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TMI Blog2008 (10) TMI 686X X X X Extracts X X X X X X X X Extracts X X X X ..... tice issued by the Director of Mines and Geology and the proceedings of the Deputy Director, Mines and Geology. The appellant in each case is engaged in the business of construction, engineering and civil works. In each case the appellant had participated in the tenders invited by the Bharat Heavy Electricals Ltd. (in short 'BHEL') for the purpose of executing their part of the contract which is with NTPC for levelling and grading. BHEL had awarded the contract to the appellant- company for execution of the work. According to the appellant, the material required for the purpose of execution of the contract in terms of the specifications prescribed under the contract is earth, morrow gravel and mixture of these or any other material approved by the BHEL. The appellant had obtained rights for excavation of good earth from the ryots of patta lands in the vicinity as well as from the quarry lease holders. Each appellant was supplying the materials from the source in which they obtained right of excavation of materials. Huge quantity of these materials was supplied under the contract. The Assistant Director of Mines and Geology required BHEL to show cause as to why action should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the writ petition at the admission stage holding that the order of the State Government is misconceived and unsustainable on account of having been issued without any notice to the affected persons. However, leave was granted to the Government to initiate fresh proceedings if so desired and if so permitted by law after giving notice and opportunity to the appropriate parties. Notices were issued to all the sub- contractors and after hearing the parties the order impugned before the High Court was passed. Again challenge was made before the High Court. 5. The first stand was that the Government ought not to have passed the impugned order clubbing the companies with the other sub contractors inasmuch as demands raised by the Deputy Director in respect of each party were totally different. Quantity and the nature of materials supplied by each of them and the sources were different and merits of each case was to be gone into separately and it was also submitted that the order of the State Government was passed on surmises and assumptions and indicated non application of mind. 6. It was also submitted that seigniorage fee on the total quantity of earth materials supplied by the comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;s letter dated 8.3.2000 whereby the details of total quantities of filling materials supplied by sub contractors were furnished. According to the data, various mines had been supplied as filling materials. The High Court noticed that there was no evidence to show that seigniorage fee had been paid in respect of filling material. 10. According to the High Court the main question that arose for consideration was the nature of the soil utilized by the appellants in the levelling and grading work undertaken by them under the agreement with BHEL. 11. Stand of the appellants was that the bulk of the materials used by the appellants-companies was earth and the same was not subject to seigniorage fee. It was therefore contended that the initiation of suo motu revisional power and the orders passed are illegal as the order ignored the materials available on record. 12. It was pointed out that what was supplied was gravel from the quarry and the ordinary earth from the patta land and therefore the argument that the total material received by BHEL was partly gravel from sources of foot hills and partly ordinary clay from the tank beds and, therefore, the material is subject to seigniorage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, does not contain any objection as to the non supply of the inspection report. There is no plea of any prejudice having been caused on account of non supply of the said inspection notes. It is not as if the petitioner-company demanded for the inspection notes during the hearing of the revision and the Government failed to furnish the same. In the absence of any such plea and demonstration of any prejudice having been caused on account of non supply of the inspection notes the impugned order cannot be set aside on that score. 16. The High Court also did not find any substance in the plea relating to non consideration of the test and analysis report of the Civil Engineering Department of Andhra University. It was held that it was a self service devise adopted by the appellant. Therefore, it was held that since the Government had arrived at to its decision after hearing the parties no interference is called for. 17. So far as the question of penalty is concerned, it was held that though mens rea is an essential ingredient but the factual position left no manner of doubt that the appellant was not acting bona fide. The High Court did not also attach importance to the stand taken b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the entry was re-numbered in the following manner: Item 8: Morram/Gravel-Rs.13-(Rupees thirteen) per cubic meter. 21. The High Court noted that since the amendment came after the contract period was over, it was really of no consequence. 22. It, however, accepted the stand of the State Government that only that ordinary earth which does not contain any mineral content whatsoever alone was exempted from payment of seigniorage fee and there is hardly any earth which does not contain fine particles or other minerals in respect of which seigniorage fee is liable to be charged. 23. Learned counsel for the State, on the other hand, supported the judgment of the High Court and stated that the conduct of the appellants disentitled them from getting inequitable relief. Further more, there was no foundation in the plea that what the State Government had stated earlier would act as an estoppel. 