Orissa High Court
M/S.Bdn Food Products vs State Of Odisha And Ors. .... Opposite ... on 5 July, 2021
Equivalent citations: AIRONLINE 2021 ORI 182
Author: Biswanath Rath
Bench: Biswanath Rath
IN THE HIGH COURT OF ORISSA AT CUTTACK
WPC No.17276 of 2021
M/s.BDN FOOD PRODUCTS, .... Petitioner
Dhenkanal
Mr. L. Mishra and associates, Advocates
-versus-
State of Odisha and ors. .... Opposite Parties
Mr. Sukumar Ghosh, learned ASC for the State-O.Ps.1, 2 and5.
CORAM:
JUSTICE BISWANATH RATH
JUDGMENT
05.07.2021
1. This matter is taken up through video conferencing mode.
2. Heard the submissions of Mr.Mishra, learned counsel for the petitioner and Mr.Ghosh, learned Addl. Standing Counsel for the State.
3. Taking this Court to the manner of indication at Annexure-1, Mr. Mishra, learned counsel for the petitoner contended that no doubt there is pendency of F.I.R. on the alleged offence but unless the proceeding involving the F.I.R. culminate, no authority lies with the Collector, Dhenkanal to issue show-cause notice with a predetermined decision that the person directed to show-cause has already committed offence. Reading through the disclosures under Annexure-1, Mr.Mishra, taking this Court to the decisions of the Hon'ble apex Court in the case of K.I.Shephard Vs. Union of India : (1987) 4 SCC 431 and Oryx Fisheries Private Limited Vs. Union U.K.Sahoo Page 1 of 10 // 2 // of India & Ors. : (201) 13 SCC 427 contended that since the show- cause notice of the Collector, Dhenkanal has already come to hold that the petitioner has already committed the offences indicated therein, there may not be anything available for his further consideration pursuant to submission of response to show-cause by the petitioner and issuing such show-cause notice becomes an empty formality. It is in this view of the matter, Mr.Mishra, learned counsel for the petitioner requests for interfering in the show-cause notice and setting aside the order at Annexure-1 for being already a prejudged one.
4. Mr. Ghosh, learned State Counsel however reading through Annexure-1 though did not dispute to the manner of notice but however contested the writ petition on the premises that since the proceeding is at show-cause stage petitioner has got the scope of agitating the disputes raised herein and the matter may be left open for consideration of the concerned Collector. Mr.Ghosh, learned State Counsel taking this Court to the development through Annexure-4 submitted that for there is already direction to transit challan for procedure involving the petitioner, the apprehension of the petitioner remains premature. Sri Ghosh however has no dispute with regard to the position settled through in the case of K.I. Shephard and others Vs. Union of India and others : (1987) 4 SCC
431.
5. Hearing the rival contentions of the parties, this Court reading through Annexure-1 at Page-14 finds that Annexure-1 is a show-cause notice, which reads as follows :
Page 2 of 10// 3 // "It has come to my notice that on 11.05.2021 during 1.00 PM Smt. Lopamudra Dhal, Procurement Inspector, RRC-cum-DSC, Manisapat as ascertained from the FIR lodged in the Town Police Station, Dhenkanal by Smt. Dhal Besides this, you being a Custom Miller have also made attempt to snatch her Mobile, abused her physically, injured her inside the Godown & forced her to received inferior quality rice.
You are therefore directed to show cause as to why you shall not be blacklisted from procurement operation of the district on the above ground within 3 days from the date of receipt of this letter."
6. The Collector, Dhenkanal while issuing show-cause notice has the following clear observation:
"You being a Custom Miller have also made attempt to snatch away her Mobile, abused her physically, injured her inside the Godown & forced her to receive inferior quality rice."
7. Taking into consideration the submission of Sri Mishra that there is no proceeding ever undertaken by the Collector, Dhenkanal to come to above findings, this Court here observes the Collector here appears to have treated some allegations to be his own finding and contended that in absence of any determination of allegation of the person concerned by competent authority in the involvement of the petitioner, it becomes illegal on the part of the Collector to have such conclusive observations while issuing show cause notice and straight way proceeding to consider black listing petitioner on such unfounded allegations. This Court again observes in the event an F.I.R. involving such allegation is lodged, it is for the competent authority to come to such view in duly constituted proceeding after the trial is over. For the allegation made by the petitioner that there Page 3 of 10 // 4 // has been no enquiry involving such issue by any competent authority, this Court finds show-cause notice itself becomes bad.
