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CASE NO.:

Appeal (civil) 2300 of 2005

PETITIONER:

Canara Bank

RESPONDENT:

V.K. Awasthy

DATE OF JUDGMENT: 31/03/2005

BENCH:

Arijit Pasayat & S.H. Kapadia

JUDGMENT:

JUDGMENT

ARIJIT PASAYAT, J.

Leave granted.

Challenge in this Appeal is to correctness of the judgment rendered by a

Division Bench of the Kerala High Court holding that the order directing

respondent's dismissal from service was in violation of the principles of

natural justice. Therefore, it was held that the order was passed without

proper application of mind regarding the findings recorded by the

Disciplinary Authority on the basis of report of the enquiry officer, and

relating to imposition of punishment. However, High Court permitted the

respondent - writ petitioner to make a detailed representation to the

Disciplinary Authority in respect of the enquiry proceedings and findings,

within a stipulated time and direction was given to the Disciplinary

Authority to consider the submission and pass a fresh order. High Court

further directed that the period during which respondent was out of service

was to be treated as period under suspension, and the employee was to be

paid subsistence allowance. It would be relevant to note that the

respondent filed a Writ Petition questioning the order directing his

dismissal from service. Learned Single Judge came to hold that the quantum

of punishment i.e. dismissal from service was disproportionate to the

misconduct proved. It was however, held that no prejudice was caused to the

writ petitioner and there was no violation of principles of natural

justice. Both the writ petitioner and the present appellant had preferred

writ appeals before the High Court, which were heard and disposed of by the

impugned common judgment.

In support of the appeal, Mr. Sudhir Chandra, learned Senior Advocate

submitted that the show cause notice was issued on 2.7.1992. Since the

respondent was not working at the Branch where he was originally posted and

was living at Kanpur, the notice was served on him on 6.8.1992 and 15 days,

time was granted for the purpose of filing response. Order was passed on

17.8.1992. Even though the respondent-employee preferred an appeal before

the prescribed Appellate Authority, in the Memorandum of Appeal there was

no stand taken that there was any prejudice caused to him on account of the

fact that the order was passed prior to the expiry of the indicated period.

He was given personal hearing by the Appellate Authority. Before him also

no such stand was taken and no plea regarding any prejudice was raised.

That being the position, the learned Single Judge was right in holding that

there was no prejudice caused. The Division Bench has clearly missed these

vital factors and, therefore, its view regarding violation of the

principles of natural justice cannot be maintained. Further, in view of the

proved misconduct, the punishment imposed cannot in any way be held to be

disproportionate. In any event, there was hardly any scope within the

limited scope of judicial review to interfere with the quantum of

punishment.

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In response, learned counsel for the respondent-employee submitted that

prejudice is writ large and did not be pleaded. Merely because no specific

ground regarding prejudice was taken either in the Memorandum of Appeal or

at the time of personal hearing that does not cure the fatal defect of

violation of principles of natural justice.

It is not in dispute that in the meantime the respondent has reached the

age of superannuation, even if the order of dismissal is kept out of

consideration. In the instant case, undisputedly respondent-employee did

not raise any ground relating to violation of principles of natural justice

in either the Memorandum of Appeal or, at the time of personal hearing

before the Appellate authority.

Additionally, there was no material placed by the employee to show as to

how he has been prejudiced. Though in all cases the post-decisional hearing

cannot be a substitute for pre-decisional hearing, in the case at hand the

position is different. The position was illuminatingly stated by this Court

in Managing Director, ECIL, Hyderabad and Ors. v. B. Karunakara and Ors.,

[1993] 4 SCC 727 at para 31 which reads as follows:

"Hence, in all cases where the enquiry officer.s report is not furnished to

the delinquent employee in the disciplinary proceedings, the Courts and

Tribunals should cause the copy of the report to be furnished to the

aggrieved employee if he has not already secured it before coming to the

Court/Tribunal and give the employee an opportunity to show how his or her

case was prejudiced because of the non-supply of the report. If after

hearing the parties, the Court/Tribunal comes to the conclusion that the

non-supply of the report would have made no difference to the ultimate

findings and the punishment given, the Court/Tribunal should not interfere

with the order of punishment. The Court/Tribunal should not mechanically

set aside the order of punishment on the ground that the report was not

furnished as is regrettably being done at present. The courts should avoid

resorting to short cuts. Since it is the Courts/Tribunals which will apply

their judicial mind to the question and give their reasons for setting

aside or not setting aside the order of punishment, (and not any internal

appellate or revisional authority), there would be neither a breach of the

principles of natural justice nor a denial of the reasonable opportunity.

