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Sreeshyla Industries Employees' Union Vs. State Bank of India and Anr. (23.06.1983 - KARHC) - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtKarnataka High Court
Decided On
Case NumberO.S.A. No. 10 of 1981 in C.P. No. 8 of 1981
Judge
Reported in[1985]57CompCas639(Kar); 1984(2)KarLJ105
ActsCompanies Act, 1956 - Sections 433
AppellantSreeshyla Industries Employees' Union
RespondentState Bank of India and Anr.
Excerpt:
- sections 49(b), 143(1)(a) & 143(3): [k.l. manjunath & b.v. nagarathna,jj] disallowance of payment of commission to agents held, though a tax payer may resort to a device to divert the income before it accrues or arises to him, the effectiveness of the device depends upon its genuineness. the substance of the transaction has to be assessed by applying the taxing statute so as to ascertain whether it is a sham or make believe transaction or one which is genuine and therefore is eligible for deduction under the act. hence, courts have to look into the form of the transaction to find out its substance so as to ensure that there is no avoidance of tax by a method impermissible in law. on facts held, the creation of m/s. r.m.c. as well as m/s. o.m.c (as agencies) was nothing but a device.....venkatachaliah, j. 1. this appeal is directed against the order dated april 22, 1983, made by the learned company judge, in company petition no. 8 of 1980, directing advertisement of the winding-up petition filed by the state bank of india for an order of winding up of the company m/s. hegde and golay ltd., on ground that the company is unable to pay its debts and that it is just equitable that should wound up under cls. (e) and (f) of s. 433 of the companies act, 1956 (for short, 'the act'). 2. shreeshyla industrial employees union (regd.) which claims to represent the workmen of the company is aggrieved by the order of the learned company judge directing advertisement of the winding-up petition on the ground that the workmen who had a right to be heard at the stage of issue of the.....
Judgment:

Venkatachaliah, J.

1. This appeal is directed against the order dated April 22, 1983, made by the learned company judge, in Company Petition No. 8 of 1980, directing advertisement of the winding-up petition filed by the State Bank of India for an order of winding up of the company M/s. Hegde and Golay Ltd., on ground that the company is unable to pay its debts and that it is just equitable that should wound up under cls. (e) and (f) of s. 433 of the Companies Act, 1956 (for short, 'the Act').

2. Shreeshyla Industrial Employees Union (Regd.) which claims to represent the workmen of the company is aggrieved by the order of the learned company judge directing advertisement of the winding-up petition on the ground that the workmen who had a right to be heard at the stage of issue of the citation and who had made two application, C.A. No. 109 of 1980 and C.A. No. 774 of 1980, in that behalf specifically seeking an opportunity of being heard, were not afforded opportunity of being heard.

3. This appeal was posted along with O.S.A. No. 9 OF 1983 preferred by the company itself against the order of the company judge directing advertisement of the petition. Both the appeals were heard together on the merits of the matter even at that stage as we thought that the two appeals should be heard and disposed of finally at that stage itself. Thought the appeals were heard together, however, for the sake of convenience, the appeals are disposed of by separate judgments.

4. The challenge to the order of the learned company judge has been on two ground and these are the two question that fall for determination in this appeal :

(i) The first is that as laid down by the Supreme Court in National Textile Workers Union v. P. R. Ramakrishnan : (1983)ILLJ45SC , the workmen of the company have right to be heard even at the stage of issue of advertisement of a winding-up petition; that the workman had by two application expressly sought an opportunity of being heard and that the order under appeal directing advertisement having been made in violation of the rules of natural justice is void.

(ii) The second is that, at all event, on the merits of the company. Petition, an order of advertisement of the petition was unwarranted and the winding-up petition requires to be dismissed even at that stage.

5. On the second question, whether on the merits of the case, an advertisement should or should not have been ordered, Sri Sampathkumaran, learned counsel for the appellant-union, adopted the argument of Sri M. Raghavan, who argued the company's appeal, O.S.A. No. 9 of 1983. The two appeals, as stated earlier, were heard together. By our judgment in O.S.A. No. 9 of 1983, we have, subject to certain observations made in the course of the judgment, dismissed the company's appeals. We have held that on the merits of the contentions urged, the order of the learned company judge directing advertisement of the petition does not call for interference in appeal. That conclusion disposes of the second part in this appeal. That point has accordingly to be held the appellant. This finding would, of course, be subject to the finding on the first point.

