Case: The Keshav Mills Company Ltd. &amp; Anr Vs. Union Of India And Ors

provide that the Board was not to dismiss any appeal without having first made a public local enquiry. The Local Government Board had made such rules and in conformity with these rules held an enquiry in the appeal preferred against the closing order. The house-owner attended the enquiry with his solicitor and also adduced evidence. After considering the facts and the evidence given at the enquiry as well as the report of the inspector who inspected the house the Local Government Board refused to interfere with the decision of the Borough Council not to determine the closing order. The house-owner thereupon obtained an order nisi for a writ of certiorari for the purpose of quashing of the closing order. One of the principal grounds urged by the house-owner was that he was entitled to see the report of the appellants inspector but the report had not been shown to him. A Divisional Court discharged the order nisi but the Court of Appeal reversed the decision and ordered the writ of certiorari to issue. The matter then went up to the House of Lords who allowed the appeal and upheld the closing order. Viscount Haldane L. C. in his judgment held that though the decision of the Board must be come to in the spirit and with the sense of responsibility of a tribunal whose duty it is to mete out justice it does not follow that the procedure of every such tribunal must be the same. In the absence of a declaration to the contrary, the Board was intended by Parliament to follow the procedure which is its own and is necessary if the administration is to be capable of doing its work efficiently. All that was necessary for the Board was to act in good faith and to listenfairly to both sides (Emphasis is ours). As to the contention that the report of the inspector should have been disclosed, his Lordship observed:"It might or might not have been useful to disclose this report, but I do not think that the Board was bound to do so, any more than it would have been bound to disclose all the minutes made on the papers in the office before a decision was come to."18. Lord Moulton in his judgment observed that since the appeal provided by the legislature is an appeal to an administrative department of a State and not to a judicial body it was enough if the Local Government Board preserved a judicial temper and performed its duties consciously with a proper feeling of responsibility. On the question whether it was necessary to disclose the report, his Lordship observed :"Like every administrative body, the Local Government Board must derive its knowledge from its agents and I am unable to see any reason why the reports which they make to the department should be made public. It would, in my opinion, cripple the usefulness of these enquiries..................... I dissociate myself from the remarks which have been made in this case in favour of a department making reports of this kind public. Such a practice would in my opinion, be decidedly mischievous."19. In a later case namely Danby and Sons Ltd. v. Minister of Health (1936) 1 KB 337 the law stated in (1915) AC 120 was reaffirmed. Indeed the law in England still stands unchanged.20. The law relating to observance of the rules of the natural justice has, however, made considerable strides since the case of (1915) AC 120. In particular, since the decision in (1964) AC 40 a copious case-law on the subject of natural justice has produced what has been described by some authorities as a detailed law of "administrative due process". In India also the decisions of this Court have extended the horizons of the rules of natural justice and their application. See for instance the judgment of this Court in Kraipak v. Union of India, (1970) 1 SCR 457 = (AIR 1970 SC 150 ). The problem has also received considerable attention from various tribunals and committees set up in England to investigate the working of administrative tribunals and, in particular the working of such administrative procedures as the holding of an enquiry by or on behalf of a Minister. In fact a parliamentary committee known as the Franks Committee was set up in 1955 to examine this question. This Committee specifically dealt with the question of what is described as "Inspectors Reports". The Committee mentions that the evidence that the Committee received other than the evidence from Government departments was overwhelmingly in favour of "some degree of publication" of such reports. After summarising various arguments given in favour of as well as against the publication of the reports, the Committee recommended that "the right course is to publish the inspectors reports." The Committee also recommended that the parties concerned should have an opportunity if they so desired to propose corrections of facts stated in the reports. It may be mentioned however, that these recommendations of the Committee were not accepted by the British Government.21. In our opinion it is not possible to lay down any general principle on the question as to whether the report of an investigating body or of an inspector appointed by an administrative authority should be made available to the persons concerned in any given case before the authority takes a decision upon that report. The answer to this question also must always depend on the facts and circumstances of the case. It is not at all unlikely that there may be certain cases where unless the report is given the party concerned cannot make any effective representation about the action that Government takes or proposes to take on the basis of that report. Whether the report should be furnished or not must therefore depend in every individual case on the merits of that case. We have no doubt that in the instant case non-disclosure of the report of the Investigating Committee has not caused any prejudice whatsoever to the appellants.22