It is only if the Court/Tribunal finds that the furnishing of the report

would have made a difference to the result in the case that it should set

aside the order of punishment. Where after following the above procedure,

the Court/Tribunal sets aside the order of punishment, the proper relief

that should be granted is to direct reinstatement of the employee with

liberty to the authority/management to proceed with the inquiry, by placing

the employee under suspension and continuing the inquiry from the state of

furnishing him with the report. The question whether the employee would be

entitled to the back-wages and other benefits from the date of his

dismissal to the date of his reinstatement if ultimately ordered, should

invariably be left to be decided by the authority concerned according to

law, after the culmination of the proceedings and depending on the final

outcome. If the employee succeeds in the fresh inquiry and is directed to

be reinstated, the authority should be at liberty to decide according to

law how it will treat the period from the date of dismissal till the

reinstatement and to what benefits, if any and the extent of the benefits,

he will be entitled. The reinstatement made as a result of the setting

aside of the inquiry for failure to furnish the report, should be treated

as a reinstatement for the purpose of holding the fresh inquiry from the

stage of furnishing the report and no more, where such fresh inquiry is

held. That will also be the correct position in law."

It is to be further noted that in the appeal before the Appellate Authority

findings of the Inquiry Officer and Disciplinary Authority were challenged

and, therefore, the question of any prejudice does not arise. Since

employee had the opportunity to meet the stand of the Bank, it was to his

advantage, and opportunity for personal hearing was also granted. Keeping

in view what was observed in B. Karunakara's case (supra) there was no

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question of violation of principles of natural justice.

The crucial question that remains to be adjudicated is whether principles

of natural justice have been violated; and if so, to what extent any

prejudice has been caused. It may be noted at this juncture that in some

cases it has been observed that where grant of opportunity in terms of

principles of natural justice do not improve the situation, ``useless

formality theory'' can be pressed into service.

Natural justice is another name for commonsense justice. Rules of natural

justice are not codified canons. But they are principles ingrained into the

conscience of man. Natural justice is the administration of justice in a

commonsense liberal way. Justice is based substantially on natural ideals

and human values. The administration of justice is to be freed from the

narrow and restricted considerations which are usually associated with a

formulated law involving linguistic technicalities and grammatical

niceties. It is the substance of justice which has to determine its form.

The expressions ``natural justice'' and ``legal justice'' do not present a

water-tight classification. It is the substance of justice which is to be

secured by both, and whenever legal justice fails to achieve this solemn

purpose, natural justice is called in aid of legal justice. Natural justice

relieves legal justice from unnecessary technicality, grammatical pedantry

or logical prevarication. It supplies the omissions of a formulated law. As

Lord Buckmaster said, no form or procedure should ever be permitted to

exclude the presentation of a litigants. defence.

The adherence to principles of natural justice as recognized by all

civilized States is of supreme importance when a quasi-judicial body

embarks on determining disputes between the parties, or any administrative

action involving civil consequences is in issue. These principles are well

settled. The first and foremost principle is what is commonly known as audi

alteram partem rule. It says that no one should be condemned unheard.

Notice is the first limb of this principle. It must be precise and

unambiguous. It should appraise the party determinatively the case he has

to meet. Time given for the purpose should be adequate so as to enable him

to make his representation. In the absence of a notice of the kind and such

reasonable opportunity, the order passed becomes wholly vitiated. Thus, it

is but essential that a party should be put on notice of the case before

any adverse order is passed against him. This is one of the most important

principles of natural justice. It is after all an approved rule of fair

play. The concept has gained significance and shades with time. When the

historic document was made at Runnymede in 1215, the first statutory

recognition of this principle found its way into the ``Magna Carta''. The

classic exposition of Sir Edward Coke of natural justice requires to

``vocate interrogate and adjudicate''. In the celebrated case of Cooper v.

Wandsworth Board of Works, (1963) 143 ER 414, the principle was thus

stated:

"Even God did not pass a sentence upon Adam, before he was called

upon to make his defence. ``Adam'' says God, ``where art thou has

thou not eaten of the tree whereof I commanded thee that though

should not eat''.

Since then the principle has been chiselled, honed and refined, enriching

its content. Judicial treatment has added light and luminosity to the

concept, like polishing of a diamond.

Principles of natural justice are those rules which have been laid down by

the Courts as being the minimum protection of the rights of the individual

against the arbitrary procedure that may be adopted by a judicial, quasi-

judicial and administrative authority while making an order affecting those

rights. These rules are intended to prevent such authority from doing

injustice.

