Jammu & Kashmir High Court
Gurdas Ram And Co. And Ors., Etc. vs Union Of India (Uoi) And Ors. on 7 August, 1986
Equivalent citations: AIR1988J&K42, AIR 1988 JAMMU AND KASHMIR 42
ORDER K.K. Gupta, J.
1. Both the above referred petitions involved same point of law and the facts are also identical and as such I propose to dispose of the same by this common judgment.
2. Petitioners have challenged in these petitions order communicated to them by the Deputy Director Military Farms under Letter No. 40131/ MF (DB) Tribunal dated 16-11-1984 rejecting their claims in both the cases for revision of rates in respect of their contracts in regard to supply of buffalo milk to military farms, being illegal, arbitrary, unjust, based on extraneous considerations and contrary to the binding award/ recommendations and findings of the Tribunal appointed by respondent No. 1. In Writ Petition No. 27 of 1985 the contract pertains to supply of buffalo milk to military farms at Baramulla and Rajouri, whereas in Writ Petition No. 28 of 1985 it pertains to military farms at Jammu and Srinagar.
3. Petitioner's case is that sealed tenders were invited by the Dy. Director Military Farms Northern Command, respondent No, 3 herein, for and/on behalf of the President of India for daily supply of buffalo milk to military farms for the period commencing Jan. 11, 1980 and ending 30th Sept. 1982. They offered the lowest rates for the said supply and after some formal negotiations milk contracts were sanctioned in their favour. The terms and conditions of the said contracts were duly signed by them and respondent No. 3. There was a revision clause in the said agreement which provided for revision of rates in the manner contained in it and according to it a Tribunal was to be constituted for the said purpose who after hearing the parties had to determine the extent of the increase or decrease if any in the rates and make recommendations. Acceptance or rejection of recommendations of the Tribunal in whole or in part, without assigning any reasons and from the date as recommended by the tribunal or from any other date was rested with the authorities mentioned in the agreement whose decision would have been final and binding on both the parties.
4. Petitioners further contention in the petition is that while they continued to operate the contract faithfully and successfully milk rates of buffalo milk and the expenses for procuring and supplying the same showed steep rise and abnormal upward trend right from the fourth quarter of 1980. No claim for revision of rates was, however, permitted to be made for any period up to May 23, 1981. The escalation in the price of buffalo milk even in public utility service, such as Govt. Milk Plant in Punjab, registered increase of 40% ex dairy production centre. Adequate production and supply of buffalo milk not being available in the centres where the milk was to be supplied, it was understood that supplies had to be procured by them from Punjab and elsewhere and conveyed to these centres. They by addressing letters to the concerned authorities invoked revision clause in the agreement and requested the Quarter Master General, Army Headquarters to appoint appropriate Tribunal for determination and recommendation of increase in the rates to which they be found to be entitled There was no response to the applications made by them. They sent telegraphic reminders followed by the confirmatory letters addressed to all the respondents herein and contended that the appointment of Tribunal was obligatory upon the Government and prayed for appointment of such Tribunal immediately. After few reminders from them the Quarter Master General, Army Hqs. New Delhi issued two separate letters, both dated 24-11-1981 and appointed a Tribunal comprising of :
1. Presiding Officer, Brig. J. S. Bains, Commander 71-Sub-Area;
2. Members.
a) Col. G. L. Luthra, DDMF, Northern Command;
b) Sh. H. U. Khan. Director Agriculture J & K Govt. to examine their respresentations and to make award if justified for revision of rate of supply of milk. Said Tribunal commenced its adjudication proceedings on or about Dec, 15, 1981 at Udhampur. They submitted their detailed written claims on Dec. 23, 1981. Along with their claims they filed several papers containing statistical data of the market rate of milk and explaining the basis of their claim for 70% increase in the supply rate of milk. During the pendency of proceedings before the Tribunal sale price of buffalo milk was increased by Mother dairy and the procurement price continued to show further rise. They, therefore, submitted before the Tribunal certain supplements to their original claim. Adjudication proceedings before the Tribunal continued for few months and concluded on Feb. 8, 1982. From the trend of the proceedings they believed that the Tribunal recommended for increase in the rates in their favour. The award/ recommendations of the Tribunal having not been communicated to them for quite sometime they formally requested respondent No. 3 for a copy of the said award and for implementation of the same. They were told by the authorities that the recommendations of the Tribunal had been forwarded to the Army Hqs. for final orders of the Joint Secretary Ministry of Defence and no copy of the Tribunal award could be made available to them.
