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Union of India (Uoi) and anr. Vs. E.K. Andrew - Court Judgment

LegalCrystal Citation
SubjectBanking
CourtKerala High Court
Decided On
Case NumberWrit Appeal No. 906 of 1992, (O.P. No. 7316 of 1991)
Judge
Reported in[1999]95CompCas537(Ker)
ActsBankig Regulation Act, 1949 - Sections 36AA, 36AA(2) and 36AA(3)
AppellantUnion of India (Uoi) and anr.
RespondentE.K. Andrew
Appellant Advocate S.V.S. Iyer, Adv. for Mathews J. Nedumpara, Adv.
Respondent Advocate T.L. Ananthasivan, Adv.
Cases ReferredBhattathiripad v. Tahsildar
Excerpt:
banking - natural justice - section 36aa, 36aa (2) and 36aa (3) of banking regulation act, 1949 - order of single judge challenged - every citizen entitled to know by whom and how dispute is going to be adjudicated - authority designated to hear dispute should not be frequently changed - case can be decided by authority hearing arguments and not his successors - held, single judge rightly set aside administrative order passed in violation of principles of natural justice. - - 3. learned counsel for the appellants raised a strong plea for sustaining exhibit' p-6 order. that was found necessary in view of the fact that 'two courts took the view that the petitioner acted in the best interest of the bank. ' (italics supplied) 9. the constitution bench of the supreme court in the above.....p.a. mohammed, j. 1. the appellants are the respondents in the writ petition. the appeal is filed against the judgment of the learned single judge in o. p. no. 7316 of 1991, quashing exhibit p-8 order of the union of india, the first appellant in this appeal. the second appellant is the reserve bank of india. the respondent is the writ petitioner, who challenged exhibit p-8 order rejecting an appeal filed under section 36aa(3) of the banking regulation act, 1947 (for short 'the act').2. the respondent was appointed as the chairman, bank of cochin limited (now merged with the state bank of india) on june 18, 1979, initially for a period of two years. later the appointment was extended from time to time, which was approved by the reserve bank of india. however, on november 18, 1982, the.....
Judgment:

P.A. Mohammed, J.

1. The appellants are the respondents in the writ petition. The appeal is filed against the judgment of the learned single judge in O. P. No. 7316 of 1991, quashing exhibit P-8 order of the Union of India, the first appellant in this appeal. The second appellant is the Reserve Bank of India. The respondent is the writ petitioner, who challenged exhibit P-8 order rejecting an appeal filed under Section 36AA(3) of the Banking Regulation Act, 1947 (for short 'the Act').

2. The respondent was appointed as the Chairman, Bank of Cochin Limited (now merged with the State Bank of India) on June 18, 1979, initially for a period of two years. Later the appointment was extended from time to time, which was approved by the Reserve Bank of India. However, on November 18, 1982, the Reserve Bank of India issued a notice (exhibit P-1) to the petitioner under Section 36AA(2) of the Act to show cause why he should not be removed from the office of the chairman of the bank, within a period of three weeks. The annexure to the show-cause notice contained thirteen items of charges against the respondent. The substance of charges Nos. 1 to 11 is that the respondent sanctioned credit facilities to certain persons and enhanced certain existing facilities in the case of others without obtaining adequate securities. The twelfth charge was that he intentionally delayed the placing of the branch inspection reports to the board of directors and the thirteenth charge was that the bank defaulted in maintaining the statutory liquidity ratio and the cash reserve ratio as required under the Act. According to the respondent, the abovesaid charges, were absolutely baseless and unreal and he had filed a detailed reply on December 3, 1982, that is to say, within the time allowed. However, the second appellant passed an order on April 2, 1983, removing the respondent from the office of the chairman and chief executive officer with effect from April 2, 1983. As against the said order, the respondent filed an appeal dated May 1, 1983, before the first appellant under Section 36AA(3) of the Act. Though the respondent requested for personal hearing the first appellant without granting the same rejected the appeal as per the order dated October 19, 1984. Aggrieved by the said order, the respondent filed a writ petition, O. P. No. 9763 of 1984, before this court. This court by judgment in the above O. P. (exhibit P-2) quashed the order dismissing the appeal on the ground that there was denial of opportunity of personal hearing. By the aforesaid judgment this court further directed the Union of India to take back the appeal on file, afford an opportunity to the petitioner to be heard in person and dispose of the matter within six months from the date of judgment. However, the first appellant did not comply with the direction contained in exhibit P-2 judgment within the time allowed. However, the respondent received a letter dated April 28, 1989 (exhibit P-3) asking him to appear before the first appellant on May 12, 1989, for hearing. Since exhibit P-3 was received by the respondent just two days prior to the date fixed for his appearance in Delhi, hearing of the case was adjourned to July 19, 1989, at the request of the respondent. The respondent appeared in person before Sri V. P. Sawhney, Additional Secretary on July 19, 1989, and presented his case. He also presented a detailed argument note (exhibit P-4) to the first appellant. Even though the matter was heard in detail, no order was passed by the first appellant. After a lapse of nearly three months the first appellant again called the respondent for a personal hearing as per exhibit P-5 letter dated March 13, 1990. By the said letter the respondent was asked to appear before the first appellant on April 4, 1990, at the office of the first appellant. However the hearing was again adjourned to June 25, 1990, as per the communication sent to the respondent by telegram. The respondent, pursuant to the said communication, appeared before the first appellant on June 25, 1990, and argued the entire case once again before Sri D. R. Mehta, Additional Secretary. A fresh additional argument note (exhibit P-6) was submitted by the respondent to the Additional Secretary. Another argument note (exhibit P-7) as clarification was also presented to the first appellant on July 2, 1990. However, Sri D. R. Mehta, Additional Secretary, who heard the matter on June 25, 1990, did not pass final order. The final order (exhibit P-8) was passed by Sri K. J. Reddy on June 13, 1991, rejecting the appeal under Section 36AA(3) of the Act. The said order was quashed by the learned single judge as per judgment dated August 3, 1992. It is against the said judgment that this writ appeal is filed.

