Case: Narayanan Sankaran Mooss Vs. The State Of Kerala And Another

successful showing that the order of revocation has been made without the Government applying its mind to the aspect of public interest or without forming an honest opinion on that aspect, it will, we have no doubt, be void. The phrase "after consulting the State Electricity Board" is sandwiched between the clause "if in its opinion the public interest so requires" and cls. (a) to (d). In this context it appears to us that consultation with the Board is also a condition precedent for making the order of revocation. Accordingly the breach of this condition precedent should also entail the same consequence as the breach of the other conditions referred to earlier. It may be observed that the phrase "after consulting the State Electricity Board" did not find place in S. 4 as it stood originally. It was introduced in Section 4 in 1959 by an amendment. It seems to us that it was introduced in Section 4 with the object of providing an additional safeguard to the licensee. When revoking a licence, the State Government acts in two stages. At first it forms a tentative opinion in favour of revoking the licence. Then it calls for an explanation from the licensee. When the explanation is received, it considers the explanation. If not satisfied with the explanation, it passes the final order of revocation. First impressions and provisional judgments have a tendency to become ultimate ideas and final judgments. They would settle unconsciously on the investigators mind as the imperceptible dust-particles on an optical lens. They would dim his understanding and obfuscate his observation. Facts which will dovetail with them would arrest his attention; facts which will conflict with them would flit his observation. If by any chance he happens to notice refractory facts, he would seek to reconcile them with his first impressions and provisional judgments. This understanding of human psychology seems to have pursuaded Parliament to interpose the condition of the Boards consultation to the Governments action. The Board is an independent body. It consists of three members. One of them is a technical expert, the other a financial expert, and the third an administrative expert. While considering the facts presented to it by the Government and by the licensee in his explanation, the Board will undoubtedly act with an open and unconditioned mind and will be able to offer unbiased counsel to the Government. Having regard to the object and context, we are of the view that the condition of consulting the Board is mandatory and the breach of this condition will make the order of revocation void. We have already held that the Board was not consulted after the explanation was received. Accordingly we are of opinion that the order is void. The consequential order of acquisition will ipso facto fall down.21. Counsel for the Board has relied on 1958 SCR 533 = (AIR 1957 SC 912 ) (supra), Ram Gopal Chaturvedi v State of Madhya Pradesh, (1970) 1 SCR 472 = (AIR 1970 SC 158 ) and State of Bombay v. D. A. Korgaonkar, Civil Appeal No. 289 of 1958 D/-6-5-1960 (SC). He has also relied on Rollo v. Minister of Town and Country Planning (1948) 1 All ER 13 and Derham v. Church Commissioners for England 1954 AC 245. (1970) 1 SCR 472 = (AIR 1970 SC 158 ) (supra) and Civil App. No. 289 of 1958 D/-6-5-1960 (SC) (supra) have followed Manbodhan Lal (Srivastava (supra). In Manbodhan Lal 1958 SCR 533 = (AIR 1967 SC 912) this court held that Art. 320 (c) of the Constitution is directory and not mandatory. A Government employee was dismissed from service after complying with the provisions of Art. 311 (2) of the Constitution. The U. P. Public Service Commission was consulted as to the punishment to be imposed on him. But it was consulted before the explanation of the employee was received by the Government. The argument was that as the Commission did not have the opportunity of considering his explanation, there was no real consultation as required by Art. 320 (c). It was also argued that Art. 320 (c) was mandatory and that accordingly the order of dismissal was void. This Court pointed out several reasons for the view that Art. 320 (c) is directory. The proviso to Art. 320 empowers the appropriate Govt. to issue directions as to the classes of cases in which consultation of the Commission will not be necessary. The proviso therefore indicates that the provision is directory. Another reason given by the Court is that Art. 320 (c) does not occur in the Chapter in which Art. 311 occurs. It finds place in the Chapter dealing with the Public Service Commission. Accordingly it cannot be said that it confers any right on Government employees. The third reason given is that consultation of the Commission is not binding on the Government. The first two reasons do not apply in our case.We have shown earlier that the condition of consulting the Board has been inserted by an amendment of Section 4 with the object of creating a safeguard in favour of licensee. There is no provision in the Act authorising the Government to waive the condition of consultation in any case.It is true that the third reason given by the Court in Manbodhan Lal 1958 SCR 533 = (AIR 1957 SC 912 ) (supra) applies in this case. As there, so here the opinion of the Board is not binding on the Government. In spite of the Board advising against revocation, the Government may, if satisfied that it is necessary to revoke the licence, may revoke it. But having regard to the object and context of Section 4, we are of opinion that it should not be regarded as an over-weighing consideration. It will normally be difficult for the Government to ignore the Boards expert advice.We are satisfied from the object and context of Section 4 that Parliament intended to make consultation of the Board an imperative condition to revoking a licence.