5. Petitioners have further averred in their petition that despite their running from pillor to post and making frantic applications to various concerned authorities no action was taken by the authorities for more than 2 1/2 years. They continued to supply milk for the entire period of the contract, notwithstanding heavy and crippling financial loss suffered by them in the hope they would get justice by way of payment for the supplies at increased rates based on Tribunal's award. In the meanwhile the period of contract came to an end of Sept. 30, 1982. Respondent No. 3 granted them a certificate on 27-4-1983 that they had fully met with the contractual obligations in respect of the centres where they were required to make supplies. On Aug. 8, 1984 their representative met the Joint Secretary and the Director of Ministry of Defence and explained to them their difficulties and prayed for early implementation of Tribunal's award. Their representative was verbally assured that orders for implementation of Tribunal's recommendations would be issued shortly. On Nov. 17, 1982 they were persuaded by the senior officers to make substantial reduction in the much higher rates tendered for the subsequent period of three years from Oct. 1982 to Sept. 1984 by holding due promise of early favourable decision on Tribunal's recommendations, in respect of the earlier period of their making supplies. It was to their surprise that they on 29-11 -1984 received letter from respondent No. 3 dated 16-11-1984 informing them that their case of revision of rates had been rejected.
6. Petitioners have further alleged that despite repeated requests for being provided with copies of the award of the Tribunal no such copy was provided nor were they even informed as to whether the finding of the Tribunal was for full 70% increase as claimed or for any lesser amount. More than two years were taken to decide the case after the award of the Tribunal. They came to know that the award of the Tribunal was referred to the Ministry of Finance, Govt. of India for checking and it was found in order. They further got information that the award of the Tribunal was referred to the Ministry of Law for finding out any possible flaw or infirmity in the adjudication of Tribunal and the said Ministry could not find any impropriety in the award and confirmed the decision of the Tribunal being in accordance with law. The impugned order communicated to them did not give any idea of any named authority which application of mind (sic) nor did it specify as to who were the appropriate authorities mentioned in the order who were supposed to have been consulted. The binding statutory revision clause did not empower any of the competent authorities named therein to consult any outside body or person. In any event such ex parte considerations behind their back and without their being taken into confidence would by itself vitiate quasi-judicial decision affecting their civil rights. They submitted a written request for granting them copy of the order of rejection but no such copy has been furnished. In these circumstances they have been left with no other alternative except to invoke the extraordinary jurisdiction of this court for quashing the impugned order and directing the respondents to implement and honour the adjudication/award of the Tribunal in accordance with law.
7. The respondents in their counter have taken the following preliminary pleas : --
1. That no fundamental or legal right of the petitioner is involved in the petitioners;
2. That the petitioners have raised disputed question of fact which this court cannot take into consideration in exercise of its writ jurisdiction;
3. That the petitioners have got other alternative, efficacious remedy available to them in terms of the agreement executed by the parties and the common law;
4. That the writ petitions are belated and suffer from unexplained laches;
5. That the impugned order was passed by an authority outside the jurisdiction of this court and as such this court has got no territorial jurisdiction to grant the relief to the petitioners.
8. It is further pleaded in the counter that petitioners invoked the revisional clause of the agreement and requested for appointment of a Tribunal vide their application dated 20-8-1981 to the Quarter Master General, who was the competent financial authority and he appointed the Tribunal. The proceedings of the Tribunal were forwarded to the contract sanctioning authority who thoroughly examined the same and in consultation with appropriate authorities in the Ministry of Defence, rejected the cases of revision of rates, in respect of the milk contracts of the petitioners. The decision of the competent financial authority who was Joint Secretary Ministry of Defence was communicated to the petitioners on 16-11-1984. The findings of the Tribunal appointed at the request of either party was subject to the final decision of the competent financial authority. The writ application arising out of the contract could not be enforced by this Court in exercise of its writ jurisdiction under Article 226 of the Constitution of India. The decision of the competent financial authority was conclusive and binding upon the petitioners according to the terms of the agreement executed between the parties. No oral or written request was received from the petitioners for supplying copy of the recommendations of the Tribunal nor could it be supplied. The recommendations of the Tribunal were forwarded to the authority viz. Joint Secretary Ministry of Defence for final decision and the petitioners were intimated of the final decision of the competent financial authority. The Tribunal was appointed considering the claims of the petitioners. Thereafter it was up to the authority empowered to accept or reject the recommendations of the Tribunal as per the provisions of the revisional clause and the decision of the said authority was binding on both the parties. The competent financial authority was not required to give any reasons for rejection/acceptance.
