Andhra HC (Pre-Telangana)
Sri Sarvaraya Sugars Limited vs Government Of A.P. And Ors. on 7 July, 2003
Equivalent citations: 2003(5)ALD347
ORDER V.V.S. Rao, J.
1. The petitioner is a Company . registered under the Companies Act. It is mainly engaged in the business of manufacturing and sale of sugar. It owns properties at Visakhapatnam and Hyderabad Cities. After coming into force of Urban Land (Ceiling and Regulation) Act, 1976, they filed a declaration under Section 6(1) of the Act. The Special Officer and Competent Authority, Visakhapatnam, the third respondent herein, processed the declaration and determined that the petitioner-company owns surplus vacant land of 1 hectare 4609 Sq.Mts. in R.S.Nos. 19/1 and 19/2 in Kottavankojapalem in Visakhapatnam District, Urban Agglomeration and 650 Sq.Mts. in Sy.No. 26(P) at Cheekoti Gardens, Begumpet. After completing necessary formalities like final statement under Sections 8(3) and 9, action was initiated for taking possession of the surplus land. At that stage, the petitioner-company made an application under Section 20(1) (a) of the Act seeking exemption of the surplus vacant land from the provisions of the Act. In their application, be it noted, dated 31.3.1987 they stated that in view of the expansion of the industry taken by them, the requirement of office accommodation is increased. That was the reason given while seeking exemption of the land in Cheekoti Gardens. Insofar as the land at Visakhapatnam is concerned, they stated that the land is required for industrial expansion.
2. The Government of Andhra Pradesh, the first respondent have by the impugned Memo No. 151/UC.III/76-54 dated 14.12.1993 rejected the application for exemption under Section 20(1)(a) of the Act. In this writ petition challenging the rejection letter it is contended that the urban vacant land in respect of which exemption was sought is required for industrial expansion and office purpose and hence rejection of the request for exemption without assigning any reasons is ultra vires of the power under Section 20(1)(a) conferred by the Act.
3. When the matter is pending before this Court, the Government of Andhra Pradesh issued orders under Section 23 of the Act in G.O. Ms. No. 456 dated 29.7.2002 proposing to exempt the urban vacant land subject to certain conditions including payment of the market value as fixed by the said G.O. Therefore, the petitioner filed an application being WPMP No. 9069 of 2003 to amend the prayer in the writ petition so as to enable the petitioner-company to pray alternatively for a direction to the respondents to consider and allot the land admeasuring Acs.3.61 cents in Sy.No. 19/1 and 19/2 of Kotha Venkojipalem, Visakhapatnam. This application is not opposed and as such the same is ordered.
4. The learned Counsel for the petitioner Sri V. Venkataramana submits that while exercising the power under Section 20(1)(a) it is incumbent on the part of the Government to give reasons for rejecting the application as every declarant who filed a declaration under Section 6 of the Act has a legitimate expectation to seek exemption. He placed strong reliance on the decision of the Supreme Court in T.R. Thandur v. Union of India, , in support of the above contention. Alternatively he submits that every person, who is declared to be a surplus vacant landholder, is given an opportunity by the Government itself to seek exemption in accordance with G.O. Ms. No. 456 and as the said G.O. came into force during the pendency of the writ petition, the petitioner is entitled to make an application under the same.
5. The respondents have not filed any counter-affidavit. The learned Government Pleader made submissions based on record produced. According to the learned Government Pleader, Government appointed a Committee vide orders in G.O. Ms. No. 272 dated 28.12.1989 to process the applications for exemption under Section 20 of the Act; the application made by the petitioner was processed by the said Committee after getting the necessary reports from the third respondent as well as the Additional Director of Industries; and that the Committee considered both the reports and decided not to grant any exemption. He contends that while rejecting an application under Section 20(1)(a) of the Act reasons are not required to be recorded. Aliernatively, he also submits that the checklist prepared by the office, which was placed before the Committee for examining the request for exemption under the Act, contains sufficient reasons for rejecting the same.
6. The question of some importance, which arises for consideration, is - whether the Government is required to record reasons while rejecting the application for exemption? An incidental question would also arise as to whether the reasons recorded by the Government are to be communicated to the applicant who seeks exemption.