3. Learned counsel for the appellants raised a strong plea for sustaining exhibit' P-6 order. It was pointed out that every aspect of the case was considered by the first appellant in extenso and there was due application of mind while passing exhibit P-8. It is the case of the appellants that the learned single judge was in error in making the observation that the first appellant had dealt with the case 'in such a casual manner without application of mind'. Of course, it is difficult to say that Sri K. J. Reddy, Additional Secretary who passed exhibit P-8 order had not applied his mind while passing exhibit P-8 order. But the real question is whether there was application of mind by Sri K.J. Reddy after hearing the respondent in person. If it was an order passed after such hearing, we would have definitely sustained it without any demur. What we could perceive here, if we put it in the words of the learned single judge, is that 'two officers who heard the case, did not pass orders and the one who passed orders did not hear the aggrieved as he was required to.' That is why it was said that the first appellant had dealt with the matter in a casual manner without application of mind. This observation is required to be tested within the framework of exhibit P-2 judgment of the same learned judge, who in unequivocal terms directed the first appellant to afford an opportunity to the respondent to be heard in person. That was found necessary in view of the fact that 'two courts took the view that the petitioner acted in the best interest of the bank.' This court said that 'there should be a full-blooded consideration of the case on the merits' because the appellate remedy must be meaningful in quality and content.

4. From the tenor of exhibit P-2 it is difficult to hold that its purpose would be achieved by the passing of an order by the officer who did not hear the respondent though the application of the mind is visible in exhibit P -8 order. The visibility of the application of the mind may be as a result of self-endeavour. It may be a futile exercise without grasping the real issues after hearing the aggrieved. That is not what this court intended and the intention is perceptible from the order which is always the concern of the court. Prof. Wade says :

'The judges, anxious as always to preserve some freedom of manoeuvre, emphasise that 'it is not possible to lay down rigid rules as to when the principles of natural justice are to apply ; nor as to their scope and extent. Everything depends on the subject-matter'.'

5. That is why Lord Bridge of Harwich observed in Lloyd v. McMahon [1987] 1 All ER 1118, 1161 ; [1987] 1 AC 625 (HL) : 'the so-called rules of natural justice are not engraved on tablets of stone.' The approach of the courts in India on this subject is not in any way different as observed by the Supreme Court in Ravi S. Naik v. Union of India [1994] Supp. 2 SCC641. In A.K. Kraipak v. Union of India [1969] 2 SCC 262 the Supreme Court observed : '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.' It further said in Union of India v. Col J. K. Sinha [1970] 2 SCC 458 :

'Rules of natural justice are not embodied rules nor can they be elevated to the position of fundamental rights.'

6. Therefore, the width and amplitude and the manner of exercise of power conferred on an authority to act in accordance with the principles of natural justice largely depends upon the intention of the courts while conferring such power and the purpose for which it is conferred and also the effect of such exercise of power.