9. Petitioners have filed rejoinder submitting therein that the objections raised in para. 1 of the counter were ill-founded and misconceived. The jurisdiction of this court under Article 226 of the Constitution of India was much larger and could be exercised in the present case as the proceedings before the respondents were vitiated by illegalities and arbitrariness which have caused injury to them and substantial failure of justice. They have not disputed any question of fact but are challenging the actions of the respondents as being illegal, arbitrary, unjust and based on extraneous considerations. There has been no delay or laches in filing the petition as they have been trying to seek redress from the respondents till filing the petition. According to 15th Amendment Act of 1963, the High Court within whose jurisdiction the cause of action in whole or part arises can issue directions, writs or orders to any Government or authority notwithstandin that the authority or the Government is located outside their territorial jurisdiction.
10. I have heard the learned counsel for the parties and perused the documents placed on the record. In response to the tender notices the petitioners in writ petition No. 27 of 1985 offered to supply buffalo milk to military farms at Baramulla and Rajouri and petitioners in writ petition No. 28 of 1985 agreed for supply of such milk to military farms at Jammu and Srinagar. Agreements were executed between the parties in regard to those contracts. There was a revision clause in the said agreements which in fact is only relevant for the decision of these petitions and it runs as under : --
"The rates mentioned in the said schedule shall be subject to the revision in the manner and to the extent hereinafter specified viz :
(a) Provided that GOC-in-Command, in the case of contracts sanctioned by him or by the Government of India, is satisfied that a prima facie case exists for revision of rates, he may :--
(i) of his own motion, or by order, or
(ii) On written application by the contractor appointed for the purpose of recommending such revision of rates appoint a Tribunal consisting of : --
(aa) Officer sanctioning the contract or his representatives;
(bb) DDMF concerned or his representatives;
(cc) Deputy Commissioner/Collector of the civil district concerned or his representative. In case more than one civil district is concerned, Direct or of civil supplies/Director of Agriculture/Director of Industries of the State concerned or his representative will be asked to attend.
Provided that no such order/application shall be made or applied for until the expiry of twelve months from the date of commencement of the contract or half the period of the contract whichever is longer. Also thaf no such order shall be made or applied for after expiry of the period of the contract.
(b) The Tribunal on such day or days as may be appointed by them shall hear the parties hereto or their authorised representatives if present and make such enquiries from them or any sources as they deem fit, to determine the extent of the increase or decrease if any, in the wholesale market rates prevailing during the period of the contract preceding the application by the contractor or order by the Govt. over the wholesale market rates prevailing during the corresponding period preceding the date of commencement of the contract The Tribunal may call, for this purpose, the statement of accounts of the contractor, books and/or any other document which they deem relevant for investigating the claim of the parties hereto. The Tribunal shall also take into consideration the anticipated increase/decrease in the market rates for the remaining period of the contract based on the seasonal fluctuations in the prices. The contractor/contractors will make himself/themselves available at such places on such day or days and such time or times as fixed by the Tribunal and he/they will not claim any compensation whatsoever on this account. In the event of the contrator/ contractors not making himself/ themselves available as the Tribunal may direct, the Tribunal will be at liberty to proceed ex parte.
(c) The wholesale market rates for the purposes of Clause (b) will normally be rates published in station orders in respect of station(s) where the supplies are rendered The term (Station Order) shall mean and include orders issued by the Officer commanding the station. It will, however, be open to the Tribunal to ask the party applying for the review of rates to substantiate its claim by any other documentary evidence which the Tribunal may consider necessary.
(d) If the increse or decrease in the wholesale market rates as determined by the Tribunal vide Clause (b) above is 10% or less of the contract rates the Tribunal shall not recommend revision of the contract rates. If such increase or decrease is more than 10% of the contract rates (i.e. the rates in the said schedule) the Tribunal may recommend to the rates in the said schedule, up to the extent of the variation over 10%. The Tribunal may also recommend the date from which the revised rates should take effect. The acceptance or rejection of recommendation of Tribunal in whole or in part without assigning any reasons and from the date as recommended by the Tribunal or from any other date will rest finally with the following authorities : --
(i) In the case of contracts sanctioned up to Corps/Area/Division or lower level with the GOC-in-Command.
