1.It transpires that vide Annexure Nos.1 & 2 dated 4th of September, 2013 and 19th of September, 2013, the petitioners were put in lower pay-grade without giving any opportunity of hearing to the petitioners. Recovery has been directed to be effected from the petitioners for the period the petitioners were given higher grade-pay. Aggrieved by the said action of the respondents, the present writ petition has been filed. In para 2 of the petition, it has been pleaded that impugned action has been taken by the respondents without giving any opportunity of hearing, or show cause to the petitioners.
2.In counter affidavit, in response to para 2 of the writ petition, it has not been shown that show cause notice was given to the petitioners, or opportunity of hearing was given to the petitioners. An explanation has been given for taking impugned action against the petitioners.
3.Learned counsel appearing for the respondents has not been able to dispute that opportunity of hearing was not given to the petitioner, before taking impugned action against the petitioners.
4.Perusal of the above-noted facts indicates that certain financial benefits were vested in the petitioner by the respondents. By virtue of impugned action, the said benefits have been dis-continued and amount is sought to be recovered. The impugned action has been taken by the respondents without giving any opportunity of hearing to the petitioner i.e. without following the principle of natural justice.
5.Relevance of giving hearing to a person whose right is likely to be adversely affected has been considered by the Hon'ble Supreme Court of India while deciding Civil Appeal No.6896 of 2012 decided on 6th of July, 2011 in M/s Kesar Enterprises Ltd. v. State of U.P. and others. The following has been held in paras 16, 17, 18, 19 and 20.
16. Before we deal with the question, it would be necessary to understand and appreciate the concept of natural justice and the principles governing its application.
17. Rules of "natural justice" are not embodied rules. The phrase "natural justice" is also not capable of a precise definition. The underlying principle of natural justice, evolved under the common law, is to check arbitrary exercise of power by the State or its functionaries. Therefore, the principle implies a duty to act fairly i.e. fair play in action. As observed by this Court in A.K. Kraipak & Ors. v. Union of India & Ors. the aim of 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. They do not supplant the law but supplement it. (Also see Income Tax Officer & Ors. v. M/s Madnani Engineering Works Ltd., Calcutta).
18. In Swadeshi Cotton Mills v. Union of India R.S. Sarkaria, J., speaking for the majority in a three-Judge Bench, lucidly explained the meaning and scope of the concept of "natural justice". Referring to a catena of decisions, His Lordship observed thus:
"Rules of natural justice are not embodied rules. Being means to an end and not an end in themselves, it is not possible to make an exhaustive catalogue of such rules. But there are two fundamental maxims of natural justice viz. (i) audi alteram partem and (ii) nemo judex in re sua. The audi alteram partem rule has many facets, two of them being (a) notice of the case to be met; and (b) opportunity to explain. This rule cannot be sacrificed at the altar of administrative convenience or celerity. The general principle--as distinguished from an absolute rule of uniform application--seems to be that where a statute does not, in terms, exclude this rule of prior hearing but contemplates a post-decisional hearing amounting to a full review of the original order on merits, then such a statute would be construed as excluding the audi alteram partem rule at the pre-decisional stage. Conversely if the statute conferring the power is silent with regard to the giving of a pre-decisional hearing to the person affected and the administrative decision taken by the authority involves civil consequences of a grave nature, and no full review or appeal on merits against that decision is provided, courts will be extremely reluctant to construe such a statute as excluding the duty of affording even a minimal hearing, shorn of all its formal trappings and dilatory features at the pre-decisional stage, unless, viewed pragmatically, it would paralyse the administrative process or frustrate the need for utmost promptitude. In short, this rule of fair play must not be jettisoned save in very exceptional circumstances where compulsive necessity so demands. The court must make every effort to salvage this cardinal rule to the maximum extent possible, with situational modifications. But, the core of it must, however, remain, namely, that the person affected must have reasonable opportunity of being heard and the hearing must be a genuine hearing and not an empty public relations exercise."