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What is meant by the term `principles of natural justice' is not

easy to determine. Lord Summer (then Hamilton, L.J.) in Ray v.

Local Government Board, (1914) 1 KB 160 at p.199:83 LJKB 86)

described the phrase as sadly lacking in precision. In General

Council of Medical Education & Registration of U.K. v. Sanckman,

(1943) AC 627: [1948] 2 All ER 337, Lord Wright observed that it

was not desirable to attempt `to force it into any procusteam bed'

and mentioned that one essential requirement was that the Tribunal

should be impartial and have no personal interest in the

controversy, and further that it should give `a full and fair

opportunity', to every party of being heard.

Lord Wright referred to the leading cases on the subject. The most

important of them is the Board of Education v. Rice, (1911) AC 179:80 LJKB

796), where Lord Loreburn, L.C. observed as follows:

"Comparatively recent statutes have extended, if they have

originated, the practice of imposing upon departments or offices of

State the duty of deciding or determining questions of various

kinds. It will, I suppose usually be of an administrative kind, but

sometimes, it will involve matter of law as well as matter of fact,

or even depend upon matter of law alone. In such cases, the Board

of Education will have to ascertain the law and also to ascertain

the facts. I need not and that in doing either they must act in

good faith and fairly listen to both sides for that is a duty lying

upon everyone who decides anything. But I do not think they are

bound to treat such a question as though it were a trial......''

The Board is in the nature of the arbitral tribunal, and a Court of

law has no jurisdiction to hear appeals from the determination

either upon law or upon fact. But if the Court is satisfied either

that the Board have not acted judicially in the way I have

described, or have not determined the question which they are

required by the Act to determine, then there is a remedy by

mandamus and certiorari".

Lord Wright also emphasized from the same decision the observation of the

Lord Chancellor that the Board can obtain information in any way they think

best, always giving a fair opportunity to those who are parties to the

controversy for correcting or contradicting any relevant statement

prejudicial to their view''. To the same effect are the observations of

Earl of Selbourne, LO in Spackman v. Plumstead District Board of Works,

(1985) 10 AC 229:54 LJMC 81), where the learned and noble Lord Chancellor

observed as follows:

"No doubt, in the absence of special provisions as to how the

person who is to decide is to proceed, law will imply no more than

that the substantial requirements of justice shall not be violated.

He is not a judge in the proper sense of the word; but he must give

the parties an opportunity of being heard before him and stating

their case and their view. He must give notice when he will proceed

with the matter and he must act honestly and impartially and not

under the dictation of some other person or persons to whom the

authority is not given by law. There must be no malversation of any

kind. There would be no decision within the meaning of the statute

if there were anything of that sort done contrary to the essence of

justice".

Lord Selbourne also added that the essence of justice consisted in

requiring that all parties should have an opportunity of submitting to the

person by whose decision they are to be bound, such considerations as in

their judgment ought to be brought before him. All these cases lay down the

very important rule of natural justice contained in the oft-quoted phrase

`justice should not only be done, but should be seen to be done'.

Concept of natural justice has undergone a great deal of change in recent

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years. Rules of natural justice are not rules embodied always expressly in

a statute or in rules framed thereunder. They may be implied from the

nature of the duty to be performed under a statute. What particular rule of

natural justice should be implied and what its context should be in a given

case must depend to a great extent on the fact and circumstances of that

case, the frame-work of the statute under which the enquiry is held. The

old distinction between a judicial act and an administrative act has

withered away. Even an administrative order which involves civil

consequences must be consistent with the rules of natural justice.

Expression `civil consequences' encompasses infraction of not merely

property or personal rights but of civil liberties, material deprivations,

and non-pecuniary damages. In its wide umbrella comes everything that

affects a citizen in his civil life.