7. The next question which requires to be decided is whether the rule that the person or authority who heard the case should pass orders is an indispensable requirement in the observance of principles of natural justice. This rule has a salient purpose. The authority who passes the order, must apply its mind after hearing the aggrieved party. During the course of hearing the authority must be able to formulate the conclusions after noticing even the demeanour of the parties. S. A. de Smith's Judicial Review of Administrative Action frames this rule as this :

'Must he who decides also hear In general the answer is in the affirmative. It is a breach of natural justice for a member of a judicial tribunal or an arbitrator to participate in a decision if he has not heard all the oral evidence and the submissions. The same principle has been applied to members of administrative bodies who have taken part in decisions affecting individual rights made after oral hearings before those bodies at which they have not been present ; 'for bias and ignorance alike preclude fair judgment upon the merits of the case'.'

8. This rule has its base on R. v. Manchester J], Ex Parte Burke [1961] 125 ]P 387 where a decision was quashed because a member of the Bench who had not heard the evidence appeared to participate in the decision. The Supreme Court recognised this rule in Gullapalli Nageswara Rao v. A. P. S. R. T. Corporation, AIR 1959 SC 308, wherein it has been held thus (page 327) :

'The second objection is that while the Act and the Rules framed thereunder impose a duty on the State Government to give a personal hearing, the procedure prescribed by the Rules impose a duty on the Secretary to hear and the Chief Minister to decide. This divided responsibility is destructive of the concept of judicial hearing. Such a procedure defeats the object of personal hearing. Personal hearing enables the authority concerned to watch the demeanour of the witnesses and clear up his doubts during the course of the arguments, and the party appearing to persuade the authority by reasoned argument to accept his point of mew. If one person hears and another decides, then personal hearing becomes an empty formality. We therefore hold that the said procedure followed in this case also offends another basic principle of judicial procedure.' (italics supplied)

9. The Constitution Bench of the Supreme Court in the above decision in unequivocal terms declared that 'if one person hears and another decides then personal hearing becomes an empty formality'. This wholesome principle is not in any way varied or modified by the subsequent decision of the Supreme Court in Ossein and Gelatine . [1989] 66 Comp Cas 853 ; [1990] AIR 1990 SC 1744. After noting the rival view-points on the enforceability of this rule what the Supreme Court finally said was this (page 858) :

'This is a very interesting question and Local Government Board v. Arlidge [1915] AC 120 (HL) has been dealt with by Wade (Administrative Law, 6th Edition) at pp. 507 et seq.).

We are of opinion that it is unnecessary to enter into a decision on this issue for the purposes of the present case. '

10. Now, let us examine what is laid down by the House of Lords in Local Government Board v. Arlidge [1915] AC 120. That was a case where 'A public inquiry had been held on an appeal to the Local Government Board by the owner of a house against which the Hampstead Borough Council had made a closing order on the ground that it was unfit for human habitation. The owner complained to the court that the Board had dismissed his appeal without a fair hearing because he was not allowed to appear before the officer who made the decision or to see the report of the inspector who held the inquiry. That report was, of course, the principal document in the proceedings. These complaints succeeded in the Court of Appeal but failed in the House of Lords. The judges all agreed that the general importance of the case 'can scarcely be overestimated'. Where they differed was in their willingness to compromise between the procedure of courts of law and the needs of practical administration. The argument that prevailed was that by entrusting the power to a Government department, Parliament must have intended that the department should act in its normal manner, and should therefore be able to take its decision without making public its papers and without having to conduct itself like a court of law. Lord Haldane, then Lord Chancellor, said :

'The Minister at the head of the Board is directly responsible to Parliament like other ministers. The volume of work entrusted to him is very great .... Unlike a judge in a court, he is not only at liberty but is compelled to rely on the assistance of his staff. When, therefore, the Board is directed to dispose of an appeal, that does not mean that any . particular official of the Board is to dispose of it.... It is said that the report of the inspector should have been disclosed. It might or might not have been useful to disclose this report, but I do not think the Board was bound to do so, any more than it would have been bound to disclose all the minutes made on the papers in the office before a decision was come to.'

