2009 (3) TMI 526 - SC - Service Tax

Natural Justice - Challenge in this appeal is to the order passed by a learned Single Judge of the Allahabad High Court allowing the Revision Petition filed by respondent no.2. Though various points were urged it is not necessary to go into those in detail as the revision petition was allowed even without issuing notice to the present appellants and to the other parties. Whether principles of natural justice have been violated; and if so, to what extent any prejudice has been caused? Held that natural justice is essence of fair adjudication and to be ranked as fundamental. Purpose of following principle of natural justice is to prevent miscarriage of justice. Notice and hearing required as per principle of natural justice. Impugned order set aside. Matter remanded.

Summary

Issues Involved:
1. Violation of principles of natural justice.
2. Applicability of the "useless formality theory."

Detailed Analysis:

1. Violation of Principles of Natural Justice:

The appeal challenges an order by a Single Judge of the Allahabad High Court, which allowed a Revision Petition without issuing notice to the present appellants and other parties. The Supreme Court emphasized the fundamental importance of natural justice, which is essentially "commonsense justice." It is based on natural ideals and human values, ensuring that justice is administered in a fair and reasonable manner.

The Court reiterated that natural justice is not codified but ingrained in human conscience, aiming to prevent injustice by ensuring that every party has a fair opportunity to present their case. The principle of "audi alteram partem" (no one should be condemned unheard) is central to natural justice. This principle mandates that notice must be given to a party before any adverse order is passed against them, providing them with a reasonable opportunity to make their representation.

The Court cited several landmark cases to underscore the importance of this principle, including Cooper v. Wandsworth Board of Works, which highlighted that even God gave Adam a chance to defend himself before passing judgment. The Court also referenced Lord Wright's observations in General Council of Medical Education & Registration of U.K. v. Sanckman, emphasizing that a tribunal should be impartial and provide a "full and fair opportunity" to all parties to be heard.

The judgment also noted that natural justice has evolved to encompass not just judicial acts but also administrative actions that have civil consequences. This broad interpretation ensures that any action affecting a citizen's civil life adheres to the principles of natural justice.

2. Applicability of the "Useless Formality Theory":

The Court addressed the "useless formality theory," which suggests that in certain cases, providing an opportunity to be heard may not change the outcome and thus can be considered a formality. However, the Court expressed caution against this theory, citing various judgments and scholarly opinions that emphasize the inherent risks of bypassing natural justice on the grounds of convenience.

The Court referred to M.C. Mehta v. Union of India, which discussed the theory extensively, highlighting divergent views on whether relief can be refused if the outcome is unlikely to change even with adherence to natural justice. The Court ultimately refrained from expressing a definitive opinion on the theory's correctness, leaving it open for future consideration.

Conclusion:

The Supreme Court concluded that the principles of natural justice were violated as the High Court passed the impugned order without issuing notice to the appellants. The Court set aside the order and remitted the matter back to the High Court for fresh consideration after issuing the necessary notices. The appeal was allowed, emphasizing the fundamental role of natural justice in ensuring fair adjudication and preventing miscarriage of justice.