vil Appeal No 528 NT of 1989
From the Judgment and Order dated 781987 of the Set tlement Commission IT  WT New Delhi in Settlement Appln
No 2213 77 IT
Harish N Salve and Miss Bina Gupta for the Appellant
Dr V Gauri Shankar and Miss A Subhashini for the Respond ents
The Judgment of the Court was delivered by SABYASACHI MUKHARJI J
Special leave granted
This is an appeal against the judgment and order of the Settle 338 ment Commission dated 7th August 1987
The fact that an appeal under Article 136 of the Constitution lies against the Order of the Settlement Commission is now beyond pale of any controversy in view of the decision of this Court in Commissioner of Income Tax Central Calcutta vs BN Bhattachargee and another 1979 Vol
118 Income Tax Re ports 461
The appellant had applied to the Settlement Commission for settlement of his assessment for the assess ment years 1948 49 to 1975 76 under the Income tax Act 196 1 hereinafter referred to as the Act 
That application had to be proceeded in accordance with section 245C of the Act which is as follows 245C 1 An assessee may at any stage of a case relating to him make an application in such form and in such manner and containing such particulars as may be prescribed to the Settlement Commission to have the case settled and any such application shall be disposed of in the manner hereinafter provided
 Sub sections 2 and 3 of section 245C of the Act are not relevant for our present purpose
The application made by the appellant was a composite one for settlement of his assessments for the assessment years 1948 49 to 197576
The purpose for the introduction of the Settlement Commission has been explained by this Court in the aforesaid decision
This Court observed that these are contained in Chapter XIX A of the Income tax Act 1961
The said Chapter was enacted by the Taxation Laws Amend ment Act 1975 whose beneficiaries were ordinarily those whose tax liability was astronomical and criminal culpabili ty perilous
As has been observed that this Chapter was introduced with the debatable policy fraught with dubious potentialities in the context of Third World conditions of political peculium and bureaucratic abetment that composi tion and collection of public revenue from tycoons is better than prosecution of their tax related crime and litigation for total revenue recovery
The Wanchoo Committee appointed by the Government of India had recommended this step
It appears that on 12th August 1977 the Commissioner of Income tax objected to the proposal of the appellant under section 245D1 of the Act
The Commissioner objected to the settlement for the years 1948 49 to 1959 60 but agreed to the settlement for later years
The Commissioner it ap pears accordingly made an order on 24th August 1977 re jecting the application for settlement for the years 339 1948 49 to 1959 60
The appellant on 20th September 1977 applied to the Commission to recall its earlier order dated 24th August 1977 since the same had been made without furnishing any opportunity of hearing to the appellant
Section 245D1 provides as follows 245D PROCEDURE ON RECEIPT OF AN APPLI CATION UNDER SECTION 245C 1 On receipt of an application under Section 245C the Settlement Commission shall call for a report from the Commissioner and on the basis of the materials contained in such report and having regard to the nature and circumstances of the case or the complexity of the investigation involved therein the Set tlement Commission may by order allow the application to be proceeded with or reject the application Provided that an application shall not be rejected under this sub section unless an opportunity has been given to the applicant of being heard
Provided further that an application shall not be proceeded under this sub section if the Commissioner objects to the application on being proceeded with on the ground that concealment of particulars of income on the part of the applicant or perpetration of fraud by him for evading any tax or other sum chargeable or impassable under the Indian Income tax Act 1922 XI of 1922 or under this Act has been established or is likely to be established by any Income tax authority in relation to the case
 About hearing the applicant prior to the rejection of the application this Court in the aforesaid decision at page 472 of the report held that an applicant before the Settle ment Commission was entitled to a hearing before his appli cation for composition was rejected
This Court observed that section 245D1 does not negate natural justice and in the absence of an express exclusion of the rule of audi alteram partem it is fair and indeed fundamental that no man be prejudiced by action without opportunity to show to the contrary
Natural justice must be followed
This also is the natural corollary of the decisions of this Court in MS Gill vs Chief Election Commissioner 405 and Maneka Gandhi vs Union of India 1978 1 SCC 248
The Finance Act 1979 however was amended with effect from ist April 1979 and sub section 1A was inserted to section 245D which empowered the Settlement Commission to overrule the objection of the Commissioner
Sub section 1A of section 245D reads as follows Notwithstanding anything contained in sub section 1 an application shall not be proceeded with under that subsection if the Commissioner objects to the application being proceeded with on the ground that concealment of particulars of income on the part of the applicant or perpetration of fraud by him for evading any tax or other sum chargeable or impassable under this Act has been estab lished or is likely to be established by any Income tax Authority in relation to the case Provided that where the Settlement Commission is not satisfied with the correct ness of the objection raised by the Commis sioner the Settlement Commission may after giving the Commissioner an opportunity of being heard by order allow the application to be proceeded with under sub section 1 and send a copy of its order to the Commissioner Though the Commission is empowered not to accept the objec tion of the Commissioner yet the Commissioner s objection is of lethal potency as described by Krishna Iyer J in the aforesaid decision
From the facts of this case however it has to be noted that the appellant applied to the Settlement Commission to permit him to contest the objections of the Commissioner on the proviso now inserted as mentioned above
It has to be borne in mind that this was done after the proceedings had proceeded to a certain extent