6. The facts and circumstance leading up to the filing of the winding-up petition in company Petition No. 8 of 1980 and the subsequent stages of the proceeding therein culminating in the order dated April 22, 1983, directing advertisement of the petition are set out in our judgment in the connected O.S.A. No. 9 of 1983; and it is not necessary to traverse them over again here.

7. It is not disputed that the appellant labour union represents the workmen of the company, M/s Hegde and Golay Ltd. though, however, it is contended by the bank that the union also represents the workmen of several association and ancillary industries also and that the figures as to the strength of the labour force is not correct. The locus standi of the appellant-union to represent the workman of the company of the company is not disputed though there is an allegation that the company has itself set up the union to intervene and contest the matter. That the workman has right to be heard before an advertisement of a winding-up petition was ordered, that the workman expressly sought an opportunity of being heard by C.A. No. 109 of 1980 and C.A. No. 774 of 1982, and that they were not actually heard before the order under appeal was passed is not disputed or contested. The learned company judge had directed that all 'connected matters to be posted' along with Company Petition No. 8 of 1980. But, the two applications filed by the appellant before the company court in C.A. No. 109 of 1980 and 774 of 1982 were not, unfortunately posted by the office on December 14, 1982 when the learned company judge heard the arguments in the matter of issue of advertisement.

8. We may now take the first point consideration. Sri Sampathkumaran urged that the order for the advertisement was passed by the learned company judge on April 22, 1983, and even before an appeal could be preferred, the petitioner-creditor moved with unusual speed and caused the advertisement to be carried out in the newspaper all over the courts on the very next and successive days and sought to confront the workman with a fail accompli. Sri Sampathkumaran submitted that an advertisement of a winding-up petition in relation to a company does immense harm to the financial stability of the company and, in turn, to the interest of the workman, who, in the event of the winding-up of the company, are town out of employment. Sri Sampathkumaran urged that the order of the company judge which, under certain unfortunate circumstances, has come to be made in violation of the rules of natural justice and in violation of the recognised right of the workman of being heard even at that stage is 'void' and 'honest' and that the only way in which the injustice done to the workmen could be redressed is to reverse the consequences of that order by declaring it to be void and authorising the issue of public notice recalling or canceling the earlier advertisement. That matter, according to Sri Sampathkumaran, has, thereafter, to be remitted to the learned company judge to make fresh order, on the question whether an advertisement should be issued or not after hearing the workmen.

9. Sri Sampathkumaran relied on the following statements of law on the point in S. L. Kapoor v. Jagmohan : [1981]1SCR746 and in Swadeshi Cotton Mills Co. Ltd. v. Union of India : [1981]2SCR533 .

'In our view the principles of natural justice know of no exclusionary rule dependent on whether it would have made any difference if natural justices had been observed. The non-observance of Natural justice is itself prejudice to any man and proof of prejudice independently of proof of denial of natural justice is unnecessary. It ill comes from a person who has denied justice that the person who has been denied justice is not prejudiced.' (p. 254 of 51 Comp Cas)

'In India, this court has consistently taken the view that a prejudicial or administrative decisions rendered in violation of the audit term party rule, wherever it can be read as an implied requirement of the law is null and void.' (p. 255 of 51 Comp Cas)

10. Sri Sampathkumaran said that the only order that would be made this appeal consistently with the principle that an order in violation of the rule of audi alteram partem is 'void' is to declare the order 'void' and direct that the whole proceedings in the matter of advertisement to be taken up afresh before the company court.

11. Sri S. G. Sundaraswami, learned counsel appearing for the petitioning creditor, said the workman's entitlement to be heard does not include a right to be impleaded as no nominee parties to the winding-up proceedings and consistently with this principle they should have ensured their presence at the time of hearing of the company petition and not stand by after making an application and make the non-hearing a ground for a subsequent attack on the order.