(ii) In the case of contract sanctioned at Command Level, with the OMC Army Headquarters;
(iii) In the case of contracts sanctioned by the QMG with the Joint Secretary, Ministry of Defence.
(e) The revised rates as approved by the relevant authority mentioned in Clause (d) above will be applicable from the date to be decided by that authority, subject to the condition that no revision of rates shall be authorized until the expiry of twelve months from the date of commencement of the contract or half the period of the contract, whichever is longer.
(f) The decision of the above-mentioned authorities as to the revision of rates and date of its operation will he final and binding on both the parties."
11. The contention of the petitioners is that there was an escalation of the price of buffalo milk and they thus invoked this clause. The Quarter Master General Army HQs, New Delhi in accordance with the provisions of this clause appointed a Tribunal comprising of Brg. J. S. Bains, Col. C. L. Luthra and Sh. H. U. Khan, Director Agriculture J. & K. Government. This Tribunal submitted its award/recommendations. Afterwards the petitioners were informed vide letter dated 16-11-1974 by the Deputy Director or Military Farms that the cases of the petitioners for revision of rates in respect of the contracts were thoroughly examined in consultation with the appropriate authorities and the same were rejected.
12. I would like to discuss the preliminary pleas raised by the respondents first. It may be said at the outset that there is no disputed question of fact involved in the cases. All facts on which the claim has been made by the petitioners and contested by the Government are admitted. The only fundamental right, of which infringement has been claimed by the petitioners-contractors is Article 14 of the Constitution of India, the bounds of which have by now been extended in the law laid down by the Supreme Court to include the striking down of any order which is arbitrary. Violation of any right or arbitrariness of the proceedings or orders affecting the civil rights of a citizen entitled a petitioner to appropriate relief. No alternative remedy in terms of the agreement has been suggested. The plea in that behalf has not been substantiated at all. The respondent's plea about the petition suffering from unexplained laches is also without substance, as it was the Central Government which took almost three years to come to a decision in not accepting the findings/recommendations of the Tribunal. The order of the Government was communicated to the petitioners in letter dated Nov. 16, 1984, delivered to the petitioner on Nov. 29, in that year. The petitioners claim to have spent some time thereafter in trying to obtain copies of the order and of the Tribunal's award. This petition was filed soon thereafter and cannot be said to be belated.
13. The half-hearted plea about this court for having jurisdiction to entertain the petitions under Article 226 of the Constitution has not been pressed with any seriousness. Even otherwise, part of the cause of action having arisen within this state, the territorial jurisdiction of this Court to enter tain or decide this petition cannot be questioned. Nor is there any force in the purely legal plea of the respondents that this writ petition cannot be entertained because the contractor seeks to specifically enforce rights arising out of a contract. Whatever rights the contractors had under and in terms of the contract have already been admittedly exercised by them. I It is allegedly constitutional manner of dealing with or disposing of their admitted right to claim revision of the contractual rights that have been impugned in these petitions. Those rights do not arise out of the contract; in fact, they are dehors the contract. The judgments referred to by the learned counsel for the respondent (AIR 1983 Delhi 478, AIR 1975 SC 1121 and AIR 1981 SC 1368) do not, therefore, support the case of the respondents at all The respondents have not been able to point out as to which clause of the contract the petitioners are seeking to enforce by this writ petition. It is the manner of exercise of rights by the respondents under the contract which is claimed by the contractors to be unconstitutional or violative of the contractor's fundamental rights. There is no doubt that the respondent is correct in pleading that this Court cannot hold enquiry into the justification or otherwise of the revision of rates in the price of milk on its merits. No such plea has, however, been either raised or pressed by the contractors. In fact their claim throughout has been that they merely want to the quasi-judicial decision of the Tribunal appointed by the competent , authority to be implemented, as there is no valid, legal, fair or other reason to debar from it or to throw the same overboard.
