while dealing with the concept of natural justice, has held thus:

“20. Natural justice has been variously defined by different Judges. A few instances will suffice. In Drew v. Drew and Lebura (1855) 2 Macq. 1, Lord Cranworth defined it as “universal justice”. In James Dunber Smith v. Her Majesty the Queen (1877-78) 3 AC 614 (PC) Sir Robort P. Collier, speaking for the Judicial Committee of Privy Council, used the phrase “the requirements of substantial justice”, while in Arthur John Spackman v. Plumstead District Board of Works (1885) 10 AC 229 (AC at p.240), the Earl of Selbourne, S.C. preferred the phrase “the substantial requirement of justice”. In Vionet v. Barrett (1885) 55 LJRD 39 (LJRD at p.41), Lord Esher, M.R. defined natural justice as “the natural sense of what is right and wrong”. While, however, deciding Hookings v. Smethwick Local Board of Health (1890) 24 QBD 712, Lord Esher, M.R. instead of using the definition given earlier by him in Vionet case (supra) chose to define natural justice as “fundamental justice”. In Ridge v. Baldwin (1963) 1 WB 539 (QB at p.578), Harman L.J., in the Court of Appeal countered natural justice with “fair-play in action”, a phrase favoured by Bhagawati, J. in Maneka Gandhi (supra). In H.K. (An infant), Re (1967) 2 QB 617 (QB at p.630), Lord Parker, C.J. preferred to describe natural justice as “a duty to act fairly”. In Fairmount Investments Ltd. v. Secy. to State for Environment (1976) 1 WLR 1255 Lord Russell of Killowen somewhat picturesquely described natural justice as “a fair crack of the whip” while Geoffrey Lane, L.J. in R. v. Secy. of State for Home Affairs, ex p Hosenball (1977) 1 WLR 766 preferred the homely phrase “common fairness”.

21. How then have the principles of natural justice been interpreted in the courts and within what limits are they to be confined? Over the years by a process of judicial interpretation two rules have been evolved as representing the principles of natural justice in judicial process, including therein quasi judicial and administrative process. They constitute the basic elements of a fair hearing, having their roots in the innate sense of man for fair play and justice which is not the preserve of any particular race or country but is shared in common by all men. The first rule is “nemo judex in causa sua” or “nemo debet esse judex in propria causa sua” as stated in Earl of Derby’s case (1605) 12 Co.Rep.114 that is, “no man shall be a judge in his own cause”. Coke used the form “aliquis non debet esse judex in propria causa quia non protest esse judex et pars” (Co. Litt. 1418), that is, “no man ought to be a judge in his own case, because he cannot act as judge and at the same time be a party”. The form “nemo potest esse simul actor et judex”, that is, “no one can be at once suitor and judge” is also at times used. The second rule is “audi alteram partem”, that is, “hear the other side”. At times and particularly in continental countries, the form “audietur et altera par”' is used, meaning very much the same thing. A corollary has been deduced from the above two rules and particularly the audi alteram partem rule, namely “qui a liquid statuerit, parte inaudita altera acquum licet dixerit, haud acquum fecerit” that is, “he who shall decide anything without the other side having been heard, although he may have said what is right, will not have been what is right” [See Boswel's case (1605) 6 Co.Rep. 48b, (Co Rep at p.52-a) or in other words, as it is now expressed, “justice should not only be done but should manifestly be seen to be done”. whenever an order is struck down as invalid being in violation of principles of natural justice, there is no final decision of the case and fresh proceedings are left upon (sic open). All that is done is to vacate the order assailed by virtue of its inherent defect, but the proceedings are not terminated.”

43. The learned counsel has also placed heavy reliance on the decision in Vallimayil Ammal v. The Commission of Inquiry, Chidambaram, [1968] ILR (Madras) 188. In the said case, the learned Single Judge, while interpreting Section 11 of the Commissions of Inquiry Act, 1952 with all the powers conferred by Sections 4, 5 and 8 of the Act for submitting the report with its findings, held that when the authority making a decision which might affect the rights of the parties was required to adopt a judicial approach even though the decision by itself might not take effect, the proceeding would be quasi-judicial. The principles of natural justice would be applicable also to authorities who are called upon to submit a report for further consideration by some other body. The learned single Judge further held that when the interest of a person is likely to be affected and when the reputation is likely to be affected, fair opportunity had to be granted.

44. On a studied scrutiny of the enunciation of law in the field, it is clear as crystal that the principles of natural justice are presumed to be attracted unless they are expressly excluded or its exclusion can be inferred or deduced by necessary implication. In the case at hand, Sections 8B and 8C were incorporated in the statute book in the year 1971. It has a flavour and fragrance of the applicability of the principles of natural justice or to put it differently, the principles of natural justice have been statutorily embodied. The submission of Mr. Vaidyanathan, learned senior counsel, is that when the statute introduces or specifically incorporates the principles of natural justice, it has the power and the authority to exclude the same and once the provisions are not made applicable by a specific notification, there can be no shadow of doubt that the principles of natural justice stand excluded. Combating the said submission, it is proponed by Mr. Sawhney, learned senior counsel appearing for the petitioner, that if the decisions in Vallimayil Ammal (supra) and Lal Krishna Advani (supra) are properly appreciated, it would clearly convey that in such situations the doctrine of audi alteram partem cannot be excluded and the basic facets of natural justice would come into play despite the exclusion by Sections 8B and 8C of the Act.

45. The aforesaid submission of the learned counsel for the petitioner does not impress us on two counts, namely, when a statutory provision has been introduced into the statute book including the doctrine of natural justice and there is an authority conferred on the competent government to apply certain provisions and the said provisions have deliberately not been included which amounts to its exclusion, the principles of natural justice which, in law, is excludable cannot be brought in by taking recourse to the factum of presumptive applicability. Quite apart from the above, we are disposed to think that when Sections 8B and 8C of the Act specifically provide for grant of reasonable opportunity of being heard and grant of permission for cross-examination and representation by the legal practitioner, in view of the exclusion of the said provisions, it is inconceivable to incorporate the same.