1970 (1) TMI 81 - SC - Indian Laws

Summary

Issues:
1. Validity of the order passed by the Divisional Forest Officer cancelling the sleeper tally.
2. Jurisdiction of the High Court under Article 226 of the Constitution in cases involving contractual disputes with public authorities.
3. Compliance with principles of natural justice in administrative orders affecting rights to property.

Analysis:

Issue 1: Validity of the order cancelling the sleeper tally
The respondent purchased the right to cut timber but the Divisional Forest Officer later cancelled the sleeper tally, treating the timber as removed in November 1966 instead of October 1966. The High Court held that the order was made on irrelevant considerations and deprived the respondent of a valuable right. The Supreme Court agreed that the order was passed contrary to the basic rules of natural justice, as the respondent was not given an opportunity to be heard before the order was made. The Court emphasized the importance of natural justice even in administrative orders affecting property rights, citing the case of State of Orissa v. Dr. (Miss) Binapani Dei.

Issue 2: Jurisdiction of High Court under Article 226
The Division Bench of the High Court reversed the single Judge's decision, holding that the respondent could move a petition under Article 226 of the Constitution when claiming unequal treatment in a contract. The Supreme Court concurred, stating that the respondent could seek relief through a writ petition against arbitrary actions of a public authority, even if arising from a breach of contract, especially when the action challenged was of a public authority with statutory powers.

Issue 3: Compliance with principles of natural justice
The Forest Authorities argued that the objection regarding natural justice was not raised before the High Court. However, the Supreme Court noted that the objection was mentioned in the petition, and as there was no reply to it, the Court held that the order must be set aside for being passed contrary to natural justice. The Court emphasized that every citizen is protected against arbitrary authority by the State or its officers, and failure to adhere to natural justice principles in administrative orders affecting rights to property renders the order illegal.

In conclusion, the Supreme Court dismissed the appeal, affirming the importance of natural justice in administrative orders, clarifying the jurisdiction of the High Court under Article 226 in contractual disputes with public authorities, and emphasizing the need for proper procedures even in administrative actions affecting property rights.