12. Secondly, contends Sri Sundaraswami, an order made in a judicial proceeding, where a party entitle to be hard is not heard, could not be said to be 'void' in an absolute sense that it is honest. His proposition is that where in a fulfilled appellate jurisdiction, a party, who is arrived by a breach of the rules of natural justice in the original proceedings, is afforded an opportunity to place all the material and to present his case fully and the appellate court in exercise of its jurisdiction which is coextensive with that of the original jurisdiction decides a matter on merits, then the consequences of non-compliance of the rules of natural justices in the original proceedings may be held to have been cured.

13. Sri Sundaraswami submitted that in this appeal the workmen have been afforded all opportunities of being hard on merits as to whether an order of advertisement should or should not issue, and that the appellant adopted the arguments of the company on merits and has no independent material to place before the court. If, after such a hearing, the order of advertisement if found justified, that order should not be disturbed on one ground alone that when it was made, it suffered from an infirmity and that, therefore, the whole process has to be re-enacted formally in the original court. Sri Sundaraswami says that when the appeal was heard full on merits at the instance of the appellant, the appellate court should not interfere unless the court hold that this is not a case in which advertisement ought to have been issued.

14. The first contention that the workmen, despite having made two applications, were yet required to keep a watch over the proceedings and make themselves heard, appears to us to place unreasonable demand on the workman. Their applications were not posted though the learned company judge has disputed all contacted matters to be posted.

15. The second connection has two aspects : Whether the order under appeal which was passed without hearing the workman can be said to be 'void' and whether in view of the opportunity given to the appellants of beings heard on merits in this appeals, the defect and infirmity in the original can be said to have been cured.

16. The case raise some interesting question which are by no mean free from difficult and are' bedeviled by terminological in consistencises'. They cannot be answered on any rule of general validity applicable to all situations. Each case must rest on its own facts.

17. At the outset, we must notice that the expressions 'void' and 'void able' which have their genesis in private law are somewhat in opposite in their application to public law situation. But, a breach of rules of natural justice-a procedural failure-was eventide to an error of jurisdiction on the ground that rules of natural justice are read into the statue and omission to company was, therefore, ultra vires.

18. In Wade on 'Administrative Law' (5th end), it is observed :

'A source of complication introduced in certain decisions of recent years is the question whether unlawful administrative acts are void or avoidable. Up to a point there is a sound basis for this distinction ....' Void or avoidable is a distinction which applies naturally and without difficulty to the basic distinction between the section which is ultra vires and action which liable to be quashed for error on the face of the record.' (vide page 310)

'Ridge v. Baldwin [1964] AC 40, brought with it a rash of conflicting opinions about whether failure to give a fair hearing rendered the dismissal of the chief constable void or avoidable. In the long history of the cases on natural justice as applied to administrative action, this question had never before been agitated, for the simple reason that the logic of the situation excluded it. It had always previously been held that a breach of the released of natural justice resulted in the determination being null and void, in the same way as any other act which was ultra vires. For, the duty to act fairly, just like the duty to act reasonably, was enforced as an implied statutory requirement, so that failure to observe it meant that the administrative decisions was outside the statutory power, unjustified by law, and, therefore, ultra visa and void.' (vide page 486)

19. De Smith's Judicial Review of Administrative Action (IVth end.) says :

'Although breaches of natural justice used to be assignable as 'errors in fact,' a ground of challenge presupposing that the impugned order may merely be avoidable, there is a substantial body of recent judicial decisions to the effect that breach of the audi alteram partem rule goes to jurisdiction (or is akin to a jurisdiction defect) and renders on order or determination void.' (vide page 241)

20. 'Void' indeed, it may be, but what sense The expression 'void' in this context becomes only a relative terms and does not carry any absolutes with it. There is no stereotype or arithmetical equation that all action and all situation are affected in the same way. Prof. Paul Jackson poses this question thus :

'Are all decisions affected in the same way when vitiated by a failure to observe the rules of natural justice where they are applicable And, if so should such decisions be characterised as void or avoidable ?' (vide page 187)

21. The words of the Lord Chancellor in Chief Constable of the North Wakes Police v. Evan [1982] 1 WLR 1155 (HL) are worth recalling (p. 1162) :

'Like my noble and learned friend, I find much more difficulty in deciding the order which it is a appropriate for the Houses to make in case such as the present. In Ridge v. Baldwin [1964] AC 40 (HL), a majority of the House, in not dissimilar circumstances, granted a declaration that the decisions of the chief constable was 'void'. This was the language adopted by the Court of Appeal in the instant case. Personally, I find difficulty in applying the language of 'void' and 'avoidable' (appropriate enough in situation of contract or of alleged nullity of marriage) to administrative decisions which give rise to practical and legal consequences which cannot be reversed.'