11. As to the effect of this decision Professor Wade says thus :

'In attempting to reconcile the procedure of a Government department with the legal standard of natural justice the House of Lords stressed the limits that must be set to the judicialisation of administrative procedure. But they missed an important opportunity in setting their faces against the disclosure of the inspector's report. It took over forty years for this mistake to be corrected, when it finally came to be understood that the supposed analogy between the report and any other departmental papers was misconceived, and in the meantime there was much public dissatisfaction at this unfairness in inquiry procedures. Even now the law stands where the House of Lords left it in Local Government Board v. Arlidge [1915] AC 120 (HL), and the necessary reforms have been made administratively, following the report of the Franks Committee of 1957, as explained elsewhere. Local Government Board v. Arlidge [1915] AC 120 (HL) was therefore a turning point, in which the law failed to keep abreast of the standard of fairness which public opinion demanded, rightly as it turned out, in the procedure of Government departments. The law was, indeed, destined to fall still further behind before it returned to its old course in Ridge v. Baldwin [1963] AC 40 in 1963.'

12. The Constitution Bench in Gullapalli Nageswara Rao v. A P. S. R. T. Corporation, AIR 1959 SC 308, discussed Local Government Board v. Arlidge [1915] AC 120 (HL) and three other decisions, namely, Ranger v. Great Western Rly Co. [1854] 5 HLC 72, Rex v. Sussex Justices ; Ex parts McCarthy [1924] 2 KB 256 and Rex v. Essex Justices ; Ex parte Perkins [1927] 2 KB 475 and held (page 327) :

'The aforesaid decisions accept the fundamental principle of natural justice that in the case of quasi-judicial proceedings, the authority empowered to decide the dispute between opposing parties must be one without bias towards one side or other in the dispute.' (italics supplied)

The theory that 'the one who decides must hear' is recognized for the reason that bias and ignorance alike preclude fair judgment upon the merits of the case.

The rule 'the one who decides must hear' declared by the Constitution Bench in Gullapalli Nageswara Rao v. A, P. S. R. T. Corporation, AIR 1959 SC 308, derives support from a famous case decided by the Supreme Court of the United States in Morgan v. United States [1936] (298 US 468). In that decision the court invalidated a price-fixing order of the Secretary of Agriculture merely on the ground that the secretary himself had not personally heard or read any of the evidence or considered the arguments submitted but had decided the matter solely on the advice of his officials in consultations at which the objectors were not present. Chief Justice Hughes rejected the very essence of administrative practice by refusing to allow that 'one official may examine evidence, and another official who has not considered the evidence may make the findings and order.'

13. The Chief Justice further said :

'That duty (sc. of decision) cannot be performed by one who has not considered evidence or argument. It is not an impersonal obligation. It is akin to that of a judge. The one who decides must hear.'

14. J, F. Garner in Administrative Law says :

'In the outcome the final decision process rests in the same hands as it does in England, and in most corresponding cases the result may prove similar in both countries, but at least in the U. S. A. there is a greater appearance of justice.'

15. Counsel for the appellants submits that what is involved in this case is an 'institutional' decision and not one taken by an officer specifically empowered to do it. 'If an administrator has to carry on his multifarious functions efficiently, it becomes essential for him to take the assistance of subordinates within his department. A decision in such a case is called 'institutional' because the decision as a whole is that of the concerned department as an administrative entity rather than the personal decision of any designated officer individually. A situation of institutional decision may arise when the decision-making power is conferred on the Government, or a department, or the head of a department like the minister, though not where an authority has been created specifically for adjudication. An institutional decision gives rise to two main problems. First, the authorship of such a decision may not be known as it is reached by several officers in the concerned department. Secondly, there may be division in the decision-making process while one person may hear another may decide.' (See Principles of Administrative Law--by

16. M. P. Jain and S. N. Jain, 14th Edition). The same authors point out the disadvantages of institutional decisions as this :

'Even with these advantages of an institutional decision, there are two notable drawbacks in this system. Firstly, the deciding officer is unable to watch the demeanour of a witness and to make up his own mind as to the credibility of the witness. Secondly, the party is unable to put his arguments before the person who really counts and to persuade him directly to accept his viewpoint.'

17. These drawbacks in institutional decisions necessarily place the rule 'the one who decides must hear' on a higher standard of procedural fairness than what obtains in the United Kingdom.

18. We are aware that the insistence on the above rule in institutional decisions may sometimes create practical difficulties in day-to-day governmental functions. That does not mean the rule as such has to be dispensed with. Various remedial measures are available to overcome administrative difficulties. The exercise of quasi-judicial power by the Government department is regulated by internal rules of business in certain cases. It is also noticed that the relevant statute may itself provide the procedure for hearing and for taking decision. We do not propose to elaborate the various procedural safeguards mandated by the Supreme Court in different decisions which are available to the affected parties in cases of institutional decisions. There are cases where the court directs the authorities to give personal hearing to the affected parties in view of the particular background both in the case of judicial and institutional decisions.