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

Explanation:
0[ds]11. In the instant case, the Government of India came to hold the opinion that there was a substantial fall in the volume of production in respect of the Companys production of cotton textiles for which Government apparently found no justification having regard to the prevailing economic conditions. The Government was perfectly within its rights to appoint, under the terms of Sec. 15, an investigating body for the purpose of making full and complete investigation into the circumstances of the case. This is what the Government did and the appellants do not, as indeed they cannot, find fault with this action of the Government. It is the admitted case that for three years prior to 1969 the Company had been running into continual difficulties as a result of which the Company suffered losses which amounted upto Rs. 56.76 lakhs. In fact the mill had to be closed by the end of 1968. It was only on 31 May 1969 that Government of India appointed the Investigating Committee to investigate into the affairs of the Companys mill. The appellants do not make any grievance against the Investigating Committee regarding the manner in which they carried out the investigation. It is admitted that the Committee gave to the Company a full opportunity of being heard and also an opportunity of adducing evidence. There can therefore, be no complaint that upto this stage there was any failure to observe the rules of natural justice.justice.15. We must however deal with the specific point raised by the appellants that they should have been given further hearing by the Government before they took the final decision of taking over their undertaking under Section 18-A of the Act and that, in any event, they should have been supplied with a copy of the report of the Investigating Committee.16. In our opinion, since the appellants have received a fair treatment and also all reasonable opportunities to make out their own case before Government they cannot be allowed to make any grievance of the fact that they were not given a formal notice calling upon them to show cause why their undertaking should not be taken over or that they had not been furnished with a copy of the report.They had made all the representations that they could possibly have made against the proposed take over. By no stretch of imagination can it be said that the order for take-over took them by surprise.In fact Government gave them ample opportunity to reopen and run the mill on their own if they wanted to avoid the take-over. The blunt fact is that the appellant just did not have the necessary resources to do so. Insistence on a formal hearing in such circumstances is nothing but insistence on an empty formality.The law relating to observance of the rules of the natural justice has, however, made considerable strides since the case of (1915) AC 120. In particular, since the decision in (1964) AC 40   a copious case-law on the subject of natural justice has produced what has been described by some authorities as a detailed law of "administrative due process". In India also the decisions of this Court have extended the horizons of the rules of natural justice and their application. See for instance the judgment of this Court in Kraipak v. Union of India, (1970) 1 SCR 457   = (AIR 1970 SC 150  ). The problem has also received considerable attention from various tribunals and committees set up in England to investigate the working of administrative tribunals and, in particular the working of such administrative procedures as the holding of an enquiry by or on behalf of a Minister. In fact a parliamentary committee known as the Franks Committee was set up in 1955 to examine this question. This Committee specifically dealt with the question of what is described as "Inspectors Reports". The Committee mentions that the evidence that the Committee received other than the evidence from Government departments was overwhelmingly in favour of "some degree of publication" of such reports. After summarising various arguments given in favour of as well as against the publication of the reports, the Committee recommended that "the right course is to publish the inspectors reports." The Committee also recommended that the parties concerned should have an opportunity if they so desired to propose corrections of facts stated in the reports. It may be mentioned however, that these recommendations of the Committee were not accepted by the British Government.21. In our opinion it is not possible to lay down any general principle on the question as to whether the report of an investigating body or of an inspector appointed by an administrative authority should be made available to the persons concerned in any given case before the authority takes a decision upon that report. The answer to this question also must always depend on the facts and circumstances of the case. It is not at all unlikely that there may be certain cases where unless the report is given the party concerned cannot make any effective representation about the action that Government takes or proposes to take on the basis of that report. Whether the report should be furnished or not must therefore depend in every individual case on the merits of that case. We have no doubt that in the instant case non-disclosure of the report of the Investigating Committee has not caused any prejudice whatsoever to the appellants.