22. Prof. Wade say (Administrative Law, 5th end., page 471).

'In natural justice cases, just as much as in the other already discussed, it is essential to remember that 'void' is not an absolute but a relative term : a decision or act may be void against one person and valid against another.'

23. That what is 'void' in this context is not necessarily and in all cases equipollent to what is 'honest' is again brought out in Ferd Dawson Calvin v. John Henry Brownlow Carr [1980] AC 574 (PC), (at page 589) :

'Their Lordship opinion would be, if it became necessary to fix upon one or other of these expressions, that a decisions made contrary to natural justices is void, but that, until it is so declared by competent today or court, it may have some effect, or existence, in law. This condition might be better expressed by saying that the decisions is invalid or vitiated.'

24. The observation of Megarry J. in Hounslow Loando Brought Council v. Twickenham Garden Development Ltd., [1971] 1Ch 233, at page 259 :

'A decision reached by a tribunal wholly outside its jurisdiction and in complete defiance of natural justice is about as void as anything can be; but if nobody who is entitled to challenge or question it chooses to do so, it remains in being. Yet to describe such a decisions as being 'avoidable' is to use that word in a sense that is not very special but also liable to mis lead.'

25. Indeed, one of the incidents of importing the concept of' void' expressed itself in the contention that against a 'void' decisions no appeal lies as there is 'nothing' to appeal from. In Ferd Dawson Calvin v. John Henry Brownlow Carr [1980] AC 574, the Privy Council rejected this theory and said (p. 590) :

'Passing from this analogy to authorities directly relevant in the field of civil proceeding their Lordship consider that these support the proposition that a decisions of an administrative or domestic tribunal, reached in breach of natural justice, thought it may be called, indeed may be for certain purpose 'void' is nevertheless susceptible of an appeal.'

26. The inevitable interchangeability of some elements of 'void' and 'avoidable' is, it is said, the result of an interesting interaction of the consequences of breach of natural justice on the one hand the conscious efforts of court to preserve a discretion to decline interference in appropriate or inappropriate cases, on the other. Indeed, Paul Jackson said (Natural Justice : page 187) :

'..... Unless the outcome of a particular case will be affected by whether a breach of natural justice renders a decisions vice or avoidable, the question is little more the meaningless. The conflict between dicta in different cases in explicable, it is suggested, on this very basis, that often it does really matter how court characterises an offending decision.'

27. What emerges from the foregoing is that the effect of non-observance of the audi alteram partem rule in relation to the question of remedies for the breach cannot be in capsulated in legal or technological absolutisms. Though a decisions arrived at in breach of rules of natural justice of characterised as 'void', very often the remedy suggested an applied could only be consistent the decisions being merely 'avoidabler'.

28. In our view, in relation to decisions in juridical proceedings. The principles are somewhat different. The deployment of the terminology of 'void', with what it is know to convey in private law is rendered inappropriate in the context of judicial proceedings.

29. We are unable, therefore, to subscribe to the broad proposition of Sir Sampathkumaran that by reason of the non-hearing of the appellant-union at the stage of ordering advertisement, the order of the learned company judge became 'void', in thee sense that it compels in appeal, the only course of clearing it so with the attendant and inevitable consequence of asking the company court to re-enact the whole proceeding from the stage where the alleged fatal infirmity was introduced.

30. We may now advert to the question whether the affording to the appellant in the appeal an opportunity of being heard could cure the infirmity in the original proceedings attaching from a breach of the audi alteram partem rule.

31. Sri Sampathkumaran says that the only way in which the injury occasioned by the breach of the audi alteram parte rule is to set aside the decision and remit the matter back.