19. The rule 'the one who decides must hear' itself is part of 'audi alteram partem' : Ridge v. Baldwin [1964] AC 40 reinstated the right to a fair hearing as a rule of universal application in cases of administrative acts or decisions affecting rights of parties. In Lord Loreburn's oft-quoted words the duty to afford a fair hearing is 'a duty lying upon every one who decides anything.' This is an epitome of general principles governing the fair hearing. In the United States, the requirement of a fair hearing in federal matters is stated with some particularity in the Administrative Procedure Act, 1946. In Maharashtra State Board of Secondary and Higher Secondary Education v. K.S. Gandhi [1991] 2 SCC 716, 738, the Supreme Court said :

'The applicability of the principles of natural justice is not a rule of thumb or a strait-jacket formula as an abstract proposition of law. It depends on the facts of the case, nature of the inquiry and the effect of the order/decision on the rights of the person and attendant circumstances.'

20. The following observation in Russel v. Duke of Norfolk [1949] 1 All ER 109 (CA), which is approved by the Supreme Court in Rattan Lal Sharma v. Managing Committee [1993] 4 SCC 10 is very relevant in this context (page 18).

'There are, in my view, no words which are of universal application to every kind of inquiry and every kind of domestic tribunal. The requirements of natural justice must depend on the circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject-matter that is being dealt with, and so forth.'

21. Exhibit P-8 is an order passed by the first appellant under Section 36AA(3) of the Act. Sub-sections (1) to (3) of Section 36M, which are relevant for the present purpose are ectyped hereunder :

'56AA. Power of Reserve Bank to remove managerial and other persons from office.-(1) Where the Reserve Bank is satisfied that in the public interest or for preventing the affairs of a banking company being conducted in a manner detrimental to the interests of the depositors or for securing the proper management of any banking company it is necessary so to do, the Reserve Bank may, for reasons to be recorded in writing, by order, remove from office, with effect from such date as may be specified in the order, any chairman, director, chief executive officer (by whatever name called) or other officer or employee of the banking company.

(2) No order under Sub-section (1) shall be made unless the chairman or director or chief executive officer or other officer or employee concerned has been given a reasonable opportunity of making a representation to the Reserve Bank against the proposed order :

Provided that if, in the opinion of the Reserve Bank, any delay would be detrimental to the interests of the banking company or its depositors, the Reserve Bank may, at the time of giving the opportunity aforesaid or at any time thereafter, by order direct that, pending the consideration of the representation aforesaid, if any, the chairman or, as the case may be, director or chief executive officer or other officer or employee, shall not, with effect from the date of such order-

(a) act as such chairman or director or chief executive officer or other officer or employee of the banking company ;

(b) in any way, whether directly or indirectly, be concerned with, or take part in the management of, the banking company.

(3)(a) Any person against whom an order of removal has been made under Sub-section (1) may, within thirty days from the date of communication to him of the order, prefer an appeal to the Central Government. The decision of the Central Government on such appeal, and subject thereto, the order made by the Reserve Bank under Sub-section (1) shall be final and shall not be called into question in any court.'

22. Exhibit P-1 is the show-cause notice issued by the second appellant under Sub-section (2) proposing to remove the respondent from service under Sub-section (1). As against the order removing the respondent from service, he filed an appeal under Sub-section (3) before the second appellant. Sub-section (3)(b) says that the decision of the Central Government on appeal shall be final and shall not be called into question in any court. Thus the order passed under Sub-section (2) removing the respondent from service has been merged with exhibit P-8 appellate order and thus the grievance is directly against that order. Exhibit P-8 order was passed by the first appellant pursuant to exhibit P-2 judgment. The question is whether the direction contained in exhibit P-2 judgment has been complied with by the first appellant while passing exhibit P-8. The direction issued by this court is this : 'The Government of India will take back the appeal on file, afford an opportunity to the petitioner to be heard in person and dispose of the matter within six months from today.' The sole question is whether the direction to afford an opportunity to the party to be heard in person has been strictly adhered to by the first appellant. In other words, the point is whether there was a fair personal hearing as enshrined in the direction issued by this court in exhibit P-2 judgment. Strictly speaking, this is not a case where an institutional decision is involved. Sub-section (3) does not provide for a personal hearing while disposing of the appeal by the first appellant. No guidelines are given either as to how the appeals are to be heard or the decisions are to be taken. If exhibit P-8 was a simple order under Sub-section (3), without having any direction from this court, passed in the ordinary course, it may be a case involving an institutional decision. But the observance of the principles of natural justice is mandatory in this case in view of exhibit P-2 judgment, which necessarily dissolves its institutional character. That would otherwise mean that exhibit P-8 order is liable to be tested within the framework of the rule 'the one who decides must hear'.

