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TMI Blog1980 (2) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... pen the question of satisfaction has been imputed as an unwarranted endeavour of the Registrar "to review" his earlier order he being a creature of "the Act" cannot exercise review jurisdiction as no such power has been conferred on him by "the Act". It suffers from the same vice of lack of jurisdiction and is equally void. Relevant facts necessary for disposal of this application: The petitioner is a public limited company incorporated under "the Act". It requested respondent No. 3, M/s. Grindlays Bank Ltd. (hereinafter referred to as "the bank") on or about May 27, 1976, to grant overdraft facilities and by or pursuant to a mutual agreement a sum of Rs. 25 lakhs became due and owing from the petitioner to "the bank". The resultant charge was created in favour of "the bank". The petitioner got "the charge" registered with the Registrar of Companies, Assam (respondent No. 1) on June 23, 1976, as required u/s. 125 of "the Act". The petitioner contends that as "the bank" had declined to open an overdraft account in favour of the petitioner, in violation of the terms of the agreement, "the charge" created stood satisfied on the following day of its registration. As the char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gupta, the learned counsel for the bank, has relentlessly attacked the validity of the communication or order, vide annex. "A", on various grounds to be dealt with in due course. The learned counsel contends that the petitioner has had no judicially enforceable right or any legally protected right. Ergo, the counsel submits, that the petitioner cannot complain about denial of any legal right when it has had none. Counsel submits that the audi alter am partem rule was blatantly violated by the Registrar in issuing annex. "A" behind the back of "the bank". The principles of natural justice are engrafted in section 138(2) of "the Act". The learned counsel questions the legitimacy of the communication dated April 26, 1978, the touchstone of the petitioner's right. Neither ' audi alteram pattern rule' had been observed nor had the quasi-judicial authority observed the mandatory statutory requirement of service of prior notice before making the purported order. As such, the counsel contends that the order was null or invalid. However, the Registrar, a quasi-judicial authority, having had realized the invalidity of the order, proceeded to grant expost facto hearing. In the eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice, why payment or satisfaction should not by recorded as intimated to the Registrar. (3) If no cause is shown, the Registrar shall order that a memorandum of satisfaction shall be entered in the register of charges. (4) If cause is shown, the Registrar shall record a note to that effect in the register, and shall inform the company that he has done so. (5) Nothing in this section shall be deemed to affect the power of the Registrar to make an entry in the register of charges under section 139 other wise than on receipt of an intimation from the company". "140 . Copy of memorandum of satisfaction to be furnished to company. Where the Registrar enters a memorandum of satisfaction in whole or in part, in pursuance of section 138 or 139, he shall furnish the company with a copy of the memorandum". [Emphasis supplied] It appears from section 138(1) that a company is required to "give intimation to the Registrar of the satisfaction" within 30 days from the date of satisfaction. It is a unilateral act of the party. There is a time-limit fixed for lodging such intimation. Section 138(2) enjoins the Registrar "to cause a notice to be sent to the holder of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the register of charges was produced in court at the hearing and we found no such entry in the register. Before dealing with the contentions of the parties let me record that it is the common case that the Registrar is a statutory authority and not an executive creature. It is also admitted by the parties that quasi-judicial responsibilities are implied by the statute in the authority's function, it has been saddled with affecting the rights of parties and is bound to act quasi-judicially ; any order affecting the rights of parties must be made by it after prior notice and opportunity to show cause. The Registrar is required to follow the principles of natural justice in such proceedings and the first requirement is prior notice and opportunity to show cause. Once this position is admitted it must be held that the contention of the petitioner that the impugned order is bad for breach of the audi alteram partem rule has a strong force provided the petitioner had acquired any legal right which was nullified by the impugned order. Naturally two questions come up for consideration first, whether the petitioner had acquired any legal right by virtue of the correspondence, allegedly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the writ petitioner's legal right. These are all justiciable. At the conclusion of the argument Mr. J.P. Bhattacharjee, advocate for the petitioner, as well as Mr. D.P. Gupta, advocate for the respondent-bank, have submitted that the question as to the validity or legality of the order may not be determined in this writ application and should be left open for due determination by the Registrar in the pending proceeding. However, the learned counsel for the parties submitted that I might determine only the question as to the violation of the principles of natural justice enshrined in section 138(2) of the Act and its effect on annex. "A" (the communication dated April 26, 1978). As alluded, the parties conceded that the Registrar is a judicial authority and was bound to observe the principles of natural justice in making any order affecting any right of the parties. The learned counsel for the petitioner conceded that the effect of the communication dated April 26, 1978, while creating rights in its favour destroyed the right of the respondent-bank. It is also evident that the communication or order dated April 26, 1978, was made or rendered in violation of audi alteram pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice. The discretion is properly exercised when, after an order has been made ex parte in consequence of complaints by the Protector of Immigrants, the employer and his manager are given a fair opportunity to answer the complaints, and the order is put into operation only after a consideration of their explanations". In India their Lordships of the Supreme Court have given a new life and meaning to the principle; a new vista appropriate for India, a large democracy where Indians are ruled and governed by quasi-judicial and administrative tribunals. It is pretty onerous for the majority of Indians to come to the doors of the highest courts, complain about the breach of the audi alterant partem rule, get a declaration of invalidity of an order and to return back and face a de novo proceeding. It is unbearable for Indians to holster the expenses and to undergo long-drawn proceedings. In the fitness of things their Lordships of the Supreme Court have held in innumerable cases that ex post facto hearing or post hearing after notice or a full and fair de novo hearing by a quasi-judicial authority is permissible to insulate or rectify breach of natural justice committed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing, minimal may be, shall be afforded to the victims. In exceptional cases, the hearing may be soon after. The rule in Gill's case, AIR 1978 SC 851, and Maneka Gandhi's case, AIR 1978 SC 597 gives the guidelines". In my opinion, omission on the part of the quasi-judicial authority to serve notice inadvertently falls within the category of cases described by their Lordships as "exceptional cases". It is all the more necessary to bring such cases of inadvertent omission of the authority within the class of "exceptional cases" in poor India. In Rama Varma Bharathan Thampuran v. State of Kerala [1979] 4 SCC 782; AIR 1979 SC 1918 (page 1922, para. 14), their Lordships observed: "Quasi-judicial responsibilities are implied by the statute in the Board's functions and if the board breaches these norms and canons the constitutional remedy under article 226 comes into play. After all, the board is a statutory body and not an executive creature. It has been saddled with affecting the rights of parties and is bound to act quasi-judicially. Its deviances are not unreviewable in writ jurisdiction. Therefore, we direct the board to comply with the requirements prescribed in seve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese expressions, I would observe that a decision made contrary to natural justice is void, but that until it is so declared by a competent body or court it may have some effect or existence in law. It might be better expressed that the decision is invalid or vitiated. The consequences of an order rendered in violation of the principles of natural justice remain in effect unless and until the decision is challenged and quashed or set aside. Till the order is set aside the order by itself expresses its existence in law. In the result, I hold that the proceeding is valid. The Registrar shall undoubtedly dispose of the matter at the earliest opportunity in accordance with law and in the light of the observations made in the judgment and the decisions of their Lordships of the Supreme Court referred to above. With these observations I dismiss the application and leave the parties to bear their respective costs. Before parting, I would observe that in view of the present weight of decisions of the Supreme Court and the legislative recognitions of the principles, in the event of a breach of "natural justice", in the first instance the invalidity can be cured or insulated by a quasi-j ..... X X X X Extracts X X X X X X X X Extracts X X X X
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