32. Megarry J., in Leary v. National Union of Vehicle Builders [1971] 1 Ch 34, adverting to the breach effect of breach of rules of natural justice, at the stage of the trial, whether the effects of that beach could at all be made good by fair full in an appeal, said (at p. 49) :

'If the rules and the law combine to give the member the right to a fair trial and the right of appeal, why should he be told that he ought to be satisfied with an unjust trial and fair appeal .... As general rules, at all events, I hold that a failure of natural justices in the body cannot be cured by a sufficiency of natural justices in an appellate body.'

33. But Sri Sundaraswami contends that amongst the above is not a generally accepted proposition of law that amongst the recognised remedies for breach of rules of natural justice is the 'solvent' of a full hearing to the aggrieved party in an appeal where the jurisdiction of the appellate today is co-extensive with that of the original authority and the matter is decided on merits.

34. Indeed, the difficulties besetting the task was set out by the House of Lords thus in Ferd Dawson Calvin v. John Henry Brownlow Carr [1980] AC 574 at p. 592 :

'Although, as will appear, some of the suggested inconsistence of decisions disappear, or at lesser diminish, on analysis, their Lordships reorganise and indeed assert that no clear and absolute rule can be laid down on the question whether defects in natural justices appearing at an original hearing, whether administrative or quasi-judicial, can be cured throughout appeal proceedings.'

35. Wade in 'Administrative Law' (5th end.) said :

'Whether a hearing given on appeal is an acceptable substitute for a hearing not given, or not properly given, before the initial decision, is in some cases a arguable question ...' (vide page 487)

36. De Smith's Judicial Review of Administrative Action (IV edn.), at page 242 say :

'Firstly whether a decision vitiated by a breach of the rules of natural justice can be made good by a subsequent hearing does not admit of a single answer applicable to all situation in which the issue may arise. Whilst it is difficult to reconcile all the relevant cases, recent case law indicates that the courts are increasingly favouring an approach based in large part upon an assessment of whether, in a particular context, the procedure as a whole gave the individual an opportunity for a fair hearing.'

37. The answer to the question whether the vitiating factor introduced in the original proceedings by breach of natural justice could be cured in appeal depends on a variety of circumstances and a combination of principles. These factors are set out by De Smith :

'But whether the rehearing is appellate in nature, it becomes difficult to do more than to indicate the factors that area likely to be taken into consideration by a court before whom the original decision is challenged. Of particular importance are the gravity of the error committed at first instance, the likelihood that the prejudicial effects of the error may also have permeated the rehearing the seriousness of the consequences for the individual, the width of the powers of the appellant body and whether it decided only on the basis of the material before the original tribunal or entertained the appeal by way of rehearing de novo.' (vide : page 242)

38. There are cases illustrative of the extreme positions the situations admits of the view of Megarry. J., in Leary's case [1971] 1 Ch 34, is at one extreme. The general proposition in Leary's case was referred to by Wade in a general sense of approval thus :

'... In principle there ought to be an observance of natural justice equally at both stages; and accordingly natural justice is violated if the true charge is put forward only at the appeal stage. If natural justice is violated at the first stage, the right of appeal is not so much a true right of appeal as a corrected initial hearing; instead of fair trial followed by appeal, the procedure is reduced to unfair trial followed by fair trail.' (vide administrative law, 5th end., p. 487)

39. But, we think that what emerges from a conspectus of the case law is that the proposition in Leary's case [1971] 1 Ch 34 is too broadly stated. There are cases and cases and though no general principle of universal validity, valid for all situations. cannot be predicated, yet it is possible to say, even in cases of statutory or 'domestic' appeals, that a fair appellate procedure can cure the infirmity in the original proceedings resulting from breaches of the rules of natural justice. Each case has to be decided on its own facts and on the existence of the requisite curative elements and factors in the appellate procedure including the nature and width of the appellate jurisdiction; the nature, depth and intensity of the infirmity and the operative remedial factors in the appeal. The rule that where the rules of natural justice are concerned, a favour appellate proceeding cannot be substituted for an unfair trail, is one of application in the generality of cases and does admit of and is not inconsistent with a rule of equal validity that a satisfactory appellate procedure might also be cure. Then again distinctiveness if judicial proceeding must be kept clearly distinguished. The principle that an appropriate appellate procedure is said can be curative, in our opinion, operates a fortiori in the context of purely judicial proceedings, if there is, as of right, an appeals on facts and law to an appellate forum with plenary appellate jurisdiction co-extensive with that of original court and if the aggrieved party had full opportunity of presenting its whole case and a decision on merits is made.