Natural justice has been variously defined by different Judges. A

few instances will suffice. In Drew v. Drew and Lebura, (1855) 2

Macg. 1.8, Lord Cranworth defined it as `universal justice'. In

James Dunber Smith v. Her Majesty the Queen, (1877-78)3 App. Case

614, 623 JC Sir Robort P. Collier, speaking for the judicial

committee of Privy council, used the phrase `the requirements of

substantial justice', while in Arthur John Specman v. Plumstead

District Board of Works, (1884-85) 10 App.Case 229, 240, Earl of

Selbourne, S.C. preferred the phrase `the substantial requirement

of justice'. In Vionet v. Barrett, (1885) 55 LJRD 39, 41, Lord

Esher, MR defined natural justice as `the natural sense of what is

right and wrong'. While, however, deciding Hookings v. Smethwick

Local Board of Health, (1890) 24 QBD 712, Lord Fasher, M.R. instead

of using the definition given earlier by him in Vionet's case

(supra) chose to define natural justice as `fundamental justice' In

Ridge v. Baldwin, (1963) 1 WB 569, 578, Harman LJ, in the Court of

Appeal countered natural justice with `fair-play in action' a

phrase favoured by Bhagawati, J. in Maneka Gandhi v. Union of

India, [1978] 2 SCR 621. In re R.N. (An Infaot) (1967) 2 B617, 530,

Lord Parker, CJ, preferred to describe natural justice as `a duty

to act fairly'. In fairmount Investments Ltd. v. Secretary to State

for Environment, (1976) WLR 1255 Lord Russell of Willowan somewhat

picturesquely described natural justice as `a fair crack of the

whip' while Geoffrey Lane, LJ. In Regina v. Secretary of State for

Home Affairs Ex Parte Hosenball, (1977 ) 1 WLR 766 preferred the

homely phrase `common fairness'.

How then have the principles of natural justice been interpreted in the

Courts and within what limits are they to be confined? Over the years by a

process of judicial interpretation two rules have been evolved as

representing the principles of natural justice in judicial process,

including therein quasi-judicial and administrative process. They

constitute the basic elements of a fair hearing, having their roots in the

innate sense of man for fair-play and justice which is not the preserve of

any particular race or country but is shared in common by all men. The

first rule is `nemo judex in causa sua' or `nemo debet esse judex in

propria causa sua' as stated in (1605) 12 Co.Rep.114 that is, `no man shall

be a judge in his own cause' Coke used the form `aliquis non debet esse

judex in propria causa quia non potest esse judex at pars. (Co.Litt. 1418),

that is, `no man ought to be a judge in his own case' because he cannot act

as Judge and at the same time be a party' The form `nemo potest esse simul

actor et judex', that is, `no one can be at once suitor and judge' is also

at times used. The second rule is `audi alteram partem', that is, `hear the

other side' At times and particularly in continental countries, the form

`audietur at altera pars' is used, meaning very much the same thing. A

corollary has been deduced from the above two rules and particularly the

audi alteram partem rule, namely `qui aliquid statuerit parte inaudita

alteram actquam licet dixerit, haud acquum facerit' that is, `he who shall

decide anything without the other side having been heard, although he may

have said what is right, will not have been what is right' (See Bosewell's

case (1605) 6 Co.Rep. 48-b, 52-a) or in other words, as it is now

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expressed, `justice should not only be done but should manifestly be seen

to be done' Whenever an order is struck down as invalid being in violation

of principles of natural justice, there is no final decision of the case

and fresh proceedings are left upon. All that is done is to vacate the

order assailed by virtue of its inherent defect, but the proceedings are

not terminated.

What is known as `useless formality theory' has received consideration of

this Court in M.C. Mehta v. Union of India, [1999] 6 SCC 237. It was

observed as under:

"Before we go into the final aspect of this contention, we would

like to state that case relating to breach of natural justice do

also occur where all facts are not admitted or are not all beyond

dispute. In the context of those cases there is a considerable

case-law and literature as to whether relief can be refused even if

the court thinks that the case of the applicant is not one of `real

substance' or that there is no substantial possibility of his

success or that the result will not be different, even if natural

justice is followed (See Malloch v. Aberdeen Corpn., [1971] 2 All

ER 1278, HL (per Lord Reid and Lord Wilberforce), Glynn v. Keele

University, [1971] 2 All ER 89; Cinnamond v. British Airports

Authority, [1980] 2 All ER 368, CA and other cases where such a

view has been held. The latest addition to this view is R. v.

Ealing Magistrates. Court, ex p. Fannaran, (1996) 8 Admn. LR 351,

358) See de Smith, Suppl. P.89 (1998) where Straughton, L.J. held

that there must be `demonstrable beyond doubt. that the result

would have been different. Lord Woolf in Lloyd v. McMohan, [1987] 1

All ER 1118, CA has also not disfavoured refusal of discretion in

certain cases of breach of natural justice. The New Zealand Court

in McCarthy v. Grant, (1959) NZLR 1014 however goes halfway when it

says that (as in the case of bias), it is sufficient for the

applicant to show that there is `real likelihood-not certainty- of

prejudice.' On the other hand, Garner Administrative Law (8th Edn.

