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TMI Blog1994 (7) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... g various allegations with reference to what allegedly happened at the time of personal hearing before the learned adjudicating authority was also filed. The Bench, after hearing the parties, felt that that issue could be taken up for consideration at the time of final disposal and on consideration prima facie of the other materials on record, directed the appellants to pre-deposit a sum of Rs. 20 lakhs by 31st May, 1993 and report compliance. This order was challenged by way of a writ in the High Court of Judicature at Madras in W.P. 6373 of 1993 and the High Court passed an interim order directing the appellants M/s. Coronation Litho Works to pre-deposit a sum of Rs. 7,00,000 and the Department took up the matter by way of a Writ Appeal in W.A. No. 1244 of 1993 challenging the order of the learned Single Judge of the High Court. The Division Bench of the High Court in the Writ Appeal, by setting aside the order of the learned Single Judge, directed the appellant company to pay a further sum of Rs. 6,00,000 in addition to Rs. 7,00,000 which was directed to be pre-deposited by the learned Single Judge. In other words the appellant company was directed to make a total pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record of personal hearing was on 22-10-1991 and not on 21-10-1991 as stated by the appellant). (2) The fact that the appellant Shri Nataraj Prabhu was present at the time of personal hearing is not disputed. The learned counsel referred to the affidavit of Shri Nataraj Prabhu wherein he has sworn to the fact that he entered the chamber of the Collector at 4.10 P.M. and the Collector expressed that he had repeatedly in the past been telling this man (meaning thereby the Deponent) that he and his Firm has got into the problem like this and now that the Firm has got into the problem because of the Deponent, both Deponent and the Firm must face all the consequences. He was continuously blaming the Deponent for being legalistic and creating problems. Deponent could see that Shri Vijayaraghvan, Advocate, for the Firm was unnerved by the continuous blaming of the Deponent in which Collector indulged for about five minutes ..... The Collector said that he agrees to that on all the above points he accepts the contentions but that he has decided to confirm the Demand and impose Penalty. He further said that the whole problem is that the parties are making Asses of Consultants and the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned counsel further urged that the appellant specifically prayed for permission to examine the President of Sivakasi Master Printers Association so that the views of the printing industry in and around Sivakasi could be elicited from that witness to show that in the circumstances no mala fides could be attributed to appellant Coronation Litho Works for undertaking only printing of plain boards. The witness was not made available resulting in prejudice to the appellants. The learned counsel referred to the grounds of appeal, Part E, and urged that the appellants at the earliest and proper time before the proper forum vindicated their grievances about want of proper opportunity, want of fairness and how" the personal hearing before the adjudicating authority proved a farce." The learned counsel referred to the following appeal grounds :- 1.0 It is painful for the Appellant to submit that in a matter of serious threat of penalties/confiscation of Land, Plant and Machinery the so-called personal hearing conducted by the Collector proved a farce. 2.0 The events as they occurred have been set out in the enclosed note, which has also been annexed to this appeal as Annexure B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed a para-wise remarks, which cannot be equated to a counter-affidavit. In adverting to this argument the learned counsel contended that it is a well-settled position of law that when an affidavit is filed by the aggrieved party alleging bias and making averments and if the averments are not traversed by the other side, the affidavit will have to be accepted and placed in this regard reliance on the ruling of the Allahabad High Court in the case of Avadh Narain Singh, Applicant v. Superintendent of Police and Others, reported in AIR 1960 Allahabad 304 (at page 307 - para 8). Reliance was also placed on the ruling of the Supreme Court in the case of Union of India v. T.R. Varma, reported in A.I.R. 1957 S.C. 882 to contend that the Department should have filed a counter- affidavit and when there is no counter-affidavit controverting the averments in the affidavit, the averments will have to be accepted. The learned counsel referred to the ADMINISTRATIVE LAW by P.P. Craig and dilated on the tests that have been taken by the courts in respect of reasonable suspicion of bias and the real likelihood of bias etc. Strong reliance was placed on the recent judgment of the Madras High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rged that the affidavit filed by the appellant Shri Nataraj Prabhu was countered by the Collector concerned by his para-wise comments and it is a practice in the Department that they do not file any counter-affidavit. 6. We have given a patient and extensive hearing to the parties and also given our anxious consideration to the submissions made before us and gone through the entire records including the record of personal hearing. The primary question we address ourselves to at the outset is as to whether the appellants were not given a fair and reasonable opportunity of hearing and whether there was any reasonable basis for the appellants to apprehend that they would not get a fair and objective hearing at the hands of the adjudicating authority and whether the apprehension in the mind of the appellants that they would not get a fair hearing and the adjudicating authority was prejudiced was reasonable apprehension in the facts and circumstances of the case or merely fanciful and an imaginary one not meriting consideration. It is a legal axiom that one of the important facets in dispensation of justice by Courts and Tribunals and quasi-judicial authorities is to