40. Since some sustains to the proposition could be has from the decision of the House of Lords in Ferd Dawson Calvin v. John Henry Brownlow Carr [1980] AC 574, we might refer it that case here.

41. Mr. Calvin, part-owner of a race horse called 'Court Mayo' from New Zealand, and Mr. Peter William Cuddihy, its jockey, were accused by the stewards of the Randwick Racecourse, that the horse, which was hot favourite, has not been 'run on its merits' on May 13, 1976, the day of its first public appearance in Austratia. After some enquiry, the stewards disqualified Mr. Calvin and Mr. Cuddihy for breach of rule 135 (a) of the Australian jockey Club Rules of Racing. Both Mr. Calvin and Mr. Cuddihy appealed to the Committee of the Jockey Club according to the procedure laid done in the Rules of Racing. After affording ample opportunity to the appellants to present their case and to cross-examine the witnesses, the committee dismissed the appeals. Thereafter, Mr. Calvin brought an action for a declaration that the disqualification was avoid and for consequential injunction. It was urge for the plaintiff that the steward's enquiry was vitiated by breach of natural justice and was, therefore, void and that there could be no appeal from a 'void' decision. Mr. Calvin's action failed.

42. The Judicial Committee, in appeal, held on the second aspect that though a decision reached on breach of rules of natural justice might, for certain purposes, be void, it was nevertheless susceptible of an appeal.

43. On the first aspect, the privy Council held that though there was no general rules as to whether an appellate court could cure a defect due to a failure of natural caustic in original proceedings, however, since the disputes and the discipline in that case were in a consequential category and since, on the facts, the committee had five the plaintiff's case overall a full and fair consideration, any failure of natural justice by the stewards at the inquiry stage became irrelevant.

44. Referring to the observation of Megarry J., in Leary's case [1971] 1 CH 34, that 'a failure of natural justice in the trail body cannot be cured by a sufficiency of natural justice in a appellate body', the privy Council observed (p. 593 9f [1980] AC) :

'In their Lordships' opinion this is too broadly stated. It affirms a principle which may be found correct in a category of cases .... Whether these in turn date cases are it be regarded as expectations from a general rule, as state by Megarry J., or as a percale category covered by a rule of equal status, is not in their Landship' judgment necessary to state, or indeed a matter of great importance. What is important is the recognition that such case exist, and that it is undesirable in many cases of domestic disputes, particularly in which an inquiry and appeal process has been established, to introduces to great a measure of formal judicialisation.'

45. It is no doubt true that the analogy of the principles in Calin's case [1980] AC 574 is not complete and that these observation are made in a case which the parties were held, by consequential principles of domestic jurisdiction, to be found by a Committee's fair decisions and in that view, any earlier failure of natural justice by the stewards became irrelevant.

46. It is also true that any over emphasis on the curatives for breach of natural justice might attract, and perhaps justify, the criticism that the court may be tempted to emphasis to on the rights of parties by in only the remedies.

47. The view that a fair appellate procedure can, in a conceivable case, be a cure for an unfair trail does not tend to belittle the imperatives of a fair procedure at both stages. It may also be said that in a case where there is failure of natural justice in the original proceedings, the 'appeal' cases to be an appeal and reduces itself to a correct original hearing, and no appeals.

48. It is no answer also to a complaint of breach of the audi alteram partem rule that the same decision would, in any event, have been reached even after the hearing.

49. The principle that in judicial proceedings a full-fledged appellate hearing where opportunity is afforded to an aggrieved party to present his case and evidence and the appellate court in exercise of a jurisdiction, co-extensive with that of the original jurisdiction, decides a matter on merits, then the consequences of non-compliance of rules if natural jurisdiction in the original proceeding may be held to by been cured, is a recognised principle. We think this principle should operate here.