7. It is now well settled that every executive action, be it an action based on subjective or objective satisfaction of the authority, must be supported by reasons. It is also well settled that in all cases and in all situations reasons should be communicated to the person at whose instance a decision is taken. May be some decisions taken by the executives do not require an reasons. Some times, the policy laid down by the political executive would itself be a sufficient reason for executive action. However, it must be noted that when an action is taken under a statute and statute itself specifically requires a decision to be supported by reasons, all such decisions should be supported by reasons contained in the files. It is again a matter of drawing an inference whether the file in which the subject is dealt with contains reasons or not. A reference may be made to the judgment of the Supreme Court in S.N. Mukherjee v. Union of India, and Union of India v. E.G. Nambudiri, .
8. In S.N. Mukherjee's case (supra) a question arose whether the Government of India while exercising power of revision/ review under the provisions of the Army Act is required to record reasons. The Court considered two questions: (i) is there any general principle of law which requires an administrative authority to record the reasons for its decision? (ii) If so, does the said principle apply to an order confirming the findings and sentence of Court-martial and post confirmation proceedings under the Act?
After referring to the precedents in other jurisdictions like U.S.A. and U.K. as well as the precedents of the Supreme Court, the Court came to the conclusion that nondisclosure of reasons for an administrative decision violates the principles of natural justice. Though there is a general rule for recording reasons, there is no general rule that reasons should be communicated in every case. It depends on the nature of the power exercised. When quasi-judicial power is exercised it goes without saying that reasons not only made have to be recorded but must be communicated to the aggrieved person. The same is not the case when the authorities exercise administrative powers. When the recording of reasons is either explicitly or impliedly dispensed with by the statutory or authorized instrument, it is not necessary to record reasons. The relevant passage from the judgment in S.N. Mukherjee's case (supra) must be excerpted, which is as under:
The object underlying the rules, of natural justice "is to prevent miscarriage of justice" and secure "fair play in action." As pointed out earlier the requirement about recording of reasons for its decision by an administrative authority exercising quasi-judicial functions achieves this object by excluding chances of arbitrariness and ensuring a degree of fairness in the process of decision-making,. Keeping in view the expanding horizon of the principles of natural justice, we are of the opinion, that the requirement to record reason can be regarded as one of the principles of natural justice which govern exercise of power by administrative authorities. The rules of natural justice are not embodied rules. The extent of their application depends upon the particular statutory framework whereunder jurisdiction has been conferred on the administrative authority. With regard to the exercise of a particular power by an administrative authority including exercise of judicial or quasi-judicial Junctions the Legislature, while conferring the said power, may feel that it would not be in the larger public interest that the reasons for the order passed by the administrative authority be recorded in the order and be communicated to the aggrieved party and it may dispense with such a requirement.
In E.G. Nambudiri's case (supra) the Supreme Court opined that though there is np statutory duty cast upon an administrative authority to record reasons when an application for some benefit, concession or largesse is rejected, yet minimum reasons should be recorded for doing so. It was also observed that reasons need not be at one place by one officer and reasons can be gathered from the entire file. It was held:
In the absence of any statutory rule or statutory instructions requiring the competent authority to record reasons in rejecting a representation made by a Government Servant against the adverse entries the competent authority is not under any obligation to record reason. But the competent authority has no licence to act arbitrarily, he must act in a fair and just manner. He is required to consider the questions raised by the Government Servant and examine the same, in the light of the comments made by the officer awarding the adverse entries and the officer countersigning the same. If the representation is rejected after its consideration in a fair and just manner, the order of rejection would not be rendered illegal merely on the ground of absence of reasons. In the absence of any statutory or administrative provision requiring the competent authority to record reasons or to communicate reasons, no exception can be taken to the order rejecting representation merely on the ground of absence of reasons. No order of an administrative authority communicating its decision is rendered illegal on the ground of absence of reasons ex facie and it is not open to the Court to interfere with such orders merely on the ground of absence of any reasons. However, it does not mean that the administrative authority is at liberty to pass orders without there being any reasons for the same. In Governmental functioning before any order is issued the matter is generally considered at various levels and the reasons and opinions are contained in the notes on the file. The reasons contained in the file enable the competent authority to formulate its opinion. If the order as communicated to the Government Servant rejecting the representation does not contain any reasons, the order cannot be held to be bad in law. If such an order is challenged in a Court of law it is always open to the competent authority to place the reasons before the Court which and have led to the rejection of the representation. It is always open to an administrative authority to produce evidence aliunde before the Court to justify its action.