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

Explanation:
1[ds]4. Counsel for the State Government and the Board have raised a preliminary objection. They point out that the argument advanced by Sri Sen was neither raised in the writ petition nor urged before the High Court. According to them it should not be allowed to be raised in this Court. It is true that the point is not specifically raised in the writ petition. But, in our view, it is embedded in paragraphs 6 and 22 of the affidavit accompanying theis thus unmistakably plain that the Government as well as the Board understood the petition as raising a challenge to the orders on the ground of want of due consultation of the Board before the making of the impugned orders. And they have replied to that implicit challenge in the petition. It appears to us that there is little force in the preliminary objection that Sri Sens contention is not raised in the petition.This entire chain of correspondence between the Government and the Board would unmistakably show that there was no second consultation between the Government and the Board regarding the revocation of the licence after the Government had received the appellants explanation to the show cause notice served on him. In the circumstances of the case we are satisfied that no prejudice will be caused to the respondents if the point is permitted to be raised in this Court. So we permit Sri Sen to argue the point.It appears form a reading of S. 4 that when the Government consults the Board on the question of revocation of a licence under S. 4, the Board is to make up its mind as to whether it should recommend: (1) to revoke the licence, or (2) not to revoke the licence, or (3) to permit the license to remain in force subject to such further terms and conditions as may be thought proper. It is difficult to conceive how the Board will make a choice out of these three courses without considering the explanation of the licensee. The explanation may make out a case for not revoking the license or a case for continuation of the licence with certainIt is now to be seen as to what is the effect of this premature consultation of the Board by the Government on the impugned order. The Act does not expressly provide for the consequence of premature consultation. It does not say that the order of revocation is void. Sri Sen contends that the order will be void. Counsel for the Board, on the other hand, contends that it will not be void. According to him, the provision regarding consultation of the Board is directory, and not mandatory.with a directory provision does not nullify the order. It is not disputed that if the provision is mandatory, the order of revocation will be void.The power to revoke the licence is a drastic power. The revocation of licence results in severe abridgment of the right to carry on business. Having in mind the requirements of Art. 19 (1) (g), Parliament has, it seems to us, prescribed certain conditions to prevent the abuse of power and to ensure just exercise of power. Clauses (a) to (d) of S. 4 prescribe some of the conditions precedent for the exercise of power. The order of revocation, in breach of any one of those conditions, will undoubtedly be void. The clause "if in its opinion the public interest so requires" is also a condition precedent. On a successful showing that the order of revocation has been made without the Government applying its mind to the aspect of public interest or without forming an honest opinion on that aspect, it will, we have no doubt, be void. The phrase "after consulting the State Electricity Board" is sandwiched between the clause "if in its opinion the public interest so requires" and cls. (a) to (d). In this context it appears to us that consultation with the Board is also a condition precedent for making the order of revocation. Accordingly the breach of this condition precedent should also entail the same consequence as the breach of the other conditions referred to earlier. It may be observed that the phrase "after consulting the State Electricity Board" did not find place in S. 4 as it stood originally. It was introduced in Section 4 in 1959 by an amendment. It seems to us that it was introduced in Section 4 with the object of providing an additional safeguard to the licensee. When revoking a licence, the State Government acts in two stages. At first it forms a tentative opinion in favour of revoking the licence. Then it calls for an explanation from the licensee. When the explanation is received, it considers the explanation. If not satisfied with the explanation, it passes the final order of revocation. First impressions and provisional judgments have a tendency to become ultimate ideas and final judgments. They would settle unconsciously on the investigators mind as the imperceptibleon an optical lens. They would dim his understanding and obfuscate his observation. Facts which will dovetail with them would arrest his attention; facts which will conflict with them would flit his observation. If by any chance he happens to notice refractory facts, he would seek to reconcile them with his first impressions and provisional judgments. This understanding of human psychology seems to have pursuaded Parliament to interpose the condition of the Boards consultation to the Governments action. The Board is an independent body. It consists of three members. One of them is a technical expert, the other a financial expert, and the third an administrative expert. While considering the facts presented to it by the Government and by the licensee in his explanation, the Board will undoubtedly act with an open and unconditioned mind and will be able to offer unbiased counsel to the Government. Having regard to the object and context, we are of the view that the condition of consulting the Board is mandatory and the breach of this condition will make the order of revocation void. We have already held that the Board was not consulted after the explanation was received. Accordingly we are of opinion that the order is void. The consequential order of acquisition will ipso facto fallhave shown earlier that the condition of consulting the Board has been inserted by an amendment of Section 4 with the object of creating a safeguard in favour of licensee. There is no provision in the Act authorising the Government to waive the condition of consultation in any case.It is true that the third reason given by the Court in Manbodhan Lal 1958 SCR 533   = (AIR 1957 SC 912  ) (supra) applies in this case. As there, so here the opinion of the Board is not binding on the Government. In spite of the Board advising against revocation, the Government may, if satisfied that it is necessary to revoke the licence, may revoke it. But having regard to the object and context of Section 4, we are of opinion that it should not be regarded as anconsideration. It will normally be difficult for the Government to ignore the Boards expert advice.We are satisfied from the object and context of Section 4 that Parliament intended to make consultation of the Board an imperative condition to revoking a licence.