50. That such a curative principle is so recognised in law, is inferable by the implications of the following observation of the Supreme Court in State of U.P. v. Mohammad Nooh, AIR 1958 SC 86, at p. 94 :

'On the authorities referred to above it appears to us that there may conceivable be cases and the instant case is in point where the error, irregularity or illegality touching jurisdiction or procedure committed by and inferior court or Tribunal of first instance is so patent and loudly obstructive that it leaves be its decision an indelible stamp of infirmity or vice which cannot be obliterated or cured on appeal or revision. ... This would be so all the more if the Tribunals holding the original trial and the Tribunes hearing the appeal or revision were merely detrimental tribunals holding the original trial and the Tribunals hearing the appeal or revision were merely departmental Tribunals composed of persons belong to the detrimental hires without adequate legal training and background and whose glaring paper occasionally come to our notice.'

51. Again, Burner Schwartz, in 'The Test Book of Administrative Law', at page 209 says :

'Where the requisite due process of hearing is not included in the ..... administrative process, it may be adequately supplied by a judicial proceeding in which new evidence may be supplied and full opportunity afforded for exploration of the based if the disputed order. This does not mean that, as Justice Douglas once asserted, judicial review satisfies the requirements of procedural due process. If, as Douglas implied, an agency need never afford a hearing whenever jostle review is available, this all but does away with the right to be heard as a constitutional requirement, since judicial review is almost always available in our administrative law. Judicial review should serve as a substitute for an agency hearing only where it is broad enough to allow the private party to present his case adequately with full opportunity to submit evidence and arguments. In addition, the court must be able to decide the merits of the case on its own independent judgment; where due process requires a hearing, it must be on the merits of the controversy.'

52. There may, however, be cases whether this rule may not operate. General rule, of course, is insistence on compliance with the rules of natural justice at both stages.

53. In the present case, the grievance of the appellant-union is that it was not heard by the learned company judge before making the order. In appeal, we have heard the appellant fully and considered all its contention. It is not the case of the appellant that it has or had any material or evidence other than that was placed before us in appeal. The appellate jurisdiction is co-extensive with the original jurisdiction and the appellant has availed itself of this jurisdiction. The jurisdiction we excise in this appeal is not akin to judicial review where, generic speaking, what is examined is not the decision but the decision making process. This appeal is both on facts and law akin to a first appeal under the CPC. An appeal is constitution of the original proceedings; in effect, the entire proceeding are before the appellate court and it has the power to review the evidence. The right of appeal is one of entering the appellate court and incoming its aid and interruption traders the error of the original proceeding. In these circumstances, we think that we ought to hold that the defect in the original proceedings before the company courts is cured.

54. It is also to be noticed that no winding-up order is yet made. It is open to the workmen to urge all contentions which are react to be taken into account at that stage before the company court.

55. In the result, we hold that the order directing advertisement of the winding-up petition does not call for interference in appeal. The appeal is, accordingly, dismissed but without an order as to costs.

56. O.S.A. No. 10 of 1983 in Company Petition No. 8 of 1980

Venkatachaliah, J.

57. At the conclusion of our judgment, learned counsel for the appellant made an oral application under art. 134A of the Constitution of a certificate of fitness to appeal under art. 133 to the Supreme Court form the judgment just now pronounced.

58. We think that this appeal does not involve any substantial question or questions of law of general importance needing to be decided by the Supreme Court.

59. We, accordingly, refuse the certificate sought for, and dismiss the oral application.

60. However, learned counsel for the appellant state that the appellant intends to move the Supreme Court for special leave to appeal under art. 136 of the Constitution, and that pending furnishment of certified copies and for a reasonable period thereafter, the operation of air judgment in appeal and the further proceedings in Company Petition No. 8 of 1980 be stayed.

61. In O.S.A. No. 9 of 1983 we have, while refusing a certificate, have granted such a stay till July 31, 1983. In view of that order, the prayer here is superfluous. As long as that order of stay subsists, there is no necessity to make another order of stay of the same proceedings before the company court.


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