24. We shall first deal with the plea relating to incorrect reflection of the conditions in the contract. The High Court has referred to para 3.03.01 of the specifications of the contract. It reads as follows: The material used for constructing the embankment by earth filling shall be Morram, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wledge of the locations where excavation was going on or the nature of the soil which was being excavated. It was much later i.e. in December, 1999 pursuant to a meeting between the various contractors and the concerned officials during which it was decided that the locations should be disclosed to the Department. Then the Deputy Director and Assistant Director inspected the areas and opined that the excavated material was not simply earth but gravel and clay. The High Court found the explanation to be convincing. What the High Court seems to have overlooked is that there was a specific admission in the earlier cases. It is also not borne out from the records as to when the so called inspection notes of the Deputy Director and the Assistant Director were made and what was the nature of their report. The High Court's observation that the counter affidavit earlier was on account of inadvertence is without any basis. The observations of the High Court that there was no question of sending the samples to the Department of Civil Engineering are also unsustainable. As a matter of fact it is not a case that the appellants themselves had sent the samples. In fact, the samples were sent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich there is room for reasonable people to hold differing opinions as to which is to be preferred" (as per Lord Diplock in Secy. of State for Education and Science v. Metropolitan Borough Council of Tameside 1976(3) All ER 665 at pp.695f). The court cannot substitute its judgment for the judgment of administrative authorities in such cases. Only when the action of the administrative authority is so unfair or unreasonable that no reasonable person would have taken that action, can the court intervene. To quote the classic passage from the judgment of Lord Greene, M.R. in Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation 1947 (2) all All ER pp.682H-683A) It is true the discretion must be exercised reasonably. Now what does that mean? Lawyers familiar with the phraseology commonly used in relation to exercise of statutory discretions often use the word 'unreasonable' in a rather comprehensive sense. It has frequently been used and is frequently used as a general description of the things that must not be done. For instance, a person entrusted with the discretion must, so to speak, direct himself properly in law. He must call his own attention to the matters ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holly vitiated. Thus, it is but essential that a party should be put on notice of the case before any adverse order is passed against him. This is one of the most important principles of natural justice. It is after all an approved rule of fair play. The concept has gained significance and shades with time. When the historic document was made at Runnymede in 1215, the first statutory recognition of this principle found its way into the "Magna Carta". The classic exposition of Sir Edward Coke of natural justice requires to "vocate interrogate and adjudicate". In the celebrated case of Cooper v. Wandsworth Board of Works 1963 (143) ER 414, the principle was thus stated: Even God did not pass a sentence upon Adam, before he was called upon to make his defence. "Adam" says God, "where art thou has thou not eaten of the tree whereof I commanded thee that though should not eat. Since then the principle has been chiselled, honed and refined, enriching its content. Judicial treatment has added light and luminosity to the concept, like polishing of a diamond. 36. Principles of natural justice are those rules which have been laid down by the Courts as being the minimum protection of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation in any way they think best, always giving a fair opportunity to those who are parties to the controversy for correcting or contradicting any relevant statement prejudicial to their view". To the same effect are the observations of Earl of Selbourne, LO in Spackman v. Plumstead District Board of Works 1985 (10) AC 229 : 54 LJMC 81, where the learned and noble Lord Chancellor observed as follows: No doubt, in the absence of special provisions as to how the person who is to decide is to proceed, law will imply no more than that the substantial requirements of justice shall not be violated. He is not a judge in the proper sense of the word; but he must give the parties an opportunity of being heard before him and stating their case and their view. He must give notice when he will proceed with the matter and he must act honestly and impartially and not under the dictation of some other person or persons to whom the authority is not given by law. There must be no malversation of any kind. There would be no decision within the meaning of the statute if there were anything of that sort done contrary to the essence of justice. Lord Selbourne also added that the essence of justice co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 963(1) WB 569, 578, Harman LJ, in the Court of Appeal countered natural justice with 'fair-play in action' a phrase favoured by Bhagawati, J. in Maneka Gandhi v. Union of India 1978 (2) SCR 621. In re R.N. (An Infaot) 1967(2) B617, 530, Lord Parker, CJ, preferred to describe natural justice as 'a duty to act fairly'. In fairmount Investments Ltd. v. Secretary to State for Environment 1976 WLR 1255 Lord Russell of Willowan somewhat picturesquely described natural justice as 'a fair crack of the whip' while Geoffrey Lane, LJ. In Regina v. Secretary of State for Home Affairs Ex Parte Hosenball 1977 (1) WLR 766 preferred the homely phrase 'common fairness'. 41. How then have the principles of natural justice been interpreted in the Courts and within what limits are they to be confined? Over the years by a process of judicial interpretation two rules have been evolved as representing the principles of natural justice in judicial process, including therein quasi-judicial and administrative process. They constitute the basic elements of a fair hearing, having their roots in the innate sense of man for fair-play and justice which is not the preserve of any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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