8. This Court here taking into consideration the decision of the Hon'ble apex Court in K.I. Shephard (supra) finds through paras-9, 12,13, 15 and 16 has come to observe as follows :-
"9. Admittedly the excluded employees have neither been put to notice that their services were not being continued under the transferee banks nor had they been given an opportunity of being heard with reference to the allegations now levelled against them. Learned counsel for RBI and the transferee banks have taken the stand that the scheme-making process under section 45 is legislative in character and, therefore, outside the purview of the ambit of natural justice under the protective umbrella whereof the need to put the excluded employees to notice or enquiry arose. It is well-settled that natural justice will not be employed in the exercise of legislative power and Mr. Salve has rightly relied upon a recent decision of this Court being Union of India v. Cynamide India Ltd. (1987) 2 SCC 720 in support of such a position. But is the scheme-making process legislative? Power has been conferred on the RBI in certain situations to take steps for applying to the Central Government for an order of moratorium and during the period of moratorium to propose either reconstruction or amalgamation of the banking company. A scheme for the purposes contemplated has to be framed by RBI and placed before the Central Government for sanction. Power has been vested in the Central Government in terms of what is ordinarily known as a Henery-VIII clause for making orders for removal of difficulties. Section 45(11) requires that copies of the schemes as also such orders made by the Central Government are to be placed before both Houses of Parliament. We do not think this requirement makes the exercise in regard to schemes a legislative process.
Page 4 of 10// 5 // It is not necessary to go to any other authority as the very decision relied upon by Mr. Salve in the case of Cynamide India Ltd. (supra) lays down the test. In paragraph 7 of the judgment it has been indicated:-
"Any attempt to draw a distinct line between legislative and administrative functions, it has been said, is 'difficult in theory and impossible in practice'. Though difficult, it is necessary that the line must sometimes be drawn as different legal rights and consequences may ensue. The distinction between the two has usually been expressed as 'one between the general and the particular'. "A legislative act is the creation and promulgation of a general rule of conduct without reference to particular cases; an administrative act is the making and issue of a specific direction or the application of a general rule to a particular case in accordance with the requirements of policy". "Legislation is the process of formulating a general rule of conduct without reference to particular cases and usually operating in future; administration is the process of performing particular acts, of issuing particular orders or of making decisions which apply general rules to particular cases". It has also been said: "Rule-making is normally directed towards the formulation of requirements having a general application to all members of a broadly identifiable class" while, "an adjudication, on the other hand, applies to specific individuals or situations". But, this is only a broad distinction, not necessarily always true.
Applying these tests it is difficult to accept Mr. Salve's contention that the framing of the scheme under section 45 involves a legislative process. There are similar statutory provisions which require placing of material before the two Houses of Parliament yet not involving any legislative activity. The fact that orders made by the Central Government for removing difficulties as contemplated under sub-clause (10) are also to be placed before the two Houses of Parliament makes it abundantly clear that the placing of the Page 5 of 10 // 6 // scheme before the two Houses is not a relevant test for making the scheme-framing process legislative. We accordingly hold that there is no force in the contention of Mr. Salve that the process being legislative, rules of natural justice were not applicable.
12. Mullan in Fairness : The New Natural Justice' has stated :
"Natural justice co-exists with, or reflected, a wider principle of fairness in decision-making and that all judicial and administrative decision-making and that all judicial and administrative decision-makers had a duty to act fairly. "
In the case of State of Orissa v. Dr. (Miss) Binapani Dei , (1967) 2 SCR 625 this Court observed:
"It is true that the order is administrative in character, but even an administrative order which involves civil consequences as already stated, must be made consistently with the rules of natural justice after informing the first respondent of the case of the State, the evidence in support thereof and after giving an opportunity to the first respondent of being heard and meeting or explaining the evidence. No such steps were admittedly taken; the High Court was, in our judgment, right in setting aside the order of the State."
ln A.K Kraipak v. Union of India & ors., (1970) 1 SCR 457 a Constitution Bench quoted with approval the observations of Lord Parker in Re: (H) K (an infant) Hegde, J. speaking for the Court stated:
"Very soon thereafter a third rule was envisaged and that is that quasi-judicial enquiries must be held in good faith, without bias and not arbitrarily or unreasonably. But in the course of years many more subsidiary rules came to be added to the rules of natural justice. Till very recently it was the opinion of the courts that unless the authority concerned was required by the law under which it Page 6 of 10 // 7 // functioned to act judicially there was no room for the application of the rules of natural justice. The validity of that limitation is now questioned. If the purpose of the rules of natural justice is to prevent miscarriage of justice one fails to see why those rules should be made inapplicable to administrative enquiries. Often times it is not easy to draw the line that demarcates administrative enquiries from quasi-judicial enquiries. Enquiries which were considered administrative at one time are now being considered as quasi-judicial in character. Arriving at a just decision is the aim of both quasi-judicial enquiries as well as administrative enquiries. An unjust decision in an administrative enquiry may have more far-reaching effect than a decision in a quasi-judicial enquiry."