14. Another plea raised by the respondent which deserves to be dealt with is whether the signing of no demand certificate in form IAFA 451. Some time before the conclusion of the period of the contract, or at about that time bars the prosecution of the proceedings for revision of rates before the competent authority and, therefore, estops the contractors from filing these petitions. Admittedly, the petitioners claim for revision has not been rejected by the Joint Secretary to the Central Government or by any other authority on this ground. Had it been so, it would have been necessary for the court to examine this matter, as it would be a matter of great importance that such formal documents executed by the petitioners can at all be held to bar adjudication or decision on claims which have been admittedly preferred and on which all quasi-judicial proceedings have come to an end and mere final adjudication remained without being expressly given up and without there being any possible ostensible consideration for giving up the same merely because no demand certificate is signed by both sides. Moreover, a perusal of no demand certificate produced by the respondents shows that the only certificate on which the respondents rely talks of "no further claims ....in connection with or arising out of the said contract, which remain adjusted." The question of adjustment of the claim arising out of the application for revision of rates could not possibly arise at the stage when the no demand certificate was signed Moreover, the respondents cannot be permitted to take up, for the first time in this Court, a plea to defeat the claim of the petitioners which was neither ever raised at any stage before the Tribunal or the Central Government nor relied upon by the competent authority while passing the impugned order. There should, therefore, be no hesitation in rejecting this belated and farfetched plea.
15. This takes us to the main and real issue in the case i.e. whether the impugned order of the Joint Secretary to the Central Government declining to accept the recommendation of theTribunal and rejecting the claim of the petitioners is liable to be annuled or quashed on any of the grounds proposed by the petitioners and if so what relief can be granted to the petitioners in consequence of such annulment?
16. The learned counsel appearing for the petitioners has argued that the order rejecting the claims of the petitioners is non-speaking and it has been passed without assigning any reasons. According to him a competent Tribunal had given the award and it was not in the competence of the authorities to set aside that award/recommendation summarily, completely ignoring the principles of natural justice. The learned counsel for the respondents, on the other hand, has contended that in accordance with the revision clause the competent authority was not under obligation to assign any reasons for rejecting the claims of the petitioners and also the recommendations of the Tribunal and moreover, the decision of the authority in accordance with the abovesaid clause was final and binding on both the parties.
17. Before discussing the above referred contentions of either side, I would like to quote some of the authoritative pronouncements of their Lordships of the Supreme Court on these propositions. In Maneka Gandhi's case, reported in AIR 1978 SC597 it has been held as under : --
"There can be no doubt that it is a founding faith of the constitution. It is indeed the pillar on which rests securely the foundation of our democratic republic. And, therefore, it must not be subjected to a narrow, pedantic or laxicographic approach. No attempt should be made to truncate its all embracing scope and meaning, for to do so would be to violate its activist magnitude. Equality is a dynamic concept with many aspects and dimensions and it cannot be imprisoned within traditional and doctrinaire limits. We must reiterate here that was pointed out by the majority in E.P. Royappa v. State of Tamil Nadu (AIR 1974 SC 555) namely that "from a positivistic point of view, equality is antithesis to arbitrariness. In fact, equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic while the other to the whim and caprice of an absolute monarch. Where an act is arbitrary, it is implicit in it that it is unequal both according to political logic and constitutional law and is therefore violative of Article 14."
In Ramana Shetty's case (1979) 3 SCC 489 : (AIR 1979 SC 1628), their Lordships of the Supreme Court, after making a reference to rule enunciated by Mr. Frankfurter in Vitarelli v. Seaton (1959) 359 US 535 requiring the executive agency to be rigorously held to the standards by which it professes its actions to be judged observed as follows : --
"It is the rule of administrative law which has been judicially evolved as a check against exercise of arbitrary power by the Executive Authority -- there is no reason why we should hesitate to adopt this rule as a part of our continually expanding administrative law. To day with tremendous expansion of welfare and social service functions, increasing control of material and economic resourcesand large scale assumption of industrial and large scale assumption of industrial and commercial activities by the State, the power of the executive Government to effect the lives of the people is steadily growing. The attainment of socio-economic policy, there is a vast and inevitable increase in the frequency with which ordinary citizens come into relationship or direct encounter with state power-holders. This renders it necessary to structure and restrict the power of the executive Government so as to prevent its application or exercise. Whatever be the concept of the rule of law, whether it be the meaning given by Dicey in his "The law of the constitution" or the definition given by Hayek in his "Road to serfdom" and constitution of Liberty" or the exposition set forth by Harry Jones in his. "The Rule of law and the Welfare State" there is as pointed out by Mathew J. In "Democracy, Equility and freedom" substantial agreement in juristic thought that the great purpose of the rule of law notion is the protection of the individual against arbitrary exercise of power, wherever it is found." It is indeed unthinkable that in a democracy governed by the rule of law and executive Government or any of the its officers should possess arbitrary power over the interests of the individual. Every action of the Executive Government must be informed with reason and should be free from arbitrariness. That is the very essence of the rule of law and its bare minimal requirement. And to the application of this principle it makes no difference whether the exercise of the power involves affectation of some right or denial of some privilege.
