1967 (3) TMI 105 - SC - Indian Laws

Summary

Issues Involved:
1. Necessity of a speaking order by the Union of India when dismissing a revision and confirming the order of the State Government.
2. Compliance with the principles of natural justice and fair play.
3. Requirement for the Central Government to provide reasons for its decisions in quasi-judicial functions.

Detailed Analysis:

1. Necessity of a Speaking Order by the Union of India:
The primary issue was whether the Union of India was bound to make a speaking order when dismissing a revision and confirming the order of the State of Andhra Pradesh. The court highlighted that the Central Government, while exercising its powers of revision under Rule 55 of the Mineral Concession Rules, must take into consideration not only the material before the State Government but also the comments and counter-comments submitted by the parties. The court emphasized that a speaking order is necessary to ensure transparency and accountability, especially when the decision can be challenged in an appeal to the Supreme Court.

2. Compliance with Principles of Natural Justice and Fair Play:
The appellant argued that the Union of India violated principles of natural justice and fair play by not providing reasons for its decision and not granting a personal hearing. The court noted that in exercising quasi-judicial powers, the Central Government is expected to follow a judicial procedure, which includes giving reasons for its decisions. This ensures that the parties understand the basis of the decision, and it provides a foundation for any further appeals. The court referenced previous judgments, including Shivji Nathubhai v. The Union of India and M.P. Industries v. Union, to support the view that the Central Government must act judicially and provide reasons for its decisions.

3. Requirement for the Central Government to Provide Reasons:
The court examined whether it was incumbent on the Central Government to provide reasons for its decisions in review. It was argued that the exercise of judicial or quasi-judicial powers entails an obligation to give reasons. The court cited several cases, including Harinagar Sugar Mills v. Shyam Sundar Jhunjhunwala and Sardar Govindrao v. State, to illustrate that providing reasons is essential for judicial scrutiny and to prevent arbitrariness. The court concluded that the absence of reasons in the Central Government's order makes it difficult for the appellate court to review the decision effectively. The court emphasized that a reasoned order is a desirable condition of judicial disposal and helps maintain the integrity of the judicial process.

Conclusion:
The Supreme Court allowed the appeals, set aside the orders of the Central Government dated June 22, 1966, and directed the Central Government to decide the review applications afresh in light of the observations made. The court reiterated the importance of providing reasons for decisions in quasi-judicial functions to ensure fairness, transparency, and accountability. The appellant was awarded costs throughout from the third respondent.