As mentioned hereinbefore the appellant had applied to the Settlement Commission as aforesaid on 22nd January 1977
On 12th August 1977 the Commissioner had tendered the objections as mentioned hereinbefore
On 24th August 1977 the Settlement Commissioner made an order rejecting the application for settlement for the assessment years 194849 to 1959 60
This had been done without hearing the appellant
On  20th September 1977 the appellant applied to the Commission to recall its order dated 24th August 1977 since it had been passed without giving an opportunity of hearing to the appellant
That application 341 was pending
In the meantime as mentioned hereinbefore on Ist April 1979 the Finance Act 1979 inserted sub section 1A to section 245D which empowered the Settlement Com mission to overrule the objections of the Commissioner
On 29th May 1979 the appellant applied to the settlement Commission to permit him to contest the objections of the Commissioner under the said proviso now inserted
The matter was taken up after a long gap in June 1987 and it was heard on 18th June 1987 and Ist July 1987
The appellant con tended that the order of 24th August 1977 should be re called and the objections of the Commissioner be dealt with in accordance with the amended provisions of section 245D1A and it also contended that if the Commissioner s objections were not to be interfered with then the entire application should be dismissed
On 7th August 1987 which is the date of impugned order in this appeal the Settlement Commission accepted the first part of the contentions and held that the applicant was entitled to a reheating since its order of 24th August 1977 had been made in violation of the principles of natural justice and also express provision of section 245D1 proviso but rejected the second part of the submission that the application for settlement made by the petitioner would have to be disposed of in accordance with law which prevailed on 24th August 1977
The Commis sion however held that since the Commissioner had objected only to some of the years under settlement the entire application would have to be rejected
It is this order which is under challenge before us
We are definitely of the opinion that on the relevant date when the order was passed that is to say 24th August 1977 the order was a nullity because it was in violation of principles of natural justice
See in this connection the principles enunciated by this Court in State of Orissa vs Dr Miss Binapani Dei and Ors  as also the observations in Administrative Law by HWR Wade 5th Edition pages 3 10 311 that the act in violation of the principles of natural justice or a quasi judicial act in violation of the principles of natural justice is void or of no value
In Ridge vs Baldwin  and Anisminic Ltd vs Foreign Compensation Commission  the House of Lords in English has made it clear that breach of natural justice nullifies the order made in breach
If that is so then the order made in violation of the princi ples of natural justice was of no value
If that is so then the application made for the settlement under section 245C was still pending before the Commission when the amendment made by Finance Act of 1979 came into effect and the said amendment being procedural it would govern the pending proceedings and the Commission would have the power to overrule the objec 342 tions of the Commissioner
Dr V Gauri Shanker appearing for the Revenue did not seriously contest that position
He accepted the position that the law as it is after the amendment authorises the Commission to consider and overrule the Commissioner s objection
He also very fairly in our opinion and rightly accepted the position that the appel lant was entitled to be heard on the Commissioner s objec tions
It appears to us therefore if that is the position then in our opinion the appellant was entitled to be heard on the objections of the Commissioner
As mentioned herein before the only short ground which was sought to be con vassed before us was whether after the amended Act the order had been rightly set aside and whether the appellant had a fight to be heard on the objections of the Commissioner
Mr Harish Salve counsel for the appellant contends that it had a right to be heard
On the other hand Dr V Gauri Shan kar learned counsel for the respondents submitted that the order proceeded on the assumption that the objections had been heard
He did not in fairness to him it must be con ceded contest that in a matter of this nature the appellant had a fight to be heard
Reading the order it appears to us that though the appellant had made submissions on the Commissioner s objections
but there was no clear opportuni ty given to the appellant to make submissions on the Commis sioner s objections in the sense to demonstrate that the Commissioner was not justified in making the objections and secondly the Commission should not accept or accede to the objections in the facts and circumstances of he present case
We are of the opinion that in view of the facts and circumstances of the case and in the context in which these objections had been made it is necessary as a concomitant of the fulfilment of natural justice that the appellant should be heard on the objections made by the Commissioner
It is true that for the relevant orders for the years for which the Commissioner had objected the concealment had been upheld in the appeal before the appropriate authorities
But it may be that in spite of this concealment it may be possi ble for the appellant to demonstrate or to submit that in disclosure of concealed income for a spread over period settlement of the entire period should be allowed and not bifurcated in the manner sought to be suggested for the Commissioner s objections
This objection the appellant should have opportunity to make
In exercise of our power of judicial review of the decision of the Settlement Commission we are concerned with the legality of procedure followed and not with validity of the order
See the observations of Lord Hailsham in Chief Constable of the North Wales Police vs Evans  Judicial Review is concerned not with the decision but with the decision making process
343 We therefore allow the appeal
We set aside the order of 7th August 1987 and remand the matter back to the Settle ment Commission to hear and dispose of the settlement peti tion made by the appellant dated 22nd January 1977 taking into consideration objections made by the Commissioner and the objections made by the appellant to the Commissioner s objections and after giving the appellant an opportunity of showing reasons and causes why the Commissioner s objections should not be accepted by the Commission
