Doctrine of 'Duty to Act fairly' - Indian Laws - General

Doctrine of Duty to Act fairly The principle in R. v. Electricity Commissioners, or Ridge v. Baldwin, may not apply to administrative functions, but another concept which developed at a later stage and accepted in public law field and found place in Administrative Law of duty to act fairly would apply to administrative actions as well. By now, it is well settled that when an administrative action is likely to affect rights of subjects, there would be a duty on the part of the authority to act fairly. In Pearlberg v. Varty (Inspector of Taxes), Lord Pearson said; A tribunal to whom judicial or quasi-judicial functions are entrusted is held to be required to apply those principles (i.e. the rules of natural justice) in performing those functions unless there is a provision to title contrary. But where some person or body is entrusted by Parliament that administrative or executive functions there is no presumption that compliance with the principles of natural justice is required although, as Parliament is not to be presumed to act unfairly , the courts may be able in suitable cases (perhaps always) to imply an obligation to act with fairness. (emphasis supplied) In R. v. Commissioner for Racial Equality, Lord Diplock stated; Where an act of Parliament confers upon an administrative body functions which involve its making decisions which affect to their detriment the rights Page 1851 of other persons or curtail their liberty to do as they please, there is a presumption that Parliament intended that the administrative body should act fairly towards those persons who will be affected by their decisions. The above principles have been accepted and applied in India also. In the leading case of Keshav Mills Co. Ltd. v. Union of India, a textile mill was closed down. A Committee was appointed by the Government of India to investigate into the affairs of the mill-company under the Industries (Development and Regulation) Act, 1951. After affording opportunity to the Company, a report was prepared by the Committee and submitted to the Government. A copy of the report, however, was not supplied to the Company. On the basis of the report, the Government took over the management of the Company. The said action was challenged by the company inter alia on the ground of violation of principles of natural justice inasmuch as no copy of the report submitted by the Committed to the Government was supplied to the Company nor was hearing afforded before finally deciding to take over the management. Rejecting the contention and observing that no prejudice had been caused to the mill-company, this Court did not interfere with the order. Speaking for the Court, A.K. Mukherjea, J. stated: The second question, however, as to what are the principles of natural justice that should regulate an administrative act or order is a much more difficult one to answer. We do not think it either feasible or even desirable to lay down any fixed or rigorous yardstick in this manner. The concept of natural justice cannot be put into a straitjacket. It is futile, therefore, to look for definitions or standards of natural justice from various decisions and then try to apply them to the facts of any given case . The only essential point that has to be kept in mind in all cases is that the person concerned should have a reasonable opportunity of presenting his case and that the administrative authority concerned should act fairly, impartially and reasonably. Where administrative officers are concerned, the duty is not so much to act judicially as to act fairly. (emphasis supplied) In Mohinder Singh Gill v. Chief Election Commission after considering several cases, Krishna Iyer, J. stated : Once we understand the soul of the rule as fairplay in action -and it is so - we must hold that it extends to both the fields. After all, administrative power in a democratic set-up is not allergic to fairness in action and discretionary executive justice cannot degenerate into unilateral injustice. Nor is there ground to be frightened of delay, inconvenience and expense, if natural justice gains access. For fairness itself is a flexible, pragmatic and relative concept, not a rigid, ritualistic or sophisticated abstraction. It is not a bull in a china shop, nor a bee in one s bonnet: Its essence is good conscience in a given situation; nothing more - but nothing less. (emphasis supplied) In Nally Bharat Engineering Co. Ltd. v. State of Bihar, the Government, on an application by a dismissed workman transferred his case from one Labour Court to another Labour Court without issuing a notice or giving opportunity to the employer. Setting aside the order and referring to several cases, the Supreme Court invoked the acting fairly doctrine. The Court stated: Fairness, in our opinion, is a fundamental principle of good administration. It is a rule to ensure the vast power in the modern State is not abused but properly exercised. The State power is used for proper and not for improper purposes. The authority is not misguided by extraneous or irrelevant considerations. Fairness, is also a principle to ensure that statutory authority arrives at a just decision either in promoting the interest or affecting the rights of persons. To use the timehallowed phrase that justice should not only be done but be seen to be done is the essence of fairness equally applicable to administrative authorities. Fairness is thus a prime test for proper and good administration. It has no set form or procedure. It depends upon the facts of each case . (emphasis supplied) Quoting the observations of Paul Jackson, the Court said: It may be noted that the terms fairness of procedure , fair play in action , duty to act fairly are perhaps used as alternatives to natural justice without drawing any distinction. But Prof Paul Jackson points out that such phrases may sometimes be used to refer not to the obligation to observe the principles of natural justice but, on the contrary, to refer to a standard of behavior which increasingly, the courts require to be followed even in circumstances where the duty to observe natural justice is inapplicable . (emphasis supplied) de Smith states: The principal value of the introduction of the duty to act fairly into the courts vocabulary has been to assist them to extend the benefit of basic procedural protections to situations where it would be both confusing to characterize as judicial or even quasi-judicial, the decision-makers functions, and inappropriate to insist on a procedure analogous to a trial. [ Judicial Review of Administrative Action ; (1995); p. 399] It is thus clear that the doctrine of fairness has become all pervasive. As has been said, the acting fairly doctrine proved useful as a device for evading confusion which prevailed in the past. The courts now have two strings to their bow. An administrative act may be held to be subject to the requirement and observance of natural justice either because it affects rights or interests and hence would involve a duty to act judicially or it may be administrative, pure and simple, and yet, may require basic procedural Page 1853 protection which would involve duty to act fairly . [Wade Forsyth; Administrative Law ; (2005); pp. 492-94; de Smith; Judicial Review of Administrative Action , (1995); pp. 397-98] Acting fairly is thus an additional weapon in the armoury of the court. [SBP. CO. VERSUS PATEL ENGINEERING LTD. ANR.- 2005 (10) TMI 495 - SUPREME COURT]