Case: Union Of India  Vs. M/S.Gtc Industries Ltd., Bombay

appearing for the GTC before the High Court confined his arguments to the issue of infringement of the violation of Principles of Natural Justice only. The High Court held that denial of opportunity to the GTC to cross-examine Shri Sailo, Lalchunganga and Liangtilinga was nothing short of denial of reasonable opportunity to the Writ Petitioner to defend and establish its version. That the same amounted to the breach of Principles of Natural Justice. On this basis the final adjudication order of Collector was set aside and the matter was remitted back with the direction to resume the proceedings and issue summons to the partners of NET for necessary cross-examination by GTC and thereafter to decide the matter afresh. 10. Learned Senior Counsel appearing for the Union of India Mr. Jaideep Gupta submitted that no statement was taken from Shri Sailo by the authorities nor did the authorities rely upon any statement of Shri Sailo against GTC. That it was not a case where the evidence had been produced by the appellant in support of its case and no opportunity of cross-examination was given to the other side. Notice could not be issued to Shir Sailo under Section 14 of the Act to compel his attendance and to make a statement coupled with the opportunity to the GTC to cross-examine him. That Shri Sailo being a co-notice, could not be compelled to e appear as witness against himself. Non-summoning of a co-notice for the purpose of cross-examination by another co-notice did not amount to breach of Principles of Natural Justice. In the alternative, it was submitted that in a case based on violation of Principles of Natural Justice, it is to be shown that some prejudice was caused to the aggrieved person because of the alleged breach of violation of Principles of Natural Justice. It was vehemently contended that the Collector incoming to the finding that the GTC was the real manufacturer and the NET its front company did not rely upon the statement of Shri Sailo. In coming to this finding the Collector had primarily placed reliance on the statements of other persons. 11. Per contra, Shri Ganesh who appeared for the respondent fairly conceded that he could not support the direction issued by the High Court to summon Shri Sailo under Section 14 of the Act and produce him for cross - examination by the GTC. But he entered a caveat to the submission of the counsel for the appellant that the Collector had not placed reliance on the statement of Shir Sailo. Relying upon the findings recorded by the High Court, it was contended that the order of the Collector was based on the statement/submissions made by Shri Sailo before the authorities. That the statement/submissions of Shri Sailo could not be relied upon for recording an adverse order against the GTC.12. Submissions put forth by the counsel appearing for the Union of India cannot be accepted. It is an admitted case before us that Shri Sailo, Lalchunganga or Liangtilinga did not file any response by way of a written reply. Their statements were also not recorded. Shri Sailo appeared before the Collector on 25th November, 1989 in the absence of the representatives of GTC, on which date the collector recorded the submissions of Shri Sailo. At the subsequent hearing which took place on 1st May, 1990, representatives of GTC attended the proceedings but were not given any notice or information about the submissions/statement made by Shri Sailo on 25th November, 1989. Thereafter, on 15th May, 1990, Collector passed his order in original quoting extensively from the submissions/statement made before him by Shri Sailo which ran into three pages which itself makes it clear that the Collector had placed strong reliance on the submissions/statement of Shri Sailo. It is specifically recorded in the order that the departmental representatives who appeared befoe the Collector had also placed strong reliance on the submissions/statement of Shri Sailo. The Collectors order is based largely and substantially if not entirely on the submissions of Shri Sailo. The High Court in paragraphs 27 and 28 of its judgment has also recorded a finding that the Collector in its order had substantially relied upon the submissions made by Shri Sailo. In paragraph 27 it is recorded: "It may also here be noted that the Collector in his adjudication order, made on 15th May, 1990, has substantially relied upon the statement of Shri Sailo which was made to the Collector at a personal hearing." 13. In paragraph 28, it is observed: "The utilisation of Shri Sailos statement in itself shows that the statement of Mr. Sailo was indeed not only necessary but of substantial importance in the consideration and proper adjudication on the version of the petitioner." 14. Counsel for the appellants failed to displace the finding recorded by the High court on this point. Contention of the counsel for the Union of India that the order of the Collector should be sustained by ignoring the submissions/statement of Shri Sailo as there was other sufficient material on record to sustain and justify the said order cannot be accepted. It may not be possible for us to separate or disentangle the submissions of Shri Sailo from other material evidence on record. It is well settled that a quasi-judicial order has to be judged on the basis of reasoning contained therein and not on the basis of pleas put forward by the person seeking to sustain the order in its counter affidavit or oral arguments before the court.15. It is apt to note here that no statement was made by Shri Salio before the adjudicating authority. What is referred to as statement of Shri Salio is nothing but his oral submissions made at the hearing.16. An adverse finding could not have been recorded against the GTC by relying upon the oral submissions made by a co-noticee at the hearing without any supporting material on record, providing due opportunity to GTC to meet the same.17. For the reasons stated above,

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

Explanation:
1[ds]It may not be possible for us to separate or disentangle the submissions of Shri Sailo from other material evidence on record. It is well settled that a quasi-judicial order has to be judged on the basis of reasoning contained therein and not on the basis of pleas put forward by the person seeking to sustain the order in its counter affidavit or oral arguments before the court.15. It is apt to note here that no statement was made by Shri Salio before the adjudicating authority. What is referred to as statement of Shri Salio is nothing but his oral submissions made at the hearing.16. An adverse finding could not have been recorded against the GTC by relying upon the oral submissions made by a co-noticee at the hearing without any supporting material on record, providing due opportunity to GTC to meet the same.