Case: Kumari Shrilekha Vidyarthi Etc. Etc Vs. State Of U.P. And Ors


Decision reasoning: 1[ds]( 26. ) A useful treatment of the subject is to be found in (1990) 106 LQR at pages 277 to 292 in an article Judicial Review and Contractual Powers of Public Authorities. The conclusion drawn in the article on the basis of recent English decisions is that public law principles designed to protect the citizens should apply because of the public nature of the body, and they may have some role in protecting the public interest. The trend now is towards judicial review of contractual powers and the other activities of the Government. Reference is made also to the recent decision of the Court of Appeal in Jones v. Swansea City Council, (1990) 1 WLR 54, where the Courts clear inclination to the view that contractual powers should generally be reviewable is indicated, even though the Court of Appeal faltered at the last step and refrained from saying so. It is significant to note that emphasis now is on reviewability of every State action because it stems not from the nature of function, but from the public nature of the body exercising that function; and all powers possessed by a public authority, howsoever conferred, are possessed solely in order that it may use them for the public good. The only exception limiting the same is to be found in specific cases where such exclusion may be desirable for strong reasons of public policy. This, however, does not justify exclusion of reviewability in the contractual field involving the State since it is no longer a mere private activity to be excluded from public view or scrutiny.(32. ) In another recent decision in Mahabir Auto Stores v. Indian Oil Corporation (1990) 1 JT 363 : (AIR 1990 SC 1031 ), it was held that Art. 14 was attracted even where the aggrieved person did not have the benefit of either a contractual or a statutory right. The grievance in that case was made by a person who was not a dealer of the Indian Oil Corporation but merely claimed to have been treated as one by a long course of conduct. It was held by the learned Chief Justice that the impugned act of the Indian Oil Corporation was an administrative decision land could be impeached on the ground that it was arbitrary or violative of Art. 14 of the Constitution. It was emphasised that the Indian Oil Corporation being an instrumentality of the State was bound to act fairly; and that fairness in such actions should be perceptible, if not transparent. If Art. 14 was applied even without the benefit of a contract of dealership, the position cannot be worse with the added benefit of a contract. With respect, we concur with the view about the impact of Art. 14 of the Constitution on every State action as indicated by the learned Chief Justice in these two recent decisions.( 33. ) No doubt, it is true, as indicated by us earlier, that there is a presumption of validity of the State action and the burden is on the person who alleges violation of Art. 14 to prove the assertion. However, where no plausible reason or principle is indicated nor is it discernible and the impugned State action, therefore, appears to be ex facie arbitrary, the initial burden to prove the arbitrariness is discharged shifting onus on the State to justify its action as fair and reasonable. If the State is unable to produce material to justify its action as fair and reasonable, the burden on the person alleging arbitrariness must be held to be discharged. The scope of judicial review is limited as indicated in Dwarkadas Marfatias case (AIR 1989 SC 1642 ) (supra) to oversee the State action for the purpose of satisfying that it is not vitiated by the vice of arbitrariness and no more. The wisdom of the policy or the lack of it or the desirability of a better alternative is not within the permissible scope of judicial review in such cases. It is not for the Courts to recast the policy or to substitute it with another which is considered to be more appropriate, once the attack on the ground of arbitrariness is successfully repelled by showing that the act which was done, was fair and reasonable in the facts and circumstances of the case. As indicated by Diplock, LJ, in Council of Civil Service Unions v. Minister for the Civil Service (1984) 3 All ER 935, the power of judicial review is limited to the grounds of illegality, irrationality and procedural impropriety. In the case of arbitrariness, the defect of irrationality is obvious.( 34. ) In our opinion, the wide sweep of Art. 14 undoubtedly takes within its fold the impugned circular issued by the State of U. P. in exercise of its executive power, irrespective of the precise nature of appointment of the Government counsel in the districts and the other rights, contractual or statutory, which the appointees may have. It is for this reason that we base our decision on the ground that independent of any statutory right, available to the appointees, and assuming for the purpose of this case that the rights flow only from the contract of appointment, the impugned circular, issued in exercise of the executive power of the State, must satisfy Art. 14 of the Constitution and if it is shown to be arbitrary, it must be struck down. However, we have referred to certain provisions relating to initial appointment, termination or renewal of tenure to indicate that the action is controlled at least by settled guidelines, followed by the State of U. P., for a long time. This too is relevant for deciding the question of arbitrariness alleged in the present case.(48. ) In our view, bringing the State activity in contractual matters also within the purview of judicial review is inevitable and is a logical corollary to the stage already reached in the decisions of this Court so far. Having fortunately reached this point, we should not now turn back or take a turn in a different direction or merely stop there. In our opinion, two recent decisions in M/s. Dwarkadas Marfatia and Sons (AIR 1989 SC 1642 ) (supra) and Mahabir Auto Stores (AIR 1990 SC 1031 ) (supra) also lead in the same . Direction without saying so in clear terms. This appears to be also the trend of the recent English decisions. It is in consonance with our commitment to openness which implies scrutiny of every State action to provide an effective check against arbitrariness and abuse of power. We would much rather be wrong in saying so rather than be wrong in not saying so. Non-arbitrariness, being a necessary concomitant of the rule of law, it is imperative that all actions of every public functionary, in whatever sphere, must be guided by reason and not humour, whim, caprice or personal predilections of the persons entrusted with the task on behalf of the State and exercise of all power must be for public good instead of being an abuse of the power.