1996. pp.271-72) says that slight proof that the result would have

been different is sufficient. On the other side of the argument, we

have apart from Ridge v. Baldwin, (1964) AC 40: [1963] 2 All ER 66,

HL), Megarry, J. in John v. Rees, [1969] 2 All ER 274 stating that

there are always `open and shut cases. and no absolute rule of

proof of prejudice can be laid down. Merits are not for the court

but for the authority to consider. Ackner, J has said that the

`useless formality theory' is a dangerous one and, however

inconvenient, natural justice must be followed. His Lordship

observed that `convenience and justice are often not on speaking

terms' More recently, Lord Bingham has deprecated the `useless

formality theory' in R. v. Chief Constable of the Thames Valley

Police Forces, ex p. Cotton (1990 IRLR 344) by giving six reasons

(see also his article `Should Public Law Remedies be

Discretionary?" 1991 PL. p.64). A detailed and emphatic criticism

of the `useless formality theory. has been made much earlier in

`Natural Justice, Substance or Shadow' by Prof. D.H. Clark of

Canada (see 1975 PL.pp.27-63) contending that Malloch (supra) and

Glynn (supra) were wrongly decided. Foulkes (Administrative Law,

8th Edn. 1996, p.323), Craig (Administrative Law, 3rd Edn. P.596)

and others say that the court cannot prejudge what is to be decided

by the decision-making authority. De Smith (5th Edn. 1994, paras

10.031 to 10.036) says courts have not yet committed themselves to

any one view though discretion is always with the court. Wade

(Administrative Law, 5th Edn. 1994, pp.526-530) says that while

futile writs may not be issued, a distinction has to be made

according to the nature of the decision. Thus, in relation to cases

other than those relating to admitted or indisputable facts, there

is a considerable divergence of opinion whether the applicant can

be compelled to prove that the outcome will be in his favour or he

has to prove a case of substance or if he can prove a `real

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likelihood' of success or if he is entitled to relief even if there

is some remote chance of success. We may, however, point out that

even in cases where the facts are not all admitted or beyond

dispute, there is a considerable unanimity that the courts can, in

exercise of their `discretion', refuse certiorari, prohibition,

mandamus or injunction even though natural justice is not followed.

We may also state that there is yet another line of cases as in

State Bank of Patiala v. S.K. Sharma, [1996] 3 SCC 364 and Rajendra

Singh v. State of M.P., [1996] 5 SCC 460 that even in relation to

statutory provisions requiring notice, a distinction is to be made

between cases where the provision is intended for individual

benefit and where a provision is intended to protect public

interest. In the former case, it can be waived while in the case of

the latter, it cannot be waived.

We do not propose to express any opinion on the correctness or

otherwise of the `useless formality theory' and leave the matter

for decision in an appropriate case, inasmuch as the case before

us, `admitted and indisputable' facts show that grant of a writ

will be in vain as pointed by Chinnappa Reddy, J."

As was observed by this Court we need not to go into `useless formality

theory' in detail; in view of the fact that no prejudice has been shown. As

is rightly pointed out by learned counsel for the appellant unless failure

of justice is occasioned or that it would not be in public interest to do

so in particular case, this Court may refuse to grant relief to the

concerned employee. (see Gadde Venkateswara Rao v. Govt. of A.P. and Ors.,

AIR (1966) SC 828). It is to be noted that legal formulations cannot be

divorced from the fact situation of the case. Personal hearing was granted

by the Appellate Authority, though not statutorily prescribed. In a given

case post-decisional hearing can obliterate the procedural deficiency of a

pre-decisional hearing. (See Charan Lal Sahu v. Union of India etc., AIR

(1990) SC 1480.

The aforesaid position in law was again reiterated in Canara Bank and Ors.

v. Debasis Das and Ors., [2003] 4 SCC 557.

Inevitably, the conclusion arrived at by the Division Bench that there was

violation of principles of natural justice cannot be maintained.

Coming to the question whether the punishment awarded was disproportionate,

it is to be noted that the various allegations as laid in the departmental

proceedings reveal that several acts of misconduct unbecoming a bank

official were committed by the respondent.