9. The file in relation to the impugned Memo has been placed before this Court. The same shows that after receiving application of the petitioner-company, the Government called for a report from the third respondent, who by his report dated 3.4.1991 recommended that the application be rejected. The Government also called for a report from the Additional Director of Industries, who recommended that the land situated at Visakhapatnam is required by the company for setting up modern plate offset training unit and therefore the application may be considered for exemption. The matter went up before the Committee consisting of three members appointed by the Government under G.O.Ms.No. 272 dated 23.12.1989. The Committee after considering the report of the third respondent as well as the Additional Director of Industries concluded that the application be rejected. Before the Committee there were two reports, one in favour of the petitioner-company and the other adverse to them. When the Government entrusted the duty to process the applications to a Committee of high officials, the choice was left to them. Having regard to the report of the third respondent, who is the proper person to examine the claims of the petitioner-company, the Committee rejected. It cannot be said that there are no reasons.
10. As observed by the Supreme Court in E.G. Nambudiri's case, in the system of governmental functioning where before passing an order the matter is generally considered at various levels, the reasons and opinions contained in the file at various levels would be sufficient compliance with a rule that every executive action must be supported by reasons to warrant an inference that an application was dealt with in a fair and proper manner. Applying this test, I am satisfied that the impugned order is well supported by reasons and it cannot be rejected as without reasons.
11. Needless to point out that under Section 20(1)(a) of tile Act an applicant is not entitled to know the reasons for rejection and there is no obligation on the part of the first respondent to communicate reasons. Even otherwise, after perusing the impugned order, I am satisfied that the same discloses sufficient reasons when the Government said that they see no reason to comply with the request to grant exemption under Section 20(1)(a) of the Act. Be it noted that the provisions under the Act, as held in Bhim Singhji v. Union of India, , itself contain sufficient guidelines for granting exemption and the same would be sufficient reason.
12. In T.R. Thandur's case (supra) on which reliance is placed by the learned Counsel for the petitioner, the question as to whether the Government can arbitrarily exercise the power under Section 20(1)(a) of the Act while granting exemption even though the applicant has not made out any case for exemption under the said provisions was dealt with. In that context the Supreme Court held that while granting exemption, there should be sufficient reasons for the Government to exercise the power under the Act having regard to the purpose for which the Act was enacted. The Supreme Court ruled thus:
Clause (a) of Sub-section (1) of Section 20 empowers the State Government to grant the: exemption if it is satisfied having regard to the relevant factors specified in the clause that it is necessary or expedient to grant the exemption in the "public interest" subject to the conditions specified in the order. Clause (a) specifies certain relevant factors for the purpose of grant of exemption, namely, "location of such land", "the purpose for which such land is being or is proposed to be used" and such other relevant factors as the circumstances of the case may require. Apart from the location of the excess vacant land and the purpose of its use, regard must be had to the other relevant factors, which is a question of fact in each case. However, these factors must indicate that the grant of exemption under Clause (a) is necessary or expedient in the "public interest." The expression "public interest" has a legal connotation. The broad guidelines for grant of exemption under Clause (a) are enacted in the provision A safeguard is provided by requiring conditions to be specified in the order to which the exemption is granted under Clause (a). Even though there is no proviso in Clause (a) of the kind enacted thereafter in Clause (b), yet the absence of such a proviso is inconsequential since the requirement of the expressly enacted proviso in Clause (b) is implicit in the manner of exercise of the power under Clause (a). The requirement in Clause (a) of making an order having regard to the specified relevant circumstances and specifying conditions attached to the exemption, ensures that the decision is reached for cogent reasons which are placed on record in writing culminating in the making of the written order. There is no scope for the view that exemption can be granted under Clause (a) by an order specifying the conditions having regard to the specified relevant factors without recording the reasons for doing so in writing. Every State action must satisfy the rule of non-arbitrariness and, therefore, recording of reasons in writing for granting the exemption under Clause (a) indicating that it is necessary or expedient in the public interest so to do, is an essential requirement of valid exercise of power under Clause (a). This is how Clause (a) must be construed and understood.
13. The first submission of the learned Counsel, for the above reasons, is rejected. Insofar as the alternative relief prayed in the writ petition seeking exemption under G.O. Ms. No. 456 is concerned, the petitioner is given liberty to make an application within a period of two weeks from the date of receipt of a copy of this order to the first respondent seeking necessary orders under G.O. Ms. No. 456 dated 29-7-2002. As and when such an application is made, it is open to the first respondent to consider the same in accordance with G.O. Ms. No. 456 dated 29-7-2002.
14. The writ petition is accordingly disposed of. No costs.