23. Now let us broadly examine whether exhibit P-8 order will conform to the general principles of natural justice or to the specific rule 'the one who decides must hear'. If exhibit P-8 does not conform to the latter it ipso facto contravenes the former. The examination of the entire question therefore involves simultaneous consideration. Exhibit P-8 order has been passed by Sri K.J. Reddy, Additional Secretary and he is the officer who decided the appeal on June 13, 1991. Admittedly he did not hear the respondent and he is thus a totally unknown person to him. His name was not disclosed earlier at any point of time. However, in paragraph 17 of the impugned order it is stated ; 'In his submissions in the course of oral hearing the appellant has argued . . .' This statement appears to be a misleading statement in view of the fact that the respondent was notheard by Sri K. J. Reddy. He did not further explain the background of the said statement. Pursuant to exhibit P-3 notice the respondent appeared before Sri V. P. Sawhney, Additional Secretary and argued his case on July 19, 1989. Again he appeared before Sri D, R. Mehta, Additional Secretary, on June 25, 1990, Though these two officers heard the respondent personally no decision was taken by them. These facts are undisputed. If any one of them had passed order, he maintains, it would have been definitely in his favour inasmuch as they had fully grasped the real issue during the personal hearing. There is no application of mind by Sri K. J. Reddy, after personally hearing the respondent. Elaborate consideration of contentions is never a substitute for personal hearing. When this court gives a mandate it cannot be bypassed or defeated, directly or indirectly by adopting a devious method. This court will always disdain such practice. This is a case where the personal hearing ordered by this court has become an empty formality. Every citizen is entitled to know as to by whom and how the dispute is going to be adjudicated. The authority designated to decide the dispute shall not remain anonymous. It must be certain and definite. Such authority cannot be changed frequently according to the whims and fancies of the superior authorities under the guise of institutional hearing. The sense of natural justice requires that the citizen must be told that the dispute would be finally dealt with by a specified authority before whom he has a right to appear and plead. This can be dispensed with if there is prescribed procedure or rules of practice. 'It is a cardinal principle of our judicial system that a case should be decided by the authority hearing the arguments and that a successor cannot decide a case without hearing the arguments afresh on the ground that arguments have already been advanced before his predecessor who left the case without deciding it himself.' This is the view taken by a Division Bench of the Punjab High Court in Amir Singh v. Government of India, AIR 1965 Punjab 84. A learned single judge of this court (T. L. Viswanatha Iyer J.) expressed the view in Bhattathiripad v. Tahsildar [1994] 1 KLT 790, 793 thus :

'Even in the first instance, I may state that the order exhibit P-7 is void as one passed in violation of the principles of natural justice as it has been passed by an officer who did not hear the revision petition. It is clear from exhibit P-7 itself that the hearing was done by the then incumbent in office on August 14, 1991, but the order exhibit P-7 was passed by the successor on September 17, 1991. The person who heard the revision on August 14, 1991, has not passed the order, though from what appears in exhibit P-7, he had made some notes of hearing in the note file. These notes were utilised by the successor and made into an order which he pronounced as exhibit P-7. Admittedly there was no further hearing of the matter. In the circumstances the order passed by aperson who did not hear the matter and who did not have any opportunity to come to grips with the issues arising for consideration, is violative of the principles of natural justice and is liable to be quashed on this ground itself.'

24. We agree with the view expressed in the aforesaid decisions.

25. Finally, it cannot be said that this is a case where no prejudice is caused to the respondent. Serious prejudice is caused to him due to the failure to grant personal hearing by the officer who passed exhibit P-8 rejecting the appeal against the order removing him from service. The learned single judge has exercised his discretionary power under Article 226 and quashed exhibit P-8 order for the reasons recorded therein. For the reasons discussed hereinabove, we do not propose to upset the said decision in this appeal. The appeal is accordingly dismissed. No order as to costs.


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