(Emphasis added)
19. In Canara Bank v. V.K. Awasthy the concept, scope, history of development and significance of principles of natural justice have been discussed in extenso, with reference to earlier cases on the subject. Inter alia, observing that the principles of natural justice are those rules which have been laid down by the courts as being the minimum protection of the rights of the individual against the arbitrary procedure that may be adopted by a judicial, quasi-judicial and administrative authority while making an order affecting those rights, the court said:
"Concept of natural justice has undergone a great deal of change in recent years. Rules of natural justice are not rules embodied always expressly in a statute or in rules framed thereunder. They may be implied from the nature of the duty to be performed under a statute. What particular rule of natural justice should be implied and what its context should be in a given case must depend to a great extent on the fact and circumstances of that case, the framework of the statute under which the enquiry is held."
20. The question with regard to the requirement of an opportunity of being heard in a particular case, even in the absence of provisions for such hearing, has been considered by this Court in a catena of cases. However, for the sake of brevity, we do not propose to refer to all these decisions. Reference to a recent decision of this Court in Sahara India (Firm), Lucknow v. Commissioner of Income Tax, Central-I & Anr. would suffice. In that case, the question for adjudication was whether in the absence of a provision in the Income Tax Act, 1961, an opportunity of hearing was required to be given to an assessee before an order under Section 142(2-A) of the said Act, directing special audit of his accounts was passed? A Bench of three Judges, speaking through one of us (D.K. Jain, J.), explaining the concept of "natural justice" and the principles governing its application, summed up the legal position as under :
Thus, it is trite that unless a statutory provision either specifically or by necessary implication excludes the application of principles of natural justice, because in that event the court would not ignore the legislative mandate, the requirement of giving reasonable opportunity of being heard before an order is made, is generally read into the provisions of a statute, particularly when the order has adverse civil consequences for the party affected. The principle will hold good irrespective of whether the power conferred on a statutory body or tribunal is administrative or quasi-judicial.
We may, however, hasten to add that no general rule of universal application can be laid down as to the applicability of the principle audi alteram partem, in addition to the language of the provision. Undoubtedly, there can be exceptions to the said doctrine. Therefore, we refrain from giving an exhaustive catalogue of the cases where the said principle should be applied. The question whether the principle has to be applied or not is to be considered bearing in mind the express language and the basic scheme of the provision conferring the power; the nature of the power conferred and the purpose for which the power is conferred and the final effect of the exercise of that power. It is only upon a consideration of all these matters that the question of application of the said principle can be properly determined."
(Emphasis supplied be me)
6.On consideration of the law as laid down here-in-above extracted, it becomes evident that wherever an administrative decision taken by the authority involves civil consequence of a grave nature and no review, or appeal on merits against that decision is provided, hearing would be required to be given to the affected person. In the alternative, the impugned orders may provide for a post decisional hearing. Gist and substance of the law is that in case an order is likely to adversely affect the rights of the petitioner, a reasonable opportunity of hearing must be given to that person to enable him to explain the circumstances and convince the authorities otherwise. The hearing is required to be genuine and not merely a public relation exercise.
7.Clearly, in the case in hand, action taken by the respondents is not appealable or revisable under the Statute. Perusal of the impugned order (s) passed by the respondents does not indicate post-decisional hearing. The action taken by the respondents involves disputed facts on which respondents are required to take a decision at the first instance, after giving a reasonable opportunity of hearing to the petitioners.
8.It cannot be disputed that the impugned action has adverse civil consequence for the petitioner. It is admitted case of the respondents that before taking impugned action, no hearing has been given to the petitioner. In case a hearing was given to the petitioner, even if by error certain benefits had been granted in favour of the petitioner, the said facts could have been put of the petitioner to enable him to explain why the respondents should rule otherwise. In the above circumstance, the action of the respondents is vitiated, because the respondents have not followed the principle of natural justice, before passing impugned order.
9.In view of the above, this writ petition is allowed. Orders dated 4th of September, 2013 and 19th of September, 2013 (Annexure Nos.1 & 2) are hereby quashed.
10.It is however provided that the respondents would be at liberty to pass a fresh order, however, after giving opportunity of hearing to the petitioners.
Order Date :- 28.4.2014 GK Sinha