Case: Travancore Rayon Ltd Vs. Union Of India

accept the contention that the order passed by the Government of India rejecting a revision application under the Mineral Concession Rules was liable to be quashed, because it did not give any reasons Bachawat, J., observed at page 477 (of SCR) = (at page 677 of AIR) :"There is a vital difference between the order of reversal by the appellate authority in that case for no. reason whatsoever and the order of affirmance by the revising authority in the present case. Having stated that there was no. valid ground for interference, the revising authority was not bound to give fuller reasons. It is impossible to say that the impugned order was arbitrary, or that there was no. proper trial of the revision application."On the other hand, Subba Rao, J., observed at page 472 (of SCR) = (at p. 674 of AIR) :"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 enables an appellate or supervisory Court, to keep the tribunals within bounds. A reasoned order is a desirable condition of judicial, disposal.The conception of exercise of revisional jurisdiction and the manner of disposal provided in Rule 55 of the Rules are indicative of the scope and nature of the Governments jurisdiction. If tribunals can make orders without giving reasons, the said power in the hands of unscrupulous or dishonest officers may turn out to be a weapon for abuse of power. But if reasons for an order are given. it will be an effective restraint on such abuse, as the order, if it discloses extraneous or irrelevant considerations, will be subject to judicial scrutiny and correction. A speaking order will at its best be a reasonable and at its worst be at least a plausible one. The public should not be deprived of this only safeguard.****The habit of mind of an executive officer so formed cannot be expected to change from function to function or from act to act. So it is essential that some restrictions shall be imposed on tribunals in the matter of passing orders affecting the rights of parties; and the least they should do is to give reasons for their orders.*****Ordinarily, the appellate or revisional tribunal shall give its own reasons succinctly; but in a case of affirmance where the original tribunal gives adequate reasons, the appellate tribunal may dismiss the appeal or the revision as the case may be agreeing with those reasons. What is essential is that reasons shall be given by an appellate or revisional tribunal expressly or by reference to those given by the original tribunal. The nature and the elaboration of the reasons necessarily depend upon the facts of each case".9. In a later judgment Bhagat Raja v. The Union of India, (1967) 3 SCR 302 = (AIR 1967 SC 1606 ) the Constitution Bench of this Court in effect overruled the judgment of the majority in Madhya Pradesh Industries Limiteds case. (1966) 1 SCR 466 = (AIR 1966 SC 671 ). The Court held that the decisions of tribunals in India are subject to the supervisory powers of the High Court under Article 227 of the Constitution and of appellate powers of this Court under Article 136. The High Court and this Court would be placed under a great disadvantage if no. reasons are given and the revision is dismissed by the use of the single word rejected or dismissed. The Court in that case held that the order of the Central Government in appeal, did not set out any reasons of its own and on that account set aside that order. In our view, the majority judgment of this Court in Madhya Pradesh Industries Ltd.s case, (1966) 1 SCR 466 = (AIR 1966 SC 671 ) has been overruled by this Court in Bhagat Rajas case, (1967) 3 SCR 302 = (AIR 1967 SC 1606).10. In later decisions of this Court it was held that where the Central Government exercising power in revision gives no. reasons, the order will be regarded as void : see State of Madhya Pradesh v. Seth Narsinghdas Jankidas Mehta, C. A. No. 681 of 1966, D/- 29-4-1969 = (AIR 1969 NSC 115); The State of Gujarat v. Patel Raghav Nath C. A. No. 723 of 1966, D/- 21-4-1969 = (AIR 1969 SC 1297 ); and Prag Das Umar Vaishya v. Union of India, C. A No. 657 of 1967, D/- 17-8-1967 (SC).11. In this case the communication from the Central Government gave no. reasons in support of the order; the appellant Company is merely intimated thereby that the Government of India did not see any reasons to interfere "with the order in appeal". The communication does not disclose the "points" which were considered and the reasons for rejecting them. This is a totally unsatisfactory method of disposal of a case in exercise of the judicial power vested in the Central Government. Necessity to give sufficient reasons which disclose proper appreciation of the problem to be solved, and the mental process by which the conclusion is reached in cases where a non-judicial authority exercises judicial functions, is obvious. When judicial power is exercised by an authority normally performing executive or administrative functions, this Court would require to be satisfied that the decision has been reached after due consideration of the merits of the dispute, uninfluenced by extraneous considerations of policy or expediency. The Court insists upon disclosure of reasons in support of the order on two grounds : one, that the party aggrieved in a proceeding before the High Court or this Court has the 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.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]It is true that the rules do not require that personal hearing shall be given, but, if in appropriate cases where complex and difficult questions requiring familiarity with technical problems are raised, personal hearing is given it would conduce to better administration and more satisfactory disposal of the grievances of citizens. The order does not disclose the name or designation of the authority of the Government of India who considered "the points made by the applicants", and it is impossible to say whether the officer was familiar with the subject-matter so that he could decide the dispute without elucidation and merely on a perusal of the papers. The form in which the order was communicated is apparently a printed form. There is a bare assertion by the Joint Secretary to the Government of India in his communication that the Government of India had "carefully considered the points made by the applicants", there is no. evidence as to who considered the "points" and what was considered. The Central Government is by Section 36 invested with the judicial power of the State. Orders involving important disputes are brought before the Government. The orders made by the Central Government are subject to appeal to this Court under Article 136 of the Constitution. It would be impossible for this Court, exercising jurisdiction under Article l36, to decide the dispute without a speaking order of the authority, setting out the nature of the dispute, the arguments in support thereof raised by the aggrieved party and reasonably disclosing that the matter received due consideration by the authority competent to decide the dispute. Exercise of the right to appeal to this Court would be futile, if the authority chooses not to disclose the reasons in support of the decision reached by it. A party who approaches the Government in exercise of a statutory right, for adjudication of a dispute is entitled to know at least the official designation of the person who has considered the matter, what was considered by him, and the reasons for recording a decision against him. To enable the High Court or this Court to exercise its constitutional powers, not only the decision, but an adequate disclosure of materials justifying an inference that there has been a judicial consideration of the dispute by an authority competent in that behalf in the light of the claim made by the aggrieved party, is necessary. If the Officer acting on behalf of the Government chooses to give no. reasons, the right of appeal will be devoid of anyour view, the majority judgment of this Court in Madhya Pradesh Industries Ltd.s case, (1966) 1 SCR 466   = (AIR 1966 SC 671  ) has been overruled by this Court in Bhagat Rajas case, (1967) 3 SCR 302   = (AIR 1967 SCIn this case the communication from the Central Government gave no. reasons in support of the order; the appellant Company is merely intimated thereby that the Government of India did not see any reasons to interfere "with the order in appeal". The communication does not disclose the "points" which were considered and the reasons for rejecting them. This is a totally unsatisfactory method of disposal of a case in exercise of the judicial power vested in the Central Government. Necessity to give sufficient reasons which disclose proper appreciation of the problem to be solved, and the mental process by which the conclusion is reached in cases where a non-judicial authority exercises judicial functions, is obvious. When judicial power is exercised by an authority normally performing executive or administrative functions, this Court would require to be satisfied that the decision has been reached after due consideration of the merits of the dispute, uninfluenced by extraneous considerations of policy or expediency. The Court insists upon disclosure of reasons in support of the order on two grounds : one, that the party aggrieved in a proceeding before the High Court or this Court has the 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.