After considering the said objections of the Commissioner as well as the objections to the Commissioner s objections made by the appellant the Settlement Commission would be free to pass such orders as it considers fit and proper in accordance with the law
Since the matter is pending for a long time we do hope that the Settlement Commission will dispose of the matter as expeditiously as possible
It is not necessary for us in this appeal to express any opinion on the correct ness or otherwise of the Commissioner s objections or on the validity of the appellant s objections to the Commissioner s objections
The appeal is disposed of accordingly
There will be no order as to costs
PSS Appeal disposed of


Summary:
The appellant was one of the eight tenants in the build ing belonging to Respondent No 1 who filed eviction peti tions against all the 8 tenants on the ground that the building was bona fide required by him for immediate demoli tion and construction as contemplated under Section 211j of the Karnataka Rent Control Act
In the petition against the appellant it was specifically stated that he might occupy the premises corresponding to the original tenement in the new building after it was built
The application of Respondent No 1 for deletion of the words corresponding portion and for leave to withdraw the offer made earlier were rejected
Upon a memorandum filed by the appellant consenting to a decree being passed in pursuance of Section 211j of the Act the Court passed an order allowing the eviction petition against the appellant
After the reconstruction work commenced appellant gave a notice to Respondent No 1 of his intention to occupy the corresponding shop in the new building agreeing to pay the fair rent as contemplated under Section 27 of the Act
Meanwhile Respondent No 1 who got the eviction decree filed an appeal before the District Judge challenging the eviction decree on the ground that the Court had no juris diction to pass any decree by consent under Section 211j of the Act
The District Judge allowed the appeal
Immedi ately thereafter Respondent No 1 inducted Respondent No 2 as a tenant in a shop in the reconstructed building reasona bly corresponding to the shop occupied by the appellant in the old building and Respondent No 2 started his business in the shop
The appellant preferred a Revision Petition to the High Court against the order of the District Judge and in the Revision Petition the appellant impleaded the second Respondent also
The High Court allowed the Revision Petition and held that the decree passed by the Munsiff under Section 211j of the Act was not a 577 578 decree passed by consent but was a valid decree passed by a competent Court after application of mind
It was also held that the landlord was liable to place the tenants in vacant possession of the reconstructed building as provided in the Act and that the rights of the second Respondent were subject to the rights of the original tenant conferred on them under Sections 27 and 28 of the Act
After the High Court s order the appellant filed an application under Sections 27 and 28 of the Act before the trial court seeking permission to occupy the shop premises which was in possession of Respondent No 2
The trial court allowed the application
On revision the High Court set aside the order of the trial court taking the view that the appellant was not entitled to claim the shop occupied by Respondent No 2 and Respondent No 1 was required to give the appellant any tenement in the newly constructed build ing
Against this order of the High Court the appellant has filed this appeal by special leave
On behalf of the appellant it is claimed that he is entitled to be put in possession of the shop facing the Main Road and occupied by Respondent No 2 whereas he was of fered a shop not facing the Main Road
Allowing the appeal HELD 11 The appellant is entitled to be handed over the possesssion of the shop occupied by respondent No 2
585B 12 Under the provisions of Section 28 of the said Act the appellant became entitled to occupy a tenement in the new building
Although there is nothing specific in the language of sub section 1 of Section 28 to that effect a fair commonsense reading of the provisions of subsection 1 of Section 28 would show that a tenant against whom eviction decree has been passed under Section 211j and who has given notice as contemplated under Section 27 of that Act would be entitled to a tenement in the new building which could be said to be reasonably comparable to or to reasonably correspond to the tenement in respect of which the decree was passed
The High Court based its judgment on the consideration of a question which really was not materi al namely whether the appellant was entitled to get an identical shop in the new building whereas the real ques tion was as to whether he was entitled to a comparable shop
583G H 584A B 13 The original shop occupied by the appellant admeasured 579 17  x 9  and was facing the Main Road
The shop which re spondent No 1 offered to the appellant was admeasuring only 11  6 X 8  6 and was not facing the Main Raod but was on the rear of the new building
This shop cannot be considered as comparable to the shop originally occupied by the appel lant
Moreover it is not as if comparable shops were not available
In fact respondent No 1 constructed several shops of 9  X 16  facing the Main Road one of which he has given away in a hurried manner to respondent No 2 proba bly with a view to forestall the claim of the appellant
In these circumstances the appellant could not be compelled to accept the shop offered by respondent No 1 which is in no way comparable
The appellant was entitled to a shop reason ably corresponding to the original shop occupied by him as the circumstances would permit
It was not the appellant s case that he is entitled to an identical shoo but that he was entitled to a comparable shop
It is not open now to respondent No 2 to resist the claim of the appellant
Respondent No 2 was joined as a party in the revision petition wherein the High Court held that the rights of respondent No 2 are subject to the rights of the original tenant conferred upon him under Sections 27 and 28
This decision has not been challenged by respondent No 2 in any proceedings and has now become final as against him
584C E G 585A Sreenivasa Rao vs Narasimhaiah  referred to