These observations in A.K. Kraipak's case were followed by another Constitution Bench of this Court in Chandra Bhavan Boarding and Lodging, Bangalore v. State of Mysore (1970) 2 SCR 600. In Swadeshi Cotton Mills v. Union of India, (1981) 2 SCR 533 a three-Judge Bench of this Court examined this aspect of natural justice. Sarkaria, J. who spoke for the Court, stated:-
"During the last two decades, the concept of natural justice has made great strides in the realm of administrative law. Before the epoch-making decision of the House of Lords in Ridge v. Baldwin : (1964) AC 40, it was generally thought that the rules of natural justice apply only to judicial or quasi-judicial proceedings; and for the purpose, whenever a breach of the rule of natural justice was alleged, Courts in England used to ascertain whether the impugned action was taken by the statutory authority or tribunal in the exercise of its administrative or quasi-judicial power. In India also, this was the position before the decision dated February, 1967 of this Court in Dr. Bina Pani Dei's case (supra); wherein it was held that even an administrative order or decision in matters involving civil consequences, has to be made consistently with the rules of natural justice.
This supposed distinction between quasi-judicial and administrative decisions, which was perceptibly mitigated in Bina Pani Dei's case (supra) was further rubbed out to a vanishing point in A.K. Kraipak's case (supra) ".
Page 7 of 10// 8 // On the basis of these authorities it must be held that even when a State agency acts administratively, rules of natural justice would apply. As stated, natural justice generally requires that persons liable to be directly affected by proposed administrative acts, decisions or proceedings be given adequate notice of what is proposed so that they may be in a position (a) to make representations on their own behalf; (b) or to appear at a hearing or-enquiry (if one is held); and (c) effectively to prepare their own case and to answer the case (if any) they have to meet.
13. Natural justice has various facets and acting fairly is one of them. RBI which monitored the three amalgamations was required to act fairly in the facts of the case. The situation necessitated a participatory enquiry in regard to the excluded employees. Since the decision to exclude them from service under the transferee banks is grounded upon a set of facts the correctness whereof they deny, if an opportunity to know the allegations and to have their say had been afforded, they could have no grievance on this score. The action deprives them of their livelihood and brings adverse civil consequences and could obviously not be taken on the ipse dixit of RBI officers without verification of facts. It is quite possible that a manoeuvring officer of the banking company adversely disposed of towards a particular employee of such bank could make a report against such employee and have him excluded from further service under the transferee bank. The possibility of exclusion on the basis of some mistake such as to identity cannot also be ruled out. There is all the more apprehension of this type as the process has to be completed quickly and very often the records of a large number of employees have to be scrutinised. We are of the view that rules of natural justice apply to administrative action and in the instant cases the decision to exclude a section of the employees without complying with requirements of natural justice was bad.
15. Fair play is a part of the public policy and is a guarantee for justice to citizens. In our system of Rule of Law every social agency conferred with power is required to act fairly so that social action would be just and there Page 8 of 10 // 9 // would be furtherance of the well-being of citizens. The rules of natural justice have developed with the growth of civilisation and the content thereof is often considered as a proper measure of the level of civilisation and Rule of Law prevailing in the community. Man within the social frame has struggled for centuries to bring into the community the concept of fairness and it has taken scores of years for the rules of natural justice to conceptually enter into the field of social activities. We do not think in the facts of the case there is any justification to hold that rules of natural justice have been ousted by necessary implication on account of the time frame. On the other hand we are of the view that the time limited by statute provides scope for an opportunity to be extended to the intended excluded employees before the scheme is finalised so that a hearing commensurate to the situation is afforded before a section of the employees is thrown out of employment.
16. We may now point out that the learned Single Judge of the Kerala High Court had proposed a post- amalgamation hearing to meet the situation but that has been vacated by the Division Bench. For the reasons we have indicated, there is no justification to think of a post- decisional heading. On the other hand the normal rule should apply. It was also contended on behalf of the respondents that the excluded employees could now represent and their cases could be examined. We do not think that would meet the ends of justice. They have already been thrown out of employment and having been deprived of livelihood they must be facing serious difficulties. There is no justification to throw them out of employment and then give them an opportunity of representation when the requirement is that they should have the opportunity referred to above as a condition precedent to action. It is common experience that once a decision has been taken, there is a tendency to uphold it and a representation may not really yield any fruitful purpose.
9. In view of discussion made hereinabove, the legal position on the above issue involved herein, this Court observes in the event there has been no fact finding report on the allegation of Smt. Page 9 of 10 // 10 // Lopamudra Dhal against the petitioner as of now, by any competent authority, the show-cause notice, since contained the determination of the Collector, vide Anneuxre-1, this Court finds the show-cause notice becomes illegal and not sustainable in the eye of law. This Court thus interferes and sets aside the same. This Court for setting the show-cause notice at Annexure-1 on the above technical ground observes there is no restriction however on the part of the competent authority for issuing appropriate show-cause notice if any required involving the petitioner and show-cause notice vide Annexure-1 has no existence.
10. With the above direction, the writ petition succeeds.
. 11. As the restrictions due to resurgence of COVID-19 situation are continuing, learned counsel for the parties may utilize a print out of the order available in the High Court's website, at par with certified copy, subject to attestation by the concerned Advocate, in the manner prescribed vide Court's Notice No.4587, dated 25th March, 2020 as modified by Court's notice No.4798, dated 15th April, 2021.
(Biswanath Rath) Judge Page 10 of 10