It is to be noted that the detailed charge sheets were served on the

respondent-employee who not only submitted written reply, but also

participated in the proceedings. His explanations were considered and the

Inquiry Officer held the charges to have been amply proved. He recommended

dismissal from service. The same was accepted by the Disciplinary

Authority. The proved charges clearly established that the respondent-

employee failed to discharge his duties with utmost integrity, honesty,

devotion and diligence and his acts were prejudicial to the interest of the

bank. In the appeal before the prescribed Appellate Authority, the findings

of the Inquiry Officer were challenged. The Appellate Authority after

analyzing the materials on record found no substance in the appeal.

The scope of interference with quantum of punishment has been the subject-

matter of various decisions of this Court. Such interference cannot be a

routine matter.

Lord Greene said in 1948 in the famous Wednesbury case (1948 (1) KB 223)

that when a statute gave discretion to an administrator to take a decision,

the scope of judicial review would remain limited. He said that

interference was not permissible unless one or the other of the following

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conditions was satisfied, namely the order was contrary to law, or relevant

factors were not considered, or irrelevant factors were considered; or the

decision was one which no reasonable person could have taken. These

principles were consistently followed in the UK and in India to judge the

validity of administrative action. It is equally well known that in 1983,

Lord Diplock in Council for Civil Services Union v. Minister of Civil

Service, (1983) 1 AC 768 (called the CCSU case) summarized the principles

of judicial review of administrative action as based upon one or other of

the following viz., illegality, procedural irregularity and irrationality.

He, however, opined that ``proportionality'' was a "future possibility".

In Om Kumar and Ors. v. Union of India, [2001] 2 SCC 386, this Court

observed, inter alia, as follows:

"The principle originated in Prussia in the nineteenth century and

has since been adopted in Germany, France and other European

countries. The European Court of Justice at Luxembourg and the

European Court of Human Rights at Strasbourg have applied the

principle while judging the validity of administrative action. But

even long before that, the Indian Supreme Court has applied the

principle of ``proportionality'' to legislative action since 1950,

as stated in detail below.

By "proportionality", we mean the question whether, while

regulating exercise of fundamental rights, the appropriate or

least-restrictive choice of measures has been made by the

legislature or the administrator so as to achieve the object of the

legislation or the purpose of the administrative order, as the case

may be. Under the principle, the court will see that the

legislature and the administrative authority ``maintain a proper

balance between the adverse effects which the legislation or the

administrative order may have on the rights, liberties or interests

of persons keeping in mind the purpose which they were intended to

serve''. The legislature and the administrative authority are,

however, given an area of discretion or a range of choices but as

to whether the choice made infringes the rights excessively or not

is for the court. That is what is meant by proportionality.

xxx xxx xxx xxx xxx

The development of the principle of ``strict scrutiny'' or

``proportionality'' in administrative law in England is, however,

recent. Administrative action was traditionally being tested on

Wednesbury grounds. But in the last few years, administrative

action affecting the freedom of expression or liberty has been

declared invalid in several cases applying the principle of

``strict scrutiny''. In the case of these freedoms, Wednesbury

principles are no longer applied. The courts in England could not

expressly apply proportionality in the absence of the convention

but tried to safeguard the rights zealously by treating the said

rights as basic to the common law and the courts then applied the

strict scrutiny test. In the Spycatcher case Attorney General v.

Guardian Newspapers Ltd., (No.2) (1990) 1 AC 109 (at pp. 283-284),

Lord Goff stated that there was no inconsistency between the

convention and the common law. In Derbyshire County Council v.

Times Newspapers Ltd., (1993) AC 534, Lord Keith treated freedom of

expression as part of common law. Recently, in R. v. Secy. of State

for Home Deptt., ex p. Simms, [1999] 3 All ER 400 (HL), the right

of a prisoner to grant an interview to a journalist was upheld

treating the right as part of the common law. Lord Hobhouse held

that the policy of the administrator was disproportionate. The need

for a more intense and anxious judicial scrutiny in administrative

decisions which engage fundamental human rights was re-emphasised

in in R. v. Lord Saville ex p., [1999] 4 All ER 860 CA, at pp.

870,872. In all these cases, the English Courts applied the

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``strict scrutiny'' test rather than describe the test as one of

``proportionality''. But, in any event, in respect of these rights

``Wednesbury'' rule has ceased to apply.

However, the principle of "strict scrutiny" or "proportionality"

and primary review came to be explained in R. v. Secy. of State for

the Home Deptt. ex p Brind, (1991) 1 AC 696. That case related to

directions given by the Home Secretary under the Broadcasting Act,

1981 requiring BBC and IBA to refrain from broadcasting certain

matters through persons who represented organizations which were

proscribed under legislation concerning the prevention of

terrorism. The extent of prohibition was linked with the direct

statement made by the members of the organizations. It did not

however, for example, preclude the broadcasting by such persons

through the medium of a film, provided there was a "voice-over"

account, paraphrasing what they said. The applicant's claim was

based directly on the European Convention of Human Rights. Lord

Bridge noticed that the Convention rights were not still expressly

engrafted into English law but stated that freedom of expression

was basic to the Common law and that, even in the absence of the

Convention, English Courts could go into the question (see p.