In Ajay Hasia's case, AIR 1981 SC 487 their Lordships first referred with approval to their earlier pronouncement in E. P. Royappa'a case (1974) 2 SCR 348 : (AIR 1974 SC 555) wherein it had been held that in fact equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic while the other to the whim, and caprice of a absolute monarch. Where an act is arbitrary it is implicit in it that it is unequal both according to political logic and constitutional law and is therefore, violative of Articles 14 and 16 and if it affects any matter relating to public employment, it is also violative of Article 16. Articles 14 and 16 strike at arbitrariness in State action and ensure fairness and equality of treatment. It has further been laid down in this authority that in fact the concept of reasonableness and non-arbitrariness pervades the entire constitutional scheme and is a golden thread which runs through the whole of the fabric of the Constitution.
18. The above referred revision clause in the agreement provides the mode of appointment of a Tribunal consisting of the officers mentioned in it. The petitioners approached the Quarter Master Genaral Arms Hqs. for revision of rates specifying the grounds for invoking such clause and accordingly the Quarter Master General appointed a Tribunal strictly in accordance with this provision there is procedure prescribed under Sub-clauses (b & c) to be followed by the Tribunal. The Tribunal in accordance with sub-cl. (d) was required to recommend for the revision of rates, if any, and acceptance or rejection of the recommendations of the Tribunal rested with the Joint Secretary, Ministry of Defence in the present cases. What were the recommendations of the Tribunal were unknown to the petitioner and in this regard they have stated in para. (iii)(M) as under : --
"The award/adjudication/recommendation of the Tribunal not having been communicated to the petitioners for quite some time, the petitioners formally requested the Deputy Director of Military farms, Northern Command New Delhi for a copy of the said award and for implementation of the same. The petitioners were, however, advised by the authorities that the recommendations of the Tribunal had been forwarded to the Army Headquarters for final orders of the Joint Secretary of Ministry of Defence. They were further told that no copy of Tribunal's report/award could be made available to the petitioners."
In reply affidavits the respondents have stated so :--
"In reply to para. (iii)(M) it is submitted that no oral or written request was received from the petitioners for supplying of copy of the so-called recommendations of Tribunal nor could this be supplied. The petitioner, however, states of his own admission that the petitioner was informed by the authorities that the recommendations of the Tribunal had been forwarded to Army HQ for final orders of the Joint Secretary Ministry of Defence. The rejection order of 9 Nov. 84, therefore, should have been presumed by the petitioner to be that of the Joint Secretary Ministry of Defence, Govt. of India."
No record has been produced before this court to find out as to what were the recommendations of the Tribunal constituted by the Quarter Master General. The petitioners in para. 4 of the petitions have alleged that repeated requests were made for providing them with copies of the Tribunal's award but they were not supplied the same. In this regard the respondents reply is that there was no provision under the terms of the agreement for providing such copies of the recommendations of the Tribunal. Another important aspect in this regard to be noted is that the petitioners alleged in para 4 of their petition as under : --
"The petitioner reliably understand that the adjudication of the Tribunal was referred to the Ministry of Finance in the Govt. of India for checking and was found to be in order. The petitioners further believe on information received by them that the award of the Tribunal with or without the opinion of the Ministry of Finance was referred to the Ministry of Law for finding out any possible flaw or infirmity in the adjudication of the Tribunal and that the said Ministry was not able to find any such deficiency or any impropriety in the award and had confirmed that the decision of the Tribunal was according to law."
and in reply to this para the respondents have stated so : --
"Para. VI is denied because the allegations made in the para are vague and ambiguous. It is however submitted that the competent authority was well within its right in, performance of his duty to examine the proceedings of the Tribunal from financial legal and other angles before giving the decision."