crea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is essential to secure order and security. In the magnum opus book on Administrative Law by P.P. Craig, which is locus classicus on the subject, the learned author while dealing with tests for bias has observed as under : The test for determining bias in cases other than those concerning pecuniary interest is, in short, in a state of confusion. Two tests have been espoused by the courts, that of real likelihood of bias," and that of reasonable suspicion of bias. What Lord Denning M.R. does in the Lannon case is not simply to reject Camborne and Barnsley. His Lordship is clear that the bias issue is not to be considered from the perspective of the justice impugned himself, who is unlikely to be biased. The criterion is our ever-present reasonable man. If a reasonable man would believe that there was a real likelihood of bias then the decision is overturned; surmise or conjecture is insufficient. The root of the confusion for later cases is that Lord Denning M.R. begins by approving of the Lord Hewart C.J. test and ends by talking of real likelihood. There is however no inconsistency here. Thus far we have seen that the perspective from which to view bias is to be that of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t should be further modified when the administrative body, such as a local authority, necessarily has an interest in the outcome of a decision. In such situations its decision should only be overturned for bias when it acted in such a way prior to its decision that it could not properly have exercised its discretion, taking due account of its interest in the proceedings." His Lordship Justice Bakthavatsalam in the highly educative and eminently readable judgment, if I may say so with profound respect, in the cause celebre J. Jayalalitha v. T.N. Seshan, C.E.O. Another, reported in 1993 Writ Law Reporter, page 734, cited supra, while making an exhaustive analysis of the various facets and intricacies of the doctrine of bias in all its ramifications with characteristic erudition and lucidity with citation of authorities viz. (1) Metropolitan Properties v. Lanon (1968 (3) All England Law Reports - 304); (2) The King v. Sussex Justices Ex. Parte McCarthy (1924-1-K.B. 256); (3) Ranjit Thakur v. Union of India (AIR 1987 S.C. 2386) and (4) Manak Lal v. Dr. Prem Chand (AIR 1957 S.C. 425), has concluded as under : Relying upon these decisions and principles laid down there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) : ... it is not merely of some importance, but of fundamental importance, that justice should both be done and be manifestly seem to be done. In the famous off-quoted case of A.K. Kraipak v. Union of India (AIR 1970 SC 150) the Supreme Court summed up the concept of natural justice and its various facets such as bias, etc., as follows : ... The aim of the rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice. These rules can operate only in areas not covered by any law validly made. In other words they do not supplant the law of the land but supplement it. The concept of natural justice has undergone a great deal of change in recent years. In the past it was thought that it included just two rules, namely (1) no one shall be a judge in his own case (Nemo debet esse judex propria cause), (2) no decision shall be given against a party without affording him a reasonable hearing (Audi alteram partem). Very soon thereafter a third rule was envisaged and that is that quasi-judicial enquiries must be held in good faith, without bias and not arbitrarily or unreasonably. But in the course of years many more subsidiary rules came ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and last but not the least (5) justice should not only be done but should manifestly be seen to be done. 7. In the present case strong averments have been made in the affidavit, and the summing up of the appellants pleas by the Adjudicating Authority in regard to personal hearing as well as the impugned order is indeed very cryptic particularly when in regard to the other parties the summation by the adjudicating authority is rather elaborate and in detail. In a case involving considerable magnitude of revenue it would be difficult to accept the plea of the Department that the appellants without addressing any arguments were content to go away with mere written submissions. The various averments in the affidavit certainly do not indicate that there was cordiality and harmony between the appellants and the learned adjudicating authority. It is obvious and the inference is irresistible that atmosphere must have been emotionally surcharged following certain verbal utterances as otherwise the appellant walking out of the personal hearing without arguing the case is not understandable in a case of this magnitude. The plea of the learned SDR that there was no practice to file counter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or biased, in the facts and circumstances of the case elaborately set out above and on the application of cardinal and guiding principles laid by the various Courts of law on the issue in question, we are inclined to think that the apprehensions in the mind of the appellants of reasonable likelihood of bias on the part of the adjudicating authority even though there was no actual bias, could not be altogether ruled out as totally imaginary, fanciful and improbable and we are informed that the present incumbent to sit in adjudication over the issue is a different authority and keeping this factor in mind and for the reasons stated above, we are inclined to think that in the interests of justice it is but expedient and proper that the impugned order should be set aside and the matter should be remitted to the adjudicating authority, who is a different incumbent now, for re-hearing the entire issue in accordance with law by affording the appellants a reasonable opportunity to put forth all their pleas and adduce all evidence in accordance with law in answer to the charges in the show cause notice. While making this remand, which has become inevitable in the above context, we also bea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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