748-49).

"whether the Secretary of State, in the exercise of his discretion,

could reasonably impose the restriction he has imposed on the

broadcasting organisations"

and that the courts were

"not perfectly entitled to start from the premise that any

restriction of the right to freedom of expression requires to be

justified and nothing less than an important public interest will

be sufficient to justify it".

Lord Templeman also said in the above case that the courts could go into

the question whether a reasonable minister could reasonably have concluded

that the interference with this freedom was justifiable. He said that ``in

terms of the Convention'' any such interference must be both necessary and

proportionate (ibid pp. 750-51).

In the famous passage, the seeds of the principle of primary and

secondary review by courts were planted in the administrative law

by Lord Bridge in the Brind case (1991) 1 AC 696. Where Convention

rights were in question the courts could exercise a right of

primary review. However, the courts would exercise a right of

secondary review based only on Wednesbury principles in cases not

affecting the rights under the Convention. Adverting to cases where

fundamental freedoms were not invoked and where administrative

action was questioned, it was said that the courts were then

confined only to a secondary review while the primary decision

would be with the administrator. Lord Bridge explained the primary

and secondary review as follows:

` "The primary judgment as to whether the particular

competing public interest justifying the particular restriction imposed

falls to be made by the Secretary of State to whom Parliament has entrusted

the discretion. But, we are entitled to exercise a secondary judgment by

asking whether a reasonable Secretary of State, on the material before him,

could reasonably make the primary judgment.''

But where an administrative action is challenged as "arbitrary" under

Article 14 on the basis of Royappa [1974] 4 SCC 3 (as in cases where

punishments in disciplinary cases are challenged), the question will be

whether the administrative order is ``rational'' or ``reasonable'' and the

test then is the Wednesbury test. The courts would then be confined only to

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a secondary role and will only have to see whether the administrator has

done well in his primary role, whether he has acted illegally or has

omitted relevant factors from consideration or has taken irrelevant factors

into consideration or whether his view is one which no reasonable person

could have taken. If his action does not satisfy these rules, it is to be

treated as arbitrary. In G.B. Mahajan v. Jalgaon Municipal Council, [1991]

3 SCC 91 at p. 111 Venkatachaliah, J. (as he then was) pointed out that

``reasonableness'' of the administrator under Article 14 in the context of

administrative law has to be judged from the stand point of Wednesbury

rules. In Tata Cellular v. Union of India, [1994] 6 SCC 651 at pp. 679-80),

Indian Express Newspapers Bombay (P) Ltd. v. Union of India, [1985] 1 SCC

641 at p. 691, Supreme Court Employees. Welfare Assn. v. Union of India,

[1989] 4 SCC 187 at p. 241 and U.P. Financial Corpn. v. Gem Cap(India) (P)

Ltd., [1993] 2 SCC 299 at p. 307 while judging whether the administrative

action is ``arbitrary'' under Article 14 (i.e. otherwise then being

discriminatory), this Court has confined itself to a Wednesbury review

always.

The principles explained in the last preceding paragraph in respect

of Article 14 are now to be applied here where the question of

``arbitrariness'' of the order of punishment is questioned under

Article 14.

xxx xxx xxx xxx xxx

Thus, from the above principles and decided cases, it must be held

that where an administrative decision relating to punishment in

disciplinary cases is questioned as ``arbitrary'' under Article 14,

the court is confined to Wednesbury principles as a secondary

reviewing authority. The court will not apply proportionality as a

primary reviewing court because no issue of fundamental freedoms

nor of discrimination under Article 14 applies in such a context.

The court while reviewing punishment and if it is satisfied that

Wednesbury principles are violated, it has normally to remit the

matter to the administrator for a fresh decision as to the quantum

of punishment. Only in rare cases where there has been long delay

in the time taken by the disciplinary proceedings and in the time

taken in the courts, and such extreme or rare cases can the court

substitute its own view as to the quantum of punishment."