In Sub-clause (d) of revision clause it is provided that the acceptance or rejection of recommendations of the Tribunal in whole or in part, without assigning any reasons and from the date as recommended by the Tribunal or from any other date, will rest finally with the Joint Secretary, Ministry of Defence. It comes out from Sub-clause (f) of the revision clause that the decision of the above, mentioned authority as to the revision of rates and the date of its operation will be final and binding on both the parties. Learned counsel appearing for the respondents has in fact laid stress on this provision contained in the revision clause which according to him gives powers to the named authority to reject the recommendations of the Tribunal without assigning any reasons and in accordance with this provision said authority rejected the recommendations of the Tribunal without stating any reasons. The letters received by the petitioners dated 16-11-1984 rejecting their claims are identical in nature and one of the letters reads as under : --
"PROCUREMENT OF BUFF MILK AT MILITARY FARMS BARAMULLA AND RAJOURI THROUGH CONTRACT (80- 82).
Dear Sir,
1. Refer your representation dated 20 Aug., 81.
2. We have been informed by the QMS Army HQ New Delhi that the cases for revision of rates in respect of the following contracts have been thoroughly examined in consultation with appropriate authorities and are rejected : --
S.No. Station Period
a) Baramulla.
11 Jan 80 to 30 Sept. 82.
b) Rajouri.
01 Jan 80 to 30 Sept. 82.
3. This is for your information.
4. Please ack.
(AUTH:-- QMG ARMY HQ Letter No. A/62874/Q/MF3/Q1/(B) dated 09 Nov. 84)".
This letter is quite silent about the reasons forrejecting the claims of the petitioners and also the recommendations of the Tribunal constituted by the Quarter Master General. It refers to certain authorities consulted before rejecting claims but nothing has been stated about the authorities consulted and their opinion. Now the point for determination is whether the competent authority was justified in rejecting the recommendations of the Tribunal, whatever it may be, without assigning any reasons and could its non-speaking order be sustained without confirming to the principles of natural justice. No doubt it cannot be stated as a wide proposition that the principles of natural justice would apply to all cases of administrative orders but such administrative orders in most of the cases have been held to conform to the principles of fair play and natural justice. We are living in an age of reasons and to come to an opinion arbitrarily is neither justiciable by the legal ethics nor equity. The administrative authority should never forget that any act of it is open to judicial review. Unless reasons are given by an administrative authority for its decision, finding, opinion or conclusion, it is not possible to hold as to whether it is based upon relevant facts. The requirement of giving reasons for the act of the administrative authority, which is extremely essential, is based upon the following sound principles of law, equity and justice : --
(i) To eliminate arbitrariness and ensure a just, fair and reasonable decision;
(ii) To allow an aggrieved person to make a representation against the decision of the authority; and
(iii) To make judicial review possible so as to ensure that the authority acted objectively and not on subjective, irrelevant and extraneous considerations.
In accordance with the revision clause contained in the agreement entered into between the parties a high level Tribunal consisting of three very superior officers was constituted and there was no reason for the authority nominated in the said revision clause to reject the recommendations of the Tribunal without assigning any reasons. Their Lordships of the Supreme Court in case, Chellappan v. Secretary Kerala State Electricity Board reported in AIR 1975 SC 230 have held that it is only when a proposition of law is stated in the award and which is the basis of the award and that is erroneous, can the award be set aside or remitted on the ground of error of law, apparent on the face of the record? The function of the Tribunal in the present cases was of a judicial nature and it acted judicially in arriving at a finding which was based on elaborate enquiry in which both the parties participated and led evidence. The authority to whom the duty was entrusted to look into the recommendations/award of the Tribunal was also required to exercise quasi judicial functions. In such matters, considering the law propounded by their Lordships of the Supreme Court in the above referred authorities, he was bound to observe the doctrine of natural justice. It is thus clear that the act of the authority in rejecting the recommendations of the Tribunal smacks of arbitrariness which cannot be sustained in law. The right conferred under the revision clause to the authority for not assigning any reasons does not, in any manner, change the course of law or the basic principle of fair play and natural justice which are of vital nature in deciding all such like matters as involved in the present petitions.
19. For the foregoing reasons, both the petitions are allowed and the order of the final authority communicated to the petitioners by the Deputy Director Military Farms under letter No. 40131/MF(DB) Tribunal dated 16-11-1984, not accepting the recommendations of the Tribunal and rejecting the claims of the petitioners is quashed. It is directed that the Joint Secretary, Ministry of Defence, Government of India, the final authority in accordance with the revision clause, shall pass an appropriate order, after considering the recommendations/award of the Tribunal and after hearing both the sides. There shall, however, be no order as to costs.