In B.C. Chaturvedi v. Union of India and Ors., [1995] 6 SCC 749 it was

observed:

"A review of the above legal position would establish that the

disciplinary authority, and on appeal the appellate authority,

being fact-finding authorities have exclusive power to consider the

evidence with a view to maintain discipline. They are invested with

the discretion to impose appropriate punishment keeping in view the

magnitude or gravity of the misconduct. The High Court/Tribunal,

while exercising the power of judicial review, cannot normally

substitute its own conclusion on penalty and impose some other

penalty. If the punishment imposed by the disciplinary authority or

the appellate authority shocks the conscience of the High

Court/Tribunal, it would appropriately mould the relief, either

directing the disciplinary/appellate authority to reconsider the

penalty imposed, or to shorten the litigation, it may itself, in

exceptional and rare cases, impose appropriate punishment with

cogent reasons in support thereof."

In Union of India and Anr. v. G. Ganayutham, [1997] 7 SCC 463, this Court

summed up the position relating to proportionality in paragraphs 31 and 32,

which read as follows:

"The current position of proportionality in administrative law in

England and India can be summarized as follows:

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(1) To judge the validity of any administrative order or

statutory discretion, normally the Wednesbury test is to be

applied to find out if the decision was illegal or suffered

from procedural improprieties or was one which no sensible

decision-maker could, on the material before him and within

the framework of the law, have arrived at. The court would

consider whether relevant matters had not been taken into

account or whether irrelevant matters had been taken into

account or whether the action was not bona fide. The court

would also consider whether the decision was absurd or

perverse. The court would not however go into the

correctness of the choice made by the administrator amongst

the various alternatives open to him. Nor could the court

substitute its decision to that of the administrator. This

is the Wednesbury (1948 1 KB 223) test.

(2) The court would not interfere with the administrator's

decision unless it was illegal or suffered from procedural

impropriety or was irrational \026 in the sense that it was in

outrageous defiance of logic or moral standards. The

possibility of other tests, including proportionality being

brought into English administrative law in future is not

ruled out. These are the CCSU (1985 AC 374) principles.

(3)(a) As per Bugdaycay (1987 AC 514), Brind (1991 (1) AC

696) and Smith (1996 (1) All ER 257) as long as the

Convention is not incorporated into English law, the

English courts merely exercise a secondary judgment to find

out if the decision-maker could have, on the material

before him, arrived at the primary judgment in the manner

he has done.

(3)(b) If the Convention is incorporated in England making

available the principle of proportionality, then the English courts

will render primary judgment on the validity of the administrative

action and find out if the restriction is disproportionate or

excessive or is not based upon a fair balancing of the fundamental

freedom and the need for the restriction thereupon.

(4)(a) The position in our country, in administrative law,

where no fundamental freedoms as aforesaid are involved, is

that the courts/tribunals will only play a secondary role

while the primary judgment as to reasonableness will remain

with the executive or administrative authority. The

secondary judgment of the court is to be based on

Wednesbury and CCSU principles as stated by Lord Greene and

Lord Diplock respectively to find if the executive or

administrative authority has reasonably arrived at his

decision as the primary authority.

(4)(b) Whether in the case of administrative or executive

action affecting fundamental freedoms, the courts in our

country will apply the principle of ``proportionality'' and

assume a primary role, is left open, to be decided in an

appropriate case where such action is alleged to offend

fundamental freedoms. It will be then necessary to decide

whether the courts will have a primary role only if the

freedoms under Articles 19, 21 etc. are involved and not

for Article 14.

Finally, we come to the present case. It is not contended before us

that any fundamental freedom is affected. We need not therefore go

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into the question of ``proportionality''. There is no contention

that the punishment imposed is illegal or vitiated by procedural

impropriety. As to ``irrationality'', there is no finding by the

Tribunal that the decision is one which no sensible person who

weighed the pros and cons could have arrived at nor is there a

finding, based on material, that the punishment is in

``outrageous'' defiance of logic. Neither Wednesbury nor CCSU tests

are satisfied. We have still to explain "Ranjit Thakur, [1987] 4

SCC 611)".

In Chairman and Managing Director, United Commercial Bank and Others v.

P.C. Kakkar, [2003] 4 SCC 364 the rigid standards to be adopted when

considering the case of Bank officials were highlighted.

Aforesaid being the position, the decisions of the learned Single Judge on

the quantum of punishment and of the Division Bench regarding alleged

violation of the principles of natural justice cannot be maintained and

are, therefore, set aside. The inevitable conclusion is that the order of

dismissal as passed by the Appellant-Bank does not suffer from any

infirmity. Appeal is accordingly allowed, but with no order as to costs.